[Senate Hearing 105-451]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 105-451
 
      NORTH ATLANTIC TREATY ORGANIZATION [NATO] ENLARGEMENT COSTS

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

                                HEARINGS

                               before the

                      COMMITTEE ON APPROPRIATIONS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             FIRST SESSION

                               __________

                            SPECIAL HEARINGS

                               __________

         Printed for the use of the Committee on Appropriations




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

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                      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


                            C O N T E N T S

                              ----------                              

                       Tuesday, October 21, 1997
                         NATO ENLARGEMENT COSTS

                                                                   Page

Statement of Hon. Madeleine Albright, Secretary of State, 
  Department of State............................................     1
Statement of Hon. William S. Cohen, Secretary of Defense, 
  Department of Defense..........................................     1
Opening statement of Hon. Ted Stevens............................     1
Statement of Hon. Patrick Leahy..................................     3
Statement of Hon. Mitch McConnell................................     5
    Prepared statement...........................................     6
Statement of Hon. Barbara Mikulski...............................     8
Prepared statement of Senator Ben Nighthorse Campbell............     9
Statement of Hon. Arlen Specter..................................     9
Statement of Hon. Harry Reid.....................................    10
    Prepared statement...........................................    11
Statement of Hon. Conrad Burns...................................    12
Statement of Hon. Kay Bailey Hutchison...........................    12
Statement of Hon. Dale Bumpers...................................    13
Statement of Hon. Tom Harkin.....................................    14
Statement of Hon. Slade Gorton...................................    15
Statement of Hon. Larry E. Craig.................................    16
Statement of Hon. Robert F. Bennett..............................    16
Statement of Hon. Richard C. Shelby..............................    16
    Prepared statement...........................................    17
Prepared statement of Senator Thad Cochran.......................    17
Prepared statement of Senator Frank R. Lautenberg................    17
Statement of Hon. Madeleine Albright.............................    18
    Prepared statement...........................................    25
Statement of Hon. William S. Cohen...............................    30
The new Europe...................................................    30
Enlargement costs................................................    32
Prepared statement of Hon. William S. Cohen......................    35
    Why enlarge NATO? First, some European history...............    35
    Enlargement enhances NATO....................................    36
    The choice of new members....................................    36
    The NATO-Russia relationship.................................    37
    The military requirements and costs of enlargement...........    37
    Initial U.S. cost estimate...................................    38
    Ongoing NATO work to help refine the cost estimate...........    39
    NATO cost estimates may be lower.............................    39
    Interoperability progress by the invitees....................    39
    Some deficiencies exist......................................    40
    Next steps at NATO...........................................    40
    European burdensharing.......................................    41
    The costs of not enlarging...................................    41
United States national security interests in Asia and Europe.....    42
Enlargement costs................................................    43
Antipersonnel landmines..........................................    44
NATO-Russia relations............................................    45
U.S. contributions to NATO.......................................    47
United States in Bosnia..........................................    48
Reform in Russia.................................................    49
Threats in Europe................................................    50
Russia's reaction to enlargement.................................    52
Military purchases and requirements..............................    53
CIA resignation..................................................    53
Open door policy.................................................    53
Defense spending.................................................    55
Economic conditions..............................................    56
Enlargement costs and burdensharing..............................    56
Prepared statement of Senator Daniel K. Inouye...................    58
Russia's future..................................................    59
United States role in NATO and Europe............................    59
Consensus in NATO................................................    60
Enlargement costs................................................    60
United States troops in Europe...................................    60
Readiness impact.................................................    61
Additional committee questions...................................    62
Questions submitted to Secretary Madeleine Albright..............    62
Questions submitted by Senator Mitch McConnell...................    62
    Baltics......................................................    62
    NATO: general costs..........................................    63
Questions submitted by Senator Frank R. Lautenberg...............    64
    Conflict with CBO estimates..................................    64
    Costs borne by U.S. taxpayer.................................    64
    Prospective members not expecting loans......................    65
    NATO members agree with estimates............................    65
    NATO costs estimates different from United States............    65
    NATO members to increase defense spending....................    66
    Assurance United States won't pay more than their share......    66
    Plans sufficient to meet the costs...........................    66
    Public opinion...............................................    67
    Mass opinion and public policy...............................    67
    Russia's role in NATO........................................    68
    Out of area interests........................................    68
    Consensus....................................................    69
    Allies pay less, we pay more.................................    69
Questions submitted by Senator Tom Harkin........................    69
    Public opinion...............................................    69
    International monetary fund..................................    70
    Costs of more than three nations.............................    70
    Comparison to Marshall Plan..................................    71
    OSCE: future expansion.......................................    71
    Slovenia.....................................................    72
    Arms control initiative along with NATO expansion............    72
    Democratic values of the three new members...................    72
    Nuclear Nonproliferation Treaty problems.....................    73
    Nuclear sharing..............................................    73
    Pilot training...............................................    73
    Bilateral agreements.........................................    73
    Vaults.......................................................    74
    Dual-capable aircraft........................................    74
    Aircraft purchase plans......................................    74
    Nuclear sharing arrangements.................................    74
Questions submitted to Secretary William S. Cohen................    74
Questions submitted by Senator Frank R. Lautenberg...............    74
    CBO option 1 versus administration's estimate................    74
    Costs of expansion to foreign aid budget.....................    75
    Cost to new members..........................................    76
    Cost to the rest of NATO.....................................    77
    Current NATO members.........................................    77
    Prospective NATO members' ability to pay.....................    78
    Public opinion regarding NATO expansion......................    79
    Public opinion in Russia.....................................    79
    Russia's role in NATO........................................    80
    Out-of-area interests........................................    80
Questions submitted by Senator Tom Harkin........................    81
    Consensus....................................................    81
    Costs of NATO: Who will pay the costs?.......................    81
    Cost to new nations versus other needs.......................    82
    Costs of membership for full list............................    82
    Marshall Plan for defense contractors........................    82
    Organization for Security and Cooperation in Europe..........    83
    What about Slovenia?.........................................    83
    Arms control initiative along with NATO expansion............    83
    Promotion of democratic values...............................    83
    Nuclear nonproliferation.....................................    84
    NATO enlargement and nuclear weapons policy..................    84
    NATO enlargement costs.......................................    86


