[Senate Hearing 105-776]
[From the U.S. Government Publishing Office]


                                           S. Hrg. 105-776, Pt. 1
 
       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                                   ON

                           H.R. 4103/S. 2132

  AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 1999, AND FOR OTHER PURPOSES

                               __________

                         PART 1 (Pages 1-650)

                         Department of Defense
                       Nondepartmental witnesses

                               __________

         Printed for the use of the Committee on Appropriations



 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate

                                 ______



                    U.S. GOVERNMENT PRINTING OFFICE
46-114 cc                   WASHINGTON : 1998


_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402
                           ISBN 0-16-057900-7





                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington             DALE BUMPERS, Arkansas
MITCH McCONNELL, Kentucky            FRANK R. LAUTENBERG, New Jersey
CONRAD BURNS, Montana                TOM HARKIN, Iowa
RICHARD C. SHELBY, Alabama           BARBARA A. MIKULSKI, Maryland
JUDD GREGG, New Hampshire            HARRY REID, Nevada
ROBERT F. BENNETT, Utah              HERB KOHL, Wisconsin
BEN NIGHTHORSE CAMPBELL, Colorado    PATTY MURRAY, Washington
LARRY CRAIG, Idaho                   BYRON DORGAN, North Dakota
LAUCH FAIRCLOTH, North Carolina      BARBARA BOXER, California
KAY BAILEY HUTCHISON, Texas
                   Steven J. Cortese, Staff Director
                 Lisa Sutherland, Deputy Staff Director
               James H. English, Minority Staff Director
                                 ------                                

                        Subcommittee on Defense

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            DANIEL K. INOUYE, Hawaii
ARLEN SPECTER, Pennsylvania          ERNEST F. HOLLINGS, South Carolina
PETE V. DOMENICI, New Mexico         ROBERT C. BYRD, West Virginia
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
MITCH McCONNELL, Kentucky            DALE BUMPERS, Arkansas
RICHARD C. SHELBY, Alabama           FRANK R. LAUTENBERG, New Jersey
JUDD GREGG, New Hampshire            TOM HARKIN, Iowa
KAY BAILEY HUTCHISON, Texas          BYRON DORGAN, North Dakota

                                 Staff

   Steven J. Cortese, Sid Ashworth, Susan Hogan, Gary Reese, Mary C. 
                Marshall, John J. Young, and Tom Hawkins

                         Administrative Support

                   Mazie R. Mattson and Justin Weddle

                             Minority Staff

          Charles J. Houy, C. Richard D'Amato, and Emelie East
  


                            C O N T E N T S

                              ----------                              

                      Thursday, February 26, 1998

                                                                   Page

Department of Defense: Office of the Deputy Secretary............     1

                        Wednesday, March 4, 1998

Department of Defense: Department of the Air Force: Office of the 
  Secretary......................................................    47

                       Wednesday, March 11, 1998

Department of Defense: Department of the Navy: Secretary of the 
  Navy...........................................................   131

                       Wednesday, March 18, 1998

Department of Defense:
    National Guard Bureau........................................   333
    Youth Challenge Program......................................   395

                        Wednesday, April 1, 1998

Department of Defense:
    Surgeon Generals.............................................   409
    Nurse Corps..................................................   471

                       Wednesday, April 22, 1998

Department of Defense: Ballistic Missile Defense Organization....   503

                         Wednesday, May 6, 1998

Department of Defense: U.S. Pacific Command......................   569

                          Monday, May 11, 1998

Nondepartmental witnesses........................................   613

                        Wednesday, May 13, 1998

Department of Defense: Office of the Secretary...................   785

                        Wednesday, May 20, 1998

Department of Defense: Secretary of the Army.....................   821
  


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                      THURSDAY, FEBRUARY 26, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:32 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Cochran, Domenici, Hutchison, 
Inouye, Bumpers, and Dorgan.

                         DEPARTMENT OF DEFENSE

                     Office of the Deputy Secretary

STATEMENT OF HON. JOHN HAMRE, DEPUTY SECRETARY


                 opening statement of hon. ted stevens


    Senator Stevens. The subcommittee will come to order. The 
subcommittee meets today to consider the administration's 
appropriations request for the Department of Defense for fiscal 
year 1999. We are glad to welcome before us the Honorable John 
Hamre.
    Dr. Hamre is now the Deputy Secretary of Defense. We have 
relied upon you heavily, not only Senator Inouye and myself, 
but the whole committee, for your advice during the time you 
were Comptroller. I am hopeful we can build on the relationship 
we already have with you and your colleagues, and we really 
congratulate the President on giving you this new 
responsibility and additional trust in the Department of 
Defense.
    Dr. Hamre. Thank you, sir.
    Senator Stevens. But today we are here to review the fiscal 
year 1999 defense budget. There is a very difficult series of 
financial choices we must make in terms of allocation of funds. 
I too believe that we are short going in. I think we could use 
some more money. I do not know whether in the process of what 
is going to go on this year we are going to get any additional 
moneys, but I know you are struggling to maintain the readiness 
of combat forces. We all want to improve the quality of life of 
our people in uniform, no matter where they are, and the 
contingencies that we face now are awesome.
    So we do not want to get involved in any particular issues, 
but clearly we have talked in the past about some of the 
meetings we have had with members of the armed forces around 
the world and how they have reported to us the excessive 
demands on them and the time that they have been away from 
their families. Now that is increasing rather than decreasing, 
and we have a situation here now where we have some burdens on 
our accounts because of moneys that have been spent in the 
past.
    I am not sure that the increase that is indicated, for 
instance, in operations and maintenance [O&M] of $3.3 billion 
really adequately takes into account some of the deficits that 
we have going into 1999. I am hopeful that we can work with you 
and to deal with the difficulties that we have here.
    I would say that, as staff has pointed out to me, we 
believe we are about $2 billion below in terms of the 
acquisition account in the modernization effort. It is not 
going to be, as I just told some of my colleagues, a pleasant 
year for appropriators. The House just told me, Dr. Hamre, that 
they feel they have 52 days left in session. We think we have 
about 70 days left in session.
    I am glad to see the chairman of the Budget Committee here. 
I think he alone is going to take the 70 days.
    Senator Domenici. Whatever you say.
    Senator Stevens. I mean, the issues involved that we have 
to face, we face them after he resolves his problems, is what I 
am saying.
    But I do again welcome you, and I am really delighted as 
the chairman of this committee to know that you are going to be 
working with us on these very difficult issues.
    Senator Inouye.


                   statement of hon. daniel k. inouye


    Senator Inouye. Thank you very much, Mr. Chairman. I wish 
to join you in welcoming Dr. Hamre. It is always a pleasure 
having you here with us. We have seen you go through your 
manhood rites to come to where you are today, and so we are 
well aware of your capabilities and potentials.
    Many commentators have said that we are increasing defense, 
and as far as I interpret it I look upon it a little 
differently. Although the dollar figures will show a $1.1 
billion increase in personnel, for example, actually it is a 
decrease when you consider inflation. And we are decreasing 
personnel in the Navy by 14,000, Army by 8,000.
    The same thing can apply to O&M funds. There is an 
increase, I believe, as far as dollars are concerned, of $0.4 
billion, but it is actually a real reduction of about 1.5 
percent. So I am, like you, concerned not only about 
modernization, but about readiness, and I do hope with your 
budget we will be able to accomplish those missions. You can be 
assured of our support.
    Thank you, sir.
    Senator Stevens. Senator Hutchison.


                 statement of hon. kay bailey hutchison


    Senator Hutchison. Mr. Chairman, I would just say that I 
too am very concerned. I was not quite sure what Senator Inouye 
meant when he said we have watched your rites of manhood, but I 
do not think I am going to pursue it.
    What I would like to say is that clearly we are building up 
in the Persian Gulf and Secretary of Defense Cohen has said 
that the edges are getting frayed with our defenses because of 
the troops we have in Bosnia, which now look like they are 
potentially going to be there for a longer term. And I would 
like for you to address in your testimony just how we are going 
to support another theater where there is a buildup in 
Southwest Asia.
    Certainly I am going to tell you right up front, I support 
a buildup there. I do not want to be over in the Persian Gulf 
with too few people. So I think that is a legitimate U.S. 
security interest. But if the Secretary of Defense says our 
edges are getting frayed, I want to know from where are these 
forces coming and how do you propose to deal with that and also 
ask for the continued troop commitment in Bosnia.
    So with that, I will just wait for your testimony and then 
ask you specific questions.
    Thank you, Mr. Chairman.
    Senator Stevens. Senator Dorgan.


                     statement of hon. byron dorgan


    Senator Dorgan. Mr. Chairman, I have no formal statement. 
Thank you for calling the hearing. I am anxious to hear the 
discussion today. And I thank you for opening the curtains. It 
is very unusual in committee hearings in Congress to have open 
curtains.
    Senator Stevens. Really?
    Senator Dorgan. It is. You almost never see them.
    Senator Inouye. See what you have done.
    Senator Hutchison. Fresh air.
    Senator Stevens. I did not know I had done it, but I am 
glad I did it. [Laughter.]
    Senator Dorgan. Well, thank you anyway.
    Senator Stevens. Well, we could get into some Alaskan 
comments about curtains. We put ours up in the summertime and 
take them down in the wintertime. You have to understand that.
    Go ahead, Senator Domenici.


                   statement of hon. pete v. domenici


    Senator Domenici. Well, I do not want to be a pest or a 
nuisance, but let me make sure that I understand. You intend to 
send us a supplemental for Bosnia?
    Dr. Hamre. Yes, sir.
    Senator Domenici. And the military will not have to go find 
that money? You will ask that it be over and above what was 
provided as the capped amount in the budget?
    Dr. Hamre. Yes, sir.
    Senator Domenici. So you ask that it be designated an 
emergency?
    Dr. Hamre. Yes, sir.
    Senator Domenici. Now, how much is that going to be?
    Dr. Hamre. Sir, we are in the final stages of----
    Senator Domenici. I do not know that we are supposed to be 
asking questions. Why do I not do that. I have got to wait my 
turn. I have got to wait.
    Senator Stevens. I thought perhaps you were leaving.
    Senator Domenici. No; let me turn it into a statement.
    Senator Stevens. We would be glad to have you ask a few 
questions.
    Senator Domenici. No; I will not do that. That is not 
right.
    I am just going to say that I am concerned that we not find 
ourselves once again in the position where the various chiefs 
have to come running to our offices saying they have to redo a 
budget which they thought they had already submitted, in order 
to find money for reprogramming and the like for Bosnia or 
Iraq. And I hope you can explain to us why--if we are going to 
have a different policy this year, what that policy is.
    I think everyone here should know that this issue was 
raised by Senator Stevens and I as we talked with the 
administration spokesman about Iraq.
    In addition, I hope you would address--[coughs]
    Senator Inouye. See what happens when you open the 
curtains.
    Senator Domenici. I have a little cold.
    Senator Stevens. It is all those neutrinos that are coming 
in through the window. [Laughter.]
    Senator Domenici. I am trying to be calm, too.
    Dr. Hamre. We need you to live through the markup, sir.
    Senator Domenici. I hope you will explain what we are to do 
about the different estimates of what your program costs 
between CBO and OMB. That is a lot of money. You estimate it at 
$3.7 billion less, which means if we follow your program we 
have to look for $3.7 billion to get down to, under CBO's 
number, to get to your budget.
    I do not think we ought to bear that whole problem. I think 
that ought to be borne by you all.
    Thank you very much, Mr. Chairman.
    Senator Stevens. I note the arrival of the distinguished 
Senator from Arkansas.
    Senator Bumpers. You noticed.
    Senator Stevens. Yes.
    Senator Bumpers. I do not have an opening statement. I know 
that breaks your heart.


                       introduction by dr. hamre


    Senator Stevens. Yes; I am delighted. It is going to be a 
nice afternoon. We are in the sunshine and the open.
    So we can proceed with your statement. I understand you 
have a series of charts. Is there any way that the public can 
see those charts? We have them in front of us.
    Dr. Hamre. Sir, I do not know. I know we did bring extra 
copies.
    Senator Stevens. Turn it around and let them see it. We 
will watch this one.
    Dr. Hamre. We will see what we can do to try to get it 
adjusted so that people can see it.
    Can I just say by way of introduction first off my sincere 
thanks for inviting me to come up. This is the first time I 
have had a chance to come before you as the Deputy Secretary. I 
think it is why our national motto is ``In God We Trust'' that 
I am here, and I am grateful that you would let me come up. 
Thank you.
    I also would say, on a very personal note, probably the 
most unusual privilege that anyone has is a chance to serve as 
a comptroller because in that capacity you get the chance to 
work with Congress in the most professional and responsible 
ways. The courtesies that you extended me, Mr. Chairman and 
Senator Inouye, to bring me into your trust so that I could 
help build a program was an enormous professional honor and 
experience, and I am very grateful for it and I thank you for 
much.
    Today I would like to try to go through very briefly an 
outline of the President's proposal that Secretary Cohen would 
have given had he been here, and he will go through, of course, 
with you later on in the year. I will be very quick so that we 
can get into the questions because I think that those are more 
important to you.
    Sir, we did have copies that were distributed, so I think 
that people in the audience----
    Senator Stevens. People out there have them?
    Dr. Hamre. I hope they do. I think we brought a bunch of 
copies.
    Senator Stevens. All right, very good. Thank you.

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

                          New Defense Strategy
    Shape international environment
  --Sustain presence and support engagement
    Respond to full spectrum of crises
  --Protect readiness and force structure by reducing overhead
    Prepare now for uncertain future
  --Accelerate modernization and exploit Revolution in Military Affairs
                     QDR Program is strategy driven

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

                          New defense strategy

    Dr. Hamre. Let us begin. First, this budget is the first 
budget that the Secretary is actually submitting, because this 
is the one that reflects the quadrennial defense review, 
reflecting the strategy that he helped build last spring. There 
were three large elements to that strategy: to help shape the 
future, to respond to crises that come up, and then to prepare 
for the long term.
    Shaping the future is obviously probably one of the 
smallest parts of our budget, but I would argue one of the most 
important parts. For example, you the Senate are prepared to 
now enter into a discussion about whether we should expand NATO 
and bring in three new partners. That is very much an issue of 
shaping the future. I know it is going to be a controversial 
subject, one that is going to take a lot of debate, and there 
should be a lot of debate because it is an enormously important 
issue. But how we approach that is the way in which we are 
shaping our security forces, our security posture in the 
future.
    Responding is very much the day-to-day business of the 
Department, and, of course, these last 2 months have shown that 
we still live in a perilous time and there still are demands. 
We just this hour are still flowing forces into the Persian 
Gulf region as we are bringing everybody into theater that the 
Secretary and the President mobilized in the last weeks or so. 
This is the bread and butter business of the Department, to be 
able to respond to emergencies like we are seeing right now. 
That obviously consumes a major portion of our budget.
    I think this also is where we have the readiness 
challenges, and I will talk about that in a few minutes.
    Then finally, preparing for the future is very much about 
building the weapons systems and building the personnel for the 
future. It is not just weapons, although we clearly need to do 
that, and we have gone too far in our procurement holiday, as 
the Secretary says. We really need to start getting 
modernization back, as you said, Mr. Chairman, in your opening 
statement. And I will talk about each of those in subsequent 
charts.

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

                        BALANCED BUDGET AGREEMENT
                   [Function 050 dollars in billions]
------------------------------------------------------------------------
                                              Fiscal year--
                               -----------------------------------------
                                1996  1997  1998  1999  2000  2001  2002
------------------------------------------------------------------------
Administration Proposal.......  257.
                                 8    254.
                                       4    ....  ....  ....  ....  ....
Congressional Adds............  +8.2  +11.
                                       8    ....  ....  ....  ....  ....
                               -----------------------------------------
      Total...................  266.
                                 0    266.
                                       2    ....  ....  ....  ....  ....
                               =========================================
National Defense Topline......  ....  ....  267.
                                             6    270.
                                                   6    275.
                                                         9    283.
                                                               8    287.
                                                                     1
Projected Deficit.............  107   22    10    ( \1
                                                  \ )   ....  ....  ....
------------------------------------------------------------------------
\1\ Deficit calculations include $3 billion allowance for costs of
  extending Bosnia peacekeeping mission and domestic emergencies.

         Agreements sets zero-sum framework for budget changes

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

              Fiscal resources--balanced budget amendment

    First let me just frame the overall fiscal context. What I 
am showing you on this chart is the budget resources. If you 
look, everything to the right side of that red line, vertical 
line, the 1998 through the year 2002, those are the dollars 
that were agreed on in the budget resolution last year, the 
balanced budget amendment and the budget resolution. And those 
are the dollars to which we have built a defense program.
    Now, I need to point out, as Senator Domenici raised 
earlier, in 1998 and in 1999 there are additional funds that 
will be required for a supplemental for Bosnia and for Iraq in 
1998 and for ongoing operations in Bosnia in 1999. Those are 
issues that go beyond the balanced budget amendment, so it does 
require an emergency designation in fiscal year 1998 so that it 
does not come from the Department of Defense totals.
    For fiscal year 1999 it would come out of the allowance 
that was included in the budget submission, and the President's 
budget included $3 billion for Bosnia and for any other 
emergencies that might come up.
    Senator Stevens. Your chart is interesting, Doctor, but I 
notice the projected deficit. That was not part of the budget 
agreement. The budget agreement was it would be zero in 2002. 
And I know we are projected to get there sooner.
    Dr. Hamre. Yes, sir.
    Senator Stevens. But the impression might be made to some 
people that it's the defense spending that is leading to the 
deficit.
    Dr. Hamre. I am sorry, I do not mean to mislead anybody, 
and you are right to point it out. At the time the balanced 
budget amendment was reached, of course, the projected deficit 
was not going to get to zero until further out into the future. 
The economy has performed better and it has obviously brought 
it back, so that we are getting to it sooner.
    Defense, we are staying on the path that we were given last 
year, and we have built a program around that path. We could 
not accommodate the extra costs of Bosnia and Iraq inside that 
spending cap, and that is why we are going to have to ask for 
supplemental funding and it is being made an emergency 
designation.
    Next chart.

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

                      Major Readiness Initiatives
People
    Address perstempo concerns with new unit management systems and 
reducing lower priority exercises
Training
    Maintain OPTEMPO levels
Equipment
    Increase funding for maintenance and spares
         Maintaining high readiness requires constant vigilance

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

                      major Readiness initiatives

    Let me first talk about readiness, and this is simply to 
organize. These are to organize my thoughts. But obviously your 
concerns are foremost about readiness, and I know you have 
heard many concerns. You have been out in the field and you 
have heard concerns about readiness, and I think we do have 
readiness issues and problems that we have to deal with.
    Obviously, I think there are three major ones. One is, of 
course, the problem with pilots and the pilot shortages we are 
experiencing in the Air Force and the Navy, and that is very 
serious. It is very hard to deal with that problem because the 
airlines are hiring and the optempo is high and it is very 
stressful. Everything that the Air Force was planning to do to 
try to mitigate some of that, of course, now had to be set back 
when we had to deploy to the Persian Gulf. So it is a problem. 
That is a real challenge this year.
    Senator Stevens. If I could interrupt you again, it is 
worse than that. The reenlistment rate of our pilots throughout 
the services is abysmal. If you think about it, whether it is 
flying the no-fly zone in Iraq or the so-called cap over Bosnia 
or the protection in South Korea, these people who are trained 
to be high performance combat pilots are out there flying 
squares 4 and 5 hours a day, month in and month out.
    I think that none of us have really looked at the 
disincentive to someone, to train them to be high performance 
people and then get them out there to fly what could be flown 
by people in their first year as a pilot. I do not know what 
the answer is, but it is going to get worse before it gets 
better until we find a solution for that drudgery duty that has 
been given to pilots in terms of these peacekeeping activities.
    Dr. Hamre. Sir, we saw the reenlistment rates fall sharply 
last year, and that was an early warning signal that we had 
problems. We put out more money and put out bonuses to try to 
get a higher reenlistment rate, but frankly it has fallen 
short. And that is going to be a problem, to hold onto good 
pilots.
    Senator Hutchison. Twenty-nine percent this year.
    Dr. Hamre. Yes, I know.
    Senator Hutchison. A $60,000 bonus.
    Senator Bumpers. What is that, Kay?
    Senator Hutchison. A $60,000 bonus they offer, and 29 
percent took them up on it this year.
    Senator Stevens. We had a 29-percent reenlistment rate.
    Senator Hutchison. As opposed to 60 percent last year. 
Unbelievable.
    Dr. Hamre. Yes; it is going to be a real challenge. That is 
clearly a major challenge.
    A second area where we were having I think readiness 
problems was in the area of infantrymen in the Army. There were 
lots of stories about holes in infantry units and squads out in 
the Army, and as they were sending units to Bosnia, for 
example, they were filling them up to 100 percent and that left 
even more shortages out at home station here.
    That was really a product of the Army fell short on their 
recruiting goals for 11 Bravos, for infantrymen. We put on some 
extra funds, the Army did. They put on extra recruiters. They 
needed to basically recruit an extra 5,000 people. And I 
actually think that problem is starting to get fixed, although 
it is going to take us another couple of months to start seeing 
that in the force.

                              Spare parts

    A third area that I think we have real readiness challenges 
is in spare parts. Through your help--and frankly, it would be 
a lot harder this year if it had not been for your help last 
year. We asked you to provide an extra $600 million for spare 
parts for the Air Force and for the Navy, and you did that, and 
I thank you for it, because if it had not been for that we 
would have a much more serious problem in spare parts this 
year.
    Based on that, we added an extra billion dollars this year 
for spare parts for the Navy and for the Air Force. Part of 
this is we are operating older fleets. These air fleets are now 
starting to age almost year for year because we are not buying 
sufficient numbers of replacement aircraft, and older things 
take more maintenance every year. And our models were not 
properly calculated to capture the cost of this aging 
inventory. So that was a big reason why we were falling behind.
    You helped us get caught up on that, and you will see in 
the chart in just a minute we have added a fair amount of money 
in O&M to try to avoid those kinds of readiness problems.
    But let me show you the next chart, actually, that paints 
that picture.
[GRAPHIC] [TIFF OMITTED] T02FE26.000

                Operation and maintenance [O&M] funding

    A year ago our budget was on that lower blue line on the 
right, where it says ``Pre-QDR,'' quadrennial defense review. 
That is where we had planned on budgeting. And what I am 
showing you here is O&M dollars by end strength, so I am trying 
to normalize for changes in force structure.
    As you can see, we have added a fair amount of money to get 
us back on a trend line to support readiness in the out-years. 
So we recognize that this is something we are going to have to 
watch and monitor very closely.
    Next chart.

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

                          Contingency Funding
    Extend Bosnia operations beyond June 1998
    Propose emergency supplemental for fiscal year 1998 and fiscal year 
1999 costs (being developed)
    Additional fiscal year 1998 funds for Southwest Asia
    Rapid approval essential to protect readiness

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

                          Contingency funding

    On contingency funding--and Senator Domenici initiated 
this--the President has decided and NATO has asked that we 
extend in Bosnia past June. We will be submitting, I believe on 
Monday--we are submitting to OMB by Friday, I believe--our 
estimates of the supplemental costs for Bosnia. We hope to be 
able to get it by Friday as well for Iraq. We will be 
submitting that to you, I hope, by the end of next week.
    What we know now for the Bosnia operation, to extend 
through fiscal year 1998 is probably going to be around $600 
million. It will cost us about $600 million more for Bosnia in 
fiscal year 1998, and we will have to be asking for help on 
that as an emergency designation. That does begin the process 
to finally bring us down to the new levels, to 6,900 personnel 
in Bosnia.
    For Iraq, I know everybody is questioning where are we on 
Iraq. All I can tell you right now is that I know what the 
costs are associated with the actions that have been taken to 
date, that is to deploying the extra forces over there, to put 
the extra carrier there, to put in the brigades and that sort 
of thing. Right now we have either spent or committed ourselves 
to about $600 million more.
    The question that we face is what do we do at this stage, 
and are we going to keep that force at this level? Obviously, 
we see the agreement that has been initialed by Iraq, but I 
think, as the President said and I think most Members of 
Congress have said, we have to see the proof in the pudding. We 
want to see if that is going to be honored or not.
    So we are going to be keeping those forces in theater for a 
while longer. There are some important policy decisions that 
are underway right now to decide how much longer and at what 
level, and that will ultimately decide what the level is we 
will ask for your help. Hopefully, we will get that next week.
    May I just ask--and I know how pressed you are going to be, 
but it is very important, if possible, to get passage of a 
supplemental by the first part of April. It is I know very 
difficult to do that, and I know you have got other challenges 
with the IMF issue on your plate, and I know that there is the 
U.N. arrearages issue that is on your plate. Obviously, now 
with the tornadoes in Florida there will be some real 
challenges.
    We are right now borrowing against our fourth quarter 
optempo funds to pay for the situation in Bosnia and Iraq, 
because we have told people not to change their training 
program because we intend to ask for a supplemental to get 
additional funding. So we really do need to secure that, if 
possible, by the first part--by the end of the second quarter, 
which would basically be April 1, if that can be possible.
    Next chart.
    [GRAPHIC] [TIFF OMITTED] T02FE26.001
    
                              BRAC funding

    Senator Stevens. We are not even going to get that until 
the week after next, as I understand it?
    Dr. Hamre. I believe they are going to try to get it up to 
you by the end of next week, sir. That I believe is the goal. 
So that gives 4 weeks to review, and I know that is not a lot 
of time. But we will bend any effort to provide any information 
that people need to try to review it during that period.
    May I show you--as you know, the Secretary has asked for 
two more rounds of BRAC. I know there is no more controversial 
issue that I could bring up than BRAC, but I did want to put 
before you what has been our history with base closures so that 
you have a chance to see. We genuinely are saving substantial 
sums from the four rounds of base closures.
    The heavy green portion shows you the net cumulative 
savings that we have achieved from the four rounds of base 
closures. And as you can see, by 2002 we will be saving 
annually $5.6 billion. The green line on the top is how much we 
are saving each year and the red line is how much it costs, and 
it has cost a lot of money to move things around and to 
modernize facilities. But the net savings are positive, they 
are occurring right now, and it is substantial savings. It is 
5.6 billion dollars' worth of savings by 2001 and from that 
point on.
    We are asking for legislation----
    Senator Bumpers. Is that on an annual basis, Dr. Hamre?
    Dr. Hamre. Yes, sir, that is the annual savings, $5.6 
billion a year.
    We will be asking and we are asking legislative authority 
to have two more rounds of base closures, one in 2001 and 
another round in 2005. Of course, we are dependent on your 
sufferance to do that. We understand that. But it is so very 
important for us to be able to shrink that infrastructure. But 
again, I understand this is very controversial.
    Next chart.

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

                                                    PERSONNEL
                                           [End strength in thousands]
----------------------------------------------------------------------------------------------------------------
                                                           Current
                                                             end
                                                 Fiscal    strength    Fiscal     Fiscal   Additional
                                               year 1998    floors   year 1999  year 2003  reductions   QDR goal
                                                            fiscal
                                                          year 1998
----------------------------------------------------------------------------------------------------------------
Active Military:
    Army.....................................        492        488        480        480  ..........        480
    Navy.....................................        396        387        373        369  ..........        369
    Marine Corps.............................        174        173        172        172  ..........        172
    Air Force................................        377        372        371        344          -6        339
                                              ------------------------------------------------------------------
      Total Active...........................      1,439      1,419      1,396      1,366          -6      1,360
                                              ==================================================================
Selected Reserves............................        920        886        877        837          -2        835
Civilians (FTE's)............................        786        770        747        672     \1\ -32        640
----------------------------------------------------------------------------------------------------------------
\1\ These additional reductions will result from further A-76 competitions proposed as part of the Defense
  Reform Initiative.

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

                        Personnel end strengths

    These are our personnel strength levels. I do need to point 
out one thing particularly and that is if I might bring your 
attention to 1998, the column that I have in the red box. The 
reason I have to point that out to you is those numbers that 
were stipulated in that column were actually mandated in the 
authorization bill, which was passed last year after you passed 
the appropriations bill. You did not appropriate enough money 
to maintain these force levels. You actually appropriated what 
we asked for. But we were directed in the authorization bill to 
maintain more forces than we need.
    So we are being forced to divert between $100 million and 
$200 million to cover more forces than we need by the 
authorization act. So I just want to point out, we do not yet 
have a basis for covering that, but that is going to be 
something we are going to have to do during this year. It will 
probably be the subject of a reprogramming later in the year.
    Next chart.

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

                     Reserve Component Initiatives
Process
    Reserve Components play greater role in budget process
    2 new major generals to advise Chairman, JCS
Resources
    Increased OPTEMPO funding
    Higher Reserve Component equipment spending
New missions
    Respond to domestic use of weapons of mass destruction
    Redesign to increase combat service support

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

                     Reserve component initiatives

    On the issue of Reserves--and I know that there was a great 
deal of controversy up here in Congress last year on the issue 
of Reserves, especially with the National Guard and the active 
duty Army. We have taken this very seriously. We cannot have a 
house divided. We need very much for the Army and the National 
Guard and the Army Reserve to be working together, and we have 
taken a lot of steps to try to correct that problem.
    We have brought in the Reserve components this year as we 
never have before into the budget process. This year I made 
sure that each of the Reserve component chiefs sat in our DRB's 
to go over our budget with us. This year, for the first time in 
the five budgets that I helped build at the Department, the 
first thing on the Army's list when they wanted an addon was 
actually for National Guard optempo this year, and we put 
additional funds for National Guard optempo.
    This 5-year plan adds $2.5 billion for equipment for the 
National Guard for the division redesign. So we have made very 
substantial efforts to try to address the problems that were I 
think underlying the dispute between the Army and the Army 
Guard last year, and would ask to have a chance to talk with 
you in greater detail about that during the year.
[GRAPHIC] [TIFF OMITTED] T02FE26.002

                         Weapons modernization

    On the issue of modernization, the Secretary made a very 
high priority on trying to stay on that ramp. You will recall 
the last 3 years, every year we gave you a forecast of 
increasing spending in the out-years, and we never made it. 
This year we are on the path that we outlined this spring and, 
as you can see at the right-hand side where it talks about the 
budget, the solid line and the dashed line, they overlay each 
other.
    The solid line is what we said we wanted to do in the QDR 
and the dashed line is what we achieved and have submitted to 
you in the budget. And we have made our procurement goals. We 
are going to get up to $60 billion by 2001 with this budget 
plan.
    Senator Stevens. Let me make sure I understand it before 
you leave there.
    Dr. Hamre. Yes, sir.
    This is what we had said we wanted to achieve in the 
quadrennial defense review when the Secretary did it back in 
May, and this is the budget we are submitting to you. We fell a 
little short in 1999, about $300 million short. Last year we 
fell about $4 billion short in procurement compared to our 
forecasts. But we made it in the out-years, with the exception 
of $300 million short in 1992. But basically, this year we were 
able to sustain the modernization plan that we had forecast.
    Senator Stevens. Well, I hate to put it this way and sound 
political, but you are assuming the administration that comes 
after this one is going to be a lot more favorable to defense 
than you have been. That is a tremendous increase if you look 
at it. It is going from $54 billion to $61 billion, and then 
there is another $3 billion in there. We are talking about an 
increase of $19 billion over this year's budget.
    Dr. Hamre. Senator Stevens, we are doing this, but it is 
inside the top line, inside the balanced budget agreement top 
line that we reached between the executive and the legislative 
branches. So we think it is sustainable. We hope we can do it.
    And it is solidly priced. I would say I think there is a 
good program here, and it is in detail in the FYDP we submitted 
to you.
    Senator Stevens. I would be a lot more confident if that 
curve was up there right now.
    Dr. Hamre. Yes, sir, I would, too.
    Senator Stevens. Thank you.

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

                   Recruit and Retain Quality People
    Compensation: 3.1 percent pay raise
    Commissaries: Increased funding and returned to Services control
    Medical: Increased funding and Medicare subvention pilot
    Housing: Privatization used to leverage housing budget
     Maintaining high quality people critical to Joint Vision 2010

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

                   Recruit and retain quality people

    Dr. Hamre. Finally, on our people. And, of course, this 
always is our first priority when we build a budget. There is a 
3.1-percent pay raise for the troops in 1999 and the full legal 
pay raise throughout the FYDP. We have fully protected the 
commissary benefit, and we have returned the management of the 
commissary system back to the services, so that they now are 
the board of directors for the commissaries.
    Last year when we gave you our budget we had a hole in our 
medical program and this year we have added about $2.5 billion 
across the FYDP to plug that hole. So I think that this year we 
are not going to give you a broken program with medical. There 
is a minor issue, about $30 million, but this year I think it 
is not broken like it was last year. We have a better 
Comptroller this year.
    Finally, on privatization for housing. I will be honest to 
say I am disappointed with our numbers for housing. We are not 
doing an adequate job in building housing, replacement housing 
for the military. Frankly, we cannot do it without the 
privatization program and authorities that you gave us, so we 
need to build on that. But it is not adequate even at this 
level.
    Last chart, Bob.

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

                                Summary
    Balanced QDR strategy of shape, respond, and prepare drives fiscal 
year 1999 program
    Readiness and force structure depend on DRI proposals to reduce 
overhead
    Modernization targets achieved
    Joint Vision 2010 concepts exploit RMA
    Treat people as our most important asset

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

                                summary

    Finally, I think what we are submitting as a budget, it is 
capped by the dollars that were in the balanced budget 
amendment. We think it is a balanced program, and it is a 
program that grows out of the strategy that was developed by 
the Secretary this spring.
    Obviously, it depends on getting supplemental funding to 
pay for the ongoing operations in Bosnia and Iraq. We cannot 
hold the program together without that. We will have very 
serious readiness problems. We already have significant 
readiness challenges. We will have very serious readiness 
problems if we do not get supplemental funding.
    We think that we are able to sustain the modernization 
program because it is inside the overall targets. Finally, let 
me say, again, to say thank you to you, Mr. Chairman, and to 
all this committee for consistently being a bedrock support for 
the Department of Defense. I know that you are confronted by so 
many pressures, this committee confronts so many pressures, but 
that you have consistently been with the Department and with 
its personnel through tough times and good times. We are very 
grateful for that, and I especially appreciate being invited to 
come up today.
    Thank you, sir.

          BRAC savings--personnel cuts and environmental costs

    Senator Stevens. Well, thank you very much for being here. 
I cannot say that we are overly pleased, at least that I am 
overly pleased, with this budget as far as defense is 
concerned, because I see so many shortfalls right now, and I do 
not really know how we are going to correct those without 
money. Hopefully, we will get into some discussions later about 
how much will be involved in the emergency part of the 
supplemental.
    You think we will get that by next Friday?
    Dr. Hamre. Sir, as a matter of fact there is a meeting 
going on at 4 o'clock today to work out the final details. 
Everybody's plan is to have it up to you by the end of next 
week, yes, sir.
    Senator Stevens. Well now, tell me. A significant portion 
of that green you had up there was savings in people, not in 
operation of bases, was it not?
    Dr. Hamre. A lot of it was people, yes, sir.
    Senator Stevens. You could save that--that does not come 
from closing bases. That comes from discharging people, not 
reducing end strength, right?
    Dr. Hamre. Sir, I will have to give you a breakout as to 
what portion of that was people and what part is actually 
overhead and O&M dollars that go with facilities, and I will be 
glad to do that.
    [The information follows:]

    Sir, as I stated the bulk of the net savings from BRAC 
depicted in the green shaded area of my slide is related to the 
elimination of military and civilian personnel. Between fiscal 
year 1996 and fiscal year 2002, the Department estimates that 
it will generate net savings of about $17.5 billion. Of this 
amount, we estimate that 60 percent, or about $10.5 billion, 
can be attributed to BRAC savings from the elimination of 
personnel. These BRAC savings exclude savings from force 
structure reductions that would have occurred with or without 
BRAC. The personnel that have been eliminated here are directly 
involved in base operations support (BOS). BRAC savings can be 
grouped into those that recur and those that are one-time 
savings. The vast majority of BRAC savings are recurring, i.e., 
they represent a permanent, ongoing reduction in planned 
spending. Personnel positions eliminated through BRAC are an 
example of recurring savings. One-time savings do not recur 
year after year. For example, the cancellation of a planned 
construction project would represent a one-time saving. Over 
time, the value of recurring savings is the largest and 
therefore most important component of BRAC savings. While the 
exact number of positions eliminated by BRAC is subject to some 
uncertainty, I believe the savings estimates related to 
personnel reductions are reasonable.

    Senator Stevens. Now, are the accumulated environmental 
costs for the bases that have been closed, are they quantified 
in there?
    Dr. Hamre. Sir, what I showed you were the annualized costs 
of environmental cleanup, but not the full liability associated 
with cleanup of those bases. Some of those liabilities will go 
out for some time into the future.
    Senator Stevens. I am told the environmental cost deficit 
is greater than the savings so far.
    Dr. Hamre. Sir, the environmental costs are there whether 
we close the base or do not close the base, because of the 
liabilities to clean it up if we are there or not there. What 
we budget is showing you the annual increment, and I have 
showed those on a net basis, but just for what we have been 
spending in those years for the cleanup.
    But the environmental bills are large, yes, sir.
    Senator Stevens. Well, I am not going to argue that, but I 
do think that some of those costs do not really occur until 
there is a thought to turn it into a nondefense activity, at 
which time there is an obligation to clean up the environmental 
accumulation of years of use as a military base. But those, we 
are not cleaning all of those up. We are making them habitable 
and eliminating the hazardous environmental concerns, but we 
are not really restoring the soils and all that throughout the 
bases that are continuing to be operated. Am I wrong?
    Dr. Hamre. No, sir, you are not wrong. When we transfer a 
facility, we will probably have a negotiated arrangement for 
the continuing cleanup, for example, of a subsoil pollution 
source, that we will continue to do even after the transfer, 
and will bear the responsibilities for doing that. The costs 
for that will go beyond the 5-year plan that is shown here.
    But in many cases we will have the cleanup accomplished 
before it is actually turned over. Most cases not.

                          NATO expansion costs

    Senator Stevens. As far as I am concerned, the jury is 
still out on NATO expansion. I do not think that there are many 
that still share my views on that, but I understand you have a 
$400 million cost now for 10 years for the portion of the NATO 
costs and that is all it is. It is down from over $100 billion 
to $400 million?
    Dr. Hamre. Sir, we submitted an analytic study that 
outlined what was the hypothetical cost associated with NATO 
expansion, and I think it was something like $27 billion in our 
estimate.
    Senator Stevens. That was yours. There was one that was 
over $100 billion.
    Dr. Hamre. Yes; CBO had a great big one. I think ours was 
something like $27 billion. There were a number of things that 
differ here. One is at that time that study assumed that there 
were four countries involved. It was not based on any detailed 
engineering or detailed inventory of the state of the 
facilities. It basically assumed we had to build brand new 
facilities in these new countries, which it turned out we did 
not have to do. It also had some operative assumptions about 
that their command and control was going to have to be totally 
replaced and we would have to buy all new things, that sort of 
thing.
    This new estimate, which is the $1.5 billion, of which the 
United States share is $400 million, that is based on a fairly 
detailed study that NATO conducted, looking at each country, 
looking at each installation, looking at all of their command 
and control systems, and finding out what genuinely has to be 
bought new. And our cost share would be about $400 million.
    We would be glad to provide that to the committee and to go 
through it with anybody to evaluate it and assess the 
underlying assumptions and numbers.
    Senator Stevens. The Secretary told us that the details of 
the costs of NATO expansion would be available to us long 
before the vote on the NATO enlargement, and now it seems that 
you are relying upon a NATO analysis rather than your own. You 
are throwing out your own that was $26 billion over 10 years 
and taking theirs that says $400 million over 10 years.
    Dr. Hamre. Sir, the study that we did that said $27 billion 
or whatever the number was was an analytic study that was done 
totally independent of being on the ground and looking at real 
facilities and knowing what had to be done. So I will get the 
study up to you that shows what this $1.5 billion is comprised 
of and why, frankly, why it does differ. And we are glad for 
it. We would rather not have to replace runways or buy new 
communications systems if there are things in place now that 
are adequate.
    A NATO team did that survey and we are taking that as being 
right. We did have team members with them on it.
    Senator Stevens. Do we still pay 26 percent of NATO?
    Dr. Hamre. Yes, sir.
    Senator Stevens. So that means that that is roughly one-
quarter of the total cost of the expansion of NATO?
    Dr. Hamre. Yes, sir, the $400 million would be roughly one-
quarter.
    Senator Stevens. From their point of view, from the NATO 
people, analysts' point of view?
    Dr. Hamre. Yes, sir. Yes, sir.
    Senator Stevens. Well, then I assume there would be no 
opposition from the administration to my reservation on the 
treaty that will say that there will be no increased cost of 
maintaining our involvement in NATO from this enlargement?
    Dr. Hamre. Sir, forgive me for not being in a position to 
speak for the administration on your reservation.
    Senator Stevens. I understand. I did not expect you to 
answer, John, but I just think somehow or other----
    Dr. Hamre. Yes, sir.
    Senator Stevens [continuing]. I think their computers must 
have been set to go to zilch in 1998, not the year 2000.
    Well, I have got some other questions to answer. I am 
really not going to get into the Iraq thing. I think we ought 
to wait for the basic information that is going to come with 
the supplemental.

               cost control and equipment needs of CINC's

    I do have one problem, though. As we have traveled around 
the world--and we do travel excessively, my friend and I, and 
some of the others, too--I think that the CINC's still have no 
real cost control, on the one hand. On the other hand, the CINC 
equipment is deteriorating and I am not sure they are getting 
the priorities they should have with regard to new systems, 
such as new aircraft, particularly in the Pacific.
    Are you supporting any new aircraft for CINC's this time?
    Dr. Hamre. Senator, I wish I had prepared more fully. I do 
recall we had a program that was basically going to use some 
older 135's. I think that that program has been rejected, and I 
think we are looking at new aircraft. But I do not know exactly 
what we are looking at. Can I get back to you on that?
    [The information follows:]

    Senator, the Air Force has a plan that utilizes both new 
aircraft and existing KC-135R aircraft. The KC-135R aircraft 
will be modified to accommodate unique CINC requirements for 
secure communications and have some modest interior 
improvements. The Air Force is working closely with the CINC's 
to satisfy their support concerns.

    Dr. Hamre. I just want to lead that into this request to 
you. I saw your comment in your presentation about the 
privatization for housing. I would like to follow that up with 
a concept in this bill this year of privatization for noncombat 
equipment to the extent that it is possible. That is 
particularly true with transportation for the CINC's, 
transportation for the--what do they call it, the executive 
fleet? The 89th Wing. And I think we have got some other areas 
where we can experiment on privatization.
    I believe that the new leasing companies that are there on 
a global basis are capable of providing a substantial advantage 
to the Department to lease vehicles. Even in a host country, 
for instance, we might be able to lease vehicles that are there 
and not have to transport them over. I think we have to start 
looking for some savings at every corner, and the privatization 
angle has a lot of appeal right now to help us get over this 
crunch in the O&M accounts. So I would urge you to look at it 
and if you have any further comments to make about that as we 
go along, we would like to work with you on it.
    Senator Stevens. Senator Inouye.

                National Guard and military construction

    Senator Inouye. Thank you.
    I am certain the Senator from New Mexico will be asking 
questions on Bosnia and the supplemental, and I am certain the 
Senator from Texas will be touching upon recruitment and 
readiness. I would like to touch upon the National Guard and 
military construction.
    Up until recently, it has been part of the tradition of the 
executive-legislative relationship that the Congress adds 
Milcon projects for the Guard, and very seldomly requests came 
in from the Defense Department. Second, in recent times and in 
this presentation of yours we have added new missions to the 
Guard, one a very important one on how to cope with the 
potential threat of biological and chemical weapons that may be 
easily carried into the United States, and we have told the 
Guard that it is your mission to protect us.
    Yet, if you look at the budget there is almost nothing for 
Milcon for the Guard. Now, if we put in and initiate projects 
for the Guard and the administration's policy is that the line 
item veto will be used for those projects that have not been 
requested by the administration, what happens to the Guard?
    Would you support us if we put in projects for the Guard, 
though not requested by you?
    Dr. Hamre. Sir, we have I think a sad history of asking for 
Milcon for the Guard. As I say, I am a Lutheran by background 
and we have it good: We like to sin and God likes to forgive, 
and it all works out real good. It is a little bit how we deal 
with Milcon. I mean, we decide not to ask for money and you 
like to give it to us, and both sides feel pretty good about 
that. That is historically what we have been doing.
    We are now at a point where we cannot do that any longer. 
The top line is fixed and everything now is being traded off. 
We need to be embracing Guard Milcon requirements just as 
sincerely as we embrace active duty Army Milcon requirements. 
We have not had a history of doing that, and we need to start 
doing that.
    We tried very much to do that for their modernization 
program this year, and we did indeed move $2.5 billion into the 
Guard for equipment. But we have not done a good enough job on 
Milcon and so we have to correct that problem.
    Sir, on the issue of weapons of mass destruction, again we 
listened very carefully to what you and other Members of the 
Congress were telling us and tried very much to embrace this. 
This budget proposal adds $49 million to start developing a 
quick response program for Guard units so that they can quickly 
come in to augment, not replace local responders, not replace 
the fire department or the emergency response teams, but to 
quickly augment them, to come and bring in biological detection 
equipment, to bring in chemical detection equipment, to be able 
to do early diagnostics, to get there within 4 hours and be 
able to help the local early responders so they can get ready 
and cope with an emergency.
    We have added $49 million this year and altogether about 
$250 million over the 5-year plan.
    Senator Inouye. But there is no Milcon in there.
    Dr. Hamre. But there is no Milcon in that, sir, because 
that was off of existing units and existing organizations.
    But I take your criticism very seriously and you are right, 
we need to be doing a better job on treating Milcon for the 
Guard. It is especially hard, as you say, when we talk about 
not having addons that are not in the 5-year plan. If the Guard 
is not in the 5-year plan, then they get cheated. It is a 
double hit. So that is why we had to develop--we had to make a 
very concrete effort to try to get them included at least on 
the equipment side in the 5-year plan, and we will have to do a 
better job on Milcon, too.
    Senator Inouye. Maybe we should have a conference where we 
can tell you what we would like to put in and you say OK.
    Dr. Hamre. Sir, I am at your disposal. [Laughter.]

                    consequences of BRAC disapproval

    Senator Inouye. Well, I am aware that you are counting on 
BRAC as part of your budget presentations. But what will you do 
if BRAC does not get approved?
    Dr. Hamre. Sir, we are counting on BRAC. Of course, inside 
the 5-year plan that we are presenting to you BRAC has 
virtually no savings; it only has costs, because the first 
round of BRAC would only occur in the year 2001 and the costs 
associated with that first round would be in the 5-year plan, 
but virtually none of the savings. So we would get the 
anomalous condition where if you say no to us on BRAC we 
actually get a slight benefit in the short term; in the long 
run, we lose the purchasing power that it is going to take to 
support facilities we do not need.
    We are still going to have to address excess capacity 
somehow. We have got to get our hands around that problem. We 
have got too much capacity. We believe honestly that BRAC is 
the fairest way for everybody because it is out in the open, 
there is an explicit process, it is evaluated on the merits, 
people can look at it and debate it and discuss it. And if 
there is dissatisfaction with the way that BRAC proceeded this 
last time, Congress should change the rules. You can change the 
rules on how BRAC would proceed, and we would honor that.
    But we do need to tackle the excess infrastructure, the 
excess bases, and that is why we would be delighted to sit 
down. And if there is another way that we could do BRAC or an 
improved way to do BRAC, we would be glad to work with you on 
that.
    Senator Inouye. Can DOD on its own initiative close bases 
without going through BRAC?
    Dr. Hamre. Sir, DOD has--yes, we can, but there are all 
kinds of laws and rules and regulations that govern any closure 
of an installation. For example, what BRAC basically did was 
let you clear some of those hurdles on a wholesale basis rather 
than a retail basis. So for example, environmental impact 
statements, things of that nature, we would have to go through. 
It is a cumbersome process, but yes, we can do that.
    Senator Inouye. Some have argued that DOD should bite the 
bullet and do that job, instead of hiding behind BRAC. For 
example, there is no question BRAC may be open, but it is 
subjected to lobbying that makes our lobbying seem very small 
and slight.
    Dr. Hamre. Yes, sir, I understand.
    Senator Inouye. You might have members in there that are 
already inclined to close bases in Texas and California. Some 
believe that is what happened and we had to come back to rescue 
you. Now, that process in the eyes of many seemed to be a bit 
tainted. It might be a bit more honest if we dealt eyeball to 
eyeball with you. That is just one thought.
    Thank you very much.
    Dr. Hamre. Oh, good, I do not have to answer that. 
[Laughter.]
    Senator Stevens. I do not think anyone can really answer 
that now.
    Senator Hutchison.
    Senator Hutchison. I think it was a very good point, 
however, Senator Inouye. I certainly saw more lobbying there 
than I have seen anywhere in Congress.
    I would like to--I am going to go on the same line that 
Senator Inouye did on another readiness issue, and then I want 
to ask you on the bigger picture.

                      SAC hearing on Supplemental

    But I want to ask the chairman a question first. Are we 
going to be able to have hearings on the supplementals, 
particularly the Bosnia supplemental, so that we will be able 
to discuss the whole policy in Bosnia for which the money will 
be spent?
    Senator Stevens. It would be my feeling we should have 
hearings. But in all probability the hearings on the 
supplemental will be by the full committee, because it will 
contain more than just items for this subcommittee. That will 
be a difficult decision to make, but I want to talk to Senator 
Inouye and Senator Byrd about that.
    I do believe all members should be involved in the review 
of the supplemental.
    Senator Hutchison. Well, I do not have any suggestion on 
whether it be the subcommittee or the full committee, but I do 
think if you are saying, as the President is now, that we are 
going to have an unending commitment in Bosnia, then you come 
in with supplementals rather than putting it in the defense 
budget, I think we need to know exactly what the plan is. So I 
am hoping we will have those.
    Senator Stevens. Fiscal year 1999 is not considered 
emergency. Only the fiscal year 1998 is considered emergency.
    Dr. Hamre. Right. And for 1999 we will be actually 
submitting details of that as well by the end of next week. So 
we will have both 1998 supplemental and 1999 budget amendment, 
I guess as we would say it, or using this allotment that was 
set aside to cover for Bosnia.
    Senator Stevens. Mr. Cortese reminds me, we do have a 
hearing scheduled on the 1999 Bosnia. My answer to you was 
concerning the supplemental for Bosnia and Iraq and the other 
matters that would be in the supplemental. There are some 
nondefense matters in the supplemental.
    Senator Hutchison. Well, I just want to make sure that we 
have the opportunity to have congressional input on Bosnia at 
the appropriate time. And I think a hearing is going to bring 
out what the plan is, and I am looking for a plan on Bosnia and 
I am looking for an exit strategy if this is going to happen.

                     status of Privatization in DOD

    Let me ask you--one of the readiness issues besides BRAC is 
privatization. We have heard from every expert in the 
Department of Defense, from the Vice Chairman of the Joint 
Chiefs, the Chairman, the chiefs of each service, the Secretary 
of Defense, the Deputy Secretary of Defense before you, that 
privatization is one of the key ways that the Department of 
Defense can save money and use that money for other operations 
that are necessary.
    What is the status of privatization? Are you satisfied with 
it, and what do you think needs to be done to allow that money 
be used in the best and most efficient way?
    Dr. Hamre. Senator Hutchison, I presume you mean in this 
case privatization as things that we are currently doing, not 
the housing privatization, but the ongoing work, for example, 
in DOD, putting it in the private sector?
    Senator Hutchison. Yes; well, actually you could speak to 
all of it.
    Dr. Hamre. OK.
    Senator Hutchison. But I was thinking of the privatization 
of maintenance, however.
    Dr. Hamre. Yes, yes; the budget that we have submitted 
assumes that we are going to compete for privatization--it is 
not automatically privatizing, but using the A-76 process to 
compete for privatization--150,000 jobs. Now, we are assuming 
that we will save $2.6 billion through that. Let me explain 
briefly how we do that.

                      A-76 process for competition

    The A-76 process--and I will come back to that in a 
minute--it is very cumbersome, but it is designed to give a 
fair, level playing field, private sector-public sector, to do 
work. There have been about 2,000 A-76 studies over the last 13 
years. On the average, one-half of the time the Government has 
won and one-half of the time the private sector has won.
    When the Government wins the competition, the savings have 
averaged 20 percent. When the private sector wins the 
competition, the savings averaged 40 percent. So there are 
enormous savings that would come from this competition.
    What we did in this budget was we are assuming that we are 
going to compete 150,000 jobs, and we assumed that in every 
case the Government won, because that is the conservative 
assumption. So we took only the 20 percent savings against that 
work base, the 150,000 jobs. I actually think it will be larger 
than that, but what we have actually put in the budget is $2.6 
billion. That is the annual amount that we save.
    This is going to be a challenge, frankly, because we will 
be doing more A-76 privatization competitions this year than 
were done in the last 10 years combined. There is a tenfold 
increase in A-76 competitions between 1996 and 1997. Frankly, 
in some places we have had to relearn the process because it 
lay fallow.
    I think I am encouraged. We have had several detailed 
meetings with the services and I am very encouraged. I think 
that we are going to make this work.
    Senator Hutchison. Do you have enough flexibility under the 
law as it is now to do everything that you feel you can do in 
this area?
    Dr. Hamre. I think that there are definite constraints in 
the A-76 process, and I am not here to litigate the process. 
But it takes almost 2 years to conduct a competition. It is 
enormously intensive, labor-intensive, to conduct a 
competition.
    I think also we need to have a process where we do a better 
job of evaluating the proposal before we submit it, because too 
often we have organizations that do not want to lose their jobs 
that get to design the competition. Well, you know, there is an 
incentive not to design it in a way--or to design it in a way 
where it is harder for industry to win, the private sector to 
win. We need to change that.
    I also think there are an awful lot of work practices that 
cut across multiple organizations, and the A-76 process is 
really designed to work inside a single organization. So we 
need some changes here.
    Senator Hutchison. That is what I was trying to find out. 
You do need changes in order to make sure you can achieve the 
savings you need to come within this budget?
    Dr. Hamre. Ma'am, I think most of them are things that we 
can do internally. But I will get back to you if there is 
something that we think we need either legislative or 
regulatory relief.

            restrictions on Depot maintenance privatization

    Senator Hutchison. Well, does the 60-40 rule, that is now 
50-50----
    Dr. Hamre. Well, that is a different matter. That is a very 
different matter, because that is not governed by A-76, and 
that is enormously more complicated.
    Senator Hutchison. Do you think that is an artificial 
restraint----
    Dr. Hamre. Oh, yes, ma'am.
    Senator Hutchison [continuing]. That will keep you from 
being able to do the privatization?
    Dr. Hamre. Oh, absolutely. I think that the 60-40, now 50-
50, rule definitely makes it harder to hold competitions.
    Senator Hutchison. Do you think that you have the same 
accountability in a public sector contract that you do in a 
private sector contract?
    Dr. Hamre. Let me try redefining your question and then I 
will try to answer it, and maybe I got the right question or 
not. Is it possible for a Government proposal to have the same 
set of liabilities and obligations as a private sector 
proposal? No; in the sense that we can impose--you can impose a 
fixed price bidding requirement on the private sector and you 
cannot really impose that on the Government. By definition, 
Government proposals are almost cost-plus.
    So you have to really develop other means to try to get the 
fiscal discipline associated with the bid in the public sector. 
We are trying to do that where we can.
    Senator Hutchison. Well, I just hope that you will let us 
know what you think would help make this more efficient and get 
the savings, but keep the readiness that we all want to 
preserve; and second, that you will work to maintain at least 
what you have now and not have other restrictions placed on the 
ability to do the privatization if you are counting on it for 
part of the savings that would allow you to do your job 
efficiently.
    Dr. Hamre. Yes, ma'am. We are counting on it and we need 
it.

                            Missile defense

    Senator Hutchison. Let me just ask one last question, and 
that is on--in your budget you have money for missile defense. 
One of the concerns that I and many others have had is that we 
have not deployed to the fullest the technology that would give 
us the missile defense systems that we need, either in theater 
or intercontinental. I want to ask you if you think that the 
Department is going to be able to move toward having the 
missile defense systems that we must have within this budget 
constraint--I think $3.6 billion is what you have--and if we 
need to have changes in the ABM Treaty in order to continue to 
go forward for this missile defense.
    I happen to believe the biggest security threat the United 
States faces is ballistic missiles, either into our country or 
into a theater where our troops are. I want to make sure that 
we are going full force with technology, and if we need to 
address the ABM issue then we need to do that.
    So where are we with this $3.6 billion that you have in 
your budget?
    Dr. Hamre. Senator, of course the $3.6 billion here and the 
full funding throughout the 5-year plan we honestly believe 
brings forward the development of a national missile defense 
system, but not the procurement of that national missile 
defense system. We do not have procurement money in our 5-year 
plan for it, but we do have the development and the funds that 
are required if we do need to make the deployment decision to 
invest in it inside this 5-year plan.
    I think that is properly funded. As you know, not all the 
testing has gone all that successfully in some of the programs 
and so we really are pushing them about as far as we can right 
now.
    I think the real question you are asking is where is the 
procurement money, and that is again an issue that has divided 
the Congress and the executive branch for the last 3 or 4 
years. We have moved a lot closer under Dr. Perry and under 
Secretary Cohen, because we now are funding the same 
development program. We are all seeking that same thing. We 
just do not have the funds to buy it inside this 5-year plan.
    We do not think we need to make that decision right now. 
When we have to make that decision, we think we can and it will 
be under the same timetable, because we are developing it.
    Senator Hutchison. To the fullest extent?
    Dr. Hamre. We think so. We think it is honestly paced by 
development risk, not by funding constraint. Now, I will go 
back to the experts and find out, to make sure that I am right 
on that. But that was as I recall it when we were building the 
budget back in December.
    Now, as to your question about the ABM Treaty, it is my 
understanding there is nothing that we are doing inside this 
development program right now that requires us to change the 
ABM Treaty. Obviously, deployment is a different issue and I 
would have to come back to you with an answer on that.
    Senator Hutchison. Right.
    Thank you.
    Senator Stevens. Thank you very much.
    Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    First of all, it is good to be with you. Many of us have 
known you for a long time. You worked with a very good Senator 
for a long time.
    Dr. Hamre. Thank you, sir.
    Senator Domenici. Our good friend Senator Nunn.
    Dr. Hamre. I got good training.
    Senator Domenici. You got good training. We are glad to 
have you here and congratulations on your Deputy Secretary of 
Defense designation.
    Dr. Hamre. Thank you, sir.
    Senator Domenici. I have two parochial questions and I will 
submit them separately.
    Dr. Hamre. Fine. I will be glad to--I will be responsive.

                   more flexible Contingency funding

    Senator Domenici. Let me ask this question. Since we have 
been involved in Bosnia and contemplating getting involved in 
Iraq, I have been concerned about the fact that the domestic 
budget of the United States and all of its agencies are not 
bound to 5-year budget numbers, but the Defense Department of 
the United States is. It seems to me that for contingencies if 
any Department ought to be given some flexibility, it ought to 
be the Defense Department. We are learning more about that need 
for flexibility with every contingency that comes along.
    It seems to me that either we provide more flexibility or 
we change our budgeting practices to provide literally for a 
rather significant contingency fund. The reason I raise this is 
because, I tell you the truth, as a matter of course the Chiefs 
come and see me one time in my office to talk about things that 
relate to my State, and I have been more impressed over the 
last 18 months with their genuine concern about the process of 
budgeting under their command.
    I am concerned that they have to constantly move things 
around in this budget because they are now in Bosnia or about 
to go to Iraq. I just want to lay before you that I do not 
believe we ought to put that onus on military men, leaders of 
this U.S. Defense Department.

                          Funding constraints

    I say that with even more assurance when I find that we do 
not bind any domestic Department to anything but 1 year, and 
somehow or another, even in so-called austere times, we find 
$60, $80, $120 billion more to spend on domestic programs and 
not a nickel for defense. It is stuck with this 5-year number.
    I am talking about the President's budget. I am not 
agreeing with his spending $65 billion in cigarette settlement 
for 12 new programs, but he found it. He found some money to 
spend. And yet we are up here asking for emergency money for 
the Defense Department of the United States to break their cap 
in a legal way.
    So I just want to lay before you that I believe the 
ultimate job of a good Comptroller is to try to give these 
Chiefs and the Joint Chief of Staff more assurance that they do 
not have to be so clairvoyant and so certain that 3 years from 
now they are still bound by something they said before the 
world changed. Frankly, I do not know how they can do it 
myself, with technology changing like it is and all the needs 
and demands. We are asking for multiyear budgets, but 5 years 
is a long time.
    I guess the other thing I would ask you is, do we stick the 
number before the Chiefs or do we ask them what they need? I 
think that is a very important question. We have numbers. Now, 
do we ask the Chiefs when they prepare their quadrennial or 
whatever, do we say, what do we need to keep the men and women 
satisfied in this All-Volunteer Army? They have got to work, 
they have got to be trained, we need R&D. Tell us what we need? 
Or do we say: That is the number, $268.3 billion; live within 
it. Which do we do?
    Dr. Hamre. Sir, it is largely the latter, but we do try to 
accommodate the changes that we need to make on the margin. It 
tends to be on the margin. We basically give people a spending 
path and say, you need to develop and build a program to this 
path, but then on the margin tell us what more you need and in 
what areas.
    So we try to do that. But in all honesty, it is within the 
constraints of the overall funding that we forecast is likely 
to be available. But we would have to do that. Otherwise we 
would get very distorted kind of plans if we did not, I think.
    I understand the sincerity of your position, however.
    Senator Domenici. I have not served in the capacity that I 
am around here not to know that any department of Government, 
if you ask them, what do you need? They will ask, what is 
available? And God knows where that ends up.
    But I do think when you put a 5-year shackle around 
defense, with the kind of changes we are talking about, it is a 
pretty risky business when it comes to preparedness and 
contingencies.

                   fiscal year 1999 Funding allowance

    Now, I was going to ask you how much you are going to ask 
for for the buildup in Iraq, but I am not going to. I will wait 
until that comes up.
    Dr. Hamre. It will be there next week.
    Senator Domenici. You did have a contingency fund of about 
$3 billion in the 1999 budget, did you not?
    Dr. Hamre. Sir, I think it is called an allowance. It was a 
new term I had never seen before. But yes, there was a 
reservation of about $3 billion, yes, sir, in 1999.
    Senator Domenici. Could that be kind of the fund that I 
have been just talking with you about?
    Dr. Hamre. Yes, sir; that is exactly what I think it is 
best to use it for.

                  Privatization and DOD personnel cuts

    Senator Domenici. Now, let me ask another generalized 
question about the questions that my friend from Texas asked. I 
understand that if the privatization and contracting out 
contemplated in your budget do not work in whole or in part, 
that the military will be left with a situation where they were 
expected to have less end strength in personnel but no way to 
pay for them.
    Dr. Hamre. Sir, the budget that we put for privatization is 
really only on the civilian side, not on the military side. It 
does indeed assume that there will be a 20-percent savings 
against that 150,000 civilian jobs that we are competing. So 
yes, if none of it occurs then we would be short. But we 
actually think it is going to occur, and I have seen the 
planning for it. I actually think we will do a little bit 
better than that.
    Senator Domenici. Now, there is no military end strength 
that is reduced by privatization or contracting out?
    Dr. Hamre. Sir, there might be some small examples, but the 
bulk of it is not. I mean, there are small cases, but most of 
it is on the civilian jobs.
    Senator Domenici. Could you give us the specifics?
    Dr. Hamre. I surely will, yes, sir.
    [The information follows:]

    Sir, of the 150,000 full time equivalent positions that the 
Department intends to compete in accordance with OMB Circular 
A-76, we expect only about 20 percent to be military. The exact 
numbers are very difficult to accurately predict before the 
actual cost comparison studies are identified and announced. 
However, this year we will be conducting a Department-wide 
inventory of all civilian and military positions that will 
provide greater insight into which positions are inherently 
governmental in nature, which positions are commercial 
activities that are exempt from competition, and which 
positions are commercial activities that are subject to 
competition. This effort should improve the study 
identification process substantially.

    Senator Domenici. So if one of the Chiefs says one of our 
most difficult problems is going to be the end strength 
contemplated by privatization?
    Dr. Hamre. I think there are end strength cuts that are 
independent of the privatization, and they may be confusing 
that, or I may not have understood your question. We have end 
strength cuts that are coming against military that are totally 
independent of the privatization goals on the civilian side.
    Senator Domenici. Are they built upon some contingency or 
are they just what we are going to agree upon as an end 
strength reduction?
    Dr. Hamre. Sir, they were built on fairly detailed modeling 
that was done during the quadrennial defense review, where we 
looked through each of the forces. We have very detailed plans 
for all of that.
    Senator Domenici. Would you give us for the record the end 
strength reduction, both civilian and military, in a summary?
    Dr. Hamre. Absolutely.
    Senator Domenici. And tell us how we are going to get 
there?
    Dr. Hamre. I surely will.
    Senator Domenici. What backs them up.
    Dr. Hamre. I surely will.
    [The information follows:]

    The QDR process began by developing an overarching defense 
strategy, and followed with assessments of the necessary force 
structure, readiness, and modernization that would be required 
to implement the strategy. The resulting program recommended by 
the QDR is based on: modest reductions and restructuring of our 
military force structure that will still meet present threats, 
adequate modernization funding necessary to meet future 
challenges, and a conscious decision to reduce infrastructure 
and support activities as much as possible. Initiatives 
identified during the QDR that will safely result in reduced 
infrastructure and personnel include reengineering 
infrastructure to achieve better business practices, 
consolidating many logistics activities, reducing layers of 
management oversight at headquarters and operational commands, 
and competing and privatizing infrastructure functions that are 
closely related to commercial enterprises. The Secretary has 
established the Defense Reform Initiative (DRI) and the Defense 
Management Council (DMC) to continue and monitor ongoing 
efforts to reduce infrastructure.
    The approaches employed by the Services to effect personnel 
savings varied in accordance to their needs, their individual 
management structures, and their force structure requirements. 
The Army plans to restructure parts of its force to reflect 
increased efficiencies in support activities and in 
anticipation of further organizational change, including the 
redesign and downsizing of its heavy divisions as it integrates 
the results of ongoing warfighting experiments. The Navy plans 
to reduce force structure and retire surface combatants and 
submarines as newer and more capable systems are added to the 
fleet. The Air Force is consolidating its fighter, bomber, and 
theater airlift squadrons, increasing the number of aircraft in 
each squadron while decreasing the number of squadrons. It is 
also reducing intermediate headquarters to streamline its 
command structure, and will aggressively pursue infrastructure 
efficiencies.
    The QDR reflected the following personnel reduction goals:

----------------------------------------------------------------------------------------------------------------
                                                                                           Marine
                                                                  Army         Navy        Corps      Air Force
----------------------------------------------------------------------------------------------------------------
Active Military.............................................       15,000       18,000        1,800       26,900
Reserve Military............................................       45,000        4,100        4,200          700
Civilian Personnel..........................................       33,700        8,400          400       18,300
----------------------------------------------------------------------------------------------------------------

                 Inflation savings and outlay forecasts

    Senator Domenici. My last question has to do with the 
savings on inflation rates being lower than contemplated in the 
previous 5-year plan.
    Dr. Hamre. Inflation, yes, sir.
    Senator Domenici. Do I understand that in this budget you 
left whatever savings accrue from inflation reduction in the 
budget for the Defense Department?
    Dr. Hamre. Largely. We lost a little bit, but we largely 
were able to hold onto the inflation savings.
    Senator Domenici. I congratulate you.
    Dr. Hamre. Thank you, sir.
    Senator Domenici. I think it is high time that we not 
expect to swallow every bit of inflation savings that one 
contemplates. That too changes. You make them eat it all and 
then it changes back up again, and we are in another mess.
    My last question is: CBO and OMB, which you are bound by, 
disagree on the cost of your program, of your budget that we 
are talking about.
    Dr. Hamre. Yes, sir.
    Senator Domenici. Do you and CBO and OMB get together and 
try to analyze where those differences come from?
    Dr. Hamre. Sir, we try to. But this year we have not been 
given access to any of the details in CBO's outlay forecasts. 
They have not provided us anything this year.
    Senator Domenici. Well, is that different than last year?
    Dr. Hamre. Yes, sir, it is.
    Senator Domenici. Do you have any reason to suggest to us 
as to why it is different?
    Dr. Hamre. I do not know. As a matter of fact, I just 
learned that as I was getting ready for this hearing. I did not 
know that until today.
    Senator Domenici. I think it would not be bad, Mr. 
Chairman, if we asked them, if we asked CBO and OMB to confer 
on these differences. They are giving us a $4 billion thing 
that we have got to pay for because their number estimates are 
less.
    Dr. Hamre. We would like that.
    Senator Stevens. If they do not confer, we will get them 
both here at the same time, because we cannot make a choice 
between them.
    Senator Domenici. Good.
    Thank you, Mr. Chairman.
    Senator Stevens. Thank you.
    Senator Cochran.
    Senator Cochran. Mr. Chairman, thank you very much.
    I have a couple of questions that relate to research 
activities which I will submit for the record. If you will be 
kind enough to respond for our record, I would appreciate that.
    Dr. Hamre. Absolutely.

                    procurement for Missile defense

    Senator Cochran. Senator Hutchison asked you some questions 
about the ballistic missile defense situation and where we were 
with the administration's plan. I am concerned that you pointed 
out, and you had to, that there is no money in this plan really 
for procurement. The fact of the matter is that if we are going 
to develop a system that can be deployed under the so-called 
three-plus-three national missile defense program we are going 
to have to obtain some materials, long lead materials, at some 
point. It does not appear to be possible to meet the schedule 
of three-plus-three without some long lead equipment being 
purchased prior to a scheduled deployment decision in the year 
2000.
    What the administration I guess is assuming is that they 
will not ever get to there. It is kind of like the economist 
who says that the out-years--do not forget, the out-years never 
get here. So the administration is hoping, I guess, that they 
will not have to get to the point where they have to decide 
that they have to deploy.
    Is that why we do not have to put any procurement money in 
the plan?
    Dr. Hamre. Sir, I think the administration's Three-Plus-
Three Program, it is a rolling three-plus-three, and it is 
triggered by the concrete intelligence evidence that suggests 
we really have to do something finally. And we just do not see 
that right now. When that happens, we are always trying to be 
in a position so that we can reach out and get something in 3 
years. So that is the basis of it. That is why there is no 
precise date when it has to be put in the budget.
    Senator Cochran. Well, we have heard testimony from people 
like Lieutenant General Lyles, who calls the program extremely 
high risk. And I assume that means it is unlikely that we will 
reach the schedule or meet the schedule. I was wondering what 
your interpretation of it is.
    One of the CEO's of the competitor companies for the 
national missile defense lead system integrator contract says 
that you cannot be ready to deploy for the year 2003 unless you 
have some long lead equipment purchased prior to the scheduled 
deployment decision in the year 2000.
    Do you disagree with those assessments?
    Dr. Hamre. What I have to tell you is I do not think I know 
enough to be able to answer one way or the other right here. As 
to General Lyles, I have talked with him several times and I 
think I always understood his assessment of the high risk was 
associated with bringing the technology on in this time period. 
But I will go back and talk with him about that, too.
    Senator Cochran. Well, these are serious concerns and we 
hope that the appropriations that we are able to provide for 
this program permit us to be able to make a decision to defend 
the security of the country against ballistic missile attack if 
it does develop, as some think, that we are going to be 
confronted with that threat sooner rather than later.

                              Shipbuilding

    Let me ask you this about shipbuilding. The Secretary of 
the Navy testified the other day before the Senate Armed 
Services Committee that the future years defense plan provides 
an adequate amount of support to meet the projected need of 300 
ships for our Navy, but beyond that future years defense plan 
this rate of production that we have now will not permit us to 
maintain the required ship inventory.
    What are we going to do about that?
    Dr. Hamre. We need to buy more ships. Right now we are able 
to take and sustain a 300-ship Navy because, frankly, we are 
still able to live off of the larger inventory we had from the 
past. But obviously, if we take the nominal service life of a 
ship is 30 years and you need 300 ships, you have got to buy 
more than 6 a year.
    Senator Cochran. Right. You have got to buy about 10 a 
year.
    Dr. Hamre. Yes; I mean, we just have to buy more ships.
    Senator Cochran. Well, I am hopeful that the committee will 
support a schedule of that size. I think it is certainly 
justified, and that is what the Secretary of the Navy said in 
his testimony, that the operational commitments undertaken by 
the Navy and Marine Corps today require a certain force level 
to satisfy worldwide presence missions. As we see the U.S.S. 
John Stennis steaming off to relieve the George Washington, 
Senator Lott and I gave the captain a U.S. Senate flag to carry 
on that mission. He said he would fly it while they were 
underway on the first deployment of the U.S.S. John Stennis. We 
are very proud of that.
    We appreciate your assistance to the committee and your 
presence. We look forward to continuing to work with you, Dr. 
Hamre.
    Dr. Hamre. Thank you, sir. I am glad to be invited. Thank 
you.
    Senator Domenici. Are you finished, Mr. Chairman?
    Senator Stevens. No; Senator Inouye had some questions.
    Senator Inouye.
    Senator Inouye. Thank you, Mr. Chairman.

                        selective Privatization

    I would just like to make an observation. I realize that 
privatization has become a very popular concept because of 
possible savings that may come about. We speak about fiscal 
discipline. I am old enough to remember an event that happened 
in 1941, and at that time when the bombs fell private workers 
who were doing construction work somehow did not report, but 
all of the Federal civilian civil service workers, they all 
reported to work, and many of them were casualties.
    That is my concern. When they were doing privatization for 
men and women in uniform, you lost your operational discipline. 
Did you take that into consideration when you adopted 
privatization?
    Dr. Hamre. Sir, the 150,000 jobs that we are going to 
compete are those where we have done a fairly detailed analysis 
and believe these are really commercial-like activities. I 
personally believe that we can count on contractors to be with 
us if we have to. We had over 800 contractor tech reps in 
Bahrain during Desert Storm and they were under the same range, 
Scud range, as our active duty people.
    We have to be sensible about it, of course, and there are 
things that you do have to have. I am a firm believer there are 
things you have to have Government employees do. And there are 
things that, as your fiduciary responsibilities as a 
Government, I think are a responsibility of Government. I would 
not contract out certain activities.
    So we studied that very carefully. But there still is, I 
think, a fair amount of room for us to look at commercial-like 
programs, people for example who do payroll here in the United 
States, things of that nature. And those are the things that I 
think it is fair for us to look at.
    Government may still win that competition. So we will see 
what the result is.
    Senator Inouye. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Stevens. I have some questions, but do you have 
questions?

            status of spending resulting from Veto override

    Senator Domenici. I just have one with reference to the 
veto override. You understand we have done that.
    Dr. Hamre. Yes, sir.
    Senator Domenici. It is finished.
    Dr. Hamre. I surely do. That is why I did not think I would 
have to answer anything.
    Senator Domenici. You understand that you are supposed to 
pay for those projects and programs now, right?
    Dr. Hamre. Sir, the money is out the door.
    Senator Domenici. Now, we called up to find out where it 
all stood and we were told it is going to be a long, long time. 
Could we ask you how long it is going to take before some of 
these things we just put back in the appropriated cycle, how 
long it is going to take?
    Dr. Hamre. Sir, yes, I will call you back before the day is 
out. What I do not know is the technical process of the 
allotment process with OMB under a veto environment. But it is 
not going to take more than a day for us to get it through the 
Comptroller's office, I know that.
    Senator Domenici. So the point is there will be no holdups 
because it is an override? You are full speed ahead?
    Dr. Hamre. Full speed ahead.
    Senator Stevens. Well, Senator, with due respect to you and 
to Dr. Hamre, there still is the rescission process, and I was 
told it might be considered. So let us not spend our money 
before we get it.
    Dr. Hamre. OK, I will go back to make sure.
    Senator Stevens. I hope it is not. I hope we do not have to 
run that route on this one. This was a sheer mistake and we 
have corrected it, and Congress has spoken twice now, three 
times on these.
    Dr. Hamre. Eighty votes does not look like a rescission 
margin to me.
    Senator Stevens. I have to tell you, it only takes two 
people in the Senate to say no to rescission, and that is me 
and Senator Byrd, and they are not going to come out of this 
committee on this bill. We have done enough on these now. We 
just do not have time to go back and live that thing again now, 
that is all. I hope that you will carry that message for us, 
doctor.
    Dr. Hamre. I shall.
    Senator Stevens. We have got so much going forward. If we 
have to do those projects again, it will just be wrong.

      Federally funded research and development centers [FFRDC's]

    Let me ask you a couple questions. It is no secret what we 
have done about FFRDC's, and now I understand that the 
Department has decided that FFRDC's contract advisory and 
assistance services [CAAS] will be considered providers, and 
they are to be cut by 15 percent by the Department. Is that 
right?
    Dr. Hamre. Sir, you are asking me a question I do not know 
the answer to. I will have to find out. They will be, I am 
sorry, what providers?
    Senator Stevens. Do you know whether there is any moneys 
that are going to be reprogrammed to restore the fiscal year 
1998 level of FFRDC's?
    Dr. Hamre. Forgive me, I will have to get back to you. I am 
not aware of that, but I will find out.
    [The information follows:]

    Senator, as you know, Section 8035 of the fiscal year 1998 
Appropriation Act established limits on both the number of 
staff years of technical effort at Defense FFRDC's (6,206) and 
staff years for defense studies and analysis FFRDC's (1,105). 
Section 8035 also reduced the amount appropriated by $71.8 
million. In addition, the accounts funding FFRDC activities 
were impacted by the $300 million reduction for Contract 
Advisory and Assistance Services (CAAS) in Section 8041. All 
RDT&E accounts, including those funding FFRDC activities, were 
also affected by the pro rata reductions directed in Sections 
8043 and 8048. It is my understanding that the Military 
Departments used below threshold reprogramming authority (less 
than $4 million) to fund some FFRDC efforts. It is not unusual 
for FFRDC taskings to be identified during budget execution 
which were not foreseen during budget development. However, I 
am not aware of any case where a FFRDC's fiscal year 1998 
funding level was restored. The Department is executing the 
fiscal year 1998 program within all the staff year constraints 
established in Section 8035.

    Senator Stevens. I have a second question then. Will you 
give us an update on the current reprogramming regulations that 
would apply to the concept of FFRDC's? I understand that there 
is a procedure to make multiple reprogrammings to accumulate 
millions of dollars to restore the FFRDC's reductions. I would 
urge you to consult with us before you do that, because not 
only this committee, but the authorization committees, have 
reduced FFRDC's and particularly for this year.
    Can you tell us what is projected for expenditures for each 
defense FFRDC for this year? Would you give us that for the 
record?
    Dr. Hamre. I surely will. I do not have it today.
    [The information follows:]

    Fiscal year 1998 projected expenditures for all DOD-
sponsored Federally Funded Research and Development Centers 
(FFRDC's) Staff Years of Technical Effort (STE) is estimated at 
$1,188,400,000. The following table provides projected funding 
for each FFRDC.

        FFRDC                                                   Millions

Studies and Analyses (S&A):
    RAND NDRI.................................................     $23.0
    RAND Arroyo Center........................................      20.5
    RAND Project Air Force....................................      23.3
    CNA.......................................................      47.2
    LMI.......................................................      28.0
    IDA-S&A...................................................      61.4
    IDA-OT&E..................................................      14.6
                    --------------------------------------------------------------
                    ____________________________________________________

      S&A subtotal............................................     218.0
                    ==============================================================
                    ____________________________________________________
Systems Engineering:
    MITRE.....................................................     346.2
    Aerospace.................................................     304.7
                    --------------------------------------------------------------
                    ____________________________________________________

      Systems Eng subtotal....................................     650.9
                    ==============================================================
                    ____________________________________________________
Laboratory:
    MIT-Lincoln Lab...........................................     260.9
    IDA-C&C (NSA).............................................      32.8
    SEI.......................................................      25.8
                    --------------------------------------------------------------
                    ____________________________________________________

      Laboratory subtotal.....................................     319.5
                    --------------------------------------------------------------
                    ____________________________________________________

      Total for DOD FFRDC's..................................\1\ 1,188.4

\1\ Does not include the potential for up to an additional $30,000,000 
in new work resulting from funds added by the Congress for new programs 
and increases in ongoing programs over that requested in the President's 
budget. Specifics regarding new work was reported to the four Defense 
Committees by the USD(A&T) on March 7, 1998.
---------------------------------------------------------------------------

          Theater high altitude area defense [THAAD] missiles

    Senator Stevens. We are talking about fiscal year 1998 now.
    Dr. Hamre. Yes, sir, I understand.
    Senator Stevens. Last, I agree with the Senator from New 
Mexico and others about the importance of the missile defense 
programs, but we are informed that the THAAD has missed four 
intercept attempts and the fifth one has now been delayed, not 
once, not twice, but three times delayed. In this request that 
is before us is $180 million to purchase 40 of those missiles, 
and it is based upon a single intercept being successfully 
completed.
    With that track record so far--and incidentally, we have a 
similar situation with the Patriot. Their design has been 
changed substantially since it did have an intercept, I guess 
two intercepts, and now there is going to be no further attempt 
to test it before we purchase 48 missiles at $97 million.
    We want the missile defense programs to go ahead, but is 
the Department really going to spend that amount of money on 
procurement before there is real assurance that the design and 
production model is capable and the right ones in each instance 
to deploy?
    Dr. Hamre. Sir, I do not believe that we have changed our 
policy goal of seeing a series of successful tests on THAAD 
before we obligate the money. I think we have been pretty 
aggressive in budgeting for procurement, but I think there is 
high risk in this area.
    Senator Stevens. I do not want you to misunderstand me. 
There is no committee of the Congress that is more interested 
in these missiles.
    Dr. Hamre. I understand very well.
    Senator Stevens. And as a matter of fact, I do not think 
Patriot would have become an antimissile missile if it had not 
been for this particular subcommittee. But we want the upgrades 
to be upgrades that have been successfully demonstrated before 
we put our money on the line.
    Dr. Hamre. Yes, sir.
    Senator Stevens. I hope that the Department will agree with 
that.
    Dr. Hamre. Absolutely. And I think we do have that as part 
of the--that we are not going to obligate it until, I forget 
what the series of successful tests. But I will find that out 
and report it to you.
    [The information follows:]

               Theater High Altitude Area Defense [THAAD]

    In accordance with the Milestone I Acquisition Decision 
Memorandum (ADM), two criteria must be satisfied prior to 
exercising the contract option for 40 User Operational 
Evaluation System (UOES) missiles: Hardware in the loop 
demonstration of guidance and control systems, and one body-to-
body intercept using the THAAD radar.
    Of these two criteria, a successful body-to-body intercept 
has not yet been achieved. It is still the Department of 
Defense (DOD) plan to exercise the missile option following a 
successful intercept. However, because each intercept test 
failure to date has had a different root cause and because of 
differences between the current test configuration and the UOES 
missile, there is concern within DOD regarding the risk of 
buying 40 UOES missiles on the basis of only one intercept. As 
a result of these concerns, DOD, BMDO, and the Army have agreed 
to revise the plan for exercising the option. Formal contract 
initiation is planned following the first successful intercept, 
but a phased implementation strategy that includes two interim 
progress reviews (IPR's) and a subassembly review will be 
pursued. The first IPR will follow the completion of flight 
test number 8 (FT-08), ground tests on the block upgrade (BUG) 
configuration, and a 60-day planning session. This IPR would 
give authority for partial contract execution to buy long lead 
items. A second IPR will be conducted prior to the full 
contract execution of hardware purchases. Finally, a Government 
subassembly review will be conducted following FT-10, if 
necessary, to review plans to complete assembly of the 
missiles. This phased approach limits government financial and 
technical risk by allowing additional ground testing and flight 
testing prior to purchase of all hardware components.

    Senator Stevens. I am told that the intercepts of the prior 
design for pack 3 are being used for now the purchase of a 
subsequent design that has not been tested.
    Dr. Hamre. Forgive me for not being current on that, sir. I 
will find that out.
    Senator Stevens. If you can let us know, we would 
appreciate it.
    Dr. Hamre. I will.
    Senator Stevens. But do not take it as any indication of an 
intent to delay that.

                     Additional committee questions

    We do thank you and look forward to working with you. I 
think it goes without saying that we are grateful to you for 
what you do to help us do our task.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Question Submitted by Senator Ted Stevens
                            ffrdc reductions
    Question. Secretary Hamre, can you provide the Committee with an 
update on the current reprogramming regulations highlighting the 
procedures which would allow the Defense Department to make multiple 
reprogramming to accumulate tens of millions of dollars to restore 
FFRDC reductions?
    Answer. The Department has no intention of reprogramming tens of 
millions of dollars into FFRDC's. There are no recent changes to the 
reprogramming regulations. Current reprogramming regulations limit the 
amount of funding that can be added to any line item and the Department 
will continue to comply with the existent regulations. The Department 
has implemented the fiscal year 1998 Congressional reductions pursuant 
to sections 8035 (FFRDC reduction) and 8041 (Contract Advisory and 
Assistance Services). The impact of these reductions represents a 
``double cut'' to the FFRDC community. Although the fiscal year 1998 
reduction lowered funded technical staff years below the 6,206 level, 
the Department will attempt to execute the fiscal year 1998 FFRDC 
program at the fiscal year 1997 funded level. The Department will 
execute the fiscal year 1998 program within all the constraints 
outlined in Section 8035.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
                                demining
    Question. Mr. Hamre, recently the Defense Reform Initiative moved 
program management of the Humanitarian Demining Program from the Office 
of the Assistant Secretary of Defense for Special Operations/Low 
Intensity Conflict to the Defense Security Assistance Agency. Some 
reports on this change leave the impression that the program will no 
longer support research and development on mine detection technologies.
    (a) Will this program continue to explore new technologies for mine 
detection?
    (b) I understand that acoustic detection was among the research 
areas being explored under the program's prior management. Will that 
research continue?
    Answer. (a) The Defense Reform Initiative had no impact on the 
OASD(SO/LIC)-directed demining technology research and development 
effort. In fact, the program has recently refocused its efforts on new 
mine detection technologies to more effectively support the needs and 
requirements of indigenous deminers. More specifically, aggressive 
projects are planned to focus on individual deminer protection and 
enhanced handheld mine detection equipment.
    (b) The SAC previously directed that acoustic techniques for mine 
detection be included in the candidates evaluated for humanitarian 
demining applicability. Acoustic detection remains a promising research 
area that will continue to be pursued.
                          counterdrug training
    Question. Mr. Hamre, the Regional Counterdrug Training Academy was 
established in Meridian, Mississippi in 1992 as part of the 
congressionally mandated Gulf States Counterdrug Initiative.
    Are you aware that since its inception, the Academy has trained and 
graduated over 9,000 police officers and personnel from Alabama, 
Louisiana, Mississippi, Georgia and the Armed Forces in counterdrug 
operations?
    The Academy's success has led to a decision that will soon add the 
anti-terrorism training mission to its curriculum. Will the Department 
support providing the additional funding that may be needed for this 
expanded mission?
    What are your plans for this program over the next few years?
    Answer. Academy has trained and graduated since its inception in 
1992, but it has been quite active. In just fiscal year 1997 it ran 63 
iterations of 31 counterdrug-related classes, training over 2000 
people.
    The Department has no authority to provide any funding for this 
expanded anti-terrorism training mission. While the Academy's decision 
to add an anti-terrorism training mission to its curriculum 
demonstrates initiative, it was not requested by or coordinated with 
DOD. As you state in your introduction to these questions, the Regional 
Counterdrug Training Academy was established as part of the 
congressionally mandated Gulf States Counterdrug Initiative. It is 
authorized annually as one of DOD's counterdrug activities. Finally, 
funds are appropriated for it annually as part of DOD's counterdrug 
appropriation. DOD's authority to provide funding for the Regional 
Counterdrug Training Academy is limited to counterdrug training.
    DOD budgeted $2.2 million for the Regional Counterdrug Training 
Academy for fiscal year 1999 and fiscal year 2000. Its budget increases 
slightly to $2.3 million for fiscal year 2001 and fiscal year 2002. 
Finally it increases once more in fiscal year 2003 to $2.4 million.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                         location of new agency
    Question. Is one of the goals of the new Defense Threat Reduction 
and Treaty Compliance Agency to find a single location for the entire 
agency?
    Answer. It is our intention to make every effort to find a single 
location for the new agency. Or alternatively, to establish the 
organization in facilities that are in close proximity to each other. 
Our goal is to create synergy among the technical expertise in the 
field of weapons of mass destruction as well as to anticipate creative 
functions for the future. This can be accomplished by locating the 
personnel in a convenient geographical area that is also cost-effective 
and meets a high standard of excellence for the personnel assigned to 
the agency.
                    function of dswa's field command
    Question. If so, what are your plans regarding the important WMD-
related missions performed by DSWA's Field Command at Kirkland Air 
Force Base?
    Answer. Current plans call for the integration of Field Command 
DSWA and the mission it performs within the new agency. However, groups 
have been appointed to review some aspects of the new agency's 
activities including several performed by Field Command.
                       defense reform initiative
    Question. Is the DOD going to use the Defense Reform Initiative as 
a way to change in any way the separate but complimentary nuclear 
mission of the DOD and DOE?
    Answer. No, we do not intend to change the nuclear missions of the 
two Departments in any fundamental way. The reorganizations envisioned 
by the Defense Reform Initiative will enable DOD to complete its 
nuclear mission more effectively because agencies with complimentary 
missions are being merged. The fundamental mission of DOD with respect 
to nuclear missions, however, will not change.
    Question. If so, why?
    Answer. Not applicable. See response to previous question.
                  redundancy of nuclear responsibility
    Question. Does the DOD perceive any redundancy between the two 
departments in the nuclear area.
    Answer. The Defense Department does not believe that there are any 
redundancies between the DOD and DOE regarding nuclear 
responsibilities. There is close coordination between the two 
Departments, particularly on nuclear stockpile support and operation of 
simulators for the leveraging of capabilities and avoidance of 
redundancies. Any transfer of work between the departments would 
necessitate a comparable increase to the workforce of the receiving 
department or result in the elimination of other work in order to 
accommodate the new mission.
                management of nuclear weapons stockpile
    Question. The management of DOD's nuclear weapons stockpile 
involves accountability for weapons and components, logistical support, 
and inspections. This mission is the responsibility of DSWA. I have 
heard that the Department is considering splitting and transferring 
these efforts to other organizations rather than transferring as an 
entity to the new WMD agency. Why would the Department want to lose the 
synergy that currently exists among these efforts and the additional 
WMD missions to be performed by the new agency?
    Answer. Current plans call for the integration of Field Command 
DSWA and the missions it performs within the new agency. We are not at 
this time adding or deleting from these missions for the new agency. 
However, groups have been appointed to review some aspects of the new 
agency's activities.
                       nuclear surety inspections
    Question. In the case of inspections, why would the Department want 
to use the nuclear Commander in Chief (CINC)--Strategic Command--to 
inspect other CINC's on nuclear surety? Wouldn't an independent 
inspection process be more prudent?
    Answer. Nuclear surety inspections are currently performed by the 
Defense Special Weapons Agency (DSWA) and present plans call for the 
transfer of this function to the new agency. Whether the inspections 
could be more effectively performed by another DOD organization, 
including a CINC, is the subject of ongoing review chaired by the Joint 
Staff.
                                 ______
                                 
               Questions Submitted by Senator Judd Gregg
        national guard role in consequence management operations
    Question. Dr. Hamre, you indicated that the fiscal year 1999 budget 
request provides approximately $49 million for National Guard units to 
bring in NBC equipment to augment early responders in a crisis. Please 
provide additional explanatory information on the subject, to include, 
but not limited to: detailed funding breakout for fiscal year 1999 and 
the outyears.
    Answer. $49.2 million for fiscal year 1999 implementation has been 
requested for fiscal year 1999 in the President's Budget with the 
following recommendations: $19.9 million to stand up, train, and equip 
National Guard Rapid Assessment and Initial Detection elements; $15.9 
million for patient decontamination and WMD reconnaissance element 
training and equipment in the Army and Air National Guard, and the Army 
and Air Force Reserve; $6.9 million to establish and staff a 
Consequence Management Program Integration Office; $3.3 million to 
train and prepare medical personnel to provide medical care to nuclear, 
chemical, and biological casualties; $1.8 million for additional 
Emergency Preparedness Liaison Officer training and equipment; and $1.4 
million to upgrade simulation systems and conduct civil-military 
response exercises.
    All states and territories will benefit from this substantial DOD 
effort. The benefits from the expenditure of these funds, for the 
purposes identified above, will develop through fiscal year 1999 and 
into the future. Outyear funding requirements are currently under 
development.
    Question. Types of units and the tasks and missions that the units 
will perform.
    Answer. During the development of the plan approved by the Deputy 
Secretary of Defense, Services were asked to identify units that might 
perform the response tasks identified in the interagency WMD response 
plan and to indicate if those units were adequately organized, trained, 
and equipped to perform these specific tasks. This survey dramatically 
displayed existing gaps in procedures, training, and equipment 
necessary for appropriate response.
    The Response Task Force Commanders, Defense Coordinating Officers, 
and Emergency Preparedness Liaison Officers from all services are 
identified and trained to work in the interagency environment. The task 
force commanders, however, have only a limited number of specifically 
focused response assets to call on--and their capacity for large events 
may not be sufficient. This program will dramatically increase those 
elements that are prepared to respond quickly. The consequence 
management program integration office, being established now, will 
develop the organization of each element as well as the training and 
equipment necessary for that element. These elements will range in size 
from 5 or 6 people to 50 or 60. During the first year of the program, 
we will establish three types of elements: Assessment, Decontamination, 
and Reconnaissance, and begin training some of the medical personnel.
    The rapid assessment elements will form the tip of the federal 
military spear for response to WMD attacks. They are designed to 
rapidly deploy to an incident site to assist local, state, and other 
federal agencies in assessing the situation and initiating requests for 
additional state or federal response assets needed. Twenty-two full-
time National Guard soldiers and airmen, commanded by a Lieutenant 
Colonel, will undergo intense technical training. Specific courses for 
each position have been identified. These elements will also be 
equipped with state of the art detection and analysis equipment, as 
well as computer models for various types of attacks. As a National 
Guard element, they may be employed by the Governor or be federalized 
and deployed to respond with other federal assets. The location of the 
RAID elements to be fielded in fiscal year 1999 in each Federal 
Emergency Management Agency Region will be determined by a modeling 
process that analyzes specific stationing criteria. Some influencing 
factors are demographics of a quick response area, geographic 
orientation, National Guard airlift response availability, existing 
response assets, and interstate compacts.
    These elements are created out of existing force structure. We are 
able to leverage the National Guard and Reserve Component capabilities 
by focusing existing units on the consequence management mission tasks, 
providing specific training, and delivering supplemental equipment to 
enhance their current capabilities. This capitalizes on the current 
structure and leverages their current training. Using National Guard 
and reserve elements already stationed throughout the United States 
also improves the response time to incident sites. The National Guard 
elements may be employed as state assets or as federal assets under the 
Response Task Force.
    We believe this program will develop capabilities required by our 
nation to meet the overwhelming challenges from the use of Weapons of 
Mass Destruction. These are the same capabilities we require in the DOD 
to respond to the use of WMD against our forces anywhere in the world.
    Question. Time lines for activation of the units.
    Answer. Ten rapid assessment elements will be fielded in fiscal 
year 1999 (the plan is to field one in the 1st Quarter, and 3 in each 
subsequent quarter).
    The force structure for the Reconnaissance and Decontamination 
Elements is already in existence. Army Reserve and National Guard 
Chemical Units and Air Force Reserve/Air National Guard Medical Patient 
Decontamination teams will be receiving additional training and 
equipment in fiscal year 1999 and fiscal year 2000 to perform this 
mission.
    Question. Training that the units will receive.
    Answer. While many military units possess basic skills and 
capabilities that can be applied to WMD response requirements, few have 
been specifically focused on the precise tasks or equipped with the 
appropriate assets to immediately respond to such an event.
    For many of the WMD response tasks, focusing units on the missions 
they may be asked to perform and developing their awareness of the 
Incident Command System (ICS) is all that may be necessary. For others, 
specific tasks will require training. In a WMD scenario, selected 
members will be tasked to deploy to the Hot Zone and operate for 
extended periods of time, quite different from our wartime practices. 
Even more demanding, the tasks requiring total decontamination must be 
anticipated. These are very different practices when compared to our 
military doctrine today. Here again, the value of training to the same 
standards, using common terminology and exercising with first 
responders, we have the opportunity to prepare for this most demanding 
mission.
    Question. Explanation of how the National Guard units will be 
integrated with Active component units.
    Answer. This is a major step forward for the Guard and Reserve into 
the Total Force concept. In Secretary Cohen's September 4, 1997 Memo on 
the integration of the active and reserve components, we received our 
marching orders. He called on the military services to provide the 
National Command Authorities with a total force that provides the 
flexibility and interoperability necessary for the full range of 
military operations. He went on to challenge us to identify and tear 
down any remaining barriers to effective integration. The use of the 
Guard and Reserve during an actual WMD event will clearly demonstrate 
just how effective we have become in implementing the Total Force 
concept.
    With a major emphasis being place on special training to manage 
chemical and biological disasters, our Guard and Reserve will be better 
able to respond to other disasters that may unexpectedly involve 
hazardous materials. And if called to active duty, these Guard and 
Reserve forces will step right in with their active duty counterparts 
without significant additional training in these areas.
    Question. Explanation of how the National Guard units will 
coordinate with and receive information from local, state, and federal 
authorities.
    Answer. I see that this new role will serve to improve the 
relationship that Guard and Reserve forces have with their local 
counterparts. By bringing them together more often during local, state, 
and federal exercises, they will have the opportunity to practice their 
various roles. So, in the event of an actual disaster, all will know 
exactly what to do and how to work together.
    As a nation we will also benefit as we will continue to have one of 
the most capable military forces in the world.
    And every citizen in our nation also benefits. With a larger force 
of well-trained and well-equipped responders, we will have more experts 
in more communities throughout the country. Having the right people 
with the right training and the right equipment responding at the right 
time to the right threat means more lives saved in any disaster.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
         bosnia--costs, strategy, and number of people involved
    Question. Dr. Hamre, I understand the Administration's plans for a 
follow-on force in Bosnia are now being formulated. Can you tell the 
Committee what the size of the force will be and your estimates of the 
costs for the balance of 1998 and for 1999?
    Answer. NATO has selected a mission option for the follow-on force 
for SFOR. The U.S. has announced that its contribution to that follow-
on force will represent a reduction in the current U.S. contingent from 
8,500 to 6,900. It is too soon to say what the savings will be; 
however, the costs associated with logistics tail will remain 
relatively fixed. As you know, the President has requested $486.9 
million in supplemental appropriations to support U.S. operations in 
Bosnia for fiscal year 1998, post June 30, 1998, as well as $1.858.6 
billion for fiscal year 1999.
    Question. When will the President certify these plans to the 
Congress?
    Answer. Pursuant to the National Defense Authorization and 
Appropriations Acts for Fiscal Year 1998, the President submitted a 
certification and related report to the Congress on the need for 
extending the U.S. deployment in Bosnia and on other matters as part of 
the request for fiscal year 1998 supplemental appropriations, which was 
dated March 3, 1998.
    Question. Is there an agreed upon exist strategy for pulling U.S. 
forces out of Bosnia?
    Answer. The goal of U.S. policy in Bosnia is to create a 
sustainable peace where a sizable NATO presence is no longer necessary 
and diplomatic, institutional, and economic levers are sufficient to 
sustain peace in the region. Ten benchmarks have been established which 
would likely create the conditions needed for a NATO ground troop 
withdrawal:
    1. Local police forces need to be restructured, re-integrated, and 
re-equipped such that they can.
    2. A phased and orderly process for returns of refugees and 
displaced persons should be in effectively deal with civil disorder in 
accordance with western standards.
    3. Less political party control of the media, more accessibility 
for all political parties, and a more formidable ``independent'' media.
    4. The military balance will require confidence and security 
building measures, arms control, and greater inter-entity military 
cooperation.
    5. Functioning Joint-Institutions that decrease official corruption 
through the creation of legitimate revenue/disbursement mechanisms.
    6. Democratization. The September 1998 elections must be conducted 
in a free and fair manner. The need for OSCE supervision/arbitration 
should reduce. Local, entity, and national governments should function 
transparently.
    7. Economic reconstruction. The interim currency should be in 
circulation, public corporations formed, transparent budgets in place, 
and an IMF program in place.
    8. A multi-Party solution to the administration of Brcko should be 
in place.
    9. A improve party cooperation on the war crimes issue.
    10. International organizations should be able to function without 
a large NATO presence.
    Question. What is DOD's policy for the troops currently assigned to 
Bosnia--will they be replaced or asked to stay on for the duration?
    Answer. Some troops will be replaced. Generally, DOD is using Army-
wide sourcing and continued participation by the Reserve Components to 
lessen the impact on EUCOM of OPTEMPO and PERSTEMP requirements. For 
some combat/combat-service support units such as Military Police, 
logistics, maintenance, etc., duty in Bosnia is enhancing their skills 
and readiness.
                        recruiting and retention
    Question. Recently, the Air Force Chief of Staff brought his 
concerns on pilot retention to my attention. I am told the other 
services are also concerned with their ability to meet their recruiting 
and retention goals. What does your 1999 budget request do to ensure 
that the services can meet their personnel requirements?
    Answer. Last year the Department requested and Congress approved 
legislation to increase the maximum amounts for Aviator Career 
Incentive Pay (ACIP) and the Aviator Continuation Bonus (ACP). The 
Services budgeted funds to cover the increases. In general, across the 
Services both retention and bonus take rates are declining, pilot 
separations are increasing, and airline hiring--which may have peaked 
at 3,854 new hires in 1997--is projected to stay above 3,000 over the 
next several years. Applying current retention models with the expanded 
authorities provided in the Fiscal Year 1998 National Defense 
Authorization Act, the Services project they will retain adequate 
numbers of aviators to meet mission requirements through fiscal year 
1999. The Services are also working hard to reduce the strain of high 
operational tempo on the quality of life of our pilots and their 
families. While pilot retention is of concern, the Services are not now 
indicating a short-term readiness impact. We are concerned, however, 
about longer-term issues and are studying options to address this 
problem on a priority basis. We expect to provide a report to Congress 
on the progress of this effort by March 31.
    Question. Are you confident the request provides adequate resources 
for recruiting and advertising?
    Answer. The fiscal year 1999 budget request for recruiting and 
advertising provides what we felt to be an adequate level of investment 
for the planned accession missions. That said, a strong economy, 
coupled with record-low unemployment, continues to force the Department 
to apply additional resources to sustain success in military recruiting 
programs. After facing resource shortfalls in recruiting and 
advertising, the Army reprogrammed funds in fiscal years 1997-98 for 
advertising, enlistment bonuses, and education benefits. Today, the 
Army has adequately budgeted recruiting for fiscal year 1999. In fiscal 
year 1998, the Navy cut recruiters and other resources; as a result, 
the Navy probably will miss its accession objectives. However, the Navy 
has taken steps to correct that problem for fiscal year 1999, resulting 
in an investment-per-recruit ratio similar to the level employed during 
the successful recruiting years of 1996-97. The Navy's action will fund 
an expansion in the number of recruiters and will boost investments in 
enlistment incentives and advertising. The Air Force and Marine Corps 
recruiting and advertising budgets appear to be satisfactory for fiscal 
year 1999.
    Question. Can you assure this Committee that sufficient funding has 
been set aside for bonuses and other incentives to retain key military 
personnel?
    Answer. Our assessment is that the Services have allocated 
sufficient funding to retain individuals who have highly marketable 
civilian skills. This has always been a challenge for us, even during 
the drawdown. In order to be competitive, we use the special and 
incentive pays authorized by Congress such as selective reenlistment 
bonus; aviation continuation pay; medical specialty pays for doctors, 
nurses and dentists; and nuclear officer bonuses. We appreciate the 
strong and continuing support of Congress for these special pays. The 
fiscal year 1999 budget request is adequate to meet current needs, but 
we see indications of potential problems in the next few years and may 
be putting forth requests for some increases in existing pays and 
possible additions of new pay authorities in the near future.
              medical care for retirees and fehbp coverage
    Question. Dr. Hamre there is a great outcry among our military 
retirees that their health needs have been forgotten by the Defense 
Department. One proposal which may come up this year to redress this is 
to place our retirees under the Federal Employees Health Benefits 
Program. Can you present the arguments in favor of and in opposition to 
this plan and why DOD might not be supportive of the idea?
    Answer. Undoubtedly, this nation owes a great debt of gratitude to 
the men and women who served, especially those who risked their lives 
and fought the nation's wars. The Department feels a sincere and 
abiding responsibility for the health care of all our beneficiaries, 
including those who are retired. While the Department deeply 
appreciates the health care needs of our military retirees, legislative 
proposals mandating access to the Federal Employees Health Benefits 
Program (FEHBP) for military retirees who are Medicare eligible raise 
significant cost concerns. The CBO has estimated that the total 
government cost of offering FEHBP to this population is approximately 
$1.5 billion annually. Moreover, allowing major segments of our 
beneficiaries to enroll in FEHBP poses serious readiness implications 
for the Military Health System, since retention of our retiree 
population within the direct care system is critical to training and 
readiness. While the DOD places a high priority on the importance of 
providing access to affordable health care to our retirees, their 
spouses, and survivors, absorbing the cost of FEHBP on an annual basis 
is prohibitively expensive. The Department strongly endorses the use of 
Medicare dollars through Medicare subvention to expand capacity and 
services to our Medicare-eligible beneficiaries. The Department is 
aggressively pursuing the Medicare subvention demonstration program 
authorized by the Balanced Budget Act of 1997 as an important first 
step in bringing Medicare subvention nationwide.
    Question. How would such a proposal impact on the military 
treatment facilities?
    Answer. Proposals to offer FEHBP enrollment to Medicare eligible 
military retirees would have a dramatic impact on military treatment 
facilities and the entire Military Health System. As stated above, 
absorbing the cost of FEHBP on an annual basis would dramatically 
reduce the ability of the Military Health System to meet its readiness 
mission and would have detrimental effects on the training and skill 
maintenance of physicians and other medical personnel. Moreover, 
requiring the Military Health System to absorb the cost of FEHBP 
premiums for some or all retirees would actually reduce the capacity of 
the MHS to provide services to retirees on a space available basis. 
This reduction in the current level of effort would, in turn, 
jeopardize the flow of Medicare dollars into the MHS, which is critical 
to the success of the Medicare subvention program.
                               b-2 bomber
    Question. Mr. Secretary, last year the Congress provided $331 
million to start the procurement of additional B-2 bombers. The 
President has not indicated that he intends to use these funds for 
other purposes. Have you decided to buy more B-2 bombers, and if so, 
how many?
    Answer. The President will indicate his intentions with respect to 
procuring additional B-2 bombers in fiscal year 1998 after he receives 
the recommendations of the Congressionally-mandated Long Range Airpower 
Panel. The Department of Defense position remains unchanged; there is 
no need to procure additional B-2's beyond the current fleet of 21 
aircraft.
    Question. If the President determines that no more B-2's will be 
purchased what plans have you made for spending the $331 million 
appropriated?
    Answer. The Air Force will use the $174 million requested in the 
fiscal year 1998/1999 President's Budget to support the B-2 bomber 
baseline program identified to Congress in justification material 
provided in February 1997. The remaining $157 million will be applied 
to continuing the B-2 Multi-Stage Improvement Program. The following 
requirements are currently unfunded:

                                                                Millions

Low Observable (LO) Maintainability Improvements..................   $50
Deployable Shelters...............................................    22
Beyond-Line-of-Sight (BLOS) SATCOM................................    58
Radio/Mission Management 810 Center Instrument Display...    36
WCMD Integration..................................................    39
Auto-throttles/Digital Engine Control.............................    11
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................   216
                                 ______
                                 
            Question Submitted by Senator Ernest F. Hollings
                           funding for jrotc
    Question. Mr. Secretary, I am receiving reports from students, 
educators, and parents from all across South Carolina telling me that 
funding for Junior ROTC has been cut and that this cut is adversely 
affecting this important youth program. Why is this so? Will this 
year's budget adequately fund JROTC?
    Answer. No Service has expanded the number of JROTC units; however, 
because of the need to trim back overall, the Navy has reduced funding 
for existing units. It did so only after it had reduced its JROTC 
headquarters staff by about one-half. The funding adjustments by the 
Navy represent a 30-percent reduction in its JROTC budget for fiscal 
year 1998, relative to 1997. This includes cuts in funding for student 
travel, which in turn may limit field trips. A separate concern from 
South Carolina, expressed during a meeting of state legislators and 
educators sponsored by the Senate Armed Services Committee staff on 
March 6, centered on the State's preference to establish new JROTC 
units. During that meeting, we reported that the Services are not 
currently in a position to expand their JROTC presence in South 
Carolina because of budgetary constraints. We also noted that the JROTC 
program is significantly over-represented in South Carolina relative to 
the national average. About one-half of South Carolina high schools now 
have JROTC units compared to approximately 10 percent nationwide, with 
many of the latter group now on a waiting list.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
                               deployment
    Question. Last spring the GAO completed a report, which was 
entitled, ``Medical Surveillance Improved Since Gulf War, But Mixed 
Results in Bosnia.'' In short, the GAO reported that DOD had initiated 
changes to improve medical surveillance for deployments, but that 
medical assessments and record keeping were still incomplete. What, if 
anything, Dr. Hamre, is DOD doing differently in the current deployment 
to avoid repeating the mistakes made seven years ago?
    Answer. The Department has learned many lessons from the Gulf War 
experience. After the Gulf War, the Assistant Secretary of Defense for 
Health Affairs and the Joint Staff undertook a complete review of 
doctrine, policy, oversight, and operational practices for medical 
surveillance and force health protection. A number of changes were 
incorporated for subsequent deployments to Somalia, Rwanda, Haiti, and 
Bosnia. In August 1997, the Department issued DOD Directive 6490.2 
``Joint Medical Surveillance'' and DOD Instruction 6490.3 
``Implementation and Application of Joint Medical Surveillance for 
Deployments.'' The directives establish the Department's policy and 
requirements that will improve health assessments, surveillance, and 
record keeping during deployments. The directives require: pre-
deployment and post-deployment health screenings, including mental 
health assessments, blood sample collections; health threat briefings; 
and the collecting, analyzing, and documenting of an expanded range of 
health surveillance data during deployments.
    The Joint Staff and the Services are implementing these 
requirements. Currently, joint publications are being rewritten to 
include changes in doctrine regarding force medical protection. 
Additionally, the warfighting Commanders in Chief have revised theater 
operations plans to include the force medical protection requirements.
    For current operations in Southwest Asia, USCINCCENT recognized the 
importance of improved medical surveillance, immunization tracking, and 
record keeping. USCINCCENT requested and received augmentation by a 
Joint Medical Surveillance Team (JMST) in March 1998. The JMST will 
coordinate, monitor, and evaluate force medical protection measures 
during current operations. The 8-person team includes one 2-person 
element augmenting the CENTCOM Surgeon's staff in Florida, while three 
2-person elements deployed to augment the medical staff of the Army, 
Air Force, and Navy components in theater.
    For the future, the Services and the Director, Medical Information 
Management, Technology and Reengineering, TRICARE Management Activity 
are establishing the information system requirements to support medical 
record keeping during deployments and throughout the Military Health 
System. The computerized patient record (CPR), Theater Medical 
Information Program (TMIP), and the personal information carrier (PIC) 
are major information system initiatives designed to create an 
effective medical tracking system and health record before, during, and 
after deployments.
    For the current operations in Southwest Asia, actions related to 
specific lessons learned include:
    Learned.--Perform and document pre-deployment health assessment.
    Action.--USCINCCENT requires health assessment before deployment. 
In theater health assessment standardized and entered in central 
database.
    Learned.--Improve medical record keeping in theater.
    Action.--Immunizations documented by: USAF using Military 
Immunization Tracking System; USA using MedPROS; and USN using SNAP 
Automated Medical System afloat.
    Health care encounters in theater documented by: USAF and USA using 
``Medical Surveillance--Theater'' system; and USN using ``SNAP 
Automated Medical System'' afloat.
    Requirements being developed for documentation of use/issue of 
preventive countermeasures.
    Learned.--Improve medical surveillance in theater.
    Action.--USCINCCENT requires weekly reporting of disease and non-
battle injury (DNBI) data to the CINC Surgeon.
    Joint Medical Surveillance Teams deployed at USCINCCENT request to 
oversee surveillance and monitor immunization tracking and record 
keeping.
    USAF and USA using ``Medical Surveillance--Theater'' system.
    USN using ``SNAP Automated Medical System'' afloat.
    Learned.--Improve exposure assessments and record keeping in 
theater.
    Action.--Laboratories deployed (biological and environmental 
capabilities).
    Documentation of pesticide usage required during deployment.
    Database of environmental sampling results retained.
    Learned.--Perform and document health assessment at redeployment.
    Action.--In theater health assessment standardized and entered in 
central database.
    Learned.--Need licensed products for BW/CW countermeasures.
    Action.--Ongoing efforts among OASD(HA), Food and Drug 
Administration (FDA) and Army Medical Research and Materiel Command 
regarding pyridostigmine bromide (PB), botulinum toxoid, and future 
products.
    Learned.--Improve health risk communication efforts.
    Action.--Predeployment health threat briefings (``what are the 
threats'').
    Health threat briefings (``what actually was experienced'') 
required on redeployment.
    Information packets on health issues (especially for BW/CW 
countermeasures) for military member, unit leadership, and medical 
personnel.
    Plan to distribute results of post-deployment health assessments.
    Learned.--Assess health of force post-deployment.
    Action.--U.S. Army Center for Health Promotion and Preventive 
Medicine has mission for central analysis of deployment and 
postdeployment health experience.
    Learned.--Improve VA/DOD coordination during and after deployment.
    Action.--Active VA/DOD Executive Council.
    Military and Veterans Health Coordinating Board evolving out of 
Persian Gulf Veterans Coordinating Board.
    Question. Last year this subcommittee added funding to develop 
advance medical information management technologies. Health Affairs has 
begun an effort out of those funds which would put critical medical 
data about each deploying service member on a ruggedized magnetic 
dogtag, called a Personal Information Carrier (PIC). The dogtag would 
capture massive amounts of data about each person's particular health 
situation before, during, and after a deployment. This prototype 
carries the digital equivalent of 15,000 pages worth of text, and costs 
about $20. Unfortunately, while the Administration is planning a 
33,000-person demonstration of these carriers in the future, there is 
no funding in the Administration's request to begin this project. As 
our forces once again head back to the Gulf, I can't help but think we 
can do a better job of monitoring the health risks that our service 
members encounter when they are deployed. What will DOD be doing to get 
technologies like the PIC out of the laboratory and into the field?
    Answer. Current joint-service efforts directly support President 
Clinton's November 8, 1997 statement and the Fiscal Year 1998 DOD 
Authorization Act requirements (Section 765: Medical Tracking System). 
These directives establish the Department's policies, and the Composite 
Health Care System II (CHCS II) objectives regarding joint medical 
surveillance during deployments, which support Force Health Protection 
initiatives. They require pre-deployment and post-deployment health 
screenings, including mental health assessments, blood sample 
collections, health threat briefings, and the collecting, analyzing, 
and documenting of an expanded range of health surveillance data during 
deployments. This data will be captured in a database built on 
technology used for assessing Persian Gulf Illness. Furthermore, the 
Computerized Patient Record (CPR), Theater Medical Information Program 
(TMIP), and the Personal Information Carrier (PIC) are major 
information system initiatives designed to create an effective medical 
tracking system and health record prior to, during, and after 
deployments.
    In order to meet the critical, immediate need for the database and 
this device, DOD is following an acquisition strategy of ``buying a 
little, testing a little and deploying a lot''. DOD is employing full 
and open competition to obtain the technical solution--a PIC device 
that will interface with existing databases. Interested vendors will 
provide hardware prototypes by May 5, 1998. After conducting hardware 
destructive tests, a proof of concept test will be performed this 
summer to ensure that medical data can be captured in the database, and 
written to and read from the PIC devices.
    A review of DHP funding priorities is currently occurring to 
determine how to best pay for the $32 million needed for PIC. Software 
development will continue, and a formal Request for Purchase (RFP) will 
be issued October 1, 1998 for a proposed Low Rate Initial Production 
(LRIP) quantity of 33,000 PIC hardware devices. These devices are 
scheduled to be operationally tested in Southwest Asia starting in 
March 1999.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
                         inflation adjustments
    Question. My understanding is that the Administration's budget has 
allocated to the Department of Defense another $21.2 billion over the 
next 5 years in additional spending power, as a result of lower 
inflation estimates. (These savings amounted to approximately $2.8 
billion for fiscal year 1999.)
    Could you please describe how the Administration's process for 
distributing these inflation savings works? Has the Department always 
been allocated these savings?
    In the past, have some of the savings been retained by OMB to 
provide budgetary flexibility elsewhere in the budget? Do you know what 
OMB's thinking was in allocating all of these savings to DOD?
    Answer. The Administration (OMB) issues economic assumptions in 
late November or early December each year to all federal departments 
and agencies for purposes of preparing the annual budget for submission 
to Congress by the first Monday in February. The economic assumptions 
include separate projections for military and civilian pay raises, fuel 
prices, medical costs, and for all other non-pay purchases.
    The revised economic assumptions can result in either a savings or 
an increase to the Department's plan. For the last several years, the 
historically low inflation rates have resulted in savings. President 
Clinton has allowed DOD to retain these savings. In some prior years to 
this Administration, the OMB took some of the savings for deficit 
reduction since a reduction for inflation does not take reduce real 
program.
    OMB allowed DOD to keep all the inflation savings in the fiscal 
year 1999 budget because the Balanced Budget Agreement was in terms of 
nominal dollars--not constant dollars--and DOD had a number of fact-of-
life unpaid bills such as civilian pay.
                             base closures
    Question. Secretary Cohen's Defense Reform Initiative includes the 
recommendation that Congress authorize two more rounds of base closure, 
in 2001 and 2005. Comptroller Lynn's chart on the base closure issue 
asserts that 2 new BRAC rounds ``will produce $3+ billion in annual 
savings.'' However, the chart fails to predict when those savings will 
materialize.
    Looking at the most recent BRAC round, according to DOD estimates, 
the 1995 round will not begin to produce annual savings until 2002 or 
later--seven years after the base closure commission made its 
decisions.
    Is it fair for us to project this record forward? Can we conclude 
that a BRAC round in 2001 will not produce net savings until 2008, and 
that a BRAC round in 2005 will not yield net savings until 2013 or 
later?
    Answer. No. A BRAC round in 2001 will produce annual net savings in 
2005. A BRAC round in 2005 will produce annual net savings in 2009. 
Together, these two rounds will yield annual net savings in 2008 that 
build to more than $3 billion per year after 2011 and to a total of $21 
billion by 2015. Annual savings tend to exceed annual costs in the 
fourth year of implementation. For example, annual savings exceeded 
annual costs associated with BRAC 88 in 1994 (5th year), BRAC 91 in 
1995 (4th year), BRAC 93 in 1997 (4th year) and BRAC 95 in 2001 (6th 
year).
                    tracking infrastructure savings
    Question. Is there adequate accounting throughout the services and 
the agencies, to track savings attributable to outsourcing and 
privatization? If so, what are those accounting procedures and systems? 
Are they compatible and consistent across agencies and services? Is 
there guidance, and are there standard criteria and methodologies, for 
counting costs and savings? Are you confident that Deputy Under 
Secretary Goodman is adequately tracking these savings?
    Answer. All organizations, not just DOD, must estimate the savings 
produced by management reforms, consolidations, and reorganizations. 
Accounting systems keep accurate records for costs; however, no 
parallel systems exist to track savings. Therefore, savings must be 
estimated. The fact that organizations must estimate savings, however, 
does not mean that the savings are not real. The primary reason that 
business and government reform management practices, consolidate 
operations, and improve organizational structures is precisely to 
generate these savings.
    The Components were not issued specific guidance concerning 
standard criteria and methodologies for counting costs and savings; 
however, various estimating techniques confirm the general level of 
savings associated with outsourcing and privatization efforts. Further, 
we are developing a questionnaire to be used to consistently track 
savings for future rounds and I am confident that John Goodman has a 
good handle on these savings.
                     $60 billion procurement target
    Question. We often hear about the Department's goal of a $60 
billion annual procurement or modernization budget. And I note that the 
President's budget proposal achieves that goal for fiscal year 2001, 
2002 and 2003. Could you please explain how this $60 billion target was 
arrived at? Was it a threat-based analysis?
    Answer. The $60 billion target is a departmental goal. There is 
universal agreement that the level of procurement funding has fallen as 
far as it should. There is an undisputed need to invest in the 
recapitalization of our forces. Current inventories are aging and new 
technologies offer enormous potential to improve our combat 
capabilities across all mission areas. As the level of procurement 
funding dropped below $40 billion in the fiscal year 1996 budget, the 
Department's leadership felt it was important to focus attention on the 
need to increase funding for modernization. The establishment of a 
departmental funding target serves that purpose. Both the Secretary and 
I have testified in the past that it is important not to become fixated 
with any particular number. The $60 billion is not an end in itself. 
What is important is recognition of the need to increase procurement 
funding in order to pursue a focused modernization effort that will 
ensure this country can maintain the qualitative battlefield 
superiority we need to have. The Quadrennial Defense Review (QDR) 
reaffirmed the desirability of achieving a modernization level of 
roughly $60 billion. As you noted, our budget proposal achieves that 
level in fiscal year 2001 and stabilizes funding at that level through 
fiscal year 2003.
                             cbo reestimate
    Question. Press reports this morning suggest that the Congressional 
Budget Office will conclude that the fiscal year 1999 budget would 
result in outlays that are $3 billion to $4 billion higher than 
permitted by the bipartisan budget agreement. In short, the 
Administration underestimated the cost of its defense program by $3 to 
$4 billion.
    Could you please respond to these reports? What kind of a 
difference are we dealing with? How do DOD's budget estimation and 
projection methods differ from those of CBO? To what parts of the 
defense budget can we attribute these billion-dollar differences in 
outlay projections?
    Answer. The CBO reestimate of the President's budget request is 
$3.6 billion higher than the OMB estimate of the program. In general, 
CBO and OMB differ in these estimates because CBO does not adjust their 
model for anticipated policy changes, program level changes, or 
emerging trends in spending patterns. OMB/DOD projects outlays based on 
program content changes such as modifications; Congressional changes to 
the original budget request; and actual program execution experience. 
Within the defense budget, the major outlay differences are found in 
the following accounts: Working Capital Funds; RDT&E, Air Force; 
Shipbuilding and Conversion, Navy; Base Realignment and Closure; 
Operation and Maintenance, Air Force; National Defense Stockpile; and 
Aircraft Procurement, Navy.

                          subcommittee recess

    Senator Stevens. This will complete this hearing and we 
will resume the subcommittee again on March 4, when we take up 
the Air Force budget.
    Thank you.
    [Whereupon, at 3:58 p.m., Tuesday, February 26, the 
subcommittee was recessed, to reconvene at 10 a.m., Wednesday, 
March 4.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                        WEDNESDAY, MARCH 4, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:41 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Cochran, Domenici, Bond, Shelby, 
Bumpers, Harkin, and Dorgan.

                         DEPARTMENT OF DEFENSE

                      Department of the Air Force

                        Office of the Secretary

STATEMENTS OF:
        HON. F. WHITTEN PETERS, ACTING SECRETARY OF THE AIR FORCE
        GEN. MICHAEL E. RYAN, CHIEF OF STAFF

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. General Ryan, Secretary Peters, I think I 
will start. I will ask Senator Bond also to make a statement. 
We hope that the rest will get here who intend to get here, but 
the vote has just been on for a few minutes. We have made 
arrangements so that we will not be interrupted again this 
morning.
    This is the first appearance that both of you have made 
before this committee and we welcome you. There is going to be 
some question about your budget. I do think you have done an 
excellent job of building on what is available. We feel that we 
are going to have to go into some of the negative trends that 
we have seen as far as the Air Force is concerned.
    I am disturbed that the O&M account is basically flat for 
fiscal year 1999 compared to fiscal year 1998, and that is in 
spite of the fact that the Air Force must absorb $800 million 
in price increases and program transfers within the available 
budget.
    I think that we are all going to have questions about 
readiness. But my long-term goal, of course, is the F-22. We 
have to make sure that our modernization program stays on 
course.
    The space-based infrared system and the Joint Strike 
Fighter are moving to costly phases now, and that is going to 
produce substantial problems for us unless we can find some way 
to hold those costs down.
    It looks like the defense budget is going to be flat 
through 2003. I am disturbed about that because I think we have 
had to absorb some costs that I still believe were emergency 
costs for Bosnia and some of the Iraq costs which we will try 
to address in the supplemental. But, clearly, that projection, 
now that the balanced budget is going to occur actually this 
year rather than in 2002, is going to put enormous strain on 
defense spending because I am certain that that is going to be 
the goal, to keep it that way through the period ahead.
    Hopefully, we will have a balanced budget from now on.
    But I am just increasingly disturbed that this subcommittee 
has had to sort of swallow some costs that were not really 
basically defense costs and they are going to impact our future 
as far as having funds available for the modernization program.
    I will have some specific questions after you gentlemen 
make your statements.
    Let me yield now to Senator Bond.

                 STATEMENT OF HON. CHRISTOPHER S. BOND

    Senator Bond. Thank you very much, Mr. Chairman.
    Mr. Secretary, General Ryan, I join with the chairman in 
welcoming you before the committee today to address some really 
prominent questions concerning the Air Force.
    As we all know, today, once more, the Air Force is being 
asked to do more with less. Mr. Secretary, I know that I join 
with the rest of the members of this committee when I voice my 
concern over the ability of the Air Force effectively to meet 
its mission requirements. That, basically, is what we are all 
about. At the same time, we cannot be making deep cuts in the 
supply stocks and accelerating depreciation of life cycle times 
of equipment, not to mention stretching personnel to their 
limits through the increased deployment schedules.
    We have all heard about and are very much concerned about 
the abysmal retention rates of pilots. We are sympathetic to 
your efforts to find an answer. But I submit that just throwing 
money at these individuals may not be the sole answer.
    As I understand, most join the military service to live the 
experience of doing something significant for their country, to 
lead a superlative group of men and women and to provide a fair 
lifestyle for their families.
    Of course, this includes financial considerations, but it 
is not the be-all and end-all. As I understand it, a program to 
give pilots a considerable bonus package has met with something 
less than an enthusiastic response.
    The exodus of the individuals from the Air Force has 
spanned the rank structure, and I anticipate that, when these 
bonuses run their course, you will, once again, see another 
exodus only at higher, and arguably more critical, grades.
    Over the years, individual tactical training flight time 
has been drastically reduced. Operations and maintenance 
funding has been creatively shifted around so that contingency 
operations may be fully resourced while other phases of 
readiness training are critically short of funds, and 
operational flights, in large part, are spent flying figure 
eights in the sky, waiting, just waiting for skills to be 
called on--but not honing the edge of these superb pilots.
    Rather, operational flying by its nature these days permits 
that edge to be dulled from a lack of training. I wonder if you 
are looking into improving the availability of high quality 
training opportunities during deployed operations and other 
measures like that to improve pilot morale.
    I suggest that this kind of thinking might be applied, as 
well, to junior and senior enlisted ranks.
    That said, we recognize the awesome burden facing our Armed 
Forces, both in terms of its increase in mission requirements 
and concurrent decrease in the funding available to meet those 
missions.
    For many years, this committee has warned the Department of 
Defense about the policy of low-balling funding requirements 
which only exacerbates the fiscal problems facing all of the 
services' ability to conduct the myriad of operations required 
of you. I think we are now caught in another emergency crack 
where there has been low-balling and overexpenditure.
    As I understand it from Mr. Hamre's comments last week, you 
are already expending funds from the fourth quarter of the 
fiscal year 1998 budget to pay for missions being flown today, 
and we are only in March, Mr. Secretary.
    Over the past 6 years, this Congress has increased the 
defense budget by billions of dollars. Some critics have 
attacked us for those increases. But the Department and the 
administration have routinely come back to us pleading for 
more, as you see once again this year through emergency 
supplementals--primarily because of the burgeoning contingency 
operations costs.
    Some of those operations have extended way beyond 
contingency status and we have contested your financial 
planning for them. I don't think it is adequate. I don't think 
you are giving us a fair assessment.
    On a more happy note, as we look to meet your fiscal 
requirements and your operational requirements, we recognize 
the need to coordinate and integrate our combat forces now more 
than ever. As someone, I can assure you, who is deeply 
concerned about the integration of our Active and Reserve 
forces, I congratulate you for the manner in which the Air 
Force leadership has dedicated itself and been able to 
integrate the Active, Reserve, and Guard components with the 
military fighting force.
    If they were here, I would call upon the leadership of your 
sister services to take note of how you do it successfully. If 
you have a chance, you might share with them that it can work 
and you do make it work. There are some people who just think 
there ain't no way, but you all have done it.
    I do have some concerns regarding the upgrading of National 
Guard general purpose squadrons to insure the viability for the 
future force of the 21st century. I draw attention to this 
because of the fact that the St. Louis Air Guard F-15 unit is 
currently conducting front-line deployed operations overseas. 
Many of our Nation's most experienced fighter aviators reside 
in Guard units. This same unit in my home State is, in fact, 
home to a gulf war three time Mig killer, and I am sure that 
the service would benefit from insuring his continued full 
integration in the fighter force.
    General Ryan, when it comes to my question time, I would 
like for you to address how the Air Force intends to insure 
this and maybe speed up the integration of the F-15C into Guard 
units or upgrade the electronic suite of the F-15A's to keep 
them front-line viable or even convert these units to F-15E 
squadrons, which we would like to see.
    I also congratulate you both on your dedication to 
providing the Air Force with a program to insure the Air Force 
will continue to meet its airlift mission requirements well 
into the future. We will address this, too, in the questions 
and answers as well as the questions submitted for the record.
    Mr. Chairman, I thank you for this time and I appreciate 
the opportunity to hear what the Secretary and the General have 
to say.
    Senator Stevens. Thank you very much, Senator.
    I don't think we will wait any longer. There may be others 
who will come later.
    We would be pleased to have your statements, gentlemen.
    Mr. Secretary, General, please proceed.
    Mr. Peters. Thank you, Mr. Chairman. Thank you, Senator 
Bond.
    We appreciate the opportunity to appear this morning before 
you to discuss the Air Force's future plans and priorities and, 
in particular, our proposed program for fiscal year 1999. I 
would also like to thank this committee for its past support 
for Air Force programs, which has been tremendous.
    For fiscal year 1999, the Air Force has three budget 
priorities: people; readiness; and modernization. People come 
first because we cannot have a ready force today or tomorrow 
unless we attract, train, and retain the highest quality men 
and women to operate our 21st century technologies.
    Readiness and modernization are equally key to our present 
and future national security and in our constrained budget 
environment, we must assume some risk in current readiness in 
order to pay for modernization that is key to our future 
security.
    We believe that we have properly balanced our 1999 budget, 
increasing funding for readiness-related items by some $1 
billion while also providing increased funding for key 
modernization programs in air superiority, global mobility, and 
space.
    Importantly, over the Future Years Defense Program, we have 
achieved 15 percent real growth in our investment accounts.
    Our three budget priorities directly support the 
``Quadrennial Defense Review'' [QDR] strategy, the report of 
the national defense panel [NDP], and the chairman's ``Joint 
Vision 2010.'' In fact, the national defense panel reaffirmed 
that aerospace power plays a significant role in shaping, 
responding, and preparing for an uncertain future.
    Let me turn first to people:
    As I have said, people are central to our efforts to shape 
the international environment and to run our modern Air Force. 
Over the past year, our airmen have been engaged around the 
world and have flown into virtually every country in the world. 
Our forces, for example, have supported peacekeeping operations 
in Bosnia, humanitarian firefighting operations in Indonesia, 
and noncombatant evacuation operations in Albania and Sierra 
Leone.
    We also contributed significantly to shaping events by 
participating in 53 joint and multilateral exercises worldwide. 
And, of course, the Air Force has been heavily engaged in 
Southwest Asia where, on a typical day, 8,500 men and women 
have launched about 150 sorties over Iraq. Today that number 
has risen to about 14,000.
    These operations are not without cost. The deployment rates 
of our total force have increased dramatically since the end of 
the cold war. Altogether, last year some 14,000 total force 
airmen were deployed on any given day, a fourfold increase over 
1989, despite a 35-percent decrease in total end strength since 
the end of the cold war.
    Two years ago, many of our men and women were deployed well 
over our goal of 120 days per year. In 1997, until the recent 
developments in Southwest Asia, we had substantially reduced 
deployment rates for many units through global sourcing, 
creative use of Reserve and Guard units, and increases in 
manning in highly stressed specialties. However, these efforts 
have placed a heavy burden on our Reserve forces.
    During 1997, our Reserve component deployed during every 
contingency tasking. In 1997, our Air National Guard and Air 
Force Reserve air crews served an average of 100 days in 
uniform with their support teams averaging 80 days.

                            Quality of life

    Strengthening the quality of life for all of our airmen 
must, therefore, be our highest enduring priority. We owe it to 
our airmen to ensure that their faithful service is rewarded 
with pay, housing, medical, and community support services that 
meet their needs.
    Over the past year, we have worked hard to decrease the 
stress of deployments. We have increased the amount of time our 
men and women in home stations can spend with their families 
after deployment, and we have improved family support during 
times of deloyment.
    For example, we have reduced the Air Force participation in 
joint exercises by about 15 percent and we have tried to 
combine our own operational readiness inspections with other 
operational activities.
    We have also tested an ombudsman program at five Air Force 
bases to assist families of deployed airmen. In addition, in 
1999 we will continue our efforts to improve dormitories and 
family housing, increase child care spaces, and provide teen 
and family centers.
    About one-third of our Milcon budget is devoted to these 
quality of life improvements.
    We are also working hard on readiness, which is absolutely 
essential to support the respond portion of the QDR strategy. 
Today, 91 percent of our units are at readiness ratings of C-1 
or C-2, with our front-line units in PACAF and USAFE 
significantly higher. However, some readiness indicators are 
dropping. Our mission capable rates, for example, have declined 
6.8 percent since the gulf war. Engine readiness has also been 
a major problem. And as General Ryan will discuss in more 
detail, pilot retention remains an extraordinarily grave 
concern.
    The reasons for these declining readiness indicators are, 
in fact, very complex and go beyond money.
    With respect to engines, turmoil in our air logistics 
systems work force, coupled with a shortfall in spare parts 
funding in 1997, have caused lower than average productivity. 
Elsewhere, about one-third of our depot work is moving to new 
locations with attendant disruption.

                        Equipment modernization

    Across our fleet, old age has increased the difficulty of 
keeping aircraft running and has raised the cost of readiness. 
To overcome these challenges we increased our readiness-related 
funding in 1998 and also in 1999. We also plan in the current 
program to fund additional engine modules for the F-15 fleet 
and to fund new engines for our RC-135's.
    We have also started an engine recovery program and this 
month will activate a TF39 engine repair facility at Travis Air 
Force Base in an effort to improve the reliability of our C-5 
fleet.
    Later this year, the F-100 engine core workload will begin 
transferring to a more stable work force at Oklahoma City. 
Finally, we are upgrading our old equipment. For example, in 
fiscal year 1999, we plan to invest in the PACER CRAG Program, 
which upgrades avionics suites on 191 KC-135's with state-of-
the-art glass cockpit systems.
    We have also programmed over $500 million for C-5 engine 
and avionics upgrades.
    We are optimistic about the result of these changes, but it 
will take time to see the effects.
    Ultimately, our readiness improvements will depend on 
modernization. In this regard, we have increased procurement 
funding for our breakthrough capabilities identified in the QDR 
and the national defense panel, such as the F-22, the airborne 
laser, SBIRS, and EELV.
    We are also funding programs to defend against the 
asymmetric threats identified by the national defense panel 
report. For example, in 1999, we will invest approximately $225 
million in passive chemical/biological defensive measures and 
in the area of $150 million in active defensive measures.
    In addition, as part of our defense in depth against cyber 
attack, we have implemented the automated security incident 
measurement system at all 108 Air Force bases to detect network 
intrusions, and we are working on installing firewalls.
    To fund this modernization effort, the Air Force has 
achieved significant cost reductions through ongoing efforts to 
bring about a revolution in business affairs. Since 1995, we 
have cut headquarters manning by 1,700 positions. Through the 
recent C-5 depot competition, we should save $190 million over 
the next 7 years.
    Recent and planned A-76 competitions will yield savings of 
over $1 billion, and acquisition reform has saved $7 billion 
and avoided over $11 billion in additional costs.
    This year's Air Force posture statement is itself tangible 
proof of how we are saving resources. Last year, we produced 
20,000 paper copies. This year, using electronic publishing, we 
produced less than 2,000 paper copies and put a downloadable 
copy on the web.
    There is still, however, much more that needs to be done. 
We continue to pay for excess support structure. Prudent BRAC 
decisions are vital to our ability to bring our infrastructure 
into line with our force structure. We need Congress to approve 
two more rounds of BRAC in 2001 and 2005.
    Simply put, BRAC is tomorrow's readiness decision that we 
must begin making and planning today.
    Finally, the administration, I believe, this morning has 
submitted its emergency nonoffset supplemental for 
consideration by this committee and the House to cover the 
unfunded costs of Bosnia and other operations in fiscal year 
1998 and the total costs of Bosnia for fiscal year 1999.
    The Air Force portion of that is just over $400 million in 
each year to cover our costs. Once this emergency supplemental 
is submitted, we urge congressional approval quickly so that we 
can plan effectively and avoid disruption to our readiness and 
modernization accounts.
    Your support is absolutely essential if we are to transform 
the world's premier air and space force of today into an 
indispensable aerospace force of the 21st century. As we plan 
for the future, our principal focus will be on building a 
seamless, total aerospace force, one that is ready to meet the 
challenges of the QDR whenever and wherever they are presented.
    Again, I thank you for the opportunity to meet with you 
today and after General Ryan has had a chance to address the 
committee, we will be happy to take your questions.

                         Deployment challenges

    Senator Stevens. Thank you, sir.
    General.
    General Ryan. Good morning, Mr. Chairman and distinguished 
members of the committee. I am pleased to join you today, along 
with the Secretary, and I would like to thank you for your 
continued support of the Air Force.
    Today we are globally engaged and, as we speak, there are 
almost 15,000 Air Force members deployed and in support of 
contingency operations around the world: 9,000 in Southern 
Watch in Southwest Asia and another 1,000 in Northern Watch; 
3,000 in Bosnia; and the rest support about 11 other 
contingencies ongoing.
    This represents a fourfold increase in the deployments 
since the end of the cold war with over 35 percent fewer 
personnel to cover those commitments.
    More than ever, the U.S. Air Force is an expeditionary 
force. Our Air Force men and women are meeting every challenge 
they face with a consummate commitment that reflects service 
before self.
    Many of our members will spend 1 out of the next 3 years 
deployed in support of contingencies. It is our job. But our 
continuing deployment tempo highlights the force infrastructure 
mismatch which has been created over the past 10 years.
    I have just returned from Southwest Asia, where I had the 
opportunity to visit with many of our young men and women 
serving there. You would be proud of their professionalism and 
their unsung sacrifices. For the most part, they live in 
austere conditions. The majority are in tent cities which they 
erect and maintain, sleeping 8 to 10 to a tent. Privacy is 
minimal. Trust is essential. The hardships shared are 
foundations for enduring relationships.
    They are very proud and they do their job monitoring the 
no-fly zone in Iraq, ready for any contingency we can throw at 
them, flying the aircraft, fixing the aircraft, and keeping 
their morale up.
    For their commanders, each morning brings the hope of 
discovering new ways to make things better for the young men 
and women who live there. Each day brings new operational 
challenges and successes, and each night brings the realization 
that the next day could bring combat.
    The 15,000 people who are currently deployed in contingency 
operations rotate in and out of their original home bases. It 
has been that way since the early 1990's, with Iraq, Bosnia, 
African and humanitarian operations, and others.
    I do not see a major change in the way of doing business 
that we have experienced over the last 8 years. In effect, we 
are operating many additional bases without the resources or 
people to make up the difference. So the home station people 
feel the OPTEMPO as well as those who are deployed. In effect, 
we are taking this out of hide.
    Bases do not get additional personnel to make up for those 
who are deployed in order to keep the base running. The 
workload just increases on those who remain. The bases must 
still be guarded, the remaining aircraft maintained, and the 
families still need medical care and attention, and the 
remaining personnel must still train.
    We need to restructure our Air Force to deal with this 
tempo by consolidating our forces into larger bases, more 
robust bases, that have the breadth and depth to support both 
deployed operations and operations at home base.
    For that reason alone, we need BRAC legislation, not to 
mention the savings that accrue for the future.
    We also must take action to fend off the adverse effects of 
tempo that is evident in our readiness rates and retention. As 
Mr. Peters said, our overall readiness is still high, but we 
are beginning to see some adverse trends. Mission capable rates 
of our operational flying units have dropped in the last 8 
years, since the gulf war, by about 7 percent.

                           Equipment upgrades

    I attribute that to the aging nature of our aircraft fleet. 
In 1999, the average age of our Air Force aircraft will be 20 
years old. Predicting breakage is getting harder and harder. 
That is why modernization is so important for our future 
readiness.
    Three systems under development are very important for us 
to remain the preeminent aerospace force into the 21st century: 
the F-22; the Joint Strike Fighter; and the airborne laser 
[ABL].
    These systems are vital to ensuring that our young men and 
women always have the advantage of technologically superior 
weapons. We never want a fair fight. The F-22 possesses 
stealth; the ability to supercruise; has integrated avionics; 
and large air-to-air weapons payload, which makes it the 
dominant aircraft for air superiority into the 21st century. It 
allows all our forces, and not just Air Force forces, the 
freedom to operate where we choose and when we choose.
    The integration of air-to-ground capability in the F-22 
could also make it our high-end attack aircraft as well.
    The Joint Strike Fighter, or JSF, will provide a less 
expensive, multirole partner for the F-22. The F-22 and the 
Joint Strike Fighter are intended to be complementary, not 
substitutable. Together, they represent a synergistic high-low 
mix because the F-22's ability to gain air dominance makes it 
possible for us to design the Joint Strike Fighter as a 
multirole aircraft, which is less capable and, therefore, less 
costly.
    Finally, we are developing the airborne laser to provide 
protection for our forces against theater ballistic missile 
threats.
    The ABL system provides the Nation with a rapidly 
deployable global capability that this Nation needs to be able 
to defend against theater ballistic missiles. It will be a key 
component of our missile defense architecture necessary to 
counter that threat.
    At the same time, we must continue our migration into 
space. The Air Force is proud to be the leading military force 
in the use of space and we will continue to be good stewards of 
space. The key to protecting and exploiting space will be the 
seamless integration of our assets. We plan to migrate those 
functions to space which offer better capabilities when 
accomplished in space.
    This transition and tradeoff will be done as technology 
makes it both physically and fiscally possible.

                         Retention methodology

    While modernization is very important to tomorrow's 
readiness, retaining quality people is the key factor in 
maintaining readiness now and in the future. While enlisted 
retention rates are down slightly, and we must improve in that 
area, our biggest concern is pilot retention. It represents the 
majority of our front-end, warfighting capability. We simply 
must retain more of these selfless warriors as well as our 
combat and support personnel who go into harm's way to support 
our national commitments.
    We have worked hard with your help to counter this trend. 
One of the indications of future retention shortfalls is our 
pilot bonus acceptance rate. Last year, 33 percent of the 
eligible pilots took the long-term commitment offered with the 
bonus and another 10 percent took shorter options. While this 
is below our target of 50 percent, we are hopeful that this 
legislation will assist us even more this year and provide us a 
stepping stone to improve our retention into the future.
    We are focusing on several other areas to counter our 
retention decreases. They include reducing the effects of this 
OPTEMPO on our forces, improving care for our families, 
improving quality of life and improving the support programs. 
Our experience since the fall of the Iron Curtain has 
reinforced the lessons about the pivotal nature of air and 
space power, power which maximizes the flexibility of the 
military and allows solutions to national security threats with 
less risk to American lives.
    We want to ensure the U.S. Air Force remains the preeminent 
air and space power in the world we are today, and our deployed 
men and women are confident in their mission, their equipment, 
and their own capabilities.

                           prepared statement

    We thank this committee for your support in making that 
happen in the past, today, and in the future.
    Sir, that ends my statement. The Secretary and I are 
prepared for your questions.
    [The statement follows:]
 Prepared Statement of Hon. F. Whitten Peters and Gen. Michael E. Ryan
                  air force role in national security
    Mr. Chairman, members of the committee, 1997 was a defining year 
for U.S. defense policy. Together, the Quadrennial Defense Review (QDR) 
and the independent analysis by the National Defense Panel (NDP) 
significantly raised the level of defense debate. Each of these 
undertakings will undoubtedly have far-reaching defense policy 
implications. We are proud of our Service's contributions to these 
efforts.
The Quadrennial Defense Review
    One of the most significant outcomes of the QDR was the emergence 
of a new national military strategy. That strategy includes a new 
special emphasis on the critical importance of an early, decisive halt 
to armed aggression to provide wider options for the use of military 
force and to create a window for diplomatic resolution of a crisis. 
This new strategy is also reflected in the President's National 
Security Strategy, the Secretary of Defense's Defense Planning 
Guidance, and the latest edition of the Chairman of the Joint Chiefs of 
Staff's National Military Strategy. It is heavily dependent on the 
speed, range, agility, and overwhelming firepower of aerospace forces.
    One of the greatest strengths of aerospace forces lies in their 
ability to project lethality with less vulnerability. With the advance 
of technology, a more agile aerospace force can substitute for large, 
slow-arriving forces and deliver more firepower in the process. This 
capability minimizes the number of friendly casualties, helps to 
solidify political support for military action, both at home and 
abroad, and buys critical time for diplomatic initiatives and potential 
follow-on military actions. This rapid halt capability also minimizes 
the amount of territory that would have to be retaken should a 
counteroffensive be necessary. We firmly believe this strategy to be 
appropriate, cost-effective, and consistent with American values.
    Another important aspect of the QDR was the reaffirmation of the 
importance of the total force. We embrace the total force concept--we 
depend on it. Air National Guard and Air Force Reserve forces provide 
the necessary wherewithal for our Service to effectively accomplish its 
entire range of military missions.
    We are implementing a balanced, time-phased modernization program 
to build the force necessary to meet the requirements of the QDR 
strategy and enable the successful conduct of joint warfare in the 21st 
century. To help fund this modernization, we are taking steps to 
achieve personnel, business, and force structure efficiencies. The QDR 
reminded each of the Services that in fitting our force structure to 
future needs, we must make hard, but necessary recommendations on 
infrastructure. We will need the support of the Congress to implement 
these recommendations. Dollars saved through these actions will be 
invested in Air Force modernization, providing the nation with a force 
fully prepared for the increasingly complex and diverse security 
challenges of the future.
The Report of the National Defense Panel
    The National Defense Panel articulated several desired military 
capabilities to meet their postulated future national security 
challenges. Many of these capabilities are present in today's Air 
Force, or will be in the aerospace force planned for the future. For 
example, the panel recognized the imperative to achieve air superiority 
against an enemy's air-to-air, surface-to-air, ballistic and cruise 
missile threats. We are fielding the F-22 and the Airborne Laser to 
address this need.
    The Panel also observed that projecting military power on short 
notice into the backyard of a major regional power demands forces that 
can deploy rapidly, seize the initiative, and achieve national 
objectives with minimal risk of heavy casualties. Aerospace forces 
possess these capabilities. We believe they will be increasingly called 
upon in the future.
    The NDP recommended an increased emphasis on information systems 
(including situational awareness) and information operations; a 
migration to unmanned and space-based systems; a lighter, more mobile 
force; and greater emphasis on precision, speed, stealth, and long 
range strike. The Air Force program stands up well when measured 
against this template because our corporate vision statement--Global 
Engagement: A Vision for the 21st Century Air Force--articulates the 
importance of many of these same priorities.
Global Engagement
    Global Engagement addresses the range of Air Force activities--
operations, infrastructure, and personnel--to provide a comprehensive 
map to shape the Air Force during the first quarter of the 21st 
century. It defines the Air Force core competencies which stem from the 
speed, global range, precision, flexibility, unparalleled access, and 
awareness afforded by aerospace forces--competencies that contribute to 
the Chairman of the Joint Chiefs of Staff's Joint Vision 2010 goal of 
Full Spectrum Dominance. Global Engagement establishes the vector our 
Service will follow into the 21st century. The guidance provided by 
Global Engagement, in conjunction with our long range planning efforts, 
form the prism through which we view our near-, mid-, and far-term 
priorities.
    The priorities outlined herein represent our three-fold commitment: 
first, to maintain a ready and capable force to conduct our 
contemporary military mission; second, to size, shape, and streamline 
our Service to implement QDR guidance; and third, to continue the 
evolution of our aerospace force to provide the capabilities necessary 
to protect America's security interests into the next millennium.
                   contemporary air force operations
Readiness
    The Air Force is expected to maintain a high state of responsive 
readiness across the force due to the critical need to get aerospace 
power rapidly to any crisis. During peacetime, high readiness gives us 
the flexibility to deploy a tailored force anywhere in the world in 
response to emerging crises--to gather essential intelligence, deter 
potential enemies, protect friendly forces and U.S. citizens, apply 
force, or provide humanitarian aid. Airlift, tanker, fighter, bomber, 
space, communications, reconnaissance, intelligence, and many other Air 
Force units are also the first forces called upon in wartime. Aerospace 
power is vital to rapidly halt advancing enemy forces, and critical to 
the success of a Commander in Chief's (CINC) extended campaign plan.
    We judge readiness through objective and subjective assessment of 
several interdependent elements which include personnel, equipment, 
training, logistics, and financial resources. A shortfall in any of 
these areas will negatively impact our overall readiness level. 
Maintaining high readiness in today's environment poses the challenge 
of balancing present requirements with the need to acquire new 
technologies and modernize current systems for the future.
    Since 1986, the Air Force has downsized by nearly 40 percent, while 
military operations other than war have greatly increased. In 1989, our 
Service averaged 3,400 personnel deployed daily for contingencies and 
exercises. Since the conclusion of the Gulf War, that average has grown 
over fourfold to 14,600 in fiscal year 1997. For the foreseeable 
future, aerospace forces are likely to remain in high demand.
    We have taken several steps as a Service to mitigate the effects of 
our high TEMPO, such as reducing deployment lengths, reducing the 
number of headquarters inspections of units, and instituting standdowns 
after lengthy deployments. Additionally, we have introduced the use of 
a TEMPO tracking system and associated metrics to better manage the 
TEMPO of our airmen. This tool gives us an accurate way to identify and 
address TEMPO problems before they occur.
    While 91 percent of our active and Air Reserve Component units are 
maintaining good readiness levels, caution indicators have surfaced in 
some areas--most notably, pilot and navigator retention have decreased 
markedly, some critical second-term reenlistment rates are declining, 
and we are dealing with some serious engine and spare shortages. We are 
taking steps to address each of these readiness challenges.
    Today, our Air Force remains the best in the world and ready to 
answer the nation's call. The pace of current operations has required 
our people to work harder, smarter, and longer hours to maintain our 
readiness and they have risen to the challenge. However, the 
combination of several eroding trends have peaked our concern regarding 
current and future readiness working harder, smarter, and longer is not 
enough. We will continue to pursue a family of initiatives to protect 
Air Force readiness our contract with the CINC's.
Operational Risk Management
    Maintaining our combat edge depends on our ability to train 
realistically and safely. This involves accepting, but managing risk. 
Fiscal year 1997 was the second safest year in our history in the 
categories of ground fatalities, Class A flight mishaps, and flight 
fatalities. We are working to keep these numbers low by continuing to 
make mishap prevention an integral part of the mission by emphasizing 
Operational Risk Management (ORM).
    ORM is key to maintaining readiness in peacetime, dominance in 
combat, and a crucial component for force protection. It is a decision-
making tool to systematically identify risks and benefits and help 
determine the best courses of action for any given situation. ORM is 
designed to enhance mission effectiveness by minimizing risks in order 
to reduce mishaps, preserve assets, and safeguard the health and 
welfare of our people. Although historically our Service has been very 
successful in executing its mission with minimum losses, there is still 
room for improvement both in terms of mission accomplishment and mishap 
prevention as our low mishap rates have ``plateaued.'' This fact 
reinforced our decision to implement the ORM process Air Force-wide.
    Proper application of the ORM process and tools will minimize all 
dimensions of risk and reduce mishap rates without compromising mission 
objectives. We are emphasizing ORM in multiple educational programs and 
have initiated formal education and computer-based training to instruct 
our people in the use of ORM. All Air Force personnel should receive 
this training by 1 October 1998.
The Total Force
    Today, more than ever, the Air Force relies on its total force--
Active Duty, Air National Guard, and Air Force Reserve working together 
to meet today's peacekeeping and wartime commitments. The total force 
was used extensively during 1997 as Air National Guard and Air Force 
Reserve forces participated in every major deployment and contingency 
tasking. This trend will continue as Guard and Reserve forces play an 
increasing role in a variety of worldwide operations.
    Air National Guard and Air Force Reserve aircrew members serve an 
average of 110 days a year in uniform. During 1997, an average of 6,000 
Guard members and Reservists were deployed each month to support 
exercises, contingencies, and military operations around the world. On 
a volunteer basis, members of the Air Reserve Component deploy on a 
rotational schedule, helping to reduce active duty TEMPO without 
jeopardizing their civilian employment.
    In some cases, the Guard and Reserve are paired together to provide 
extended support to the active force. An example of a joint Guard and 
Reserve mission is the 24 July to 25 October 1997 deployment to perform 
sustainment airlift from Ramstein Air Base, Germany, to the forces in 
the Balkans. Other major deployments in 1997 included the deployment of 
security forces to Saudi Arabia; the deployment of civil engineers, 
firefighters, and Air National Guard air traffic controllers to Taszar, 
Hungary, as part of Operation Joint Guard; the use of KC-135's to 
refuel fighter aircraft enforcing the no-fly zone over Bosnia; and the 
use of F-15's and F-16's to enforce the no-fly zone over Northern Iraq, 
as well as the use of rescue crews to provide combat rescue support for 
those forces. The Air National Guard and Air Force Reserve also 
participated in over 60 exercises worldwide.
    In addition to officially becoming a major command on 17 February 
1997, the Air Force Reserve expanded its missions in several areas. For 
example, in January 1997, an associate undergraduate pilot training 
program was initiated at Columbus AFB, Mississippi, and Vance AFB, 
Oklahoma. This program employs full-time and part-time Reserve airmen 
as instructor pilots to offset a shortfall in active duty instructors. 
The Reserve is also conducting a three year study to determine the 
feasibility of integrating Reserve pilots and maintenance personnel 
into active duty fighter squadrons.
    In May 1997, associate AWACS crews from the Air Force Reserve 
Command's 513th Air Control Group (ACG) at Tinker AFB, Oklahoma, 
participated in their first operational deployment--testing the Western 
European integrated air defense system in exercise Central Enterprise 
97. Since beginning operations in March 1996, 513 ACG personnel have 
performed over 2,000 man-days of service, alleviating some of the TEMPO 
of our active duty crews. These Reservists also prove invaluable at 
home station by performing various duties such as preparing aircraft 
for upcoming missions and performing supervisor of flying duties. The 
associate AWACS Reserve unit also provides a way for the Air Force to 
retain its investment in highly trained personnel who would otherwise 
be lost separating from active duty.
    In September 1997, the Air Force Reserve Command's 8th Space 
Operations Squadron (SOPS) and the 310th Space Group were activated at 
Falcon AFB, Colorado. The 8 SOPS provides near-real time backup support 
to the primary Defense Meteorological Satellite Program operations 
conducted by the National Oceanographic and Atmospheric Agency.
    In October 1997, the 439th Security Forces Squadron (SFS) at 
Westover Air Reserve Base, Massachusetts, achieved full operational 
capability. The Reservists of the 439 SFS augment the 820th Security 
Forces Group at Lackland AFB, Texas, with a deployable force protection 
unit.
    In 1997, the Air National Guard flew over 3,200 readiness support 
airlift missions, 700 airborne transport missions, 500 fighter 
deployment air refueling missions, and performed a variety of other 
challenging missions. For example, in October 1997, three 153rd Airlift 
Wing C-130 aircraft, crews, and support personnel from the Wyoming Air 
National Guard deployed to Jakarta, Indonesia, to fight widespread 
forest fires. The crews flew hundreds of hours during their 60 day 
deployment using their specially equipped C-130's to suppress fires 
over a 3.5 million acre area. During their deployment, the 153rd 
extinguished more than 70 fires in open forest areas in the face of 
incredible challenges posed by heavy smoke and extremely dry 
conditions. This support allowed the Government of Indonesia sufficient 
time to develop an effective firefighting plan of its own and organize 
follow-on indigenous and commercial support to battle the remaining 
fires.
    In 1997, we transferred several new missions from the active 
component to the Air National Guard including the operation of a mobile 
ground station by the 137th Space Warning Squadron of the Colorado Air 
National Guard and an increased share of the international military 
flying training program.
    Air National Guard and Air Force Reserve personnel remain an 
integral part of our total force as they work side by side with active 
duty airmen to accomplish the Air Force mission.
Force Protection
    We are committed to taking the necessary steps to protect our 
people. We have addressed and corrected the deficiencies identified by 
the Downing Commission and strengthened our force protection posture 
throughout Southwest Asia. This included the rapid deployment of 
additional security forces to Saudi Arabia to relocate our people after 
the Khobar Towers tragedy. These forces assisted with moving airmen 
from Dhahran to Prince Sultan Air Base in Al Kharj and military and 
non-combatant personnel from vulnerable facilities in Riyadh to a more 
secure location outside the city. We have also enhanced our force 
protection equipment and integrated intelligence assets and are 
adjusting our doctrine, strategy, policies, and training accordingly. 
Additionally, we are expanding the scope of our force protection 
program to address our growing Aerospace Expeditionary Force (AEF) 
requirements.
    In 1997 we established the Air Force Security Forces Center at 
Lackland AFB, Texas, comprised of the 820th Security Forces Group (SFG) 
and the Air Force Force Protection Battlelab. The 820 SFG is a rapidly 
deployable, self-contained unit integrating essential force protection 
functions provided by security forces, intelligence, Office of Special 
Investigation, medical, communications, and engineering personnel. This 
organization provides AEF commanders with the flexibility to tailor a 
force protection package to meet the needs of their deployed location. 
Today, squadron-sized security forces units deploy with each AEF to 
provide a comprehensive stand-alone security and antiterrorism force 
protection capability. Equipment like the Tactical Automated Security 
System, which uses motion and thermal detection capabilities for 
perimeter defense, is used to enhance installation commanders' force 
protection situational awareness. In 1997, the 820 SFG deployed three 
times: twice to Bahrain to support the 366th Air Expeditionary Wing 
(AEW) and the 347 AEW, and once to Egypt to support the Bright Star 
exercise.
    The other component of our force protection program is the Force 
Protection Battlelab. This battlelab is a compact, multi-disciplinary 
``think tank'' chartered to objectively examine force protection 
concepts to identify and define unmet needs. Once needs are identified, 
the battlelab searches for creative, near-term solutions through 
modeling and simulation, changes in training or policy, available or 
easily modified technology, or possible new uses for existing 
technology. The Force Protection Battlelab has three ongoing 
initiatives. The first aims to improve security at the South American 
ground-based radar sites that support counter-drug operations. The 
battlelab is exploring new ways to use existing thermal imagers to 
expand current perimeter monitoring capabilities. The second initiative 
involves exploring the use of unmanned aerial vehicles to provide 
defense force commanders with real-time ground situational awareness. 
The third initiative deals with increasing our ability to detect 
vehicle explosive devices by using different configurations of existing 
commercial off-the-shelf detection capabilities.
    We will continue to emphasize investments in force protection 
technology and its applications to provide a safer environment for our 
airmen as they conduct operations worldwide.
Sustained Theater Operations
    Since the NATO-led Operation Joint Endeavor/Joint Guard began on 20 
December 1995 to maintain the peace between the formerly warring 
factions in Bosnia-Herzegovina, we have maintained over 2,900 personnel 
in direct support of this operation and flown over 4,200 missions--25 
percent of the coalition total. Our missions include close air support, 
combat air patrol, suppression of enemy air defense, air refueling, 
combat search and rescue, and intelligence collection sorties. We have 
also deployed space support teams to furnish critical space-based 
communications, weather, navigation, and missile warning support to the 
coalition forces.
    In Southwest Asia we have deployed over 7,000 personnel since 
August 1992 and have flown over 110,400 sorties--70 percent of the 
coalition total--in support of Operation Southern Watch to ensure 
continued Iraqi compliance with the April 1991 United Nations Security 
Council Resolution (UNSCR) 688.
    Similarly, we have deployed over 1,200 personnel and flown over 
3,325 sorties--72 percent of the coalition total--in support of 
Operations Provide Comfort and Northern Watch to enforce the no-fly 
zone over Northern Iraq. Additionally, our space support teams are 
integrated into the combined air operations center to provide deployed 
forces with support from our space-based assets.
    Southwest Asia continues to be a very volatile region. Our AEF's 
have proven to be an effective tool to strengthen relations with 
coalition partners and respond to crises.
Aerospace Expeditionary Forces
    Our Service is exploring and refining concepts of operations and 
logistics associated with the deployment and employment of AEF's. We 
tailor AEF employment packages that provide CINC's with the necessary 
command, control, mission, and support elements to create a desired 
operational effect within 72 hours of initial notification to employ 
forces. Our first AEF deployed in October 1995 to supplement Operation 
Southern Watch. In 1997, we deployed five AEF's for exercises and 
contingencies. In each case, we created a tailored AEF by combining an 
appropriate mix of squadron-level units. By varying the mix, an AEF can 
support a broad range of missions, from humanitarian relief to 
contingency operations.
    In the combat configuration used in Southwest Asia, our AEF can 
produce 70-80 combat sorties a day and may include bombers employed 
from a home station or forward operating location. This AEF's portfolio 
includes air-to-ground, air-to-air, suppression of enemy air defenses, 
air refueling, and intelligence, surveillance and reconnaissance 
assets. AEF's provide CINC's with a wide range of airpower options to 
meet their specific theater needs. Additionally, the AEF's ability to 
rapidly and decisively project aerospace power into a theater of 
operations will allow greater flexibility in determining the forward 
deployed forces necessary to meet a CINC's requirements.
    We are institutionalizing this expeditionary mindset within our 
Service's culture by emphasizing the fundamentals of expeditionary 
warfare in our exercises and training. This includes rapid crisis 
response, an ability to operate out of austere bed-down locations with 
minimum initial support, robust and secure C\2\ linkages, robust force 
protection, and rapid, effective employment. In this way, our forces 
focus their logistics techniques to determine the absolute minimum 
support required to deploy rapidly and employ immediately upon arrival.
    To supplement our field tests, the Air Force AEF Battlelab is 
exploring several ideas to improve our expeditionary capabilities. One 
initiative is to demonstrate the use of commercially available 
equipment to calibrate targeting and sensor systems on multiple 
aircraft platforms. The current calibration systems are unique to each 
aircraft, require extensive logistics support, and can only be used in 
controlled environmental conditions. This battlelab initiative would 
use a calibration system common to all aircraft that requires less 
logistics support, less set up time, and operates under any 
environmental condition. We conducted a successful field demonstration 
of this system last year during an AEF deployment and continued to 
refine our expeditionary capabilities during deployments to Southwest 
Asia.
    In October 1997, the 366 AEW from Mountain Home AFB, Idaho, 
deployed F-15's, F-16's, B-1 bombers, and KC-135's to Shaikh Isa, 
Bahrain. During its deployment, the wing flew 444 sorties in support of 
Operation Southern Watch. Later that month, the 347 AEW deployed to the 
Middle East in response to Saddam Hussein's refusal to comply with 
United Nations mandated weapons inspections. This AEF deployed on short 
notice and included F-15's, F-16's, B-1's, KC-135's, and an Army 
Patriot battery. These forces joined F-117's and B-52's already in 
theater to provide the CINC with highly flexible airpower options.
    Maintaining an internationally recognized ability to deploy 
rapidly, execute upon arrival, and sustain complex operations will 
significantly enhance our ability to deter potential adversaries. We 
currently have the capability to conduct both lethal and non-lethal AEF 
operations worldwide. For the long-term, we expect AEF's to continue to 
mature as effective tools for crisis response and cooperative 
engagement with potential coalition partners.
Cooperative Engagement
    An expectation that the U.S. military will need to be able to 
incorporate the military capabilities of friends and Allies makes it 
essential for us to broaden our relationships with the militaries of 
other countries. These ties facilitate cooperation with the U.S. when 
crises arise, whether this be the need for quick overseas basing 
access, or the need to build a coalition of willing and capable allies. 
We are committed to cooperative engagement programs and initiatives 
that increase mutual understanding and enhance interoperability.
    During the 1990's, Air Force Special Operations Command (AFSOC) 
forces conducted over 150 operations in 22 countries, including over 30 
exercises in the Pacific and numerous military-to-military training 
events in Latin America, Africa, and Europe. AFSOC special tactics 
teams often help train foreign militaries in subjects such as air 
operations, combat medicine, air traffic control, and airbase defense.
    Recently, the focus of our cooperative engagement and stability 
enhancement efforts have been in our Partnership for Peace (PfP) 
participation, our Military Contact Program, the Armaments Cooperation 
Program, and our Security Assistance efforts, which include Foreign 
Military Sales (FMS) and International Military Education and Training 
(IMET).
    In 1997, our Service participated in over 20 exercises with 
approximately 25 PfP countries and conducted over 200 focused Military 
Contact Program events in Europe alone. We maintain 220 agreements 
under the Armaments Cooperation Program in an effort to encourage the 
exchange of information with our coalition partners. These involve 
cooperative research and development, scientist and engineer exchanges, 
equipment loans, and scientific and technical information exchanges.
    Additionally, our FMS program is currently managing over 4,600 
active contracts for aircraft, spare parts, munitions, and training 
totaling over $107 billion, while the IMET program continues to provide 
all types of training--from flying training to professional military 
education. In 1997 over 5,000 foreign military members representing 
approximately 100 countries received some form of training under the 
IMET program.
    In April 1997, our Service hosted a gathering of the leaders of the 
world's air forces. Eighty-four air chiefs participated in this 
``Global Air Chiefs Conference,'' a truly landmark event. General Peter 
Deynekin, then Commander of the Russian Air Force, characterized it as 
one of the most significant events of the 20th century. The 
significance of the conference lies in the fact that despite widely 
differing languages and customs, each of the air chiefs shares an 
appreciation for the unique capabilities of airpower and for the 
revolutionary capability that can be achieved when space-based assets 
can be effectively integrated into aerospace operations.
Space Operations
    An ability to conduct missions better from space will certainly 
benefit all U.S. forces. Space operations figure prominently in our 
plans for the future. Our joint-use space-based systems are 
increasingly responsible for the information stream and global 
awareness that we cannot take for granted. In particular, 1997 saw the 
Air Force and the National Reconnaissance Office achieve unparalleled 
levels of cooperation in enhanced space support to theater warfighters 
and National Intelligence users. Today, it is difficult to contemplate 
how a significant U.S. military operation could function without 
integrated space-based support.
    That range of support is gradually becoming transparent to the 
users. Our aircrews rely heavily on intelligence and weather data 
derived from space systems. The command and control of air, land, and 
sea forces is melded together with space-based communication. Navstar 
Global Positioning System (GPS) satellites guide aircraft and weapons 
precisely to targets and help avoid collateral damage. In the future, 
near-real time targeting sent from sensors directly into the cockpit 
will allow us to improve our aircrews' lethality.
    1997 was the busiest year thus far for Air Force space operations. 
Our two major ranges, Vandenberg AFB, California, and Patrick AFB, 
Florida, conducted 45 successful space and missile launches, including 
range support and support services for every government and commercial 
launch of the Space Shuttle, Pegasus, Atlas, Delta, Titan IV, and 
Athena II boosters. In addition, our Satellite Control Network 
maintained a 99.5 percent mission effectiveness rate with over 159,000 
satellite contacts.
    On 23 February 1997, the first Titan IVB was launched to insert a 
Defense Support Program (DSP) missile warning satellite into orbit. The 
Titan IVB's upgraded solid rocket motors give it a 25 percent increase 
in payload capacity as well as greater reliability. On 7 November 1997 
our Service set a new mark with the third successful launch of 
America's heavy lift Titan IV within a 23 day period, eclipsing the 
previous record of 65 days set in 1996. The Titan IV has a 95.7 percent 
success rate since launching the first of 23 mission payloads into 
space in June 1989.
    Despite the failure of a Delta II launch vehicle in January 1997, 
there was a total of 10 successful Delta launches in 1997. These 
included the launch of a next-generation GPS satellite in July 1997 to 
replenish the GPS operational constellation of 24 satellites and ensure 
that a continuous GPS signal will remain available for precise 
navigation operations worldwide.
    In the area of military satellite communications, MILSTAR 
satellites are now providing secure, jam-resistant, nuclear-survivable 
command and control communications to the East Atlantic and European 
theaters. In Bosnia, the Joint Broadcast System used direct satellite 
broadcasts to transmit live unmanned aerial vehicle images and other 
large digital products to theater commanders and supporting forces--
dramatically increasing their global situational awareness. Meanwhile, 
the Global Broadcast Service is progressing toward its first launch in 
1998 and will give our forces similar broadcast services worldwide.
    Today, without question, space-based capabilities are a vital 
component that we depend on for the success of joint military 
operations. Recently, the Air Force, the National Reconnaissance 
Office, and the Defense Advanced Research Projects Agency, have all 
agreed to have a joint space-based Moving Target Indicator 
demonstration using technology, expertise, and resources from all 
three. Enhancing space support to the warfighter remains a top priority 
for our space operators.
                      maintaining a quality force
    People remain our most vital resource. The intense demands placed 
on our airmen of all ranks as they perform Air Force missions around 
the world require special individuals who are highly motivated, well 
trained, and responsibly led.
Recruiting Quality People
    We are committed to recruiting and retaining the high caliber 
people necessary to lead our Service into the 21st century. In fiscal 
year 1997 we achieved our recruiting goal of 30,200 recruits--99 
percent of whom were high school graduates. We were also successful in 
reenlisting 110 individuals to fill critical specialties who had 
previously left the Air Force. To date, new enlistment contracts for 
fiscal year 1998 are running slightly ahead of our target--but 
recruiting remains a challenge. Ample opportunity to attend college, a 
robust economy with low unemployment, military drawdowns, and highly 
visible U.S. commitments abroad have decreased the pool of interested, 
qualified potential recruits. Annual youth attitude surveys show the 
interest of young men in serving in the Air Force has dropped from 17 
percent in 1989 and has stabilized at 12 percent. The interest of young 
women in serving has remained relatively constant (around 7 percent) 
over the same period; however, we did see a 1 percent drop in fiscal 
year 1997.
    Despite the fact that we have been able to recruit adequate numbers 
of personnel, there has been a decrease in the number of enlistees 
scoring in the top half on the Armed Forces Qualification Test, down 
from 88 percent in 1989 to 79 percent today. To address this trend, we 
have directed our recruiters to concentrate their efforts on the 
college and college-bound candidates. Additionally, it is becoming 
increasingly difficult to fill the mechanical, pararescue, and combat 
control career fields. To improve our success in manning these 
specialties, we have directed a larger portion of our advertising 
budget toward the technical market and have raised enlistment bonuses 
in the most difficult-to-fill skills. Overcoming these recruiting 
challenges is essential to maintain the caliber of airmen necessary to 
effectively serve in our technologically sophisticated aerospace force.
Developing the Airmen of the Future
    After we recruit and induct young airmen, we invest in their 
education and training to prepare them for today's demanding 
operational environments and for future challenges. The high standards 
of behavior expected of our personnel demand a strong moral and ethical 
foundation. On 1 January 1997, we published an Air Force Core Values 
pamphlet. Air Force core values--integrity first, service before self, 
and excellence in all we do--apply to all airmen of the Air Force, 
whether officer, enlisted, civil servant, or contractor.
    Our people are living these values every day. Like the members of 
the 31st Civil Engineer Squadron and 31st RED HORSE flight from Aviano 
Air Base and Camp Darby, Italy, who assisted with local disaster relief 
after earthquakes devastated central Italy. Or the members of the 9th 
Reconnaissance Wing at Beale AFB, California, who volunteered countless 
hours to help 9,000 area residents displaced by massive flooding--
volunteers who provided victims with food, shelter, and medicine and 
went the extra step to comfort frightened children with toys, cookies, 
and a friendly smile. This scene was repeated by the men and women of 
Grand Forks AFB, North Dakota, who assisted over 25,000 flood victims 
in that area.
    Strong core values bind our people together and demonstrate to the 
American people that our military forces are worthy of their trust and 
support. Air Force men and women exhibit integrity, selflessness, and 
excellence every day, in every corner of the world, working side by 
side to accomplish their mission. This effective working relationship 
begins on the first day of basic training and is reinforced by 
integrating core values into every aspect of our education and training 
programs.
            Gender-Integrated Training
    Every year our Service trains more than 30,000 basic trainees--24 
percent of our graduates are women. The Air Force has successfully 
employed gender-integrated basic training since 1976.
    In late 1997, Senator Kassebaum-Baker's advisory committee on 
gender-integrated training released its report, calling for changes in 
the structure of basic and operational training. We are currently 
reviewing our training practices in light of the Kassebaum report, and 
will forward our recommendations to the Secretary of Defense in March 
1998. As part of this effort, we are reevaluating our basic training 
physical conditioning program to ensure it meets the needs of our 
airmen and the needs of the Air Force.
            Leadership Training
    As an expeditionary force, we must assure the development of 
``warrior-leaders'' who can successfully lead air forces and others 
with a wide variety of capabilities into a hostile, austere 
environment. To win in combat, the development of warrior-leaders is 
every bit as important as fielding the increasingly sophisticated 
weapon systems necessary to fight a war. The superior technology the 
United States can bring to bear will only be successful if we have 
trained, capable leaders to employ it.
    As a result, leadership preparation continues to be a cornerstone 
of our education and training programs. To supplement leadership 
preparation provided in the various levels of professional military 
education, additional training is provided by major commands for 
individuals selected as squadron commanders and by Air University for 
individuals selected as group or wing commanders. This training covers 
the everyday aspects of command such as military and civilian personnel 
management, resource management, legal issues, and complaint 
processing. Our highest level of leadership training occurs in the 
Senior Leader Orientation Course where new brigadier generals and 
civilian equivalents receive training on key issues and on how to be 
effective representatives of the Air Force.
            Aircrew Training
    The Air Force is the lead Service for the Joint Primary Aircraft 
Training System (JPATS) program. This joint Air Force and Navy program 
is acquiring 372 JPATS aircraft for the Air Force, with deliveries 
beginning in 1999. The T-6A Texan II will replace the aging T-37's and 
vastly improve our undergraduate flying primary training capability. 
The T-6A incorporates several features that are not on current Air 
Force and Navy trainers. Improvements include: missionized ejection 
seats, improved birdstrike protection, electronic flight 
instrumentation and digital cockpit display, pressurized cockpit, and 
flexibility to accommodate a wide range of male and female pilot 
candidates. We are also modernizing our T-38 fleet, allowing pilot 
candidates to train on modern avionics representative of the front line 
systems they will eventually fly in combat.
    To address the growing pilot shortage, we plan to increase our 
yearly pilot production from 900 pilots per year to 1,100 pilots per 
year by fiscal year 2000. We are also examining various alternatives to 
maximize the utilization of our T-38 fleet. Our increase in pilot 
production has resulted in a corresponding shortfall in active duty 
instructor pilots. Unable to pull more instructors out of mission area 
cockpits, we have established an associate undergraduate pilot training 
program to employ Air Force Reserve pilots as instructors. We initiated 
this program at Columbus AFB, Mississippi, and Vance AFB, Oklahoma, in 
January 1997. In the 12 months since the first instructor pilot started 
training, we have hired a total of 43 of the 50 pilots scheduled to 
participate in the program. Over 30 of these individuals are now fully 
mission qualified and have flown well over 250 student sorties in 
support of the specialized undergraduate pilot training mission. Each 
Reserve instructor pilot will contribute one-third of the number of 
sorties produced by an active duty instructor pilot. Once the remaining 
Reserve instructor pilots complete their training, we estimate that 
they will contribute over 1,600 student sorties per year.
    We are rapidly expanding this program to all student pilot training 
bases and to other training aircraft to include the T-37, T-1, and AT-
38 missions. When completed in the summer of 2000, this program will 
employ over 539 Air Force Reserve pilots (114 full-time and 425 part-
time) and produce a sortie rate equivalent to 225 active duty 
instructor pilots.
    We are also pursuing the development of revolutionary new ways to 
train our operational aircrews. Distributed mission training will use 
state-of-the-art distributed simulation technology and advanced flight 
simulators to permit aircrews to remain at their home units while 
``flying'' and training in synthetic battlespace, hooked electronically 
to other aircrews located at distant airbases. This will improve the 
quality and availability of training while reducing aircraft operation 
and maintenance costs, as well as limiting the amount of time our 
personnel will have to spend away from home.
            Professional Military Education
    Educating our airmen to be effective leaders, supervisors, and 
managers is vital to our continued success. Enlisted Professional 
Military Education (PME) broadens enlisted members' perspectives and 
increases their knowledge of military studies, communication skills, 
leadership, and supervision to prepare them to assume more 
responsibility. In 1997, we conducted a review of all three levels of 
our enlisted PME curriculum. We implemented a revised curriculum for 
the Airman Leadership School in 1997 to eliminate those items better 
taught at field level and place more emphasis on the profession of 
arms. We are validating revised curriculums for the Non Commissioned 
Officer Academy and the Senior Non Commissioned Officer Academy that 
include subject areas like stress management, suicide prevention, 
project management, and diversity awareness.
    For newly commissioned officers and selected civilians we are 
developing an Air and Space Basic Course to provide a common frame of 
reference for understanding and employing aerospace forces. This course 
will focus on the history, doctrine, strategy, and operational aspects 
of aerospace power. We will conduct the first class in July 1998.
    Follow-on professional military education for our officer corps 
consists of Squadron Officer School, Intermediate Service School, and 
Senior Service School. These schools teach the skills necessary for 
good officership, command, and staff. They also educate senior officers 
in the strategic employment of aerospace forces to support national 
security objectives. Our officer professional military education is 
currently undergoing a complete curriculum review to ensure each level 
is appropriately tailored to its audience. Additionally, we are 
pursuing legislation to authorize granting Masters degrees to graduates 
of Air Command and Staff College and Air War College.
Retaining Quality People
    Training and educating our people is of little value if we cannot 
retain them to benefit from their skill and experience. Unfortunately, 
there are troubling trends in this area. Our first- and second-term 
reenlistment rates have declined in each of the past two years. Two 
initiatives we are implementing to reverse these trends include 
expanding the Selective Reenlistment Bonus (SRB) program to include 
additional Air Force specialties and increasing SRB bonus rates in 
specialties where manning and retention rates are low. Additionally, to 
ensure our first- and second-term airmen have the information they need 
to make an educated reenlistment decision, supervisors are now required 
to address the benefits of an Air Force career during semiannual 
feedback sessions.
    For the officer corps, we are concerned that pilot and navigator 
retention rates have declined each of the past three years. Since 
fiscal year 1995, pilot retention has fallen from 87 percent to 71 
percent and navigator retention has slipped from 86 percent to 73 
percent. Leading indicators are also showing increasingly downward 
trends. For example, the number of pilots accepting aviator 
continuation pay is down from 59 percent in fiscal year 1996 to 33 
percent as of mid-January 1998. This is a 48 percent drop from the 
record high fiscal year 1994 level of 81 percent. Similarly, pilot 
separations increased 27 percent between fiscal year 1996 and fiscal 
year 1997 and continue to rise.
    One of the major factors that weighs heavily on an individual's 
decision to stay in or leave the Service is the issue of compensation. 
The Air Force appreciates Congressional support in 1997 for legislation 
to restore the original value of the aircrew compensation package. We 
are closely monitoring aviator retention and are cautiously optimistic 
about the impact of the new incentive at this point. Compensation is 
but one of several quality of life initiatives that we are pursuing to 
make military service more attractive to our personnel. These 
initiatives should create positive incentives for all Air Force members 
and positively impact retention in a variety of career fields.
            Enhancing Quality of Life
    Quality of Life (QoL) investments have the greatest rate of return 
in terms of recruiting and retaining quality airmen for our highly 
technical aerospace missions. Based on feedback from the field, our 
corporate strategy is to pursue initiatives supporting seven quality of 
life priorities that satisfy a broad range of needs and expectations: 
(1) fair and equitable compensation; (2) balanced TEMPO; (3) quality 
health care; (4) safe, affordable, and adequate housing; (5) a 
stabilized retirement system; (6) community programs; and (7) expanded 
educational opportunities.
    Fair and Equitable Compensation.--Adequate compensation has the 
most impact on our people's standard of living and remains a key 
element of our total force QoL agenda. Continued Congressional support 
for competitive annual pay increases, cost of living allowance 
increases, and improvements to permanent-change-of-station cost 
reimbursements are critical to maintaining the value of this important 
QoL component.
    We continue to support the commissary benefit as an important non-
pay entitlement upon which our active duty personnel, reserve 
personnel, and retirees depend. Our people count on savings from 
commissary purchases to extend already stretched incomes--offsetting 
lagging pay raises, inflation, and out-of-pocket housing and moving 
costs. To young enlisted families, elimination of the commissary 
subsidy would have the same impact as a 9 percent pay cut.
    To reduce the out-of-pocket expenses members incur during changes 
of station, we have approved $101 million in nonappropriated funding to 
construct 420 new Temporary Lodging Facility (TLF) units and repair 
another 305. Surveys show 88 percent of members needed an average of 14 
days in temporary quarters upon arrival at their new duty location. The 
average off-base lodging cost at the locations where we are building 
new TLF's is $70 per day compared to $24 on base. Building these units 
will save money for both the members and the Air Force.
    Balanced TEMPO.--Air Force TEMPO was very high in 1997--supporting 
numerous major contingency operations and over 180 coalition, allied, 
and joint exercises around the world. Since 1989, deployment 
requirements have quadrupled, while permanent forward basing has 
decreased by 66 percent. Endstrength has decreased by 39 percent since 
1986, the beginning of the drawdown.
    TEMPO is inextricably linked to both readiness and QoL. Our 
objective is to maintain a reasonable TEMPO that balances the needs of 
our contemporary military mission with our people's QoL. We have 
established 120 days per year as the ``desired maximum'' number of days 
individuals should be away from their home station for any reason. Air 
Force management initiatives that were implemented between fiscal year 
1994 and fiscal year 1996 (Global Military Force Policy, Global 
Sourcing, and increased Air Reserve Component participation), resulted 
in a reduction in the number of weapons systems/skill areas that 
exceeded our 120-day rate from 13 to 4.
    However, despite continued aggressive management of resources, the 
number of systems/skills above the 120-day mark increased to ten in 
fiscal year 1997. We are addressing this increase by taking steps to 
mitigate each of the factors contributing to high TEMPO--operational 
deployments, inspections, and exercises.
    We have reduced typical aircrew deployments from 90 to 45 days and 
instituted post-deployment standdowns to give people a break after 
deployments of 45 or more days, allowing time to reacquaint with family 
and return to normalcy. Additionally, in 1998, the length of unit 
inspections will be reduced by 10 percent with an additional 20 percent 
reduction in fiscal year 1999. There is also an effort underway to use 
real-world deployments to inspect operational readiness as an 
alternative to using simulated scenarios for the purpose of inspection. 
This initiative was used to inspect the 366 AEW from Mountain Home AFB, 
Idaho, in 1997 during its deployment to Bahrain in support of Operation 
Southern Watch. In the short- to mid-term, there are also efforts on 
the Joint Staff and the Air Staff to reduce exercises. The joint goal 
is to reduce exercise man-days by 15 percent before fiscal year 2001, 
and we anticipate a 10 percent reduction in Air Force exercises by 
fiscal year 2002.
    On 1 October 1997, we implemented a new system to track TEMPO. The 
objective is to provide senior leaders with the information they need 
to identify highly-tasked weapon systems and career fields and, if 
necessary, take action to reduce their stress. We distributed this new 
management system to all major commands and military personnel flights 
with an easy-to-use database that identifies the number of days a 
person has been on temporary duty in a 12-month period. This database 
tool allows Air Force commanders, using laptop or desktop computers, to 
view TEMPO information from the Air Force, major command, base, and 
unit level by Air Force specialty code, weapon system, or social 
security number. This system gives commanders a tool they need to help 
manage the TEMPO of their units.
    Our efforts to balance the impact of TEMPO are designed to offset 
the effects of increased TEMPO levels. We are closely monitoring the 
situation to determine our ability to sustain this level of activity.
    Quality Health Care.--We have an obligation to provide high-
quality, affordable health care for all of our beneficiaries. The Air 
Force operates 46 of the Department's 115 hospitals and 33 of its 471 
clinics. Each of these facilities is accredited by the Joint Commission 
on Accreditation of Healthcare Organizations, and meets the same 
standards as civilian hospitals.
    For the past five years, average accreditation scores for military 
hospitals have exceeded the average civilian scores. Furthermore, 17 
percent of Air Force facilities received accreditation with 
commendation--the highest rating available--compared to 12 percent in 
the civilian sector.
    The TRICARE health plan which combines military and civilian 
medical capabilities to provide care for active duty and CHAMPUS-
eligible individuals is a vital tool to complement Air Force hospitals 
and clinics. While the TRICARE program has experienced some problems in 
the early going, it has proven to be a success on the whole. A survey 
last year of TRICARE Prime enrollees found that 80 percent of TRICARE 
participants rated their care good to excellent and 9 out of 10 would 
reenroll. Problems that patients have experienced, such as multiple co-
payments for a single episode of care and the portability of Prime 
enrollment, will be resolved in 1998. Although TRICARE will be fully 
implemented by Spring 1998, the law prohibits Medicare-eligible 
retirees from participating in TRICARE. A tri-Service task force is 
looking into alternatives for their care, as space-available care 
becomes more limited.
    One step in meeting the commitment to care for this group is 
Medicare Subvention legislation that allows Medicare reimbursement for 
medical care provided in Department of Defense (DOD) facilities to 
Medicare-eligible beneficiaries. We strongly support this approach. 
This is clearly the first step in meeting the health care needs of our 
seniors. Our Service will be participating in the Congressionally-
mandated Medicare Demonstration project for military retirees over age 
65. We are also evaluating other medical alternatives for these older 
retirees, such as the Federal Employees Health Benefits Program and 
expansion of the National Mail Order Pharmacy Program.
    Safe, Affordable, and Adequate Housing.--Access to safe, 
affordable, and adequate housing should be available for every member 
of our military forces. Last year we completed a dormitory master plan 
to clearly identify housing requirements for our unaccompanied enlisted 
force and instituted a phased plan to accomplish it. The first step in 
this plan is to eliminate the remaining permanent party, central-
latrine dormitories.
    The second step, which will begin in fiscal year 2000, is to 
provide new dormitories to meet our projected 17,000 room deficit. We 
remain firmly committed to the DOD ``1+1'' dormitory construction 
standard for all new permanent party dormitories. This provides for 
two-person occupancy of an apartment-like unit with a shared bathroom 
and kitchen and separate, private sleeping quarters. The first unit of 
this type has been built at McChord AFB, Washington, and is a big hit 
with our airmen.
    The third step calls for the future replacement or conversion of 
our existing adequate dorms as they wear out. We will not convert or 
replace these adequate ``2+2'' dormitories until their facility 
condition warrants a capital investment. Until these existing units are 
replaced or reconfigured, we are phasing in a private-room assignment 
policy that will authorize private rooms for all our unaccompanied 
airmen by fiscal year 2002.
    The combined strategy of eliminating central-latrine dorms, 
building new ``1+1'' dorms to meet our deficit, and implementing a 
private-room assignment policy goes a long way toward improving the 
quality of life and retention of our unaccompanied airmen. This 
commitment to our airmen extends to our men and women stationed 
overseas, especially in areas such as South Korea where the lack of 
unaccompanied on-base housing has force protection and readiness 
implications.
    For Air Force families, we must revitalize over 61,000 housing 
units that have an average age of approximately 35 years. Although the 
Air Force owns or leases more than 110,000 homes, 41,000 families 
remain on base housing waiting lists. It appears that privatization may 
offer an opportunity in this area.
    At Lackland AFB, Texas, a privatization project appears feasible to 
replace 272 housing units and construct an additional 148 units on 
base. At Robins AFB, Georgia, we are developing a privatization project 
for 670 units on land currently owned by the Air Force that will be 
conveyed to a developer to create a new neighborhood immediately off 
base. Under the privatization approach, housing units are leased by the 
privatization owner to Air Force members who pay rent and utilities 
equal to what they receive as basic allowance for their housing.
    Privatization provides an opportunity to bring substandard housing 
units up to standards in significantly less time than it would take 
under the current system. We will implement this innovative approach 
where it is economically and financially feasible to do so.
    Stabilized Retirement System.--Because of the critical link between 
retirement, retention, and readiness, we continue to support 
preservation of the current retirement system. The 1980's reforms to 
military retirement devalued it as a retention tool. Members affected 
by these reforms are telling us two things about retirement. First, 
having lost 25 percent of its lifetime value during these reforms, 
military retirement is no longer our number one retention tool. Second, 
our members are uncertain that the retirement plan they signed up under 
will be there when they do reach retirement eligibility. We continue to 
closely monitor our officer and enlisted retention rates to ascertain 
what impact military retirement (and other personnel programs) play in 
our members' decision to stay in or leave the Service. We believe it is 
imperative to preserve the current retirement system. The mere 
suggestion of a change to the military retirement system causes serious 
concern throughout the force. We need Congressional support to 
stabilize and preserve the military retirement system. Our readiness 
depends on it.
    Community Programs.--Air Force community programs are designed to 
help active duty members with their dual responsibilities as military 
members and parents. They provide child care, before- and after-school 
programs for children 6-12 years of age, youth centers for teens, and 
family support centers to help individuals cope with family 
separations.
    At the end of fiscal year 1997, our Service was able to provide 57 
percent of the 86,000 needed child care spaces. Facility projects and 
funding are in place to increase this to 65 percent by 2002. Enhancing 
and expanding the before- and after-school programs for children 6-12 
years of age is a major part of our efforts in this area. These 
programs offer direct supervision for children who may currently stay 
at home alone before and after school and during holidays.
    Teen issues continue to be on the front burner in all Air Force 
communities. An Air Force-wide Teen Forum was held to identify issues 
and begin planning initiatives to improve services. To improve program 
quality, youth programs are being affiliated with the Boys & Girls 
Clubs of America, and new or expanded youth centers are under 
construction at many installations.
    Expanded Education Opportunities.--A fully-funded tuition 
assistance program and exploitation of distance learning technologies 
are two key components of our quality of life-related educational 
programs. Both of these programs provide exceptional educational 
opportunity which is consistently cited by our new recruits as the 
number one reason they enlist in the Air Force. Our Community College 
of the Air Force also continues to provide our enlisted force the means 
to earn job-related Associate degrees. This incentive not only 
motivates our airmen to achieve educational goals, but also serves to 
provide technically-proficient personnel for the Air Force's mission 
requirements. The opportunity provided by the 1996 Veterans Benefits 
Improvement Act to allow Veterans Educational Assistance Program 
contributors to convert to the much more advantageous Montgomery GI 
Bill was well received--61 percent of those eligible in the Air Force 
made the conversion.
            Promoting Equal Opportunity
    The Air Force gains its strength through diversity. Racial minority 
representation in our Service has risen from 14 percent in 1975 to 23 
percent today. Women now comprise 17 percent of the force--16 percent 
of the officer corps and 18 percent of the enlisted force. Our people 
feel that they are being treated fairly and know programs exist to 
bring complaints of discrimination and harassment to the attention of 
their supervisors.
    We have two such programs that military and civilian personnel may 
use--the military equal opportunity program and the civilian equal 
employment opportunity program. We are conducting a top-to-bottom 
review of both programs to see if they can be managed more efficiently 
and effectively and to determine if staffing, training, and funding are 
adequate to carry out their respective responsibilities. The review is 
expected to be complete in early 1998.
    The Air Force equal opportunity program will continue to stress 
command commitment and accountability, clarity of policy, effective 
training, and fair complaint handling. Our goal is to promote 
individual opportunity and professional growth in an environment free 
from discrimination and harassment.
    preparing for the 21st century--strengthening core competencies
    Our people deserve to be equipped with the right tools to 
accomplish our missions. The Air Force modernization program is 
designed to enhance the unique capabilities embodied in our specialized 
core competencies--Air and Space Superiority, Precision Engagement, 
Global Attack, Rapid Global Mobility, Information Superiority, and 
Agile Combat Support. These competencies provide the rapid, precise, 
and global response that gives our combatant commanders and the 
National Command Authorities the necessary options to respond to 
regional crises.
Air and Space Superiority
    Air and space superiority is a fundamental requirement for all 
operational concepts in Joint Vision 2010 and is a prerequisite to 
achieving full spectrum dominance. It is essential that U.S. and allied 
forces, both in-place and those deploying to theater, be protected from 
enemy air attacks early in the conflict. As potential adversaries 
acquire more capable fighter aircraft and, importantly, longer-range 
air-to-air missiles, it will become more difficult for a small 
expeditionary force to defend friendly airspace effectively and to 
secure air superiority quickly.
    The National Defense Panel pointed out that legacy systems procured 
today will be at risk in the 2010-2020 time frame. That is precisely 
why our Service is investing in the leap-ahead capability embodied in 
the F-22 Raptor. Three distinguishing factors: supercruise; stealth; 
and integrated avionics make the F-22 truly revolutionary. The F-22's 
ability to engage enemy aircraft before being detected by them will 
allow our forces to shoot down large numbers of enemy aircraft while 
minimizing the number of our fighters lost in air-to-air engagements. 
This high exchange ratio, coupled with the F-22's ability to operate 
effectively in the vicinity of surface-to-air missiles, will enable our 
forces to achieve a dominant air defense posture and air superiority 
within the early days of a major theater war. The F-22 will enable the 
United States to dominate the air arena and deny our adversaries 
sanctuary--giving every member of the joint team the ability to operate 
free from attack and free to attack. Additionally, in the future, the 
integrated air-to-ground capability of the F-22 could make it our high-
end attack aircraft.
    The Raptor successfully completed its first flight in September 
1997, begins flight testing at Edwards AFB, California, in early 1998, 
and will enter operational service in 2005. Funding stability for this 
critical modernization effort is essential for program stability.
    In addition to the threat posed by advanced enemy aircraft, the 
National Defense Panel also recognized the importance of defending key 
regional coalition partners against enemy missile attack. We are 
developing the Airborne Laser (ABL) to counter this threat. This truly 
revolutionary weapon will change the military's concept of defense and 
open the door to a new era of warfare. Its ``speed-of-light'' 
capability to shoot down Theater Ballistic Missiles (TBM's) in their 
vulnerable, boost-phase portion of flight can deter the use of these 
weapons by our adversaries by forcing them to face the possibility of 
their weapons falling back on their territory. This year, the ABL 
showcased its shooter, sensor, battle management, and communications 
capabilities as part of a joint multi-layered theater missile defense 
architecture in the Roving Sands 97 wargame. In this simulated 
scenario, the ABL shot down 16 of 17 targets it engaged and provided 
missile launch warning, launch and impact point predictions, and 
trajectory data to the joint force.
    The ABL program is on track, meeting all its milestones, and will 
demonstrate its lethality with an actual TBM shootdown demonstration in 
2002. The ABL will reach initial operational capability with three 
aircraft in fiscal year 2006 and full operational capability with seven 
aircraft in fiscal year 2008.
    Space-based assets will enhance the success of the ABL. For 
example, the Space-Based Infrared System (SBIRS) will provide cueing 
for the ABL as well as all other missile defense systems. SBIRS will 
consist of constellations of satellites in high and low orbits and will 
provide improved detection and warning of strategic and theater missile 
launches. The SBIRS High component satellites are necessary to replace 
the current Defense Support Program (DSP) constellation that provides 
warning of missile attack. The last DSP satellite will be launched in 
2003 and a follow-on system is needed to maintain global coverage.
    SBIRS High will provide complete coverage of the northern 
hemisphere and most of the southern hemisphere, providing warning of 
hostile missile launches, missile tracks through burnout, launch point 
and initial impact point prediction, and target handover to ground-
based radars and the SBIRS Low component. SBIRS High sensors will also 
gather technical intelligence and perform battlespace characterization 
and pass this information on to the warfighter in real time.
    The SBIRS Low component will acquire and track missiles during the 
midcourse of their flight. It will track small, cold bodies, such as 
reentry vehicles, against the deep space background, discriminate 
warheads from decoys, and pass this information to missile defense 
systems. The precision tracking of the threat reentry vehicles by SBIRS 
Low will significantly increase the probability of a successful 
intercept. SBIRS will complement the F-22 and ABL to enable our forces 
to dominate air and space as part of achieving full spectrum dominance.
    Space-based support is rapidly becoming a prerequisite for 
successful military operations on the land, sea, and in the air. 
Integrating space-based systems into all aspects of its operations is a 
top Air Force priority. This objective has implications for each of the 
Air Force core competencies and is the foundation for our Service's 
continued evolution as an aerospace force. But space-based capabilities 
can only be made available with reliable, cost-effective spacelift. 
Toward that end, we are developing the Evolved Expendable Launch 
Vehicle (EELV).
    The EELV will replace the current fleet of launch vehicles with a 
family of vehicles to provide assured access to space. The EELV will 
enter operational service with government flights of medium and heavy 
lift variants scheduled as early as 2002 and 2003 respectively. EELV 
will significantly improve DOD, civil, and commercial launch operations 
by reducing costs, shortening timelines, and enabling more launches per 
year. We have recently settled on a strategy to carry two contractors 
forward into the engineering and manufacturing development and 
production phases. This decision was based on a potential private 
sector market significantly larger than originally envisioned for EELV. 
The benefits from this new strategy include a more robust industrial 
base and two sources to provide continued competition into production 
and is an example of our revolution in business practices.
Precision Engagement
    Today, and for the foreseeable future, successful military 
operations will depend on the ability to reliably achieve desired 
effects while limiting casualties and minimizing collateral damage. We 
are using the power of space-based systems to support a new generation 
of very accurate munitions that exploit the power of satellite 
navigation to find their way to within feet of any target. We are also 
investing in greater numbers of advanced precision weapons capable of 
killing multiple targets on a single pass, and improving our day, 
night, and adverse weather precision employment capabilities to enable 
pinpoint target accuracy.
    We are working hard to field advanced munitions that will further 
enhance the range of our precision engagement capabilities like the 
inexpensive Joint Direct Attack Munition (JDAM) Global Positioning 
System guidance kit that converts 1,000 and 2,000 pound general purpose 
and penetrator warheads into highly accurate, adverse weather weapons 
with in-flight retargeting capability. Initial JDAM drop test results 
were impressive, with impacts well within the 13 meter requirement. 
JDAM low rate initial production began in fiscal year 1997 and 
deliveries will start in fiscal year 1998.
    The long range, low observable, conventional, precision guided 
Joint Air-to-Surface Standoff Missile (JASSM) will enable precision 
engagement of high value, heavily defended, fixed and relocatable 
targets. This is another truly revolutionary weapon system at a very 
affordable price. The decision to proceed to engineering and 
manufacturing development is scheduled for fiscal year 1999. The low 
rate initial production decision is scheduled for fiscal year 2000.
    The Joint Standoff Weapon (JSOW) will permit highly accurate, 
adverse weather employment against land and sea targets at standoff 
ranges of 15-40 miles. We will use two variants with submunitions 
designed to neutralize both soft and heavily armored targets. We will 
begin buying JSOW soft target variants in fiscal year 1998 and hard 
target variants by fiscal year 1999.
    The Sensor Fuzed Weapon (SFW) dispenses cluster munitions which 
will provide multiple kills per aircraft pass against land combat and 
support vehicles. Full rate production of baseline SFW began in fiscal 
year 1996 and initial operational capability was declared in early 
fiscal year 1997. The Air Force initiated Pre-Planned Product 
Improvement (P\3\I) development in fiscal year 1996. SFW P\3\I expands 
the weapon's footprint by 50 percent, incorporates a dual mode Laser/
Infrared sensor and a multi-purpose combination warhead, and increases 
kills per pass to 233 percent of the requirement for the current 
baseline SFW. Production will begin in fiscal year 1999. About 3,000 of 
the 5,000 planned weapons will include P\3\I improvements.
    The Wind Corrected Munition Dispenser (WCMD) guidance tail kit will 
provide the capability to correct for launch transients and wind 
effects and give the Air Force a first time capability to deliver area 
munitions such as Combined Effects Munitions, GATOR, and SFW accurately 
from medium to high altitude. Full rate production is planned for 
fiscal year 2000.
    To counter proliferation of chemical and biological weapons, we 
plan to enhance the counterforce capability of our Conventional Air 
Launched Cruise Missiles against fixed chemical/biological production 
and storage facilities. Funds for this effort were made available by 
OSD as a result of a joint OSD-Interservice review of current 
capabilities to attack such targets. Elsewhere, we are working on the 
Agent Defeat Weapon, a capability to neutralize (with low collateral 
damage) chemical and biological weapons before they are employed. This 
capability is currently in concept exploration and definition.
    The Joint Strike Fighter (JSF) is a precision engagement asset that 
will replace the aging fleets of Air Force F-16 and A-10 aircraft. The 
JSF will provide a less expensive multi-role partner for the F-22. The 
F-22 and JSF are intended to be complementary, not interchangeable. 
Together they represent a synergistic high-low capability mix. The F-
22's ability to gain air dominance by penetrating and suppressing the 
most lethal ground-based and airborne systems of the next century makes 
it possible for us to design a multi-role aircraft which is less 
capable and therefore less costly. This is the same high-low mix 
principle we utilized with the F-15/F-16 partnership. Without the F-22, 
the JSF would be hard pressed to perform its mission against current 
and impending threats with the same effectiveness. The JSF's affordable 
balance of survivability, lethality, and supportability will bring 
precision engagement to the future battlespace while simultaneously 
decreasing life cycle costs.
    The JSF program is on track to supply over 2,900 next-generation 
multi-role strike fighters to the Air Force, Navy, Marines, and the 
United Kingdom Royal Navy. There are several other interested Allies 
that may expand and extend the JSF overall quantity. Delivery of the 
first operational JSF is scheduled for fiscal year 2008.
    Successful precision engagement is as dependent on timely and 
accurate information as it is on precision weaponry and capable 
delivery platforms. Rapidly getting this information to our aircrews 
for mission planning and target study is critical for mission success. 
Toward that end the Air Force is evaluating systems like the National 
Eagle system.
    Housed in a twenty-foot deployable shelter, National Eagle receives 
and processes near-real time imagery from satellites and the Predator 
UAV and fully integrates it with the Air Force Mission Support System 
and the PowerScene mission visualization system. National Eagle 
provides the route planning and ``fly-through'' mission visualization 
capability that enables our pilots to practice their missions in 
virtual reality at a computer console before strapping into their 
aircraft for an actual mission. National Eagle is a refinement of the 
technique that was effectively used in Bosnia during Operation 
Deliberate Force to increase mission success and avoid unnecessary 
collateral damage. We will continue to search for similar innovative 
initiatives to integrate air and space assets to further enhance the 
effectiveness of aerospace power.
Global Attack
    To quickly halt enemy forces in the early phase of a conflict, the 
U.S. must maintain its unique ability to project power rapidly, 
precisely, and globally--to quickly find and attack or influence 
targets worldwide from air and space. Air Force global attack assets 
are designed to fill this need, responding anywhere in the world in a 
matter of hours.
    Global Power missions illustrate this capability and are quarterly 
requirements for each Air Combat Command bomb wing. The purpose of 
these missions is to demonstrate to any potential adversary the 
capability of U.S. aerospace forces to project power from bases in the 
continental United States to anywhere in the world within 24 hours. In 
fiscal year 1997, 32 global power missions were flown by B-1's, B-2's, 
and B-52's throughout the world. Missions with durations over 30 hours, 
taking off and landing at home station, are not uncommon. This greatly 
increases the options available to the CINC's during crises, while 
lowering aircrew TEMPO by allowing them to operate from their home 
stations.
    Bomber operations from forward locations provide commanders with 
the added mass, flexibility, and higher utilization rates critical to 
the halt phase. 1997 witnessed the first in-theater deployment of 
bombers with an Aerospace Expeditionary Force when B-1's deployed to 
Southwest Asia to support extensions to Operation Southern Watch.
    The B-1 Lancer is the Air Force's primary long range conventional 
delivery system. In October 1997, the Air Force suspended the B-1's 
active nuclear support role. It remains on schedule for conversion to a 
conventional role under the multi-phased Conventional Mission Upgrade 
Program (CMUP).
    The B-1 carries three families of cluster bomb weapons, including 
the anti-armor SFW, making it the first bomber with this critical halt 
phase capability. In April 1997, the Defensive Systems Upgrade Program, 
a component of the CMUP, entered into the engineering and manufacturing 
development acquisition phase. It includes the ALR-56M radar warning 
receiver for improved situational awareness and a fiber optic towed 
decoy for radio frequency jamming. Additionally, in July 1997, the B-1 
received approval for full rate production of the GPS and 
communications upgrade portions of the CMUP.
    By the second quarter of fiscal year 1999, we will equip eight B-
1's with the JDAM and the interim ALE-50 Towed Decoy System for 
survivability against radar threats. By fiscal year 2002, the B-1 will 
achieve its initial operational capability with the WCMD, JSOW, JASSM, 
and the full defensive system upgrade to include the Joint Air Force-
Navy Integrated Defensive Electronic Countermeasures System.
    The B-2 Spirit is our multi-role, heavy bomber capable of 
delivering both conventional and nuclear munitions. Achieving initial 
operational capability in April 1997, the B-2 brings massive firepower 
to bear, in a short time, anywhere on the globe. Its low-observable, or 
``stealth,'' characteristics give it the unique ability to penetrate an 
enemy's most sophisticated defenses and threaten its most valued and 
heavily defended targets. The B-2 has the capability to deliver a wide 
variety of precision and non-precision weapons including the JDAM, GPS 
Aided Munition, SFW, Cluster Bomb Units, mines, and general purpose 
munitions ranging from 500 to 2,000 pounds.
    The GBU-37, a GPS guided, 4,700 pound, deep penetrating munition 
was added to the B-2 arsenal in late 1997. This weapon is currently the 
only all-weather, near-precision ``bunker busting'' capability 
available to warfighting CINC's. B-2 conventional weapons integration 
will continue to be enhanced with the addition of JSOW in fiscal year 
1999 and JASSM in fiscal year 2002.
    For more than 35 years, the B-52 Stratofortress has been the 
primary strategic heavy bomber force for the United States. The B-52 
has the combat proven capability of dropping or launching a significant 
array of weapons in the U.S. inventory. It is the only Air Force 
aircraft capable of delivering all of the following precision, standoff 
weapons: the AGM-129 Advanced Cruise Missile, the AGM-86B Air Launched 
Cruised Missile, the AGM-84 Harpoon anti-shipping missile, the AGM-86C 
Conventional Air Launched Cruise Missile, and the AGM-142 missile. 
Additionally, the B-52 has the capability to integrate future standoff 
and precision conventional munitions.
    Rounding out the Air Force global attack assets are the Minuteman 
and Peacekeeper ICBM fleets. Both the Minuteman and Peacekeeper systems 
provide rapid, precision strike capability. The Minuteman fleet is 
undergoing modernization programs, including propulsion and guidance 
replacements, to continue to ensure the fleet remains a reliable and 
credible deterrent to nuclear attack. The Peacekeeper fleet will 
continue to be a nuclear deterrent until deactivated under the 
provisions of START II.
Rapid Global Mobility
    Rapid global mobility ensures our nation can rapidly respond to the 
full spectrum of contingencies--from combat operations, to humanitarian 
relief, to peacekeeping, with the right force, at the right time, and 
the right place. Air mobility missions include the airlift and/or 
airdrop of troops, passengers, supplies, and equipment to locations 
around the globe, as well as air refueling for Air Force, sister 
Service, and allied aircraft. Air mobility forces also provide 
worldwide aeromedical evacuation of patients, participate in special 
operations, and support other national security requirements. Rapid 
global mobility is the joint team's most reliable combat multiplier.
    Airlift and air refueling forces provide tremendous speed and 
flexibility in deploying, employing, and sustaining America's military 
forces. Air mobility forces operate as part of a larger joint 
warfighting team, working closely with air, land, and naval forces to 
meet operational requirements for the unified commanders.
    The C-17 is rapidly becoming the new core airlifter of the Air 
Force's mobility fleet. Its ability to carry outsize cargo into austere 
airfields is essential in deploying our forces virtually anywhere on 
the globe--a capability no other nation in the world has. This 
capability was recently showcased during CENTRAZBAT 97, a combined 
force exercise consisting of forces from the U.S., Kazakhstan, 
Uzbekistan, Kyrgyzstan, Russia, and Turkey. In this exercise eight C-
17's flew 7,800 miles non-stop from Fort Bragg, North Carolina, to air 
drop troops and equipment in Central Asia--the longest air drop mission 
in history.
    In 1997, the C-17 supported our forces in Bosnia, Haiti, and the 
Middle East, while accomplishing numerous global movements on short-
notice. From transporting Army rocket launchers from Oklahoma to Korea, 
to supporting the evacuation of non-combatants from Liberia, to 
humanitarian relief flights to Central Africa, the C-17 continues to 
carry the load for the joint force and will provide unparalleled reach 
well into the new millennium.
    Another important aspect of our mobility capability was 
demonstrated in 1997 by members of the 352nd Special Operations Group 
and 100th Air Refueling Wing. These forces deployed to Libreville, 
Gabon, in West Africa, as part of an enabling force to support the 
Joint Task Force Operation Guardian Retrieval. This operation was 
initiated to evacuate the estimated 550 American citizens in Zaire to 
protect them from the violence associated with the civil war there. The 
airmen joined about 400 soldiers, sailors, and Marines comprising the 
joint task force ashore in West Africa.
    The deployment came just weeks shy of the first anniversary of 
Operation Assured Response when Air Force Special Operations Forces 
(SOF) units deployed to Africa to help evacuate more than 2,400 people 
from Liberia. Our SOF forces maintain the highest tasking rate in the 
Air Force and it is critical that they are properly equipped to deal 
with the increasing number of military operations other than war. These 
operations require long range vertical lift capability presently 
supplied by MH-53J and MH-60G aircraft.
    Our plan to acquire CV-22's for our SOF forces will provide long 
range, adverse weather, clandestine penetration of medium to high 
threat environments in politically or militarily denied areas to 
execute personnel recovery operations, infiltrate, exfiltrate, and 
resupply SOF forces. The CV-22's speed, extended range, and 
survivability will significantly increase the warfighting CINC's 
ability to conduct operations in denied territory. Air Force Special 
Operations Command will receive 50 of the tilt-rotor aircraft. The CV-
22 is expected to make its maiden flight in 2000. Hurlburt Field, 
Florida, will receive operational aircraft beginning in 2004.
    We are also modernizing our executive fleet by replacing the VC-137 
fleet at the 89th Airlift Wing at Andrews AFB, Maryland. The VC-137's 
will be replaced with four C-32A (Boeing 757) and two C-37A (Gulfstream 
V) aircraft. All aircraft will be delivered in 1998.
    Global Access, Navigation, and Safety (GANS) is an Air Force 
management initiative established to harmonize requirements and 
acquisition of several navigation and safety-related programs. The 
purpose of GANS is threefold: to organize related navigation and safety 
programs and integrate Air Force efforts through combined Air Staff and 
Major Command integrated product teams; to serve as a requirements and 
acquisition management tool; and to establish an avionics acquisition 
modernization strategy designed to minimize platform downtime and 
integration costs. The GANS process provides implementation planning 
for one of the largest of these programs, Global Air Traffic Management 
(GATM). We will sustain our rapid global mobility core competency by 
acquiring state-of-the-art GANS systems for our air mobility forces to 
preserve access to prime global airspace routes in the future.
    Additionally, latest technology, commercial ground and air traffic 
warning systems using digital terrain database displays and GPS have 
been established as standard equipment for all Air Force passenger 
capable aircraft. This equipment is to be installed as soon as 
possible, but not later than 2005, to enhance our ability to safely 
operate in higher traffic densities of the 21st century.
    Modernization of the Active and Reserve Component C-130 airlift 
fleet is on track. This program consists of modification of our 
existing C-130's and limited procurement of the C-130J. Programmed 
modifications are designed to increase reliability, maintainability, 
combat capability, and safety. Our current plan is to modernize over 
350 existing aircraft between fiscal year 2000 and fiscal year 2009.
    Our Pacer CRAG (Compass, Radar And GPS) avionics upgrade to the KC-
135 fleet is also on track. This commercial off-the-shelf modification 
program will eliminate the need for a navigator on most missions. 
Recent additions to the Pacer CRAG program include a Traffic Alerting 
and Collision Avoidance System (TCAS), an Enhanced Ground Proximity 
Warning System (E-GPWS), a Standby Air Data Indicator, and a Reduced 
Vertical Separation Minima (RVSM) Compliant Air Data Computer. These 
systems will serve as the foundation for future GATM modifications and 
ensure our KC-135 fleet maintains the capabilities necessary to meet 
wartime requirements.
Information Superiority
    In today's environment, information superiority is critical to the 
execution of Air Force core competencies and overall mission success. 
The essence of information superiority is the ability to collect, 
control, exploit, and defend information and information systems. These 
``information operations'' are important to the entire range of 
military operations, from peace to all-out conflict. The Air Force 
provides information superiority to the nation by executing information 
operations in air, space, and increasingly, in cyberspace. One of the 
fundamental benefits of information superiority is effective command 
and control of our military forces.
    We are committed to integrating command and control (C\2\) into 
aerospace operations, eliminating duplication of effort, and increasing 
commonality between C\2\ systems. To implement and oversee these 
initiatives, we stood up the Air and Space Command and Control Agency 
in 1997. This agency, together with the Air Force Communications and 
Information Center (the Air Force's center of excellence for 
communications and information, also established in 1997), will be 
pivotal in expanding our nation's information edge and enhancing our 
warfighters' capabilities.
    We are aggressively pursuing innovative C\2\ capabilities to 
improve Air Force expeditionary operations. For example, in September 
1998, we will conduct Expeditionary Forces Experiment 98 (EFX 98) to 
demonstrate C\2\ capability and help focus our C\2\ operations and 
investment. EFX 98 will consist of a simulated combat scenario with 
emphasis on the rapid deployment and employment of an AEF to conduct 
offensive air operations. It will combine elements of live-fly 
exercises, modeling and simulation, and advanced technology to 
demonstrate new operational concepts such as near-real time sensor-to-
decision maker-to-shooter capabilities, Joint Force Air Component 
Commander enroute employment planning, Distributed Air Operations 
Center concepts, and Agile Combat Support using In-Transit Visibility 
and Total Asset Visibility. EFX 98 will establish the baseline for a 
series of advanced warfighting experiments we plan to conduct annually.
    One system that is key to meeting the warfighters' command, 
control, communication, computer, and information (C\4\I) needs is the 
Global Command and Control System (GCCS). GCCS is a part of the overall 
Defense Information Infrastructure Common Operating Environment (DII 
COE) which affords all the Services interoperability and eases joint 
operations; it is a DOD integrated C\4\I system that provides a joint, 
worldwide classified network to facilitate the dissemination of 
critical information. We have fielded GCCS at all Major Commands, 
Numbered Air Forces, and most Wings. GCCS provides a full complement of 
C\2\ capabilities such as readiness assessment, crisis action and 
deliberate planning, intelligence mission support, secure 
communications, and a common operational picture. We are migrating Air 
Force C\2\ systems to this common operating environment to enhance 
interoperability.
    Effective C\2\ depends in large part on our ability to accurately 
identify all of the hostile, friendly, and neutral entities in the 
battlespace--referred to as Combat Identification (CID). Accurate CID 
hinges on our ability to effectively process data to build a three-
dimensional picture of the battlespace. This in turn permits real-time 
application of tactical options so weapons can be employed at optimal 
ranges against the most critical enemy targets. The acquisition of CID 
systems and development of associated tactics, techniques, and 
procedures will maximize operational effectiveness, reduce casualties 
due to fratricide or enemy actions, and move us closer to the goal of 
full spectrum dominance.
    The Airborne Warning and Control System (AWACS) is the linchpin of 
airborne C\2\ systems as the airborne surveillance and battle 
management platform for the Joint Force Commander. We have 
modernization efforts underway to ensure AWACS remains an effective and 
survivable airborne C\2\ platform through 2025.
    In 1997, the AWACS Radar System Improvement Program successfully 
completed its initial operational test and evaluation. This program 
will greatly increase the detection range of low radar cross section 
targets, provide improved electronic counter-counter measures, and 
reduce radar failure time ten-fold. Additionally, the collection of 
initiatives comprising the Extend Sentry program will reduce 
maintenance downtime, reduce the number of mission aborts, and increase 
aircraft availability. The Extend Sentry program is critical to ensure 
the AWACS will remain available to meet real-world taskings.
    Timely, accurate information provides the National Command 
Authorities and our military commanders with the ability to quickly 
assess developing crises and respond appropriately. The operations of 
U-2, Predator, and the RC-135 Rivet Joint aircraft around and over 
Bosnia and Iraq graphically illustrate how the integration of air and 
space assets has improved the timeliness and accuracy of our 
information. The U-2 has the ability to deliver digital near-real time 
information to ground stations in the continental United States, which 
in turn process it and relay it by satellite to theater commanders 
around the globe.
    These ground stations, known as Contingency Airborne Reconnaissance 
System (CARS) Deployable Ground Station (DGS) 1 and 2, are located at 
Langley AFB, Virginia, and Beale AFB, California. They serve as 
collection and assessment points for the U-2's raw intelligence data. 
Each DGS consists of two squadrons, an Air Combat Command unit that 
provides imagery analysis expertise, and an Air Intelligence Agency 
unit that provides signals intelligence, logistics, and communications 
expertise. These units determine the capabilities and posture of 
potential adversaries and provide near-real time intelligence products 
to deployed forces in Bosnia and Southwest Asia using Mobile Stretch 
(MOBSTR) communications relay technology.
    Deploying a DGS into a theater of operations would require six C-5 
Galaxy transports to move approximately 200 tons of equipment and more 
than 200 people. However, with our ``reachback'' capability, we achieve 
the same effect by deploying 30 people with smaller ground stations to 
collect and relay the U-2's data from the theater of operations to the 
United States for processing and dissemination.
    The U-2's impressive capability is complemented by Unmanned Aerial 
Vehicles (UAV's). The Predator Medium Altitude Endurance (MAE) UAV has 
been deployed to Bosnia since March 1996. This versatile system 
transmits live video feeds to front line commanders via the Joint 
Broadcast System--furnishing our joint forces with unparalleled 
situational awareness.
    On 1 August 1997, the 15th Reconnaissance Squadron at Indian 
Springs Air Force Auxiliary Field, Nevada, was activated as the second 
Air Force Predator MAE UAV squadron. One week later, Predator became 
the first Advanced Concept Technology Demonstrator (ACTD) to transition 
to a formal acquisition program under DOD's ACTD initiative. We have 
overcome several challenges and learned some lessons in making Predator 
the success it is today. We are using this valuable experience as we 
work with the high altitude UAV program offices to ensure a smoother 
operational transition once these programs prove themselves.
    In the area of manned reconnaissance, Rivet Joint continues to be 
our most flexible and responsive platform. During 1997, Rivet Joint 
remained in high demand, providing accurate, timely tactical 
information to a broad range of users in Bosnia, Southwest Asia, and 
around the world. In 1997, the first three aircraft of the 14 aircraft 
Rivet Joint Fleet were modified with current technology to establish a 
new baseline configuration. Two additional Rivet Joint aircraft will be 
added to the fleet beginning in 1998, helping to alleviate this 
system's high TEMPO rate. Additionally, we plan to complete most of the 
reengining program for the RC-135 fleet by the end of the Future Years 
Defense Program.
    Our more specialized RC-135 assets, COMBAT SENT and COBRA BALL, 
provided critical technical intelligence throughout 1997 to support 
weapons development efforts, theater force protection, and weapons 
proliferation assessments.
    Surveillance is also crucial to information superiority. The Joint 
Surveillance Target Attack Radar System (Joint STARS) provides 
commanders with a set of ``eyes'' to ``see'' what the enemy is doing on 
the ground in all weather, day or night. The Joint STARS combination of 
moving-target indicators and synthetic aperture radar produces images 
that enable operators to pick out individual vehicles in a moving 
convoy. This capability played an important role in enforcing the 
Dayton Peace Accords when both of the Bosnian factions could see and 
understand that their every movement was being monitored.
    Over the course of 1997, Joint STARS participated in several 
exercises where it provided critical situational awareness to 
commanders and troops. For example, during the Hunter Warrior exercise, 
the Red Team commander expressed frustration that he was unable to move 
his forces without detection by friendly forces when Joint STARS was on 
station. Similarly, the Joint STARS received excellent reviews for its 
work in the Foal Eagle exercise conducted in the Republic of Korea--the 
largest air base defense exercise in the free world. During the Foal 
Eagle exercise, the Joint STARS significantly increased the situational 
awareness of battle commanders in South Korea by providing the real-
time location of friendly and enemy forces.
    Joint STARS also has tremendous potential to assist with real-time 
targeting of enemy positions by attack aircraft. As an experiment, a 
Joint STARS mission was flown over Bosnia in which a Hand-held Terminal 
Unit (HTU) was used to send real-time target designation and other data 
by burst transmission to F-16 aircraft equipped with the Improved Data 
Modem. While the HTU is not currently integrated into Joint STARS, this 
experiment demonstrated the potential capability to pass real-time 
information from Joint STARS directly into the cockpits of attack 
aircraft.
    Joint STARS, which declared initial operational capability in 
December 1997, has now successfully deployed to the European, Southwest 
Asia, and Pacific theaters in four deployments. It continues to 
demonstrate its benefits as the DOD's only fielded real-time, long 
range, wide area surveillance and battle management asset. Together, 
the Joint STARS and the other Air Force information superiority assets 
provide the battlespace awareness necessary to conduct today's complex 
military operations.
    We must safeguard our information to prevent our forces from 
becoming the target of an adversary's information warfare campaign. We 
have an increasing need to defend information from its point of 
production to its point of delivery to the battlespace commanders. To 
aid in the defense of systems and the information they contain, Air 
Force investigators and counterintelligence personnel rely on the 
unique capability to detect and counter unauthorized network access 
afforded by the computer forensic laboratory. Within the laboratory, an 
impressive media analysis branch is able to dig clues from mountains of 
information stored in a variety of formats. This capability is 
complemented by a network intrusion squad capable of tracking intruders 
through the complex maze of cyberspace.
    Our Service was recently designated as executive agent for the new 
DOD Computer Forensics Laboratory. This laboratory will offer us an 
opportunity to play an important leadership role in developing 
techniques to protect key information systems across the DOD. Our other 
current information operations capabilities include the Automated 
Security Incident Measurement System, Modeling and Simulation programs, 
the Information Warfare Battlelab, and the Computer Security Assessment 
Program.
    In the area of offensive information warfare we have a variety of 
capabilities like those provided by the EC-130H, Compass Call. As DOD's 
only wide-area offensive information warfare platform, Compass Call 
provides disruptive communications jamming and other unique 
capabilities to support the Joint Force Commander across the spectrum 
of conflict.
    For localized targeting of specific avenues of communication, the 
EC-130E Commando Solo is available to commanders. This weapon system is 
the mainstay information operations aircraft for peacekeeping and 
peacemaking operations and humanitarian efforts which comprise a large 
percentage of today's military missions. With the capability to control 
the electronic spectrum of radio, television, and military 
communication bands in a focused area, the Commando Solo aircraft can 
prepare the battlefield through psychological operations and civil 
affairs broadcasts. In 1997, the Commando Solo supported the U.N.'s 
Operation Joint Guard mission by shutting down anti-SFOR propaganda 
through radio and TV broadcasts over Bosnia-Herzegovina in support of 
SFOR operations.
Agile Combat Support
    The success of the joint force ultimately rests on our ability to 
sustain deployed forces. Agile combat support will enable our rapid, 
responsive, and flexible forces to become more expeditionary in nature 
by eliminating the need for massive deployed inventories. Improvements 
in information and logistics technologies will make this possible.
    When combatant commanders require an item, integrated information 
systems will ``reach back'' to U.S. locations and ``pull'' only the 
resources required. Streamlined depot processes will release materiel 
in a timely fashion so that time-definite transportation can complete 
the support cycle by rapidly delivering needed resources directly to 
the user in the field. Integrated information systems currently being 
tested provide total asset visibility throughout this process, tracking 
resources throughout their delivery cycle. Mobility assets equipped 
with this technology can be tracked in near-real time through the 
exchange of GPS data, two-way message text, and aircraft cargo 
information.
    We are improving interoperability and commonality of combat support 
information systems with the Global Combat Support System-Air Force 
(GCSS-AF) program. GCSS-AF is another component of the DII COE; it is a 
software modernization program to provide interoperability and sharing 
of data between base-level information systems.
    Agile combat support will allow commanders to improve the 
responsiveness, readiness, deployability, and sustainability of their 
forces. The efficiency and flexibility of agile combat support will 
enable aerospace forces to engage quickly and decisively and sustain 
operations as necessary anywhere on the globe.
Enabling Technologies
    Our Service continues to explore and invest in promising 
technologies that enhance our core competencies and contribute to our 
vision for the future. Examples include: our development, 
demonstration, and maturation of the high-power laser technology that 
was transitioned to the Airborne Laser system; our execution of the 
Ballistic Missile Defense Organization's Space-Based Laser Research 
Demonstrator; and our cooperation with NASA to explore the potential of 
reusable launch vehicle technology for militarily unique applications. 
Additionally, we continue to investigate a range of new technologies 
from those intended to enhance the expeditionary capability of our 
aerospace forces to those designed to enable target identification from 
space. We feel it is important to explore revolutionary technologies 
like these as a hedge against the potential threats our nation may face 
in the future.
    Our defense laboratories and test centers are often the birthplace 
of key technologies. To increase the effectiveness and efficiency of 
these facilities, we streamlined the Air Force Materiel Command 
laboratory structure in April 1997 by forming a corporate Air Force 
Research Laboratory (AFRL). This new organization realigns the former 
Armstrong Laboratory at Brooks AFB, Texas; Phillips Laboratory at 
Kirtland AFB, New Mexico; Rome Laboratory at Rome, New York; Wright 
Laboratory at Wright-Patterson AFB, Ohio; and the Air Force Office of 
Scientific Research at Bolling AFB, Washington, DC, under a single AFRL 
commander headquartered at Wright-Patterson AFB. The AFRL will likely 
play a major role in harnessing emerging revolutionary technologies 
that will transform the way we employ military forces in the future.
Revolution in Military Affairs
    A revolution in military affairs (RMA) is said to occur when the 
innovative application of new technologies, combined with dramatic 
changes in operational and organizational concepts, fundamentally 
alters the character and conduct of military operations. The Air Force 
exists today because of an earlier RMA that combined the new technology 
of manned flight with innovative operational concepts to create a 
military force with a global perspective.
    Our Service has evolved over the years by leveraging leap-ahead 
technology and developing the appropriate operational and 
organizational structures to employ that technology. We are committed 
to the research, testing, and evaluation of promising new technologies 
that may lead to the next RMA. Stealth, supercruise, the Airborne 
Laser, precision guided munitions, Joint STARS, UAV's, integrated 
information systems, and space-based assets are all examples of leading 
edge technologies that are changing the way we conduct military 
operations.
    We are exploring the implications of leap-ahead capabilities in 
such areas as information operations, space operations, and directed 
energy to ensure we are postured to exploit the next RMA to build the 
aerospace capabilities necessary to protect America's security 
interests well into the 21st century.
                          improving efficiency
    Sustaining and strengthening our core competencies will depend on 
getting the most out of limited resources. We are downsizing personnel 
and taking other actions to streamline operations and increase 
efficiency in all areas to help fund our modernization program. We are 
looking to innovation and revolutionary business practices to improve 
our operations and reduce costs.
Innovation
    Innovation is critical to our Service's continued success. It is 
essential that we aggressively look ahead and seek new ways to employ 
aerospace power that will enable us to respond quickly to new strategic 
requirements and take advantage of new technological opportunities.
            Battlelabs
    One of the major engines for operational innovation is the Air 
Force battlelab concept. Battlelabs are small, focused, and rely on 
field ingenuity to identify creative operational and logistics concepts 
for advancing the Air Force's core competencies in joint warfare. The 
Air Force established six Battlelabs in July 1997 to identify 
innovative ideas: Aerospace Expeditionary Force, Command and Control 
Battle Management, Unmanned Air Vehicle, Space, Force Protection, and 
Information Warfare. Successfully demonstrated battlelab concepts will 
be introduced to the CINC's and their components through exercises and 
wargaming, and via the newly established Service and joint experimental 
organizations. New concepts adopted by the Air Force may prompt 
revisions to Air Force organization, doctrine, training, requirements, 
or acquisition to enhance the Air Force's ability to meet future 
challenges.
            Modeling and Simulation
    Modeling and Simulation (M&S) technologies are an array of computer 
and software tools for creating and interacting with artificial 
representations of reality. We have always used modeling and 
simulation, but advances in computer technology have enabled 
simulations that are highly detailed, increasingly realistic, and more 
affordable. Our challenge is to develop models and simulations that 
more accurately capture the contributions of aerospace power on the 
modern battlefield.
    We envision a ``joint synthetic battlespace'' that uses a mix of 
live participants, human-in-the-loop virtual simulators, and computer-
generated constructive simulations to organize, train, and equip our 
forces. To realize this vision, we are actively supporting the 
development of joint, interoperable, and reusable models and 
simulations. Specific examples include the Joint Warfare Simulation 
(JWARS), the Joint Simulation System (JSIMS), and the Air Force-
directed Joint Modeling and Simulation System (JMASS).
    JWARS is intended for joint campaign analysis and is being directed 
by the Deputy Secretary of Defense. JSIMS focuses on the operational 
level of war and will develop and deliver an M&S system capable of 
joint battlestaff training by 2000. JMASS provides a common environment 
focused on detailed tactical modeling for requirements development, 
acquisition, and testing. When these efforts are complete, we will be 
able to replace an aging suite of legacy models and simulations to more 
accurately simulate modern aerospace power.
            Wargaming
    Wargames are invaluable tools with which to explore innovative ways 
to employ military forces. Our Service is sponsoring a series of Global 
Engagement wargames with the support of our sister Services to better 
understand the contribution of air and space forces to the Joint Force 
Commander.
    We initiated this series in 1996 with Strategic Force 96 and 
followed it up last year with Global Engagement 97 (GE 97). GE 97 was 
enhanced by the addition of a seminar-based policy pregame where a 
select group of players, representing many principal advisors to the 
National Command Authorities, explored the implications of increased 
space and information capabilities on national policies and 
international treaties.
    Global Engagement 98 (GE 98) will also include a policy-level 
pregame to be held near Washington, DC, in June 1998. The operational 
game will be held the following November at Maxwell AFB, Alabama. GE 98 
will explore the transition of forces from a small scale contingency to 
a major theater war in the 2008-2009 timeframe. Scenarios will 
challenge current CINC's' staffs to test and evaluate emerging concepts 
of operations against viable threats and plausible enemy actions. Key 
aspects will include the employment of an AEF and the application of a 
rapid halt of advancing enemy forces to limit the conflict and avoid 
attrition warfare.
Revolution in Business Affairs
    In addition to operational innovation, we must adopt innovative, 
modern commercial business practices to free up precious resources for 
modernization. We must remove redundancy; use competition to improve 
quality and reduce costs; and reduce support structures both to free up 
resources and to focus on core competencies.
    We are capitalizing on the revolution in business affairs by moving 
away from traditional means of doing business in acquiring and 
supporting our forces. We have instituted an aggressive series of 
reforms in this regard that extend across the range of our activities.
            Strategic Business Planning
    Sustaining the current force while simultaneously investing in the 
systems necessary for operations in the 21st century is a significant 
challenge in today's fiscally constrained environment. Our key Air 
Force leaders responsible for accomplishing and supporting acquisition 
and sustainment have joined together to embark on a shared vision and 
commitment toward a strategic business plan that moves the acquisition 
and sustainment communities toward better business practices and 
continuous process improvement. The goal is to reduce costs without 
sacrificing mission capability.
            Partnership with Industry
    In June 1997, our senior leaders in acquisition, requirements, and 
planning and programming signed a memorandum encouraging Air Force 
members to communicate more openly with industry to promote a better 
understanding of our requirements in terms of mission and affordability 
issues. The intent is to promote innovative and more affordable 
business solutions. This new partnership is already showing progress in 
the form of acquisition reform, commercial off-the-shelf acquisitions, 
lean logistics, and competition and privatization.
            Acquisition Reform
    We are changing the culture of acquisition. The emphasis is to 
acquire all products used by the Air Force ``better, cheaper, faster'' 
and in a ``smoother'' more streamlined, well understood process. 
Virtually every new acquisition program is taking advantage of 
commercial practices by altering its strategy toward commercial 
specifications and standards, privatization, competition, commercial 
off-the-shelf technology, and contractor system responsibility. Through 
our Lightning Bolt initiatives in streamlining, teaming, and innovative 
acquisition strategies, we have realized $7.1 billion in savings from 
previously budgeted funds and $11.8 billion in cost avoidance. Newer 
efforts focus on continuous process improvement and establishing 
strategic steps to ensure that acquisition reform becomes the norm. To 
accomplish these objectives, we will continue to advance the 
professional development of our acquisition workforce by providing 
quality continuing education and training.
            Commercial Off-The-Shelf (COTS) Products
    Using commercial and non-developmental items is a key factor in 
achieving the needed economy of Air Force resources. Our focus is on 
increasing the use of current commercial non-developmental products, 
processes, and practices while improving the public-private sector 
business environment to enable a greater use of COTS. Some initiatives 
include: the conversion of 17 percent of our military product 
specifications to commercial item descriptions or non-government 
standards; the establishment of a market research working group to 
define commercial market research techniques that reveal the best 
commercially available items to insert into military systems; and the 
preparation of a draft COTS Handbook to aid in identifying and 
procuring commercial items.
            Lean Logistics
    Lean logistics includes a number of complementary initiatives 
designed to improve the capabilities of operational units by 
integrating and applying state-of-the-art business practices across all 
logistics functions and processes. For example, we have implemented a 
new method to compute base and depot stock levels which have reduced 
expected backorders by 17 percent, saving $70 million in depot repair 
dollars and eliminating $60 million in unfunded repair requirements. We 
have also instituted an automated method to prioritize depot repair and 
distribution actions to optimize fleet aircraft daily availability.
    The objective is to maximize operational capability by using high-
velocity, time-definite supply and delivery processes in lieu of large 
inventories to manage mission and logistics uncertainty. This results 
in shorter cycle times, reduced inventories and costs, and a smaller 
mobility footprint, which are critical to achieve Air Force agile 
combat support objectives.
            Competition and Privatization
    We are taking a long-term approach to competition and 
privatization. This entails charting a strategic path for us--now and 
in the long run--to make the most effective use of private sector 
capabilities while maintaining or improving our readiness and quality. 
Innovative solutions, improved performance, and increased savings 
should result from the increased competition inherent in the OMB A-76 
cost comparison process and the increased role of the private sector. 
With no growth planned for total obligation authority, the savings 
accrued from competition and privatization will be key for future 
modernization. Our competition and privatization initiatives are 
designed to preserve ``tooth,'' streamline ``tail,'' and support 
modernization.
    We are pursuing dual and joint-use initiatives for workloads with 
the private sector to use more efficiently the existing industrial 
capacity at the three remaining Air Logistics Centers that remain after 
BRAC 95. For the workloads not required to support core capabilities at 
McClellan Air Logistics Center, California, and San Antonio Air 
Logistics Center, at Kelly AFB, Texas, we are continuing with public-
private competitions. The results of the first of the public-private 
competitions, the C-5 Programmed Depot Maintenance at Kelly AFB, Texas, 
were announced in 1997. Warner Robins Air Logistics Center in Georgia 
won this competition with an expected savings of $190.2 million over 
the next seven years. Currently, two additional public-private 
competitions are planned--one for consolidated depot maintenance 
workloads at McClellan AFB, California, and the second for propulsion 
workloads at Kelly AFB, Texas. These competitions should be completed 
in 1998.
    In the area of privatization, we are pursuing initiatives in 
housing and utilities. We are using privatization to upgrade, improve, 
and replace substandard family housing and eliminate our 14,000 unit 
deficit. Of the 110,000 housing units in the Air Force-wide inventory, 
58,000 require upgrade, improvement, or replacement. Seven projects are 
currently proceeding through the privatization process with more 
anticipated.
    We are also moving forward with the privatization of base utilities 
in response to the Secretary of Defense's Defense Reform Initiative 
Decision. The first privatization project in this area will be awarded 
in July 1998 for the electrical distribution at Youngstown Air Reserve 
Base, Ohio. Under the current execution rules, we anticipate conversion 
of at least 175 water, wastewater, electrical, and natural gas systems.
            Financial Reform
    We continue our efforts to improve financial management systems and 
practices. We need better financial management in order to provide our 
commanders with high-quality financial information, eliminate financial 
irregularities that damage public confidence, and comply with the law.
    Improving financial management requires several key steps. 
Compliance with the Government Performance and Results Act (GPRA) is 
one of them. GPRA is important to financial management because it 
mandates the creation of output measures that can be used in financial 
reports and related to financial data. During the past year, we have 
supported OSD efforts to develop output measures and comply with other 
requirements of GPRA. We have also incorporated some GPRA output 
measures into our financial statements required by the Chief Financial 
Officers (CFO) Act. We are experimenting with activity-based costing, 
training our people on its use, and assisting in studies. Several of 
our commands are experimenting with new approaches to capturing the 
cost of ownership in order to identify areas to reduce operating costs 
and to help decision makers determine ways to reduce costs.
    We are also improving our CFO financial statements. These 
statements are publicly available and provide us an opportunity to 
demonstrate that we are good stewards of public funds. We have achieved 
relatively clean audit opinions on our military and civilian pay 
accounts and improved the information related to contingent 
liabilities. Now we are focused on making the statements more useful to 
commanders and seeking early implementation of some new statements 
required by the Federal Accounting Standards Advisory Board.
    Finally, we have undertaken an aggressive effort to improve our 
financial systems in order to provide better information to our 
commanders and comply with the CFO Act. In the near term, this effort 
involves modifying existing systems to provide better cost data and 
deploying already-developed systems (such as our Automated Business 
Services System) that can reduce errors in financial data. In the 
longer run, we must replace most of our existing systems. In most 
cases, we will choose the best-of-breed from among all service systems 
and modify the winner to comply with the CFO Act and provide adequate 
cost data. During the last year, we have made substantial progress on 
several systems efforts including one to replace the existing financial 
systems at Air Force depots with a modified version of a system in 
operation at Navy aircraft depots.
            Environmental Restoration and Compliance
    Environmental compliance, restoration, and conservation are 
essential to ensure the Air Force has continued access to ranges, 
airspace, and installations. Stable funding allowed the environmental 
restoration program to maintain its 1997 cleanup schedule at all 
contaminated sites. The firm commitment to know and obey environmental 
laws and regulations has resulted in a dramatic reduction in the number 
of open enforcement actions against the Air Force from 263 in 1992 to 
only 16 in 1997.
    In May 1997, the Air Force received 4 out of 14 White House Closing 
the Circle Awards which recognize people and groups for leadership in 
pollution prevention. The winners were: the Space and Missile Systems 
Center, Environmental Management Branch, Los Angeles AFB, California, 
for improved launch rocket systems; the 375th Civil Engineering 
Squadron, Scott AFB, Illinois, for its recycling program; the 
Environmental Management Directorate, Ogden Air Logistics Center, Hill 
AFB, Utah, for waste prevention; and Headquarters Air Combat Command, 
Langley AFB, Virginia, for its global environmental outreach program. 
Additionally, the Secretary of the Interior characterized Eglin AFB, 
Florida, as the best protected, best managed property that he had seen 
anywhere in the world. These examples represent our commitment to 
protect America's natural resources as we execute our missions.
    Partnerships with governmental and non-governmental organizations 
are fostering biodiversity and integrated ecosystem management at many 
installations. We are working closely with the Environmental Protection 
Agency (EPA) and state partners to seek common sense ways to achieve 
common goals. In November 1997, we signed an agreement at Vandenberg 
AFB, California, with the EPA and the Santa Barbara County Air 
Pollution Control District to reduce environmental program costs and 
apply savings directly to reducing pollution from the base. Vandenberg 
AFB was the first DOD installation to sign such an agreement with the 
EPA. We plan to direct environmental compliance funds into water 
conservation and air and water pollution projects. We will use the 
savings to purchase and operate cleaner operating boilers and equipment 
for the base's power station. The result will be less money spent on 
administration and more invested in improving air quality. The Deputy 
Undersecretary of Defense for Environmental Security cited Vandenberg 
as the model for this type of partnership. Environmental investment 
agreements are an important cooperative step toward sustaining both 
community and Air Force operations.
            Base Transfers and Realignments
    We continue to work with the communities impacted by base closure/
realignment to put the property and facilities into economic reuse. For 
example, Pease AFB, New Hampshire, is now Pease International 
Tradeport, employing 1,219 people at a brewery, a consular center, an 
airfield, and a steel manufacturer, among others--where only 400 
civilians were employed when the base was active.
    In 1997, we completed Economic Development Conveyances (EDC's) for 
property at six closure/realignment bases. Most notably, we signed an 
EDC with the Greater Kelly Development Corporation for Kelly AFB, 
Texas, just two years after the base was announced for realignment. We 
have also reached final agreement on the terms of an EDC with the 
County of Sacramento and are working very closely to complete the 
documentation required to facilitate the transfer of McClellan AFB, 
California, from the Air Force to the County.
            Other Cost Cutting Initiatives
    Additional ongoing cost cutting initiatives implemented or 
investigated in 1997 include: (1) replacing government bills of lading 
with commercial bills of lading for air express cargo shipments; (2) 
using commercial express carriers for small arms and ammunition 
shipments; (3) increasing functionality between Air Force and 
commercial carrier transportation data and software; (4) using express 
carriers to ship classified material; (5) discontinuing volume printing 
of regulations and instructions; and (6) reengineering distribution of 
publications via electronic media such as the internet and CD-ROM.
                               conclusion
    America is an aerospace nation and its aerospace forces are an 
essential element of our nation's military capability. They possess the 
flexibility to fight across the spectrum of conflict anywhere on the 
globe, with the speed and range necessary to halt aggression in its 
tracks.
    America's Air Force will remain a preeminent tool of U.S. military 
power with rapid global ranging forces empowered with stealth and 
precision weapons. We will continue to sponsor research and development 
to exploit the full spectrum of aerospace technology and continue to 
assist all the Services' transition to effective exploitation of our 
space assets. Finally, we will remain a key enabler of U.S. land and 
sea forces by ensuring air dominance, and through robust airlift, air 
refueling, and space support.
    The Air Force has come a long way in the past five decades and has 
an exciting journey ahead. We are laying the groundwork for that future 
today as we execute our contemporary military mission, shape our 
Service for the future, and develop the airmen that will lead us in the 
21st century. This is a journey that will take us into new, uncharted 
territory. And it is one that will benefit every member of the joint 
warfighting team.
                                 ______
                                 
                Biographical Sketch of F. Whitten Peters
    F. Whitten Peters is undersecretary of the Air Force, Washington, 
D.C. He is responsible for all actions of the Air Force on behalf of 
the secretary of the Air Force and is acting secretary in the 
secretary's absence.
    Prior to being appointed to his current position, Mr. Peters was 
the principal deputy general counsel of the Department of Defense where 
he worked a wide range of issues, including acquisition reform, 
countering domestic terrorism, protecting the department's information 
systems and affirmative action. Before serving as a senior executive 
with the federal government, Mr. Peters was a litigation partner at the 
Washington, D.C. law firm of Williams & Connolly, where he specialized 
in complex civil and criminal litigation, including the defense of 
government contract fraud, antitrust, tax and security cases. He has 
extensive experience in representing individuals and corporations in 
compliance and ethics programs, internal investigations and suspension 
and debarment proceedings. He has written and spoken extensively on 
acquisition reform, legal ethics and criminal law issues.
    Mr. Peters and his wife, Monnie, have three daughters: Elizabeth, 
Mary and Margaret.
                                 ______
                                 
              Biographical Sketch of Gen. Michael E. Ryan
    General Michael E. Ryan is chief of staff of the U.S. Air Force, 
Washington, D.C. As chief, he serves as the senior uniformed Air Force 
officer responsible for the organization, training and equipage of 
750,000 active duty, Guard, Reserve and civilian forces serving in the 
United States and overseas. As a member of the Joint Chiefs of Staff, 
he and the other service chiefs function as military advisers to the 
secretary of defense, National Security Council and the President.
    The general entered the Air Force after graduating from the U.S. 
Air Force Academy in 1965. He has commanded at the squadron, wing, 
numbered air force and major command levels. He flew combat in 
Southeast Asia, including 100 missions over North Vietnam. He also 
served in staff assignments at the major command level, Headquarters 
U.S. Air Force and the Joint Staff. As commander 16th Air Force and 
Allied Air Forces Southern Europe in Italy, he directed the NATO air 
combat operations in Bosnia Herzegovina which directly contributed to 
the Dayton Peace Accords. Before assuming his current position, the 
general was commander of U.S. Air Forces in Europe and commander, 
Allied Air Forces Central Europe, with headquarters at Ramstein Air 
Base, Germany.
    General Ryan and his wife, Jane, have four children: Michael, Mary 
Kathleen, Sean and Colleen.

                       Chairman's opening remarks

    Senator Stevens. Thank you very much.
    Mr. Secretary, I note your distinguished record before you 
came to Government and I think we are very fortunate to have a 
person of your background be willing to be Secretary of the Air 
Force. I hope you take no offense when I tell you that when you 
mentioned the fact that you have the power to close bases, in 
an election year, as an Acting Secretary, you send shivers 
through everyone's back. I hope you recognize the difficulty 
that we would have in getting approval of your budget should 
you carry out that threat.
    Now both you and the general have mentioned that you would 
like to close bases. I would be happy to have you give me a 
list of the bases you would like to close. The difficulty is 
that the savings we made out of the last three rounds of base 
closures were more than absorbed by expenditures that were not 
authorized by Congress in deployments to Bosnia and other 
places around the world.
    We have had to reprogram, reprogram, reprogram, and 
reprogram, and we have decided we are not going to reprogram 
anymore.
    Now the real problem with it is we spend more of our time 
and so do the members of the Air Force trying to figure out 
where to get the money that has been spent without 
authorization, how to reshuffle accounts, than we do in trying 
to figure out what to do for modernization.
    I believe we are going to have to close some bases. But 
until we see some action with regard to McClellan and Kelly, 
which were kept open during the election process by the 
President as a candidate, I don't think you are going to get 
support for the BRAC process.
    Now the idea that we should be berated about not closing 
bases at the beginning of a hearing on how can we find the 
money to continue right now with this supplemental just 
crossing my desk, the only way we are going to swallow that is 
to declare it all emergency. I really think that we are 
jeopardizing the future of our modernization program if we do 
not make savings. I don't think it is clear yet that the only 
saving we can make is through base closures.
    I come from a State that was the only State in the Union 
that was invaded in World War II, and one of the reasons it was 
was its bases were denuded in the long peacetime period before 
World War II.
    If you want to talk to me or the Senator from Hawaii about 
readiness, we would be happy to quote some history to you.
    The difficulty I have right now is I don't know where we 
are going to find the money for modernization and I agree we 
should make savings. I would urge you to start looking at some 
of the things we have been talking about up here and that 
includes consolidation of functions. Consolidation of bases 
really has not given this committee any money to shift around 
to the modernization program--none.
    We have not had $1 go from base closures into 
modernization. I would be glad to have you prove that and if 
you want to look at it, I will show you the figures. We spent 
more money, as I said, in unfunded, unauthorized operations in 
Bosnia and other activities, such as we are now spending in 
Iraq. But we are going to cover that with this emergency 
funding and I hope Congress will join in the emergency.
    But I would urge you to stop complaining about base 
closures and start telling us how to save money in other areas. 
For instance, we maintain training schools for pilots. Each one 
of the services does, and for the same aircraft. Why shouldn't 
we consolidate those functions? What have the services done 
about consolidation of functions rather than consideration of 
bases?
    I do not think consolidation of bases automatically saves 
money at all. One thing that bothers me right now is, if we 
look at what is going on right now, General--and you mentioned 
it in your statement--we now have four times greater OPTEMPO 
than in 1989, but with one-third less end-strength. We now have 
had 33 percent of the active pilots completing tours reenlist. 
I think that is the lowest since I entered the Congress.
    Under those circumstances, it seems to me that morale, 
which would be highly disturbed, Mr. Secretary, by a political 
decision to close bases, as opposed to one that was based on 
the Base Closure Commission, it seems that morale is going to 
be affected by bases being closed without the proper process 
being followed.
    So I hope we have heard the last of that, Mr. Secretary--
again, respectfully. I do not want to be threatened again. And 
I think the committee feels threatened by that concept.
    Our budget covers specific bases. If you want to close 
some, I would urge you to tell us what you want to close. We 
will help you. If you want to close some bases, we will do it 
in the 1999 bill. But tell us where they are and why and stop 
telling us that we ought to do it without telling us where you 
want to do it.
    General, I really think the problem about pilot retention 
has a lot to do with the overall pay scale now as compared to 
private aircraft, private concerns, and the way they are hiring 
away your pilots. I would like to see you give us a suggestion. 
We had to cover this once before with the doctors in the 
military. We had to cover it before with scientists in the 
military. Why shouldn't we face the fact that if you are going 
to keep the top grade pilots, we have to pay them more?
    I would urge you to give us not just the incentive pay 
concept or the reenlistment bonus concept, but raise their pay 
across the board. I have talked to several of these young 
people. They left because they felt their families would be 
better off. They are passing their prime years flying in the 
service and they didn't feel the compensation was high enough. 
I think the Congress would be ready to adjust the pay of pilots 
to meet this problem of retention.
    Last, the one thing that really worries me right now, Mr. 
Secretary and General, is the report from Europe that at least 
two fighter squadrons were not able to maintain readiness, were 
redlined too often, and were not capable of meeting the overall 
goal of the Air Force, particularly when deployed. It is bad 
enough to have that happen here at home. But if it is true that 
there were two fighter squadrons in Europe that could not 
maintain their aircraft availability because of lack of spare 
parts, I think something has to be done about the logistical 
concept of distribution of parts and their availability. We 
would be happy to work with you on that.
    I would hope that, above all, once we deploy forces 
overseas, they are not shortchanged with regard to parts. That 
report was very disturbing to me when it first came in.
    If you have any comments about what I said, I would be glad 
to let you comment. But I have to tell you that that article 
disturbed me no end.

                        Funding request overview

    Mr. Secretary, do you have any comment?
    Mr. Peters. Senator, the point of the discussion that I had 
and also to a certain extent that General Ryan had at the Air 
Force Association [AFA] last week was clearly that BRAC is the 
right way to go if we are going to reduce infrastructure 
because it is the way that is best for the communities that 
have supported the military for so many years.
    There really are three reasons at this point why we think 
we need to be able to close bases. Money is one of them but is 
not necessarily the most important. There are two other reasons 
that are really critical.
    First, with respect to our forces, we are at a point now 
where, as General Ryan said, the forces who are left at home 
are working very long hours because the number of people left 
on the bases from which our deploying squadrons leave are not 
large enough to maintain the base during the time of 
deployments.
    We think we have the right overall force structure, but 
what we need to do is put those forces on fewer bases. Now that 
can be done, obviously, without closing bases. But it also will 
stress the bases from which we take those people and probably 
we would be better, rather than stressing a lot of bases, 
simply to close several and go on from there.
    Second, as the GAO has noted in recent studies and as we 
have looked at in our own planning process, it makes sense to 
try to consolidate our aircraft into larger units. Again, that 
requires taking units off of bases and moving them.
    In the QDR we have looked at both of those options and some 
of the QDR numbers actually depended on taking significant 
numbers of aircraft off of bases and relocating them. When we 
went down and talked to Secretary Cohen about that for this 
year, for the fiscal year 1999 program, a decision was made 
that we would not do that in favor of trying to get a BRAC 
process.
    These are really important things we are going to have to 
do. If BRAC is simply not going to happen, we have to look at 
other ways as best we can to consolidate forces and to 
consolidate aircraft.
    For example, one of the places where we had hoped to get 
modernization aircraft for the National Guard was by taking 
them out of an active duty fighter wing. We have not done that. 
We still need to look at that. The best way to do that would 
probably, again, be to actually close a base and simply take 
those aircraft and move some of them off to the Guard.
    That is where we are. On the money, we believe we have made 
about $5.6 billion off the BRAC rounds for the Air Force and 
that number goes through 2001. That is the net number. Some of 
those savings will continue to go on for many years. There is 
no question that that money has not gone all for modernization. 
But we still need to be able to get that money.

                          Environmental costs

    Senator Stevens. Hasn't any of it gone there? We spent more 
than $8 billion in Bosnia. We have had to put that up. None of 
it--I take that back--about $1 billion was requested, finally, 
last year. But at least $7 billion was spent against $5.6 
billion in savings.
    I don't see how that has gone to modernization. Until we 
find some way to assure that the money that we save is going to 
go into modernization, I think that is another problem we have 
with BRAC. I would like to put it into an account so that you 
can only use it for BRAC. We have to look at that in terms of 
amending the BRAC law.
    I hear you. Mr. Cortese reminds me that the bill is still 
not in on the environmental costs on the bases we closed. It is 
probably going to exceed the savings by the time we are 
through.
    Mr. Peters. The number I just gave you is based on our 
estimate of the environmental costs. That is the net above 
environmental costs through 2001. We think we are going to be, 
in the Air Force, net over $5 billion, including the 
environmental costs. We actually have turned to net savings at 
this point. There was an up-front cost for environmental. There 
is no question about that. There are continuing costs. But our 
estimate is that by the end of 2001, we will be net positive in 
the Air Force of about $5.6 billion.
    Senator Stevens. We hear you. I know we have to get some 
money from somewhere. I don't like this budget. This budget 
from now to the year 2003 is not going to increase despite the 
fact that we are going to start building up a surplus before--
you know, it's not really a surplus in the overall connection 
of the national debt. But the balanced budget goal was 2002 and 
it is balanced now.
    I think part of that came from the fact that we paid 
peacekeeping costs out of defense and we don't have the money 
for modernization that we should have had.
    Now I hope also to have something to say about whether that 
happens again.
    Again, our problem is how to get the money to help you. I 
don't think you are going to get it in terms of the money we 
need for modernization, base closures, particularly with the 
forces deployed overseas the way it looks like they still are 
going to be, for an indefinite period ahead, if I understand 
what the President said. I don't know how you are going to move 
those savings into anything other than paying the costs of the 
deployments in Bosnia and Iraq.
    So this is a tough one for us.
    Senator Bond.

                                F-15A's

    Senator Bond. Thank you very much, Mr. Chairman.
    General Ryan, I raise an issue concerning our National 
Guard general purpose squadron. I understand the procedural 
restrictions on upgrading F-15A's, but there are A's out there 
which still have a lot of life on them, and as I understand it, 
many of them with more life than some of the early model F-
15C's.
    Now I understand that the Air Guard F-15A to F-15C 
replacement program the Air Force anticipates will be forced to 
the right, extending the sunset date of the F-15A because of 
other procurement problems. There are, as we know, Guard units 
out there right now and will be for the foreseeable future.
    Is there anything we can do to help with an F-15A system 
upgrade, such as accelerating an installation of fighter to 
fighter data link to bring them to tactical parity with the 
rest of the Air Force TACAIR inventory? Do you see any way to 
speed up the process to take advantage of the experience of 
Guard pilots when they are asked to integrate with other 
deployed units of the total force?
    General Ryan. Senator Bond, we continually look at the 
force structure out there in our Guard and Reserve units and 
try to make sure, as best we can, that they are compatible with 
the active force because we intermix them all the time, as you 
well know.
    We have looked at the F-15A models. Extending their life 
for a significant amount of time would cost about $11 to $15 
million apiece. We will continue to look at that as we look at 
what happens to our force structure as we move out and how our 
budgets are approved.
    But, as you know, we are committed to making sure we have 
the interoperability. In this year's budget with our Guard 
forces we increased the amount of data links that we are going 
to have on our aircraft. We eventually want to get to everyone 
being compatible with Link 16. In the meantime, we are doing 
EPLRS on our F-16's in the Guard. We are increasing their 
capability for precision guided munitions. We will go back and 
look at the A models in light of what our force structure will 
be in the future to see if there is something we need to do to 
that force if modernization pushes out to the right. If it does 
not push out to the right, then the A-B models fall into that 
timeframe where we cannot upgrade.
    But I will give you an answer for the record.
    [The information follows:]

                                F-15A's

    The USAF is aggressively pursuing force structure 
modernization programs. As a result, we expect the conversion 
of F-15A's to F-15C's to occur on schedule. Instead of 
modifying the F-15A's, we will continue with plans to upgrade 
to F-15C's in anticipation of their introduction into the 
National Guard.

                            Pilot readiness

    Senator Bond. I appreciate that. Obviously, we want to see 
the schedules maintained. But around here, I have only been 
here for a couple of years and I have seen schedules tend to 
slip, particularly when you have as many other requirements as 
our chairman has just mentioned on it.
    I mentioned some ideas about pilot training and readiness. 
Do you have any thoughts on that?
    General Ryan. On our pilot training, as the Secretary 
mentioned--correction--as the chairman mentioned and the 
Secretary talked about, our pilot retention numbers are not 
what they ought to be. We have polled our people and asked them 
what is it that would increase your proclivity to stay with us.
    You have to remember that these men and women are the 
people who have already served 9 years in our service. Most of 
them have families. Most have been deployed to the desert 
multiple times. They are looking for stability in their lives 
as much as they are looking for anything else and that their 
families be well taken care of.
    We are working those issues as hard as we can. We have cut 
down on the deployment time that they are gone to 45 days so 
that they do not lose their skills. We have, with the 
governments in the region, Turkey and Saudi Arabia, been 
allowed to train there, not just do figure eights in the sky. 
Turkey has allowed us training days each month for our forces 
to go out and train as they need to and we have gotten similar 
capabilities in the gulf.
    That is not as much of a problem as it was before.
    We think that the bonus, that the committee was very 
instrumental in helping us get, has kind of stemmed the tide. 
What we are looking for is something to turn it back around.

                               The Tunner

    Senator Bond. We will want to follow up on that. I have 
just one very quick, last question.
    Could you give me your views on the performance of the 60-K 
loader and your near-time procurement strategy?
    General Ryan. You know, we call it the ``Tunner,'' named 
after General Tunner, who ran the Berlin airlift and, in fact, 
flew the Hump. I was with his wife 4 or 5 days ago, a marvelous 
woman, who herself is an aviator.
    The Tunner is probably a huge step forward for us because 
of its capability to move equipment from high loads to low 
loads quickly and reliably.
    Senator Bond. Is it working well?
    General Ryan. It is working great. We have not had any 
problems with it and we are going to buy 300-plus of them and 
put them around the world to help with our mobility throughput.
    Senator Bond. I would like to help you with that.
    Thank you very much, General.
    Thank you, Mr. Chairman.
    Senator Stevens. Senator Cochran.

                            Quality of life

    Senator Cochran. Thank you, Mr. Chairman.
    General Ryan, you mentioned that the biggest problem the 
Air Force faces is retaining pilots. You pointed out the 
numbers to illustrate the problem. I wonder, given the fact 
that you said you were trying to deal with housing problems and 
other quality of life issues to try to help retain pilots, how 
does that coincide with the low amounts being requested for 
family housing, military construction, and the other things 
that you really need to do in order to improve these quality of 
life situations? I notice that the military construction 
request, for example, is down $160 million in terms of National 
Guard and Reserve military construction.
    The other part of the budget is down $332 million from the 
fiscal year 1998 budget. The family housing budget is down $100 
million from the funding level of 1998.
    Do we need to add more money for these items?
    General Ryan. As we worked our way through our budget, what 
we tried to do, was balance the modernization and the readiness 
accounts along with our people and our quality of life. Those 
were our three main pillars.
    No; it is not what we want. It is not what we think our 
folks deserve. But it was what we had to distribute in our 
budget and we tried to do it in a very balanced manner.
    We are looking at other ways to leverage that money, too, 
and that is in the private sector, particularly with family 
housing, to be able to partner with local communities and the 
capability to renovate homes, and then be able actually to do a 
rental agreement.
    We have several tests of this going on in Texas, at 
Lackland. We are doing this with a group of houses to give us 
more leverage on the money we have.
    But, to answer your direct question Senator, we would like 
to have spent more money in our quality of life side. We will 
always want to spend more money on our quality of life side to 
take care of our folks.

                             Pilot training

    Senator Cochran. One other impact that is possible from 
this is the pressure on pilot training facilities. At Columbus 
Air Force Base in Mississippi, for example, I am told that they 
may need to increase their pilot production by over 225 percent 
to train new pilots to take up the slack from those who are 
retiring early. This is over a 3-year time period, from fiscal 
year 1996 to fiscal year 1999, a 225-percent increase.
    Are there funds in this budget request that will help deal 
with the problem at the pilot training bases?
    General Ryan. Yes; we have looked at our pilot production 
to ramp it from our low several years ago of about 500 pilots a 
year for the active duty force up to 1,100 pilots for the 
active duty force by the year 2000. That is a big increase.
    Quite frankly, we made a mistake in the Air Force in our 
drawdown when we cut our pilot training back. It was not a 
smart thing to do. Now we are suffering some from that 
decision.
    We have in the budget the capability to ramp. In the 1999 
budget, included in there is our ramp-up in pilot training. We 
are still studying how to get to the 1,100 number which 
includes expanding our pilot base to include other bases, other 
than the current pilot training bases.
    We have worked with the Navy, to answer your question, Mr. 
Chairman, in increasing our capability with them. As you know, 
we are jointly training our pilots with the Navy right now. The 
Army does all of our helicopter pilot training. So we have 
combined these functions as best we can in ramping on up. We 
are buying a common airplane, a JPATS airplane, for the Navy 
and the Air Force and we are looking for every opportunity to 
produce pilots.
    If you look at the numbers right now, if the Army, Navy, 
Air Force, and Marine Corps let every pilot go who was eligible 
to leave, that would not one-half fill up the bucket of the 13 
major airlines' needs over the next 10 years. So we are in a 
deficit war here for the service of these folks.
    The airlines are hiring mightily and they will continue to 
hire. If you look at it with the commuters, it does not even 
come close to one-quarter of the requirement. This is a 
national problem, not just an Air Force problem.

                             Airborne laser

    Senator Cochran. Mr. Secretary, both you and General Ryan 
mentioned the fact that you had put money in this budget for 
the Airborne Laser Program. The amount is $292.2 million. Is 
the fact that the Air Force is willing to put this in their own 
budget an indication of how important this program is to the 
Air Force and the capacity to defend against missile attacks?
    Mr. Peters. Yes, it is, Senator. It is a very important 
program to us. We think it is on track. We have looked at the 
various test results we have gotten. We think we are where we 
need to be and that we, in fact, are going to be able to test 
this thing in the air in 2002, which is the goal.
    This is the only program we have at the moment in the 
theater missile area which can knock a missile down in the 
boost phase. It also has important collateral benefits in terms 
of tracking missiles as they come up. Information about 
missiles, the leakers that get through, can be given back to 
others, the theater missile defense [TMD] units, and it is a 
very, very important program for us, one that I think is 
essential both for force protection and also as an enabler for 
the other theater missile defense systems.
    Senator Cochran. Is the amount of money available to you 
related to the date of deployment of the weapons system? In 
other words, if we appropriated more money than you requested, 
would that accelerate the deployment schedule and further 
enhance the protection of our forces?
    Mr. Peters. I believe the answer at this point is no, that 
we are technology driven and research and development driven 
through 2002, which is what we need to get to. We really need 
to make sure this works correctly before we invest additional 
funds. But I think we are where we need to be through the 2002 
date.
    Senator Cochran. As I understand it, one of the attractive 
aspects of this system is that you are able to attack a missile 
in its boost phase and that this enhances the ability to 
protect against damage, destruction from hostile weapons. Is 
that one of the driving forces, one of the reasons why this is 
such an attractive option for us?
    Mr. Peters. Absolutely, Senator. This is the only boost 
phase intercept program we have ongoing at the moment. As we 
worry more about weapons of mass destruction, we certainly 
would like any weapons of mass destruction to fall back on the 
shooter rather than on our forces.
    So this is very critical to us. It looks like the only 
technology right now that can do a boost phase.
    Senator Cochran. Somebody in the Secretary of Defense's 
office has criticized this program as being susceptible to 
problems because of atmospheric turbulence. Is that a realistic 
criticism? Is that based on science or supposition?
    Mr. Peters. In this area it is based, we believe, on some 
early test results which we believe our data collection efforts 
have disproven.
    There are technologists on both sides of this argument as 
to what extent the laser beam will be defracted and made 
turbulent by the air that it has to shoot through.
    We had set some minimum parameters. We believe, based on 
data we have collected around the world, that the turbulence we 
are going to experience is within those parameters. We believe 
that the measures we have to correct for that turbulence are 
right where they need to be.
    So at this point, it is our sense that the only way you are 
going to be able to resolve this argument is by putting an 
airplane in the air, shooting the laser, and seeing what 
happens. I think we are in the area where you can argue about 
it or go try it. We are at the go try it place at this point.
    General Ryan. I would say that that argument is also 
waning. We have had multiple investigations of the phenomenon 
of refracting the beam as it goes through and most of the 
serious scientists now say yes, we've got it pretty well 
solved.
    Senator Cochran. Thank you very much, General.
    Thank you, Mr. Secretary.
    Senator Stevens. Senator Harkin.

                            Pilot retention

    Senator Harkin. Thank you very much, Mr. Chairman.
    Mr. Secretary and General Ryan, I just have two things I 
want to cover. First is on the retaining of pilots. This has 
always been a problem. It has been a problem since I was a 
pilot in the Navy. You get trained and you find out that you 
can get more money on the outside, that things are more stable 
in the civilian world. You are always going to have that 
problem in a free society and in a market economy. This is why 
I have always advocated that we pay more attention to our 
Reserve forces and our National Guards.
    I was a Navy pilot. I left the Navy. I joined the Reserves. 
I flew every weekend. I put in 4 weeks of active duty every 
year. I was better trained and qualified in the Reserves than I 
was on active duty at the cost to the taxpayers at one-third as 
much money.
    I did not have all of the collateral duties and I was not 
training to be CNO or anything else. I just wanted to fly an 
airplane. So I think we shortchange a lot of our Reserves and 
our National Guard forces.
    A lot of these pilots that are leaving the Air Force, just 
like they are leaving the Navy, want to continue to fly. They 
like to sit in that seat. They could do that in the National 
Guard and in the Reserves at probably one-half, no, one-third 
as much of what it costs us to keep them on active duty.
    We ought to be focusing on that and provide that kind of 
structure for them because they can be called up and sent into 
active duty at any minute as well qualified. General--I am sure 
you will agree with me.
    General Ryan. Yes, sir.
    We are talking from the same sheet of music. We are trying 
to hire every one of those folks who come out of active duty 
into our Guard and Reserve forces. Our Guard and Reserve force 
in the Air Force provide us with integral capabilities that we 
use all the time. In fact, we are stressing those forces fairly 
heavily right now.
    We are using our Guard and Reserve forces to the maximum 
extent that they think they can sustain right now.
    Senator Harkin. That they can sustain?
    General Ryan. That they can sustain.
    Senator Harkin. I think our job is to give them an ability 
to sustain even more. That's what I am saying. They may be at 
their limit. I am just saying that I don't think that limit is 
enough right now. That is my point. I am saying that as a 
policymaker.
    We have a lot of people out there who are qualified pilots 
who are leaving, who we could keep in the force. I know them. I 
know what they are like. I know where their heads are.
    General Ryan. Yes, sir; and we are trying to recruit every 
darn one of them to come to us into the Guard and Reserve.
    Senator Harkin. And I'll bet you that it is not too hard to 
recruit them for Reserve duty or National Guard duty, either.
    General Ryan. Yes, sir.
    Senator Harkin. Do you think it is hard?
    General Ryan. In our Guard and Reserve, we have two 
different kinds of pilots. We have pilots who are full-time 
pilots with the Reserve.
    Senator Harkin. Right.
    General Ryan. About one-third of our force, our Reserve 
forces are full time.
    Senator Harkin. I understand.
    General Ryan. The other two-thirds----
    Senator Harkin. Are the weekend warriors and stuff like 
that.
    General Ryan [continuing]. We can get the weekend warriors 
pretty well. What we are having trouble getting, and the 
Reserves and Guard are working very hard on, are those folks 
who are full time, which is a similar problem that we have.
    Senator Harkin. I understand that.
    General Ryan. They are the backbone that holds those units 
together as the part timers come in and out.
    Senator Harkin. I understand that problem. I would like to 
know what we can do to help beef that up, because those people 
tend to be more stable. They are located in a community. They 
are not moving around, they are not deployed. So what can we do 
to entice more people into that line and then help beef up the 
weekend warrior situation?
    General Ryan. One of the things that we look at very 
carefully is not so much how much the Guard and Reserve can 
help us in our two major theater war paradigm but how much the 
Guard and Reserve can help us with our OPTEMPO right now. That 
is the driver.

                              Recruitment

    Senator Harkin. I understand.
    There is one other issue that I really wanted to cover with 
you. I am not going to get into weapon systems and all the big 
ticket items that you have.
    I was reading your posture statement and on page 17 you 
discuss recruiting quality people. You say that recruiting 
remains a challenge. U.S. commitments abroad have decreased the 
pool of interested, qualified, potential recruits. Annual youth 
attitude surveys show the interest of young men serving in the 
Air Force has dropped from 17 percent in 1989 and stabilized at 
12 percent.
    Well, General, Mr. Secretary, since World War II, we have 
had an organization in the Air Force that develops leadership, 
discipline, motivation, interest in aviation, and flying. It is 
called the Civil Air Patrol [CAP]. And yet, for the last 13 
years that I have been in the Senate, the Air Force has been 
treating it like an illegitimate child--get rid of it, ignore 
it, shunt it aside, defund it, everything else.
    Mr. Chairman, the Air Force now is supporting, as I 
understand it, establishing the Civil Air Patrol as a grantee 
organization under OMB Circular 110. That would require the 
Civil Air Patrol to apply for funds through a grant review 
process and not be a part of, or receive funds through, the DOD 
appropriations process. This would make the Civil Air Patrol a 
nongovernment organization, similar to a hospital or research 
laboratory and would move the CAP from its present position in 
the Air Force budget process.
    I just want you to know that I am absolutely, totally 
opposed to that. I look at your budget request on Civil Air 
Patrol and it goes down every year. In 1997, 1998, and 1999, it 
went from $19 million down to $13.9 million. I have to tell you 
that I think you are going in the wrong direction.
    Do you want to get young people interested?
    I had breakfast not too long ago with a man that I met 
recently, a very, very successful business man in Baltimore, an 
African-American. I was having breakfast with him and I said 
well, I have to leave now because I have a group of kids over 
on the Capitol steps who are CAP kids from Ohio. He said oh, 
the Civil Air Patrol. He said you know, I would not be where I 
am today, when I was stuck in the inner city of Baltimore, if 
it had not been for the Civil Air Patrol. He said that is what 
gave him the discipline and the motivation to succeed in life.
    So I went over to the steps of the Capitol and met these 
kids from Cleveland, OH. The more I think about it, the more I 
think we are missing a great bet here. There are kids in these 
inner cities that need this, that want it, and it is not a big 
buck item.
    If you want to increase the pool of young people that are 
motivated and that have an interest, this is where it is, 
General. This is where it is, Mr. Secretary. It is a small 
item.
    And yet I have fought for 13 years in this Senate to keep 
the Civil Air Patrol alive, to keep it in the Air Force, to 
keep it from being shunted aside, to give it new duties and 
responsibilities.
    A few years ago, we gave it the responsibility of drug 
interdiction and they have done a remarkable job. I keep 
pointing out the Civil Air Patrol can fly 1 hour of drug 
surveillance--oh, I don't know my figures right now--but it was 
at like $40 an hour, something like that.
    First of all, what you get is your pilots, General. They 
are out of the Air Force, they are flying for the airlines, 
they are in business, they are weekend warriors, and they love 
to go out and do this. They volunteer their time. They take 
their own cameras and we buy them the gas. It costs $40 an 
hour.
    For the same National Guard helicopter in Iowa to do drug 
surveillance in Iowa is like several hundred dollars an hour.
    Look at the recent A-10 crash in Colorado, for the benefit 
of you people out there. For that A-10 crash in Colorado, 
people searched high and low. The Air Force searched and 
everybody searched. Who found it--the Civil Air Patrol.
    Eighty-five to ninety percent of all of the search and 
rescue done in this country is done by the Civil Air Patrol, 
and quite successfully, too.
    So every year I give this speech. But this year I am hotter 
on it than I have ever been before because, hopefully, we have 
some new leadership down there. I hope you will take a look at 
that budget. It is just wrong when you are going from $19 
million down to $13 million.
    Here is the Air Force on rescue and recovery services at 
$46 million last year. The Civil Air Patrol was $2.1 million, 
and yet it is the Civil Air Patrol that does 85 to 90 percent 
of the search and rescue in this country. I have to ask what is 
that other $46 million going to the Air Force for?
    I just hope that we will take a new look at the Civil Air 
Patrol. I want to know what your intentions are in terms of 
shunting it off and making it a grantee organization. If that 
is where you are headed, you are going to have a battle. I may 
be alone in it, but you are going to have a battle because I am 
going to fight it.
    I think you could not say it better than in your posture 
statement. You want young people, motivated, interested in 
aviation. The Civil Air Patrol is the pool out there from which 
you can get them. I will just leave it at that.
    Mr. Chairman, we need summer camps for Civil Air Patrol. We 
need weekend activities for kids in inner cities to go out to 
our bases and be involved in Civil Air Patrol. Yet we are not 
doing any of this.
    I think it would be a great recruiting technique plus it 
will answer a lot of the problems you are going to have in the 
next 20 to 30 years for recruiting people.
    I have had my say. I would like to hear your response.
    General Ryan. First of all, sir, you are striking a chord 
with somebody who used to be a CAP cadet. I was in the Civil 
Air Patrol when I was a teenager.

                            Civil Air Patrol

    Senator Harkin. Where are you from?
    General Ryan. At the time, I was living in Nebraska, in 
Omaha.
    Senator Harkin. Interesting.
    General Ryan. I had the leadership of the CAP in and sat 
down and talked to them about where we are going with the CAP. 
I have asked the Commander of Air Education and Training 
Command to come back to me and tell me how we can revitalize 
the program. I have asked our folks in the air staff to tell me 
the ins and outs of why we are going with the circular 110 
definition of whether this is a grant or is direct funded in 
our budget kind of activity. It does not make a lot of sense to 
me that we change horses in the middle of the stream because of 
a legal interpretation. And if it is a legal interpretation, I 
would like to come back to you and see if we can get 
legislative relief so that we can directly fund the Civil Air 
Patrol.
    I would like to meet with you also and talk about our Civil 
Air Patrol and how we can revitalize it. I am committed to 
that.
    Senator Harkin. I would look forward to that. I would love 
to sit down and talk with you about it. You have been involved 
in it for a long time. I didn't know you were a cadet. That is 
interesting. That's great.
    Mr. Peters. Let me add to that, Senator. In the 95 or so 
days that I have been the Acting Secretary, I have been to CAP 
functions twice, including the Martin Luther King function here 
at Andrews, where we brought many of these inner city kids from 
the District of Columbia out to Andrews for an evening. There 
are some very, very dedicated people there.
    Senator Harkin. That's right.
    Mr. Peters. We intend to continue to fund this. I have beat 
up my general counsel, as recently as this morning, saying that 
we have to get this resolved because we need to know a 
definitive answer from OMB one way or the other, and if we need 
legislation to make this continue, we will try to get that.
    Senator Harkin. If you do need legislative relief, we ought 
to discuss that and we will come up with it. Again, I would 
like to talk to you about your projected budget on Civil Air 
Patrol and what you are looking at in the future. I don't like 
what I see in here.
    Let's see what we can do to revise that. I would like to 
meet with you about that.
    Mr. Peters. Yes, sir; we'll get together.
    Senator Harkin. Thank you very much, General, Mr. 
Secretary.
    Thank you, Mr. Chairman.
    Senator Stevens. General, I would like to be included in 
those as an ex-Civil Air Patrol legal officer, as you probably 
know, but beyond that, as a pilot, too. The Senator was 
mentioning primarily young people. The search and rescue in my 
State is done by reservists and National Guardsmen who also 
volunteer as Civil Air Patrol. There is a bifurcated function 
there that we have to preserve.
    I welcome his comments about the outreach for pilots, and I 
notice your comment about increasing pilot training. I just 
think we ought to open up the doors and train more people. We 
cannot get by with allocating the shortage among the services 
as far as I can see.
    Senator Dorgan.

                             Airborne laser

    Senator Dorgan. Mr. Chairman, thank you very much.
    Mr. Secretary and General, welcome.
    That question was asked of you a few moments ago on the 
airborne laser. I would like to just add to the question. There 
was a GAO report, critical of the program, and the press picked 
up on it.
    Would you give me your impression of the criticism and what 
the Air Force is doing to respond to it?
    General Ryan. When I first came to this job, I tried to get 
heavily into ABL. I have had people from laboratories come and 
talk to me. I have had the testers come and talk to me. I think 
the program, the criticism of the program, was based on lack of 
facts. I think the facts are in now and you don't hear the 
criticism that you heard before.
    The facts are that the physics of the capability are there. 
We think we can do it. We have done the sampling, we have done 
the testing, we have done the warping of the mirrors, we have 
done the hard physics work to make this a viable program. What 
we are really looking forward to now is how to mechanize it so 
we can put it on the aircraft and fly the aircraft and do an 
airborne demonstration. That would happen in the year 2002.
    We are well on course to that. It is a great capability. We 
should not be stuck in the defense of our folks in rear areas, 
in theaters where ballistic missiles are a threat, to being 
only able to catch them as they come in. We need to be able to 
go out and attack them where they are on the ground and catch 
them airborne in a whole series of defensive layers.
    We think this is a vital capability and we think it is 
going to work.

                             Tanker forces

    Senator Dorgan. The only reason I asked the question is the 
criticism that was leveled had real wings. I mean, it took off 
and was repeated and continues to be repeated.
    I would encourage you to move aggressively in response to 
it because it is an important program.
    Thank you for your response.
    General, your predecessor, General Fogleman, was very high 
on the concept of basing the Air Force's tanker aircraft at 
core tanker bases. Has that thinking changed or are you pretty 
much in line with General Fogleman's thinking on that?
    General Ryan. We have our tanker forces both stationed in 
theater and in the United States. But yes, we are trying, for 
efficiency's sake, to keep them in fairly large piles. That is 
still our motivation.
    Senator Dorgan. So the concept of the core tanker base----
    General Ryan. Is still there.
    Senator Dorgan. Let me ask a question about the Iraqi 
crisis.
    We had a lot of questions about basing options for aircraft 
with respect to any potential operations in Iraq. The question 
of where we might and might not be able to base certain 
aircraft in dealing with the Iraq crisis was something that was 
publicized widely. I would like to know if the Air Force was 
satisfied with the basing options that were available to it 
during the most recent crisis. If not, does that suggest a need 
for more long-range airpower?
    General Ryan. I was happy with the basing options that we 
were presented with. What was unclear was whether we were going 
to be able to use the bases where we had the aircraft bedded 
down to prosecute an attack. That was the real issue.
    Though there were declaratory statements made by many of 
the governments over there, we never came to a conclusive 
decision on whether those aircraft would be used or not. I was 
over in the theater not too long ago and traveled to all the 
countries where we had our Air Forces bedded down and talked to 
the leadership there. For the most part, they were very 
supportive, Kuwait particularly.
    We will always, I think, need access to bases in regions 
where we have potential conflict. If we do not have access to 
those bases or do not have allies in those areas, then our 
long-range capability will be stressed--not only our long-range 
capability in bomber capability, but our ability to extend our 
forces out using our maritime forces also.
    So there is always this balance that you will have to go 
through with that kind of activity. Each one of these has a 
different flavor.
    What we would do in Bosnia is much different than what we 
would do in Iraq, and perhaps in the Korean Peninsula, and how 
we would apply the forces. So each one is different.
    One of the problems with our long-range capability is the 
cycle times that we need, particularly with our bomber forces, 
in which I know you are very interested.
    To be able to project the power from the continental United 
States, that far, and back is something that we can do. And we 
have a very good bomber force to do it.
    But a sustained effort requires access closer. I would like 
to move the bombers in closer, quite honestly, to where we can 
get these cycle times down and use the full capability of the 
bombers.

                             Report status

    Senator Dorgan. Well, our B-52's have moved to Diego 
Garcia, and the cycle times from that island would not be too 
high. But, I would like to submit for the record some further 
questions on the bomber force, with the chairman's permission.
    Let me ask Secretary Peters one additional question that 
relates to the question that the chairman asked on base 
closings.
    The Congress has prohibited the formation of another BRAC 
Commission until the Pentagon submits a report back to the 
Congress. I offered the amendment in the Senate, which is now 
law, that required the report.
    It is not a message to the Department of Defense or to the 
Air Force that we will not be supportive of downsizing or base 
closing in areas where we have facilities that are unneeded. We 
understand all of that. But the Congressional Budget Office has 
indicated that we do not have currently a very good method or a 
very good system of determining what the costs and the benefits 
have been of the base closures that we have already done.
    We have ordered the closing of about 100 bases. Well over 
one-half have now been fully closed. The Congressional Budget 
Office says we would be very unwise to proceed until we 
understand what it is we have done and what the consequences 
are of what we have done.
    On that basis, we decided, despite a call for more base 
closing rounds, to stop and ask for a complete report and an 
evaluation of what have we done, what has been done, what have 
been the costs and benefits.
    Can you respond to that and tell us where you are in the 
process of trying to gather together these facts and the 
information for Congress?
    Mr. Peters. Yes, sir.
    Secretary Cohen intends to try to submit that report, I 
think, in the April timeframe. We have also had the DOD 
inspector general and in the Air Force our own audit agency 
going out to look at these costs.
    The DOD inspector general has been working this and, in at 
least one of the years--I don't know which one--has found that 
our costs were actually less than estimated and our benefits 
were actually greater than estimated. But that data collection 
effort is going on right now.
    I know that because the Air Force is a couple of weeks 
overdue in providing the data, which I am reminded of almost 
daily. I believe that report will be coming in the April 
timeframe.
    Senator Dorgan. What kind of overcapacity do you think 
exists, Mr. Secretary?
    Mr. Peters. At this point, we have not actually figured out 
exact numbers. But it is clear to us--and we have asked our 
planners to go back and look at this--that, as we become more 
of an expeditionary Air Force, we need to have larger bases.
    In the POM cycle we currently are in, we have tasked our 
planners to look at consolidating and reorganizing various 
forces, including, for example, where training occurs and who 
does it: Active, Reserve, or National Guard. We have also asked 
them to come back to the Chief and me with a plan for how we 
would plus up these highly stressed forces, such as security 
forces and mechanics.
    We will have that in the POM 2000 cycle. We are going to 
try to resolve a lot of those issues. That is where we are.
    We know, though, from the QDR experience that we needed to 
take out one more active fighter wing in order to get aircraft 
for the National Guard. We did not do that because the 
Secretary felt that it was more important to try to go for a 
BRAC round. What we had planned to do was to pull substantial 
assets off of several bases. But doing that without BRAC is not 
the first choice.
    So we know that, even to reach our QDR targets, we have to 
take a substantial number of aircraft off of existing bases.

                             BRAC planning

    Senator Dorgan. General Fogleman was remarkably candid last 
year when I asked him about this issue. He said well, I won't 
be here when the next round occurs. But he said if I were doing 
it, I would probably call for only one additional round. That 
was at odds with what had been discussed publicly.
    Have you any comments on that?
    Mr. Peters. We are looking at our planning process right 
now. Our sense is that it will take two. But we are looking 
right now at trying to come up with an overall concept for what 
people have nicknamed superbases, that is, a base from which we 
could have substantial assets deployed without ruining the 
quality of life for people still left on the base.
    In other words, we would like to avoid having our security 
forces who are left at home go to 12 hour shifts when we deploy 
with security forces overseas. So we are looking at that right 
now to try to come up with a better sense of exactly what 
skills those are, how many we need, and what their best 
locations would be.
    General Ryan. One of our problems in our previous drawdown 
was, conceptually, what kind of Air Force were we going to be, 
going into the future. It has evolved that we are very much an 
expeditionary Air Force. We are going to be called to go 
overseas, provide our own force protection, provide our own 
living conditions, not live on the economy because of the 
seriousness of the threats that are out there from terrorists 
and others.
    Given that paradigm, we are not structured for that kind of 
activity. We are spread very thinly around a lot of bases. We 
need to bulk up so that not only the forces but the 
infrastructure for the base is of sufficient size to keep it 
busy at home and efficient at home but also effective overseas. 
So what is happening to us right now, particularly in our 
security police forces, for instance, is we take them from many 
different bases and spread the load. So most of the bases out 
there are on 12 hour shifts for our security forces.
    Our forces in the gulf, in Turkey and other places, are on 
12 hour shifts. Then we switch them. So we are running 12 hour 
shifts on our folks both at home and overseas. We just have to 
stop that.
    What we save in a BRAC is interesting from my perspective, 
but what we gain is our capability to do this mission that we 
have been at for the last 8 years and asking our folks to suck 
it up at home. We are, in fact, abusing them in some ways.
    Senator Dorgan. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Stevens. Thank you, Senator Dorgan.
    Senator Domenici.

                        Contracting out savings

    Senator Domenici. Thank you very much, Mr. Chairman.
    Mr. Chairman, I was not here for your entire opening 
remarks and your questions, but I want to join in the portion 
for which I was here. I want to join you in your comments with 
reference to how much we have taken out of the regular budget 
of the Defense Department for these unforeseen contingencies 
and events that were not planned for, led by Bosnia.
    Frankly, I don't believe that we can have the United States 
military be bound by a multiyear, firm, in-place budget, the 
only part of our National Government so bound, and then insert 
and inject upon them the mandate that they pay for 
interventions like Bosnia, out of their regular budget. That is 
why we are here, with all these strains in terms of how are 
they going to live within their numbers.
    You take $5 to $7 billion and it will fix a lot of the 
problems we are talking about. Maybe it is $8 billion. But 
whatever it is, that is a big strain.
    I want to raise one point that I have learned about from 
General Ryan and others in the Air Force that I do not have an 
answer to. But I want to suggest that there is a great, big 
problem waiting out there if the U.S. Air Force is expected to 
meet its budget targets in some of the ways suggested.
    One is to contract out various activities in the Air Force. 
Unless I am mistaken, that means that through contracting out, 
the Air Force intends to have 29,000 fewer jobs in the civilian 
part of the Air Force under this budget and 23,000 jobs will be 
military positions. If you add those up, that is a 52,000 job 
reduction expected in ultimate force structure, and they are to 
be paid for by $5 billion that are to be saved from a formula 
approach to contracting out.
    The formula says that when we do these contracting outs, 
here they all are, we will save 25 percent on average on every 
one; that is, over what it would cost doing it the normal way.
    First, I want to be the first one on record to say I do not 
believe you can get this job done. I don't believe you can 
contract out and privatize that much to achieve that kind of 
saving.
    I base this on anecdotal information, but I have been 
around when there were just a few jobs being canceled because 
of contracting out and privatization. By the time you are 
finished with it working its way through the Congress and 
through the disputes between the unions that currently have 
membership that are being reduced, it takes a lot longer than 
planned and, frequently, we never get it done even though it is 
supposed to get done.
    So I guess I add another problem that you have, Mr. 
Chairman, in trying to get this defense budget put together. 
But I think that is a very, very serious one and it will cost 
much more than planned. And the Air Force will not be able to 
reduce the manpower as recommended.
    I would be glad if either or both of you wants to comment. 
I have only given you my version, and if I have misstated 
anything, then, clearly, I would like for you to correct any 
misstatements.
    Mr. Peters. Senator, I think the numbers are generally in 
the right order except that the savings we are looking to for 
this is only about out $1 billion. We have booked $1.1 billion 
through the FYDP at this point. There may be more there. Of the 
savings we have booked, actually some of the other savings that 
may be in that number you are talking about are the savings 
from working the depot issues in public/private competitions, 
where we have had a 29-percent cost saving on the only one that 
actually has been awarded yet.
    For the other two, the RFP's I hope are coming out in the 
next 30 days, with an effort to try to award them toward the 
end of this fiscal year.
    Senator Domenici. Mr. Secretary, let me say that my number 
is entitled to a clarification. My $4.8 billion is for 5 years, 
or about $1 billion a year.
    Mr. Peters. It is $1.8 billion total over the FYDP which is 
the number we have been working with, of which $700 million is 
depots.
    Senator Domenici. We will confirm the number. In any event, 
it is a rather large number. The $4.8 billion is from your own 
budget briefing.
    Could I just talk about some parochial issues with you very 
quickly, General and Mr. Secretary?
    Senator Stevens. If you would wait for just one second, I 
have to step out for just a few minutes.
    When you have finished, the next person is Senator Shelby. 
But I will be back.

                       Air Force space laboratory

    Senator Domenici [presiding]. Thank you, Mr. Chairman. I 
will be finished very shortly.
    When the airborne laser was being discussed by two 
different Senators, I did not chime in. I know quite a bit 
about it. It was invented and dreamed up in Albuquerque, NM, at 
Kirtland Air Force Base and the military space lab there. It 
was researched there, it was built there, and it was tested 
there. I have been there and talked to everybody there. 
Frankly, the GAO frequently makes mistakes and I believe they 
have just made a mistake in their report. They did not fully 
listen to both sides of the debate.
    They took one little piece of history and documented it for 
the public as if this program was destined not to work 
scientifically and physically. That is not the case. In fact, 
it is now touted by the military as the only significant laser 
that may be in our arsenal in the not too distant future with 
reference to space.
    If I have misstated anything, I would ask you to correct 
that.
    General Ryan. No, sir; I don't think that is parochial, 
either. I think you are dead-on and those are facts.
    Senator Domenici. With reference to the laboratory, the Air 
Force laboratory, the space laboratory that used to be called 
Phillips, in Albuquerque, am I correct that, even though you 
have restructured the way you were going to manage this, that 
which will be done, that is, the mission of the former Phillips 
Laboratory, will remain the same, that it will be the major 
space research laboratory for the U.S. Air Force?
    General Ryan. Yes, sir.
    Mr. Peters. Yes, sir.
    Senator Domenici. We have been told that and I assume that 
is still the case.
    Mr. Peters. Yes, sir.
    General Ryan. Yes, sir; I know of no plans to change that.

                                 F-117

    Senator Domenici. The F-117 is at Holloman Air Force Base. 
I am concerned that there will remain enough capability to 
adequately service and maintain the F-117. With the reduction 
in military personnel, is that in any way going to affect the 
operation and maintenance of the F-117?
    General Ryan. I don't think so, sir. We have protected as 
best we can in our budgets, even with the outsourcing and 
privatizing that we talked about, the core capability to be 
able to generate our forces and execute them. So I do not 
anticipate a problem with the F-117.

                  Environmental impact statement [EIS]

    Senator Domenici. Holloman Air Force Base is fortunate to 
be the recipient of some German training missions. I understand 
that an EIS, an environmental impact statement, is being 
completed with reference to an additional group of German 
training missions.
    Do you foresee any problems with this EIS and the 
implementation of that plan?
    Mr. Peters. Senator, I do not. That is a high priority for 
us at this point and I am not aware of any problems that exist 
there. It is also a very high priority for the German 
Government, to get that to happen because they are losing some 
of their training space in Europe and we need to get them on to 
Holloman to get them the training that they need. So that is a 
very high priority for us and we are working that as fast as we 
can.
    Senator Domenici. Do I gather that, Mr. Secretary, in 
general you continue to be committed to working with the local 
community with reference to the various concerns that are had 
about where you will fly these planes and where their missions 
will be?
    Mr. Peters. Yes, sir. Absolutely.

                               Partnering

    Senator Domenici. Last year, we had a shared facility that 
was directed to be built in the city of Alamagordo as an 
experiment. They are planning a brand new hospital. The Air 
Force was thinking of adding to theirs. They have put together 
a plan wherein both would save and both would have what they 
need.
    We are supposed to get a final from the Air Force on their 
evaluation before they move forward. When might we expect that?
    General Ryan. I would like to answer that one for the 
record to give you the exact date. But I can tell you that we 
are very, very positive about that partnering with Alamagordo 
and Holloman Air Force Base. We think that is a wonderful idea. 
We think it is good for the city, we think it is good for our 
folks. I will give you the exact date of when we will have that 
report back to you, sir, in an answer for the record.
    [The information follows:]

                            Shared Facility

    The Air Force will submit a report to Congress, through the 
Office of the Assistant Secretary of Defense (Health Affairs), 
containing its analysis and recommendations regarding this 
sharing proposal no later than May 31, 1998.

    Senator Domenici. The other air base, Cannon Air Force 
Base, has had some reductions because of the acceleration of 
phasing out some of the F-16's--no----
    General Ryan. The F-111's, sir.
    Senator Domenici [continuing]. The EF-111's. We were going 
to have some and they are going to be leaving earlier.
    Some of that vacuum is supposed to be filled by some 
training missions from the Republic of Singapore. Might I ask, 
when might that agreement be finalized? Or would you like to 
state that for the record?
    General Ryan. I will give you the exact date in an answer 
for the record, sir. But right now, we foresee no problem with 
that agreement with the Republic of Singapore. We think that is 
a go, subject to an environmental assessment that we think will 
show much less of a problem using F-16's rather than F-111's at 
the numbers we are talking about.
    Senator Domenici. It is not a very large number and it is a 
different airplane
    General Ryan. A different airplane.
    [The information follows:]

                         Cannon Air Force Base

    Pending the outcome of the environmental assessment, we 
anticipate a finalized agreement with Singapore by April 1999. 
Singapore plans to begin moving some of its aircraft and 
personnel into Cannon AFB between October and December of 1998 
with the full training complement beginning in December 1999.

                      Bomber training initiatives

    Senator Domenici. You are going through a realistic bomber 
training initiative, where you are looking for some places to 
fly bombers at low levels. You know that New Mexico is not 
averse to having many of these kinds of air space utilizations 
by the Air Force taking place in our State. But we are 
concerned that way up in northern New Mexico, in the 
communities of Taos and Santa Fe, that they are concerned about 
whether this will work up there.
    I am not convinced that it is an appropriate location, but 
I leave that up to the evaluations and studies.
    Will you continue your commitment to hold additional 
meetings to provide interested residents with information and 
answers in that regard?
    Mr. Peters. Yes, Senator, we will. Senator Bingaman and I 
met about this several weeks ago and at that point he asked 
that we extend some deadlines. That has been done. We will 
continue to try to work with you and the communities in New 
Mexico to make sure they feel they have a full opportunity to 
comment.
    Senator Domenici. I have the cumulative competitive 
resource savings that we discussed earlier. I will hand it to 
you. It's your own briefing. It says for 6 years it is $4.8 
billion. Maybe you can tell us if this is wrong now, and you 
have reduced your savings projections.
    Mr. Peters. If I may, I would give you that for the record. 
We will do that.
    Senator Domenici. Please.
    Mr. Peters. I think those are not the numbers we have been 
working with.
    Senator Domenici. Something may be added to it.
    [The information follows:]

                              O&P Savings

    In our fiscal year 1999 PB, the Air Force is projecting 
$1.8 billion cumulative savings from fiscal year 1998 through 
fiscal year 2003 from competitions and reengineering efforts. 
The cumulative savings by year are:

Fiscal year:
    1998................................................     $79,500,000
    1999................................................     258,800,000
    2000................................................     494,800,000
    2001................................................     854,700,000
    2002................................................   1,300,000,000
    2003................................................   1,800,000,000

               Information technology software capability

    Senator Domenici. I think Senator Shelby is next.
    Senator Shelby. Thank you. I will try to be brief, General.
    Information technology, you are familiar with the standard 
systems group and other organizations that comprise the 
Electronics Systems Center [ESC]. We are concerned about the 
software capability and what is in-house and where is it going 
and everything. Do you believe it is necessary, General, for 
the Air Force to retain an in-house software capability to 
develop and to support software for military essential 
activities like standard systems?
    General Ryan. I wish I could give you a ``yes'' or a ``no'' 
to that, Senator.
    I have asked our Director of Communications and 
Information, our chief communicator, to go back and tell me 
whether in this day and age, the assumption that we can get it 
cheaper on the outside than building it on the inside still 
pertains. If you look at what is going on in the business world 
today, you see a lack of capability out there. One in every 20 
jobs, that require computer skills, is going vacant. There are 
20,000 jobs in the Washington, DC, area that are unfilled by 
competent computer-literate folks.
    I have a son who is a captain in the Air Force who is a 
computer officer. I get first-hand knowledge of those kinds of 
capabilities and the Air Force's thrust in that area.
    Our real issue is can we build those kind of people in the 
Air Force and retain them vice----
    Senator Shelby. Absolutely, and cost has to be a factor, 
too.
    General Ryan. Cost has to be a factor, vice contracting out 
that capability. Clearly, we can contract out that capability.
    Senator Shelby. But at what cost?
    General Ryan. But is it cheaper to do it? That is what I 
have asked them to tell us.
    Senator Shelby. We have some information, and I don't know 
if you have it, that it would cost more to contract out. I 
don't know if that is right.
    General Ryan. I don't know, either, sir, and that is what 
we are trying to pursue. Before we make any decisions about 
this business, we must go through that analysis.
    Senator Shelby. Absolutely.

               restructuring of Electronic Systems Center

    I am also aware, General, that General Kadish has proposed 
to reorganize the Electronic Systems Center in the decision to 
restructure the program management authority from a standard 
systems group to ESC.
    What consideration was given to the contractor support 
relationship there? If it was assumed that the reorganization 
would not impact contractors, can you assure us that the 
program execution will not be hampered by the proposed 
restructuring?
    I know why you restructure or try to. But is this a good 
thing?
    General Ryan. I would like to request to take that one for 
the record and get back to you, sir.
    Senator Shelby. All right.
    [The information follows:]

                      In-House Software Capability

    In response to your questions concerning the development of 
software, the Air Force views software development and 
maintenance as a commercial-like activity that is neither 
inherently governmental nor military essential. Today we have 
several software activities, including the Standard Systems 
Group (SSG) at Maxwell Air Force Base, Alabama, and the 
Materiel Systems Group (MSG) at Wright-Patterson Air Force 
Base, Ohio, that provide software support for our standard base 
and depot systems. They use a mix of active duty, government 
civilians and contractors to accomplish their mission.
    Just as we do with other commercial-like activities, we are 
reviewing the SSG and MSG to ensure these activities are 
providing the best value to the taxpayer. The decision process 
used to increase effectiveness and gain efficiencies in 
software development and maintenance will consider a full range 
of options, to include outsourcing, privatization and 
reengineering.
    Labor is clearly the single biggest cost driver for 
software whether it's done in-house or by contractor. When 
comparing in-house and commercial software programmer labor 
costs, we must go beyond a simple comparison of fully-burdened 
labor rates and weigh other factors, such as training, 
retention, and productivity. We are looking very carefully at 
the whole picture to include the training and experience 
required to produce reliable, efficient, effective software. 
For example, if a first-term programmer decides not to 
reenlist, a substantial training investment has been made with 
marginal near-term and no far-term return. If a second-term 
airman does not reenlist, we have made an even greater 
investment with, again, only a marginal return. We are 
concerned that despite offering selective reenlistment bonuses, 
the reenlistment rate for first-term airman programmers 
continues to decline. So far this year, it stands at 32 percent 
and for the second year in a row it is below our goal of 55 
percent. Reenlistment is even bleaker for second-term airman 
programmers--a 28 percent reenlistment rate so far this year, 
and for the fifth consecutive year we are below our goal of 75 
percent.
    Another factor in the economic equation is the expected 
software life cycle. Outsourcing software maintenance for 
systems we will deactivate in the near future may not be cost 
effective due to contractor ``spin-up'' costs associated with 
gaining adequate experience levels. In cases where we are 
replacing a system, it may make more sense to continue in-house 
software maintenance for the legacy system and procure software 
development and maintenance for new systems.
    In summary, we will look at all the cost components of our 
organic software capability, to include personnel, 
infrastructure, equipment and supplies. While we are building 
the cost models to help us in the decision process, we have 
made no decisions regarding the future of our software 
activities.
    In response to your questions concerning the restructure of 
the Electronic System Center (ESC), the Standard Systems Group 
(SSG) is a subordinate group under the ESC organization. 
Program management authority has always been the responsibility 
of the ESC Commander. The restructure at ESC was a prudent 
action to take in response to the revolutionary changes in the 
information technology environment. With regard to the 
expressed concern about program execution, you have my 
assurance that one of the restructure's key objectives is to 
strengthen the emphasis on program execution. The restructure 
carefully considered the relationships among the military 
users, government acquisition offices, and the contractors. The 
government and contractor support staffs were pooled under the 
SSG Executive Director to better balance workload assignments 
and standardize processes throughout SSG. Program execution has 
been enhanced as a result of the restructure.

             Joint air-to-surface standoff missile [JASSM]

    Senator Shelby. The joint air-to-surface standoff missile, 
or JASSM, you are very familiar with. What is the status of the 
program with respect to analysis of alternatives?
    General Ryan. The analysis of alternatives is currently 
being briefed up through the OSD and service chain. It is a 
process that I think we will be through by the end of this 
month.
    In any case, we are looking toward a decision on the JASSM 
capability. As you know, the alternatives were the SLAMMER and 
the JASSM variation.
    We should know the answer to that here this month.
    Senator Shelby. Do you have any idea if the Navy will stay 
with the program?
    General Ryan. I won't answer for the Navy, but I can tell 
you from what I know of the analysis that, clearly, I think 
JASSM is a very, very good system and it shows lots of 
potential for the future. But I cannot speak for the Navy in 
that, sir.
    Senator Shelby. Mr. Secretary.
    Mr. Peters. I am sorry, but I can't, either, on that. I 
know that our competition we think is going to be very good. We 
are getting very good prices. But we will have to wait and see 
how the analysis of alternatives comes out.
    Senator Shelby. It has been a good weapon, hasn't it?
    General Ryan. Yes, sir.
    Mr. Peters. Yes.
    Senator Shelby. I just want briefly to hit on national 
missile defense, if I could.
    The Air Force officials, I understand, General, have 
repeatedly argued that the Minuteman option complies with the 
ABM Treaty. But they have never stated how it would be made 
treaty compliant.
    Can you tell us how this can be done? If you don't want to 
address that now, you can get it back to me.
    General Ryan. As you know, Senator--and I will clarify it 
for the record--we have offered a Minuteman solution to a small 
raid capability that appeared to us to be treaty compliant. I 
know that the study is ongoing right now on what other 
alternatives there are out there to meet that kind of raid 
capability and whether Minuteman is the right missile to be 
used in that case. That should come to fruition here in the 
next several months.
    [The information follows:]
                        National Missile Defense
    The Air Force has suggested the use of modified Minuteman missiles 
to perform the role of ground-based interceptor (GBI) in an NMD system. 
Before any selection of any NMD GBI, however, the USD(A&T), supported 
by DOD's Compliance Review Group (CRG) must determine whether a 
particular design is consistent with U.S. treaty obligations. Unless, 
and until, the USD(A&T) rules, no definitive answer can be given as to 
whether Minuteman-based GBI is treaty compliant.
    Nevertheless, there are reasonable arguments that we could proceed 
with Minuteman-based interceptors and maintain good-faith compliance 
with both the ABM Treaty and START:
  --Under the ABM Treaty, Minuteman-based interceptors could have such 
        changes that they could be considered legal ABM components and 
        not illegally upgraded versions of previously existing 
        missiles.
  --Under START, the Minuteman-based interceptor could be considered an 
        ICBM used for delivering objects into the upper atmosphere or 
        space, in the same manner as a space-launch vehicle or booster 
        for communications payloads. Each Minuteman-based interceptor 
        would count towards START central warhead limits, and be 
        subject to the applicable START provisions.
  --Although Minuteman-based interceptors would be subject to both the 
        ABM Treaty and START simultaneously, the two treaties are 
        separate legal entities. Compliance with each must be assessed 
        in light of the specific applicable treaty language.

    Senator Shelby. Should you not get a determination from the 
compliance review group before you move way down the road on 
this? Mr. Secretary, do you want to address that?
    Mr. Peters. Senator, if I may answer that, in my last life 
as the Deputy General Counsel of DOD, we were looking at this. 
The compliance review group is working on this. But they needed 
to have a relatively clear architecture before they started to 
work because it is a very highly fact-intensive work. But that 
is ongoing.
    I am not sure what the date for completion is. It is a 
complicated issue.
    Senator Shelby. Yes, very complicated.
    Do you want to get back to me on it and explain what you 
plan to do, if you plan to do anything, and how?
    Mr. Peters. Yes, sir.
    [The information follows:]

                           Treaty Compliance

    The Air Force strongly supports the National Missile 
Defense (NMD) Joint Program Office process identifying the best 
system from among various options--including the Minuteman NMD 
option. As part of this process, the government will select the 
booster within 90 days after contract award. The LSI contract 
was awarded on April 30, 1998. On or about July 30, 1998, the 
booster part of the NMD architecture will become known. It is 
only after this point that the Compliance Review Group would 
definitively rule on treaty compliance of the booster selected, 
whether Minuteman or an alternative design.

                Evolved expendable launch vehicle [EELV]

    Senator Shelby. What about the evolved expendable launch 
vehicle? General, are you familiar with that?
    General Ryan. Yes, sir.
    Senator Shelby. I understand the Air Force has announced a 
new acquisition strategy for this program that appears to 
leverage the commercial market for space launch and will meet 
the cost-saving requirements and national security objectives.
    Explain your new strategy and how it benefits the military, 
industry, and, of course, the taxpayers, which is very 
important.
    General Ryan. Sir, space is the new frontier. We have seen 
on the commercial side today an increase in the use of space to 
the point where the military, even the Government, will be the 
minority member out there as we move into this next century. 
The amount of money that is going to be spent on space support 
and orbital capability is kind of mind boggling.
    As we went into the strategy for EELV, we were thinking 
about down-selecting to one or the other. It appears that in 
the commercial market out there, they will be planning for 
both.
    Senator Shelby. Good opportunities, yes?
    General Ryan. Good opportunities, and this is a partnering 
between industry and the Air Force that will benefit both.
    We think that the EELV will get the cost per pound launch 
to orbit significantly down. If we are going to become an 
aerospace Air Force, if we are going to become an aerospace 
Nation, we have to get the cost per pound to orbit down 
significantly, and this is a really good step on the way to 
that.
    Senator Shelby. It is a good opportunity and you can, 
hopefully, do it.
    General Ryan. Yes, sir.
    Senator Shelby. Are you familiar with what Boeing has done 
in my home State?
    General Ryan. Yes, sir.
    Senator Shelby. Mr. Secretary, do you have a comment?
    Mr. Peters. No; I think this is really the way we ought to 
be going.
    We are looking, in the Air Force, at trying to leverage our 
dollars both for acquisition and for science and technology 
research with industry and with other Government agencies. I 
think it is clear to us that we need to partner with the 
commercial world in many ways that we are not doing now because 
there will be a huge demand in that area. We still provide a 
lot of the lift services and launch services and we need to 
look at how we are doing that.
    Just earlier this month we signed a deal with the National 
Reconnaissance Office [NRO] and with the Defense Advanced 
Research Project Agency [DARPA] to do a mobile tracking 
satellite system in space. Each one of us is picking up about 
one-third of the cost of that. We also are contributing an EELV 
to get it up in space.
    We have asked our Scientific Advisory Board [SAB], our 
science advisors, to give us a plan that we call doable space. 
This is to look at what industry and Government need to do to 
define critical technologies and to give us some ideas about 
how we could partner with industry to achieve those 
technologies by using joint funds. I think that is clearly the 
way we are going to go and I think EELV is a good example of 
the many benefits that can be obtained by getting private 
industry to participate at the same time that we are 
participating in the programs.
    Senator Shelby. Basically you are looking to the market for 
some help?
    Mr. Peters. Yes, absolutely.
    General Ryan. Yes, sir.
    Senator Shelby. Thank you.
    Thank you, Mr. Chairman.
    Senator Stevens [presiding]. Yes, sir.
    Senator Bumpers.

                        modernization of C-130's

    Senator Bumpers. Thank you, Mr. Chairman.
    Mr. Secretary and General Ryan, let me ask you both this 
question.
    In your posture statement, on page 35 you state that your 
current plan is to modernize more than 350 existing C-130's. 
Let me just say at the outset that I strongly agree with that. 
I notice that you are only asking for one C-130J. I don't want 
to get into the C-130J fight. I am sure it is a fine airplane, 
but it costs $64 million.
    My guess is--and I am not privy to what precisely it would 
cost to do the modernization of these C-130's--my guess is that 
you could probably modernize about eight C-130's for what it 
would cost to buy one new C-130J.
    The modernization plan could take those planes' usefulness 
up to the year 2030 or so. That seems to me like one of the 
best ways in the tight budgetary constraints of DOD and the Air 
Force, and particularly this morning, to do this. It seems like 
an immensely wise thing to do.
    Incidentally, I assume that that is the plan now, since it 
is in the posture statement.
    Mr. Peters. Senator, let me address that, if I may.
    We have asked our air mobility commanders to give us a 
better idea of how to structure this program. As you know, we 
have had C-130 modernization money in the budget for some time. 
General Kross has given us the preliminary view that we would 
probably do better by spending that money in a different way to 
create something he has called the C-130X, which is a glass 
cockpit, modernized C-130, rather than doing it in drabs as 
these things go through program maintenance.
    He is coming in his year 2000 program objective memorandum 
[POM] with a program that will do that, to let us look at that.
    Senator Bumpers. That is fine, too, Mr. Secretary. I am for 
that, too.
    Mr. Peters. I think we are definitely going in that 
direction.
    With respect to the J's, we have done two things in the 
1999 budget. We have added one to round out the number that we 
have been given. Second, we have added all the spare parts and 
support equipment that are necessary to run all of the other 
ones that have been added by Congress. So our hope is that, at 
the end of 1999, we would have a useful fleet of J's in the 
budget and that we would also have a roadmap for what to do 
with our older C-130's, some of which will obviously be retired 
because it will not be economical to upgrade them. But many of 
them should be upgraded to a common cockpit.
    Senator Bumpers. General Ryan, would you like to add 
anything to that?
    General Ryan. No; it will be a balance between J's and what 
we call X, bringing the old ones, eight different models that 
we have, up to a common configuration.

                     Air Mobility Command upgrades

    Senator Bumpers. We are talking about getting the biggest 
bang for our buck. That is the reason I raised the question. I 
don't want to get into the fight if you have the money and you 
can see fit to do that. But I think it would be foolish to 
limit ourselves to a $64 million plane when you can get the 
same capability, essentially, for probably around $8 million 
with the existing planes we have. It would be foolish not to do 
that.
    Incidentally, I think Air Mobility Command now wants to buy 
more C-17's, isn't that correct?
    General Ryan. The Commander of Transportation Command has 
said that he needs another 15 to fill out the special 
operations capability that he is on tap for.
    Senator Bumpers. Well, I would not fight about that. It is 
a good airplane. I always thought it was too expensive and I 
would have done something different. But now that we have it 
and we are building it, why I don't object to that.
    On a parochial issue, regarding the National Guard's 188th 
Fighter Wing, in Fort Smith, AR. Since 1994, I have been trying 
to get those F-16's updated or replaced. We know that we are 
not buying any more, even though Lockheed wants to sell us some 
more.
    I think those aircraft should undergo what Lockheed calls a 
midlife update program.
    Incidentally, I would like to get in on that myself, a 
midlife update. [Laughter]

                       Guard and Reserve upgrades

    Tom Harkin, to whom I would defer on this because of his 
own expertise, being a fighter pilot and so on--the other day 
we were told that only 29 percent of our pilots were reupping.
    General Ryan, we talked this morning about the major effort 
you make to get those people in the Reserves who do not reup. 
The point I want to make is this.
    If you have an F-16 pilot who is not reupping and you say 
to him why don't you join the 188th Fighter Wing here in Fort 
Smith, and he is looking at a plane that is really outdated 
compared to the one he has been flying--well, I won't say it is 
outdated, but it sure has less capability than the one he has 
been flying--would you not consider that a deterrent to him on 
whether or not to enlist in the Guard?
    General Ryan. I believe that we have done a very, very good 
job in providing the Guard with modern capability. Our A models 
that are still in the Guard are well maintained and are very, 
very good. They lack some of the state-of-the-art things that 
we have in some of our other aircraft, like precision 
munitions, et cetera.
    So yes, we were looking at how to upgrade and divest 
ourselves of all of our F-16A and B models in this last budget 
that we went through. We will continue to try to upgrade those 
kinds of capabilities.
    One of the problems we ran into was this idea that we could 
not shift a wing out of the active component into the Guard and 
get the tumble-down effect of the better capability because it 
would download bases. So we kind of got trapped a little bit in 
not being able to get those forces, particularly the ones that 
you are talking about, out of the inventory.
    We will continue to look at it, sir, and in our next budget 
we will address the modernization of those less capable 
aircraft, for instance, the F-15A and the F-16A models.
    Senator Bumpers. I hope you will, General. This is my last 
year. This will be the fourth year, at least, that I have 
worked on trying to get a modernization program for new planes 
in that fighter wing in Fort Smith. It is a fine organization.
    The Europeans are doing this, are they not? Are they not 
doing the midlife update on their F-16's?
    General Ryan. They are doing the midlife upgrade. Yes, sir.
    Senator Bumpers. There is one other point on that. I asked 
General Hawley about this and he wrote me back a strange letter 
that I do not understand. Perhaps you can explain it to me.
    He says that plans to update the 188th have been scrapped 
because of discussions between the administration and the 
Congress on BRAC legislation. I didn't understand that. What is 
the relevance of the BRAC legislation on upgrading the F-16's?
    General Ryan. When we had built our budget for this year, 
the 1999 budget, part of the QDR, the ``Quadrennial Defense 
Review,'' said to move a wing from the active component into 
the Guard and that would allow us to modernize some of these 
aircraft. We were unable to do that because of the resistance 
that the administration felt would be there in downloading 
bases without a BRAC legislation. I think that is where he is 
coming from.

                                 F-22's

    Senator Bumpers. We are now talking about buying 339 F-
22's, is that correct?
    General Ryan. That's correct, sir.
    Senator Bumpers. We are looking now at a 5-month delay in 
testing and delivery of the first five F-22's because, 
apparently, of this new high tech casting of titanium parts, as 
opposed to aluminum.
    You know, and I make no bones about it, that I have been an 
ardent, adamant, long-time opponent of the F-22. I am about 
ready to concede that I have lost that. So I got a spending cap 
put on last year's authorization bill. That was the Armed 
Services Committee and Senator Levin and Senator Warner agreed 
to it.
    What is this 5-month delay going to do to the spending cap?
    General Ryan. We see no impact on the spending cap. The 
delay is 5 months.
    Senator Bumpers. You think it will still come in under the 
cap that we had in the bill last year?
    General Ryan. Yes, sir; we have the agreement of all of the 
manufacturers to be able to do that.
    The 5-month delay has to do with the third aircraft that is 
going to come off the line. Remembering that we are in the EMD 
phase, engineering and manufacturing, this was one of the 
things that we have an EMD phase for, to determine the 
viability of the manufacturing techniques. We have gone back 
and redone the technique of not only how to do the weld but to 
inspect the welds to make sure they are secure.
    That has put us behind, on that aircraft, 5 months. We have 
a catchup plan that, by the time we get to the seventh 
airplane, we will be caught up.
    Senator Bumpers. And when is that?
    General Ryan. I can give you a date on that, sir. I will 
give it to you for the record.
    [The information follows:]

                                  F-22

    The F-22 Initial Operational Test and Evaluation (IOT&E) 
start (August 2002) and Milestone III (July 2003) have not 
changed due to the recent manufacturing delays. The Air Force 
has replanned the F-22 flight test work to accommodate a 2 week 
to 5 month delay to deliver aircraft from manufacturing to 
flight test. These delays affect test aircraft 4003 (5.3 
months) through aircraft 4006 (2 weeks). The schedule for 
aircraft 4007 is not affected by the manufacturing issues, and 
it will meet the original planned first flight date in 
September 2000.

    General Ryan. But our ninth--we have nine airplanes in that 
EMD phase. Then we start into the production airplanes, the 
production decision being made this year for the first two.
    Senator Bumpers. What is the initial phase--five for the 
first year of production, five F-22's? Is that in 1999?
    General Ryan. There are two in the first lot for this year.
    Senator Bumpers. That is for 1998?
    General Ryan. That's for 1999.
    Senator Bumpers. For 1999? You have two in the budget for 
next year?
    General Ryan. Yes, sir.
    Senator Bumpers. For year 2000, you have five?
    General Ryan. There are six, and then I will give you the 
ramp.
    Senator Bumpers. You can supply that for the record, if you 
will.
    General Ryan. Yes, sir.
    [The information follows:]

F-22 Production Quantities

                                                                Quantity

Fiscal year:
    1999..........................................................     2
    2000..........................................................     6
    2001..........................................................    10
    2002..........................................................    16
    2003..........................................................    24
    2004-11......................................................\1\ 281
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................   339

\1\ Maximum production rate is 36 aircraft per year.
---------------------------------------------------------------------------

                             Bomber status

    Senator Bumpers. On bombers, let me ask you this.
    How many B-1's do we have left? We lost another one the 
other day.
    General Ryan. Right. We are at 92, I think, total in the 
active inventory.
    Senator Bumpers. Is the B-1 now purely for conventional 
use?
    General Ryan. Yes, sir; it has been deemed that under START 
II negotiations, that it would be so equipped and that it would 
not be equipped to deliver nuclear weapons.
    Senator Bumpers. How many B-52's do we have in the Middle 
East right now?
    General Ryan. We have, on the ramp at Diego Garcia, 14.
    Senator Bumpers. Fourteen?
    General Ryan. And we have three B-1's.
    Senator Bumpers. Three B-1's?
    General Ryan. Yes, sir.
    Senator Bumpers. I take it they are not there just for 
show. We would use those in the event of an attack against 
Iraq?
    General Ryan. Absolutely.
    Senator Bumpers. How many B-52's do we have left?
    General Ryan. B-52's?
    Senator Bumpers. Yes--in the Air Force. Is it 150?
    General Ryan. Right now, we have 94.
    Senator Bumpers. One hundred seventy-four?
    General Ryan. Ninety-four total B-52's.
    Senator Bumpers. What is the longest life expectancy of 
those planes?
    General Ryan. They go out to 2030.
    Senator Bumpers. OK. Back to C-130's: I want to be sure 
that the record is clear on this.
    If we go through this modernization of 350 C-130's, which, 
according to your posture statement is your present plan, most 
of those planes would be viable until the year 2030-40, is that 
correct?
    Mr. Peters. That is an approximate number, yes.
    Senator Bumpers. I want to close my questioning, Mr. 
Chairman, by again reiterating my strong support for that idea. 
As I say, I am not trying to stop the production of the C-
130J's. But I think the C-130X makes a lot more sense. I think 
the modernization of that fleet makes a lot more sense.
    You know what your budget constraints are. In my opinion, 
you are just getting a lot more there.
    Now I have a parochial interest. I have Little Rock Air 
Force Base which is the major C-130 training base in the United 
States. I want it to stay that way, of course.
    Incidentally, you just put a new engine facility down there 
the other day, and I thank you for that. But I like to think 
that I am looking at this above and beyond my parochial 
interests. I would think that you would have that same interest 
given the budget constraints in which you are operating.
    Thank you, Mr. Chairman.