                      Wednesday, October 22, 1997

   NATO ENLARGEMENT COSTS AND DEPARTMENT OF DEFENSE READINESS IMPACT

Statement of Gen. Henry H. Shelton, Chairman, Joint Chiefs of 
  Staff, Department of the Army, Department of Defense...........    95
Statement of Gen. Wesley K. Clark, Commander in Chief, U.S. 
  European Command, Department of the Army, Department of Defense    95
Opening statement of Hon. Ted Stevens............................    95
Statement of Hon. Conrad Burns...................................    96
Statement of Hon. Lauch Faircloth................................    96
    Prepared statement...........................................    97
Prepared statement of Gen. Henry H. Shelton......................   100
Costs of enlargement.............................................   101
NATO Security Investment Program [NSIP]..........................   102
The new countries................................................   102
Prepared statement of Gen. Wesley K. Clark.......................   103
    Costs of enlargement.........................................   103
    Planning for enlargement.....................................   104
    Military capabilities of new members.........................   104
    Poland.......................................................   104
    Hungary......................................................   105
    Czech Republic...............................................   105
    Training/integration.........................................   105
NATO ministerial meetings........................................   107
Russia and the NATO alliance.....................................   109
Personnel and the threat.........................................   110
Military construction............................................   113
The Russians and instability.....................................   115
Allied contributions.............................................   116
Joint STARS......................................................   119
U.S. force reduction.............................................   120
Additional committee questions...................................   123
Questions submitted to Gen. Henry H. Shelton.....................   123
Questions submitted by Senator Richard C. Shelby.................   123
    Intelligence sharing.........................................   123
    Enlargement and U.S. force structure decreases...............   124
    NATO expansion in the QDR....................................   124
    Cost of NATO enlargement.....................................   124
    NATO contingencies...........................................   125
    NATO expansion...............................................   125
    Military capabilities of prospective NATO members............   125
    European allies..............................................   128
    Threat.......................................................   128
    Intelligence sharing.........................................   129
Questions submitted by Senator Frank R. Lautenberg...............   130
    Military capabilities of prospective new members.............   130
    European allies..............................................   131
    Russia.......................................................   132
    American military relationship with Russian military.........   132
Questions submitted to Gen. Wesley K. Clark......................   133
Questions submitted by Senator Richard C. Shelby.................   133
    NATO enlargement.............................................   133
    Support for families of 1st Armored Division.................   134
    Bosnia cost estimates........................................   135
    NATO enlargement.............................................   135
    NATO enlargement logistics...................................   135
    NATO enlargement.............................................   136
Questions submitted by Senator Frank R. Lautenberg...............   136
    Military capabilities of prospective NATO members............   136
    European allies..............................................   138
    NATO strategic concept.......................................   139
    Threat.......................................................   139
    Russia.......................................................   140
    Intelligence sharing.........................................   140
    American military relationship with Russian military.........   140


                       Thursday, October 23, 1997

                 GAO STUDIES ON NATO ENLARGEMENT COSTS

Statement of Henry L. Hinton, Jr., Assistant Comptroller General 
  for National Security and International Relations, General 
  Accounting Office..............................................   143
Opening statement of Hon. Ted Stevens............................   143
NATO enlargement issues..........................................   144
U.S. contributions to NATO common budgets........................   144
Other assistance to candidate countries..........................   145
NATO defense planning process....................................   145
Comparison of DOD, CBO, and RAND enlargement estimates...........   146
Prepared statement of Henry L. Hinton, Jr........................   147
    Summary of observations......................................   148
    U.S. contributions to common budgets and other funding 
      sources....................................................   149
    NATO's defense planning process..............................   149
    Key assumptions and cost estimates for NATO enlargement 
      studies....................................................   150
Force goals have not been met....................................   154
Affect of European monetary union on NATO enlargement............   154
NATO requirements for new members................................   156
U.S. obligations to pay..........................................   156
NATO's requirements process......................................   157
NATO enlargement costs are unclear...............................   158
Bosnia costs increase............................................   158
NATO's schedule for costing reports..............................   158
Cost estimates unclear...........................................   160
GAO to monitor NATO's December ministerial.......................   160
Support for U.S. forces overseas.................................   160
Resurgent Russia estimate........................................   161
Budget for NATO security investment program......................   161
DOD's future years defense plan..................................   162


      NORTH ATLANTIC TREATY ORGANIZATION [NATO] ENLARGEMENT COSTS

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                       TUESDAY, OCTOBER 21, 1997

                                       U.S. Senate,
                               Committee on Appropriations,
                                                    Washington, DC.
    The committee met at 10 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Specter, Gorton, McConnell, 
Burns, Shelby, Bennett, Campbell, Craig, Hutchison, Inouye, 
Leahy, Bumpers, Lautenberg, Harkin, Mikulski, Reid, and Dorgan.

                         NATO ENLARGEMENT COSTS

STATEMENTS OF:
        HON. MADELEINE ALBRIGHT, SECRETARY OF STATE, DEPARTMENT OF 
            STATE
        HON. WILLIAM S. COHEN, SECRETARY OF DEFENSE, DEPARTMENT OF 
            DEFENSE