                       Collision avoidance system

    Senator Stevens. Thank you, gentlemen.
    I do have just two short questions. I am sure you are aware 
of the CBS ``60 Minutes'' show that highlighted the C-141 
midair collision with the German aircraft off Africa. Two years 
ago, after the crash of Secretary Brown's plane, we put money 
into the bill, $32.5 million, for aviation and safety 
equipment, which included the enhanced ground proximity warning 
system with the digital terrain data base to address controlled 
flight into terrain [CFIT] and the traffic alert and collision 
avoidance system [TCAS]. We have also had predictive windshear, 
radar, and cockpit voice recorders and flight data recorders.
    I want to ask about TCAS. I was surprised to find that TCAS 
is not on the C-17?
    Mr. Peters. It is not currently on the C-17, Senator, but 
there are plans to reengineer it onto the C-17.
    Senator Stevens. I thought we put up enough money and we 
got the plan to satisfy all the requirements for DOD passenger 
carrying aircraft?
    Mr. Peters. The C-17 can carry passengers. But the emphasis 
is in putting it on our fleet that only carries passengers 
first, such as the C-20's and the aircraft the 89th Wing flies 
and others. Those are at the head of the line, followed by the 
aircraft that carry cargo and passengers.
    Senator Stevens. I am told that the private commercial 
airline industry has voluntarily equipped its entire fleet with 
the enhanced ground proximity warning system and that we are 
lagging behind that. I think, particularly on the planes that 
are going to be used for the deployment of our forces, the C-17 
is, basically, for deployment of our forces abroad, as I 
understand it, beyond being a cargo plane.
    I want to ask you one more question. Why is there not a 
plan--I thought we funded a plan to assure that all passenger 
aircraft of the Air Force, particularly the large troop carrier 
aircraft, would have the latest safety equipment. Now if you 
need money, I would like to know that for the record.
    What would it cost to assure that is the case? I cannot 
believe we should not have that equipment on the C-17.
    Mr. Peters. Senator, right now, at the current schedule I 
believe our passenger carrying aircraft will all have TCAS and 
these other safety enhancements by around the year 2000, and 
the TCAS will be going on all of our aircraft by 2005.
    Senator Stevens. What about the C-17's? You can get more 
people on C-17's than any other airplane when we carry them and 
when our troops are going to be deployed overseas. They are the 
ones, I would think, that would need that basic system.
    Mr. Peters. Let us get back to you for the record with the 
exact date that it is going on the assembly line. It is in 
development and there is a date on which it gets put on the 
assembly line. Then it gets retrofitted back onto the C-17's. I 
don't have that date with me today. But let us get back to you 
for the record on that.
    [The information follows:]

                          Safety Enhancements

    The Air Force will have the Traffic Alert and Collision 
Avoidance System (TCAS) installed on C-17 production aircraft 
(P-71) beginning in fiscal year 2001; retrofits for the first 
70 aircraft will be complete by fiscal year 2002. Therefore, 
all C-17's that the Air Force possesses as of fiscal year 2002, 
will be equipped with TCAS; new C-17's received after that time 
will be delivered with TCAS already installed.

    Senator Stevens. My mind slips back to the rescue mission 
to take people out of Iran. Had there been a TCAS on that 
plane, we would not have had to abort that mission.
    The real problem about that is, if we deploy to Iraq or 
anywhere out there, we must be using C-17's almost daily in 
this deployment. Aren't we?
    General Ryan. Oh, yes, sir.
    Mr. Peters. Yes, sir.
    Senator Stevens. Isn't that a passenger aircraft, then, 
General?
    General Ryan. It is both a passenger and air cargo. Yes, 
sir. But our primary passenger aircraft are first in our 
prioritization scheme.

                              C-17 support

    Senator Stevens. I would hope that the ones that are 
carrying the largest number of troops would be moved up in that 
schedule if it is at all possible.
    Again, if you need money, we ought to be able to find money 
for that.
    Last, on the C-17, let me leave you with this comment and 
you can make some comments for the record if you like.
    As I understand it, the C-17's are going to be at McCord, 
they are going to be at Altus, in Omaha, and in Charleston. 
That is where they will be based.
    If they are the primary deployment mechanism of our combat 
forces, that means that Fort Lewis and Fort Bragg, in 
particular, will be the enhanced area for troops to be deployed 
with the C-17.
    If you also then have megalopolis sort of bases now for the 
fighter aircraft, it looks like we are heading toward a 
situation where we will have very, very few bases for the Air 
Force. Is that really the plan?
    I should think we learned a lesson from Pearl Harbor about 
putting all of our assets in one place. If we are going to have 
the Army in Fort Lewis and McCord built up, if we are going to 
have Charleston built up for C-17's and Fort Bragg, we, 
obviously, are going to lose a lot of, really, the safety in 
deployments at several other locations in the country.
    I am hearing you this morning saying you would rather have 
enormous bases now for the fighter aircraft and for the other 
aircraft, just as we are going to have for the C-17's.
    That plan is not really reflected in this posture 
statement.
    Mr. Peters. No; at this point, Senator, it is not. This is 
in the works. We are trying to work this out.
    I think enormous is a stretch because there are other 
considerations such as proximity to air space and, as you 
suggest, distributing troops in multiple bases.
    But what we need to do is--we need to make sure that we 
have enough people on our primary bases from which we deploy so 
that when people are deployed, the people who are left at home 
do not have to work 12 hour shifts and do not have many of the 
same problems they have when they deploy.
    What we need to do to lift our retention, we think, is to 
try to make sure that, when people are at home base, that they 
have more of a regular workweek, a 40-hour workweek, a time to 
be with their families, and a time to decompress from the 
stresses of deployment.
    So what we are looking at is a basing scheme that will 
facilitate that.
    Our sense is it means that we will have a number of larger 
bases. But there are other alternatives, such as we have done 
with the security forces, where we have a core security forces 
group and people fall in with them.
    So we are doing a planning effort on that this year, to try 
to figure out exactly what the implications of that are.
    We don't have an answer to that yet. This is really a 
response to the fact that we see that money alone is not the 
answer for retaining our key people. We need to provide them 
with quality of life when they are at home training that is 
more normal and allows them to do the things which all of us 
want to do during the workweeks when we are at home.
    That is what we are trying to look at, trying to figure out 
how to balance our forces to get there.
    Senator Stevens. We would be interested in that.
    I see for the three locations for the C-17--I don't know 
what the plan is to deploy forces from California, Arizona, or 
Texas. Are you going to fly the C-17's south to go back north 
again? Similarly, if you look at the forces deployed in New 
England, the C-17's are down in Charleston. I am seeing the 
Army start to consolidate its deployment around the bases where 
they know the C-17's will be. That is what I am saying. I am 
not sure that has been thought through yet.
    I would like to have your comments later on that.
    [The information follows:]

                               Superbases

    Consolidation of similar forces and complementary missions 
at the same base enables the Air Force to realize 
efficiencies--both operational and financial--as we execute our 
global responsibilities.
    We believe that by consolidating our forces on fewer bases, 
we can meet the challenges of today's expeditionary Air Force 
in two important respects. First, this consolidation enhances 
our versatility to operate during deployments. Second, it 
enables us to ``manage'' the workload levied on those personnel 
not deployed--relieving them of ``routine'' 12-hour workdays.
    Finally, force consolidations enable us to reduce our 
infrastructure saving valuable resources--as we match our 
basing structure with our post Cold War reduced force 
structure.
    With respect to C-17 basing, proper force consolidation is 
a complex issue, one that requires extremely careful analysis. 
As our basing plans mature, we will consult with the Congress 
at the appropriate time.

                     Additional committee questions

    Senator Stevens. We will be submitting additional questions 
from various Senators to the Department for your response in 
the record.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
           Questions Submitted to Secretary F. Whitten Peters
               Questions Submitted by Senator Ted Stevens
                                  f-22
    Question. Last year the Air Force insisted that it could deliver 
438 F-22's for $48 billion. Can you explain why 339 F-22's will now 
cost $43.4 billion?
    Answer. The Quadrennial Defense Review (QDR) in May 1997 reduced 
the production quantity from 438 to 339, reduced the Low Rate Initial 
Production quantity from 70 to 58, and reduced the maximum production 
rate from 48 per year to 36 per year. This reduction in aircraft 
quantity and efficient production rates causes the F-22 unit costs to 
increase. The decrease in efficient production results in an increase 
to contractor overhead, an increase in the cost of materials due to 
smaller quantity buys, and an increase in subcontractor risk and cost. 
The combined effects of the QDR changes reduced the production cost 
from $48 billion to $43.4 billion.
    Question. As the F-22 begins flight testing and avionics 
integration, what risk areas are being carefully monitored by the Air 
Force?
    Answer. During flight test the Air Force will monitor mechanical 
performance (such as landing gear and braking capabilities), structural 
loads, the flying qualities of the aircraft, and engine capabilities. 
During avionics integration the Air Force will particularly monitor the 
radar performance in the flying test bed, the delivery of 
Communications/Navigation/Identification (CNI) hardware and software, 
and Mission Software integration. The Mission Software coordinates the 
sensors, processors, controls, and displays in the aircraft.
    In addition to monitoring all technical performance items in flight 
test and avionics integration, the Air Force is closely monitoring the 
cost and schedule status of all critical systems and subsystems.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                             privatization
    Question. How did the Air Force arrive at the number of civilian 
and military jobs to be eliminated and/or contracted out?
    Answer. Through an Air Force initiative called Jump Start, the Air 
Force reviewed our total work force to determine the positions that 
could be competed with the private sector. We then removed from 
consideration any position, civilian or military, that was considered 
wartime deployable, forward based, military essential or inherently 
governmental. The remaining positions fell into the Office of 
Management and Budget category of commercial activity, which is the 
category of positions the Air Force considers for competition. In 
addition, we decreased this category of positions for competition 
consideration to account for rotation base to support overseas and 
career field sustainment.
    Question. Were specific, individual studies performed to analyze 
the savings and appropriateness of activities to compete? Or, was a 
goal imposed ``from the top?''
    Answer. A goal was not imposed ``from the top'' regarding 
activities to consider for competition. Through an Air Force initiative 
called Jump Start, the Air Force, in coordination with the major 
commands, reviewed the total work force to determine if a function was 
a commercial activity that could be competed with the private sector. 
We then removed from consideration any position, civilian or military, 
that was considered wartime deployable, forward based, military 
essential or inherently governmental. The remaining positions fell into 
the Office of Management and Budget category of commercial activity 
which is the category of positions the Air Force considers for 
competition. In addition, we decreased this category of positions for 
competition consideration to account for rotation base to support 
overseas and career field sustainment.
    Question. How did the Air Force determine that contracting out 
saves 25 percent? Why do the Army and Navy assume different savings? 
Please provide copies of the analysis you performed to come to the 
conclusion that 25 percent was the right number.
    Answer. The Air Force does not presume that our A-76 cost 
comparisons will result in a contracting decision since historical data 
indicate 40 percent of the cost comparisons are retained in-house. The 
25 percent savings is calculated based on our historical cost 
comparison data that are maintained in a data base called the 
Commercial Activities Management Information System (CAMIS). CAMIS is a 
DOD required data base that has been in-place since 1979. Air Force 
data indicate that since 1979 the average savings the Air Force has 
achieved in conducting cost comparisons is 24 percent regardless of 
whether we contract the function or retain it in-house under a most 
efficient organization (MEO). However, savings for cost comparisons 
over the last 10 years have been 34 percent. Therefore, in projecting 
our cost comparison savings for the fiscal year 1999 President's 
Budget, the Air Force used a conservative percentage of 25 percent to 
ensure we could achieve our savings goal. The Air Force cannot address 
the Army and Navy's savings. The analysis is a running average and is 
the actual result of studies extracted from the CAMIS data base which 
contains over 1,200 A-76 initiatives conducted since 1979.
    Question. With fewer military personnel and DOD civilians after all 
this contracting out, what will be the impact on overseas rotations and 
``perstempo'' problems?
    Answer. The Air Force continually analyzes the effects of 
competition and privatization efforts on both enlisted and officer 
career fields to identify early on any impact on overseas rotations and 
perstempo. When analysis reveals a potential impact on overseas 
rotations or perstempo, that particular skill will be removed from 
consideration for competition. The Air Force has a formal process to 
identify its minimum military essential requirements with a key element 
of this minimum military essential requirement being overseas rotation. 
This process is ongoing and will continue to be used in the future to 
ensure mission readiness. The Air Force is committed to competition and 
privatization, but not at the expense of mission readiness or 
unacceptable impacts on our people.
    Question. How will the Air Force monitor and document the progress 
in achieving your outsourcing programs and achieving the planned 
savings? How will these data be confirmed by an outside party?
    Answer. The Air Force will monitor and document the progress and 
savings of cost comparisons and direct conversions through the 
Commercial Activities Management Information System (CAMIS). CAMIS is a 
DOD required data base and CAMIS data is available to any interested 
party at any time.
    Question. What actions do you plan if the savings do not 
materialize as planned? More outsourcing? Cuts in procurement? Force 
structure? Readiness?
    Answer. Air Force has stated that our competition program is 
aggressive and has risks, (e.g., supplier availability, level of 
savings). If the Air Force is able to execute our planned competition 
candidates, we should be able to meet our projected savings. If we find 
that we cannot achieve the projected savings, we will need to rebalance 
our modernization and readiness accounts to reflect the reduced 
savings.
    Question. Please list the specific positions, functions, and 
locations to be competed or outsourced for the state of New Mexico. 
When will this data be available, if you do not have it now?
    Answer. The data is shown below:

----------------------------------------------------------------------------------------------------------------
                                           Announced
             Base/function              authorizations         Announced date                Decision date
----------------------------------------------------------------------------------------------------------------
Cannon AFB: Military Family Housing               21    April 1996..................  February 1998.
 Maintenance.
Holloman AFB: Military Family Housing             66    May 1997....................  November 1998.
 Maintenance.
Kirtland AFB:
    PMEL \1\..........................            51    May 1996....................  August 1997.
    Base Supply \2\...................           170    May 1996....................  November 1997.
    Communication Functions...........            54    April 1997..................  May 1998.
    Base Communications...............           228    November 1997...............  October 1998.
    Dormitory Management \3\..........             6    February 1997...............  May 1998.
----------------------------------------------------------------------------------------------------------------
\1\ Tentative Decision for PMEL was In-House; pending completion of the administrative appeal process.
\2\ Tentative decision for Base Supply was Contract; pending completion of the administrative appeal process.
\3\ Direct conversion to contract.

                                 ______
                                 
               Questions Submitted by Senator Judd Gregg
                         partnership for peace
    Question. In the past, the Administration has indicated that the 
Partnership for Peace program will help decrease international military 
tensions. It further stated intentions to enhance and strengthen the 
program and to ensure that Russia is included, not excluded. Your 
statement indicates that ``recently, the focus of our cooperative 
engagement and stability enhancement efforts have been in our 
Partnership for Peace participation.'' Has Russia been included in any 
Air Force Partnership for Peace efforts in the last several years? If 
so, what is the Russian reaction to the Partnership for Peace program?
    Answer. The most recent effort was last fall when Russia 
participated in CENTRAZBAT 97, an ``in the spirit of Partnership for 
Peace'' exercise in Central Asia which focused on peacekeeping. At the 
operational level, Russian reactions are positive. Challenges remain in 
the political sense in so far as many Russians link Partnership for 
Peace to NATO expansion. Compounding the problem is a lack of Russia's 
financial resources. We are encouraged by the signing of the Founding 
Act last May. More dialogue has since taken place and the GOR signed an 
Individual Partnership Program in January of this year, a very positive 
indicator for future activities.
    Question. Do you think the program decreases possible Russian 
concerns about NATO expansion? Some specific examples please?
    Answer. The results at the operational level are positive where the 
Russians can see the benefits of cooperation, such as last fall at 
CENTRAZBAT 97. We expect this benefit to expand as the Russians observe 
less and participate more with the signing of the Individual 
Partnership Program in January. Many in Russia see a direct link 
between Partnership for Peace and NATO expansion. The USG will continue 
to have a major political challenge convincing Russia that NATO 
expansion is not a threat. Programs such as Partnership for Peace 
engage the GOR and help alleviate Russian fears.
                    science and technology programs
    Question. In September and October 1997 there were news reports of 
a possible U.S. Air Force decision to terminate all atmospheric 
sciences, electro-optic sensor, and photonics Science and Technology 
base research starting in October 1988. It was reported that the 
proposal would possibly force the closure of the Atmospheric Sciences 
Division and the Electromagnetics and Reliability Directorate at 
Hanscom AFB, Massachusetts, and result in the elimination of several 
hundred jobs. Please provide information on the Air Force's near and 
long term projections for those Science and Technology programs, 
including specifically any work programmed for Hanscom AFB, 
Massachusetts?
    Answer. The Air Force Research Laboratory (AFRL) has no plans to 
terminate all atmospheric sciences, electro-optic sensor, and photonics 
research beginning in October 1998. Air Force Science and Technology 
(S&T) funding for Hanscom Air Force Base (AFB) activities has been 
reduced approximately 16 percent in fiscal year 1999 from the fiscal 
year 1998 President's Budget (equates to an 8 percent reduction from 
the fiscal year 1998 appropriated level); however, there will be no 
involuntary reductions in fiscal year 1998 and there are no planned 
involuntary reductions in fiscal year 1999 for S&T personnel at Hanscom 
AFB. In addition to any future potential personnel cuts triggered by 
fiscal year 1999 budget reductions, a reduction of nine military 
positions has been planned as part of a previously mandated workforce 
drawdown.
    As the Air Force becomes more dependent on space assets, space-
related requirements will demand more S&T activities. Some of this 
work, including the study of space environments and solar effects, will 
continue to be conducted at Hanscom AFB. We value the contributions of 
Hanscom AFB over many years and look forward to significant work from 
Hanscom in the future.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                       funding for contingencies
    Question. When must the Air Force receive reasonable assurance that 
supplemental funding for contingencies will be made available?
    Answer. The Air Force must receive reasonable assurance by the end 
of April/early May that supplemental funding will be received by July 
1998. If funding is not received by then, we will be forced to curtail 
or defer operations, maintenance, training, and sustainment activities 
in the fourth quarter in order to support the significant cost of 
responding to the crisis in Southwest Asia, resulting in severe 
readiness impacts and mission degradation.
    Question. When must the Air Force receive the funding in order to 
preclude adversely affecting readiness?
    Answer. The significant costs of continuing our presence in Bosnia 
and responding to the crisis in Southwest Asia cannot be managed beyond 
July without an intolerable impact on readiness.
    Question. What actions will the Air Force likely be forced to take 
if the assurance and the funds are not made available?
    Answer. Peacetime flight training will be severely curtailed in 
early fiscal year 1998/4 in order to continue Operations Southern and 
Northern Watch, Bosnia and Counterdrug operations. As a result, for 
those units not directly supporting these contingencies, we anticipate 
crew readiness will decline, aircraft mission capable rates will 
continue to erode, and spare parts and inventories will further be 
depleted. Pilot training will be curtailed, further aggravating the 
pilot shortage. Bottom line--the current decline in retention and 
readiness will accelerate, requiring two to three years and an increase 
in funding to recover.
                                  f-22
    Question. GAO recommended Congress defer $595 million from fiscal 
year 1999 for the first two F-22 production aircraft due to program 
delays. What is the Air Force's position on this?
    Answer. The Air Force does not support the GAO recommendation 
because it would seriously impact the program. A one year slip to the 
program would break the EMD and production cost caps, cause a $2.75 
billion total funding impact, and force an IOC slip of 12 months.
    The GAO's recommendation is based on three concerns: (1) delays in 
the flight test program; (2) a perception that the F-22 program has 
fewer stable manufacturing processes compared to other civilian and 
military programs; and (3) delays in avionics software development and 
testing.
    The Air Force disagrees with these concerns. The F-22 is ready for 
production based on 43,889 hours of wind tunnel testing, 6,200 hours of 
engine testing, 2,100 CPU hours modeling and simulation, and 180 flight 
test hours that will occur this year.
    By December 1998, 75 percent of avionics hardware will be delivered 
using production rather than developmental processes. Also, it is 
invalid to compare the F-22's manufacturing processes to other programs 
because of differences in technologies, manufacturing processes, 
tolerances, degrees of maturity, level of commercial components in the 
design, etc.
    Avionics software risks are well defined. The current schedule has 
5 months of margin in the development of software Blocks 1 through 3.1.
    Question. With the reduced F-22 buy of 339 aircraft, what 
assurances can you give that the aircraft can be produced without cost 
growth normally experienced when a program is reduced and stretched?
    Answer. The Air Force and Contractor team are committed to live 
within the Congressionally mandated cost caps and are realizing 
significant potential production cost reductions. The F-22 contractors 
are progressing toward validating cost reduction initiatives valued at 
$15.2 billion. Our post-QDR goal was $12.7 billion while our current 
estimate is $15.2 billion. The government-contractor team signed a 
Memorandum of Understanding on January 14, 1998 committing to deliver 
339 aircraft under the Congressionally mandated cost cap. The cost cap 
represents the cost of delivering a 339 aircraft program as determined 
by a joint government-contractor team.
                                 ______
                                 
              Questions Submitted to Gen. Michael E. Ryan
               Questions Submitted by Senator Ted Stevens
           continuation pay and aviation career incentive pay
    Question. What percentage of pilots receiving Aviation Continuation 
Pay and Aviation Career Incentive Pay are in non-flying billets at this 
time?
    Answer. Twenty-eight percent of the pilots currently receiving 
Aviation Continuation Pay (ACP) and 23 percent of the pilots receiving 
Aviation Career Incentive Pay (ACIP) are in non-flying billets. These 
pilots are either attending Professional Military Education, filling 
leadership positions, or providing operational expertise to Air Force 
and joint staffs.
                               pay equity
    Question. Is there equity in pushing to increase pay for pilots 
again in fiscal year 1999, without addressing the needs of aircraft 
maintenance professionals and other specialties vital to the mission?
    Answer. The Air Force is not requesting a pay increase specifically 
for pilots in fiscal year 1999. The Air Force's retention gameplan is 
designed to reduce tempo, improve quality of life, enhance 
compensation, and improve personnel policies. These initiatives address 
the concerns of all Air Force members.
    Many of the following compensation enhancements we requested and 
received in the 1998 National Defense Authorization Act (NDAA) were 
designed to improve the quality of life for all of our members. The 
NDAA:
  --Increased Family Separation Allowance from $75 to $100 per month 
        for those members separated from their families for more than 
        30 days;
  --Included provision to protect an individual's total pay from 
        decreases related to their assignment to field conditions at 
        home station or deployed; and
  --Provided new authority to pay up to $300 per month to those 
        assigned to locations considered less desirable or safe which 
        present ``quality of life hardships''.
    The Air Force will continue to use a variety of tools, to include 
selective reenlistment bonuses, to ensure retention of critical 
enlisted specialties within the Air Force. The Department of Defense is 
also evaluating whether increased pays, including new authorities, are 
necessary to improve the retention of selected career enlisted 
specialties.
                               perstempo
    Question. Given the PERSTEMPO turmoil associated with peacekeeping 
missions, why has the Air Force limited deployments to 45 days, when 
increased lengths would provide stability to rear area units?
    Answer. Shorter duration deployments for some Air Force aviation 
units ensure the highly technical skills developed in our airmen do not 
atrophy because of limited training opportunities while deployed.
    Shorter deployments also favorably address several key quality of 
life concerns identified by our people. Given sufficient notice prior 
to deployment, disruption is minimized and the benefits include: 
Improved management of pre- and post-deployment training requirements; 
overall unit readiness is better sustained over the course of a 45-day 
rotation; and reduced length of family separation.
                          flying hour program
    Question. I understand that the Air Force is continuing to 
experience shortfalls in the flying hour program, particularly in spare 
parts. What is the current shortfall and how are you resolving it? Do 
you project a problem in fiscal year 1999?
    Answer. High OPTEMPO and aging aircraft continue to increase the 
cost of our flying hour program. The flying hour program is predicated 
on historical cost data that reflects program costs from the two 
previous years. The current shortfall for fiscal year 1998 of $209 
million will be reflected in our Omnibus reprogramming submission at 
the end of April. Recently our fiscal year 1999 Unfunded Priority List 
identified a shortfall of $219 million in reparable spares funding. 
This shortfall will continue to be refined as consumption factors are 
updated. We will again assess the fiscal year 1999 shortfall during the 
execution year.
                                 jassm
    Question. How will the Air Force employ the Joint Air to Surface 
Standoff Munition (JASSM)?
    Answer. JASSM provides the warfighter a unique, adverse weather, 
``launch-and-leave,'' PGM-quality weapon with a long-range standoff 
capability. The weapon's precise attack capabilities enable JASSM to 
place high value, fixed or relocatable point targets at risk while 
minimizing aircrew and launch platform exposure to enemy air defense 
systems. Potential JASSM targets range from non-hardened above ground 
to hardened, shallow buried targets. JASSM is designed to be compatible 
with both fighters and bombers.
    This missile will contribute significantly to the Secretary of 
Defense's guidance to rapidly defeat the enemy's initial attack in the 
earliest phase of a conflict. In the subsequent stages of conflict, the 
missile would be employed against selected high value, heavily defended 
targets. Additionally, JASSM employment could be tasked as part of a 
crisis action response directed by National Command Authorities 
(NCA's).
    Aircraft delivery methods can be accomplished from low-to-high 
altitudes and are scenario-dependent based on enemy defenses, range-to-
target, weather, and launch aircraft capabilities. Via the target of 
opportunity mode, the aircrew, prior to missile release, can retarget 
relocatable high value targets by updating GPS geo-referenced target 
location data. JASSM terminal guidance for targets of opportunity is 
provided by GPS/INS only.
                         manned reconnaissance
    Question. It is my understanding that the Air Force is in the 
process of reviewing options for a new generation manned reconnaissance 
plane. This contradicts the Department's previously stated objective to 
replace manned reconnaissance with UAV's. Has the Department changed 
its strategy with regard to airborne reconnaissance?
    Answer. The Air Force has not changed its position with respect to 
the airborne reconnaissance mission. We are committed to maintaining 
the existing manned and unmanned reconnaissance assets, while 
developing additional vehicles to augment and potentially replace 
current platforms. The existing high-altitude manned reconnaissance 
aircraft, the U-2, will be viable for the foreseeable future.
    The Global Hawk is one of two complementary air vehicles being 
developed, along with a Common Ground Segment, in the High Altitude 
Endurance (HAE) Unmanned Aerial Vehicle (UAV) Advanced Concept 
Technology Demonstration (ACTD). The Global Hawk is envisioned to be a 
long-dwell, stand-off collection platform, similar to the U-2.
    If the HAE UAV ACTD is successful and a decision is made to acquire 
and operate the Global Hawk, it will initially augment the U-2.
                basing of unmanned reconnaissance system
    Question. Have you developed plans for the basing of new unmanned 
reconnaissance systems, such as Global Hawk or the Tier III Minus 
Darkstar? How will you take into account operational training and 
global deployment factors in making these basing decisions?
    Answer. The Air Force has established a High Altitude Endurance 
(HAE) Unmanned Aerial Vehicle (UAV) Integrated Process Team (IPT) that 
has been meeting since November 1996. While preparing for potential 
introduction of the HAE UAV's into the Air Force inventory, this team 
has dealt with a great many questions pertaining to fielding, 
operations, employment, training, basing, and manning. Air Combat 
Command conducted preliminary site surveys for potential HAE UAV bed 
down locations, however, no decisions or recommendation have been made 
at this time. Since Global Hawk and DarkStar are still Advanced Concept 
Technology Demonstrations (ACTD), they are not Air Force assets and 
still must prove military utility and be deemed affordable.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                               readiness
    Question. What do your latest, 1998, data show about pilot 
retention? Is it getting better or worse? Is it better or worse for 
married pilots? With families?
    Answer. Our latest retention data confirms we are in a challenging 
pilot retention environment. The Air Force's leading pilot retention 
indicator, the Aviator Continuation Pay (ACP) take-rate has declined 
slightly from fiscal year 1997 levels. We closed out fiscal year 1997 
with a 34 percent long-term ACP take-rate, to include 38 pilots who 
originally declined the bonus in fiscal year 1997, but accepted the 
higher rates in fiscal year 1998. Our current fiscal year 1998 long-
term ACP take-rate is 28 percent; however, we feel it is still too 
early to draw any conclusions from this data. To date, only 31 percent 
of the fiscal year 1998 eligible pilots have made their ACP decision. 
We are cautiously optimistic that the increased ACP coupled with Air 
Force efforts to reduce TEMPO and improve quality of life will increase 
pilot retention. As for pilots with families, the long-term ACP take-
rate has always exceeded the rate for our single pilots. The following 
spreadsheet highlights this fact:

                             ACP TAKE RATES
                              [In percent]
------------------------------------------------------------------------
                                                           Status
                     Fiscal year                   ---------------------
                                                      Family     Single
------------------------------------------------------------------------
1989..............................................         72         53
1990..............................................         44         27
1991..............................................         47         30
1992..............................................         73         65
1993..............................................         80         76
1994..............................................         80         76
1995..............................................         81         54
1996..............................................         75         49
1997..............................................         36         19
------------------------------------------------------------------------

    Question. What are the socio-economic profiles of the pilots 
leaving? Staying?
    Answer. The Air Force does not track the socio-economic profile of 
pilots beyond marital status and number of dependents; economic status 
is limited to knowledge of the individual's pay and bonuses. The Air 
Force does conduct pilot bonus non-taker surveys to identify reasons 
why pilots are leaving the Air Force. Our survey results highlight 
TEMPO (19 percent), quality of life concerns (14 percent), and airline 
hiring (11 percent) as the top three reasons why pilots are separating 
from the Air Force. The survey results show the close relationship 
between increased tempo and quality of life concerns.
    Air Force personnel are being deployed at four times the rate they 
were during the Cold War. Frequent deployments have social impacts 
particularly with family members--increased periods of separation, 
longer work hours at home station, and a general lack of planning 
stability. Eighty-three percent of our pilots are married. Although we 
don't track the employment status of our pilot's spouses, a growing 
trend throughout society is the working spouse. Military service 
inherently requires frequent relocations and the increased absence of 
the military member due to deployments complicates any spouse's career 
plans.
    Airline hiring is another significant factor affecting pilot 
retention. Our analysis reveals that economically, a pilot will have 
greater life stream earnings if they separate from the military and 
obtain a job with a major airline at the earliest opportunity. If 
pilots are strictly motivated by money, they will separate from the Air 
Force and fly for the commercial airlines at the earliest opportunity. 
While we suspect our young pilots may be making economic decisions, we 
feel the majority of our pilots join and continue to serve in the 
military for other reasons, to include camaraderie, benefits package, 
flying opportunity, and the opportunity to serve the nation.
    Question. Are you aware of surveys of pilots showing that a major 
complaint is lack of respect for Air Force leadership? What are the 
specific complaints about?
    Answer. In fiscal year 1997, the Air Force surveyed all pilots who 
declined the pilot bonus and the number one reason flyers gave for 
getting out was tempo (19 percent). The second most cited reason was 
Quality of Life concerns (14 percent) and when we peeled that issue 
back one layer, the reason was too much time away from home. In other 
words, tempo was driving 33 percent of our pilots to turn down the 
bonus and get out.
    Concern with leadership actually ranked 9th on the list of 
concerns--only mentioned by 4 percent of those exiting. The main 
concern seemed to be at the squadron and group command level and we are 
addressing these concerns.
    Each MAJCOM holds squadron commander selection boards to pick only 
the best leaders possible. Once selected they must attend Pre-command 
Squadron Commander Training. Similarly, all colonels compete on the new 
Command Selection Board for Group command positions. This stringent 
screening process, coupled with an intense 2-3 week preparation course, 
is another positive step to ensure only the best are selected for 
command.
    In addition, the CSAF has implemented a Notice to Airman (NOTAM) 
program to articulate the Air Force's senior leadership's efforts 
regarding a variety of issues. This program provides commanders at all 
levels first-hand information on issues of importance allowing them to 
get the ``real story'' out to their troops.
                        quality of life programs
    Question. Which of your ``quality of life'' programs are working? 
Which are not? Which generate the best pay-off in terms of retention? 
Please provide the data and analysis to substantiate your answer, or 
are you using judgement or anecdotal evidence to assess the degrees of 
success or failure?
    Answer. In a quality of life survey conducted across the Air Force 
last fall, two-thirds of our enlisted and three-quarters of our officer 
members indicated satisfaction with their quality of life and over 70 
percent indicated their families remain supportive of career service.
    While we strive to quantify the retention value of quality of life 
programs we do not have quantifiable data at this time. We maintain 
that the success of some of these programs is best seen in how they 
contribute to keeping airmen focused on the mission rather than 
worrying about their basic needs. The Air Force emphasizes quality of 
life initiatives and objectives across seven priority areas which 
address a wide-range of needs for our members. Our 1998 Quality of Life 
Focus paper outlines the initiatives associated with each of the 
following priority areas: (1) pursue fair and competitive compensation 
and benefits; (2) balance the impact of high tempo levels; (3) provide 
access to quality health care; (4) provide access to safe, affordable, 
and adequate housing; (5) preserve retirement systems and benefits; (6) 
increase and enhance support to community programs; and (7) expand 
educational opportunities and access.
    Question. Does the Air Force have any studies on these issues? By 
independent organizations?
    Answer. The Air Force used the 1997 Quality of Life (QoL) Survey to 
gather data on the effectiveness of our people programs. Recent QoL 
survey results cited health care, educational opportunities, 
commissaries and exchanges, fitness centers, and housing as the most 
important QoL efforts influencing retention.
    The OSD Quality of Life Office recently contracted an independent 
study to explore service returns on quality of life investments in 
terms of retention. This study will investigate specific quality of 
life programs, their influence on retention, and compare the investment 
costs of these programs to attrition costs.
    Question. What changes have been occurring in spouse, child, and 
substance abuse for the past two years? Please differentiate between 
officers and enlisted, length of service, and among major military 
specialties and PERSTEMPO rates.
    Answer. The Air Force's data on spouse, child, and substance abuse 
is not detailed enough to differentiate between officers and enlisted, 
length of service, major military specialties, and PERSTEMPO rates. The 
data we do have shows a decrease over the past two years in the number 
of spouses and children treated for abuse in Air Force treatment 
facilities. The data also shows a decrease in severity of abuse 
treatment. Air Force drug testing results over the past two years show 
no change in the rate of positive findings, even with the CY 1997 
increase in the drug testing rate from 50 to 75 percent of our end 
strength.
    Question. What is the role of the current high PERSTEMPO in any 
changes in family or substance abuse? Please provide copies of any 
analysis you have of the relationship.
    Answer. We do not have any scientifically based data reflecting the 
relationship between PERSTEMPO and family or substance abuse.
    Spouse abuse rates remained steady from 1993-1995, then declined in 
1996 and 1997; severity of cases also decreased over this time period. 
Child abuse rates show a slightly decreasing trend over the same period 
and also a decrease in severity.
    According to the latest report of the DOD Worldwide Survey of 
Health Related Behaviors, between 1992 and 1995 alcohol use, illicit 
drugs use, and tobacco use all decreased. These data are supported by 
Air Force drug testing results over the past two years showing no 
change in the rate of positive findings on urinalysis, even with an 
increase in the CY 1997 drug testing rate from 50 percent to 75 percent 
of end strength.
    The next worldwide report will be available in late 1998. The 1998 
survey will include PERSTEMPO deployment data, which should prove 
beneficial statistically.
                                 ______
                                 
          Questions Submitted by Senator Kay Bailey Hutchison
              deployment of united states troops in bosnia
    Question. What impact does the open-ended deployment of U.S. troops 
in Bosnia have on the Air Force's ability to contribute to the defense 
of vital interests elsewhere?
    Answer. Present Air Force contributions to the Bosnia peace process 
will not inhibit our ability to support the National Military Strategy 
of the United States. Should operational taskings escalate in response 
to a particular crisis, the National Command Authority will prioritize 
taskings and allocate available resources to meet those requirements.
    Question. Could you characterize for me the impact the mission in 
Bosnia is having on Air Force readiness across the board?
    Answer. The Bosnia operation, by itself, has had no major impact on 
overall Air Force readiness. Bosnia does add stress on our individual 
high demand-low density systems such as U-2, Predator, and Rivet Joint.
    Question. What is your estimate of the future Air Force costs of 
the Bosnia mission, and how do you propose to prioritize those costs 
against competing demands on limited resources? Specifically, what 
programs would drop below the funding line if we continue, ``for an 
undefined period of time,'' the Bosnia mission?
    Answer. The projected Air Force cost to support the Bosnia mission 
is $250.7 million for fiscal year 1999. To pay for continuing 
operations without approval of the budget amendment would require the 
Air Force to decrement other programs within the already constrained 
fiscal year 1999 budget. At this point, we have not identified specific 
programs that would fall below the line if the Bosnia mission is 
indefinitely extended. However, the most likely candidates are in our 
carefully balanced, time-phased force modernization program.
                            nato enlargement
    Question. We have heard widely varying estimates of the cost of 
NATO enlargement. If, as we have heard, the DOD budget, and the Air 
Force budget as well, is a zero-sum game, then which programs 
specifically will be sacrificed to allow NATO enlargement? What is the 
Air Force plan to accommodate NATO enlargement?
    Answer. The Army is the DOD executive agent for NATO enlargement. 
The Air Force does not expect to pay and it has no plans to pay for any 
NATO enlargement requirements from the Air Force budget.
                          information security
    Question. In light of recent reports of attempts to hack into Air 
Force computer networks, what legislation can we or must we amend, 
alter, or enact, to help make your ability to conduct information 
operations easier and more secure?
    Answer. In the wake of recent intrusions into DOD computer 
networks, the Deputy Secretary of Defense has directed a department-
wide review of policies and practices that affect information 
operations. This review is being conducted on several fronts, including 
an examination of whether or not there are legal constraints that 
hamper our efforts to conduct effective information operations. Thus, 
it is premature for us to advocate specific legislative changes in this 
area.
    It is our hope that the OSD-led effort, in which we are actively 
participating, will result in a clear articulation of the legal issues 
surrounding information operations as well as proposals for any 
legislative changes that may be deemed necessary to ensure our ability 
to identify and respond to on-line attacks.
                               readiness
    Question. To paraphrase your own statement concerning readiness, 
readiness is a function of personnel, equipment, training, logistics, 
and financial resources. If we look at each of these areas individually 
we see an air force comprised of 40 percent fewer personnel responding 
to over four times as many deployable commitments. And I'm concerned 
the details behind the headlines would provide even more cause for 
alarm--I think it all points to a readiness level that is either at a 
degraded level now or will be significantly degraded in the future. 
What are your specific plans to deal with these readiness challenges?
    Answer. The Air Force has already done much to address the 
challenges to our readiness in the face of increasing demands for our 
forces:
TEMPO Initiatives
    Global Sourcing--adjudicates CINC's requirements across the Combat 
Air Forces Global Military Force Policy--establishes limits on tasking 
of selected high demand/low density assets for contingency operations
    Reduced Joint/Air Force Exercises
    Post deployment stand downs--1 day ``down'' for each 7 days 
deployed; up to 14 down days maximum
    Eliminated Quality Air Force Assessments
    Reduced Operational Readiness Inspections (10 percent in fiscal 
year 1998; 30 percent in fiscal year 1999)
    Implemented temporary duty/deployment tracker
    Shortened the duration for aviation unit deployments from 90 to 45 
days
    Funded 2 Additional RC-135's
    Stood Up a Reserve Associate AWACS Squadron
    45-Day Rotations to SWA
Aircraft Spare Parts Funding
    95 percent in fiscal year 1998; 95 percent in fiscal year 1999
Compensation Initiatives
    Pay Raise (2.8 percent fiscal year 1998; 3.1 percent fiscal year 
1999)
    Increased number of AFSC's qualifying for Reenlistment Bonuses 
(from 20 to 88)
    Increase Hazardous Duty Incentive Pay
    Increase Family Separation Allowance
    Subsistence Allowance for Dorm Residents
Rated Management Initiatives
    Reduce Rated ALO's by 47 Positions
    Convert 20 percent Rated Staff Positions to Ops Staff Officer
    Increased Pilot Bonus and Pilot Production
Quality of Life Initiatives
    E-mail access to deployed airmen
    Outreach Program--Squadron-level volunteers available to assist 
with family issues while member is deployed
    $296 million for Family Housing in fiscal year 1998.
    We believe the demand for aerospace power will continue well into 
the future, and we recognize the need to restructure ourselves to 
better support this demand. In particular, we are looking for ways to 
increase the depth of our support structure by consolidating state-side 
bases. This will allow us to support forward deployments and home 
station demands more effectively and efficiently.
    Question. Can you continue to expend large portions of your TOA on 
operations like Bosnia and Southwest Asia, while maintaining discipline 
to your plans for modernization? If so, How?
    Answer. Without a supplemental appropriation, we cannot continue to 
expend the level of funding required to support ongoing operations in 
Bosnia and Southwest Asia. Initially, from within our Operations and 
Maintenance accounts, we will among other actions begin civilian 
furlough actions, defer aircraft and aircraft engine maintenance, 
cancel operational training exercises, terminate real property 
maintenance contracts, and postpone the opening of 4 child development 
centers. To avoid unacceptable reductions in equipment and training 
readiness, we plan to rely heavily on furloughing civilians. However, 
further actions would be needed to include requesting a formal 
reprogramming action. This would place our carefully balanced, time-
phased modernization program at risk. Funding and execution of certain 
near-term (C-17), near-mid-term (bomber upgrades and precision-guided 
munitions), later-mid-term (F-22, Evolved Expendable Launch Vehicle, 
and Space-Based InfraRed System) and far-term (Airborne Laser and Joint 
Strike Fighter) requirements would have to be restructured and slipped, 
potentially degrading tomorrow's readiness and our ability to meet our 
future global engagement commitments.
                     fighter aircraft requirements
    Question. Can you give us your perspective on what we need both the 
F-22 and the JSF in the current timeframes being pursued?
    Answer. A mix of F-22's and Joint Strike Fighters (JSF's) is the 
most effective solution to the Air Force fighter modernization 
challenge. When the F-22 reaches Initial Operational Capability (IOC) 
in fiscal year 2006, the average age of the F-15 fleet will be 26 years 
when the JSF achieves IOC in fiscal year 2010, the average F-16 will be 
24 years old. Neither of these airframes would be able to fly much 
longer unless an expensive service life extension program was 
undertaken. These extension programs would provide only a marginal 
improvement to their current capability but at a significant cost. 
Additionally, the advancement and proliferation of air-to-air and 
ground-to-air threats could put both F-15 and F-16 fighters in a 
position of inferiority and threaten our ability to achieve air 
superiority in a major theater war.
    The F-22 is the ``force enabler.'' Its emphasis is on dominant air 
superiority capability while retaining a significant air-to-ground 
capability. It will allow a theater commander to rapidly achieve air 
superiority and enable all other Joint missions to take place 
unhampered by enemy airpower.
    The JSF will provide the ``bulk'' of the Joint Commander's 
offensive airpower. Its affordable cost will allow us to procure it in 
enough numbers to sustain a high operations tempo. However, the JSF's 
affordability depends on the technologies leveraged from the F-22. 
Together the F-22 and JSF provide the optimum ``high/low'' mix of 
dominant capability and high operations tempo that allows the Air Force 
to support the Joint Vision 2010 goal of full spectrum dominance.
                                  f-22
    Question. Are you concerned that anything short of full funding 
will impact the ability to stay on course with the F-22 within 
Congressionally mandated caps?
    Answer. Yes, we believe that anything short of full funding up to 
the Congressionally mandated cost caps will impact the F-22 program's 
ability to complete Engineering and Manufacturing Development (EMD) and 
the production program within the caps. A deferral of funds will 
require an extension of EMD, which in turn will exacerbate problems 
with diminishing manufacturing sources. For the production program, 
there are inflation impacts, industrial base slowdown and restart risks 
associated with the qualification of new vendors and subcontractors. 
Additionally, altering the production program will void previous 
commitments made with the F-22 contractor team which enabled it to 
minimize subcontractor risk and cost increases.
    Question. Are you experiencing any challenges during EMD that you 
would characterize as abnormal for a program at this stage in 
development?
    Answer. No. The F-22 has experienced two manufacturing challenges 
and a problem with debonding of the stabilator. All have been resolved. 
These issues are typical of the challenges encountered during 
Engineering and Manufacturing Development. Provided funding and 
quantity stability, we expect to overcome future challenges that may 
occur during Engineering and Manufacturing Development.
                                  t-6a
    Question. I see you plan to replace the T-37 with the T-6A (the new 
JPATS-Texan); obviously this would have an impact on the current pilot 
situation. Can you outline for me your distribution plan for the T-6A 
Texan II at pilot training bases and identify how this might impact the 
rate at which you produce new pilots?
    Answer. The Air Force currently plans to beddown the T-6A 
sequentially at Randolph AFB, TX, Laughlin AFB, TX, Vance AFB, OK, 
Columbus AFB, MS, and Sheppard AFB, TX. The timing of the transition 
from T-37 to T-6 at each base has been optimized to minimize the impact 
on pilot production rates--no impacts are expected under the current 
bed-down plan.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                            readiness impact
    Question. What is the readiness impact of maintaining a surge force 
in the Gulf over a long period of time?
    Answer. The principal readiness impacts of maintaining the surge 
force are increased workload and increased deployment time. These, in 
turn, adversely impact retention of our experienced people. By June 1, 
1998, nearly 50 percent of the aviation units presently deployed to the 
Gulf will exceed our maximum desired temporary duty rate of 120 days 
away from home station in a 12 month period.
                             airborne laser
    Question. How does the Airborne Laser fit into the Tactical missile 
defense architecture?
    Answer. The Theater Missile Defense (TMD) architecture has four 
layers or tiers: attack operations, boost phase intercept, midcourse, 
and terminal phase. ABL is the only boost phase system. Destroying 
enemy missiles in the boost phase is extremely important for several 
reasons: (1) presents an enemy with the possibility that missile 
debris, including the warhead, may fall back on their territory--in 
this way, ABL serves as a viable deterrent to the use of weapons of 
mass destruction; (2) reduces the number of missiles that the midcourse 
and terminal defense systems must engage, enhancing their 
effectiveness; and (3) kills missiles before any early release of 
submunitions (ERS), as ERS is a very significant challenge for hit-to-
kill defense systems.
    In addition to its role as a boost-phase ``shooter'', ABL will also 
possess significant sensing capability that will improve performance of 
other TMD layers by: providing quick and accurate missile launch point 
estimates which cue attack operations assets; passing trajectory data 
and impact point predictions on missile warheads to midcourse and 
terminal systems to narrow their sensor search patterns and extend 
their range; and predicting accurate and timely impact points to 
enhance passive defenses in the target areas.
                       joint strike fighter [jsf]
    Question. What is your position on the need for a Joint Strike 
Fighter alternative engine program?
    Answer. The Air Force supports the JSF Alternate Engine (AE) 
program. There is no operational requirement for an AE in the JSF. 
However, an AE program may offer some potential benefits such as: 
improved operational readiness since a single engine problem would not 
ground the entire JSF fleet; improved contractor responsiveness due to 
competition; and maintenance of the U.S. fighter engine industrial 
base.
    Question. How much will it cost?
    Answer. The total Joint Strike Fighter (JSF) Alternate Engine (AE) 
program cost is estimated at $1.8 billion. Currently, the Services have 
fully funded the AE program through its Concept Demonstration Phase 
(fiscal year 2003). Funding for the AE Engineering and Manufacturing 
Development Phase, scheduled to begin in fiscal year 2004, will be 
addressed by the Navy and Air Force in their respective fiscal year 
2000 POM's.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
                       long-range air power panel
    Question. Given the dynamics of the creation of the Long-Range Air 
Power Panel, most people think of it as studying the question of 
whether or not the Air Force should buy more B-2 bombers. The Panel is 
dealing with the same problem that we in Congress have had to address: 
the B-2 has some amazing capabilities, but further procurement would 
put the defense budget under enormous pressure. It is possible that the 
Panel will weigh the cost of buying another B-2 bomber against other, 
more cost-effective ways to keep our bomber force robust. Would you 
view it as appropriate for the Panel to come back with recommendations 
that affect the entire bomber fleet?
    Answer. The Panel's Report was released subsequent to the March 4 
hearing. The Long-Range Air Power Panel was established to evaluate the 
adequacy of current planning for United States long-range air power and 
the requirement for continued low-rate production of B-2 stealth 
bombers. The panel, as part of its evaluation and review, could 
consider: Trade-offs between additional B-2 bombers and other 
programmed DOD assets in meeting various scenarios; desirability of an 
increased rate of purchase of precision-guided munitions for aircraft 
in the existing B-2 fleet; the desirability of improving the low 
observable characteristics of the existing B-2 fleet; and affordability 
of additional B-2 bombers in the context of projected levels of future 
defense funding.
    The Long-Range Air Power Panel provide several far-reaching 
recommendations for fully exploiting the current B-1, B-2, and B-52 
bomber force, and for upgrading and sustaining the bomber force for 
longer term. These recommendations warrant careful review as the Air 
Force prepares its Program Objective Memorandum for the Department of 
Defense's fiscal year 2000-06 Future Years Defense Program.
                  start iii and bomber force structure
    Question. Although the START III process is stalled at the moment, 
given the fact that the Russian Duma has not yet ratified START II, 
these strategic arms reduction treaties affect the number of bombers 
deployed in a strategic role. Is the Air Force at all concerned about 
the impact of START III on the strategic or conventional bomber force? 
What effect could the treaty have on bomber force structure generally? 
Are we taking precautions so as not to jeopardize our conventional 
bomber capability?
    Answer. With decreasing forward-basing options and overflight 
concerns, sustaining our long-range bomber capability is a top priority 
to the Air Force. Without a clear START III framework, it is premature 
to discuss the effects this treaty would have on our bomber force 
structure. START III negotiations have not yet begun. Once we have 
clear START III guidelines, we will work closely with OSD and JCS to 
ensure our conventional and strategic force structure continues to meet 
our national security objectives.
                     deep attack weapons mix study
    Question. Am I right in understanding that the Deep Attack Weapons 
Mix Study came to its conclusions about bomber force structure needs 
based on certain assumptions in its models about what force structure 
was available for a deep strike? What assumptions did the DAWMS models 
make about the number of B-52's in the force structure? Did the DAWMS 
study ever include in its models' assumptions a force structure of 94 
B-52's? If not, what deep strike capabilities would additional B-52's 
bring into play?
    Answer. Part II of the Deep Attack Weapons Mix Study (DAWMS) was 
tasked to examine tradeoffs between long range bombers, land and sea 
based tactical aircraft and missiles used to strike the enemy's rear 
area. It was subsequently expanded to examine tradeoffs, including 
options that would involve more than 20 B-2's as matched against 
carrier assets and missile assets. The Quadrennial Defense Review (QDR) 
subsumed the assessment of force structure sufficiency while Part II of 
DAWMS was scaled back to only examine tradeoffs for more than 20 B-2's. 
Throughout all of these analyses (DAWMS as well as QDR), the Department 
of Defense used current, funded, ``combat coded'' aircraft. Although 
the size of the entire B-52H fleet is currently 94 aircraft, force 
structure analysis and deliberate war planning use only combat-coded 
aircraft. The number of combat-coded aircraft determines the number of 
aircrews available and level of war reserve spare parts. Of the 94 B-
52H aircraft in the inventory, 44 are combat-coded, 31 are attrition 
reserve, 12 are training aircraft, 6 are backup available aircraft, and 
1 is a test aircraft. Attrition reserve aircraft are only funded for 
recurring maintenance and aircraft upgrades, not operations and 
training. Thus, there are only enough aircrews, maintenance personnel 
and spare parts to support the 44 funded combat-coded aircraft used in 
QDR and DAWMS scenarios.
    It is difficult to assess the impact of additional B-52's without 
modeling and analyzing the interrelationships of joint force operations 
in a dynamic campaign environment. The addition of any type of deep-
strike capable asset would probably increase U.S. capabilities, 
however, the total number of assets deployed to a theater are sequenced 
and measured according to lift requirements and capabilities, and 
beddown limitations. As the addition of any asset would likely result 
in the removal/delay of others, the impact of adding B-52's can't be 
assessed independent of a thorough campaign analysis.
                             airborne laser
    Question. Looking ahead, what might be the major criteria the Air 
Force will use when it decides where to base the ABL?
    Answer. The ABL basing site survey is scheduled to begin in fiscal 
year 2000 with a decision in fiscal year 2001. Right now, the important 
criteria the Air Force will use to decide ABL basing include, but are 
not limited to:
  --Is there an established existing Base Infrastructure? (Use of 
        existing facilities helps minimize military construction 
        requirements.)
  --Can the airfield support a 747-400 aircraft (e.g., no modifications 
        to runway, approaches lights, taxiways, navigation aids, basic 
        POL (petroleum, oil and lubricants) storage, or tower 
        required)?
  --Does the base have sufficient ramp space (parking apron), alert 
        facilities and laser fuel servicing for seven aircraft?
                            pilot retention
    Question. If Congress wanted to address the problem of pilot 
retention more aggressively than the Administration is proposing to do, 
how might we best do that?
    Answer. The Air Force is optimistic the current pilot retention 
gameplan designed to reduce TEMPO, improve quality of life, restore 
compensation to original levels, increase pilot production, reduce 
pilot requirements, and improve personnel programs will help Air Force 
pilot retention. We feel that more time is needed to accurately 
evaluate the effects of our initiatives. Continued Congressional 
support for TEMPO reductions, quality of life improvements, aviator 
compensation initiatives and pilot production alternatives is key to 
ensuring the success of our efforts.
                           navigator training
    Question. My understanding is that the Air Force has had problems 
lately not only with the retention of navigators, but also with their 
training. Could you please comment on the new joint navigator training 
program? Is the Air Force satisfied that this joint training system is 
meeting the Air Force's needs?
    Answer. Joint training initiatives began in response to the April 
15, 1993 Secretary of Defense Memo on the ``Roles, Missions, and 
Functions of the Armed Forces of the United States.'' This memo 
identified three distinct areas for joint training: fixed-wing primary, 
advanced airlift/tanker/maritime patrol training, and Naval Flight 
Officer/Weapons Systems Officer (WSO)/Electronic Warfare Officer 
Training (EWO). Joint Undergraduate Navigator Training began in October 
1994 on a limited scale with all active duty WSO's receiving their 
training at NAS Pensacola, FL. Since October 1995, all Air Force 
Navigators, WSO's and EWO's have started their training at Pensacola. 
With the exception of heavy aircraft navigators (tankers, airlift, 
reconnaissance) who finish their advanced training at Randolph AFB TX, 
all others complete their training at NAS Pensacola or Corry Station 
FL. Current annual navigator production is set at 300 active duty 
students per year.
    The Air Force is satisfied with the quality of the graduates from 
the Navy program.
                            contracting out
    Question. In March of 1995, the services' personnel directors told 
the Armed Services Personnel Subcommittee that civilian personnel 
ceilings, not workload, cost or readiness concerns, are forcing them to 
send work to contractors that could have been performed more cheaply 
in-house. Also in that month, GAO reported that ``the personnel 
ceilings set by OMB frequently have the effect of encouraging agencies 
to contract out regardless of the results of cost, policy, or high-risk 
studies.'' Contracting out because of personnel ceilings raises some 
concerns. There is no public-private competition, because there simply 
aren't enough federal employees to do the work. We all know that the 
Air Force's civilian workforce will get smaller, and that there will be 
more contracting out. But if the Air Force has the money to do work 
that needs to be done, the Air Force should be able to use federal 
workers if in-house performance benefits the warfighter and the 
taxpayers. Is the Air Force adhering closely to the authorization and 
appropriations provisions that prohibit management by personnel 
ceilings? How can we make this prohibition stronger and ensure greater 
compliance with the will of the Congress? Isn't it true that using 
personnel ceilings is a relatively recent practice?
    Answer. The Air Force is complying with the intent of Congress and 
is adhering to the authorization and appropriations provisions that 
prohibit management by personnel ceilings. The Air Force has certified 
to Congress that, unless Congressionally directed, the Air Force does 
not use any constraints or limitations in terms of man years, end 
strength, full-time equivalent positions, or maximum number of 
employees in managing the civilian workforce. Consistent with 
Congressional, OMB, and Department of Defense guidance, the Air Force 
manages the civilian workforce based on workload requirements and 
budget. Congressional guidance such as the Fiscal Year 1998 National 
Defense Authorization Act contains language that prescribes limitations 
on the size of management headquarters and management support 
activities, requires reductions in the Defense Acquisition Workforce, 
limits the number of civilian employees of a military department who 
are non-dual status military technicians, and prescribes level of 
depot-level maintenance and repair that may be contracted for 
performance by non-governmental personnel. In addition, previous 
Congressional guidance, such as the National Performance Review Report 
and the Federal Workforce Restructure Act of 1994, has placed 
constraints and limitations on civilian workforce management. The Air 
Force does not use personnel ceilings as a management practice.
                               superbases
    Question. One of the themes of your testimony is that the Air Force 
is considering moving towards a new concept of basing--which you called 
``superbases.'' Would any Air Force bases currently fit into the 
superbase category?
    Answer. The Air Force is still in the early stages of developing 
this basing concept; thus, it is premature to say if any base currently 
fits into this category.
    Question. In your analysis of this concept, have you projected the 
military construction investments that would be required in order to 
create superbases? Would you agree that the more drastic the change to 
superbases, the more new construction would be required?
    Answer. Analysis has not started on the Milcon investments required 
to create this basing concept. The Air Force is in the early stages of 
developing a strategic basing concept which will focus on operational 
considerations and ensuring deployments are equitable and predictable 
to Air Force people. Consolidation of missions and bases could drive 
new construction requirements.
    Question. Do you have a notional estimate of how much military 
construction funding would be required to make such a shift in basing 
philosophy possible? How would this compare to the amount of money 
saved at bases to be closed?
    Answer. We do not have notional estimates on construction costs.

                          subcommittee recess

    Senator Stevens. Gentlemen, thank you very much. I am sorry 
to have kept you for so long.
    Again, I mean no offense about your statement, Mr. 
Secretary. I understand you must be frustrated. But God, I hope 
you don't do that. If you want to do it, give it to us and we 
will do it for you--if you really want to do it. But don't make 
a political decision. I think that would be very bad right now.
    Thank you very much.
    [Whereupon, at 12:46 p.m., Wednesday, March 4, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                       WEDNESDAY, MARCH 11, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:25 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Cochran, Domenici, Bond, Inouye, 
Bumpers, and Dorgan.

                         DEPARTMENT OF DEFENSE

                         Department of the Navy

                         Secretary of the Navy

STATEMENTS OF:
        HON. JOHN H. DALTON, SECRETARY OF THE NAVY
        ADM. JAY L. JOHNSON, CHIEF OF NAVAL OPERATIONS, U.S. NAVY
        GEN. CHARLES C. KRULAK, COMMANDANT, U.S. MARINE CORPS

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. My apologies to you, Secretary Dalton, 
Admiral Johnson, and General Krulak, I just made an opening 
statement to the group that's honoring 30 years of the Sea 
Grant Program, and like all events, it took longer than I 
anticipated.
    We are pleased to have you this morning to testify on the 
Navy and Marine Corps 1999 budget. The committee's initial look 
at the Navy and Marine Corps' budget suggests you have built a 
solid budget which lives within the funds available; however, 
there will be, I am sure, some challenges to the allocations 
you have recommended.
    We all recognize that people are the heart of our armed 
forces. The Navy has seen negative trends in pilot retention as 
well as a disturbing trend in recruitment, in general. The 
``Operations and maintenance'' account is basically flat 
compared to the fiscal year 1998, while there is no question 
that operational tempos have increased.
    It is our goal to try to make certain that the Navy and 
Marine Corps can maintain readiness within this budget request. 
Both the Navy and Marine Corps also face a number of near- and 
far-term acquisition challenges, the Navy must try to maintain 
a fleet of 300 ships, which requires the construction of 10 
ships, but the 1999 budget will support only 7 ships, and the 
commandant has consistently told us he needs $1.2 billion 
annually for modernization, and the 1999 procurement budget for 
the Marine Corps is $745 million.
    The Navy is beginning to develop the future aircraft 
carrier as well as the future surface combatant vessel, the DD-
21. In a budget that's likely to be flat to the year 2003, 
these competing demands will present the Navy, Marine Corps 
team, and the Congress with very difficult decisions on 
allocating the limited dollars that we have available for this 
modernization.
    We look forward to working with you on the fiscal year 1999 
budget, as well as planning for the future, and we're going to 
make your full statement a part of the committee's record.
    Before you proceed let me call on my colleague from Hawaii, 
the distinguished former chairman of this subcommittee.

                   STATEMENT OF HON. DANIEL K. INOUYE

    Senator Inouye. Thank you very much, Mr. Chairman. I wish 
to join you in welcoming Secretary Dalton, Admiral Johnson, and 
General Krulak. I believe our Nation is most fortunate to have 
this fine team to represent our Naval and Marine forces.
    I have been especially impressed to see how well they all 
work together to advance the goals of our sea surfaces. As many 
of us know, this has not always been the case, but in recent 
years it has been clear that the Navy and Marines have come 
together under the leadership of these gentleman to speak with 
one voice on the collective priorities.
    These are challenging times for the Navy and Marines. The 
Navy has been reduced from a planned force of 600 ships to one 
today not much above 300. Our Marine Corps has been able to 
hold on to much of its force structure, but are seeing manpower 
cut by 14 percent.
    The request before the subcommittee is $79.2 billion for 
Navy and Marine programs. This amount is approximately $1 
billion more than funded for the current fiscal year, but it is 
not all good news.
    Our counterpart Military Construction Subcommittee will see 
a cut of over $670 million for Navy and Marine programs, and so 
when you adjust for inflation the total Navy Department's 
budget has a real cut of 1\1/2\ percent.
    With that knowledge, I must say I'm concerned how the Navy 
and Marines will continue to maintain the quality and ready 
forces that they have today. I think we have seen some cracks 
already.
    In recent years we have had flying hours and spare part 
shortfalls. Today, the Navy is having a difficult time meeting 
its recruiting goals, and retention has been a constant 
struggle.
    At the same time I understand that we are asking more from 
our forces. Our marines are being tasked to respond to crises 
at record levels, and our carrier battle groups are being asked 
to re-deploy with less training time.
    Mr. Chairman, I join you in commending our witnesses for 
doing their best to respond to these challenges, but I'm 
concerned that we might be asking too much of them.
    In a balanced budget environment we cannot expect to 
provide more resources to address these problems, instead we 
must all work together to ensure that the resources we have 
spent are most effective in an efficient manner.
    There will be no margin for error, no room for that, no 
room to waste resources on duplication, and this fact must be 
realized and endorsed by the administration, by the Department, 
and by the Congress. It's not going to be an easy chore, but I 
do hope that when the dust settles we will continue to have a 
Navy and Marine Corps that will be able to carry on our 
Nation's work in the manner that we have been privileged to 
receive from them.
    I thank you very much.
    Senator Stevens. Does anyone have an opening statement that 
they wish to make?

               prepared statement of Senator Thad Cochran

    Senator Cochran. Mr. Chairman, I'd like to have the 
opportunity to put a statement in the record, I don't want to 
delay the hearing. We are happy to have the witnesses here, and 
we are kind of anxious to hear their testimony.
    [The statement follows:]
               Prepared Statement of Senator Thad Cochran
    Mr. Chairman, I'm pleased to join you in welcoming this 
distinguished panel of witnesses to review the budget request for the 
U.S. Navy and Marine Corps for fiscal year 1999.
    One of my concerns about the fiscal year 1999 request is the Navy's 
shipbuilding program, which I think falls far short of meeting the 
Navy's requirements for 300 ships. With the average life span of a ship 
being approximately 35 years, the Navy needs to procure approximately 
10 ships a year to maintain a 300 ship goal.
    Mr. Chairman, the Navy's procurement rate for new surface combatant 
ships will not meet their stated goal of 300 ships. The current Future 
Years Defense Plan calls for only 5 ships in fiscal year 2000, and only 
7 ships per year through fiscal year 2003.
    At this rate, we will procure an average of only 6.4 surface 
combatant ships per year from fiscal year 1999-2003. I also understand 
the Navy's projected ship procurement rate for fiscal year 2004-2015 
will also fall below the 10 ships per year required to meet the stated 
goal of a 300 ship Navy.
    I know there are some new ``smart'' technologies that can help 
reduce manning and other costs of operating and maintaining our fleet. 
There are also some initiatives such as the program to convert older 
CG-47 cruisers to Theater Ballistic Missile Defense capability and 
include Smart Ship control systems which can extend service life of 
these ship. I support these efforts.
    I am also pleased that the Navy has included full funding for the 
TAGS-65 Oceanographic Ship, the last ship in its class, which will 
provide much needed research and other support for the Navy's missions 
around the globe.
    While I support these new initiatives and programs, as well as the 
Navy's recently announced multi-year procurement of DDG-51 Destroyers, 
we must not lose sight of the ever-widening gap that is developing 
between our 300 ship goal and the Navy's actual and projected ship 
procurement rates.
    Other issues that I hope our witness will address today include 
OPTEMPO and the Readiness of our sailors. According to the Navy's 
Posture Statement, readiness of deployed units remain high, but 
constrained resources and the pace of operations are affecting the 
readiness of non-deployed forces. Several recent articles have 
highlighted these concerns.
  --January 15, 1998 Norfolk Virginian-Pilot article quoted a senior 
        Norfolk officer as saying ``Keeping two carriers in the gulf is 
        causing us some real headaches.'' ``Hopefully the next deployer 
        (Stennis) will go out on time, but, after that, all bets are 
        off.''
  --March 5, 1998 Washington Times reported that in testimony to 
        Congress, VADM Dan Oliver, the Navy's senior personnel expert, 
        indicated it is ``very difficult'' to keep pilots, submariners 
        and others. He cited the hectic pace of Navy life and the loss 
        of a chance to command a ship, due to the decommissioning of 
        many ships, among the reasons for retention problems.
  --March 7, 1998 San Diego Union Tribune reported that during a March 
        6, 1998 hearing of the Readiness Subcommittee of the House 
        National Security Committee a ``Marine sergeant told 
        congressman that some units have .50-caliber machine guns 
        manufactured during the 1940's and it can take up to 18 months 
        to get the heavy weapons repaired or replaced.''
    Mr. Chairman, I know the Secretary, the CNO and the Commandant are 
well aware of these problems and I look forward to hearing from them 
today.

                 STATEMENT OF HON. CHRISTOPHER S. BOND

    Senator Stevens. Thank you. Senator Bond.
    Senator Bond. Thank you, Mr. Chairman. I will be brief. I 
join you in welcoming the Secretary, the Admiral, and General 
Krulak, and I share the view of our distinguished ranking 
member that your team is being asked to carry a major portion 
of the burden, while not being adequately resourced.
    We hear news, the Pentagon is having difficulty trying to 
realign its forces to cover both the Arabian Gulf presence and 
the re-emerging threats to peace and security in the Balkan 
regions, and these are not close to being the two major 
regional contingencies [MRC's] we thought we'd be ready to 
face.
    I know that many of my colleagues would join in expressing 
concern over the services' ability effectively to meet their 
mission requirements making deep and risky cuts in critical 
supply, stocks, accelerating appreciation, not to mention the 
additional strain put on personnel, and we are all concerned 
about the abysmal retention rates of pilots in the services, 
and I submit that simply throwing money at the problem is not 
the answer. I gather the considerable bonus package only 
engendered about a 3- to 4-percent increase in the retention 
rate.
    I understand that many of the people who joined the service 
did so for very noble reasons, and the financial considerations 
are not the entire problem, and the exodus of individuals now 
spans the rank structure, and I think that we are seeing some 
problems with incentives for command being hamstrung when 
junior officers are paid more than their seniors.
    I hear from people in the service that over the years, 
recent years, the individual tactical flight time has been 
dramatically curtailed. I am sure that way back, Admiral, your 
logbook had only a few blank lines in the monthly accounting of 
your flights, and I venture to say that a lieutenant today has 
a lot more blank space in the logbook, and much of the time 
dedicated to other than war contingencies is not really 
increasing their warfighting skills.
    I think it is also important that we reflect on the 
intangibles, which made you, Admiral, and you, General, when 
you were butter bars, look up to the unit commanders, which 
when you became commanders gave you authority and 
accountability to stand up and lead.
    We have warned in this committee over the years that the 
Department of Defense's policy of low-balling funding 
requirements would exacerbate the fiscal problems facing all of 
the services' abilities to conduct the operations required.
    As I understand from Dr. Hamre's comments last week, you 
are already expending funds from the fourth quarter of the 
fiscal year 1998 budget for missions being conducted today, and 
we are only in March.
    The emergency supplementals this year are going to be very 
important, but some of these operations have extended way 
beyond any contingency, and we need to get some straight 
answers and some straight priorities from the Department of 
Defense.
    On another very important note, Mr. Secretary, we are 
looking forward to the commissioning of the U.S.S. Harry S. 
Truman, we have made a commitment to another carrier, and I am 
also concerned that we accelerate the evaluations of the F/A-
18E/F not to skip any testing, but to work as hard as we can to 
cure any anomalies, then we can begin a robust and, we believe, 
necessary multiyear procurement.
    We want to do everything. I am personally committed to 
providing the men and women who fly from the carriers the 
finest and most advanced aircraft, to give them the edge so 
critical to today's high-tech, high-speed, highly dangerous air 
combat arena, and I will have more to talk about in that in the 
Q&A period.
    Thank you, Mr. Chairman.
    Senator Stevens. Senator Dorgan, do you have an opening 
statement?

                    STATEMENT FROM HON. BYRON DORGAN

    Senator Dorgan. Mr. Chairman, let me just put a statement 
in the record, I am anxious to hear the witnesses instead.
    [The statement follows:]

               Prepared Statement of Senator Byron Dorgan

    I would first like to thank these capable witnesses for 
their appearance before this committee. I recognize, as the 
other Committee Members do, that their job is not an easy one, 
given the current state of world affairs and the increased 
demands being placed on our men and women in uniform. I am 
particularly impressed by the retention rates of the Navy and 
Marine Corps. The statistics in this area say much about the 
efforts and the abilities of the Secretary, the Chief of Naval 
Operations and the Commandant of the Marine Corps, as well as 
those who work for them. Although we know more must be done in 
this area, the Navy and Marine Corps are to be commended.
    The burden for managers in the military is a familiar one 
in government today: doing more with the limited funds 
available. I would hope that the questions I pose would be 
taken in that light. As other members of this committee, I am 
committed to doing the most I can for our military personnel 
with the funds we have available. Most of all, I want to ensure 
that the problems that are causing the exodus of some of our 
most qualified people from the military are solved.

    Senator Stevens. Thank you. Mr. Secretary, we are pleased 
to have your statement. All of your statements will be in the 
record.

                  opening remarks of Secretary Dalton

    Secretary Dalton. Well, thank you very much, Mr. Chairman, 
Senator Inouye, distinguished members of this committee.
    This is my fifth time to appear before this committee, and 
let me say what a privilege and honor it is to be here to 
represent the Department of the Navy.
    I am also very proud to be here with these two outstanding 
officers who lead our Navy and Marine Corps. They do an 
outstanding job, and as you say, Senator Inouye, we really do 
work together as a team. The Navy and Marine Corps team is, 
indeed, working very well together.
    I would like to take a few minutes to reflect on where the 
Navy Department has been in the last few years, where we are 
today, and where we are headed. I would like to break that 
down, if I could, in talking operationally, programmatically, 
and in personnel.

                             Operationally

    First of all, operationally. We are our Nation's 911 force. 
When there is a problem, it is the Navy-Marine Corps team that 
gets the call. That is very evident today in the Arabian Gulf.
    Today, we have two carrier battle groups, and one 
amphibious ready group there, and I am very proud of the men 
and women who are there doing such an outstanding job.
    While there is debate today about the recent agreement that 
was made between the Secretary General of the United Nations 
and Saddam Hussein, we simply would not have that agreement to 
debate had it not been for the presence of the Navy-Marine 
Corps team in the gulf. Winston Churchill had it right when he 
said, ``The best Ambassador is a warship,'' and those warships 
that were there showed the resolve of this Nation, and, indeed, 
provided an opportunity for that agreement to be signed.
    Similarly, things have happened like that around the world 
in the last few years: restoring democracy to Haiti; bringing 
the parties to the peace table to make the Dayton accords 
possible; bringing stability in the Taiwan Straits a couple of 
years ago, when that troublesome problem arose; the rescue of 
Capt. Scott O'Grady; and the noncombatant evacuation operations 
in Albania, and the former Zaire. From A to Z, the Navy-Marine 
Corps team has been there, has responded, has responded 
professionally, has answered all bells, and I am very proud of 
the job the Navy Department has done.
    Operationally, this committee has been extremely supportive 
of the Navy Department.
    I am grateful to you, and we have come to you to ask for 
support for carriers, submarines, ships, airplanes, big-deck 
amphibious ships, and quality of life improvements for our 
people. This committee has not only responded and supported our 
request, but in the past has, indeed, enhanced our requests, 
and we are grateful to you.
    I pledge to you that we will continue to pursue initiatives 
like acquisition reform, so that we can provide the highest 
quality of naval service possible for each tax dollar that we 
have as a resource.

                               Personnel

    In the area of personnel, I am so proud of the outstanding 
men and women of the Navy Department. We simply have the finest 
men and women serving in the Navy Department today that we have 
ever had. It is no secret that in the last few years we have 
had some difficult problems and challenges in that regard. We 
all know that there was major adverse publicity a few years ago 
with respect to very poor behavior on the part of some of our 
people. We all know about a major cheating scandal we had at 
the Naval Academy just a few years ago. However, we have 
addressed those issues and attacked them.
    A recent report from an outside group, led by Adm. 
Stansfield Turner and the president of Goucher College, showed 
that the Naval Academy is, indeed, fulfilling its mission 
today. We have attacked the problem with respect to the 
behavior of our people, with training required by every one of 
our people, education, to emphasize our core values of honor, 
courage, and commitment to ensure that our sailors and marines 
treat their shipmates with dignity and respect. I am very proud 
of the progress that we have made in that regard. It is 
something we need to continue to work on, and, indeed, we are.
    We have been very innovative with things like the battle 
stations for our recruits at Great Lakes, and the crucible that 
the Marine Corps is using at Parris Island and San Diego, to 
enhance the training for our people. We made significant 
progress with diversity in our officer ranks, and I am proud of 
that.
    Our vision for the future is one that is bright. We are 
focused on our ``Forward from the Sea'' vision. This is 
something that we produced several years ago, in 1994, but it 
is the right vision. We haven't tried to reinvent ourselves and 
change that every 2 years. It is the right vision, and we are 
moving forward, moving forward with it.
    We are committed to things like the revolution in military 
affairs and the revolution in business affairs, to bring things 
on like information technology for the 21st century, network 
centric warfare, and cooperative engagement capability.
    We are thinking outside the box, utilizing things like the 
Navy's fleet battle experiment, and the Marine Corps 
warfighting lab, things like the Hunter Warrior, Urban Warrior. 
We are moving forward and preparing this 911 force of the Navy 
Department for the 21st century.

                            Programmatically

    Mr. Chairman, I am proud of the budget that we have 
presented to this committee. It's a solid plan, and I seek your 
support for it. I would like to emphasize our priorities. F/A-
18E/F Super Hornet was our top priority last year, it is again 
this year. We are asking for funding of advanced procurement 
for CVN-77. It is very important that we move forward with 
that, and DD-21, a land attack surface ship for the 21st 
century, of revolutionary importance. The intercontinental 
missile defense, the V-22, the AAAV, these are all programs for 
which we ask your support.
    We face challenges in readiness, retention, and recruiting. 
These are indeed challenges we are addressing, and we will, 
indeed, address them for the future. There is no question that 
the economy has been strong, and has complicated issues with 
respect to retention and recruiting.
    Mr. Chairman, I ask for your very strong support and the 
support of this committee for the emergency supplemental that 
is before this body. We simply cannot deal with any offsets 
with respect to that. We sincerely request your support for the 
emergency supplemental.
    Similarly, we have a reprogramming request before this 
committee of $220 million for personnel issues, and we would 
ask for your support for that.
    We simply have too much infrastructure, and I would 
encourage this body to support an additional round of base 
realignment and closure. If we are spending money on things 
that we do not need, like too much infrastructure, then we do 
not have adequate resources to deal with some of the issues 
that you raise with respect to recapitalization and personnel.
    Finally, Mr. Chairman, one additional area that I would 
like to ask for the support of this body is the Law of the Sea 
Treaty. I am concerned that the United States is not a party to 
the treaty. This absence is incompatible with our Department's 
active engagement and leadership in maritime affairs, and has 
potentially negative effects for the credibility of our overall 
national maritime policy. The treaty, in its improved current 
form, is a winning proposition for the United States, and I ask 
each of you to support its ratification at the earliest 
opportunity.

                           prepared statement

    In closing, Mr. Chairman, I would just like to thank you 
again and thank this committee for the support you have 
provided the Department of the Navy. On behalf of the sailors, 
marines, and civilians of the Department of the Navy it is my 
great honor to represent, I thank you very much for your 
support, and ask for your continued support. We look forward to 
working with you, and I look forward to responding to your 
questions. Thank you.
    Senator Stevens. Thank you, Mr. Secretary. We should be 
finished with the reprogramming on the personnel items this 
week.
    [The statement follows:]
                  Prepared Statement of John H. Dalton
    Mr. Chairman, Senator Inouye, Distinguished members of the 
Committee. It is a pleasure for me to address you for the fifth year on 
the state of the United States Navy and Marine Corps.
    America's forward-deployed naval forces are engaged around the 
world on a daily basis to carry out the National Military Strategy. Our 
forces are shaping the international environment, responding to the 
full spectrum of crises, and preparing now for an uncertain future. 
There is an enduring need for the forward presence of our Navy-Marine 
Corps Team. That need was validated by Secretary Cohen in his 
Quadrennial Defense Review, the report of the National Defense Panel 
and the reality of day-to-day global involvement of our Sailors and 
Marines.
    Our Navy and Marine Corps in the Arabian Gulf are demonstrating 
today the relevance of forward-deployed naval forces. In a region where 
land basing options are limited, our two carrier battle groups and one 
amphibious ready group on station there are a powerful symbol of 
American resolve. I believe that resolve, backed up by the awesome 
strike potential of our ships and aircraft, played a major role in the 
latest agreement between Iraq and the United Nations. As Winston 
Churchill once said, ``A warship is (indeed) the best ambassador.''
    The staying power of our forward-deployed expeditionary forces will 
also be crucial as we maintain our current force level in the Arabian 
Gulf for the foreseeable future. America's resolve to do the right 
thing does not have an expiration date, and the Navy-Marine Corps Team 
remains up to the task. We will remain ready to respond, anytime--
anywhere.
    I want to refer back, briefly, to 1992. Where we have been as a 
Department since that time illustrates how we are postured now, and for 
the future. We began, in 1992, a continuous process of transformation 
with publication of ``. . . From the Sea'', which reflected the 
dramatic change in the international security environment.
    Our transformation process continues today, exploiting technologies 
from the Revolutions in Military and Business Affairs to give our 
forces the power and efficiency to dominate the battlefields of 
tomorrow. It is a process of innovation and growth which leverages the 
unmatched power, timeliness and operational independence of aircraft 
carrier battle groups and amphibious ready groups.
    Not only am I immensely proud of where we stand today, but I 
believe we have a clear, forward-looking vision in place that will 
guarantee the right naval forces for the future.
    Certainly, the future holds great challenges for the Navy and 
Marine Corps. The unrelenting operational demands on our forces and our 
people are threatening to diminish our readiness. While we have not 
seen declines in readiness in our deployed forces, the overall tempo of 
operations is beginning to weaken our ability to train the forces which 
will follow them on station. We must ensure adequate resources, 
training and quality of life initiatives to maintain the readiness of 
our Sailors, Marines and civilians.
    We will need strong, positive leadership and teamwork now, by this 
Department and by the Congress, to ensure our naval forces will 
continue to be just as ready in 2010 and 2020. I want to discuss some 
of the budget and program issues that are important to the future of 
the Navy and Marine Corps.
    First, the budget. We have made a concerted effort over the past 
year to improve what is already an active, engaged process for the 
budget, both within the Department of the Navy, and with Congress. I 
believe, as a result, we have a positive relationship which makes our 
tough choices more clear, and I thank each of you for making that 
relationship a healthy reality.
    With regard to modernization efforts, our programs will continue to 
harness the potential of the Revolution in Military Affairs (RMA). The 
Department of the Navy is at the leading edge of this effort, actively 
embracing strategic concepts such as information warfare, cooperative 
engagement capability, urban warfare, and network-centric warfare.
    We are encouraging the creation of innovative concepts, through the 
Navy's Fleet Battle Experiments, the Marines' Warfighting Laboratory, 
the upcoming Navy Warfare Development Command at Newport, as well as 
through active leadership to stimulate ideas from within the force.
    The revolution in military affairs is being aggressively coupled 
with the Revolution in Business Affairs (RBA) by the Department of the 
Navy. We are doing so by streamlining processes in procurement and 
acquisition, support services and logistics, through the use of 
commercial off-the-shelf technology, and by plans to reorganize and 
reduce our infrastructure. These programs will guarantee future 
savings, but they require dedicated funds to allow us to capitalize on 
these revolutions.
    Our major modernization programs are on track, and I thank you for 
this committee's active support. We have forwarded a plan for 
accelerated procurement of CVN 77, which will be the first new carrier 
of the 21st century, a dramatically advanced platform, and will provide 
the vital bridge to our next generation carrier, CVX.
    The F/A-18 E/F Super Hornet promises a great future for carrier-
based aviation. The over-publicized wing drop problem has been managed 
well and we are now in the process of selecting the best fix among 
several workable options to fully correct it. Our test plan is on track 
to finalize our solution next month. This will allow us to incorporate 
our fix into all production aircraft. Super Hornet represents what we 
demand for our carriers--the best strike asset we can afford.
    The Joint Strike Fighter (JSF) is an integral part of our forward-
looking plan for naval aviation. I have made visits to both design 
teams, and I am confident a healthy competition is in place that will 
guarantee the Navy and Marine Corps the right aircraft for our next 
generation strike aircraft needs. Our goal is to get the most modern 
aircraft to the fleet as quickly and affordably as possible. Super 
Hornet and JSF do exactly that.
    The Surface Combatant 21 family, led by its first member, the 
multipurpose DD 21, with its focus on land attack, will help 
revolutionize the Navy's shipbuilding and warfighting strategy. This 
modern surface combatant represents an exciting mainstay for our battle 
groups of tomorrow, because of the tremendous leap in effectiveness it 
will bring, at significant manpower and cost savings.
    Another exciting program that we continue to develop is the Theater 
Ballistic Missile Defense (TBMD) capability that is embedded in our 
Aegis cruisers and destroyers. These powerful ships are a promising 
first-line of defense for our forward-deployed joint forces.
    Our shipbuilding plan, overall, produces technologically superior 
ships such as DDG 51, LPD 17 and the New Attack Submarine. The average 
rate of production in the future years defense plan (FYDP) is adequate 
in the near term to support the projected fiscal year 2003 force of 
about 300 ships. However, beyond the FYDP, this rate of production will 
not permit us to maintain the required ship and aircraft inventory.
    The operational commitments undertaken by the Navy and Marine Corps 
today require a certain force level to satisfy both personnel optempo 
concerns and world-wide presence missions. Our rate of new ship and 
aircraft construction must recapitalize the force in the long term to 
maintain this balance. We need to ensure that, in the future, adequate 
modernization funding is provided in order to fulfill tomorrow's 
tasking.
    The Navy and Marine Corps' worldwide commitments today include the 
extended operations in Bosnia. In order to continue our forward-
presence in this critical theater, we will need your support for a 
supplemental budget request to meet additional costs for the Bosnia 
operation in 1998.
    Let me turn now to what is my favorite topic: the Sailors, Marines 
and civilian employees of the Department of the Navy. They are the most 
proud, professional, diverse and intelligent this Nation has ever 
known. They are the primary reason we remain the world's greatest Navy 
and Marine Corps.
    We ask a great deal of our people, and we continue to ask more. Our 
forces today must be ready for a vast array of mission tasking, across 
the full spectrum of combat and non-traditional uses of military force. 
As a result, our people are warriors in the classic sense, and 
compassionate and discriminate in the human sense. This requires time, 
training and a truly multi-faceted and motivated Sailor or Marine.
    We are proud of the tailored programs we have developed to 
transform the best of our society into Sailors or Marines. New 
leadership development programs at boot camp--``Battle Stations'' for 
the Navy, and the ``Crucible'' for the Marine Corps--are already 
forging smarter Sailors and Marines, and giving them the skills and the 
mindset to capitalize on the Revolution in Military Affairs of which 
they will be a vital part.
    On the recruiting front, we continue in our efforts to attract 
highly qualified and culturally diverse officer and enlisted 
candidates. This is a challenging time: for the first two months of 
fiscal year 1998, Navy recruiting accessed only 91 percent of goal. If 
that trend continues through fiscal year 1998, it may lead to an annual 
accession goal shortfall of 4,000 personnel. On the Marine Corps side, 
we are on track with our accession goals.
    We are addressing the challenge for Navy recruiting head-on with a 
number of new initiatives, including direct involvement by our top 
leadership. I have personally prepared a letter to go to over 20,000 
high school principals around the country to solicit their support for 
quality recruits. I would ask that wherever possible, each of you use 
your leadership position on this committee to encourage your peers when 
you are home, to mention the opportunities available in the Navy and 
Marine Corps.
    Retention, also, is a critical area of focus for us. Our people are 
our greatest resource, and indeed, my highest priority. We will 
continue to listen carefully to the concerns of our Sailors, Marines 
and civilians, and we will continue to search for innovative ways to 
improve health care, retirement, deployment schedules, housing and 
other areas. We must work together in continuing to attract and retain 
the highest quality people for our Navy-Marine Corps Team.
    Success in the two critical areas on which I have focused--
modernization of the force, and taking care of our people--requires 
significant investment, now. Much of that investment is in place with 
our aggressive initiatives to improve efficiency in everything we do. 
But much more will have to come from a reduction in our infrastructure. 
We simply have too much infrastructure for the size of the force we 
envision in the next few years. To continue to operate this way is not 
good business.
    The Department of the Navy will continue to make the tough choices 
that it must in the budget process. I ask each of you to help us do the 
same, to reduce our overhead, anywhere that we can, primarily through 
additional base closures in the years ahead.
    One additional area I must mention is the Law of the Sea Treaty. I 
am concerned that the United States is not a party to the Treaty. This 
absence is incompatible with our Department's active engagement and 
leadership in maritime affairs and has potentially negative effects for 
the credibility of our overall national maritime policy. The Treaty, in 
its improved, current form, is a winning proposition for the U.S., and 
I ask each of you to consider its ratification at the earliest 
opportunity.
    In closing, let me say that I am tremendously proud to serve as 
Secretary of our Nation's Navy-Marine Corps Team. We are a forward-
thinking, forward-looking organization: we are both America's premier 
fighting force, and a positive influence for sustaining peace on the 
world stage.
    We currently have a near-continuous presence in four major regions: 
the Mediterranean Sea, the Arabian Gulf/Indian Ocean, the Western 
Pacific and the Caribbean. On any given day of the year, day-in and 
day-out, over half of our Navy-Marine Corps Team is underway, at sea. A 
major challenge we face for future operations is ensuring that we can 
continue to meet this operational tempo required of our forces--both in 
terms of people and equipment.
    Let me repeat that our vision of the way ahead is sound, and is in 
line with the Nation's fundamental interests. But the means to get 
there are becoming less and less clear. I believe, as I know you do, 
that we have the appropriate vision, and it is worth fighting for. I 
will say as I did earlier, we must ensure adequate resources, training 
and quality of life initiatives to ensure our Sailors and Marines 
remain forward-deployed and ready, anytime anywhere.
    Thank you for your leadership, enthusiasm and support for our 
Sailors, Marines and civilians who stand the watch. I appreciate the 
opportunity to appear before you today. I look forward to responding to 
your questions.
                                 ______
                                 
             Department of the Navy 1998 Posture Statement
    This posture statement reflects the continuing process of 
transformation initiated by the Department of the Navy in 1992 with 
publication of ``. . . From the Sea''--a bold step taken to ensure the 
Navy-Marine Corps Team remained at the forefront of America's defenses 
in a rapidly changing world. Since then, ``. . . From the Sea'' has 
been refined and expanded upon with publication of ``Forward . . . From 
the Sea'' (1994), ``Operational Maneuver . . . From the Sea'' (1996), 
and ``The Navy Operational Concept'' (1997).
    Our transformation process continues today, exploiting technologies 
from the Revolutions in Military and Business Affairs to give our 
forces the power and efficiency to dominate the battlefields of 
tomorrow. By doing so, we are well on the way to achieving our vision 
of highly effective, forward-deployed naval forces capable of shaping 
the peace, responding to the full spectrum of crises, and preparing for 
future threats. It is a process of innovation and growth which 
leverages the unmatched power, timeliness, and operational independence 
of aircraft carrier battle groups and amphibious ready groups which 
serve as the foundation of our Nation's forward defense.
    The future holds great challenges for the Navy and Marine Corps, 
both operationally and organizationally, as we strive to protect our 
Nation's strategic investment in the world's finest naval force. We 
must ensure adequate resources, training, and quality of life 
initiatives maintain the readiness of our Sailors, Marines and 
civilians, and allow them to continue their heritage of Honor, Courage 
and Commitment.
    This posture statement illustrates the framework adopted by the 
Department of the Navy to achieve our vision of 21st century 
excellence, strengthening the unrivaled Navy-Marine Corps Team so vital 
to America's present--and future--security.

                                   John H. Dalton,
                                             Secretary of the Navy.
                                   Admiral J.L. Johnson, USN,
                                         Chief of Naval Operations.
                                   General C. C. Krulak, USMC,
                                    Commandant of the Marine Corps.
                       the navy-marine corps team
Answering the Nation's Call: Anytime, Anywhere
    Forward-deployed and combat ready, naval forces embody the 
President's National Security Strategy for a New Century. Our nation 
recognizes the vital role of military engagement in supporting U.S. 
national interests and objectives. Because they are forward deployed 
every day, naval forces are a critical component of our nation's global 
engagement strategy. As delineated in the National Military Strategy, 
they provide the essential tools to shape the international 
environment, to respond to the full range of crises, and to prepare for 
an uncertain future.
    We live in a complex and ever-changing world. The growth during 
this decade of democracies and free market economies is most 
encouraging. Yet nationalism, economic inequities, and ethnic tensions 
remain a fact of life and challenge us with disorder--and sometimes 
chaos. As both positive and negative changes take shape, the United 
States has become what some call the ``indispensable nation''--the only 
nation with the technological capability and acknowledged benevolent 
objectives to ensure regional stability.
    The National Defense Panel recently pointed to the rapidly changing 
international environment and underlined the requirement for a 
``transformation strategy,'' a coherent plan for creating the forces 
the United States will need to deal with the challenges ahead. The 
Navy-Marine Corps team recognized the need for such a strategy more 
than five years ago, and began to transform itself with the seminal 
white paper ``. . . From the Sea.'' That white paper, its companion 
``Forward . . . From the Sea,'' and the concepts outlined in 
``Operational Maneuver . . . From the Sea'' and ``Forward . . . From 
the Sea: The Navy Operational Concept'' changed the direction of the 
Department of the Navy dramatically and began just such a 
transformation strategy.
    The focus of this strategic concept is to influence events ashore 
directly and decisively from the sea--anytime, anywhere. The strategic 
concepts embedded in ``. . . From the Sea'' and ``Forward . . . From 
the Sea'' easily adapted to the Quadrennial Defense Review tenets of 
shaping the international environment, responding to the full spectrum 
of crises, and preparing now for an uncertain future. Shaping and 
responding require presence--maintaining forward-deployed combat-ready 
naval forces. Being ``on scene'' matters! It is and will remain a 
distinctly naval contribution to peacetime engagement. As sovereign 
extensions of our nation, naval forces can move freely across the 
international seas and be brought to bear quickly when needed. The 
transformation that the Navy-Marine Corps team has begun seeks to build 
on these enduring attributes of naval power and ensure that they remain 
our strengths in the next century.
    The balanced, concentrated striking power of aircraft carrier 
battlegroups and amphibious ready groups lies at the heart of our 
nation's ability to execute its strategy of peacetime engagement. Their 
power reassures allies and deters would-be aggressors, even as it 
demonstrates a unique ability to respond to a full range of crises. 
From their forward-deployed locations in the Mediterranean, the Arabian 
Gulf, the Western Pacific and the Caribbean, naval forces offer the 
National Command Authorities (NCA) a wide range of options--in effect a 
``rheostat'' that can be dialed up or down to put the appropriate 
forces on scene when needed whatever the evolving crisis.
    Operating in international waters and unfettered by constraints of 
sovereignty, naval forces are typically on scene or the first to arrive 
in response to a crisis. The inherent flexibility of naval forces 
allows a minor crisis or conflict to be resolved quickly by on-scene 
forces. During more complex scenarios, naval forces provide the joint 
force commander with a full range of options tailored for the specific 
situation. From these strategic locations, naval forces shape the 
battlespace for further operations.
Tradition and Teamwork: Hallmarks of Success
    Tradition is embedded in the Navy-Marine Corps team. As we look 
toward the new millennium, we emphasize our traditional core values of 
honor, courage, and commitment. These timeless ideals remain at the 
center of everything we do.
    Teamwork is another Navy-Marine Corps trait. It ranges from 
teamwork within individual units, to cooperative efforts among units, 
to coordination throughout the Department of the Navy. The Navy and 
Marine Corps also can integrate forces into any joint task force or 
allied coalition quickly.
Charting a Course for Future Success
    The Department of the Navy is no stranger to innovation or to 
``Revolutions in Military Affairs.'' It has undertaken three such 
revolutions in the past one hundred years: the first occurred in the 
1890's; another with carriers and amphibious warfare in the 1920's and 
1930's; and the third with the ballistic missile submarine force in the 
1960's.
    In ``. . . From the Sea'' and ``Forward . . . From the Sea,'' we 
have sown the seeds of yet another revolutionary change in naval power, 
one that will ensure our continued contribution to our national 
security in a changing world. It revolves about an easily understood 
axiom: the purpose of naval forces is to influence events ashore 
directly and decisively from the sea--anytime, anywhere.
          naval expeditionary forces: full spectrum capability
    The President's National Security Strategy for a New Century 
identifies engagement as a critical ingredient in maintaining peace and 
stability around the world. Our National Military Strategy specifies 
three tasks: shape the international environment, respond to the full 
spectrum of crises, and prepare now for an uncertain future.
Shaping the International Environment
    Naval forces project U.S. influence and power abroad in ways that 
promote regional economic and political stability, which in turn serves 
as a foundation for prosperity. Naval forces remain continually engaged 
around the world as a visible tool of U.S. foreign policy. The power-
projection capabilities of our aircraft carrier battle groups and 
amphibious ready groups provide a potent response to aggression. Our 
forces shape the local security calculus by being there--a visible, 
powerful presence with a full range of options. These same forces 
reassure allies of our commitment to regional peace and stability. 
Routine exercises with allied forces enhance coalition interoperability 
and add to our collective ability to respond to attack. Sailors and 
Marines do this every day of the year. Nearly one-third of Navy and 
Marine Corps operational forces--more than 60,000 men and women and 100 
ships--are deployed around the world. Carrier battle groups and 
amphibious ready groups provide near-continuous presence in four major 
deployment areas: the Mediterranean Sea, the Arabian Gulf/Indian Ocean, 
the Western Pacific, and the Caribbean. In Japan, we anchor regional 
stability with the forward-stationed Independence (CV 62) Battle Group 
and the Belleau Wood (LHA 3) Amphibious Ready Group. Closer to home, 
the Navy's Western Hemisphere Group is shaping the environment by 
strengthening the bonds to South and Latin American allies. Each of 
these strategic locations provides a launching point for quick reaction 
by naval forces to crises virtually anywhere.
    Peacetime engagement is our primary means of shaping the 
international environment; it is a traditional role for the Navy and 
Marine Corps. Our forces participate in an array of engagement 
activities, becoming forces to be reckoned with in the regional 
security environment. They participate in a complete range of shaping 
activities--from deterrence to coalition building--establishing new 
friendships and strengthening existing ones during port visits around 
the world. These visits promote stability, build confidence, and 
establish important military-to-military relationships. In addition, 
port visits provide an opportunity to demonstrate good will toward 
local communities, further promoting democratic ideals.
    Deterrence is another shaping factor. Because foreign nuclear 
weapons remain a threat, we continue our vigilant efforts to discourage 
their proliferation and use, along with other weapons of mass 
destruction. This nation must maintain a credible nuclear-deterrent 
capability. Our ballistic missile submarine (SSBN) fleet is a key 
component of peacetime deterrence. The reliability and security of 
their command-and-control systems, and the superb accuracy and inherent 
flexibility of their weapons combine to convince any adversary that 
seeking a nuclear advantage--or even nuclear parity--would be futile. 
Stealth and mobility make this force the most survivable element of our 
strategic nuclear triad.
    However, we seek to deter more than simply the use of weapons of 
mass destruction. We also seek to prevent aggression with conventional 
forces. While the total capability of our armed forces is a factor in 
such conventional deterrence, it is the visible, forward-deployed naval 
expeditionary forces that have perhaps the most critical role. Naval 
forces act as local extensions of our sovereign national territory, 
able to maneuver in international waters unencumbered by the political 
constraints that may limit other forms of military power. Routine naval 
deployments signal both friend and foe of our commitment to peace and 
stability in the region. This demonstrated ability to respond rapidly 
to crises--and to fight and win should deterrence fail--offers a clear 
warning that aggression cannot succeed. Moreover, the ability of the 
forward-deployed forces to protect local allies and secure access 
ashore provide a guarantee that the full might of our joint forces can 
be brought to bear. Taken together these visible U.S. capabilities 
foreclose opportunities for aggression and help shape a stable local 
peace.
    One key element of this conventional deterrence is helping allies 
to help themselves. The Navy and Marine Corps execute a full exercise 
schedule with nations throughout the world. The expeditionary nature of 
our forces promotes interaction with the sea, land, and air forces of 
numerous allies. Each exercise, large or small, directly contributes to 
successful coalition building. Credible coalitions play a key role in 
deterring aggression and controlling crises. Our routine interactions 
promote trust and confidence, and encourage measures that increase both 
our security and that of our allies.
    The Navy and Marine Corps role in both conventional and strategic 
deterrence, including laying the foundations for future coalitions, is 
a critical ingredient in our national strategy of peacetime engagement. 
Forward naval forces truly shape our international environment every 
day in tension spots around our uncertain world.
Providing Options for an NCA ``Rheostat''
    One enduring strength of naval forces is their balance. The 
combined capabilities of a carrier battle group and an amphibious ready 
group offer air, sea, and land power that can be applied across the 
full spectrum of combat. They are positioned forward, able to provide 
an immediate, highly visible crisis-response capability, but they can 
also be unobtrusive by operating beyond the horizon or from an 
undetected submerged position. This balance and flexibility provides 
the National Command Authorities (NCA) a range of military options that 
is truly unique.
    Forward presence provides an immediate response capability that 
prevents an aggressor from achieving a fait accompli. On-scene naval 
forces not only shape the battlespace--they demonstrate our capability 
to halt aggression long before adversaries can achieve their 
objectives. While enhancing deterrence, naval forces simultaneously 
shift the military balance in our favor by offering numerous options in 
response to aggression. We force adversaries to consider multiple 
responses by injecting uncertainty into their planning, disrupting 
their ability to execute a coherent campaign, and eroding their 
confidence in the likelihood of success. Naval forces can provide 
security and employ unique operational and logistic capabilities, 
allowing civil initiatives to work. Options may range from establishing 
a no-fly zone to ensuring delivery of humanitarian supplies.
    The flexible, rapid movement of naval forces at the onset of any 
crisis is an ideal way to signal our nation's commitment. Our quick-
reaction capability, combined with self-sustaining logistics, enables 
the Navy-Marine Corps team to be on scene at the outset and to remain 
as long as necessary to stabilize the situation. The advantage of our 
expeditionary nature is amplified when allied nations are reluctant or 
unable to support crisis-response efforts. Naval forces provide 
numerous options to the National Command Authorities, including: sea 
and area control; naval gunfire for fire support; interdiction and deep 
strike missions; amphibious operations; special warfare operations; and 
Marine air-ground task force operations ashore. The mobility and 
agility of naval units make them the force of choice in a wide variety 
of situations. The presence of naval forces in the early stages of a 
crisis reminds a would-be aggressor of the overwhelming power that can 
be projected from the continental United States.
    There are numerous examples of the Navy-Marine Corps team providing 
instantaneous real-world support of the National Command Authorities. 
In mid-1997, the Nassau (LHA 4) Amphibious Ready Group (ARG), with the 
26th Marine Expeditionary Unit (Special Operations Capable) (MEU(SOC)) 
embarked, and the Kearsarge (LHD 3) ARG, with 22d MEU(SOC) embarked, 
planned sequential noncombatant evacuation operations in the former 
Zaire, Sierra Leone, and Albania. The geographic separation and unique 
requirements of each event clearly demonstrated the flexibility of 
naval forces. Later in 1997, when Iraqi intransigence resurfaced, the 
Nimitz (CVN 68) Carrier Battle Group (CVBG) rapidly repositioned from 
the Pacific to the Arabian Gulf. Soon afterward, the George Washington 
(CVN 73) CVBG relocated from the Mediterranean Sea to the Arabian Gulf, 
to emphasize U.S. resolve. Partially in response to these movements, 
and in concert with vigorous diplomatic efforts, the Iraqi government 
agreed to terms that allowed U.N. inspectors, including Americans, to 
return to work.
    In the early stages of a crisis, our combat capabilities can defend 
allies and their critical ports and airfields, needed for the arrival 
of follow-on forces from the continental United States. In the future, 
our emerging theater air-and-missile-defense capabilities will enhance 
this protective shield for joint forces and allies--unobtrusively, from 
the sea. The mobility of these systems, currently being developed 
around the existing Aegis surface combatant fleet, will be a critical 
force multiplier. Our dynamic pursuit of area and theater-missile 
defense continues.
    The ability to fight and win against any adversary is vital to the 
National Security Strategy. Throughout the joint campaign, naval forces 
will capitalize on our command-and-control system to concentrate combat 
power from dispersed, networked forces and project power far inland. 
Initial operations by swiftly responding naval forces often can halt 
aggression early in the conflict. In those cases where aggression is 
not contained immediately, our initial operations will be critical in 
enabling a joint campaign to begin. The Navy's ability to dominate the 
littorals ensures sea and area control, while defeating enemy area-
denial threats. Naval forces also can assert maritime superiority and 
provide strategic sealift to transport joint and allied forces into 
theater. Our ability to counter enemy area-denial threats effectively--
with potent information warfare, power projection, and force-protection 
capabilities--increases our decisive impact early in a joint campaign.
    Naval operations are critical elements of the joint campaign. We 
deliver precision naval fire support--strike, force interdiction, close 
air support, and shore bombardment. We seize the advantage of being 
able to operate on and from the sea. Using high-tech information-
processing equipment, we achieve superior speed of command by rapidly 
collecting information, assessing the situation, developing a course of 
action, and executing the most advantageous option to overwhelm an 
adversary. Throughout the joint campaign we keep the vital seaborne 
logistics pipeline flowing. And, when the joint campaign is over, naval 
forces can remain on scene for long periods to enforce sanctions and 
guarantee the continuation of regional stability.
Preparing for an Uncertain Future
    Today, the Navy and Marine Corps enjoy maritime superiority around 
the world. We find ourselves at a strategic inflection point, during 
which we can think in different ways about warfighting in the future. 
We have an opportunity to be innovative and create new capabilities to 
overcome the threats that lie ahead. We must embrace change and make it 
our ally. The Department of the Navy is committed to exploiting 
emerging technologies, concepts, and doctrine to guarantee the military 
superiority vital to our nation's global leadership. In addition, we 
are examining concepts that will capitalize on our national 
capabilities, going beyond jointness and the interagency network. These 
concepts envision bringing together all elements of national power 
including academia, laboratories, financial institutions, industry, 
communications, humanitarian organizations--to meet the challenges of 
the 21st century.
    Similarly, we must acknowledge today's realities. Although Navy and 
Marine Corps deployed unit readiness remains high, a combination of 
constrained resources and the pace of operations required to execute 
NCA tasking and fulfill the requirements of the Unified Commands are 
affecting the readiness of our non-deployed forces. In concert with 
Congress, we must find ways to address this situation. We must and will 
take advantage of the ongoing revolutions in military affairs and 
business affairs to achieve our goals.
Revolution in Military Affairs
    A revolution in military affairs (RMA) occurs when new concepts of 
warfare combine with new technologies to achieve a quantum leap in 
military capabilities. Carrier aviation, amphibious warfare, and 
ballistic missile submarines are vivid examples of such previous 
successes. We embarked on a similar innovative path with the 1992 
publication of ``. . . From the Sea'', and further refined our 
strategic vision with ``Forward . . . From the Sea'' in 1994. The 
revolution has continued in the past two years with publication of the 
Navy's ``Operating Forward . . . From the Sea'', and the Marine Corps' 
``Operational Maneuver From the Sea'' (OMFTS). These operational 
concepts show how the naval service will execute its strategic concept 
and maintain its operational primacy into the 21st century.
    The Navy and Marine Corps are involved actively in developing 
concepts that will combine in the future to attain revolutionary 
capabilities. These efforts include information warfare, precision 
strikes from the sea, Cooperative Engagement Capability (CEC), Network-
Centric Warfare, theater ballistic missile defense, and Ship-to-
Objective Maneuver (STOM). These concepts enhance our broad mission 
areas of sea and area control, power projection, presence, and 
deterrence. Our revolution is appropriate for the times.
Revolution in Business Affairs
    An RMA must combine new concepts, technologies, organizational 
structures, doctrine, and programs. Modernization and recapitalization, 
using dedicated funds, are necessary to exploit fully the RMA. We seek 
to find some of these funds by instituting a revolution in business 
affairs. Modernizing our force structure to better reflect tomorrow's 
challenges and streamlining our support services to make them more 
efficient are two methods we are using to realize additional fiscal 
savings for reallocation to support more robust modernization efforts.
    The importance of achieving these savings cannot be overemphasized. 
Our shipbuilding plan produces technologically superior ships, such as 
Arleigh Burke (DDG 51), San Antonio (LPD 17), the New Attack Submarine 
(NSSN), and CVN-77, and the average rate of production in the future 
years defense plan (FYDP) is adequate in the near term to support the 
projected fiscal year 2003 force of about 300 ships. However, beyond 
the FYDP, this rate of production will not permit us to maintain the 
required ship and aircraft inventory. The operational commitments 
undertaken by the Navy and Marine Corps today require a certain force 
level, to satisfy both personnel tempo concerns and worldwide presence 
missions. Our rate of new-ship and aircraft construction must 
recapitalize the force in the long term to maintain this balance. We 
need to ensure that, in the future, adequate modernization funding is 
provided in order to fulfill tomorrow's tasking.
    The Navy-Marine Corps team is the finest maritime force in the 
world today. To maintain our preeminence, we must continue our 
investment in technological advances. Indeed, the rapid pace at which 
technology proliferates around the world presents us with new 
challenges. In the information age, potential adversaries will acquire 
knowledge of our systems and capabilities much faster than ever before. 
In order to remain on the leading edge of technological innovation, we 
must undertake a revolution in the way we procure systems and place 
them in the fleet--a revolution in business affairs. Further, we must 
learn from the successes of others, and prepare to manage acquisition 
in a way that makes the most of every dollar spent. The transformation 
of our forces must integrate the strengths of our people with emerging 
technologies.
Institutionalizing Innovation
    Both the Navy and the Marine Corps are moving swiftly to 
institutionalize the generation of innovative concepts and ideas. The 
CNO's Strategic Studies Group (SSG) is dedicated to developing 
revolutionary naval warfare concepts 15 to 20 years from today. The SSG 
fellows combine analysis of naval campaigns and scientific methodology, 
to identify future warfighting concepts that offer an order-of-
magnitude improvement over current capabilities. This continuing effort 
complements Fleet Battle Experiments, which examine future concepts and 
doctrine 5 to 10 years from now. The Marine Corps' Warfighting 
Laboratory (MCWL) and the Sea Dragon series of experiments also are 
creating the necessary focus on new concepts and doctrine.
    In 1997, the MCWL conducted the first in a series of Advanced 
Warfighting Experiments (AWE's), Hunter Warrior, and is currently 
preparing for the second AWE, Urban Warrior. The Marine Corps 
capitalized on the innovative momentum generated through the MCWL by 
creating the Office of Science and Innovation (OSI) on August 15, 1997. 
The mission of the OSI is to develop visions focused on the development 
of policies and strategies associated with the exploitation of 
scientific innovation, modeling, simulation, and technology, in order 
to enhance Marine warfighting capabilities. The OSI has taken the lead 
in incorporating the successes of the MCWL into the Marine Corps Combat 
Development System.
    In 1998, the Navy will establish the Navy Warfare Development 
Command in Newport. This new command will combine the expertise of the 
Naval War College, Navy Doctrine Command, and the CNO Strategic Studies 
Group into an organization capable of integrating concept development, 
experimentation, and doctrine within the framework of the Navy 
strategic vision. This organization will formalize a process for rapid 
generation and experimentation of innovative concepts. It also will 
maximize the unique abilities at the Naval War College and empower the 
doctrine development process.
    Our Navy and Marine Corps are focused on the future, building upon 
the firm foundation of ``. . . From the Sea'' and ``Forward . . . From 
the Sea''. We will maintain carrier battle groups and amphibious ready 
groups forward, shaping the international environment and creating 
conditions favorable to U.S. interests and global security. From their 
forward locations, our forces are positioned to respond to a full range 
of crises and contingencies, and protect our national interests. Our 
continued emphasis on innovative thinking is preparing us well for an 
uncertain future.
                  operational primacy: 1997 in review
    Throughout 1997, the Navy and Marine Corps maintained an average of 
119 ships, 62,300 Sailors, and 23,300 Marines deployed overseas in 
support of forward presence missions, training exercises, and 
operations in more than 100 countries. Sea-based and self-sustained, 
naval forces take advantage of bilateral training opportunities in 
countries with limited infrastructure or ability to support large scale 
military deployments. These training exercises offer emerging 
democracies a unique opportunity to train with U.S. forces. Forward-
deployed expeditionary forces also give theater commanders a flexible, 
responsive force that can be positioned in key trouble spots for 
extended periods, as a visible example of U.S. resolve and commitment. 
During 1997, the Navy-Marine Corps team proved time and again that sea-
based forces are the premier forward presence asset.
Operations
            Arabian Gulf/Red Sea
    Iraq.--Operation Southern Watch (August 1992-present). Navy, 
Marine, and Air Force units continue to enforce the ``no-fly'' zone 
over Iraq. Naval operations in 1997 included extensive Navy and Marine 
aircraft sorties from the aircraft carriers Kitty Hawk (CV 63), 
Theodore Roosevelt (CVN 71), Constellation (CV 64), John F. Kennedy (CV 
67), Nimitz (CVN 68), and George Washington (CVN 73).
    Operation Northern Watch (May 1997-present). Navy and Marine EA-6B 
squadrons are operating to enforce the no-fly zone over northern Iraq.
    CVN Thrust (October 1997-present). In response to Iraq's expulsion 
of U.N. weapons inspectors, Nimitz (CVN 68) accelerated its transit to 
the Arabian Gulf, while George Washington (CVN 73) swung to the Gulf 
from deployment in the Mediterranean to provide a formidable force with 
massive strike capability.
    Saudi Arabia.--Operation Desert Focus (July 1996-present). In the 
aftermath of the Khobar bombings, the First Marine Expeditionary Force 
(I MEF) provided counterintelligence team support for force protection 
to Joint Task Force-Southwest Asia (JTF-SWA). The deployment was 
extended into fiscal year 1997 because of the continued terrorist 
threat.
    Bahrain.--Reinforcement of Naval Security in Bahrain (April-June 
1997). A reinforced platoon of the Fleet Antiterrorism Security Team 
(FAST) Company deployed in response to a Navy Central Command (NavCent) 
request immediately following indications and warnings of terrorist 
threats. Naval Reserve Mobile Inshore Undersea Warfare Units deployed 
to Manama, Bahrain, to augment port surveillance and security.
    Maritime Interception Operations.--(August 1990-present). Surface 
combatants, amphibious ships, and maritime patrol aircraft continue the 
maritime intercept operations in the Arabian Gulf in support of U.N. 
sanctions against Iraq. Almost 25,000 queries, 11,000 boardings, and 
over 600 diverts of shipping have occurred since the operation began. 
U.S. Navy ships are the principle tool for enforcing the U.N. mandated 
sanctions against Iraq.
            Africa
    Democratic Peoples Republic Of The Congo (Formerly Zaire).--
Operation Guardian Retrieval (March-June 1997). As conditions in 
Kinshasa deteriorated, Nassau (LHA 4), with elements of the 26th Marine 
Expeditionary Unit (Special Operations Capable) (MEU(SOC)) on board, 
was dispatched off the coast of Zaire. The remainder of the 26th 
MEU(SOC) Forward on board Nashville (LPD 13) and Pensacola (LSD 38) 
remained in the Mediterranean Sea to provide strategic reserve for the 
NATO Stabilization Force (SFOR) in Bosnia. The 26th MEU(SOC) assumed 
the main effort of a planned noncombatant evacuation operation named 
Joint Task Force Guardian Retrieval. Kearsarge (LHD 3) and the 22d 
MEU(SOC) deployed two weeks early to relieve Nassau and the 26th 
MEU(SOC); the former assumed responsibility for the Joint Task Force 
(JTF) mission on May 2, 1997.
    Sierra Leone.--Operation Noble Obelisk (May-June 1997). As 
Operation Guardian Retrieval finished, the deteriorating security 
situation in Freetown, Sierra Leone, required Kearsarge (LHD3) and the 
22d MEU(SOC) to relocate quickly to another crisis operating area. As 
commander for JTF Noble Obelisk, the 22d MEU(SOC) evacuated 451 
American citizens and 2,059 third-country nationals in four days to 
Kearsarge. All evacuees were later transferred to Conakry, Guinea, for 
processing.
            Europe
    Bosnia.--Operation Deliberate Guard (December 1996-present). 
Earlier Bosnian-related operations (Operations Deny Flight and Decisive 
Edge) transitioned to Operation Deliberate Guard in support of the 
Stabilization Force (SFOR). Carrier and shore-based aviation squadrons 
continue joint and combined flight operations to enforce the ``no-fly'' 
zone over the Republic of Bosnia-Herzegovina. Additional Navy and 
Marine F/A-18 and EA-6B aircraft, forward-deployed to Aviano, Italy, 
provide suppression of enemy air defense, close air support, and 
electronic warfare capabilities to the SFOR. Naval Mobile Construction 
Battalion Seabees and Marines augment Army civil affairs brigades to 
support specific peacekeeping operations. Nearly 500 Naval Reserve 
personnel were recalled to support Bosnian operations.
    Adriatic Sea.--Operation Joint Guard (December 1996-present). 
During four of five operational phases, SFOR designated deployed 
MEU(SOC)'s as the reserve in support of the NATO-led implementation of 
the Dayton Peace Accords. In March 1997, Nassau and the 26th MEU(SOC) 
returned to the Adriatic Sea as a supporting force after responding to 
the crises in the former Zaire and Sierra Leone. Nassau was later 
relieved by Kearsarge and the 22d MEU(SOC). During 1997, Navy maritime 
patrol aircraft supplied reconnaissance support to area commanders. 
VMU-2, a Marine Corps unmanned aerial vehicle (UAV) squadron equipped 
with the Pioneer UAV, transmitted a video data link to Navy P-3 
aircraft for further relay to the three multinational divisions. VMU-1 
deployed in September 1997 to provide a video link to officials during 
the Bosnian municipal elections. Marine active and reserve personnel 
augment USCINCEUR's effort in Bosnia.
    Albania.--Operation Silver Wake (March-July 1997). U.S.S. Nassau 
(LHA 4) Amphibious Ready Group (ARG), with the 26th MEU(SOC) embarked, 
conducted a noncombatant evacuation operation (NEO) in Tirana, Albania. 
Spreading anarchy in Albania compelled the evacuation of 877 Americans 
and third-country nationals. Following the evacuation, Marines provided 
security for personnel remaining in the embassy and housing compounds. 
These elements were later relieved by Marine Corps Security Forces from 
Naples, Italy, and Souda Bay, Crete.
            Caribbean and South America
    Counterdrug Operations.--Active and reserve Navy ships, submarines, 
and aircraft continue detection and monitoring missions in the 
Caribbean Sea and the Atlantic and Pacific Oceans. Navy and Marine 
Corps personnel serve as tactical planners, analysts, and mobile 
training teams in drug-source countries to enhance host-nation law 
enforcement. Marine Corps units have also conducted 55 missions along 
the Southwest border, in support of domestic law enforcement agencies. 
Navy personnel operate and maintain re-locatable over-the-horizon radar 
(ROTHR) sites in Virginia and Texas, providing wide area surveillance 
of the transit zone. Efforts are underway to construct a ROTHR site in 
Puerto Rico, which will extend surveillance capabilities to the source 
countries. Additional surveillance is provided by a Naval Reserve E-2 
radar early warning aircraft squadron established in support of 
counterdrug operations. The Director of Naval Intelligence maintains 
dedicated, maritime-focused counterdrug intelligence support and 
interagency coordination via multisource fusion analysis of commercial 
shipping and noncommercial vessels. These intelligence sources provided 
information to law enforcement and Department of Defense personnel.
    Haiti.--New Horizons Haiti (formerly exercise Fairwinds) (April 
1996-December 1997). Navy Seabees, Marine engineers, and Navy medical 
units supported the nation building efforts of ``U.S. Support Group 
Haiti.'' These units provided important humanitarian assistance to the 
Government of Haiti through the completion of engineering projects and 
medical support.
    Cuba.--Cuban Migrant Support (August 1994-present). Marines from 
the Second Marine Expeditionary Force (II MEF) continue the Cuban and 
Haitian migrant handling, processing, and security missions in 
Guantanamo Bay, Cuba. Navy personnel provide medical and logistic 
support to the migrants. Since September 1994, as many as 40,000 
migrants housed at the Guantanamo Bay Naval Facility have been 
repatriated.
    Peru.--Operation Laser Strike (September 1996-June 1997). Marines 
supported the counter-drug operations of U.S. Southern Command 
(CINCSOUTH) with a ground mobile radar and communications team.
            Asia
    Korea.--Naval sea and air power forward-based in Yokosuka, Sasebo, 
and Atsugi, along with Marine expeditionary forces from Okinawa, 
continue to provide a visible and unambiguous presence around the 
Korean peninsula. Four at-sea training exercises were conducted with 
South Korean forces: Sharem 120 featured Thach (FFG 43), Hewitt (DD 
966), and Topeka (SSN 754) in an antisubmarine exercise; MCMEX tested 
anti-mine warfare expertise with Guardian (MCM 5) and Patriot (MCM 7); 
Foal Eagle 1997 was a large-scale carrier battle group exercise 
centered on the Independence (CV 62) battle group, combatants from 3rd 
Fleet, and numerous support ships; Ulchii Focus Lens 1997 is a major 
joint and combined command and control exercise for the Blue Ridge (LCC 
19), 7th Fleet's command ship forward deployed in Japan. These highly 
beneficial exercises are integral to our ability to operate in a nearly 
seamless fashion with South Korean forces.
    Guam.--Operation Pacific Haven (September 1996-March 1997). Navy 
personnel from Helicopter Combat Support Squadron Five, Naval Mobile 
Construction Battalion Seabees based in Guam, Marine translators, and a 
reinforced Marine rifle company from Okinawa supported the USCINCPAC 
effort of screening and processing Kurdish refugees from northern Iraq.
    Korean Airlines Flight 801.--Crash Recovery Operations (August 
1997). Navy helicopter units provided medical evacuation assistance to 
survivors to the U.S. Naval Hospital in Guam. The Navy's medical and 
dental personnel were instrumental in the recovery and identification 
of victims. In addition, a seven-member special psychiatric rapid 
intervention team (SPRINT) was dispatched from the Naval Medical 
Center, San Diego, two days after the crash to provide counseling and 
emotional support for rescue workers. Seabees provided further rescue 
and salvage support to the National Transportation Safety Board.
    Cambodia.--Operation Bevel Edge (July 1997). Marines from the Third 
Marine Expeditionary Force (III MEF) deployed to Utapao, Thailand, to 
support a USCINCPAC JTF mission. The 31st MEU(SOC) was placed on alert 
for a possible NEO from Cambodia.
Exercises
    West African Training Cruise (WATC).--This annual deployment 
provides interaction between U.S. Naval forces and their host-nation 
counterparts for military training, expanded military-to-military 
relations, and to maintain familiarity with the West African littoral 
environment. The Navy and Marine forces in the Whidbey Island (LSD 41) 
during WATC 97 also participated in UNITAS 97.
    UNITAS 97.--The annual UNITAS deployment is a primary means of 
supporting regional stability in the Western Hemisphere. Active and 
reserve surface combatants and P-3C aircraft, Marine forces from II 
MEF, a submarine, reserve medium lift transport aircraft, and a U.S. 
Coast Guard cutter join to conduct multinational exercises with 
Venezuela, Colombia, Ecuador, Peru, Chile, Argentina, Uruguay, and 
Brazil, while circumnavigating the continent during a five-month 
period. This year, France, The Netherlands, Canada, UK, Germany, and 
Portugal also participated during phases of the nine-nation, 29-city 
deployment. These exercises often provide the only opportunity for 
Latin American forces to train with U.S. and other allied forces.
    Partnership for Peace.--The Partnership for Peace (PfP) program 
continues to be the centerpiece of NATO's strategic relationship with 
Central and Eastern European nations. These operations, part of our 
bilateral military-to-military contacts program, included basic 
seamanship exercises and familiarization visits with the regional 
forces. Surface ships, aircraft, and submarines participated in many 
exercises in 1997 including: BALTOPS 1997, Ioklos, Briz, Posidon, and 5 
other bilateral cooperative exercises which took place in the 
Mediterranean, Baltic, and Black Seas. These exercises are central to 
Sixth Fleet's participation in PfP endeavors.
    Black Sea Operations.--Navy and Marine Corps units have conducted 
training operations with forces from Romania, Ukraine, and Bulgaria. 
Sailors and Marines make a major contribution to national efforts aimed 
at building Black Sea alliances and furthering relationships via 
Partnership for Peace. Through exercises such as Rescue Eagle and Sea 
Breeze, forward-deployed, self-sustained naval forces provide excellent 
opportunities for initial bilateral training with the armed forces of 
emerging democracies.
    Baltic Challenge 97.--The second Baltic Challenge exercise involved 
2,800 personnel from nine nations: Estonia, Latvia, Lithuania, Norway, 
Sweden, Finland, Denmark, Ukraine and the United States. Focused 
primarily on peacekeeping and humanitarian assistance, naval active and 
reserve forces demonstrated a range of capabilities that support 
operational objectives in Europe, including the stationing of a 
Maritime Prepositioning Force in the Baltic Sea. Additionally, 
reservists made up nearly 25 percent of the Marine Forces deploying to 
Estonia, showcasing the readiness and skill inherent in the ``total 
force.''
    Blue Harrier 97.--This biennial, multinational mine-warfare 
exercise highlighted the newly converted mine countermeasures (MCM) 
command-and-control ship Inchon (MCS 12). This exercise provided NATO 
mine warfare units the opportunity to interact in tactics and 
procedures, which promoted cooperation and mutual understanding amongst 
its participants.
    Tandem Thrust 97.--Tandem Thrust 97 was conducted in the Shoal 
Water Bay Training Area, Australia. As part of a Combined Task Force 
(CTF) headed by Commander Seventh Fleet, forces from Independence (CV 
62) Carrier Battle Group, an Amphibious Ready Group built around the 
New Orleans (LPH 11), III MEF, and the 11th MEU(SOC) worked with other 
U.S. and Australian forces on a short-warning crisis-action scenario. 
The exercise implemented USCINCPAC's cooperative engagement strategy 
and demonstrated U.S.-Australian cooperation.
    Carat 97.--Regional stability in Southeast Asia is supported by the 
Pacific Fleet's cooperation afloat readiness and training (CARAT) 
program, patterned after UNITAS. Active and reserve surface combatants, 
maritime patrol aircraft, a special purpose Marine air-ground task 
force, medical detachments, and a U.S. Coast Guard cutter conduct 
exercise with six countries in the South China Sea region for two 
months each year. In 1997, Brunei, Indonesia, Malaysia, Singapore, and 
Thailand participated. Our naval forces exercised with the host 
nation's air, sea, and land forces to promote regional maritime 
interoperability, increase readiness, enhance military-to-military 
relations, and ensure stability of Southeast Asian sea lanes of 
communication.
    Kernel Blitz 97.--This large scale amphibious exercise was 
conducted at Camp Pendleton, California in June 1997. As a maritime 
contingency response to a freedom-of-navigation challenge, Kernel Blitz 
97 demonstrated the inherent flexibility of the Navy-Marine Corps team 
with at sea, amphibious, and subsequent operations ashore. The use of 
emerging technology was a key underlying concept to Kernel Blitz 97. 
Using the Global Command and Control System (GCCS), all participating 
units received a common tactical and imagery picture from multiple 
sources.
    Arctic Care 97.--Navy and Marine reservists of the 4th Force 
Service Support Group participated in a joint civic action exercise in 
isolated villages in the Yukon-Kuskokwim Delta in Alaska. This exercise 
provided valuable training for 150 Marines and Sailors as they 
augmented the understaffed rural health care system. Humanitarian 
medical, dental, veterinary, and light engineering support were 
afforded to the indigenous Yupik Eskimo population.
Military Support To Civil Authorities
    Chemical-Biological Incident Response Force.--In response to the 
threat of weapons of mass destruction against American interests, the 
Marine Corps Chemical-Biological Incident Response Force (CBIRF) 
provided support for national events during 1997--beginning with a 
deployment to Washington, D.C., for the second inauguration of 
President Clinton. The CBIRF, consisting of both Marine and Navy 
personnel, was positioned to quickly respond to a terrorist chemical or 
biological attack. Functioning within the Federal Response Plan and 
working with the First Army's Response Task Force, the CBIRF developed 
a helpful relationship with other first responders. In addition, the 
CBIRF supported the Summit of Eight in Denver, Colorado during the 
summer of 1997.
    Western U.S. Floods.--(Winter/Spring 1997). Nevada and California 
experienced record rainfalls and rapid winter snow melts in 1997. 
Widespread flooding forced the evacuation of thousands of residents and 
caused extensive damage. Naval Reserve emergency preparedness liaison 
officers (EPLO's) were assigned to the Federal Emergency Management 
Agency (FEMA) and National Guard emergency operations centers to 
coordinate Federal, Department of Defense, and state assets. Navy 
EPLO's coordinated Naval Construction Battalion efforts to repair 
weakened dams and bridges, and coordinated logistical support 
requirements, including shipment of more than one million sandbags.
    Great Plains Blizzard and Flood.--(Winter/Spring 1997). North and 
South Dakota's record-setting snowfall and subsequent snow melt 
produced extensive flooding. During these events, Navy EPLO's were 
responsible for coordinating support equipment from nearby bases. Navy 
EPLO's established themselves on site and became the official 
Department of Defense representatives for coordinating DOD support with 
the 5th Continental Army.
    When later Spring floods again affected South Dakota and Minnesota, 
Navy EPLO's were on scene. Marine Corps and Coast Guard personnel 
entered the fray, and Navy EPLO's were requested to once again help 
coordinate support efforts. Navy EPLO's worked with the Department of 
Defense Disaster Coordination Office, the other armed services, and 
many local agencies.
Freedom Of Navigation
    The ability to move U.S. forces when and where they are needed 
depends upon unfettered access to the world's oceans and international 
airspace. To ensure access as a matter of legal right, U.S. naval 
forces in 1997 conducted more than 20 operations to protest excessive 
maritime claims, in support of the President's Freedom of Navigation 
Program. These assertions supported the U.S. foreign policy objective 
of adherence by all nations to the International Law of the Sea.
    Similarly, the Department of the Navy strongly supports U.S. 
accession to the Law of the Sea Convention as amended in 1994. A 
majority of the world's nations now are signatories to the Convention, 
including all major maritime powers except the United States. Worldwide 
acceptance of the Law of the Sea Convention remains the best guarantee 
of a stable ocean's regime that recognizes navigational and overflight 
freedom crucial to naval operations. Accession by the United States 
also provides less of an incentive for states to make and enforce 
excessive claims. That should, in the long term, result in a decline in 
the number of excessive maritime claims which restrict our rights of 
mobility and access.
    The Department of the Navy is operating today to provide for 
America's interests. The forward-deployed strategy is cost-effective 
for the nation while simultaneously providing a ready, responsive force 
capable of meeting the challenges of today's chaotic world. Conducting 
daily operations and exercises with allies reinforces our commitments 
to friends and potential adversaries alike.
       sailors, marines and civilians: our most valuable resource
    People are the heart and soul of the Navy-Marine Corps team. With a 
fiscal year 1997 end strength of 395,000 active duty and 95,898 Reserve 
Sailors, 174,000 active duty and 42,000 Reserve Marines, supported by 
220,000 federal civilian employees, the Department's personnel form a 
flexible, well-trained and responsive team.
    A key element in recruiting and retaining a high quality all-
volunteer force must be a military compensation package that allows the 
Department of the Navy to keep faith with our people and is reasonably 
competitive in the civilian labor market. A solid and sensible 
compensation plan remains essential to maintaining operational 
readiness. Compensation competitiveness is determined by the real-
dollar value of basic pay, food and housing allowances, special and 
incentive pays or bonuses, and such benefits as commissary and exchange 
privileges, medical and dental care, retirement, and paid leave. Given 
the extraordinary demands placed upon Sailors, Marines, and their 
families, it is imperative that we ensure all factors of compensation, 
from basic pay and dependents' medical care to retirement benefits, are 
adequately addressed. This is even more vital given the vast array of 
private sector opportunities which continue to attract our most 
talented, highly trained, and experienced Sailors and Marines.
    Together, the Navy-Marine Corps team has served as the shield of 
the republic since the earliest days of our nation. Navy and Marine 
Corps personnel have performed together magnificently as a result of 
our ability to recruit, train, and retain the highest quality 
personnel. For over two centuries, Navy and the Marine Corps personnel 
have exemplified our shared core values of honor, courage, and 
commitment. At the leading edge of the new century, the significance of 
our forward-deployed Navy-Marine Corps team has never been greater. The 
unique culture and traditions that have brought success in the past 
need to be sustained and nurtured in the future.
Shaping the Total Force
    Navy-Marine Corps end strength is approaching steady-state, but 
will require further modest reductions to implement the recommendations 
of the Quadrennial Defense Review (QDR). Consequently, the operational 
readiness of the Navy and Marine Corps depends, now more than ever, 
upon our ability to recruit and retain the very best men and women with 
the right mix of skills and experience. Ensuring the quality of life 
and professional development of our Sailors and Marines is of primary 
importance. We must provide rewarding career opportunities, a quality 
standard of living, and fair and adequate compensation.
Recruiting Tomorrow's Leaders
    Attracting the high-caliber youth needed to maintain our future 
force is the recruiting focus of the Department of the Navy. Although 
low national unemployment and an increase in college enrollment created 
a challenging recruiting environment, 1997 proved to be a successful 
year for Navy and Marine Corps recruiting. Recruiting strategy focused 
on attracting highly qualified individuals for particular skills in the 
Fleet and Fleet Marine Forces. Navy recruiters achieved 100 percent of 
their overall recruiting goals, employing targeted marketing to achieve 
100 percent of nuclear field and critical-ratings goals. In addition, 
the academic quality of Navy enlisted recruits remains high: more than 
95 percent earned high school diplomas, and 66 percent scored in the 
upper half of the Armed Forces Qualification Test. The Marine Corps 
attained more than 100 percent of enlisted recruiting goals and 
exceeded Department of Defense goals in all tier and aptitude 
categories for the previous 30 consecutive months. This singular 
accomplishment is directly attributed to the dedicated efforts of our 
Marine Recruiters.
    Traditional commercial advertisements, emphasizing our core values 
of honor, courage, and commitment continue as the mainstays of our 
recruiting effort. The Marine Corps also has developed a series of 
advertising campaigns designed to attract more women and minorities 
into officer and enlisted programs. They are increasing the use of 
radio, print, and direct-mail advertising specifically tailored for 
women, as well as such high-profile marketing opportunities as 
sponsorship of the Extreme Games and Hoop-It-Up.
    Partly responsible for this success is the boost special duty 
assignment pay (SDAP) has given to maintain a quality recruiting force. 
The Navy and Marine Corps recruiting commands continue to assign the 
highest-caliber commanders and most stringently screened Sailors and 
Marines to recruiting duty. A number of initiatives are in place to 
improve the quality of life for recruiters and their families assigned 
away from major bases or stations.
    As we continue in our efforts to attract highly qualified and 
culturally diverse officer and enlisted candidates, we are ever-mindful 
of the formidable challenges the future presents. Historically low 
unemployment, record high college enrollment, and a declining veteran 
population which reduces exposure to the military as a career option, 
contribute to a potentially lower propensity to enter the military 
services. For the first two months of fiscal year 1998, Navy recruiting 
accessed only 91 percent of goal. If that trend continues through 
fiscal year 1998, it may lead to an annual accession goal shortfall of 
4,000 personnel.
    Realizing that recruiting top quality people is one of the most 
significant challenges facing the Department, we have developed a 
recruiting campaign involving the entire chain of command. As an 
example, the Secretary of the Navy has sent letters to high school 
principals throughout the Nation, urging them to actively discuss the 
potential of a Navy or Marine Corps career with their students. We also 
are attempting to address the challenge head-on with a number of new 
initiatives, including accessing more females, recruiting more general 
detail (GENDETS) personnel, and increasing opportunities for Navy 
veterans to return to active duty. Extensive use of Internet homepages 
to advertise highly technical careers in the Department also has proven 
to be a superb recruiting tool. Additionally, funding has been 
increased for traditional advertising, enlisted bonuses, and the Navy 
College Fund (NCF) program to help in all aspects of retention and 
recruiting.
    We made improvements in increasing minority accessions in both 
officer and enlisted ranks through the enhanced opportunities for 
minorities initiatives (EOMI) program. While solid progress was made 
for enlisted accessions, more work is needed in the area of officer 
accessions. Additionally, we are exploring better ways in which to 
achieve a better distribution of minorities across technical and 
nontechnical ratings. Our efforts are not focused on achieving quotas, 
but rather continuing to accept and promote only the best qualified and 
highly motivated personnel to serve in the Department of the Navy.
    The Department's ability to recruit an exceptionally well-qualified 
and diverse civilian workforce has been enhanced through a series of 
coordinated recruitment programs, which have brought Navy and Marine 
Corps activities together with college and university students. To 
invest in future civilian recruitment, special residential and 
scholarship programs were established to acquaint outstanding high 
school and college students with the Department's technical missions.
Retaining the Best and the Brightest
    Maintaining a skilled, motivated and ready force is the foundation 
for the future of the Navy-Marine Corps team. By fiscal year 2000, 
after several years of downsizing, we will be at a point where every 
loss to the Navy must be offset by a recruit in order to maintain 
stable end strength. This will be challenging. The United States has a 
strong economy with plentiful employment options. Moreover, fewer young 
people today express interest in joining a military service. Although 
faced with further reductions associated with the Quadrennial Defense 
Review, it is prudent that we start retooling our retention program 
now. For example, we continue to offer a selected reenlistment bonus to 
keep critical billets filled. The percentage of Sailors offered this 
program was greatly reduced during peak downsizing years, but current 
personnel levels demand an increase in those eligible for this bonus. 
Other career stabilizing initiatives include affording Marine Corps 
first-term reenlistees the option of choosing one of three duty 
stations for their second term. Similarly, Navy homebasing initiatives 
give families more stability by serving in a single fleet concentration 
area.
    Educational opportunity remains a cornerstone of Department of the 
Navy career-incentive programs. New Navy recruits report that the 
Montgomery G.I. Bill was the number one reason for enlisting, and the 
Navy College Fund (NCF) continues as a primary incentive program for 
specialized-skill areas. This past year, Navy increased the NCF to 
provide a total of $40,000 in benefits for nuclear program enlistees. 
In addition, tuition assistance is available for self-motivated Sailors 
and Marines. At sea, or when deployed to remote locations, the Program 
for Afloat College Education (PACE) and the Marine Corps Satellite 
Education Network (MCSEN) continue to accelerate the use of distance 
learning for further education.
    A stable and competitive officer corps is essential to lead the 
Navy and Marine Corps. Nuclear officer incentive pay, medical officer 
incentive special pay and Aviation Continuation Pay (ACP) are some of 
the tools enabling the naval services to retain capable, talented and 
technically oriented leaders in the face of ever-increasing private 
sector competition. Using the higher authority approved in the 1998 
National Defense Authorization Act, the Navy and Marine Corps are 
addressing pilot retention issues within selected warfare communities.
    Adequate compensation fosters improved retention in mission 
critical skills, increases morale, and maintains high readiness. The 
basic allowance for housing (BAH) system, authorized by Congress in the 
Fiscal Year 1998 Defense Authorization Act, will be phased in over a 
six-year transition period. The BAH is expected to provide an immense 
benefit for Sailors and Marines stationed in high-cost, metropolitan 
coastal areas, and improve the lives of our junior enlisted personnel.
    Passage of the Military Retirement Reform Act of 1986 (Redux) has 
decreased considerably the benefits of making military service a 
career. Studies have shown that a typical enlisted member with 20 years 
of service will receive 25 percent less retirement compensation than 
before Redux. This erosion of benefits translates into a growing 
perception that a military career is less advantageous than civilian 
employment. This, in turn, affects force retention and stability in our 
mid-grade officer and enlisted personnel. The Department supports the 
exploration of alternative retirement savings programs.
Navy and Marine Corps Reserve Contribution
    The Naval and Marine Corps Reserve provided an unprecedented level 
of support during the past year. Increasingly used as a force 
multiplier to accomplish everyday missions, the Naval and Marine Corps 
Reserve is no longer just a force-in-waiting--to be called upon in the 
event of global war. To this end, Reserve contributory support to the 
active Fleet has more than doubled since 1991, to more than two million 
man-days of direct mission support in 1997.
    The Naval Reserve plays a significant role in virtually all major 
operations and exercises. Reserve ships and aircraft are increasingly 
used for counter-drug and other fleet operations, such as a 
Mediterranean deployment for the operational reserve carrier John F. 
Kennedy (CV 67) and a deployment to Europe for a multinational mine 
countermeasures (MCM) exercise for the reserve MCM command ship Inchon 
(MCS 12). A driving force in this increased deployment of reserve force 
ships and aircraft has been to lessen active duty personnel operational 
tempo. This increased role is highlighted by the fact that five of the 
ten reserve frigates were deployed for periods of four to six months in 
1997. These deployments included CARAT, BALTOPS and counter-drug 
operations, which were missions previously assigned to active units. 
Naval reserve force ships have expanded their role in these deployments 
by rotating selected Reservists that make up one-fourth the crew.
    The reserve expanded their support of the fleet in other ways as 
well. Reservists filled critical positions in fleet hospitals, naval 
hospitals and with the Marine Corps, and participated in virtually all 
naval medical exercises. Even critical leadership positions have become 
an area for Reserve personnel to assist the fleet.
    In addition to the traditional mobilization posture, the Naval 
Reserve has expanded its utility to the active component, as a 
contingency response team and a vital pool of manpower and equipment. 
Structured to support the fleet on a daily basis, the Naval Reserve 
provides 100 percent of the Navy's forces in such mission areas as: 
adversary aviation squadrons, fleet aviation logistics support, mobile 
inshore undersea warfare, and naval control of shipping.
    The Marine Reserve component is a critical element of the Total 
Force. The active component, as the nation's most ready force, has 
primary responsibility for forward presence, operations other than war, 
and crisis response. The Marine Corps Reserve supports these missions 
with individuals and units as required. During fiscal year 1997, Marine 
Reservists worked and trained alongside their active counterparts in 
numerous operations and exercises. More importantly, the Marine Reserve 
augments and reinforces the active component, creating a Total Force 
capable of sustained combat in the event of a major theater war.
    Today, more than 95 percent of the units of Marine Forces Reserve 
are assigned to active component forces in support of the Marine 
commitment to joint operations plans. Reserve participation is 
essential with today's smaller active-duty force. Success throughout 
the full range of possible missions, from military operations other 
than war (MOOTW) to augmenting and reinforcing the active component in 
periods of crisis, demands the seamless integration of both forces.
    The Marine Corps Reserve exists to enhance the operational 
capabilities of the active component. The Marine Corps Reserve 
currently contributes 26 percent of the force structure and 37 percent 
of the trained manpower to the Total Force Marine Corps. One hundred 
percent of the adversary squadrons, civil affairs groups, and 
battalion-sized reconnaissance units; 50 percent of the tank battalions 
and theater missile defense detachments; and 33 percent of the 
artillery battalions are provided by the Marine Corps Reserve. The full 
integration of active and reserve personnel into combined-arms air-
ground teams are the nation's force-in-readiness--the highly capable 
Marine Corps.
Naval Training: Today's Investment, Tomorrow's Capability
            The Navy Training Continuum
    The Naval Training Center in Great Lakes, Illinois, has initiated 
an innovative boot camp final exam named ``Battle Stations.'' This was 
done to ensure that Sailors were ready to join the Fleet. New Sailors 
use teamwork, basic seamanship and nautical knowledge gained during the 
boot camp curriculum to master seven training stations during a pre-
graduation battle problem. ``Battle Stations'' uses fleet experiences 
to create a more challenging and relevant training regimen for the 
Navy's newest Sailors.
    To continue preparing junior Sailors for career success after basic 
recruit training, the Navy uses basic and advanced-skills schools in 
areas such as engineering and weapon systems. Employing electronic 
manuals, remote video classroom techniques, and on-board systems, the 
Navy is training more Sailors with greater productivity. Afloat 
training groups at fleet concentration areas are used to tailor 
training to meet the needs of individual commands. Tailored training 
eliminates duplication, saves time and concentrates on correcting 
individual and unit weaknesses. In addition, through careful planning, 
operational exercises provide windows of opportunity for follow-on at-
sea training.
    The Navy's leadership continuum puts career-spanning rigor into 
leadership training, for both active and reserve personnel. The 
leadership continuum is the Navy's vehicle for imparting leadership 
qualities into a program of recurring training from recruitment to 
retirement. The purpose of the training is to produce warriors whose 
individual skills and values enable them to bond together as a cohesive 
combat-ready team.
    Leadership training commences at accession training and is 
reinforced through eight courses for officer and enlisted personnel, 
which form the basis of the continuum. Enlisted personnel attend the 
leadership training after selection to E-5, E-6, E-7, and Command 
Master Chief or Chief of the Boat. Officers attend the leadership 
training en route to specific leadership assignments. These progressive 
and sequential courses are all two weeks in length with the exception 
of the nine week Senior Enlisted Academy.
    Four major themes are the foundation of all the courses: values; 
responsibilities, authority, and accountability of leadership; unity of 
command, Navy and services; and continuous improvement. The training is 
a deliberate process to transform behavior and attitudes, rather than 
just ensuring compliance with regulations, by providing a common 
perspective on the real importance of the Navy's core values of honor, 
courage, and commitment. As each Sailor progresses through the 
leadership training courses, they acquire the knowledge, skills, and 
experience to form the basis of leadership techniques. The formal 
leadership training is periodically reinforced in warfare and specialty 
pipeline training, at annual All-Hands training, and during 
development/professional assignments. Current education and training 
programs, which include leadership modules, are being aligned with the 
continuum themes to ensure consistency, and to eliminate redundancies 
and conflicts.
            Marine Corps Transformation Process
    Transformation is an ongoing and dynamic process of making Marines, 
and consists of four phases: recruiting, recruit training, cohesion, 
and sustainment.
    Recruiting.--The transformation process begins with the first 
contact with a Marine recruiter. A demanding and extremely selective 
screening process follows: Those who qualify enter an improved delayed-
entry pool to prepare for recruit training; enhanced physical 
conditioning, study guides, and instruction on Marine Corps history and 
traditions become integral parts of that preparation; and potential 
recruits also receive their introduction to Marine Corps core values. 
In addition, the recruiter introduces them to the concept of total 
fitness--body, mind, and spirit. From the outset, it is made clear to 
recruits that they will be expected to undergo a transformation to 
become a valued part of an elite organization.
    Recruit Training.--On October 1, 1997 recruit depots implemented 
significant changes to the focus and content of recruit training. 
Recruit training was lengthened from 11 to 12 weeks for both males and 
females. This provides additional time for drill instructors to teach, 
mold, and mentor their recruits. Supporting this change is a 
significant increase in core values training, totaling more than 50 
hours of instruction, discussion, and training reinforcement critiques. 
The most notable enhancement to recruit training is the addition of the 
``Crucible'' event, intended to test the mettle of every recruit at the 
culmination of recruit training. As the true rite of passage from 
recruit to Marine, the Crucible is a 54-hour field training evolution, 
emphasizing the importance of teamwork in overcoming adversity. The 
regimen includes food and sleep deprivation and an operational tempo 
that poses continuous physical and mental challenges.
    Cohesion.--Unit cohesion is defined as the intense bonding of 
Marines, strengthened over time, resulting in absolute trust, 
subordination of self, and an intuitive devotion to the collective 
actions of the unit. To achieve this, the Marine Corps is forming teams 
of Marines immediately after recruit training and assigning those teams 
to follow-on skill producing schools. Subsequently, they are assigned 
to operational units in the Fleet Marine Force. Changing from 
individual assignment to unit assignment is a major modification of 
personnel policies--but one that will improve combat efficiency.
    Sustainment.--The sustainment of the transformation process is 
continuous, and spans all that Marines do throughout their service. 
Professional military education schools educate Marine leaders--
officers, staff noncommissioned officers, and noncommissioned 
officers--in ``whole Marine'' character development. Leaders in both 
the operating and in support forces conduct business and accomplish 
their missions in ways that support and reinforce both core values and 
team building. Leaders are also expected to manifest core values and 
mentor their subordinates. Living the Marine Corps ethos is a shared 
responsibility for all Marines and continues until the day a Marine 
hangs up the uniform for the last time--and beyond.
            Voluntary, Professional, and Graduate Education
    Voluntary education programs have made a significant contribution 
to recruiting, retention, and readiness. The latest recruiting survey 
indicates that over 25 percent of Navy's enlistees cited ``money for 
college'' as the primary reason they joined the Navy. Our enlisted 
force has shown that pursuing follow on education remains a high 
priority. For the past several years, a majority of our E-4 to E-6 
potential career force retention candidates have used tuition 
assistance (TA). The interest in advanced education prompted the 
Department to consolidate the Navy and the Marine Corps tuition 
assistance programs in 1995. This ``centralized'' TA system saved $1 
million in its first year of operation. These and future savings will 
translate in more courses for our personnel.
    The Department of the Navy is committed to making it just as easy 
for personnel at sea to have access to educational opportunities as 
those ashore. In fiscal year 1997, the Navy's Program for Afloat 
College Education (PACE) became available in every one of the 346 ships 
in the Navy, and over 20,000 Sailors participated in the program. Using 
tools such as PACE and the Marine Corps Satellite Education Network 
(MCSEN), most Sailors and Marines are able to pursue an education 
during off-duty time, regardless of duty assignment or location.
    To increase access to education, the Navy is moving to establish 
academic skills learning centers worldwide. By fiscal year 1999, 21 
centers will be activated, with a total of 52 centers planned by fiscal 
year 2001. These centers provide Sailors with the opportunity to 
improve basic academic skills, assist them in retaking the Armed 
Services Vocational Aptitude Battery (ASVAB) tests, help prepare them 
for college work, and achieve their educational potential. The MCSEN 
also provides the technology to deliver a standardized military 
academic skills program to all major Marine Corps installations, which 
guarantees accessibility to basic skills improvement courses in 
reading, writing, communications, and mathematics.
    As the largest single source of Navy and Marine Corps officers, the 
Naval Reserve Officer Training Command (NROTC) prepares men and women 
at civilian universities to assume junior officer positions in today's 
technical Navy and Marine Corps. NROTC scholarships at our nation's 
finest universities gives the Department added visibility to recruit 
tomorrow's leaders.
    The Department of the Navy is evaluating our graduate education 
programs to ensure that its leaders are prepared for the challenges of 
warfare and national security in the next century. Naval flagship 
education institutions, which include the Naval Postgraduate School, 
Naval War College, Marine Corps University, and the United States Naval 
Academy, provide multiple opportunities for officers to attain graduate 
education in a military setting. Opportunities for naval personnel to 
obtain postgraduate education at civilian universities also exist in 
several disciplines under the graduate education at civilian 
institutions program. Joint postgraduate education enables naval 
officers to function within the joint environment and master the 
intricacies of joint warfare planning and operations. The Naval Academy 
now offers a graduate program in leadership, culminating with a 
Master's degree for junior officers. Navy graduate medical education 
programs prepare medical officers for the challenge of operational and 
peacetime roles. In addition, the Navy and the Marine Corps have 
ensured that tuition assistance remains a continuing option to complete 
graduate education for enlisted and officer service members.
    The Department of the Navy civilian leadership development program 
identifies certain leadership competencies that commands and activities 
use to establish formal leadership programs. The program provides all 
employees with opportunities to acquire knowledge and skills that 
enhance their competitiveness for higher level positions. Civilian 
leadership development also supports the Defense leadership and 
management program, which offers advanced leadership and executive-
level skills and professional military education to GS-14 through 
Senior Executive Service (SES) employees. These programs support 
Department of the Navy initiatives to bring civilians into high-demand 
technical career paths. These programs start at the entry level and can 
help highly motivated and successful employees move to senior 
management and executive levels.
Fostering Excellence
            Core Values: Principles By Which We Live
    The Navy and Marine Corps are committed to sustaining our tradition 
of building strong character and ethical behavior. Character, ethics, 
and core values underscore morale and personnel readiness to improve 
mission performance. People who are trained and led by role models of 
high character are inspired to attain equally high levels of integrity 
and commitment.
    The emphasis placed upon our core values of honor, courage, and 
commitment is the foundation of Navy and Marine Corps efforts to combat 
such unacceptable behavior as sexual harassment, alcohol and drug 
abuse, hazing, and fraternization. Ethical awareness and adherence to 
core values is at the forefront of Department policy, planning, and 
action. In 1996, we promulgated our core values charter, which 
highlights the bedrock principles of the Navy-Marine Corps team. 
Character, ethics, and core values are emphasized throughout the career 
of each Sailor, Marine and civilian. This approach ensures that 
character, ethics, and core values are visible continuously at all 
levels, and reemphasized as each individual grows in tenure, 
responsibility and authority.
            Equal Opportunity
    The Department of the Navy offers every Sailor, Marine, and 
civilian employee equal opportunity to succeed and achieve his or her 
fullest potential, regardless of ethnicity, gender, national origin, 
race, or religion. With strong emphasis on core values, the Department 
ensures that each individual is treated with dignity and respect. A 
recent amendment to Department of the Navy regulations prohibits 
participation in any supremacist organization espousing discrimination 
based upon race, creed, color, sex or national origin. In addition, the 
Department of the Navy continues to emphasize the critical role of 
women in the fleet.
    Since 1994, women have been eligible for assignment on board combat 
ships and aircraft. With the exception of submarine duty and special 
operations, women train and serve in every Navy community and career 
field. Moreover, the women at sea program continues to expand career 
opportunities for women on combatants and in aviation. In fiscal year 
1998, more ships and another carrier air wing will become gender 
integrated, bringing the gender-integrated ship total to 133 and the 
air wing total to five.
    The Department of the Navy's focused efforts to eliminate sexual 
harassment were reflected in the 1995 Department of Defense Sexual 
Harassment Study, which reported that the Navy and Marine Corps showed 
the greatest declines in reported sexual harassment incidents among all 
the Services. We continue to reemphasize our commitment to eradicating 
sexual harassment, unprofessional relationships, and unacceptable 
conduct. Active efforts concentrate on oversight, leadership, policies, 
and training, while providing assistance and formal assessments of our 
programs. In a recent survey, Navy and Marine Corps focus groups 
reported we are successfully communicating to the field our core values 
and policies on sexual harassment and unprofessional relationships. 
When policy infractions occur, our toll-free advice lines, victim/
witness assistance programs, counseling, advocacy, and other community 
support services are working effectively with our commanders to take 
action to eliminate the problem and prevent recurrence.
            Quality of Life: Taking Care of Self and Family
    The Department of the Navy recognizes quality of life as a vital 
component in recruiting and retaining the quality men and women needed 
for the force of the 21st century. The Departmental focus is to provide 
an acceptable level of quality housing, health care, and community 
support services to Sailors, Marines, and their families, regardless of 
duty station. Key elements of the quality-of-life program include an 
adequate compensation and benefits package, as well as a positive 
environment that provides our personnel the requisite tools to reach 
their full potential. To this end, the Department of the Navy has 
established minimum quality-of-life guidelines, and is working toward 
consistent and professional delivery of all quality-of-life components.
    Alcohol and drug abuse can seriously impact the quality of life of 
Navy and Marine Corps members and their families. Alcohol abuse 
accounts for almost half the accidental deaths each year in the Navy 
and Marine Corps. It is also associated with many safety, health, 
discipline, and family problems. We are actively and aggressively 
addressing these issues and promoting an environment and culture which 
will not accept alcohol abuse. We have established a standing committee 
on alcohol use ``deglamorization'' that monitors the Navy's ``Right 
Spirit'' campaign and the Marine Corps ``Semper Fit'' program. These 
initiatives have contributed to the declining trends in alcohol abuse.
    Additionally, our ``Zero Tolerance'' policy has significantly 
reduced drug abuse. Positive drug-test results have declined from 14 
percent in 1981 to less than 1 percent today. More recently, both Navy 
and Marine Corps have initiated pre-employment drug testing at Military 
Entrance Processing Stations (MEPS) which should further reduce drug 
abuse within our active duty forces.
            Housing the Force
    Properly housing our personnel and their families remains a core 
quality-of-life issue. New initiatives underway in family housing, 
bachelor quarters, and housing allowances underpin our commitment. The 
military housing privatization authorities are rapidly becoming the 
sharpest tools in our kit. Erasing maintenance and repair backlogs and 
suitable-housing deficits hinges on the careful use of these 
authorities, in concert with the traditional application of 
appropriated dollars. Changes to the housing compensation system now 
provide allowances that more closely match actual housing costs.
    The availability of family housing program dollars continues to 
challenge the Department in its desire to eliminate maintenance and 
repair backlogs. With more than 45,000 homes in need of major repair or 
replacement, the Department is developing projects to be funded through 
a combination of family housing funds and an aggressive public-private 
venture (P/PV) program. By calling upon the strengths and capabilities 
of private-sector housing providers and experts, the P/PV authorities 
will allow the Department to accelerate revitalization goals and 
stimulate the development of quality housing units.
    The Navy is reexamining the requirements necessary to achieve the 
barracks standard of ``1+1'' (e.g., two single-occupant rooms that 
share restroom and bathing facilities) for permanent-party personnel in 
grades E-1 through E-4 and have committed to the development of 
installation-level implementation plans. The Navy plan will be 
completed by April 1998. Construction funds have been programmed 
through the current Future Years Defense Plan (FYDP) to help the Navy 
attain the ``1+1'' goal. The Marine Corps plan began in fiscal year 
1996 by identifying priorities at each installation, based upon 
projected manning requirements, the current inventory of adequate 
spaces, and proposed new construction. As an interim step in executing 
its plan, the Marine Corps has programmed more than triple the historic 
funding level to replace approximately 10,000 inadequate barracks 
spaces and meet a ``2+0'' standard by 2005 (e.g., double-occupant room 
with a private restroom and bathing facility).
            Child Care
    Affordable, high-quality child care also is a critical quality-of-
life requirement. Initiatives to expand availability include: 
contracting for spaces in qualified off-base civilian centers, 
expanding family child care to incorporate off-base residences, 
enhancing our resource and referral program, school-age care 
partnerships, and regional contracts with local providers.
            Community and Family Support
    Rounding out quality-of-life services for Marines, Sailors and 
families are community support programs, entailing individual and 
family support services. A full range of family support services, 
emphasizing basic skills for living, are available. The Marine Corps' 
formal Key Volunteer Network Program and the Navy's Ombudsman Program 
work at the grass roots level to assist spouses and families while the 
service member is deployed. In addition, the Marine Corps is 
implementing LINKS (lifestyle, insights, networking, knowledge, and 
skills) to assist new families adapt to life in the Marine Corps. These 
outreach efforts are an integral part of readiness and retention.
    Single Sailors and Marines represent the largest category of 
personnel in our Armed Forces. Typically, they live in modest 
accommodations, and need programs which enhance their physical and 
mental readiness, provide recreational opportunities, and offer 
meaningful and beneficial activities during off-duty hours. The single 
Sailor and Marine programs address these specific needs. Initiatives 
include safe and secure storage for personal belongings and vehicles 
during deployment, pier-side laundry facilities for those who live on 
board ship or are deployed overseas, and quality fitness equipment. The 
Great Lakes Training Center even has a recreational facility, providing 
activities for recruits during the recruit training curriculum.
            Meeting Spiritual Needs
    Quality of life for Sailors and Marines also means ministry at sea, 
in battalions, on flight lines, and in housing areas. More than 900 
chaplains in the Navy, including 350 serving with Marine Corps units, 
mold values by facilitating the free exercise of religious faith, 
providing around-the-clock pastoral care and counsel, and encouraging 
spiritual growth. As key players during crises, chaplains provide 
intervention skills and spiritual, emotional, and practical support 
during times of personal loss, bereavement, and transition. Chaplains 
interact with Family Service Centers, the Navy and Marine Corps Relief 
Society, American Red Cross, and other agencies to ensure that military 
personnel always receive superb support.
            Drug Demand Reduction Task Force
    The Secretary of the Navy's Drug Demand Reduction Task Force 
(DDRTF) continues its contribution to the war on drugs and is committed 
to increasing Navy and Marine Corps readiness. The cornerstone program, 
drug education for youth (DEFY), provides constant positive influence 
for 9- to 12-year-old children of Sailors and Marines. In 1998, the 
DDRTF is producing television public service announcements, 
spotlighting the ``It's a Life or Drugs Situation'' campaign.
            Serving our Retired Shipmates
    We are committed to fulfilling our promises to the more than 
460,000 Naval Service Retirees. The Navy and Marine Corps have 
established Retired Activities Offices worldwide, manned by volunteers 
who provide counseling and assistance to retirees and family members.
            Health and Fitness
    The goal of the health promotions program is to develop physical 
health and readiness of all Department of the Navy military personnel. 
Progress in achieving and maintaining a healthy lifestyle is evaluated 
through semiannual physical fitness and body-composition testing 
programs. Today's Sailors and Marines are more fit and healthier than 
at any other time in our nation's history.
    Morale, welfare, and recreation (MWR) programs support the mental 
and physical readiness of our Sailors. Our fitness and sports 
activities are the cornerstones of our approach to ensure all Sailors 
meet mandatory fitness standards. Our main focus is to engage naval 
personnel in a comprehensive fitness program for the benefit of the 
individual, the unit in which they serve, and the Department as a 
whole.
    To better prepare Marines for the rigors of combat, the Marine 
Corps is developing training and education programs that will provide 
access to basic sports-medicine information. These courses will be 
offered on the Internet and in CD-ROM format. Sports medicine and 
rehabilitation therapy (SMART) clinics at both San Diego and Parris 
Island Marine Corps Recruit Depots were established to assist recruits 
who receive sports-related injuries during their initial training. In 
addition, Marine Corps Base, Quantico, has established the Wellness 
Center in Larson Gym, to provide preventive medical care.
            Medical
    Quality health care is the hallmark of Navy medicine. In recent 
years, average accreditation scores for Navy hospitals have been in the 
90th percentile, exceeding average civilian hospital scores.
    Navy medicine will continue to find innovative ways to provide 
medical and dental care as close to the worksite as possible. Pierside 
clinics, deployment of health-care specialists with the operating 
forces, and new programs at recruit training activities that save 
valuable training time by delivering health care to trainees on-site 
are just the first steps.
    New technology enables the Navy to provide specialty consultation 
in remote areas and achieve cost and time savings by reducing the need 
to transport patients. It also greatly enhances the ability to provide 
quality health care for forward-deployed operating forces and at remote 
medical treatment facilities. The successful telemedicine technology 
developed in our operational testbed, George Washington (CVN 73), is 
now being applied to support operational medical services in other 
locations.
    Navy medicine is committed to providing an atmosphere of health 
care excellence. Guiding Navy medicine are three basic themes: taking 
health care to the deckplates; moving information not people; and 
making TRICARE work. TRICARE's triple option health plan offers 
opportunities to reduce family member out-of-pocket expenses and 
improves health care access. While the HMO option of TRICARE (Prime) is 
most likely the best choice for most family members and retirees, the 
program offers traditional fee-for-service options for those who prefer 
more freedom of choice in selecting a health care provider.
    We are working to improve the ways we assist people who have 
experienced problems with the health care system. We demonstrated a 
TRICARE Advocacy Plan at several facilities recently which has shown 
very promising results. The Department plans to expand this program to 
more Navy and Marine Corps bases.
    In conjunction with the Department of Defense and other Services, 
the Navy is working to ensure TRICARE's success. As TRICARE approaches 
full implementation in 1998, delivery of patient-focused, consistent 
health care to all beneficiaries, regardless of geographical location, 
remains our goal.
    Beneficiary education and customer-focused marketing are some of 
our important priorities. The Navy and Marine Corps leadership is 
promoting improvement of services and our response to the needs of 
Sailors, Marines, retirees, and family members. Encouraging current 
legislative authority allows the Department of Defense to proceed with 
the Medicare subvention demonstration project. Although the subvention 
test sites have yet to be approved, Navy is preparing to participate in 
this important demonstration. Working with DOD and the other services, 
we look forward to demonstrating our ability to offer TRICARE Prime to 
our valued retirees age 65 and older. We also are continuing to assess 
options to improve access to medical care for our Medicare-eligible 
beneficiaries. Indeed, we estimate that only half of our medicare-
eligible population lives near a military treatment facility and would 
therefore not be eligible to join TRICARE even if it were authorized 
across the country. Navy supports all initiatives to assess alternative 
health care options for our retirees. We are acutely aware of the 
``broken promise'' of lifetime care expressed by many retirees, 
especially those over 65 years old and not eligible for TRICARE. Recent 
efforts by DOD to review options to the present programs are fully 
supported by the Department. Our study of this issue will hopefully 
help us develop an equitable and consistent health plan for all 
retirees.
                               readiness
Today's Readiness: Mission Capable
    The Department's forward-deployed naval forces remain the most 
viable means for the nation to respond rapidly to contingencies around 
the world. On any given day, one-third of our ships, submarines, 
squadrons, and Marine units are deployed overseas. Multiple demands 
placed on non-deployed forces--units that recently returned from a 
deployment or are preparing for an upcoming commitment--require nearly 
one-half of these assets to be at sea or away from home port during 
that same day. Never has the Department asked more of its people and 
equipment during peacetime than today. Yet, the Navy and Marine Corps 
team remains ready, in all respects, to execute fully its many mission 
areas.
    Continuous naval presence in critical regions worldwide provides 
the National Command Authorities (NCA) a wide range of military 
capabilities. A visible, credible force possessing deep strike, 
amphibious, command and control, peacekeeping, and even environmental 
compliance enforcement capabilities is core to this nation's standing 
as the preeminent superpower. Presence is the key--and naval forces 
provide it every day in every corner of the world.
    Through their continued forward presence, naval forces help 
maintain global stability. Even though the fleet and the number of 
Sailors and Marines in uniform have been reduced, we remain ready to 
protect America's interest both at home and abroad. However, with a 
smaller force available to maintain the same level of commitment, it 
becomes increasingly important that non-deployed forces complete 
required repairs and training as scheduled. This is necessary in order 
to have units fully ready to meet follow-on forward-deployed 
operational commitments and overseas presence missions. Although the 
incremental costs for contingency operations are relatively small due 
to our forward presence, we must still divert programmed operations, 
maintenance, and training funds away from non-deployed forces to 
support such requirements. In the past, these actions were nearly 
transparent due to the size of the fleet. But with today's smaller 
force, absent supplemental appropriations, such actions have a more 
noticeable effect on readiness.
Tomorrow's Readiness Challenge
    Readiness remains a top priority and the fundamental gauge by which 
the Navy-Marine Corps team measures its ability to respond to current 
and future national tasking. Accordingly, we constantly monitor and 
assess our readiness to determine the right fiscal balance among 
operations, modernization, and recapitalization accounts. The 
Department's readiness monitoring system has proved reliable in 
identifying deficiencies quickly so that appropriate action can be 
taken.
    Naval forces are operating at a satisfactory, but lower, level of 
readiness. Today, deployed and non-deployed readiness continues to 
remain sufficient to meet all National Military Strategy commitments. 
We continue to assess the balance between operational and procurement 
accounts to ensure that we do not jeopardize our ability to transition 
instantly from peace to crisis to conflict.
    Readiness is not only limited to our ability to meet today's 
commitment; our readiness must be able to answer both near-term and 
long-term requirements as well. Providing the necessary tools our 
people need to operate both today and into the future is essential to 
maintaining operational primacy. Our current equipment readiness 
remains satisfactory. In some major warfighting systems where it is 
cost-effective, equipment is being remanufactured or given a service-
life extension (SLEP) to keep it operational. Two aircraft types, the 
electronic warfare EA-6B Prowler and the maritime patrol P-3C Orion, 
are perfect examples of systems that are upgraded to keep their 
warfighting edge. Other major weapon systems are substantially upgraded 
to provide a bridge to future systems. The F/A-18E/F Super Hornet and 
the remanufactured AV-8B Harrier will ensure Naval air superiority and 
potent strike options are maintained until the Joint Strike Fighter 
joins the fleet. Likewise, the retrofit of the AAV-P7 amphibious 
assault vehicle will keep it capable of conducting its mission until 
the advanced amphibious assault vehicle (AAAV) becomes operational.
    The Department is also formulating innovative systems for the 
future that will improve long-term readiness. Even as the most modern 
ships in the world leave the shipyards, active research and development 
efforts and budget conscious procurement plans for their replacement 
are underway. For example, 13 more Arleigh Burke (DDG 51)-class 
destroyers will join the fleet in the next four years under a cost-
effective multilayer procurement plan, yet we are developing an 
innovative DD-21 design for next century. The Navy's budget request 
includes funding for CVN-77. Its design will make it an affordable 
transition carrier for a new concept ship, the CVX. The New Attack 
Submarine and the San Antonio (LPD 17)-class amphibious ship are 
innovative replacements for their aging predecessors and are necessary 
to maintain long-term readiness. The vast amount of work in research, 
development, and fielding of Navy theater missile defense systems is 
yet another example of long-term investments that are paying off today. 
In short, aggressive long-range planning ensures Marines and Sailors 
will continue to have the tools that they require, at an affordable 
price.
    We also are examining innovative ideas to substantially reduce 
overhead costs. Smart Ship and Smart Base are initiatives to find ways 
to reduce personnel requirements on board our ships and bases. 
Similarly, we are investigating innovative technologies to improve 
efficiency and reduce crew size in new ship designs such as CVX and DD-
21. Regardless of whether we are giving new life to existing systems or 
taking a technological leap into systems of the next century, proper 
funding of modernization accounts is critical to our continued 
operational primacy and future readiness. Striking the correct balance 
between current and future readiness is vital.
Safety: Reducing the Risks
    Effective operational safety and occupational health programs are 
fundamental to preserving our resources and protecting our Sailors, 
Marines, and civilian employees from the daily hazards they face around 
the world. The Department's commitment to saving lives, and ensuring a 
high level of personnel and equipment readiness, have led to its 
unparalleled emphasis on safety programs.
    In response to congressional concerns, the Office of the Secretary 
of Defense chartered a Defense Science Board Task Force on Aviation 
Safety. The Department of the Navy supports the key task force 
recommendations including efforts to achieve a goal of zero mishaps, to 
institutionalize operational risk management (ORM) and to increase 
implementation of key commercial off-the-shelf (COTS) aviation-safety 
technologies.
    The Commandant of the Marine Corps and Chief of Naval Operations 
have signed new instructions that implement ORM. Training courses are 
under way to incorporate ORM into our daily operational routines. The 
Naval Safety Center provided an ORM ``Train the Trainer'' course, in 
order to jump-start implementation of operational risk management. The 
Marine Corps Combat Development Command and the Naval Doctrine Command 
are incorporating and embedding ORM in doctrinal publications. The 
Chief of Naval Education and Training and Marine Corps University will 
begin formal instruction of ORM during fiscal year 1998. Additionally, 
the Naval aviation Human Factors Quality Management Board (HF/QMB), 
started in 1996, has made huge strides in addressing human factors 
causes in mishaps, while serving as a platform to review technologies, 
policies, standardization, information dissemination, and cultural 
issues.
    The Navy and Marine Corps Class A operational mishap rate in fiscal 
year 1997 was second lowest ever. Navy aviation set a new record for 
safety in fiscal year 1997, including going 118 days without a Class A 
mishap. Leadership involvement and focus on operational safety, 
accountability, and implementation of ORM were instrumental in 
achieving this significant milestone. Current naval safety-of-flight 
programs include cockpit voice and flight data recorders, global 
positioning systems (GPS), ground proximity warning systems (GPWS), and 
helicopter health usage monitoring systems (HUMS) providing 
enhancements that will ensure long-term operational success and loss 
reduction.
    Aviation commands are developing and employing flight risk 
assessment and aircraft risk assessment matrices. A computer-based 
squadron assistance/risk assessment (SARA) program, developed by Boeing 
Military Aircraft Company (formerly McDonnell Douglas Aerospace) in 
cooperation with Marine Aircraft Group-13, will be incorporated into 
all Marine Corps squadrons in fiscal year 1998. Navy aviation units are 
preparing to adopt SARA. Additionally, the 3d Marines, an infantry 
regiment, significantly reduced mishaps by incorporating ORM into all 
training and exercises.
    These operational safety and survivability initiatives, implemented 
in conjunction with the Naval Safety Center, the Naval Postgraduate 
School, and Fleet and Fleet Marine Force (FMF) units, are reducing 
characteristic losses of the past. In units that activated the HF/QMB 
to address human factors in aviation, there was a 45 percent reduction 
in mishaps and have operated for more than 580 days without an 
operational flight fatality. The previous fatality-free record was 170 
days. New windows of human performance information and opportunity are 
being explored. The recent surge exercise by U.S.S. Nimitz (CVN 68) 
proved to be an excellent opportunity to measure the effect of fatigue. 
Through such efforts, we are moving swiftly toward the goal of reducing 
losses due to human factors by 90 percent in five years.
    The Department of the Navy remains committed to maintaining the 
balance between current readiness and aggressive modernization, which 
is critical to future readiness. Judiciously applying fiscal resources, 
improving safety records, and maintaining equipment contributes to 
today's readiness. Carefully planning for tomorrow through sound 
modernization practices will help create the most cost-effective force.
                technology: innovation and modernization
    The last decade showcases the diverse types of missions the Navy 
and Marine Corps undertake. From combat operations to disaster relief, 
from humanitarian assistance to civilian evacuations, our forces will 
need to adapt even more to the challenging operations of the future.
    The explosion of new technologies has transformed the way 
militaries conduct warfare. Capabilities available today were not 
considered possible a mere decade ago. It is evident that the growth 
rate of these technologies will continue to accelerate. This phenomenon 
of rapid expansion in technology requires that the Navy and Marine 
Corps become experts in the innovative application of emerging 
technology to new and existing weapon systems. Innovation is critical 
in order to transform the aggregate impact of leading-edge technology 
into battlespace dominance. Together, the Marine Corps Warfighting 
Laboratory and the Navy At-Sea Battle Labs provide a venue to 
institutionalize innovation within the Department of the Navy.
    Marine Corps Warfighting Lab.--The Marine Corps Warfighting 
Laboratory (MCWL) is the test bed for warfighting innovations within 
the Marine Corps. The MCWL investigates concepts and technologies and 
coordinates results with other Marine Corps organizations, defense 
industry, scientific research labs, academia, and the other military 
services. The MCWL developed the five year experimentation plan (FYEP), 
which consists of three phases, and is the cornerstone document for 
concept-based experimentation and the introduction of science and 
technology into the operating forces. Each phase is composed of 
limited-objective experiments (LOE) and culminates in an advanced 
warfighting experiment (AWE). The first phase, called Hunter Warrior, 
was completed in March 1997 and examined the contribution that a Marine 
air-ground task force (MAGTF) could make if provided with selected 
conceptual and technological improvements. Through the use of: enhanced 
targeting; precision fires; command, control, communications, computer 
and intelligence (C\4\I); and a limited deep operational maneuver 
capability--a force resembling a notional Marine expeditionary unit 
demonstrated a capability to shape the battlefield beyond current 
force-employment options. The next phase, Urban Warrior, will examine 
MAGTF operations in the urban littoral environment. This will be an 
advanced warfighting experiment (AWE) conducted on the east and west 
coasts of the United States in densely populated urban centers. 
Following Urban Warrior, the first Five-Year Experimentation Plan will 
culminate in Capable Warrior. This last AWE will experiment with naval 
expeditionary forces in an urban littoral environment.
    Navy At-Sea Battle Labs.--Reflecting the inherent mobility of naval 
forces, the Navy's battle labs are not single physical entities, but 
rather the fleet itself. To bring technology and operational concepts 
together with real world conditions, the Navy employs fleet units as 
at-sea battle labs. Creating a virtual laboratory, the Navy initiated a 
series of fleet battle experiments (FBE) that use operational forces 
engaged in training exercises. The FBE's take forward-looking programs 
and integrate them with innovative operational concepts. These 
experiments focus on future programs that align the Navy with Joint 
Vision 2010 and other emerging operational concepts. In September 1997, 
the Third Fleet sponsored a sensor-to-shooter demonstration as part of 
Fleet Battle Experiment Bravo. A SEAL team on the ground in China Lake, 
California, transmitted an image of a target, via satellite, to San 
Diego. The image was transferred to a classified web page and 
downloaded to Coronado (AGF 11), the Third Fleet flagship. The final 
destination for the target image was the cockpit of an F/A-18, enabling 
the pilot to see the target, fly to it, and conduct a successful air 
strike. After the strike, the target image was retransmitted to the 
same locations to aid battle-damage assessment.
    Network Centric Warfare.--In April 1997, the Chief of Naval 
Operations declared that the Navy was shifting from platform-centric to 
network-centric warfare. This is warfare which derives its power from 
the networking of a well-informed but geographically-dispersed force. 
The enabling elements are a highly-webbed information service, access 
to all appropriate information sources, weapons reach with precision 
and speed of response, value-adding command-and-control processes--to 
include high-speed, automated assignment of resources to need--and 
integrated sensors hosted on the information network and closely 
coupled in time to the shooters and command-and-control processes. 
Network-centric warfare is applicable to all levels of warfare and 
contributes to the coalescence of strategy, operations, and tactics. It 
is transparent to mission, force size, and composition, and geography.
    Information Technology 21.--Joint Vision 2010 highlighted the 
critical role information plays in the success of military operations. 
Increased processing power, networking capabilities, and software 
enhancements will have a dramatic and decisive impact on future 
warfighting. Under the Information Technology-21 (IT-21) concept, the 
Navy is building a communications-and-networking backbone that will 
support the rapid exchange of information between naval and joint 
platforms. New doctrine and organizations also are being developed to 
allow the Navy to take full advantage of these changes.
    Trader's War Game Series (1995-1997).--In 1995, the Marine Corps 
initiated an effort to address a key reality of the future battlefield: 
widely dispersed units relying on longer range engagement through 
indirect fires, with the concomitant problem of engagement 
coordination, stressing information management and rapid, intuitive 
decision-making and pattern analysis. The initial phase of this program 
was conducted at the New York Mercantile Exchange (NYMEX) to extract 
relevant lessons from the daily ``information war'' occurring on the 
trading floor. This program is now poised to consider other nonmilitary 
organizations that confront the rapid decision-making dilemma, 
including large city police and fire departments, search and rescue 
organizations, the Federal Aviation Administration's air traffic 
control process, and medical trauma units.
    Wall Street Game.--The Naval War College brought an eclectic group 
of professionals together to conduct a war game at the World Trade 
Center. Wall Street leaders, government experts on trade and finance, 
bankers, foreign policy specialists, and military officers from all the 
services examined the impact of a major regional conflict in the Middle 
East on trade and international financial markets. The war game also 
examined the market effects of systematic information warfare on power 
grids, telecommunication systems, and banking data bases. Its lessons 
learned will enrich our understanding of the symbiotic relationship 
between international events, communication systems, energy 
infrastructures, and military affairs.
Exploiting Technology in Major Programs
    After technology and innovative concepts are identified, tested, 
and validated, the Department of the Navy's acquisition process ensures 
technology insertion into important programs. Some examples include:
    F/A-18 E/F.--Throughout the development of the F/A-18E/F, the 
insertion of key technological capabilities and sensible systems 
engineering trade-offs were made resulting in an affordable aircraft 
that is second to none. Its use of current and cutting-edge 
technologies make it a cost effective aircraft with sufficient growth 
potential to meet long term threats and evolving requirements. For 
example, the extensive use of composite materials in an enlarged 
airframe, combined with a new engine, extended the range of the Super 
Hornet by 40-50 percent, greatly improved its ability to stay ``on 
station'' in support of ground forces, and increased its weapons 
payload over that of the F/A-18C/D. The combination of radar cross-
section reduction, defensive electronic countermeasures, better 
endurance, and integration of standoff weapons improved survivability 
in a balanced, affordable way. It has vastly superior offensive 
capabilities due to the integration of joint standoff guided munitions, 
combined with sufficient growth margins to accept next generation 
electronics and weaponry.
    CVX.--This next generation nuclear-powered aircraft carrier is 
scheduled to begin construction in 2006 to replace Enterprise (CVN 65). 
To accomplish the dramatic technological changes which are envisioned, 
CVX will begin a formal 5-6 year design process in 2000. This process 
will include a comprehensive research and development effort to 
determine the best CVX big-deck carrier design. The result of this 
study will be a carrier that has substantially lower life cycle costs, 
improved capabilities, and more flexibility. The new carrier fleet must 
accommodate a dynamic range of missions in an increasingly uncertain 
world. CVX, with a projected 50 year life, will be the centerpiece of a 
carrier fleet that will lead naval aviation well into the next century.
    New Attack Submarine (NSSN).--NSSN will be the most technologically 
advanced submarine the Navy has developed, with built-in flexibility to 
ensure easy insertion of new technologies. Additionally, it is being 
designed and built with a host of advanced technology systems that can 
be broadly grouped into four categories:
  --Operational-Requirements: new technologies, such as the lightweight 
        wide-aperture array, and a more advanced electromagnetic 
        silencing system that support warfighting improvements.
  --Affordability: technologies that reduce overall cost, such as 
        modular isolated deck structures, an open-system architecture 
        command and control system for easy technology upgrades, and a 
        ``life of the ship'' reactor core.
  --Re-engineering: use of existing submarine technology that can be 
        scaled to the NSSN, such as the ultraquiet, high-power-density 
        main propulsion unit, and weapons launch and handling system 
        components, which will be smaller, fewer, and less expensive 
        than those on Seawolf (SSN 21).
  --Environmental Requirements: technologies to set the standard in 
        environmental compliance, such as non-ozone depleting air-
        conditioning plants and less hazardous hull coatings.
    DD-21.--DD-21, the designation given to the first ship in the SC-21 
class Land Attack Destroyer, will represent a dramatic advance in 
precision strike and naval surface fire support for forces ashore. By 
including industry early in the design process, many of the ship 
characteristics and systems designs will exploit leading-edge 
commercial technologies and commercial supportability. The ship will 
possess a single, fiber-optic based, real-time distributed computing 
environment, using commercial off-the-shelf (COTS) processors and user-
friendly common displays. This system alone will significantly reduce 
the number of Sailors required to operate, maintain and support the 
ship. The integration of Joint C\4\ISR systems will permit the creation 
of a real-time tactical picture needed to respond to calls for fire 
from troops ashore in a timely and accurate manner. An advanced 
multifunction radar, fully integrated shallow-water-capable sonar 
system, cooperative engagement capability, and extended-range guided 
munitions will ensure that DD-21 plays a significant role in supporting 
three-dimensional battlespace dominance, at sea and ashore. In order to 
operate extensively in the littoral, DD-21 will possess full-spectrum 
signature reduction, active and passive self-defense systems, and will 
incorporate cutting-edge survivability features. A highly efficient 
hull form, along with fuel efficient propulsion, will support 
significant reductions in operating costs.
    MV-22 Osprey.--The MV-22 Osprey is a revolutionary, advanced 
technology, vertical and short takeoff and landing (V/STOL), 
multipurpose aircraft that provides the performance of a turboprop 
transport with the hovering capability of a helicopter. With more than 
78 percent of the MV-22's load-bearing structural weight fabricated 
from composites, the aircraft is more than 700 pounds below the 
specification weight. Increased reliability and maintainability have 
been part of the MV-22 design process from the start. Maintenance, as 
all other aspects of MV-22, has been tested for human factors such as 
adequate access, reduction of MV-22 unique tools, and use of on board 
monitoring systems that determine when components need replacement by 
providing extensive fault-detection capabilities. The MV-22 
construction also incorporates many features that enhance its combat 
survivability, including: composite structural components that provide 
increased ballistic tolerance; triple-redundant, digital fly-by-wire 
flight controls; and a cabin overpressurization system that provides 
chemical and biological protection.
    Advanced Amphibious Assault Vehicle (AAAV).--The AAAV uses the most 
power-dense diesel engine in the world. The AAAV also is the first U.S. 
combat vehicle to use fully retractable hydro-pneumatic suspension 
units, providing land mobility equivalent to or better than the M-1A1 
main battle tank. For high-water speed propulsion, the AAAV uses two 
newly developed internal 23-inch waterjets. Speeds in excess of 20 
knots are achieved by retracting its suspension and deploying 
appendages to create a large planing surface. The AAAV is incorporating 
recent advances in embedded training and electronic technical-manual 
technologies, as well as state-of-the-art diagnostics capabilities. The 
vehicle incorporates the newest nuclear, biological and chemical 
protection system, and it has a fully stabilized turret capable of 
mounting a variety of weapons that are more accurate and lethal than 
currently fielded weapons. Finally, the AAAV armor is composed of 
state-of-the-art ceramic tile on advanced composites, providing 
ballistic protection while reducing the vehicle's weight.
    Joint Strike Fighter (JSF).--JSF represents a Department of Defense 
initiative to produce an advanced aircraft with extensive capabilities 
at a minimum cost. Advances in technology promise to create an aircraft 
with substantial combat mission radius, high survivability against air 
defenses, and a potent payload. Advances in electronics, composite 
materials, flight control design, aircraft propulsion, and 
manufacturing processes are at the core of these capabilities. 
Technological innovations will allow JSF to be a multi-role aircraft 
capable of maritime operations as well as short-take-off and vertical-
landing flight operations.
    Non-Lethal Weapons Development.--The four services and the U.S. 
Special Operations Command have joined together in an effort to field 
quickly a low-cost alternative to lethal weapons.
    The Commandant of the Marine Corps, as the Department of Defense's 
executive agent, has taken several aggressive steps to organize and 
coordinate the efforts in this critical area. The Joint Non-Lethal 
Weapons Directorate serves as the focal point for all DOD nonlethal 
weapons activity, as well as a clearinghouse for exchange of 
unclassified information on nonlethal technologies with other U.S 
agencies and foreign governments. Efforts to date have provided 
operational forces with nonlethal weapons, to include: 40 mm sponge, 
sting-ball, and foam baton rounds; tactical water cannons; and hand 
grenade dye markers.
Research and Development Opportunities
    History has demonstrated that superior technology can provide a 
decisive edge in warfighting. The Department's fiscal year 1997 science 
and technology program developed new technology options to meet the 
worldwide spread of warfare capabilities. Basic research programs 
expanded our fundamental knowledge of maritime sciences and 
engineering, materials, and information sciences; our applied research 
exploited and evaluated technology options for specific naval problems; 
advanced technology development programs demonstrated the operational 
capability of new technologies--as stand-alone systems and as 
enhancements to existing systems; and our manufacturing technology 
programs worked to ensure novel technologies can be affordably 
manufactured.
    Because technology opportunities always are richer than the 
available resources, funds were leveraged through partnerships with the 
other services, government agencies, academia, and industry for many 
programs. For example, successful fiscal year 1997 program partnerships 
included the joint countermine advanced concept technology 
demonstration; SandyDuck 97, a comprehensive field study of coastal 
dynamics, an area vitally important for nearshore naval operations; the 
thermal spray nanoscale coatings initiative, which developed a new 
coating for ships, aircraft, and land vehicles to prevent wear and 
erosion; and the power electronic building blocks program, which 
promises to revolutionize naval and commercial power systems.
    During fiscal year 1997, basic naval research investments had 
global implications, including the discovery of the atom laser, 
successful testing of a combination of anti-rejection drugs for 
transplant recipients, and a Nobel Prize winner in chemistry. Navy 
medical researchers continue to work on several initiatives to reduce 
the number of battlefield deaths from loss of blood. These efforts will 
not only improve delivery of lifesaving blood products to casualties in 
a combat environment, but also would relieve the logistical demands of 
storing and regularly replenishing different blood types.
    While our future adversaries may not be known, it is very clear 
that emerging technologies have forever altered our concept of future 
conflicts. The role of technology and our ability to exploit its 
advances demands that the Navy and Marine Corps maintain a robust 
science and technology program to research, develop, apply, and perfect 
revolutionary technologies. It is imperative that the Department of the 
Navy support a solid basic and applied research effort so that 
tomorrow's conflicts are fought with the most technologically advanced 
systems available.
Exploiting Technology to Improve Training
    Increased use of distributive training and distance learning and 
technology have the potential to change dramatically the way we train 
and educate Sailors and Marines. Just as modern weaponry has influenced 
warfighting, investments in education technology will shape the way in 
which we teach and train our force. Sailors and Marines from around the 
globe, ashore and at sea, will have continual access to instructors and 
educators previously available only to resident students. The 
Department's training and education plans emphasize that an investment 
in modernization and recapitalization in educational technology will 
improve training effectiveness for better performance and operational 
readiness of our fighting force.
    The Department is exploring a variety of advanced technologies for 
developing and delivering instructional products where they are most 
needed. In the near future, Sailors and Marines can expect to use the 
internet and intranets, learning resource centers (LRC's), interactive 
multimedia instruction (IMI), video tele-training (VTT), and embedded 
training (ET) to learn new skills.
    The Navy modeling and simulation (M&S) roadmap focuses on utilizing 
M&S tools to enhance operational training, in port and under way. 
Current Navy M&S initiatives include: research, evaluation, and system 
analysis (RESA) maritime simulation, which is used to replicate naval 
systems and movements in wargaming; and the enhanced naval wargaming 
system (ENWGS). ENWGS is a computer-based simulation system which 
provides realistic wargaming in all aspects of naval warfare, from the 
tactical to strategic level of play, and provides pertinent decision-
making training for battle group staffs. The next-generation M&S 
training tool is the joint simulation system (JSIMS). JSIMS-Maritime 
will be the primary M&S tool to support operational training, 
education, mission rehearsal, and doctrine development. The Marine 
Corps received an addendum to the Joint ORD to include Marine Corps 
specific requirements. It also will complete the JSIMS-Maritime concept 
of operations and initiate its conceptual modeling effort. Finally, 
interactive multi-sensor analysis training (IMAT) is revolutionizing 
undersea warfare training. IMAT uses advanced computer visualizations 
of threat platforms, environmental effects, and sensor/processor 
systems, to build conceptual training for complex sensor operation and 
tactical planning tasks. IMAT has been adopted by aviation warfare and 
by ship sonar technician apprentice schools, and is being used in 13 
advanced courses.
    The Marine Corps modeling and simulation master plan (MCMSMP) 
articulates M&S vision, objectives, and management framework for Marine 
Corps. The Marine Corps M&S investment strategy (MCMSIS) delineates the 
Marine Corps plan to achieve the desired M&S end state. These documents 
provide a common structure for coordinating M&S within the Total force, 
and will be combined into a single comprehensive plan in early 1998. 
Examples of progress under the MCMSMP and MCMSIS include the 
construction of a Range Instrumentation Systems Concept Exploration 
Experiment at the Marine Corps Air-Ground Combat Center in Twentynine 
Palms, California. This experiment led successfully to the production 
of the Operational Requirement Document for Range Instrumentation 
Systems. Additionally, Marine Corps is fully vested in high level 
architecture compliance mandated by the Department of Defense, in close 
coordination with the Navy.
       efficiency: exploiting the revolution in business affairs
Acquisition Reform
    The Department of the Navy's research, development and acquisition 
team continues to be the engine for developing, procuring and 
supporting technologically superior and affordable systems for the Navy 
and the Marine Corps, as well as joint and allied forces. These 
critical goals are being attained through strategic acquisition 
reforms, the application of a range of tools, and the implementation of 
the Federal Acquisition Streamlining Act and the Clinger-Cohen Act.
    The Department of the Navy is confronting key management issues and 
developing tools such as ``cost as an independent variable'' (CAIV) to 
reduce total ownership costs. Acquisition specialists are inserting 
commercial dual-use technologies into fielded weapon systems, to make 
operations and support costs more affordable. The Department is 
accelerating the move from military specifications and standards to 
performance-based specifications through Navy-developed software tools 
such as TURBO STREAMLINER, SPECRIGHT!, and the Single Plant Process 
initiative.
    Acquisition Center of Excellence.--The Department of the Navy is 
committed to developing the infrastructure that enables large 
distributed work teams to produce higher quality systems at reduced 
cost over a shorter period of time. The embodiment of this commitment 
is the Acquisition Center of Excellence (ACE), an institution that will 
serve as a test bed and development site for the Navy's simulation-
based acquisition (SBA) effort. The SBA initiative is expected to 
revolutionize the design and procurement of major systems, thus 
reducing total life-cycle cost and acquisition time.
    Acquisition Work Force.--Today's acquisition workforce is 
approximately half the size it was in 1989, numbering 95,895 as defined 
in the Fiscal Year 1998 DOD Authorization Act at the end of fiscal year 
1997. Reducing the work force has been steady and controlled, 
accomplished largely through retirement incentives, base realignment 
and closure actions, and organizational restructuring. At the same 
time, procurement has become more technologically complex and the 
expectations of the fleet even greater. As we further reduce manpower 
levels to 86,868 by the end of fiscal year 2003, it is imperative that 
the acquisition force structure be composed of the right people, with a 
balanced education, training, and skill mixture.
    The Department has had difficulty over the past several years 
bringing young people into the acquisition field. To meet this 
challenge, the Department implemented a plan during the past year that 
triples the acquisition intern program. This initiative should help to 
ensure the availability of highly qualified people to fill senior 
acquisition positions.
    Acquisition Reform Success Stories.--The Department's bold approach 
is reflected in many successes. Some examples include:
  --F-14 Precision Strike Fighter Team.--This program has demonstrated 
        what teamwork and innovative thinking can accomplish. 
        Partnering with Lockheed Martin, the team used the LANTIRN 
        targeting system to give the F-14 a night and precision-guided 
        munitions delivery capability. The first fully operational 
        system was deployed 223 days after contract award, two years 
        ahead of schedule. By using commercial off-the-shelf 
        technology, the team realized significant savings estimated as 
        more than $173 million.
  --Chemical Biological Incident Response Force.--The Marine Corps 
        Systems Command rapidly procured and fielded a suite of 
        equipment to support Marine Corps Chemical Biological Incident 
        Response Force (CBIRF) requirements. Using an abbreviated 
        acquisition program (AAP) strategy, commercial-off-the-shelf 
        (COTS) and non-developmental items (NDI) were examined. 
        Equipment for the CBIRF was acquired to fulfill mission-
        critical and mission-essential requirements. Procurement and 
        delivery of equipment to CBIRF was accomplished in less than 
        nine months time.
    Joint Maritime Communications Strategy (JMCOMS).--JMCOMS will 
provide an extensive communications infrastructure to meet tactical and 
support communications requirements. Capabilities range from real-time 
transmission of intelligence and weapons targeting data to the ability 
of our men and women at sea to communicate directly with loved ones at 
home. The Navy has reduced system acquisition time from 4-7 years to 
less than 2 years. Using innovative architecture, one key subsystem--
the UHF miniaturized digital assigned multiple access (mini-DAMA) 
terminal--achieved savings estimated at 50 percent of acquisition costs 
and 30 percent of total life cycle costs, compared to previous 
terminals.
    Multifunctional Information Distribution System (MIDS).--This 
multinational cooperative development program is aggressively using 
open systems architecture, commercial products, innovative acquisition 
streamlining techniques, and cost as an independent variable. The 
terminal architecture implements nonproprietary open commercial 
standards that will facilitate technology insertion throughout the life 
cycle of the program. The average recurring unit cost of MIDS has been 
reduced from an early estimate of $428,000 to well below $250,000. The 
technical and costs management success of the program has attracted the 
attention of numerous European nations.
    Tactical Air Moving Map Capability (TAMMAC).--The TAMMAC team 
developed an integrated acquisition and logistics concept that 
emphasized current technology, standardized unit configuration for all 
aircraft, minimized use of military specifications and maximized use of 
commercial-off-the-shelf hardware and organization-to-commercial depot 
maintenance. Traditional internal configuration control responsibility 
for system components was transferred to the original equipment 
manufacturers, improving the visibility of manufacturing resource and 
industrial base issues. The TAMMAC cost savings estimates are more than 
$360 million over the life of the system, with an 83 percent reduction 
of required spares.
Infrastructure Reform
    Infrastructure reductions have not kept pace with force-structure 
reductions. Previous reductions in infrastructure as a result of the 
Base Realignment and Closure (BRAC) process have proved helpful in 
bringing fleet and force support costs down. Additional reductions 
under a similar program are needed to bring our infrastructure in line 
with our smaller force. To this end, the Department is conducting an 
ongoing review of our organizations and our policies for operations, 
maintenance, personnel, and training. We must run our ``businesses'' 
much as the private sector does--with a minimum of duplication and red 
tape, and a maximum of service and responsiveness. Any efficiencies 
gained through a leaner infrastructure can be invested in force 
modernization and readiness.
    Two issues are critical to our efforts to increase efficiency: our 
regional maintenance strategy and the application of state-of-the-
market business practices to reduce infrastructure costs.
    Regional Maintenance Strategy.--The regional maintenance strategy 
implements a fundamental restructuring and consolidation of our shore 
maintenance capabilities. During the past 3 years, the Navy has 
established 7 regional maintenance centers. These new maintenance 
organizations have contributed significantly to maintaining high 
deployed fleet readiness despite a challenging operational tempo, base 
realignments and closures, repair ship decommissionings, and decreased 
resources.
    By aggressively executing the Navy's regional maintenance strategy, 
our industrial resources are more fully utilized, particularly in the 
repair and maintenance depots. Regional repair centers are moving into 
depots and are jointly manned by civilian and military technicians. 
Consequently, regional facility footprints and associated expenses are 
being reduced. Job planning, coordination, material support, and 
information distribution improvements and integrations are well under 
way. For example, the most recent pilot initiative at Pearl Harbor, 
Hawaii, provides a methodical, phased approach to integrate completely 
the resources of the Naval Intermediate Maintenance Facility and Pearl 
Harbor Naval Shipyard into a new maintenance organization. The 
resulting consolidated workforce forms a common manpower resource pool 
that can be efficiently and effectively assigned as required. A project 
management strategy will be used that is both responsive and cost 
efficient for all types of repair and maintenance work.
    State-of-the-Market Business Practices.--The first step to 
implement new business practices is to create an organizational 
structure that accelerates positive process changes. Second, we need to 
improve installation management by focusing on business perspectives of 
efficiency, price competition, and customer satisfaction. Some examples 
include:
  --Marine Corps Continuous Process Improvement Program.--The Marine 
        Corps Continuous Process Improvement Program (MCCPIP) is the 
        agent for reengineering key business processes of the combat 
        development system (CDS). The CDS translates concepts and 
        requirements into integrated capabilities, which in turn 
        constitute the building block elements of Marine air-ground 
        task forces.
  --Cruise Missile Command and Control Program Office.--This program 
        office teamed the Department of the Navy with the Defense 
        Logistics Agency and Federal Express to build a logistics 
        support system that increased material readiness while reducing 
        logistics costs. The initiative has been a success: the average 
        transit time for material being requested by ship has been 
        reduced from 32 to 6.5 days, and overall cost avoidance to date 
        is nearly $13 million.
    Other examples of initiatives which are expected to improve 
operational or administrative efficiencies and reduce costs include:
    Outsourcing.--In 1996, the National Performance Review (NPR), the 
Commission on Roles and Mission (CORM), the Defense Science Board 
(DSB), the CNO's Executive Panel and the Center for Naval Analysis 
(CNA) recommended outsourcing non-core functions as a means of reducing 
overall costs of operations, improving business processes across the 
Department of Defense infrastructure, and recapitalizing those savings 
for modernization. The Department of the Navy has incorporated a 
comprehensive plan to reduce infrastructure costs through competition, 
privatization, and outsourcing. An estimated 80,500 full-time 
equivalents (FTE's) from the Navy and 5,000 FTE's from the Marine Corps 
have been programmed for study over the future years defense plan. The 
Navy initiated studies in fiscal year 1997 on over 10,500 FTE's and 
plans to study more than 15,000 FTE's in fiscal year 1998, with more in 
successive years.
    Activity Based Costing (ABC).--ABC properly allocates all direct 
and indirect costs for identified services and enabling management. ABC 
also identifies and improves processes for reducing costs, raises cost 
consciousness, justifies budgets, satisfies informational requests from 
higher headquarters, and facilitates outsourcing cost comparisons. The 
Marine Corps has implemented ABC throughout the facilities maintenance 
organizations at continental U.S. (CONUS) installations and will expand 
this capability to logistics and supply organizations over the next 2 
years.
    Marine Corps Force Structure Review Groups.--For years, the Fleet 
Marine Forces have been operating below targeted manpower levels as we 
struggled to balance structure requirements against available Marines. 
Using the Quadrennial Defense Review as an opportunity for a self 
examination of roles, missions, and capabilities, the Marine Corps 
focused on how best to organize for the challenges of the 21st century. 
The major objective of the active duty and reserve force structure 
review groups was to identify and make recommendations to remove force 
structure which no longer contributed significantly to the Marine 
Corps' warfighting capability. The successful attainment of the 
objective led to reductions in supporting establishment billets and an 
increase to a 90 percent manning level in the Fleet Marine Forces.
    In addition to the review groups, the Total Force Structure (TFS) 
Division was formed at Marine Corps Combat Development Command in June 
1997. This organization is continuing the evaluation of Marine Corps 
organizational posture as it relates to available billet structure and 
equipment. The review process involves a close examination of the 
mission of each combat or supporting establishment element, its 
organization, equipment, and the manpower required to accomplish that 
mission.
    Regionalization.--The Navy has embarked on an aggressive effort to 
reinvent the operation and management of our shore establishments to 
free resources for readiness and modernization. The Chief of Naval 
Operations, fleet commanders, major claimants, and naval base 
commanders are conducting detailed analyses in Navy concentration areas 
to consolidate installation management functions. The goal of 
regionalization is to reduce base operating support costs through the 
elimination of unnecessary management layers, duplicative overhead, and 
redundant functions. Regionalization also facilitates better work force 
utilization, opportunities to outsource across an entire region, 
standardization of processes, and regional planning and prioritization.
    In another effort, Department of Defense components were directed 
to regionalize base-level civilian personnel functions and reduce 
manpower to a 1:100 ratio between personnel specialists and the 
serviced population. Attainment of this servicing ratio requires 
reducing (by approximately 45 percent) the number of employees 
providing base-level civilian personnel services by the year 2001. 
Regionalization provides a return on investment by standardizing human 
resource services and eliminating duplication.
Challenge of International Programs
    Through international programs, the Department of the Navy provides 
assistance to America's allies and partners. Such diverse programs as 
Foreign Military Sales (FMS), leases, and grants of defense articles 
and services; cooperative programs, which promote bilateral interaction 
on a broader scale; protection of key technologies while facilitating 
release authority for transferable technologies; and training and 
education, produce mutually favorable relationships. Examples of the 
benefits produced by participation in international programs include:
  --Cooperative research and development (R&D) projects reduced Navy 
        R&D costs by more than $1.6 billion since 1987;
  --FMS reduces unit costs: Foreign sales of F/A-18 reduced the per 
        unit cost by $2.1 million, saving $2.3 billion since 1979;
  --Foreign comparative testing leverages foreign non-developmental 
        items: Existing systems and platforms like the F-14 Tomcat are 
        modernized with digital flight control systems;
  --Security assistance helps sustain industrial base: Numerous 
        production lines are sustained by foreign sales.
    Supporting U.S. industry and obtaining maximum results from 
increasingly constrained national resources are key challenges. The 
Department must join more efficiently and flexibly with allied nations 
to accomplish critical technology advances. The core element necessary 
to meet this challenge is early engagement of allies, during the 
missions needs analysis stage, to identify common mission problems and 
acceptable performance requirements.
    Recognizing the benefits as well as challenges, the United States 
and its allies are increasing efforts to achieve desired efficiencies 
and improved warfighting effectiveness through international programs.
Environmental Issues
    Effective environmental planning to meet the requirements of 
environmental statutes, executive orders, and regulations is essential 
for facilities management, acquisition programs, and military 
operations. Department strategies for establishing partnerships with 
regulators, stabilizing funding, and reducing the cost of cleanup at 
active and closing bases are paying dividends. The cleanup program 
cost-to-complete estimate continues to show reductions.
    In the area of environmental protection, the Department has made 
substantial progress with respect to shipboard pollution control. A 
solid-waste plan was developed for surface ships in order to comply 
with the Act to Prevent Pollution from Ships. A submarine addendum to 
this plan is in development. Meanwhile, the Department is coordinating 
with the Environmental Protection Agency (EPA) and coastal states to 
create uniform national discharge standards for military vessels. At 
shore installations, the Department continues to serve as the 
Department of Defense executive agent for Clean Air Act and Clean Water 
Act implementation. The Department works closely with EPA and states to 
ensure both compliance and protection of the military mission. The 
Department is achieving its natural resources conservation goals by 
emphasizing stewardship of natural resources, preserving biological 
diversity, and developing partnerships for conservation.
                                programs
    The following paragraphs describe the key programs involved in 
building the naval forces that support and defend U.S. interests. These 
programs represent an integrated--although unprioritized--snapshot of 
the diverse capabilities necessary for the Navy-Marine Corps team to 
conduct a wide range of missions.
Shipbuilding and Naval Weapons Programs
    Aircraft Carriers.--Twelve aircraft carriers form the centerpiece 
of naval global forward presence and striking power. Harry S Truman 
(CVN 75) currently under construction at Newport News Shipbuilding, is 
expected to be commissioned in fiscal year 1998. At that time, the 
Navy's oldest active commissioned carrier, Independence (CV 62), will 
transition to the inactive fleet. The keel for Ronald Reagan (CVN 76) 
has been laid for a fiscal year 2002 delivery, and CVN 77 will enter 
the fleet in fiscal year 2008, as the two remaining Kitty Hawk-class 
carriers are retired. CVN 77 is being designed to serve as a 
``transition carrier'' to the CVX, incorporating new technologies and 
process design changes that will move naval aviation to a future 
carrier design. The CVX will be commissioned in 2013, in time to 
replace Enterprise (CVN 65), which will reach the end of its service 
life at 52 years. CVX will be the most technologically advanced 
nuclear-powered carrier the Navy has ever developed. It will employ 
technologies that reduce operating costs yet improve its warfighting 
capabilities. Better survivability, more flexibility through an open 
architecture command and control system, an advanced aircraft launch 
and recovery system, a state-of-the-art propulsion system, and reduced 
manning will be incorporated in the new design. It will facilitate 
joint and combined operations and will give the nation a more flexible 
and less costly big-deck aircraft carrier for the next century.
    Amphibious Lift.--The current amphibious lift modernization plan is 
formed around the 12 amphibious ready groups (ARG's) needed to meet the 
nation's forward-presence and contingency requirements. The plan 
includes the fiscal year 1998 delivery of Bon Homme Richard (LHD 6) and 
Pearl Harbor (LSD 52)--the final Harpers Ferry (LSD49)-class ship--and 
the fiscal year 2001 delivery of Iwo Jima (LHD 7). The San Antonio (LPD 
17) class of ships, another critical piece of our future amphibious 
force, will begin delivery in fiscal year 2002. The LPD 17 class 
incorporates major improvements in command-and-control and ship self-
defense systems, which will increase its ability to operate 
independently of the ARG when required. This class is the critical link 
in achieving the goal of a modern 12-ARG force. LPD 17 is the 
functional replacement for aged amphibious platforms including: LPD 4, 
LKA, LST, and LSD 36 classes of ships. This acquisition plan is key to 
maintaining the 2.5 Marine expeditionary brigade equivalents of lift, 
currently met by using marginal Naval Reserve Force and inactive ship 
maintenance facility assets. Construction of LPD 18, the second ship of 
the class, is scheduled to begin in fiscal year 1999 with procurement 
of two additional ships planned for fiscal year 2000.
    New Attack Submarine (NSSN).--NSSN plays a pivotal role in the 
Navy's recapitalization plan. In fiscal year 1998, the Navy begins NSSN 
construction at a low but efficient rate in order to build adequate 
numbers of our next generation of quiet submarines. The NSSN counters 
the proliferation of advanced-capability submarines and establishes the 
foundation for better technology insertion into the submarine force. 
New modular-construction techniques and a contract-teaming plan combine 
with an innovative design process to fundamentally enhance the 
production quality and the affordability of this ship. Features 
include:
  --Open Systems Architecture.--Using widely available public-domain 
        standards, the combat, communication, and information systems 
        will have industry-standard interfaces that offer portability 
        and software reuse to simplify cost-effective upgrades.
  --Fiber Optic Cable Systems.--A platform-wide fiber optic cable 
        installation will be sized for future growth. The structure of 
        the network simplifies the attachment and integration of new 
        equipment in a plug-in/plug-out manner.
  --Commercial-off-the-Shelf (COTS) Electronics.--Use of commercially 
        available electronics leverages the growth in signal and 
        information processing and display technologies occurring in 
        industry.
  --Isolated Deck Structure.--This design facilitates ease of equipment 
        integration, provides shock and acoustic isolation sufficient 
        to allow the use of COTS technology, and incorporates emerging 
        noise-control technologies.
    Seawolf (SSN-21)-Class Submarine.--Seawolf performed superbly 
during initial sea trials in July 1996, demonstrating the fastest, 
stealthiest characteristics of any submarine at sea. Seawolf will 
enhance significantly U.S. undersea superiority even against our most 
capable adversaries.
    SSN 688 Class Submarine Modernization.--SSN 688-class submarines, 
which will comprise 68 percent of the attack submarine force in 2015, 
must be modernized to ensure that they remain effective against 
increasingly sophisticated undersea adversaries. The use of COTS and 
open systems architecture (OSA) will enable rapid (annual) updates to 
both software and hardware, and the use of COTS-based processors means 
that sonar system computing power can grow at the same rate as 
commercial technology.
    A-RCI is a four-phased transformation of existing sonar systems 
(AN/BSY-1, AN/BQQ-5, or AN/BQQ-6) to a more capable and flexible COTS/
OSA-based system. It also will provide the submarine force with a 
common sonar system. The process is designed to minimize the impact of 
fire-control and sonar system upgrades on a ship's operational 
schedule, and will be accomplished without the need for major shipyard 
availabilities. Phase I, which commenced in November 1997, will enhance 
towed-array processing. Phase II will provide additional towed- and 
hull-array software upgrades. Phase III will upgrade the spherical 
array, and Phase IV will upgrade the high-frequency sonar system on SSN 
688I-class submarines. Each phase installs improved processing and 
control and display workstations. The current installation plan 
completes all SSN's through Phase III by fiscal year 2003.
    Maritime Prepositioning Force (MPF).--Procurement of three 
additional MPF ships, known as MPF enhancement (MPF(E)), will provide 
Marine air-ground task forces (MAGTF's) enhanced capability in naval 
construction, medical support, and expeditionary-airfield construction. 
The first two MPF Enhancement ships, USNS 1st Lt Harry L. Martin and 
USNS LCpl Roy M. Wheat, are expected to be delivered in fiscal year 
1999. A contract award for the third ship is expected in fiscal year 
1998.
    Arleigh Burke (DDG-51)-Class Destroyer.--The DDG 51 class, along 
with its companion class of CG 47 Aegis cruisers, provide sea control 
and battlespace dominance--to include joint force air defense for 
carrier battle groups, surface action groups, amphibious ready groups, 
and joint expeditionary forces. To keep pace with advancing 
technologies and stay ahead of emerging threats, the Navy constructs 
Aegis destroyers in flights, to introduce improvements in combat 
capability in a disciplined, but expeditious process. Twenty-one 
destroyers already are in commission. We expect to build a total of 57 
Arleigh Burke-class destroyers. The Aegis destroyers requested under 
the multiyear procurement plan will incorporate Flight IIA warfighting 
advancements, including improved surface-to-air missiles (SM2 Block IV 
and Evolved Sea Sparrow), embarked helicopters, and the battle force 
tactical trainer. The first Flight IIA destroyer, DDG 79, is presently 
under construction. Future ships will include other essential 
improvements such as the AN/SPY-1D(V) littoral radar upgrade, 
cooperative engagement capability, and theater missile defense 
capability. The Burke-class destroyers will represent the largest 
component of the early 21st century surface-combatant force.
    Aegis Cruiser Modernization and Conversion.--Capitalizing on the 
substantial investment made in our battle-proven Aegis cruisers, the 
Navy will modernize these highly capable ships through a series of mid-
life conversions to install area theater ballistic missile defense, two 
5 inch/62 Mk 45 Mod 4 guns, area air defense commander (AADC) 
capability, and smart ship control systems.
    Naval Fires.--Fire-support requirements for the future are being 
addressed by gun technologies and wedded global positioning systems 
(GPS) that will enable surface ships to engage targets ashore at ranges 
of more than 60 miles. The cornerstone of our near-term effort is the 
extended-range guided munitions (ERGM) and the 5 inch/62 Mk 45 Mod 4 
gun mount program. The ERGM is a five-inch projectile that incorporates 
a rocket motor and internal GPS coupled with an inertial navigation 
system (INS). The 5 inch/62 Mk 45 Mod 4 gun mount is a modified five-
inch gun mount designed to handle, load, and fire the ERGM. Initial 
testing of the ERGM and 5 inch/62 gun components proved successful in 
fiscal year 1997.
    Other promising gun technologies for the longer term include the 
microminiaturization of guidance components and composite material 
technology. Combined, these technologies both will reduce the cost of 
precision-guided gun munitions and extend their range to targets up to 
100 nautical miles away. Research-and-development funding has been 
allocated to develop these capabilities for future application to both 
the ERGM program and a 155 mm advanced naval gun planned for 
installation on the next-generation surface combatant (DD-21).
    The Navy is considering a variety of missiles to meet the ground 
forces requirements for responsive, longer-range naval surface fire 
support (NSFS). Two potential solutions--the Navy tactical missile 
systems (NTACMS), a naval variant of the Army tactical missile system 
(ATACMS), and the land attack standard missile (LASM), a surface-to-
ground variant of the Navy's family of STANDARD Missiles--are being 
evaluated as options to fill the land attack missile role.
    Land Attack Destroyer (DD-21) (First of the 21st Century (SC-21) 
Surface Combatants).--The SC-21 analysis of alternatives (AoA) 
completed examination of future surface combatant mission requirements 
and alternatives for providing those requirements. The AoA found that a 
class of multi-mission ships focused on supporting land attack, and 
possessing hull and mechanical/electrical systems in common with the 
follow on to retiring Aegis cruisers, provided the required 
capabilities at the lowest life-cycle cost.
    Key performance features identified in the AoA and reflected in the 
DD-21 operational requirements document (ORD) include: more vertical 
launch cells dedicated to long-range precision-strike and shorter range 
fast-interdiction missiles; guns capable of firing extended range 
guided munitions; improved survivability against antiship cruise 
missiles, torpedoes, and mines; full-spectrum signature reduction; a 
single, survivable, fiber-optic-based, real-time distributed computing 
environment, using commercial off-the-shelf (COTS) processors and user-
friendly common displays; a fully joint interoperable C\4\ISR system; a 
fuel-efficient propulsion system; and significantly reduced ship 
manning, which lowers operating and support costs. Current acquisition 
plans call for DD-21 to be designed using an integrated industry/Navy 
team. Key production features likely will include: a more affordable 
hull design; COTS-based systems; design features to facilitate rapid 
and cost-effective system upgrades; condition-based maintenance 
monitoring; commercial supportability; and embedded training programs.
    Surge Sealift.--Surge shipping is the immediate transportation of 
heavy military equipment that ground forces need to meet warfighting 
requirements. A total of 19 prepositioning or surge large medium-speed 
(LMSR) roll-on/roll-off (RORO) ships will be required. Fourteen LMSR's 
will be acquired through new construction. Five more have been 
converted from existing container ships. The LMSR's will provide afloat 
prepositioning of an Army heavy brigade's equipment and a corps' combat 
support, as well as surge capability for lift of a heavy division's 
equipment from the United States. The LMSR's can load/offload in 96 
hours, with a total lift capacity of five million square feet--three 
million square feet of surge sealift and two million square feet of 
prepositioning sealift--a significant part of DOD's overall sealift 
capability. Each ship can carry 300,000-400,000 square feet of unit 
equipment at 24 knots over a 12,000 nautical-mile range. The lead ship 
in the class of new construction RORO's, USNS Bob Hope (T-AKR 300), is 
scheduled for delivery in 1998. Delivery is scheduled for all remaining 
ships by the end of fiscal year 2001.
    Mine Warfare.--Mine Warfare is an essential warfare capability 
integral to the ability of naval forces to open and maintain sea lines 
of communication and to dominate the littoral battlespace. An imposing 
array of modern mine-countermeasures (MCM) systems continues to be 
developed and procured to enhance the capabilities of dedicated forces 
and vigorously pursue the transition to an organic MCM capability. The 
Navy's dedicated MCM forces, composed of active and reserve surface MCM 
ships, MHC ships, MCM helicopters, and explosive-ordnance-disposal 
divers are among the best in the world. With the addition of the MCM 
command-and-support ship Inchon (MCS12), the Navy possesses a true 
expeditionary mine countermeasures capability.
    Aggressive development of organic MCM systems for forward-deployed 
carrier battle groups and amphibious ready groups is under way. Focused 
science, technology, and developmental efforts are producing solutions 
to difficult mine-warfare problems. For very shallow water, the 
shallow-water assault breaching system (SABRE) system and the 
Distributed Explosive Technology net system are in development for 
delivery in fiscal year 2001. These complementary systems are designed 
to defeat mines and obstacles in the difficult surf-zone region.
    Contributions from organizations outside the traditional mine-
warfare community are augmenting dedicated and organic MCM 
capabilities. For example, the Oceanographer of the Navy collects and 
disseminates environmental data essential to effective mine 
countermeasures. Mine warfare-relevant emphasis in projects dealing 
with MCM digital-route surveys; maintenance of a global mine-like 
contact database; and development of mine warfare-specific 
environmental databases augment our ability to rapidly assess, avoid, 
or neutralize the sea-mine threat.
    Unmanned Undersea Vehicles (UUV).--The Unmanned Undersea Vehicle 
(UUV) program will extend knowledge and control of the undersea 
battlespace through the employment of clandestine off board sensors. 
Although significant progress is being made with on board sensors, it 
is clearly preferable to have off board sensors to image tethered, 
volume, and bottom mines accurately. Complete knowledge of the mine 
threat, without unduly exposing reconnaissance platforms, is vital to 
exploiting the tactical benefits of maneuver warfare.
    The Near-Term Mine Reconnaissance System (NMRS) is a mine-hunting 
UUV launched and recovered from a SSN 688-class submarine's torpedo 
tube, and provides a first-time capability. The UUV, in combination 
with an SSN, represents a long-endurance, clandestine reconnaissance 
system capable of mapping the undersea environment and providing time-
sensitive information on mining activities to the theater commander. 
The NMRS will provide an effective and much-needed capability to the 
fleet in fiscal year 1998.
    The Long-Term Mine Reconnaissance System (LMRS) will leverage 
developing technologies and lessons learned from the NMRS. The LMRS 
also will be launched and recovered through a submarine's torpedo tube 
and will incorporate enhanced endurance, range, search rate, and total 
search-area coverage.
    Tomahawk.--The Tomahawk cruise missile enables surface combatants 
and submarines to launch attacks against land targets from long ranges 
in all types of weather. The fiscal year 1999 budget includes funds to 
procure 114 remanufactured Tomahawk missiles--15 in the Block III 
configuration, which includes the Global Positioning System, and 99 in 
the Block IV (Phase I) Tomahawk Baseline Improvement Program 
configuration, providing improved terminal guidance and precision 
strike capabilities. Last year, the Department proposed initiating a 
major revision to the Tomahawk program, called the Tactical Tomahawk 
Initiative (TTI). Through design and construction techniques, the TTI 
would provide new-production missiles with enhanced capabilities at a 
lower unit cost than would be possible with remanufactured missiles. 
Although the TTI program has not been incorporated in the fiscal year 
1999 budget, it remains under active consideration and may be initiated 
later this year or as part of the DOD fiscal year 2000 budget.
    Theater Ballistic Missile Defense (TBMD).--Sea-based Navy area and 
theater-wide TBMD systems will provide the United States, allied 
forces, and areas of vital national interest, defense against theater 
ballistic missiles (TBM's). There is a straightforward and compelling 
need to rapidly deploy defenses against TBM's on board naval ships at 
sea. First, the threat from theater-range ballistic missiles is real 
and growing. Second, ships take advantage of the inherent flexibility 
and mobility of being at sea. Ships do not require host nation 
permission or support which is critical to safe entry of our forces 
into overseas ports and airfields. This is increasingly important as 
more of our armed forces are becoming CONUS-based. Third, and equally 
important, the United States has the opportunity to capitalize on its 
significant investment in a fleet of highly capable Aegis cruisers and 
destroyers which deploy routinely to hot spots around the world.
    Navy TBMD programs are founded on an evolutionary development 
strategy which leverages previous investments in the Aegis combat 
system, the standard missile, vertical launching systems (VLS), and 
existing communication systems to counter TBM threats. This builds on 
the solid foundation of Aegis ships, trained crews, and existing 
industrial and logistic infrastructure. A comprehensive review of Navy 
TBMD programs was recently completed, with the aim of developing a plan 
to accelerate the fielding of a credible, forward deployed, sea-based 
TBMD capability. Key interrelated programs that form the pillars of our 
acceleration strategy include: (1) increased procurements to accelerate 
TBMD forward fit and backfit of Aegis DDG's and CG's; (2) phased COTS-
based improvements to the Aegis Combat System leading to a fully 
distributed architecture needed for Navy Theater Wide TBMD; and (3) 
upgrades to battle management and C\4\I necessary to execute TBMD in a 
joint force network centric environment.
    The Navy area TBMD system, which will field a user operational 
evaluation system (UOES) called ``Linebacker,'' on two Aegis cruisers 
in fiscal year 1999, will provide for engagement of TBM's in the 
terminal phase of flight. Aegis ships with the tactical area TBMD 
capability begin delivery in fiscal year 2001. The Navy theater-wide 
TBMD system will build on area system capabilities, adding an ascent 
and mid-course intercept capability that can provide defense for an 
entire theater of operations. Other advantages of ship-based TBMD 
include high survivability, rapid relocation, and self-sustainability. 
Both TBMD programs, as currently designed, are antiballistic missile 
treaty compliant.
    Force Protection Systems.--Confining geography and the 
proliferation of antiship cruise missiles combine to make littoral 
operations particularly challenging. Force protection systems provide a 
layer of protection that enables battle groups to position themselves 
for successful mission execution. Key programs include:
  --Quick Reaction Combat Capability/Ship Self-Defense System is a Navy 
        plan that integrates and automates the detect-control-engage 
        sequence, and provides layered force protection with electronic 
        warfare and hard-kill weapons for ships. More than 20 
        acquisition programs combine to provide a quick-reaction combat 
        capability (QRCC) and integrated command-and-control system. 
        The QRCC system architecture integrates several existing stand-
        alone systems. The ship self-defense system provides 
        multisensor processing, target identification, and an automated 
        detect-control-engage capability. Shipboard sensors are linked 
        to establish accurate, correlated, firm-track criteria as early 
        in the detection phase as possible. Embedded electronic warfare 
        doctrine automates soft-kill and hard-kill weapons for a rapid, 
        layered defensive reaction to any detected threat.
  --The Rapid Antiship Missile Integrated Defense System (RAIDS) 
        complements the antiship-missile defense capabilities of 
        Spruance (DD 963) and Oliver Hazard Perry (FFG 7)-class 
        combatants. RAIDS is in production and has been installed in 
        Spruance (DD 963). Installation in Oliver Hazard Perry-class 
        ships commenced in fiscal year 1997.
  --The Rolling Airframe Missile (RAM) complements existing force 
        protection systems, providing unique capability in adverse 
        electronic countermeasures and advanced-threat environments. 
        RAM is a lightweight, low-cost system that uses existing active 
        and passive ship sensors to augment force protection firepower. 
        RAM, a NATO-cooperative program with Germany, is in production 
        and has been installed in the LHA amphibious assault ships. 
        Installations are ongoing in LHD, LSD 41, and DD 963 class 
        ships, and are planned in CG 47 through CG 73, CV/CVN, DDG 51 
        through DDG 78, and LPD 17 classes.
  --Phalanx Close-In Weapon System (CIWS) provides a fast-reacting 
        final force-protection capability for surface ships against 
        low-flying and steep-diving, high-speed antiship missiles. A 
        high order language computer upgrade increases computer 
        capacity and provides advanced fire-control processing against 
        maneuvering targets. The Phalanx surface mode, which allows 
        engagement of surface craft and low, slow aircraft, will 
        complete testing in fiscal year 1998.
  --The Advanced Integrated Electronic Warfare System (AIEWS) (AN/SLY-
        2) program was accelerated by the CNO on May 14, 1996. AIEWS 
        Increment 1 (advanced electronic support) is scheduled for 
        fleet introduction in fiscal year 2002, and Increment 2 
        (advanced electronic attack) starts subsequent to the Increment 
        1 effort. AIEWS, as the replacement system for the AN/SLQ-32 
        shipboard electronic warfare system, will use open 
        architecture, lowering investment costs and improving system 
        effectiveness. Increment 1 provides improved human-computer 
        interface, increased emitter processing capability, and 
        precision ESM and specific emitter ID (SEI) in a new receiver 
        package. Increment 2 will include an advanced electronic-attack 
        subsystem and off board countermeasures.
  --The Evolved Sea Sparrow Missile (ESSM) is a cooperative effort 
        among 13 nations to improve the ability of the Sea Sparrow 
        missile to counter low-altitude, highly maneuverable antiship 
        cruise missiles. The program takes the existing RIM-7P Sea 
        Sparrow missile and adds a new rocket motor and warhead. The 
        ESSM may be installed on LHD, CVN, and DDG 51 Flight IIA-class 
        ships.
    Common Missile Development/Standard Missile.--The Navy continues to 
build on the proven Standard missile family by adding capabilities to 
counter existing and emerging threats. Two new upgrades are in 
production:
  --The SM-2 Block IIIB, approved for full-rate production in fiscal 
        year 1996, incorporates a dual-mode seeker to provide an 
        improved capability against missile countermeasures. It will be 
        deployed on Aegis vertical launching system (VLS) cruisers and 
        destroyers.
  --The SM-2 Block IV complements earlier SM-2 medium-range variants 
        for Aegis VLS cruisers and destroyers. The newest variant, SM-2 
        Block IVA, builds on the Block IV missile to provide improved 
        defense against cruise missiles and theater ballistic missiles.
    Trident D-5 Missile.--To meet the requirement of the Nuclear 
Posture Review, four Ohio-class submarines currently equipped with the 
Trident I C-4 missile will be upgraded to carry the more capable 
Trident II D-5 missile. In addition, under the conditions of the START 
II treaty, the Navy's Ohio-class submarines will assume a role of 
growing importance within the strategic triad by carrying approximately 
one-half of the allowable strategic nuclear warheads.
    Integrated Undersea Surveillance System (IUSS).--IUSS is comprised 
of fixed, mobile, and deployable acoustic arrays that provide vital 
tactical cueing to ASW forces. The IUSS is a model for innovation and 
smart use of technology. Work stations, enhanced signal processing, and 
modern communication technologies enable remote array monitoring, which 
reduces manpower costs and improves efficiency.
    The Sound Surveillance System (SOSUS) provides deep-water long-
range detection capability. Consolidation of SOSUS by array re-
termination, remoting, or closure was completed in fiscal year 1997. 
Recent closures include Bermuda, Adak, and Keflavik. All other arrays 
will remain operational.
    The Surveillance Towed-Array Sensor System (SURTASS), a prototype 
twin-line array, was tested with outstanding results in a variety of 
locations around the world. SURTASS is far superior to any other 
shallow-water passive towed-array system. SURTASS processing is being 
transferred to the AN/SQQ-89 towed-array sonar system, to provide an 
immediate increase in detection capability without the need to modify 
or procure additional wet-end hardware. The minimum fleet requirement 
of eight SURTASS ships is funded through the FYDP.
    The Fixed Distributed System (FDS) is operational and has 
demonstrated successfully the ability to detect, classify, and track 
quiet submarines. These results validate that acoustic ASW remains 
feasible against advanced-capability nuclear and diesel-electric 
submarines. New fiber-optic technologies, algorithms, and enhanced 
signal processing enable exploitation of weak signals in high 
background noise environments and provide timely and accurate detection 
and track data to tactical assets.
    The Low-Frequency Active (LFA) system has detected submarines at 
long ranges. The first LFA ship, TAGOS 23, is under construction. In 
the interim, a leased ship, Cory Chouest, is being used to test and 
validate LFA technologies. Compact acoustic source technologies are 
also under development and will provide a 50 percent reduction in 
weight and power requirements. Successful maturing of these 
technologies will allow LFA-type arrays to be deployed from existing 
TAGOS 19-class vessels.
    The Advanced Deployable System (ADS) is a theater-deliverable 
acoustic-surveillance system that provides continuous acoustic coverage 
over vast ocean areas for extended periods. This system can detect 
quiet nuclear submarines, diesel-electric submarines operating on 
battery, ships exiting or entering port, or minelaying operations. The 
importance of portability will intensify as our surveillance 
requirements increase because of a greater focus on the littorals and 
the growing popularity of diesel submarines, and the downsizing of our 
own force.
Ground Weapons Programs
    Advanced Amphibious Assault Vehicle (AAAV).--The AAAV gives the 
Marine Corps a weapon system fully capable of implementing ship-to-
objective maneuver (STOM). Currently in the demonstration and 
validation phase, the AAAV will allow rapid, high-speed transportation 
of Marine combat units as they emerge from amphibious assault ships 
located well beyond the visual horizon. It is designed for greater crew 
survivability and maneuverability than the current AAV-7A1, and will 
incorporate a nuclear-biological-chemical protective system. The AAAV 
is targeted for fielding during fiscal year 2006.
    Assault Amphibious Vehicle (AAV) RAM/RS.--A portion [64 percent] of 
the AAV fleet will undergo a reliability, availability, and 
maintainability (RAM) upgrade, and a rebuild to standard (RS) retrofit, 
to ensure Marine AAV's remain maintainable until the arrival of the 
AAAV. The RAM/RS program will incorporate a Bradley suspension and 
engine, and a new transmission. The projected savings of RAM/RS 
compared to the current inspect and repair only as necessary [IROAN] 
program--is $400 to $500 million.
    Lightweight 155 mm Towed Howitzer (LW155).--The LW155 155 mm towed 
howitzer will be a rugged, efficient weapon system. It will replace the 
aging M198 155 mm towed howitzer as the only artillery system in the 
Marine Corps inventory. The LW155 is designed for expeditionary 
operations requiring light, highly mobile artillery, and for transport 
by the MV-22 Osprey aircraft. The howitzer's lighter weight (9,000 
pounds versus 16,000 pounds for the current towed howitzer, the M198) 
and automated breech, rammer, and digital fire control computer will 
provide the MAGTF commander greater operational flexibility, while 
increasing the responsiveness and efficiency of artillery units. The 
program is in the engineering and manufacturing development (EMD) phase 
of the DOD systems-acquisition process. Initial operational capability 
is planned for fiscal year 2002.
    Medium Tactical Vehicle Replacement (MTVR).--The Marine Corps MTVR 
will provide the backbone of future Marine Corps wheeled combat support 
and combat service support. The MTVR will be a quantum improvement over 
existing trucks, incorporating an electronically controlled engine and 
transmission, central tire-inflation system, antilock brakes, and a 22-
year corrosion control package. Payload capacity will increase from 5 
tons to 7 tons off-road and to 15 tons on-road. The MTVR program is in 
the engineering and manufacturing development phase of the DOD systems-
acquisition process. Initial operational capability is expected in 
fiscal year 2000.
    Third Echelon Test Set (TETS) AN/USM-657.--The Marine Corps faces 
unprecedented challenges in maintaining the current inventory of aging 
electronic ground weapon systems while simultaneously fielding new 
sophisticated systems. The Marine Corps has adopted the TETS to satisfy 
this requirement. TETS is a diagnostic-testing and fault-isolation 
system for communication-electronic and ground-weapon systems. This 
portable test set can be mounted on the tailgate of a high-mobility, 
multipurpose wheeled vehicle (HMMWV) or housed within maintenance 
shelters. Contract for the TETS was awarded in fiscal year 1997 and 
fielding will begin in fiscal year 1999.
    Javelin.--Javelin, a joint Marine Corps and Army program, is a 
soft-launch, medium-range, fire-and-forget anti-armor weapon system. 
Capable of being fired from enclosed structures, the Javelin offers 
greater protection for the gunner and greater lethality against armor 
targets at medium ranges than previous anti-armor weapons. The Javelin 
consists of a reusable command launcher unit, which can be employed as 
a stand-alone thermal sight, and a missile. Initial fielding is planned 
for fiscal year 1999.
    Predator.--Predator, a short-range assault weapon (SRAW), is a 
Marine Corps anti-armor program with fielding scheduled to begin in 
fiscal year 2001. It will fulfill the Marine Corps' requirement for a 
lightweight, man-portable, disposable, short-range weapon. The missile 
has a soft-launch rocket motor for firing from enclosed spaces, and the 
flyover, shoot-down profile facilitates warhead penetration into the 
vulnerable top of the target.
Aviation Weapons Programs
    F/A-18E/F Super Hornet.--The F/A-18 Hornet is the cornerstone of 
naval aviation strike warfare. The newest and most capable naval 
aircraft, the F/A-18E/F Super Hornet, combines the outstanding 
characteristics of earlier F/A-18 models with cutting edge technology 
resulting in an affordable aircraft with significantly improved 
performance and endurance. F/A-18E/F is designed to execute the 
missions and meet the threats through 2015, with greater range and 
payload flexibility, an ability to return to the carrier with more 
unexpended ordnance capability, room for avionics growth, and enhanced 
survivability features. It will increase the capability for naval 
aviation to conduct night strike warfare, close air support of ground 
forces, fighter escort, air interdiction, and fleet air defense. The 
Super Hornet is in the flight test phase of engineering and 
manufacturing development, and has amassed over 2,100 flight hours. 
Initial sea trials were completed in January 1997. Approval for the 
low-rate initial-production (LRIP) of 62 aircraft was received last 
year. Procurement of LRIP aircraft will begin the orderly transition 
from the Navy's F/A-18C and F-14A aircraft to this improved strike-
fighter. The Super Hornet will comprise most of the carrier-based 
strike-fighter assets by 2008.
    MV-22 Osprey.--The MV-22 Osprey is a tilt-rotor, vertical-take-off-
and-landing aircraft designed to replace the Marine Corps' CH-46E and 
CH-53D helicopters. The Osprey has accrued more than 1,000 flight 
hours, and has entered the developmental and operational test phase. 
Its performance has been impressive, and its test envelope continues to 
expand. Increased reliability and maintainability were part of the MV-
22 initial design process. All aspects of the MV-22 have been tested 
for human factors such as adequate access, reduction of MV-22 unique 
tools, and use of on board monitoring systems that determine when 
components need replacement. Its construction incorporates many 
features that enhance its combat survivability, including composite 
structural components that provide increased ballistic tolerance, 
triple redundant digital fly-by-wire flight controls, and a cabin 
overpressurization system that provides chemical and biological 
protection for crew and embarked troops. Aircraft deliveries are 
scheduled to begin in fiscal year 1999.
    AV-8B Remanufacture.--The AV-8B remanufacturing program continues 
on track. Refurbished aircraft with better engines, COTS technology, 
and improved avionics have been joining the fleet since 1996. These 
aircraft will effectively conduct the close air support mission until 
the arrival of the Joint Strike Fighter. The Marine Corps now has three 
variants of the AV-8B Harrier in service: the day attack, night attack, 
and radar/night attack aircraft. The night attack Harrier improves on 
the original AV-8B design by incorporating an improved navigation 
system with a forward-looking infrared sensor, a moving map display, 
and night-vision-goggle compatibility. The radar/night attack Harrier 
(Harrier II+) incorporates these improvements and the AN/APG-65 
multimedia radar. The fusion of night and radar capabilities makes the 
Harrier responsive to the Marine air-ground task force requirements for 
expeditionary, night-and-adverse-weather, offensive air support.
    F-14 Update.--The F-14 Tomcat is now being configured as a potent 
precision-strike fighter. Incorporation of the low altitude navigation 
and targeting infrared for night (LANTIRN) system gives the Tomcat an 
accurate autonomous designation and targeting capability for delivery 
of laser-guided bombs. Beginning in 1997, all forward-deployed carrier 
air wings had LANTIRN capability. In addition to LANTIRN, two major 
flight-safety improvements for the Tomcat also are under way. The 
digital flight control system (DFCS) has demonstrated significant 
improvements in departure resistance/spin recovery and improved flying 
qualities during shipboard recovery. Installation of the DFCS will 
begin in June 1998. The TF30 engine breather-pressure modification 
consists of an engine sensor that detects an abnormal condition to 
allow the pilot time to take action to prevent engine failure. With 
these warfighting and safety improvements, the F-14 Tomcat will give 
battle group commanders a proven warfighting aircraft with added 
flexibility for attack missions until the F/A-18E/F enters the fleet.
    EA-6B Prowler Block 89A Upgrade.--The EA-6B Prowler is the sole 
provider of airborne electronic warfare jamming support to the 
Department of the Navy, and recently was designated a national asset. 
The Block 89A upgrade program addresses structural and supportability 
problems associated with the aging aircraft fleet. Numerous avionics 
improvements for safety of flight and joint operability--including the 
ICAP-III program update--are included.
    Navy Helicopter Master Plan.--The Navy's Helicopter Master Plan 
reduces the Navy's types of helicopters from eight to two, reducing 
manpower and logistics-support costs. The Navy is procuring a U.S. Army 
UH-60L Blackhawk derivative, the CH-60, to replace current logistics 
and combat helicopters. The Navy's current inventory of SH-60B/SH-60F/
HH-60H helicopters will be remanufactured into a single multimission 
helicopter, the SH-60R.
    AH-1W Super Cobra/UH-1N Huey.--A commonality upgrade titled the H-1 
Upgrades Program (4BN/4BW) replaces the current two-bladed rotor system 
on the AH-1W and UH-1N aircraft with a four-bladed, all-composite rotor 
system, and also adds a performance-matched transmission, drive system, 
and upgraded landing gear. The 4BW also will incorporate a new, fully 
integrated cockpit and six weapons stations. The 4BN maximizes 
commonality and supportability with the 4BW and returns the required 
aircraft power margin, while providing adequate mission-payload and 
warfighting-capability growth potential. The upgrade program will 
reduce life-cycle costs, significantly improve operational 
capabilities, resolve existing safety deficiencies, and extend the 
service life of both aircraft.
    CH-53D/E Sea Stallion.--The CH-53D Sea Stallion is used to 
transport personnel, equipment, and supplies during expeditionary 
operations ashore. Operational safety improvement programs, including 
the global positioning system, improved radios, and night-vision goggle 
heads-up display, will ensure that the aircraft remains capable until 
retirement. In addition to the funded operational-safety-improvement 
programs of the CH-53D, the CH-53E Super Stallion will be provided a 
service-life extension program that extends the Super Stallion's 
service life past 2025 and will include a forward-looking infrared 
system.
    Joint Strike Fighter (JSF).--The joint strike fighter program will 
develop and field a tri-service family of next-generation strike 
aircraft, with an emphasis on affordability. The family-of-aircraft 
concept allows a high degree of commonality, while still satisfying 
unique service needs. For the Navy, the JSF will provide a multirole 
stealthy strike fighter, to complement the F/A-18E/F. For the Marine 
Corps, the JSF will replace both the AV-8B and the F/A-18A/C/D, 
completing the Marine Corps' neck-down strategy of an all short-take-
off- and vertical-landing fixed-wing force. Using cost as an 
independent variable, a primary objective of the JSF program is the 
reduction of costs associated with development, production, and 
ownership.
    In November 1996, designs from two contractors were selected to 
compete in the JSF concept demonstration phase. This phase features 
flying concept demonstrators (X-32 and X-35), concept-unique ground and 
flight demonstrations, and continued refinement of the contractor's 
preferred weapon systems concepts. Transition to engineering and 
manufacturing development begins in 2001. Significant savings are 
anticipated from the joint approach to development. The United 
Kingdom's participation as a collaborative partner in the concept 
demonstration phase provides additional savings. Denmark, Norway and 
the Netherlands are associate partners in the program. Participation by 
other allied countries is anticipated.
    Air-to-Ground Weapon Programs.--The most significant joint air-to-
ground weapon development programs are the joint standoff weapon 
(JSOW), joint direct attack munitions (JDAM), and standoff land attack 
missile expanded response (SLAM-ER). JSOW is a family of air-to-ground 
glide weapons, designed to attack targets from beyond enemy point 
defenses. JSOW is a Navy-led program and will be effective against many 
targets during day, night, and adverse weather conditions. It will 
replace a variety of weapons in the current inventory. JDAM is an Air 
Force-led program to develop an all-weather capability for general-
purpose bombs through the use of strap-on global positioning system 
(GPS) guidance kits. SLAM-ER meets the Navy's requirement for a 
standoff outside area defense (SOAD) weapon. SLAM-ER is an adverse 
weather, precision-guided weapon that simplifies mission planning, 
increases penetration, and nearly doubles the range of the original 
SLAM. The SLAM-ER+ will add autonomous capability and automatic target 
acquisition (ATA) to the SLAM-ER. The Navy also is planning to increase 
the inventory of laser-guided bombs through the Skipper conversion 
program.
    Area Air Defense Commander Capability (AADC).--The area air defense 
commander requires an advanced planning and execution capability that 
integrates force planning and tactical operations functions. The Navy 
envisions the AADC embarked in an Aegis cruiser supported by a joint 
staff of 40 personnel or less. AADC systems are planned for 
installation on 12 Aegis cruisers, with 2 additional systems designated 
for training. A prototype system will be installed on an Aegis cruiser 
in fiscal year 1999 in conjunction with Navy area theater missile 
defense development. The cruiser conversion plan calls for an initial 
operational capability in fiscal year 2003, with full operational 
capability for 12 cruisers in fiscal year 2006.
    Air-to-Air Weapon Programs.--The AIM-9X Sidewinder and the AIM-120 
advanced medium range air-to-air missile (AMRAAM) continue to be the 
foremost joint air-to-air-weapon programs of the Navy and Marine Corps. 
The Navy-led AIM-9X program upgrades the current missile with an 
advanced guidance-control section, a highly maneuverable airframe, and 
signal processors that significantly upgrade its infrared counter-
countermeasures capabilities. The Air Force-led preplanned product 
improvements to the currently deployed AIM-120 weapon include enhanced 
electronic counter-countermeasures and improved kinematics. The AIM-9X 
and AMRAAM missiles will serve Navy, Marine Corps, and Air Force 
aircraft well into the future.
    Unmanned Aerial Vehicles (UAV's).--Naval forces are employing the 
Pioneer UAV system in support of a broad array of expeditionary 
operations, such as reconnaissance and intelligence support in Bosnia. 
Outrider is Pioneer's potential replacement as the naval tactical UAV. 
Outrider is in the advanced concept technical demonstration phase of 
development. A new tactical control system will enable broad UAV 
interoperability and connectivity to the naval command, control, 
computers, communications, and intelligence (C\4\I) architecture.
    Advanced Tactical Airborne Reconnaissance System (ATARS).--ATARS is 
the only manned tactical-reconnaissance system for naval combat 
aircraft presently under development, and will greatly increase the 
timely dissemination of imagery-intelligence information to theater, 
operational, and tactical commanders. The system's digital data-link 
capability will allow all levels of command to receive time-sensitive 
imagery simultaneously, enabling accurate intelligence preparation of 
the battlefield and pre-strike planning and post-strike analysis. ATARS 
is a suite of sensors and data-link pods that will be installed in the 
F/A-18D and associated ground stations. When fully operational in 
fiscal year 1999, ATARS will be joint-data-link capable and will 
provide support to all services. It will provide high-resolution, near-
real-time digital imagery, day and night, in all-weather conditions 
through infrared, electro-optical and synthetic-aperture radar sensors. 
The imagery will be digitally linked via the joint services imagery 
processing system (JSIPS) and tactical exploitation groups.
Information-Superiority Programs
    Navy-Marine Corps C\4\ISR.--The Joint Vision C\4\I For The Warrior 
(C\4\IFTW) challenged the services to develop ``a global C\4\I system 
that satisfies the total information requirements of warriors when they 
fight as a team with a common mission.'' For the Navy and Marine Corps, 
the challenge of C\4\IFTW became a key element in the development of 
our Naval vision for the future, known as COPERNICUS. This common 
vision enables the Navy and Marine Corps to adapt, evolve, and fully 
integrate their command and control, communications, computers, 
intelligence, surveillance and reconnaissance (C\4\ISR) capabilities to 
conduct joint naval expeditionary force operations in the 21st century.
    COPERNICUS is the unifying vision to ensure C\4\ISR systems respond 
to the warfighter, are fielded quickly, capitalize on technological 
advances, and support warfighting concepts. COPERNICUS enables Navy 
C\4\ISR development and implementation, such as the Global Command and 
Control System (GCCS), Global Command Support System, Defense 
Information Systems Network, and the Marine Air-Ground Task Force C\4\I 
(MAGTF C\4\I).
    The joint maritime communications system (JMCOMS) and Information 
Technology 21 (IT-21) are two implementation strategies which will 
leverage commercial technologies to achieve the COPERNICUS vision. 
JMCOMS will improve communication bandwidth utilization whereas IT-21 
will install an integrated communications suite at shore sites and on 
ships at sea.
    The following are programs being implemented under the JMCOMS and/
or IT-21 strategy;
  --Automated Data Network System (ADNS) is a secure, interoperable, 
        multimedia intelligent network management system for data 
        transfer. The development of ADNS is based on commercial and 
        government off-the-shelf hardware and software. ADNS is 
        currently fielded on 25 surface ships and submarines and will 
        be installed on all ships and submarines by the end of fiscal 
        year 2003.
  --Global Broadcast Service (GBS) is a revolutionary advancement in 
        joint communications, providing high-speed one-way broadcast 
        video and data service. GBS becomes operational in February 
        1998, with the launch of the UFO-8 satellite.
  --Challenge Athena is a program to lease commercial communications 
        satellites and facilities to provide wideband connectivity, 
        including intelligence imagery, to ships at sea.
  --Joint Maritime Command Information System (JMCIS) is the Navy's 
        designated command-and-control (C\2\) system for the future 
        global command-and-control system (GCCS). JMCIS follows an 
        evolutionary acquisition process to meet emerging fleet 
        requirements. This system supports C\2\ and tactical 
        intelligence warfighting requirements for afloat, ashore, and 
        tactical/mobile units. JMCIS provides timely, accurate, and 
        complete all-source C\4\ISR information management and develops 
        a common operational picture for warfare mission assessment, 
        planning, and execution. JMCIS incorporates the Marine air-
        ground task force (MAGTF) command, control, communication, 
        computer, and intelligence (C\4\I) software. The next version 
        of the system software will be defense information 
        infrastructure common-operating-environment (DII COE) compliant 
        and will finalize naval implementation of GCCS, known as GCCS-
        Maritime (GCCS-M). GCCS-M will avoid the year 2000 problem, 
        greatly improve network centric warfare, and be integral to 
        information technology for the 21st century.
  --Navy Tactical Command Support System (NTCSS) is the afloat system 
        that brings existing logistical support systems into a single 
        communications database. This effort mirrors the strategy 
        utilized by afloat tactical systems. NTCSS provides the afloat 
        commander key maintenance, supply, medical, and administrative 
        information through the shipboard non-tactical automated 
        program (SNAP), the naval aviation logistics command management 
        system (NALCOMIS), and the maintenance resource management 
        system (MRMS). This NTCSS information will be used to complete 
        the tactical picture for the commander. NTCSS systems are 
        currently interoperable with worldwide logistics systems 
        inventory control and stock points. Standard data elements 
        exist through the use of standard military requisition format, 
        national stock numbers, and other common Department of Defense 
        data elements. The NTCSS initiative is vital to the rapid 
        improvement of afloat logistics systems. By the end of 1997, 65 
        percent of the NTCSS shipboard installations will be complete, 
        providing the fleet with a wide-area networked-based logistics 
        system.
    COPERNICUS.--As stated earlier, COPERNICUS is the vision of 
complete integration of C\4\ISR systems in support of the warfighter. 
It provides the technical infrastructure that enables the sensor-to-
shooter process. This system links targeting information provided by 
the sensor directly to the shooter. Some programs key to supporting the 
COPERNICUS vision for seamless connectivity of an operational picture 
are provided below:
  --Global Command-And-Control System (GCCS) is the over-arching 
        command-and-control system for the armed services. It is the 
        single most important initiative in the joint C\2\ arena today, 
        forming the backbone of the C\4\I for the warrior concept. 
        Since achieving initial operating capability, GCCS has expanded 
        beyond its initial force deployment, planning, and execution 
        capability with applications across all functional areas of 
        command-and-control. In fiscal year 1998, existing GCCS 
        functions will become defense information infrastructure (DII) 
        common operating environment (COE) compliant. Future upgrades 
        will include intelligence, meteorological and imagery 
        information on a common operational picture (COP), as well as 
        better crisis action tools.
  --Mobile Satellite Services (MSS) are leased commercial systems that 
        allow mobile users access to specifically tailored and wider-
        band, low-earth-orbit satellite services.
  --AN/PSC-5 Enhanced Manpack UHF Terminal (EMUT) is a lightweight, 
        demand-assigned multiple access (DAMA), portable, line-of-sight 
        and tactical-satellite-communications terminal that will serve 
        as a primary command-and-control single-channel radio for 
        MAGTF's. Employed at battalion level and higher, this radio 
        provides increased range and reliability. EMUT will be used to 
        transmit intelligence traffic, to interface with SINCGARS 
        waveforms, and to transmit/receive command-and-control traffic. 
        Initial operational capability will be in early fiscal year 
        1998.
  --Enhanced Position Location Report System (EPLRS) provides MAGTF 
        C\4\I users a dedicated data communications network and also 
        serves as the primary source for automated friendly position-
        location information (PLI) and navigation information. EPLRS is 
        a computer-based, time-ordered, spread-spectrum radio system, 
        operating in the Ultra-High Frequency (UHF) band. Integral 
        error detection and correction, cryptographic security, and 
        frequency hopping features provide resistance to electronic 
        countermeasures (ECM). EPLRS data communications capability 
        will be used by the tactical data network (TDN), tactical 
        combat operations (TCO) system, advanced field artillery 
        tactical data system (AFATDS), and the digital automated 
        communications terminal (DACT) to improve data distribution 
        below the regimental level. In addition to position location/
        reporting features, EPLRS provides the capability to transmit/
        receive data. EPLRS will be used for data transmission at the 
        regimental level and below.
    Cooperative Engagement Capability (CEC).--The increasingly complex 
threats in the air-defense arena make it necessary to link 
geographically dispersed sensors, of differing capabilities, with all 
potential firing platforms. CEC uses sensor netting to make this 
possible. With CEC, it appears to each shooter's combat system as if 
every asset in the data link is that unit's own sensor. Engagements 
using remotely provided track data are possible for the first time. In 
addition, the ability to develop composite tracks means that every 
participating unit has an identical, real-time picture of the battle 
space, including identification information. With the addition of the 
airborne element of CEC in the E-2C Hawkeye, the reach of CEC will be 
dramatically increased. It will greatly enhance our ability to conduct 
overland engagement of cruise missiles, as well. In August 1997, CEC 
successfully passed initial operational test and evaluation. During the 
all-service combat identification evaluation team (ASCIET) 97 exercise, 
CEC's contribution to the establishment of a single integrated air 
picture was showcased in the successful integration of Cape St. George 
(CG 71) and a shore-based Marine Corps TPS-59(V)3 radar. Further CEC 
demonstrations included a Marine Corps HMMWV-launched missile that 
received its initial target data from the cruiser's radar. Currently, 
Army and Air Force are each continuing studies aimed at determining 
potential application of CEC to their service-unique systems.
    To take advantage of the benefits of CEC, the Marine Corps has 
developed a prototype CEC lab to evaluate the integration potential of 
CEC. The focus of the lab is to fuse real-time attributes of CEC with 
the battle management information afforded by such non-real-time 
systems as Link-11 or Link-16. The CEC lab takes advantage of 
commercial-off-the-shelf (COTS) equipment, Internet protocol, and 
capitalizes on commercial technology to distribute the air picture to 
the operator. Future demonstrations of the Marine Corps land-based CEC 
lab and node include the Atlantic Command's theater missile defense 
initiative (TMDI) exercise in the spring of 1998. The Marine Corps also 
will continue support for the Navy's operational evaluation of CEC.
    Marine Corps Aviation C\4\I Improvements.--Quantum improvements 
continue in systems that support the aviation combat element of the 
MAGTF. Phase one's initial operational capability of the advanced 
tactical air command central (ATACC) occurred in fiscal year 1996, and 
is the integrating link between the aviation element command and 
control (C\2\) and the MAGTF's C\2\. The ATACC provides planners and 
operators with the automated assistance needed to supervise, 
coordinate, and direct the execution and planning of all MAGTF tactical 
operations. Also operational this year is the improved direct air 
support central (IDASC) product improvement program (PIP) and the 
tactical air operations center (TAOC). The ATACC provides great 
enhancements to interoperability with the Navy's joint maritime command 
information system and the Air Force's contingency theater automated 
planning system.
    Marine Corps Fire Support C\4\ Improvements.--The fire support 
command-and-control system (FSC\2\S) is an interim system for providing 
semi-automated tactical fire support and technical artillery fire-
control for MAGTF operations. The follow-on advanced field artillery 
tactical data system (AFATDS), which will automate fire-support 
command-and-control, will commence fielding of 51 systems in fiscal 
year 1999. The approved acquisition objective (AAO) is 677 units 
through fiscal year 2002.
  --The target location, designation, and hand-off system (TLDHS) is a 
        man-portable tool for fire-support observers and controllers to 
        locate targets with GPS accuracy, designate them with a coded 
        laser as appropriate, and pass them to the appropriate fire 
        support system for resolution. This is a key enabling 
        capability that will maximize the effectiveness of supporting 
        fires, accommodating laser-seeking precision-guided munitions. 
        The TLDH will provide the interface with the AFATDS and with 
        digital delivery systems on board aircraft, and will use 
        existing and planned communications assets for message 
        transmission and receipt. The TLDS is scheduled for initial 
        fielding in late fiscal year 2000.
Information Warfare (IW)
    The gathering and dissemination of information has emerged as 
perhaps the most rapidly evolving, technology-based area of all the 
Warfare disciplines. Its effective implementation will be critical to 
securing the battle space that allows the other warfare commanders to 
perform their missions. In both platform-centric and network-centric 
warfare, IW remains a critical warfare element by itself, and a central 
supporting element to the other warfare commanders. The availability of 
advanced communication technologies in world markets increases the 
likelihood that they will be employed by potential adversaries in 
advanced automated command-and-control systems and as components of 
advanced weapons systems. The adversarial use of these technologies and 
capabilities provides a clear challenge that must be countered.
    COPERNICUS enhances the ability of Naval personnel to successfully 
conduct information operations (IO) and employ information warfare 
(IW). In an age of dynamically evolving command-and-control technology, 
the Navy has found that fleet needs cannot always follow the extended, 
formal requirements and procurement process. In response, the Navy has 
leveraged the dynamic operational interface of the fleet information 
warfare center (FIWC) with the technical expertise provided by the 
Naval information warfare activity (NIWA) to develop advanced 
technology systems to meet rapidly emerging needs. FIWC and NIWA form a 
team uniquely able to recognize, define, build, and deploy equipment to 
meet rapidly evolving IW needs.
    FIWC and NIWA also have been instrumental in expanding 
communications electronic attack capabilities within the Navy. Two 
initiatives include the advanced support pod (an airborne 
communications jamming pod) and the surface communications jamming 
capability (SCJC).
  --FIWC's Naval Computer Incidence Response Team (NAVCIRT) serves as 
        the Navy's single point of contact for reporting, identifying, 
        assessing, and recovering from computer attacks and viruses. A 
        dramatic increase in the number of computer intrusions, probes, 
        viruses, and denial of service complaints were reported in 
        1997. To combat these attacks, the number of operational 
        intrusion detection sensors under FIWC's analytical control 
        were doubled. Similarly, FIWC conducted nearly 100 computer 
        network vulnerability assessments, more than doubling the 
        fiscal year 1996 total. A recent at-sea exercise included FIWC 
        as an opposing force intent on disrupting information networks.
    The Surface Cryptologic Systems program is modernizing shipboard 
information warfare to operate in the modern threat environment. Ships 
with Outboard, combat direction finding (Combat DF), and ship's signals 
exploitation equipment (SSEE) will provide that capability in the near 
term, and future ships will incorporate highly automated, open 
architecture, modular IW systems to maintain this dominance.
    Information Warfare (IW) Education and Training.--Education and 
training are critical to IW awareness and the Navy is the lead service 
for formalizing IW training. IW education and training is conducted at 
the Naval Telecommunications Training Center, at the Fleet IW Center, 
and at the Naval Postgraduate School.
Navy/Marine Corps Intelligence Systems
    Joint Deployable Intelligence Support System (JDISS).--JDISS 
provides common intelligence, communications, and office automation 
applications for U.S., NATO, and coalition operations. JDISS provides a 
responsive, secure information network between intelligence centers and 
operational commanders, including access to national databases.
    Battle Group Passive Horizon Extension System (BGPHES) is a ship-
based system for the remote operation of airborne signals intelligence 
collection systems and control of local receivers on board the host 
ship. It extends the signal collection range up to 700 miles depending 
upon the altitude of the aircraft. BGPHES completed its first 
operational deployment aboard John F. Kennedy in 1997, operating with 
Navy ES-3A aircraft and Air Force U-2's.
    Common High Bandwidth Data Link (CHBDL).--A wideband data-link for 
the transfer of signal and imagery intelligence data from 
reconnaissance aircraft to shipboard processing systems is a reality. 
CHBDL is the Navy's implementation of DOD's joint common data link 
(CDL) standard. It will initially be used with the battle group passive 
horizon extension system (BGPHES) for tactical SIGINT and the joint 
service imagery processing system-navy (JSIP-N) for tactical imagery. 
This point-to-point duplex link gives real-time control of airborne 
sensors with direct downlink of collected data to afloat commanders.
    CHBDL completed a successful first deployment with the John F. 
Kennedy (CV 67) battle group in 1997. CHBDL is programmed for 
installation on board all aircraft carriers, large-deck amphibious 
ships, and fleet flagships.
    Marine Corps Intelligence Programs.--The Marine Corps' research, 
development, and acquisition of tactical intelligence systems continue 
to improve intelligence support to MAGTF commanders. Upgrades to 
tactical intelligence capabilities are being addressed through programs 
within the joint military intelligence program (JMIP) and tactical 
intelligence and related activities (TIARA).
    Improvements to imagery intelligence capabilities are being 
accomplished through the joint services imagery processing system 
(JSIPS) national-input segment, which provides deployed Marine forces 
with national imagery support. Beginning in fiscal year 1998, each 
Marine expeditionary force will receive a tactical exploitation group 
to receive, process, and disseminate imagery from F/A-18D ATARS-
equipped aircraft, and other theater and national collectors. Marine 
Corps signals intelligence (SIGINT) improvements include the radio 
reconnaissance equipment program SIGINT suite-1, the technical control 
and analysis center (TCAC), the team portable communication 
intelligence system (TPCS), and the testing of improvements to the 
mobile electronic warfare support system (MEWSS). Additionally, the 
Marine Corps participates in the ongoing, congressionally-mandated 
tactical exploitation of national capabilities (TENCAP) program, 
designed to exploit national overhead reconnaissance systems and 
explore emerging technologies. Other program initiatives to enhance 
Marine Corps intelligence capabilities include:
  --Intelligence Analysis System (IAS) provides the backbone for 
        tactical intelligence fusion in support of the Marine 
        expeditionary force (MEF) command element down to the squadron. 
        The MEF IAS configuration is a mobile system with multiple 
        analyst workstations in a client-server LAN. Lower echelon 
        configurations can range from individual to multiple 
        workstations. IAS is capable of communication with other 
        intelligence systems at the national, theater, and tactical 
        levels.
  --Manpack Secondary Imagery Dissemination System (SIDS) enables the 
        MAGTF commander to collect, store, display, manipulate, and 
        transmit digital reconnaissance imagery in near-real-time. SIDS 
        consists of digital cameras and palmtop processors, which allow 
        reconnaissance units to take pictures and immediately transmit 
        them back to a base station for exploitation and dissemination. 
        SIDS is programmed to be fully operational by fiscal year 1998.
  --Counterintelligence and Human Intelligence Equipment Program 
        (CIHEP) provides equipment to conduct controlled, 
        surreptitious, and tactical intelligence gathering operations 
        that directly support antiterrorism and force protection. CIHEP 
        integrates audio, video, photo, communications, and automated 
        data processing to report and disseminate counterintelligence 
        information.
Non-Lethal Weapons
    The DOD-wide nonlethal weapons (NLW) program, directed by the 
Commandant of the Marine Corps as executive agent, encompasses a broad 
range of nonlethal technologies. These systems, which include 14 
multiservice projects currently receiving joint research-and-
development funds, provide the field commander more options for 
response to contingencies, especially those dealing with military 
operations other than war. Although Marine expeditionary units 
currently have NLW-capability sets and deployed U.S. Army units have 
been trained in some basic (40 mm and 12 gauge) NLW munitions, these 
items provide only a modest nonlethal capability. They do, however, 
provide the ground commander an ability to disperse or discourage 
crowds and seize or temporarily incapacitate individuals. Ongoing NLW 
projects range from stingball munitions to acoustics and other 
directed-energy systems. The fielding of these systems is planned over 
the next 7-10 years, with the more basic munitions expected to be in 
the inventory by the year 2000.
            conclusion: charting a course for future success
    In the ``. . . From the Sea'' revolution, the Department of the 
Navy has begun to lay out its transformation strategy and to chart a 
course into the 21st century. Our challenge is clear: to be the best 
Navy-Marine Corps team in the world today, tomorrow, and in the decades 
to come. We are moving aggressively to meet that challenge on all 
fronts.
    We recognize that forward, balanced, flexible naval forces will be 
a key part of implementing our national security strategy of 
engagement, and that they will play a unique role in shaping a stable 
and prosperous future. Accordingly, we must sustain our current 
operational primacy in a rapidly evolving strategic landscape. We have 
already laid the foundation for our future primacy, but know that we 
must go much further. We must explore still more ways of serving our 
nation's changing needs and we must expand the revolution in naval 
affairs that has already begun.
    We recognize, too, that new concepts, in themselves, are not 
enough. We will transform our forces with the technologies of a new 
age, and make rapid technological change our ally. That will mean 
streamlining--revolutionizing--the way we do business. We will balance 
carefully our investments in people, readiness, technology, force 
structure, and modernization, to ensure that our people have the tools 
they need, when they need them.
    Finally, we recognize that our success ultimately depends on 
dedicated, innovative personnel. Our naval forces are blessed with the 
world's finest Sailors and Marines. They are our ``secret weapon.'' We 
will nurture that core intellectual capital of our revolution and 
encourage the new thinking that will keep our Navy and Marine Corps 
team great.
    The future of our Naval Service is bright. We will meet the 
challenges of a new world, and we will thrive on them. We will ensure 
that this nation has a decisive impact from the sea, today and 
tomorrow--anytime and anywhere.

                   opening remarks of admiral johnson

    Senator Stevens. Admiral Johnson.
    Admiral Johnson. Thank you, Mr. Chairman, good morning, 
Senator Inouye and members of the committee. I will be very 
brief.
    I would start just by saying that I share the Secretary's 
enthusiasm for the Navy and Marine Corps team, I am intensely 
proud of our great Navy. I think we have had a very good year, 
we intend to have another one. The trend is in the right 
direction.
    We are on station, where we belong, ready to execute the 
full spectrum of tasking that may be laid upon us. I would 
characterize it as an even strain out forward, and I talk to 
them almost daily, and they are very much ready in every 
respect.
    As to the budget, I would characterize it as a good 
balanced budget. It does reflect the work we did in the 
``Quadrennial Defense Review,'' it does reshape the Navy to 
what I would call a leaner but more capable force, which allows 
us to then reinvest and focus our investments, if you will, on 
operation and maintenance, manpower, and procurement accounts, 
so that we will not have to, hopefully, come back next year for 
the kind of reprogramming we are just discussing now.
    I believe it to be a very good budget, and like the 
Secretary and the Commandant, I am very, very grateful 
personally and professionally for the support that we get from 
this body, and I am ready for your questions, sir.
    Senator Stevens. General Krulak.

                   opening remarks of general krulak

    General Krulak. Yes, sir; you have my testimony, so I will 
be very brief.
    First, like Admiral Johnson and the Secretary, I want to 
thank you very much for what this committee has done for my 
individual marines. There are a lot of big-ticket items that 
are important to me, but nothing is more important than that 
individual marine, and a lot of what you have done has made his 
life a lot better.
    There are 24,497 of those marines forward deployed right 
now, as we speak, as we sit here, almost 24,500, away from 
their families for 6 months to 1 year, and I just wanted you to 
know that they are doing a hell of a job.
    Third, sir, I hope that you are wearing that nice dark 
green uniform for me--as a marine. Just kidding, sir. 
[Laughter.]
    I thought that you were wearing that for me, sir. I am 
ready for your questions.
    [The statement follows:]

              Prepared Statement of Gen. Charles C. Krulak

    There is a direct and undeniable link between our strong 
and virile economy and the stability of the world in which we 
trade. The Quadrennial Defense Review, mandated by Congress, 
validated the unique effectiveness of naval forces in 
contributing to crisis prevention and crisis resolution--to 
promoting that stable world. The National Defense Panel 
provided an independent assessment. Once again naval forces, 
with our ability to stand off a potential hotspot for 
indefinite periods of time--with no issues of sovereignty, no 
issues of basing rights and with no host nation support 
agreements required of any kind--was validated as one of our 
nation's most useful tools for maintaining world stability. Our 
``Presence''--the presence of United States Marines forward 
deployed at critical points around the globe contributes 
significantly to this nation's ability to ensure world 
stability.
    But, the old adage, ``You have to spend money to make 
money,'' is true. And you have done just that. The money you 
have provided the Marine Corps has been well spent. We have 
endeavored to be frugal. We fully understand and appreciate 
Congress' efforts to balance our federal budget and provide for 
the financial security of our nation. But even in the face of 
that daunting task, you have seen the value of equipping and 
funding your Marines. And I want to thank you for that. I want 
to thank you on behalf of that vigilant Marine standing his 
post in the rain on the other side of the world. Due to your 
foresight, he's warm and dry in his new Gor-Tex parka. I want 
to thank you on behalf of the Marine infantryman, who is today, 
walking in a pair of comfortable, quality boots--boots built to 
support him in ``every clime and place.'' You cannot believe 
what a difference that makes. I want to thank you for the 
ammunition, the spare parts, and operating moneys which 
translate into training and readiness. Readiness is paramount.
    I want you to know that we not only appreciate what you 
have done for us over the last several years, but that we have 
endeavored to enhance our capabilities utilizing that which you 
have provided. We feel strongly that we have succeeded in that 
undertaking. As an example, the funds provided for the 
Warfighting Laboratory have been put to good use in our Sea 
Dragon experiments. The first Advanced Warfighting Experiment 
(AWE), Hunter Warrior is complete. We learned much. We 
anticipate learning even more from the next AWE, Urban Warrior 
which is now underway with an anticipated conclusion in the 
spring of 1999. In Urban Warrior we are investigating new 
technologies, concepts and organizations for operations in the 
burgeoning urban littorals--areas which the QDR and the NDP 
both agree will be important in the decades ahead. But we are 
not just testing new ideas--not just gathering data. As a 
result of the Lab's conclusions, we are actually fielding new 
capabilities. I've spoken before of the Chemical Biological 
Incidence Response Force, now a unique part of the nation's 
defense. But, there is much more. We have begun to field non-
lethal weapons sets with our Marine Expeditionary Units world-
wide. These sets don't, in any way, dilute the lethality of the 
Marine Air-Ground Task Force but rather they give the commander 
a broader selection of capabilities. And, this summer, our 
MEU's will deploy with the Dragon Drone, an Unmanned Aerial 
Vehicle. In a short period of time--certainly very short when 
compared to traditional research, development and acquisition 
procedures--we have taken an off the shelf piece of equipment, 
the Dragon Drone, enhanced its performance, conducted 
experimentation, and then fielded a capability that greatly 
increases the battalion commander's ability to fight. This 
single UAV provides over-the-horizon day or night 
reconnaissance, surveillance, target acquisition, and even 
delivers non- lethal weapons. Given its breadth of 
capabilities, this is an inexpensive system with a price tag of 
between $45,000 and $90,000, depending on the configuration.
    All these things and much, much more are discussed in our 
booklet ``United States Marine Corps Concepts and Issues 
1998.'' I commend it as an excellent resource which provides 
information on a range of Marine Corps topics from, procurement 
programs, to personnel programs such as recruiting and our 
transformation process, to our operational concept, to the 
activities of the Marine Corps Warfighting Laboratory and its 
series of Advanced Warfighting Experiments.
    When I first came before Congress, I was asked, if I could 
have anything for the Marine Corps, what would it be? I told 
you, I'd like to retire some of our Korean War vintage personal 
equipment and outfit your Marines with modern gear that would 
make them more effective in the field. You helped with that and 
so much more. Again--thank you. I further thank you for 
recognizing the value of the V-22 tiltroter aircraft. This 
aircraft exponentially increases the effectiveness of our 
forward deployed expeditionary forces. The QDR recognized this, 
and today, because of the foresight of the Congress, the 
administration, and the Department of Defense (DOD), we will 
more rapidly assimilate this unique capability, having moved 11 
planes from the out-years into the current Future Years Defense 
Program (FYDP). This action had two very advantageous effects. 
First, it decreased the unit cost, and saved the American 
people tens of millions of dollars. Second, and more 
importantly, there is no new capability being procured by the 
DOD today which yields such a significant--such a 
revolutionary--difference, in our ability to fight the nation's 
battles, as the V-22 Osprey. And I don't just mean a tactical 
difference, although the scope of tactical applications is 
truly staggering. The procurement of an operational V-22 
capability has enormous strategic implications. Because it 
flies at speeds only achievable with a fixed wing aircraft and 
because it can refuel in flight, the Osprey can self deploy. We 
can pick up combat loaded Marines in CONUS and move them to 
point of crisis--quite literally anywhere in the world. And, we 
don't need an airstrip when we get there. It flies like an 
airplane, takes off, hovers, and lands like a helicopter and 
has a greater payload and greater range than mid-sized 
helicopters. When we field operational squadrons of V-22's, the 
warfighting CINC's and the NCA will have a host of options 
never before available--options and capabilities found in no 
other military in the world.
    America depends on and uses her Corps of Marines. This has 
never been truer than it is today. During the cold war, Marines 
were called upon to respond to crisis about once every fifteen 
weeks. Since the cold war, that commitment has tripled to once 
in every five weeks. Since my testimony just last year, the 
people have sent us to do their bidding in the world, on ten 
separate occasions. We were there. We were ready. And to ensure 
we continue to be ready, we maintain an average of 23,464 
Marines forward deployed--ready to respond when the nation 
says, ``Send in the Marines!'' We do two things for this 
nation, we make Marines and we win battles. Congress, who 
handles the purse strings of the nation, has done much to equip 
us to win those battles. I want to tell you the people's money 
has been well spent. I ask you for your continued support.

                      Carrier rotation in the gulf

    Senator Stevens. Mr. Secretary, we did take part of the 
committee to the South Pole, and on the way we happened to see 
Adm. Bob Natter, who was moving the Seventh Fleet, the 
Independence battle group, around to the Persian Gulf. We had a 
very interesting visit with him and some of his people, a very 
interesting coincidence. You mentioned that deployment.
    Can you tell the committee a little bit more about what the 
rotation policy will be for the Navy, and your personnel now, 
in terms of that deployment. It looks like an early and 
definite deployment.
    Secretary Dalton. Well, we plan to have the two carrier 
battle groups and the amphibious-ready group in the gulf for 
the foreseeable future. The Independence responded to the call, 
and I have a personal good feeling for that ship.
    I spent my youngster cruise on that when I was a 
midshipman, and it is the oldest ship in our fleet today, and 
continues to do an outstanding job, but we anticipate being 
there in the force that we are there today for the foreseeable 
future.
    In terms of the rotation, the U.S.S. Carl Vinson is 
steaming toward the gulf today and will be replacing or 
relieving the U.S.S. George Washington. Excuse me. The Stennis. 
Excuse me. The U.S.S. John Stennis will be relieving the George 
Washington, and we are staying on our 6-month deployment 
schedules.
    We learned a valuable lesson in the seventies when we 
reached a hollow force by keeping our people deployed for long 
periods of time, 8, 9, 10, sometimes 11-month deployments.
    Our people come into the Navy and Marine Corps to go to 
sea, they expect to deploy, but we have learned through 
experience that 6 months is the right period of time, and this 
6-month rotation cycle is one that we adhere to. For it to be 
broken, it actually has to be approved by the Chief of Naval 
Operations, and he has only done that rarely in the last few 
years.
    So by staying on that rotation, having these ships relieved 
by their shipmates and counterparts coming into the gulf is the 
right thing to do.
    Obviously, keeping that number of carriers and that 
amphibious ready group in the gulf for a long period of time 
does take away from their capability to be someplace else, so 
that is a strain, and we are also steaming these ships longer 
than their steaming days per quarter, or higher, on the 
deployment in the gulf than they normally would be, because 
they have a big job to do.
    So that is the plan, and it is one that we can certainly 
carry out for an interim period of time. If we had to do it 
long term, it would put a strain on us and not be able to cover 
other commitments in other parts of the world.
    Senator Stevens. Thank you very much. Gentlemen, I hope the 
committee will not run the clock, but I ask each of you to 
limit your questions somewhere around 5 to 7 minutes.

                          New attack submarine

    Senator Inouye.
    Senator Inouye. Thank you. Mr. Secretary, last year the 
Congress approved legislation for a contractor teaming 
arrangement and the procurement of four new attack submarines 
over the coming years. Can you give this committee a status 
report on the new attack submarine program?
    Secretary Dalton. Yes, sir, Senator. The Congress directed 
that we budget four submarines in the fiscal year defense plan 
[FYDP], and at this low production rate the most economical 
approach to build submarines at two yards was to look for 
efficiencies in the major portions of the production. This was 
an innovative, unique approach to having these two yards team, 
and we appreciate the support of this committee in allowing us 
to do that.
    We think it will save some $600 million over the FYDP by 
having these two yards work together in this way, and I am very 
pleased with the progress to date. So far, of the 12,000 
drawings, some 5,000 are already complete, the contract 
proposal was received from Electric Boat and Newport News in 
mid-December. We expect to award the contract for the first 
submarine in the second quarter, by the end of June. The 
project is on schedule for mockup development and we will 
actually cut steel on production of a prototype of the 
bulkhead, in April. So the program is on schedule and it is 
doing well. It is one that was a real innovation on behalf of 
the Navy Department but I am convinced that it is in the best 
interest in the Department of the Navy and the taxpayer.
    Senator Inouye. Admiral Johnson, on November 21 of last 
year, your Vice Chief of Naval Operations announced that the 
Pacific missile range facility [PMRF] is the best choice to 
conduct antiballistic missile defense programs. Can you tell us 
why PMRF was designated the best choice?
    Admiral Johnson. Senator Inouye, there are several reasons 
that brought the Vice Chief to that statement, and I will just 
state a couple of them here. First, and really foremost, in my 
mind, is the open, unencumbered space attendant to the Pacific 
missile range facility.
    A secondary and also very important reason for us is that 
the first two ships that will be equipped with the area theater 
ballistic missile defense capability are home ported in Pearl 
Harbor. It is a logical fit for them to execute the test 
program that will commence next year in the local area, for 
quality of life for the crew, for what we have learned in the 
Mountain Top experiments that we did previous, et cetera, so it 
is a very strong allegiance we have with the PMRF.

                        Recruiting and retention

    Senator Inouye. General Krulak, in your prepared statement 
you note the high rate of crisis to which the marines are 
responding. In fact, you say that it used to be once every 15 
weeks, now it is triple, once every 5 weeks.
    Other services somehow connect high rates of deployment to 
their problems of retention and recruiting, and yet I note from 
your report that you do not seem to be suffering from the same 
problem. What is the reason?
    General Krulak. I think it is a couple of reasons, sir. One 
is the ethos of the Marine Corps, they come in, as the 
Secretary says, to deploy. They are the type of young men and 
women of character who literally say we are going to come here, 
we know we are going to be worked very hard, that is why we 
have come into the service, and so that is their basic 
philosophy coming in.
    Second, I think they get a heck of a challenge, they are 
doing something very important for the Nation, and there is not 
a young man and woman around who does not get fired up about 
the opportunity to do something meaningful for their country.
    Third, I think they get good leadership, to be very honest, 
and I do not mean from the general level, I mean from the 
corporal, and the sergeant, and the gunnery sergeant level, 
maybe the captains and the lieutenants, but at the base level 
they are really being led by tremendously fine men and women.
    Fourth, that is reflected in not only our accessions, 
recruiting, but more importantly, in retention. By the end of 
this first quarter, we had utilized 88 percent of all of our 
available boat spaces to reenlist people.
    At the end of 3 months we only had 12 percent of the corps 
left to go, we literally had to slow retention in order to 
allow those people who were coming up in the following months 
to get an opportunity to reenlist in the corps, all of it, 
because I think they are getting the type of challenge that 
they sought when they came in, in the beginning.
    Senator Inouye. Thank you very much. Mr. Secretary, your 
commander of the Pacific Fleet, Admiral Clemins, has made it a 
high priority to have new housing and other facilities on Ford 
Island, and obviously, we do not have that kind of money to 
budget this type of activity, so a suggestion was made that the 
Navy enter into agreements with the private sector to offset 
the costs of this proposal. Can you tell me what the status is?
    Secretary Dalton. Senator, as you point out, Admiral 
Clemins, CINCPACFLEET, has submitted a conceptual plan for the 
development of Ford Island. It is his judgment that this will 
provide a focal point for Pearl Harbor, a quality residential 
community for the Navy Department, and also establish a place 
for Navy history and culture. He has also proposed draft 
legislation which would give the Navy Department the broad 
authority to lease or convey the property to private entities 
to construct and operate military housing and other facilities. 
We are reviewing that proposal within the Navy Department 
today, and I look forward to getting the briefing and seeing if 
we can move forward with it as well.
    Senator Inouye. Are you optimistic?
    Secretary Dalton. Yes, sir; from what I know about it, it 
is a good proposal, but I do not have the details yet. I know 
that Admiral Clemins feels very positive about it, and he and 
his staff have done a great deal of work on it. I look forward 
to seeing it personally.
    Senator Inouye. Thank you.
    Senator Stevens. Senator Bond.

                               F/A-18E/F

    Senator Bond. Thank you very much, Mr. Chairman. Mr. 
Secretary and Admiral Johnson, we have heard that the E/F, the 
Navy's F/A-18E/F program is your No. 1 priority, can you also 
assure us that long-lead funding for the F-18 will be protected 
from reprogramming raids, to fill other shortfalls, so that a 
multiyear procurement may be securely negotiated in the near 
term?
    Secretary Dalton. Senator, as I said in my opening 
statement, this is our No. 1 priority, this program is doing 
extremely well. It is on time, on budget, under weight. We are 
in the test phase of the program, and there are always issues 
that we deal with in the test phase, but this program is doing 
extremely well. We do want to, indeed, protect this program, 
and go forward with the multiyear.
    The CNO has been actively engaged, actually been down to 
fly the Super Hornet, as Congressman Cunningham has recently. 
We always welcome that and would welcome any of you that would 
like to go----
    Senator Stevens. They both came back safely----
    Secretary Dalton. Yes, sir, they did.
    Senator Stevens [continuing]. The plane and the 
Congressman.
    Secretary Dalton. Absolutely.
    Senator Stevens. Good.
    Secretary Dalton. Let me ask the CNO to expand on that, 
please.
    Admiral Johnson. Only to say, Senator Bond, that personally 
I want to build a fence around the E/F so that nothing 
encumbers our climb to steady-state procurement, so that we can 
lock in the multiyear, that is really important to us, that is 
why the 30-year plan this year is important.
    We have to get up on that ramp stabilized, so we can get 
those airplanes, for the best dollar value, out to the fleet, 
ASAP.
    Senator Bond. Thank you very much, Admiral, and Admiral, 
addressing the Navy standoff, SLAM-ER, does the Navy have a 
unique requirement for a man in the loop in your standoff air-
to-surface weapon, and could you explain what parameter is met 
by including a man in the loop, for the benefit of the----
    Admiral Johnson. Yes, sir; I think the best way to say it 
simply is that the reason the Navy is so enthusiastic about 
SLAM-ER is because it does satisfy the man-in-the-loop 
requirement, which gives us the capability to reprogram that 
missile. Relocatable target flexibility, that is really what it 
is all about.
    By the way, we have had four in a row, very successful, not 
trivial profile test shots with the SLAM-ER, so we are very 
excited about that missile.
    Senator Bond. But the man in the loop, as I understand it, 
is because there is a pilot----
    Admiral Johnson. Indeed.
    Senator Bond [continuing]. Who is much close to the----
    Admiral Johnson. Exactly.
    Senator Bond [continuing]. Missile and the target.
    Admiral Johnson. It gives you the combat tactical 
flexibility to essentially deal with relocatable targets, real-
time.
    Senator Bond. That is the point I want to make. Thank you.
    Admiral Johnson. Yes, sir.
    Senator Bond. For a moving target you can make that----
    Admiral Johnson. Indeed.
    Senator Bond [continuing]. Reprogramming. Final question. 
Mr. Secretary, I know your budgeting a funding plan which takes 
advantage of a proposed multiyear procurement for the T-45. 
Would you please explain that for the committee?
    Secretary Dalton. Yes, sir, we are, and we are pleased with 
the progress of the T-45. We had a very nice roll out of that 
down at Meridian, MS, last year. The T-45 is doing well, and we 
are moving forward with the multiyear.
    Senator Bond. What is your time line for the execution once 
authorization is granted?
    Secretary Dalton. Let me answer that for the record, if I 
could, please, Senator.
    Senator Bond. All right. Thank you very much, Mr. Chairman.
    [The information follows:]

    The timeline for the execution of the T-45 Multi-Year 
Procurement is 15 aircraft per year for fiscal year 1999-2002, 
and 4 for fiscal year 2003. This 64 aircraft buy (at a savings 
of $47.4 million over the current non-MYP plan) completes the 
T-45 buy of 187 aircraft required under current planning 
factors. The final T-45C aircraft bought in fiscal year 2003 
will be delivered in fiscal year 2005. Once authorization for 
fiscal year 1999 funds is received, the MYP contract can be 
awarded shortly thereafter. Current plans are for a December/
January award.

                             300 ship Navy

    Senator Stevens. Senator Cochran.
    Senator Cochran. Thank you, Mr. Chairman. Mr. Chairman, I 
join you in welcoming this distinguished panel of witnesses 
before our committee today.
    In looking at the budget request for the Navy and the 
Marine Corps, there are obviously very strong efforts to meet 
the needs that we have for a mobile force that can project 
power around the globe right now, that force is stretched 
pretty thin, and I think that is very clear from not only the 
statements that have been submitted to the committee, but also 
the budget requests, particularly as it relates to helping meet 
some of the needs for having equipment and ships that are 
modern and capable to meet this ever-growing challenge that we 
face around the world.
    In that connection, I know that there has been a goal for 
some time of 300 ships for the Navy. That is the operational 
requirement that has been viewed as the Navy's goal, but you 
look at the money that is in the budget for ship building and 
it does not really keep pace with the need for new ships coming 
into the fleet to maintain a 300-ship Navy. I think the 
increased rate of construction that is projected in this budget 
is something like 5 ships to 6 ships per year, you really need 
to build about 10 ships each year over the next several years 
to get us on the track to meet that goal.
    Have we abandoned the goal of a 300-ship Navy, or are we 
getting ourselves in trouble in the out-years by not having 
more money devoted to ship building?
    Admiral Johnson. Senator Cochran, no, we have not abandoned 
that. We, indeed, plan to be at 300-plus ships well into our 
future. It does not make sense to build ships before we need 
them.
    We, indeed, were building up to a 600-ship Navy during the 
1980's, so we have a relatively young fleet. It is important 
that we build ships when we need them, but let me emphasize the 
point that early in the 21st century we are going to need to 
build more ships.
    This DD-21, the surface craft of the 21st century that I 
referred to in my opening statement, is a ship that we are 
going to be building more of, and that ship is going to have 
fewer sailors aboard, less than 100 compared to the over 300 
that we have aboard ships that are of a similar type ship that 
we have sailing in the Navy today.
    The life cycle cost savings from that is some 70 percent. 
It is really significant. We think that by taking that approach 
we will be able to build more of those ships, and, indeed, keep 
our Navy at the size that we need to be in order to meet the 
commitments around the world.
    We no longer need the 600-ship Navy that we once thought, 
because the ships that we are building today are so much more 
capable and can do so much more with even fewer sailors than 
those that they are replacing.

                              LHD's/LHA's

    Senator Cochran. We noticed also that the ship groups that 
you have deployed in the Persian Gulf area, the general area, 
include an LHD Marine Corps battle group, along with two 
carrier groups. It illustrates the importance, I think, of the 
Marine Corps participation in that exercise, but also similar 
challenges that we have had in the past.
    One question that I raised the other day in a meeting with 
Admiral Johnson was whether or not you are planning to ask for 
long lead funds for a new LHD.
    It seems to me that at one point we were talking about a 
12-ship LHD fleet, we are substantially below that, and not 
going to be able to reach that unless we do get some funds in 
the budget and start preparing for the construction of another 
LHD. I would like to get the Secretary's reaction, and then 
both Admiral Johnson's and General Krulak's response to what 
that need might be.
    Secretary Dalton. Senator Cochran, we are committed to the 
12 amphibious ready groups for our Navy Department. We are 
studying the option of whether to procure another LHD, or to do 
a SLEP, a Service Life Extension Program plan for the LHA's. We 
are looking at that option, and also considering the option of 
perhaps even accelerating the LHX, the next generation. 
However, we have not made a decision with respect to that, we 
are addressing it in our POM-00, which will be coming near 
term, and evaluating each of those options. I think options is 
the key word with respect to that, but let me ask the Chief of 
Naval Operations [CNO] and the Commandant to express 
themselves.
    Senator Cochran. Well, let me just follow up with this 
additional question.
    Secretary Dalton. Yes, sir.
    Senator Cochran. What is the preferred way--to build a new 
LHD or to repair the LHA's?
    Secretary Dalton. There are pros and cons to each way, in 
terms of considering costs, production, and also the ability to 
insert new technology. Those are the things that we are 
considering as we look at each of those options.
    Senator Cochran. Admiral Johnson.
    Admiral Johnson. Just a couple things to add, Senator 
Cochran. One is, and I think it is very important for the 
record that I mention the ``Quadrennial Defense Review'' on the 
front end in my remarks. The ``Quadrennial Defense Review'' 
validated what Chuck Krulak and Jay Johnson would say is 
something that is fundamental to the future of the Navy and 
Marine Corps team, and that is 12 carrier battle groups and 12 
amphibious ready groups, so as the Secretary said, 12 is the 
right number. How we shape the amphibious ready group for the 
21st century is very important to us, obviously.
    We are looking at the options. For me, in order to provide 
for the Commandant's marines, I need the best, most combat-
capable platform I can get that will allow me to keep ahead of 
the technology curve, and however that translates into these 
options, that is what we are going to go for, but we are very 
excited about the future prospects for the 21st century.
    Senator Cochran. I could not agree more. Twelve big deck 
amphibs is key, not just for the Marine Corps, but for the 
Nation.
    We have talked a little bit about where they are now, and 
we say there is only one in the Persian Gulf. The reality is, 
it just got there, relieved one that is now in the Gulf of 
Aden, there is one that is coming through into the 
Mediterranean, as we speak, there is one in Stonewater Bay, 
Australia, as we speak, so we have four amphib ready groups 
right now operating, four deployed, for the Nation.
    The capability issue is key. You will want to have the most 
capable ship, you do not want to get something that is not 
going to take you into the 21st century.
    Senator Cochran. Thank you very much. Thanks, Mr. Chairman.
    Senator Stevens. Senator Dorgan.

                     capability to perform Missions

    Senator Dorgan. Mr. Chairman, I thank the witnesses, I 
thank Secretary Dalton and the General and the Admiral for 
being here. The discussion about appropriations is normally a 
discussion about unmet needs, which brings our attention to 
capability.
    I read, and see, and hear from time to time people 
describing the Defense Department and the military branches as 
not capable to perform their missions, substantially weaker 
than at the height of the cold war, and so on and so forth.
    So I wonder if you could just give us the description of 
capability at this point. Are you concerned about your 
capability, are you fully capable of performing all the 
missions? And, again, I ask that question, understanding that 
the discussion about appropriations is always about unmet 
needs.
    General Krulak. That is a very good question, sir, because 
you have come to the real hub, because it does have to do with 
money, also. It's the question of capability versus a system, 
or a platform, or numbers of people, and too often we get 
wrapped around the latter and not around the former, which is a 
capability.
    In the Marine Corps we are capable of executing that which 
we have signed up to execute. We have never been a two MRC 
force, we have always just been a one. We are capable of doing 
that.
    Our problem is simply what's going on behind the scenes, as 
we come back, or as Jay will tell you, as he comes back. The 
ability to get that carrier battle group or the amphibious 
ready group back up on the step, ready to go out when the 
whistle blows, is taking longer, and taking more money because 
of the systems. Now you are on this end of it--because the 
systems are aging, and the cost of maintenance and repair is 
increasing. The capabilities there, sir, it is what backs that 
capability up as you prepare for the next wave to go out.
    Senator Dorgan. That relates to the kind of question 
Senator Cochran asked about the replacement of ships, and so 
on----
    General Krulak. That's correct.
    Secretary Dalton. Yes, sir. Absolutely.
    Admiral Johnson. I would only add, Senator Dorgan, that the 
committee knows well that we are a rotational force, and when 
you cast it in the terms of capability, I would tell you, as 
Chuck did for the Marines, that the Navy forces that are out 
forward are absolutely capable of executing the full spectrum 
of their mission tasking.
    The concern, the unmet need discussion, really, in my view, 
belongs on the nondeployed side of our lives, and that is where 
our focus of effort is being put right now.
    We are a tiered readiness force. We always have been by 
design. We are fully combat ready when we deploy, when we come 
home we step off the readiness ladder, if you will, and then 
work our way back up over the period called the interdeployment 
training cycle.
    What has happened to us right now is that if you describe 
that interdeployment training cycle as a bathtub, I would use 
the term that the bathtub has gotten deeper. The climb out of 
the bathtub to go back on the deployment step comes later in 
the turnaround, and it is a steeper climb out.
    That is where we are focusing our money, that is where we 
are focusing our priorities, so that we can get ourselves back 
to what I would consider a normal turnaround.

                 Theaterwide ballistic missile defense

    Senator Dorgan. I have a couple of additional questions. 
Secretary Dalton, you and I talked yesterday, and I asked you 
about the theaterwide ballistic missile defense system that the 
Navy is developing.
    Can you describe for us generally the capability of that 
system? I had read that you are accelerating that program. What 
are the consequences of that?
    Secretary Dalton. Senator Dorgan, our Navy theater 
ballistic defense program is on track, we feel very good about 
the progress that we have made.
    In the area defense program, the contracts are let and 
designs and reviews are complete. The missiles are being built, 
the computer programs are in test. I am confident that we will 
achieve our initial operational capability in 2001, as 
scheduled.
    We are also very positive about the Navy theaterwide, and 
the progress that we have made there. We have reviewed each 
capability and how well it is doing. Indeed, it is part of our 
forward deployed sea base theater ballistic missile [TBM] 
capability.
    I think the Navy Department has, indeed, stepped forward, 
and of all the services, we feel very positive about the 
contribution that we are making in this regard. I think that 
it's going to be very important to our future. Let me ask the 
CNO to expand on those remarks.
    Admiral Johnson. Only to add, sir, that within the Navy 
budget what we have done with the program you have before you 
is we are preparing the force, if you will, preparing the fleet 
to accept theater ballistic missile defense capability.
    We have put over $1.2 billion into the various programs 
that will allow us to do cruiser conversions, that will allow 
us to forward fit into the DDG-51's, the CEC, and area theater 
ballistic missile capability. We have what I would consider a 
very robust program, because we think this is right, not only 
for the Navy, but for the country.
    Senator Dorgan. That potentially puts a seal over a carrier 
group.
    Admiral Johnson. Indeed, sir. The area, in terms of 
envelopes, let us just say the area is designed to go forward 
with the battle groups and provide protection for our forces, 
for the Marines, for the Army, for the allies, whoever needs 
them in the execution of a mission, in the littorals.
    The theater systems have a much broader reach, and they 
are, by orders of magnitude, larger in their capacity.
    Senator Dorgan. Just one brief question. I have had some 
inquiries from North Dakota, General Krulak, about a marine 
reserve plan. Are you considering an operational unit of marine 
reserve in North Dakota?
    General Krulak. Yes, sir, we are. We should be nearing a 
decision. The time line I have been given is about 30 days to 
the decision point.
    Senator Dorgan. Mr. Chairman, thank you again. I think the 
information provided this morning is very useful, and I 
appreciate your being here.
    Senator Stevens. Senator Bumpers.

                          F/A-18 capabilities

    Senator Bumpers. Just so you can be thinking about it, I 
have two major areas of concern. One is what seems to me like a 
premature retirement of a lot of good ships, and second is the 
F-18.
    I confess that I have been adamantly opposed to the Air 
Force's F-22. I thought that based on all the best information 
I could get that the F-18 was quite capable of defeating just 
about anything for the next 20 years, and so I opted for the E/
F, and have been a staunch proponent of it.
    Now, all the literature in the newspaper stories are 
casting very serious doubts on the capabilities of the E/F, 
wing drop, and other problems which the General Accounting 
Office [GAO] has identified.
    This is like a lot of things, depending on who you talk to 
you get different answers on how severe the problems will be. 
The wing drop seems to be the most serious.
    On the one hand the GAO says the development costs of that 
F-18E/F, to correct the wing drop and other problems, could be 
very substantial and well above the roughly $4.9 billion 
scheduled for the development of the E/F and they are scheduled 
to come out with a new report, which I do not think has been 
released yet, setting out in a more precise way what these 
development costs are likely to be.
    My question is: What do you say to the GAO report, which is 
pretty damning on the F-18?
    Secretary Dalton. Senator Bumpers, we have gone through the 
GAO report and have very good answers for each of the points 
that they raise. The F-18E/F Super Hornet is an outstanding 
aircraft. It has much greater range than the C/D, its 
predecessor. It also has much greater stealth capability and 
much greater payload capability, both taking out and bringing 
back. It has much greater room for growth. There is no more 
room for growth in the C/D. The E/F is an aircraft that we have 
advanced to a long degree, as I said before, on time, on 
budget, underway.
    The wing drop issue that you raise; on a scale of 1 to 10, 
I would characterize it as a 2 or a 3, 10 being a very severe 
problem. We have dealt with problems in this test program that 
are far more serious than the wing drop. We had issues with 
engines, and hydraulics, and so forth that may be considered 
fours or fives in terms of severity. This wing drop issue is 
not a significant problem. However, it is important to us to 
address it, and we are. We have a fix in hand to deal with 
that.
    Senator Bumpers. What is the fix?
    Secretary Dalton. The fix is a perforated wing faring that 
is not going to have any negative impact with respect to range, 
stealth, any of the parameters that deal with the aircraft. We 
have done some testing with it and the testing has been very 
positive. We have not finished the testing but I am very 
optimistic that, indeed, this problem has been addressed. We 
just need to finish the testing with it, but it is essentially 
done.
    As I mentioned earlier, the CNO has actually been down to 
fly the aircraft, and is an aviator by his own warfare 
specialty in the Navy, and can address the specifics of it. 
Well, let me ask him to do that, if I could.
    Senator Bumpers. Before you do that, let me ask you, you 
are familiar, I am sure, with the GAO's recommendation, quote, 
``That the Secretary of Defense direct the Secretary of the 
Navy to not approve contracting for any additional F/A-18E/F's 
until the Navy demonstrates through flight testing that 
identified aircraft deficiencies have been corrected.'' Are you 
adhering to that?
    Secretary Dalton. Senator Bumpers, I would not ask the 
Secretary of Defense to approve a funding request for this 
aircraft until I was convinced that, indeed, it was safe; that 
it had met the performance characteristics, and met the 
requirements that the aircraft should have.
    So the Secretary does not have to worry about making the 
decision. I am not going to recommend that he make that 
decision until I am satisfied. But as I say, I feel very good 
about where we are today. All we need to do is complete this 
testing. We are very far down that road with respect to having 
dealt with that problem.
    Senator Bumpers. Admiral Johnson.
    Admiral Johnson. To add, Senator Bumpers, the test program 
is a combination of flight testing, fluid dynamics testing, 
wind tunnel testing. Every move is being vetted by an 
independent blue ribbon panel of experts, so we have the right 
people working the issue.
    As the Secretary said, this is not a big deal. Some would 
choose to make it so, but it is not a big deal. By the time it 
has to be dealt with in the context of the budget, the wing 
drop will be officially behind us.
    The pathway we are on will take us to a Navy program review 
this month, if the weather allows to keep the flight testing 
going, this month, and it will be done.
    The GAO report showed us no surprises. I will tell you, we 
had opened our books to them. We were very forthcoming with the 
test team. There were no show stoppers or surprises in there. 
This is a model program.
    Senator Bumpers. Well, Mr. Chairman, I will submit a few 
additional questions in writing to the Secretary. The GAO 
report, incidentally, that was promised for late February or 
March, to my knowledge, that has not come out, has it?
    Secretary Dalton. No, sir; I have not seen the second 
report.
    Senator Bumpers. When I submit my questions, and I will put 
in the letter to you, I would prefer no answers until that 
report has come out, and we will see where we are then.
    Secretary Dalton. Yes, sir; I will be happy to comply with 
that.

                           Ship service life

    Senator Bumpers. My other question is this: I know that the 
DDG-51's, the Arleigh Burkes, those are highly preferable ships 
in this environment, but we are retiring 5 frigates, 23 guided 
missile frigates, and a couple of Virginia-class cruisers, I 
think, notably, the U.S.S. Arkansas, which is 19 years old, and 
was at the time promised a 35-year life. I mean we depend on 
those things here.
    When you tell us a ship has a 35-year life, we expect it to 
have a 35-year life. Now, the rule is, No. 1, that it cannot 
meet the kind of new threat that you expect.
    I have a question on that, what is the threat, and who is 
offering the threat? But you are familiar with Admiral 
Reason's, I think, where he said, ``I would rather have three 
hulls than one Arleigh Burke,'' and we are putting a lot of 
good hulls that are not obviously quite state of the art in 
mothballs.
    The U.S.S. Arkansas cost $300 million. Today that ship 
would cost in the neighborhood of $900 million. Now, if you can 
overhaul and refuel that ship for $200 million, why is that not 
a good bargain for an additional 10 to 15 years of service?
    Secretary Dalton. Well, Senator Bumpers, a nuclear-powered 
cruiser like the Arkansas, the overhaul and replacing the 
nuclear core, and so forth, it is a very expensive issue. As we 
have gone through this right-sizing process of downsizing, and 
ridding ourselves of older ships, we have used benchmarks of 
times like that to consider having ships like that 
decommissioned.
    We have done the same thing with submarines.
    Senator Bumpers. Well, Mr. Chairman, I have taken up too 
much time already. General Krulak, I guess you are doing 
everything about right, I do not have any questions for you. 
[Laughter.]
    Of course, as a marine, I would probably think that whether 
you were or not.
    Senator Stevens. Senator Domenici.

                     Personnel problems/statistics

    Senator Domenici. I just have a couple of questions. I 
understand there has been testimony regarding personnel 
problems such as Naval Academy cheating, those things are being 
addressed, but I would like to ask some other questions 
regarding personnel problems.
    Do you have any way of comparing such things as spousal and 
child abuse 7 years ago, 8 years ago, versus now, substance 
abuse cases, maybe even divorces, while in the service, with 
families, versus another period of time?
    I wonder if there is any indication that these kinds of 
problems are changed by deployments, long periods of 
deployment?
    Secretary Dalton. Senator, first of all, one of the primary 
lessons of leadership that we teach our people is take care of 
your people. Indeed, we consider it the responsibility of 
commanding officers and unit leaders to be aware of what is 
going on in the lives of the people that they lead. In addition 
to that primary responsibility. Yes, sir, we do surveys on a 
regular basis with respect to seeing how we are doing with some 
of the things that you mentioned. For example, with regard to 
substance abuse, we have made great progress in the Navy 
Department with respect to that. In the eighties we had major 
problems with substance abuse, and in some cases we had ships 
with some 50 percent of our people testing positive with drugs. 
Today, we are essentially a drug-free Department of the Navy, 
because we administer tests on a routine basis, and, indeed, 
anyone who tests positively for drugs is significantly 
disciplined and, indeed may be out of the service. So we have I 
think done very well with that.
    Another issue that we have found that is at the core of 
some of the problems that you refer to is alcohol abuse. We 
have made a major effort in the Navy and in the Marine Corps to 
de-emphasize and de-glamorize the use of alcohol. We call the 
program in the Navy right spirit, and in the Marine Corps 
semper fit, and it is working. We have made significant 
progress in reducing problems that are related to alcohol, and 
we found that most of the things to which you referred, 80 or 
90 percent of the cases turned out to be alcohol related. So 
getting to the core of that issue, I think, indeed, addresses 
it.
    Senator Domenici. Do you have anything that compares years 
past with now in these areas?
    Secretary Dalton. Yes, sir; I can answer that for the 
record. We do have some statistics we can show you with respect 
to that.
    Senator Domenici. I think for myself, the General and the 
Admiral, I think you ought to be concerned about trends in 
these areas among the military personnel, because we all are 
looking at what is going to cause things to fall apart, and 
frankly, if you have drug abuse, and alcohol, and child and 
spousal abuse, and very high divorce rates, I mean pretty soon 
it is going to be very hard to keep people in the military, or 
they are not going to be the kind of people you have been 
bragging about as the best suited and most fit in the world.
    So if you can supply something----
    Secretary Dalton. Yes, sir.
    Senator Domenici [continuing]. Showing some way to measure 
success, and if you do not have it, then maybe you ought to 
state in the record how you might go about doing some 
comparisons.
    Secretary Dalton. Yes, sir; I'd be very happy to do that.
    Senator Domenici. That is enough for that.
    Secretary Dalton. Yes, sir.
    Senator Domenici. The chairman has been very good in 
delaying for me, who came very, very late. I want to leave you 
with some written questions regarding the T-38.
    Secretary Dalton. Yes, sir.
    Senator Domenici. I mean the F-18. Excuse me. In detail. I 
have a number of questions about it, but now I want to ask you 
about your respective budgets, as it pertains to contracting 
out, or privatization.

                       Privatization/outsourcing

    How did the Navy and the Marine Corps determine that 
contracting out saves 20 percent, and why did the Air Force 
assume a different savings? They claim 25 percent.
    Could you tell us, what did you study and what are your 
models for saying that we are going to save 20 percent if we do 
these things?
    Admiral Johnson. I will be happy to provide you the 
specific matrix for the record. I would comment, Senator 
Domenici, that the commitment that the Navy has made in this 
budget and the subsequent years is to study, via the A-76 
process, 80,500 full-time equivalents. It gets back to the 
business of trying to control our infrastructure, and reduce 
and be more efficient within our infrastructure.
    I have heard numbers from 10 percent, to 35, to 40 percent 
goodness in those A-76 studies, depending on who you talk to 
and what the specifics of the study are. I am not smart enough 
today to tell you what the right number is, but I would tell 
you that our experience to date in the small samples we have 
had has been somewhere between 20 and 30 percent.
    We will fund those studies to take us on a pathway to try 
to realize over $1 billion a year in savings by 2003. That is a 
very ambitious plan, but it is one that we are taking forward 
in earnest, and I will provide the rest for the record, sir.
    [The information follows:]

    The savings reflected in the Navy's FYDP are derived from 
our expectation that ``competition'' not ``contracting out'' 
will result in significant savings. This expectation is based 
on research and analysis performed by the Center for Naval 
Analysis (CNA). CNA reviewed our experience implementing OMB 
Circular A-76 in the 1980's and found that ``competition'', not 
``contracting out'', resulted in cost savings of approximately 
30 percent, regardless of the outcome of the cost comparison. 
As a matter of interest, approximately half of the functions 
studied remained in-house after the competition, albeit in a 
more streamlined, efficient organization. CNA also reviewed the 
Navy's inventory of commercial activities and determined that 
conducting cost comparisons of activities involving 
approximately 80,000 full-time equivalents would yield the kind 
of savings we have incorporated into the Navy's FYDP. The CNA 
analysis formed the basis for Navy's competition savings 
projections. I cannot address the Air Force's savings 
assumptions, but I will be happy to provide you with a copy of 
CNA's analysis that forms the basis of our estimate that 
competition yields average savings of 30 percent.

    General Krulak. Sir, we are very cautious about putting 
wedges out there, thinking that we are going to reap great 
benefits.
    We are doing exactly what Jay is saying, we are running the 
A-76 studies, we are putting money up front to get a good idea 
of what really we can expect in the out-years. But I think that 
both Jay and I have seen what can happen if you get too 
overenthused about money in the out-years if it does not come.
    I would also echo the issue about the infrastructure, and 
go back. I think we all see an infrastructure problem, where 
you have too much infrastructure, and some of it is really not 
adding to the capability that you need, and sooner or later we 
are going to have to get at that.
    Senator Domenici. General, and Mr. Secretary, and Admiral, 
I raise these questions because I understand how difficult it 
is when others are doing a quadrennial defense review and the 
dollar amount for you to save is set in advance from above.
    You were told this is how much you have to spend on 
defense, and then you go about putting the pieces together. I 
am very concerned that somewhere along the line we were not 
going to be able to make ends meet. You came up with this 
privatization and contracting out to make the ends meet, and 
frankly, I do not think you are going to achieve it.
    I am not suggesting that any of you have ulterior motives 
in putting it in, I just do not believe when push comes to 
shove you can save that much money. I do not think you are 
going to get them done, and I guess I just worry about that, 
because every year we think we have lived within our means, and 
there is always something that turns up that we could not 
achieve, and this could be a very big one when you consider all 
the services.
    I would hope that you would advise us specifically how you 
are going to go about measuring this and what are your time 
intervals for making these decisions. Could you put that in a 
kind of record statement for us, so we will have some 
information.
    Admiral Johnson. Yes, sir; I would be glad to, and we do 
have a good system for measuring that, but we will provide that 
to you.
    Senator Domenici. On my previous question, when I asked you 
to submit more information, no aspersions on anybody at this 
table, but the Defense Department, in general, has difficulty 
answering questions like that in a timely manner. Normally, 
they take 2 or 3 months on any issues about marital abuse, 
drugs, and the like, I do not think it will do us much good 
unless you do it rather expeditiously.
    Secretary Dalton. Yes, sir; we will provide an answer to 
you expeditiously.
    [The information follows:]

                                        SPOUSE AND CHILD ABUSE STATISTICS
----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--
                                         -----------------------------------------------------------------------
                                            1990     1991     1992     1993     1994     1995     1996     1997
----------------------------------------------------------------------------------------------------------------
Reported Spouse Abuse Incidents.........    4,169    5,605    6,345    6,344    6,057    5,228    3,424    3,357
(Rate of incidents reported per 1,000
 spouses)...............................  ( \1\ )  ( \1\ )    (240)   (25.5)   (24.5)   (22.4)   (13.9)   (16.3)
Reported Child Abuse Incidents..........    3,735    4,997    5,351    5,368    4,122    3,822    2,435    2,606
(Rate of incidents reported per 1,000
 children)..............................  ( \1\ )  ( \1\ )   (13.1)   (13.5)   (13.8)   (10.5)    (7.1)    (7.8)
----------------------------------------------------------------------------------------------------------------
\1\ Unknown.

    Navy abuse incident reports have decreased significantly since 
fiscal year 1993. This trend may be due to downsizing, improved 
screening of cases through use of the Navy's Risk Assessment Model, 
and/or fear of adverse career consequences leading to decreased 
reporting. The Congressionally directed Abuse Victim Study showed that 
fear of negative career consequences for servicemembers was the major 
disincentive for reporting family violence (Defense Authorization Act 
for Fiscal Year 1993 (Public Law 102-484)).
    We have no evidence or indication that deployments or long periods 
of deployment directly impact the incidence rates of child or spouse 
abuse. Personal childhood experiences, learned behavior patterns, and 
individual psychological factors are thought to influence the incidence 
of child or spouse abuse more directly. Situational family stress, such 
as work stress, does not appear to be a strong predictor of child or 
spouse abuse, but may increase risk when found in interaction with 
other known risk factors such as those above. We recently completed a 
survey of Navy recruits at Great Lakes Recruit Training Center which 
indicates that a significant number of recruits have a personal history 
of childhood physical and sexual abuse, along with exposure to a 
variety of other traumatic events. This history of childhood trauma, 
which predates entry into naval service, is likely to contribute to a 
variety of personnel and health problems unless assistance is provided. 
We are working on intervention programs to minimize the potential for 
negative consequences in the future.

                                            ALCOHOL ABUSE STATISTICS
----------------------------------------------------------------------------------------------------------------
                                                                       Fiscal year--
                                          ----------------------------------------------------------------------
                                             1991       1992      1993      1994      1995      1996      1997
----------------------------------------------------------------------------------------------------------------
Total Alcohol Incidents..................     5,986      5,850     5,750     6,123     5,717     5,225     3,063
(Percent of total Navy Population).......       (1)        (1)       (1)       (1)       (1)       (1)       (1)
Underage Drinkers........................     1,916      1,521     1,721     1,923     1,533     1,587       978
(Percentage of total incidents)..........      (32)       (26)      (30)      (31)      (27)      (30)      (32)
Total Navy DWI's.........................     4,900      3,440     2,544     2,357     2,043     1,905     1,066
DWI Underage Drinkers....................     1,068        666       315       263       198       179       107
(Percent of total DWI's).................      (21)       (19)      (12)      (11)      (10)       (9)      (10)
Discharges for Alcohol Abuse.............       832      1,052       836       611       489       587       576
(Officer/Enlisted).......................   (3/829)  (5/1,047)   (3/833)   (1/610)   (2/487)   (0/587)   (0/576)
----------------------------------------------------------------------------------------------------------------


                                              DRUG ABUSE STATISTICS
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year--
                                    ----------------------------------------------------------------------------
                                        1991       1992       1993       1994       1995       1996       1997
----------------------------------------------------------------------------------------------------------------
Total Sample Tested................      1.40M      1.35M      1.22M      1.07M     992.8K     936.1K     446.5K
(Percent testing positive).........      (.64)      (.80)      (.84)      (.96)      (.76)      (.66)  \1\ (.84)
Discharges for Drug Abuse..........      2,221      3,350      2,971      2,491      2,216      1,982      1,972
(Officer/Enlisted).................  (6/2,215)  (2/3,348)  (2/2,969)  (1/2,490)  (0/2,216)  (0/1,982)  (0/1,972)
----------------------------------------------------------------------------------------------------------------
\1\ Through 2nd quarter.

                           divorce statistics
    Navy does not have sufficient historical data concerning personnel 
divorces to show a trend in the last 7 or 8 years. 1997 was the first 
year questions concerning divorce were included in our annual Navy-wide 
Personnel Survey. Divorce trends can be determined as data from future 
Navy-wide Personnel Surveys are collected.

             Coast Guard/Navy ship procurement commonality

    Senator Domenici. I have no further questions, Mr. 
Chairman.
    Senator Stevens. Thank you very much. Mr. Secretary, the 
Coast Guard has told us it wants to start a new long-range 
cutter in the year 2000, and it appears to us that there may be 
some commonality there between their program and your plans to 
start the DD-21 ship.
    Have you had any conversations with the Coast Guard to see 
if it is possible to combine those programs for the efficiency 
that might come from buying two vessels at the same time?
    Secretary Dalton. Mr. Chairman, I know that the Chief of 
Naval Operations has had some discussions with the Commandant 
of the Coast Guard, let me ask him to----
    Senator Stevens. Admiral Johnson.
    Admiral Johnson. Yes, sir; I am talking to Bob Kramek, and 
our staffs are engaged. We are looking at all kinds of options 
for commonality, as they go forward and we go forward. You are 
right on with the question and the issue.
    We need to do what makes sense for both of us. We are 
doing--incidentally, at this moment, we have just, in kind of a 
test case, turned one of our PC's over to the Coast Guard for 
them to evaluate for their use as well. We have a lot of 
interchange going on, and specific to DD-21, the answer is yes.
    Senator Stevens. Before he left Senator Bumpers asked me to 
inquire from you about the reenlistment rate of naval pilots. 
In past discussions we have now learned that the Air Force will 
cap their deployments in 45 days in the Iraq area because 
patrolling that no-fly zone is diminishing critical pilot 
skills for combat.
    Could you tell us how you are going to handle your 
deployments there and what has been your recent reenlistment 
rate?
    Admiral Johnson. Our deployments are fine, Mr. Chairman, in 
the context of the pilots, and the flight time, and the 
training. Because we are rotational we set a 6-month portal-to-
portal limit on our deployments, a 2-to-1 turnaround ratio, 
minimum, and what we call a 50-percent home tempo, cast 2 years 
forward and 3 years back by the schedule. Those are the matrix 
by which we build the plans to deploy.
    Everything we are doing today and out forward, whether it 
is two carrier battle groups in the Arabian Gulf, or wherever 
they are, the plans contain that matrix. The specific concern 
about the pilot retention is really a multifaceted reality, is 
probably the best way to say it. I am very concerned about the 
retention of our pilots. I do not believe that it is 
specifically tied to that deployment scheme. I believe that the 
most significant impacts come on, as I said earlier, not to 
pilots, but it relates directly to pilots, the nondeployed side 
of our lives.
    We have to give them airplanes to fly. We have to give them 
the training throughout the turnaround. We have to compensate 
them, we have to care about them, and they will stay on the 
team, and we are executing a multipronged attack to deal with 
the pilot retention challenge right now.
    Senator Stevens. Are the Navy pilots going to take up part 
of the no-fly pattern----
    Admiral Johnson. Indeed.
    Senator Stevens [continuing]. Flying those no-fly squares 
out there?
    Admiral Johnson. Indeed. We have been part and parcel of 
Operation Southern Watch in the no-fly zone since the 
beginning----

                            Pilot retention

    Senator Stevens. What has been your reenlistment record? 
The Air Force is somewhere between 29 and 33 percent.
    Admiral Johnson. Yes, sir; ours is actually in the low 
thirties right now. I would tell you that if you want to look 
at the bonus take rate this year, if you aggregate the numbers, 
required versus taking the bonus right now, we are sitting at 
59 percent, which you think, well, that sounds pretty good.
    The truth of it is, in selected communities we are down in 
single digits, and so I have serious concerns, but my pilot 
retention concern is one where I would say, today, my pilot 
retention is not as critical as Gen. Mike Ryan would tell you, 
but as I tell him, I am trying to draw lead on it, because in 2 
years, if I do not pay attention, and we do not do the things I 
am describing, we will be right where he is.
    Senator Stevens. I think that deployment, ready deployment, 
ought to be a good place to test that, and I would hope that 
you would monitor that.
    Admiral Johnson. Yes, sir, we do.
    Senator Stevens. I cannot think of a worst deterrent for a 
combat-trained pilot to send him or her out to fly 3 and 4 
hours in the morning and the afternoon on a square, I can tell 
you. A commuter assignment on a local airplane, I believe, 
would be more preferable than that to any pilot, in my opinion.
    Admiral Johnson. Yes, sir.
    Senator Stevens. At least keep track of it for us, will 
you?
    Admiral Johnson. Yes, sir, Mr. Chairman. I would only add 
to you, sir, that we do have what I would consider a very good 
training and operational skill program that we execute in the 
gulf.
    General Krulak. I would also mention, sir, that we are out 
there flying, too, having the same issues facing us. We fly the 
same squares.

                                  V-22

    Senator Stevens. I think it is going to impact us all. 
These are definite deployments in such an environment.
    General, I want to chat with you a minute about the V-22. I 
notice that Senator Cochran has a couple more questions. I am 
told that the V-22 is now exceeding its maintenance goal by a 
factor of 200 percent, but we do have some problems about a 
cost overrun on the V-22.
    Are you up to speed about the problems that the Marine 
Corps is encountering with the V-22, and can you give us any 
indication of what the program unit cost would be as a result 
of these problems?
    General Krulak. Well, first off, I would say that we really 
are not experiencing anything that I would term a major 
problem. We are right now, with the engineering manufacturing 
development [EMD] models, over 300 hours of test flights on the 
overall program, over almost 1,200 hours.
    It has met for the first time its speed requirements, its 
max speed, it is doing well within the parameters. It has met 
or exceeded all the key performance parameters that we have 
established for it.
    The issue that has come up that has caused a little 
consternation is a bearing problem that burned out on one of 
the test flights that caused us to look very hard at that, slow 
down, our test program for about 1 month, as we investigated 
what caused that to happen, and what would be a solution.
    We found out the cause, and, in fact, we have solved it, 
but that put the testing back slightly. Obviously, when you 
have something like that the cost of the test program goes up a 
little bit.
    We see none of those impacting on the entry of that system 
into the fleet, nor do they have a major impact on the overall 
cost of the aircraft. As a matter of fact, in June 1999, the 
Marine Corps will be standing up its training squadron for the 
V-22.
    I mean we used to talk about, well, the V-22 is years and 
years away, we are going to stand up the first training 
squadron in June 1999.
    So this aircraft is coming, it may not be coming as fast as 
we would all like it to come, but it is going to be here, and 
when it gets here, it is going to change not only the 
operational capability of all Armed Forces, there will be 
strategic implications with this system.
    Senator Stevens. I have been told that because of a series 
of critical problems that we are into a period of forced 
redesign portions of the V-22. I am pleased to hear what you 
are saying about standing up the squadron, but can we do that 
with the rotor problems, and the problems of the bearing, and 
the nose gear, and the----
    General Krulak. Absolutely. The vast majority of those are 
already fixed. Like I said, the bearing has been solved, the 
nose gear is a minor fix. As we talk about any aircraft, as you 
go through the EMD, that is what it is for, to test the 
aircraft, find out what is not operating the way you want it to 
operate, and fix it.
    There is nothing in this program that is causing me any 
concern. I am very excited about where we are going.
    Senator Stevens. None of them are safety related yet.
    General Krulak. No, sir; the issue of the bearing obviously 
caught our attention. We stopped flying in the parameter that 
that bearing failed on, we brought in the experts, they have 
come up with a fix, and we are back to flying at Pax River, and 
as a matter of fact, this last month got 50 hours in, which is 
pretty doggone good for a test in 1 month.
    Senator Stevens. I am sure you remember the history of that 
plane in this committee. I want to make certain that it 
follows----
    General Krulak. Sir, I absolutely remember that, and I can 
tell you, if anything came up that I was concerned with, I 
would be in front of this committee immediately.
    Senator Stevens. Let me shift back to you, Mr. Secretary. 
What about the year 2000 computer programming crisis that is 
affecting the Department, is that a serious problem for your 
Department and the Department of the Navy?
    Secretary Dalton. Mr. Chairman, we are taking this problem 
very seriously. It impacts potentially every ship, submarine, 
aircraft, and shore installation in the Navy Department, as 
well as all of our supporting infrastructure. We are committed 
to preventing any year 2000 failures within naval units and 
facilities, and we have prioritized our funds to address 
accelerated resolution of any problems. We have established the 
target date of this summer, June 30, for completing the fixes.
    I get quarterly reports on that, my next quarterly report 
for this quarter, as a matter of fact, is next week. I will see 
just how well we are doing with it. It also has the attention 
of Secretary Cohen, and he is asking for periodic reviews.
    It is simply imperative that we address it, and that we 
resolve each of the problems within commands through the Navy 
Department to ensure that our critical warfighting and 
warfighting support capabilities all remain intact.
    If we did not get this problem solved, clearly it would be 
a problem, a significant problem for the Department. So we are 
addressing it and are committed to it. We recognize the 
importance of it.