                 OPENING STATEMENT OF HON. TED STEVENS


    Chairman Stevens. Good morning. We are grateful to you, 
Secretary Albright and Secretary Cohen, for coming to our 
hearing. Senator Byrd is a little delayed but has indicated 
that we should start, so we will proceed.
    The end of the cold war triggered a series of events that 
included the United States proposing expansion of the alliance 
at the January 1994 NATO summit. On July 8, 1997, Poland, 
Hungary, and the Czech Republic were selected by NATO as 
candidates for admission to the alliance. If the process is 
successful, these three central European countries that 
struggled so long under Communist domination will become full-
fledged members of NATO.
    The chairman of the Senate Foreign Relations Committee, 
Senator Jesse Helms, has held several comprehensive hearings 
earlier this month on many of the issues surrounding NATO 
enlargement and will conduct several more hearings between now 
and the time the Senate takes up the question of NATO 
enlargement.
    Today begins the first of 3 days of this committee's, 
Senate Appropriations Committee, hearings designed to try and 
understand the cost implications of NATO enlargement and its 
impact on the modernization of our armed forces.
    In 1949, to counter the growing communist menace in central 
and Eastern Europe, the U.S. Senate deliberated ratification of 
the North Atlantic Treaty. During the April 27, 1949, Senate 
Foreign Relations Committee hearing, where the Secretary of 
State, Dean Acheson, was the witness, Senator Hickenlooper 
asked the highly regarded Secretary of State, Dean Acheson, the 
following. He said:

    I am interested in getting the answers as to whether or not 
we are expected to supply substantial numbers--by that I do not 
mean 1,000 or 2,000 or 500 or anything of that kind, but very 
substantial numbers of troops and troops organizations of 
American troops--to implement the land power of Western Europe 
prior to aggression. Is that contemplated under article III, we 
agree to maintain and develop the collective capacity to 
resist? In other words, are we going to be expected to send 
substantial numbers of troops over there as a more or less 
permanent contribution to the development of these countries' 
capacity to resist?

    Secretary Acheson responded, ``The answer to that question 
is a clear and absolute no.''
    In September 1995, together with other Senators, including 
Senator Hutchison and Inouye of this committee, I visited 
Germany, Croatia, and Bosnia. During the trip we were assured 
by the Supreme Allied Commander of Europe [SACEUR], General 
Joulwan, that the Dayton peace accord would cost the United 
States no more than $1 billion, and that the commitment of U.S. 
troops would be limited to 1 year. I do not fault SACEUR for 
that position; he was carrying out the expectations of his 
Commander in Chief. But if I express some misgivings about the 
adequacy of NATO enlargement cost estimates, please understand 
that it has some historical basis.
    And I think our distinguished witnesses will appreciate my 
interest in avoiding an Acheson assessment of future 
implications of NATO enlargement.
    In a few moments we will hear from you, Madam Secretary and 
Secretary Cohen, on your perspectives on NATO enlargement. I 
anticipate you will address the knotty issues of cost of the 
enlargement of the NATO mission following the end of the cold 
war and how U.S. security interests and force structure may be 
affected by this enlargement, and the impact of NATO 
enlargement on the modernization of our U.S. military.
    We look forward to your testimony. Just so people will know 
what is coming, though, let me say that tomorrow the committee 
will hear from the Chairman of the Joint Chiefs of Staff, Gen. 
Henry Shelton, and the Supreme Allied Commander of Europe, Gen. 
Wesley Clark regarding the defense budget issues associated 
with Bosnia and the NATO enlargement.
    On Thursday, we expect to hear from the General Accounting 
Office to review the several NATO enlargement cost estimates 
and to obtain its perspective on expansion costs and what the 
tradeoffs may be.
    The three candidate states are now in negotiations with 
NATO and are filling out questionnaires, I am informed, 
regarding the status and capabilities of their armed forces. 
The purpose of the negotiation, I am told, is to ensure that 
the candidate states understand their obligations under the 
North Atlantic Treaty.
    NATO intends to draft a protocol to the treaty by December 
of this year, which will name the three states as candidates 
for membership. The protocol must be approved by all 16 current 
NATO members in order to amend the treaty and admit the new 
members. We are informed the Senate may vote on the protocol in 
the spring of 1998. If NATO enlargement is achieved, then the 
33 candidate states will become members of the alliance in 
April 1999.
    The NATO Participation Act of 1994 states that candidate 
states must make significant progress toward establishing 
democratic institutions and free market structures, as well as 
develop civilian control of the military and a policy of 
prohibiting transfer of arms to countries supporting terrorism.
    Despite the apparent success of the three candidate states 
in achieving these NATO Participation Act goals, concerns 
continue to be expressed in the United States about the 
capacity and commitment of the candidate states to pay the 
costs of NATO expansion, the degree of commitment by the 
European NATO members to absorb their share of expansion costs, 
and the fundamental questions of just what are the costs going 
to be and what is a satisfactory degree of military enhancement 
to the three states to be fully interoperable with NATO.
    No matter how much enthusiasm there is for NATO 
enlargement, in the final analysis NATO must be able to perform 
its essential article V mission of collective defense, which 
means that new members must achieve a satisfactory degree of 
equipment, personnel, training commitment, and interoperability 
to be able to support NATO.
    That will come at a large cost to all of the 19 parties. 
The cost debate has been a spirited one for several years. 
Besides the administration cost study and those done by the 
Congressional Budget Office, the RAND Corp., and the zero-cost 
option prepared by the Potomac Foundation. NATO is now 
conducting its own cost study, which is scheduled to be 
completed in December.
    As everyone is well aware, these cost studies have ranged 
from zero to $126 billion over the next 12 years. It is 
essential that the Senate obtain some solid numbers on which it 
can rely. Recognizing that each estimate is a function of how 
one sees the future threat and the organization of NATO, 
assumptions can be made for more obvious scenarios and cost 
estimates should follow with supportable logic.
    As the CBO study notes, most defense analysts agree that 
three steps should be considered key to establishing Western 
allies, enabling them to assist and send reinforcement in the 
event of an attack on one of the new members. The first 
involves the instruction in NATO military doctrine and 
procedures, as well as large-scale exercises with the alliance. 
The second consists of improvements in interoperability of new 
members' command, control, communications, and intelligence 
system. Finally, the new states would need to upgrade their air 
defenses to enable them, for example, to distinguish friendly 
from hostile aircraft.
    CBO estimates the total cost for such steps at $21.2 
billion. We look forward to their revised analysis on Thursday.
    Again, I do welcome you, Madam Secretary and Secretary 
Cohen, and I apologize for the long opening statement. I 
thought it was necessary to be clear as to why we are holding 
these hearings when the others are going on.
    I would yield to Senator Leahy as the ranking member's 
representative at this time.


                    STATEMENT OF HON. PATRICK LEAHY


    Senator Leahy. Thank you, Mr. Chairman.
    I agree with you, these are extremely important hearings. I 
have discussed this matter of the expansion of NATO with both 
Secretary Albright and Secretary Cohen.
    Some would say that the debate is essentially over, given 
the NATO leaders' invitation to Poland, Hungary, and the Czech 
Republic to join the alliance earlier this summer in Madrid. In 
many ways, though, I believe the debate is just beginning. And 
I think the decision should only be made after exhaustive 
consideration by the Senate.
    It is about much more than simply adding three countries to 
the alliance--the three countries with which I am sure the 
witnesses and all members of this committee are very familiar. 
It is also about how best to preserve and enhance the emerging 
democracies of eastern Europe, how to enhance our own security 
in Europe, about our relationship with Russia, a nation that 
just a few years ago was the prime target of our NATO forces.
    And I believe even more, Mr. Chairman, it is about the 
future of the alliance itself. Some of the issues we are going 
to discuss in the coming months were touched on when we debated 
sending our troops to Bosnia. I said at that time that I felt 
we were making a mistake in letting the United Nations handle 
this, and that NATO really should be there and that the United 
States had to show the leadership in NATO.
    In fact, I believed then and I believe today that if NATO 
had not become involved in the Bosnia peacekeeping operation 
then we would be talking about the relevance of NATO today. I 
think that NATO would have ended up being irrelevant. I think 
it was important that the United States showed leadership in 
NATO there. And, frankly, while this is not the purpose of the 
hearing today, I think that we should make sure that NATO, with 
U.S. participation, remains long enough to make sure that peace 
takes root in Bosnia.
    But expansion of NATO, the most successful defense alliance 
in history, would have far-reaching consequences, some of which 
we have only begun to understand and investigate. Issues 
concern the cost of expansion, the political and social 
ramifications, changes in the alliance's collective defense 
capability, the overall mission of NATO. We do not have the 
hard facts we need to proceed in a responsible and exhaustive 
manner.
    I am and always have been a strong supporter of NATO, but I 
want to make sure that NATO is stronger, not weaker, because of 
expansion. And I think the burden of persuasion is on those who 
favor expansion. Those of us who are still undecided want to 
hear the arguments. Opponents have asked many important 
questions that deserve specific answers.
    I am sympathetic to many of the administration's arguments. 
I want to hear more. If the risk of war in Europe is going to 
be substantially reduced by expanding NATO, that is a powerful 
incentive to proceed. The fact that Secretary Albright, who 
commands enormous respect, the fact that she speaks from 
personal experience having grown up in Czechoslovakia, and is a 
strong advocate of NATO expansion, that carries a great deal of 
weight.
    The fact that Secretary Cohen, who we have all worked with 
on this committee, also carries a great deal of weight. But 
NATO's 50th anniversary is quickly approaching. I want to make 
sure that they have another 50th anniversary, Mr. Chairman, 
when probably the only Member of the Senate still serving will 
be Senator Thurmond, and the rest of us will be gone.
    But I want to make sure that we do----
    Chairman Stevens. Speak for yourself. [Laughter.]
    Senator Leahy. I was waiting for that.
    But I just want to make sure we do the right thing, because 
NATO should be more than just ministers who meet in Brussels 
and debate among themselves. NATO should be the strongest 
military alliance history has ever known, but a military 
alliance driven by democratic nations, and that is what makes 
it work, but it also has to be more than just adding new people 
or new countries; we have to make sure that actually 
strengthens NATO and our security.
    Thank you, Mr. Chairman.
    Chairman Stevens. Thank you, Senator.
    Does any Senator here on our side have an opening 
statement? Do you have an opening statement, Senator McConnell?