                               Adak reuse

    Senator Stevens. I am going to submit the rest of the 
questions, but I want to ask one question concerning my State, 
and that is the Adak series of questions that Senator 
Murkowski's legislation will deal with a permanent solution for 
Adak, we hope will be signed this year, but there is no 
guarantee that will take place, and I know that you have been 
reluctant to work out an interim leasing arrangement.
    People are going to take over that island, they have 
visited us now, and I think that we have informed the Navy, 
they have a substantial number of entities that wish to start 
leasing portions of that base, as it is going to be turned over 
to them, but some of the issues are perplexing out of your 
people.
    One of them is that the Navy wishes to approve every 
visitor that comes to Adak, and second, that the Navy does not 
want to have families relocated to the portion of the former 
base that the Aleut people will take over under a temporary 
arrangement. Can you give us any idea of what the situation is 
going to be?
    I was personally visited by some of the Russian people who 
intend to lease a portion of that for their water fleet, which 
does not fish in our waters, but is closer to their fishing 
grounds than their own home ports.
    I think it is essential for us to move forward and see if 
we can utilize those facilities, if they are not occupied by 
families, they are going to have to be heated anyway, and it is 
a critical situation.
    Can you give us just a minute or two, Mr. Secretary, what 
is the situation at Adak?
    Secretary Dalton. Yes, sir; we have a proposed interim 
lease for the Navy facilities on Adak that we have been 
negotiating, I think, since the middle of February. This lease 
extends through the end of the year, December 31, 1998. After 
that, the military purpose ceases. Because the Navy will 
substantially conclude its environmental remediation by the end 
of this year, after the first of next year, the Interior 
Department assumes responsibility for the property, and would 
lease it to the Aleuts.
    We support Senator Murkowski's proposed legislation, which 
will be the subject of a hearing, I think, before this 
committee this month. I think that legislation will transfer 
the property to the Aleut nations, and it would be done by the 
Interior Department.
    Admiral Johnson. Sir, I really have nothing to add, except 
to say that we are going to be as supportive as we can possibly 
be to work this out, because I think it is in everyone's best 
interest to do so here in the short term.
    Senator Stevens. Yes, sir; well, we appreciate what you can 
do, I think it is a marvelous opportunity for these people, who 
have had really no basic commercial base before, to be able to 
utilize all those facilities. Senator Cochran.

                Navy theaterwide missile defense program

    Senator Cochran. Mr. Chairman, I know that Admiral Johnson 
has already answered a couple of questions about the Navy 
theaterwide missile defense program. Some recent reports, 
though, indicate that in the Pentagon there may be some who 
think that fielding both theater high altitude defense [THAAD] 
and the Navy theaterwide program will be unaffordable through 
2005.
    Is it not correct that these two systems complement each 
other, and that from an operational military perspective, the 
question of THAAD and Navy theaterwide is not an either/or 
proposition?
    Admiral Johnson. My answer to that, Senator Cochran, is 
yes, I believe them to be complementary systems, and you know 
my enthusiasm for Navy theaterwide. I am not as conversant on 
THAAD, but I am very encouraged, I will tell you, by the 
cooperation.
    In fact, I just spent 1\1/2\ hours with Admiral West, the 
Deputy at BMDO last week, talking about these issues, so I am 
encouraged by the way we are working together on this thing, 
and I am very anxious to get our system integrated.
    Senator Cochran. Last year we added in this committee $10 
million to enhance the cooperative engagement capability [CEC] 
program by putting communications equipment on satellites.
    Do you agree that by giving this additional capability to 
CEC that we will improve the military benefits of our sea-based 
missile defense capability?
    Admiral Johnson. My specific answer would probably be best 
coming for the record, sir. My anecdotal answer would be yes, 
but let me get it for the record.
    Senator Cochran. If you could, and identify the benefits of 
CEC for cruise and ballistic missile defense.
    [The information follows:]

    The Cooperative Engagement Capability (CEC) is a sensor 
netting system that can provide air defense systems with fire-
control quality track information that can greatly enhance the 
sea-based missile defense capability. Navy priorities are to 
ensure the successful integration of CEC with surface ships and 
air-based sensors followed by the fielding of CEC on surface 
combatants, aircraft carriers, and amphibious ships. Funding is 
focused on achieving these goals.
    Although the Navy has no current requirement for satellite 
range extension of CEC, the Navy has used past Congressional 
funding to evaluate existing and planned space-based sensors 
for potential integration with CEC. We've found that 
integration of CEC with SBIRS-Low provides the highest 
potential for military utility and have consequently invested 
$3.7 million of the $10 million of fiscal year 1998 
Congressional funding to develop the engineering requirements 
for the integration of CEC with SBIRS-Low. Our studies also 
recommend Milstar MDR and Advanced EHF be explored as CEC 
relays. Although we are interested in pursuing this, the 
integration of CEC with ships and aircraft is the first step 
and has much higher priority. We need to spend the remainder of 
the Congressional funds to ensure that these near-term 
priorities of the CEC program are met.

    Admiral Johnson. CEC is fundamental; it is fundamental to 
our theater and area systems. That is part of why we are 
embedding CEC into the entire aegis fleet, forward fit and back 
fit, so that we will be able to capitalize, if you will, and 
take advantage when the theater and area systems come to us. It 
is fundamental to that.
    Senator Cochran. My final question on the subject of sea-
based missile defense has to do with the fact that some of our 
Spruance, well, all of the Arleigh Burke-class destroyers are 
equipped with vertical launch systems, some other ships are as 
well, including cruisers, are provided adequate support from 
sensors, and a fast interceptor missile.
    Is there any technical reason that we could not make use of 
these existing assets to provide national ballistic missile 
defense?
    Admiral Johnson. You just tripped past this fighter pilot's 
base of knowledge on that, and I would be happy to provide that 
for the record.
    Senator Cochran. That would be good. And we would also ask 
if you could point out for the record any technical or 
operational advantages for such an approach to national missile 
defense.
    Admiral Johnson. Aye, aye, sir.
    Senator Cochran. I have another question or two that I 
would like to submit to the Secretary as well, Mr. Chairman.
    Senator Stevens. Yes, sir, Senator. Thank you.
    [The information follows:]

    The Navy does not currently have a National Missile Defense 
(NMD) mission and consequently has no NMD program. The Navy's 
ballistic missile defense developments focus on the Navy Area 
TBMD and Navy Theater-wide TBMD (NTW) programs and are 
consistent with the Ballistic Missile Defense Organization's 
objectives. Both programs have been recently determined to be 
ABM Treaty compliant.
    As you know, the current ABM Treaty permits limited 
capability for defense of a single U.S. missile field but 
prohibits the use of mobile land-based, air-based, sea-based 
and space-based systems in an NMD role. For discussion 
purposes, what follows assumes that use of sea-based systems 
would be permitted at some future time.
    You asked, given sensor support and a fast interceptor 
missile, whether there is any technical reason that we could 
not make use of existing Spruance and Arleigh Burke-class ships 
for NMD. We believe that the ships you mention, indeed all our 
ships equipped with the Vertical Launching System, could 
feasibly be upgraded as you suggest. We have not examined this 
in depth or conducted an engineering analysis, however, and 
would have to do so to give you a firm answer and provide any 
estimates of cost. However, if given an NMD mission, our 
initial approach would be to modify our existing Aegis Cruisers 
to provide such a capability. The 22 VLS equipped cruisers 
would provide a sufficient force structure to deploy our 
initial capability.
    As to the broader question of whether there are technical 
or operational advantages to equipping some of our ships to 
provide NMD, I believe there are enough indications that 
advantages exist to warrant a thorough examination.
    As you know, BMDO is tasked by the fiscal year 1998 Defense 
Authorization Conference Committee to report its assessment of: 
the potential to upgrade the Navy's upper-tier program into a 
limited NMD capability; the technical feasibility of upgrades 
and integration on sea-based systems into land-based NMD; the 
additional benefits and costs of doing so; and the status of 
ABM Treaty compliance of a sea-based capability.
    In view of BMDO's effort and as the Navy staff has not yet 
conducted an in-depth engineering analysis, I defer my response 
on technical and operational advantages of a Navy NMD role 
until after Lt Gen Lyles delivers his report to Congress on 
April 15, 1998. After that, I would be pleased to provide a 
briefing to the Committee to go over this issue in more detail.

                        Retention--exit surveys

    Senator Stevens. Senator Domenici.
    Senator Domenici. Mr. Chairman, I am not sure that the 
Defense Department, including the three gentlemen before us, 
are capable of giving us an analysis of why people are leaving 
the military, and I am not sure that they are capable of 
telling us why people do not leave the military.
    So I would just like to ask, is it correct that there are 
some surveys done by the Navy and the Marines when people leave 
the service as to why they are leaving, and is that totally 
confidential, and are those who give the answers, are they 
totally protected against what they say?
    Secretary Dalton. We certainly protect the privacy of the 
individual, Senator. However, as a matter of procedure, we have 
out calls with people when they leave the service. There they 
speak with their executive officer, or commanding officer, or 
leading division officer, in terms of assessing the person's 
plans for the future. The individual is asked about time aboard 
that ship or aboard that command, and in terms of assessing the 
reasons for the change in professional career plans.
    But we also have that information that we can provide to 
you for the record with respect to what the statistics are, and 
what we find are some of the reasons.
    [The information follows:]

    We collect information on Sailors' attitudes through our 
Retention/Separation Questionnaire, given to enlisted Sailors 
when they reenlist, extend or separate. Officers are asked to 
complete the questionnaire when they leave active duty or 
execute a permanent change of station move. Response to the 
questionnaire is voluntary. Sailors are asked to rate their 
satisfaction with 45 aspects of Navy life and to identify the 
most important reason for leaving or thinking of leaving the 
Navy. Officer and Enlisted ``Reasons for Leaving the Navy'' 
data for the fourth quarter of fiscal year 1997 are attached.

                        ALL OFFICERS REASONS FOR LEAVING THE NAVY, FISCAL YEAR 1997/QTR4
----------------------------------------------------------------------------------------------------------------
                                            FYTD              No.               Qtr1     Qtr2     Qtr3     Qtr4
               Description                  rank     Item    resp.     PCT      rank     rank     rank     rank
----------------------------------------------------------------------------------------------------------------
AMT OF FAMILY SEPARAT...................        1       37      368    17.53        1        1        1        1
PROM AND ADVANCE OPPORTUN...............        2       39      202     9.62        2        2        4        4
PAY (BASIC).............................        3       24      165     7.86        4        3        2        2
QUAL OF LEADERSHIP/MGMT.................        4        5      145     6.91        3        4       10        3
FAIRNESS IN PERFRM EVAL.................        5       45      110     5.24        6        5        5        7
ENJOYMENT FROM JOB......................        6        3       93     4.43        5        9        3        6
CONTROL OVER JOB ASGNMN.................        7       44       84     4.00        7        7        7        8
JOB FULFILLMENT/CHALLEN.................        8        2       78     3.72        9       11        6        5
NUM OF PCS RELOCATIONS..................        9       20       74     3.53       12        6       16       10
QUAL OF NAVY LIFE.......................       10       18       66     3.14       11       10       11        9
AMOUNT OF JOB SECURITY..................       11       31       64     3.05        8       12        9       11
RETIREMENT BENEFITS.....................       12       26       53     2.53       14        8       17       15
LENGTH OF WORKING HOURS.................       13        8       50     2.38       16       17       15       12
AMOUNT OF SEA DUTY......................       14       16       49     2.33       19       16        8       13
COMPETENCE OF SUPERVIS..................       15       12       48     2.29       10       15       14       14
GEOGRAPHIC LOC OF JOBS..................       16        9       37     1.76       17       18       23       16
RECOG FOR ACCOMPLISH....................       17        7       36     1.72       13       14       22       24
AMT PERS AVL TO DO JOB..................       18       11       36     1.72       18       13       25       19
SPECIAL PAYS (BONUS)....................       19       25       34     1.62       26       20       12       18
USE OF SKL/TRNG ON JOB..................       20       42       29     1.38       22       27       13       20
SPOUSE CAREER OPPORTUN..................       21       19       27     1.29       28       22       24       17
AMOUNT OF PAPERWORK.....................       22       10       26     1.24       31       19       20       21
RESPECT FROM SUPERIORS..................       23        1       25     1.19       15       25       18       29
QUAL AND AMOUNT EQUIP...................       24       14       22     1.05       24       21       27       25
QUAL OF FAM MED CARE....................       25       21       20      .95       25       26       29       26
AVL OF DEP MED/DEN CARE.................       26       38       20      .95       21       29       43       22
ASGN TO JOB W/TECH,PROF.................       27       41       20      .95       29       24       33       28
NUM OF QUICK RESP TASKS.................       28        6       18      .86       23       31       19       23
REGULATIONS AND DESCIPLIN...............       29        4       17      .81       20       28       21       31
COMPENS FOR PCS MOVES...................       30       30       15      .71       36       23       30       33
ASGNMNT TO LDRSHIP JOBS.................       31       43       13      .62       30       30       34       34
ACCESS TO EDUC/TRNG.....................       32       40       12      .57       37       35       32       27
LIVING COND SEA AND OSEA................       33       15       11      .52       27       33       35       30
QUAL OF GOVT HOUSING....................       34       17        7      .33       32       34       28       37
DEPENDENT FACIL/SCHOOLS.................       35       22        5      .24       34       41       36       32
MARRIED VS SINGLE PAY...................       36       28        5      .24       33       37       39       38
QUAL OF MED/DEN CARE....................       37       29        5      .24       35       32       40       41
COMPETENCE OF COWORKERS.................       38       13        4      .19       38       36       26       36
AVAIL OF HOUSING........................       39       35        4      .19       43       40       31       35
EDUCATION BENEFITS......................       40       27        1      .05       40       38       38       40
QUAL OF COMMISSARY/EXCH.................       41       32        1      .05       41       39       41       42
QUAL OF FAMILY SVC CEN..................       42       23  .......  .......       39       42       37       39
SUPPORT AND RECREAT SVCS................       43       33  .......  .......       42       43       42       43
                                         -----------------------------------------------------------------------
      TOTAL.............................  .......  .......    2,099   100.00  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------

    General Krulak. Sir, we do run exit surveys, we do not keep 
the answers confidential, because we use them to improve and 
attack the very issues that cause that male or female marine to 
decide to go someplace else or take another job, so we look at 
that very closely.
    The actual, whether or not we say who it came from, 
obviously, that is not what is important, what is important is 
what did they say, why are they leaving, and once we get that, 
we take steps to correct, if at all possible, the things that 
drove them out. Some of them cannot be corrected, others we 
believe can.
    Senator Domenici. Admiral, what do you say about that?
    Admiral Johnson. Very much the same as the Commandant, sir. 
We study and try to take action on separating priority 
criteria. It gets back to many things, there is no simple 
answer to it, as you well know, sir. It is a complex issue, 
with lots of moving parts, but some of it can be tied to family 
separation, some of it can be tied to compensation, some of it 
can be tied to Optempo, and so it goes.
    What we are trying to do inside the Navy is to square with 
ourselves, on the leadership side, on the empowerment side, 
within the chain of command, on the execution side, on the 
funding streams, to allow them to train and be ready, and be 
proud, and these are pretty fundamental to ensuring that we do 
not get into the real retention traps, so it is a very complex 
thing, but the specific answer to your question is, yes, we 
know why they leave, we know what the surveys say, and we take 
them very seriously.
    Senator Domenici. Are these surveys literally available?
    Admiral Johnson. Yes, sir.
    Senator Domenici. Are yours available?
    General Krulak. Yes, sir.
    Senator Domenici. Are they only of people as they exit? Do 
you do any surveys of the people who stay in uniform?
    Admiral Johnson. Yes, sir.
    Senator Domenici. You do.
    Admiral Johnson. We do that as well, but----
    Senator Domenici. Are those anonymous?
    Admiral Johnson. Yes, sir.
    Senator Domenici. Could we have samples of those 
questionnaires, for the record, of what you do in that regard, 
surveys, or whatever they are?
    Admiral Johnson. Absolutely. Yes, sir.
    Senator Domenici. Could you tell us how they are analyzed, 
and who analyzes them?
    General Krulak. You bet.
    Admiral Johnson. Yes, sir.
    [The information follows:]

    The Marine Corps has recently developed a survey to measure the 
opinions of both groups--those leaving the Corps as well as those who 
choose to stay. ``The Marine Corps Climate Battery Surveys'' include a 
variety of questions concerning retention and separation. Questions 
include both traditional personnel issues (such as pay, benefits, 
quality of life, harassment, and discrimination) and elements key to 
the business of the Marine Corps (leadership, training, and readiness). 
We will be able to use the information from this survey--the design of 
which was completed by the Center for Naval Analyses in November 1997--
to help answer the following questions:
    Do Marines' opinions square with their behavior? Is there a 
relationship between the stay/leave decision and the reasons cited for 
each type of decision?
    Are leavers more dissatisfied than stayers are? If so, on what 
aspect of Marine Corps life do leavers and stayers have significantly 
different opinions?
    These surveys will be analyzed for trends (both good and bad) that 
provide an opportunity for the Corps to take corrective (or 
reinforcing) action. The analysis will be done by our Manpower 
Analysis, Evaluation, and Coordination Branch at Headquarters, Marine 
Corps.
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    Senator Domenici. Now, I want you to know, and none of this 
is directed at any of you, or anybody in the hierarchy, in 
terms of any accusations, it is just that we still read a lot 
of things, and sometimes what is written is not very authentic, 
or it is very small, but we read in various military papers, 
other newspapers that cover the military, that there are a lot 
of complaints that have to do with leadership within the 
military by those who fly airplanes, by those who are leaving. 
That is hard stuff for those who are leaders to hear, and it is 
certainly hard to do anything about it.
    I trust you implicitly that you would be interested in 
them, knowing what they think about you, you and those under 
you, and that you would try to do something about it. I know in 
the military somebody gives orders and somebody takes orders, 
and I understand that. You cannot have a military without that.
    So I would like you to give us for the record everything 
you do in an effort to find out what those people leaving think 
has gone wrong, and whatever you do to those that are not 
exiting, find out what is wrong that you might have to fix. If 
you can give us that for the record, that would be very 
appreciated by this Senator.
    Admiral Johnson. I will be glad to.
    [The information follows:]

    The annual Navy-wide Personnel Survey and Quality of Life Survey 
were designed to collect opinion data on a systematic basis and to 
provide timely information on issues of importance to policy makers. 
The samplings, representative of the entire Navy population, allow the 
identification and analysis of trends in opinions and attitudes toward 
plans, programs, and policies that materially affect the performance 
and morale of Navy Personnel. Both surveys are administered and 
analyzed by the Navy Personnel Research and Development Center in San 
Diego, California. Copies of the 1997 Navy-wide Personnel Survey and 
1997 Quality of Life Survey are provided for the record.
    We also collect information on Sailors' attitudes through our 
Retention/Separation Questionnaire, given to enlisted Sailors when they 
reenlist, extend or separate. Officers are asked to complete the 
questionnaire when they leave active duty or execute a permanent change 
of station move. Response to the questionnaire is voluntary. Sailors 
are asked to rate their satisfaction with 45 aspects of Navy life and 
to identify the most important reason for leaving or thinking of 
leaving the Navy. A copy of the Navy Retention/Separation Questionnaire 
and OPNAV Instruction are provided for the record. Officer and Enlisted 
``Reasons for Leaving the Navy'' data for the fourth quarter of fiscal 
year 1997 are also attached.
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                        ALL OFFICERS REASONS FOR LEAVING THE NAVY, FISCAL YEAR 1997/QTR4
----------------------------------------------------------------------------------------------------------------
                                            FYTD              No.               Qtr1     Qtr2     Qtr3     Qtr4
               Description                  rank     Item    resp.     PCT      rank     rank     rank     rank
----------------------------------------------------------------------------------------------------------------
AMT OF FAMILY SEPARAT...................        1       37      368    17.53        1        1        1        1
PROM AND ADVANCE OPPORTUN...............        2       39      202     9.62        2        2        4        4
PAY (BASIC).............................        3       24      165     7.86        4        3        2        2
QUAL OF LEADERSHIP/MGMT.................        4        5      145     6.91        3        4       10        3
FAIRNESS IN PERFRM EVAL.................        5       45      110     5.24        6        5        5        7
ENJOYMENT FROM JOB......................        6        3       93     4.43        5        9        3        6
CONTROL OVER JOB ASGNMN.................        7       44       84     4.00        7        7        7        8
JOB FULFILLMENT/CHALLEN.................        8        2       78     3.72        9       11        6        5
NUM OF PCS RELOCATIONS..................        9       20       74     3.53       12        6       16       10
QUAL OF NAVY LIFE.......................       10       18       66     3.14       11       10       11        9
AMOUNT OF JOB SECURITY..................       11       31       64     3.05        8       12        9       11
RETIREMENT BENEFITS.....................       12       26       53     2.53       14        8       17       15
LENGTH OF WORKING HOURS.................       13        8       50     2.38       16       17       15       12
AMOUNT OF SEA DUTY......................       14       16       49     2.33       19       16        8       13
COMPETENCE OF SUPERVIS..................       15       12       48     2.29       10       15       14       14
GEOGRAPHIC LOC OF JOBS..................       16        9       37     1.76       17       18       23       16
RECOG FOR ACCOMPLISH....................       17        7       36     1.72       13       14       22       24
AMT PERS AVL TO DO JOB..................       18       11       36     1.72       18       13       25       19
SPECIAL PAYS (BONUS)....................       19       25       34     1.62       26       20       12       18
USE OF SKL/TRNG ON JOB..................       20       42       29     1.38       22       27       13       20
SPOUSE CAREER OPPORTUN..................       21       19       27     1.29       28       22       24       17
AMOUNT OF PAPERWORK.....................       22       10       26     1.24       31       19       20       21
RESPECT FROM SUPERIORS..................       23        1       25     1.19       15       25       18       29
QUAL AND AMOUNT EQUIP...................       24       14       22     1.05       24       21       27       25
QUAL OF FAM MED CARE....................       25       21       20      .95       25       26       29       26
AVL OF DEP MED/DEN CARE.................       26       38       20      .95       21       29       43       22
ASGN TO JOB W/TECH,PROF.................       27       41       20      .95       29       24       33       28
NUM OF QUICK RESP TASKS.................       28        6       18      .86       23       31       19       23
REGULATIONS AND DESCIPLIN...............       29        4       17      .81       20       28       21       31
COMPENS FOR PCS MOVES...................       30       30       15      .71       36       23       30       33
ASGNMNT TO LDRSHIP JOBS.................       31       43       13      .62       30       30       34       34
ACCESS TO EDUC/TRNG.....................       32       40       12      .57       37       35       32       27
LIVING COND SEA AND OSEA................       33       15       11      .52       27       33       35       30
QUAL OF GOVT HOUSING....................       34       17        7      .33       32       34       28       37
DEPENDENT FACIL/SCHOOLS.................       35       22        5      .24       34       41       36       32
MARRIED VS SINGLE PAY...................       36       28        5      .24       33       37       39       38
QUAL OF MED/DEN CARE....................       37       29        5      .24       35       32       40       41
COMPETENCE OF COWORKERS.................       38       13        4      .19       38       36       26       36
AVAIL OF HOUSING........................       39       35        4      .19       43       40       31       35
EDUCATION BENEFITS......................       40       27        1      .05       40       38       38       40
QUAL OF COMMISSARY/EXCH.................       41       32        1      .05       41       39       41       42
QUAL OF FAMILY SVC CEN..................       42       23  .......  .......       39       42       37       39
SUPPORT AND RECREAT SVCS................       43       33  .......  .......       42       43       42       43
                                         -----------------------------------------------------------------------
      TOTAL.............................  .......  .......    2,099   100.00  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------


                        ALL ENLISTED REASONS FOR LEAVING THE NAVY, FISCAL YEAR 1997/QTR4
----------------------------------------------------------------------------------------------------------------
                                            FYTD              No.               Qtr1     Qtr2     Qtr3     Qtr4
               Description                  rank     Item    resp.     PCT      rank     rank     rank     rank
----------------------------------------------------------------------------------------------------------------
PROM AND ADVANCE OPPORTUN...............        1       39    1,547    11.11        1        2        3        1
AMT OF FAMILY SEPARAT...................        2       37    1,525    10.95        2        1        2        2
PAY (BASIC).............................        3       24    1,474    10.58        3        3        1        3
QUAL OF LEADERSHIP/MGMT.................        4        5    1,113     7.99        4        4        5        4
QUAL OF NAVY LIFE.......................        5       18      927     6.66        5        5        4        5
FAIRNESS IN PERFRM EVAL.................        6       45      688     4.94        8        6        8        6
ENJOYMENT FROM JOB......................        7        3      643     4.62        7        7        7        7
RESPECT FROM SUPERIORS..................        8        1      591     4.24       10        8        6        8
AMOUNT OF SEA DUTY......................        9       16      585     4.20        6        9        9        9
RECOG FOR ACCOMPLISH....................       10        7      501     3.60        9       11       10       11
COMPETENCE OF SUPERVIS..................       11       12      477     3.43       11       10       11       12
RETIREMENT BENEFITS.....................       12       26      451     3.24       12       13       12       10
JOB FULFILLMENT/CHALLEN.................       13        2      366     2.63       13       12       14       13
LIVING COND SEA AND OSEA................       14       15      270     1.94       17       16       13       14
GEOGRAPHIC LOC OF JOBS..................       15        9      259     1.86       14       14       17       16
REGULATIONS AND DESCIPLIN...............       16        4      251     1.80       15       15       15       15
AMT PERS AVL TO DO JOB..................       17       11      190     1.36       16       18       18       17
LENGTH OF WORKING HOURS.................       18        8      174     1.25       20       20       16       19
MARRIED VS SINGLE PAY...................       19       28      169     1.21       19       17       22       21
CONTROL OVER JOB ASGNMN.................       20       44      150     1.08       22       24       19       18
ACCESS TO EDUC/TRNG.....................       21       40      141     1.01       21       19       28       22
USE OF SKL/TRNG ON JOB..................       22       42      134      .96       18       21       21       24
COMPETENCE OF COWORKERS.................       23       13      125      .90       26       27       20       20
ASGN TO JOB W/TECH,PROF.................       24       41      119      .85       27       22       23       23
NUM OF PCS RELOCATIONS..................       25       20      106      .76       23       23       24       25
QUAL OF MED/DEN CARE....................       26       29       91      .65       24       26       31       28
AMOUNT OF JOB SECURITY..................       27       31       82      .59       31       28       25       30
SPECIAL PAYS (BONUS)....................       28       25       81      .58       30       25       30       32
QUAL OF FAM MED CARE....................       29       21       80      .57       28       30       29       27
QUAL AND AMOUNT EQUIP...................       30       14       75      .54       32       29       27       29
AVL OF DEP MED/DEN CARE.................       31       38       74      .53       25       33       32       31
EDUCATION BENEFITS......................       32       27       71      .51       41       32       26       26
AMOUNT OF PAPERWORK.....................       33       10       53      .38       29       35       33       36
DEPENDENT FACIL/SCHOOLS.................       34       22       49      .35       36       31       39       35
SPOUSE CAREER OPPORTUN..................       35       19       47      .34       35       34       35       34
QUAL OF FAMILY SVC CEN..................       36       23       43      .31       39       37       36       33
AVAIL OF HOUSING........................       37       35       39      .28       42       36       37       37
NUM OF QUICK RESP TASKS.................       38        6       37      .27       34       38       34       39
QUAL OF GOVT HOUSING....................       39       17       33      .24       33       39       38       40
SUPPORT AND RECREAT SVCS................       40       33       34      .24       38       40       41       38
ASGNMNT TO LDRSHIP JOBS.................       41       43       27      .19       40       41       40       41
QUAL OF COMMISSARY/EXCH.................       42       32       18      .13       37       43       42       43
COMPENS FOR PCS MOVES...................       43       30       17      .12       43       42       43       42
                                         -----------------------------------------------------------------------
      TOTAL.............................  .......  .......   13,927   100.00  .......  .......  .......  .......
----------------------------------------------------------------------------------------------------------------

    The perception of Marine Corps leadership is an important aspect of 
the Climate Battery Surveys. The very first question asks ``What is the 
main reason you have decided to stay on (or separate from) active duty 
Marine Corps service? Rather than just choose from among distractors, 
Marines have the opportunity to provide their own words in this answer.
    Further along in the survey are questions such as ``How satisfied 
are you with the quality of leadership in the Marine Corps?;'' 
questions about chain of command responsiveness; the character of 
leaders; and even the dreaded ``zero-defect mentality.'' The reason for 
these straight-forward questions about Marine Corps leadership is to 
identify shortcomings, both real and perceived, that separating Marines 
see in those of us privileged to lead the Corps.

                      increased Operational tempo

    Senator Stevens. Secretary Dalton, Admiral Johnson, and 
General Krulak, we appreciate your visit with us here today, 
and we are committed to do our best to help you.
    With regard to Senator Domenici's questions, I do not think 
it takes a rocket scientist, Senator, to understand the 
difference in deployment today, as compared to even 10 years 
ago. It is just overwhelming.
    And the tasks that we have assigned to military and 
peacekeeping are probably the most boring, mundane tasks that a 
military person in uniform has ever been asked to take on, and 
they just seem to go on, and on, and on, and on.
    I think those deployments are having an impact on the 
morale and really the retention of our armed services, and some 
of us would like to have some way to change that. But in the 
current situation of the world, it does not seem possible.
    But I do agree with Senator Domenici: We ought to do our 
best to try to analyze that and see if there is anything that 
Congress might do to help meet some of the forces of these 
people who have been highly trained at a great expense for the 
taxpayers, some of the things that cause them not to reenlist.
    It is the reenlistment rate that really has raised a lot of 
questions from both sides of the aisle here, and I have had 
many questions from other Senators just this last week, since 
we got that amazing statistic from the Air Force, and yours, 
Admiral, is not much better. Do you have a----
    General Krulak. Sir, we have a pilot retention problem, but 
I think that Senator Bond hit the nail on the head, it has 
nothing to do, well, minimal to do with money.
    There are so many things that are involved here, we almost 
insult them when we say, ``Hey, here, have some more money.''
    It has to do with the issue of leadership, it has to do 
with the issue of challenge, it has to do with the issue of 
coming back home, and when they do, that they get flight hours, 
and that the flight hours they get are meaningful, and they are 
sweating under their arms when they come back off the training 
op, that is what they come in for.
    If you do not give them that, and somebody else offers them 
a big check in 15 days of work a month, and the rest they can 
be with their families, they are going to take that. So it is 
more than just what is going on out in the far reaches, it is 
what we are doing back here that counts.
    Senator Domenici. But, Mr. Chairman, in general, we really 
know we cannot keep robbing from the Defense Department to pay 
for emergencies. One-half the things you mentioned are because 
of that.
    Senator Stevens. Absolutely, sir.
    Senator Domenici. You come home and the equipment is not 
what it ought to be, because you have not been maintaining the 
equipment, because the budget did not provide it, and you are 
taking care of it over there in an emergency situation.
    Senator Stevens. You would not find a service chief that 
would not stand on this table and beat on it and say amen to 
what you just said.
    Senator Domenici. Well, we are going to try to do something 
about it, if we have to put more money in, we are going to put 
it in, I mean I am----

                     Additional committee questions

    Senator Stevens. Well, we have to find some more money, we 
will take that trip and see if we can get some help on this 
current deployment. Thank you, gentlemen, very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted to Hon. John H. Dalton
               Questions Submitted by Senator Ted Stevens
                                  cvx
    Question. Why does the Navy need a new class of aircraft carriers? 
Do you intend to evolve the current (Nimitz) design or will it be a 
totally new design?
    Answer. The Navy's vision for CVX is to develop a new class of 
aircraft carriers to significantly reduce total ownership cost and 
incorporate an architecture for change and flexibility, while 
maintaining the core capabilities of Naval aviation (high-volume 
firepower, survivability, sustainability and mobility) for the 21st 
Century and beyond. Achieving this vision will require significant 
design changes to incorporate advances in technology and to focus the 
design on enhanced affordability since little carrier research and 
development has been undertaken since the 1960's.
    The Navy is currently analyzing several alternative designs for 
CVX. These alternative designs run the gamut from an evolution of the 
current Nimitz design to a totally new design which includes a new 
hull, new propulsion plant, new communications suite, new distributive 
systems, new functional arrangements and significant improvements in 
ship survivability and signature management.
                         status of a-12 lawsuit
    Question. What can you tell us about the status of the A-12 lawsuit 
and the Navy plans to proceed in its defense? If the verdict is upheld 
on appeal, would the Navy be liable for the $1.8 billion cost or would 
the cost be apportioned DOD-wide? What would be the effect on the Navy 
modernization accounts?
    Answer. On February 23, 1998, the Court of Federal Claims entered a 
judgment against the United States for over $3.8 billion plus interest. 
The amount is erroneous because it fails to reflect $2.6 billion in 
progress payments already paid to the contractors. The Government's 
initial appeal, filed contemporaneously with the judgment, was 
dismissed on March 19, 1998. The dismissal provides an opportunity to 
correct the judgment in the trial court. A new appeal will be filed 
after the correction of the judgment, which we believe will occur very 
soon.
    No payment of any amount will be paid until all appeals have been 
exhausted. If and when a judgment in some amount becomes final, payment 
will be made by the Treasury from the Judgment Fund. How and when the 
Department of Defense may reimburse the Judgment Fund would be 
determined at that time.
    At this time it is impossible to predict any effect on Navy 
modernization accounts.
                               f/a-18e/f
    Question. How much of a delay has the Navy experienced at this 
point in the F/A-18E/F production program?
    Answer. None. The F/A-18E/F is on production schedule. The first 
twelve Low Rate Initial Production (LRIP) aircraft are on schedule for 
delivery starting in January 1999. They will be delivered with the 
porous wing fold fairing, the correction for wing drop, incorporated.
                     per user fee contract strategy
    Question. The Department of the Navy/Fleet and Industrial Supply 
Center procured personal computer software using a new ``Per User Fee'' 
contracting and saved $48 million. In addition to saving money, the new 
strategy eased software installation and reduced security risks 
associated with the installation. Does the Department intend to use 
this innovative approach on other contracts? Can it be expanded to 
other Departments?
    Answer. The Department of the Navy is enthusiastic about innovative 
licensing of software in various forms and intends to pursue 
alternatives vigorously as guided by pioneering experiences such as 
that undertaken by the Fleet and Industrial Supply Center Philadelphia/
Defense Logistics Agency team. These approaches hold great promise 
throughout the Federal Government.
                                 ______
                                 
               Question Submitted by Senator Thad Cochran
                           apl barracks barge
    Question. It is my understanding that the Navy is currently in the 
process of soliciting bids for the acquisition of two APL barracks 
barges; $33 million has been appropriated for this acquisition.
    Based on the bids which have been received, is this funding 
sufficient to acquire both barges? If not, how does the Navy plan to 
fund this requirement?
    Answer. The Navy is soliciting bids for the acquisition of two APL 
barracks barges. Bids are due March 17, 1998. Bid packages will be 
reviewed after the bid date to determine adequacy of funds. If funding 
is insufficient, appropriate action will be taken based upon degree and 
probable cause of the higher than expected bid amounts.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                             privatization
    Question. How did the Navy and the Marine Corps arrive at the 
number of civilian and military jobs to be eliminated and/or contracted 
out?
    Were specific, individual studies performed to analyze the savings 
and appropriateness of activities to compete? Or, was a goal imposed 
``from the top?''
    How did the Navy/Marine Corps determine that contracting out saves 
20 percent? Why does the Air Force assume different savings? Please 
provide copies of the analysis you performed to come to the conclusion 
that 20 percent was the right number.
    Answer. The savings reflected in the Navy's FYDP are derived from 
our expectation that ``competition'' not ``contracting out'' will 
result in significant savings. This expectation is based on research 
and analysis performed by the Center for Naval Analysis (CNA). CNA 
reviewed our experience implementing OMB Circular A-76 in the 1980's 
and found that ``competition'', not ``contracting out'', resulted in 
cost savings of approximately 30 percent, regardless of the outcome of 
the cost comparison. As a matter of interest, approximately half of the 
functions studied remained in-house after the competition, albeit in a 
more streamlined, efficient organization. CNA also reviewed the Navy's 
inventory of commercial activities and determined that conducting cost 
comparisons of activities involving approximately 80,000 full-time 
equivalents would yield the kind of savings we have incorporated into 
the Navy's FYDP. The CNA analysis formed the basis for Navy's 
competition savings projections. I cannot address the Air Force's 
savings assumptions, but I will be happy to provide you with a copy of 
CNA's analysis under separate cover that forms the basis of our 
estimate that competition yields average savings of 30 percent.
    Question. With fewer military personnel and DOD civilians after all 
this contracting out, what will be the impact on overseas rotation and 
``perstempo'' problems?
    Answer. I need to reiterate that we are interested in increasing 
``competition'' not ``contracting out.'' Our policy provides a 
structured check and balance system between military manpower 
requirements and proposed shore infrastructure reductions for 
regionalization, outsourcing or privatization initiatives to ensure 
that our military readiness is not adversely affected. The need to 
maintain a sea-to-shore rotational base, along with the need to 
maintain certain critical skills, has indeed limited our ability to 
compete certain military-intensive functions. For this reason, the 
Navy's plan to achieve the savings reflected in this budget focuses on 
competing civilian-intensive functions.
    Question. How will the Navy and the Marine Corps monitor and 
document the progress in achieving your outsourcing programs and 
achieving the planned savings? How will these data be confirmed by an 
outside party?
    Answer. The Navy is conducting a ``competition'' program, not an 
``outsourcing'' program. The Navy generally relies upon the cost 
comparison process established by OMB Circular A-76 to ensure that our 
competitions result in the most cost effective outcome. Circular A-76 
not only provides rigorous guidelines for identifying the costs of both 
in-house and private sector performance but it also incorporates an 
independent review process and provides all affected parties with an 
independent appeal process. The independent reviews will be conducted 
by both independent contractors familiar with the commercial activity 
studies and by in-house Navy auditors. Actual savings of the 
competition will include both personnel and other operating costs. To 
monitor and document our progress in achieving the planned 
``competition'' savings, the Navy has established an annual reporting 
system. This system will track actual costs for five years subsequent 
to the implementation of the cost comparison decision. Savings 
conformance will be determined by an analysis of actual total operating 
costs against planned total operating costs. Based on our past 
experience, we expect actual costs to track well with the cost 
comparison estimates. In addition to review by the independent 
reviewing official, the appeals officer, and all other interested 
parties during the cost comparison phase, cost comparison data will be 
available for public scrutiny and external review by the Naval 
Inspector General, the Naval Audit Service, the DOD Inspector General, 
the General Accounting Office, and other interested parties.
    Question. What actions do you plan if the savings do not 
materialize as planned? More outsourcing? Cuts in procurement? Force 
structure? Readiness?
    Answer. Failure to achieve the projected savings would have a 
serious impact on the Navy's ability to fund the modernization program 
without taking vertical cuts that would jeopardize other existing 
requirements. For the Marine Corps, the effect of less than anticipated 
savings would be a decrease in procurement and an increase in Operation 
and Maintenance. To limit the risk of jeopardizing other requirements 
and to ensure we meet the savings projected in the FYDP, we are also 
aggressively pursuing related cost savings initiatives such as 
regionalization, privatization, community use and public-private 
ventures.
                               readiness
    Question. What do your latest, 1998, data show about pilot 
retention? Is it getting better or worse? Is it better or worse for 
married pilots? With families? What are the socio-economic profiles of 
the pilots leaving? Staying?
    Answer. The Navy's two primary predictors of pilot retention, 
resignations and Aviation Continuation Pay (ACP) take rates, 
demonstrate that pilot retention continues to be on the decline. Pilot 
resignations increased from 414 in fiscal year 1997 to 540 in fiscal 
year 1998, while fiscal year 1998 ACP take rates, as shown in Table 1, 
were much lower than required.

                                     TABLE 1.--FISCAL YEAR 1998 ACP PROGRAM
----------------------------------------------------------------------------------------------------------------
                                                      Aircraft    Bonus    Number    Number   Eligible   Percent
                Aviation subcommunity                   type     amount   required  eligible   applied   of goal
----------------------------------------------------------------------------------------------------------------
VFA Pilot...........................................    F/A-18   $17,000        23        81        11        48
VF Pilot............................................      F-14    17,000        13        62         4        31
VAQ Pilot...........................................     EA-6B    19,000        14        28         3        21
VS Pilot............................................       S-3    19,000        15        32         2        13
VAW/VRC Pilot.......................................   E-2/C-2    10,000        17        58         7        41
                                                     -----------------------------------------------------------
      Carrier Pilot Take Rate.......................  ........  ........        82       261        27        33
                                                     ===========================================================
VP Pilot............................................       P-3    10,000        46       200        44        96
                                                     -----------------------------------------------------------
      Prop Pilot Take Rate..........................  ........  ........        46       200        44        96
                                                     ===========================================================
      Pilot Take Rate...............................  ........  ........       128       461        71        55
----------------------------------------------------------------------------------------------------------------

    Thus far this year only 27 eligible carrier pilots (33 percent of 
the needed 82) applied for ACP agreements that obligated them through 
14 years of commissioned service. This take rate, lowest in program 
history, is a sound predictor that critical department head billets 
will not be filled since those that have not signed an agreement are 
free to leave the Navy. These two indicators of resignations and take 
rates together highlight a continued trend of low pilot retention. The 
Navy does not track retention by socio-economic profiles such as 
retention for those married or with families.
    For the Marine Corps, as of March 16, there have been 70 fixed wing 
pilot resignations in fiscal year 1998. These figures and the trend for 
the year are well below the fiscal year 1997 rate (92) and slightly 
higher than the fiscal year 1996 rate (69) as of March of each year.
    The Marine Corps does not track pilot resignations by single/
married/divorced categories. Current percentages of overall USMC 
Officers (O-3 and O-4) include the following: 80 percent Married, 4 
percent Divorced and 16 percent Single. There is no common thread to 
the socioeconomic profiles of the pilots leaving or staying. All pilots 
are now eligible for the Aviation Continuation Pay (ACP) program, 
making them the highest paid company/field grade (O-3 and O-4) officers 
in the Marine Corps.
    Question. What are the specific complaints of pilots leaving the 
Navy?
    Answer. Table 1 lists ``reasons for leaving'' as cited by Naval 
Aviators on fiscal year 1997 exit surveys. It is noteworthy that no 
requirement exists to complete an exit survey.



Table 1.--Reasons for Leaving the Navy Cited by Pilots in Fiscal Year 
1997 Exit Surveys

                                                                 Percent
        Reason for Leaving                                        Citing
Family Separation.................................................    20
Promotion Opportunity.............................................    14
Quality of Leadership.............................................    12

Amount of Sea Duty

                                                                       8

Note.--These results were compiled from 126 completed exit surveys: the 
number represents only 30 percent of the aviators who resigned in fiscal 
year 1997. Additionally, the CNO's Aviation Retention Team compiled the 
below list of reasons for resigning.
These anecdotal reasons were heard from direct discussions with the 
fleet during visits by the team to various aviation commands: Increased 
amount of family separation; Frustration with Navy leadership; High 
operational tempo; Inadequate funding to support operations; Erosion of 
compensation/benefits; Reduced promotion opportunity; and Inadequate 
infrastructure.

    In September 1997, a USMC Aviation sponsored briefing team, 
composed of junior field grade officers traveled to both coasts to 
visit ready rooms and talk to aviators about the facts and myths of a 
career as a Marine aviator. Aviators provided the team with frank 
discussion and openly voiced their concerns. There was no single reason 
that influenced an aviator's decision to resign. The major reasons 
cited to the briefing team for leaving the Corps included: Increased 
airline hiring; Increased amount of family separation; Desire to fly 
more hours (AV-8B and CH-53); Excessive time in Joint/Inter-/Intra-
service exercises which limit training for individual pilot skills; and 
Uncertainty about future military downsizing.
    Question. Which of your ``quality of life'' programs are working? 
Which are not? Which generate the best pay-off in terms of retention? 
Please provide the data and analysis to substantiate your answer, or 
are you using judgement or anecdotal evidence to assess the degrees of 
success or failure? Does the Navy have any studies on these issues? By 
independent organizations? Please provide copies.
    Answer. I've just received the results of the 1997 Navy Bureau of 
Naval Personnel (BUPERS) QOL survey that asked a representative sample 
of Sailors about their perceptions and use of 29 of our QOL programs. 
Their answers tell us that most of our QOL programs are working, in 
terms of both readiness and retention.
    When we asked members to rank those programs that they feel 
contribute the most to their readiness, officers cite as their top 
three: (1) Tuition Assistance (TA)--47 percent; (2) Morale, Welfare, 
and Recreation (MWR) Sports and Fitness Ashore--46 percent; and (3) MWR 
Recreational Activities Ashore--33 percent.
    The top three programs for maintaining readiness among enlisted 
are: (1) TA--60 percent; (2) Montgomery GI BILL (MGIB)--51 percent; and 
(3) MWR Recreational Activities Ashore--32 percent.
    Regardless of pay grade, MWR and Voluntary Education (VOLED) 
programs have the greatest impact on readiness.
    The most frequently used QOL programs were cited as MWR Recreation 
Activities Ashore (Officer--85 percent, Enlisted--85 percent), MWR 
Sports and Fitness Ashore (Officer--84 percent; Enlisted--85 percent), 
and Navy Campus Education Centers (Officer--37 percent; Enlisted--61 
percent). QOL programs with the highest quality ratings were: TA (78 
percent); MGIB (77 percent); and Navy Campus Education Centers (70 
percent). 25 of 29 QOL programs were rated ``good'' or ``very good'' by 
a majority of our Sailors.
    Out of 29 QOL programs that were rated, four did not receive a 
``good'' or ``very good'' assessment: (1) Spouse Employment Assistance 
(39 percent); (2) Single Sailor Program Ashore (42 percent); (3) Good 
Relationships, Strong Marriages, and Healthy Families (49 percent); and 
(4) Outreach and Command Representative Program (50 percent).
    These programs are relatively new, and many of our Sailors may not 
be as familiar with them as some of our more established efforts.
    Some programs haven't been well publicized. The least recognized 
programs among officers included the Chaplains Religious Enhancement 
Development Operation (CREDO) (15 percent), Relationships, Families, 
and Marriages (13 percent), and the Volunteer Program (12 percent), 
while enlisted reported less recognition for Academic Skills (26 
percent), CREDO (25 percent), Outreach/Command Representative Program 
(22 percent), and Single Sailor Ashore (20 percent).
    Sailors report that MWR and VOLED programs most significantly 
affect their retention decision. When asked, ``Would you reconsider 
your decision to remain in the Navy if programs were reduced or 
eliminated,'' officers listed TA, MGIB and MWR Sports/Fitness Ashore as 
the top 3 programs affecting their retention decision. Enlisted members 
listed TA, MGIB and Navy Campus Education.
    A recently completed study by the Center for Naval Analysis (CNA) 
on the ``Effectiveness of the Navy's Voluntary Education Program'' has 
told us that participation in off-duty education programs has a clear 
relationship to both promotability and retention. Sailors who 
accumulate college credits have a significantly higher probability of 
making E-5 in five years. College participants have a significantly 
higher reenlistment rate. As credits accumulate, the probability of 
first reenlistment increases. The CNA study also examined the program's 
cost effectiveness. Investment in Academic Skills improvement provides 
a dramatic return of between $9 to $22 for every Navy dollar invested 
in the program in reduced recruiting and training costs. The final 
report for this study is expected in mid April.
    Our most recent data on QOL programs is presented here, though the 
report on the findings of the 1997 QOL Survey (prepared by Navy 
Personnel Research and Development Center (NPRDC)) is pending. NPRDC is 
a Navy personnel research laboratory that is staffed primarily by 
civilian research psychologists. Although NPRDC research psychologists 
work with some guidance from Navy/BUPERS sponsors, they maintain their 
scientific integrity.
    Marine Corps quality of life (QOL) programs contribute to military 
mission outcomes. This was demonstrated in the 1994 ``Quality of Life 
in the Marine Corps'' study conducted by the Navy Personnel and 
Research Development Center (NPRDC). This study statistically linked 
the QOL program investments to readiness and retention. This study is 
scheduled to be readministered in 1998 to reassess Marines' QOL across 
11 areas and their relation to mission outcomes.
    There is a myriad of QOL program-specific research, such as the MWR 
Patron Needs Assessment, also conducted by NPRDC and completed in 1997. 
According to data, the top 10 programs/services rated as most important 
to Marines were: (1) Exchange; (2) Information, Tickets and Tours 
(ITT); (3) Fitness Centers; (4) ATM Machine; (5) Military Clothing 
Store; (6) Gas Station; (7) Movie Theater; (8) Barber Shop; (9) Auto 
Hobby Shop; and (10) Swimming Pools. Two other recent QOL program-
specific studies conducted were: the Effectiveness of the Voluntary 
Education Program, performed by the Center for Naval Analysis, and the 
Spouse Employment Survey and Analysis, performed by Human Technology, 
Inc. and CODA Inc.
    The Marine Corps has a robust QOL research program, with many 
ongoing initiatives to determine both Marine and mission needs. In 
1998, an ``Assessment of Program Contributions to Military Outcomes,'' 
will obtain effective program measures for 22 MWR and Human Resources 
programs, and assess each program's contribution to military outcomes.
    Another study, the ``Marine Corps MWR Leadership Assessment,'' will 
gather commander's and senior NCO leadership recommendations for MWR 
mission support. Both studies will be conducted by NPRDC.
    Research results are used as the basis for policy and resource 
decisions. Combined with commanders' leadership experience and 
judgment, the Marine Corps QOL programs provide a demonstrate return on 
investment to mission outcomes. All of our Quality of Life programs are 
producing positive results.
    One of the programs which is working very well is the Voluntary 
Education Program (VOLED). VOLED participants have significantly better 
promotion prospects. Academic skill participants are more likely to 
cross-rate. VOLED participants have significantly lower demotion rates 
and higher reenlistment rates.
    Family Programs improve Quality of Life for Marines and their 
families and enhance retention and readiness by providing the tools 
needed to meet the challenges of the military lifestyle. Family Service 
Centers provided 289,000 units of service in their first year of 
operation in 1988. In 1997, 1.7 million units of service were provided. 
A recent study by Caliber Associates looked at selected family service 
center programs (all services) and determined that there was a nexus 
between family service center programs and readiness.
    The Marine Corps child care programs are also providing essential 
services which affect readiness. The demand for child care exceeds the 
current capacity but we are reviewing our delivery systems to make 
certain that we are providing the services that families most require. 
For example, we are focusing on ways to expand care for children three 
years and under as this represents the greatest percentage of our unmet 
need.
    Question. What changes have been occurring in spouse, child, and 
substance abuse for the past two years? Please differentiate between 
officers and enlisted, length of service, and among major military 
specialties and PERSTEMPO rates. What is the role of the current high 
PERSTEMPO in any changes in family or substance abuse? Please provide 
copies of any analysis you have of the relationship.
    Answer.
    Navy.--There have been no significant changes in spouse and child 
abuse for the past two years. We have no evidence or indication that 
rank, rate, length of service or military specialty have had any direct 
impact on incidence rates of child or spouse abuse. Data from the Navy 
Central Registry shows the following:
    Number of incidents reported for the last five years:

----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year--
                                                                    --------------------------------------------
                                                                       1997     1996     1995     1994     1993
----------------------------------------------------------------------------------------------------------------
Spouse Abuse:
    Incidents reported.............................................    3,357    3,424    5,228    6,057    6,344
    Substantiated..................................................    2,493    2,558    3,586    4,053    4,277
Rates of spouse abuse incidents reported per 1,000 spouses.........     16.3     13.9     22.4     24.5     25.5
Child Abuse:
    Incidents reported.............................................    2,606    2,435    3,822    4,122    5,368
    Rates of child abuse incidents reported per 1,000 children.....      7.8      7.1     10.5     13.8     13.5
----------------------------------------------------------------------------------------------------------------

    Navy abuse incident reports leveled off and decreased in fiscal 
year 1993, fiscal year 1994, fiscal year 1995 and fiscal year 1996. We 
believe this is due not only to downsizing, but also to improved 
screening of cases with our Risk Assessment Model. It may well be that 
fear of career consequences has decreased reporting, as indicated by 
the Abuse Victim Study which was required by the Defense Authorization 
Act for Fiscal Year 1993 (Public Law 102-484).
    In general, substance abuse in the Navy has declined in the past 18 
years. We credit our aggressive prevention and deterrence efforts, to 
include education, providing healthy alternatives and a vigorous drug-
testing program. In contrast to the post-Vietnam era, our culture, with 
respect to drug abuse, is one of ``Zero Tolerance.'' The goals of our 
urinalysis program have always been to deter and detect drug abuse, as 
well as provide data on the prevalence of drug abuse. We've been quite 
successful--the proportion of sampled servicemembers testing positive 
for drugs has fallen from approximately 7 percent in 1983 to less than 
1 percent in recent years, with no changes in drug abuse trends over 
the past two years. Alcohol abuse has shown a similar decline. In 1982, 
41 percent of Navy personnel reported ``loss of productivity'' (late 
for work, missing work, etc.) because of alcohol abuse. That number, 
while still too high, declined to 20 percent in 1995. We anticipate 
that DOD's Worldwide Survey on Substance Abuse, currently in progress, 
will show additional reductions in fiscal year 1996 and fiscal year 
1997.
    In fiscal year 1996 and fiscal year 1997, our urinalysis positivity 
rate remained below 1 percent. In those years, officers accounted for 
less than .05 percent of all positive samples and enlisted personnel 
ages 25 and under accounted for approximately 70 percent of all 
positive samples. Historically, first term personnel account for the 
majority of all positive urinalysis samples. PERSTEMPO does not appear 
to influence our rates of substance abuse.
    In the last two years, we've implemented testing of all Navy 
applicants at Military Enlistment Processing Stations (MEPS) upon entry 
into the Delayed Entry Program (DEP). The result has been approximately 
4 percent of all applicants tested positive for drug abuse. Our Navy 
Drug Screening Labs (NDSL's) also began using a better THC chemical 
reagent that is more sensitive to a broader range of THC metabolites. 
The result has been an increase of approximately 700 additional urine 
samples testing positive for THC in fiscal year 1997 over fiscal year 
1996. We've also revised our Self-Referral for Drug Abuse Policy so 
that it protects Navy's investment in training and experience by 
preventing fraudulent use of the self-referral program, while it 
continues to help those who have been diagnosed as drug dependent. 
Also, we've implemented an Inhalant Abuse Policy to establish 
guidelines for processing personnel who abuse inhalants for 
administrative separation.
    Other important initiatives include implementation of Urinalysis 
Program Coordinator Training to standardize our urine specimen 
collection and submission procedures. We have distributed software that 
helps commands better manage their urinalysis programs and track 
substance abuse trends. We've also upgraded our Navy Drug Resource 
Website (NAVDWEB) with improved graphics, easier instructions, and more 
information.
    In alcohol abuse prevention efforts, we introduced our ``Right 
Spirit'' Alcohol Abuse Prevention and Deglamorization campaign in March 
of 1996. This campaign tightens policy, eliminates waivers for underage 
drinking in certain locales, increases education and training, and 
establishes prevention education detachments in San Diego and Norfolk.
    The chart below shows alcohol and drug abuse trends by age and pay 
grade. Heavy drinking is defined as five or more drinks in one setting 
at least once a week.

                            [Past 12 months]
------------------------------------------------------------------------
                                                  Percent      Percent
                Characteristic                    Illicit       Heavy
                                                 Drug Abuse    Drinkers
------------------------------------------------------------------------
Age:
    20 and under..............................         16.6         29.8
    21-25.....................................         10.3         26.6
    26-34.....................................          4.8         15.4
    35 and older..............................          3.0          9.3
Pay Grade:
    E1-E3.....................................         15.9         32.4
    E4-E6.....................................          6.1         18.2
    E7-E9.....................................          2.0         11.4
    W1-W5.....................................          2.8          9.5
    O1-O3.....................................          2.7          6.1
    O4-O10....................................          1.2          2.0
------------------------------------------------------------------------
Source: Department of Defense Worldwide Survey of Health Behaviors for
  Military Personnel.

    There is no direct evidence that ``downsizing'' and an increased 
PERSTEMPO have contributed to increased spouse, child, or substance 
abuse. We have noted that personal childhood experiences, learned 
behavior patterns, and individual psychological factors appear to 
influence more directly the incidence of child or spouse abuse. 
Situational family stress, such as work stress, is not a strong 
predictor of child or spouse abuse, although it could increase risk 
when occurring in context with the known risk factors I mentioned.
    While we have not noted a relationship between increased PERSTEMPO 
and increased substance abuse, we do recognize that there are warning 
signs that we must closely monitor.
    Alcohol and drug abuse patterns differ among certain socio-
demographic groups and environmental conditions. We know that alcohol 
and drug abuse is often more common and heavier among younger persons, 
males, and the less educated. Navy, like the other military Services, 
is largely made up of this high risk (male, 17 to 25) population. In 
addition to age, sex and education, marital status and pay grade are 
risk factors. Single Sailors or those who are married without their 
spouse present are more likely to abuse alcohol. Those in pay grades 
E1-E3 and O1-O3 are five times more likely to abuse alcohol or drugs 
than senior enlisted and officers. Isolated duty and long deployments 
are also high risk factors.
    The above data was taken from the 1995 survey. Current Navy data 
shows a trend of decreasing incidents, particularly in drinking and 
driving incidents and injuries. Discharges because of alcohol or drugs 
have not changed. In short, we have not seen evidence of an upturn of 
substance abuse because of PERSTEMPO.
    USMC.--There has been no significant change in substance abuse in 
the past two years. Preliminary figures for the number of substantiated 
incidents follow:

------------------------------------------------------------------------
                                                  Domestic
                                                  Violence   Child Abuse
------------------------------------------------------------------------
Fiscal year 1997..............................        1,597          844
Fiscal year 1996..............................        1,979          969
------------------------------------------------------------------------

    The USMC family violence reports do not regularly differentiate 
between officer and enlisted. Also, we have not to date maintained data 
on length of service or major military specialty.
    We commissioned a special study by the University of Maryland 
School of Social Work in fiscal year 1996 to determine if the high 
OPTEMPO in fiscal year 1996 was a causal factor in domestic violence. 
The findings were that OPTEMPO was not a causal factor. However, 
deployments may precipitate incidents of family violence by someone 
already disposed to use violence.
                                f-18e/f
    Question. In 1998 dollars, what is the current total program unit 
cost for a F-18E, and F-18F? For the C/D (Lot 19) models? (Please 
include all RDT&E, MilCon, and Procurement costs.)
    Answer. Unit procurement cost for the ``E'' and ``F'' (APN 1 and 6) 
for 548 A/C procured as per the fiscal year 1999 President's Budget 
are:
    ``E'' equals $63.875 million/Unit in fiscal year 1998 dollars.
    ``F'' equals $65.692 million/Unit in fiscal year 1998 dollars.
    E&MD (fiscal year 1998 dollars) equals $5,870.1 million as of the 
fiscal year 1999 President's Budget. Amortize this over 548 units:
    ``E'' equals $10.712 million/Unit in fiscal year 1998 dollars.
    ``F'' equals $10.712 million/Unit in fiscal year 1998 dollars.
    Total unit procurement cost including APN 1, 6 and E&MD for the 
``E'' and ``F'' are:
    ``E'' equals $74.587 million/Unit in fiscal year 1998 dollars.
    ``F'' equals $76.404 million/Unit in fiscal year 1998 dollars.
    This assumes that items such as support, spares, non-recurring and 
E&MD costs are amortized equally across all units and the variants.
    The C/D Lot 19 A/C were procured in fiscal year 1995. As of the 
fiscal year 1999 President's Budget, the unit costs for the ``C'' and 
``D'' (APN1 and 6) are:
    ``C'' equals $45.372 million/Unit in fiscal year 1998 dollars.
    ``D'' equals $46.946 million/Unit in fiscal year 1998 dollars.
    E&MD (fiscal year 1998 dollars) equals $5,341.5 million as 
projected from the fiscal year 1996 C/D SAR approved program (APB) 
information. Amortized over 1,027 USN units:
    ``C'' equals $5.201 million/Unit in fiscal year 1998 dollars.
    ``D'' equals $5.201 million/Unit in fiscal year 1998 dollars.
    Total unit procurement cost with APN 1, 6 and E&MD for the ``C'' 
and ``D'' are:
    ``C'' equals $50.573 million/Unit in fiscal year 1998 dollars.
    ``D'' equals $52.147 million/Unit in fiscal year 1998 dollars.
    Question. What total program unit cost, in 1998 dollars, did the 
Navy project in 1993 for the E/F?
    Answer. Using the 92 DAB estimate and the escalation at that time, 
the unit procurement cost for 1,000 E/F aircraft including both APN 1 
and 6 was: Unit procurement cost equals $61.198 million/Unit in fiscal 
year 1998 dollars.
    E&MD (fiscal year 1998 dollars--escalation at that time) as 
estimated at the 92 DAB amortized over the projected 1,000 A/C was: 
Unit E&MD cost equals $6.001 million/Unit in fiscal year 1998 dollars.
    Total Unit Procurement Cost including APN procurement (1 and 6) and 
E&MD was: Total unit procurement cost equals $67.199 million/Unit in 
fiscal year 1998 dollars.
    Question. Please cite all performance goals stated in 1993 and what 
changes, up or down, have occurred up to the present time on all 
issues, including range, acceleration, maneuverability, and radar cross 
section. Is any consideration being given at this time to changing or 
dropping any of these or other performance criteria?
    Answer. There is no consideration being given at this time to 
change or drop any Key Performance Parameter (KPP). Attached are the 
KPP parameters for the F/A-18 E/F. The objective and threshold values 
represent our ORD requirements. Since 1993 the only change to the ORD 
was to incorporate performance requirements for the F version. 
Originally F-18F performance was to be a fallout since it was only to 
be used as a trainer. With the decision to replace the F-14 with the F-
18F, performance requirements were established. (See the Key 
Performance parameter enclosure.)
    In those KPP's with multiple entries (e.g., Interdiction Mission 
Radius, Recovery, Payload, Specific Excess Power, etc.) the first entry 
is the ``E'' value and the second is the ``F'' value.) The launch wind 
over deck definition was also changed and based on larger Max Takeoff 
Gross Weight rather than the lower Typical Combat Gross Weight. This 
added 4,000 pounds to the calculation used to determine launch wind 
over the deck requirements for the airplane. This, in effect, increased 
the KPP requirement. Even within this more stringent requirement we 
have margin. The status numbers presented reflect flight test results 
collected to date. This performance data was collected, reviewed and 
validated during OT-IIA. Radar Cross Section is classified; however 
flight testing has been done and the aircraft meets specified 
requirements.
    Question. Please cite the flight test results for each of these 
criteria.
    Answer. On the enclosure (Key Performance Parameters), the status 
numbers reflect flight test results collected to date. This performance 
data was collected, reviewed and validated during OT-IIA.
    Question. A recent draft GAO report lists 420 technical 
deficiencies in the F-18E/F. What is your cost and time estimate to 
resolve all these with no sacrifice in any performance criterion?
    Answer. Current funding and schedule provide sufficient resources 
to correct all deficiencies requiring correction to support a 
successful Operational Evaluation (OPEVAL). All of the corrective 
actions are being tracked individually and cumulatively for impact to 
performance, and all Key Performance Parameters are being met with 
margin to spare.
    Question. In 1993, Naval Air Systems Command compared the 
performance of the A and C models of the F-18 to the goals of the E 
model. See table below. Please provide data from flight test results to 
compare actual F-18E performance to the original goals and to the 
specified earlier F-18's.

----------------------------------------------------------------------------------------------------------------
                                                                                                          F-18E
                                             Initial F-18A   F-18A    F-18C    F-18C    F-18C    F-18E    flight
                                             Specification   (Lot 1    (Lot     (Lot     (Lot   goal in    test
                                                              FSD)     14)      15)      19)      1993   results
----------------------------------------------------------------------------------------------------------------
Escort Range (NM)..........................         420         319      302  .......  .......      356  .......
Interdiction Range (NM)....................         618         437      398  .......  .......      501  .......
Accel (sec.) 0.8 to 1.6 mach...............          98         144      180  .......  .......      153  .......
Specific Excess Power(Ps) (Ft./Sec.) at 1,
 3, and 6  Gs..............................  .............  .......  .......  .......  .......  .......  .......
Approach speed (kts.)......................         128         140      142  .......  .......      144  .......
----------------------------------------------------------------------------------------------------------------

    Answer. Provided here within the chart below:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    F/A-18C                            F/A-18E
                                                                           F/A-18A ---------------------------------------------------------------------
                                                                 F/A-18E    Lot 1                                              DAB               Flight
                                                                   ORD       FSD     Lot 12    Lot 14    Lot 15    Lot 19     March   PDR June    test
                                                                                                                              1992      1993     results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fighter Escort Radius (NM)....................................       410       362       343       341       331       330       420       423       434
Interdiction Radius (NM)......................................       430       415       376       374       370       369       520       504       512
Accel'tion (sec) 0.8M to 1.2M, 35K............................        70        55        58        58        57        57        60        67        67
Specific Excess Power, Ps (fps) 1g @ 0.9M, 10K................       600       617       599       599       699       695       637       639       661
Approach Speed (kts)..........................................       150       140       146       146       146       146       144       145       142
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--The ground rules for defining performance specifications have changed over time. The rules for the F/A-18A and the F/A-18E are different. For
  example, the flight profile for measuring Interdiction Radius was different for the F/A-18A than it is for the F/A-18E. The table above uses the F/A-
  18E rules, which have been applied to the other variants for consistency. This is why column one was changed to F/A-18E ORD vice F/A-18A
  specification.

                          f/a-18e/f wing drop
    Question. Please state your view on the media coverage about the F/
A-18E/F ``wing drop'' problem and about comparisons of E/F performance 
to earlier models of the F-18. Do you believe it useful or important 
for the public to be informed of these issues?
    Answer. Yes, the Department of the Navy fully complies with the 
Principles of Information as established by the Department of Defense 
(see attached).
    Question. Please provide copies of Navy testimony or printed 
reports to Congress or the public identifying the ``wing drop'' problem 
before the first instance of its being reported in the media.
    Answer. Neither printed reports nor Navy testimony were requested 
by Congress or the public prior to initial reporting in the media. 
However, wing drop was included in a list of technical issues to be 
solved in flight test during a briefing to Senator Russell Feingold (D-
WI) in a visit to NAS Patuxent River, Maryland, in May 1997. For 
informational purposes, provided are an F/A-18E/F Wing Drop Awareness 
Chronology dated February 16, 1998 and responses to questions submitted 
by Mr. Creighton Greene, Professional Staff Member, Senate Armed 
Services Committee, in December 1997.
                                f-18e/f
    Question. Why does the Navy compare the E/F to the lower 
performance (i.e. Lot 12 version of the C/D model rather than the 
current (i.e. Lot 19) version? Please present a comparison of the C/D 
Lot 12 to Lot 19 on all significant performance criteria.
    Answer. The attached chart provides the comparison of Lot 12 to Lot 
19. As the Navy developed the ORD in 1991, to support the Defense 
Acquisition Board in 1992, the current version of the F/A-18C/D was the 
Lot 12. Therefore, the Lot 12 F/A-18C/D was used to develop the 
performance baseline for the F/A-18E/F. Newer Lots were planned at the 
time but their performance parameters had not been defined.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    F/A-18C                            F/A-18E
                                                                           F/A-18A ---------------------------------------------------------------------
                                                                 F/A-18E    Lot 1                                              DAB               Flight
                                                                   ORD       FSD     Lot 12    Lot 14    Lot 15    Lot 19     March   PDR June    test
                                                                                                                              1992      1993     results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fighter Escort Radius (NM)....................................       410       362       343       341       331       330       420       423       434
Interdiction Radius (NM)......................................       430       415       376       374       370       369       520       504       512
Accel'tion (sec) 0.8M to 1.2M, 35K............................        70        55        58        58        57        57        60        67        67
Specific Excess Power, Ps (fps) 1g @ 0.9M, 10K................       600       617       599       599       699       695       637       639       661
Approach Speed (kts)..........................................       150       140       146       146       146       146       144       145       142
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--The ground rules for defining performance specifications have changed over time. The rules for the F/A-18A and the F/A-18E are different. For
  example, the flight profile for measuring Interdiction Radius was different for the F/A-18A than it is for the F/A-18E. The table above uses the F/A-
  18E rules, which have been applied to the other variants for consistency. This is why column one was changed to F/A-18E ORD vice F/A-18A
  specification.

                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
                      naval reserve ch-60 aircraft
    Question. Secretary Dalton, I am told that the Navy Reserve has 
stated that one of their highest unfunded priorities is the CH-60. Are 
any of the aircraft requested in the fiscal year 1999 budget for the 
Naval Reserve? How many additional aircraft do the Navy Reserves 
require in fiscal year 1999?
    Answer. The fiscal year 1999 budget does not include the 
procurement of CH-60 aircraft for the Naval Reserve. The Navy's Master 
Helicopter Plan was developed to expand warfighting capability, 
mobilize the force, neck down type/model/series and consolidate the 
force structure. To achieve that aim Navy is moving toward an all H-60 
force consisting of two series helicopters; the CH-60 and the SH-60R. A 
key component of the plan is to eventually mirror the Naval Air Reserve 
Force's helicopter community to that of the Active force. Currently the 
Naval Air Reserve Force operates five different series helicopters; HH-
60H, UH-3H, SH-3H, SH-2G and the MH-53E. To align the Reserve 
helicopter force with Active forces will require the replacement of all 
existing aircraft with either the CH-60 or the SH-60R. The Naval 
Reserve Force has requirements for 28 airframes through fiscal year 
2008. Two reserve aircraft were appropriated in fiscal year 1998. The 
reserves have included procurement of 2 CH-60's as high unfunded 
priorities in fiscal year 1999.
                          hellfire ii missiles
    Question. Secretary Dalton, is there an unfunded requirement for 
Hellfire II missiles? If so, please tell me how many of these missiles 
are required by the Department of the Navy and what your procurement 
plans are.
    Answer. The Hellfire missiles in the inventory and on contract are 
fully funded. The projected inventory is 4,000 missiles below the 
inventory objective. Based on overall funding priorities, the DON has 
no plans to procure additional Hellfire missiles.
                                 ______
                                 
               Questions Submitted by Senator Judd Gregg
                         operational readiness
    Question. I understand that (1) operational demands are threatening 
to diminish readiness; and (2) past the FYDP period, i.e. 2003 and 
beyond, the Navy is concerned that the average rate of funded 
production will not permit you to maintain both the required ship and 
aircraft inventory.
    Both of these are serious issues, would you expand on them please?
    What is the approximate magnitude of your ship building/repair/
modernization shortfall beyond fiscal year 2003?
    Answer. The Navy is striving to support operational demands, such 
as maintaining two Carrier Battle Groups in the Persian Gulf, with 
regularly scheduled forward-deploying forces. This level of support 
comes at a cost, in reduced presence in other theaters, and poses 
significant challenges for the Fleet Commanders.
  --Short term impacts are slight due to the forward deployed posture 
        and inherent mobility of naval forces which make them an ideal 
        choice for crises response and easy to shift between theaters 
        when contingencies arise.
  --Longer term support comes at a greater cost due to compressed 
        Interdeployment Training Cycles (IDTC) and perturbation to long 
        range deployment schedules, which could result in increased 
        OPTEMPO/PERSTEMPO.
  --Higher transit speeds, increased flight/steaming hours, and the 
        requirement to compress or defer maintenance have potential 
        impact on force readiness and quality of life for sailors.
    Our current ship and aircraft procurement plans meet our present 
recapitalization requirements. But, for the long term, Navy will have 
to balance funding and procurement options carefully in order to meet 
our inventory goals.
  --We need to reduce our front end investment costs with initiatives 
        such as multi-year procurement.
  --New Attack Submarine (NSSN) teaming arrangement between Newport 
        News Shipbuilding and Electric Boat enable us to take advantage 
        of one production line rather than two.
  --We are reducing support requirements with programs like ``Smart 
        Ship.''
  --We are modernizing and remanufacturing existing aircraft such as 
        the SH-60, AV-8B, and AH-1/UH-1.
  --We will extend the nominal service lives of aircraft and ships when 
        it makes good business sense.
    Beyond fiscal year 2003 we will need to increase our average 
shipbuilding from 6-7 to 8-10 ships per year.
    Question. The Navy is down to four government Shipyards.
    What do you see as the role of government shipyards, and Portsmouth 
Naval Shipyard in Portsmouth, New Hampshire, in particular, in future 
Navy plans?
    What is the Navy strategy to maintain government shipyards as 
modern facilities with well trained workforces, including apprentices?
    Answer. The public sector's Naval Shipyards are vital assets for 
depot level overhaul and maintenance, including battle damage repairs 
in wartime and voyage repairs in peacetime, of nuclear-powered ships 
and large-deck conventionally-powered surface ships. Naval Shipyards 
provide a responsive, geographically dispersed, labor strike-free 
industrial capability in support of fleet readiness. Naval Shipyards 
provide a vital link to fleet operations by maintaining the capability 
and capacity to effectively overhaul and modernize ships. Portsmouth 
Naval Shipyard is an integral part of the public sector's ship repair 
base through the Future Years Defense Program (fiscal year 1999-2003). 
The workload planned for Portsmouth Naval Shipyard is relatively stable 
across the FYDP. The Navy's strategy is to balance workload in the 
public and private sectors to sustain needed maintenance capabilities 
and support the ship construction program.
    The Navy's strategy provides incentives and/or funding to 
revitalize processes and business practices; to plan, prioritize and 
recapitalize facilities as required; and to continue to provide 
training to shipyard employees to sharpen their skills, increase their 
knowledge levels, and improve upward mobility.
                excess infrastructure and base closures
    Question. I see that you fully support base closures in the years 
ahead. What type/category of excess infrastructure exists in the Navy? 
What bases are excess to your needs and, therefore, possible candidates 
for closure or realignment?
    Answer. The Navy is currently working with the Office of the 
Secretary of Defense to develop a report for Congress required by 
section 2824 of the Fiscal Year 1998 Defense Authorization Act on the 
closure and realignment of military installations. Excess 
infrastructure in the Department of the Navy will be addressed in this 
report.
                                 ______
                                 
           Questions Submitted by Senator Ernest F. Hollings
         fiscal year 1999 reserve personnel, navy [rpn] funding
    Question. In the past five years many have argued, wisely I 
believe, that the Department did not adequately fund our Naval and 
Marine Reserves. Does the fiscal year 1999 Budget adequately fund these 
citizen sailors or did you leave it to Congress to do?
    Answer. The fiscal year 1999 President's Budget funds Naval Reserve 
Annual Training (AT) statutory requirements under U.S. Code, Title 10, 
at a budgeted participation rate of 99 percent for officers and 81 
percent for enlisted personnel. The Inactive Duty Training (IDT) drill 
requirements are budgeted at a participation rate of 99 percent officer 
and 92 percent enlisted. These figures are based on historical 
execution. Our goal is to execute at a level which ensures that all 
reserve personnel perform the required AT and IDT periods.
                               navy jrotc
    Question. I am receiving letters from students, educators and 
parents from all across South Carolina telling me that this year's 
funding for Navy JROTC programs has been severely cut. Specifically 
they cite that travel funds have been halved, uniform funding has been 
cut so severely that cadets are no longer issued the white coat, that 
replacements for instructors who depart cannot be hired and that funds 
the Congress appropriated are being withheld for other Navy programs. 
If true, this clearly defies the will of Congress. Please answer these 
charges.
    Answer. The Navy currently supports 435 NJROTC units at host high 
schools throughout the United States, with nearly 63,000 cadets and 960 
instructors. NJROTC is a superb youth development program making 
important contributions to the future of our country. The Navy has made 
no severe cuts to its NJROTC program, but available funding in fiscal 
year 1998 is about 2 percent below that of fiscal year 1997, 
principally due to general Congressional cuts to the O&M, Navy account, 
of which this program took a small share.
    Since fiscal year 1992, Navy spending on this program has more than 
doubled, even after inflation. This has occurred over the same time 
period in which total Navy resources have declined by 20 percent. While 
this continued level of funding for NJROTC clearly shows our commitment 
to the program, it is a very real fiscal challenge. Adding to that 
challenge is the link between active duty pay and allowances and NJROTC 
instructor salaries. Back in fiscal year 1992, salaries made up 54 
percent of the program's cost while today they make up 85 percent. 
Since the salary levels are prescribed by law, any unplanned reductions 
to the budget must come out of other areas of the budget such as 
travel, cadet uniforms, etc.
    Regarding uniforms, cadets have never been issued white coats. 
Budget reductions over the past few years, however, have necessitated 
restructuring of the Cadet Sea Bag, without reducing the quality of the 
program. Certain uniform items such as service dress blue jackets with 
white combination hats, which were issued to all cadets, are now only 
authorized for cadet officers and chief petty officers (about 25 
percent of unit).
    To operate within the available funding, it has also been necessary 
to place controls on the authorization and replacement of additional 
instructors at our larger units. We are keenly aware of the difficulty 
this has caused to some NJROTC units and the limits it imposes on 
enrolling additional interested students. One Naval Science Instructor 
and one Associate Naval Science Instructor are the normal minimum at a 
unit. We are limiting further growth of instructors above the minimum 
required to ensure funding remains within that allocated.
    The Navy will continue to support the NJROTC program to the fullest 
extent possible in this time of austere funding.
        gymnasium in support of nuclear power school relocation
    Question. The Navy has made significant progress in preparing to 
move the nuclear propulsion school from Orlando to the Naval Weapons 
Station at Goose Creek, South Carolina. However, in reviewing this 
effort, I am concerned that BRAC requirements to build the needed 
facilities have been ignored. Specifically, a gymnasium was not 
included in the plan. Because of the large number of students added to 
the post population by this move, the small metal building now being 
used as a gymnasium appears clearly unable to support the expanded post 
population. Therefore, BRAC funds to build a gymnasium should have been 
included in this project. Please review Navy plans and advise me of 
your findings with respect to the gymnasium. If you find that a 
gymnasium is not needed, please explain why.
    Answer. A fiscal year 1996 BRAC project, P-016U, is constructing 
six barracks and a core building for the Nuclear Power School in 
Charleston. The core building will contain a fitness center which 
supports the student population and includes a nautilus center, weight 
room, and outside volleyball and basketball courts. This project is 
scheduled for completion May 1998.
                                 ______
                                 
               Question Submitted by Senator Dale Bumpers
                                 ntacms
    Question. In fiscal year 1998 the Congress added to the Navy's 
budget $10 million for pre-EMD engineering to marinize the Army 
Tactical Missile System (ATACMS). It was Congress' intent that this 
seed money was to be followed by a Navy program to integrate the 
marinized Navy Tactical Missile System (NTACMS) into the fleet for the 
Navy's mission to provide fire support in land attack warfare.
    What is the status of the Navy TACMS program? Has the Navy 
requested any funds for the program in the fiscal year 1999 budget?
    Answer. NTACMS, which marinizes the ATACMS missile for submarine 
and surface ship launch, will provide the capability for precision 
strike and interdiction at extended range (160NM). In addition to an 
Anti-Personnel/Anti-Machinery (APAM) warhead, plans include development 
of an improved hard target penetrator. This capability can be fielded 
at significantly reduced cost by leveraging Army ATACMS development and 
fixed production costs.
    The fiscal year 1999 President's Budget provides $145 million of 
NTACMS RDT&E funds over the FYDP, which will support an fiscal year 
2001 EMD start and an fiscal year 2006 IOC.
    The fiscal year 1998 funding was used to develop and refine 
required modifications to the Army ATACMS missile and definition of the 
capsule for submerged launch and the canister for surface launch. These 
will include mechanical, electrical, and data transfer interfaces 
between the missile, the capsule/canister, and the ship. Funds were 
also allocated for the engineering analysis required for ATACMS 
integration to Navy mission planning, weapons and fire control systems; 
for preparation of documentation to support a Milestone II decision, 
Operational Requirements Document, and Concept of Operation 
documentation, and for initial planning for underwater ejection 
testing.
    The majority of the fiscal year 1999 and fiscal year 2000 funding 
is provided to conduct a submerged launch demonstration to validate the 
underwater launch design, which would provide cost and technological 
risk reduction for EMD.
    Fiscal year 2001 to fiscal year 2003 funding supports execution of 
EMD and will refine the hardware and software approaches developed 
during prior risk reduction efforts through critical design reviews.
    Structuring of a complete NTACMS program through procurement in the 
ongoing POM00 build is at risk due to extreme budgetary pressures.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
                      lockheed and northrop merger
    Question. There has been substantial publicity of late concerning 
the proposed merger of Lockheed and Northrop and opposition to that 
plan by the Department of Justice. Northrop is one of the builders of 
the F/A-18E/F, and Lockheed is one of the two contractors chosen to 
compete for the Joint Strike Fighter (JSF) design. The merger, if 
concluded, would leave only three major defense contractors. Do you 
have any concerns about this loss of competition in the aerospace 
industry?
    Answer. Each of the military services provided the Department of 
Defense with their individual assessments of this proposed merger. In 
this process the Navy did express concern in several areas. The 
Department of Defense's overall position across the full spectrum of 
defense business is in opposition to the merger.
                                 cvn-77
    Question. The Navy is asking for accelerated procurement of CVN-77, 
the next A/C carrier. Although this is a Nimitz-class carrier, it is 
billed as a ``transition carrier'' to the CVX, the next class of 
carriers.
    Why is CVN-77 billed as a ``transition carrier?''
    Answer. CVN-77, the tenth Nimitz-class aircraft carrier, has been 
designated as the ``transition ship'' to the next generation of 
aircraft carrier, the CVX. The CVN-77 will incorporate process changes 
and advanced technologies which will reduce the total ownership cost of 
CVN-77, as well as provide opportunities for backfit into the previous 
nine ships of the Nimitz class. Under the ``transition ship'' concept, 
CVN-77 will also provide opportunities to mitigate technology risk for 
CVX.
    Question. What are the features which will differentiate CNV-77 
from other Nimitz class carriers?
    Answer. The CVN-77 RDT&E program, which commenced in fiscal year 
1998, has been structured to identify, evaluate, and select candidate 
transition technologies for incorporation into the CVN-77 design. Such 
incorporation would differentiate the CVN-77 from other Nimitz-class 
carriers, although the degree of differentiation would be reduced once 
the applicable transition technologies are backfit into the previous 
nine Nimitz-class carriers. Currently, the CVN-77 RDT&E program is 
focusing on the following major investment areas:
    Manpower and Material Support.--Manpower Utilization; Ship 
Maintenance and Operational Support; Preservation and Corrosion Control 
Training; and Information Management.
    Design Tools and Processes.--Modeling and Design Tools; and 
Producibility.
    Hull, Mechanical, Electrical, and Auxiliary.--Auxiliary Systems; 
Quality of Life; Human Support Systems; Information Systems; and Hull 
and Structural Systems.
    Combat and Intelligence Systems.--Sensors; Communications; 
Information Management; and Structures and Arrangements.
    Aircraft Launch, Recovery, and Support.--Servicing and Maintenance; 
Weapons Handling; Information Management; Structures and Arrangements; 
and Launch and Recovery.
    Battle Damage Prevention and Recovery.--Damage Control; Hull 
Protection; and Shock Mitigation Signatures.
    Propulsion and Electric Power Generation.--Propulsion Systems; 
Electric Power Generation and Distribution; and Electrical Auxiliary 
Applications.
    Question. What is the total cost increase for the transition 
features as compared to the standard Nimitz-class carrier?
    Answer. The estimate for CVN-77 transition technologies is 
currently being refined in Navy's POM-00 deliberations.
                           trident submarines
    Question. The Navy is reportedly investigating the possibility of 
converting Trident Submarines to conventional cruise or conventional 
ballistic missile platforms. What is the status of this proposal? Isn't 
this an extraordinarily expensive way to deliver a conventional 
payload?
    Answer. Congressional language prohibits removal of any of the 18 
Trident SSBN's from strategic service prior to START II ratification. 
Pending START II ratification, the four oldest Trident SSBN's are 
planned for removal from strategic service, two each in fiscal years 
2002 and 2003.
    Right now, the Trident conversion (SSGN) concept is just a concept 
and not yet a program. No funds have been applied to it in the fiscal 
year 1999 budget, but the Navy continues to evaluate the concept.
    Conversion costs are currently estimated to be approximately $400 
million per ship (includes the refueling overhaul required for 20 
additional years of service life), with a one time initial design cost 
of approximately $170 million.
                                 ______
                                 
               Questions Submitted to Adm. Jay L. Johnson
               Questions Submitted by Senator Ted Stevens
                           aircraft carriers
    Question. Recognizing the planned capabilities of the Joint Strike 
Fighter, why not move to a larger number of smaller carriers capable of 
responding to multiple crisis rather than build $5 plus billion nuclear 
aircraft carriers?
    Answer. CVX will enter fleet service in 2013. The Navy's carrier 
based version of the Joint Strike Fighter (JSF) is intended to enter 
fleet service in 2012. JSF will be a complement to the F/A-18E/F. The 
Navy carrier version of JSF will not have a vertical takeoff and 
landing capability; rather, it will employ catapulting for takeoff, and 
arresting gear for landing, as does the Navy's current inventory of 
carrier based airplanes. Previous carrier studies have determined that 
the landing area needed for arrested landings needs to be at least 820 
feet long. If we add in a simultaneous launch and recovery requirement, 
then an angled deck of 820 feet and an overall flight deck length of 
over 920 feet is needed. In summary, the flight deck size of any 
proposed CVX is in great part determined by the need to conduct safe 
and effective flight operations.
                                cvx r&d
    Question. What is the urgency of spending so much R&D money now 
($190 million in 1999) on a new aircraft carrier design--why can't we 
go at a slower pace?
    Answer. The Navy's vision for CVX is to develop a new class of 
aircraft carrier that significantly reduces total ownership cost and 
incorporates an architecture for change, while maintaining the core 
capabilities of naval aviation (high-volume firepower, survivability, 
sustainability, and mobility). Achieving this vision will require 
significant design changes to incorporate advances in technology and to 
focus the design on affordability drivers, since a new carrier has not 
been designed in over 30 years.
    CVX will be commissioned in 2013 to replace U.S.S. Enterprise (CVN 
65), which will reach the end of its service life at 52 years. 
Construction must begin in 2006 to meet this commissioning date. The 
timeline for design and development of a new, more affordable carrier 
to support required construction start in 2006 necessitates that 
specific development and design efforts start by fiscal year 1999.
    Funding the fiscal year 1999 budget request is critical to initiate 
key technology development programs having major ship configuration and 
design impacts. Among these programs are:
    Advanced Technology Launcher.--Electromagnetic catapult development 
will require development of power conversion and control systems. 
Following component development, land-based testing will be required to 
ensure safety of flight.
    Propulsion Plant Development.--A new, modern propulsion plant 
requires continued funding in fiscal year 1999 to meet an fiscal year 
2006 construction start date. It has been over 30 years since the last 
carrier propulsion plant design. Funding is needed to incorporate 
lessons learned over this period of time into a new design.
    Advanced Protection Systems.--Survivability of the carrier is 
achieved through passive features that protect vital ship spaces and 
are major ship configuration drivers. To keep pace with modern threats, 
and to limit the weight and space impact of upgraded protection 
systems, requires development of advanced armor and protection systems. 
These systems will require small and full-scale, land-based testing to 
ensure adequacy against the threat.
    Information Integration.--Advanced computing plant architectures 
will enable significant reductions in manpower and will ensure 
survivability of the ship's computer-based systems. The information 
architecture and development of the substantial network control systems 
are key to fielding this capability. All of the ship control and 
monitoring systems that will reside on CVX in the future will need to 
be integrated into this architecture.
    Automation for Reduced Manning.--Manpower is the leading driver in 
ship life cycle cost. Automated systems are key to reducing the 
shipboard manpower requirement for CVX. Development of automated 
systems must be undertaken early to enable the ship design to 
incorporate them. Unless these systems are definable early in the 
design process, the ship will be designed to accommodate large numbers 
of personnel and will not be properly arranged to enable backfitting 
automation into the ship.
    Computer Aided Design Tools.--A clean-sheet aircraft carrier design 
has not been undertaken for over 30 years. Modern, computer based tools 
must be applied to efficiently engineer, design, test and simulate 
construction of an aircraft carrier design in the virtual environment 
to significantly reduce overall product cost.
    Question. Based on the AOA performed on the JASSM program, is the 
Navy committed to procuring the JASSM missile?
    Answer. No. The Analysis of Alternatives (AOA) performed for the 
JASSM program verified all of the Navy's current and forecast air 
launched Standoff Outside of Area Defenses (SOAD) requirements are met 
by SLAM-ER+. It is the Navy's intention to continue JASSM development 
as a joint venture with the USAF to ensure that when the JASSM weapon 
is fielded it retains the potential ability to be employed by Navy 
aircraft operating from an aircraft carrier. If at some point in the 
future, Navy/Joint warfare requirements can be better met through 
procurement of JASSM, the SLAM-ER+/JASSM procurement mix will be re-
evaluated.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                             privatization
    Question. How did the Navy and the Marine Corps arrive at the 
number of civilian and military jobs to be eliminated and/or contracted 
out? Were specific, individual studies performed to analyze the savings 
and appropriateness of activities to compete? or, was a goal imposed 
``from the top?'' How did the Navy/Marine Corps determine that 
contracting out saves 20 percent? Why does the Air Force assume 
different savings? Please provide copies of the analysis you performed 
to come to the conclusion that 20 percent was the right number.
    Answer. The savings reflected in the Navy's FYDP are derived from 
our expectation that ``competition'' not ``contracting out'' will 
result in significant savings. This expectation is based on research 
and analysis performed by the Center for Naval Analysis (CNA). CNA 
reviewed our experience implementing OMB Circular A-76 in the 1980's 
and found that ``competition'', not ``contracting out'', resulted in 
cost savings of approximately 30 percent, regardless of the outcome of 
the cost comparison. As a matter of interest, approximately half of the 
functions studied remained in-house after the competition, albeit in a 
more streamlined, efficient organization. CNA also reviewed the Navy's 
inventory of commercial activities and determined that conducting cost 
comparisons of activities involving approximately 80,000 full-time 
equivalents would yield the kind of savings we have incorporated into 
the Navy's FYDP. The CNA analysis formed the basis for Navy's 
competition savings projections. I cannot address the Air Force's 
savings assumptions, but I will be happy to provide you with a copy of 
CNA's analysis that forms the basis of our estimate that competition 
yields average savings of 30 percent.
    Question. With fewer military personnel and DOD civilians after all 
this contracting out, what will be the impact on overseas rotation and 
``perstempo'' problems?
    Answer. I need to reiterate that we are interested in increasing 
``competition'' not ``contracting out.'' Our policy provides a 
structured check and balance system between military manpower 
requirements and proposed shore infrastructure reductions for 
regionalization, outsourcing or privatization initiatives to ensure 
that our military readiness is not adversely affected. The need to 
maintain a sea-to-shore rotational base, along with the need to 
maintain certain critical skills, has indeed limited our ability to 
compete certain military-intensive functions. For this reason, the 
Navy's plan to achieve the savings reflected in this budget focuses on 
competing civilian-intensive functions.
    Question. How will the Navy and the Marine Corps monitor and 
document the progress in achieving your outsourcing programs and 
achieving the planned savings? How will these data be confirmed by an 
outside party?
    Answer. Again, I need to reiterate that we are conducting a 
``competition'' program, not an ``outsourcing'' program. Navy generally 
relies upon the cost comparison process established by OMB Circular A-
76 to ensure that our competitions result in the most cost effective 
outcome. Circular A-76 not only provides rigorous guidelines for 
identifying the costs of both in-house and private sector performance 
but it also incorporates an independent review process and provides all 
affected parties with an independent appeal process. The independent 
reviews will be conducted by both independent contractors familiar with 
the commercial activity studies and by in-house Navy auditors. Actual 
savings of the competition will include both personnel and other 
operating costs. To monitor and document our progress in achieving the 
planned ``competition'' savings, Navy has established an annual 
reporting system. This system will track actual costs for five years 
subsequent to the implementation of the cost comparison decision. 
Savings conformance will be determined by an analysis of actual total 
operating costs against planned total operating costs. Based on our 
past experience, we expect actual costs to track well with the cost 
comparison estimates. In addition to review by the independent 
reviewing official, the appeals officer, and all other interested 
parties during the cost comparison phase, cost comparison data will be 
available for public scrutiny and external review by the Naval 
Inspector General, the Naval Audit Service, the DOD Inspector General, 
the General Accounting Office, and other interested parties.
    Question. What actions do you plan if the savings do not 
materialize as planned? More outsourcing? Cuts in procurement? Force 
structure? Readiness?
    Answer. Failure to achieve the projected savings would have a 
serious impact on our ability to fund our modernization program without 
taking vertical cuts that would jeopardize other existing requirements. 
To limit the risk of jeopardizing other requirements and to ensure we 
meet the savings projected in the FYDP, we are also aggressively 
pursuing related cost savings initiatives such as regionalization, 
privatization, community use and public-private ventures.
                               readiness
    Question. What do your latest, 1998, data show about pilot 
retention? Is it getting better or worse? Is it better or worse for 
married pilots? With families? What are the socio-economic profiles of 
the pilots leaving? Staying?
    Answer. The Navy's two primary predictors of pilot retention, 
resignations and Aviation Continuation Pay (ACP) take rates, 
demonstrate that pilot retention continues to be on the decline. Pilot 
resignations increased from 414 in fiscal year 1997 to 540 in fiscal 
year 1998, while fiscal year 1998 ACP take rates, as shown in Table 1, 
were much lower than required.

                                     TABLE 1.--FISCAL YEAR 1998 ACP PROGRAM
----------------------------------------------------------------------------------------------------------------
                                                                                               Percent
           Aviation subcommunity            Aircraft    Bonus    Number    Number   Eligible  eligible   Percent
                                              type     amount   required  eligible   applied   applied   of goal
----------------------------------------------------------------------------------------------------------------
VFA Pilot.................................    F/A-18   $17,000        23        81        11        14        48
VF Pilot..................................      F-14    17,000        13        62         4         6        31
VAQ Pilot.................................     EA-6B    19,000        14        28         3        11        21
VS Pilot..................................       S-3    19,000        15        32         2         6        13
VAW/VRC Pilot.............................   E-2/C-2    10,000        17        58         7        12        41
                                           ---------------------------------------------------------------------
      Carrier Pilot Take Rate.............  ........  ........        82       261        27        10        33
                                           =====================================================================
VP Pilot..................................       P-3    10,000        46       200        44        22        96
                                           ---------------------------------------------------------------------
      Prop Pilot Take Rate................  ........  ........        46       200        44        22        96
                                           =====================================================================
      Pilot Take Rate.....................  ........  ........       128       461        71        20        55
----------------------------------------------------------------------------------------------------------------

    This year only 10 percent of eligible carrier pilots--33 percent of 
required--applied for ACP agreements that obligated them through 14 
years of commissioned service. This take rate, lowest in program 
history, is a sound predictor that critical department head billets 
will not be filled since those that have not signed an agreement are 
free to leave the Navy. These two indicators of resignations and take 
rates together highlight a continued trend of low pilot retention. The 
Navy does not track retention by socio-economic profiles such as 
retention for those married or with families.
    Question. What are the specific complaints of pilots leaving the 
Navy?
    Answer. Table 2 list ``reasons for leaving'' as cited by Naval 
Aviators on fiscal year 1997 exit surveys. It is noteworthy that no 
requirement exists to complete an exit survey, and if a survey is 
completed, it is typically one of the final items an aviator completes 
prior to leaving the service. Hence, it is not always afforded the 
proper effort.



Table 1.--Reasons for Leaving the Navy Cited by Pilots in Fiscal Year 
1997 Exit Surveys

                                                                 Percent
        Reason for Leaving                                        Citing
Family Separation.................................................    20
Promotion Opportunity.............................................    14
Quality of Leadership.............................................    12

Amount of Sea Duty

                                                                       8

Note.--These results were compiled from 126 completed exit surveys: the 
number represents only 30 percent of the aviators who resigned in fiscal 
year 1997. Additionally, the CNO's Aviation Retention Team compiled the 
below list of reasons for resigning.
These anecdotal reasons were heard from direct discussions with the 
fleet during visits by the team to various aviation commands: Increased 
amount of family separation; Frustration with Navy leadership; High 
operational tempo; Inadequate funding to support operations; Erosion of 
compensation/benefits; Reduced promotion opportunity; and Inadequate 
infrastructure.

    Question. Which of your ``quality of life'' programs are working? 
Which are not? Which generate the best pay-off in terms of retention? 
Please provide the data and analysis to substantiate your answer, or 
are you using judgment or anecdotal evidence to assess the degrees of 
success or failure? Does the Navy have any studies on these issues? By 
independent organizations? Please provide copies.
    Answer. I've just received the results of the 1997 BUPERS QOL 
survey that asked a representative sample of Sailors about their 
perceptions and use of 29 of our QOL programs. Their answers tell us 
that most of our QOL programs are working, in terms of both readiness 
and retention.
    When we asked Sailors to rank those programs that they feel 
contribute the most to their readiness, officers cite as their top 
three: (1) Tuition Assistance (TA)--47 percent; (2) Morale, Welfare, 
and Recreation (MWR) Sports and Fitness Ashore--46 percent; and (3) MWR 
Recreational Activities Ashore--33 percent.
    The top three programs for maintaining readiness among enlisted 
are: (1) TA--60 percent; (2) Montgomery GI BILL (MGIB)--51 percent; and 
(3) MWR Recreational Activities Ashore--32 percent.
    Regardless of pay grade, MWR and Voluntary Education (VOLED) 
programs have the greatest impact on readiness.
    When we examine QOL program use and quality, we see that MWR 
Recreation Activities Ashore (Officer--85 percent, Enlisted--85 
percent), MWR Sports and Fitness Ashore (Officer--84 percent; 
Enlisted--85 percent), and Navy Campus Education Centers (Officer--37 
percent; Enlisted--61 percent) are most frequently used. QOL programs 
with the highest quality ratings are: TA (78 percent); MGIB (77 
percent); and Navy Campus Education Centers (70 percent). We're 
especially pleased that 25 of 29 QOL programs were rated ``good'' or 
``very good'' by a majority of our Sailors.
    Out of 29 QOL programs that were rated, four did not receive a 
``good'' or ``very good'' assessment: (1) Spouse Employment Assistance 
(39 percent); (2) Single Sailor Program Ashore (42 percent); (3) Good 
Relationships, Strong Marriages, and Healthy Families (49 percent); and 
(4) Outreach and Command Representative Program (50 percent).
    These programs are relatively new, and many of our Sailors may not 
be as familiar with them as some of our more established efforts. As an 
example, our Single Sailor Program Ashore had been implemented for only 
a short time when we mailed out the survey. Additional public relations 
efforts and time for these programs to mature may improve their 
viability over the long term.
    When we asked respondents about a particular program's quality, we 
also asked why they might not have used the program. The majority of 
respondents (Officer--88 percent, Enlisted--79 percent) told us that 
they didn't feel a need for the program. Only 3 percent of officers and 
enlisted indicated that they preferred off-base programs to our QOL 
programs.
    Some programs haven't been well publicized. The least recognized 
programs among officers included the Chaplains Religious Enhancement 
Development Operation (CREDO) (15 percent), Relationships, Families, 
and Marriages (13 percent), and the Volunteer Program (12 percent), 
while enlisted reported less recognition for Academic Skills (26 
percent), CREDO (25 percent), Outreach/Command Representative Program 
(22 percent), and Single Sailor Ashore (20 percent).
    Sailors report that MWR and VOLED programs most significantly 
affect their retention decision. When asked, ``Would you reconsider 
your decision to remain in the Navy if programs were reduced or 
eliminated,'' officers rated TA (14 percent), MGIB (11 percent), and 
MWR Sports and Fitness Ashore (10 percent) while enlisted rated TA (27 
percent), MGIB (20 percent), and Navy Campus Education Centers (12 
percent) as the top three programs affecting their retention decision. 
Both our officers and enlisted are telling us that educational 
opportunities and fitness programs strongly contribute to our retention 
successes.
    A recently completed study by the Center for Naval Analysis (CNA) 
on the ``Effectiveness of the Navy's Voluntary Education Program'' has 
told us that participation in off-duty education programs has a clear 
relationship to both promotability and retention. Sailors who 
accumulate college credits have a significantly higher probability of 
making E-5 in five years. For example, if a Sailor takes even 15 credit 
hours of college work, he or she has a 43 percent probability of making 
E-5 in five years; with 30 credit hours, the probability increases to 
51 percent. College participants have a significantly higher 
reenlistment rate. As credits accumulate, the probability of first 
reenlistment increases. The CNA study also examined the program's cost 
effectiveness. Investment in Academic Skills improvement provides a 
dramatic return of between $9 to $22 for every Navy dollar invested in 
the program in reduced recruiting and training costs. Overall, the 
VOLED program is clearly very cost effective.
    I also spend a fair amount of time visiting the Fleet, looking at 
our programs and talking to Sailors who let me know how important they 
are to them. The data from these surveys supports what I've seen and 
heard--we need these programs, not only to maintain personal readiness, 
but also to retain our quality Sailors.
    Our most recent data on QOL programs is presented here, though the 
report on the findings of the 1997 QOL Survey is pending. NPRDC is a 
Navy personnel research laboratory that is staffed primarily by 
civilian research psychologists. Although NPRDC research psychologists 
work with some guidance from Navy/BUPERS sponsors, they maintain their 
scientific integrity. I have provided you with copies of both the 1997 
QOL Survey briefing as well as the CNA VOLED briefing.
    Question. What changes have been occurring in spouse, child, and 
substance abuse for the past two years? Please differentiate between 
officers and enlisted, length of service, and among major military 
specialties and PERSTEMPO rates. What is the role of the current high 
PERSTEMPO in any changes in family or substance abuse? Please provide 
copies of any analysis you have of the relationship.
    Answer. There have been no significant changes in spouse and child 
abuse for the past two years. We have no evidence or indication that 
rank, rate, length of service or military specialty have had any direct 
impact on incidence rates of child or spouse abuse. Data from the Navy 
Central Registry shows the following:
    Number of incidents reported for the last five years:

----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year--
                                                                    --------------------------------------------
                                                                       1997     1996     1995     1994     1993
----------------------------------------------------------------------------------------------------------------
Spouse Abuse:
    Incidents reported.............................................    3,357    3,424    5,228    6,057    6,344
    Substantiated..................................................    2,493    2,558    3,586    4,053    4,277
Rates of spouse abuse incidents reported per 1,000 spouses.........     16.3     13.9     22.4     24.5     25.5
Child Abuse:
    Incidents reported.............................................    2,606    2,435    3,822    4,122    5,368
    Substantiated..................................................    1,567    1,356    1,747    1,967    2,179
    Rates of child abuse incidents reported per 1,000 children.....      7.8      7.1     10.5     13.8     13.5
----------------------------------------------------------------------------------------------------------------

    Navy abuse incident reports leveled off and decreased in fiscal 
year 1993, fiscal year 1994, fiscal year 1995 and fiscal year 1996. We 
believe this is due not only to downsizing, but also to improved 
screening of cases with our Risk Assessment Model. It may well be that 
fear of career consequences has decreased reporting, as indicated by 
the Abuse Victim Study which was required by the Defense Authorization 
Act for Fiscal Year 1993 (Public Law 102-484).
    In general, substance abuse in the Navy has declined in the past 18 
years. We credit our aggressive prevention and deterrence efforts, to 
include education, providing healthy alternatives and a vigorous drug-
testing program. In contrast to the post-Vietnam era, our culture, with 
respect to drug abuse, is one of ``Zero Tolerance.'' The goals of our 
urinalysis program have always been to deter and detect drug abuse, as 
well as provide data on the prevalence of drug abuse. We've been quite 
successful--the proportion of sampled servicemembers testing positive 
for drugs has fallen from approximately 7 percent in 1983 to less than 
1 percent in recent years, with no changes in drug abuse trends over 
the past two years. Alcohol abuse has shown a similar decline. In 1982, 
41 percent of Navy personnel reported ``loss of productivity'' (late 
for work, missing work, etc.) because of alcohol abuse. That number, 
while still too high, declined to 20 percent in 1995. We anticipate 
that DOD's Worldwide Survey on Substance Abuse, currently in progress, 
will show additional reductions in fiscal year 1996 and fiscal year 
1997.
    In fiscal year 1996 and fiscal year 1997, our urinalysis positivity 
rate remained below 1 percent. In those years, officers accounted for 
less than .05 percent of all positive samples and enlisted personnel 
ages 25 and under accounted for approximately 70 percent of all 
positive samples. Historically, first term personnel account for the 
majority of all positive urinalysis samples. PERSTEMPO does not appear 
to influence our rates of substance abuse.
    In the last two years, we've implemented testing of all Navy 
applicants at Military Enlistment Processing Stations (MEPS) upon entry 
into the Delayed Entry Program (DEP). The result has been approximately 
4 percent of all applicants tested positive for drug abuse. Our Navy 
Drug Screening Labs (NDSL's) also began using a better THC chemical 
reagent that is more sensitive to a broader range of THC metabolites. 
The result has been an increase of approximately 700 additional urine 
samples testing positive for THC in fiscal year 1997 over fiscal year 
1996. We've also revised our Self-Referral for Drug Abuse Policy so 
that it protects Navy's investment in training and experience by 
preventing fraudulent use of the self-referral program, while it 
continues to help those who have been diagnosed as drug dependent. 
Also, we've implemented an Inhalant Abuse Policy to establish 
guidelines for processing personnel who abuse inhalants for 
administrative separation.
    Other important initiatives include implementation of Urinalysis 
Program Coordinator Training to standardize our urine specimen 
collection and submission procedures. We have distributed software that 
helps commands better manage their urinalysis programs and track 
substance abuse trends. We've also upgraded our Navy Drug Resource 
Website (NAVDWEB) with improved graphics, easier instructions, and more 
information.
    In alcohol abuse prevention efforts, we introduced our ``Right 
Spirit'' Alcohol Abuse Prevention and Deglamorization campaign in March 
of 1996. This campaign tightens policy, eliminates waivers for underage 
drinking in certain locales, increases education and training, and 
establishes prevention education detachments in San Diego and Norfolk.
    Chart 1 shows alcohol and drug abuse trends by age and pay grade. 
Heavy drinking is defined as five or more drinks in one setting at 
least once a week.

                            [Past 12 months]
------------------------------------------------------------------------
                                                  Percent      Percent
                Characteristic                    Illicit       Heavy
                                                 Drug Abuse    Drinkers
------------------------------------------------------------------------
Age:
    20 and under..............................         16.6         29.8
    21-25.....................................         10.3         26.6
    26-34.....................................          4.8         15.4
    35 and older..............................          3.0          9.3
Pay Grade:
    E1-E3.....................................         15.9         32.4
    E4-E6.....................................          6.1         18.2
    E7-E9.....................................          2.0         11.4
    W1-W5.....................................          2.8          9.5
    O1-O3.....................................          2.7          6.1
    O4-O10....................................          1.2          2.0
------------------------------------------------------------------------
Source: Department of Defense Worldwide Survey of Health Behaviors for
  Military Personnel.

    There is no direct evidence that ``downsizing'' and an increased 
PERSTEMPO have contributed to increased spouse, child, or substance 
abuse. We have noted that personal childhood experiences, learned 
behavior patterns, and individual psychological factors appear to 
influence more directly the incidence of child or spouse abuse. 
Situational family stress, such as work stress, is not a strong 
predictor of child or spouse abuse, although it could increase risk 
when occurring in context with the known risk factors I mentioned.
    While we have not noted a relationship between increased PERSTEMPO 
and increased substance abuse, we do recognize that there are warning 
signs that we must closely monitor.
    Alcohol and drug abuse patterns differ among certain socio-
demographic groups and environmental conditions. We know that alcohol 
and drug abuse is often more common and heavier among younger persons, 
males, and the less educated. Navy, like the other military Services, 
is largely made up of this high risk (male, 17 to 25) population. In 
addition to age, sex and education, marital status and pay grade are 
risk factors. Single Sailors or those who are married without their 
spouse present are more likely to abuse alcohol. Those in pay grades 
E1-E3 and O1-O3 are five times more likely to abuse alcohol or drugs 
than senior enlisted and officers. Isolated duty and long deployments 
are also high risk factors.
    The above data was taken from the 1995 survey. Current Navy data 
shows a trend of decreasing incidents, particularly in drinking and 
driving incidents and injuries. Discharges because of alcohol or drugs 
have not changed. In short, we have not seen evidence of an upturn of 
substance abuse because of PERSTEMPO.
                                f-18e/f
    Question. (a) In 1998 dollars, what is the current total program 
unit cost for a F-18E, and F-18F? For the C/D (Lot 19) models? (Please 
include all RDT&E, MilCon, and Procurement costs.)
    (b) What total program unit cost, in 1998 dollars, did the Navy 
project in 1993 for the E/F?
    (c) Please cite all performance goals stated in 1993 and what 
changes, up or down, have occurred up to the present time on all 
issues, including range, acceleration, maneuverability, and radar cross 
section. Is any consideration being given at this time to changing or 
dropping any of these or other performance criteria?
    (d) Please cite the flight test results for each of these criteria.
    Answer. (a) Unit procurement cost for the ``E'' and ``F'' (APN 1 
and 6) for 548 A/C procured as per the fiscal year 1999 President's 
Budget are:
    ``E'' equals $63.875 million/Unit in fiscal year 1998 dollars.
    ``F'' equals $65.692 million/Unit in fiscal year 1998 dollars.
    E&MD (fiscal year 1998 dollars) equals $5,870.1 million as of the 
fiscal year 1999 President's Budget. Amortize this over 548 units:
    ``E'' equals $10.712 million/Unit in fiscal year 1998 dollars.
    ``F'' equals $10.712 million/Unit in fiscal year 1998 dollars.
    Total unit procurement cost including APN 1, 6 and E&MD for the 
``E'' and ``F'' are:
    ``E'' equals $74.587 million/Unit in fiscal year 1998 dollars.
    ``F'' equals $76.404 million/Unit in fiscal year 1998 dollars.
    This assumes that items such as support, spares, non-recurring and 
E&MD costs are amortized equally across all units and the variants.
    The C/D Lot 19 A/C were procured in fiscal year 1995. As of the 
fiscal year 1999 President's Budget, the unit costs for the ``C'' and 
``D'' (APN1 and 6) are:
    ``C'' equals $45.372 million/Unit in fiscal year 1998 dollars.
    ``D'' equals $46.946 million/Unit in fiscal year 1998 dollars.
    E&MD (fiscal year 1998 dollars) equals $5,341.5 million as 
projected from the fiscal year 1996 C/D SAR approved program (APB) 
information. Amortized over 1,027 USN units:
    ``C'' equals $5.201 million/Unit in fiscal year 1998 dollars.
    ``D'' equals $5.201 million/Unit in fiscal year 1998 dollars.
    Total unit procurement cost with APN 1, 6 and E&MD for the ``C'' 
and ``D'' are:
    ``C'' equals $50.573 million/Unit in fiscal year 1998 dollars.
    ``D'' equals $52.147 million/Unit in fiscal year 1998 dollars.
    (b) Using the 92 DAB estimate and the escalation at that time, the 
unit procurement cost for 1,000 E/F aircraft including both APN 1 and 6 
was: Unit procurement cost equals $61.198 million/Unit in fiscal year 
1998 dollars.
    E&MD (fiscal year 1998 dollars--escalation at that time) as 
estimated at the 92 DAB amortized over the projected 1,000 A/C was: 
Unit E&MD cost equals $6.001 million/Unit in fiscal year 1998 dollars.
    Total Unit Procurement Cost including APN procurement (1 and 6) and 
E&MD was: Total unit procurement cost equals $67.199 million/Unit in 
fiscal year 1998 dollars.
    (c) There is no consideration being given at this time to change or 
drop any Key Performance Parameter (KPP). Attached are the KPP 
parameters for the F/A-18 E/F. The objective and threshold values 
represent our ORD requirements. Since 1993 the only change to the ORD 
was to incorporate performance requirements for the F version. 
Originally F-18F performance was to be a fallout since it was only to 
be used as a trainer. With the decision to replace the F-14 with the F-
18F, performance requirements were established. (See the Key 
Performance parameter enclosure. In those KPP's with multiple entries 
(e.g., Interdiction Mission Radius, Recovery, Payload, Specific Excess 
Power, etc.) the first entry is the ``E'' value and the second is the 
``F'' value.) The launch wind over deck definition was also changed and 
based on larger Max Takeoff Gross Weight rather than the lower Typical 
Combat Gross Weight. This added 4,000 pounds to the calculation used to 
determine launch wind over the deck requirements for the airplane. 
This, in effect, increased the KPP requirement. Even within this more 
stringent requirement we have margin. The status numbers presented 
reflect flight test results collected to date. This performance data 
was collected, reviewed and validated during OT-IIA. Radar Cross 
Section is classified; however flight testing has been done and the 
aircraft meets specified requirements.
    (d) On the enclosure (Key Performance Parameters), the status 
numbers reflect flight test results collected to date. This performance 
data was collected, reviewed and validated during OT-IIA.
    Question. A recent draft GAO report lists 420 technical 
deficiencies in the F-18E/F. What is your cost and time estimate to 
resolve all these with no sacrifice in any performance criterion?
    Answer. Current funding and schedule provide sufficient resources 
to correct all deficiencies requiring correction to support a 
successful OPEVAL. All of the corrective actions are being tracked 
individually and cumulatively for impact to performance, and all Key 
Performance Parameters are being met with margin to spare.
    Question. In 1993, Naval Air Systems Command compared the 
performance of the A and C models of the F-18 to the goals of the E 
model. See table below. Please provide data from flight test results to 
compare actual F-18E performance to the original goals and to the 
specified earlier F-18's.

----------------------------------------------------------------------------------------------------------------
                                                                                                          F-18E
                                             Initial F-18A   F-18A    F-18C    F-18C    F-18C    F-18E    flight
                                             Specification   (Lot 1    (Lot     (Lot     (Lot   goal in    test
                                                              FSD)     14)      15)      19)      1993   results
----------------------------------------------------------------------------------------------------------------
Escort Range (NM)..........................         420         319      302  .......  .......      356  .......
Interdiction Range (NM)....................         618         437      398  .......  .......      501  .......
Accel (sec.) 0.8 to 1.6 mach...............          98         144      180  .......  .......      153  .......
Specific Excess Power(Ps) (Ft./Sec.) at 1,
 3, and 6  Gs..............................  .............  .......  .......  .......  .......  .......  .......
Approach speed (kts.)......................         128         140      142  .......  .......      144  .......
----------------------------------------------------------------------------------------------------------------

    Answer. Provided here within the chart below:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    F/A-18C                            F/A-18E
                                                                           F/A-18A ---------------------------------------------------------------------
                                                                 F/A-18E    Lot 1                                              DAB               Flight
                                                                   ORD       FSD     Lot 12    Lot 14    Lot 15    Lot 19     March   PDR June    test
                                                                                                                              1992      1993     results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fighter Escort Radius (NM)....................................       410       362       343       341       331       330       420       423       434
Interdiction Radius (NM)......................................       430       415       376       374       370       369       520       504       512
Accel'tion (sec) 0.8M to 1.2M, 35K............................        70        55        58        58        57        57        60        67        67
Specific Excess Power, Ps (fps) 1g @ 0.9M, 10K................       600       617       599       599       699       695       637       639       661
Approach Speed (kts)..........................................       150       140       146       146       146       146       144       145       142
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--The ground rules for defining performance specifications have changed over time. The rules for the F/A-18A and the F/A-18E are different. For
  example, the flight profile for measuring Interdiction Radius was different for the F/A-18A than it is for the F/A-18E. The table above uses the F/A-
  18E rules, which have been applied to the other variants for consistency. This is why column one was changed to F/A-18E ORD vice F/A-18A
  specification.

    Question. Please state your view on the media coverage about the F/
A-18E/F ``wing drop'' problem and about comparisons of E/F performance 
to earlier models of the F-18.
    Do you believe it useful or important for the public to be informed 
of these issues?
    Answer. Yes, the Department of the Navy fully complies with the 
Principles of Information as established by the Department of Defense 
(see attached).
    Question. Please provide copies of Navy testimony or printed 
reports to Congress or the public identifying the ``wing drop'' problem 
before the first instance of its being reported in the media.
    Answer. Neither printed reports nor Navy testimony were requested 
by Congress or the public prior to initial reporting in the media. 
However, wing drop was included in a list of technical issues to be 
solved in flight test during a briefing to Senator Russell Feingold (D-
WI) in a visit to NAS Patuxent River, Maryland, in May 1997. For 
informational purposes, provided are an F/A-18E/F Wing Drop Awareness 
Chronology dated February 16, 1998 and responses to questions submitted 
by Mr. Creighton Greene, Professional Staff Member, Senate Armed 
Services Committee, in December 1997.
    Question. Why does the Navy compare the E/F to the lower 
performance (i.e. Lot 12 version of the C/D model rather than the 
current (i.e. Lot 19) version? Please present a comparison of the C/D 
Lot 12 to Lot 19 on all significant performance criteria.
    Answer. The attached chart provides the comparison of Lot 12 to Lot 
19. As the Navy developed the ORD in 1991, to support the Defense 
Acquisition Board in 1992, the current version of the F/A-18C/D was the 
Lot 12. Therefore, the Lot 12 F/A-18C/D was used to develop the 
performance baseline for the F/A-18E/F. Newer Lots were planned at the 
time but their performance parameters had not been defined.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    F/A-18C                            F/A-18E
                                                                           F/A-18A ---------------------------------------------------------------------
                                                                 F/A-18E    Lot 1                                              DAB               Flight
                                                                   ORD       FSD     Lot 12    Lot 14    Lot 15    Lot 19     March   PDR June    test
                                                                                                                              1992      1993     results
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fighter Escort Radius (NM)....................................       410       362       343       341       331       330       420       423       434
Interdiction Radius (NM)......................................       430       415       376       374       370       369       520       504       512
Accel'tion (sec) 0.8M to 1.2M, 35K............................        70        55        58        58        57        57        60        67        67
Specific Excess Power, Ps (fps) 1g @ 0.9M, 10K................       600       617       599       599       699       695       637       639       661
Approach Speed (kts)..........................................       150       140       146       146       146       146       144       145       142
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--The ground rules for defining performance specifications have changed over time. The rules for the F/A-18A and the F/A-18E are different. For
  example, the flight profile for measuring Interdiction Radius was different for the F/A-18A than it is for the F/A-18E. The table above uses the F/A-
  18E rules, which have been applied to the other variants for consistency. This is why column one was changed to F/A-18E ORD vice F/A-18A
  specification.

                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
                           tactical tomahawk
    Question. Admiral Johnson, my understanding is that if funding for 
the Tactical Tomahawk program were approved, the Navy would forgo the 
procurement of approximately 100 missiles. In 1996, Admiral Murphy 
indicated that surface ships were being deployed with only 75 percent 
of their VLS tubes filled. If the Navy proceeds to develop the Tactical 
Tomahawk program without procuring additional cruise missiles, how 
would you assure operational requirements be met?
    Answer. The Navy will rely on an existing inventory of 
approximately 2,800 Block II/III missiles to meet operational 
requirements. There will only be a 25 month period between when the 
last Block III missile is contracted for delivery (September 1999) and 
when the Tactical Tomahawk production line starts (October 2001).
                   vertical replenishment helicopter
    Question. It is my understanding that the Navy concluded the 
Vertical Replenishment Helicopter demonstration this past January. Do 
both the CH-60 and commercial alternatives provide the same mission 
capabilities?
    Answer. The CH-60 Vertical Replenishment (VERTREP) demonstration 
went very well. The prototype aircraft successfully demonstrated 
several phases of the combat logistics mission to include: VERTREP, 
Vertical On Board Delivery (VOD), and amphibious Search and Rescue 
(SAR).
    The CH-60 provides significantly more mission capability than any 
of the commercial helicopters the Navy has demonstrated. It has a very 
robust lift capability, the ability to carry 13 passengers, internal 
cargo, and possesses an extremely good coupled hover capability for 
SAR.
    The comparative capabilities of the CH-60 and the commercial 
alternatives tested by the Navy are as follows:

----------------------------------------------------------------------------------------------------------------
                                                    CH-46        CH-60        K-MAX       BELL 212   BELL 214 SX
----------------------------------------------------------------------------------------------------------------
VERTREP (Day/Night) (D/N)......................      YES/YES
                                                   4,000 LBS      YES/YES
                                                                9,000 LBS       YES/NO
                                                                                 6,000      YES/YES
                                                                                          3,000 LBS      YES/YES
                                                                                                       6,000 LBS
INTERNAL CARGO.................................    4,000 LBS    9,000 LBS      500 LBS    3,000 LBS    3,000 LBS
PASSENGER CAPACITY.............................           16           13         NONE            8            8
SAR (D/N)......................................      YES/YES      YES/YES   YES \1\/NO       YES/NO       YES/NO
MEDICAL EVACUATION (D/N).......................      YES/YES      YES/YES        NO/NO      YES/YES      YES/YES
----------------------------------------------------------------------------------------------------------------
\1\ K-MAX SAR capability is limited to Day-Visual Flight conditions only.

                        ch-60 helicopter program
    Question. In the President's fiscal year 1999 budget, the Navy 
requested $12.7 million in RDT&E and $139.9 million in aircraft 
procurement for 4 CH-60 helicopters. Is that sufficient or are 
additional funds required to accelerate the program?
    Answer. The funding is sufficient to procure four helicopters.
                                 ______
                                 
                Question Submitted by Senator Judd Gregg
                     ship depot maintenance funding
    Question. Active ship depot maintenance was funded at 96 percent of 
the requirement in fiscal year 1998 and in fiscal year 1999 this 
funding drops to 91 percent of the requirement.
    What is the effect on readiness of this unfunded requirement? What 
type of equipment or ships will not be maintained?
    Answer. With current funding levels, all maintenance required to 
support ship mission capabilities is accomplished. While mission 
essential maintenance and repairs to correct safety deficiencies are 
always completed, deferred or non-accomplished maintenance includes 
quality-of-life improvements, investments in new technology, and some 
maintenance tasks that simply improve system performance or restore 
design operating parameters. Considering ship maintenance in the 
overall Navy budget, current funding levels ensure ship material 
readiness to successfully complete the mission, with a requirement to 
manage a level of risk for deferred work.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
                f/a-18e/f and joint strike fighter [jsf]
    Question. The current projected cost for the F/A-18E/F is $47 
million per copy, and the projected cost for the JSF is just under $40 
million in today's dollars ($32 to $36 million projected in 1994 
dollars).
    Does the Navy believe that the JSF will materialize as a carrier-
suitable aircraft?
    Answer. Yes. The current JSF development process shows great 
promise in delivering new technologies and manufacturing processes that 
will lead to a more affordable product.
    Question. Does the Navy believe that the JSF will come in at the 
projected cost?
    Answer. The centerpiece of the JSF Program is affordability. This 
demands a new way of doing business, and JSF is accomplishing that. The 
program has used, from its inception, principles such as Cost As an 
Independent Variable (CAIV) to balance weapon system capability against 
its life cycle cost. The JSF is effectively achieving such a balance 
through the use of Cost and Operational Performance Trades (COPT); 
investing in key technologies; emphasizing design, manufacturing and 
support initiatives; and leveraging the benefits of commonality to 
reduce the total ownership cost to the warfighter.
    Question. Long-term, will the F/A-18E/F be cheaper and a better 
aircraft for the Navy than the JSF?
    Answer. The current program estimates of recurring flyaway costs 
for the F/A-18E/F and the JSF (fiscal year 1997 dollars) are $47 
million and $33 to $40 million respectively. The goal of the JSF 
program is to provide additional capability that will complement the 
capabilities of the F/A-18E/F at an affordable price.
    Question. Does the Navy want the JSF if it comes in at over $40 
million per copy, or would it prefer more F/A-18E/F's?
    Answer. The current estimate of the JSF carrier variant is well 
below $40 million and within the range of the $31 to $38 million 
(fiscal year 1994 dollars) total cost goal. The goal of JSF is to 
provide additional capability that will complement the capabilities of 
the F/A-18E/F at an affordable price. There are no indications at this 
time that JSF will not meet its cost target.
                                 ______
                                 
             Questions Submitted to Gen. Charles C. Krulak
              Questions Submitted by Senator Thad Cochran
                       lha service life extension
    Question. What is your thinking about the service life of LHA 
ships?
    Answer. My view is that it is wiser to procure new LHD's vice 
refurbishing our LHA's. The LHD is larger, has more carrying 
capability, and can better accommodate our new technology systems that 
have been fielded in recent years or will soon be added to our force. 
In short, it will carry more tanks, aircraft, assault vehicles, and 
LCAC's than its LHA predecessor.
    As currently planned, the LHA service life extension, if initiated, 
would start in fiscal year 2005. Current estimates for the service life 
extension program (SLEP) range from $800 million to $1.2 billion. The 
estimated cost of a new LHD (modified) in fiscal year 2005 is $2.3 to 
$2.5 billion. (This estimate includes approximately $750 million to 
restart the production line.) The cost of a new LHD in fiscal year 1999 
would be approximately 20 to 40 percent more than the cost of the LHA 
service life extension, and would provide the Nation with a much more 
capable LHD that would complement our forward presence forces for 40 
years, as opposed to the 15 to 20 years gained with a service life 
extension. We need to engage this issue actively so a solution can be 
implemented before the end of the LHA's planned service life. I am 
working with the Chief of Naval Operations on this important 
requirement.
    Big deck amphibious ships are at the heart of the Navy-Marine Corps 
team. Building a new LHD, more capable of accommodating leaps in 
technology and expansion of equipment, would be a most welcome 
initiative.
    Question. Using ``ball-park'' figures, about how much does an LHA 
service life extension cost? How does this compare to the cost of 
construction of a new LHD ship, in similar year constant dollars?
    Answer. As currently planned, the LHA service life extension, if 
initiated, would start in fiscal year 2005. Current cost estimates 
range from $800 million to $1.2 billion. Estimated cost of a new LHD 
(modified) in fiscal year 2005 is $2.3 to $2.5 billion. This estimate 
includes approximately $750 million to restart the production line.
    Question. Would you be in favor of Congress adding some or all of 
the $1.3 billion required to construct a new LHD ship in fiscal year 
1999 rather than to perform an LHA service life extension in 2003?
    Answer. I believe procurement of a new LHD is a wiser investment 
for our Nation than refurbishing our oldest LHA. The LHD is larger, has 
more carrying capability, and can better accommodate our new technology 
systems that have been fielded in recent years or will soon be added to 
our force. In short, it will carry more cargo, more aircraft, and more 
LCAC's than its LHA predecessor.
    Big deck amphibious ships are at the heart of the Navy-Marine Corps 
team. Building a new LHD, more capable of accommodating leaps in 
technology and expansion of equipment, would be a most welcome 
initiative when topline constraints permit such an inclusion. I would 
ask however, that financing this requirement not come at the expense of 
other programs financed in the Department's fiscal year 1999 request. I 
am working with the Chief of Naval Operations on this important 
requirement and will continue to do so as we develop future budgets.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                             privatization
    Question. How did the Navy and Marine Corps arrive at the number of 
civilian and military jobs to be eliminated and/or contracted out?
    Answer. The Marine Corps has committed to a number of Full Time 
Equivalents for competitive review (5,000). We have not determined the 
number of jobs, either military or civilian, which will be eliminated 
and/or contracted out. This will be determined by the results of the 
competition.
    Question. Were specific, individual studies performed to analyze 
the savings and appropriateness of activities to compete? Or, was a 
goal imposed ``from the top?''
    Answer. Reviewing historical information, the Defense Science Board 
found that savings could be gained through the competitive process of 
all base commercial activities (those functions which could be 
performed by a commercial provider). The commercial activities which 
will be competed by the Marine Corps will be chosen by both 
headquarters and installation commands after analysis of requirements 
(operational and manpower) to determine which functions are inherently 
governmental and therefore remain in-house. The A-76 process, as set 
forth by OMB, tracks initial savings from the competition. The Marine 
Corps will utilize Activity Based Costing to track costs over time for 
both in-house and contract accomplishment.
    Question. How did the Navy/Marine Corps determine that contracting 
out saves 20 percent? Why does the Air Force assume different savings? 
Please provide copies of the analysis you performed to come to the 
conclusion that 20 percent was the right number.
    Answer. The Marine Corps is assuming 30 percent savings if a 
commercial contractor successfully wins an A-76 competition. If the in-
house Most Efficient Organization wins, savings are assumed to be 20 
percent. These figures are based on the Defense Science Board analysis 
of historical information which is on file with the Secretary of 
Defense. The Marine Corps cannot comment on the Air Force's assumed 
savings rate.
    Question. With fewer military personnel and DOD civilians after all 
this contracting out, what will be the impact on overseas rotations and 
``perstempo'' problems?
    Answer. The Marine Corps is looking into the effects of competitive 
sourcing on rotational assignments. However, these effects should be 
minimal given our clear distinction between garrison and Fleet Marine 
Force units. The Marine Corps will not execute a program which 
negatively impacts our warfighting capability.
    Question. How will the Navy and Marine Corps monitor and document 
the progress in achieving your outsourcing programs and achieving the 
planned savings? How will these data be confirmed by an outside party?
    Answer. The Marine Corps is implementing activity based costing 
within facilities maintenance and logistics aboard its U.S. bases. This 
will establish a baseline cost for those related base commercial 
activities within two areas which produce approximately 70 percent of 
installation operating costs. These baseline costs can then be compared 
to either the A-76 cost comparison process generated most efficient 
organization costs and/or commercial sector contract offers.
    We expect agencies outside the Marine Corps, such as the Naval 
Audit Service, DOD IG, and GAO will analyze our processes, assumptions 
and competition results.
    Question. What actions do you plan if the savings do not 
materialize as planned? More outsourcing? Cuts in procurement? Force 
structure? Readiness?
    Answer. If actual savings returns differ from planned assumptions, 
budgets will be adjusted based on the shortfalls. Since savings are 
produced by increasing efficiencies in the supporting establishment and 
those savings are to be applied to procurement modernization; the 
effects, for the Marine Corps, of less than anticipated savings, would 
be a decrease in procurement and an increase in Operation and 
Maintenance.
                               readiness
    Question. What do your latest, 1998, data show about pilot 
retention? Is it getting better or worse?
    Is it better or worse for married pilots? With families? What are 
the socioeconomic profiles of the pilots leaving? Staying?
    Answer. As of March 16, there have been 70 fixed wing pilot 
resignations in fiscal year 1998. These figures and the trend for the 
year are well below the fiscal year 1997 rate (92) and slightly higher 
than the fiscal year 1996 rate (69) as of March of each year.
    We do not track pilot ressignations by single/married/divorced 
categories. Current percentages of overall USMC Officers (O-3 and O-4) 
include the following: 80 percent Married, 4 percent Divorced, and 16 
percent Single. There is no common thread to the socioeconomic profiles 
of the pilots leaving or staying.
    All pilots are now eligible for the Aviation Continuation Pay (ACP) 
program making them the highest paid company/field grade (O-3 and O-4) 
officers in the Marine Corps.
    Question. What are the specific complaints of pilots leaving the 
Marine Corps?
    Answer. In September 1997, an Aviation sponsored briefing team, 
composed of junior field grade officers traveled to both coasts to 
visit ready rooms and talk to aviators about the facts and myths of a 
career as a Marine aviator. Aviators provided the team with frank 
discussion and openly voiced their concerns. There was no single reason 
that influences an aviator's decision to resign. The major reasons 
cited to the briefing team for leaving the Corps include the following: 
(a) Increased airline hiring rates--easily gain employment--greater 
family stability; (b) deployed time away from the family; (c) desire to 
fly more hours (AV-8B and CH-53 concerns); (d) excessive time 
participating in Joint/Interservice/Intraservice Exercises which 
provide limited training value for individual pilot skills; and (e) 
uncertainty about future military downsizing.
    Question. Which of your quality of life programs are working? Which 
are not? Which generate the best payoff in terms of retention? Please 
provide the data and analysis to substantiate your answer, or are you 
using judgment or anecdotal evidence to assess the degrees of success 
or failure? Does the Navy have any studies on these issues? By 
independent organizations? Please provide copies.
    Answer. Marine Corps quality of life (QOL) programs contribute to 
military mission outcomes. This was demonstrated in the 1994 ``Quality 
of Life in the Marine Corps'' study conducted by the Navy Personnel and 
Research Development Center (NPRDC). This study statistically linked 
the QOL program investments to readiness and retention. This study is 
scheduled to be readministered in 1998 to reassess Marines' QOL across 
11 life areas and their relation to mission outcomes.
    There is a myriad of QOL program-specific research, such as the MWR 
Patron Needs Assessment, also conducted by NPRDC and completed in 1997. 
According to data, the top 10 programs/services rated as most important 
to Marines were: (1) Exchange; (2) Information, Tickets and Tours 
(ITT); (3) Fitness Centers; (4) ATM Machine; (5) Military Clothing 
Store; (6) Gas Station; (7) Movie Theater; (8) Barber Shop; (9) Auto 
Hobby Shop; and (10) Swimming Pools. Two other recent QOL program-
specific studies conducted were: the Effectiveness of the Voluntary 
Education Program, performed by the Center for Naval Analysis, and the 
Spouse Employment Survey and Analysis, performed by Human Technology, 
Inc. and CODA Inc.
    The Marine Corps has a robust QOL research program, with many 
ongoing initiatives to determine both Marine and mission needs. In 
1998, an ``Assessment of Program Contributions to Military Outcomes,'' 
will obtain effective program measures for 22 MWR and Human Resources 
programs, and assess each program's contribution to military outcomes. 
Another study, the ``Marine Corps MWR Leadership Assessment,'' will 
gather commander's and senior NCO leadership recommendations for MWR 
mission support. Both studies will be conducted by NPRDC.
    Research results are used as the basis for policy and resource 
decisions. Combined with commanders' leadership experience and 
judgment, the Marine Corps QOL programs provide a demonstrated return 
on investment to mission outcomes. All of our Quality of Life programs 
are producing positive results.
    One of the programs which is working is the Voluntary Education 
Program. Recently a study was completed by Center of Navy Analysis on 
the effectiveness of the VolEd Program. Although the focus of the study 
was the Navy program, we believe similar results would be obtained for 
all services. VolEd participants have significantly better promotion 
prospects. Academic skill participants are more likely to crossrate. 
VolEd participants have significantly lower demotion rates and higher 
reenlistment rates. A copy of the Navy's Report ``Effectiveness of the 
Voluntary Education Program'' (43 pages) is available upon request.
    Family Programs improve Quality of Life for Marines and their 
families and enhance retention and readiness by providing the tools 
needed to meet the challenges of the military lifestyle. Family Service 
Centers provided 289,000 units of service in their first year of 
operation in 1988. In 1997, 1.7 million units of service were provided. 
A recent study by Caliber Associates looked at selected family service 
center programs (all services) and determined that there was a nexus 
between family service center programs and readiness.
    The USMC child care programs are also providing essential services 
which affect readiness. The demand for child care exceeds the current 
capacity but we are reviewing our delivery systems to make certain that 
we are providing the services that families most require. For example, 
we are focusing on ways to expand care for children three years and 
under as this represents the greatest percentage of our unmet need. We 
do not have the data to support an argument in terms of child care's 
payoff for retention.
    Question. What changes have been occurring in spouse, child, and 
substance abuse for the past two years? Please differentiate between 
officers and enlisted, length of service, and among major military 
specialties and perstempo rates.
    What is the role of the current high perstempo in any changes in 
family or substance abuse? Please provide copies of any analysis you 
have of the relationship.
    Answer. In the past two years, there have been no significant 
changes in substance abuse. Preliminary figures for the number of 
substantiated incidents of domestic violence in fiscal year 1997 are 
1,597 and for child abuse 844. The figures for fiscal year 1996 are 
1,979 for domestic violence and 969 for child abuse. The USMC family 
violence reports do not regularly differentiate between officer and 
enlisted. Also, we have not to date maintained data on length of 
service or major military specialty.
    We have commissioned a special study by the University of Maryland 
School of Social Work in fiscal year 1996 to determine if the high 
OPTEMPO in fiscal year 1996 was a causal factor in domestic violence. 
The findings were that OPTEMPO is not a causal factor in family 
violence. However, deployments may precipitate incidents of family 
violence by someone already disposed to use violence.
                                 ______
                                 
            Question Submitted by Senator Richard C. Shelby
                           hellfire missiles
    Question. General Krulak, has the Marine Corps obligated the fiscal 
year 1998 funding that was provided for the procurement of Hellfire 
missiles? If not, why not, and when does the Marine Corps intend to 
procure these missiles?
    Answer. The funding for the fiscal year 1998 Hellfire plus-up was 
received at NAVAIR on January 14, 1998. PMA-242, the NAVAIR Hellfire 
Program Office, initiated contract action through the Air to Ground 
Missile Systems (AGMS) Project Office, Redstone Arsenal, Huntsville, 
AL. The Army is the executive agent for Hellfire and has already 
exercised all options on the previous Hellfire Contract, so a new 
contract must be initiated. Contract award is expected NLT June 30, 
1998. Deliveries are estimated to be approximately 24 months after 
contract award.
                                 ______
                                 
               Questions Submitted by Senator Judd Gregg
          chemical biological incident response force [cbirf]
    Question. The Marine Corps has formed a Chemical/Biological 
Incident Response Force (CBIRF) to respond to chemical or biological 
terrorist incidents. I understand that the fiscal year 1999 Department 
of Defense budget request provides approximately $49 million for 
National Guard units to bring in NBC equipment to augment early 
responders in a crisis.
    Please update me on the Marine's Chemical/Biological Response Force 
activities since you appeared here last April?
    Answer. The CBIRF Program has continued on the path of providing 
consequence management support and capability to those who need this 
type of assistance today and who will need it in the future. Fiscal 
year 1998 funding will complete the procurement of mission critical and 
state-of-the-art CBIRF equipment. We have procured both state-of-the-
art protection for Marines, and special items that will detect and 
track weapons of mass destruction. The Marine Corps has also procured a 
block of modern medical equipment and treatment items to decontaminate 
both equipment and personnel. Some of the most recent efforts include 
portable and mobile mass spectrometers and a standoff chemical detector 
that can identify component agent signatures from a standoff location.
    The Marine Corps is taking another step toward providing a 
consequence management capability around the world. Marine 
Expeditionary Units (MEU's) will have a CBIRF capability added to their 
current mission capability. We have trained one MEU with CBIRF 
capability and it deployed with a small package of equipment on loan 
from CBIRF. We have trained and loaned more extensive equipment to a 
second MEU, and we are preparing the third MEU to be even more capable 
than the first two. The third MEU will be used as a baseline to train 
and equip all MEU's in the future.
    Question. How will the Marine's Response Force coordinate with and 
work with these National Guard Units which are coming on line?
    Answer. The Marine Corps has participated in several coordination 
meetings with National Guard NBC representatives. The joint approach is 
for the National Guard to use the CBIRF's list of equipment as a 
baseline to rapidly construct an operational domestic preparedness 
organization. Using CBIRF equipment will enhance the National Guard's 
ability to respond to incidents involving weapons of mass destruction. 
It will also meet both the Secretary's Quadrennial Defense Review 
recommendations and the intent of the Congress. This will enable the 
National Guard to become a ready asset to both state and local 
authorities in future NBC consequence management. The Marine Corps has 
negotiated National Guard options on all recent CBIRF procurements.
                                 ah-1w
    Question. The Marine Corps has an ongoing program to equip the AH-
1W Super Cobra helicopter fleet with a Night Targeting System which 
provides the gunner the capability to locate and identify targets at 
night, lock the cross hairs on the target, and fire the missile with 
lethal accuracy, all from a safe distance from the target.
    What is the status of the fiscal year 1998 $10.9 million authorized 
and appropriated for the AH-1W Night Targeting System?
    Answer. The fiscal year 1998 funding has been released with 
contract award NLT June 1, 1998.
    Question. Is there an unfunded requirement for AH-1W Night 
Targeting Systems beyond those programmed in the fiscal year 1999 
budget request?
    Answer. Yes, due to topline constraints, we decided to truncate 
procurement of the AH-1W Night Targeting System (NTS). Our fiscal year 
1999 Budget Enhancement List includes an unfunded requirement of $11 
million in fiscal year 1999 to fund an additional 10 Night Targeting 
Systems.
    The Marine Corps' Night Targeting System (NTS) program is 
structured in two parts, the aircraft installation and the actual 
targeting system itself. As currently programmed, the Marine Corps will 
procure NTS installation kits for all of its 203 AH-1W's and enough NTS 
systems to outfit 178 aircraft. The current acquisition objective for 
NTS is 188. We were only able to finance 178 within topline 
constraints, leaving 10 systems unfinanced. The Primary Aircraft 
Authorization for the AH-1W is 168 and sufficient NTS's are planned to 
modify these aircraft; however, there are insufficient NTS systems to 
outfit the pipeline and attrition aircraft.
    Procuring an additional 10 Night Targeting systems in fiscal year 
1999 would allow the Marine Corps to obtain its force objective of 188 
aircraft. Procurement of these additional systems is required for 
modification of the AH-1W Total Operating Aircraft Inventory (TAOI) to 
maintain this critical warfighting capability until introduction of the 
4BW. I would be concerned, however, if funding for these 10 systems 
came at the expense of other programs currently financed in the fiscal 
year 1999 request or at the expense of funding requested in the fiscal 
year 1998 Supplemental.
                                 ______
                                 
              Questions Submitted by Senator Dale Bumpers
                          amphibious shipping
    Question. In fiscal year 1998 the Congress added to the Navy's 
budget $10 million for pre-EMD engineering to marinize the Army 
Tactical Missile System (ATACMS). It was Congress' intent that this 
seed money was to be followed by a Navy program to integrate the 
marinized Navy Tactical Missile System (NTACMS) into the fleet for the 
Navy's mission to provide fire support in land attack warfare.
    Is deep fire support a necessary requirement for planning and 
successful execution of USMC scheme of maneuver employing MV-22?
    Answer. The MV-22 is a key component of the Marine Corps' concept 
for the projection of naval power into the littorals-Operational 
Maneuver From The Sea (OMFTS). Along with the LCAC and AAAV, the MV-22 
will nearly triple the battlespace within which today's commanders can 
operate. The expanded battlespace envisioned with OMFTS and MV-22 
capabilities has changed the Marine Corps' approach to fire support. 
OMFTS requires rapid movement not just ashore but rather from ship to 
an objective which may be 200 nautical miles from offshore vessels, 
well out of range of current WWII vintage naval gunfire assets. NTACMS 
will provide a fire support asset with the increased range, accuracy 
and lethality necessary to support the operational needs of the OMFTS 
concept. However, due to the cost per missile and the dispersion 
patterns of the NTACMS, the Marine Corps will require improved shore-
based fire support systems as well. Shore-based systems will provide a 
responsive, streamlined and cost effective fire support means to engage 
low end tactical targets. It is the combined effects of fires, sea-
based (NTACMS), shore-based and aviation which are exploited to allow 
forces the freedom of maneuver. Deep fire support provided by NTACM's 
is complimentary to aviation and shore-based fire support, all three 
means providing the layered all-weather capability to sustain OMFTS.
    Question. Does the USMC have a requirement for sea-based deep fires 
land attack missile? If so, how has the USMC requirement for deep fires 
land attack missile been addressed?
    Answer. Yes. The Marine Corps requirement for a Land Attack Missile 
is that it must have the range to support Operational Maneuver from the 
Sea (OMFTS) and Ship-to-Objective Maneuver to 200 nautical miles 
inland. It must also have sufficient lethality to prevent enemy 
equipment and/or troops from continuing their mission.
    The Marine Corps' requirement for deep fires Land Attack Missile is 
being adequately addressed by the Navy. The Navy is currently working 
to acquire additional funding to apply towards mid- and far-term Naval 
Surface Fire Support (NSFS) programs, which include a Land Attack 
Missile. The Navy is examining two systems: the Land Attack Standard 
Missile (LASM) and a Naval version of the Army Tactical Missile System 
(ATACMS). The Navy abbreviation is (NTACMS). The Marine Corps does not 
favor one system over another. It simply desires that whatever system 
the Navy selects meet the requirements articulated above. Both would 
currently meet the lethality requirement and both are eventually 
expected to meet the 200 nautical miles range requirement.
    Question. Does the USMC concur with the Navy's assessments of land 
attack missiles being considered for the deep fires mission?
    Answer. Yes. The weapons systems currently under consideration by 
the Navy will eventually meet the Marine Corps' deep fires 
requirements. The two systems are the Land Attack Standard Missile 
(LASM), and a Naval version of the Army Tactical Missile System 
(ATACMS). The Navy abbreviation is (NTACMS). Both would currently meet 
the lethality requirement, and both are expected to meet the 200 
nautical miles range requirement.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
                       joint strike fighter [jsf]
    Question. The Marine Corps is requesting to purchase the Short Take 
Off Vertical Landing (STOVL) version of the Joint Strike Fighter (JSF). 
What is the projected cost of this version of the JSF, in 1997 dollars, 
when it is delivered to the Marine Corps?
    Answer. The Services' Joint Interim Requirements Document (JIRD) 
includes a unit recurring flyaway cost goal of $30 to $35 million in 
fiscal year 1994 dollars for the JSF STOVL variant. This equates to $32 
to $37 million in fiscal year 1997 dollars.
    Question. Will the development of the STOVL version of the JSF on 
the schedule required by the Marine Corps replacement needs necessitate 
additional costs?
    Answer. No, the program was planned to meet USMC needs.
    Question. What portion of the $930 million 1999 budget request for 
development of the JSF will be allocated to development of the STOVL 
version?
    Answer. The JSF variants are being developed as an affordable, 
highly common family of aircraft to meet service requirements developed 
from a joint perspective. Development costs are not severable by 
variant.

                          subcommittee recess

    Senator Stevens. Our next hearing will be on the National 
Guard issues on March 18. We appreciate your courtesy in 
visiting with us.
    General Krulak. Thank you, Mr. Chairman.
    Admiral Johnson. Thank you, Mr. Chairman.
    Secretary Dalton. Thank you, Mr. Chairman.
    [Whereupon, at 12:05 p.m., Wednesday, March 11, the 
subcommittee was recessed, to reconvene at 10 a.m., Wednesday, 
March 18.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                       WEDNESDAY, MARCH 18, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:03 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Cochran, Bond, Leahy, Bumpers, 
and Dorgan.

                         DEPARTMENT OF DEFENSE

                         National Guard Bureau

STATEMENTS OF:
        LT. GEN. EDWARD D. BACA, CHIEF
        MAJ. GEN. PAUL A. WEAVER, JR., DIRECTOR, AIR NATIONAL GUARD
        MAJ. GEN. WILLIAM A. NAVAS, DIRECTOR, ARMY NATIONAL GUARD

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Good morning, Generals. I am sorry to be 
late. I had 25 children from Alaska. It was a long way for them 
to come, so I put them first this morning.
    We are going to hear from two panels today, first the 
leaders of the National Guard will testify on the 1999 
priorities, and they are going to be followed by officials and 
participants from the National Guard Youth Challenge program.
    I want to start with the National Guard Bureau. Lieutenant 
General Baca, it is nice to see you here. He is accompanied by 
the Director of the Army Guard, Maj. Gen. Bill Navas, and the 
Director of the Air National Guard, Maj. Gen. Paul Weaver.
    We have taken the lead, I think, in addressing the question 
of readiness and the maintenance and acquisition of equipment 
for the Guard. In recent years, we have witnessed the results 
of these investments, the tremendous performance of the 
National Guard in every recent overseas contingency mission, as 
well as the support for natural disasters which are occurring 
daily now around the country.
    Despite this success story, there are still proposed cuts 
now in the force structure, and in the OPTEMPO and training and 
infrastructure support funding. We are going to assess these 
funding requirements this morning at the request of Senator 
Cochran and Senator Lott. The subcommittee also wants to review 
the National Guard Youth Challenge Program. I visited that 
program in our State, as you know, and we have our Adjutant 
General here, I understand.
    This program has been very widely recognized for 
achievement and currently is being carried out in 15 States. 
Another 23 States would like to start programs. They are on the 
waiting list, and we need approval of funding for that purpose.
    We have supported the Youth Challenge Program from the very 
beginning. There were a great many skeptics about that program. 
My colleague from Hawaii has just returned from a trip and will 
not be with us this morning, but he and I both feel that the 
programs in our States have been very successful, and I look 
forward to having General Lestenkof--Jake is here to testify 
and describe the Alaska program.
    I know there are others here who have some comments about 
the program, but I want you to know that in partnership, there 
is a bipartisan partnership here on this committee, we will do 
everything we can to address your needs this year and to assure 
you that you have the funds to continue the marvelous success 
you have had in past years.
    So let me first, under the early bird rule, recognize the 
Senator from Vermont. You have an opening statement of any 
kind?
    Senator Leahy. I do not, Mr. Chairman. I know you want to 
get into this. I have already discussed with Generals Navas and 
Baca some issues regarding some Blackhawks in Vermont, and I 
appreciate the very good news we have in that regard, and so at 
the risk of talking them out of it. Thank you.

                   STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. Mr. Chairman, I join you in welcoming our 
panel of witnesses. It is always a pleasure to have this 
hearing and review the activity of the National Guard--Army and 
Air Force.
    We appreciate very much the outstanding work that is done 
by the National Guard in our State. We are aware of the fact 
that we have Air Guard units who typically get invited to 
participate in these foreign operations, particularly in the 
Bosnia area.
    We have seen a lot of missions flown by Guard units there. 
With this operational tempo continuing to increase, with the 
deployments to other areas of the country as well I am 
concerned that we are not seeing enough funding allocated to 
the National Guard.
    And I am not accusing anybody of being too frugal with the 
scarce dollars, because we are seeing a declining defense 
budget in real terms, even when we are increasing the 
activities, having emergency deployments and supplemental 
appropriations that we marked up in this committee yesterday. I 
am worried that we are not going to be able to continue to 
recruit the quality of people to serve in the National Guard 
and to fly the planes and do the challenging work that has to 
be done, supposedly on a part-time basis, and still do it with 
a proficiency and skill that the No. 1 power in the world 
expects from its military forces.
    So these are issues that I think we should address this 
morning, and I look forward to your testimony in connection 
with those concerns.

                         balance of Allocation

    Thanks, Mr. Chairman.
    Senator Stevens. Generals, I think you should know that we 
are marking up the budget this morning. Many of our members are 
also members of the Budget Committee, and we have two other 
meetings of our own committee this morning. A number of people 
here on the committee want to submit questions to you and have 
asked me to convey their regards to you.
    I think that we are all very much aware of what the 
situation is, and I was going over the briefing my staff gave 
me to look at last night before this hearing and was struck by 
the percentage that they pointed out. In terms of military 
construction alone, the Guard is going to receive 7 percent of 
Milcon requests, and the Army Guard alone represents 42 percent 
of the combined Active Army and Guard personnel strength.
    The balance of the allocation that are before us in the 
proposed budget submitted by the administration are just out of 
whack. They are going to be very difficult to deal with, but we 
need your help in testimony given and questions that you are 
going to answer this morning.
    We will print all of your statements in the record as 
though read, and urge you to summarize them and give us the 
best advice you can as to how we might deal with these 
problems.
    General.

                 A vital force adding value to America

    General Baca. Thank you, Mr. Chairman. We will be brief.
    Thank you for the opportunity to testify today. You know, 
Senator Stevens, it is always a pleasure to be here before you 
and your committee.
    On a personal note, as this is my last appearance here as 
the Chief of the National Guard Bureau, I would like to thank 
you and the committee for your support during my tenure. I have 
enjoyed a productive relationship with you, which I am proud to 
say will make our National Guard a strong organization.
    Your strong and positive encouragement has enabled us to 
poise this institution for the next century, ready and prepared 
to ensure the security and safety of America.
    I have just returned from a trip to Europe, where I had the 
privilege of witnessing some of the guardsmen on the frontiers 
of freedom. I saw our people maintaining the peace in Bosnia, 
exercising with our Norwegian counterparts and moving air cargo 
in Germany. They are building a bridge to America through the 
National Guard-sponsored State partnership programs which link 
emerging democracies with our States back home.
    Our guardsmen are building a stronger peace overseas, 
strengthening America's defense, and adding value to our 
communities.
    I understand that the next panel is addressing our 
challenged youth program, Senator, and that is just one of the 
ways that we enrich our communities.
    The National Guard is indeed a vital force, with depth and 
breadth across the full range of capabilities. These men and 
women, engaged in actions all over the world, reinforced to me 
the idea that our Guard is truly the face of America. It is our 
best connection to the American people. They willingly 
sacrifice for their families, their careers, and their loved 
ones to go out there and do the tough job that we ask them to 
do. I think you will agree that this takes a special kind of 
dedication. Truly, they bring new meaning to the word 
``dedication.''
    As you read our posture statement, which we have 
distributed, you will find missions and roles statistics and 
figures, but above all you will find the story of talented 
people who care deeply about this country and readily step 
forward to play an important role in its defense. They are 
among our best and brightest, as well as our most caring and 
devoted citizens.
    The vital force we describe is a combat-oriented balanced 
force, with capabilities across the full spectrum of defense. 
It is relevant to America's national security and national 
defense needs, and it is ready to play its historic role as a 
primary first line ready Reserve Force of America's security.
    As we demobilize from the cold war, the National Guard once 
again is emerging as the inexpensive insurance policy for 
America. As you know, we stand shoulder-to-shoulder every day 
with our Active component counterparts. We are also poised to 
expand our traditional role of homeland defense to meet the new 
threats posed to us by the weapons of mass destruction.
    The Guard has a big job. It is consequently a big 
organization. It is the largest single Reserve component within 
the Department of Defense and, in terms of comparisons with the 
Active and Reserve component numbers, second behind only the 
Active Army.
    We represent almost 500,000 citizen soldiers and airmen 
from every community in America. Our Guard members meet the 
same high standards of performance as their counterparts that 
do the same jobs in the Active.
    On behalf of the dedicated men and women of the National 
Guard, I hope you will honor their commitment with the generous 
support and encouragement that you have always given us. Our 
partnership has been very successful for over 222 years, giving 
the citizens of this country unparalleled security and freedom. 
The Guard remains ready to continue that commitment to our 
country, our States and our communities, but not without 
challenges.

                           prepared statement

    On behalf of the men and women of the National Guard, I 
thank you. I also thank you personally for sharing your time 
with us today and for the opportunity of productively working 
with you during my tenure as Chief.
    Thank you, Mr. Chairman.
    [The statement follows:]
             Prepared Statement of Lt. Gen. Edward D. Baca
                   defining ``america's vital force''
    For the past four years as Chief of the National Guard Bureau I 
have been honored to represent the nearly half a million dedicated men 
and women who constitute America's organized militia-citizen warriors 
whose traditions and heritage stretch back to the days of the first 
European settlers. A number of reviews have had significant impact on 
our activities over this period: Secretary Aspin's Bottom-Up Review, 
the Commission on Roles and Missions study, the Quadrennial Defense 
Review (QDR), Secretary Cohen's Defense Reform Initiative (DRI), and, 
most recently, the National Defense Panel (NDP) assessment. A single 
consistent vector has emerged from them all: the need to rely more 
heavily on the National Guard in planning America's defense for 
tomorrow. In presenting this, my valedictory posture statement to 
Congress, I address you with a profound conviction--clear and 
unshakable--that today the National Guard is once again emerging as 
America's ``Vital Force.''
The Imperative of Change
    With our country's defense budgets at the lowest relative levels 
since the beginning of World War II, our military establishment moving 
away from the military constructs of the Cold War, and the emerging 
world order of the 21st century yet to take solid form, there are new 
military requirements to satisfy and new economic imperatives to honor. 
Technologically, this requires us to seek new standards of performance 
and cost-effectiveness. Culturally, however, the process is a familiar 
one.
    The essential requirement is that we reshape the institutions of 
national defense to meet changed realities. The talent to do this--
adapt in the face of new threats and new opportunities--has been an 
element of national character from the earliest colonial days. 
Americans have been in this situation before and made the right choice: 
trust in and rely on the militia heritage that has sustained us for 
over 360 years.
    The post-Cold War era demands a national defense force that is 
Versatile, Ready, and Affordable. A Total Force approach that relies on 
a strong National Guard satisfies these requirements. As the National 
Defense Panel noted, it is time to resume making full use of one of our 
most valuable national resources--the American citizen soldier. It is 
time to anticipate a growing National Guard role in the defense 
missions of the 21st century, and to resource and mission accordingly. 
And it is time to recognize that the requirements of tomorrow call for 
National Guard forces that are balanced, stabilized, modernized, and 
integrated wholly into the Total Force structure.
The Guard and National Military Strategy
    Our current National Military Strategy provides a sound blueprint 
for meeting the national security demands of today and building the 
force of tomorrow. In Shaping the international environment to reduce 
risk and enhance global security, our citizen soldiers and airmen bring 
American values, social diversity, and unique technical skills to the 
task of promoting the establishment of democratic institutions abroad. 
In Responding across the full spectrum of conflict when deterrence and 
diplomacy fail, they prove daily that the National Guard is a Global 
Guard which can be as combat-ready as it is resourced to be. And in 
Preparing Now for an uncertain future, they craft innovative approaches 
to training and readiness, developing low-cost solutions to equipment 
upgrade requirements and willingly undertaking new missions as 
committed members of the Total Force team. Their performance is 
magnificent; their potential, unlimited.
    The National Guard leverages minimal investment to sustain enormous 
capability. For less than five percent of the entire DOD budget, we 
provide a reliable, high-quality, commercial-off-the-shelf resource 
that comes ruggedized, missionized, and ready for service. As members 
of a dual-role force with three missions, our men and women have a 
positive impact that can be felt on a global scale, on a national 
scale, and in the neighborhoods and communities across America. Whether 
serving in a Federal capacity to defend national interests in the 
Persian Gulf, in a State capacity to protect lives and property 
threatened by natural disaster, or promoting youth opportunity and drug 
demand reduction programs in their hometowns, your Guard members are 
helping defend and strengthen America in a way no other American 
military organization can.
The National Guard Vision
    Former Chairman of the Joint Chiefs of Staff General John 
Shalikashvili left a strong legacy in Joint Vision 2010, calling for 
America's military to achieve and maintain full-spectrum dominance by 
leveraging information superiority and technological innovation. We in 
the National Guard have crafted a vision of our own that supports this 
fully and are pursuing it steadily as we become, once again, America's 
Force for the Future.

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                               Our Vision
    The National Guard--the most ready reserve component in the world--
led, trained, equipped, and resourced to accomplish national security 
and military objectives while providing the States a balanced force of 
units with organic chains of command capable of performing the military 
support mission.

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                   sustaining a combat-oriented force
    The National Guard is--and must remain--a combat-oriented force. In 
a Federal role, our primary mission is to provide forces for global 
service in support of the unified commanders in chief (CINC). When 
America's military force structure stabilizes, the Army National Guard 
will furnish 58 percent of the Army's combat forces, 36 percent of its 
combat support, and 31 percent of its combat service support. The Army 
Guard's 15 enhanced Separate Brigades are included in CINC war plans 
for both Korea and Southwest Asia. The Air National Guard, already 
well-integrated into a Total Force team with the Air Force and Air 
Force Reserve Command, currently provides 100 percent of our nation's 
homeland air defense, almost 80 percent of the Air Force's combat 
communications, nearly half of its theater airlift and aerial refueling 
aircraft, and almost one-third of its fighter/bomber assets. Dedicated 
air defense will be eliminated in the future, but the units now 
performing this task will re-role as general purpose fighter forces and 
continue pulling their weight on the combat team.
    Balance remains a critical issue to be monitored closely. Balance 
is the key to flexibility, and flexibility is vital if we are to be 
ready to meet the uncertain threats of the future: major theater war 
involving regional strongmen; asymmetric attacks that skirt our 
strengths and attempt to strike only at our perceived vulnerabilities; 
transnational challenges posed by radical ideologies and criminal 
factions; and the unanticipated--and unanticipatable--wild-card threats 
yet to emerge. The Army National Guard must continue to field a 
proportional mix of combat, support, and service support forces. The 
Air National Guard must continue to operate a combination of fighter, 
bomber, airlift, and support aircraft, and maintain appropriate other 
ground, space, and related support skills. And both services must 
expand into the new mission areas of national defense and the new 
technologies of warfare as these evolve. Regrettably, some would like 
to see the Guard restricted to a combat support role, or restructured 
with limited warfighting capabilities that were consolidated in a few 
regions of the country where, hypothetically, they would be ``more 
accessible'' for contingency use.
A Warfighting, War-Winning Organization
    As we continue promoting integration among the components for more 
effective warfighting, it is time to end such ``policy debates'' once 
and for all. The National Guard must continue sharing risk on the 
battlefield and in the skies over it. The lesson of Vietnam is that 
nations, not armies, fight wars. As JCS Chairman, General John W. 
Vessey, Jr., observed ``If you do not have public support, your 
security policies are invalid.'' The National Guard has a presence in 
more than 2,700 communities across all 50 States, the District of 
Columbia, Guam, the Virgin Islands, and Puerto Rico. When the National 
Guard goes to war, families and townships throughout America go to war. 
This fosters broad domestic support for just action and discourages 
questionable ventures. If an international contingency is not 
considered appropriate for the National Guard, its validity as an act 
of national security merits serious reconsideration. As to willingness 
to serve, the majority of Guard members performing Federal missions 
abroad today are volunteers. Volunteerism is in keeping with our 
traditions and beliefs, and carries the additional benefit of providing 
unified commanders early access to National Guard resources.
    Approaching the issue from another angle, some have suggested that 
war today may be ``too technical'' for America's citizen soldiers and 
airmen. Let that be put to rest, also. Among other examples of the 
skill of our soldiers and airmen, members of the Army Guard serve with 
the National Training Center's elite Opposition Force (OPFOR), and the 
Air National Guard has won or shared approximately half of the Air 
Force's prestigious William Tell air-to-air competitions since 1970. 
Guard members not only develop and maintain high levels of basic 
proficiency in their military specialties, they do so while running 
commercial businesses, managing warehouses, teaching school, repairing 
computers, serving as community leaders, and supporting and raising 
families that may not even live in the community where the member 
trains and serves. They sacrifice to serve, and serve with skill. Our 
deployment record shows that the Global Guard always performs with 
distinction when properly tasked and resourced.
The Global Guard
    Since Desert Storm the National Guard has consistently demonstrated 
its commitment to the Total Force, participating in over 40 major 
contingency, peacekeeping, and humanitarian operations. Several have 
involved extended participation--Haiti and Bosnia, for example--and 
many have been both extended and joint--such as participation on the 
Sinai Multinational Force of Observers and in operations enforcing the 
northern and southern no-fly zones over Iraq. Our men and women have 
taken on every new task assigned and mission offered with their 
customary zeal. During my tenure, that has included such missions as 
command of national air defense, transitioning into bomber aircraft, 
entering the field of space operations, providing infantry units for 
peacekeeping in Bosnia (the first activation of an Army Guard infantry 
unit since the Vietnam War), and even taking over the responsibility 
for supporting National Science Foundation operations in Antarctica. 
Support for theater CINC's has more than doubled over the past four 
years, rising from 454,000 mandays in fiscal year 1993 to over a 
million mandays in fiscal year 1997 even as our budget fell slightly. 
The continued high Operations Tempo (OPTEMPO) and Personnel Tempo 
(PERSTEMPO) of the Active forces makes this increase in Guard activity 
essential, and our people are clearly up to the task.
    Last year America's Guard men and women conducted operations in 
more than 70 countries in support of all five theater CINC's. Overseas 
activity involved training in countries like Brazil, Australia, Egypt, 
and Singapore, deploying to Qatar, Bosnia, and Korea for peacekeeping, 
and performing counternarcotics missions in Central and South America. 
The broad scope of our capabilities was exemplified by Wyoming Air 
Guard operations in Indonesia suppressing forest fires that had 
enshrouded the island nation and Malay peninsula in smoke for months, 
and by the Missouri Army Guard training Fijian soldiers in bridge 
construction. Whatever additional overseas demands the future may hold 
in store, count on your citizen soldiers and airmen to carry them out 
with the Guard's hallmark skill.
             promoting democracy abroad through engagement
    A major additional task in the National Guard's Federal role is 
that of Preventive Defense. We are uniquely postured to promote 
democratic practices abroad and find ourselves in frequent demand for 
nation-building programs, such as the North Atlantic Treaty 
Organization's Partnership for Peace program, European Command's Joint 
Contact Team Program, Southern Command's Traditional CINC Activities 
Program, and other similar activities sponsored by the Office of the 
Secretary of Defense, the Joint Staff, and various State Department 
agencies. Many are undertaken under the aegis of the State Partnership 
Program.
    There is good reason to call on the National Guard when America 
wants to present its best face to the world. Our professional militia 
provides an influential example of how a military force can be 
effective while deferring to civil authority and the rule of law. This 
is the ultimate embodiment of democratic values, particularly to the 
states of eastern Europe and the Former Soviet Union struggling to 
break with repressive pasts. National Guard personnel and the militia 
system under which they operate are models for the world. They 
illustrate how a military force of the people remains committed to the 
people. The wealth of civilian skills our Guard members take overseas--
and the diversity of non-military professions they represent--are also 
important, giving our men and women a versatility and credibility as 
goodwill ambassadors that no other American military arm can match.
The State Partnership Program
    Much of the Guard's success in promoting democracy abroad is the 
result of the State Partnership Program. To date, 30 States and Puerto 
Rico have joined as Partners or Associate Partners in extending the 
hand of friendship from grassroots America to 31 countries that would 
emulate our ways and institutions. Foreign military personnel and 
political leaders visit our country to observe how the National Guard 
operates within the State and Federal framework, and National Guard 
members reciprocate with visits back to the partner country in which 
they provide detailed information on civil-military topics like search 
and rescue, medical support, disaster response, military law, and 
family programs. Importantly, these are more than just military-to-
military contacts. By involving governors and mayors, their staffs, 
State legislatures, and the families and friends of our Guard men and 
women in building these bridges of friendship, we promote political 
``buy-in'' on national security strategy at the local level and foster 
cooperation between the Federal and State governments in other 
productive ways.
    Tasking in this area is growing rapidly. During 1997, Guard members 
repaired hospitals and orphanages in the Republic of Georgia, conducted 
joint training in Estonia, provided civil engineering support for 
nation-building projects in Cambodia, and hosted counterpart visits by 
military representatives from Hungary, Bulgaria, and Brazil, to name 
just a few of the activities conducted under this valuable bilateral 
linkage. In New Horizons, the largest combined training-humanitarian 
support exercise conducted in the western hemisphere, more than 3,400 
Guard personnel from several states conducted engineering projects in 
Belize and Panama over a 6-month period, sharpening the military skills 
of our militia men and women while demonstrating their ability and 
willingness to enhance the quality of life for hemispheric neighbors. 
We are firmly committed to sustaining this effort, which has our Guard 
men and women ``transforming the world one orphanage at a time.''
              maintaining a balanced force of capabilities
    In our Constitutionally mandated State role, the National Guard 
mission is to provide emergency support to the governors of the States 
and Territories. This includes disaster response, support to law 
enforcement officials in cases of civil disturbance, and assistance 
with such activities as wilderness rescue. While not a record year, 
1997 still saw Guard members respond to over 300 emergency callups when 
their fellow Americans required help, providing 280,000 mandays in 
support of State and regional neighbors.
    Flooding in California, Colorado, Hawaii, Idaho, Kentucky, 
Minnesota, Nevada, North and South Dakota, and Ohio, much of it record 
level, led to callups, as did tornadoes in Arkansas and Michigan. When 
Hurricane Danny lashed the Alabama coast, National Guard members were 
standing by to provide life-saving assistance and remained on scene to 
help stricken communities get started down the long path to recovery. 
In Alaska, the Army and Air Guard were credited with saving 113 lives 
in rescues of people lost, injured, or marooned across the State. On 
Guam, militia men and women provided search, rescue, and security 
support to federal and local agencies following the tragic crash of 
Korean Airlines Flight 801. And in an effort that is certain to presage 
further inter-State cooperation, crews from the Air National Guards of 
Oklahoma, Texas, and Wyoming joined those of embattled New Mexico last 
December to airdrop feed to cattle stranded by blizzards.
Readiness and Redundancy
    The unpredictability and devastating impact of such emergencies 
underscores how important it is for the National Guard to field a 
balanced mix of forces and capabilities in each State and geographic 
region. Command, control, and communications; transport; engineering; 
military police; search and rescue--all of these capabilities, as well 
as several others, must be immediately available to State authorities 
when required.
    We in the National Guard, in full cooperation with the States, the 
Federal Emergency Management Agency (FEMA) and other governmental 
authorities, are actively searching for new efficiencies in disaster 
response operations. The conclusion of Emergency Management Assistance 
Compacts between neighboring States is one example. These establish 
conditions and procedures under which Guard members from one State can 
provide assistance to another State with the agreement of both 
governors, and reflect the Guard's concern with cost-effectiveness and 
resource conservation. A number of States already have signed compacts 
with their neighbors, paving the way for sharing personnel and 
equipment during times of crisis. The growing involvement of America's 
citizen soldiers and airmen in domestic counterterrorism and post-
attack response operations is sure to lead to other forms of inter-
State cooperation.
    At heart, however, it can never be forgotten that our 
responsibility to the States is mandated by the Constitution. This 
cannot be suspended by the apparent efficiencies of wholesale 
consolidation that well-intentioned cost-cutting staffs may postulate.
                     presenting the face of america
    The National Guard is the face of America. Our people and our 
values are the people and the values of the nation, at all times and in 
every corner of the country. The militia tradition of service to nation 
and neighbor springs from this. Half of the signers of the Declaration 
of Independence were militiamen, as have been 18 of the 41 Presidents 
and numerous members of Congress. In the 105th Congress alone, more 
than 70 members have served or are currently affiliated with the Guard 
or Reserve.
Diversity and Opportunity
    One of our greatest strengths is the diversity of those who 
comprise our ranks. They and their families strengthen our mettle, 
infusing the organization with new blood, new perceptions, and new 
ideas. They volunteer from all of America's varied social, educational, 
and economic backgrounds, and represent a true melting pot of race, 
creed, color, and gender. Their sole common denominator is commitment 
to this great country and the finest qualities it engenders in the 
human spirit. Our sole common demand of them is that they embrace the 
core values we nurture as an institution--integrity, loyalty, 
dedication, service, selflessness, compassion, family, and patriotism--
and endeavor to live up to them in every undertaking.
    Within the National Guard there are only two measures of merit for 
promotion: performance, and adherence to the values for which we stand. 
This even-handed approach pays large dividends in attracting talent and 
fostering loyalty. While we neither targeted specific ethnic groups for 
recruitment nor established race- or gender-based promotion quotas, 
minority representation in all ranks increased steadily throughout the 
1990's. The percentage of minorities in the Air Guard grew almost 4 
percent during the past 5 years and now stands at 19.4 percent. In the 
Army Guard, the increase was 1.5 percent and the current minority total 
stands at 26 percent. Percentage point increases for the officer corps 
alone are roughly identical, making it clear that the Guard is an equal 
opportunity force from top to bottom.
    The percentage of women in the National Guard likewise continues to 
increase, as do the number of women attaining positions of authority. 
For example, in 1997 the New York Guard appointed its first female 
battalion commander, the Florida Guard promoted its first women to flag 
rank, and Vermont selected the first woman Adjutant General in the 
Guard's history. These skilled professionals were among notable record-
setters last year but were by no means the only ones. They are sure to 
be followed by others in the years ahead as the role of America's 
militia continues to grow.
People Programs
    The men and women of the National Guard remain our greatest 
resource. As Guard OPTEMPO and PERSTEMPO accelerate to ease the burden 
on a heavily committed Active force, it becomes increasingly important 
to ensure our members' families are cared for during absences. Living 
in communities with family and friends is an advantage some stay-behind 
spouses enjoy, but others lack such safety nets. Fortunately, our 
Family Partnership Program, one of the most extensively networked in 
the Department of Defense (DOD), is the strongest it has ever been. Our 
people know that if they are called up to serve halfway across the 
country or halfway around the world, they can leave home confident that 
their families will be cared for.
    Another major concern for National Guard members eager to serve is 
the potential impact of a callup on their civilian jobs. Will service 
for State or nation adversely affect their job security, skill 
development, or promotion opportunities? The answer is no for three 
reasons. The first is the patriotism and support of the American 
business community. Most employers understand that there is a moral 
bottom line that outweighs the one in account ledgers. For those few 
who fail to appreciate that, the Uniformed Services Employment and 
Reemployment Rights Act passed by an insightful Congress in 1994 
updates the legal ``livelihood safeguards'' for our citizen soldiers 
and airmen. For that, we remain grateful. The third element is a 
strong, highly dedicated staff in the Office of the National Committee 
for Employer Support of the Guard and Reserve. They are working 
aggressively to protect the reemployment rights of those who have to 
leave their jobs for six to nine months to enable the Global Guard to 
perform its worldwide missions.
    Recruiting and retention are always concerns for the military 
during periods of institutional turbulence, heavy operational demand, 
and a strong domestic economy. All three conditions are occurring today 
and yet the National Guard continues to attract and keep high-quality 
personnel. Last year we met or exceeded all of our goals. In part, this 
was due to the innate patriotism and selflessness of many young men and 
women in our society, the abiding appeal of the militia tradition, and 
the National Guard's sincere commitment to superior leadership, quality 
training, and equal treatment. Pragmatically, however, we also 
recognize the value of such inducements as the Montgomery G.I. Bill and 
the education assistance programs some States provide. The importance 
of academic incentives was proven beyond any doubt when New York's 
offer of tuition-free education in the State's 70 public colleges and 
universities rocketed the Empire State Guard ``from worst to first'' in 
recruiting and retention nation-wide over a two-year period.
Adding Value To America
    A community-based organization like the National Guard cannot claim 
to ``present the face of America'' without giving something back to the 
society from which it springs. That is why we have a third mission 
exemplified in the phrase The National Guard ``Adds Value to America.'' 
This is the mission your National Guard members perform within their 
communities, serving as role models for disadvantaged youth, providing 
health care for the indigent, assisting adult Americans to develop 
better job skills, and supporting organizations and agencies whose 
activities at the local level make hometown America a better place to 
live and work. Currently, 21 States and Territories conduct youth 
programs that are considered among the most successful in the nation at 
a per capita cost that is lower than juvenile and adult correctional 
institution costs, the Job Corps, and National Service.
    Our most effective intervention program for at-risk youth is 
ChalleNGe which provides academic instruction and training in job 
skills and life-coping behaviors to unemployed high school dropouts. 
Sponsored in 21 States, the program consists of a five-month 
residential phase followed by a year of close mentoring and leads to a 
General Educational Development (GED) diploma for most participants. 
The number of young men and women graduating from ChalleNGe over the 
past five years is rapidly approaching 13,000, with almost 80 percent 
receiving their GED. The fiscal year 1998 Defense Bill removed the 
provisional status of ChalleNGe and made it a permanent program under 
Title 32.
    STARBASE (Science and Technology Academics Reinforcing Basic 
Aviation and Space Exploration), another of our major youth programs, 
exposes students from inner city schools to ``hands-on'' experiments 
where they apply math and science to real-world problems in aviation 
and space-related disciplines. STARBASE is conducted in 14 States and 
Territories and reaches over 10,000 students each year.
    The Youth Conservation Corps (YCC), our third principal program, is 
directed toward the same population as ChalleNGe. It is a six-to-ten 
week residential program that uses military-based training to develop 
pride, self-discipline, and an understanding of cooperation and 
citizenship in at-risk youth. Over 600 young men and women have 
completed YCC training since its inception five years ago.
Drug Demand Reduction
    Illegal narcotics trafficking poses one of the most pervasive and 
deadly threats our nation faces, and we in the Guard take the campaign 
against it seriously. In our Federal and State roles, we actively 
support a wide range of foreign and domestic counternarcotics and drug 
interdiction operations. As an organization grounded in hometown 
America, though, we know that our schools and neighborhoods are also 
battlefields where the struggle is waged one precious life at a time. 
Our Guard men and women fight it on those terms by supporting drug 
demand reduction efforts as part of the Guard's community support 
mission.
    Our members and their families participate in many of the over 
8,000 separate drug demand reduction programs underway nationwide that 
focus on community coalition building, circulating anti-drug messages, 
developing leadership within vulnerable groups, and promoting high 
standards of citizenship. While our personnel normally allow local 
community groups to take the lead, National Guard members are in high 
demand to conduct substance abuse education programs, to mentor at-risk 
individuals, and to perform other tasks where they can be showcased 
within their own communities as positive role models. Since all of our 
own youth programs have embedded drug-prevention themes, many Guard men 
and women are proficient in demand reduction instruction and 
techniques. For the past two years, we have also been a partner in the 
Community Anti-Drug Coalitions of America, enabling us to contribute 
to--and draw on--an enormous base of counterdrug resources distributed 
across the face of America.
              remaining the first line of homeland defense
    One common thread running through all recent DOD studies has been a 
reaffirmation of the National Guard's responsibility to remain the 
first line of homeland defense. It is a task we accept willingly.
Weapons of Mass Destruction and Emergency Response
    ``I must say, there is probably no more important mission facing 
the Department of Defense right now than being prepared to defend this 
country at its home in the event of a chemical or biological attack. 
And the Guard has to be at the forefront.'' Deputy Secretary of Defense 
John J. Hamre
    The Fiscal Year 1997 Defense Authorization Act tasked DOD to 
implement programs to prevent and respond to terrorist incidents 
involving Weapons of Mass Destruction (WMD), and to support State and 
local emergency response agencies involved in these activities with 
training and equipment. Studies mandated by that act have since made it 
clear that the National Guard, by virtue of our grassroots community 
presence throughout the nation, extensive training experience, and 
inherent State disaster response duties should play a vital role in 
this critical aspect of homeland defense.
    This is a natural mission for America's militia. Our first charter 
in the New World three-and-one-half centuries ago was community 
defense. We have never failed our fellow citizens in living up to that 
trust. We were providing organized on-scene support within minutes of 
the tragedy in Oklahoma City two years ago, and will be there again 
whenever and wherever our neighbors need help. Our State Area Commands 
are important hubs in the nationwide emergency response network, and 
our Adjutants General serve as the Emergency Manager in almost half of 
the States. The Reserve Component Automation System (RCAS), which we 
are extending into Guard and Reserve facilities across the nation, upon 
completion will provide electronic access into communities large and 
small for emergency information flow. In conjunction with the National 
Guard Defense Learning Initiative, RCAS also offers a mechanism for 
training local personnel in counterterrorism and WMD disaster response.
    As the first step, Guard professionals are participating in 
training local emergency responders in a program that initially will 
cover 120 cities. Other tasks will certainly follow. If our enemies try 
to strike at the American people in their homes, schools, churches, and 
shops, they will find the National Guard vigilant, determined, and 
ready.
Counternarcotics and Drug Interdiction
    Counterdrug operations make up an important part of all three 
National Guard mission areas. In addition to the demand reduction 
programs we promote within our communities, we have both Title 10 and 
Title 32 responsibilities in our nation's counterdrug fight. Under 
Title 10, the Army and Air National Guard help theater CINC's detect 
and monitor attempts to smuggle narcotics into the United States and 
its Territories from their regions. We do this by deploying individuals 
and units to locations abroad where they perform ground-based and 
airborne surveillance, provide linguistic support, augment intelligence 
staffs, and assist in other ways. Our recurring deployments to Panama 
for Operations Coronet Nighthawk and Constant Vigil are familiar 
examples of this.
    Under Title 32, the National Guard supports various Federal, State, 
and local law enforcement agencies in counternarcotics and drug 
interdiction operations within the country and Territories. We furnish 
equipment, manpower, and special expertise that other agencies have 
come to rely on heavily over the past few years in campaigns against 
drug smuggling, distribution, and domestic cultivation. From assisting 
in cargo inspection at U.S. ports of entry to providing aerial 
reconnaissance and photointerpretation for interception operations and 
the location of illicit domestic drug crops, Guard members are 
recognized as key players on the U.S. counterdrug team.
    During 1997, Guard men and women--all volunteers--participated in 
9,260 counterdrug missions and helped seize considerable amounts of 
processed narcotics and amphetamines, vehicles, and weapons, as well as 
almost 30 million marijuana plants. More than 96,000 arrests were made 
and almost $200 million in currency confiscated in these operations. 
Guard members' status as agents of their State exempts them from the 
posse comitatus restrictions that prevent other U.S. military forces 
from being used in a similar way. Counterdrug support is performed in 
addition to regular wartime mission training and enhances basic 
military skills.
Homeland Defense Missions
    Other related homeland defense missions are likewise natural tasks 
for our citizen soldiers and airmen. When a National Missile Defense 
system is fielded, we should have a strong--if not commanding--presence 
in the system's control centers and maintenance facilities. This will 
be a wholly logical extension of the national air defense mission the 
Guard now performs, and our capability was demonstrated in the days of 
Nike-Hercules missiles.
    Related directly to that is the Guard's potential future role in 
all forms of U.S. Space Operations. Missile launch, satellite control, 
and space system management are missions in which scientists, 
technologists, and other highly skilled National Guard professionals 
could couple civilian work specialties with their military training and 
discipline to serve national defense.
    Information Warfare is another important new military function in 
which the Guard has a major role to play. As America continues its 
transformation to an information-based society, we find ourselves newly 
vulnerable to electronic attack on the cyber-systems that have become 
essential for financial transactions, commerce, communications, 
transportation, and the other arteries sustaining our social structure. 
The ability to detect assaults and counter-attack swiftly and 
effectively is essential. There is an excellent fit here between many 
Guard members' civilian professions and national defense service, and 
we expect to become steadily more involved as this ``combat specialty'' 
evolves.
    The operation of Remote Weapon Systems, such as unmanned aerial 
vehicles (UAV) and other systems yet to emerge, is still another area 
in which your National Guard can play a productive, cost-effective 
role. While training at home to deploy these systems overseas for 
conventional combat purposes, we would be able to increase the scope 
and potency of our participation in State missions such as drug 
interdiction surveillance, search and rescue, and disaster response.
               fueling the revolution in military affairs
    Today's Revolution in Military Affairs is the product of two 
factors: exciting technological advance and mundane fiscal constraint. 
The men and women of the Army and Air Guard are strangers to neither. 
They understand fully the need to develop alternate ways of doing 
business to ensure that we remain effective in a newly lethal 
environment under prevailing tight budgets. Long accustomed to doing 
more with less, we have made a virtue of necessity by developing a 
culture that embraces ``smart innovation,'' or, as it has been put, 
``thinking outside the box without destroying the box.'' Several of our 
past initiatives continue to pay large dividends, and the dynamism of 
our people is producing more daily.
Technology and Innovation
    The National Guard is an aggressive proponent of leveraging 
technology for greater effectiveness and readiness. In the 
complementary RCAS, Warrior Net, and Distance Learning Network, we are 
doing with electrons what President Eisenhower did with the interstate 
highway system. These PC-based networks eventually will link every 
Guard armory and air facility in the nation with appropriate 
headquarters and specialty training units for the distribution and 
exchange of automated information management data, decision-making 
support mechanisms, distance learning, and disaster response 
communications and coordination. Over the past four years we have 
dramatically intensified our focus on computer linkage--originally 
established primarily to reduce training and administrative expense--to 
good effect, and now the demand on these networks to support other 
activities is growing steadily. With linkage to other Federal and State 
directorates and agencies--such as the Army's Directorate of Military 
Support, FEMA, and the counterdrug community--these systems become a 
national telecommunication resource of major consequence.
    The Army and Air Guard both have enjoyed substantial success in 
employing simulation technology to meet the persistent challenge of 
providing realistic training at reasonable cost. The Army National 
Guard's Project SIMITAR (Simulation in Training for Advanced 
Readiness), encompassing more than 30 training simulation initiatives, 
has produced several effective systems for bringing the battlefield 
into the armory and continues to offer new opportunities for developing 
and maintaining solid basic skills in battle management and gunnery. 
Similarly, the Air National Guard has forged ahead in orchestrating the 
development of low-cost, high-fidelity Unit Training Devices (UTD) for 
fighter aircraft. Based on commercial-off-the-shelf (COTS) components, 
these UTD's provide valid procedural and tactical training for fighters 
without incurring actual flying hour costs and have been particularly 
beneficial for unit conversions. In ongoing initiatives, the Air Guard 
is pursuing the development of a next-generation simulator for the B-1 
bomber and working closely with the Active component on linking 
simulators around the country for distributed interactive mission 
training.
    Our citizen soldiers and airmen have come up with a number of other 
ideas for lowering the price tag of military strength. The Air National 
Guard and Air Force Reserve Command are teaming on a COTS-based 
aircraft upgrade program, Combat Quadrangle, that will give their 
aircraft around-the-clock combat capability, survivability in high-
threat environments, data link systems, and precision attack at an 
eminently affordable price. The Army Guard has employed a slightly 
different but equally innovative and cost-effective approach to 
modernization in its RETROEUR (Retrograde of Equipment from Europe) 
program, in which Army equipment made excess by overseas force 
drawdowns is redeployed from Europe, repaired at Army Guard centers in 
the U.S., and redistributed among Active, Guard, and Reserve units.
    Innovation, however, is not limited to acquiring better hardware at 
lower cost. Guard ingenuity is evident also in the development of 
better, more efficient processes to save time and money. As one 
example, the Army Guard's Home Station Mobilization initiative will 
reduce the cost of processing personnel mobilized for deployment and 
speed them to ports of embarkation more rapidly. Another, the Army 
Guard's Fort State initiative, is a proposal of truly blockbuster 
dimensions for leveraging existing Guard infrastructure and experience 
to provide services such as maintenance, supply, and transportation to 
the Active and Reserve components within States. The DRI called for 
outsourcing 150,000 commercially oriented military and civilian support 
positions; the NDP, 600,000. Under Fort State, many of these tasks 
would be ``outsourced'' to Guard installations where they could be 
consolidated for greater efficiency.
                the path ahead--total force integration
    We in the National Guard are proud of our roles, both as the 
Federally tasked Global Guard and as ``America's Team'' for State and 
community missions. We are firmly dedicated to remaining key players in 
the Total Force of tomorrow and are working hard to foster still closer 
cooperation and integration between the Active and Reserve components.
    Collaboration between the Active and Reserve components of the Air 
Force continues to set the standard for Total Force integration and 
interoperability. The Air Force elected to absorb almost 27,000 QDR 
manpower cuts--and the loss of one fighter wing equivalent--from the 
Active component while reducing the Reserve component by only 700 
positions, plussing-up Guard fighter squadrons to 15 aircraft each, and 
transferring modern assets to Guard and Reserve units from Active ones. 
An Active Air Force officer last year became the first leader of an Air 
Guard unit when he assumed command of Connecticut's 103d Fighter Wing. 
And the Guard, Reserve, and Active Air Force consult regularly on 
mission distribution.
    In its efforts to foster closer Active-Reserve ties, the Army 
National Guard completed its force-balancing exchange of 12,000 
positions with the Army Reserve last year and is now implementing the 
Division Redesign program to convert 12 combat maneuver brigades into 
combat support and combat service support units. While complex--the 
process involves some 50,000 Guard members in more than 30 States--this 
is a high priority program to enhance the Army's deployability by 
providing augmentation in vital war mobilization and sustainment 
fields. The assignment of Active Army officers as commanders of 
selected Guard units continues. And in a bold move to break down 
communication barriers, the Army Chief of Staff has begun meeting with 
the Guard's State Adjutants General on a quarterly basis.
    A number of other positive steps have been taken toward integration 
over the past year. At the recommendation of the DRI, up to half of the 
staff of the Directorate of Military Support, DOD's 911 service for 
disaster response, will be drawn from the National Guard, and the 
Deputy Director will be an Army Guard general officer.
    In another initiative, the Secretary of the Army approved a plan to 
establish two fully integrated Active-Guard divisions, each composed of 
an Active component division headquarters and three Army Guard enhanced 
Separate Brigades. The first will be headquartered at Fort Riley, 
Kansas, and include mechanized infantry brigades from North Carolina, 
South Carolina, and Georgia. The second will be headquartered at Fort 
Carson, Colorado, and include infantry brigades from Oklahoma, 
Arkansas, and Indiana.
    We are moving ahead on all fronts. Much remains to be done, but I 
am optimistic about the future in view of our accomplishments and 
progress over the past few years. America's National Guard has always 
answered the call of its communities, States, and nation. The men and 
women of the National Guard can be counted on to remain true to that 
heritage as we forge ahead into the landscape of tomorrow.

    Senator Stevens. Thank you.
    First, let me on behalf of the committee thank you for all 
you have done to work with us to try and improve the conditions 
of the Guard. Your watch has really been a significant one, I 
think, in terms of the changing relationship between the 
Congress and the National Guard, and you have helped us in the 
so-called National Guard Caucus here to really call attention 
to all Members of the Congress the plight of the National Guard 
and Reserves, and I personally thank you.
    I also personally thank you for coming with me to Alaska. I 
am sorry that you brought home so much fish. We will just have 
to leave that go. [Laughter.]
    But I do thank you for your courtesy in coming to Alaska so 
often and really trying to find ways to improve the situation 
of the Guard up there.
    Let me turn to General Navas.

                STATEMENT OF MAJ. GEN. WILLIAM A. NAVAS

    General Navas. Thank you, Mr. Chairman, members of the 
committee. Thank you for this opportunity again to talk to you 
today, as well as for your past support on the part of 
America's Army that is your National Guard. I have submitted a 
statement for the record, but would like to spend just a few 
minutes giving you some background on how we arrived at the 
present budget.
    As you know, 1997 and 1998 were tough years for all of the 
Army, including the National Guard. The 1999 budget is in many 
ways a step forward. As submitted, it represents two things. 
First of all, it represents an unprecedented level of 
cooperative effort between the Department of the Army and OSD. 
For the first time in history, the National Guard funding issue 
was made a major budget issue within the Office of the 
Secretary of Defense level.
    We started with a shortfall of $113 million and at the 
Chief of Staff of the Army's request we worked with the Army 
staff and we were able to reduce that shortfall by $197 
million. That is the first time in my 10 years working in the 
Pentagon that I have ever seen a plus-up of the Guard 
accomplished inside the Army. That kind of progress is good 
news.
    However, the second thing that this budget represents, as 
General Reimer told the other Chamber last week, is a shortfall 
of $634 million to meet minimum readiness sustainment 
requirements of the Army National Guard.
    General Reimer has said that he recognizes the severity of 
this problem and that is one of his highest priorities.
    This shortfall means that our requirement will be met at 
only 71 percent. By comparison, the Active Army requirements 
are met at 80 percent, and the Army Reserve's requirements at 
81 percent. When you consider that the Guard's requirements 
themselves have been tiered in accordance with defense planning 
guidance, meeting them at 71 percent amounts basically to a tax 
over a tax.
    First, they are tiered to reflect the readiness levels 
required for our units that deploy later and then they are 
again funded at a lower level, and that is precisely where most 
of the shortfall will impact, disproportionately on the 
soldiers of those later-deploying units. It is on those units 
that training has already been drastically curtailed. It is in 
those units that hundreds of our finest NCO's must choose 
between going to training to lead their soldiers or going to 
schools to complete the courses of instruction that the Army 
has prescribed in order for them to remain eligible for 
participation in the Guard.
    It is in those units that the special training assemblies 
are so necessary for the preparation of good training, and it 
is funded only at 11 percent, and it is at those units that 
full-time manning is at barebones subsistence levels.

                           prepared statement

    In sum, we are making progress but we still have a ways to 
go, and I look forward to answering your questions, and thank 
you again for the support that this committee has given us.
    [The statement follows:]

            Prepared Statement of Maj. Gen. William A. Navas

    Mister Chairman, members of the subcommittee: Thank you for 
the opportunity to appear today and to provide an overview of 
current Army National Guard programs. I would like to begin by 
saying that 1998 finds the Army National Guard more active, 
with a higher operational tempo, than at any time in recent 
history. During the past year our personnel contributed nearly 
7,500,000 man-days in support of DOD mission requirements, 
including deployments to over 70 nations worldwide. Even as 
overseas commitments reached new levels in 1998, Guard soldiers 
provided more than 280,000 man-days in support of domestic 
emergency missions here at home. Domestic Army National Guard 
missions encompass a wide variety of support, including 
disaster relief, medical support and humanitarian assistance 
operations. Additionally, this large domestic portfolio is 
expanding to encompass the emerging use of the Army Guard in 
dealing with the consequences of Weapons of Mass Destruction 
(WMD). In short, the Guard in 1998 finds itself working closely 
with the Active Army to meet increasing international and 
domestic mission requirements.
    The maintenance of this high level of operational tempo has 
not come without cost. While I support the President's budget 
and the efforts of the leadership of the Army and DOD, the 1 
percent Army-wide budget shortfall forecast by the Army affects 
the Army National Guard to a similar degree. This funding 
constraint will affect nearly every area of Army National Guard 
operations, including operations, training, education and 
maintenance activities. These resource constraints will 
continue to challenge the Army Guard even as we reach new 
levels of domestic and international support.
    As Congress has repeatedly recognized in the past, 
modernization of Guard equipment is essential to the effective 
integration of Active Component and Guard forces. Initiatives 
like the Active Component/Reserve Component aviation 
modernization plan illustrate the effective cooperation in this 
area. In addition to aviation modernization, the ground force 
is seeing significant advances, with fielding of the M109A6 
Paladin howitzer and additional Multiple Launch Rocket Systems 
currently underway. Initial fielding of the Avenger Air Defense 
platform is also taking place. These initiatives will enable 
the Guard to more effectively support DOD and Total Army 
requirements around the world.
    Recruiting and retaining quality soldiers represents 
another continuing success story for the Guard. Last year the 
Army National Guard was the only Army component that exceeded 
its strength goal. In 1997 we established a strength target of 
367,000 personnel, and we finished the year at 370,046 
personnel--101 percent of our goal. I would add that although 
we did not make all of our acquisition quality goals, each 
soldier met the quality requirements for his or her Military 
Occupation Specialty (MOS) upon enlistment. Our overall quality 
is excellent. Sixty-two percent of our soldiers fall in 
Category I-IIIa, and 98.8 percent of our soldiers are high 
school graduates or the equivalent.
    The Army National Guard continues to explore ways to deal 
with on-going resource constraints. Our efforts center upon the 
innovative use of current and emerging simulations technologies 
to reduce costs for military training and education. These 
efforts include a significant investment in distance learning 
and the use of low cost, high quality simulation technologies 
for training. Along with the Active Component, we foresee a 
simulation driven revolution in the way that our soldiers are 
educated and trained. In a world of increasing resource 
constraints, it is a revolution that must come sooner rather 
than later.
    Despite resource constraints, the Army National Guard 
continues to work effectively in concert with the Active 
Component Army to meet the needs of the Department of Defense 
and the Nation. 1998 finds the Army National Guard an 
increasingly relevant force committed to serving in any 
required capacity.
                                ------                                

                   Fiscal Year 1999 Posture Statement
                           executive summary
    Fiscal year 1997 witnessed an unprecedented level of activity and 
change for the Army National Guard (ARNG). Activities during this 
period included the continuing evolution of Guard force structure, on-
going modernization initiatives aimed at ensuring continued mission 
relevance for Guard units, and increased efforts to support a work 
environment that engenders Total Army values and effective human 
relations among all Guard members.
    The high Guard operations tempo (OPTEMPO) witnessed in fiscal year 
1996 continued into fiscal year 1997 as the Army National Guard 
maintained its support for missions in Bosnia and other points 
worldwide. During fiscal year 1997, over 27,000 Army Guard soldiers 
deployed to more than 70 nations and provided over one million man-days 
in support of DOD mission requirements. Additionally, Guard soldiers 
and airmen provided over 280,000 man-days in support of 308 state 
missions, including disaster relief, medical support, humanitarian 
assistance, counter-drug, and counter-terrorism operations.
    Even as the Army Guard experienced its highest OPTEMPO in recent 
years during fiscal year 1997, efforts continued to reorient Guard 
force structure and physical plant to meet the challenges of the post-
Cold War world. The continuing reorganization of the Guard force 
structure necessitated large scale training in new occupation 
specialties and the extensive fielding of new and complex military 
equipment. The successful execution of this wide array of missions was 
due in large part to an amazing degree of dedication on the part of 
Army Guard soldiers and their families around the country and overseas 
throughout the world. With their help, the Army Guard successfully met 
all major challenges in fiscal year 1997.
    In the years ahead, the Army National Guard leadership will 
continue to ensure that the Guard remains a multi-mission capable force 
that is both relevant and increasingly modern. As a first responder in 
both domestic and international missions, the Guard and its citizen 
soldiers will continue to justify the special trust placed in them by 
the nation they support.
               the army national guard: past and present
    The National Guard predates the founding of the nation and a 
standing national military by almost a century and a half. America's 
first permanent militia regiments, among the oldest continuing units in 
history, were organized by the Massachusetts Bay Colony in 1636. Since 
that time, the Guard has participated in every U.S. conflict from the 
Pequot War of 1637 to Operation Desert Storm in 1991.
    The Army National Guard is a centuries-old institution, with roots 
deeper than the colonial ``Minutemen.'' The Guard plays a vital role in 
our national defense and emergency preparedness systems. Today, the 
Guard has emerged as the foremost reserve of the Army, capable of 
providing organized and trained units to engage in missions shoulder to 
shoulder with the active Army.
    A subject of extensive debate and compromise during the 
Constitutional Convention of 1787, the National Guard finds its origins 
in explicit provisions of the United States Constitution. Throughout 
the nation's history, the Guard has been an integral component of the 
defense and domestic emergency-response networks of the States and the 
United States. Federal law clearly sets forth the Army National Guard's 
Federal role: ``to provide trained units and qualified persons 
available for active duty in the armed forces, in time of war or 
national emergency and at such other times as the national security 
requires, to fill the needs of the armed forces whenever, during, and 
after the period needed to procure and train additional units and 
qualified persons to achieve the planned mobilization, more units and 
persons are needed than are in the regular components.''
    Detailed Federal guidelines, both statutory and regulatory, govern 
the organization and operation of the National Guard. Regulations 
issued by the National Guard Bureau spell out the policies, procedures, 
and responsibility of the Guard, and provide guidance for the 
employment of Army Guard units, personnel and equipment in support of 
State and local government authorities. The Federal government 
determines the number of authorized National Guard personnel and the 
unit mix available across the country. However, the States reserve the 
authority to locate units and their headquarters and Federal officials 
may not change any branch, organization, or allotment located entirely 
within a State without the approval of the governor.
    Just as the Federal government's relationship to the wide range of 
State activities and responsibilities has evolved over the years, so 
too have the Federal and State roles of the National Guard changed in 
order to meet the national interest as well as the particular needs and 
circumstances of each State and Territory. The Guard's unique status is 
exemplified by the fact that Guard members, unlike their counterparts 
in the active Army or Army Reserve, take an oath to their State 
constitutions secondary to their oath to the United States 
Constitution.
    Today, the National Guard fulfills a vital national defense role. 
Strategic planning integrates Army National Guard units into crucial 
combat, combat support, and combat service support elements of our 
nation's military forces to provide a trained, capable, and cost 
effective military force, able to provide rapid augmentation, 
reinforcement, and expansion in time of call-up or mobilization. From 
its origins as a self-equipped, community militia in colonial times, 
the National Guard has emerged as a well-armed fighting force and a 
valuable component in the nation's emergency preparedness network, the 
only force with this dual responsibility.
                          current initiatives
    National Guard support at both State and Federal levels has long 
been a mainstay of our government's ability to meet the needs of its 
people. The Guard's primary federal mission is to provide trained and 
ready forces in support of the National Military Strategy (NMS). At the 
State level, the Guard provides forces that are effective, trained and 
ready, but here its purpose is to accomplish a wide variety of state 
requirements, including disaster relief, medical support, civil 
disturbance support to local authorities, counter-drug support and a 
variety of other missions. Among current Federal missions is Guard 
support to Bosnia. Management of the consequences of Weapons of Mass 
Destruction (WMD) use will soon be added to Guard mission requirements.
Guard Support Trends--Bosnia
    Participation in Operation Joint Endeavor and Operation Joint Guard 
represents the largest overseas Guard deployment since the Gulf War. 
The Army Guard mobilized 3,482 soldiers from 97 different units and 42 
States under Presidential Selected Reserve Call-up (PSRC) authority in 
support of Operation Joint Endeavor/Guard in Europe. The Bosnia mission 
provides a look at the future of the Guard.
    Requirements arising from the Bosnia mission have had an impact on 
almost all major Guard formations. For example, all eight National 
Guard Divisions have contributed to Bosnian mission support. 
Additionally, October 1997 saw the first overseas operational 
deployment of an ARNG combat unit in recent times as members of the 
29th Infantry Division (Light), Virginia ARNG and Maryland ARNG, 
departed for duty in Bosnia.
    As the upward trend in support for non-traditional missions like 
Bosnia continues, Army Guard Combat, Combat Support and Combat Service 
Support formations will be increasingly challenged.
An Emerging Mission--Weapons of Mass Destruction
    In an event of far reaching consequences for the Guard and the 
Nation, the Congressionally mandated ``Defense Against Weapons of Mass 
Destruction Act of 1996'' charged the Department of Defense with the 
domestic anti-terrorism mission.
    In early 1995, Congress directed that a program be established ``to 
improve the capabilities of State and local emergency response agencies 
[to deal with the WMD threat], and the National Guard provides the 
States with a ready asset to augment first responders.'' In keeping 
with this sentiment, the Emergency Response Assistance Program (ERAP) 
was signed into law as a part of the Fiscal Year 1997 Defense 
Authorization Act. This law mandated that DOD assist State and local 
emergency responders in training and the loan of appropriate equipment. 
This legislation further designated the National Guard as a means of 
support for these state and local organizations. Because of its 
experience in working with state and local organizations, the National 
Guard is uniquely positioned to assist these agencies.
    Acting on the recommendations in the ERAP, Congress appropriated 
$10 million in fiscal year 1998 for detailed planning and concept 
studies designed to facilitate ARNG participation in addressing the 
terrorist WMD threat. Included in these studies will be a work plan 
that focuses on a four pillared approach to the mission: information 
and architecture; infrastructure; doctrine and training; and force 
structure.
Pillar I: Information and Architecture
    Information management and an effective communications architecture 
will be critical parts of the Guard WMD consequence management effort. 
As a result, the first pillar of the Guard WMD study involves use of 
Federal Emergency Management Administration's (FEMA) Emergency 
Information system (EIS) software. The EIS provides a variety of 
standardized emergency management functions, including near real-time 
mapping, communications and integrated information flow at the state 
and local levels. The Guard will use the Reserve Component Automation 
System (RCAS) to interface with EIS as it integrates ARNG capabilities 
with those of FEMA. With the full integration of FEMA and ARNG 
information architectures, it is expected that the Guard communications 
infrastructure will function as a national communications highway for 
the flow of domestic emergency information. This information management 
system can also assist other government agencies, as well as supporting 
development of the Global Disaster Information system (GDIS).
Pillar II: Infrastructure
    A central reason for the emerging Guard WMD mission lies in the 
unique Guard domestic support capability. With a wide variety of 
communications and logistics assets in all 54 States and Territories, 
the Guard continually responds to a variety of natural and man-made 
disasters.
    At the implementation level, the Guard can provide planning and 
exercise coordination for disaster response training, as well as 
assisting in the procurement of urgently needed equipment. 
Additionally, in 45 percent of the states, the Adjutant General is also 
the State Emergency Management Officer, thus providing a direct link 
between the Guard and the State agencies it supports. Finally, when the 
Guard completes the EIS communications integration outlined in Pillar 
I, every armory can serve as a Operations Center or Disaster Field 
Office if necessary. The combination of Guard infrastructure and State 
level integration will greatly improve the nation's ability to deal 
with the use of WMD and all other disasters as well.
Pillar III: Doctrine and Training
    No effort as broad and far reaching as the anti-terrorism/WMD 
program can be effective without proper doctrine and training for those 
involved in the program. During fiscal year 1998, $466,000 will be used 
for training to be conducted by the National Interagency Counterdrug 
Institute (NICI). NICI, which provides training and military support 
operations to DOD agencies, is working with NGB to develop new courses 
that will train Guardsmen in their responsibilities as first 
responders. Additional courses on the specific nature of WMD are also 
planned. Use of the National Guard Distance Learning Network (See 
Training Technologies--Distance Learning) to support the teaching of 
these classes is also being considered. The Guard Distance Learning 
Network is also available to other agencies for WMD and related 
instruction on a space available basis.
Pillar IV: Force Structure
    The final component of the Guard WMD study plan involves 
development of the force structure necessary to implement DOD WMD 
directives. In September 1997 the Secretary of Defense directed the 
development of ``a complete model for the integration of the RC into 
Consequence Management Planning for WMD domestic terrorist incidents.'' 
To that end, a Joint Service Tiger Team was established in November 
1997 and charged with several missions:
  --Develop a response model and identify requirements.
  --Identify missions, areas of operations and units.
  --Determine manpower, equipment and training shortfalls.
  --Determine funding requirements for start-up and Operations and 
        Maintenance (O&M).
    The completed plan was briefed to the Deputy Secretary of Defense 
(DEPSECDEF) in mid-December 1997.
Current Status
    The Deputy Secretary of Defense recently provided the ARNG $23 
million and 220 Active Guard and Reserve (AGR) personnel authorizations 
to support WMD related activities in fiscal year 1999. This support 
includes funding for the upgrades to current chemical decontamination 
and reconnaissance capabilities. When formed and trained, Guard units 
with WMD capabilities will retain day-to-day mission requirements while 
maintaining a stand-by national consequence management capability. 
Additionally, these units will conduct first responder training at the 
local level and be prepared to provide consequence management 
augmentation for the Commanders in Chief (CINC). The Study Work plan 
will examine the best way to attain the most appropriate force 
structure.
    Support for the development of a robust Guard WMD consequence 
management capability comes from the highest levels of government. 
Secretary of Defense William Cohen noted, ``The Guard and Reserve are 
going to play a major role in dealing with detection of chemical and 
biological weapons. These responsibilities will include how to 
intervene and how to deal with the victims of terrorism when it 
occurs.''
                    army national guard vision 2010
    Army National Guard Vision 2010 is the conceptual link between 
America's community based land force to Army Vision 2010, ``Army After 
Next'' and Joint Vision 2010. ARNG Vision 2010 outlines a full 
commitment to implementing the joint operational concepts of dominant 
maneuver, precision engagement, focused logistics, and full-dimension 
protection--a seamless force.
    With 34 percent of the Army's strength, more than half the combat 
power, nearly 70 percent of field artillery, and more than a third of 
Total Army combat support and combat service support capabilities, the 
Army National Guard is a full partner in rapid strategic mobility, and 
tailor-to-task organizational flexibility.
    Ultimately, the Army National Guard will increase its key role in a 
seamless force that can be committed cross-dimensionally along the 
entire spectrum of contingencies. Through the alignment of warfighting 
missions and capabilities, and the integration of Active, Guard, and 
Reserve units, America's Army will continue to provide a force of 
trained leaders and soldiers.
    In doing so, we will achieve our common goal of shaping a joint 
force to accomplish our primary task: to deter conflict--but, should 
deterrence fail, to fight and win our nation's wars.
Effective State Support
    Our equally vital role of providing assistance and support to our 
states and territories will not change. States' Adjutants General and 
their respective Governors, who serve as peacetime Commanders in Chief, 
rely heavily on the embedded capabilities and training of Army Guard 
units. The assessable, flexible, and effective response of the Guard 
during domestic and community support missions will continue to play a 
central role in state level support planning and mission execution.
    With 3,222 armories in 2,700 communities across America, the Army 
Guard provides community visibility and presence that is increasingly 
critical in an age when general military experience and familiarity 
have steadily declined. This community based force will continue to 
provide a host of other capabilities that guarantee ARNG vitality at 
the State and Federal level through 2010 and beyond.
                        shaping the 21st century
    Reaching the goals outlined in Vision 2010 presents the Guard with 
significant challenges in the years ahead. Efforts are, however, 
already underway to move the ARNG along the road to ensure a successful 
``vision implementation''. These initiatives include the on-going Army 
National Guard Division Redesign Study (ADRS) and placement of Active 
Component Officers in selected ARNG leadership positions. In the 
logistical arena, the new Fort State initiative promises to 
significantly streamline the ARNG/Active Component infrastructure 
requirements. These and other initiatives will serve to reshape the 
ARNG as it enters the 21st Century.
Division Redesign
    Efforts to mold a force capable of addressing the likely threats of 
the next century are not confined to the National Guard. In May 1995, 
the Commission on Roles and Missions recommended that the Army 
reorganize lower priority Reserve Component forces to fill force 
shortfalls in higher priority areas. In keeping with this 
recommendation, the Army conducted Total Army Analysis 003 (TA003) in 
late 1995 to determine potential shortfalls in personnel required to 
implement the National Military Strategy (NMS). As a result of TA003, 
the Army determined that nearly 124,800 additional Combat Support and 
Combat Service Support (CS/CSS) personnel would be required to fully 
implement the NMS. Following this conclusion, the ARNG commissioned the 
Army National Guard Division Redesign Study (ADRS) to examine ways it 
could address this shortfall in CS and CSS personnel.
    As a result of the study, the Guard will convert a number of units 
from Combat to Combat Support and Combat Service Support formations in 
the coming years. Among other suggestions, the ADRS recommends the 
conversion of up to 12 ARNG combat brigades and their associated 
divisional slice elements to CS/CSS units during fiscal year 1999-2012.
    Implementation of the ADRS will occur in four phases. Three combat 
brigades will be converted in each of phases one and two. Phases three 
and four will see conversion of remaining units in the two ARNG 
divisions affected by the redesign. The end state will find the two 
affected divisions fully converted to CS/CSS or composite divisions. 
The first Brigades designated for conversion were tentatively 
identified at the Division Project Action Committee (DIVPAC) in 
December 1997.
Current Status
    Recent events have resulted in a decision by the Army to accelerate 
the ADRS conversion process. Following guidance from the Secretary of 
the Army, funding will be included in upcoming Program Decision 
Memorandums (POM) to procure necessary conversion equipment by fiscal 
year 2007 and to complete the conversion process by fiscal year 2009.
Active Component/National Guard Divisional Integration
    An additional proposal contained in ADRS established two AC/NG 
Integrated Divisions, each consisting of an active Army headquarters 
company (staffed by some of the 5,000 AC support personnel) and three 
eSB's. A Division Commander would become responsible for the combat 
readiness of the three brigades and the other elements necessary to 
create a full division capable of deploying in wartime.
    This concept was approved by the Secretary of the Army and Forces 
Command is now in the process of implementing it. The 30th Mechanized 
Infantry Brigade (North Carolina), the 218th Mechanized Infantry 
Brigade (South Carolina), and the 48th Mechanized Infantry Brigade 
(Georgia) will make up a division headquartered at Fort Riley, Kansas 
with a forward element at Fort Jackson, South Carolina. The other 
Integrated Division, to be headquartered at Fort Carson, Colorado, will 
be composed of the 39th Infantry Brigade (Arkansas), the 45th Infantry 
Brigade (Oklahoma), and the 76th Infantry Brigade (Indiana) and will 
have a forward element at Fort Polk, Louisiana. The activation date for 
the two divisions is planned for 1 October 1999.
AC Officers Serving in Key Positions in the ARNG
    Demonstrating their commitment to more effective integration, 
Active Component and Guard leaders implemented a test program placing 
limited numbers of Active Duty Officers in ARNG command positions when 
requested by an Adjutant General. The intent of the program is to 
foster a greater degree of understanding between members of the active 
and reserve forces. While available commands and categories for this 
initiative are currently under review, placing AC officers in command 
of ARNG troops demonstrates a tremendous degree of resolve on the part 
of AC and Guard leaders.
Fort State
    The ARNG's Fort State initiative seeks to leverage existing 
infrastructure and experience within states and territories to perform 
services such as maintenance, calibration, controlled humidity 
preservation, supply, and transportation within DOD at reduced cost. 
Under the Fort State concept, entire states are considered to be 
``installations'' as defined in Army Regulation 5-9. This allows the 
use of ARNG maintenance and logistics assets anywhere in the state to 
support DOD requirements, rather than restricting these activities to 
the confines of military bases.
    A Fort State feasibility analysis, undertaken at the request of the 
Active Army leadership, will examine Total Army requirements as set 
against ARNG state level capabilities. The economy achieved through 
more efficient use of various support functions at the state level will 
both save money and further strengthen Active Component--ARNG 
integration and cooperation. The final Fort State study, due in fiscal 
year 1998, will be an implementation plan to provide quality, low cost 
services to customers throughout the Department of Defense.
                               readiness
    Army National Guard readiness goals include sustaining a highly 
trained and ready force that meets all wartime operational, logistic, 
and personnel standards. The ARNG is a leader in programs designed to 
enhance the readiness of high priority units. Chief among its programs 
are efforts to maintain open lines of communication. Each month, the 
Director of the ARNG presents issues/and or problems to the Army's 
leadership during the Chief of Staff of the Army's (CSA) Monthly 
Readiness Review. The Director of the ARNG also provides quarterly 
reports to the Commanding General, Forces Command. The Army National 
Guard staff conducts on-site visits and video teleconferences (VTC) 
with major combat units and high priority units to achieve and improve 
unit readiness. All of these activities serve to ensure Guard readiness 
at the highest possible levels.
    Fiscal year 1998 unit training readiness highlights will include 
unit rotations at the Joint Readiness Training Center (JRTC) at Fort 
Polk, Louisiana as well as the National Training Center (NTC) at Fort 
Irwin, California for Oregon's 41st Infantry Brigade (JRTC) and Idaho's 
116th Cavalry Brigade (NTC) respectively. Preparatory leader 
development training, as well as the exercises themselves, will 
demonstrate the ability of the Army National Guard to fully meet its 
assigned readiness goals in a crisis or wartime scenario.
Forward Support Package Readiness
    Guard Forward Support Package (FSP) units are CS and CSS units 
designated to support Active Component divisional, Corps and Theater 
level units. Slated to respond to the NMS's two nearly simultaneous 
Major Theater War (MTW) scenario, the 209 ARNG FSP units are the 
highest priority Guard units. These units support 5\1/3\ AC divisions, 
two Corps headquarters, and two theater slices. Between the October 
1996 and October 1997 Unit Status Reports (USR), there was a 3 percent 
decline in FSP readiness due to a 2 percent decrease in duty military 
occupational specialty qualified (DMOSQ) soldiers and a 3 percent 
decline in equipment on hand. Currently, there are 4 FSP units deployed 
in support of Operation Joint Guard in Bosnia.
eSB Readiness
    The fifteen enhanced Separate Brigades (eSB) of the ARNG are the 
principal Reserve Component ground combat maneuver force of the Army. A 
new structure within the Guard, eSB Brigades, are expected to achieve 
readiness goals of personnel, equipment on hand, equipment 
serviceability, and training by its scheduled 30 September 1999 
deadline.
    The ARNG is working hard to assist in meeting eSB readiness goals. 
In order to ensure that Guard eSB successfully achieve targeted 
readiness levels, the ARNG is using video-teleconferences to track 
management by objectives and resolve issues regarding eSB modernization 
and readiness.
    In fiscal year 1997 the Army National Guard divisional units 
supported Forces Command (FORSCOM) lane training for enhanced Separate 
Brigades during the 1997 Annual Training Period. This approach to 
training provided a dual readiness benefit--as the eSB's trained attack 
and defend mission profiles, opposing forces from divisional formations 
provided these units opportunities to train on the opposite task. This 
provided an excellent force-on-force training environment in a very 
cost effective manner. The eSB's were provided with a ``tailor made'' 
OPFOR, designed to meet their requirements, while the ARNG divisions 
received training opportunities that would not otherwise have been 
available.
Divisional Readiness
    Recent trends in readiness funding continued to provide challenges 
for the eight ARNG Divisions in fiscal year 1997. As was the case in 
fiscal year 1997, the level of funding in fiscal year 1998 will 
continue to generate resources for minimal divisional readiness and 
deployability. This resourcing is sufficient to provide 28 miles out of 
a required 288 miles for each M1 Abrams tank in the armored and 
mechanized divisions. Maintenance personnel in these units conduct 
repairs on their M1's using initial issue repair parts that are still 
available. Additionally, current resource levels support required 
professional education in lieu of Annual Training (AT) for many 
Guardsmen assigned to the divisions. Finally, current divisional 
resource levels typically support separate eight hour daily drill 
sessions rather than continuous Saturday through Sunday weekend drill 
periods.
Home Station Mobilization
    Home Station Mobilization (HSM) is an initiative proposed by the 
ARNG during the Power Projection Functional Area Assessment (FAA) 
conducted by Forces Command (FORSCOM). HSM empowers the State Area 
Commands (STARC) to assume responsibility for all mobilization 
inprocessing activities now conducted by mobilization stations. 
Following STARC processing, a unit selected for HSM would by-pass the 
traditional mobilization station and move directly to their ports of 
embarkation. The STARC's would also validate HSM units for deployment. 
As a direct result of this program, early deploying units would be 
available much more rapidly by eliminating time required for movement 
through a separate Active Component installation prior to embarkation.
    The Army National Guard has successfully demonstrated its 
capability to conduct HSM's over the past two years. To date, sixteen 
units have Home Station Mobilized and deployed in support of Operation 
Joint Guard. United States Army, Europe (USAEUR) Deputy Chief of Staff 
for Operations (DCSOPS) made the following comment: ``HSM has 
demonstrated that it can effectively augment the traditional 
mobilization process. This can be invaluable during a large scale 
mobilization and could reduce the surge on the traditional mobilization 
stations.''
Budget
    The Army National Guard is funded by three separate budget 
appropriations: Personnel (NGPA), Operations and Maintenance (OMNG), 
and Military Construction (MCNG). The ARNG fiscal year 1999 Budget 
Estimate Submission (BES) for these three accounts totals nearly $5.9 
billion. This represents approximately 9.3 percent of the Army's $63.4 
billion budget for this period. In addition, the Army has identified in 
its investments accounts, equipment that may be distributed to the ARNG 
for implementation of the Division Redesign, which converts up to 12 
ARNG Brigades to Combat Service/Combat Service Support to meet the 
demands of the Army.

                                ARMY NATIONAL GUARD APPROPRIATIONS BY FISCAL YEAR
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                     Change from
                                                                  1996         1997         1998         1997
                                                                                                      (percent)
----------------------------------------------------------------------------------------------------------------
Personnel...................................................       $3,349       $3,397       $3,334        -1.85
Operations and maintenance..................................        2,444        2,298        2,419        +5.27
Military construction.......................................          137           78          118       +51.28
----------------------------------------------------------------------------------------------------------------

                               recruiting
    The Army National Guard continued its aggressive recruiting efforts 
in fiscal year 1997. Recruiting goals for the year included maintaining 
a 367,000 end strength consisting of 41,659 commissioned and warrant 
officers and 325,341 enlisted soldiers. In pursuit of these ambitious 
goals, gains of 59,262 enlisted and 4,163 officers were planned for the 
year. Recruiting managers also assumed that enlisted losses during this 
period would not exceed 62,528 personnel.
    The Guard was extremely successful in its fiscal year 1997 
recruiting efforts, attaining an end strength of 370,046--101 percent 
of the fiscal year 1997 objective. At the end of fiscal year 1997, ARNG 
end strength included 40,756 officers and 329,290 enlisted personnel. 
Non-prior service accessions quality is good. The Guard met the Army 
quality goal of no more than 2 percent Test Category (TC) IV. The Guard 
fell short of the DA goal of 90 percent High School Diploma Graduates 
(HSDG) and 67 percent TC I-IIIa. We assessed 82.8 percent HSDG and 17.2 
percent General Education Diplomas (GED), and did not enlist any non-
high school graduates in fiscal year 1997. The Guard recruited 55.4 
percent TC I-IIIa.
    The ARNG recruiting strategy ties recruiting and retention into 
attrition management. The foci of attrition management are to recruit 
quality soldiers, to retain MOS qualified soldiers and to reduce the 
loss of first term soldiers to the lowest rate possible. Guard 
attrition management efforts were very successful in 1997, with 107.1 
percent of recruiting goals met with just 18.1 percent attrition during 
the same period.
Retention Incentives
    The Army Guard continues to offer education incentives through the 
Montgomery G.I. Bill. Enlistment in the Guard for six years provides 
financial assistance of $208.93 a month for full-time post-secondary 
education or up to $7,521.48 over a 10 year period. Enlistment bonuses 
for enhanced units, reenlistment bonuses for everyone, and affiliation 
bonuses have been reauthorized to those who qualify.

                                                FORCE COMPOSITION
----------------------------------------------------------------------------------------------------------------
                    Category                       Total                          Strength
----------------------------------------------------------------------------------------------------------------
Minority Officers..............................      5,297  13.0 percent of assigned.
Minority Enlisted..............................     89,906  27.3 percent of assigned.
                                                ----------------------------------------------------------------
      Total Minority Membership................     95,203  25.7 percent of assigned.
                                                ================================================================
Black Officers.................................      2,632  6.5 percent of assigned.
Black Enlisted.................................     55,032  15.6 percent of assigned.
                                                ----------------------------------------------------------------
      Total Black Membership...................     57,664  15.6 percent of assigned.
                                                ================================================================
Hispanic Officers..............................      1,646  4.0 percent of assigned.
Hispanic Enlisted..............................     23,863  7.2 percent of assigned.
                                                ----------------------------------------------------------------
      Total Hispanic Membership................     25,509  6.9 percent of assigned.
                                                ================================================================
Women Officers.................................      3,409  8.4 percent of assigned.
Women Enlisted.................................     30,846  9.4 percent of assigned.
                                                ----------------------------------------------------------------
      Total Women Membership...................     34,255  9.3 percent of assigned.
----------------------------------------------------------------------------------------------------------------

    The ARNG exceeded the fiscal year 1997 goal of 59,267 accessions by 
actually accessing 63,495 personnel, which was 107 percent of the goal. 
Non-prior service accessions totaled 28,378, or 47.8 percent of 
program. Prior service accessions constituted 35,117 personnel, or 59.2 
percent of program. Of non-prior service accessions, 100 percent 
possessed high school or equivalent degrees with 55.4 percent scoring 
in the highest test categories. Only 1.8 percent scored in the lowest 
test categories.
                           full-time support
    The Army National Guard's (ARNG) Full-Time Support (FTS) Program 
was established by Congress to organize, administer, recruit, train, 
and maintain Army National Guard units. The FTS program provides two 
distinct types of personnel--Active Guard and Reserve (AGR) soldiers 
and Military Technicians (MT). AGR soldiers perform a variety of day-
to-day military duties, while Military Technicians provide numerous 
maintenance and logistical support related functions. FTS manpower 
requirements are established by workload-based staffing standards (the 
number and type of required personnel) in training support, recruiting, 
maintenance, and readiness management workcenters. Requirements are 
determined through a detailed analysis of workload in each case. Grades 
are determined through classification studies.
    The Army National Guard receives FTS authorization levels from 
Congress via the National Defense Authorization Act and allocates full-
time resources to the States and Territories on a ``first-to-fight, 
first-to-resource'' methodology. This resourcing methodology results in 
a greater percentage of FTS personnel being assigned to, and in support 
of, early deploying Force Support Package units and enhanced Separate 
Brigades.
    The Army National Guard provides justification to the Department of 
the Army, Department of Defense, Congress and other interested parties 
to ensure directed missions are supported with adequate levels of FTS 
personnel.
    In fiscal year 1998, Congress authorized the ARNG 22,310 AGR 
soldiers. The projected Congressional AGR authorization for fiscal year 
1999 is 21,763. Congress also authorized Military Technician strength 
for fiscal year 1998 at 24,974 (this figure includes 2,400 non-dual 
status technicians). Fiscal year 1999 projected Military Technician 
strength is expected to decrease to 23,815. Both the AGR and Military 
Technician programs are expected to continue experiencing significant 
reductions in the future. The 1998 National Defense Authorization Act 
reduces the non-dual status Military Technician positions 50 percent by 
fiscal year 2002 and totally eliminates them by fiscal year 2007.
Active Duty for Special Work (ADSW)
    More than 1,340 Guard soldiers participated in the Active Duty for 
Special Work (ADSW) program during fiscal year 1997. Used to support 
special projects, ADSW tours are temporary, lasting 179 days or less. 
Projects included events such as command and staff visits, annual 
medical/dental screenings, operation of training activities, unit 
conversions to new weapons systems, study groups, support at training 
sites and exercises, and short term mission and administrative support.
Active Guard Reserve (AGR)
    AGR soldiers perform numerous daily organizational management 
functions that are essential to the operational capability of Guard 
units nationwide. Funding for these essential personnel for fiscal year 
1999 is projected at 58 percent of requirements. The Guard is actively 
pursuing initiatives designed to stabilize and ultimately restore 
support for required AGR manning.
    In addition to financial issues, the development of an effective 
AGR officer progression program also poses challenges for the ARNG. An 
increase in the number of controlled grades is needed to allow better 
management of AGR officer and enlisted progression. This increase would 
also provide increased promotion opportunities for junior enlisted AGR 
personnel.
    Reductions in overall AGR strength are programmed. The Temporary 
Early Retirement Authority (TERA) program is used as a force-shaping 
tool to assist in achieving these reductions. A total of $13.2 million 
was appropriated for fiscal year 1998 to facilitate the reduction of 
488 AGR officers.
    Resourcing for the AGR program continues to decrease even as the 
need for these personnel increases. A reduction of 450 AGR 
authorizations is scheduled in fiscal year 1999 with an additional 
1,000 AGR soldiers programmed to leave the force between fiscal year 
2000 and fiscal year 2002 as a result of Quadrennial Defense Review 
impacts. Continued funding of transition benefits is an important 
element in the AGR strength management plan.

                                AGR RAMP
------------------------------------------------------------------------
                                                               Percent
                                     Required    Authorized   (req/auth)
------------------------------------------------------------------------
1993.............................       40,475       24,686           61
1994.............................       40,376       24,180           60
1995.............................       40,330       26,350           59
1996.............................       39,689       23,390           59
1997.............................       37,594       22,655           62
1998.............................       38,547       22,310           58
1999.............................       38,458       21,763           56
2000.............................       38,403       21,313           55
2001.............................       38,403       21,053           55
2002.............................       38,403       20,763           54
------------------------------------------------------------------------

Military Technicians
    Military Technicians are civilian employees of the Guard who 
perform a myriad of maintenance and associated logistical support 
functions. These functions, which include essential equipment 
maintenance and logistical support activities, are critical to the 
deployability of Guard units throughout the country.
    The ARNG Military Technician strength for fiscal year 1998 will be 
24,974, a decrease of 512 from fiscal year 1997. Projected authorized 
positions for fiscal year 1999 total 23,815 which represents 56 percent 
of the Guard's validated 42,473 Military Technician requirement. 
Despite force structure reductions, equipment modernization initiatives 
continued to generate increased requirements for Military Technicians. 
Modern equipment such as the Apache helicopter, Abrams tank, Bradley 
Fighting Vehicle, Patriot Missile and Multiple Launch Rocket Systems 
(MLRS) require more maintenance manpower than the equipment replaced by 
these systems. Guard units can operate and maintain these systems at a 
cost saving to the Total Force, but doing so requires more Full Time 
Support.
    The combination of Military Technicians and AGR's remains the most 
efficient means of manning the ARNG's FTS program. The FTS program 
objective remains unchanged--to enhance unit readiness and 
deployability through improved training, personnel administration, 
maintenance and supply for soldiers and their equipment.

                        MILITARY TECHNICIAN RAMP
------------------------------------------------------------------------
                                                               Percent
                                     Required    Authorized   (required/
                                                             authorized)
------------------------------------------------------------------------
1993.............................       37,495       27,084           72
1994.............................       37,317       27,259           73
1995.............................       39,340       25,489           65
1996.............................       38,617       25,500           66
1997.............................       44,115       25,500           58
1998.............................       42,521       24,974           59
1999.............................       43,867       23,815           56
2000.............................       43,721       23,161           55
2001.............................       43,721       22,671           55
2002.............................       43,721       22,237           55
------------------------------------------------------------------------

                        equipment modernization
    Intensive efforts to modernize Guard Combat, Combat Support and 
Combat Service Support systems continued throughout fiscal year 1997. 
These efforts affected virtually every major Guard organization and 
most major ARNG aviation and ground combat systems.
Aviation Modernization
    UH-60, C-23, and C-12 series aircraft were the focus of aviation 
modernization efforts during fiscal year 1997. The Army National Guard 
continues to intensively monitor the modernization of aviation units 
equipped with the UH-60A/L utility helicopters. A total of 298 UH-60A 
and 76 UH-60L helicopters have been distributed to Army National Guard 
units. This quantity represents about 40 percent of the Army National 
Guard total requirement of 939 modern utility helicopters. Planned UH-
60L procurement for Active Army units will release additional UH-60A 
helicopters for redistribution to Army National Guard units. After 
redistribution, the Army National Guard will still be short 444 of the 
total UH-60 requirements, based on final retirement of all UH-1 
helicopters by the year 2000.
Ground System Modernization
    On the ground, Total Army field artillery modernization efforts 
provided resourcing for 18 ARNG M109A6 PALADIN howitzer battalions. 
Nine PALADIN battalions will be fielded to Echelons Above Division 
(EAD) units, eight will be fielded to the heavy enhanced Separate 
Brigades, and one is to be fielded to a strategic reserve brigade. 
Fielding will begin in fiscal year 1998 and concludes in fiscal year 
2001. A total of four additional Multiple Launch Rocket System (MLRS) 
battalions were resourced for the ARNG. Kansas and South Carolina 
completed fielding during fiscal year 1997, while Arkansas and South 
Dakota are scheduled to begin fielding in fiscal year 1998, with 
completion by fiscal year 1999. The ARNG fire support force will 
include a total of 10 MLRS battalions at the end of fiscal year 1999.
    The ARNG completed the fielding of the M1 Abrams Tank to all armor 
and cavalry units in fiscal year 1997.
    Modern Bradley Fighting Vehicles (BFV) (M2A2/M3A2) have been 
distributed to four of the eight heavy enhanced Separate Brigades: the 
48th Infantry Brigade (Mechanized), the 116th Armored Brigade, the 
155th Armored Brigade, and the 278th Armored Cavalry Regiment. Although 
they are authorized the M2A2/M3A2 model (483 M2A2's and 52 M3A2's), the 
remaining four heavy enhanced Separate Brigades, 30th Infantry Brigade 
(Mechanized), 218th Infantry Brigade (Mechanized), 256th Infantry 
Brigade (Mechanized), and 81st Infantry Brigade (Mechanized) are 
equipped with the basic M2.
    This second group of enhanced Separate Brigades was originally 
scheduled to receive M2A2/M3A2 series vehicles by fiscal year 2000. 
Unfortunately, this fielding has been postponed to fiscal year 2008 
through fiscal year 2010. The Army National Guard continues to work 
with the Department of the Army (DA) Staff to find modernized equipment 
to support Army National Guard requirements. The 49th Armored Division 
was fielded 303 M2A0's/M3A0's in fiscal year 1997.
    The Army National Guard major missile materiel modernization effort 
in fiscal year 1997 was the Avenger Fire Unit. Nine Avenger unit 
conversions are programmed to occur in Florida, Ohio, New Mexico and 
South Carolina between fiscal year 1997 and fiscal year 1999. Air 
Defense Artillery Avenger/MANPADS (Man Portable Air Defense System) 
battalions were approved for the Army Guard as replacements for current 
Hawk and Chaparral battalions. These battalions will provide for the 
entire Army Corps Short Range Air Defense (SHORAD) mission. Two 
additional battalions have been programmed for fiscal year 2000-03. By 
the end of fiscal year 2003, all Army National Guard ADA Avenger/
Stinger battalions will be 100 percent filled with Avenger Fire Units.
    Requirements for the movement of heavy vehicles and equipment (such 
as M1-series tanks) on the battlefield are met with the M1070/M1000 
Heavy Equipment Transportation System (HETS). The Army National Guard 
has a requirement for 927 of these modern 70-ton capacity systems; 
there are currently 385 on-hand. This year, elements of the Tennessee 
Army National Guard received a partial issue of 77 new HETS's. The Army 
National Guard will work with DA to prioritize the purchase of 
additional HETS's to fill other high priority units with this highly 
capable tractor/trailer combination (the only tractor/trailer 
combination that can move the M1A1 Abrams Main Battle Tank).
National Guard and Reserve Equipment Appropriation
    In fiscal year 1998 National Guard and Reserve Equipment 
Appropriation (NGREA) funds were used to purchase night vision goggles, 
engineer construction equipment, tactical wheeled vehicles, and 
training simulation equipment. This equipment is critical to improving 
the readiness and deployment posture of many Army National Guard units.
    ARNG units must be properly equipped to perform assigned missions 
side-by-side in America's Army with Active Component (AC) units and 
coalition partners.
RETROEUR
    The Army National Guard's program to redeploy, repair, and 
redistribute excess Army equipment from the draw down of forces in 
Europe continues to be a resounding success. Today, there are five 
operational Army National Guard RETROEUR (Retrograde of Equipment from 
Europe) repair sites: Fort Riley, Kansas (wheeled and track equipment); 
Camp Shelby, Mississippi (wheeled and track equipment); Piketon, Ohio 
(engineer and wheeled equipment); Fort Indiantown Gap, Pennsylvania 
(M3A2 Bradley and wheeled vehicles); Camp Withycomb, Oregon 
(communications-electronics equipment); and Blue Grass Station, 
Kentucky (receive, classify, and redistribute non-rolling stock 
equipment).
    Federally reimbursed state employees comprise the workforce for 
these sites except for Fort Indiantown Gap, Pennsylvania and Camp 
Withycomb, Oregon where temporary federal employees make up the work 
force. Of the 350 employees, 75 percent are Army National Guard 
soldiers and 25 percent are civilians.
    As of November 30, 1997, RETROEUR repair sites have received 8,610 
vehicles and 17,400 pieces of communications-electronics equipment. 
Vehicles received thus far include M1A1 tanks, M113 personnel carriers, 
M3A2 CFV's, M88 tank recovery vehicles, High Mobility Multipurpose 
Wheeled Vehicles (HMMWV), CUCV's, and five-ton trucks. Once an item has 
been repaired, the Army Material Command directs the shipments to 
organizations within all three components of the Army. A total of 5,844 
vehicles and 9,846 communications-electronics items have been repaired.
    In addition to providing a valuable means to redistribute assets 
within America's Army, the RETROEUR initiative provides hands-on 
maintenance, supply accountability, and warehouse management training 
for many Army National Guard soldiers. The Army National Guard RETROEUR 
Program has enhanced the equipment readiness of the Active Army, Army 
National Guard, and Army Reserve. The RETROEUR program is scheduled to 
complete all work by the end of fiscal year 1998.
                         facilities management
    The Army National Guard operates over 3,200 owned and 90 leased 
armories in 2,700 communities in all 50 states, Puerto Rico, the Virgin 
Islands, Guam, and the District of Columbia. In addition, the Army 
National Guard federally supports the operation and maintenance of more 
than 18,000 training, aviation, and logistical facilities located 
throughout the nation.
Military Construction
    Fiscal year 1997 saw a number of much needed military construction 
projects initiated throughout the nation. In all, 50 major construction 
projects worth over $179.5 million were awarded in fiscal year 1997. An 
additional 39 projects are scheduled to be awarded in fiscal year 1998. 
The fiscal year 1997 appropriation of $78 million funded 16 projects, 
including $52 million for major construction, $20 million for planning 
and design and $5.5 million for unspecified minor construction.
Facility Operations and Maintenance
    In fiscal year 1997, $203.5 million, or $3.13 per square foot, was 
provided for real property operations and maintenance, about $26.3 
million less than in fiscal year 1996. This program pays for salaries 
required to support facility operations and maintenance as well as 
providing funds for utilities, minor construction, maintenance and 
repair projects, and supplies required to extend the useful life of 
National Guard facilities. The Federally supported square footage 
increased from 62.6 million square feet in fiscal year 1996 to 65 
million square feet in fiscal year 1997, just as equipment 
modernization and aging facilities have increased overall maintenance 
requirements. In fiscal year 1988, $3.41 per square foot was available 
to operate and maintain Army National Guard facilities. In fiscal year 
1998, that amount is $2.95 per square foot, or $2.30 in constant fiscal 
year 1988 dollars; a decrease of over 30 percent.
Base Realignment and Closure Commission (BRAC)
    The BRAC Commission findings and recommendations in June of 1995 
will result in the transfer of four active component installations to 
the National Guard over the next few years. Transfer of Fort Pickett, 
VA, and Fort Chaffee, AR, are scheduled for 1998. Fort Indiantown Gap, 
PA, is scheduled to transition in 1999 and Fort McClellan, AL, in 2000.
                       operations and maintenance
    In the upcoming year, the Army Guard will press on with its effort 
to forge a military that is ``second to none'' when meeting its tough 
federal and domestic agenda. In times of national emergency--military 
or budgetary--our free society has demanded much from its citizen-
soldiers and, as the following pages will attest, no other force has 
responded more effectively to that call than the Army National Guard.
The Year in Review
    In 1997, Army National Guard soldiers deployed to Europe for 
Operation Joint Endeavor/Guard. More than 27,600 of our soldiers went 
overseas to support these real-world missions and other training. 
Domestically, the Guard expended over 280,000 man days to respond to 
natural disasters and in the performance of other state duties. All of 
these requirements were accomplished simultaneously with the 
inactivation of 416 Army Guard units or elements of units, personnel 
reductions in excess of 10,608 positions, changes to unit missions and 
ambitious annual training and equipment modernization programs. 
Throughout this period, Guard soldiers and their families remained the 
centerpiece of the ARNG strategy. Today, more than ever, the all-
volunteer force relies heavily on Guard families' resolve and 
commitment as well as a strong community support base. The many 
personal and professional sacrifices ARNG soldiers and their supporters 
make in peace and war will continue to be the benchmark upon which all 
other reserve forces in the world are measured and tested.
The Army National Guard Overseas
    During fiscal year 1997, Army National Guard soldiers deployed 
overseas for real-world missions, to support combatant commands and 
United Nations Peacekeeping Forces, and to participate in routine 
training exercises. Army Guard units also supported overseas 
commanders-in-chief strategies for nation assistance. In all, 27,665 
soldiers deployed overseas.
Task Force ABLE SENTRY (TFAS) Initiative
    In August 1997, 65 Army National Guard soldiers from three states 
deployed to TFAS in Macedonia as part of the 1st Armored Division's TF 
1-6. The TFAS mission is to ensure that the unrest in former Yugoslavia 
does not spill over the border to the South, into Macedonia. The 
battalion task force assumed the TFAS mission on 5 September as part of 
the United Nations Preventive Deployment Force in Macedonia. The 
following units were tasked to provide the first Combat Support/Combat 
Service Support slice to TFAS:

Presidential Selective Reserve Call-up (PSRC) Support to Task Force Able 
Sentry

        Units/State                                             Soldiers

220th Military Police Company/CO..................................     9
1-106th Aviation Assault Battalion/IL.............................    22
203rd Engineer Battalion/MO.......................................    34
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................    65

    These soldiers returned in early 1998 after a six-month rotation 
with TFAS. The initiative has been an overwhelming success not only for 
the ARNG, but also for America's Army in our fulfillment of U.S. 
national objectives.
    The Guard's two Special Forces (SF) Groups supported Joint Chiefs 
of Staff (JCS) exercises and Joint Combined Exercise Training (JCET). 
In the Pacific Theater, these exercises included Foal Eagle, Frequent 
Storm, ULCHI Focus Lens and Cobra Gold. Additionally, eight Special 
Forces medics deployed in support of efforts to identify remains from 
Southeast Asia. In the U.S. Southern Command, JCET operations involved 
400 soldiers who trained in Belize, Bolivia, Colombia, Ecuador, El 
Salvador, Honduras, Panama and Suriname.
    Approximately 650 Guard soldiers deployed to the Jungle Operations 
Training Center in Panama, while another 200 medical personnel deployed 
to U.S. Southern Command to provide medical/dental care and 
preventative medicine education for local populations.
    About 4,600 Guard soldiers deployed overseas in fiscal year 1997 to 
conduct humanitarian and civic assistance projects and host-nation 
mission support. These personnel participated in the construction or 
rehabilitation of 21 schools, seven clinics, three community centers, 
four water wells, and 21.4 km of ``farm-to-market'' roads. The Army 
Guard also deployed 2,321 Military Police worldwide for force 
protection, installation security, and law enforcement missions. Other 
accomplishments include the deployment of 3,090 soldiers for the 
USAREUR Equipment Maintenance programs and the Combat Equipment Group-
Europe (CEG-E) as well as deployments to all theaters for Joint Chiefs 
of Staff (JCS) directed exercises such as Nuevos Horizontes 1997 
(Belize) and Nuevos Horizontes 1997 (Panama), Fuerzas Defenzas, Bright 
Star, Atlantic Resolve, Tradewinds, ULCHI Focus Lens, Keen Edge and 
Northwind. Additionally, the ARNG provided over 1,000 soldiers to the 
Theater and Equipment Maintenance Site (TEAMS) for organizational and 
direct support maintenance along with over 1,500 soldiers comprised of 
maintenance, logistics and medical personnel to augment USARSO in its 
support of the ARNG and JCS exercises and RETRO Panama operations.
RC to AC Program
    The Department of the Army (DA) continued support to the Reserve 
Component to Active Component (RC to AC) program. The goal of this 
program is to relieve the personnel and OPTEMPO of active Army units 
through integrated use of RC soldiers. The Guard provided 6,853 
soldiers who provided 119,138 mandays in relief of the Active Component 
troops.
Military Exchange Programs
    Army Guard soldiers participated in three company-size reciprocal 
unit exchanges with the United Kingdom and Germany. The exchanges 
provide soldiers and units with valuable training while permitting each 
to become familiar with the other's military doctrine and tactics. The 
Minnesota Army National Guard established a formal unit exchange with 
the Norwegian National Guard. This company-size exchange focuses on 
winter warfare operations. Thirteen Guard officers were exchanged with 
officers from the United Kingdom and Germany for two weeks of annual 
training.
    Finally, the Puerto Rico Army National Guard participated in the 
Latin American Co-op Exchange Program in the Caribbean basin. Each 
year, more than 500 soldiers from Puerto Rico deploy to the Dominican 
Republic, Jamaica, and Barbados.
State Partnership Program
    The Army Guard participated in the European Command's Joint Contact 
Team Program (JCTP) under the auspices of the National Guard's State 
Partnership Program (SPP). Under the program, the Army National Guard 
serves as a model of a military force subject to civil authority for 
Central European and former Soviet Union countries.
    The Guard is also providing instruction on military support to 
civil authorities in planning and responding to civil emergencies and 
natural disasters. Other areas of special interest for these countries 
are recruiting, retention, training of reserve forces, and mobilization 
to support active Army forces.
    In fiscal year 1997, the Army Guard provided traveling contact 
teams, seminar participants, and state Adjutant General/Governor visits 
to Central European and former Soviet Union countries, as well as 
hosting numerous familiarization tours to the partner states in the 
continental United States. In fiscal year 1997, approximately 390 
soldiers deployed to Belarus, Bulgaria, Czech Republic, Croatia, 
Estonia, Hungary, Kazakhstan, Kyrgystan, Latvia, Lithuania, Macedonia, 
Moldova, Poland, Republic of Georgia, Romania, Slovakia, Slovenia, 
Turkmenistan, Ukraine and Uzbekistan.
    For fiscal year 1998, the European Command's Joint Contact Team 
Program (JCTP) is being funded to support 10-12 Military Liaison Team 
positions and approximately 145 events in the European Theater.
Partnership for Peace
    The National Guard Bureau also supports Partnership for Peace (PfP) 
events. In fiscal year 1997, the Guard hosted familiarization and 
observation tours for the Czech Republic, Estonia, Hungary, Kazakhstan, 
Latvia, Lithuania, Moldova, Republic of Georgia, Slovakia, Slovenia, 
and Ukraine.
Foreign Military Sales Support
    The Vice Chief of Staff of the Army has directed the Guard to 
provide training in support of Foreign Military Sales (FMS) to the 
Republic of Singapore. The Texas Army National Guard provided CH-47D 
helicopter crewmember training and aircraft support to the Republic of 
Singapore Air Force.
Future Operations
    In fiscal year 1998 the Army Guard plans to deploy nearly 22,000 
soldiers to overseas theaters. These deployments will consist of JCS 
directed exercises, command sponsored exercises, Humanitarian and Civic 
Assistance projects, Medical and Engineer Readiness and Training 
exercises, Special Operations Forces exercises, and various types of 
mission augmentation support to overseas commands. Additionally, Guard 
soldiers will participate in individual and small unit exchanges with 
the Armed Forces of the United Kingdom, Germany, France, the 
Netherlands, Norway, Dominican Republic, Barbados, and Jamaica.
Operational Support Airlift Command (OSACOM)
    The Guard's Operational Support Airlift Command (OSACOM) underwent 
significant changes in 1997. The Command was reorganized into two 
organizations: the Operational Support Airlift Agency (OSAA) and 
OSACOM.
    The Operational Support Airlift Agency provides command and control 
over the Operational Support Airlift Command; manages the resourcing 
for CONUS and OCONUS based Operational Support Airlift airplanes; 
maintains an airlift data collection and analysis system for the 
purposes of airlift asset management; and provides accountability for 
all fixed wing OSA missions and ensures compliance with DOD, Army and 
ARNG directives, policies and regulations.
    The Operational Support Airlift Command provides command and 
control the Operational Support Airlift Regional Flight Centers and the 
Untied States Army Priority Air Transport Detachment. It also provides 
priority air transportation for the senior leadership of the Army, 
secure transport of classified materials and responsive OSA support to 
all Army components.
    In fiscal year 1997, OSAA/OSACOM executed 9,520 missions, 
transporting 77,685 passengers, airlifting 1,103,668 pounds of cargo 
and flying more than 50,600 hours. OSAA/OSACOM has also provided pilots 
and aircraft in support of a CENTCOM mission in Saudi Arabia and pilots 
to support Operation Joint Guard. In fiscal year 1998, OSAA/OSACOM is 
projected to fly over 64,000 hours. OSAA continues to provide quality 
assurance of all Army mission requests submitted to Joint Operational 
Scheduling Airlift Center (JOSAC) and oversight on performance of JOSAC 
missions by Army OSA providers to increase the efficiency of OSA 
support for all Army users. OSAA plans to inspect all ARNG Fixed Wing 
(FW) OSA assets in fiscal year 1998 and fiscal year 1999 through a 
Command Inspection Program (CIP). OSAA continues to improve automation 
capabilities through equipment and software upgrades that will allow 
rapid resource adjustments based on operational demands.
The Army National Guard at Home
    In fiscal year 1997, men and women of the Army and Air National 
Guard in 54 states and territories served their communities during 308 
emergency response missions, expending over 280,000 mandays. Of these 
308 call-ups, 146 were natural disasters, 35 were civil emergencies, 39 
were in support of law enforcement agencies, and 88 were other 
miscellaneous types of missions. The ability to call upon the Guard on 
an ``as-needed'' basis for State support missions demonstrates the 
value of a part-time, trained, and ready community based force. These 
domestic support missions reinforce the Guard's preeminent role as the 
military's first responder when emergencies strike.
    The National Guard's most significant domestic activities during 
fiscal year 1997 involved operations supporting recovery from natural 
disasters. Army Guardsmen provided assistance during Hurricanes Fran 
(North Carolina), and Hortense (Puerto Rico and the Virgin Islands), 
and numerous emergency support functions in connection with flooding in 
the Midwest and the Ohio River valley. Internationally, the Wyoming 
Guard deployed three C-130 aircraft (two equipped with the Modular 
Airborne Fire Fighting Systems (MAFFS) to Indonesia in October 1997 to 
assist in fighting fires affecting that nation's rain forest.
El Nino Consequence Management
    Experts studying this weather trend predicted the worst El Nino in 
recent years. The Guard is consistently prepared to assist in recovery 
from natural disasters associated with these weather effects. As an 
integral part of these efforts, the ARNG assisted state and local 
agencies in managing consequences of the El Nino phenomenon.
    A conference on El Nino took place in January 1998 at the National 
Interagency Counterdrug Institute (NICI) in San Luis Obispo, CA, with a 
primary purpose of promoting cooperation and mutual support between the 
states. Key issues discussed included the status of compacts between 
States/Territories, the development of El Nino threat awareness, 
assessment, and the study of potential impacts on certain geographic 
areas of the country.
    The ARNG continues to monitor the status of engineer equipment, 
water purification units, and sandbag inventories within states likely 
to be affected by El Nino, and other flood-prone states and is 
continuing to plan for a variety of assistance and support.
Depot Maintenance
    The Army National Guard depot maintenance program is based on a 
``repair and return to user'' premise. This means Army National Guard 
equipment is repaired to deployable standards and returned to the 
owning units. The Army National Guard does not have an equipment 
maintenance float.
    Backlogs and carryover from year to year increase the unserviceable 
equipment that must be supported. A depot maintenance backlog decreases 
the Army National Guard capability to meet assigned materiel readiness 
goals, decreases the quantities of serviceable equipment available to 
support Army National Guard training programs, and impairs the Army 
National Guard capability to rapidly mobilize and deploy high priority 
units. Depot level maintenance of aging Army National Guard equipment 
is the key to obtaining the highest possible level of Army National 
Guard equipment readiness.
    The Army National Guard Depot Maintenance Program is funded at 35 
percent of its total requirement for fiscal year 1999. Funding for this 
vital area is expected to increase slightly in the out years but depot 
maintenance requirements for the enhanced Separate Brigades continue to 
remain a key concern. For fiscal year 1999, funding levels for the 
enhanced Separate Brigades remain at 60 percent, while the funded 
levels for divisions is eight percent of depot maintenance 
requirements.
                         training and education
    The Guard continued to place great emphasis on the training and 
education of ARNG personnel in 1997. Training and education initiatives 
included the Select, Train, Promote and Assign Policy and the Distance 
Learning Initiative. Additional support in this area was provided by 
the Visual Information Support Center in Nashville, TN. Finally, 
operations at ARNG Aviation Training Sites (AATS) and the Army's Combat 
Training Centers round out Guard Training and education efforts.
Select, Train, Promote, and Assign Policy
    The Select, Train, Promote, and Assign (STPA) Policy is a personnel 
management system designed to increase readiness through more effective 
personnel management practices. This policy directs the expenditure of 
individual training funds to those enlisted soldiers on a promotion 
list for current or projected vacancies. The intent is to match 
individual and unit training requirements at the appropriate grade 
level and occupational specialty. This procedure maximizes the use of 
scarce training money and delivers trained soldiers to fill unit 
vacancies.
Distance Learning
    In many ways, the Distance Learning Program represents the future 
of training and education in the Army National Guard. The Distance 
Learning Program upgrades armory space to high tech classrooms, all of 
which are linked by fiber optic cable to centralized teleconference 
facilities. The result is a fully interactive classroom where both 
military and non-military studies can be conducted.
    The Distance Learning initiative continues to expand its scope in 
compliance with congressional intent and funding. Nine prototype 
classrooms with their supporting communications links are operational 
in Maryland, West Virginia, and Virginia. During fiscal year 1998, 
plans call for installation of over 150 additional distance learning 
classrooms impacting all states and territories. The classroom network 
is primarily intended to increase the mobilization readiness of the 
National Guard force structure via advanced information technology 
classrooms and networks. Concurrently, the infrastructure will provide 
state-of-the-art technology assets to local communities through shared 
use arrangements. Close collaboration has been maintained with DOD 
agencies, state and local governments, and other civil and military 
organizations to ensure the implementation of appropriate technologies.
    Critical to the success of the distance learning program is the 
establishment of a robust and dynamic telecommunication infrastructure 
which combines voice, video, and data traffic into one economical, 
highly efficient integrated network. The ARNG is currently provisioning 
a comprehensive communications network utilizing Asynchronous Transfer 
Mode (ATM) technology which will extend from NGB to all State Area 
Commands (STARC) and ultimately to every classroom connected to the 
architecture. This network will consolidate and upgrade numerous 
telecommunications functions currently operating in solitary, stovepipe 
environments. When fully operational, the system will provide 
significant opportunities for more efficient, effective, and economical 
communications links throughout the ARNG. As of first quarter fiscal 
year 1998, all States and Territories will be connected to the new 
digital network and classroom expansion is beginning.
Visual Information Support Center
    The Visual Information Support Center (VISC) in Nashville, 
Tennessee, continued to serve as the Army Guard production center for a 
variety of Visual Information (VI) products including regional 
multimedia imaging, banners, posters and the duplication of videotapes 
and compact discs. During fiscal year 1997, the VISC developed visual 
information products for recruiting and retention and drug demand 
reduction for a variety of DOD and State organizations. In addition, 
the VISC produced several training and public service announcements and 
documented numerous Army Guard events for historical purposes. The VISC 
also provided audio-visual support to Marketing NCO Class 1997-2002 and 
the 1997 Public Affairs workshop. Finally, the VISC Rapid Response 
Documentation Team videotaped numerous ARNG units engaged in disaster 
relief support missions.
ARNG Aviation Training Sites (AATS)
    The ARNG missions three Aviation Training Sites designated as 
national training assets for the Total Army. The Eastern ARNG Aviation 
Training Site (EAATS) is located at Fort Indiantown Gap, Pennsylvania 
and conducts Aviator Qualification Courses, Enlisted Training Courses, 
NCOES and Foreign Military Sales training for UH-1, UH-60 and CH-47D 
helicopters. The Western ARNG Aviation Training Site (WAATS) is located 
at Silver Bell Army Heliport, Marana, Arizona and conducts Aviator 
Qualification Courses, Enlisted Training Courses, NCOES, and Foreign 
Military Sales training for AH-1F, OH-58 helicopters and RAID aircraft. 
AH-1F training is only conducted at the WAATS for the Total Army and 
future plans are to conduct AH-64A helicopter training at this location 
in fiscal year 1999. The High Altitude Aviation Training Site (HATS) is 
located in Gypsum, Colorado and conducts high altitude power management 
courses in Utility and Observation aircraft for Active Component, 
Reserve Component and Foreign Military Sales. The Aviation and Safety 
Division, in coordination with Operational Support Airlift Command 
(OSACOM) also operates the Fixed-Wing Aviation Training Site (FWATS) in 
Clarksburg, West Virginia. The FWATS conducts Aircraft qualification 
courses in C-12, C-26, and C-23 fixed wing aircraft for the Total Army. 
Both the EAATS and WAATS are regional simulation sites, offering 
simulation support to the Total Army in AH-1F, UH-1H, UH-60, and AH-64 
helicopters. Future plans will move a CH-47D simulator to EAATS and an 
additional AH-64 Combat Mission Simulator (CMS) to WAATS in fiscal year 
1998.
Combat Training Centers (CTC)
    The ARNG participates in all of the Army's CTC's; The National 
Training Center (NTC), Fort Irwin, CA, the Joint Readiness Training 
Center (JRTC), Fort Polk, LA, the Combat Maneuver Training Center 
(CMTC), Hohenfels, GE, and the Battle Command Training Program (BCTP), 
Fort Leavenworth, KS. The Brigade Command Battle Staff Training Program 
(BCBST) is a subset of BCTP. The Army CTC program is divided into live 
simulation (NTC, JRTC, and CMTC) and constructive simulation (BCTP and 
BCBST). The ARNG CTC program schedules units to attend the CTC's in the 
following capacities; rotational (BLUFOR) units, augmentation to other 
ARNG and AC rotational (including BLUFOR) units, augmentation to CTC 
Opposing Forces (OPFOR), and other types of support based on the needs 
of the CTC's.
National Training Center (NTC)
    The National Training Center, located at Fort Irwin, CA is the 
Army's premier heavy maneuver Combat Training Center (CTC). As large as 
the state of Rhode Island, the fully instrumented NTC allows live 
Brigade level force-on-force exercises to be conducted numerous times 
each year. The ARNG receives one brigade rotation at the NTC each year. 
Rotations are allocated to the eight mechanized infantry/armored 
enhanced Separate Brigades (eSB's), making the rotation schedule once 
every eight years for each brigade. Based on associated Active 
Component unit input and using FORSCOM/ARNG Reg. 350-2, dated 1 March 
95, (FORSCOM Commander's Assessment Matrix), the Adjutant General 
determines whether the unit has met the training requirements and will 
attend its scheduled rotation. The 116th enhanced Separate Armored 
Brigade (ID) will attend in fiscal year 1998, and the 155th enhanced 
Separate Armored Brigade (MS) is scheduled to attend in fiscal year 
1999.
    The ARNG receives and allocates five Leader Training Program (LTP) 
rotations annually. The LTP's are six days in length, and enhance staff 
coordination and combat decision making skills. Three LTP's are 
allocated to heavy brigades that attend NTC. Two LTP's go to light 
brigades that will attend JRTC. LTP's include a Tactical Exercise 
Without Troops (TEWT) and a JANUS battle staff trainer simulated 
exercise tied to the CTC terrain and fought against the CTC OPFOR.
Joint Readiness Training Center (JRTC)
    The Joint Readiness Training Center (JRTC) is the light infantry 
equivalent of the Army's NTC. Located at Fort Polk, LA, JRTC hosts 
light infantry and special operations forces from all components for 
rotations stretching throughout the year. The ARNG receives one brigade 
rotation each year. The rotations are allocated to the seven light 
infantry enhanced Separate Brigades (eSB's). As with the other eSB's, 
the Adjutant General determines if the unit will attend. The 41st eSB 
(OR) is scheduled to attend in fiscal year 1998 and the 29th eSB (HI) 
is scheduled to attend in fiscal year 1999.
    The ARNG receives and allocates two LTP rotations annually. These 
rotations are allocated to the eSB's based on units' relative calendar 
proximity to scheduled JRTC rotations.
    As with the NTC, training opportunities exist for Combat Arms, 
Combat Support and Combat Service Support units to augment BLUFOR and 
OPFOR units and to provide installation support.
Combat Maneuver Training Center (CMTC)
    The Combat Maneuver Training Center (CMTC), Hohenfels, Germany, 
combines aspects of the NTC and JRTC for U.S. Forces assigned to U.S. 
Army Europe. Attendance at the CMTC involves Overseas Deployment 
Training (ODT). The scheduling of units and training opportunities is 
managed by NGB. Elements of the 3d Battalion, 126th Infantry (Air 
Assault), Michigan Army National Guard, augmented the 1st Battalion 
508th Airborne Battalion Combat Team's AC BLUFOR rotation in August and 
September 1997. Opportunities exist for Combat Arms, Combat Support and 
Combat Service units to augment the OPFOR and to provide installation 
support. ARNG support for the CMTC is considered vital to the Center's 
continued viability as a CTC.
Training Opportunities
    In addition to dedicated Guard rotations at NTC and JRTC, numerous 
opportunities exist for Guard units to augment Active Component 
maneuver forces at the CTC's. Units required by the CTC's for the 
augmentation of Active Component rotations include Field Artillery MET 
sections and Tactical Operations Centers (TOC), Main Support 
Battalions, ADA Batteries, MP Platoons, chemical companies, and MI 
companies. In addition, each NTC and JRTC rotation requires engineer 
and infantry elements to serve as Opposing Forces (OPFOR), and various 
CSS assets to provide general rotation support.
                     leveraging training technology
    The Army National Guard made extensive use of simulation in 
training again this year. As in the past, these simulations have 
provided a stressful training environment for commanders, staffs, 
units, and individual soldiers to practice skills necessary for 
fighting and winning on today's battlefield. Simulations provide 
equivalent difficulty and greatly enhanced repetitive training at a 
fraction of the cost of ``full-up'' live training experiences. The Army 
National Guard plans to aggressively pursue the leveraging of 
simulation technologies in Guard training in the future.
Simulation in Training for Advanced Readiness (Project SIMITAR)
    The joint Defense Advanced Research Projects Agency (DARPA)/ARNG 
project SIMITAR (Simulation in Training for Advanced Readiness) 
continued its development of training simulation technologies, 
methodologies and strategies for use by ARNG heavy maneuver Brigades. 
The interjection of these initiatives into the 48th Bde. (Georgia 
ARNG), and the 116th Cavalry Bde. (Oregon, Montana, and Idaho National 
Guard) continued in fiscal year 1997 with an NTC rotation by the 48th 
Bde. Concurrently, the 116th Bde. completed a SIMITAR assisted Annual 
Training (AT) at Gowen Field Idaho in which the Bde. successfully 
qualified on Tank Table VIII by day two of the AT period. 116th 
followed up this success by conducting Table XII by day six. Both of 
these milestones were achieved through use of a variety of training 
simulations that allowed execution of most preliminary gunnery and 
maneuver activities prior to the Annual Training (AT) period.
    Simulation in training initiatives developed or modified by project 
SIMITAR include the A-FIST, the ARPA Reconfigurable Simulator 
Initiative (ARSI), the Digital Systems Test and Training Simulator 
(DSTATS), and an updated version of the JANUS battle-staff trainer 
developed in cooperation with DARPA. Fiscal year 1997 also witnessed 
the introduction of several completely new initiatives, including D-
FIRST and Bradley FIST. D-FIRST is a live force-on-force company-team 
level system that replaces MILES by using highly accurate Global 
Positioning System (GPS) devices to track engagements. Bradley-FIST, an 
initiative that combines the Bradley Conduct of Fire Trainer (COFT) 
with the Engagement Skills Trainer (EST), allows Bradley Crewmembers to 
interact with dismounted elements simultaneously in simulation for the 
first time.
STEP (SIMITAR Training Exportable Package)
    Following the success of the SIMITAR program, ARNG leaders explored 
ways to apply the most successful aspects of this experimental effort 
to the Guard as a whole. The result of this study is the SIMITAR 
Training Exportable Package (STEP). Like SIMITAR, STEP is a training 
package designed to prepare brigades for a Combat Training Center (CTC) 
rotation. The package contains a training strategy, methodologies and 
technologies that when applied give ARNG brigades the skill set 
required to perform Brigade Combat Team (BCT) operations at a CTC.
    STEP is a unit sustainment training program that is home station 
based and employs simulations to the greatest extent possible to 
conduct structured training. The strategies, methodologies and 
technologies developed for SIMITAR are refined, packaged and presented 
to ARNG separate brigades during years 6, 7, and 8 of their 8 year 
training cycle.
STEP provides training in three key areas:
    Battlestaff Training.--This component uses the JANUS constructive 
exercise system to train battalion and brigade battle staffs in a 
rigorous and structured way. JANUS exercises are executed at home 
station.
    Unit Collective Training.--This component employs both virtual 
maneuver and virtual gunnery devices to conduct training at home 
station. The Compressed Gunnery Strategy is the center piece of the 
collective piece which allows a unit to conduct both gunnery and 
maneuver in the same year.
    Combat Service Support (CSS) and individual training.--STEP uses 
computer based training systems to the maximum extent possible. A CSS 
training strategy that focuses on CTC support to maneuver battalions in 
all three combat missions is emphasized.
    STEP is the system required to prepare a BCT to meet the rigors of 
a CTC rotation. By implementing a sequential and progressive training 
strategy that is device based coupled with demanding live training, an 
ARNG separate brigade can have a successful CTC rotation.
Aviation Reconfigurable Manned Simulator
    The Army National Guard is developing an Aviation Reconfigurable 
Manned Simulator (ARMS) as a cost-effective solution to enhance flying 
safety and readiness. This system is being developed with the mutual 
cooperation and support of the U.S. Army Aviation Center (USAAVNC) and 
the Army's Simulation, Training and Instrumentation Command (STRICOM). 
It can be quickly reconfigured to each of the rotary and fixed wing 
airframes flown in the Army Guard. The device is a collective training 
simulator which provides for a 360 degree virtual environment, a helmet 
mounted display system, accurate cockpit housing, realistic controls 
and essential panels, and tactile-interactive cockpit panels. Each ARMS 
provides training in individual and crew tasks, and focuses on 
collective, combined arms, and joint service operations. Reconfigurable 
simulators such as ARMS complement existing older technology simulators 
as well as future training technologies. ARNG Aviation's requirement is 
for six company-size sets of 6 cockpits each for a total of 36 
cockpits, each set transportable to any ARNG unit as needed.
Training, Readiness and Operations Unit Planning, Execution and 
        Resourcing System
    The Training, Readiness and Operations Unit Planning, Execution and 
Resourcing System (TROUPERS), will provide ARNG leaders with the tools 
to maximize training benefits and support the full execution of 
training funds. TROUPERS is a reports generator that draws information 
from existing Standard Army Management Information System (STAMIS) 
databases and provides the state and national leadership tools to plan, 
allocate resources and monitor the execution of annual training, 
schools, special training and Inactive Duty Training. The system allows 
senior leaders access to budget information relating to reservation, 
obligation, execution and forecasted year-end execution for Annual 
Training, Individual Duty Training, Schools and Special Training.
                             safety program
    The Army National Guard safety program is based upon individual 
responsibility and leader commitment to safe operations in all 
environments. Guard supervisors and soldiers at all levels must work to 
ensure that all possible precautions are observed during deployments, 
training, or on domestic support operations. Central tenants of the 
Guard safety program include risk management, leadership, discipline, 
and strict adherence to Total Army safety standards.
Aviation Safety
    The ARNG takes an aggressive approach to safety, and this has 
resulted in the lowest aviation accident rate in the history of the 
Army National Guard. The Army National Guard leads the rest of DOD in 
aviation safety and has developed a safety program that other military 
organizations emulate.
    Despite dwindling resources, the ARNG safely executed an aggressive 
flying hour program in fiscal year 1997 with a Class A-C accident rate 
of only 2.76 accidents per 100,000 flying hours. Unfortunately, the 
year was marked by an increase in the engine failure rate in the UH-1 
Huey helicopter that resulted in two serious accidents. The reliability 
of this engine is being reviewed and flight restrictions have been 
placed on affected aircraft pending further engineering studies.
    The greatest challenge to Army National Guard aviation safety is 
the continued reduction in aviation training funds. Units have reported 
a decrease in pilot proficiency in high demand aviation tasks such as 
night vision goggle operations and multi-ship low level flight. Given 
current trends in aviator proficiency and increased operational 
demands, an eventual increase in the aviation accident rate is 
anticipated.
Ground Safety
    Army National Guard efforts in ground safety were highly successful 
in fiscal year 1997. The Army National Guard experienced a five percent 
decrease in ground accidents during the course of the year. Of the 
accidents that occurred in fiscal year 1997, sixty-five percent 
resulted in personal injury, nineteen percent involved Army Motor 
Vehicles and eleven percent involved privately owned vehicles. However, 
vehicular accidents account for a disproportionately high number of 
fatal injuries. In an effort to combat vehicular accidents the Army 
National Guard launched an aggressive campaign that included unit level 
training and a national awareness campaign.
Occupational Safety and Health Administration (OSHA)
    The Army National Guard experienced an eight percent decline in 
workers compensation claims in fiscal year 1997. The Army National 
Guard will continue to emphasize employee training and OSHA compliance 
to decrease accidents. In addition, the Army National Guard will come 
into full compliance with DOD mandated ergonomics programs.
    Ergonomic related injuries are the leading cause of ARNG workman's 
compensation claims. The Army National Guard has developed a new 
partnership with the Department of Labor that includes early 
intervention and return to work of injured employees.
ARNG Risk Management
    The Army National Guard's primary focus for fiscal year 1998 is to 
comply with the Army's mandate to integrate risk management into all 
processes and operations. The Guard will use risk management as its 
primary accident prevention and loss avoidance tool.
    The goals of the ARNG risk management integration program include 
educating all Guard soldiers and civilians on the five steps of Army 
risk management and incorporating risk management into mission 
planning, policy and processes.
                         environmental program
    The Army National Guard Environmental Program emphasizes 
responsible stewardship of the land and facilities managed by the ARNG 
and ensures compliance with environmental laws and regulations. This is 
accomplished by promoting the Army's environmental goals through the 
ARNG environmental compliance, conservation and restoration efforts in 
all 54 states and territories.
Compliance
    Increased funding will help accelerate the ARNG's transition to a 
more proactive compliance posture. Prior to fiscal year 1998 the ARNG 
did not receive sufficient funding to meet all of its environmental 
requirements. As a result, spending was confined to critical 
environmental projects.
    For fiscal year 1999, funding for ARNG environmental programs is 
sufficient to allow for the completion of many deferred projects, 
thereby permitting a renewed emphasis on pollution prevention and 
environmental stewardship. For example, expanded solvent substitution 
programs will simultaneously reduce hazardous waste generation, 
disposal costs, and exposure risks to soldiers and civilians. Moreover, 
improvements to Spill Prevention Control and Countermeasure Plans, 
secondary containment systems for fuel tankers, and wastewater 
treatment systems will soon occur.
    The ARNG will consequently possess the resources necessary to 
support and enhance training and to provide power projection platforms 
from its more than 3,200 highly dispersed CONUS facilities.
    Maintaining a high degree of environmental compliance will require 
timely and accurate corporate information management. To this end, the 
Windows Compliance Assessment and Sustainment Software (WINCASS) will 
fully integrate the ARNG's Environmental Compliance and Assessment 
System (ECAS) into a developing, comprehensive environmental reporting 
network. ECAS will be the first automated tool to implement alternating 
internal and external assessments and will permit continuous evaluation 
of regulatory compliance conditions and management systems.
Conservation
    The National Environmental Policy Act (NEPA) requires that the ARNG 
consider the significant environmental effects of its major actions or 
decisions. Pursuant to the NEPA, programmatic environmental assessments 
will realize cost savings to the ARNG for fiscal year 1999. Moreover, 
all installations will continue working to ensure Integrated Natural 
Resource Management Plans and Cultural Resource Management Plans are in 
place by fiscal year 2000. The Forestry Reinvention initiative will 
streamline timber sales, ensuring greater return of funds to the 
installations and local communities. The Integrated Training Area 
Management (ITAM) implementation strategy to analyze and manage 
environmental impacts on training facilities and maneuver areas. This 
is being aggressively implemented at 54 separate locations with the 
goal of having all primary training sites under the same system by 
fiscal year 1999.
Restoration
    The ARNG's most significant environmental challenge continues to be 
the clean-up of past-practice contamination. In fiscal year 1999 NGB 
and Massachusetts ARNG will be in the final stages of actions 
associated with ground water investigation and pollution prevention 
activities at the Massachusetts Military Reservation (MMR). However, 
additional challenges to resolution of existing EPA administrative 
orders at MMR could require budgeting and expenditure beyond fiscal 
year 1999 dollars. This budget must also meet the costs of the 
continuing evaluation of other sites and the cleaning of those where 
contamination is identified. Moreover, restoration of facilities 
recently acquired by the ARNG such as Fort McClellan, Fort Indiantown 
Gap and others that are contaminated from past DOD practices will also 
require funding.
    The Army National Guard is conducting Preliminary Assessments and 
Site Inspections (PA/SI) with program management funds from the 
Environmental Restoration Army (ER, A) account. Unfortunately, 
dramatically increasing numbers of requirements will likely overwhelm 
funding. Because of this, the ARNG will require Operations and 
Maintenance (OM) funding to conduct required PA/SI activities projected 
for fiscal year 1999 and later years.
           in touch with our past . . . focused on our future
    A look back at fiscal year 1997 shows an Army National Guard that 
successfully met its obligations to its people and to the Nation as a 
whole. As the information in the preceding pages attests, the Guard did 
more in 1997 with proportionally fewer resources than at any other time 
in its long history. Despite these successes, current trends suggest 
that the Guard faces even greater challenges in the years ahead. Aided 
by Army National Guard Vision 2010, and the leadership of Guardsmen 
throughout the country, the Guard will successfully meet every 
challenge as it enters the 21st century.
                                 ______
                                 
               Appendix A: NCO's and Soldiers of the Year
    The Army National Guard consists of far more than equipment or 
funding. The people that make up the Guard represent its greatest 
resources. Accomplishing Guard missions would be impossible without the 
dedicated work by Guard members throughout the nation. This page is 
dedicated to those Guard soldiers who distinguished themselves during 
fiscal year 1997. We salute them, and Guard members like them 
everywhere.
    SGT Richard S. Boggan, Co. A, 1st Bn, 20th Special Forces Group, 
Auburn, Alabama, First Army NCO of the Year.
    SSG Pamela B. Paff, HHC, 1st Bn, 207th Aviation, Anchorage, Alaska, 
Pacific Region NCO of the Year.
    SSG Todd D. Smith, 3650th Maintenance Co (-), Golden, Colorado, 
Fifth Army NCO of the Year.
    SPC Daniel K. Lankford, 1993d Personnel Detachment, Enterprise, 
Alabama, First Army Soldier of the Year.
    SPC James L. Redcorn, Jr., E Troop, 145th Cavalry, McAlester, 
Oklahoma, Fifth Army Soldier of the Year.
    SPC Le Kim Lee, Co. C (Medical), 29th Support Battalion, Honolulu, 
Hawaii, Pacific Region Soldier of the Year.
                                 ______
                                 
          Appendix B: Constitutional ``Charter'' of the Guard
    our charter is the constitution of the united states of america.
    Militia Clauses. Article I, Section 8 of the U.S. Constitution 
contains a series of ``militia clauses,'' vesting distinct authority in 
the Federal government and the State governments.
    Clause 14 provides that the Congress has three constitutional 
grounds for calling up the militia: ``to execute the laws of the Union, 
suppress insurrections, and repel invasions.'' All three standards 
appear to be applicable only to the Territory of the United States.
    Clause 15 gives Congress the power ``to provide for organizing, 
arming, and disciplining the militia, and for governing such part of 
them as may be employed in the service of the United States.'' That 
same clause specifically reserves to the States the authority to 
establish a State-based militia, to appoint the officers, and to train 
the militia according to the discipline prescribed by the Congress. As 
written, the clause seeks to limit Federal power over State militias 
during peacetime.
    Armies Clause. The ``armies clause'' in Article I, Section 8 
conferred on the Congress the power to provide for the common defense 
of the United States, declare war, raise and support armies, and make 
rules for the ``government and regulation of the land and naval 
forces.'' The Congress also was granted authority to make all laws 
``necessary and proper'' for carrying out such powers. Under this 
provision, congressional power over the National Guard appears to be 
far-reaching.
    Other Relevant Provisions. Other sections add to the constitutional 
underpinnings of our national defense structure. Article I, Section 10 
provides that no State, without the consent of the Congress, shall keep 
troops or ships of war in time of peace, or engage in war unless 
actually invaded. This section was qualified, however, by the Second 
Amendment to the Constitution, which was intended to prevent the 
Federal government from disarming the militia. Part of the Bill of 
Rights that the Anti-Federalists insisted on, states: ``A well-
regulated militia, being necessary to the security of a free State, the 
right of the people to keep and bear arms shall not be infringed.''
    In addition, Article IV, Section 4 provides that the Federal 
government ``shall guarantee to every State in this Union a republican 
form of government,'' and shall protect each of the States against 
invasion. At State request, the Federal government was to protect the 
States ``against domestic violence.'' Through these provisions, the 
potential for both cooperative Federalism and for tension between the 
``militia'' and ``army'' clauses was built into the Constitution.
    Article II, Section 2 places all forces, including the militia when 
in Federal service, under the control of the executive branch by making 
the president commander-in-chief. Article I, Section 8 gave the 
ultimate control to the Congress, however, by granting it the sole 
power to collect taxes to pay for the military, to declare war, and to 
employ the militia for common purposes of internal security. Existing 
State militias could be maintained, although troops could be called 
into national service. But the founding fathers moderated that 
authority by leaving the individual States with the explicit 
responsibility for appointing officers and for supervising peacetime 
training of the citizen-soldiers.
    Militia Act of 1792. Federal policy subsequently expanded and 
clarified the role of the militia. The Militia Act of 1792 required all 
able bodied men aged 18-45 to serve, to be armed, to be equipped at 
their own expense, and to participate in annual musters. The 1792 act 
established an idea of organizing these militia forces into standard 
divisions, brigades, regiments, battalions, and companies, as directed 
by the State legislatures.
    For the 111 years that it remained in effect, this act defined the 
position of the militia in relation to the Federal government. The War 
of 1812 tested this unique American defense establishment. To fight 
that war, the new republic formed a small regular military, and trained 
it to protect the frontiers and coastlines. Although it performed 
poorly in the offensive against Canada, this small force of regulars, 
when backed by a well-armed militia, accomplished its defensive mission 
in the War of 1812. Generals like Andrew Jackson proved, just as they 
had in the Revolution, that regulars and militia could be effective 
when employed as a team.
    With the coming of the Civil War, State militias played a pivotal 
role. Because the Regular Army was so small throughout the nineteenth 
century and the Army Reserve did not exist, the majority of Army units 
which carry Civil War battle honors are from the Army National Guard.
    Posse Comitatus. In 1867, the Congress suspended the southern 
States' right to organize their militias until a State was firmly under 
the control of an acceptable government. The U.S. Army was used to 
enforce martial law in the South during Reconstruction. Expansion of 
the military's role in domestic life, however, did not occur without 
debate or response. Reaction to the use of the Army in suppressing 
labor unrest in the North and guarding polls in the South during the 
1876 election led to congressional enactment of the Posse Comitatus Act 
in 1878. Designed to limit the president's use of military forces in 
peacetime, this statute provided that:

        it shall not be lawful to employ any part of the Army of the 
        United States * * * for the purpose of executing the laws, 
        except on such cases and under such circumstances as such 
        employment of said force may be expressly authorized by the 
        Constitution or by any act of Congress * * *

    Concern over this new domestic role also led the States to 
reexamine their need for a well-equipped and trained militia, and 
between 1881 and 1892, every State revised the military code to provide 
for an organized force. Most called their State militias the National 
Guard following New York's example.
    The Dick Act. Beginning in 1903 through the 1920's, legislation was 
enacted that strengthened the National Guard as a component of the 
national defense force. The Dick Act of 1903 replaced the 1792 Militia 
Act and affirmed the National Guard as the Army's primary organized 
reserve.
    The National Defense Act of 1916 further expanded the Guard's role 
and guaranteed the State militias' status as the Army's primary reserve 
force. Furthermore, the law mandated use of the term ``National Guard'' 
for that force. Moreover, the President was given authority, in case of 
war or national emergency, to mobilize the National Guard for the 
duration of the emergency. The number of yearly drills increased from 
24 to 48, and annual training from five to 15 days. Drill pay was 
authorized for the first time.
    The National Defense Act Amendments of 1920 established that the 
chief of the Militia Bureau (later National Guard Bureau) would be a 
National Guard officer, that National Guard officers would be assigned 
to the general staff, and that the divisions, as used by the Guard in 
World War I, would be reorganized. Subsequent amendments to the act, 
the National Guard Mobilization Act of 1933, created the National Guard 
of the United States as a component of the Army at all times, which 
could be ordered into active Federal service by the President whenever 
Congress declared a national emergency.
    Following the experience of fighting an unpopular war in Vietnam, 
the 1973 Total Force Policy was designed to involve a large portion of 
the American public by mobilizing the National Guard from its thousands 
of locations throughout the United States when needed. The Total Force 
Policy requires that all active and reserve military organizations of 
the United States be treated as a single integrated force. A related 
benefit of this approach is to permit elected officials to have a 
better sense of public support or opposition to any major military 
operation. This policy echoes the original intentions of the founding 
fathers for a small standing army complemented by citizen soldiers.

               STATEMENT OF MAJ. GEN. PAUL A. WEAVER, JR.

    Senator Stevens. Let me welcome you, General Weaver, on 
your first appearance before the committee. We are delighted to 
have you here before us and look forward to the opportunity to 
work with you, and we will be happy to have your statement.
    General Weaver. Mr. Chairman and members of this great 
committee and staff, I am glad to be here not only on behalf of 
the 109,000 men and women of the Air National Guard, but also 
as a part of the total Air Force team, one team speaking with 
one voice and with one vision of the future.
    I have entered a statement for the record.
    Today, more than ever, the Air Force relies on its total 
force, Active, Guard, and Reserve working together to meet 
today's peacekeeping and wartime commitments. The Air National 
Guard continues to play a national role in every major 
deployment and contingency tasking, with an average 1997 
participation of 5,000 volunteer Guard men and women deployed 
each month.
    Most importantly, I know this committee fully understands 
that this is with the full support of their families, their 
communities, and their employers, and it is this full spectrum 
link of families, communities, and employers that allows 
continued use of our military forces in support of our national 
security strategy while satisfying the values criteria of the 
American public.
    But it is also worth noting that this Air National Guard 
participation is not just around the edges. It is in the thick 
of things wherever and whenever the Air Force is involved.
    Please let me point out that the first bombs dropped in 
Bosnia were dropped from a Maryland Air National Guard A-10 
unit that was deployed to the theater. The second bombs dropped 
were by Massachusetts A-10 unit, also deployed to the theater.
    These are people that only days earlier were having 
breakfast with their families and going to their civilian jobs, 
but were now proudly serving this great Nation through the use 
of air power, which reduced the overall level of violence and 
stopped the genocide. That link with the civilian population is 
critical as our military strategy runs the gamut from small-
scale contingencies to major theater wars.
    Something else worth noting is that while the Air National 
Guard and Reserve participated in only 11 contingencies and 
humanitarian missions between 1953 and 1990, we were a part of 
more than 40 contingencies between 1991 and 1997. The frequency 
and tempo is rising, and that calls for your continued 
congressional support.
    As our Nation continues to transition from the cold war era 
to meet the 21st century strategic challenges, we know the Air 
National Guard and the Air Force Reserve will be involved in 
even more mission areas that are total Air Force endeavors to 
provide the aerospace power resources which are so much of a 
part of our American advantage.
    We are working diligently to develop new concepts which 
emphasize the revolution in both business and military affairs, 
coupled with new future total force unit ideas that will assure 
that we can continue to provide the aerospace advantages in an 
era of constrained resources.
    But we can only do so much internally. The American warrior 
of the future, whether on land, sea, or air, must always be 
able to rely on the aerospace advantage when he or she goes 
into harm's way. The obligation to assure that aerospace 
advantage is always available is a solemn trust both the Air 
Force and the Congress share together.

                           prepared statement

    We in the Air National Guard are proud of our expanding 
role in the national defense, and look forward to the next 
phase of transformation and our continued partnership with the 
total Air Force and with this great Nation.
    Sir, I look forward to your questions.
    [The statement follows:]
          Prepared Statement of Maj. Gen. Paul A. Weaver, Jr.
    Mr. Chairman and members of the Committee: Thank you for the 
opportunity to appear before this committee, not only on behalf of the 
109,000 men and women of the Air National Guard, but also as part of 
the Total Air Force team.
    It is an honor for me to represent this world class organization, 
which has a proud heritage and an essential role in this nation's 
defense. With the inception of the National Guard 361 years ago in the 
Massachusetts Bay Colony, the ideal of the American soldier emerged--a 
civilian who would take up arms when the nation was endangered, and 
then return to civilian pursuits when the crisis had passed. This 
concept has remained unchanged throughout our nation's history and 
guardsmen and women have proudly served in every American conflict. 
Today we are deployed around the world in support of peacekeeping 
missions, contingencies and exercises. We also are hard at work in our 
communities, whenever and wherever we are needed.
              air national guard role in national security
    Mr. Chairman, please allow me to share with you an array of 
relevant Air National Guard issues. These issues are relevant for 
Congressional consideration in reviewing our role as an integral part 
of the national defense strategy. I am proud to provide you our current 
Air National Guard posture.
The Quadrennial Defense Review
    One very important aspect of the Quadrennial Defense Review (QDR) 
was the reaffirmation of the importance of the Total Force Policy. The 
Air Force fully embraces this concept and we proudly provide a 
significant portion of the wherewithal for our service to effectively 
accomplish its entire range of military options. The Air National Guard 
budget for fiscal year 1999 reflects this support as we convert four F-
16 air defense units to F-16 general purpose fighter units. In 
addition, this budget converts one F-16 squadron to C-130's, and one F-
16 training unit to F-15's to better serve the needs of the entire 
nation.
The Air National Guard Long Range Plan
    With our telescope on tomorrow, the Air National Guard has 
developed a Long-Range Air National Guard Plan that provides a 
framework within which to implement our strategic vision. It contains 
expectations of our commitment to maintain a ready force capable of 
projecting American military power and providing community support. It 
further outlines our plans to modernize those capabilities to protect 
our Nation's security and community interests well into the next 
century.
Air National Guard Stability
    Fiscal year 1999 is a year of relative stability within the Air 
National Guard. While we have five unit conversions as a result of the 
QDR, our manpower, aircraft, flying hours, and facilities are generally 
consistent with fiscal year 1998. We expect this stability to continue. 
For the Guard, this means that after an extended period of turmoil 
surrounding unit deactivations, personnel drawdowns and other necessary 
changes, our people see light at the end of this tumultuous tunnel. We 
see the Air National Guard of the future. It is lean, well equipped, 
highly motivated, and extremely well trained to accomplish any mission.
               contemporary air national guard operations
    As our Nation continues the transition to meet 21st century 
strategic challenges, the Air National Guard will be involved in even 
more mission areas as our Total Air Force continues to provide the 
aerospace resources which are so much a part of our American advantage.
Readiness
    We are ready to deliver appropriate and sufficient forces whenever 
and wherever called, whether for an international crisis, peacekeeping 
mission, or a hometown emergency. Personnel and training, well-
maintained aircraft and equipment, and financial resources are critical 
to our success. A shortfall in any of these negatively impacts our 
readiness levels. Unique to the reserve components, however, our 
readiness is also a function of family and employer support for our 
largely part-time force. It is a testament to the Air Force's 
commitment to Total Force Policy that the percentage of Air National 
Guard units maintaining the highest two readiness levels is virtually 
identical to the active component.
    Since 1986, the active Air Force has downsized by nearly 40 
percent, while military operations other than war have greatly 
increased. This has necessitated a greater reliance on the reserve 
components, the Guard and Reserve, to relieve the stress of high 
OPSTEMPO/PERSTEMPO. While the Air National Guard and Air Force Reserve 
participated in only 11 contingencies and humanitarian missions between 
1953-1990, we were a part of more than 40 between 1991-1997. The 
frequency and tempo are rising and we need your continued support.
The Total Air Force
    In 1997, the Air National Guard participated in every major 
deployment and contingency tasking, with an average of 5,000 volunteer 
guard men and woman deployed each month. It's important to note that 
this Air National Guard participation was not ``just around the 
edges.'' We were in the thick of things side by side with the Air 
Force. For example, the first bombs dropped in Bosnia were dropped by a 
Maryland Air National Guard A-10 unit deployed to the theater. Equally 
noteworthy, the second bombs dropped were by a Massachusetts Air 
National Guard unit. These are people who only weeks earlier were 
performing their civilian jobs, but were now proudly serving the Nation 
through the application of air power.
    Our successful integration into the total force is derived from 
three key factors: the recognition of our capabilities by Air Force 
commanders, a commitment to participate as a full partner in the Air 
Force budgeting process, and staff integration.
    The National Defense Panel observed that the Guard would play an 
increasing role in a variety of worldwide operations. Today, more than 
ever, the Air Force relies on the Total Force, Active Duty, Air 
National Guard and Air Force Reserve working together to meet all 
commitments. Combatant commanders long ago ceased to ask whether Air 
Force units deployed to their theaters were active duty, Guard or 
Reserve. Warfighting commanders rightfully expect any unit from our 
Total Force to provide needed capabilities.
    The Air National Guard is also a full partner in the Air Force 
corporate budget process. We are involved in every stage of the 
planning, programming and budgeting cycle, and have membership with the 
active duty Air Force and Air Force Reserve on each programming panel, 
the Air Force Group, Air Force Board and Air Force Council. The Air 
Force continues to fund our OPSTEMPO/PERSTEMPO, training, 
infrastructure and personnel at levels comparable to the active duty 
force. Likewise, they provide the source of our modernization, which is 
based on the needs and requirements of our gaining Major Commands 
(MAJCOM's). We greatly appreciate the support Congress has shown to the 
Air National Guard in the past, enabling us to enhance our capabilities 
beyond what would have been possible under existing budget constraints.
    Our current staff integration initiative will strengthen an already 
superb working relationship with the active Air Force. By the end of 
fiscal year 1999 we will assign additional Air Guard personnel to 
unified and operating commands. We already have Guard members in place 
at Air Combat Command, Air Mobility Command, most other MAJCOM's and in 
several directorates on the Air Staff. The results have been 
tremendous. The Air Force is also committed to place active duty 
personnel at the National Guard Bureau and field units. We now have 
people where the decisions on force structure, equipment, and force 
employment are made and they ensure Guard capabilities are recognized 
and used. Likewise, active duty members serving with the Guard become 
proponents of the Total Force approach.
                     air national guard operations
    The Air National Guard's budget of $4.5 billion represents real 
added value for this country. While it totals just 7.1 percent of the 
Air Force budget and 1.6 percent of DOD's, as the chart below shows, it 
provides a significant portion of the Air Force's military capability 
of the total force.

                                                                 Percent

Air Sovereignty...................................................   100
Fighters..........................................................    34
Theater Airlift...................................................    46
Tankers...........................................................    45
Bombers...........................................................    12
Combat Rescue.....................................................    30
Strategic Airlift.................................................    16

    In support of this capability, Air National Guard aircrews serve an 
average of 110 days per year. As I mentioned earlier, an average of 
5,000 Guard members were deployed each month during fiscal year 1997 to 
support exercises, contingencies, and military operations around the 
world. Air National Guard members deploy on a rotational basis, helping 
to reduce active duty PERSTEMPO while accommodating their civilian 
employment. We have been very successful in meeting our deployment 
commitments with volunteerism by rotating members. An example is our 
fighter community. The first group to deploy takes aircraft, then 
members, perhaps from other units, replace the aircrews and maintenance 
personnel while aircraft remain throughout the deployment. This process 
of replacing crews continues for the duration of the deployment, 
permitting full support to the Air Force mission, while keeping the 
individual TDY rate to an acceptable level.
    In many cases, the Guard and Reserve work together to provide 
extended support to the active force. An example of a joint Guard and 
Reserve mission was the 24 July to 25 October 1997 deployment to 
perform sustainment airlift from Ramstein Air Base, Germany, to the 
forces in the Balkans. Other major operations in 1997 included: the 
deployment of security forces to Saudi Arabia; the deployment of civil 
engineers, firefighters, and air traffic controllers to Taszar, 
Hungary, as part of Operation Joint Guard; the use of KC-135's to 
refuel fighter aircraft enforcing the no-fly zone over Bosnia; and the 
use of F-15's and F-16's to enforce the no-fly zone over Northern Iraq, 
as well as the use of rescue crews to provide combat rescue support for 
those forces.
    In 1997, the Air National Guard flew over 3,200 readiness support 
airlift missions, 700 airborne transport missions, 500 fighter 
deployment air refueling missions, and performed a variety of other 
challenging operations. For example, in October 1997, three 153rd 
Airlift Wing C-130 aircraft, crews, and support personnel from the 
Wyoming Air National Guard deployed to Jakarta, Indonesia, to help 
fight devastating forest fires. The crews flew hundreds of hours during 
their 60-day deployment using their specially equipped C-130's to help 
suppress fires over 3.5 million acres. During their deployment, the 
153rd extinguished more than 70 fires in open forest areas in the face 
of incredible challenges posed by heavy smoke and extremely dry 
conditions. This support allowed the Government of Indonesia sufficient 
time to develop an effective fire fighting plan of its own and organize 
follow-on indigenous and commercial support to battle remaining fires.
    As part of the overall restructuring of the Air Force, the Air 
National Guard has expanded its operational capability to include heavy 
bomber operations. The 184th Bomb Wing at McConnell AFB, KS was the 
first Air National Guard unit to become fully mission capable in the B-
1 bomber and the 116th Bomb Wing at Robins AFB, GA also soon will 
achieve mission capable status. These two Air National Guard units 
represent approximately 30 percent of the total B-1 capability. The Air 
National Guard has demonstrated its capability in all aspects of the B-
1 mission, to include long-range Global Power missions to various 
overseas locations. We are now examining ways to include these units 
and assets into the Air Expeditionary Force.
Space Operations
    Air National Guard involvement in the space operations mission 
began in January of 1996, when we activated the Air National Guard's 
first space operations unit, the 137th Space Warning Squadron, in 
Greeley, CO. Our participation in other space mission areas has also 
continued to progress. The 236th Combat Communications Squadron in 
Hammond, LA has continued its outstanding support of the Space Warfare 
Center and the Air Force Space Support Teams.
    Our success within the space operations world has evolved quickly 
and continues to expand. As a result, the National Guard Bureau has 
extended its reach to Space Command by establishing a Space Transition 
Team at Buckley Air National Guard Base, CO. Its purpose is to act as 
an agent of the National Guard Bureau for mission transitions and 
identification of potential Air National Guard roles in space 
operations. The Guard's unique ability to recruit and retain quality 
personnel with specific capabilities and skills has not gone unnoticed. 
This capability is a hallmark for the future; where the Air National 
Guard will be a key supplier of skills and capabilities not normally 
found within the active duty Air Force.
Homeland Defense
    Our homeland defense is a vital mission for the Air National Guard. 
A nation's right to exercise absolute control and authority over its 
national airspace above its territory, international waters, and 
territorial seas, better known as ``Air Sovereignty,'' is an enduring 
mission. In January 1994, 1st Air Force was placed under the command of 
an Air National Guard General Officer, Major General Philip G. Killey; 
a first. This transition of the Air Defense command and control 
organization to the Air National Guard strengthens the Air Defense 
role. While the QDR reroles four air defense units in fiscal year 1999 
to general-purpose fighters, our commitment to this mission remains 
solid.
    In the future, the Air National Guard is destined to play an even 
greater role in our nation's defense against threats within our 
national borders, such as domestic terrorism, weapons of mass 
destruction and the counter-drug program. In many cases, the most 
effective counter to domestic threats is a community-based network of 
concerned citizens willing to become involved. This captures the very 
essence of the Air National Guard and as we acquire and integrate 
evolving technologies, we will exploit these technologies in support of 
the domestic mission. The Air National Guard is uniquely postured to 
pursue this course of action and we will truly make a difference.
                       air national guard family
    The concept of family within the Air National Guard is the essence 
of our ability to achieve our goals and objectives. Our family includes 
our Air Guard members, military and civilian, full-time and 
traditional, their families and dependents, and our employers within 
the communities in which we live and work. Without strong, deep-rooted 
commitment and support from all our families, our ability to execute 
the Air National Guard mission is adversely impacted.
Recruiting and Retaining Quality People
    Despite the tremendous increase in deployments and OPSTEMPO, and in 
some cases because of it, the Air National Guard is having tremendous 
success in attracting and keeping high quality personnel. We finished 
fiscal year 1997 manned at 101.9 percent of our programmed strength, 
with a retention rate of 90 percent, the highest of any reserve 
component. We cannot, however, rest on our laurels. We must continue to 
offer attractive jobs, compensation and enlistment bonuses to ensure we 
preserve our capabilities.
Diversity
    Our Air Guard family membership must reflect the communities it 
serves. With this in mind, no issue is of greater importance to the Air 
National Guard's future than diversity. We must take action now so that 
in the future our organization represents the diversity of the American 
people. We have made great strides and, as we execute the guidance in 
our long-range Air National Guard plan, we will ensure our family 
represents a mosaic of the nation and the communities, in which we live 
and serve.
The Enlisted Force
    My vision for the next four years, as the new Director, is 
stability, along with focus on the Enlisted Force, Families and 
Employer Support. Our enlisted force is the force that sets us apart. 
We all know what they can do and have done over the years. They are a 
group of unsung heroes who deserve acknowledgment of their 
achievements. More importantly, they are an integral part of our 
future. These are the men and women who ensure our equipment is 
maintained in classic Air National Guard condition. These are the men 
and women who will pick up the mantle and learn tomorrow's missions, 
like the space mission. These are the men and women who will develop 
new techniques and methods of efficiency to save the Air Force and our 
Nation's resources. These are the men and women who will enhance our 
communication link to communities across our Nation and ensure that we 
have a vital link to a new generation of personnel to follow in their 
footsteps. They will help us begin to solve our diversity challenge, 
because they will represent a cross section of our communities. Most 
importantly, they will help us create new standards. Lastly, these are 
the men and women who will remain the backbone of our organization.
Families
    Consistent with our commitment to national mobility requirements is 
the necessity for family support programs that will provide nurturing 
and stability for our Air Guard families. Our national, state, and unit 
plans provide reassurance to our members that, in time of need, the Air 
National Guard family will support its own. We have a network of family 
support volunteers in every Guard community across the country. They 
provide a source of support and comfort to those who remain behind.
Employer Support
    It is our Guard employers across America, who enable our citizen 
soldiers and airmen to leave their jobs during the times they serve the 
Nation. It is our employers who keep those jobs secure until they 
return. It is the American employer who helps us provide training for 
our people that make them even better when they undertake their Guard 
jobs. It is our employers across America who are our link to our 
communities. And it is the employers of America, who provide us a broad 
recruiting base from which we can attract diversity. Employers will 
play an increasingly important role in making sure we succeed in the 
21st Century.
Modernization
    Whether responding to contingency operations world-wide, or helping 
communities recover from a natural disaster, the Air National Guard is 
using equipment that has been procured and modernized with funds 
primarily from Air Force procurement accounts, including $300 million 
in fiscal year 1999, and the National Guard and Reserve Equipment 
Account (NGREA). We appreciate the Air Force and congressional support 
of our modernization efforts and have put these funds to good use. A 
near-term readiness enhancement is our modernization focus and we 
stretch every dollar to get the most ``bang for our buck''. We 
specialize in finding timely, low-cost, off-the-shelf solutions to our 
equipment needs--solutions that have the greatest return on investment 
for our warfighters.
    When we talk modernization, we are committed to making sure our 
equipment is completely compatible with our active Air Force 
counterparts and based on a validated requirement. Keeping aircraft and 
equipment modernized is the lifeblood of the Guard. Without it, we will 
never remain ``relevant'' and that is why it has such a high priority.
    Our modernization focus is the Combat Quadrangle--four initiatives 
that satisfy warfighting CINC requirements. These are:
  --The ability to conduct 24 hour combat operations--which we are 
        satisfying with our Night Vision Imaging System (NVIS).
  --Survivability in high threat environments--which we satisfy with a 
        host of electronic combat enhancements. These include the 
        Countermeasure Management System (CMS), the Pylon Integrated 
        Dispenser System (PIDS), and improved radar warning receivers. 
        This also includes Airlift Defense System (ADS) as a 
        prerequisite for participation of HC-130 aircraft's in many 
        contingencies.
  --Enhanced battlefield communications--which we fulfill with our 
        Situational Awareness Data Link System on the F-16 and A-10, 
        and the Fighter Data Link (FDL) on the F-15 aircraft.
  --The ability to conduct precision attack--which we will satisfy with 
        a full and open competition for a low cost; non-developmental 
        self-designated laser system.
    As a foundation to the Combat Quadrangle, training systems are 
required to hone combat skill support in all our programs. Air National 
Guard members are trained and motivated, but without the right 
equipment, we are hampered in our ability to respond.
    In that vein, we intend to procure low-cost targeting pods which 
will provide precision weapons capability to our fighter fleet and 
improve F-16 combat capability. There are also many opportunities to 
take advantage of the electronic battlefield. The A-10 and F-16 
Situation Awareness Data Link (SADL) provides pilots with an all-
weather, low-cost data link using off-the-shelf Enhanced Position 
Location Reporting System radios. It is secure and jam resistant. It 
provides fighter-to-fighter, fighter-to-ground and ground-to-fighter 
data link information transfer. Its purpose is to save soldiers' and 
airmens' lives by preventing fratricide and enhancing situation 
awareness while providing increased combat ID capability. SADL 
capitalizes on the Army and Marine Corps digitized battlefield and have 
growth capability to ensure compatibility with future upgrades.
    The Tactical Airborne Reece System (TARS), will equip the Virginia, 
Michigan, District of Columbia, Indiana, and Iowa Air National Guard 
with a capability for commanders to view the battle scene and make 
accurate warfighting decisions. The South Carolina Air National Guard, 
to be equipped with the HARM Targeting System, will suppress enemy air 
defenses with pinpoint accuracy. The Night Vision Imaging System (NVIS) 
will allow us to take the fight to the enemy around the clock and has 
just achieved Initial Operational Capability (IOC) at the 122FW, Fort 
Wayne, IN.
    The Quadrennial Defense Review has presented us with challenges to 
modernize our F-16A model fleet, currently positioned at five bases. We 
are examining a variety of different options for these aircraft, 
including: a Structural Life Extension Program (SLEP), a Mid-Life 
Update (MLU), or the purchase of new aircraft.
    Modernization of our mobility forces continues as well with major 
avionics upgrades to our 224 KC-135 aircraft. The PACER CRAG (Compass, 
Radar and Global Positioning System) installations began in January at 
the 163rd Air Refueling Wing, March ARB, CA. The installations are a 
total force program: three Air National Guard Contract Field Teams 
(CFT's), one Air Force Reserve Command CFT and the Programmed Depot 
Maintenance line at Tinker will complete installations of the entire 
fleet over the next three years.
    The C-130J is a welcome addition to the Air National Guard airlift 
fleet. We are working closely with Air Mobility Command and Air Force 
Reserve Command to ensure adequate testing, support and training are in 
place as this new capability is fielded.
    Counterdrug forces in eleven states will be improved over the next 
year as new high-reliability 3rd generation Forward Looking Infrared 
Radars (FLIR's) are fielded. We will continue to improve our 
Counterdrug aircraft in response to the needs of federal and state law 
enforcement agencies.
                               conclusion
    We are proud of our expanding role in the defense of our nation. We 
look forward to the next phase and our continued partnership with the 
Total Force. Together the Guard, the Reserve, and the Air Force will 
continue to provide America an unmatched capability to project military 
power anytime, anywhere in the world. This nation will always be a 
militia nation--defenders of freedom. The challenge for us will be to 
address the right mix of the right forces into the 21st century. The 
partnership of the reserve components and the Air Force will continue 
to grow stronger because of our Total Force Policy.
    Thank you again for your support.

    Senator Stevens. Thank you very much, General Weaver. I 
note that behind you is Gen. Russ Drew Davis. General Davis, 
the committee wants to thank you personally for your assistance 
in arranging our trip to Antarctica. We were pleased to fly 
with the National Guardsmen going into and coming out of 
Antarctica, which demonstrates really what the Air Guard is all 
about.
    I want to yield first to my colleagues, because they may 
have problems with schedules. Senator Cochran.
    Senator Cochran. Thank you very much, Mr. Chairman. I do 
not have a problem.
    Senator Stevens. Sometimes people have to go to other 
committees.

                    Operational tempo and retention

    Senator Cochran. I understand. I am glad you are checking. 
The question that I raised in my opening statement is really 
one that concerns me, and that is whether or not you are seeing 
any difficulty developing, recruiting, and in promotion and 
retention of the quality and the numbers of men and women you 
require to maintain the operational tempo and fulfill the 
requirements and missions that are assigned to the National 
Guard. What is the status of that situation, General Baca?
    General Baca. Mr. Chairman, just let me say that last year 
was one of the busiest years we have had in both Army and Air, 
and last year we met our recruiting objectives and we were the 
two top components in meeting our recruiting and retention 
objectives, and I would like to yield to General Navas, who can 
give you a little bit more detail on that, but we have done I 
think exceptionally well under the conditions we have had.

      Army National Guard recruiting and retention versus OPTEMPO

    General Navas. Senator, last year was a banner year for the 
Army National Guard. We finished our year 3,000 soldiers above 
our program end strength of 367,000. We finished about 370,000. 
Not only that, but our attrition, that is, the soldiers we 
lose, was at an all-time low at 18 percent, coming down from 28 
percent back in 1995. We have constantly improved our quality 
of the Guard, overall quality, not only of initial entry, and 
we are striving to even improve that, especially in the 
category 3B, so we have had a great year.
    This year our end strength has been reduced by 5,000 as 
part of the QDR cuts, and we are starting that ramp down from 
almost 370,000 at the beginning of the fiscal year to an end 
strength 362,000, and so we are establishing that ramp down and 
yet we are maintaining our quality goals, and also our 
attrition rate has been very good.
    Actually, our retention rate is at 88 percent for new 
individuals, and 119 percent of our careerists, so I would say 
the problem is the other way, is basically trying to renew the 
force, if you will, so I feel very comfortable with the 
recruiting and retention we have had.
    However, as you look to the future with the level of 
funding that we have, and with the lack of adequate funding to 
send those individuals to school as I mentioned in my opening 
comments, we are having NCO's, noncommissioned officers, make a 
very, very tough choice. Do they go out there and train or lead 
their soldiers during the periods of collective training, or do 
they need to be away from that training to attend their own 
personal training?
    We are asking these very dedicated Americans to make a very 
tough choice, be with their soldiers and do their leadership 
responsibilities, or go out there and do what could be seen as 
a selfish thing, to go and go to school to be promoted, and the 
reason we do that is because we do not have in our low-priority 
units enough dollars to do both.

                      status of Air National Guard

    Senator Cochran. What is the situation in the Air Guard, 
General Weaver?
    General Weaver. Sir, if I may brag for a moment, we are the 
busiest Reserve component of all the Reserve components. Per 
capita we have the best retention rate, at 90 percent. We have 
never been busier. We are deployed everywhere the Air Force is 
deployed. The morale, the retention rate has never been higher. 
In fact, in some of our busier units the retention rate is the 
highest. It is hard to explain at times.
    When General Fogelman, the previous Chief of Staff of the 
Air Force, briefed that he did not want his people away from 
home more than 120 days a year, our air crew members averaged 
between 80 and 110 days away from home a year with their 
deployments and other requirements in the Air National Guard, 
and if you tack on their civilian jobs, some of our airline 
pilots are upwards of 240 to 270 days away from home a year.
    I heard it expressed, and my concern for the future is from 
one of our air crew members. He said, when I have got my wife 
mad at me and I have got my employer mad at me, and when I have 
got the Guard mad at me equally, then I know I have got it 
well-balanced.
    I am concerned for the future. We are asking our 
individuals to do a lot. They are always standing up to the 
challenge, as evidenced by this latest buildup in Southwest 
Asia. My first phone call was from General Cross on a Monday 
morning, during the intense buildup. When he was expecting 
about 25 percent from the Air Force Reserve and the Air 
National Guard to supply airlift and tanker support, 
overwhelmed him with about 54 percent of the requirements he 
had both from the Air Force Reserve and the Air National Guard, 
truly a testimony of our men and women in our Reserve 
component.
    We are over end strength right now by about 1,000. I really 
expect to maintain that. No one wants to leave the Air National 
Guard, and we are happy for that, but I do have concerns about 
our OPTEMPO for the future, as does the Air Force and the Air 
Force Reserve.

                            Pilot retention

    Senator Cochran. When we had the Chiefs before us the other 
day one of the concerns expressed was the shortage of pilots 
and the fact that we are seeing a lot of pilots move out of the 
military into civilian jobs because of the great demand and the 
growth in that area. Is this reflected at all in the Air Guard?
    General Weaver. We are recruiting every available pilot off 
of active duty. If you take a C-5 aircraft commander, you and I 
as American taxpayers pay about $9 million to get him upgraded 
to aircraft commander. If he leaves the Air Force to go to the 
airlines, we want his next call either to be the Guard or 
Reserve.
    The problem is, what we are seeing is that they are coming 
in the Guard and Reserve, but then, all of a sudden, they are 
seeing the same type of OPTEMPO that is reflective of some of 
the reasons why they got off, for quality of life issues off 
the active duty Air Force. We have concerns along those areas 
as well.
    We brought in as many pilots as we possibly could. We still 
have a backlog of potential candidates to come in the Guard, 
but that line is starting to shrink a little bit because as 
they are getting off active duty they are also realizing that 
the total force, the Guard and Reserve, is part of that OPTEMPO 
as well.

                      Army National Guard funding

    Senator Cochran. We heard your comments about negotiating 
in the Office of Secretary of Defense over the $700 million 
shortfall, more or less. In your minimum requirements you were 
able to restore over $100 million through those negotiations, 
and obviously those needs were quite clear to everyone 
concerned, or you would not have been able to do that.
    But what happens to that other $600 million, and what 
impact does that have in real practical terms about what you 
are going to have to cut? Can you tell us some of the things 
that are going to fall by the wayside without those funds?

                  Army National Guard shortfall status

    General Navas. Yes, sir; our initial shortfall--and this, 
like I said, was very positive. General Reimer asked me around 
November, said I want to help you. What is your shortfall? I 
submitted a letter saying that we needed $813 million to be 
able to meet our minimum training requirements to meet defense 
planning guidance. We worked this issue and we were able to get 
$179 million added up, so there is still a shortfall of $634 
million.
    That shortfall is basically $156.2 million in schools and 
special training. This is sending individuals to school to be 
able to meet their professional qualifications.
    In the case of the Army National Guard we established a 
policy of select, train, and promote, so that we could make our 
promotions in the enlisted grades based on the qualified 
individuals, so now when we select an individual he needs to be 
trained before he can be promoted. Sometimes we have to defer 
that training because we do not have the dollars to send that 
individual.

                      Schools and special training

    Senator Stevens. General, can I interrupt you? As I 
understand, you have only 50 percent of the amount you need to 
continue your present school levels. That is not a shortfall. 
That is a catastrophe.

                           Funding shortfall

    General Navas. Sir, we are funded at 39 percent, and if you 
understand that within that 39 percent we have to give priority 
to those units that are in a higher-priority rating. It is not 
spread evenly across the force.
    So that is what I meant in my opening statement that we are 
sending individuals to school in lieu of obtaining or attending 
annual training with their units, so when we are doing the 
collective training we do not have what we call enough boots in 
the ground there to be able to do a meaningful collective 
training, and so we have a major shortfall in that regard.
    Then there is basically a $10 million shortfall for our 
AGR's, our Active Guard and Reserve. That would mean that 
either we take money from the already underfunded schools and 
special training account to retain the AGR, or we will have to 
let go about 160 soldiers, full-time soldiers from our ranks, 
which are the ones that basically plan, organize, train, and 
coordinate our training, so that is basically the bulk of the 
personnel account in the area of operations and maintenance. 
That is about a $450 million shortfall, which is basically in 
the surface operational tempo.
    Operational tempo, as you know, is the dollars we get to 
train our units, and again, this is tiered. To meet our DPG, 
defense planning guidance requirements, not even title XI 
requirements at platoon level training, but to do an individual 
crew and squad, we need about 200 OPTEMPO miles. Our lower 
priority units are funded at about 12, 13, 14 percent of that 
requirement. We have units that get about 22 miles to do that 
training, so, therefore, there is very little collective 
training that these units can do.

                  Real property and depot maintenance

    Also, we have about a $98 million shortfall in our real 
property maintenance. Last year the congressional markup was 
very generous with us, and we got about an $87 million, $89 
million to increase our real property maintenance, which is 
crucial to maintain the condition of our facilities where we do 
our maintenance, where we do our training. It is a quality of 
life issue also.
    And then there is the ``Depot maintenance'' account that is 
underfunded about $94 million. Without that ``Depot 
maintenance'' account our equipment is getting to the point 
where it is not being adequately sustained and maintained. 
Should we need to bring those units rapidly up, then we are 
going to have a problem in that.

                  Distance learning and communications

    Our distance learning and our communications accounts are 
underfunded by about $73 million. That means that we might not 
be able to do our full support to the RCAS program to be able 
to continue funding it. Our distance learning initiative is 
going to be slipping.
    You are aware that we established a goal that we are, 
hopefully, on track with the support of the Congress of having 
a distance learning classroom within 60 minutes of driving 
distance of every Guardsman, and we are working toward that 
goal.
    That was supposed to be completed by the end of 1999. We 
had said by the end of the century. We are on our way with a 
shortfall of $3 million. We might have a delay on that, and 
that is crucial to be able to--that is an investment in the 
future, because if we do not have money to send individuals to 
school, what we try to do is take the school to the 
individuals, so we can save the travel time, we can save the 
time away from home, we could help alleviate the PERSTEMPO, so 
this is an investment in the future that we need to make, and 
we need to find a way to sustain this program.
    So that is basically where in a macro sense the $634 
million, that is where we are short, and I would be more than 
glad to submit for the record a much more detailed version of 
those numbers.
    Senator Cochran. That would be very helpful. We appreciate 
that.
    [The information follows:]

         Details of the $634 Million Shortfall in ARNG Programs

    Schools are currently funded to $81 million, which 
represents a 39 percent funding level of the Army validated 
requirements. Funds are aimed at preparing members of early 
deploying units with requisite skills to meet the rigorous 
deployment timeline demanded by the increased reliance on the 
Army National Guard. Funding for schools is tiered toward the 
``First to Fight'' units. There are not sufficient funds to 
maintain Military Occupational Specialty Qualification for the 
entire force. The requested $90 million increase to the schools 
funding will allow Force Support Package, enhanced Separate 
Brigades, and Early Deploying units to send 100 percent of 
required personnel to Professional Development and Military 
Occupational Specialty Qualification training. The remaining 
tiered units will be able to send 50 percent of required 
personnel to this training. This program is essential to the 
retention of quality personnel.
    Special Training is currently funded to $28 million, which 
represents an 11 percent funding level of the Army validated 
requirements. The requested increase of $66 million will fully 
fund enhanced Separate Brigades, Opposing Forces support for 
Lanes Training, Combat Training Centers training, and Joint 
Chief of Staff exercises. It will fund 84 percent of 
operational readiness sustainment requirements such as 
planning, support of training exercises, preparations for 
operational missions, and Readiness for Mobilization Exercises. 
This program is critical to providing forces trained to perform 
their assigned wartime missions.
    Bonuses are currently funded to $127 million, an 88 percent 
funding level of the Army validated requirements. With an 
addition of $18 million, the program will be funded to 100 
percent of requirements. This program covers the Health 
Professional Bonuses, the Montgomery GI Bill, the Enlisted 
Recruiting Bonus, the Student Loan Repayment Program, and 
Separation Pay. The increased funding for this program is 
essential to maintain End Strength and meeting the Chief of 
Staff, Army's quality goals.

              representing the needs of the National Guard

    General Baca. Senator, General Reimer in his testimony 
before the National Security Committee did recognize that as an 
underfunding for the National Guard and did list it as one of 
his top priorities.
    Senator Stevens. General, what the two of you just said, 
particularly what General Navas has said--and are you finished?
    Senator Cochran. Yes, sir.
    Senator Stevens. I apologize for interrupting you, but it 
demonstrates a different relationship between the Army Guard 
and the Air Guard in terms of the total Pentagon structure, and 
it is something I have been trying to address. It is nice to 
know you were able to submit a letter to try to address this 
imbalance, but General Weaver sits at the board when the 
allocations are made, and this just cannot continue.
    We are now operating under caps, gentlemen. We are in a 
situation where if we try to raise anything that is in the 
budget it is automatically looked at as pork by one-half of our 
people and attacked in the press by people who do not 
understand the situation that these budgets are underfunded to 
start with, and I do not think we have had the leeway we have 
had in the past to correct your situation and the fact that the 
Army Guard budget comes in so underfunded creates the largest 
problem for this committee in the whole year, and somehow or 
another it has to change.
    We have to find a way so General Navas and his successor is 
sitting there at that allocation board and that budget fairly 
represents the needs of the Guard Bureau as it assumes greater 
and greater responsibilities, and those are falling now equally 
heavy on the Army Guard as they have traditionally on the Air 
Guard, but the Air Guard, because of its relationship, has a 
much different situation coming before us.
    I will have some other questions to ask you later, but it 
just--it really bothers me now, when we are operating under 
these caps and we have limits in terms of this, and we are 
going into the budget.
    We are at $3.7 billion in outlays less because of the 
Congressional Budget Office [CBO] analysis than the Office of 
Management and Budget thought we had. You put that in terms of 
actual authorization fulfillment and appropriations for the 
authorization base, and it is a substantial reduction, and that 
is across the board, but basically it has fallen on you.
    It has fallen on the Army Guard, which I think is very 
unfortunate, and it really represents an antagonism toward the 
Guard that is not warranted under the current circumstances of 
our requirements worldwide.
    General Navas. Sir, may I make a statement?
    Senator Stevens. I am going to call on my friend here. I 
will get back to you later. Senator

               Army National Guard aviation modernization

    Senator Leahy. I am glad to have General Baca and General 
Navas and General Weaver here.
    I would say to General Baca, you have led the Guard during 
a period in our history where I think it has demonstrated very 
much the importance of the Guard in our Nation's defense. I 
think that trend is going to continue. Obviously, the concerns 
I have, and Senator Stevens and Senator Cochran and the others 
have is just whether the resources are there.
    I understand the Active Army and the Army Guard 
acknowledged a shortfall of 90 Blackhawk helicopters in Guard 
warfighting units. This committee has strongly supported the 
Blackhawk program, and I am pleased the administration and the 
Army no longer plan to terminate the Blackhawk. What kinds of 
units are affected by this shortfall? For example, would there 
be a cost savings associated with the procurement of 10 
additional aircraft?

                     Blackhawk helicopter shortfall

    General Navas. Sir, I think we have turned the corner on 
the modernization of the Army National Guard aviation fleet. If 
you recall, we had a shortfall of, if we were going to replace 
the aging UH-1 fleet in the Army National Guard, which is 
basically our light utility helicopter, there was not light 
utility helicopter substitutes, so basically the plan would 
have been to substitute all of those Hueys with Blackhawks. 
That would have created a tremendous shortfall on the order of 
400 and some Blackhawks.
    What we have done, working with the Army in an Army 
aviation modernization plan is to establish a requirement for 
90 Blackhawks over the next years, of which 50 of them are in 
the POM, and we still have 40 of them that we need to work and 
see how we can get that as we build the programs. This would 
allow us to modernize our priority units, mostly our air 
ambulance units, with the required Blackhawks.
    Also, we have, working with the Army, looked at ways to 
alleviate the light utility helicopter shortfall by cascading 
equipment, by looking at perhaps some other alternatives, by 
transferring missions from the Active Army to the Guard, and 
this is a work in progress that we have, but at least we see an 
initial plan to recognize and procure over about 90 Blackhawks 
over the next 5 years which would basically go a big way into 
modernizing an otherwise aging fleet.

                              F-16 upgrade

    Senator Leahy. Thank you.
    General Weaver, at the risk of sounding parochial, 
something that never happens in the Appropriations Committee 
but I will break with tradition, it was announced that 
Vermont's F-16 unit, the 158th Fighter Wing in Burlington, is 
going to change its mission from air defense to general 
support. Is the Guard going to upgrade these jets so they can 
deliver precision weapons? Are they going to have to be 
upgraded?
    General Weaver. Yes, sir; again, thanks to this great 
committee in the past, what we have been able to do through the 
Guard and Reserve ``Equipment'' account is to take an entire 
missile design system [MDS], or the F-16 fleet, and put the 
ability on those aircraft to do what the warfighting CINC's 
actually need, precision-guided munitions and what-not.
    We still have a way to go with all of our F-16 fleet, but 
we are in the throes of putting a precision strike capability 
on our F-16's, the data linkup requirements from the F-15's, 
the F-16's, and the A-10's, night vision capability, so it is 
great to have the air machine, but unless it is the air machine 
that the CINC's really need to be able to fight with, it is 
going to be tough in the future to be a participant in the 
total force.
    But again, thanks to this committee, in the past we have 
been able to modernize those F-16's and look forward; to be 
able to do that.
    Senator Leahy. If you could have your office keep me posted 
on how it is going on that particular unit in Vermont, I would 
appreciate it.
    General Weaver. Yes, sir.

                          Civilian technicians

    Senator Leahy. My last question, General Navas, I saw the 
Army Guard is reducing the number of civilian technicians in 
Vermont by something like 20 percent. I wonder, are these cut 
because of the ``Quadrennial Defense Review'' [QDR], and are 
there similar cuts in other States?
    General Navas. Sir, as you know, the Congress established a 
floor of 25,500 military technicians. We had some force cuts 
taken in the Army back, not as part of the quadrennial review, 
but prior to that, based on the 1993 off-site. Those cuts to 
the technicians were appropriated because when you take the 
structure down you take civilians.
    There was an action by the Department of Defense that took 
down--took civilian cuts and applied them to the technicians, 
so that was kind of a double whammy, because not only you took 
the cuts proportional to the force structure, but then it came 
down to also another cut, so that left us with a shortfall of 
about 811 technicians from that ceiling.
    Now we have in the way--and this is an accounting issue. 
The way the civilian pay is accounted for, or programmed, there 
is a time lag, and due to the fact that we have so many diverse 
zip codes where you have the locality pay adjusted, and also 
because of the nature of our civilian force, that we have a lot 
of wage grades, there is a shortfall of $68 million that we do 
not have available to pay for our technicians. Since we manage 
technicians to the budget, the number of technicians that we 
can field out there would be reduced by that amount.
    Senator Leahy. I understand the reason for it. I just 
wanted to make sure that we are not facing a disproportionate 
number of cuts in our State and I am thinking of the percentage 
of our force reduction, but it appeared to me--without knowing 
the numbers from the other States it appeared to me as though 
we were getting a disproportionate cut in Vermont.

                      Military technicians budget

    General Navas. Sir, we are trying to manage technicians to 
budget, and also we are also giving priority to the high 
priority units, and this is precisely--and again, I do not want 
to sound like a broken record, but when you tiered your 
resources and then you have to allow for States that have high 
priority units at the low priority units, you barely are able 
to meet the minimum requirement of 50 percent. In some cases we 
are going to 34 and 32 percent fill, and I think that happens 
in some States where they do not have the higher number of high 
priority units, so that is how we allocate the technician cut.
    Senator Leahy. Thank you.
    Thank you, Mr. Chairman. I have to go to a Judiciary 
Committee hearing, but I appreciate the opportunity to be here.
    Senator Stevens. Thank you for coming.
    Senator Dorgan.

                            Happy Hooligans

    Senator Dorgan. Mr. Chairman, thank you very much. I 
appreciated the testimony. Let me address a question to General 
Weaver, if I might. General Weaver is familiar with the Happy 
Hooligans in Fargo.
    General Weaver. Yes, sir, very well.
    Senator Dorgan. It might be interesting to note for the 
committee and the chairman that the Happy Hooligans are farmers 
and pharmacists and barbers and plumbers and teachers, and they 
have won two occasions, including one recent occasion, the 
William Tell Award, which is the award given to the best 
fighter pilots in the world.
    So it is, on at least one recent occasion, National Guard 
pilots, flying the wrong airplane, because the William Tell 
competition was expected to have been won by, I believe, the F-
15, a bunch of farmers and teachers and others from Fargo, ND, 
won the trophy for the best fighter pilots in the world, and 
that is some distinction for a National Guard unit.
    General Weaver. I could not say it better myself, sir.
    Senator Dorgan. Well, I will say it again, then. 
[Laughter.]
    General Weaver. That picture of the Happy Hooligans is also 
in our front office, sir.

                              F-16 upgrade

    Senator Dorgan. We are enormously proud of them.
    Let me ask you a question about the airplanes they fly, and 
this is a good segue to do that. They fly F-16A's at this 
point, and I am wondering what the plans are to go to F-16C's 
at some point.
    General Weaver. Sir, as we went through the QDR, and when I 
say we, please understand that is total force, Air Force, Guard 
and Reserve, the Air Force was intent on modernizing our A 
models and they saw an opportunity to be able to do that by 
reducing force structure on the active side, taking C models 
off of active duty and putting them directly into our Guard 
units where we have the A models.
    Because of a problem later that seemed to be too difficult 
to do at the time without having further conversations 
concerning BRAC and what-not, it was deemed too difficult to do 
at the time. The Air Force, the Air National Guard, and the Air 
Force Reserve are still looking to possibly doing that in the 
future, but we do have concerns about the upgrades in the 
future of our A models, as I said earlier, to make them 
available for the CINC's, the warfighting CINC's with the 
precision-guided munitions and all the things we need to go on 
our fighters for the war fight.
    I would look at the future, the different options that we 
have got to do that, either SLEP-ing the surface life extension 
program, the cost-effective one, but it does not really give us 
a lot of capability, mid-life one that we are looking at as far 
as putting a lot more money, or possibly purchase of new ones 
in the future, or if we are able to, as we look, as we still 
downsize the Air Force possibly in future years, to take some 
of that force structure off of active duty and as they have 
done in the past to modernize our force structure in the Guard 
and Reserve.
    Senator Dorgan. Let me ask you a question, and I am meeting 
later with General Ryan later today, and I will not tell him 
what you said, but I am curious, we are enormously proud. Why 
would a National Guard team win the William Tell award under 
any circumstances? Wouldn't you expect them never to win?
    General Weaver. Well, it was interesting, and it was also 
during--I tell a story. It was during BRAC at the time, the 
last BRAC round, and I sat on the Base Closure Executive Group 
for the U.S. Air Force, representing the Air National Guard, 
and during that week, as the results were being given, they had 
the Happy Hooligans and our individuals from Vermont really at 
the low end, and no one really took them seriously, and during 
the week it was reported every day what the results were, and 
during the week they were slowly coming up through the ranks as 
the contest went on, and as you know, that weekend all the 
results were known, and the Happy Hooligans were No. 1 and 
right behind them were our Green Mountain Boys from Vermont, 
but it was not announced Monday at that staff meeting about who 
really won that contest with those much older airplanes and the 
much older fighter pilots, but it served us well during the 
Base Closure Executive Group.
    Senator Dorgan. That is good to know, and it says a lot 
about the quality of the people flying those planes and the 
crews that maintain them.

                            Disaster relief

    Let me, Mr. Chairman, just finally say to Generals Navas 
and Baca that you know that North Dakota suffered this enormous 
disaster last year, the worst flood in 500 years and seven 
blizzards, the worst in 50 years, 3 years' worth of snow in 3 
months.
    It was a pretty significant disaster, and we received 
enormous help from the men and women of the Guard, and we could 
not have pulled through what we pulled through in North Dakota 
without the help that the Guard provided, and the men and women 
of the Guard risked their lives to save other lives and we are 
enormously grateful for what your men and women did in North 
Dakota, and most of them, of course, are our friends and 
neighbors.
    General Baca. Thank you, Senator. I am sure you can be 
justifiably proud of your Guardsmen, and I tell you, I get the 
same reports literally from States all over the Nation from 
their Governors and from their elected representatives, and the 
Guard traditionally for 361 years has done that mission, and we 
are very proud of the way we do it.
    Senator Dorgan. Mr. Chairman, thank you for calling this 
hearing, and I have a Commerce Committee hearing going on as 
well, but I appreciate very much your calling this.

                           F-16 modernization

    Senator Stevens. Thank you very much. We appreciate your 
coming, Senator.
    General Baca, let me just put it this way. As I look at 
this budget, based upon 1998 levels alone the Army Guard has 
$184 million that it is short on personnel, $450 million short 
on O&M, $200 million short on procurement and $160 million 
short on Milcon, a total of $994 million shortfall for the 
Army.
    And in the Air Guard we see $160 million shortfall in 
Milcon, $260 million shortfall in procurement, particularly in 
the C-130J's, and $150 million short in other equipment, a 
total of $570 million. Now, that is just off the 1998 level. 
That would not allow for any increase, and all the problems you 
face in worldwide deployments. We are at least $1\1/2\ billion 
short out of a total of some $10 billion.
    You have about $10\1/2\ billion, and you are about $1\1/2\ 
billion short of the 1998 level alone. That, with the budget we 
have presents us with a tremendous difficulty to just keep up 
the pace we established last year. So I want to ask you some 
basic questions about that.
    Let me ask General Weaver first, if I may, what is your 
highest priority in replacing your equipment, the F-16A's or 
the C-130J's?
    General Weaver. It is the modernization of our F-16's over 
all, sir, to give them the precision guided munitions we really 
need to do. If I am looking to get to the war fight I need our 
fighters to be able to have all of the right things that the 
CINC's need. That is the night vision stuff, the precision-
guided munitions, in order to be able to be a part of the 
fight.
    The C-130J's have been really great as far as the 
modernization of our C-130's and our older ones, and I have to 
give the credit to the Air Force for this year, under General 
Ryan's guidance with General Cross, in taking the C-130 
community and putting a program together for the future with 
all of the C-130's and what we need to do, and it is a total 
force plan.
    But the important part of the war fight, getting to the war 
fight, is our precision-guided requirements for our F-16's and 
F-15's as well, sir.

                         Pacific rim operations

    Senator Stevens. General Navas, General Lestenkof is going 
to be here later, but we are working now in the Pacific rim to 
give our Guard, the Alaska Guard a greater role in contingency 
requirements in the whole Pacific. The level of search and 
rescue is down, the level of deployment is down, and there is a 
requirement now for a greater role of the Alaskan Guard to 
fulfill some of those gaps. Is there support in the Guard 
leadership for this expanded role of the Alaska Guard in the 
Pacific?

          Alaska National Guard's expanded role in the Pacific

    General Navas. Yes, sir, definitely. We have been working 
very hard over the last 1\1/2\, 2 years, with General Lestenkof 
in looking at like we are doing, in fact, with most of our 
Guard structure to try to look for a mission for the units so 
that then once the unit is missioned, then we can apply 
resources to that unit.
    We have been looking at converting some of the structure in 
Alaska to some more relevant structure like aviation. We have a 
plan there to put more aviation structure in Alaska. We have 
started with Blackhawks.
    Senator Stevens. Let me ask you about that, if I may. We 
have planned to try to get additional UH-60 Blackhawks into the 
Alaska Guard, and we have also got a request for cold weather 
equipment to upgrade the existing helicopters. Which has the 
highest priority, in your opinion?

   prioritization of UH-60 helicopters versus cold weather equipment

    General Navas. Sir, I think we need both. I think we need 
to modernize the aircraft, and I think we need to make sure 
that that aircraft that we put in those conditions can operate 
in those conditions, and so I think that we have--it is both. 
We need to do both, and I think the goal is to wind up with 24 
Blackhawks there. I think--and I hope my memory does not betray 
me. I can provide the information for the record, but I think 
we are well on our way.
    We have 21 out of the 24 needed, and basically we had $9.5 
million in the 1997 budget to equip those aircraft with the 
cold weather gear, and so I think we are on track with what we 
have been trying to accomplish in Alaska.
    Senator Stevens. You do not need any additional money to do 
that?

    additional funding for helicopters for the Alaska National Guard

    General Navas. Sir, I would have to check with Alaska and 
see if this $9.5 million in 1997 is what is required, or if 
there would be anything more. I do not have that information 
right now, sir. I can get it for you.
    Senator Stevens. Thank you very much.

                           state of Readiness

    Now, General Baca, you are leaving us, and as I said, we 
are sad to see that, but tell me now, as you prepare to wind 
down your tour, what do you think about the state of readiness 
of the Guard?
    General Baca. Senator, I will tell you, based on the 
resources we have received, the readiness of the Guard is 
outstanding, but as you know, readiness is a matter of 
resources, and as our resources have been dwindling, as they 
have been going down, particularly on the Army side you see the 
contrast between the Air and the Army, where all the Air 
National Guard units are resourced to be at C2 level or better.
    And where you are lacking the resources in the Guard, it is 
amazing to me as I go out and travel around the world, and 
travel in the States, at the high level of readiness that the 
Army National Guard has been able to maintain, in spite of its 
lack of resources.
    But I am afraid and I am concerned, Senator, and that is 
why I would see the $634 million as our top priority. I am 
concerned that as our resources continue to dwindle, that we 
will not be able to maintain that high state of readiness that 
we have been able to maintain, and for all the reasons that 
General Navas articulated.
    And also to point out to you, Senator, that as I go out to 
these units, it is the lower priority units, the ones that are 
not being funded, that are performing most of the missions out 
there, many of the divisional units. I just came from Croatia, 
and I witnessed Charlie 3 of the 116th, a unit out of the 
Virginia National Guard, out of one of our divisions performing 
magnificently.
    But I am concerned, Senator, that if we do not address that 
shortfall, that we will not be able to maintain those high 
states of readiness.
    As I go around and I see the professional guardsmen out 
there, and they are doing a tremendous job, if you do not have 
the money to send them to schools, if you do not have the money 
to get them qualified, if you do not have the money to be able 
to have them participate in collective unit training, our 
guardsmen are going to begin to vote with their feet. They are 
going to begin to walk, and we are going to lose those high 
recruiting and retention rates that we have today, sir.

                             Pilot turnover

    Senator Stevens. Well, that leads me to you, General 
Weaver. I was disturbed with what you said. If you have people 
waiting on the list that are coming out of the regular Air 
Force--and we have more coming out. We were told the other day 
that over two-thirds are not reenlisting in the Air Force, the 
pilots.
    General Weaver. Yes, sir.
    Senator Stevens. And many of them are going to want to 
continue to have some contact with high performance aircraft. 
That means you. We have empty billets in the Air Force, but you 
do not have enough billets for them in the Air National Guard.
    General Weaver. Right now I have got about a 400-pilot 
shortfall, but that is just a normal turnover out of our total 
3,500 pilots authorized.
    Senator Stevens. But General, respectfully now, it is not a 
normal turnover. The normal reenlistment rate would be in the 
seventies, and it is down to 29 percent last quarter. It is not 
a normal turnover, and we would like to find some way to track 
those guys.
    General Weaver. I meant normal turnover for us, not for the 
Air Force. I am sorry. I misspoke.
    Senator Stevens. What are we going to do to expand those 
spots so that you can put these people back where they want to 
be and keep them ready?
    General Weaver. We are exploring with the Air Force, in 
fact, every possibility of obtaining every air crew member 
getting off of active duty, for whatever reason, bringing him 
or her into the Guard and Reserve to include--and we are 
looking at things, particularly in the Guard, of increasing the 
numbers of air crew members, increasing the air crew ratio, 
looking at some of our full-time people who want to get off 
active duty but still do not want to go to the airlines, 
looking at increasing our technicians' starting pay, looking at 
some type of bonus for them as well, looking at having the 
ability to get through the ceiling.
    If they are getting off of active duty at this time, they 
are getting off as usually senior majors. Before, they were 
getting off as captains. We are looking at trying to get relief 
in the upper grades to bring them on as well, so we are 
exploring every possibility to take that young man or woman 
getting off active duty to bring them into the Guard or 
Reserve.
    The challenges that we have, though, is that our OPTEMPO is 
starting to increase, and increase to the point where they are 
looking at Guard and Reserve maybe as not as good an option as 
they thought, but we are also trying to address that as well by 
the study we have going, the FTF, the future total force, and 
how to leverage each other, leverage the Guard, leverage the 
Reserves and the Actives together to help relieve this OPTEMPO, 
which is really driving people out.
    It is not the money. It is the quality of life that our 
active duty members are having, and it is starting to have a 
little bit of an effect also on the Guard and Reserve, and I am 
concerned about that.

                            Quality of life

    Senator Stevens. We have talked to people. I have talked to 
some from home. Our refueling wing and also the search and 
rescue group are both having deployments overseas, and at an 
increasing rate. The people we talk to, the pilots we talk to 
overseas indicate some of them have been away from home more 
than one-half the year.
    General Weaver. Yes, sir.
    Senator Stevens. That is not conducive to reenlistment, and 
it is not conducive to staying with your outfit, either.
    Now, somehow or another those slots have to be expanded, 
and the one area that they are getting this extremely heavy 
duty in terms of these containment missions in Bosnia and in 
Iraq and Korea, it is the pilots that are flying night and day 
the circles and squares, and that drives them nuts, and they 
quit. If you give them the same job once they come out, they 
are not going to stay with you, either.
    General Weaver. That is correct, sir.
    Senator Stevens. Have you got a study that is active?
    General Weaver. Sir, we are really aggressively pursuing 
this, because there is a window of opportunity, and it is going 
to increase in a way that, with the airlines even hiring more, 
and there is not going to be any slowdown in the airline 
hiring, and they prefer military pilots.
    We need to capitalize on this draw, looking at increasing 
the crew ratio of our aircraft, of both tankers, airlift, and 
fighters. That will drive a bill. How much of a bill, and can 
we pay that bill? We are looking at that corporately as well.
    Senator Stevens. Let me make a suggestion to you, that you 
look at trying to bring some of these guys back on. They are 
majors and above, most of them, I understand.
    General Weaver. Yes, sir.
    Senator Stevens. Bring them back on in terms of a lower 
grade as far as their participation in your structure, but 
maintain that grade for purposes of their retirement. Have you 
done that?
    General Weaver. No, sir; we have not, but we can look at 
that.
    Senator Stevens. We would like to find some way to keep 
those people proficient. They are the most proficient, and I 
would urge you to let us know, and give us some kind of an 
idea, moneywise, what we are talking about. We want to help 
with that.
    That is probably--of all our hearings we have had so far, 
the decline in the reenlistment of pilots across the services, 
but particularly the Air Force, is the greatest. Have you had a 
decline in pilot retention?

                  Army National guard pilot retention

    General Navas. Not really, sir. As a matter of fact the 
Army is experiencing that there is a shortfall of AH-64 
aviators in the Army, and we are working very close with the 
Army Office of Personnel to put some Army Guard AH-64's--this 
is the Apache helicopter pilots--on short tours of active duty 
to alleviate this condition in Korea, and we are working that 
very closely, so there is that.
    We have still not experienced that in the Army Guard yet.
    Senator Stevens. I have a series of other questions I would 
like to submit. I am preoccupied by the pilot problem. We do 
want to see if we can find some way to deal with it, and I 
would urge you to give us your ideas.
    Do you have any last questions, Senator Cochran?
    Senator Cochran. Mr. Chairman, yes, I do. Following the 
lead of Senator Leahy, I do have a couple of parochial issues 
to raise with the panel.
    Senator Stevens. They are not unknown here.
    Senator Cochran. I did not think you would object.
    The C-17's at the airlift wing in Jackson, MS, are 
scheduled to be deployed and fielded there. I think that is the 
first Air Guard unit in the Nation that will actually have C-
17's. I wonder if that program for deployment and fielding 
those is still in place, and what is the timetable?
    General Weaver. Absolutely, and I can give you the exact 
timetable for the record, but we are looking at the beginning 
the airplanes at about 2003 or 2004 timeframe. We are looking 
at training beginning that same time as well.
    We are looking at exploring possibilities of a possible 
simulator, as well, for Jackson, because the way of training 
for our big airplane drivers now is how the airlines have been 
doing successfully for many years. That is by putting air crew 
members in simulators to help cut down on the wear and tear of 
the airplanes, and really it is a cost-effective way of doing 
business, and the program for Jackson is on track, sir.
    Senator Cochran. Is there any need for lead time, military 
construction or preparation for that event? I hope you would 
point that out and what the expected dates for that would be, 
and the amounts of funding necessary.
    General Weaver. We are working that very closely with 
General Cross, who is a supporter of this, and we look good 
right now, sir.
    [The information follows:]

                         C-17's in Jackson, MS

    The Air National Guard is the first Reserve Component Force 
to receive the Air Force's newest strategic airlifter, the C-17 
Globemaster III. Preparations are well under way to receive the 
C-17 at Thompson Field, Jackson, Mississippi. The following 
Military Construction projects are planned and included in the 
Future Years Defense Plan to support the C-17 beddown at 
Jackson, Mississippi:

                        [In millions of dollars]

                                                                 Program
        Fiscal year/Project                                       Amount

2001--C-17 Corrosion Control Hangar/Shops.........................  10.0
2002--C-17 Squadron Operations Facility...........................   3.5
2002--C-17 Upgrade Hangar and Shops...............................   8.0
2003--C-17 Upgrade Fuel Cell and Shops............................   4.9
2003--C-17 Upgrade Short Field Runway.............................   2.7

    Senator Cochran. Another program that is important in our 
State is the expansion of the gunnery range at Camp Shelby. We 
have a combat brigade, as you know, based in Mississippi, which 
was activated during the Persian Gulf Desert Storm/Desert 
Shield timeframe, and we are interested in doing what we need 
to do to make sure that that schedule is met.
    I note the environmental impact statement was recently 
completed, and if you could provide us for the record the 
expected requirements for funding to meet those schedules, we 
would appreciate that very much. As far as you know, is that 
still on track?

               funding for Camp Shelby, MS, gunnery range

    General Navas. Sir, I do not have the exact information. I 
know there was an environmental issue there, and also that that 
was in the program, but I can give you the specific details of 
that, but that is a high priority, highly critical range that 
we need in Shelby, since that is basically the home of the 
155th Separate Brigade.

                           Retrograde program

    Senator Cochran. I notice, General Baca, in your statement 
you talk about your retrograde refitting and repairing 
equipment out of the European theater, where it has been 
excessed there, and you are able to, in a cost-efficient way, 
provide the Army National Guard with equipment that is 
refurbished. The Kansas and Mississippi Army National Guards 
were awarded a bid for operation of this rebuilding program.
    Could you bring us up to date for the record, or if you 
have information on it now, what the status of that program is, 
and what the requirements for any funding in connection with it 
would be?
    General Baca. Sir, I can give you all of the details for 
the record.
    [The information follows:]

    Following the Desert Shield/Desert Storm conflict, the Army 
National Guard (ARNG) opened nine sites to repair 5,571 pieces 
of equipment that were used in the operation. This program was 
so successful the ARNG was approached by Headquarters 
Department of the Army (HQDA) in 1993 with a request to 
undertake the repair of equipment left in Europe when the large 
draw down of personnel occurred. The ARNG developed a business 
plan and projected a fully burdened labor rate of $34 per hour. 
The plan was approved by HQDA and seven sites were opened which 
subsequently received 8,876 pieces of equipment valued at $2.6 
billion. The ARNG partnered with the States to repair and 
distribute the equipment. The majority of the individuals 
employed were members of the ARNG. This mission provided 
valuable training to 475 individuals and also acted as 
tremendous recruiting and retention tool. Based on experience 
gained in Desert Shield/Desert Storm and later the Retrograde 
Europe (RETROEUR) programs, the ARNG decided to leverage its 
capability of producing a superior product at a reduced cost. 
The first program implemented is the remanufacturing of 2\1/2\ 
ton tactical trucks in Kansas and Mississippi. The level of 
maintenance required to remanufacture 2\1/2\ ton trucks is 
lower than that performed on equipment returning from Europe 
and it is well within the capabilities of the ARNG. The ARNG, 
in this program, will benefit from the training of soldiers in 
their Military Occupation Specialties (MOS) with additional 
benefit to the ARNG's recruiting and retention effort. The ARNG 
has already purchased 20 kits (which includes all the parts 
required in remanufacturing a truck) to be used in the 
validation of the remanufacturing process. When the sites go 
into production, parts will be obtained through commercial 
sources and contracts. Two universities have been contracted to 
conduct the validation process and when the process is complete 
the sites will be ISO 9000 qualified.
    The ARNG is utilizing National Guard and Reserve Equipment 
Appropriation (NGREA) funding to support the remanufacturing 
program consistent with congressional guidance. The funding 
needed to support the program is a minimum of $30 million per 
year. This funding will allow over 550 trucks to be produced 
per year and will substantially increase the readiness of our 
units.

    General Baca. Let me mention, that was one of the real 
success stories of our retrograde. All of our retrograde 
equipment from Europe, we had several sites in addition to 
Kansas and Mississippi.
    We had a total of five sites, I believe, throughout the 
United States that repaired that equipment and put it back in 
service, not only for the National Guard but for the total 
force, extremely economic way of doing it, probably about one-
third the cost that it could have been done any place else, 
very efficient and very effective, and I think Army Materiel 
Command [AMC], Gen. Johnny Wilson would reinforce what I am 
saying now, that it was an effective program, and I see that 
that program can mature and it can build, and it can go on to 
other type maintenance activities, other than just retro units.

                      Weapons of mass destruction

    Senator Cochran. There is a piece in the Washington Post 
this morning about Secretary Cohen's announcement that he is 
going to have some 20--well, 10 new emergency teams to help 
domestic agencies respond to attacks with chemical and 
biological weapons, and he says in the press release, which we 
have a copy of dated March 17, that there will be 22 full-time 
National Guard personnel in each unit.
    I think they are called rapid assessment and initial 
detection elements, 10 rapid assessment and initial detection 
elements.
    I assume there will have to be some training in regard to 
that, and some funding that would be available. Apparently, 
about $49 million being requested in this budget relating to 
terrorist response programs for weapons of mass destruction 
reaction teams and the like. Is this amount sufficient to deal 
with this new program, or do we need to add funds to that 
account to make sure that you have the resources to meet this 
new challenge?
    General Baca. Senator, first let me state that, as you 
know, the national defense panel identified that as one of our 
threats, the asymmetrical threats going into the 21st century, 
one that is tailor-made for the National Guard, because we 
already do that kind of response in our normal mission, and as 
a constitutional role of the National Guard.
    The 10 teams that Secretary Cohen was talking about is the 
initial test, and they are setting up by the 10 FEMA regions, 
but eventually we would want a team in every State in the 
Nation.
    I believe the teams, the requirement for the teams 
themselves, the funding requirements that are in this budget 
are about $19.9 million of the $49.2 million that have been 
requested. That is what is going to be required now to organize 
and to establish these first teams.

                          Counterdrug mission

    Senator Cochran. We already have the Mississippi National 
Guard involved in counterdrug training. There is an academy at 
Meridian, MS, which I have toured and am confident that they 
are doing a good job. They have graduated over 9,000 police 
officers and personnel from a four-State area who have come 
there for training.
    And I point that out because I know there is a request in 
this budget for continuation of that program, but I am advised 
that the budget request may be underfunded by over $2 million. 
Could you provide for the record what the needs are to continue 
the counterdrug training academy at Meridian, and whether or 
not this new weapons of mass destruction assignment could be 
considered for inclusion in that program, particularly if you 
are going to be integrated with FEMA personnel and local law 
enforcement officials. It sounds to me like this may be a model 
for including a training site for that purpose at that 
location.
    General Baca. Senator, we are in the midst now of doing a 
study to determine what the requirements are going to be, and I 
can assure you that training is going to be one of the top 
requirements. We have got already your facility and the one in 
Florida and the one in California that I am sure will play an 
increasing role in the training in weapons of mass destruction 
[WMD], and so I will provide you that information for the 
record.
    [The information follows:]

    In fiscal year 1998, the Regional Counterdrug Training 
Academy (RCTA) received $2.2 million of the Presidents Budget 
and $0.9 million in Congressional plus-ups for a total budget 
of $3.1 million. The RCTA taught 150 courses reaching an 
audience of 2,200 students. In fiscal year 1999 their funding 
is at $2.2 million, which will result in a significant decrease 
in the amount of law enforcement officers they will be able to 
train. In order to train the maximum amount of law enforcement 
officers their facilities would allow (backlog of 3,863) the 
school would require an additional $2.5 million for a total 
fiscal year 1999 budget of $4.7 million.

    Senator Cochran. Thank you, General. Thank you, Mr. 
Chairman.
    Senator Stevens. Thank you, Generals, for what you are 
doing for the country and leading the Guard units. We 
appreciate you coming, and look forward to being with you, and 
General Baca. We look forward to seeing you before you step 
down from your position.
    General Baca. Senator, if I may just say a word here. I did 
not mean to indicate that by any means I am a lame duck. I have 
got 4 more months to go, and I am going to give it all I have 
got for the next 4\1/2\ months, but Senator, let me just say, 
now that I have this opportunity and this forum, we mentioned 
about the fact that I traveled with you to Alaska, and I was 
glad that I did that early on.
    And I gained a tremendous amount of experience with you 
actually going to visit--you know, we jokingly talk about the 
salmon fishing, but I will tell you I have never worked any 
harder than I did on the trips that I went with you, Senator, 
and you accompanied me to every location, even the remotest 
places, and your concern for your Guard units and your concern 
for your State, but more than that, your concern for all of 
national defense has served as an inspiration to me during the 
last 3\1/2\ years.
    And Senator, I will tell you that it has been an honor and 
a privilege to work with you, and I just wanted to say that 
publicly.
    Senator Stevens. You are very kind. We appreciate that.

                        Youth Challenge Program

STATEMENT OF MAJ. GEN. JAKE LESTENKOF, ADJUTANT GENERAL 
            OF ALASKA
ACCOMPANIED BY LT. COL. FRANCIS B. WILLIAMS, DIRECTOR, GEORGIA YOUTH 
            CHALLENGE ACADEMY

    Senator Stevens. Let me now turn, gentlemen, to this other 
panel. We thank you very much. We would excuse you now. We are 
going to hear from several witnesses who will discuss the Youth 
Challenge Program.
    General Baca, General Weaver, General Navas, we have with 
us today Maj. Gen. Jake Lestenkof, who is the Adjutant General 
of Alaska, and Lt. Col. Francis B. Williams, the Director of 
the Georgia Youth Challenge Academy.
    They are accompanied by Tiffany Nicole Brown, a student 
from the Georgia Youth Challenge Academy, Joshua Bryson Phagan, 
a student at the Georgia Youth Challenge Academy, and Alex J. 
Sparra, a sophomore at the Citadel, who is a graduate of the 
Georgia Youth Challenge Academy.
    Let me ask you all to come up here and join General 
Lestenkof, if you will. We want to welcome you here, and to 
give you an opportunity to make statements. There may be other 
Senators coming later who are interested in your program.
    General Lestenkof, I welcome you here as a fellow Alaskan, 
and also remember so well the visit that you arranged for me to 
our Youth Challenge Program in Alaska and the wonderful reports 
we are having concerning that program. So let me ask you to 
proceed with your statement, and if you have any opening 
statement with regard to this program, Senator Cochran.
    Senator Cochran. Thank you. I am very happy to have an 
opportunity to hear the testimony of these witnesses. It is an 
interesting program, and I think it is a very worthwhile 
program, and I am confident their testimony will bear that out.
    Senator Stevens. Thank you for coming. I know it is a 
different experience for you. It is nice to have you here.
    General Lestenkof. Thank you very much, Mr. Chairman. Thank 
you for inviting me to appear representing the National Guard 
and the States to talk about our Youth Challenge Program.
    I have submitted written testimony for the record, but 
before beginning my remarks, I know you have introduced Colonel 
Williams, who is the Director of the program down in Georgia. I 
will ask him again to introduce the students and the cadets 
that are here today. Probably my remarks will be certainly 
overshadowed by the comments that the youngsters will bring to 
the committee, but Colonel Williams, would you introduce them 
once more?
    Colonel Williams. Thank you, General. Sir, today I have 
with me Joshua Phagan from the present class at Youth Challenge 
in the Georgia program. I have Alex Sparra, who graduated 2 
years ago from the Georgia program class 6. He is currently 
enrolled at the Citadel in South Carolina. I have Ms. Tiffany 
Brown, who is also in the current class the Georgia program.

                         youth programs support

    General Lestenkof. Thank you, Frank.
    Let me begin with my prepared remarks. I am here to speak 
today on behalf of the National Guard sponsored youth programs, 
the Challenge and the Youth Conservation Corps for fiscal year 
1999 funding. Hereafter, during the remainder of my testimony I 
will refer to both programs as the Challenge Program.
    The National Guard provides the oversight and support for 
Challenge. When you consider that the Guard is located in over 
3,400 communities across America, you understand our wide 
reach. It fits the civil support mission that most Americans 
are familiar with, fulfilling the State mission of the Guard.
    The National Guard has the required infrastructure in place 
to support such a program. We also have the availability of 
trained people in the areas of organization, planning, 
execution, self-discipline, training, and especially 
leadership.
    The National Guard and the Challenge are the natural 
partnership between hometown America and the military. We are 
on Main Street. The lights are on and someone is home to take a 
hand with helping America's youth at risk.
    We provide a bridge between the military and our youth at 
risk with the Challenge programs. Years ago, judges would 
adjudicate at-risk youth to military service. Frankly, many 
young people simply needed the structure, the discipline, and a 
caring environment to change failure into success. Those days, 
like the military draft, are in the past. However, thanks to 
Challenge we are able to provide the same qualities of 
structure, discipline, and a caring military environment for a 
new generation.
    At its core, the Challenge is a preventative rather than a 
remedial program. It is based on eight prime components that 
support the development of the whole person in terms of mind, 
body, and the personal values. They include leadership, 
fellowship, community service, job skills, academic excellence, 
responsible citizenship, life-coping skills, health, education, 
and physical training.
    Emphasis on self-discipline, self-esteem, and the 
development of healthy lifestyles are the bedrock of the 
success of these young men and women's experience; 91 percent 
of our Challenge members from our last recent class graduated. 
Now, that is higher than the national high school average. This 
is very significant, because 100 percent of our graduates were 
already dropouts, or expellees from traditional school systems.
    Over one-fourth of our young people in America are dropping 
out from our traditional secondary schools. These 
disenfranchised and disillusioned youngsters are at a high risk 
of turning to a life of drugs and crime. We must believe that 
these young people can be saved. The Challenge Program is 
turning high-risk young Americans who are statistically headed 
for a dismal future into self-confident, contributing citizens 
of our country, our States, and our communities.
    Let us be clear with one another on behalf of these 
children, their families, and the future of America. The young 
people that come to us are doing their part. We, the National 
Guard, are striving to do ours, and America needs your 
continued and ardent support for these programs and we 
appreciate the support of you and the committee in the past.
    Thank you very much.
    Senator Stevens. Well, General, let me tell you, it is very 
important that you come here today, because in the 1998 bill we 
are operating under now you have 15 programs in the Guard, and 
they cost the taxpayers about $40 million. The 1999 budget 
request before us is for $25 million, which would require us to 
reduce the number of programs underway.
    We have requests now for additional programs of 38 in total 
so far. I assume eventually we would have 50 plus the 
territories, but it would cost $82 million to fund the pending 
request for the program.
    I am really delighted you have taken the opportunity to 
come, and I would like to give an opportunity to Colonel 
Williams and to the students here to make statements, if you 
would like to do so.
    Colonel Williams.

                       success of youth programs

    Colonel Williams. Sir, I will tell you that I was sent to 
Challenge as an assignment. I did not believe in it. I did not 
think we really needed to be going there. I did not know what 
at-risk youth was. I told my General we did not have a dog in 
that fight, that we needed to be training soldiers and needed 
to be training killers and maintaining our equipment, and so I 
did it with reluctance.
    I did not really know what the problem was in the United 
States. I did not know what the Georgia problem was. I did not 
really know anything about it. My background is in agriculture, 
and so I am not a teacher, and I am not an educator, and I have 
been a guardsmen.
    But the first class, I found out real quickly what it was 
all about. We do have a place. We do have a job there. It is 
turning young folks around, and it is working. It is making a 
tremendous difference in their lives.
    It is making guardsmen in their hometowns heroes by 
identifying these youth all over the State and sending them 
down and getting them back on track, and it is having results 
more than I ever expected of the program. I never expected the 
results we are getting. I am a believer now.
    Senator Stevens. Well, I had similar comments when I was 
with the General at the school I went to visit. The people 
really had become believers.
    Let me tell you young people out there, there is hardly a 
family in the country that has not had experience with problems 
of trying to keep our young people in school, and this is a 
very interesting program. You bring us some actual experience 
now, so we want you to tell Senator Cochran and me what you 
have on your mind and what you think we ought to do with this 
program.
    Let us start with you, Mr. Phagan.
STATEMENT OF JOSHUA BRYSON PHAGAN, STUDENT, GEORGIA

    Mr. Phagan. I am kind of nervous right now.
    Senator Stevens. Don't worry, we put on our pants one leg 
at a time, just like everybody else. [Laughter.]
    Mr. Phagan. Without this Challenge Program I know I would 
be in a world of trouble, or I would not even be in this world 
right now. Before I came in here I was on the streets. I was 
selling drugs. I was doing a lot of drugs. I was involved with 
a lot of gang activity. I knew I needed to change, and I had 
friends who have come through the Challenge Program and it 
really helped them out, and I wanted to be like that.

                           prepared statement

    It is a good program. It is a real good program. I am 
getting my general education diploma [GED]. I am getting my CDL 
license, and I am getting my high school diploma, and I am now 
drug free and tobacco free, and it is a real good program.
    I mean, I do not want to know where I would be without it.
    [The statement follows:]

               Prepared Statement of Joshua Bryson Phagan

    My name is Joshua Phagan. I was born in Macon, Georgia, on 
March 9, 1980. I attended John H. Heard elementary school and 
was a decent student. After elementary school, I attended 
Ballard Hudson middle school, and that is when my life started 
to go downhill. I started using drugs really heavily. I was 
smoking marijuana, snorting cocaine, using LSD, and taking 
pills. I moved to Forsyth, Georgia, in 1993 and attended Monroe 
County Middle School where the drug use only got worse and I 
became involved with gang activity and violent engagements 
using deadly weapons. In 1994, I attended Mary Persons High 
School where the downhill slope of my life became a 90-degree 
angle straight down. I knew that it was time for a change, but 
I couldn't do it by myself. That is when I found out about 
Youth Challenge Academy and all its benefits. At first, my 
parents didn't like the idea of it and just told me to stay in 
school, but I couldn't because I was constantly getting 
suspended and skipping school so I could get high. After they 
found out more and more about the program, they began to like 
it more and more. This program is what I've been looking for to 
turn me completely around and get away from the wrong crowd 
that I have been looking to get away from for so long. I'm a 
100 percent drug-free Cadet with a GED and hopefully a high 
school diploma and commercial driver's license.
    After I graduate, I plan to go to the military and go to 
college to get a degree in business and start my own business. 
All this I know I can achieve, because of Youth Challenge. 
Without Youth Challenge, I would most likely be dead or in 
prison. I now realize that five months is worth giving up to 
better the rest of my life.

    Senator Stevens. Thank you very much. We are delighted you 
are here today. How far are you from finishing the program?
    Mr. Phagan. We are in the 7th week of a 22-week program.
    Senator Stevens. You have made marvelous progress.
    Let me turn to the young lady first.
STATEMENT OF TIFFANY NICOLE BROWN, STUDENT, GEORGIA

    Ms. Brown. My background, I grew up in Savannah, and I went 
to school and I dropped out of school, maybe just because of 
the environment, wanting to hang out, and I remember it was 
like, I was not involved in any gang activity, or had any 
involvement on drugs or anything, but the program is ultimately 
magnificent, and it just helps us a lot, allows us to get ready 
to work to go in our jobs in the military, or college, or 
whatever it is that we need to do to help us tremendously.
    And I see a lot of people coming in who really need help, 
and it has helped them. Basically, it is really great and it 
really helps the community and all the children.
    [The statement follows:]

               Prepared Statement of Tiffany Nicole Brown

    I'm Tiffany Brown, from Savannah, Georgia. I'm a 17 year 
old cadet at Georgia Youth Challenge Academy. Youth Challenge 
has been an inspiration to many adolescents. When I came to 
Youth Challenge I was totally amazed at what was offered. 
Previous to engaging in this challenge, I had always self-
directed and determined to pave my own way to success. As an 
outgoing and versatile youth I was given all opportunities to 
excel. I had the very best of a family who always encouraged 
me. I feel blessed because to me my life so far has been a 
unique experience. Throughout my life I have always worked 
diligently at whatever I wanted. Truly I am not merely half of 
the way there, but through Christ he will lead me to success.
    While growing up in this ever agonizing but peaceful 
decade, I attended Sophrona Tompkins Middle School and Alfred 
Ely Beach High School. I participated in numerous extra-
curricular activities. I've always been very active. At the age 
of 12 I graduated from modeling school. In 1995 I represented 
Savannah in the Miss Georgia Teen Pageant. In 1996-97 I also 
represented Savannah through the Professionals Reach-Out 
Program as Miss Silhouette--while having my own component 
called personal development and etiquette. On several occasions 
I've been the community's top teen. During my sophomore year of 
high school I attended cosmetology school and graduated. I 
always think ahead, so at the earliest ages I pursued to 
prepare for my future. I have been employed in numerous 
environments and job settings such as running offices and 
programs, childcare, floristry, sales and retail, and 
cosmetology. I use everything that occurs in my life as an 
educational experience. My goal is to be as omniscient as 
possible when it comes to my career limits. I have also 
participated in various community projects. I feel that it is 
very important for me to give back to my community. It has 
given me so much, and I feel the need to be there for the 
upcoming students to help them understand the importance of 
staying in school. I am very gracious of my opportunity at 
Youth Challenge Academy.
    I have noticed that throughout my life I have had a 
different mentality and way of thinking compared to my peers. I 
could never understand why others didn't think like me. I've 
never had any academic problems in school; I just seemed to get 
very bored by my surroundings easily. I need an ever-changing 
environment to keep my mind healthily stimulated. I always felt 
that I didn't belong, I was odd or different, especially in a 
high school setting where I was allowed only to express a 
limited amount of my capabilities and creativity. I felt 
trapped and no one could ever understand me. I feel it is so 
important to be able to develop your own identity and 
personality. I wanted to loose whatever this feeling was, be 
myself, and go to all extraordinares--the path which I am 
engraving now. I drifted away from high school and found Y.C.A. 
Y.C.A. was not what I was looking for to fill my personal 
needs, but it took my interest and gave a positive outlook 
toward my future. It keeps my mind busy and I always look 
forward to new adventures. The experience turns out to be 
phenomenal. This program offers all skills that adolescents 
need to prepare for the future. From a High School Diploma, 
college courses, counseling, counselor life and work skills--
which physically aligns us for jobs, college, and military. 
They offer all types of workshops, extra-curricular activities, 
and a few trades, which is more than you could ever get in a 
traditional high school. We're involved in an array of 
community service projects, not to mention the military 
structure which gives us a disciplined and ordered atmosphere, 
as well as being able to learn how to interrelate with people 
of diverse backgrounds that prepares for living in this multi-
cultural society. Being that this is a five-month program with 
minimal contact with our family, friends, previous environment 
it makes us strong and ready for survival. Youth Challenge 
molds us mentally, physically, and spiritually. We have 
numerous opportunities to unleash the spiritual side of us. The 
Cadre, counselors, teachers, and staff push us to endure and 
strive for the best. They are ever-caring and never give up on 
us. Neither do our peers. We live and work together as a team. 
It is exactly a ``challenge'' as said. Y.C.A is dynamic and 
greatly appreciated. Marvelous. No words could express how I 
feel about the program, the importance of it, and how many 
people it has helped. Y.C.A. has graduated 1,399 cadets. What 
would be done without Y.C.A.?
    Often we as young adults don't make the correct choices, 
but I feel that my experience was God sent. I want to find a 
way to be able to reach out more to today's youth. Helping to 
deal with some of the cadets' emotional issues and struggles 
while here at Youth Challenge gives me experience towards a 
possible future profession. Through the traits of different 
people I learn how to compromise methods of making them feel 
better or finding ways to help solve their problems. I have a 
strong desire to help others. Early while growing up I always 
wanted to pursue the career of a psychologist, social worker, 
or counselor. However over the years it has changed and now 
varies. After completing my challenge, I plan to join the Air 
Force Reserves. From there I plan to attend various colleges 
because I have a broad amount of interests which includes 
ministry. I have a purpose that I will fulfill. I am thankful 
that I have always been self-driven and motivated. We as young 
adults need the opportunity to spread our wings. Youth 
challenge does just that. It gives us hope and faith that no 
one else would. So I thank God for Y.C.A., my life, 
experiences, and accomplishments. Truly it is not me, but he 
who is within me. God Bless All.

    Senator Stevens. Are you going to be able to get your GED?
    Ms. Brown. Yes; I have already attained that, and I am 
about to take some college classes, and I plan to go into the 
Air Force Reserve and then on to college.
    Senator Stevens. That is wonderful. How far had you gone 
before you dropped out of school?
    Ms. Brown. I was in the middle of my junior year.
    Senator Stevens. Well, you have got a great opportunity, 
and I congratulate you for following up and wish you the best 
success.
    Ms. Brown. Yes; it has really helped me get back on track.
    Senator Stevens. Very good.
    Mr. Sparra, you are at the Citadel now, right?
STATEMENT OF ALEX J. SPARRA, SOPHOMORE, THE CITADEL, 
            GRADUATE, GEORGIA YOUTH CHALLENGE ACADEMY

    Mr. Sparra. Yes, sir.
    Senator Stevens. Tell us about your experience. How did you 
get into the Challenge Program?
    Mr. Sparra. Well, sir, when I was 16 years old I was having 
a lot of trouble in high school, skipping school all the time. 
I was cutting classes, getting bad grades. I was in my second 
sophomore year in high school, and I was pretty much doing the 
same thing I did during the first time I was a sophomore, just 
messing around and basically wasting time, and wasting my life 
away.
    My mother was going crazy. She saw her son just wasting 
away, very concerned. I think it was tearing her apart, and 
somehow she talked to somebody and thank goodness they told her 
about Youth Challenge, and she came to me one day and she said, 
this is where it ends. You are going to do one of a few things. 
You are either going to drop out of high school and get a job 
and go to work, or you are going to go to high school and start 
getting good grades and graduate, and do whatever, but you are 
not just going to be sitting around at home skipping school, 
and I heard about this military program. I want you to go to 
boot camp for 5 months and get a GED.
    When I heard that, I was completely turned off and said, no 
way. I knew that I wanted to go to college. I did not know 
where, I did not know how. If I had dropped out of high school 
I could not have joined the military. I could not have gone to 
college. I had no skills. Basically I had no work ethic, no 
self-discipline. I was pretty much useless.
    But my mom said, please, just come speak to this recruiter, 
listen to what he has to say, and find out about this military 
thing. We had never heard of it, did not know what it was, and 
so I went just for my mom, and when I heard about Youth 
Challenge I immediately fell in love with the program. I knew 
this was what I wanted to do.
    I saw people running around in battle dress uniforms 
[BEU's] doing physical training [PT], going to GED classes. It 
looked like it was a lot more involved than what a regular high 
school was. I was already going to drop out of high school. I 
dropped out. I applied to the program. I got accepted. That is 
probably where my life started to turn around right there.
    I went down to Fort Stewart. I did the 5-month residential 
phase. It was probably one of the longest 5 months of my life. 
I had never been away from home before. I was scared. I was 
with a bunch of people that I did not know. I was getting 
dropped for pushups all the time, getting up at 5 o'clock in 
the morning doing PT. It was like my whole life was turned 
upside down.
    I worked on my GED, I got my GED, I had the opportunity to 
take some college courses at Savannah Tech, and started to get 
things moving and started to get kind of motivated. I liked the 
way my life was starting to go.
    I started to become productive. I was not sleeping all day. 
My mom was proud of me. I was finally doing something. I knew I 
wanted to go to college. Toward the end of the program I 
decided that the military life had kind of worked out for me 
and got me on track, and so when it came time to think about 
college I applied to the Citadel, and luckily I was accepted, 
and here I am today, sir, just to tell you about how great the 
program is.
    Senator Stevens. You have been through 1 year already at 
the Citadel?
    Mr. Sparra. Yes, sir.
    Senator Stevens. How did you work out? What kind of grades 
did you get?
    Mr. Sparra. Academically it was very hard for me. My first 
year I did not do too well. I think my main problem was study 
habits, because I did not learn that. I did not learn how to 
sit down and make myself study.
    Surprisingly, though, all my classmates who had graduated 
from high school, a great deal of them did not have good study 
habits, either, and so when it came to grades I was not at the 
bottom of the barrel, but I was not at the top of my class, 
either. I was right in the middle.
    This year I am doing pretty well, though. I am really 
pleased with my grades. I know how to plan and when I need to 
study and what I need to do, and I am loving it.

                    alternative structure education

    Senator Stevens. Good. Very good. Well, you are a 
testimony, the three of you, to the foresightedness of the 
people in the Guard. You started this program, and we who have 
been familiar with it from the beginning have wanted to expand 
it.
    I have a personal reason to be interested in it, as Jake 
knows. I wish there had been one available for one of my kin 
who got a little bit out of kilter, as you have in the past, 
but I do think that this is the kind of program that needs more 
advertising, and thank you for coming.
    I see one behind you. Ms. Powell, are you part of the 
program, too?
    Ms. Powell. I am a staff member, sir. I am the one that 
wakes them in the morning. [Laughter.]
    Senator Stevens. Senator Cochran, do you have any 
questions?
    Senator Cochran. Thank you, Mr. Chairman. The program I 
think in our State has been one of great success as well. 
Mississippi is one of 20 States that has an active program, and 
there are about that many that would like to have the program, 
but because of funding shortfalls are not able to. In 
Mississippi I am told the legislature has provided additional 
funds to have extra classes, and that they have an annual 
enrollment of about 400 students.
    And they have just considered legislation that would 
increase that to 800. So, the States are coming up with money 
and using this model. It is based at Camp Shelby, with the 
National Guard training facility in Hattiesburg as the site for 
this. So it has been a great success, I am told, in our State 
as well.
    I congratulate those of you who are involved as students, 
staff, administrators of the program. You have really done a 
great job, all of you have, and you can probably take a great 
deal of pride in leading the way for the whole country.
    Senator Stevens. I am going to yield to Senator Bumpers in 
a moment, but Colonel Williams, the thought strikes my mind 
that maybe you ought to also be sort of indoctrinating some of 
the people from the high schools in each State, the people who 
are teachers, to come and participate to get some ideas about 
maybe having classes, or having some alternative structure of 
education for people like this who get bored with the existing 
concepts of education and who drop out.
    We have known other dropouts. One of them started the 
largest manufacturing company in the world, as you know, but 
they all do not have that stimulus.
    Is there any way you could integrate into your program some 
kind of an adjunct teacher so that they could take some of 
these high school teachers that could get some experience in 
how to deal with young people like this who want a different 
opportunity?
    Colonel Williams. Sir, I have been to a couple of the local 
schools around there and worked some with their alternative 
school people. I have also worked with Georgia Southern and had 
interns come down and work, and so Georgia Southern University 
is sending students down to look and see from time to time.
    Senator Stevens. That is very good. I think that would be a 
good cross-pollenization with the existing school structure.
    Senator Bumpers.
    Senator Bumpers. Mr. Chairman, I just simply want to say I 
got in on the tail end of these youngsters' testimony, and I 
came here really to grill General Baca, who I understand 
probably heard I was coming and left. [Laughter.]
    Senator Stevens. No; he is right back there. He is waiting 
for you. But he is going to leave now, now that he knows what 
you want. [Laughter.]
    Senator Bumpers. But I also want to state that Arkansas has 
a Youth Challenge Program and we are very proud of it. It has 
been very successful.
    But Colonel, let me ask you this question. Are you limited 
under your present budget on how many youths you can take?
    Colonel Williams. Yes, sir; I am limited. The funding was 
for 180 students.
    Senator Bumpers. Nationwide?
    Colonel Williams. For my program. For my program I was 
limited, and I am funded by the number of students that I 
carry.
    Senator Bumpers. How many students attend the Challenge 
Program now, do you know?
    Colonel Williams. Nationwide I do not know, sir.
    Senator Bumpers. I am told by staff it is 3,566. Is that 
correct?
    General Lestenkof. I am told, Senator, that the number is 
3,000 nationwide within the Challenge Program.
    Senator Bumpers. 2,000?
    General Lestenkof. 3,000.

                     criteria on accepting students

    Senator Bumpers. This was the target enrollment, 3,566. 
What is the criteria, if I have a wayward youngster and I would 
like to get him in the program, and I brought him to you, and 
he has been having problems with drugs, maybe, petty thefts, 
that sort of thing. What is the criteria on whether you accept 
somebody or do not accept somebody?
    Colonel Williams. The criteria, sir, is they have to be 
between 16 and 18 years old and have to have dropped out of 
high school. They have to be drug free, and what that means is, 
on day one I give them a drug test and it comes back negative.
    Senator Bumpers. Or you do not take him?
    Colonel Williams. I do not take him if it comes back hot, 
no, sir.
    Senator Bumpers. Then how did you get in? You said you were 
high most of the time.
    Mr. Phagan. Well, I wanted to get into the program, and so 
I stopped.
    Senator Bumpers. How long had you been drug free when you 
applied?
    Mr. Phagan. Two or three months.
    Senator Bumpers. Two or three months, and how long have you 
been in the program?
    Mr. Phagan. Eight weeks.
    Senator Bumpers. How long is the program?
    Mr. Phagan. Twenty-two weeks, sir.
    Senator Bumpers. Twenty-two?
    Mr. Phagan. Yes, sir.
    Senator Bumpers. And you are doing well in the program?
    Mr. Phagan. Yes, sir; I have already got my GED.
    Senator Bumpers. What do you want to do when you finish?
    Mr. Phagan. I want to go to college and into the military.
    General Lestenkof. Senator, just let me add that in 
watching this program for a number of years, probably the 
bottom line on any youngster coming into the program is that 
they must want to attend the program. We are not going to be 
dragging them into the program.
    If they are personally interested in attending and 
participating, they will make a success of this thing, because 
we have had people who were somewhat unsure about attending the 
program that we lose in the early stages of the program, so 
there has to be that personal motivation.
    Senator Bumpers. How many youngsters are eligible to get in 
and cannot get in because the rolls are full?
    General Lestenkof. It is probably running about 12 to 15 
percent in Alaska, in my State, and that is the State I am 
familiar with.
    We estimate that----
    Senator Bumpers. General, just a moment. What is it?
    Senator Stevens. Explain that statistic to him, Jake.
    General Lestenkof. The numbers, that would probably be 
about 30 to 40 that we would not take on a regular class.
    Senator Bumpers. That would be eligible, except you are 
full?
    General Lestenkof. That would be eligible that we are not 
able to afford.
    Senator Stevens. How many do you take, Jake?
    General Lestenkof. We take 120 at the beginning of the 
class.
    Senator Bumpers. And that is the most you can take?
    General Lestenkof. Yes.
    Senator Bumpers. And you have 30 more that would be 
eligible?
    General Lestenkof. We have 30 to 40 that would be eligible.
    Senator Bumpers. Why on Earth is the administration asking 
for a cut in the funds for this program, or are you the wrong 
person to ask?
    General Lestenkof. I am the wrong person to ask. We 
estimate in our State that this year we will have about 3,000 
dropping out of our regular high school programs, so we are 
looking at an audience of about 3,000 each year that could be 
prime candidates for the program in Alaska alone.
    Senator Stevens. You only have one in Alaska, right?
    General Lestenkof. We just have one program in Alaska. Each 
State has one program.
    Senator Bumpers. Mr. Chairman, has anybody testified on why 
they are cutting these funds, why they have asked for a cut?
    Senator Stevens. Well, the fellow is not here. He lives at 
1600 Pennsylvania Avenue.
    Senator Bumpers. Well, I can handle him. [Laughter.]
    Senator Stevens. That is why we are glad you are here, sir. 
[Laughter.]
    Colonel Williams. Sir, if I could, last year Georgia had 
31,000 dropouts.
    Senator Bumpers. Pardon?
    Colonel Williams. Last year Georgia had 31,000 drop out of 
high school last year alone, and I quit advertising for 
students for my program because I get two to three times the 
number of applicants that I can take, and so I have a State 
selection committee made up of citizens of Georgia that come in 
and pick my students out of all the applications we go through, 
so there are many, many people that are qualified there that do 
not get selected just because there are too many.
    Senator Stevens. If you would yield for just one question 
there, how many of these people as they graduate want to go out 
into the military?
    Colonel Williams. Sir, I am running about 16 percent now, 
16 to 20 percent, depending on the class. The ones that go in 
do really well.
    Senator Bumpers. Mr. Chairman, I do not want to pursue this 
any further, except to say just based on the limited knowledge 
I have, and the fact that I know they love the program in my 
State, but we are 1 of only 20 States, and I think there are 
more States who want to join, and with a program with a track 
record like this has it would be unforgivable not to increase 
the funds, instead of cutting funds.
    This committee has something to say about whether these 
funds are going to be cut or not, or whether something is going 
to be added or not, and unless there is a lot I do not know 
about the program, I think it would be the height of folly not 
to allow these other States to enter the program and not to 
provide the funds for them to do it, and to provide the funds 
for you to be able to take everybody that applies that is 
eligible.
    This is precisely what we talk about on the Senate floor, 
and hold our hands over our hearts while we are doing it, and 
then come in here and the thought of cutting this program is 
the height of absurdity.
    Senator Stevens. Senator, we are expanding as rapidly as we 
can. It is, as the Colonel indicates, an adjunct to the Guard 
functions, and their task right now is to be able to prepare 
people in uniform to fill in for the reduction in the regular 
Army and Air Force, and this--we cannot let this divert funds 
from the Guard's ongoing increasing burden in the military 
structure.
    But we do want to increase them, and the difficulty is, 
these are military funds going into education, I hope you 
realize, and what we have to do is to pace it so we can 
increase it and expand it, and do it without depriving the 
Guard of the people to do the function that they must do to 
assist the regular services.
    Senator Bumpers. Well, Mr. Chairman, it seems to me the 
next observation ought to be how many of these youngsters go 
into the military when they finish the program.
    Senator Stevens. That is why I just asked the question. He 
said 17 percent.
    Senator Bumpers. Well, that is not as high as it probably 
ought to be, but that is high enough to maintain the program, 
and the thing about it is, presumably you do not have any idea 
of how many of these youngsters get in trouble after they leave 
the program, do you?
    Colonel Williams. I lose about 6 percent of the ones that 
go through.
    Senator Bumpers. During the time they are in school, 
though?
    Colonel Williams. No, sir; when they finish there is about 
6 percent recidivism, go get in some kind of trouble and go 
back and get on drugs.
    Senator Bumpers. Well, hell, the public education system 
cannot boast of that.
    Colonel Williams. No, sir.
    Senator Stevens. Jake, how many people enlist from your 
program in Alaska?
    General Lestenkof. We are running today I think about 10 
percent, and this is for the Active service and for the Reserve 
components, the Air Guard, Army Guard, and Reserve.
    Senator Stevens. But that is not really a total figure, 
because some of them might do what Mr. Sparra is doing and 
going on to college with the hope of going later. Didn't you 
say you wanted to go into the military?
    Mr. Sparra. Yes, sir; but right now I am also in the South 
Carolina State Guard.
    Senator Stevens. You are in the Guard already?
    Mr. Sparra. Yes, sir; I am enlisted.
    General Lestenkof. In Alaska we are running--about 93 
percent of our graduates are in the service, or in jobs, or 
back in school, either college or back in their own high 
schools to finish, and so that is a pretty high rate.
    Senator Stevens. We ought to be able to track them to see 
how many after they go to high school or college end up in the 
military. I do think it is an excellent way to give young 
people an opportunity to see what the military is all about.
    Do you have any other questions, Senator?
    Senator Bumpers. I do not. Thank you, Mr. Chairman.
    Senator Stevens. Well, let me tell you again, we are really 
grateful to you for coming.
    Were you serious about wanting General Baca to come back 
up?
    Senator Bumpers. Yes; I just had one question.
    Senator Stevens. General Baca is always a volunteer. If you 
young people would stay, our photographer would like to get a 
photograph of you while you are here.
    May I ask you, then, to go back to your seats and let 
General Baca come back forward.
    Senator Bumpers. My question, General Baca, is, I am again 
dismayed, dumbfounded, and really upset about the fact we are 
building hardly any National Guard armories. Benton, AR, has 
been on the list since before I was born. It is still not on 
the Pentagon's list for replacement, and as I understand it 
there are only four armories in the Guard budget, is that 
correct?
    General Baca. Senator, I do not know the exact number, but 
I think that is about right. I can give you the number for the 
record.
    [The information follows:]

         Details of Armories in the Army National Guard Budget

    There are presently four armories and/or readiness centers 
scheduled for replacement or expansion in the fiscal year 1999 
Budget. The locations are Gowen Field, Idaho, Bismarck, North 
Dakota, Powhatan, Virginia, and Camp Dawson (Kingwood), West 
Virginia. The armory at Benton, Arkansas, is in the Future 
Years Defense Plan for fiscal year 2002.

    Senator Bumpers. I am not going to go through all the 
statistics about how many armories we have and how many of them 
are in a sad state of repair or ought to be replaced, but how 
in the name of all that is good can we keep going, not doing 
any better by the Guard armories than we are doing?
    General Baca. Senator, I could not agree with you more. I 
think it is an issue that we need to address. We need the--
armory is a misnomer, really. It is more now--it is a training 
facility for the units. The units need the adequate facilities 
to train.
    I can tell you also, Senator, that as you know in your 
communities as a citizen, Senator, it is a center for the 
activity of all the citizenry, and we need to address the 
problem. I agree with what you are saying.
    Senator Bumpers. Well, I do not know whether this committee 
is going to undertake to add to the list or put any more money 
into the program.
    You know, like everything else, I suppose we are up against 
budget caps just like everybody else is, but as I say, I just 
think this is penny-wise and pound-foolish, not to keep our 
infrastructure up for what I consider a very important element, 
and that is the Guard.

                     additional committee questions

    Well, I had questions of the Air Force, the Guard Air Force 
too.
    General Baca. Senator, we would be happy to provide you all 
your answers for the record.
    Senator Bumpers. We will submit several questions for the 
record, General Baca, and if you can get back to us at the 
earliest possible time, if you would share your answers with 
the other members of the committee.
    [The following questions were not asked at the hearing, but 
were submitted to the Bureau for response subsequent to the 
hearing:]
          Questions Submitted to Maj. Gen. Paul A. Weaver, Jr.
              Questions Submitted by Senator Byron Dorgan
                                  f-16
    Question. There is a need to upgrade the aircraft being flown by 
the 119th Fighter Wing, now flying the F-16A. Are there plans to 
upgrade the 119th Fighter Wing to the F-16C?
    Answer. There are various force structure options under discussion 
between the Air Staff and the Air National Guard staff. Some of those 
options do include upgrading the 119th Fighter Wing from the F-16A to 
the F-16C.
    Question. What would be the ultimate result of such an upgrade, as 
to mission, number of aircraft, and cost?
    Answer. The various options under consideration include leaving the 
unit in the Air Defense mission or converting to the General Purpose 
mission. The number of aircraft assigned to the unit and the cost, will 
be consistent with other units assigned to the same mission.
    Question. Are there any F-16C's available for the 119th Fighter 
Wing or other Air National Guard Units in the foreseeable future?
    Answer. The availability of F-16C aircraft is dependent upon the 
force structure options exercised by the Total Force. As the Air Force 
is currently not buying new F-16's, any F-16C's that flow to the 119th 
Fighter Wing and other units will come out of the existing force 
structure.
    Question. Without an upgrade, how many hours are left on the 
present F-16A's
    Answer. The age of the F-16A ranges from a low of approximately 
2,500 hours to a high of approximately 4,250 hours. The fleet average 
age is approximately 3,768 hours. Remaining service life of these 
aircraft is difficult to determine, since hours alone is not a good 
measure. Current service life projections predict that the F-16A will 
be able to safely operate for several more years.
    Question. Has the possibility of a ``mid-life update'' of F-16A's 
been explored?
    Answer. Yes, the mid-life update program for the F-16A has been 
explored.
    Question. What would the cost of this update be as compared to the 
purchase of new aircraft?
    Answer. The cost of the mid-life update varies dependent upon the 
service life extension option selected. In general, the cost is 
approximately one-half the cost of a new aircraft, although the 
amortized cost is the same (approximately $3.2 million/year). The main 
difference is that, at best, the mid-life update is a 16 year aircraft, 
while a new aircraft is a 32 year aircraft. These figures are based on 
using the aircraft at the rate of 250 hours per year.
    Question. What capabilities would be lacking in such upgraded F-
16A's as compared to F-16C's?
    Answer. The mid-life update provides Block 50 compatible avionics. 
However, the airframe is still an F-16A airframe, with all of the 
associated weight limitations. Therefore, the limitations is not 
avionics, but airframe load bearing capacity.
    Question. What are the drawbacks of this program as compared to the 
purchase of new aircraft for the active Air Force and the cascade of 
used F-16C's to the Air Guard?
    Answer. If the F-16A was to have the mid-life update accomplished, 
the only aircraft modified in this configuration would be those in the 
Air National Guard (ANG). This provides some unique logistics issues 
that separate the ANG from the rest of the Total Force. Additional 
operational concerns would also have to be addressed in order to fully 
integrate these platforms with the Total Force. There are workaround 
solutions to both of these issues; however the optimum solution would 
be to migrate F-16C models to the ANG.

                          subcommittee recess

    Senator Bumpers. Thank you very much, Mr. Chairman. That is 
all I wanted to pillory General Baca about.
    Senator Stevens. Is he entitled to another Purple Heart? 
[Laughter.]
    Thank you very much, gentlemen.
    Senator Bumpers. Unhappily, he agrees with me but cannot do 
anything about it.
    Senator Stevens. I guess he is ready for retirement. 
[Laughter.]
    Thank you very much. We are going to be in recess until 
March 19, this Thursday, that is tomorrow, to hear testimony on 
intelligence programs for this subcommittee.
    Thank you all very much.
    [Whereupon, at 11:50 a.m., Wednesday, March 18, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                        WEDNESDAY, APRIL 1, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:09 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Shelby, and Inouye.

                         DEPARTMENT OF DEFENSE

                            Surgeon Generals

STATEMENT OF LT. GEN. RONALD R. BLANCK, SURGEON 
            GENERAL, U.S. ARMY

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Gentlemen, we apologize. We had the markup 
session on the tobacco legislation, and we told them we had 
other medical problems over here to deal with so we could come 
over here. So, my friend and I are here and we are happy to 
have a chance to visit with you about the future of our health 
problems.
    It is a pleasure once again to welcome you, General Blanck, 
as the Surgeon General; Vice Admiral Koenig, the Surgeon 
General of the Navy; and General Roadman as Surgeon General of 
the Air Force.
    We have some very significant challenges in the Department 
of Defense and medical readiness is one of them. We do have to 
have the ability to care for the Active Force and to keep the 
commitments we have made to those who have been in the force. I 
hope that we will have the chance here to discuss a lot of the 
issues that we have tried to deal with in the past.
    I am going to ask my colleague if he has a statement.

                   STATEMENT OF HON. DANIEL K. INOUYE

    Senator Inouye. Thank you very much. I would like to take 
this opportunity to acknowledge Vice Admiral Koenig. I believe 
this is the last time he will be appearing here. I wish to 
thank you for your enduring support over the past 4 years and 
wish you much success in future endeavors.
    Mr. Chairman, I have had several opportunities to visit 
military medical facilities over the past several months, and I 
found care delivery to be excellent, which reinforces my belief 
that our military health care is far superior than that of 
other countries. We provide high quality care because our 
service members and their families deserve the best.
    One of the most important aspects of the high quality of 
military medicine is the access to care provided to our 
beneficiaries. Although the overall size of our military forces 
and number of treatment facilities has declined, the number of 
eligible beneficiaries has increased. This increase is due to 
two important factors.
    First, the average family size of our junior enlisted 
members has increased. Statistics now show that approximately 
65 percent of our forces now have family members eligible for 
health care.
    The second factor I believe is the excellent retention 
which has increased the number of service members who remain on 
active duty through retirement.
    During visits to my home State, many current and former 
members of the military frequently ask about the future of 
military health care and they express confusion and concern 
about the options available and why changes such as TRICARE 
were necessary. They are particularly apprehensive about the 
changes to the availability of quality services to their family 
members. I can say with confidence that the ready access to 
quality health care, wherever military members are living, is 
always of paramount concern to them.
    Today, as we address many of the issues facing our military 
health system, I would like to focus on military medical 
readiness, provision of health care services to our 
beneficiaries, new technology initiatives, and the President's 
fiscal year 1999 budgetary request. So, I look forward to the 
testimony this morning.
    I would like to join my chairman in welcoming General 
Blanck. He has been a good friend for many, many years. And 
also General Roadman. Welcome, sir.
    I would like to also announce, in case you have not heard, 
the State of Hawaii and Tripler Medical Center has had a new 
addition, the highest ranking nurse to be Commander in Chief of 
the facility. So, congratulations to all of you. We finally 
crossed the border here. The next one is three stars. 
[Laughter.]
    Senator Stevens. Gentlemen, I have recently had some 
information from one of you that in the Washington, DC, area, 
because of the innovative way that we have handled 
consolidation of functions at military hospitals, we have 
actually been able to hold inflation in terms of the cost of 
the services you provide here down to approximately 1 percent, 
compared to the 7 to 12 percent of medical systems generally. 
You are to be congratulated. I hope other people are listening 
to what you are going to tell us because I think that reports 
are very good in terms of the innovative way and the approach 
to the job you have to provide better care and holding down the 
costs we have.
    So, let me first start with you, General Blanck.

                 statement of lt. gen. ronald r. blanck

    General Blanck. Thank you, Mr. Chairman, distinguished 
members. I appreciate the opportunity to appear with my 
colleagues.
    I will keep my remarks brief and ask that my testimony, of 
course, in its entirety be part of the record.
    The Army Medical Department, along with our sister 
services, is looking at how we can shape our total medical 
force as we prepare for all of the eventualities and as we 
respond to the ever-increasing need for health care, 
particularly of not only our active duty and family members but 
also our retirees and their family members of all ages.
    We are shaping, Mr. Chairman and distinguished members, by 
such things as the consolidations that you referred to. Here in 
the National Capital area there have been functional 
consolidations between National Naval Medical Center and Walter 
Reed Army Medical Center, as well as Malcolm Grow Air Force 
Medical Center. We have combined most of our graduate education 
programs and actually have centers that do one specific thing 
at just one, not all, of those medical centers, so that we have 
avoided duplication.
    The same thing is happening throughout this country, and I 
would also mention similar consolidation efforts in San Antonio 
between Wilford Hall Air Force Medical Center and Brooke Army 
Medical Center. This is one example, at least, of how we are 
managing to continue to provide ever-increasing quality of care 
with much more accessible care, making it more accessible and 
at the same time holding costs down to a minimum. It is care of 
value and I think of great value to this Nation.
    We do have serious problems within the shaping, 
particularly in our Reserve components where, for the Army at 
least, I have serious shortages in physicians, dental officers, 
and physicians' assistants. Some of those problems are 
occurring in the Active Force, but far less so. The Reserve 
force is of great concern to me, and we have certain 
initiatives in place to improve recruitment and increase 
retention.
    We have, as noted, moved to corps in material commands with 
General Adams taking the command of Tripler Army Medical 
Center. This first 99 command board that considered all corps 
will be announced shortly and I suspect there will be members 
of the Nurse Corps and the Medical Service Corps as well as the 
Medical Corps on that list.
    Finally, we are also shaping with innovative technologies, 
a variety of kinds of information technologies. Telemedicine in 
particular has played a key role and we are doing that through 
the AKAMAI project with Hawaii and Alaska and using it many, 
many places including today in Bosnia and in Kuwait, Bahrain, 
the whole gulf area.
    We are preparing our force for all the eventualities in a 
variety of ways. We are applying the protection of anthrax 
vaccine, and those immunizations are going on as we speak, all 
captured in an immunization tracking system so we know who got 
them.
    We are preparing with such evacuation platforms as the UH-
60Q, and I appreciate the support that you individually and 
this committee have provided to let us have our first eight of 
these evacuation platforms.
    Of course, we are into health promotion through not only 
all of the education programs but such technologies as the 
electron beam computerized tomography that you have been very 
supportive in and that we now have at Walter Reed and some 
other places within the system. Of course, we are moving to 
develop the generation after that--the volume angio-CT.
    We have the chemical/biologic response teams standing up at 
our medical centers, and we really are trying to look at all of 
the kinds of scenarios to which we might be called upon to 
respond.
    Response. We are doing that in Bosnia. We are doing it in 
the gulf. We are doing it with partnering with such groups as 
the Center of Excellence in disaster management and 
humanitarian assistance, in Honolulu with the university there.
    We are implementing TRICARE throughout, and as of the end 
of this spring, May 1, we will actually have contracts in all 
of the areas in TRICARE, the last being the Northeast, here in 
the National Capital area up through Maine.
    Part of this responding is, of course, to try to provide 
better access to care to those retirees and family members 65 
and over through Medicare subvention, through other initiatives 
of partnering with Medicare health maintenance organizations. 
We are working closely with not only you, but with our 
constituency organizations, our beneficiary organizations, to 
try to come up with innovative ways to provide that care.

                           prepared statement

    I look forward to your questions, and again thank you for 
the opportunity to appear before you.
    Senator Stevens. Yes, sir.
    [The statement follows:]
            Prepared Statement of Lt. Gen. Ronald R. Blanck
                              introduction
    Mr. Chairman and members of the Committee, I am Lieutenant General 
Ronald R. Blanck, The Army Surgeon General. It is a privilege for me to 
address this committee. This morning I would like to provide you with a 
picture of the Army Medical Department. Through this picture you will 
see an Army Medical Department fully integrated not only on any future 
field of battle, but in garrison as well, taking care of all our 
soldiers, retired and active--and their family members. I will provide 
this picture in the context of the three Army Imperatives--Shaping the 
Force, Preparing the Force, and Responding to the Needs of our Army and 
the Nation. In so doing, I will highlight the issues and challenges 
that Army Medicine faces today and into the future. Next, as I know 
this is an area of intense concern for the Committee, I will focus some 
comments on current issues in telemedicine and TRICARE and its ongoing 
implementation. Further, I will highlight areas where the Army Medical 
Department is working in close cooperation with our sister service 
medical departments to gain efficiencies. Finally, I will take a few 
moments to complete the picture by sharing with you some ``Good News'' 
stories from within the Command. At the conclusion of my testimony, I 
believe you will agree, today's Army Medical Department is more 
flexible and better prepared to meet all our diverse missions than ever 
before. I thank you for your continued support of our efforts to 
provide the finest quality of medical support to America's Army.
             current status of the army medical department
    The Army Medical Department continues to respond with creativity 
and energy to the challenges of health care in a rapidly changing 
environment. Since the end of the Cold War, the Army Medical Department 
has reduced by about 20 percent in officers and about 40 percent in 
enlisted soldiers. In 1990, we had 168 field hospitals--active and 
reserve--that number has dropped to 52 and will continue to fall. In 
the same timeframe, the Army Medical Department began with 10 Medical 
Centers and 28 Medical Department Activities--Community Hospitals--our 
inpatient facilities, and has reduced to 8 Medical Centers, 18 
Community Hospitals, and a host of large outpatient Medical Clinics.
    Even as we reduce our numbers, we are deploying all over the world 
more than we have in recent years. These deployments are not typically 
for combat, but rather for humanitarian assistance and stability and 
support operations. Medical personnel are finding that on these 
missions they are typically providing preventive medicine expertise and 
disease and environmental surveillance. All the while, we must maintain 
day-to-day health care for soldiers, retired soldiers and their 
families.
    Army leadership has articulated three imperatives as we approach 
the challenges of the 21st Century. We in the medical department must 
align ourselves with the rest of the Army to shape our forces to meet 
the needs of a changing world; we must also prepare our forces by 
staffing, equipping and training them to successfully complete all 
missions they may be called upon to perform; and we must respond to the 
needs of the Army and the Nation. Let's look at the Army Medical 
Department's current priorities, as they relate to these imperatives:
Shape
    Drawdown.--The Army Medical Department has been a full participant 
in the drawdown of the total Army Force. Reductions of 37.6 percent in 
the active Army Force have been mirrored by a drawdown of 34 percent in 
the Medical Department's military strength. We will continue to shape 
our force utilizing all of the Congressionally provided tools, striving 
to meet the allocated military endstrength in fiscal year 1999. These 
tools (Expanded Selective Early Retirement Authority, the Variable 
Separation Incentive Programs and the Variable Early Release and 
Retirement Program) have been applied selectively to the various 
competitive categories which comprise the Army Medical Department. The 
overriding consideration during this entire period has been to insure 
the correct specialty mix has been maintained to sustain the readiness 
of the Army Medical Department to accomplish its multifaceted mission.
    Leadership Development Opportunity.--Historically, senior 
leadership positions and commands within the Army Medical Department 
(AMEDD) have been corps specific. As an example, Medical Treatment 
Facilities have been commanded by officers of the Medical Corps (MC) 
and non-deployed TOE medical units have been commanded by Medical 
Service Corps (MS) officers. Dental and Veterinary units have been 
commanded by Dental Corps and Veterinary Corps Officers respectively. 
As a result there have been few corps immaterial senior leadership or 
command opportunities for AMEDD officers. This policy has limited the 
AMEDD's ability to select the best-qualified officer for senior 
leadership positions.
    In January 1997 the Secretary of the Army approved the Surgeon 
General's request to change Army regulations which had restricted 
command of Medical Treatment Facilities. In general veterinary, dental, 
aviation, garrison and logistics commands will remain corps specific. 
Virtually all other commands will be AMEDD corps immaterial. The 
implementation of corps immaterial commands within the AMEDD will be 
phased in over the next few years. The fiscal year 1998 DA Command 
Designated Position List (CDPL) selection boards held in November 1997 
for Lieutenant Colonel and January 1998 for Colonel was the first 
opportunity for AMEDD officers to compete for commands designated corps 
immaterial. Results of these boards are expected to be released in 
April/May 1998 for commands opening in the Summer of 1999. In addition, 
the Army Medical Department has identified and opened appropriate non-
command senior leadership positions to the best-qualified officers of 
each AMEDD Corps.
    Reserve Component Staffing.--The Army depends heavily on its 
Reserve Component for medical support. About 70 percent of the Army's 
medical forces are in the Army Reserve--representing approximately 273 
medical units. Several efforts over the past several years have 
improved some aspects of reserve readiness. For example, Medical 
Command and Reserve Command signed a Memorandum of Understanding that 
allowed closer interaction and support between reserve and active duty 
assets. Medical Command has also established Regional Medical Commands 
that are responsible for active/reserve integration in their respective 
geographical areas.
    Although these efforts have been successful in meeting their major 
objectives, we continue to have serious problems in other areas, most 
notably acute shortages of physicians and dentists in many reserve 
units. With a loss rate higher than our gains every year since Desert 
Storm, the current recruiting incentives are obviously not meeting the 
objectives of the force.
    It is a very complex set of challenges but we have already begun 
working on the following partial remedies: (1) increased emphasis with 
Recruiting Command on manpower needs, and (2) individualized efforts to 
convince physicians and dentists leaving active duty to join reserve 
units.
    Neither of these efforts alone will solve the problem, but if we do 
a good job in both areas, along with on-going restructuring, we can 
make significant inroads in eliminating the shortages.
    Dental Officer Shortages.--We continue to have concern regarding 
the recruitment and retention of dental officers in the Army Dental 
Corps. Our budgeted end strength for dental officers is 1,169, and on 
the 31st of January 1998 this year, we had 1,018 in the Dental Corps, 
indicating that we are 13 percent understrength. We have not been able 
to meet our accession goals for the past 13 years. Additionally, the 
Dental Corps is an aging force. As of February 23, 1998, 17 percent of 
Dental Corps officers are retirement eligible and an additional 43 
percent of current Dental Corps officers will be retirement eligible 
within 5 years.
    In response to this, Congress enacted a pay increase for both 
junior and senior officers, and an accession bonus and loan repayment 
program to enhance the recruiting of new officers. The National Defense 
Authorization Act of 1998 also provides for a Multiyear Retention Bonus 
for all specialists.
    We are working to maintain the number of Health Professions 
Scholarship Program scholarships in dentistry and to obtain funding for 
specialists under the Multiyear Retention Bonus. We will continue to 
work in this area and monitor progress.
    Physician Assistant Shortages.--Since 1992, the number of Physician 
Assistants leaving the Army has exceeded the number of accessions. This 
has resulted in insufficient numbers of Army Physician Assistants, 
hindering the provision of Army healthcare. There are a number of 
reasons for this problem and we are looking at several potential 
solutions. The solutions range from loan repayment for Physician 
Assistant School and recruitment bonuses to expanding the Green to Gold 
program and increasing the number of Physician Assistant Training 
seats. This problem is receiving a great deal of attention and I am 
confident we will overcome this critical shortage.
    Consolidate Regions.--The Army Medical Department needs to align 
its organizations better in two ways. First, we will position ourselves 
around the deployable corps--XVIII Airborne Corps, III Corps and I 
Corps--by really focusing on the needs of each of the warfighting 
Commanders in Chief. Also, we need to align ourselves and link 
ourselves better with TRICARE lead agents. They are increasingly 
important organizations for coordinating health care throughout the 
Army, Navy and Air Force, and to a certain extent the Public Health 
Service, in order to oversee managed-care support contracts.
    The Southwest Regional Medical Command consolidated with Great 
Plains Regional Medical Command last fall. The expanded Great Plains 
Regional Medical Command supports III Corps, and will focus on Southern 
Command. The Pacific Regional Medical Command and the Western Regional 
Medical Command have signed a Memorandum of Understanding defining 
their peacetime/wartime support of I Corps and Pacific Command, 
particularly with regard to crossed lines of authority in Alaska. The 
North Atlantic Regional Medical Command and the Southeast Regional 
Medical Command are developing a Memorandum of Understanding as to how 
they will both support 18th Airborne Corps and share resources. 
Southeast Regional Medical Command will focus on Central Command and 
North Atlantic Regional Medical Command will align with the Europe 
Regional Medical Command to focus on European Command. These alignments 
should clarify regional responsibility and facilitate and improve 
habitual training and support relationships.
    Integration of Field Units into Fixed Facilities.--The Army needs a 
certain number of rapidly deployable field hospitals that are fully 
staffed--except for professional fillers--and able to deploy within 10 
days. Other deployable hospitals, however, may be given ``Caretaker'' 
status, with most personnel working day-to-day at fixed military 
hospitals. This helps maintain clinical skills and makes the best use 
of personnel to meet the daily demand for health care. Each Caretaker 
Hospital, with the staff working in the fixed facility, provides 
approximately $24 million worth of health care per year and is able to 
deploy in 10 and 30 days. Reserve personnel will mobilize to staff the 
fixed hospital when its active personnel deploy with their Caretaker 
Hospital. TRICARE support contracts also provide for increasing the 
level of care/number of providers available during mobilization.
    Army Medical Command/Office of the Surgeon General One Staff.--Last 
year we reduced duplication between the U.S. Army Medical Command 
Headquarters staff located mainly in San Antonio, Texas, and the Office 
of the Surgeon General staff located in the National Capital Area. This 
was not a downsizing exercise but a measure to improve performance by 
further flattening the organization and reducing duplication. It 
follows the dual-hatting of the Surgeon General as Commander of the 
U.S. Army Medical Command. The Deputy Surgeon General became the U.S. 
Army Medical Command's Chief of Staff. Three brigadier generals serve 
as Assistant Surgeons General in addition to having functional areas of 
responsibility within the Medical Command. Modern communication 
technology allows leaders in one location to communicate efficiently 
with their staff in another location.
    Medical Reengineering Initiative.--The Medical Reengineering 
Initiative is the outcome of a process that examined the ten functional 
areas of Combat Health Support to ensure their relevance to future 
operations. It provides for a single, modular hospital and better 
command and control, with treatment teams and streamlined support 
elements. Potential manpower reductions generated as a result of MRI 
will be garnered as savings under the Quadrennial Defense Review (QDR) 
and the Total Army Analysis Processes.
    The Army Medical Department is an integral part of the Army, and as 
the Army reduces, so must its medical support. As a result of the QDR 
decision to reduce the Army from 495,000 to 480,000, the MEDCOM will be 
reducing by about 800 military spaces. Some of this directed reduction 
will impact on health care providers and ancillary support. Although it 
is still assessing how best to execute its share of the QDR decrement, 
MEDCOM intends to premise its reduction on changes in workload and 
population served as much as possible. Critical to this analysis will 
be the protection of MEDCOM's core competency as a readiness focused 
health care enterprise.
    Army Medical Department Information Reengineering.--A special study 
group called Task Force Mercury analyzed information management and 
information technology in the Army Medical Department, in order to best 
harness this critical resource. They delivered 27 recommendations for 
business-process changes pertaining to doctrine, training, leader 
development, organization, materiel and soldiers. Outcomes and 
efficiencies realized through these efforts include consolidation of 
seven organizations into one organization accountable for acquisition 
and support of information products, elimination of duplication across 
the organizations, and improved delineation of roles and 
responsibilities. Additionally, we are leveraging existing staff to 
address information requirements for both fixed and field operations. 
Customer support is now deployed far forward. Training of information 
management skills is now incorporated throughout all Army Medical 
Department curricula. A process for prioritization of business 
requirements has been established which will ultimately improve 
mechanisms for prioritization of corporate investments in information 
technology. These and other business process changes are anticipated to 
significantly improve the Army Medical Department's ability to exploit 
information and information technology across the full spectrum of 
operations.
    Reinvention.--As evidence of the Army Medical Department's 
commitment to reshape and reinvent itself, the U.S. Army Medical 
Command requested and obtained designation as a Reinvention Center. 
Reinvention Centers and Laboratories are designated to lead the way and 
set the pace of change by experimenting with new processes and new ways 
of doing business. Although the Army Medical Department has been 
leading change for years, this designation affirms our commitment to 
innovation and making smart business decisions. In addition to the 
command's designation as a Reinvention Center, five subordinate units 
have been designated as reinvention laboratories (the U.S. Army Health 
Care System Support Activity, U.S. Army Medical Research and Materiel 
Command, U.S. Army Center for Health Promotion and Prevention Medicine, 
the U.S. Army Medical Department Activity at Fort Knox, Kentucky, and 
the U.S. Army Dental Command).
Prepare
    Readiness Training.--Phased implementation of new standards to 
train all medical soldiers for combat support began October 1. These 
are not intended to revolutionize the substance of training, but rather 
to ensure wider understanding of requirements and greater consistency 
in implementation. The eight requirements are survival skills, weapons 
training--for selected personnel--collective training, competency-based 
orientation, Deployable Medical Systems training, job-specific medical 
training, job-specific readiness training and a briefing on Medical 
Force Doctrine. A database in the Medical Occupational Data System will 
track these requirements.
    Battlefield Evacuation.--Of critical importance to me is evacuating 
wounded soldiers from the battlefield to medical treatment facilities. 
Several initiatives, if successfully implemented, will upgrade our 
capabilities for this vital mission:
    The Air Force has agreed to support evacuation from forward 
hospitals to the rear, using C-130 transport aircraft as High Capacity 
Air Ambulances. Joint doctrine has been developed and will be included 
as a chapter in Field Manual 8-10-6.
    In fiscal year 1996 and fiscal year 1997, Congress funded the 
modification of eight UH-60's to the UH-60Q air ambulance 
configuration. The cost of this modification is $2 million per airframe 
and allows for sophisticated medical treatment during evacuation. The 
UH-60Q provides advanced trauma management, enhanced navigation, 
communication and digitization on the battlefield. This enhancement 
gives the pilot situational awareness of his location and the enemies, 
and the capability to obtain and forward patient status information, 
beyond vital signs, to the receiving medical unit.
    The Army POM has program funding for procurement of 117 UH-60Q's to 
begin in fiscal year 2002 in support of our Force Package 1 
requirements. The Army procurement plan continues well into the out 
years until all UH60Q's have been procured through Force Package IV, 
giving the Army a total of 357 UH-60Q's for battlefield evacuation.
    Until funding is available to purchase the remaining UH-60Q's, the 
Army is required to procure medical conversion kits necessary to 
convert the standard UH-60A to a UH-60A aeromedical evacuation 
platform. Although the conversion kit does not provide the 
sophisticated medical evacuation capabilities of the UH-60Q, it does 
satisfy the interim requirement to provide for patient evacuation on 
the battlefield.
    A prototype of the new Armored Medical Treatment Vehicle performed 
magnificently during the Advanced Warfighting Experiment at Fort Irwin, 
CA, last spring. The Training and Doctrine Command has validated the 
Armored Medical Treatment Vehicle requirement. We are working on a plan 
that would allow us to begin procurement of the Armored Medical 
Treatment Vehicle beginning in fiscal year 2000.
    TDA Specialty Response Teams.--When Korean Air Flight 801 crashed 
in Guam last August, Tripler Army Medical Center had a critical care 
team in the air within hours to assist the Navy hospital in Guam. 
Shortly after, the Institute of Surgical Research at Brooke Army 
Medical Center had two teams of burn specialists flying to the site to 
provide care to casualties. We intend to form similar teams with 
special skills in trauma/critical care, chemical and biological 
casualties, stress management, telemedicine, and preventive medicine 
and disease surveillance. The teams will give us the capability to get 
two to four highly skilled care providers to a remote site rapidly, 
while larger support forces are mobilizing. These teams, primarily 
based in the Continental United States, are designed to respond to 
regional needs, often civilian, and are not designed to replace field 
units.
    Technology.--We are enthusiastically incorporating advanced 
technology into the way we provide world-class care to our patients. I 
will defer my comments on technology and telemedicine here so that I 
may focus more on it in a few moments.
    Soldier Medical Readiness.--The Medical Protection System, a 
medical Occupational Data System application, has been identified as 
the system to record, report and archive soldier and unit readiness. 
Implementation of the system is ongoing with immunization tracking 
being the first module to be completed.
Respond
    This last imperative is where the medical department differs 
somewhat from the Army's line units, for we must not only respond to 
the call to battle in far-off lands, but we must also respond to the 
daily demand for high-quality, cost-efficient health care for soldiers, 
families and retirees.
    Operation Joint Guard.--Army medical personnel are doing a 
magnificent job in Bosnia and Hungary supporting Operation Joint Guard. 
Their good work and aggressive health promotion have resulted in low 
rates of illness and injury. One particularly creative approach was the 
production of decks of playing cards that also contain tips to help 
troops avoid cold injuries, rodent and tick-borne diseases, and other 
preventable illnesses and injuries.
    Also in place in Bosnia, the U.S. Army Center operates a highly 
successful disease surveillance program for Health Promotion and 
Preventive Medicine. The ability to collect and analyze, in theater, 
information on disease and injury occurrence will permit early 
identification of threats to the health of the force and enable the 
timely use of preventive measures.
    We are learning how to use telemedicine more effectively. While 
visiting a Battalion Aid Station in Bosnia, I was impressed to see a 
physician assistant speak to an emergency room physician in Landstuhl, 
Germany, using a satellite connection. It was simple, relatively 
inexpensive, portable and effective.
    TRICARE.--TRICARE is the Department of Defense response to the 
Congressional mandate to develop a health care delivery system using 
the concepts of managed care while maintaining readiness, containing 
costs, and improving access to health care. TRICARE is an umbrella 
program bringing together the capabilities of the individual military 
Services, CHAMPUS, and civilian contractor preferred provider networks. 
I will speak much more about TRICARE in a few minutes.
    Health Promotion.--One of the tenets of Managed Care directs that 
care is provided by the most medically appropriate, qualified provider 
to each patient at the right time and at the right place. In an ideal, 
efficient managed-care program, the appropriate level of care may well 
be lifestyle counseling and behavior modification to keep the 
beneficiary healthy to begin with, rather than waiting to cure an 
illness that could have been avoided. Again, I will focus more on this 
issue later.
    Ambulatory Data System.--This new automation system captures 
diagnosis and procedure information on outpatient visits. The capturing 
of this more detailed clinical information is critical for decision 
making and to support our new costing methodology.
    Clinical Pathway Implementation.--Variation is the enemy of 
quality. Clinical practice guidelines and clinical pathways are road 
maps used to reduce unwanted variation and to maximize the quality of 
care rendered. The use of clinical practice guidelines, the adaptation 
of locally specific clinical pathways, and the sharing of information 
will enable us to achieve our overall goals of improving clinical 
outcomes, conserving resources, and improving patient satisfaction.
    A database has been developed to track clinical pathways at Army 
Medical Treatment Facilities. Our Medical Treatment Facilities are now 
using 103 more clinical pathways than they were a year ago.
    More information about the issues discussed here can be reached 
through our new Army Medicine Web Site: http://
www.armymedicine.army.mil.
    We have to learn to manage change to our greatest advantage. The 
best way we can manage constant change is to be intellectually flexible 
while retaining an unchanging set of core values and functions.
    The core values of the Army Medical Department are: Loyalty, Duty, 
Respect, Selfless-service, Honor, Integrity, Personal Courage, 
Commitment, Competency, Candor, and Compassion with absolute patient 
focus. Our three core functions are: Project a Healthy and Protected 
Force; deploy the Medical Force; and manage the Health Care of the 
Soldier, the Soldier's Family, and the Military Alumni Family.
    If we can keep these values and functions as nonnegotiable 
guidelines, we will be able to adapt to the changes on the horizon. As 
long as we use our core values to guide changes to our core functions, 
we will be a wiser and more efficient organization than we have ever 
been in our 222-year history.
                              telemedicine
    This morning I would like to outline to you the overall vision and 
goals of telemedicine, the lessons we have learned from our 
experiences, the present status of Army Telemedicine in the field and 
in our military training facilities, and the leading edge research in 
this area.
    Telemedicine and the Goals of Telemedicine.--Telemedicine is the 
use of information management and technologies to provide healthcare 
across time and distance. The technologies involve the use of 
telecommunications that pass the information from one health care 
delivery site to another or between a clinician and a patient. 
Telemedicine information can be transmitted by telephone, faxes, 
videoteleconferencing (VTC), or personal computers using various forms 
of telecommunications including the Internet.
    The goals of telemedicine are to improve the efficiency of the 
delivery of health care, improve access, improve the quality of care, 
and reduce costs. The recipients of the benefits of these telemedicine 
efforts are the active duty forces, their dependents, and the retirees.
    Lessons Learned in Telemedicine.--The military has accrued 
experience in telemedicine both in the field and in the military 
treatment facilities. Some of the early uses of telemedicine included 
high-end videoteleconferencing (VTC) equipment with the use of high 
bandwidth. Often the equipment was very bulky, difficult to use by the 
average health care provider, very expensive, and difficult to 
implement in the day to day routine of a provider. The past several 
years have shown significant improvements in telemedicine technologies, 
such that VTC equipment can run at the desktop, is easier to use, is 
less expensive, and effective applications can be implemented without 
the necessity of the high bandwidth.
    Although real time video teleconferencing is sometimes necessary to 
make diagnoses, a great deal of telemedicine in the Army today is being 
done by store-and-forward technology. Store-and-forward is the capture 
of still images or video clips as digital files and transmission of 
these files. Transmission can be via the internet, telephone lines or 
by satellite. Relatively low transmission rates can be employed 
effectively with the store-and-forward approach. The store-and-forward 
approach allows for the use of easy to use equipment (PC and video 
camera) which is readily available at minimal cost. The use of this 
simple technology is illustrated in various places in the Army in our 
deployed units, such as in Bosnia, and in the fixed military 
facilities. Walter Reed Army Medical Center and Tripler Army Medical 
Center have used web based store-and-forward technology to perform 
teledermatology in a wide area network with considerable success and 
have produced improvements in health care delivery.
    The United States Army continues to be a leader in the deployment 
of operational telemedicine programs at fixed military treatment 
facilities. There are at least 54 operational telemedicine programs in 
our six regional Army medical commands. The majority of the 
telemedicine applications are associated with teleradiology, 
telepathology, teledermatology, and telepsychiatry. Telemedicine 
applications that fit well into the daily routine of a health care 
provider and produce an improvement in the healthcare delivery process 
will have great potential to be accepted by the provider. Teleradiology 
and telepathology are excellent examples. Teleradiology leverages the 
technology to improve access, to improve the turnaround time to make a 
diagnosis and thus improve quality and reduce cost. In Europe, the 
introduction of teleradiology reduced the average read time from two 
weeks to several days with an improvement in diagnosis. The Armed 
Forces Institute of Pathology has been conducting telepathology for the 
past several years. Last year pathologists there read 325 cases with 
average turnaround time of 24 hours from overseas and 4 hours within 
the United States.
    Home healthcare is being supported by telemedicine in the South 
East Regional Medical Command. This service is being provided to 
patients who have severe heart failure and lung disease. Telemedicine 
allows them to have easier and more effective interactions with their 
health care providers without traveling to the hospital. In our Great 
Plains Region, abnormal physiological monitor tracings of neonates in 
the intensive care unit in the Army Hospital at Ft. Hood (Darnall) are 
transmitted electronically to Brooke Army Medical Center. This 
capability ensures timely care and intervention for sick neonates.
    The AMEDD is also a leader in telemedicine research. The Personal 
Information Carrier (PIC) will enable medical data to be stored and 
transported with the patient. A soldier's medical history and 
predeployment medical status will be recorded on the PIC. Medical 
interventions in theater will be recorded on the PIC and will be 
available to other health care personnel when the soldier receives care 
at other locations. The information will be able to be read and written 
to by computer systems where the patient receives care and the data 
will be made available for medical surveillance and analysis. The AMEDD 
is working with the other services to develop the PIC and deploy it in 
the near future. The PIC will eventually be used to capture any of the 
data in the computerized medical record, to include digital images, 
plus information on occupational exposure and the location of the 
soldier.
    The AMEDD is also conducting research on the warfighter 
physiological status monitor, a potential subsystem of the Force 21 
Land Warrior. A lightweight, modular device (wrist mounted unit) with 
physiological sensors and processors will provide dynamic assessment of 
the soldier's medical status. Real time data about the soldier's level 
of fatigue, stress, and sleep deprivation will be captured. Immediate 
casualty notification upon detection of trauma, and incapacitation, 
will be transmitted to first responders. This capability will assist in 
the far-forward, first responder medic's triage of injured soldiers.
    The military has continued to be the leader in telemedicine and is 
working closely with the civilian health care organizations to share 
our knowledge and experience with them. We will continue to invest in 
the development and deployment of cost effective telemedicine 
capabilities.
                                tricare
    This morning I would like to provide you with the Army Medical 
Department's assessment of the TRICARE program. My overview will 
address how the TRICARE program supports the Army Medical Department's 
strategic goal of managing the health care given to our soldiers, their 
family members and our extended military alumni family. Through this 
overview you will receive an assessment of the progress occurring with 
the implementation of the TRICARE program, the challenges actively 
being worked, and the efforts ongoing to ensure the long-term success 
of the TRICARE program.
    As I present my comments please consider that the TRICARE program 
is a significant paradigm shift from how the Army Medical Department 
conducted business just a few years ago. For the TRICARE program to 
fully succeed every beneficiary must know how to access health care in 
this new managed care environment. Furthermore, every member of the 
Army Medical Department must understand their specific role so that 
cost effective quality care is provided at all time.
    As managed care continues to evolve in the private sector, we too 
are constantly working toward improving the Department of Defense 
managed care program, known as TRICARE. I anticipate we shall not see 
the full benefit of this program, both in terms of producing healthier 
military beneficiaries and generating further cost savings to our 
taxpayers, until this program is allowed to mature over the next 
several years.
    In 1994, an ambitious schedule was embarked on to stand up, nation 
wide, seven managed care support contracts in a span of four years. The 
Army Medical Department was given the honor of being the first Lead 
Agent to oversee the operation of a regional civilian managed care 
support contract. The first contract became operational in the delivery 
of health care services by March 1995. This occurred in the 
Northwestern United States. This first hand experience resulted in the 
development of over a hundred lessons learned, several of which were 
incorporated into the managed care support contracts that followed.
    Since the first contract, four separate managed care support 
contracts became operational within a two-year time frame. Again, the 
Army Medical Department, represented by three Lead Agents, is playing 
an integral role to the success of these contracts. The last two 
remaining contracts are scheduled to become operational in the Ohio 
Valley, the Northeast and the Mid Atlantic States in the near future, 
pending resolution of the ongoing protests. I anticipate that once 
these contracts are implemented across the nation, the understanding 
and acceptance of managed care principles by our military beneficiaries 
will improve.
    While the full impact of the TRICARE program is not yet realized, 
positive accomplishments are occurring in the Army Medical Department's 
military treatment facilities.
Health Promotion
    One such achievement is the emphasis the TRICARE program places on 
health promotion.
    The Army Medical Department is aggressively pushing real health 
promotion and preventive measures such as education, behavior changes, 
and early disease detection. The U.S. Army Center for Health Promotion 
and Preventive Medicine has developed a plan to implement a structured 
and consistent health promotion program, integrated with TRICARE, 
throughout the Medical Command.
    While investment in health promotion efforts are difficult to 
measure, five or ten years from now, there will be a payback in terms 
not only of resources saved, but more importantly, in terms of 
healthier patients who are more productive.
Utilization Management
    The TRICARE program also places added emphasis on Utilization 
Management. This is another area of improvement for the Army Medical 
Department. Utilization Management assists us in ensuring that the 
appropriate amount of required medical interventions are provided 
without sacrificing the quality of that care. As resources decline, we 
must strive to minimize the provision of unneeded or inappropriate 
medical services. Since 1994, we have accomplished decreases in both 
our admission and bed day rates. While continued improvement in this 
area is needed, these changes have allowed several of our facilities to 
redirect their freed up resources to other needed health care services.
    The focus on Utilization Management is becoming so wide spread that 
it has even reached areas in the Northeast that have not yet 
implemented the TRICARE program. The North Atlantic Regional Medical 
Command, which represents thirteen medical treatment facilities in the 
Mid Atlantic and Northeast, reported for fiscal year 1997 decreases in 
Bed Day and Disposition rates of 20 percent and 21 percent 
respectively. At the same time they moved out with numerous new 
initiatives in such areas as, demand management, disease management, 
and outpatient levels of care. Specific initiatives include new, Advice 
Nurse Services; Health Promotion and Wellness Centers; formal discharge 
planning programs; disease-specific patient education programs, to name 
a few.
    The efforts in Utilization Management allowed the military 
treatment facilities in the North Atlantic Regional Medical Command to 
either consolidate or close twenty-one unneeded patient care areas. 
This Regional Medical Command is now focusing its attention on ensuring 
all memorandums of agreement between the new managed care support 
contractor and the individual military treatment facilities compliment 
the utilization management efforts already ongoing.
Performance Measurement
    With the TRICARE Program came the need for a more structured 
approach to measure the performance of our military treatment 
facilities. To meet this need, the Office of the Assistant Secretary of 
Defense for Health Affairs developed the Military Health System 
Performance report card. This report card strives to mirror the Health 
Plan Employer Data and Information Set that is used by private sector 
employers to measure the performance of their commercial health plans. 
The Military Health System Performance report card is a standardized 
instrument, which examines five areas. These are access, quality, 
utilization, health behavior and health status. The Military Health 
System Performance report card results are derived from patient surveys 
and from automated data collection systems.
    The Military Health System Performance report card is a valuable 
tool that allows the Army Medical Department leadership to see how well 
our military treatment facilities are performing in meeting the needs 
of our beneficiary population. This standardized information is 
critical as it provides my commanders the ability to identify 
weaknesses that require corrective action. The outcome from these 
corrective actions is improvement in the delivery of health care to our 
beneficiaries.
    Recent surveys indicate that while there is gradual improvement 
across the Army Medical Department's military treatment facilities, 
continued work is still needed in specific areas. Customer 
satisfaction, in particular, is and will continue to be one of my 
priorities. It is important to provide quality care, which we do, but 
it is just as important that our customers perceive that they are 
receiving high-quality and compassionate care. While the TRICARE 
program has experienced some start-up glitches available survey data 
show it is working. Beneficiary satisfaction surveys show a large 
majority of customers are satisfied in those regions where the TRICARE 
program is already implemented. Department of Defense surveys show that 
almost 9 out of every 10 TRICARE enrollees will reenroll when the time 
comes. Despite this good news, there is much more work to do. While 
customer satisfaction with Army military treatment facilities improves, 
additional work must occur to raise the satisfaction levels for every 
beneficiary served.
Hospitality Training
    Another initiative under development is a plan to implement 
hospitality training throughout the Army Medical Command. The intent of 
this initiative is to improve the customer relation skills of all 
health care and administration staff throughout the Army Medical 
Department. This skill is critical due to the financial incentives 
inherent in enrollment based capitation funding that our military 
treatment facilities are operating under. Exceptional customer service 
will result in satisfied beneficiaries who will be more inclined to 
enroll in the TRICARE program at our military treatment facilities. 
Along with each enrollment come the funds to keep that ``customer'' 
healthy.
Access to Care
    With the TRICARE Program came, for the first time, system wide 
access standards to military health care. While these standards 
specifically apply to TRICARE Prime enrollees, all Army military 
treatment facilities are striving to meet these standards for every 
beneficiary they see.
    Access to military health care has historically been a problem area 
for the Army Medical Department. Beneficiary satisfaction surveys show 
that over 70 percent of those surveyed are satisfied with their access 
to appointments and appointment waiting time in our military treatment 
facilities. Still this means a sizable number of our beneficiaries are 
not satisfied with their level of access to care.
    To improve these access problems several Army military treatment 
facilities have completed or are pursuing restructuring initiatives. 
The goal of these initiatives is to improve their capability to receive 
primary care patients by increasing their primary care access portals. 
Darnall Army Community Hospital at Fort Hood, Texas, which historically 
receives low ratings in access, is one such example of a facility that 
restructured its primary care delivery system. We are now beginning to 
see positive results from these initiatives.
    The Army is also aggressively working to improve access to tertiary 
health care services.
TRICARE Provider Networks
    The TRICARE program has improved beneficiary access in another 
important way. With the downsizing of the direct care system our 
overall capabilities have diminished. Despite this fact, we are able to 
offer our TRICARE enrollees the full spectrum of health care covered 
under the TRICARE benefit. The reason we can provide this benefit is 
because of our managed care support contractors' provider networks. 
These provider networks augment the capabilities in our military 
treatment facilities and give our beneficiaries the access to care they 
need, when they need it.
    The leadership within our Lead Agents and military treatment 
facilities know the health care needs of their beneficiaries and their 
capabilities to meet that need within their direct care facilities. In 
cooperation with the respective managed care support contractors the 
demand for services that cannot be met within our military facilities 
is provided to them. They use this information to determine the size 
and composition of their provider networks.
TRICARE Challenges
    Despite the benefits the TRICARE program offers to our 
beneficiaries, there are still challenges that must be met and 
conquered. As I mentioned in my introduction, the TRICARE program is an 
evolving program that was implemented on a very aggressive timeline. 
Because of the speed with which the TRICARE program was implemented 
there are misunderstandings with the intent of the program and how it 
operates.
Program Education
    One of the most significant challenges the Army Medical Department 
faces is educating all our customers, both internal and external on the 
TRICARE program. Our customers need to understand this program was 
developed to retain their choice of benefit plan, whether it be TRICARE 
Prime, Extra, or Standard and to also minimize their out-of-pocket 
costs.
    Some see the TRICARE program simply as the erosion of their 
military health care benefits. Those who believe this fail to see the 
true goal of the program. These skeptics fail to realize the larger out 
of pocket costs our beneficiaries would now be experiencing if TRICARE 
never came into being.
    Under such a scenario, many would find themselves with limited or 
no access to our remaining military treatment facilities. Their only 
option would be for them to use the traditional indemnity plan, known 
as CHAMPUS. While this option gives them greater freedom of choice, 
that choice would come at a far greater out of pocket cost than offered 
under TRICARE Prime and would not allow for significant consumer 
advantages available under TRICARE PRIME such as enhanced access, 
health and wellness benefits, and professional medical oversight by a 
personal Primary Care Manager.
    Educating all customers of the benefits of the TRICARE program is 
paramount to its success. The education effort must be three pronged to 
be effective. Our educational efforts must focus on all beneficiaries, 
the Army leadership, and everyone working within the Army Medical 
Department.
    Helping beneficiaries understand how TRICARE changes their health-
care system is one of our priorities. The Army Medical Department is 
actively marketing TRICARE and working with Major Army Commands, as 
well as beneficiary organizations, to make sure that we are providing 
accurate information about TRICARE. We are incorporating TRICARE 
information classes into training school curriculum where appropriate. 
Videotapes, displays, pamphlets and briefings are also being presented.
    Our beneficiaries must understand that we aren't limiting their 
ability to access care, but expanding the choices available to them. If 
continuity of care and cost is paramount to them, then enrolling in 
TRICARE Prime in most cases is their best option. Those beneficiaries 
who want greater freedom of choice than TRICARE Prime, but still are 
somewhat concerned with costs, might be more satisfied with the TRICARE 
Extra option. If freedom of choice is their major determinant, 
regardless of the cost, then TRICARE Standard is the option they should 
choose.
    The Army leadership must continue to work with the Army Medical 
Department in getting the message out about the TRICARE program to all 
the troops, their families, and our retirees. Waiting until a 
beneficiary takes ill and needs medical attention to learn about the 
program is too late. That is like asking a Battalion Commander to go 
into battle without an operations order. Both situations are probably 
doomed to failure.
    Last, each and every individual, civilian and military, working in 
our military treatment facilities must fully understand the TRICARE 
program. These individuals are our ambassadors for the program. These 
individuals are closest to our patients and beneficiaries and can 
provide them with the needed advice to make an informed choice about 
which TRICARE option can best meet their specific healthcare needs.
    My staff is redoubling its efforts, in cooperation with the 
assistance of the Office of the Assistant Secretary of Defense, to 
ensure all our ``customers'' are well informed about the TRICARE 
program.
Command and Control of Managed Care Support Contractors
    The TRICARE program brings with it unique challenges in command and 
control of the managed care support contractors. Within the Army 
Medical Department, command and control remains strong, while the 
process with the managed care support contractor is less direct. 
Designated contract officers are the direct link to our managed care 
support contractors. To accomplish changes within the managed care 
support contracts my staff must diligently work through their 
respective Department of Defense Lead Agent. This situation can reduce 
the responsiveness of needed corrective actions.
    To offset this situation my staff and regional medical commands are 
developing closer ties with their respective lead agents to ensure 
issues requiring immediate action are taken without delay.
Enrollment
    Accounting for TRICARE Prime enrollments, to include active duty 
personnel, takes on added financial importance in future years. In 
fiscal year 1999, the Prime enrollment numbers reported in the Defense 
Eligibility Enrollment System will be used for the distribution of 
Direct Health Program funds to our medical treatment facilities on a 
capitated basis. Efforts are underway to ensure our automated systems 
accurately capture Prime enrollment numbers.
Financial Accountability
    With the TRICARE program came a more appropriate method of 
allocating funds to maintain the health of our beneficiaries. This new 
system is called enrollment-based capitation. The essence of this 
funding methodology mirrors the per member per month funding 
methodology prevalent in the private commercial sector. Just as the 
TRICARE program was a significant paradigm shift from our previous way 
of doing business, so is enrollment based capitation.
    Enrollment based capitation provides a set amount of funds based on 
the age and gender for each beneficiary who enrolls in TRICARE Prime at 
a military treatment facility. Regardless of the health care services 
the enrollee uses, with rare exceptions, no further reimbursement is 
provided to that military treatment facility. The focus of the medical 
staff is to keep the enrollee healthy and prevent the occurrence of 
long term and chronic conditions.
    Prior to enrollment based capitation, defense health program funds 
were allocated based on the workload generated at each military 
treatment facility. As more services were provided, more funds were 
allocated. Obviously, such a funding method provides little incentive 
to improve the health status of our beneficiaries.
    This year is the transition year for all military treatment 
facilities to convert over to enrollment based capitation. The 
Corporate Executive Information System will also provide key reports to 
our facilities so they can succeed in this environment. Enrollment 
Based Capitation training has also been provided to our staff.
    The new Ambulatory Data System also captures diagnosis and 
procedure information on outpatient visits. The capturing of this more 
detailed clinical information is critical for decision making and will 
also support our new costing methodology.
    While I am confident that this new funding methodology is 
necessary, I expect some future adjustments and refinements to occur as 
this funding methodology is fully implemented in fiscal year 1999.
The Future of TRICARE
    The future of TRICARE is bright, but not without further changes. 
As you are well aware, refinements to this program are occurring. The 
Medicare Subvention Demonstration will be tested over the next three 
years. We are also in the process of providing TRICARE Prime to those 
active duty service members who are assigned to geographically remote 
areas. Efforts are also ongoing to craft the next generation of 
performance based TRICARE managed care support contracts that focus 
heavily on improving beneficiary satisfaction. All these changes are 
aimed at improving the TRICARE program and making the TRICARE benefit 
universal to all eligible military beneficiaries.
Medicare Subvention
    We have a moral obligation to allow all military retirees who wish 
to stay in the military health system that option. The Medicare 
Subvention demonstration that was approved by Congress last August 
gives the Department of Defense the opportunity to offer the TRICARE 
benefit option to our military retirees under TRICARE Senior plan.
    The Medicare Subvention Demonstration allows beneficiaries age 65 
and older to participate in TRICARE Prime at selected sites. With this 
demonstration we are attempting to provide the services required by the 
Health Care Financing Administration for an At-Risk Health Maintenance 
Organization that is more cost effective than the private sector. If 
successful, the potential to expand the TRICARE Senior program to all 
military retirees will improve.
    Subject to the approval of our site applications from the Health 
Care Financing Administration, the Medicare Subvention Demonstration is 
projected to begin this summer. The Army Medical Department has four 
military treatment facilities participating in this demonstration. The 
four Army facilities are, Madigan Army Medical Center at Tacoma, 
Washington, Brooke Army Medical Center, San Antonio, Texas, Reynolds 
Army Community Hospital at Fort Sill, Oklahoma, and Evans Army 
Community Hospital at Colorado Spring, Colorado. Preparations are 
already underway to provide this expanded TRICARE benefit option to 
those military retirees selected to participate.
TRICARE Prime Remote
    The TRICARE program has not completely fulfilled its pledge of 
providing a uniform benefit to all eligible beneficiaries. Service 
members stationed in geographical separated units are not always 
afforded the full benefits of the TRICARE Prime benefit. The goal of 
the TRICARE Prime Remote initiative is to rectify this situation.
    The TRICARE Prime Remote option provides active duty service 
members and their families assigned to Geographic Separated Units 
access to TRICARE Prime through the regional TRICARE Managed Care 
Support--MCS--contractor network. The contractor assigns active duty 
service members, and their family members who choose to enroll, to 
civilian network primary care managers. Active duty service members and 
their family members are eligible for the TRICARE Prime Remote Program 
if they live and work greater than 50 miles from a military treatment 
facility.
    The difficulty in providing these service members the full TRICARE 
Prime benefit dealt with the need to ensure medical oversight for any 
care rendered to them and the funding stream to pay for their care. 
Adjustments have been made to realign the supplemental care funds to 
care for these soldiers to our managed care support contractors and the 
establishment of a medical management oversight operation is being 
implemented.
    Once fully operational, all service members and their family 
members will be afforded the opportunity to participate in the TRICARE 
Prime Remote option if they choose.
TRICARE 3.0
    As we speak, work is going on with the managed care support 
contracts for the year 2000. I am optimistic that many of the 
challenges identified with the first generation of contracts will be 
eliminated.
    First, this next generation of contracts will be performance based 
versus the prescriptive requirements that exist in our current 
contracts. By being performance based, contractors will have more 
flexibility to propose civilian best practices in their bids. This 
means our beneficiaries will be afforded in the next TRICARE contracts 
the most effective clinical and administrative processes known to date.
    I am extremely pleased with the heavy focus the TRICARE 3.0 
contract places on improving beneficiary satisfaction. Built in 
financial incentives will ensure future managed care support 
contractors strive at all times to improve the satisfaction of their 
customers. This will be measured by Department of Defense approved 
beneficiary satisfaction surveys.
    I am also optimistic that the new financial mechanisms planned for 
in the TRICARE 3.0 contracts will be fully integrated with the 
enrollment based capitation methodology that our military treatment 
facilities will be working under. I anticipate major improvements in 
the ability of our local commanders to accurately determine the impact 
of their healthcare resource decisions real time. Unfortunately with 
the existing managed care contracts the lag time to identify the 
financial impact of local health care decisions is problematic.
    I am confident that many of the shortcomings identified in the 
first managed care support contracts will be rectified. My staff will 
accomplish an extensive review of the TRICARE 3.0 requirements to 
ensure existing shortcomings with our existing contracts are 
eliminated.
    The world is constantly changing, and so is health care in our 
nation. The TRICARE program is part of the evolution of our military 
health system. As the Army and the Army Medical Department changes with 
the incorporation of TRICARE, we will continue to focus on our core 
value of managing the health of every eligible military beneficiary so 
they receive the right level of care at the right time and in the right 
place.
    I ask for your continued support of the TRICARE program as it 
offers us the best way to provide quality care to our beneficiaries. 
With TRICARE we can maintain our position as a world class system 
capable of continuing Army Medicine's proud tradition of ``Caring 
Beyond the Call of Duty.''
    army medical department cooperation with sister service medical 
                              departments
    The Army Medical Department has, and continues to, cooperate with 
the Air Force and Navy Medical Departments to leverage assets to 
conduct enhanced operations where possible. Sharing resources and 
delineating specific responsibilities among the services to eliminate 
redundancies and bolster efficient application of resources has been a 
key tool in our strategy to cope with reduced program funding. The 
Department of Defense has already initiation Service Executive Agents--
EA--for common functions which cross service lines. EA's have a Tri-
Service responsibility for very specific programs. Examples of EA's 
where the Army has the lead include but are not limited to: Armed Force 
Institute of Pathology; Armed Forces Medical Library; Clinical 
Executive Information Systems; and Armed Forces Epidemiology Board.
    Cooperation among the services has taken on many faces. Clinical, 
ancillary, and administrative services, as well as, personnel, 
facilities, and educational programs are among the areas where we are 
also reducing redundancies. This cooperation reaches wide across all 
three Services. There are several examples where the Service's 
synergistic efforts have produced a superior product:
  --A prime example of inter-service cooperation exists in Colorado 
        Springs. Through a combined executive council, Evans Army 
        Community Hospital, the 10th Medical Group (United States Air 
        Force Academy Hospital), and the 21st Medical Group (Peterson 
        Air Force Base Outpatient Clinic) have developed a seamless 
        healthcare delivery system. They instituted a number of 
        consolidations, shared services, and joint alliances covering 
        key healthcare disciplines among the three medical treatment 
        facilities.
  --A Tri-Service group representing Walson Air Force Medical Facility, 
        Patterson Army Health Clinic, and Navy Branch Medical Clinics 
        at Lakehurst, Earl, and Willow Grove developed a tentative plan 
        which serves as a consistent, consensual structure for the 
        Delaware Valley Primary Care System. This initiative is a right 
        step toward a consolidated, coordinated, and collaborative Tri-
        Service, multidisciplinary Managed Health Care Delivery System.
    At other locations, one service is the predominant provider of 
health care with sister Service assistance in very specific ways:
  --The 62nd Medical Group (USAF), McChord Air Force Base, serves as a 
        Primary Care Clinic of Madigan Army Medical Center. Through 
        this cooperative agreement, automated referral processes have 
        been standardized, redundancies eliminated and efficiencies 
        maximized.
  --The staff at Darnall Army Community Hospital at Fort Hood, Texas, 
        as in many other facilities, is augmented with Air Force staff. 
        At Darnall, Air Force physicians assigned to the facility to 
        perform plastic surgery and pulmonology. Additional 
        arrangements with Air Force physicians at Wilford Hall, Air 
        Force Medical Center, in San Antonio, Texas, allows vascular 
        and perinatology cases to be resolved more easily within the 
        Military Health Service.
  --Recognizing the Tri-Service nature of Tripler Army Medical Center, 
        the Commander has assigned a Navy Captain as the Deputy 
        Commander for Clinical Services. Several Navy and Air Force 
        physicians serve on Tripler's staff, with some serving in 
        clinical leadership roles.
    Another way the Army reduces redundancy is by eliminating the 
competition for market share for a particular service.
  --Walter Reed Army Medical Center has agreed not to provide 
        obstetrics and gynecology service. These patients are seen at 
        National Naval Medical Center. Similarly, National Naval 
        Medical Center does not offer adult inpatient psychiatric care. 
        Walter Reed provides this service in the National Capital 
        Region for all three service.
    Ancillary care, administrative services, and education are all 
areas that are currently being explored for more focused Tri-Service 
cooperation. Wherever you find sister Service facilities operating in 
close proximity you will invariably see cooperation in ancillary 
services. This includes expanding current contracts to include Tri-
Service beneficiaries to leverage volume discounts.
  --Madigan Army Medical Center has a commercial laboratory contract 
        which naval medical treatment facilities are now utilizing. 
        Thus, lowering the per unit cost per procedure.
  --Administrative services run the gamut from sharing tumor board 
        registry to utilizing one central appointment office to make 
        appointments for Tri-Service medical facilities within a 
        certain geographic region.
  --Within certain regions, Services share Graduate Medical Education 
        offices, while other regions simply offer other Services seats 
        in their residency programs.
    We have adopted an approach of cooperation as one that is fiscally 
sound and produces demonstrated efficiencies. Not addressed here is the 
myriad of ways that the Department of Defense shares resources with the 
Veterans Administration and the cooperation that exists with other 
state and local organizations.
                           good news stories
    Finally, I would like to leave you with just a few of the many 
vignettes across the Command that highlight the diversity and successes 
of Army Medical Department missions. Just last month an Ohio infant 
suffering from botulism recovered rapidly after receiving an antitoxin 
developed by the U.S. Army Medical Research Institute of Infectious 
Disease. According to officials at Children's Hospital in Columbus, the 
4 day old baby girl was admitted to the hospital and placed on a 
ventilator. Analysis of a stool sample confirmed the presence of 
botulinum toxin. On Friday, January 9th, the U.S. Army Medical Materiel 
and Development Activity received a call from the California Department 
of Health Services, Infant Botulism Research Prevention Program, 
inquiring about using an Army Investigational New Drug product to treat 
a suspected case of infant botulism in Ohio. The U.S. Army Medical 
Research Institute of Infectious Diseases medical monitor for the 
Army's emergency treatment protocol was contacted and quickly consulted 
with the attending physician at Children's Hospital. After notifying 
the Food and Drug Administration, the U.S. Army Medical Research 
Institute of Infectious Diseases arranged an overnight shipment of the 
Botulism Antitoxin. The first dose was administered at 1:00 p.m. 
Eastern Standard Time on Saturday. All regulatory procedures were 
followed. On Sunday, January 11th--about eight hours after the second 
dose--the infant showed the first clinical signs of improvement, 
beginning to move about and trying to breathe on her own. A couple of 
weeks ago the child was discharged from the hospital and on her way to 
recovery.
    This past fall, the American College of Surgeons reviewed and 
verified that Brooke Army Medical Center met its criteria as an Adult 
Level One Trauma Center. Subsequently, Brooke Army Medical Center was 
designated as an Adult Level One Trauma Center in the State of Texas 
trauma system. Brooke Army Medical Center is now the first and only 
designated Trauma Center in the Army Medical Department.
    Southeast Regional Medical Command's TRICARE Region Three has 
established a comprehensive, multi-level Breast Cancer Prevention, 
Detection, Education and Training Program. By using telecommunication 
technologies beneficiaries and providers across the Region have access 
to the latest information on breast cancer care--from their homes, 
their health care facility, the workplace and in the communities. A 
regional telecommunication network will be established, linking 
patients and providers throughout the region with the Breast Cancer 
Awareness and Solutions Center. Patients and providers can access the 
educational programs through interactive kiosks at the medical 
treatment facilities or through the World Wide Web via personal 
computers at the work site or in their homes.
    In June 1997, the Chief of Staff, U.S. European Command, LTG David 
L. Benton, III presented the U.S. Army Medical Materiel Center--Europe 
with the National Partnership for Reinventing Government Hammer Award. 
The Hammer Award is Vice President Al Gore's special recognition to 
teams who have made significant contributions in support of the 
President's National Performance Review principles. Those principles 
are: putting customers first, cutting red tape, empowering employees 
and getting back to basics. The award recognizes new standards of 
excellence achieved by teams helping to reinvent government. To win the 
award, U.S. Army Medical Materiel Center--Europe, reengineered itself 
and the medical logistics system in the U.S. European Command area of 
operations. Medical materiel inventories were reduced throughout the 
theater while order-ship times improved from weeks to days. The U.S. 
Army Medical Materiel Center--Europe was the first, and here to date, 
only Department of Defense organization in Europe to be so recognized.
    I would like to take a moment to describe a very innovative program 
called the AIM HI--Animals in the Military Helping Individuals--Service 
Dog Training Center established at Fort Knox, Kentucky. The first of 
its kind, this unique program teaches inmates of the Fort Knox Regional 
Corrections Facility to train select stray and donated animals to 
assist physically disabled Exceptional Family Members and Veterans. 
Through the combined efforts of the Army Medical Command, Veterinary 
Command, and Fort Knox, this is the only Center that provides service 
dogs for the military community. This program has several goals and 
yields various benefits. Service dogs provide greater independence for 
recipients by retrieving and carrying items, turning on and off lights, 
pulling wheelchairs, alerting to certain sounds--literally opening 
doors for our people in need of assistance. This program benefits all 
involved, patients receive the assistance they so desperately need, 
inmates learn a trade, stray animals are saved from euthanasia, and 
medical expenses are reduced. Currently, there are eight inmates and 
fifteen dogs in various stages of training development. The center 
plans to graduate ten service dogs every six months.
    The world is constantly changing, as the Army and the Army Medical 
Department changes too, we will continue to focus on our core values 
and functions. We will maintain our position as a world class system 
capable of continuing Army Medicine's proud tradition of ``Caring 
Beyond the Call of Duty.''
    Once again, I appreciate the opportunity to appear before the 
Committee and shall be happy to answer any questions you may have.
STATEMENT OF VICE ADM. HAROLD KOENIG, MEDICAL CORPS, 
            SURGEON GENERAL, U.S. NAVY
    Senator Stevens. Admiral.
    Admiral Koenig. Mr. Chairman, Senator Inouye, thank you for 
the opportunity to meet and speak with you this morning. 
General Roadman, General Blanck, and I work so closely 
together, that I will try and not repeat anything he already 
said.
    I would ask that my full testimony be made a part of the 
record.
    Senator Stevens. All of your statements have already been 
put in the record.
    Admiral Koenig. I only want to cover four points very 
quickly.

                               Readiness

    First of all, in Navy medicine we recognize that readiness 
is our primary mission. That is what we are here for and that 
is what we do. To be able to do this, we have to be able to 
recruit, train, and retain capable, talented, and dedicated 
people.
    We have learned, and we are progressing in the Navy, to 
totally integrate our Reserve and active components and treat 
them essentially as one. A good example of that is in June and 
July of this year the hospital ship U.S.N.S. Comfort will 
deploy to the Baltic region and at least 10 percent of that 
crew will be from the Reserve component and a significant 
number of Reserve personnel will backfill at the National Naval 
Medical Center [NNMC] Bethesda to continue services at that 
institution during that deployment. This I think will 
significantly increase the readiness of our people and 
demonstrate that we can operate in this fashion.

                              Telemedicine

    The second point I want to talk about is telemedicine. Over 
the last 3 years we have made tremendous strides in learning 
how to use this technology. I am extremely proud of our 
accomplishments, and at the urging of one of your staff 
members, we put together a 15-minute video that has been 
distributed to them. I hope you will have time to take a quick 
look at it. I think we have had some tremendous 
accomplishments.
    We have learned to bring this technology to our sailors and 
marines wherever they serve on board ships and in very remote 
locations. As you know, the U.S.S. George Washington is in the 
final days of returning from a 6-month deployment to the 
Persian Gulf. During that time we accomplished 60 electronic 
medical consultations. We processed nearly 900 digital 
radiologic procedures. The combination of these technologies 
resulted in avoiding 20 medevacs. We estimate the savings just 
for transportation of these 20 medevacs to be approximately 
$90,000. In addition, we think we have saved $50,000 in what 
would have been purchased medical services by treating patients 
aboard the ship that otherwise would have had to be evacuated, 
and we saved in excess of 300 man-days. The bottom line is what 
we saved in taking care of these people in place more than paid 
for all the hardware and all the communications costs.
    We are learning to use telemedicine in our local and remote 
shore-based facilities. I think one of the most unique uses of 
our new technology is some of our hospitals are now taking 
pictures of new babies and e-mailing them to the ships so their 
dads can see mom and baby and see that everything is OK.
    One of the most innovative uses I have seen is a couple of 
our hospitals have actually enabled people to refill 
prescriptions over the Internet. That is much easier than 
taking an empty pill bottle to a pharmacy and even easier than 
doing it over the telephone. It is really simple for them. We 
hope that in the near future some of our facilities will start 
enabling patients to make appointments over the Internet. That 
will really save a lot of time for them.

                                TRICARE

    The third area I want to talk about briefly is TRICARE. One 
of the things we have learned is that we have to be more than 
an expert, an advisor on TRICARE. We have to become ambassadors 
of TRICARE. We have to take TRICARE to the people. We have to 
listen to the people. The people will tell us what is wrong. 
They will tell us what the issues are. Then we can work the 
issues and reengineer TRICARE so it fits their needs.
    The major issues with which we have dealt during the last 
year have been issues of portability, how to take care of 
isolated sailors and marines and airmen, soldiers, who are in 
isolated areas away from military treatment facilities. I think 
we have made good progress on that.
    The issues of balanced billing have come under control.
    The modification of the enrollment process so people can 
immediately enroll on a continuous basis and even what we call 
split enrollment, which means if one family member is in one 
region and one is in another, they do not have to pay twice. We 
have worked all those issues out.
    We are now working to improve and simplify the educational 
materials.
    But if I was asked if there was one thing that we could do 
that would make TRICARE substantially better, I would say to 
you that it would be to allow us to automatically enroll active 
duty family members who live within the catchment area of a 
military treatment facility, rather than make them go through 
all the labor of trying to understand all these details.
    Senator Stevens. Say that again, will you?
    Admiral Koenig. Automatically enroll active duty family 
members who live within the catchment area. By that I mean 
those who live close to a military facility that can take care 
of them. Automatically enroll the active duty family members 
rather than make them go through all the labor of trying to 
sort through all the differences between TRICARE prime, TRICARE 
standard, TRICARE extra. The vast majority of our people want 
to come to us. We ought to offer them that opportunity without 
putting them through a long process.
    But if they want to do something else, they have the option 
to disenroll or allow them to stay. I would rather have TRICARE 
standard and pick my own doctor and go to my own physician. 
That would make it a lot simpler for a lot of our 
beneficiaries.
    The vast majority of the folks we deal with are very young. 
They have never had to seek health care on their own before. 
They have always been taken to it. We need to bring them into 
the system and then educate them as they grow into our system 
rather than try and make them learn all of this stuff right up 
front because sometimes they make horrible decisions. A 
horrible decision to me is not to elect TRICARE prime. The 18-
year-old Marine corporal with a 17-year-old wife and a baby--
the most viable economic option for that couple is TRICARE 
prime. If they elect TRICARE standard, they are going to be in 
economic chaos as soon as that baby gets sick the first time. 
That is why I think we need to work on that, and I will be 
happy to give you a lot more information on that. I know my 
colleagues all share this feeling.
    The other area in TRICARE has to do with what I consider 
the disenfranchisement of our over 65 beneficiary population. 
We have simply got to address that issue. We very badly need 
those patients in our system to train our people and those 
people count on us for health care. They count on us for their 
entire lives. Medicare subvention but that only reaches a very 
small portion of that entire population. In the Navy, we only 
have one site, San Diego. It is not up and running yet. It 
probably will not be for several more months. So, I see it as 
only a partial fix.

                Federal Employee Health Benefits Program

    We need to do more. There are a lot of options that are 
being talked about in this town. One of them is making people 
eligible for the Federal Employee Health Benefits Program 
[FEHBP]. I think we need to study that and study it hard, but 
we need to do it rather quickly. Putting it off for 3 or 4 
years is not going to help these World War II vets. A lot of 
them are not going to be around 3 or 4 years from now. We need 
to solve the senior problem now.
    One of the ways I think we could do this and do it well and 
do it quickly and for a lot less money would be to expand the 
pharmacy benefit, what we call our base realignment and closure 
[BRAC] mail order pharmacy benefit, to all of our seniors. With 
that, they will have Medicare A, Medicare B, and a reasonable 
pharmacy benefit. If you do the math on this, if we charge them 
$8 for a prescription, which is what we charge them today, and 
they are on five medicines chronically, it costs them 44 cents 
a day. That is four cigarettes. Most of our people can probably 
afford that.
    I think we need to look hard at that because we have a huge 
beneficiary population aging quickly and they need our help and 
they have been counting on it all their lives, and when they 
need it the most, it looks like it is not going to be there. I 
think that is a lot of the confusion that the Senator has 
identified during his visits. That anxiety is not just for 
those who are already over 65. It is for those of us who are 
approaching it. We see that coming too.

                         Women's health studies

    The last area I want to talk about just briefly with you is 
the area of women's health. In the Navy, we have created a 
women's health strategic planning group. When you ask for it, 
you get it. And, boy, have they come to me with issues. Right 
now I have 21 unfunded, badly needed studies that need to be 
done in the area of women's health. I am a pediatrician by 
training. One of the things I learned in pediatrics is that 
children are not little adults. They are different. Women are 
not little men. They are different.
    We need to do these studies. We are trying to incorporate 
women very rapidly in the Armed Forces of the United States. 
They represent nearly 15 percent of our total force right now, 
and we know precious little about what we really need to know 
to be able to incorporate them into our service. We simply 
cannot translate medical practices for men to women. They are 
different. So, we need to be able to do this research. As of 
today, there are no targeted funds for research in women's 
health in the Armed Forces. We need to get on with that.

                           prepared statement

    Finally, my retirement. Senator Inouye mentioned it. I will 
be retiring on June 30, 40 years to the day from when I came 
in.
    Thank you very much.
    [The statement follows:]
             Prepared Statement of Vice Adm. Harold Koenig
                              introduction
    Mr. Chairman, thank you for the opportunity to share Navy 
Medicine's 1997 accomplishments and plans for the future.
    This has been an exciting year in Navy Medicine. On August 6, 1997, 
Navy doctors announced a breakthrough in organ transplantation. CAPT 
Dave Harlan and LCDR Allan Kirk, from the Naval Medical Research 
Institute in Bethesda, Maryland, were the first to successfully 
demonstrate a new medical therapy that appears to prevent the rejection 
of mismatched transplanted organs. That same day Navy medical personnel 
in Guam responded to the tragic crash of Korean Air Lines flight 801 
which hit a hillside on approach to Guam International Airport with 254 
passengers and crew aboard. Medical personnel from Naval Hospital Guam, 
and personnel from Naval units throughout the island responded and 
played a key role in saving lives. Of the 32 survivors of this tragedy, 
19 were cared for in the Naval Hospital, many requiring intensive 
trauma care and emergency surgery.
    This single day exemplifies the essence of Navy Medicine; the 
talented, professional healthcare providers ready to forge the future 
of medicine while responding in a moment's notice when our nation 
calls.
    As I have said many times, Navy Medicine's primary mission is 
readiness. We meet our mission by ensuring our Sailors and Marines are 
fit and healthy. Navy Medicine, like civilian medicine, is making the 
transition from curative to preventive health care. As such, readiness 
means keeping our Sailors and Marines where they belong; healthy and on 
their jobs.
    Navy Medicine's reach extends to remote areas of the world, aboard 
ships and submarines and in the air. Our Sailors and Marines depend 
heavily on Navy Medicine to meet their health and fitness needs 
wherever their missions require them to serve. This past year medical 
personnel deployed to serve around the world, from Haiti with the 
United Nations peacekeeping force to South America assisting with drug 
interdiction operations. In addition, Navy medical personnel were in 
Guam, Southeast Asia, Saudi Arabia, Africa, and Indonesia, providing 
medical assistance, training, humanitarian relief, and health services 
in the furtherance of national interests. Our medical personnel also 
worked in unison with Air Force and Army medical personnel providing 
superb cross-service support. We continue to look for opportunities to 
increase Tri-Service programs.
    Navy Medicine's customer service focus is changing the culture of 
our system to one in which our products are judged by how well we 
satisfy our customers. I have made this a top priority in Navy 
Medicine. It's an ongoing effort, one we will continue to refine in the 
coming years.
    To help us better care for our customers, the men and women of Navy 
Medicine are developing innovative ways to keep our Sailors and Marines 
healthy, fit and on the job. We've had many successes in this area and 
as a result have made changes in the way we do business. These 
innovative changes are a result of Navy Medicine's focus on four goals: 
(1) taking health care to the deckplates; (2) moving information, not 
people; (3) making TRICARE work; and (4) re-engineering our business 
practices.
                  taking health care to the deckplates
    When I visit our men and women at Navy and Marine Corps bases 
around the world, I see many examples of health care at the deckplates. 
This means taking care of Sailors and Marines as close to their unit as 
possible so we can keep them on their jobs. It means providing care in 
mobile vans at pierside, in aviation squadrons, at base gyms, in 
barracks and in the operational field environment.
    I see Navy sports medicine specialists taking health care to the 
field, resulting in timely health care and injury prevention. At Marine 
Corps Base Camp Pendleton, the Naval Hospital created a Sports Medicine 
and Reconditioning Therapy, or SMART, clinic which is located right on 
site where Marine recruits are training. Recruits and staff alike 
applaud this arrangement because it saves recruits a 42-mile round trip 
to the base hospital and reduces lost training time. In addition, the 
SMART clinics have been very successful in reducing injuries and 
decreasing rehabilitation time. At Marine Corps Base Camp Lejeune, 
North Carolina, our Naval Hospital has established injury prevention 
and rehabilitation services at the base gym where providers work with 
Marines to ensure safe exercise protocols.
    Our Dental officers, too, are taking care directly to our Sailors 
and Marines onboard ships. Dental readiness is particularly important 
when ships are deploying because dental facilities are more limited at 
sea. To this end, we have set the goal for dental readiness of our 
active duty forces at 95 percent and ensure everyone onboard receive 
annual dental care, with special emphasis extended before deployments. 
The Dental center is living up to its slogan of ``Fit to bite, fit to 
fight.''
    Deployment of our Medical Corps specialists on aircraft carriers 
has proven extremely successful. Last year, at the request of the 
fleet, a clinical psychologist was deployed with the U.S.S. Kitty Hawk 
and a physical therapist with the U.S.S. Enterprise. Availability of 
professionals during the carriers' deployments demonstrated a 
substantial return on investment towards keeping Sailors and Marines on 
the ship and on the job. Additional deployments have confirmed the 
results and Navy Medicine manpower specialists are currently working 
with Pentagon officials to implement pre-deployment placement of 
clinical experts on all twelve aircraft carriers over the next four 
years.
    Coordinating medical care for our deployed Sailors and Marines 
requires concurrent efforts by multiple people. The staff at our Naval 
Station Branch Medical Clinic in San Diego, California have done just 
that. The clinic has a fleet liaison program to coordinate with the 61 
ships homeported in San Diego ensuring the crews' medical needs are 
met. Instead of waiting for the phone to ring, the fleet coordinator 
anticipates the needs of incoming ships' personnel. Medical personnel 
on deployed ships are contacted a month before their arrival in San 
Diego and met by the fleet coordinator upon arrival, with appropriate 
medical appointments already scheduled. Not only does this help keep 
our Sailors on the job, but our customers are much happier with this 
personalized service.
                      move information, not people
    Along with taking health care to the deckplates, Navy Medicine is 
using technology to move information, not people, as we meet our 
readiness mission. I was very gratified during my visits this year to 
such remote locations as Diego Garcia in the Indian Ocean and to 
Guantanamo Bay, Cuba to see our medical personnel using technology to 
store and transmit medical information. Over the years, we became 
pretty good at moving people to Medical Treatment Facilities. We 
utilize an extensive medevac system that is complex to use, expensive 
to operate and takes our Sailors and Marines away from their workplace. 
As we move forward in the information age, using technology to move 
information rather than people has become part of our day to day life.
    This effort has resulted in tremendous strides in learning ways to 
employ telemedicine and technology to our advantage. My favorite ``good 
news'' story concerns my specialty, Pediatrics. In Rota Spain, a two-
year old's complicated case of pneumonia was managed using telemedicine 
techniques. The pediatrician in Rota was able to ``electronically'' 
consult with specialists at National Naval Medical Center Bethesda, 
Maryland, to determine the best treatment plan for the patient. In 
addition to improved quality, the use of telemedicine prevented a 
costly stateside medevac for this patient and his family.
    Navy Medicine is also using technology to improve pharmacy 
services. At Naval Hospital Bremerton, Washington, a pharmacy 
technician, while revising the command's homepage, asked why couldn't 
they have a pharmacy refill request page on the Internet. He created 
one, and now their customers have an additional avenue to obtain 
pharmacy refills. Naval Hospital Sigonella, Sicily, is our second 
hospital to offer Internet refills, and we expect to offer this service 
at additional facilities in the next year.
    Navy Medicine is using training exercises to incorporate technology 
into the operational environment. Kernel Blitz 97 (KB97), held off the 
coast of southern California in June, is an example. The medical 
portion of KB97 was designed to evaluate training methods used to 
prepare for our wartime mission, improve medical readiness, get the 
hospital ship U.S.N.S. Mercy underway with the fleet, stand up a 
Reserve fleet hospital and test the augmentee manning of the amphibious 
ships.
    Data on Personal Information Carrier (PIC) was used by the U.S.N.S. 
Mercy, U.S.S. Tarawa, Fleet Hospital Operations Training Command, and 
the Surgical Unit ashore. PIC is the generic term used to describe any 
self-contained computer technology with personal data carried on an 
individual, resulting in all vital patient data being readily 
accessible to the medical team. During Kernel Blitz, a commercially 
available version of PIC, the Multi-technology Automated Reader Card 
(MARC), was used. The MARC contained patient information and algorithms 
for all casualty management, a record of clinical care, and required 
time for administering patient care treatment steps. The Military 
Health System (MHS) plans on deploying PIC technology to support active 
duty forces in the operational environment during fiscal year 1999.
    We even have an on-line mentor program, known as the ``Virtual 
Naval Hospital.'' The ``Virtual Naval Hospital'' is a digital health 
sciences library designed to provide naval health care providers access 
to current, authoritative medical information. It assists providers by 
providing information on about eighty of the most common medical 
problems at sea, common medical procedure descriptions, and the General 
Medical Officer Manual; thereby, improving quality of care. It also has 
a section for patients, where they can access information on first aid, 
consumer health products and twenty-five health topics on preventive 
medicine.
    Technology has been applied to innovations that are great morale 
boosters for our people. The Telemedicine system operates on the same 
protocols as the existing site televideo conferencing systems 
throughout the Navy. Then when the system is not being used for 
medicine, it is a Quality of Life enhancement for the crew to 
communicate with loved ones ashore. The Naval Hospital Naples, Italy, 
staff created a program where pictures of newborn babies are digitized 
and can be forwarded through the e-mail system to the baby's father at 
sea or grandparents in the United States. With our Naples-based 
families being so far from their loved ones, this is a great way to 
help them share news of the arrival with their loved ones back home. 
Some Navy ships also have used Video TeleConferencing (VTC) to connect 
with our hospitals, allowing mom to talk to dad and letting him see the 
``new arrival'' while he is deployed at sea.
    Our ships are benefiting from, and making good use of, 
telemedicine. The medical department of the aircraft carrier U.S.S. 
George Washington has teamed up with the Telemedicine Department of the 
National Naval Medical Center in Bethesda, Maryland, creating the most 
advanced treatment facility in the fleet. Telemedicine enhancements 
proved very effective during the ship's latest deployment. Utilizing 
technology once exclusive to a fixed Medical Treatment Facility, the 
George Washington performed 39 ``electronic'' consultations with 
stateside medical specialists; 200 digital radiology procedures; and 
prevented six medevacs, saving over $26,000.
    In the past, when faced with mental health issues at sea, the 
patient was often medevaced off the ship. During the first three weeks 
of the George Washington's deployment, medical staff performed five 
mental health exams using VTC. Shipboard medical staff transmitted the 
patient's mood, body language and response to questions to the 
hospital-based psychiatrist. Combining the VTC with the clinical 
history, the psychiatrists assessed the patient and recommended a 
course of treatment. Navy Medicine is working to make virtual mental 
health specialty care at sea a routine service.
    On another occasion, the George Washington needed a radiologist to 
monitor a live ultrasound study. The patient had typical symptoms of 
acute gallbladder disease, but the physician was having difficulty 
confirming the findings and requested a specialist's help. Through VTC, 
the radiologist offered a differential diagnosis and clarified the 
imaging artifacts.
    Needing an ophthalmologist, the George Washington again turned to 
telemedicine. They had a patient with an injured cornea complaining of 
vision loss upon waking. Within seven minutes of the original request, 
an ophthalmologist was examining the patient on the ship from over 
5,000 miles away via satellite. This turned out to be a two-fold 
success story. The patient stayed on the ship knowing that he had 
received the best possible care; and, an unnecessary medical evacuation 
was avoided. As a result of this innovative technology, the sailor was 
treated aboard ship and returned to duty within 48 hours of initial 
evaluation in sick call.
    Telemedicine is not only effective on board ship, but has direct 
applications at our shore-based regional and remote medical facilities. 
Our health care providers at Naval Medical Clinic Annapolis, Branch 
Medical Clinics at Arlington Annex; Dahlgren, Virginia; and, Sugar 
Grove, West Virginia have used telemedicine for assistance in 
expediting care in the National Capital Area. Remote locations such as 
Naval Hospital Rota, Spain and McMurdo Station, Antarctica have also 
utilized telemedicine services provided by the Telemedicine 
Consultation Center in Bethesda. Expediting care for a complicated case 
of bacterial pneumonia in a two year old child; routine healthcare in 
evaluating Naval Academy midshipmen for history of nasal and sinus 
pathology; consultative follow-up and treatment of new and pre-existing 
skin lesions and pathology in the oral cavity; as well as cardiology 
support to the Independent Duty Corpsman for urgent care management of 
chest pain have all been demonstrated this past year. Telemedicine's 
potential as a time saving device in the day to day operations of Navy 
Medicine is readily apparent; along with its expanding capability to 
improve the overall quality of care rendered to our beneficiaries in 
remote areas.
                          making tricare work
    Our third goal is ``making TRICARE work.'' Implementation of 
TRICARE is near completion, all contracts have been awarded and all 
regions are scheduled to be operational in the near future. With 
implementation complete, we will be able to meet our readiness mission 
while providing our beneficiaries choice, guaranteed access, and 
quality health care at the lowest out of pocket cost possible.
    TRICARE is a profound and fundamental change in the way we provide 
health care services and, as with any change, is unsettling for our 
beneficiaries. The Services are working together to address key 
concerns of our customers: portability; improving access to care for 
geographically separated units; solving balance billing concerns; and, 
claims processing in order to make the system more customer-focused and 
user friendly. To further reduce confusion, Active Duty Family Members, 
who live within an MTF's catchment area, should be automatically 
enrolled in TRICARE Prime, unless they choose another option.
    In addition, the Under Secretary of the Navy has appointed a task 
force headed by the Navy's Deputy Surgeon General to develop strategies 
for identifying educational techniques to simplify TRICARE and improve 
understanding. The task force is comprised of medical, line personnel 
and family members from the Navy and Marine Corps, who are actively 
exploring educational instruments, materials and methodologies for 
improving understanding of TRICARE.
    Navy Medicine sees TRICARE education as a continuum throughout an 
active duty member's career. We plan on developing separate briefs 
targeted to the recruits in Navy and Marine Corps boot camp, when an 
individual reports to the first duty station, upon getting married, and 
when a couple has their first child. In addition, Navy Medicine is 
developing an information card for our active duty members outlining 
the procedures to use when seeking medical care outside of their normal 
duty station. We are also investigating methods to telemarket TRICARE 
through the Internet, and recommending the development of a national 
TRICARE hotline number to provide universal access to TRICARE 
information.
    In July 1997, Navy Medicine initiated a TRICARE Customer Advocacy 
Demonstration Program. The intent of the project was to provide a 
location outside of the medical facility where beneficiaries could go 
to receive assistance in understanding TRICARE and problem solving. The 
base and medical facility commanding officers determined the actual 
location. Demonstration sites were opened in Bangor, Washington; Corpus 
Christi, Texas; Camp Pendleton, California; Jacksonville, Florida and 
Yuma, Arizona. Preliminary data demonstrates a very favorable customer 
response to this outreach effort. We are currently collecting data from 
the six-month demonstration project to evaluate possible expansion to 
other sites.
    Navy Medicine is also playing a leading role in the development of 
TRICARE Prime Remote. TRICARE Prime Remote will involve the provision 
of care through a network of civilian primary care managers to Active 
Duty Service Members and their families living 50 miles or 
approximately one hour of driving time from a comprehensive Military 
Medical Treatment Facility. As Executive Agent for this program, Navy 
Medicine will support the development of a management process to 
oversee the health care of all members participating in this 
initiative. We are pleased with the potential of this initiative and 
expect it to improve health care access, uniformity of care, and 
quality of life; reduce time traveling to an MTF; and, decrease out-of-
pocket expenses for our Service-members and their families.
    In this process of restructuring our health care system, we are 
ever mindful we must not disenfranchise our Medicare-eligible 
beneficiaries. They remain our most loyal customers in military 
medicine. DOD believes the military can provide Medicare-eligibles 
health care at a lower cost than commercial at-risk HMO's and expressed 
the need to transfer Medicare Trust fund dollars to DOD (Medicare 
subvention) during the past decade. Landmark legislation passed in 1997 
authorizes a 3-year demonstration of Medicare subvention. Titled 
TRICARE Senior, the demonstration project is authorized to be conducted 
at six military sites and will permit a specified number of our 
Medicare-eligibles to enroll in TRICARE Senior. Naval Medical Center, 
San Diego, California is the Navy's demonstration site. Following the 
MTF's application and acceptance into the Medicare program; a 
prescribed number of military retirees will be able to enroll into the 
TRICARE Senior Program. The target enrollment period is slated to begin 
this summer, with healthcare delivery beginning 60 days later. Navy 
Medicine is very excited about this new venture; and if successful, 
look forward to permanent legislation.
    We realize Medicare Subvention is only a partial fix to resolving 
the ``Broken Promise'' of lifetime care for our retirees. Over half of 
Medicare-eligibles do not live near an MTF and are not likely to enroll 
in TRICARE Senior. Retiree groups are urging other alternatives to 
Medicare subvention for our retirees 65 and over. Presently, the Center 
for Naval Analyses (CNA) is conducting a study to improve options for 
access to care in the Military Health System (MHS) for these 
beneficiaries. This study is focusing on the possibility of offering 
the Federal Employees Health Benefits Program (FEHBP) as an alternative 
for those 65 and over. The other part of the CNA study will evaluate 
the feasibility of expanding the mail order pharmacy program to all 
Medicare-eligible beneficiaries, vice the current policy of providing 
this benefit only for residents of Base Realignment and Closure 
Commission (BRAC) sites. We expect to have CNA's report later this 
year.
    The FEHBP option, known as FEHBP-65, is the most comprehensive and 
enthusiastically supported by the various retiree groups. Presently not 
available to the military, FEHBP is a collection of health plans 
offered to federal civilian employees and retirees. FEHBP is paid for 
through monthly premiums, with the federal government subsidizing up to 
72 percent of the premium. While we appreciate the merits of this 
system and its potential to ensure full health care coverage of our 
Medicare-eligible beneficiaries, Navy Medicine advocates the continued 
review and assessment of the cost and benefits of both FEHBP-65 and 
other alternatives to increase MTF access for our Medicare-eligibles.
            customer focused business process re-engineering
    Navy Medicine continues to improve readiness by re-engineering our 
business practices. We are continually looking for new ways to do an 
even better job of keeping our Sailors and Marines healthy and on the 
job.
    Recently the quality of Military Medicine has been called into 
question by various media reports. In response, Navy Medicine is 
working closely with the Office of the Assistant Secretary of Defense 
(Health Affairs) to reevaluate our system and processes. Be assured, 
Navy Medicine is strongly dedicated to providing the highest quality of 
care to all our beneficiaries and has taken specific actions aimed at 
refining and monitoring health care. We continue to participate in the 
Joint Commission on Accreditation of Healthcare Organizations 
accreditation process and are developing initiatives to improve our 
surgical procedures and clinical practices. Resolution of pending 
malpractice and adverse action cases with the National Practitioner 
Data Bank is aggressively being pursued. We are ensuring all Navy 
health care providers possess a valid unrestricted license. Navy 
providers with special Oklahoma licenses practice medicine under plans 
of supervision; none is practicing independently. To assist 
beneficiaries to make informed decisions on health care, a ``report 
card'' for each MTF is being created providing ``on line'' quality and 
consumer information; and, the feasibility of a shared decision making 
process between patients and providers regarding treatment plans and 
priorities is being studied. Finally, improved support to our providers 
is being enhanced through application of various automation tools and 
Internet services designed to produce the best possible outcome for all 
our patients.
    In today's environment of scarce resources, Navy Medicine is very 
involved in several initiatives to collaborate and consolidate assets 
with other Services. Within the National Capitol Region, the National 
Naval Medical Center, Walter Reed Army Medical Center and Malcolm Grow 
Air Force Base Hospital have created Tri-Service psychiatry, pediatric, 
neurosurgery, neurology, neonatal intensive care, obstetrics, and 
substance abuse units. Not only are patients from all three Services 
routinely admitted to these units, but the units are made up of Army, 
Navy and Air Force clinical staff. Top administrative roles are also 
taking on a Tri-Service flavor. The Executive Officer at Naval Hospital 
Charleston, South Carolina is an Air Force Officer, while the Deputy 
Commander at Tripler Army Medical Center in Hawaii is a Navy physician. 
The Interservice Training Review Organization continues to move forward 
with the consolidation of training programs to ensure maximum 
utilization of our training dollars. To date 33 programs are currently 
consolidated or under consideration for consolidation including 
Physician Assistant, BioMedical Repairman, Nuclear Medicine, 
Cardiopulmonary and Hemodialysis technology.
    Navy Medicine is an active member of the Joint Department of 
Defense (DOD)/Veterans Affairs (VA) Executive Council. This council is 
developing several initiatives designed to promote cost-effective use 
of federal health care resources by minimizing duplication and underuse 
while benefiting both VA and DOD. Navy Medicine currently has over 100 
facility-level Navy/VA agreements in effect including major medical and 
surgical services, laundry, blood, and laboratory services. Development 
of a DOD/VA formulary; joint development, assessment, insertion and use 
of telemedicine; and, integration of VA Networks and TRICARE Lead 
Agents offering more healthcare options to our beneficiaries are a few 
of the other exciting initiatives currently underway.
    Navy Medicine is strongly committed to maintaining a quality 
Graduate Medical Education (GME) program. Our training programs ensure 
Navy providers are exposed to clinical experiences required to become 
skilled practitioners. GME Tri-Service cooperation is becoming more of 
a factor in ensuring the success of these programs. All three Services 
are now required to fill GME slots available in the other Services 
before out-service training is authorized.
    Recruitment and retention of quality military physicians and 
dentists remains a priority. Within the physician community, surgical 
specialties continue to be the most difficult to recruit and retain and 
we currently have shortfalls in family practitioners, general and 
orthopedic surgeons. Physician specialty shortages are being addressed 
through the Financial Assistance Program which provides recruiting 
incentives for civilian physicians already trained in undermanned 
specialties and the Navy Active Duty Delay for Specialists program 
which allows graduating scholarship students to defer their active duty 
obligation until completion of their civilian residency. End strength 
shortfalls persist for our Navy dentists. In fiscal year 1998, 
legislation was passed to increase special pays for Dental Corps 
officers. These improvements, as well as increases in the number of 
Armed Forces Health Professions scholarships are expected to balance 
and stabilize the force structure of Navy Dentistry by fiscal year 
2000.
    To better meet the health care needs of our female Sailors, 
Marines, family members and retirees, Navy Medicine is taking some bold 
new steps in the area of women's health. As assignments for active duty 
women have expanded, so have the challenges and opportunities to re-
evaluate Navy Medicine initiatives ensuring women are able to access 
the care they need. We have created a Women's Health Strategic Planning 
Group as part of a demonstration project addressing active duty women's 
health issues, including family planning, pregnancy counseling, breast 
care, parenting issues, sexually transmitted diseases and other women's 
health concerns. We want to create a comfortable, supportive and 
private environment for active duty women that will enable them to 
express their health care needs and concerns.
    Our reengineering efforts are reaching all facets of Navy Medicine. 
The Navy's overseas research labs in Jakarta, Indonesia; Lima, Peru; 
and Cairo, Egypt, are vital to keeping our Sailors and Marines healthy 
when they visit foreign lands. Before our ships make foreign port 
visits or when they conduct military operational missions or exercise 
overseas, these labs ensure commands are fully aware of any potential 
health risks they will face not normally encountered within the United 
States. These labs also interact extensively with their host countries, 
fostering good will with the United States.
    Navy research labs occasionally play an important role outside 
their normal duties. When a suspicious package was discovered at B'Nai 
B'rith Headquarters in downtown Washington, D.C. this past April, 
scientists at the Naval Medical Research Institute (NMRI) in Bethesda, 
Maryland were called upon to assist the community. A letter 
accompanying the package claimed dangerous biological agents were 
present in the petri dish found inside the package. The FBI requested 
NMRI run tests on the dish and the gelatin-like substance also found in 
the package. Working through the weekend, NMRI personnel found no 
disease causing organisms, other than common environmental bacteria. 
Their hard work saved the day and the FBI's Assistant Director 
complimented the Navy for its prompt and efficient work in the 
incident.
                               conclusion
    In closing, I would like to reemphasize Navy Medicine's commitment 
to providing quality, cost effective health care to those entrusted to 
our care, be they in our hospitals, on foreign shores, at sea, or in 
harm's way. The beginning of the twenty-first century will continue to 
provide us new challenges and opportunities. Navy Medicine is 
responding to these challenges by emphasizing and building a state-of-
the-art health care system and ensuring that the health and fitness of 
our Navy-Marine Corps team remains at the highest level.
    On a more personal note, I will be retiring on June 30, 1998, 40 
years to the day I took the oath as a Midshipman at the Naval Academy. 
It has been an exciting, challenging forty years. I would like to thank 
you for your outstanding support of Navy Medicine over the years. It 
has been an honor to share Navy Medicine's successes with you.

    Senator Stevens. Thank you very much. Do not worry about 
that 65. Dan and I can tell you about that. [Laughter.]
    Senator Inouye. That is a long time ago. [Laughter.]
    Senator Stevens. That is what Senator Thurmond said the 
other day. Someone said, oh, to be 70 again. He said, what do 
you mean? Oh, to be 80 again. [Laughter.]
    General Roadman.
STATEMENT OF LT. GEN. CHARLES H. ROADMAN II, SURGEON 
            GENERAL, U.S. AIR FORCE

                           Air Force overview

    General Roadman. Mr. Chairman, Senator Inouye, thank you 
for having us here.
    I think if you listen to what Ron and Harold have talked 
about, it is really that we are trying to reshape our system as 
we find requirements to do business differently. You cannot get 
to a 1-percent increase in inflation vis-a-vis 7 unless you do 
the job differently.
    All of us are really approaching it in five categories. One 
is readiness, which is clearly our main business.
    The second is TRICARE and learning the techniques of how 
you get the best bang for the buck, for the dollars, and give 
great service, to look at the infrastructure that we currently 
have and draw the inefficiencies out of that, which, Mr. 
Chairman, you mentioned, while focusing on building healthy 
communities. Part of what we all worry about are some of the 
behaviors that we have in the first half of our life and then 
try to have the medics pull us out of the fire in the second 
half of our life. We need to get well into prevention, in order 
to be able to deliver the quality care that we need.
    I would like to address readiness first. We all see that 
there is a changing threat environment. The Air Force is 
currently working on and has fielded the first operational 
chemically hardened ATH, air transportable hospital. The entire 
program should be up, fully funded, and ready to go by 
September, the year 2000.
    As we talk about telemedicine, telemedicine is not just 
images and consults. It is also getting the right information 
to the right provider at the right time to be able to make 
decisions in individual cases as well as populations because 
our job is to have a fit fighting force ready to support combat 
arms.
    We are currently fielding now in a program called Desert 
Care, part of the DOD surveillance program, the ability to 
track symptoms and diagnoses real-time on web technology so 
that we can see what is occurring within our population. As a 
matter of fact, about 2 months ago within 1 day we diagnosed an 
outbreak of food-borne illness, salmonella, and were able to, 
within 1 day, then go back and track that to the food source 
rather than having it become rampant within the community. So, 
that is telemedicine as well. It is informationalization of the 
system.
    As the theater becomes more mobile, less in the world war 
III mindset, we also are looking at aeromedical evacuation and 
care in the air. Care in the air is the ability to transport 
more critical patients than we had previously transported. It 
requires retraining and repurchasing of equipment because the 
intervention in the air requires the ability to be able to make 
diagnoses in the air, and that is different from what we used 
to do. So, we are reshaping that airevac capability.
    We also are very well aware that, as we look at the end 
game, which looks more like a militia nation than a large 
standing force that we have had in the past, we recognize the 
requirement to put the Guard and Reserve on equal status with 
the active as we field a total force team. We have been very 
successful in a project called Mirror Force in trying to settle 
some of the cultural issues that really separate us and have 
separated us for years.
    Just last Monday we had the great opportunity to bid 
farewell to a Reserve unit that was actually going to Al Kharj 
replacing an active unit at an air transportable hospital. So, 
we are seeing that integration that is absolutely critical.
    As we talk about TRICARE, I think many people do not 
understand that TRICARE is a strategy. It is not just a 
benefits package. But as the Active Force becomes smaller, we 
have to be outsourcing and privatizing a lot of care that we 
did not do in the past. TRICARE is the DOD's approach to 
support the warfighters and their families.
    I would add to Harold's statement. Automatic enrollment is 
a critical issue, but I will tell you the annual reenrollment 
is another issue that forces people to jump through a hoop to 
maintain their care. So, the legislation probably needs to, as 
we work that text for you, add the reenrollment.
    I would like to foot-stomp the issue of the promise. I 
believe that we recruited and retained, ever since 1973 when we 
went to an All-Volunteer Force, based on the promise of health 
care for life. I see us backing away from that. I believe that 
we have a promise that we must step up to, and I also believe 
that the expansion of the national mail order pharmacy is the 
first step in doing that, as well as testing other 
alternatives.
    In addition to that, we are reshaping our health care 
delivery system with sharing agreements with folks like the VA. 
The Air Force currently has about 119 sharing agreements, and 
Senator Cleland is doing an evaluation of the interface between 
DOD and the VA. I was talking to Congressman Sonny Montgomery 
and he said one of the real positive things is how much we, as 
the three services, have already done in trying to get better 
synergy in Federal medicine. As a matter of fact, we have two 
joint ventures that are currently working. And, Mr. Chairman, 
as you know, Elmendorf Hospital will be opening in October of 
this year which is both joint Air Force and VA.
    In addition, in New Mexico we have got the Gerald Champion 
Hospital which is an alliance with a commercial venture, trying 
to look for synergy of how to do our business better.
    All of these are win-win propositions for the Government in 
our quest to be a steward for the dollar, for the local 
community, and for our patients.
    Recruiting, I think, is an issue. As Ron talked about, the 
Reserve issue for us is not a big problem. The only corps I am 
particularly concerned about is in the Dental Corps where we 
are having some retention and some recruitment problems. We are 
transferring HPSP scholarships to dentists as well as the 
bonuses that you all have supported in the past.
    As we look at the acquisition for most of our physicians, 
USUHS is a critical issue for us. It gives us a cadre of strong 
military physicians that stay with us for a long time, and it 
is not just physicians as we have the graduate school of 
nursing giving us a strong cadre of nursing skills as well.
    We, as well as the other services, are looking at 
developing initiatives to develop leaders. As you know, all of 
our flags are now no longer corps specific and so all 
competition for all flags is all corps.
    In order to do that, we have got to increase the 
experiential level of corps that previously have been at a 
disadvantage. As a matter of fact, over the past 2 years we 
have increased from 35 percent to 55 percent of nonphysicians 
as commanders. So, we are seeing that experiential level rise 
because you cannot go from the bedside or the chairside and 
directly into a large system leadership. It is a graduated 
phenomenon.

                           prepared statement

    As you recognize, the environment is changing at the speed 
of heat, and we have got to change our system along with it. We 
think that our past performance over the past 3 years has 
reflected that. We are looking forward to a bright future and 
we thank you for all your continued support in the past and 
what you are doing in the future. Thank you.
    [The statement follows:]
          Prepared Statement of Lt. Gen. Charles H. Roadman II
    Mister Chairman and members of the committee, thank you for this 
opportunity to address the goals and accomplishments of the Air Force 
Medical Service (AFMS) in realizing our vision for the future. We 
achieved significant progress this year in our strategic plan to 
enhance high quality of life standards for the men and women of the Air 
Force, their families, and retired members. We use the Parthenon to 
illustrate our strategy, which is based on four pillars: medical 
readiness, deploying TRICARE, rightsizing, and building healthy 
communities, with customer service as the capstone.
                    reengineering medical readiness
    This past year has been a banner year for our primary mission, 
medical readiness, as we continued to reengineer our major programs. 
Reengineering goals include ensuring rapid response to support theater 
commanders, institutionalizing evacuation of the stabilized casualty, 
and aggressively enhancing Total Force partnership. We've made dramatic 
strides in achieving these goals under the medical readiness pillar.
    The AFMS introduced new medical technologies and strategies to 
maintain a high level of readiness with a smaller, more mobile medical 
``footprint.'' For example, the old contingency hospitals, designed for 
large-scale conflicts during the Cold War era, were large, costly and 
immobile. In July 1997, active, Guard and Reserve personnel worked 
together to reengineer the contingency hospital into the new Air Force 
theater hospital. Because the theater hospital is based on the 
modularly deployable air transportable hospital (ATH), it is more 
responsive to theater commanders' needs for both flexibility and larger 
inpatient facilities.
    Contingency support for theater commanders.--Air Force medics 
provided support to contingency and humanitarian operations this year 
in locations such as Southwest Asia, Croatia, Africa, Central and South 
America, and the Pacific Rim. Highlights included manning our prototype 
chemically hardened ATH at Prince Sultan Air Base, Saudi Arabia, and a 
10-bed ATH in support of U.S. humanitarian operations in Haiti.
    In addition, the AFMS provided crucial force protection services to 
deployed troops, such as stress counseling before, during and after 
deployments, and epidemiological surveillance and education in-theater 
to prevent disease. Certainly, immunizations are an important part of 
our epidemiology program. As such, we support the DOD initiative to 
immunize our airmen against anthrax, a highly lethal disease. We know 
that our deployed troops face a validated biological warfare threat of 
anthrax and are confident in the safe and effective FDA-approved 
vaccination. In addition, the Air Force anthrax vaccination 
implementation plan ensures accurate tracking of all personnel who 
receive the vaccine. Our force protection measures also mandate a 
response to chemical warfare threats. We anticipate initial operating 
capability of our tested and fully functional chemically hardened ATH 
(CHATH) in August 1998, with full operational capability of all CHATH's 
scheduled for September 2000.
    Institutionalizing evacuation of the stabilized casualty.--
Throughout contingency and humanitarian operations, Air Force 
aeromedical evacuation (AE) flight crews and critical care air 
transport teams (CCATT's) provided in-flight care to quickly move 
stable and stabilized patients. Moving stabilized patients, defined as 
airway-secured, hemorrhage-controlled, shock-controlled, and fracture-
stabilized, represents a change in DOD doctrine to support the reduced 
forward medical footprint. The CCATT, which adds an intensive care 
capability to routine medical flight crews, provides high quality 
enroute care without draining staff and equipment from theater 
commanders. CCATT's are operating out of Wilford Hall Medical Center in 
San Antonio, Texas, and Keesler Medical Center in Biloxi, Miss. With 
the initiation of a certified CCATT course in October 1997, the Air 
Force began training 106 teams per year at Brooks Air Force Base in San 
Antonio.
    In further support of the Air Force's unique ``care in the air'' 
mission, we continue to pursue the insertion of telemedicine into the 
aeromedical environment. We completed the Phase I Proof of Concept 
Demonstration in September 1997, having flown nine missions within U.S. 
Air Forces, Europe, on three aircraft--the C-9, C-141 and C-130--for a 
total of 70.6 hours. In this demonstration, we used commercial off-the-
shelf computer systems and applications in addition to existing 
airframe communication systems, and were able to validate use of e-mail 
and ``chat'' to and from the aircraft to ground AE command and control 
elements. We are now working toward our Phase II Proof of Concept 
Demonstration in the Pacific Air Forces theater.
    Ensuring Total Force partnership.--The AFMS goal to change and 
sustain the Total Force culture was formally established with the 
implementation of the Mirror Force strategy. The Mirror Force Strategic 
Plan provides a blueprint to organize, train, and equip our medics as 
one seamless team, with no distinction between active duty, Guard, or 
Reserve. The Mirror Force concept has been incorporated into all 
aspects of readiness efforts. All integrated product teams, 
conferences, training activities, operating instructions, and 
deployable medical teams now stress active and reserve component 
participation.
    As more operational missions transfer to the Guard and Reserve in 
the future, Mirror Force will ensure one standard: the AFMS standard. 
To prepare for these combat support missions, reserve component medical 
forces will be taking on some traditionally active duty missions in the 
near future. For example, beginning this summer, the Air Force Reserve 
Command and Air National Guard will deploy ATH units to support 
Operation Southern Watch at Prince Sultan Air Base, Saudi Arabia. The 
Eskan Village Clinic in Riyadh will see similar rotations by reserve 
component units in the summer of 1999. Medical readiness personnel from 
the Air Force Reserve Command and Air National Guard will serve 
rotations in the Joint Task Force-Southwest Asia theater planner 
position. These deployments clearly demonstrate Mirror Force in action.
    What we witnessed in 1997 was a major transition from the past. By 
the Year 2000, we will have a reengineered, deployable medical force 
that is more flexible and modular to support theater commanders and is 
capable of supporting evacuation of the stabilized casualty.
           deploying tricare: better access and more choices
    The ``Deploying TRICARE'' pillar incorporates several key aspects 
of our strategy: population-based health management, marketing, 
partnership with the civilian health care sector, and TRICARE 
infrastructure. Much of our progress can be described in terms of these 
facets.
    Population-Based Health Management.--TRICARE is designed to ensure 
patients receive the appropriate care and procedures they require. By 
deploying TRICARE as part of an overall strategy, the AFMS is able to 
optimize quality, cost, and access to care, while offering 
beneficiaries a choice of health care plan options.
    Enrollment in TRICARE Prime has been strong and well ahead of 
predictions. In fact, as of October 1997, DOD had more than 2.7 million 
Prime enrollees, to include more than 800,000 at Air Force MTF's. 
TRICARE Prime is available in nine health services regions; contracts 
have been awarded in the remaining three regions where Prime will be 
available by June 1998. A survey last year of TRICARE Prime enrollees 
found that 80 percent rated their care good to excellent and nine out 
of 10 would reenroll. Customer service for our beneficiaries is further 
enhanced through TRICARE Service Centers, Health Care Information 
Lines, and self-help information.
    As primary care managers and other members of the health care team 
work to coordinate care for our beneficiaries, we've increased 
efficiencies to control costs and improve access to primary care. We 
realigned services that were less efficient in terms of scarce dollars, 
personnel, and facilities. Inpatient services used well below capacity 
are being closed or consolidated with other services. Careful 
evaluation of emergency services resulted in closures of those used for 
mostly non-urgent care. This shifts more resources to provide routine 
and non-urgent acute care in more appropriate settings such as primary 
care clinics, promoting continuity of care for our patients. In 
addition, the limited use of emergency rooms (ER) for true emergencies 
results in a loss of skills proficiency for the ER staff. Therefore, 
local civilian ER's provide an equal or better standard of care to our 
patients. In the long term, our greatest efficiency will be realized 
from our increased emphasis on preventive services, such as health and 
wellness centers. Disease prevention saves dollars, but more 
importantly, greatly enhances the quality of life for our military 
families.
    Marketing.--The AFMS has aggressively communicated our strategy and 
vision to our military beneficiaries, Air Force leadership, and members 
of Congress. Briefings and written materials help everyone better 
understand their health plan and how best to use health services to 
meet their needs. However, continued emphasis is necessary; thus 
ongoing communication efforts are taking place as TRICARE evolves 
throughout the 12 regions.
    Partnership With the Civilian Sector.--To better serve our 
patients, we continue to forge stronger partnerships with the civilian 
health care sector. The DOD Managed Care Support Contracts bring 
services that optimize and complement those available in our military 
facilities to ensure beneficiaries can access required services through 
quality provider networks. DOD is working with contractors to tackle 
concerns that have caused beneficiaries or providers to be dissatisfied 
with the program, to include problems in claims processing. Data on how 
the contractors are doing in terms of timely, accurate processing of 
claims show continual improvement.
    TRICARE Infrastructure.--TRICARE infrastructure, such as policies 
and contracts, is improving our care to beneficiaries as well. We 
implemented fixes to many problems our beneficiaries and network 
providers helped identify. Problems such as balance billing of 
beneficiaries, multiple copayments for a single episode of care, and 
the portability of Prime enrollment will all be resolved by late Spring 
1998.
    Finally, thanks to your support, there is now legislation 
authorizing a demonstration project to give Medicare-eligible 
beneficiaries the same access to MTF's as retired TRICARE Prime 
enrollees. The Medicare demonstration will be at six sites in the 
continental United States and will last for three years. While this is 
an important first step in providing seamless care to all our 
beneficiaries, we do have two concerns.
    One concern is that a limited number of Medicare-eligible 
beneficiaries will be allowed to enroll in the initial demonstration 
project, creating some dissatisfaction among others who will not be 
able to enroll at that time. However, the value of a demonstration 
project is that it offers a trial period to learn lessons and improve 
the process before expanding the program. A second concern is that, 
following the announcement in February of the actual demonstration 
sites, we still require at least six months to implement the program 
because of extensive regulations, particularly those of the Health Care 
Financing Administration. Recognizing and planning for these concerns, 
the AFMS has taken a lead role in implementing this demonstration 
project, and we are committed to its success. In addition, we are 
working with our DOD counterparts to explore other alternatives to 
improve access to care for Medicare-eligibles.
             rightsizing our medical facilities and forces
    With rising health care costs and reductions in the DOD budget, the 
military must maintain a health care system capable of providing high 
quality medical care within the constraints of a capitated budget. 
Therefore, the objective of our rightsizing pillar is to develop an 
overarching strategy that will optimize the overall force size while it 
ensures we have the right number of people with the right skills at the 
right place and time. Further, it makes sense to rightsize as we evolve 
from an inpatient to an outpatient environment.
    Model using best business practices.--To make the transition to a 
rightsized environment, we applied the DOD Sizing Model. This model was 
created as a joint effort by the Army, Navy, and Air Force to establish 
the optimum baseline for medical authorizations, so the services could 
still execute readiness and day-to-day overseas missions.
    In addition to this baseline, the AFMS developed several 
assumptions instrumental in deriving the current target being 
programmed into the budget. The first assumption is readiness is our 
first priority. The second assumption is quality health care for our 
beneficiaries must continue, with the goal of ensuring ``blue suit'' 
(Air Force) care for blue suiters and their families. Third, we must 
also provide a mechanism for quality graduate medical education. 
Finally, it was noted that health care is a process, not a place; care 
delivered outside the MTF is acceptable when based upon appropriate 
quality, cost and service considerations.
    The rightsizing strategy, although initially directed from senior 
leadership, has been validated through a comprehensive strategic 
planning process, essentially a bottom-up review and analysis. The end 
product is a rightsizing strategy that will change how care is 
delivered in the AFMS. Programmed changes will result in fewer medical 
centers and hospitals. Inefficient small hospitals will convert to 
clinics as we move to a prevention-based system. Inpatient care at 
these clinics will shift to the civilian community.
    The changes in facilities and reduction of inpatient beds have also 
prompted us to decrease our active duty and civilian personnel, 
``rightsizing'' the force. We focused on making sure the decreases are 
made in the appropriate medical specialties while still meeting mission 
and peacetime requirements, and ensuring personnel policies are as 
humane as possible. Military treatment facilities will determine the 
specialty mix required for their patient population.
    Two major strategies, the Integrated Forecast Board (IFB) and the 
Joint Services Graduate Medical Education Selection Board, were 
initiated to help ensure these changes are efficient, timely, and 
maintain a quality force to meet mission requirements. The IFB 
represents a major change in the way the AFMS projects training for the 
future. In the past, training requirements were identified by 
individual Corps without the benefit of integrated oversight and 
management. Due to shrinking resources, the Air Force sought to enhance 
its efficiency in forecasting medical training needs. Hence, the 
purpose and design of the IFB is to project Air Force medical personnel 
training requirements along product lines in support of changing 
mission requirements. It will determine Air Force needs for trained 
specialists in the future and then identify and prioritize training 
activities and programs that will prepare selected officers to meet 
those needs. The IFB ascertains training requirements for all 
specialties and corps, and considers various types of education 
programs including clinical residencies, fellowships, advanced academic 
degrees and non-clinical fellowships with both Air Force headquarters 
elements and private industry.
    One of the important elements of the IFB process is to identify 
needs for specialty trained physicians. The IFB is conducted in the 
spring each year, and is followed by the annual Graduate Medical 
Education (GME) Selection Board. The GME selection board chooses 
physicians for residency and fellowship training programs beginning the 
following year. Prior to 1993, the AFMS conducted its GME selection 
boards entirely by itself. Beginning in 1993, the Army, Navy, and Air 
Force began conducting joint GME selection boards. Each year, the joint 
selection board is planned, coordinated, and conducted by one of the 
military services acting as executive agent. The years since 1993 have 
shown increasing cooperation among the military services in sharing 
training capabilities. In 1997, with the Army acting as executive 
agent, approximately 100 students were selected for training in 
programs conducted by other services. The Air Force will act as the 
lead agent in 1998, and we expect to continue this selection method.
    As we forecast our personnel needs in a rightsized Air Force, we 
must consider the impact on our enlisted forces. For example, the issue 
of how to maintain skills proficiency when our facilities are 
downsizing may be critical in the future, particularly as unlicensed 
enlisted medics are unable to take those skills ``downtown.''
    One of the greatest challenges we face as we make these transitions 
is to effectively communicate our rightsizing efforts to our customers. 
Briefings and written materials are provided to the MTF's to help 
answer concerns and dispel confusion, and Congress is kept informed 
through several forums.
    The process of rightsizing our force is expected to continue 
through fiscal year 2006. It integrates both planning and programming 
efforts and will focus on innovative approaches to health care delivery 
that are cost-effective, provide continuity of care for our patients, 
and solidify prevention strategies.
       building healthy communities--intervention and prevention
    The global mission of the Air Force requires airmen who are fit, 
healthy and ready to deploy on a moment's notice. The AFMS strategic 
pillar, building healthy communities was designed to meet that demand 
as well as deliver top-quality health services for the entire Air Force 
community.
    The building blocks of our ``building healthy communities'' pillar 
include: an enterprise focus that ensures healthy, safe, ecologically 
sound work and community environments; prevention-oriented health 
service delivery system; force enhancement initiatives; and decision-
making based on factual data analysis.
    Fact-based initiatives.--To build healthy life styles and do it in 
the most cost-effective manner, we are investing in capabilities that 
promote prevention and intervention. Put Prevention Into Practice 
(PPIP) is a strategy developed by the U.S. Department of Health and 
Human Services, which the Air Force has implemented to organize and 
guide the preventive medicine efforts of our medical providers.
    The first step in PPIP is the Health Enrollment Assessment Review 
(HEAR), which is conducted with each patient as they enroll in TRICARE 
Prime, and then is updated annually. Data from the HEAR helps us to 
identify the health status and prevention needs of our patients. This 
data is then reviewed and discussed between the provider and patient as 
a basis for clinical management and is used by major commands and the 
Air Staff to assure that resources are available to care for the 
populations assigned.
    The second element of PPIP is the Preventive Health Assessment 
(PHA), which last year replaced the periodic physical examination 
program for all active duty members. The PHA is a four-stage process 
that includes a prevention-oriented clinical screening, occupational 
examination, screening of military-unique medical requirements, and 
counseling. The PHA will help us ensure the highest rates of mission 
and mobility readiness by providing feedback to commanders on the 
health of their troops.
    Downsizing and increased operations tempo continue to challenge us, 
and we are responding with a variety of force enhancement initiatives, 
such as tobacco cessation classes and individual fitness prescriptions. 
To support these programs, we are establishing Health and Wellness 
Centers (HAWC's) at every Air Force installation. We now have HAWC's on 
53 bases and installation fitness program administrators to help 
members improve their fitness at 70 bases. Our HAWC's provide ``one-
stop shopping'' for health promotion and fitness assessment. These 
efforts are paying off, as we are beginning to see decreases in smoking 
and increases in fitness rates in our active duty force.
    Another key aspect of building healthy communities is our 
occupational health program. Our state-of-the-art program provides for 
the anticipation, recognition, evaluation and control of physical, 
chemical and biological hazards in all Air Force workplaces. Our 
expertise has a high return on investment in terms of decreased lost 
time, reduced compensation, improved performance and greater 
productivity. Success depends on dedicated teamwork within the medical 
service and with many other segments of the Air Force.
    Air Force leadership is concerned about the ability of its members 
to cope with increasing levels of stress in the face of significant 
increases in operations tempo and force downsizing. As a result, the 
Air Force established an integrated product team (IPT) to evaluate 
suicides among active duty members and develop strategies for suicide 
prevention and intervention.
    The IPT identified numerous factors as leading causes of suicide 
service-wide. Chief among them were relationship difficulties, members 
facing adverse actions viewed as ``career ending,'' financial 
difficulties, substance abuse, and the perception that seeking help 
would have a negative impact on the individual's career. After 
evaluating this information, the team called in consultants from both 
the Air Force and public sector to develop a comprehensive approach to 
suicide prevention.
    Since the inception of the suicide prevention IPT, the suicide rate 
for active duty members has decreased by more than 30 percent. This has 
been largely due to strong senior leadership, awareness training for 
all Air Force members, training at all levels of professional military 
education, and the development of critical incident stress management 
teams at every installation. The bottom line is that successful suicide 
prevention depends on self-aid and buddy care. Everyone must lead the 
culture shift in the way prevention services are delivered and remove 
the stigmata of seeking help. I'm proud to say that a civilian 
consultant hired by DOD to evaluate the military services' suicide 
prevention programs praised the Air Force's program as one that is ``as 
advanced and enlightened as any I have heard of.''
    The Air Force established policies providing limited 
confidentiality protection to service members charged under the Uniform 
Code of Military Justice (UCMJ) and is seeking ways to broaden the 
coverage. We also greatly expanded the proactive role of mental health 
service providers. Various helping agencies in the Air Force--such as 
family services, chaplains, mental health services, substance abuse, 
and health and wellness centers--now work together to provide 
comprehensive prevention services that enhance both individual and 
organizational resilience.
    Base helping agencies are now working closely together under an 
integrated delivery system, or IDS. The new system is designed to link 
base helping agencies to address risk factors, reduce stress and 
improve the coping skills and general well-being of individuals and 
families in the Air Force community. Wing commanders received guidance 
on implementing this system for their units last fall. Commanders at 
all levels can now work closely with the various agencies to offer a 
more comprehensive range of prevention services, increase the 
protective factors and decrease the behavioral risk factors in the 
community.
    Family Advocacy is among the agencies that have shifted their focus 
from intervention to prevention. Professional family advocacy outreach 
managers at every base are providing educational and training programs, 
such as courses in parenting and couples communications.
    In summary, base agencies now work closely with each other, helping 
to integrate those services which provide direct assistance to members 
and their families. As these agencies join ranks, officials believe 
potential problems can be identified earlier and efforts taken more 
quickly to prevent tragic trends.
                   quality and customer satisfaction
    Customer satisfaction with quality care is the capstone of the AFMS 
strategic plan. The AFMS has a long tradition of providing quality 
care, but we can't rest on past success. Air Force medics rigorously 
seek out and submit to external and internal quality assurance reviews, 
many by the same professional organizations that measure the civilian 
medical industry. Regardless of the measure, Air Force medics 
consistently score as well as, and in many cases better than their 
civilian counterparts. In fact, Joint Commission on Accreditation of 
Healthcare Organizations survey scores indicate Air Force hospitals 
have outscored civilian hospitals nationwide by 5 percent during the 
past six years. In addition, 17 percent of Air Force hospitals have 
received ``accreditation with commendation,'' JCAHO's highest 
appraisal, for their outstanding services, quality patient education, 
and staff training programs. Only 12 percent of civilian hospitals have 
received this same appraisal. As an example, during a recent JCAHO 
inspection of Malcolm Grow Medical Center, Andrews AFB, MD, the 
surveyors commented: ``Your medical staff is excellent * * * better 
than any civilian hospital I've ever surveyed;'' and ``On a scale of 
one to 10, with 10 being the highest * * * patients who continually 
stopped me gave you a 10 plus * * *.''
    We're also very proud of the fact that the number of Air Force 
physicians who are board-certified compares favorably with the number 
in the civilian community (67 percent vs. 66 percent) and that we 
experience a much lower rate of malpractice claims than the civilian 
community (seven claims per 100 physicians per year for the Air Force 
vs. 14 claims per 100 physicians per year in the civilian sector).
    High marks in clinical performance are only part of the picture. 
The AFMS also measures itself by how satisfied customers are with the 
care they receive. Recent survey results show that our scores are 
higher in customer satisfaction than those of our civilian counterparts 
in terms of satisfaction with access, interpersonal relationships, and 
quality.
    As we journey toward the next millennium, our ability to support 
the Air Force and DOD depends upon our progress in each of the four 
pillars: medical readiness, deploying TRICARE, rightsizing, and 
building healthy communities, with a capstone of customer satisfaction. 
We're confident in our ability to maintain an outstanding level of 
service for the Air Force and our country for many years to come, and 
appreciate the continued support of our beneficiaries, military 
leadership, our President and the Congress.

                         Women's health studies

    Senator Stevens. I apologize. There has been a crisis come 
up about a situation developing tomorrow and I am still trying 
to solve it.
    Before I forget about it, Admiral, we certainly agree with 
you about the women's health studies. We have done our best to 
assure that the transition is totally complete now, in terms of 
the services that the women in the armed services need. To my 
knowledge, no one has ever requested money for what you just 
suggested, those studies.
    Could you give us an idea how much money would be required? 
And I assume it would have to be a joint services study, not 
just the Navy. Right? You do not need to give it to us now.
    Admiral Koenig. No; I know that.
    Senator Stevens. Give it to us for the record.
    Admiral Koenig. Yes; we are prepared to do that.
    [The information follows:]

    Current proposed Women's Health Research Studies in the Department 
of the Navy submitted by Bureau of Medicine and Surgery (BUMED), Office 
of Naval Research (ONR), Naval Health Research Center (NHRC), Center 
for Naval Analysis (CNA), and Naval Air Warfare Center (NAWC) include:
Priority: 1
    Longitudinal Study of Pregnancy Outcomes in Navy Women Serving 
Aboard Ship and Ashore. Cooperative study with Naval Health Research 
Center designed in response to recommendations of the Standing 
Committee on Military and Civilian women in the Department of the Navy 
three year study; total funding: $1.065 million ($355,000/year).
Priority: 2
    Development and Refinement of Interventions to Reduce Unplanned 
Pregnancy in Navy and Marine Corps Women. Two year study; total 
funding: $440,000 ($220,000/year).
Priority: 3a
    Occupational Fitness of Active Duty Women for Sustained Operations. 
Three year study; total funding: $450,000 ($150,000/year).
Priority: 3b
    Dynamic Strength Capability of Women in High Performance Flight 
Tasks. Three year study; total funding: $900,000 ($300,000/year).
Priority: 4
    Gender Norming Human Factors for the Next Generation Ships and 
Equipment. Five year study; total funding: $1.5 million ($300,000/
year).
Priority: 5a
    Premilitary History of Sexual Assault and Active Duty 
Revictimization and Resulting Health Care Utilization. Three year 
study; total funding: $2.4 million ($800,000/year).
Priority: 5b
    Relationship Between Active Duty Women Premilitary Maltreatment 
History and Health Care Utilization. Three year study; total funding: 
$2.4 million ($800,000/year).
Priority: 5c
    The Relationship Between Post Traumatic Stress Disorder 
Symptomology and Occupational Performance and Attrition in Active Duty 
Women. Three year study; total funding: $2.4 million ($800,000/year).
Priority: 6
    The Effects of Maternal Absence on Child Development, Health Care 
Utilization, and Operational Readiness. Two year study; total funding: 
$500,000 ($250,000/year).
Priority: 7
    Pregnancy, Physical Fitness, and Force Medical Protection: A Pre 
and Post Natal Exercise Model for Active Duty Navy and Marine Corps 
Women. Two year study; total funding: $400,000 ($200,000/year).
Priority: 8
    The Development of a Safe and Effective Exercise Curriculum to 
Reduce Musculoskeletal Injury in Navy and Marine Female Training 
Populations/Operational Communities. Two year study; total funding: 
$500,000 ($250,000/year).
Priority: 9
    Establishment of a Registry of Birth Defects in Offspring of Active 
Duty Women. Ongoing registry; total funding: $250,000/year.
Priority: 10
    Medical Care of American Women in OCONUS Host Nation Medical 
Systems. Cooperative study with George Mason University. Two year 
study; total funding: $180,000 ($90,000/year).
Priority: 11a
    Self Esteem of Active Duty Navy and Marine Corps Women and 
Relationship to Medical Force Protection. Three year study; total 
funding: $450,000 ($150,000/year).
Priority: 11b
    Shipboard Health of Active Duty Women in the Navy and Marine Corps. 
Three year study; total funding: $1.5 million ($500,000/year).
Priority: 11c
    Health, Wellbeing, and Health Care Delivery Services Available to 
Women Aboard Ship. Three year study; total funding: $1.5 million 
($500,000/year).
Priority: 12
    Application and Assessment of Urine Based Screening for Chlamydia 
in Navy and Marine Corps Women. Two year study; total funding: $300,000 
($150,000/year).
Priority: 13
    Gender Differences in Immune Defense Mechanisms: Potential 
Application to the Management of Combat Associated Major Trauma. Three 
year study; total funding: $750,000 ($250,000/year).
Priority: 14
    The Effectiveness of Telemedicine Consultation in Assessing 
Gynecological Disease. Three year study; total funding: $750,000 
($250,000/year).
Priority: 15
    The Knowledge Base of Active Duty Navy and Marine Corps Women 
Concerning Health Promotion and Disease Prevention Behaviors. One year 
study; total funding: $50,000 ($50,000/year).
Priority: 16
    Continuation of Defense Medical Epidemiological Database 
Development. One year study; total funding: $100,000 ($100,000/year).
Priority: 17
    Mixed Gender Value Added Tactical Decision Making Under Stress. 
Three year study; total funding: $750,000 ($250,000/year).
Priority: 18
    Gender Comparison of Suicide Risk and Adverse Psychological 
Response Assessment in the U.S. Navy. Two year study; total funding: 
$280,000 ($140,000/year).
Priority: 19
    Gender Differences in Response to Cold Stress. Two year study; 
total funding: $500,000 ($250,000/year).
Priority: 20
    Female Physiological Heat Exposure Limits (PHEL). Two year study; 
total funding: $1.2 million ($600,000/year).
Priority: 21
    Tri-Service Hospitalization Rate Comparison for Female Specific 
Disease. Two year study; total funding: $400,000 ($200,000/year).
Priority: 22
    Anthropomorphic Measures as Indicators of Body Fat Change. One year 
study; total funding: $100,500 ($100,500/year).
Priority: 23
    The Health Status of Repatriated Female Prisoners of War/Torture 
Survivors. One year study; total funding: $100,000 ($100,000/year).
    Proposed future studies addressing successful integration of women 
aboard submarines are: Gender difference in response to potential toxic 
atmospheric contaminants or radiation exposures that may occur during 
submarine duty; Women on submarines-health issues; Psychological 
predictors of attrition; and Psychological predictors of successful 
integration of women aboard submarines.

                      TRICARE/Medicare subvention

    Senator Stevens. You all mentioned TRICARE and Medicare 
subvention. I do have some questions about that.
    TRICARE, 12 regions in the country. We have done nine. We 
have three more to do, but it looks like every time we are just 
about ready to go ahead, we have an appeal. There has been an 
appeal in every instance, and they have been settled. But the 
problems that develop in each region seem to be comparable to 
the ones that developed prior to the new one coming on line.
    Is there not some way that you can have some kind of a 
cadre that can go and say, look, these are the problems that 
all the other nine have encountered, do not make the same 
mistakes? It would seem to me that a management structure to 
assure that the delays that the others have encountered would 
be avoided in these last three would be in order. Is that 
possible?
    Admiral Koenig. I will take that on. Yes; I think it is 
possible, and I think that we have a good chance at this time--
it is actually two contracts to serve three regions--that this 
will not occur.
    I have personally talked to the CEO, the one that is to 
come up first on May 1, and the biggest issue has always seemed 
to be the rapidity with which they process claims. I think 
these people indicate to me that they have learned lessons by 
looking back at what the other folks have been through.
    Some of the other issues, though, that we identified in 
reference to enrollment and continuous enrollment, are issues 
that need to be fixed by the tri-service CHAMPUS office, the 
TRICARE Support Office. These are issues that we, the three 
SG's, keep asking to have fixed. These issues do not 
necessarily require legislation.
    On the issue that I did mention to you earlier about 
automatic enrollment of active duty family members who live 
within the catchment area of a facility, I suspect we are going 
to need to have some sort of legislative help to get that done 
because of the resistance that we feel at other areas.

                           TRICARE enrollment

    General Roadman. It will require a legislative change 
because the law now mandates choice and it is choice at the 
beginning rather than choice to opt out. Language is being 
written for that legislation and submitted to the Senate Armed 
Services Committee.
    General Blanck. Mr. Chairman, if I may--I am sorry. Go 
ahead.
    Senator Stevens. Be sure we get it too. We are probably 
going to have the first vehicle to deal with, if it is 
something that has to be done. We are going to be working on a 
supplemental when we get back in just 2 weeks, and I think we 
can get their concurrence to do a fix like that in a 
supplemental if you give it to us in time.
    Yes, General?
    General Blanck. Besides the slowness in the payments and 
the issues you have already heard addressed, there are two 
other major problems with TRICARE. One is being fixed and one 
is not.
    The one that is being fixed is the maximum allowable rates 
of reimbursement that were in some cases below that of 
Medicare. The rates that will make them at least as great as 
Medicare will be published in the Federal Register in the next 
month or so, and that will obviate that problem. So, no longer 
will physicians have to rely on being reimbursed at even below 
Medicare rates.
    But the second problem is that the rates really are set to 
those of Medicare which many consider to be too low. As long as 
we are linked with that, we are kind of a captive of those 
rates, and some providers, some groups just will not accept 
those rates. They do in areas that are relatively provider-rich 
where there is a lot of competition, but in areas where that is 
not true, where providers do not have to take those rates, they 
really are opting out. Now, they have to accept Medicare by 
law, but they do not have to accept CHAMPUS by law. So, there 
are some issues with that as well.
    Senator Stevens. Well, they have to accept Medicare by law 
if they take Medicare. But I have had a whole series of people 
from Alaska--I just finished visiting with a young woman doctor 
who told me she just cannot afford to do the Medicare anymore, 
and it is not what she is getting repaid, it is all of the 
forms and reports and inspections and everything else that come 
from Medicare when she gets involved in it. She is a sole 
practitioner in a rural part of Alaska, and literally she was 
in tears and she told me she just cannot do it anymore.

                          TRICARE and Medicare

    Now, you guys have a lot of clout with that Medicare bunch. 
You ought to get in there and tell them to stop this because 
with Medicare subvention and TRICARE using Medicare rates, what 
you are doing is you are leading these people into a blank 
wall, if you think retirees are going to take that option, 
because they know that the doctors that they have dealt with in 
the past are not taking Medicare patients.
    My question to you is how can we interface all these people 
now using the private sector doctors. As you mentioned, 
Admiral, that is the filler that is necessary. As we have 
reduced the number of medical facilities, you have to move some 
of them out there, do you not? But if you take Medicare rates, 
they are not going to take it. This is a horde of people we are 
pushing out in the private sector, and if this young woman is 
right, they are not going to take them.
    Have you talked to the Medicare people about this? What is 
going to happen to them? The private doctors cannot take that 
load if it is going to mean that they are swamped by all these 
Medicare reports, and they are probably going to have to give 
you reports too.
    You talk about the Internet, Admiral. Why can some of these 
things not be put into some sort of a program that these 
doctors can have someone put a report through on the Internet 
and file it and not have all this paperwork and all these 
investigations and everything else that is going on in these 
little towns of America today?
    General Blanck. My understanding is that you can do that. 
You can file electronically by the Internet.
    Admiral Koenig. Unfortunately, there are I think over 1,500 
different forms.
    Senator Stevens. That is what she said.
    Admiral Koenig. Yes; it is insane. We need a single form in 
this country that is filed for every kind of claim and it 
should require the minimum amount of information, not anything 
that anybody wants to have for their own little study.
    Senator Stevens. What is more, she told me that they give 
instructions as to how she is to perform her services. Her 
services must be performed according to this particular 
protocol or she is not going to get reimbursed. Now, that is a 
lot of baloney when you are out there operating on your own. 
She told me she would have to have a separate room in her 
office just to store the forms that she has to file if she is 
going to take Medicare.
    I am serious now because all the retirees that want to go 
off and take this other Medicare subvention are going to be 
back at you like a dirty shirt. That is all there is to it. 
They are going to come after you if it does not work, and we 
will hear from them.
    We are already hearing from retirees in terms of access, 
gentlemen. The facility has been closed. They do not know where 
to go. You talk about the young people being confused. They are 
confused. The place they got their service before--they do not 
know what their rights are. We are getting a lot more 
congressional inquiries on how do I do this than you would 
believe. I do not know about you. We have one person working on 
that now and we are a small State.
    So, I would urge you to do something about that concept of 
the Medicare program being ready to provide private sector 
service for your people.
    Admiral Koenig. I think you got three guys down here who 
are in adament agreement with you on all this.
    Senator Stevens. Well, tell us who to go to battle with. I 
will join you.
    Admiral Koenig. We can do that.
    Senator Stevens. I do not know anything about those blasted 
forms. I wondered when she told me about this protocol. She 
could not get repaid because she did not follow a particular 
approach to providing a medical service. But you all have to 
help us on that.

                                Angio-CT

    I am taking a lot of time. You mentioned the angio-CT that 
is out there at Walter Reed. I do not have answers on this now. 
I went out to see the man who invented that, as you know, and 
went through it. I got to tell you I think the second 
generation is going to be staggering if they can achieve their 
goals.
    But beyond that, I have notified every Member of the Senate 
that they ought to get out there to Walter Reed and use that 
because that is preventive medicine. That is not a diagnostic 
tool to tell me what is wrong with me now. It is to tell me how 
to not get sick in the future. Even this first generation has a 
great deal to do with lessening the workload of your service 
hospitals if we could find some way to put them to work.
    Now, as I understand it, that is the only one we have, is 
it not?
    General Blanck. There is another one at Brooke Army Medical 
Center and I know some of the other centers use that 
technology, though they may not own it. They use it in the 
local community. There are perhaps 40 in this country total.
    Senator Stevens. Well, I wish you all would make a study of 
that and see whether it is as good as I think it is. If it is, 
I think we ought to expand the number of them that are 
available. You all have mentioned preventative medicine, and 
that is the answer to this baby boom generation is to try to 
keep them healthy so that they are not in inpatient guise.
    I hope that we can find some way to not only accelerate the 
development of the second one. The second one is the one I told 
you about which really would have battlefield implications, 
could be put in a small van, the back of a pickup, and would 
diagnose a person's injuries within 90 seconds and tell the 
corpsmen within another 90 seconds what to do to save the life 
in order that they can be put into air transport and taken to a 
field hospital. If there is, God forbid, another war, the war 
of the future will be an awful fast one, and that device is 
absolutely necessary if we can bring it about.
    But right now I really would urge you to tell us--let me 
back up. Are you making a study on this one that is at Walter 
Reed and how it has performed?
    General Blanck. Yes, sir; we have several protocols of how 
we are using it, who goes through it, the ages, what we are 
finding, all of those kinds of things. But some longer-range 
studies, because exactly as you have described, we are trying 
to use it not as a diagnostic tool when someone comes in with 
chest pain. We want to get them much, much earlier than that so 
that early on they can see their own coronaries noninvasively. 
And what a tool we believe this is to give them information 
that will allow patients to make choices and motivate them to 
make the right choices, the healthy choices. If they see the 
beginning of disease, they can do things now that will then 
prevent the need for coronary bypass later.
    Senator Stevens. I asked the developer of that to give me 
all of the instructions that he sends out, and I am going to 
read that over this recess.
    In terms of preventive medicine, it seems to me if it is 
really going to work, that ought to be the first thing you do 
on an annual physical of your people, and you ought to get back 
to the idea of asking all these people to take an annual 
physical so you can stay ahead of the curve as far as providing 
health services to them. But that is going to take a lot of 
those machines.
    General Blanck. Exactly right. Of course, TRICARE has built 
into it for the prime option the periodic fitness evaluation, 
the health promotion evaluation, and this would be one of the 
tools that potentially could be used. It gives a lot of 
information that again motivates patients to change behavior. 
We can give them a lot of information but it is difficult for 
them to take that step--and them is all of us too. 
Understanding that we are all patients--is critical to real 
health promotion.
    Senator Stevens. I have some other questions I want to ask. 
First I want to give it over to my friend here to see what 
questions he has. Senator Inouye.
    Senator Inouye. A long time ago I learned that when Senator 
Stevens speaks, I listen. [Laughter.]
    And I would suggest to you gentlemen you listen very 
intently. He has given you the green light to get more 
facilities. He has given you the green light to cut down the 
paperwork from 1,500 to 15. I think it can be done.
    In looking over the reports of the medical services, it is 
easy to note that there is an increasing demand upon your 
services for humanitarian operations and low intensity 
operations. Looking at the budget again, I somehow feel that 
the budget will have an impact upon your readiness.
    Are you concerned?

                       budget impact on Readiness

    General Blanck. We are all pointing at each other.
    Yes; I am concerned. I will let the others speak for 
themselves. Not that we cannot continue to do our day-to-day 
business. We can. But there are increasing demands, new 
surveillance demands on us, new kinds of health promotion 
demands. Increasingly we are trying to shift resources to 
healthy communities, to preventing disease, but that does not 
have a payoff in the same year. It has a payoff 5 or 10 or 20 
years down the pike. So, when you are dealing with a year-to-
year budget, sometimes it is difficult to make the decisions to 
shift that when you have a waiting room full of patients that 
have acute problems or where you are dealing with chronic care.
    So, again, yes, we can continue to do the same things, even 
do some innovations perhaps, but all of us are, I am sure, 
constrained by the resources. Yet, there is only so much money 
and I think we all understand that. So, we are looking for 
innovative ways to be able to shift dollars.
    I would comment that the Department of Defense has 
committed to fully funding, within that budget constraint, the 
health program, and right now we are working with the 
Department of Defense to find some moneys that were taken by 
their inflation readjustment. And I think all of you have 
information papers on that. It totals I believe $87 million 
because when they readjusted for inflation, it cut the managed 
care contracts, which by contract have to get a certain amount. 
So, it cannot be adjusted. Therefore, we are short a certain 
portion.
    And also our pharmacy costs have increased out of 
proportion to just the normal inflation, as it has throughout 
this country in every system, not just ours. So, you cannot 
apply the lower inflation rates to that as well.
    We believe that the Department of Defense will find those 
dollars, but it still does constrain us, as I have described.
    General Roadman. But I also think that it is perfectly 
obvious that we also consume WRM assets as we put air 
transportable hospitals and the tentage is out and being 
exposed to the environment and the supplies are being used. So, 
there are costs to that, and WRM is underfunded for us. 
Obviously, we can give you those numbers for the record.
    But there is another component, Senator Inouye, that we 
have to keep in mind and that is as we do these missions, this 
is the best training that we can get for the real mission that 
we have which is our war readiness ability. I would just give 
you the example of the six burn patients that we brought back 
from Ecuador about 4 weeks ago. We had a group of people from 
Wilford Hall down in Ecuador giving training to the Ecuadorian 
physician community on trauma care. They got through 1 day of 
the trauma care didactics, and early in the morning or late 
that night, an oil pipeline exploded and oil came down through 
a community. These same physicians that were there then shifted 
into an operational mode and began treating severe wound 
casualties, burn casualties, and ultimately through the State 
Department, we, through our casualty transport system, brought 
six of them back to Galveston.
    That is the type of stuff that differentiates us from all 
the other civilian health care agencies. That ability to do 
that real-time training, that real-time experience just pays 
for itself.
    So, there are two aspects of it. One is positive and one is 
negative.
    Admiral Koenig. We are, as I mentioned before, about ready 
to deploy the hospital ship for a 6-week exercise. When you 
send a force like this to a part of the world where they have 
never seen anything like this, it sends a real message. This 
has great diplomatic benefits for the United States, but we do 
it at a cost. We will send 600 people on that ship. That will 
impact our health care system. We will adjust to that as best 
we can by cross-leveling and bringing in Reserves and so forth. 
But it is very important that we do this because if we do not 
know how to make that ship work, if we ever really need it for 
something very, very critical, and we do not know how to run 
it, we will not be able to do it. So, it comes at a cost when 
we do this, but we will benefit.
    There are things that we need to do with those type of 
platforms in the future. We are already starting to skimp on 
that and I do not like to see it happening. If you ask for it, 
we could certainly provide that information for you.

                   Air Force humanitarian operations

    General Roadman. Senator, if I could just add one more 
thing. When our people come back from those deployments, in our 
parlance we say they are really reblued. If it is their first 
deployment, they finally understand why we do what it is we do. 
If they have gone before, they have come reblued. So, it is 
important that we do those things both for recruitment and 
retention, as well as for the diplomatic aspects of our playing 
on the world stage.
    Senator Inouye. So, these operations have a positive 
impact.
    General Roadman. Absolutely.
    Senator Inouye. Admiral, I was pleased to learn that women 
are not little men. [Laughter.]

                         Research program funds

    But they make up 14 percent of the military population. 
There are about 340,000 now.
    In fiscal year 1994 and 1995, we did have a research 
program in which we appropriated $40 million per fiscal year. I 
would like to ask the same question the chairman asked. Why did 
we not request funds after 1995?
    Admiral Koenig. It was not in the defense program after 
those years, so there has been no additional funds brought in 
to continue this research for the last 2 years. We have a lot 
of questions that we need to get answers to, and we simply do 
not have the dollars to go after that right now.
    Senator Inouye. Do you consider this important enough to 
submit it?
    Admiral Koenig. Yes, sir.
    Senator Inouye. I would hope that you will submit it to the 
committee.
    Admiral Koenig. We will.

                        USUHS graduate retention

    Senator Inouye. On retention, that concerns the committee. 
Retention and recruiting. I note that all three services have 
concerns about not being able to retain physicians and 
physicians' assistants, nurses, et cetera.
    What is the retention rate for the USUHS grads? I ask this 
because last year we saw numbers that were unbelievable, that 
92 percent of the graduates of USUHS who have gone through the 
obligatory time have stayed on. Is that number still holding?
    General Roadman. I think it is in the 96 percent range now.
    Admiral Koenig. Admiral Zimble is sitting back there. He is 
the resource man. He can tell us.
    Senator Inouye. Well, Admiral?
    General Blanck. But the point is, it is very, very high. 
Jim, what is it specifically?
    Admiral Zimble. The number--of the 2,740 graduate 
physicians in the Uniformed Services University, 92.5 percent 
remain on active duty. Some of them still obligate, but they 
are still on active duty. So, roughly 17 percent of the 
physicians in the Department of Defense are graduates of the 
Uniformed Services University.
    Thank you for the opportunity.
    General Blanck. But the point is correct. The retention of 
those trained in the Uniformed Services University is far 
higher than from any other program. In-house GME is next. Those 
who train in civilian institutions are the ones least likely to 
remain on active duty because they do not have quite the 
culturalization. They have not identified themselves as 
military physicians. I think all of us are absolutely committed 
to have everyone in our medical departments, physician, nurse, 
physicians' assistants, dentist, whomever, practice military 
medicine, know about military medicine, not just medicine in 
the military, and it is fundamentally different.
    Admiral Koenig. Many of the USUHS students, by the way, 
have prior service. They come to us with a whole lot of 
military background and they are very, very valuable assets.
    Senator Inouye. I met an outstanding physician who was a 
commander of a tank company who is now an M.D.
    I am happy that DOD has finally seen the light and taken 
their fingers off USUHS and will permit it to go on. I do not 
want to bring this up, but the retention rate of USUHS grads, 
when placed against the retention rates of West Point, 
Annapolis, and Colorado Springs, would make the other services 
look pretty bad. So, congratulations to all of you.
    Mr. Chairman, I have many other questions I would like to 
ask, but may I just submit them?
    Senator Stevens. Yes, sir, please.
    Senator Inouye. I have to get back to the other hearing.
    Senator Stevens. So do I.
    Senator Inouye. I am going to be back for the little men. 
[Laughter.]
    Admiral Koenig. Twenty-five percent of our nurses are male. 
[Laughter.]
    Senator Stevens. I think we better stay off that. 
[Laughter.]
    I am going to submit some of my questions, but I am first 
going to yield to Senator Shelby and see what he has----

                  prepared statement of senator shelby

    Senator Shelby. Mr. Chairman, I appreciate this. I have a 
written opening statement I would like to be made part of the 
record, and I have some questions that I would just submit to 
the record.
    [The statement follows:]

            Prepared Statement of Senator Richard C. Shelby

    The American health care system is the best in the world. 
The Defense Health Program reflects our society's expectation 
of quality care: a highly trained medical professional 
supported by innovative technology and research. United States 
military personnel receive the best medical care of any 
military in the world. The military has a tradition of 
providing quality care.
    There are serious problems in the Defense Health Program, 
however. Military personnel and their families who have opted 
for TRICARE Standard coverage have reported being denied 
treatment at military facilities. The Military Services are 
experiencing difficulty in recruiting and retaining dentists. 
Military retirees are being shut out of the Defense Health 
Program and contend that they are not receiving health care. 
The Administration has consistently underfunded the military 
health care program, which indicates a lack of commitment to 
our military personnel and their families. It is clear that 
these deficiencies are causing members of our armed forces to 
vote with their feet, because the erosion of the health care 
benefit is frequently cited as a primary reason for leaving the 
military.
    We can improve the Defense Health Program and correct the 
deficiencies in the system. I look forward to hearing the 
testimony of the witnesses today and their responses to our 
questions.

                          Facilitating service

    Senator Shelby. I see my friend, General Blanck, here. I am 
always glad to see you as well as the other Surgeons General.
    Thank you, Mr. Chairman.
    Senator Stevens. Well, thank you very much. Let me be as 
brief as I can, and I am not too good at it this morning.
    I agree with you on Internet. All of you now have Internet 
developments and availability. But not many guys my age are 
using the Internet. [Laughter.]
    What are we going to do to find some way to facilitate the 
services?
    I was thinking of trying to see if we could not find some 
way to find a person in every community where there are a 
sizable number of retirees and have that person be the contact 
point who from their own home will run Internet services for 
fellow retirees. Can we do things like that? Are you trying to 
outreach to somebody who knows how to do it? Otherwise, despite 
the availability or not, they are going to be coming to the 
hospitals to make their appointments despite the fact we are 
going to have an Internet appointment system.
    General Blanck. Absolutely. The mail order pharmacy is an 
attempt to make something available that is relatively easy, 
everybody is familiar with. The use of a 1-800 number for 
information for appointments for various services, including 
refills, making things more readily available through a drive-
in pharmacy that is in use in some of the facilities. All of 
these things--and there are many, many more--have to be used in 
combination. There should be a whole menu for a variety of 
services that people can choose from and, of course, making 
that information available is part of our challenge, whether it 
is through mailout, through the Internet, through visits to the 
hospitals, or health benefits advisors.

                          Technology and costs

    But, yes, we are very interested in working with groups and 
with specific representatives.
    Senator Stevens. I am not tooting my own horn, but I just 
want to tell you something. I hope you know when I first came 
here, that to use the PET scan process, you had to have an 
enormous cyclotron. I looked at that out at UCLA and said, you 
know, the trouble is there are not many universities who are 
going to get a cyclotron. Let us miniaturize cyclotrons. So, we 
used some of your money and we did that. Right? Cyclotrons are 
now fairly small. I saw one at UCLA that fits in a room one-
third this size.
    What are we doing about using your systems now to try to 
drive down costs of this technology? That is what I asked my 
friend out there with that angio-CT. It is a wonderful thing, 
but how are we going to drive down the costs so we can have one 
of those in every military hospital? Are you looking at these 
things to be the cost driver on second and third generations of 
these things?
    Admiral Koenig. I think we have seen the cost of new 
technologies that have come into medicine over the last decade 
or two drop significantly. I am thinking of things like 
computer tomography, MRI's. The cost of this kind of equipment 
has dropped as it has become more proven and more people learn 
how to use it. I think we are going to see the same thing with 
this new technology that we have spoken of.

                  cost reduction of Medical technology

    Senator Stevens. I have to tell you, Admiral, I went to a 
symposium and they showed us the telecommunications and digital 
communications and the interfaces of all of the things that 
come out of the computer and digital revolution. And every new 
generation of that has been less costly, and it is now down to 
a factor of one one-hundredth of what it was when it started.
    If you look at your medical technology, in spite of the 
fact that the costs are being held down, each new generation is 
more costly than the one preceding it. We have not had the 
drivers. There have not been any drivers in terms of trying to 
get the costs of medical technology down ala the concept of 
looking at what was the largest cost of the PET scan which is a 
cyclotron and driving it down. I think you ought to have within 
the services a group that is there to try and look at the 
systems and find out how those costs could be driven down.
    General Roadman. That is being done, but the CBO in 1996 
did a study and said 62 percent of the increases in health care 
from 1996 to 2000 would be attributable to technology. The 
problem that we have with technology is that, as you bring this 
up and if you have the electron beam CT scan, what you then 
have got to do is quit doing some of the interventive stuff 
that we have done in the past. So, the preventive stuff has 
really got to be a cost lever in order to be effective.
    What technology has done in medicine in general, not in the 
service, is that medicine has been paid for on a fee-for-
service basis and it encouraged more films exposed, more 
surgeries done, more procedures done, and what that has done 
since 1965 in our country has driven the cost of health care in 
an almost exponential climb.
    So, as we take the technology, what we have got to do is 
assure ourselves that it does something that we are trying to 
stop and that we then can lever that to prevent illness out in 
the future because it is waiting for people to get sick that is 
so expensive for us. That is why we are talking about 
prevention and why you have as well. We have got to apply 
technology in the prevention area, not just in the intervention 
area.
    Senator Stevens. I do not disagree with anything you said, 
but I do think you ought to think of a contract like MIT and 
Cal Tech and a few others and get them to look at this current 
generation and ask them to reengineer them, look at them, and 
find out how they could produce them for less money in volume. 
And we are not doing that. You need volumes of these things 
that are coming on that are preventive medicine related.
    If you look at the PC--did you ever see that first computer 
over in the Smithsonian? Look at the cost of that thing and I 
am told you are going to have one that size by 2005. It will 
have the same power that that thing had over there in the 
Smithsonian.
    It is a question of who is driving the cost. CBO showed us 
that figure. That means if we are going to have any impact on 
cost of your services, we have got to have an impact on the 
cost of the new technology.
    General Roadman. And the utilization, Mr. Chairman.
    General Blanck. Mr. Chairman, we have a steering committee 
that Admiral Koenig chairs, and it rotates, called the 
Technology Insertion Steering Committee. What we do is try to 
look at technology and we try to, through our research 
communities, partner with academics and with industry and in 
some ways we can use what is developed out there and in some 
ways be a testing bed for it and reduce the cost. We can get 
their expertise in downsizing and miniaturizing.
    We right now, by the way, are not buying these things. We 
are leasing them because the next one that will come along will 
be better and we do not have to rebuy the thing and so forth.
    All of this is going on and we need to continue that 
because we should be a model not only for how we manage care, 
health promotion, but also how we use the technology in health 
care.
    Admiral Koenig. Another thing that we are working on is 
with the Department of Veterans Affairs [VA]. We are working 
very, very closely with the VA now on these issues, and we 
figure if we can bring the power of our Department, along with 
the Veterans, to bear on some of these very tough issues, these 
high cost areas, we can drive the cost down.
    For example, we buy that machine that we have been talking 
about like they have at Walter Reed. Why not put one in a VA 
facility or a military hospital and then use it 24 hours a day? 
For some reason we are wed to the idea of 8-hour days, 5-day 
weeks. When you buy a piece of equipment that costs $1 billion, 
you better get the most out of it.
    Senator Stevens. Well, I agree with that.
    Admiral Koenig. And that is the kind of innovative change 
thing we need to make.
    Senator Stevens. But I also think if you can design one 
that costs $1 billion, you can redesign it and it will cost 
$500 million and the next one ought to cost $250 million. And 
you can get it down to where we have got one everywhere.
    We were talking about angio-CT II, and this will be my last 
comment. I foresee that that is going to be in the emergency 
room of every major city in the world. If it will work for the 
guys who have just come off the battlefield, it ought to work 
in Battlefield D.C. too, you know. [Laughter.]
    But we have got to prove it through your use and then I 
think find some ways to produce it for less.
    Well, let me thank you all. Admiral, we wish you the best. 
Maybe you can head up that task force I would like to see 
created and find some ways to analyze these things and bring 
the cost down. Most of the private practitioners just do not 
have time to do it, and your guys and the hospitals do not have 
time. Someone is going to have to take the time and sit off and 
think about it. Let us drive the cost down. Miniaturization. 
You had the word, General.

                     Additional committee questions

    We thank you all for what you are doing and look forward to 
working with you. And you are going to give us that figure.
    Admiral Koenig. Yes, sir.
    Senator Stevens. Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Questions Submitted to Lt. Gen. Ronald R. Blanck
            Questions Submitted by Senator Richard C. Shelby
                              hepatitis c
    Question. I am informed that Hepatitis C continues to be a public 
health threat and may be particularly alarming to the men and women of 
our military. Does the military have an accurate count of the number of 
active duty personnel infected with Hepatitis C?
    Answer. The prevalence of Hepatitis C among the Active Duty 
population is 1.3 percent, as determined by a Serosurvey at Walter Reed 
Army Institute of Research involving 16,000 AD and 30,000 applicants. 
This compares to a 1.4 percent prevalence of Hepatitis C in the general 
population.
    Activities \1\ placing any individual at greatest risk for 
contracting Hepatitis C are: IV drug use; transfusion; hemodialysis; 
tattooing; high risk sexual behavior.
---------------------------------------------------------------------------
    \1\ Annals Internal Medicine October 15, 1996.
---------------------------------------------------------------------------
    Causes: \1\ 40 percent to 50 percent no identifiable risk factor; 
40 to 50 percent intravenous drug use; 5 to 10 percent transfusion.
    Question. Does the military routinely screen active duty personnel, 
not just new recruits, for Hepatitis C in order to slow the progression 
of disease in infected personnel and to prevent the transmission of 
disease to other military personnel?
    Answer. Individuals found serendipitously to have positive 
Hepatitis C serology, individuals with acute Hepatitis C, and people 
found to have serological evidence of Hepatitis C at blood donation are 
reported through Preventive Medicine channels. Identifying asymptomatic 
individuals who have positive serology for Hepatitis C is not being 
pursued.
    Question. I have been told that exit testing for Hepatitis C at the 
time of retirement or discharge is the only reliable method of 
detecting the presence of Hepatitis C infection to ensure the health 
and safety of the individual separating from the military. Does the 
Department test for Hepatitis C during the exit physical? If so, what 
specific tests are performed during the routine exit exam?
    Answer. The military does not screen active duty personnel. 
However, all blood donors are tested for Hepatitis C virus. 
Additionally, the Army continues random drug testing to identify and 
eliminate drug abuse within its ranks. The Department does not test for 
Hepatitis C during the exit physical. However, the SM completes a 
history form on which he/she is questioned about hepatitis, liver 
disease, etc. Depending upon further history and physical exam, 
appropriate tests would be ordered to determine if pathology or chronic 
diseases are present.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                           medical readiness
    Question. An important readiness issue of concern is the shortage 
of provider specialties, dentists and physician assistants. What types 
of recruitment incentives are you implementing to actively recruit and 
retain these providers?
    Answer. The recruitment and retention of highly trained individuals 
to serve within the Military Health System is critical to the overall 
health and readiness of the force. There are actually two areas which 
we feel assist us in meeting this challenge. They are economic and 
educational, and both assist in recruitment and retention.
    The following economic incentives are in place to assist us in the 
recruitment of active component health professionals:
    Nurse Corps Recruitment Bonus.--This bonus of $5,000 is paid to 
Nurse Anesthesia Recruits and Family Nurse Practitioners who opt to 
accept a four-year active duty service obligation rather than a three-
year obligation.
    Dental Corps Accession Bonus.--This bonus of $30,000 is paid to 
Dental officers who join the force with a four-year active duty service 
obligation. This program was begun in fiscal year 1996 and has proven 
to be a valuable tool. The current statutory authority for this program 
expires in fiscal year 2002. By that time, we are hopeful that our 
efforts to increase Health Profession Scholarship Program allocations 
utilized by the Dental Corps will be successful and that program will 
become the basis to meet future recruitment needs.
    Health Professions Loan Repayment Program.--This program was 
provided to us by the Fiscal Year 1997 National Defense Authorization 
Act. It provides for the repayment of loans utilized for professional 
education. It provided for $22,000 per year of incurred obligation to a 
maximum of four years. Our experience with this program is limited to 
date, but we are optimistic that it will assist us. If there is a 
``downside'' to this program, it is the fact that it is funded with 
monies which are available as a result of unexecuted Health Professions 
Scholarship Program allocations. One program has to be less than 
successful for this program to succeed. As we gain experience with this 
program we are initially limiting it to the recruitment of Dental 
officers.
    The following economic incentives are in place to assist us in the 
recruitment of reserve component health professionals:
    Education Loan Repayment Program.--Health Professions Officers 
Serving in Selected Reserve with Wartime Critical Medical Skill 
Shortages (10 USC, Sec 16302). The loan repayment currently pays $3,000 
per year up to a max of $20,000 to certain shortage specialties for 
service in the Selected Reserve. Amounts have not kept up with the 
costs of schooling. The dollar amount should be increased so that it 
actually means something to a physician or dentist with many times that 
amount in loans. Suggested change is $20,000 per year to a lifetime max 
of $50,000. Also needing a change in language is the requirement that a 
person be fully qualified in his specialty to be eligible. We would 
like the law to allow participation by someone in training as well.
    Special Pay.--Selected Reserve Health Care Professionals in 
Critically Short Wartime Specialties program (37 USC, Sec 302g) is 
currently being used as an accession program wherein practicing 
physicians and other healthcare professionals receive up to $10,000 per 
year for a maximum of three years for participation in the Selected 
Reserve. This incentive is no longer appropriate given the increased 
chance of mobilization today. Active Component uses a tiered Multiyear 
Special Pay (MSP) for retention of certain health professionals. The 
law allows this reserve program to be used in a similar fashion and the 
Reserve Components would like to work toward that end.
    Financial Assistance.--Health Care Professionals in Reserve 
Components program (10 USC, Sec 16201). The Financial Assistance 
Program (FAP) pays a stipend ($10,000/yr) to interns, 
residents, and some others in certain critical shortage specialties in 
return for future two-for-one obligation to the Selected Reserve. This 
program could be the best recruiting tool available to the Reserve 
Components by modifying the law to allow physician and dental students 
to participate (similar to the Active Component HPSP (10 USC, Sec 
2121). The obligation is based on full years of participation. The 
program should be changed to allow six-month increments similar to 
several of the Active Component counterpart programs.
    Another one of the invaluable tools assisting recruitment is the 
educational opportunities offered. In addition to attracting high 
quality applicants, graduates of the various programs have incurred an 
active duty service obligation which provides a level of stability to 
the force as a whole.
    Currently, the following educational programs are being utilized to 
attract high quality individuals into military service:
    Health Professions Scholarship Program.--This program provides the 
bedrock levels of accessions into various health disciplines. 
Currently, we are utilizing HPSP allocations to support entry level 
training for physicians, dentists, veterinarians, nurse anesthetists, 
optometrists, and clinical psychiatrists.
    Financial Assistance Program.--This program enables us to 
``subsidize'' individuals undergoing specialty level training within 
civilian institutions. At the present time, this program is being 
utilized to recruit physicians and dentists in specialties which 
directly effect force readiness.
    Enlisted Commissioning Program.--Enlisted members already on active 
duty may compete for this program. It is designed for individuals who 
can complete a Bachelor of Science in Nursing within two years. Upon 
completion of the academic requirements and licensure by the 
appropriate state, the individual is commissioned into the Nurse Corps. 
We find to this to be an extremely popular program providing excellent 
upward mobility to outstanding enlisted soldiers.
    Physician Assistant Training Program.--This is another in service 
training program which provides us with highly trained health care 
providers. Currently, sixty active duty individuals are selected to 
undergo this two-year, tri-service course. We have in the past counted 
on this source to provide 100 percent of our requirements. In fiscal 
year 1999, we will attempt to directly recruit physician assistants. 
Our success in this venture will determine if additional measures are 
required to insure the force structure required in this critical 
readiness specialty is maintainable without additional incentives.
    In addition to the specific programs mentioned above, we are also 
offering in service training programs for our Physical Therapists, 
Podiatrists, Pharmacists, and Dietitians.
    Currently there are five Medical Corps Specialty pays authorized 
for payment under Title 37, USC. These are: Variable Specialty Pay; 
Board Certification Pay; Medical Additional Specialty Pay; Incentive 
Special Pay; and Multi-Year Special Pay. These pays obviously increase 
the economic incentive for our physician force to remain on active 
duty. The yearly adjustment of these rates by OSD (HA) to maintain 
parity among the services is a critical link in the entire retention 
process.
    Non Physician Health Care Provider Board Certification Pay is 
provided to non-physician clinical specialties who have demonstrated 
clinical excellence by virtue of becoming Board Certified in their 
particular area of expertise. Again, this economic incentive aids in 
the retention of our clinical specialists.
    Dental Officer currently receive three type of Special Pays. They 
are: Variable Special Pay; Dental Additional Special Pay; and Board 
Certification Pay. Additionally, the Fiscal Year 1998 National Defense 
Authorization Act has authorized the Dental Officer Multi Year 
Retention Bonus. Currently, we are working within the service process 
to insure funding is available to support this new initiative. Once 
funding is obtained, we are confident that this will assist us in the 
retention of our future dental leadership. We are currently offering, 
and have funded, a multi-year retention bonus for Oral Surgeons. Also, 
the Army has included in its POM submission funding for expansion of 
the multi-year retention bonus to all qualified Dental Corps officers.
                                 usuhs
    Question. The 1997 DOD Defense Reform Initiative mandates the USUHS 
remain open with one of you as Executive Agent. Was this transfer of 
management from Health Affairs to the Surgeons General a sound business 
decision for military medicine?
    Answer. Yes. The decision to establish the Navy as the executive 
agent for the operation of the University is sound. The building is 
physically located on a Navy installation. All of the base operations 
support received will be ``controllable'' by one service. Placing the 
service Surgeons General in an oversight role of the University 
established to meet their needs is an excellent move. We feel that this 
will make the University more responsive to our individual and 
collective needs. This coupled with the fact that the University does 
not exhibit the same growth of costs to operate as the civilian 
counterparts, makes the outcome of the DRI with regard to the 
University a sound decision for us all.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
                       mobile breast care center
    Question. General Blanck, I have been following a program by the 
Army Medical Research and Materiel Command called the Mobile Breast 
Care Center. The vehicle that other Senators and I toured here on 
Capitol Hill is filled with the latest digital mammography equipment, 
as well as a telemedicine capability. The idea is to give mammograms to 
populations of women who have traditionally been underserved, such as 
in the inner city, rural areas or remote military locations. At the 
same time, the telemedicine technologies incorporated in the vehicle 
are useful to ongoing DOD research. Last year the Defense 
Appropriations Bill contained language which urged the Army to continue 
this program.
    General, does the Army have any plans to procure any more of these 
vehicles? I hope you look at procuring more than just the one 
demonstration vehicle, and then moving forward with clinical trials. 
This technology is too important for military women--and all women--not 
to be properly tested.
    Answer. In response to Congressional interest and last year's 
Defense Appropriations Bill, the Congressionally Directed Medical 
Research Program has included in its 1998 Breast Cancer Research 
Program Announcement language that encourages research proposals that 
test the optimization and efficacy of digital mobile mammography/mobile 
breast care centers to address the basic and clinical research needs of 
at-risk, underserved, rural, and urban communities, as well as active 
and retired military personnel and their beneficiaries. In the Program 
Announcement, investigators are advised that the Medical Research and 
Materiel Command has assembled a prototype digital mobile mammography 
vehicle, which is available for inspection during concept development 
of proposals and may be used for study. The Food and Drug 
Administration has not yet approved the use of digital mobile 
mammography vehicles, and the efficacy of such vehicles to address the 
needs of populations of women at risk for breast cancer still needs to 
be established through peer reviewed research.
    As per Institute of Medicine recommendations, Strategies for 
Managing the Breast Cancer Research Program: A Report to the U.S. Army 
Medical Research and Materiel Command, proposals submitted in response 
to the fiscal year 1998 Announcement will undergo two levels of review 
to ensure both scientific excellence and program relevance. The first 
tier is a peer review of proposals against established criteria for 
determination of scientific merit. The second tier is a programmatic 
review of proposals that compares submissions to each other and 
recommends proposals for funding based on the program goals.
                   personal information carrier [pic]
    Question. General Blanck, I also see in your statement that the 
Army is working with the other services on something called a Personal 
Information Carrier, or PIC. This is a sort of high-tech dog tag that 
will carry medical information about each soldier, thus helping to 
track and correct medical problems that may occur while a soldier is 
deployed. I have two questions about the PIC. First, how much data 
should a PIC be able to carry in order to maximize its medical 
effectiveness?
    Answer. It is undetermined at this time how much should be stored 
on the PIC for maximal medical effectiveness. A chartered group of 
quad-service health care providers, the Theater Clinical Workgroup, has 
determined the essential requirements for the initial phase of the PIC. 
However, as enhanced automated medical systems get deployed to the 
field to support the requirements of H.R. 1119 (Force Health 
Protection), the PIC will need to expand to store and transport the new 
data produced by these systems. The maximum medical effectiveness of 
the PIC will be realized when the PIC includes all relevant information 
required to maintain a fit and healthy force.
    Question. Second, I have heard that DOD plans to test the PIC in a 
30,000-person deployment overseas. Is that effort funded in the 
President's budget request?
    Answer. The fiscal year 1999 President's request included a command 
and control issue of the funding for PIC and another system called 
Preventive Health Care System (PHCS), which will be one of the major 
data sources for the PIC. PHCS will integrate data needed for force 
health protection, the pre and post force protection questionnaire 
information, immunization information, history and physical. It will be 
installed in all medical treatment facilities. The PIC was addressed as 
a high priority unfinanced requirement. Costs to develop and deploy 
30,000 PICS were included in the budget projections. The total 
additional fiscal year 1999 funding for both the PIC and PHCS is $32.1 
million. At present, this remains unfunded in the President's Budget.
                                 ______
                                 
             Questions Submitted to Vice Adm. Harold Koenig
              Question Submitted by Senator Arlen Specter
                           freeze-dried blood
    Question. The Navy has for many years been supporting research to 
develop a freeze-dried blood platelet product for the treatment of 
battlefield wounds. As you know, platelets are the blood cells critical 
for clotting and thus for stemming the loss of blood from battlefield 
wounds. The product being developed by the Navy in collaboration with 
the pharmaceutical industry would be a lightweight powder with a shelf 
life of 1-2 years (compared with the current short shelf-life of five 
days for liquid platelets).
    What is your opinion of the development of such a product and do 
you agree it would enhance the quality and effectiveness of medical 
care in combat situations?
    Answer. Yes, the development of freeze-dried blood would enhance 
the quality and effectiveness of medical care in combat situations. The 
development of functional freeze-dried blood products to treat combat 
casualties is an important R&D program for the military, particularly 
the Navy because of its remote, isolated, and afloat platforms. The 
development of improved blood product preservation and storage are key 
technologies because of blood product therapeutic importance in 
decreasing combat casualty hemorrhage and mortality. Currently, the 
availability of blood components and their shelf-life and storage 
capacities is severely limited and creates huge logistical burdens for 
delivery to remote locations.
    Freeze-dried blood products, including red blood cell and 
platelets, will enhance medical readiness and support for warfighting 
requirements. Clear economic savings accrue because of the reduced need 
for replacement of expired blood products. The costs associated with 
providing blood products in the combat theater and aboard surface ships 
is a relatively significant component of medical support costs. In the 
relatively short Gulf War, approximately $20 million was spent to 
maintain the blood inventory. The increasing costs of testing units of 
blood for safety would also be improved by extending the usable shelf-
life for these tested transfusion units. Finally, the very real need 
for long-term storage capability is further demonstrated in providing 
the ability to meet blood requirement surge capacities during major 
combat contingencies.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
                              hepatitis c
    Question. I am informed that Hepatitis C continues to be a public 
health threat and may be particularly alarming to the men and women of 
our military. Does the military have an accurate count of the number of 
active duty personnel infected with Hepatitis C?
    Answer. No, at this time the military does not have an accurate 
count of the number of active duty personnel infected with Hepatitis C. 
It is assumed that the prevalence is the same as the civilian 
community.
    Question. Does the military routinely screen active duty personnel, 
not just new recruits, for Hepatitis C in order to slow the progression 
of disease in infected personnel and to prevent the transmission of 
disease to other military personnel?
    Answer. The Navy does not routinely screen recruits or active duty 
personnel for Hepatitis C. Hepatitis C positive individuals are 
identified during voluntary blood donations. The Navy has been 
screening its blood donors for Hepatitis C since 1990.
    Question. I have been told that exit testing for Hepatitis C at the 
time of retirement or discharge is the only reliable method of 
detecting the presence of Hepatitis C infection to ensure the health 
and safety of the individual separating from the military. Does the 
Department test for Hepatitis C during the exit physical? If so, what 
specific tests are performed during the routine exit exam?
    Answer. Hepatitis C testing is not routinely performed on 
individuals separating or retiring from the Navy or Marine Corps. 
Routine laboratory tests performed as a part of discharge or retirement 
physicals include a PPD (tuberculosis test), lipid profile (cholesterol 
test), RPR (syphilis test), and HIV determination. For individuals over 
the age of 50 years, a prostate specific antigen and stool for hemocult 
(blood in stool) are also performed.
                       acute lung injury research
    Question. Admiral Koenig, in the past, Navy medical research and 
development programs have supported research efforts in acute lung 
injuries associated with combat trauma and massive hemorrhage, 
particularly the condition called Acute Respiratory Distress Syndrome 
at university centers. Does this remain a high priority research 
initiative for the Navy?
    Answer. Yes, research efforts in acute lung injury remain a high 
priority initiative for the Navy. A number of potential combat injuries 
including battlefield wounds, extensive burns, hemorrhagic shock, 
sepsis, smoke inhalation, or exposure to agents used in biological or 
chemical warfare, often result in a clinical condition referred to as 
Acute Respiratory Distress Syndrome (ARDS). This condition is 
characterized by respiratory insufficiency, tissue hypoxemia, and 
multi-organ failure as a result of trauma and tissue ischemia or oxygen 
deprivation. The incidence of ARDS in the civilian population in the 
United States is estimated at 150,000 cases per year, and regardless of 
its etiology, ARDS has an associated mortality of 50-70 percent. 
Historically, more than 90 percent of combat casualties who die after 
evacuation from the battlefield had histological evidence of ARDS; 
those surviving for more than two to five days had a high incidence of 
pneumonia and alveolar hyaline membranes, and well known sequelae of 
ARDS.
    Presently, there is no known cure for ARDS. A common mechanism that 
may explain the clinical manifestations of ARDS is excess production of 
free radicals by various lung and inflammatory cells. Current R&D 
efforts are developing novel mechanisms for antioxidant defenses to 
reduce the morbidity and mortality of ARDS, including specific drug and 
gene delivery to lung and other tissues to prevent the occurrence of 
ARDS complications. Researchers have identified new strategies for the 
enhancement of antioxidant defenses in both the lungs and systemic 
organs, thus limiting the catastrophic consequences of various combat 
traumatic injuries, sepsis, chemical/biological warfare agents, and 
various inflammatory agents in combatants and civilian personnel. These 
efforts will permit definitive preventive and treatment measures for 
combat trauma and massive hemorrhage associated with acute lung 
injuries, particularly acute respiratory distress syndrome (ARDS), and 
related complications.
    The acute lung injury program strengthens collaborative research 
efforts between participating DOD research organizations and civilian 
institutions working to meet combat casualty care requirements. These 
efforts are recognized as high priority initiatives for the Navy. 
Principal performers and past collaborators include: University of 
Alabama, School of Medicine Birmingham, Alabama; and Uniformed Services 
University of the Health Sciences, Bethesda, Maryland.
    Question. The Navy medical research and development organization 
should be commended for maintaining strong research efforts in combat 
casualty care that have produced life-saving measures in combat 
environments. Do the efforts in acute lung injury research represent a 
component of this research strategy to support casualty care life-
saving and treatment initiatives?
    Answer. Yes. Future Navy warfighting requirements have emphasized 
the need to limit the medical support footprint in theater and develop 
the capability to stabilize severely injured and hemorrhaging 
casualties with minimal on-site medical support assets. Navy medical 
research endeavors emphasize projects supporting far-forward care and 
delayed resuscitation procedures extending the classic ``golden hour'' 
to enable casualty evacuation and transport to fixed, stateside medical 
facilities for definitive surgical care and treatment.
    The primary emphasis for these efforts is directed at casualty 
stabilization and sustainment modalities that permit a delay in 
resuscitative measures prior to definitive care and treatment. Current 
research and development efforts involve study of the therapeutic 
induction of a state of tolerance to temporary, severe to complete, 
systemic ischemia; i.e., protection from injury of the casualty during 
extended circulatory collapse and/or cardiac arrest beyond the ``golden 
hour'', followed by resuscitation to full recovery without brain or 
other vital organ damage, particularly acute lung injury to maintain 
essential respiratory functions upon full resuscitation.
    These initiatives constitute a comprehensive strategy for saving 
the lives of future severely injured combat casualties, who have 
historically died from massive injuries, organ failure, and hemorrhage.
    Question. Will this research have application to civilian trauma 
victim management?
    Answer. Yes. The results of these initiatives can be applied to 
both combat-related trauma victims as well as emergency cases 
presenting to a major civilian trauma center.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                           medical readiness
    Question. An important issue of concern is the shortage of provider 
specialties, dentist and physicians. What types of incentives are you 
implementing to actively recruit and retain these providers?
    Answer. Several initiatives have been taken to improve recruiting/
retention effectiveness within the Medical and Dental Corps. 
Recruitment/retention goals for non-physician providers in the Nurse 
Corps and Medical Service Corps are currently being met.
Medical corps
    Field recruiting efforts are focusing on key specialties, rather 
than diffusing efforts over several specialties. In fiscal year 1996, 
Navy Medicine recruited for direct accessions in 14 specialties. The 
staffing needs in many of these specialties were small. Navy Recruiting 
Command suggested improved recruiter effectiveness could be gained by 
focusing efforts on key requirements. Thus in fiscal year 1998, we 
recruit for direct accessions in just five specialties.
    The Financial Assistance Program (FAP), a stipend program, when 
applied to physicians in residency training has proved successful. In 
addition, the FAP incurs longer obligated service than direct 
accessions, reducing attrition. Unlike student scholarships, this 
program can be focused on key specialties. Currently 50 percent of 
available funds are devoted to three key shortage areas: family 
practice, general surgery, and orthopedic surgery.
    The Loan Repayment Program (LRP) is a new program authorized for 
implementation in 1998. This program will further expand the breadth of 
the potential market in which we compete by providing medical school 
loan repayment for physicians at the end of residency training. It can 
also be focused on key specialties, and is expected to further assist 
correction of manning shortfalls.
    In an effort to reduce the family dislocation resulting from 
operational assignments, a ``homeporting'' concept is being utilized. 
Physicians completing training in a large homeport area are assigned to 
an operational unit based in that homeport, and upon completion of the 
operational assignment can often be reassigned to a medical facility in 
the same homeport location. Thus, families are not required to move 
from their home or school. Medical Corps assignment officers estimate 
that 90 percent of operational assignments are now made in this 
fashion.
    Naval Recruiting Command conducted focus groups in 1997-1998 which 
revealed previously unrecognized misconceptions held by young 
physicians regarding Navy physician quality of life as compared with 
other services. The results of these focus groups formed the basis of 
the 1998 physician marketing plan, including a physician recruiting 
video. This video has been very effective at capturing the attention 
and addressing the concerns and misconceptions of potential physician 
candidates. Other marketing media now in use likewise more effectively 
address the interests of today's young physicians.
    Continued attention to reducing the civilian-military pay gap, 
focusing financial aid programs on key specialties, precise marketing 
guided by focus groups, and reducing family dislocation will steadily 
reduce manpower shortages.
Dental corps
    In 1995 the Chief of the Navy Dental Corps with the support of the 
Surgeon General and in concert with the Bureau of Naval Personnel and 
Navy Recruiting Command developed a 10-point action plan to restabilize 
the Navy Dental Corps. The program consisted of legislative action to 
increase dental special pays to make the Navy Dental Corps competitive 
with the civilian market; to offer a $30,000 accession bonus to allow 
new dentists to pay educational loans; and to offer medical loan 
repayment for dental school loans. Promotion incentives; Navy 
Recruiting Command's primary focus on general dentists; initiation of 
student financial incentives through scholarships and other educational 
incentive programs; the expansion of postgraduate training 
opportunities for recent graduates, and the production of a dental 
recruiting video are also underway.
    Navy Recruiting Command conducted focus groups in 1995 which 
revealed previously unrecognized misconceptions held by dentists 
regarding military dentistry in general; Navy compared to other 
services, and that of the civilian sector; and, addressed quality of 
life concerns. A video was prepared both addressing these concerns and 
targeting the 40 percent female market in dental schools. This video 
was mailed to dental students and recent graduates in fiscal year 1998 
and has been very effective at capturing the attention of young 
dentists and addressing common misperceptions of military service.
    The Navy Dental Corps through the 10 Point Program seems to have 
stabilized. Scholarships, other financial incentives, the accession 
bonus and the dental video seem to have cured the accession problem.
                                 usuhs
    Question. The DOD Defense Reform Initiatives mandates that USUHS 
remain open with one of you as Executive Agent. Was this transfer of 
management from Health Affairs to the Surgeons General a sound business 
decision for military medicine?
    Answer. The Defense Reform Initiative placed oversight of USUHS 
under the collective management of the Services Surgeons General. The 
Navy has been appointed executive agent for program, budget, and 
funding execution responsibilities for USUHS. By moving direct 
oversight to the Surgeons General, the transfer moves management of the 
university closer to the customers and assures continuation of 
responsiveness to Service requirements. The added benefit is that the 
middleman is removed from the management process, thus making savings 
possible on the DOD staff.
                        women's health research
    Question. Do you see a need for focused research in military 
women's health issues?
    Answer. Yes, I think we need focused research in military women's 
health issues. Approximately 340,000 women, 14 percent of the total 
active duty personnel and 16 percent of reservists, serve in the Armed 
Forces. Military women are generally young, healthy and fit. However, 
from basic training to deployment in combat, military women experience 
physical stresses that may include overuse injuries and exposure to 
environmental extremes, as well as the need to cope with military 
equipment, clothing and procedures designed largely for men. Research 
is needed to focus on how these stresses may affect the female physical 
condition and factors that can prevent short-term and long-term 
injuries and illnesses which may be peculiar to women. For example, as 
we have deployed increasing numbers of women on ships over the past few 
years, we have recognized the need for a longitudinal study of the 
effects of ship board living and working conditions on the health of 
pregnant women and the short-term and long-term effects of these 
stresses on their unborn children.
    Question. What is the current status of the DWHRP and what is 
needed in terms of funding for the next fiscal year?
    Answer. Current proposed Women's Health Research Studies in the 
Department of the Navy submitted by Bureau of Medicine and Surgery 
(BUMED), Office of Naval Research (ONR), Naval Health Research Center 
(NHRC), Center for Naval Analysis (CNA), and Naval Air Warfare Center 
(NAWC) include:
Priority: 1
    Longitudinal Study of Pregnancy Outcomes in Navy Women Serving 
Aboard Ship and Ashore. Cooperative study with Naval Health Research 
Center designed in response to recommendations of the Standing 
Committee on Military and Civilian women in the Department of the Navy 
three year study; total funding: $1.065 million ($355,000/year).
Priority: 2
    Development and Refinement of Interventions to Reduce Unplanned 
Pregnancy in Navy and Marine Corps Women. Two year study; total 
funding: $440,000 ($220,000/year).
Priority: 3a
    Occupational Fitness of Active Duty Women for Sustained Operations. 
Three year study; total funding: $450,000 ($150,000/year).
Priority: 3b
    Dynamic Strength Capability of Women in High Performance Flight 
Tasks. Three year study; total funding: $900,000 ($300,000/year).
Priority: 4
    Gender Norming Human Factors for the Next Generation Ships and 
Equipment. Five year study; total funding: $1.5 million ($300,000/
year).
Priority: 5a
    Premilitary History of Sexual Assault and Active Duty 
Revictimization and Resulting Health Care Utilization. Three year 
study; total funding: $2.4 million ($800,000/year).
Priority: 5b
    Relationship Between Active Duty Women Premilitary Maltreatment 
History and Health Care Utilization. Three year study; total funding: 
$2.4 million ($800,000/year).
Priority: 5c
    The Relationship Between Post Traumatic Stress Disorder 
Symptomology and Occupational Performance and Attrition in Active Duty 
Women. Three year study; total funding: $2.4 million ($800,000/year).
Priority: 6
    The Effects of Maternal Absence on Child Development, Health Care 
Utilization, and Operational Readiness. Two year study; total funding: 
$500,000 ($250,000/year).
Priority: 7
    Pregnancy, Physical Fitness, and Force Medical Protection: A Pre 
and Post Natal Exercise Model for Active Duty Navy and Marine Corps 
Women. Two year study; total funding: $400,000 ($200,000/year).
Priority: 8
    The Development of a Safe and Effective Exercise Curriculum to 
Reduce Musculoskeletal Injury in Navy and Marine Female Training 
Populations/Operational Communities. Two year study; total funding: 
$500,000 ($250,000/year).
Priority: 9
    Establishment of a Registry of Birth Defects in Offspring of Active 
Duty Women. Ongoing registry; total funding: $250,000/year.
Priority: 10
    Medical Care of American Women in OCONUS Host Nation Medical 
Systems. Cooperative study with George Mason University. Two year 
study; total funding: $180,000 ($90,000/year).
Priority: 11a
    Self Esteem of Active Duty Navy and Marine Corps Women and 
Relationship to Medical Force Protection. Three year study; total 
funding: $450,000 ($150,000/year).
Priority: 11b
    Shipboard Health of Active Duty Women in the Navy and Marine Corps. 
Three year study; total funding: $1.5 million ($500,000/year).
Priority: 11c
    Health, Wellbeing, and Health Care Delivery Services Available to 
Women Aboard Ship. Three year study; total funding: $1.5 million 
($500,000/year).
Priority: 12
    Application and Assessment of Urine Based Screening for Chlamydia 
in Navy and Marine Corps Women. Two year study; total funding: $300,000 
($150,000/year).
Priority: 13
    Gender Differences in Immune Defense Mechanisms: Potential 
Application to the Management of Combat Associated Major Trauma. Three 
year study; total funding: $750,000 ($250,000/year).
Priority: 14
    The Effectiveness of Telemedicine Consultation in Assessing 
Gynecological Disease. Three year study; total funding: $750,000 
($250,000/year).
Priority: 15
    The Knowledge Base of Active Duty Navy and Marine Corps Women 
Concerning Health Promotion and Disease Prevention Behaviors. One year 
study; total funding: $50,000 ($50,000/year).
Priority: 16
    Continuation of Defense Medical Epidemiological Database 
Development. One year study; total funding: $100,000 ($100,000/year).
Priority: 17
    Mixed Gender Value Added Tactical Decision Making Under Stress. 
Three year study; total funding: $750,000 ($250,000/year).
Priority: 18
    Gender Comparison of Suicide Risk and Adverse Psychological 
Response Assessment in the U.S. Navy. Two year study; total funding: 
$280,000 ($140,000/year).
Priority: 19
    Gender Differences in Response to Cold Stress. Two year study; 
total funding: $500,000 ($250,000/year).
Priority: 20
    Female Physiological Heat Exposure Limits (PHEL). Two year study; 
total funding: $1.2 million ($600,000/year).
Priority: 21
    Tri-Service Hospitalization Rate Comparison for Female Specific 
Disease. Two year study; total funding: $400,000 ($200,000/year).
Priority: 22
    Anthropomorphic Measures as Indicators of Body Fat Change. One year 
study; total funding: $100,500 ($100,500/year).
Priority: 23
    The Health Status of Repatriated Female Prisoners of War/Torture 
Survivors. One year study; total funding: $100,000 ($100,000/year).
    Proposed future studies addressing successful integration of women 
aboard submarines are: Gender difference in response to potential toxic 
atmospheric contaminants or radiation exposures that may occur during 
submarine duty; Women on submarines-health issues; Psychological 
predictors of attrition; and Psychological predictors of successful 
integration of women aboard submarines.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
   center for naval analysis [cna] fehbp-65/expansion of mail order 
                             pharmacy study
    Question. At page 14 of your remarks, you refer to a Center for 
Naval Analysis study being performed on the subject of FEHBP-65 for 
retirees, as well as on the subject of expanding the mail order 
pharmacy to retirees. You also state that the studies are expected to 
be completed later this year. Do you have a specific date when these 
studies would be available to this committee?
    Answer. A draft of the CNA study regarding the feasibility of 
FEHBP-65 and expansion of the Mail Order Pharmacy will be sent to the 
sponsor, Principal Deputy Assistant Secretary of the Navy (Manpower and 
Reserve Affairs), on May 31, 1998. The final report will be published 
on September 30, 1998.
    Question. What is the current status of those studies?
    Answer. The CNA study is ongoing and currently in the analysis 
phase.
    Question. Is there any doubt of what the outcome will be?
    Answer. Currently CNA only has preliminary cost estimates, which 
may change with further analysis.
    Question. Isn't the only solution to the problem of availability 
and affordability of health care for retirees over 65 to allow them to 
enter the Federal Employees Health Benefits Program?
    Answer. CNA is examining the cost effectiveness of a range of 
options for beneficiaries over 65. These options include a pharmacy 
benefit, some form of Medigap coverage, along with the Federal Employee 
Health Benefits Program.
    Question. What about the problem of billings and payments; is the 
Navy getting any complaints? If so, are these complaints being taken at 
face value, with solutions being sought and implemented?
    Answer. Yes, the Navy has received complaints regarding balance 
billing and civilian provider reimbursement.
    The current ``balance billing'' system is a major irritant and 
financial problem for many of our beneficiaries. Under the present 
system, providers who ``participate'' in CHAMPUS (now TRICARE) agree to 
accept the CHAMPUS Maximum Allowable Charge (CMAC), cost-shared between 
the government and patient, as payment in full. However, providers who 
do not ``participate'' receive the CMAC payment, but may also bill 
their patient for an amount not to exceed 115 percent of CMAC. In 
addition, non-institutional providers (ambulances, clinical 
laboratories, etc.) are currently exempt from CMAC limits. Bills from 
these providers are fully payable and the patient is responsible for 
the co-payment and any remaining balance exceeding the government CMAC.
    OASD(HA) is presently working on implementing the provision in the 
Fiscal Year 1996 Authorization Act to remove the 115 percent limit 
exclusion for non-institutional providers. This provision will limit 
the financial liability of the TRICARE Standard user to normal co-
payments and 15 percent above CMAC. Navy Medicine has stressed that 
once language is implemented, policy needs to be retroactive to date 
Fiscal Year 1996 Authorization Act was signed into law. The fiscal year 
1997 and fiscal year 1998 Authorization Acts have also enacted 
provisions that will cover all bills for TRICARE Prime enrollees above 
the TRICARE Prime fees. These provisions will remove the possibility of 
the patient being billed for services above the TRICARE Prime user fee. 
Both initiatives are scheduled to begin Spring 1998.
    Prompt civilian provider reimbursement is another issue being 
addressed. Civilian providers customarily submit claims for payment to 
a fiscal intermediary who processes the claim. These claims are on 
behalf of TRICARE Prime, Extra and Standard patients. Prompt payment 
ensures satisfaction by the provider community. However, delayed 
payment aggravates the provider who may consider dropping out of a 
TRICARE network, refusing to see further TRICARE patients, and/or 
passing the bill to the patient for complete payment.
    The current DOD contract standard for claims processing is 75 
percent of all claims being paid within 21 days. This standard is being 
achieved and often exceeded, however Navy Medicine believes this 
standard is too low and should be raised. Aside from cases when the 
contractor fails to meet the standard, the fact that one out of four 
claims need not be paid is unsatisfactory given today's technology and 
adjudication processes. TRICARE Standard providers incur the most 
delays in payment, while contractors focus on paying their network 
providers first.
    OASD(HA) is acutely aware of this issue and has worked hard with 
the TRICARE contractors to improve performance when it falls below 
standard. OASD(HA) also plans to set a new standard for claims 
processing to 100 percent within 14 days in the next generation of 
TRICARE contracts.
                                 ______
                                 
         Questions Submitted to Lt. Gen. Charles H. Roadman II
            Questions Submitted by Senator Richard C. Shelby
                              hepatitis c
    Question. I am informed that Hepatitis C continues to be a public 
health threat and may be particularly alarming to the men and women of 
our military. Does the military have an accurate count of the number of 
active duty personnel infected with Hepatitis C?
    Answer. Hepatitis C virus (HCV) is a single-stranded RNA virus 
transmitted almost exclusively by blood or blood products. It is 
possibly transmitted by sexual contact, but efficiency of transmission 
is exceedingly low. Hepatitis C infection is a significant problem in 
the United States, and is usually a chronic illness without symptoms 
until late in its course. It is close second to chronic alcoholism as 
the cause of cirrhosis, end-stage liver disease, and a hepatocellular 
carcinoma in the United States. Available treatments are expensive and 
are only curative in 15 to 25 percent of cases; therefore, primary 
disease prevention is key.
    Literature shows that in the United States, there are approximately 
3.5 million carriers of the Hepatitis C virus. The significance of HCV 
infection in the Air Force is low. Among blood donors in Air Force 
medical treatment facilities in 1996, prevalence of HCV by repeat-
positive enzyme immunoassay was 0.27 percent. The Air Force Reportable 
Events Surveillance System (AFRESS) shows 47 cases of HCV among active 
duty personnel in 1996 (0.012 percent), four of whom were health care 
workers but only one of whom was involved in direct patient care. In 
1997, AFRESS reported a total of 44 active duty cases of HCV.
    Question. Does the military routinely screen active duty personnel, 
not just new recruits, for Hepatitis C in order to slow the progression 
of disease in infected personnel and to prevent the transmission of 
disease to other military personnel?
    Answer. The risk in the Air Force is very low for Hepatitis C 
infection, therefore the level of risk does not warrant routine 
screening of the general Air Force population.
    Question. I have been told that exit testing for Hepatitis C at the 
time of retirement or discharge is the only reliable method of 
detecting the presence of Hepatitis C infection to ensure the health 
and safety of the individual separating from the military. Does the 
Department test for Hepatitis C during the exit physical? If so, what 
specific test are performed during the routine exit exam?
    Answer. The Air Force does not test for Hepatitis C during exit 
physicals. No major public health authorities recommend routine 
screening for Hepatitis C. Additionally, current treatment of cases has 
not significantly improved outcomes, and current screening tests have 
relatively high false positive rates.
    Intravenous drug abuse is the major risk factor in the nation for 
acquiring Hepatitis C. The Air Force's aggressive entrance and random 
screening for drug abuse is the most effective method to minimize the 
incidence and prevalence of Hepatitis C in the military population 
(i.e., controlling the behavior that puts one at risk for acquiring the 
disease). Again, from all available evidence, Hepatitis C does not 
appear to be a major public health threat in the United States or in 
the U.S. military population.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                           medical readiness
    Question. An important readiness issue is the shortage of provider 
specialties, dentists and physician's assistants. What types of 
incentives are you implementing to actively recruit and retain these 
providers?
    Answer.
Provider specialties:
    Recruiting.--For short-term immediate needs, our primary accession 
tool is direct recruiting from civilian sources. Recruiting produces 
accessions in the current year. Over the past six year period, 
recruiting services attained over 80 percent of their physician 
recruiting goal. The desire is to reduce reliance on recruiting and 
focus on sponsored accessions through various scholarship programs, 
which select high quality candidates from a very competitive selection 
process.
    Retention.--Retention varies by specialty; but overall retention 
has remained stable and predictable. The anticipated losses are 
replaced by new accessions. Most physician accessions enter the Air 
Force because of an active duty service commitment resulting from 
sponsored training. Most common forms of sponsorship are the Health 
Professions Scholarship Program (HPSP), the Financial Assistance 
Program (FAP), or the Uniformed Services University of the Health 
Sciences (USUHS). Sponsorship is our principal sustainment pipeline 
which is programmed years in advance prior to the actual year of 
accession. Annual incentive special pay contracts are one of the tools 
we use to motivate physicians to remain in the Air Force. These pay 
amounts are determined annually by a DOD Flag Officer review board and 
consider staffing levels as well as comparable salaries for civilian 
physicians in similar specialties. Additionally, opportunities for 
senior leadership positions are used as retention incentives.
Dentists:
    Recruiting.--The new $30,000 dental accession bonus is an incentive 
motivating new accessions to enter for four years vice three. 
Additionally, we increased our level of Health Professions Scholarships 
for dentists to sponsor high quality candidates in dental school which 
relieves some of the burden from Recruiting Services.
    Retention.--Existing special pays for dental officers have 
increased for the first time since 1981. The increases affected both 
junior and senior officers, and is expected to improve retention 
noticeably. Additionally, the new Multi-Year Special Pay (MSP) will 
enhance retention. It will offer an incentive for dental officers to 
remain on active duty for contractual periods ranging from two to four 
years. The amounts will vary by specialty and length of the contractual 
obligation. Furthermore, active duty Graduate Medical Education offers 
advanced dental training (often in active duty programs) for general 
dentists to become specialists. This is also a retention tool as 
dentists become trained in a specialty and incur a training obligation. 
Finally, board certification pay offers incentives to advance their 
personal standing in the dental profession.
Physician assistants:
    Recruiting.--Although we have been successful in recruiting direct 
accessions, the volume necessary for sustainment is mostly generated 
from an active duty two-year educational program which commissions 
highly qualified, and very competitively selected, enlisted personnel. 
This is a highly successful program, and one which is a great incentive 
to our enlisted force to become a commissioned officer.
    Retention.--It appears that the incentive is to serve as a 
commissioned officer for at least 10 years, so Physician Assistants can 
retire with the benefits of an officer rather than their prior enlisted 
grade. Approximately 95 percent of Physician Assistants in the Air 
Force (397 of 418 per the September 30, 1997 database) had some form of 
prior service. Almost half of those Physician Assistants with prior 
service had served over 10 years as a commissioned officer (186 of the 
397 officers).
                                 usuhs
    Question. The 1997 DOD Defense Reform Initiative mandates that 
USUHS remain open with one of you as Executive Agent. Was this transfer 
in management a sound business decision for military medicine?
    Answer. The Air Force agrees with the concept of unifying the 
administration of Graduate Medical Education under USUHS with executive 
agent oversight. This unification would enhance economies of scale, 
encourage resource sharing and joint planning, and standardize 
monitoring and oversight using a common database. However, we need to 
further define goals and objectives that will drive the types of 
resources, personnel and budget required in the unified office at USUHS 
and where they would come from.
    In the short term, there are no cost savings realized by the Air 
Force, but in the long term, this joint venture will allow us to more 
effectively meet force management demands and training requirements.
                               telehealth
    Question. How has nursing interfaced with telemedicine/telehealth?
    Answer. As the primary aeromedical evacuation (AE) mission 
operators, flight nurses and aeromedical evacuation technicians (AET's) 
have been pivotal in the pursuit of telemedicine in AE. Due to severe 
limitations in our present aeromedical communication systems, it is 
almost impossible to relay important information from the flight nurse 
in the air to the physician on the ground. This has always been an 
extreme frustration for flight nurses and AET's as they provide care at 
40,000 feet and 4-6 hours flying time from the closest medical 
treatment facility. This can be an extremely prolonged time when a 
patient's condition deteriorates and the nurses need immediate and 
clear consultation with a physician. Telemedicine can provide real-time 
communication for health care professionals and improve medical 
capabilities essential in our quest for quality care to battlefield 
soldiers anywhere, anytime. Almost two years ago, the Air Force stood 
up the first DOD working group to establish an Aeromedical Evacuation 
Strategic Plan for the insertion of telemedicine into the aeromedical 
environment.
    As the champion for this effort, the Air Force Medical Service 
brought 45 participants from all walks of the DOD telemedicine and user 
communities together in May 1996. Of this group, one-third were Total 
Nursing Force personnel: active duty, Reserve, and Air National Guard 
personnel. They developed the strategic plan and the operational 
demonstration. They initiated a Breakthrough Area to architect and 
implement a proof of concept demonstration to document the need for 
telecommunication from ground to air to ground. With our current 
operations of transporting more critical patient loads during peacetime 
and contingency operation missions, this communications capability is 
vital to safe quality patient care. The operational demonstration was 
conducted from September 22-27, 1997, and involved ``live'' channel AE 
missions using C-141, C-9, and C-130 airframes for a total of 70.6 
flying hours. This demonstration used commercial off-the-shelf computer 
systems and applications in addition to existing airframe communication 
systems. We were able to validate the use of e-mail and ``chat'' to and 
from the aircraft to ground AE command and control elements. The flight 
nurses and AET's on the team were impressed with the enhanced 
communication capability demonstrated by the test. We are excited and 
energized by the successes and lessons learned. We are now working 
toward our Phase II proof of concept demonstration in the Pacific Air 
Forces Theater.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
                                tricare
    Question. It is my understanding that the transition to Tricare has 
gone quite smoothly in North Dakota. There has been some question as to 
why dependents must re-enroll on an annual basis, once they are 
enrolled in ``Tricare Prime.'' Can you explain why this is necessary?
    Answer. The lack of automatic reenrollment into TRICARE Prime has 
been an active concern of the Air Force and Department of Defense. The 
TRICARE Management Activity is pursuing regulatory, contract and 
program actions necessary to establish continuous enrollment. This will 
allow family members who enroll in Prime to remain enrolled until they 
elect to disenroll or lose their eligibility. As early as this summer, 
Prime will automatically re-enroll users who live in the 40-mile 
``catchment areas'' unless they elect to end participation or become 
ineligible. According to surveys, we know the vast majority of our 
Prime enrollees, about 90 percent, are satisfied with the program.
    Question. What is the status of billings and payments in the Air 
Force portion of the Tricare program?
    Answer. Each of the regions has experienced claims processing 
problems as health care delivery was initiated. This difficulty in 
meeting the claims processing standards listed in the Managed Care 
Support Contracts resulted from larger than anticipated enrollments and 
claims submissions. The TRICARE Management Activity and the Lead Agent 
closely monitor the claims processing on a monthly basis. The contracts 
also contain quarterly positive and negative incentive clauses that are 
automatically implemented when thresholds are reached. At the moment, 
close to 80 percent of claims are processed within 21 days.
    Question. Are there complaints being received from Tricare 
contractors?
    Answer. Yes. The most often heard complaint from contractors is 
that the requirements in the current Managed Care Support Contracts are 
much too voluminous, prescriptive and inflexible. The contractors 
believe this hamstrings them and prevents them from employing their 
best commercial practices. The next generation of Managed Care Support 
Contracts under development are substantially smaller in volume, 
significantly less restrictive and expressly encourage best commercial 
practices. During development of these new contracts, industry 
officials were invited to review the proposed requirements and offer 
suggestions based on their private sector experience.
    Question. Is the Air Force experiencing any problems with medical 
providers being reluctant to continue providing services because of 
failure of the Tricare system to promptly pay bills submitted?
    Answer. Yes. There have been a few instances where civilian 
providers have expressed frustration with untimely claims payments and 
the cumbersome system used to process claims. The TRICARE Management 
Activity and Lead Agents have worked hard to reduce the administrative 
impediments associated with claims processing. As a result, claims 
processing currently exceeds the current contract requirements.
                              Nurse Corps

STATEMENT OF BRIG. GEN. LINDA J. STIERLE, DIRECTOR OF 
            MEDICAL READINESS AND NURSING SERVICES, 
            OFFICE OF THE SURGEON GENERAL, DEPARTMENT 
            OF THE AIR FORCE

                           opening statement

    Senator Stevens. We are going to now go to a second panel, 
the Chiefs of the Nurse Corps. We want to welcome Brig. Gen. 
Bettye Simmons, the Chief of the Army Nurse Corps; Capt. Mary 
Anne Gardner, the Deputy Director of the Navy Nurse Corps; 
Brig. Gen. Linda Stierle, Director of Medical Readiness 
Doctrine and Planning and Nursing Services for the Air Force.
    The two of us know a lot about nurses. We have seen a lot 
of them from beds. I want you to know we respect what you do. 
Your health care professionalism does not go unnoticed by the 
Congress. This committee in particular appreciates the 
dedication and the high professionalism that military nurses 
bring to their jobs.
    Your statements have all been filed in the record, as I 
said in the last panel, and I want to give my good friend and 
your good friend, Senator Inouye, an opportunity to make 
opening remarks first.
    Senator Inouye. I wish to join you, Mr. Chairman, in 
welcoming General Simmons, General Stierle, and Captain 
Gardner. It has been my pleasure to work with military nurses 
for many years, and I thank you once again for the 60 years of 
help and assistance.
    I understand, Captain, that this is your last appearance as 
Deputy Director of the Navy Nurses Corps.
    Captain Gardner. Yes, sir, it is.
    Senator Inouye. I would like to take this opportunity to 
thank you for your outstanding service. I wish you the very 
best.
    Captain Gardner. Thank you very much.
    Senator Inouye. I also would like to take a few moments to 
congratulate the Nurse Corps for recent landmark achievements. 
In the Navy, Rear Admiral Engel was promoted to a second star 
in the fall of 1997. In the Army, Brig. Gen. Nancy Adams, 
former Chief of the Army Nurse Corps, was nominated for a 
second star and she just assumed command of Tripler Army 
Medical Center on March 17, making her the first Army nurse to 
command a major medical center. I am looking forward to the Air 
Force to be able to give similar reports soon.
    We have worked long and hard for the statutory change which 
allowed Nurse Corps officers to compete for senior corps in 
material positions.
    Advanced practices nurses must often fight for the very 
existence when they are placed in competition with other health 
care professionals as the most economical providers of primary 
care. A recent example is the present controversy between 
anesthesiologists and certified nurse anesthetists. The Health 
Care Financing Administration has proposed a rule to remove the 
Medicare requirement for supervision of nurse anesthetists by 
anesthesiologists, and I am certain all of us have noted the 
resistance to this rule from the medical community. However, I 
am pleased that it has not been the case within the military 
health system.
    Nurse anesthetists are clearly proving themselves as 
independent practitioners both in peacetime and during 
conflicts. I believe that at the present time the nurse 
anesthetists throughout the United States provide at least 85 
percent of the anesthetics.
    Military nurses have often led the way in creating new and 
expanded roles for nurses, but the core of nursing care and 
concern for the individual remains constant. This combination 
has enabled the services to provide health care throughout the 
world, on land, at sea, and in the air.
    As the military health system again leads the way in the 
development and implementation of health care delivery models, 
the military nurses will be at the forefront in developing 
innovative ways to reduce health care costs and to continue to 
provide quality care.
    So, I appreciate the appearance of all of you this morning 
and look forward to hearing more about the progress of the 
corps in terms of readiness, research, the graduate school of 
nursing, and telehealth.
    Thank you, Mr. Chairman.

                  overview of nursing in the Air Force

    Senator Stevens. Thank you.
    We started from the left before. We will start from the 
right this time. Let us go with the Air Force first this time.
    General Stierle. All right, sir.
    Mr. Chairman and Senator Inouye, it is an honor to report 
on the achievements of Air Force nursing. Thanks to your 
ongoing endorsement and our determination, we continue to be a 
vital player in the Air Force Medical Service.
    I have submitted my written testimony for the record and 
will now highlight some of our successes.
    First, I am encouraged by the increasing leadership 
opportunities for nurses in the Air Force Medical Service. The 
percentage of medical groups commanded by nurses steadily 
progressed from 5 percent to 16 percent over the past 3 years.
    After we reorganized into squadrons in 1994, squadron 
commander positions filled by nurses dipped from 16 percent to 
13 percent in 1996. I am pleased to report the most current 
statistics on these squadron commander positions indicate a 
rebound back up to 16 percent.
    Not forgetting the Air Reserve component, the Air National 
Guard has 12 percent presently of the medical units with nurse 
commanders, and the Air Force Reserve Command has 36 percent. 
We anticipate continued progress on filling active and reserve 
senior positions as more nurses are competitively selected and 
successfully meet the challenges of command.
    Now I would like to spotlight some of the successful 
disease and population health management initiatives. Medical 
commanders have capitalized on nursing's expertise and have 
developed nurse-run clinics. Typically these clinics focus on 
case management, patient education, followup, and coordination 
of services. The medical groups at Patrick AFB, FL, and Grand 
Forks AFB, ND, have expanded their nurse-run clinics to manage 
women's preventive health services. Nurses in primary care 
triage services manage acute appointments, referral processes, 
and provide self-and home care advice. The triage service at 
Offutt Air Force Base in Nebraska responded to 266 patient 
calls per day with home care advice sufficient for 14 percent 
of the callers.
    Also the medical groups at Barksdale AFB, LA; Travis AFB, 
CA; and Eielson AFB, AK, reassigned nursing personnel to manage 
medical specialty consultation process. Their clinical 
understanding of primary care changed the historically bumpy 
consultation system into a smoother process with fewer delays 
and referral appointments and more reliable provider followup.
    Across the board, nurses and medical technicians have 
played a pivotal role in converting inpatient medical units to 
23-hour ambulatory procedure units. These units provide nursing 
care services to patients on an outpatient basis and are 
excellent examples of customer convenience and quality care.
    Mr. Chairman, I am proud to say that Nursing Services has 
often provided the vision and the tenacity to move all of these 
programs forward. The total nursing force has been integral in 
improving medical force protection programs, aeromedical 
evacuation operations, and advanced trauma education. Our 
support of sustainment operations, humanitarian assistance, and 
disaster relief missions around the world directly keeps the 
wartime skills of our nurses and medical technicians honed 
while assisting those in need.
    The partnership between the active, the Reserve, and the 
Guard nursing forces has never been better. I credit our 
success with the development of our first total nursing force 
strategic plan.
    One of the best examples of our enhanced working 
relationship is a program called TopSTAR, a medical readiness 
training program using state-of-the-art mannequins and 
computer-based instruction. In 2 weeks, students complete 100 
percent of their sustainment training that was previously 
spread out over 1 to 4 years. With the significant reduction of 
Air Force hospitals, it will be increasingly more difficult to 
meet clinical training requirements for the active and the 
Reserve components. We hope to expand TopSTAR from the first 
training platform at Wilford Hall Medical Center to more sites 
in the coming years.
    Accession and recruiting efforts remained in the forefront 
also in 1997. In recent years, we have had an ample supply of 
entry level, novice nurses. In order to enhance our force 
structure with clinically experienced and specialty nurses, we 
have redirected the nurse accession bonus policy to incentivize 
these more difficult recruitment categories.
    A recruitment initiative, that I described in last year's 
testimony, was the cadet BSM to MSM program, and I am pleased 
to report that the Air Force Academy has scholarships for 
cadets to attend nursing school. In the fall of 1997, two 
cadets entered Vanderbilt University, and starting with the 
class of 1998, up to five cadets annually will have the 
opportunity to attend nursing schools.
    Another resounding recruitment success story is the 
commissioning of airmen who have completed a bachelors of 
science degree in nursing and we have targeted 10 allocations 
per year but hope to see this increase over time because we are 
committed to retaining these stellar individuals as Nurse Corps 
officers.
    Now I would like to recognize the cost savings and 
outstanding joint training offered by the Uniformed Services 
University of Health Sciences, the family nurse practitioner 
program, and the certified registered nurse anesthetist 
program. We have seen an increased demand for FNP's in our 
peacetime health care delivery system and recently validated 
wartime requirements for FNP's in our mid-level provider 
deployment taskings. Our CRNA's continue to provide critical 
wartime skills and the majority of peacetime anesthesia 
services. After 45 years, we closed the Air Force CRNA training 
program. We found the USUHS program to be strong and have 
assigned all Air Force CRNA students to USUHS. By incorporating 
Air Force CRNA faculty and training into USUHS, we saved 
approximately $300,000 in civilian contract costs.
    I have continually been impressed by the value that nurses 
place on advanced technologies and educational opportunities. 
We maintain a dynamic nursing home page, offering worldwide 
access to our strategic plan, our newsletter, the nursing 
research corner, and professional development opportunities. We 
developed a distance learning guide as a ready reference to 
courses and programs that give our nursing personnel the 
opportunity to advance their education. The USUHS Graduate 
School of Nursing offers an innovative distance learning 
program affording geographically separated nurses avenues to 
pursue advanced degrees.
    Foremost, though, I want to thank Congress for the 
continued backing for the tri-service nursing research program. 
Air Force nursing is generating lines of research aimed at 
issues critical to military and civilian health care delivery. 
Our clinical investigation sites, staffed with a doctoral 
prepared nurse, have spearheaded our efforts to educate our 
nursing personnel and to improve practice through research 
validated results.
    In closing, I feel a great sense of pride and 
accomplishment as the Corps Chief of such an extraordinary 
group of officer and enlisted nursing professionals. I can say 
with absolute certainty that Air Force nursing personnel are 
ready, willing, and able to protect our forces, protect our 
national interests, and advance democracy and freedom anytime 
anywhere.

                           prepared statement

    Mr. Chairman and Senator, thank you for providing us this 
forum to showcase military nursing. We appreciate your support 
in behalf of the Department of Defense, the Air Force Medical 
Service, and the patients we serve.
    Senator Stevens. Thank you very much, General.
    [The statement follows:]
           Prepared Statement of Brig. Gen. Linda J. Stierle
    Mister Chairman and members of the committee, it is an honor to 
report on the achievements of the Air Force Nurse Corps (AFNC) since my 
testimony in April of 1997. Thanks to your ongoing endorsement and our 
determination, the AFNC continues to be a vital player in the Air Force 
Medical Service (AFMS). As reported in my testimonies over the past 
three years, we developed the first-ever Total Nursing Force Strategic 
Plan (TNFSP), outlining the future directions of nursing personnel in 
the Air Force. This nursing strategic plan stands apart from previous 
plans as it is the first time the Total Nursing Force (TNF), officer 
and enlisted, active duty, reserve and guard, collaborated on a shared 
vision, mission, goals and objectives.
    The TNFSP links directly to the AFMS strategic initiatives and in a 
broader perspective, correlates with the strategic plan of the Military 
Health System (MHS). This strategic plan presently has six goals. The 
goals are (1) Cultivate, Identify and Advance Strong Leaders, (2) 
Spearhead Customer-Driven Nursing Practice, (3) Forge Ahead as a Full 
Partner in the AFMS Building Healthy Communities, (4) Champion an 
Integrated Ready Force, (5) Effectively Use AF Nursing Resources, and 
(6) Employ and Integrate Technology and Research. These goals will help 
us reach our vision of Air Force Nursing as an integrated force 
committed to maximum readiness and customer-focused practice.
Goal No. 1: Cultivate, Identify and Advance Strong Leaders:
    Goal statement.--Optimize nursing leadership to meet mission 
challenges of the 21st century.
            Command Opportunities
    I am encouraged by the leadership opportunities for Nurse Corps 
(NC) officers in the AFMS. It is my opinion that a NC officer in a 
medical group or squadron commander position brings a customer-focused 
orientation to the organization. Nurses have the distinct advantage of 
understanding all the disciplines. By virtue of providing specialty 
services to patients after duty hours or coordinating the delivery of 
those services, nurses have a diverse blend of clinical expertise, 
managerial experience, and interpersonal skills. Nurses are perceived 
to be the strongest patient advocate by the patients themselves. The 
majority of nurses start out as generalists caring for our 
beneficiaries in our bedded facilities, 24 hours a day, 7 days a week, 
365 days a year. In addition, I believe advanced academic degrees serve 
to strengthen their qualifications for command roles. Thus, robusting 
the number of NC commanders means increased diversity within the Major 
Commands and at senior medical leadership forums thereby enhancing 
problem solving and decision making.
    I am pleased to report opportunities for command in the AFMS is on 
the rise for NC officers. Since 1987, all corps had the opportunity to 
compete for medical group commander positions however; these positions 
were physician dominated. The AFNC never had more than 2-3 nurses as 
commanders at any given time. After the centralized group commander 
selection process began in January 1996, the number of nurses selected 
for the opportunity to command medical groups significantly rose from 5 
in 1996, to 11 in 1997, and to 18 in the most recent fiscal year 1998 
board. As a result, the percentage of medical groups commanded by AFNC 
officers steadily progressed from 5 percent to 16 percent over the past 
three years. While the number of NC officers selected to command small 
and medium facilities has increased, the number of nurses to command 
large facilities and Major Commands has not. We anticipate continued 
progress in this area as more nurses are competitively selected and 
successfully command medical groups.
    In order to evaluate progress in our goal achievement for the TNF, 
we also began tracking senior leadership positions for nurses in the 
Air Reserve Components (ARC). The percentages of medical units 
commanded by nurses in the Air Force Reserve Command (AFRC) is 36 
percent, and in the Air National Guard (ANG) is 12 percent, averaging 
to 23 percent of the total Air Reserve Component (ARC).
    I would like to briefly focus on one of the squadrons in the 
medical group. The Medical Operations Squadron (MDOS) is usually the 
largest of the squadrons in our medical groups and known for its 
clinically focused mission. Gaining squadron commander experience is 
crucial for future selection to medical group commander positions. The 
MDOS is ideal for nurse commanders to gain that experience. After the 
AFMS reorganized into squadrons, the MDOS commander positions filled by 
nurses dipped from 44 percent in 1994, to 34 percent in 1996. I am 
pleased to report the most current statistics on MDOS commander 
positions filled by NC officers has rebounded to 47 percent. Similarly, 
the overall number of squadron commander billets from all four 
squadrons filled by NC officers rose from 13 percent to 16 percent this 
past year.
            Nurses In Senior/General Officer Billets
    In September 1994, the 2-star general officer promotion board 
opened to all corps and in September 1995, the 1-star board became a 
corps neutral opportunity. Moreover, the Fiscal Year 1996 DOD 
Authorization Act expanded the 3-star Surgeon General position beyond 
the Medical Corps (MC) to include all health care service corps. 
Finally in 1996, all services allowed all corps to compete for major 
command roles. These are important steps in assuring a level playing 
field for leadership opportunities for all corps throughout the AFMS.
    Officers compete for 1-star flag officer promotion at 2 years time 
in grade of colonel and must assume 1-star rank before their mandatory 
retirement date (normally 30 years commissioned service). Officers 
competing for 1-star flag officer positions in the AFMS normally 
progress through a series of medical group commands and other senior 
leadership positions. Eligibility for Medical Group command begins 
after the officer has been selected for colonel and ends at 26 years of 
commissioned service.
    The usual phase point for Medical Corps (MC) and Dental Corps (DC) 
officers to reach colonel is between 13 to 18 years of commissioned 
service. The MC/DC officers have up to 13 years as a colonel to 
progress through medical group commands, and a total of 17 years to 
reach other higher level career milestones in preparation for general 
officer promotion. In comparison, the normal phase point to colonel for 
the DOPMA constrained corps, the Nurse Corps, Biomedical Science Corps 
(BSC), and Medical Service Corps (MSC), is 21 to 22 years. These 
officers only have a 4 to 5 year window to progress through multiple 
medical group commands, and a total of 8 years to achieve higher 
positions that make them competitive for general officer promotion. 
This puts nurses, as well as other DOPMA constrained corps, at a 
distinct disadvantage for general officer promotion.
    In order to be competitive with the non-DOPMA constrained corps 
(MC/DC) and have enough time to progress through a career track toward 
general officer promotion, DOPMA constrained candidates (NC, BSC, MSC) 
need at least one, if not more, below-the-primary-zone (BPZ) 
promotions. Currently, the BPZ opportunity for DOPMA constrained corps 
is significantly less than for Line of the Air Force (LAF) officers and 
non-DOPMA constrained corps (physicians/dentists). We are evaluating 
the viability of these BPZ promotion opportunity percentages for NC, 
BSC, and MSC officers.
            Senior Leadership Development
    In March 1997, we had our very first Total Nursing Force Executive 
Leadership Symposium for both enlisted and officers. For the first time 
we were able to bring together the vast majority of Active Duty, Guard, 
and Reserve Chief Nurses and senior enlisted Medical Service Managers. 
A survey conducted during the symposium overwhelmingly demonstrated a 
need to continue this Total Nursing Force senior leadership forum. 
Similarly, at the Association of Military Surgeons of the United States 
(AMSUS) meeting, we had our first Total Nursing Force day. The Guard, 
Reserve, and Active-Duty nursing leadership presented overviews of 
their respective programs, a progress report on the TNFSP, a panel 
discussion surrounding enlisted training issues. We also received 
presentations from guest speakers on utilization of forensic nurses and 
the challenges of forensic investigation of the airline crash in the 
Florida Everglades. The programs were top-notch with standing room 
only. The TNF is committed to exploiting these opportunities annually 
to help us achieve our vision of a seamless, integrated Total Nursing 
Force.
    Another senior leadership strategy undertaken this year was the 
revision of the USAF Nurse Corps career path. We are in the process of 
distributing it and posting it on our Total Nursing Force Homepage. The 
career path expands guidance beyond the traditional clinical track to 
career paths in senior leadership and staff officer tracks such as 
medical readiness, health promotion, managed care, and education.
Goal No. 2: Spearhead Customer-Driven Nursing Practice:
    Goal statement.--Champion competent, collaborative practice among 
healthcare professionals to deliver truly customer-centered, affordable 
and accessible healthcare.
            Customer Satisfaction
    The TNF is heavily invested in the AFMS Customer Satisfaction Task 
Force, chartered to develop an overall strategy for instilling a 
climate and culture of customer focus and service. Our Surgeon General 
has emphasized this focus must be a cultural change rather than a 
program.
    The Task Force determined that the implementation of this culture 
change was dependent upon eight essential elements: Leadership; 
Performance Management; Education and Training; Communications; 
Measurement; Best Practices; Facility Implementation; and Products, 
Services, and Systems. The Task Force appointed champions for each 
element and then developed objectives to meet the overall strategies. 
Nurse Corps officers are champions for the Leadership, the Performance 
Evaluation, Recognition and Rewards, and the Education and Training 
elements.
    The future endeavors of the Task Force will include planning for 
the roll-out of the AFMS Customer Service Culture Change Plan to all AF 
Medical Treatment Facility (MTF) next spring. The Task Force will 
provide support to five model sites, taking their ``lessons learned'' 
to refine the Customer Service tools and pushing for inclusion of 
customer service training in all AFMS formal courses.
    A revolution in customer service culture in the AFMS is on the 
horizon. The TNF is committed to continually improving our skills in 
patient advocacy and supporting our personnel in their initiatives to 
ensure quality care to delighted customers.
Goal No. 3: Forge Ahead as a Full Partner in the AFMS Building Healthy 
        Communities:
    Goal statement.--Integrate nursing's unique healthcare expertise 
into building robust prevention-based health and wellness, which will 
make healthy communities cultural and societal realities.
            Prevention-based Health and Wellness
    Nurses and medical technicians have traditionally been the front-
line champions of this goal through day-to-day health promotion and 
utilization management (UM) activities. Approximately 75 percent of the 
AFMS health promotion and UM officers are nursing personnel.
    Disease management is a part of UM methodology, but it represents a 
change in paradigm. What can disease management do for the AFMS? A 
review of the literature has demonstrated that managed care 
organizations which have embraced disease management have documented 
improved quality of care and services, and cost efficiencies. An 
effective disease management strategy seeks to reduce the variability 
in treatment between providers and individuals. Each phase of the 
patients' care, from an ambulatory preventative visit, to illness, then 
recovery must coincide with the disease management strategy. Thus, a 
population health management approach requires specific techniques, 
skills, and strategies in addition to those needed in clinical 
practice. Nurses and medical technicians have the basic skills to fully 
contribute to these programs. We have targeted nurses to take on the 
role of the Health Care Integrator (HCI). We anticipate assignment of 
an HCI at every MTF to be the driving force in case management and in 
coordinating a continuum of care and services for the patients in the 
AFMS system.
    With the patient's best interest in mind, nurses and medical 
technicians have stepped forward with vitality to take on this new 
role. In my previous testimony, I described the HCI role. The HCI's 
responsibilities range in depth and scope based on individual MTF 
needs, however the majority are extensively involved in disease and 
population health management. We believe the HCI's can make a 
tremendous impact at MTF's supporting large and diversified 
populations. We invested in our HCI's by sending them for training at 
the 1998 AF Worldwide Prevention Conference where they participated in 
presentations and panel discussions by the LoveLace Healthcare 
Innovations Corporation and other AF HCI's. The educational objectives 
focused on the application of disease management programs to day-to-day 
nursing practice and the successful implementation of the HCI role.
    Since its introduction in 1997, 48 percent of the AFMS facilities 
have resourced an HCI, as compared to 11 percent a year earlier. Of the 
facilities that do not have HCI's assigned, 75 percent plan to do so in 
the next year. We anticipate the HCI will become the focal point for 
our enrolled population and the conduit between the Primary Care 
Manager (PCM), the patient, and the community at large. We believe the 
HCI will be the bridge to successful and sustained implementation of 
the DOD's Putting Prevention into Practice Program. I would like to 
highlight some of the successful disease and population health 
management initiatives implemented at our facilities.
    Ambulatory clinics across the AFMS have consistently developed 
Nurse-Run clinics, primary care triage services, and Ambulatory 
Procedure Units (APU). Typically Nurse-Run clinics focus on managing 
asthma, hypertension, and diabetes with HCI's providing case 
management, patient education, follow-up, and coordination of care 
between the PCM's, referral services and patients. Some facilities have 
expanded management activities to routine women's health and 
obstetrical services. Nurses in primary care triage services use 
approved protocols to manage acute appointments, referrals, and provide 
home and self care advice.
    The triage service was especially valuable at Offutt AFB in 
Nebraska during peak influenza season. The triage nurses responded to 
266 patient calls per day with home care advice sufficient for 14 
percent (37) of the callers. The 2nd Medical Group (MDG) at Barksdale 
AFB, Louisiana, the 60th MDG at Travis AFB, California, and the 354 MDG 
at Eielson AFB, Alaska, have reassigned consult management from 
administrative personnel to nurses or medical technicians, exploiting 
their clinical expertise, rapport with PCM's, and problem solving 
skills. This move has changed a historically ``bumpy'' system into a 
smooth process with fewer delays in referral appointments, fewer missed 
appointments, and reliable provider follow up.
    The 74th MDG at Wright-Patterson AFB, Ohio, instituted pediatric 
disease management strategies for special needs children. In the past, 
the parents of these children were on their own to identify and access 
all needed resources in the military and civilian medical communities. 
The HCI for this population enhanced the holistic multi-disciplinary 
team approach, coordinating services addressing the family's clinical, 
psychological, financial, and social needs. Similarly, the 45th MDG at 
Patrick AFB, Florida, and the 90th MDG at F.E. Warren AFB, Wyoming, 
instituted pediatric asthma clinics. Intensive patient education in 
these clinics improved home care treatment and decreased readmission 
rates.
    Across the board, nurses and medical technicians played pivotal 
roles in converting inpatient medical units to 23-hour APU's. The APU's 
were designed to provide nursing care services to patients on an 
outpatient basis such as administering intravenous antibiotics and 
intravenous hydration, performing dressing changes, giving wound care, 
and offering extended post-procedure monitoring. This is a primary 
example of offering customer convenience and point of contact quality 
care. Wright-Patterson developed a Nurse-Run Ambulatory Infusion 
Service for oncology patients with chemotherapy regimes. Previously, 
these patients were admitted to inpatient units because of traditional 
practice, insufficient staffing in the clinic, and inadequate clinic 
hours. Since implementation, the outcomes are overwhelmingly positive. 
The service provides therapies at the appropriate level of care, 
patients are pleased with reduced time in treatment, and admission for 
that treatment have decreased from 117 to 19 per year.
    In summary, I am proud to say the TNF has often provided the vision 
and tenacity to move these programs forward. These are just a few 
examples of nursing programs that directly support the AFMS strategic 
initiative of building healthy communities.
Goal No. 4: Champion an Integrated Ready Force:
    Goal statement.--Maximize medical readiness capability with the 
right mix of multi-skilled personnel, incorporating joint training and 
interoperable equipment.
    The AFMS continues to lean forward in the areas of medical force 
protection and has made great strides in the past year to improve AE 
operations, advanced trauma education, Biological Warfare/Chemical 
Warfare (BW/CW) protection, Self Aid and Buddy Care (SABC) training, 
health promotion and disease prevention programs. The TNF is an 
integral part in the development, implementation, and deployment of all 
these programs. The AFMS has not lost sight of the fact that our number 
one job is to ensure we have a ``healthy and fit force.'' Through these 
programs, our Airmen will be ready to do their job, whenever and 
wherever that may be.
    As our Surgeon General pointed out in his testimony, the 
operational tempo (Ops Temp) in the past year for the AFMS has again 
been extremely high. The deployment of medical forces in support of 
sustainment operations, humanitarian assistance, and disaster relief 
has continued to grow. The AFMS has directed many of its energies in 
the past years to operations identified as Operations Other than War 
(OOTW). Such involvement directly supports our goal to keep the skills 
of our nurses and medical technicians honed for rapid deployment while 
truly assisting those in need; a definite Win-Win situation for all 
involved. Now, I will highlight the OOTW's the TNF has supported.
            Sustainment Operations
    Operation Desert Focus.--The ongoing support to Southwest Asia 
(SWA) has been a Total Nursing Force commitment from all Active Duty, 
AFRC, and ANG medical specialties. A 25-bed Air Transportable Hospital 
(ATH) remains deployed to Prince Sultan Air Base (PSAB), Kingdom of 
Saudi Arabia. It is staffed with 65 medical personnel on a 120-day 
rotational deployment. Aeromedical evacuation assets are collocated 
serving as the hub for tactical and strategic patient movement. In 
addition, the ARC was tasked to provide complete coverage of the ATH. 
The ANG's rotation begins in April 1998.
    Our enlisted Independent Duty Medical Technicians contribute to a 
theater medical surveillance team positioned at PSAB to monitor the 
health of personnel pre/post deployment and to conduct environmental 
surveillance of sites within the SWA. They also support an in-theater 
clinic at Eskan Village in Riyadh and numerous Squadron Medical 
Elements (SME) deployed with operational flying units.
    Operation Joint Guard.--The TNF remains engaged in Bosnia and 
Croatia primarily in aeromedical evacuation missions and staffing a 5-
bed Air Transportable Hospital and a Mobile Air Staging Facility (MASF) 
asset.
    Operation Uphold Democracy.--The AFMS was tasked by the Joint Chief 
of Staff to deploy a 10-bed ATH to support deployed forces at Port Au 
Prince, Haiti. The TNF performed numerous humanitarian projects within 
the Haitian community during this operation.
            Humanitarian Civic Actions (HCA)/Disaster Relief
    The AFMS provides medical relief for natural and man-made disasters 
throughout the world. From contributing to flood relief efforts in 
Grand Forks, ND, to responding to military and civilian airline 
accidents, to providing health care to refugees, the TNF is a full 
participant. These programs enhance our National and Military Strategic 
Objectives, provide quality healthcare to a needy population, and 
imparts good healthcare practices to future generations.
            Joint Training Through Mirror Force
    A major objective of the TNFSP Goal No. 4 is to arrange (joint) 
training to meet contingency needs. As has been briefed in previous 
year testimonies, Mirror Force is an Air Force Leadership initiative by 
the Active, AFRC, and ANG to share similar training and missions, 
optimizing utilization efficiencies. Mirror Force is designed to bring 
the Active, Reserve, and Guard personnel together into a seamless, 
medically ready force. The TNFSP directly links to this strategy.
    Recently the AFMS established active duty nurse positions at the AF 
Reserve Region Support Groups (RSG) at each of the three AF Reserve 
Numbered Air Forces (NAF). As Directors for Clinical Readiness 
Programs, Training, and Readiness missions, these nurses will be 
responsible to the RSG Surgeons General for all clinical professional 
matters and provide expert guidance and operational guidance to all 
subordinate medical and aeromedical units within the NAF's. This 
initiative will enhance readiness training for 2,500 medical officers 
and 5,000 enlisted technicians and offers a ``Total Force'' approach by 
developing a team composed of active duty, air reserve technician and 
reserve personnel.
    To promote interoperability the DOD conducted one of the largest 
joint medical training exercises in history. In June 1997, more than 
2,000 Active-Duty, Reserve and Army, and Air National Guard doctors, 
nurses, medical technicians from all services came together for Patriot 
Medstar 1997. The exercise helped military medical professionals 
assess, treat, stage and evacuate ``wounded'' soldiers from a fictional 
battleground. Initiatives are underway to make this a recurring Joint 
bi-annual DOD Patient Evacuation exercise.
    The Nursing Department at the USAF School of Aerospace Medicine, 
Brooks AFB, Texas stood up a total force training endeavor in the past 
year. The Critical Care Air Transport Course was established and began 
accepting students this year. Flight nurse instructors put together 
this training program to meet the patient care skills needs in both 
peacetime and wartime environments. It trains Total Force physicians, 
nurses, and enlisted specialists who may be required to provide 
critical care support to AE patients.
    A prime example of the partnership of the TNF in support of medical 
readiness is the training initiative called TopSTAR (Sustainment 
Training/Advanced Readiness). The TopSTAR initiative was identified in 
last year's testimony, as a total force program creating optimal and 
efficient medical training opportunities for all clinical specialties 
required to perform wartime tasks. The primary driver for the 
initiative is the reduction of Air Force inpatient MTF's as medical 
readiness training platforms. In 1988 the AFMS operated 82 hospitals 
with 5,053 operating beds. Currently we have 37 hospitals with 1,487 
beds. It will be impossible to meet all training requirements in the 
remaining inpatient settings for our active duty medics, not to mention 
our reserve component medics.
    TopSTAR was implemented in February 1998 at its first training 
platform at Wilford Hall USAF Medical Center in San Antonio, Texas. The 
training is conducted in a simulated environment, using state-of-the-
art mannequins and computer-based instruction. The highly technical 
nature of medical skills training requires extensive practice in both 
actual and simulated patient care settings. Simulated wartime 
environments can be used in the lab to practice critical skills and 
procedures prior to actual patient care or deployment and improve 
access and training opportunities for medical personnel. After a 2-week 
rotation, the students complete 100 percent of their sustainment 
training requirements. Previously, this sustainment training was 
fragmented and spread out over the entire year. We hope to identify 
west and east coast sites to expand this valuable program in the years 
ahead.
            Standardized Medical Readiness Training System
    Another task under the TNFSP Goal No. 4 of the TNFSP is to deploy 
the Standardized Medical Readiness Training System (SMRTS) 
implementation guidelines for nursing to the field. SMRTS is an 
automated system to track standard medical readiness training for all 
medical personnel. The original SMRTS database was quite comprehensive 
but was cumbersome and redundant. Nursing Services took the lead in 
reengineering the SMRTS. System changes have centered on restructuring 
the database to provide user requested features and system flexibility 
and compatibility with other data base management programs. The Air 
Force Inspection Agency (AFIA) is actively engaged in ensuring all 
training programs are in compliance with Air Force directives.
Goal No. 5: Effectively Use AF Nursing Resources
    Goal statement.--Capitalize on Air Force nursing personnel to 
optimize support for the AFMS mission requirements. We want to ensure 
the TNF maintains the proper skill mix, grade structure, and experience 
balance necessary for mission accomplishment. We begin this sustainment 
process through accessions and recruiting efforts, accompanied by force 
sculpting of size, skill mix, and grade requirements.
            Accessions
    Since 1979, the entry-level educational requirement for 
commissioning as AFNC officers was a Bachelors of Science in Nursing 
(BSN) degree. In response to the nursing shortage in 1987, the AFMS 
altered the entry-level requirement to include registered nurses 
graduating from an Associate Degree in Nursing (AND) or Diploma 
programs. However, the candidates must also have completed a 
Baccalaureate degree in a health science field. In the past several 
years, the AFMS attained its nursing accession goals. We have an ample 
source of entry level, novice nurses with BSN degrees. In 1997, the Air 
Force senior nursing leadership carefully scrutinized our accession 
success rate and the AFNC manpower requirements. The AFMS changed the 
entry-level educational requirements for AFNC commissioning to a 
minimum of a BSN degree.
    BSN nurses have the requisite knowledge base, flexibility, and 
experience to teach our medical technicians, and collaborate with 
interdisciplinary professionals and agencies. Our nurses plan and 
evaluate health care for individual patients and communities in a wide 
range of settings. Military nurse officers require the same enhanced 
leadership skills and professional expertise required by other medical 
service and line officers. In the rapidly changing U.S. health care 
environment, the military nurse must be educated to focus on patient 
education, health promotion and disease prevention. Air Force nurse 
officers must independently lead, manage, teach, and integrate health 
care across the spectrum of peacetime, war, and humanitarian 
operations.
            Recruitment
    In order to meet the AFMS strategic initiative and the more complex 
demands of our present and future health care environment, we want to 
enhance our force structure. We refocused the accession bonus policy to 
incentivize difficult recruitment categories, such as nurses with three 
or more years of nursing experience, and nurses with specific advanced 
academic degrees.
    A recruitment initiative I described in last year's testimony was 
the Cadet to BSN/MSN program. As early as 1992, cadets at the United 
States Air Force Academy had voiced interest in entering the AF Nurse 
Corps. I am pleased to report that the Air Force Academy now has 
scholarships for cadets who want to attend nursing school. In the fall 
of 1997, two cadets entered Vanderbilt University. Starting with the 
Class of 1998, up to five cadets annually will have the opportunity to 
attend nursing school. To assist these cadets in validating that a 
health profession career is what they want, the U.S. Air Force Academy 
Hospital established a shadow for those who wish to enter the Health 
Profession.
    Finally, an area of concern in previous testimony was the 
insufficient number of obstetrical (OB) nurses we have in our 
inventory. We addressed this issue by increasing the number of 
accelerated obstetrical training sites and establishing a rigorous on-
the-job-training program. These two initiatives, coupled with the 
incremental closure of OB services across the AFMS, brought the OB 
nursing shortage under control.
            Force Sculpting: Rightsizing
    The AFMS Mission Support Plan (MSP), accomplished in late 1997, was 
a ``bottom-up'' review process in which each MTF identified their plans 
for health care delivery and resource requirements through the year 
2003. The changes in facilities and reduction of inpatient beds 
significantly decreased nursing manpower requirements in these patient 
care areas. We support this downsizing of clinical nurses assigned to 
inpatient areas.
    Conversely, the number of nurses in ambulatory care settings will 
need to increase, not in management roles, but in providing disease and 
population health management, patient education, and coordination of 
care. The Community Health Clinic (CHC) model for primary care (whether 
hospital-based clinic or freestanding clinic) was developed by the 
AFMS. The staffing pattern for CHC's is population-based--the number of 
providers needed is based on enrollee population and case-mix. The 
nurse to provider ratio defined in the CHC model is one nurse for every 
two providers. The Surgeon General's office will be conducting an 
``enterprise'' level multidisciplinary review to ensure the MSP 
manpower requirements support the AFMS strategic initiatives. From a 
nursing perspective, the review will focus on the ratios of nursing 
personnel to providers and the evaluation of the appropriate mix of 
physician and nurse providers in the CHC's, women's health, primary 
care, pediatric and mental health environments.
    Even after robusting nursing requirements into the outpatient 
areas, we anticipate a reduction of nursing manpower requirements over 
the next five years. In reviewing potential rightsizing goals for the 
AF Nurse Corps, it appears all nurse specialties except flight nurses 
could be decreased by varying degrees. Planning at this point indicates 
that in order to meet the overall fiscal year 2003 end strength, we 
need to increase annual losses approximately 130 above and beyond 
normal attrition (separations/retirements). For fiscal year 1999 we 
anticipate that voluntary reduction options, such as Temporary Early 
Retirement Authority (TERA) and Limited Active Duty Service Commitment 
(LADSC) waivers should be available to NC officers. Reduction 
incentives would be limited to the specialties with rightsizing targets 
beyond normal attrition. For nurse-provider specialties, end-strength 
numbers can most likely be achieved through normal attrition and by 
decreasing the number of nurses selected for graduate education to 
enter the provider specialty, and/or by decreasing recruiting goals for 
those specialties.
            Force Sculpting: Skill Mix
    Graduate Education.--The professional practice model of nursing 
demands that all nurses practice in each of four domains: clinical, 
research, education and administration. Graduate education prepares the 
nurse for expanded roles in one or more of these domains.
    We have been successful at validating the wartime requirement for 
increased numbers of Women's Health and Family Health Nurse 
Practitioners. As we deploy TRICARE for peacetime healthcare, there is 
an increasing need for a mixture of these nurse practitioners to 
provide cost effective quality care.
    The Air Force Nurse Corps will continue to stress the importance of 
Master's and Doctoral prepared nurses as it is a hallmark of our 
profession and supports our changing mission. We analyzed our advanced 
academic requirements for each MTF and coded each authorization that 
required an advanced degree for the position. We used these codes to 
participate in the Inter-disciplinary Forecast Board (IFB), as 
described in General Roadman's testimony. The IFB process compares the 
current inventory of specialists with the number of coded 
authorizations for that specialty, and forecasts the training 
requirements. The IFB enhances our efficiency and accuracy in 
forecasting advanced academic education needs and non-clinical 
fellowships.
    Uniformed Services University of the Health Sciences (USUHS).--The 
USUHS Graduate School of Nursing (GSN) was officially approved on 
February 26, 1996. The mission of the GSN is to prepare advanced 
practice nurses (APN's) at the graduate level to deliver primary and 
chronic care, including anesthesia services, to active duty members of 
the Uniformed Services, their families, and all other eligible 
beneficiaries. USUHS has a worldwide perspective for education, 
research, and consultation uniquely related military health care and 
military medical readiness. Three Air Force Nurse Corps officers are 
assigned to the GSN faculty, two to the Certified Registered Nurse 
Anesthetist (CRNA) program, and one to the Family Nurse Practitioner 
(FNP) program. By incorporating USAF faculty and training into the 
USUHS program, we saved the USAF approximately $300,000 in civilian 
contract educational costs. With the addition of these officers, the 
faculty is now more Tri-service and more military oriented. Already I 
am hearing how these AF nurse instructors contribute significantly to 
curriculum development and student mentoring.
    In April 1994, the CRNA Program was accredited, permitting 
admission of students. Recognizing the outstanding training and cost 
savings offered by the USUHS CRNA program, the Air Force has now 
assigned all CRNA students to the USUHS GSN. This program allows us to 
continue the tradition of military trained CRNA's at a lower cost then 
we have ever experienced before. Additionally, we have evaluated the 
program and believe it to be one of the strongest in the country. The 
USAF CRNA students graduating from the USUHS program have had a 100 
percent success rate on their board certification exams.
            Force Sculpting: Enlisted Specialists
    A resounding success story is the increasing number of medical 
technicians utilized in non-traditional roles like managed care, 
readiness, and health promotion. Exploiting their professional talents 
acts as a force multiplier increasing efficiency without degrading 
effectiveness. Another success story is the commissioning of enlisted 
Airmen who have completed a Bachelor's of Science Degree in Nursing. 
The TNF is committed to retaining these stellar individuals as NC 
officers who have already demonstrated their leadership potential and 
investment in the AFMS. Therefore, the AFMS chartered an Inter-
disciplinary Process Team to develop a marketable total force career 
track for enlisted medical personnel, providing them with opportunities 
to achieve appropriate academic credentials or commissioning. Initial 
focus will be on medical technician personnel with commissioning 
opportunities in the AFNC.
Goal No. 6: Employ and Integrate Technology and Research:
    Goal statement.--Exploit cutting edge technology and research to 
manage information and advance nursing practice.
            Modeling and Simulation Technology in Medical Readiness
    NC officers have recognized the value of advanced technologies and 
have been the driving force in its development and use. Currently, Air 
Force medical readiness is using databases and simulation models to 
answer a variety of questions about our medical deployment packages in 
the areas of staffing, equipment, configuration and patient management. 
We call our simulation models Unit Type Code (UTC) Validation Models. 
The models simulate patient care within a given facility created by the 
user selecting a variety of packages. As the model runs, we analyze 
where patient bottlenecks occur. We evaluate the maximum number of 
major equipment items such as ventilators or cardiac monitors in use at 
one time, then recommend changes or an augmentation package for a 
particular casualty stream. The models allow us to test changes in 
aeromedical evacuation policies to see how it effects staff and bed 
utilization. Similarly, we can also analyze the difference in patient 
care outcomes between deploying a specialty surgeon versus a general 
surgeon.
    Exploiting modeling and simulation technology provides many 
benefits in the areas of cost containment and increased efficiency. 
Organizing and conducting large readiness exercises consumes a great 
deal of resources and time. A smaller cadre of personnel can run models 
against many different scenarios in a very short period of time. The 
results can be more exact and provide valuable information for 
decision-making or planning real time exercises. Modeling is also a 
defendable, valid and auditable means to determine medial readiness 
manpower requirements.
            Telemedicine Technology in the Aeromedical Evacuation (AE) 
                    Environment
    Almost two years ago, the Air Force stood up the first DOD working 
group to establish an AE Strategic Plan for the insertion of 
telemedicine into the aeromedical environment. Their charter was to 
provide telemedicine capabilities throughout the AE continuum, from the 
point of entry into the system to the patient's final MTF.
    Telemedicine, or telehealth, is integrated across the military and 
civilian health care continuum. It is a technological tool that 
provides quality consultation and assessment to patients separated from 
medical providers by time and space. The insertion of this capability 
into our aeromedical environment leverages our readiness capability by 
placing advanced medical technologies closer to the battlefield. It 
supports changing doctrine of a smaller forward footprint, earlier 
evacuation of injured soldiers and movement of stabilized verses stable 
patients. The Bottom-line: telemedicine provides communication and 
medical capabilities essential in our quest for quality care to 
battlefield soldiers anywhere, anytime.
    As the champion for this effort, I brought 45 participants from all 
walks of the DOD telemedicine and user communities together in May of 
1996. We developed the strategic plan for the insertion of Telemedicine 
into the AE environment. Of this group, one-third were TNF personnel. 
The intention of this strategic plan was to insert a system that makes 
a difference in how we provide care, not to insert state of the art 
technology that is not wanted or needed by AE system users.
    Dedicated, reliable communication from the air to the ground, and 
back to the air was identified as the most desired attribute of 
telemedicine. Due to severe limitations in our present communication 
systems, changes in patient's conditions, the need for further clinical 
information, and updates prior to landing are almost impossible to 
relay in today's AE environment. This has always been a frustration for 
flight nurses and aeromedical evacuation technicians as they routinely 
provide care in the air without direct access to a physician.
    A Breakthrough Area was initiated to architect and implement a 
proof of concept demonstration to document the need for 
telecommunication from ground to air to ground. With our current 
operations of transporting stabilized rather than stable patient loads 
during peacetime and contingency operation missions, this 
communications capability is vital to safe quality patient care. The 
operational demonstration was conducted September 22-27, 1997 and 
involved ``live'' channel AE missions using C-141, C-9, and C-130 
airframes for a total of 70.6 flying hours. This demonstration used 
commercial off-the-shelf computer systems and applications in addition 
to existing airframe communication systems. We were able to validate 
the use of e-mail and ``chat'' to and from the aircraft to ground AE 
command and control elements. We are now working toward our Phase II 
proof of concept demonstration in the Pacific Air Forces Theater.
            Information Technology
    The TNF maintains a viable and dynamic homepage website offering 
access to real-time information to AF nursing personnel around the 
world. We reached a significant milestone this year through the use of 
this medium. Our constituents now have an INPUT FORM they can access 
from the Nursing Homepage, complete it and forward to Headquarters Air 
Force, Nursing Services. The senders receive an immediate return 
receipt. Nursing Services' then forwards the suggestion to the 
appropriate goal group for consideration. Through this form all nursing 
officers, enlisted and civil service personnel have the opportunity to 
actualize the Total Nursing Force vision.
            Technology in Education
    Contemporary training of the USUHS CRNA program requires innovative 
technologies while maintaining traditional, proven techniques. A 
diversified clinical and basic science cadre of instructors is teaching 
a unique program. The classrooms and library have several software 
packages ``on line'' and these are used during the Anatomy/Cell Biology 
Course. In addition, computer-aided instruction is routinely used to 
teach human anatomy, cell biology, and nervous system structure and 
function. These courses utilize the Visible Human Project, which is 
available through the National Library of Medicine. Anesthesia 
Simulators allow students to practice anesthetic procedures in a more 
controlled virtual environment before progressing to the clinical area. 
These programs are a high-tech link between didactic and clinical 
education.
            Distance Learning Technology
    The DOD Federal Nursing Chiefs requested that APN's in the 
TriServices complete a Master of Science Degree in their specialty. A 
distance learning CRNA advanced degree program is now offered by the 
USUHS GSN. It was established to afford military CRNA's the opportunity 
to complete an advanced academic degree even though they are 
geographically separated from USUHS. Students participate in discussion 
groups over website technology and use video teleconferencing for one-
on-one interaction with their instructors. This distance learning 
program is able to reach out to military nurses around the world to 
provide them an opportunity for higher education. There are five 
students enrolled, one is stationed as far away at Turkey and one is 
assigned to shipboard duty. The program eliminates the need for 
expensive relocation assignment and the cost of tuition.
    In November 1996, the TNF stepped out and established a working 
group to define available distance learning program options for nurses. 
Distance learning provides an economical, effective, and efficient 
method of achieving academic goals even though students may be 
geographically separated from colleges or universities. The working 
group developed a Distance Learning Guide and published it on the AF 
Nurse Corps website and in hard copy. The guide is a quick reference 
for distance learning websites, descriptions of degree-awarding 
programs, and listings of colleges and universities offering distance 
learning nursing courses. The guide focuses on programs that may be of 
interest to our enlisted and officer force in pursuing bachelor's, 
master's, and doctoral level courses or degrees.
            Military Nursing Research
    Thanks to Congressional financial backing for the Tri-service 
Nursing Research Program, Air Force nursing research continues forward 
again this year. Between 1992 and 1995, 13 of the 75 Tri-service 
nursing research studies came from the Air Force: 1 of 8 (13 percent) 
in 1992, 5 of 20 (25 percent) in 1993, 3 of 24 (13 percent) in 1994, 4 
of 23 (17 percent) in 1995, 7 of 29 (24 percent) in 1996, and 4 of 30 
(13 percent) in 1997. Proposals completed through Tri-service Nursing 
Research Program during those years included: Readjustment of Gulf War 
Veteran Women/A Follow Up, Healing Touch, Impact of Story Telling on 
Burnout/Nursing Expertise, the Air Force Nurse Transition Program, and 
Leadership Development. Through the fiscal year 1998 Department of 
Defense (DOD) Appropriations Bill for military nursing research, 12 of 
the 63 proposals for Tri-service nursing research were forwarded by the 
AF Nurse Corps for consideration by the Tri-service Nursing Research 
Program oversight body. In line with legislative language in the 
appropriations bill, proposals submitted by Air Force nurses in the 
Active-Duty, Guard, and Reserve Command included: Prenatal Care for 
Women In and Out of the U.S., Preventive Services: Role of the Nurse 
Practitioner, Nurse Roles During Deployment to Croatia: A Grounded 
Theory, and Health of Persian Gulf War Veteran Women.
    Our medical centers have spearheaded the TNF efforts to ``change 
the culture'' and infuse research into practice. Assignment of Clinical 
Nurse Researchers (CNR) to each of our clinical investigative sites has 
provided the integral and essential link for nursing staff to 
incorporate research into day-to-day activities. The CNR's are tasked 
with increasing the nursing staff's knowledge and participation in 
clinical research, increasing dissemination of research findings, and 
then utilize research findings.
    Investigators at Wilford Hall Medical Center (WHMC) received four 
TriService Nursing Research grants over the past 18 months. The studies 
are ongoing, and although no results are available, we anticipate the 
findings will have direct applicability to the AFMS. Nursing research 
will study: Effects of Position on Chest Tube Drainage and Pressure, 
Efficacy of Three Fluids on Hydration During BW/CW training, Critical 
Care Experience and Training During Aeromedical Transport, and 
Experience of Chief Nurses in Military OOTW's. In addition, the number 
of nursing research studies at WHMC has increased 900 percent since 
assignment of the CNR. In the previous 18-month period there were two 
nursing research protocols, currently there are 18. A study in the 
prevention of blister formation changed the management Basic Military 
Trainees preventing unnecessary outpatient visits and lost training 
time. Investigation of the safe time frame for use of disposable oxygen 
humidification bottles for each patient led to a decreased consumption 
rate, saving $6,000 annually in resupply.
    Since assignment of a CNR to Keesler Medical Center in Mississippi, 
nursing staff conducted and collaborated on eleven research studies and 
clinical trials as compared previously to two studies. Research topics 
range from health outcomes in diabetic management, effectiveness of 
smoking cessation programs, music therapy, and clinical trials testing 
alternative antibiotic treatment of penicillin-resistant pneumonia and 
use of Interferon as a treatment for interstitial fibrosis. For the 
first time, three research proposals were submitted to the Tri-Service 
Nursing Research Program for extramural funding. The proposals will 
study self-help for women with breast cancer, management of 
hypertensive patients through clinical nurse specialist interventions, 
and improvement of mother/infant outcomes by a locally designed and 
implemented prenatal program.
    David Grant Medical Center (DGMC) in California conducted three 
different types of research classes per quarter for nursing personnel. 
Subsequently, nursing personnel received over 254 continuing education 
units at no external cost to the Air Force. Six nursing studies were 
completed in clinically diverse areas such as prenatal fatigue for 
active duty mothers, birth control, visual changes with hyperbaric 
treatment, assessment of pitting edema, critical care nursing 
experience, and value perspectives of military officers. Four more 
clinical studies are ongoing, with three more studies in the planning 
process.
    A recent Air Force graduate of the USUHS Nurse Anesthesia program 
won the American Association of Nurse Anesthetists' 1996 Student 
Writing Contest for the study she prepared on the ``Incidence of 
Visible and Occult Blood on Laryngoscope Blades and Handles,'' 
published in the Association's June 1997 journal. This paper discussed 
the extent of contamination on anesthesia equipment that was identified 
as being ready for patient use. The study confirmed that more rigorous 
decontamination protocols must be instituted to ensure complete removal 
of blood prior to sterilization.
    An Air Force Associate Professor at the USUHS is in the third phase 
of a large international project to study the education and utilization 
of Nurse Anesthetists in 177 World Health Organization (WHO) member 
countries. The WHO collaborated in this international study to provide 
information with respect to the quantity and quality of anesthesia care 
delivered by nurses in all countries. This study is providing 
information that can serve as a basis for the future planning of 
anesthesia manpower resources and education. The results will be of use 
to the MHS as health care providers and executives search for cost-
effective approaches for the provision of care and the management of 
services for their beneficiaries.
    Mr. Chairman and distinguished committee members, I believe you can 
see that Air Force nursing is generating lines of research aimed at 
issues critical to healthcare delivery, whether in the military or 
civilian sector.
                               conclusion
    In closing, I feel a great sense of pride and accomplishment as the 
Corps Chief of such an extraordinary group of officer and enlisted 
nursing professionals. The Total Nursing Force is eager to work tough 
systemic issues impacting our people, health care, and outcomes. Our 
Total Nursing Force Strategic Plan scripts the foundation of an 
evolving, living document addressing the challenges and opportunities 
facing Nursing Services and the Air Force Medical Service today and 
into the 21st century. As I address you today, I can say unequivocally 
that Air Force Nursing personnel are ready, willing, and able to 
protect our forces, protect our national interests, and advance 
democracy and freedom anytime, anywhere. Mr. Chairman and committee 
members, thank you for recognizing the invaluable contributions of 
military nursing. We appreciate your support in behalf of the 
Department of Defense, the Air Force Medical Service and the patients 
we serve.
STATEMENT OF CAPT. MARY ANNE GARDNER, DEPUTY DIRECTOR, 
            NAVY NURSE CORPS

    Senator Stevens. Now we turn to you, Captain Gardner.
    Captain Gardner. Mr. Chairman, Senator, on behalf of 
Admiral Engel who unfortunately could not be here today, I am 
honored to attend and wish to thank you for this opportunity.
    As Admiral Engel prepares to relinquish her position as 
Director, I would like to take the opportunity to highlight a 
few of Navy Nurse Corps' accomplishments and relay some 
concerns.

                              Nurse's role

    In the changing U.S. health care environment, the military 
nurse's role remains unique. As we shift our practice focus to 
health promotion and illness prevention, we must continue to 
care for patients who are critically ill due to disease or 
trauma. At the same time, we must remain prepared to go into 
harm's way to care for casualties in our operational missions. 
I am proud to relate some of the work that Navy nurses of all 
grades, assignments, and practice settings are doing to 
implement and support the seven goals of the Nurse Corps' 
strategic plan: operational readiness, nursing practice, 
quality of life, leadership, participation in political 
processes, education, and resources.

                         Operational readiness

    Our fundamental goal and reason for existence is 
operational readiness. Over 5,300 active and Reserve nurses 
constantly prepare and are ready at a moment's notice when the 
call comes to deploy. Navy nurses excel in their abilities to 
practice diverse clinical nursing skills in varied locations 
such as aircraft carriers, hospital ships, fleet surgical 
teams, and with the Fleet Marine Force.
    Operational readiness also means being instantly prepared 
for any event. A few examples include the recovery and 
treatment of survivors after the tragic crash of Korean Air 
flight 801 in Guam, deployment to Laos to aid in the 
humanitarian assistance program educating the local hospital 
staff on the setup and use of donated hospital equipment, and 
the upcoming exercise which will deploy the U.S.N.S. Comfort 
that Admiral Koenig spoke of.

                     utilization of Reserve forces

    Crucial to our ability to continue the daily peacetime 
mission, while maintaining a readiness posture, is the 
successful utilization of our Reserve forces. Providing total 
force integration, Reserve nurses superbly replace deployed 
active duty staff, thereby allowing continuation of our 
peacetime mission without interruption of care. They have done 
this at Naval Hospital Bremerton during the deployment of Fleet 
Hospital Five to Haiti, during operation Kernel Blitz, and we 
drill at regular mobilization sites.
    Contributory support at stateside, overseas, and other 
service military treatment facilities is another example. The 
reserves same-day surgery program, staffed by Navy, Army, and 
Air Force Reserves, moved to David Grant Medical Center at 
Travis Air Force Base, when Naval Hospital Oakland closed.