                   STATEMENT OF HON. MITCH MC CONNELL


    Senator McConnell. Thank you, Mr. Chairman.
    Secretary Albright, this summer you made a pledge that the 
new NATO Permanent Joint Council will offer Russia a voice, not 
a veto over NATO affairs. This pledge is essential to securing 
and sustaining support for the administration's NATO policy 
and, more broadly, our goals in Europe.
    But there should be no doubt that the Russians will test 
the strength of your pledge. It is in their interest, for they 
have learned that challenging U.S. policy resolve often yields 
unintended or unexpected benefits.
    Let me point to an example which affected the Subcommittee 
on Foreign Operations. In the months leading up to the March 
Helsinki summit, Russia waged an aggressive public relations 
campaign opposing NATO expansion. With an administration intent 
on avoiding a repeat of the 1994 summit, when President Yeltsin 
warned Europe was in danger of plunging into a cold peace, 
Russia's posturing over security concerns paid economic 
dividends.
    The day before the summit began, the administration advised 
the subcommittee of plans to nearly triple the request for aid 
to Russia. While the entire New Independent States [NIS] 
request increased from $625 million to $990 million, only 
Russia enjoyed a disproportionately large increase.
    Just as an aside, given the growing cooperation between 
Russia and Iran in the nuclear and ballistic missile field, I 
do not think that Congress will sustain this increase. But it 
seems to me the Russians made important gains in talks in their 
dealings with the administration. Frankly, it is a little shade 
short of extortion.
    Since 1993, I have been on board for NATO expansion. It is 
the right thing to do and long past the right time to do it. 
But there is also the right way to do it. And that means 
avoiding the mistakes which damaged our ties in Europe and the 
NIS after the fall of the wall. That means clearly separating 
our interests from Russian ambitions.
    It is not enough to simply state that the Russians will 
have a voice, not a veto. Confidence and stability depend upon 
spelling out our terms. Basic conditions must be understood by 
the Russians and underscored with the next class of candidates. 
There should be common understanding that Russia will not have 
a veto over any applicant because of its location or history 
with Moscow. Eligibility will continue to be based exclusively 
on a country's ability and commitment to fulfill NATO's 
security obligations.
    In addition, Russia should not have a veto over the 
deployment of NATO troops or military modernization initiatives 
undertaken by or on the territory of new or prospective member 
states. And Russia must not have a veto over NATO's nuclear 
policy relative to any new member.
    Ambiguity on any of these points will cast a dangerous 
shadow of uncertainty over NATO's future, inviting suspicions 
that we are building a sacrificial buffer zone of nations which 
have second-class security standing.
    Improving the capabilities of central and Eastern European 
nations to meet eligibility standards comes with a price tag, 
some of which we have already seen in the increased increases 
in the President's Partnership for Peace request, a program 
which has been characterized as a path to NATO. However, it is 
important to clarify today if and how both direct and indirect 
costs will increase, especially if some nations view the 
partnership as their only available alternative to NATO's 
security umbrella.
    In addition to costs related directly to the partnership 
and NATO expansion, there is the question of costs associated 
with other interim security arrangements. For example, I 
welcome the Ukraine charter with NATO. However, it is not clear 
which subcommittee or national budget will pay the costs of 
Ukraine's participation in joint exercises. We need to 
understand whether this charter is unique or will it be 
replicated with other nations.
    I believe that expanding NATO serves our interests. The 
promise of membership alone has prompted several countries to 
resolve border and ethnic disputes, a record of success which 
will only improve with time. I am convinced it is far better to 
consider candidates during this peaceful pause in history than 
during a crisis. We should not repeat the devastating and 
confused debate over NATO's role, reach, and responsibility 
that we experienced in Bosnia.