                         executing Health care

    But operational readiness also means keeping our service 
members fit, healthy, and at work. Navy nurses excel in 
planning and executing health care delivery wherever needed. 
This could be pierside, underway in local or extended ship 
operations, during plebe summer at the Naval Academy, or during 
various recruit training exercises such as the 54-hour Crucible 
Exercise at the end of Marine Corps recruit training.
    In more conventional settings, Navy nurses independently 
manage various patient populations in nurse-run clinics or they 
may be at headquarters staff, working on the strategic plan 
that Admiral Koenig also spoke of for women's health.
    In concert with the Surgeon General's goal of making 
TRICARE work, Navy nurses play pivotal roles at all levels, 
ranging from one-on-one beneficiary education at the facility 
level, to shaping and implementing policy at the lead agent and 
headquarters level, all in a tri-service environment.
    Recognizing health care delivery requires knowledge and 
proficiency related to information management and technology, 
Navy nurses informatics expertise is steadily rising as more 
and more nurses gain increasing education and even master's 
degrees in this exploding field. Nurses at all levels are 
closely involved with the development and deployment of current 
clinical information systems which assist providers in making 
decisions about diagnoses and treatments and also tracks 
readiness status for deployment.
    As telehealth awareness increases, there are endless 
possibilities for increasingly independent applications of 
telehealth by nurses, by corpsmen, and by other health care 
personnel. A few of the nursing applications include education 
conferences and the clinical applications might include wound 
care clinics or patient education efforts.
    In another new initiative, we have focused efforts on 
acknowledging and respecting cultural diversity among our 
customers and among our corps. Our recently formed cultural 
diversity working group is defining culturally competent care 
and identifying ways to ensure its delivery, with the 
understanding that culturally competent care is a major issue 
for Navy medicine and not just the Nurse Corps. On the local 
level, various commands have established diversity councils and 
nurses reach out into communities assisting groups in melding 
cultural practices with healthy lifestyles.
    As the complexity of our professional practice increases, 
it is absolutely essential to maintain a strong research 
foundation. Thanks to the support of this committee, nursing 
research in the Navy has made huge strides. Our doctorally 
prepared nurses at larger stateside and overseas facilities 
actively mentor the junior nurses in basic clinical studies, in 
grant writing, and practice-based research utilization. Study 
topics may range from military managed care in the tri-service 
nursing environment and clinical studies on the effect of pain 
and patient positioning on patient recovery. These research 
results will help focus our efforts and limited resources in 
areas that will positively impact our customers and provide 
potential cost avoidance.

                         Funding and leadership

    Continued funding availability is essential to our 
maintaining a solid base of nurse researchers. We continue to 
disseminate new findings to the caregivers in the field, 
yielding new scientifically validated information as the basis 
for our nursing practice.
    Leadership is one of the strongest attributes of the nurses 
in our corps. Admiral Engel, as you mentioned, exemplifies the 
changes allowing Nurse Corps officers to compete for promotion 
to O-8, or for a second star. Legislative initiatives that 
allow all Medical Department Corps to be eligible for selection 
as Surgeon General are certainly welcome. The recent revision 
of the DOPMA grade tables which allows more equitable promotion 
for Nurse Corps officers is having positive effects.
    By mid-1998, there will be 9 nurses in command and 15 
executive officers or chiefs of staff at military medical 
treatment facilities, lead agent staffs, and education 
commands. Reserve Nurse Corps officers currently command two of 
the four reserve fleet hospitals in the Navy and three of the 
nine stateside hospitals that will be receiving casualties 
after combat.
    The numerous accomplishments noted here would not be 
possible without the dedicated, educated, and motivated nurses 
who demonstrate nursing excellence on a daily basis. Essential 
foundations for this level of success have included a 
diversified accession plan, an all baccalaureate basic 
preparation sufficient numbers of master's prepared and board-
certified members, and increasing doctoral education for 
research and practice development.
    Legislative initiatives have both encouraged and rewarded 
these efforts. Accession bonuses for registered nurses, the 
nurse officer candidate program, special pay for nonphysician 
providers with board certification, incentive special pay for 
certified registered nurse anesthetists, and continuing funding 
for nursing research are welcome evidence of this committee's 
support for nursing.
    With an increased demand for baccalaureate prepared nurses 
by the civilian sector, coupled with early indications of 
decreased numbers of eligible nurse graduates in the 21st 
century, we depend on the continuation of these diversified 
programs to meet our requirements. Navy ROTC, the nurse officer 
candidate, and enlisted commissioning programs, combined with 
the direct recruiting accession bonus, in total form a robust 
source for the best qualified nurses.
    As Admiral Engel's tenure as the Director of the Nurse 
Corps comes to a close, we feel great pride in the 
accomplishments resulting from the hard work of so many people 
throughout Navy medicine. However, much work remains. 
Increasing demands despite limited resources require that our 
efforts be focused on maximizing and integrating our personnel 
and training assets. Rapidly changing technologies and health 
care environments, coupled with expanding joint humanitarian 
missions, chemical, biological, and radiological threats, 
increased operating tempos, and the implementation of TRICARE 
will continue to challenge our readiness.
    Mr. Chairman, thank you for the opportunity to share the 
successes of the Navy Nurse Corps with you. These achievements 
would not be possible without the continuing support of this 
committee. The Nurse Corps will always treasure that support 
because it has been instrumental in allowing Navy nurses to 
demonstrate that Navy nursing is nursing excellence.

                           prepared statement

    Admiral Engel looks forward to serving this great Nation of 
ours in a new capacity and providing the necessary leadership 
to develop tomorrow's leaders today as we move into the 21st 
century.
    Thank you.
    [The statement follows:]
             Prepared Statement of Rear Adm. Joan M. Engel
    Mr. Chairman and distinguished members of the Committee, thank you 
for inviting me to represent the Navy Nurse Corps. This is my last 
appearance before you as Director of the Navy Nurse Corps. Before I 
relinquish my tenure, I would like to highlight a few of our many 
accomplishments and to relay my concerns.
    The Compass that will continue to direct the Nurse Corps into the 
next century is our Strategic Plan--``Charting New Horizons.'' 
Fittingly named at its origin, our plan is a living document, which 
guides all aspects of our practice. Our plan is in concert with the 
goals of the Navy Medical Department's plan, ``Journey to Excellence--
Meeting the Challenges of the Future,'' as well as the Military Health 
System (MHS) plan. In the changing U.S. health care environment, the 
military nurse's role is unique. As we shift our practice focus to 
health promotion and illness prevention, we must continue to care for 
patients who are critically ill due to disease or trauma. At the same 
time, we must remain prepared to go into harm's way to care for 
casualties of our operational missions. I am proud to relate some of 
the work that Navy Nurses across the spectrum of grades, assignments, 
and practice settings are doing to implement and support the seven 
goals of our Strategic Plan: Operational Readiness, Nursing Practice, 
Quality of Life, Leadership, Participation in Political Processes, 
Education, and Resources.
    Our fundamental goal and reason for Navy Nurse Corps' existence is 
operational readiness. Over 3,200 active and 2,100 reserve nurses 
constantly prepare to be ready at a moment's notice when the call comes 
to deploy. On a daily basis, this means keeping diverse clinical skills 
honed for patient care, whether in a stateside military facility or 
assigned to one of many operational platforms worldwide. Nurse Corps 
officers' broad range of expertise and the comprehensive view they 
bring to any assignment are well utilized in multiple operational 
settings. They excel in their abilities to practice nursing in such 
diverse locations as aircraft carriers, hospital ships, Fleet Surgical 
Teams, and with the Fleet Marine Force. Additional assignments include 
the Chemical/Biological Incident Response Force, Flight Nursing at 
Scott Air Force Base, and as part of the Hyperbaric Medicine Team at 
the Naval Operational Medicine Institute in Pensacola. Nurses also play 
a significant role as medical planners at the Naval Doctrine Center and 
the Marine Corps Combat Development Center.
    Operational readiness also means being instantly prepared in 
response to sudden tragedy. Navy nurses from Naval Hospital Guam 
participated in the recovery and treatment of survivors after the 
tragic crash of Korean Air flight 801 with 254 passengers and crew 
onboard. Nurses from other military medical treatment facilities also 
played a key role in saving lives. Of the 32 survivors of this tragedy, 
19 received treatment in the Naval Hospital, many requiring intensive 
nursing care. Navy nurses provided significant psychological and 
debriefing support to the caregivers as members of our Special 
Psychiatric Rapid Intervention Team (SPRINT) deployed to this area.
    Navy Nurses routinely support numerous operational exercises 
including all annual Marine Corps Medical Battalion exercises. 
Exercises involving our hospital ships U.S.N.S. Mercy and U.S.N.S. 
Comfort are critical to giving Navy Nurses experience in an operational 
setting as well as supporting the exercise itself. In the upcoming 
``Baltic Challenge'' exercise, the U.S.N.S. Comfort will deploy 
significant numbers of Nurse Corps officers for an extended period. It 
will also test the lessons learned from Desert Shield/Desert Storm in 
meeting our day to day missions of peacetime health care in facilities 
supporting the deployment. In an unprecedented assignment, last fall, 
an operating room nurse was sent to Sepon Hospital, Laos, to support a 
Humanitarian Assistance Program--Excess Property program. The purpose 
of the mission was to educate the local hospital staff on the set up 
and use of donated medical equipment.
    Integral to our ability to continue our day to day peacetime 
mission while maintaining a readiness posture is the successful 
utilization and integration of our Reserve personnel. Reserve nurses 
contribute to the ``total force integration'', providing superbly 
skilled replacements for deployed active duty staff, thereby allowing 
continuation of our peacetime mission without decrement in care. Prior 
to Fleet Hospital Five's deployment to Haiti, staffed by Naval Hospital 
Bremerton, Naval Reserve medical department nurses and other health 
care personnel substituted for hospital staff members sent to Fleet 
Hospital training. During the active duty training phase alone, 
inpatient care was largely uninterrupted and over 1,000 patient visits 
with ancillary tests were accomplished in 9,600 hours of Reserve duty 
(all corps and specialties).
    Several other treatment facilities implemented the Integrated 
Medical Support Plan (IMSP). This plan emphasizes consistent Reserve 
drills at mobilization sites, enhancing both the Reservists' skills and 
the facility's ability to meet its peacetime and operational missions. 
A facility can gain six full weeks a year of a Reservist's time, 
instead of two weeks of annual training and disjointed portions of 
weekend drills. For example, with the IMSP implementation, National 
Naval Medical Center, Bethesda will become the primary drill site for 
approximately 450 officer and enlisted personnel. The positive effects 
of contributory support also extend to our overseas facilities. Twenty-
nine Nurse Corps officers are providing support at such diverse sites 
in Okinawa, Guam, Spain, Italy and Africa. Reserve nurses' contributory 
support also extends to the other Services. Specifically, the Naval 
Reserve Same Day Surgery program, which moved to David Grant Medical 
Center at Travis Air Force Base, California when Naval Hospital Oakland 
closed, is being staffed by Navy, Army, and Air Force Reserves.
    Operational readiness also means keeping the Sailors, Soldiers, 
Airmen and Marines fit, healthy and at work. Numerous efforts are 
underway to bring medical care to the deckplates, instead of the 
patient going to traditional clinic sites or medical treatment 
facilities. Navy nurses were integral in this planning and remain 
essential to the daily operations of pierside clinics in Norfolk and 
Okinawa. In addition to providing care in the clinic, the medical staff 
has expanded its services to include a broader spectrum of health care 
onboard several of our ships. For example, a nurse goes aboard these 
ships while in port or on local operations, supporting a weekly women's 
clinic, conducting regular health promotion classes and assisting the 
staff in routine care. Nurses independently manage various patient 
populations in wellness centers, cardiac rehabilitation programs and 
diabetes clinics, utilizing established protocols, focusing on 
improving patient outcomes.
    Navy Nurses practice at a broad scope of sites ranging from recruit 
training to the headquarters level. Joining other Navy medical 
personnel, they support Marine recruits as they complete their final 
boot camp exercise--``The Crucible.'' They are there throughout the 54-
hour exercise, assessing the potential risks, administering treatment 
for blisters and dehydration, and providing lessons learned to better 
prepare for the rigors of the next exercise. Traditionally responsible 
for the education and preparation of hospital corpsmen for independent 
roles, nurses are carrying out this important task in a variety of 
settings. They are assigned to Field Service Support Groups, Field 
Medical Service Schools, to Marine Forces Pacific, and they deploy with 
Amphibious Readiness Groups on Fleet Surgical Teams. The nurse-run 
Wellness Clinic at Quantico implements the Marines' ``Semper Fit'' 
program objectives during the annual summer ``Operation Bulldog'' 
exercise, and nurses are part of an augmented medical staff supporting 
Midshipmen at Annapolis during their plebe summer. At the headquarters 
level, Navy nurses are integral members of the Women's Health Strategic 
Planning Group (WHSPG), which coordinates, guides, and monitors women's 
health issues throughout the Navy Medical Department.
    In concert with the Surgeon General's goal of ``making TRICARE 
work,'' Navy nurses play pivotal roles in the TRICARE arena. 
Interfacing with all levels of customers, these nurses provide 
consumers and staff members comprehensive education regarding key 
TRICARE concepts. Their assignment to Lead Agents staffs ensures 
valuable insights into staffing, contracting, performance improvement, 
and standards of care, critical to shaping and implementing policy 
within the Military Health System (MHS). With the advent of managed 
care, the three uniformed Services have integrated Mental Health and 
Maternal Child services in the National Capitol Region. Uniformed and 
civilian nursing staff are shared between National Naval Medical 
Center, Walter Reed Army Medical Center and Malcolm Grow Air Force 
Hospital. Issues related to consolidation are actively addressed and 
resolved by multidisciplinary, TriService groups intent on keeping the 
patient as the focus and center of care-giving.
    As the complexity of our professional practice increases, it is 
absolutely essential to maintain a strong research foundation. Thanks 
to the support of this committee, nursing research in the Navy has made 
tremendous strides since its inception. There are doctorally prepared 
nurses at our larger stateside and overseas facilities who are actively 
mentoring junior nurses in basic clinical studies, in submission of 
grant proposals and in utilizing research results in practice. A few of 
the newly funded Navy studies for this fiscal year include: ``Barriers 
to Subspecialty Care in Military Managed Care;'' ``Effects of Pain on 
Postoperative Pulmonary Complications;'' ``Effects of Patients 
Positioning on Post-Surgical Recovery;'' ``Infant Birth Weights and 
Psychosocial Profiles of Mothers;'' and, ``Nursing in a TriService 
Environment.'' Results of these studies will help focus our efforts and 
limited resources in areas that will positively impact our customers 
and provide potential savings to the Navy. Funding availability for 
novice as well as experienced investigators is essential to ensuring we 
maintain a solid base of nurse researchers. Research Dissemination 
conferences help to get the new findings out to the caregivers in the 
field, yielding new, scientifically validated information as an 
underpinning for nursing practice.
    Recognizing that health care delivery requires knowledge and 
proficiency related to information management and technology, Navy 
nurses at the local and enterprise level are closely involved with the 
development, deployment and maintenance of current Department of 
Defense (DOD) clinical information systems and the development of the 
Computer-based Patient Record (CPR). These systems are much more 
sophisticated than bedside computers used to create a patient record. 
They will accept data from monitoring devices, feed data to personal 
information carriers, incorporate health risk assessment surveys, and 
accept and deliver information from multiple providers involved in the 
beneficiary's care. These information systems and their data assist 
providers and clinicians in making decisions about diagnoses and 
treatments, and also ascertain readiness status for deployment. The 
Computer-based Patient Record will ensure that data are accessible to 
authorized users at military health facilities worldwide; from medical 
centers to ships, field medical units; and, TRICARE network sites. In 
addition, automated information systems will aggregate data, without 
patient identifiers, to support research, utilization management and 
improvements in patient care. Expertise in information management as 
well as computer and database technologies applied to nursing is being 
operationalized as more nurses are gaining masters' degrees in nursing 
informatics and becoming certified each year. This knowledge is being 
utilized in our military medical treatment facilities, at information 
management commands, and by health care policy staffs. There is also 
growing Nurse Corps participation in the rapidly expanding field of 
telemedicine. While the primary users are currently physician-focused, 
as exemplified by radiology, pathology and medical education 
applications, nurses are increasingly involved as more clinics, 
hospitals and ships utilize telemedicine as an adjunct in the delivery 
of health care. As telehealth awareness increases, there are endless 
possibilities for increasingly independent applications of telehealth 
by nurses, corpsmen and other professionals. A few of the nursing 
applications include wound care clinics and the extensive array of 
patient education opportunities.
    Leadership is one of the strongest attributes of the nurses in our 
corps. Changes allowing Nurse Corps officers to compete for promotion 
to O-8, and for all Medical Department Corps to be eligible for 
selection as Surgeon General are welcome. The recent revision of DOPMA 
grade tables, to allow more equitable promotion, is having positive 
effects on the Nurse Corps, and on Navy Medicine. By mid-1998, there 
will be 9 nurses in command and 15 executive officers or chiefs of 
staff at military medical treatment facilities, lead agent staffs, and 
education commands. Reserve Nurse Corps officers currently command two 
of the four Reserve Fleet Hospitals. Three of the nine Integrated CONUS 
Medical Operations Plan (ICMOP) facilities (San Diego, Bremerton and 
Bethesda) are commanded by Reserve Nurse Corps officers. In the past 
two years we doubled the presence of Nurse Corps officers assigned to 
Health Affairs and the TRICARE Management Activity (TMA). They hold 
such pivotal positions as Director, Health Services Financing Policy, 
acting TMA Chief of Staff and another as the Clinical Business Area 
Functional Manager. These assignments provide much-needed clinical 
background and expertise during planning and decision-making in health 
care delivery. Additional experience is provided to our Nurse Corps 
leaders of the future, who will continue to break new ground in health 
care delivery and contribute to a strong Navy presence in the Military 
Health System.
    The many, many accomplishments mentioned here would not be possible 
without the dedicated, educated, and motivated nurses who demonstrate 
nursing excellence on a daily basis. The essential foundations for this 
level of success include an all baccalaureate basic preparation, a 
sufficient number of master's degreed and board-certified members, and 
increasing doctoral education for research and practice advancement. 
Again, legislative initiatives have both encouraged and rewarded these 
efforts. Accession Bonuses for Registered Nurses, Nurse Candidate 
Program, Special Pay for Nonphysician providers with board 
certification, Incentive Special Pay for certified registered nurse 
anesthetists, and continuing funding of nursing research are welcome 
evidence of this committee's support for nursing.
    These external quality of life initiatives complement the internal 
efforts focused on acknowledging, respecting, and valuing cultural 
diversity among our customers and our Corps. Our newly formed Cultural 
Diversity Working Group is defining Cultural Competence and identifying 
ways to ensure its delivery, with the understanding that Culturally 
Competent Care is a Navy Medicine issue. Valuing the necessity for 
culturally competent care, this group's goal is to conduct and 
disseminate research findings that will familiarize and educate our 
staff members in our military medical treatment facilities worldwide to 
practices and customs unique to our diverse patient populations. To 
date, emphasis has been placed on identifying educational resources, 
literature review, and exploring community resources to develop a 
cultural competency model. More local efforts are visible as various 
commands establish diversity councils and as nurses go out into 
communities to assist groups in melding cultural practices with healthy 
lifestyles.
    As I review events over my tenure as the Director of the Nurse 
Corps, it gives me great pride to reflect on the accomplishments that 
resulted from the hard work of so many people throughout Navy Medicine. 
However, our work is not finished. Increasing demands despite limited 
resources require that our efforts be focused on maximizing and 
integrating our personnel and training assets. Our rapidly changing 
technologies and health care environments coupled with expanding joint 
humanitarian missions, chemical, biological and radiological threats, 
increased operating tempos and the implementation of TRICARE will 
continue to challenge our readiness.
    The Nurse Corps will continue to reap the benefits of and rely on 
the various diversified Nurse Corps initiatives that target recruitment 
and retention of generalist and advanced practice nurses. With an 
increased demand for baccalaureate prepared nurses by the civilian 
sector, coupled with early indications of a reduced pool of eligible 
nurse graduates in the 21st century, we depend on the continuation of 
these programs to meet strength requirements. The Naval Reserve 
Officers Training Corps (NROTC), Nurse Candidate Program (NCP), Medical 
Enlisted Commissioning Program (MECP), in addition to the direct 
recruiting accession bonus, in total combine to form a robust source 
for the best qualified nurses. The NROTC Nurse Option program has 
finally matured. This program is the linchpin of Nurse Corps 
accessions, with 287 midshipmen currently enrolled in 52 colleges and 
universities. Every NROTC unit with Nurse Option midshipmen has been 
``adopted'' by one of our Navy Military Medical Treatment Facilities' 
Nurse Corps officer staff. As a result, the transition is eased from 
academia to the first practice assignment for these new nurses and 
naval officers.
    After several years of annual loss rates between 10 percent and 11 
percent (or higher), the Nurse Corps recorded an annual loss rate for 
fiscal year 1997 of 8.75 percent. While too early for conclusive 
analysis, these indicators point to the pay-off of these diversified 
accession sources and special pays (increased incentive special pay for 
nurse anesthetists and board certified pay for non-physician providers) 
so important for retention. As in the other Corps, the Nurse Corps 
relies on training-to-skills required for specialties within the 
community, as recruiting has been historically unsuccessful. I ask that 
my relief continue to benefit from these various initiatives that 
target the recruitment and retention of generalist and advanced 
practice nurses. These accession and retention initiatives, in 
conjunction with strong leadership and congressional support are 
critical components to turning the challenges ahead into readiness 
successes.
    Mr. Chairman, thank you for the opportunity to share the successes 
of the Navy Nurse Corps with you. These achievements would not be 
possible without the continuing support of this committee. I will 
always treasure that support because it has been instrumental in 
allowing Navy Nurses to demonstrate that ``Navy Nursing IS Nursing 
Excellence''. I look forward to serving this great nation of ours in a 
new capacity providing the leadership necessary to move us into the 
future as we develop tomorrow's leaders today.

    Senator Stevens. Thank you very much. We appreciate that. 
Give the Admiral our best.
    General Simmons.
STATEMENT OF BRIG. GEN. BETTYE SIMMONS, CHIEF, ARMY 
            NURSE CORPS

    General Simmons. Mr. Chairman, distinguished members, thank 
you for this opportunity to provide brief remarks on the Army 
Nurse Corps which today is 34 percent men. We are very, very 
proud that we have such a high percentage of men in our Army 
Nurse Corps. Senator, you will be glad to know that.
    Army nurses continue to set the pace for innovations with a 
focus on improving the timeliness, appropriateness, and quality 
of health care. I will share some brief comments within the 
context of the three core functions of the Army Medical 
Department: projecting a healthy force, deploying the medical 
force, and managing the care of our beneficiaries.
    One initiative Army nurses are engaged in is a project to 
project a healthy force through the Put Prevention Into 
Practice Program. This program, part of a national campaign, 
focuses on the community and soldier work site prevention of 
disease rather than urgent intervention. Through this 
initiative we formed partnerships with commanders to promote 
healthy family lifestyles and prevent injuries. This unit-based 
program improves overall line unit readiness by decreasing the 
amount of time soldiers are away from their unit because of 
injuries and promotes healthy soldier lifestyles and personal 
responsibility for health.

                      Tri-service nursing program

    Senator Inouye, your vision and support of tri-service 
nursing research serves to enhance the proliferation of 
relevant military nursing research. For example, one study 
funded through tri-service nursing research dollars examined 
the benefits of physical training for pregnant soldiers. The 
study analyzed the effects of a pregnant soldier wellness 
program, including exercise and health education in regard to 
birth outcomes, health care costs, and soldier postpartum 
physical fitness. Findings indicated that soldiers 
participating in this program were more likely to carry their 
babies to term and that they had fewer birth complications. 
Hospital costs for soldiers in this program were significantly 
less than for soldiers who did not participate. We thank you, 
sir.
    We support the second core function of deploying the 
medical force by ensuring individual medical readiness and the 
deployment of Army nurses who are specialty trained to provide 
care in any contingency. Again, a study funded by the tri-
service nursing research program lays the foundation for 
clarifying the concept of individual readiness. We have used 
this information to develop training programs aimed at keeping 
ourselves ready and ensuring that we are personally and 
mentally prepared and physically qualified for the challenge.
    We are training and graduating flexible advanced practice 
nurses, specifically family nurse practitioners, who play a 
pivotal role in TRICARE. Based on the tri-service nursing need 
to graduate the most flexible nurse practitioners, the 
Uniformed Services University of Health Sciences instituted a 
1-year program to transition adult and pediatric nurse 
practitioners to become family nurse practitioners. The role of 
the family nurse practitioner in providing quality, affordable, 
accessible health care is gaining acceptance in the service as 
well as in the civilian sector.
    Army nursing continues to use research as the mortar and 
bond for clinical practice. The tri-service nursing research 
program is the foundation on which we build this initiative. 
The tri-service nursing research program has enabled the 
creation of a partnership with the National Institute of 
Nursing Research. This initiative fosters the rapid translation 
of fundamental research findings into clinical applications and 
directs a portion of this investment toward military and 
peacetime operations and the urgent problems stemming from 
preventable disease, violence, and substance abuse.
    Nursing continues as a linchpin in the health care delivery 
system by spearheading initiatives to increase individual 
responsibility and accountability for wellness.

                           prepared statement

    Mr. Chairman, I thank you and members of this committee for 
your ongoing support of initiatives to improve the delivery of 
health care to our beneficiaries. As military nursing practice 
continues to evolve, we remain a recognized leader in our 
profession because of the unswerving commitment to recruit and 
retain the very best nurses to care for America's sons and 
daughters.
    Thank you.
    [The statement follows:]

            Prepared Statement of Brig. Gen. Bettye Simmons

    Mr. Chairman and distinguished members of the committee, I 
am Brigadier General Bettye Simmons, Chief, Army Nurse Corps. 
Thank you for this opportunity to provide a brief report on the 
status of the Army Nurse Corps. Army nursing continues to set 
the pace for innovations with a focus of improving the 
timeliness, appropriateness and quality of healthcare. Today I 
will share some of these initiatives within the context of the 
three core functions of the Army Medical Department. These 
functions are: Project a healthy and protected force, Deploy 
the medical force, and Manage the care of all beneficiaries as 
accountable advocates.
    Army nurses are active participants in deploying a healthy 
force through initiatives aimed at protecting the health of 
soldiers. These initiatives include improving soldier access to 
care, preventing disease and injury and promoting soldier 
awareness of healthy lifestyles. We are improving access and 
efficiency by providing care where soldiers live. At Fort Hood, 
soldier sick call and family care services are provided in a 
facility that is co-located with troop billets and family 
housing areas. Here, the health care team collaborates to not 
only provide acute care management but teach family strategies 
designed to promote family health. Readiness is enhanced with a 
nurse managed OB-GYN clinic at Fort Campbell staffed with nurse 
practitioners and nurse midwives that provides easy, in and out 
nursing care conducive to female soldier's around-the-clock 
schedules.
    We continue to make tremendous strides in health promotion. 
Army community health nurses are busy putting the punch into 
the Army's ``Put Prevention into Practice'' program. This 
program, part of a national campaign, focuses on community and 
soldier worksite prevention of disease rather than urgent 
intervention. Today, at Fort Bliss, Texas, we are 
collaboratively implementing one of the first service model 
sites for this program. By figuratively pushing the walls of 
the medical facility out to soldier worksites, we can form 
partnerships with line commanders to promote healthy soldier 
lifestyles and prevent injuries. This concept of worksite 
wellness includes wellness lecture and self-care portable take-
home packages. The program will improve overall line unit 
operability by decreasing the amount of time soldiers are away 
from their unit due to disease or injuries and will promote 
healthy soldier lifestyles to further reduce sick days. 
Commanders will have optimally fit and healthy soldiers with 
which to perform their missions.
    Military nursing research supports our initiatives to 
deploy a healthy force. One Army nursing study examined whether 
physical training is safe for pregnant soldiers and their 
unborn children. Physical training is a routine part of normal 
military duty because of its role in maintaining combat 
readiness. The study's investigator analyzed the effects of a 
pregnant soldier wellness program, including exercise and 
health education in regard to birth outcomes, health care costs 
and soldier postpartum physical fitness. Findings indicated 
that soldiers participating in the program were more likely to 
carry their babies to term, their babies had higher birth 
weight and there were fewer birth complications. Hospital costs 
for the care of each soldier in the wellness group was 
significantly less than for soldiers who did not participate in 
the program. This research sparked a highly successful nurse 
managed program at Fort Campbell that enrolls active duty 
pregnant females; monitors and educates them as they proceed 
through their pregnancy so that these soldiers are returned to 
duty quicker, healthier, fitter.
    Moving health care access out to the soldiers and their 
families, providing fast, ``carry-out'' health education for 
soldiers, promoting healthy lifestyles that focus on prevention 
of illness rather than intervention, are three ways that we are 
supporting the Army Medical Department to deploy a healthy 
force.
    We support the second core function of deploying the 
medical force by ensuring individual medical readiness and the 
deployment of Army nurses who are specialty-trained to provide 
care in any contingency. Defining the term, ``individual 
medical readiness'', is crucial to our abilities to measure it, 
track it and promote it. One study funded by the Tri-Service 
Nursing Research Program lays the foundation for clarifying the 
concept of ``individual readiness.'' The Army nurse researchers 
uncovered interesting go-to-war readiness variables such as 
psychological readiness and attitude readiness that extend 
beyond the variables we've traditionally used to define 
readiness, that is; immunization status or weapons 
qualification. We can use this information to develop training 
aimed at promoting a type of ``comprehensive readiness 
coverage'' that insures our medical personnel are mentally 
prepared and physically qualified to face the austere combat 
environment.
    We have re-focused our specialty nurse training so that 
active duty nurses as well as our reserve component partners 
are capable of global deployment with the right skills and the 
right knowledge for the right mission. We implemented the 
reserve and active duty Emergency Nurse Course to increase our 
pool of trauma-trained nurses thereby expanding and improving 
our capabilities on the battlefield. We are training and 
graduating flexible advanced practice nurses; specifically, 
family nurse practitioners who play a pivotal role in TRICARE 
as well as any contingency environment. Based on the Tri-
Service's urgent need to graduate the most flexible kind of 
nurse practitioners, the Uniformed Services University of 
Health Sciences (USUHS) instituted a one-year certification 
program whereby adult or pediatric nurse practitioners can 
become family nurse practitioners. This partnering between the 
Tri-Service community and the University opened three faculty 
positions for active duty instructors at the nurse practitioner 
schoolhouse. As the mission of the Army Medical Department 
changes and continues to evolve, we remain proactive in 
producing nurses who can meet the challenges of a dynamic 
healthcare environment.
    Army nurses are an important linchpin in managing 
beneficiary care as accountable advocates. Several Army nursing 
studies that examined better business practices were funded 
through Tri-Service nursing grants. For example, a project 
dubbed the electronic housecall is using technology to improve 
access to care. This project, directed by a nurse at Eisenhower 
Army Medical Center in Georgia, furnishes interactive 
television nursing assessment of patients at high risk for 
complications and frequent admissions to the hospital. The 
project has been underway for more than a year and has provided 
over 200 telenursing visits to more than two dozen patients. 
Data shows that patients enrolled in this project are requiring 
less outpatient clinic visits and fewer in-home visits. 
Community health nurses in Hawaii are using telehealth 
technology to reduce the potential for child abuse and neglect 
with a Department of Defense sponsored program called ASPECTS, 
an acronym that stands for ``A Solid Parenting Experience 
through Community Teaching and Support''. Long range goals for 
this program include utilizing real-time images, voice, 
worldwide web and Internet chat rooms to provide enhanced 24-
hour access for the program's parents to resources that support 
their learning process. The program just completed a research 
study that demonstrated a reduction in child abuse and neglect 
tendencies as well as the unexpected finding of 99 percent 
child immunization rates.
    Army nursing continues to use research as the mortar 
linking science with clinical practice. The Tri-Service Nursing 
Research Program is the foundation for this movement. Recently, 
a full-time executive director position was established, based 
on Institute of Medicine guidance, to provide oversight and 
maintain day-to-day operational management of the Tri-Service 
Nursing Research Program. The Army Nurse Corps had the honor of 
being the first to serve in this new position, which will 
rotate among the three services. The maturation and evolution 
of the program, with an ever-growing number of funded grants, 
now over 135, has demanded this oversight to ensure fiscal 
responsibility. The Tri-Service Nursing Research Program has 
enabled the creation of a partnership with the National 
Institute for Nursing Research. This initiative fosters the 
rapid translation of fundamental research findings into 
clinical applications and directs a portion of the Department 
of Defense investment toward military and peacetime operations; 
humanitarian assistance, and the urgent problems stemming from 
preventable illness, violence, and substance abuse.
    Army nurses continue to serve soldiers and their families 
by preventing disease, promoting health and delivering 
specialized care. Wherever you find soldiers, sailors, airmen, 
marines or Coast Guard personnel, you will find Army nurses 
standing by, Ready, Caring, Proud.
    In closing Mr. Chairman, I thank you and members of this 
committee for your ongoing support of initiatives to improve 
the delivery of care to our beneficiaries. Military nursing 
continues to be on the cutting edge of healthcare as well as a 
recognized leader in our profession through your commitment to 
a world-class healthcare system.

    Senator Stevens. Thank you very much, General.
    Senator Inouye.

                           entry level degree

    Senator Inouye. Mr. Chairman, I just received my second 
call to return to the Commerce Committee. So, I have many 
questions I would like to submit to the panel, but I have one 
question I want to ask for the record here.
    As most of you are aware, I have been following nursing 
careers ever since the end of World War II, and I have noted 
that since the end of that war, the entry level for nurses has 
always been a professional bachelor's of science baccalaureate 
degree. This has provided you the independence, the 
professionalism that is necessary in your work. But now I 
gather that OMB is recommending that the entry level be reduced 
to an associate's degree. I personally think it is a bad step, 
and I hope you agree with me. What are your thoughts?
    General Simmons. Sir, thank you for that statement. We 
cannot afford to let the associate degree be the entry level in 
the Army Nurse Corps. The standard for professional military 
officership is minimally the baccalaureate degree.
    In addition, in an ever-increasing complex health care 
delivery system, we need to ensure that we have the very 
brightest and very best providing care. The only way to ensure 
that nursing as a discipline is at the decisionmaking table in 
the health care delivery system is to ensure that we are 
comparably leader developed and educated as the rest of our 
colleagues. To compromise that in any way is to subjugate us in 
the organization and to decrease our ability to be at the table 
in our organizations.
    Senator Inouye. Thank you.
    Captain Gardner. I would certainly endorse everything that 
General Simmons has said. It is my understanding that for the 
moment OMB has agreed to support us, but will ask for a 
separate independent study of associate degree prepared nurses. 
And that is fine. We would be glad to support and provide that 
information. It is readily available about the differences 
between associate degree graduates and baccalaureate graduates, 
and what we need is the additional training and experience and 
education that a baccalaureate has because of the unique role 
of a leader as well as a nurse.

            entry-level qualifications for Air Force nurses

    Senator Inouye. General.
    General Stierle. I would agree with what both of my 
colleagues have said.
    In addition I would say--I think General Simmons hit on it 
a little bit in terms of flexibility--that in the military you 
really have to be a generalist, and a baccalaureate education 
provides our nurses with the additional skills and knowledge 
that they need to be able to operate successfully in many 
different environments. We are not talking just about inpatient 
care. As health care moves into the ambulatory care setting, as 
we become more and more involved with prevention and community 
health care, individuals that are trained at the ADN level 
absolutely do not have that knowledge and skills.
    Senator Inouye. Thank you very much.
    May I be excused?
    Senator Stevens. Yes, sir. Thank you.
    General Simmons, you spoke about the physical training 
study. Have you published the results of that in places like 
the Journal of American Medicine and that sort of thing?
    General Simmons. Yes, sir; the results of that study--sir, 
it was funded by tri-service nursing research in 1997 and it is 
pending publication right now. But we have numerous examples of 
studies that have focused on wellness of soldiers to include 
certainly female soldiers, sir.
    Senator Stevens. I think that is the kind of thing that we 
can do for the general community is to make available the 
results of studies like that. I am a prostate cancer survivor. 
We have a whole series of statistics now coming out following 
people in the military, men who have had prostate problems. The 
whole concept now having this enormous force of women in 
uniform is that there is a statistical base there, and the 
results of these studies can be shared with the public at 
large. I hope that you will do that and follow through on it.
    I also want to congratulate you very much in terms of what 
you are doing to shift the concepts of military health care 
delivery to focus on prevention rather than on really 
intervention and in-hospital care. The concepts that you have 
with collocating your health care facilities in the family 
housing areas are extremely beneficial to all concerned.
    I understand that those are at a very limited number of 
facilities. Can you tell me why are those programs that have 
been so beneficial just at a limited number of military 
facilities?
    General Simmons. Sir, I think the move toward wellness, 
obviously consumer driven, takes time. Health care has always 
been hospital based. It is totally a different mindset and we 
have to evolve as well. We are hospital based. The structures 
are based on where people come when they are sick. The 
initiatives to put wellness centers, health promotion centers 
in family housing areas is evolving, slowly but surely, but we 
also have to resocialize ourselves and our consumers of health 
care to be responsible and accountable for their own health 
care rather than coming to a health care provider to treat them 
when they are sick. We are resocializing ourselves. We are 
resocializing our consumers, just as mainstream America is 
doing the same.
    That does not really answer your question, but it is 
happening, probably not as quickly as any of us would like to 
see, but I would say that we are making steady progress, sir.

                    Physical training/breast feeding

    Senator Stevens. Well, the results of your study on 
physical training--has a directive gone out in the services to 
women who are in all the services to pursue the physical 
training tactics?
    General Simmons. Yes, sir; initially when women became 
pregnant, they sort of became physically inactive. As a result 
of this study, we have at least one-half of our installation 
wellness programs for pregnant soldiers to keep them ready, to 
keep them actively engaged in their units. So, the findings are 
disseminated in the Army and in the other services, and all of 
those programs to keep women healthy during pregnancy, to 
return them to duty very quickly, to ensure that they deliver 
healthy babies with few complications and decrease the cost of 
the hospitalization and recovery are again, sir, happening 
very, very successfully.
    Senator Stevens. What are you doing about breast feeding 
for soldiers and people in the service?
    General Simmons. Sir, breast feeding. General Stierle 
probably wants to answer that. [Laughter.]

                    Air Force breast-feeding program

    Senator Stevens. We are very pragmatic up here. I am 
looking at some programs now trying to find ways to assist 
women in the economy in general to have access to breast 
feeding time and to assure that they can follow their own 
desires in that regard but have available time for that.
    Are you looking into that in the services?
    General Stierle. Well, I think again that Put Prevention 
Into Practice Program and the focus on health promotion in 
terms of educating not just the medical community but the line 
community. Recent studies, that have been done, show the 
advantages that breast feeding has for the child throughout the 
course of their lifetime. So, it is making sure that we get 
this information out there so that there is support for these 
individuals that want to breast feed and, not only those that 
want to, but also trying to increase the numbers that will 
breast feed in terms of the long-term benefits.
    Also when you were speaking about what we are doing to try 
and get the word out in regard to various nursing research 
studies that have been completed, we are partnering also with 
USUHS to develop a central repository for all of the tri-
service nursing research. It will also then tie into the 
national data base, so that we do not necessarily have to keep 
replicating and we can build upon research that has been done 
in the past.
    Senator Stevens. I am going to put someone in touch with 
you all to see that we have your ideas as we go into this new 
concept of legislation to assure that there is a national 
policy that allows for time. In my State, 70 percent of the 
women of childbearing age work out of their home, and this is 
becoming a sizable problem now to assure that the facilities 
are available, that the people understand, particularly the 
male employers understand, what their obligations are to see 
that the woman can follow the procedures she wants to follow 
with regard to her child.

                          Career professionals

    Let me talk to you about another thing. I think you heard I 
have sort of got a technology bent here lately. The 
advancements in technology, particularly in medical technology, 
are creating new careers now for professionals that are 
nonphysicians. What are the nurses doing about examining those 
careers and determining which should be in the Nurse Corps and 
which should be in any other part of the armed services?
    The technology really I think is coming very rapidly, the 
angio-CT and all those things. You do not have to be a 
physician to be involved, but they are going to require very 
capable career professionals. Tell me, what is your thinking 
about that?
    General Simmons. Sir, as we look at scope of practice 
issues, what constitutes appropriate practice for nursing, we 
collaborate with all members of the team, the physician, the 
physicians' assistant, our clinical medical service corps 
officers, to identify what skills we need to best provide 
beneficiary care in a resource efficient manner that translate, 
oh, by the way, to our go-to-war skills.
    There are some skills, if you talk about advanced 
procedures and techniques that are the basis for graduate 
medical education. Some of that in our health care delivery 
system will almost always be provided by physician providers 
because of graduate medical education and the need to prepare 
physician providers.
    But as we look at resource efficient primary care, 
maintaining health--you mentioned earlier about physical exams 
and the components of those. The role of the nurse practitioner 
to keep people healthy rather than treating disease, that is, 
someone comes in for an annual physical, needs a colonoscopy 
and all those other things associated with wellness. That role 
is indeed happening as we speak in our family practice clinics, 
in our adult primary care clinics to maximize the ability of 
every member of the team, the nurse practitioner, the PA, to 
maximize the skills that we have and at the same time ensure 
that we get our beneficiaries to the right place that we 
maintain physician subspecialty care for the sickest and 
maximize our own ability to keep our beneficiaries healthy.
    Senator Stevens. Captain, we saw a demonstration of the use 
of telemedicine in operating procedures. I am sure you have 
seen the same demonstration. What is the Navy doing? Are some 
of those professional requirements being filled by nurses in 
the Navy, highly technical medical delivery services?
    Captain Gardner. As far as delivering health care via 
telehealth, we are doing this to a certain extent, but along 
the more traditional lines of the providers that we have right 
now--for instance, the nurse midwives have been heavily 
involved in some telehealth with both conferencing, consulting, 
and with educating their population.
    Where we have more involvement, rather than increasing the 
technological skill level of the providers by using telehealth, 
is where we have more nurses involved in the policy and 
planning of telehealth and how best to leverage it for all 
health care personnel. We have people involved in the computer-
based patient record development which benefits all of the 
providers, as well as the patients.
    We have people involved in the radiology and picture 
archiving technology system, not as the individual who is going 
to read the technology, but the individual who plans how best 
to utilize it once it is in place and where best to put it.
    We have other nurses involved in the clinical information 
system that again is a system used by more than just nurses. 
You are going to seldom find things that are just targeted 
toward one provider but really require the collaborative team, 
and that has been our place in the telehealth business to date.

                               Telehealth

    Senator Stevens. General, you started to answer.
    General Stierle. Yes; in the U.S. Air Force, again, one of 
our unique missions is global aeromedical evacuation. General 
Roadman addressed care in the air. We are going to be 
transporting stabilized versus stable patients--more critically 
ill patients than we have ever transported in the history of 
the Armed Forces.
    Again, telehealth, is going to be an important concept of 
caring for those patients in the air. It is going to become 
increasingly more important that we be able to transfer real-
time information from the air to the ground and back to the 
air. We must be able to consult with people on the ground in 
regard to patients that may deteriorate in flight and need 
things changed.
    Actually the delivery of care in the aeromedical 
environment is predominantly nursing. That is going to be 
changing over time. We are going to have more physicians and 
respiratory therapists involved than we have had in the past. 
But historically it has been predominantly a nursing care 
environment.
    But getting back to again what you are saying about 
advanced technologies and who are we allowing to do what, I 
think, again, the Armed Forces has always been an example of 
where we have typically allowed people to practice beyond the 
traditional scope of practice because of wartime requirements.
    All three services have been looking at very intently at 
positions and they need to be a specific discipline or be corps 
neutral. We have individuals very qualified to practice in many 
different areas, and we should not deprive them of 
opportunities to expand into other areas of practice, based on 
historical practices.
    Senator Stevens. Very good. We thank you very much.
    Senator Inouye and I will send a letter to OMB about the 
issue of lowering the educational requirements. We would not 
like to see the situation develop where we have to put a 
prohibition in law but I think they might get the message. We 
hope they will.
    General Simmons. Thank you, Senator.
    Senator Stevens. We do thank you for what you do, and I 
commend the way that you are moving into these areas and 
assuring us that we have the ability to carry out the plan 
which is downsizing, to a great extent, the people who are 
involved in military hospitals. More and more the system is 
going to rely upon the physicians' assistants and the nurses 
who are going to take on particularly this outpatient load that 
is increasing as the facilities are closed. So, I want you to 
know Senator Inouye that I have had a great interest in this 
over the years. We hope you will keep us informed if you run 
into any difficulties.

                     Additional committee questions

    And we congratulate you on the studies you are doing too. I 
think they are very beneficial.
    So, thank you very much. I am looking forward to seeing you 
again.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
            Question Submitted to Brig. Gen. Bettye Simmons
             Question Submitted by Senator Daniel K. Inouye
                               telehealth
    Question. How has nursing interfaced with telemedicine/telehealth?
    Answer. The Army Nurse Corps has two ongoing telenursing 
initiatives, two research studies with a telehealth focus and a 
distance learning initiative.
Telenursing initiatives
    A telenursing project at Dwight D. Eisenhower Army Medical Center 
in Georgia furnishes interactive television nursing assessment of 
patients at high risk for complications and frequent admissions to the 
hospital. The project, funded through DOD, Medical College of Georgia, 
the medical facility and Georgia Institute of Technology, has been 
underway for more than a year and has provided over 200 telenursing 
visits to more than two dozen patients.
    Community health nurses in Hawaii are using telehealth technology 
to reduce the potential for child abuse and neglect with a DOD 
sponsored program called ASPECTS (``A Solid Parenting Experience 
through Community Teaching and Support''). The program just completed 
an intensive, valid and reliable research project that clearly 
demonstrated the program is in fact reducing the potential for child 
abuse and neglect within the targeted high-risk population. Long range 
goals for the project are to increase the nurse's frequency of contact 
with patients and allow them to assess potential problems more quickly 
and efficiently, thus making the nurse more responsive to the family's 
needs.
Telenursing research
    One nursing study funded by Project Akamai is aimed at identifying 
key factors of patient and provider satisfaction with telemedicine. The 
nurse researcher intends to use data collected during the study to 
develop a survey instrument geared toward evaluating the impact of 
telemedicine on the science of medicine (technical/instrumental aspects 
of care), the art of care interpersonal/expressive/communicational 
aspects of care) and the amenities of care (properties of the setting 
in which care is provided). The finalized instrument will provide 
guidance and a quality focus for emerging telemedicine systems.
    A nursing study funded by the TriService Nursing Research Program 
is developing a monitoring system using piezoelectric film material to 
provide an accurate measurement of patients' vital signs in high-noise, 
high-vibration environments such as MEDEVAC helicopters or combat 
areas. The piezoelectric material is built into MEDEVAC stretchers and 
is picking up pulse and respiratory rates very effectively, even 
through Battle Dress Uniforms.
Distance learning
    The DOD/VA Distance Learning Project (initiated in Fall, 1997) at 
the Uniformed Services University of the Health Sciences, successfully 
links DOD and VA assets to collaboratively implement an accredited 
academic post-master's program. The program is designed for clinical 
nurse specialists practicing at VA or DOD Medical Center facilities who 
met the admission criteria. It will award a certificate in adult nurse 
practitioner education and graduates will be eligible for national 
certification. The interactive teleconferencing technology located at 
USUHS is the broadcast site that connects with eight offsites for two-
way (audio and video) interaction. This program will reduce educational 
costs by electronically reaching out to different worksites across the 
country. This project can offer recommendations for further uses of 
distance learning.
                                 ______
                                 
             Question Submitted to Capt. Mary Anne Gardner
             Question Submitted by Senator Daniel K. Inouye
    Question. How has nursing interfaced with telemedicine/telehealth?
    Answer. Expertise in information management, computer and database 
technologies applied to nursing is being operationalized. More nurses 
are gaining masters' degrees in nursing informatics and becoming 
certified each year. This knowledge is being utilized in our military 
medical treatment facilities, at information management commands, and 
by health care policy staffs. Examples include the following:
    A Navy Nurse Corps Commander is the Project Officer for Joint 
Imaging Technology Project Office (JITPO) under the direction of the 
Telemedicine Program Office.
    Triservice personnel as well as government/contract civilians are 
responsible for the planning, coordination and installation of Picture 
Archiving Communication Systems for digital radiography and management 
of 31 sites valued at more than $100 million.
    Clinical Business Area.--Navy Nurse Corps officer is assigned as 
Functional Manager. Navy nurse participation in telemedicine is 
growing. Although primary use is currently physician-focused and 
directly applicable to radiology, pathology and medical education 
applications; nurses are becoming increasingly more involved as 
clinics, hospitals and ships begin to utilize telemedicine as an 
adjunct in the delivery of health care. Further examples of Navy nurse 
involvement in telemedicine/telehealth are:
Distance learning:
    Presentation of a Bicoastal Emergency Room/Critical Care Nursing 
conference.
    Participation in joint Department of Veterans' Affairs/Department 
of Defense distance learning program.
    Participation in USUHS distance learning for Certified Registered 
Nurse Anesthetists to obtain Masters of Science degree.
    Telemedicine/Telehealth application is a high interest item for the 
Military Nursing Chiefs. Future uses of telehealth by nurses and 
corpsman are envisioned in independent settings such as wound care 
clinics and through an extensive array of patient education 
opportunities.

                          subcommittee recess

    Senator Stevens. We are going to recess now. On April 22 we 
are going to have the ballistic missile defense program before 
the subcommittee, and we will announce the room at a later 
date. Thank you very much.
    [Whereupon, at 11:55 a.m., Wednesday, April 1, the 
subcommittee was recessed, to reconvene at 10 a.m., Wednesday, 
April 22.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                       WEDNESDAY, APRIL 22, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Cochran, Domenici, Shelby, 
Hutchison, Inouye, Bumpers, and Dorgan.

                         DEPARTMENT OF DEFENSE

                 Ballistic Missile Defense Organization

STATEMENT OF GEN. LESTER L. LYLES, U.S. AIR FORCE, 
            DIRECTOR

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Good morning. We are pleased to welcome 
you to discuss ballistic missile defense [BMD] programs. There 
are many other committee meetings going on this morning. I have 
no knowledge of how many other members of our committee will 
get here today. I do hope others will come if they have 
questions.
    When we met 1 year ago, we were still on the verge of a 
fifth bad intercept attempt. We are awaiting the first PAC-3 
intercept attempt, and we are anticipating the selection of a 
lead systems integrator to permit the National Missile Defense 
Program to proceed.
    The underlying progress--there is underlying progress in 
many areas, both the national and defense interceptor secrets 
have been successfully flown and collected data. Further 
significant integrated testing has been completed on THAAD and 
the PAC-3 interceptors, testing which will, hopefully, lead to 
successful flight tests. I am sure you will highlight other 
progress made in this past year as you outline the fiscal year 
1999 budget request. I think we need to be conscious of what 
lies ahead.
    The Defense budget is likely to be flat for the foreseeable 
future. Together with other members of this committee, I have 
been and will continue to be a strong supporter of the 
Ballistic Missile Defense Program. These programs to me are 
still very essential. The tight budget environment will provide 
less tolerance for cost growth and troubled programs. We need 
to work with you to ensure that your programs are structured 
for success, with adequate ground and flight testing to develop 
a combat ready system.
    The supplemental spending bill is moving to conference now. 
It does include funds to enhance the integration and testing of 
current theater ballistic missile defense systems. I want to 
welcome your thoughts on the initiatives recommended in the 
supplemental, many of which were highlighted to the Congress by 
Deputy Secretary of Defense, Mr. Hamre.
    You have a tough job, General. We want to help you whenever 
possible. We look forward to your testimony, and I'm going to 
make your full statement a part of the record. Before you 
proceed, when he arrives--Senator Inouye will be late--we will 
ask him to make his opening remarks when he comes and will 
reserve a place in the record here for his statements if he 
wishes to make any.
    General Lyles. Yes, sir.
    Senator Stevens. I have to tell you I am a little 
frustrated with what is going on up my way in terms of that 
Kodiak test site. I do hope to get a chance to talk to you 
about that, either here today or later.
    General Lyles. Yes, sir.
    Senator Stevens. But I would be pleased to have your 
comments at this time. Thank you, General.

                           opening statement

    General Lyles. Thank you, Senator. Mr. Chairman, it really 
is a pleasure to be back here to present the Department of 
Defense's Ballistic Missile Defense Program. Mr. Chairman, I do 
have a formal statement that I will submit for the record and 
some brief remarks I would like to go through, and I promise to 
keep them brief so we can welcome your comments and the 
comments of the other members.
    Mr. Chairman, over the past few years, Congress and the 
administration have consistently directed that the Ballistic 
Missile Defense Organization [BMDO] focus on three priorities 
for our missile defense programs. The first priority is 
developing and fielding highly effective theater missile 
defense programs or TMD as we refer to them. The second 
priority is developing for deployment a National Missile 
Defense Program and a third is maintaining a substantial 
advance missile defense technology program.
    Mr. Chairman, our fiscal year 1999 budget request reflects 
those priorities, and it maintains both program focus and 
momentum to try to keep the challenges we have ahead of us on 
the right track. To outline very quickly, Mr. Chairman, our 
total BMDO fiscal year 1999 budget request is $3.6 billion. 
This includes $3.1 billion for research, development, test, and 
evaluation; $409 million for procurement; and $17 million for 
military construction.
    When you combine these three budget categories and you look 
at the aggregate in terms of percentages, theater, air, and 
missile defense account for $2.1 billion of that $3.6 billion 
or roughly 59 percent. NMD, the National Missile Defense 
Program represents $962 million in fiscal year 1999, or 27 
percent. Advanced technology is $253 million, which is about 7 
percent of our budget, and something we call generically 
technical operations which includes infrastructure support for 
all of the other programs is $194 million or 5 percent of our 
budget.
    There are two new categories for fiscal year 1999, Mr. 
Chairman. One is threat and countermeasures. A program that 
owes a lot of credit to Senator Cochran for the strong support 
he's given us in trying to make sure that's a robust effort. 
And the next is international cooperative programs. Now, these 
are not new efforts, but we've aggregated them in a different 
manner. Together they represent $72 million or about 2 percent 
of the BMDO budget.
    Mr. Chairman, I don't need to tell you our experience over 
the last couple years reaffirms that developing and fielding 
missile defenses is not an easy task. It's a unique challenge 
in many respects. And all of us who participate in this 
challenge realize how difficult it really is.

                Ballistic missile defense mission areas

    Ballistic missile defense should not be looked upon as 
individual programs, but literally as an entire mission area. 
As an example, in theater missile defense, we're trying to 
develop a family of systems. And that's not just BMDO that's 
making that statement. We recently had several of our CINC's, 
including Admiral Gaman from an Atlantic command talk to the 
Joint Requirements and Operations Counsel, the JROC, within the 
Joint Staff emphasizing that we need to look at theater missile 
defense as a family of capabilities, interoperable 
capabilities.
    Those family of systems have to be interoperable with each 
other. They have to complement each other to provide what the 
warfighter needs in terms of capabilities. And as the committee 
is keenly aware, when conflicts arise, the military fights 
jointly. They do it in an integrated manner, and we have to 
make sure that we're procuring systems and acquiring and 
developing them in that same joint manner. That's what 
interoperability and in some respects what our organization is 
all about.
    Mr. Chairman, this past year, the Department of Defense has 
given BMDO an added responsibility. About a little over 1\1/2\ 
years ago, we were directed to develop and integrate a joint 
architecture for not just ballistic missiles threat, but for 
cruise missile defense also. We're bringing together those two 
architectures, and we really are trying to do them from a joint 
perspective. We call this integrated activity theater air and 
missile defense. And our task is to provide a joint 
architecture for both sides of that particular problem.
    Mr. Chairman, in spite of our many challenges, I can tell 
you literally that we are on the verge of fielding a 
comprehensive interoperable and highly effective missile 
defense system that's responsive to the existing and to the 
emerging threats to the United States. And clearly, this is due 
in no small part to the very, very strong support we get from 
Congress.
    I provided a set of charts which outline the details of our 
programs and the details of what we're trying to do. I would 
not go through each one of them in detail. I'll just very 
quickly list them and tell you what's in them, and they have 
been provided for the record, and we can literally answer any 
questions associated with each one of them.
[GRAPHIC] [TIFF OMITTED] T02AP22.000


    The first chart illustrates the master schedule for our 
theater missile defense programs and for our NMD Program. It 
outlines the current funding shown on the chart, the fiscal 
year 1999 request, and our projected future years defense 
program of FYDP level for each one of those specific programs.
    In addition, the chart outlines some of the key milestones 
for each one of those major defense acquisition programs and 
including when they will go into production and when we will 
actually start fielding them. While TMD and NMD comprise the 
lion's share of our budget as I mentioned earlier, as I stated 
also, we're developing very critical missile defense 
technologies.
[GRAPHIC] [TIFF OMITTED] T02AP22.001


    The second chart, Mr. Chairman, lists some of those key 
efforts. And that's just a subfit of all the things we're doing 
in technologies, but those are some of the major efforts that 
we are embarking upon.

                             Affordability

    Mr. Chairman, my prepared statement also provides some 
detailed information on cost control. And I think it gets to 
the heart of one of your comments. Affordability is a very, 
very important parameter for all of us. I can tell you 
literally in the past when we talk about missile defense 
programs, we talked about performance, we talked about 
schedule.
    I can tell you and promise you, Mr. Chairman, that 
affordability is now a major part of our efforts for each one 
of our programs. My prepared statement outlines some of the 
major things we're doing to ensure that we are addressing 
affordability for each of our specific programs. I have 
insisted not to just my own office, but to the executing agents 
that we make sure that all of our programs are not just 
effective, not just timely, but they're also affordable. And 
we're doing a lot to make sure we can bring that to fruition, 
and I'd be happy to address any questions or concerns anybody 
might have about what we're doing in the area of affordability.
[GRAPHIC] [TIFF OMITTED] T02AP22.002


    My third chart, Mr. Chairman, illustrates something I think 
you've seen before and I think the committee members are very 
familiar with. It talks about the battle space, the battle 
space covered by each one of our programs. We show this to show 
and illustrate that each one of our programs has a unique 
niche. They are all extremely important. All of them are 
required to ensure that we really do have robust and effective 
theater missile defense systems.
    While we're emphasizing affordability, we also emphasize 
that we need to have all of our programs because of the unique 
nature that they provide in terms of protecting us against the 
threat.

                             Major programs

    Mr. Chairman, I'd like to briefly give you an update on 
each one of our major programs. I will keep this very, very 
brief, again, in the interest of time. I want to just highlight 
some of the key areas associated with them.
    Let me start with PAC-3. The PAC-3 Program is currently in 
the engineering, manufacturing, and development phase, EMD, for 
our development and acquisition cycle. It's currently being 
fielded in three phases, that is PAC-3. We currently had the 
first two phases already in the field. And as a matter of fact, 
if something had taken place in the Middle East over the last 
couple of months, we would have had the capability in the 
Patriot Program to have those first two phases in the field. 
And I think had the capability to counter any threat that 
exists in today's environment.
    The third and final configuration for PAC-3 is the most 
important one, however. And that is bringing on the hit-to-kill 
lethality methodology for PAC-3. That is extremely important 
because that is the kill mechanism we think is required to 
counter weapons of mass destruction whether they be chemical, 
biological, or nuclear warheads. The hit-to-kill technology is 
the key element of both the final variant of PAC-3, it is also 
the key element for our Theater High Altitude Area Defense 
Program for our Navy Theater Wide Program and also in a 
different form for the National Missile Defense Program.
    And so this is an important parameter. And PAC-3 will be 
the first system that will demonstrate that. We are currently 
maturing and preparing for our first intercept of the PAC-3 
Program. That intercept is now scheduled to take place in the 
midpart of the summer, roughly the latter part of July or the 
early part of August. We're making sure that every step in our 
preparation for the testing is being done accurately and 
thoroughly. We've had some delays, but I think we're now on 
track to have a successful intercept at the midpart of the 
summer.
    Our other lower tier program, the Navy Area Program, 
following last year's successful intercept flight test is now 
also in EMD phase, engineering, manufacturing, and development 
phase of our acquisition cycle. The program commenced 
development flight tests in fiscal year 1999, the early part of 
fiscal year 1999 following some operational evaluation sea 
trials being done for the aegis fleet which will take place in 
fiscal year 2000. And we plan to have first unit equippers for 
the Navy lower tier program in 2001, and that program is on 
track to meet that specific date. Switching now to the very 
robust things we need to have to really counter the threats of 
the future, the long-range and medium-range threats possibly 
carrying weapons of mass destruction. The Theater High Altitude 
Area Defense Program or THAAD is one of our two Hallmark upper 
tier programs. It's the one that's pacing the effort in terms 
of schedule, and the one that we're looking for to getting that 
capability as rapidly as we possibly can. It complements the 
program we have with the Navy, the Navy Theater Wide Program. 
Mr. Chairman, in fiscal year 1997 as a result of all the 
failures we had following four attempts for an intercept with 
the THAAD Program, we conducted a series of detailed 
evaluations, detailed reviews, and detailed tests to ensure we 
understand how robust the THAAD Program is and specifically how 
robust the design is.
    We worked very closely with the prime contractor, and I am 
very confident that the prime contractor is doing everything 
they can to ensure they are working with us to have a 
successful THAAD Program. We've completed those detailed 
reviews, and I can tell you the basic premise of those reviews 
is that we have a sound design for the THAAD Program. We had 
some concerns about the reliability, concerns about the margins 
of the testing that we've done in the past, but in terms of the 
basic design both we, the Government, and the contractor feel 
very, very confident about that.

                             THAAD testing

    Nevertheless, I want to outline some of the key tests we've 
done over the last year. We've done ground testing. We've done 
specific subsystem hardware testing. We've done systems testing 
at an aggregate level. We've done subtesting for all the 
various components. We've done software testing, and we've done 
hardware in the loop testing. And amongst those testing, I 
think probably the most key are tests to ensure that we 
understand how reliable the components are and what design 
margins we have in the components.
    Those latitude tests, I think, get at the heart of why we 
had four specific, but unique failures in our four attempts for 
intercepts to date for the THAAD Program. Both we and the 
contractor are very confident that we have addressed the right 
kinds of testing, and we think we're prepared to proceed to a 
very successful intercept for the THAAD Program.
    The next THAAD intercept attempt is scheduled for the month 
of May. Roughly the midpart of May, we think we'll be prepared 
to do that test. We've had some slips, some minor slips as we 
prepared for the test, but I'm very confident that those slips 
were for good reasons because we identified in some of those 
tests some questions we didn't have answers to. In the past, we 
would have flown anyway. In today's environment, we want to 
ensure that we have a successful program, so we went back and 
did more testing to ensure that we understand how robust the 
design is, hence, the delays in our program. But we're now 
ready and on track to proceed to a successful intercept in the 
May timeframe for the THAAD Program.
    Mr. Chairman, I think one issue that's been of concern to 
the Congress and also a concern to the Department following the 
successful THAAD intercept test, our current plans were to 
proceed to a user operational evaluation system or UOES for 
THAAD. Under this plan, we would have procured 40 UOES missiles 
for the program. That is currently our plan, but I want to 
assure you that we're not going to do that, we're not going to 
proceed along that plan based just on that one intercept flight 
test.
    We actually have always had in the program a robust series 
of ground tests and hardware tests and software tests before we 
actually committed all the dollars associated with the UOES 
Program. There have been some roughly $190 million of 
commitment today in the cost to the UOES Program. Most of that 
money has been associated with battle management command and 
control with the launcher, with all the support activities 
associated with the total THAAD system.

                   User operational evaluation system

    The one area that's been hanging out because of our failure 
to have a successful intercept has been buying the UOES 
missiles. And that's the part we would have committed dollars 
for assuming we have a successful intercept. There's some $67 
million roughly that would have to be committed this fiscal 
year with that successful intercept. But I want to assure you 
again, Mr. Chairman, we've laid out a step by step approach to 
ensure that before we commit all those dollars, we understand 
exactly how good the design is.
    The next chart you have in your package lays out that step-
by-step approach.
[GRAPHIC] [TIFF OMITTED] T02AP22.003


    It showed the series of tests that are being done in the 
hardware and ground environment. It also shows that we actually 
scheduled to have two more flight tests and will complete them 
before we make our final commitment of dollars to the UOES 
Program. I think this is a sound approach, and I am committed 
to make sure we stick to this to ensure we address everything 
we need to know about THAAD in the THAAD UOES Program before we 
commit very, very valuable dollars to the specific initiative.
    We think UOES is a smart thing to do, but we want to make 
sure we know everything about the program before we make the 
final commitment of dollars. I'll be happy to answer any 
questions that anybody might have about this approach.

                           Navy theater wide

    Let me switch, Mr. Chairman, very quickly to our other 
upper tier program, the Navy Theater Wide Program. We are 
preparing to enter into a Defense Acquisition Board Review for 
the Navy upper tier program this summer. This will give us an 
opportunity to have the first milestone review of the Navy 
Theater Wide Program. We're looking at an evolutionary 
acquisition strategy for the Navy Theater Wide Program.
    This consists of an initial block one capability that we 
will plan to procure as quickly as we possibly can followed by 
sometime in the future with a more capable block two. The block 
one will have the capabilities we need to address the threat at 
the time, but we ultimately want to get a full up block two 
capability no later than the year 2010 or somewhere around 
that.
    I fully endorse this evolutionary acquisition approach. I 
think it's a wise thing to do, both we and the Navy program 
office are committed to make sure that we lay out the right 
kind of strategy and get support for that strategy so we can 
embark on that program.
    During this POM development for this year, for the year 
2000 to 2005, we are working very aggressively to understand 
the types of program, total program, we need for the Navy 
Theater Wide Program, trying to get the capability no later 
than 2006, but looking at opportunities to try to move it back 
as much as we possibly can and specifically in an approach that 
could give us the capability by the year 2005.

               Medium extended air defense system [MEADS]

    Finally, Mr. Chairman, in the area of theater missile 
programs, let me quickly talk about the MEADS Program. As you 
know, this is our cooperative program with Germany and Italy. 
It is currently in the project definition and validation phase. 
The program, that phase, is scheduled to be completed in the 
first quarter of fiscal year 1999. This is a program that is 
very important to us in terms of its specific requirements 
that's giving us a maneuverable system with 360 degree coverage 
to protect the maneuver forces in the kinds of environment we 
think we're going to see in contingencies in the future.
    The Department is committed to make sure we address both 
the requirements and how we might get the MEADS Program into 
our inventory. We addressed this during a quadrennial review. 
Other Defense priorities, however, precluded us from addressing 
anything more than the fiscal year 1999 budget. We had the 
responsibility, and I am now addressing a wide range of 
alternatives working with the leadership in the Department to 
see how we can get a viable MEADS Program to continue and to 
get it into our POM and our program for the out-years. We are 
looking at those alternatives, and we will be able to address 
something relative to MEADS in our POM development.

                             Airborne laser

    Mr. Chairman, one area that I did not address in terms of 
our total architecture for theater missile defense is airborne 
laser. I know you're very familiar with that program and what 
unique niche it provides in terms of providing a space 
intercept capability force. While airborne laser is not in my 
specific portfolio, that is we do not provide funding for it 
within BMDO, it is a very, very important part of our 
architecture.
    I could tell you I feel very, very comfortable with that 
program being worked by the U.S. Air Force. I know they feel 
very strongly about it and have committed the resources to the 
program. I think they're doing the right things to ensure that 
they mitigate all the technology risks associated with this new 
endeavor and that they are proceeding very, very well to ensure 
the program stays on track.
    They keep me apprised very often on how the program is 
proceeding. And to my knowledge and what has been provided to 
me, it is progressing not just on schedule, but ahead of 
schedule. And all the things they're doing are very, very 
encouraging toward having a very, very successful Airborne 
Laser Program. And I wholeheartedly endorse the effort that's 
being addressed in that particular effort.

                     National missile defense [NMD]

    Let me switch very quickly to our National Missile Defense 
Program. Mr. Chairman, I know you're very familiar with it. It 
is, as you know, our primary program to provide defense of the 
United States, all 50 States. This program gives us the 
capability of providing a limited ballistic missile defense 
from either a rogue nation attack or to have some capability 
against a small accidental or unauthorized launch from one of 
the current nuclear powers.
    You're very familiar, Mr. Chairman, with our Three-Plus-
Three Program that we have embarked upon. This strategy we 
consider to be a right one, but it's a very ambitious program 
strategy in terms of schedule. But we are committed to it 
because it allows us to develop the NMD system as rapidly as we 
possibly can.
    Under this program strategy, we will test and integrate all 
the different elements that are required to give us a total 
national missile defense system. We will do this in the next 
couple years and look to evaluate the threat and do an 
integrated test by the year 2000. And if this threat warrants 
it, we will be prepared to deploy the system within another 3 
years, by the year 2003.
    The program strategy is laid out so that if the threat does 
not warrant it, we will continue refining the development but 
always be prepared to deploy the system within 3 years of the 
identification of a threat against the United States. This 
program has actually made significant progress over the last 
year, Mr. Chairman.
    We've conducted two tests, as you mentioned in your 
statement. Two very successful national missile defense 
exoatmospheric kill vehicle or EKV flight tests. Those tests 
were very, very encouraging toward reducing some of the risk 
and identifying what we know about being able to discriminate a 
real target in the exo environment in which the national 
missile defense system has to operate.
    Both tests were very successful. Each test was done by one 
of two different contractors who were competing to be our EKV 
contractor. And again, we're looking forward to the successful 
completion of that effort as part of our National Missile 
Defense Program.
    Also, as part of NMD in the very near future, literally in 
about 1\1/2\ weeks, Mr. Chairman, BMDO and our National Missile 
Defense Joint Program Office will announce the award of the 
lead systems integrator, our prime contractor for national 
missile defense. We have two very, very strong industry teams 
competing to be our prime contractor for NMD. The Boeing Co., 
and the United Missile Defense Co., which is a joint venture 
between Lockheed Martin and Raytheon and TRW.
    I am scheduled literally, Mr. Chairman, to get the down 
select briefing tomorrow and to spend the rest of the time from 
tomorrow for the next week or so deliberating on my 
recommendation and decision for the prime contractor and then 
give that recommendation to the Secretary of Defense and others 
who are very involved and very interested in the National 
Missile Defense Program and then be prepared to make an 
announcement and to award the contract by the first week of 
May. We're on track for that schedule, and I am looking very 
much forward to the briefings tomorrow to ensure that we can 
stick to the environment and the schedule that we have laid out 
for this program.
    We have a very strong contractor team. The contractor team 
led by the Joint Program Office is a federated approach. We 
have strong support and a strong team that's developed in all 
aspects of this federated environment. At Huntsville, at 
Colorado Springs, in Boston, in Los Angeles, everywhere where 
there's an aspect of the National Missile Defense Program, we 
have developed and evolved a very, very strong team. And I feel 
very, very confident about our ability to execute the National 
Missile Defense Program ahead of us.
    We're proceeding very, very well and progressing very, very 
well. And again, Mr. Chairman, I feel very confident about 
that.

                            Missile testing

    Mr. Chairman, let me just mention two other comments before 
I close. One is on the issue of defense testing. Missile 
testing is very, very important to us, and I think we all are 
very, very confident in ensuring that we have a very, very 
successful test program for all of our missile defense 
programs, whether we're talking TMD or national missile 
defense. I have one last chart that I've laid out in front of 
you.
[GRAPHIC] [TIFF OMITTED] T02AP22.004


    It reflects the testing philosophy for all of our programs. 
It just happens that this test philosophy matches the test 
philosophy done by our DTE defense test environment and test 
community, the independent test community. We are also very, 
very confident that we are trying to lay out our programs in 
the same manner that's reflected on this chart.
    We have to make sure that we have a robust test program. 
Because of our compressed schedules, we don't have as many 
tests as I would like to see in programs of this importance. We 
also have, as I stated, some compressed schedules. So it's 
very, very important to us that we follow this hierarchy of 
tests. We follow the philosophy shown on this particular chart.
    The independent test community has raised concerns in the 
past about how well we're doing this, and I think you're very, 
very familiar, Mr. Chairman, with a recent test report done by 
the Institute of Defense Analysis, Gen. Larry Welch and a lot 
of others including my former boss, Dr. Paul Kaminski, who have 
specifically reviewed all of our missile defense test programs. 
We chartered them. I was one of the sponsors to look at our 
programs.
    They identified some concerns. And in some respects, I 
consider their report to be a wake up call to ensure that we 
don't deviate too much from the test philosophy shown on that 
last chart. As a result of that report and my concerns about 
making sure we do robust testing, we're going back and 
relooking at our--taking a relook at our theater missile 
defense programs and also at our national missile defense 
programs to ensure we know exactly the kinds of test we've done 
and whether there are some things that we need to do a little 
bit differently in terms of following this test philosophy. And 
I'm--what we find once we get a report out and continue our 
look see at how robust our test programs are.
    We're committed to ensure that we have an aggressive 
program. The threat warrants that we do that, but I want to 
make sure we're doing testing in the right manner to ensure 
effective and successful programs.

                           Advance technology

    Let me make my final comment, Mr. Chairman. The final 
comment talks about our third priority and that is advanced 
technology, making sure we continue an advanced and robust 
technology program. Just about 1 month ago marked the 15th 
anniversary of President Reagan's speech that launched the 
original Strategic Defense Initiative [SDI] Program. If you 
look back on our SDI Program, at the time, for very good 
reasons, we devoted some 70 percent of our budget to 
technology. The program was technology focused.
    Today, if you look at our programs, because of our emphasis 
on getting rubber on the ramp or capability in the field, only 
about 6.8 or 7 percent of our budget is devoted to technology. 
I am not confident, Mr. Chairman, that that's the right amount. 
I have a vision that I've articulated to our program office and 
to all of our executing agents that we would like to get our 
technology budget up to about the 10-percent level.
    That level matches the goals in the entire Department of 
Defense for advanced technologies. Now, I know the exigencies 
of the budget environment probably are not going to make it 
very easy for us to realize that 10 percent number. But we want 
to keep the stretch goal in front of us so we can try to ensure 
that we're doing everything we can to make sure we have a 
robust technology program.
    And two specific actions that I've taken to help us even if 
we can't get additional funding in this area is to ensure that 
we're leveraging the right kinds of technology funds with the 
money we have today and moneys in other areas within the 
Department of Defense. We started two specific things to ensure 
we do that.
    One, I have commissioned and started what I call a Joint 
Technology Board. It's an effort to bring together the 
technology experts from all the services. I have on that Joint 
Technology Board the missile defense expert from the 
laboratories down at Huntsville, AL, from the Army. We have the 
missile defense experts from the Navy's Research Laboratory. We 
have the missile defense and space experts from the Air Force's 
Research Lab at Kirkland Air Force Base in Albuquerque.
    Those people are part of my Technology Board to advise me 
on how we should spend our very precious technology dollars. 
They're also there to advise me where we may have plans to 
spend some technology money but somebody else in one of the 
other laboratories also has money devoted to that effort and 
how we might bring together our efforts so we can leverage, 
again, the very precious dollars that we have.
    Part of the responsibility of this Joint Technology Board 
is not just to advise me, but also to help me and my office to 
lay out a technology master plan, a road map for where we need 
to be in the future with all of our technology programs and 
where we specifically need to apply our efforts, particularly 
to ensure we can address the threats of the future. We have our 
first variant, first entity of this technology master plan that 
was published just in the last month or so. We're now taking it 
out to the entire missile defense community throughout the 
entire Department of Defense.
    We will also be sharing it with industry, and I think 
between these two efforts, even if we can't get our technology 
dollars up to about the 10-percent level, we will be doing a 
better job in the future of ensuring we have the right kind of 
focus on technology for missile defense.

                                closing

    Mr. Chairman, I'd like to close here. I've talked perhaps a 
little bit long because I wanted to assure you of the things 
we're doing to make sure we have robust and effective missile 
defense programs for the Department of Defense and for our 
country. I want to assure you and the committee members that we 
are absolutely committed to making sure we can provide those 
effective missile defense programs for our country and more 
importantly for our warfighters.
    We want to make sure in both theater missile defense and 
national missile defense we have effective programs, we have 
interoperable programs, and we also have affordable programs.

                           prepared statement

    Mr. Chairman, that concludes my remarks; and I'll be happy 
to address any questions you or the other members might have on 
this particular subject. Thank you very much.
    [The statement follows:]
             Prepared Statement of Lt. Gen. Lester L. Lyles
    Mr. Chairman and Members of the Committee, it is my privilege to 
appear before you today to present the Department of Defense's 
Ballistic Missile Defense (BMD) program and budget for fiscal year 
1999.
    Over the last few years, working with Congress, the Department of 
Defense has structured a comprehensive missile defense program that is 
responsive to the existing and emerging threat to the United States, 
our deployed military forces, our allies and friends. In years past we 
have characterized the BMD program as having three fundamental 
priorities: Theater Missile Defense (TMD), National Missile Defense 
(NMD) and Advanced Technology. While those priorities remain consistent 
today, I think we have modified them slightly to respond to emerging 
realities. First, increasingly, I refer to the program as missile 
defense instead of ballistic missile defense. This is because during 
the past year BMDO has taken on the additional responsibility for 
developing and integrating a joint architecture for theater air and 
missile defense (TAMD). I will provide greater detail on this matter 
later in my testimony. The next substantial modification has been the 
increased emphasis on NMD, with the designation of NMD as a major 
defense acquisition program (MDAP). This increased emphasis 
demonstrates that the Department's policy priorities are clear and 
remain consistent. Finally, we are focusing our advanced technology 
program to ensure that our resources are dedicated to those efforts 
that have direct pay off for missile defense technology needs.
    Last year's Quadrennial Defense Review (QDR) reaffirmed the 
importance and priorities of the missile defense program, including the 
integration of Cruise Missile Defense (CMD) activities into our 
capabilities. The specific recommendations of the QDR, which were 
designed to improve program stability and reduce risk, were provided to 
BMDO in the accompanying Fiscal Guidance. BMDO and our Service 
Executing Agents have successfully implemented the Department's 
direction. Our fiscal year 1999 budget reflects these adjusted 
priorities for the missile defense program. In order to successfully 
manage and execute these important priorities--and to successfully 
field missile defenses for the warfighter--I have directed my 
organization and our Service Executing Agents to evaluate and 
strengthen our management tools and processes. I will close out my 
statement with a review of the management improvements I have directed 
at BMDO.
    Before I begin with the programmatic details, I would like to 
outline for the Committee the highly active year we anticipate in the 
world of missile defense. It will feature some highly visible flight 
tests and program decisions that will demonstrate the results of our 
past efforts and investments. Frankly, I would characterize this year 
as one of ``challenging opportunities.'' I say this because almost 
everything we are attempting is a substantial challenge as we are not 
responsible for a single weapons system or even a class of weapons--but 
rather an entire joint mission area.
    One of our successes in this area is the shared responsibility of 
BMDO and the Joint Theater Air and Missile Defense Organization 
(JTAMDO) to provide the Joint Force Commanders with an improved 
capability to defend against air and missile threats. The JTAMDO is 
defining the required system interoperabilities and operational 
architectures and validating mission capabilities in coordination with 
the war-fighting CINC's and the military Services. BMDO assumes the 
role of System Integration Architect for theater air, cruise, and 
ballistic missile defenses working with JTAMDO and the Services 
translating the operational architecture into a systems architecture 
and carrying out systems engineering, integrated testing and program 
acquisition functions.
    Another example of our joint view of missile defense is in the area 
of Attack Operations. As a result of SCUD missile attacks during the 
1991 Gulf War, the Department decided that the preferred method of 
negating attack by threat missiles is to prevent launch by conducting 
attack operations. Such attack operations ultimately will help reduce 
our missile defense inventory requirements. BMDO and the Joint Staff 
have formed a collaborative team, which includes the Services and 
defense agencies, called the Joint Attack Operations Working Group 
(JAOWG) to improve our joint warfighting capability to conduct attack 
operations.
    Equally important is the need to conduct and evaluate realistic 
joint training, field experiments, and demonstrations. These activities 
are low cost, high payoff opportunities to improve our joint attack 
capability.
    While we consider our relationship with the Joint Staff, the 
CINC's, and the Services to be a success, the development and 
acquisition of systems in a joint manner remains a challenge. And when 
we add to that the technical challenges of missile defense, one 
immediately realizes how difficult a task this really is.
    This year we will conduct a series of important flight tests for 
our TAMD and the NMD programs. We will continue several important 
technology development efforts as well. The NMD program began 1998 with 
a highly successful flight test of the exoatmospheric kill vehicle 
(EKV) sensor, which I will address in more detail later on. Another 
major element of our NMD program strategy is the award of a Lead System 
Integration contract. We plan to award the LSI contract this Spring. 
Two contractor teams, Boeing North American and the United Missile 
Defense Company (a joint venture between Lockheed Martin, Raytheon and 
TRW) are competing for this effort. The LSI contractor's main task will 
be to complete element development and integrate the elements into a 
system in time to provide the Department a viable deployment option in 
the year 2000.
    Two systems in our TAMD program, the Patriot Advanced Capability-3 
(PAC-3) and Theater High Altitude Area Defense (THAAD), will undergo a 
series of intercept tests at White Sands Missile Range in New Mexico. 
THAAD is scheduled to fly two intercept attempts and PAC-3 will conduct 
five. As we have seen in the past, complex flight tests like the ones 
we plan to conduct this year are very challenging. Sometimes, we 
experience slight delays because of minor technical difficulties with 
either range instrumentation, the target or the interceptor vehicle. 
Moreover, the challenge of achieving a ``hit-to-kill'' intercept is 
significant when one considers that the closing velocities of the 
target and interceptor are over 8,000 miles per hour, depending upon 
the missiles' ranges. However, we are confident that we have structured 
our programs to succeed on the test range and look forward to beginning 
this new year of challenging opportunities. I will talk about both the 
THAAD and PAC-3 flight tests in more detail later in my testimony. We 
will also make several important decisions and conduct some less-
visible, albeit important, tests in our Advanced Technology program.
    Fiscal Year 1999 Program and Budget.--In order to address the 
missile threat and fully execute the plans for missile defense, the 
Department has structured a sound and affordable program for fiscal 
year 1999. The total fiscal year 1999 budget request for the Ballistic 
Missile Defense Organization is $3.605 billion. This includes $3.179 
billion for RDT&E, $409 million for procurement, and $17 million for 
military construction activities. Combining these three budget 
categories, Theater Air and Missile Defense programs account for $2.121 
billion or roughly 59 percent of the budget, while National Missile 
Defense represents $962.7 million or 27 percent. We are requesting 
$253.6 million for Advanced Technologies, which is about 7 percent of 
the overall budget. BMD Technical Operations accounts for $194.7 
million and is about 5 percent of the budget. Finally, two of our new 
program elements, Threat and Countermeasures and International 
Cooperative programs represent a total of $72.8 million, or about 2 
percent of the budget.

                                                     BALLISTIC MISSILE DEFENSE ORGANIZATION FUNDING
                                                                [TY dollars in millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  Fiscal year--
  Program                                              -------------------------------------------------------------------------------------------------
  element                     Program                                     1998          1999          2000          2001          2002          2003
                                                         1997 actual    estimate      estimate      estimate      estimate      estimate      estimate
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Procurement:\1\
  0208861C     THAAD System Procurement               ............  ............  ............  ............  ............  ............       131.952
  0208863C     HAWK Procurement                             14.989  ............  ............  ............  ............  ............  ............
  0208864C     TMD--BM/C\3\ Procurement                     17.320        19.653        22.827  ............  ............  ............  ............
  0208865C     PAC-3 Procurement                           219.038       341.300       343.235       446.737       431.543       417.973       381.306
  0208867C     Navy Area                                     9.087        15.058        43.318       125.679       155.034       226.607       215.780
                                                     ---------------------------------------------------------------------------------------------------
                 Total Procurement                         260.434       376.011       409.380       572.416       586.577       644.580       729.038
                                                     ===================================================================================================
           RDT&E:
  0602173C     Support Tech--Applied Research              122.176       109.628        86.866        79.370        75.295        69.722        67.533
  0603173C     Support Tech--Adv Tech Dev                  248.011       299.788       166.676       165.431       163.514       170.079       171.169
  0603861C     THAAD System--Dem/Val                       549.579       390.785       497.752        37.000         5.400  ............  ............
  0603867C     Navy Area--Dem/Val                          157.028  ............  ............  ............  ............  ............  ............
  0603868C     Navy Theater--Dem/Val                       304.171       419.414       190.446       186.144       183.258       139.273       144.357
  0603869C     MEADS--Dem/Val (PDN)                         58.825        46.144        43.027  ............  ............  ............  ............
  0603870C     Boost Phase Intercept--Dem/Val               22.755        15.766  ............  ............  ............  ............  ............
  0603871C     NMD--Dem/Val                                811.416       941.142       950.473       864.435       664.930       359.444       313.406
  0603872C     Joint TMD--Dem/Val                          493.429       582.000       176.846       219.480       217.220       221.349       219.982
  0603873C     Family Of System E&I                   ............  ............        96.915       130.289       141.315       155.948       147.810
  0603874C     BMD Technical Operations               ............  ............       190.147       161.136       165.802       170.125       166.617
  0603875C     International Cooperative Programs     ............  ............        50.676        37.716        37.555  ............  ............
  0603876C     Threat And Countermeasures             ............  ............        22.113        17.608        23.909        23.720        22.020
  0604861C     THAAD System--EMD                            66.737  ............       323.942       596.310       574.513       602.713       501.974
  0604865C     PAC-3--EMD                                  382.808       198.273       137.265  ............  ............  ............  ............
  0604867C     Navy Area--EMD                              143.343       278.790       245.796       231.592       160.193        50.296        36.792
  0908612C     Acq Stability Reserve                  ............  ............  ............         6.347        12.651        18.905        25.115
                                                     ---------------------------------------------------------------------------------------------------
                 Total RDT&E                             3,360.278     3,281.730     3,178.940     2,732.858     2,425.555     1,981.574     1,816.771
                                                     ===================================================================================================
           MILCON:
  0603871C     National Missile Defense               ............          .540        12.230  ............  ............  ............  ............
  0603872C     Joint Theater Missile Defense                 1.404         1.965          .331         1.372          .323         1.549         1.550
  0603874C     BMD Technical Operations               ............  ............         4.600  ............  ............  ............  ............
  0604861C     THAAD System                           ............  ............  ............  ............  ............  ............         4.689
                                                     ---------------------------------------------------------------------------------------------------
                 Total MILCON                                1.404         2.505        17.161         1.372          .323         1.549         6.239
                                                     ---------------------------------------------------------------------------------------------------
                 Total BMDO Program                      3,622.116     3,660.246     3,605.481     3,306.646     3,012.455     2,627.703     2,552.048
--------------------------------------------------------------------------------------------------------------------------------------------------------
           \1\ Returned to the BMDO.

           [GRAPHIC] [TIFF OMITTED] T02AP22.005
           

    Program Element Realignment.--As you will note, our program element 
structure has been modified in the fiscal year 1999 budget request. My 
organization proposed these changes to the Department, after consulting 
with Members and Committee staff, in order to update the program 
element structure to align with the current BMDO mission focus and 
program management responsibilities. The catalyst for this proposal is 
the fundamental shift in the Department's management approach for both 
the NMD program and TAMD ``Family of Systems,'' and Congressional 
direction on our International Cooperative program.
    Last year, the Deputy Secretary of Defense delegated to BMDO the 
total TAMD integration and architectural-level planning responsibility. 
These TAMD ``Family of System'' costs are now captured in the ``Family 
of Systems'' Engineering and Integration (FoS E&I) program element. 
These are the activities and functions primarily executed by BMDO's 
TAMD Systems Engineer and supported by the Chief Architect. These 
activities include providing optimal TAMD architectural solutions via 
cost-performance analyses evaluating the participation of each system, 
working in concert with all other systems, to address the entire 
theater-level threat. This program element will increase the stature 
and visibility of these architecture-level, MDAP-like program 
activities and costs, and align the program management responsibility 
for the TAMD efforts consistent with the current BMDO organization 
focus.
    The BMD Technical Operations program element captures those BMDO 
centrally-managed activities that provide functional expertise, 
analytic tools and support (i.e. the Joint National Test Facility), and 
test resources (i.e. data collection assets and test ranges) for TMD, 
FoS E&I, NMD and Advanced Technology efforts. These activities were 
previously ``housed'' across three separate program elements, with 
algorithms to determine cost-shares between TMD, NMD and Technology. By 
consolidating these activities into one program element, it enhances 
resource visibility and simplifies our management of these activities--
especially from the perspective of paying internal Departmental 
``taxes'' or allocating undistributed reductions in the authorization 
or appropriations processes.
    The creation of the International Cooperative Programs program 
element is in response to both a Congressional initiative and new 
Secretary of Defense cooperative program policy guidance. This program 
element contains significant developmental programs which are jointly 
funded with international partners. However, it specifically excludes 
the MEADS program (which is housed in its own program element) and 
small-scale Innovative Science and Technology programs. Hence, it 
provides greater insight and focus for BMD international cooperative 
programs.
    The Joint TMD, NMD, and Advanced Technology Development program 
elements have been modified to reflect the transfer of the 
infrastructure (Technical Operations) and International activities. The 
Boost-phase Intercept and TMD BMC\3\ program elements have been 
eliminated, as these costs have been accounted for in the new program 
elements. The remaining RDT&E and Procurement program elements for 
MEADS and the TAMD MDAP's are unchanged.
Theater Air and Missile Defense Programs--The Family of Systems
    The Family of Systems (FoS) concept is a flexible configuration of 
Interoperable Theater Air and Missile Defense systems capable of joint 
operations, which allows the joint force commander to tailor the right 
mix of systems and capabilities according to situation and threat. This 
FoS must be able to counter a wide range of threats providing a near-
leak proof shield to U.S. forces, allies and friends around the world. 
This mission cannot be accomplished with just one or two systems, it 
requires multiple systems designed to counter an ever-growing and 
diverse missile threat during all phases of flight.
    One system cannot do it all, which requires a layered defense 
allowing for multiple shot opportunities. The threat is so varied, and 
the mission demands so complex, that we do not currently have the 
technology to allow us to develop a single weapon system that can meet 
all of the demanding and complex requirements. In short, there is no 
single ``silver bullet.'' Multiple systems working in unison greatly 
enhance the probability of destroying incoming missiles before they can 
effect critical assets.
    For these reasons, BMDO is pursuing the acquisition and integration 
of land and sea-based systems that will effectively counter current and 
future theater missile threats. This strategy includes leveraging prior 
investment in ongoing Service programs, and developing new systems and 
capabilities for the future.
[GRAPHIC] [TIFF OMITTED] T02AP22.000

[GRAPHIC] [TIFF OMITTED] T02AP22.001

[GRAPHIC] [TIFF OMITTED] T02AP22.002


    Let me summarize the status of these programs:
    PAC-3.--The Patriot PAC-3 is the most mature of all our TAMD 
systems--it is currently in the Engineering and Manufacturing 
Development (EMD) phase of the acquisition process. PAC-3 is being 
fielded in the course of three phased upgrades called 
``configurations.'' Currently, we have fielded the first two 
configurations of PAC-3, providing the Army with improved operational 
performance. The third configuration will provide the final element in 
the form of the hit-to-kill interceptor missile, along with additional 
communications, radar, and ground support system improvements. I expect 
the program to conduct the first intercept flight this year, to be 
followed by a decision to begin Low Rate Initial Production (LRIP) of 
the new missile. The first deliveries of the ground system hardware and 
software have already begun, and development and operational testing 
will start this year. All of these efforts support a First Unit 
Equipped (FUE) date of late fiscal year 1999.
    The fiscal year 1999 budget request for PAC-3 is $137 million for 
RDT&E and $343 million for Procurement. The funding request supports 
the deployment of the Configuration 3 system starting in 2000.
    As the Committee is aware, we had planned to fly an intercept test 
for the PAC-3 missile in February but the test date has slipped. The 
reason for this delay is that the Patriot Program Manager assessed that 
the missile development effort and integration of the hardware and 
software into our hardware-in-the-loop testing facility would take 
longer than planned. As a result, we now plan for the test to take 
place in the fourth quarter of fiscal year 1998. The hardware-in-the-
loop and acceptance testing are important pre-flight qualifications to 
ensure that all system hardware and software meet our standards and are 
ready to fly. Operational testing is currently planned to begin in 
fiscal year 1999.
    Navy Area.--Following last year's successful intercept flight test, 
the Navy Area program was approved for entry into EMD on February 22, 
1997. The program will commence Development Test (DT) flight testing in 
fiscal year 1999, followed by an at-sea demonstration of the User 
Operational Evaluation System (UOES) in fiscal year 2000. LRIP will 
begin in fiscal year 2000, with an FUE date of fiscal year 2002. The 
BMDO fiscal year 1999 budget request for the Navy Area program is $245 
million for RDT&E and $44 million in Procurement funds. As part of our 
``shared approach'' for this program, the Navy has requested in their 
Procurement budget $111 million.
    Theater High Altitude Area Defense (THAAD).--The THAAD program is 
currently in the Program Definition and Risk Reduction (PD&RR) phase of 
development and is the most mature of our upper-tier TAMD systems. In 
1997, as a result of our failure to achieve an intercept in flight 
tests and the need to reduce technical and programmatic risk, the QDR 
endorsed a plan to restructure the program and to achieve a FUE in 
2006.
    After flight test seven, BMDO and the Army commissioned an 
Independent Review Team (IRT) to review the program's processes and the 
design of the THAAD missile. I believe the IRT has had a direct, 
positive impact on the way the THAAD program conducts its business. As 
a result, we have increased the rigor in our ground testing program as 
we prepare for the next flight test. That is where we detected the most 
recent technical problems. Therefore, I applaud the THAAD team for 
discovering these faulty components during their many ground-tests and 
quality assurance checks--well before we tried to fly the interceptor. 
The next flight test is scheduled for later this Spring.
    The Department's fiscal year 1999 budget request for $822 million 
fully supports deployment of the THAAD system in 2006. This level of 
funding is required for completion of the PD&RR flight test program, 
continuing risk reduction for EMD, and for acquiring missiles for a 
UOES capability. In fact, the budget request is tied very closely to 
three concurrent contractual requirements. About $414 million is for 
the extension and completion of the PD&RR flight test program and 
completion of the Pre-EMD risk mitigation effort. This risk reduction 
effort is principally focused on the design of the EMD radar and battle 
management software, both of which are on the critical path to 
achieving the FUE in fiscal year 2006. Another $302.9 million will be 
used to initiate EMD and its associated start-up costs, such as 
materiel orders, Government Furnished Equipment procurement and 
``turning on'' five major subcontractors. A substantial portion of the 
EMD start-up costs are associated with the THAAD radar development and 
not the interceptor missile. Finally, about $105 million will be used 
to execute the UOES missile buy for 40 missiles. This will provide the 
warfighter with an interim capability in fiscal year 2001 until the 
objective system is fielded. The THAAD program is currently on schedule 
to fly its next intercept attempt in May. A successful intercept will 
allow exercise of the UOES contract option.
    Navy Theater Wide (NTW).--The Navy Theater Wide program is 
currently in the Program Definition and Risk Reduction phase of 
development and is preparing for an initial Defense Acquisition Board 
(DAB) Review. This review is equivalent to a Milestone I review. The 
Navy has proposed an evolutionary acquisition approach consisting of an 
initial Block I system followed by a more-capable Block II system. The 
Milestone I-level DAB will be asked to review and approve the proposed 
evolutionary acquisition strategy. The fiscal year 1999 budget request 
for Navy Theater Wide is $190 million.
    Family of Systems Engineering and Integration (FoS E&I).--Each 
member of the Family of Systems contributes what is sees to a common 
picture of what is occurring in the battlespace, and then based on that 
picture, the warfighter launches the most effective and efficient 
response. All TAMD systems must be capable of joint or autonomous 
operations. For example, based on cueing from a space-based sensors and 
target detection and tracking by a THAAD radar, a Navy Area interceptor 
could be launched to counter a threat. This concept is demonstrated 
through a series of ``systems integration tests,'' such as the one we 
conducted last year, where we operate Army, Navy and Air Force TAMD 
sensors, such as the THAAD or AEGIS radars, to track and 
``communicate'' the threat with a Patriot firing unit.
    Our Family of Systems concept will provide the warfighting CINC a 
``plug and fight'' architecture, allowing him to selectively deploy the 
weapon system or systems tailored to the requirements of his theater. 
This Family of Systems responsibility means that all the TAMD weapons 
systems must be completely interoperable and capable of sharing and 
exchanging information that provides a common view of the battlespace. 
Through a rigorous systems engineering process, BMDO ensures that 
BMC\4\I, sensors, and weapons systems retain their singular capability, 
yet can function as one complete defense no matter what elements it is 
comprised of to meet the CINC's needs. The ``plug and fight'' approach 
enables the CINC's to tailor their forces to the threat and theater 
geography.
    Our budget request for Family of Systems engineering and 
integration is currently $96 million in RDT&E and roughly $20 million 
in Procurement funds. The responsibility for TAMD integration of 
ballistic missile defense, cruise missile defense, attack operations 
and the BMC\4\I ``back bone'' capability into a single integrated air 
picture will continue to drive the requirement for additional 
resources.
    Airborne Laser (ABL) program.--I would like to take a moment and 
talk about an important TAMD system that is a part of our Family of 
Systems architecture, but managed and budgeted by the U.S. Air Force. 
The Airborne laser is the Department's primary boost-phase intercept 
program for theater missile defense. BMDO and the Air Force work very 
closely to ensure that the ABL system is effectively integrated into 
our TAMD Family of Systems. When this system is developed and deployed 
it will provide our warfighters with a powerful TAMD capability and 
will strengthen our overall TAMD architecture. By providing a critical 
boost-phase intercept capability, before a missile can deploy a 
separating warhead or countermeasures, ABL will thin out the attack for 
ground- and sea-based TAMD systems.
    Medium Extended Air Defense System (MEADS).--The MEADS program is a 
cooperative development program with our German and Italian allies. The 
program is currently in the Project Definition and Validation phase, 
which is scheduled to be completed in the first quarter of fiscal year 
1999. The Memorandum of Understanding (MoU) negotiations for the Design 
and Development (D&D) phase are currently underway with our 
international partners. The QDR recommended continuation of the MEADS 
program and increased the fiscal year 1999 funding level to provide a 
bridge to the next RDT&E phase, D&D. In light of the QDR guidance, the 
importance of this international program and continuing Congressional 
interest in out-year funding, I raised MEADS as an issue during the 
Department's POM deliberations this past Fall. Nonetheless, other 
defense program priorities at the time superseded addressing the issue. 
During the POM process this Spring, the Department will identify the 
resource requirements for all BMD programs and future funding of MEADS 
will be reviewed in this process.
    Joint Theater Missile Defense.--This activity funds projects which 
support our TAMD programs. This includes target missiles, collection 
and analysis of target signatures, technical support and TMD-unique 
test resources. In addition, funding in this program element supports 
CINC-level planning and participation in wargaming exercises. This 
ensures that TAMD program development reflects military needs and the 
combined warfare capabilities of allies and friends. These efforts 
support all the TAMD major defense acquisition programs in a 
centralized manner. I believe such centralization reduces costs and 
enhances the integrity in our test program.
    National Missile Defense (NMD) Program.--The primary mission of the 
NMD system is to defend the United States against a limited ballistic 
missile threat by a rogue nation, should such a threat emerge. In 
addition, the NMD system would have some capability against a small 
accidental or unauthorized launch of a ballistic missile from more 
nuclear capable states. To ensure that the Department would have the 
required capability to defend the Nation against an emerging threat, it 
has adopted an ambitious strategy known as ``3 plus 3'' for National 
Missile Defense: by 2000 the United States will be in a position to 
make a deployment decision if warranted by the threat, which would 
result in the deployment of an initial NMD system by 2003. To meet this 
challenging schedule, and to mitigate risks, we have taken numerous 
steps to leverage previous NMD technology development. We are 
constantly evaluating our performance in mitigating risk to achieve the 
strategy and meet the program objectives. If, in 2000, the threat 
assessment does not warrant a decision to deploy, improvements in the 
NMD system component technologies will continue, while the ability to 
deploy a system within three years of a decision is maintained. In 
order to give the program the appropriate level of acquisition emphasis 
and oversight, NMD was designated an Acquisition Category (ACAT) 1D 
program and the Joint Program Office (JPO) under BMDO was formed to 
manage the program.
    NMD ``Tool Box''.--The NMD system is being developed with a 
flexible architecture to allow for a variety of deployment options in 
order to respond to unknown and emerging threats and provide an 
evolutionary path to a more robust system. The elements of this system 
include battle management/command, control and communication; the 
Ground-Based Interceptor; and X-band and upgraded early warning radars. 
The architecture also uses space-based sensors such as the Defense 
Support Program (DSP) and Space-based Infrared System (SBIRS). Since 
the architecture is very flexible, we refer to the collection of 
potential NMD system elements as the ``NMD Tool Box.'' Literally, as we 
approach the 2000 deployment decision and assess the threat to the 
United States, we will be in a position to determine which NMD system 
element ``tools'' we will need to address the threat. If the threat 
does not warrant deployment at that time, we will continue to develop 
and refine both the individual system element ``tools'' and strengthen 
the overall NMD architecture.
    During the past year, the NMD program has conducted two very 
successful flight tests that demonstrated sensor performance for the 
two competing contractor exoatmospheric kill vehicle (EKV) designs. 
EKV's are a major subcomponent of the GBI--indeed it is the ``front 
end'' of the interceptor that ``sees'' the target and destroys it by 
colliding with it at an incredibly high velocity. The first successful 
sensor flight test took place on June 23, 1997, using an EKV sensor 
built by Boeing North American. The second flight test, flying a 
Raytheon-designed EKV, took place on January 16, 1998. The purpose of 
each test was to analyze the ability of an EKV sensor to identify and 
track objects in space, including a representative threat target and 
decoys to provide risk reduction for future intercept flight tests, and 
to conduct an integrated system test of other NMD elements and 
surrogate systems. Data gathered during the tests indicate that both 
EKV sensors performed extremely well. The EKV sensor payload includes 
an optical seeker, a data processing system and a telemetry unit. The 
seeker and data processor are literally the ``eyes'' and ``brain'' of 
the EKV, enabling it to intercept an attacking intercontinental 
ballistic missile (ICBM). Neither of these flight tests attempted an 
intercept.
    In addition to these two important flight tests, the NMD team 
participated in three NMD risk reduction flight tests, in May, June and 
November 1997, to evaluate the BMC\3\ software and NMD system 
communications and cueing of ground-based sensors. Finally, the NMD 
program completed construction of the ground-based radar prototype 
facility at the Kwajalein Missile Range. The GBR will be used in 
upcoming flight tests and will play a vital role in next year's 
integrated system test.
    The next flight test for the NMD program will also be the first 
intercept test under the ``3 plus 3'' program. During this test, we 
will fly one of our competing EKV designs against an ICBM target. The 
interceptor and kill vehicle will be launched from the Kwajalein Atoll 
in the central Pacific Ocean and will attempt to intercept and destroy 
a ``dummy'' warhead deployed from a Minuteman ICBM launched out of 
Vandenberg AFB, California. A second intercept attempt, using the other 
competing EKV design, will follow and provide the data necessary to 
downselect to one EKV design. These represent important milestones on 
the path to the integrated system test in 1999 that will demonstrate 
overall system capabilities against threat-representative targets.
    In the very near future, BMDO and the JPO will announce the award 
of the Lead Systems Integration (LSI) contract. Two industry teams are 
competing for this contract: the Boeing Company and the United Missile 
Defense Company, a joint venture between Lockheed Martin, Raytheon and 
TRW. The LSI contractor's main task will be to complete element 
development and integrate the elements into a system in time to provide 
the Department a viable deployment option in the year 2000. We have 
received two excellent proposals and are completing our evaluation.
[GRAPHIC] [TIFF OMITTED] T02AP22.004


    Ballistic Missile Defense Testing.--Flight testing represents a 
particular challenge for advanced programs like ballistic missile 
defense hit-to-kill interceptors, especially when the test events are 
limited in number and compressed in time. As an integrated part of any 
military acquisition program, test and evaluation activities will be 
most successful if we can conduct them according to some important 
principles:
  --Event driven rather than schedule driven test events to have the 
        opportunity to apply test outcomes deliberately within the 
        systems engineering process.
  --Stable funding at levels to permit adequate testing.
  --A disciplined engineering approach extending throughout the system 
        development activity, to include its test and evaluation.
  --Modeling and simulation including full program life-cycle modeling 
        and simulation. Ground testing using hardware-in-the-loop and 
        software-in-the-loop test capabilities gives vital preflight 
        information, especially when conducted in realistic 
        environments.
  --Flight testing at a level that allows verification of system 
        performance and also to acquire the extensive data needed for 
        successive phases of engineering and development--and the 
        latter signifies substantial amounts of instrumentation.
  --Finally, because success can never be assured, spare resources--
        targets, interceptors and range instrumentation support are 
        needed to conduct a testing program consistent with these 
        principles.
    Despite the valuable information that flight testing produces, even 
in the absence of a successful intercept, we all recognize that the 
investment we make in a flight test, the publicity attendant to it, and 
the limited time and resources for accomplishing the performance 
verification of our interceptors, place a high premium of achieving 
successful flight test outcomes.
    In conjunction with the OSD testing organizations, I recently 
initiated an independent Task Force on Reducing Risk in BMD Flight Test 
Programs out of shared recognition of the challenge that flight testing 
represents. The report of that task force highlights a number of 
important aspects of our overall BMD test and evaluation program.
    The task force noted that there have been deviations from that 
philosophy in the past and our programs have been making adjustments 
over recent months to use our test and evaluation infrastructure more 
effectively. The task force found that PATRIOT's test and engineering 
approach was deliberate and is following a supportable schedule with 
adequate resources; and the PATRIOT program manager is staying the 
course.
    National Missile Defense has applied its additional funding, as 
intended, to increase the number of flight tests as well as supporting 
ground tests. The program manager has provided resources for both his 
targets program and engineering program to provide spare targets and 
system hardware.
    The task force's insights have generated a set of recommendations 
that I have shared with our PEO's and PM's, and I will be evaluating 
with them alternatives for how we might implement the recommendations 
for the benefit of all of our programs. The task force's tasking was to 
identify and additional ways in which we could bring best technology 
and practices to bear effectively on our T&E programs for hit-to-kill 
interceptors. Its recommendations point to engineering disciplines and 
management practices at the PM level and at my level. There may be 
value in taking its recommendations as the basis for a follow-on review 
team to report more specifically on the technical attributes that our 
test managers and infrastructure managers must plan for in their future 
test activities.
    Our existing and planned T&E and M&S facilities are complete and 
well-suited to meet the needs or our programs as they develop hardware 
from flight testing. The task force has reported persuasively that we 
need to keep greater discipline in using those capabilities as 
intended. BMDO recognizes its important role, not only in bringing best 
technology and practices to bear, but in helping our programs apply 
them in consistent ways to help solve the engineering challenges of 
building hit-to-kill interceptors.
    Threat and Countermeasures Program.--Fiscal year 1999 marks the 
first time that our Threat and Countermeasures program is treated as a 
separate program element of our requested budget. I directed that we do 
this in response to recommendations by Congress that this important 
area of our program gain greater oversight visibility. In addition, it 
is a prudent step because it simplifies our internal budgeting 
practices and allows us to make program and budget decisions in a more 
coherent fashion. The fiscal year 1999 request for this program element 
is $22 million, or roughly 0.6 percent of our budget.
    BMDO's Threat and Countermeasure program provides a wide spectrum 
of intelligence and threat support to all aspects of the missile 
defense program. The efforts covered under this program element 
directly support our TAMD and NMD acquisition programs by providing 
potential threat and countermeasure information central to the planning 
and execution of those programs. In addition, it supports our Advanced 
Technology program by providing information on future threats and the 
timelines associated with their emergence. Our effort draws heavily on 
the Intelligence Community for analysis, reports and, in some cases, 
collection of technical data in the field. It also sponsors threat work 
tied closely to the performance parameters of BMDO's defense systems, 
exploring possible vulnerabilities as they might be perceived by 
potential adversaries. This countermeasures-oriented work is conducted 
in a systems engineering context by means of a newly developed threat 
risk assessment methodology that is supported by selected hardware-
oriented experiments. For example, we work with the U.S. Air Force 
Phillips Laboratory's Countermeasures Hands-on Project (CHOP) to assist 
us with such hardware-oriented efforts. Lastly, the BMDO Threat and 
Countermeasures program produces a series of carefully constructed and 
documented missile attack scenarios, including simulated flight 
trajectory information, for use in many forms of missile warfare 
engagement modeling and simulations. These include wargames conducted 
at the Joint National Test Facility in Colorado Springs, Colorado.
    Advanced Technology Programs.--For many years the primary focus of 
the Nation's missile defense program was the research and development 
of fundamental technologies. Under the Strategic Defense Initiative 
(SDI) program, the focus was largely directed toward the development 
and demonstration of technologies useful in building a missile defense 
system capable of defending the United States against missile attack. 
Therefore, the budget dedicated to technology development was 
significant. The dividends from those investments are substantial, for 
as the program focus shifted to the development and fielding of actual 
defenses for the theater and Nation, we were ready to ``cash in'' on 
those technologies we had developed.
    However, with the increased emphasis on fielding TAMD systems and 
developing an NMD system for deployment, one critical effect has been 
the limited resources available for continued technology development. 
Today, our technology budget accounts for only 7 percent of the overall 
BMDO budget request. Continued technology investment is absolutely 
necessary because it represents not only our seed corn for future 
missile defense systems, but it also helps us address near-term 
technology needs that our MDAP's may experience. The chart on the 
following page illustrates the declining investment in technology 
programs.
[GRAPHIC] [TIFF OMITTED] T02AP22.005


    Today's technology program, therefore is a leaner one. However, 
reduced resources present us both a challenge and opportunity. Reduced 
resources drive us to the challenge of ensuring all our technology 
efforts are directly relevant to the mission of missile defense--to 
make every dollar spent on technology truly matter. With this in mind, 
I have instituted two major efforts that demonstrate we are rising to 
the challenge and seek greater cooperation with the Services in this 
critical area.
    Joint Technology Board.--The first effort is the Joint Technology 
Board (JTB) which will examine areas where BMDO and the Services can 
better coordinate technology efforts, share resources and leverage off 
one another to develop an integrated technology program. The JTB 
includes members of my staff and representatives from the Service 
technology communities. The JTB advises me on the advanced technology 
program, ensures the Services have better insight into the BMD 
technology program, and provides an avenue for BMDO to work with the 
Services to understand both their technology requirements and 
investments. The JTB works within our existing BMDO ``board 
structure.'' Hence, by being fully integrated into our core processes, 
the JTB represents a critical management response to the challenge of 
leaner technology resources. Indeed, we have come to the point in time 
where we must think smarter and not simply rely on increased resources 
to meet the missile defense challenge. This initiative ties directly 
into the second one, the establishment of a Missile Defense Technology 
Master Plan.
    Missile Defense Technology Master Plan.--In a few moments, I will 
address some of the initiatives I have instituted at BMDO to strengthen 
our management and execution of the program. One of those is the 
development of an organizational strategic plan, which includes the 
``mission essential task'' to plan and execute a coherent missile 
defense advanced technology program that reduces program risk, improves 
system performance and affordability, and keeps pace with the threat. 
The Technology Master Plan is the guiding document that will help us 
implement this mission essential task. The plan represents a 
fundamental shift in the way we do business in the BMDO advanced 
technology program. It represents a development and maturation program 
consistent with the requirement of maintaining and enhancing U.S. 
technical superiority in missile defense technologies. The Technology 
Master Plan will address the issue of transitioning technology 
investments into the MDAP's using a more structured and routine 
planning process. Specifically, the process will:
  --Create a greater understanding of the evolving threat and mission 
        essential/enabling capabilities;
  --Identify and define which technologies should be pursued to keep 
        pace with the threat, reduce MDAP costs, and mitigate MDAP 
        risk;
  --Identify the timelines along which technology development should be 
        undertaken;
  --Align existing technology programs and development of new programs 
        to meet the needs and foster innovative technologies for 
        potential BMD applications; and
  --Determine the level and timing of required financial resources.
    The approach I have directed follows a path from understanding the 
BMD architectures to identification of missile defense drivers to meet 
military needs. From there we identify technology needs, along with 
solutions which satisfy those needs and produces an investment 
strategy. The Technology Master Plan is designed to have a major 
influence on the development and execution of the BMDO advanced 
technology program, as well as the BMDO budget process. Therefore, the 
process is closely coupled and synchronized with the overall BMDO and 
Office of the Secretary of Defense financial planning, programming and 
budgeting process--the PPBS.
    The Technology Master Plan process begins each year in January with 
an annual review of both the evolving threat and the performance of the 
MDAP systems under development. Working with the user representatives, 
MDAP Program Managers, and others in the missile defense community, my 
Chief Engineer will identify needs for technology focus to counter 
evolving threats by existing or new systems/architectures, reduce MDAP 
costs and mitigate MDAP risks. These technology needs are then 
prioritized and approved by my System Architecture and Engineering 
Board. The technology needs are then used as input by my Deputy for 
Technical Operations, who in turn formulates and designs the advanced 
technology program.
    To achieve these objectives, we will use an approach similar to 
Integrated Product Teams (IPT)--however, they will be called Technology 
Planning Teams (TPT). We have set up TPT's for specific technology 
areas, such as Interceptor and Surveillance Technology, and will soon 
set up a TPT for BM/C\4\I and others. Membership of the TPT's is both 
diverse and inclusive to provide a comprehensive, corporate approach. 
They will include Service representatives of the Program Executive 
Officers (PEO's), the MDAP program offices, the threat community, 
technology program managers and executing agents, BMDO, and the Defense 
Advanced Research Projects Agency (DARPA). The Joint Theater Air and 
Missile Defense Organization (JTAMDO) and organizations within OSD are 
also invited to participate.
    Throughout the technology planning process, periodic reviews are 
provided by senior leadership from BMDO and the Services. The Joint 
Technology Board, System Architecture and Engineering Board (SAEB) and 
Planning and Resources Board (PRB) will review the results of the TPT's 
during the course of the planning year. This rigorous review cycle 
ensures that the Technology Master Plan addresses the challenges of 
emerging threats; provides a means to address technical issues as they 
arise in the acquisition process and executes technology programs to 
provide for block upgrades or pre-programmed product improvements for 
BMD systems. Finally, the missile defense technology investment 
strategy that results from the Technology Master Plan has the single, 
important goal of providing maximum effectiveness for each defense 
dollar spent. My bottom line is that the Technology Planning Process 
ensures a strong, effective and stable technology program which is 
responsive to the needs of BMDO, the Services and our Nation.
    Advanced Technology Programs.--While we just started the Technology 
Master Planning process during this past year, we obviously have a 
legacy of technology developments which have laid the foundation for 
today's missile defense systems. The focus of our technology program 
has been, and will now be in a stronger sense, focused on developing 
those components and systems that may be required in the future. 
Currently, the largest efforts we have underway are two specific 
programs: the Space-based Laser (SBL), a high-payoff next-generation 
concept for a missile defense weapons, and the Atmospheric Interceptor 
Technology (AIT) program, a technology integration program to exploit 
advances in kill vehicle technology to counter more complex threats. 
Together, these two programs represent roughly 33 percent of the 
advanced technology program budget in fiscal year 1999.
    Space-based Laser.--The SBL program is a high-payoff, next 
generation concept for a missile defense system. The SBL system, if 
developed and deployed, could provide highly effective boost-phase 
intercept of both longer-range theater-class and strategic ballistic 
missiles. Working with ground-based defenses, the SBL's boost-phase 
intercepts would ``thin out'' missile attacks and reduce the burden on 
ground- or sea-based mid-course or terminal phase defenses.
    Last year BMDO and the Air Force signed a Memorandum of 
Understanding, designating the Air Force as the new executing agent for 
the program. While the SBL remains an important BMDO technology program 
and will continue to be funded in the BMDO budget, the Air Force will 
be responsible for executing the program. As the Director of BMDO, and 
the Acquisition Executive for BMD programs, I will retain the role of 
program oversight and will be responsible for centrally planning and 
budgeting for SBL. In addition, I will be responsible for making 
overall system architecture trades for SBL as we integrate it both as a 
technology development program and as a potential weapon system in the 
future.
    In response to Congressional interest in accelerating the 
development of the SBL technologies through a readiness demonstration 
program, both BMDO and the Air Force sought to increase program 
resources through the Department's POM process. Other Defense program 
funding needs superseded this BMD funding issue. Together, BMDO and the 
Air Force internally realigned approximately $65 million for SBL in 
fiscal year 1999, with a combined budget request of about $94 million. 
BMDO added approximately $30 million to its previously planned budget 
and the Air Force added $35 million. Funding at this level allows the 
program to progress at the level of maturing SBL technology and 
components, but precludes the integration of those components and 
launching an SBL readiness demonstrator in the foreseeable future. BMDO 
and the Air Force are currently reviewing the feasibility of 
alternatives to such a launch by the year 2005. The Air Force recently 
concluded that a more realistic approach may be to plan a space-based 
experiment for 2008. The Air Force has awarded two Concept Definition 
Study contracts with industry hardware teams to examine all the 
development options and lay out schedules which bracket a number of 
potential launch dates for a space-based experiment. Once these studies 
are reviewed, the Air Force and BMDO will make a concept decision. This 
approach allows us to reduce development risk and test a configuration 
that would be more readily scaleable to an operational system.
    In parallel to the Air Force concept definition studies, BMDO is 
working to identify a suitable location for a facility to develop, 
integrate and test the SBL system. The current test facility in San 
Juan Capistrano, California has been deemed inadequate to fully 
integrate and ground-test a readiness demonstrator and prepare it for 
space-launch. Site selection is expected to be completed by late Fall 
1998. Four potential sites have been visited by a site selection team. 
They are Cape Canaveral Air Force Station and Kennedy Space Center, 
Florida; Stennis Space Center, Mississippi; and the Redstone Arsenal in 
Huntsville, Alabama. I will keep the Committee fully informed as this 
process proceeds.
    Atmospheric Interceptor Technology.--The other major technology 
endeavor is AIT. It is a technology integration effort which will 
exploit advances in hypervelocity hit-to-kill vehicle technology to 
counter more complex and evolving threats. I do not view the AIT 
program as the development of a new system per se, but rather a 
technology testbed. In this approach, we use the AIT program to develop 
component technologies which could be applied to current acquisition 
programs as part of a pre-programmed product improvement program. The 
AIT program is designed to provide: new capabilities with reduced costs 
and risks compared to current interceptor weapons systems, and 
enhancements to other interceptors under development; reduction of 
technical risks and costs in support of current acquisition programs 
through direct technology insertions; and technical solutions to 
provide theater missile defense interceptor capabilities for 
contingencies and against advanced threats not currently addressed by 
the TMD system programs.
    I have specifically directed that AIT be planned and conducted with 
BMDO, Navy, Army and Air Force cooperation to make maximum use of 
existing Service infrastructures and to ensure that AIT is responsive 
to the needs of our current TMD acquisition programs. As part of this 
process, the Army and Navy in particular have provided information 
about their requirements in order to ensure AIT meets the needs of its 
primary end users.
    BMD Management Initiatives.--During the past year, my staff and I 
have embarked on a critical process of developing and strengthening our 
management tools. Specifically, we have begun our strategic planning 
process, refined and strengthened our corporate board processes, 
commenced a second round of our internal management reviews, initiated 
cost control and Cost as an Independent Variable (CAIV) measures and 
begun work on our performance-based contract. These measures will help 
us focus our efforts, ensure our resources are appropriately allocated 
to developing and fielding missile defense systems, and organize our 
efforts toward achieving those important results.
    Strategic Planning.--As I mentioned at the beginning of my 
testimony, BMDO does not manage a particular weapon system, nor even a 
class of weapons. We manage the development and acquisition of an 
entire mission area--one which cuts across all the Services. No one 
else in the Department does this to the scale that BMDO does. 
Therefore, in line with our chartered responsibilities, BMDO's vision 
is to be the Department's premier joint mission area acquisition 
agency, ensuring the deployment of interoperable missile defenses to 
the warfighter. Our strategic plan is our roadmap to achieve new levels 
of missile defense effectiveness, interoperability, and affordability 
for the 21st century. Our plan embodies the relevant elements in Joint 
Vision 2010, the Office of the Secretary of Defense planning and 
acquisition guidance, the Quadrennial Defense Review, and the National 
Defense Panel. The Strategic Plan focuses our efforts toward the 
successful development, deployment, and follow-on initiatives for both 
NMD and TAMD.
    Within the Department of Defense, BMDO is responsible for managing, 
directing, and executing the acquisition of joint missile defense 
systems. This is our mission and reason why a centrally-organized BMD 
agency exists. In order to achieve this mission, we have identified a 
series of mission essential tasks, with each task incorporating key 
performance goals that deliver greater service, foster partnerships, 
and drive our own internal reinvention. To this end, BMDO strives to 
develop the systems which will defend our Nation, our deployed forces, 
friends and allies. In so doing, we seek to become the premier agency 
for achieving the National Performance Review Reinvention Impact 
Center's acquisition goals by the year 2000. The Mission Essential 
Tasks that we are dedicated to executing are:
  --Serve as the Nation's source of technical expertise for all matters 
        relating to ballistic missile defense;
  --Establish and implement joint systems engineering processes that 
        provide the technical foundation for BMD planning and 
        execution;
  --Develop and enable the deployment of a cost effective, affordable, 
        and interoperable Theater Air and Missile Defense (TAMD) to 
        meet the missile threat to deployed U.S. forces, friends, and 
        allies;
  --Develop options to deploy a National Missile Defense (NMD) for the 
        United States, should a deployment decision be required;
  --Plan and execute a coherent missile defense advanced technology 
        program to reduce program risk, improve systems performance and 
        affordability, and keep pace with the threat;
  --Lead the international dialogue and cooperation for missile defense 
        activities;
  --Articulate and advocate the joint mission area of missile defense;
  --Support our people by developing and implementing human resource 
        strategies that enable and enhance the achievement of our 
        vision and mission; and
  --Plan and execute a program budgeting system process and other key 
        business processes that enable and support the accomplishment 
        of our mission essential tasks.
    These tasks are goals upon which our performance will be measured. 
They also simultaneously serve as a planning tool and our basis for 
benchmarking. Each one of these mission essential tasks include a full 
implementation plan, with measurable activities and outcomes. My 
intention in embarking on this process is to: first, to comply with the 
Department's Defense Reform Initiatives; and, just as importantly, add 
rigor into every one of our efforts to ensure that we are appropriately 
focused toward achieving results.
    Even before we began our strategic planning process in earnest, my 
senior staff and I redesigned our corporate board processes. The two 
most central are our Systems Architecture and Engineering Board--which 
reviews critical systems-level and architecture-level issues and makes 
fundamental system or architectural decisions--and our Planning and 
Resources Board--BMDO's senior executive corporate body--which reviews 
and directs all missile defense plans, programs, budget actions and 
policies. During the past year, we have made major strides in 
streamlining these processes, ensuring the inclusion of Service program 
stakeholders, and focusing our efforts toward more timely decisions. In 
addition, my Deputy, Rear Admiral Richard West, has been spearheading 
our Management Review Team effort to review our organization, staffing 
and use of support service contractors. The purpose is to assess how we 
are organized and staffed to perform our mission--with the purpose of 
buttressing those areas that need additional focus and resources while 
reducing those areas that no longer require the support they 
traditionally have enjoyed. I expect that this process will conclude 
later this Summer, with organizational adjustments occurring in the new 
fiscal year.
    Cost as an Independent Variable (CAIV).--In order to control 
missile defense program cost growth, I am in the process of instituting 
very specific processes and procedures for all our acquisition programs 
to follow. Cost as an Independent Variable (CAIV) features aggressive, 
realistic cost goals that the Program Manager and the contractor team 
work together to meet or exceed. Given the costs of developing and 
fielding missile defense systems, and the overall constrained Defense 
budget, we must effectively utilize these tools to contain or reduce 
program life-cycle costs.
    While the NMD Program CAIV process is under the purview of a single 
program manager who is managing a single acquisition program, the CAIV 
process for theater missile defense programs is complex because we are 
involved in a joint mission area, as opposed to a single acquisition 
program. While an individual TAMD system Program Manager has the 
primary responsibility to formulate CAIV metrics tailored to his 
specific program and will use those metrics to manage progress toward 
cost objectives, BMDO must be concerned with the overall architectural 
impacts. For example, the design of an interceptor in one TMD system 
may impact the design or performance of a fire control sensor and the 
battle management/command, control and communications. Therefore, these 
``cross system'' interfaces must be carefully coordinated to achieve 
the full system requirements. Hence, BMDO has the responsibility for 
overseeing the implementation of TAMD CAIV, whereas the individual 
Program Manager bears the primary responsibility for the development 
and management of TAMD CAIV objectives for his program. Implementation 
of this important process involves the necessary procedures to state 
requirements in terms of needed military capability at the architecture 
level without offering specific system designs. Architecture cost 
objectives may be established through analysis of architecture-level 
development and performance issues which drive element costs. 
Therefore, CAIV at the TAMD architecture-level will allow the process 
to ``trade-off'' requirements, design parameters, and features versus 
cost of individual elements, while producing a missile defense system 
that fully provides the needed military capability. I consider our cost 
control measures to be an extremely important element of our 
overarching effort to develop and field highly effective and affordable 
missile defense systems.
    Performance-based Contract.--Finally, we are beginning to develop 
our performance-based contract. As the Committee is aware, the Deputy 
Secretary of Defense will chair the Department's Defense Management 
Council. All defense agencies and OSD staff offices will be required by 
the end of the fiscal year to prepare, negotiate and sign a performance 
contract with the Defense Management Council. This contract will be 
directly linked to the BMDO strategic plan. If the strategic plan is 
our roadmap, then the contract will be the guideposts that measure our 
progress.
    I view these management initiatives as absolutely critical efforts 
that will ensure we remain focused on our goals and deliver for the 
public, the Congress and our warfighters the very best systems and 
technologies we can in an affordable manner. My staff and I are 
committed to accomplishing these important mission essential tasks--in 
spirit, in results, and in the stewardship of our vital defense 
resources.
    Closing.--Mr. Chairman, in closing I appreciate the opportunity to 
appear before the Committee and share my perspective on the BMD program 
and budget. This is indeed an ambitious year in the world of missile 
defense. We will attempt more flight tests and intercept tests this 
year than any previous year. As we have already seen, some of those 
tests have experienced delays. However, I encourage the Committee to 
not equate delay with failure. These are very complex weapons systems. 
They operate at extreme conditions of speed, atmospheric pressures, and 
short times of flight. The closing velocities of the target and the 
interceptor are absolutely incredible. And we are attempting to create 
a TAMD ``family of systems'' that are interoperable with other Service 
systems. Indeed, we are attempting things that are not frequently 
accomplished elsewhere in the Department. While I will admit that I do 
not want to see any further delays in the PAC-3, Navy Area, THAAD or 
Navy Theater Wide programs, I am encouraged that these most recent test 
delays are the result of strong quality control checks and procedures. 
Frankly, I would rather see a flight test delayed because an astute 
engineer or technician questions the reliability of a component during 
a pre-flight review, than see a flight take place and fail because of 
faulty quality control processes. The importance and expense of these 
flight tests are too high to risk failure in the name of haste. We must 
obviously balance the need to demonstrate and field these systems as 
quickly as possible with the responsibility to ensure they are fully 
effective. I am confident that both PAC-3 and THAAD will experience a 
successful series of flight tests beginning in the very near future.
    Mr. Chairman, I am delighted to report that the NMD program is 
progressing on schedule. Brigadier General Cosumano and his team are 
literally working six and seven days per week to conduct the planned 
test program and to execute all the critical acquisition process 
requirements for this program. I think they should be commended for 
their drive and perseverance to ensure the Nation is in a position to 
make a deployment decision in 2000, if required by the threat. In spite 
of the fact that the NMD program has an extremely aggressive schedule 
and is technically challenging, I am confident that once the third 
critical element of the NMD strategy--the LSI contractor--is in place, 
General Cosumano and his team will continue to make unprecedented 
progress in the 3 plus 3 program.
    Mr. Chairman, I encourage the Committee to support our efforts to 
bring strength and coherence to our advanced technology program. Our 
Technology Master Plan represents a critical roadmap to the future for 
this portion of the missile defense program. While we started the 
technology planning process out of sequence, we recognized its 
importance and have been working the monumental task of a yearlong 
process in roughly six months. Again, the dedication of the BMDO and 
Service Executing Agent staffs has been remarkable. The level of 
teamwork and jointness across BMDO and the Services in this critical 
area has been tremendous. I ask that the Committee have patience as we 
continue to build the correct technology roadmap and identify critical 
technology needs. Ultimately, I ask that the Congress help us instill 
both coherence and relevance into the investment plan for our missile 
defense future. With the Technology Planning Process we are trying to 
rigorously assess where we must invest. I feel this is an issue that 
requires strong leadership on the part of both the Administration and 
Congress--to ensure we provide adequate funds for our future. If we 
fail to invest today in a coherent and relevant manner, those component 
technologies and follow-on systems will not be there when we need them 
five, ten or fifteen years hence. We must maintain our technological 
superiority in the face of evolving and emerging threats across the 
spectrum--especially as weapons of mass destruction and missile 
technologies proliferate.
    Finally, Mr. Chairman, after another year as Director, I must tell 
you how impressed I am with the combined Government-industry team that 
is working to develop and field highly effective missile defenses. This 
is true in every part of our program: TAMD, NMD, Technology and our 
Management team. Missile Defense is a very challenging field. In many 
ways, this team is charting new ground for the Department. This is 
frequently overlooked. BMDO is not responsible for a single weapon 
system or even a class of weapons. We are responsible for a new 
concept: joint mission area acquisition. As we have all seen, this 
requires incredible levels of support from the Services and the OSD 
staff to embrace the notion of jointness. In many ways, this requires a 
cultural change for the Services and Department--to look beyond a 
single Service solution--because in future conflicts our military will 
be called upon to fight jointly. Therefore, as we must develop and 
acquire our missile defense systems in the same joint manner. While our 
critics may focus on the differing interests of one Service over 
another, the most important message I want to convey to the Committee 
is that today, we are working together better than ever before to build 
into all our missile defense systems the capability to communicate and 
fight together. That is our mission and I am confident that we will 
succeed.
    Thank you Mr. Chairman, I look forward to working closely with you 
and the Members of the Committee on this important program. Mr. 
Chairman, that concludes my statement. I look forward to answering the 
Committee's questions.

                            Out-year funding

    Senator Stevens. Thank you, General. We will run the clock 
up here on a 10-minute basis. I do want you to know that we 
have great confidence in you and your leadership, and there is 
some political problems developing, and you have been very 
capable in keeping yourself out of those political problems. 
But we have a very difficult problem facing BMDO, and that is 
the out-year due bills. You do not have any funds now 
identified for the 1999-2003 Defense budget to deploy a 
national missile defense system or to develop and buy MEADS.
    Those are both multibillion dollar bills. Congress has 
urged BMDO to accelerate the Navy theater wide missile defense. 
Senator Lott and others have urged BMDO to move forward with a 
demonstration of a scale model. That would cost $2.3 billion. 
We have now given you responsibility for 10 missile defense 
programs and almost every one has cost more than was originally 
estimated. I really think that the real problem we face is the 
continued deployment that we have had of our forces in Bosnia 
and in the Persian Gulf is eating away at our ability to 
develop the systems our Nation will need, in my judgment, and 
need them long before we are going to have them. I would urge 
that we find some way to try to settle in on a system and try 
to develop it. I remember so well the arguments we had here 
with some of your predecessors over the question of PAC-2.
    And although it did not solve the whole problem, at least 
it was available when we needed it. And I have that feeling 
that we are not going to have anything available when we need 
unless we start singling out something and moving forward. I do 
congratulate you personally for your decision to be very 
thorough about testing, but I do think that somehow or other 
there is a lot of intraservice competition entering into this.
    I, as I indicated before, personally am extremely disturbed 
over this attitude that is now coming out of the Army that the 
testing that is going on or proposed to be tested up my way is 
just an exercise in futility, and they are doing everything 
they can to block it. With attitudes like that really reflect 
intraservice rivalry. I think the whole system is going to lose 
support that it needs in Congress.
    So I would urge you to do what you can to straighten this 
thing out so we do not have that kind of development. It does 
seem to me and you really have emphasized PAC-3, and whether it 
is PAC-3 or 1 of these other systems, if 1 of them shows 
capability of moving forward, I think we are going to have to 
decide to move 1 or 2 forward and not to spend all our time on 
10 or more systems.
    You mentioned that you believe we should have a system that 
would provide protection for all 50 States, and I remember when 
Senator Inouye and I heard the proposal that indicated that the 
system that would be considered would not cover our States and 
probably not some of the southern States. I want to ask you 
again, do you think we should put a requirement in law that the 
system to be deployed should protect all 50 States?

                          NMD threat coverage

    General Lyles. Mr. Chairman, I think we already have that 
requirement. And actually, it's been stated in two ways. It's 
been stated within the Congress. It's actually language within 
the fiscal year 1998 authorization bill. But even before that, 
the requirements given to me by the user, by CINC-SPACE, 
Commander in Chief for U.S. Space Command, was to protect all 
50 States. That's an absolute for us for the National Missile 
Defense Program, and we are not deviating from that at all.
    Senator Stevens. Then I do not understand without 
modification why we are spending money on the Grand Forks 
deployment because by definition it does not cover 50 States.
    General Lyles. Mr. Chairman, as we look at the various 
architectures, possibilities, one of the key things is to 
understand where the threat might emanate. And I'd love to come 
back and lay out and show you some of the classified charts. I 
can't do it in this particular room with the audience here.
    But there are some threats from some places around the 
world where you could actually provide protection for all 50 
States from the one site that you mentioned. That's not 
necessarily from all threats. They can't meet it from all 
threats. So we are looking at examining all the different 
architectural approaches, but the key premise for us, the key 
mandate--it's not just a premise--is protection for all 50 
States.
    Senator Stevens. Well, I think I can use the reference to 
C-1 threat, can I not, here?
    General Lyles. Yes, sir, you can. Yes, sir.
    Senator Stevens. Well, where Senator Inouye and I live, the 
C-1 threat is predominant. The Grand Forks deployment will not 
protect against that. I do not have--I really think that the 
two of us are going to have to get on our high horse here 
pretty soon because it seems that we are at every turn that is 
being forgotten.
    General Lyles. Sir, I can assure you that I haven't 
forgotten it, that the Joint Program Office and the program 
manager, Brig. Gen. Joe Cosumano sitting behind me, we 
absolutely have not forgotten that. And the term we use, Mr. 
Chairman, is C-1 capability, and that C-1 capability will look 
at all varieties of threats and depending on where the threat 
emanates we will make sure that if there is a decision to 
deploy we always deploy to protect all 50 States. And I can 
promise you that that is not something we're deviating from.

                              Welch panel

    Senator Stevens. You mentioned the Welch panel. That panel 
based on its review said this: successful execution of the 
three-plus-three formulation on the plan schedule is highly 
unlikely. You again this morning mentioned three-plus-three. 
Can you realistically develop and deploy that national missile 
defense system by 2003?
    General Lyles. Mr. Chairman, that is exactly what we're 
trying to do. As I've stated to the committee and other 
committees last year and throughout the past year, it is a very 
high risk schedule. The program was laid out as sort of a hedge 
strategy because of the concerns about a possible emerging 
threat.
    And so we are trying to do this in a very aggressive 
manner. I don't disagree, and actually I support everything 
that came out of General Welch's study. Again, we were one of 
the people who commissioned that study, and what we have to do 
is sort of make a balance between good, robust proper 
hierarchal testing and also the need to ensure we get a 
capability as rapidly as possible. So we are desperately trying 
to make that a reality.

                             NMD deployment

    Senator Stevens. But I think Welch's panel looked at the 
probability of funding at the current level of the budget. 
Would you give us your best estimate of the cost and schedule 
for deploying the initial national missile defense capability 
for the record?
    General Lyles. For the record--I'd like to provide it for 
the record if I could, Mr. Chairman. And one of my reasons for 
hesitating in discussing it openly is that the cost, the real 
costs, are going to be part of this down select source election 
decision we're going to make in the next couple weeks from this 
prime contractor. And to give you real good numbers, I'd like 
to provide that for the record and tell you exactly what----
    Senator Stevens. I am not trying to compromise your 
judgment on that. What I am trying to see is whether it is 
really possible with the budget we have. I really do not see 
the budget capability to add the money that is necessary to 
meet the existing bills, as I said.
    General Lyles. Oh.
    Senator Stevens. The out-year bills that are due under the 
system already seem to eat up the money, and we do not see a 
capability of funding that in the three-plus-three concept 
under this budget as it stands now.
    General Lyles. I'm sorry, Mr. Chairman. I gave you the 
wrong answer. You were correct. We do not, and the 
administration's position has been there are not deployment 
dollars currently in our budget for it to be three-plus-three.
    [The information follows:]

                     National Missile Defense [NMD]

    Current RDT&E funding for NMD development is sufficient to 
complete the system design for an initial operational system by 
fiscal year 2003, if a decision to deploy is made in fiscal 
year 2000. However, each year beyond fiscal year 2000 that a 
deployment decision might be deferred would require additional 
RDT&E dollars which are currently not budgeted. Once the 
decision to deploy is made, an additional $4 billion to $6 
billion in procurement, MILCON, and Operations and Maintenance 
funding, beginning in the year of the deployment decision, is 
necessary to field an initial system. Specific funding is 
dependent on threat, selected architecture, and siting 
considerations.

                           THAAD development

    Senator Stevens. Let me shift to another one. If the THAAD 
flight test is successful, will that be sufficient in your 
judgment to give THAAD a clean bill of health and let it 
proceed?
    General Lyles. No, sir; I will never say that one flight 
test at this stage of a program is sufficient to give a system 
like that, a complex system like that, a clean bill of health. 
As you know, we're still in the demonstration and validation 
phase of the THAAD Program, and that phase is really to wring 
out the design.
    We have a lot more testing, a lot more development to go 
before I could sit in front of you, Mr. Chairman, or the 
committee, or the Secretary of Defense and say that we have a 
clean bill of health, the program is ready to proceed to 
deployment. It's a major step, but I would not use that 
statement.
    Senator Stevens. We may have to have a subsequent meeting, 
General, in our classified area to discuss this further.
    General Lyles. I would love to, Mr. Chairman.
    Senator Stevens. I think we should try to see if we cannot 
get more members here at that time. Senator Bumpers.
    Senator Bumpers. Thank you, Mr. Chairman. General Lyles, on 
the question Senator Stevens was just asking about, are we 
going to go ahead with buying THAAD missiles after one 
successful test, and you said something to the effect that no 
we're not. But I am not sure what the qualifier was because the 
Department of Defense said on March 24, once we have one 
success, we are going to order 40 interceptors. Now, how does 
that square with what you just said?
    General Lyles. Senator Bumpers, as I stated in my opening 
statement, and that one chart that I showed in your package, we 
actually have a series of hierarchy of different tests that 
we're doing for the THAAD Program. The plan is after the first 
intercept, this is what we have put on contract, that we would 
make a decision to procure those 40 user operational evaluation 
missiles, UOES missiles, and that is a correct statement.
    But if you look at that one chart, you will see that there 
are a series of other tests, some of which have been going on 
for some time, ground tests, hardware-in-the-loop tests, 
software testing, et cetera, that are also giving us confidence 
in that design.
    But more importantly, the thing I've tried to ensure is 
that before we commit our precious dollars to totally commit 
all the money for this particular program that we've laid out a 
hierarchy of reviews. The chart shows that there are at least 
two if not three in progress reviews that we will conduct 
before we fully obligate the money this year for the UOES 
Program. And if we stay on schedule, there will actually be two 
more flight tests that will be completed before we fully 
obligate the money for that particular effort.
    So our contractual requirement is to turn it on, turn on 
that option with the contractor, but I want to make sure from a 
fiscally smart manner that before we fully obligate the effort 
we know exactly everything about THAAD, hence the other 
activities that are taking place.

                          BMD test philosophy

    Senator Bumpers. Well, General, I may during the 
appropriations process or the authorization process offer some 
kind of an amendment to be sure that we do not obligate 
ourselves to a few billion dollars on one possible random hit. 
And this chart right here, BMD test philosophy, down at the 
bottom it says, BMDO's objective is to be consistent with the 
task force report. Now, I have not read the report in detail, 
but I have had my staff do the highlights for me, and I thought 
it was an excellent report that General Welch and his group put 
together.
    General Lyles. Yes, sir.
    Senator Bumpers. Apparently you do, too.
    General Lyles. Oh, yes, sir.
    Senator Bumpers. And they called what is going on now in 
BMDO, they called it a rush to failure. Now, that is a fairly 
current report. What have we changed? What have we changed to 
make sure that we honor the task force observation that we are 
headed for a rush to failure? I mean, what are we doing? You 
know how strongly I support the Three-Plus-Three NMD Program. 
But it is insane to me to set deadlines for doing these things 
regardless of what the tests or the technology may be. What are 
we doing to make sure we are not rushing to failure?
    General Lyles. Senator, let me answer that----
    Senator Bumpers. I am still not satisfied that that is not 
precisely what we are doing.
    General Lyles. Yes, sir; Senator, let me tell you exactly 
what I have done in response to that report. Again, one of the 
reasons I was one of the commissioners of that study is to 
ensure I specifically and all of our program managers knew and 
understood how we were doing from an independent look at our 
test program. Since that report came out, I have specifically 
tasked the program managers for each one of our programs and 
their program executive officers, PEO's as we call it, to go 
back and in light of that report, in light of the lessons 
learned from the THAAD Program over the last year to come back 
and tell me what things we may have to consider doing in each 
one of our programs to ensure that we stay consistent with that 
test philosophy and the concerns raised by General Welch.
    They owe me that response and answer within the next 30 
days or so, and I would, again, be very happy to report back to 
Congress as to what our assessment is of that. In the National 
Missile Defense Program at a recent hearing, I have committed 
to Senator Levin that I will bring back that Welch panel to 
have them to review our test program for national missile 
defense once we have down selected to our prime contractor, our 
lead systems integrator. And we have essentially gone on 
contract for the test approach being recommended by that 
specific contractor.

                         Patriot effectiveness

    We will bring back that panel to relook at that to ensure 
we are staying consistent with that test philosophy. We are 
very serious about that, and we don't want to take it lightly.
    Senator Bumpers. General Lyles, let me ask you two quick 
questions. No. 1, on Patriot, we found out after Desert Storm 
that Patriot had not been nearly as successful as we thought 
watching CNN and watching the Patriot explode instead of 
intercept. Now, it is now estimated that so far as the real 
threat to our forces is concerned it is mostly from Scud-type 
missiles with ranges of less than 500 kilometers. And my 
question is, it seems to me that if the Patriot is what it 
ought to be or what we have been led to believe that it is and 
which you alluded to in your comments, that gives us a little 
breathing room. If 97 percent of the threat is from short range 
missiles, it seems to me that that gives us a little breathing 
room so we do not have to go balls out to do this thing on some 
kind of a time schedule that we cannot possibly meet.
    General Lyles. Senator, the Patriot----
    Senator Bumpers. What I really want you to tell me is what 
is the confidence level in the Patriot as against the Scud for 
example?
    General Lyles. The confidence level is very high of the 
current Patriots we have fielded today with the first two 
phases of the Patriot Program, Patriot Advanced Capability 
Three Program, the guidance enhanced missile that's fielded 
today. The confidence is very high, and I can tell you a 
specific reason. Because about this time last year in February 
or March specifically in 1997, we actually tested the current 
generation of Patriots against the current generation of Scuds.
    I can't obviously talk in this environment about how we 
acquired those, but we did do testing in the Kwajalein Pacific 
missile range. We conducted two tests. Both were intercept 
tests. Both were very, very successful. Both cases, we 
intercepted and killed the Scud. Now, we did learn something. 
We learned something about the aim point selection on one of 
those tests, and we've now made some software modifications to 
actually improve even what we have in the field.
    And those software modifications are now in the field 
today. So I am very confident, Senator Bumpers, based on those 
tests, based on the current threat, based on what we have in 
the field today that we can counter today's threat. The key is 
about tomorrow's threat and weapons of mass destruction. That's 
our concern.

                        protection of 50 States

    Senator Bumpers. Well, my final question is also a follow 
up to what Senator Stevens was asking and I share his concern 
about his home State, as well as Hawaii. I do share their 
concern about their home States just as any of us would have. 
And the ABM Treaty grants us one site. And that is Grand Forks. 
And it seems to me--I am a great champion of the ABM Treaty. I 
do not want a brouhaha or a violation of it, and I think the 
Russians are comfortable right now. But do you feel comfortable 
with your answer to Senator Stevens on the 50 State philosophy 
from Grand Forks? I mean, I think there is a real question as 
to whether you can do it from Grand Forks or not, but I would 
be interested in hearing your answer to that.
    General Lyles. Senator Bumpers, I think the correct 
answer--and I probably should have expanded upon this earlier 
as stated literally 2 years ago when we embarked on this three-
plus-three strategy by Dr. Perry when he was the Secretary of 
Defense--is we will develop this capability is a treaty 
compliant manner, but when it comes to actually to deploying a 
capability we will deploy and if necessary readdress the ABM 
Treaty. We will deploy to make sure we can protect our Nation, 
protect all 50 States from the threat.
    As I stated to Senator Stevens, from Grand Forks, if you 
look at it architecturally, there are at least some threats by 
which you can protect all 50 States from that particular site, 
but not all threats. And the key issue is what do we think 
about the threat and where the threat may emanate that will 
determine where and when we deploy.

                         ABM Treaty compliance

    Senator Bumpers. Are you familiar with the bill called the 
American Missile Defense Act of 1998?
    General Lyles. Yes, Senator, I am.
    Senator Bumpers. So far, there are 47 cosponsors, only 2 
Democrats, but it says it is the policy of the United States to 
deploy as soon as it is technologically possibly an effective 
national missile defense system capable of defending the 
territory of the United States against limited ballistic 
missile attack whether accidental, unauthorized, or deliberate. 
Have you read this bill? Have you looked at it?
    General Lyles. Yes, sir, I have.
    Senator Bumpers. Are you comfortable with some of the 
language in it? For example, there is no definition of 
technologically possible, and it does not define territory of 
the United States. For example, does it include Guam?
    General Lyles. I'm not sure what is meant by territory in 
that particular bill so I'm not clear as to whether or not that 
does.
    Senator Bumpers. It does not say that this defense system 
has to be ABM compliant. I assume though that that is a given 
by both the administration, you and the Department of Defense.
    General Lyles. Again, Senator Bumpers, as we stated before, 
our program will be developed in a treaty compliant manner, ABM 
Treaty compliant manner; but when it comes time to making a 
decision to where to and when to deploy, we will deploy to make 
sure we're protecting the United States. And if they have to 
relook at the ABM Treaty--I think that's what Dr. Perry said--
we will do that.
    Senator Bumpers. Thank you very much, General Lyles. I have 
maybe two or three questions I might submit to you in writing.
    General Lyles. Yes, sir. Sure. I would be very happy to 
answer those. Thank you.
    Senator Bumpers. Thank you, Mr. Chairman.
    Senator Stevens. Senator Bumpers, I am sure you realize 
that there is nothing in the ABM Treaty that specifies Grand 
Forks. It is one site in the United States.
    Senator Bumpers. I did not say that.
    Senator Stevens. Senator Domenici.

                             Airborne laser

    Senator Domenici. Thank you, Mr. Chairman. General Lyles, 
many Americans would be astounded to know that we have no 
ballistic missile defense at this point. People would probably 
be surprised that we have no missile defense in place.
    It seems to me you are in a dilemma because you have to 
decide whether you are going to do something in the short term 
that will be partially effective or wait for a longer-term 
solution that will be more effective. That is what I am hearing 
you indicate your concerns about in terms of technology 
availability and which program might work and to what extent.
    I have a concern that as each of the branches of the 
military proceed to carry out their budget squeeze that you 
will not be involved in their budgets as it pertains to their 
participation in the ballistic missile defense system. I 
believe we could go down the one path which says full speed 
ahead here where in another department things are slowed down. 
With the Air Force being short of money, it may be going down a 
slower path in something that contributes to the solution. So I 
have two issues involved, just to point up my concerns. I 
understand that the Air Force has some very, very exciting 
technology by way of the Phillips Laboratory in Albuquerque, 
NM.
    General Lyles. Yes, sir.
    Senator Domenici. And tied into some of the other big 
laboratories which have worked on the airborne laser system. 
Now, let me ask are you certain that even though that program 
is exclusively within the U.S. Air Force, that as the Air Force 
has to cut its budget that somebody is speaking up when the 
budgets are prepared that this is a very distinct function that 
is bigger than the Air Force, it is part of the overall system, 
and that they get adequate funds for something like the 
airborne laser?
    General Lyles. Senator Domenici, I am very confident about 
that for two reasons. One, the very strong commitment that we 
see from the Air Force leadership to ABL and not just ABL in 
terms of how it supports missile defense, but as you stated, 
that it is such revolutionary technology it stands a chance of 
revolutionizing air warfare for the future. And so I, literally 
having talked to the Chief of Staff and the Secretary of the 
Air Force know that they are absolutely committed to making 
sure the ABL Program progresses.
    The second reason is we have very good relationships with 
all of the Services who are involved in missile defense, and I 
clearly do have an opportunity to voice concerns if I see that 
there is some inequity or something going on where money might 
be in jeopardy. So I don't feel that we will be isolated. I 
feel very confident that we'll have an opportunity to raise any 
concerns.

                       White Sands missile range

    Senator Domenici. Now, let me raise another issue that has 
bothered me because I am not sure whether the management and 
future of it is being looked at from the standpoint of your 
ballistic missile needs. Let us just take the largest inland 
test site that we have in America that America has any control 
over which is White Sands. Are you aware that in the current 
Army's budget that missile range is going to be restrained in 
terms of personnel and capacity because the Army does not have 
enough money to continue to man it in the manner it did before? 
Again, since that has something to do with testing the kind of 
weapons you are talking about, are we sure that one hand is not 
restraining something because of budgets while you are going to 
have a demand that you cannot meet your goals in 5 years 
because the ranges are not up to it?
    General Lyles. Senator, we are, I think, fairly familiar 
with the problems and challenges they have budgetary wise for 
all their ranges, and not just the Army. I think all the 
services do. So I am familiar with that. One thing that we try 
to make sure--again, we have a very strong linkage with the 
range community; and from time to time in specific areas, we've 
actually provided additional funding to help them in various 
places.
    Some of the manpower, and operation and maintenance things 
are not necessarily our responsibility; but we do get a chance 
to raise concern if we see that cutbacks or reductions in those 
areas might jeopardize our opportunities to have successful 
flight tests. So again, we do get a vote in the process.
    Senator Domenici. So being a little more precise, you have 
certain ideas about the kinds of tests you are going to have to 
have over the next 5 or 6 years?
    General Lyles. Yes, sir.
    Senator Domenici. You have talked about them here. Are you 
sure that you will not be 3 years down the line and come up 
here and say, well, we do not have the testing capacity at 
White Sands or one of the others because we cut back at a point 
in time when we let somebody work on them without the impact 
potential of our missile defense program? Are you sure that is 
not going to happen?
    General Lyles. Senator, my answer today to that question is 
yes; but since I like to be thorough and always completely 
honest, I'd like to, if you could, since I have been asked that 
specific question to go back and look at the situation as it 
stands and then if you like I can report back to you or the 
committee and tell you what I think about that. Today, my 
answer is yes; but I want to be thorough.
    Senator Domenici. Mr. Chairman, can we ask him to do that 
and report back to you and the committee on his findings?
    Senator Stevens. Sure.
    [The information follow:]

                    White Sands Missile Range [WSMR]

    Recent cuts in the White Sands Missile Range (WSMR) budget 
have resulted in a reduction in the civilian work force 
(approximately one-seventh of the total remaining civilian work 
force) as well as military Operations and Maintenance (O&M) and 
other military field support personnel. Personnel cuts have 
been fairly consistent with reductions in work load. WSMR is 
carefully planning budget cuts to reduce overhead cost and 
posture themselves to be more competitive in the future. WSMR's 
plan is to maintain a core capability in all areas and 
establish contracts that can supplement the core and provide a 
surge capability to cover periods of increased activity.
    At this point, WSMR will be able to support any planned 
BMDO tests. BMDO testing at WSMR will be reduced in the years 
ahead with THAAD moving toward the Engineering and 
Manufacturing Development (EMD) phase at Kwajalein, PAC-3 
entering the production phase and Navy programs conducting 
their testing at the Pacific Missile Range Facility (PMRF).
    If additional funding cuts occur in the future, we will re-
assess our test infrastructure requirements.

    Senator Domenici. Thank you very much.
    General Lyles. Yes, sir. Thank you.
    Senator Stevens. Senator Inouye.
    Senator Inouye. Thank you very much, Mr. Chairman. Of 
course, I apologize for being late. As you know, there was a 
very important confirmation hearing this morning. I am not 
certain whether these questions have been asked, General.
    General Lyles. That's fine, sir.

                               THAAD UOES

    Senator Inouye. But last year we had our seventh test of 
the THAAD; and once again, it missed the target. Do you agree 
with me that we should not begin to purchase these missiles in 
the absence of multiple successful tests?
    General Lyles. Senator----
    Senator Inouye. I ask this because I have been told that 
when we get the first successful one they are going to start 
purchasing. Is that the policy?
    General Lyles. It's not exactly, Senator Inouye. The plan 
is to procure after one intercept or to turn on the contractor 
to procure what we call user operational evaluation systems 
missiles. They would be procured or actually bought with 
research and development dollars. They're primarily for test 
purposes. That's the original purpose of those particular 
missiles. But as the name of that project or that initiative 
implies, user operational evaluation system, we intend to allow 
the users, the soldiers in the field to work with those THAAD 
missiles, work with the other components of the THAAD system, 
get familiar with it, maybe even identify some problems with 
it. And our plan was to procure 40 of those advanced missiles, 
if you will.
    As I stated in earlier comments and stated in my opening 
statement, we've tried to make sure we lay out and do that in a 
smart manner. Our contract says, yes, after one intercept we 
will turn the contractor on to procure those 40 missiles, but 
we've laid out a schedule so that there's lots of other 
testing, ground testing, software testing, hardware-in-the-loop 
testing to give us confidence that we know exactly how the 
THAAD Program is proceeding.
    We have three major reviews that are planned before we 
fully obligate dollars to this particular initiative. And if we 
stick to the schedule, we will actually have two more flight 
tests before we will actually fully commit and obligate all of 
our dollars. So from a contractual standpoint, you're right, 
Senator, the plan is to turn on the contractor to procure those 
40 missiles. But from a good stewardship of the dollars for the 
taxpayer and for our program, we've laid out a series of 
reviews and other activities before we formally and finally 
commit all the money to it.
    Senator Inouye. So you believe that BMDO should exercise a 
greater oversight role considering some of the problems we have 
had with the Army and the contractor?
    General Lyles. We do have responsibility for the oversight 
role today. I will not fool you or tell you that we don't have 
some issues sometimes where we need to have tighter controls, 
but I am working toward that objective with the full support of 
my bosses.
    Senator Inouye. We have been told time and again that 
flight testing is very expensive so we have gone into computer 
testing. Do you have confidence in relying on computer testing?
    General Lyles. Senator Inouye, the test philosophy I talked 
about in one of the charts that I left during my opening 
statement, there's a sort of hierarchy of testing that we'd 
like to do for all programs, not just missile defense programs. 
And it really is to wring out the design, understand what the 
design is, do that in a very, very robust manner starting with 
modeling and simulation computer testing, subsystem testing, 
component testing, all the things that you want to do in a 
smart manner to understand things so you don't try to answer 
all the questions in a single flight test.

                        Modeling and simulation

    And so we are relying and actually need to do more reliance 
on modeling and simulation and computer testing. To answer your 
question specifically, that's the way we all need to do things. 
We need to make sure the models are very reliable and robust 
and accurate. There's a lot that needs to be done to make sure 
that's true. But I think you're going to see more and more 
reliance--again, not just in ballistic missile defense, but in 
other programs--of doing more robust modeling and simulation in 
computer testing and then saving flight tests to verify that 
your models are right. And they answer those kinds of 
questions.
    Senator Inouye. I ask this because we have been advised 
that THAAD has undergone about 10,000 computer intercept tests 
and all of them succeeded. In the computer, you have succeeded 
10,000 times. In real flight testing, not one. Something is 
wrong there.
    General Lyles. Yes, sir, there is. And I can tell you 
specifically in terms of THAAD because we have wrung that 
system completely over the last year. It's one thing to have 
successful modeling and simulation computer runs to show that 
you can do it. There are two things that are required there, to 
make sure the models are accurate and that they are reflecting 
truth if you will. I think that's the case with THAAD. I feel 
very confident about THAAD.
    But if you look at the four intercept failures we had, 
those four failures, each different, a different failure 
mechanism, all were pointed back to one key entity--two of them 
I guess you'd say. One is reliability and good reliability and 
a lack of understanding about the design margins. They were not 
failures in the design. We think we feel very confident from 
all the things we've looked at in the past year, that the 
design is sound.
    But our reliability program and what we knew about the 
design margins on the various components was not very--not 
where I'd like it to be, and that's where we have focused our 
efforts over the last year, to make sure we understand and 
qualified all the components, all the subsystem, that we 
understand the design margins. That's the kind of smart thing 
you do in developing a program, and we've had to go back to put 
emphasis on that in the last year.

                             Navy area wide

    Senator Inouye. General, I have been advised that the 
testing for the Navy's area wide defense will begin at the 
Pacific missile range sometime in the last quarter of 1998. But 
we have been told that facility and instrumentation upgrades 
would be necessary. How much do you have in your budget for 
this purpose?
    General Lyles. We are working with the Navy to define all 
of that now, Senator Inouye. I'm trying to find my notes to see 
if I can give you an accurate answer. I think it is to the tune 
of a couple of million dollars, but let me provide that answer 
to you for the record to make sure it's completely accurate, 
but we are working with the Navy on that.
    Senator Inouye. I would appreciate that.
    [The information follows:]

                 Pacific Missile Range Facility [PMRF]

    The fiscal year 1999 Presidents Budget includes $34.867 
million (fiscal year 1997 and fiscal year 1998 funds) for 
Pacific Missile Range Facility (PMRF) Upgrades. Congress added 
$4.692 million in fiscal year 1997 and $4.852 million in fiscal 
year 1998 to Navy research, development and test (RDT&E) funds 
for Optical Sensors and other PMRF upgrades. These funds were 
reprogrammed to BMDO RDT&E Defense-Wide in April 1998. The 
revised amounts total $8.882 million in fiscal year 1997 and 
$35.529 million in fiscal year 1998 funds for a total of 
$44.411 million in the BMDO budget for upgrades at PMRF. 
Necessary upgrades will be complete in order to meet Navy Area 
testing requirements in fourth quarter 1998 (first quarter 
fiscal year 1999.) All remaining efforts are scheduled to be 
completed by fourth quarter fiscal year 1999 and in place for 
system testing in first quarter fiscal year 2000. Further 
upgrades are not planned at this time, and funding for such is 
not included in the fiscal year 1999 Budget.

                          Arrow third battery

    Senator Inouye. In previous statements, you have noted that 
our Nation derives a lot of benefits from its participation in 
the Arrow Program. The Israelis have identified a need for a 
third battery because the two batteries will not cover that 
State. What is your view on the need for a third battery?
    General Lyles. Senator, we participated with the Israelis, 
and they worked very closely with us to analyze ways that we 
could help them and actually help ourselves to address the 
potential emerging medium-range threat in the Middle East, 
particularly from Iran. Our analysis done with them shows that 
there is benefit of having a third battery. There's some 
additional more robust coverage, overlaps in coverage, of 
having a third battery. And so from that standpoint, I think as 
even stated by the Secretary of Defense, we understand there is 
a benefit from having a third battery. The issue is how to 
procure that third battery.
    And at least in our program within BMDO, we are not allowed 
from policy standpoint of buying hardware for them. We help 
jointly develop a capability, but our responsibility is not to 
buy hardware for them, and there are other means that are being 
addressed to figure out how to do that.
    Senator Inouye. Mr. Chairman, I was very interested in the 
question asked by my colleague from Arkansas on the so-called 
Cochran-Inouye missile bill. I would just like to state that I 
was most honored to be called upon by the Senator from 
Mississippi to join him in this endeavor, and he has spent much 
time in drafting this.
    But we all know that this science is still at its infancy, 
though we have been involved in it for several decades. There 
are changes all the time. And obviously, we would have to work 
out legislative intent and definitions as we move along in the 
legislative process. I hope that you will work with us as we 
progress in its consideration in the Congress.
    General Lyles. Yes, sir, we will.
    Senator Inouye. I thank you very much.
    General Lyles. Thank you, Senator.
    Senator Stevens. Thank you. Senator Hutchison.

                                 PAC-3

    Senator Hutchison. Thank you, Mr. Chairman. I appreciate 
you calling this hearing because this is a great concern of 
Congress. Both the deployment opportunities for the 
intercontinental or the national missile system as well as the 
development of the theater missiles. I would like to ask you a 
couple of questions starting with the Patriot 3. I think that 
Senator Bumpers was correct. Many of us got the wake up call in 
Desert Storm about the lack of ability to defend our troops in 
the field from Scud missiles and other types of incoming 
missiles. The Patriot 3 by all accounts is testing well. I 
would like to ask you when it will be ready to be fielded for 
actual use?
    General Lyles. Senator Hutchison, our plan is to have the 
PAC-3 in the inventory by the end of fiscal year 1999. That's 
our current schedule for PAC-3. We're on track with that. 
Assuming we have successful intercept tests starting with our 
test this summer, we think we can stick to that schedule.
    Senator Hutchison. Well, let me ask you if there is 
anything that you could do or anything that we would need to do 
to allow you to be able to make that not longer, but shorter?
    General Lyles. I don't think in terms of that particular 
program, the PAC-3. It has progressed very, very well, just as 
you said, Senator.
    Senator Hutchison. And the testing that you are doing you 
feel is enough?
    General Lyles. The testing so far. We haven't started the 
actual intercept test. That's the--our first one of those is 
going to be this summer. And I think we're going to be very 
successful with that, but we haven't started that series of 
tests yet. I hesitate to say there's anything we could do to 
try to accelerate that program any further.
    What provides us some comfort, however, is the answer I 
gave to Senator Bumpers that the capability we have in the 
field today--the Patriots in the field today can and actually 
have been proven--are capable of countering the current threat. 
Now, where we need PAC-3, of course, is particularly hit-to-
kill lethality capability to counter weapons of mass 
destruction. So we do not have a window of vulnerability right 
now, but I don't think we can actually accelerate PAC-3. It has 
really been very successful, and I hate to try to tinker with 
it right now.
    Senator Hutchison. OK. Because we know that the original 
Patriot was not meant to hit missiles. It was meant to hit 
planes.
    General Lyles. Exactly.
    Senator Hutchison. Therefore, the accuracy rate was not 
what we thought it would be, but that would have been a severe 
change in position.
    General Lyles. Yes, ma'am.

                          NMD three-plus-three

    Senator Hutchison. All right. The next question that I have 
is on--it is along the same line, but in a different direction 
from Senator Bumpers, and that is the three-plus-three.
    General Lyles. Yes.
    Senator Hutchison. I got the impression he thought that 
that was perhaps too long. I think it is too short. And I would 
like to ask you if there is any more R&D that we could be doing 
that would make the three-plus-three shorter in opportunity 
because I do not think the ABM Treaty--the ABM Treaty is being 
used as an excuse not to deploy, but I do not think that is 
going to be a valid excuse. So I think we have got to go 
forward full force to do what is right for our country and the 
ability to protect our shores. So, therefore, from that line, 
is there anything that we could be doing if we did not have 
artificial barriers like the throwing up of the ABM Treaty to 
make the three-plus-three shorter?
    General Lyles. Senator, I don't think so. To be perfectly 
honest with you, as I stated many times before Congress and 
others, we have a very, very high risk program today in terms 
of schedule constraints. We are compressing our normal 
development cycles, but doing it rightfully so because of the 
concern about the threat just like you stated.
    But I don't think there's any way we could try to 
accelerate that program any more than what we are currently 
doing. We have a minimal number of flight tests that are 
planned for the program. Three-plus-three, as you know, is 
envisioned that based on literally two no more than three 
intercept tests, total intercept tests, integrated systems 
tests, that we will look at the program in terms of its 
capability, look at the threat and might have to deploy that 
capability--again, depending on the threat--just based on three 
tests.
    That is unprecedented for any of our programs in the 
Department of Defense. I would hate in terms of getting an 
effective program, an effective capability, to try to skip 
anything, rush anything. I just don't think there's anything 
more we can do.
    Senator Hutchison. Well, I really was not in any 
disagreement with Senator Inouye about making sure that before 
we go into production we have it down right.
    General Lyles. Yes, ma'am.
    Senator Hutchison. But I just want to make sure we are 
doing everything in the research and development phase in as 
short a period as we can to make sure that we have it right 
with whatever testing is necessary to determine that and then 
be able to go into full production at the earliest time.
    General Lyles. Yes, Senator. Given, again, the high risk 
associated with this compressed schedule we are doing 
everything. The one thing I keep getting reminded by the 
program manager, General Cosumano, is that even if we wanted to 
do some additional testing we have some what we call long lead 
times to actually buy hardware, put it together to support some 
of our supports. It takes 24 months to actually build up the 
kill vehicle on the top of the intercept missiles. And we don't 
think there's any more we could do to try to compress the 
schedule because of things like that, in addition to the high 
risk associated with it. But we are aggressively pressing on as 
fast as we can.

                            Arrow technology

    Senator Hutchison. The next question is regarding the 
Arrow. By sharing in the development of the Arrow, to the 
extent that you can say here, what are you learning and what is 
that going to do for our national missile defense or the THAAD? 
Are we learning things that are relevant for the development of 
our own missiles?
    General Lyles. Yes, ma'am. And it is literally a two-way 
street. It's a shared development between us and the Israeli 
Government. We are learning things primarily that apply to our 
theater programs. In a couple of specific areas, the seeker, 
the mechanism that actually has to discriminate and determine 
what is the target in the threat environment, the seeker 
technology we're planning for the THAAD Program is identical to 
the seeker that is already in the Arrow system.
    So it's a new technology for us to some extent here for our 
missile defense program. NSB is the scientific name for the 
specific seeker. They are using it, testing it, working with it 
today in the Arrow Program. We are applying the same technology 
to the seeker for the THAAD Program. So we're learning from 
them because they've had a lot more experience. There is shared 
technology work in terms of the algorithms we have to develop 
to seek, discriminate, and hit the specific target and so it 
really is sort of a shared development for us.
    Senator Hutchison. Do you think it has a chance to help us 
work out the problems with the THAAD?
    General Lyles. It does primarily from that one component, 
the seeker. Not some of the others because of the uniqueness in 
the system. The Arrow system is an endo-atmospheric system 
designed to kill the threat below 100 kilometers. THAAD is 
intended to be both endo and exo, to kill both slightly below 
and above 100 kilometers. So we're operating in two different 
regimes, but there are some lessons learned primarily on how do 
we use, how do we work with this particular NSB seeker? That's 
the primary area where they've been able to help us.
    And by the way, we have had THAAD people going to Israel 
and Israelis coming down to Huntsville to make sure that we are 
sharing in the technology from that standpoint.
    Senator Hutchison. All right. Thank you very much, General.
    General Lyles. Yes, ma'am.
    Senator Stevens. Senator Cochran.

                               BMDO costs

    Senator Cochran. Thank you very much, Mr. Chairman. General 
Lyles, one of the questions that has come up is the total cost 
of the BMDO office and whether or not there are ways to achieve 
economies and use more program dollars for actual research and 
development of systems rather than on overhead and bureaucracy 
within BMDO. Have you taken a look at that and tried to find 
ways to cut down on the costs of the bureaucracy?
    General Lyles. Senator Cochran, we--not only have I taken a 
look at it, but more specifically, my deputy, Adm. Dick West, 
who is sitting here in the audience, started looking at this 
issue before I came on board to BMDO. And I can tell you, 
Senator, we have literally scrubbed our program, scrubbed our 
office within the Washington community, but more importantly we 
put some mandates on our program officers out in the field to 
reduce their overhead. We have--that is a success story, and 
I'd love to come back and show you exactly what we've done.
    Senator Cochran. It would be good if we could have some 
specifics. There is a question about whether you need 
congressional liaison, for example. When OSD already has that 
and each service has that, do you need that? That is an 
example.
    General Lyles. Yes, sir.
    Senator Cochran. But the specifics would be helpful in 
understanding your budget needs for the next----
    General Lyles. I'd love to come back and show you, Senator, 
what we've done, also what I've mandated for the field. I think 
that's also critically important.

                           Program deadlines

    Senator Cochran. There have been some questions already 
asked by other Senators about some of the specific programs and 
the progress being made to meet this Three-Plus-Three Program 
deadline. Let me ask you a question just looking at the logic 
of the current policy. Do you recall in your experience any 
other program for the development and deployment of a weapon 
system where we set up these deadlines like three-plus-three?
    General Lyles. I cannot in all honesty recall any specific 
ones, Senator.
    Senator Cochran. No; a lot has been made of the Welch 
report saying that what this has amounted to really is a rush 
to failure. Do you agree with that report? What is your 
reaction to it?
    General Lyles. Well, again, Senator Cochran, while I agree 
with the key points made by General Welch and the other members 
of that study team about how we should do testing and we should 
do hierarchal testing, we also recognize that for our missile 
defense programs we have some threats that we're very concerned 
about or emerging threats and so we have a hedge strategy in 
some cases where we recognize we're taking some high risk from 
normal practices to ensure that we can develop a capability as 
quick as possible.
    The onus is on me. The onus is on all of us to go back and 
ensure as I stated earlier that we haven't deviated so much 
from that philosophy that we are going to have guaranteed 
failures. So we're going to go back and relook at our test 
programs.

                            Lessons learned

    Senator Cochran. One thing that we observed is that there 
have been so-called unsuccessful intercept attempts in the 
THAAD Program. People talk about whether it is a success or 
unsuccessful, whether you hit it or you do not hit it, 
oversimplifying, I think, in trying to reduce complex 
information and data to a one sentence erroneous assumption. 
Has BMDO learned anything useful from these so-called 
unsuccessful tests that people criticize?
    General Lyles. Yes, sir; we--actually, we always learn from 
unsuccessful tests. And there've even been statements made by 
people as notable as Dr. Gansler, our Under Secretary for 
Acquisition and Technology, that you learn more from 
unsuccessful tests than you do from successful tests. And 
that's literally true for the most part. We have learned a lot. 
We've learned a lot about our process for setting up the 
programs and reviewing the programs. We've learned a lot about 
making sure we stick to good, sound systems, engineering 
practices, for all of our programs.
    We've learned some technical things; but in all honesty, I 
think the primary thing we've learned from the THAAD Program 
because those were different failure mechanisms and mostly all 
attributed to poor reliability or quality control is that we 
need to make sure we don't lose emphasis on that. So we have 
learned a lot, and we are applying those lessons learned to all 
of the other programs.

                         managing Program risks

    Senator Cochran. One thing that you said recently to the 
Armed Services Committee was that you would like to have more 
flexibility in the management of the missile defense program 
and that some of the risk in the program--when we were talking 
about rush to failure and that kind of thing--is due in large 
part to the schedule compression of current policy. Let me ask 
you, as a professional acquisition officer, if the National 
Missile Defense Program were to be put on a more normal 
schedule, like other programs for development and deployment, 
would this be helpful in terms of managing the risk and making 
a more rational program for the national missile defense 
system?
    General Lyles. Senator, to answer your specific question as 
an acquisition expert and as a techie, a technology guy, you 
always want more time to do more testing, et cetera. So the 
answer to the question generically is you can certainly reduce 
more risk, have more confidence in the program when you have 
more time. This program is laid out as a hedge strategy though 
with a recognition that we need to take the risk because of the 
emerging threats out there. So we have to balance those two.
    And one of the reasons for bringing a prime contractor on 
board is not just to have Government people looking at this, 
but to have industry, the top notch industry we have in our 
country, to take a look at this issue where are those specific 
risks and what kind of testing and schedules do we need to do 
to make sure we mitigate and reduce those risks so we can have 
a successful program.
    Senator Cochran. Would you say if the NMD Program were 
restructured to require deployment as soon as the technology is 
ready, the system you are developing now and would put in the 
field could be accurately described as old or obsolete 
technology?
    General Lyles. No, sir; I would not say it's old or 
obsolete. Everything we're doing in this area is sort of 
leading edge in many respects. So I could not use those 
adjectives.

                       Threat and countermeasures

    Senator Cochran. There is a program that we funded that 
simulates a country's capability to develop their own cruise 
missile from scratch. We are learning interesting things about 
what other countries, who are not considered to be threats in 
the missile technology area, are capable of doing. Is this a 
valuable learning experience for us in determining what the 
threat might be to our own country from missile technology 
development?
    General Lyles. Yes, sir, Senator. As a matter of fact, I 
made a comment in my opening verbal statement that the threat 
and countermeasures program, which you have been very, very 
strongly supportive of, has been very helpful to us and will 
continue to be so to make sure we understand what are the 
capabilities out there.
    The specific program you mention, as you know, we're trying 
to evaluate what happened in the flight test attempt to see if 
there was some error in accomplishing that program or whether 
or not that was some indication of how difficult the problem 
is. So we owe you and others an answer as to what that flight 
test failure indicated.
    Senator Cochran. There is also a recent report about how 
outside assistance has helped accelerate the development of 
missile capabilities in other countries. One example was Iran 
receiving assistance from Russia in the development of the 
medium-range missile there; another is Pakistan, where we saw 
assistance from an outside country accelerate the missile 
development program. We directed in our bill last year, an 
assessment of the feasibility of other countries' abilities to 
construct long-range ballistic missiles.
    What can you tell us about whether you have had an 
opportunity to examine ways to assess what new breakthroughs 
are possible in ballistic missile development and that other 
countries may be capable of from such outside assistance?
    General Lyles. Senator Cochran, for that specific threat 
and countermeasures program, as you know, we just started in 
earnest to address that. We've laid out a sort of two phase 
approach in doing that. Starting with doing the kind of things 
any rogue nation or any nation might have to do and that's the 
initial design stuff, the design work and how can they actually 
do that.
    Our team that's involved in that particular effort is now 
starting to do that, emulating a Third World country, if you 
will, to see how tough that job is. And we're very hopeful 
we're going to get some answers as we proceed through that two 
phase program.

                        Navy theater wide/THAAD

    Senator Cochran. My final question is that the CNO told us 
the other day that he viewed the Navy theater wide and THAAD 
programs as complementary to each other from an operational 
military perspective. Do you share that view and can you 
explain why it is important to procure both of these upper tier 
theater missile defense programs?
    General Lyles. Yes, sir, I do share that. Our analyses, 
operational evaluation analyses done sometime before I came on 
board and done a couple of different iterations since I've been 
at BMDO, show that we need our entire family of systems, upper 
tier and lower tier. When you think of THAAD specifically and 
Navy upper tier, you need to think in terms of specific 
scenarios. As an example, this is just one example, if you have 
a mature theater with assets on hand, et cetera, like THAAD for 
Navy upper tier, you can use that to counter the threat. But as 
we know, there are probably going to be scenarios where we have 
a developing theater where we don't have Patriots or THAAD's in 
theater, and the assets and capabilities provided by the Navy 
component that can literally steam and get ashore in the threat 
area in matters of days and give you the capability to protect 
incoming forces with their systems is just absolutely 
invaluable.
    So they are very, very much complementary. And I think we 
stick to the premise we have to have them both.
    Senator Cochran. Thank you very much. Mr. Chairman, I have 
a few more questions, but I think in the interest of time I 
will submit those for the record.
    General Lyles. Thank you, Senator.
    Senator Stevens. Thank you very much, and Senator Dorgan 
was called to the floor. He also wants to submit his questions.
    Senator Shelby.

                              THAAD status

    Senator Shelby. Mr. Chairman, I have a number of questions 
that I would like to submit for the record. Other than that, I 
just want to welcome General Lyles. We worked together on a lot 
of occasions on this, and I may have missed this and this 
question may have already been asked and answered, General, 
because I was late getting here. But THAAD, where are we with 
THAAD at the moment?
    General Lyles. Senator Shelby, we've been working 
diligently.
    Senator Shelby. If you have answered that, I will get it--
--
    General Lyles. No; I don't mind. We've been working 
diligently for the last year to address the flight test 
failures and other anomalies we've had under the program. 
Primarily addressing the quality and reliability, systems 
integration, systems engineering testing that admittedly was 
not done robustly enough previously.
    The four failures we had were all random different types of 
failures that all could be pinpointed to one key thing, poor 
reliability and quality work. We didn't understand the 
robustness of the design. So our focus has been one, to verify 
that the design is sound, both we and Lockheed Martin, the 
prime contractor, have done that. And also to go back and do 
all the testing so we know exactly what we have, and we're now 
leading up to have our next intercept attempt that I feel 
confident we'll be ready for in the middle part of May, next 
month.
    Senator Shelby. General, why put so much emphasis on one 
test here, on one test there? Whereas if you tested, if you had 
10 tests, you know if you hit 6 out of 10, you know you would 
adjust accordingly, but to just put all the emphasis on one 
test, especially where the technology is so promising is that 
sort of a shallow approach to that?
    General Lyles. No, sir, it isn't, Senator Shelby.
    Senator Shelby. It does not seem logical.
    General Lyles. It's not a shallow approach, but we have a 
series of tests, of course. But the reason we're putting so 
much emphasis is because we've had the four anomalies and four 
failures. And normally, in this stage of an acquisition 
program, a DEMVAL, demonstration validation, you expect to have 
failures.
    Senator Shelby. Sure, you do.
    General Lyles. But our missile defense programs are so 
important----
    Senator Shelby. But you do not destroy the system because 
of that. You improve it and you learn.
    General Lyles. Yes, sir; they are so important. The 
Congress has been so good about giving us resources. We need to 
make sure we understand and we've laid out the program. We're 
doing the right things, and we are leading to successful tests. 
So we are putting a lot of emphasis and have over the last year 
to make sure we understand everything about THAAD before we 
proceed to that next test.
    Senator Shelby. But, General, just one test, though. And it 
is all public, and let us say if it is successful, great; but 
what if it fails? But that does not mean the technology and I 
know it will be to some people in the press, oh gosh the 
technology is wrong, the wrong approach. You know what I am 
getting at.
    General Lyles. I don't think that at all. I could certainly 
tell you my leadership doesn't think that. Dr. Gansler recently 
answered some questions from Congress about that subject.
    Senator Shelby. But why not more tests?
    General Lyles. We have a whole series of other tests. So 
it's not just this one test. We have a whole series of tests. 
This one test has a couple of specific milestones associated 
with it that we've talked about a little bit and that's making 
the decision to proceed to procure these user operational 
evaluation systems. But there are still lots more tests that 
are required for the THAAD Program, and that's one reason why 
the first capability won't be into the field until the year 
2006 because of all the tests that we really do have on the 
program.
    Senator Shelby. But you feel good about the basic 
technology of THAAD, do you not?
    General Lyles. Oh, yes, sir. I do.
    Senator Shelby. OK.
    General Lyles. I really do, and I feel very confident that 
the contractor, the prime contractor, has put a lot of 
attention to making sure we address the things we should have 
addressed previously, but a lot of attention to making sure 
that we are ready to proceed with the program. So I feel 
confident about the entire team.
    Senator Shelby. Thank you, Mr. Chairman.
    General Lyles. Thank you, Senator.

                            Out-year budgets

    Senator Stevens. Thank you. General, I do not want to seem 
too negative, but the BMDO budget through 2003 does not include 
the $3 to $5 billion estimated to build or deploy even a single 
site national missile defense installation. It does not. 
Neither BMDO or the Army had budgeted the $1.9 billion required 
to proceed with the next phase of development of the medium 
extended air defense system, MEADS, which is scheduled to start 
in 2000.
    Congress asked BMDO to accelerate the Navy theater wide 
missile defense and build and launch a scale model space-based 
laser satellite estimated to cost $4 billion. We had the 
feeling that if we went through the base closing rounds that we 
would find some of that money, but as a practical matter if you 
look at the budget this year compared to last year, the request 
is less than we had available last year.
    We are now scheduled to spend more money on nation building 
in Bosnia and the deployments in Iraq and NATO expansion. And I 
have just been told that the bill between now and 2003 for 
environmental clean up on existing and active military bases is 
$14 billion. Now, you tell me, General, do you think you are 
going to be able to find the money to develop a national 
defense system, develop MEADS, and accelerate the theater wide 
system and space-based laser in this climate?
    General Lyles. Senator, with the exception of the issue 
about the deployment dollars for national missile defense, my 
challenge--one of my challenges for the 2000 POM that we are 
actively working right now is to figure out how to one, 
accelerate Navy upper tier, how to fund some form of MEADS 
Program and how to continue with the space-based laser 
development that we've laid out.
    We have about $100 million or so DOD money for the space-
based laser. In terms of progressing toward a demonstrator, 
that perhaps is not enough to do it as aggressively as some 
would like us to do, but we still want to stay on that path. 
For the Navy upper tier, we have the challenge of refining and 
getting as much as we possibly can into our budget so we can 
get that capability by 2006; or if we can figure out how to get 
it into the budget, we're trying to see if we can get it by 
2005.
    And for the MEADS Program, because of its importance both 
in terms of requirements and international cooperation, we're 
working with our partners and working internal to the building 
to see how we can either squeeze it into my current portfolio, 
the budget that we have for BMDO or get additional money to 
support it. So we have a challenge, just like you've stated, 
Senator, to try to make all that happen in this 2000 POM we're 
pulling together. But that's the challenge we're trying to 
work.
    Senator Stevens. Well, are you looking at alternative ways 
to meet the MEADS requirement?
    General Lyles. Yes, sir, we are.
    Senator Stevens. What options do you have there?
    General Lyles. We've laid out a series of potential options 
that initially have been reviewed within the building by our 
comptroller community, but we have obviously been looking at it 
from an acquisition standpoint. They looked--they include a 
cost constrained program where we try to do and meet the 
requirements but do it for less than the dollars that you just 
stated. Working again, with our partners.
    They look at an evolutionary approach where perhaps we 
don't develop every part of the MEADS Program initially. We 
develop most of it, but we defer development of some 
components. And we're looking at a few sort of out of the box 
things that can allow us to meet the requirements, but may not 
actually be able to be called a MEADS Program. So we are 
examining all the options to see how we can get a viable MEADS 
Program into our budget. But also we still want to try to 
protect the international cooperation.

                               conclusion

    Senator Stevens. We are coming into a NATO debate this next 
week, the leader told us yesterday. And I have always supported 
NATO, but as one Senator, I have decided that I cannot see 
supporting this NATO expansion unless we get some change in our 
contributions to NATO. I do not think most people realize that 
we are still contributing at the level we did in 1950.
    Before those nations had restored their economic capability 
and this article I call to your attention, Foreign Affairs 
Quarterly, about the costs of NATO expansion. Across the board, 
we see these--well, they are really not competing, but the 
other requirements coming into this defense bill. We are paying 
the cost of peacekeeping, out of this committee. We are paying 
the cost of environmental clean up, even on lands that are 
going out of Defense ownership, the moneys are coming out of 
the Defense budget.
    And I personally see such a great strain on this budget 
that we will be prevented from achieving the objective that the 
Nation demands. Senator Bumpers was mentioning the concept of 
failure. I think it was Rickover who said, failure is no 
option. But also, the inability to provide the systems is no 
option either.
    General Lyles. True.
    Senator Stevens. I hope that somehow that we can find some 
way to assure that you will get the money you need. Again, we 
opened the hearing by congratulating you. I think you are so 
far a magician. You have kept all these balls in the air at the 
same time. I do not know how you do it. You know, a friend of 
mine said, there is only one way to carry 10 tons of birds in a 
5-ton truck; you have to keep a lot of them in the air.
    You get these systems in the air somehow or other, and we 
applaud what you are doing. Again, I think all the questions 
you have heard reflect a sort of frustration with finding some 
solution here in matching our capability with our people's 
feelings as to what we have already. Each one of us, we travel 
around the country--I am sure you do the same thing, run into 
the feeling among the populous at large that we already have 
these systems why do we spend so much money on them.
    I gave the comment to the American Chamber of Commerce in 
Paris about defense and that was the first question, why are 
you spending so much money, we have already got these systems. 
And it is amazing to me that we just cannot find the money to 
meet this demand. We hope that you have continued success and 
we are all going to keep our fingers crossed on this next test 
of yours.
    General Lyles. Yes, sir.
    Senator Stevens. Somehow or other we have to get something 
to come along to get one of them to succeed and then I think we 
will have a different attitude toward it to allow us the funds 
that you need to complete your project.
    General Lyles. Yes, sir.

                     Additional committee questions

    Senator Stevens. Well, I have got some other questions I 
will submit. I do not know if anyone else had any questions.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Ted Stevens
               medium extended air defense system [meads]
    Question. General Lyles, has BMDO looked at pairing an advanced 
airborne radar sensor with a new or existing missile defense 
interceptor?
    Answer. The Ballistic Missile Defense Organization (BMDO) has 
conducted an independent review of the MEADS program to address 
affordability. We have examined, with the Army, several alternative 
architectures, to include the use of new and existing interceptors, 
that will support the requirements of our warfighters and international 
partners. To date, no change in the MEADS program description has 
resulted from this review.
    Inherent in the required capabilities of MEADS is the ability to 
incorporate all sensor data available on the battlefield, to include 
airborne radars. However, to substitute an airborne sensor for the 
organic sensor suites in MEADS would, most likely, jeopardize 
international participation in the program. Both Italy and Germany have 
an operational requirement for MEADS and it is highly unlikely that 
either country would be interested in pursuing a system that would 
require external sensors in order to function.
                 national missile defense [nmd] basing
    Question. General Lyles, what process will define near term threat 
and therefore drive the NMD deployment site?
    Answer. Clearly, the ultimate decision to deploy a national missile 
defense system will most likely be made by the most senior DOD 
officials in consultation with the Executive and Congressional branches 
of the government. A key factor influencing this decision will 
undoubtedly be the source and nature of the threat facing the nation. 
Several agencies and processes contribute to this assessment. 
Intelligence community documents such as the National Intelligence 
Estimate (NIE) will contribute as well as the Departments Strategic 
Threat Assessment Report generated by the Defense Intelligence Agency 
(DIA). As far as the program is concerned, key milestones such as the 
fiscal year 2000 Deployment Readiness Review and subsequent annual 
reviews of the program by the Department will routinely assess the 
status of the threat for the purpose of developing a recommendation to 
the Secretary regarding deployment. This process is no different than 
that followed in determining the threat for any DOD acquisition 
program.
    Question. General Lyles, is the Defense Department committed to the 
most effective NMD deployment, even if that dictates relocating our 
current ABM Treaty designated site?
    Answer. The ``3 plus 3'' program has always been planned so that it 
complies fully with ABM Treaty constraints during the development 
phase, but we have been careful to point out that some potential 
deployments might require modification to the Treaty. We have 
accordingly designed the program to allow a system deployment at a 
site, to be chosen after a threat is identified, which would optimize 
its capability to defend the entire country.
    Question. General Lyles, has the Defense Department undertaken 
discussions or planning to lay the groundwork for changing the Nation's 
single missile defense site designated under the ABM Treaty?
    Answer. Our NMD development program is treaty compliant and we have 
not settled on a deployment architecture. In fact, we will not settle 
on a deployment architecture until a specific threat is identified. We 
continually assess deployment locations throughout the United States as 
part of our planning to enable greatest flexibility in responding to 
various threats.
            national missile defense [nmd] cost and schedule
    Question. General Lyles, as urgent as the THAAD requirement is, we 
currently plan to equip the first THAAD unit in 2006. Can you 
realistically develop and deploy an NMD system by 2003?
    Answer. Yes, but with a high risk and a limited capability. The NMD 
Joint Program Office (JPO) has always believed that achieving an 
initial operating capability (IOC) by 2003 will require a highly 
successful and extremely well coordinated development phase over the 
next few years. However, there are no insurmountable technical issues 
and the new Lead System Integrator contractor, Boeing, has developed 
several architectures that could be deployed to reach IOC in 2003.
    Question. General Lyles, are two intercept tests, one by each kill 
vehicle concept, a sufficient basis for an NMD procurement and 
deployment decision?
    Answer. We currently have three intercept flight tests planned 
before the Deployment Readiness Review (DRR) including an Integrated 
System Test. However, the NMD Joint Program Office in conjunction with 
the Lead System Integrator are exploring the possibility of having a 
test in fiscal year 2000 prior to a DRR; due to its proximity to the 
DRR, the data from this flight may not be available at decision time.
                           threat development
    Question. General Lyles, Iran's progress on developing longer range 
ballistic missiles clearly demonstrates that determined opponents can 
acquire theater ballistic missile capability. Do you believe that 
adversaries will also seek to add penetration aids, jammers, and 
maneuvering capability to their missiles in the near future?
    Answer. We believe that some of our more capable adversaries have 
already incorporated ballistic missile defense countermeasures into 
their missiles. Our less capable adversaries will direct their efforts 
toward countermeasures in the future after they have established a 
baseline missile attack capability. For the most part, we foresee these 
countermeasures appearing on short range ballistic missiles 10 or more 
years ahead but somewhat sooner in the case of medium range missiles.
    Question. General Lyles, would penetration aids, jammers, and 
maneuvering reentry vehicles significantly reduce the capability of 
THAAD, PAC-3, and the Navy Area Defense system?
    Answer. Penetration aids, jammers, and maneuvering reentry vehicles 
are examples of potential countermeasures that could degrade the 
performance of theater air and missile defense (TAMD) systems. The TAMD 
systems are being developed with these and other countermeasures in 
mind; the ability to react to intentional or unintentional, 
sophisticated or primitive countermeasures are explicit requirements 
for the THAAD, PAC-3, Navy Area, and Navy Theater Wide Defense systems. 
The TAMD Family of Systems provides capabilities across a broad 
spectrum of threat vehicles and environments. The aggregate of the 
individual TAMD systems ensures a robust response to countermeasure 
attempts to degrade our ability to kill TAMD targets. The different 
sensors and intercept regimes (i.e., endoatmospheric, endoatmospheric/
exoatmospheric, and exoatmospheric) make it increasingly difficult for 
enemy systems to effectively counter all elements of a multi-tiered 
defense.
               theater high altitude area defense [thaad]
    Question. General Lyles, I understand that the more thorough THAAD 
ground testing has identified several new hardware problems. Can you 
describe these and comment on whether these issues are resolved?
    Answer. Over the past several months, the Project Office and the 
prime contractor have implemented a more rigorous ground test approach, 
as recommended by the independent review teams chartered after the 
Flight Test 07 failure. The program has conducted a complete 
reassessment of the acceptance test procedures and the environmental 
stress screening of the missile components and increased the ground 
test shock and vibration testing for several components to more 
thoroughly test the packages. This increased discipline and more 
rigorous approach to ground testing has significantly increased 
confidence in the contractor's overall quality control and flight test 
preparation processes going into the next flight test.
    This disciplined test approach has successfully identified and 
corrected problems in hardware, such as the communications transponder 
(CT), booster thrust vector control (TVC) firmware, and seeker inertial 
measurement unit (IMU), that may not otherwise have been discovered 
prior to flight.
    While conducting the pre-flight ground testing in late December/
early January, LMMS discovered anomalies associated with the CT and TVC 
firmware and had to change out these components. The CT is a device 
used to receive and transmit mission critical in-flight information 
with the THAAD radar. The firmware in the TVC, a subassembly of the 
missile booster, determines the steering commands to be executed during 
flight. In the case of the TVC, although LMMS was able to replace the 
FT08 booster with one that was already disassembled for re-ATP 
(acceptance test procedure) and re-ESS (environmental stress 
screening), they incurred a four week delay to assemble and retest the 
new package.
    The IMU drift measurement problem was detected by LMMS during a 
pedigree review and was presented at the critical technical review as a 
concern. While the drift measurements were within acceptance test 
procedure specifications, as a precaution LMMS returned the IMU to 
Lockheed Martin Infrared Imaging Systems (LMRIS) to preclude any 
potential problems that could occur in flight. All three of these 
problems have been corrected.
                 patriot advanced capability-3 [pac-3]
    Question. General Lyles, can you describe the challenges which are 
delaying the PAC-3 intercept test?
    Answer. We have demonstrated many major design features of the PAC-
3 missile in the first two control test vehicle firings. We have 
demonstrated launch operations, a responsive airframe, and correct 
operations of most major subsystems of the missile. We are now engaged 
in the final major step leading to the first intercept with the PAC-3 
missile--the integration of the flight seeker and its software into the 
missile. This integration has presented significant challenges which 
have resulted in more software iterations than initially planned to 
resolve interface problems. We must also complete the integration of 
three hardware-in-the-loop facilities which enable us to integrate and 
checkout the flight hardware and software. The combined integration 
efforts are a complex technical challenge that resulted in moving the 
date for the first intercept flight test to the fourth quarter of this 
fiscal year. To assure ourselves that we are not missing any technical 
problems, a government missile flight readiness review team has 
conducted an intensive review of the engineering development program 
with the contractor. This team has extensive experience with managing 
missile and software-intensive development programs. Their conclusion 
is that the difficulties currently being encountered are not unusual 
for this kind of program. While progress is being made, it will 
probably require more time and resources than originally thought. We 
will continue with our event-driven philosophy and not proceed with the 
first intercept mission, DT-3, until these technical challenges are 
resolved, and the ground tests indicate we are ready. Based on the 
team's review we are confident that DT-3 can occur in the fourth 
quarter.
    Question. General Lyles, with the Welch panel recommendations in 
mind, do you believe the current PAC-3 program includes adequate flight 
testing?
    Answer. The principal observation of the Welch report on PAC-3 was 
that the flight test program and key milestones schedules are 
compressed. An integrated review of the program in March 1998 by BMDO, 
the program office, and the missile contractor resulted in the adoption 
of a flight test schedule that balanced programmatic and technical 
risks, such as those identified in the Welch Report; cost and urgency 
of the need for PAC-3. Actions have been initiated to provide the 
additional resources from within the program's budget to fund this 
schedule. The PATRIOT Program Manager has also developed contingency 
plans to enable repetition of test flights if a failure occurs. This 
plan would minimize the schedule impact if a flight test needs to be 
repeated, but would require additional funding to replace the hardware 
consumed.
    The PAC-3 program faces a challenging mission to confirm its 
ability to consistently achieve hit-to-kill against an array of threat-
representative targets. The Welch report echoes our view that the 
urgency of the PAC-3 program is not driving it to take high risk 
approaches to testing. The PAC-3 system differs somewhat from other TMD 
programs in that it employs more mature technologies which evolved from 
the ERINT and PATRIOT growth programs (QRP, Configurations 1, 2, and 
3). PATRIOT is a mature program with well-established methodologies and 
a proven history of success. The Welch panel indicated that the PATRIOT 
program has a legacy of disciplined design and engineering processes. 
We believe that the current flight test program has been carefully 
planned and follows a disciplined approach that enables the program to 
manage the risks incurred by the compressed flight test program.
    Another key finding of the Welch report was that the technical 
demands of hit-to-kill require a rigorous ground test program, using 
high fidelity end-to-end system simulations and analysis to reduce 
known areas of uncertainty prior to flight. This ground testing should 
also include hardware-in-the-loop (HWIL) testing of critical flight 
hardware. The PATRIOT test program employs three HWIL facilities; one 
at LMVS to conduct closed loop flight operations with the missile 
hardware and software; a second, at Raytheon, that allows evaluation of 
ground system hardware/software interfaces with missile subsystems 
(hardware and software); and a third Government facility at AMCOM, 
Redstone Arsenal, Alabama, that gives increased fidelity of missile 
guidance accuracy with a high fidelity representation of the target in 
combination with natural and induced electronic countermeasures (ECM) 
flight environments. Over 1,000 flight simulations are run before each 
flight to ensure that any technical issues and other uncertainties are 
identified and resolved. The PATRIOT program also requires a series of 
three flight readiness reviews prior to each flight to ensure that the 
missile and system integration pre-mission analysis and flight test 
procedures indicate readiness for flight testing.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
        theater high altitude area defense [thaad] test program
    Question. General Lyles, much has been made of the Welch report's 
phrase, ``rush to failure,'' particularly with regard to the THAAD 
program. In testimony before the Senate Armed Services Committee last 
month, however, General Welch said he had ``little doubt that we do 
have hit-to-kill technology in hand'' even if it had not yet been 
demonstrated through flight testing. Do you agree with General Welch's 
assessment?
    Answer. Yes, I do agree with General Welch's assessment of the 
maturity of hit-to-kill (HTK) technology. The HTK concept, although 
technically challenging, has been successfully demonstrated in other 
missile defense programs. The PATRIOT Advanced Capability 3 (PAC-3) 
[formerly the Extended Range Interceptor (ERINT)] program is the most 
mature of the three BMDO HTK programs under development. Using HTK, 
ERINT successfully intercepted ballistic missile targets in fiscal year 
1994 and PAC-3 is scheduled to begin additional HTK missions later this 
year.
    The problems that THAAD has experienced in its attempts to achieve 
HTK intercept have, in general, involved missile reliability and 
systems engineering. Following FT-07, I chartered an Independent Review 
Team (IRT) to assess the mission critical functions and design margins, 
as well as to review the overall system concept. Though the review made 
a number of recommendations to improve the system reliability and to 
reduce flight test risk, the IRT concluded that the THAAD system 
concept and missile design are sound. Additionally, the IRT concluded 
that there were no fundamental design limitations that might preclude 
successful THAAD intercepts and none of the THAAD test failures to date 
challenge the feasibility of hit-to-kill.
                      space-based missile defense
    Question. General Lyles, you were quoted last month in Jane's 
Defence Weekly as saying the ``best way'' to defend against future 
missile attacks is by using space-based laser weapons. Can you 
explain--from a technical standpoint--why that is, what advantages and 
disadvantages there are to such weapons?
    Answer. An operational Space-Based Laser (SBL) system provides the 
potential for being the ``best way'' to defend against future ballistic 
missile attacks for two basic reasons: Early, boost-phase, destruction 
(prior to RV and Penaid deployment) and Global availability.
    The SBL is an advanced technology, next generation concept designed 
to destroy ballistic missiles during the boost-phase. A significant 
advantage of being a boost-phase intercept system is that the 
engagements generally take place over the enemy territory rather than 
near the defended asset. The potential for dumping nuclear, biological 
or chemical weapons of mass destruction back onto the adversary's 
territory may provide a deterrence to even launching such systems. 
Secondly, the SBL will be immune to the many countermeasures that are 
conjectured to reduce the effectiveness of midcourse and terminal 
engagement systems.
    An operational SBL system provides continuous, global coverage of 
ballistic missile threats. It is immediately available, i.e., it does 
not require transport of military resources or material to trouble 
spots around the world.
    An SBL system is envisioned to augment current ground systems as 
part of a tiered defensive architecture. A boost-phase system does not 
remove the need for midcourse and terminal systems; rather, it greatly 
improves the effectiveness and robustness of the defense as a whole. 
For example, in the early stages of a theater conflict, the SBL can 
help defend our access to points of entry allowing the Airborne Laser 
(ABL) and terminal phase systems to set up and operate in theater. Use 
of the easily refuelable ABL for boost phase intercept shots where 
possible would preserve the magazine of the SBL for other missions. For 
National Missile Defense (NMD), the SBL would similarly provide the 
first tier of defense for the ground-based NMD system.
    A perceived disadvantage to the current chemical SBL system concept 
is its finite magazine depth (number of times that the laser can fire) 
before refueling is required.
                          airborne laser [abl]
    Question. General Lyles, the GAO has recently written a critical 
report on the Airborne Laser program. Do you share GAO's dim view of 
this program?
    Answer. No. The Government Accounting Office's (GAO) primary 
concerns were with atmospheric turbulence. Recent testing addressed 
these concerns and they no longer appear relevant. In the early summer 
of 1997, the GAO took issue with the Air Force's non-optical method of 
measuring atmospheric turbulence (it measures air temperature 
variations which are translated into optical turbulence values). The 
GAO expressed concern that non-optical method might not be as accurate 
as required and suggested that the more complex and more expensive 
optical technique of passing a laser beam between two aircraft would be 
preferable. Since ABL's turbulence design specification is based on 
non-optical measurements, the GAO warned that the ABL specification may 
not be correct and the expected turbulence could be understated. The 
GAO's concerns with turbulence were cleared up in late August 1997 when 
the Air Force demonstrated correlation and equivalency between the non-
optical and optical methods. OSD conducted an independent analysis and 
agrees that the methodologies correlate. Using the validated non-
optical method, the Air Force has collected over five times the amount 
of turbulence data available at the time of the GAO investigation in 
Northeast and Southwest Asia. The results of this in-theater data 
collection validate ABL's design specification--over 80 percent of the 
measured optical turbulence levels are equal to or more benign than 
ABL's design specification.
                 long-range air launched target [lralt]
    Question. General Lyles, in testimony before the Senate Armed 
Services Committee last month, Ambassador David Smith suggested that 
BMDO was adding unnecessary requirements to the Request for Proposals 
for the Long-Range Air Launched Target in order to avoid possible 
complaints from Russia.
    a. Has the Request for Proposals (RFP) for the LRALT been issued?
    b. Does the RFP direct the designers to include a wing?
    c. Is the wing necessary to meet the LRALT's performance 
requirements?
    d. Is the LRALT compliant with the START Treaty even without a 
wing?
    e. If the LRALT is compliant without the wing, why is the wing 
being required?
    f. What is the total cost of this requirement?
    Answer. a. Yes, the RFP was released on April 16, 1998 and we 
expect to receive proposals from industry on May 15, 1998.
    b. Yes, the RFP states that the LRALT vehicle shall sustain flight 
over some portion of its boost phase by incorporating a wing that 
produces a vertical component of lift greater than the weight of the 
vehicle for at least 10 seconds.
    c. Our engineering assessments are that a wing would probably not 
be necessary to meet the LRALT's performance requirements as currently 
defined. The addition of a wing, however, would in some circumstances 
enhance the performance of this target vehicle, which in turn would 
provide a greater margin to meet possible future requirements.
    d. BMDO does not have the authority to determine whether LRALT or 
any other system is treaty compliant. To date, no final determination 
has been made as to the START Treaty compliance of the LRALT vehicle 
since the system's design is not settled. Preliminary review, however, 
indicated that an unwinged LRALT raised START Treaty compliance issues 
that pose unacceptable risk of delaying the program. The Department 
decided that adding a wing which provides aerodynamic lift would help 
avoid concerns involving START Treaty provisions dealing with air-to-
surface ballistic missiles.
    e. Same as d above.
    f. We have estimated the LRALT total cost for design, development, 
and a demonstration flight test to be approximately $45 million. The 
additional cost of incorporating a wing onto the LRALT vehicle is 
estimated to be $5 to $10 million. Subsequent flights to support the 
theater missile defense (TMD) test programs will be bought on a per use 
basis.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
                     advanced research center [arc]
    Question. a. What is the current budget for the ARC? What is BMDO's 
future funding profile for this facility and on what did you base these 
numbers?
    b. In reference to your letter dated April 1 that stated that BMDO 
would conduct a requirements review to determine the ARC's budget, why 
would BMDO cut the future funding for the ARC before they initiate the 
requirements review process?
    c. Will the Army officials who manage the ARC participate in the 
requirements review process, and if so, at what stage of the process? 
If not, why not?
    Answer. a. In the fiscal year 1999 President's Budget Submit, the 
ARC was funded as follows: $17,341,000 in fiscal year 1998 (included 
$7,000,000 Appropriation plus-up); $7,756,000 in fiscal year 1999, 
$7,119,000 in fiscal year 2000; and $21,819,000 for fiscal year 2001-
03. Based on recent ARC requirements discussions, fiscal year 1998 
planned funding was revised to $17,100,000. Current fiscal year 2001 
through fiscal year 2005 ARC funding is shown as zero within BMDO's 
financial planning database pending the outcome of BMDO's more 
comprehensive total infrastructure requirements review to be conducted 
this summer.
    b. The requirements review will be conducted in the summer of 1998. 
Until the review is completed, BMDO will not finalize the budget for 
the ARC or any other infrastructure facility.
    c. Yes. The Army officials who manage the ARC will be full 
participants in the review process.
      kinetic kill vehicle hardware in the loop simulator [khils]
    Question. a. Why did you direct, and I am quoting from your April 1 
memorandum, that ``all interceptor development programs funded wholly 
or in part by BMDO * * * to use the * * * Kinetic Kill Vehicle Hardware 
In The Loop (HWIL) Simulator facility at Eglin Air Force Base?
    b. Doesn't the effect of your policy take away work that has been 
conducted in Huntsville? If so, what is the basis for that?
    c. I am told that IDA conducted a study that identified KHILS as 
the only Hardware-In-The-Loop facility required by BMDO for infrared 
radiation Hardware-In-The-Loop testing. Did any of the members of the 
IDA study team have any direct Hardware-In-The-Loop infrared (IR) 
missile testing experience?
    d. Since the BMDO's charter is not to duplicate existing Service 
facilities, why did BMDO develop KHILS and why are you duplicating 
other existing test facilities, such as Arnold Engineering Development 
Center, especially considering your present funding challenges?
    Answer. a. The KHILS test facility was begun by then Strategic 
Defense Initiative Organization (SDIO) in the 1980's under Air Force 
management to take advantage of the technical expertise of the Air 
Force gained from the Advanced Medium Range Air-to-Air Missile (AMRAAM) 
HWIL experience. The facility has been designed to perform dynamic, 
closed loop HWIL experiments using realistic IR scene generation and 
projection techniques. Thus it simultaneously tests the IR seeker, 
electronics, and controls under simulated flight conditions. The kill 
vehicle may then be tested under a wide variety of conditions and 
scenarios. Through the years the KHILS facility has become DOD's center 
of excellence for these measurements. As the ballistic missile defense 
(BMD) Acquisition Executive, I have several concerns about the 
management and use of key test and engineering capabilities for our BMD 
interceptors in development. First, my objective is to avoid 
investments in facilities that fail to provide lasting value to the DOD 
test and evaluation infrastructure. This policy provides firm guidance 
aimed at preventing duplication of IR HWIL facilities within the DOD. 
Second, I am ensuring that every program has access to the technical 
expertise, equipment, and support it needs for accomplishing its test 
and engineering milestones successfully. In my judgment, KHILS provides 
the ``best technology and best practices'' applicable to all our IR 
interceptor programs. My policy memo allows for waiver procedures to 
avoid creation of program bottlenecks, and, as required, BMDO will 
provide mature technologies to other facilities to ensure the best 
practices are baselined among BMD programs. Third, the experience, the 
lessons learned, and the data developed from one interceptor program's 
test events can be utilized, compared, and applied by other programs, 
thus accelerating their development cycle. By directing them all to use 
KHILS as a common facility, I am giving our overall program another 
important means for advancing in an integrated, cost-effective way.
    b. At this time it is not clear what impact this policy will have 
on other Service facilities which could provide IR HWIL support to BMDO 
programs. The primary purpose of this policy is to baseline the best 
technologies and contain costs by preventing duplication of IR HWIL 
facilities. If a BMDO program has requirements which cannot be 
accommodated at the KHILS facility, the policy provides guidelines for 
our programs to request exceptions to the policy based on program 
unique technical, cost, and schedule considerations. Requests for 
waivers will be validated by the BMDO System Architecture Engineering 
Board. This review process will determine the level and distribution of 
our HWIL workload, however, I do not anticipate a significant 
adjustment in the level of HWIL work being conducted in Huntsville.
    c. The IDA study did not identify KHILS as the only Hardware-in-
the-Loop facility required by BMDO. The study concluded that, ``Both 
Army Aviation and Missile Command (AMCOM) and KHILS would probably 
yield valuable data on seeker performance, particularly given the 
absence, to date, of any high fidelity HWIL simulations of the 
endgame.'' while admitting that, ``A definitive assessment of the 
ability of KHILS and AMCOM to test the THAAD seeker is limited by a 
lack of experimental data.'' The study did express a preference for the 
resistive array technology used in the KHILS over the Laser Diode Array 
Projection (LDAP) technology used by AMCOM. We should note that since 
the study, Lockheed Martin is negotiating to purchase a resistive array 
for work on THAAD at Sunnyvale, while the Navy's Applied Physics 
Laboratory (APL) has acquired a resistive array for its theater 
ballistic missile defense (TBMD) programs.
    The members of the IDA study team have several years experience 
with the KHILS, AMCOM, Johns Hopkins University (JHU)/APL, and Arnold 
Engineering and Development Center (AEDC) facilities. They have 
extensive knowledge of BMD interceptor and surveillance systems, and I 
consider them well qualified to address IR HWIL testing.
    d. When the Strategic Defense Initiative Organization began 
development of Kinetic Kill Interceptor Systems in the 1980's, they 
found it required high fidelity, fast framing, infrared imaging seekers 
to provide the precision performance data necessary to perform hit to 
kill intercepts. As these imaging systems were developed and matured, 
the complexity of functions assigned to these kinetic kill weapon 
systems amplified the need for a new generation of robust hardware-in-
the-loop (HWIL) simulation technologies and facilities, specifically 
designed to address hypervelocity, hit to kill intercepts with infrared 
seekers.
    The Munitions Directorate of the Air Force Research Laboratory was 
selected as the single IR HWIL development and test organization, and 
the Kinetic Kill Vehicle HWIL Simulator (KHILS) facility was developed 
to accomplish this role. Designation of a single facility allowed us to 
control repetitive development and learning curve costs associated with 
each of our interceptor programs. In this role, KHILS has continually 
advanced the state of infrared HWIL technology. Their work in the areas 
of real-time infrared scene generation and projection technology has 
been exemplary. Due to the work at KHILS, we have the technology in 
hand to perform realistic, robust HWIL testing of our infrared 
interceptor systems.
    The KHILS facility and those at the Arnold Engineering Development 
Center are not duplicative. The KHILS facility is used to address 
closed-loop HWIL testing of BMDO interceptor systems with infrared 
sensors, and develop technologies associated with the generation and 
projection of infrared scenes. The BMDO sponsored facilities at AEDC 
are used to performed open loop calibration and characterization of 
space based infrared sensor systems.
                atmospheric interceptor technology [ait]
    Question. a. I was pleased by your decision to make the AIT program 
your number one support technology program. You are currently using 
SMDC to execute the program. Do you intend to continue utilizing SMDC 
to execute all AIT development activities in the future?
    b. You directed the AIT to focus on developing technologies for low 
endo atmospheric interceptors. Do you intend to use AIT to develop high 
endo atmospheric interceptors in the out years?
    c. It is my understanding that the Discriminating Interceptor 
Technology Program is being executed by BMDO. Why is there not a 
Service Execution Agent for this program?
    Answer. a. Executing agents for AIT development activities 
currently include SMDC and Navy China Lake. Executing agents are 
selected based on their capabilities, related experience in the 
technologies being developed, and ability to develop and implement 
transition paths to enable infusion of the technology into the system 
program for which it is intended. We expect that SMDC will continue to 
be a principal executing agent for AIT development activities.
    b. AIT will focus on developing component and subsystem 
technologies for those missile and air defense interceptors which fly 
within the atmosphere: principally PAC-3, Navy Area Defense, MEADS, and 
THAAD. All of these systems, with the exception of THAAD must operate 
as missile and air defense interceptors with mission altitudes 
extending down almost to the surface. The most pressing technology 
requirements encompass the low endo-atmospheric battle space. The new 
direction for AIT is to ensure the technologies developed are 
applicable to these principal technology customers. For these reasons, 
I have focused AIT to develop those technologies needed for all of our 
current and future atmospheric interceptors. AIT development thrusts 
will be coordinated with other technology programs to provide leverage 
and avoid duplication of effort.
    c. The Discriminating Interceptor Technology Program (DITP) is 
centered about the requirements of the Services and the major defense 
acquisition programs (MDAP's) to counter the anticipated advanced 
missile threat and associated counter measures. DITP is focused on the 
regime where the physics of the problem are not significantly 
influenced by atmospheric properties. This is in contrast to our AIT 
program, which must, for example, consider aerodynamic lift and drag as 
well as other effects. BMDO provides Program Integration of DITP 
activities. Current Executing Agents for DITP include the Army, Air 
Force, Navy and BMDO to maximize leveraging opportunities, avoid 
duplication, and to exploit of the unique experience and qualification 
provided by the various Service agents. We expect that DITP will 
continue to be executed as a tri-Service program.
                                 ______
                                 
              Questions Submitted by Senator Dale Bumpers
                      targets and countermeasures
    Question. To what extent, if any, will each of our hit-to-kill 
ballistic missile defense systems be flight tested against realistic 
targets that emulate the countermeasures and penetration aids that 
could reasonably be incorporated on threat missiles, including early 
release submunitions?
    Will such intercept tests, if any, be part of a complete integrated 
systems test?
    Answer. THAAD: Prior to Milestone II, the THAAD test program 
includes radar discrimination testing against threat representative 
targets and targets with countermeasures. During Engineering and 
Manufacturing Development (EMD), the test program includes intercepts 
against threat representative targets with countermeasures.
    NTW: Prior to Milestone II, the NTW test program includes flight 
testing against basic threat representative targets. During EMD, the 
test program includes intercepts against advanced threat representative 
targets.
    PAC-3: The PAC-3 test program, currently in the EMD phase, includes 
flight testing against threat representative targets and targets with 
countermeasures. The test program also includes testing that will 
validate the radar ability to perform classification, discrimination, 
and identification of threat representative targets and targets with 
countermeasures.
                     national missile defense [nmd]
    Question. Is NMD being designed to cope with the stressful flight 
characteristics and capabilities of Russia's new SS-27? Will NMD be 
flight tested against a target that will emulate the flight 
characteristics and penetration capabilities of the SS-27?
    Answer. The NMD system is being designed to cope with sophisticated 
missile systems. However, our primary focus for near term development 
and testing for a potential 2003 deployment is on less sophisticated 
threats, such as those that may be developed by a ``rogue'' adversary, 
with some added penetration aids. Over time, as the NMD system matures 
past its initial capability, the planned NMD development strategy is to 
evolve the system capability to address more stressing threats. This 
planned evolution includes the additional sensing and battle management 
upgrades necessary to successfully negate sophisticated missiles, 
warheads, and penetration aids.
 theater high altitude area defense [thaad]--navy theater wide defense 
                                 [ntw]
    Question. I understand that THAAD and Navy Theater Wide are 
optimized for exoatmospheric intercepts of longer range (1,000-2,000 
kilometers) theater ballistic missiles.
    How effective will each system be against short range Scud-type 
missiles that spend very little time at high altitude?
    Answer. NTW is an upper tier defensive system designed to provide 
protection against medium to long range TBM's in the exoatmosphere that 
has no capability against the short range Scud-type missiles. THAAD is 
designed to provide protection against short to long range (in excess 
of the range specified in your question) TBM's in both the endo and 
exoatmosphere and has the capability to engage the short range Scud-
type missiles. Both THAAD and NTW are employed in concert with lower 
tier systems to provide defense in depth against short and long range 
threats.
                                 ______
                                 
           Question Submitted by Senator Frank R. Lautenberg
                    navy theater wide program [ntw]
    Question. General Lyles, regarding the Navy Theater Wide Program, 
would you please comment on the relative amount of funding going toward 
system and radar technology versus missile technology?
    Answer. To date, the majority of the Navy Theater Wide (NTW) 
program funds have been used for development of the Standard Missile 
(SM) interceptor. Of the subsystems that comprise the NTW system, we 
believe the interceptor to be the most challenging. Although it 
leverages off the SM legacy, it integrates an IR Seeker and is the 
first SM variant to prosecute the threat in the Exoatmosphere. The 
Aegis Weapon system and radar technology, while challenging, leverage 
off the existing Aegis Weapon system and more importantly the Navy Area 
Defense Theater Ballistic Missile Defense program. Recently however, a 
large portion of NTW risk reduction activity funds have been targeted 
toward both the NTW Aegis Weapons System Computer Programs and radar 
technology.
                                 ______
                                 
              Questions Submitted by Senator Byron Dorgan
                     national missile defense [nmd]
    Question. If NMD were a program with a normal development 
timetable, what would its schedule look like? When would it be ready to 
deploy? By how many years, roughly speaking, does the ``3+3'' schedule 
reduce the time normally needed to develop this program?
    Answer. The Department has directed that the current NMD program be 
a ``3+3'' program, with the potential requirement to meet a deployment 
date of 2003, consistent with Public Law 105-85. A normal MDAP NMD 
acquisition program was considered as part of the ``Quadrennial Defense 
Review'' (QDR) analyses that were prepared last year. Such a program 
would most likely conduct program definition and risk reduction 
activities through 2003. At that time it would most likely reach the 
equivalent of a MS II decision, from which an Engineering and 
Manufacturing Development phase could be initiated. An initial 
operational capability under these assumptions could be reached by 2006 
at the earliest.
    The benefits of such a schedule change were perceived by the QDR as 
greater schedule realism based on historical experiences. However, they 
also noted the potential that the threat might emerge before a 
deliberate program reached maturity, a concern also expressed by both 
the Congress and the Department. It should be noted that while we are 
executing ``3+3'', we have not discarded the normal departmental 
requirements to have metrics as criteria for passing to the next phase 
or manufacturing milestones such as design reviews, the DRR (Deployment 
Readiness Review) and IST's (Integrated System Tests).
    The QDR reached the conclusion that a high risk 3+3 program was 
justified based on the potential need for an NMD deployment. Following 
that decision, the NMD Program has been focused on meeting the 3+3 
goals, and accordingly, we have not pursued the definition of a more 
deliberate program any further.
                              welch report
    Question. Why did the Ballistic Missile Defense Organization 
sponsor the creation of the Welch independent review panel?
    Answer. The Director, Ballistic Missile Defense Organization 
(BMDO), the OSD Director for Operational Test and Evaluation (DOT&E), 
and the OSD Director for Test, Systems Engineering and Evaluation 
(DTSE&E) co-sponsored the independent task force which reviewed best 
technologies and practices for successful flight testing. The purpose 
of the task force was to independently review current and planned pre-
flight testing practices for hit-to-kill interceptor programs, assess 
their adequacy, and identify innovations that are needed to provide a 
high level of confidence that each flight will be successful. BMDO 
believes that it is the mark of a good organization to benchmark itself 
against other similar activities past and present. We believe in 
continuous process improvement.
    Question. To quote two of the Welch panel's ``key judgments'' in 
its report, ``The strategy of accepting a high level of risk to shorten 
schedule time has been counterproductive. * * * [2] There are high 
schedule risks and inadequate test assets and testing planned in the 
3+3 program. In the judgment of the study group, successful execution 
of the 3+3 formulation on the planned schedule is highly unlikely. The 
program will benefit from the earliest possible restructuring to reduce 
risk.'' What is BMDO doing to restructure the NMD program to reduce the 
risks of schedule slippage and program failure?
    Answer. I have asked all Program Executive Officers and Program 
Managers to review the findings and recommendations of the Welch report 
and to conduct an assessment of the programs. The goal is to determine 
how the concerns raised in the report are being implemented, if 
applicable. Further, I have told everyone I will invite the Welch panel 
to review the NMD program later in the summer after the LSI has 
established a program baseline and test and evaluation plan.
    Question. The Welch report points out that while the ``3+3'' plan 
started in October 1996, we still don't have a Lead Systems Integrator 
contract. Would it be reasonable to restart the ``3+3'' time frame when 
that contract is awarded later this Spring?
    Answer. The Department has directed that the current NMD program 
with the ``3+3'' schedule, including the potential requirement to meet 
a deployment date of 2003, remain consistent with Congressional mandate 
(Public Law 105-85). The Lead Systems Integrator contract will be 
consistent with this schedule.
                 national missile defense [nmd] siting
    Question. Has the Joint NMD Program Office been inspecting sites in 
Alaska to evaluate them as possible sites for deployment of a national 
missile defense system? How many sites have been inspected?
    Answer. The National Missile Defense Joint Program Office has 
performed preliminary fact finding trips to existing Department of 
Defense (DOD) controlled sites in Alaska for potential use in 
deployment of a National Missile Defense System. Nineteen DOD sites in 
Alaska have been visited. These visits were used to support the LSI 
source selection process. The data collected, when coupled with our 
extensive North Dakota site data base, are important to allow us to 
carry out reasonable deployment planning without having to have a 
deployment decision prior to 2000.
    Question. Last year, in response to a similar question that I asked 
on this subject, BMDO stated for the record that ``before BMDO takes 
any action that could reasonably raise an issue of ABM Treaty 
compliance, we must seek clearance from the Under Secretary of Defense 
for Acquisition and Technology.'' Did BMDO seek this clearance before 
it examined the impermissible sites?
    Answer. The BMDO National Missile Defense Joint Program Office is 
performing analyses and planning to support a Deployment Readiness 
Review in 2000 and potential deployment of a National Missile Defense 
system within three years of such a decision. BMDO will seek the proper 
approval from OSD when it becomes necessary. No such clearance is 
necessary at present to collect data in order to be able to lay out 
potential deployment sites for OSD review.
                     national missile defense [nmd]
    Question. Is it technologically possible to have an effective 
national missile defense against limited attacks? Would you deploy such 
a system now? If not, why not?
    Answer. Although much work needs to be done, we see no engineering 
or technological impediments to deploying a national missile defense 
system that is effective against limited attacks. The NMD JPO has 
always believed that achieving an IOC by 2003 will require a highly 
successful and extremely well coordinated development phase over the 
next few years. However, there are no insurmountable technical issues 
and the Lead System Integrator (LSI) contractor, Boeing, has proposed a 
program approach to achieve an IOC in 2003. It would be extremely 
difficult to make a deployment decision now given the elements haven't 
yet been sufficiently developed, integrated, and tested in a fashion 
commensurate with making a prudent decision.
    Question. Does this mean that when considering whether to deploy 
NMD, the Congress and the Administration should consider other issues 
besides whether it is ``technologically possible'' to have an 
``effective'' system?
    Answer. What the Administration should consider before deployment 
is beyond the charter of BMDO. From a programmatic perspective, 
however, I assume the successful demonstration of the system's 
capability will be key.
    Question. In your prepared statement, you mention BMDO's plans for 
the first intercept test for the NMD program.
    a. When will that test occur, in your view?
    b. Do you know which vehicle BMDO will use to launch the 
exoatmospheric kill vehicle (EKV) from Kwajalein Missile range?
    c. How many NMD intercept tests will there be before we reach the 
decision point, in the year 2000, on whether or not to deploy NMD?
    Answer. a. The date for IFT-3 is currently under review, based on 
current test status and LSI testing approach.
    b. The first intercept Flight Test (IFT-3) will use the Payload 
Launch Vehicle (PLV).
    c. Currently there are four intercept tests scheduled before the 
DRR. IFT-3 and IFT-4 are designed to be intercept tests of the two 
competing EKV designs. IFT-5 and IFT-5A are Integrated System Tests 
that will test system integration in addition to an intercept of the 
winning EKV design. However, the government and Boeing are in the 
process of reviewing the outlined NMD Test and Engineering Master Plan 
and schedule based upon the LSI award.
    Question. What is the status of the Air Force's Minuteman option 
for national missile defense at this point?
    Answer. There is only one Department of Defense national missile 
defense program, the ``3+3'' program which is managed by the NMD JPO. 
While developing the NMD program, a number of alternative options were 
studied. After review of these options, it was decided to retain some 
Minuteman test resources and the booster as potential system 
components. A booster for the NMD 3+3 program has not been selected at 
this point. Currently, the Minuteman booster is under consideration as 
is a Commercial Off-The-Shelf (COTS) booster. The selection will be 
made by the Government within 90 days of the Lead Systems Integrator 
contract award.
               theater high altitude area defense [thaad]
    Question. Does the next THAAD test, in early May, have as one of 
its goals the interception of the target? If the interceptor misses the 
target, how can this subcommittee justify continued funding of the 
THAAD program?
    Answer. Yes, an intercept is one of the flight test goals. Even in 
the event of an intercept failure, the requirement for a land based 
upper-tier Theater Missile Defense (TMD) system will still exist. The 
Department has invested over $3.2 billion in the program to meet a 
critical warfighter need for this capability and despite previous 
missile intercept failures, all other elements (radar, battle 
management and launcher) of the system are working.
                                 arrow
    Question. Defense Secretary Cohen visited Israel this week and met 
with Israeli Defense Minister Mordechai. Press reports quoted the 
secretary as saying after the meeting that ``we agree that Israel needs 
a third Arrow battery to improve its defenses against missile attack * 
* * [W]e are committed to the research and development level of 
funding.'' In light of this statement by the Secretary, how would you 
suggest that we act in order to secure the funding needed to help 
Israel as it works to obtain a third Arrow battery?
    Answer. The Government of Israel estimates that a Third Arrow 
Battery (which includes radar, launch control center, fire control 
center, launchers, and interceptors) will cost about $170 million. The 
Department of Defense agrees with Israel's assessment that a third 
Arrow Battery is a valid requirement for Israel's defense. However, due 
to budgetary restrictions and a lack of funding for critical U.S. 
ballistic missile defense programs, the Department is not prepared to 
ask Congress for any additional funding to cover a third Arrow Battery. 
If Congress appropriates an additional $45 million in fiscal year 1998, 
BMDO could use this to fund a greater share of the development, 
manufacture, and testing of the Arrow user operational evaluation 
system under the Arrow Deployability Program (ADP), this would then 
free-up $45 million in Israeli national funds that could be applied 
toward the procurement of a third Green Pine radar (for the third Arrow 
battery) in fiscal year 1998.
    Question. In 1996 the U.S. and Israel signed a cooperation 
agreement on the Arrow program anti-ballistic missile system. The U.S. 
share of the program was to be $48 million, or $12 million a year over 
four years. This agreement was to lead to higher interoperability 
between U.S. and Israeli systems. Last year, Congress added $12 million 
to meet the U.S. commitment under the agreement. Could you please tell 
us what progress we have made in implementing this agreement? Do you 
support the Congress adding $12 million in fiscal year 1999 to meet our 
commitment? Will the Administration be including this sum in its future 
budget requests?
    Answer. The Arrow Deployability Program (ADP) international 
agreement was amended in February, 1998, specifically to implement 
Arrow Weapon System (AWS) interoperability with U.S. systems and to 
enhance the effectiveness of the AWS. The U.S. added $48 million to the 
ADP agreement over four years ($12 million per year), subject to the 
availability of funds, and Israel added $12 million over four years ($4 
million per year). A Joint U.S. and Israeli implementation team was 
immediately formed and a program was developed to implement functions 
and equipment to allow the AWS to interoperate with U.S. theater 
missile defense (TMD). The first supporting hardware was delivered and 
installed in Israel in late April, 1998, and Israel has begun 
procurement of necessary the Joint Tactical Information Distribution 
System (JTIDS) equipment capable of exchanging data with U.S. TMD 
systems. If funding is continued, the software development and the 
hardware integration now underway will culminate in fiscal year 2001 
with the demonstration and validation of AWS interoperabilty with the 
U.S. AEGIS and Patriot TMD systems.
    BMDO supports Arrow interoperability with U.S. TMD systems. The $12 
million in fiscal year 1999 funding is needed to fund U.S. obligations 
under the amended ADP international agreement. Due to budgetary 
restrictions and a lack of funding for critical U.S. ballistic missile 
defense programs, the Department is not prepared to include the needed 
funding in future budget requests.

                          subcommittee recess

    Senator Stevens. Do you have any further questions, 
gentlemen? Thank you very much, General.
    General Lyles. Mr. Chairman, I thank you and Senator 
Inouye, Senator Shelby for your strong support. Thank you.
    [Whereupon, at 11:42 a.m., Wednesday, April 22, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                         WEDNESDAY, MAY 6, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:22 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Cochran, Domenici, and Inouye.

                         DEPARTMENT OF DEFENSE

                          U.S. Pacific Command

STATEMENT OF ADM. JOSEPH W. PRUEHER, U.S. NAVY, 
            COMMANDER IN CHIEF

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Good morning, Admiral. We are delighted to 
have you here, our Commander in Chief of the Pacific.
    Congress has passed the $2.9 billion supplemental for this 
year. Several members of our committee went with us to the 
Middle East, and we have been meeting with military officials 
and others since we got back, because of our questions about 
morale, and readiness, and force levels.
    I know you have some problems about your missions, and 
deployments, and we want to know how you are impacted by these 
deployments. Some of them are under your command. I know that 
the aircraft carriers that have been dispatched to the Persian 
Gulf are under your command.
    So let me say, in the interest of time, I will put my full 
statement here in the record, and we will print your statement 
fully in the record. We hope there will be others here, but I 
have to tell you, in our absence they scheduled a vote here 
soon, so we should listen to your statement, and then we will 
come back and have questions. Senator Inouye.
    [The statement follows:]

               Prepared Statement of Senator Ted Stevens

    Good morning, the subcommittee today will hear from Admiral 
Prueher, Commander in Chief of the U.S. Pacific Command.
    The Congress recently passed the $2.9 billion defense 
supplemental bill for fiscal year 1998. That amount was 
provided to the Department of Defense for costs resulting from 
ongoing contingency operations in Southwest Asia and Bosnia.
    As you may know, several members of the committee just 
returned yesterday from a visit to our forces in Kuwait, Saudi 
Arabia and Bosnia, and to NATO headquarters.
    In each country, we met with American military personnel, 
State Department officials, and allied leaders.
    The delegation set out to assess the existing level of 
allied support, and to measure the effects of deployments on 
troop morale, readiness and the viability of modifying existing 
force levels.
    Admiral, today we want to know whether these other missions 
and deployments are impacting the readiness of forces under 
your command or the quality of life of your people.
    Admiral Prueher, your full statement will be included in 
the record.
    I ask that you summarize the issues that you would like us 
to focus on during today's hearing, and then I believe all of 
us will have some questions that we would like to ask you.
    Before we proceed, I would like to call upon the ranking 
member, Senator Inouye, for any comments that he would like to 
make.

                   STATEMENT OF HON. DANIEL K. INOUYE

    Senator Inouye. Mr. Chairman, I wish to join you in 
welcoming the Admiral to the committee. As you know, Admiral, 
we look upon the Pacific as an important place, not only 
because we represent States in the Pacific rim, but because we 
recognize the growing importance of this region. So I, together 
with the chairman, look forward to your views.
    Admiral Prueher. Thank you, sir.
    Senator Stevens. Yes, sir.
    Admiral Prueher. Thank you very much, Mr. Chairman, and 
welcome back to all of you. Senator Inouye, it is a treat to be 
here with you today, and I thank you for the opportunity to 
represent the men and women of the Pacific Command, and also 
present a view from the Pacific and an update on what we are 
doing there.
    In addition, I thank this committee especially for their 
steadfast support to the members of the armed services for our 
piece of national security, and more specifically, for passing 
the supplemental, which will be of great benefit to all of us.
    What I would like to do this morning, and I will do it as 
quickly as I can, is present an assessment of the Pacific 
theater, provide a little bit of a logic train, which both of 
you all have heard before, for the framework for our 
priorities, and what we are working on, talk for a moment about 
readiness, and then be happy to take your questions.
    The fundamentals and what we are doing in the Pacific are 
constant, but we adjust the activities to meet the 
circumstances. As both of you all know so well, the Pacific 
Command AOR is of great importance to the United States, with 
56 percent of the population in the world there, 35 percent of 
the population of the world in India and China alone, and 65 
percent of the world's population, when one considers the 
Pacific rim in total.
    The six largest armed forces in the world are in the 
Pacific region, and 35 percent of the U.S. trade is there. It 
is peaceful, but we always are reminded of the fact that since 
1950 the number of people who have been lost in the armed 
services in the Pacific have been higher than the rest of the 
world combined.
    Our mission for the Pacific Command is for a secure, and 
stable, and prosperous Asia Pacific region as part of our 
national military strategy. Our foundation of what we do is 
based upon two premises. One is the confluence of trying to 
work the political, the military, and the economic issues 
together, to work them in consonance, and not get one far out 
ahead of the other.
    The second premise is that military security underwrites 
the stable conditions which allow for economic and political 
prosperity to occur.
    As Secretary of State Albright has said, the economic 
system rests on political order, which in turn, rests on 
military security, and this leads to our strategy in the 
Pacific, which flows from the national military strategy of 
shape, respond, and prepare, with which you are familiar, but 
ours is one of preventive defense, which is what we do day to 
day.
    It consists of exercises, what we modestly call high-level 
meetings with other nations, it's ship visits, it's what we do 
day to day. It consists of meetings, such as what we did last 
night with the National Defense University about the Asia 
Pacific. It consists of classes of the Asia-Pacific Center for 
Security Studies which is off to a good start, with Gen. Hank 
Stackpole. But this is what we do day to day to build 
relationships and to prepare and train our forces to respond to 
crises.
    The second part of our strategy is crisis response, and 
there are examples of this. We respond with credible and ready 
forces, carrier battle groups, Marine ARG/MEUS, the newly 
flagged 172d Infantry Brigade, the crisis response force that 
would come from Alaska for airborne response, and with our Air 
Force squadrons.
    This crisis response has been demonstrated most recently in 
the last couple years with response to the China-Taiwan missile 
crisis, and then also the political infighting that occurred in 
Cambodia about 7 to 9 months ago, where we responded with 
special operations forces.
    The third part of our strategy, of course, is the ability 
to fight and win a major conflict, and what we have done for 
45-plus years of being with our Republic of Korea allies in 
Korea, has averted a war in Korea, and also created conditions 
in which that situation can be resolved.

                            Five key issues

    So with that strategy, I would like to briefly mention the 
five things that have priority for us, and they're on our plate 
right now.
    They are the preservation of the security relationship with 
Japan, building the foundations for a mil-to-mil relationship 
with China, and I'll talk about these a little more in a 
moment, creating the conditions for a noncataclysmic resolution 
or reconciliation in Korea, building a mil-to-mil relationship 
with India, and then also reacting to the East Asian economic 
crisis and the impact of that on the nations in the region, and 
then I would like to go into a little bit more detail on those 
factors.
    First, as we talk a lot about China we must not forget that 
our pivotal and key security relationship in the Pacific region 
is that which we have with Japan. Japan is working on the 
defense guidelines, which will allow for their future security 
role in Asia, and help to define that.
    Secretary Albright, when she was in Japan last week, signed 
an acquisition and cross-servicing agreement, which allows for 
us to use Japanese facilities as we work on the defense of 
Japan and other things in the region.
    We are concerned with Okinawa, of course, and the host 
nation support, in which Japan has provided $4.53 billion of 
support for United States troops and their stay in Japan. 
Together with Ambassador Foley, who is doing such a great job 
there, we are working this relationship very hard and keeping 
it a high priority.
    Second on our plate is building the mil-to-mil relationship 
with China, the foundations of that relationship, and it is a 
part of the overall relationship our Nation has with China.
    Militarily, we have come a long way from 2 years ago when 
our communications were close to zero. We are working on 
building a level of understanding with the PLA and the Chinese 
people, on what the United States and our Pacific forces are 
doing militarily.
    President Jiang Zemin, when he was in Honolulu, talked 
about the importance of gaining understanding as a precursor to 
building trust between our nations, and that is what we are 
working on.
    The issue of China and Taiwan is very important. I think 
the Chinese PLA leadership understands that Taiwan is--well, we 
understand it as a core sovereignty issue to China, and they 
also understand that the United States is committed to a 
peaceful resolution of the China-Taiwan issues.
    We are understanding also of the critical nature of 1.32 
billion people and what that means to China for economic 
modernization, for food, clothing, shelter, energy, and jobs. 
With that number of people it is a daunting governance 
challenge, as people involved in governing our Nation will 
understand, of creating that for those many people.
    So economic modernization transcends military modernization 
for the Chinese. But we deal with them from a position of 
military strength, and we deal with them from a position of 
respect for their interests as well as our interests in the 
region. As I say, we are working on the foundations, this is a 
long-haul relationship we are in with the PLA and with the 
Government of China.
    Korea, the third item, we are foremost trying to create the 
conditions for a peaceful reconciliation to occur in Korea. The 
new Kim Dae Jung government is making great strides at 
communications between the Republic of Korea and the DPRK in 
North Korea. General Tilelli there is doing a great job with 
our forces.
    It is the only nation in the world where we have a four-
star officer assigned to represent a single nation, represent 
us with a single nation, and our solid relationship that we 
work with the Republic of Korea armed forces needs to see 
reconciliation through to a finish. It is on the horizon, but 
we need to follow through on that.
    India, we're working a burgeoning military-to-military 
relationship with India, the second largest country in the 
world, and the largest democracy in the world, and this is a 
challenge, because they had been aligned with the Soviet Union 
during the cold war, and have been largely inward looking.
    It is important for us to recognize that though we usually 
talk about India-Pakistan, the Indians look to China as their 
main security challenge, and they also look east to Asia for 
their economic growth.
    The last item then that we are looking at day to day for 
this next year is the East Asian economic crisis and the impact 
that has had. It is important for us to realize that this 
economic crisis is, in fact, a security crisis, because they 
are tied to closely together.
    Our military role, our U.S. military role with the other 
militaries of the other regions, is to create time and space to 
allow for a solution for this economic crisis to occur. So we 
are adjusting the size, the shaping, and the timing of the 
events we do with the other nations to accommodate this crisis.
    It is important for the Asian nations and for the East 
Asian nations to see that the United States is with them and is 
working with them in both good times and bad, as Secretary 
Cohen has mentioned.
    The economic crisis hit hardest South Korea, Thailand, and 
Indonesia. South Korea is dealing with this, along with the 
IMF, as is Thailand, in a very constructive way. I would like 
to address a couple of comments more specifically to Indonesia, 
which is having a very--that nation is having a very hard time 
right now.
    Indonesia, as we have talked about before the committee 
before, has over 17,000 islands, 6,000 of which are occupied. 
It is the fourth largest nation, in terms of population, in the 
world, 208 million people, and has the largest Moslem 
population of any nation in the world.
    In addition to having a geo-strategic location along the 
Strait of Malacca, through which about 400 ships a week pass to 
go up to North Asia, it is a nation that is the linchpin of 
ASEAN and the Southeast Asian nations, because of its size, and 
because of its influence there, and, therefore, it is very 
important to the United States.
    They are currently challenged both politically and 
economically, and also this presents a real challenge for the 
military in Indonesia, for ABRI. The student unrest, the 
drought, the dramatic decline of the rupiah, have given a lot 
of turbulence in Indonesia. This puts the ABRI in a sensitive 
and very challenging position.
    We talk regularly with Ambassador Roy there, with the 
country team. I talked Thursday, before we came, Thursday of 
last week, with General Wiranto, who is the head of ABRI, and 
he recognizes the sensitivity and the challenge of his 
position, and trying to react moderately to the turbulence, and 
react in a responsible way.
    I am convinced that they are working very hard to act in a 
responsible way, but it is a challenge, and my opinion is that 
contact with Indonesia versus isolation is the key to trying to 
help them through this crisis.

                       Pacific Command readiness

    I would like to shift gears now to talk briefly about 
readiness, because that is something that is very much on 
everyone's mind, and from a CINC's point of view, I would like 
to say a few words about it.
    Foremost, from a commander in chief, of one of our regions 
in the world, what we need to have fundamentally is the right 
forces, at the right time, in the right place, to fight the 
right fight. So that's the fundamentals of it.
    What capabilities do we have to do this? There are seven. 
First is combat-capable equipment. Second are qualified people. 
Third is adequate maintenance and logistics support for this 
equipment. The fourth is training. The fifth are tactics to 
capitalize on the training and the people. The sixth is the 
ability to move forces to the right place, and the ability to 
command them. Then the seventh is the infrastructure to support 
these forces.
    We look at these seven items on three different levels. One 
is the tactical level or the unit level. The second is 
aggregated to a battle group level or an expeditionary force 
level. The third is the strategic level.
    So this accounts for a lot of the items that a unit will be 
having tactical problems, the tank will not fire, the ship will 
not shoot, or something like that, and yet, that can be 
accommodated at the strategic level, and still have the overall 
forces be satisfactory.
    The bottom line of all of this is that when we look at the 
Pacific forces, overall we are ready, our forces are adequate. 
We have some shortfalls, which we have documented in the 
written statement for the record, which increase the time and 
the risk of responding to crises. Our forward deployed forces, 
the readiness is very good. As we look at the forces that are 
back in the United States that are the rotational forces, their 
readiness has declined, and we are looking--if you think of a 
bucket, that there is a bucket in the curve for the rotational 
forces, that bucket is deeper.
    We have used the parts, we have used the people, and we 
have used some of those assets, and so that bucket is, in fact, 
a deeper bucket, as we get ready to deploy the forces.
    It is becoming more challenging to deploy forces ready, but 
our forward deployed forces are currently ready. I can talk 
about that more in questions and answers, if there are 
questions about it.
    Senator Stevens. Could I interrupt you?
    Admiral Prueher. Yes, sir.
    Senator Stevens. We are just back from the Persian Gulf, 
and we found that the Air Force and the Army, and even the army 
from Bosnia, when they returned from a deployment, they are 
sent to sort of retraining area so they can restore their 
combat skills.
    Admiral Prueher. Yes, sir.
    Senator Stevens. Do your people, when they are in a 
stationary type of deployment, like off Iraq, for a fairly long 
period, do they have to come back and go through retraining, 
too? Are you saying that you have the same problem they do?
    Admiral Prueher. That problem exists for the forces that 
deploy from the Pacific, also. The real difference is between 
the traditional rotational forces of--the Marine Corps and the 
Navy have deployed on rotations for a long time, and so that is 
a normal circumstance for the Navy and Marine forces, they 
come----
    Senator Stevens. Normally, do they go through retraining?
    Admiral Prueher. Yes, sir, they do.
    Senator Stevens. So there is no added training necessary 
when they come back from like the gulf deployment.
    Admiral Prueher. The rotational forces normally, when they 
come back, they go to a lower readiness level, and then that 
readiness level comes back up as they reach another scheduled 
deployment.
    The forces that deploy out of phase are the ones that--
primarily they would be the Army and the Air Force units that 
come there, they come, their readiness declines, because 
they're not getting the training while they're deployed, their 
readiness would decline, and then they'd come back and have to 
retrain to get back up to a higher level of----
    Senator Stevens. We discussed that with them, but I'm 
talking about your forces now. One of the things that the Air 
Force pilots complained about is that if they're in Kuwait they 
can't go outside the cleared air space, if they're in Saudi----
    Admiral Prueher. That's correct.
    Senator Stevens [continuing]. They very seldom go outside--
but in any event, they do not have ranges, and they do not have 
the same type of training they would get if they were in the 
United States or even in Korea.
    Are you limited in your training opportunities when 
deployed, as compared to other deployments in the gulf region?
    Admiral Prueher. The answer is yes, sir, we do. The air 
units that deploy from Kadena are forward deployed PACAF forces 
that were deployed from Kadena, they would----
    Senator Stevens. I'm talking about Navy now, not----
    Admiral Prueher. OK.
    Senator Stevens. We have the PACAF----
    Admiral Prueher. I'm thinking joint, and you're thinking 
Navy, sir. OK.
    Senator Stevens. Well, the joint we ran into, there's no 
question about it----
    Admiral Prueher. The naval force is the--the Indy carrier 
battle group that is out there, and the Marine--the amphibious 
ready group [ARG] and the Marine expeditionary unit [MEU], when 
they are out there and on station, they have the same issues 
which you are discussing.
    Senator Stevens. Right now you have two carrier groups out 
there, right?
    Admiral Prueher. Yes, sir; one from our AOR, and one from 
the European AOR. Yes, sir.
    Senator Stevens. Admiral, I have to interrupt you. Do you 
have any questions on that question? OK. I'm sorry, sir. We'll 
come back, if you will just give us a----
    Admiral Prueher. Yes, sir.
    Senator Stevens [continuing]. Recess here.
    [A brief recess was taken.]
    Senator Stevens. My apologies, Admiral. I'm not sure you 
had finished your statement, sir.
    Admiral Prueher. I had a little bit more. I would like to 
take one more shot on the readiness degradation while deployed.
    Senator Stevens. All right.
    Admiral Prueher. For naval forces, the Navy and Marine 
Corps, which do rotational deployments, it is part of the plan 
that when they return from a deployment that the readiness 
would degrade prior to the increase in readiness, prior to the 
next deployment.
    For the Army and the Air Force forces, which do not 
normally do just regular rotations, but the description that 
you saw in Southwest Asia is one that happens irrespective from 
where they deploy, that occurs, and that happens with our 
forces, too.
    For rotational forces, that is a planned decrease in 
readiness, and for the others that are globally sourced, the 
readiness will degrade if they do not have training 
opportunities, which is the case in Southwest Asia, while they 
are deployed that readiness will degrade and then they will 
have to bring that up when they return.
    Senator, I have a couple of stray shots of things that I 
hope will perhaps precipitate some questions and answers, and 
these are miscellaneous things that, in lieu of talking here, 
this morning there are just a couple of things; one is the 
strategic importance of Guam, which we support; another is the 
Ford Island Development Authority, which allows for increased 
housing and quality of life in the Honolulu area, which we 
support.
    The base realignment and closure, which Secretary Cohen has 
pushed so hard, is something that I realize there are a lot of 
factors, that we need to do in order to capitalize, so that we 
can try to recover some funds for modernization and readiness. 
The other is the U.N. Convention on Law of the Sea 
ratification, which we support, and the congressional 
delegation visits to the AOR, which are so important.
    I recognize because of the role of the Congress in our 
Nation's Government how important these are for congressional 
delegations to go to the regions, just as you all have been to 
Southwest Asia, and to Bosnia, and to NATO, there is no 
substitute for seeing things firsthand, and it is very 
important, though the distances are for delegations to come to 
the Pacific region and to the Asia Pacific region to see 
firsthand what is going on out there, so that they can see with 
their own eyes, and we would really support that, sir.
    Thank you very much for the opportunity to be present. 
Again, in the military world we are paid to be pessimists, I am 
optimistic about the future of the Asia Pacific region, though, 
and our work in it.

                           prepared statement

    It is important for all of us in the political, economic, 
and the military part to work in a very forehanded way and 
preventive way to avert crises, and to pick the important 
issues, and last, I thank both of you and the members of the 
committee for the professional and the personal support to our 
U.S. military. Thank you, sir. I am ready for your questions.
    [The statement follows:]
              Prepared Statement of Adm. Joseph W. Prueher
    Mr. Chairman and members of this Committee, on behalf of the men 
and women of the United States Pacific Command, thank you for this 
opportunity to present my perspective on security in the Asia-Pacific 
region.
                           executive summary
    Financial crisis.--As this Committee is fully aware, Asia is in the 
midst of a serious financial crisis. Some might even say it is a 
broader economic crisis. It is important that this financial crisis 
also be understood in security terms. We have seen early signs of 
instability in Indonesia and have concerns about the situation in other 
countries as well. As President Clinton said in his State of the Union 
address, a secure, stable Asia is in America's interest. Our military 
presence and our military-to-military contacts throughout the region 
undergird overall security and stability in the region.
    Security alliance with Japan.--Our alliance with Japan continues to 
be the most important U.S. security relationship in the region. The 
signing of the revised Guidelines for U.S.-Japan Defense Cooperation in 
1997 enhances this relationship. Japanese host-nation support for U.S. 
forces is a critical part of U.S. military presence in Asia and meets 
Congressional goals for burden-sharing.
    China.--China's growing economic and military power is a major 
issue for regional leaders. The past year brought improvements in U.S.-
China relations. Carrying out the policies of the Secretary of Defense 
and, in conjunction with the Chairman of the Joint Chiefs of Staff, 
U.S. Pacific Command worked successfully to improve our military-to-
military relationship with the People's Liberation Army. Our goal is to 
lay a foundation for a relationship based on mutual understanding, 
trust, and increased openness. Along with the U.S., China will play an 
enormous role in determining if the next century is one of conflict or 
cooperation. On the subject of Taiwan, we recognize from China's 
perspective this is a core sovereignty issue, while China recognizes 
that the United States is committed to the peaceful resolution of 
Taiwan issues. I am personally optimistic for the growth of the U.S.-
China relationship; however, we must continue to deal with China from a 
position of strength, combined with respect, and not have unrealistic 
expectations. This is a long-haul process.
    Korean peninsula.--The Korean peninsula remains a volatile 
flashpoint. U.S. and South Korean troops would be in harm's way in the 
first hour of a conflict but are key to rapid conflict resolution. Our 
37,000 troops stationed on the Peninsula and our alliance with the 
Republic of Korea have deterred North Korea from offensive action for 
45 years. U.S. forces on the Peninsula, coupled with our reinforcement 
capabilities and ROK forces, are adequate for this task. The goal is 
eventually to facilitate a non-cataclysmic end to this situation. We 
must stay the course of deterring conflict, providing food aid, 
engaging in four-party talks, and supporting the Korean Peninsula 
Energy Development Organization, particularly in light of North Korea's 
continued economic deterioration.
    Readiness and OPTEMPO.--U.S. Pacific Command's forward-deployed 
forces are ready to execute assigned missions, but significant 
deficiencies exist under a ``two major theater wars'' scenario. In 
1997, U.S. Pacific Command Navy, Air Force, Army, and Marine Corps 
components all reported shortages of personnel in some units. Although 
components have overcome these problems in the short term, readiness 
for deployed forces is increasingly achieved at the expense of non-
deployed forces. Currently, some forces required for long-term 
commitments in the Asia-Pacific area of responsibility are positioned 
in the Persian Gulf. Any reduction in personnel, equipment, or funding 
would significantly erode our capabilities in the Pacific. With some 
minor exceptions, we have been able to manage the operational tempo 
(OPTEMPO) for forces under U.S. Pacific Command, because we are 
accountable for and can trade off between training and operations. 
There are no firm indicators that the forces are ``wearing out.''
                    1997 in the asia-pacific region
    Five developments stand out for their impact on U.S. security 
interests in Asia in 1997:
  --The Asian financial crisis was the most significant development 
        this past year. It began in July with the sharp decline of the 
        Thai baht. The currencies of other nations followed suit 
        shortly thereafter. Serious debt servicing problems in several 
        Southeast Asian nations and South Korea brought on economic 
        uncertainty and concern about potential instability.
  --The food crisis in North Korea reached new levels and continued to 
        draw international attention, resulting in unprecedented 
        interventions by non-governmental organizations. The aid that 
        North Korea received did not address the underlying causes of 
        the food shortage. The crisis will likely occur again in 1998 
        and in the years ahead and increases the potential for future 
        instability on the Peninsula.
  --Factional fighting erupted in Cambodia in July 1997, reversing 
        earlier democratic trends. The Association of Southeast Asian 
        Nations (ASEAN) postponed indefinitely Cambodia's entry into 
        ASEAN and is trying to conduct negotiations to resolve the 
        situation. The outcome remains uncertain.
  --In September, the United States and Japan agreed to a complete 
        revision of the Cold War-era Defense Guidelines. The revised 
        agreement builds upon our existing security relationship and 
        includes enhancements in bilateral planning and Japan's rear 
        area support. The revised Guidelines significantly improve our 
        ability to meet regional security challenges.
  --At the October summit in Washington, DC, China and the United 
        States committed to forging a ``constructive strategic 
        partnership.'' On the military side, DOD concluded a Military 
        Maritime Consultative Agreement, our first bilateral military 
        agreement with China.
                u.s. pacific command strategy in action
Theater Strategy
    In support of the President's National Security Strategy, Pacific 
Command is striving to achieve a stable, prosperous, and democratic 
Asia-Pacific community in which the United States is a player, partner, 
and beneficiary.
    Our military strategy derives from two fundamental premises. The 
first is a notion of confluence, that the political, economic and 
military aspects of security are interdependent, and cannot be advanced 
separately. Second, security, especially military security, undergirds 
the stable conditions that are prerequisite for economic growth and 
prosperity.
    U.S. Pacific Command's strategy consists of three levels of 
activities and operations: Peacetime engagement; crisis response; and 
fight and win a major regional conflict.
    If we are engaged in the region in peacetime and our actions backed 
by credible, combat-ready forces, our strategy is able to respond to 
crises, prevent wars, and enhance stability.
    In 1997, this strategy meant that U.S. Pacific Command forces were 
extensively involved in sustaining the military component of American 
engagement in Asia, as part of the Administration's overall engagement 
program in Asia.
    In spite of Asia's current economic difficulties, the investments 
our nation is making in Asia's security and stability have yielded 
tangible benefits to the United States.
Responses to Asia's Financial Crisis
    East Asia's serious financial crisis has implications for security 
and stability in the region. The near-term security impact will include 
slowdowns in the modernization of Southeast Asian militaries, 
reductions and cancellations in scope of some training exercises, 
possible reductions in funding of the Korean Peninsula Energy 
Development Organization, and pressure to reduce host nation support.
    Beyond these immediate effects, we are watchful for early signs of 
instability including civil disturbances, labor disputes, increased 
ethnic rivalries, and some increase in anti-American rhetoric.
    The U.S. government is responding to the financial crisis in a 
number of ways. U.S. Pacific Command is taking steps to maintain the 
visibility of American military presence and contacts with our military 
counterparts, especially in Southeast Asia. We have realigned our 
engagement programs and are directing resources to the maximum extent 
to lower-cost, higher-impact activities.
Security Alliance with Japan
    Japan remains our foremost security partnership in Asia. With the 
support of the Hashimoto government, we have made great strides to 
bolster this relationship over the past year.
    The new Defense Guidelines signed in September strengthened our 
alliance and enabled the U.S. and Japan to engage in bilateral planning 
for crises in areas surrounding Japan. The new Guidelines agreement is 
essential to maintenance of peace and security in the region.
    Japan continues to host about 54,000 U.S. military personnel. In 
spite of the fiscal constraints of a slowing economy and a reduced 
defense budget, Japan's generous host nation support continues to meet 
Congressional goals for burden-sharing. Funding reductions in Japan's 
voluntary Facilities Improvement Program have had some impact; however, 
the impact has been minimal as construction projects have been 
carefully prioritized through close coordination of U.S. Forces Japan 
and the Government of Japan. At the bottom line, the Government of 
Japan continues to provide exceptional facilities and support for U.S. 
military personnel and their dependents.
    U.S. Pacific Command continues to work closely with the Government 
of Japan in implementing the Special Action Committee on Okinawa (SACO) 
Final Report and minimizing the impact of U.S. military presence on the 
people of Okinawa. While we have made significant progress in most 
areas, the return of Marine Corps Air Station Futenma is a difficult 
and exceptionally complex challenge. We remain flexible as to the type 
of replacement facility, as long as it maintains the critical military 
functions and capabilities of Futenma.
Military-to-Military Relations with China
    China's regional and global influence will likely grow as its 
economy grows and the People's Liberation Army (PLA) fields a more 
modern force. Owing to its non-convertible currency, China has been 
largely insulated thus far from the direct effects of the region's 
financial crisis. Although China's growing power is high on the list of 
concerns of regional leaders, China is not a direct threat to the 
United States today. The PLA can project military power only to a 
limited extent beyond China's borders but has the potential to attain a 
regional power projection capability in the period beyond 2015--and 
then only with many correct decisions and full funding.
    The tension between China and Taiwan has lessened in the past two 
years. From China's perspective Taiwan is a core sovereignty issue. The 
U.S. is committed to ``one China'' as defined in the three joint 
communiques. On the other hand, China recognizes that the United States 
is also committed to the peaceful resolution of Taiwan issues. It is in 
no one's interest to bring the issue back to crisis levels.
    It is important to further develop the U.S.-China relationship in a 
realistic way. China has an important role in peaceful resolution of 
regional issues including not only Taiwan, but also the South China Sea 
and the Korean Peninsula. Proper, balanced management of U.S.-China-
Japan relations will be key to regional peace and security. We need to 
continue to encourage steps in the evolution of bilateral and 
multilateral relations, together with dialogue and mechanisms to 
address the issues effectively.
    Conducted in conjunction with OSD efforts, U.S. Pacific Command's 
military-to-military contacts with the PLA are an important part of 
overall U.S. engagement with China. Contacts in 1997 included hosting 
visits by the Chief of PLA General Staff, General Fu Quanyou, and the 
Deputy Chief of PLA General Staff, Lieutenant General Wu Quanxu. The 
PLA hosted visits to China by the Commander-in-Chief, U.S. Pacific 
Command and the Commander-in-Chief, U.S. Pacific Fleet. The U.S. Navy 
conducted a ship visit to Qingdao while the PLA Navy conducted its 
first-ever ship deployment to the United States. Although falling short 
of the level of openness we seek to establish, the PLA did show us a 
nuclear-powered submarine as well as the flight test center at 
Cangzhou. Pacific Command opportunities for dialogue with President 
Jiang Zemin and all senior PLA leadership have been excellent. 
Secretary of Defense Cohen included me also on his January 1998 trip to 
China in which we toured Beijing's air defense center and met with 
President Jiang Zemin.
    U.S. Pacific Command's goals in building this relationship with the 
PLA are two-fold: to build understanding and trust, and to increase 
openness. Laying this foundation for the future enhances our 
understanding of China's military intentions and capabilities while 
giving us the opportunity to increase Chinese appreciation for U.S. 
forces stationed in the region. We are building this relationship from 
a position of both strength and mutual respect. It will take continuous 
work over a long haul. For this reason, it is important to include 
younger generations of officers in future military-to-military contacts 
to capitalize on long-term working relationships, a point on which the 
PLA leaders agree.
Deterrence on the Korean Peninsula
    The Korean peninsula remains a volatile flashpoint where U.S. 
troops and citizens would be in harm's way on the first hour of a 
conflict.
    The North Korean economy has continued to deteriorate. North Korea 
is now dependent on international aid to feed its people. The regime 
has agreed to engage in four-party talks aimed at formally ending the 
Korean War and appears to be honoring the terms of the Agreed 
Framework. This past year also yielded an agreement with North Korea to 
accelerate the recovery of unaccounted-for American servicemen from the 
Korean War.
    Meanwhile, the Republic of Korea (ROK) is coping simultaneously 
with the Asia financial crisis and the transition to new political 
leadership. Kim Dae Jung, the new President, has already voiced support 
for U.S. military presence in Korea into the foreseeable future. 
Ensuring that ROK military preparedness is not seriously weakened by 
ROK economic difficulties is the next challenge. Despite the economic 
problems, the ROK has pledged to maintain host nation support at 
previously agreed-to levels. Secretary Cohen's recent visit moved this 
cause forward.
    While we remain hopeful that four-party talks will reduce tensions 
on the peninsula, military prudence dictates maintaining U.S. forces in 
Korea and our security alliance with the ROK to deter any hostile moves 
by the North.
    In my view, reconciliation is in everyone's best interest as a 
first step in the long-term process of resolving the situation on the 
peninsula. Economic, political, and cultural differences built up 
during fifty years of separation and mistrust will not be overcome 
easily. The United States and China have key roles to play, but the two 
Koreas will ultimately determine the pace of the process.
    Lastly, our forces in Korea require the continued use of anti-
personnel landmines (APL's). APL's are critical in current plans to 
deter or halt an attack, to reduce casualties, and to reduce the risk 
of humanitarian disaster that would result from combat in and around 
Seoul. Until the situation on the peninsula is resolved or new 
technologies are developed, APL's should remain an integral part of 
U.S. forces on the peninsula as specified in the President's policy 
directive on this issue.
Joint Task Force Bevel Edge in Thailand
    Thailand is an important treaty ally and security partner. Thailand 
is important both for its location in Southeast Asia and as a strategic 
bridge to the Persian Gulf. Thailand is one of the nations in Southeast 
Asia most affected by the financial crisis.
    U.S. Pacific Command maintains close relations with the Thai 
military. This relationship yielded tangible benefits in July 1997 when 
fighting erupted between rival political factions in Cambodia. U.S. 
Pacific Command temporarily staged a small special operations force 
package, Joint Task Force Bevel Edge, in Thailand in preparation for a 
possible evacuation of American citizens from Cambodia. Approval for 
this deployment was simplified and expedited because of the strength of 
our working relationship with the Thai military. This is a good example 
of the yield from our engagement program.
Challenges in Indonesia
    The United States has a special interest in a stable Indonesia. 
With the world's fourth largest population and a location astride 
shipping lanes linking Asia to the Arabian Gulf, Indonesia is 
strategically important. Events in Indonesia affect the rest of the 
region. Indonesia's importance to the United States is especially 
significant in light of China's growing power and Indonesia's key role 
in the Association of Southeast Asian Nations (ASEAN) and the ASEAN 
Regional Forum (ARF).
    Indonesia has been hit especially hard by the financial crisis. The 
U.S. Government has urged the Indonesians to adhere to the economic 
reforms they have agreed to undertake with IMF. It remains uncertain 
whether Indonesia is willing to adhere to the prescriptive remedies 
required by the IMF in order to receive financial guarantees necessary 
to stabilize their economy. In the interim, public dissatisfaction and 
student demonstrations continue to grow over economic and political 
issues. These demonstrations have put great pressure upon the 
Indonesian Armed Forces (ABRI) to maintain order while at the same time 
showing restraint. My view is that ABRI leadership is trying hard to 
act in responsible ways.
    1997 also brought drought and major forest fires to parts of 
Indonesia and Malaysia, leaving large swaths of Southeast Asia 
blanketed in smoke and haze, and giving rise to incidents of infectious 
disease. Deployment of Air National Guard C-130's from Wyoming to 
Indonesia to fight these fires made a significant contribution towards 
controlling the fires. Similarly, U.S. Navy medical personnel in 
Jakarta continue to work with Indonesian public health authorities to 
help control outbreaks of Dengue fever. Both have brought the United 
States an enormous amount of good will.
Engagement Dividends in Singapore
    Singapore is another Southeast Asian nation with which the United 
States is comprehensively engaged. Singapore is a strong proponent of 
U.S. military presence in the region. Among the many ties that the 
Department of Defense and other U.S. government agencies maintain with 
Singapore, forces assigned to U.S. Pacific Command train regularly with 
Singapore's defense forces. I met with Singapore's senior defense 
officials on several occasions in 1997, further cementing the bilateral 
relationship.
    American military engagement with Singapore paid off in January 
1998 when Singapore announced its intention to give the U.S. Navy 
access to the pier being built at Changi Naval Base. This pier will 
accommodate our Navy's largest aircraft carriers. Access to this pier 
will help sustain American military presence in the region.
A New Visiting Forces Agreement with the Philippines
    The Republic of the Philippines is a treaty partner and occupies a 
geographically important position in the region. The recently 
negotiated Visiting Forces Agreement (VFA) is critical to continued 
engagement with the Philippine armed forces. We anticipate the 
Philippine Senate will ratify the agreement later this year.
    Notwithstanding current limitations, we strive to maintain contacts 
with the Philippine military. An example of this is the Philippine Army 
joining U.S. Army Pacific in co-hosting the annual Pacific Armies 
Management Seminar (PAMS) in Manila in March 1998. Forty-one countries 
attended, including China, Vietnam, and India.
Defense Cooperation with Australia
    Australia remains a staunch ally, friend, and vocal supporter of 
U.S. presence in Asia. Pacific Command has an excellent military-to-
military relationship with the Australian defense establishment. 
Australia is modernizing and reducing her forces, implemented defense 
efficiencies, and remains dedicated to maintaining interoperability 
with U.S. forces.
Modest Contacts with India
    India is an emerging regional power with great potential in the 
coming century. India has been successful in liberalizing its economy 
over the last five years and has begun to expand ties with East and 
Southeast Asia.
    Though frequently overlooked because of our tendency to focus on 
the India-Pakistan situation, India also looks towards China as a 
principal security concern for the future. These concerns have been 
made clear during recent security discussions with Indian officials. 
For now, however, India and the Indian military are focused inwardly. 
U.S. Pacific Command maintains modest levels of contact with the Indian 
military.
Cooperation on the ``Full Accounting'' Mission
    Cooperation from Vietnam, Laos, and Cambodia in support of Joint 
Task Force Full Accounting's mission continues to be good. Indeed, the 
increased contact brought about by the Prisoner of War/Missing in 
Action (POW/MIA) issue has helped pave the way for further engagement 
with Vietnam and Laos.
                             looking ahead
    I would like to highlight several policy issues affecting the 
future of security and stability in the Asia-Pacific.
    First, despite Asia's economic turmoil, the fundamentals of U.S. 
security policy remain sound. U.S. economic, diplomatic, and security 
interests overlap and require an integrated approach to policy in the 
region. Stable conditions resulting from security will be the 
foundation upon which Asia's economic recovery will be built.
    Second, U.S. forward-deployed forces in Asia remain the linchpin of 
regional security and stability. U.S. Pacific Command participated 
extensively in the Quadrennial Defense Review, which reaffirmed the 
importance of maintaining about 100,000 military personnel in Asia. The 
United States should continue to maintain about 100,000 personnel--but 
more importantly, the capabilities that this number represents--forward 
deployed. This number is a gauge by which nations in Asia measure U.S. 
commitment.
    Third, it is important that the Department of Defense continue to 
build its military-to-military relationship with China. This 
relationship provides a means of dialogue between our nations and gives 
U.S. military leaders insights not otherwise available.
    Fourth, on the Korean peninsula, the aim is to bring about a non-
cataclysmic resolution. Neither a lashout nor a total collapse of the 
North is in U.S. or ROK interests; either would negatively affect 
security and stability on the Peninsula and in the region. Food aid and 
four party-talks are two ways to engage North Korea to achieve the 
peaceful end-state we are after. At the same time, we must encourage 
the ROK to maintain current levels of military preparedness and host 
nation support at agreed-upon levels.
    Fifth, as the nations of Southeast Asia struggle through the 
current financial crisis, it is manifestly in U.S. strategic interests 
to remain engaged with them. Assuring them of U.S. interest in 
Southeast Asia's security and stability ultimately serves long-term 
U.S. economic, diplomatic and security interests. From a military 
perspective, International Military Education and Training (IMET)--
especially for Indonesia, Thailand, Malaysia, and the Philippines--is 
one of our nation's most important means of influencing future leaders. 
I appreciate the dilemmas at stake in this issue, but, especially in 
light of Asia's current financial crisis, restricting IMET limits our 
ability to achieve our nation's goals--a secure, prosperous, and 
democratic Asia-Pacific region.
    Sixth, I would like to highlight the strategic importance of Guam. 
Guam was and is a strategic bridge supporting the deployment of forces 
to the Persian Gulf for military operations against Iraq and would be 
essential to combat operations on the Korean peninsula. As this 
Committee decides how much military infrastructure our nation must 
maintain, it is important that Guam be understood as a vital bridge 
linking CONUS-based forces and U.S. strategic interests in Asia.
    Seventh, an increase in Congressional delegations hosted by U.S. 
Pacific Command on their way to and from Asia was a welcome trend in 
1997, an indication that Congress recognizes the region is important to 
the United States. I urge members of Congress to visit Asia and see for 
themselves the range of economic, diplomatic, and security interests 
the United States has in the region. My Asian counterparts and their 
civilian bosses share this view.
    Eighth, we urge your support for ratification of the U.N. 
Convention on Law of the Sea. Maintaining freedom of navigation is 
critical to regional security and economic development. Some Asia-
Pacific nations assert excessive maritime claims that challenge this 
freedom. Participation in the Law of the Sea Convention will allow us 
to participate in negotiations to resolve these claims, add credibility 
to our stated policies and interpretations, and preserve navigation 
rights vital to executing our missions.
    Ninth, I urge your support for the Overseas Humanitarian Disaster 
and Civic Aid (OHDACA) program, which promotes our engagement 
strategies and disaster response. Last year these funds helped to 
underwrite costs of providing care to Iraqi Kurdish refugees on Guam, 
to fight fires in Indonesia, to conduct demining training in Southeast 
Asia, and to respond to disasters in Vietnam and China. This well-
leveraged program provides important flexibility in crisis response.
    Finally, a comment on ``prudent risk.'' In the ideal world, CINC's 
would both be all wise and would have enough resources to deal with 
every conceivable contingency that might arise. Of course, we don't 
live in that ideal world and our nation's resources are not that large, 
but they are mostly sufficient. Although the world is not free of 
danger and conflict, there is evidence of a ``strategic pause'' 
following the end of the Cold War. In this environment, CINC's must be 
willing to weigh their instincts to avoid risk against the associated 
costs and accept some prudent level of risk. The nation and our 
national leaders must also accept ``prudent risk.''
                        resourcing the strategy
    Our nation's security strategy in the Asia-Pacific region yielded 
tangible results in the past year. The coordinated efforts of many 
people throughout the Department of Defense and other U.S. government 
agencies made this strategy effective. Due to the economic turmoil in 
the region, it is essential that we sustain this strategy of preventive 
defense in the year ahead.
    Trained and equipped combat-ready forces make the strategy 
credible. Adequate resources are essential to sustaining these forces 
and the effectiveness of the strategy.
Force Disposition Today
    The forces assigned to U.S. Pacific Command are adequate to execute 
assigned missions today and are arrayed in two major zones spanning the 
Pacific and Indian Oceans:
  --Approximately 100,000 personnel are forward-deployed in Asia, 
        principally in Japan, Korea, Guam, and Diego Garcia. These 
        forces include the 7th Fleet, 8th U.S. Army, III Marine 
        Expeditionary Force, 5th Air Force, 7th Air Force, 13th Air 
        Force, the 1st Battalion of the 1st Special Forces Group 
        (Airborne) and other joint special operations forces, maritime 
        pre-positioned ships, and Army and Air Force prepositioned 
        stocks.
  --Approximately 200,000 personnel are stationed in Hawaii, Alaska, 
        and the West Coast of the United States. These forces include 
        the 25th Infantry Division, 3rd Fleet, I Marine Expeditionary 
        Force, 1st Brigade of the 6th Infantry Division, 11th Air 
        Force, I Corps Headquarters, and designated units and 
        individuals of the Army, Air Force, Navy, and Marine Corps 
        Reserve, and Army and Air National Guard.
Readiness and OPTEMPO
    Although U.S. forces deployed in the Pacific are ready to conduct 
assigned missions, I would like to bring some readiness issues to the 
Committee's attention.
    U.S. Pacific Command has reported significant deficiencies in six 
of the eight measured functional areas for a ``two major theater wars'' 
scenario: (1) command, control, communications, and computer systems; 
(2) logistics and sustainment; (3) intelligence, surveillance, and 
reconnaissance; (4) mobility; (5) infrastructure; and (6) special 
operations. We have addressed specific deficiencies in these areas 
through the Joint Requirements Oversight Council and the Senior 
Readiness Oversight Council. Although the Department has shifted 
considerable funds into readiness accounts, further investment will be 
required to overcome these deficiencies.
    From the perspective of the U.S. Pacific Command Army, Navy, Air 
Force, and Marine Corps components, personnel shortages are the 
principal readiness concern, though pockets of lower levels of 
readiness exist due to equipment shortage and availability.
  --U.S. Pacific Fleet reported that personnel shortages have affected 
        forward-deployed naval force readiness. Though command 
        attention has caused recent improvements, in the near term (May 
        1998), 93 of 839 Chief Petty Officer billets will be 
        ``gapped.'' Pacific Fleet is currently short over 1,900 sailors 
        in key technical ratings. In addition, there are backlogs in 
        aircraft engines and aircraft intermediate and depot level 
        maintenance, particularly for the S-3B.
  --U.S. Pacific Air Forces (PACAF) reported an Air Force-wide decline 
        in pilot retention, a serious manning problem which cannot be 
        corrected in the near term. PACAF aircraft maintenance 
        statistics indicate the beginning of a decline in aircraft 
        mission capable rates. The PACAF F-16 cannibalization rate is 
        12.8 percent, compared to 6.6 percent in fiscal year 1995, due 
        to lack of spare parts.
  --U.S. Army Pacific (ARPAC) reported shortfalls in infantrymen and 
        ``low-density/high-demand'' specialties such as engineers, 
        communications specialists, intelligence analysts, and 
        mechanics, though these shortfalls will be corrected by the end 
        of the fiscal year. Slower modernization of some lower-profile 
        equipment, such as 2\1/2\-ton trucks, is causing increased 
        maintenance difficulties, though this will be corrected in 
        fiscal year 1999 with the delivery of new vehicles.
  --U.S. Marine Forces Pacific (MARFORPAC) reported shortages of 
        personnel in each major reporting unit, primarily in 
        communications, intelligence, air traffic control, air support, 
        infantry, landing support specialists, and vehicle mechanics.
    Although components have mitigated the impact of these problems in 
the short term, readiness for deployed forces is being achieved at the 
expense of non-deployed forces.
    Maintaining adequate readiness requires predictable funding and 
investments both to bolster deficient areas and operate to meet our 
commitments. In the near term, timely passage of supplemental 
appropriations for unfunded contingency requirements, such as in Bosnia 
and the Arabian Gulf, is critical to sustain readiness. Without this 
relief, OSD has decided that Services will have to absorb costs from 
operations and maintenance accounts to the detriment of readiness.
    OPTEMPO has not been a major problem in U.S. Pacific Command. With 
minor exceptions, U.S. Pacific Command's components are staying within 
OPTEMPO goals established by service headquarters. Units that have 
exceeded or are forecasted to exceed goals include two MARFORPAC 
infantry battalions and a Marine F-18 squadron, PACAF's F-15E squadron 
and one F-16C squadron, and two ARPAC battalions. There are no firm 
indications that the force is ``wearing out.'' However, people are 
working hard and there is no sign of let-up in the workload.
Improvements to Warfighting Capability
    U.S. Pacific Command's resource priorities were submitted to the 
Joint Requirements Oversight Council earlier this fiscal year. We have 
given the highest priority to the readiness of personnel and equipment; 
second, to near-term force improvements and upgrades to existing 
systems; third, to joint, multi-service, and multi-national systems 
which enhance warfighting capability and interoperability with our 
friends and allies; and fourth, to new, long-term recapitalization.
    I would like to highlight two new capabilities that are important 
to U.S. Pacific Command's long-term warfighting capabilities.
  --Theater missile defense.--With North Korea developing long-range 
        ballistic missiles, the differences between theater missile 
        defense and national missile defense are blurring. Nations such 
        as China and India are actively developing new ballistic 
        missiles. There is a need to keep Pacific geographic and 
        geopolitical considerations in mind as we develop missile 
        defenses.
  --Chemical and biological defenses.--North Korea is assessed to have 
        the capability to manufacture, deploy, and employ chemical and 
        possibly biological weapons. It is prudent to assume that North 
        Korea would use chemical weapons in any conflict on the Korean 
        peninsula. In conjunction with U.S. Forces Korea, U.S. Pacific 
        Command has generated a list of near-term fixes to close the 
        gap in our capability to defend against chemical and biological 
        attacks.
Quadrennial Defense Review and National Defense Panel
    U.S. Pacific Command endorses the Quadrennial Defense Review 
modernization strategy, which attempts to balance near-term readiness 
and future capabilities. The command also supports the National Defense 
Panel's conclusion that breadth of capability will be as important as 
depth for long-term readiness and modernization and that reductions in 
infrastructure are necessary to help fund modernization.
Investments in People
    Investments in people and training are as important as new 
technologies. Adequate funding for compensation, medical, retirement, 
housing and other quality-of-life programs is necessary to attract and 
retain the skilled personnel upon which our forces depend.
    Readiness to respond rapidly in support of military contingency 
operations should be the principal guide as the military health system 
is reformed.
    Training and force protection are quality-of-life concerns as well 
as readiness issues. U.S. Pacific Command has developed plans of action 
to reduce vulnerability to terrorism and is steadily working 
requirements through the Services.
    Service military construction plans provide appropriately for 
warfighting infrastructure and improvements to quality-of-life.
Asia-Pacific Center for Security Studies
    The Asia-Pacific Center for Security Studies (APCSS) is rapidly 
becoming a key part of U.S. Pacific Command's engagement strategy. In 
January 1998, APCSS hosted a timely conference on economics and 
security in Asia, bringing together experts from business, academia, 
and the U.S. military to discuss the origins of Asia's financial crisis 
and the implications for security and stability. Similar conferences 
have examined peacekeeping, humanitarian support, and environmental 
issues.
    The conference program complements the Center's primary academic 
organization--the College of Security Studies--that draws together 
future military and civilian leaders from around the region to explore 
national perspectives on regional security issues. The Asia-Pacific 
Center is an excellent investment in regional security.
New Headquarters
    A new headquarters building for U.S. Pacific Command staff is 
required. The headquarters facility the staff is in today is a 45-year 
old hospital building that has deteriorated beyond the point of 
maintainability. The engineering estimate is for $75 million for repair 
alone. To meet the demands of 21st century operations this command must 
have a modern, efficient facility, one that our taxpayers can be proud 
of, and one they can afford. Funding is in the FYDP for this 
headquarters building.
                               conclusion
    Last year I concluded that while not conflict-free, the Asia-
Pacific region was at peace. This year the region is closer to the 
margins of general peace. The financial crisis could lead to broader 
economic and security problems.
    As military professionals, we are paid to be pessimists and 
expected to keep our powder dry. However, this charter does not keep us 
from being optimists about the future of the Asia-Pacific region. I am 
convinced that by working in a forehanded way and respecting legitimate 
views, and by maintaining a position of strength, we can best 
contribute to peace, stability, and prosperity.
    The continued support of Congress and the American people in these 
endeavors is vital and appreciated. With your support and the 
cooperation of our friends and allies, the United States will continue 
to successfully advance our national interests in the Asia-Pacific 
region.
                                 ______
                                 
                                annexes
               annex a. joint task force full accounting
    Joint Task Force Full Accounting's (JTF-FA) mission is to achieve 
the fullest possible accounting of Americans still unaccounted for as a 
result of the conflict in Southeast Asia. During 1997, JTF-FA completed 
250 field investigations and 48 excavations, and repatriated 31 sets of 
remains associated with unaccounted-for Americans. In 1998 to date, 
there have been over 21 remains repatriations.
    During fiscal year 1998, JTF-FA will conduct eleven Joint Field 
Activities (JFA's), five each in Vietnam and Laos, and one in Cambodia, 
to investigate, excavate, and recover remains, forensic evidence, or 
other information on unaccounted-for individuals. These field 
activities usually last about 30 days and involve as many as 100 U.S. 
personnel in Vietnam and 40 U.S. personnel in Laos. In Cambodia, the 
number of U.S. personnel varies depending on the mission.
    While JTF-FA funding lines run out this fiscal year, the task does 
not. Funding for JFA's is needed throughout the FYDP. In particular, an 
additional $5.54 million is required in fiscal year 1999 to complete 
all ten scheduled JFA's. The Department of the Navy has this issue as a 
high priority for funding.
    As of the beginning of fiscal year 1998, the number of unaccounted-
for individuals JTF-FA is investigating stood at 364--275 in Vietnam 
and 89 in Laos. These numbers may change if scheduled field activities 
turn up additional information. There are 143 excavations or recovery 
operations to complete; these may yield information on up to 278 
unaccounted-for individuals--94 in Vietnam, 170 in Laos, and 14 in 
Cambodia.
    Cooperation from host nations continues to be good. Laos and 
Vietnam completed two very successful periods of unilateral 
investigations between August 1997 and January 1998. The Laotian 
government recovered remains possibly associated with an unaccounted-
for American during one of these unilateral investigations. Vietnam 
continues to cooperate on the President's four key measures of 
progress: resolving discrepancy cases and live sightings, recovering 
and repatriating remains, implementing trilateral investigations with 
Laos, and providing POW/MIA documents.
    Trilateral operations also continue to achieve good results. 
Vietnamese witnesses have provided outstanding assistance to JTF-FA in 
Laos and Cambodia. Lao cooperation with JTF-FA is improving and the Lao 
government recently agreed to provide oral history questionnaires to 
senior level officials to determine whether they may have any relevant 
information on the unaccounted-for personnel.
                                 ______
                                 
           annex b. u.s. pacific command counterdrug efforts
    U.S. Pacific Command is committed to supporting the President's 
National Drug Control Strategy. U.S. Pacific Command's counterdrug 
efforts include: interdicting the flow of cocaine north from South 
America to Mexico's west coast, providing training to Thai and 
Malaysian counterdrug units, and providing helicopter support to 
Operation Wipeout, the U.S. Drug Enforcement Agency's marijuana 
eradication effort in Hawaii.
Eastern Pacific
    Joint Interagency Task Force (JIATF) West, U.S. Pacific Command's 
sole counterdrug agent, targets shipments of cocaine moving north by 
sea from South America to the western coast of Mexico. Pacific Command 
forces seized 2.4 metric tons of cocaine during a fiscal year 1997 bust 
involving go-fast boats.
    Currently, U.S. Pacific Command maintains an aperiodic ship 
presence in the Eastern Pacific. JIATF West analysis indicates an 
increased ship presence, with supporting maritime patrol aircraft, is 
needed to fully cover the cocaine arrival zones off the west coast of 
Mexico.
Southeast Asia
    Thailand receives the bulk of U.S. Pacific Command's counterdrug 
support. JIATF West conducts eight BAKER TEPID exercises annually in 
Thailand. These exercises provide training to Thai counterdrug forces 
in small unit tactics, leadership, marksmanship, jungle navigation, and 
combat lifesaving. JIATF West also completed construction of the third 
and final counterdrug command center in southern Thailand, enabling 
Thai forces to more efficiently coordinate their counterdrug efforts. 
Additionally, JIATF West routinely deploys intelligence analysts to 
provide analytical support to the Drug Enforcement Agency (DEA) in 
Bangkok.
    Although Malaysia has a robust counterdrug capability, it is 
acknowledged as a transit country for heroin destined for the United 
Sates. In August 1997, JIATF West conducted the first BAKER MINT 
counterdrug training exercise with Malaysia. U.S. Pacific Command 
forces provided valuable combat lifesaving training to Malaysian 
counterdrug personnel.
    There is great potential for counterdrug cooperation with Vietnam. 
A counterdrug Letter of Agreement with Vietnam was negotiated in 1997 
and is expected to be signed in 1998. The U.S. Country Team believes 
that Vietnamese support for an increased U.S. role in counterdrug 
operations is strong.
Operation Wipeout
    U.S. Army Pacific provides helicopter support to Operation Wipeout, 
the Drug Enforcement Agency's marijuana eradication effort in Hawaii. 
To date in fiscal year 1998, U.S. Army Pacific has assisted in the 
eradication of over 22,000 marijuana plants.
                                 ______
                                 
                     annex c. military construction
    Our top military construction requirements remain warfighting 
infrastructure and quality of life projects. Military construction and 
infrastructure are key components of Pacific Command's readiness. Much 
of the infrastructure is old and needs replacement--this is a necessary 
investment. The fiscal year 1999 U.S. Pacific Command Military 
Construction program contains 47 projects worth about $550 million 
(Figure 1).
    The Host Nation Funded Construction (HNFC) program is an excellent 
example of burden-sharing by Japan and Korea. The ``Host Nation 
Support'' line item in the fiscal year 1999 budget is specifically 
fenced for planning and design funds (P&D), which are the U.S. 
investment in this program--only 1.5 percent of the approximately $1 
billion spent by the host nations. The return on this investment is 
more than 60 to 1. The Army's role as the executive agent for 
construction in Japan and Korea is critical to provide quality 
facilities. The P&D funds which are in the Army budget are critical 
because the Governments of Japan and Korea do not pay for U.S. 
Government oversight which ensures the facilities meet U.S. operational 
requirements and quality and safety standards.
    The majority of the P&D funds appropriated support the HNFC program 
in the Pacific. Cuts in the HNFC P&D funds jeopardized the U.S. 
government's ability to sustain its surveillance and design 
responsibilities in this vital program. The Army completed one-time 
cost savings measures that cannot be continued for a second year and 
still oversee the equivalent construction work of past years. It is 
imperative that sufficient Host Nation Support funds be provided 
($20.45 million in the Army budget and $18.45 million for the Pacific 
theater). Not doing so risks allowing the Japanese and Korean 
governments to reduce their contribution because we will be unable to 
obligate all the funds they provide.
    In addition to the construction provided by the Republic of Korea 
(ROK), Congress has funded essential facilities in Korea over the past 
3 years. New barracks, dining facilities, and support facilities have 
made a significant difference to the soldiers and airmen stationed in 
Korea. We still need military construction dollars in excess of the 
$113 million annual contribution by the ROK. We request your support 
for $59 million in fiscal year 1999 for 6 barracks projects.
    Throughout the Pacific we continue to correct the housing problem 
that our military families have endured for so long. The completion of 
replacement housing is encouraging to our Service members and families. 
This is a significant factor in the satisfaction and retention of our 
career personnel. Much of the construction budget for fiscal year 1999 
is dedicated to improving the family housing and barracks in Alaska, 
Hawaii, Korea, and California.
    Our en route infrastructure is reaching the end of its service 
life, particularly our aging Petroleum-Oil-Lubricants (POL) system. 
Many facilities that were constructed during the 1940-1950 time frame 
are in need of major repair or replacement. Real property maintenance 
accounts for essential facility repairs are ``must pay'' costs that 
continue to escalate. Readiness is degraded by hollow infrastructure 
when our facilities fall into disrepair, or when we shift funds to 
perform expensive incremental or emergency maintenance on those 
facilities.

Figure 1 to Annex C.--Fiscal year 1999 U.S. Pacific Command military 
construction and family housing

                                                              Dollars in
                                                                millions
Warfighting Infrastructure:
    Consolidated Munitions Facility, Eielson AFB, AK..............  $4.4
    Replace Hydrant Fuel System, Elmendorf AFB, AK................  19.5
    Special Warfare Unit Facility, NAVACTS Guam...................   5.5
    Waterfront Consolidation Facilities, NAVACTS Guam.............   4.8
    Repair Airfield Pavement, Hickam AFB, HI......................   5.9
    Central Receiving Facility, Naval Station Pearl Harbor, HI....   9.7
    Elec Distribution System Upgrade, Naval Station Pearl Harbor, 
      HI..........................................................  18.2
    Engineering Management Building, Naval Shipyard Pearl Harbor, 
      HI..........................................................  11.4
    Fire Station, NAVCAMS EASTPAC, Honolulu, HI...................   2.0
    Sewer Outfall Extension, PWC Pearl Harbor, HI.................  22.9
    Steam Condensate Return System, PWC Pearl Harbor, HI..........   6.1
    Power Plant--Roi Namur Island, Kwajalein......................  12.6
    Multipurpose Missile Test Facility, Kwajalein.................   4.6
    Airframes Facility Mods (F/A-18), NAS Lemoore, CA.............   1.5
    Hangar 4 Mods (F/A-18 E/F), NAS Lemoore, CA...................   5.4
    Training Facility Addition, NAS Lemoore, CA...................   4.3
    Weapons Assembly Facility Improvements, NAS Lemoore, CA.......   9.4
    Submarine Support Facility, NSB San Diego, CA.................  11.4
    SOF Amphibious Operations Facility, NAB Coronado, CA..........   3.6
    Missile Magazines, NAWCWD China Lake, CA......................   3.2
    Central Vehicle Wash Facility, Ft. Lewis, WA..................   4.7
    Close Combat Tactical Trainer Building, Ft. Lewis, WA.........   7.6
    Consolidated Fuel Facility, Ft. Lewis, WA.....................   4.0
    Tank Trail Erosion Mitigation--Yakima, WA.....................   2.0
    Security Facility Upgrades, Bremerton, WA.....................   2.8
    Hospital Addition/Alteration, Bremerton, WA...................  28.0
    Clinic/Warm Warehouse Replacement, McChord AFB, WA............  20.0
    Disease Vector Ecology Center Replacement, NSB Bangor, WA.....   5.7
Quality of Life:
    Replace Military Family Housing Phase 3 (46 Units), Eielson 
      AFB, AK.....................................................  12.9
    Elementary School Addition and Renovation, NAVACTS, Guam......   8.6
    High School Addition and Renovation, NAVACTS, Guam............   4.5
    Replace Military Family Housing (64 Units), Schofield 
      Barracks, HI................................................  14.7
    Whole Barracks Complex Renewal, Schofield Barracks, HI........  47.5
    Bachelor Enlisted Quarters, Kaneohe, HI.......................  27.4
    Bachelor Enlisted Quarters Modernization, NSB Pearl Harbor, HI   8.1
    Replace Military Family Housing Phase (150 Units), Naval 
      Complex Oahu, HI............................................  29.1
    Whole Barracks Complex Renewal, Camp Casey, Korea.............  13.4
    Whole Barracks Complex Renewal, Camp Castle, Korea............  18.2
    Whole Barracks Complex Renewal, Camp Humphreys, Korea.........   8.5
    Whole Barracks Complex Renewal, Camp Stanley, Korea...........   5.8
    Dormitory, Kunsan AB, Korea...................................   6.0
    Dormitory, Osan AB, Korea.....................................   7.5
    Bachelor Enlisted Quarters, MCB Camp Pendleton, CA............  15.8
    Bachelor Enlisted Quarters, MCB Camp Pendleton, CA............  12.4
    Bachelor Enlisted Quarters, MCAS Miramar, CA..................  29.6
    Bachelor Enlisted Quarters, San Clemente, CA..................   8.4
    Replace Military Family Housing Phase (162 Units), NAS 
      Lemoore, CA.................................................  30.4
                                 ______
                                 
                  annex d. security assistance program
    The U.S. Pacific Command strongly endorses a strong and responsible 
Security Assistance program. We use each element of the Security 
Assistance Program to support our regional strategy and to maximize the 
return on our investment. The U.S. Pacific Command's fiscal year 1997 
Foreign Military Sales (FMS) were over $2.6 billion. Asia's financial 
crisis, decreases in defense budgets and foreign competition are likely 
to reduce sales in fiscal year 1998. Foreign Military Financing (FMF) 
is small in the Pacific Area of Responsibility. In fiscal year 1997 
only two countries received funds, consisting of grants for demining: 
Cambodia ($1 million) and Laos ($1 million).
    The International Military Education and Training program (IMET) is 
one of our most cost-effective programs to promote peace, security, 
democracy and interoperability. IMET can pay immediate dividends, but 
the long-term returns have even more importance, promoting long-term 
professional association with future military and political leaders. 
Many key regional leaders are IMET graduates and are strong supporters 
of U.S. involvement in the region. To ensure our regional objectives 
are achieved, we must continue the strong IMET programs that we have 
been providing to friendly countries in the region.
                                 ______
                                 
           annex e. asia-pacific center for security studies
    Accomplishments.--The Asia-Pacific Center for Security Studies 
(APCSS), established in September 1995, continues to play an important 
role in the U.S. Pacific Command's theater strategy. The APCSS provides 
the opportunity and the environment to foster understanding and 
cooperative approaches to security in the Asia-Pacific region. To date, 
the APCSS has held four 12-week classes in the College of Security 
Studies with 126 future military and civilian leaders from 31 Asia-
Pacific countries. The APCSS has also conducted 12 conferences with 
1,102 current military and civilian leaders from 50 countries. These 
multilateral approaches provide superb venues for interaction between 
key leaders from the Asia-Pacific nations.
    Facilities.--The APCSS is temporarily located in commercial 
facilities in Honolulu, Hawaii. Efforts are in progress to renovate an 
existing government building for use by the Center. This would provide 
a more cost-effective permanent facility for the Center within 
proximity to billeting and messing accommodations for attendees.
    Legislative Policy Issues.--Passage of the Waiver of Charges 
provision in the Fiscal Year 1998 Defense Appropriations Act was 
crucial to attracting participants to the Center. It acts as an 
incentive for countries to participate by waiving tuition, or 
``platform,'' charges, as well as authorizing attendance costs of 
participants from approved Title 10 countries to be waived; this 
mirrors legislation granted to George C. Marshall European Center for 
Security Studies. Identical legislation was submitted as part of the 
fiscal year 1999 Omnibus Bill to secure permanent authorization. This 
provision imposes no increase in DOD budgetary requirements, since 
costs are paid with appropriations already available to the APCSS.
                                 ______
                                 
    annex f. command, control, communications, and computers (c\4\)
    The vast expanses of the U.S. Pacific Command's area of 
responsibility stress theater C\4\ infrastructure. The fielding of 
updated equipment at all organizational levels needs to continue, to 
include space assets. We also continue to build an information 
assurance capability, including: alternative paths, common joint 
hardware, security management tools, and training. Finally, we are 
pursuing improved capability to provide exchange of information with 
our coalition partners.
    Pacific Command is pursuing C\4\ interoperability throughout the 
theater under an umbrella effort called PACNET. This past year theater 
components adopted common automation software. By June 1998 Pacific 
Command's Joint Task Force commanders will also migrate to this 
standard. In the future, Pacific Command will integrate commercial and 
military communications systems.
    We are concerned about spectrum reallocation and potential charges 
for spectrum use in the United States. Other countries are often 
influenced by our policy. This has already led to reallocations and 
potential charges for exercises in Australia and Singapore. Further, 
systems that have been developed with old frequency allocations in mind 
may have to be retrofitted at a yet to be determined cost. Limitations 
imposed on the use of the Patriot surface-to-air missile system and the 
Joint Tactical Information Distribution System in Korea and Japan are 
examples of why we need a national spectrum strategy. This strategy 
should consider our national defense requirements and strive to 
convince other nations to align usage of their spectrum as closely as 
possible with ours for critical military systems.

    Senator Stevens. Well, we do thank you very much, and I 
regret that others are not here this morning. The two of us 
visit you so often it is almost--we ought to have this visit in 
our office, but it is good to have a record so others might see 
it if they desire to do so.
    You did mention China a little, and you mentioned the 
Indonesia situation a little. In view of what happened the day 
before yesterday, the riots in Indonesia, have you changed your 
planning as far as the presence of our forces in that region?
    Admiral Prueher. No, sir, we haven't changed our planning. 
We are doing a lot of work with Indonesia, both the Treasury 
Department and we are staying in communications with them.
    We have only periodic forces, and those numbers are very 
small that are in Indonesia, but our planning and the ships in 
the area have not changed as a result of the recent riots in 
Indonesia. Demonstrations in Indonesia is a better word for it.
    We stay abreast, we monitored that with the country team, 
we monitored that with the ABRI, with the Indonesian military, 
and stay in touch with them, but we have not redeployed any 
forces as a result of what's gone on there, sir.

                   impact of Persian Gulf deployments

    Senator Stevens. The deployments to the Persian Gulf 
region, have they strained our security in the Pacific as a 
whole?
    Admiral Prueher. As you know so well we have deployed the 
Indy carrier battle group to the Persian Gulf region, as well 
as a ARG, MEU, and a marine expeditionary unit, as well as some 
additional prepositioning ships. We have also gone from five to 
seven prepositioning ships in the gulf.
    What has occurred are opportunity costs for interacting 
with the other nations in the western Pacific that we would 
normally do with the ships, the Indy carrier battle group, and 
with the marine amphibious ready group, as well as the marine 
expeditionary unit.
    The other part that has been stressed is our ability to 
respond to a crisis in Korea, and we have backfilled that by 
deploying some F-15's from Alaska, a squadron of F-15's from 
Alaska to Korea, and we have deployed also two AC-130 gun 
ships, but our ability to respond to a crisis in Korea, should 
it come up, is stressed.
    However, in the realm of prudent risk and what we think is 
the likelihood of a conflict in Korea, it seems like a prudent 
risk to take right now in order to respond to what's going on, 
our Nation's response in the Middle East, sir.
    Senator Stevens. Iran is still within your area, is it not?
    Admiral Prueher. No, sir, Iran is in the Central Command 
AOR.
    Senator Stevens. I thought you went to the eastern side of 
the gulf.
    Admiral Prueher. We go to the eastern coast of Africa. 
There is a right-angled chunk out of the gulf that belongs to 
CENTCOM that goes from Somalia East and then north to the 
intersection between India and Pakistan.
    Senator Stevens. I have two last questions.
    Admiral Prueher. Yes, sir.
    Senator Stevens. One is, we earmarked a portion of the 
Nunn-Lugar money to see to it that the Navy, under your 
command, would have an opportunity to work with the Russian 
forces and their Far East to bring about a reduction in nuclear 
problems there----
    Admiral Prueher. Yes, sir.

                      Cooperative threat reduction

    Senator Stevens [continuing]. With regard to the 
powerplants and some of the decommissioned vessels, and also to 
a certain extent, in the overall nuclear area. How is that 
working now?
    Admiral Prueher. Senator, I think it is working well. The 
cooperative threat reduction to which the committee put $35 
million against is being run from the cooperative threat 
reduction office in OSD and the Joint Chiefs. CINCPAC, as our 
nuclear agent, has been working with them.
    The status of that is the State Department approvals have 
been acquired. There are contracts being announced that would 
go to both Russia and the Far East, and United States 
contractors in the Far East, and this is awaiting SECDEF 
approval to spend the money.
    We expect that money to be obligated within the next 2 
months, and it is all scheduled to be spent in the Russian far 
east for the purposes of that you described, to try to take 
care of the nuclear powerplants and the decommissioning of 
Russian ships.
    So it is tracking well right now. We are watching it very 
carefully, and I think it's on track for the purposes that the 
committee put the money.
    Senator Stevens. A year ago it did not seem that the 
Russians were able to put a high priority on those activities, 
in view of the problems of pay, and relocation of their forces, 
and downsizing of their systems, and we were very worried about 
the number of nuclear units, particularly on some of the 
decommissioned submarines.
    Admiral Prueher. Yes, sir.
    Senator Stevens. We made that money available last October. 
It's not been released yet, right?
    Admiral Prueher. No, sir; it hasn't been released yet, but 
I think it will get spent well and spent for the correct 
purposes, but it has not been released yet, sir.
    Senator Stevens. Have we at least had an opportunity to 
inventory the size of the problem?
    Admiral Prueher. Yes, sir.
    Senator Stevens. I am getting ready to markup another bill, 
and we do not have any indication from your Department that any 
additional moneys are necessary. They have not spent what we 
have made available so far.
    Admiral Prueher. The OSD, and we owe the committee a 
response, and I will get back as soon as we are through here to 
make sure that response gets to the committee quickly, in time 
to use it for the next markup, sir.
    The problem is a real one, the Russians are unable to 
respond to it, or appear to be unable to respond to it, the 
help is needed, and I believe it is working in the right way. 
If it is different than that I will get back to you, sir.
    Senator Stevens. Now, the admiral we met at Vladivostak was 
transferred to Moscow, and he has a really elevated position--
--
    Admiral Prueher. Yes, sir.
    Senator Stevens [continuing]. As I understand it.
    Admiral Prueher. That's Admiral Kuriatov, who was the 
Pacific Fleet Commander, who is now the chief of staff of the 
Russian Navy.
    Senator Stevens. He was quite interested in this when we 
discussed the prospect with him. Have we followed through with 
him at all?
    Admiral Prueher. Yes, sir, we have. We have been in contact 
with him through CINCPAC and also through the CNO's office, and 
I will provide the details of that to you, sir, to make you 
more comfortable with the contacts, and make me more 
comfortable with the contacts.
    Senator Stevens. I was very uncomfortable with the sight of 
submarines sinking in their berths.
    Admiral Prueher. Yes, sir.
    Senator Stevens. Those were nuclear submarines.
    Admiral Prueher. It is a real problem, sir.
    Senator Stevens. I will get back to some more provincial 
things later. Senator Inouye.

                        Pacific force reductions

    Senator Inouye. Thank you, Mr. Chairman. About 10 years ago 
we decided that the cold war had ended, and the Soviet threat 
had disappeared, and accordingly we began reducing our force 
levels throughout the world.
    Then about 6 years ago, soon after we closed Subic, the 
chairman and I took a strange trip throughout your area of 
responsibility, at the suggestion of Defense and State, to meet 
with the chiefs of state and the chief military officers of 
countries like Australia, Indonesia, Malaysia, Thailand, the 
Republic of Vietnam, Philippines, People's Republic of China, 
Korea, Taiwan, and Japan, and the question we asked was a very 
simple one, do you want the United States to remain in this 
area or do you want us to leave. The answer in every capital 
was a clear and unmitigated, please do not leave.
    Senator Stevens. Even Beijing.
    Senator Inouye. Beijing and the Republic of Vietnam. Some 
cited the situation of Spratly, where six nations are now 
claiming these small islands because they have found oil, and 
each nation with forces numbering up to a battalion.
    Others cited the possibility of a massive arms race, 
involving the Japanese, and the Chinese, and the Koreans, and 
there were many, many reasons there. But yet we have reduced 
our Pacific forces by approximately 20 percent since that time, 
numbering over 25,000, and there is a possibility of further 
reductions in the force level. Now, what are your thoughts on 
that?
    Admiral Prueher. Senator, I think if you surveyed the same 
countries again you would find the same answer, that the 
nations there universally, and I think the PRC might demur on 
their answer a little bit right now, but the nations want the 
U.S. presence, and they want forward deployment, to see the 
commitment of the United States to the Asia Pacific region, and 
the security in that region.
    Our forward deployed forces, which number about 100,000, 
and they are represented by the capabilities of the 7th Fleet, 
the 3d Marine Expeditionary Force, the 5th and 7th Air Forces, 
the first of the 1st Special Forces Group, and the 8th United 
States Army in Korea, are manifestations, probably the most 
visible manifestations of United States commitment to security 
in the Asia Pacific region. They bring a great balance to the 
region and a sense of security that has allowed the region to 
prosper overall. They want that.
    Further, we have recently been through the quadrennial 
defense review, and reaffirmed there, and reaffirmed by the 
President's Secretary of State, the Secretary of Defense, the 
commitment to keep about 100,000 troops in the Asia Pacific 
region.
    We need them there to do this preventive defense that we 
talked about earlier, if we're going to be forehanded and 
farsighted, and be able to handle problems while they are 
modest, instead of allowing them to grow.
    Our presence is desired. I think our forces are doing it in 
a good way, as Ambassadors, as well as enforcers, not only for 
the United States, but working as partners with the nations in 
the region.

          International military education and training [IMET]

    Senator Inouye. Admiral, I am glad that you pointed out in 
the opening remarks that six of the seven largest armed forces 
in the world are located in your area of responsibility, in the 
Pacific, and that some of the more troublesome areas are in 
your area of command, such as Korea, and the possibility of 
problems in Southeast Asia, the present problems in Indonesia. 
What are your thoughts on IMET?
    Admiral Prueher. Thank you for asking that, sir. The IMET 
program, which is the international military education and 
training, is a fund by which we are able to work with the 
militaries of other nations, it is administered by the State 
Department, but it works with the militaries of other nations, 
where they can get exposed to democracies and democratic 
principles.
    In my opinion, it is one of the highest payoff, most highly 
leveraged, for relatively small amounts of money, the amounts 
of money are in the categories of $400,000, sometimes $4.16 
million, in the case of Thailand, which is the largest one in 
our AOR. They have huge payoffs with training and working with 
the military in these nations.
    I would like to give an example using Thailand because we 
have had IMET training with Thailand for quite a while. In 
Thailand, they have been a good ally for us, they have allowed 
basing for us, no questions asked, when we wanted to fly B-52's 
through there, to work in the Middle East. We have trained with 
the Thais, we have good political and military relationships 
with the Thais.
    General Mongkong is the supreme commander of the Royal Thai 
armed forces, and he, about 9 months ago, when the government 
was falling, the prime minister of Thailand was being 
disenfranchised in Thailand, General Mongkong, who is a very 
powerful person, had the opportunity and a lot of pressure from 
outside, to do a military take over, to declare perhaps marshal 
law, and to run the country with the military.
    Owing to the fact that he had been IMET trained, among 
other things, as well as the fact that he is a Thai patriot, he 
resisted these pressures and supported free elections in 
Thailand, in which Prime Minister Tron Luc Pi was elected, and 
now Thailand, as we discussed earlier, is working very hard to 
come out of their economic crisis.
    They have military security in Thailand, and they are a 
staunch United States ally. That is one example of one of the 
payoffs of IMET.
    One of the costs of IMET, I think, is in Indonesia, where 
in 1992, IMET was canceled with Indonesia by the Congress, and 
in my view, if we disapprove of what is going on in a nation, 
that is the wrong answer. We need to try to educate that 
country, the military of that country in democratic principles. 
I think we should be contacting them, not isolating them, and 
in 1996, Congress repassed expanded IMET for Indonesia, and in 
1998, Indonesia has accepted it. So that is back on a better 
track than it was. IMET is a very valuable tool.
    Senator Inouye. As you noted in your response, this program 
is under the jurisdiction of the State Department.
    Admiral Prueher. Yes, sir.
    Senator Inouye. The chairman has suggested that we should 
consider placing this under the DOD account. I realize this is 
a policy matter, and if you do not wish to respond, I 
understand. Do you think that is a good idea?
    Admiral Prueher. My opinion is that it would work well 
under DOD account, also, sir, and it works all right the way it 
is. I think it might be more cleanly administered if it were a 
DOD account, sir.

                        Ford Island development

    Senator Inouye. Finally, may I just note my pleasure in 
receiving the word of your support of the Ford Island 
development, because I say so not only as a Senator from 
Hawaii, but as a member of the Milcon Subcommittee and this 
committee.
    As you know, the dollars available for military 
construction is dwindling, and this, I believe, may be the 
model for things to come in the United States, where the 
private sector can be involved in----
    Admiral Prueher. Yes, sir.
    Senator Inouye [continuing]. Military construction. So I 
commend you and your command, and I look forward to it becoming 
a real thing.
    Admiral Prueher. Thank you very much, Senator.
    Senator Stevens. Thank you.
    Senator Cochran.
    Senator Cochran. Mr. Chairman, welcome.
    Senator Stevens. Thank you, Senator Cochran.

                          North Korean threat

    Senator Cochran. I am glad to see you again. One of the 
troubling areas in your region is the North Korean situation, 
there's an indication of instability there, in terms of the 
economy, and food shortages, and all the rest, and in spite of 
those difficult economic challenges, we see the North Korean 
military continue to, according to reports, develop offensive 
capabilities like the Nodong missile, and even to the extent 
that it may be deployed now, or fielded, rather than just under 
development.
    What can you tell us in this hearing about the nature of 
the threat to United States forces and our ships in the region, 
because of North Korea's continued upgrading of its ballistic 
missile capability?
    Admiral Prueher. Senator, the Scud missiles that North 
Korea exports and develops, as well as the Nodong missile 
create a real potential threat to our forces, as well as those 
of our allies in South Korea.
    These missiles, I am trying to stay at the unclassified 
level here, do not pose--it would be only a random threat to a 
ship, but if one draws a circle with the radius of the range of 
those missiles, they do create a problem for our forces in 
South Korea.
    So as we try to work toward reconciliation in North Korea, 
which I am encouraged about the transition of the Kim Dae Jung 
government in South Korea, the continued investment of North 
Korea in exercises and of developing this missile capability 
stays a high concern of ours that we watch very closely.

                            Missile defense

    Senator Cochran. Do you have adequate capability to defend 
the assets in your area of operations against ballistic missile 
attack?
    Admiral Prueher. The fear of missiles to defend against is 
a key issue that we need to work. The defense that we have is 
not as adequate as we would--it is not as robust as we would 
like. We have some capability to defend. We would rather have 
more.
    We keep a close eye on both the likelihood of a ballistic 
missile attack and the ability to defend. I am comfortable 
right today with that risk reward ratio; however, the incentive 
to launch a ballistic missile attack could come up in a hurry, 
in which case we would have an inadequate ability to respond to 
it, sir.
    Senator Cochran. One specific statement that you made in 
your testimony is, and I quote, ``With North Korea developing 
long-range ballistic missiles, the differences between theater 
missile defense and national missile defense are blurring,'' 
and you say that ``we need to keep Pacific geographic and geo-
political considerations in mind.'' What exactly do you mean by 
that?
    Admiral Prueher. Good question, sir. The national missile 
defense is important to all of us. The physics of creating a 
national missile defense are inhibited by the Ballistic Missile 
Treaty, and the political ideas, I think, of the Anti-Ballistic 
Missile Treaty are to put some restraint on what Russia and the 
United States do in the missile defense area.
    I think we have made great strides in theater ballistic 
missile defense. The altitudes of theater ballistic missiles 
and the speeds of theater ballistic missiles are less than 
those of the strategic missiles. So they are not completely 
separate issues.
    There are politics entwined in this, there are laws of 
physics entwined in this. I think the proper course for us to 
do at this point is to work on theater ballistic missile 
defense to the maximum extent that we can, and there is a lot 
of tradeoff, and there is a lot of benefit we can get that will 
be applicable in national missile defense if we become able to 
really work hard on that one, sir.

                        Amphibious ready groups

    Senator Cochran. One of the pressures on your assignment is 
to make sure you have the amphibious mobility in a huge 
geographical area----
    Admiral Prueher. Yes, sir.
    Senator Cochran [continuing]. To deal with threats as they 
may arise. From an operational point of view, how valuable are 
the amphibious ready groups to ensuring this capability?
    Admiral Prueher. They are of tremendous value, sir. Our 
AOR, because of its size, and because of the largely maritime 
nature, the ability to move position, carrier battle groups, as 
well as amphibious groups to the right place at the right time, 
and, again, try to outguess the situation on the part of the 
commanders in the region, is very important. This ability to 
respond is critical.
    Senator Cochran. How would a reduction in the number of 
amphibious ready groups affect your warfighting plans?
    Admiral Prueher. It would have a negative impact on it, 
sir. We have those amphibious ready groups deployed worldwide, 
some east coast, some west coast, and then, of course, we have 
one that is home ported in Japan. In our AOR we need all that 
we have, and I think it would be said by the other CINC's as 
well.
    Senator Cochran. Thank you very much.
    Admiral Prueher. Thank you, Senator Cochran.
    Senator Stevens. Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Hello, Admiral, it is nice to see you.
    Admiral Prueher. Hi, Senator, it is good to see you again.
    Senator Domenici. We did have a rather exciting trip that 
preceded our visit with you at your command, and I remember it 
vividly, and the exciting part was North Korea. A few things 
have happened since then, but probably the most important thing 
have been the big changes in South Korea----
    Admiral Prueher. Yes, sir.
    Senator Domenici [continuing]. Which may have a longer and 
more lasting effect on the North Korean relationship than 
things we were doing before this new president.
    First, I want to compliment you, while I did not get a 
chance to read your statement, I find your analysis of things 
to be good and so credible, and in conformity of that, I will 
read it. I just made a note to take it with me so that when I 
have time I can read it. But my staff did point out some areas 
in it that I want to commend you on.
    First of all, I want to commend you for the frankness that 
you have exhibited today, particularly on pages 24 and 26, 
regarding readiness. We are having a lot more difficulties with 
others in the military to get such frank discussions of 
readiness and quality of life.
    I am going to submit to you, and I hope it is not too 
burdensome, but five questions with reference to readiness and 
the quality of life.
    In all, with the subquestions, there might be 14 or 15, but 
I think with what we are beginning to learn from our trip to 
the Middle East about morale and the constant return to an area 
10, 15, 8 times, or 9, by military men and women, who may soon 
decide that they do not know what they are in there for, some 
of these have to do with quality of life, I hope if you do not 
have information about the quality of life that you will tell 
us you do not. I think these are important. I am going to leave 
them in the record, you can answer them.
    Admiral Prueher. Thank you, sir.
    Senator Domenici. Mr. Chairman, I might complain to you 
through this committee about the previous request that we have 
made of all three of the military branches with reference to 
quality of life, readiness, and the like, and only one has 
bothered to answer the questions at all, and that was the 
Marines, and they only answered with reference to the exit 
polling that they took.
    I would surely like to ask your staff, the committee staff 
again, to go back and repeat those questions and see if they 
cannot give us their in-depth quality of life and exit poll.
    Senator Stevens. That will be done. With those answers, I 
will have another hearing.

                        Pacific economics crisis

    Senator Domenici. Thank you very much. Let me talk a minute 
about economics. When my friend asked for your views on IMET, I 
do not hear too well out of this ear, and I thought he said 
IMF, and I was very excited, because I thought you had 
commented about IMF, and perhaps you were going to elaborate on 
it.
    I guess whether you want to give us your view on IMF 
refurbishment or not, but you have already said that the job of 
your area of responsibility is made much more difficult by some 
of the fragile economic situations in the countries that 5 
years ago were in pretty good shape, and were growing and 
prospering, that is correct, is it not?
    Admiral Prueher. Yes, sir, that is.
    Senator Domenici. I do not know if you want to answer in 
public, but maybe I will just put the question to you, you are 
good with words, and you use them appropriately.
    If I were to make a statement that in the Asian area there 
is a chance that there will be some serious revolutions or 
major civil strife because of the economic chaos that is coming 
now and the foreboding lifestyles, would you agree with that 
statement?
    Admiral Prueher. Not necessarily, Senator. I think that 
just the economic situation has increased the stresses and 
strains on the governments.
    What I would like to say is that I think that the military 
security part, if we were to exacerbate the financial strains 
that are going on now with military insecurities, also, then we 
might have some bonafide unrest in the countries that could 
occur.
    What we were trying to do with the East Asian nations, to 
the extent that we can influence it, is to continue to work 
with them to try to create a bedrock of military security where 
we can, so that the economic crises can be dealt with without 
having the additional stress of military instability.
    Our biggest concern is in Indonesia, where those stresses 
are the largest, where there is political stress, there is 
economic stress, and the military in Indonesia, I think, is 
trying as hard as they can, I have talked to General Wiranto, 
their head, and both their minister of defense and their--he 
has two jobs, minister of defense and the head of the ABRI, 
they are doing the best they can to work in a responsible way, 
but it is a very challenging and sensitive situation in which 
they find themselves, and we watch that situation very closely, 
sir.
    Senator Domenici. So are you saying--well, you did not 
agree with my statement, which I did not necessarily expect you 
to, but your job is made more difficult, because of the 
situations that are currently occurring, and which might happen 
in some of these countries.
    Admiral Prueher. Yes, sir. It has changed. With 7 to 9 
percent economic growth, a lot of the ills can be accommodated. 
Without that economic growth, the strains become greater.

                                Wrap-up

    Senator Domenici. Mr. Chairman, I will submit some other 
questions in writing, and just take 1 minute to wrap-up.
    And this does not have necessarily anything to do with you, 
but the more I observe the difficulty that this Appropriations 
Committee is having in meeting the needs of the military, and 
where we are almost every year getting one or two major 
emergency requests, be it for Bosnia, which is at $1.91 billion 
for next year, it is not in the regular budget, it was asked 
for on top of it, and where we have had similar situations 
already in the Middle East, where big expenditures were not in 
the budget, and we were asked to pay for them on an emergency 
basis, that is breaking the budget, but not breaking it--I have 
come to the conclusion, and I expect no response from you, that 
the approach of the administration is a way to get around 
asking for more money for defense, and frankly, I think that is 
the case.
    I think defense needs more money, and I think these 
constant emergency requests are an indication that the White 
House, and those who work there, do not want to face up to the 
fact that we probably need a few billion dollars more for 
defense.
    And frankly, I do not know that we will get emergency 
designations every time they ask, and that means that defense 
is going to get hurt more, so you are going to have to run 
around trying to find that money, and I do not think that is 
fair to this committee, and I think it is an easy way out, to 
not have to bite some tough bullets.
    And, again, I am going to stay on this point until I get it 
out there and get some people over there understanding that we 
just cannot keep taking money out for deployments around the 
world, and still have a ready military and military men and 
women who want to stay in this great armed services of the 
United States. Thank you.
    Senator Stevens. Thank you. We do not expect a response to 
that, Admiral.
    Admiral Prueher. Yes, sir.
    Senator Stevens. I said we did not. Needless to say, when 
it comes to the Budget Committee chairman, it is welcomed by my 
colleague from Hawaii and I, and we will be pleased to work 
with him somehow to break this impasse. We clearly need some 
more money this year.
    I went to that ceremony on the new designation of the 172d 
Brigade. We were delighted to see that, and the concept that is 
involved there. I want to congratulate you on that.
    It does find a solution to what I called the problem of the 
Orphan Brigade in Alaska, and we are glad that it now has a 
definite assignment. Can you tell us what--you mentioned the 
scenario of the recent problems, in terms of the straits in 
China.

                         Crisis response force

    Are there any other scenarios that you envision using that 
brigade to be part of your crisis response force?
    Admiral Prueher. Well, sir, in response to Senator 
Cochran's query about the marine amphibious ready group and the 
marine expeditionary units, I think this brigade is an air-
deployable brigade that responds to similar types of events, 
where an example would be what occurred about 8 months ago in 
Cambodia, where we responded with 530 people, they happened to 
be the special operations forces, and nine aircraft, that is 
the type of thing where a brigade like that, properly trained, 
might be a response team, something of a modest size that could 
get there quickly and could react to a noncombative evacuation, 
or events like that. It is a great utility tool to have in the 
CINC's toolbox to be able to respond, sir.
    Senator Stevens. You have the forces in Hawaii. Is this the 
only other army force at your ready command?
    Admiral Prueher. The second tier under us are, of course, 
the 8th United States Army in Korea, that really work for 
General Tilelli there, and they are dedicated to the situation 
in Korea.
    It is the ICOR in Fort Lewis, General Crocker's group, is 
under USPACOM command, but that is largely a headquarters where 
all the forces are Reserve and Guard units under ICOR. So this 
and the 25th Infantry Division are the Army units, the 
multipurpose Army unit that we would have under our command, 
sir.