                           PREPARED STATEMENT

    Finally, let me repeat, expanding NATO's zone of stability 
and security is the right thing to do, and now is the time to 
do it. I hope these hearings offer both the American public and 
future applicants the confidence that this committee will work 
hard with the administration to assure it is carried out in the 
right way.
    Thank you, Mr. Chairman.
    [The statement follows:]

             Prepared Statement of Senator Mitch McConnell

    Since assuming the Chairmanship of the Foreign Operations 
Subcommittee, I have had two priorities: to support countries 
willing to accept the responsibilities of NATO membership and 
to expand our commitment to Ukraine, Georgia, Armenia and the 
other new, non-Russian states in the former Soviet Union. These 
mutually reinforcing, twin goals of expanding NATO and 
strengthening the political and economic independence of the 
new republics have a direct impact on U.S. interest in 
stability in Europe.
    1996 marked a significant shift in the Administration's 
NATO policy. The explanation for this change may be as simple 
as the arrival of a new national security team; or, it could 
have been driven by the strong public support to include 
Poland, Hungary and the Czech Republic in NATO, sentiment which 
was particularly strong in key election battleground states; or 
it may have been influenced by the ongoing congressional 
initiatives to increase security assistance to the Visegrad 
nations. Of course, there's always the possibility that the 
change came about because it was the right thing to do and the 
right time to do it.
    I may seem a little skeptical about the thinking which led 
to the U.S. decision to support the invitation of new NATO 
members, but my views have been shaped by several years of 
contentious battles to secure adequate economic and security 
aid and political support for non-Russian nations and NATO 
applicants.
    Until 1996, anyone reading the Subcommittee's hearing 
records would sum up the testimony on the NIS and NATO much as 
Strobe Talbott did--no admission criteria, no timetable, no 
earmarks. Unfortunately, in Europe and the NIS this translated 
into no entry and no support.
    Against this tide, Congress managed to earmark $50 million 
in security assistance for Poland, Hungary, and the Czech 
Republic to improve both their military capabilities and 
prospects for NATO admission. In the Senate, this year we 
increased that earmark to $60 million and provided $18.3 
million for Latvia, Lithuania and Estonia. Obviously, those 
issues are still to be settled in conference.
    In spite of Congressional efforts, over the past several 
years, I think the Administration has allowed NATO and NIS 
policy to get coiled up in controversies over our relationship 
and course with Russia. We have been reluctant to sharply 
define and defend American interests allowing Russian ambitions 
to fill the void.
    In this context, I continue to have reservations about how 
the Founding Act will be implemented and how NATO's Permanent 
Joint Council with Russia will operate. However, I welcome your 
pledge, Secretary Albright, that the Council will offer Russia 
a ``voice not a veto'' over NATO affairs. This pledge is 
essential to securing and sustaining support for the 
Administration's NATO policy and, more broadly, our goals in 
Europe.
    There is no question the Russians will test the strength of 
your pledge. It is in their interests for they have learned 
that challenging U.S. policy resolve often yields unintended or 
unexpected benefits.
    Let me point to an example which affected my Subcommittee. 
In the months leading up to the March Helsinki summit, Russia 
waged an aggressive public relations campaign opposing NATO 
expansion. With an Administration intent upon avoiding a repeat 
of the 1994 summit when President Yeltsin warned ``Europe was 
in danger of plunging into a cold peace,'' Russia's challenge 
over security issues paid economic dividends. The day before 
the summit began, the Administration provided information to 