                             Okinawa update

    Senator Stevens. There is a situation now in Okinawa, I 
read a story about the status on our recent trip, which 
discussed the particular problems of relocating, what is that, 
the Futenma----
    Admiral Prueher. Futenma. Yes, sir.
    Senator Stevens [continuing]. Air strip. Is that worked out 
yet?
    Admiral Prueher. It is not worked out yet, sir. The 
Government of Japan is working a lot with the local politics in 
Okinawa to work on a replacement capability for the Futenma 
Marine Corps Air Station there.
    The plan most under discussion is a sea base facility which 
could be either a pontoon type of arrangement, a large air 
field, or a landfill, called a sea-based facility, off of Camp 
Schwab, is most frequently talked about, but this is being 
worked out with the Government of Japan and the Okinawans.
    Senator Stevens. I understand that that is to be at 
Japanese expense, right?
    Admiral Prueher. Yes, sir, it is.
    Senator Stevens. Is the current situation of Japan's 
financial condition delaying this at all?
    Admiral Prueher. I do not think it is delayed because of 
the financial situation in Japan. It is a substantial expense. 
I think the investment in the Okinawa area is something they 
are working out, but largely it ends up trying to reconcile the 
local politics in Okinawa, vis-a-vis these facilities.
    It is interesting that a couple of mayoral prefecture 
elections that were recently held, the candidate that supported 
United States presence in Okinawa was the candidate that won, 
which is a little bit of a change of tack in Okinawa with what 
we have seen in the last 2 or 3 years, sir.
    Senator Stevens. Senator Inouye, when he was chairman of 
the subcommittee, held some hearings that I attended in 
Okinawa, if you recall, and that is a longstanding dispute.
    Admiral Prueher. Yes, sir; our United States military there 
in Okinawa, with our marines there, as well as Kadena Air Base, 
as well as our Army special forces unit there, it has large 
footprint in Okinawa.
    So of the 26 items that were addressed under SACO, which is 
the Special Action Committee on Okinawa, that Dr. Perry set up, 
quite a few of those items have been completed and have been 
resolved. There are a few outstanding ones, the most difficult 
of which is the Futenma Air Base relocation, and that one is 
still working, and I think will take a few more years to work 
out, sir, but it is a longstanding issue.
    I have to tip my hat to Gen. John Baker, who is the Air 
Force leader at Kadena. He has done a great job there, and Gen. 
Frank Libutti has taken over the III Marine Expeditionary Force 
[MEF], and marines there are doing a great job of working with 
the community.
    I think what you find there is pro-American, but if it is 
like it is at home, people do not like to live in the landing 
pattern, so the basing is an issue we have to work out, sir.
    Senator Stevens. Like my State, those homes were put in 
after the field was put there, and it still is a problem.
    Admiral Prueher. Yes, sir.

                         Northern Edge exercise

    Senator Stevens. Northern Edge, my staff tells me that the 
next exercise will be a joint training and experimentation test 
bed for emerging doctrine, advanced technologies, and 
innovative concepts. Is that correct?
    Admiral Prueher. Yes, sir; the last Northern Edge that we 
did with General McCloud in Alaska, and I think you got a good 
debrief on that, where they included information, assurance 
operations in there, and about 96,000 people were involved in 
that joint exercise in Alaska.
    The ones coming up, we have forecast them to have Japanese 
participation, Australian participation in that exercise, as 
well as a joint exercise, and an experimentation test bed for 
communications and information assurance.
    Senator Stevens. Will forces under your command be 
involved----
    Admiral Prueher. Yes, sir.
    Senator Stevens [continuing]. Naval forces?
    Admiral Prueher. Yes, sir; the plan is for the 3d Fleet 
flagship to go up there and be a participant in Northern Edge. 
We have not really gelled exactly how that is going to turn 
out, but there will be naval forces involved in it, too.
    Senator Stevens. Do you have any further questions, Senator 
Inouye?
    Senator Inouye. Just one, and I would like to submit the 
rest. I understand the joint surveillance and target attack 
radar system [J-STARS] aircraft was used in exercises in your 
command at the end of last year----
    Admiral Prueher. Yes, sir.
    Senator Inouye [continuing]. And that included using the 
aircraft in support of amphibious landing exercises in Korea.
    Admiral Prueher. Yes, sir.

                                J-STARS

    Senator Inouye. How would you assess the utility of J-
STARS? I ask this, because it may become a matter of some 
discussion in this committee.
    Admiral Prueher. Yes, sir; J-STARS is a very useful 
platform, designed, of course, originally to look at moving 
targets, and to assess what is going on on the battlefield. It 
has become even more important as a battle space management 
aircraft to also help coordinate what goes on in the 
battlefield. It worked well in Korea, the aircraft is--we 
pushed it to deploy, we deployed it to Bosnia, we deployed it 
to the Korean Peninsula, it worked very well there, sir, and is 
a great utility to us.
    Senator Inouye. Mr. Chairman, if I may, I would like to 
submit the rest of my questions.
    Senator Stevens. Yes, sir; I have a couple of questions I 
did not ask, also.
    Senator Cochran.
    Senator Cochran. I have no further questions, Mr. Chairman.
    Senator Stevens. Admiral, it is always a pleasure to see 
you. I remember so well when we saw you just before we went 
down to the Antarctic and the book you gave me.
    Admiral Prueher. Yes, sir.
    Senator Stevens. I hope you have another book as equally 
interesting as the one that I read so faithfully on that trip. 
It is a wonderful, wonderful story. We will be contacting you 
about that problem of the $35 million, and whether there is 
going to be any incremental amount that will be necessary.
    It is highly important that we not just concentrate funds 
on areas west of the Urals--east of the Urals, particularly 
along the northern coast, and there along the Pacific Coast, 
the Bering Sea Coast, there seems to be an accumulation of 
retired or decommissioned nuclear-powered vessels in Russia, 
and we certainly do not want to see a resumption of dumping at 
sea of nuclear systems that are still capable of contamination 
in that great body of water. One-half the fisheries of the 
world are in that area of the North Pacific.
    I appreciate your courtesy of being here. We apologize 
again for the delays, and it is good to see you.

                     Additional committee questions

    Admiral Prueher. It is good to see you, too, Senator, and I 
will followup with the response to that.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted by Senator Ted Stevens
                                  imet
    Question. Admiral Prueher, please discuss our military training 
with Indonesia. What kind of an IMET program do we currently have with 
Indonesia?
    Answer. Each of U.S. Pacific Command's service components train 
with Indonesia. Training is coordinated annually during the Bilateral 
Defense Discussions (BDD), an annual meeting that lays the foundation 
for shaping our military-to-military relationship. Training events with 
Indonesia are on a relatively small scale and focus at the tactical 
level. Exercises normally occur on an annual or biennial basis with 
several iterations of an exercise throughout the year.
    Due to Indonesia's uncertain political environment, all U.S. 
military training with the Indonesia Armed Forces (ABRI) in Indonesia 
was put on hold as of May 7, 1998. We anticipate that until the 
political environment in Indonesia stabilizes, future U.S. military 
activities with ABRI in Indonesia will be determined on a case-by-case 
basis by the Under Secretary of Defense for Policy.
    Congress suspended the International Military Education and 
Training (IMET) in 1992 due to the 1991 Dili incident in East Timor. 
Subsequently, Indonesia was approved for Expanded IMET (E-IMET) in 
1996. E-IMET provides training in the proper management of defense 
resources, improves systems of military justice in accordance with 
internationally recognized principles of human rights, and fosters 
greater respect and understanding of the principles of civilian control 
of the military.
    For fiscal year 1998, Indonesia was granted $400,000 for E-IMET 
training. Indonesia has agreed to participate and has requested 
training in English, medical services, information management, Law of 
War workshops, and civil-military affairs. ABRI has also requested a 
slot at the National Defense University.
    Question. What benefits are derived from having an IMET 
relationship with Indonesian Armed Forces?
    Answer. IMET's greatest benefit can be found in its ability to 
influence relations with Indonesia Armed Forces (ABRI) on important 
issues such as human rights and the role of a professional military 
under the rule of law. When ABRI trains with our troops and attends our 
courses we are able to directly expose ABRI's upcoming leadership to 
the democratic principles we hold dear. Our troops provide a model for 
how a military functions under the rule of law, and the academic 
courses we offer reinforce this same message.
    In my opinion, ABRI's commendable moderating influence in the 
recent Indonesian transition from the Suharto regime can be traced, at 
least in part, to the exposure of ABRI leaders to IMET programs.
    Question. If we don't stay engaged with Indonesia, what will be the 
likely outcome?
    Answer. Indonesia is a leading nation in Southeast Asia. Its size 
and location make it a pivotal country in maintaining regional 
stability and prosperity. Indonesia is the world's fourth most populous 
country and largest Muslim country. She sits astride the region's key 
straits--Malacca, Lombok and Sunda--which serve as Asia's primary trade 
routes for the movement of goods and energy supplies.
    Indonesia has historically exerted a moderating influence on 
regional issues. Generally supportive of U.S. interests, Indonesia is a 
leading member of the Association of Southeast Asian Nations (ASEAN) 
and a driving force behind the creation of the ASEAN Regional Forum 
(ARF). Indonesia is also a founding member of the Non-Aligned Movement 
(NAM) and a member in the Asia-Pacific Economic Council (APEC).
    Indonesia is currently in the midst of a major political and 
economic transformation. The outcome of this transformation will 
determine Indonesia's stance in international relations and many issues 
important to the United States. Failing to engage Indonesia during 
these critical times would mean losing the opportunity to influence the 
country's transformation.
    One key to influencing Indonesia is to engage the Indonesia Armed 
Forces (ABRI). ABRI is Indonesia's leading and most developed national 
institution and is now playing a decisive role in maintaining stability 
in Indonesia while directing the pace of political reform. If United 
States expects to see its positions take hold in Indonesia, it will be 
done most effectively by influencing ABRI.
    IMET is an important long-term tool to building the relationships 
the United States needs to bring influence on ABRI's emerging 
leadership. Besides building relationships, IMET exposes ABRI to how 
the U.S. military functions in a democracy, under the rule of law. IMET 
is an important tool as are carefully scripted contacts between the 
United States and ABRI forces.
    Without engagement, and particularly with ABRI, the advance of U.S. 
interests both in Indonesia and in the larger region will be 
jeopardized.
                                 china
    Question. Admiral Prueher, do you view China as a threat?
    Answer. To answer this question we must first ask, a threat to 
whom? Its neighbors certainly view China's large army and inventory of 
ballistic missiles as a potential threat. Ballistic missiles are of 
particular concern because of their ability to hold population centers 
and military installations at risk.
    China is not a threat in terms of force projection. They do not 
currently have the ability to move large numbers of troops and 
firepower across great distances. They cannot match the U.S. ability to 
fight far beyond its shores, and so are not a threat in that sense.
    We expect the People's Liberation Army (PLA) to try to attain a 
force projection capability in 15-20 years, assuming an adequate degree 
of funding. Other challenges, such as doctrine development and the 
``professionalization'' of their military must also be watched closely. 
I expect China's PLA will become more and more professional. Their 
growth in capability will depend on good decision-making and continued 
economic growth.
    Question. What is your plan for military-to-military relations with 
China?
    Answer. Our military-to-military contacts with the People's 
Republic of China (PRC) are an important part of the overall U.S.-China 
relationship. Our military-to-military goals are two-fold: build trust 
and understanding from a position of U.S. strength, and increase 
openness. These are long-term goals that will take years to accomplish. 
As a result, we are actively seeking to include younger generations of 
military officers in the process, but the pace of our engagement does 
not need to be hurried.
    Our military-to-military game plan for 1998 includes four areas of 
emphasis: counterpart and other high-level contacts, increased PLA 
participation in multinational conferences, implementation of 
confidence building measures, and promoting functional and professional 
exchanges.
    A number of counterpart visits and other high-level contacts are 
already planned for this year. They include visits to the United States 
by GEN Zhang Wannian (Senior Vice Chairman of the Central Military 
Commission and the PLA's senior-most uniformed representative), GEN 
Wang Ke (Director of the General Staff Department), LTG Kui Fulin and 
LTG Qian Shugen (both Deputy Chiefs of the General Staff Department), 
and VADM Shi Yunsheng (Commander of the PLA Navy). From the United 
States, SECDEF Cohen, Under Secretary Slocombe, Gen Ryan, and I have 
all visited China this year.
    We encourage PLA participation in multinational conferences and 
seminars. So far this year, the PLA has participated in the Pacific 
Area Senior Officer Logistics Seminar (PASOLS), Pacific Armies 
Management Seminar (PAMS), the Asia-Pacific Military Medicine 
Conference, the South Asia Peacekeeping Conference, and the Conference 
on Military Aspects of Environmental Security. We continue to invite 
the PLA to attend the Asia Pacific Center's Strategic Studies College, 
though they have yet to accept.
    Confidence building measures (CBM) are another important part of 
our gameplan. Our CBM's include two U.S. Navy ship visits to the PRC in 
1998 and implementation of the Military Maritime Consultative 
Agreement, a formal framework to reduce the chance of miscalculation 
when our naval and/or air operations occur in close proximity. We will 
hold the first annual meeting in July 1998.
    Functional and professional exchanges hold the greatest potential 
for progress in 1998. For the first time, the PLA has agreed to send 
observers to Rim of the Pacific (RIMPAC) Exercise, Cooperative Cope 
Thunder, and Hong Kong Search and Rescue Exercise (SAREX). They are 
also actively participating in the Deputy Assistant Secretary of 
Defense (DASD) for Peacekeeping and Humanitarian Assistance (PK/HA)-
sponsored humanitarian/disaster relief initiative. These venues, as 
well as the multilateral conferences, provide the best means of 
achieving our long-range goal of involving the younger generation of 
PLA officers.
    Question. Have you had much success in your efforts with China to 
expand those military contacts and exchanges?
    Answer. Yes. We have had some success in each of the four areas 
that define Defense Department military-to-military relationship with 
the People's Liberation Army (PLA). In all cases, the relationship has 
expanded at a measured pace with a focus on moving contacts to lower 
levels.
    Our counterpart visits and other senior-officer contacts are the 
basis upon which we build all other relationships. This component was 
re-instituted with vigor in 1996 with Minister of Defense General Chi 
Haotian's visit to the United States. In 1997, a total of sixteen 
senior officer delegations visited each country, evenly split each way. 
The 1998 program is more modest with five PLA delegations to the U.S. 
and six U.S. delegations to the People's Republic of China.
    PLA participation in multinational conferences has made significant 
progress since 1996. Last year the PLA attended half (11 of 22) of the 
conferences held by U.S. Pacific Command component commands. This year 
the PLA will easily surpass that number. More importantly, the PLA 
attendees are actively participating this year through more open 
discussions and presentations. We will continue to push for even 
greater participation in 1999.
    Confidence building measures continue with our U.S. Navy port 
visits to Hong Kong and official ship visits to mainland ports. Last 
year's visit to Qingdao was a great success, as was the first PLA Navy 
ship visit to Hawaii and West Coast ports. We have planned three U.S. 
ship visits for 1998. We are encouraging the PLA Navy to visit the 
United States again in 1999.
    Perhaps our greatest area for progress has been the Functional 
Exchanges. Foremost are the Military Maritime Consultative Agreement 
(MMCA) talks scheduled for mid-July. This series of discussions is 
designed to prevent miscalculation at sea. Other major topics include 
the Humanitarian Initiative, military aspects of Environmental 
Security, and the Defense Consultative Talks.
                         asian financial crisis
    Question. Admiral Prueher, what impact has the ongoing economic/
currency crisis in Asia had on regional security?
    Answer. Maintaining regional security in the face of the ongoing 
crisis is key to the region's long-term development. Our analysis 
focused on the hardest hit countries: Thailand, Malaysia, Indonesia, 
Philippines, and South Korea. The immediate concern was that the 
financial crisis would lead to a security crisis. With the exception of 
Indonesia, the security situation throughout the region remains stable. 
However, the full impact of the financial ills are just now beginning 
to take effect.
    Indonesia remains particularly vulnerable to a resurgence of 
rioting and civil disturbances as shortages of food, fuel, and credit 
grip the country. We are watching this situation closely and are 
conducting appropriate planning to protect U.S. interests should a 
crisis arise.
    Over the longer term, government austerity programs will reduce the 
region's ability to provide for its self-defense. Regional security 
cooperation in fora such as the Association of Southeast Asian Nations 
(ASEAN) Regional Forum will suffer as ASEAN members focus inward on 
their economic programs. The potential for regional friction increases 
the importance of sustaining U.S. military presence and engagement 
programs.
    U.S. Pacific Command is working closely with each country to ensure 
we remain engaged and emerge from this crisis with an even closer 
relationship.
    Question. What planning are you doing for a possible non-combatant 
evacuation operation (NEO) or refugee contingencies as a result of this 
crisis?
    Answer. We have been assessing similar scenarios for some time, and 
have taken measured steps to ensure we are ready. Whenever a possible 
crisis has the potential to endanger American citizens, both the 
embassies and U.S. Pacific Command (USCINCPAC) review existing 
contingency plans and update intelligence to maximize our preparedness. 
Likewise, when a possible humanitarian emergency appears to loom on the 
horizon, we conduct a coordinated assessment of what help the United 
States could and should bring to bear, and how USPACOM could lend 
support.
    [Deleted.]
    Please be assured, we have forces ready and capable to respond to 
both such emergencies, and watch for signs they may be needed with an 
unwavering eye.
    Question. Will the crisis have an impact on how these countries 
modernize their Armed Forces, as well as their ability to share the 
cost of U.S. presence in Japan and Korea?
    Answer. The financial crisis has had a significant impact on the 
Republic of Korea's (ROK) defense modernization program, as the country 
has scaled back or postponed many of its modernization projects. Those 
major programs affected include: procurement of airborne warning and 
control system (AWACS); construction of three 1,500 ton submarines; 
purchase of coastal radar systems; and purchase of 155 mm self-
propelled guns. With regard to burdensharing, the ROK appears committed 
to the current special measures agreement but is working with 
Washington to shift some of its contributions from dollars to won to 
compensate for a reduced dollar/won exchange rate.
    So far, the current Asian financial crisis has had little, if any, 
effect on Japan's defense modernization program. However, since the 
early 1990's, Japan's own economic problems have slowed the rate of 
growth of the military budget. Because of a government-wide austerity 
program initiated last summer, the Japan Self-Defense Force faced 
unprecedented budget cuts--over $8 billion from the remaining three 
years of its current five-year plan (1996-2000). There is concern as to 
the potential impact of a prolonged economic slump on long-term Japan 
Self-Defense Force capabilities. All signs indicate however that Japan, 
a major purchaser of U.S. equipment, will meet its remaining contract 
commitments and overall host nation support obligations.
    The financial crisis has also caused Thailand, Malaysia, Indonesia, 
and the Philippines to delay or curtail force modernization programs. 
To date, Thailand is the only one of these countries to request the 
termination of a major foreign military sale program, the purchase of 
F/A-18 aircraft.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                         asian financial crisis
    Question. We have all followed the Asian financial crisis closely, 
given its potential negative impact on the U.S. and global economy. 
However, the crisis is also generating considerable social unrest in 
the affected nations as domestic prices surge and unemployment rises in 
the wake of their currencies' collapse. Some analysts have warned that 
this unrest could lead to greater ethnic strife and even possible civil 
war unless conditions improve in the near future.
    In your estimate, how much of a security threat does Asia's 
financial crisis pose in this crucial region? Do you think there is any 
possibility of civil war in any affected Asian nation?
    Answer. With the notable exception of Indonesia, the financial 
troubles sweeping key Southeast Asian nations have ushered in a period 
of stringent defense austerity and will likely erode defense 
capabilities, but internal security mechanisms should remain intact and 
largely unaffected. Rising inflation and unemployment have increased 
discontent and domestic political strains, but serious unrest is 
generally unlikely in most of the regional states.
    Expected leadership changes should remain largely constitutional 
and devoid of civil violence or military intervention in view of the 
existing political systems in most of the affected states. Although at 
this point a civil war is unlikely, Indonesia appears headed toward a 
downward spiral of economic turmoil that probably will bring further 
leadership, political, and social change.
    Question. What can Congress do to help improve the situation--could 
approval of IMF funding play an important role in boosting confidence 
in the region?
    Answer. Approval of International Monetary fund (IMF) support can 
play an important role in boosting confidence in the region. Regional 
leaders, including key military figures, realize a drawdown of 
international support to the current crisis places regional growth and 
stability at risk. Without IMF support, economic and social conditions 
may deteriorate, military attention may be drawn to internal problems, 
and regional security cooperation could suffer.
    My recent visits to countries in the region have indicated that 
relevant defense establishments recognize the dire short-term need for 
IMF programs and realize the importance of structural Asian Financial 
Crisis reforms to long-term prosperity.
    Across the board, the militaries recognize the need to allow 
government and financial institutions to solve the current economic 
crisis. This professional willingness to ``stay in the barracks'' and 
take the IMF medicine represents a positive trend in regional political 
development, and reinforces investor confidence in Asia's long-term 
growth potential.
    Question. Is there any threat that the ongoing crisis could result 
in a broader regional conflict?
    Answer. Currently, I do not believe that there is a serious risk of 
a broader conflict stemming from the regional economic downturn for 
either South Korea or the nations of Southeast Asia. However, the 
financial crisis has made these nations feel less secure than before, 
which has increased the general desire for a strong U.S. presence in 
the region. If the countries in the region could find Asian-centered 
solutions to their mutual economic suffering, they could actually 
enhance security ties among their nations. The uncertain outlook in 
Indonesia has raised concern among its immediate neighbors. Singapore 
and Malaysia fear widespread economic disruption and refugee outflows 
because of the political and social turmoil. Both nations have 
responded with financial support and public backing for Jakarta's 
policies. It is important for the Congress to be aware of the support 
and endorsement by Asian nations for U.S. underwriting of regional 
security.
                               readiness
    Question. What do your latest data show about retention of basic 
infantrymen, mechanics, cooks, and pilots? Is it getting better or 
worse? Is it better or worse for married personnel? With families? What 
are the socio-economic profiles of the people leaving? Staying? Or, do 
you not have these kinds of data? Would it help?
    Answer. U.S. Pacific Command (USPACOM) does not have a database to 
provide the answers to these questions. Service headquarters collect, 
track, and analyze retention data, sharing the results with USPACOM and 
the other Combatant Commanders. Retention is based on a number of 
complex factors. Office of the Secretary of Defense (OSD), the Joint 
Staff, and the Services are now conducting more detailed analyses of 
retention trends, including examination of potentially significant 
demographic groups and influencing factors. We look forward to seeing 
the results of these examinations which should lead to a better 
understanding of what drives retention and what array of compensation, 
benefits, and quality of life programs are necessary to achieve and 
maintain desired levels of retention of the right personnel.
    Question. What are the specific complaints of people leaving your 
command? What are the reasons for staying of the people who stay? Or, 
do you not get these kinds of data?
    Answer. The Services track the reasons for retention and non-
retention of personnel. We work closely with the Services to monitor 
retention and identify any areas with the potential to negatively 
impact U.S. Pacific Command (USPACOM) readiness. At this time, USPACOM 
does not have any unique issues. The advent of the recent decline in 
retention rates with the Services has caused Under Secretary of Defense 
(Personnel and Readiness), the Joint Staff, and the Services to begin 
more in-depth examination of retention trends and projections. We await 
the results of the efforts and will engage with the Office of the 
Secretary of Defense (OSD), the Joint Staff, and the Services to ensure 
that readiness within USPACOM continues to be met.
    Additionally, the Services believe that the reduced incentive of 
the 1986 Military Retirement Reform Act's retirement compensation may 
be a partial cause of the reduced retention the Services are 
experiencing. The OSD, the Joint Staff, and the Services are currently 
studying the impact of the military retirement systems on retention.
    Question. Which of your ``quality of life'' programs are working? 
Which are not? Which generate the best pay-off in terms of retention? 
Please provide the data and analysis to substantiate your answer, or 
are you using judgement or anecdotal evidence to assess the degrees of 
success or failure?
    Answer. Though we focus heavily on quality of life issues for the 
well being and the readiness of our forces, we work with the Service 
Chiefs who are responsible for budgeting and evaluation of the 
programs. Our experiences in U.S. Pacific Command (USPACOM) are not 
unique. The Services report that anecdotal evidence suggests 
educational benefits, medical and dental health care, fitness and 
recreational activities, commissaries, and exchanges are quality of 
life programs that have a positive influence on retention. Retirement 
may be a program that is not working in terms of its influence on 
retention. We, along with the Services suspect that the 1986 Military 
Retirement Reform Act retirement system is contributing to reduced 
retention. The Office of the Secretary of Defense, the Joint Staff, and 
the Services are currently studying the impact of the reduced military 
retirement system's impact on service members' career retention 
decisions. In the view of many in our area of responsibility, with the 
exception of Korea and Hawaii, building of new housing for first-term 
enlisted is approaching a point of diminishing return for quality of 
life and retention.
    Question. Do you collect or receive data about family and substance 
abuse in your command?
    Answer. The methods for collection of family and substance abuse 
within the Pacific Theater vary by Service. The Department of Defense 
is in the process of developing a comprehensive database for Family 
Advocacy (child abuse and neglect and spouse abuse) cases. The Office 
of the Assistant Secretary of Defense (OASD) for Family Policy, 
Support, and Services (OFPS&S), the Defense Manpower Data Center 
(DMDC), and the Military Services Family Advocacy Program, are 
implementing Central Registries which have common guidelines, 
requirements, and procedures for data collection, analysis, and 
distribution. The military Services have submitted relevant data to 
DOD. Retrieval of U.S. Pacific Command (USPACOM) specific data is not 
yet possible. Commencing in fiscal year 1998, the DMDC will make such 
data retrieval possible.
    Substance abuse data is collected by each of the Component Services 
within USPACOM. The Army, Air Force, and Marine Corps collect the data 
within the theater, provide it to a Central Registry within their 
respective services, and receive a summary of the results for their 
forces. Our Navy component, Pacific Fleet (PACFLT), however, collects, 
compiles, and analyzes substance abuse data for PACFLT forces, as well 
as forwarding it to a Central Registry. Urinalysis results comprise the 
primary data collected.
    Question. What changes have been occurring in spouse, child, and 
substance abuse for the past two years? Please differentiate between 
officers and enlisted, length of service, and among major military 
specialties and PERSTEMPO rates.
    Answer. Specific data on spouse, child, and substance abuse is 
maintained by each Service. Differences in how each Service defines and 
uses the data reported make it difficult to aggregate DOD-wide. We 
understand that Office of the Assistant Secretary of Defense (Family 
Policy, Support, and Services), the Defense Manpower Data Center, and 
the Services are finalizing a common comprehensive database that will 
provide DOD-wide data on Family Advocacy by more specific demographic 
sub-groupings to include geographical areas such as U.S. Pacific 
Command (USPACOM).
    Within our area of responsibility, there has not been any 
statistically significant change in our data on these abuses. Though a 
single incident is one too many, the rate for our population remains 
small and cannot be correlated to any particular causal factor.
    Question. What is the role of the current high personnel tempo 
(PERSTEMPO) in any changes in family or substance abuse? Please provide 
copies of any analysis you have of the relationship.
    Answer. Analysis of the potential correlation between PERSTEMPO 
rates and changes in family or substance abuse has not been 
accomplished. Additionally, PERSTEMPO varies for the different 
Services. For the Navy and Marine Corps, it has not increased because 
rotational deployment patterns have remained constant. However, the 
increase in the rotational assignments within the Army and Air Force 
has increased the amount of family separation our soldiers and airmen 
are experiencing since the drawdown.
    Question. Do you have confidence that the Armed Services of DOD 
generate adequate data and analysis about readiness and quality of life 
issues?
    Answer. The Armed Services make diligent and reliable efforts to 
support the decision-makers at all levels, from theater to the 
Department of Defense and the Joint Chiefs of Staff, by providing 
timely data and analysis about readiness and quality of life issues. In 
my view, our readiness data does not yet present an actionable picture.
    Let me point out, however, that understanding and measuring 
readiness, and to a certain extent quality of life, is complex and 
difficult, particularly when information is aggregated at the theater 
and national levels. This aggregation process sometimes obscures 
pockets of lower readiness in the force, which we often hear or read 
about as anecdotes.
    Our readiness reporting systems are evolving as information 
technology improvements are adapted to the challenge of measuring and 
understanding readiness. Our senior military leadership is committed to 
improving those systems to provide a clearer picture of readiness.
    Areas where I believe we can make the greatest strides are: (1) 
refining readiness benchmarks, (2) better distinguishing between 
subjective and objective assessments (both are needed) (3) improving 
predictive tools, and (4) developing tools to link tactical readiness 
indicators to supply, maintenance, manpower, and training events. 
Finally, at the theater level, we need to find the right tools to merge 
service and joint reporting systems to give us greater fidelity in 
total theater readiness.
    Similarly, quantifying the impact of quality of life programs is 
complex and challenging. Differences in Service programs and resource 
requirements complicate comparison between Services. Through close 
coordination with U.S. Pacific Command Component and Sub-Unified 
Commanders, those quality of life issues most critical to the well 
being and readiness of our service personnel and their families are 
being monitored, examined, and addressed.
    Question. Do you have confidence that the information and analysis 
you receive is accurate and valid?
    Answer. The readiness information and analysis I receive is 
accurate and valid, though generated by an imperfect system, and 
therefore lacks sufficient depth and breadth to meet the needs of all 
decision makers.
    Our current ``readiness system'' is in fact two separate systems, 
designed at different times for different purposes. The Status of 
Resources and Training System (SORTS) measures and reports on unit 
level sufficiency of people, training, equipment and supplies. It is an 
objective system.
    The Joint Monthly Readiness Review (JMRR), a subjective system, 
assesses military capabilities in terms of broad functional areas, such 
as logistics, mobility, intelligence and communications. Because one is 
subjective and the other objective, it is difficult to get the whole 
readiness picture, except when they are tempered and augmented by 
commander's judgment.
    Among the most common reasons for questioning the products of our 
readiness system are the many anecdotes we hear. These typically 
highlight a significant unit level deficiency in a warfare capability 
which, when viewed at the theater or higher levels, is within historic 
norms. These ``pockets of `unreadiness' '' are obscured because of the 
way we aggregate data at each successively higher level. What may be 
obvious to an individual commander loses visibility when the vantage 
point is four levels higher.
    The effects of aggregation are but one aspect of readiness 
assessment in need of remedy. The Joint Staff, along with the staffs of 
the unified CINC's, are currently addressing such issues as common 
terminology and common measures of service PERSTEMPO.
    Accurately measuring and assessing readiness is a difficult task. 
Our system is not perfect, but many are trying to improve it. I have 
attached a paper that offers additional thoughts on the topic for your 
use.

                                                      May 15, 1998.
                     understanding readiness * * *
Introduction
    High on the nation's defense agenda is the question of military 
readiness. It has been the subject of Administration and Congressional 
attention as well as extensive media coverage. But, what is readiness 
and how is it measured? This article steps outside the Pentagon's 
framework for thinking about readiness and provides a plain English 
perspective.
    What is readiness and how is it measured?
    Readiness can be defined as the nation's ability to have the right 
forces in the right place at the right time to fight the right war. It 
consists of seven things; in principle, measuring readiness in each of 
these areas is a straightforward task:
    Qualified people.--For each unit, we count the number of 
specialists on hand-pilots, infantrymen, mechanics, etc.--and compare 
those numbers to the numbers each unit needs.
    Combat-capable hardware and technology.--We compare the 
capabilities of U.S. military hardware--ships, tanks, aircraft, etc.--
to those of potential adversaries.
    Appropriate levels of maintenance, supplies, and spare parts.--We 
track the extent to which hardware is in a ``ready to go'' maintenance 
status. In simple terms, are the ships ready for sea, can the aircraft 
fly, can the tanks shoot, and are adequate supplies and spare parts on 
hand?
    Training.--We track the amounts and types of training our forces 
have received.
    Tactics, techniques, and procedures.--We ask ourselves, ``do we 
have tactics, techniques, and procedures that fully exploit the 
capabilities of our hardware and our people?''
    Transportation and communication.--We ask ourselves if we can move 
our forces in a timely manner to wherever they might be needed and if 
we can communicate with them once they are deployed.
    Infrastructure.--We track the extent to which our bases, hangars, 
maintenance depots, fuel farms, training ranges, etc. are in an ``up'' 
status, lest we erode our ability to do maintenance, train our forces, 
and keep our forces supplied.
Readiness exists on multiple levels
    Readiness exists at tactical, operational, and strategic levels 
within our forces.
    At the tactical level, the question is: are our smallest military 
units--squadrons, battalions, ships--ready to fight? Tactical readiness 
is the responsibility of the Army, Air Force, Navy, and Marine Corps. 
The armed services give their squadrons, battalions, ships, etc., the 
people, hardware, training opportunities, and funds to attain readiness 
standards that the services define for these units.
    There are two forms of operational readiness: ``service'' and 
``joint.''
  --Service operational readiness is the ability of the individual 
        tactical units to form larger, operational-level fighting units 
        such as wings, battle groups, brigades and divisions, Air 
        Expeditionary Forces, Marine Expeditionary Units, etc. The 
        services are responsible for providing the funds and training 
        environments for this form of readiness.
  --Joint operational readiness reflects the ability of operational-
        level fighting units of the individual services to ``integrate 
        and synchronize,'' i.e., to operate in cohesive, coordinated 
        ways with the fighting units of other services (as well as with 
        forces of other nations). This form of readiness is the 
        responsibility of the unified Commanders-in-Chief (CINC's).
    Estimating the service operational readiness of units involves 
``aggregating'' the readiness data of tactical units. The complexity in 
joint operational readiness comes when we try not only to aggregate the 
readiness data of tactical units from a single service but also 
aggregate the readiness data of operational units from two or more 
services. It is possible for our forces as a whole to be in a high 
state of readiness, even though some individual units are not at peak 
readiness.
    Strategic readiness combines tactical and operational readiness 
with all of the additional intelligence, logistics, command-and-
control, and transportation systems needed to form a joint warfighting 
force. It also comprises the readiness of the CINC's staffs and other 
federal agencies and departments necessary to put the right forces in 
the right place at the right time to fight the right war.
    In general, strategic readiness is measured against a large-scale 
scenario, such as the nation's ability to fight and win two major 
theater wars. The Chairman of the Joint Chiefs of Staff is the catalyst 
who defines the benchmarks for strategic readiness.
    To measure strategic readiness, tactical and operational readiness 
data must be aggregated even further and combined with other data. At 
this stage, the data for the force as a whole will often obscure the 
readiness of individual units, even if they are experiencing 
significant readiness shortfalls.
    Why is measuring readiness difficult?
    There are five reasons why measuring readiness is easier said than 
done.
  --Readiness depends on the ``benchmarks'' against which we measure 
        our forces, such as whether they can fight two major theater 
        wars nearly simultaneously. Different benchmarks will yield 
        different results.
  --Many aspects of our readiness measuring system rely on subjective 
        judgments.
  --An automated system that links tactical readiness data to joint 
        operational and strategic readiness data does not exist.
  --There is no simple equation for ``aggregating'' readiness data from 
        one level up to the next level.
  --We also factor in ``prudent risk,'' e.g., the chances of a crisis 
        occurring.
    What are the implications?
    The discussion above is perhaps a start to what may be a better way 
of understanding and measuring readiness. Clearly it needs further 
development, but this view has the potential to provide much more 
useful measurement of military readiness.
                               readiness
    Question. Do you have confidence that complete, accurate, and valid 
information is routinely made available to decision-makers in the 
Office of Secretary of Defense and the Joint Chiefs of Staff by the 
military services and by the civilian bureaucracy?
    Answer. A system that provides complete, accurate and valid 
information implies a perfect system. We do not have a perfect 
readiness reporting system but we have a good one and it is getting 
better.
    A great deal of data relating to readiness is available. The 
challenge is to select the correct data such that it provides 
meaningful information. The Chairman of the Joint Chiefs of Staff 
recently said that he wants ``to make certain that in this increasingly 
constrained resource environment our Joint Readiness Reporting Systems 
accurately reflect our posture.'' We have taken the Chairman's ``focus 
item'' to heart, and continue to make improvements.
    We currently assess readiness through the vehicles of the Status of 
Resources and Training System (SORTS) and the Joint Monthly Readiness 
Review (JMRR), briefly described in the previous answer. These systems, 
though individually useful, were not designed to work together, and 
their merger produces a whole no greater than the sum of the parts.
    Recognizing these limitations, I believe complete, accurate and 
valid information is routinely made available to decision makers, 
though our efforts to improve its quality continue.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                          asia-pacific center
    Question. Admiral Prueher, I understand the Authorization 
Committees are likely to eliminate your requested authority to 
reimburse poorer countries who send students to the Asia-Pacific 
Center. Can you explain the importance of receiving legislative 
authority for this?
    Answer. Public Law 105-56, Section 8094 contains language that 
allows the Center to waive reimbursement for the cost of conferences, 
seminars, and courses of instruction for participants of foreign 
countries when the Secretary of Defense determines such participation 
is in national security interests and these costs are paid with 
appropriations already available to the Center. This authority is due 
to expire September 30, 1998. Permanent authorization is being sought.
    This authority is crucial to the Center's ability to attract 
participants from both developing and developed countries in the 
region. Since it permits waiving class-related tuition or ``platform'' 
charges for all participants, it acts as a strong incentive for not 
only developing, but also developed countries to attend. Participation 
by nations such as Australia, New Zealand and Japan is clearly in the 
best interests of the United States since they typically exercise a 
leadership role in the region. This authority also allows waiving 
reimbursement for personal expenses of approved developing countries, 
and therefore enhances the authority granted by 10 U.S.C. 1051.
    Identical language was previously enacted for the Center in the 
Fiscal Year 1997 Department of Defense (DOD) Appropriations Act at 
Public Law 104-208, Section 8121. The provision mirrors legislation 
previously granted to the George C. Marshall European Center for 
Security Studies in Public Law 103-337, Section 1306(b). Enactment of 
the provision imposes no increase in DOD budgetary requirements.
    Question. Admiral, how is the Asia-Pacific Center aiding you in 
carrying out your cooperative engagement strategy?
    Answer. The Asia-Pacific Center directly contributes to the U.S. 
Pacific Command (USCINCPAC) strategy by fostering understanding and 
cooperation through the study of security-related issues among military 
and civilian representatives of the United States and other Asia-
Pacific nations. The Academic Department provides a focal point where 
military and civilian officials gather to exchange ideas, explore 
pressing issues, and achieve a greater understanding of the challenges 
that shape the security environment of the Asia-Pacific region.
    The Center is presently conducting its fifth class in the College 
of Security Studies. During the twelve-week program in the College, the 
participants build human relationships and mutual understanding that 
will strengthen the foundation for security cooperation in the face of 
significant regional challenges. These challenges include: the 
tremendous diversity of cultures, political systems, and standards of 
living; historical animosities that continue to strain international 
relations; transnational security issues such as organized crime, 
terrorism, the drug trade, severe environmental degradation, and 
migration; the growing tension between the forces of globalization and 
ethnic nationalism, now dramatized by the economic crisis in Asia; and 
the absence of formal security arrangements to coordinate national 
security strategies and policies.
    The Conference Division has conducted conferences and seminars with 
participants coming from all countries in the region. These conferences 
and seminars have addressed regional security issues ranging from 
Emerging Democracies to Environmental Issues. The conferences are 
designed to take on the emerging issues in the Asia-Pacific region and 
incorporate them into the USCINCPAC preventive defense strategy as well 
as the College of Security Studies curriculum. The program is extremely 
useful and responsive to USCINCPAC's emerging needs.
    Question. Admiral Prueher, can you update the subcommittee on the 
reconstruction of the new Asia-Pacific Center?
    Answer. Renovation of an existing Government facility on Fort 
DeRussy to accommodate the Asia-Pacific Center is proceeding on 
schedule, thanks to the February 25, 1998 restoration of fiscal year 
1998 Military Construction (MILCON) funding in the Navy's budget. This 
restoration allows us to proceed to run the center most economically 
and avoid further rental of workspace.
    Restoration of MILCON funding ensures continuation and full funding 
of the planning and design (P&D) effort. This effort began September 
30, 1997 when the basic architectural and engineering contract was 
awarded. As of May 18, 1998, 35 percent of the design effort was 
completed; the final design phase will commence July 1998.
    The Asia-Pacific Center is expected to assume responsibility for 
the Government facility from the Army by June 1, 1998.
    The demolition contract for removal of all non-load-bearing 
interior walls within the existing Government facility is expected to 
be awarded no later than September 15, 1998, with demolition completed 
by January 28, 1999. The contract for renovation, which will overlap 
demolition, should be awarded December 14, 1998.
    While total renovation is not expected to be completed until August 
2000, the renovation effort will be phased, allowing employees to 
vacate the current facility and relocate to the newly renovated 
Government facility a floor at a time. Under this phased approach, we 
will begin relocating into the building with executive and 
administrative support staffs in April 2000.
    Question. The Marshall Center has received unfavorable reports 
about its financial accountability. What steps will you take to ensure 
that you do not experience the same problems?
    Answer. We have already taken many steps to ensure financial 
accountability in Asia-Pacific Center operations. Most notable is the 
explicit incorporation of recommendations and lessons learned from 
Marshall Center audit reports during the initial Asia-Pacific Center 
implementation plan development. This planning spanned more than a year 
and involved active participation and oversight by senior U.S. Pacific 
Command (USCINCPAC) staff. It is, in fact, this close relationship 
between USCINCPAC and the Asia-Pacific Center, both geographically and 
operationally, that has fostered effective communications and an 
atmosphere of transparency and mutual support. This is an advantage not 
as readily attainable by the Marshall Center because of its distance 
from Headquarters, European Command. Additionally, we are working in 
close concert with the Undersecretary of Defense for Policy for 
management of the center.
    U.S. Pacific Command retained oversight and decision-making 
authority for all major purchases through September 1997, at which time 
the Center became its own operating budget holder. However, even with 
this reduction in USCINCPAC oversight, the Asia-Pacific Center must 
still submit all purchases above $2,500 through the Navy's Federal 
Industrial Supply Center at Pearl Harbor for review and processing.
    In contrast to the Marshall Center, the Asia-Pacific Center's scope 
of operations is narrower, since it relies on contracted versus 
government space for participant accommodations and conferencing 
facilities. This reduces government overhead and simplifies 
management's responsibilities.
    As a further safeguard, the Center implemented early on an 
aggressive Internal Management Control program that emphasizes 
continuous management training in vulnerability assessment and risk 
reduction. Management-level awareness has been raised significantly as 
a result of this systematic process review.
                        situation in north korea
    Question. Admiral Prueher, the conditions in North Korea remain 
grim because of food shortages, economic isolation, and other factors. 
Can you tell us what the current status is and what concerns this 
presents for you as Commander in Chief, U.S. Pacific Command 
(USCINCPAC)?
    Answer. The conditions in North Korea are severe. The combination 
of flood, drought, inadequate medical supplies and government 
mismanagement is causing large-scale human suffering.
    The World Food Program (WFP) estimates that North Korea must rely 
on foreign food for most needs until the fall. Its current annual 
appeal for assistance calls for 650,000 metric tons of food aid. This 
will provide subsistence level support to an estimated 7.5 million of 
North Korea's most vulnerable--about one-third of the population--
consisting of children and those cared for in hospitals and 
institutions. The aid deliveries are being timed to meet anticipated 
needs in spring and early summer.
    My immediate concern is the instability that may stem from these 
conditions. It is difficult to predict with any degree of accuracy how 
this instability may play out. There is a wide range of possible 
outcomes--anything from no change in status to a military response, 
including an attack on the Republic of Korea (ROK). While economic 
conditions are eroding North Korean military capabilities, they remain 
formidable and have the ability to inflict heavy casualties on ROK and 
U.S. forces. We must be prepared to respond in this worst case 
scenario.
                               landmines
    Question. Admiral, I am told the Administration is examining a new 
policy regarding landmines. Can you comment from a military point of 
view on the continued requirement for landmines--especially in Korea?
    Answer. No where else today do U.S. forces face such a credible 
threat as on the Korean Peninsula. Mines are integral to blunting a 
North Korean attack and buying time for the deployment of U.S. forces 
for reinforcement and counterattack. Without the ability to integrate 
anti-personnel landmines in planned barriers as well as hasty 
protective minefields, Combined Forces Command's plan for the defense 
of South Korea is at greater risk for ground forces' casualties. As a 
force multiplier, mines offset shortages in troops and material, buy 
time for the defender, and allow reduced force structure under the 
armistice. Additionally, the use of mines in Korea is instrumental in 
protecting the population of Seoul.
                 north korean ballistic missile threat
    Question. Admiral Prueher, recently I cosponsored a bill with 
Senator Cochran in favor of deploying a national missile defense 
primarily because of my concern with developments in North Korea. Are 
you concerned that North Korean ballistic missiles could someday soon 
reach Honolulu or Anchorage?
    Answer. [Deleted.]
    Question. Admiral, considering the difficulties with the North 
Korean economic situation, how serious a threat does the future 
development of an indigenously designed, intercontinental-range 
ballistic missile (ICBM) appear to be?
    Answer. [Deleted.]
    Despite the country's economic difficulties, long-range missiles 
are a high priority for the government and development of the systems 
will continue until they are operational. The North has openly stated 
its intention to continue its missile development program, both for 
national defense and for much needed foreign exchange.

                          subcommittee recess

    Senator Stevens. Thank you very much. The subcommittee will 
stand in recess.
    Admiral Prueher. Thanks very much.
    [Whereupon, at 11:53 a.m., Wednesday, May 6, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                          MONDAY, MAY 11, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:02 p.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Domenici, and Inouye.

                       NONDEPARTMENTAL WITNESSES

STATEMENT OF SANDRA C. RAYMOND, EXECUTIVE DIRECTOR, 
            NATIONAL OSTEOPOROSIS FOUNDATION
ACCOMPANIED BY CHARLES K. SCOTT, II, COMMANDER, DEPARTMENT OF THE NAVY

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Let me welcome all of the witnesses. There 
are a large number of organizations who have requested the 
opportunity to appear before us this year. And we do appreciate 
your interest in the bill.
    To ensure that all of you who have asked to speak get a 
chance to speak today, we have to ask that you limit your 
comments to 4 minutes. But we do have your statements, and I 
want you to know we really do go through them. Your statements 
will each be printed in the record in their entirety.
    I think many witnesses today will raise concerns about 
defense health, the total health program of the Department of 
Defense [DOD]. Senator Inouye and I are working to make sure 
that all active and retired military personnel and their 
dependents receive the best medical care we can possibly make 
available. The subcommittee will markup the 1999 defense 
appropriations bill on Tuesday, June 2nd, and your comments 
today will be considered as we seek to allocate the funds that 
are available to us this year for so many competing priorities 
for the year 1999.
    Now, let me thank you very much for coming and tell you 
that Senator Inouye is at another meeting. He will come here at 
3:15, and I will leave to go to another meeting. But we are 
going to each chair half of the session today.
    Senator Domenici, do you have any comments, sir?
    Senator Domenici. No, thank you, Mr. Chairman.
    Senator Stevens. We are glad to see you here.
    The first witness is Sandra Raymond, to be followed by 
Chief Master Sergeant Krebs. I assume someone has the schedule 
out there, so you all know what your schedule is.
    Fine, thank you very much. Good afternoon, Ms. Raymond.
    Ms. Raymond. Good afternoon, Mr. Chairman. I want to thank 
you and your colleagues for including a $10 million 
appropriation for bone disease research in the fiscal year 1997 
appropriations bill. And I will be very brief.
    I want to say that the grants that you made possible 
through your appropriation have examined the issues which are 
directly relevant and affect the very readiness of military 
personnel, DOD's most precious asset. The outcomes of the DOD 
bone research program may well change the way in which our 
fighting force is fed, is trained and receives health care 
services. This is work that has to be done by DOD.
    It never has been done by any other branch of government in 
the past, and it will not be done in the future by any other 
branch of government. Because, Mr. Chairman, unfortunately, 
many of the young people who come to military service are 
sedentary prior to entering the service. Their bodies, 
especially their bones, are not used to the kinds of intensive 
physical exercise demanded of them during boot camp. And 
consequently, they sustain numerous injuries.
    Stress fractures are the most prevalent of the injuries 
that they suffer. Both men and women in the military suffer 
from stress fractures. The minimum time away is 6 to 8 weeks. 
But fractures are slow to heal, and it can take up to 3 months. 
The bottom line is that stress fractures do not always heal. 
Untreated and repeated stress fractures can lead to a complete 
fracture.
    This type of injury contributes to a high rate of attrition 
during training. For example, the attrition rate in 1 year was 
44 percent of female Marine candidates at Quantico. But one 
training intervention of 22,000 marines showed that as much as 
$4.5 million could be saved by reducing stress fractures in the 
military. And that was only 22,000 marines.
    It has been clearly demonstrated that young women are not 
getting enough calcium and are not getting enough exercise. 
Their bones are thinning at a much earlier age than we 
previously thought. And now, in recent studies, we have learned 
that most military women do not consume enough food to meet 
their nutritional requirements. They do not consume enough 
calcium.
    These deficiencies that occur, either before entering the 
military or after entering the military, put these women at 
high risk for these fractures certainly during combat and 
throughout life. Strenuous training can also cause bone loss 
and fractures because their estrogen levels diminish with 
excessive training. And estrogen is known to be the key 
ingredient of the calcium that is absorbed into the bones. So 
the loss of estrogen causes these stress fractures, as well.
    So how the military addresses these questions regarding 
bone health is solely dependent on the bone health research 
program at DOD. Therefore, it is urgent that you continue to 
build a bone disease research program. And we ask you to 
appropriate $20 million in the fiscal year 1999 budget.

                           prepared statement

    Now, I want to turn the microphone over to Commander Scott, 
who is going to tell you firsthand how bone disease has 
interrupted his exemplary military service and how costly this 
has been to him, to his family and to DOD.
    [The statement follows:]

                Prepared Statement of Sandra C. Raymond

    Mr. Chairman and Members of the Subcommittee, on behalf of 
the National Coalition for Osteoporosis and Related Bone 
Diseases, we want to thank you for giving us the opportunity to 
discuss bone disease research funding in fiscal year 1999. My 
name is Sandra Raymond, Executive Director of the National 
Osteoporosis Foundation (NOF) and I am accompanied by Commander 
Charles Scott with the Department of Navy. Commander Scott 
currently suffers from multiple myeloma, a complex cancer of 
the bone marrow which invades and destroys bone. He joins me 
today to speak from a patient's perspective. We are appearing 
before your Subcommittee with the hope of realizing one common 
goal of improving bone health by reducing the incidence of 
osteoporosis, Paget's disease of bone, Osteogenesis Imperfecta, 
multiple myeloma, and other bone diseases. We believe we make a 
convincing case for why the continuation of the Department of 
Defense (DOD) osteoporosis and related bone diseases program is 
critical to our national security. We also believe that we need 
research support for the special health related problems of the 
military which are not addressed by the National Institutes of 
Health budget, such as stress fractures and juvenile 
osteoporosis.
    First, on behalf of the entire bone community, we want to 
thank you, Mr. Chairman, and your colleagues on the 
Subcommittee for the $10 million you appropriated for bone 
research in the fiscal year 1997 DOD appropriations bill. It 
was truly appreciated and has been put to good use. Out of the 
$10 million appropriated, $9.7 million was awarded to fund 
grants. The remainder was allocated to the Small Business 
Innovative Research fund grants. We believe that the scientific 
community has reached an exciting threshold. The timing of this 
program and the availability of additional funds for bone 
research are fortuitous. The genes that would predict bone 
density are being discovered but we do not know what those 
genes do, how they do it or how genetic tests could be used to 
predict and prevent diseases. The Department of Defense 
resource could lead to these exciting discoveries which, in 
turn, would aid in prevention of bone diseases.
    There are many important diseases which deserve attention 
and funding under the Department of Defense budget, but we want 
to make Congress particularly aware of the bone diseases which 
frequently do not get the attention they deserve. We also want 
to educate Members on the newest revelations surrounding the 
correlations between bone disease and cancer and more recently, 
depression. What we can do to prevent and treat these diseases 
that affect our military population are questions we believe 
need to be addressed now.
    The Military Health Services System serves 8.4 million, 
including active and retired military personnel and their 
dependents. In fiscal year 1995, program costs rose to $15.3 
billion. The economic burden of health care costs from this 
range of chronic diseases is staggering. For example, the 
combined annual cost to society of medical care and lost wages 
for osteoporosis alone is estimated at $13 billion. Despite 
these overwhelming figures, osteoporosis and related bone 
diseases are preventable if measures are taken before an 
individual reaches the mid-30's--which encompasses the time 
period that many men and women spend in the military. Skeletal 
development in average healthy individuals is maximal at age 25 
in women and 30 to 35 in men.
    The increasing number of women in the military presents new 
health challenges, some of which are directly related to 
osteoporosis. In fact, a high percentage of women in the 
military are African American and very little information 
exists regarding this group of women who suffer from eating 
disorders as well as other health problems. Once bone is lost, 
it can never be fully replaced, so prevention is of the utmost 
importance. It is essential that young men and women in the 
military build up their bone mass to maximum capacity in order 
to be well equipped throughout their life span. Understanding 
the correlation between bone loss and excessive exercise, 
amenorrhea, depression, and smoking in military personnel will 
only serve to strengthen the overall readiness of the defense 
system as well as generate significant cost savings through 
reduction of stress fractures.
    The DOD is developing its own focus on bone research with 
relevance to the military age population. This special focus is 
welcomed by the bone community as it is not duplicating the 
important work being funded by the National Institutes of 
Health. Much of our current knowledge of bone diseases has been 
derived from studying postmenopausal white women. Our 
understanding of bone metabolism would be greatly strengthened 
by this new DOD research emphasis. The DOD Bone Research 
Program aims to enhance military readiness by improving bone 
health of young men and women.
    One important goal of the DOD program is to enhance 
military readiness by reducing the incidence of fractures which 
incur costs and lost time, during physically intensive 
training. Bone fractures are a major problem for the military 
population. One training intervention research project among 
22,000 recruits in the U.S. Marine Corp in San Diego showed 
that as much as $4.5 million could be saved by reducing stress 
fractures. We need research in determining approaches to making 
these fractures less common. This is a problem for both sexes, 
but it is particularly important for women. This is relevant 
now because there are more women in the military and women have 
lower bone mass than men which makes them more susceptible to 
fractures. Research should be direct to finding ways of 
increasing bone mass to prevent fractures.
    Military training programs require recruits to perform at a 
much higher physical stress level than is required by civilian 
life. Some civilians who become soldiers have stress fractures 
of the lower limbs only when performing their new duties. Those 
soldiers apparently suffer from ``situational osteoporosis'' in 
that their new bones are not strong enough to sustain their new 
intended use.
    Stress fractures are a problem in 10-15 percent of women 
recruits during the 8 weeks of basic training. With the 
increasing number of women in the military, the bone health of 
female recruits becomes a concern of growing proportions if 
they are to serve at maximum capacity and strength. According 
to the Army, the minimum time away from significant duty for a 
male or female soldier who develops a stress fracture is 6-8 
weeks. Full recovery time for those with stress fractures 
generally takes as long as 12 weeks. Stress fractures are among 
the most frequent injuries that take men and women in the Army 
off duty.
    The leadership of the Army's osteoporosis and related bone 
diseases research project is aware that achieving bone strength 
takes more than measuring the bone density of potential 
recruits and screening out the ones with low bone mass. To 
advance the understanding of overall bone health or military 
men and women, we must develop the ability to predict 
susceptibility to stress fractures through studying and 
environmental influences.
    To achieve peak bone mass as a young adult and retain the 
inner structural strength that bone provides, bone weakness 
must be attacked from several fronts. Important research 
questions must be answered. For example, how do different 
biochemical forces such as weight-bearing and muscle 
development impact bone cells? How can we detect the 
microscopic bone damage that builds up during training and 
leads to stress fractures? What is the clinical physiological 
impact of physical fitness and diet on peak bone mass? To what 
degree do environmental factors such as smoking, carbonated 
beverages and alcohol intake relate to the achievement and 
retention of peak bone mass? What are the predictors of 
fracture risk such as genetics, physical characteristics and 
hormonal factors? What are the best prevention, diagnostic and 
treatment strategies for the young population?
    The military also has an exceptional opportunity to conduct 
longitudinal studies of bone physiology in young people because 
it retains individuals from ages 18 through 22. This is an 
opportunity which should be fully utilized through cooperation 
between military and civilian scientists. Nonetheless, while 
the military is primarily focused on this age group, it is also 
concerned about the health of its military families and 
retirees who will also benefit from the basic and clinical 
research performed under the guidance of the DOD. And now I'd 
like to introduce Commander Charles Scott who will explain how 
multiple myeloma, a bone disease, has affected his capacity to 
serve.
    My name is Commander Charles Scott. I am a Naval Aviator, 
Experimental Test Pilot, Aeronautical Engineer and Persian Gulf 
Veteran. In December 1996, after suffering a broken back, I was 
diagnosed with multiple myeloma which is a complex cancer of 
the bone marrow that invades and destroys bone. As a result of 
this disease I have sever osteoporosis. Each year 14,000 new 
cases of myeloma are diagnosed. The occurrence of myeloma has 
increased dramatically in the past decade. Some experts believe 
that the increase in incidence of multiple myeloma may be 
related to toxic exposure, viral links, and chemical 
pollutants. The average life expectancy from the time of 
diagnosis is three and one half years; there is no known cure.
    I demonstrate the tangible cost of bone disease to the 
military. The Navy has paid over nine million dollars to train 
me in the highly technical fields in which I am qualified. This 
investment by the tax payers of this country is in jeopardy due 
to my bone disease and cancer. We are asking for $20 million 
for bone disease research. If the research resulting from the 
DOD Bone Health and Military Medical Readiness Research Program 
could help me recover my health and put me back into a flying 
status, nearly one half of the $20 million we are requesting 
from you today could be recovered.
    By understanding the mechanisms of bone destruction in 
myeloma, we can learn how the dynamic equilibrium of bone 
damage and bone healing actually works. In myeloma patients, 
bone damage is dramatically increased but perhaps more 
importantly bone repair is almost completely blocked. Myeloma 
bone disease cripples 50,000 Americans in the prime of their 
lives. All Americans will benefit from increased knowledge of 
what can make bones heal and become stronger. Research focusing 
on the reduction of tumor burden, causative factors and better 
treatments will benefit everyone suffering the debilitating 
effects of bone disease and myeloma.
    Reduction in military readiness, our ability to fight and 
win wars, runs the gambit from the new recruit who fails to 
complete basic training due to a bone fracture to the seasoned 
veteran like me whose career is cut short by a disabling bone 
disease.
    In conclusion, it may well be that what we learn from DOD 
research will greatly contribute to bringing bone diseases 
under control because osteoporosis and other related bone 
diseases such as Paget's disease, osteogenesis imperfecta and 
multiple myeloma are serious threats to public health affecting 
an estimated 30 million Americans. These diseases cause loss of 
independence, disability, pain and, in some cases, death. Bone 
diseases affect women, men, and children of all ages. From 
infancy to the oldest old, these diseases profoundly alter the 
quality of life for millions of Americans. The military life 
asks much more of its people in a physical sense than does 
civilian life and it must, therefore, invest in discovering the 
means to achieve top fitness. We urge you to continue your 
strong support for bone disease research and ask that you 
provide $20 million in funding for DOD's program in fiscal year 
1999.
    Mr. Chairman, the total defense which this nation seeks, 
involves a great deal more than building airplanes, ships, guns 
and bombs. We cannot be a strong Nation without strong bones. 
By discovering how we can build bone mass to peak capacity in 
our young recruits, we will not only build strong military, we 
will build a strong nation ready to withstand the stresses of 
an extended life span. And so we must recruit not only men, 
women, and materials but also knowledge and science in the 
service of national strength.
    Thank you. We will be happy to answer any questions.

    Commander Scott. Thank you. My name is Commander Charles 
Scott. I am a Naval aviator, experimental test pilot, 
aeronautical engineer, and Persian Gulf veteran.
    In December 1996, after suffering a broken back, I was 
diagnosed with multiple myeloma, which is a complex cancer of 
the bone marrow that invades and destroys bone. As a result of 
this disease, I have severe osteoporosis. Each year, 14,000 new 
cases of myeloma are diagnosed. The occurrence of myeloma has 
increased dramatically in the past decade.
    Some experts believe that the increased incidence of 
myeloma may be related to toxic exposure, a viral link or 
chemical pollutants. The average life expectancy from the time 
of diagnosis is 3\1/2\ years. There is no known cure.
    I demonstrate the tangible cost of bone disease to the 
military. The Navy has paid over $9 million to train me in the 
highly technical fields in which I am qualified. This 
investment by the taxpayers of this country is in jeopardy due 
to my bone disease and cancer.
    We are asking for $20 million for bone disease research. If 
the research resulting from the Department of Defense Bone 
Health and Military Medical Readiness Research Program could 
help me recover my health and put me back into a flying status, 
nearly one-half of the amount we are requesting from you today 
could be recovered.
    By understanding the mechanisms of bone destruction in 
myeloma, we can learn how the dynamic equilibrium of bone 
damage and bone healing actually works. In myeloma patients, 
bone damage is dramatically increased. But, perhaps more 
importantly, bone repair is almost completely blocked.
    Myeloma bone disease cripples 50,000 Americans in the prime 
of their lives. All Americans will benefit from the increased 
knowledge of what can make bones heal and become stronger.
    Senator Stevens. Thank you very much, Commander Scott. We 
appreciate your statement. And we will try to do our best.
    Ms. Raymond. Thank you.
    Senator Stevens. There is a decreased amount available, in 
terms of outlays this year, but we will do our best. Thank you 
very much.
    Ms. Raymond. Thank you.
    Senator Stevens. Now, Sergeant Joshua Krebs, representing 
the Air Force Sergeants Association.
    Senator Inouye said he has come just because he is afraid I 
might be lonesome. [Laughter.]
    Thank you, Sergeant.
STATEMENT OF JOSHUA W. KREBS, CHIEF MASTER SERGEANT, 
            USAF (RETIRED), MANAGER, LEGISLATIVE 
            AFFAIRS, AIR FORCE SERGEANTS ASSOCIATION
    Sergeant Krebs. Thank you, sir.
    Mr. Chairman, and distinguished committee members, on 
behalf of the members of the Air Force Sergeants Association 
[AFSA], thank you for this opportunity to present our views on 
funding for quality-of-life issues for fiscal year 1999.
    The most essential element in defending this great Nation 
is quality people. We understand that budgetary considerations 
drive many decisions, but we ask that you protect and, where 
possible, expand quality-of-life benefits so important to our 
military members.
    We urge you to provide a raise in military base pay that, 
as a minimum, keeps pace with the employment cost index. 
Several years ago, the Congress authorized the Department of 
Defense to extend the Women and Infant Children [WIC] and Food 
Stamp programs to members serving overseas. Due to bureaucratic 
infighting between the Department of Defense and the Department 
of Agriculture over responsibility for funding of these 
programs, this benefit is still not available to the junior 
enlisted members who need it.
    AFSA asks that this committee include funding for these 
programs in the fiscal year 1999 Department of Defense 
appropriations bill.
    Last year, the Senate took the lead in getting a medicare 
subvention demonstration project, where the Health Care 
Financing Administration will reimburse DOD for health care for 
medicare eligibles, enacted into law. This project will start 
to return the often disenfranchised medicare eligible military 
retirees to the military health system. But even if fully 
implemented, subvention will only care for those retirees 
living near bases.
    This year, we urge the Senate to take the lead in providing 
an additional health care option for those over 65. AFSA 
members ask you to enact, as a minimum, a demonstration project 
to allow over-65 retirees to enroll in the Federal Employees 
Health Benefits Program.
    Continued funding for community support activities has 
never been more important. As more and more enlisted families 
see both family members working, access to quality child care, 
such as provided by child development centers, is vital. Family 
support center programs provide development preparation for the 
entire family, family support during separations, and expert 
guidance when deployed members return with their families.
    These and other family programs are critical components of 
maintaining readiness and managing the stresses of high 
PERSTEMPO for active and Reserve members and their families.
    Mr. Chairman, we have touched on a few of the areas that 
need your attention. AFSA appreciates the difficulties that you 
face, and we thank you for this opportunity to share our 
thoughts on these important issues. We trust that you will do 
what is right for enlisted members, current and future, active 
and retired, and their families.
    Thank you.
    Senator Stevens. Any questions, gentlemen?
    [No response.]
    Senator Stevens. Thank you very much.
    [The statement follows:]
                 Prepared Statement of Joshua W. Krebs
    Mr. Chairman and distinguished committee members, on behalf of the 
members of the Air Force Sergeants Association (AFSA), thank you for 
this opportunity to present our views on funding for quality-of-life 
issues that affect active, reserve component and retired enlisted 
members and their families. AFSA represents enlisted members of the Air 
Force, Air Force Reserve and Air National Guard--active, retired, and 
their family members.
    The most essential element in defending this great nation is 
quality people. At a time when the nature of military service is 
changing, when the operations tempo is extremely taxing on the quality 
of lives of military members and their families, and when the 
administration forecasts further personnel cuts--while maintaining 
worldwide operations--we must make sure the needs of our current and 
past military members are met. Mr. Chairman, we understand that 
budgetary considerations drive many decisions, but we ask that you 
protect, and where possible expand, quality-of-life benefits so 
important to all military members.
                       compensation and benefits
    Military base pay is tied to the Employment Cost Index (ECI). Yet 
to save money, current law limits pay raises to the ECI minus one-half 
of one percent. Again this year the administration has requested the 
full amount required by law--further eroding the value of military 
compensation. Sir, we urge you to provide funding for a raise in 
military base pay that, as a minimum, keeps pace with the ECI. Those 
wearing a uniform, whether be it on active duty, or in the reserve or 
guard, deserve no less.
    Military members are frequently reassigned at the discretion of the 
government. Yet, despite the recent improvements in reimbursement 
rates, they still pay 26 to 33 cents of every dollar out of their own 
pockets for the cost of these moves. The situation for our most junior 
members is even more severe. We need to pay these members a temporary 
lodging expense (TLE) for their first permanent assignment move 
starting next year. These members incur the same expenses as do members 
on their second or subsequent move, yet they do not receive the same 
compensation. For example, an airman with a spouse and one child moving 
to Montgomery, Alabama, on his first move may experience temporary 
living expenses of $75 to $100 per day (for which there is currently no 
provision for reimbursement). Over a 10-day period, this could amount 
to $1,000--nearly five weeks of the airman's basic pay. TLE, which 
reimburses up to $110 per day for up to 10 days, would fully reimburse 
this airman and free his pay for other necessities.
    The commissary is consistently rated as a top non-pay compensation 
benefit, yet every few years, some group challenges the commissary 
benefit. Enlisted people count on the savings from commissary 
purchases, up to 29 percent over commercial stores, to extend already-
stretched income--partially offsetting lagging pay raises, inflation, 
and out-of-pocket housing and moving costs. To many young enlisted 
families, elimination of the commissary subsidy would have the same 
impact as a nine percent pay cut. We need to send a strong message to 
all current enlisted members that this vital benefit will be preserved. 
This important benefit should also be extended to the guard and reserve 
on a full-time basis. These members are on call 24 hours a day, 365 
days a year to defend our country. Yet, we limit their opportunities to 
use the commissary--this is unfair and should stop!
    Several years ago the Congress authorized the Department of Defense 
to extend the Women and Infant Children (WIC) and food stamp programs 
to members serving overseas. Due to bureaucratic infighting between the 
Department of Defense and the Department of Agriculture over 
responsibility for funding of these programs, this benefit is still not 
available to the junior-enlisted members who need it. AFSA asks that 
this committee including funding for these programs in the fiscal year 
1999 Department of Defense Appropriations Bill.
                              health care
    Last year, the Senate took the lead in getting a Medicare 
Subvention Demonstration Project (where the Health Care Financing 
Administration will reimburse DOD for health care for Medicare-
eligibles) enacted into law. This project will start to return the 
often-disenfranchised Medicare-eligible military retirees to the 
military health service system. But even if fully implemented, 
subvention will only care for those retirees living within TRICARE 
catchment areas (near bases). This year, we again urge the Senate to 
take the lead in providing an additional health care option for those 
over-65. Include in this year's Department of Defense Authorization 
Bill, as a minimum, a demonstration project to allow over-65 retirees, 
as an option, to enroll in the Federal Employees Health Benefits 
Program. Many served our great nation in World War II and Korea. 
Frankly, many retirees feel that they ``kept the faith,'' while the 
government has not.
    For many years, health care concerns were strictly a retiree issue, 
but not anymore. As ``small hospitals'' are downsized to large clinics, 
active duty members must bear increased costs for health care for their 
dependents and must increasingly rely on DOD's TRICARE networks to 
provide health care. Not many years ago, it was very unusual for an 
active duty member to have to pay for health care for his or her 
dependents. This is a major quality-of-life issue for current military 
members and causes an unexpected financial burden for junior enlisted 
members. This same situation does not exist everywhere. For instance, 
if you are stationed in San Antonio, Texas, or Washington, D.C., this 
same level of care would be available at a military hospital. As 
military members move from location to location throughout the country, 
some are learning the hard way that there is not a consistent health 
care benefit for all beneficiaries.
    When today's military members see what is happening to their health 
care, and then hear the ``horror stories'' about what has happened to 
the health care promise made to their predecessors, they surely must 
question what will be available for them in the future. This nation 
needs to provide a uniform, comprehensive health care benefit for all 
military members and their dependents, whether on active duty or 
retired.
    In addition to expanding the health care options for Medicare-
eligibles, TRICARE must be improved for all beneficiaries. As a minimum 
we ask that you:
  --Establish improved payment levels and procedures to physicians so 
        that they will participate in TRICARE.
  --Provide viable options to TRICARE Prime. Start by restoring TRICARE 
        Standard to the level it was originally intended--to cover 80 
        percent of medical costs for active duty dependents and 75 
        percent of the costs for retired members under age 65, and 
        their dependents.
  --Restore TRICARE Standard as a second payer when members have other 
        insurance. Currently, TRICARE Standard will only reimburse the 
        member if the other insurance reimburses at a lower rate than 
        Standard.
  --Provide health coverage, including access to the National Mail 
        Order Pharmacy Program, to all military retirees and their 
        dependents, regardless of age.
  --Improve customer education. The rules are confusing. Let people 
        know, in the simplest of terms, how and where they can get 
        medical care
                           community support
    AFSA asks for your continued support for community support 
activities. As more and more enlisted families see both family members 
working, access to quality child care such as provided by child 
development centers becomes increasingly important. Other base 
facilities like libraries and physical fitness centers provide a sense 
of community to a base and also deserve continued funding.
    As the nation's military moves from a forward-based force to a 
contingency-based force that deploys from bases in the United States, 
support programs to help military members and their families become 
increasingly important. These centers coordinate the efforts of in-
house and base-level services in Family Readiness Programs. These 
programs provide deployment preparation for the entire family, family 
support during separations, and expert guidance when deployed members 
reunite with their families. These and other family programs are 
critical components of maintaining readiness and managing the stresses 
of high PERSTEMPO for active and Reserve members and their families. 
The importance of the Family Support Centers cannot be overstated, and 
they deserve full funding.
                     retirement system and benefits
    The military retirement system has changed three times--each time 
decreasing the value of the benefit. It was last changed in 1986 and 
now only provides retirement pay based on 40 percent of the high three 
years' monthly average of base pay, as compared to the previous 50 
percent at 20 years of service. What effect do the 1986 changes in 
retired pay have on current enlisted retention? The current mid-career 
retention figures seem to indicate that the affected members are 
starting to ``vote with their feet.'' It is time to relook this 
devaluation of the military retirement system and the effect it has on 
current retention and future readiness.
    As we travel throughout the country and talk to guard and reserve 
members, many ask if their increased contributions to the defense of 
this great nation are appreciated. The current guard and reserve 
retirement system has been in place for many years and served us well. 
But, as the guard and reserve forces continue to play an increasingly 
important role in our nation's defense, AFSA believes it is time to 
reevaluate the need for guardsmen and reservists to wait until age 60 
to draw retirement benefits. Perhaps a graduated retirement age, tied 
to active service as a guard or reserve member is more appropriate in 
today's environment.
    Mr. Chairman, we need to eliminate the dollar-for-dollar offset of 
military retired pay when a retiree is receiving VA disability pay. 
Please keep in mind that veterans, including career civil servants who 
served less that a full career, receive their full VA benefit, while 
those military members who served to retirement see a dollar-for-dollar 
loss of retirement pay for each dollar of VA compensation received. 
This situation uniquely targets military retirees, despite the fact 
that retired pay and disability compensation are paid for entirely 
different reasons.
    Many have questioned the cost of totally eliminating the offset 
($1.6 billion annually) and claim that concurrent receipt would benefit 
mainly officers because officers have more retired pay to offset. This 
doesn't pass the logic test, as each unfairly sacrifices an equivalent 
percentage of retired pay. Others question the need for additional 
compensation for retirees with low disability ratings. Both positions 
beg questions of equity, fairness, and the honest intent of disability 
compensation and that of retired pay.
    Although this nation's ultimate goal should be the total 
elimination of the unfair offset between military retired pay and VA 
disability compensation, we need to, as a minimum, provide some 
``dual'' compensation for those with the most severe disability 
ratings. These disabilities damaged the human body during service to 
the nation and, in many cases, left the individual retired military 
member unable to work.
                               conclusion
    Mr. Chairman, we have touched on a few of the areas that need your 
attention. AFSA appreciates the difficult task that you face, and we 
thank you for this opportunity to share our thoughts on these important 
issues.
    We are very concerned that the Air Force continues to experience 
retention problems among those most experienced (more than ten years of 
service) personnel. Although not at a critical stage yet, we as a 
nation must remember the hollow force days of the late 1970's and make 
sure we never return to those days. The continued strength of the Air 
Force, and all services, will depend on the ability to recruit, train, 
and retain quality people. We can achieve those goals by providing a 
reasonable quality-of-life for our members and their families as they 
serve our nation. Simply put, in order to keep a fit, fighting force 
for the twenty-first century, we as a nation must dedicate the 
resources to pay for it.
    Again, thank you for this opportunity to express AFSA's concerns. 
As you face the tough issues, we trust that you will do what is right 
for enlisted military members--current and future, active and retired 
and their families. They deserve no less. As always, AFSA is ready to 
assist you on matters of mutual concern.
STATEMENT OF DAVID JOHNSON, PH.D., EXECUTIVE DIRECTOR, 
            FEDERATION OF BEHAVIORAL, PSYCHOLOGICAL AND 
            COGNITIVE SCIENCES
    Senator Stevens. Dr. David Johnson, Executive Director, 
Federation of Behavioral, Psychological and Cognitive Sciences.
    Thank you, Doctor.
    Dr. Johnson. Thank you, Mr. Chairman.
    Mr. Chairman, normally I speak to the subcommittee about 
the basic or 6.1 behavioral research budget, but I am going to 
spend most of my time today on a proposed cut to applied 
advanced development, or 6.2 and 6.3, research--cuts that would 
destroy the behavioral research program at the Air Force.
    Most applied and advanced development work on manpower, 
personnel and training is managed by the Armstrong Lab at 
Brooks Air Force Base in San Antonio. Behavioral research and 
development [R&D] is funded this year at $11 million. The 1999 
budget request would reduce funding to $3 million. That will 
kill the program.
    If 6.2 and 6.3 research--that is, the development of 
research in products--goes by the wayside, the 6.1 program will 
quickly follow suit, since it will be left as the front end of 
a pipeline leading nowhere. If the Air Force abandons human 
performance research, what will it lose?
    It will lose its ability to adapt personnel to new skill 
requirements, to maintain readiness in the face of an 
increasingly diverse personnel pool, to maintain strength and 
quality while continuing to downsize, to incorporate usability 
planning into new systems designs, and to meet the increasing 
demand for distributed training. It will even lose its ability 
to adapt its personnel to the changing nature of warfare. That 
is pretty fundamental, and it is a lot to lose.
    We are strongly urging the subcommittee to stop the 
devastation of the Air Force manpower, personnel and training 
R&D program. We ask the subcommittee to recommend explicitly a 
funding level of $11 million for the behavioral research 
programs of the Armstrong Lab. We ask you, in addition, to 
support the administration's request for $12.567 million for 
6.1 behavioral research at the Air Force.
    Let me turn briefly to the behavioral research budgets of 
the Army and Navy. Both of these budgets are also under stress. 
I want to thank the subcommittee for its role last year in 
saving the Army Research Institute [ARI]. Congress appropriated 
$21 million for those programs for fiscal year 1998. After 
being taxed to pay for unbudgeted activities, I understand ARI 
finally received only $18 million in this appropriation. The 
request for next year, $16.7 million, is a large cut from the 
appropriated fiscal year 1998 amount.
    We ask the subcommittee to maintain ARI at $21 million, its 
appropriated fiscal year 1998 level. We also ask that the 
subcommittee support the administration request of $39.69 
million for the 6.1, 6.2 and 6.3 behavioral and bioengineering 
programs at Office of Naval Research [ONR].
    In closing, however, it is important to mention that the 
ONR, ARI and Air Force Office of Scientific Research [AFOSR] 
budgets have been severely impacted by withholding of 
significant amounts of funds to help pay for unbudgeted, non-
research costs, such as the cost of supporting recent efforts 
in the Persian Gulf. Those unanticipated cuts, amounting to 15 
percent in the current fiscal year for behavioral research at 
ONR, wreak havoc with research programs. We hope that the 
subcommittee will continue working to improve our means of 
responding to unplanned, costly events like the Persian Gulf 
and Bosnia.
    Thank you.

                           prepared statement

    Senator Stevens. Thank you very much. We appreciate your 
comments, and we will once again take a good look at them.
    Dr. Johnson. I appreciate that.
    [The statement follows:]
               Prepared Statement of David Johnson, Ph.D.
    Mr. Chairman, members of the Subcommittee, my name is David 
Johnson. I am Executive Director of the Federation of Behavioral, 
Psychological and Cognitive Sciences, an organization of 17 scientific 
societies and some 150 university graduate departments. The scientists 
of the Federation carry out behavioral research, including research of 
value to the Armed Services. I am here today to talk about the 
behavioral research budget requests for the Army, Navy and Air Force.
Anticipated Air Force Cuts Are Devastating to Research
    Usually when I appear before this Subcommittee, I discuss the 6.1 
and 6.2 or basic and applied behavioral research budgets rather than 
the advanced development, or 6.3, research budget. I speak for 
university-based scientists, and most of the military work they do is 
of the 6.1 variety with some occasional 6.2 work as well. But today, in 
addition to discussing the basic research budget, I also want to say a 
few words about a very serious problem that is occurring with the 
applied and advanced development budgets for Air Force behavioral 
research. Most of this research is managed through that portion of the 
Air Force Research Laboratory that was known as the Armstrong 
Laboratory before the most recent reorganization of air force research. 
The activities to which I refer are managed at Brooks Air Force Base in 
San Antonio.
    As you know, the military research budget is structured like a 
pipeline. It begins with basic research at one end and ends with the 
production of products at the other end. The Armstrong Lab is 
responsible for developing the products that flow from manpower, 
personnel, and training research in the Air Force. Those products are 
relevant to an astonishing array of Air Force needs from weapons 
design, to improvements in simulator technology, to improving crew 
survivability in combat, to faster, more powerful, and less expensive 
training regimens--and these examples just scratch the surface of the 
kinds of products that come out of the Armstrong Lab.
    The fiscal 1999 request for Air Force research would reduce the 
appropriation for applications and advanced development flowing from 
behavioral research from $11 million to $3 million. At $11 million, the 
program pays for itself many times over both in dollars and in lives 
saved. A cut to $3 million will kill the program. The product 
development side of the behavioral research pipeline for the Air Force 
will be eliminated. It is a short step from that to eliminating the 
whole pipeline.
    This fatal cut is short-sighted in the extreme. The work being done 
at the Armstrong Lab is the only research being done anywhere today 
that will provide the knowledge base needed to address tomorrow's 
formidable Air Force manpower, personnel and training problems. We know 
there will be new skill requirements, that force diversity will 
increase, that downsizing will continue, that the demand for 
distributed training will increase, that there will be new system 
design requirements, and that the very nature of warfare will continue 
to change. This cut will assure that the people of the Air Force will 
not be prepared for these changes.
    Virtually every technique the Air Force uses to select, classify 
and train its personnel, to design its tasks, and to evaluate its 
performance can be traced directly to work either done by or supported 
by the military--much of it by the Air Force. Failure to sustain this 
investment will have a profound Air Force-wide impact on force 
capability and readiness down the road.
    This cut is analogous to choosing to stick with the F-15 and the B-
52 because they worked in the past. No one in the military would make 
such a choice with respect to hardware. But that is the choice that is 
being made about people if this cut is upheld.
    Behavioral research and its products are at a particular 
disadvantage in the current decision-making atmosphere about military 
research because decisions about these programs are being made on the 
basis of short-term needs identified by each of the major commands. 
This atmosphere for decision making favors hardware development as a 
priority since those are the easily identifiable needs.
    The fact that behavioral research can determine whether personnel 
will be able to use that hardware is not obvious until something goes 
wrong. For example, the military and the Federal Aviation 
Administration have been partners in developing the next generation of 
terminals for air traffic control. Insufficient attention was paid to 
human factors in the early decisions about those terminals. It took air 
traffic controllers complaining that they couldn't use the terminals to 
alert officials that there are serious problems with the hardware and 
software. The effect has been that very costly retrofits are now 
underway to make the terminals usable by air traffic controllers. And 
regardless of the retrofits, the terminals will not be as usable as 
they would have been had human factors been integrated early in the 
process because the architecture of the terminals limits the range of 
``fixes'' that are feasible. The unplanned expenditures these fixes 
have necessitated so far--and there is still a long way to go--could 
have fully funded the behavioral programs at the Armstrong Lab. This is 
the kind of problem that can be expected to occur again and again if 
the programs in question are eliminated.
    Unfortunately from a political point of view, the benefits of the 
products of behavioral research are Air Force-wide, not command 
specific. That means that no particular major command has a sense of 
ownership for behavioral research and its applications, whereas there 
is likely to be a strong advocate for any hardware development that 
will fit the immediate needs of a major command. The effect of that 
lack of a sense of ownership is obvious in the cut that is now 
contemplated. It is appropriate for Congress to take positive action on 
this problem in order to prevent the making of a mistake that will not 
easily be made right. Once the personnel who staff the Armstrong Lab 
are disbanded, the capability to do this work will simply be lost.
    We strongly recommend that this Subcommittee do all in its power to 
see that funds are restored. The behavioral research programs are 
distributed among several subfunctions. Thus, in order to assure 
restoration of the funds, specific language directing that the funds be 
restored is needed. And in order to accomplish the restoration, 6.2 
research at Armstrong would need to be funded at $50,476,000 versus the 
$40,929,000 requested, and 6.3 research would need to be funded at 
$6,928,000 versus the $6,636,000 being requested. Those amounts would 
place the programs at their fiscal year 1997 funding levels without any 
accounting for inflation. The total restoration would be $9,839,000.
    Before turning to the Army and Navy budgets, let me say that we 
support the administration request for 6.1 Air Force behavioral 
research. The requested amount is $12,567,000. Let me repeat, however, 
that without the 6.2 and 6.3 programs, the basic research budget will 
soon be in jeopardy.
    I would add that one immediate blow to basic research would come 
from the cuts at Armstrong. As part of its mission to improve manpower, 
personnel, and training, Armstrong has collected scientific data on all 
new personnel in the Air Force for many years. That data base is unique 
in the world for basic research in cognition. There is no other 
cognitive science database anywhere as complete as the one at 
Armstrong. As such, this database has been a treasure trove for basic 
researchers striving to understand how the human brain organizes and 
uses information. If that database is lost because of the cuts that are 
contemplated, the blow to the pace at which our understanding of human 
thought processes is growing will be severe.
Proposed Cuts At the Army Research Institute Would Also Cause Serious 
        Damage
    In turning to the proposed budget for the Army Research Institute, 
let me thank the members of the Subcommittee for their role in seeing 
that there is any budget at all for basic behavioral research at the 
Army. As the budget request for fiscal 1998 was being built, it 
appeared that the Army Research Institute would be eliminated. That 
initial direction was modified, and as the request came to this 
Subcommittee, a crippling cut, much like that now contemplated at the 
Air Force was requested. In the end, Congress decreased the level of 
cut and saved the program. While I understand that ARI finally received 
only $18 million of the $21 million appropriated by Congress for fiscal 
year 1998, it was, nevertheless, congressional action that saved the 
program.
    The total behavioral research request for ARI for fiscal year 1999 
is $16.17 million, another substantial cut from its currently 
appropriated amount. That combined figure represents requests of $2.47 
million for 6.1, $8.60 million for 6.2, $3.02 million for 6.3 and $2.08 
million for 6.5. We have long argued before this Subcommittee that 
behavioral research funding for the Army is much too low given that the 
Army is the most personnel intensive of the armed services. The request 
for fiscal year 1999 continues the pattern of cuts for ARI that we have 
seen in previous years.
    And once again, we ask the Subcommittee to recommend funding for 
ARI at the fiscal year 1998 appropriated level of $21 million. That 
figure would represent appropriations of $2.5 million for 6.1, $9 
million for 6.2, $4.3 million for 6.3, and $5.2 million for 6.5. Among 
its other research duties, ARI is the only research body in the armed 
services carrying out research on leadership, on sexual harassment, and 
on special training needs of soldiers for peace-keeping missions. The 
figure we are recommending that you support for 6.1 research represents 
a cut of 50 percent in unadjusted dollars from ARI's 1986 appropriation 
for basic research. If inflation is taken into account, it becomes 
clear that ARI has more than done its share of downsizing.
Taxing Naval Research For the Cost of Unanticipated Events is Wreaking 
        Havoc
    In commenting on the budget request for behavioral research at the 
Office of Naval Research, I want to raise an issue that has hit this 
budget especially hard in recent years, but that has also had 
significant effects on the research budgets of the Army and Air Force 
as well. It is characteristic of research budgets that they are paid 
out slowly over the course of a fiscal year. On the civilian side, this 
has made research budgets vulnerable when there are rescissions. On the 
military side, the research budgets have been vulnerable to unplanned 
taxation to pay for unanticipated events like Bosnia and now the 
Persian Gulf. It takes no special insight to see that inability to rely 
on a budget wreaks havoc with program planning. Funds are committed for 
work, and then those funds have to be cut back or even taken away. Good 
research cannot be sustained under conditions as uncertain as those 
that have been occurring recently.
    We support efforts to develop a fund for unanticipated events so 
that the research budgets no longer have to be raided to help pay for 
them. During the current fiscal year, for example, the ONR 
biobehavioral research budget has been reduced by 15 percent from its 
expected amount by the withholding of funds to pay for non-budgeted, 
non-research activities. Given that the anticipated budget would have 
represented essentially a freeze at the 1997 level, a 15 percent loss 
on top of that is very difficult to absorb.
    We are asking that the Subcommittee support the administration's 
requested budget for ONR. The request would maintain the budget at the 
fiscal 1997 level. For 6.1 research in bioengineering and behavioral 
research, the requested amount is $14.20 million. For 6.2 research, the 
figure is $16.55 million, and for 6.3, the request is for $18.94 
million.
    The Navy's research program in these areas is especially well tuned 
to two top naval priorities: To reduce the number of sailors needed to 
fully staff ships, and to embed training in the work site so that 
training and skills upgrading can go on on board ship at any time with 
the actual equipment used on the job. The crew size reduction research 
will greatly reduce personnel costs while the embedded training 
research will assure that U.S. sailors will be the best trained in the 
world. Impeding the progress of this research with unreliable and 
inappropriately low budgets has two undesirable effects. It assures 
that costs that could be saved will not be saved, and it unnecessarily 
limits the quality and quantity of training sailors receive. The moral 
is clear enough: To save money and increase readiness simultaneously, 
fund research.
    I thank the Subcommittee for this opportunity to present our views.
STATEMENT OF HAROLD P. VAN COTT, PH.D., PRESIDENT, 
            HUMAN FACTORS AND ERGONOMICS SOCIETY; ON 
            BEHALF OF THE AMERICAN PSYCHOLOGICAL 
            ASSOCIATION
    Senator Stevens. Dr. Van Cott, please.
    Dr. Van Cott. Mr. Chairman, members of the subcommittee, I 
am Dr. Harold Van Cott. I am President of the Human Factors and 
Ergonomics Society and former staff of the National Research 
Council's Committee on Human Factors. I am speaking today on 
behalf of the American Psychological Association [APA], a 
professional and scientific organization of 155,000 members and 
associates, many of whom conduct behavioral research relevant 
to the military.
    The contribution of psychological research ranges from 
improvements in the selection and assignment of personnel to 
the training and maintenance of skills, to the design of man-
machine interfaces, to the efficient and safe operation of 
complex systems. Our military is facing a host of new 
challenges. Our forces are downsizing. Women are playing an 
increasingly prominent role. And an entirely new function--
peacekeeping--has been added to the mission.
    The sophistication of weapons and information technology 
has dramatically changed the skills required of our service 
personnel. What has not changed is that success in military 
operations still depends on people, at entry level, at every 
level. The Air Force alone loses the equivalent of one fighter 
squadron a year through accidents, around 80 percent of which 
involve human error. And it is not because we do not have the 
world's best and most highly trained aviators. It is simply 
because we have allowed hardware and software to get too far 
ahead of the people-ware, the humans.
    Similarly, teams and leaders are facing new demands that we 
are only beginning to understand. The situation will not 
improve without serious investment in behavioral and social 
research. And currently that investment is appalling.
    Consider that personnel and training costs account for one-
third of DOD's budget. Yet DOD invests less than 1 percent of 
its science and technology budget in personnel and training 
research. Put another way, for every $4 we spend on equipment, 
we spend $1 to make it better. For every $4 we spend on people, 
we invest about 3 cents.
    At a time when Federal support for non-defense research and 
development is growing, APA has real concerns about declining 
Federal support for defense research. With the help of this 
subcommittee, the decline in spending on basic 6.1 research has 
been shored up, albeit at the expense of the applied end of the 
research pipeline, mainly development spending.
    APA urges the subcommittee to support, at a minimum, the 
increase to $209.4 million for all basic research in the fiscal 
year 1999 DOD request for the Air Force. This money supports 
the Air Force Office of Scientific Research, which funds basic 
research both in the Air Force laboratories and, through 
grants, to academic institutions and other contractors. APA 
supports the $12.57 million request for basic research at 
AFOSR.
    We are very concerned, however, about significant cuts that 
are anticipated for development work at Brooks Air Force Base. 
The fiscal year 1999 request for the Air Force would reduce the 
funds for applications in advanced development that come from 
behavioral research from $11 million to $3 million. The entire 
product development side of the behavioral research pipeline 
for the Air Force would be eliminated. Without product 
development, the basic research will no doubt soon be 
eliminated, too.
    What does the Air Force get from its modest investment in 
behavioral research? To cite only one example, basic cognitive 
research is being done that allows the Air Force and other 
services to incrementally fine-tune tests on which the services 
base multiple decisions: which recruits have aptitudes for 
complex technical work, who is most likely to be happy in a new 
job and not drop out, who can develop new skills.
    The Air Force--indeed, none of the services--can work with 
fewer people, with changing and complex technical jobs, without 
tools like this. The tests and the training techniques are the 
products. Failure to sustain this investment from basic to 
applied, to advance development research, will have severe 
impacts on the future. In fact, the customer is really the Air 
Force of tomorrow. That future Air Force is not one of the 
voices you hear in the clamor over short-term budget decisions, 
but Congress must ensure that its voice is heard.

                           prepared statement

    APA urges the subcommittee to include specific language in 
the fiscal year 1999 appropriation that would restore $9.84 
million to the 6.2 and 6.3 research funding at the Armstrong 
Lab.
    Last year's anticipated cut of 33 percent would have 
crippled APA's research capabilities. We are once again asking 
for your help.
    Senator Stevens. Thank you very much.
    [The statement follows:]
            Prepared Statement of Harold P. Van Cott, Ph.D.
    My name is Dr. Harold Van Cott; I am President of the Human Factors 
and Ergonomics Society, and former staff of the National Research 
Council's Committee on Human Factors. I am speaking here on behalf of 
the American Psychological Association (APA). APA is a professional and 
scientific organization of 151,000 members and associates, many of whom 
conduct behavioral research relevant to the military. This statement 
addresses two main issues of relevance to the Subcommittee: the 
continuing need to invest in psychological research in the Department 
of Defense; and the particular need to sustain support for the human 
systems programs in the Air Force.
    DOD's support of psychological research dates from WWII when the 
efficient testing and classification of new recruits was critical to 
the rapid buildup of U.S. forces after Pearl Harbor. Today, the 
contribution of psychological research ranges from improvements in the 
selection and assignment of personnel, to the training and maintenance 
of skills, to the design of the human-machine interface, to the 
efficient and safe operation of complex systems.
    Our military is facing a host of new challenges. Our forces are 
downsizing; women are playing an increasingly prominent role; and an 
entirely new function--peacekeeping--has been added to the mission. The 
sophistication of weapons and information technology has dramatically 
changed the skills required of our service personnel. What hasn't 
changed is that success in military operations still depends on 
people--at every level, in every unit. The Air Force alone loses the 
equivalent of 1 fighter squadron a year through accidents, around 80 
percent of which involve human error. And it's not because we don't 
have the world's best and most highly trained aviators. It's simply 
because we've allowed hardware and software to get too far ahead of the 
``humanware.'' Similarly, teams and leaders are facing new demands that 
we're only beginning to understand.
    The situation will not improve without serious investment in 
behavioral and social research, and currently that investment is 
appalling. Consider that personnel and training costs account for one-
third of DOD's total budget. Yet DOD invests less than 1 percent of its 
Science and Technology budget in personnel and training research. Put 
another way, for every $4 we spend on equipment, we spend $1 to make it 
better. For every $4 we spend on people, we invest about 3 cents!
                            the rdt&e budget
    Maintenance of DOD's technology base must include 6.1 (basic), 6.2 
(exploratory development) and 6.3A (advanced development) research on 
manpower, personnel selection, training, human factors, cognitive 
science, and other areas of behavioral research. Although less widely 
publicized than advances in military hardware, these contributions have 
been critical to sustaining our combat superiority. They have been 
possible only because the services have maintained closely coupled 6.1, 
6.2, and 6.3A research programs on key human resources, training, and 
human factors issues. With systems growing more sophisticated and 
demands on the human operator more complex, we can ill afford to cut 
back on the research that is necessary to preserve our ``combat edge.'' 
With the support of this Subcommittee, U.S. leadership in these crucial 
areas of behavioral research--in the service laboratories and in the 
nation's universities--will be assured.
    We want to highlight the 6.1 portion of the RDT&E budget, and those 
programs in the Army, Navy and Air Force that support psychological 
research. This research fuels equally valuable 6.2 and 6.3A programs 
which are managed and conducted by the service laboratories.
                          basic research (6.1)
    At a time when federal support for non-defense research and 
development is growing, APA has real concerns about declining federal 
support for defense research. With the help of this Subcommittee, the 
decline in spending on basic, 6.1 research has been shored up, albeit 
at the expense of the applied end of the research pipeline, mainly 
development spending. We are pleased that the fiscal year 1999 budget 
would allow for significant growth in the 6.1 budgets in all three 
services.
    The 6.1 budget funds basic research to support our national defense 
needs--current and future. Right now we see the fruits of research 
conducted in the late 1970's through the 1980's, when support for DOD 
research was expanding. It is not possible to maintain this growth 
rate, but it is important to maintain DOD's capacity to respond to 
future needs. More than ever, careful and prudent planning for future 
defense needs must be done. DOD supports research that other federal 
agencies or industry cannot fund, but that is essential to maintaining 
the world-class status of our military.
    The Army, Navy, and Air Force each support basic psychological 
research to meet their particular needs. The services cooperate to 
eliminate unnecessary duplication of research efforts and actively 
share research results.
Air Force Office of Scientific Research (AFOSR)
    APA urges the Subcommittee to support, at a minimum, the increase 
to $209.4 million for basic research in the fiscal year 1999 DOD 
request for the Air Force. This money supports AFOSR, which funds basic 
research both in the Air Force laboratories and through grants to 
academic institutions and other contractors. The Air Force laboratories 
compete for these funds through the submission of research proposals 
that are evaluated in competition with proposals from the civilian 
sector. This ensures that the best and most relevant research is 
funded. APA supports the $12.57 million request for basic behavioral 
research at AFOSR.
    We are very concerned, however, about significant cuts that are 
anticipated for development work, mostly in the Armstrong Lab at Brooks 
Air Force Base. The fiscal year 1999 request from the Air Force would 
reduce the funds for applications and advanced development that comes 
from behavioral research, from $11 million to $3 million. The entire 
product development side of the behavioral research pipeline for the 
Air Force will be eliminated. Without product development, the basic 
research will no doubt soon be eliminated too.
    What does the Air Force get from its modest investment in 
behavioral research? To cite only one example, basic cognitive research 
is being done that allows the Air Force (and other services) to 
incrementally fine-tune tests on which the the services base multiple 
decisions: which recruits have aptitude for cooperative group work; 
which should be trained in which program; who has the skills, or could 
develop the skills, to do a new kind of job. The Air Force, indeed none 
of the services, can work with fewer people, with changing and complex 
technical jobs, without tools like this. Almost every technique the Air 
Force uses to select, classify and train its personnel, to design their 
tasks, and to evaluate their performance can be traced directly to work 
with done by or supported by the military, most of it by the Air Force. 
The tests and the training techniques are the products. Failure to 
sustain this investment, from basic to applied to advanced development 
research, will have severe impacts in the future: in fact, the customer 
is really the Air Force of tomorrow. That future Air Force is not one 
of the voices you hear in the clamor over short-term budget decisions, 
but Congress must ensure that its voice is heard. The proposed cuts 
will ensure that the programs and personnel who sustain this work will 
be gone inside a year, and those resources could not be reassembled.
    APA urges the Subcommittee to include specific language in the 
fiscal year 1999 appropriation that would restore $9.84 million to the 
6.2 and 6.3 funding at the Armstrong Lab. This would maintain the 
programs at their 1997 levels.
Office of Naval Research (ONR)
    The Navy's current investment in basic research is $338.7 million. 
APA supports the fiscal year 1999 request for an increase to $362 
million. This increase would help restore previous funding cuts and 
sustain vital ONR research programs.
    The Cognitive and Neural Sciences Division (CNS) in ONR was 
particularly hard hit by the fiscal year 1996 and 1997 reductions in 
the Navy's 6.1 budget. Its budget, like other research programs under 
the RDT&E portion of DOD's budget, has been tapped to help pay for 
overseas campaigns in Bosnia. APA urges the Subcommittee to support the 
administration's request for ONR. The request would preserve the budget 
at the fiscal year 1997 level. For 6.1 research in bioengineering and 
behavioral research, the request is $14.2 million. For 6.2 research, 
the request is $16.55 million, and for 6.3, $18.94 million.
    CNS supports research to increase the understanding of complex 
cognitive skills in humans; aid in the development and improvement of 
machine vision; improve human factors engineering in new technologies; 
and advance the design of robotics systems. An example of CNS-supported 
research is the division's long-term investment in artificial 
intelligence research. This research has led to many useful products, 
including software that enables the use of ``embedded training.''
    Many of the Navy's operational tasks, such as recognizing and 
responding to threats, require complex interactions with sophisticated, 
computer-based systems. Embedded training allows shipboard personnel to 
develop and refine critical skills by practicing simulated exercises on 
their own workstations. Once developed, embedded training software can 
be loaded onto specified computer systems and delivered wherever and 
however it is needed.
    Embedded training is particularly valuable for the Navy because 
naval personnel are often required to maintain high proficiency and 
readiness levels during lengthy, uneventful deployments at sea--far 
from land-based training facilities.
Army Research Institute for the Behavioral and Social Sciences (ARI)
    APA is grateful for this Subcommittee's leadership in restoring 
funds to the Army Research Institute in fiscal year 1998. Last year's 
anticipated cut of 33 percent would have crippled ARI's research 
capabilities. We are once again asking for your help. Despite ARI's 
strong record in funding research essential to the training and 
performance of Army personnel, the Institute's funding continues to 
erode. The fiscal year 1999 request is $16.17 million, a substantial 
cut from its currently appropriated amount of $21.4 million. We urge 
the Subcommittee to continue support for ARI's work.
    About half of the Army's budget, some $45 billion, is spent on 
personnel. But less than $18 million is now spent on research to help 
those personnel work more effectively. It appears shortsighted to 
invest such a disproportionately small amount in the Army's human 
resources. ARI works to build the ultimate smart weapon: the American 
soldier. And its efforts deserve your support.
    The ARI was established to conduct personnel and behavioral 
research on such topics as minority and general recruitment; personnel 
testing and evaluation; training and retraining; and leadership. 
Reliable data about these issues is critical, as you know from today's 
headlines. While the Army seeks to solve the problem of sexual 
harassment within its ranks and establish workplace ethics and 
procedures that bring out the best from a diverse workforce, good data 
collected for the Army from scientists who understand how the Army 
works, will help the Army plan and execute reasonable policies.
    ARI is the focal point and principal source of expertise for all 
the military services in leadership research, an area critical to the 
success of the military. Research that helps our armed forces identify, 
nurture, and train leaders is critical to their success.
                      summary and recommendations
    It is sometimes easy to overlook the important contributions of 
behavioral research to the missions of the Army, Navy and Air Force 
because the results usually do not translate directly into new weapons 
systems or hardware. Yet behavioral research has provided and will 
continue to provide the foundation for tremendous savings through 
increased personnel efficiency and productivity. This work is vital to 
the military for identifying critically needed improvements in human 
resources development, training, and human error reduction.
    Increasingly sophisticated weapons systems place more, not fewer, 
demands on human operators. We must ensure that military personnel are 
as well prepared as their machines to meet the challenge. This is not 
possible without a sustained investment in human-oriented research.
STATEMENT OF SYDNEY T. HICKEY, ASSOCIATE DIRECTOR, 
            GOVERNMENT RELATIONS, THE NATIONAL MILITARY 
            FAMILY ASSOCIATION [NMFA]
    Senator Stevens. The next witness is Sydney Hickey, 
Associate Director of Government Relations, the National 
Military Family Association.
    Ms. Hickey. Mr. Chairman and members of the subcommittee, 
the National Military Family Association appreciates this 
opportunity to express its views.
    Contrary to much of the testimony heard this year, NMFA 
must report that information from our representatives at 
military installations around the world indicate that the 
morale of military families is not high.
    To both NMFA field representatives and headquarters staff, 
military families talk about continuing deployments; long work 
days and weeks when the service member is at home station; 
depressed pay raises; a medical system that does not work for 
many; uncertainty about a future drawdown of forces; the 
effects of outsourcing and privatization, such as reduced 
services under the new parent support program; reduced funding 
at the installation level forcing cutbacks in services, such as 
library closures; a new formula for the basic allowance for 
subsistence which robs Peter to pay Paul; housing allowances 
that continue to fall far short of housing costs; increased WIC 
voucher redemption at commissaries; no WIC program overseas; 
continuing delay in bringing military household goods shipments 
in line with the civilian industry that fellow Federal 
employees enjoy; schools for their children that are facing 
significant budget difficulties both in the DOD system and in 
the public system; military housing constantly in need of 
repairs--repairs that never seem to get done.
    Mr. Chairman, military families are a flexible and 
resilient group of people. But they see no light at the end of 
the tunnel. They also do not trust. They see their parents and 
grandparents, who served valiantly at low pay during World War 
II, Korea and Vietnam, now denied their promised employer-
provided health care. They see a leadership who asks for 
subvention to provide such health care to this population; 
however, they know that while the DOD health care system may 
benefit from subvention, 70 percent to 80 percent of elderly 
beneficiaries will not.
    Even active duty families with long-term or chronic 
illnesses find themselves having to fight the health care 
system for their promised benefits. Beneficiaries who do not 
live near an installation with a military hospital are denied 
the opportunity to enroll in Tricare Prime, and fight 
continuing claims hassles to receive any reimbursement for 
their health care.
    Perhaps as important, the children in these military 
families, who, statistics would indicate would normally make up 
approximately half of our future force, hear the concerns of 
their parents. If the service members of today and those of 
tomorrow are to be expected, if necessary, to lay their lives 
on the line for their country, they must have the faith that 
promises made will be promises kept. Trust and loyalty, Mr. 
Chairman, are two-way streets.
    Thank you.

                           prepared statement

    Senator Stevens. Thank you very much.
    We are back from a trip overseas, where we came to the same 
conclusion. The problem of morale and what we can do about it 
will be our number one issue that we discuss in this 
subcommittee this year.
    Thank you very much.
    Ms. Hickey. Thank you.
    [The statement follows:]
                 Prepared Statement of Sydney T. Hickey
    Mister Chairman and distinguished members of the Committee, the 
National Military Family Association is, as always, most grateful for 
your continued strong support of those we serve, the men and women in 
uniform and their families.
         the state of the military family of today and tomorrow
    As the National Military Family Association (NMFA) reports on the 
state of today's military family, we believe it important to reflect on 
how the current state will affect the military family of the future. In 
the mid 1980's the Families in Blue study showed that approximately 50 
percent of the members of the Air Force at that time had been members 
of a military family in their youth. Unfortunately that same question 
has not been asked in subsequent studies of military personnel. 
However, a 1997 Department of Defense (DOD) study of military youth 
showed these children had a much higher propensity to join the Armed 
Forces than did their civilian peers. In 1996, the Navy found that 52 
percent of the new recruits Naval Training Center, Great Lakes, IL were 
the offspring of people who had served in the military. Anecdotal 
information indicates that the same is true of the spouses of current 
military members.
    NMFA submits, therefore, that pluses and minuses found in the 
quality of life of current military families has a direct affect on the 
future military family. Secretary of Defense Cohen stated in 
Congressional testimony on February 5, 1998, ``Our approach mandates 
sufficient forces and capabilities to meet today's requirement, while 
at the same time investing wisely and with vision for the future.'' 
NMFA believes sufficient funding for quality of life must be invested 
to meet the needs of today's military families, realizing that the 
investment is for tomorrow as well as today. Secretary Cohen calls for 
preparing for ``an uncertain future.'' The Army's Posture Statement for 
fiscal year 1999 states, ``Soldiers are, as always, our credentials and 
our legacy. It takes time and resources to build a trained and ready 
force with the technological edge necessary for decisive victory today 
and in the future.'' NMFA believes the ``time and resources'' needed to 
build a force for ``an uncertain future'' should begin with the birth 
of each military child.
    NMFA requests that as we report on the ``State of the Military 
Family Today,'' the effects of this current state on the military 
family of the future be scrutinized as carefully as would proposals for 
research and development and procurement.
The Military Family Today
    NMFA has been struck by the emphasis of all services on core 
values. While each service defines these values in slightly different 
ways the underlining meaning appears the same. The Army lists its core 
values as, ``Loyalty, Duty, Respect, Selfless Service, Honor, 
Integrity, and Personal Courage.'' While military family members may 
not serve in uniform, NMFA believes these core values are also 
extremely important in their lives. Families believe that the values of 
loyalty, respect, selfless service and trust is a two way street.
            Basic Pay
    The administration's request for fiscal year 1999 calls for a 3.1 
percent pay raise. The request again this year is 0.5 percent below the 
Employment Cost Index (ECI). This brings the pay gap to more than 13 
percent. From Secretary Cohen's February 5 testimony, ``* * * the 
fiscal year 1999 budget includes strong funding for military pay * * *. 
The budget supports military pay raises up to the maximum percentage 
established by law.''
    Military families are asking why someone doesn't ask for raises at 
least at the ECI level.
            Basic Allowance for Housing
    NMFA strongly supports the concept of the new Basic Allowance for 
Housing (BAH), but is concerned that without a significant plus-up in 
funding families will continue to pay 19 to 20 percent of their costs 
out of pocket. The Army's Posture Statement acknowledges that the gap 
in fiscal year 1997 was 19.4 percent and states that, ``* * * soldiers 
have the assurance that out of pocket costs for housing will not 
increase beyond present levels (under the new BAH).''
    Military families are asking why someone doesn't request that their 
out-of-pocket expenses return to the Congressionally directed level of 
15 percent.
            Basic Allowance for Subsistence
    NMFA supports the overhaul of the Basic Allowance for Subsistence 
(BAS) which will more closely reflect the costs of food. We do not 
support the funding mechanism to institute the change. Capping raises 
for those currently in receipt of BAS to provide for those who were 
not, is literally ``robbing Peter to pay Paul.''
    Military families are asking why they are the ones paying for this 
increased benefit for single service members.
            What's Left Over at the End of the Month?
    Sergeant Major of the Army Robert E. Hall, in testimony of March 5, 
refers to a private first class (E-3), married with two children and 
living off-post, as having $17 in discretionary income at the end of 
the month. A New York Times article of July 20, 1997, states that Navy 
members E-5 and below do not receive enough in housing allowance to 
cover the rental costs of a one or two bedroom apartment in San Diego, 
CA. A Master Chief Petty Officer (highest Navy enlisted rank) does not 
receive enough in housing allowance to cover the rental costs of a 
three bedroom apartment. It is no wonder that then Master Chief Petty 
Officer of the Navy John Hagan referred to the, ``significant increase 
in the population of geographic bachelors in the past several years,'' 
in testimony on March 5, 1998.
    Redemption of Women's, Infants' and Children's (WIC) nutrition 
program vouchers at Commissaries continued a steady climb by increasing 
8.75 percent from 1996 to 1997. Voucher redemption is now close to $22 
million annually. Families overseas are still not able to take 
advantage of the program although DOD was given the authority to pay 
for it in Public Law 105-85. Undoubtedly the voucher redemption would 
be much higher if overseas families could participate in the program.
    A study done by the Military Family Institute (MFI) of Marywood 
University, PA cited 123,000 Letters of Indebtedness being processed on 
an annual basis by the Navy for its uniformed personnel. According to 
the same study, 35,000 Navy members had their wages garnished in 1995. 
Certainly better financial counseling (as we will discuss later) could 
improve these statistics, but financial counseling is not the answer 
for a family with $17 a month in disposable income.
    Military families are asking why Service leaders continue to 
support pay raises below the ECI, housing allowances that demand more 
out of pocket then they can afford, and a decrease in BAS that leads to 
a decrease in compensation.
            Time Away from Home
    NMFA uses ``time away from home'' to describe both increased 
deployments and longer work days and weeks. The Army has had a 300 
percent increase in deployment since 1989. The Commander in Chief, 
United States Atlantic Command Admiral Harold W. Gehman, Jr., USN, 
stated in testimony on March 4, 1998, ``* * * because we have downsized 
our military forces at the same time we are using them more frequently, 
maintaining our readiness is more difficult than during the Cold War. 
Increased operations tempo and personnel tempo is * * * causing 
retention problems in certain military specialties.'' The Commander in 
Chief, United States Pacific Command Admiral Joseph W. Prueher, USN, in 
testimony the same day stated, ``* * * people are working hard and 
there is no sign of let-up in this workload.'' And, ``* * * readiness 
for deployed forces is increasingly achieved at the expense of non-
deployed forces.'' And ``* * * personnel shortages are the principal 
readiness concerns * * *.'' The Deputy Chief of Staff, Personnel, 
United States Air Force Lieutenant General Michael D. McGinty has also 
stated in Congressional testimony, ``High operational tempo causes 
frequent family separations and long work hours both for those deployed 
and those at home station. Families left behind feel the strain as 
well. All of these factors are wearing on our troops.''
    Navy family advocacy personnel report more and more attendees at 
their Stress/Anger Management Classes are complaining of long work 
hours and increased family separation. Chief Master Sergeant of the Air 
Force Eric W. Benken stated in testimony on March 5, ``Never in our 51-
year history have we asked our blue suiters to do so much.''
    The Service Chiefs have all supported the budget request for an 
additional 23,512 reduction in active duty personnel.
    Military families are asking how much more is supposed to be done 
with less.
            Family Support
    Army Quality of Life Programs.--The Army Posture Statement for 
fiscal year 1999 states, ``The heart of Army family quality of life 
programs is the Army Family Action Plan (AFAP), one of our most 
effective change management processes.'' Yet funding for annual 
national AFAP conferences has been cut, so they only occur every two 
years.
    The Army Posture Statement cites education benefits as a top reason 
for soldiers to enlist and stay on active duty and states that post 
libraries support educational programs. Yet many post libraries have 
reduced services and operating hours and some have closed.
    New Parent Support Program.--The New Parent Support Program has 
received rave reviews from both professionals and military families. In 
fiscal year 1997 funding for the program (thanks to Congressional 
direction) was $20 million. In fiscal year 1998 the funding for the 
program is $4 million and the budget request for fiscal year 1999 and 
outyears is $10 million/year. The military married community is young 
and often lives thousands of miles away from their extended family. The 
New Parent Support program is intended to assist these young families 
as they become first-time parents. It is well recognized as a tested 
prevention and quality of life enhancement program. The $10 million in 
funding will only provide services for less than a year to those 
families deemed ``at risk,'' essentially stripping much of the 
prevention aspect from the program.
    Navy Family Service.--A private firm headquartered in Woodbridge, 
VA will be providing family support services to Navy families in San 
Diego, CA. NMFA remains concerned that stripping local commanders of 
direct control over family services will lead to inadequate support in 
crisis situations. We also can foresee a repeat of the New Parent 
Support Program situation. When budgets are cut, or are too tight, the 
contract will just not be funded. Even if the total contract is not 
cut, NMFA is concerned that budget constraints will decrease the 
funding available and the contractor will be forced to provide less and 
less service to fewer and fewer Navy families.
    Child Care.--The availability of child care in the Services has 
increased dramatically over the last several years. The quality of 
child care in military Child Development Centers (CDC) is second to 
none, thanks to the Military Child Care Act passed by Congress. NMFA is 
pleased to note that the services are either currently subsidizing 
Family Home Care or in the process of initiating such action. This is a 
cost effective alternative to Center care, if it is affordable for 
military families. NMFA is concerned that some of the initiatives with 
the civilian community may eventually drive up costs at on-installation 
centers more than either the Services or families can afford. The Navy 
has taken the lead on exploring civilian alternatives to on-
installation child care. The program consists of ``buying down'' the 
cost of child care in the civilian sector to the level charged at 
installation facilities. However, the Navy is finding that paying for 
such care for infants and those under the age of three is extremely 
costly. NMFA is concerned that care for the less expensive older 
children will be ``bought down'' in the civilian market, leaving the 
installation CDC's to absorb the cost of the infants and toddlers. If 
this were to occur the costs at the CDC would soar. Since the parents 
of infants and toddlers are more likely to be lower ranking military 
members, they could not absorb any part of such a cost increase.
    Youth Activities.--NMFA has been extremely pleased to note the 
Services are taking more of an interest in youth activities and 
programs. Before and after school programs are springing up at 
installations around the world. Youth centers are aggressively 
exploring ways to proactively encourage youth participation in 
wholesome and personal growth oriented programs. However, families find 
an uneven application of these new programs among installations and 
Services.
    NMFA particularly applauds the work done in the DOD Model Community 
Programs and even more those communities, such as Naval Air Station, 
Lemoore, CA, and the Air Force Academy that plan to continue their 
activities even though funding for the Model Community Program ends 
this month. It is fitting that Lemoore was chosen to receive the first 
1998 National Performance Review Hammer Award.
    Libraries.--NMFA believes the recent spate of on-installation 
library closures, sends the wrong message. What is the message sent 
when we fully fund physical fitness centers and close libraries?
    Partnerships.--NMFA is also pleased to see some innovative 
partnering activity at some installations. Picatinny Arsenal in New 
Jersey has entered into a superlative partnership with the local 
recreation department and local schools. The civilian community has 
gained the use of sports fields and other sports related facilities, 
and the installation has received significant assistance with 
maintaining and upgrading their facilities. The installation commander 
retains control over the area and could, if necessary, restrict access.
    Commissaries.--The recent Congressional Budget Office report on the 
Commissaries which suggests ways to make the benefit more cost 
effective for the nation, proposes dividing up $50 million to the 
active forces and doing away with the subsidized benefit. Simple 
arithmetic will show that families would loose significantly under this 
proposal and one more promise to retirees would be broken. Military 
families have also been aware of a proposal from within the Pentagon 
itself to place Commissaries within the MWR category. Shortfalls in 
Commissary funding could then be made up with nonappropriated funds--
the members' own money. While recent testimony strongly suggests that 
neither of these proposals is being seriously considered at the moment 
within DOD or the Congress, families are concerned.
    Household Goods Reengineering.--NMFA is extremely pleased with the 
current apparent results of the Household Goods Reengineering 
Demonstration at Hunter Army Airfield, GA. Reports to date indicate 
overwhelming customer satisfaction, compared to overwhelming customer 
dissatisfaction with normal DOD moves. The claim rate for damage of 
property also appears to be significantly reduced. NMFA anxiously looks 
forward to the long delayed reengineering project to be run on the East 
Coast. We will be watching the Navy demonstration in Puget Sound. While 
customer choice is to be applauded, we hope that sufficient safe guards 
for the military family will be provided. Most new military families 
are too young and inexperienced to adequately negotiate permanent 
change of station moves and the attendant problems without assistance. 
Giving a credit card to the family and sending them out on their own 
may save the government money, but it will be at the expense of the 
family.
    Financial Counseling.--The MFI study of personal financial 
management among Navy personnel raises some serious questions. The 
study shows that indebtedness is by no means limited to junior 
personnel. While it can certainly be argued that the pay of junior 
personnel could easily contribute to financial insolvency, the problem 
is much more widespread. NMFA agrees with most of MFI's 
recommendations, specifically the implementation of an effective, 
proactive Personal Financial Management Program that continues 
throughout the service member's career.
    Service members are deploying frequently and working long days and 
weeks when not deployed. They have little, if any, time to investigate 
the new tax laws on their own, or to investigate savings options 
available to them.
    Knowledgeable financial counselors can provide service members with 
up to date information regarding their financial options and encourage 
goal-oriented savings habits. For instance, NMFA wonders how many 
military families with children under the age of 17 are aware that they 
could, this very day, increase their take home pay based on the new 
Child Tax Credit.
    Military families are asking why it is when budgets get tight the 
things they value the most come under attack.
            Education of Military Children
    Military families list education as one of their most important 
Quality of Life concerns. Even when their children are settled into 
what seems to be a good educational program, parents remain anxious. 
Military parents often say, ``We think our child is doing OK now in his 
current school and would be prepared to enter the next grade here.'' 
But they worry, ``How do I know he'll have the skills he needs in the 
school at our next assignment in Okinawa or Heidelberg, in San Diego, 
CA or Fairfax County, VA?''
    School Volunteers.--Military families applaud the services' 
initiatives to get their service members and civilian employees into 
the schools as volunteer mentors, tutors, and as special program help. 
Mission permitting, Army personnel interested in volunteering in local 
schools may be excused from duty for up to one hour per week. Civilian 
employees may be excused for up to 59 minutes per week without being 
charged for leave. The Navy's ``Personal Excellence Program'' enables 
sailors to visit schools on a daily basis to assist in whatever 
activities are needed.
    Department of Defense Education Activity (DODEA).--NMFA and 
military families applaud DOD's decision last year to establish 
Domestic Dependent Elementary and Secondary Schools (DDESS) on Guam in 
response to their concerns and those voiced by the Services. Schools 
started late, students will have to make-up days lost due to Typhoon 
Paka, there's no lunchroom, and classes are held in renovated aircraft 
hangars and other temporary quarters, but enthusiasm continues to run 
high. Unaccompanied tours to Guam are down as more service members feel 
secure enough about the quality of the education available to bring 
their children to Guam.
    NMFA applauds the planned expansion of the Sure Start program for 
four-year olds in 27 overseas schools over the next two years, allowing 
Department of Defense Dependents Schools (DODDS) to serve approximately 
500 more children. We support other DODEA initiatives to target 
resources to the schools and children most in need through the new 
Framework for School Improvement Support.
    NMFA supports DODEA's efforts to hold itself accountable for 
improving student achievement and reaching the goals in its Strategic 
Plan. Families are pleased that raising parent and community 
involvement in decision-making are part of that plan.
    Parents' anxiety level goes up when DODEA plans for this input and 
involvement are not implemented in a timely manner. Their anxiety level 
goes up when DODEA postpones the Parent Report Card, the one 
established means of soliciting parent input on the quality of schools. 
DODEA's plan to expand this biennial survey to include all 
stakeholders--parents, school staff, military commanders, and 
students--in DODDS and DDESS is worthy. However, no comprehensive 
survey of parents has been made since Spring, 1995. Unless a survey is 
done this spring--and no date has been set--the families who began 
their three-year overseas tour in the summer of 1995 will rotate out 
this summer without ever being asked their opinion of the schools their 
children attended.
    Parents' anxiety level goes up when they worry if their on-base 
DDESS schools will be transferred to the neighboring civilian districts 
whether as the result of privatization or of the findings of the long-
awaited transfer study ordered by Congress in 1995. The anxiety goes up 
when they hear the news that private developers are to build new family 
housing, but that no one has asked what impact this housing--and the 
children who live there--will have on the local school system.
    Parents' anxiety level goes up when their school officials talk of 
budget cuts. Press reports this winter about DODEA budget cuts due to 
an underutilization of workyears and a failure to pay bills on time, 
have raised parent concerns in both DODDS and DDESS. Will their 
children's schools have enough resources to finish this school year and 
obtain the books and supplies needed for the start of the next year?
        dod impact aid supplement for heavily-impacted districts
    In civilian school districts (which educate most military 
children), military families' anxiety increases when their school 
officials or the local press talks of budget cuts necessitated by DOD's 
failure to pay the Supplemental funding for heavily-impacted districts 
for fiscal year 1998. For these districts, Department of Defense 
Supplemental funding in six of the last eight years has provided 
necessary funds for construction, extra teachers, or technology. These 
funds supplement Impact Aid and enable heavily-impacted districts to 
approach the level of educational opportunity available in neighboring, 
non-impacted school districts even though they do not have access to 
the same kind of tax base.
                       serving the military child
    Because our families worry about their children's ability to 
transfer from one school system to another, NMFA is pleased to note 
that civilian districts serving military children are beginning to talk 
to each other about how to make this transition easier and to serve 
these children and their families better. After sponsoring a conference 
on ``Supporting the Military Child'' at Fort Hood (TX) in June 1997, 
the Killeen School Board voted to fund start-up costs for a new 
Military Child Education Coalition. Information about this coalition 
will be provided to participants at a national conference on ``Serving 
the Military Child,'' to be held October 1998 in Arlington, VA. 
Although the organization of the conference is being spearheaded by the 
Groton (CT) school districts, all branches of the Armed Services and 
school districts from several states are represented on the planning 
committee. The conference has already attracted support from the 
Departments of Defense, Education, and Transportation and Members of 
Congress. General Henry H. Shelton, Chairman, Joint Chiefs of Staff, 
has indicated that he will participate in the opening session of the 
conference.
    Military families are saying that it's about time people started 
talking to each other about quality education for our children.
Military Communities
    In an article in the Colorado Spring Gazette-Telegraph on January 
12, Chaplain Herb Kitchens of Fort Carson is quoted as saying, ``I'd 
never been here before, but when I drove on the post, I had a sense of 
feeling at home. The Commissary and PX are the same wherever you go, 
the chapel is the same, the gymnasium is the same.'' In the same 
article military family members sitting around a table in the Army 
Community Service center spoke of the escalating need for the community 
when deployments occur, and of the camaraderie that is key in meeting 
the ever changing demands of military life. One Staff Sergeant said, 
``most of the time your immediate family's not here, so you have a 
structured family outside of the immediate family which is the military 
community.''
    Deputy Chief of Staff for Manpower and Reserve Affairs, 
Headquarters, United States Marine Corps, Lieutenant General Carol A. 
Mutter's March 3rd Congressional testimony stated, ``Our installations 
by their very nature are self-contained communities, communities in 
which Marines and their families live, work, go to school, shop and 
recreate.''
                             privatization
    Privatization of family housing may increase the number of 
available housing units at the expense of the military community. NMFA 
understands the need to find an alternative to military construction 
dollars to more quickly replace the high number of substandard military 
quarters. However, the entire community, both civilian and military, 
needs to be involved as privatization decisions are made. Projects 
built on land not federally owned will create significant hardships on 
the local education authorities. Military children who live on federal 
land bring approximately $2,000 per child to their school districts. 
Military children who live on private land bring $200 to their 
districts. Even where new housing is to be located can impact local 
schools. If a significant influx of new students are expected because 
housing has been built in a certain school district, even a $2,000 per 
year Impact Aid payment will not build necessary new schools or provide 
additional transportation to existing schools.
    Will the private construction of new military housing significantly 
affect the local real estate market, and/or community transportation 
services and roads? None of these items should be a barrier to 
privatization, but they can be a barrier to good community relations if 
the entire community is not involved in privatization discussions.
    If military housing is built off the installation will services 
such as community pools, libraries and other recreational and support 
services be expected to be provided by the civilian community? NMFA 
senses in some privatization initiatives the intent to have military 
families rely solely on the civilian sector in which they reside for 
support services. Installations would essentially be turned into 
``places of work'' rather than the focal point for military 
communities.
    Military communities are not just brick and mortar. The military 
community is people--families who band together to support each other, 
and the individuals who serve the service members and their families. 
The focal point of the military community is the installation. The 
place where service members and their families gather. The place that 
``looks like home'' whether it may be.
              military construction/repair and maintenance
    The Army Posture Statement reports, ``Nothing contributes more to 
our soldiers' quality of life than the conditions in which they live.'' 
Yet the Army budget request is underfunded by $450 million for family 
housing.
    Secretary Cohen's February 5 testimony states, ``When adjusted for 
today's lower troop strengths, fiscal year 1999 O&M funding is well 
above levels during the 1980's.'' However, in the 1980's approximately 
20 percent less of the force was married with family members. 
Commander, United States Forces Korea General John H. Tilelli, Jr. 
stated in testimony on March 4, ``my base operations program (real 
property maintenance, security, communications, transportation, and 
food services) are strained. These funding levels only support bare 
minimum repairs to facilities. This situation does not allow me to 
resolve long-standing quality-of-life issues to the extent that our 
service members deserve and I am concerned that this underfunding will 
eventually affect readiness.''
    CMSAF Benken stated in testimony, ``Our people do not expect to 
live in luxury--they simply want the peace of mind that comes with 
knowing their family is comfortable and safe, especially when they are 
deployed.''
    Military families are asking if the condition of their on-
installation housing and some of the privatization initiatives are a 
way to encourage them to live off base. Military families are asking if 
the focal point, the place they gather to form their community, will 
exist in the future.
Health Care
    Tricare Prime.--As this Committee knows, health care for military 
families has been a strong focus for NMFA for over a decade. We have 
seen progress in access to care for families enrolled in Tricare Prime 
and who live in areas with a Military Treatment Facility (MTF). 
However, Tricare has done little for families who reside in an area 
without an MTF. Active duty families remotely assigned or those 
stationed at installations with small troop clinics have seen more 
problems under Tricare than under CHAMPUS. Either Tricare Prime is not 
offered where they live, or it is and their access to providers is 
limited and their costs may have increased. For those reliant on the 
civilian part of Tricare Prime, provider directories are most often 
incorrect. Families call those listed in the directory only to be told: 
the doctor is not a Prime provider and never has been; the doctor is no 
longer a Prime provider; or the doctor is not taking any new Prime 
patients.
    In the Region 11 demonstration of Tricare Prime Remote, families 
are often charged balance billing by specialists because providers will 
not join the Prime network. These families have the restrictions of 
Prime with no guarantee on what their out of pocket costs will be.
    DOD's Press Releases announced portability of Prime for active duty 
families some six months before contractors were able to fully 
implement it. Portability for retiree Prime enrollees was, according to 
DOD Press Releases, started on December 1, 1997. Yet some Tricare 
contractors are just now beginning to implement the program. Multiple 
copayments for single visits continue as does balance billing for Prime 
enrollees forced to receive inpatient care from non-Prime providers. 
Prime patients referred by their Primary Care Manager to non Prime 
specialists are paying balance billing copayment--significantly higher 
than $12 a visit.
    Retirees who do not live near a military treatment facility, or 
near a concentration of active duty families, are not offered Prime. 
Prime enrollment for overseas retirees in Europe appears to be on an 
indefinite hold and will not be available in the Pacific.
    Tricare Prime Patients Pay Lion's Share of Cost.--Exhibit A shows 
that Tricare Prime patients are paying more for their mental health 
visits than those in Tricare Standard. In fact, these military family 
members are paying between 44 percent and 55 percent of the entire 
bill. NMFA does not believe it was Congress's intent that savings in 
the military health system were to be paid by the beneficiary! 
Unfortunately, NMFA does not know how prevalent this fee structure is. 
We implore this Committee to investigate to ascertain if this phenomena 
is occurring throughout all of the Regions and for other kinds of care.
    Tricare Standard.--Those who have chosen to stay with CHAMPUS 
(Tricare Standard) are subject to preauthorization for a number of 
outpatient procedures. Unfortunately, they are totally unaware of the 
requirement. Unlike true health insurance plans which provide booklets 
to inform their patients of their plan's benefits and restrictions, the 
military health care system provides no such information. CHAMPUS 
(Tricare Standard) booklets are printed at erratic times and years 
apart. The booklets are not updated. Booklets are not mailed to 
beneficiaries. In fact, not enough are even printed for the eligible 
population!
    Dual Medicare-military Eligible Beneficiaries.--Retirees who are 
Medicare eligible because of age are locked out of the military system 
altogether. DOD received permission to institute a demonstration of 
Tricare Senior Prime (Medicare Subvention) starting in January of 1998. 
It is not yet implemented and DOD has been unable to give a fixed date 
for implementation. In the meantime World War II, Korean War and 
Vietnam retirees and survivors are dying daily. Even full Subvention, 
if authorized, will be unable to care for more than 30 percent of the 
eligible population.
    The other new program for dual Medicare-military eligibiles, called 
``Partners Program,'' will essentially offer enrollment in a Medicare 
at risk HMO. The Department has not yet outlined what advantages, if 
any, enrollment under the ``Partners Program'' would have over simply 
enrolling in the Medicare at risk HMO.
    Tricare--Another Federal Civilian Health Care Program.--As more 
MTF's become clinics and no longer inpatient facilities, families will 
find themselves seeking more and more of their care from civilian 
providers. Tricare is rapidly becoming another federal civilian health 
care program. However, unlike plans for federal civilians Tricare 
offers limited choices for military beneficiaries. Medicare eligibles 
will be offered an HMO or no employer provided coverage. Retirees who 
do not live near a military hospital are offered only a modified fee 
for service program with inpatient copayments so high that they must 
pay for a supplemental policy. A situation not faced by federal 
civilian retirees. Active duty families do not know what their choices 
or out of pocket expenses will be from one duty station to the next.
    NMFA Health Care Proposal.--NMFA continues to believe that its 
proposal which follows is the most cost effective program. It still 
ensures medical readiness, but also offers military beneficiaries the 
same scope of choices as civilian employees and retirees.
    NMFA's Proposal consists of two elements: The Military Health Plan 
and optional enrollment in a plan within the Federal Employees Health 
Benefits Program (FEHBP). (The Proposal does not include health care 
for active duty members. NMFA believes that their health care is a 
readiness issue. We also believe that, as under current law, their 
health care should be provided free of cost to the individual no matter 
where it is received.)
  --The Military Health Plan.--The Military Health Plan would closely 
        resemble what is now Tricare Prime. It would be an enrollment-
        based Health Maintenance Organization (HMO) type plan centered 
        in military hospitals. When needed, military hospitals could 
        contract with a Tricare Support Contract-like entity to provide 
        full service health care for all enrolled beneficiaries. All 
        military beneficiaries, including those eligible for Medicare 
        due to age, would be allowed to enroll. NMFA envisions that 
        these military hospitals would be full service community or 
        teaching hospitals able to provide most necessary care. 
        Practitioners would have access to a full age range of 
        beneficiaries in order to keep their skills current. Unless the 
        quality of care or service was noticeably inferior to other 
        options, NMFA believes the vast majority of military eligible 
        beneficiaries who reside near such a military facility will 
        enroll in the Military Health Plan.
  --The FEHBP Option.--Military beneficiaries who do not live near a 
        military hospital, or who do not wish to enroll in The Military 
        Plan, would have the option of enrolling in a plan within the 
        FEHBP. Active duty service members would be provided a Health 
        Care Allowance (similar to the housing allowance) for their 
        families. Service members whose families enroll in The Military 
        Health Plan would lose their Health Care Allowance, just as 
        they lose their housing allowance when living in government 
        quarters.
      The Health Care Allowance for active duty service members should 
        pay the beneficiary portion of a moderate cost HMO within the 
        FEHBP. Service members whose families choose to buy a more 
        expensive plan would be responsible for the cost differential. 
        NMFA believes it imperative to provide total premium protection 
        for active duty families. Service members, particularly those 
        deployed, should not have to be concerned about adequate, 
        affordable health care for their families.
      All other beneficiaries would pay the beneficiary share of the 
        premium as do Federal Civilians. DOD would absorb the 
        government share of the premium for all military beneficiaries 
        as it does for all of its civilian employees.
      NMFA must admit to extreme frustration that the dialogue on this 
        proposal centers solely on money. We believe that somewhere in 
        the discussion should be the simple question of what kind of 
        health care benefit this country should offer to military 
        members and their families.
      Military families are asking the same question. Military families 
        are also asking why DOD agrees it has an obligation to keep 
        promises made regarding health care, but continually drags its 
        feet on doing so.
Retirement
    The majority of the active duty force today is offered a retirement 
program vastly inferior to the one enjoyed by those who are currently 
retired. These active duty members will receive 40 percent of their 
basic pay upon twenty years of service vice 50 percent and will have 
their cost of living allowances capped. This new retirement system was 
instituted shortly after significant raises in active duty pay. 
However, the pay raises have not continued. The effect of this decrease 
in retired pay has been masked by the mammoth reduction in forces. As 
the Services begin to turn from ``push you out'' to ``recruit and keep 
you'' the significance of the retired pay reduction should begin to 
materialize. Recent testimony in the Senate by military recruiters 
indicates that the reduced retirement plan is significantly affecting 
their ability to compete with private industry for quality accessions. 
Second term retention rates in some services would suggest that 
something is causing military members with substantial years invested 
in the system to rethink their career decisions.
    Is it the new retirement system? Is it the broken health care 
promises? Is it the threat to prevent retirees from exercising their 
commissary benefit?
    Military families are not asking if the promises will be kept. 
Based on current evidence they do not believe that they will.
                               conclusion
    This country is extremely fortunate that many bright and dedicated 
individuals and their families are willing to serve their country. They 
are enduring many sacrifices to do so. Their children listen around the 
kitchen table as discussions of ``do we stay or do we go'' occur. They 
hear and experience the frustration of diminished quality of life and 
continuing threats to valued benefits. These children hear of the 
broken promises, they hear the distrust about the availability of 
benefits for their parents.
    As Admiral Prueher stated in his March 4 testimony, ``Investments 
in people and training are as important as new technology. Adequate 
funding for compensation, medical, retirement, housing and other 
quality-of-life programs is necessary to attract and retain the skilled 
personnel upon which our forces depend.''
    NMFA suggests that ``adequate'' is in the eye of the beholder. 
Increased time away from home aggravated by personnel cuts, decreased 
family support, fewer choices and increased costs for medical care, 
compensation caps, attacks on the foundation of the military community, 
substandard housing, and concern about their children's education, may 
make many military families decide to vote with their feet. Perhaps as 
importantly, it may cause the potential military family of the future 
to decide that loyalty, trust and respect are one sided. They may 
decide the military community of their great-grandfathers and 
grandfathers did not exist for their mothers and fathers and would not 
for them.
STATEMENTS OF:
        FATHER WILLIAM L. GEORGE, S.J., ASSISTANT TO THE PRESIDENT, 
            GEORGETOWN UNIVERSITY
        FATHER LEO J. O'DONOVAN, S.J., GEORGETOWN UNIVERSITY

    Senator Stevens. Father Collins and Father George, please.
    Father George. Father Collins sent me, Mr. Chairman.
    Senator Stevens. We will have to deal with what the Lord 
gives us, Father. [Laughter.]
    Father George. Mr. Chairman, Senator Inouye, Senator 
Domenici, and staff, thank you for the privilege and the 
opportunity to testify.
    I would like to ask you, as you consider your 
appropriations for this year, to give special consideration to 
advanced technologies in medicine that would help the young men 
and women in the service prevent some of their diseases, cure 
them more quickly, and get them back to their duty as quickly 
as possible. A couple of areas I would like to mention are 
diabetes and hypertension, in which we are cooperating with 
Walter Reed in deploying some telemedicine systems in homes, 
where you can monitor the patients more clearly and some of the 
diseases that can crop up with diabetes.
    The other would be that there are such advances in robotics 
and communications and computing that there is the capacity to 
develop a really good surgery for the spine. And one of the 
first persons who spoke here spoke on back injury. Well, if you 
can get in there quickly with minimally invasive stuff, instead 
of being a month out of work, you can get that person back in, 
in 3 or 4 days, perhaps, if you get it in time. That also could 
be effective in prostate and kidney types of surgeries, as 
well.
    And, finally, we as a University, cooperate and are working 
with the Lovelace Institute. And what we are working on is a 
way to prepare the lungs of soldiers in the field, men and 
women, that if they were up against a biological or a chemical 
type of event, that it would protect their lungs, and then, 
second, methods that would actually regenerate the tissue in 
the lungs, where the oxygen exchanges.
    And so I would like to ask your committee to look into that 
as carefully as possible. And I know you do. But thank you for 
the opportunity to testify, Mr. Chairman.
    Senator Stevens. Thank you.
    Mr. Cortese reminds me that we did follow your request last 
year and it was vetoed.
    Father George. By one of our alumni. I mean, yes, that is 
pretty hard to believe. [Laughter.]

                           prepared statement

    Senator Stevens. Well, we will see if we can try again. 
Thank you very much, Father.
    Father George. Thank you, Mr. Chairman. God bless you.
    [The statement follows:]

          Prepared Statement of Father William L. George, S.J.

    Mr. Chairman and Members of the Committee: We are Father 
William L. George, S.J. and Father T. Byron Collins, S.J. 
Assistants to the President of Georgetown University, the 
Reverend Leo J. O'Donovan, S.J. We appreciate the opportunity 
to submit this testimony to the subcommittee on Georgetown's 
cost reducing advanced medical technologies.
    Advance technologies have made dramatic changes in health 
care. Georgetown University and Walter Reed Army Medical Center 
have been focusing cost reducing medical advanced technologies 
that at the same time improve the quality of care. We request 
$20 million for fiscal year 1999 to be added as a continuation 
to the existing research contract DAMD-17-94-V-4015 to further 
develop and deploy these technological innovations. Two of the 
high cost areas in health care are management of chronically 
ill patients and major surgical procedures requiring hospital 
stays. We propose to target these two important areas that 
share common technological infrastructure.
    Diabetes and hypertension are two of the major chronic 
illnesses that consume billions of dollars of health care cost. 
As the population ages, we expect a dramatic increase in the 
number of chronically ill patients. These patients, though they 
are a small percentage of the entire patient population, 
account for the majority of health care costs. For diabetes 
patients, if the glucose level can be tightly controlled by 
various means, they can lead a more productive and healthier 
life with a reduced risk of further medical complications. 
Currently we are installing, in collaboration with Walter Reed 
Army Medical Center, telemedicine systems at a number of 
diabetes patients' homes to monitor their glucose levels. We 
propose to expand the technical capabilities to reach a greater 
number of patients. This home-based telemedicine system will 
also be used for patient education, patient support activities, 
and computer assisted medical intervention to avoid medical 
complications that can be very costly.
    Advances in imaging, robotics, communication and computing 
have made it possible to operate on a patient without making a 
large open incision. The application of such a technique, known 
as minimally invasive therapy, has begun to revolutionize the 
traditional therapies and surgeries. For example, the hospital 
stay will be reduced from 7-9 days to 1-2 days in the case of 
spine surgery patients, thus reducing the morbidity and 
mortality rates and the cost of care. This new surgical program 
will include surgeries in the spine, prostate and kidney. For 
our men and women in uniform, this new technique will allow 
rapid return to duty. GUMC has been developing this project 
with multiple investigators at Walter Reed Army Medical Center 
over the past two years. Requested funds will allow us to 
expand current limited capabilities for routine patient care.
STATEMENT OF KENNETH E. QUICKEL, JR., M.D., PRESIDENT, 
            JOSLIN DIABETES CENTER, BOSTON, MA
    Senator Stevens. Dr. Kenneth Quickel, from the Joslin 
Diabetes Center. Good afternoon, sir.
    Dr. Quickel. Mr. Chairman and members of the subcommittee, 
we at Joslin certainly appreciate the opportunity to be here 
today, and we are eager to report to you our current progress 
with the demonstration project that was funded last year.
    The Joslin Diabetes demonstration project will institute 
pilot programs of detection, prevention and care in two 
regions. First, in Hawaii, through Tripler Army Hospital; and 
the second, in New England, through the Veterans Administration 
System. The objectives involving and technology transfer from 
Joslin's knowledge base, utilizing telemedicine strategies in 
the Department of Defense and the VA system, to provide state-
of-the-art care to people with diabetes.
    We would like to thank you for the funding in the 1998 
Defense Appropriations Act for the diabetes research project, 
and we would like to express our appreciation for the support 
and leadership on diabetes issues that Senator Inouye and his 
staff have provided, largely focused on the Stroup Clinic and 
Hospital in Hawaii, where we are coordinating this project.
    I would like to focus on two principal areas. First, to 
give you a very brief status report; and, second, to talk a 
little bit about the second year. The two objectives of the 
project were to screen for diabetes among Department of Defense 
and VA patient populations, and then to use innovative 
technologies to do that screening, which involves nothing more 
than shining a light in the eye. The second objective was to 
use the knowledge and the early diagnosis to implement improved 
diabetes care technologies.
    The project has now been assigned program element number 
63002 and project number 941. But September 30, 1998, we will 
have accomplished several things. The first is we will have 
completed the preliminary studies and setup of equipment and 
personnel in the New England. And we will be beginning to 
actually apply those strategies to the care of people with 
diabetes. The second is that we will have implemented phase one 
in Tripler Medical Hospital and be prepared to move on to the 
second phase at that point.
    Now, when this project was funded nearly a year ago, and 
since that time, we have spent about $1.5 million of Joslin 
Diabetes Center funds without any of the funds yet coming out. 
We have continued to push the project forward. We were not 
aware that at each stage of the Department of Defense review a 
percentage of the funds would be appropriated elsewhere. The 
bare-bones budget that we submitted last year has been 
therefore reduced to an insufficient level.
    Mr. Chairman, in order to implement this project properly 
and conduct the project in a manner that we intended, we will 
require an appropriation of $6.4 million for this project in 
1999. We believe that with that appropriation, which is 
strongly supported by all parties, we can move this forward to 
benefit the lives of people with diabetes.
    Senator Stevens. Let me make sure I understand this, 
Doctor, because I am naive, too; right? We gave you $2 million 
last year?
    Dr. Quickel. No, the appropriation last year was $4 
million.
    Senator Stevens. $4 million.
    Dr. Quickel. Yes.
    Senator Stevens. But you have not been given any of that 
yet?
    Dr. Quickel. We have not seen any money yet.
    Senator Stevens. And you have spent $2 million almost?
    Dr. Quickel. We have spent almost $2 million of our own 
funding, because we felt that to stop the forward momentum of 
this would be damaging to the project itself out of some 
confidence that the funding was going to come.
    Senator Stevens. And at each stage of this review, which is 
a peer review I take it--is that right?
    Dr. Quickel. Mostly.
    Senator Stevens. They are taking money out of it. And there 
is an overhead charge and a management charge.
    Dr. Quickel. Well, yes, there is payment for overhead 
charges, expenses of conducting the process.
    Senator Stevens. And you have got a half-a-million-dollar 
bill from VA for their participation?
    Dr. Quickel. Yes.
    Senator Stevens. Cannot you do this all yourself?
    Dr. Quickel. We have done it all ourselves to this point. 
And we have done it basically based on philanthropy and 
National Institute of Health [NIH] funding. And we are at a 
point now where it needs to be converted to a practical 
strategy that can be actually applied in the field. And because 
of the military's and the VA's interest in telemedicine, it is 
a perfect match, of taking something to them that they can use, 
and they bring something to the table that we need, in terms of 
the expertise in telemedicine.
    Senator Stevens. But if your request goes up 55 percent 
every year, you are not going to be involved in this very long, 
because we cannot afford that.
    Dr. Quickel. I understand.
    Senator Stevens. So I suggest you get together with your 
colleagues in the VA and the DOD and tell them to keep their 
mitts off your money. We will tell them, too.
    Dr. Quickel. Yes, we appreciate your help with that.
    Senator Stevens. I do not think there should be that kind 
of assessment. So unless they come to us and tell us to the 
contrary, we are going to find an arbitrary figure and limit 
the amount they can charge for oversight of these. We cannot 
afford to finance it.
    Dr. Quickel. Yes.
    Senator Stevens. And it sounds to me like they built up a 
unit in government to keep pace with what you are doing outside 
of government.
    Dr. Quickel. Right.
    Senator Stevens. And we turn to you because we thought you 
had special expertise.
    Dr. Quickel. Sure.
    Senator Stevens. We cannot stand that duplicated buildup. 
We will work with you to see what we can do. I am going to 
direct the staff to contact you and your VA and military 
counterparts, and tell us how we can limit them from invading 
this money. We want you to give us your advice, and we selected 
you because we thought you had that expertise. We did not 
intend for that money to be siphoned off by any unit of the 
government. So we will try to do our best. But we cannot raise 
you $6.4 million this year, with a budget that is less than we 
had last year. All right?

                           prepared statement

    Dr. Quickel. I appreciate that. So far, all of the money 
that has been spent is ours. And we are hoping to get this 
thing back on screen so we can continue to move forward. We 
appreciate your time and interest.
    [The statement follows:]
             Prepared Statement of Kenneth E. Quickel, Jr.
    Mr. Chairman and Members of the Subcommittee, we at the Joslin 
Diabetes Center in Boston appreciate the opportunity to appear before 
you again this year. We are extremely eager to report to you the 
progress on the two region, two year diabetes pilot demonstration 
project Joslin proposed to you last Spring.
    The Joslin diabetes demonstration project will institute pilot 
programs of detection, prevention and care in two regions: (1) Hawaii, 
through Tripler Army Medical Center; and (2) New England through VA's 
VISN-1. The objectives involve a training and technology transfer 
exercise of Joslin's expertise utilizing telemedicine infrastructures, 
personnel and employee/patient bases of the Departments of Defense and 
Veterans Affairs.
    We at Joslin would like to thank you for the funding in the Fiscal 
Year 1998 Defense Appropriations Act for the diabetes research project 
we are participating in with the Department of Defense and the 
Department of Veterans Affairs in New England and Hawaii. We would like 
to express our appreciation for the support and leadership on diabetes 
issues to Senator Inouye and his staff, and to the majority and 
minority professional staff of the Committee for their advice and 
counsel on the legislative process and DOD interface.
    My testimony focuses on two aspects of the project: (1) A status 
report on the current year; and (2) A request for second year funding.
                  status report: first year activities
    As you recall, the two objectives of the project are (1) Screening 
for diabetes among DOD's and VA's patient populations in New England 
and Hawaii, using an innovative technology which requires nothing more 
than shining a light in the eye; and (2) Implementing improved diabetes 
prevention and care protocols for the DOD's and VA's patient 
populations in New England and Hawaii.
    We were delayed in implementation somewhat this year due to DOD's 
deliberations on where to place this project programmatically. While 
the funding flow was being cleared, we have continued to invest 
resources and develop elements of the program at Joslin. We have now 
settled those issues and are linked with TATRC, the Telemedicine and 
Advanced Technology Research Center at Fort Dietrick, Maryland.
    Significant progress has been made towards establishing initial 
pilot studies to study patients with diabetes. We have reached 
understanding, with the support of DOD and VA personnel, on 
implementation of the work plan we brought to the Committee last year. 
We are in active discussions on implementation with both Departments.
    Shortly, we will begin:
  --Three Phase I pilot projects to provide information on the expected 
        magnitude of the proposed interventions and to evaluate the 
        feasibility of the application of these protocols at multiple 
        sites. After the Phase 1 pilot study, we will move to a Phase 2 
        large-scale study on both the Joslin Vision Network (JVN) and 
        the Diabetes Intensive Treatment Program (DOIT).
  --The process of developing the Phase 1 and Phase 2 studies for both 
        the JVN and the DOIT Program at the DOD.
  --The process of organization and distribution of the remote access 
        diabetic detection units at multiple sites.
    By September 30, 1998, we will have accomplished the following, 
despite the delay in our start date: Completion of Phase 1 studies in 
the New England area for the VA; Implementation of Phase 2 studies in 
the New England area for the VA; Implementation of Phase 1 studies at 
Tripler Army Medical Center, Hawaii; Deployment of three remote 
examination sites in New England; Initiation of the deployment of three 
remote examination sites in Hawaii; and Further maturation of the 
technology at Joslin.
                   second year plan and funding needs
    In Year 2 we will have accomplished the following objectives:
  --Provide DOD and VA diabetes patients cost-effective access to the 
        benefits of annual retinal examination, diagnosis, and 
        treatment as necessary to reduce the risk of vision loss;
  --Develop the utilization of a quick, efficient and easily acceptable 
        method of screening for diabetes at remote sites;
  --Demonstrate efficient and effective methods to improve the 
        metabolic control for patients with diabetes.
    Anticipating early implementation in November of 1997, Joslin began 
procuring the necessary equipment to carry out the project. To date, 
Joslin has expended approximately $2 million, without any reimbursement 
from Federal funds. This has been a particular challenge for a 
nonprofit institution whose annual shortfall is made up through gifts 
from foundations and private donors.
    Joslin was a little naive in the preparation of the budget we 
prepared for the current fiscal year. We were not aware that at each 
stage of DOD review and decision-making, a percentage of the funds 
available would be deducted for program management and administrative 
overhead. Nor did we anticipate several unforeseen expenses required by 
the Department of Defense. We are also now faced with a budget from the 
VA for $500,000 for the two-year period for their participation in this 
project. As a result, the bare bones budget we submitted last year has 
been reduced to an insufficient level. DOD have officials recognized 
and appreciated Joslin's plight in this regard. The DOD program 
managers have indicated that they will support a second year budget of 
$6.4 million to assure that this important initiative can proceed.
    In total, assessments by DOD and VA are projected at $2,000,000 
from the funds we had originally budgeted for this two year project.
    The supporting detail for the second year request is in the final 
stages of preparation. We are grateful that we have the programmatic 
support of DOD in our efforts. We are also very fortunate that DOD 
understands the budget and funding issues, and will support the second 
year effort at $6.4 million.
    Mr. Chairman, in order to implement this project properly, and 
conduct the project in the manner and under the terms established by 
DOD and the VA, we will require an appropriation of $6.4 million in 
fiscal year 1999.
    Mr. Chairman, that concludes my brief statement. We are pleased to 
be a part of this project with the Department of Defense and appreciate 
your Committee's support.
    I would be pleased to answer any question from you or any other 
Members of the Subcommittee.

    Senator Stevens. Senator Domenici.
    Senator Domenici. Mr. Chairman, I wonder if I could ask one 
question about diabetes.
    Senator Stevens. Please.
    Senator Domenici. Do you know, Doctor, whether in the 
military at large there is a system of screening for diabetes 
among all the members of the armed forces?
    Dr. Quickel. There is an initial screening at the time 
people enter active duty. But of course the families are never 
screened, and the dependents are never screened. And then the 
VA becomes responsible for a long period thereafter. But there 
is screening of active duty military when they first come on 
line.
    And, in fact, they are not permitted to come on line, I do 
not believe, if they do have diabetes.
    Senator Domenici. But is there a screening for those who 
have been in a long time, do you know?
    Dr. Quickel. I think it is probably screening that is very 
similar to what is done in the civilian world: when you do 
interact with the medical system, somebody will get a blood 
sugar and screen you at that point in time.
    Part of what we are proposing here, though, is a very 
simple means of screening that would be applicable--you could 
do it on annual basis, with very little expenditure.
    Senator Domenici. Senator Inouye, the reason I asked the 
question is that you and I know that, in the United States, the 
population that has the highest propensity for diabetes is the 
Indian population, and second behind that is the Hispanic. And 
it would be interesting to know if you could take a large group 
of American military who had been in for a long time, and find 
out how many were Indian, and see if they had the same high 
level, which might give us some answer as to how much is 
environmental and how much is genetic.
    Dr. Quickel. Yes.
    Senator Domenici. But he is not the fellow to ask that 
question.
    Dr. Quickel. And we are especially interested in Hawaii, 
because the civilian population of Hawaii, on the average, has 
the highest prevalence of diabetes, as a whole population. 
Although, as you know, in the Southwest, the American Indians 
are probably the highest of all.
    Senator Domenici. Thank you, Mr. Chairman.
    Senator Stevens. Thank you very much.
    Dr. Quickel. Thank you.
    Senator Stevens. At this time, I do not mean to be rude, 
but I would say do not be naive enough to spend your own money 
again. [Laughter.]
    Let us make sure they give you what we appropriated for 
you.
    Dr. Jerome Odom, the Coalition of EPSCOR States.
STATEMENT OF JEROME ODOM, PH.D., CHAIRMAN, COALITION OF 
            EPSCoR STATES
    Dr. Odom. Thank you, Mr. Chairman and members of the 
subcommittee, for the opportunity to appear in support of the 
Department of Defense Experimental Program to Stimulate 
Competitive Research, sometimes known as DEPSCoR. My name is 
Jerry Odom, and I am Executive Vice President for Academic 
Affairs at the University of South Carolina. However, today, I 
am appearing as Chairman of the Coalition of EPSCoR States.
    The Coalition supports the Defense Department's budget 
request of $10 million for the Defense EPSCoR program. However, 
we respectfully urge the subcommittee to appropriate an 
additional $15 million for this productive program. The Defense 
EPSCoR program is funded through the University Research 
Initiative. EPSCoR is a research and development program, 
initiated by the National Science Foundation. Through a merit 
review process, EPSCoR helps researchers, institutions and 
States improve their research capabilities and quality in order 
to compete more effectively for non-EPSCoR research funds.
    Based on the positive results of the National Science 
Foundation program, Congress established the Defense EPSCoR 
program in the 1995 National Defense Authorization Act. Mr. 
Chairman, some of the most important scientific breakthroughs 
and innovative technologies that have changed our modern world 
have been produced by university-based scientists and 
engineers, supported by the Defense Department's research and 
development efforts. University-based research helped to 
develop new technologies and new ideas that have made 
fundamental contributions to a strong national defense.
    I would like to cite just a few examples of some of the 
research being conducted in the EPSCoR States that support the 
Department's national defense mission. Alabama researchers are 
working on thermoelectric materials and devices for cooling 
small, microelectric components. This work will provide 
important technological components for the very small computers 
and other electronic devices of the future.
    The DEPSCoR program funded a unique molecular beam facility 
and scanning tunneling microscope at the University of 
Arkansas. Researchers believe it is possible to more carefully 
design semiconductor fabrication and to produce semiconductor 
structures with interfaces of the highest quality seen. Based 
on new concepts developed through this DEPSCoR-sponsored 
research, the Arkansas researchers expect to develop the 
fastest transistor ever.
    Engineers and scientists at the University of Louisville 
and the University of Kentucky have established an Electro-
optics Research Institute to design cutting-edge optical 
pattern recognition systems.
    Mississippi State University's researchers, working with 
the Naval Oceanographic Office, are developing an oceanographic 
database and the tools needed to support the automated 
extraction of information from this database.
    University of South Carolina scientists, working in 
automatic target recognition, antisubmarine warfare, surface 
modelling, and simulation methods, have produced literally 
hundreds of research papers and theses. This has been widely 
recognized as one of the Navy's most successful research 
programs.
    Vermont researchers are working on a new technique to 
fabricate materials that could ultimately contribute to the 
construction of a computer which operates through optical 
signal communications, allowing very high-speech 
communications, approaching the speed of light.
    Another group in Vermont is working on electromagnetic 
radiation and wave propagation that has applications to ground- 
and foliage-penetrating radar.
    The Coalition appreciates the subcommittee's longstanding 
support for Defense EPSCoR. We recognize the tight fiscal 
constraints. But we would urge you to invest an additional $15 
million, increasing the funding to $25 million.
    Thank you, Mr. Chairman.
    Senator Stevens. Thank you very much. I appreciate your 
being with us.
    [The statement follows:]
                   Prepared Statement of Jerome Odom
    Mr. Chairman and members of the Subcommittee, I thank you for the 
opportunity to submit this testimony regarding the Department of 
Defense Experimental Program to Stimulate Competitive Research 
(DEPSCoR).
    My name is Jerry Odom. I am Provost and Executive Vice President 
for Academic Affairs of the University of South Carolina. I am 
appearing today as Chairman of the Coalition of EPSCoR States and 
testifying on behalf of the states \1\ that are eligible to participate 
in the Experimental Program to Stimulate Competitive Research (EPSCoR).
---------------------------------------------------------------------------
    \1\ Alabama, Arkansas, Idaho, Kansas, Kentucky, Louisiana, Maine, 
Mississippi, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Puerto 
Rico, South Carolina, South Dakota, Vermont, West Virginia, and 
Wyoming.
---------------------------------------------------------------------------
    The Coalition of EPSCoR States supports the Defense Department's 
budget request of $10 million for the Defense EPSCoR program, but we 
respectfully urge the Subcommittee to appropriate an additional $15 
million for this productive program. The Defense EPSCoR program is 
funding through the University Research Initiative (PE 61103D).
    EPSCoR is a research and development program initiated by the 
National Science Foundation. Through a merit review process, EPSCoR is 
improving our Nation's science and technology capability by funding 
research activities of talented researchers at universities and non-
profit organizations in states that historically have not received 
significant Federal R&D funding. EPSCoR helps researchers, 
institutions, and states improve their research capabilities and 
quality in order to compete more effectively for non-EPSCoR research 
funds. EPSCoR is a catalyst for change and is widely viewed as a 
``model'' Federal-state partnership.
    Based on the positive results of the NSF program, Congress created 
EPSCoR programs in six additional federal agencies. One of these is the 
Defense Department. The individual agency EPSCoR programs help 
researchers and institutions in participating states improve the 
quality of their research so they can compete for non-EPSCoR research 
funds. The federal-wide EPSCoR effort funds only merit-based, peer 
reviewed programs that work to enhance the competitiveness of research 
institutions and increase the probability of long-term growth of 
competitive funding.
    EPSCoR relies heavily on state involvement and participation, 
including non-federal matching funds. Due to the federal/state 
partnership upon which EPSCoR relies, EPSCoR is often considered a 
model program, and is a wise use of taxpayer funds during these 
difficult fiscal times.
    DEPSCoR contributes to the states' goals of developing and 
enhancing their research capabilities, while simultaneously supporting 
the Defense Department's research goals. DEPSCoR grants are based on 
recommendations from the EPSCoR state committees and the Department's 
own evaluation and ranking. It also builds research competitiveness by 
fostering collaborations and developing human resources. Research 
proposals are only funded if they provide the Defense Department with 
research in areas important to national defense.
    DEPSCoR was originally authorized by Section 257 of the National 
Defense Authorization Act of 1995 (Public Law 103-337), which states 
that the Defense EPSCoR program's objectives are to:
  --enhance the capabilities of institutions of higher education in 
        eligible states to develop, plan, and execute science and 
        engineering research that is competitive under the peer-review 
        systems used for awarding Federal research assistance; and
  --increase the probability of long-term growth in the competitively 
        awarded financial assistance that universities in eligible 
        states receive from the Federal Government for science and 
        engineering research.
    Last year the Defense Department issued an announcement of a 
competition under the aegis of the Defense EPSCoR program. A total of 
260 projects were received from the 19 states eligible to participate 
in DEPSCoR. Following review of the individual projects by the 
appropriate research office (the Army Research Office, the Ballistic 
Missile Defense Organization, the Office of Naval Research, or the Air 
Force Office of Scientific Research) 55 projects were selected for 
funding with $16.4 million made available in fiscal year 1997. The 
average award was $295,000. Subsequently, the Department announced the 
selection of 72 additional projects for funding with $18 million made 
available in fiscal year 1998. The average of those awards was 
$250,000.
    Mr. Chairman, some of the most important scientific break throughs 
and innovative technologies that have changed our modern world have 
been produced by university-based scientists and engineers supported by 
the Defense Department's R&D efforts. University based research helped 
to develop new technologies and new ideas that have made fundamental 
contributions to a strong national defense. Among the major 
contributions over the years have been radar, nuclear power, digital 
computers, lasers, vaccines and new drugs to fight diseases that 
debilitate service personnel. Not all of the innovative discoveries 
developed in university laboratories have been as profound as these, 
but each in turn has made small contributions to maintaining America's 
technological superiority.
    As Secretary Cohen has said: ``How wisely we invest in research 
today will greatly influence the readiness of our future forces to 
succeed when called to protect our national interest.''
    I would like to site a few examples of some of the research being 
conducted in our states that supports the Department's national defense 
mission.
  --Researchers in Alabama have received funding for work on 
        thermoelectric materials and devices for cooling small 
        microelectronic components, work that will provide important 
        technological components for the very small computers and other 
        electronic devices of the future.
  --DEPSCoR funded a program in the Physics Department at the 
        University of Arkansas, a unique molecular beam facility. For 
        the first time it will be possible to control the growth of 
        semiconductor devices, as opposed to growth by chance. Using 
        new equipment purchased through DEPSCoR, these researchers 
        believe it is possible to more carefully design semiconductor 
        fabrication. Another piece of equipment, a scanning tunneling 
        microscope, has enabled them to produce semiconductor 
        structures with interfaces of the highest quality ever seen. 
        Based on new concepts developed through DEPSCoR-sponsored 
        research, the Arkansas researchers expect to develop the 
        fastest transistor ever.
  --Engineers and scientists at the University of Louisville and the 
        University of Kentucky have established an Electro-Optics 
        Research institute to design cutting-edge optical pattern 
        recognition systems.
  --Mississippi State University researchers working in partnership 
        with the Naval Oceanographic Office are developing a knowledge 
        discovery system consisting of an oceanographic database and 
        the tools needed to support the automated extraction of 
        information from the database. This project will aid scientists 
        at NAVOCEANO in the identification and characterization of 
        geologically similar regions of the ocean floor and the 
        development of a prototypical system that uses acoustic imagery 
        to geologically define the ocean floor.
  --Likewise, DEPSCoR-funded scientists in Mississippi are working with 
        the Navy's Large Cavitation channel facility to solve problems 
        Navy submarines experience when operating in the shallow waters 
        of the Persian Gulf and other littoral regions, where 
        uncommanded depth charges during high speed maneuvers could 
        place submarines at risk.
  --Clemson University's electrical and computer engineers have created 
        a focused research initiative in mobile wireless battlefield 
        communications. The program is supporting research that is 
        making improvements in soft-decision decoding of convolution 
        codes that results in higher throughput, lower delay and 
        increased reliability in communication networks on the 
        battlefield. The program is not only serving DOD needs and 
        meeting private sector interest but has also achieved a level 
        of recognition that is attracting gifted students and producing 
        graduates which make an immediate impact as future employees 
        because of their excellent background in wireless networks at a 
        very competitive time.
  --With the aid of DEPSCoR funding to the University of South 
        Carolina's mathematicians, chemists and engineers are making 
        significant contributions to defense programs in Automatic 
        Target Recognition, Antisubmarine Warfare, Surface Modeling and 
        Simulation Methods. The program involves more than thirty 
        researchers and ten postdoctoral fellows, has produced 
        literally hundreds of research papers and theses and has been 
        recognized as one of the Navy's most successful research 
        programs in recent years.
  --University of Vermont researchers are working on new techniques to 
        fabricate materials that could ultimately contribute to the 
        construction of a computer which operates through optical 
        signal communications allowing very high-speed communications, 
        approaching the speed of light. Likewise, others are conducting 
        research for the Air Force in electromagnetic radiation and 
        wave propagation with applications to ground and foliage 
        penetrating radar. And a DEPSCoR-supported chemist received the 
        largest grant ever given to St. Michael's college for work in 
        development of alternative high energy density hydrocarbon 
        fuels, propellants and explosives.
    These are a few examples of the types of activities the EPSCoR 
Coalition believes will benefit the Defense Department and should 
strengthen and expand. This is why we believe additional funds should 
be made available for fiscal year 1999.
    Given the success of the EPSCoR programs in South Carolina and 
other states, it is not surprising that we are very interested in and 
enthusiastic about the future of the Defense EPSCoR program. It has 
been our experience that the EPSCoR programs yield a return far beyond 
the original investment. EPSCoR allows the states to accomplish more 
than is possible through the regular research programs. It has helped 
South Carolina attract and retain young researchers who are able to 
demonstrate through EPSCoR support of their research, that they have 
bright futures in fields of research that are of interest to the 
Defense Department.
    At its core, DEPSCoR, in conjunction with the NSF EPSCoR effort, 
supports quality peer-reviewed research, but also builds the research 
infrastructure that improves our overall competitiveness. It 
contributes collaboration, strategic thinking and broad scale planning, 
and development of a shared research vision by the state. South 
Carolina is making good use of Defense EPSCoR in concert with and 
complementary to the other agency research initiatives.
    Mr. Chairman, on behalf of the Coalition of EPSCoR States, I would 
like to express the Coalition's support of the Defense Department's 
fiscal year 1999 request for its basic research program (functions 6.1 
and 6.2). Likewise, we believe the University Research Initiative, 
which provides essential support for researchers and scientists 
throughout the country, should be funded at the $216.3 million level 
requested in the budget.
    The Coalition appreciates this Subcommittee's long-standing support 
for Defense EPSCoR and we urge to continue that support. The Coalition 
recognizes the very tight fiscal constrains this Subcommittee faces in 
the new era of a balanced federal budget, but we respectfully request 
that you provide $25 million for the Defense EPSCoR program for fiscal 
year 1999 as the University Research Initiative.
    The Defense Department's Experimental Program to Stimulate 
Competitive Research is a wise and worthwhile investment of scarce 
public resources. It will continue to contribute significantly to 
efforts to build the scientific and engineering research efforts in 
support of national defense needs.
    Thank you for your consideration of this request.
STATEMENT OF MARTIN B. FOIL, JR., CHAIRMAN, BRAIN 
            INJURY ASSOCIATION, INC.
    Senator Stevens. Martin Foil, Chairman of the Brain Injury 
Association.
    Mr. Foil. Chairman Stevens, Senator Inouye, Senator 
Domenici, thank you very much for letting me be here this 
afternoon.
    My name is Martin B. Foil, Jr., and I come before you today 
as the father of Philip Foil, a young man with a severe brain 
injury. I serve as the voluntary Chairman of the Brain Injury 
Association. I am also the Chairman and Chief Executive Officer 
of Tuscarora Yarns in Mt. Pleasant, North Carolina.
    I receive no compensation from the Brain Injury Association 
for the programs I am testifying about here today. Rather, I do 
contribute considerable amounts of my own money to the 
Association primarily because, Mr. Chairman, we want to help 
improve the lives of persons with brain injury. And I am here 
because I care. I care about the 9 million Americans living 
with brain injury, and their families.
    The Defense and Veterans Head Injury Project [DVHIP] and 
the Violence and Brain Injury Project [VBIP] are collaborative 
efforts among the DOD and the Veterans Affairs and the Brain 
Injury Association. Together we serve not only active duty 
military personnel, of whom some 7,000 a year suffer brain 
injury, but we are an important resource to veterans and the 
civilian population, as well. Therefore, our programs are 
exemplary cases of dual-use funding.
    And I am pleased to report to you today that our 
collaborative efforts are continuing to pay off. By increasing 
the return-to-duty rate of military personnel and improving the 
efficiency of medical services provided, DOD does realize 
significant cost savings. We have many accomplishments this 
year, including expanding our patient registry, treatment and 
referral network. Our Brain Injury Resource Center, developed 
by our Association, is now available in 60 locations across the 
country, including select DOD hospitals and VA hospitals, as 
well as civilian facilities.
    Our toll free help line receives 15,000 calls a year, 
helping not only military personnel but civilians with brain 
injury and their care-givers. We have increased our prevention 
and educational programs to include Brain Building Basics, a 
violence prevention and brain injury awareness program for 
adults with low literacy skills, including incarcerated 
populations. Our Head Smart Schools Program is used in 21 
States, the District of Columbia, and educates over 130,000 
children. We have seven Head Smart community programs in the 
military.
    We are embarking on research for neuro-behavioral problems 
to help military personnel return to work. We are especially 
excited about new functional MRI technology, which helps create 
diagnostic criteria for mild and moderate brain injury, which 
are significant problems in the military. This research will be 
valuable to maintaining readiness, by discerning who is capable 
to return to active duty.
    Brain injury is the silent epidemic, the largest killer and 
cause of disability among young people. We need to do more. We 
need to help our military by continuing to be ready. We need 
your support, sirs, for $8.5 million in funding, so that DVHIP 
and VBIP and our Association can carry on our unique 
partnership.

                           prepared statement

    Thank you very much, and God bless you. I am ready to 
answer any questions.
    Senator Stevens. Thank you very much.
    There are no questions.
    Mr. Foil. Thank you very much, sir.
    [The statement follows:]
               Prepared Statement of Martin B. Foil, Jr.
    Mr. Chairman and Members of the Senate Defense Subcommittee: My 
name is Martin B. Foil, Jr. I am the father of Philip Foil, a young man 
with a severe brain injury, and I serve as voluntary Chairman of the 
Brain Injury Association. I am also the Chief Executive Officer and 
Chairman of Tuscarora Yarns in Mt. Pleasant, North Carolina.
    I appreciate the opportunity to provide testimony regarding the 
Defense and Veterans Head Injury Program and the Violence and Brain 
Injury Project. Both programs are collaborative efforts among the 
Departments of Defense and Veterans Affairs and the Brain Injury 
Association, which address the prevention and treatment of brain injury 
in the military and civilian sectors. I respectfully request that you 
support level funding of $8.5 million for these programs.\1\
---------------------------------------------------------------------------
    \1\ The Department of Defense proposed $7 million for fiscal year 
1999. Thus, we are requesting an additional $1.5 million to keep our 
services available to the military and civilian communities.
---------------------------------------------------------------------------
    I urge your support for these programs on behalf of the Brain 
Injury Association (BIA). BIA is a national, non-profit organization 
dedicated to promoting awareness, understanding and prevention of brain 
injury. This is done through education, advocacy, research and 
community support services that lead toward reduced incidence and 
improved outcomes of persons with brain injuries.
    I receive no personal benefit or monetary gain from the programs I 
will discuss. I am providing this testimony simply because I care about 
the 9 million Americans living with brain injuries and their families. 
In compliance with Committee Rules, enclosed is a copy of my resume 
along with a statement regarding the funding that BIA received last 
year, to conduct its share of these two programs.
    My testimony will summarize some significant accomplishments that 
the DVHIP and VBIP achieved in 1997, and what we, through the BIA, 
expect for the coming year.
Brain Injury in the United States and the U.S. Military
    The General Accounting Office (GAO) recently reported to the 
Congress that traumatic brain injury is the leading cause of death and 
disability in young American adults. In addition, between 1.5 and 2 
million individuals across the United States sustain a traumatic brain 
injury (TBI) each year. The GAO published its findings in its February 
1998 report, entitled ``Traumatic Brain Injury: Programs Supporting 
Long-Term Services in Selected States.''
    Each year, approximately 7,000 brain injury patients are admitted 
to military and VA hospitals. This number does not include personnel 
who experienced mild brain injury, concussions, or those receiving 
emergency room treatment and early release. The cost to the military 
has been estimated at $30 million annually in medical retirement 
payments.
Defense and Veterans Head Injury Program
    The Defense and Veterans Head Injury Program (DVHIP) is a close 
collaborative program among the Department of Defense (DOD), the 
Department of Veterans Affairs (VA), and the Brain Injury Association 
(BIA). It is an integrated, multidisciplinary disease management system 
focusing on both peacetime and combat traumatic brain injury (TBI). Its 
activities span the spectrum of brain injury from prevention, 
education, and advocacy, to clinical care and clinical and laboratory 
research focused on TBI.
    The collaborative efforts of the DVHIP, contribute to our nation's 
preparedness by helping service members return to work, as well as 
provide critical support to keep families together during the difficult 
times after brain injury.\2\ It is a prime example of a dual use 
program.
---------------------------------------------------------------------------
    \2\ Last year at Walter Reed Army Medical Center, we achieved a 70 
percent return to work rate.
---------------------------------------------------------------------------
    The DVHIP's primary objectives are:
  --To ensure that DOD and VA patients with brain injury receive 
        specialized evaluation, treatment, and follow-up, while at the 
        same time, conducting integrated clinical and clinically-linked 
        laboratory research studies that seek to define optimal cost 
        effective treatment for TBI;
  --To facilitate treatment of TBI resulting from combat and training 
        operations including identification and follow-up (as in our 
        Vietnam Head Injury Study), as well as deployment of 
        pharmacologic and other therapies that will minimize the brain 
        swelling and secondary tissue injury which accounts for most of 
        the morbidity after TBI.
    In an ongoing effort to fulfill these primary objectives, the DVHIP 
has developed and is in various stages of carrying out six specific 
activities: (1) Establishment and maintenance of peacetime and combat 
TBI patient registries; (2) Establishment of a regionally distributed, 
integrated, national DOD/VA TBI referral network; (3) Establishment of 
standardized patient outcome evaluations which define the short and 
long-term neurologic, cognitive, behavioral, and psychosocial 
consequences of TBI; (4) Evaluation of the effectiveness and relative 
cost efficiency of alternative TBI rehabilitation strategies; (5) 
Conduct pharmacologic trials of both neuroprotectant and symptomatic 
agents; and (6) Conduct clinically-linked laboratory projects.
The Brain Injury Association and the DVHIP
    In close collaboration with the Brain Injury Association, the DVHIP 
has developed extensive educational programs and materials, primary 
prevention resources, and community support services. For instance, BIA 
has developed a Brain Injury Resource CenterTM (BIRC) which 
provides easy access to a multi-media computer library through a touch-
screen monitor and program that allows users to learn about brain 
injury at a personalized pace. The BIRC combines still and motion 
video, graphics, text and sound to give users access to information 
vast enough to fill a small library. The completely interactive 
multimedia computer system is now available in over 60 locations across 
the country, including select DOD and VA hospitals.\3\ Civilian 
facilities have also purchased the BIRC for use across the nation.\4\
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    \3\ Denver Veterans Affairs Medical Center, Denver, CO; Hines 
Veterans Affairs Medical Center, Hines, IL; Lyons Veterans Affairs 
Medical Center, Lyons, NJ; Madigan Army Medical Center, Takoma, WA; 
Memphis Veterans Affairs Medical Center, Memphis, TN; Minneapolis VA 
Medical Center, Minneapolis, MN; Palo Alto VA Medical Center, Palo 
Alto, CA; Portsmouth Naval Medical Center, Portsmouth, VA; Richmond VA 
Medical Center, Richmond, VA; San Diego Naval Medical Center, San 
Diego, CA; Seattle Veterans Affairs Medical Center, Seattle, WA; Walter 
Reed Army Medical Center, Washington, DC; Wilford Hall Air Force 
Medical Center, San Antonio, TX; Womack Army Medical Center, 
Portsmouth, VA.
    \4\ Baptist Hospital of Miami, Miami, FL; Brain Injury Association 
National Office, Washington, DC; Brain Injury Association of Illinois; 
Carolinas Medical Center, Charlotte Institute of Rehabilitation, 
Charlotte, NC; Christ Hospital, Chicago, IL (on loan from Brain Injury 
Association of Illinois); Crumley and Associates, Asheboro, NC; 
Harborview Medical Center, University of Washington, Seattle, WA; Hill, 
Peterson, Carper, Bee & Dietzler, Charleston, WV; Inova Center for 
Rehabilitation at Mount Vernon Hospital, Alexandria, VA; Jackson 
Memorial Hospital, Ryder Trauma Center, Miami, FL; James A. Haley VA 
Medical Center, Tampa, FL; Kennedy Krieger Institute, Baltimore, MD; 
Macomb Hospital Partial Day Program, Warren, MI; Mary Free Bed 
Hospital, Grand Rapids, MI; Mary Free Bed Hospital, Grand Rapids, MI 
(on loan from Simkins and Simkins, Northville, MI); Northwestern 
Medical Center, Chicago, IL; Nunn & Greene Law Office, Bloomington, IN; 
Ohio State University, Columbus, OH; Rehabilitation Institute of 
Chicago, Chicago, IL; Roger C. Peace Rehabilitation Hospital, 
Greenville, SC; Santa Clara Valley Medical Center, San Jose, CA; 
Shepherd Center, Atlanta, GA; St. Mary's Medical Center, Minneapolis, 
MN; State of Arizona's Council on Head and Spinal Cord Injury (3 
systems); University of California-Los Angeles (UCLA) Hospital, Los 
Angeles, CA; University of Maryland Medical Center, Shock Trauma 
Center, Baltimore, MD; University of Pennsylvania Hospital, 
Philadelphia, PA; University of Virginia Medical Center, 
Charlottesville, VA.
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    The Information and Resources Department of BIA acts as a 
clearinghouse of community service information and resources. BIA's 
toll-free Family Helpline receives more than 15,000 calls each year 
from individuals whose lives have been affected by brain injury, 
including military personnel and their families. Three full-time 
information specialists are trained to answer questions, offer 
appropriate information and identify additional resources for all 
incoming callers. Last year, a DVHIP Information and Resources Training 
was held to assist specialists serving persons whose lives have been 
affected by brain injury. BIA also developed and distributed a 1997 
Information and Resource Training and Reference Manual. In addition, 
BIA designed a specialized DVHIP Case Manager Resource and Training 
Manual for use by military personnel and veterans assisting individuals 
with brain injury.
    BIA supports research in areas of brain injury that have a direct 
effect on returning military personnel to work. As cited in the 
February 1998, GAO Report to Congress, neurobehavioral problems 
following TBI are a major factor in successful reentry into the 
workforce. Working with a major university, BIA and the DVHIP supports 
a fellowship program and a significant research effort aimed at 
ameliorating this large problem. In addition, BIA and the DVHIP will be 
utilizing the functional magnetic resonance imaging technology (FMRI) 
to create diagnostic criteria for mild and moderate brain injury which 
are significant problems in the military. This research will be 
valuable to maintaining readiness by discerning who is capable of 
returning to active duty.
    BIA is currently revising and updating educational brochures which 
feature background information on brain injury, the DVHIP, and the lead 
and network DVHIP sites. The brochures will be provided to military 
veterans and personnel with brain injury as well as family members when 
they are seen at any one of the military or Department of Veterans 
Affairs Medical Centers. They will also be provided to referral sources 
in both military and civilian sectors in an effort to increase 
awareness of the DVHIP and to increase accessions to the research 
protocol.
    In the coming year, we look forward to strengthening the DOD/VA 
registry and referral network in our 24 sites, and establishing new 
sites in an effort to identify and serve more military patients. Our 
patient evaluation program will be strengthened and a TBI screening 
instrument will be developed and fielded. Randomized rehabilitation 
treatment trials and pharmacologic trials will be expanded, as will the 
supporting clinically-linked laboratory studies. Four new initiatives 
are planned to begin this year: a post-traumatic epilepsy multi-center 
therapeutic prophylaxis trial; combat training ``mild'' TBI 
performance-outcome and neuroprotection studies; a smaller 
epidemiological study of TBI outcome by gender; and the use of new 
techniques such as functional magnetic resonance imaging (FMRI) and MRI 
spectroscopy.
The Violence and Brain Injury Project
    The Violence and Brain Injury Project (VBIP) represents a 
collaborative effort of the Brain Injury Association, the Department of 
Defense and the National Institutes of Health (NIH). The VBIP brings 
the expertise of the DOD and NIH along with the advocacy and community 
support experience of the Brain Injury Association to bear on all 
aspects of the problem of violent behavior, emphasizing a medical/
biological approach. It is based on the hypothesis that brain injury is 
a significant risk factor for violent behavior.
    The Project has three principle components:
    (1) The VBIP Core Diagnostic Protocol, initially conducted at the 
U.S. Disciplinary Barracks at Fort Leavenworth, Kansas, includes 
standardized neurologic, neuropsychological, psychiatric, magnetic 
resonance imaging (MRI), advanced electroencephalographic, clinical and 
experimental laboratory, and psychosocial evaluations of violent versus 
non-violent inmates.
    (2) The second component involves the integration of the Brain 
Injury Association's HeadSmart injury and violence prevention 
program into the curricula of DOD dependent schools. The HeadSmart 
Schools Program is the foremost prevention initiative promoted by the 
Brain Injury Association. It is a brain injury and violence prevention 
program for elementary and preschools that teaches about brain 
development and the prevention of intentional and unintentional brain 
injuries. It provides educators with training and materials to 
integrate brain injury and violence prevention messages into their 
regular curriculum. (It is not a set curriculum in itself).
    The program is currently being used in 121 schools in 21 states 
plus the District of Columbia. We have trained 487 elementary and 
preschool educators on the basics of brain injury and violence 
prevention--affecting the education of over 130,000 children.\5\
---------------------------------------------------------------------------
    \5\ 1997 Sites receiving HeadSmart Trainings and other violence and 
injury prevention programs include: Be HeadSmart Military Communities 
such as Fort Bragg, North Carolina; Fort Knox, Kentucky; Fort Campbell, 
Tennessee; Fort Bliss and Fort Sam Houston, Texas; West Point, New 
York; and Wright-Patterson Airforce Base, Ohio.
---------------------------------------------------------------------------
    (3) The third component encompasses several family oriented 
programs, including a Parenting and Literacy Skills and Brain Building 
Basics program for inmates in local correctional systems. The VBIP 
recently completed the three-year development of the Brain Building 
Basics Program which has also been successfully implemented with non-
incarcerated populations, focusing on persons with low literacy skills.
    In addition, VBIP established Changes, Choices, and Challenges 
(CCC), a violence prevention program that provides educators with 
integrated learning units which are designed to enhance the social, 
moral, and intellectual development of young adolescents.
    Publications completed by the VBIP include a comprehensive 
prevention manual, the Be HeadSmart Community Prevention Manual, a tool 
designed to provide information and resources to assist in the 
dissemination of the HeadSmart program; Brainy Bear's HeadSmart Habits, 
a parent-child activity book for violence and brain injury prevention; 
and a 1998 HeadSmart Schools Calendar developed from contributions from 
children at our HeadSmart Schools. The calendars present the 
comprehensive violence and brain injury prevention messages 
incorporated in the HeadSmart program.
    We look forward to building upon all three components of the VBIP 
in the coming year and expanding our prevention efforts.
Conclusion
    In conclusion, the work of the DVHIP and VBIP is a significant 
contribution to the health and readiness of the United States military. 
We respectfully request funding to continue these important programs. 
An appropriation of $8.5 million ($1.5 million over the DOD's request) 
will represent level funding (since fiscal year 1997).
    Thank you, and God bless you!
STATEMENT OF DENNIS M. DUGGAN, DEPUTY DIRECTOR, 
            NATIONAL SECURITY-FOREIGN RELATIONS 
            DIVISION, THE AMERICAN LEGION
    Senator Stevens. Dennis Duggan, Deputy Director of the 
National Security-Foreign Relations Division of the American 
Legion.
    We welcome you as a comrade.
    Mr. Duggan. Thank you, sir. And on behalf of our nearly 3 
million members, the American Legion is extremely grateful to 
you, as always, and the members of your distinguished 
subcommittee, for the opportunity to present its view with 
regard to this fiscal year 1999 defense budget.
    As we are all aware, this budget represents the 14th 
consecutive year of decline. As Americans, we do tend to take 
our secure environment for granted. Yet, as all of us as 
veterans, we do have a unique appreciation for a strong 
national defense.
    The fiscal year 1999 defense budget is currently running on 
the order of about $150 billion less than defense budgets 
during the Reagan years. As we know, the armed forces have 
incurred more than their share of spending and manpower cuts in 
order to achieve a balanced budget.
    Senator Stevens. Mr. Duggan, some people in the back cannot 
hear you. Can you move that microphone toward you, please?
    Mr. Duggan. How is this?
    Senator Stevens. Fine. Thank you.
    Mr. Duggan. In our collective view, the United States can 
and should afford a higher level of defense spending, 
especially with regard to manpower and readiness. Our current 
recruiting and retention trends are beginning to demonstrate 
that men and women, young men and women, are seriously 
questioning the value of military service. Frequent family 
deployments, diminishing health care, inadequate pay raises, 
and substandard housing are all contributing to the trend, we 
feel.
    We do congratulate you and members of your subcommittee for 
your tremendous support for a strong national defense and for 
adequate budgeting. There are just a few points, Mr. Chairman, 
we would like to emphasize. First of all, in our view, we 
believe that the current military retirement plan is broken and 
in need of a stabilized, guaranteed and better-paying plan. The 
so-called retirement formula should be scrapped and a more 
substantial plan implemented, coupled with significant basic 
pay and allowance raises.
    Without the assurance of a good military retirement plan 
and adequate health care, few will make the sacrifice, we 
believe, to serve in the armed forces.
    Second, the services are now in a compensation war with a 
strong economy. Yet there appears to be no strategy for the 
military to survive in an intense labor market. In our view, 
the only way to fix the pay problem is to change the pay raise 
process, to link military basic pay raises with full employment 
costs indices. We hope that the Senate goes along with the 
proposed 3.6 percent pay raise proposed in the House.
    And, third, the readiness of the armed forces, as we all 
believe, I think, has suffered as a result of many of these 
changes. And, finally, Mr. Chairman, as we know, the mortality 
rate of our old, World War II and Korean War veterans is 
roughly over 30,000 per month. We certainly cannot wait an 
awful lot longer, on the order of 5 to 7 years, for a real 
strong health care plan. And we ask your assistance, as you 
mentioned, for the closure of the Federal Employees Health Plan 
Benefits [FEHPB] as another alternative for military retirees 
and their dependents.
    Mr. Chairman, that completes my statement. Thank you very 
much.
    Senator Stevens. Any questions, gentlemen?
    [No response.]

                           prepared statement

    Senator Stevens. Well, we thank you for the Legion's normal 
and usual good job in reviewing what we are trying to do. We 
appreciate your advice, and keep in touch with us as we go 
along. Thank you very much.
    Mr. Duggan. Thank you.
    [The statement follows:]
                 Prepared Statement of Dennis M. Duggan
    Mr. Chairman, The American Legion is pleased to appear before this 
subcommittee to express its concerns about the fiscal year 1999 defense 
appropriations. As Americans, we tend to take our secure environment 
for granted. Yet as veterans, we have a unique appreciation for a 
strong national defense and recognize and accept the high cost 
associated with that endeavor.
    The proposed fiscal year 1999 defense budget is roughly $150 
billion less than during the Reagan presidency. Defense spending levels 
during fiscal year 1998 are about three percent of the gross domestic 
product (GDP). A decade ago it was six percent. Mr. Chairman and 
members of this subcommittee, military personnel and their families 
have incurred their fair share of spending cuts to help achieve deficit 
reduction. The American Legion believes it is now time for Congress to 
bolster defense spending with some of the monies from the projected 
surplus.
    The United States can, and should, afford a stronger national 
defense, especially with regard to quality of life and modernization. 
Quality of life and modernization are directly related to military 
readiness and have a direct impact on recruitment and retention. 
Current recruiting and retention trends are already starting to 
demonstrate that young men and women are seriously questioning the 
value of military service. Frequent family separations, diminishing 
health care, inadequate pay raises and substandard housing are 
contributing to this trend. Servicepersonnel and military retirees are 
seeing the promises of lifetime health care being broken and other 
benefits being reduced or eliminated. The American Legion believes 
military service is an awesome responsibility and a privilege that 
embody the highest form of service to the nation. Congress should also 
recognize this commitment by honoring past promises. Promises made must 
be promises kept.
                               readiness
    The administration asserts that the fiscal year 1999 defense budget 
protects readiness. The same claim was made regarding previous defense 
budgets as well. However, over-optimistic assumptions about actual 
funding requirements coupled with multiple unbudgeted contingency 
operations have resulted in a series of unit readiness problems. 
Training goals have not been met; and military readiness ratings have 
plunged due to reductions in operations and maintenance accounts as a 
result of unprogrammed and continued peacekeeping operations. If the 
1998 Defense Supplemental Appropriations bill is not immediately 
passed, readiness may be reduced again. Additionally, the Army is 
having difficulty meeting its recruiting goals and the quality of 
recruits has been dropping. Personnel turbulence and the erosion of 
quality of life are weakening each of the military services. These 
kinds of personnel readiness problems will begin to place our ability 
to wage high intensity conflict at risk.
                     active force personnel issues
    The American Legion is concerned that a number of influences, to 
include the military drawdown, pose significant and often 
underestimated retention and readiness risks for the remainder of the 
decade.
    Mr. Chairman, The American Legion and the Armed Forces owe you and 
your subcommittee a debt of gratitude for your strong support of 
military quality of life issues. Nevertheless your assistance is needed 
now more than ever. Positive congressional action is needed in this 
budget and future budgets to overcome old and new threats to retaining 
the finest military in the world. Servicemembers and their families 
have endured physical risks to their well-being and livelihood, 
substandard living conditions, and forfeiture of personal freedoms that 
most American civilians would find unacceptable. Worldwide deployments 
have increased significantly, and a smaller force has had to maintain a 
higher optempo with longer work hours and increased family separations.
    Throughout the drawdown years, military members have been called 
upon to set the example for the nation by accepting personal financial 
sacrifices. Their pay raises have been capped for years, and their 
health care system has been overhauled to cut costs, leaving military 
families with lessened access to proper health care. We congratulate 
the Congress for their quality of life enhancements contained in the 
Fiscal Year 1997 and Fiscal Year 1998 National Defense Authorization 
Acts. But more must be done now.
    Military Retirement.--In our view, the current military retirement 
plan is broken and in need of a stabilized, guaranteed, and better 
paying plan if the Armed Forces are to retain a quality force. 
Congressional tinkering with the military retirement system is likely 
leading to a decrease in combat readiness and could threaten national 
security. The American Legion has not adopted a position with regard to 
a 401(K) plan for servicemembers. Certainly, many servicemembers are 
opting out prior to retirement and others are likely to retire at their 
earliest opportunity.
    Essentially, the military has two choices: Revoke the redux-
retirement formula to retain good servicemembers who are often taken 
for granted and/or substantially increase active duty pay and 
allowances. Knowing that a secure and adequate retirement, including 
medical care, awaits a member and family at the end of a long, arduous 
career makes the hazards of military service bearable. Without that 
assurance, few will make the sacrifice.
    The marked decline in quality of life features for the active force 
and military retirees, coupled with heightened operational tempos, will 
continue to adversely impact on both recruiting and retention. If these 
benefits, like health care, commissaries, adequate pay and quarters all 
of which were taken for granted in the past, are funded at 
significantly reduced rates, or are privatized or eliminated 
completely, they will only serve to undermine the United States 
Government's effort to honor its obligations to its active and retired 
warriors.
    Full Military Pay Raises.--The Services are now in a ``compensation 
war'' with the private sector, yet have no strategy to survive in the 
competitive labor market. The military appears to be undergoing 
unacceptable retention losses. The armed forces must have high-quality 
servicemembers who can apply changing technology to combat 
capabilities. Since 1982, military raises have lagged a cumulative 12.9 
percent behind private sector wage growth. The Bureau of Labor 
Statistics measures private sector wage growth with a tool called the 
Employment Cost Index (ECI). Before 1994, federal civilian and military 
raises were supposed to match the ECI. But in 1994, new legislation 
took effect, capping federal civilian raises at one-half percentage 
point below the ECI. The difference was used to fund a ``new locality 
pay'' additive for federal civilians that varied by geographical 
location. When the pay raise standard for federal civilians changed to 
``ECI minus one-half percent,'' service members got stuck with the 
half-point reduction in their pay raises, even though they are not 
eligible for the civilian locality pay.
    The only way to fix the problem is to change the pay raise process 
to link military basic pay raises to the ECI, the full ECI. The 
military drawdown continues and the economy is in full swing. A smaller 
force with a high operations tempo will be extremely retention-
sensitive. Servicemembers have earned and deserve a raise at least 
equal to the average American's for every year not just during an 
election year. It is time to put that standard into law.
    The administration's budget describes the proposed fiscal year 1999 
3.1 percent raise, which is one-half percentage point smaller than the 
private sector wage growth, as ``the maximum raise allowed by law.'' 
Mr. Chairman, 11 pay caps in 15 years are already too many, and 
continuing this practice is a sure prescription for eventual retention 
disaster. Mr. Chairman, The American Legion also strongly believes this 
subcommittee should exert every effort to adequately compensate those 
hundreds of military families from having to rely on monthly food 
stamps and women's and infants compensation (WIC).
    Housing Allowances.--Two years ago, Congress took on the challenge 
of restoring these allowances to be more consistent with their original 
intent of covering 65 percent of servicemembers' median housing 
expenses, by grade and location. Thanks to this subcommittee, much 
progress has been made to ensure housing allowance stability for the 
duration of a servicemember's tenure at a duty location and to provide 
allowances at each location sufficient to obtain adequate quarters for 
junior personnel. But there is still some distance to go. The military 
is three years into what was intended as a five-year program to restore 
the Basic Allowance for Quarters (BAQ) to the standard originally set 
by Congress, an amount that would offset 65 percent of the national 
median housing cost for each grade.
    Members of the Armed Forces and their families should not be 
expected to live in unsafe or substandard housing in the United States 
or overseas. If government housing is not available on base, 
servicemembers should have the option of occupying leased government 
quarters off base. Members should not be sent into high-cost, high-
crime areas to fend for themselves.
    Commissaries.--Any effort to reduce or dismantle the integrity of 
the military commissary system would be seen as a serious breach of 
faith with a benefit system that serves as a mainstay for the active 
and reserve components, military retirees, 100 percent service-
connected disabled veterans, and others. The American Legion urges the 
Congress to preserve full federal funding of the military commissary 
system and to retain this vital non-pay compensation benefit which, we 
believe, is essential to the morale and readiness of the dedicated men 
and women who have served, and continue to serve, the national security 
interests of the United States. Furthermore, The American Legion fully 
supports the full-time usage of commissary stores by members of the 
reserve components.
    Surveys consistently indicate that the career incentive value of 
the commissary benefit is second only to military retirement pay and 
health care. The commissary benefit also provides significant 
additional ``psychological value'' that reinforces the sense of 
reciprocal commitment between the military institution and its members 
and plays a clear role in retention decisions. The American Legion 
opposes any effort by the Department of Defense to relegate military 
commissaries to the Services and to preserve the Defense Commissary 
Agency.
                 dod health care for military retirees
    Today, there are approximately 8.5 million beneficiaries in the 
military health care program. Military retirees and their dependents 
make up nearly one-half of that number, and over 500,000 retirees have 
lost or will lose their access to military health care as a result of 
the closure of approximately 45 percent of military treatment 
facilities. Access to affordable health care, regardless of age or 
health care status, represents the number one concern among military 
retirees. The Sense of the Congress resolution in the Fiscal Year 1993 
National Defense Authorization Act reaffirms the basis of health care 
promised in law and tradition dating back more than 100 years. Until 
recently, military retirees were always led to believe that they were 
entitled to free lifetime health care as a major promise made in 
exchange for meager pay received and after having served 20 or more 
years in the most demanding and dangerous of professions.
    The American Legion receives letters daily from veterans citing the 
string of broken promises, and the growing list of benefits under 
attack. Medicare-eligible military retirees and their dependents are 
prohibited from enrolling in the TRICARE program. Nine states have no 
military treatment facilities, some 39 military hospitals were closed, 
17 more downsized to clinics, a 30-percent reduction in medical 
personnel, and severe reductions in military medical funding. Certainly 
alternatives are needed such as the authorized option of military 
retiree veterans and their dependents, over and under age 65, to 
voluntarily enroll in the Federal Employee Health Benefits Program 
(FEHBP).
    Military retirees are the only group of Federal ``employees'' who 
lose their health care benefits when they become 65 and are no longer 
eligible for CHAMPUS or TRICARE but become Medicare-eligible. Medicare 
covers much less than TRICARE, and must be supplemented by expensive 
health care supplement insurance which many military retirees cannot 
afford. The average military retiree is an E-6 Staff Sergeant or Petty 
Officer and not a Lieutenant Colonel. Despite its concerns, The 
American Legion supports full-funding of the TRICARE program, and it 
strongly believes that Medicare-eligible military retirees and their 
dependents should continue to have access to and treatment at military 
treatment facilities. Furthermore, all military retirees and their 
dependents should continue to receive free prescriptions from military 
medical centers.
    The American Legion has had a number of concerns, however, with the 
DOD TRICARE Health Care System as it affects military retirees, namely, 
that military retirees and their dependents are required to pay annual 
``enrollment fees'' and co-payments which are likely to increase over 
time. In addition, questions remain concerning provider reliability and 
the viability of Medicare reimbursement for treatment in DOD 
facilities; and TRICARE Prime health care requires both portability and 
reciprocity. Many military retirees do not reside near TRICARE 
providers. The American Legion believes that, as a minimum, the 
following guidelines should be incorporated or retained as part of the 
TRICARE package or any reform of military health care for active duty 
families, military retirees and their dependents and military 
survivors:
  --Timely access to military medical treatment for a continuum of 
        quality, comprehensive and equitable health care benefits 
        covering the full array of services ranging from preventive 
        health care and dental treatment plans to prescription services 
        for all military retirees, their dependents, and military 
        survivors regardless of age and health care status. Defense 
        dental plans need to cover the more expensive dental 
        procedures.
  --Preservation of the space-available system in military treatment 
        facilities for TRICARE and Medicare eligible military retirees 
        and their dependents.
  --TRICARE coverage should continue for the lifetime of military 
        retirees and not end at age 65.
  --Medicare subvention should be implemented nationwide on a fee-for-
        service basis, and Medicare eligible retirees should be allowed 
        to participate in the TRICARE program.
  --No further military medical facilities should be closed or 
        downsized, and adequate military medical personnel, to include 
        graduates of the Uniformed Services University of Health 
        Sciences, should be retained on active duty to provide health 
        care for active duty personnel and their dependents, and 
        retired military personnel and their dependents.
  --Authorize military retirees and their dependents the opportunity to 
        voluntarily enroll in the Federal Employee Health Benefits 
        Program, regardless of age or health care status. For this 
        program to be cost effective for the government and military 
        retirees, we believe it would have to be offered as an option 
        to TRICARE for service members entering retirement.
  --Enrollment fees and cost-sharing in TRICARE plans should be 
        reasonable and statutorily fixed by law.
  --Pharmacy networks and mail-order pharmacy programs should be 
        extended beyond the 40-mile radius of closing military bases 
        and they should operate on a flat-rate basis rather that one 
        based on percentage of costs.
  --There should be no restrictions to preclude military retirees and 
        their dependents from receiving treatment or prescriptions from 
        TRICARE providers outside 40-mile catchment areas.
  --The imposition of penalty assessments should be waived for those 
        military retirees who elected not to enroll in Part B of 
        Medicare as they believed they would receive continuing 
        military health care from DOD facilities which were 
        subsequently identified for closure.
  --Implementation of the G.I. Bill of Health: the use of Department of 
        Veterans Affairs medical centers by nonservice-connected 
        military retirees and their dependents who are CHAMPUS/TRICARE 
        or Medicare eligible should be authorized. As TRICARE and 
        Medicare providers, VA medical centers should be authorized to 
        bill the Departments of Defense and Health and Human Services 
        for medical care provided to these veterans. Unlike military 
        treatment facilities there are VA medical care facilities in 
        all the states to include Alaska and Hawaii.
  --Transferring TRICARE coverage for active duty families and families 
        of military retirees should be facilitated when they transfer 
        or move between TRICARE regions.
  --The American Legion opposes any further efforts to privatize 
        medical care delivered in military treatment facilities.
    The American Legion is supportive of a broad array of options to 
provide medical care to military retirees and their dependents, 
particularly those who are age 65 and older. As mentioned, these 
military beneficiaries should have access to military treatment 
facilities with the implementation of Medicare subvention. The major 
drawback to Medicare subvention, of course, will be access to military 
medical treatment facilities (MTF's). The drawdown of MTF's, and their 
usage by active duty personnel, their families, and TRICARE retirees 
and their dependents, will exacerbate the existent space problem that 
would be faced by dual eligible Medicare eligible military retirees and 
their dependents. These retirees and their dependents could, however, 
be treated by TRICARE civilian providers using TRICARE cost-shared 
rates or, hopefully, they will be authorized to participate in FEHBP 
plans.
    Mr. Chairman, the nation has an obligation to do better. We believe 
there is a moral obligation for the government to find a way to provide 
at least the same level of health coverage to military retirees that it 
already provides to every other federal retiree.
                     other military retiree issues
    The American Legion believes strongly that quality of life issues 
for retired military members and families also are important to 
sustaining military readiness over the long term. If the government 
allows retired members' quality of life to erode over time, or if the 
retirement promises that induced them to serve arduous military careers 
are not kept, this will undoubtedly inhibit retention in the current 
active duty force.
    Accordingly, The American Legion believes Congress and the 
administration must place high priority on ensuring that these long-
standing commitments are honored. They include maintaining regular 
military retiree pay COLA's and insuring that military retirement pay 
systems are not further diminished; deleting Social Security offsets to 
the Survivors' Benefits Plan; authorizing the concurrent receipt of 
both military retiree pay and VA disability compensation for the most 
severely disabled retirees; and conducting hearings on the Uniformed 
Services Former Spouses Protection Act.
                       quadrennial defense review
    Since the collapse of the Soviet Union in 1991, the United States 
has conducted two substantial assessments of the strategy and force 
structures of the Armed Forces necessary to meet the national defense 
requirements of our country. The assessment by the Bush Administration 
(``Base Force'' assessment) and the assessment by the Clinton 
Administration (``Bottom-Up Review'') were intended to reassess the 
force structure of the Armed Forces in light of the changing realities 
of the post-Cold War world. Both assessments served an important 
purpose in focusing attention on the need to reevaluate the military 
posture of the United States; but the pace of global change 
necessitates a new, comprehensive assessment of the current defense 
strategy for the twenty-first century.
    The American Legion, in its adopted mandates, continues to support 
the force structure proposed by the Base Force strategy, namely, the 
need for the United States to maintain 12 active Army combat divisions, 
12 Navy aircraft carrier battle groups, 15 active Air Force fighter 
wings and three Marine Corps divisions. The American Legion believes 
the ``win-win'' two-war Bottom-Up Review strategy is not realistic with 
the current force structure; especially with the diversion of division-
sized forces in Bosnia and Southwest Asia. With growing worldwide 
commitments, and with only 10 Army combat divisions and three Marine 
divisions, the U.S. has a ``win-hold'' strategy at best.
    The Quadrennial Defense Review retains the two-war strategy but 
reduces the current force structures even further. The National Defense 
Panel noted that there is insufficient connectivity between strategy 
and force structures, operational concepts and procurement decisions. 
We face an even greater array of challenges today with even further 
resources than were available four years ago. Unfortunately, we are 
``robbing Peter to pay Paul'' by further cutting manpower and bases to 
pay for modernization.
    The American Legion also believes the U.S. can no longer afford to 
become the world peace enforcer by dispatching forces on unbudgeted 
operations every time the United Nations passes a resolution to do so. 
The American Legion believes Congress, as the representatives of the 
American people, needs to become more involved in the decision-making 
process regarding the commitment of United States military forces. U.S. 
forces should be committed only when the vital national interests of 
our country are at stake and only when such deployments are supported 
by the will of the American people.
    Our past and current National Military Strategies have not matched 
increased military missions, including military operations other than 
war, with the required resources. Like the Bottom-Up Review, the QDR 
provides neither the forces, lift capabilities, nor budgets to fight 
two nearly simultaneous major theater conflicts and win. Peacekeeping, 
peace enforcement and humanitarian operations do not train our combat 
forces for war.
    The administration's proposed fiscal year 1999 defense budget 
supports an active force of 1.396 million and a reserve force of 
877,000, down 23,000 and 9,000 respectively from fiscal year 1998. 
Additionally, the Quadrennial Defense Review advocates further reducing 
active endstrengths by 36,000 and those of the reserve components by 
another 42,000. The currently authorized force structure for each 
service is well below the manpower level designed by former Chairman of 
the Joint Chiefs of Staff General Colin Powell during the Bush 
Administration. At the time, the manpower level of 1.65 million was 
considered the lowest force level the nation could maintain and still 
meet its global requirements. The rapid, deep reductions are having a 
negative impact on the All Volunteer Force which is imperative for a 
strong national defense.
    In conclusion, the true measure of whether a defense policy 
adequately protects our national security interests is not necessarily 
how much is spent on defense, but whether the armed forces will have 
the means to fight and win when conflict arises. America's national 
security well-being cannot be separated from the overall national well-
being. The American people cannot view themselves from a position of 
relative weakness in the world. If we fail to lead, our own future will 
be shaped by others.
    Mr. Chairman, this concludes The American Legion statement.
STATEMENT OF CYRUS M. JOLLIVETTE, VICE PRESIDENT FOR 
            GOVERNMENT RELATIONS, UNIVERSITY OF MIAMI
    Senator Stevens. Now we have Cyrus Jollivette, from the 
University of Miami.
    Mr. Jolivette. Good afternoon, Mr. Chairman and members of 
the subcommittee. I am privileged to be here today to represent 
my colleagues in the University of Miami.
    I submitted a written statement earlier, Mr. Chairman, that 
I ask be included in the record.
    Senator Stevens. All of the statements are included in the 
record by your appearance.
    Mr. Jolivette. Thank you, sir.
    In that statement, I mentioned several initiatives. But 
today I want to focus on one particularly involving health. 
Because I want, first of all, to state how great your interest 
is in health; it is commendable. And also to say how much my 
colleagues at the University of Miami appreciate your 
leadership in supporting various health initiatives, 
particularly in the area of cancer.
    Cancer is a scourge. It does not spare anyone, based upon 
their age, sex, ethnic background, or socioeconomic status. And 
we know that eventually basic research will lead to the 
discovery of the causes and hopefully cures for this dreaded 
disease. However, research already exists that has given us 
tools for prevention and early detection that will reduce the 
suffering from cancer until a cure can be found.
    We at the University of Miami have an approach to 
biomedical research that is applying the basic scientific 
knowledge we already obtained in the populations in clinical 
settings, which is a key component of the research at the 
University of Miami. And by applying this knowledge, we can 
reduce the morbidity and mortality and improve the quality of 
life for all.
    The resources in Miami, the University's School of 
Medicine's Sylvester Cancer Research Center and the bachelor 
treatment center and pediatric oncology project and early 
detection breast cancer program, in collaboration with Jackson 
Memorial Hospital, make this concentration of research staff, 
education and treatment one of the most unique resources in the 
Nation for confronting and fighting cancer, in our opinion.
    Ours is a unique patient database, unparalleled in the 
Nation. We utilize all of these resources, and we are in 
national clinical trials targeted towards minorities. Florida 
is a bellwether State for many things, including unfortunately 
a window to the future for disease incidence. Florida has been 
having a significant increase in some of the most common 
cancers among minority populations, including prostate and 
breast cancer. We are developing an ever-greater understanding 
of the potential and critically important areas of genetic 
differences, genetic susceptibility, genetic research, and 
genetic epidemiology in developing effective cancer prevention 
and control programs.
    These cutting-edge research technologies also allow us to 
develop successful treatment approaches for high-risk and at-
risk populations. Working with community-based research and 
intervention strategies, University of Miami scientists have 
developed a broad array of data on the attitudes of different 
minority populations toward cancer prevention, protection and 
treatment. An understanding of these populations places us in 
the unique position to apply the tools we have already 
developed to reduce cancer incidence.
    There are several elements in our cancer program set forth 
in my statement. And I want to repeat again that the patient 
treatment and research base at the University of Miami [UM] 
Medical Center provide for the Department of Defense a high-
quality clinical and basic research area, which is 
strategically located to serve the Nation's current and future 
military populations. Since SOUTHCOM has recently relocated to 
Miami, it will be relatively easy for the University of Miami 
to form a strategic alliance with this group to rapidly 
translate and apply our findings to the military.
    Working with high-risk populations and cancer survivors, 
two-thirds of whom are African Americans, Hispanic and other 
ethnically diverse populations, our Miami-based cancer 
prevention and control program can be of enormous benefit to 
the Nation's defense forces, which has critical needs and 
challenges in serving these populations, who are ever more the 
face of our military forces.
    Mr. Chairman, we know you will have a difficult year, and 
we hope that you will be able to assist us in this initiative. 
Thank you.

                           prepared statement

    Senator Stevens. Thank you very much. I noticed in your 
statement the statistics about breast cancer.
    Mr. Jolivette. Yes, the rate of increase in Dade County is 
over 50 percent. We are having some serious problems.
    Senator Stevens. We have seen examples in other areas of 
the country. It would be interesting to find out why. We will 
do our best.
    Thank you very much.
    Mr. Jolivette. Thank you very much, sir.
    [The statement follows:]
               Prepared Statement of Cyrus M. Jollivette
    Mr. Chairman and Members of the Subcommittee, I appreciate the 
opportunity to present testimony on behalf of the University of Miami. 
The University is seeking your support for four initiatives within your 
purview: the South Florida Ocean Measurements Center in coordination 
with the Navy, Florida Atlantic University, and NOVA University; 
support for the University of Southern Mississippi request for a new 
fishery-oceanography research ship for research programs in the 
Southeast U.S., Mississippi, and Texas. Additionally, we ask for your 
backing for the University's Cancer Prevention, Control and Treatment 
Initiatives, and the continuation of funding for the North-South 
Center.
                    ocean measurements test facility
    The shallow water environment is an extremely difficult one. Nearly 
all naval systems are limited in performace by the severity and 
variability of conditions near the coast. Weapons systems such as 
torpedoes and ASW sonar systems were developed and optimized for the 
deep ocean and do not perform well in shallow water. Prediction of 
near-shore environmental conditions requires knowledge of the 
interactions between offshore currents, estuaries and atmospheric 
forcing.
    The unique capability of the South Florida Ocean Measurements 
Center and the partnership between academic scientists from three 
Florida universities and the Navy provides the opportunity to meet the 
significant need for science and technology development efforts in the 
near-shore environment. The Navy test range is a unique location in 
that it is the nearest approach of the continental shelf to shore along 
the entire Atlantic seaboard. University atmospheric and oceanographic 
scientists, and ocean engineers are increasing their understanding of 
the near shore acoustic environment and pursing development of AUV 
sonar and other related technologies.
    $2.75 million in continued funding is requested for this program in 
fiscal year 1999. We are convinced that this consistently funded, long-
term partnership provides the best benefit to the scientific community 
and the Navy. By bringing together oceanographic and atmospheric 
scientists with Navy testing and cable-laying experience, this funding 
will continue to provide the Navy with science and technology 
development where the environment is observed and understood.
                     oceanographic research vessel
    The University of Miami Rosenstiel School of Marine and Atmospheric 
Science supports the proposal by the University of Southern Mississippi 
Institute of Marine Sciences for construction of a Class III 
(approximately 190-foot) research ship for the Gulf of Mexico. We agree 
that a new fisher-oceanography research ship, with the capability to 
conduct complex, interdisciplinary research in the shallow water 
regions of the Gulf Coast and Intra-America Sea, is vitually needed to 
support academic research programs.
    The ship would be operated by the existing Southeast Consortium for 
Oceanographic Research (SECOR), as part of the University-National 
Oceanographic Laboratory System (UNOLS) fleet. Membership in SECOR now 
includes three of the ship-operations institutions in the Southeast and 
Gulf, which are the University of Miami, University of Texas and Texas 
A&M. We anticipate that the University of Southern Mississippi will be 
added in the very near future.
    UNOLS is apprised of and supports the existing SECOR arrangement, 
which provides dockside facilities in Galveston, Texas, and Miami, 
Florida, and coordinates instrumentation use and marine technician 
support among SECOR members. In these times of increased competition 
for funding and increased need for affordable ship-time from non-ship-
operating institutions, we strongly believe that only through resource 
sharing can we effectively manage costly ship operations. SECOR has the 
resources and is prepared to manage a new Class III ship on behalf of 
the Coast Guard research community. Support of this project benefits 
all academic institutions in the southeastern U.S. and the Gulf of 
Mexico.
                           north-south center
    The mission of the North-South Center is to promote better 
relations and to serve as a catalyst for change among the United 
States, Canada, and the nations of Latin America and the Caribbean. The 
North-South Center conducts programs of research, public outreach, 
education, training, and cooperative study. It publishes and 
disseminates policy-relevant information on the Americas. Its programs 
and activities also foster linkages among academic and research 
institutions, NGO's, governmental institutions both civilian and 
military, and philanthropic and private sectors throughout the 
Americas.
The North-South Center and Hemispheric Security Issues
    The Center has been deeply engaged in promoting and sponsoring 
research and dialogue on inter-American security issues, especially 
since the onset of federal funding support in 1991. Among other issues, 
the Center has conducted an extensive research program on drug 
trafficking in the Hemisphere. It has studied and promoted dialogue on 
the crises in Cuba, Panama, and Haiti. It has engaged in research in 
civil-military relations, conflict resolution, and security 
cooperation. Among other issues, it has followed closely the Peru-
Ecuador border conflict, in which the United States has acted as one of 
the primary ``guarantor'' powers. The Center hosted, in December 1996, 
an international conference attended by 58 scholars and government 
officials from eight countries in the Americas to assess the impact of 
that conflict on inter-American relations.
    The relocation of the U.S. Southern Command to Miami in late 1997 
has afforded an enhanced role for the Center in security issues. The 
Center figured prominently in discussions on the future of civil-
military relations in the Hemisphere at a recent conference with key 
Latin American military officials sponsored by the U.S. Southern 
Command and the U.S. Army War College. In December 1997, the Center 
founded the ``Miami Security Roundtable'' with the cooperation of the 
University of Miami School of International Studies, the Latin American 
and Caribbean Center of Florida International University, and the U.S. 
Southern Command headquarters in Miami. Three meetings of the 
Roundtable held thus far have brought together, in an informal setting, 
thirty or more academic experts and staff members of the U.S. Southern 
Command to discuss the latest security issues in the Americas, 
including drug trafficking and transnational crime. The Center's Issues 
report on inter-American security cooperation has been well-received in 
academic and professional circles. We are currently preparing a 
monograph in the Center's Agenda paper series entitled ``Building New 
Security Relationships in the Americas: The Critical Next Steps'' for 
release in mid-May 1998 and a new Issues report on environmental 
security in the Americas, to be published in June 1998.
    To sum up, the Center is committed to advancing the state of 
security cooperation in the Americas. It serves as a bridge between 
government officials dedicated to enhancing regional security and 
academic and other civil society experts who have devoted their 
professional lives to analyzing the Hemisphere's critical security 
issues. We believe that Hemispheric cooperation on security issues can 
multiply the impact of United States policy initiatives generally and 
overcome historically profound cultural and political gaps between 
North and South.
   high priority cancer prevention, control and treatment initiative
    Cancer is the number two cause of death in America. It does not 
spare anyone based on their age, sex, ethnic background or socio-
economic status. We know that basic research will eventually lead to 
the causes and hopefully cures for this dreaded disease. However, 
research has already given us tools for prevention and early detection 
that will reduce the suffering from cancer until cures can be found. 
The programs that we have listed as part of our initiative will apply 
these tools in a variety of settings for prevention, control, and 
treatment, especially in multi-ethnic, diverse, minority populations. 
This translational approach to biomedical research, that is, applying 
the basic scientific knowledge we have already gained to populations in 
clinical settings, is a key component of the research at the University 
of Miami. By applying this knowledge, we can reduce the morbidity, 
mortality, and improve the quality of life for all our citizens.
Model Cancer Prevention and Control Programs
            Introduction
    The University of Miami School of Medicine and Sylvester 
Comprehensive Cancer Center provide the nation with a truly unique and 
unparalleled resource for focused basic, applied and clinical cancer 
research and treatment of multi-ethnic, diverse, minority cancer 
patients. The medical center has had a major and continuing role 
nationally in all of these areas. Additionally, because of our 
location, we play a critically important role in national clinical 
trials targeted toward minorities.
    Florida is often called the ``bellweather state'' or ``window to 
the future'' for disease incidence. The state has been having a 
significant increase in some of the most common cancers among the 
minority populations including prostate and breast cancer. We are 
developing an ever-greater understanding of the potential and 
critically important areas of genetic differences, genetic 
susceptibility, genetic research and genetic epidemiology in developing 
effective cancer prevention and control programs. These cutting-edge 
research technologies also allow us to develop successful treatments 
for approaches to high-risk and at-risk populations.
    Working with community-based research and intervention strategies, 
University of Miami scientists have developed a broad array of data on 
the attitudes of different minority populations toward cancer 
prevention, detection and treatment. An understanding of these 
populations places us in a unique position to apply the tools we have 
already developed to reduce cancer incidence. While the Sylvester 
Comprehensive Cancer Center has studies in many areas, there are major 
programs on early detection, treatment and prevention of prostate and 
breast cancer. These diseases are highly unpredictable, but tend to 
occur at younger ages and to be more aggressive in minority 
populations. The cancer activities included with this initiative will 
greatly assist the Department of Defense in accomplishing their 
mission.
    The University of Miami/Sylvester Comprehensive Cancer Center 
Prevention and Control Program includes six key elements: (1) Early 
Detection, (2) Primary and Secondary Prevention Research, (3) Special 
Populations, (4) Genetic Epidemiology and Research, (5) Molecular 
Epidemiology, and (6) the Courtelis Center for Research and Treatment 
in Psycholosocial Oncology.
    Each of these elements can contribute effectively to the needs of 
our nation's military population. The patient treatment and research 
base at the University of Miami Medical Center offers the Department of 
Defense high quality clinical and basic research which is strategically 
located to serve the nation's current and future military populations. 
Since SOUTHCOM has recently relocated to Miami, it will be relatively 
easy for the University of Miami/Sylvester Comprehensive Cancer Center 
to form a strategic alliance with this group to rapidly translate and 
apply our findings to the military.
    Working with high risk populations and cancer survivors, two-thirds 
of whom are African-American, Hispanic, and other ethnically diverse 
populations, this Miami-based program in cancer prevention and control 
can be of enormous benefit to the nation's defense forces--which has 
critical needs and challenges in serving these populations. They are 
evermore the ``face'' of our military forces. They need the potential 
of this expanded and targeted clinical research and treatment, and 
cancer prevention and control, techniques in order to carry out their 
mission as guardians of our liberties.
The Courtelis Center for Research and Treatment
    A major component of the Miami-based initiative is the Courtelis 
Center for Research and Treatment in Psychosocial Oncology. This unique 
facility is dedicated to providing cancer patients, including and 
especially ethnically diverse and minority populations, with 
coordinated programs and services critical to effective cancer 
treatment and outcomes. The research carried out at the Courtelis 
Center, including psychological and social research, treatment, support 
services, and counseling, are recognized as being critically important 
in effective cancer treatment, as well as for cancer control and 
prevention. The Center is also engaged in cutting-edge studies on the 
role of stress in the development, prevention, and treatment of cancer. 
They have focused on the functioning of the immune system affected by 
chronic stress and other psycho-social factors on depression of the 
immune system, and ultimately their impact on cancer incidence, 
prevention, and control. These studies are recognized nationally.
    These applied clinical research and treatment initiatives should be 
of enormous potential and service to our nation's military as it 
strives to more effectively support and maintain its ethnically diverse 
population.
            Federal Funding Objectives/Requests
    Accordingly, we see the following federal participation in this 
coordinated, comprehensive cancer prevention and control initiative.
  --$5 million to more fully develop the cancer prevention and control 
        initiatives especially focusing on the needs of ethnically 
        diverse, minority populations given the increased incidence of 
        cancer, including prostate and breast cancer, among minorities;
  --to expand the applied cancer research, clinical research, 
        treatment, prevention and control strategies in six critical 
        areas: (1) Early detection; (2) Primary and Secondary 
        Prevention Research; (3) Special Populations; (4) Genetic 
        Epidemiology and Research; (5) Molecular Epidemiology; and 
        finally (6) to expand the resources and capabilities of the 
        Courtelis Center for Research and Treatment.
  --to coordinate our efforts with SOUTHCOM to improve the efficiency 
        and effectiveness of our military forces.
    pediatric oncology and the batchelor children's research center
Introduction
    The Department of Pediatrics at the University of Miami School of 
Medicine and its Batchelor Children's Research Center comprise one of 
the largest academic pediatric departments in the United States, with a 
total faculty and staff of over 700. It ranks nationally among the top 
departments of pediatrics as rated by NIH peer-reviewed, competitively 
designated funding awards. In response to the rapidly growing needs in 
pediatrics, the serious shortage of quality space, and the critical 
necessity to consolidate and coordinate the vast research resources and 
facilitate effective collaboration, the University of Miami School of 
Medicine and the Department of Pediatrics are now developing one of the 
major children's research facilities in the United States--a $27 
million, 100,000 square foot complex for which private funding has 
already been secured.
    A major component of this initiative will be pediatric oncology--
for which at least one full floor will be dedicated. This will ensure 
that there is an unparalleled, consolidated, coordinated, 
interdisciplinary research effort on pediatric oncology which will 
focus on unique and critically needed research, treatments, and 
populations.
    Indeed, among the major objectives will be the focus on what is a 
uniquely diverse multi-ethnic clinical and research patient population 
in South Florida. The Miami Batchelor Center has perhaps the largest 
and most ethnically diverse minority population in the nation--a 
population which more closely mirrors that of America's military 
population than anywhere else in the country. We work with a pediatric 
population that participates in large major national treatment 
protocols providing a critically needed, concentrated and effectively 
organized multi-ethnic, minority component not found elsewhere. The 
Batchelor Children's Research Center treats a significant percentage of 
newly-diagnosed pediatric cancer cases in the nation annually, with the 
majority coming from under-served, minority populations.
    As such, the Batchelor Children's Research Center can offer the 
Department of Defense and our nation's military an extraordinarily 
promising program of basic, applied and clinical research, training, 
and treatment, that will be especially critical and well focused for 
its current and future needs.
Specific Objectives and Activities
            Clinical Capacity in Bone Marrow Transplantation and 
                    Potential for Application in Young Adult 
                    Populations
    The Miami-based project is one of the leading sites in the country 
for pediatric bone marrow transplantation including such innovative 
techniques as Cord Blood Transplantation. This project works closely 
with one of the nation's public hospitals, Jackson Memorial Medical 
Center, which has more than 7,000 births per year of largely minority 
and ethnically diverse children. The Miami team has the best potential 
nationally to provide a Transplantation Cord Blood Bank that can more 
effectively treat cancer in minority populations. The rich supply of 
stem cells in this dedicated blood supply will provide the opportunity 
of collaborating with other institutions and matching successfully 
recipients for bone marrow transplantation. There is an absolutely 
critical need for such an effective blood supply for successful 
treatment in minority, culturally diverse populations. This precious 
resource must not only be enlarged, but more effectively stored, 
genetically tested and typed, frozen, and preserved for future 
treatment needs of these ethnically diverse populations. Only a few 
institutions nationally have the potential supply and access for such 
diverse populations as the Miami team. The Batchelor Children's 
Research Center, the Department of Pediatrics, and Jackson Memorial 
Medical Center need additional resources to develop the full potential 
of this clinical research. There is, indeed, future potential for older 
teenagers and young adults, but much more work needs to be done to more 
fully examine these applications. This unique blood transplantation 
resource and research focus could be especially important to the 
children of our nation's military, also a largely ethnically diverse 
population, and ultimately, it is hoped, to the treatment of cancer of 
young adults in the military.
                   federal funding objective/requests
    We seek support for the following elements of this far-reaching 
initiative:
  --Fully-matched federal participation in an expanded basic and 
        clinical research effort that focuses on the potential 
        application of these cutting-edge blood transplantation 
        treatment technologies in minority, ethnically diverse 
        populations, and to ultimately more fully explore application 
        to older children and young adults--$2 million.
  --Fully-matched federal participation in the development of the 
        critically needed laboratory and blood storage facilities needs 
        of the Batchelor Children's Center--$2 million.
                 breast cancer early detection program
Introduction
    Of the 600,000 new cancer cases in females estimated to occur in 
1998, 178,700 or 30 percent will be breast cancer. One out of nine 
women is at risk of developing this disease and breast cancer remains a 
leading cause of death in women. The incidence in minority women is 
increasing at an alarming rate, while that in white women continues to 
decline. This trend has occurred nationally, but is particularly 
relevant to South Florida with its large numbers of minority 
populations.
Background
    Breast cancer is a problem of major public health importance in 
Miami-Dade County where one out of every 8.5 cases of breast cancer in 
Florida is diagnosed. Another alarming trend is that late-stage 
disease, in which there are very few good treatments available, is 
rising at an alarming rate. It increased 32 percent in Miami-Dade 
County while decreasing 21 percent in the rest of the state. In 1995, 
33 percent of breast cancers in Miami-Dade County white women were 
diagnosed after the disease had spread to the regional lymph nodes or 
distant sites, compared to 52 percent among black women. The Early 
Breast Cancer Detection Program (EDP) is one of the finest 
demonstrations of an effective partnership between a public and private 
entity. The University of Miami School of Medicine and the Jackson 
Memorial Medical Center have formed an impressive team which has an 
extremely high profile in the community in providing services to the 
primary health care centers, and its partnership with other 
organizations. It sets the University of Miami and Jackson Memorial 
Medical Center apart from other hospitals and medical centers, and it 
is one of the reasons that these entities received the American 
Association of Medical College's Community Service Award. Since the EDP 
was instituted in 1987, it has resulted in a significant shift in the 
stage of breast cancer upon first presentation as we will describe 
later.
    However, the ability of the current EDP to meet the needs of Miami-
Dade County is deteriorating quickly due to the lack of funds. 
Furthermore, although the EDP has two operational mammography vans, 
funds are only available to operate one of them. The waiting time for 
women seen by the EDP at some primary health care centers has increased 
to six months. There are more than 150,000 medically under-served women 
over age 40 in Miami-Dade County who are potentially in need of the UM/
JMMC early detection program services.
    Breast cancer screening has been proven to identify early, smaller 
lesions which are more treatable and at lower cost and result in a 
higher quality of life. Medically under-severed minority women who are 
not screened for breast cancer are at extremely high risk concerning 
the rapid progression of this disease.
Breast Cancer in Miami-Dade County
    A recent analysis of breast cancer data from the Florida Department 
of Health shows that while the percentage of late-stage breast cancer 
(at time of diagnosis) has fallen between 1981 and 1995, in Miami-Dade 
County, the percent decrease is smallest for Miami-Dade County non-
whites. For U.S.-born, non-white women, the ``gap'' between the 
percentage of late-stage diagnosis in Miami-Dade County and elsewhere 
in Florida widened, but narrowed for non-U.S. born women of all races 
and for U.S.-born white women. Late stage disease among non-whites 
comprises an increasing percentage of breast cancer--increasing by 32 
percent, while decreasing by 21 percent in the rest of the state. The 
most frightening statistic is that 33 percent of breast cancers in 
Miami-Dade County white women were diagnosed as late stage compared to 
52 percent among black women.
Screening in the Early Detection Program
    Since 1987, there have been 27,197 women seen through the EDP, and 
39,733 mammograms have been performed. However, because of declining 
financial support for this program, services have had to be 
dramatically reduced. For example, in 1996 4,845 women were screened, 
but this number fell by 28 percent in 1997. The number of monthly 
visits in the EDP has fallen from a high of 509 to a low of 156. This 
is particularly distressing since it is well known that detection of 
breast cancer in its early stages provides more treatment options and 
potentially curative procedures.
    While there has been both a local and national increase in the 
utilization of mammography as a tool in the diagnosis of breast cancer, 
we have noted that even in the past year, many of the women who are 
screened through the EDP have never been previously screened. This is 
especially true for minority women.
Stage of Breast Cancer Diagnosis
    EDP data illustrate a shift from later to earlier stage cancers 
from 1987 to 1997. The percentage of minimal cancers (less than 1 cm. 
including Stage 0) detected was 45 percent between 1987-1992 and 
increased to 67 percent in 1993-1997. In contrast, the percentage of 
late stage disease cancers (Stage III and Stage IV) decreased from 15 
percent in the first time period to 7 percent in the final time period.
Survival
    Because of the strong association between stage and survival, the 
dramatic shift to earlier stage diagnoses, with the appropriate follow 
up treatment, should result in an increased survival of EDP patients. 
Compared to the Jackson Memorial Hospital staff patients and to 
patients enrolled at the inception of the EDP program in 1987-1998, 
five year survival of EDP patients showed increases from less than 50 
percent to 75 percent.
The Early Breast Cancer Detection Program: A Community Partnership
    The strength of the early detection program has always been the 
partnerships with the community. Beginning with the initial commitment 
of the Harcourt M. and Virginia W. Sylvester Foundation, the University 
of Miami/Jackson Memorial Medical Center, the Sylvester Comprehensive 
Cancer Center, the primary health care consortium, the American Cancer 
Society, and two retired, dedicated South Florida physicians, the EDP 
has been able to obtain significant financial support. Unfortunately, a 
significant proportion of EDP support is decreasing or has already been 
terminated.
Population At Risk/In Need
    In 1996, there were an estimated 47,500 women in Miami-Dade County 
receiving Medicaid assistance, between the ages of 40 and 64. There 
were an additional 114,00 women in Miami-Dade County receiving Social 
Security or retirement income. Therefore, there are a total of 161,500 
women who could be considered to be in need of EDP. This large figure 
is likely to be an underestimate, since there are at least three other 
groups of women who are not considered in these calculations; the 
``working poor,'' (i.e., women not receiving state or federal 
assistance), women 62-65 who receive Medicare, and non-residents of 
Miami-Dade County.
Cost of Screening/Cost Effectiveness
    Several studies have shown the cost effectiveness of early 
detection/screening programs for breast cancer. Although studies differ 
on the actual cost to treat breast cancer (e.g., due to different 
locales, choices for treatment, facilities), all analyses have found 
that costs increase with later (delayed) stage at diagnosis, with 
approximately a three- to five-fold higher cost for Stage IV disease 
compared to Stage 0 disease. For example, several studies have 
estimated costs for Stage 0 disease as averaging $20,300 and increasing 
to $58,900 for State IV disease.
Implications for Practice
    There is convincing scientific evidence that mammography and other 
screening examinations can be an effective means of secondary 
prevention: nevertheless, a review of the literature leads to an 
unequivocal conclusion that there are major differences between the 
numbers of women considered to be at risk (or in need of such screening 
services) and the numbers who receive them. The at risk/screened 
discrepancy is particularly pronounced among minority women, who are 
more likely to be economically disadvantaged and who also have higher 
mortality rates from breast cancer. The effective implementation of 
early stage strategies is extremely important in reaching the goal of 
reduced mortality from cancer in ``under-served, under-utilizing'' 
populations. Increasing use of breast cancer screening in primary care 
settings and providing health delivery linkages to ensure follow up 
procedures are widely recommended in order to provide opportunities for 
those who might not otherwise be included in mass screening programs.
    The experience of the EDP suggests that it is both feasible and 
effective to reach socio-economically disadvantaged minority women, 
with low or no cost cancer screening services. This is clearly 
demonstrated by the number of women utilizing screening who have had no 
previous mammogram and by the increase of minimal cancers and the 
decrease in late stage cancers detected. Additionally, the data are 
among the first to provide information on screening of medically under-
served minority women of differing age groups, particularly those 40-49 
years of age.
    The success of the EDP has been influenced by several factors, 
including preliminary needs assessment and initial planning, the 
development of a community based coalition, recruitment of medically 
under-served minority women through outreach strategies, ensuring 
continuity of care as well as focus on community education.
    Mammography provides an example of a proven technology for reducing 
late stage and increasing early stage breast cancer detection, and the 
University of Miami/Jackson Memorial Medical Center is effectively 
delivering this technology especially among the medically under-served.
                           budgetary request
    We are requesting $1.5 million per year for the next five years to 
support the breast cancer early detection program. With these funds we 
could increase the number of women screened from an average of 15 per 
day to 50 per day which would result in screening 12,500 per year.
STATEMENT OF JOHN C. EKARIUS, ACTING DIRECTOR OF 
            GOVERNMENT RELATIONS, UNIVERSITY OF 
            MEDICINE AND DENTISTRY OF NEW JERSEY
ACCOMPANIED BY BETTY GALLO, DEAN & GALLO, THE CANCER INSTITUTE OF NEW 
            JERSEY

    Senator Stevens. John Ekarius, Vice President, University 
of Medicine and Dentistry of New Jersey, please. And you are 
accompanied by Mrs. Dean Gallo.
    Mr. Ekarius. Thank you, Mr. Chairman. Mrs. Gallo and I 
appreciate the opportunity to come before you and the committee 
this afternoon to talk about the important work that is going 
on in not only the field of cancer but in the field of 
infectious diseases, as well, and to support and laud your 
leadership in the work of providing DOD research efforts, 
particularly in biomedical research and in the areas of applied 
and basic research for DOD.
    Prior to asking Mrs. Gallo, whom you know, Mr. Chairman, 
from your efforts in the field of prostate cancer awareness, I 
would like to touch on, just a moment, on infectious diseases 
and the potential they now pose for a profound threat to 
national and international security. Changing national 
conditions, post-Cold War deployment of U.S. troops in new 
geographic areas, and an increasingly global economy have 
contributed to a resurgence of infectious microbes. The rapid 
and repeated exposure to diseases arising in any part of the 
world is now a reality for military men and women, as well as 
our citizens at home.
    By the year 2000, nearly 600 million people will be 
travelling internationally, including military personnel. And 
to combat the rise of infectious diseases, the University of 
Medicine and Dentistry, which is the largest public health 
sciences university in the Nation, with campuses in Camden, New 
Brunswick and Newark, is working on a collaborative effort in 
Newark, with the International Center for Public Health at 
University Heights Science Park.
    Our key tenant there, the Public Health Research Institute, 
is already working with the U.S. Army, in collaboration, on 
infectious disease research, AIDS vaccine research, and 
providing diagnostic tools for identifying battlefield 
pathogens in the field. This strategic initiative, we believe, 
is of critical importance. It has been recognized by Senator 
Lautenberg and members of the committee last year. And we would 
ask your support for this effort.

                           prepared statement

    Additionally, the Dean and Betty Gallo Prostate Cancer 
Institute is located and proposed at the Cancer Institute of 
New Jersey, located in New Brunswick, an emerging biomedical 
research city. This Institute is New Jersey's only National 
Cancer Institute [NCI]-designated center. And I would ask, Mr. 
Chairman, for your forbearance to introduce Mrs. Gallo.
    [The statement follows:]
                 Prepared Statement of John C. Ekarius
    Mr. Chairman, I respectfully present testimony of the University of 
Medicine and Dentistry of New Jersey (UMDNJ), the largest public health 
sciences university in the nation. The UMDNJ statewide system is 
located on five academic campuses and consists of 3 medical schools and 
schools of dentistry, nursing, health related professions and 
biomedical sciences. It also comprises a University-owned acute care 
hospital, three core teaching hospitals, an integrated behavioral 
health care delivery system and affiliations with more than 100 health 
care and educational institutions statewide. No other institution in 
the nation possesses resources which match our scope in higher 
education, health care delivery, research and community service 
initiatives with state, federal and local entities.
    I appreciate this opportunity to bring to your attention two of the 
University's priority projects. The first is an initiative to create an 
International Center for Public Health that is consistent with the 
mission of the Department of Defense and its biomedical research 
agenda.
    The second is an initiative to establish a Dean and Betty Gallo 
Prostate Cancer Institute within New Jersey's only NCI-designated 
clinical cancer center, the Cancer Institute of New Jersey (CINJ).
An International Center for Public Health at University Heights Science 
        Park
    Infectious disease poses a profound threat to national and 
international security forces. The deployment of U.S. troops to new 
geographic areas and an increasingly global economy have contributed to 
a resurgence of infectious microbes. The rapid and repeated exposure to 
diseases arising in any part of the world is a reality for our military 
personnel as well as the average U.S. citizen. By the year 2000, it is 
estimated that some 400 to 600 million people will engage in 
international travel. Because New Jersey is surrounded by eight 
international air and seaports, it is especially vulnerable to the 
spread of global infectious microbes. We have therefore proposed to 
create an International Center for Public Health as a direct response 
to this looming public health crisis.
    The Center is a strategic initiative to create a world-class 
infectious disease research and treatment complex to be located at 
University Heights Science Park, a Federal Enterprise Community 
neighborhood in Newark, New Jersey.
    University Heights Science Park (UHSP) is a collaborative venture 
of the four institutions of higher education located in Newark--UMDNJ, 
Rutgers University, New Jersey Institute of Technology (NJIT), and 
Essex County College, which trains technicians in eleven science and 
technology fields. Its partners include the City of Newark, Public 
Service Electric & Gas (PSE&G), The Prudential Insurance Company, First 
Union National Bank and Bell Atlantic of New Jersey.
    The International Center at Science Park will house three core 
tenants--the Public Health Research Institute (PHRI), the New Jersey 
Medical School National Tuberculosis Center at UMDNJ and the UMDNJ-New 
Jersey Medical School Department of Microbiology and Molecular 
Genetics.
    The Public Health Research Institute is a nationally prestigious, 
56-year-old biomedical research institute that employs 110 scientists 
and staff conducting research programs in infectious diseases, 
(including tuberculosis and AIDS), drug discovery, diagnostic 
development and the molecular pathogenicity of a broad range of 
infectious diseases. A major focus of PHRI is the development of the 
next generation of antibiotics to fight life-threatening, drug-
resistant organisms. PHRI will relocate from Manhattan to Science Park, 
Newark.
    The University's National TB Center is one of three Model TB 
Prevention and Control Centers in the nation funded by the Centers for 
Disease Prevention Control (CDC). The TB Center will add an important 
clinical component to the International Center for Public Health, since 
many TB patients also manifest other infectious diseases.
    The University of Medicine and Dentistry of New Jersey (UMDNJ) will 
be the primary medical center linkage and academic affiliation for the 
International Center for Public Health (ICPH). Relocating our Medical 
School's Department of Microbiology and Molecular Genetics will add a 
staff of 100 to the Center's critical mass of microbiology research.
    Since we appeared before this panel last year, a major change in 
our project has occurred. In October, 1997, a Memorandum of 
Understanding (MOU) was executed between the State of New Jersey and 
the International Center. The MOU commits $60 million of State loan and 
grant funds toward development of the $78 million International Center 
for Public Health. This commitment is now being used to leverage the 
remaining $18 million from Federal and private sources.
    The International Center for Public Health will contribute to DOD's 
objectives through the research of PHRI and the National TB Center, and 
by participating in cooperative programs with foreign governments in 
the development of policies and initiatives to stem the spread of 
infectious diseases throughout the world.
    We, therefore, respectfully request $9 million from this Committee 
to support the construction of an International Center for Public 
Health at University Heights Science Park, Newark, New Jersey.
Dean and Betty Gallo Prostate Cancer Institute
    New Jersey has the tenth highest mortality rate of prostate cancer 
in the country and ranks eighth in mortality among African Americans 
with this disease. Currently there is no available curable treatment 
for prostate cancer once it recurs.
    Because of the devastating problem of prostate cancer in New Jersey 
and the nation, the Cancer Institute of New Jersey (CINJ), the only 
NCI-designated clinical cancer center in the state, has determined that 
one of its major goals is to seek a cure for this disease. To 
accomplish this goal, the CINJ has initiated the development of the 
Gallo Prostate Cancer Institute, named after the late U.S. Congressman 
from New Jersey, Dean Gallo, who died of the disease in 1994.
    CINJ is affiliated with the University of Medicine and Dentistry of 
New Jersey (UMDNJ) and is located at our medical school campus in New 
Brunswick, New Jersey. CINJ is part of a statewide network of teaching 
hospitals providing access to the highest standard of cancer care to 
all New Jersey residents. We see abut 6,000 prostate cancer patients 
annually and this number is increasing by about eight percent each 
month.
    The Cancer Institute of New Jersey (CINJ) is the center of 
excellence for cancer treatment in New Jersey. Our team of staff 
physicians, scientists and basic science researchers recognize that 
there is no cure for prostate cancer when it metasticzes. We are 
concentrating our efforts on developing new ways to treat this 
devastating disease. Patients are enrolled in five different clinical 
trials for advanced prostate cancer. CINJ is establishing an integrated 
working group of nationally recognized experts whose work can be 
applied to prostate cancer. Through a series of focus groups, CINJ is 
bringing together the basic scientists and physician/researchers to 
educate each other to work in collaboration in order to develop new 
treatments for prostate cancer.
    The Gallo Prostate Cancer Institute will be incorporated into the 
Cancer Institute of New Jersey's statewide network of affiliated 
hospitals and providers to facilitate treatment and research so that 
patients with advanced prostate cancer may be enrolled in clinical 
trials at several locations throughout the state. This will allow for 
treatment of more patients with novel therapies and it increases our 
ability to rapidly evaluate these therapies. We are also working with 
local clinics and agencies on treatment plans for uninsured prostate 
cancer patients.
    The Cancer Institute of New Jersey has recruited investigators from 
our sister research institutes in New Jersey to study prostate cancer. 
These researchers are isolating genes involved in the development of 
prostate cancer and are initiating epidemiological studies to determine 
the efficacy of screening in African-Americans. They are also studying 
whether compounds used to prevent other tumors are effective against 
prostate cancer. Clinical trials based on laboratory experiments are 
being studied to see how cancer cells develop resistance and ways to 
make the cells sensitive to therapy.
    With the establishment of the Gallo Prostate Cancer Institute, 
collaborative research such as the projects just described will be 
expanded. Such an institute is necessary to effectively recruit 
additional nationally-recognized scientists focused on research and 
treatment of prostate cancer.
    To accomplish our goals, we have developed a five-year budget plan 
for the Gallo Prostate Cancer Institute for a total of $9.4 million. We 
expect to raise substantial funds through private, corporate and other 
resources. We respectfully seek $5 million in federal funds to 
facilitate the establishment of this important resource.
    We thank the Members of this Subcommittee for their leadership in 
supporting nationally and internationally critically-needed research 
and development initiatives. The Subcommittee is to be commended for 
its support of university research throughout the country. Your 
particular role in the support of biomedical research is especially 
recognized.
    Thank you for the opportunity to appear before you on behalf of 
UMDNJ and two of its priority projects--the creation of an 
International Center for Public Health and the establishment of the 
Dean and Betty Gallo Prostate Cancer Institute.

                           prepared statement

    Senator Stevens. Mrs. Gallo, nice to see you.
    Mrs. Gallo. It is good to see you, too, Mr. Chairman. I 
just want to say that the last time I saw you was back in 
September, when we did that short segment with Peter Jennings. 
And, basically, as you know, my husband was Congressman Dean 
Gallo, who died of prostate cancer back in 1994. And I am 
really excited about this initiative within the Cancer 
Institute, which is our only NCI-designated center in the State 
of New Jersey, to be able to create the Dean and Betty Gallo 
Prostate Cancer Institute.
    And I just want to thank you for your leadership for 
cancer, and also hopefully that, with this, you will take in 
consideration prostate cancer, considering that the funding for 
it is kind of low, and we need to kind of boost it a little 
bit. So I am hoping that we can bring some more good 
researchers into New Jersey.
    Thank you.
    [The statement follows:]

                   Prepared Statement of Betty Gallo

    I want to thank Chairman Stevens and the committee for 
allowing me to testify before you.
    I am here to speak to you about prostate cancer that took 
my husband Congressman Dean Gallo from the 11th District of New 
Jersey from me, his family, friends, his colleagues and his 
constituents. Dean had the greatest respect for his colleagues 
in the Senate, some who served with him in the House of 
Representatives.
    I am sure most of you are not aware that when Dean was 
diagnosed in February of 1992 the prostate cancer had already 
metastasize to his bone. The Prostate Specific Antigen blood 
test which in short is the PSA, has a normal range is 1-4. 
Dean's PSA when diagnosed was 883. His prognosis at the time 
was 3-6 months. When he saw the urologist in New Jersey he said 
the only thing he could do for Dean was remove his testicles. 
When Dean told me this I said I think we need to get a second 
opinion. Fortunately Dean's staff had referred one of his 
constituents that had prostate cancer to the National 
Institutes of Health. Dean went there for a consultation and 
was accepted for a clinical trial of Suramin and combined 
hormonal therapy.
    We were told by Dean's doctor at NIH, Dr. Charles Myers, 
that the removal of the testicles would not have been enough. 
Dean needed a more aggressive form of treatment. This was a 
very tough adjustment period. Dean had a PSA level drawn once a 
week in the beginning. Dean was in Washington while I was back 
in New Jersey waiting for the results. Your whole life revolved 
around the PSA count: would it go down, would it go up. Trying 
to keep positive was sometimes very tough, but Dean and I had a 
very strong love and faith that helped us through the rough 
times. With all of the combined treatment, love and emotional 
support, Dean survived 2\1/2\ years with a good quality of 
life. It was the best 2\1/2\ years of our 8 year relationship.
    I am now working at The Cancer Institute of New Jersey as a 
Fundraising Associate/Advocate. My main goal at The Cancer 
Institute is the creation of the Dean and Betty Gallo Prostate 
Cancer Institute. The Cancer Institute is naming the Institute 
after Dean because he was a tireless supporter of the people of 
New Jersey and the Congress of the United States. He believed 
in making the nation stronger by building and constant 
improvement and was instrumental in creating CINJ. Because of 
Dean being diagnosed in the advanced stages of prostate cancer, 
their efforts to cure prostate cancer are motivated by their 
memory of his excellent service. The Cancer Institute is NCI-
designated and the only one in the State of New Jersey. The 
Institute has only been opened about 2 years and has already 
outgrown its facilities. We are currently seeing about 6,000 
prostate patients a year and the number is increasing about 8 
percent a month. There is no available curable treatment for 
prostate cancer once it recurs, and when it does, it is fatal.
    Prostate Cancer patients who are diagnosed early in the 
progression of their disease have different treatment options 
then those who are diagnosed with metastasize disease such as 
Dean was. At many cancer centers, these patients are seen at 
different places and even at different hospitals. At The Cancer 
Institute of New Jersey, we have developed an integrated 
approach, where all prostate cancer patients are seen in the 
same clinical setting, and where all physicians who are experts 
in prostate cancer review the cases together. Thus, each 
patient is followed regardless of the stage of their disease by 
various specialists, and each patient has the benefit of 
medical and surgical expertise continuously reviewing their 
progress.
    The central location of CINJ and its network of affiliated 
hospitals make CINJ care accessible to virtually all New Jersey 
residents. In addition to treatment, CINJ offers patient 
support groups to assist patients and their families cope with 
this dreaded disease. Since there is no cure for metastic 
prostate cancer the physicians, researchers and directors of 
CINJ are concentrating their efforts on developing ways to 
treat this devastating disease.
    A requirement for the designation of Clinical Cancer Center 
by the NCI is that the center establish a strong research 
component that integrates the best available medical treatment 
of cancer with nationally recognized basic researchers to find 
new cures. The CINJ is the only center in New Jersey that has 
fulfilled this requirement. The CINJ is physically located on 
the New Brunswick campus of Robert Wood Johnson Medical School. 
The medical school's nearby Piscataway campus is adjacent to 
Rutgers University, another globally recognized center of 
research. Two nationally acclaimed research centers are 
administrated jointly by RWJMS and Rutgers University. The 
Center for Advanced Biotechnology and Medicine (CABM) has 
leaders in molecular biology, including several Howard Hughes 
investigators. The Environmental and Occupation Health Safety 
Institute (EOHSI) includes a National Institute of 
Environmental Health Sciences center of excellence for the 
study of environmental toxicology.
    The study of environmental toxicology could be an important 
factor in the area of prostate cancer. I am not an expert in 
this field, but I have spoken to people who have seen cancer 
concentrated in certain areas. Prostate cancer in New Jersey 
has the highest incident rate for men. 6,900 men will be 
diagnosed this year with prostate cancer of which 1,400 will 
die from this disease. Out of 50 states, number 1 being the 
worse we are 10th in prostate cancer among the white population 
and 8th among African Americans. We are not sure if it is due 
to the way we disinfect our vegetables, feed our cows, pigs and 
chickens, process our food for shelve life, the source of our 
water, or the possible pollutes not only underground, but also 
in the air. We have become a technological society. The 
possibility that the problem with the environment has built 
over the years and is now surfacing at such an incredible rate, 
could be a primary cause of prostate cancer.
    CINJ has successfully recruited investigators from the CABM 
and EOHS specifically to study prostate cancer. CINJ has 
initiated clinical trials for prostate cancer based on 
laboratory experiments. These experiments address how cancer 
cells develop resistance and ways to make the cells sensitive 
to therapy.
    With the establishment of the Gallo Prostate Institute, 
collaborative research like the projects just described will be 
tremendously expanded. The Gallo Prostate Institute will allow 
us to focus the strengths of the CINJ on the devastating 
problem of prostate cancer in New Jersey, its surrounding 
region, and in the nation as a whole through treatment and 
research. Such an Institute is imperative to provide the 
resources to effectively recruit additional nationally 
recognized leaders in research into the study of prostate 
cancer. In order to bring together scientists of this caliber, 
all focused on prostate cancer, it is imperative to have a 
strong focused center.
    Since there is currently no effective curable treatment for 
prostate cancer once it progresses beyond the prostate, a 
concerted effort must be made to develop new treatments. This 
effort requires two approaches. The first is a comprehensive 
study of the biological characteristics of the disease at the 
basic science level. The Cancer Institute of New Jersey is 
committed to entering the national efforts on this front. We 
have obtained the technology, for example, to examine the 
expression patterns of over 10,000 genes from a single tumor 
sample, using multigene arrays. This will greatly facilitate 
collaborations between the basic scientists at the various New 
Jersey academic institutions with the clinical scientists at 
CINJ.
    The CINJ is uniquely suited to scientifically examine the 
difference in mortality between African Americans and white 
Americans with the disease, which is a major question in 
prostate cancer. New Jersey has a large population of African 
Americans at all levels of income. We can thus investigate how 
much of the disparity between the mortality of both groups is 
due to genetic predisposition versus economic status. The 
scientists at CINJ are more than capable of answering this 
question, particularly with the additional infrastructure 
support which will be available once the resources for the 
Gallo Prostate Institute are acquired.
    The proposed budget for the Gallo Institute is $9.4 million 
to be spent over a 5 year period. We expect to raise 
substantial funds through the state and other public, private, 
corporate, foundations and other resources. We therefore seek 
an allocation of $5 million to facilitate the establishment of 
this important resource for programs, research and education 
and awareness of prostate cancer. It will not be used for 
bricks and mortar.
    I want to thank Chairman Stevens and the committee again 
for allowing me to testify. The creation of the Gallo Prostate 
Institute will be a valuable tool for the State of New Jersey. 
As in Dean's case, with the help of a Nationally recognized 
Cancer Institute he was able to survive 2\1/2\ years with a 
good quality of life and continue to serve the constituents of 
New Jersey.

    Senator Stevens. Thank you very much, Mrs. Gallo.
    As a matter of fact, this afternoon, the retiring Post 
Master General will come to this building to dedicate the 
Prostate Cancer Stamp. It will be its first opening here, 
because we are trying to get greater awareness of the problem.
    Mrs. Gallo. That is great.
    Senator Stevens. And I do thank you for coming. We will do 
our best.
    Mrs. Gallo. Thank you.
    Senator Stevens. Thank you very much.
    Mr. Ekarius. Thank you, Mr. Chairman.
    Senator Stevens. Dr. Robert Rubin.
STATEMENT OF ROBERT W. RUBIN, PH.D., PRESIDENT AND 
            CHIEF EXECUTIVE OFFICER, LOVELACE 
            RESPIRATORY RESEARCH INSTITUTE, NEW MEXICO
    Dr. Rubin. Good afternoon, Mr. Chairman. My name is Robert 
Rubin, and I am President and CEO of the Lovelace Respiratory 
Research Institute in New Mexico. Our 50-year-old institute is 
the basic science institute--is the only one in the country--
dedicated to the prevention, treatment and cure of respiratory 
diseases.
    For over 40 years, we operated a Federal lab, called the 
Inhalation Toxicology Institute, for the Department of Energy. 
This national facility was dedicated to defense issues, 
centered on the biomedical effects of inhaling dangerous 
materials, such as radioactive, toxic or bioactive substances. 
Nineteen months ago, this facility was privatized, and my 
organization moved all of our scientists to the facility on 
Kirtland Air Force Base, in Albuquerque, and began the process 
of making it self-sufficient. This facility, and our Institute, 
now focus heavily on Department of Defense mission research 
projects.
    This one-of-a-kind large facility is equipped with unique 
specialty equipment and professional staff found nowhere else. 
Much of our work is defense related, and I would like to 
mention some of the most important projects now.
    We are now dedicated to the investigation and creation of 
new technology to combat the ever-growing threat of chemical, 
radiological and biological warfare on the battlefield or in 
the urban American setting. With our extensive aerosol science 
program, inhalation toxicology research group and unique 
exposure facilities, we serve the various agencies concerned 
with this growing threat.
    We work especially close with Sandia National Labs, which 
also has a mission to develop new technologies to counter these 
threats. We are also working with Los Alamos Labs to include 
their unique capabilities in this consortium.
    We propose the creation of a new organization, centered 
around Los Alamos, Sandia and Lovelace, dedicated to do a 
permanent, single-purpose research designed to counter threats 
to combat and civilian personnel posed by the introduction of 
radioactive, toxic and biological substances through the air. 
Privatization has allowed us to develop partnerships with 
industry and government to pursue this line of research, and we 
will be seeking funding to make this a permanent R&D 
organization in New Mexico.
    An example, Senator, of the type of technology we wish to 
develop and expand is a joint project with Georgetown 
University Medical School to create a hand-held drug delivery 
device, dispensing drugs, called retinoids, that our scientists 
have shown can induce lung regeneration and reverse or protect 
lung tissue from damage due to inhaled toxic substances. This 
will be of direct benefit to the soldier in the field.
    Building on this research, we should be able to mount a 
credible defense against many types of battlefield or urban 
aerosol chemical and biological threats. This $6 million 
project is of special significance to the chemical and 
biological warfare defense mission.
    We also work with the Department of Defense to study Gulf 
War Syndrome in an attempt to elucidate the possible chemical 
and physiological mechanisms that may have produced this 
illness. Such basic research should allow more rational 
treatment protocols for those individuals so affected, and 
provide data that can be used in the future to counter similar 
threats.
    Our current efforts center on a study of the role of 
silicone in the sand breathed by the Desert Storm troops, in 
combination with pathogens known to be present in the inhaled 
atmosphere in the region at the time of the action. This study 
of combinations of inhaled substances that might produce 
disease is a common theme for us and is the central mission of 
our new Environmental Protection Agency-funded National 
Environmental Respiratory Center.

                           prepared statement

    This Center will collaborate with the scientists working on 
the defense issues to obtain the critical mass of expertise and 
synergism that produces new ground-breaking research finding. 
Most of this important defense work has been made possible at 
reduced costs by the privatization process, which was designed 
to retain and nurture this unique national resource.
    Thank you.
    [The statement follows:]
                   Prepared Statement of Robert Rubin
    Good afternoon. My name is Robert Rubin, and I am President and CEO 
of the Lovelace Respiratory Research Institute. Our 50-year-old 
Institute is the only basic science institute totally dedicated to the 
prevention, treatment and cure for respiratory diseases. For over 40 
years we operated a federal lab called the Inhalation Toxicology 
Institute for the Department of Energy. This national facility was 
dedicated to defense issues centered on the biomedical efforts of 
inhaling dangerous materials such as radioactive toxic or bioactive 
substances. 19 months ago this facility was privatized and my 
organization moved all our scientists to this unique facility on 
Kirtland Air Force Base and began the process of making it self-
sufficient.
    This one-of-a-kind large facility is equipped with unique specialty 
equipment and professional staff found no where else in the world. Much 
of our work is defense-related and I would like to mention some of the 
most important projects and how they relate to current critical 
national defense issues.
    We are now dedicated to the investigation and creation of new 
technology to combat the ever-growing threat of chemical and biological 
warfare on the battlefield or in the American urban setting. With our 
extensive aerosol science program, inhalation toxicology research group 
and unique exposure facilities we serve the various agencies concerned 
with this growing threat. We work especially close with Sandia National 
Labs, which also has a mission to develop new technologies to counter 
these threats. We proposed the creation of a new consortium of 
organizations centered around the Sandia/Lovelace relationship, 
dedicated to permanent single-purpose research designed to counter 
threats to combat and civilian personnel posed by the introduction of 
toxic substances through the air. Privatization has allowed us to 
develop partnerships with industry and government to pursue this line 
of research and we seek funding to make this a permanent R&D facility 
on or next to Kirtland Air Force Base in Albuquerque, New Mexico.
    An example of the type of technology we wish to develop and expand 
is a joint project with Georgetown University Medical School, to create 
a hand-held drug delivery device to dispense drugs called retinoids, 
that our scientists have shown can induce lung regeneration and reverse 
or protect lung tissue from damage due to inhaled toxic substances. 
Building on this research, we should be able to mount a credible 
defense against many types of battlefield or urban aerosol chemical and 
biological threats. We seek $6 million to move this technology along to 
the prototype stage.
    We also work with the Department of Defense to study Gulf War 
Syndrome, in an attempt to elucidate the possible chemical and 
physiological mechanisms that may have produced this illness. Such 
basic research should allow more rational treatment protocols for those 
individuals actually so affected and provide data that can be used in 
the future to counter similar threats. Our current efforts center on a 
study of the role of silicone (in the sand breathed in by the Desert 
Storm troops), in combination with pathogens known to be present in the 
inhaled atmosphere in the region at the time of the action. This study 
of combinations of inhaled substances that might produce disease is a 
common theme for us, and is the central mission of our new EPA-funded 
National Environmental Respiratory Center. This center will collaborate 
with the scientists working on these defense-related projects, to 
obtain the critical mass of expertise and synergism that produces new 
ground-breaking research findings.
    Most of this important defense work has been made possible at 
reduced costs by the privatization process which was designed to retain 
and nurture this unique national resource.
    I thank the Committee for allowing me to testify here today.
                                 ______
                                 
    It is proposed that the Department of Defense establish a 
cooperative agreement with the Lovelace Respiratory Research Institute 
to meet research needs related to national defense. It is also proposed 
that the Department participate in the National Environmental 
Respiratory Center, an interagency effort to understand the respiratory 
health risks of combined exposures to mixtures of airborne 
contaminants, and support other research initiatives enhancing the 
Department's ability to fulfill its national defense mission.
   the lovelace respiratory research institute has unique and proven 
   capabilities for meeting important defense-related research needs
The Lovelace Respiratory Research Institute (LRRI)
    Located in Albuquerque, New Mexico, LRRI is the nation's only 
independent, non-profit biomedical research organization wholly 
dedicated to the prevention, treatment, and cure of respiratory 
disease. LRRI conducts basic and applied research for government, 
industry, health advocacy organizations, and the public. The Institute 
is committed to reduction of the nation's large burden of respiratory 
disease by conducting research aimed at understanding causes and 
biological mechanisms, understanding and reducing risks from materials 
inhaled in the environment and workplace, and developing new strategies 
for prevention and treatment.
    LRRI's staff of 230, including 40 scientists, 160 technicians and 
support staff, and 30 postdoctoral and graduate trainees and part-time 
staff, conduct approximately $25 million annually of basic and applied, 
independent and collaborative research annually in 350,000 square feet 
of owned and leased laboratory facilities. LRRI research is funded by 
federal agencies (60 percent, largely NIH, DOE, EPA, and DOD), and 
private sources (40 percent, largely the pharmaceutical, chemical, and 
automotive industries). LRRI's research focuses in three principal 
areas: (1) causes, mechanisms, and detection of lung cancer and 
noncancer respiratory diseases; (2) treatment of respiratory disease 
and administration of drugs by inhalation; and (3) respiratory 
toxicology and health risks from inhaled air contaminants in the 
environment and workplace. The Institute is a leader in the respiratory 
health field, and is well-respected by academia, government, and 
industry alike for its objective leadership in placing health risks 
from airborne toxicants in proper perspective. LRRI has a strong record 
in inter-institutional research collaboration, is affiliated with the 
University of New Mexico, and has research liaisons with Sandia 
National Laboratories and numerous other organizations.
    LRRI leases the privatized, government-owned Inhalation Toxicology 
Research Institute facility on Kirtland AFB, which it developed and 
operated for many years for the Department of Energy. This facility is 
the nation's best-equipped center for basic and applied research on the 
health effects of inhaled materials. LRRI is committed to maximizing 
the use of this taxpayer-owned facility to meet federal research needs 
involving respiratory disease and inhaled toxicants.
LRRI has Assisted the Department of Defense in Several Important Areas
    Over the last 30 years, LRRI has produced a large portion of the 
key information necessary to place the health risks of nuclear weapons 
production and deployment in their proper context. Administered through 
the Department of Energy, LRRI research on the long-term health 
consequences of inhaling radionuclides has provided a foundation for 
risk assessment, and the Institute's research on treatments for 
accidental inhalation exposures underpin today's therapeutic options. 
The most recent studies have determined that cigarette smoking markedly 
increases the lung cancer risk from inhaled plutonium particles, and 
developed animal models useful for studying smoke-induced lung cancer 
and noncancer disease.
    LRRI continues to conduct research to place the understanding of 
Gulf War illnesses on a stronger scientific basis. The potential 
toxicological nature of emissions from diesel-fueled tent heaters was 
characterized. An ongoing study is examining, for the first time, the 
possible long-term health consequences of inhaling very small doses of 
nerve agent. A proposal under consideration would evaluate the 
plausible, but unknown, contribution of inhaled sand dust to reported 
effects by facilitating immune disorders.
    Of importance to both training and battlefield scenarios, LRRI is 
conducting research on the toxicity of depleted uranium fragments from 
armor-piercing munitions, and earlier provided toxicity data which 
underlies present estimates of the hazards of inhaling or ingesting 
trace amounts of depleted uranium.
    LRRI's expertise in air sampling, controlled generation of toxicant 
atmospheres in the laboratory, and evaluating health effects is making 
an important contribution to the nation's chemical and biological 
defenses. LRRI has conducted research on the occupational hazards of 
working with nerve agent precursors. More recently, LRRI partnered with 
Sandia National Laboratories in research to develop new methods for 
remote detection of airborne biological agents. Together, these 
laboratories seek to refine these methods and extend the technology to 
additional chemical and biological agents.
    LRRI is also working with a small technology-based company on a 
promising new plasma-based technology for rapid and complete 
destruction of chemical and biological agents. If successful, this 
technique would avoid the current problems of other technologies 
regarding toxic residues and environmental air contamination.
    the lovelace respiratory research institute proposes to use its 
  independent and collaborative resources to address current defense-
                         related research needs
Cooperative Agreement for Conducting Toxicological Research
    It is becoming increasingly apparent to both LRRI and the 
Department of Defense that the research capabilities of LRRI are well-
aligned with many current and likely future needs of the agency. In 
view of this alignment and the difficulties encountered in maintaining 
the Department's intramural toxicological research resources and joint 
interservice efforts, it is appropriate to consider an arrangement 
which makes LRRI's resources more readily and more broadly accessible 
by the Department. LRRI seeks to work with the agency to establish a 
cooperative agreement under which a broad spectrum of work matched to 
the Institute's resources can be readily conducted. LRRI has experience 
operating successfully under a cooperative agreement with the 
Department of Energy, and is in the process of establishing a 
cooperative agreement with the Environmental Protection Agency. Such an 
arrangement can increase the utility to the Department of the 
federally-owned resources leased and managed by LRRI.
The National Environmental Respiratory Center: Determining Health Risks 
        from Combined Exposures to Air Contaminants
    The Department's operations create numerous needs to understand and 
mitigate the respiratory health risks from inhalation exposures to 
mixtures of airborne contaminants, from sequential exposures to 
multiple contaminants, and from combinations of occupational exposures 
and non-occupational exposures, such as cigarette smoke. Similar 
concerns for environmental air pollution resulted in the establishment 
this year of a new National Environmental Respiratory Center (NERC). 
LRRI proposes that the Department of Defense take advantage of this 
activity by supporting research that addresses the Department's 
specific information needs.
    Respiratory diseases now kill one out of four Americans. Despite 
workplace standards, occupational exposures are still associated with 
numerous respiratory diseases, including allergic sensitization, 
rhinitis and bronchitis, pneumoconiosis, and cancer. NIOSH estimates 
that as much as 30 percent of chronic obstructive lung disease and 
asthma in adults may be caused by occupational exposures, and that 20 
million workers are exposed to agents that can cause these diseases. 
The national health burden for occupational asthma is estimated to be 
as high as $400 million yearly. The military and civilian workforce 
involved in meeting the Department's mission incur many of the 
respiratory health risks encountered by other workers, and the work of 
the Department also involves some unique risks.
    Present environmental and workplace air quality regulations address 
individual pollutants, or pollutant classes, one at a time. The 
scientific and regulatory communities are increasingly aware that 
estimating the health consequences of air contaminants one at a time 
often misrepresents actual risks. Multiple agents can cause the same 
effects (e.g., inflammation, cancer). Some agents amplify the effects 
of others (e.g., acid particles and ozone, radon and cigarette 
smoking). It is likely that a mixture of air contaminants, each within 
its acceptable concentration, could present an unexpected aggregate 
health risk that is unacceptable. The combined risks of smoking and 
occupational exposures are largely unknown. Our poor understanding of 
the risks of toxicant mixtures makes it difficult to identify and 
prioritize the sources or practices whose management would most 
efficiently reduce the effects.
    The Center is being initiated this year with core funding provided 
for in the EPA fiscal year 1998 appropriation. The mission of the 
Center is to facilitate and participate in a national initiative to 
understand respiratory health risks from combinations of inhaled 
airborne environmental and occupational pollutants. It is appropriate 
for the Department of Defense to participate in this activity. No 
single agency has the sole mandate for addressing the combined 
exposures problem, and the Department certainly has a stake in worker 
and public protection from combined exposures.
    The Center will perform four principal functions. First, the Center 
will conduct research aimed at understanding the respiratory health 
risks of combined exposures to multiple airborne toxicants. Second, the 
Center will establish and maintain a specialized resource for 
information on present knowledge about the effects of combined 
exposures, and related research and research resources nationwide. 
Third, the Center will facilitate communication and planning in this 
specialized area by coordinating workshops and conferences on the 
health effects of contaminant mixtures and combined exposures. 
Government and non-government research sponsors and researchers from 
numerous organizations and disciplines will be brought together to 
identify critical research gaps and optimize the use of resources.
    The Department of Defense can meet its information needs and its 
interagency responsibility in this field by participating in funding 
the Center, and by sponsoring research directed at the Department's 
specific information needs.
Chemical/Biological Defense Research Consortium
    A key problem in the development of new technology to deal with 
chemical and biological threats is the basic multidisciplinary nature 
of the required research. Detection, mitigation, and countermeasures 
inevitably require new microelectronic devices, laser technology, 
software, analytical chemistry, aerosol science, microbiological 
expertise, respiratory physiology, inhaled drug delivery, and 
infectious disease management. No single institution is expert in all 
of these fields.
    Recognizing the importance of the chemical/biological threat, not 
only on distant battlefields, but also for internal national security, 
three New Mexico research organizations have proposed to pool their 
laboratory resources, technical experience, and intellectual 
capabilities to develop new measures to deal with these threats. LRRI, 
Sandia National Laboratories, and the University of New Mexico Health 
Sciences Center have pooled their remarkable and complementary 
resources to partner successfully on other issues, and are confident 
that their synergy can help the Department meet its security mission in 
the chemical/biological defense arena. All have previous experience in 
addressing issues key to this field.
    The functions of this collaborative research team would be to 
evaluate threats, develop new technologies, and improve existing 
technologies to identify and mitigate chemical/biological threats. Key 
themes would be remote detection of specific agents, personnel 
protection, threat elimination, and treatment of affected individuals. 
Although not yet formalized, a consortium of these research 
organizations would offer significant resources to the Department.
Novel Treatments for Debilitating, Intractable Respiratory Disease
    The Department is faced with as large number of military employees 
and civilian workers who develop progressive, debilitating respiratory 
disease. These diseases place a large burden on the Department and 
society in terms of both financial and human costs. A portion of this 
disease burden may result from occupational exposures, probably more 
disease results from tobacco smoking, and a portion may be attributable 
to genetic predisposition. In addition, the Department is potentially 
faced with cases of debilitating lung and airway disease on the 
battlefield from chemical and biological agents.
    Severe, destructive respiratory disease is an extremely difficult 
clinical challenge. Many respiratory diseases, such as emphysema, have 
not been amenable to cure, but are treated simply to relieve symptoms 
and maintain as much quality of life as possible. Others, such as 
cancer, are possible to cure in some instances, but are generally 
intractable and typically fatal. Indeed, the overall survival rates 
have not improved for either lung cancer or emphysema.
    Together with its Senior Fellows (outstanding researchers in other 
institutions who collaborate closely with LRRI and are supported in 
part by the Institute), LRRI is conducting pace-setting research aimed 
at more effective treatments and cures of debilitating respiratory 
disease. An especially exciting example is the work of Drs. Donald and 
Gloria Massaro of the Georgetown University Medical School. Building on 
years of work in the field, these researchers have now shown that 
chronic lung disease (emphysema, in this case) can be reversed by 
treatment with analogues of vitamin A. Normal air sac structure has 
actually been restored in adult lungs with destructive emphysema, and 
work is underway with LRRI collaborators to determine the effectiveness 
of local application by inhaling the drug. Another example is the 
current work at LRRI to increase the effectiveness of anti-cancer 
treatment by delivering drugs directly to the lung and airway surfaces 
by inhalation.
    Lovelace and Georgetown now seek $6 million to extend these 
technologies for the use of the Department of Defense and other 
agencies faced with countering such new dangerous exposures. These 
funds would be used to better define the mechanism by which retinoids 
induce lung regeneration, to develop new systems to deliver drugs and 
protective agents by aerosol systems systems, and to create credible 
counter-measures to air-born toxic and biological threats.
    Supporting innovative research aimed at treating, and potentially 
curing, debilitating respiratory disease is well within the scope of 
the Department's health concerns. LRRI proposes that the Department 
support its work on restoring destroyed lung tissue and treating 
respiratory disease by inhaled drugs.

    Senator Stevens. You are asking for $6 million; is that it?
    Dr. Rubin. That is correct.
    Senator Stevens. Any questions?
    Senator Domenici.
    Senator Domenici. Mr. Chairman, I just wanted to state for 
the record and for the Doctor my congratulations and 
wholehearted support for the privatization effort. This has 
been a public facility for 40 years, for all intents and 
purposes, funded by the Federal Government. You might remember 
Randy Lovelace was one of the original doctors involved with 
space. As a consequence, this laboratory was created with 
reference toxicity of air. Over the years, it has been one of 
the leading ones.
    And I am very proud of them for taking a leap toward 
privatization--meaning that they will get business from a lot 
of different sources, built around their expertise. Doctor, I 
compliment you and your people and thank you for your 
testimony.
    Thank you, Mr. Chairman.
    Dr. Rubin. Thank you, Senator.
    Senator Stevens. Thank you very much. We appreciate it.
    Dr. Rubin. Thank you.
    Senator Stevens. Our next witness is Bobby Harnage, the 
President of the American Federation of Government Employees.
STATEMENT OF BOBBY L. HARNAGE, NATIONAL PRESIDENT, 
            AMERICAN FEDERATION OF GOVERNMENT 
            EMPLOYEES, AFL-CIO
    Mr. Harnage. Good afternoon, Senator.
    Mr. Chairman and subcommittee members, my name is Bobby 
Harnage, and I am the National President of the American 
Federation of Government Employees, AFL-CIO, which represents 
some 600,000 Federal employees. I would like to begin my 
testimony by thanking the subcommittee for this opportunity to 
testify.
    And on a personal note, Mr. Chairman, I want to thank you 
for the leadership you have shown in securing passage of the 
emergency supplemental appropriation bill, which provided much-
needed funding to DOD. There was a lot of talk that DOD would 
perhaps have to furlough or even lay off civilian employees if 
that legislation had not been passed in time. However, because 
of your experience and expertise as a lawmaker and as an 
appropriator and because of your unmatched concern for national 
security and your determination to treat Federal employees 
fairly and equitably, I knew that furloughs and layoffs at DOD 
simply would not occur.
    Finally, I thank you for your forthright opposition to the 
Freedom from Government Competition Act currently pending 
before the government affairs committee. We will work with you 
to ensure that the sponsors of this government-wide contracting 
out legislation do not complicate chances of passage of various 
appropriation bills by offering their measure as an amendment 
to such legislation.
    I discuss in detail in my written testimony AFGE's request 
that the subcommittee retain the 10-employee rule, which 
prevents the conversion to contractor performance of an 
activity or a function of DOD that is performed by more than 10 
civilian employees until a most efficient and cost-effective 
organization analysis is complete. And so I will say nothing 
more about this on this occasion except to bring our request to 
your personal attention.
    Finally, permit me to discuss the use of in-house personnel 
ceilings by DOD officials to contract out work, often at a 
higher cost because of the absence of public/private 
competition. That is not just my opinion, that is what the 
military brass say, that is what the DOD Inspector General 
says, that is what the General Accounting Office says, and that 
is what senior DOD managers tell their subordinates to do in 
the three memos I attached to my written testimony.
    Since that submission of my testimony, I have come across 
yet another personnel ceiling horror story. In a letter to the 
field from the Air Force Reserve's Assistant Director for 
Communication and Information, she writes, and I quote:

    We recognize there are limited manpower resources in the 
field for supporting new systems as they come on line. With the 
current constrained budget environment, we also recognize that 
we are unable to obtain additional civil service personnel to 
fill these shortfalls. For these reasons, we have been pursuing 
the authority and funding to hire contractors to assist you 
with more critical network management and systems 
administration requirement. Since all of these systems are 
being installed without additional personnel manpower, a 
contract vehicle was our only option to support these labor-
intensive requirements.

    Recognizing this practice is bad for taxpayers, warfighters 
and Federal employees, your subcommittee has taken the lead on 
this issue by including a prohibition against this practice in 
recent defense appropriation bills, and we urge you to include 
it in this year's funding measure.
    Thank you for this opportunity to testify, and I will be 
happy to answer any questions you might have.

                           prepared statement

    Senator Stevens. Yes, sir. Thank you very much. I have gone 
through your whole statement, and we are going to be in touch 
with you about the A-76 questions also.
    Mr. Harnage. That would be great.
    Senator Stevens. I appreciate that.
    Are there any questions?
    [No response.]
    Senator Stevens. Thank you very much.
    Mr. Harnage. Thank you.
    [The statement follows:]
                 Prepared Statement of Bobby L. Harnage
                              introduction
    Mr. Chairman and Subcommittee members, my name is Bobby Harnage. I 
am the President of the American Federation of Government Employees. 
AFGE represents more than 600,000 federal employees serving worldwide, 
including 300,000 employed by the Department of Defense (DOD).
    I would like to begin my testimony by thanking the Subcommittee for 
this opportunity to testify on the fiscal year 1999 Defense 
Appropriations Bill. I also welcome this opportunity to work with the 
Subcommittee in addressing the needs and concerns of DOD employees. 
AFGE members are justifiably proud of their past service in defense of 
the United States. As both Americans and federal employees, AFGE 
members take seriously their role in keeping America's defense strong 
and ready. We also know that you, Mr. Chairman, and the other members 
of this Subcommittee share AFGE's belief that the United States must 
continue to remain ready to meet any threat to the security of our 
nation.
    On a personal note, Mr. Chairman, I want to thank you for the 
leadership you showed in securing passage of the emergency supplemental 
appropriations bill which provided much-needed funding to DOD. There 
was a lot of talk that DOD would perhaps have had to furlough or even 
lay off civilian employees if that legislation had not been passed in 
time. However, because of your experience and expertise as a lawmaker 
and an appropriator, because of your unmatched concern for national 
security, and because of your determination to treat federal employees 
fairly and equitably, I knew that furloughs and layoffs at DOD simply 
would not occur. Finally, I thank you for your forthright opposition to 
``The Freedom From Government Competition Act'' (S. 314), currently 
pending before the Senate Governmental Affairs Committee. We'll work 
with you to ensure that the sponsors of this government-wide 
contracting out legislation don't complicate chances of passage of 
various appropriations bills by offering their measure as an amendment 
to such legislation.
 upholding the competitive framework of omb circular a-76 and the ten-
                             employee rule
    Mr. Chairman, we know that the options of contracting out, 
outsourcing, and privatization are generating more attention than ever. 
Many contractors, many senior Pentagon officials, and even some Members 
of Congress who have been around long enough to know better are eager 
to give work away to private sector firms even if it can't be proven 
that contracting out saves money.
    For AFGE and its members, however, the central issue which should 
drive the discussions surrounding the outsourcing debate is readiness--
how we can get the most effectiveness, efficiency, and reliability for 
the taxpayer dollar invested. It would be wrong to assume that AFGE's 
only interest in these discussion is to preserve federal jobs. AFGE has 
a long-standing policy to follow outsourced work into the private 
sector once a decision to contract out is made. For example, two years 
ago, we signed a contract with a private sector firm, Hughes Aircraft, 
which allows AFGE to continue its representation of the employees at 
the recently converted Indianapolis Naval Air Warfare Center.
    So those defense contractors whose claims of savings are based not 
on innovation and ingenuity but instead on nothing more than paying 
their employees poorly and providing them with few if any benefits had 
better watch out. This union isn't going away.
    The fact that AFGE will retain its vigor and vitality--even in this 
era in which privatization is all the rage--by organizing outsourced 
workers allows this union to be a calm and constructive player in the 
discussions surrounding defense reform and the realization of budgetary 
economies. AFGE is not anti-privatization. We are, however, 
unreservedly and non-negotiably pro-competition. And on this principle, 
we will not cave or compromise.
    AFGE was extensively involved in the 1995-1996 reform of OMB 
Circular A-76. This effort resulted in a revised Supplement that, while 
permitting more flexibility to contract out, also enables federal 
employees greater involvement in the competitive process, and makes 
contracting out a ``two-way-street'' by permitting work to return back 
in-house when it is more cost-effective to do so.
    When confronted with the anxious demands of private sector firms 
eager to secure expensive new contracts and their pro-privatization 
friends in the Pentagon, it's imperative to remember that the way to 
generate efficiencies and savings is not contracting out or 
privatizing. Rather, what's key is ensuring real and genuine 
competition between the public and private sectors before any work is 
contracted out.
    We must also remember the basic difference between a private sector 
bid and a federal sector bid. A private-sector bidder offers a promise 
of performance and costs. On the other hand, a federal bidder's offer 
is based on a proven record of performance and costs (as determined by 
annual budgets). The differences between the real and the ephemeral, 
the proof and the promise, and the walk and the talk reinforces the 
need to ensure full and fair public-private competition.
    Although less extensive than the public-private cost comparison 
process under OMB Circular A-76, the ten-employee rule is an important 
mechanism in reducing wasteful contracting out. This provision, which 
has been included in recent defense appropriations bills, (a) prevents 
the conversion to contractor performance of an activity or function of 
DOD that is performed by more than ten civilian employees until a most 
efficient and cost-effective organization analysis is completed and (b) 
requires that any resulting service contracting decision be submitted 
to the Senate Appropriations Committee.
    It is precisely because the Senate Defense Appropriations 
Subcommittee takes an interest in ensuring cost-effective service 
contracting that the ten-employee rule should be retained. Although 
your panel might continue to receive service contracting reports from 
DOD through an informal arrangement with the Senate Armed Services 
Readiness Subcommittee, it would send the wrong signal to the Pentagon 
if the ten-employee rule were dropped entirely at exactly the same time 
that some DOD officials emphasize service contracting even at the 
expense of cost-effectiveness.
    Clearly, the taxpayers would not be well-served if it appeared, 
however inaccurately, that the Senate Defense Appropriations 
Subcommittee, the panel that makes the most important of all spending 
decisions, was getting out of the service contracting oversight 
business.
    Moreover, it would not be well-advised to raise the threshold for 
conducting cost comparisons from instances involving ten employees to 
those involving, say, twenty employees. We are already concerned about 
contracts being arbitrarily split up in order to avoid the coverage of 
the ten-employee rule. That problem would be exacerbated if the ten-
employee rule devolved into, say, a twenty-employee rule. I think most 
lawmakers agree that it would be irresponsible to contract out a 
service without assurance that the taxpayers would benefit from such an 
arrangement, especially when the cost comparison process required need 
not be as comprehensive as a complete OMB Circular A-76 study.
    Further, it would be a mistake to assume that your panel's cost 
comparison safeguard is the same as the one used by the Senate 
Readiness Subcommittee, as some have suggested. As you know, your cost 
comparison requirement applies to all instances of contracting out when 
it involves more than ten employees. The Readiness Subcommittee's 
safeguard would only take effect when DOD makes a ``decision to study'' 
the conversion of a function involving twenty or more employees.
    As you know, A-76 allows managers to convert commercial activities 
involving eleven or more employees to contract without a cost 
comparison process. In addition, agencies, as a result of the revised 
A-76 supplement, can obtain waivers from the cost comparison 
requirement in other situations. As your staff has suggested, securing 
a waiver from A-76's cost comparison requirement does not constitute a 
decision by DOD managers to study the conversion of commercial 
activities to contract. Therefore, in what is likely to be a 
significant number of instances, the Senate Readiness Subcommittee's 
reporting and cost comparison safeguard simply would not work.
    Of course, in those very same instances, your panel's superior 
safeguard would ensure that DOD conducts a cost comparison--one which 
would be less extensive than an A-76 study but still sufficient to 
deter against wasteful outsourcing--and then reports any resulting 
service contracting decision to the Congress. But that would only 
happen if you and your colleagues decide to retain the ten employee 
rule.
AFGE'S recommendations
    AFGE urges the Subcommittee to resist any attempts to exempt the 
Department of Defense from the competitive requirements of the 
recently-reformed OMB Circular A-76 and its Supplement.
    AFGE urges the Subcommittee to reaffirm its commitment to the ten-
employee rule.
    AFGE also urges the Subcommittee to include language in this year's 
bill which would require DOD to conduct a post-contract award audit to 
ensure the government is truly receiving the savings or efficiencies 
promised by the contractor in its bid. In the event promised savings or 
performance are not realized, or in cases of contract non-performance 
or default, DOD would be required to report what action--such as 
recompetition or conversion to in-house performance--it is taking to 
correct this situation. The information required by the audit is 
already included in A-76's new Supplement, so this report could be 
provided with a minimum of cost or administrative burden to the agency 
compiling this report. However, we also need to compile this important 
information for all contracting out resulting from direct conversions 
and A-76 waivers and then allow DOD's contract administrators to bring 
this work back in-house in the event of poor performance and/or 
excessive costs. Mr. Chairman, we are eager to assist the Committee in 
drafting the necessary language.
   urging thorough congressional review of dod's wasteful policy of 
                   managing by arbitrary fte ceilings
    AFGE members are extremely concerned about the effect of Full-Time 
Equivalent (FTE) personnel ceilings on our federal defense workforce's 
competitive capability and on our nation's readiness.
    In early 1994, the Office of Management and Budget (OMB) reported 
that several agencies--including the Departments of Agriculture, Health 
and Human Services, Housing and Urban Development, State, Education and 
Treasury, as well as the Environmental Protection Agency--said that 
they each could have saved several million dollars by performing 
functions directly rather than having them performed by contractors but 
did not do so because either their requests to OMB to take on the 
necessary full-time equivalents (FTE's) were refused or the agencies 
were so sure such requests would be refused that they were not even 
submitted.
    It then became apparent that DOD, the department the American 
people rely on to safeguard their future, is also experiencing in-house 
staff shortages. On March 16, 1995, the personnel directors of the four 
branches of the armed forces told the Senate Armed Services Personnel 
Subcommittee that civilian personnel ceilings, not workload, cost, or 
readiness concerns are forcing them to send work to contractors that 
could have been performed more cheaply in-house.
    Also in March 1995, GAO reported ``that the personnel ceilings set 
by OMB frequently have the effect of encouraging agencies to contract 
out regardless of the results of cost, policy, or high-risk studies.'' 
And the DOD Inspector General noted in a 1995 report, ``the goal of 
downsizing the federal workforce is widely perceived as placing DOD in 
a position of having to contract for services regardless of what is 
more desirable and cost effective.''
    Moreover, I have in my possession three internal documents which 
suggest that DOD managers are instructing subordinates to manage by 
personnel ceilings and then contract out the work. The first document 
instructs managers to impose personnel ceilings and then contract out 
the work. The second document imposes a ``not to be exceeded'' ceiling 
and insists that work performed by employees under GS-12 be contracted 
out. The third document instructs Army officials to absorb civilian 
personnel reductions and offset the manpower shortages by aggressively 
contracting out.
    We shouldn't be surprised that much contracting out occurring 
because of personnel ceilings is wasteful. After all, there's no 
public-private competition. Federal employees aren't given 
opportunities to compete in such situations--simply because there 
aren't enough of them to do the work. Clearly, DOD should be required 
to manage by budgets. If it has work to do and money is authorized and 
appropriated to do that work, then DOD should be able to use federal 
employees if in-house performance is to the benefit of warfighters and 
taxpayers.
    We all know that DOD's civilian workforce is going to get smaller. 
We all know that there is going to be more contracting out. But DOD 
should not be imposing arbitrary personnel ceilings and foreclosing the 
option of in-house performance of important work, especially if 
contractors are less efficient.
    Even if not always successful, we appreciate the subcommittee's 
efforts to prevent DOD from managing by personnel ceilings by the 
inclusion of prohibitions in recent defense appropriations bills.
AFGE'S recommendation
    AFGE strongly urges the Subcommittee to require DOD to manage by 
budgets, rather than personnel ceilings.
    Recent articles in the media have brought to the attention of 
readers the ``shell game'' which is allowing the Administration to 
claim that the federal government is getting smaller when in fact 
federal employees are only being replaced by often more expensive 
contractor employees. As The Washington Times reported recently, ``One 
of the biggest trends in federal workforce policy over the past ten or 
twenty years has been to contract out more of the government's work to 
the private sector. Many thousands of government jobs are now being 
performed by private contractors * * * (T)he workers shifted to outside 
the government remain largely unseen and uncounted.''
    If the federal government spends more than $110 billion annually on 
highly labor-intensive service contracts and the annual pay and 
retirement benefits for the federal government's own workforce of 1.8 
million executive branch employees is $108 billion, the contractor 
workforce must be quite large indeed. As The Washington Times pointed 
out, the Administration has no idea how big the contractor workforce 
really is, preferring to remain willfully ignorant. I find this 
preference to be both incredible and confounding! Is there a single 
large corporation that wouldn't even have the foggiest idea about the 
size of its contractor workforce? Of course not!
AFGE'S recommendation
    If you, too, Mr. Chairman, are concerned about the Administration's 
``shell game'' of hiding hundreds of thousands of government employees 
on contractor payrolls and then claiming to have reduced the size of 
government, I urge you to consider adding H.R. 887, legislation 
introduced by Representative Eleanor Holmes Norton (D-DC), to this 
year's defense appropriations bill. Her bill would simply require OMB 
to develop a government-wide system for determining and reporting the 
number of non-federal employees engaged in service contracts. That's 
the first step which must be taken if we're ever going to end the 
``shell game'' in which the Administration wins the public relations 
war while taxpayers lose their shirts.
                               conclusion
    Mr. Chairman, this concludes my testimony. I appreciate the 
opportunity to appear before the Subcommittee today. I would gladly 
answer any questions. AFGE looks forward to working with the 
Subcommittee as the defense appropriations bill is marked up.
STATEMENT OF MICHAEL F. OUELLETTE, SERGEANT MAJOR, USA 
            (RETIRED), DIRECTOR OF LEGISLATIVE AFFAIRS, 
            NON COMMISSIONED OFFICERS ASSOCIATION OF 
            THE UNITED STATES OF AMERICA
    Senator Stevens. Now we have Sergeant Major Michael 
Ouellette, Non Commissioned Officers Association of the USA.
    Yes, sir.
    Sergeant Ouellette. Good afternoon, Mr. Chairman. Mr. 
Chairman, on behalf of the 160,000 members of the Non 
Commissioned Officers Association [NCOA], we wish to thank you 
very much for the opportunity to appear before you.
    I am not going to read to you. We have submitted the 
statement. But I would like to expound a little bit on the 
comments you made earlier, when you said that during recent 
visits to the field there were considerable concern with the 
morale of the troops, military people and their families.
    And, Mr. Chairman, that is the message that the Non 
Commissioned Officers Association receives loud and clear. That 
the issue in fact in the minds of the senior non commissioned 
officer of all the services is in fact the ability to retain 
good people over the long haul. With the constant limitations 
on pay raises, the reduction in food money is causing grave 
concern within the military. That is compounded by what is 
perceived in the field to be a diminishment of the retirement 
benefits associated with that service.
    They are concerned with the costs of health care in the 
future and what the situation is going to be. They are also 
concerned with the threat of base closures that further 
minimize availability of those facilities to obtain the 
benefits. And with that kind of information from our 
membership, this morning our new President, Roger W. Putnam, 
announced that the Non Commissioned Officers Association 
considers the reform of the military retirement systems, the 
two current systems, the 1980 system and the 1986 system, to be 
the first legislative priority of the Association.
    That is, the troops out there, Mr. Chairman, see a need in 
the future to virtually buy all of the benefits associated with 
service. And, in turn, the people serving under the retirement 
systems, the playing field is not levelled. And there are many 
serving there with significantly reduced income levels 
associated with retirement.

                           prepared statement

    Therefore, the Association will be working aggressively in 
the future to try and repeal the two systems, to return to the 
old system of final base pay times 50 percent at 20 years, to 
try and encourage continued retention of people. NCOA, although 
it is concerned mainly with people programs, has to look at the 
retention and the maintenance of the institutions of the armed 
forces. And, Mr. Chairman, right now the view is so dim in the 
minds of those serving that we feel we must take a bold step to 
move forward, to try and improve the situation so that in fact, 
at the end of the service, military people, retirees and their 
families, may in fact have enough money to be able to buy the 
complete range of their military earned benefits associated 
with retirement.
    Thank you, Mr. Chairman.
    [The statement follows:]
               Prepared Statement of Michael F. Ouellette
    Mr. Chairman, the Non Commissioned Officers Association of the USA 
(NCOA) appreciates the opportunity to present testimony before this 
subcommittee on the fiscal year 1999 Department of Defense Budget. The 
Association's comments and recommendations represent the views and 
concerns of its noncommissioned and petty officer membership and those 
of the Apprentice Division (E1-E3) and will address a wide range of 
compensation, personnel, medical care and quality-of-life issues of 
significant importance. Hopefully, this subcommittee will consider 
recommendations from an enlisted viewpoint to be of value and 
assistance during deliberations.
    NCOA is a federally chartered organization representing 160,000 
active-duty, guard and reserve, military retirees, veterans and family 
members of noncommissioned and petty officers serving in every 
component of the Armed Forces of the United States; Army, Marine Corps, 
Navy, Air Force and Coast Guard.
                                prelude
    Mr. Chairman, NCOA wishes to extend its appreciation to the members 
of this subcommittee for their efforts on behalf of enlisted men and 
women of the armed forces. Military people rely on the favorable 
actions of this subcommittee to provide funding for annual quality-of-
life improvements and this subcommittee has not failed to meet its 
obligations to those who serve. There is no question that continued 
positive funding actions by this subcommittee are paramount to the 
armed forces' ability to recruit and retain quality enlisted people to 
meet its wide-ranging mission responsibilities. At the very top of 
enlisted members' list of priorities is the ability to meet their 
financial responsibilities to financially support themselves and/or 
their families.
    NCOA understands the difficult deficit reduction climate in which 
the Congress and the armed forces must operate. The efforts of this 
subcommittee have been and will continue to be vitally important to the 
well being of the enlisted forces.
    The major point the Association wishes to make to this subcommittee 
is that the decision to maintain credible military services 
automatically carries with it a responsibility to take care of the men 
and women who comprise that force regardless. This subcommittee has 
done that in the past. Yet much more must be done to avert a manpower 
crisis.
    NCOA wishes to offer a number of pay, personnel, medical care and 
quality-of-life improvement recommendations intended to address a 
number of areas which can significantly improve the overall well-being 
of military members, retirees, their families and survivors.
                       annual military pay raise
    NCOA appreciates the support of this subcommittee to pass 
legislation in 1997 that awarded military members a 2.8 percent cost-
of-living pay raise effective January 1, 1998. However, it must be 
noted the increase was one-half percent below inflation as measured by 
the Employment Cost Index (ECI) which was set at 3.3 percent. NCOA and 
most enlisted members of the armed forces are well aware that military 
pay raises have been capped below private sector pay growth or full 
inflation in 12 or the last 16 years. The result is that military pay, 
even with the January 1998 increase, lags a cumulative 13.5 percent 
behind that enjoyed by the average American worker performing similar 
work. With the knowledge of these facts and after sustaining months of 
family separation and the hardships associated with the multitude of 
missions of the armed forces, complicated by increasingly longer 
workdays due to force reductions and operation tempo, enlisted men and 
women feel they are being ``short-changed'' by those in control of 
their destinies.
    In 1997, the House of Representatives recognized the seriousness of 
this pay situation by including language in their version of the fiscal 
year 1998 Defense Authorization Bill that directed future military pay 
raises to be at the full ECI level. Unfortunately, this provision was 
dropped in conference and the status quo prevailed. Although NCOA 
supports full ECI pay raises and total elimination of the differential 
with civilian sector pay, the Association does not expect the Congress 
to approve a 13.5 percent pay raise in 1999 to correct the situation. 
NCOA does recommend that Congress adopt a long-term military pay raise 
plan that would resolve the problem over time. Future military pay 
raises paid annually at full ECI levels plus an additional percentage 
amount would put military members on equal financial ground with their 
civilian counterparts in future years, while at the same time, 
gradually eliminating the current estimated pay differential. NCOA 
recommends a long term plan that would increase pay by the ECI plus 2 
percent in 1999, ECI plus 3 percent in 2000, ECI plus 4 percent in 2001 
and ECI plus 5 percent in 2002.
           the uniformed services thrift savings plan (ustsp)
    This year NCOA expects a recommendation to come before Congress 
that would establish a savings plan for members of the uniformed 
services. This proposal would give those eligible to participate an 
opportunity to contribute up to 5 percent of their basic pay into a 
program referred to as the Uniformed Services Thrift Savings Plan with 
the deduction made from their pay by the servicing Defense Finance and 
Accounting Services (DFAS). Under normal conditions, such a proposal 
would appear to have considerable merit; however, NCOA is very 
concerned that such a proposal sends the wrong message or paints an 
inaccurate picture of the current financial capabilities of enlisted 
members of the military services. NCOA believes it to be highly unusual 
that at a time when annual pay raises are being capped below inflation; 
When a pay gap of 13.5 percent is estimated to exist between military 
and civilian sector pay; When commissaries are redeeming food stamps 
and WIC vouchers in the millions of dollars, the Defense Department 
would offer a proposal that strongly suggests that military people, 
particularly enlisted people, can afford to save money.
    Since the original proposal made only those who entered military 
service on or after August 1, 1986, eligible to participate, NCOA 
believes the main intent was to provide a program to supplement the 
retirement system for military members who began service on August 1, 
1986. The financial impact of that system is itemized on Enclosures 1 
and 2. There can be no doubt the 1986 retirement system will impose a 
wide range of financial penalties on those serving under it. In the 
interests of military services' ability to recruit and retain military 
people until retirement, NCOA recommends the retirement system be 
improved from its current version rather than initiate a new program 
when similar civilian savings and tax deferred programs already exist 
for those who can afford to take advantage of them.
                         housing and facilities
    Last year in testimony to this subcommittee, NCOA supported a 
Defense Department proposal to change the manner in which Basic 
Allowance for Quarters (BAQ) and Variable Housing Allowance (VHA) were 
paid. The one allowance system went into effect on January 1, 1998, and 
hopefully will provide military families with a sufficient amount of 
money to cover the cost of adequate housing wherever assigned.
                           tuition assistance
    Last year Congress instructed DOD to standardize the Tuition 
Assistance Program for all services. The military services have 
responded to guidance and have changed its program to mirror each 
other. However, NCOA has received information that the services are 
finding it difficult to fully fund the program from within their 
existing budgets. NCOA is very concerned that an inability to fully 
fund this important recruiting incentive and professional develop 
program will result in a reduction of the benefit across all of the 
services. The military services now provide participants with a maximum 
annual tuition assistance benefit of $3,500. It is extremely important 
to provide adequate funding to maintain that level of benefit 
especially when higher education opportunity while in service is used 
as a recruiting incentive. This is clearly a funding requirement that 
must be fully supported by this subcommittee. NCOA recommends this 
subcommittee include appropriate tuition assistance funding levels in 
order to provide equity throughout the services and level the education 
opportunity ``playing field'' for all eligible members of the military 
services.
                        military retiree issues
    NCOA has a number of retired force issues and concerns it wants to 
bring to the attention of this subcommittee. Both of the issues are 
direct funding requirements, however, the issue of Concurrent Receipt 
will more than likely be debated in another committee. Both issues are 
vitally important to military retirees.
  --Retired Pay Cost-Of-Living Adjustment (COLA).--NCOA appreciates the 
        efforts of this subcommittee to provide a 2.1 percent COLA to 
        military retirees effective January 1, 1998. Nonetheless, NCOA 
        remains extremely concerned that last year's congressional 
        activity included suggestions by some that the Consumer Price 
        Index (CPI) overrates inflation. The Association believes this 
        debate will continue into 1998. NCOA urges this subcommittee to 
        continue to resist retirement or COLA proposals that would 
        reduce the value or purchasing power of military retired pay.
  --Concurrent Receipt.--Despite the fact that cost is a major factor 
        in changing the current offset between VA disability 
        compensation and military retired pay, NCOA remains committed 
        to correcting this equity. Retired pay and VA compensation are 
        made for two distinctively different reasons. Yet, should a 
        military retiree be adjudicated to be disabled by the VA, there 
        continues to be a dollar for dollar offset in the payment of 
        benefits. NCOA urges this subcommittee to work toward reducing 
        or eliminating the current VA disability offset to military 
        retired pay at least for the 100 percent or most severely 
        disabled.
                         military medical care
    Mr. Chairman, availability and access to military health care or 
alternative options that are needed to protect the medical care needs 
of military beneficiaries. Surveys of Coast Guard people and their 
families consistently show that medical care along with adequate pay, 
inflation protected retired pay and commissary availability are the top 
concerns of the military community. In fact, with base and hospital 
closures and reductions in medical personnel, the increasing lack of 
no-cost health care is a major concern to active and retired personnel 
alike. Enlisted people, both active and retired, suffer the greatest 
impact because of their lower pay levels which cause them to place a 
greater value on the benefit.
    Currently more than 58 hospitals have been closed as part of the 
Base Realignment and Closure Commission (BRAC) or other actions. 
Services have been cut back at many of the hospitals remaining open and 
many of them have been and continue to be downgraded to clinic size. 
Hundreds of thousands of retirees and their family members who received 
care in MTF's are now finding no care available. Retirees are being 
denied prescription drugs by MTF pharmacies in increasing numbers. They 
are told the prescribed drugs cost too much and are not stocked or are 
restricted for issue to active duty beneficiaries only.
    The TRICARE Program has been in development or implementation for 
nearly a decade, yet the TRICARE-Prime still does not cover certain 
parts of the United States. For example, in California where the 
military managed care system has been in place the longest, there are 
still areas without TRICARE Prime networks. However, despite the lack 
of established networks, the TRICARE-Standard/CHAMPUS option should be 
available. Unfortunately, the CHAMPUS Maximum Allowable Chare (CMAC) is 
so low many physicians will not accept it. The current system is 
broken, and must be fixed.
    NCOA fully supports keeping a strong, effective direct care system 
for the delivery of health care and in the best interests of medical 
readiness. The Association also supports making full use of the 
military treatment facilities and TRICARE networks as primary 
providers. However those retirees (Medicare-eligible) who are either 
``locked-out'' of TRICARE-Prime or not guaranteed access to these 
primary sources of care should be offered a number of alternatives or 
options. In this regard, NCOA supports:
  --Medicare Subvention.--NCOA is pleased that Congress passed 
        legislation last year providing authority to provide a Medicare 
        Subvention demonstration project at six sites across the United 
        States. Although this action was a major step forward, the 
        Association is greatly concerned by loss of military medical 
        care access for the many Medicare eligible military retirees 
        residing outside the confines of the demonstration test sites. 
        Therefore, NCOA strongly supports the immediate implementation 
        of the Medicare Subvention concept across the United States in 
        order to provide immediate relief and to minimize the great 
        injustice being done to all Medicare eligible military retirees 
        who have lost earned health care benefits.
  --FEHBP as an Option.--NCOA supports offering the Federal Employees 
        Health Benefit Program (FEHBP) as an option to Medicare 
        eligible military retirees, their families and survivors. 
        Additionally, the Association also supports offering this 
        option to TRICARE-Standard eligible beneficiaries residing 
        outside of TRICARE-Prime catchment areas. Although not an issue 
        that can be acted upon by this subcommittee, in the best 
        interests of Coast Guard retirees, NCOA urges the subcommittee 
        members to support any legislative effort to direct DOD to 
        restore TRICARE-Standard or CHAMPUS as originally intended by 
        Congress or authorize FEHBP as an option for all military 
        retirees and their families.
  --Medicare Part B Enrollment Penalty Waiver.--NCOA urges the 
        subcommittee members to support the enactment of any 
        legislation to waive the 10 percent per year Part B Medicare 
        late enrollment penalty for military retirees whose access to 
        the military health care system has been curtailed because of 
        base closures or implementation of TRICARE-Prime.
  --Mail-Order Pharmacy Program Expansion.--Another legislative item 
        that would be most beneficial to all military retirees would be 
        the expansion of this program beyond just those affected by 
        BRAC actions. NCOA urges the subcommittee members to support 
        legislation to expand the DOD mail-order pharmacy program to 
        include all military retiree, regardless of age, status or 
        location. The availability of this program would be a great 
        benefit to Medicare eligible military retirees even if Medicare 
        Subvention or FEHBP legislation were not passed.
                         survivor benefit plan
    Because of the efforts of Congress last year, military retirees who 
enroll in the Survivor Benefit Plan (SBP) can now withdraw from the 
program during the first year following the two-year anniversary date 
of their retirement. NCOA continues to recommend a legislative change 
to SBP which would permit 30-year paid-up coverage.
                              commissaries
    NCOA constantly receives inquiries from enlisted people, both 
active-duty and retired, concerning the continued availability of this 
very important non-pay benefit. Of course, the loss of this benefit 
would impact significantly on all eligible patrons, however, the impact 
would be the greatest on enlisted patrons simply because of their 
reduced pay levels. NCOA has supported initiatives to improve the 
management of the commissary system and would support the privatization 
of commissaries as long a the value of the benefit is not eroded and 
services are not reduced. The Association, however, is not confident 
that a decision to privatize the benefit would result in a reduction in 
the value of the benefit. Therefore, NCOA appreciates the past efforts 
of this subcommittee to protect the availability of the commissaries 
and urges the members to maintained required appropriated fund levels 
to protect the non-pay benefit as being in the best interests of the 
enlisted communities.
                        guard and reserve issues
    NCOA is committed to supporting legislation intended to improve the 
lives of members of the National Guard and Reserve and their families. 
In doing so, NCOA supports any legislative effort and urges this 
subcommittee to provide funding that would:
  --Authorize unlimited commissary access for guard and reserve 
        members.
  --Make the Reserve Component Transition Assistance Program (RCTAP) 
        disability retirement provision a permanent part of law.
  --Authorize full-payment of benefits due under the Ready Reserve 
        Mobilization Income Insurance Protection (RRMIIP).
  --Provide long-term, low-interest loans or Federal grants to self-
        employed Reservists who suffered significant financial 
        penalties as a result of their participation in Operation 
        Desert Shield/Storm and other contingencies for which selected 
        reserve members are involuntarily activated.
  --Reject any effort to eliminate the Military Leave Program for 
        Federal civilian employees participating in the reserves.
                               conclusion
    Mr. Chairman, perhaps the single most valuable effort this 
subcommittee could make to the well-being of the military enlisted 
community and the armed forces in general is to send a signal that 
Congress will provide some stability in pay and benefits. Last year, 
the House of Representatives attempted to make full ECI pay raises 
mandatory. Although that particular effort failed, there were numerous 
improvements. For instance, Congress passed legislation that reduced 
out-of-pocket medical costs for military families assigned to isolated 
areas. They made improvements in Hazardous Duty Pay and Family 
Separation Allowance (FSA) and even gave military members a new 
Hardship Deployment Pay. A Retiree Dental Plan, although non-
subsidized, became a reality. Still there remains uncertainty in the 
minds of military people. Even with the legislative gains achieved by 
military people, they still seem only to remember the attempted threats 
to their benefits.
    The insecurity caused by this constant churning of threats to 
benefits creates an environment of stress that takes a real toll on 
national security. Military people simply must be given opportunities 
to respect and participate in change instead of living in constant 
dread and fear of loss.
    NCOA appreciates the opportunity to present a number of enlisted 
views in testimony before this subcommittee. The Association looks 
forward to addressing further details regarding the issues discussed 
and any other issues with you and the subcommittee staff.
    Thank You.

    Senator Stevens. Thank you.
    I think you are right. I think that you should note when we 
were over in the Kuwait area, we ran into just a hailstorm of 
comments about the retirement system, based upon an Internet 
piece that they showed to us, which was spurious. There is just 
a lot of information out there that goes to the Internet. And 
these guys and gals out there have got time to look at that and 
to read them. They are about the only ones I know that have 
time to read them. But, at any rate, they do read them. And 
they were really hot about the question of retirement.
    So, we are going to have to do something about correcting 
that misconception. But the trouble is we are dealing with a 
myth. Because the information that is out there about what 
happened to the retirement is wrong. We have not changed the 
retirement this last year. That is what that article said.
    Senator Inouye and I are going to take a look at that and 
see what we can do. We appreciate your statement.
    Do you have any comments, Senator?
    Senator Inouye. I think it should be pointed out that 
tomorrow morning we are having a special meeting with the 
Secretary of Defense. And this will be on the top of the 
agenda.
    Senator Stevens. One of the agenda items we have is how to 
deal with this false information about what happened to the 
retirement benefits. And we also have to do as you say, we have 
to do something about the inconsistencies of the systems that 
are out there. At least we ought to be dealing with the facts 
and not with false statements. Thank you.
    Sergeant Ouellette. Mr. Chairman, thank you very much. And 
when it all comes down to the decisions, it is the soldier and 
the marine, with their faces in the mud, and the sailors at 
sea, and those people that really go through it that provide 
the level of security needed by this country. And we just 
simply have to take care of those people.
    Senator Stevens. We have to keep the promises we make.
    Sergeant Ouellette. That is right.
    Senator Stevens. There is no question about that.
    Thank you very much.
    Sergeant Ouellette. Mr. Chairman, thank you very much.
    Mr. Inouye, nice to see you.
STATEMENT OF RONALD VAN NEST, CERTIFIED REGISTERED 
            NURSE ANESTHETIST, AMERICAN ASSOCIATION OF 
            NURSE ANESTHETISTS
    Senator Stevens. Our next witness is Ronald Van Nest, the 
American Association of Nurse Anesthetists.
    Mr. Van Nest. Mr. Chairman, thank you for the opportunity 
to testify before this committee today. My name is Ronald Van 
Nest, and I am a Certified Registered Nurse Anesthetist, a 
CRNA. For the last 3 of my 30 years in the Navy, I was a member 
of the American Association of Nurse Anesthetists Federal 
Services Committee, while holding the position of Nurse 
Anesthesia Consultant to the Navy's Surgeon General. I am a 
recently retired Captain in the Navy Nurse Corps.
    I am testifying today on behalf of the American Association 
of Nurse Anesthetists, the AANA, which represents more than 
27,000 CRNA's, including over 600 that serve in our armed 
forces. My testimony today will make three points and one 
request. The points are that nurse anesthetists are inexpensive 
to educate, inexpensive to maintain, and we provide safe 
anesthesia service.
    The request is that you look into the current anesthesia 
staffing models in the military, which we consider wasteful. 
First, I would like to thank this committee for its continued 
support of the efforts of the Department of Defense to recruit 
and retain qualified nurse anesthetists. AANA thanks this 
committee for your support of special pay programs for CRNA's, 
and strongly recommends their continuation as an important 
recruitment and retention tool.
    Nurse anesthetists, while providing virtually the same 
service as physician anesthesiologists, are far less costly for 
the services to educate. Data indicates that as many as 10 
highly qualified CRNA's may be educated for the cost of 
training an anesthesiologist. The services have also saved 
resources by spending far less in bonus money to retain CRNA's. 
The nurse anesthetist and a physician start anesthesia training 
at the same time. In 8 years the CRNA will have received 
$69,000 in special pay, while the anesthesiologist will have 
received $253,000.
    It is true, however, that cost-effectiveness means nothing 
if the quality is not there. Let me stress that numerous 
studies have shown that there is no significant difference in 
the outcomes between the two providers. The Department of 
Defense could provide even more cost-effective care if it 
utilized its providers more appropriately. There is no reason 
that CRNA's should be supervised or co-assigned with 
anesthesiologists in a wasteful ratio of 1 to 1 or 2 to 1. 
These ratios amount to nothing less than very expensive 
featherbedding.
    I would like to take this opportunity to alert you to 
another related issue that may be coming before your committee. 
As you may know, the Health Care Financing Administration 
[HCFA] recently proposed a rule that would defer to State law 
on the issue of physician supervision of nurse anesthetists. 
AANA strongly supports this rule. However, legislation has been 
introduced by Senator Faircloth to prohibit HCFA from 
implementing this rule.
    We have reason to believe that there may be an attempt to 
attach this legislation to an appropriations bill. And it may 
come before the members of this committee for consideration.
    AANA strongly recommends that you resist any attempts to 
attach this legislation to any appropriations bill, and that 
the States be allowed their right to regulate our practice.

                           prepared statement

    AANA thanks this committee again for its support of 
military nurse anesthetists, and I will be happy to answer any 
questions you may have.
    [The statement follows:]
                 Prepared Statement of Ronald Van Nest
    The American Association of Nurse Anesthetists (AANA) is the 
professional association that represents over 27,000 certified 
registered nurse anesthetists (CRNA's) in the United States, including 
over 600 CRNA's in the military services. The AANA appreciates the 
opportunity to provide testimony regarding CRNA's in the military. We 
would also like to thank this committee for the help it has given us in 
assisting the Department of Defense (DOD) and each of the Services to 
recruit and retain CRNA's.
                current status of crna forces in the dod
    Nurse anesthetists have been the principal anesthesia providers in 
combat areas in every war the U.S. has been engaged since World War I. 
Military nurse anesthetists have been honored and decorated by the U.S. 
and foreign governments for outstanding achievements, resulting from 
their dedication and commitment to duty, and competence in managing 
seriously wounded casualties. In World War II, there were 17 nurse 
anesthetists to every one anesthesiologist. In Vietnam, the ratio of 
CRNA's to physician anesthetists was approximately 3:1. Two nurse 
anesthetists were killed in Vietnam and their names have been engraved 
on the Vietnam Memorial Wall. During the Panama strike, only CRNA's 
were sent with the fighting forces. Nurse anesthetists served with 
honor during Desert Shield and Desert Storm. Military CRNA's continue 
to provide critical anesthesia support to humanitarian missions around 
the globe in such places as Somalia, Haiti and Bosnia.
    In all of the Services, maintaining adequate numbers of active duty 
CRNA's is of utmost concern. For several years, the number of CRNA's 
serving in active duty has consistently fallen short of the number 
authorized by DOD as needed providers. Current statistics on the number 
of active-duty CRNA's for fiscal year 1998 are detailed below:

             NUMBER OF ACTIVE DUTY CRNA'S--FISCAL YEAR 1998
------------------------------------------------------------------------
                                 Authorization   Inventory     Shortage
------------------------------------------------------------------------
Army...........................           276           232          -44
Navy...........................           134           133           -1
Air Force......................           233           230           -3
                                ----------------------------------------
      DOD Total................           643           595          -48
------------------------------------------------------------------------

                       how crna's save dod money
    The practice of anesthesia is a recognized specialty within both 
the nursing and medical professions. Both CRNA's and anesthesiologists 
(MDA's) administer anesthesia for all types of surgical procedures, 
from the simplest to the most complex, either as single providers or in 
a ``team care setting.'' Patient outcomes data has consistently shown 
that the anesthesia provided by solo CRNA's is of the same high quality 
as that provided by CRNA's who work with anesthesiologists, or that 
provided by solo anesthesiologists. CRNA's and MDA's are both educated 
to use the same anesthesia processes in the provision of anesthesia and 
related services.
    While both types of health care professionals can provide the same 
or similar services, CRNA's cost the military much less to educate and 
to retain. In the first place, it costs the military significantly less 
to educate a CRNA as an anesthesia provider compared to the cost of 
educating an anesthesiologist. Second, a physician draws thousands of 
dollars in additional bonuses that illustrate they are significantly 
more expensive to retain.
Training costs are less
    The most substantial educational difference between CRNA's and 
anesthesiologists is that prior to anesthesia education, MDA's receive 
medical education while CRNA's receive nursing education. However, the 
anesthesia part of the education is very similar for both providers. 
CRNA's and anesthesiologists are both educated to use the same 
anesthesia processes in the provision of anesthesia and related 
services. However, the cost to educate nurse anesthetists is 
significantly lower than the educational costs for physician 
anesthesiologists. Becoming a CRNA takes an average of 30 months 
additional education beyond the nurse's baccalaureate education, while 
becoming an anesthesiologist takes a minimum of 8 years beyond the 
baccalaureate degree. But if you compare just the cost of the 
anesthesia portion of their educational programs, CRNA education is far 
more cost-effective than physician education. Data from the 1992 AANA 
Council on Accreditation survey of nurse anesthesia programs indicates 
that the average annual program cost per student nurse anesthetists is 
$11,741. The total cost for 30 months of CRNA education would therefore 
be approximately $29,352 ($11,741 per year  2.5 years). 
According to a letter received by AANA from HCFA in 1990, the average 
annual residency program cost per medical resident was $84,837. The 
total cost for a four-year anesthesiologist residency would therefore 
be approximately $339,400 ($84,837 per year  4 years). AANA 
estimates that at least 10 CRNA's can be educated for the cost of 
educating one anesthesiologist. With the shorter training period, the 
10 CRNA's will each be in practice for several years before the one 
anesthesiologist completes his/her residency.
[GRAPHIC] [TIFF OMITTED] T02MY11.000

Non-MD bonuses are less than physician bonuses
    In addition to the decreased cost of training a nurse anesthetist, 
the bonuses received by CRNA's in the military are significantly lower 
than those received by military physicians.
            The Incentive Special Pay for Nurses
    In the early 1980's, once military CRNA's reached the grade of 
major with 12-14 years service, they could expect their salary and 
fringe benefits to match that of the average employed CRNA in the 
civilian workforce. By the 1990's, due to significant increases in 
civilian CRNA, military pay and fringe benefits were no longer 
comparable to the average employed civilian CRNA. According to a March, 
1994 study requested by the Health Policy Directorate of Health Affairs 
and conducted by DOD, a large pay gap existed between annual civilian 
and military pay in 1992. This study concluded that ``this earnings gap 
is a major reason why the military has difficulty retaining CRNA's.'' 
In order to address this pay gap, in the fiscal year 1995 Defense 
Authorization bill Congress authorized the implementation of an 
increase in the annual Incentive Special Pay for nurse anesthetists 
from $6,000 to $15,000 for those CRNA's who are no longer under service 
obligation to pay back their anesthesia education. Those CRNA's who 
remain obligated will receive the $6,000 ISP. In addition, DOD has 
standardized the payback obligation across all the Services, which 
allowed for fair implementation of this increase.
    AANA thanks this Committee for its assistance in securing this 
increase in the annual ISP. AANA strongly recommends the continuation 
of the annual ISP for CRNA's, which recognizes the special skills and 
advanced education that CRNA's bring to the DOD health care system.
            Board Certification Pay for Nurses
    Included in the fiscal year 1996 Defense Authorization bill was 
language authorizing the implementation of a board certification pay 
for certain non-MD health care professionals, including advanced 
practice nurses. AANA is highly supportive of board certification pay 
for all advanced practice nurses. It is clear that the concept of board 
certification pay comes from the physician model, which was implemented 
as an incentive for physicians to attain the highest level of 
competency and certification. The establishment of this type of pay for 
nurses recognizes that there are levels of excellence in the profession 
of nursing that should be recognized, just as in the medical 
profession.
    While many CRNA's have received board certification pay to date, 
there are many that remain ineligible. Since certification to practice 
as a CRNA does not require a specific master's degree, many nurse 
anesthetists have chosen to diversify their education by pursuing an 
advanced degree in other related fields. But CRNA's with masters 
degrees in education, administration, or management are not eligible 
for board certification pay since their graduate degree is not in a 
clinical specialty. Many CRNA's who have non-clinical master's degrees 
either chose or were guided by their respective services to pursue a 
degree other than in a clinical specialty. Many feel that diversity in 
education equates to a stronger, more viable profession. CRNA's do 
utilize education and management principles in their everyday practice 
and these skills are vital to performance of their duties. To deny a 
bonus to these individuals is unfair, and will certainly affect their 
morale as they work side-by-side with their less-experienced 
colleagues, who will collect a bonus for which they are not eligible. 
In addition, in the future this bonus will act as a financial 
disincentive for nurse anesthetists to diversify and broaden their 
horizons.
    AANA encourages DOD and the respective services to reexamine the 
issue of awarding board certification pay only to CRNA's who have 
clinical master's degrees.
            Comparison to Physician Bonuses
    Even with the implementation of an increased ISP and the addition 
of a board certification pay, CRNA's remain cost effective anesthesia 
providers for DOD. Nurse anesthesia students receive no bonus money at 
all while attending anesthesia school. Then, CRNA's receive only $6,000 
per year in ISP, and an average of $2,500 in board certification pay 
while under payback service obligation for four years. After their 
payback is completed, nurse anesthetists are eligible for a $15,000 
annual ISP bonus, with a continuation of the board certification pay. 
The alternatives to CRNA's, physician anesthesiologists, are eligible 
for four different bonuses. Physicians are eligible for a $5,000 annual 
variable special pay upon entering residency. After their four years of 
residency, they immediately are eligible for an additional $15,000 
special pay, and a $33,000 physician ISP annually. Upon passing board 
certification (usually about 18 months after residency is completed), 
an additional $2,500 in board certification pay is added to the bonus 
total (See Appendix One for breakdown of total). All of this bonus 
money is paid to physicians annually while they are still under a 
payback service obligation.
    In the first eight years of service alone, the result is a wide 
disparity in the amount of bonus dollars paid to physician 
anesthesiologists ($253,500) compared to the amount paid to CRNA's 
($69,000).
   how more effective utilization can save money without sacrificing 
                            quality of care
    In light of the fact that it costs less to educate CRNA's, that 
nurse anesthetists draw minimal bonuses compared to physician 
anesthesiologists, and that numerous studies show there is no 
significant differences in outcomes between anesthesia providers (See 
Appendix Two), it is clear that CRNA's are a cost-effective anesthesia 
provider for the military. From a budgetary standpoint, it is vitally 
important to utilize these high quality, cost-effective anesthesia 
providers in appropriate ratios with their physician anesthesiologist 
counterparts. ``Over-supervision'' is not only unproductive, it is 
financially wasteful and unnecessary.
    During World War II, there were 17 CRNA's for every one 
anesthesiologist (17:1). In Vietnam, the ratio was approximately three 
to one (3:1). Currently the military is operating with much narrower 
ratios of CRNA's to anesthesiologists. As recently as last year, the 
Army was functioning with two CRNA's to every anesthesiologist (2:1); 
in the Air Force, the ratio was even narrower at approximately 1.6:1; 
and the Navy was at the level of nearly one CRNA for every one 
anesthesiologist (1:1).
    Such practice models are generally unheard of in the private 
sector, even in locations where CRNA's practice with little or no 
autonomy. In most civilian hospitals, the practice ratios run 
approximately 3 or 4 CRNA's to every one anesthesiologist (3-4:1). The 
practice ratios could be increased in military treatment facilities 
from their current levels to a more cost-effective level of 3-4:1, with 
no sacrifice to quality of care.
    The U.S. military services do not require anesthesiologist 
supervision of CRNA's. There are many military medical treatment 
facilities throughout the world which have military CRNA's as their 
sole anesthesia providers, and this practice arrangement has not had a 
negative impact on the quality of anesthesia care. Increasing numbers 
of anesthesiologists in the military has resulted in practice models 
with wasteful practice ratios. There continues to be proposals in all 
Services for increased supervision of CRNA's, with attempts by 
physician anesthesiologists to place unnecessary supervision language 
into local military treatment facility policies which would require 
strict adherence to a practice model of one CRNA to every one 
anesthesiologist.
    A practice model requiring a 1:1 ratio for the provision of 
anesthesia would not only be financially wasteful, but even more 
importantly, the Services would lose mobilization effectiveness by 
requiring two anesthesia providers where autonomous CRNA's have 
previously provided anesthesia safely and effectively for over 100 
years. This military standard is based on the need of the Services to 
provide a wide range of health care with as few providers as necessary 
during mobilization to remote or isolated locations. Historically, 
CRNA's have always worked independently at such locations; therefore, 
there is no basis for requiring supervision of CRNA's when they then 
return to more urban facilities. A predetermined ratio of supervision 
should not become part of the practice environment. The supervision of 
CRNA's should be based on the experience of the anesthesia care 
providers (both CRNA and anesthesiologist), the mission of the medical 
treatment facility, and the complexity and type of surgical procedure.
    The ability to function autonomously in remote locations is 
required of all military CRNA's. It is the promise of this independence 
that draws many to military anesthesia service. Therefore, any attempt 
to adopt an anesthesia practice standard that would require that an 
anesthesia care team consisting of a CRNA and a supervising 
anesthesiologist to deliver all anesthesia would not only undermine 
mobilization effectiveness, but it would also prove detrimental to the 
morale of military CRNA's and would undermine attempts by the Services 
to recruit highly motivated individuals.
    AANA recommends that this Committee direct DOD to maintain the 
mobilization effectiveness of CRNA's by enforcement of the current 
practice standard of autonomous anesthesia care by CRNA's in all 
locations, with practice ratios of 3-4:1. This ratio is more cost-
effective, with no sacrifice of quality of care.
                               conclusion
    In conclusion, the AANA believes that retention and the appropriate 
utilization of CRNA's in the Services is of critical concern. There is 
a deficit of 48 CRNA's in fiscal year 1998. Many active-duty CRNA's are 
suffering from ineffective practice models. The efforts detailed above 
will assist the Services in maintaining the military's ability to meet 
its peacetime and mobilization medical mission in a cost-effective 
manner without sacrificing quality of care. We thank the Committee for 
its support of CRNA's. For further information, please contact Greta 
Todd, AANA Associate Director of Federal Government Affairs, at 202/
484-8400.
    Pursuant to clause 2(g)(4) of the Rule XI of the Rules of the House 
of Representatives, the American Association of Nurse Anesthetists 
(AANA) and the witness representing AANA, Ronald Van Nest, disclose the 
following federal grants:
    The Council on Accreditation of Nurse Anesthesia Educational 
Programs, which is a subsidiary of the American Association of Nurse 
Anesthetists, was awarded a grant from the U.S. Department of 
Education, Funds for the Improvement of Post Secondary Education 
program in the following amounts:

October 1, 1994...............................................  $104,059
October 1, 1995...............................................   108,529
October 1, 1996...............................................   113,529
October 1, 1997.........................................................

                                                  APPENDIX ONE
----------------------------------------------------------------------------------------------------------------
                    Timeline                         CRNA                     Anesthesiologists
----------------------------------------------------------------------------------------------------------------
End 1st year....................................         $0  $5,000 Variable Special Pay.
End 2nd year....................................          0  5,000
    Mid-year: End nurse anesthesia program.               0  ...................................................
     Begin CRNA payback.
End 3rd year....................................  \1\ 6,000  5,000.
                                                  \2\ $2,50
                                                          0
End 4th year....................................      6,000  5,000.
    End Residency. Begin Anesthesiologist             2,500  ...................................................
     payback.
End 5th year....................................      6,000
                                                      2,500  5,000.
                                                             15,000 Additional Spec. Pay.
                                                             33,000 physician ISP.
End 6th year....................................      6,000
                                                      2,500  5,000.
                                                             15,000.
                                                             33,000.
    Mid-year: physician passes board............             2,500 Board Cert. Pay.
End 7th year: End CRNA payback..................     15,000
                                                      2,500  12,000 Increased VSP.
                                                             15,000.
                                                             33,000.
                                                             2,500.
End 8th year....................................     15,000  ...................................................
    End physician payback.......................      2,500  12,000.
                                                             15,000.
                                                             33,000.
                                                             2,500.
                                                 ---------------------------------------------------------------
      Total bonuses cost to DOD.................     69,000  253,500
----------------------------------------------------------------------------------------------------------------
\1\ ISP.
\2\ BCP.

                                 ______
                                 
                              appendix two
No Significant Differences in Anesthesia Outcome by Provider: Synopsis 
of Available Published Information Comparing CRNA and Anesthesiologist 
                      Patient Anesthesia Outcomes
    Patients and health care institutions have an interest in 
information concerning the quality of care given by health care 
providers.
    Nurse anesthetists have been providing quality anesthesia care in 
the United States for more than 100 years. In administering more than 
65 percent of the anesthetics given annually, CRNA's have compiled an 
enviable safety record. No studies to date that have addressed 
anesthesia care outcomes have demonstrated that there is a difference 
in patient outcomes based on the type of provider.
  --In a study mandated by the U.S. Congress and performed by the 
        National Academy of Sciences, National Research Council, the 
        report to Congress states: ``There was no association of 
        complications of anesthesia with the qualifications of the 
        anesthetist or with the type of anesthesia.'' (House Committee 
        Print No. 36, Health Care For American Veterans, page 156, 
        dated June 7, 1977.)
  --A study concerning anesthetic-related deaths from 1969-1976 by 
        Albert Bechtoldt, Jr. and the Anesthesia Study Committee, 
        published in the North Carolina Medical Journal in April 1981, 
        stated on page 257 that: ``Therefore, when we calculated the 
        incidence of anesthetic-related deaths for each group which 
        administered the anesthetic (Figure 2,) we found that the 
        incidence among the three major groups (the CRNA, the 
        anesthesiologist and the combination of CRNA and 
        anesthesiologist) to be rather similar. Although the CRNA 
        working alone accounted for about half of the anesthetic-
        related deaths, the CRNA working alone also accounted for about 
        half of the anesthetics administered.''
  --The Stanford Center for Health Care Research conducted a 17-
        hospital intensive study of institutional differences. A report 
        of the study stated that: ``Thus, using conservative 
        statistical methods, we concluded that there were no 
        significant differences in outcomes between the two groups of 
        hospitals defined by type of anesthesia provider.'' See Forrest 
        WH Jr. ``Outcome--The Effect of the Provider,'' at page 137 in 
        Hirsh RA, et al (eds): Health Care Delivery in Anesthesia. 
        1980. Philadelphia: George F. Stickley Company.
  --A 1994 legislatively mandated study by the Minnesota Department of 
        Health looked at the provision of anesthesia services by 
        anesthesiologists and certified nurse anesthetists. The 
        resulting assessment of the existing studies determined that 
        there are no studies, either national or Minnesota-specific, 
        that conclusively show a difference in patient outcomes based 
        on type of anesthesia provider.
  --The Center for Health Economics Research (CHER) completed a report 
        in January 1988 for the Health Care Financing Administration 
        (HCFA). The purpose of the report was to assist HCFA in the 
        development of a fee schedule for CRNA direct Medicare 
        reimbursement, effective January 1, 1989. CHER is an 
        independent Boston-area based research organization that 
        analyzes and evaluates federal health programs. As part of the 
        report, CHER conducted a review of the literature concerning 
        anesthesia quality. CHER addressed the question of whether the 
        quality of anesthesia care varies by the type of anesthesia 
        provider.
      As part of its literature review, CHER reviewed three studies 
        which have explicitly examined anesthesia outcomes by provider 
        type. The CHER researchers concluded that ``none of the studies 
        detected significant differences in anesthesia outcomes among 
        nurse anesthetists versus anesthesiologists.'' The CHER 
        researchers stated that anesthesia outcomes between CRNA's and 
        anesthesiologists ``have not been shown to differ.''
    The U.S. House of Representatives Committee on Armed Services 
Report on H.R. 1748, the Department of Defense Authorization Act for 
Fiscal Year 1988-89, commented on a proposed change in the supervision 
of nurse anesthetists in the military services that would require 
anesthesiologist supervision. The committee stated that: ``From the 
quality of care standpoint, the committee is not aware of any data that 
suggests that nurse anesthetists need a higher level of supervision 
than they currently have. If such data exists, the committee would be 
very interested to review it.''
    At pages 208 to 209, the report stated that: ``The committee 
understands that the current practice in the civilian, as well as 
military, medical care systems is that a nurse anesthetist must be 
supervised by a physician. Under the change proposed within the 
military, a nurse anesthetist would be required to be supervised by an 
anesthesiologist.
    ``The committee is extremely skeptical that such a policy change 
makes sense from a patient care, quality of care or medical readiness 
standpoint. In terms of patient care, the requirement that an 
anesthesiologist supervise every anesthetist would mean that many 
anesthesiologists would be forced to provide less patient care. Some 
small hospitals that currently have only one nurse anesthetist and no 
anesthesiologist would lose their anesthesia capability altogether 
under this proposal.''
    In concluding the discussion of this subject, the House committee 
said that the adoption of a change in policy that would require 
anesthesiologist supervision of nurse anesthetists must be supported by 
compelling reasons, with full explanation and supporting data.
    The practice of anesthesia has become safer in recent years due to 
improvements in pharmacological agents and the introduction of 
sophisticated technology. Recent studies have shown a dramatic 
reduction in anesthesia mortality rate to approximately 1 per 250,000 
anesthetics.
    In 1990, the Center for Disease Control (CDC) intended to conduct a 
research study on morbidity and mortality in anesthesia. Following a 
review of the anesthesia data, the CDC concluded that morbidity and 
mortality in anesthesia was too low to warrant the study.
    In a 1988 book, Mark Wood of the St. Paul Fire and Marine Insurance 
Company summarized a St. Paul study of its anesthesia-related claims. 
St. Paul studied the leading medical liability allegations that St. 
Paul-insured anesthesiologists and CRNA's reported between 1981 and 
1985. The data consisted of all claims, including pending and closed 
claims. St. Paul concluded that ``nurse anesthetist loss experience is 
very similar to that of anesthesiologists * * *.'' See Wood, MD, 
``Monitoring Equipment and Loss Reduction: An Insurer's View,'' in 
Gravenstein JS, Holzer JF (eds): Safety and Cost Contained in 
Anesthesia. 1988. Stoneham, Mass.: Butterworth Publishers.
    From 1988 to 1995, St. Paul has returned nearly $24,000,000 in 
premiums to its insured CRNA's because the loss experience was 
substantially better than St. Paul originally predicted. Further, St. 
Paul stated in a July 1995 publication: The St. Paul Medical Services 
Nurse Anesthetist Update, that ``nurse anesthetists insured by St. Paul 
will experience an average countrywide 7 percent decrease in their 
medical professional liability insurance rates in 1995.
    AANA General Counsel Gene A. Blumenreich of Nutter, McClennen and 
Fish, LLP, Boston, Massachusetts has concluded that while the fact that 
there is no difference regarding the quality of care rendered by 
anesthesiologists and CRNA's ``may be surprising to the less 
knowledgeable, an understanding of the nature of anesthesia would lead 
one to expect this. The vast majority of anesthesia-related accidents 
have nothing to do with the level of education of the provider.'' 
Blumenreich GA, Wolf BL. 1986. ``Restrictions on CRNA's imposed by 
physician-controlled insurance companies.'' AANA Journal 54:6:538-539.
    The most common anesthesia accidents are lack of oxygen supplied to 
the patient (hypoxia), intubation into the esophagus rather than the 
trachea and disconnection of oxygen supply to the patient. All of these 
accidents result from lack of attention to monitoring the patient, not 
lack of education. In fact, the Harvard Medical School standards in 
anesthesia are directed toward monitoring, which reiterates the basic 
point: Most anesthesia incidents relate to lack of attention to 
monitoring the patient, not lack of education.
    As Mr. Blumenreich has stated: ``Anesthesia seems to be an area 
where, beyond a certain level, outcome is only minimally affected by 
medical knowledge but is greatly affected by factors such as attention, 
concentration, organization and the ability to function as part of a 
team; factors toward which all professions strive but which no 
profession may claim a monopoly.'' Id.
    CRNA's offer a cost-effective alternative to all-physician care in 
the field of anesthesia. Anesthesia is an appropriate specialty for 
either nurses or physicians. The evidence to date is compelling and 
comprehensive that CRNA's provide safe, quality anesthesia care. 
Patient outcome is similar regardless of whether the anesthesia 
provider is a CRNA or an anesthesiologist.

    Senator Stevens. Thank you very much.
    Senator Inouye.
    Senator Inouye. Is it correct that of all the medical and 
surgical cases requiring anesthesia in this country, 85 percent 
are handled by nurse anesthetists?
    Mr. Van Nest. I cannot support that number, Senator. I have 
heard varying numbers. One number that the AANA uses is about 
65 percent of all the anesthesia rendered in rural hospitals is 
done by nurse anesthetists. We are roughly around 50 percent 
nationwide on anesthesia service. A lot of the service, 
however, that is rendered by an anesthesiologist is co-rendered 
by a nurse anesthetist, either in a supervisory or in a 
collaborative relationship. So there is a lot of anesthesia 
being administered by nurse anesthetists that may also be 
considered rendered by an anesthesiologist.
    Senator Inouye. What would be the national ratio between 
nurse anesthetists and M.D. anesthesiologists in hospitals?
    Mr. Van Nest. I am speaking for myself on this answer at 
this moment. The membership in the American Association of 
Nurse Anesthetists and the membership in the American Society 
of Anesthesiologists is roughly the same. We are very close, 
within a couple of thousand members, to the best of my 
knowledge.
    Senator Inouye. Thank you.
    Senator Stevens. Thank you very much.
STATEMENT OF CHARLES L. CALKINS, NATIONAL EXECUTIVE 
            SECRETARY, FLEET RESERVE ASSOCIATION
    Senator Stevens. Our next witness is Charles Calkins, of 
the Fleet Reserve Association.
    Mr. Calkins. Mr. Chairman, Senator Inouye, thank you for 
the opportunity to present the Fleet Reserve Association's 
priorities regarding personnel issues for fiscal year 1999.
    I also wish to express appreciation to you and members of 
the subcommittee for your strong support of the men and women 
serving in our uniformed services. Thanks to your efforts, they 
have seen significant quality-of-life improvements. Our country 
and its uniformed services face many challenges, not the least 
of which is turmoil in distant parts of the world that 
threatens our national interests. Inadequate defense funds, 
insufficient manpower, declining recruiting and retention 
rates, widening pay comparability, crumbling infrastructure, 
and disenfranchised older retirees add to these challenges.
    These and other issues are addressed in our complete 
statement and, in the interest of time, I will focus only on 
several key points.
    Compared to 1989, DOD funding in fiscal year 1999 will have 
dropped approximately $40 billion. This reduction helped to 
balance the budget, generate a projected surplus, and free up 
money for other government programs. Notable is an increase by 
next year of over $208 billion, compared to 1989, in Department 
of Health and Human Services funding.
    Keeping in mind the challenges discussed above, it seems 
those most deserving of consideration in the reallocation of 
government spending are the men and women who are now sharing 
the sacrifices and hardships of serving in the armed forces. In 
addition to these major challenges, additional personnel cuts 
are planned--not because the workload has decreased, but 
because money saved from the personnel account is sorely needed 
for procurement and modernization.
    Next year's mission demands will be greater than in 1998, 
and the Navy can ill afford to lose 18,000 more personnel, as 
recommended in the Quadrennial Defense Review [QDR]. And the 
Marine Corps should not be mandated to further reduce manpower 
below pre-1998 levels.
    Annual military pay raises always trail 15 months behind 
the applicable employment cost index [ECI]. And each year the 
pay gap grows wider. Hopefully Congress has not forgotten the 
need, when in 1981 we had to raise the pay of its senior 
enlisted members. At that time, many were voting with their 
feet.
    The Fleet Reserve Association [FRA] urges larger pay 
adjustments to narrow the pay gap in accordance with the latest 
full ECI data immediately prior to the effective date of the 
pay raise, and a gradual pay increase for senior enlisted 
personnel to bring it to a level commensurate with their 
leadership roles.
    Regarding health care, improvements are needed in Tricare. 
And a major priority is the test of the Federal Employees 
Health Benefit Program option for older beneficiaries. 
Confusion over the three military retirement plans is a concern 
for our sea services leaders, and all uniformed service members 
are pondering career decisions. Second- and third-term 
enlistees--and we are finding that first-termers--are also 
discovering that the retirement program they may look forward 
to provides significantly less financially than the previous 
two programs. Yet they must pay the same amount for health care 
for themselves and their families.
    The FRA believes Congress should repeal the 1986 Military 
Retirement Reform Act or redux.

                           prepared statement

    Mr. Chairman, Senator Inouye, the FRA shipmates appreciate 
your untiring commitment and support of personnel now serving 
and those who have served in the past. Thank you.
    [The statement follows:]
                Prepared Statement of Charles L. Calkins
                              introduction
    The FRA is a Congressionally-chartered organization of nearly 
160,000 enlisted Sea Service personnel who are now serving, or have 
served in the U.S. Navy, Marine Corps, and Coast Guard. The Association 
has been the ombudsman for the three services' active, reserve, and 
retired components since 1924. Most members are senior enlisted 
personnel who have served in one to three wars and have 20 to 30 (or 
more) years of honorable service.
    The Association's three staff members who are responsible for 
preparing this statement are Sea Service veterans with more than 100 
years of combined experience including active duty stints and time 
working military issues and programs on Capitol Hill. They take this 
opportunity to warn Congress of the pending damage to the Nation's 
defense establishment if the fiscal year 1999 defense budget is 
approved in its present form.
                military readiness is now at code yellow
    It's impossible to ignore the many indicators spelling out the 
challenges facing the United States and its Armed Forces. In addition 
to inadequate funds and a very unsteady world, insufficient manpower is 
causing concern, recruiting and retention are worsening, pay 
comparability is widening, optempo continues to plague perstempo, 
infrastructure is quickly deteriorating, retired service members are 
up-in-arms for being ``disenfranchised'' at medical treatment 
facilities, commissaries are under constant threats of closure or 
privatization, and the list goes on.
    In this statement, FRA will briefly address most of these topics 
plus others of concern to its membership. (Additional information 
relating to these views is available on request from Retired Navy 
Master Chief Joe Barnes, FRA Director of Legislative Programs, at 703-
683-1400 x 312.)
                                manpower
    The Chairman of the Joint Chiefs of Staff, said it best, ``The 
reality of our current tempo is that we are doing more operations with 
a smaller force.''
    Since the Department of Defense (DOD) convinced Congress that the 
so-called ``peacetime'' Armed Forces need but a ``few good men and 
women,'' operation tempos have significantly increased. The 
``downsizing'' of manpower strengths has led to longer deployments, as 
well as family problems, instability, stress, and falling retention 
numbers, to name a few.
    Take a look at the Navy's situation. When things were ``hot'' 
between the United States and USSR, only about 25 percent of the force 
was deployed at one time. Today, according to Vice Adm. Daniel Oliver, 
Chief of Naval Personnel, it's 30-33 percent forward deployed with 50-
60 percent underway on any given day. With the trouble spots in the 
Middle East apparently here to stay, the Navy's mission demands will be 
greater than in fiscal year 1998 and it can ill-afford to lose 18,000 
more personnel as recommended in the Quadrennial Defense Review (QDR).
    In a recent visit to Naval installations in the Virginia Tidewater 
area, FRA National President Robert Beese found discontent among 
submariners fearing that further manpower reductions will adversely 
effect their mission, yet the QDR recommends reducing the Navy's 
submarine force from 73 boats to 50. However, the Navy plans to have 75 
submarines operational in fiscal year 1999. Currently, submarines are 
deployed 50 percent of the time with 25 percent forward deployed. 
(Beese recommends that more members of Congress should visit the boats. 
Arrangements may be made through the Navy or FRA.)
    The Marines were deployed less during the Cold War years than now. 
Despite indications that optempo would be reduced in fiscal year 1999, 
Marine land forces plan to be involved in 28 joint exercises, the same 
number as in fiscal year 1997, and 66 training exercises, five (5) more 
than scheduled for fiscal year 1998. The Marines are expected to do 
this with 1,800 less personnel than in fiscal years 1997 and 1998.
    FRA states unequivocally that the Navy and Marine Corps should not 
be mandated to further reduce manpower strengths below pre-fiscal year 
1998 levels.
                               recruiting
    The good news for fiscal year 1997 was that the Armed Services met 
their quality and numerical goals. The bad news is that it was done 
with smoke and mirrors. The Pentagon reduced the original requirements. 
Quality is assessed at a 60-90 percentile of accessions scoring in the 
upper half of the military's entrance exams, but the services just eked 
past the lower figure at the 63 percent level down from 74 percent in 
1992.
    Recruiting will be tougher for fiscal year 1999. The propensity of 
youths interested in serving their country in uniform has dropped from 
26.2 percent in 1991 to 20.7 percent in 1996. The economy is doing 
especially well and civilian employment is there for anyone searching 
for a job. Especially alarming is the fact that except for educational 
benefits, there are fewer reasons for today's youth to enlist in the 
military.
    Even pay and compensation fails to influence a single prospect's 
decision to join one of the Armed Forces. The consensus is that the 
military does not fairly treat its people (not surprising to military 
retirees) and most do not believe the military takes better care of its 
people than civilian employers. Last, but certainly not least, the 
bitter reality that the military fails to fulfill promises to its 
retirees (and veterans), results in fewer trusted family members or 
mentors encouraging the Nation's youth to seek a tour of duty in the 
Army, Navy, Marine Corps, Air Force, or Coast Guard.
    What's the answer? More funds to beef up recruiting programs. 
Additional monies will provide extra recruiters to canvass for 
prospective accessions, help to bolster recruiters' morale, relieve 
family tensions, and buy more positive advertising. This will help 
``sell'' the nation's mothers and fathers, aunts and uncles, 
grandfathers, and grandmothers, and hopefully spark the interest of 
young people to consider donning the military uniform.
    DOD spends an average of $7,000 to access one recruit. If Congress 
should see fit to add more dollars to attain the Services' goals, then 
the money is wisely spent, thus assuring our citizens that they have 
the best and brightest of the Nation's youth manning the ramparts after 
effective training to achieve the highest state of combat readiness.
                               retention
    The Navy predicts tougher retention times in the near future and 
the following analysis supports this contention.

                                                      NAVY
                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                                                       Second
                                                                    First termers     termers      Third termers
----------------------------------------------------------------------------------------------------------------
Prior.............................................................           38             54                62
Current...........................................................           30.8           48.4              57
----------------------------------------------------------------------------------------------------------------

    Even the Air Force has fewer experienced and trained personnel 
staying on board for longer tours of duty. Its retention rates look 
like this:

                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                                   First termers  Second termers   Third termers
----------------------------------------------------------------------------------------------------------------
Prior...........................................................              61              82              97
Current.........................................................              58              72              94
----------------------------------------------------------------------------------------------------------------

    Most significant is the loss in second term service members who 
have the most influence on the young first termers. They are small unit 
leaders expected to replace more senior enlisted members in the out 
years. With more retirements coming on line, second and third termers 
are needed even more than during the mid-1980's and early 1990's. The 
military loses a fraction of its high state of readiness with each 
departure.
    Retention is down for a number of reasons: better paying jobs in 
the civilian sector for trained personnel; excessive time away from 
family; questionable career choice due to the drawdown; lack of 
promotion opportunities; loss of confidence in senior leadership; job 
dissatisfaction; shortfalls in personnel budget (PCS and SRB delays); 
and erosion of retirement benefits.
    The attrition rate among young men and women prior to completing 
their first enlistment is also troubling. About one-third drop out for 
one reason or another. The military must develop a better program to 
screen applicants. FRA recommends enactment of legislation allowing the 
military to review juvenile records of those seeking to join its ranks.
    For example, 24,604 of 39,496 of one military service's accessions 
for 1996 required either drug or moral waivers. Some officials are 
convinced that these youths will repeat similar offenses for which they 
were granted waivers prior to the end of active service.
                           pay and allowances
    FRA is grateful for the enhancement of a number of compensation 
items in the Fiscal Year 1998 National Defense Authorization and 
Appropriations Acts. Most noteworthy were the consolidation of the 
quarters and housing allowances, an increase in hazardous duty 
incentive pay, special pay for certain hardship duty locales, bonuses 
in lieu of special pay for enlisted members extending certain overseas 
tours, etc. However, FRA was disappointed that Congress ``reformed'' 
the subsistence allowance.
    Pay.--Last year FRA provided a chart depicting how the 
Administration, et al., determines annual military pay raises which are 
always 15 months behind the applicable Employment Cost Index (ECI). 
Every year the gap comparing military pay with civilian wages, grows 
wider, and it now stands above the 13 percent mark.
    Also included in last year's presentation was an additional chart 
depicting the decline in the ratio of pay between a senior petty 
officer/noncommissioned officer and a recruit seaman/private. Prior to 
the All Volunteer Force the ratio was 4.6:1. It is now 2.6:1, 
indicating nearly a 44 percent decline. In pursuit of a justification 
for the decline, which is not indicative in the commissioned officer 
pay grades, FRA heard many excuses. Most prevalent was that junior 
personnel need more pay because they're married, have children, are on 
food stamps, in receipt of WIC, can't afford civilian rental and other 
costs including auto insurance, etc.
    FRA firmly believes military personnel in the junior ranks should 
be paid adequate pay and allowances, but not at the expense of their 
senior enlisted leaders.
    Hopefully, Congress hasn't forgotten that it had to raise the pay 
of its senior enlisted service members in 1981 above that authorized 
for other pay grades. Petty officers and non-commissioned officers in 
those pay grades were voting with their feet. The Navy did not have 
enough experienced petty officers to take its ships to sea. The Army 
was deeply concerned that its forces had become ``hollow''. Is Congress 
aware that the same problem is beginning to eat away at the senior and 
mid-level enlisted ranks?
    FRA has turned on the caution light. The annual cry and hue for 
more junior enlisted pay is again heard however senior enlisted are not 
included.
    Basic allowance for subsistence (BAS).--As stated above, FRA is 
extremely disappointed with Congress capping future BAS payments for 
career enlisted personnel in order to better compensate non-career 
junior personnel. The Association finds this unacceptable, not because 
the latter group is not deserving of recognition, but that the law 
plays one against the other.
    Sea pay.--For the past two years FRA surveyed Navy senior enlisted 
leaders as to their thoughts concerning payment of sea pay to junior 
enlisted personnel (E1-E3) serving aboard naval vessels whose more 
senior crew members are authorized sea pay. The Association has 
received a strong affirmative, particularly from those petty officers 
(and many officers) who serve or have been deployed aboard ship for 6 
months or more. The idea came from a 1995 visit, in connection with the 
Defense Science Board Task Force on Quality of Life, aboard the U.S.S. 
Kitty Hawk and U.S.S. Anchorage.
    Recommendations.--In view of the above statements on Pay and 
Allowances, FRA recommends the following Congressional actions.
  --Narrow the pay gap between military pay and civilian wages by 
        increasing military pay in accordance with the latest full ECI 
        growth immediately prior to the effective date of the pay 
        raise.
  --Gradually increase senior enlisted personnel basic pay to a level 
        that is more commensurate with their leadership roles.
  --Revise Section 602 of Public Law 105-85 to provide equitable 
        increases in BAS for all enlisted personnel.
  --Adopt sea pay for pay grades E1 thru E3 for those members assigned 
        duty aboard U.S. naval vessels deployed for 30 days or more.
    Action taken on behalf of these recommendations should include 
authorizing and appropriating additional funds without directing the 
Services to meet the obligation under current funding policies.
                              health care
    FRA has joined with The Military Coalition (TMC) in its request for 
enhanced health care programs for uniformed services personnel. In a 
statement prepared for the subcommittees having oversight of the 
military's health care program, TMC seeks improvements in TriCare, 
adoption of a Medicare subvention program for those over-65 
beneficiaries unable to access military treatment facilities, a 
widespread pharmaceutical drug mail-order program, and a Federal 
Employees Health Benefit Program (FEHBP) test program for over-65 
beneficiaries who have no access to MTF's or Medicare-contracted HMO's.
                              commissaries
    Commissaries are part of the military compensation package. The 
system has been around long enough to become a permanent part of the 
military's benefit package, especially for those who endure a career in 
the Armed Forces.
    Nevertheless, the privilege to use or operate the commissaries has 
been under continual scrutiny since the early 1970's. It's either close 
the stores, privatize them, and/or increase the surcharge.
    Currently, commissary operations are subsidized by Congressional 
appropriations, and rightly so. The subsidy funds operating costs that 
include pay for the stores' employees. It was Congress that mandated 
the services to provide pay and benefits to the workers at identical 
wage scales afforded federal employees.
    FRA urges Congress to continue to authorize and appropriate 
sufficient funds to maintain the commissary program at the current 
level of service to its customers.
             transition and relocation assistance programs
    Efforts may be underway to abolish the Transition Assistance 
Program (TAP) and the Relocation Assistance Program. The reason given 
is that there is no longer any use for them. FRA disagrees.
    First, the ``drawdown'' in military manpower strengths may continue 
into fiscal year 1999, despite FRA's opposition. As long as that threat 
hangs over the heads of our uniformed personnel, there is a compelling 
need for TAP.
    Even if the ``drawdown'' is stopped for fiscal year 1999, FRA 
believes the military services have an obligation to reward their 
honorably discharged members with a program assisting in returning them 
to civilian life.
    The Relocation Assistance Program is not, nor was it ever intended 
to be related to TAP. It's a program assisting service members 
transferred to new bases. Many of the younger members, particularly 
those with families, welcome the assistance when moving to a new base 
where everything is unfamiliar.
    FRA urges Congress to fully fund both programs so that they may 
serve those who serve or have served the Nation in uniform.
                          military retirement
    Confusion over the three military retirement plans is causing 
concern for the many uniformed service members contemplating a career 
in the Armed Forces. Those entering the military after September 8, 
1980 will soon be eligible for retirement. They probably know that the 
computation of their retired pay will produce lower payments than those 
received by their comrades-in-arms whose entry dates were prior to the 
1980 date.
    Service members with dates of entry after July 31, 1986, now second 
and third term enlistees, are discovering that the retirement program 
they may look forward to provides less financial rewards than those 
enlisting prior to the 1986 date and, again, prior to 1980 date. They 
question whether further commitment as a member of the active forces is 
worth the additional years of sacrifices and hardships.
    If the post-1986 members stay, they face reduced pay over those 
retiring earlier, however they must pay the same amount for the 
military's health care (TriCare) for themselves and their families.
    FRA believes Congress should repeal the Military Retirement Reform 
Act, Public Law 99-348, of July 1, 1986. Its effect on retention in the 
Armed Forces is now becoming clear. FRA predicts that this will get 
worse if Congress fails to take positive action to make military 
retirement more attractive to the post-July 31, 1986 accessions.
    Additionally, FRA recommends that Congress provide equitable cost-
of-living adjustments (COLA's) to all military retirees reduced only by 
the month retired, not the year.
                           concurrent receipt
    Many words have been written advocating the concurrent receipt of 
non-disability military retired pay and veterans' compensation without 
reduction in either payment. To date, Congress has seen fit to ignore 
this injustice and the issue continues to be a ``hot potato'' for both 
the National Security/Armed Services and Veterans Affairs Committees.
    This distinguished Subcommittee is familiar with the issue and 
legislation introduced by Rep. Michael Bilirakis of Florida. There are 
three bills, each covering a broader number of recipients. FRA supports 
all three but realizes the costs associated with two of the bills are 
prohibitive. Therefore, the Association urges the adoption of H.R. 44 
with a cost of $42 million per year. The legislation addresses the need 
to supplement the income of the most disabled of military retirees.
                           survivor benefits
    FRA salutes Congress for enacting the ``Forgotten Widows'' 
legislation. It should offer a bit more dignity to these ladies as well 
as some financial relief. The task now is for DOD and the military/
veterans organization to disseminate the word on how to apply. Upon 
receipt of this information, FRA will give it widespread distribution 
throughout the Association's membership.
    There are two additional ``fixes'' FRA wishes Congress to address 
for fiscal year 1999. The first concerns surviving souses of service 
members formerly in receipt of Dependents Indemnity Compensation (DIC) 
who lost it upon remarriage. A few years ago these spouses were 
authorized resumption of payments if their subsequent marriage 
terminated upon death or divorce. The Association seeks this 
subcommittee's support in urging the Committees on Veterans' Affairs to 
reauthorize and fund receipt of DIC payments to these spouses. (38 USC 
applies.)
    The second issue is authorization for a paid-up option in the 
Survivor Benefit Plan (SBP). Currently there is considerable discontent 
with SBP premiums-for-life provisions. Once the participant reaches a 
more senior year in life, he/she questions the value in continuing the 
plan. More serious attention is brought to the issue when the covered 
spouse attains the age of 62. For most participants, once the spouse 
becomes eligible for Social Security benefits, the 55 percent-of-
retired-pay promise drops to 35 percent.
    In a July 1996 DOD study of SBP, it was discovered that the 
government's statutory contribution of 40 percent has dropped to 26 
percent. FRA believes there is justification to seek an amendment to 
SBP (10 USC 1447-1460) to offer the retiree-participant a paid-up plan 
once he or she attains the age of 70, or pays premiums into the plan 
for 30 years, whichever occurs first. (The Association is in support of 
the position advocated by The Military Coalition (TMC) on this issue.)
             uniformed services thrift savings plan (ustsp)
    FRA strongly supports encouraging personnel to save money for 
future financial needs, however the Association is opposed to the 
proposed USTSP plan because it is flawed. Despite assurances that the 
proposal is for all military personnel, junior enlisted service 
members, for the most part, will not be able to participate. Money is 
tight, particularly for those who are married.
    As a representative of enlisted Sea Service personnel, FRA has 
received only a few requests from its members urging support of the 
plan. Other considerations prevent the Association from seeking the 
enactment of the proposal and FRA will be pleased, if requested, to 
share them with the Subcommittee.
                      montgomery gi bill and veap
    In 1996 legislation was enacted authorizing service members 
enrolled in the Veterans Educational Assistance Program (VEAP) to 
enroll in the Montgomery GI Bill (MGIB), a more generous plan. The law 
provided that members with active VEAP accounts on October 9, 1996 
would be eligible to take advantage of the conversion opportunity. 
However, a legal interpretation of the law later required members to 
still have money in the account in order to be considered ``active.'' 
This disenfranchised thousands of members who had been counseled by the 
services to withdraw the funds in their accounts.
    Many of the Association's members have expressed frustration over 
the issue. Since the counseling was in error, FRA seeks the 
Subcommittee's support in the allocation of additional funds in the 
Veterans' Affairs budget with an authorization in order to expand the 
number of members who may convert.
                     navy and marine corps reserve
    Most issues addressed above also apply to the Reserve enlisted 
members of the Navy and Marine Corps, and somewhat to the Coast Guard. 
FRA also recommends your favorable consideration of the following 
proposals.
  --Amend the IRS Tax Code to authorize tax deductions for un-
        reimbursed expenses involved in travel and transportation to 
        and from Reserve drill sites.
  --Require that the States not calculate remuneration for Reserve 
        services when computing unemployment compensation.
  --Authorize a test of unlimited commissary privileges for Reservists 
        and, if successful, authorize full time access.
    The Navy, Marine Corps, and Coast Guard Reserves add greatly to the 
capability and combat readiness of their respective services. 
Maintaining their well-being and combat readiness in recognition of 
their contributions to today's demanding optempo is a must. Every 
taxpayer dollar to fund the reserve components provides a three-fold or 
greater return on the investment.
                               conclusion
    Mister Chairman, FRA Shipmates wish to express their sincere 
appreciation to you and members of the Subcommittee for your tremendous 
support of the men and women serving in our Nation's Uniformed 
Services. Thanks to your commitment and leadership, the quality of life 
for our military personnel has significantly improved in recent years.

    Senator Inouye [presiding]. I thank you very much, sir. I 
can assure you that the committee's concern echoes yours. We 
are very much concerned about retention and recruiting. Signs 
are beginning to show that we may be headed for trouble down 
the road.
    Mr. Calkins. Well, I just had a discussion with our new 
MCPON this morning over at our headquarters. And he has had 
roughly 20 audiences since he has been in office. And his 
comment to me was: Chuck, please help us do something, because 
we have really got a problem. And like he said, it is coming 
not only from the second-and third-termers, but from the first-
termers, as well. They are taking a look down the line.
    And we would appreciate any help you could give us on that, 
Senator.
    Senator Inouye. Thank you very much.
    Mr. Calkins. Thank you.
STATEMENT OF ANN KOLKER, EXECUTIVE DIRECTOR, OVARIAN 
            CANCER NATIONAL ALLIANCE: OVAR'COMING 
            TOGETHER
    Senator Inouye. May I now call upon Ms. Ann Kolker, 
Executive Director, Ovarian Cancer National Alliance.
    Ms. Kolker, welcome.
    Ms. Kolker. Thank you, Senator. Thank you very much for the 
opportunity to testify at this important hearing. And thank 
you, Senator Inouye and other members of the committee, for 
including, and last year increasing, critically needed funds 
for ovarian cancer research in the Congressional Special 
Interest Research Program.
    I am Ann Kolker, a founder, and now the Executive Director 
of the Ovarian Cancer National Alliance. The Alliance was 
formed last summer, and it is the creation of leaders from the 
growing number of ovarian cancer groups across the country. 
These groups united to establish an umbrella organization, the 
Alliance, in order to have a coordinated effort that will put 
ovarian cancer policy, education and research issues squarely 
on the national agenda.
    Our statement today marks our first public appearance here 
in the Senate.
    I also serve as the consumer representative on the 
integration panel of the DOD Ovarian Cancer Research Program. 
As you and other members of the committee are aware I am 
certain, the Ovarian Cancer Research Program is still in its 
first funding cycle. So there is not a track record yet for 
this program as there is for the Breast Cancer Research 
Program, for example. We look to the success of that effort to 
inform the expansion of the Ovarian Cancer Program.
    On behalf of the Alliance, I have a straightforward 
message: Ovarian cancer research has, to date, been drastically 
underfunded. It is urgent that policymakers dramatically expand 
resources devoted to this disease. The goal must be to increase 
in a significant way the ovarian cancer survival rate, which is 
so poor that this disease has the unwelcome distinction of 
being the deadliest of the female cancers.
    Ovarian cancer is indeed life threatening. More than 50 
percent of the women who have it die within 5 years of 
diagnosis. That is because unfortunately, in at least 70 
percent of cases, women are not diagnosed until the cancer has 
reached an advanced stage, when it is often too late to cure. 
But, as with other cancers, when women are diagnosed in early 
stages--which occurs in less than one-quarter of the cases--the 
5-year survival rate is over 90 percent. And I was very 
fortunate to be diagnosed in this stage.
    The key to improved survival is of course early detection. 
And for ovarian cancer, a critical component of earlier 
detection is a better understanding of key scientific aspects 
of the disease. But this will only happen if research is 
substantially increased. The creation of the Ovarian Cancer 
Research Program several years ago, and last year's expanded 
appropriation of $10 million, were important steps in that 
direction.
    Today we ask you to consider a significant funding increase 
for the program. It is essential to build on the work that is 
just underway and to bolster research on a disease that each 
year kills one-third as many women as breast cancer but 
receives less than one-tenth the dedicated research dollars in 
the DOD budget.
    Our goal, as a part of this research, is to develop a 
screening tool that is reliable and affordable and easy to 
administer. There is no screening tool for ovarian cancer in 
the way that there is for cervical cancer, breast cancer and 
prostate cancer. And until this is done, early detection of 
ovarian cancer will continue to elude too many women and their 
families. Thousands and thousands of women will needlessly die. 
It is our strong hope that the research funded through this 
important program will ultimately yield a screening instrument.
    The 183,000 women currently living with ovarian cancer, our 
sisters, our daughters, our granddaughters, and the millions of 
at-risk women around the country, and all of our families look 
to your support for increasing the resources dedicated to this 
lethal disease.
    Thank you very, very much.

                           prepared statement

    Senator Inouye. Thank you very much, Ms. Kolker.
    At this moment, the Department of Defense Medical 
Department is in the process of developing a simple, reliable 
screening process.
    Ms. Kolker. We hope this happens in an expeditious way.
    Senator Inouye. Thank you very much.
    Ms. Kolker. Thank you.
    [The statement follows:]
                    Prepared Statement of Ann Kolker
    Thank you very much for the opportunity to testify at this 
important hearing.
    I am Ann Kolker, a founder and now executive director of the 
Ovarian Cancer National Alliance: Ovar'coming Together. The Alliance, 
formed last summer, is the creation of leaders from the growing number 
of ovarian cancer groups across the country. These groups united to 
establish an umbrella group, the Alliance, in order to have a 
coordinated, professionally managed effort that will put ovarian cancer 
policy, education and research issues squarely on the agenda of 
national policy makers and leaders in women's health. This statement, 
which addresses the importance of the Department of Defense Ovarian 
Cancer Research Program to our community, marks our first public 
appearance here in the Senate.
    I also serve as a consumer representative on the Integration Panel 
of DOD Ovarian Cancer Research Program (OCRP). As members of the 
Committee are aware, the OCRP is still in its first funding cycle. This 
means there is no track record yet for the ovarian cancer program, as 
there is for other research efforts supported through the Congressional 
Special Interest Research Program. Many of us in the ovarian cancer 
community are aware of the success of the Breast Cancer Research 
Program. We look to that effort to inform the expansion and development 
of the ovarian cancer program.
    On behalf of the Alliance, I have a straightforward message: 
ovarian cancer research has to date, been drastically under funded. It 
is urgent that policy makers dramatically expand resources devoted to 
this disease. The Alliance is grateful to this Committee for including 
$10 million for ovarian cancer research in the Congressional Special 
Interest Research Program for fiscal year 1998. However, there is a 
critical need for more funds in the coming year. We must make an all 
out effort to increase, in a significant way, the ovarian cancer 
survival rate--which is so poor that this disease has the unwelcome 
distinction of being the deadliest of the female cancers.
    Ovarian cancer is life threatening: more than 50 percent of the 
women who have it die within five years of diagnosis. That is because 
in at least 70 percent of cases, women are not diagnosed until the 
cancer has reached an advanced stage, when it is often too late to 
cure. In these all too common cases, the fatality rate is an alarming 
80 percent. But when women are diagnosed in first stage, which occurs 
in less than one-quarter of cases, the five year survival rate is over 
90 percent. I was fortunate to be diagnosed in this stage.
    There is of course, more than one reason for these sobering 
statistics. Let me talk first about the one that this committee is in a 
position to address. Scientific research is drastically under funded. 
Knowledge about key aspects of ovarian cancer is so limited that 
diagnostic tools are too often imprecise and there is no simple, 
reliable screening mechanism for the general population. As is the case 
with other cancers, the key to improved survival is early detection. 
But for ovarian cancer--there are no early detection tools that work 
for the general population. These life-saving measures will only be 
found when more research funding is made available.
    The creation of the Ovarian Cancer Research Program several years 
ago, and last year's expanded appropriation of $10 million, were 
important steps, in that direction. Today we ask you to consider a 
significant funding increase, in order to build on the work that is 
just underway in the Ovarian Cancer Research Program, and to bolster 
research on a disease that each year kills one-third as many women as 
breast cancer, but receives less than one-tenth the dedicated research 
dollars in the DOD budget.
    An ultimate goal of the Alliance is to prevent ovarian cancer. But, 
until this happens, an immediate priority is to increase the research 
dedicated to advancing scientific understanding. This in turn, will 
lead to a substantial increase in the early detection rate--
particularly if the research community can identify bio and other 
markers that will improve diagnostic tools and result in the 
development of a reliable screening mechanism, as simple and accessible 
as the Pap smear is for cervical cancer, the mammogram for breast 
cancer or the PSA test for prostate cancer.
    We know that the incidence of ovarian cancer is not nearly as great 
as breast, cervical or prostate cancer--the one good thing going for 
ovarian cancer. However, experience has shown us that early detection 
saves lives: the introduction of the Pap smear, and the use of 
mammography--even with their limitations--have dramatically improved 
early detection of cervical and breast cancer, and spared many people 
with these terrible diseases the early death sentence that 75 percent 
of women with ovarian cancer face.
    For the Alliance, the development of a screening device that is 
affordable, reliable, and easy to administer is a top priority. Until 
this is done, early detection will continue to elude too many women and 
their families. Thousands and thousands of women will needlessly 
continue to die. It is our strong hope that the research funded through 
this important program will ultimately yield such an instrument.
    I don't want to leave the committee with the impression that the 
only reason for the very low rate of early detections is the dearth of 
research. Another critical factor is the limited awareness of the 
disease's subtle symptoms in the general medical community. Because it 
is not a common disease--affecting only 1 in 55 women--it is not ``on 
the screen'' of many internists and family physicians--the doctors who 
first see women who report abdominal discomfort, bloating, bleeding or 
some of the other common, but vague, symptoms. As a result, doctors 
often misinterpret these symptoms--telling their patients that their 
complaints ``come with the territory of middle age'' or referring them 
to gastroenterologists. All the while of course, the cancer is 
advancing, and the woman's chances of being treated in time to be cured 
diminish. Gaining the attention of the medical community about ovarian 
cancer will also help to increase early detection, and ultimately 
improve survivor outcome.
    Another reason for the high mortality rate is that women themselves 
are not sufficiently aware of this disease. And even women with more 
explicit risk factors--women who have never had a child, or who have a 
strong family history of ovarian, breast or colon cancer--for example--
cannot be assumed to be alert to the disease. This awareness problem is 
compounded by the fact that the symptoms may be subtle, such as 
unexplained fatigue, loss of appetite, nausea or constipation, and not 
necessarily unique to ovarian cancer. Broad-based public education 
programs will go a long way to inform women that when that when these 
symptoms persist over time, or changes in their bodies tell them 
``something is definitely wrong, '' they must request testing for 
ovarian cancer, as well as for the litany of intestinal maladies that 
they are usually tested for. In short, increased awareness among both 
physicians and consumers should lead to more early stage diagnoses, and 
improved survival over time.
    Those of us working with the Alliance are aware that there is vital 
research on many aspects of ovarian cancer taking place at cancer 
centers and in the private sector across the country. Indeed, without 
the dramatic advances that have been made in the past few years in 
treating ovarian cancer, many women, including myself, would not be 
around, or certainly, would not have active lives. For ``a new lease on 
life'' we are grateful to those who have conducted the research and 
trials that have led to improved therapies. We urge that as research is 
expanded to new areas, the important efforts to develop more effective 
treatments for advanced stage and treatment resistant disease continue 
to move forward.
    In the past couple of years some new monies--both public and 
private--have been designated for ovarian cancer research. An infusion 
of new funds--particularly from this committee--has expanded the 
avenues of inquiry that can be pursued--and that is an exciting 
development. However, as we all know, much more remains to be done. It 
is essential to gain a better understanding of key scientific aspects 
of ovarian cancer, in order to increase dramatically the percentage of 
cases diagnosed in early stage, when the prospects of survival are very 
high, and to prevent recurrence, which plagues so many women.
    Thank you for your attention to this important women's health 
issues. The 183,000 women currently living with ovarian cancer, our 
sisters, daughters and granddaughters, the millions of at-risk women 
around the country, and all of our families look to your support for 
increasing the resources dedicated to this lethal disease.
STATEMENT OF CHARLES C. PARTRIDGE, COLONEL, USA 
            (RETIRED), NATIONAL MILITARY AND VETERANS 
            ALLIANCE
    Senator Inouye. Our next witness is Colonel Charles C. 
Partridge, Legislative Counsel, National Association for 
Uniformed Services.
    Colonel Partridge, welcome, sir.
    Colonel Partridge. Thank you very much, Senator Inouye, for 
the opportunity to testify before this committee.
    The National Association for Uniformed Services and the 
National Military Veterans Alliance's primary concern is the 
current problems in medical care with the Department of 
Defense. And I know that this committee, over the past 5 years, 
has increased spending for the Defense Health Program nearly a 
billion dollars over what was requested by the Department of 
Defense. We appreciate your support in that. We also appreciate 
the support of this committee for medicare subvention, which is 
being developed now as a demonstration program.
    Our problem today is that even when all of these programs 
are put into effect, there will still be some 40 to 50 percent 
of military beneficiaries who will have no benefit. They will 
have no access to the military hospitals even when medicare 
subvention is fully in place, or they live in a location where 
they cannot access a military hospital. Because at age 65, 
under the current law, military retirees are the only Federal 
employees who lose their guaranteed employer-provided benefit. 
At age 65, they have no guarantees. If they can get in a 
military hospital, if the space is there, if the drugs are 
there, of course they get them. Otherwise they do not.
    We think medicare subvention will help, but it will not be 
the full solution. We think the complete solution is enacting 
the Federal Employees Health Benefit plan for military 
retirees, particularly those over 65. With the enactment of 
this program nationwide, it would provide access to all 
beneficiaries. They would have a benefit just as Federal 
civilians have from the time they enter the service until the 
time they leave it. Now they do not have that.
    The Senate Armed Services Committee has taken a step in the 
right direction. They have a provision in the current defense 
bill that would provide for a demonstration of the Federal 
Employees Health Benefit Program. The problem is it is too 
small and it is underfunded. And what we would like this 
committee to do is to add something like $100 million for the 
purpose of carrying out this program this coming year. And 
then, if we could add $100 million a year for the next 4 years, 
we believe that would be a good start toward solving this 
problem.
    That concludes my statement, Senator Inouye. If you have 
any questions, I would be glad to answer them.

                           prepared statement

    Senator Inouye. Well, my concerns are your concerns. And I 
believe that promises made must be kept.
    Colonel Partridge. Thank you, sir.
    Senator Inouye. Colonel, we will do our best.
    Colonel Partridge. Thank you.
    Senator Inouye. Thank you very much, sir.
    [The statement follows:]
               Prepared Statement of Charles C. Partridge
                              introduction
    Mr. Chairman and distinguished members of the Committee, NAUS and 
the National Military and Veterans Alliance would like to express its 
appreciation to you for holding these important hearings. The testimony 
provided here represents the collective views of our members.
    The Alliance includes 15 military and veterans organizations. These 
organizations represent over 3,500,000 members of the seven uniformed 
services, officer and enlisted, active duty, reserve, National Guard, 
retired and other veterans plus their families and survivors. These 
organizations whose top priority is a strong national defense are 
listed below:

Naval Enlisted Reserve Association
American Military Retirees Association
American Retirees Association
Gold Star Wives of America
Korean War Veterans Association
Military Order of the Purple Heart
Military Order of the World Wars
National Assn. for Uniformed Services
Naval Reserve Association
Non Commissioned Officers Assn.
The Retired Enlisted Association
Society of Medical Consultants to the Armed Forces
Tragedy Assistance Prog for Survivors
Veterans of Foreign Wars

    Medical care along with adequate pay and inflation protected 
retired pay and commissaries are the top concerns of the military 
community. With base and hospital closures and reductions in medical 
personnel, the increasing lack of available health care continues to be 
a major concern to active and retired personnel alike.
    We want to thank the committee for its long standing interest in 
Military Health Care and for its support for the Federal Employees 
Health Benefits Program for military retirees.
                               background
    The military health system has several missions, first and foremost 
is caring for active duty troops and maintaining military medical care 
readiness, readiness training and contingency operations as well as 
providing care for active duty family members; continuing to provide 
promised, lifetime medical care to military retirees, and their family 
members. To carry out these missions, top quality personnel to staff 
military medical units, hospitals and clinics are essential. These 
personnel are attracted to military medicine through the Uniformed 
Services University of the Health Sciences, the U.S. Health Profession 
Scholarship Program and quality graduate medical education programs 
sponsored by the various military medical services. Each is an 
important element of the system and are all linked together.
    A military medical system is necessary to support not only the 
present active forces but also to meet future requirements. To attract, 
maintain and properly certify highly qualified medical professionals 
requires assuring them that they will have a complete range of patients 
with varied health problems to include older retirees. They can't be 
adequately trained treating only young (average 23) service members and 
young family members. This means it is imperative to maintain a strong, 
vibrant, capable direct care system.
                                current
    The direct care system coupled with TRICARE Prime, Extra and 
Standard along with Medicare Subvention and increased cooperation 
between DOD and DVA should result in adequate care for all eligible 
beneficiaries. Unfortunately, military personnel are increasingly being 
disenfranchised and DOD has not yet developed a plan that will provide 
an adequate health care option for all DOD beneficiaries. In addition, 
the TRICARE system is flawed. Some of the problems and recommendations 
for solving them follow:
    A DOD study found that TRICARE administrative costs are far too 
high. Each Managed Care support contract proposal costs millions of 
dollars, each winner can expect a protest from the losers costing more 
millions. More money is being spent on medical administration and less 
on the patient. We believe this committee should direct a review of 
alternative means of procuring private sector healthcare to supplement 
the Military healthcare system. Pending that review, current contracts 
in the Western regions which will soon require recompeting should be 
extended. The extension would provide badly needed program stability 
before starting another round of contracting.
    While we support expanding TRICARE Prime beyond catchment areas, 
some areas are too sparsely populated to create networks. If the 
TRICARE Standard benefit were adequate, beneficiaries in those areas 
could still be served. However, the CHAMPUS Maximum Allowance Charge 
(CMAC) is too low. The CMAC should be linked to the service benefit 
plan of the Federal Employees Benefits Program plan benefit as Congress 
originally directed, rather than the Medicare rate. DOD has also 
reduced the value of TRICARE Standard/CHAMPUS when it is used as second 
payer to other insurance. When CHAMPUS/TRICARE Standard is used as a 
second payer it is based on ``benefits-less-benefits'' rather than a 
``coordination of benefits'' basis. As a result beneficiaries usually 
receive no benefits from CHAMPUS as second payer. The coordination of 
benefits method should be restored and legislative provisions put in 
place to keep it.
    The TRICARE Point of Service (P.O.S.) option for enrollees in the 
Prime program is too expensive at $300/$600 deductibles and 50 percent 
copay. The P.O.S. option should be changed to the TRICARE Standard 
rate, $150/$300 and 25 percent copay. We have seen no evidence of abuse 
of the P.O.S. option and believe that the standard deductible and 
copays are enough to prevent frivolous use. Further, there should be no 
requirement to obtain advance authorization to use the P.O.S. option.
    The VA is a TRICARE subcontractor in some regions. Currently, 
copays are the same whether beneficiaries use the VA or civilian 
providers. Military personnel believe that VA hospitals/clinics should 
be given the same status as MTF's for TRICARE purposes and that copays 
be waived if beneficiaries obtain their care at VA hospitals and 
clinics.
                  medicare reimbursement (subvention)
    We welcome the Medicare reimbursement demonstration project which 
is authorized at six sites in 10 locations. We hope that the program 
can be rapidly expanded to serve more beneficiaries at more sites and 
full implementation expedited. According to the GAO (GAO/T/HEH5-97-84 
Feb 97) no more than 75,000 of the 1.2 million Medicare eligible 
beneficiaries can be accommodated by military treatment facilities even 
after the program is fully expanded throughout the United States. DOD 
expects to care for additional Medicare eligibles in the TRICARE 
Networks; however, it is clear that all Medicare eligibles will not be 
served and that another option is needed. We will address this issue 
later.
                     medicare subvention ppo option
    Last year Medicare reform legislation also provided for the first 
time for a Medicare Preferred Provider Option demonstration project. 
Unfortunately, the DOD/Medicare Subvention agreement allows only a test 
of an HMO option which DOD plans to do through the TRICARE Seniors 
program. We believe the PPO Option should be added to the DOD/Medicare 
demonstration project. This has the potential for the biggest benefit 
to DOD and the largest savings to the Medicare Program. It would be a 
more acceptable option to retirees than the TRICARE Partners or 
Affinity program that will be part of the Subvention demonstration.
                              fehbp option
    DOD has not yet submitted a plan that would provide a health care 
option for all military beneficiaries. Furthermore, when they do so we 
expect it to be in the form of demonstrations, tests and phases that 
will take three or more years to fully implement. It will probably be 
10 to 12 months after legislation is enacted before the first military 
retiree is enrolled in the Medicare subvention test, and as pointed out 
earlier even when fully implemented in 3 years or so, very few retirees 
will have access. We need an option that can be implemented next year. 
We believe that the best, most cost effective option is authorizing 
retirees to participate in the Federal Employees Health Benefits 
Program (FEHBP). With this Committee taking the lead, retirees could 
begin receiving care in the FEHB Program in 1999. Several bills have 
been introduced during this Congress to deal with this issue. Senators 
Strom Thurmond, Paul Coverdell and Lauch Faircloth have introduced S. 
1963, which would provide the Federal Employees Health Benefits Program 
beginning next year. Costs are controlled by capping the program at 
$100 million for fiscal year 1999 and increasing by $100 million per 
year until it reaches $500 million in 2003. At about that time some DOD 
demonstration programs should begin to open up for participation and 
military FEHBP participants would have the option of leaving FEHBP for 
one of the DOD programs. Our estimates indicate that some 30 percent of 
retirees would select the FEHBP option. The death rate of older 
military retirees, especially those of WWII and Korea is close to 3,000 
per month. They need access to health care now, not five to seven years 
from now when it would be too late. Now is the time to act. We must not 
continue to allow the decline in availability of medical care to 
disenfranchise military retirees and their families.
          uniformed services university of the health sciences
    The Alliance thanks this committee for its strong support for 
providing necessary funding for the continued operations of the 
Uniformed Services University of the Health Sciences. Study after study 
has shown that when all factors are considered USUHS is more cost 
effective that the U.S. Health Profession Scholarship Program. We urge 
you to continue your support for this school which is a national 
resource.
                         retiree dental program
    The unsubsidized Retiree Dental Program which recently began 
enrolling retirees has already signed up over 100,000 military 
families. The program should be reviewed as we obtain experience this 
year to determine what adjustments in benefits should be made to meet 
the needs of beneficiaries and remain cost effective to them.
             uniformed services family health plan (usfhp)
    The nine Uniformed Services Treatment Facilities continue to treat 
military beneficiaries through their USFHP which is a very popular 
program. They use the same fee structure as TRICARE providers. The 
Facilities offer the only DOD sponsored program that is keeping the 
military healthcare promise by guaranteeing care to Medicare eligible 
military beneficiaries fortunate enough to live near them and obtain 
care there. We thank this committee for its support for the USTF's in 
the past and urge you to continue to support their operation.
                                closing
    Mr. Chairman, the National Military Veterans Alliance thanks you 
and this subcommittee for holding this hearing and we urge immediate 
action to enact FEHBP legislation now, so that military beneficiaries 
can begin enrolling and receiving care in fiscal year 1999.
STATEMENT OF JAMES M. CROWLEY, PH.D., EXECUTIVE 
            DIRECTOR, SOCIETY FOR INDUSTRIAL AND 
            APPLIED MATHEMATICS, ON BEHALF OF THE JOINT 
            POLICY BOARD FOR MATHEMATICS
    Senator Inouye. Our next witness is Dr. James Crowley, 
Executive Director of the Society for Industrial and Applied 
Mathematics, Joint Policy Board for Mathematics.
    Dr. Crowley. Thank you, Senator Inouye, for the opportunity 
to comment on the fiscal year 1999 appropriations for the 
Department of Defense.
    Today, I would like to address DOD's investment in basic 
research, or 6.1 research as it is known to DOD. As I noted in 
my written statement, I worked for DOD in various scientific 
capacities for 22 years, so I am very familiar with the 
importance of basic research to the defense mission. I have 
seen firsthand how the results of basic research are 
incorporated into defense technologies and systems for the 
ultimate benefit of our defense forces, the American taxpayers, 
and our national security.
    I am very concerned, Senator, that the buying power of 
DOD's support for basic research has dropped dramatically in 
recent years--by 18 percent since 1994. And I included a chart 
in my written statement that shows this.
    Moreover, these funding levels are well below historical 
levels of investment in defense basic research. Those past 
investments played a critical role in enabling today's DOD to 
meet the Nation's defense needs through superior and cost-
effective military technologies.
    The reduced budgets have had a staggering effect on the DOD 
research agencies' ability to maintain the strength of their 
programs. For example, in the mathematical and computational 
sciences, the scope of promising research that DOD has 
identified as relevant to its mission has been curtailed, and 
whole thrusts of research have had to have been eliminated in 
some programs. The opportunities lost are not insignificant.
    The funding erosion in DOD's basic research programs must 
be stemmed if we are going to achieve our national security 
objectives in the future. We urge the subcommittee to begin 
restoring the buying power of defense basic research by fully 
funding DOD's request for basic research. We must start 
reversing the downward funding trend. And enacting the 
relatively modest proposed increase for fiscal year 1999 would 
be a crucial first step.
    Let me say a few words about what basic research means to 
DOD. You are no doubt aware of the importance of long-term 
fundamental research. I would also point out that some of the 
research supported through the 6.1 account is not as long term 
as you might think. In many cases, university researchers have 
been brought in for special expertise to help resolve real-time 
scientific and technical challenges.
    And this raises a critical point: by engaging the Nation's 
research universities in defense-related problems, DOD ensures 
itself access not only to today's researchers and the latest 
discoveries, but also to graduate students, whose involvement 
in defense-related research helps guarantee the production of 
mathematicians, scientists and engineers who can contribute to 
meeting defense needs in the future, to tackling long-term 
research problems and being able for DOD to call on more 
immediate ones.
    I have given several examples in the testimony, and time 
will not permit me to go through all of them. I have given just 
a few from one area of research in the written statement, but 
there are countless others from all areas of science and 
engineering which show the critical nature of research to 
improvement and cost-effective technology for national defense.
    I appreciate the opportunity to talk to you, and I hope you 
will remember the critical importance, but sometimes hidden 
impact, of basic research on defense capacities.
    Thank you, Senator, and I am glad to answer any questions 
you might have.
    Senator Inouye. Dr. Crowley, I thank you very much. We have 
one problem. It is easy to sell applied research, because most 
people can see the end product. You should help us sell basic 
research. If you have any ideas on how we can convince our 
colleagues, please share it with us.

                           prepared statement

    Dr. Crowley. I would be happy to do that.
    I think the basic research that is supported by the DOD 
agencies is different from, in some ways, basic research in 
other areas, in that as mission agencies, the areas chosen for 
basic research are those that do have an impact on DOD needs. 
And so I think it is important to maintain the basic research 
because it will feed into technologies in the future.
    Senator Inouye. Thank you very much, sir.
    Dr. Crowley. Thank you, Senator.
    [The statement follows:]
                 Prepared Statement of James M. Crowley
    Good afternoon, Mr. Chairman and Members of the Subcommittee. Thank 
you very much for this opportunity to comment on fiscal year 1999 
appropriations for the Department of Defense. I am James Crowley, 
Executive Director of the Society for Industrial and Applied 
Mathematics (SIAM) in Philadelphia. I speak on behalf of the Joint 
Policy Board for Mathematics (JPBM), which is a collaboration of three 
professional societies, including SIAM, the American Mathematical 
Society, and the Mathematical Association of America. These 
organizations have a combined membership of over 57,000 mathematical 
scientists and educators whose concerns encompass fundamental and 
interdisciplinary research in mathematics; the applications of 
mathematics to science, engineering, industry, and business; and 
mathematics education at all levels.
    Today I would like to address DOD's investment in basic research, 
also known in DOD budgetary parlance as 6.1 research. Let me start by 
noting that from 1988 to 1994, while I was an officer in the Air Force, 
I served as the Director of the Mathematical and Information Sciences 
Directorate at the Air Force Office of Scientific Research (AFOSR), 
then as Assistant Chief Scientist at the Air Force Systems Command at 
Andrews AFB, and then as Manager of the Applied and Computational 
Mathematics Program at the Defense Advanced Research Projects Agency 
(DARPA), so I'm very familiar with the importance of basic research to 
the defense mission. I've seen first-hand how the results of basic 
research are incorporated into defense technologies and systems for the 
ultimate benefit of our defense forces, American taxpayers, and our 
national security. Furthermore, DOD's 6.1 activities are an essential 
component of maintaining the United States' world leadership in 
mathematics, science, and engineering research.
    The buying power of DOD's support for basic research has dropped 
dramatically in recent years--by 18 percent since fiscal year 1994, as 
you can see from the chart I've included below. Moreover, these funding 
levels are well below historical levels of investment in defense basic 
research. Those past investments played a critical role in enabling 
today's DOD to meet the Nation's defense needs through superior and 
cost-effective military technologies.

                                      DOD SUPPORT FOR BASIC RESEARCH (6.1)
                   [In millions; constant dollars determined using OMB's latest GDP deflator]
----------------------------------------------------------------------------------------------------------------
                                                                             Fiscal year--
                                                     -----------------------------------------------------------
                                                                                                1998      1999
                                                        1994      1995      1996      1997    estimate   request
----------------------------------------------------------------------------------------------------------------
Current dollars.....................................    $1,167    $1,227    $1,099    $1,032    $1,042    $1,111
Constant 1992 dollars...............................     1,111     1,138       997       958       907       948
----------------------------------------------------------------------------------------------------------------

    The main point I would like to make today, Mr. Chairman, is that 
the funding erosion in DOD's basic research programs must be stemmed if 
we're going to achieve our national security objectives into the 
future. We urge the subcommittee to begin restoring the buying power of 
defense basic research by providing DOD's request of $1.11 billion for 
the 6.1 account in fiscal year 1999. You will note from my chart above 
that the requested amount does not even bring funding up to the 
constant dollar value of last year's basic research budget. But we must 
start reversing the downward funding trend, and enacting the relatively 
modest proposed increase for fiscal year 1999 would be a crucial first 
step.
    Let me say a few words about what basic research means to the DOD. 
First of all, maintaining a robust long-term basic research program is 
essential to ongoing efforts to develop new technologies, improve 
existing ones, and employ them as effectively as possible in the 
service of national security.
    Secondly, some of the research supported through the 6.1 account is 
not as long-term as you might think. In many cases--and I'm thinking 
just of cases involving the mathematical sciences, which I know best, 
but this is no doubt true for other areas as well--university 
researchers have been brought in for special expertise to help solve 
real-time scientific and technical challenges faced by military 
personnel, the defense laboratories, or DOD contractors.
    And this leads me to perhaps the most critical point here. By 
engaging the Nation's research universities in defense-related 
problems, DOD ensures itself access to top researchers and the latest 
discoveries in pursuit of its R&D objectives. Not just today's 
researchers but the next generation as well. The support DOD provides 
for graduate students in defense-related research areas helps guarantee 
the production of mathematicians, scientists, and engineers who can 
contribute to meeting defense needs in the future.
    I would again refer to my first-hand knowledge of how valuable it 
is for DOD to maintain a productive relationship with universities for 
the reasons I've cited. At DARPA especially it is a specific goal to 
seek out academic researchers who can help solve defense-related 
problems and link them up with their counterparts in DOD laboratories 
and in industry to tackle both short- and long-term problems.
    The defense agencies that sponsor basic research--the Army Research 
Office (ARO) and the Office of Naval Research (ONR), as well as AFOSR 
and DARPA--have an excellent track record for making decisions about 
which areas are vital to DOD's technology goals and which researchers 
are best able to mine the scientific opportunities for contributions to 
national security. Rigorous internal decision-making processes guide 
these investments to ensure both scientific excellence and consistency 
with DOD's strategic priorities.
    The spending cuts in basic research have had a staggering effect on 
these agencies' ability to maintain the strength of their programs. In 
the mathematical and computational sciences, the scope of promising 
research that DOD has identified as relevant to its mission has been 
curtailed and whole thrusts of research have had to be eliminated in 
some programs. The opportunities lost are not insignificant.
    I'll mention the impact on another agency that is especially 
relevant to the mathematical sciences--the National Security Agency. 
The NSA is the Nation's largest employer of mathematical scientists, 
and of course its in-house research activities are highly classified. 
In 1984, NSA initiated a competitive grants program to support 
unclassified academic research in several mathematical fields, 
including cryptography, which, I'm sure you know, is important in the 
making and breaking of codes. The establishment of the program was a 
response to a sharp decline in the number of Americans earning advanced 
degrees in the mathematical sciences. Although that number has 
stabilized, U.S. citizens still earn less than half of the mathematical 
doctorates awarded by U.S. institutions. Yet the purchasing power of 
NSA's external grants program has been dropping steadily during the 
1990's; its budget will have declined by 50 percent in real terms 
between fiscal year 1990 and fiscal year 1998.
    Finally let me illustrate my remarks about DOD's investment in 
basic research and its contributions to the national defense with some 
examples. You are no doubt familiar with how quickly advances in 
computer hardware are developed and incorporated into the state-of-the-
art--computer speed doubles every one and a half years, for example. 
Less well known but equally important is the fact that new and improved 
mathematical algorithms, which are the basis of all computer software, 
also contribute to this remarkable trend. In fact, the fanciest 
computer hardware would be useless without equally sophisticated 
advances in mathematical modeling and algorithm development. Let me 
cite a couple of cases in which DOD support has facilitated 
breakthroughs in this area:
  --Research during the past 25 years has led to the development of 
        mathematical techniques underlying computer programs that can 
        easily manipulate geometric objects. The techniques are now 
        embedded in a wide range of applications, including the high-
        performance computers used in aircraft design and other modern 
        CAD/CAM packages that make rapid prototyping and computer-aided 
        design possible. One unexpected use of these techniques is in 
        film animation, as demonstrated in the widely popular movie, 
        ``Toy Story''. But these same tools are being used by defense 
        contractors to cut the development time and cost for new 
        aircraft and other major DOD purchases.
  --Mathematics can be used to model, or predict, how radar waves 
        behave when scattered off of surfaces such as aircraft bodies. 
        But the resulting equations are complicated, and getting 
        computers to solve them is not a straightforward process. 
        Advances in the development of computational algorithms that 
        can solve these equations are enabling the design and testing 
        of stealth technology in simulation--that is, on computers--
        before any actual fabrication begins. The modeling of radar-
        wave scattering continues to be a challenging mathematical and 
        computational problem, and we are just starting to see how 
        powerful the resulting tools can be.
    The potential impact of mathematical modeling and computational 
simulation on meeting the needs of DOD expands with advances in 
computers and in mathematics itself. For example, a recent DOD 
initiative in modeling, simulation, and control of fabrication 
processes for thin films promises to deliver new, more reliable and 
economical processing techniques for critical thin films. Thin films of 
semiconductor material have many uses in electronic components. Thin 
films of super-conducting material could lead to compact, high 
performance microwave filters for wireless and aerospace 
communications. But thin films are not easy to manufacture. Small 
variations in the composition or shape of the material can render a 
component useless. Getting machines to process thin films smoothly, 
evenly, and without variations at the microscopic level is a challenge 
that is being addressed with the application of mathematics. The strict 
requirements can be met with intelligent manufacturing using predictive 
computer models and model-based control of the manufacturing processes. 
To achieve this will require considerable research in mathematical 
techniques, including mathematical modeling and development of new 
numerical methods.
    I hope these examples demonstrate how basic research is an 
essential component of the defense enterprise. This concludes my 
testimony today. I truly appreciate this opportunity to talk to you 
about the impact of defense basic research. Again, thank you, Mr. 
Chairman. I'm pleased to answer any questions you might have.
STATEMENT OF DAVID A. WHISTON, D.D.S., PRESIDENT, 
            AMERICAN DENTAL ASSOCIATION
    Senator Inouye. Our next witness is Dr. David A. Whiston, 
President, American Dental Association.
    Welcome, Dr. Whiston.
    Dr. Whiston. Thank you very much, Senator Inouye. It is a 
pleasure to be here.
    As you mentioned, my name is Dave Whiston. I am President 
of the American Dental Association [ADA]. I practice dentistry 
across the river, in Arlington, Virginia. I appreciate the 
opportunity to be here.
    I would like to talk just briefly about two specific items. 
One is the flexibility of being able to offer multi-year 
contracts to military dental officers. And the second is the 
unique quality of military dental research.
    I want to thank you, first, though, Senator, and the 
subcommittee, for the great support you have given us over the 
past several years relative to pay parity issues--specifically, 
special pay issues and the accession bonuses. That was a great 
start on the recruitment side of the equation, where we have 
had some problems. Now we would like to address the retention 
side of the issue. We are having great problems with retention 
of Federal dental officers.
    In fact, now we are short in access of 300 offices. The 
projection over the next several years by DOD is that the 
shortage will double. And what we are seeing now is that after 
10 years, we are only seeing a retention rate of 26 percent. 
After 20 years, it is only 13 percent. And DOD's most 
conservative estimates indicate it should be at least 3 times 
that 13 percent level.
    It used to be, in 1982, the average Federal dental officer 
would remain in the service 11.8 years. Less than 15 years 
later, in 1996, they only stay in about 7 years. So there are 
some real problems, some real shortages that we see, much of it 
related to income, comparable income of Federal officers versus 
private practitioners.
    But the net effect is that of active duty personnel, one of 
seven are non-deployable for dental reasons. One of seven 
active duty personnel are non-deployable because of dental 
problems. What we would like to see, to impact this side of the 
equation, is at least the flexibility to be able to offer 
multi-year contracts, preferably 4-year contracts, to Federal 
officers, so that we could impact the retention side of the 
equation.
    We respectfully request an $8.6 million addition to the 
fiscal year 1999 budget, to be able to offer these multi-year 
contracts.
    On the dental research side--and just to briefly 
characterize that--military dental research is dental research 
that is not duplicated anywhere in the private sector. We are 
talking about dental research aimed at specific dental field 
equipment, research aimed at developing materials which are not 
environmentally sensitive, and which would impact the statistic 
now, which is a pretty glaring one, which is that 16 percent of 
all active duty personnel, 16 percent each year, must be 
evacuated for dental reasons.

                           prepared statement

    So, we realize you have great demands, specific demands, in 
the defense budget for critical defense dollars, and we 
understand that, but in order to address the recruitment and 
retention side of the equation and the preparedness side, 
relative to evacuations, we respectfully request your 
consideration of the $8.6 million relative to the flexibility 
of offering multi-year contracts, and $4 million in fiscal year 
1999 for the purposes of specific military dental research, 
again, to impact on that non-deployability side of the equation 
as well as the evacuation side of the equation.
    Thank you very much, Senator, for the opportunity to be 
here today.
    [The statement follows:]
                 Prepared Statement of David A. Whiston
    On behalf of the American Dental Association (ADA), thank you Mr. 
Chairman for the opportunity to testify on the fiscal year 1999 
Department of Defense (DOD) appropriations. I am Dr. David A. Whiston, 
the President of the ADA and a practicing dentist in Arlington, 
Virginia.
    The ADA is a professional organization that represents 
approximately 143,000 licensed dentists (75 percent of the profession) 
in the United States. The ADA seeks to advance the art and science of 
dentistry, and to promote high-quality dental care and the oral health 
of the public.
    Over the years the ADA has maintained a close liaison with the 
federal dental services which include all three Service branches, the 
Public Health Service, and the Veterans Administration. The Association 
is proud to represent the needs of our nation's federal dental 
officers.
    Mr. Chairman, I am here today to address two areas of concern for 
military dentistry: dental corps officer multi-year contracts, and 
military dental research funding.
Dental Corps Officer Multi-Year Contracts
    I commend this committee for the support it has provided federal 
dental officers. As you know, in the past two years the Congress has 
approved special pay raises and an accession bonus to alleviate severe 
recruiting and retention problems that exist in the Army, Navy, and Air 
Force dental corps, as well as the Public Health Service.
    Retention of military dental officers is a readiness concern for 
the Services. A 1997 study by the Office of the Assistant Secretary of 
Defense (Health Affairs) shows that retention is decreasing for every 
year group of dental officer. The aggregate retention has declined to 
26 percent at ten years of service and 13 percent at 20 years. The 
ideal force profile calls for 40-50 percent retention at 10 years and 
30-35 percent retention at 20 years.
    In 1982, a military dentist served an average of 11.8 years. In 
1996, the expected length of service slumped to 7.4 years. The high 
turnover rate contributes directly to a shortage of dental officers and 
causes turbulence in force management. Currently the Services' Dental 
Corps are short approximately 300 officers from the DOD authorized 
level. The study projects that this shortfall will grow dramatically to 
between 400 and 700 dentists in the next few years if nothing is done.
    Maintaining the authorized number of military dentists, 
particularly experienced personnel, ensures dental readiness of 
America's Armed Forces. The 1994 Tri-Service Comprehensive Oral Health 
Survey found 92 percent of military personnel required some form of 
dental care. An average of one out of seven active duty service members 
at the end of fiscal year 1996 were determined to be non-deployable due 
to dental problems. A recent symposium at Fort Hood, Texas, identified 
the lack of access to routine dental care as the number one health 
concern of soldiers.
    If declining rates of retention continue, it will lead to 
shortfalls in the availability of active duty dentists for deployment. 
This would impact directly on the provision of dental care for troops 
in garrison operations, conflict situations, and peacekeeping missions.
    The primary causes for retention problems are the lack of pay 
comparability with the private sector. In 1982, a military dentist 
earned approximately 82 percent of the reported income of private 
sector dentists. By 1996, that percent had dropped to 51 percent. This 
large pay gap exists throughout the career span of a military dentist.
    The 1997 Defense Authorization Act and Defense Appropriations Act 
provided funds to increase dental officer special pay for junior grade 
dental officers with less than 10 years of service. That legislation 
also provided for an accession bonus of $30,000 for new dental 
officers. While it is too early to ascertain the full impact of the 
increase and the bonus, preliminary evidence suggests the accession 
bonus will improve recruitment in the coming years.
    The 1998 Defense Authorization Act increased special pay rates for 
mid-career officers and provided for the use of multi-year contracts 
similar to those used for physicians as a retention and force 
management tool. Although no funds were provided for these two pay 
proposals, their passage provides the three Services (and the Public 
Health Service) a valuable tool to improve recruiting and retention 
problems.
    Mr. Chairman, the use of multi-year contracts for critical 
specialists will help the Services to obligate dentists for up to four 
years. Experience with the Medical Corps has demonstrated the success 
of these contracts. The Services need an additional $8.6 million in 
fiscal year 1999 in the military pay appropriations account (Army: $2.3 
million; Navy $1.6 million; and Air Force $4.4 million) to offer these 
multi-year contracts to its oral surgeons, orthodontists, 
periodontists, and endodontists.
Military Dental Research
    The mission of military dental research is to maximize and maintain 
operational readiness. This is accomplished by performing research and 
development to improve both preventive and interceptive care prior to 
deployment and forward dental care and management of maxillofacial 
injuries.
    Army and Navy dental research programs conduct basic and applied 
research and development to produce products for use in military 
environments that are not duplicated by civilian research and 
development efforts. The U.S. military dental research laboratories, 
the U.S. Army Dental Research Detachment (USADRD) and the Naval Dental 
Research Institute (NDRI), are located at the Great Lakes Naval 
Training Center, Illinois. They focus on R&D of new technologies that 
reduce lost duty time caused by dental disease or trauma in military 
populations.
    Areas of research emphasis include: epidemiology of dental disease 
and trauma, rapid diagnostic aids, new preventive technologies, 
improved dental field equipment (smaller, lighter, and lessened power 
requirements), dental materials that are insensitive to operational 
environments, and technologies to reduce the morbidity and mortality of 
oral and maxillofacial trauma.
    Mr. Chairman, on an annual basis 16 percent of deployed personnel 
experience a dental emergency requiring evacuation from their military 
unit, and 1 percent sustain oral and maxillofacial trauma. Studies have 
shown that the annual dental emergency rate during the Vietnam War was 
157 dental emergencies per 1,000 soldiers. During Operation Desert 
Shield/Desert Storm the annual rate of dental emergencies was 100 per 
1,000 Marines ashore. A recent RAND study (Army Medical Support for 
Peace Operations and Humanitarian Assistance (1996)) reported that 
military dentists were some of the busiest of all providers in recent 
humanitarian missions. As much as 20 percent of all outpatient visits 
were for dental care.
    These emergency rates occur in every deployment and operational 
environment and are unacceptable to line commanders. As you know, 
deployed personnel with severe oral pain and/or infection cannot 
perform military duties and may require evacuation to receive 
appropriate dental treatment. Evacuation from remote and isolated sites 
can be costly to the military and degrade operational readiness. The 
need for dental research and development to address dental readiness is 
therefore paramount.
    Unfortunately, the military biomedical R&D community undervalues 
this impact, as evidenced by disproportionate reductions in dental R&D 
funding and personnel authorizations. Army dental research funding 
decreased from $3.6 million in 1991 to $0.865 million in 1997. Program 
funding ceased in fiscal year 1998 and $677,000 had to be allocated 
from other medical research programs to support on-going dental 
research. This represents an 82 percent funding reduction since 1991. 
The Army laboratory has also experienced a 45 percent reduction in 
authorized personnel since 1991.
    Navy dental research funding has faced similar reductions--from a 
high of $2.2 million in 1994 to $1.1 million in 1998. This represents a 
50 percent reduction in just four years. Since 1992, Navy dental 
research has also experienced a 33 percent reduction in authorized 
personnel (from 57 to 38). These funding and personnel levels are 
absolutely inadequate to accomplish the mission of military dental 
research.
    Mr. Chairman, let me tell you of just a few of the significant 
dental research projects that Army and Navy dental researchers are 
working on.
  --Dental field equipment is being developed to reduce the size, 
        weight, and electrical requirements of the deployed dentist 
        while increasing treatment capability. Research projects 
        include fabricating and testing of an electric handpiece dental 
        field operating and treatment system, construction and testing 
        of a portable solar panel to recharge the battery for a dental 
        handpiece located in the Dental Emergency Field Set, and 
        evaluation of radiographic images captured on a digital sensor 
        and displayed on a laptop screen.
  --Field expedient dental materials are being developed that are less 
        sensitive to degradation during storage due to environmental 
        factors such as heat, cold, and humidity.
  --Single-dose, controlled release analgesics, antibiotics and 
        vaccines for use in deployed environments and to accelerate the 
        return to duty of battlefield casualties are being developed.
  --Gum or powder that prevents plaque buildup and thereby reduces 
        dental disease for deployed troops who are not able to perform 
        proper oral hygiene is also being developed.
  --Research projects related to determining the rates of dental 
        emergencies and dental trauma during deployment and determining 
        the rates of oral and maxillofacial trauma in personnel serving 
        in airborne and armor units are ongoing.
  --A new smokeless tobacco cessation program has been developed and 
        will evaluate the impact on readiness.
    Mr. Chairman, dental emergencies and trauma significantly impair 
operational readiness and sustainability. Increased dental research 
funding is needed to improve preventive and interceptive dental care 
prior to deployment, to improve forward support dental care, and 
management of oral and maxillofacial injuries. The Army and Navy needs 
$4 million in fiscal year 1999 ($2 million for the Army Dental Research 
Detachment and $2 million for the Naval Dental Research Institute), 
which is $2 million above fiscal year 1998 appropriated amounts, to 
continue these valuable dental research programs.
Conclusion
    The ADA recognizes the multitude of funding priorities Congress 
must reconcile, but believes that the requirements spelled out in this 
statement are urgently needed to maintain the oral health and readiness 
of military personnel. Funding for multi-year contracts will help 
insure a stable dental corps, improve recruiting and retention, and 
better balance pay inequities. Improved funding for dental research 
will help decrease dental emergencies and trauma significantly with the 
resultant improvement in operational readiness and sustainability. The 
Association respectfully requests that this subcommittee support the 
program enhancements discussed above.

    Senator Inouye. Doctor, where did you get those statistics 
on one out of seven are non-deployable?
    Dr. Whiston. One out of seven non-deployable is a statistic 
that I was given at the American Dental Association. My 
understanding is that it is from DOD. But I can get you the 
numbers on that.
    Senator Inouye. I am certain the committee would appreciate 
that.
    [The information follows:]
                      Letter From David A. Whiston
                                                      May 20, 1998.
The Honorable Daniel K. Inouye,
Ranking Member, Senate Appropriations Committee, United States Senate, 
        Washington, DC.
    Dear Senator Inouye: Thank you for the opportunity to appear before 
the Defense Subcommittee to highlight the need for appropriations for 
multi-year contracts for dental corps officers and increased funding 
for military dental research. Funding for these programs is important 
for the future of military dentistry and, more importantly, the 
readiness of our active duty forces.
    You asked for the precise source of two statistics quoted in my 
statement. The following are those cites:
  --``An average of one out of seven active duty service members were 
        determined to be non-deployable due to dental problems.'' 
        (Office of Secretary of Defense for Health Affairs Study, 
        1997); and
  --``Studies have shown that 92 percent of military personnel require 
        some form of dental care.'' (1994 Tri-Service Comprehensive 
        Oral Health Survey).
    I greatly appreciate your interest and offer to work with the 
American Dental Association to improve the oral health care of our 
troops. Toward that end, our ADA Washington Office staff will contact 
your staff for appropriate follow-up.
    Thank you very much.
            Sincerely,
                                  David A. Whiston, D.D.S.,
                                                         President.

    Senator Inouye. I did not realize it was that bad.
    Dr. Whiston. Yes, it is significant. It really is. Ninety-
two percent, Senator, of all active personnel have dental 
needs. And those can be addressed. But the ability to address 
those needs is decreasing as the retention problem increases. 
So we could see an increase to that one of seven.
    Senator Inouye. Ninety-two percent require dental care?
    Dr. Whiston. Yes, 92 percent, of some type.
    Senator Inouye. They are not watching the TV Crest ads?
    Dr. Whiston. Right. You are right. [Laughter.]
    Yes. They have not listened to some of your suggestions 
over the years, Senator.
    Senator Inouye. We would like to work with you to see how 
we can help in reducing these numbers.
    Dr. Whiston. Thank you very much.
    Senator Inouye. These are terrible.
    Thank you very much.
    Dr. Whiston. Thanks for the opportunity, Senator.
STATEMENT OF JEAN LOU CHAMEAU, DEAN OF ENGINEERING, 
            GEORGIA INSTITUTE OF TECHNOLOGY, ON BEHALF 
            OF THE ASSOCIATION OF AMERICAN UNIVERSITIES
    Senator Inouye. Our next witness is Dr. Jean Lou Chameau, 
Dean of Engineering, Georgia Institute of Technology.
    Dr. Chameau.
    Dr. Chameau. Senator, members of the committee, my name is 
Jean Lou Chameau, and I am the Dean of Engineering at Georgia 
Tech, in Atlanta. Georgia Tech is the largest engineering 
school in the country, graduating more than 2,000 engineers 
every year.
    I am testifying on behalf of the Association of American 
Universities, AAU, representing 62 research universities in the 
country; and the National Association of State Universities and 
Land-Grant Colleges, representing almost 200 public 
universities in the country.
    You have copies of my written testimony, which I will 
briefly summarize. I think it is more than fair to say that the 
technologies critical to winning the Cold War and America's 
successful campaign during Desert Storm owe their allegiance to 
university-based defense research. There are many examples, 
including semiconductors, phased-array radar for 
intercontinental ballistic missile defense, laser guidance 
systems, stealth design, and so on.
    These technologies make a difference for people in the 
field. A very good example was given when the global 
positioning system, or GPS, saved the life of Air Force Captain 
Scott O'Grady, after his F-16 was shot down over Bosnia.
    In my University, Georgia Tech, we conduct a significant 
amount of research that contributes to the defense mission. For 
example, Tech engineers are using acoustic-electromagnetic 
waves in new ways to detect both metallic and nonmetallic land 
mines. We are also developing what is called a smart T-shirt. 
It is basically a T-shirt with optical fibers, very cost 
efficient, about $25 to $30 to produce. And we provide medical 
personnel the ability to monitor a soldier's condition, 
including vital signs.
    University research also helps address emerging security 
issues such as terrorism, biological and chemical agents, and 
cybersecurity. There are many areas in the areas of 
telecommunications, miniaturization and other technologies. The 
DOD funding of university research concentrates in fields where 
advances are most likely to contribute to national defense and 
also to the mission.
    The DOD accounts for 60 percent of the Federal funding to 
electrical engineering, 55 percent for computer engineering and 
sciences, 41 percent for materials research. The DOD 
contribution to educating the next generation of engineers and 
scientists should not be underestimated. The DOD supports 45 
percent of federally funded graduate students in electrical 
engineering, 25 percent in mathematics, 48 percent in aerospace 
engineering. Our students get research training and become 
highly qualified scientists and engineers of the future, who 
are going to work at academia, industry, DOD, and Federal 
laboratories.
    The Department's budget for fiscal year 1999 provides a 
total of $1.1 billion for defense in 6.1 basic research. This 
represents about a 6.6 percent increase over last year. 
Similarly, there is an expected $3 billion budget for applied 
research, an increase of about 0.8 percent. We believe these 
budget projections will lead to a realistic and appropriate 
estimate of what will be needed to carry out a strong research 
program.

                           prepared statement

    Finally, DOD basic research funding has been used several 
times in the last few years to provide offsets for unrelated 
new expenditures. And we hope your subcommittee will not use it 
this year for this purpose.
    Thank you very much.
    [The statement follows:]
                 Prepared Statement of Jean Lou Chameau
    Mr. Chairman and members of the subcommittee: Thank you for the 
opportunity to testify today. My name is Jean Lou Chameau, and I am 
Dean of Engineering at the Georgia Institute of Technology. Georgia 
Tech is the largest engineering school in the country, graduating 
annually in excess of 2,000 engineers. I am testifying on behalf of the 
Association of American Universities, representing 62 premier research 
universities in the United States and Canada, and the National 
Association of State Universities and Land-Grant Colleges, representing 
195 public institutions of higher education across the United States.
    My purpose this morning is to talk about the scientific and 
technological breakthroughs that have resulted from university research 
supported by the Department of Defense (DOD). I will emphasize how 
important these breakthroughs are to our national security and 
readiness for future military conflicts. I will also talk about the 
importance of DOD Basic and Applied Research to key academic 
disciplines; to fundamental discoveries in science, engineering and 
mathematics; and to the training of the next generation of scientists 
and engineers. Finally, I will briefly review the recent history of 
funding reductions in these programs, and I will urge that these 
programs not receive additional cuts, either to offset supplemental 
fiscal year 1998 appropriations, or in the regular fiscal year 1999 
appropriations process.
    As you know, Basic and Applied Research are funded under program 
elements 6.1 and 6.2 in the Research, Development, Testing and 
Evaluation section of the Department of Defense appropriation. The 
Army, Navy, Air Force and the ``Defense-wide'' account under the Office 
of the Secretary all receive separate appropriations for these 
programs. Universities play the largest role in basic defense research, 
receiving more than 60 percent of this funding (program element 6.1). 
They also receive substantial funding for applied defense research and 
advanced technology development (program elements 6.2 and 6.3, 
respectively).
           breakthroughs from dod-funded university research
    Many crucial defense technologies have emerged from fundamental 
research conducted on university campuses. Among these are: radar, 
nuclear power, digital computers, semiconductor electronics, lasers, 
fiber optics, night vision, vaccines and drugs for malaria and other 
tropical diseases, inertial guidance, the Global Positioning System, 
stealth and other advanced materials, computer networking (ARPANet, 
forerunner of the Internet), and computer-based visualization systems 
for training and for planning and conducting operations.
    As just one example, the remarkable usefulness of the Global 
Positioning System (GPS) was dramatized by the rescue of the Air Force 
Captain Scott O'Grady after his F-16 was shot down over Bosnia in June 
1995. The portable GPS receiver in his life vest allowed rescue 
helicopters to land at his hidden position and rescue him in a few 
minutes despite hostile troops nearby. One of the key technologies that 
makes GPS possible, the ultra-precise atomic clock, was created in the 
1950's by university researchers intent on studying Einsteinian space-
time relativity (advances in satellite technology, miniaturization, and 
mathematics were also necessary). Atomic clocks improved during the 
1960's, and in 1973, DOD decided to develop GPS. The system of 24 
satellites needed for GPS was launched between 1989 and 1993.
    The Georgia Institute of Technology (GIT), including the Georgia 
Tech Research Institute (GTRI), received approximately $84 million in 
Department of Defense grants and contracts in 1997. These funds involve 
a full range of activity from basic research through developmental, 
test and evaluation work. Some of the highlights of this research in 
the basic science and engineering disciplines at Georgia Tech include 
the following projects:
Molecular Design Institute
    The Office of Naval Research (ONR) supports molecular synthesis and 
processing research, making it possible to tailor new materials, atom 
by atom, to achieve a desired set of properties. This molecular 
manipulation at the atomic level into material nanostructures is 
fundamental research important for meeting future Navy requirements for 
sophisticated surface and underwater vessels, weapons and equipment. 
Georgia Tech is one of two centers in the country currently involved in 
this advanced research.
Acousto-Electromagnetic Sensor for Locating Land Mines
    The Army Research Office currently sponsors basic research at 
Georgia Tech in the area of land mine detection. The objective of this 
project is to investigate new, innovative techniques for detecting and 
locating both metallic and non-metallic land mines. Presently, non-
metallic land mines are almost impossible to detect with existing 
systems. Georgia Tech electrical engineering researchers are now 
investigating a technique that uses both acoustic and electromagnetic 
waves in a synergistic manner to detect these mines. Land mine 
detection is a high priority for DOD and this work should lead to new 
methodologies for protecting U.S. troops from these deadly devices.
Intelligent Turbine Engines
    At Georgia Tech the Army sponsors a five-year program that 
investigates the use of modern control approaches to improve the 
performance of gas turbines that are employed in helicopters and tanks. 
This research program investigates control approaches that will reduce 
the number of needed compressor stages. In parallel efforts, we are 
using control approaches to improve the performance of the gas 
turbine's combustor by reducing the frequency at which the combustion 
process unexpectedly extinguishes and reducing the volume required for 
complete combustion. It is expected that the improvements provided by 
this program will reduce the gas turbine's fuel and improve its 
reliability.
Conformal Aperture Velocity Sonar/Conformal Active Sonar System
    The goal of the CAVES/CACTISS program at Georgia Tech, sponsored by 
the Office of Naval Research, is to revolutionize submarine SONAR 
systems and implementation philosophies. The Conformal Aperture 
Velocity Sonar (CAVES) system consists of a hull mounted, large 
aperture, broad band receiving SONAR system that will greatly enhance a 
submarine's ability to make detections in open water and in shallow 
water environments. The Conformal ACTIve Sonar System (CACTISS) is a 
hull mounted, large aperture, broad band transmitting sonar system that 
will work in conjunction with CAVES to provide a submarine with the 
capability to communicate with the battle group, hunt mines, and jam 
enemy torpedo sonars. Following a successful test of small aperture 
CAVES and CACTISS arrays in late 1996, preparations are now underway 
for full aperture CAVES and CACTISS arrays to be tested at quarter-
scale at the Navy's Intermediate Scale Measurement System located at 
Lake Pend Oreille, Idaho in March 1999.
Active Control of Combustion Instabilities in Missiles
    The Air Force supports a three-year effort at Georgia Tech to 
investigate the use of secondary fuel injection to ameliorate unstable 
combustion processes. Instabilities in missile combustion systems have 
hindered the development of practically every missile system to date 
(and many other propulsion systems) and resulted in program delays and 
cost overruns. By use of a novel fuel injector, developed and patented 
under this Air Force program, we are demonstrating that using properly 
timed secondary fuel injection can prevent and/or eliminate these 
undesirable instabilities, thus preventing future programs delays and 
cost overruns.
Army Rotorcraft Center of Excellence
    The Army is a sponsor of Georgia Tech's Rotorcraft Center of 
Excellence operated by the School of Aerospace Engineering. This center 
is the largest of 3 national Centers of Excellence in rotorcraft 
technology and supports work important to the missions of each of the 
defense services operating rotorcraft vehicles. The center performs 
research on aerodynamics, aeroelasticity, dynamics, engines, composite 
materials, structures, flight mechanics, controls, and put it all 
together in systems design and engineering education.
                  being prepared in an uncertain world
    With future threats to national security so uncertain, maintaining 
technological superiority will require a strong continuing research 
effort. The armed forces today not only must be ready to fight in 
conventional regional wars like the Gulf War; they also must be ready 
to undertake peacekeeping missions in hostile situations and to defend 
against unconventional threats such as terrorism, biological and 
chemical agents, and computer sabotage.
    DOD-sponsored university research is an important source of new 
knowledge and innovative solutions to these problems. Incremental 
adaptations of existing weapons and equipment are not necessarily 
suitable in the new world situation. University researchers are 
investigating new approaches to assist likely future missions--for 
example, small, highly mobile units operating in ambiguous situations 
far from their bases.
    Rapidly developing computer-based information technologies, coupled 
with advanced sensors, promise to revolutionize warfare. University 
scientists and engineers are working to exploit the information 
revolution faster and better than the rest of the world. Research now 
being conducted on campus into new visual reality and computer 
visualization technologies will permit future U.S. forces to dominate 
the situation with superior information and communications. DOD 
currently provides more than half the federal funding of university 
research in computer sciences and electrical engineering.
    At least 100 million land mines are buried in 62 countries, 
hindering regional stability and endangering U.S. troops on 
peacekeeping missions. DOD supports university research into novel 
approaches, such as using new combinations of sensors and nonlinear 
signal processing techniques to improve detection of land mines, and 
using advanced acoustics and neural network signal processing 
techniques to locate mines under sediment in shallow water.
              investing in american science and technology
    Supporting university research benefits DOD in many ways. It 
produces important advances in knowledge. It helps keep top scientists 
and engineers involved in defense research. Not least, the students who 
get hands-on research training become the highly qualified scientists 
and engineers of the future who go on to work in academia, industry, 
and federal laboratories.
    DOD is the third largest federal funder of university research 
(after the National Institutes of Health and the National Science 
Foundation). The funds are awarded under competitive merit review 
procedures to assure high quality. Nearly 350 universities and colleges 
sponsor DOD research and development.
    Unfortunately, last year, the science and technology budget at DOD 
hit a 35-year low, after adjusting for inflation. Basic research is 
down by $350 million in just the last five years. I am concerned that 
the scientific and engineering communities will find resources drying 
up for promising areas of inquiry. In particular, I am concerned about 
the effect that shrinking funding will have on those disciplines that 
are most heavily funded by the Department, since other sources may not 
easily be found to keep these disciplines healthy.
    DOD's funding of university research is concentrated in fields 
where advances are most likely to contribute to national defense. As a 
result, DOD accounts for 60 percent of the federal funding for 
electrical engineering, 55 percent for computer engineering and 
sciences, 41 percent for metallurgy/materials engineering, and 33 
percent for oceanography.
    DOD also supports a high percentage of graduate students in 
relevant field--45 percent of federally funded graduate students in 
computer engineering and sciences, 25 percent of those in mathematics, 
48 percent in aerospace engineering, 42 percent in electrical 
engineering, and 30 percent in metallurgy/materials engineering. These 
graduate students go on to meet America's need for a trained and 
scientifically literate workforce, whether in the military, the 
government, in defense and civilian industry, or in academia.
    The Department's budget request would provide a total of $1.11 
billion for Defense 6.1 (basic research) programs in fiscal year 1999, 
including programs funded under the Office of the Secretary of Defense, 
as well as Navy, Army, and Air Force research programs. This represents 
an increase of 6.6 percent over the final funding level for fiscal year 
1998. According to the Department's RDT&E Programs (R-1) report, 
applied research would receive a total of $3.02 billion, an increase of 
0.8 percent over fiscal year 1998.
    I believe these budget projections represent a realistic and 
appropriate estimate of what will be needed to carry out a vigorous 
research program in the coming year, and I hope you will approve them 
in the fiscal year 1999 appropriation.
    Finally, I understand that this committee may be called upon to 
identify offsets for a supplemental appropriation in the near future. 
DOD basic research funding has been used several times in the last few 
years to provide offsets for unrelated new expenditures, and I hope 
your subcommittee will not use it this year for this purpose.
    Thank you again for the opportunity to testify, and I would be 
happy to answer any questions you may have.

    Senator Inouye. Thank you very much, Dr. Chameau. I note 
one of the problems you cite is the 100 million land mines 
found in 62 countries. Is the Georgia Institute of Technology 
working on this at this time?
    Dr. Chameau. Yes. We have a major program to detect land 
mines using acoustical and electromagnetic waves.
    Senator Inouye. What is the status now?
    Dr. Chameau. The status of those programs are that I think 
there is a very high likelihood that you could have some 
prototype available within a year.
    Senator Inouye. Within a year we should have something that 
could be used in the field?
    Dr. Chameau. Yes.
    Senator Inouye. We look forward to that, sir. Thank you 
very much.
    Now may I call upon Chief Master Sergeant Mark Olanoff, 
United States Air Force Retired, the legislative director of 
the Retired Enlisted Association.
STATEMENT OF CHIEF MASTER SERGEANT MARK H. OLANOFF, 
            USAF (RET.), LEGISLATIVE DIRECTOR, THE 
            RETIRED ENLISTED ASSOCIATION
    Sergeant Olanoff. Thank you, Senator Inouye. I would like 
to thank you and Senator Stevens for allowing the Retired 
Enlisted Association to testify before your subcommittee, and 
we represent over 100,000 members active reserve and retired 
and their families, and in my statement I have detailed a lot 
of the different programs we requested you look at for fiscal 
year 1999, but I am going to concentrate on military health 
care because that is our number 1 concern, but I just wanted to 
reflect back very quickly to what Mr. Dugan said from the 
American Legion.
    It is very ironic that we have already transferred $150 
billion out of the defense budget and now we have to come to 
you to lobby to put money back. It is just sad that we have to 
do that, and maybe next year and some of the future years we 
can look at some of these programs and try to fund them before 
we transfer all the money after we close the bases instead of 
after the fact.
    As I said, Senator Inouye, our number 1 priority is health 
care, and due to the downsizing of DOD budgets, and as well as 
the impact of the base realignment and closure on military 
retiree communities, finding access to health care is our 
number 1 priority.
    This trend of military treatment facilities either being 
downsized in staff or closed due to BRAC creates confusion 
among retirees that reside in those given areas where to access 
health care, receive their prescription drugs, and what 
happened to the promise of the health care that we were told 
when we decided to make the military a career?
    The question is how can we answer these and plan on 
providing health care for retirees now and in the future? You 
might recall last year I testified before the committee and 
stated that providing the Federal employee health plan, which 
is the same plan that Congress has, and their staff, to 
military retirees is one part of the overall solution, which is 
treated as our number one legislative priority.
    We appreciate the support of you and the other Members in 
this room that supported the medicare subvention test program, 
but as I am sure you are aware, that has been delayed due to 
requirements of the Health Care Finance Administration and site 
locations, but hopefully in September this program will start.
    As we anticipate, the success of this program TREA knows 
that this program fully implemented will only resolve 
approximately 33 to 40 percent of the over 1.2 million that are 
over 65 years old, and I have attached a GAO report in my 
testimony that states that the military treatment facility 
capacity is only another 75,000.
    Therefore, to continue meeting the needs of the rest of the 
program we ask you to support one of the bills that is out 
there, Senate bill 1334, of which Senator Bond from Missouri is 
the sponsor, and it currently has 64 cosponsors. Many of the 
people on this committee are cosponsors of that bill.
    And, as was alluded to earlier, the Senate mark came up 
with a test and also a couple of other provisions, a three-
prong approach, but the funding in that is not enough. It is 
only $60 million.
    And we ask that you and this committee come up with a way 
to try to expand on Senator Bond's original bill, which would 
only have two locations, and we think that if we could have at 
least six locations then maybe we would get a better 
demonstration, or at least we would know how the program works. 
To have what the Senators recommended is a step in the right 
direction, but we think we need more than that.
    As you are aware, Secretary Cohen is considering two more 
rounds of BRAC in 2001 and 2005, so we want that now to test 
the Federal Employees Health Benefits Program [FEHBP] in order 
to meet the challenge of providing health care to our military 
retirees for the future.

                           prepared statement

    Again, Senator Inouye, I would like to thank you very much 
for allowing the Retired Enlisted Association to provide their 
views.
    Senator Inouye. Sergeant, I can assure you that at 
tomorrow's special meeting with the Secretary this will be an 
item on the agenda.
    Sergeant Olanoff. Thank you, Senator.
    Senator Inouye. Thank you, sir.
    [The statement follows:]
      Prepared Statement of Chief Master Sergeant Mark H. Olanoff
    Mr. Chairman, on behalf of The Retired Enlisted Association's 
(TREA) National President, Technical Sergeant David Pahl, U.S. Air 
Force (Ret) and Auxiliary President Ethel Hale, and over 100,000 
members and auxiliary, we appreciate the opportunity to present 
testimony to this subcommittee concerning the fiscal year 1999 National 
Security Appropriations. TREA is a federally chartered organization 
representing retired, active, guard, reserve and family members who are 
serving (career military) or have served (and are now retired) in every 
component of the Armed Forces of the United States: Army; Marine Corps; 
Navy; Air Force; and Coast Guard.
    I am Chief Master Sergeant Mark H. Olanoff, U.S. Air Force (Ret), 
TREA's Legislative Director.
                          health care problems
    With the continued down sizing of the Department of Defense (DOD) 
budget and the impact of Base Realignment and Closures (BRAC) in 
military retiree communities, retirees are having increasing difficulty 
in accessing health care. This has lead to a decrease in staff in 
military treatment facilities (MTF) to meet the needs of the retiree 
community. Further, the amount of ``Space Available'' care has been 
curtailed due to these reasons.
    As you are no doubt aware, military retirees over the age of 65 are 
forced out of the CHAMPUS/TRICARE system onto Medicare. The only other 
access for health care is through ``Space Available'' care at MTF's for 
retirees over the age of 65. Today, these Medicare eligible retirees 
are left wondering where they will receive their health care.
    Retirees who live in non-catchment areas or areas affected by 
limited access to health care due to TRICARE limitations need 
alternatives for their health care needs. This group of retirees should 
not lose their benefits because of where they decide to live.
    You know about the promise of guaranteed lifetime health care for 
military personnel upon 20 years of active duty service or at age 60 
for Reserve or National Guard service. This is and was a very powerful 
recruiting inducement. Many of our members want to know where the 
benefits are now?
    Many military retirees feel as if the government lied to them. They 
believe that their promised benefits have been taken away purely for 
political reasons. I would like to speak for all retirees right now and 
offer some solutions to the health care problem.
                           solution 1--fehbp
    There is legislation pending in both the Senate and House to create 
a demonstration program to allow Medicare-eligible military retirees to 
enroll in the Federal Health Employee Benefits Program (FEHBP), H.R. 
1766 and S. 1334. TREA supports this program as another option to 
improve access to health care for military retirees. Our retirees have 
stated that they are willing to pay for the opportunity to enroll in a 
quality health care program, FEHBP. This is the same health care system 
that covers all Federal employees, including members of Congress and 
their staffers. Military retirees are the only group of Federal workers 
who lose their employer sponsored health care benefit when becoming 
eligible for Medicare. Why should there be a difference if an employee 
wears a uniform or a suit? We want equality.
    According to the definition by the Department of Veterans Affairs, 
all enlisted retirees are considered ``indigent veterans'', because no 
enlisted retiree receives a gross retirement of more than $26,481 (for 
1 dependent). This has been used as an argument against the FEHBP 
Demonstration. However, many of our enlisted retirees have successful 
second careers, by taking advantage of benefits like the G.I. Bill for 
college. We understand that health care is not ``free'' and we are 
willing to pay for greater access. But many of our retirees did not 
have all of the retirement options (for example IRA's, Roth IRA's, 
Education IRA's, 401K's, mutual funds, etc). I want to speak for them 
right now and Congress provide FEHBP as one choice to access care.
           solution 2--full implementation of dod subvention
    TREA would like to express its sincere thanks to the Senate for 
supporting the Medicare Subvention demonstration program with the 
Department of Defense. We now would like to see the program expanded to 
a nation-wide program. Many of our Medicare-eligible retirees have 
received letters from hospitals stating that ``space-availability'' no 
longer exits. We believe that a small investment for Medicare-eligible 
retirees is necessary to provide health care to those who really need 
it. Allowing as many Medicare-eligible military retirees to use 
Medicare at MTF's will provide retirees yet another option for health 
care. Though this is not the complete solution to the health care for 
military retirees, because it would only meet the needs of 33 percent 
of the 1.2 million retirees over 65.
                 solution 3--medicare part ``b'' waiver
    H.R. 598 and S. 912, which are pending in both the House and 
Senate, authorizes the waiver of the penalty for not enrolling in 
Medicare Part ``B'' for Medicare-eligible military retirees. Retirees 
were counseled not to enroll in Part ``B'' because it would not be 
necessary because they resided near MTF's to access their free health 
care. These retirees should not be punished with late enrollment fees 
due to the fact that the local MTF has closed. The issue must be 
addressed now as the Secretary of Defense is planning two additional 
rounds of BRAC for 2001 and 2005.
    We believe that the small investment for DOD Subvention and FEHBP 
along with the waiver of enrollment penalties will restore health care 
benefits for our Medicare-eligible retirees and allow the employer 
(Uncle Sam) to receive some needed creditability when it comes to 
keeping promises.
       reasons dod is accountable to correct health care problems
    Mr. Chairman, the time has come to hold the Department of Defense 
accountable for the current state of military retiree health care. The 
Fiscal Year 1997 Defense Authorization Act Report, to accompany S. 
1745, directed DOD to conduct a study on the cost and feasibility of 
FEHBP to military retirees over 65 no later than March 1, 1997. 
Further, the Fiscal Year 1998 Defense Authorization Act Conference 
Report Section 712, directed the Secretary of Defense to prepare a plan 
for the expansion of TRICARE Prime not later than March 1, 1998. Also, 
Section 752 provides a Sense of the Congress that Congress and the 
President shall take steps to address the availability of health care 
for such retirees within two years. Further, the fiscal year 1998 
Defense Appropriations Conference Report directs the Defense Department 
to submit a report no later than March 1, 1998 on its plans for all 
phases of Medicare Subvention. Also, the Secretary of Defense in 
consultation with the Office of Personnel Management is required to 
submit a legislative proposal to implement a limited FEHBP 
demonstration program. As these deadlines pass, we are still waiting 
for DOD to meet these report deadlines. Now, is the time for action.
    I am sure that you are aware of the lawsuit that has been filed in 
the Federal District Court in Florida regarding military health care. 
The initial ruling allows two enlisted military retirees who enlisted 
prior to June 7, 1956 (effective date of space available health care) 
to sue the government under the Little Tucker Act. This Act allows each 
retiree to collect damages of $10,000. Also, a ruling will be made to 
determine if this lawsuit can be expanded to a ``class action 
lawsuit''. If this lawsuit is upheld, billions of dollars will be 
needed for the millions of military retirees or their survivors. Is 
this the proper method to solve disputes over promised retirement 
benefits? I hope not or more lawsuits will occur. Mr. Chairman, where 
are these studies and proposals? It is time for accountability, 
oversight, the end of report language, Sense of the Congress, studies, 
committees and other rhetoric. We want action now.
    DOD has stated that it would not be opposed to a limited test of 
FEHBP in Non-Prime areas. GAO Testimony by Stephen P. Backhus on 
February 27, 1997 (GAO/T-HEHS-97-84) page 3 states ``Between 1987 and 
1997, the number of older retirees increased by about 75 percent, to 
1.2 million; and they are projected to outnumber active-duty personnel 
in the future. These changes has significantly reduced the availability 
of care for retirees in DOD facilities''. Further, GAO Report HEHS-97-
134 to the Chairman and Ranking Member of the National Security 
Personnel Subcommittee page 2 states ``Finally, relatively few retirees 
(about 75,000) could be accommodated by subvention at military medical 
facilities because of facility capacity and financial constraints''. On 
page 9 ``the basis of the number of retirees living near military 
facilities with sufficient capacity to operate a subvention program, we 
estimated that about 75,000 older retirees could participate nationwide 
if the subvention program was offered at all but DOD's smallest 
hospitals''. Although DOD expects to care for additional Medicare 
eligibles in the TRICARE Networks, it is clear that all Medicare 
eligibles will not be served and that another option is needed.
    We believe that the solution for the problems surrounding retiree 
health care lie in a combination of FEHBP and DOD Subvention. In return 
for legislation mentioned above for the Medicare-eligibles, we and many 
other military associations, pledge to you that we will prepare the 
future retirees for continued health care after retirement. Just as 
other civil servants have the option to keep this benefit (and pay the 
premium), we will prepare the future retirees to pay for this benefit. 
This provides equality to all federal workers whether military or 
civilian. Finally, the two largest veterans organizations, The American 
Legion and The Veterans of Foreign Wars have resolutions supporting our 
position.
                          retiree dental plan
    This program has been very popular, however, DOD did not provide 
for the opportunity for beneficiaries to enroll in a plan that would 
cover bridges, crowns, and dentures. Since many older retirees need 
these types of dental procedures, recommend DOD be directed to bid a 
plan that will include them. Also, spouses of military retirees are not 
allowed to enroll in the new dental plan unless the military sponsor 
enrolls. Some military retirees use the VA for their dental benefits 
and do not need to enroll in the Retiree Dental Plan. TREA requests 
Congress recommend legislation that corrects this inequity.
                           concurrent receipt
    The issue of concurrent receipt of military retired pay and VA 
disability payment. Currently, there is an offset dollar for dollar in 
VA disability and military retirement. There is legislation pending in 
the Senate (S. 657) which would address this inequity by allowing 
partial restoration of retired pay. Many of our retirees are severely 
disabled and unable to work. Is it fair that their retirement pay is 
therefore reduced? No other disabled retired veteran has such an offset 
of their retirement pay, only the military retiree.
                      survivor benefits plan (sbp)
    Current law requires a survivor of a military retiree to have their 
pension offset at age 62 due to the eligibility of Social Security. We 
believe this law punishes our retirees.
    This is not a ``free'' benefit. Our retirees pay premiums to 
protect their survivors with 55 percent of their retired pay. Whether a 
survivor receives Social Security should not be a factor as SBP allows 
retirees more choices to provide for beneficiaries. Further, this 
offset does not apply to any other federal workers--again we demand 
equality. Last year, legislation was signed into law which gave 
service-members the opportunity to withdraw from the SBP. By 
withdrawing, however, one losses the guarantee of a pension for their 
survivor. Presently, there is a bill in the House of Representatives 
(H.R. 3107) that will provide a paid up policy for military retirees 
who have paid SBP premiums for 30 years and reach age 70, whichever is 
later. TREA recommends adoption of SBP ``paid up'' premiums.
                           other ``benefits''
    During the deliberations of BRAC, the impact of military retirees 
does not seem to be a very important issue. Secretary Cohen has already 
been ``Lobbying'' for more Base Closures to re-invest in modernization. 
What about the military retiree who rely on base facilities for health 
care? Why does DOD wait for bases to close and then try to solve the 
health care problem? We believe a plan must be in place to resolve 
retiree health care before a base closes. Remember, military and 
retired pay is based on a concept called ``Regular Military 
Compensation'' (RMC). Health Care, Exchange and Commissary benefits are 
included in RMC. When a base or post is closed, the military retiree is 
not compensated for this loss of RMC. Please remember to think of us 
when these decisions are made.
                        reserve and guard issues
    Many of our members are serving or have served as citizen-soldiers. 
TREA recommends that members of the guard and reserve be given the same 
commissary benefit as their active duty and retired counterparts. 
Again--equality to all, regardless of current status.
    Also, another issue of great concern is the Reserve/Guard 
Mobilization Insurance. This benefit was canceled in the Fiscal Year 
1998 Defense Authorization Act. We believe to attract and maintain a 
viable reserve component that mobilization insurance is an important 
ingredient to retain quality citizen-soldiers. Further, TREA recommends 
that active and retired reserve component members be authorized to 
travel ``Space-A'' unrestricted. We believe if a seat is available and 
not filled, then reserve component members and their spouse should be 
permitted to fly (CONUS and Overseas). We are not advocating any 
changes to the current ``Space-A'' priority system. Finally, TREA 
supports FEHBP for personnel on active duty tours (either Title 10 or 
Title 32 Active Guard Reserve) as many of these full-time reserve 
component personnel are not located near a MTF.
                               conclusion
    Would you work for an employer who makes promises for the future 
and then does not deliver? Many of our members made their life plans 
based on the promises made to them at the time of entry into the 
military. We believe a combination of TRICARE, DOD and VA Subvention 
and FEHBP will solve the access problem for all military retirees. Lets 
fix this problem now so we can all move on to the other important 
issues that must be solved.
    Mr. Chairman, I would like to thank you and the Committee for 
giving The Retired Enlisted Association the opportunity to present its 
views and solutions on the important subject of military retirees and 
their ``earned'' retirement benefits.
STATEMENT OF JANE WEISENBERG, VICE PRESIDENT COMMUNITY 
            PROGRAMS, CHILDREN'S HOSPITAL AND HEALTH 
            CENTER, SAN DIEGO, CA
    Senator Inouye. Our next witness is the vice president of 
Community Programs, Children's Hospital and Health Center, San 
Diego, Ms. Jane Weisenberg. Welcome to the committee.
    Ms. Weisenberg. Thank you, Senator, for this opportunity to 
testify today in support of the Marine Corps new parents 
support program, and thanks to this committee for its generous 
support of this program over the past 5 years.
    Your recognition of this project as worthy of Federal 
support has helped thousands of military families by providing 
a program whose aim is to prevent the suffering of domestic 
violence and child maltreatment and abuse. There continues to 
be a critical need for family support programs for military 
personnel.
    Military families face uniquely stressful and uncertain 
times. Military service members tend to be younger, more likely 
to be married, and receive lower pay than their civilian 
counterparts. Military families lead a transient existence. 
Most move at least every 3 years, ripping the military family 
from the support network of friends and relatives that civilian 
families rely on to get through tough times.
    The long absences of spouses, lengthy cruises, battlefield 
exercises, and peacekeeping missions, add to familial stress. 
Because military families are separated from their extended 
families they lose a wealth of knowledge and support regarding 
raising their children. The new parents support program offers 
parenting classes, such as Daddy's Baby Boot Camp to help new 
parents learn the necessary skills to care for a child, and the 
new parents support program has professional, experienced 
nurses and social workers who can visit the home to help 
families learn what they need to do to raise a child in a 
nurturing, caring environment.
    The new parents support program was developed and modeled 
from a demonstration project at Camp Pendleton, run by 
Children's Hospital in San Diego. Some aspects of the program 
are available to all new parents, and other services are 
targeted at families identified to be at high risk, or who have 
a known instance of child abuse.
    New parents support program was made a part of the 
coordinated community response, a comprehensive U.S. Marine 
Corps system to address family violence. Since 1992, Children's 
Hospital in San Diego has offered new parents support programs 
at all U.S. Marine Corps bases, including Yuma, 29 Palms, 
Barstow, El Toro, Tustin, Camp Pendleton, MCRD, Miramar, Camp 
Lejeune, New River, Cherry Point, Parris Island, Beaufort, 
Quantico, Henderson Hall, Okinawa, Iwakuni, and your own 
Kaneohe Bay.
    Programs of this nature play an integral role in the 
military readiness by ensuring the stability of military 
families. We are requesting continued support for the new 
parents support program. We are requesting $5.6 million for the 
Marine Corps new parents support program in the fiscal year 
1999 appropriations bill.
    We would also like to go on record as being supportive of 
the other new parents support programs at the other Armed 
Services. New parent support programs have worked well, and we 
strongly urge that all new parents support programs be 
adequately funded.

                           prepared statement

    Thank you, Mr. Chairman, and if you are interested in 
participating or observing any of our programs I would be happy 
to arrange that.
    [The statement follows:]
                 Prepared Statement of Jane Weisenberg
    Mr. Chairman, my name is Jane Weisenberg and I am the Vice 
President Community Programs at the Children's Hospital and Health 
Center in San Diego, California. Thank you for the opportunity to 
submit testimony for the record regarding the New Parent Support 
Program. At the outset, I would like to thank the Committee for its 
generous support for this project over the last five years. Your 
recognition of this project as worthy of federal support has helped 
military families since the program's inception in 1993.
Critical Need
    There continues to be a critical need for family support programs 
for military personnel. Military families face uniquely stressful and 
uncertain times. Military service members are younger, more likely to 
be married, and receive lower pay than their civilian counterparts.
    Military families lead a transient existence which also contributes 
to the problem of domestic violence. Most move at least every three 
years, ripping the military family from the support network of friends 
and relatives that civilian families frequently rely on when times get 
tough. The long absences of spouses, lengthy cruise, battlefield 
exercises or peacekeeping missions, add to familial stress. Because 
military families are separated from their extended families, they lose 
a wealth of knowledge and support regarding raising children. The New 
Parent Support Program offers parenting skills classes, home 
visitations and helps to establish support networks to fill this void.
United States Marine Corps Program
    The New Parent Support Program was developed and modeled from a 
demonstration program at Camp Pendleton, California, run by the 
Children's Hospital Center for Child Protection in 1990. It 
subsequently was made a part of the Coordinated Community Response, a 
comprehensive U.S. Marine Corps (USMC) system to work with family 
violence. The program was brought to the attention of Congress in 1992, 
and the decision was made to establish and staff the program at all 18 
USMC major bases and to test its viability for other branches of the 
Service. Since 1993, the New Parent Support Program has been 
successfully implemented on all 18 major USMC base:

Yuma, AZ
29 Palms, CA
Barstow, CA
El Toro, CA
Tustin, CA
Camp Pendleton, CA
MCRD, San Diego, CA
Albany, GA
Kaneohe Bay, HI
Camp LeJune, NC
New River, NC
Cherry Point, NC
Parris Island, SC
Beaufort, SC
Quantico, VA
Henderson Hall, VA
Okinawa, Japan
Iwakuni, Japan

    Since this time, services have also expanded to include new 
installations such as Miramar, California.
    The New Parent Support Program uses a combination of nurses and 
social workers to provide comprehensive home visitation services to 
families identified at risk for abuse and/or neglect. Additionally, 
infant parenting and child education classes are offered to all 
personnel located at each base. Home visitors provide support and 
advocacy and link client families to military and civilian adjunct 
services. The New Parent Support Program delivers three levels of 
service:
    Level 1.--Level 1 services are community based primary prevention 
activities including parent education classes, infant education 
classes, support groups, playmorning, and a wide variety of site-
specific specialty classes tailored to meet the individual needs of 
each site. Any active duty service member or family member of the 
military community is eligible for Level 1 services. Average 
participation is 9.8 persons/activity, and over 30 percent of the 
families participating in the standard 18 week parent education 
curriculum had both mother and father attending the classes.
    In addition to the community-based primary prevention activities, 
the New Parent Support Program also offers primary prevention Level 1 
home visits by a registered nurse to all pregnant women on each 
military installation. Level 1 home visits begin in the third trimester 
of pregnancy and may continue until six months post partum. Any risk 
identified during these home visits automatically elevates the Level 1 
family to on-going Level 2 or 3 services.
    Level 2.--Level 2 services provide case-specific prevention for 
families identified as ``at risk'' or ``high risk: for abuse and/or 
neglect including both spousal abuse and child maltreatment. These 
families may be referred to NPSP by a military agency such as the 
Family Service Center or the Family Advocacy Program or they may be 
self-referred. Level 2 intervention includes home visitation services 
by both nurses and social workers, case management, parent education 
classes, support groups, and referrals to appropriate military and 
civilian resources.
    Level 3.--Level 3 services are prevention and intervention services 
for families with a known incident of either child maltreatment and/or 
spousal abuse. Level 3 services for active duty service members may be 
mandated by the service member's military command. The intervention 
with these families includes all the components of Level 2 services as 
well as the development of a safety plan, victim advocacy, and 
appropriate coordination with the Family Advocacy Program. All NPSP 
clients have access to their home visitor by beeper 24 hours a day, 
seven days a week.
    The fifth year evaluation suggests that appropriate families are 
being referred to the program. During 1997, 3,228 Marine Corps families 
received home visitation services and 15,441 referrals were made for 
these families to community-based support services. In addition, the 
families are responding positively--of 6,415 requests for service, 49 
percent of the families agreed to participate. That is a relatively 
high engagement rate for a program of this type.
Children's Hospital of San Diego
    For 15 years before the military's involvement in the New Parent 
Support Program, Children's Hospital of San Diego successfully 
sponsored a similar program throughout San Diego County. The program 
was then started as a pilot demonstration project at Camp Pendleton. 
The Camp Pendleton program was designed to furnish a broad range of 
clinical, educational, in-home, and counseling services to eliminate 
the potential clauses of child abuse. This resulted in a two-year 
cooperative effort between the Children's Hospital of San Diego and the 
U.S. Marine Corps. Then in 1992, the Children's Hospital was 
competitively awarded the contract to extend the Camp Pendleton model 
worldwide. To date, the program has met with exceptional success.
    Children's Hospital's Center for Child Protection has long had a 
reputation as a center of excellence for dealing with prevention and 
treatment of child abuse and neglect. Because of the long-standing 
relationship between the Children's Hospital, the Marine Corps and its 
widespread recognition as a center of excellence for pediatric care, 
the hospital is uniquely qualified to continue this fully implemented 
program.
Need for Congressional Support
    Tremendous pressures are placed upon military families today. Large 
numbers of families of active-duty personnel, young spouses and very 
young children, are often living in communities, isolated from their 
extended families and frequently the services of the installation where 
the service member works. The need continues for programs aimed at 
assisting these families to cope with such pressure. Advocacy programs 
of this nature play an integral role in military readiness by ensuring 
the stability of military families during uncertain times, and should 
receive priority consideration by Congress. Unlike most existing 
military child protection programs which focus on child abuse after it 
happens, the New Parent Support Programs are aimed at preventing the 
abuse and providing family support for families at risk.
    Congress has generously provided support for the Marine Corps New 
Parent Support Program for the last five years. In light of this 
Subcommittee's previous support for the New Parent Support Program and 
for other family advocacy initiatives, we are requesting $5.6 million 
for the Marine Corps New Parent Support Program in the fiscal year 1999 
Appropriations Bill to advance and continue these vital programs for 
the U.S. Marine Corps. Mr. Chairman, I would also like to go on record 
as being supportive of the New Parent Support Programs of the other 
Armed Services. The hardships of military life does not only affect the 
Marine Corps, but the honorable men and women in the other services as 
well. The New Parent Support Programs have worked well and we strongly 
urge that all of the New Parent Support Programs be adequately funded.
    Thank you, Mr. Chairman, for your consideration of our request.

    Senator Inouye. I can assure you that the problem you have 
cited is high on our agenda. We are well aware that the men and 
women who serve spend about half their time away from their 
homes either on exercises or deployed missions overseas or in 
training centers, and we are also well aware that the 
conditions of employment are not the most conducive to family 
tranquility. It is one of the most frustrating and aggravating 
problems we have, but I can assure you we will do our best.
    The chairman and I are the dinosaurs of the Senate. We 
served in World War II at a time when about 5 percent of 
military personnel had dependents. Today, over 65 percent of 
our men and women have dependents. That is a big difference, 
and we are trying our best to maintain the high caliber of 
personnel that we enjoy at this moment, and we are afraid that 
if we do not do something about it now we may lose it. I thank 
you very much.
    Ms. Weisenberg. Thank you, Senator.
STATEMENT OF MILDRED BROOKE, VICE PRESIDENT, J&E 
            ASSOCIATES
    Senator Inouye. Our next witness is Mildred Brooke, vice 
president, J&E Associates.
    Ms. Brooke. Good afternoon. My name is Mildred Brooke. I am 
the vice president of operations at J&E Associates, 
Incorporated, a privately held management consulting firm. I 
want to thank you for the opportunity to appear before the 
subcommittee and for the support that you and the other Members 
of the subcommittee have given military families, particularly 
those at-risk families that I will discuss.
    Our professional staff at J&E provide services 
internationally that address a broad range of human service 
needs through Government agencies at the local, State, and 
national levels. We are currently working in partnership with 
the Departments of the Army and the Navy on their family 
advocacy programs. I wish to focus my remarks today on the 
Department of Defense child abuse prevention program known as 
the new parents support program.
    Senator Inouye, I know you are very familiar with the new 
parents support program because you were instrumental in 
securing the initial funding for the program in 1992 and have 
given support for the program as it has expanded since that 
time. We thank you for that leadership, and call upon you once 
again, as we need that leadership now more than ever, as I will 
explain.
    At present, we operate the new parents support program at 
29 Army installations worldwide as opposed to the originally 
planned 50 installations, and until the dramatic reduction in 
the current fiscal year funds we also provided the program at 
16 Navy bases, but that has been reduced to 5.
    My comments today are in support of restoration of funds in 
1999 to the prior years level. Unfortunately, in fiscal year 
1998, the funding level which had been provided by this 
subcommittee in 1995, 1996, and 1997 was not provided, thereby 
resulting in an 80-percent reduction in overall dollars, which 
seriously crippled the program at most sites and ended it at 
others.
    Although DOD has notified us that some additional moneys 
will be available in 1998, it is still inadequate to maintain 
the program in the quantity and at the quality which Congress 
has supported in the past. In the Armed Services, six children 
of every 1,000 are subjected to child abuse each year. This 
equates to 8,000 documented cases each year and does not 
include all the children who suffer from neglect.
    The new parents support program is based on a practical, 
successful model for preventing family violence. The program 
targets expectant parents and families with children under the 
age of 6 years. Services are provided through home visits, 
education classes, support groups, and structured playtimes for 
parents and children. The program is particularly critical for 
young military parents, who are often separated from their 
families and friends during times of stress.
    I am requesting that the subcommittee again demonstrate its 
support for the program at the level that will ensure that all 
families with need and those at-risk children that are 
victimized by the unique stresses to which their parents are 
subjected be restored to the funding level at which it was 
previously of $20 million.
    If the funding remains at the projected level, $10 million, 
it is predicted the program will serve only 10,000 families a 
year, in contrast to the more than 60,000 families who 
voluntarily participated in 1997.
    One approach to adapt to this reduction is to limit the 
services to families with children under the age of 1 year, 
instead of the current requirement for under 6 years.
    Unfortunately, this approach will miss the military 
families who may be in greatest need of the program. National 
data supplied by the Department of Health and Human Services 
shows children are at the greatest risk for child abuse in 
their first year of life for civilian families, but in military 
families, 3- to 4-year-olds are the most vulnerable to child 
abuse.
    I would like to close my comments today by noting that the 
military families being served by the new parents support 
program have come to our staff and to their commanders to 
express how disheartened they are by the recent reduction in 
services as a result of the funding cuts. On behalf of these 
young parents, I ask that you give fullest consideration to 
restoring the funding of this proven program to its prior years 
level of $20 million, which would include the $5.6 million 
earlier mentioned.

                           prepared statement

    Thank you for this opportunity today, and I am prepared to 
answer your questions.
    Senator Inouye. I can assure you, Ms. Brooke, that I will 
do everything possible to see that the funds are restored.
    Ms. Brooke. Thank you very much.
    [The statement follows:]
                  Prepared Statement of Mildred Brooke
    My name is Mildred Brooke, Vice President of J&E Associates, Inc., 
a privately-held management consulting firm that was founded in 1985. 
J&E has focused its efforts in providing direct mental health, 
substance abuse, and social services to vulnerable populations in need 
of assistance. Today, we provide services internationally and address a 
broad range of human service needs through government agencies or 
private firms at the local, State, and national levels. We currently 
have contracts with the Departments of the Army and Navy to provide an 
array of family advocacy services. Among the programs for which we 
provide management and professional staff is a highly regarded, 
effective child abuse prevention program known as the New Parent 
Support Program, or NPSP. At present we operate the NPSP at 29 Army 
installations worldwide. Until a reduction in the funds available for 
the NPSP led to staffing cutbacks, we also provided staff for the 
program at 16 Navy bases--a number that has since been reduced to 5.
    My comments today are in support of a restoration of funds that 
were cut from the NPSP in this year. Before fiscal year 1998, the NPSP 
was funded at $20 million and was available to families at most 
military installations with large populations of young children. At the 
beginning of fiscal year 1998, funding for the NPSP was cut by a full 
80 percent, all but crippling the program at many sites and ending it 
at others. Although $6 million has since been added to the fiscal year 
budget, the NPSP will simply not meet the objectives it was designed to 
meet unless the funding levels Congress has supported in the past are 
restored.
    So that you can appreciate why funding for the program should be 
restored to the $20 million level, let me begin by telling you a bit 
about the NPSP and what military family members think about the 
program. I will then explain how the budget cuts made in fiscal year 
1998 have impacted the program and how services will be affected if the 
budget for the program is left at $10 million for fiscal year 1999.
    The NPSP--Who it Serves, How, and Why.--Across the Armed Services, 
6 children out of 1,000 are subjected to child abuse, equating to more 
than 8,000 substantiated cases of child abuse per year. The NPSP, a 
program which exists in some form in all four Services, is based on a 
practical, successful model for preventing family violence, in 
particular violence against children. As designed the program targets 
expectant parents and families with children under the age of 6 years 
and provides support, referral, information, and educational services. 
This is especially critical taking into consideration the fact that new 
parents in the military are often isolated from friends and families 
who might otherwise provide them with support. In the Army and Navy 
alone, the program provided services to more than 66,000 participants 
from military families.
    By working closely with families who participate voluntarily in the 
NPSP, the highly trained licensed nurses and clinical social workers 
who staff the NPSP can identify at-risk families and provide a variety 
of interventions designed to decrease the risk of abuse in these 
families. The interventions included as part of this program include 
home visits, parenting and infant care classes, support and therapy 
groups, developmental play groups, and other activities, including 
referrals to additional military and civilian services. Through these 
activities, the NPSP staff helps these families learn to cope with 
stress, isolation, post-deployment reunions, and the everyday demands 
of parenthood. This contributes to a measurable reduction in the 
frequency of child abuse among participating families. Although the 
focus of the program is on children and families, the program also 
helps to decrease the incidence of spousal abuse in military families.
    Like all programs for military families, the NPSP must be tailored 
to meet the needs of each military community participating in the 
program. For example, at one installation served by one of my company's 
New Parent Support teams, groups for teenage mothers were established 
to meet a special local need. Where language is a concern, our staff 
has offered classes and materials in both English and Spanish.
    The NPSP meets unique needs, however, every effort is made to 
coordinate with existing programs and services. For example, at one 
installation, infant care classes are offered as a joint effort of the 
NPSP and the Red Cross. Across installations, the NPSP works in tandem 
with the Family Advocacy Program (FAP), the DOD program with overall 
responsibility for preventing family violence, complementing and 
expanding the FAP's prevention services. The program is particularly 
valuable in reaching and assisting families who live in isolated 
communities and face tremendous pressures. These families, often young 
and inexperienced, have a high risk for abuse and/or neglect. In 1997, 
J&E determined that 18 to 20 percent of the Army families receiving 
home visits by the NPSP had a documented incident of child and/or 
spousal maltreatment, as determined by the Army's Case Review 
Committee. For these families, the home visits were designed to 
emphasize safety, build skills and knowledge, improve problem solving, 
and reduce isolation. When we examined all cases that received home 
visits from our staff in 1997, J&E staff found that approximately 60 
percent of the cases across Army installations worldwide were 
documented as being ``at risk'' or ``high risk'' for abuse and/or 
neglect. Clearly, these data indicate the seriousness of abuse and 
neglect in military families and demonstrate a documented need for 
services such as the NPSP.
    What Do Military Families Say About the NPSP?.--As the contractor 
for the Department of the Army's NPSP effort, J&E has sought feedback 
on the usefulness of the program from participating families. Some 
examples we have received are as follows:
    Eighty percent or more of the family members at three military 
installations who participated in infant care classes in late 1997 
rated the class as ``excellent''. At two installations where parenting 
classes were offered in Spanish, in excess of 90 percent of the 
participants rated these classes as ``excellent''.
    Participants, when asked to write about their experiences with the 
NPSP home visits and parenting classes, uniformly wrote glowing reports 
about the staff and program benefits. Their comments included the 
following:
    ``I feel that breaking down how an argument starts between a couple 
with some ``hands on'' examples helps the couple understand how to 
prevent arguments.''
    ``The home visitor has been a big help to me and my wife.''
    ``The home visits gave me a chance to verbalize my concerns and 
fears.''
    ``During my husband's long deployment to Bosnia, I had many 
questions and worries about our first child, an infant of 4 months. I 
turned to the NPSP for help and they came to my home for one-on-one 
parent conferences.''
    ``I think the program was very helpful to my family and myself at a 
time when we really needed help.''
    ``I wish I would have taken this class earlier.''
    ``I really enjoyed being part of this class. I learned more about 
parenting and being patient.''
    ``That is something I really needed to learn.''
    The Impact of the Fiscal Year 1998 Budget Cut.--As you can image, 
the NPSP was substantially scaled down from its planned scope when its 
budget was slashed by 80 percent at the beginning of 1998. To 
illustrate, the Army's program was originally designed to serve 39 Army 
installations, with expansion to 50. However, due to funding cuts, it 
now serves 29 sites, with only modified services available. We are no 
longer able to provide the full complement of staff needed for each 
team (social workers, nurses, and administrative staff) despite the 
number of families needing services at each installation. Most program 
teams at each installation are staffed at levels below that which is 
required. Because of lack of funding, the NPSP staff now make less 
frequent home visits, and provide fewer classes. In addition, certain 
culturally-specific services have been eliminated. In short, the very 
activities that have made the NPSP a success are being undermined.
    What Can We Expect in Fiscal Year 1999.--The future of the NPSP 
depends in large part on Congress' commitment to the program. If 
Congress demonstrates, as it has in the past, that it does not want 
military children to be victimized by the unique stresses to which 
their parents are subjected, it will restore funding for the NPSP to 
the pre-1998 level of $20 million. The NPSP will once again be a model 
program for child abuse prevention and proof of our nation's commitment 
to the well-being of military families. If, on the other hand, funding 
is left at $10 million, the NPSP will only be able to serve 
approximately 10,000 families per year, in contrast to the 60,000 
families who voluntarily participated in the program in 1997. One plan 
under discussion to achieve this dramatic reduction in services is to 
limit services to families with children under the age of one rather 
than under the age of six. This plan, simply stated, is a fix that 
focuses on dollars rather than on the reality of child abuse in 
military families.
    In civilian families, national data show that children are at 
greatest risk for child abuse during their first year of life, and the 
most frequent form of child abuse is neglect. However, in military 
families, data collected before the NPSP became widely available showed 
that three- and four-year-olds are at greater risk of abuse, and 
physical abuse is the most common form of abuse.\1\ (See following 
graphs.) As a nation, do we really want to operate a program to protect 
one group of military children from child abuse and turn our backs on 
another larger group of children whom we know to be at even greater 
risk? I don't believe we do and trust that you will prove that we do 
not.
---------------------------------------------------------------------------
    \1\ U.S. Department of Health and Human Services, Child 
Maltreatment: Reports from the States to the National Center of Child 
Abuse and Neglect, 1993.
---------------------------------------------------------------------------
    Closing.--I would like to close my comments today by noting that 
participants in the NPSP--military families with young children--are 
disheartened by the funding cuts to the program. They are writing 
letters in support of the program and are phoning their respective 
Commanding General's hotline to express concerns. At one installation 
where we operate the NPSP, participants have offered to volunteer their 
services to help keep the program available. The comments of one young 
mother at one of our Army sites captures what these families feel. She 
said, ``I don't understand how a program like this cannot be funded 
when it's such a big asset to the parents and children of this 
installation. (The installation) is in desperate need of a program like 
this.''
    Thank you for this opportunity to address the committee today.
    [GRAPHIC] [TIFF OMITTED] T02MY11.001
    

    [GRAPHIC] [TIFF OMITTED] T02MY11.002
    
STATEMENT OF MASTER SERGEANT MICHAEL P. CLINE, (RET.), 
            EXECUTIVE DIRECTOR, ENLISTED ASSOCIATION OF 
            THE NATIONAL GUARD OF THE UNITED STATES
    Senator Inouye. Our next witness is Master Sergeant Michael 
P. Cline (Ret.), executive director, Enlisted Association of 
the National Guard of the United States.
    Sergeant Cline. Good afternoon, Senator Inouye. We thank 
you for allowing us to participate in these hearings. We are 
honored to be able to present the views of our members on the 
efforts of this committee.
    Mr. Chairman, I must report to you that the relationship 
between the Active Army and the Army National Guard is still 
not fixed. Although the Army has made some attempts to 
alleviate the shortfalls of the Army National Guard, there 
still remains a significant shortfall in fiscal year 1999 
appropriations of $634 million.
    Why do we feel that there is a continuing problem? Look at 
the recently passed fiscal year 1998 emergency supplemental 
appropriations. The Army National Guard started out with $5.9 
million in additional operations and maintenance funding in the 
original bill. It received only $175,000 in the final bill. The 
Air National Guard began with $975,000 for operation and 
maintenance. It received nothing in the final bill. The House 
Security Committee recently completed its work on the fiscal 
year 1999 defense authorization bill. The estimate for the Army 
was increased by 4,800 positions, while the Army Reserve full-
time manning was increased by 1,000 positions. The Army 
National Guard was cut by 4,516 positions.
    April figures show that the Active Army and the Army 
Reserve cannot meet current end strength requirements. 
Attrition rates for the Active are about 36 to 37 percent, 
while the Army National Guard is above current end strength 
levels, with an attrition rate of only 17 percent.
    Where is the rationale for increasing the Army and Army 
Reserve while making deep cuts in the Army National Guard? Its 
costs are significant to send and train soldiers and to have 
them replace existing soldiers just does not seem feasible.
    The Army National Guard's 1999 budget shortfalls total $634 
million, $184 million in the pay and allowances account, and 
$450 million in OPTEMPO accounts. This shortfall represents 
less than 1 percent of the total Army's budget.
    Mr. Chairman, I realize that the budget resolution means no 
additional funds. I believe the Army National Guard shortfall 
can be divided from other forces. Historically, the Army funds 
OPTEMPO high, but only executes 71 percent. That remaining 29 
percent of their funding is more than enough to make up for the 
Army National Guard's shortfall.
    As you are aware, the Army has not been able to maintain 
end strength suffering, from an attrition rate of above 36 
percent. The Army Reserve has had the same problem. The Army 
National Guard continues to maintain its end strength at only 
that 17 percent attrition rate. The Army's personnel account 
can easily afford to lose funding. The Army National Guard's 
shortfall can be derived from the personnel funding the Army 
does not need anyway.

                           prepared statement

    Mr. Chairman, Senator Inouye, you fought hard last year to 
get the Army to play fair with the Guard, and we appreciate 
your efforts and hope you will continue to fight on behalf of 
the men and women of the National Guard. Unfortunately, the 
problem is still with it. The Association of the National Guard 
and members of The Military Coalition voice support for the 
legislative agenda of The Military Coalition. I would like to 
thank you, Senator Inouye, and the chairman for giving us this 
opportunity to testify.
    [The statement follows:]
         Prepared Statement of Master Sergeant Michael P. Cline
                              introduction
    Mr. Chairman, Members of the Defense Subcommittee of the Senate 
Appropriations Committee: I am honored to have this opportunity to 
present the views of the Enlisted men and women of the National Guard 
of the United States. Our members are very appreciative of the support 
extended to them in the past, and are very confident that you will, 
through your diligent and conscientious efforts, give serious 
consideration to the most critical issues facing the National Guard 
today.
    The citizen soldiers of today are truly the finest ever. You may 
ask yourself, Mr. Chairman, why are NCO's and Enlisted people so 
concerned about the budget? This is the bottom line: It is the NCO's' 
direct responsibility to train the troops that the Administration and 
Congress deploy around the world. The National Guard must have adequate 
funding to fully train its soldiers and airmen and protect them from 
harm. The Guard must be adequately prepared and resourced to complete 
its varying assigned missions and avoid degrading criticism from its 
adversaries. Without these additional funds, the National Guard will 
fall into the hollow force that is being predicted by some individuals 
in the military community.
    As the drawdown of the active forces continues, the Guard is being 
called upon more and more to provide peacetime and combat-ready support 
for contingencies around the world. Shortages in specific areas are 
becoming acute. While we assert that the use of the National Guard is 
the most cost effective means of implementing a strong national defense 
strategy during these financially constrained times, we also believe 
that we must have adequate funds to maintain the best possible services 
to our nation.
                          army national guard
    Mr. Chairman, based on information received from the Department of 
Defense and on the budget submission presented by the administration, 
the Army National Guard has a major shortfall in the fiscal year 1999 
appropriations. Once again, the President's budget submission contains 
budget information that will bankrupt the Army National Guard and 
completely destroy its ability to perform its mission. The fiscal year 
1999 budget for the Army National Guard (ARNG) will only pay 
approximately 71 percent of its requirements--requirements that were 
decided upon and validated by the Department of the Army, not by 
National Guard officials.
    The ARNG's 1999 budget shortfalls total $634 million. $184 million 
is in the pay and allowances (P&A) accounts and $450 million is in 
operations and maintenance (O&M) accounts.

                                                             In millions
                                                              of dollars

P&A (Pay and Allowances):
    Military Schools and Special Training.........................   156
    Recruiting and Retention Bonuses..............................    18
    Active/Guard/Reserve Pay......................................    10
                        -----------------------------------------------------------------
                        ________________________________________________
      Total P&A...................................................   184
                        =================================================================
                        ________________________________________________
O&M (Operation and Maintenance):
    Surface OPTEMPO...............................................   110
    Real Property Maintenance.....................................    98
    Depot Maintenance.............................................    94
    Information/Telecom Management................................    73
    Medical Support and AT/IDT Supplies and Services..............    75
                        -----------------------------------------------------------------
                        ________________________________________________
      Total O&M...................................................   450
                        =================================================================
                        ________________________________________________
      Total Unfunded Requirement..................................   634

    This budget request fails to provide sufficient funds to maintain 
minimum readiness levels. Failure to fund Army National Guard O&M and 
P&A accounts will have a detrimental impact on ARNG readiness, 
recruiting, retention and the ability to perform both state and federal 
missions. This shortfall is forcing National Guard NCO's to choose 
between attending schools needed for promotion or staying with their 
units to mentor junior enlisted troops. Inadequate funding of Schools 
and Special Training accounts decreases unit readiness, reduces 
promotion capabilities and diminishes retention rates.
    A shortfall in the Bonuses funds limits the recruiting market and 
diminishes retention rates. Not fully funding active Guard and Reserve 
pay does not support the Quadrennial Defense Review's programmed 
strength for the ARNG and forces the ARNG to begin separation 
procedures as well as limiting the ability to support traditional 
National Guard soldiers.
    The shortfall in Surface OPTEMPO funds does not fund later 
deploying units. Real Property Maintenance underfunding will permit 
only limited emergency repairs, will allow deterioration of ARNG 
facilities and will contribute to the increase in the maintenance 
backlog of equipment. Unserviceable equipment awaiting Depot 
Maintenance adversely impacts training and readiness. Lack of funding 
for Depot Maintenance decreases the pool of available serviceable 
assets for both mission and training requirements and jeopardizes 
Division redesign plans. A funding shortfall in the Information/Telcomm 
Support account means that the ARNG cannot maintain basic information 
structure; the Reserve Component Automation System cannot be supported. 
The Miscellaneous Med/Tng Support, Supplies and Svcs account needs 
funding for medical supplies, medical screening and training support 
programs to ensure combat readiness.
    The National Guard's eight combat divisions are the hardest hit 
since the budget funds a small portion of their operating tempo 
requirements. These divisions are providing many of the Guard elements 
deploying to Bosnia, while active Army divisions that receive the 
highest funding priority spend much of their time at home station. The 
guys who are being funded to go overseas are staying home, and the guys 
who are being funded to stay home are going overseas.
    In recent years, budget requests have not adequately funded ARNG 
readiness accounts, including O&M and P&A. This inadequate funding, 
represents only 1 percent of the Total Army budget.
    The current fiscal year 1999 funding level for the ARNG will not 
maintain the minimum readiness level necessary to fulfill our 
obligation to National Defense. National Guard Bureau has broken out 
the items/program that will benefit from each additional $50 million 
plus-up in funding provided by Congress:
$50 million add-on
    Fully funds Active Guard/Reserve (AGR) personal pay
    Fully funds schools for the Enhanced Separate Brigades
    Provides 50 percent of the funding needed for Special Training for 
the Enhanced Separate Brigades.
$100 million add-on
    Early Deployers and Activating units are funded to 100 percent
    Schools are funded for Echelon Above Division FA units
$150 million add-on
    ARNG Bonus program will be fully funded
    Late deploying units will be funded to 75 percent of Department of 
Army (DA) requirements
    Medical Support will be funded to 71 percent of DA requirements
$200 million add-on
    Increases Real Property Maintenance funding to 49 percent
    Funds emergency repairs
    Depot Maintenance funding to non-deploying units will be increased 
to 17 percent
$250 million add-on
    Increases funding of information technology to 50 percent. Basic 
infrastructure and connectivity will be maintained, but technology 
upgrades will not be paid
    Money would also be used for Annual Training and IDT training 
support, contract services and supplies
$300 million add-on
    Fully funds the Late Deploying units
$350 million add-on
    Funds 57 percent of Divisional unit MOSQ and Leadership Development 
Requirements
$400 million add-on
    Increases funding to non-deploying units' Depot Maintenance, 
bringing it up to 42 percent of DA requirements
$450 million add-on
    Increases funding for Information Technology to 75 percent of DA 
requirement, allowing for systems upgrades and limited replacement of 
equipment
$500 million add-on
    Funds 80 percent of other contract Medical Services and Supplies 
for ARNG activities
    Increases funding for schools for Divisional units and for Special 
Training for Enhanced Separate Brigades and EAD-FA units
$550 million add-on
    Fully funds Schools and Special Training requirements
    Increases Depot Maintenance funding to 61 percent
    Allows for limited upgrades and repairs to ARNG equipment
$600 million add-on
    Increases Real Property Maintenance funding to 80 percent
    Depot Maintenance funding to non-deploying units increases to 44 
percent
$634 million add-on
    Fully funds the ARNG unfunded requirements in the fiscal year 1999 
budget
    Increases Depot Maintenance to non-deploying units to 50 percent
    Funds Medical Support (physicals, screening) to 100 percent
    Funds Training Support to 80 percent
    Funds other Supplies and Services to 84 percent
                                  rcas
    The President's budget requested adequate funds to field the 
Reserve Component Automation System (RCAS) for fiscal year 1999. Last 
year, cuts in funding to RCAS were made during the appropriation 
process, but were added back in at a later time. EANGUS asks that the 
President's budget request be maintained on this item as the 
legislation moves through Congress. In addition, supplementary funding 
is needed to institute distance learning programs.
                                  mlrs
    In its first combat deployment in Operation Desert Storm, the 
Multiple Launch Rocket System (MLRS) dominated the artillery 
battlefield. Army National Guard units from Oklahoma and Arkansas 
performed admirably, utilizing the capabilities of MLRS. These units 
not only performed magnificently, but also assisted coalition forces 
from the United Kingdom and France during the advance into Iraq. From 
January 17, 1991, until February 26, 1991, units from the 1-158 Field 
Artillery MLRS fired more than 934 rockets at Iraqi defenses. The 
overwhelming success of MLRS in Desert Storm emphasizes the importance 
of a modernized artillery force.
    Today, the National Guard represents two-thirds of the total Army's 
artillery force. MLRS is a mission in which the Army National Guard can 
reasonably be trained and prepared quickly to assist the regular Army 
in future contingency missions. Modernization with MLRS is far from 
complete; 11 National Guard battalions and seven National Guard 
divisions are unfunded. The Army's budget request for fiscal year 1999 
contained no MLRS Launchers--the unfunded request is for the National 
Guard only. Eight of the ten MLRS battalions the Guard does have were 
congressional add-ons. $150.4 million in additional appropriations to 
the Army's procurement account is necessary to add an MLRS battalion to 
the Army National Guard in fiscal year 1999. Although there are plans 
to downsize battalions to 3 times 6 (18 MLRS), resulting in an 
additional 9 units per battalion which will cascade down, additional 
funding will not be wasted. So many MLRS units are needed that any add-
on in fiscal year 1999 would be a valid request.
                       engagement skills trainer
    The Engagement Skills Trainer (EST) is an interactive weapons 
simulator that integrates leading-edge technology in computers, audio 
visual systems and lasers. The result is a relatively low-cost system 
that allows full training in weapons marksmanship and judgmental 
firearms training by military and law enforcement users on an 
international basis. The obvious advantages of this system are reduced 
live ammunition and range operation costs, virtual elimination of 
safety and environmental risks and reduced ``dead'' time in travel to 
and from live fire ranges. The fidelity of the interactive targets and 
scenarios provide trainees with ``real world'' situations involving use 
of force options without risk to trainees, live trainers or bystanders.
    The Army National Guard is currently fielding the EST in two 
configurations: a full twelve-lane EST with a focus on training 
collective (squad level) tasks, and a four-lane configuration with a 
focus on individual skills and tasks. The training value of the EST for 
the individual combatant/section/crew and squad has been validated 
throughout the ARNG and fully supports the strategic vision for 
training in the 21st century. The accelerated ammunition reductions 
within the U.S. Army ($40 million a year) place a renewed urgency on 
fully fielding the National Guard with the EST. The current fielding 
plan is to place a four-lane trainer in most Army Guard armories 
throughout the U.S. and place the full EST at larger sites and training 
centers.
    Several Army Guard units have established arrangements informally 
with local law enforcement agencies for co-use of Guard simulator 
systems to conduct needed law enforcement training. This Community-
Based Simulation Training Strategy envisions the Army National Guard 
continuing to field the EST in consonance with the Army's validated 
requirement and training strategy. This concept draws upon the 
``Community-Based Defense Force'' mission of the National Guard. Local 
law enforcement will work out individual agreements with the local Army 
Guard unit. It is envisioned that this program will grow into a 
national program involving all Reserve Component forces.
    The concept of this Community-Based Simulation Training Strategy 
entails funding for approximately $5 million to allow for the 
establishment of a valid pilot program across an appropriate spectrum 
of locations in the nation. At approximately $48,000 per system, this 
would allow for fielding 104 lane trainers in various communities and 
states. After system fielding and implementation of the pilot program, 
a report will be generated showing actual cost savings for the Guard 
and law enforcement participants in the program. The results are 
expected to illuminate the need for completion of the fielding of the 
remaining systems over the next four years.
                           air national guard
    The Air National Guard (ANG) has proven to be one of the most cost-
effective means of maintaining Total Air Force capability within the 
constraints of a shrinking defense budget. This is evident with the 
continued involvement in worldwide contingencies by the ANG C-130 
airlift forces.
    Below are the unfunded requirements for the ANG for fiscal year 
1999:
                                                             In millions

Miscellaneous ANG Equipment:
    F-16 Targeting Pods.......................................   160.5  
    Data Links for F-16, A-10, F-15, B-1......................    64.951
    Night vision capability...................................    20.931
    Improved aircraft survivability...........................    50.005
    Training systems..........................................    12.810
                    --------------------------------------------------------------
                    ____________________________________________________

      Total Miscellaneous Equipment...........................   309.197
F-16 A/B Service Life Extension...............................    18.000
Real Property Maintenance.....................................    24.000
Depot Maintenance.............................................    26.000
Real Property Maintenance Backlog Reduction...................    26.000
                    --------------------------------------------------------------
                    ____________________________________________________

      Total ANG fiscal year 1999 Unfunded Priorities..........   403.2  

    The ANG F-16's require a targeting pod to fulfill current 
Precision-Guided Munitions requirements. Recently, several low-cost 
targeting pods have been produced that could dramatically increase 
capability at a relatively low initial cost. These pods would improve 
ANG combat capability and contingency support availability.
    Data Links for F-16's, A-10's, F-15's and B-1's are needed to save 
soldier's and airmen's lives by preventing fratricide and enhancing 
situational awareness while providing accurate combat ID capabilities. 
Links also provide access to data for battle participants, giving them 
target/threat information and intelligence.
    Night Vision capability consists of: Night Vision Goggles; F-15 
Night Vision Imaging System; HC/C-130 Night Vision Imaging System 
program and the HC-130 AN/ARS-6 Personnel Locator System. Night Vision 
is the key to sustained 24-hour combat operations and is essential for 
successful combat execution, lethality and survivability. Night Vision 
is also essential for minimizing search time and providing quick, 
positive identification in search and rescue missions.
    Improved Aircraft Survivability includes: the Electronic Warfare 
Management System; the Mega Data Transfer Cartridge; C-130 Cockpit 
Armor; the HC-130 Integrated Electronic Warfare System and Fighter 
Engine Modernization.
    Training Systems consist of: new A-10 Unit Training Devices 
(simulator); F-15 Full Mission Trainers; video recording system for the 
B-1 and Automated Squadron Management System.
    The Service Life Extension Program for F-16A/B Aircraft is required 
on 24 F-16A/B aircraft in order for them to last through 2005. Many of 
these aircraft have already exceeded their programmed service life of 
4,000 hours. This repair/modification requires $8.64 million of 
Aircraft Procurement and $9.6 million of Operation and Maintenance, ANG 
funding.
    At $86 million for fiscal year 1999, the ANG Real Property 
Maintenance budget will be insufficient to meet the urgent 
requirements. Backlog of Maintenance of Repair will be $643 million at 
the end of fiscal year 1999 based on current funding. $24 million is 
urgently needed to repair severely deteriorated airfield pavements, 
upgrade infrastructure at joint use airfields, bed down new mission 
requirements and correct fire and safety deficiencies. $26 million is 
urgently needed for repair of roofs, exterior walls, windows and doors. 
It would also be used to repair heating, ventilating, electrical, water 
and sewer systems.
    The ANG Depot Maintenance account for fiscal year 1999 needs an 
additional $26 million to eliminate deferred aircraft, engine and 
support equipment maintenance.
                                  c-17
    The C-17 is essential to the Air Force's ongoing modernization of 
its air mobility forces and is key to meeting the nation's strategic 
mobility requirements for the 21st century. The C-17 possesses the full 
range of capabilities that will meet critical DOD and national needs; 
long range, outsized and oversized cargo, the ability to operate on 
simple and congested runways, efficient on-load and off-load, airdrop 
and excellent defensive systems. It will replace capacity lost as C-
141's retire. The burdens placed on U.S. strategic mobility forces will 
not become less demanding in the future. In fact, the potential demands 
of peacetime engagement, the likelihood of smaller-scale contingencies 
worldwide, and the increased possibility of confronting nuclear, 
biological, and chemical threats all pose challenges for mobility 
forces. The current acquisition plan for the C-17 will severely hamper 
our nation's strategic mobility forces. Additional funding to provide 
for fielding of the first C-17 to the ANG is necessary sooner than 
planned. Aging C-141's are 40 years old and have suffered from overuse. 
Enlisted Aircrews' lives are at risk, as well as the pilots of these 
aged aircraft.
                           full-time support
    The National Guard's role under the Total Force Policy is 
substantial; it requires high levels of readiness. The ability of Guard 
units and personnel to mobilize, deploy, integrate and operate was 
amply demonstrated during Operation Desert Shield/Desert Storm and now 
Bosnia. The level of full-time support manning has a direct and 
demonstrated influence on readiness capabilities and is dictated by 
mission and equipment levels rather than by end strength. Full-time 
support manning is a pivotal element in day-to-day operations and 
functions in administration personnel, supply and training preparation 
and in enhancing the quality of training by making inactive duty 
training periods and annual training more efficient and effective. A 
need exists for full-time spaces to support organizing and maintaining 
state health and dental clinics.
                                closing
    Mr. Chairman, it is our Association's belief that the National 
Guard, in conjunction with the active component, represents the most 
cost-effective weapon at our disposal to defend our nation. The 
National Guard's potential has barely been tapped. Yet, it stands 
ready, willing and accessible to meet our defensive needs. It is 
imperative to ensure that the National Guard has the necessary support 
to fully develop into an integral part of the Total Force. This can 
only be accomplished through modernization of equipment, a stable force 
strength, and training. Shortchanging any one of these areas could 
prove fatal to the effectiveness of the National Guard and the defense 
of our country.
    Mr. Chairman, the National Guard is your next door neighbor, he or 
she may be a truck driver, your lawyer, your son or daughter or your 
grandchildren's teacher. When the National Guard is called, America 
goes to war. The National Guard is family. Americans at their best. The 
National Guard--Protectors of Freedom. Defenders of Peace.
    I would like to thank the Chairman and Members of this committee 
for the opportunity to provide testimony on the fiscal year 1999 
funding requirements for the Army and Air National Guard.

    Senator Inouye. I know this is one of the most vexing 
problems we face at this time. I was hoping this matter could 
be resolved by now, but apparently it will be with us for a 
long, long time.
    Sergeant Cline. If I could add something, Senator Inouye. 
It has been our association's belief that end strength and 
force structure is an issue of the officers. We normally let 
them take care of that business, but things have gotten so bad.
    When we are only facing 13 percent OPTEMPO in our eight 
divisions, that means the tank commander gets to drive his tank 
13 miles a year. How do we expect somebody to be ready to go in 
harm's way when they cannot meet their OPTEMPO requirements, 
and it is the enlisted guy who is out there in the forefront in 
the Army doing the job.
    Senator Inouye. And yet they expect you to do it.
    Sergeant Cline. Yes, sir. Thank you, sir.
    Senator Inouye. Thank you very much.
STATEMENT OF CMDR. VIRGINIA TORSCH, MSC, USNR, THE 
            MILITARY COALITION
ACCOMPANIED BY CMDR. MIKE LORD, JAGC, USN (RET.), THE MILITARY 
            COALITION

    Senator Inouye. Our next witness is Commander Virginia 
Torsch and Commander Mike Lord, The Military Coalition.
    Commander Torsch. Thank you, Senator Inouye. I am going to 
go ahead and present it, but I have got backup here if I need 
it.
    On behalf of The Military Coalition, I would like to 
express our deepest appreciation to the chairman and 
distinguished members of this subcommittee for holding these 
important hearings and for allowing us to present our concerns.
    The Military Coalition is committed to making Tricare a 
better health care plan and has been working with DOD and with 
Congress to remedy some of the problems even as we pursue other 
more comprehensive fixes to the military medical care system.
    This subcommittee has been very instrumental in ensuring 
that many of these problems have been resolved, at least 
ameliorated, and the coalition would like to express its 
deepest appreciation for the committee's role.
    One of the most critical steps towards restoring equity in 
the health care benefit for older retirees was taken last year, 
with the enactment of legislation for a medicare subvention 
test in the Balanced Budget Act of 1997. The coalition deeply 
appreciates the subcommittee's leadership in getting this 
important legislation enacted and is optimistic the test will 
prove that subvention is a win-win provision for all concerned.
    However, the coalition is concerned that many subvention 
supporters believe subvention is the solution. This is not the 
case at all. In fact, even when Tricare Senior is expanded 
Nationwide, medicare subvention, when combined with DOD's level 
of effort, will only benefit medicare-eligible beneficiaries 
residing in the catchment areas of major military hospitals, 
which is at best about 30 to 40 percent of the medicare-
eligible uniformed services population.
    Next to lifetime health care commitment, an additional 
option must be provided to the have-nots and lock-outs, and 
that is to offer those medicare-eligible uniformed 
beneficiaries who cannot benefit from Tricare Senior the 
opportunity to enrol in the Federal Health Employment Benefit 
Program. We realize that one of the principal arguments being 
made against FEHBP-65 is its price tag to the beneficiary.
    This was not a concern the coalition took likely, and 
before concluding that FEHBP-65 would be a viable option for 
beneficiaries, we conducted a health care cost survey in 1996. 
That survey revealed that 32.5 percent of enlisted retirees 65 
and older, and 41.8 percent of officer retirees 65 or older 
would be economically better off with FEHBP than under their 
current health care coverage. That represents a significant 
population who would benefit from enrolling in the Federal 
Health Employments Benefits Program.
    While the coalition would prefer to have FEHBP-65 enacted 
Nationwide, we recognize that the limited test may be necessary 
to take the guesswork out of the low cost of this option. We 
are therefore delighted that the Senate Armed Services 
Committee completed its draft of the uniformed 1999 defense 
authorization bill last week. They included a three-prong test 
of additional options for medicare-eligible uniformed services 
beneficiaries.
    The test provides medicare-eligible retirees the 
opportunity to enroll in the Federal Health Employments Benefit 
Program at two sites, the opportunity to buy into a medicare 
supplemental insurance program for a premium to be determined 
by the Defense Department which would not exceed 75 percent of 
the FEHBP premium at two other sites, and the option to 
participate in the Department of Defense mail order pharmacy 
program subject to copayments and other charges deemed 
appropriate by the Secretary of Defense at two other sites.
    The only change to this provision we ask this committee to 
consider is to expand the FEHBP portion of the test to perhaps 
include more sites.
    Enactment of this Senate provision should not be too 
problematic for DOD, since last year in a report to Congress 
Dr. Edward Martin, the Acting Assistant Secretary of Defense 
for Health Affairs, indicated DOD would support a limited test 
of FEHBP-65. The coalition is anxiously awaiting DOD's 
proposal, but it is concerned that DOD is dragging its feet in 
developing the plan.
    Timing is critical, because the Office of Personnel 
Management indicates that even with FEHBP-65 legislation 
enacted this summer, enrollment for the demonstration cannot 
begin until November of 1999, with implementation in January 
2000. It would be a travesty if the test slipped beyond that 
date.
    It is truly ironic that, despite their many sacrifices, 
retired service members lose their military health insurance at 
age 65. Please keep in mind those hit hardest are the retirees 
who fought in World War II, Korea, and Vietnam, and then won 
the Cold War. They have saved the Government many, many 
billions in reduced defense spending every year. These retirees 
have already paid the premiums for equal coverage not just in 
money but in service and sacrifice, including many who paid the 
ultimate sacrifice.
    Mr. Chairman, the coalition respectfully requests and 
strongly recommends that this committee include funding in its 
markup of the fiscal year 1999 defense appropriations bill to 
conduct the three-pronged demonstration of FEHBP-65 for 
medicare supplemental with the expansion of the pharmacy 
benefit as provided by the Senate fiscal year 1999 Defense 
Authorization Act.

                           prepared statement

    Mr. Chairman, once again, thank you for this opportunity to 
address the subcommittee. This concludes my testimony.
    Senator Inouye. Thank you very much, Commander. You spoke 
of a 1996 survey on health care. Can you share a copy of that 
survey with us?
    Commander Torsch. Certainly, sir.
    Senator Inouye. We would appreciate that very much.
    Commander Torsch. Thank you very much.
    Senator Inouye. Thank you.
    [The statement follows:]
              Prepared Statement of Cmdr. Virginia Torsch
    Mister Chairman and distinguished members of the committee: On 
behalf of The Military Coalition, we would like to express appreciation 
to the Chairman and distinguished members of the Senate Appropriations 
Committee's Subcommittee on Defense for holding this important hearing. 
This testimony provides the collective views of the following military 
and veterans organizations which represent approximately 5 million 
members of the seven uniformed services, officer and enlisted, active, 
reserve, veterans and retired plus their families and survivors.

Air Force Association
Army Aviation Association of America
Association of the United States Army
Chief Warrant Officer and Warrant Officer Association, United States 
Coast Guard
Commissioned Officers Association of the United States Public Health 
Service, Inc.
Enlisted Association of the National Guard of the United States
Fleet Reserve Association
Gold Star Wives of America, Inc.
Jewish War Veterans of the United States of America
Marine Corps League
Marine Corps Reserve Officers Association
National Guard Association of the United States
National Military Family Association
National Order of Battlefield Commissions
Naval Enlisted Reserve Association
Navy League of the United States
Naval Reserve Association
Reserve Officers Association
The Military Chaplains Association of the United States of America
The Retired Enlisted Association
The Retired Officers Association
United Armed Forces Association
United States Army Warrant Officers Association
United States Coast Guard Chief Petty Officers Association
Veterans of Foreign Wars

    The Military Coalition does not and has not received any federal 
grants, and does not have nor has had any contracts with the federal 
government.
                              introduction
    The Military Coalition (TMC) has been privileged to observe the 
design and implementation of Tricare from a front row seat over the 
last few years. The Coalition was delighted to have the opportunity to 
participate in the development of the Tricare benefit package and to 
provide extensive comments on the Tricare rules and regulations. Open 
dialogue between the Office of the Assistant Secretary of Defense for 
Health Affairs (OASD/HA) and the Coalition has allowed actual 
beneficiary experience to be part of the daily evaluation of the 
program as Tricare has been implemented throughout the country. The 
Coalition is very committed to making Tricare a better health care plan 
for all participants and has been working vigorously with DOD and 
Congress to remedy some of the problems with the program, even as it 
pursues other more comprehensive solutions to the problems burdening 
the military medical care system.
    It is important to note, however, that despite the progress in 
fixing some of the problems with Tricare, to be addressed shortly, 
there are still significant issues that must be resolved. These issues 
include a lack of a uniform health care benefit, low reimbursement 
levels, slow claims processing and others to be detailed later in this 
statement.
                        improvements in tricare
    In general, Tricare Prime, the HMO piece of Tricare, is relatively 
consistent with other managed care programs. With some notable 
exceptions, Tricare Prime has been well received in areas surrounding 
Military Treatment Facilities (MTF's). The Coalition has closely 
followed Congress's and DOD's progress in trying to improve the Tricare 
program, and would like to note some positive fixes to Tricare and to 
the military health care benefit in general over the last year.
    Medicare Subvention Test.--One of the most critical steps toward 
restoring equity in the health care benefit for older retirees was 
taken last year with the enactment of legislation for a Medicare 
subvention test in the Balanced Budget Act of 1997. The provision calls 
for a test of Medicare subvention (to be known as Tricare Senior) for 
three years at six sites around the country to include: Keesler AFB, 
Biloxi, MS; Ft. Carson and the Air Force Academy, Colorado Springs, CO; 
Madigan Army Medical Center, Ft. Lewis, WA; Naval Medical Center, San 
Diego, CA; Dover Air Force Base, Dover, DE; and a joint site including 
Brooke Army Medical Center and Wilford Hall Medical Center, San 
Antonio, TX, Ft. Sill, Lawton, OK; and Sheppard AFB, Wichita Falls, TX. 
The Coalition deeply appreciates this Subcommittee's leadership in 
getting this important legislation enacted and is optimistic that the 
test will prove that subvention is a win-win provision for all 
concerned.
    Despite this successful outcome, the Coalition remains concerned 
that the demand for enrollment in Tricare Senior will far exceed the 
capacity. Congress has only allocated $50 million in Medicare funding 
for fiscal year 1998, which will cover approximately 10,000 additional 
beneficiaries at the test sites. Although a considerably larger number 
will receive care in the test facilities because DOD has agreed to 
continue its prior level of service to Medicare-eligibles without 
reimbursement, there is considerable uncertainty as to the maximum 
program capacity. The Coalition is also concerned that beneficiaries 
who became Medicare-eligible before December 1, 1997, but who never 
used a uniformed services health care facility as a Medicare-eligible 
beneficiary before that date are ineligible to participate in the test. 
Many of these individuals never used an MTF because they could not get 
appointments or did not require medical care. It is not fair to 
penalize these individuals by forever denying them the opportunity to 
enroll in Tricare Senior. The Coalition recommends that when Medicare 
subvention is implemented nationwide, all Medicare-eligible uniformed 
services beneficiaries be allowed to enroll in Tricare Senior 
regardless of any prior usage of the military health care system.
    Expansion of Tricare Prime Outside of Catchment Areas.--Last year 
the Coalition expressed concern that Tricare Prime needed to be 
expanded to all areas where there are significant numbers of uniformed 
services beneficiaries (including retirees) and where there are 
sufficient numbers of civilian providers to establish a civilian 
network of providers under Prime or Extra (like base closure sites). 
The Coalition is pleased to see that Section 712 of the Fiscal Year 
1998 Defense Authorization Act requires that DOD prepare a plan to 
expand Tricare Prime to noncatchment areas. The Coalition is urging DOD 
to implement this plan as soon as feasible.
    Waiver of Deductibles, Copayments and Annual Fees for Family 
Members of Active Duty Members Assigned to Remote Duty Locations.--The 
Coalition has also been concerned that active duty members assigned as 
recruiters, ROTC instructors, full-time advisors to reserve units, or 
to duty stations outside Tricare Prime catchment areas do not have the 
option of enrolling their family members in Tricare Prime with the 
lower co-payments. These families have been unfairly burdened with the 
higher cost of care under Tricare Standard. Therefore, the Coalition 
was pleased to see that Section 712 of the Fiscal Year 1998 
Authorization Act also allows the Secretary of Defense to evaluate the 
feasibility and cost-effectiveness of either providing a health care 
stipend or a reduction in Tricare Standard cost-sharing for family 
members of these active duty members. It is our hope that DOD will make 
a decision and implement this plan in a timely manner.
    The Coalition was also pleased that Section 731 provides a 
transitional program that requires DOD ensure active duty members 
assigned to remote locations have the same timely access to care as 
those who are assigned closer to a military treatment facility. DOD 
must allow active duty members to receive care under Tricare Standard 
(CHAMPUS) without any copayments or deductibles until Tricare Prime 
becomes available to that area.
    Portability and reciprocity for Tricare Prime enrollees.--The 
Coalition expressed concern last year that Prime enrollees could not 
transfer their enrollment from one Tricare region to another, or get 
care in a different Tricare region than the one in which they were 
enrolled. The Coalition is very pleased to see that DOD has issued a 
policy memorandum implementing portability of Prime enrollment, both 
for active duty family members and for retirees. The Coalition is 
aware, however, that there are still a few problems in actually making 
Prime fully portable, and we are urging DOD Health Affairs to work out 
these problems as quickly as possible. The Coalition is also urging DOD 
to speed up its efforts on reciprocity of care between Tricare regions.
                        concerns remain however
    Although great strides have been made by DOD and Congress in fixing 
some of the more egregious problems with Tricare, the Coalition remains 
concerned about problems we noted last year that still have not been 
addressed. These problems are detailed in Attachment A, and we urge 
this Committee to work with the Senate Armed Services Committee to 
implement our suggested fixes.
    The one problem we do want to concentrate on however, is that 
Tricare does not provide a uniform health care benefit for all military 
beneficiaries, particularly for those who are Medicare-eligible. 
Earlier the Coalition expressed its appreciation and optimism about 
Medicare Subvention. There is no doubt that it is a critical step 
toward honoring the health care commitment. Having said that, the 
Coalition is concerned that many Subvention supporters believe 
Subvention is ``the solution.'' This is not the case at all. In fact, 
even when Tricare Senior is expanded nationwide, Medicare Subvention, 
when combined with DOD's level of effort will only benefit Medicare-
eligible beneficiaries residing in the catchment areas of major MTF's.
    The stark reality is that Subvention will only accommodate a 
maximum of 30 percent to 40 percent of Medicare-eligible uniformed 
services beneficiaries. Thus, to honor the lifetime health care 
commitment, another option must be provided.
    Before turning to the Coalition's specific recommendation, it's 
important to address a myth shared by the American public--and many in 
Congress--that uniformed services retirees have better-than-average 
health care benefits. This is an unfortunate misperception from decades 
ago. In fact, as indicated in the following charts, DOD is the largest 
single employer in the country, but ranks in the bottom 11 percent of 
large American employers (10,000 or more employees) in terms of the 
health care coverage it provides to Medicare-eligible uniformed 
services retirees.
    The 1997 Hay Benefits Report (one of the nation's most respected 
benefits survey firms), indicates even smaller firms substantially 
subsidize Medicare supplemental insurance for their retirees. As shown 
below, the larger the firm, the greater the subsidized benefit.

                        EMPLOYER-FUNDED HEALTH COVERAGE (FOR MEDICARE-ELIGIBLE RETIREES)
----------------------------------------------------------------------------------------------------------------
                                                                                     Firm size
                                                                 -----------------------------------------------
                                                                   <0.5K  0.5-1K   1-5K    5-10K   10K+     All
----------------------------------------------------------------------------------------------------------------
Firms Surveyed..................................................     121      69     190      55      91     526
Percent Providing at Least Some Subsidy.........................      71      78      79      85      89      80
Percent Paying at Least 50 Percent of Premium...................      67      70      71      85      85      74
----------------------------------------------------------------------------------------------------------------
Note: DOD Falls within Bottom 11 percent of Large Firms Nationwide.
 
Source: 1997 Hay Benefits Report.

    A more appropriate comparison is to pit DOD Medicare-supplemental 
coverage for military retirees with that offered by the largest 
corporate employers to their retirees and what the federal government 
provides all other federal retirees, except those from the uniformed 
services. As the following chart demonstrates, uniformed services 
retiree health coverage is a very distant last.

                                     ``BIG FIVE'' CIVILIAN RETIREE COVERAGE
----------------------------------------------------------------------------------------------------------------
                                     Employer
             Employer                Prem Pmt     Family           Retiree Cost Share         Other Benefits \1\
                                    (percent)  Deductibles
----------------------------------------------------------------------------------------------------------------
GM................................         80        $600   0...............................  Rx, D, V.
Ford..............................        100        $250   20 percent/$500 Cap.............  Rx, D, V.
IBM...............................        100        $250   20 percent......................  Rx, D, V.
                                                            ($340 INP)......................  (0 INP)
Exxon.............................         95        $500   20 percent/$2,500 Cap...........  Rx, D.
Fed Gov't (Civ)...................         72     ( \1\ )   Nominal.........................  Rx, D.
Fed Gov't (Mil)...................          0     ( \2\ )   ................................  None. \3\
----------------------------------------------------------------------------------------------------------------
\1\ Often Waived.
\2\ Retiree Pays Everything, Medicare Doesn't.
\3\ Some get Space-A care; civilian plans cover all retirees.
 
Rx--Prescriptions; D--Dental; V--Vision.

    As the Coalition has testified before, we are convinced that the 
fair, equitable and cost effective solution is to offer those Medicare-
eligible uniformed service beneficiaries the opportunity to enroll in 
the Federal Employees Health Benefits Program (FEHBP-65). In this 
regard, Mr. Chairman, the Coalition is extremely appreciative of this 
Subcommittee's effort to have DOD submit FEHBP-65 test legislation to 
Congress this year. Although we are extremely reluctant to settle for 
less than nationwide implementation of FEHBP-65, we recognize that a 
test is the only way to dispel the numerous misperceptions about the 
potential dire consequences of opening FEHBP to the uniformed services 
community. For example:
  --Estimates by the Congressional Budget Office (CBO) that FEHBP-65 
        nationwide carries a price tag of about $1.7 billion annually;
  --Assertions that adding uniformed services beneficiaries to the 
        FEHBP could have an adverse impact on the premiums paid by 
        federal civilian participants;
  --Predictions that service beneficiaries would increase their 
        consumption of Medicare benefits;
  --Concerns that the lack of an elderly and infirmed patient base in 
        military hospitals could impair medical readiness; and
  --Speculation that FEHBP would be unaffordable for enlisted members 
        and other low income beneficiaries.
    The Coalition does not agree that any of these concerns should be 
show-stoppers and would like to discuss them in turn.
               taking the guesswork out of fehbp-65 costs
    We turn first to what we believe are grossly overstated CBO cost 
estimates. For example, in doing its analysis, the CBO ignored several 
health care options available to uniformed services beneficiaries which 
the Coalition believes would militate against their participation in 
FEHBP-65. In arriving at its $1.7 billion cost estimate, CBO assumed 
that 70 percent of the 1,300,000 eligible beneficiaries would 
participate in FEHBP-65 if offered. This estimate ignores:
  --The 30-40 percent of the Medicare-eligible uniformed services 
        population who would be accommodated by Medicare Subvention 
        (including DOD's level of effort);
  --The estimated 10 percent who are enrolled in Medicare at-risk 
        Health Maintenance Organizations (HMO's) and would likely 
        remain in these programs;
  --The additional 17 percent who already participate in FEHBP or 
        private sector insurance plans that are equal to or better than 
        FEHBP. (Source 1997 GAO Report);
  --Others who have access to VA facilities--a trend that could 
        increase if VA Subvention is enacted; and
  --Inertia and cost-conscious decision-making. Human nature being what 
        it is, many retirees are likely to be satisfied with the status 
        quo because of cost concerns or an aversion to shifting to a 
        new program.
    In its analysis as shown below, the Coalition assumed a 
conservative 32 percent would participate in Subvention.
[GRAPHIC] [TIFF OMITTED] T02MY11.003


    Thus when Medicare subvention, Medicare at risk HMO's and private 
sector coverage are considered, the residual population of FEHBP-
eligibles is 533,000. The Coalition also considered data from a 1997 
GAO report that indicated about 30 percent of the Service beneficiaries 
have Medigap supplemental policies and would likely switch to FEHBP. 
Further, TMC assumed that an additional 100,000 beneficiaries without 
supplemental insurance would also participate--for a range of potential 
costs of $280 million to $452 million annually--far less than the CBO 
estimate.
                 no impact on federal civilian premiums
    Since a separate risk pool would be established, there would be no 
impact on federal civilian premiums, while there is every likelihood 
the cost to DOD would be further reduced. One fundamental reason is 
that the vast majority of uniformed services beneficiaries are covered 
by Medicare. According to CBO, when FEHBP is combined with Medicare 
Part B, the health care outlays for FEHBP insurers are only 70 cents 
for every dollar of premiums paid. CBO estimates that for individuals 
age 65 and older who are not eligible for Medicare--a phenomenon more 
prevalent among federal civilian retirees than military--FEHBP insurers 
pay out $2.50 for every dollar of premiums paid.
                   medicare impact will be negligible
    The CBO estimate incorporates two assumptions about retiree 
behavior: (1) service retirees will forego care in MTF's to take 
advantage of their Medicare benefit supplemented by FEHBP; and (2) 
enrollment in FEHBP in non-prime areas will result in increased use of 
Medicare by beneficiaries (because if they are paying premiums for 
FEHBP, they might as well get their money's worth).
    The first prediction is tied to CBO's inability to recognize 
(because of scoring groundrules) that when combined with Tricare Prime, 
Tricare Senior will accelerate the demise of Space A care and force 
retirees to use Medicare. Thus, the Medicare impact will occur without 
FEHBP.
    There is no empirical data to substantiate CBO's second assumption. 
A test of FEHBP-65 will eliminate the guesswork.
                           medical readiness
    This misconception about FEHBP-65 stems in part because of DOD 
concerns that FEHBP, if offered to all retirees, would erode the 
patient base that is critical to medical readiness. In fact, there will 
be no impact on readiness because Medicare Subvention (Tricare Senior) 
will provide all the patients needed to meet the clinical training and 
professional experience needs of physicians, corpsmen and other 
ancillary medical personnel.
                        the affordability issue
    This is not a concern the Coalition took lightly, and before 
concluding that FEHBP-65 would be a viable option for its 
beneficiaries, the Coalition conducted a health care cost survey in 
1996. That survey revealed that 32.5 percent of enlisted retirees 65 
and older and 41.8 percent of officer retirees 65 and older would be 
economically better off with FEHBP than under their current health care 
coverage. That represents a significant population who would benefit 
from FEHBP. The proof is in the pudding and a test would help 
corroborate the survey results.
    Mr. Chairman, uniformed services retirees receive considerable 
literature from organizations like the Coalition extolling the health 
care advantages Federal civilian retirees and retirees from large 
corporations have when they become eligible for Medicare. Military 
retirees are well aware that DOD and other agencies in the Federal 
government will spend more than $4 billion in fiscal year 1998 to 
provide federal civilian retirees health care that is second to none. 
Military retirees do not understand, and neither do we, why they should 
not be given the opportunity to participate in this extraordinary 
program as well. Therefore, The Military Coalition is seeking your 
support to appropriate funding to allow Medicare-eligible uniformed 
services beneficiaries, including those eligible for Medicare due to 
disability, to enroll in the Federal Employees Health Benefit Plan 
(FEHBP), the health care benefit available to 9.6 million Federal 
employees and annuitants, including members of Congress. The Coalition 
is of the firm belief that Medicare-eligible uniformed services 
retirees have earned the right to participate in FEHBP-65 and that it 
is a viable means of satisfying the lifetime health care commitment. We 
believe our members would consider this option a reasonable alternative 
to the virtually non-existent military health care because FEHBP 
premiums are less expensive than most Medicare supplemental policies, 
and most FEHBP plans provide better coverage, including a prescription 
drug benefit, at less cost than Medicare supplements.
    For the last two years, the Coalition has been working assiduously 
with Congress to get legislation enacted for FEHBP-65. In early 1997, 
Representative Moran introduced legislation for FEHBP-65 nationwide 
(H.R. 76) and Senator Warner introduced the Senate companion bill (S. 
224). However, because of the less than enthusiastic support accorded 
to those bills by Congress and DOD, the Coalition believes the only way 
to convince the skeptics is to conduct a test of FEHBP-65 along the 
lines spelled out in S. 1334. This bipartisan bill, which now has 58 
cosponsors (236 for its House companion bill, H.R. 1766), would 
authorize a demonstration of FEHBP-65 in two geographic areas--one 
including a Tricare Prime area with military treatment facilities and 
the other without such facilities--and would include no more than 
25,000 Medicare-eligible service beneficiaries in each area. In other 
words, approximately 50,000 beneficiaries would be given the 
opportunity to enroll during the demonstration and, based on the 
participation rate, accurate data could be derived to predict the cost 
of extending the program nationwide. CBO has scored this initiative as 
costing about $68 million each year. The cost would actually be less 
the first year because DOD's share of premiums would be paid for only 
nine months rather than a full year. If need be, for better data 
collection, the test could be conducted at more than two areas, while 
controlling costs by limiting the opportunity to participate to the 
50,000 beneficiaries contemplated by S. 1334.
    The demonstration proposed by S. 1334 is consistent with guidance 
in the Fiscal Year 1998 Defense Appropriations Act which directed DOD 
to submit FEHBP test legislation to Congress this year. This should not 
be too problematic for DOD because last year in a report to Congress, 
Dr. Edward Martin, the Acting Assistant Secretary of Defense for Health 
Affairs, indicated DOD would support a limited test of FEHBP-65 in non-
Prime areas. The only difference between S. 1334 and Dr. Martin's idea 
is S. 1334 would conduct the demonstration in a Tricare Prime catchment 
area. We agree with the approach in S. 1334 that the only way to get 
meaningful data is to put FEHBP in a head-to-head contest with Tricare 
Senior to see how many beneficiaries would opt out of care in an MTF to 
enroll in FEHBP. It's our guess that there will always be more 
applicants for Tricare Senior than the system can accommodate. But, 
with FEHBP to fall back on, DOD could fulfill its commitment to 
servicemembers in a reasonable way.
    It is truly ironic that, despite their many sacrifices, retired 
servicemembers lose their military health insurance at age 65. Please 
keep in mind that those hit hardest by Congress' and DOD's inaction are 
the retirees who fought in World War II, Korea and Vietnam and then won 
the Cold War. The latter victory alone is saving the government many, 
many billions in reduced defense spending every year. These retirees 
have already paid the premiums for equal coverage, not just in money, 
but in service and sacrifice, including many who paid the ultimate 
sacrifice. FEHBP-65 is needed to cover their widows as well.
    The Coalition is anxiously awaiting DOD's proposal, but is 
concerned that DOD is dragging its feet in developing the plan. Timing 
is critical because the Office of Personnel Management indicates that 
even with FEHBP-65 legislation enacted this summer, enrollment for the 
demonstration cannot begin until November 1999 with implementation in 
January 2000. It would be a travesty if the test slipped beyond that 
date.
    Mr. Chairman, the Coalition respectfully requests and strongly 
recommends that this committee include funding to conduct a 
demonstration of FEHBP-65 in its markup of the fiscal year 1999 Defense 
Appropriations Bill.
                       other health care concerns
    The Coalition would like to briefly mention two other concerns that 
are closely related to the Tricare program. First, the almost 400 
percent increase in premiums last year for the Continuing Health 
Benefits Program essentially leaves military beneficiaries without an 
affordable COBRA benefit. The Coalition strongly recommends the 
premiums for CHBP be reduced to a more affordable level for uniformed 
services beneficiaries leaving military service.
    Second, DOD's insistence that all health care programs, including 
dental plans, carry the Tricare name, has created confusion for many 
beneficiaries. The Coalition is especially concerned about the retiree 
dental plan which is totally unrelated to the Tricare program. This 
plan is not subsidized by DOD, but is paid for entirely by the retiree. 
Further, the dental plan is open to retirees of all ages, including 
those who are eligible for Medicare. However, the Coalition has 
received numerous complaints that health care benefits advisors and 
even some DEERS employees have told Medicare-eligible beneficiaries 
they could not participate in the retiree dental plan because it was a 
Tricare plan and therefore only open to CHAMPUS-eligible beneficiaries. 
The Coalition requests that this Committee work with the Senate Armed 
Services Committee to exert pressure on DOD to drop the Tricare name 
from this dental plan so that Medicare-eligible beneficiaries are not 
inadvertently discouraged from participating in this very important 
program.
                               conclusion
    In conclusion, The Military Coalition is cognizant that many of the 
initial problems with Tricare (especially the Prime program) resulted 
from growing pains as Tricare was implemented throughout the country. 
This Committee has been instrumental in ensuring that many of these 
problems have been resolved or at least ameliorated, and the Coalition 
would like to express its deepest appreciation for the Committee's 
role.
    Nevertheless, Tricare remains seriously flawed in that it does not 
provide a uniform health care benefit for all military beneficiaries. 
This fundamental flaw must be remedied through Congressional action as 
soon as possible with enactment of a test for FEHBP-65. The Coalition 
is also very concerned about the increasing difficulty that both the 
Prime and Standard programs seem to be having with locating and 
retaining quality health care providers. The Coalition urges this 
Committee to take immediate measures to strengthen both the Tricare 
Prime and Standard (CHAMPUS) options so that Tricare becomes a viable 
health care benefit.
    Mr. Chairman, in closing, we wish to express our profound 
appreciation to you and this Subcommittee for the opportunity to 
present our views on these critically important topics. We will be glad 
to answer any questions you may have.
                                 ______
                                 
                              attachment a
                         tricare prime problems
    Tricare does not help Medicare-eligible beneficiaries residing 
overseas. These individuals are in a Catch-22 situation. They cannot 
enroll in Tricare Prime because they are no longer eligible for CHAMPUS 
and they cannot use Medicare because that program does not operate in 
foreign countries. Their only alternative is to rely on space available 
care in the military hospitals which is becoming increasingly difficult 
to find since many overseas medical facilities have been closed. 
Unfortunately, Medicare subvention will not help these beneficiaries.
    In addition to the problems faced by Medicare-eligible retirees 
overseas, the Coalition is also concerned by the delay in allowing 
CHAMPUS-eligible retirees to enroll in Tricare Prime overseas. The 
Coalition recommends that DOD Health Affairs expedite the enrollment of 
these individuals.
    Tricare Prime enrollees who do not reside in a catchment area and 
are unable to enroll with a military primary care manager (PCM) have a 
different Prime benefit than those enrollees residing in catchment 
areas who have a military PCM. This situation has been further 
exacerbated by the alternative financing method which will be 
implemented in Tricare Regions 1, 2 and 5. Tricare Prime enrollees in 
noncatchment areas are assigned to civilian PCM's and receive most of 
their care in the civilian Prime network with copayments for all visits 
and services, while enrollees in catchment areas have a greater chance 
of being assigned to a military PCM's and receiving care in MTF's with 
no copayments. The alternative financing method further encourages a 
military commander to ensure that his Prime enrollees (those assigned 
to a PCM in his facility) receive first priority for care in his MTF 
since he now assumes financial risk for these Prime enrollees. This 
incentive could potentially lock out any Prime enrollee with a civilian 
PCM from receiving care in the MTF. The Coalition is concerned that the 
alternative financing method considerably worsens the lack of a uniform 
health care benefit, by effectively creating two distinct Tricare Prime 
plans--an MTF Prime, where enrollees receive most of their treatment in 
MTF's with no co-payments; and a civilian Prime, where enrollees 
receive their care through civilian providers with the requisite 
copayments.
    Although the House mark of the Fiscal Year 1998 Defense 
Authorization Act included report language expressing concern over the 
alternative financing method and requesting DOD test this method in 
only two Tricare regions before extending it throughout the rest of the 
country, the final Authorization Act did not address this issue. The 
Coalition recommends a thorough evaluation of the alternative financing 
methodology to determine its impact on the uniformity of the Tricare 
Prime benefit before allowing DOD Health Affairs to expand this 
methodology to the rest of the Tricare regions. The Coalition also 
requests the Committee's assistance in ensuring that Prime enrollees in 
noncatchment areas have the same equal opportunity for care in an MTF 
as a Prime enrollee in a catchment area with a military PCM.
    Access standards for Tricare Prime are still not being met in most 
Regions. The Coalition continues to document numerous instances in most 
Tricare Regions where access standards for time and for distance have 
not been met. A June 1996 GAO report on Tricare noted that DOD did not 
have a system for tracking access data. The GAO report stressed that 
such a system was extremely important for measuring how well Tricare is 
meeting this key performance goal. Recent briefings from DOD officials 
on their new quality assurance and utilization management contracts 
have not reassured the Coalition that DOD will measure access data 
through this new contract. The Coalition recommends DOD establish a 
method of tracking access data as recommended by GAO. The Coalition 
also requests DOD be directed to give immediate attention to all 
reports of access problems.
    Tricare Prime enrollees are still occasionally charged Tricare 
Standard fees by some civilian health care providers such as 
anesthesiologists and pathologists. These providers are not part of the 
Tricare Prime network, but are sometimes part of the health care team 
at a civilian hospital that is part of the Tricare Prime network. 
Tricare Prime enrollees should not be subjected to these ``hidden'' 
fees. If an enrollee receives care from a civilian hospital that is 
part of the Tricare Prime network, the enrollee should pay only the 
Tricare Prime co-payment of $11 a day and no more.
    Tricare managed care contractors have acknowledged the problem and 
for the most part have tried to ensure that all those who deliver care 
to Prime enrollees participate in the Prime network. The Coalition 
still believes, however, that DOD Health Affairs should revise its 
regulations to stipulate that if an enrollee receives care from a 
civilian hospital that is part of the Tricare Prime network, the 
enrollee will only be subjected to the Tricare Prime co-payment of $11 
a day.
    Tricare Prime enrollees are still occasionally being referred to 
non-network providers, thus invoking point of service charges which 
include a $300 deductible and a 50 percent copay. The point of service 
charges have also been applied when a Prime enrollee has been seen by a 
network provider who happens to be on call that day, but is not the 
enrollee's primary care manager, even though the enrollee did not 
request to be seen by that provider.
    DOD and the contractors have acknowledged the problem and have made 
great progress in correcting it. However, the Coalition believes a more 
permanent solution would be to have a Tricare Prime enrollee sign a 
form that he or she is knowingly choosing to exercise the point of 
service option and realizes the higher copayments and deductibles he or 
she will incur. This will eliminate situations where the Tricare Prime 
primary care manager mistakenly refers the enrollee to a non-network 
provider.
    Tricare Prime enrollees are paying the lion's share of the cost of 
mental health services. The Coalition was appalled to learn that Prime 
enrollees are paying 44 percent to 55 percent of the allowed amount for 
mental health outpatient visits in some Tricare Regions. At the end of 
Attachment A is a copy of a provider's explanation of benefits. On 
pages one and two are the reimbursement rates for active duty and 
retired Prime enrollees. The total allowed amount for the visit is $45. 
Tricare pays $25 of that for an active duty Prime enrollee, and the 
enrollee pays the rest ($20). For a retired Prime enrollee, Tricare 
pays only $20 and the retiree must pay $25. Pages three and four show 
the provider's reimbursement and beneficiary copayment for a Tricare 
Standard beneficiary. Note the provider receives $102 per visit and the 
active duty beneficiary pays $15.30 per visit and the retiree $20.40 
per visit. The copayments under Tricare Standard for both active duty 
and retired beneficiaries are less than under Tricare Prime.
    The Coalition urgently requests that an investigation of the 
prevalence of this sort of disparity in payment be conducted for other 
areas of the country, and for other health care services. The Coalition 
does not believe it is the intent of Congress that Prime enrollees pay 
almost half of the cost of mental health care.
    DOD has not established an effective Ombudsman Program in every 
Tricare Region. The Coalition has received numerous complaints that 
beneficiaries are having a difficult time getting through to the 
Tricare Service Center or Health Benefits Advisor to get questions 
answered about Tricare benefits, or to resolve Tricare Standard 
(CHAMPUS) claims. Frequently, beneficiaries become so frustrated they 
call various Coalition associations in desperation because they feel 
they have no other place to go to get their questions answered. The 
Coalition strongly recommends that DOD be directed to establish an 
Ombudsman office staffed by independent parties (not DOD or the managed 
care contractor) in every Tricare region to serve as the advocate for 
the beneficiary.
    Improve quality control oversight of Tricare managed care support 
contracts, to include better monitoring of patient satisfaction, 
assessment of clinical outcomes, oversight of provider networks, and 
adherence to access standards in addition to utilization management. 
The Coalition remains concerned that DOD continues to focus on 
utilization management as the mainstay of its quality control program, 
while overlooking other equally important measures of quality such as 
adherence to access standards, patient satisfaction and most 
importantly, clinical outcomes. The Coalition recommends a continued 
evaluation of DOD's progress in implementing a more complete quality 
control program.
    The Coalition continues to hear about problems with Tricare Prime 
network providers. Directories of Prime providers are still not 
accurate--in some cases the provider either does not accept Prime 
patients (and never did), or has closed his practice to new Prime 
patients; the offices of some network providers are located in 
undesirable, and even unsafe, parts of town; and there have been 
reports of a dearth of Prime providers, especially specialists. The 
Coalition is particularly concerned even though standard CHAMPUS rates 
are the same as Medicare for most health care services, most of the 
Tricare managed care support contractors have negotiated Tricare Prime 
reimbursement rates with network providers that are even lower than 
Medicare. Although providers are not happy with the discounted rates, 
most providers have accepted them. However, in the last year, some 
major provider groups have dropped out of Tricare Prime (including a 
250-member provider group in Colorado and the entire provider network 
of the Medical University of South Carolina), and we are concerned this 
trend may accelerate. The Coalition urges Congress to take immediate 
steps to increase the reimbursement rates for Prime providers in order 
to attract and retain quality health care providers.
                problems with tricare standard (champus)
    Tricare Standard (CHAMPUS) reimbursement levels are still much too 
low to attract quality health care providers. There are also 
unreasonable delays in reimbursement for Tricare Standard (CHAMPUS) 
claims. The Coalition has continuously expressed its concern over the 
low CHAMPUS reimbursement rates. Beneficiaries have reported that in 
the more rural areas, (and increasingly even in urban areas), where 
providers do not depend on a military patient base, health care 
providers have become increasingly unwilling to accept Tricare Standard 
(CHAMPUS) patients at all.
    It is difficult to estimate the impact of the lower rates on access 
to care. Although the Secretary of Defense has the authority to waive 
the CHAMPUS Maximum Allowable Charge (CMAC) if it is affecting access, 
the Tricare Support Office (TSO) has never requested such a waiver, 
claiming it has never adequately documented access problems. However, 
this is akin to a self-fulfilling prophecy because the TSO only reviews 
CHAMPUS claims where the only data provided are from those physicians 
or other health care providers who are willing to accept Tricare 
Standard reimbursement levels. The TSO does not document how far the 
beneficiary may have had to drive to find a provider, how many times he 
was turned away before he was able to find a provider; or what rates 
are charged by providers who refuse to accept Tricare Standard.
    The low reimbursement rates are just part of the problem. By 
themselves, low rates may not be a deterrent to care. However, low 
rates combined with the ``hassle'' factor in filing claims and delays 
in reimbursements have proven to be too much in some cases for health 
care providers who now simply refuse to accept CHAMPUS patients at all. 
The Coalition has also received numerous complaints from its members 
who, when filing their own CHAMPUS claims, had to resubmit the claim 
two or three times before receiving payment.
    Although the Fiscal Year 1998 Defense Authorization Act has a 
provision directing DOD to make CHAMPUS reimbursement rates more 
consistent with Medicare, the Coalition has heard that DOD is delaying 
implementation of this provision. The Coalition would like a definitive 
date as to when DOD is going to increase substandard CHAMPUS rates to 
the level of Medicare.
    Another significant problem that must be addressed is the delays in 
reimbursements. The Coalition urges Congress to exert pressure on DOD 
to simplify the claim form and exercise greater oversight to 
significantly reduce unwarranted delays in reimbursements.
    The Coalition was very pleased to see that Section 737 of the 1998 
Defense Authorization Act eliminated DOD's policy that required all 
providers to file CHAMPUS claims. We are particularly pleased with 
DOD's prompt compliance.
    However, allowing beneficiaries to resume filing their own claim 
forms has presented yet another problem. Several years ago DOD required 
non-availability statements (NAS) for certain outpatient procedures. 
The outpatient NAS requirement was repealed on September 23, 1996. In 
its place pre-authorization for these procedures, and others that have 
subsequently been added, was instituted. Since DOD does not even print 
enough Tricare Handbooks for the beneficiary population, much less send 
them out to beneficiaries, family members have no indication that they 
must get pre-authorization for certain procedures. The Coalition has 
heard from beneficiaries with substantial unpaid claims. These 
beneficiaries have sought care from nonparticipating Tricare providers 
(as is their right under the Tricare Standard option), paid the bill, 
submitted their claim to Tricare, only to be told that since pre-
authorization was not sought, the procedure will not be covered. This 
has not only affected families who live near military hospitals, but to 
families stationed in remote areas.
    The Coalition understands that it is normal practice for employers 
or insurance companies to provide covered beneficiaries with 
information regarding the benefits and limitations of their health care 
plans. Thus we believe that if DOD intends to subject Tricare Standard 
beneficiaries to restrictions on their receipt of health care, at the 
very least it should provide them with up to date Tricare Standard 
Handbooks.
    The enforcement of the 115 percent billing limit in cases of third 
party insurance, has resulted in loss of reimbursement to 
beneficiaries. Last year, DOD's policy of employing the 115 percent 
limit in the case of third party reimbursement had the effect of 
shifting CHAMPUS' payment approach from ``coordination of benefits'' to 
``benefits less benefits.'' Before the 115 percent limit was enforced, 
a third party insurer would pay first, then CHAMPUS would pay the 
balance up to what CHAMPUS would have paid had it been first payer. Now 
that the 115 percent limit has gone into effect, CHAMPUS will not pay 
anything if the third party insurer paid an amount in excess of the 115 
percent billing limit. So if a third party insurer would pay 80 percent 
of a physician's bill of $500 (or $400), but CHAMPUS would only have 
paid 115 percent of its maximum allowable charge of $300 (or $345), 
CHAMPUS will pay nothing toward the balance of $100 that the patient 
must pay. Under the previous ``coordination of benefits'' method, 
CHAMPUS would have paid the difference as long as it did not exceed the 
amount payable under CHAMPUS. We have repeatedly expressed our concern 
that the shift in policy unfairly penalizes beneficiaries with other 
health insurance plans. CHAMPUS reimbursement amounts have been 
steadily decreasing over the years, and almost all other civilian 
insurance plans are more generous than CHAMPUS in their payments to 
providers.
    The House mark of the Fiscal Year 1998 Defense Authorization Act 
contained report language that urged DOD to enforce a requirement that 
health care providers charge CHAMPUS beneficiaries no more than 115 
percent of CMAC rate, or that CHAMPUS continue to pay for health care 
services when paying as second payer to other health insurance under 
DOD's previous policy. Unfortunately the committee report was not 
addressed in the final Act. The Coalition recommends this issue be 
revisited in the Fiscal Year 1999 Defense Authorization and 
Appropriation Acts to include statutory language to re-establish 
``coordination of benefits'' as the DOD payment methodology.
    The Tricare Standard (CHAMPUS) catastrophic cap out of pockets is 
still $7,500 for retirees, which is much higher than other civilian 
fee-for-service plans which traditionally set limits between $2,000 and 
$3,000. The Coalition strongly recommends this cap be reduced to 
$3,000.
    Beneficiaries who choose Tricare Standard still have to obtain non-
availability statements from the MTF before seeking inpatient care from 
civilian providers. While the Coalition recognizes that DOD is trying 
maximize savings in Tricare by encouraging the use of military 
providers, beneficiaries who incur the higher costs associated with 
Standard do so because they either want complete freedom of choice of 
providers or cannot get into Tricare Prime. The Coalition strongly 
recommends that all NAS requirements be eliminated for Tricare 
Standard.
STATEMENT OF DR. DONALD S. BURKE, MEMBER OF LEGISLATIVE 
            TASK FORCE, AMERICAN SOCIETY OF TROPICAL 
            MEDICINE AND HYGIENE
    Senator Inouye. Our next witness, Dr. Donald Burke, member 
of the Legislative Task Force, American Society of Tropical 
Medicine and Hygiene.
    Dr. Burke, welcome, sir.
    Dr. Burke. Thank you, Senator Inouye. I am here to 
represent the American Society of Tropical Medicine and 
Hygiene, a society of 3,000 researchers and tropical medicine 
practitioners in the United States. The Department of Defense 
medical research programs play a critical role in our Nation's 
infectious disease efforts as you know, sir. Working with other 
U.S. institutions, our military institutions have worked to 
help us understand, diagnose, and treat infectious diseases 
such as malaria, dengue fever, cholera, AIDS, and diarrheal 
diseases.
    There are two particular aspects I want to take these 
moments to emphasize. The first are the overseas laboratories 
of the U.S. military, the fixed facilities in Thailand, 
Indonesia, Egypt, Brazil, Kenya, and Peru. These labs are 
strategically located in regions of the world where the threats 
from infectious diseases are genuine. They serve as critical 
sentinel alerting stations.
    The DOD has recently initiated a disease surveillance 
system for emerging diseases worldwide. However, the current 
funding for this program has not been sufficient to meet the 
needs of this program. The Tropical Medicine Society urges the 
committee to provide an estimated $7 million in new research 
and development funds that will allow the DOD to fully develop 
and operate this surveillance network.
    Another problem is that these laboratories have not had 
attention to their infrastructure. In the last 2 years the Navy 
Medical R&D Command had a 40-percent reduction in their 
investment in their overseas laboratory infrastructure dollars. 
These overseas laboratories are too important to be allowed to 
deteriorate.
    The second major area of emphasis is in vaccine research 
and development. Vaccines are the single most cost-effective 
means for protecting U.S. military against infectious diseases 
during deployment. A number of vaccines have been successfully 
developed by the military, and there is excellent progress on 
some, like malaria, dengue, and good work being done on AIDS.
    However, a number of promising vaccines such as 
meningococcis, hantavirus, and hepatitis E vaccines are in the 
pipeline but are not being pursued for lack of funding. The 
Tropical Medicine Society urges the subcommittee to provide 
sufficient resources to move these vaccines into clinical 
trials. These trials will impact not only military 
preparedness, but will advance public and private interests as 
well.
    Let me conclude by saying that the Tropical Medicine 
Society requests your continued support of the DOD infectious 
disease research program. This is a critically important area, 
given the resurgence of emergent new diseases. However, there 
are many areas of unmet need and opportunity still to be 
addressed.

                           prepared statement

    With the shrinking U.S. military, coupled with the need to 
respond to conflict anywhere in the world, it is more important 
than ever to preserve this combat readiness. Like other 
military research, medical research cannot easily be restarted 
when the need arises.
    Thank you very much, sir.
    [The statement follows:]
                 Prepared Statement of Donald S. Burke
    Mr. Chairman and members of the Committee, thank you for the 
opportunity to testify today. My name is Donald Burke and I am a 
Professor of International Health in the School of Hygiene and Public 
Health at Johns Hopkins University. I am pleased to present testimony 
on behalf of the American Society of Tropical Medicine and Hygiene 
(ASTMH) in support of Department of Defense (DOD) medical research 
programs.
    ASTMH is a professional society of 3,500 researchers and 
practitioners dedicated to the prevention and treatment of infectious 
and tropical infectious diseases. The collective expertise of our 
members is in the areas of basic molecular science, medicine, vector 
control, epidemiology, and public health. ASTMH has had the privilege 
of testifying before this Subcommittee on several occasions, and we 
hope that our recommendations are helpful to you in determining the 
annual funding levels for DOD's infectious disease research programs.
    DOD medical research programs play a critical role in our nation's 
infectious disease efforts. Working with other U.S. public health 
agencies, DOD scientists at the U.S. Army Research Institute for 
Infectious Diseases (USAMRIID), the Walter Reed Army Institute of 
Medical Research (WRAIR), and the U.S. Naval Medical Research Institute 
(NMRI) are helping us to better understand, diagnose, and treat 
infectious and tropical diseases such as malaria, dengue fever, 
cholera, AIDS, and diarrheal diseases.
    The threat these diseases pose to U.S. military personnel is not 
new. During the Vietnam War, two-thirds of hospital admissions were due 
to infectious diseases. More recently, twenty-nine percent of soldiers 
deployed in Somalia in 1993 got malaria, making it the number one cause 
of all hospital admissions in Somalia. U.S. soldiers will continue to 
be deployed in regions of the world where the threat of infectious 
disease exists.
    Military medical research has, over the years, been very successful 
in providing the armed forces with a series of new vaccines, new 
prophylactic drugs, and other preventive medicine measures. However, 
emerging infectious diseases are a continuing threat to military 
effectiveness during deployments. Infectious disease research support 
by DOD continues to be essential to protect our fighting men and women 
from infectious diseases through the development of vaccines and 
preventive medicines, and to enable infected personnel to return to 
duty through the development of effective therapies.
    These programs also fill a critical need by helping to identify 
endemic and epidemic disease threats throughout the world, assisting 
not only U.S. military needs but other U.S. health and humanitarian 
needs as well. DOD technical expertise is consistently sought as 
organizations such as the World Health Organization and the Pan 
American Health Organization are faced with new infectious disease 
outbreaks around the globe.
Sentinels Around the Globe
    I would like to take a moment to focus on one aspect of the U.S. 
military infectious disease research program which deserves special 
mention--the overseas laboratories. The U.S. Army and the Navy 
currently support six overseas laboratories in Thailand, Indonesia, 
Egypt, Brazil, Kenya, and Peru. These labs are strategically located in 
regions of the world where the threat from existing and emerging 
infectious and tropical diseases is the greatest. They serve as 
critical sentinel stations alerting both the military and public health 
agencies to dangerous infectious disease outbreaks and increasing 
microbial resistance. Because they are located close to the source, 
laboratory personnel can be mobilized to respond quickly to potential 
problems. For example, recently a U.S. Navy scientist responded to a 
call from the World Health Organization during an outbreak of severe 
hemorraghic fever in Kenya. This laboratory in the region had been 
conducting research on Rift Valley fever and could respond quickly and 
effectively to provide assistance to local authorities with diagnosis, 
prevention and control measures.
    A recent report by the Institute of Medicine (IOM) entitled, 
``America's Vital Interest in Global Health'', highlights the 
leadership role the U.S can play in expanding the scope of global 
surveillance efforts. The report cites the cost-effectiveness of 
surveillance as well as the devastating cost of our failure to support 
global disease surveillance in the face of emerging infectious 
diseases. The IOM recommended that the U.S. take advantage of existing 
field research laboratories and expand their scope and linkage to other 
global health organizations. U.S. technical expertise and 
communications advantages makes us uniquely suited to play a leadership 
role in this effort. In fact, the DOD has recently initiated a disease 
surveillance system for emerging infectious diseases with the Walter 
Reed Army Institute of Medical Research acting as the communications 
hub linking the six overseas laboratories. However, the current funding 
for this program has not been sufficient to meet the needs of a global 
surveillance system. Therefore, ASTMH urges the Committee to provide 
the estimated $7 million in new research and development funds needed 
to allow DOD to fully develop and operate a global disease surveillance 
network. This will provide the necessary resources to properly 
implement an effective program of epidemiologic and preventive medicine 
research for a number of major infectious disease threats, such as 
malaria, cholera, viral hemorrhagic fevers including dengue, Rift 
Valley fever, yellow fever, and Machupo, the hantaviruses, tropical 
fevers such as Venezuelan equine encephalitis and Orapouche, and 
serious parasitic diseases such as systemic leishmaniasis.
    The military's overseas laboratories also play an important role in 
collaboration with U.S. research institutions including academia, 
industry, and government agencies. Having the fixed facilities, field 
sites, and staff makes it possible to maximize our infectious and 
tropical disease research efforts. These collaborations are important 
not only for expanding our knowledge and understanding of infectious 
diseases, but also for providing hands-on training for students, 
investigators, and local health authorities. In many cases, these sites 
have ensured that productive projects could be carried out. 
Collaboration between the Walter Reed Research Unit in Rio de Janeiro, 
Harvard School of Public Health scientists, the Naval Medical Research 
Institute detachment in Lima, Peru, and the University of Texas at 
Galveston School of Medicine has resulted in important advances in 
malaria research and in improved international infectious disease 
surveillance capabilities.
    It is important to mention that while the DOD overseas research 
laboratories play an essential role in our basic, clinical and 
epidemiological infectious diseases research efforts, we must not 
forget to provide funding for overhead--the infrastructure needed to 
support research programs. In the last two fiscal years, the Naval 
Medical Research and Development Command has had a 40 percent reduction 
in support for overhead costs in Navy overseas medical research 
laboratories. These overseas laboratories are too important to be 
allowed to deteriorate.
Vaccine Development
    Vaccines are the single most effective and cost-effective means of 
protecting military personnel from infectious diseases during 
deployment. DOD research facilities have unique expertise, experience 
and capabilities in developing vaccines and conducting vaccine trials. 
They are currently conducting clinical trials on a number of promising 
experimental vaccines. These include vaccines for dengue fever, 
malaria, shigella, and AIDS. In addition, a number of promising 
vaccines, such as meningococcal B, hantavirus, and hepatitis E 
vaccines, are in the pipeline but are not being pursued due to a lack 
of funding. ASTMH urges Subcommittee members to provide sufficient 
resources to move these vaccines to clinical trials. These clinical 
trials will not only impact military preparedness but will advance 
existing public/private vaccine development partnerships.
    One of the most critical and complex areas for vaccine development 
is malaria. Malaria infects 300-500 million people annually and kills 
an estimated 2.1 million people every year. As it continues to spread 
and drug-resistant forms become more frequent, new drug and vaccine 
development is critical. DOD research has already resulted in the 
development of two new drugs for the prevention and treatment of 
malaria, Mefloquine and Halofantrine. Research on vaccine development 
is moving forward quickly. In fact, collaborative vaccine development 
efforts between WRAIR and a private pharmaceutical company have moved 
to the clinical testing phase and the results are promising. This 
research has produced the first vaccine which has protected volunteers 
from mosquito-born malaria infection. Researchers with the NMRI are 
also at the forefront of efforts to develop a DNA vaccine against 
malaria.
    Scientists from NMRI and WRAIR are also working with scientists 
from the Institute from Genomic Research to sequence the genome of 
plasmodium falciparum, the most common human malaria parasite. DOD has 
indicated that it will invest as much as $8 million over five years in 
the project. Understanding of the genome is central to our ability to 
develop an effective DNA malaria vaccine.
    We are making progress but we cannot move forward without the 
involvement of military scientists and a sustained funding commitment.
Conclusion
    The ASTMH requests your continued support of DOD Infectious 
Diseases Research programs. This is critically important given the 
resurgent and emerging infectious disease threats which exist today. 
The DOD programs are essential to advancing our war on infectious 
diseases and to protecting America's military forces. We are pleased 
that the Administration's request for infectious disease research 
programs does not cut current funding levels. However, as indicated in 
our testimony, there are many areas of unmet need and opportunity. 
Failure to act now will only result in health care cost increases for 
the military and threaten future troop deployments.
    With a shrinking U.S. military, coupled with the need to respond to 
conflict anywhere in the world, it is more important than ever to 
preserve combat readiness. Like other military research, medical 
research cannot easily be restarted whenever the need arises.
    Thank you for your consideration of our requests. I would be 
pleased to respond to any questions.
                                 ______
                                 
                         disclosure information
    The American Society of Tropical Medicine and Hygiene (ASTMH) has 
received the following federal support:
    National Institutes of Health (1997), $7,000.
    Purpose: To support travel expenses of selected outstanding young 
investigators from developing countries, allowing them to participate 
in the Society's annual scientific meeting.
    U.S. Army (1996), $15,000.
    Purpose: To support travel expenses of selected outstanding 
investigators from developing countries, allowing them to participate 
in the Society's annual scientific meeting.
    National Institutes of Health (1996), $7,000.
    Purpose: To support travel expenses of selected outstanding 
investigators from developing countries, allowing them to participate 
in the Society's annual scientific meeting.

    Senator Inouye. May I ask, what is shigala?
    Dr. Burke. Shigala is one type of diarrhea that can cause 
bloody diarrhea. It is very common in persons who are in 
tropical countries, sir.
    Senator Inouye. And what is Rift Valley Fever?
    Dr. Burke. That is a hemorrhagic fever not unlike the Ebola 
in terms of its clinical manifestations, but it is transmitted 
by biting insects.
    Senator Inouye. And Machupo?
    Dr. Burke. That is another one of the hemorrhagic fevers. 
These are all the emerging disease threats that are considered 
a real problem when you put people into tropical disease areas, 
particularly in Africa, and the U.S. military has particular 
expertise in these diseases, what with the facility at Fort 
Dietrich.
    Senator Inouye. Is there coordination between the military 
and, say, NIH?
    Dr. Burke. There is a good degree of coordination. The 
military tends to focus more on the international disease 
threats and the more severe disease threats that might be 
encountered by military personnel. The NIH tends to focus more 
on the domestic population disease threats. There is a lot of 
collaboration, particularly on diseases like malaria.
    Senator Inouye. Thank you very much, doctor.
STATEMENT OF HOLLY E. HAZARD, EXECUTIVE DIRECTOR, DORIS 
            DAY ANIMAL LEAGUE
    Senator Inouye. Our next witness is the executive director 
of the Doris Day Animal League, Ms. Holly Hazard.
    Ms. Hazard. Thank you, Senator Inouye. I am going to 
synopsize my comments to make my comments as brief as possible.
    In the 1960's the Air Force acquired a colony of 
chimpanzees for testing space travel before any American 
astronaut went into space. The Air Force, which has not used 
chimpanzees for space research since 1970, has leased them to 
various laboratories and has now decided to either retire the 
animals to a sanctuary, or to transfer them to yet another 
research facility through a competitive bidding process. There 
are currently 142 chimpanzees under the Air Force's care.
    The U.S. Congress authorized this divestiture of the 
chimpanzees in the 1997 National Defense Authorization Act. The 
humane community is working diligently to place a bid on these 
animals. The Center for Captive Chimpanzee Care, directed by 
Jane Goodall and others, has been formed for the specific 
purpose of offering these chimpanzees a new life.
    The center envisions a place where chimpanzees can learn to 
interact in social groupings without enclosures and to live out 
the rest of their lives as best a chimpanzee can in a captive 
environment. We have secured architectural plans and are 
looking for an appropriate site and acquired an executive 
director.
    We have managed to raise $1,195,000 in the last 6 months, 
some of it in a challenge grant, and I have just learned that 
the Doris Day Animal Foundation has agreed to add another 
$100,000 to this pot, but this amount, although staggering in 
the realm of the nonprofit world, is woefully short of the 
amount needed to successfully bid and provide a secure future 
for these animals.
    Meanwhile, the bidding process has been fraught with bias 
and inequities that tipped the process significantly in favor 
of the status quo. We have been given conflicting information 
as to who owns the $10 million building that was financed by 
the Federal Government and in which many of the chimps are 
housed on Holloman Air Force Base.
    The Air Force Base has referenced $1.2 million in 
endowments that supposedly accompany some of these animals 
specifically for their retirement. However, the funds, which 
are maintained by the Coulston Foundation, the current leasee, 
have been placed in an irrevocable trust and will not be 
transferred with the chimpanzees, according to the Air Force.
    The humane community may be forced to bid on these animals 
against a bidder who has already been awarded Federal money for 
their lifetime care, but which will not release the funds.
    The humane community wants to do what is right by these 
animals. To do so will stimulate research into how best to care 
for other captive chimpanzees. It will provide a model 
sanctuary as recommended by a recently convened NIH-sponsored 
NAS commission on the care of captive chimpanzees and also by 
the Speaker of the House of Representatives, but the humane 
community cannot do it alone.
    We did not capture these animals. We did not perform 
research on these animals. We did not warehouse them. However, 
we are willing, indeed we are excited to work in a public-
private partnership to solve this problem, but we cannot do it 
without your help.
    The Air Force has given us until June 3 to present a 
proposal. It is unlikely we can meet our fund-raising goal by 
this deadline, although we are doing all we can.
    The United States Government must take some of the 
responsibility for these products of its progress. These 
chimpanzees should not be auctioned to the highest bidder. They 
are not old jets or broken tanks.
    On behalf of our 200,000 members and supporters and the 
hundreds of thousands of humane citizens organized with other 
animal protection organizations we are asking this committee to 
appropriate one-half of the money needed for the chimpanzees' 
lifetime care, or $8 million for fiscal year 1999.
    Thank you.
    Senator Inouye. I must confess to you that this is a 
problem that we have not coped with too often. Is this doctor 
for real, the one that you quote, this Dr. Coulston?
    Ms. Hazard. Yes.
    Senator Inouye. Is he for real?

                           prepared statement

    Ms. Hazard. I have not met him personally. I have only seen 
videotapes of his comments. He is actually, unfortunately all 
too real.
    Senator Inouye. I can assure you that I will urge my 
colleagues to read your testimony very carefully.
    Ms. Hazard. Thank you very much, Senator Inouye.
    [The statement follows:]
                 Prepared Statement of Holly E. Hazard
    As John Glenn proudly comes forward to serve his country once again 
in a flight into space, we are reminded of the risks that he and others 
took, the caliber of the man, and of all of his subsequent 
accomplishments.
    However, there are some space veterans who have been ignored by the 
media and the American public for the past 35 years. No one speaks of 
their heroism, their sacrifice, and certainly not of their bright 
future. These are the ``Chimpmonauts'' and their descendants, currently 
under the ownership of the U.S. Air Force, and leased out to a private 
biomedical research laboratory. These 142 chimpanzees, who share 98.4 
percent of our DNA, are the survivors and descendants of an original 
colony of 65 infants who were taken from their families in the jungles 
in Africa. Brought to the United States, they were trained to explore 
the safety of space travel prior to manned flight.
    In November 29, 1961, five-year old Enos was launched into space 
inside a Mercury Capsule. Due to a malfunction, Enos was given an 
electric shock for every correct maneuver he made, a reward-punishment 
system that contradicted over a year of training. Rather than alter his 
behavior, Enos endured the shocks and performed the flight tasks he 
knew were right. The test flight took Enos on a two-orbit ride and 
landed him alive. This qualified the system for manned flight, and the 
following year John Glenn orbited the earth three times.
    The Air Force, which has not used the chimpanzees for space 
research since 1970, has leased them to various laboratories, and has 
now decided to either ``retire'' these animals to a sanctuary or to 
transfer them to yet another research facility through a competitive 
bidding process.
    The United States Senate authorized this divestiture under the 1997 
National Defense Authorization Act, which states that the Air Force 
must employ a competitive negotiated bid process for the animals and 
must divest itself of the primate research complex at no cost to the 
Air Force. It is not clear whether this financial stipulation applies 
to the chimpanzees themselves or not.
    The humane community is working diligently to place a bid on these 
animals. The Center for Captive Chimpanzee Care, directed by Dr. Jane 
Goodall and others, has been formed with the specific purpose of 
offering these chimpanzees a new life. The Center envisions a place 
where chimpanzees can learn again to interact in social groupings, with 
outdoor enclosures, and live out the rest of their years as best a 
chimpanzee can in a captive environment.
    We have secured architectural plans, are looking for an appropriate 
site and have hired an Executive Director. We have managed to raise 
$1,195,000 in less than six months, but this amount, although 
staggering in the realm of the nonprofit world, is woefully short of 
the amount needed to successfully bid and provide a secure future for 
the animals.
    Meanwhile, the bidding process has been fraught with bias and 
inequities that tip the process significantly in favor of the status 
quo. We have been unable to obtain specific medical, experimental and 
social information on each chimpanzee or to view property associated 
with the chimps' care that may be available through the divestiture. We 
have even been given conflicting information as to who owns the $10 
million building in which many of the chimps are housed on Holloman Air 
Force Base.
    The current lessee, The Coulston Foundation, is a private research 
laboratory that already owns over 500 chimpanzees. It may submit a bid 
to assume permanent ownership of the Air Force chimpanzees. The 
Foundation's director, Dr. Frederick Coulston, is a controversial 
figure. According to a Wall Street Journal article from December 30, 
1997, Coulston is quoted as saying, ``I would like to have 5,000 
[chimps] to use, eventually, as organ donor banks for humans. * * * He 
calls AIDS a `silly disease' whose sufferers should have been forced to 
display `a big sign on the door saying `Quarantine' * * * He says he 
had to turn to chimps when his work with human subjects--prisoners--was 
halted in the 1960's.'' \1\
---------------------------------------------------------------------------
    \1\ The Wall Street Journal, December 30, 1997.
---------------------------------------------------------------------------
    The current lessee was charged in 1995 by USDA with multiple 
violations of the Animal Welfare Act, including the overheating deaths 
of three chimpanzees. The case was settled after the lessee agreed to 
pay a $40,000 fine. Earlier this year, USDA filed an unprecedented 
second set of charges, including the negligent deaths of two 
chimpanzees and seriously deficient housing and sanitary conditions. It 
is our position that the chimpanzees for whom our government is 
responsible should be removed from this environment forthwith, much 
less be subjected to a bid process under which they might remain at 
this facility permanently.
    The Air Force has referenced $1.24 million in endowments 
accompanying some of the animals. However, the funds, which are 
maintained by The Coulston Foundation, have been placed in irrevocable 
trust funds and will not be transferred with the chimpanzees. The 
humane community may be forced to bid on these animals against a bidder 
who has already been awarded federal money for their lifetime care, 
which can be used to prove his financial ability to provide for the 
animals. This appears to run counter to Congressional intent.
    The humane community wants to do what is right by these animals. To 
do so will stimulate research into how best to care for other captive 
chimpanzees. It will provide a model for a ``sanctuary'' as recommended 
by a recently convened NIH-sponsored NAS Commission on the care of 
captive chimpanzees,\2\ and also the Speaker of the House.\3\
---------------------------------------------------------------------------
    \2\ ``Chimpanzees in Research: Strategies for Their Ethical Care, 
Management and Use'', National Research Council, 1997.
    \3\ ``Gingrich Supports Chimpanzees Home'', The New York Times, May 
5, 1998.
---------------------------------------------------------------------------
    But the humane community cannot do it alone. We did not capture 
these animals. We did not perform research on these animals. We did not 
warehouse them. However, we are willing, indeed excited, to work in a 
public/private partnership to solve this problem, but we cannot do it 
without your help.
    The Air Force has given us until June 3rd to present a proposal; it 
is unlikely we can meet our fundraising goal by this deadline, although 
we are doing all we can. The United States government must take some 
responsibility for these ``products'' of its progress. These 
chimpanzees should not be auctioned to the highest bidder. They are not 
old jets or broken tanks. They deserve the best care, not the easiest 
outcome, the Air Force can provide. This is true even if it means some 
additional cost for the United States government.
    The chimpanzees cannot speak out on their own behalf, they cannot 
recount their history and accomplishments, they cannot lobby the United 
States Senate or direct their fate. But every American who ever looked 
up into the heavens to pray for our astronauts can recognize what we as 
a nation owe these individuals, and can act on this conviction. Please 
appropriate the funds necessary to help us help them live out their 
lives in peace.
STATEMENT OF FRANCES M. VISCO, PRESIDENT, NATIONAL 
            BREAST CANCER COALITION
    Senator Inouye. Our final witness is the president of the 
National Breast Cancer Coalition, Frances Visco. Ms. Visco.
    Ms. Visco. Good afternoon, Senator Inouye. I just want to 
highlight some of the points from my testimony, because my 
testimony has been submitted for the record.
    I want to certainly thank you on behalf of the National 
Breast Cancer Coalition, you and Chairman Stevens, for your 
ongoing support of the Department of Defense peer review breast 
cancer research program.
    I know that you know the importance of this program to the 
women in the military, and to military dependents, and also the 
incredible benefits that have accrued to the Defense Department 
as a result of the program, enriched partnerships and 
collaborations with the academic and scientific community, and 
also a message to the women in the military of the importance 
of their issues.
    We, as you know, have a plan, a plan by which we spend the 
money appropriated for this program, and the plan has been 
incredibly successful. It is a plan that helps us look at what 
has happened in the world of science over the past couple of 
years.
    We can respond very quickly to what is happening out there, 
and we make certain that the money goes where it is going to 
have the strongest effect, and I think the recent news on 
cancer research highlights the importance of what it is that we 
have been doing through this program.
    You know, the cancer drug through Jude Folkeman's research 
on antiangiogenesis, he has had that idea for 30 years, and no 
one would fund him. The traditional funding mechanisms would 
not believe that it was a worthwhile idea.
    Well, the Department of Defense program is filling gaps 
like that. At the Food and Drug Administration right now there 
has been filed a request for approval of a very exciting, 
innovative therapy for breast cancer treatment, and this new 
therapy was funded in part through DOD funding while no one 
else would give the funding for that part of this research, so 
that is the kind of places where this program puts its money 
and where we put our money.
    Now, we are collaborating through this program with the 
National Institute of Health [NIH] and the National Cancer 
Institute [NCI] so that we do know what is going on there and 
what is happening in the outside world. Equally important, the 
integration panel that oversees this panel of which I am a 
member has outside scientists. It has representatives from the 
National Cancer Institute, but it also has primarily renowned 
scientists from the outside community, and so we are constantly 
getting information on what is happening in the world of 
research into breast cancer.
    I think another very important thing that has happened 
through this program, of which we can all be proud, is this 
past year we had the Era of Hope meeting in Washington, D.C., 
and I am very sorry that you could not attend that meeting. It 
was incredible, where for the first time ever the taxpayers of 
this country were given a detailed report of what happened with 
their tax dollars. It was incredibly successful and we are 
going to continue to do that.

                           prepared statement

    While we are making great strides, the vast majority of the 
research is not getting funded. The proposals that score well 
are not getting funded through this program, and that is why we 
presented to the committee this morning a letter from 63 of 
your colleagues in the Senate in support of your request for 
$175 million to continue this incredible program.
    But once again, I want to thank you.
    [The statement follows:]
                 Prepared Statement of Frances M. Visco
    Thank you, Mr. Chairman and members of the Appropriations 
Subcommittee on Defense for your exceptional leadership in the effort 
to increase and improve breast cancer research. As my testimony will 
describe in detail, the investment in cancer research made by you and 
this Committee is one of the contributions which has brought us closer 
than ever to the verge of significant discoveries about cancer. I am 
Fran Visco, a breast cancer survivor, a wife and mother, a lawyer and 
President of the National Breast Cancer Coalition (NBCC).
    As you know, the NBCC, a grassroots advocacy organization made up 
of over 450 organizations and tens of thousands of individuals, has 
been working since 1991 toward the eradication of breast cancer through 
advocacy and action. The NBCC's goals are (1) to increase the federal 
funds available for research into breast cancer and to focus research 
on prevention, on finding the cause of and a cure for this insidious 
disease; (2) to make certain that all women have access to the quality 
care and treatment they need, regardless of their economic 
circumstances and (3) to increase the influence of women with breast 
cancer in the decision making that affects their lives.
    On behalf of the NBCC and the 2.6 million women who are now living 
with breast cancer, I thank you for your strong past support of the 
Department of Defense's (DOD) peer-reviewed Breast Cancer Research 
Program and I urge your continued support of this important program 
with an appropriation of $175 million for the program for fiscal year 
1999. The NBCC believes this program is vital to the eradication of 
breast cancer. And we are not alone, I have with me a letter signed 
from over 50 of your colleagues in the Senate which requests that the 
DOD peer-reviewed Breast Cancer Research Program be funded at $175 
million for fiscal year 1999.
    As a member of the Integration Panel that implements the DOD Breast 
Cancer Research Program, I have witnessed the evolution of this 
program. In just five short years, the program has matured from a 
small, isolated research program to a broad-reaching influential voice 
forging new and innovative directions for breast cancer research and 
science. The flexibility of the program has allowed the Army to 
administer this groundbreaking research effort with unparalleled 
efficiency and skill. In addition, an inherent part of this program has 
been the inclusion of consumer advocates at every level, which has 
created an unprecedented working partnership between advocates and 
scientists and ultimately led to unchartered research in breast cancer.
    It is important to note that the DOD Integration Panel that designs 
this program has a plan on how best to spend the funds appropriated. 
This plan is based on the state of science--what we know--the gaps that 
exist in our knowledge and the needs of women and their families. This 
plan exists within our philosophy that we do not want to restrict 
scientific freedom, creativity and innovation. While we carefully 
allocate these resources we do not want to predetermine the specific 
research areas to be addressed. This permits us to complement and not 
duplicate other federal funding programs. For example, the recent 
announcement of two new drugs that will go into clinical trials for 
cancer based on the preliminary work of Judha Folkman, highlights the 
importance of this philosophy. The DOD Breast Cancer Research Program 
funds ideas similar to Dr. Folkman's--those that are not easily 
accepted within traditional funding programs. In addition, a possible 
new revolutionary therapy for breast cancer is now before the FDA for 
approval. This therapy comes from research that in part was funded 
through the DOD program, when no one else would support the research.
    The NBCC, and its members, are dedicated to working with you to 
ensure the continuation of funding for this program at a level that 
allows this research to forge ahead. Just last week, our members were 
up on Capitol Hill to bring our message to Congress. We had over 600 
breast cancer activists from across the country join us at our Annual 
Advocacy Training Conference to continue to mobilize behind the efforts 
to eradicate breast cancer. The overwhelming interest and dedication to 
eradicate this disease continues to be evident as people are willing to 
come all the way to Washington, D.C.--paying the expenses out of their 
own pocket and taking time away from their careers and families--to 
deliver their message about the importance of our commitment.
    Breast cancer costs this country untold dollars in medical costs, 
lost resources, lost productivity, and in lost lives. The war against 
breast cancer, the search for answers to what causes the disease, how 
we can prevent it, how we can cure it--these are immense issues, 
requiring a concerted, coordinated effort on the national level. Breast 
cancer is not just an issue for one month, but an ongoing crisis.
    However, as is becoming more and more apparent in the media, we 
seem to be on the brink of a historical moment for cancer research. 
Recent discoveries and breakthroughs in cancer treatment have created 
extraordinary momentum in the fight against cancer at all policy 
levels. There is a new energy and optimism in the U.S. in the 
scientific, policy and consumer communities around cancer research--a 
universal feeling that the significant past research investments are 
poised to pay major dividends in the areas of cancer prevention, 
detection and treatment. We are closer than ever before to reaching our 
goal of eradicating breast cancer. Your leadership in supporting the 
DOD Breast Cancer Research Program is an essential component of the 
innovative approach that is needed to finally combat this disease.
    Since I testified before this Committee last year, the success of 
the DOD Breast Cancer Research Program has been illustrated by two 
unique assessments of the program. The Institute of Medicine (IOM) 
which originally recommended the structure for the program, 
independently re-examined the program in a report published in 1997. 
Their findings overwhelmingly encourage the continuation of the program 
and offer guidance for program implementation improvements. In addition 
to the IOM report, the DOD Breast Cancer Research Program reported the 
progress of the program to the American people during a public meeting 
called the ``Era of Hope.'' It was the first time a federally funded 
program reported back to the public in detail not only the funds used, 
but the research undertaken, knowledge gained from that research and 
future directions to be pursued. This meeting allowed scientists, 
consumers and the American public to see the exceptional progress made 
in breast cancer research through the DOD Breast Cancer Research 
Program.
    The 1997 IOM review of the DOD Breast Cancer Research Program 
commended the program and stated that ``the program fills a unique 
niche among public and private funding sources for cancer research. It 
is not duplicative of other programs and is a promising vehicle for 
forging new ideas and scientific breakthroughs in the nation's fight 
against breast cancer.'' The IOM report recommends continuing the 
program and establishes a solid direction for the next phase of the 
program. It is imperative that Congress complement the independent 
evaluations of the DOD Breast Cancer Research Program, as well as 
reiterate their own high level of commitment to the program by 
appropriating the funding needed to ensure its success. The IOM report 
has laid the ground work for effective and efficient implementation of 
the next phase of this vital research program, now it needs the 
appropriate funding.
    The success of the program was also highly evident in the fall of 
1997, when the DOD Breast Cancer Research Program hosted their public 
meeting, ``Era of Hope,'' bringing together scientific investigators 
and consumers to examine the progress made since the program's 
inception and look ahead at upcoming developments in promising new 
directions. The conference focused on breast cancer prevention and 
detection; breast cancer genetics and biology; and breast cancer 
treatment and quality of life. For each topic, the current status of 
health care or research available was examined and potential areas for 
progress were presented. The presentations were given both by 
scientists and consumers, demonstrating the strong partnership that has 
evolved between the scientific community and the public around breast 
cancer research. The unique collaboration of scientists and consumers 
in this public meeting, reaffirmed that together scientists and 
consumers are bringing an unforeseen vision and commitment to the fight 
against breast cancer and allowed for many new innovative ideas to be 
exchanged.
    One of the most impressive outcomes of the DOD Breast Cancer 
Research Program, made evident at the ``Era of Hope'' meeting, was the 
caliber of new scientific talent the program has recruited and the 
research insight the program has given them. The DOD program has not 
only increased current research, but has also inspired new efforts on 
the part of some of the nation's best and most experienced researchers 
who have never before been attracted to breast cancer research. In the 
proceedings from the meeting, Brigadier General Zajtchuk, Commander of 
the U.S. Army Medical Research and Materiel Command, stated that ``the 
high quality and innovation of the research contained in these volumes 
and presented at the meeting clearly reflects that the U.S. Army 
Medical Research and Materiel Command has supported some of the most 
talented and creative scientists in their efforts to eradicate breast 
cancer.''
    Many scientists at the ``Era of Hope'' meeting expressed their 
enthusiasm for the program and the opportunity to work substantively 
with consumers at every step of the research process. In fact, the 
scientists who have seen first hand the benefits of the DOD Breast 
Cancer Research Program have issued a strong statement, that in their 
scientific judgement the program should continue: ``* * * * we urge 
that this program receive ongoing funding. This program has been 
broadly defined such that the research performed will be of benefit not 
just for breast cancer, but for all cancers and other diseases.''
    The DOD Breast Cancer Research Program has attracted bright, fresh 
scientific minds with new ideas and continues to open the doors to how 
they think about breast cancer research and research in general.
    Developments in the past few years have begun to offer breast 
cancer researchers fascinating insights into the biology of breast 
cancer and have brought into sharp focus the areas of research that 
hold promise and will build on the knowledge and investment we have 
made. The Innovative Developmental and Exploratory Awards (IDEA) grants 
of the DOD program have been critical in the effort to respond to new 
discoveries and to encourage and support innovative, risk-taking 
research. The IDEA grants have been instrumental in the development of 
promising breast cancer research. These grants have allowed scientists 
to explore beyond the realm of traditional research and have unleashed 
credible new ideas and concepts. IDEA grants are uniquely designed to 
dramatically advance our knowledge in areas which offer the greatest 
potential.
    Therefore, we have devoted a majority of the DOD funds to these 
types of grants, yet there were many promising proposals that could not 
be supported because of a lack of funds. It is disheartening to think 
that lack of funding could be the only factor stalling scientific 
research that could save so many lives. IDEA grants are precisely the 
types of grants that cannot receive funding through more traditional 
programs such as the National Institutes of Health, and academic 
research programs. It is vital that these grants are able to continue 
to support the growing interest in breast cancer research--$175 million 
for peer-reviewed research will help sustain the IDEA grant momentum.
    In addition to the fact that the DOD program provides desperately 
needed, excellent quality breast cancer research, it also makes 
extremely efficient use of its resources. In fact, over 90 percent of 
the funds go directly to research grants. The federal government can 
truly be proud of its investment in DOD breast cancer research. The 
overall structure of the system has streamlined the entire funding 
process, while retaining traditional quality assurance mechanisms.
    The NBCC is highly committed to the DOD program, as we truly 
believe it is one of our best chances at finding a cure or prevention 
for breast cancer. In May of 1997, our members presented a petition 
with over 2.6 million signatures to the Congressional leaders on the 
steps of the Capitol. The petition calls on the President and the U.S. 
Congress to spend $2.6 billion on breast cancer research between 1997 
and the year 2000. Funding for the DOD peer-reviewed Breast Cancer 
Research Program is an essential component of reaching the $2.6 billion 
goal that so many women and families worked to gain.
    Mr. Chairman, you and this entire Committee have been leaders in 
the effort to continue this innovative investment in breast cancer 
research. We ask you, the Defense Appropriations Subcommittee, to 
recognize the importance of what you have initiated. What you have done 
is set in motion an innovative and highly efficient approach to 
fighting the breast cancer epidemic. What you must do now is continue 
to support this effort by funding research that will help us win this 
very real and devastating war against a cruel enemy.
    Thank you again for inviting me to testify and giving hope to the 
2.6 million women living with breast cancer.

    Senator Inouye. I believe the women of America owe you a 
debt of gratitude, you and your ladies, for your determination 
and your persistence, and your commitment. I have seen the 
ladies standing in dark corridors at all hours of the day and 
night lobbying. I can tell you that the success that you have 
seen is due to your persistence and, in fact, many Members of 
the Congress are deathly afraid of your coalition. [Laughter.]
    Maybe the other lobbying groups could learn a lesson from 
you.
    Ms. Visco. Well, it really is as a result of the 
partnership we have developed with Members of Congress who 
support this cause also.
    Senator Inouye. Seriously, we will do our best.
    Ms. Visco. Thank you very much, Senator.
    Senator Inouye. I wish to thank all of you on behalf of the 
committee for sitting by all of these hours.

                    additional submitted statements

    The subcommittee has received statements for witnesses who 
could not testify and they will be placed in the record at this 
point.
    [The statements follow:]
    Prepared Statement of Michael D. Maves, MD, MBA, Executive Vice 
 President, American Academy of Otolaryngology--Head and Neck Surgery, 
                                  Inc.
    Mr. Chairman, I am Michael D. Maves, MD, MBA, Executive Vice 
President of the American Academy of Otolaryngology--Head and Neck 
Surgery, Inc. (AAO-HNS). Thank you for the opportunity to present this 
testimony to you on behalf of our Academy. As you may know, the AAO-HNS 
is the largest medical society of physicians, with over 10,000 members, 
dedicated to the care and treatment of patients with disorders of the 
ears, nose, throat and related structures of the head and neck. We are 
sometimes referred to as ENT physicians.
    Mr. Chairman I would like to bring to your attention several issues 
that concern the Academy.
Tobacco
    The first of these is tobacco use cessation in the military.
    The American Academy of Otolaryngology--Head and Neck Surgery, Inc. 
has been opposed to the use of tobacco for many decades. We are the 
physicians who care for most of the patients with cancer of the head 
and neck, and we see the harmful affects of tobacco use among our 
patients every day.
    Increasingly there are news reports of tobacco companies admitting 
to the adverse impacts of tobacco on users. We also know that there can 
be significant impacts on individuals, especially children, who happen 
to be in the vicinity of toxic smoke from tobacco products used by 
others.
    We were pleased to see that several years ago the Department of 
Defense announced a policy banning smoking in all DOD work facilities 
worldwide. This far-reaching initiative makes DOD workplaces free of 
harmful secondhand smoke as well and thus will improve the overall 
health of all military personnel.
    We do know, however, that many in the military have substituted 
tobacco smoking with smokeless tobacco to avoid disciplinary action 
where smoking itself is prohibited--smokeless tobacco also has very 
serious medical effects.
    Even with all of the scientific information we now have about the 
negative impacts of smoking and secondhand smoke on individuals, we 
find that tobacco use is still indirectly encouraged by the military 
through subsidized sale of tobacco products at military commissaries 
and PX's where cigarettes and other tobacco products can be bought at 
much lower prices than otherwise would be charged. The Academy has 
expressed its concern that the DOD would likely not ban sale of tobacco 
products in the commissary system. We strongly support the concept of 
bringing tobacco prices at least to a parity with civilian prices to 
help cut down on use.
    We especially urge that the Department of Defense promote tobacco 
cessation programs with personnel and their families, but especially in 
relation to mothers and children, about the hazardous affects of 
secondhand smoke as well as tobacco.
Skin Cancer and UV Radiation
    Last year the Academy indicated its strong support of the 
Environmental Protection Agency (EPA) and the National Weather Service 
(NWS) and the Centers for Disease Control and Prevention (CDC) in 
developing nationwide UV Index to alert members of the public to the 
dangers of excessive radiation from the sun, potentially resulting in 
skin cancers (especially of the head and neck), eye damage and immune 
system damage.
    It is our understanding that one of your Senate colleagues, Senator 
Connie Mack of Florida, has begun an effort with the National 
Association of Physicians for the Environment (NAPE) to survey selected 
Federal agencies to determine the extent of education programs 
regarding skin cancer as affected by excessive ultraviolet radiation 
from sunlight. Those Federal agencies would include those which have 
employees and clients (such as farmers served by the Department of 
Agriculture) routinely exposed to occupational and recreational 
sunlight far more than the general public.
    Of course, the major agency which has such personnel is the 
Department of Defense. Millions of our young men and women are 
routinely exposed to excessive sunlight for long periods of time in 
carrying out their duties. Senator Mack has requested from the DOD a 
report on its educational activities, and will follow up, we are sure, 
with recommendations for necessary actions to be taken.
    Our Academy members, of course, deal with many of the skin cancers 
of the head and neck, where many of the skin cancers occur. We urge 
that this committee consider, once the report is made available by 
Senator Mack, how it might participate with the Department of Defense 
in insuring that all personnel and their families are educated in this 
regard. One excellent instrument of education is the so-called UV 
Index, widely made available by the National Weather Service and by 
private weather reporting companies, which indicates, particularly in 
the summer, in a range of 1-10, the severity of UV radiation from the 
sun, at given localities throughout the United States. This excellent 
tool has been used by our Academy to inform members of the public about 
the extent of sunlight and have warned the public about the dangers of 
excessive sun exposure. Both the Centers for Disease Control and 
Prevention and the U.S. Environmental Protection Agency support the 
effort on skin cancer and use of the UV Index. Although these agencies 
are not funded by this committee's recommendations, nevertheless we 
note here their commendable activities in this regard.
    Along those lines we would be remiss if we did not report how 
pleased we are to see that a large number of military units have been 
receiving awards from the EPA Stratospheric Protection Division for 
their work in reducing the use of CFC's and other atmospheric ozone 
depletion chemicals in their activities, leading to stratospheric ozone 
layer protection.
    As you know, the stratospheric ozone layer protects us from 
excessive UV radiation harmful to the skin, and potentially causing 
skin cancer.
    In this activity and in so many others that the Department of 
Defense has become a leader in, we have seen the ``greening'' 
(environmental improvement) of the Department facilities.
Noise Reduction
    Finally, Mr. Chairman, let me deal with the issue of noise 
reduction.
    Our Academy, from its beginning, has been concerned about the 
affect of excessive noise on the structures of the ear, particularly 
those noises which are extremely excessive. We know that noise is a 
necessary part, frequently, of daily military life, and particularly so 
in wartime. Nevertheless, we believe that many of the noise affects on 
military personnel can be reduced by the appropriate use of noise-
reducing and prevention activities.
Summary
    Mr. Chairman, we have raised several issues with you involving the 
interface between the Academy's concerns and military activities.
    I would be happy to answer any questions you may have.
                                 ______
                                 
  Prepared Statement of Edith G. Smith, Citizen Advocate for Disabled 
                           Military Retirees
    I am Edith Smith, a citizen advocate dedicated to correcting the 
inequities in the TRICARE benefit now provided to disabled retired 
beneficiaries who are dually eligible for Medicare. I am pleased to 
submit my statement to the Members of the Defense Subcommittee of the 
Committee on Appropriations, United States Senate, at a hearing for 
public witnesses on May 11, 1998.
    My husband, Vincent M. Smith, and I became involved in this 
advocacy work as a result of our personal experiences and the 
devastating situations faced by other disabled retirees when they were 
unexpectedly terminated from their CHAMPUS benefit of retirement as a 
``cost saving'' measure to the Pentagon.
    In 1989, my husband qualified for Social Security Disability Income 
at age 49 through Social Security contributions made solely by his 
private sector employer of more than 6 years following his military 
retirement from 21 years honorable service in the United States Marines 
Corps. Twenty-nine months later, his CHAMPUS benefit ended without 
notice of termination from DEERS, and he was forced to the lesser 
benefits of Medicare simply because he was disabled. How can DOD force 
the substitution of a benefit earned through private sector employment 
(Medicare) for a benefit of military retirement (CHAMPUS)?
    Efforts initiated by Congressman Bill Young, FLA., and Senator John 
McCain, AZ, quickly restored CHAMPUS as second payer to Medicare A and 
B for retired beneficiaries under age 65 in October, 1991.
    I would like to present my views on the military health benefit as 
uniquely provided to military retirees and their family members who 
become eligible for Medicare under age 65. I believe the Department of 
Defense has interpreted and implemented (or failed to implement) these 
laws in the most restrictive budget sense favoring the system, often 
without regard for fairness and equity to disabled beneficiaries. 
Congress passed these laws as critical protective measures to ensure 
that retired military beneficiaries would receive no less medical 
benefit than others simply because of their misfortune to suffer full 
disability or End Stage Renal Disease (ESRD.)
    The requirement to enroll in Medicare Part B coverage is an unjust, 
discriminating, and additional requirement of TRICARE eligibility for 
disabled retired beneficiaries. Medicare Part B participation is not 
required of disabled active duty family members to retain TRICARE 
eligibility or retired Federal Civilians to maintain their eligibility 
for FEHBP. The disabled retired military beneficiaries are unhappy with 
this ``second class status'' and many would be better served by a 
voluntary option to participate in the Federal Employees Health Benefit 
Program (FEHBP) that is provided to Congress and the Federal Civilian 
workforce.
       issues of concern for military medicare eligibles under 65
    Data match between Defense Enrollment Eligibility Reporting System 
(DEERS) and Health Care Financing Administration (HCFA) was 
accomplished by DEERS on about March 19, 1998, as required by Sec. 734, 
Fiscal Year 1996 Defense Authorization Act. DEERS courtesy information 
letters informing disabled beneficiaries of the termination of their 
retired eligibility TRICARE/CHAMPUS were mailed on March 20, 1998, to 
12,093 beneficiaries who had not purchase Medicare Part B. 99,676 
military beneficiaries were identified as eligible for Medicare A and 
TRICARE by the DEERS/HCFA match.
    DEERS inaccurately reflects TRICARE as primary w/o Part B. It 
appears that DEERS did not update their computer records on March 20, 
1998, to reflect Medicare A and the lack of Part B for individuals 
identified on the HCFA data tape when the match occurred. 12,093 
disabled persons may now be erroneously listed in DEERS as primary 
TRICARE eligible. Government personnel who depend on DEERS records have 
informally advised some disabled individuals who are not enrolled in 
Part B to continue with needed medical care under TRICARE until DEERS 
records reflect their ineligibility for TRICARE pending anticipated 
retroactive legislative relief. DOD must document this situation or 
informal policy so that no disabled person who trusted government 
advice will later be at risk to suffer prosecution under TRICARE fraud 
regulations if other officials disagree with this policy at a future 
date in order to recoup TRICARE funds and balance the budget on the 
backs of desperate disabled retirees.
    Part B requirement waived temporarily to September 30, 1998. The 
Supplemental Appropriations Bill, April 30, 1998, contains language to 
temporarily waive the Part B requirement for TRICARE beneficiaries who 
are dually eligible for Medicare. This waiver is based on a 
determination that such continuation is appropriate to assure health 
care coverage for a person who may have been unaware of the loss of 
CHAMPUS eligibility. The Part B waiver must be continued until July 1, 
1999, in order to properly coordinate with the complex enrollment 
requirements of Medicare B.
    Waiver of recoupment for erroneous CHAMPUS payments for Medicare 
eligibles; fiscal year 1996, Section 743, Not yet implemented--over 2 
years later. Proposed rule published in Federal Register, December 4, 
1997. An description of this provision was omitted from the DEERS 
letter mailed to disabled beneficiaries on March 20, 1998.
    ``Equitable Relief'' waivers for Under 65's are the appropriate 
solution to this ``no Part B'' problem and must be approved for request 
by DEERS as discussed in a letter from Dr. Stephen Joseph, ASD(HA) to 
HCFA, January 16, 1997. It appears that the rights of Medicare 
eligibles under age 65 have been prejudiced by DOD's failure to 
accomplish a data match which has caused the unintentional, 
inadvertent, or erroneous nonenrollment by some beneficiaries in 
Medicare Part B. ``Equitable Relief'' granted by HCFA would allow 
immediate or retroactive enrollment in Medicare Part B without premium 
penalties, thus quickly restoring earned TRICARE benefits to our most 
needy retirees without legislative changes.
    Eliminate the unfair requirement of Medicare Part B for TRICARE 
eligibility. People suffer when decreasing DOD staff cannot accomplish 
the additional tasks to develop the expanded administrative bureaucracy 
required by this new complex military health benefit.
                               background
    This small group of disabled retired beneficiaries is unjustly 
denied equal eligibility for TRICARE/CHAMPUS. The disabled military 
beneficiaries have been cost shifted to the lesser benefits of Medicare 
A by entitlement, and to Part B by required enrollment with a 1998 
premium of $43.80 @ mo., simply because they have been employed and 
suffer the misfortune of severe disability or End Stage Renal Disease 
(ESRD.) No other military beneficiaries are required by law to purchase 
other health insurance for which they may be eligible in order to save 
TRICARE money.
    Why then has Congress required the disabled beneficiaries to enroll 
in Medicare B? As DOD develops and expands their new managed care 
demonstrations and programs, the Medicare eligibles under 65 have been 
``cherry picked'' and left basically alone to fend for themselves in a 
``no man's administrative land'' of the dual coverage of Medicare and 
TRICARE.
    Since 1973, when Social Security Law first entitled disabled 
individuals to Medicare A , DOD has recognized a continued need to 
coordinate a mechanism between DEERS and HCFA to identify and notify 
dual eligible military beneficiaries. After 25 years, DOD accomplished 
the data match last month and identified 12,093 unique retired 
beneficiaries who had failed to purchase Part B. Without Part B these 
disabled retired beneficiaries were ineligible for TRICARE. Complex 
Medicare B enrollment requirements will leave many without any 
outpatient coverage until July 1, 1999.
    DOD (HA) reacted with compassion to the plight of this large group 
of vulnerable beneficiaries and asked Congress for emergency 
legislation to waive the Part B requirement from January 1, 1998, to 
July 1, 1999. This legislative relief may leave unintended gaps in 
medical coverage. DOD's request for relief legislation ignores the 
spirit of forgiveness (implied by Congress) to waive the Medicare B 
premium penalties that have incurred because DOD/HCFA did not run the 
data match in 1991 when CHAMPUS was restored to these individuals.
    ``Equitable Relief'' waivers are critical for retired under 65 
beneficiaries because of the ability to enroll retroactively in Part B 
and the waiver of stiff premium penalties. Retroactive enrollment in 
Part B insures continuous eligibility for CHAMPUS/TRICARE coverage with 
necessary reimbursement for any previous unpaid medical bills.
    Foreseeing this catastrophic situation the disabled would face when 
the data match was accomplished, Dr. Stephen Joseph, ASD(HA), wrote to 
the Administrator of HCFA in January, 1997, and requested assistance in 
solving the problem unique to Medicare eligibles under 65 resulting 
from the lack of a data match.
    The Health Care Financing Administration (Medicare agency) 
regulations HI 00830.001--``Granting Equitable Relief'', HI 00830.005--
``When to Consider Relief'', HI 00830.010--``Evidence Required'', and 
HI 00805.236--``Current Equitable Relief Consideration Involving 
CHAMPUS'' describe HCFA's process ``* * * to provide certain forms of 
relief to individuals whose SMI or premium enrollment or coverage 
rights have been prejudiced by the error, misrepresentation, action or 
inaction of an employee or agent of the Government * * *.'' DOD 
officials explain that ``equitable relief'' is not an option because of 
the high cost to HCFA. These regulations do not describe a monetary cap 
which prevents HCFA from granting forgiveness to a number disabled 
beneficiaries who were unaware of the change in law.
    A DOD (Health Affairs) memo dated June, 1973, documents DOD's need 
for a mechanism to identify Medicare eligibles under age 65 who are 
dually eligible for CHAMPUS. If a data match was deemed to be required 
and run on March 19, 1998, then this data match should have been 
equally necessary in 1973. The CHAMPUS eligibility situation for active 
duty family members had not changed since the 1972 Amendments to the 
Social Security Act provided Medicare for those under age 65 because of 
disability or End Stage Renal Disease. Contrary to information in the 
recent DEERS letter, retired disabled military beneficiaries previously 
enjoyed dual eligibility of Medicare/CHAMPUS without the requirement to 
enroll in Part B from 1973 to December 13, 1980. If DEERS has mailed 
courtesy letters to Medicare eligible at age 65 since 1986, then how 
can government officials from both DOD and HCFA be permitted to turn 
their heads and ignore an equal need to identify and notify this unique 
disabled population under age 65?
    I respectfully suggest that Congress direct the Department of 
Defense to revert to old DOD/HCFA policy basis for ``equitable relief'' 
for under 65's that includes ``error or inaction'' on the part of DOD/
HCFA employees who have failed to accomplish the data match for 25 
years.
   data match between deers and hcfa to identify and notify disabled 
  military beneficiaries of their unique champus/tricare eligibility 
                              requirements
    Defense Acts, (not Social Security Law) authorized this Part B 
requirement. Therefore, the Department of Defense must be held fully 
responsible and accountable to identify and notify disabled Medicare 
eligibles under age 65 of their change in eligibility to TRICARE/
CHAMPUS. DEERS letters are the only personal notification Medicare 
eligibles receive. Had the DEERS letters been issued beginning in 1973, 
these disabled military beneficiaries would have received appropriate 
information to prompt timely enrollment in Part B, possibly averting 
the lifetime Part B premium penalties of 10 percent per year associated 
with late enrollment.
    The first DOD memorandum signed by Vernon McKensie, DASD (Health, 
Resources, and Programs), 25 June 1973, states a need for a ``data 
match'' with Social Security. To quote from the memo: ``We have not 
been able to complete the coordination with Social Security 
Administration which we feel is necessary to establish a final CHAMPUS 
implementation of the three new Medicare eligibility provisions of the 
Social Security Act of 1973 which provide Medicare eligibility for some 
CHAMPUS beneficiaries. Pending the completion of the necessary 
coordination of the CHAMPUS and Medicare claims procedures * * *.'' 
This coordination was never accomplished by DOD until March 19, 1998.
    DEERS is a self-reporting system that holds the military sponsor 
responsible to update changes to his DEERS records. The Assistant 
Secretary of Defense (Health Affairs) reported to Congress on April 4, 
1997, that 23,733 retired Medicare eligibles under 65 have self-
reported their Medicare A eligibility to DEERS. The 1998 data match has 
identified 99,676 retired beneficiaries dually eligible for Medicare/
TRICARE.
    If DOD is not held responsible to provide information on this dual 
coverage, how can disabled beneficiaries be held responsible to know 
the law? When a disabled beneficiary declines enrollment in Part B, he 
often does so because he has not been properly informed of the loss of 
his TRICARE benefit. He believes he is covered by CHAMPUS until age 65 
as are all other retirees. He also erroneously believes that if he 
doesn't pay for Part B, then he is not enrolled, and does not need to 
report Medicare on his CHAMPUS form.
         equitable relief for medicare part b premium penalties
    The failure of DOD to previously provide DEERS courtesy information 
letters to dual Medicare/TRICARE beneficiaries should qualify as the 
``error, misrepresentation, or inaction of a federal employee which 
caused the unintentional, inadvertent, or erroneous nonenrollment by 
the beneficiary in Part B.'' 42 CFR 407.32. [DOD, Office of General 
Counsel's Opinion, December 21, 1994.]
    Prior to 1996, when a military beneficiary attempted late 
enrollment in Medicare B, DEERS officials generally provided the 
necessary documentation to request an ``equitable relief'' waiver from 
HCFA by explaining that DOD had probably misinformed the retiree about 
this unique requirement to enroll in Medicare Part B as a condition to 
retain their military health benefit. TRICARE/CHAMPUS does not provide 
each military beneficiary with a handbook as does Medicare and most 
other insurance programs.
    Base closures caused many retirees who had depended on military 
medical care to apply for Medicare Part B with late enrollment 
penalties. This new influx of Part B applicants caused by base closure 
(most over 65) prompted HCFA to review sudden increased HCFA costs 
associated with granting ``Equitable Relief'' to these retirees. HCFA 
may not want to absorb additional costs to their programs resulting 
from downsizing the military.
    This influx of Part B applicants caused DOD to tighten its policy 
traditionally used for providing ``Equitable Relief'' letters from 
DEERS for military beneficiaries seeking late enrollment in Medicare B. 
DOD then forwarded legislation (fiscal year 1997 and fiscal year 1998) 
requesting ``equitable relief'' for over 65's in Base Realignment and 
Closure (BRAC) sites with no explanation for omitting the Medicare 
under 65's in this legislative proposal.
    Why would DOD exclusively identify BRAC site beneficiaries over age 
65 to receive legislative relief from the Part B penalties? Most over 
65 retirees would have received the DEERS courtesy letters explaining 
their termination of CHAMPUS, the switch to Medicare, and their 
personal risk to rely on ``space available military medical care'' if 
they choose not to enroll in Part B. DOD's criteria for requesting 
``equitable relief'' waivers must focus on the beneficiaries who were 
not informed by DEERS courtesy information letters of their changed 
CHAMPUS eligibility. The unique situation of failing to identify and 
inform under 65's was not considered when the new DOD policy for 
``Equitable Relief'' was written in May, 1996.
    DOD must acknowledge and accept responsibility for error and 
inaction on the part of government employees who failed to develop a 
mechanism to inform retired CHAMPUS beneficiaries of their changed 
eligibility in a timely manner. Had the data match been set up in 1973, 
the system for the dual coverage of Medicare/CHAMPUS would be working 
and each beneficiary would have received a timely letter of 
notification potentially averting penalties and a lapse of medical 
coverage when they need it most.
        tricare prime enrollment for medicare eligibles under 65
                 eliminate medicare part b requirement
    I ask the Committee to please support the removal of the mandated 
requirement to purchase Medicare Part B as an unnecessary and unfair 
condition to enroll in TRICARE PRIME for the retired Medicare-eligible 
beneficiary. TRICARE and Medicare are two different federal health 
programs run by two distinctly different federal agencies who serve 
distinctly different populations and purposes. If they have difficulty 
working together to accomplish a data match in 25 years, how will they 
coordinate their health benefits so that medical care for the most 
needy is accomplished without undue problems?
    Most DOD informational materials on TRICARE PRIME generally state 
that Medicare-eligibles may not enroll in PRIME at this time. Medicare 
eligibles under age 65 with Part B are eligible for TRICARE PRIME 
enrollment. TRICARE PRIME charts describing eligibility categories, 
enrollment fees, and copayments must be required to include unique 
Medicare-eligible requirements. DOD's explanation that the disabled 
group is too small or the dual coverage too complex to justify space in 
the marketing materials is not reasonable. TRICARE websites also have 
failed to adequately describe the requirements of Part B for unique 
beneficiaries. TRICARE money saved by cost shifting the disabled to 
Medicare should be spent informing the disabled beneficiaries of their 
unique health benefit situation.
    Many military medical administrators are unaware of the complex 
eligibility requirements of the dual Medicare/TRICARE benefit.
  --Active duty family Medicare-eligible member is not required to 
        purchase Part B.
  --Retired Medicare eligible beneficiary under 65 is required the Part 
        B purchase.
  --Disabled family member who has not earned Social Security credits 
        for Disability Income retains full CHAMPUS eligibility until 
        age 65 without the required switch to Medicare.
  --Medicare eligibles at any age may enroll in the Uniformed Services 
        Family Health Plan without the requirement to purchase Part B.
    Historically, military health benefits advisors have been untrained 
and unable to discuss Medicare benefits. Now that Defense ACTS have 
mandated Medicare as a substitute and requirement for under 65's to 
participate in TRICARE, the Defense Department must be responsible to 
inform individuals about their Medicare benefits and how they 
coordinate with TRICARE. The DOD must not ``cherry pick'' their 
programs of retirees because of age or health status as an easy way to 
meet budget targets.
 history of tricare/champus eligibility for medicare eligibles under 65
    1965, Congress established the Medicare Program under Title 18 of 
the Social Security Act. Medicare is a Federal Health Insurance Program 
administered in 2 parts, Part A and Part B. Part A is financed through 
taxes paid by workers and their employers (premium free to entitled 
individuals.) Part B is paid for in part by premiums from persons who 
were given the voluntary option to participate.
    1966, the expressed intent of the Congress was to provide military 
retirees a premium free CHAMPUS benefit (in lieu of a reduced monthly 
compensation) equal to the Federal Employees Hi Option Blue Cross/Blue 
Shield or other popular fee-for-service FEHBP plan. Congress provides a 
Military Medical System with a priority for ``wartime readiness.''
    1972, the Social Security Amendments (42 USC 1395c) expanded 
Medicare eligibility to entitled disabled CHAMPUS beneficiaries on or 
after 1 July 1973. DOD permitted a dual coverage benefit for all 
eligible beneficiaries until 1980 with no Part B requirement. The 
CHAMPUS regulations (DOD 6010.8 dated 10 January 1977) terminated 
CHAMPUS coverage effective January 1, 1978, for Medicare eligibles 
under age 65, but this was not supported in law. Fiscal year 1979 
Testimony presented to the Senate Armed Services Committee by Mr. 
Vernon McKenzie, ASD(HA) described this termination of CHAMPUS as a 
``cost saving administrative action'' that did not reduce medical 
coverage.
    1980, CHAMPUS eligibility terminated for retired beneficiaries 
under age 65 who became entitled to Medicare Part A. Public Law 96-513, 
Sec. 511, an amendment to the ``Defense Officer Personnel Management 
Act'' signed on December 12, 1980.
    1991, CHAMPUS restored as second payer to Medicare A and B for 
retired beneficiaries under age 65. Fiscal Year 1992 Defense 
Appropriations Act, Public Law 102-190.
    1994, Authorized Coordination of Benefits between Medicare and 
CHAMPUS specifying traditional reimbursement procedures. Fiscal Year 
1995 Def Auth Act, Public Law 103-337, Sec. 704.
    1995, ``Waiver of recoupment'' for erroneous CHAMPUS payments. 
Fiscal year 1996, Sec. 743, which provides the authority to waive the 
collection of erroneous civilian health care payments from persons 
under the age of 65 who unknowingly lost TRICARE/CHAMPUS eligibility 
when they became eligible for Medicare as a result of a disability or 
End Stage Renal Disease. The period of waiver authority begins January 
1, 1967, and ends on either the termination date of any special 
enrollment Medicare period established by law, or July 1, 1996, 
whichever is later. The rule was published in the Federal Register, 
December 4, 1997.
    1995, ``Data Match''--Congress directs the administering 
Secretaries to develop a mechanism for notifying beneficiaries of their 
ineligibility for CHAMPUS when loss of eligibility is due to disability 
status or entitlement to Medicare Part A under age 65. Fiscal Year 1996 
Defense Authorization Act, Sec. 734.
    1997, January 16th letter from DOD (Health Affairs) to HCFA 
requesting a dialogue to develop viable options to provide ``equitable 
relief'' for CHAMPUS beneficiaries who are entitled to Medicare under 
age 65. DOD(HA) acknowledges the inability of DOD to identify this 
category of beneficiaries in order to notify them of the change in law. 
The execution of a timely data exchange was also requested.
    1997, Medicare Subvention Demonstration bills passed with fiscal 
year 1998 Budget Amendment. This Military Medicare Demo' is the only 
``at risk'' Medicare HMO permitted to exclude the Medicare eligibles 
under age 65 who suffer disability. Are the Medicare eligibles under 65 
an ``unfunded mandate'' for MTF's? How will they be treated by the 
Military Facility Commander who retains the legal ability to pick and 
choose the MTF patients according to the needs of their Graduate 
Medical Education Program and the MTF budget targets?
    1997, Legislation waiving Medicare Part B late enrollment penalty 
excludes disabled Medicare eligibles under 65. H.R. 598 by Rep. John 
Ensign, (R-Nev.) and S. 912 by Sen. Chris Bond, (R-MO) waives the Part 
B premium penalty for over 65's. Why is there a discriminating omission 
of the Under 65's when they are the ones who did not receive DEERS 
notification of the change in the CHAMPUS eligibility?
    1998, Waiver of TRICARE PRIME enrollment fee for Medicare eligibles 
under age 65. DOD's final rule was published in the Federal Register 
with the effective date of March 26, 1998. However, DOD policy may not 
have been disseminated in time to be included in the initial marketing 
materials for Regions 1, 2, and 5.
    1998, ``Data Match'' was accomplished by DEERS/HCFA on March 19, 
1998, and DEERS letters were immediately mailed to 12,093 beneficiaries 
who had not purchased Part B and were without any outpatient coverage. 
The DEERS/HCFA data match identified 99,676 retired individuals who are 
Medicare eligible under age 65. If ASD(HA) last reported 23,733 dually 
covered beneficiaries, it would seem that about 76,000 military 
beneficiaries were erroneously listed with DEERS as having primary 
CHAMPUS eligibility.
    1998, Temporary waiver of Part B requirement provision in 
Supplemental Appropriations bill. April 30, 1998. This emergency 
measure assures continued medical coverage under TRICARE until 
September 30, 1998, for individuals who were unaware of the loss of 
TRICARE/CHAMPUS and the requirement to enroll in Medicare B.
                               conclusion
    We are very grateful to the Congress for the restoration of CHAMPUS 
benefits to retired military under age 65 who are dually entitled to 
Medicare A and enrolled in Part B. However, we are concerned about the 
lack of oversight and understanding by DOD to administer this dual 
benefit with full responsibility and accountability. DOD must now 
accept full responsibility to advise retired beneficiaries about both 
Medicare and TRICARE. If Congress persists in requiring Medicare B, 
then DOD must adjust TRICARE coverage to fully supplement Medicare 
similar to the Federal Employees Health Benefits Program and Medicare, 
waiving all cost shares and deductibles of TRICARE as a ``quid pro 
quo'' for Part B enrollment.
                            recommendations
    Obtain additional emergency legislation to waive the Part B 
requirement temporarily in order to ensure continuing medical coverage 
for retired beneficiaries until July 1, 1999.
    I respectfully suggest that Congress direct the Department of 
Defense to designate a position to oversee the fair and equal 
administration of the health benefit as uniquely provided to Medicare 
beneficiaries under age 65. Funding for this centralized oversight task 
can be offset by savings accrued with the DOD money saved from shifting 
retired beneficiaries from TRICARE to Medicare A and B.
    DOD must be directed by Congress to work out an arrangement of 
relief for disabled beneficiaries consistent with HCFA requirements for 
``Equitable Relief'' considerations. Congress implied forgiveness of 
disabled persons with ``Waiver of Recoupment'' of erroneous CHAMPUS 
payments provision in Fiscal Year 1996 Defense Authorization Act. The 
relief from Part B penalties should be similarly granted. Without 
``Equitable Relief,'' disabled retirees are not properly enrolled in 
Medicare Part B will find themselves without outpatient coverage for up 
to 15 months * * * an unconscionable, unintended consequence of law 
combining two incompatible Federal Health Programs.
    Congress must consider eliminating the Part B requirement based on 
the failure of DOD to implement the administrative process required to 
support this provision. Congress must not expand complex bureaucratic 
requirements of government programs without adding sufficient staff to 
accomplish the task.
                                 ______
                                 
Prepared Statement of the California Industry and Government Coalition 
                            on PM-10/PM-2.5
    Mr. Chairman and Members of the Subcommittee: On behalf of the 
California Industry and Government Coalition on PM-10/PM-2.5, we are 
pleased to submit this statement for the record in support of our 
fiscal year 1999 funding request of $750,000 for the California 
Regional PM-10/PM 2.5 Air Quality Study.
    The San Joaquin Valley of California and surrounding regions exceed 
both state and federal clean air standards for small particulate 
matter, designated PM-10/PM-2.5. The 1990 federal Clean Air Act 
Amendments require these areas to attain federal PM-10/PM-2.5 standards 
by December 31, 2001, and the proposed PM-2.5 by mid-2003. Attainment 
of these standards requires effective and equitable distribution of 
pollution controls that cannot be determined without a major study of 
this issue.
    According to EPA and the California Air Resources Board, existing 
research data show that air quality caused by the PM-10/PM-2.5 problem 
has the potential to threaten the health of more than 3 million people 
living in the region, reduce visibility, and impact negatively on the 
quality of life. Unless the causes, effects and problems associated 
with PM-10/PM-2.5 are better addressed and understood, many industries 
will suffer due to production and transportation problems, diminishing 
natural resources, and increasing costs of fighting a problem that begs 
for a soundly researched solution.
    PM-10/PM-2.5 problems stem from a variety of industry and other 
sources, and they are a significant problem in the areas that are 
characteristic of much of California. Typical PM-10/PM-2.5 sources are 
dust stirred up by vehicles on unpaved roads, and dirt loosened and 
carried by wind during cultivation of agricultural land. Soil erosion 
through wind and other agents also leads to aggravation of PM-10/PM-2.5 
air pollution problems. Chemical transformation of gaseous precursors 
are also a significant contributor to PM-2.5, as combustion sources.
    Several aspects of the research are important to the U.S. 
Department of Defense:
  --DOD has a number of facilities within the affected region, such as 
        Edwards Air Force Base and China Lake. Degradation of air 
        quality and visibility could impact their operations.
  --Poor air quality also degrades the health and quality of life of 
        personnel stationed at Valley bases.
  --Operations at DOD facilities in the Valley produce emissions which 
        contribute to the Valley's air quality problem.
  --Transport out of the Valley may impact operations in the R-2508 
        airspace in the Mojave Desert. Visibility reduction in 
        particular could interfere with the ability to conduct 
        sensitive optical tracking operations at DOD desert test 
        ranges.
    The Department of Defense is a double stakeholder with respect to 
the PM-10/PM-2.5 issue and this important study. DOD activities not 
only contribute to the problem, they also are negatively affected by 
it. The importance of this study on PM-10/PM-2.5 is underscored by the 
need for more information on how the federal Clean Air Act Amendments 
standards can be met effectively by the business community, as well as 
by agencies of federal, state and local government whose activities 
contribute to the problem, and who are subject to the requirements of 
Title V of the Clean Air Act. There is a void in our current 
understanding of the amount and impact each source of PM-10/PM-2.5 
actually contributes to the overall problem. Without a better 
understanding and more information--which this study would provide--
industry and government will be unable to develop an effective 
attainment plain and control measures.
    Our Coalition is working diligently to be a part of the effort to 
solve this major problem, but to do so, we need federal assistance to 
support research and efforts to deal effectively with what is 
essentially an unfunded federal mandate.
    Numerous industries, in concert with the State of California and 
local government entities, are attempting to do our part, and we come 
to the appropriations process to request assistance in obtaining a fair 
federal share of financial support for this important research effort. 
In 1990, our Coalition joined forces to undertake a study essential to 
the development of an effective attainment plan and effective control 
measures for the San Joaquin Valley of California. This unique 
cooperative partnership involving federal, state and local government, 
as well as private industry, has raised more than $19 million to date 
to fund research and planning for a comprehensive PM-10/PM-2.5 air 
quality study. Our cooperative effort on this issue continues, and it 
is our hope that private industry, federal, state and local governments 
will be able to raise an additional $8 million over the next two years 
to fund this important study.
    To date, this study project has benefited from federal funding 
provided through USDA's, DOD's, Interior's and EPA's budgets--a total 
of $10.6 million in federal funding. Through the Department of Defense, 
$250,000 was appropriated in fiscal year 1996, and $750,000 was 
provided in fiscal years 1997 and 1998. State and industry funding has 
matched this amount virtually dollar for dollar.
    With the planning phase of the California Regional PM-10/PM-2.5 Air 
Quality Study nearly complete, a number of significant accomplishments 
have been achieved. These interim products have not only provided 
guidance for completion of the remainder of the Study and crucial 
information for near-term regulatory planning, they have also produced 
preliminary findings which are significant to the Department of 
Defense's (DOD) interests.
    The Study is significant to DOD interests for a number of reasons. 
The San Joaquin Valley experiences some of the most severe PM episodes 
in the nation. The information being collected by the PM study is 
essential for development of sound and cost-effective control plans. 
Without this information, military installations such as Lemoore NAS in 
the San Joaquin Valley could be subjected to unnecessary or ineffective 
controls. In addition, previous studies have demonstrated that 
significant amounts of fine particles and their precursors from the San 
Joaquin Valley are transported trough the Tehachapi Pass into the 
Mojave Desert, impacting operations at both Edwards AFB and China Lake 
NAWS. Good visibility is a mission-essential resource for both Edwards 
AFB and China Lake NAWS due to reliance on optically-based methods of 
collecting data at the testing ranges at each facility. Significant 
visibility reduction could compromise testing operations at these 
facilities. Effective control plans for the San Joaquin Valley, based 
upon the results of the PM study, will help mitigate visibility 
reduction in the Mojave Desert through the reduction of transport from 
the Valley.
    To this end, the PM study is expending significant resources to 
provide an improved understanding of visibility in the San Joaquin 
Valley and the Mojave Desert and transport between these two air 
basins. A preliminary field monitoring program was conducted during the 
fall and winter of 1995/96. Extensive visibility and meteorological 
measurements were collected. This database is being analyzed to address 
the spatial and temporal patterns of visibility, determine the sources 
which contribute to visibility impairment, and provide an improved 
understanding of the wind flow patterns and transport routes between 
the Valley and the Mojave Desert. Preliminary results indicate that 
secondary ammonium nitrate is the largest contributor to visibility 
reduction in the Valley.
    The results of these analyses are being used to design large scale 
field monitoring programs to be conducted in 1999 and 2000. These field 
programs will address both the annual and 24-hour PM-10 and PM-2.5 
standards. Surface and aloft monitoring of air quality, meteorology, 
fog, and visibility will be conducted at a cost of over $12 million. 
Final plans for these field studies are being developed, which will be 
carried out by numerous contractors over a broad area encompassing 
Central California, the Sierra Nevada Mountains, and the Mojave Desert. 
A database of the field study results will be completed in 2001, with 
air quality modeling and data analysis findings available in 2002. This 
timeline is ideally positioned to provide information for federal 
planning requirements as part of the new PM-10/PM-2.5 national ambient 
air quality standards.
    The Department of Defense's prior funding and participation have 
enabled these projects to occur. Continued support by DOD is essential 
to implement a full scope of visibility and transport-related programs 
and to ensure that DOD concerns are met.
    For fiscal year 1999, our Coalition is seeking $750,000 in federal 
funding through the U.S. Department of Defense to support continuation 
of this vital study in California. We respectfully request that the 
Appropriations Subcommittee on Defense provide this additional amount 
in the DOD appropriation for fiscal year 1999, and that report language 
be included directing the full amount for California.
    The California Regional PM-10/PM-2.5 Air Quality Study will not 
only provide this vital information for a region identified as having 
particularly acute PM-10/PM-2.5 problems, it will also serve as a model 
for other regions of the country that are experiencing similar 
problems. The results of this study will provide improved methods and 
tools for air quality monitoring, emission estimations, and effective 
control strategies nationwide.
    The Coalition appreciates the Subcommittee's consideration of this 
request for a fiscal year 1999 appropriation of $750,000 for DOD to 
support the California Regional PM-10/PM-2.5 Air Quality Study.
                                 ______
                                 
Prepared Statement of Maj. Gen. Roger W. Sandler, AUS (Ret.), Executive 
      Director, Reserve Officers Association of the United States
    Mr. Chairman and Members of the Committee: On behalf of the many 
members of the Reserve Officers Association from each of the uniformed 
services, I thank you for the opportunity to present the association's 
views and concerns relating to the Reserve components and the Defense 
Appropriations Bill for fiscal year 1999. In the National Defense 
Authorization Act for Fiscal Year 1991, the Congress stated that ``the 
overall reduction in the threat and the likelihood of continued fiscal 
constraints require the United States to increase the use of the 
Reserve components of the Armed Forces. The Department of Defense 
should shift a greater share of force structure and budgetary resources 
to the Reserve components of the Armed Forces. Expanding the Reserve 
components is the most effective way to retain quality personnel as the 
force structure of the Active components is reduced * * *. The United 
States should recommit itself to the concept of the citizen-soldier as 
a cornerstone of national defense policy for the future.''
                  reserve component cost-effectiveness
    ROA has long maintained that a proper mix of Active and Reserve 
forces can provide the nation with the most cost-effective defense for 
a given expenditure of federal funds. Reservists provide 35 percent of 
the Total Force, but cost only 8 percent ($20.7 billion) of the fiscal 
year 1999 DOD budget. They require only 23 percent of active-duty 
personnel costs, even when factoring in the cost of needed full-time 
support personnel. We need only consider the comparable yearly 
personnel (only) costs for 100,000 Active and Reserve personnel to see 
the savings. Over a 4-year period, 100,000 Reservists cost $3 billion 
less than 100,000 Active duty personnel. If the significant savings in 
Reserve unit operations and maintenance costs are included, billions 
more can be saved in the same period. ROA is not suggesting that DOD 
should transfer all missions to the Reserve, but the savings Reservists 
can provide must be considered in force-mix decisions. It is incumbent 
upon DOD to ensure that each service recognizes these savings by 
seriously investigating every mission area and transferring as much 
structure as possible to the Reserve components.
                              army reserve
    Today's Army is smaller now than at any time since before WWII. 
Since 1989, the Army has reduced its ranks by more than 630,000 
soldiers and civilians and closed over 700 installations worldwide.
    With the downsizing of America's Army and the transfer of much of 
the Army's combat service (CS) and combat service support (CSS) 
missions into the Reserve, the Army Reserve, while only 20 percent of 
the Total Army, is now structured and missioned to perform 47 percent 
of the Army's CSS and 32 percent of the Army's CS missions. Its 
``first-to-fight'' units are prepared to deploy on short notice.
    The fiscal year 1999 budget requests for USAR personnel, and 
operation and maintenance, are bare bones. The USAR's share of the 
Army's $64.3 billion request in the fiscal year 1999 DOD budget request 
is 5.3 percent or $3.2 billion (Reserve Personnel, Army--$2 billion and 
Operation and Maintenance, Army Reserve--$1.2 billion). Both RPA and 
OMAR need considerable plus-ups to fully fund known requirements 
identified during the development of the President's Budget, but fell 
below the funding line. Critical and executable funding shortfalls in 
the RPA and OMAR areas alone exceed $190 million.
    Reserve personnel, Army (RPA).--Even though the Army Reserve is 
downsizing to a programmed fiscal year 1998 end strength of 208,000. 
The President's RPA budget request for $2 billion is inadequate to 
resource USAR personnel and unit training, education, manning and 
support.
    The RPA budget request understates the actual executable/critical 
shortfall by at least $78 million. Listed are the executable critical 
shortfalls:

                                                             In millions

Professional Development Education (PDE)..........................  $7.3
Mobilization Training for the IRR.................................  30.3
Overseas Deployment Training......................................  10.5
Health Professions Scholarship Program............................   5.1
Full-Time Support (FTS)...........................................  25.0
                        -----------------------------------------------------------------
                        ________________________________________________
      Total.......................................................  78.2

    Professional development education (PDE).--The fiscal year 1999 RPA 
PDE training budget is funded at only 45 percent of its requirement, 
underfunding it by at least $50 million. This $50 million shortfall 
forces the USAR to limit PDE of some unit, and many IMA and IRR 
personnel. With adequate resourcing, soldiers, currently forced to 
attend schooling in lieu of collective training with their units during 
AT, will be able to train and become educationally and professionally 
qualified, enhancing unit readiness. The executable/critical PDE 
shortfall is $7.3 million.
    Individual Ready Reserve (IRR) training.--IRR Mobilization and 
educational training accounts are underfunded, severely limiting IRR 
opportunity to receive school training or the PDE required for 
promotion. 45,000 IRR soldiers are unqualified for known mobilization 
requirements. The training shortfall exceeds $235 million. The 
executable/critical shortfall is $30.3 million.
    Overseas deployment training (ODT).--ODT provides forward presence 
and nation-building activities in support of CINC missions. Previously 
an average 18,000 USAR soldiers deployed annually to 50 nations 
providing 378,000 mandays of cost-avoidance for AC PERSTEMPO and 
OPTEMPO. The fiscal year 1999 budget contains no ODT funding. The ODT 
executable/critical shortfall is $10.5 million.
    Health professions scholarship program (HPSP).--HPSP, the principal 
source of the AC's physicians and dentists, provides tuition and 
financial assistance to Army Medical Department students during their 
medical and dental professional training. The HPSP critical/executable 
shortfall is $5.1 million.
    Full-time support (FTS).--The USAR FTS level is 9 percent, much 
below DOD's 17 percent FTS average for the other RC's. FTS allows USAR 
unit members to take full advantage of limited training time and offers 
the most flexibility in improving unit readiness. Since 1990 USAR FTS 
has been reduced by almost 6,000 personnel, a 20 percent reduction. To 
reach a 10 percent FTS level in fiscal year 1999, the USAR requires an 
increase of 1,000 AGR positions. We urge Congress to add $25 million to 
the RPA request. This will build the FTS program by 1,000 AGR's and 
raise the FTS level to 10 percent.
    RPA summary.--Army Reserve personnel readiness, motivation, and 
willingness to continue as volunteers will decline if soldiers are 
denied the opportunity to receive necessary skills training and the PDE 
required for promotion. Added funding will increase the size of the FTS 
program to 10 percent. We urge the Congress to add $78.2 million to the 
RPA budget to fund critical training and manning shortfalls for TPU, 
IRR,IMA, HPSP, and FTS personnel.
    Operations and maintenance, Army Reserve (OMAR).--The fiscal year 
1999 DOD budget request for the Army Reserve Operations and Maintenance 
(OMAR) account is $1.2 billion. The executable and critical OMAR 
shortfall in the fiscal year 1999 request for recruiting and 
advertising, OPTEMPO, information management, and the backlog of 
maintenance and repair is $105 million. Critical shortfalls follow:

                                                             In millions

Recruiting and Advertising........................................ $13.0
Operation Tempo...................................................  20.8
Information Management............................................  32.1
Real Property Maintenance.........................................  40.0
                        -----------------------------------------------------------------
                        ________________________________________________
      Total....................................................... 105.9

    Recruiting and advertising.--The USAR request is critically 
underfunded by at least $13 million. This severely limits multimedia, 
print, and contractual advertising during this period of difficult 
recruiting. The $16.6 million request is only 33 percent of the 
requirement. The executable/critical shortfall is $13 million.
    Army Reserve OPTEMPO.--USAR OPTEMPO is funded at only 52 percent of 
the requirement. Ninety-four percent of all USAR tactical units are 
aligned to support AC MTW requirements. Adequate OPTEMPO funding is 
necessary to ensure trained and ready units. The OPTEMPO critical/
executable shortfall is $20.8 million.
    Information management (IM).--USAR IM accounts are not resourced to 
keep pace with the cost of operations and new technology, severely 
degrading USAR IM. The critical/executable shortfall is $32.1 million.
    Real property maintenance.--The USAR operates facilities in 
approximately 1,400 locations worldwide. Real property maintenance is 
funded at only 39 percent. Resources are applied only to the most 
critical maintenance and repair requirements, forcing commanders to use 
other under-resourced accounts to fund emergency repairs. The Backlog 
of Maintenance and Repair requirement is underfunded by at least $97 
million. The critical/executable shortfall for fiscal year 1999 is $40 
million.
    OMAR summary.--There is at least a $105 million executable/critical 
OMAR shortfall in this budget request that will force the USAR to 
further reduce equipment and facility maintenance, OPTEMPO, and supply 
purchases. Quality of life issues and lack of essential advertising 
will continue to negatively affect recruiting and retention. We urge 
the Congress to add $105.9 million to support these neglected and 
critically underfunded USAR OMAR programs.
    National Guard and Reserve equipment (NG&RE) request.--OSD, in its 
February 1998 National Guard and Reserve Equipment Report for fiscal 
year 1999, states that the USAR has 67 percent of its required 
equipment pacing items and 68 percent of its ERC A equipment-on-hand 
(EOH). This represents an equipment shortfall that exceeds $1.4 
billion. Realistically, EOH includes substituted equipment, some that 
is not compatible with Active Army equipment.
    Compatibility problems degrade many USAR CS and CSS capabilities: 
Reserve units are unable to communicate with supported units; huge 
burdens are placed on the logistics systems to deliver and stock 
multiple repair parts and fuel supplies, restricting the mobility, 
refueling, and maintenance of equipment. Combat multipliers achieved by 
modern equipment are severely degraded requirements to sustain multiple 
models of old and new equipment.
    The lack of modern test, measurement, and diagnostic equipment 
(TMDE) in USAR CSS units tasked to maintain modernized AC units is a 
major problem. Without the required TMDE, many units are unable to 
perform IDT on the equipment for which wartime proficiency is required. 
With many USAR units in the Force Support Package (FSP), any tactical 
vehicle or TMDE equipment incompatibility between USAR FSP units and 
supported units, degrades support of the combat force.
    The greatest relief to USAR equipment shortages is the NG&RE 
Appropriation. Since 1981 the USAR has received, through NG&REA and the 
help of Congress, over $1 billion in equipment. Without the 
appropriation the USAR would still be below 50 percent EOH.
    The USAR requires approximately $300 million each year just to 
modernize its equipment and be compatible with the equipment entering 
the Army's inventory. Major shortfalls include maintenance equipment, 
TMDE, trucks (M917A1 dump, M916A2 tractor), essential ESP upgrade kits 
(5T, M915), trailers, generators, forklifts, all-terrain cranes, night 
vision devices, floodlights, welding shops, steam cleaners, LADS, 
medical equipment, small arms simulators, engineer equipment (hydraulic 
excavator, roller vibratory type II), M88A1E recovery vehicles, CH-47D 
helicopter, and the funding to buy miscellaneous equipment. We urge the 
Congress to add $200 million in the NG&REA to fund critically needed 
equipment for the USAR.
                                summary
    The Army Reserve is a full partner in America's Army, supplying 73 
percent of the RC units called for Operation Joint Endeavor/Guard. To 
maintain and improve current readiness levels the USAR must be properly 
resourced. USAR readiness is dependent upon adequate funding levels 
required to resource: the training of USAR TPU, IMA and IRR personnel; 
increased levels of FTS; necessary OPTEMPO; recruiting and retention of 
quality soldiers; the repair and maintenance of facilities; improved 
quality of life; and the procurement of modern compatible equipment. 
The combined RPA and OMAR budget requests for $3.2 billion, not 
counting NG&REA, are critically underfunded by at least $190 million. 
We urge Congress to add the necessary funding to train, support, and 
equip the dedicated professionals of the Army Reserve.
                             naval reserve
    The Naval Reserve budget remains in decline when adjusted for 
inflation, despite its significant compensating leverage. In this 
regard, it would make more sense, in light of the decreased, but 
nevertheless continued threat, and the likelihood of enduring fiscal 
constraints, to increase rather than decrease the use of the Naval 
Reserve, as noted in the Sense of the Congress provision contained in 
the Fiscal Year 1991 DOD Authorization Act. Despite funding cuts, the 
Navy is increasingly employing the Naval Reserve force. Unfortunately, 
the budget submission does not reflect this increasing responsibility. 
The Naval Reserve is not a full partner when the issue boils down to 
competition for limited resources.
    Operations and maintenance funding.--The Naval Reserve provides 
continual OPTEMPO/PERSTEMPO relief for the regular force beyond that 
which occurs during annual training (AT) periods. There is, however, no 
reimbursement from the Regular component for this additional support. 
Accordingly, ROA urges that operations and maintenance funding be 
exempt from any correlation to a reduction in end-strength.
    Funding shortfalls--personnel.--Approximately 15 percent of all 
officers and 25 percent of all enlisted personnel will not receive AT 
orders in fiscal year 1998, whereas as recently as fiscal year 1994, AT 
waivers were granted only under limited circumstances. Furthermore, 
USNR AT is budgeted, and generally performed, for 12 days, rather than 
the 14 days prescribed for the other Reserve components (except the 
Coast Guard). Finally, AT is budgeted at 90 percent of the historical 
rates. At the same time, the Navy has significantly reduced ADT/ADSW 
funding, used for CINC support. The Naval Reserve, in proportion to 
end-strength, receives less ADT/ADSW support than any other Reserve 
component. As a consequence of insufficient ADT/ADSW funding and of the 
increasing demands for Reserve manpower from the fleet CINC's, the 
Naval Reserve has used AT funding for fleet support. Consequently, 
readiness, training, and schooling required for advancement and 
promotion are being adversely affected.
    Funding flexibility.--Title 31 U.S. Code, Section 1301(a), requires 
that appropriated funds only be used for programs and purposes for 
which the appropriation is made. An exception, however, has been 
enacted to permit the expenditure of RPN funds for functions performed 
by Reservists within the unified intelligence command umbrella and for 
DOD counter-narcotics efforts, with reimbursement to the RPN account 
without reprogramming. There are, however, other examples where ready 
reimbursement would facilitate the ready use of Reserves. Accordingly, 
ROA recommends that the provisions of section 1301(a) be modified to 
expand the authority for reimbursement to Reserve personnel accounts, 
without reprogramming, for all programs.
    Equipment modernization.--ROA has identified unfunded Naval Reserve 
equipment requirements for consideration by Congress for addition to 
the administration's request for fiscal year 1999, in either the NG&RE 
appropriation or as earmarked additions to the Navy's traditional 
procurement appropriations. These are: H-60's (about 22) at a total 
cost of approximately $450 million; Naval coastal warfare/littoral 
surveillance systems at an estimated total cost of $130 million; C-9 
replacement A/C (14) at a total cost of about $675 million; F/A-18 ECP 
mods at a total cost of about $50 million; expeditionary warfare force 
equipment at a total cost of about $140 million; P-3C update III kits 
at a total cost of about $180 million; and computer-based training at a 
total cost of about $4 million.
                          marine corps reserve
    Funding shortfalls.--The request to support the Marine Corps 
Reserve appears to be underfunded in the Operations and Maintenance, 
Marine Corps Reserve (O&M,MCR) and Reserve Personnel, Marine Corps 
Reserve (RP,MCR) appropriations. Additional O&M funds are needed for 
individual equipment issue and to provide required training, 
maintenance, and depot level repairables. The Marine Corps Reserve 
personnel appropriation also appears underfunded. Second to the Navy, 
the Marine Corps Reserve receives less ADT/ADSW support than any other 
Reserve component. The major deficiency in this appropriation is in the 
area of Active Duty for Special Work (ADSW).
    Equipment modernization.--To achieve the readiness necessary to 
quickly mobilize and augment the Active Marine Forces in time of 
national emergency, Marine Forces Reserve units must be equipped in the 
same manner as their Active force counterparts. In this regard, the 
Initial Issue Program, is a top priority. The Marine Corps Reserve is 
also in need of ECP-560's to make its F/A-18 aircraft compatible with 
the F/A-18C's and D's utilized by the active force at a cost of $36 
million, and two T-39 replacement aircraft at a cost of $9 million.
                          coast guard reserve
    We are fully aware that this committee is not responsible for the 
direct funding of the Coast Guard or the Coast Guard Reserve. 
Nevertheless, as funding for the DOD and the Coast Guard remains 
constrained, it is vital to be farsighted to ensure a continued robust 
sea power. The Coast Guard's people, systems, and platforms provide 
important national and international capabilities that complement the 
U.S. Navy. With a Navy of 116 surface combatants, and regional 
instability, the Coast Guard's cutters--along with several hundred 
coastal patrol boats--take on new significance. In this regard, the 
Coast Guard provides a trained, capable, and ready force for small-
scale contingency operations, and force protection in major war.
    Coast Guard selected reserve strength.--The fiscal year 1999 
authorization request is to maintain the Coast Guard Selected Reserve 
end-strength at the 8,000 level. While recognizing that the Coast Guard 
Reserve's end-strength remains below 7,600 for the second consecutive 
year, we have serious concerns regarding the administration's proposal 
for an appropriated end-strength of only 7,600 in view of the fact that 
the Commandant has conducted an in-depth study that clearly indicates 
and justifies a requirement for in excess of 12,000 Coast Guard 
Reservists.
    We are particularly concerned that the administration and the Coast 
Guard have not succeeded in recruiting Reservists to end-strength. We 
are further very concerned over the impact that the failure to recruit 
may have on future authorized and appropriated end-strength in the 
Coast Guard Reserve. It must be noted that all the other armed services 
are meeting their recruiting goals for Reservists (the Army within the 
established range of plus, or minus, 2 percent). The immediate problem, 
therefore, appears unique to the Coast Guard Reserve.
    Coast Guard Reserve funding.--The administration has requested $67 
million for the Reserve Training (RT) appropriation for fiscal year 
1999, and it is anticipated that $25 million of this amount is intended 
for reimbursement to operating expenses. Given the present procedures 
for reimbursement for operating expenses and direct payments by the 
Coast Guard Reserve, this is the minimum needed to fund a full training 
program for 7,600 personnel. Even at this minimal funding level, Coast 
Guard Reservists would continue to receive only 12 days of AT each year 
(all the other armed services, except for the Navy, are entitled to 14 
days' AT by departmental regulation). In addition, it should be noted 
that the $67 million funding level is based on 90 percent funding of 
on-board strength, as opposed to previously established procedures of 
budgeting for 90 percent of authorized strength.
    Additional funding required to support the full 8,000 level 
authorized would appear to be $72 million. It should, however, be noted 
that the fiscal year 1998 appropriations bill, in appropriating $67 
million for the Coast Guard Reserve, limits the amount of Reserve 
training funds that may be transferred to operating expenses to $20 
million given the substantial amount of Reserve augmentation work 
provided by the Reserves in direct support.
    Public Health Service.--ROA is also fully aware that this committee 
is not directly responsible for oversight over the Public Health 
Service. Nevertheless, some Public Health Service oversight is 
necessary to ensure that the Public Health Service is, like the Coast 
Guard, capable of providing needed personnel to DOD in time of national 
emergency. In particular, the unique expertise of the commissioned 
Corps of the Public Health Service and its Reserve component is vital 
to the nation's defense to biological attack. In this regard, ROA 
requests the committee's review of utilization of the inactive Reserve 
component of the U.S. Public Health Service and establishment of a 
full-time Office of Reserve Coordination.
     air reserve components agr officer controlled grade execution
    Air Force Reserve Command (AFRC) and the Air National Guard (ANG) 
need an increase of 23 colonels and 41 lieutenant colonels AGR 
Controlled Grades, despite an under execution of 48 colonels and 90 
lieutenant colonels on September 30, 1997. They filled the 
authorizations with majors, in addition to utilizing all of the major 
authorizations. Although the numbers still showed an under execution of 
48 colonels and 11 lieutenant colonels, there were good reasons:
  --During this period, the AFRC and ANG placed majors in lieutenant 
        colonel positions to season future senior leadership and 
        establish an experience base in the program. The colonel and 
        lieutenant colonel authorizations were allocated to the field 
        with the plan to promote members upon eligibility. These 
        members are now being promoted to the higher grades.
  --Thus, as of March 31, 1998, the AFRCE and AFRC used all officer 
        controlled grades. As reflected below, within a 6-month period, 
        seven lieutenant colonels were promoted to colonel and nine 
        majors to lieutenant colonel (seven lieutenant colonel 
        vacancies filled by seven majors plus two additional 
        promotions). Such promotions are essential to career 
        progression and retention.

------------------------------------------------------------------------
             March 31, 1998                 COL        LTC        MAJ
------------------------------------------------------------------------
Ceiling................................        274        672        643
Execution \1\..........................        233        584        774
Balance................................        -41        -88       +131
Use of Higher Grade....................        +43        +88       -131
Execution Delta........................         +2  .........  .........
------------------------------------------------------------------------
\1\ Minus Counterdrug Strength.

  --AFRC's and ANG's continuing integration into Joint, Departmental 
        and MAJCOM Headquarters, as well as significant growth in 
        operational units, generates higher grade position 
        requirements. The need to recruit and retain highly trained and 
        experienced prior-service personnel necessitates hiring at 
        higher grade levels.
  --AFRC's and ANG's end strength grows significantly from fiscal year 
        1996 to fiscal year 1999: from 634 to 991 for AFRC (+357) and 
        from 10,066 to 10,905 for ANG (+839).
    Without legislative relief in fiscal year 1999, severe personnel 
management actions are necessary: options include promotion freezes, 
voluntary early retirements and hiring at unacceptably low experience 
levels. Force structure alternatives include delaying mission starts, 
reversing resource mix decisions, and deliberately under executing 
funded end strength. (AFRC expects to under execute the fiscal year 
1998 AGR program by 28 solely due to grade constraints.)
    These highly disruptive actions to the full-time support program 
will jeopardize recruiting and retention, new mission growth, end 
strength execution and Total Force integration.
    ROA strongly urges the Congress to approve the required 23 colonel 
and 41 lieutenant colonel controlled grades for AFRC and ANG.
                    general reserve component issues
    Full-time support.--Increased reliance means increased requirements 
for readiness. Increased readiness in the Reserve components demands 
adequate levels of full-time support. The percentage of full-time 
support available in Reserve units has been shrinking under the 
pressure of budget reductions. ROA urges the Congress to authorize 
full-time support levels of at least 12 percent as recommended by the 
Assistant Secretary of Defense for Reserve Affairs in order to provide 
the readiness required by today's increased reliance upon the Reserve 
components.
    Reserve component recruiting.--Recruiting requirements are not 
overtaken by a military drawdown--new recruits are required to ensure 
force viability. While the Reserve components, with the exception of 
the Coast Guard, have not yet failed to meet their recruiting 
requirements, all of the Reserve chiefs are concerned that they may be 
faced with recruiting shortfalls in the future. While recruiting 
restraints are not always apparent, there are a number of known factors 
which are negatively affecting enlistment and commissioning. Perhaps 
the greatest factor is the turbulence and uncertainty caused by the 
drawdown and base realignment and closure actions. The positive 
attitude toward the military that the services enjoyed prior to but 
particularly during the Gulf War is eroding. A military career is no 
longer perceived as being as attractive as it was during most of the 
past decade.
    This committee can and should do much to make careers in the 
Reserve components more attractive, but as it becomes more difficult to 
attract highly qualified personnel, it is especially important that 
requests for recruiting be funded.
    Health affairs.--Historically, military retirees have been promised 
that they have a right to medical care in military treatment facilities 
following retirement. Military retirement pay and military medical care 
at age 60 are among the most important reasons citizen-soldiers pursue 
a career in the Reserve forces.
    There has been and continues to be erosion of health care benefits 
for retired military personnel and their eligible dependents because of 
the end of the Cold War and reduced wartime medical requirements; 
reductions in military medical personnel; and base closures and 
realignments under the Base Closure and Realignment Commission. ROA 
recommends improving military retiree access to space-available care in 
DOD medical treatment facilities and allowing Medicare-eligible 
military retirees and their eligible dependents to enroll in TRICARE 
Prime. We also recommend allowing Medicare-eligible military retirees 
and their eligible dependents who cannot get care in DOD medical 
treatment facilities and who lose their CHAMPUS/TRICARE eligibility 
(including any prescription drug coverage) at age 65 to enroll in the 
Federal Employees Health Benefits Program (FEHBP). Finally, ROA 
recommends allowing all retired military personnel and their eligible 
dependents to participate in the DOD Mail-Order Pharmacy Program.
    Gulf war illnesses.--Since the Persian Gulf War in 1991, there has 
been clear and mounting evidence of numerous apparently disparate 
medical problems among those who served in the Persian Gulf area of 
operations during that time. Medical experts, both within and outside 
government have been unable to identify any single cause for the 
numerous clinical symptoms that Gulf War veterans and some members of 
their families have presented. Moreover, many Gulf War veterans, 
especially members of the Reserve components, have had difficulty 
obtaining military medical treatment pending definitive diagnoses. ROA 
urges the Congress to ensure that appropriate health care and support 
are provided to veterans and their families with Gulf War illnesses 
without charge, pending medical determination of the causes of those 
illnesses. ROA also urges the Congress to provide supplemental 
appropriations to pay for such health care and support.
    Income protection for mobilized Reservists.--The Ready Reserve 
Mobilization Income Insurance Program was one of the most important 
programs that the federal government ever offered to the individual 
Reserve member. It provided a measure of economic security that 
demonstrated the government's commitment to the concept of the citizen-
soldier and its recognition of the value that the citizen-soldier 
brings to this all-volunteer Total Force. Its cancellation, though 
programmatically understandable, was viewed by many Reservists as a 
major breach of faith. We believe that this program filled a critical 
need, and that amended and properly marketed and implemented, it could 
prove itself to be a significant element in maintaining Reserve and 
Total Force personnel strength and readiness. ROA urges the Congress to 
direct the Secretary of Defense to prepare a report setting forth his 
views of the need for and desirability of a program to provide income 
protection for involuntarily mobilized Reservists. We further urge that 
the report assess the need for and desirability of a program of small 
business loans for self-employed Reservists who are involuntarily 
mobilized.
    Grade of Reserve component chiefs.--The current grade of the chiefs 
of the armed services' Reserve components is O8 (major general/rear 
admiral, upper half). Public Law 104-201, the National Defense 
Authorization Act of 1997, contained provisions establishing the chiefs 
of the services' Reserve components as the commanders of those 
components, and directing the Secretary of Defense to submit to the 
Congress, within six months, a report containing his recommendations 
regarding the ``statutory designation of the positions and grades of 
any additional general and flag officers'' in the Reserve commands and 
offices established by that act. ROA recommends that the Secretary of 
Defense issue the report mandated by Public Law 104-201 and that he 
recommend the immediate promotion of the reserve chiefs/commanders of 
the armed services to the rank of lieutenant general/vice admiral. ROA 
also recommends that the Reserve chiefs and other Reserve general and 
flag officers on active duty be excluded from statutory and 
administrative ceilings on active duty general and flag officers. ROA 
further recommends that absent the report described above, the Congress 
include provisions in the Fiscal Year 1999 National Defense 
Authorization Act setting the rank of the Reserve chiefs at the three-
star level.
    Commissaries.--The Congress has authorized unlimited access to 
exchanges, but in expanding commissary privileges, it limited 
commissary use to 12 a year. ROA believes that this 12-day restriction 
is not cost-effective and should be deleted. By eliminating the 
printing, distribution and control of the commissary privilege card, 
DOD has estimated that it would save the Department of Defense $13.5 
million annually. The Defense Commissary Agency calculated that the 
negligible increased use of the commissary by Reservists would require 
no additional DOD funding. We strongly urge the Congress to address 
this issue and increase commissary access from 12 to 24 visits per year 
for satisfactorily participating Ready Reservists and retirees.
    Space available travel.--Extending space available travel 
privileges to participating Ready Reserve members and their dependents 
simply recognizes the essential nature and value of the Reserve forces' 
contribution to the Total Force. The Reserve components of our Armed 
Forces are full partners in the defense of the nation, full partners 
that are increasingly called upon to support contingencies in all parts 
of the world and to contribute their frequently unique expertise to 
operations that could not otherwise be contemplated. Yet, in this issue 
they are not treated as full partners.
    Reservists, who will continue to constitute an increasingly 
critical element of our total military force, view full access to space 
available travel as a major equity and morale issue, even if they 
personally are unable to avail themselves of the privilege. Their 
support is essential to the Total Force. Congressional support is 
essential if they are to be accorded the privileges that are 
commensurate with their increasing contributions to the good of the 
nation. ROA urges the Congress to support increased space available 
travel privileges for eligible members of the Ready Reserve and to 
their dependents.
    Concurrent receipt of military retired pay and veterans 
compensation.--Currently military retirees receiving veterans 
disability compensation have the amount of that compensation deducted 
from their military retired pay, while other federal retirees receive 
their full retirement in addition to whatever disability compensation 
they may be receiving from the Department of Veterans Affairs. 
Congressman Bilirakis has introduced legislation to help remedy this 
situation and grant relief to veterans. ROA continues to deplore this 
inequity and urges the Congress to remedy the situation by enacting 
legislation authorizing concurrent receipt of both military retirement 
and veterans disability compensation.
                               conclusion
    Thank you for the opportunity to represent the Reserve Officers 
Association's views on these important subjects. Your support for the 
men and women in uniform, both Active and Reserve, is sincerely 
appreciated. I'll be happy to answer any questions that you might have.
                                 ______
                                 
   Prepared Statement of the National Association of Energy Service 
                               Companies
    The National Association of Energy Service Companies (NAESCO) 
appreciates the opportunity to submit the following written testimony 
in support of the Department of Defense (DOD) fiscal year 1999 budget 
request for energy efficiency contracting and other energy efficiency 
project support services.
    NAESCO is a trade association of energy service companies (ESCO's) 
and their trade allies, including utility and manufacturing companies. 
NAESCO's current membership of over 140 organizations includes firms 
involved in the design, manufacture, financing and installation of 
energy efficiency equipment and services in the private and public 
sectors, including Federal buildings.
    The thousands of energy efficiency retrofits installed by NAESCO 
member companies to date enable energy consumers to save an average of 
25 percent of their previous building energy costs. NAESCO's energy 
service company (ESCO) members offer capital constrained customers the 
opportunity to upgrade their facilities without any up-front capital 
expenditures. In addition, ESCO's assume the performance and technical 
risk so that repayment for project costs comes only from measured and 
verified energy savings generated by a successful, ongoing project. In 
this way, the cost of an energy efficiency project is paid entirely 
from energy savings, requiring no additional budget outlay to support 
the capital investment.
support for dod's 1999 budget request for competitive energy efficiency 
                                services
    NAESCO supports DOD's 1999 budget request for energy conservation 
programs, to the extent that those programs encourage and support the 
competitive procurement of private sector energy efficiency services. 
In addition, NAESCO supports the DOD's centralization of support 
services for energy savings contracting to enable implementation that 
creates more efficient and expeditious contracting procedures in all 
cases, by the provision of site-appropriate levels of support.
department of defense initiatives in support of federal budget savings 
             through energy savings performance contracting
    The DOD has an excellent history of reliance on the private sector 
to provide energy efficiency services. In many cases, DOD has relied 
upon utility sole source energy supply contracts for these services, 
even though specific legislation was passed by Congress, in the 1992 
Energy Policy Act, creating competitive Energy Savings Performance 
Contracts (ESPC's).
    During the Senate Energy Committee's hearing on competitive energy 
efficiency procurement, held on September 25, 1997, DOD representatives 
argued that Congress did not need to pursue legislation to promote 
competition in the federal procurement of energy efficiency services. 
According to the DOD, competition already is on the increase in this 
area and the use of sole source utility contracts is on the decline. 
NAESCO respectfully requests that the Subcommittee strongly encourage 
DOD acceerate the trend and to ensure that the Government receive the 
benefits of competition for procurement of these services.
                  centralized contracting initiatives
    The DOD has taken the initiative, ahead of other Federal agencies, 
in developing centralized contracting offices, in particular at the 
Huntsville Army Base and at Tyndall Air Force Base. NAESCO supports 
this move since it offers the potential to decrease the administrative 
costs of implementing Energy Savings Performance Contracts (ESPC's) by 
creating centers of procurement and contract management expertise. 
Therefore, NAESCO fully supports specific line item (``fenced'' 
funding) for energy conservation necessary to support this 
infrastructure. Without such fenced funding, the monies generally 
allocated to operations and maintenance simply go to other mission-
related functions.
    However, NAESCO would like to suggest that some flexibility in the 
organizational structure be encouraged. In the experience of our member 
companies, each project site identified for an energy efficiency 
retrofit tends to have unique characteristics. The level of knowledge, 
understanding and skills related to energy efficient equipment, the 
potential for energy and cost savings, and the facility upgrades 
available through energy efficiency retrofits varies widely among 
facility managers and contracting officers. Also, there is a broad 
range of capability in terms of the contracting tools available for 
procuring these services. At some project sites, facility engineers, 
contracting officers and legal counsel may be poorly equipped to 
oversee, procure and develop these highly cost effective projects. In 
cases like this, the centralized offices can offer invaluable support 
services to help make energy efficiency projects possible.
    At other sites, however, facility staff and their on-base support 
personnel may be the most qualified to bring such a project together. 
In cases such as this, mandatory exclusive use of centralized office 
personnel has the potential actually to increase the cost of these 
projects through the duplication of efforts and the inefficient use of 
personnel time.
    We strongly encourage the DOD and Appropriators to ensure that the 
centralization of support services for energy savings contracts creates 
more efficient and expeditious contracting procedures in all cases, by 
the provision of site-appropriate support.
all qualified energy service providers should be given equal access to 
                           the federal market
    Federal agencies have adopted the view that sole-source contracting 
with existing regulated utility companies is a preferred method of 
obtaining energy efficiency services, when compared with the 
competitive procurement of Energy Savings Performance Contracts 
(ESPC's). This reliance on the use of utility sole-source contracts 
violates Federal requirements for full and open competition. Utility 
power services historically have been procured on a sole-source basis 
due to the traditional recognition of the utility franchise. The 
national trend toward both wholesale and retail competition in the 
utility industry weakens this traditional unilateral relationship and 
there are questions about whether such a sole-source relationship is 
appropriate or beneficial in the changing marketplace. In addition, it 
has never been clear that the statutory authority for this sole-source 
power supply extended to the provision of energy efficiency services. 
The policy that DOD and other agencies have adopted, absent public 
review or comment, is that federal facilities may contract directly 
with utilities for energy efficiency services, but that all other 
providers must engage in a competitive procurement process.
    The use of non-competitive procurement practices in energy 
efficiency contracting denies the Federal government and U.S. taxpayers 
the benefits of competition in the market for energy efficiency 
services. Furthermore, it is not supported by any rational 
justification. Therefore, NAESCO strongly encourages the DOD and 
Federal Appropriators to prescribe the use of competitive procedures 
for all providers when DOD is engaged in the procurement of energy 
efficiency services.
through the competitive procurement of energy efficiency services, the 
   federal government can reduce the energy costs borne by american 
                               taxpayers
    In the Federal sector, cost savings through energy efficiency 
investments enable agencies to pursue their missions while reducing 
budget outlays through reductions in infrastructure costs. However, the 
full benefits of energy efficiency investments will not be realized by 
the Federal Government or by the taxpayers if Federal agencies continue 
to pursue non-competitive practices in acquiring these services.
    By using energy efficiency investments to reduce the costs of 
operating the federal infrastructure, Congress and the agencies will 
reduce the long term tax burden required to support federal operations.
                               conclusion
    The competitive procurement of privately funded energy efficiency 
investments in Federal facilities offers a win-win budget initiative 
for the Congress and the U.S. taxpayer. These initiatives will increase 
energy productivity by reducing the energy consumption and therefore 
the dollar cost of operating and maintaining Federal facilities.
    NAESCO supports DOD's 1999 budget request for energy conservation 
programs, to the extent that these programs encourage and support the 
competitive procurement of private sector energy efficiency services.
    NAESCO supports the DOD's centralization of support services for 
energy savings contracting to the extent that it can be implemented in 
a way that creates more efficient and expeditious contracting 
procedures in all cases, by the provision of site-appropriate levels of 
support.
    NAESCO strongly encourages the DOD and the Congress to continue to 
support a Federal-private sector initiative for reducing energy costs 
in Federal facilities. We further encourage the Congress and Federal 
agencies to provide U.S. taxpayers the maximum budget savings and other 
benefits available through these investments by employing competitive 
procedures for their procurement.

                          subcommittee recess

    Senator Inouye. Our next hearing will be on May 13. At that 
time the committee will hear from the Secretary of Defense, the 
Hon. Bill Cohen. The hearing is recessed.
    [Whereupon, at 4:27 p.m., Monday, May 11, the subcommittee 
was recessed, to reconvene at 10 a.m., Wednesday, May 13.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                        WEDNESDAY, MAY 13, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:15 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Specter, Domenici, Shelby, 
Gregg, Hutchison, Inouye, Hollings, Bumpers, Lautenberg, 
Harkin, and Dorgan.

                         DEPARTMENT OF DEFENSE

                        Office of the Secretary

STATEMENT OF HON. WILLIAM S. COHEN, SECRETARY OF 
            DEFENSE

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Mr. Secretary, ladies and gentlemen, my 
apologies for being late. I had a little session on what has 
happened to the money that we used to have in this 
Appropriations Committee and why we do not have enough to 
respond to your needs.
    Secretary Cohen. Well, I gave a brilliant opening statement 
in your absence. [Laughter.]
    Senator Stevens. Gentlemen and ladies, I do apologize. We 
welcome you as a former colleague and a great friend.
    Yesterday the Secretary met with a delegation that went 
with Senator Inouye and me to Kuwait, Saudi Arabia, Bosnia, and 
the NATO headquarters, and it gave us an opportunity to report 
to him and the Joint Chiefs some of our observations and 
recommendations concerning the impact of deployments on our 
forces and the views of our allies on the presence and the 
roles involved in these activities.
    I know that we probably left a lot on the table there, but 
we are determined to work with you and the Chiefs to ensure 
that we meet the needs of our troops and respond, to the 
greatest ability we can, particularly to the problem of morale 
in the forces, to ensure that we have the capability to meet 
the security challenges our Nation faces around the world.
    Last year we commended you and General Austin for the 
presentation of the ``Quadrennial Defense Review [QDR]''. It is 
the right plan to take our military into the 21st century. Many 
of us have worked hard to ensure that in the bipartisan budget 
agreement, the White House would agree to spending levels 
needed to implement the QDR recommendations.
    Despite the good faith effort on all sides, I think we 
should all recognize that the amounts we agreed to are not 
sufficient to meet the needs for operations, quality of life, 
and modernization of our military. Deployments to Bosnia and 
Southwest Asia have consumed, in my judgment, the savings 
achieved through force reductions, lower inflation, and base 
closures. Environmental remediation and health care costs 
continue to grow. We cannot achieve the balance in spending we 
must secure for the future if we singularly pay the costs of 
maintaining the blockade of Iraq and the status quo in Bosnia.
    I do not want to go into what we said to you yesterday, Mr. 
Secretary, but 1999 will be the fifth year for our deployment 
in the Bosnia region. Now we feel these costs must be included 
in our budget.
    The committee understands the implications of the military 
having to pay for Bosnia out of the funds requested in the 
budget, and what we are trying to do is find out if the White 
House and the Office of Management and Budget in particular 
understand those implications. I believe there should be an 
increase in the caps so that we can take care of that problem 
and we should face it squarely.
    But you have the tough job, my friend. We were pleased to 
work with you on the supplemental. I think it was a little bit 
late but it was in time to prevent the devastation that could 
have taken place as far as our armed services if we had not 
passed it.
    Every member of this committee has worked with you to meet 
the needs of our forces. We are a bipartisan committee, and I 
think Senator Inouye and I pride ourselves in that fact.
    In my judgment the administration and Congress must 
reconsider the spending levels set for defense in the balance 
of this period leading to the balanced budget in 2002. We 
cannot treat the missions, for which we are planning to stay 
for many years, as annual emergencies. We must have a new 
approach to our position in the world and on what the commander 
in chief decides to do with regard to carrying out our roles 
overseas.
    I have taken too long. Despite the fact that I was late--I 
again apologize to you, but I want you to know that we are very 
sincerely trying to find some way to adjust this budget so we 
can meet the needs that you face.
    Senator Inouye.

                   STATEMENT OF HON. DANIEL K. INOUYE

    Senator Inouye. Thank you very much, Mr. Chairman. I ask 
that my full statement be made part of the record.
    Mr. Secretary, during the past many months, we have held 
many hearings, and throughout these hearings certain key words 
and phrases have been heard quite often: modernization, quality 
of life, deployment. But the one word that just about every 
witness seems to be concerned about is readiness, and that to 
me is the key to what we are discussing today. I can assure you 
that this committee is prepared to do whatever we can to make 
certain that our forces maintain the highest level of 
readiness.
    Thank you very much.
    [The statement follows:]

             Prepared Statement of Senator Daniel K. Inouye

    Good morning, I want to join our chairman in welcoming you 
here this morning. I must note, Mr. Chairman that it has been 
several years since a Secretary of Defense has testified before 
this subcommittee. And, I for one am very glad we could find a 
time that our current Secretary was able to join us.
    For several years, this subcommittee has had as its 
practice a policy of hearing from the Secretary of Defense 
last, after all the other witnesses had testified. It has been 
our aim to take the information we have gathered and raise it 
to your attention. We have found this to be a very useful way 
to proceed for all of us.
    During our hearings this year, one subject which has been 
raised repeatedly is readiness. There appears to be great 
concern with our ability to maintain a ready force in the 
future.
    From our military leaders we learned that while 
modernization is still a key element of interest, it is 
readiness that is of greatest concern.
    From our subcommittee members we have learned about items 
in which they are particularly interested. Many, but not all, 
are included in DOD's funding request.
    I am sure we will find today's session most instructive and 
I look forward to your insight.

    Senator Stevens. Senator Hollings.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Stevens. Senator Lautenberg.

                 STATEMENT OF HON. FRANK R. LAUTENBERG

    Senator Lautenberg. Just very briefly, Mr. Chairman. I 
welcome this opportunity to hear from the Secretary and commend 
him for the job he has done. We are very proud of the work that 
you have been doing.
    I just want to say, Mr. Chairman, because you brought it 
up, and you do set just the right kind of tone I think of 
bipartisanship. We want to work together to accomplish our 
goals.
    I do have some concern as a member of the Budget Committee, 
the ranking Democrat on the Budget Committee, about breaking 
the caps because we worked like the devil to get ourselves a 
balanced budget.
    Senator Stevens. Senator, I did not say break them. I said 
lift them. [Laughter.]
    There is a difference.
    Senator Lautenberg. OK. About changing the caps.
    And here is the chairman of the Budget Committee just on 
time.
    Senator Domenici. I am for raising the caps on defense. 
[Laughter.]
    Senator Lautenberg. Well, I do not think it would be 
reasonable to lower them right now, but anyway I do not want 
internecine warfare here to take over.
    I think that we ought to examine very closely the 
proposition that we finance the Bosnia operation on an 
emergency basis. I think we ought to struggle with the prospect 
of adding to the budget. I for one want to hold the caps where 
they are. That was almost a solemn promise that we made to the 
public, and I would like to see it maintained.
    So, with that, I am ready for the debate to begin.
    Thank you very much, Mr. Chairman.
    Senator Stevens. I understand that Senator Dorgan was next.
    Senator Dorgan. Mr. Chairman, I have no opening statement. 
I am to go to the floor to speak at 10:30 on the national 
missile defense, and then I will return.
    But thank you for the hearing.
    Senator Stevens. My apologies for being late.
    Senator Harkin.

                      STATEMENT OF HON. TOM HARKIN

    Senator Harkin. I again join in thanking the Secretary for 
his great leadership at DOD. I know we are going to be talking 
about budgets and next year, but I hope, Mr. Secretary, we can 
spend a little bit of time talking about the recent events in 
South Asia while you are here this morning. Maybe we can get 
your insight and a little bit of overview of how you see things 
developing in South Asia.
    Thank you, Mr. Chairman.
    Senator Stevens. Senator Gregg.
    Senator Gregg. No, thank you, Mr. Chairman.
    Senator Stevens. Senator Domenici.

                   STATEMENT OF HON. PETE V. DOMENICI

    Senator Domenici. Mr. Chairman, I just want to take a 
minute and say that while I personally could favor and probably 
vote for the money requested by the President as an emergency 
for the Bosnian effort, I really believe when you are 5 years 
into an effort, to continue to call it an emergency and to not 
face up to the realization that it is part of the defense 
budget and in some way claim that we are enforcing caps, when 
it is almost as day follows night, that as long as you are 
there, the money will not be put in the budget, it will be 
called an emergency, is making a mockery of the caps.
    Now, there are other mockeries of the caps occurring 
regularly, and that is to create new entitlements that used to 
be appropriated accounts. That is a very interesting kind of 
approach.
    Then to run around and say we have not broken the caps, we 
have just found a new way to spend the taxpayers' money that we 
had expected not to spend when we put the caps in seems to me 
to also be something that the American public would understand.
    From my standpoint, I believe the time has come to be more 
realistic about the Defense Department's budget. If they cannot 
meet their responsibilities in Bosnia and the Middle East where 
we have these front-line engagements, if they cannot meet them 
without harming the defense budget that the President and we 
are approving, then we ought to be realistic and add it to the 
budget.
    Frankly, I can recall--my friend, Senator Hollings, sitting 
right there, do you recall the last time we were confronted 
with a hollow military? Now, I am not saying we are there yet. 
How did we fix it? In the middle of Jimmy Carter's campaign for 
a second term, we put 5 percent real growth in a budget and it 
stuck. That was the first time we had a significant turnaround 
in what was moving dramatically toward a hollow military. Maybe 
it was already there.
    You know, I do not say we are there yet, but you, Mr. 
Chairman, and others that know more than I, including Senator 
Inouye, are worried about what is going on in terms of 
scavenging one airplane to keep another one going, and those 
kinds of things.
    So, that is what I have to say about it, and I thank you 
for giving me a couple of minutes.
    Senator Stevens. Thank you.
    Senator Bumpers.
    Senator Bumpers. Mr. Secretary, I wanted to ask you----
    Senator Stevens. These are opening statements.
    Senator Bumpers. You mean we are just now to opening 
statements? [Laughter.]
    Mr. Secretary, you just got saved by the bell.
    Senator Stevens. I was late. I am sorry about that.
    Senator Bumpers. I have one but I will forego it.
    Senator Stevens. Thank you very much.
    Secretary Cohen.
    Secretary Cohen. Thank you for saving me, Mr. Chairman. 
[Laughter.]

                  Secretary Cohen's opening statement

    Mr. Chairman, it is a pleasure for me to be back before 
this committee, and let me say a couple of words before talking 
about my opening remarks.
    When President Clinton asked me to serve in this capacity, 
the first thing he said to me is that he wanted to develop a 
bipartisan consensus in this country for a strong national 
defense and that was the principal reason he was asking me to 
forego my plans of becoming a private citizen and take this 
position.
    It was that proverbial offer that could not be refused 
because the opportunity to represent the men and women in 
uniform in this country is one that everyone should extol and 
esteem, and it is something that I have held in the highest 
regard. And I did not reject that offer. I quickly accepted.
    I must say that during the past 18 months, I have tried to 
maintain a very strong relationship with Members on this side 
of Capitol Hill as well as the other. You came down to the 
Pentagon with your CODEL that recently returned from Southwest 
Asia and from Bosnia to have a breakfast whereby you could 
convey to me and to the Chairman and Vice Chairman of the Joint 
Chiefs and other members--give them the benefit of your 
observations. That is precisely the kind of relationship that 
one should always have.
    When we talk about if the Pentagon cannot meet its 
obligations, it is not the Pentagon. It is we, the country. So, 
what we have tried to do is to work not looking through one end 
of the telescope to the other side at the other end of the 
telescope, but rather looking at our national security needs 
from one perspective. I appreciate the friendship and the close 
cooperation we have had.
    The QDR last year was really an effort, mandated by 
Congress, for the Department to examine itself, saying, where 
are we going as a strategy, what is going to be our strategy 
for the future, for the next 4 years but well beyond that? We 
came up with three words to define it: shape, respond, prepare.
    The key aspect of that shaping is being forward deployed. I 
hosted a defense attaches' meeting last night at the State 
Department, and it was a remarkable experience to see some 86, 
88 countries represented by their defense attaches walk through 
that receiving line and the enthusiasm they had, the admiration 
they have for this country. We are admired and, to some degree, 
envied the world over. I sit in the Pentagon and receive 
defense ministers, prime ministers, presidents, heads of state, 
foreign ministers, and frankly they come and we discuss ways in 
which they can replicate the quality of the people that we have 
in our service, the high standards that we have, the kind of 
technological superiority that we have demonstrated over the 
years. They want to be more like the United States and they 
want to have an association with us.
    So, we are doing a lot of things right. We tend to open the 
morning paper and we can see the defects or the deficiencies, 
but I must tell you, having been in this position for 18 
months, the overwhelming majority of the cases we are highly 
regarded and respected and we deserve that respect, I must tell 
you, by the quality of the people we have serving us and the 
leadership that they have.
    So, it is within that context in terms of shaping the 
environment, we are shaping the environment of being forward 
deployed over in the Asia Pacific region. I think that redounds 
greatly to our benefit. We are shaping the environment in 
Europe, and we can talk about Bosnia and I am sure we will in a 
few moments. So, we are having an opportunity to shape world 
events in ways that are, nonetheless, favorable in spite of 
what we may see in the morning headlines, and we can discuss 
that in a moment. But overall, we are doing an outstanding job.
    With respect to today's testimony, I have submitted a very 
brief opening statement. Let me just try to summarize a couple 
of quick points.
    First of all, I want to thank you for your assistance on 
the nonoffset supplemental for fiscal year 1998. That was 
important to help us continue the operations in Bosnia until 
the end of this fiscal year. It was obviously enormously 
helpful as far as continuing operations in Southwest Asia as we 
continue to try to contain Saddam Hussein.
    I also want to thank the committee for the efforts it is 
making to resolve the disparity or dispute that we have in 
terms of the outlay problem as far as CBO's analysis and that 
of OMB. The outcome of that will have a major impact upon how 
we are able to fund the various programs that we have.

                  overview of fiscal year 1999 Budget

    With respect to the 1999 budget, we have tried to place 
before you a very balanced and detailed laying out of the 
responsibilities we have as far as maintaining operations and 
maintenance, maintaining readiness, which Senator Inouye has 
just mentioned, and also preparing for the future. The shape-
respond-prepare is part of that paradigm that we have that we 
have to be able to respond to a variety of crises all the way 
from the very small neo-operations, noncombatant evacuation 
operations, all the way up to a major conflict, be it in Korea 
or with a country like Iraq, in addition to defending our 
country's national security here at home.
    The preparing part is one that I have taken as a specific 
challenge for myself. I recall that many times General 
Shalikashvili used to come before the Armed Services Committee, 
and he had a chart that he put up and it showed what had 
happened to procurement since the height of the cold war and 
the level of funding that we had for purchasing modernized 
equipment. The line kept going down, and the promise was we 
would start going up. We would reach $60 billion. Well, the 
problem was every time that General Shalikashvili kept coming 
up, he would show the line moving out. We cannot make it this 
year or next year. The line kept moving because we did not have 
enough money to put into procurement.
    So, one of the things that I really pledged to myself that 
I would do is make that line go up, consistent with the 
representation that we were making to you each year that we 
come before you. Last year I said in fiscal year 1999 we would 
have $49 billion for procurement. I was a little bit off. It is 
$48.7 billion, but we are close. We expect to hit the 
procurement level of $60 billion by the year 2001.
    I can only do that if, in fact, the other aspects of the 
program are achieved, savings that I am looking for. I know 
that base realignment and closure [BRAC] is a four-letter word, 
but it is something that we have to look forward to in terms of 
getting some efficiencies and eliminating some of the overhead 
that we have is very costly.
    In addition, I have done a number of things as far as 
trying to reform the way in which the Pentagon does business. 
We have the defense reform initiative that is headed up by Dr. 
Hamre, the Deputy Secretary of Defense. That is underway.
    So, we are doing our best to live within the caps that you, 
Mr. Chairman, have talked about. When I went to the Pentagon, I 
said it is unlikely that we are going to see major increases in 
defense spending for the foreseeable future in the absence of 
some significant conflict. I had to at least project that. I 
have no way of knowing. All of us would like to see more, but 
it was my judgment, based upon my experience sitting on that 
side of the table, that we were unlikely to see any significant 
increases in defense spending. So, I had to try to predict and 
project what do I have to work with and how do I balance 
operation and maintenance, readiness, the need for procurement.
    The budget we have submitted for 1999 is a well-balanced 
proposal, and there are some efforts underway on the other side 
of Capitol Hill on the House side to take significant sums out 
of the operation and maintenance [O&M] accounts. That will have 
a major impact on either quality of life, on readiness, and 
perhaps even on procurement. So, I would hope that you would 
see the wisdom and look at the proposal that we have before you 
in terms of the delicacy of the balance.

                     funding for Bosnia operations

    A final word perhaps on the supplemental for Bosnia. I have 
listened to you, Mr. Chairman, and also Senator Domenici in 
terms of whether you can call this an emergency. Frankly, I had 
hoped and had argued that we should have a termination of our 
efforts in Bosnia by the end of June of this year. I had hoped 
that that would be the case and I worked toward that end, but I 
also kept an open mind.
    I travel frequently to Bosnia. I met with my counterparts 
throughout NATO, and I also became convinced that if we left at 
June of this year, that it would take a turn for the worse and 
we were likely to see a loss of everything we have achieved to 
date.
    So, I think the President made the correct decision to say 
that it is going to take longer, not to set fixed time lines 
because we cannot really determine on a monthly or a day-by-day 
basis how much progress we are going to make. I can say--and I 
believe that those of you who have been there would say--there 
has been a dramatic change for the better that has taken place 
in Bosnia as a result of our being there.
    We have tried to shrink down the size of our force. We have 
come down from 20,000 to 15,000 to 12,000 to 10,000 to 8,500, 
and we now are going to go down to 6,900. So, we are coming 
down even as you are seeing a fairly significant change on the 
ground in terms of economic development, changes in attitudes, 
the election of more moderate members certainly coming in the 
Serbian portion and quarter.
    So, there are a lot of positive things taking place, and 
yes, it is still expensive.
    But we had no way of knowing in putting our budget together 
for fiscal year 1999 that we would be there beyond June of this 
year. That decision was not made until January of this year. 
So, in that sense, it is emergency. There is a wedge that has 
been put in the budget of some $3 billion plus, and what we are 
asking for is the $1.9 billion to come out of that wedge for 
contingencies.
    I will agree also that for the next budget that I present 
to you, we have to find a way to deal with it. It no longer can 
be called an emergency. The President has made a decision, 
which we are supporting, that there should be no definite, 
fixed time line, that we will try to continue to move in the 
direction we are going, but not setting artificial deadlines to 
only raise expectations and then dashing them.
    So, it is incumbent upon me now to go back for the next 
budget that I am preparing for next year to say we are going to 
have to absorb the cost of Bosnia in some fashion. That will 
raise the issue of whether or not there can be increased 
funding for defense or whether we are going to have to make 
some kind of modifications in terms of what we are going to 
have to give up or efficiencies achieved in order to have the 
money for it.
    But I would ask you that you would continue to look at this 
as a nonoffset emergency in the sense that there is money that 
has been set aside for contingencies and this is a contingency 
that we have to meet. In the event that we do not get the 
money, it is $1.9 billion I have got to take out of somewhere. 
If you look at the way the budget is put together, there is not 
much room for give. We have been talking about the question of 
readiness, and we are starting to see signs of some erosion 
certainly on the edges of things.
    And you heard from the Chairman of the Joint Chiefs and the 
Vice Chair. We have put into place mechanisms now to try to 
evaluate what are we doing with a number of units that are low 
density, high demand, as the chairman has described it, those 
units that you saw over in Southwest Asia, who are concerned 
about the amount of deployments. You talked to one individual 
who had 11 deployments in the past, I think, 5 years. We have 
got to deal with those issues of reducing the level of 
operational tempo and PERSTEMPO in order to make sure that we 
do not contribute to the exodus out of the Air Force by way of 
specific example.

                           prepared statement

    So, Mr. Chairman, I said I was not going to be long. Let me 
cease here and yield to your questions, but again, thank you 
for the support you have given to the Department over the 
years.
    [The statement follows:]
                 Prepared Statement of William S. Cohen
    Mr. Chairman, members of the Committee, it is a pleasure to be here 
to discuss President Clinton's fiscal year 1999 Department of Defense 
(DOD) budget.
    Before focusing on next year's budget, I want to thank you for your 
strong support of the President's fiscal year 1998 emergency nonoffset 
supplemental appropriations request. The approved funding will enable 
us to cover unbudgeted DOD costs for the extension of operations in 
Bosnia beyond this June, for the increased tempo of our military 
activities in Southwest Asia, and for recovery from natural disasters 
earlier this year. Your prompt action allows us to avoid the damaging 
diversion of funds from readiness-related accounts and from other 
important programs in our budget.
    I also thank you for your intensive efforts to achieve a 
satisfactory resolution on the CBO/OMB dispute on fiscal year 1999 
outlays. The outcome of this issue will substantially influence our 
shared goal of protecting force readiness and other military priorities 
in next year's budget.
          overview of fiscal year 1999 defense budget request
    Details submitted to the Congress on our fiscal year 1999 budget 
depict a plan carefully balanced between meeting current needs and 
preparing for an uncertain future. Our emphasis on keeping that 
balance, and how best to pursue it, is the result of last year's 
comprehensive Quadrennial Defense Review. The fiscal year 1999 budget 
begins implementation of our plans to keep our military ready to meet 
current missions, while transforming America's defense posture for the 
future.
    To preserve today's military readiness, the fiscal year 1999 budget 
provides strong support for training, exercises, maintenance, supplies, 
and other essentials. In preparing their new budgets, the military 
services followed my direction that they fully fund their readiness-
related accounts. Traditional operational indicators of readiness--
e.g., tank miles and flying hours--are projected to remain stable. When 
adjusted for today's lower troop strengths, fiscal year 1999 O&M 
funding is well above levels during the 1980's. Still, the intensity of 
military activities and other pressures require the Department to 
remain vigilant and ensure that major readiness problems do not 
develop.
    To ensure our long-term battlefield superiority, the budget 
substantially increases procurement funding for weapons modernization--
and meets the Administration's goal of providing $60 billion for 
procurement by fiscal year 2001. Additionally, the Department's RDT&E 
request is carefully targeted to fund the technologies and programs 
offering the greatest potential payoff for American's future security.
    My department's long-term defense plans are achievable only if we 
streamline and reform our infrastructure and support activities. Much 
of the needed effort is underway, but we cannot succeed without 
congressional backing.
   fiscal year 1999 o&m funding and the president's budget amendment
    Your strong support of the President's fiscal year 1999 defense 
request is crucial to ensuring its continued balance and sufficiency. I 
especially want to stress the importance of fully funding the 
Department's Operation and Maintenance (O&M) budget and approving the 
nonoffset budget amendment for Bosnia as proposed by the President. 
Together these requests provide the O&M funding that is absolutely 
essential to sustaining the readiness of our armed forces while 
protecting America's security interests and enabling our global 
leadership.
    During discussions of our fiscal year 1999 budget request, your 
committee heard compelling testimony from our nation's military leaders 
about the readiness consequences of inadequate O&M funding. Our forces 
are in good shape now, but funding shortfalls would quickly erode 
readiness by forcing cuts in training, unit and depot-level 
maintenance, supplies, and other essentials. If fiscal year 1999 O&M 
funding falls below the President's total request, we would have 
enormous difficulty sustaining adequate readiness and could only hope 
to do so through highly undesirable measures such as personnel 
furloughs and major reductions in programs vital to the quality of life 
of our military personnel and their families.
    Key members of Congress have stated that they consider the 
President's O&M budget to be the minimum needed to maintain readiness. 
I agree with that assessment, as does General Shelton and the rest of 
our military leadership. We therefore urge in the strongest terms the 
full funding of our O&M appropriations. If the Congress makes major 
cuts in our O&M budget request, the readiness of our forces will be 
severely threatened.
    Regarding the Bosnia budget amendment, I cannot overstate the 
importance of your approval. This amendment was required because last 
year's bipartisan budget agreement did not anticipate an extension of 
Bosnia operations beyond June 1998 and because plans for that extension 
were not finalized with our NATO partners until a month after the 
President's fiscal year 1999 budget submission. The fiscal year 1999 
budget amendment, with its request for $1.9 billion to continue our 
operations in Bosnia, will enable the U.S. to sustain the considerable 
progress achieved in that critical region over the past 3 years. The 
President's budget included an allowance, separate from the DOD budget, 
for contingencies like Bosnia. That allowance should facilitate your 
approval of this plan for covering DOD's unbudgeted Bosnia costs.
    Without approval of the budget amendment, the Department's only 
recourse would be to submit a fiscal year 1999 supplemental 
appropriations request. Such a supplemental would require us to 
identify and carry out rescissions once the fiscal year 1999 DOD budget 
becomes law. That course would be terribly disruptive, threaten force 
readiness, and undermine the morale and well-being of our troops. The 
far superior option is to build upon recent passage of fiscal year 1998 
supplemental and complete congressional funding for extending Bosnia 
operations by approving the fiscal year 1999 amendment. Otherwise, the 
Department of Defense and its oversight committees would once again 
face the damaging burden of dealing with unbudgeted costs for an 
ongoing operation.
    In closing, let me say how important to our nation's armed forces 
is the strong support of this committee. I look forward to ongoing 
cooperation as together we work to reinforce America's military 
strength and global leadership.

    Senator Stevens. Very well. Thank you very much, Mr. 
Secretary.
    Without objection, we will run the clock, 5 minutes on each 
person, and we can try to share the time with you this morning.

                      importance of Pacific region

    Let me start off right by being provincial. Senator Inouye 
and I are really from the Pacific. My home is closer to Tokyo 
than it is to Washington, DC. We travel often westward.
    We find that less than 10 percent of our forces are 
deployed in the Pacific and even less a percentage in terms of 
total costs of operating the military. Today we witness India 
testing nuclear weapons. We see the seven largest armies in the 
world exercising in the Pacific, and yet when we go to Europe, 
we find a demand that we are going to have more and more 
nations come into NATO. There just seems to be an overwhelming 
compulsion of our country to spend more and more money on the 
continent and less and less of our defense dollars in terms of 
the rest of the world.
    What does the QDR really tell us about that deployment 
strategy? Are we adequately deployed in the Pacific for our 
defense? Will we be able to maintain our defense and our 
position as a guarantor of really peace in the Pacific?
    I steal one of his lines by saying four out of five of the 
wide-bodied cargo planes that leave this country go west, not 
east. Our increased trade that has given us a free market for 
agriculture is in the Pacific, not in Europe. And I do not 
understand why we cannot have more emphasis on our security 
forces in the Pacific.
    Secretary Cohen. Well, Mr. Chairman, I would agree with you 
in terms of the importance of the Pacific. We are not only a 
European power--I believe that to be the case--we are also a 
Pacific power.
    One of the most, I think, pleasing things that I have seen 
is the reputation that we enjoy throughout the Pacific. Last 
year, for example, we negotiated with Japan for updating the 
defense guidelines, something that is still controversial as 
far as its impact within domestic politics in Japan, but also 
in terms of the Chinese being concerned about what does it mean 
for them. But that is a very solid bilateral relationship we 
have with Japan. We have strengthened that. So, we have a 
really enduring relationship with Japan and the modernization 
of those guidelines is something that I think is in our mutual 
interest.
    When I was in Singapore a few years ago, I heard from some 
of the more senior leaders of Singapore who thought that the 
United States was in a state of decline and that we had lost 
our bearings, no longer could deal with our budgetary 
difficulties, and frankly were a declining power.
    That is no longer the perception in that part of the world. 
They see that we have, in fact, gotten control over our 
spending habits, that we are coming into balance, that we are 
still a super power, and that we have been invited by the 
defense minister of Singapore. To give you an example, they are 
building a pier that will be completed next year, 1999, and 
they invited our aircraft carriers and any other ships to come 
and visit as often as possible. So, that is another signal of 
our position in the Pacific.

                       burdensharing with Allies

    Senator Stevens. Can I interrupt you? When you look at the 
Pacific and look at Europe, our host nations pay substantially 
for our presence in Korea and Japan. When we go to Europe, we 
pay the major portion of the total cost of defending Europe. 
There is virtually no host nation support over there any 
longer, and yet we are being asked to increase our presence, 
increase our role in Europe. Bosnia is a good example. NATO 
would not have gone in there without us.
    Secretary Cohen. Which is correct.
    Senator Stevens. Yes; which means we are in charge of the 
defense of Europe, but we are doing so I believe at our peril 
in terms of representing our interests truly in the Pacific. We 
are stretched so thin in the Pacific. I do not believe we have 
a credible, real defense force there. We have a presence but we 
do not have a credible force like we do in Europe.
    Secretary Cohen. Well, there are other types of 
restrictions I might point out in the Pacific as well that many 
of the countries with which we have good relations and strong 
relations also do not wish to have a large presence on the part 
of the United States which means we have a naval presence much 
more than a land-based presence. So, that also raises the issue 
of how much we are going to have in the way of a naval presence 
in that region.
    I think we have a sufficient presence to maintain a strong 
influence over events in that part of the world. I believe that 
our relationship with Japan, with Korea, with Singapore, with 
Malaysia, with Thailand--all of these countries have been 
very----
    Senator Stevens. Go ahead. I have got 1 more minute.
    Secretary Cohen [continuing]. Beneficial, and also I might 
add with China.

       Theater high altitude area defense [THAAD] missile status

    Senator Stevens. What happened to THAAD? Before I lose you, 
what happened? We have the fifth failure now. What happened?
    Secretary Cohen. Mr. Chairman, I am no expert in the field 
of technology that I can give you an informed answer to that.
    I would point out that looking at this morning's papers, I 
think it was USA Today. I am not sure which paper it was, but 
it showed the failure of THAAD, but right next to it it had 
Ford recalling I do not know how many hundreds of thousands of 
its----
    Senator Hollings. 1.7 million.
    Secretary Cohen [continuing]. 1.7 million of its pickup 
trucks. The irony sort of struck me. Here we are talking about 
a major manufacturer having to recall a pickup truck because of 
the danger of the wheels falling off.
    Now, we are now talking about something different in terms 
of a--and I am not being critical of Ford in this regard, but 
to show you that technology can be very complicated as far as 
designing a missile system to intercept another missile system, 
the combination of the two traveling at a combined speed of 
8,000 miles a minute. That is something that is an 
extraordinary effort on our part.
    So, we are bound to have failures. Each of the failures has 
been for a different reason. Hopefully, if we continue to 
conduct the testing, we will overcome the technological defects 
that we have experienced. But I am not in a position to tell 
you what exactly went wrong. I have had it described to me, but 
I do not have the expertise to give you a full explanation.
    Senator Stevens. I thought maybe you had the answer.
    Thank you, my friend. Senator Inouye.
    Senator Inouye. Thank you.
    Mr. Secretary, if I may follow up my chairman's line of 
questioning. In Alaska just a few days ago, the commander in 
chief of the Pacific announced that he is developing a theater 
contingency response brigade in Alaska. It will be a fine 
organization, ready to move and ready to carry out the will of 
our Nation. But we have no airlift stationed in Alaska.
    We have the 25th Division minus one brigade in Hawaii ready 
to move, well trained, but no airlift stationed in Hawaii.
    We have a marine expeditionary force in Kaneohe. They are 
ready to go, but no amphibious ships in Hawaii. They are all on 
the west coast.
    I would hope that you and your staff would look into this 
because if you want fast response, the troops are ready, 
forward deployed, but we do not have the vehicles to provide 
lift. So, that is my only concern.
    Secretary Cohen. I will follow Senator Inouye's advice.
    Senator Inouye. Very well.
    Senator Stevens. Senator Hollings.
    Senator Hollings. I do not know where these fellows find 
all the enemy out in the Pacific. [Laughter.]
    I hope you deploy in accordance with the threat.
    Senator Stevens. What is the threat in Europe to the United 
States today?
    Senator Hollings. Bosnia and that tinderbox. I will go 
along with Senator Hutchison and withdraw our troops there if 
you want to.
    Senator Hutchison. Thank you. I will sign you up.
    Senator Hollings. Yes. [Laughter.]
    That would be a good question. Before I get to that though, 
you said that we have great respect for today's military. 
However, it seems to me that within DOD there seems to be a 
seed of disrespect toward our military relating, especially 
relating, to health care.
    I will never forget serving on the Grace Commission. 
Commission members said that commissaries, post exchanges, and 
CHAMPUS health care were all waste, fraud, and abuse. The 
Commission members had absolutely no understanding of the 
commitments that had been made to military men and women when 
they enlisted.
    Now, I happen to have been for the draft and still am, but 
we must support and pay for the All-Volunteer Army. That is the 
policy. That is why I have introduced Senate bill 2020, to keep 
the promises that have been made to those who served. This 
legislation, entitled the Military Health Care Equity Act, 
would require that DOD provide all military retirees with 
health care comparable to the care provided by the Federal 
employees health benefit plan, or failing that to make FEHBP 
available. The bill would also require TRICARE to be improved 
to the FEHBP level. I have also joined the chairman of the 
Veterans Committee in sponsoring a bill to allow Medicare to 
reimburse veteran's hospitals when they treat a veteran.
    Now we force retirees who turn 65 out of TRICARE and into 
Medicare. That is not the commitment we made. My best estimate 
is that my bill, Senate bill 2020 will cost about $2 billion to 
honor the commitment that the military has made to provide 
quality, lifetime health care to military retirees.
    Looking at the morning paper, other members are also 
concerned. You can take the $2 billion out of the intelligence 
budget. They always are surprised. That crowd needs to simmer 
back down, and I say that advisedly. I served on the Hoover 
Commission investigating them back in the 1950's. They have too 
much bureaucracy. They should read the New York Times and find 
out what is going on. [Laughter.]
    Otherwise, why not find a couple of billion there or 
elsewhere, not out of your budget, but give us a plan to really 
comply with the promises that have been made, and not a 
Philadelphia lawyer who says now that he is really wanting a 
commitment. Do you not believe we have made a commitment? You 
and I grew up on this side and not in the Pentagon, but that is 
what I have always understood. I believe that the military 
serving in and about us in South Carolina, and elsewhere, were 
promised health care for themselves and their families.

                                TRICARE

    Secretary Cohen. Senator Hollings, you are correct. TRICARE 
I think is in the process of at least maturing and being 
refined in a way that will be beneficial ultimately. There have 
been a number of problems with it. It has not been the quality 
of the medical people. We have some of the finest physicians 
serving in our military. The problem has been access and also 
in terms of payment.
    As part of this DRI I talked about, defense reform 
initiative, I created something called the TRICARE management 
activity, and we are in the process of finalizing now getting a 
retired admiral who is also a physician to be the executive 
director of this agency to deal with those two issues, and that 
is access so you do not have the long lines that they have been 
experiencing and also the lack of payment--being made quickly.
    Senator Hollings. Mr. Secretary, you should hire a 
recruiting sergeant to be the executive director. Recruiting 
sergeants know what they promised the recruits in order to 
convince them to join the services. A recruiting sergeant could 
best explain how TRICARE should be organized so as to care for 
beneficiaries.
    Secretary Cohen. Last year, you may recall, we were about, 
as I remember, $500 million short on the funding of the health 
care programs, and we rectified that. We are still going to 
have to deal with the issue that you have raised here. It may 
take some additional funding.
    But the principal problems have been the lack of access and 
the lack of prompt payment, and those are the two we are 
focusing on right now.
    Senator Hollings. I wish you would look at our bill and 
give your comments when you have time.
    With the limited time, going right to Bosnia, I visited 
there with our majority leader. We got around the table with 
the three heads, Moslem, Croat, and Serb presidents, and 
everything was going hunky-dorey. It sounded just like one of 
those Vietnam briefings that we would get tell us the light 
could be seen at the end of the tunnel, and whoopee. Then, 
Senator Hagel asked, what about the war criminals? Well, the 
Serb president straightened up. He said, now, Mr. Senator, no 
one is a criminal until they are tried and proved guilty of a 
crime. He said, the offenses you charge against our leader, you 
can charge against the other leader, pointing to the Moslem 
leader.
    I can tell you right now I kept asking everybody, not just 
at Tuzla where we stayed, but at Sarajevo and at Tuzla and at 
Brcko, the GI and the general, is this thing working? They 
said, sure, they are fine, I mean, as long as you are going to 
pave their roads and reinstitute lines of communication, repair 
the airports, and clean up the hospitals, and everything else. 
But as soon as we leave, they are going back to war again.
    They are bound to get along as long as we are pouring in 
the money and cleaning the place up. But unless and until the 
Europeans are ready to take over, what is the cutoff date? 
Asked another way, from your experience, when will the job be 
accomplished?

                        the way ahead in Bosnia

    Secretary Cohen. Senator Hollings, I think you would agree 
that if you looked at Bosnia 3 years ago or 4 years ago and you 
saw it today, you would see a dramatic change that our presence 
has made. I think that we have to simply continue the process. 
As I mentioned before, we are coming down in size. I would like 
to come down further. I also have to take into account what our 
European command, SACEUR, General Clark, has to say in terms of 
force protection to make sure that as we are coming down, we do 
not see an enlarged mission. I know that some of you were 
concerned about that, that as we shrink our forces, we do not 
expand the mission. So, it is balancing the mission and the 
manpower. But we are coming down.
    One thing that I have urged upon my European counterparts 
is to create a specialized unit, something that would serve as 
a buffer between the S4 forces and the local police who have 
yet to be trained to professional standards. So, we are making 
a lot of progress in that regard. We have got a number of 
European countries who have committed not only money to the 
international police task force [IPTF], but they have also 
contributed manpower to this specialized unit.
    So, I cannot give you a definite answer. All I can say is I 
think we are going in the right direction and we are coming 
down. Ultimately, all of us will have to decide. It is not just 
this administration or our next administration. It is Members 
of Congress who have an equal role in deciding whether or not 
it is in our overall interest to be there. I think it is as of 
this time.
    Senator Hollings. Thank you, Mr. Chairman.
    Senator Stevens. Thank you, Senator.
    Senator Harkin.
    Senator Harkin. Thank you, Mr. Chairman.
    Again, Mr. Secretary, my compliments to you on your great 
leadership of the Department of Defense.
    I just publicly again want to thank you for being the first 
Secretary of Defense to visit the Rock Island Arsenal. I have 
been hearing wonderful things from the people out there who are 
very enthused by your visit, and I am thankful that you took 
the time.
    I wanted to ask you to assess for us what has happened in 
South Asia in the last couple of days. I do not know how much 
you want to talk about that.
    But under the existing law, the Nuclear Proliferation 
Prevention Act of 1994, certain sanctions are automatic. It 
says that under the sanctions, the U.S. Government shall 
terminate sales to that country--that country being a country 
that would explode a nuclear bomb--of any defense articles, 
defense services, or design and construction services, and 
licenses for the export to that country of any item on the U.S. 
munitions list, and the U.S. Government shall terminate all 
foreign military financing for that country under.
    So, a two-part question. One, can you assess for us in 
military terms what this might mean, what India has done in 
exploding five nuclear bombs now in the last 2 days, what this 
may mean for the entire region of South Asia, and second, what 
your Department is doing or will be doing to implement this 
section of the law?

               development and testing of Nuclear weapons

    Secretary Cohen. Well, first of all, I was looking for a 
clock, but apparently it is behind me, but I believe around 10 
o'clock this morning, President Clinton did have a press 
conference in Germany in Pottsdam. He has indicated that the 
nuclear testing is unjustified, clearly creates dangerous 
instability in South Asia. He is imposing economic sanctions 
against India as an unambiguous response that would make clear 
our categorical position concerning the testing. So, I have not 
seen the details in terms of how broad those sanctions are 
going to be, but I know that he is deeply concerned about it 
and has responded quickly to the invoking of the sanctions 
under the law.
    I think that it is fair to say--I am not sure it is the 
right metaphor or the right wording to be used, but there will 
be a chain reaction. That is the potential of this, a chain 
reaction of other countries following suit. It is one of the 
reasons why we have worked, when I was a Member of the Senate 
and the House, so hard to try to keep the nuclear genie as far 
into the bottle as possible, as far as other nations 
participating in developing nuclear weapons. But as everybody 
knows, there will be pressure on Pakistan we are hoping, and we 
are urging Pakistan to exercise restraint and not to follow 
suit.
    But there will be other countries who will see this as an 
open invitation to try to acquire the technology. We know that 
there are a number of countries trying to acquire it. I filed a 
report last fall showing that there are roughly 25 countries 
now who either have possession or are in the process of 
acquiring nuclear, chemical, or biological weapons. So, we have 
a real proliferation problem that is taking place globally.
    This is only going to contribute to that. I think it is 
going to cause other countries to find a rationale, much as 
India has found its rationale for showing that it has a nuclear 
power. So, I think it is going to set off that kind of 
potentiality at least. Hopefully, we can encourage and be 
successful and encourage the Pakistanis not to follow suit, 
that we can continue to urge the Russians not to transfer 
nuclear technology to the Iranians, by way of example.
    I was in China earlier this year and I met with all of the 
top leadership of China. They made a pledge that they would 
stop selling and transferring nuclear technology to Iran. 
Hopefully, we can continue to maintain these kinds of bilateral 
relationships with major countries such as China and Russia to 
discourage them from having this technology fall into the hands 
of other countries. But it is a potential that we will all have 
to look at.
    Senator Harkin. If I can just use your analogy a little bit 
further. Chain reactions can be stopped technologically 
speaking.
    Secretary Cohen. Hopefully, politically speaking.
    Senator Harkin. And, hopefully, politically speaking too, 
which I think argues that the toughest possible sanctions of 
the law must come down on India to show other countries that we 
mean business on this. Hopefully, we will work with our allies 
to do the same.
    Secretary Cohen. I have been told--at least I learned on 
the news this morning--that Japan has agreed to impose 
sanctions, that France has indicated it would not. Beyond that, 
I have not heard what the international community's reaction 
is.
    Senator Harkin. Typical of France, anyway. [Laughter.]

                     Comprehensive Test Ban Treaty

    That is my statement. You do not need to nod or say 
anything else. Typical of France.
    The one way again to try to stop this chain reaction, it 
seems to me, is to push ahead on the Comprehensive Test Ban 
Treaty [CTBT] signed by 149 nations. We know that in August 
1996 India opted out. Now we begin to understand why. But 
again, looking ahead, a Comprehensive Test Ban Treaty I believe 
is one way of putting in those graphite rods and begin to stop 
this kind of a chain reaction.
    What I read in the paper is that our majority leader said 
that the test ban treaty probably has been set aside as a 
result of India's action. I hope that is not the case. I would 
hope that we would continue to push as hard as possible to get 
all countries to sign on the CTBT because that would be the way 
to stop the nuclear chain reaction.
    Any comments you might have on that I would appreciate it.
    Secretary Cohen. Senator Harkin, I agree with you. I think 
the fact that India has taken this action should not ease our 
concern, but rather accelerate our effort and we ought to be 
more determined than ever. I am hoping that we will continue to 
press other countries and get the ratification of the 
Comprehensive Test Ban Treaty and especially take it up in the 
Senate.
    Senator Harkin. I appreciate that.
    Thank you, Mr. Chairman.
    Senator Inouye. Senator Gregg.
    Senator Gregg. Thank you.

               Indian nuclear capabilities and sanctions

    Mr. Secretary, does India have the capacity to deliver a 
nuclear weapon? Do they have aircraft or missiles which could 
deliver a nuclear weapon?
    Secretary Cohen. Senator Gregg, I would not want to comment 
in terms of what India's capacities are in terms of delivering 
nuclear weapons at this point. I think it is something that we 
certainly ought to look at but not at this time.
    Senator Gregg. Is the administration going to send up any 
legislation relative to extending sanctions against India 
beyond those which might be available already in the law such 
as sanctions which we can pursue under the IMF, but will there 
be language sent up that might track, for example, the Pressler 
language which applies to Pakistan?
    Secretary Cohen. The answer is I do not know. I have not 
had a chance to talk to other members of the President's 
Cabinet or with the President himself. He is traveling and I 
have not had occasion to talk with him. But certainly we will 
look at that and I will get back to you as soon as possible.
    Senator Gregg. Do you think it is appropriate that we put 
limitations such as the Pressler language on India? After all, 
if we are going to say to Pakistan, which has not exploded a 
nuclear device, that we are not going to sell you F-16's which 
you paid for, should we not apply the same sort of standard at 
the minimum to a country which has so flagrantly violated the 
norm on nuclear weapons?
    Secretary Cohen. I am sure the administration is going to 
look with the most severe and critical eye at this particular 
testing. I cannot say at this point what will be recommended, 
but I believe that the President is going to recommend strong 
reaction to it. I cannot tell you at this time what exactly 
that would entail.
    But with respect to Pakistan, let me say that I felt, as a 
Member of the Senate when I served here, that Pakistan was not 
being treated in an evenhanded fashion in terms of the sale of 
the F-16 and how we dealt with that issue, which is one reason 
I supported the Brown amendment to the Pressler amendment.
    Senator Gregg. What other options do we have as a Nation to 
address this type of action by a nation like India? I mean, if 
we use economic sanctions against a nation like India which is 
inherently destitute, we would probably end up taking it out on 
their people more than on their government which is responsible 
for this. What are our options?
    Secretary Cohen. I think sanctions really can have an 
impact if they are multinational or multilateral in nature. If 
it is a question only of the United States taking action, we 
have found that usually it does not produce positive results 
because other countries are rushing to undercut the impact that 
we would have.
    But I do believe that a broad imposition of economic 
sanctions can have an impact upon the leadership, political 
leadership, of a country, and I believe that to be the case 
with respect to India as well. If it is just the United States 
or one or two other countries, then I think the impact will be 
marginal and the political result will be inconsequential.
    Senator Gregg. Do we have any information which is 
available to the public as to whether or not India's 
representation that this was the last of a series is an 
accurate representation or is that----
    Secretary Cohen. I have no information on that subject 
whether it is the first or the last or whether there will be 
other attempts to either lead or mislead the United States. I 
am not in a position to comment.
    Senator Gregg. Thank you.
    Senator Inouye. Senator Bumpers.
    Senator Bumpers. Thank you, Mr. Chairman.
    Mr. Secretary, first of all, let me thank you and the 
administration for your very strong stand on the national 
missile defense deployment issue. The three-plus-three plan is 
an eminently sensible one, and I just want to express my thanks 
to you. God knows you do not get very much thanks these days 
for much of anything else.
    Let me just say that I am very sympathetic with your 
problems and particularly when you have 535 micromanagers to 
tell you what you ought to be doing. So, as 1 of the 535----
    Secretary Cohen. Let me tell you. [Laughter.]
    Senator Bumpers [continuing]. I will now proceed to do just 
that.
    First of all, we make decisions around here based on the 
most credible intelligence we can get. You served on the 
Intelligence Committee for a long time and I was speaking 
downtown last night, and I said apparently the $28 billion to 
$30 billion we spend on intelligence in this country did not 
help out in the case of India exploding underground nuclear 
weapons. So, sometimes our intelligence can be flawed and cause 
a great deal of difficulty. Apparently that was totally missed, 
according to the paper this morning.
    Nevertheless, we do have to depend on the intelligence 
community to determine what the threat is and we have to build 
our defense forces based on the most credible evidence we can 
get as to what the threat is. I happen to disagree with the 
chairman and the ranking member on the Pacific. I do not see 
any threats from the Pacific. That is not to say they are not 
there or that they will not be there.
    But my basic question is--about the only thing I have to 
ask you--when you consider the technological explosion in this 
world in the past several years and we try to translate that 
into our weapons systems, it seems to me that we do not need to 
replace existing weapons one for one. Take fighter planes, one 
of my favorite subjects. You know I am crazy about the F-22.
    Secretary Cohen. It used to be battleships I remember. 
[Laughter.]
    Senator Bumpers. Battleships and a host of others.
    But in any event, here we are getting ready to spend $300 
billion on fighter planes. The F-22 is one of them. Why we 
would put this much money into one fighter plane with no 
obvious threat. I mean, right now the F-22 would be valueless 
to us unless we had the bases, for example, in the Middle East 
to deploy those fighter planes.
    It seems to me that we ought to buy fewer than the 339 we 
plan.
    I know that one of your biggest problems and every defense 
chief before you is readiness. I never heard a Secretary of 
Defense come here and testify that he was not more worried 
about readiness than anything else. When we continue to spend--
for example, procurement is going to go up about 30 percent 
over the next 5 years; while personnel will go up only 6 
percent; and operations and maintenance only about 7 percent. 
It seems to me like that is an inordinate amount for 
procurement.
    So, I have to ask why are we putting about 27 ships in 
mothballs that have, most of them, 15 years' life left in them? 
The CGN-41 Arkansas, $300 million when we launched it in 1978 
with a firm solemn promise that it had a 35-year life 
expectancy. Today that same ship costs $1 billion, but we were 
assured at that time that nobody would be able to match it and 
in my opinion nobody can match it. The only thing I can figure 
is that this is keeping the shipyards busy.
    Back to the point--and it is a philosophical one, one you 
have to deal with all the time--it troubles me that we are 
buying--I favor the E/F, but it troubles me that we are buying 
as many E/F's as we are.
    The F-16. Obviously, we just found out in the last couple 
of days the United Arab emirates thinks the F-16 is superior to 
the Eurofighter or the French Rafele.
    So, you understand the gist of my question. I would just 
like to hear your general comments on that.

                         Aircraft modernization

    Secretary Cohen. With respect to the aircraft, Senator 
Bumpers, you may recall back in 1984, I think it was, along 
with Senator Nunn at that time I introduced a concept called 
the guaranteed build-down, and I deliberately used something 
that sounded like a complete oxymoron by combining the two 
words. It was I believe Alton Frye who was with us at the time 
and sort of our guru about how that could work. But using the 
build-down concept, we said we were going to modernize our 
systems and make them more survivable by taking two of the 
older ones out for every new one we put in.
    In a way, that concept is inherent as far as the 
modernization of our tactical air is concerned. We have six 
different types of tactical air right now. These three new 
systems, in fact, will replace six that we currently have. They 
will be more capable and they will be fewer in number. I cut 
one-half, as a matter of fact, the number of F-18E/F's from the 
original projection. I reduced that number almost by one-half.
    Senator Bumpers. What is that number now, Mr. Secretary?
    Secretary Cohen. It has come from 1,000 down to, as I 
recall, 548, and with an opportunity to go up as high as 750 
roughly in the event that the joint strike fighter does not 
come online at a cost that we can afford. So, I have tried to 
use some balance here. I did not want us to find ourselves in a 
situation where you had one plane that all the services were 
buying into that suddenly had started to go off the charts as 
far as costs were concerned and a lack of performance. So, it 
gave me an ability to say I am going to use the E/F model of 
the F-18 to give me a hedge against the joint strike fighter in 
the event that it does not really pan out.
    With respect to the F-22, that is going to replace some 
aging aircraft, F-15's. It is going to give us a multirole 
stealth aircraft that I think will keep us superior in the 
years to come. One of the reasons that I supported the F-22 is 
that much of that stealth technology that is being developed 
for the joint strike fighter is going to be evolved from the F-
22. So, there is a real synergy involved in those three 
programs.
    I know that it looks to you and to others perhaps as if we 
do not need that, but there is a rationale behind it in terms 
of what each plane can do and will do with the balance it gives 
us for restraining costs in the future and also keeping us well 
ahead of any other competitor. There are other countries out 
there who are seeking to develop better aircraft than we have. 
So far, we are still ahead and we want to keep it that way.
    Senator Bumpers. Thank you, Mr. Chairman.
    Senator Stevens. Senator Domenici.
    Senator Domenici. Thank you very much, Mr. Chairman.
    Thank you very much, Mr. Secretary, for your answers today.
    I am going to talk about three subjects very quickly. Mr. 
Secretary, I believe that from the economic standpoint that the 
status of the American economy has a bearing on the quality of 
life and the retention policies of this country. Now, let me 
explain what I mean.
    If, in fact, we are going to have an economy that has 
unemployment at below 5 percent with a very significant 
increase in the pay rates across this land for working men and 
women, it would appear to me that the U.S. military is going to 
have a more difficult time both recruiting and retaining. Now, 
there are a lot of other reasons, but it is pretty clear to me 
that in the area of Kuwait and Saudi Arabia, especially as to 
the Air Force--and I apologize for not knowing about the Navy 
or the Army--but it seemed to me that the economic situation in 
America is a tremendous draw on technically qualified men and 
women.
    That leads me to think that we cannot wish that away 
because, on the one hand, we wish the economic situation to 
continue indefinitely, and that leads me to ask of you that you 
seriously look at the entire commitment to the All-Volunteer 
Army as to their personal lifestyles. I believe quality of life 
cannot just be a phrase anymore, that you have to look at every 
aspect of our commitment, when we passed an all-volunteer 
military. Essentially it was that we will make sure you get 
paid the equivalent of the marketplace. We said that. That was 
the debate on the floor. That is how we passed it. If we do not 
continue to upgrade that, then it would seem to me that the 
premise upon which we build the All-Volunteer Army is missing. 
We had men and women tell us they were not going to stay in for 
a lot of reasons, excessive deployments, away from their 
families, but also in each case they were saying there are 
great jobs for us out there in anything to do with airplanes.
    So, I would urge, Mr. Secretary, that you be not the least 
bit abashed about reviewing what the appropriate commitment to 
a way of life, quality of life, pay, pensions, and certainly 
health care. If we cannot live up to our commitments, we are 
going to risk losing many, many recruits who are not going to 
join today because they see another opportunity and we are 
going to lose people in too short a period of time to make the 
All-Volunteer Army work.
    Now, I approach it a little differently than some, but I 
believe economics is a very important thing. We heard these men 
and women over there tell us that we cut their pensions. Well, 
they are aware, even though it was a number of years ago--and 
it was.
    Secretary Cohen. 1986.
    Senator Domenici. We ought to take another look at these 
things. Some of us never understood that it really impacts on 
them, especially I say again in an economic environment where 
jobs are plentiful and pay is high. So, that is my first 
observation, and I hope you will give us your views at some 
point. I want to move on to a second one and make sure we are 
clear.
    Mr. Secretary, when you speak of having a reserve fund in 
your budget, the truth of the matter is it is a reserve fund 
called in advance an emergency. So, it is not in the budget. 
So, it seems to me that if you are now beginning to look at 
budgets where you are going to have to have a contingency 
fund--and I would doubt that you will have very many budgets 
without it--it would seem to me that we ought to start talking 
about more and more of that being in the regular budget because 
to manage it otherwise is very tough on readiness, because you 
are robbing from one for another while you wait around for an 
emergency allocation of money.
    I offer to you my full support in an effort to make the 
budget more realistic in that regard. We now have very big 
surpluses. Everybody and his uncle are figuring out ways to 
spend it. I have not heard anybody say, well, what about 
defense. I am saying it right now. They want tax cuts. They 
want all kinds of new programs. If we have got a big surplus 
and we do not have to be worried so much, I am for increasing 
defense. I do not like to see what you have to do when you have 
an emergency. It is not fair to any of you, including the 
generals. Very tough on them.
    Now, my third question--would you like to comment on those 
two, please, just for a moment?
    Secretary Cohen. Why do you not ask your third one and I 
will comment on all three.
    Senator Domenici. All right. My third one is much more 
precise. In the DOD authorization bill, Mr. Secretary, which is 
on the floor, it is interesting that when it comes to missile 
defense--we have a bill on the floor. We are going to vote on 
cloture on the missile defense bill. In the armed services 
bill, the airborne laser program is cut $100 million. Now, that 
airborne laser program, from what I understand--and I would 
like you to corroborate this--is totally supported as one of 
the most significant programs we have. It clearly might work. 
It is ahead of everything else. I wonder whether you would 
agree that we ought to fund it, as you requested it, or should 
we take away funding for a platform that they want in order to 
take the second phase of this on?
    Senator Stevens. Knowing that we have a vote at 10:30, Mr. 
Secretary, perhaps----
    Senator Domenici. My time is up.
    Secretary Cohen. I will be very brief, Mr. Chairman.
    I meant no disrespect by asking you to go to your third 
question. I was looking at the timer, and we were already on 
the yellow light. I figured if I took the time to answer your 
first two questions, you would never get to ask the third one.
    Senator Domenici. Thank you very much.
    Secretary Cohen. So, in any event, let me try to move very 
quickly.

                      Quality of life and pensions

    I agree with you with respect to quality of life.
    The pension aspect, you are quite correct. We changed that 
back in 1986. We made a change in order to try to provide an 
inducement for people to stay longer, not to leave, so they 
would stay 30 years and not leave at the end of 20 years.
    Now it is having just the opposite effect. Right now people 
who have between 10 and 11 years and are looking at the 
future--and they know all about pension plans. I think at our 
respective ages at that time we were not too concerned about 
pensions. Now they are looking very closely, what does this 
mean as far as their future is concerned. And they are looking 
and they are going to see a rather significant reduction from 
those who signed up in 1980, by way of example, almost a 25-
percent reduction.
    So, we have to address the issue on pensions and health 
care. I will not take more time right now, but I will tell you 
that is an issue that we will address in the near future.

                            Missile defense

    With respect to missile defense, we submitted a budget for 
the airborne laser program because we think that is the right 
way to go. So, money was taken out to put into a different 
platform. It is going to be up to this committee to make a 
judgment. We support the airborne laser program.
    Senator Domenici. Thank you very much.
    Senator Stevens. Senator Hutchison.
    Thank you, Senator.
    Senator Hutchison. I would just like to follow up on what 
Senator Domenici was asking and the chairman of the 
Intelligence Committee will follow shortly. I am sure he is 
going to address the issues of intelligence on the Indian 
missile testing.
    But I am very concerned about what Senator Domenici has 
just mentioned in light of not only India actually testing, 
which we know, but North Korea also today threatening to 
renounce its agreement and to refuel its nuclear reactors. We 
know that China has now been sold some of our technology. We 
have fought a war over Iraq having ballistic missiles with at 
least chemical and biological weapons and perhaps nuclear. Iran 
is gearing up.
    Now, I am just saying how can we say that all we need to do 
is wait to see if someone is successful and then within 3 years 
we will be able to deploy our defenses? It just seems to me 
that we ought to be putting this ahead in the priority list, 
especially in light of what has happened just in the last 5 
days.

               National missile defense system and THAAD

    Secretary Cohen. We are spending billions of dollars for 
research and development for a national missile defense system. 
I helped to broker that compromise that was reached on the 
Three-Plus-Three Program, but a judgment we made in just 
another 1\1/2\ years in terms of whether or not it is time for 
the United States to move forward on a National Missile Defense 
Program. Intelligence will play an important factor. We could 
either dismiss it saying it is not reliable, but I tend to 
think that we only focus on the intelligence community when 
there is a failure, not when there are many successes. But in 
this particular case, you will make a judgment, we will make a 
judgment in terms of another 1\1/2\ years, do we go forward and 
deploy a system, assuming we have developed the technology that 
would allow us to do that.
    The THAAD Program raises an issue of the difficulties, the 
technological complexity involved in one missile hitting 
another missile traveling at those speeds. But we are devoting 
billions of dollars to the research and development so that we 
will be in a position to deploy a system should the 
intelligence warrant it or should the determination be made by 
political leaders at that time. Whether we want the 
intelligence to be a factor in our minds or not, that is always 
something that policymakers can make that determination.
    But I think that we are proceeding prudently. Some would 
argue, as a matter of fact, we had one team that said we are 
not proceeding prudently, that we are moving too fast. So, we 
are trying to take into account congressional concerns about 
this, as well as our own. We are moving as fast as we can, and 
for some it is too fast and for others not fast enough.
    Senator Hutchison. What would make you relook at that 
decision of waiting for 1\1/2\ years to make a final decision? 
Is there anything that would make you put that on a higher 
priority list?

                 deciding on Missile defense deployment

    Secretary Cohen. What I am saying is it is on a very high 
priority list right now. We are devoting billions of dollars to 
this research. This is a technically challenging task to build 
such a system, but we are talking about 18 months and we will 
be in a position to make a determination whether or not we have 
the technology to go forward and at that point whether we 
should deploy it. It will take into account other arguments. 
Senator Dorgan just went to the floor to talk about the 
national missile defense system, but you do have other factors 
involved.
    It may be that there will be a determination made at that 
time that the ABM Treaty is no longer relevant, but that is not 
a decision that has been made to date. We do not know, for 
example, whether we have the technology that you could deploy a 
system that will be ABM compatible by the year 2003 or sooner. 
Do we have such technology and is that not a consideration? If 
it is not a consideration, then you may decide on a different 
type of technology that will be required. So, those are factors 
I think we all have to address.
    But right now we are proceeding with our theater missile 
defense systems, developing it, failing in the THAAD Program 
most recently, and also with the national missile defense 
system. We now have a systems integrator who has been selected 
who will be integrating all the various tests that have been 
done to try to put together a system that would be deployable 
in the event the decision is made to deploy.
    Senator Stevens. Senator Dorgan.
    Senator Dorgan. Thank you, Mr. Chairman.

              addressing multiple threats to U.S. security

    Let me ask two questions. I share the Senator from New 
Mexico's interest in the airborne laser program, and I just 
spoke on the floor about the National Missile Defense Program. 
There are a whole range of missile threats and different kinds 
of threats. If the Congress were to force the deployment as 
soon as technologically possible of a National Missile Defense 
Program, notwithstanding cost and other factors, could that in 
the intermediate or long term hinder funding for such things as 
the airborne laser [ABL]?
    Secretary Cohen. I do not disagree. I think we have got a 
balanced program right now and I think we should proceed with 
it. It is one of the reasons why we have tried to weigh all of 
the threats, all of the challenges we face. I think national 
missile defense is an important program. I also tried to point 
out that the spread of biological and chemical weapons also 
presents a threat to this country and to the world at large 
which we are, at this point, not prepared to cope with 
adequately.
    I think that you will see more and more countries 
developing biologicals. It is much easier, much cheaper, and 
equally as dangerous. I took the time to point out during a 
recent address that if you took 100 kilograms of anthrax in the 
right weather conditions and proper dispersal, it would have 
something like two to six times the destructive power of a 1 
megaton nuclear bomb.
    So, there are a lot of threats out there. We are trying to 
have a balanced program.
    Senator Dorgan. And that is the point of my question, that 
if you respond to one threat exclusively, it may well be at the 
expense of responding to other threats.
    Secretary Cohen. We have a whole panoply of threats we have 
to contend with in the future and we have to try to weigh what 
is the most likely, not only what is the most likely, but what 
is the most devastating as well. You might say that a nuclear 
exchange is the least likely, but, of course, it could be the 
most devastating. By the same token, we are looking at the 
spread of biological technology and that can prove equally 
destructive. So, we have a number of threats we have to contend 
with.
    Senator Dorgan. One might make the point that a less likely 
threat would be someone developing or getting a hold of an ICBM 
tipped with a nuclear device. Cruise missiles are probably much 
more readily available and easy to work with.

                      Base closure and realignment

    Let me also ask you about base closings. You, Mr. 
Secretary, suggested some while ago that if not given the 
authority, you might consider allowing some bases just to 
wither. I think you used the term ``wither,'' which might or 
might not be a term of art here. What exactly do you mean by 
that, and are you serious about that?
    Secretary Cohen. I do not think I suggested that as a 
viable option. I said that that could take place. It would be 
the least desirable of any option for a Secretary to exercise. 
It is possible to say that those facilities which no longer are 
deemed to be essential to carry out a mission would simply not 
receive the kind of attention that they otherwise might 
receive. That would not be fair. It would not be fair to the 
people who work there, to the men and women in uniform, and the 
civilian counterparts, and it would not be fair to the 
community in my opinion. That is the least fair of all the 
options because the community does not benefit from such a 
situation.
    BRAC, whatever its deficiencies, is a much fairer process. 
I can recall if you leave it up to the Pentagon and say, OK, 
let us just pick the bases that should be closed, the first 
thing that would happen, Members would say, wait a minute, it 
is political, let us not let that happen. So, you say, now we 
have BRAC. You say, well, that is political. We cannot let that 
happen. So, if you reduce all of the options, you are left with 
an option way down here that says, well, we just cannot afford 
to keep that going. We will let it not be upgraded. So, I think 
it is the least desirable.
    Senator Dorgan. I understand that, and I understand the 
issue of overcapacity, although there are some 40 to 50 bases 
that have been ordered closed but are not yet through the 
closing process. I am one of those who believe that once you 
start a BRAC round, there is a bull's eye on the front gate of 
every military installation and you begin to stunt the economic 
growth of every community until the round is complete.
    Could there not be a more focused approach to this? If you 
have overcapacity, for example, in certain areas, could you not 
do some kind of closure approach that does not put every 
community at risk or does not put every base in question? That 
is one of the reasons you are having problems getting authority 
from the Congress for another two rounds.
    The second questions is, could you not do it in one 
additional round at some point with a more focused set of 
objectives?
    Secretary Cohen. Let me respond very quickly.
    First of all, we found out that within 2 years of a closure 
of a base, about 75 percent of the employment has been 
regenerated. So, I can point to a number of great success 
stories where bases have been closed but they have far more 
employment. Most recently, at Pease Air Force Base, they have 
three times the employment they had when it was a military 
facility, now that it is in private hands.
    But, second, with respect to a more focused approach, if 
the Congress were to decide that you were to leave it up to me 
as Secretary of Defense to take a more focused approach and 
pick and choose those facilities that should be open and 
closed, I could certainly accept that, but I think the minute 
you were to say that, there would be other Members who would 
say, wait a minute. That is too political. We are not going to 
give one person the opportunity to shut down our facilities and 
make that kind of recommendation.
    So, it is one of those where I think the BRAC process is 
the fairest of all, where you have an independent panel that 
receives the recommendations of the Pentagon, and then they 
make a recommendation. I think that is the fairest. It is not 
certainly foolproof in terms of its equity, but I think it is 
the fairest of all the choices.
    Senator Dorgan. Thank you, Mr. Secretary.
    Senator Stevens. Senator Shelby.
    Senator Shelby. Mr. Chairman, I have several questions for 
the record regarding procurement spending and the cost of 
operations in Bosnia that I would like to ask the Secretary for 
the record and that it be part of, if that would be permitted.

                        nuclear testing by India

    Having said that, I would like to get into the problem on 
the subcontinent of Asia. Mr. Secretary, you served a long time 
as a member of the Armed Services Committee. You spent a lot of 
time on the Intelligence Committee. I have worked with you on a 
lot of issues. Were you surprised or shocked at what happened 
in India and us not knowing about it, our intelligence?
    Secretary Cohen. I think my characterization would be the 
same as any of yours. It did come as a surprise. There were a 
number of statements apparently that were quite misleading on 
the part of political leaders. There was, from a technical 
point of view--and again, I have only been looking at this very 
artificially so far--or superficially I should say. I have not 
had any briefings on it as of yet, but it appears that we have 
the technology to see that something was taking place, but the 
analysis was not there. But there is going to be an internal 
investigation by the CIA.
    Senator Shelby. Perhaps the analysis was not done.
    Secretary Cohen. Analysis not done.
    You are going to be conducting hearings----
    Senator Shelby. Tomorrow.
    Secretary Cohen [continuing]. Into the subject matter, and 
you are going to be in a far better position than I am at this 
point to comment.
    Senator Shelby. I believe it was your term--and I thought 
it was very appropriate--that we have now a real proliferation 
problem.
    Secretary Cohen. We do.
    Senator Shelby. We knew it was looming. You mentioned that 
there were 25 nations in the world--I believe it was 25 that 
you said--that have either nuclear, biological, or chemical 
capability.
    Secretary Cohen. Or seeking to acquire it.
    Senator Shelby. Or seeking. Is this going to set off the 
arms race? I believe the phrase was a ``chain reaction.'' There 
has got to be a response to this either by China, Pakistan, or 
someone else, unless we can hold the line somewhere. I do not 
know how we are going to get the genie back in the bottle. I 
would like to see us get it in the bottle, and I know you 
would. Would you want to comment on that?
    Secretary Cohen. The danger is that there will be this 
proliferation and reaction. I used the phrase ``chain 
reaction.'' It can, in fact, be precluded or stopped, as 
Senator Harkin pointed out from a technological point of view, 
but I think also from a political point of view. We need to 
bring to bear all of the political will not only of this 
country, but certainly all of our allies to come down very hard 
on India and to discourage Pakistan from following suit or to 
giving any kind of incentive to any of the other nations who 
are seeking to acquire this technology, pointing to India as an 
example of a country that is now boasting it has a nuclear 
power status which gives them new political prestige in the 
world. I might take issue with that and I think many will, but 
that is part of the rationale, as well as their own 
determination----
    Senator Shelby. But it also makes the world more dangerous 
as we know it today. Is that correct?
    Secretary Cohen. It makes the world more dangerous. It 
means that other countries will try to follow suit unless we 
are able to intervene politically and persuade them that they 
should not do so, and that may take a combination of economic 
sanctions and also some solidarity on the part of the world to 
condemn the action and not only condemn it verbally, but to 
take actions to voice this concern with material actions taken 
on their part.

               international reaction to India's testing

    Senator Shelby. Are you optimistic on getting our allies 
and friends to be part of that solidarity with us, including 
the French and others who at times go their separate ways?
    Secretary Cohen. The answer is I do not know at this point. 
We have had Japan say that they would impose sanctions. The 
French apparently, according to the report I heard on this 
morning's news, said it would not, but that may change as well. 
I would hope that with President Clinton taking strong action 
quickly, that there will be solidarity of response on the part 
of our allies. I cannot predict how that will turn out, but 
that is what is necessary if we are going to dissuade other 
countries from following suit.
    Senator Shelby. But the bottom line is the detonations in 
India have changed the equation tremendously. Have they not?
    Secretary Cohen. It has a significant impact on other 
countries.
    Senator Shelby. Thank you, Mr. Chairman.
    Senator Stevens. Senator Specter.
    Senator Specter. Thank you very much, Mr. Chairman.
    It is nice to have you back, Mr. Secretary, if only 
temporarily.
    I have two questions for you and I will ask them both.
    Secretary Cohen. Could you tell me why the yellow light is 
on before you started?
    Senator Stevens. That is to caution him. [Laughter.]
    Senator Specter. I am going to use up the balance of 
Senator Shelby's time, Mr. Secretary.
    We all know about the nuclear explosion in China. We have 
seen already the immediate ramifications of Pakistan, likely to 
do the same. North Korea may follow suit. China is going to be 
jeopardized. Just how important is the Nuclear Test Ban Treaty 
for the world security, for world peace? How hard will the 
administration and you be pushing to see to it that the Senate 
takes it up and at least considers ratification?
    The second question I have for you relates to the current 
controversy with Israel. We had a briefing last night from 
Secretary of State Albright, and while she did not discuss the 
specific figure, there has been a lot of publicity of 13.1 
percent withdrawal, further deployment, and it seems to me that 
the question of Israeli security is something which has to be 
determined by the Israelis just as a fundamental matter.
    But I do wonder. I did not have a chance to ask her this 
question yesterday. You know the sessions in Senate bill 407. 
There is not a whole lot of time to ask her whether there had 
been an analysis made by our military people, by the Secretary 
of Defense, for example, as to whether the proposal pushed by 
the United States would at least in the eyes of experts in 
defense adequately assure Israel's security.
    I do not say that that would be a substitute for Israel's 
independent judgment, but I would be interested to know, Mr. 
Secretary, whether you or the Department of Defense or anybody 
that you know of has made an independent analysis of the United 
States position on what Israeli redeployment should be as to 
whether at least the United States conclusion is, from a 
knowledgeable point of view, that there is adequate security 
for Israel.

                     Comprehensive Test Ban Treaty

    Secretary Cohen. With respect to your first question, 
Senator Specter, I am a strong believer in the Comprehensive 
Test Ban Treaty. I think the Senate should take it up. I think 
you should ratify it as quickly as possible, and I believe that 
is the position of President Clinton and the Secretary of 
State. We have all called to try to see if that cannot be 
scheduled as quickly as possible. We would like to see it as 
soon as possible. There are not many legislative days left in 
this session. So, we place a high priority on it.

                            Israeli security

    With respect to Israel, I must say that I have not made an 
independent analysis of any formulation pertaining to Israeli 
security. I was recently in Israel and we cooperated very 
closely, I might add, during the buildup of the Iraqi crisis 
starting last October, November, right through February. We 
worked very closely with Israel. I continue to work closely 
with them to make sure that we have satisfied that we are doing 
whatever is necessary to help them in defining their own 
security needs, but I have not made an independent analysis of 
any formulation.
    Senator Specter. I thank you for the succinctness of your 
answers. It gives me a chance for a third question.

                       NATO expansion and Russia

    I voted against the NATO ratification for expansion and I 
did so because of the concern that I have that the inclusion of 
the other three countries may give radical elements in Russia a 
political toehold and that they may come to power. We all know 
that the Russian army has disintegrated very materially but 
that they have enormous nuclear capability. I would like your 
assessment to a question as to whether there was any--to what 
extent do you see at all, 1 percent, 2 percent, because the 
consequences are so cataclysmic if a radical comes to power and 
uses the nuclear force--to what extent at all do you see any 
risk that the radical elements in Russia might come into power 
as a result of NATO expansion and pose any risk at all of a 
nuclear confrontation?
    Secretary Cohen. Well, my personal judgment is that the 
expansion will not contribute to radical elements coming into 
power. We have maintained very strong lines of communication. 
As a matter of fact, just yesterday morning I spent about 45 
minutes on the phone with Marshall Segeyev, the defense 
minister of Russia, talking about ways in which we can continue 
to cooperate. I was asking about ratification of START II and 
what that will take.
    We have, for example, a delegation coming from the Duma 
next week. One of the complaints I have found from the Duma 
members is they do not have enough contact with you, meaning 
you, the Senate. Senate Members no longer travel to Moscow as 
much to meet with them. I am not talking about you, Senator 
Specter, but they do not feel that they are getting the kind of 
reciprocal attention that would be warranted.
    So, when this delegation comes, I am going to meet with 
them. I hope as many Members of the Senate and the House can 
meet with them to build upon the relationships that are 
important, to make sure, as best we can, that we will not have 
any kind of a radical element coming to power relying 
principally upon nuclear weapons.
    I think the Nunn-Lugar funding, for example, the 
cooperative threat reduction funds, should be approved. A very 
important program. When I was in Moscow in February, I went out 
with Marshall Segeyev to one of the sites where we are, in 
fact, helping them to reduce their nuclear weapons. We want to 
continue those kinds of programs.
    But I think as far as this enlargement is concerned, it 
will not contribute to that kind of a risk.
    Senator Specter. Thank you for your answers, and thank you 
for the fine job you are doing.
    Senator Stevens. Thank you, Senator.
    Mr. Secretary, I was late because we had to have a meeting 
of the subcommittee chairmen of this committee to determine 
what we are going to do about the budget. We are substantially 
under the budget. Primarily that comes about because the 
President assumes a whole new series of revenue streams coming 
into the budget process, but none of them are available to this 
committee until they are approved by Congress and become law.
    I have asked each of the subcommittee chairmen to review 
his or her budget and tell me whether there is anything we can 
eliminate or reduce in any function of Government. Since I am 
chairman of this subcommittee, I am looking at that myself.
    I am reminded that when I got that Forrestal Award the 
other night, my staff and I went back and reviewed Forrestal's 
life and Forrestal's recommendations for change at the period 
at the end of World War II.
    We are coming into a new century now, and you are Secretary 
of Defense at a very propitious time. So, I want to ask you 
some unfair questions that I do not expect you to respond to 
now but perhaps we can discuss them later.
    What has been done in the Pentagon as we have closed base 
after base? I do not see ring after ring in the Pentagon being 
closed. Do we see need for a service Assistant Secretary, Under 
Secretary, and Assistant Secretaries for every service? Do we 
still need the redundant systems in the Department of Defense 
itself, the Under Secretary, the Assistant Secretaries? Do we 
need as many CINC's as we have got in the country?
    In other words, have we closed down the management 
structure as we have closed down the structure for housing our 
forces, and do we really need to think about changing the whole 
system? We are in a different period now. We are going into a 
new really space age type of warfare. Maybe we ought to have a 
Secretary for communications and one for intelligence and one 
for deployment policy.
    It seems to me we are structure bound in the Department, 
and the only option you have right now is to close more bases. 
I think we ought to really look at this system and see what we 
need for the next century in terms of defense. I tell you, my 
poet friend, you are the one to do it if we are going to do it.
    Now, we need another Forrestal and I do not think I have 
the position he had. You have. I think it is time you answered 
some of our questions. What can we do to eliminate some of the 
costs of managing the military so that we can preserve the 
force we need to defend our country?
    Now, with that, my friend, I will listen to your comments 
and then I will go vote. All right?
    Secretary Cohen. OK, and how much time before you have to 
vote?
    Senator Stevens. I have got at least 15 minutes to listen 
to you.

                     streamlining and reforming DOD

    Secretary Cohen. OK. Let me give you a 15-minute 
dissertation on what is taking place.
    I agree with you in terms of reforming the way in which we 
do business in the Pentagon. That is principally the reason 
that we initiated the defense reform initiative, the DRI. You 
have a copy of that, and I might point out to you that when I 
went to the services and said, I want you to start taking some 
people out, we have got to get the manpower levels down because 
that is where I can get the savings to put into the 
procurement, I said I am going to take it out of hide as well.
    I expected and we will cut roughly one-third of the people 
in OSD, my office. That is 1,000 people will be eliminated from 
the positions in an 18-month period. It does not translate into 
big dollars, but I want it to be a big symbol that we need to 
change the way in which we are doing business.
    A lot of the structure that has accumulated over the years 
has been political in nature. If I could reform the system on 
my own, I could make a number of changes. Unfortunately, I 
would not have the authority to do that. But I can tell you 
that working with Dr. Hamre, we do have a very strong blueprint 
about changes that we are conducting now and making in the way 
in which we do business. We are moving to a paperless society. 
We are eliminating thousands of pages of regulations. You now 
have to go to the Internet in order to get those regulations. 
We are contracting through the Internet now and will be almost 
wholly by the year 2000, 2001. So, we are making a number of 
changes as we are moving into this cyber age of ours and it 
will be reflected in the way in which we are going to manage 
the Department differently.
    But I will need political support. I cannot change the 
structure of the operations of the Pentagon globally in terms 
of the Secretaries, Assistant Secretaries, and CINC's and so 
forth without considerable support from the Congress. So, I 
will call upon you for changes I will need to have made 
statutorily.
    Senator Stevens. You draft me the law to give you that 
authority, a command consolidation commission, or whatever you 
want to call it, and I will introduce it. If we cannot get it 
out of the authorizing committee, I will put it in your bill. 
We need to have that kind of reform to lead, and if you do 
that--if you do that--if we get you the authority, I will 
support your Base Closure Commission.
    Secretary Cohen. I will even give you the proposal in blank 
verse. [Laughter.]
    Senator Stevens. Thank you, Bill.

                     Additional committee questions

    By the way, the Secretary used to come first and we changed 
that because there are developments through the period of time 
after we review all the departments of your Department, and we 
brought you last. So, you get more heat than your predecessors 
did, but you do well. Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted by Senator Thad Cochran
                       dd-21 acquisition strategy
    Question. Mr. Secretary, recent news reports coming out of the 
Pentagon have highlighted that the Navy and the Department of Defense 
may be considering changes to the current DD-21 acquisition strategy 
due to a perceived lack of competition. I understand that Dr. Hamre met 
with Defense Acquisition Officials to discuss this issue as recently as 
yesterday.
    As you are aware, the Navy issued a request for proposals (RFP) 
that requires potential offerors to respond by May 22, 1998. I 
understand that the RFP requires offers to establish a process for 
ensuring competition and innovation throughout the DD-21 program. Also, 
I've been informed that over 80 percent of the systems and subsystems 
provide opportunities for competition and innovation.
    Is there anything in the RFP that prohibits any other potential 
offeror from bidding on this program?
    Answer. The Navy sought up to three independent offerors for Phase 
I of the DD-21 solicitation. The RFP was drafted and issued with the 
clear intent of having at least two offerors submitting bids. There was 
nothing in the RFP that prevented other potential offerors from bidding 
on the program.
    Question. Doesn't the existing DD-21 acquisition strategy provide 
ample opportunity and incentives for industry participation and 
competition, and benefit significantly from the Government's large 
investment in the Arsenal Ship Program?
    Answer. Yes. The opportunity exists for industry to bring forward 
several teams capable of making acceptable bids for DD-21 development. 
Some individual companies interested in bidding on DD-21 are having 
difficulty making acceptable business arrangements with other companies 
which would lead to formation of a second or third DD-21 team. The Navy 
is discussing the issue with industry in order to determine the range 
of possible solutions to this problem.
    Question. Is it fair to say that the strategy permits two very 
important matters to go forward: shipyard teaming to maximize the 
return on Government and industry investment in common design and 
production process; and, a shipyard as prime contractor?
    Answer. Yes. The current strategy (as of May 13, 1998) would allow 
for those particular matters to be included in an industry team bid 
proposal for DD-21 development, should an industry team choose to do 
so. However, the Navy is concerned about the apparent inability of 
industry to form a second team to compete on DD-21 development. The 
Navy believes that intense industry competition at the system level is 
required in order to meet the aggressive cost and performance goals 
provided in the DD-21 Operational Requirements Document. As of May 13, 
1998, the Navy is discussing its concerns with industry and interested 
Congressional staffs in an effort to craft an acquisition strategy that 
will meet all of the Navy's requirements for competition in the DD-21 
program.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby
    Question. Mr. Secretary, I commend your personnel commitment to 
achieving the Department's investment goal of $60 billion in annual 
procurement spending. I am, however, concerned that the QDR planning 
assumptions to achieve this goal are unrealistic considering the 
historic migration of procurement funds to other accounts, the 
rejection of another BRAC round, and the uncertainty of savings from 
acquisition reform. If these savings do not materialize, how do you 
intend to reach this goal?
    Answer. The Department is on track to achieve the goal of $60 
billion in procurement by fiscal year 2001. In fiscal year 1999 we 
increased procurement by $3.6 billion over the fiscal year 1998 funding 
level, which was within $300 million of our $49 billion goal for this 
year. Even in the absence of more rounds of BRAC we hope to continue 
this track to hit the $60 billion target in fiscal year 2001.
    But, without congressional approval of BRAC rounds in fiscal year 
2001 and fiscal year 2005, we will not be able to sustain this 
procurement program into the next decade. The $3 billion in savings 
that two BRAC rounds will provide is critical to our longer term 
modernization plans. The Department has a number of significant 
programs that will be entering procurement in the next decade, 
including the Joint Strike Fighter, the DD-21 destroyer, the Comanche 
helicopter, various missile defense programs and a number of new 
generation satellites.
    Question. Does the Department have a comprehensive plan to address 
the rapid and massive aging problem of its major warfighting equipment, 
including aircraft, tanks, and ships? To what extent are life extension 
programs being considered? At what point does aging equipment make an 
impact on the decision to use force?
    Answer. The Department is executing an integrated plan to mitigate 
and reverse the aging of our major warfighting equipment. This plan 
encompasses the following elements: Reinventing our logistics processes 
to enhance equipment sustainment while reducing O&M costs in order to 
provide increased funding for modernization; increasing procurement 
funding to $54 billion by fiscal year 2000; reengineering our 
acquisition process to reduce costs, enabling more rapid modernization; 
and adopting modernization of spares to enable rapid technology 
insertion into existing platforms.
    These DOD-level initiatives complement ongoing efforts within each 
Service to assess their capabilities and projected modernization 
requirements.
    The Department relies on each Component to determine their 
equipment and systems requirements. They also determine when new 
procurement programs or life extension programs are necessary to meet 
their requirements. Life extension programs are primarily considered 
for their cost savings or cost avoidance attributes. In some cases, 
life extension programs are used to ``fill the gap'' prior to delivery 
of new equipment or new systems.
    Ongoing ``life extension'' programs include efforts by the Services 
to modernize equipment to meet current threats. Examples include the 
remanufacture and modernization of the 2.5 ton truck (M35A2) under the 
Extended Service Program and the AV-8B remanufacturing program.
    As part of the normal programming and budgeting process, the 
Department and the Service Components review readiness related areas 
and modernization efforts. Through this process, the Department can 
ensure that the current and future condition of warfighting equipment 
and systems will not impact a decision to use force.
    Question. How much does the Department expect to spend before 
completion of its operations in the Balkans?
    Answer. An estimate of total expenditures is not possible since we 
do not currently have a specific end date. Rather than focus on a 
specific end date for operations in Bosnia, the goal is to achieve a 
secure environment without further need for a NATO-led military force. 
NATO is pursuing a transition strategy with the goal of progressively 
reducing force levels, taking account of the security situation in 
theater and the progress toward implementing the Dayton Agreement. 
NATO's intent is to review tasks, the security environment, and risks 
at about 6-month intervals with reductions in force size beginning, if 
possible, after the national elections in September 1998.
    Question. If the fiscal year 1999 budget request for Bosnia, which 
you are requesting that Congress designate as emergency spending, is 
insufficient to cover actual peacekeeping expenses there, will the 
Department need to seek supplemental appropriations that also are 
considered ``emergency'' spending?
    Answer. The fiscal year 1999 request is designated an emergency 
because the requirement was not identified before the budget was 
submitted. Given the current assessment of forces required to support 
operations in Bosnia, the fiscal year 1999 estimate of $1.9 billion 
will be adequate to meet our requirements. However, if an unforeseen 
situation should develop that the Department could not accommodate from 
available funding, then alternative methods of financing would be 
explored, including an emergency supplemental request if the situation 
warrants.
    Question. What are the opportunity costs associated with the 
prolonged peacekeeping operations in Bosnia? Specifically, what 
additional weapon systems would the Department have been able to 
procure if it had not been forced to execute the deployment to Bosnia?
    Answer. It is the Department's responsibility to be ready to 
respond to crises that threaten the nation's interests. The situation 
in Bosnia is such a crisis and we have made a commitment to help lead 
the NATO peacekeeping effort. To avoid serious impact on other defense 
needs the Department proposed financing the fiscal year 1998 Bosnia 
operations with an emergency supplemental appropriation. I am very 
grateful for your cooperation and assistance in providing these 
critical funds to the Department in a timely manner. In a similar vein, 
the Administration submitted a budget amendment to finance the 
projected fiscal year 1999 costs from a reserve established by OMB for 
this and other emergent requirements. If this amendment is not 
approved, it will have a devastating effect on our efforts to achieve 
the readiness and modernization goals outlined in our budget request.
    Question. Despite extensive anecdotal reports that near-term 
readiness is eroding, many unit commanders and regional CINC's contend 
that they do not have accurate or reliable statistics that reflect the 
true state of their forces. What is the status of the Department's 
efforts to provide a better gauge of readiness? Do you believe that it 
is possible to develop a system that is capable of identifying trends 
and therefore could be used for predictive modeling?
    Answer. We are continually improving our ability to assess 
readiness and detect problems and have made great progress to ensure 
that readiness issues receive top management attention. The Senior 
Readiness Oversight Council, called the SROC, was created to provide a 
monthly forum where the senior DOD leaders can review and discuss 
readiness issues. The SROC is chaired by the Deputy Secretary, with 
membership including the Vice Chairman, the Under Secretaries of 
Defense, the Service Chiefs, and the Under Secretaries of the Military 
Departments.
    We have instituted and evolved a monthly in-depth readiness 
assessment process by the Joint Staff, the CINC's, and the Services 
called the Joint Monthly Readiness Review (JMRR). The JMRR, is a 
monthly forum led by the Vice Chairman, JCS, to assess our readiness to 
meet the spectrum of missions as defined in our National Military 
Strategy. We continue to refine both the SROC and JMRR processes to 
help identify, evaluate, and resolve major readiness concerns.
    DOD is also sponsoring several initiatives to improve current 
readiness reporting. The Joint Staff is working to develop an improved 
readiness assessment system that uses the power of information 
technology to improve the timeliness of the reporting process and 
integrate the many aspects of force readiness. Our Military Departments 
also continue to improve and refine their unit reporting systems to 
ensure accurate and timely information.
    Section 322 of the 1998 National Defense Authorization Act directed 
the Secretary of Defense to expand the scope of the readiness reports 
submitted to Congress. These readiness reporting system enhancements 
are currently underway, and DOD is preparing to submit its first 
expanded report to Congress in October 1998. This expanded readiness 
report will include thirteen additional readiness reporting categories 
comprising over two hundred and fifty additional readiness indicators 
designed to provide Congress with a more in-depth view of DOD readiness 
status and trends.
    The Department already uses numerous indicators as warning signs of 
pending readiness problems. We routinely monitor indicators of 
personnel, training, and equipment readiness. Some examples of 
personnel indicators include measures of recruit quality, training 
retention, personnel turbulence, force manning, critical skill manning, 
and PERSTEMPO. Equally important are the equipment and training 
indicators. We routinely follow trends in maintenance backlogs, 
equipment capability rates, Operations tempo, named deployments, and 
spares funding. Several of the indicators, such as mission-capable 
rates, have been monitored for many years and have proven their 
usefulness in assuring ready forces. Others--such as our efforts to 
capture the effects of deployment tempo on our personnel--are 
relatively new, and we are analyzing the data to assess its ability to 
predict trends in personnel readiness. Although no readiness system can 
guarantee accurate predictions, the Department does use such indicators 
to help prevent readiness problems. For example, in a Senior Readiness 
Oversight Council meeting last year, the Air Force noted that the 
aviation bonus ``take rate'' for Air Force pilots was showing a marked 
decline. This was one of the first signs of the emerging pilot 
retention problem. As a result of this indication, the Department 
proposed additional aviation career incentives and other significant 
actions to help mitigate the problem.
    The Department is committed to having a trained and ready force and 
to minimizing any risk in employing that force should the need arise. 
It is to that end that the Services, the Joint Staff, and the Office of 
the Secretary of Defense continue to refine their readiness reporting 
systems.
    Question. In any of your discussions regarding BRAC or alternative 
approaches to reducing excess infrastructure, have you considered 
consolidating primary helicopter pilot training? Would you agree that 
the consolidation of primary helicopter training furthers your goals of 
reducing excess capacity in infrastructure, promoting jointness, and 
eliminating duplication of effort?
    Answer. There has been no consideration subsequent to BRAC 95 
concerning the issue of potential consolidation of primary helicopter 
training. Consolidation of undergraduate helicopter pilot training 
(UHPT) has been reviewed over time and in previous BRAC deliberations 
as an area of potential interest. These reviews considered many 
variables, including operational effectiveness, promoting jointness, 
and cost effectiveness (reducing excess infrastructure, eliminating 
duplication of effort, etc.). Current practices have the Navy and 
Marine Corps conducting consolidated UHPT at Whiting Field, Florida, 
and the Army and Air Force training together at Fort Rucker, Alabama.
                                 ______
                                 
            Questions Submitted by Senator Patrick J. Leahy
                             legacy program
    Question. Conferees for the fiscal 1998 Defense Appropriations Bill 
included $100,000 of the $10 million Legacy Program account to develop 
a management plan for the 1776 Revolutionary War gunboat recently 
discovered in Lake Champlain. This work is being carried out through 
the Underwater Archeology Branch of the Naval Historical Center. It is 
my understanding that approximately $7 million in Legacy funds have 
been released and the initial Underwater Archeology allocation amounted 
to some $200,000. While the Department has made a strong commitment to 
the 1776 gunboat initiative, I remain concerned since the total fiscal 
1998 requirement for Underwater Archeology is closer to $400,000. Would 
you support the release of the remaining $3 million in fiscal year 1998 
Legacy appropriations with an additional $200,000 allocation to 
Underwater Archeology?
    Answer. I am pleased to inform you the Department recently released 
the additional $3 million in fiscal year 1998 Legacy appropriations. Of 
this amount, the Department provided an additional $272,000 to the 
Naval Historical Center for its Underwater Archeology program. This 
means the total fiscal year 1998 Legacy funding for Underwater 
Archeology from the Legacy program is $472,000.
                     underwater archeology program
    Question. Would you support permanent funding for the Underwater 
Archeology program in future fiscal years?
    Answer. The Department of Defense recognizes the importance of 
preserving its cultural heritage, including its underwater 
archeological resources. The Navy Historical Center is the Department 
of the Navy (DON) command responsible for oversight of those resources. 
The Department, however, is currently faced with significant 
competition for limited funds from many areas, including mission 
essential programs, modernization initiatives, and quality of life 
projects. While we expect to be able to fund our underwater archeology 
program at an appropriate level to meet our needs, these constraints 
currently require us to remain flexible and therefore prevent us from 
supporting permanent funding for the Underwater Archeology program.

                          subcommittee recess

    Senator Stevens. If there is nothing further, the 
subcommittee will stand in recess.
    [Whereupon, at 11:46 a.m., Wednesday, May 13, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


       DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 1999

                              ----------                              


                        WEDNESDAY, MAY 20, 1998

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:01 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Cochran, Domenici, Shelby, 
Inouye, and Bumpers.

                         DEPARTMENT OF DEFENSE

                         Secretary of the Army

STATEMENTS OF:
        HON. ROBERT M. WALKER, ACTING SECRETARY OF THE ARMY
        GEN. DENNIS J. REIMER, CHIEF OF STAFF

                 OPENING STATEMENT OF HON. TED STEVENS

    Senator Stevens. Good morning, Mr. Secretary, General 
Reimer. I understand this morning, General, we are honored by 
your spouse who is here. We welcome that. I do not know whose 
shoulder she is looking over, yours or mine.
    General Reimer. She is here to protect me, Mr. Chairman.
    Senator Stevens. We extend greetings to you, Secretary 
Walker, as your first appearance as Acting Secretary. We are 
going to mark up this bill on June 2, and we have many of the 
problems still that we encountered in the 1999 supplemental. 
Those funds came in as an emergency, and now we have a real 
problem on the 1999 budget to balance readiness and 
modernization.
    You two gentlemen face the ongoing challenge of achieving a 
true partnership between the Active Army and Reserve 
components, and I think we have witnessed considerable progress 
this past year in the budget and in the efforts to build new 
bridges within the Army.
    With the new Army Guard director, the new Chief of the 
Guard Bureau to be named, Congress will give you time to 
implement the initiatives started this year and let the new 
Guard leaders establish their priorities working with you.
    I was pleased to have that conversation with you, General, 
as we left the Secretary's office the other morning.
    The actions that you take in formulating the Army's fiscal 
year 2000 budget and the out-year budget plan will be proof of 
the Army's commitment to realize the sort of partnership that 
must exist in the Army as it does in the Air Force and the Air 
Guard.
    I do want to welcome my friend here, and see if he has an 
opening comment first. Senator Inouye.

                   STATEMENT OF HON. DANIEL K. INOUYE

    Senator Inouye. Thank you very much.
    Mr. Secretary and General Reimer, I join my chairman in 
welcoming you here this morning and I appreciate your 
forbearance and willingness to appear. I know that this is the 
third time we have made this attempt.
    Mr. Secretary and General Reimer, some say that the Army is 
at a crossroads, that you are preparing yourselves for the 21st 
century. Over a 2-year period from 1997 to 1999 your forces 
will be reduced from 495,000 to 480,000. You are also 
spearheading an effort to digitize the battlefield and 
modernizing your forces.
    You have added an emphasis to reduce the infrastructure by 
trimming the civilian workers. I applaud your efforts, noting 
that just a few years ago the Army insisted it could not reduce 
its manpower below 495,000.
    Others are questioning whether a smaller force structure 
will be sufficient, and there are some who criticize your 
modernization programs, pointing out that the Comanche 
helicopter, which has already been in development for more than 
15 years, is still nearly a decade away from production.
    Others question whether the weight of the Crusader is too 
heavy for the battlefield, and argue that it no longer is 
planned to incorporate state-of-the-art technologies.
    There is one thing about this city. This city is filled 
with critics, and I suppose there will always be critics, so 
this is your opportunity to discuss these and many other issues 
of interest to this committee, and we look forward to listening 
to your views.
    Mr. Chairman, I want to close by thanking Secretary Walker 
for the fine work he has been doing. As you know, Mr. Walker 
was selected to be the Under Secretary of the Army, but has 
been Acting Secretary for several months. I should also point 
out that during this time there has been no Assistant Secretary 
for Acquisition, none for Civil Works, and no one to replace 
him in his previous job as Assistant Army Secretary for 
Installations.
    I note this because this week the Senate confirmed the 
nominee for Acquisition Matters, and finally, Secretary Walker, 
you will get some help.
    Mr. Walker. Thank you. Thank you, Senator.
    Senator Inouye. So again, General Reimer, Secretary Walker, 
I look forward to your testimony.
    Senator Stevens. Senator Cochran, do you have a statement?
    Senator Cochran. Mr. Chairman, I join you and Senator 
Inouye in welcoming the Secretary and the General to our 
committee, and thank them for their cooperation with us as we 
try to review the budget request and make decisions about the 
level of funding for all the various programs in the Army. 
Thank you.
    Senator Stevens. Senator Shelby, do you have any comments?
    Senator Shelby. I do not have any statement, but I want to 
join you, too, Mr. Chairman, in welcoming General Reimer here 
today and Secretary Walker.
    Senator Stevens. Gentlemen, we will print your statements 
in the record in full. You may use the time as you see fit.

                   statement of Hon. Robert M. Walker

    Mr. Walker. Thank you, Mr. Chairman. As you know, I spent 
15 good years working on this committee, and they were the best 
years of my life, until I went to the Army, and I have got to 
tell you that being able to work with America's soldiers----
    Senator Stevens. There is life after the Senate if you are 
young enough, Mike. [Laughter.]
    Go ahead. Sorry about that.
    Mr. Walker. Mr. Chairman, I turned 50 this year, so I have 
been thinking a lot about that.
    But working with America's soldiers has been for me 
absolutely the best experience of my life. It does not get any 
better than that, and serving as their Acting Secretary for 
these past 5 months has been a tremendous honor, and I very 
much appreciate the support and good words that you and members 
of this committee have given me, but I especially want to thank 
you for the strong support that you give to our soldiers. It is 
recognized, and it is deeply, deeply appreciated.
    A good example of that support was the extraordinary effort 
that this committee made to secure the supplemental. Without 
those funds Army readiness would have broken, because we could 
not have absorbed over $1 billion in the last quarter of the 
fiscal year, so we thank you very much for this committee's 
leadership in securing the supplemental.
    Mr. Chairman, at risk of sounding like that old adage, 
``What have you done for me lately,'' I am here this morning to 
ask you for a little bit more help. As you know, when the Army 
put its budget together the decision had not been made to 
extend the Bosnia deployment and, as a result, there are no 
funds in the fiscal year 1999 Army budget request for 
contingency operations.
    Mr. Chairman, we cannot maintain readiness in the Army next 
year without the additional allowance for contingencies which 
the President has requested in the 920 function of the budget. 
Now, I understand the concerns of this committee on this issue, 
but I must report to you that we cannot manage the Army without 
those additional funds, so I respectfully ask the committee to 
give this request very careful consideration before the 
appropriations process is complete.
    Mr. Chairman, as you know, the Army is very busy these 
days. In 29 deployments since the end of the cold war, the Army 
has provided more than two-thirds of the personnel to those 
deployments. We are doing that heavy lifting for about one-
fourth or about 25 percent of the Defense budget, so America is 
getting a great bargain from her Army.
    Today, almost 33,000 soldiers are deployed in 76 countries 
around the world, and to help ease the tempo of the Active 
Force, over 6,000 of those soldiers are from the Guard and 
Reserve, so the total force is hard at work.
    Now, Mr. Chairman, with regard to the total force, I thank 
you for your comments earlier about the efforts that are being 
made, and I know how important this issue is to you and to the 
entire committee. Frankly, no other issue has commanded more of 
my time since I have been the Acting Secretary, and I want to 
assure you and the committee that we are doing our best to 
faithfully implement Secretary Cohen's total force integration 
policy.
    General Reimer and I are personally committed to 
reestablishing a trusting relationship. We just finished work 
on the program objective memorandum [POM], and the Guard and 
Reserve were at every meeting. They were equal participants, 
and that is the right way to do business, so we will continue 
to make decisions as one seamless Total Army team.
    Now, Mr. Chairman, these are tight budget times for the 
Army. It is difficult, making ends meet, and I must report to 
you that we must secure full funding of our operations and 
maintenance [O&M] request for fiscal year 1999. It is the 
absolute minimum that we will need to keep the Army trained and 
ready during the next fiscal year.
    As you know, last year Army O&M was reduced $450 million 
below the budget request. That reduction did have an impact on 
the field. We essentially had to levy a tax on the major 
commands to pay for it and, as a result, operating tempo 
[OPTEMPO] paid for much of the shortfall, leaving less 
flexibility for commanders to take care of other readiness-
related bills as the year progressed, and we still have a 
shortfall.
    To make up for that shortfall, we will soon be sending you 
a reprogramming request to ensure that we can maintain 
readiness for the rest of the fiscal year. My concern for 
fiscal year 1999 is that we have absolutely no margin for 
error.
    The budget request before the committee includes over 
$1,300 million in efficiencies and savings. We did that to 
shift resources from operations and support to our investment 
accounts, and that was the right thing to do. But if those 
efficiencies are slow to materialize and if the O&M budget is 
also cut, then readiness will be impacted. So I ask the 
committee to support full funding of our O&M request for fiscal 
year 1999.
    Mr. Chairman, with regard to our procurement account, since 
the end of the cold war we essentially took a procurement 
holiday in order to pay for high levels of readiness. We have 
reached the point where we can no longer do that, so this year 
we made a deliberate decision to begin a revitalized 
modernization program. The procurement request before this 
committee today is 17 percent higher than last year as a result 
of that.
    We simply cannot put modernization off any longer. Our 
equipment is aging and wearing out, and technology is growing 
by leaps and bounds. But today, 80 percent of our fielded 
weapons systems have technology that is 1970's technology, and 
our soldiers are driving trucks that are older than they are, 
so we must get on with the task of modernizing an information-
age Army. So I ask for the committee's support for our 
procurement request.
    Now, Mr. Chairman, I know this is not the authorizing 
committee, but I completely agree with Secretary Cohen that we 
will need additional base closures if we are to secure the 
funding that we will need in the future to modernize the Army 
for the 21st century.
    I understand how difficult base closures are. When I was an 
Assistant Secretary, I was the Army's base closure official. It 
was one of the hardest things I ever did. But as difficult as 
base closures are, they do save money--money that we will 
desperately need to invest in the Army of the future.
    By the year 2001, we will be saving almost $1 billion 
annually from our four previous rounds of base realignment and 
closure [BRAC], even after we account for the cost of 
environmental cleanup. But after those four rounds of BRAC, we 
still have excess infrastructure. So to help fund future 
modernization and future force structure, to help fund the 
future readiness of the Army, the next generation of Army 
leaders will need us to make some difficult decisions, and they 
will need us to begin to reduce our excess infrastructure now. 
So I would ask the committee for your support for additional 
rounds of BRAC.
    Mr. Chairman, to conclude, when I became Acting Secretary, 
I said that every decision I made would be made with soldiers 
in mind. We do have the best Army in the world today for one 
reason, because our soldiers are the best of America. We owe 
them not only our respect and admiration, but we owe them a 
good quality of life and an opportunity to achieve their 
personal goals and aspirations.

                           prepared statement

    I believe very simply that if we get it right with 
soldiers, all of these other issues will fall into place and we 
will be able to take care of the Army.
    Mr. Chairman, thank you very much for the opportunity to 
appear today, and I look forward to your questions. Thank you.
    [The statement follows:]
              Prepared Statement of Hon. Robert M. Walker
    Mr. Chairman and members of the Committee: I am pleased to appear 
before you today to report on the state of the Army and to talk about 
the Army's proposed budget for fiscal year 1999.
                            a starting point
    Since the birth of our Nation, America's Army has served the United 
States with honor, courage, and distinction, both at home and abroad, 
in peace and in war. At the threshold of the 21st century, the Army is 
a Total Force, an institution with people at its core--Active, National 
Guard, Army Reserve, civilian employees, families, and retired members. 
The strength and character of the Army's soldiers and civilians are the 
linchpin in maintaining our Army as the finest in the world.
    The soldiers, civilians, and family members who comprise America's 
Army continue the legacy of superb service to our Nation with an 
exceptional mix of professionalism, selfless service, and personal 
sacrifice. With over 100,000 soldiers stationed overseas and, on any 
given day during the year, with another 30,000 soldiers of the Total 
Force deployed to more than 70 countries on joint and combined 
operations and exercises, America's Army continues to be a key player 
in our Nation's efforts to help shape the international security 
environment. You, and the entire Nation, can and should be proud of 
their achievements.
                           where we are today
    A new global security environment exists as a result of social, 
political, and military changes that have occurred during the past 
decade. No longer a world in which two hostile super-powers face each 
other, today's environment includes threats--and opportunities--in a 
wide number of areas.
    While we no longer face the immediate threat of a rival superpower, 
there are states and other transnational actors who can still challenge 
our interests militarily and, increasingly, by asymmetric means such as 
weapons of mass destruction and cyber-terrorism. Make no mistake about 
it; we live in a very complex and still dangerous world.
    America's Army has evolved to meet the challenges of this post-Cold 
War world. We are a strategically relevant member of the joint forces 
America can deploy to meet the challenges of today's world. Executing 
missions now requires a mobile Army that can be deployed rapidly 
wherever and whenever needed. In the last eight years, we have 
transformed the Army from a forward-deployed force to a capabilities-
based force. The Army has reduced and redistributed its forces, closed 
and realigned bases, improved integration of Active and Reserve 
Components, and reorganized and redistributed its equipment pre-
positioned overseas.
    The Army is strategically relevant and has an important role in 
helping to shape a new international environment to bring about a more 
peaceful and stable world. While fighting and winning two nearly 
simultaneous major theater wars remains the foremost task, we must also 
respond to a wide variety of other potential missions. For example, we 
are fully involved in the Asia-Pacific region, an area of increasing 
importance to the American people. By building strong relationships 
through engagement activities in this region of the world, the Army 
helps foster trust and confidence, as well as contributes to the 
political security and economic stability of our friends, allies, and 
other countries. Our involvement in bilateral and multinational 
exercises, exchange programs, information sharing, and other contacts 
with militaries throughout the Asia-Pacific region are active methods 
for shaping the strategic environment in ways favorable to America's 
interests. In this vitally important area of the world, the Army has 
provided demining training in Cambodia and Laos; and shelter, 
processing, care, and security for Kurdish evacuees in Guam. Army 
soldiers have trained with their counterparts from Thailand, Japan, 
Korea, Australia, and other nations in a number of combined exercises.
    Additionally, Headquarters, U.S. Army Pacific (USARPAC) co-hosts 
the Pacific Armies Management Seminar with the army of another Asia-
Pacific nation on a biennial basis. This is a non-political effort with 
the purpose of providing a forum for discussion of common military 
issues in a professional environment. Additionally, this is the only 
regular gathering of the chiefs of armies in the Asia-Pacific region 
and is a major element of USARPAC's Expanded Relations Program.
    In Europe, consider the George C. Marshall Center in Garmisch, 
Germany. Since its foundation in June 1994, the Center has been at the 
forefront of pioneering efforts to build an active environment for the 
growth of democracy and democratic institutions within the diplomatic 
and defense bureaucracies of the newly independent states of the former 
Soviet Union (FSU) and Central Europe. The primary teaching vehicle 
used by the Center is an 18-week course for senior foreign civilians 
and military officers from these countries.
    The content of the course includes such subjects as western methods 
of defense organization, planning and budgeting, civilian oversight of 
the military, civil-military interaction, and the democratization 
process. Because of the synergy created within the Center, the Army 
trains all of our Eurasian regional specialists there. In addition to 
an excellent curriculum, study at the Center provides these American 
officer-students an opportunity to establish personal contacts within 
the various Central European and FSU governments. These contacts have 
reaped enormous dividends and strengthen a very successful program that 
produces our Army's Soldier-Diplomats.
    The National Guard State Partnership Program, which began in 
December 1992, is another example of Army shaping activities. The 
program links U.S. states and emerging democracies of Central and 
Eastern Europe, Eurasia, and Latin America through ties between the 
state governor and state National Guard with the ministry of defense 
and the soldiers of the partner country. Our goal is to demonstrate, 
through the example of the citizen-soldier, the role of the military in 
a democratic society. The program seeks to build long-term 
institutional affiliations and people-to-people relationships while 
simultaneously assisting in the effort to establish democratic military 
organizations.
    In Latin America, for example, the Army supports the U.S. Southern 
Command's efforts to bolster the emerging as well as more established 
democracies of the region. The area's past history of military 
intervention in politics and the instability created by 
narcotrafficking threaten Latin American democracies.
    With regard to Latin America, the Army supports the National 
Security and National Military Strategies, as well as the Regional 
Strategy of the Commander-in-Chief through a variety of programs. Most 
important among these is the U.S. Army School of the America's 
(USARSA), where we seek to convey to our Latin American neighbors the 
know-how to conduct effective security operations while respecting 
democratic principles, especially the human rights of their people.
    USARSA is truly relevant to the challenges we face in Latin 
America. The curriculum is derived from the Southern Command strategy, 
and emphasizes supporting democratic institutions, combating 
narcotrafficking, and respecting human rights. Last year, 60 percent of 
USARSA students came from the Andean Ridge and Mexico, key countries in 
our war on drugs; 20 percent were police.
    USARSA is critical to our efforts to develop closer ties with Latin 
American militaries. The school effectively conveys our values to our 
southern neighbors. We carefully screen prospective students and are 
equally careful about what we teach. I have heard the concerns raised 
about this school, and I want you to know that today USARSA is teaching 
the technical skills and promoting the democratic values that support 
American policies and values.
    The combination of Active Army participation in joint and combined 
exercises, army-to-army contacts, and humanitarian assistance and civic 
action projects around the world provide our allies a deeper 
understanding and appreciation of the U.S. Army's roles, missions, and 
capabilities. Additionally, these activities improve interoperability, 
increase the warfighting capability of our combined forces, and 
demonstrate to any potential aggressors our determination to maintain 
peace and stability around the world. Finally, these activities provide 
our leadership an opportunity to build and strengthen personal and 
professional relationships while providing valuable insights into the 
needs and hopes of our friends and allies.
    As we take on these diverse missions, we continue to focus on our 
core competence: to fight and win the Nation's wars. Throughout 
history, forces on the ground have won wars and brought final 
conclusion to conflict. Only soldiers on the ground can take and hold 
territory. America's Army is able to project its forces and establish 
direct, continuous, and comprehensive control over land, resources, and 
people in order to achieve victory and ensure an enduring peace. 
Whatever the mission, one thing remains as clear today as it has 
throughout history: committing the Army commits the Nation. There is no 
greater expression of national resolve and will than to put our 
soldiers--America's sons and daughters--on the ground.
    The inherent versatility of America's Army makes it the force of 
choice for the majority of military operations in support of the 
National Security Strategy. In 28 joint military operations since the 
fall of the Berlin Wall, the Army has repeatedly done the Nation's 
heavy lifting, accounting for over 60 percent of the forces committed 
to these operations, while consuming less than one-quarter of 
Department of Defense's budget.
    The force levels recommended in the Quadrennial Defense Review 
(QDR) are the minimum necessary to carry out the National Military 
Strategy. We cannot reduce our capabilities below that level and still 
respond to two major theater wars. Further, we must begin to transform 
the Army by exploiting technological advances that will change future 
warfare. To do this with forces that remain committed to operational 
readiness, contingency operations, and engagement activities requires a 
predictable investment program and a fundamental re-engineering of 
support infrastructure. It is clearer than ever that we require 
additional rounds of base-closures to maintain force structure and 
ensure readiness in the 21st century. Both the Chief of Staff and I are 
in full agreement on this. We recognize how painful base closures are, 
but we must reduce our infrastructure to meet the requirements of the 
future.
    For fiscal year 1999 and beyond, the world security environment 
will continue to be unpredictable, volatile, and dangerous; America's 
Army will remain ready to respond rapidly and decisively to any crisis 
around the world. Accordingly, we will continue the integration of 
Active and Reserve Components, enabling the Total Force to perform an 
increased number of missions more efficiently and effectively. Each 
component of the Total Force--Active, Guard, Reserve, and civilian--
provides essential capabilities that give the National Command 
Authorities a range of options when dealing with contingencies.
                        fiscal year 1999 budget
    President Clinton has submitted an Army budget for fiscal year 1999 
of $64.3 billion. This budget is the result of a very careful 
assessment of our needs and priorities and reflects today's fiscal 
realities. More importantly, this represents a real increase over the 
fiscal year 1998 budget. This is the first increase since 1985, 
excluding Desert Storm.
    Between fiscal year 1989 and fiscal year 1998 the Army's buying 
power has been reduced 37 percent. The greatest challenge facing the 
Total Army is balancing readiness, quality of life, and modernization 
within available resources. In addition, since 1989 the Army has seen 
the number of operational deployments increase 300 percent from the 
Cold War period.
    Maintaining this delicate balance between requirements and 
resources is increasingly difficult. Funding must be adequate, 
sustained, predictable, and synchronized to meet the readiness, force 
structure and endstrength, quality of life, and modernization 
requirements of today and the uncertain future.
                            army priorities
    As we look to the future, the Nation's interests require America to 
continue to field the best Army in the world. Our priorities are to 
maintain current high levels of readiness, to resource priority 
modernization requirements, and to maintain a good quality of life for 
all members of the Total Force.
    Last year's budget request assumed that U.S. forces would complete 
the mission in Bosnia by the end of June 1998. As the committee is 
aware, the President has determined that an extension of the U.S. 
mission is required to ensure continued compliance with the Dayton 
Agreement. The Administration will submit a non-offset budget 
amendment, designated as an emergency under the Budget Act, to provide 
for the required funds during the remainder of fiscal year 1998. In 
addition, the fiscal year 1999 President's budget includes an allowance 
for undistributed funds to cover contingencies such as the Bosnia 
mission and natural disasters.
    I strongly urge the committee to approve the President's requests. 
The Army cannot absorb these costs within current budgets. Timely 
passage of the fiscal year 1998 supplemental is necessary to prevent 
severe readiness problems in the Army. Without the approval of these 
funds, Army commanders will be required to curtail training and the 
readiness ratings for Army combat forces could slip below that required 
to support the National Military Strategy. Failure to receive required 
non-offset funding in fiscal year 1999 would also reduce readiness 
below acceptable levels in the next fiscal year.
Readiness
    Readiness continues to be our number one priority. The fiscal year 
1999 request provides adequate funds to maintain readiness and ensure 
the Army's ability to fulfill the National Military Strategy. High-
quality people, both soldiers and civilians, in all components of the 
Total Force are the defining characteristic of a ready force. Today's 
strategic environment demands highly capable and flexible soldiers and 
civilians, able to adapt to complex, dangerous, and ever-changing 
situations throughout the world. Many factors contribute to readiness; 
however, three key contributors are recruiting, training, and 
leadership.
    Recruiting.--Today's recruits continue to be the best educated and 
disciplined in our Army's history. To succeed now and into the future 
requires that we sustain the high quality men and women serving in the 
Army today. They are the indispensable and decisive element in any 
strategy.
    During fiscal year 1997, the Army was able to overcome many 
significant challenges and successfully recruited 82,087 soldiers to 
meet end-strength requirements. Quality marks for these soldiers meet 
established Department of Defense goals. More than 90 percent possessed 
high school diplomas; over 68 percent scored in Test Score Categories 
I-IIIA on the Armed Services Vocational Aptitude Battery; and fewer 
than 2 percent scored in Test Score Category IV. The ten percent 
without high school diplomas possess a GED or equivalent high school 
education and must score in the upper half of the aptitude test. During 
fiscal year 1997, the Army also improved retention and decreased 
attrition.
    The Army is on track to meet its fiscal year 1998 accession 
mission. Our success in the current fiscal year and the out years will 
be to some extent, a reflection of the extraordinary efforts made 
during fiscal year 1997--increased enlistment bonus and educational 
benefit funding; increased maximum enlistment bonus payments for 
selected military occupational specialties; increased maximum college 
loan repayment; increased educational benefits (a combination of the 
Montgomery GI Bill and the Army College Fund); increased numbers of 
production recruiters; and increased funding for advertising and 
recruiter support.
    While the Army continues to enjoy success in recruiting, the strong 
domestic economy and tight labor market have created an extremely 
challenging recruiting environment. Despite these challenges, the 
Army's professional recruiters are doing a masterful job in both 
quantitative and qualitative terms. We must support them and continue 
to give them the tools, including the resources, necessary to guarantee 
their success.
    Training.--Quality training is essential to maintaining a decisive 
battlefield edge. Readiness is directly related to our ability to 
provide realistic and relevant training. However, our military 
commanders indicate that the quality of training is not necessarily 
related to the quantity. In today's operational environment, soldiers 
and families are already under significant stress from operational 
deployments. Leadership is the key to ensuring that the training 
schedule is not overcrowded and that the focus is on providing high 
quality training events to maintain readiness.
    Realistic and relevant training--conducted at the proper 
frequency--is the glue that bonds the Total Force together as an 
effective fighting force. In the coming year, we will examine how we 
train at our Combat Training Centers in order to ensure that they offer 
the full range of threats we anticipate our soldiers will face in the 
years ahead. This includes weapons of mass destruction, increasing 
urbanization, and the presence of noncombatants on the battlefield.
    We are toughening the training of our recruits to improve 
``soldierization.'' This year we will expand basic training by one 
week. This will enable us to focus on the values of America's Army and 
to institute a three-day warrior field exercise designed to challenge 
recruits to meet their full potential as soldiers.
    Leadership.--A ready Army is not only well trained, but also well 
led. Our Force XXI process of change has already taught us much in 
terms of equipping and training the force for the future. Likewise, 
this year will see significant developments in our Force XXI leader 
development programs. We have initiated a new Officer Efficiency Report 
and have implemented Officer Personnel Management System XXI.
    The backbone of our Army is the world's finest non-commissioned 
officer (NCO) corps. Today's strategic environment requires 
disciplined, well-trained and ready forces. Our NCO corps is the key to 
success. From the flooded streets of America's cities to the strife 
torn regions of Bosnia-Herzegovina, the Army's NCO's demonstrate 
courage and commitment on a daily basis. In the classrooms and motor 
pools, on the firing ranges and at our Combat Training Centers, the 
Army's non-commissioned officers exemplify professional competence. 
They demonstrate a willingness to take prudent risk, the boldness to 
seize the initiative, and the determination to do their best; qualities 
that have been the hallmark of America's soldiers since before we were 
a nation. On a daily basis, both at home and abroad, our NCO's serve as 
role models for our soldiers, as well as people around the world, 
standing as an example of American values and as the embodiment of a 
professional military.
Modernization
    Modernization is the guarantor of future readiness. Far too often 
over the last several years, we have been forced to mortgage our future 
in order to preserve near-term readiness. When supplemental funding for 
the Gulf War is excluded, fiscal year 1998 was the thirteenth 
consecutive year of declining Army resources. During that period 
modernization declined 65 percent while we lived off the drawdown. By 
fiscal year 1998, Army procurement comprised only 15 percent of all 
Defense procurement.
    The Army modernization strategy prioritizes investments over time 
and reflects the linkage of our modernization plan to the operational 
concepts described in Joint Vision 2010 and the patterns of operation 
outlined in Army Vision 2010. The Army Modernization Plan is a 
comprehensive program of improvement designed to ensure that America's 
Army remains the world's preeminent land force.
    Our modernization efforts are designed to provide America's 
soldiers with the best weapons and equipment available; weapons and 
equipment that are suitable for operations at all levels of the 
operational continuum. We are focused on maintaining our current combat 
overmatch and achieving Information Dominance in the near-term. In the 
long-term, we seek to field an Army capable of achieving Full Spectrum 
Dominance. Our revised modernization strategy investment goals are 
designed to achieve five major objectives:
  --Digitize the Total Army by 2010.
  --Maintain Combat Overmatch.
  --Recapitalize the Army.
  --Fully integrate the Active and Reserve Components.
  --Focus Science and Technology (S&T) efforts on leap-ahead 
        technologies required for the Army After Next.
    Military hardware, operational concepts, doctrine, and command 
initiatives are neither absolute nor static. Change is constant. The 
armies of the past have all required reorganization and restructuring 
to meet then current requirements. The Army of Desert Storm must 
likewise change to meet the challenges of the future. The fiscal year 
1999 budget reverses the decline of the past. We are proposing a 17 
percent increase in the procurement accounts. We must sustain this 
trend to transform an Industrial Age army into an Information Age army.
    Today's Army leads the way in acquisition reform. By continuously 
evaluating the way it does business to ensure our soldiers always have 
access to affordable and effective leading edge technology in equipment 
and service, the Army has achieved considerable success with 
acquisition reform.
    For example, we have launched a major effort, called Modernization 
through Spares, to insert commercial technologies and reduce the cost 
of spare parts. Additionally, in attaining savings through credit card 
purchases, the Army was the first federal agency to exceed one million 
transactions for micro-purchases in fiscal year 1996, and broke that 
record with 2.4 million transactions in fiscal year 1997. By 
aggressively implementing better business practices at all levels, the 
Army is taking advantage of the Revolution in Business Affairs to help 
fund modernization, readiness, and quality of life programs. But, we 
must continue to emphasize the benefits of acquisition reform.
    We must also continue to work to remove the structural barriers to 
achieving the most efficient Army possible. We are working hard to 
ensure that we have one Army--not an operational army, a support army, 
and an acquisition army. As we continue down this road, I ask for your 
support in these and other initiatives we are pursuing. It is 
imperative that we look at innovative ways to reduce overall support 
costs, improve spare parts availability, maintain weapon system 
readiness rates, and provide funds for modernization. In particular, I 
would mention the Prime Vendor Support program (PVS). This is an 
initiative whereby prime contractors could assume full responsibility 
for total system performance while achieving savings in operations and 
support costs and modernizing the weapon system through the integration 
of contemporary spare parts. At the same time, these innovative 
concepts must be effective in peacetime, during contingency operations, 
and in war. We strongly believe that PVS is an initiative that will 
leverage the best commercial practices that industry has to offer, 
maximize rapid distribution, and reduce stock levels while maintaining 
readiness. We are confident that it holds the potential for significant 
savings for our Army. In the next few months, we will finalize the 
details for the Apache pilot program as well as the M109 fleet 
management pilot program, and then make the final decisions required to 
move forward.
A New Method of Change
    The current process of change is called Force XXI and is designed 
to reconceptualize and redesign the Army at all echelons, from the 
factory to the foxhole, in order to fully exploit the capabilities of 
Information Age technologies. The product resulting from that effort 
will be Army XXI, currently scheduled to be fielded from 2000-2010. 
Army XXI will be digitized and capable of achieving Information 
Dominance over any adversary.
    The Force XXI process is a journey, not a destination, however, and 
Army XXI is only one step along the way. As a result of the 
overwhelming success of Desert Storm, many nations are seeking to 
obtain and apply modern technology to their military forces. The result 
will likely be that the next battlefield we face will be more 
challenging than ever before. The Army After Next Project (AAN) is 
designed to explore the uncertain world of the deeper future and help 
ensure that land component operations in 2015 and beyond are fully 
integrated with those of our joint and multinational partners. The AAN 
long-term focus is on obtaining the leap-ahead technologies required 
for the Army to achieve Full Spectrum Dominance during the military 
operations of the future.
    Information Dominance is central to achieving the Full Spectrum 
Dominance described in Joint Vision 2010. Recent Advanced Warfighting 
Experiments (AWE's) have revealed that secure information technology 
can create an order of magnitude difference in combat effectiveness. 
Information Dominance, when coupled with revised leader development and 
training programs, will give the Army the mental agility required to 
exploit opportunities on the increasingly complex and dynamic 
battlefields of the future.
    Digitization is the means by which we will achieve Information 
Dominance and, as such, is the key to the ultimate realization of Full 
Spectrum Dominance. Digitization is an integral part of modernizing for 
the Information Age. Digitization spans the entire Army modernization 
strategy. It involves the use of modern communications capabilities and 
computers to enable commanders, planners, and soldiers to rapidly 
acquire and share information. The resulting improved awareness will 
revolutionize the conduct and tempo of all phases of future combat 
operations.
    The cornerstone of this effort is our goal of fielding a digitized 
corps by 2004, with an intermediate objective of a digitized division 
by 2000. Remaining Active Component divisions and selected Reserve 
Component combat, combat support, and combat service support units will 
be digitized by 2010.
    The Digitization process involves upgrading or modifying some 
existing systems; adding to or ``appliqueing'' a capability to others; 
and ensuring future systems have information technologies built in as 
an integral part of the system when appropriate. All these capabilities 
are being developed in compliance with a common set of standards to 
ensure interoperability and enhance efficiency through software reuse.
    The Task Force XXI AWE, completed this past Spring at the National 
Training Center, focused on operations at the brigade level and below. 
Friendly situational awareness, a top priority for this experiment, was 
a great success. In preparation for the experiment, the Army installed 
and integrated over 4,000 pieces of digital equipment on nearly 1,000 
vehicles of all types. The AWE successfully experimented with the 
Tactical Internet, and provided insights that will guide investment 
decisions in hardware and software technologies. In November 1997, the 
Army conducted the Division XXI AWE which focused on division and corps 
operations using Army Tactical Command and Control Systems. Results 
will help refine the architecture for the first digitized division (the 
4th Infantry Division), which will be fielded in fiscal year 2000.
    The Army continues to pursue many ongoing efforts with the other 
services and allies to ensure interoperability and seamless 
communications throughout the battlespace. Additionally, the common, 
minimal set of information technology standards developed by the Army 
on behalf of digitization is the basis of the Joint Technical 
Architecture that is now mandated for use throughout the Department of 
Defense.
Protecting Information
    What we are seeking is information dominance. At the same time, 
however, we are not alone in our efforts to harness the power of the 
Information Age. There are many threats to our ability to gather, 
process, and disseminate information, some of them have only just begun 
to emerge. Protecting our information will be key to the success of 
future operations.
    Our Advanced Warfighting Experiments have demonstrated that the 
computers and other information systems we are developing worked well 
at all echelons and provided continuous, enhanced situational 
awareness. We are able to detect, identify, and track hostile activity 
in sufficient time to target it with lethal weapons or maneuver against 
or around it as appropriate. Likewise, we are able to locate, identify, 
and track friendly forces.
    What we have learned has gone a long way toward answering a 
soldier's three most important questions: Where am I? Where are my team 
members? Where is the enemy? That information is powerful and our 
ability to gather, process, and disseminate more of it than ever before 
has made a major difference in our conduct of operations.
    As we look to the future, however, we know that to be successful, 
we must also have information superiority: the capability to collect, 
process, and disseminate information while exploiting or denying an 
adversary's ability to do the same. In all our developmental and 
experimental efforts, we are conducting appropriate ``red team'' 
efforts as part of a holistic approach to organizational, materiel, and 
procedural solutions needed to protect our information from the full 
array of potential threats.

                 RESEARCH, DEVELOPMENT, TEST AND EVALUATION--FISCAL YEAR 1999 PRESIDENT'S BUDGET
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                           Fiscal year--
                     Category                     --------------------------------------------------------------
                                                     1997     1998     1999     2000     2001     2002     2003
----------------------------------------------------------------------------------------------------------------
Basic Research...................................      175      180      201      211      216      221      227
Applied Research.................................      542      654      511      526      541      557      569
Adv Tech Dev.....................................      654      657      484      556      515      480      475
Dem/Val..........................................      540      563      466      449      330      203      248
Eng Manufacturing Dev............................    1,146    1,162    1,269    1,361    1,728    1,993    1,801
Management Support...............................    1,145    1,129    1,076    1,054    1,001      953      942
Operational Sys Dev..............................      716      679      773      596      569      479      623
                                                  --------------------------------------------------------------
      Total RDTE.................................    4,916    5,025    4,781    4,754    4,900    4,887    4,885
----------------------------------------------------------------------------------------------------------------

    The fiscal year 1999 RDTE request provides funding for Science and 
Technology efforts that are focused on affordable options to achieve 
capabilities envisioned for Force XXI, Army Vision 2010, and Army After 
Next. This will ensure the timely development and transition of 
technology into weapon systems and system upgrades and to explore 
alternative concepts in future global, capabilities-based warfighting. 
The Army S&T program emphasizes technology insertion via upgrades to 
existing platforms, support of Joint Chiefs of Staff future warfighting 
capabilities and Force XXI AWE's, early reduction of risk in material 
development programs and management through the Army Science and 
Technology Master Plan.
    It also provides for the continued funding for the Force XXI 
Initiatives begun in fiscal year 1997, a program that uses the 
Warfighting Rapid Acquisition Program (WRAP) as a vehicle to jump start 
technology and put proven technology into the hands of soldiers, while 
achieving significant time and dollar efficiencies.
    The fiscal year 1999 RDTE budget provides for the continued 
development of major programs such as Comanche, Crusader, Follow-on to 
TOW, Brilliant Anti-Armor Submunitions (BAT) and Army Battlefield 
Communications System. The budget does not provide for any major system 
new starts.

                         PROCUREMENT APPROPRIATIONS--FISCAL YEAR 1999 PRESIDENT'S BUDGET
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                           Fiscal year--
                  Appropriation                   --------------------------------------------------------------
                                                     1997     1998     1999     2000     2001     2002     2003
----------------------------------------------------------------------------------------------------------------
Aircraft.........................................    1,329    1,323    1,325    1,372    1,456    2,007    2,074
Missiles.........................................    1,003      744    1,206    1,432    1,414    1,488    1,285
Weapons/Tracked Cbt Veh..........................    1,419    1,291    1,434    1,566    1,615    1,794    1,911
Ammunition.......................................    1,143    1,020    1,009    1,157    1,232    1,495    1,664
Other Procurement................................    3,178    2,563    3,199    3,602    4,204    4,456    5,327
                                                  --------------------------------------------------------------
      Total......................................    8,071    6,941    8,173    9,128   10,022   11,239   12,260
----------------------------------------------------------------------------------------------------------------

    The fiscal year 1999 President's budget request for the procurement 
appropriations is $1.2 billion higher than the amount appropriated in 
fiscal year 1998. This increase reflects the Army's continued emphasis 
on modernization for the Total Army. The budget request increases 
funding for Reserve Component modernization, specifically in Air 
Defense, Combat Service Support Systems and Blackhawks (for the Army 
National Guard). Critical modernization programs such as Longbow 
Apache, Abrams Tank Upgrade, Family of Medium Tactical Vehicles, 
Bradley Upgrades, ATACMS and first year funding for the BAT are also 
funded.
    The digitization of the force is another key investment focus with 
increased funding for the Army Battle Command System, which encompasses 
Command and Control Systems and the Warfighters Internet. These systems 
are key to the Army's ability to digitize the first division in fiscal 
year 2000.
    The ammunition program consists of Training Ammunition, War Reserve 
Modernization Ammunition, Ammunition Industrial Base Funding to include 
the Armament Retooling and Manufacturing Support (ARM's) initiative, 
and Ammunition Demilitarization.
    The President's budget funds Training Ammunition to the C-1 
Readiness level. It buys four of the Army's ammunition modernization 
priorities, funds a strong ammunition demilitarization program and 
provides modest funding for Ammunition Industrial Base including the 
continuation of ARM's through the end of fiscal year 1999. It provides 
partial funding for the continuation of depleted uranium production. 
The President's budget supplies sufficient ammunition for the Army to 
conduct two major theater wars with moderate risk relying on 
substitutes. It meets defense guidance on the Industrial Base for 
replenishment and environmental concerns with moderate risk. It 
provides a small fund for continued ARMS incentives, and a continuation 
of the loan guarantee program. The budget does not provide for new 
production of any new major systems.
Civilian Drawdown
    The Army's civilian workforce of 243,000 has been reduced about 
160,000 people since the drawdown began in fiscal year 1989--a 40 
percent decrease. To shape the Army of the future, current plans are to 
further reduce manpower to about 237,000 by the end of fiscal year 1999 
and to about 218,000 in fiscal year 2003. Overall this is a reduction 
of 46 percent since fiscal year 1989. The civilian manpower reductions 
are attributed to functional transfers to agencies outside of the Army, 
force structure downsizing, base closures and consolidations, 
reengineering and efficiency studies, privatization, and funded 
workload and affordability decisions.
    We are committed to making these changes to the size and 
composition of the work force, while maintaining the capability to 
adequately support and sustain a ready force. Current congressional 
guidance is to manage the civilian work force based on funded work load 
and we support that guidance. Initiatives are underway to correct some 
problems in our manpower requirement determination process, and they 
will help us to better size our work force as well as keep down the 
costs of labor. We need continued congressional support to provide 
flexibility to manage the work force throughout the remaining phase of 
the drawdown.
Human Relations Environment
    The cornerstone of the Army's human relations philosophy is that 
every soldier is entitled to be treated with dignity and respect, 
without regard to that soldier's gender or race. The Army's commitment 
to equality is a matter of historical record in which we take great 
pride and which we are determined to uphold.
    The Army is dedicated to improving its human relations environment 
and understands the impact of the human dimension on combat readiness. 
The Army continues to work hard to reduce sexual harassment, sexual 
discrimination, and sexual misconduct. In response to incidents in the 
Fall of 1996, Army leadership directed a thorough assessment of the 
Army's human relations environment.
    Secretary West initiated two critical self-studies. First, he 
formed the Senior Review Panel, with a charter to examine the human 
relations environment Army-wide, placing emphasis on sexual harassment. 
Second, he directed the Inspector General to conduct a special 
inspection of equal opportunity and sexual misconduct policies and 
procedures at initial entry training organizations. This was an honest 
look, and we learned a great deal about ourselves.
    The Army's Human Relations Action Plan addresses the findings and 
recommendations of both reports in order to make the Army a better 
place for soldiers without weakening standards. The Action Plan 
contains ongoing actions and actions to be taken with dates for 
completion. Both the Chief of Staff and I receive periodic updates on 
the progress of the Action Plan. Commanders in the field, as well as 
senior Army leaders, have already initiated many of the needed 
corrections.
    We have begun to restore soldier's trust and confidence in the 
Army's Equal Opportunity system as a means to improving our overall 
human relations environment. The Army remains ever vigilant in its 
quest to maintain fair and equitable treatment for soldiers while being 
well aware that without this treatment, readiness ultimately suffers.
Quality of Life
    We must take care of our soldiers and their families. An ``iron 
logic'' connects quality of life, quality installations, retention, and 
readiness. To recruit and retain quality people, we must provide 
challenging careers and a quality of life comparable to the society 
they are pledged to defend. Our men and women know that they are well 
trained. They have the tools to put that training into practice. And, 
most importantly, they believe that their efforts around the world are 
making a difference. Our soldiers sacrifice greatly to serve their 
country. It is our responsibility to ensure that the Nation adequately 
recognizes that sacrifice. Fair pay and compensation, a stable 
retirement system, accessible quality health care, a predictable duty 
and service environment, and an improved military living environment 
remain top priorities. We must adequately fund community and family 
support programs and continue our progress toward meeting morale, 
welfare, and recreation funding standards. As we further integrate the 
Reserve Component (RC), integration and funding of RC quality of life 
programs becomes equally critical to overall readiness.
    Adequate compensation is a fundamental requirement for maintaining 
an all-volunteer force. This year's budget includes a request for a 3.1 
percent pay raise for our military and civilian personnel, as allowed 
by law. Quality housing is another important element of the quality of 
life for our soldiers. The fiscal year 1999 President's budget contains 
$307 million for the Whole Barracks Renewal Program. Construction of 
these new barracks will improve the living conditions of 2,316 single 
soldiers in the United States, as well as 1,278 living overseas. The 
budget also provides $68.5 million for 506 new family housing units, 
and $28.6 million to provide four Whole Neighborhood renovation 
projects containing an additional 514 units.
    Through the Capital Venture Initiative, the Army is pursuing 
privatization initiatives to increase housing availability and to 
improve housing conditions. This initiative will convey current housing 
units to private entities that will, in turn, revitalize the housing 
for our Army families. The first of these initiatives is scheduled to 
be awarded early this year at Fort Carson, Colorado. Our plan is to use 
these authorities wherever feasible and economical in the U.S. We are 
applying lessons learned from the Fort Carson project in the 
development of 26 additional family housing privatization projects.
    The Army's soldier, family, and community support programs are 
essential for an Army facing the demanding OPTEMPO and PERSTEMPO 
requirements of the current strategic environment. In fiscal year 1999, 
we have requested $388.4 million to support these customer driven 
programs that provide integrated, major educational, preventive, and 
support services that directly affect soldier readiness and foster 
self-reliance. They assist soldiers and families with transition to the 
Army, frequent relocation, deployments and other soldier absences, as 
well as life within the military community. Sports, fitness, 
recreation, library, leisure, and business programs foster mission 
readiness, offer opportunities for social interaction, support 
professional and personal development, relieve stress, and provide ways 
for deployed soldiers to fill off-duty hours. Family support, child, 
and youth programs provide options and resources to reduce the conflict 
between soldiers' personal and family responsibilities and their 
mission requirements.
                             the way ahead
The Army Vision
    Our Vision for today and tomorrow is straightforward: The world's 
best army, a full spectrum force--trained and ready for victory. A 
Total Force of quality soldiers and civilians is:
  --A values-based organization.
  --An integral part of the Joint Team.
  --Equipped with the most modern weapons and equipment the Nation can 
        provide.
  --Able to respond to our Nation's needs.
  --Changing to meet the challenges of today, tomorrow, and the 21st 
        century.
The Total Force
    Our best judgment is that the National Security Strategy and the 
National Military Strategy, with their integrated approach to Shaping 
the international environment, Responding to crises, and Preparing now 
for an uncertain future, will protect the Nation and its interests, and 
promote a peace that benefits America and all like-minded nations.
    To execute this strategy, the Army requires forces of sufficient 
size, depth, flexibility, and combat power to defend the U.S. homeland; 
maintain effective overseas presence; conduct a wide range of 
concurrent engagement activities and smaller-scale contingencies, 
including peace operations; and conduct decisive campaigns against 
adversaries in two distant, overlapping major theater wars, all in the 
face of weapons of mass destruction and other asymmetric threats.
    That force is a Total Force, an 18 division Army--a force that 
combines the unique capabilities of its Active and Reserve Components 
and its civilian employees. All elements of the Total Force must be 
appropriately resourced, organized, modernized, trained, and 
integrated.
Active Component--Reserve Component Integration
    The Guard and Reserve are important links between the Armed Forces 
and the American public. Mobilization of the Reserve Component has 
always been an important indicator of the commitment of national will. 
Guardsmen and Reservists are not only integrated into war plans, but 
also provide critical skills in carrying out contingency operations, as 
well as augmenting and supporting active units during peacetime.
    Today, the Reserve Component is fully engaged, providing critical 
support to the National Military Strategy. Every operation America's 
Army conducts today is a Total Army effort, involving Active duty 
personnel, members of the Army National Guard, and Army Reservists 
working side-by-side to accomplish the mission. We do not see this 
changing. Approximately 55 percent of the Total Army's combat arms are 
in the National Guard. Likewise, the Reserve Component contributes over 
60 percent of the Combat Support forces and over 70 percent of the 
Combat Service Support forces to the Total Force.
    The Army has and will continue to mobilize Reserve Component units 
and individuals to provide essential support during contingency 
operations. For example, we have mobilized more than 500 Reserve 
Component units and more than 15,000 soldiers in support of Operations 
Joint Endeavor and Joint Guard. More than 5,000 RC soldiers have 
augmented or backfilled staffs and units in Germany, Italy, and the 
United States by providing functional support in the following areas: 
postal, military police, movement control, logistics, aviation, 
finance, personnel administration, and maintenance. More than 7,000 
have been deployed directly to Bosnia-Herzegovina to perform a wide 
variety of missions.
    Currently, the Army is working to implement 31 separate initiatives 
that will integrate components at all levels across the entire spectrum 
of combat, combat support, and combat service support. Using a phased 
approach, we are in the process of placing two Active Component 
division headquarters; one heavy at Fort Riley and one light at Fort 
Carson, with six enhanced Separate Brigades. This approach will allow 
the Army to maintain combat capability throughout the transition to a 
fully integrated warfighting division.
    Individual integration into selected Active and Reserve units is 
also a high priority. The intent is to develop officers with cross 
component experience as a way of bridging the culture gaps between 
components. Other ongoing AC/RC initiatives include the conversion of 
Army National Guard (ARNG) divisional structure from combat to combat 
support and combat service support structure. This will significantly 
reduce the shortfall in combat support and combat service support that 
has been identified as a systemic problem.
    Additional new AC/RC initiatives include: increasing the number of 
composite (multi-component) units which have AC and RC soldiers blended 
into a cohesive unit; using ARNG Man-Portable Air Defense System teams 
to support AC Patriot battalions deploying to Southwest Asia; and 
involving ARNG rotations in support of Able Sentry in Macedonia, as 
well as the Multinational Force and Observers missions in the Sinai.
    The Secretary of the Army is the Executive Agent for implementation 
of the Nunn-Lugar II program. Emergency first responders in 120 cities 
across the United States will be trained to respond to the potential 
use of weapons of mass destruction (WMD). A new initiative in fiscal 
year 1998 is our plan to resource and employ the Guard and Reserve in 
an integrated response to domestic terrorism incidents involving WMD. 
At the request of Secretary Cohen, I formed a Tiger Team of subject 
matter experts to identify the functional model, forces, funding, and 
direction required to integrate the Guard and Reserve into WMD 
response. As a result of these efforts, DOD is requesting $49.2 million 
in the fiscal year 1999 budget to begin preparations, including: 
fielding ten Rapid Assessment and Initial Detection elements; 
conducting various interagency exercises; and other initiatives. As the 
Secretary of Defense's Executive Agent for this mission, we will 
establish a Consequence Management Program Integration Office to manage 
the effort, take the actions necessary to implement the program in 
fiscal year 1999, and plan for future program initiatives.
    The U.S. Army Reserve (USAR) is testing a program called the 
Reserve Associate Support Program (RASP) which will attach USAR 
soldiers to Active Component units upon completion of their initial 
entry training. After completing the remainder of a two-year Active 
Duty for Training tour, the USAR soldiers are then returned to their 
USAR unit. RASP will provide fully trained soldiers in critical skills 
to high-priority Active Component units and USAR Force Support Package 
units. A test of RASP will commence with 100 soldiers this year, with 
the potential to expand to 4,000 soldiers if it is successful.
    The USAR is also testing a Proof of Principle at three universities 
with Reserve Officers Training Corps battalions. This program replaces 
Active Component officers and NCO's at the battalions with qualified 
drilling reservists from USAR Troop Program Units. This initiative is 
intended to maintain effective ROTC instruction while providing 
potential personnel efficiencies to be reinvested in the Active 
Component force structure.
    These are just a sampling of the 31 initiatives currently underway 
to enhance the integration of the Total Force. The recently completed 
Quadrennial Defense Review and subsequent effort by the National 
Defense Panel have each included several recommendations to strengthen 
the Total Force. Each effort has reinforced the need for all components 
of the Total Force to work together in an atmosphere of mutual trust. 
The foundation of our approach to future operations must rely on Total 
Army solutions that make the best and most appropriate use of each 
component's individuals and organizations. We are fully committed to 
the Secretary of Defense's four principles on Total Force Integration 
to ensure that each component is properly resourced, structured, and 
utilized to best support the National Military Strategy. Those 
principles are:
  --Clearly understood responsibility for and ownership of the Total 
        Force by the senior leaders throughout the Total Force.
  --Clear and mutual understanding on the mission of each unit--Active, 
        Guard, and Reserve--in service and joint/combined operations, 
        during peace and war.
  --Commitment to provide the resources needed to accomplish assigned 
        missions.
  --Leadership by senior commanders--Active, Guard, and Reserve--to 
        ensure the readiness of the Total Force.
    While much has been done to achieve integration, much more needs to 
be done in the area of assigning relevant missions to all units. The 
Army senior leadership will work closely with the leadership of the 
Army Reserve and the Adjutants General to ensure that units are 
assigned realistic and relevant missions in support of the National 
Military Strategy.
    With your support, we have made significant progress in many areas, 
which has resulted in enhancing the capabilities of the Reserve 
Component. Over time, as the Army has increasingly called upon the 
Reserve Component for support, its share of the Army budget has 
increased. Over $21 billion has been invested in modernization, 
including cascading equipment, for Reserve Component forces in the last 
six years. Today, the Reserve Component's share of Army operations and 
support is the highest it has been since 1962.
    We are fully committed to Secretary Cohen's four principles for 
Total Force Integration. A seamless Total Army is absolutely necessary 
to meet the Nation's requirement for forces that are effective, 
efficient, and strategically relevant in today's security environment.
                                summary
    As America's Army shapes and responds to the world today and 
prepares for an uncertain future, it will confront many challenges. In 
the new century, the Army must remain actively engaged, while 
continuing to change to meet the challenges of an ambiguous world. 
Balancing readiness, modernization, and quality of life while 
continuing to meet the needs of the Nation poses the greatest challenge 
to Army leaders today.
    The Total Army is going forward together--one team of Active, 
National Guard, and Army Reserve soldiers and civilians--committed to 
the idea of one fight--an integrated joint force working in concert to 
provide for the common defense--and working together for one future--a 
secure America in a safe and prosperous world. To meet all these 
challenges, the Army must stay focused on some guiding principles that 
will serve us well today and prepare us for tomorrow.
    First, we must always keep our focus on people. Soldiers are what 
make the Army work. So, soldiers must take care of themselves, take 
care of their soldiers, and take care of their families. In return, the 
Nation must take care of her soldiers. The American Army will only be 
as good as its people. Today, America is asking a great deal from the 
Total Army team. So, Army leaders at all levels must always make 
decisions with people foremost in mind.
    Second, America's Army must always be strategically relevant to the 
needs of the Nation. It must continue to be trained and ready to fight 
and win the Nation's wars while helping to prevent conflicts, shaping 
the international environment, promoting our national interests abroad, 
and influencing democratic values around the globe.
    Third, we must modernize the Army now for the 21st century. Warfare 
in the information age requires new weapons, new doctrine, 
organization, and training. Our modernization program will focus 
investments on securing the capabilities needed to evolve today's Army 
into Army XXI and the Army After Next. We are committed to providing 
the soldier--our most precious resource--with the best chance to 
prevail quickly and with minimum casualties on the battlefields of 
today and tomorrow.
    Fourth, the Army must always be a disciplined force where men and 
women from all races, religions, and backgrounds serve together with 
dignity and respect. We must be an Army of soldiers and civilians who 
exemplify the values and character of the Nation. An Army of citizens 
who are also soldiers, but first and always Americans.
    Fifth, our Army must be a Total Force where each component--the 
Active force, Army National Guard, and Army Reserve--contributes to a 
seamless team. Our leaders must work together and trust each other and 
seek to understand the strengths that each component provides the 
Nation. Together, we must tirelessly work to leverage the capabilities 
of all the components into one Total Force for America.
    Sixth, our Army must be a full partner in the Nation's joint 
military force. A combined team where each service provides 
complementary capabilities in support of the National Military 
Strategy.
    As the Acting Secretary of the Army, I assure you that the Army 
senior leadership is committed to following these principles as we lead 
the Army into the 21st century. Leadership, of course, is the key to 
achieving our goals. Our leaders must, and will, lead. We will take 
care of people, ensuring that their needs are met. We will embrace and 
promote innovation while continuing to maintain the warrior ethic and 
the culture and traditions of our Army.
    Training will become even more important as we transition to 
Information Age warfare and deal with the threats, challenges, and 
uncertainties of an increasingly ambiguous world. We must continue to 
train to standard, concentrating on warfighting skills, while preparing 
soldiers and units for operations across the spectrum of conflict.
    Managing the Army's budget is another key to achieving our goals. 
While the fiscal year 1999 budget is sound, we must continue to balance 
our resources to meet today's challenges while preparing for 
tomorrow's. The Nation demands that we be good stewards of the limited 
resources we are provided. We are committed to carefully determining 
requirements and reengineering our organizations and processes to 
achieve the savings necessary to finance future needs. As Secretary 
Cohen has said, a revolution in business affairs is necessary and will 
lead to a more efficient Army, focused on our core military 
competencies, and operating with reduced overhead and support costs.
    The Army has made every effort to be as efficient and as effective 
as possible. We have programmed $10.5 billion in efficiencies over the 
Future Years Defense Program, with $1.3 billion of that programmed in 
fiscal year 1999. This approach assumes a degree of risk, which we will 
carefully manage.
                               conclusion
    Strategically relevant and cost effective at less than 25 percent 
of the Department of Defense budget, the Army is America's force of 
decision. The fiscal year 1999 budget reflects the Army's commitment to 
our Nation. Our soldiers are proud to carry out that commitment, which 
began even before we were a Nation and has led America to a position as 
the dominant leader of the community of nations. As an Army, we thank 
this committee for your support in the past and look to you for 
continued wisdom, guidance, and support as we fulfill our commitment to 
the Nation. With America's sons and daughters always at the forefront 
of our efforts, I am confident that we will make the decisions today 
that will enable continued success tomorrow.

    Senator Stevens. Thank you very much, Mr. Secretary.
    General Reimer.

                   STATEMENT OF GEN. DENNIS J. REIMER

    General Reimer. Mr. Chairman, distinguished members of the 
committee, I am delighted to be here and appear before this 
committee. I have a prepared statement which I would ask be 
included for the record, and I would just like to make a few 
remarks.
    First of all, I am delighted to be able to represent all 
the soldiers, the active and Reserve component soldiers, in the 
U.S. Army, and on behalf of them, I say thank you for your 
efforts in getting the supplemental for us in 1998. That has 
made a big difference. You have led the charge in this 
particular area, and I am deeply appreciative, as are they.
    I would like to talk a little bit about the 1999 budget and 
put it in perspective of the overall Army plan. If you go back 
to 1991 to 1997, that was a drawdown period for the Army. We 
took out over 600,000 people, active and Reserve component 
soldiers and Army civilians, and we closed over 700 bases 
worldwide, and in doing that, we carried a risk in future 
readiness. We used the modernization account to help take care 
of our people. That was the right thing to do, and we knew that 
at the end of that drawdown period we had to move more money 
into the modernization account.
    The 1998 budget, which you have appropriated and is out in 
the field now, reflects the transition year, and the 1999 
budget, which we have submitted to you, continues that change. 
It continues the change that Senator Inouye talked about, a 
very fundamental change to the U.S. Army, but at the same time, 
it allows us to keep units trained and ready.
    I want to talk a little bit about the specifics of that 
particular budget. That budget increases the investment account 
from 21 percent in 1998 to 22 percent. It keeps our major 
programs, the Comanche and the Crusader, on track. Those are 
really the only new programs that we have. It keeps the effort 
in digitization, which leads us to a new organization, on 
track, and so it really reflects what I was talking about in 
terms of modernizing for the future. It retains a balance 
between near and future readiness.
    I have been involved with the Army budget process--as 
either the Vice Chief of Staff, the Forces Command Commander, 
or now, as the Chief of Staff--since 1991. This is the most 
finely balanced budget that we have submitted. It really 
reflects our efforts to move money from current readiness to 
future readiness, and that is pretty difficult when you are 
facing 15 years of declining buying power.
    There is no magic about it. We have relied heavily on 
efficiencies, and we have taken some force structure end 
strength cuts in order to do that. That is the only way we had 
of making sure that we brought the modernization account up and 
allowing us to address that window of vulnerability that we 
think we will experience in the 21st century if we do not do 
that.
    This budget, I think, also reflects the Total Army 
perspective. Fifty-four percent of the U.S. Army is in the 
Reserve component. The percentage of total obligation authority 
[TOA] going to the Reserve component in 1999 is 3 percent 
higher than it was in 1989 as a percentage of Army TOA.
    Now, I would also tell you that it is higher than what you 
appropriated in 1998. We did the best we could, but at the same 
time the Reserve components will tell you that they have 962 
million dollars' worth of unfunded requirements, and that is 
true, but again, as I said, it is a very finely balanced 
budget.
    The budget allows us to continue the momentum of change. We 
have programmed a digitized division by 2000. That is the 
division at Fort Hood that has gone through the advanced war-
fighting experiment. That is on track. That will lead to a new 
corps by 2004.
    The Army after next wargame that we conduct at Carlisle 
each year has become more robust, and it helped drive science 
technology investment, our research, development, and 
acquisition [RDA] program, and I think it is really doing what 
we wanted it to do.
    While the Army will fundamentally change from the cold war 
Army in the 1980's to a different type of Army in the 21st 
century, one thing that will not change are those quality 
soldiers we have. We owe them a predictable and adequate 
quality of life, and that is what we have asked in this 
particular budget.
    We emphasize four things which have been our priorities 
from the very start: adequate pay for them, adequate medical 
benefits, decent housing, and a retirement and benefits system 
that is solid and does not keep getting eroded over time.

                           prepared statement

    And on their behalf, let me say thank you for your 
support--your support that you show with your appropriations 
and also your support with your visits. I know members of this 
committee who traveled through six different countries in 4 or 
5 days, and you visited our soldiers, and I can just tell you 
that means an awful lot to them.
    So I thank you, Mr. Chairman and the members of the 
committee, for your support. I look forward to your questions.
    [The statement follows:]
              Prepared Statement of Gen. Dennis J. Reimer
    Mr. Chairman and members of the Committee. Thank you for this 
opportunity to speak to you about America's Army and the magnificent 
soldiers who proudly serve our Nation.
                           path to the future
    The best way to understand the state of today's Army is to envision 
our path to the future. This path is marked by signposts corresponding 
to the three pillars of our national military strategy: respond, shape, 
and prepare. To be ready to ``respond,'' we focus on ensuring near-term 
readiness so that our forces are ready to react to requirements 
worldwide. We also ``shape'' the global environment, increasing 
international understanding and cooperation, diminishing threats, and 
securing America's place in a free and prosperous world. Finally, we 
``prepare'' for the future, transforming the Army so that our soldiers 
will be ready for the national security tasks the Nation will face in 
the next century. In my testimony, I will address our progress in each 
of these areas. The assessment I offer today is cautiously optimistic. 
I am convinced today's Army is trained and ready. I am equally 
optimistic about the course we have laid out for the future. However, 
we do not live in a risk-free environment and in order to balance all 
the pillars of the National Military Strategy we have to take risks. I 
believe these risks to be prudent. With continued congressional 
support, I am confident that when America's soldiers are needed, they 
will always be there.
                            a starting point
    Every path has a beginning. The Army's path to success starts with 
the support of the American people represented by your concern and 
commitment. I want to personally thank you for your continued support 
to the American soldier. Coincidentally, exactly 200 years ago we faced 
a series of difficult decisions not too unlike those we see today. Our 
new republic was in an era of transition, facing a future filled with 
ambiguity, potential problems, and unprecedented opportunities. The 
Spring of 1798 saw new and unexpected threats. President John Adams 
could not see the future, but he knew that Americans lived in a 
dangerous world, and he understood well the cost of unpreparedness. The 
President turned to Congress for support in strengthening the armed 
forces, and congressional leaders responded to the call. They 
reestablished the United States Marine Corps under the newly created 
Navy Department, added companies to the Army's regular regiments, and 
enhanced the federal government's ability to call on the militia to 
supplement national defense. These were difficult decisions made for 
the common good, putting the needs of the new nation above regional 
issues and a thousand other concerns. Two centuries later, our nation's 
leaders are no less vigilant. Our country has a remarkable history, a 
powerful legacy of commitment to the common defense. Many of you have 
recently traveled around the world, meeting, talking, and listening to 
America's soldiers. They were deeply appreciative of your concern and 
interest. On behalf of all of them--men and women of the Active force, 
the Army National Guard, and the United States Army Reserve--I want to 
offer you their sincere appreciation and thanks.
                            a turning point
    There is no question that since the end of the Cold War, the Army 
has undergone an unprecedented transition. Today, we are at the turning 
point in creating a very different army. We have become a globally 
engaged force, handling a broad range of military missions. The need 
for land power during peacetime is greater than ever. The Army has 
participated in 28 of the 32 major post-Cold War deployments by U.S. 
forces, providing over 60 percent of the personnel involved in those 
operations. In 1997, on average, the Army deployed about 31,000 Active, 
Reserve and National Guard soldiers away from their home stations and 
families, spread across 70 countries around the world. Backing them up 
were approximately another 62,000 men and women preparing to deploy, 
deploying, or recovering from operations. During the year, a 
significant portion of the Army's soldiers were on the move, supporting 
active operational commitments, while others were training and 
preparing for the full spectrum of military operations, from 
conventional combat to teaching chemical and biological detection and 
defense to civilian agencies. The requirements of America's post-Cold 
War defense have made the U.S. Army busier than ever.
    All of the activity of the past few years has taken place in 
conjunction with one of the most significant force reductions in our 
Nation's history. We have taken more than 630,000 active and reserve 
component soldiers and civilian employees out of the force. We have 
closed over 700 bases. In Europe, for example, we reduced the force 
from over 215,000 soldiers to about 65,000. The total drawdown in 
Europe would be equivalent to closing 12 major installations in the 
United States. While these reductions took place, the number of Army 
deployments has increased by more than 300 percent. Despite the 
magnitude of our efforts and the everyday pressures and stresses on the 
force, our soldiers continue to perform magnificently. They have the 
willingness to take prudent risk, the boldness to seize the initiative, 
and the professionalism to do their absolute best--trademarks of the 
American Army for 223 years.
    As you do, I recognize that the service of our soldiers has not 
come without cost. We are not perfect. Many are concerned whether the 
Army can maintain the tremendous progress we have made since the end of 
the Cold War. Some worry that a ``zero defects'' mentality might 
resurrect itself and that opportunities for assignments and promotion 
will diminish. Others fear a return to what some refer to as ``the 
hollow army,'' where requirements far outstripped resources. Some are 
concerned that the high pace of operations will detract from training 
to the point that units will lose their warfighting edge. These 
concerns are understandable and bear watching because they highlight an 
important constant that we can never compromise--at its core, the Army 
is about taking care of people--because they are and always will be our 
greatest asset. In my remarks, I will address what we are doing and 
what needs to be done to ensure our soldiers are prepared to go in 
harm's way today and at every point along the path to the future.
     responding to our nation's needs--ensuring readiness through 
             recruiting, retention, and realistic training
    Responding to the needs of Americans at home and abroad has always 
been a tenet of our military strategy and the Army's time-honored task. 
Every American who has watched an Army National Guard truck deliver a 
load of sand bags to help shore-up a levy holding back a raging flood, 
or an Army convoy plow through an ice storm to deliver lifesaving 
supplies, understands what we mean by the ``respond'' pillar of the 
national military strategy. In like manner, people across the earth--
from a Korean War veteran in Yongsan to an impressionable young 
Hungarian meeting his first American at the Army headquarters in 
Kaposvar--have experienced first hand the meaning of the presence of 
U.S. ground forces and America's resolve in responding to crisis 
worldwide.
Recruiting
    Supporting the ``respond'' pillar of the national military strategy 
requires above all else, a trained and ready force. Meeting this 
responsibility starts with recruiting high quality soldiers. The Army 
continues to enjoy success in attracting and retaining high quality 
recruits, but enticing young people to serve, in the numbers that we 
need, is becoming increasingly difficult. As you know, history shows 
that the difficulty of recruiting increases as the jobless rate 
declines, and unemployment figures have been at their lowest point in a 
decade. Nevertheless, the Army is blessed with an outstanding corps of 
professional recruiters who have done a tremendous job of bringing 
young men and women into the force. We fully expect to accomplish our 
recruiting mission this year. The importance of this mission continues 
to increase as the drawdown concludes and we begin to replace losses on 
a one-for-one basis. The Army's recruiting effort in the next few years 
is crucial to maintaining readiness. In particular, we have placed 
increased emphasis on recruiting in critical combat military 
occupational specialties. This should give commanders confidence that 
they will continue to have high quality soldiers, in sufficient 
numbers, to fill their ranks.
    Every soldier who joins the Army is an important and a valued 
member of the team. As you know, in the recent Secretary of the Army's 
Senior Review Panel Report and the Report of the Inspector General, the 
Army took a hard look at what needs to be done to ensure each recruit 
is treated with proper dignity and respect. This work resulted in the 
Army's Human Relations Action Plan. The plan fully recognizes that 
initial entry training (IET) is a critical step in the 
``soldierization'' process, and we are aggressively implementing the 
recommendations of both reports. We are expanding Basic Combat Training 
(BCT) by a week to ensure every recruit is thoroughly grounded in Army 
values, teamwork, and discipline. The changes we are making in the 
training base are not about lowering standards. In fact, we are working 
to make IET even more challenging and physically demanding, ensuring we 
produce highly motivated, confident young men and women graduates.
    At the direction of the Secretary of Defense, we have reviewed the 
report by the Federal Advisory Committee on Gender-Integrated Training 
and Related Issues (the Kassebaum-Baker Report). Many of the committee 
report's findings mirror the conclusions in the Secretary of the Army's 
Senior Review Panel and the Report of the Inspector General. These 
concerns are being addressed by the initiatives outlined in the Army's 
Human Relations Action Plan. The committee also makes additional 
recommendations that we carefully considered. I can assure you my 
response to the Secretary of Defense focused on three objectives: (1) 
enforcing the highest standards in discipline and training; (2) 
ensuring every soldier lives and trains in a safe and secure 
environment where they are treated with dignity and respect; and (3) 
building the cohesion, confidence, and teamwork that will prepare 
soldiers for success in their units. We are committed to following an 
approach to training that will provide the most efficient and effective 
military force, while realizing the full potential of the young 
Americans who serve our country.
Retention
    Ensuring the Army's near-term readiness and America's ability to 
respond to any crisis worldwide also requires retaining the world's 
best soldiers. The increased frequency of deployments combined with 
concerns over inadequate pay for our enlisted personnel, benefits, 
health care, and retirement have the potential to increase uncertainty 
and adversely affect retention. I think the very high reenlistment 
rates among units that have conducted the most frequent operational 
deployments under harsh and dangerous conditions say a lot about the 
professionalism of American soldiers. Our men and women know that they 
are well trained. They have the tools to put that training into 
practice. Most important, they believe their effort and sacrifice is 
making a difference, saving lives, protecting property, and 
contributing to freedom and prosperity in places where these words had 
no meaning until an American soldier stood behind them. Our soldiers 
sacrifice a great deal to serve their country. It is our obligation to 
provide them and their families with fair and adequate pay, quality 
medical care, safe and affordable housing, and stable retirement 
benefits. Maintaining a high quality of life for both married and 
single soldiers remains a top priority for the Army.
Realistic Training
    Near-term readiness is also about providing realistic and relevant 
training. The Army's senior leadership has an obligation to give 
leaders and soldiers a reasonable expectation that they'll have the 
time and resources they need to train. ``Slowing down the train'' is an 
important part of this effort. More training is not always better 
training. I do not think we can do more with less--but we must get more 
out of what we have got. Fewer and higher quality training events are 
more important than ensuring every moment on the training schedule is 
chock full of activity. For starters, as you know the Joint Chiefs of 
Staff have committed to reducing joint training and exercise 
requirements by 25 percent. This reduction is designed to eliminate the 
least effective training events and should help to reduce the burden on 
commanders who, all too frequently, meet themselves coming and going, 
racing from one training exercise to the next.
    We are also fine-tuning the Army's training programs. In the coming 
year we will relook how we train at the Combat Training Centers 
(CTC's). The CTC's remain the ``crown jewels'' of our training system, 
and we need to begin to look at expanding their role in training for 
the asymmetrical threats we anticipate our soldiers will face in the 
years ahead. This training will not dilute or detract from our 
warfighting focus, but it will place additional emphasis on emerging 
threats, such as urban combat, the proliferation of weapons of mass 
destruction, and the greater intermingling of combatants and 
noncombatants on the battlefield. The sophistication of the CTC's has 
increased by ``an order of magnitude'' since the end of the Cold War, 
but continues to be focused on tough, realistic high intensity combat. 
Our efforts at the CTC's will be paired with an increased, more cost 
effective and balanced use of live training, distance learning and 
simulations at home station. We have made tremendous gains in learning 
how to mix new training technologies with traditional field training. 
As a result of this effort, I think we will be adequately positioned to 
provide a support base for realistic, relevant training in the years 
ahead.
    Realistic, relevant training remains the glue holding the force 
together. If I have one concern, it is that commanders at major 
commands and installations who face tighter budgets and diminished 
resources have fewer and fewer options in managing the assets at their 
command. We need to empower these creative, innovative, and highly 
competent leaders. In that light, we are looking at programmatic 
solutions and the potential of proposing revisions to legislation to 
provide commanders some relief and flexibility in how they structure 
and support their missions. I ask for your consideration and support 
with these efforts.
    Responding to the diverse and often unforeseen mission requirements 
of the post-Cold War world requires disciplined, well-trained and ready 
forces. I believe the steps I have outlined here will ensure that we 
will continue to have those forces as we walk the path to the future.
    shaping the international environment--with total army solutions
    In recent years, the Army's shaping responsibilities have become 
the most demanding aspect of our mission. The Army has truly become 
America's premier shaping force--from our forward-presence forces in 
Korea and Europe; to stability operations in Bosnia, the former 
Yugoslav Republic of Macedonia, Haiti, Ecuador, Peru and the Sinai; to 
international programs, such as the Partnership for Peace exercises and 
military-to-military contacts with friends and allies around the world. 
In addition, visits with my counterparts in Asia, South America, and 
Central Europe lead me to believe strongly that there is more the Army 
could and should do, particularly as part of an interagency approach, 
to promote regional stability, provide strategic early warning of 
global change, and mitigate threats before they become acute. The 
Army's utility in the post-Cold War world is vast, and we are being 
increasingly called upon to work with the other instruments of national 
power to help shape the international environment.
    Managing the high operational and personnel tempo required to 
sustain our efforts represents one of the most significant challenges 
we will face in the year ahead. Ongoing stability operations in Bosnia 
are a case in point. Recognizing the need for an extended commitment in 
this region, we are now looking at ways to avoid consecutive tours. Our 
soldiers remain committed to the mission and are proud of the fact that 
they have saved thousands of lives and mitigated human suffering 
thorough their efforts. We are, however, beginning to see soldiers 
conducting ``back to back'' deployments. To lessen the burden of high 
tempo operations, we must develop new, creative operational and 
personnel policies specifically tailored to recognize the reality of 
conducting business in the post-Cold War world.
    The foundation of our approach to future operations must rely on 
Total Army solutions that make the best and most appropriate use of a 
mix of active, United States Army Reserve, and Army National Guard 
soldiers. As you know, 54 percent of the Army's force structure is in 
the Guard and Reserve. Recent experience clearly demonstrates that any 
significant deployment requires a robust mix of component capabilities. 
About one-quarter of our force in Bosnia, for example, consists of 
soldiers from the Army National Guard and United States Army Reserve, 
while other soldiers from the reserve components have deployed to 
Europe to ``backfill'' active duty soldiers serving in the 
Stabilization Force. Providing sustained support to shaping activities 
across the globe, while continuing to meet the requirements of the 
other two pillars of the national military strategy, requires Total 
Army solutions.
    We are using the four principles outlined by the Secretary of 
Defense in his recent letter on Total Force Integration to focus our 
efforts on ensuring that each component is properly resourced, 
structured, and assigned missions to support our Nation's strategy. Let 
me briefly outline here the principles and some of the key initiatives 
we have undertaken.
    The first principle highlights responsibility. We recognize that 
responsibility for the Total Army can only be taken through energetic 
leadership and effective communications. The Army has moved to improve 
communications. Our Reserve Component Chiefs presented their budget 
issues personally to the Defense Resources Board during the fiscal year 
1999 budget preparation process. They are more frequently and routinely 
in my office and others to ensure there are no filters. I have had 
several meetings in small groups of state Adjutant Generals. The 
Secretary of the Army has established an Army Forum on Integration of 
the Reserve and Active Components to ensure Army leadership involvement 
in Total Army integration issues. The Secretary has placed renewed 
emphasis on our Army Reserve Forces Policy Committee, composed of 
Active, Guard, and Reserve general officers. The Vice Chief of Staff 
has reenergized the Reserve Component Coordination Council to address 
tough policy and resourcing issues.
    The second principle outlined by the Secretary of Defense relates 
to the relevance of missions. This principle recognizes the importance 
of establishing clear and mutually understood missions for each unit. 
We believe missioning all units is essential because it establishes the 
purpose and relevancy of the force. Currently, the Army is converting 
up to 12 combat brigades of Army National Guard structure to meet the 
combat support and combat service support requirements identified in 
the National Military Strategy. There is, however, much more work to be 
done in the area of assigning relevant missions. Currently, there are 
eight Army National Guard combat divisions and three separate brigades 
that have no defined operational mission in the Defense Planning 
Guidance. Nevertheless, the Army needs these forces to help meet its 
worldwide commitments for shaping the conditions that will enhance 
America's global interests and responding to the threats that endanger 
our peace and security. Our task is to define the role of these forces 
and embed their missions clearly in the defense planning guidance. An 
implied task is to gain consensus in the Department of Defense and with 
Congress that recognizes the need to resource these missions.
    One option for enhancing the utility of Reserve Component forces 
might be to create ``dual-capable'' units that have the potential to 
perform traditional combat missions but can also meet a range of 
requirements. In this area, we are looking at a number of innovative 
concepts. These concepts range from forming multi-component units that 
could augment or replace other forces, to giving new missions to the 
reserve components that they could assume within their existing force 
structure. One of the most important areas for potential ``collateral'' 
missions is the area of homeland defense. These missions could include 
responsibilities for National Missile Defense, protection of critical 
infrastructure, and response to domestic emergencies, including the 
threats of terrorism and weapons of mass destruction. Another potential 
area of emerging requirements is earmarking commands as ``bridging 
forces'' for working with our friends and allies around the world. 
These forces would serve as important links to facilitate combined and 
multinational operations. They could form habitual training 
relationships with allied nations. Training would put special emphasis 
on the linguistic and liaison capabilities that facilitate 
multinational operations.
    The Army senior leaders must work closely with the Army Reserve 
leadership, the National Guard Bureau, and the Adjutant Generals to 
explore these new requirements and initiatives, realistically defining 
what can and should be done. Our objective must be to get the greatest 
utility out of every element of the force. At the same time, our goal 
should be to add predictability and stability to the force. Rapid and 
unplanned force structure changes place additional stresses on the 
force, complicating not only resourcing decisions, but long-term 
professional development of officers and soldiers. Where possible, we 
must make smart decisions that minimize turmoil while providing the 
most effective and responsive force possible. This is an achievable 
goal, but only if we make a concerted effort to complete the missioning 
process.
    The Secretary's third principle recognizes the importance of 
training, maintaining, and modernizing all the components of the force. 
In the last few years, the Army, with congressional support, has made 
significant progress in creating an integrated approach to enhancing 
the capabilities of the Army National Guard and the United States Army 
Reserve. New initiatives continue to be developed. The Reserve 
Associate Support Program, for example, will provide enhanced training 
for United States Army Reserve soldiers and enhanced readiness for 
Reserve combat support and combat service support units. After 
individual entry training, soldiers are attached to an Active Army 
combat support or combat service support unit for 24 months of active 
duty. These soldiers then return to their United States Army Reserve 
unit experienced and fully trained. The Army has approved a pilot 
program to test the feasibility of the concept. Another significant 
initiative is the development of the Integrated Division. Over the next 
year, the Army will create two integrated divisions, placing three 
Enhanced Separate Brigades under a headquarters commanded by an active 
duty major general. Upon mobilization, the brigades would deploy as 
separate forces while the headquarters serves as a center for training 
follow-on forces.
    The Secretary's fourth principle emphasizes that Total Force 
integration programs must culminate with a commitment to resource 
forces adequately to accomplish their assigned missions. Despite the 
Army's declining share of the Department of Defense budget, the Reserve 
Component's share of the Army budget has risen commensurately with 
their increased use. The Reserve Component's share as a percentage of 
the Army's budget is the highest it has been since 1962. In addition, 
over the last six years the Army has invested an unprecedented $21.5 
billion in modernizing Reserve Component forces, including cascading 
equipment. In the future, more can be done to ensure the efficient and 
appropriate distribution of resources. For example, we are expanding 
Reserve Component participation in Total Army Analysis (TAA) process, 
using their expertise to help validate Army warfighting requirements 
and allocate resources within the Army's budget.
    We have also reviewed the successful integration of both the Air 
Force and the United States Marine Corps. We think there are 
opportunities for the Army to use the underlying principles of these 
models. Using them, we are currently refining concepts that provide for 
even greater integration of the Active, National Guard and Reserve 
soldiers with emphasis on rounding out units up to the company level. 
At that level, soldiers and leaders focus on a single system and the 
challenges of integration are the most manageable.
    We are fully committed to managing the Total Army in accordance 
with the Secretary of Defense's four principles for force integration. 
We believe that the result will be Total Army solutions that allow the 
U.S. Army to conduct prolonged, responsive shaping operations today, 
tomorrow, and into the next century.
   preparing for the challenges ahead--experimenting with the force, 
         readying the leaders, reengineering the infrastructure
    As you know, the Army has been preparing for the future through our 
Force XXI process. The process is designed to spearhead the development 
of Army XXI, a product-improved force that will see the Army into the 
next century. Army XXI is primarily concerned with enhancing our 
current systems with information age technology. In addition, Force XXI 
is directing our explorations into the Army After Next (AAN). AAN is a 
future force designed specifically to meet the national security 
requirements of the 21st century. It will most probably include 
organizations and systems which do not yet exist. The objective of 
Force XXI is to synchronize modern equipment, quality people, doctrine, 
force mix, training, and leader and soldier development--the six Army 
imperatives--ensuring that the United States Army can conduct a variety 
of missions in diverse environments, from today until well into the 
next century.
    The centerpiece of the Force XXI process has been a series of 
Advanced Warfighting Experiments (AWE's) designed to test new systems 
and operational concepts. In the last year, we conducted two pivotal 
experiments: the Task Force XXI AWE at the National Training Center, 
Fort Irwin, California, and the Division AWE at Fort Hood, Texas. These 
experiments have provided a range of insights into future force design. 
In particular, they validated the importance of ``spiral development,'' 
synchronizing the evolution of new systems with organizational, 
training, leader, soldier, and doctrinal developments. The experiments 
also reaffirmed the importance of situational awareness and information 
dominance provided by new technologies. As a result of the AWE's, I am 
convinced more than ever that developing and fielding digitized 
divisions and a digitized corps is both feasible and absolutely 
essential for providing the competent, capable forces we will need in 
the future. But, the AWE's are more than just technology. They are 
about spearheading the cultural and institutional change that will 
prepare the force mentally for the challenges of the next century.
    Through the lessons learned from Task Force XXI and Division AWE 
experimentation and wargaming, we will develop the insights we need in 
order to make the programmatic decisions to carry us through the year 
2005 timeframe. This year we will invest considerable effort in fine 
tuning our modernization programs for the decade ahead. In particular, 
we must make sure we have in place the backbone of systems we need to 
conduct information based operations. We must also focus our Research 
and Development efforts and pinpoint potential AAN capabilities that 
can be brought forward and developed now. We cannot yet clearly define 
the timeline for fielding an AAN force, but it is time to think about 
taking AAN initiatives out of the theoretical stage and begin looking 
at potential applications. In particular, future experimentation will 
focus on the capabilities of light forces and increased joint 
experimentation. We continue to work closely with the United States 
Marine Corps on the development of land warfare. Recently, the Air 
Force and the Army have agreed to begin planning on a cooperative 
warfighting experiment, which I hope will serve as the precursor for a 
truly joint experimentation program that will inform and energize a 
fully integrated joint modernization process.
    In addition to the tremendous progress we have made in 
experimentation, this year marks a significant development in our Force 
XXI leader development programs. The Officer Personnel Management 
System (OPMS) XXI and the new Officer Efficiency Report (OER) are 
important components of our future-oriented programs. Though these are 
officer programs, they are intended as a start point for 
institutionalizing leader programs for the 21st century across the 
Army. OPMS XXI restructures how active duty officers will be managed, 
developed, and promoted over a career of service. The changes it 
introduces are significant. The new system will not only open new 
opportunities for advancement, command and education, but will better 
serve the Army's demanding and diverse needs for officer leadership in 
the 21st century. We developed OPMS XXI hand-in-hand with the revision 
of the OER system. The new report places special emphasis on ethical 
attributes and the ability to share and instill those qualities in 
subordinates. These initiatives, in conjunction with our other Force 
XXI efforts, are important steps in growing the soldiers and leaders of 
the next century.
    While we continue our Force XXI process, we are reviewing the 
findings of the recently completed work of the National Defense Panel 
(NDP). The panel's report has far reaching implications that deserve to 
be discussed and considered. On the whole, I find the report's findings 
as a vote of confidence for the path we are on and see nothing that 
leads me to believe we should significantly alter our path. We must 
take a prudent course; each pillar in our national strategy carries 
great importance. We would be ill-advised to assume undue risk in one 
area for the sake of speeding developments in another. A balanced 
approach to the future--responding to and deterring threats when they 
present themselves, shaping the strategic environment to mitigate 
potential sources of instability before they become acute, and 
preparing in a disciplined, deliberate manner for the challenges we 
know we will face ahead--remains our best hope for ensuring Americans 
peace and prosperity from today to tomorrow.
    One finding of the NDP report with which I fully agree is the 
recommendation to eliminate excess infrastructure. I fully recognize 
that this is a contentious and controversial issue. Yet, I believe it 
is one that we as a Nation must address. As you know, the Army has made 
every effort to be as efficient and effective as possible. The Army has 
programmed approximately $10.5 billion in efficiencies over the Future 
Years Defense Program (FYDP). While we have assumed a degree of risk 
through the aggressive pursuit of efficiencies, we believe the risk is 
known, balanced, and manageable. I am concerned, however, that these 
efficiencies alone will not be enough to balance readiness and 
modernization in the out years. Reducing excess infrastructure and 
increasing our flexibility in directing resources and management reform 
is the surest, most efficient means for improving the value of 
America's investment in defense.
           the strategic balance--requirements and resources
    The Army is not only an invaluable strategic force, it is also cost 
effective, accounting for less than 25 percent of the Department of 
Defense budget. We are justifiably proud of the return we provide for 
the American citizen's investment. Yet as I testified last year, we 
remain a force under stress. The greatest potential threat to Army 
readiness is the medium- and long-term impact of an increased 
operational pace and insufficient modernization funding. By failing to 
modernize and update our equipment, we put tomorrow's soldiers at risk. 
I cannot overestimate the risk we take by failing to modernize. The 
continued threat of weapons proliferation can allow even no-tech 
nations to field high-tech armies in the flash of an arms deal. Though 
no nation may be capable of fielding a force that can compete with the 
United States in a conventional war, any nation can develop a ``niche'' 
capability that will cost American lives in a future conflict. At the 
same time, sacrificing force structure and undercutting quality of life 
programs are equally unacceptable. Our requirement for ground forces to 
shape and respond will not diminish. In fact, the changing 
international environment will probably increase the requirement for 
the sustained forward presence of our forces and enhanced power 
projection capabilities. Any option other than maintaining the balance 
between current readiness and prudent modernization places our ability 
to effectively implement the national military strategy at undue risk.
    As you are aware, as requirements for shaping and responding have 
expanded in the post-Cold War years, the Army has relied on 
modernization accounts as the primary bill payer. In fiscal year 1998, 
Army procurement reached its lowest level since 1960. Quadrennial 
Defense Review personnel reductions, savings from better business 
practices, and congressional supplemental appropriations have off-set 
somewhat the drain on Army modernization, but these initiatives alone 
are not sufficient to mitigate the risk that the Army will be 
unprepared for the national security challenges of the future. The 
proposed fiscal year 1999 Army budget only begins to bring our 
requirements back into balance. The fiscal year 1999 President's Budget 
for the Army totals $64.3 billion. While this is a $3.3 billion 
increase over the fiscal year 1998 budget, it follows 13 years of 
decline (except for Desert Storm) in real terms and reflects the 
continued decrease in the Army's percentage of the Department of 
Defense's budget from 27 percent in fiscal year 1989 to 24.9 percent 
fiscal year 1999. Implementing the budget requires the Army to assume 
risk in certain areas and make tough choices to balance requirements 
and resources.
          one team, one fight, one future--america's soldiers
    Balancing priorities is never an easy task. Our first congressional 
leaders learned that lesson well 200 years ago, and very little has 
changed. There are no easy answers, no silver bullets, no magic 
solutions. Inside the Army, we have done our best to provide the right 
balance among readiness, endstrength, modernization, and quality of 
life. We are one team, United States Army Active, Reserve and National 
Guard. We believe in one fight conducted by an integrated joint combat 
force in concert with other federal agencies--providing for the common 
defense. We are working for one future: a better, more secure place for 
America in a safer and more prosperous world. At the heart of this 
commitment are American soldiers, prepared and ready to serve whenever 
and wherever our nation calls. Supported by these exceptional men and 
women, we can and will face the tough choices ahead and make the right 
decisions to safely travel down the path to the years ahead.
    [Clerk's Note.--The U.S. Army Posture Statement, Fiscal Year 1999 
can be found on the Department's website at http://www.army.mil.]

                         Reprogramming request

    Senator Stevens. Thank you very much, General.
    Mr. Secretary, what is this reprogramming you are going to 
give us? Is this for 1998?
    Mr. Walker. Yes, sir; we have a reprogramming request 
pending in the Office of the Secretary of Defense [OSD] which 
is undergoing OSD review now to ensure readiness funding for 
our divisions for the rest of the year. In fact, all the 
services will be having an omnibus reprogramming presented 
sometime later in June.
    Senator Stevens. I thought we did that in the supplemental.
    Mr. Walker. That only took care of the Bosnia-related cost.
    Senator Stevens. All right. I think we all hear you in 
terms of this request. We have a $1.9 billion request for 1999 
on an emergency basis. It is very clear that that cannot be 
approved by the House and I am not sure it will be approved 
over here in terms of being offbudget, so that is going to 
exacerbate our problem, and Mr. Cortese and I are just thinking 
about some of the things we might do to try and deal with that 
issue. That is as I understand it about an 80-percent outlay, 
very difficult to handle, to bring that back onbudget.
    Mr. Walker. Mr. Chairman, of that $1.9 billion, the Army 
share of that is approximately $1.4 billion. We cannot absorb 
that kind of cost in 1999.
    To put it into perspective, that is well over one-half of 
the ground OPTEMPO training cost for the Army during the fiscal 
year. It would be impossible to absorb, so I do not know how we 
can pay for it any other way.
    Senator Stevens. When we get this bill to the floor it 
faces some amendments that will require a mandatory phasedown 
in deployment, and I am sure when it gets to the House it will 
face an even more difficult problem in terms of cutting off 
funds for being in Bosnia altogether. It is a difficult thing 
to cross the bridge and make it an emergency after 4 years.
    I really do not know how we can deal with that, except we 
will try to be as--I think the best thing is innovative as 
possible in terms of trying to look at the outlays and to see 
if there are other items in the bill that would be truly 
considered an emergency that we might shift emergency 
designation there.
    I want to confer with you on that.
    Mr. Walker. Thank you.
    Senator Stevens. Let me ask you----
    Mr. Walker. Senator, may I assure you that it will be an 
emergency for the Army come October 1.
    Senator Stevens. It will be an emergency if you have to 
take the money out of other accounts, that is true.
    Mr. Walker. Yes, sir.
    Senator Stevens. However, you know, we got that in March, 
for September being an emergency. It is a tough row to hoe.

                           Year 2000 problem

    Where do you stand in terms of the Army on that, what we 
call a year 2000 problem? It would seem to me that is a 
difficult thing too. We are having a hearing here when we get 
back and we have just allocated $2.25 billion to our special 
committee, and that is on an emergency basis now. Are you 
affected by that, and what can we look forward to? That has to 
be dealt with before December 31, 1999.
    Mr. Walker. Yes, sir; we have estimated through the year 
2000 over $330 million that we will be spending to deal with 
the year 2000 problem. It is a serious problem, and we have got 
to deal with it. Particularly, we have to make sure that our 
critical systems are taken care of. This is something that is 
carefully watched in the Army. Both General Reimer and I meet 
with Lieutenant General Campbell, our Director of Information 
Systems for Command, Control, Communications and Computers, on 
a regular basis on this issue, and it is carefully monitored at 
the Department of Defense. There is a great expense and a great 
deal of work to be done.
    There is a concern that is not just for the Army and the 
Department of Defense, but what are our allies doing as well. 
So the concern extends beyond the Federal Government and the 
United States, but also those that we have to interoperate with 
and our allies around the world.
    Senator Stevens. Well, I would hope that we would find some 
way to cooperate between what you are doing and our special 
committee. We have had some briefings from some of the experts 
in the area, and I am led to believe that some of the chips 
that were put in the systems had kept capacity far beyond the 
system, because it is less expensive to acquire chips that have 
an expanded capacity than it is those that have just a very 
narrow capacity.
    And if you are dealing with a system that had a series of 
models and one was a super-duper model and the plain model, the 
plain model has the same chip, and many people may not 
understand that the functions on that chip are those that would 
be affected by the year 2000 problem.
    I hope that we have a way of interrogating those people who 
sold us the equipment as to what type chip they used, and it is 
going to be a very serious thing.
    Mr. Walker. We found a new aspect of it every week that had 
not been considered. We just hope we find out all the aspects 
of it before the year 2000 comes around.
    Senator Stevens. Well, you could suddenly find out that the 
one chip that makes the treads go on the tank is the one that 
is hidden down there under the tank and no one knows it is 
there.
    Mr. Walker. Well, those critical systems are being very, 
very carefully managed to make sure we do not have that 
problem.

                                 Bosnia

    Senator Stevens. Very well.
    I am really worried about the Bosnia situation, gentlemen. 
We were told by General Clark that the Army is going to be 
deployed in Bosnia for several years, and we have obviously the 
statement of the President. I was there at Christmastime, the 
same thing.
    Do we have budgeting in here for the contracting support? 
Is this $1.9 billion for the Army--what did you do about 
contracting support?
    Mr. Walker. It would include the Army's share of the 
support to the contractors that we have there, which provide 
the quality of life support to the deployed soldiers.
    Senator Stevens. All right. Well, I appreciate it. I may 
have some questions later, but let me go to Senator Cochran.

                             Budget request

    Senator Cochran. Thank you, Mr. Chairman.
    In looking over the statements that you submitted, I am 
encouraged first of all that the Army seems to have been able 
to obtain approval for asking the Congress to appropriate an 
increased amount of funding for this fiscal year compared with 
last, and this is something new. We have been seeing cuts every 
year since 1985, except for Desert Storm, so there is an 
increase in this budget request, and that is encouraging.
    Mr. Walker. We hope that trend continues, Senator.

                        Recruiting and retention

    Senator Cochran. I am curious also to see your upbeat 
appraisal of recruiting at a time when some of the other 
services are telling us that because of the operational tempo 
and other attractions of civilian life compared with the 
military now that they are losing highly skilled people. The 
Air Force is worried about having enough pilots to fly the 
planes and perform the missions.
    But you suggest in your statement, Mr. Secretary, that 
recruiting has been doing well, more than 90 percent of the 
soldiers you recruited last year had high school diplomas, that 
you are not under any real stress there.
    Do you anticipate this continuing, or do you see any 
problems with the prolonged deployments to places like Bosnia 
and elsewhere around the world and the operational tempo having 
a negative impact on future recruiting goals?
    Mr. Walker. Senator, let me say this about recruiting. If 
we had been testifying this time last year, it would not have 
been as rosy. But with the help of this committee, you helped 
us to increase allowances, bonuses, to increase the number of 
recruiters, and to take other actions which turned our 
recruiting problem around, and we were particularly having a 
problem which, if left unaddressed, would have led to a 
readiness problem in terms of the number of unfilled squads, 
particularly in infantry and armor, that we have turned around, 
and we are now recruiting larger numbers of both infantry and 
armor. So we believe the recruiting aspect of it, with the help 
of this committee, is going in the right direction.
    With regard to retention, the Chief and I were just looking 
at the figures. It is coming in at 104 percent of our goals. 
When we look at the 1st Armored Division and those divisions 
that have been deployed to Bosnia, we are surprised to find 
numbers of 120 and 130 percent. It appears that currently 
soldiers like doing their job.
    What we do not know is, how many times can you keep asking, 
particularly families, to undergo the stress of multiple 
deployments? We do not know the answer to that yet, but we have 
the same concerns that you suggest in your question.

                       National Guard integration

    Senator Cochran. There is another question I would like to 
hear your reaction as well as General Reimer's, and that is on 
the plan to redesign the National Guard and integrate them into 
the Total Army concept. I understand that is undergoing some 
changes, and that some plans are being made to transform some 
of these combat troops to support units.
    Tell me what you are planning to do with the funds that are 
made available in this budget in that regard, and have you been 
able to develop support among the National Guard Adjutants 
General [TAG's], for example, and bring them along with this 
program, or are we looking for a collision that is about to 
happen?
    Mr. Walker. With regard to the specific issue that you 
bring up, there was for the first time unanimous support of the 
54 TAG's for that approach. What we are doing are converting 12 
combat brigades to combat support and combat service support, 
which will help us reduce a significant longstanding shortfall 
that we had in combat support and combat service support. That 
is on track. I will provide you for the record the amount of 
money that is in this budget and how much is in the POM for 
that redesign, but that is one of over 30 initiatives that are 
underway that are being reviewed both in the Active Army and 
the Guard and Reserve.
    [The information follows:]

                        National Guard Redesign

    In the President's budget for fiscal year 1999, $87 million 
is programmed for the Army National Guard Redesign Study 
(ADRS).
    As of the President's budget submission, the Future Years 
Defense Plan contained the following funding for ADRS equipping 
and training:

                                                             In millions

Fiscal year:
    1999..........................................................   $87
    2000.......................................................... 114.4
    2001.......................................................... 145.6
    2002.......................................................... 180.6
    2003.......................................................... 366.3
                        -----------------------------------------------------------------
                        ________________________________________________
      Total....................................................... 893.9

    Of the total, $843.9 million is programmed for equipment, and $50 
million is programmed for training.
    As we continue to assess and validate the ADRS, requirements are 
subject to change.

    General Reimer. May I just say, Senator, there are a number 
of initiatives that basically work to bring the Total Army 
together and make it a more seamless Army. That is what it has 
got to be in the 21st century, and we have got to move in that 
direction.
    The Secretary has mentioned the conversion of combat units 
to combat service support units, and that makes great sense 
from both a warfighting mission and a State support mission, 
and I think that has been accepted. The other part that has 
been accepted are the two integrated divisions that basically 
combine active component division headquarters with three 
enhanced brigades. We will develop that concept to its fullest.
    There are others that we are discussing in terms of teaming 
concepts between one division of the National Guard and an 
active component division. More integration--the whole issue is 
to develop the trust and confidence among all members of the 
Total Army. That is what we are trying to do, and we are trying 
to do that through open communication, having everybody's 
opinion heard and evaluated, and also by working together to 
integrate wherever we possibly can.
    Currently, we have three active component commanders 
commanding National Guard organizations, and that is fully 
accepted by all TAG's.
    At the same time, we are looking at an exchange program 
where we would have active component officers commanding 
Reserve component units and Reserve component commanders 
commanding active component units.
    I think the idea of bringing everybody together is 
absolutely what we have to do. That is where we put a lot of 
effort in the past year.
    Now, there will still be discussions on that. There will be 
different opinions on how to go about doing it. These issues 
are complex. The discussions are rooted in the Constitution of 
the United States, but we are addressing them, and in 
addressing them, we are trying to do what is right for the Army 
and what is right for America.

               Theater high altitude area defense [THAAD]

    Senator Cochran. There has been a good deal of attention 
focused on the failure of a test of your Theater High Altitude 
Area Defense Program, the THAAD missile, so-called. Tell us 
what the current status of your views are about this program. 
Does this test mean that that is going to be an unsuccessful 
program and you are going to cancel it or something, or is this 
just one of a series of numerous tests, and you learn something 
from each one and proceed to stick with your plan of figuring 
out a way to make this system work?
    Mr. Walker. Senator, we are looking very carefully at the 
cause of that last failure. Let me say, we have a tremendous 
requirement that must be filled by THAAD, and that is the right 
platform to fill a requirement that our commanders in chief 
[CINC's] out in the field have identified to protect our 
forces.
    We believe that the latter part of your statement is 
correct, that it is the right approach, and we are going to 
work those bugs out, and we are going to continue with that 
program.
    General Reimer. Let me just add, Senator, if I could, the 
requirement is absolutely solid. The threat is there. This is 
not some threat that might come about. Tactical missiles are 
there, and we have to protect our troops. This is about 
protecting those quality soldiers that I talked about. So we 
are very, very solid in support of that requirement.
    We have had a series of eight tests with THAAD. Of the five 
intercept attempts, we have not been able to achieve the 
results that we wanted totally. There has not been any systemic 
fault that we have been able to identify, and we are continuing 
to work the system.
    The contractor has been given a cure notice and will come 
back in with a program this week with corrective action that 
will be taken. We are not falling off of the requirement. We 
are going to keep the pressure on the contractor and make this 
thing work. We need it for our soldiers.
    Senator Cochran. We were over in Korea with the chairman 1 
year ago, a little over 1 year ago, and it became very clear to 
us when we started asking what the threats were for our troops 
there, one of them was missiles, and the fact that you were at 
point-blank range there, but not only that, with North Korea 
developing longer range missiles our troops in Japan were being 
singled out by the North Koreans as potential targets, we were 
told.
    So the fact of the matter is, we have troops all around the 
world who are under the gun now. We lost 28 in Dharhan during 
the gulf war to a Scud missile, and we know things have not 
gotten any friendlier in some parts of the world. They have 
gotten more hostile, with threats being made by leaders of some 
of these nation states against the United States.
    So it is a matter of great concern to me, and I hope that 
we can take hope in the different programs that are under 
development by the services, and this is the system that is 
under development by the Army. This is the one the Army 
selected as the best approach to missile defense for its troops 
in the theaters.
    So we wish you well. We are going to continue to provide, I 
hope, the level of funding necessary to get the job done. We 
need to have that missile system developed and deployed sooner 
rather than later, in my view.
    Mr. Walker. I think we need to stick with it, Senator, 
because of the other systems being considered, the THAAD is 5 
years ahead of any other system that could compete.
    We have a real threat now that we need to be dealing with. 
If we had it today, it would be deployed.
    Senator Cochran. Thank you, Mr. Chairman.
    Senator Stevens. Senator Shelby.
    Senator Shelby. Thank you.
    General Reimer, following up on Senator Cochran's questions 
dealing with THAAD, this is just a question regarding tests. 
You know, I believe they have had five tests.
    General Reimer. They have had a total of eight with that 
system, Senator.
    Senator Shelby. What if they had 50 tests? I know you would 
learn a lot more. I just throw that figure out, because if the 
basic concept of a system is good, which people tell me it is, 
the more tests, the better chance you work it out, and then you 
say, well, gosh, we are going to do another test in 4 months, 
or 6 months, and everything is relying on that one test, 
whereas our real aim is to work the bugs out, is it not?
    General Reimer. I think you make a very valid point. This 
is a system in the early stage of its development, and as we 
get more tests, we certainly learn more about it.
    We have tried, and I think the contractor, working in 
conjunction and partnership with us, has tried very hard to 
make sure each of those tests is successful. So we have gone 
through that to try and really fine-tune it as best we could.
    As the Secretary pointed out, it is still far ahead of any 
other system right now, and it offers the greatest opportunity 
to put the missile on the ground faster than anything else, so 
we are going to stay with it.
    And you are right, we need to run more tests, and we need 
to run them as fast as we can, but we have got to make sure 
they are successful, too. That is the balance we are trying to 
achieve.
    Senator Shelby. General, you can just go back a few years, 
a good many years back when the M-1 tank was coming on line and 
there were all kinds of articles out there, it will never work, 
it is terrible, it is nothing, and you did have a lot of little 
glitches to work out, and you work them out little by little, 
and we know the history since then, do we not?
    General Reimer. Absolutely.

                           Space capabilities

    Senator Shelby. I would like to get into something else, 
General Reimer. The Air Force recently has emphasized that it 
is undergoing a transformation into a space and air force, 
whatever that means.
    The Army, as you well know, has also had a long and 
distinguished legacy in space. Given this heritage, what is 
your vision for the Army contribution to space operations, and 
how do you believe the Army can tailor space capabilities to 
support land force and joint missions, which is what you have 
done? Is that a real lively thing today?
    General Reimer. I understand the question, and it is a very 
contemporary topic that needs to be discussed and is discussed 
a lot. The Army after next wargames that I mentioned in my 
remarks really have emphasized the importance of space.
    Space is the high ground in the 21st century. We understand 
that. We are really very dependent upon space for the global 
positioning systems, for communications, and for intelligence, 
and so our effort has been to increase the emphasis in terms of 
Army involvement in space.
    We have done that primarily through the U.S. Army SMDC, the 
Space and Missile Defense Command. That is headed up by Lt. 
Gen. Ed Anderson, and has been really the Army vehicle to 
emphasize space. We believe very strongly that we have a very 
strong future in space, and the Army needs to be involved, and 
we will stay involved in space.

                  Enhanced fiber optic guided missile

    Senator Shelby. General, both the House and the Senate 
authorizing committees zeroed-out the enhanced fiberoptic 
guided missile program. General, does the Army still support 
the Enhanced Fiber Optic Guided Missile [EFOG-M] Program?
    General Reimer. Senator, the EFOG-M program is a program 
that we have in the advanced concept technology demonstration 
[ACTD] model, and I do not think both committees zeroed it 
completely. They cut, it is my understanding, pretty close to 
zeroing out, but not quite.
    We brought the EFOG-M in as a hedge against the uncertainty 
of light forces being caught in a situation like Desert Shield 
and not having as many systems to kill tanks as they should 
have. So EFOG-M was seen as one of the potentials for the 
future.
    To answer your question, we want to stay with the ACTD to 
continue to evaluate it. We are running some tests on it.
    Senator Shelby. It has come a long way, though, has it not?
    General Reimer. It has come a long way. We have not gotten 
all the results out of it yet that we want, but it is coming 
along, and we want to stay with it through the ACTD phase and 
then make a decision at that point.

                         Science and technology

    Senator Shelby. General, what level of inhouse competency 
in Army labs and research centers is necessary to ensure that 
the Army develops technologies needed to achieve divisions of 
Force XXI, or Army after next?
    General Reimer. In terms of level, I do not know exactly 
how to describe that, except to say we put about $1 billion 
into the science and technology [S&T] base.
    Senator Shelby. It has paid off, too, has it not?
    General Reimer. It has, and you identified a few programs 
that have been brought along by that.
    We are using the Army after next wargames, which look at 
what the Army needs to be in the 2020 timeframe and the 
technologies we need to drive that S&T base, and so we are 
focusing our investments in S&T in that particular area. I 
think S&T will continue to be very important as we change to a 
fundamentally different Army in the 21st century.
    Senator Shelby. General, do you believe that if there is a 
downsizing strategy that results in Army scientists and 
engineers with high grade pay--in other words, high 
competence--to be placed in lower grades or lower performance 
positions, do you believe that would be good public policy or 
bad public policy?
    General Reimer. Well, I do not think that is necessarily 
good policy. I think that is a reflection of the way we have 
had to reshape the civilian work force.
    Senator Shelby. If you had a downsizing, a gradual 
downsizing, trying to keep the best and the brightest would 
make a lot more sense, would it not?
    General Reimer. It would. I worry about the shape of the 
civilian work force, because I do not think we have done a very 
good job of bringing new people in and growing the middle 
management we will need in the 21st century, but your basic 
thrust is right, Senator.

                                 M-113

    Senator Shelby. I have one more question. The M-113 family 
of vehicles, getting into that for a moment, is the procurement 
and O&M funding profile now stabilized to accomplish the 
upgrades in a reasonable timeframe at the lowest cost?
    In other words, it is my understanding that the 
modernization of the M-113 family of vehicles is funded in 
several different lines, and I am concerned as a result of 
funding requests for upgrades to the M-113 that are not 
consolidated or coordinated the Army may be upgrading these 
systems--you know, we want to do it at the lowest cost. Could 
cost savings be achieved by a consolidated and coordinated 
conversion plan for the M-113 family of vehicles?
    General Reimer. We believe they are, Senator. There is a 
partnership between United Defense Limited Partnership [UDLP] 
and Anniston, and that is the most cost-effective means of 
doing it. I think most of it, if not all of it, is done in 
Alabama, as a matter of fact, but we think it is a very cost-
effective program. It is as cost effective as we can make it.
    Senator Shelby. But it is moving along and saving money, is 
it not?
    General Reimer. I think so, Senator, yes. I would like to 
provide more detail for the record on that one if I could.
    [The information follows:]

                             M-113 Program

    M-113 upgrade modifications are done by Anniston Army Depot 
in compliance with the depot workload law. Beyond that 
requirement, upgrades are also performed under a partnership 
agreement between United Defense Limited Partnership and 
Anniston Army Depot. Chassis inspection and repair is done at 
Anniston Army Depot, then United Defense Limited Partnership 
applies the upgrade kits. This partnership is the most cost-
effective method of applying the upgrades and saves 
approximately fifteen percent of the cost to upgrade each unit.

    Senator Shelby. Secretary Walker, do you have a comment?
    Mr. Walker. Yes, Senator. Sixty percent of that work is 
done at Anniston. It is a great partnership, and it is working, 
yes, sir.
    Senator Shelby. Thank you, Mr. Chairman.

                           Pine Bluff Arsenal

    Senator Stevens. Senator Bumpers.
    Senator Bumpers. Thank you, Mr. Chairman.
    Secretary Walker, I note that General Wilson, who is 
commander of the Army Materiel Command [AMC], has stated that 
he wants to cut AMC installations from 62 to 39. I have no 
objection to that as long as Pine Bluff is not one of them. 
[Laughter.]
    Incidentally, Mr. Secretary, I do not have any objection to 
another base realignment and closure [BRAC] as long as Little 
Rock Air Force Base is not on the list.
    But having brought this question of Pine Bluff Arsenal up, 
the thing that was mildly troublesome to me about that, first 
of all they are already scheduled for 138 personnel cuts, which 
is about 16 percent of the personnel cuts that General Wilson 
is proposing, whereas the others are only taking a 3- to 7-
percent cut, so I have, I guess, two questions.
    No. 1, why has Pine Bluff been targeted for such an 
inordinate share of the cuts, No. 1, and No. 2, why he arrived 
at a magic figure, General Wilson arrived at a magic figure of 
39. That makes me think he has a list in his hip pocket, and I 
would like to see that list.
    Mr. Walker. Senator, I have not heard that number 39 from 
General Wilson, and I will certainly take that up with him and 
discuss it with him.
    With regard to the additional reductions that you refer to, 
that is part of the ``Quadrennial Defense Review'' [QDR] 
reductions that are going on throughout AMC and throughout the 
Army. General Wilson and the AMC staff have worked very 
diligently to keep those reductions to a minimum at all 
locations, but they still had reductions which were required by 
QDR that they had to meet, and that is the result of that 
requirement.
    Senator Bumpers. Mr. Secretary, I consider you a friend and 
I have the utmost respect for you, but I did write to you on 
March 10 on this item and, as they say in Arkansas, I ain't had 
no hearing.
    Mr. Walker. Really. You will get one today.

                        Theater missile defense

    Senator Bumpers. Thank you.
    Now, General Reimer, back to Senator Cochran's line of 
questioning on THAAD, let us take Korea, for example. Let us 
take the peninsula. North Korea apparently has a big stable 
full of Scud's, about 600 of them.
    We have been told by General Lyles that the improved 
Patriot can handle that, but my question is--and I am not 
questioning whether or not it can or not. Of course, I think 
PAC-3 would come closer to handling it, but for just purposes 
of discussion, do we have a sufficient number of interceptors 
there, either the Patriot or PAC-2, to handle that kind of 
arsenal in the hands of the North Koreans?
    General Reimer. Well, we have forward-deployed, as you 
indicated, a Patriot battalion to cover a number of different 
installations over there, and it basically provides the low 
altitude point defense for that particular threat.
    What we need, though, is the high altitude defense to 
complement, and that is why THAAD is so important. Patriot will 
allow you to kill a certain percentage of the threat, but to 
get the assurance that we want for our soldiers, we need that 
high altitude piece.
    As you indicate, we are updating the Patriots over there 
from the standard Patriot to the GEM missile, which is an 
enhanced missile, and ultimately to a PAC-3. They will be one 
of the first to receive the PAC-3, so we recognize the 
criticality of Korea and are doing everything possible to 
increase its protection. But I would feel a lot better if we 
had THAAD over there right now, and I think General Tillelli, 
the CINC, would feel the same way.
    Senator Bumpers. You would not feel better if we had THAAD 
in its present state over there, would you, which has not been 
able to hit anything yet.
    General Reimer. No; but I have a lot of confidence THAAD 
will do it.
    Senator Bumpers. I do, too. That is another kettle of fish.
    But let me ask you about the North Korea No-Dong with a 
600-mile range, and while that is still under development, they 
have not tested it since 1993, is that correct?
    General Reimer. Senator, I do not know. I would have to go 
back and provide that for the record, because that is something 
I just do not know.
    [The information follows:]

                            No-Dong Missile

    [Deleted.]

    Senator Bumpers. Well, I think the PAC-3 could handle that 
missile, and I understand development of PAC-3 is moving along 
very well, but I think the improved Patriot could probably 
handle that too.
    General Reimer. Well, the PAC-3 is your improved Patriot. 
It gives you a greater coverage.
    Senator Bumpers. Do we not have a Patriot 2?
    General Reimer. We have a Patriot 2 and a GEM missile, 
which is an enhanced missile that we are fielding over there 
right now, which gives you increased coverage over what we had 
in Operation Desert Storm. The PAC-3 will increase further the 
coverage, but it only gives you a low altitude coverage. You 
have to go up into the high altitude, and that is why THAAD is 
so important, to get into the high altitude in order to get the 
assurance that you want for your soldiers in terms of 
protection, and I think that is very appropriate for the No-
Dong missile.

                        National missile defense

    Senator Bumpers. General Reimer, let me make a comment, and 
then just ask you to comment on mine.
    I have not supported Senator Cochran's amendment. It is 
mildly troublesome to me. No. 1, Senator Cochran is a 
thoughtful person and I do not cavalierly take issue with him. 
We work together well, and he is a friend, and I think he has 
studied this issue very carefully, so that made it difficult 
for me to vote no on that.
    On the other hand, I do not see any point in deploying 
before we have to until the intelligence community tells us 
that the threat exists, because the longer we go--first of all, 
we have had a very difficult time with THAAD, and we are going 
to have an even more difficult time with a ballistic missile 
defense, but be that as it may, stick with THAAD for the time 
being, as I say, I am most reluctant to deploy something that 
we do not have the kind of assurance in the effectiveness of 
that we have a right to expect.
    So I want to put that off as long as possible, and in order 
to do that, I have to have a lot of confidence in the 
intelligence community to tell us what the threat is.
    In other words, if there is no threat for the year 2003, 
2004, 2005, I think we ought to continue improving the THAAD 
until we have a high degree of confidence in its ability to 
perform.
    Having said that, and this will tell you why I was so 
troubled about Senator Cochran's amendment, the intelligence 
community did not know India was getting ready to explode a 
bomb, either, and every time we turn around we find these big 
intelligence gaps.
    Senator Cochran and some of his cohorts made the point on 
the floor, which was a perfectly legitimate point, and that is, 
we do not often know what the threat is, but if we are going to 
spend $25 or $30 billion on intelligence, we either ought to 
quit spending it, or we ought to put some confidence in what 
they tell us.
    All I am saying is, that is the reason this whole thing is 
so troublesome to me. If you have any comment on that, I would 
be interested in hearing it.
    General Reimer. Senator Bumpers, what I would say is that 
the THAAD is a theater missile defense system. There is a 
threat out there that requires that right now. I do not think 
the intelligence community differs on that. I think we would 
say that the threat in theater missile defense is there. We 
need THAAD now.
    As you get into national missile defense, then I think you 
start to get into question about whether the threat is there, 
whether we need 3 years to develop a system, and that kind of 
thing.
    Senator Bumpers. I mixed up apples and oranges there, 
General. Your point is well taken.
    General Reimer. As far as the THAAD is concerned, I am 
convinced the threat is there. I think we ought to deploy THAAD 
as soon as we can. I agree with Secretary Walker, if we had 
THAAD now, we would deploy it in Korea, and we would feel a lot 
better about that.

                              Food stamps

    Senator Bumpers. Well, back to THAAD. You know, I take 
strong exception to buying 40 interceptors when we have our 
first hit, which is the present plan. To me that would be the 
height of folly. One hit might be a random hit, and to go all 
out to deploy that missile based on that I think would be 
foolish.
    But let me ask you one other question, and then I will 
quit. In the New York Daily News there was an article by Lars 
Eric Nelson quoting a General Russell--is it Honore?--he says, 
I have got a tank commander who has a wife and three kids 
living in a trailer park down in Killeen, TX, and he is on WIC, 
and I might say, that would be most interesting, since WIC is a 
women's and infant's and children's program. That is 
interesting for a tank commander to be on it.
    But I think what he meant was, he was on food stamps, or 
his family was getting food stamps, because as I say, WIC is a 
program for pregnant women. This tank commander would hardly 
qualify.
    But the point he was making is, he talks about a welfare 
Cadillac, and he calls the M1A2 a welfare Cadillac. Here you 
have got a guy who is commanding a $4 million tank and he goes 
home at night and eats food bought with food stamps, and I must 
say, that point is well-taken. That point has been made in this 
committee time and time again.
    Can you tell me how many of our servicemen qualify, not 
actually draw food stamps or any form of welfare, but how many 
people qualify?
    General Reimer. We can give you that number, and I will be 
glad to provide it for the record.
    [The information follows:]

         How Many Army Service Members Qualify for Food Stamps

    Based on a Department of Defense survey and study, the Army 
estimates that 9,968 soldiers are eligible for food stamps. For 
military members to be eligible for food stamps, their cash pay 
must be less than the gross income eligibility limit for food 
stamps. Food stamp eligibility requirements are 30 percent 
above the poverty level and are based on family size and total 
family income.
    When estimating the number of food stamp eligibles, we 
assumed qualifiers based on a worst-case scenario. We assumed 
the member's income was the only source of household income, 
while, in fact, more than 60 percent of military spouses work. 
However, since their earnings are not known, they are not 
counted in this analysis. Second, we assumed members received 
no other special pays and/or allowances and no earnings from 
other sources, such as interest or rent. Finally, we assumed 
the other resources of the member are limited and would not 
preclude his/her eligibility.
    While it is unfortunate that there are military members 
eligible and receiving food stamp benefits, eligibility for 
food stamps is largely driven by the rules used in determining 
eligibility rather than by soldier compensation. For example, 
the free housing service members living on base receive does 
not count as part of income for food stamp eligibility 
purposes. Additionally, households may have up to $2,000 in 
countable resources, such as a bank account, and other 
resources, such as a home and land. Thus, it is possible for 
soldiers with above average incomes to be eligible for food 
stamps.

    General Reimer. From the Army's standpoint, it has to do 
with first of all your pay and then the size of your family.
    Senator Bumpers. Yes.

                              adequate Pay

    General Reimer. Let me go back to Russ Honore for a minute, 
because Russ Honore is one of our better warfighters, in my 
opinion. He has a lot of experience, and what he is reflecting 
is absolutely what all of us feel.
    We have the best soldiers in the world, the best people, 
America's sons and daughters, and we owe them an adequate and 
predictable quality of life. That is why one of the top 
priorities, and probably the top priority, is to provide them 
adequate pay for their services.
    Now, that wife may have been on WIC. I do not know whether 
it was food stamps or WIC that he was talking about.
    Senator Bumpers. Well, I think he is making a point.
    General Reimer. The point is the same. We are not paying 
them enough. We need to increase their pay. That is why your 
support on the 3.1-percent pay increase that we programmed for 
this budget is very important, and I would hope that we would 
continue that, because those soldiers are about 13 percent 
behind their civilian counterparts, and we are not catching up 
fast enough. We need to take care of them, or else they are not 
going to be with us that long.
    Senator Bumpers. General, why don't the Chiefs, or why 
doesn't the Secretary come over here with a proposal to say, we 
want enough money to make sure that no man or woman in the U.S. 
Armed Forces is forced to apply for or eligible for any welfare 
program?
    Now, the chairman and Senator Cochran and Senator Domenici 
know that I am a little bit of an iconoclast when it comes to 
defense spending.
    Senator Domenici. What is the word?
    Senator Bumpers. That is too big a word for them. I am a 
spendthrift.
    But in any event, that is one place where you get no squawk 
from me, and I do not understand why the request is not made. 
In my opinion the U.S. Congress would respond and respond 
quickly.
    General Reimer. Senator, I have been Chief for 3 years and 
consistently have said our four priorities are adequate pay, 
medical care, housing, and a stable benefits and retirement 
program. We continue to push them, given the top line that we 
have, and we will continue to do that, but we also have to make 
sure we keep it balanced.
    We have a responsibility to make sure that those soldiers 
that we put in harm's way are trained and ready, and that is 
what this budget is all about, achieving that fine balance that 
I talked about in my opening statement.
    Senator Bumpers. Thank you, Mr. Chairman.
    Senator Stevens. Yes, sir.
    Senator Inouye.

                               Readiness

    Senator Inouye. Mr. Chairman, I apologize for having rushed 
out. There was an emergency. Forgive me, sir, for not being 
aware of the questions that have been asked. I may be 
duplicating them, if I am, please advise me.
    Mr. Secretary and General, the one word that concerns all 
of us here is readiness, and there has been some discussion 
that several of your Army divisions may fall into the category 
of C-3 by the end of this year. Is this a problem of readiness 
or definition? Can you enlighten us?
    General Reimer. I think it is truly a product of readiness 
in the future. What we have asked for, and what the omnibus 
reprogramming that Secretary Walker mentioned in his opening 
statement is designed to do, is to make sure that the readiness 
of those divisions does not slip.
    What has happened is that we have funded them in 1998 at a 
certain level of OPTEMPO which has been standard for us, 800 
miles, but we have underfunded them in base operations and real 
property maintenance [RPM], and also in terms of barracks 
improvements, so there has been some migration of funds to make 
sure we take care of quality of life.
    The point that I was making with Senator Bumpers is, if we 
do not take care of soldiers in terms of quality of life, then 
we are not going to be able to keep these same quality 
soldiers. So what the division commanders in the field are 
doing is to try and work that balance.
    We feel like there is a small omnibus reprogramming 
requirement for us. We are working that with OSD right now, 
and, hopefully, it will be on its way over here, and we think 
that will take care of any potential readiness problem we have 
in the fourth quarter with the active component divisions.
    Senator Inouye. Do you have any comment, Mr. Secretary?
    Mr. Walker. No, sir; I will just reiterate what the Chief 
said. We would solicit your support for the reprogramming, 
because we will need it to ensure readiness for the remainder 
of the fiscal year.
    Senator Inouye. Mr. Secretary and General Reimer, about 10 
years ago the Army had about 105,000 troops assigned overseas 
in the Pacific. Last year, it was down to 78,000. The 6th 
Division in Alaska has been downsized to one brigade. The 25th 
in Hawaii has lost one brigade. The 7th at Fort Ord, CA, has 
been dismantled. The High Technology Light Division at Fort 
Lewis, WA, has been dismantled.
    There are some who view these as signs that the U.S. Army 
continues to focus on Europe and does not care too much about 
the Pacific. How would you respond to that contention?
    General Reimer. Senator, I would say your figures are 
absolutely correct. There has been a downsizing in the Pacific, 
but it has probably been fairly consistent with the downsizing 
across the Army overall. The active component has come down 
about 38 percent in terms of numbers. If you look at Europe 
now, for example, and compare it to Europe in 1989, we had 
216,000 soldiers over there. Now we have 65,000. I do not think 
the cuts in the Pacific have been that great.
    I totally agree with you; we were probably too oriented 
toward Europe during the cold war, because that was the major 
threat. We are trying to shift our emphasis to the Pacific and 
get a more balanced view of both of those theaters, which I 
think are very important to the United States, and in so doing, 
we brought down Europe dramatically.
    We have 75 percent of the fighting force of the active 
component in the continental United States that can go to 
either region, and we have a pretty balanced number of soldiers 
deployed to the Pacific and deployed to Europe, so that is what 
we have been trying to do, and tried to work that balance as 
best we could.
    Mr. Walker. Senator, let me just say, the importance of the 
Asia-Pacific region cannot be overstated. We are in many 
respects a Pacific nation now because of all of our trade that 
we do there, and the Army keeps that in mind, and we will 
continue to keep that in mind as we look at the future.
    All you have to do is pick up the newspaper and look at 
what is happening in Indonesia today to know that there can 
never be a lack of attention by the United States on the Asia-
Pacific region.

                         National Guard funding

    Senator Inouye. I thank you for that.
    The other words we use today are total force, integrating 
the National Guard with the active component. However, in 
providing resources to the Guard, especially in military 
construction the Army's allocation I believe is rather 
inadequate. Why does the Army not provide enough funding to 
support National Guard needs?
    Mr. Walker. Let me say, Senator, I think our military 
construction budget, in general, is underfunded, because we had 
to pay for other competing requirements as we put the budget 
together.
    With regard to the specific amount that is included for the 
National Guard, there was an agreement as part of the offsite 
at a certain level, and I think it is $50 million in the next 
several years would be included in the budget, and that is why 
you see the level that is included this year.
    Senator Inouye. I hope you look over some of the requests 
that have been coming through from National Guard units 
throughout the United States. Looking over them, they seem to 
be rather urgent in need, and I would hope that you would give 
them another look.
    Mr. Chairman, I have several other questions I would like 
to ask, but may I submit them, sir?
    Senator Stevens. Yes, sir; we will submit your series of 
questions to the gentlemen.
    Senator Domenici.
    Senator Domenici. Senator Bumpers wants me to yield to him 
first.

                        National missile defense

    Senator Bumpers. I just wanted to clarify the record on my 
line of questioning to General Reimer earlier, when I mixed 
THAAD and national missile defense.
    Senator Cochran's amendment goes to a national missile 
defense system, and when you said a moment ago--we were talking 
about the intelligence community and you were talking about 
intelligence admits that there is a threat, there are threats 
that we do not even know about, you were talking about theater 
missile threats, were you not?
    General Reimer. What I was saying is that in the tactical 
missile defense arena, the threat is out there to justify the 
THAAD. It is not a matter of trying to develop the threat, or 
worrying about the threat. It is there.
    Senator Bumpers. I understand that, and I totally agree 
with you, but I wanted to make sure that you were not saying 
that there was a national missile threat that the intelligence 
community did not know about.
    General Reimer. I am not aware of any.
    Senator Bumpers. Well, the only thing I can think of that 
might even come close, and I think we know as much about it as 
we can, is the Taepo Dong-2, which is the only missile I know 
anything about that could possibly hit Hawaii, as being a 
threat to the United States.
    General Reimer. I am a little worried about the 
classification of that system. I prefer to provide that for the 
record, and I would also like to make sure that I talk with the 
intelligence community on their assessment of the threat.
    [The information follows:]

                          Taepo Dong-2 Missile

    [Deleted.]

    Senator Bumpers. I just wanted to clarify the record on 
where the threat was, or whether there was a threat or not, 
because as I said, in the debate on Senator Cochran's 
amendment, the whole debate was that there is no threat, and 
whether you wanted to wait until the intelligence community 
defined the threat and described it to us before you deploy, 
that was the real issue in Senator Cochran's amendment.
    Senator Domenici, thank you very much.
    Senator Domenici. You are welcome.
    General, Mr. Secretary, Mr. Walker, it is nice to see you. 
I used to see you a lot more when you were on Senator Sasser's 
staff.
    Mr. Walker. It is good to be back.
    Senator Domenici. I might say, we are all getting more 
mature. Even you look older.
    Mr. Walker. Yes, sir. I remarked earlier, I turned 50 this 
year. I am beginning to think about it.

                       White Sands missile range

    Senator Domenici. General, and Mr. Secretary, I was going 
to take a little time and talk about White Sands missile range 
and the personnel cuts there, but I am not going to do that. I 
am going to submit the questions with the background to you. I 
would very much appreciate your paying personal attention to it 
and giving me some answers.
    I also would like you to make sure that Lieutenant General 
Lyles, who came up here and testified about the overall missile 
defense programs--and he said at that hearing that he would 
check to see whether the Army's plans for White Sands missile 
range reductions were consistent with the overall military plan 
for using the range during the next 5 to 10 years because of 
plans for new missile activity like THAAD.
    I am concerned that you, being a soldier, are following 
orders on a budget, trying to get within the 5-year budget 
plan, and I give you great credit for trying to do that. No 
other people in Government have to do that, just the Defense 
Department. There is nobody else with a 5-year budget in this 
Government except you guys, and whenever somebody talks about 
budgeting you ought to remind them.
    There is no 5-year budget for HUD. There is no 5-year 
budget for NIH. They all change as people need more things, and 
you have to plan all of these resources for 5 years.
    But in any event, I would be very disturbed if we cut back 
the personnel at White Sands missile range, our major inland 
missile range, and then find that in 3 or 4 years, to meet the 
national plan, that we made a mistake and we had to go back and 
hire them back. It would be very expensive. I am also concerned 
that we have opened the window at White Sands to people getting 
out of the service.
    I asked them to please wait until we had oversight 
hearings. They told me they would, but then they did not, so 
these people are going to be gone by the time we decide, with 
evidence from General Lyles and yourself, whether it is totally 
correct.
    Now, having said that, I joined our chairman and ranking 
member on this trip to the Middle East. I do not travel very 
much, but I have learned a lot more from it, and so I am doing 
it more. I did not get to work with as many Army people on the 
ground as I did Air Force. That was just a coincidence of how 
we broke up our groups.

                         impact of Deployments

    But I am very concerned about the impact of so many 
deployments overseas and so many deployments that leave and 
then come back, redeploy. I think the military has to be honest 
with this committee and with the President and tell us what 
impact that has on the lifestyle of our troops and whether they 
really feel like they are part of something worthwhile when 
that happens.
    From talking to these people it is so different than the 
man on the ground in Bosnia, where they have a mission, and 
there is a much better deployment scheme, and you do not bring 
them in and out. We talked to a couple of people who were in 
and out 10 times or more, 11, in the Middle East in a few 
years. Well, you can understand that that guy has got a few 
kids and a wife. He did not sign up to be in the Foreign 
Legion.
    So I have some questions regarding how you go about asking 
the military men and women for their views about their 
treatment, and I really would like you to look at them, because 
I believe we are in a position where I think you need some 
outside confirmation of the attitude of the young men and 
women, because it is suspect when overseers ask underlings to 
answer questions about the overseers.
    They are not going to say, ``We do not like our four-star 
general,'' right? They believe somebody is going to find out, 
right?
    So I am asking that you take a look at outside polling 
under your direction, and that you really get us some answers 
about what is going wrong in the quality of life and the rest.
    And I want to make one other point. I hope nobody in the 
military is thinking about trying to give preferential 
treatment to military people who do not have kids; all we need 
is an Army that does not have any families.
    Frankly, if I heard such a thing we would have one hell of 
an explosion up here, because when you ask men and women to 
stay in 20 years, you cannot then say, well, we do not like it, 
they have got too many kids. That cannot be our situation, or 
we will have acted totally irresponsible in my opinion.

                             Privatization

    Now, I also am going to ask you some questions for you to 
answer about how you are going to get the 20-percent savings 
over the next 5 years, each year, from privatization. I am 
aware that this is a huge burden on you, that if you think 
there is one thing that may not happen in your budget, it is 
that.
    You are, again, good soldiers, you are going to go try to 
do it. But you see, we are left with a situation, if the 
privatization does not work, and save money, then what do we do 
to pick up the money that you already put in your budget as 
being saved? We are going to have to put it back in there, or 
else you are going to have to cut something that you do not 
plan to cut, and we did not plan to cut.

                           Budget shortfalls

    My last point has to do with your budget, and I just want, 
since you are a member of the Joint Chiefs, I want to tell you, 
as one Senator who works on the budget and tries desperately to 
keep ourselves as a Nation from overspending, I do not 
appreciate the Secretary of Defense and the President sending 
us a budget and then putting $1.9 billion into an emergency pot 
to pay for Bosnia, where we have now been--how many years, Mr. 
Chairman--4 years.
    Now, that puts us in a position where if we cannot get that 
deemed an emergency, then we are going to be deemed cutting 
defense more than our President, and that is not right. In 
fact, I have been trying to figure out a way to send him his 
budget back--I do not know how I am going to do it yet. Maybe 
it is too late--but send it back to the President and say, 
Congress is not going to agree that this is an emergency. It is 
4 years now that we have been in Bosnia.
    So you do us a new budget and tell us about it, and I would 
urge that he raise the caps. We may have to do that ourselves. 
I may do that in conference when we go to the House. They want 
to cut domestic spending. I may surprise them and say, well, 
while you are cutting so much, why do you not add $3 billion on 
the defense side.
    I probably would not win, but I am telling you where I 
stand. [Applause.]
    Having said that, you just heard my spiel about all this, 
and I did not let you answer any questions, but you will have a 
bunch of them in writing, and I really would appreciate your 
personal attention, particularly with respect to White Sands.
    General Reimer. I will call General Lyles and talk with him 
myself.
    Senator Stevens. You see how fortunate we are to have as a 
member of our committee the chairman of the Budget Committee. I 
want you to know he does carry the defense shield wherever he 
goes, and we are either going to do it his way, or if we cannot 
do it his way, we will do it the stealth way and try to get you 
some more money.
    Senator Domenici. And I will help you.
    Senator Stevens. We will get that money.
    Senator Inouye. Mr. Chairman.
    Senator Stevens. Yes, sir.

                       Southwest Asia deployments

    Senator Inouye. If I may follow up with Senator Domenici on 
his trip to Kuwait, he worked with the Air Force personnel and 
I was assigned to the Army, and the first question that I was 
asked by the assembly was rather stunning. When do we go home?
    I did some investigating and apparently those who were 
there before the recent Iraqi-Saddam Hussein crisis are not 
feeling that way, but those who came afterwards, during the 
crisis, who really do not know when they are going to be 
leaving, are quite concerned, and I hope that we will be able 
to clarify that so they can tell their wives they will be home 
for Christmas, or Thanksgiving, or something like that.
    The other matter, which may be out of your area of 
responsibility, several of the Army people complained that they 
were not permitted to wear the American flag on their uniform, 
and they were hoping that rules and regulations can change so 
that they can put it on.
    I realize that the host country in the case of Saudi Arabia 
is not too happy with that. Are any steps being taken?
    General Reimer. Senator, that is news to me. I am meeting 
with the Army Central Command [ARCENT] commander this 
afternoon. I will bring that up with him, and we will get into 
that. I do not know exactly whether they were permanently 
assigned there in Kuwait, or whether they were deployed over 
there as part of the 3d Infantry Division. The 3d Infantry 
Division went over there with the American flag on their 
shoulders. I will have to get into the details of that.
    But can I also just come back to your question. I think 
that is a very natural question. It was a thing that we 
experienced in October 1990 when I first went over on Desert 
Shield. The soldiers wanted to know when they were going to 
come home. When we said, you are there for the duration, that 
question went away. They understood that, and they accepted 
that.
    I think that is a very natural reaction for the soldiers 
over there, and we are working very hard, the Joint Chiefs, to 
make that determination or recommendation in conjunction with 
the administration on how we are going to go about rotating 
them, or what are we going to do.
    Senator Inouye. Otherwise the men and women were in great 
shape. They just want to know when they are going to get home.
    General Reimer. I visited them just a couple of weeks 
before you did and had the same impression. They were making 
the most out of some very austere conditions, and I was very 
proud of them, as I always am.

                              Health care

    Senator Domenici. Would the Senator yield?
    General, I failed to mention something about health care. I 
am not one who thinks you can introduce a big medical program 
without some things going wrong, when you all are trying to get 
out of the CHAMPUS mode, which was a failure, to a better mode, 
but I believe that it ought to be a very high priority of the 
Joint Chiefs that somebody finds out the extent to which 
TRICARE is not working. There ought to be some very stiff 
penalties imposed on those who are delivering this system if 
they make mistakes.
    If they are not the ones making them, then that is one 
thing, but we ran into one situation where a sergeant, in front 
of the general, got up and said, I have had to call home for a 
private with two kids because his wife is being hounded to pay 
health care bills and she is frantic because she does not have 
enough money, and that is not her responsibility to pay health 
care bills for those two kids. She is right on a base.
    And it struck me that if we hear one--my rule in my office, 
if you hear a complaint that people are willing to run up and 
tell you about, it is not the only one. My rule of thumb is 
that there are usually a lot of them, and I urge that you do 
everything you can in that regard.
    General Reimer. I think you are absolutely right, Mr. 
Chairman. We are really focusing on that. We have transitioned 
to a new care plan called TRICARE, and there have been some 
bumps in the road. What we have tried to do, and what we are 
doing, is go after each one of those individual challenges like 
that and figure out what went wrong and how to fix it.
    I think once we have gotten everybody in the Army on this 
TRICARE plan, we will start to work our way through that, and I 
think we will provide the adequate care that our soldier is so 
entitled to.
    Senator Domenici. Thank you, Mr. Chairman.

                                 Morale

    Senator Stevens. Senator Bumpers asked me, what are you 
doing signing your mail when we have a hearing going on? I have 
to tell you, if you come from a State like mine, you read your 
mail, every one. There are so few of us that I know them all, 
and I apologize for that.
    But I also want to tell you that on our visit--we said this 
when we met with the Secretary, but I want to make sure that we 
say it on the record and publicly. We found such enormous 
morale in Bosnia as compared to the morale that we found in 
Kuwait and Saudi Arabia. I think, as I said, it is a tribute to 
General Ellis and to your whole system that, despite the fact 
of the questions at home about deployment, once they are there, 
those young people were doing their jobs, and we are very proud 
of it, and we are proud of them.
    But I have walked around a lot of bases and I have been in 
a lot of places with many general officers, and you can tell 
when the troops understand who he is and have great respect for 
him. That was a great day we spent with him.

                     172d Separate Infantry Brigade

    Last, let me say to you that I am grateful to you, Mr. 
Secretary, for going up to the ceremony when we redesignated 
the 172d Separate Infantry Brigade for Alaska. That solved a 
tremendous problem for us. Everybody used to tell me we had an 
orphan brigade, and now it has a mission and it has a real 
definition as part of the forces that my colleague has out in 
Hawaii, and we are part of the Pacific, where we think we 
should be, and I do thank you very much for that.
    I think General Simpson did a tremendous job in pursuing 
that. It is my understanding that the U.S. Army of the Pacific 
is going to ask you now to redesignate one officer there at 
Wainwright to be a brigadier to solve this problem of north and 
south of the range in Alaska.
    I am not going to ask you now what you are going to do with 
it, but I hope that you will help us really nail down that 
solution so that there is not this animosity between our two 
major cities over who commands Wainwright.
    As Senator Domenici said to us, we have had some real fine 
trips here in the last year or so, and a lot of them have been 
to places under your command, and we are ex-Army people. I was 
Army Air Corps, he was Army, but when you look at the people we 
have got out there, they are fine people, and we are really 
delighted.

                           Retirement system

    The only thing I have got to tell you that we ran into that 
I am still trying to study was that buzz-saw on retirement, and 
we are dedicated to try and find some way to correct that if it 
was an error. I do not know yet whether it was an error, but I 
have talked to members of the Armed Services Committee about 
that.
    This concept came at us through an e-mail. That also was 
enlightening, that almost every tent had an e-mail outlet. Now, 
that is a new Army, General.
    But they were all waving this one little bulletin that came 
out of, was it Fort Meade? But it was very critical to the 
policies of Congress and alerted people in the Army to the fact 
that there had been a change.
    That change was made several years ago, as you know. I do 
not know if you all have some recommendations for me. If you 
have any recommendations for us as to how to fix that problem--
we do not want that problem of retirement to seep in and give 
you all the kind of morale problems we found in Kuwait and 
Saudi Arabia, so keep us informed if there is something we can 
do, General.
    General Reimer. Mr. Chairman, may I just say, on that 
specific issue, you are absolutely correct, and to refer to a 
comment made earlier, we do a sample survey of military 
personnel in the Army each year to really get at this morale 
issue and how people are feeling. The retirement system is the 
fastest growing area of dissatisfaction there.
    There are three retirement systems in effect for military 
personnel right now. I am under one. There is another one for 
people that are a lot younger than me, and the one that you are 
referring to I think went into effect in 1986.
    Senator Stevens. I was the author of that, the Federal 
employee retirement system.
    General Reimer. The first one is a very good retirement 
system, I think, but I think there is a great deal of concern 
about the last retirement system, and it is the fastest growing 
area of dissatisfaction we see out there in terms of morale.
    Senator Stevens. Well, if you could get us some sort of 
information on it, we will do our best to see if we might 
confer with the Government Affairs Committee. As a matter of 
fact, three of us are on that committee, so we will confer with 
them and perhaps we can find a way in this year's bill to find 
a way to make those retirement systems into one and compatible, 
and pick up these people who think that they were harmed by 
coming in at the time they did.
    I did not understand it, because this one young man said he 
came in after this other fellow did, and he had a better 
retirement system under the new plan, and there was sort of a 
gap there in about 1987, I think it was, 1988, but I would like 
very much to pursue that and try to iron it out so that it does 
not eat into the morale that we saw was so good.
    Are there any questions, comments? Senator Cochran.
    Senator Cochran. Mr. Chairman, we did have a hearing on 
that the other day in our subcommittee that I chair. The 
Federal services comes under the jurisdiction of that 
subcommittee, but it was really on the civilian system, but it 
sounds like a similar problem on the military system, and I do 
not know that we have looked into that yet, so we ought to.
    Senator Stevens. That is why I said, I do not think we did. 
I saw that you were onto that. I congratulate you for that, 
too. There is a glitch on the civilian side, too.
    Senator Cochran. One other question I wanted to ask, and 
that has to do with this new Force XXI, the modernization. 
General Reimer in his statement makes, I think, one of the best 
most succinct statements about the challenge of the future.
    On page 13 in his statement he says:

    I cannot overestimate the risk we take by failing to 
modernize. The continuing threat of weapons proliferation can 
allow even no-tech nations to field high-tech armies in the 
flash of an arms deal.
    Though no nation may be capable of fielding a force that 
can compete with the United States in a conventional war, any 
nation can develop a niche capability that will cost American 
lives in a future conflict.

    I think that is not only eloquent, but it is also a 
challenge to all of us to realize and appreciate the importance 
of modernization, taking advantage of the emerging technologies 
of all kinds, whether we are talking about missile defense, 
communications, radar systems, all the rest, and how important 
it is for us to stay up to date, and that is the reason why we 
are so secure right now in terms of the safety of U.S. citizens 
and our interests abroad are fully protected, because we do 
have the best, most modern, most up-to-date armed force in the 
world, but we want to keep it that way.

                        Position location system

    One thing that is a part of this, I know, are your plans 
for position location reporting systems. There is one system 
that is an integral part, as described in your posture 
statement, of the future battlefield situation analysis.
    Would it be helpful for us to review this carefully to be 
sure that in each of these component systems we are providing 
the level of funding necessary to keep this whole process 
moving forward? That is something that could easily get 
overlooked, because there are so many acronyms and names of new 
things that you are putting into this battlefield management 
program for the future that I hope some of us do not overlook 
the importance of each one of these systems.
    One of them happens to be made in my State. I am kind of 
like Senator Bumpers. It got my attention when I saw that we 
were actually producing in the State of Mississippi one of 
these component parts, the enhanced position locating and 
reporting system, EPLRS, it is called.
    General Reimer. Senator, I think first of all that you are 
right; that is a fundamental change for the Army, and basically 
we set out to answer the questions: where am I, where are my 
buddies, and where is the enemy? We figure that if we could do 
that, then we could change the way we do operations on the 
battlefield and even during operations like Bosnia.
    That has turned out to be exactly what the experimentation 
has showed us. We have about $2.6 billion in that particular 
effort, but as you say, it is in small lines and kind of 
hidden. We will be glad to work with the committee staff to 
make sure that you understand what is in there and how 
important that is to our efforts to modernize the force, the 
digitization of the force, as we call it.
    Senator Cochran. Thank you very much.
    Senator Stevens. Mr. Secretary and General----
    Senator Domenici. Could I make one observation?
    Senator Stevens. Yes.

                        Recruiting and retention

    Senator Domenici. Mr. Chairman and the two witnesses, I 
just want to give you an observation regarding recruiting and 
retention.
    Frankly, we are putting a lot of blame on you all for 
retention not being as good in some parts of the service as 
they were 5 or 6 years ago. I think the reality of it is that 
you are also in competition with a vibrant, powerful American 
economy, and the truth of the matter is, there are not so many 
kids 17 to 23 or 24 who cannot find good jobs, and there are 
those in the military who are being offered spectacular jobs if 
they get out and take them.
    And I think that is why it is important that you look at 
whether our pay is correct, whether our benefits are adequate, 
because we do want America's economy to go on for another 5 or 
6 years without a recession. That is not going to make your 
jobs any easier, but we surely are not going to have a 
recession to help you recruit. You understand that.
    Mr. Walker. Senator, thank you for making that comment, 
because it is difficult out there just for the reason you 
mentioned. Even McDonald's provides funding, money for college 
for people who come to work for them now, young people come to 
work for them. That is amazing competition we have out there, 
so you make a very important point.
    Senator Domenici. Thank you.

                           Medical technology

    Senator Stevens. We are trying to compete with that right 
up here, as a matter of fact.
    Gentlemen, I have a few rabbit trails I pursue, and one of 
them is medical technology. Now, out there at Walter Reed there 
is an angiocat. General, your wife is here, so I do not want to 
ask you if you have been there, but I want to urge you to go 
there and go through that, and you, too, Mr. Secretary, because 
we are working on angiocat 2.
    Now, the angiocat 2 is designed for the battlefield if it 
comes through, and the two of us have a great interest in that, 
personal interest in that, and we want to see that there is an 
understanding in the military where that medical technology is 
going in order to try and care for a person that is wounded in 
a modern-day battlefield, the speed with which they have to be 
handled, and that angiocat 2 can do it.
    But in order to understand angiocat 2, you have got to 
understand what angiocat 1 does, and then to see what a new 
version of that would do in the battlefield structure, so I 
would urge you to do it. As a matter of fact, I went out there 
and went through it myself. I went out there to California, and 
went through it where it was made.
    But it does seem to me that this is a technology now that 
even in terms of the first version is dealing with preventative 
medicine for the military, and we ought to get ahead of the 
curve and not just treat the people after they get sick.
    This thing can give you an advanced knowledge of what is 
coming, and we almost ought to send everybody through it before 
they are deployed overseas.
    It is like my wife's father said, ``be sure she gets her 
teeth fixed before you get married''? You ought to take care of 
these guys before they go over. You ought to take care of them, 
and that angiocat process could do it.
    So if we can get the time down, where it is the timeframe 
you can spend to send them through--you literally, on the 
angiocat 2 it takes 90 seconds. This takes 15 to 20 minutes, 
but still, it is a worthwhile thing.
    And I would urge you, pursue it and help us make certain 
that it is the tool that we believe it will be for the future 
in dealing with the military, and when we are talking about the 
military, we are primarily talking about the Army in terms of 
the kind of wounds that your people will get, God forbid we get 
into another conflict.

                     Additional committee questions

    We do appreciate you being here today, gentlemen. It is 
something we look forward to.
    Mr. Secretary, we thank you for your help, and General, it 
is always a pleasure. Thank you very much.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted to Hon. Robert M. Walker
               Questions Submitted by Senator Ted Stevens
                          prime vendor support
    Question. I understand that the Apache program may have to ``buy 
its way out'' of the current depot and base maintenance structure in 
order to move to Prime Vendor Support (PVS). Can you tell us how much 
``revenue'' Apache bases will lose under PVS and how much it may 
``cost'' Apache?
    Answer. There are no planned changes to supply and maintenance 
procedures at the base level except that the required repair parts will 
be issued free to Apache units under the proposed PVS contract. Under 
PVS, flying hour dollars for parts will no longer go to the 
installation, but will be used to fund the PVS contract. All other 
field-level funding remains the same. If the PVS program is 
implemented, we anticipate significant savings to the Apache program.
    Question. How would Congress be notified of substantial 
modernization efforts started under the Apache PVS contract?
    Answer. It is the intent of the Army to maintain continuous 
communications with Congress. Before any PVS contract is signed, 
Congress will be notified via an Information for Member of Congress 
memorandum as to why the Army is awarding the contract and what 
modernization activities are planned. PVS specifically requires the 
contractor to operate within the firm fixed price of the contract and 
not to expand the performance. Future modernization efforts are an 
integral part of the basic contract and will be funded within the 
negotiated price of the contract. The proposed contract includes 
incentives, including loss of profit if planned modernization efforts 
are not completed.
    Question. How would the Army pay for cost overruns on PVS 
modernization efforts? Would the Army turn to the Congress or other 
Operations and Maintenance programs?
    Answer. The proposed contract is a firm fixed price contract to 
include the planned modernization efforts. Any cost of overruns will be 
borne by the contractor and would not impact any other appropriations.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                               priorities
    Question. In its Department of Defense Authorization bill, the 
Senate Armed Services Committee added about $315 million for ``Base 
Support'' and ``Maintenance of Real Property'' in the Army Operations 
and Maintenance account, and it added about $300 million for additional 
trucks and helicopters in the Army Procurement account. Do these add-
ons represent the Army's highest priorities in the 1999 budget?
    Answer. The Army's top unfunded requirement remains the $1,390 
million for fiscal year 1999 Bosnia contingency operations. However, 
this past March, a list of the Army's fiscal year 1999 unfunded 
priorities was forwarded to the committee chairman. That list focused 
on our top priority of readiness and included unfunded requirements for 
Base Support, Real Property Maintenance, trucks, and helicopters.
    Question. If this committee finds funds to add to the President's 
request for the Army, where do you recommend we put that money? Real 
readiness issues such as training and spare parts? Quality of life 
issues? Which quality of life issues?
    Answer. In March, the Army submitted to the committee a list of its 
top fiscal year 1999 unfunded priorities. The top five issues support 
Total Army readiness and include: fiscal year 1999 Contingency 
Operations; Army National Guard Military Technicians; Total Army Real 
Property Maintenance; Total Army Base Operations Support; and Army 
National Guard/U.S. Army Reserve Operating Tempo.
    The unfunded priority list was based on some up-front assumptions. 
First, the fiscal year 1999 budget amendment must include new funding 
to pay for on-going contingency operations in Bosnia. Second, the 
Army's fiscal year 1999 budget would be funded in the categories we 
requested. If these assumptions hold, the Army's first use of 
additional funding will be to resource near term readiness shortfalls 
in training and maintenance.
                             privatization
    Question. What savings does the Army plan from contracting out for 
1999 and 1999-2003?
    Answer. The competitive sourcing initiative is programmed to 
achieve net savings of over $1 billion during fiscal years 1999-2003 by 
conducting A-76 studies of approximately 48,000 civilian and 8,000 
military commercial activity-type positions. The Army expects to 
generate gross savings of $48 million in fiscal year 1999. These 
programmed savings are based on a 20 percent reduction of the spaces 
studied along with the associated salary dollars.
    Question. How did the Army arrive at the number of civilian and 
military jobs to be eliminated and/or contracted out?
    Answer. The Office of the Secretary of Defense provided programming 
guidance. The guidance governing competitive sourcing directed the 
services to program a minimum 20 percent reduction in civilian end-
strength and dollars. The Army elected to use Circular A-76, 
Performance of Commercial Activities, as its tool to achieve directed 
cuts.
    Question. Were specific, individual studies performed to analyze 
the savings and appropriateness of activities to compete? Or, was a 
goal imposed ``from the top?''
    Answer. In 1995, the Commission on Roles and Missions recommended 
all non-core support activities be outsourced. In its August 1996 
report, the Defense Science Board Task Force on Outsourcing and 
Privatization recommended the Department of Defense establish a goal of 
shifting dollars savings achieved through competitive sourcing from 
defense support activities to modernization. Finally, the Quadrennial 
Defense Review, in a report released in May of 1997, directed cuts be 
programmed in the fiscal year 1999-2003 Program Objective Memorandum.
    Question. How did the Army determine that contracting out saves 20 
percent? Why does the Air Force assume different savings? Please 
provide copies of the analysis you performed to come to the conclusion 
that 20 percent was the right number.
    Answer. The 20 percent savings figure was not the product of a 
written analysis. The fiscal year 1999-2003 program guidance directed a 
minimum 20 percent reduction of the spaces studied along with the 
associated salary dollars. Historically, average savings based on 
winning contractor or in-house bid versus pre-study cost has been 
approximately 28 percent. Given previous and competing initiatives to 
reduce the civilian workforce, the Army viewed 20 percent a more 
conservative savings factor.
    Question. With fewer military personnel and DOD civilians after all 
this contracting out, what will be the impact on overseas rotations and 
``perstempo'' problems?
    Answer. Rotation and personnel tempo problems related to 
competitive sourcing are minimal, because the Army has so few overseas 
military positions for which rotation base positions have to be 
preserved.
    Question. How will the Army monitor and document the progress in 
achieving your outsourcing programs and achieving the planned savings? 
Will these data be confirmed by an outside party?
    Answer. The Army is developing a database that will track the 
outcome of these commercial activities studies to validate savings. In 
the interim, we have asked the Army Audit Agency to validate savings. 
The Army also receives reports on study progress regularly from its 
field commands. Savings are documented on cost comparison forms which 
reflect the results of each study. While the Army has not requested an 
outside agency to review future A-76 results, historically, many such 
reviews have been conducted. In fact, the Government Accounting Office 
is currently reviewing the Department of Defense's past A-76 efforts 
and future A-76 plans.
    Question. What actions do you plan if the savings do not 
materialize as planned? More outsourcing? Cuts in procurement? Force 
structure? Readiness?
    Answer. If the savings are not achieved, funding planned for 
additional modernization programs will be delayed or an equivalent 
savings will be achieved through economies and efficiencies in other 
areas. However, we expect to achieve savings as planned, because our 
projections are more conservative than the average savings achieved by 
the Army and by the Department of Defense in the past. Specifically, we 
have programmed 20 percent savings compared to the historical average 
of 28 percent savings. During the last several years, as we have 
emphasized the savings that competitive sourcing can produce, we have 
allowed our commanders to make the local decisions on which specific 
commercial activity functions to study. They are in the best position 
to know what makes sense to compete and when, supporting readiness as 
our number one priority. In separate actions, the Army is already 
reducing military manpower from 495,000 to 480,000 to comply with 
Quadrennial Defense Review decisions.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                          civilian reductions
    Question. Mr. Secretary, over the past decade the Army has cut its 
civilian workforce by 166,000 people. Many of these cuts were related 
to base closings. Over the next five years, you plan to cut another 
21,000 jobs unrelated to base closure. Already there are some members 
of Congress requesting that civilians should not be cut from their 
particular bases. How do you suggest we respond to these requests?
    Answer. Reductions in the budget translate to reductions in 
civilian manpower. As we face budget reductions and must shift some 
resources to modernization programs, we look to efficiencies in 
performing the mission. These efficiencies are based on decreases in 
workload or sometimes outsourcing a function if cost effective through 
a competitive process. Other adjustments in workload and work force are 
made based on changes in force structure.
    Question. Mr. Secretary, I have been on the Appropriations 
Committee for nearly 30 years, and I cannot recall another occasion in 
which a department was cutting its workforce this year below 
congressionally approved levels in anticipation of future cuts. Would 
you explain to me, from your position, why this is Army policy?
    Answer. Army is aligning the workforce to missions and funding 
levels. We provide Commanders some flexibility in the year of execution 
to meet mission requirements by increasing or reducing personnel 
strengths not submitted in the budget. Commanders in the field from 
time to time must re-balance resources in order to protect readiness 
and soldier quality of life. It is this re-balancing to which you are 
probably referring.
                                comanche
    Question. The Comanche program and its forerunner, the LHX, have 
been in development for 15 years. What possible rationale can you 
provide for this, and why should we continue to fund its development 
for the next eight years to begin production?
    Answer. The Comanche program has undergone a number of externally 
imposed restructures over the years. What has not changed is the Army's 
critical battlefield deficiency of armed reconnaissance. Comanche is 
key to Army modernization and will replace the Vietnam-era AH-1 Cobra 
and OH-58A/C aircraft with a survivable, versatile, lethal, and 
deployable armed reconnaissance aircraft to meet that critical 
battlefield deficiency.
                   theater high altitude area defense
    Question. Last week, the Theater High Altitude Area Defense (THAAD) 
missile missed its fifth consecutive target. Have you examined this 
program, its schedule risk to consider whether it might make sense to 
require it to hit targets more than once before we should buy the 
missiles?
    Answer. We are presently looking at several options, one which 
includes executing the User Operational Evaluation System (UOES) 
contingency option after two intercepts, and other options that include 
conducting additional testing on risk reduction missiles. We will 
present our options to the Department of Defense (DOD) at the 
Overarching Integrated Product Team (OIPT) meeting this summer. The 
OIPT will reach a consensus regarding how many intercepts will be 
considered adequate to execute the UOES missile contingency option or 
whether additional risk reduction testing is necessary to reduce 
procurement risk.
    Question. Would you support a policy where DOD did not buy any of 
these advanced ``hit-to-kill'' missile defense systems until it had 
demonstrated repeated successes in actual flight testing?
    Answer. Current ``hit-to-kill'' missile defense systems require 
demonstrating repeated successes in actual flight testing prior to 
entering the Engineering and Manufacturing Development (EMD) 
acquisition life cycle phase. For example, the THAAD program's current 
requirement is to demonstrate three successes in actual flight testing 
prior to entering the EMD phase.
            joint stars data link system improvement program
    Question. I am told that the Joint Surveillance Target Attack Radar 
System (STARS) aircraft relies on the Surveillance Control Data Link 
(SCDL) to pass information between the aircraft and ground stations. 
Can you tell me if the Army is planning to upgrade this data link and 
whether there would be significant cost savings by implementing this 
modernization at a faster pace?
    Answer. The Army began the SCDL System Improvement Program (SIP-1) 
in fiscal year 1996 with $1 million to solve the Disappearing Military 
Suppliers (obsolete parts) problem by converting digital circuit boards 
to modern software-based Field Programmable Gate Array (FPGA) boards. 
Additionally, other technology was inserted to reduce production costs. 
SIP-2 began in fiscal year 1997 with $12 million and continues the 
modernization effort by converting all air and ground digital boards to 
FPGA boards. SIP-2 completion is scheduled for January 1999. SIP-3 is 
scheduled to begin in fiscal year 2000, but $16 million in fiscal year 
1999 would accelerate the start by one year, immediately follow SIP-2, 
and result in an $84 million life cycle cost savings versus $70 
million. SIP-3 will provide a higher data rate SCDL needed for the 
Joint STARS Radar Technology Insertion Program and reduce the size and 
weight of the SCDL Ground Data Terminal, allowing the addition of new 
sensor and communications systems to the Joint STARS Common Ground 
Station.
                                 ______
                                 
              Questions Submitted to Gen. Dennis J. Reimer
               Questions Submitted by Senator Ted Stevens
                              digitization
    Question. Will the entire Army eventually be digitized, or will 
digitization efforts focus on providing a ``digital backbone?'' Which 
modernization programs are now being considered as key division assets?
    Answer. To achieve the goal of Army XXI by the year 2010 (in 
accordance with Joint Vision 2010), nearly all of the Total Army will 
be digitized. All Active component units and a significant number of 
Reserve component (Army National Guard and Army Reserve) units will be 
digitized by 2010. This equates to five heavy divisions, one composite 
division, four light divisions, one armored cavalry regiment, one light 
cavalry regiment, four corps headquarters and corps troops (most 
Reserve component units to be digitized by 2010 fit into this 
category), the training base, and the Army and Commander-in-Chief 
headquarters.
    The Reserve component slice will be fielded with their Active 
counterpart units, primarily combat support and combat service support 
units, but also some combat arms units such as Field Artillery and Air 
Defense Artillery. Current plans call for the Army National Guard 
Enhanced Separate Brigades to be digitized with the ``backbone'' 
systems and Force XXI Battle Command Brigade and Below (FBCB\2\)/
Applique by 2012, with most units fielded by 2010.
    The Army does have a ``digital backbone.'' These systems are the 
eleven Category 1 Digital Systems: they consist of the five Army 
Tactical Command and Control Systems, FBCB\2\/Applique, and five 
communications systems (most make up the Tactical Internet). A 
digitized division must be fielded with these eleven systems as a 
minimum to be considered a ``digitized'' unit. U.S. Army Training and 
Doctrine Command has also developed a draft list of Category 1 Systems 
for Light Units.
    The ``digital backbone'' described above and a select number of 
modernization systems are considered key division assets. The 
modernization systems include: the M1A2 System Enhancement Program tank 
and M2/M3A3 Bradley Fighting Vehicle with embedded FBCB\2\ or the M1A1D 
and M2A2 Operation Desert Storm configuration; FBCB\2\; Maneuver 
Control System; All Source Analysis System; Advanced Field Artillery 
Tactical Data Systems; Forward Area Air Defense Command and Control; 
and Combat Service Support Control System.
    Question. Will upgrades of Abrams tanks be continued beyond the 
current multiyear contract?
    Answer. The current multiyear ends in fiscal year 2000. The fiscal 
year 1999 President's budget includes funding for a follow-on three-
year multiyear procurement for an average of about 95 Abrams upgrades 
per year. Advance procurement for the next multiyear begins in fiscal 
year 2000, and the last procurement year is fiscal year 2003.
    Question. Will the new command and control vehicle, the C2V, 
program continue under the current plan?
    Answer. The Army fully supports the fiscal year 1999 President's 
budget request for the C2V program. In fiscal year 1999, the Army will 
fund $46.7 million, which will procure ten C2V's. These C2V's will be 
fielded to the 4th Infantry Division.
    The C2V provides the Army an essential global communications and 
command and control platform. The C2V enables commanders and their 
staffs to rapidly assimilate the Army's Battle Command Systems into a 
single node to plan and execute heavy force operations on the digital 
battlefield. The capabilities and unique features of the C2V far exceed 
the capabilities of the current M577 Command Post Vehicle.
    The C2V is in its second year of Low Rate Initial Production. The 
program is on schedule and within budget. We used five C2V's during our 
Brigade Task Force XXI Advanced Warfighting Experiment (AWE). The AWE 
validated the critical need for the C2V.
    Unfortunately, total Army budgetary constraints have forced the 
Army to consider restructuring the C2V program. The planned program 
represented in the fiscal year 1999 President's budget buys 439 C2V's, 
which will field it to all Active heavy units, war reserves, and the 
training base. Although we would like to continue with the program in 
its current form, a restructuring would allow the Army to pay for other 
urgently needed programs. An alternative under consideration will 
provide C2V's to the Army's First Digital Corps only.
             army national guard integration pilot program
    Question. General Reimer, I understand that the Army is initiating 
a pilot program called Agile Warrior. Would you explain the concept and 
explain how it will improve integration between the Active Army and the 
Army National Guard?
    Answer. While still in the development phase, the Divisional 
Teaming pilot program (previously known as ``Agile Warrior'') will pair 
selected Active and National Guard combat divisions in a relationship 
that will cover the entire spectrum of Army operations. Under the 
Divisional Teaming concept, partnered divisions will conduct joint 
planning, training, and readiness assessments. When called upon to 
support operational requirements, the divisions will team their 
resources for rapid response. The Army National Guard will augment and 
assist its partnered command, speeding deployment of the Active 
division and then conducting their own follow-on, post-mobilization 
preparations. In the event of domestic emergencies or homeland defense, 
the Active division will be prepared to supplement and reinforce the 
Army National Guard division's lead. Integration will be greatly 
enhanced as the divisions work together accomplishing specific 
missions. Through the Divisional Teaming partnership, both units will 
benefit, and the Army's capability to respond across the full spectrum 
of military operations will be greatly enhanced.
    Question. How many units will be assigned under this concept 
initially?
    Answer. The specific number of divisions to be teamed under the 
initial phase of the Divisional Teaming program is still being 
determined.
    Question. If this pilot program is successful, will all Army 
divisional forces be aligned in this manner?
    Answer. Yes. If the pilot program is successful, the intent is to 
establish a teaming relationship between all eight Army National Guard 
divisions and eight of ten Active component divisions.
                                 ______
                                 
            Questions Submitted by Senator Pete V. Domenici
                               readiness
    Question. How do you survey people leaving the Army, and those 
staying?
    Answer. The Army uses the same Army-wide survey (the semi-annual 
Sample Survey of Military Personnel (SSMP)) for both those leaving the 
Army and those staying in the Active component. This approach allows 
the Army to compare the responses of those who are thinking about or 
definitely plan on leaving the Army with those who are planning to stay 
past their current obligation and/or to retirement.
    Question. Do you use ``blind,'' anonymous surveys or face-to-face 
meetings with commanders.
    Answer. The SSMP is an anonymous survey, printed on optical scan 
paper to facilitate transferring the responses from each soldier to a 
data file for analysis. The soldier places the completed survey in an 
envelope, seals it, and returns it to the person who distributed the 
survey or mails it directly to the Army's central survey processing 
point.
    At the unit level, commanders conduct informal exit interviews with 
soldiers who are leaving. The results of these interviews usually are 
not sent to a central collection point.
    Question. Why would you trust data on these issues if they are 
based on face-to-face interviews?
    Answer. The face-to-face interviews with commanders permits 
departing soldiers to point out strengths and weaknesses of the unit, 
without having to be concerned with the potential impact the comments 
might have on their future careers. Conducting the interviews 
immediately before the soldier leaves the unit is one way of 
encouraging candid comments. Usually, no ``data'' or results are 
compiled on the basis of these interviews. For commanders, the 
interviews are one of many tools used to assess the status of their 
units.
    Question. Do you collect and retain survey data? Please provide the 
results from this data.
    Answer. The Army Personnel Survey Office (APSO) at the U.S. Army 
Research Institute for the Behavioral and Social Sciences is 
responsible for conducting the SSMP, analyzing the data, and reporting 
the findings to Army activities sponsoring selected survey topics as 
well as to top Army leaders. For some topics, APSO has trend data 
dating back to the mid-1980's. Below is a table reporting the percent 
of officers and enlisted personnel who are satisfied with various 
aspects of their Army jobs and the quality of life in the Army from 
surveys taken over that last four years.

 
                                                                                          [In percent]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Officers (percent satisfied, very satisfied)                Enlisted Officers (percent satisfied, very satisfied)
                                                                 -------------------------------------------------------------------------------------------------------------------------------
                                                                  S 1994  F 1994  S 1995  F 1995  S 1996  F 1996  S 1997  F 1997  S 1994  F 1994  S 1995  F 1995  S 1996  F 1996  S 1997  F 1997
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Access to education/training....................................    68.9    68.7    67.6    68.1    70.4    71.2    70.4    69.8    56.0    58.7    54.3    54.2    57.2    54.3    58.7    59.7
Amount of enjoyment from my job.................................    78.1    77.9    77.7    75.7    78.5    77.3    77.3    76.6    60.6    61.6    59.6    57.3    60.5    59.1    61.2    62.1
Amount of equipment/supplies....................................    54.7    51.5    54.3    54.1    56.8    54.9    56.1    54.0    39.1    41.1    39.5    38.7    41.0    38.8    42.9    39.9
Amount of paperwork.............................................    37.7    35.7    35.5    37.3    40.1    38.6    38.6    38.9    53.7    54.8    53.6    53.4    57.0    53.0    56.0    55.2
Amount of pay (basic)...........................................    65.4    61.5    61.4    62.3    61.9    61.0    61.3    58.1    33.1    29.3    29.2    28.1    30.9    28.3    28.9    27.3
Amount of personnel available to do work........................    38.2    34.9    33.5    33.3    33.7    32.5    29.9    32.3    40.5    41.3    36.0    35.0    35.7    33.5    35.9    39.2
Amount of regulation and discipline.............................    72.2    72.4    71.1    71.1    70.9    70.5    67.6    68.3    63.5    63.2    61.8    60.4    63.6    58.9    61.1    59.2
Amount of respect from superiors................................    80.0    81.7    81.2    80.0    81.5    82.4    81.6    82.7    60.7    61.8    60.1    59.0    61.7    60.6    63.7    63.0
Amount of time separated from family............................    60.2    58.5    56.7    51.5    54.0    50.7    51.9    52.8    42.0    45.6    40.2    38.8    40.3    39.1    39.4    40.2
Amount of VHA/COLA..............................................    50.2    45.1    48.0    54.7    49.9    49.5    49.7    46.7    37.9    36.8    37.3    38.1    38.4    37.5    38.4    33.2
Assignment to leadership jobs...................................    80.5    80.1    79.5    79.0    80.2    81.7    79.9    79.1    62.0    62.6    62.5    61.0    63.5    63.1    64.1    64.0
Assignments to jobs offering tech/prof development..............    73.3    73.1    71.6    71.4    72.4    71.7    72.0    72.1    47.9    48.8    47.5    45.2    49.0    46.6    48.2    50.7
Availability of Army family programs............................    74.1    73.5    75.0    74.3    76.1    76.7    76.0    74.8    67.3    67.5    65.6    65.2    65.4    67.3    64.4    66.1
Availability of family dental care..............................    25.7    27.1    30.4    33.4    32.6    33.3    37.3    36.7    37.9    39.4    38.0    39.3    40.2    39.7    45.0    44.9
Availability of family medical care.............................    35.0    32.8    33.6    38.6    39.7    38.7    40.2    40.7    43.4    43.8    42.0    44.2    44.8    41.7    48.8    45.0
Availability of government housing..............................    37.9    36.0    32.8    39.4    35.8    37.7    37.6    38.5    29.2    32.2    28.0    30.7    35.2    29.8    37.1    36.4
Commissary......................................................    81.4    80.8    81.9    81.4    81.1    80.5    81.6    81.7    80.6    78.5    77.9    80.0    78.3    77.1    79.1    78.2
Compensation for PCS moves......................................    48.5    54.1    51.5    51.6    53.6    52.8    56.2    55.0    50.4    51.5    44.6    47.3    50.4    48.9    51.6    48.8
Control over my job assignments.................................    54.5    54.4    52.2    52.8    54.7    55.4    52.9    54.0    43.5    45.5    41.5    40.3    40.6    41.7    43.5    43.2
Dependent schools (DODDS).......................................    69.6    71.3    69.2    68.0    71.6    73.3    67.5    68.6    66.7    68.8    69.2    66.0    67.1    66.5    65.8    64.5
Fairness of married vs. single pay..............................    77.9    76.8    76.7    76.0    79.2    77.9    79.6    76.8    54.9    52.9    52.5    53.3    55.8    53.8    54.5    53.2
Geographic location of jobs.....................................    80.7    81.2    79.3    79.9    78.7    78.7    78.3    78.4    69.4    70.5    67.8    68.8    68.3    68.1    69.4    70.4
Job security....................................................    53.1    54.0    53.8    55.6    53.9    56.8    55.8    59.8    62.5    63.4    64.5    61.2    62.5    63.9    65.7    67.6
Length of working hours.........................................    65.8    63.6    62.8    58.0    62.1    62.0    61.6    60.1    61.9    62.4    59.1    57.0    61.3    59.9    61.4    63.2
Level of competence of co-workers...............................    78.9    79.8    78.4    77.2    78.8    79.3    77.3    77.2    62.9    63.8    60.5    58.1    61.7    60.2    60.7    60.1
Level of competence of supervisors..............................    77.3    79.3    77.7    77.2    78.6    80.4    77.8    80.4    62.5    63.8    61.2    59.9    63.8    63.8    64.8    64.5
Level of educational benefits...................................    68.9    68.1    68.5    69.8    72.9    71.1    71.4    70.7    59.7    57.2    57.4    55.9    62.0    59.6    61.6    61.4
Level of fairness in how my performance is eval.................    74.1    73.5    73.1    72.6    73.9    76.2    76.8    78.1    65.0    65.3    64.5    61.7    65.8    64.6    66.2    64.8
Level of job fulfillment/challenge..............................    79.8    78.5    79.8    77.3    80.2    79.8    78.3    78.6    60.5    62.8    61.2    60.5    62.2    60.5    62.1    62.5
Level of recognition for my accomplishments.....................    69.3    68.2    69.1    70.5    70.2    73.1    71.7    72.1    47.2    47.8    45.8    43.5    47.0    46.9    50.3    49.6
Living conditions overseas......................................    65.7    63.0    63.5    60.1    63.5    60.4    56.1    58.7    56.2    54.2    53.2    51.6    50.4    52.4    48.9    49.7
Living conditions stateside.....................................    76.9    72.0    71.8    72.9    71.4    69.3    70.9    70.1    54.1    55.0    50.6    51.6    54.9    53.5    56.1    55.1
Number of PCS relocations.......................................    72.0    72.3    69.1    69.2    70.0    67.3    68.1    68.0    60.9    62.3    57.8    59.3    63.5    59.4    60.2    61.6
Number of quick response tasks..................................    45.0    41.8    41.5    39.9    43.6    41.8    40.7    42.2    56.2    56.5    55.4    53.9    56.3    55.1    56.1    55.4
Opportunity to select a job, training, or station...............    55.1    56.8    54.6    54.7    54.8    56.5    55.0    55.2    30.0    32.5    28.4    30.2    30.3    30.1    32.8    32.2
Overall quality of Army life....................................    74.5    71.2    70.8    68.1    72.3    71.1    68.4    68.7    54.7    53.1    53.0    48.6    52.5    52.4    52.2    53.0
Overseas duty...................................................    82.0    81.9    81.4    81.9    82.2    82.6    80.4    81.5    67.7    70.0    67.5    69.9    69.7    66.9    68.8    68.5
Post Exchange (PX)..............................................    75.2    75.5    73.2    70.9    72.4    72.7    73.7    73.5    75.3    71.4    70.9    71.7    70.8    71.8    72.4    72.7
Promotion/advancement opportunities.............................    71.5    71.8    70.8    69.4    68.4    69.6    71.4    71.5    46.4    48.0    44.5    40.5    42.2    45.0    50.2    51.4
Quality of Army family programs.................................    74.1    73.5    74.0    73.4    75.1    76.7    74.7    74.3    66.8    66.1    64.7    63.4    63.8    65.7    64.3    63.7
Quality of equipment/supplies...................................    63.1    60.5    61.9    60.5    62.6    61.7    60.7    60.5    43.8    44.9    42.9    41.7    44.3    41.2    45.4    43.8
Quality of family dental care...................................    40.7    40.1    42.1    45.5    44.3    42.9    46.8    46.0    42.4    44.5    42.0    41.9    42.3    42.5    47.4    47.7
Quality of family medical care..................................    44.7    42.6    42.5    48.9    48.8    47.3    46.4    46.0    44.5    45.5    43.7    44.5    46.3    42.1    47.8    43.6
Quality of government housing...................................    50.0    45.8    39.7    41.0    42.1    40.2    41.5    40.1    46.8    44.5    40.7    42.7    46.2    43.3    43.2    45.2
Quality of leadership at your place of duty.....................    71.7    73.5    71.7    70.6    71.4    73.8    71.2    74.7    53.6    54.9    52.7    51.7    53.4    54.3    56.4    56.5
Quality of military dental care.................................    69.7    68.7    69.5    71.9    72.3    71.5    70.7    70.8    63.7    65.4    64.4    66.0    65.5    61.7    68.7    66.9
Quality of military medical care................................    59.1    56.5    56.0    60.9    62.1    61.6    53.8    53.2    50.5    50.3    50.2    50.3    53.6    49.3    51.5    46.9
Quality of recreational services................................    85.9    85.8    84.9    84.1    83.0    83.2    84.3    82.5    78.1    77.1    77.7    76.2    76.3    76.4    76.8    75.4
Retirement benefits.............................................    51.7    51.8    48.4    44.8    48.7    44.4    39.0    38.5    42.0    40.5    38.5    32.5    32.9    33.1    28.1    28.3
Special pay (such as bonuses)...................................    56.5    53.7    55.1    55.4    58.1    57.1    53.4    49.2    34.2    34.9    33.8    32.0    35.9    33.4    35.0    33.1
Spouse career/work opportunities................................    46.6    45.8    47.7    45.2    45.7    44.6    47.3    46.0    42.2    43.9    39.8    38.5    40.6    40.3    40.7    42.8
Use of my skills and training on the job........................    77.8    76.3    77.5    74.6    77.3    77.6    75.8    75.8    63.8    64.5    63.4    61.8    64.0    63.8    64.4    64.0
Youth services..................................................    79.9    80.8    81.2    80.0    82.3    81.8    79.9    78.6    78.7    76.0    77.7    77.2    78.4    78.9    72.7    72.8
Availability of recreational services...........................  ......  ......  ......  ......    81.6    81.4    81.2    80.0  ......  ......  ......  ......    75.4    75.3    75.2    74.0
Army Child Care Programs........................................  ......  ......  ......  ......  ......  ......    67.8    65.2  ......  ......  ......  ......  ......  ......    56.0    55.8
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    Question. What do your latest 1998 data show about retention of 
basic infantrymen, mechanics, cooks, and pilots? Is it getting better 
or worse? Is it better or worse for married personnel? With families? 
What are the socio-economic profiles of the people leaving? Staying?
    Answer. Retention data through the first half of fiscal year 1998 
shows overall retention in the requested specialties to be at or above 
fiscal year 1997 levels. Rates for first-term infantrymen averaged 47.9 
percent from fiscal year 1994-96, but dipped to 44.2 percent in fiscal 
year 1997. They have rebounded to 49.5 percent thus far in fiscal year 
1998. This is largely attributable to increasing the reenlistment bonus 
for infantry during fiscal year 1997 at an additional cost of $14 
million per year. Rates for mid-career (reenlisted once with 10 or less 
years service) infantry soldiers have risen from 72 percent for fiscal 
year 1994-96 to 75 percent for fiscal year 1997 and fiscal year 1998 to 
date.
    Retention for cooks has remained well above Army averages in all 
categories from fiscal year 1994-97. However, there has been a decline 
in cook retention in fiscal year 1998, compared to fiscal year 1997. 
Retention rates for first-term cooks were 62 percent in fiscal year 
1997, compared with 56 percent in fiscal year 1998. Mid-career rates 
have fallen from 79 percent in fiscal year 1997 to 74 percent in fiscal 
year 1998. It is still too early to tell if this trend is the beginning 
of a steady decline or due to other factors.
    Mechanic retention for both first-termers and mid-careerists fell 
substantially during fiscal year 1995 and fiscal year 1996, 
attributable to budget forced promotion slowdowns, bonus reductions and 
a strong economy. Mechanic retention rebounded in fiscal year 1997 and 
in fiscal year 1998. Critical mechanic skills were added to the 
reenlistment bonus program in fiscal year 1997 and remain for fiscal 
year 1998. Mechanics will remain in the bonus program as a hedge 
against future losses impacted by the availability of civilian 
employment. Fiscal year 1997 first-term rate was 52 percent, compared 
with a 47 percent rate for fiscal year 1994-96. The fiscal year 1998 
rate is 54 percent. Mid-career rates show similar trends.
    Pilot retention has remained consistent since fiscal year 1994; 
however, under accessioning from fiscal year 1995-97 and opportunities 
for civilian employment have hampered readiness and retention. 
Anticipated pilot losses for fiscal year 1998 are 450-525, with 
accessions expected to be approximately 350. Pending bonuses for 
pilots, if approved, are expected to offset some losses.
    Retention of married soldiers with families has declined slightly 
since fiscal year 1995, particularly among frequently deployed 
soldiers. Minority soldiers have been reenlisting at rates (5-8 
percent) higher than white soldiers. Married soldiers cite spousal 
dissatisfaction and perceptions of benefit reductions as major reasons 
for leaving the Army. The socio-economic status of soldiers who depart 
is nonconclusive. Soldiers with marketable skills and higher aptitude 
capabilities have a higher loss rate than soldiers from lower aptitude 
groups.
    Question. What are the specific complaints of people leaving the 
Army?
    Answer. The Sample Survey of Military Personnel, conducted most 
recently during the fall of 1997, has identified the following as the 
most important reasons for soldiers thinking about or leaving the Army 
before retirement: amount of time separated from family; amount of 
enjoyment from job; amount of basic pay; overall quality of life in the 
Army; retirement benefits; and promotion/advancement opportunities.
    Question. What are the reasons for staying of the people who stay?
    Answer. The decision to stay in or leave the Army before retirement 
is very complex, including job satisfaction, quality of life, 
patriotism, and enjoyment of the Army way of life. Usually, there is no 
single reason for staying in, just as there usually is no single reason 
for wanting to leave the Army. However, the following are those aspects 
of the job and quality of life issues which have been rated highest in 
satisfaction according to the fall of 1997 Sample Survey of Military 
Personnel and are believed to contribute most heavily to a soldier's 
decision to stay in the Army:

      Officers
Amount of respect from superiors
Quality of recreational services
Commissary benefits
Overseas duty
Level of competence of supervisors
Availability of recreational services
Assignment to leadership jobs
Level of job fulfillment/challenge
Youth services
Geographic location of jobs
      Enlisted
Commissary benefits
Quality of recreational services
Availability of recreational services
Youth services
Post Exchanges benefits
Geographic location of jobs
Overseas duty
Job security
Quality of military dental care
Availability of Army family programs

    Question. Which of your ``quality of life'' programs are working? 
Which are not?
    Answer. All of the quality of life programs the Army offers are 
working. Soldiers' satisfaction with the availability and quality of 
family and recreation programs, as measured by the Army-wide Sample 
Survey of Military Personnel, remains high. The survey measures 55 
quality of life and job issues. Satisfaction with quality and 
availability of recreation programs ranks within the top five, and all 
morale, welfare and recreation (MWR) programs rank within the top 20. 
To maintain its consistently high ranking, Army MWR tailors its quality 
of life programs based on populations, locations, and trends. Each 
installation offers those programs from the Army-wide mix that its 
community demands. Commanders consider availability and accessibility 
of programs and services off the installation. Both installations and 
higher headquarters track new ideas to either modify existing programs 
or offer new programs to further improve quality of life. We are 
currently redesigning our teen programs to improve the quality of 
service, better meet the needs of our teens, and enhance program 
management. We are fielding an improved outdoor recreation program. We 
are also exploring ways to strengthen our fitness program with trained 
and certified fitness professionals, equipment standards, and 
centralized acquisition of equipment.
    Question. Which generate the best pay-off in terms of retention? 
Please provide the data and analysis to substantiate your answer, or 
are you using judgment or anecdotal evidence to assess the degrees of 
success or failure?
    Answer. We know of no studies in the Army or the other services 
that show which programs generate the best pay-off in terms of 
retention. The Walter Reed Army Institute of Research is conducting 
exploratory research using existing survey databases to determine 
program impacts on quality of life and retention. In 1996, Caliber 
Associates reviewed military and civilian literature for the Army. 
Their report, Morale, Welfare and Recreation (MWR) Programs and 
Readiness Links, presents findings from over 100 studies, mostly 
military, that tie MWR programs to ``commitment.'' Commitment is 
defined as the strength of an individual's identification with and 
involvement in the work organization, including allegiance, 
determination, and retention.
    Question. Does the Army have any studies of these issues? By 
independent organizations? Please provide copies.
    Answer. We have provided a copy of Caliber Associates' MWR Programs 
and Readiness Links separately to the committee. The report's 
bibliography lists the studies that Caliber Associates reviewed.
    Question. What changes have been occurring in spouse and child 
abuse for the past two years? Please differentiate between officers and 
enlisted, length of service, and among major military specialties and 
PERSTEMPO rates.
    Answer. The rate of substantiated spouse abuse incidents among 
enlisted soldiers declined from 12.2/1,000 in fiscal year 1996 to 10.9/
1,000 in fiscal year 1997. The rate among officers also declined from 
1.4/1,000 in fiscal year 1996 to 1.1/1,000 in fiscal year 1997. In the 
area of child abuse, the substantiation rate among enlisted soldiers 
was 8.2/1,000 in fiscal year 1996, and remained unchanged in fiscal 
year 1997. Among officers, the rate declined from 1.7/1,000 in fiscal 
year 1996 to 1.3/1,000 in fiscal year 1997. Given the limitations of 
the data we collect, we are unable to differentiate abuse based upon 
length of service, military occupational specialty (MOS), or PERSTEMPO 
rates presumably tied to MOS
    Question. What is the role of the current high PERSTEMPO in any 
changes in family abuse? Please provide copies of any analysis you have 
of the relationship.
    Answer. We are not aware of any research showing a statistically 
significant relationship between high PERSTEMPO and family violence.
                                 ______
                                 
            Questions Submitted by Senator Daniel K. Inouye
                          civilian reductions
    Question. General Reimer, last month I met with Army military 
leaders in Hawaii, and I learned that they are making large civilian 
cuts in their work force this year even though they have funding to pay 
them, but because they have been told by Army Headquarters that they 
won't have funding to keep them in 1999. Can you explain why 
Headquarters is mandating that these cuts be taken now to pay for 
shortfalls in the coming year.
    Answer. We are not mandating early reductions. The commanders are 
taking this action as the most effective and efficient way to use their 
resources to protect readiness and quality of life. Commanders are 
attempting to implement these reductions through voluntary separations 
to the maximum extent possible. Savings from the reductions are being 
put into other areas that are critical to accomplishing the commanders' 
missions.
                                comanche
    Question. General Reimer, 14 years ago the Army wanted to 
accelerate the development of the Comanche so that it would reach its 
initial operating capability in 1992. Obviously that didn't happen. It 
is now 1998, and we are still eight or nine years away from starting 
Comanche production. When do you now expect to have an initial 
operating capability, or the first operational unit in the field?
    Answer. Low Rate Initial Production will begin in 2004, and we will 
field the initial operating capability unit, a troop in the divisional 
cavalry squadron of the First Cavalry Division, Fort Hood, Texas, in 
December 2006. We plan to complete fielding the rest of the squadron by 
the end of 2007.
                                 ______
                                 
           Questions Submitted by Senator Ernest F. Hollings
                      army prepositioned equipment
    Question. The South Carolina (SC) National Guard believes it could 
less expensively and more efficiently manage the Army's prepositioned 
(PREPO) equipment in Charleston. I support the National Guard in this 
endeavor as this mission seems an ideal one for the National Guard. 
Therefore, I trust that you will insure that their proposal is heard 
and fairly evaluated as you seek a competitive maintainer of this 
important war reserve equipment.
    Answer. The Army will conduct a fair competition between private 
industry and the SC National Guard. The process will begin with a pre-
solicitation conference on July 1, 1998, for all interested parties as 
well as the SC National Guard. A final decision will be in accordance 
with contractual procedures governed by law.
                              medical care
    Question. I receive letters from retirees and active soldiers alike 
who are concerned that the promise of free, lifetime medical care is 
being broken. A recent letter from a Fort Jackson commander expressed 
concern that a shortage of doctors at the military hospital caused his 
troops to be treated off post, costing them money and taking them away 
from training for long periods of time. Retirees tell me that it is 
more difficult, and often impossible to receive treatment in military 
medical facilities.
    What is the Army doing to improve medical care for soldiers and 
retirees?
    Answer. The Army Medical Department (AMEDD) is concentrating 
considerable energy on a number of initiatives to improve medical care 
for soldiers and retirees, as well as for their families. These 
initiatives include the implementation and enhancement of TRICARE 
system-wide, and Army emphasis on health promotion to keep our people 
in an optimal state of health and fitness.
    TRICARE is now implemented nationwide and offers our beneficiaries 
access to a quality medical benefits package at a reasonable cost. All 
active duty soldiers are automatically enrolled in TRICARE Prime and, 
as always, are our top priority for care. When needed care is not 
available at nearby medical facilities, our soldiers are either 
referred to military medical centers or are assisted in obtaining care 
from local civilian providers, with full consideration of duty 
requirements and at no cost to the soldier.
    The Army has led the way in pursuing meaningful enhancements to the 
TRICARE program. Among these, we have succeeded in establishing family-
focused features, such as TRICARE portability and split enrollment, 
which assure continuity of the TRICARE Prime health benefit for all 
beneficiaries and reduce enrollment fees for our retired families. 
Also, those eligible under the Civilian Health and Medical Program for 
Uniformed Services may now elect to use the National Mail Order 
Pharmacy Program which offers very low cost prescription service when 
access to a nearby military pharmacy is not possible.
    The AMEDD is aggressively promoting real health preventive measures 
such as patient education, personal behavior changes, and early disease 
detection. Along with the other services, we have targeted alcohol 
consumption, accident prevention, and tobacco cessation as the 
centerpiece of our health promotion program.
    Although ``the promise of free, lifetime medical care'' is an 
understanding currently not supported by the Justice Department and the 
Courts, the AMEDD is doing everything possible to provide low cost 
quality medical care to all our beneficiaries. In cooperation with 
other Department of Defense elements, we have succeeded in obtaining 
Congressional authorization and Health Care Financing Administration 
(HCFA) cooperation to conduct a Medicare Subvention demonstration which 
we believe will provide the basis for extending military health care to 
our military retirees beyond their 65th birthday. Two of our Army 
demonstration sites, Madigan Army Medical Center and Brooke Army 
Medical Center, have recently undergone successful HCFA on-site 
certifications, and we anticipate initiation of the demonstration very 
soon.
 active component/army national guard integrated division headquarters
    Question. I want to again express my disappointment that the 
division headquarters of the National Guard division with brigades in 
North Carolina, South Carolina, and Georgia has been located in Fort 
Riley, Kansas, instead of centrally in South Carolina. I believe this 
headquarters arrangement shortchanges the National Guard, will cost the 
taxpayers more in travel funds, and waste precious training time for 
brigade leaders. I'd like you to evaluate this arrangement during the 
first year and provide me a report of your findings. I am convinced 
that a rational look at this proposal will result in much needed 
changes to locate the headquarters with the troops, preferably with the 
division forward, not 1,300 miles away.
    Answer. The locations for the integrated divisions' headquarters 
and their forward elements were approved on December 2, 1997, by the 
Secretary of the Army after a rigorous analysis with on-site surveys of 
15 potential sites. Sites evaluated on the east coast included Forts 
Jackson, Knox, Drum, Rucker, Campbell, and Stewart. The weighted 
criteria applied during the analysis were the availability of division 
headquarters facilities, base facilities, simulation centers, motor 
pools, a transportation hub, and living areas and the ability to 
support a transition to an alternative divisional organization for the 
integrated division. This meticulous evaluation resulted in the 
selection of Fort Riley with a forward element at Fort Jackson for the 
heavy division. Throughout the entire process, the National Guard 
Bureau, the Adjutants General from states with enhanced Separate 
Brigades, and Forces Command provided input to and support of the final 
decisions. The benefits derived from association with the division and 
the selected locations far outweigh the minimal investment of time and 
money for travel. Fort Riley was selected based on its established 
heavy maneuver training areas, which currently serve two heavy maneuver 
brigades. In addition, the 218th Infantry Brigade of the South Carolina 
Army National Guard has had an historic training relationship with Fort 
Riley. Fort Riley also possesses adequate division headquarters 
buildings and facilities; an advanced simulation center; and an 
established garrison command headquarters supporting heavy combat 
forces. Fort Jackson, which is predominately a training installation, 
serves as the forward element and would provide the necessary daily 
command and control functions. In addition, the forward element at Fort 
Jackson will be able to accomplish a significant portion of the tasks 
for training support and mentoring the three assigned enhanced Separate 
Brigades.
    One year after the activation of the two integrated divisions, a 
report will be provided on the effectiveness of this arrangement.
                               simulators
    Question. What is the Active Army plan to incorporate weapon 
training simulators? What is the current status of this plan? As 
background, understand that the U.S. Marine Corps (USMC) and Air Force 
have successfully used weapons simulation to help maintain skills and 
also offsetting some of the requirements for ammunition and operating 
tempo (OPTEMPO) resources.
    Answer. Today's Army (Active and Reserve components) increasingly 
relies upon simulators and simulations. A wide range of devices are 
already in use, and new ones are being developed (e.g., live--Multiple 
Integrated Laser Engagement System 2000; virtual--Close Combat Tactical 
Trainer (CCTT); and constructive--Warfighter's Simulation) that will 
create a seamless virtual environment from crew through combined arms 
task force level.
    Our goal is to have repetitive, structured training to standard in 
tough, realistic, increasingly difficult conditions across all domains: 
live, virtual, and constructive. In some cases simulation training will 
be used to precede actual live training, thus allowing live training to 
become more intense and to remain the center piece of the Army's 
training program. In other cases simulation training can substitute for 
live training. For example, we have done Division and Corps command and 
staff training for years using only simulations.
    As capabilities in simulators and simulations increase, we will be 
able to substitute some for live training events to achieve savings in 
OPTEMPO and reduce personnel tempo (PERTEMPO) while retaining our 
commitment to high quality training. Examples of offsetting live 
OPTEMPO include: CCTT--Platoon maneuver tasks associated with 60 miles 
of live training can now be performed in CCTT simulators; and Tank 
Weapons Gunnery Simulations System/Precision Gunnery System--Using 
these simulators, we have increased gunner and crew proficiency while 
also reducing the amount of ammunition we buy. Tank rounds saved--10 
Active component and 5 Reserve component; and 25 mm rounds saved--192 
per Bradley Fighting Vehicle (BFV) and 193 per Cavalry Fighting Vehicle 
(Active component only).
    Question. What is the plan to use simulation in weapons training in 
the Army Reserve? What is the current status of this plan?
    Answer. The U.S. Army Reserve (USAR) supports and uses training 
aids in accordance with the Army's Training Aids, Devices, and 
Simulation Systems guidance. The USAR trains with all simulator systems 
used by similar Active component units. The USAR has incorporated the 
use of weapons simulators as they have become available. Historically, 
the Weaponeer, Multi-purpose Arcade Combat Simulator and the Fire Arms 
Training Simulator have been utilized to enhance weapons training 
capabilities for small arms. The USAR does not require simulators for 
heavy weapons, i.e. tanks, artillery, and air defense. However, it does 
employ attack helicopters and utilizes the Combat Mission Simulator for 
both weaponry and flight training for its AH-64 Apache helicopters. It 
incorporates simulators within training plans subject to the 
availability of funds for acquisition, travel, and training, 
particularly train-the-trainer instruction.
    Question. What is the plan to use simulation in weapons training in 
the National Guard? What is the current status of this plan?
    Answer. The Army National Guard (ARNG) plans to use training aids, 
devices, simulators, and simulations to replicate, but not replace, 
live weapons training to the fullest extent possible. This includes the 
spectrum from individual weapons to crew gunnery and force-to-force 
maneuver training.
    Because National Guard training is inherently constrained by time, 
distance to ranges, and range availability, the ARNG is committed to 
maximizing the use of simulation. The ARNG is a full partner with the 
Army Reserve and the Active Army in supporting the development of 
simulation in the Total Army training strategy.
    The ARNG uses sophisticated simulation devices and models in 
individual weapons training, vehicle and cockpit crew training, and 
force-on-force simulations. Simulators and simulated training are, and 
will continue to be, a critical component of the ARNG's plan for 
maximizing the use of all available resources for training.
                                 ______
                                 
               Questions Submitted by Senator Larry Craig
                         national guard funding
    Question. I am very concerned about the $634 million shortfall in 
the National Guard operating budget--the difference between the overall 
amount recommended in the Administration's budget and the funding needs 
as assessed by the 50 states' National Guard units. This shortfall 
could prove detrimental to the 41,000 guardsmen by limiting education, 
annual training, or even promotions.
    I would like to know whether this shortfall implies a fundamental 
shift in the National Guard's capability and mission, from war fighting 
to acting as a war-support mechanism.
    What are the Administration's--and I assume the Defense 
Department's and the Army's--policy and mission objectives in 
recommending a budget with this shortfall?
    Answer. In fiscal year 1999, the Army National Guard's (ARNG's) 
operating budget is at 90 percent of it's reported critical 
requirement, leaving the $634 million reported shortfall. There are 
shortfalls throughout the Total Army and the $634 million ARNG 
shortfall represents a part of the Total Army's overall $3 to $5 
billion funding shortfall for fiscal year 1999. To mitigate the 
readiness impact of the funding shortfalls, the ``First to Fight'' 
funding philosophy was adopted. The ``First to Fight'' principle 
balances risk across all components. The ARNG is adequately funded to 
support the National Military Strategy.
    The identified shortfall does not imply nor has there been a policy 
or mission change which was designed to negatively impact the ARNG's 
capability. Current Army resource levels affect every aspect of the 
Total Army (i.e. personnel, training, equipment, and modernization). We 
continue to place increasing emphasis on the management of our very 
constrained and limited Total Obligation Authority. These limited 
resources force us to make some difficult choices among a number of 
competing program requirements while attempting to sustain and protect 
combat readiness. The Total Army budget was submitted with risk 
apportioned to units in accordance with applicable war-fight 
requirements.
                         ground operating tempo
    Question. With regard to Vehicle Operating Tempo (OPTEMPO), in per 
vehicle miles and total dollars:
    What were the Army's budgeted OPTEMPO and the actual OPTEMPO for 
last year, fiscal year 1997? How do you account for the difference?
    Answer. In fiscal year 1997, the Army budgeted 800 miles for all 
Active component units, funded at $2,665 million. This mileage is based 
on what the Army needs to conduct critical battalion-level maneuver 
training. The actual miles executed were 654 miles, with $2,290 million 
of funding executed.
    Commanders in the field have had to balance training requirements 
with other programs that also impact on readiness. For example in Base 
Operations, commanders have been required to divert training dollars to 
pay for the sustainment of their training areas and ranges, motor 
pools, supply warehouses, railheads, airfields, and other areas that 
support training. Without these facilities, the units could not train.
    Additionally, the Army has been heavily engaged in supporting 
contingency operations and performing other missions not directly 
related to its warfighting mission. The Army has been required to pay 
for these missions out of its current budget pending supplemental 
funding from Congress. If funding from Congress comes too late in the 
year, then training opportunities are lost due to the lack of time to 
execute training. That money will then be spent on other high priority 
programs. This accounts for some of the migration and underexecution 
that is evident today.
    The Army has taken several steps in the current budget to bring the 
programming and execution of resources more in line. We have also taken 
several steps to reduce the overall cost of training, to include 
incorporation of simulation into our training strategies and use of 
heavy equipment transports to reduce the number of miles required to be 
driven by combat vehicles.
    Question. What were the Army's budgeted OPTEMPO and the actual 
OPTEMPO for the current year, fiscal year 1998? How do you account for 
the difference?
    Answer. In fiscal year 1998, the Army budgeted 800 miles for all 
Active component units, funded at $2,509 million. This mileage is based 
on what the Army needs to conduct critical battalion-level maneuver 
training. OPTEMPO execution as of second quarter of fiscal year 1998 is 
311 miles.
    While the Army funded OPTEMPO in the President's budget at 800 
miles, congressional reductions to Operation and Maintenance, Army, for 
fiscal year 1998 amounted to $450 million. About $178 million were in 
specified areas. Another $272 million in reductions were unspecified in 
the Appropriations Conference report and those reductions were 
distributed on a fair share basis to Army commands.
    Congressional direction and Department of Defense implementing 
instructions required more detailed reporting procedures for fiscal 
year 1998 that show earlier in the fiscal year the diversion of OPTEMPO 
to pay congressional and Headquarters, Department of the Army, bills. 
Commanders took reductions in the OPTEMPO accounts because of the 
fiscal year 1998 level of funding in Base Operations (80 percent) and 
Real Property Maintenance (62 percent).
    After all the reductions were taken and budget realigned, 
approximately $220 million was paid from OPTEMPO accounts. The net 
result is equivalent to reducing OPTEMPO from 800 miles to 652 miles, 
or OPTEMPO funding at $2,291 million.
    Question. What has been budgeted for the Army's OPTEMPO for the 
coming year, fiscal year 1999? What is the basis for any increase (or 
decrease) in the fiscal year 1999 budgeted amounts compared with the 
previous years' actual and estimated amounts?
    Answer. For fiscal year 1999, the Army budgeted 800 miles for all 
Active component units, funded at $2,489 million. This mileage is based 
on what the Army needs to conduct critical battalion-level maneuver 
training. There has been no significant increase or decrease in the 
Active component's OPTEMPO budget between fiscal year 1997, fiscal year 
1998, or fiscal year 1999.

                         conclusion of hearings

    Senator Stevens. This will conclude the hearings on the 
fiscal year 1999 budget request for the Department of Defense. 
If there is nothing further, the hearing is recessed.
    [Whereupon, at 11:37 a.m., Wednesday, May 20, the hearings 
were concluded, and the subcommittee was recessed, to reconvene 
subject to the call of the Chair.]


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Baca, Lt. Gen. Edward D., Chief, National Guard Bureau, 
  Department of Defense..........................................   333
    Prepared statement...........................................   336
Blanck, Lt. Gen. Ronald R., Surgeon General, U.S. Army, 
  Department of Defense........................................409, 410
    Prepared statement...........................................   412
    Questions submitted to.......................................   456
Bond, Hon. Christopher S., U.S. Senator from Missouri...........48, 134
Brooke, Mildred, vice president, J&E Associates..................   731
    Prepared statement...........................................   733
Brown, Tiffany Nicole, student, Georgia..........................   398
    Prepared statement...........................................   399
Bumpers, Hon. Dale, U.S. Senator from Arkansas, questions 
  submitted by............................................312, 331, 563
Burke, Dr. Donald S., member of legislative task force, American 
  Society of Tropical Medicine and Hygiene.......................   754
    Prepared statement...........................................   755

California Industry and Government Coalition on PM-10/PM-2.5, 
  prepared statement.............................................   773
Calkins, Charles L., national executive secretary, Fleet Reserve 
  Association....................................................   697
    Prepared statement...........................................   699
Chameau, Jean Lou, dean of engineering, Georgia Institute of 
  Technology, on behalf of the Association of American 
  Universities...................................................   719
    Prepared statement...........................................   720
Cline, Master Sergeant Michael P., (ret.), executive director, 
  Enlisted Association of the National Guard of the United States   736
    Prepared statement...........................................   737
Cochran, Hon. Thad, U.S. Senator from Mississippi................   334
    Prepared statement...........................................   133
    Questions submitted by......................298, 326, 336, 559, 816
Cohen, Hon. William S., Secretary of Defense, Office of the 
  Secretary, Department of Defense...............................   785
    Prepared statement...........................................   793
Craig, Hon. Larry, U.S. Senator from Idaho, questions submitted 
  by.............................................................   882
Crowley, James M., Ph.D., executive director, Society for 
  Industrial and Applied Mathematics, on behalf of the Joint 
  Policy Board for Mathematics...................................   711
    Prepared statement...........................................   712

Dalton, Hon. John H., Secretary of the Navy, Department of the 
  Navy, Department of Defense....................................   131
    Prepared statement...........................................   138
    Questions submitted to.......................................   297
Domenici, Hon. Pete V., U.S. Senator from New Mexico............. 3,188
    Questions submitted by...37, 115, 120, 298, 315, 327, 604, 871, 875
Dorgan, Hon. Byron, U.S. Senator from North Dakota...............     3
    Prepared statement...........................................   135
    Questions submitted by...45, 126, 313, 326, 331, 407, 465, 468, 564
Duggan, Dennis M., deputy director, national security-foreign 
  relations division, The American Legion........................   653
    Prepared statement...........................................   655

Ekarius, John C., acting director of government relations, 
  University of Medicine and Dentistry of New Jersey.............   668
    Prepared statement...........................................   668
Engel, Rear Adm. Joan M., Nurse Corps, Department of Defense, 
  prepared statement of..........................................   488

Foil, Martin B., Jr., chairman, Brain Injury Association, Inc....   649
    Prepared statement...........................................   650

Gallo, Betty, Dean & Gallo, the Cancer Institute of New Jersey...   668
    Prepared statement...........................................   671
Gardner, Capt. Mary Anne, Deputy Director, Navy Nurse Corps, 
  Department of Defense..........................................   485
    Question submitted to........................................   501
George, Father William L., S.J., assistant to the president, 
  Georgetown University..........................................   639
    Prepared statement...........................................   640
Gregg, Judd, U.S. Senator from New Hampshire, questions submitted 
  by.............................................38, 116, 310, 325, 329

Hamre, Hon. John, Deputy Secretary, Office of the Deputy 
  Secretary, Department of Defense...............................     1
Harkin, Hon. Tom, U.S. Senator from Iowa.........................   788
Harnage, Bobby L., national president, American Federation of 
  Government Employees, AFL-CIO..................................   679
    Prepared statement...........................................   680
Hazard, Holly E., executive director, Doris Day Animal League....   758
    Prepared statement...........................................   760
Hickey, Sydney T., associate director, government relations, the 
  National Military Family Association [NMFA]....................   630
    Prepared statement...........................................   631
Hollings, Hon. Ernest F., U.S. Senator from South Carolina, 
  questions submitted by...................................42, 311, 880
Hutchison, Hon. Kay Bailey, U.S. Senator from Texas..............     2
    Questions submitted by.......................................   122

Inouye, Hon. Daniel K., U.S. Senator from Haw2, 132, 409, 570, 786, 822
    Prepared statement...........................................   787
    Questions submi40, 117, 125, 456, 461, 467, 500, 501, 609, 872, 879

Johnson, Adm. Jay L., Chief of Naval Operations, U.S. Navy, 
  Department of the Navy, Department of Defense................131, 182
    Questions submitted to.......................................   314
Johnson, David, Ph.D., executive director, Federation of 
  Behavioral, Psychological and Cognitive Sciences...............   622
    Prepared statement...........................................   623
Jollivette, Cyrus M., vice president for government relations, 
  University of Miami............................................   660
    Prepared statement...........................................   661

Koenig, Vice Adm. Harold, Medical Corps, Surgeon General, U.S. 
  Navy, Department of Defense....................................   426
    Prepared statement...........................................   429
    Questions submitted to.......................................   459
Kolker, Ann, executive director, Ovarian Cancer National 
  Alliance: Ovar'coming Together.................................   704
    Prepared statement...........................................   706
Krebs, Joshua W., Chief Master Sergeant, USAF (retired), manager, 
  legislative affairs, Air Force Sergeants Association...........   618
    Prepared statement...........................................   619
Krulak, Gen. Charles C., Commandant, U.S. Marine Corps, 
  Department of the Navy, Department of Defense................131, 182
    Prepared statement...........................................   183
    Questions submitted to.......................................   326

Lautenberg, Hon. Frank R., U.S. Senator from New Jersey..........   787
    Questions submitted by.................................43, 458, 564
Leahy, Hon. Patrick J., U.S. Senator from Vermont, questions 
  submitted by...................................................   819
Lestenkof, Maj. Gen. Jake, Adjutant General of Alaska, Youth 
  Challenge Program, Department of Defense.......................   395
Lord, Cmdr. Mike, JAGC, USN (ret.), The Military Coalition.......   743
Lyles, Gen. Lester L., U.S. Air Force, Director, Ballistic 
  Missile Defense Organization, Department of Defense............   503
    Prepared statement...........................................   517

Maves, Michael D., MD, MBA, executive vice president, American 
  Academy of Otolaryngology--Head and Neck Surgery, Inc., 
  prepared statement.............................................   766

National Association of Energy Service Companies, prepared 
  statement......................................................   782
Navas, Maj. Gen. William A., Director, Army National Guard, 
  National Guard Bureau, Department of Defense.................333, 346
    Prepared statement...........................................   347

O'Donovan, Father Leo J., S.J., Georgetown University............   639
Odom, Jerome, Ph.D., chairman, Coalition of EPSCoR States........   645
    Prepared statement...........................................   646
Olanoff, Chief Master Sergeant Mark H., USAF (ret.), legislative 
  director, the Retired Enlisted Association.....................   723
    Prepared statement...........................................   725
Ouellette, Michael F., Sergeant Major, USA (retired), director of 
  legislative affairs, Non Commissioned Officers Association of 
  the United States of America...................................   683
    Prepared statement...........................................   684

Partridge, Charles C., Colonel, USA (retired), National Military 
  and Veterans Alliance..........................................   707
    Prepared statement...........................................   708
Peters, Hon. F. Whitten, Acting Secretary of the Air Force, 
  Office of the Secretary, Department of the Air Force, 
  Department of Defense..........................................    47
    Biographical sketch..........................................    81
    Prepared statement...........................................    56
    Questions submitted to.......................................   115
Phagan, Joshua Bryson, student, Georgia..........................   398
    Prepared statement...........................................   398
Prueher, Adm. Joseph W., U.S. Navy, Commander in Chief, U.S. 
  Pacific Command, Department of Defense.........................   569
    Prepared statement...........................................   576

Quickel, Kenneth E., Jr., M.D., president, Joslin Diabetes 
  Center, Boston, MA.............................................   641
    Prepared statement...........................................   643

Raymond, Sandra C., executive director, National Osteoporosis 
  Foundation.....................................................   613
    Prepared statement...........................................   615
Reimer, Gen. Dennis J., Chief of Staff, Secretary of the Army, 
  Department of Defense........................................821, 837
    Prepared statement...........................................   839
    Questions submitted to.......................................   873
Roadman, Lt. Gen. Charles H., II, Surgeon General, U.S. Air 
  Force, Department of Defense...................................   435
    Prepared statement...........................................   437
    Questions submitted to.......................................   466
Rubin, Robert W., Ph.D., president and chief executive officer, 
  Lovelace Respiratory Research Institute, New Mexico............   673
    Prepared statement...........................................   674
Ryan, Gen. Michael E., Chief of Staff, Office of the Secretary, 
  Department of the Air Force, Department of Defense.............    47
    Biographical sketch..........................................    81
    Prepared statement...........................................    56
    Questions submitted to.......................................   118

Sandler, Maj. Gen. Roger W., AUS (ret.), executive director, 
  Reserve Officers Association of the United States, prepared 
  statement......................................................   775
Scott, Charles K., II, Commander, Department of the Navy.........   613
Shelby, Hon. Richard C., U.S. Senator from Alabama:
    Prepared statement...........................................   452
    Questions submitted by.......310, 325, 329, 456, 460, 466, 561, 816
Simmons, Brig. Gen. Bettye, Chief, Army Nurse Corps, Department 
  of Defense.....................................................   492
    Prepared statement...........................................   493
    Question submitted to........................................   500
Smith, Edith G., citizen advocate for disabled military retirees, 
  prepared statement.............................................   767
Sparra, Alex J., sophomore, The Citadel, graduate, Georgia Youth 
  Challenge Academy..............................................   400
Specter, Hon. Arlen, U.S. Senator from Pennsylvania, question 
  submitted by...................................................   459
Stevens, Hon. Ted, U.S. Senator from Alaska:
    Prepared statement...........................................   569
    Questions submitted by...36, 115, 118, 297, 314, 556, 601, 870, 873
Stierle, Brig. Gen. Linda J., Director of Medical Readiness and 
  Nursing Services, Office of the Surgeon General, Department of 
  the Air Force, Nurse Corps, Department of Defense..............   471
    Prepared statement...........................................   474

Torsch, Cmdr. Virginia, MSC, USNR, The Military Coalition........   743
    Prepared statement...........................................   745

Van Cott, Harold P., Ph.D., president, Human Factors and 
  Ergonomics Society; on behalf of the American Psychological 
  Association....................................................   626
    Prepared statement...........................................   627
Van Nest, Ronald, certified registered nurse anesthetist, 
  American Association of Nurse Anesthetists.....................   689
    Prepared statement...........................................   690
Visco, Frances M., president, National Breast Cancer Coalition...   761
    Prepared statement...........................................   762

Walker, Hon. Robert M., Acting Secretary of the Army, Secretary 
  of the Army, Department of Defense...........................821, 823
    Prepared statement...........................................   825
    Questions submitted to.......................................   870
Weaver, Maj. Gen. Paul A., Jr., Director, Air National Guard, 
  National Guard Bureau, Department of Defense.................333, 370
    Prepared statement...........................................   371
    Questions submitted to.......................................   407
Weisenberg, Jane, vice president community programs, Children's 
  Hospital and Health Center, San Diego, CA......................   728
    Prepared statement...........................................   729
Whiston, David A., D.D.S., president, American Dental Association   715
    Letter from..................................................   718
    Prepared statement...........................................   716
Williams, Lt. Col. Francis B., Director, Georgia Youth Challenge 
  Academy, Youth Challenge Program, Department of Defense........   395


                             SUBJECT INDEX

                              ----------                              

                         DEPARTMENT OF DEFENSE

                 Ballistic Missile Defense Organization

                                                                   Page
ABM Treaty compliance............................................   540
Additional committee questions...................................   556
Advance technology...............................................   515
Advanced Research Center [ARC]...................................   561
Affordability....................................................   507
Airborne laser [ABL]......................................512, 541, 560
Arrow............................................................   566
    Technology...................................................   548
    Third battery................................................   545
Atmospheric interceptor technology [AIT].........................   562
Ballistic missile defense:
    Mission areas................................................   505
    Test philosophy..............................................   538
BMDO costs.......................................................   549
Fifty States, protection of......................................   540
Kinetic kill vehicle hardware in the loop simulator [KHILS]......   561
Lessons learned..................................................   550
Long-range air launched target [LRALT]...........................   560
Major programs...................................................   508
Medium extended air defense system [MEADS].....................512, 556
Missile testing..................................................   514
Modeling and simulation..........................................   544
National missile defense [NMD]..................513, 537, 563, 564, 565
    Basing.......................................................   556
    Cost and schedule............................................   557
    Deployment...................................................   536
    Siting.......................................................   565
    Threat coverage..............................................   535
    Three-plus-three.............................................   547
Navy area wide...................................................   545
Navy theater wide program [NTW]................................511, 564
    THAAD........................................................   552
Out-year:
    Budgets......................................................   554
    Funding......................................................   534
Pacific missile range facility [PMRF]............................   545
Patriot advanced capability-3 [PAC-3]..........................546, 558
Patriot effectiveness............................................   539
Program deadlines................................................   549
Program risks, managing..........................................   550
Space-based missile defense......................................   559
Targets and countermeasures......................................   563
Theater high altitude area defense [THAAD].....................557, 566
    Development..................................................   537
    Navy theater wide defense [NTW]..............................   564
    Status.......................................................   552
    Test program.................................................   559
    Testing......................................................   509
    UOES.........................................................   543
Threat:
    And countermeasures..........................................   551
    Development..................................................   557
User operational evaluation system...............................   510
Welch:
    Panel........................................................   536
    Report.......................................................   565
White Sands missile range [WSMR]...............................542, 543

                      Department of the Air Force

                        Office of the Secretary

Additional committee questions...................................   114
Air Force:
    Contemporary operations......................................    57
    Role in national security....................................    56
    Space laboratory.............................................    99
Air Mobility Command upgrades....................................   108
Airborne laser.........................................88, 94, 125, 127
Bomber:
    Status.......................................................   110
    Training initiatives.........................................   101
Bosnia, deployment of United States troops in....................   122
BRAC planning....................................................    97
C-17 support.....................................................   113
C-130's, modernization of........................................   107
Cannon Air Force Base............................................   101
Chairman's opening remarks.......................................    81
Civil Air Patrol.................................................    93
Collision avoidance system.......................................   111
Contingencies, funding for.......................................   117
Continuation pay and aviation career incentive pay...............   118
Contracting out..................................................   128
    Savings......................................................    98
Deep attack weapons mix study....................................   127
Deployment challenges............................................    53
Electronic Systems Center, restructuring of......................   103
Environmental costs..............................................    84
Environmental impact statement [EIS].............................   100
Equipment:
    Modernization................................................    52
    Upgrades.....................................................    54
Evolved expendable launch vehicle [EELV].........................   105
F-15A's..........................................................85, 86
F-22............................................109, 110, 115, 118, 125
F-117............................................................   100
Fighter aircraft requirements....................................   124
Flying Hour Program..............................................   119
Funding request overview.........................................    83
Guard and Reserve upgrades.......................................   108
Improving efficiency.............................................    76
In-house software capability.....................................   103
Information security.............................................   123
Information technology software capability.......................   102
JASSM............................................................   119
Joint air-to-surface standoff missile [JASSM]....................   104
Joint Strike Fighter [JSF].......................................   126
Long-range air power panel.......................................   126
Manned reconnaissance............................................   120
National missile defense.........................................   105
NATO enlargement.................................................   123
Navigator training...............................................   127
O&P savings......................................................   102
Partnering.......................................................   100
    For peace....................................................   116
Pay equity.......................................................   118
PERSTEMPO........................................................   119
Pilot:
    Readiness....................................................    86
    Retention...................................................90, 127
    Training.....................................................    88
Preparing for the 21st century--strengthening core competencies..    68
Privatization....................................................   115
Quality force, maintaining a.....................................    62
Quality of life..................................................51, 87
    Programs.....................................................   121
Readiness......................................................120, 123
    Impact.......................................................   125
Recruitment......................................................    91
Report status....................................................    96
Retention methodology............................................    55
Safety enhancements..............................................   112
Science and technology programs..................................   117
Shared facility..................................................   101
START III and bomber force structure.............................   126
Superbases.....................................................114, 128
T-6A.............................................................   125
Tanker forces....................................................    95
The Tunner.......................................................    86
Treaty compliance................................................   105
Unmanned reconnaissance system, basing of........................   120

                         Department of the Army

                         Secretary of the Army

A starting point...............................................825, 839
A turning point..................................................   839
Active component/Army National Guard integrated division 
  headquarters...................................................   881
Additional committee questions...................................   870
Army:
    National Guard Integration Pilot Program.....................   874
    Prepositioned equipment......................................   880
    Priorities...................................................   828
Bosnia...........................................................   848
Budget:
    Fiscal year 1999.............................................   827
    Request......................................................   848
    Shortfalls...................................................   863
Challenges ahead--experimenting with the force, readying the 
  leaders, reengineering the infrastructure, preparing for the...   844
Civilian reductions............................................872, 879
Comanche.......................................................872, 880
Deployments, impact of...........................................   863
Digitization.....................................................   873
Enhanced fiber optic guided missile..............................   853
Food stamps......................................................   857
    How many Army service members qualify for....................   858
Future, path to the..............................................   839
Ground operating tempo...........................................   883
Health care......................................................   865
International environment--with total Army solutions, shaping the   842
Joint STARS Data Link System Improvement Program.................   873
M-113............................................................   854
Medical:
    Care.........................................................   880
    Technology...................................................   869
Morale...........................................................   866
National Guard:
    Funding....................................................860, 882
    Integration..................................................   849
    Redesign.....................................................   849
National missile defense.......................................856, 861
No-Dong missile..................................................   856
172d Separate Infantry Brigade...................................   866
One team, one fight, one future--America's soldiers..............   846
Pay, adequate....................................................   858
Pine Bluff Arsenal...............................................   854
Position location system.........................................   868
Prime vendor support.............................................   870
Priorities.......................................................   871
Privatization..................................................863, 871
Readiness......................................................859, 875
Recruiting and retention.......................................848, 869
Reprogramming request............................................   846
Responding to our Nation's needs--ensuring readiness through 
  recruiting, retention, and realistic training..................   840
Retirement system................................................   867
Science and technology...........................................   853
Simulators.......................................................   881
Southwest Asia deployments.......................................   864
Space capabilities...............................................   852
Strategic balance--requirements and resources....................   845
Taepo Dong-2 missile.............................................   861
The way ahead....................................................   834
Theater high altitude area defense [THAAD].....................850, 873
Theater missile defense..........................................   855
Where we are today...............................................   825
White Sands missile range........................................   862
Year 2000 problem................................................   847

                         Department of the Navy

                         Secretary of the Navy

A-12 lawsuit, status of..........................................   298
Adak reuse.......................................................   202
Additional committee questions...................................   297
AH-1W............................................................   330
Aircraft carriers................................................   314
Amphibious shipping..............................................   331
APL barracks barge...............................................   298
Carrier rotation in the gulf.....................................   184
CH-60 Helicopter Program.........................................   325
Chemical biological incident response force [CBIRF]..............   329
Coast Guard/Navy ship procurement commonality....................   199
CVN-77...........................................................   313
CVX..............................................................   297
CVX R&D..........................................................   314
Department of the Navy 1998 Posture Statement....................   141
Excess infrastructure and base closures..........................   311
F-18E/F...................................................304, 308, 320
F/A-18 capabilities..............................................   193
F/A-18E/F......................................................187, 298
    And Joint Strike Fighter [JSF]...............................   326
    Wing drop....................................................   308
Hellfire II missiles...........................................310, 329
Joint Strike Fighter [JSF].......................................   331
LHA service life extension.......................................   326
LHD's/LHA's......................................................   189
Lockheed and Northrop merger.....................................   313
Missions, capability to perform..................................   191
Naval Reserve CH-60 aircraft.....................................   310
Navy JROTC.......................................................   311
Navy theaterwide missile defense program.........................   203
New attack submarine.............................................   185
NTACMS...........................................................   312
Nuclear Power School relocation, gymnasium in support of.........   312
Operational:
    Readiness....................................................   310
    Tempo, increased.............................................   296
Operationally....................................................   136
Per user fee contract strategy...................................   298
Personnel........................................................   136
    Problems/statistics..........................................   195
Pilot retention..................................................   200
Privatization.............................................298, 315, 327
    Outsourcing..................................................   196
Programmatically.................................................   137
Readiness.................................................299, 316, 328
Recruiting and retention.........................................   186
Reserve personnel, fiscal year 1999, Navy [RPN] funding..........   311
Retention--exit surveys..........................................   205
Ship:
    Depot maintenance funding....................................   325
    Service life.................................................   194
Tactical Tomahawk................................................   325
Theaterwide ballistic missile defense............................   192
300-ship Navy....................................................   188
Trident submarines...............................................   314
V-22.............................................................   201
Vertical replenishment helicopter................................   325

                         National Guard Bureau

A vital force adding value to America............................   335
Additional committee questions...................................   407
Air National Guard:
    Family.......................................................   374
    Operations...................................................   373
        Contemporary.............................................   372
    Role in national security....................................   371
    Status of....................................................   378
Alaska National Guard:
    Additional funding for helicopters for the...................   388
    Expanded role in the Pacific.................................   387
Allocation, balance of...........................................   335
America, presenting the face of..................................   340
``America's vital force'' defining,..............................   336
Army National Guard:
    Aviation modernization.......................................   382
    Funding......................................................   379
    Pilot retention..............................................   390
    Recruiting and retention versus OPTEMPO......................   377
    Shortfall status.............................................   379
ARNG programs, details of the $634 million shortfall in..........   381
Blackhawk helicopter shortfall...................................   382
C-17's in Jackson, MS............................................   391
Camp Shelby, MS, gunnery range, funding for......................   392
Capabilities, maintaining a balanced force of....................   340
Civilian technicians.............................................   383
Combat-oriented force, sustaining a..............................   338
Counterdrug mission..............................................   393
Disaster relief..................................................   386
Distance learning and communications.............................   380
Engagement, promoting democracy abroad through...................   339
F-16:
    Modernization................................................   386
    Upgrade....................................................383, 385
Fiscal year 1999 posture statement...............................   348
Funding shortfall................................................   379
Happy Hooligans..................................................   384
Homeland defense, remaining the first line of....................   342
Military affairs, fueling the revolution in......................   344
Military technicians budget......................................   384
National Guard, representing the needs of the....................   381
Operational tempo and retention..................................   377
Pacific rim operations...........................................   387
Pilot:
    Retention....................................................   378
    Turnover.....................................................   389
Quality of life..................................................   390
Readiness, state of..............................................   388
Real property and depot maintenance..............................   380
Retrograde program...............................................   392
Schools and special training.....................................   379
The path ahead--total force integration..........................   345
UH-60 helicopters versus cold weather equipment, prioritization 
  of.............................................................   387
Weapons of mass destruction......................................   393

                              Nurse Corps

Additional committee questions...................................   500
Air Force:
    Breast-feeding program.......................................   497
    Nurses, entry-level qualifications for.......................   496
    Overview of nursing in the...................................   472
Career professionals.............................................   498
Entry level degree...............................................   495
Funding and leadership...........................................   487
Health care, executing...........................................   486
Nurse's role.....................................................   485
Operational readiness............................................   485
Physical training/breast feeding.................................   497
Reserve forces, utilization of...................................   486
Telehealth.....................................................499, 500
Tri-service nursing program......................................   492

                     Office of the Deputy Secretary

A-76 process for competition.....................................    23
Additional committee questions...................................    36
B-2 bomber.......................................................    42
Base closures....................................................    45
Bosnia--costs, strategy, and number of people involved...........    40
BRAC:
    Disapproval, consequences of.................................    21
    Funding......................................................    11
    Savings--personnel cuts and environmental costs..............    16
CBO reestimate...................................................    46
CINC's, cost control and equipment needs of......................    19
Contingency funding..............................................     9
    More flexible................................................    26
Counterdrug training.............................................    36
Defense reform initiative........................................    37
Demining.........................................................    36
Deployment.......................................................    43
Depot maintenance privatization, restrictions on.................    24
DSWA's Field Command, function of................................    37
Federally funded research and development centers [FFRDC's]......    33
    Reductions...................................................    36
Fiscal resources--balanced budget amendment......................     6
Funding:
    Allowance, fiscal year 1999..................................    27
    Constraints..................................................    26
Inflation:
    Adjustments..................................................    45
    Savings and outlay forecasts.................................    29
Introduction by Dr. Hamre........................................     4
JROTC, funding for...............................................    42
Medical care for retirees and FEHBP coverage.....................    41
Missile defense..................................................    25
    Procurement for..............................................    30
National Guard:
    And military construction....................................    19
    Role in consequence management operations....................    38
NATO expansion costs.............................................    17
New agency, location of..........................................    37
New defense strategy.............................................     5
Nuclear:
    Responsibility, redundancy of................................    37
    Surety inspections...........................................    38
    Weapons stockpile, management of.............................    38
Operation and maintenance [O&M] funding..........................     9
Personnel end strengths..........................................    12
Privatization:
    And DOD personnel cuts.......................................    27
    In DOD, status of............................................    22
    Selective....................................................    31
Readiness initiatives, major.....................................     7
Recruit and retain quality people................................    15
Recruiting and retention.........................................    41
Reserve component initiatives....................................    13
Shipbuilding.....................................................    31
$60 billion procurement target...................................    46
Spare parts......................................................     8
Supplemental, SAC hearing on.....................................    22
Theater high altitude area defense [THAAD] missiles..............34, 35
Tracking infrastructure savings..................................    45
Veto override, status of spending resulting from.................    32
Weapons modernization............................................    14

                        Office of the Secretary

Additional committee questions...................................   815
Aircraft modernization...........................................   804
Allies, burdensharing with.......................................   795
Base closure and realignment.....................................   809
Bosnia:
    Operations, funding for......................................   791
    The way ahead in.............................................   799
Budget, overview of fiscal year 1999.............................   790
Comprehensive Test Ban Treaty..................................801, 812
DD-21 acquisition strategy.......................................   816
Defense:
    Budget request, overview of fiscal year 1999.................   793
    Streamlining and reforming...................................   815
India:
    International reaction to testing............................   811
    Nuclear testing by...........................................   810
Indian nuclear capabilities and sanctions........................   801
Israeli security.................................................   813
Legacy Program...................................................   819
Missile defense..................................................   807
    Deciding on deployment.......................................   808
National missile defense system and THAAD........................   807
NATO expansion and Russia........................................   813
Nuclear weapons, development and testing of......................   800
O&M funding and the President's budget amendment, fiscal year 
  1999...........................................................   793
Pacific region, importance of....................................   794
Quality of life and pensions.....................................   806
Secretary Cohen's opening statement..............................   789
Theater high altitude area defense [THAAD] missile status........   796
TRICARE..........................................................   798
U.S. security, addressing multiple threats to....................   808
Underwater Archeology Program....................................   819

                            Surgeon Generals

Acute lung injury research.......................................   460
Additional committee questions...................................   456
Air Force:
    Humanitarian operations......................................   451
    Overview.....................................................   435
Angio-CT.........................................................   448
Army Medical Department:
    Cooperation with sister service medical departments..........   424
    Current status of the........................................   412
Blood, freeze-dried..............................................   459
Building healthy communities--intervention and prevention........   441
Center for Naval Analysis [CNA] FEHBP-65/expansion of mail order 
  pharmacy study.................................................   465
Customer focused business process reengineering..................   433
Deploying TRICARE: Better access and more choices................   439
Facilitating service.............................................   453
Federal Employee Health Benefits Program.........................   428
Good news stories................................................   425
Health care to the deckplates, taking............................   430
Hepatitis C...............................................456, 460, 466
Medical readiness.........................................456, 461, 467
Medical technology, cost reduction of............................   454
Mobile breast care center........................................   458
Move information, not people.....................................   430
Personal information carrier [PIC]...............................   459
Quality and customer satisfaction................................   442
Readiness........................................................   426
    Budget impact on.............................................   449
Reengineering medical readiness..................................   438
Research program funds...........................................   451
Rightsizing our medical facilities and forces....................   440
Technology and costs.............................................   453
Telehealth.......................................................   468
Telemedicine...................................................417, 426
TRICARE...................................................418, 427, 468
    And Medicare.................................................   446
    Enrollment...................................................   446
    Making work..................................................   432
    Medicare subvention..........................................   445
USUHS.....................................................458, 462, 467
    Graduate retention...........................................   451
Women's health:
    Research.....................................................   463
    Studies....................................................429, 443

                          U.S. Pacific Command

Additional committee questions...................................   600
Amphibious ready groups..........................................   594
Asia-Pacific Center..............................................   609
Asian financial crisis.........................................603, 604
China............................................................   602
Cooperative threat reduction.....................................   589
Crisis response force............................................   598
Executive summary................................................   576
Five key issues..................................................   571
Ford Island development..........................................   593
International military education and training [IMET]...........592, 601
J-STARS..........................................................   600
Landmines........................................................   610
Looking ahead....................................................   581
Missile defense..................................................   594
1997 in the Asia-Pacific region..................................   577
North Korea, situation in........................................   610
North Korean:
    Ballistic missile threat.....................................   611
    Threat.......................................................   593
Northern Edge exercise...........................................   599
Okinawa update...................................................   598
Pacific Command readiness........................................   573
Pacific economics crisis.........................................   596
Pacific force reductions.........................................   591
Persian Gulf, impact of deployments..............................   589
Readiness......................................................605, 608
Strategy, resourcing the.........................................   582
U.S. Pacific Command strategy in action..........................   578
Wrap-up..........................................................   597

                        Youth Challenge Program

Army National Guard, details of armories in the budget...........   406
Education, alternative structure.................................   401
Students, criteria on accepting..................................   403
Youth programs:
    Support......................................................   396
    Success of...................................................   397

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