the Subcommittee that it planned to nearly triple the request 
for aid to Russia. While the entire NIS request increased from 
$625 million to $900 million, only Russia enjoyed a 
disproportionately large increase.
    Since 1993, I have expressed support for expanding NATO. It 
is the right thing to do and long past the right time to do it. 
But, there is also the right way to do it, and that means we 
must avoid the mistakes which damaged our ties in Europe and 
the NIS after the fall of the wall--that means clearly 
separating our interests from Russian ambitions.
    It is not enough to simply state the Russians will have a 
voice not a veto. Confidence and stability depend upon spelling 
out what that means in unambiguous and clear terms. Basic 
conditions must be understood by the Russians and underscored 
with the next class of applicants.
    There should be common understanding that Russia will not 
have a veto over any applicant because of its location or 
history with Moscow; eligibility will continue to be based 
exclusively on a country's ability and commitment to fulfill 
NATO's security obligations. In addition, Russia should not 
have a veto over the deployment of NATO troops or military 
modernization initiatives undertaken by or on the territory of 
new member states. And, Russia must not have a veto over NATO's 
nuclear policy relative to any new member.
    Ambiguity on any of these points will cast a dangerous 
shadow of uncertainty over NATO's future inviting suspicions 
that we are building a sacrificial buffer zone of nations which 
have second class security standing.
    Improving the capabilities of Central and Eastern European 
nations to meet eligibility standards comes with a price tag 
some of which we have already seen in the incremental increases 
in the President's Partnership for Peace request, a program 
which has been characterized as a path to NATO. However, it is 
important to clarify today if and how both direct and indirect 
costs will increase, especially if some nations view the 
Partnership as their only available alternative to NATO's 
security umbrella.
    In addition to costs related directly to the Partnership 
and NATO expansion, there is the question of costs associated 
with other interim security arrangements. For example, I 
welcome the Ukraine's Charter with NATO, however, it is not 
clear which Subcommittee or national budget will pay the costs 
of Ukraine's participation in joint exercises. We need to 
understand whether this Charter is unique or will it be 
replicated with other nations?
    I believe that expanding NATO serves our interests--the 
promise of membership alone has prompted several countries to 
resolve border and ethnic disputes, a record of success which 
will only improve over with time. I am convinced it is far 
better to consider candidates during this peaceful pause in 
history than during crisis. We should not repeat the 
devastating and confused debate over NATO's role, reach and 
responsibilities that we experienced in Bosnia.
    Expanding NATO's zone of stability and security is the 
right thing to do and now is the time to do it. I hope these 
hearings offer both the American public and future applicants 
the confidence that this Committee will work hard with the 
Administration to assure it is carried out the right way.

                   STATEMENT OF HON. BARBARA MIKULSKI

    Chairman Stevens. Do you have a statement, Senator 
Mikulski?
    Senator Mikulski. Yes; just very quickly, Mr. Chairman.
    Mr. Chairman, I want to first of all thank you as the full 
committee chairman of the Appropriations Committee for holding 
a hearing on NATO expansion. I believe that this is the first 
time in participation that this type of leadership has been 
provided at the full committee level, and I say thank you both 
in your hat as the Chair of the Subcommittee on Defense.
    Mr. Chairman, I am a supporter of the expansion of NATO, 
and was with President Clinton with a great deal of pride at 
the NATO Madrid meeting, at the NATO announcement, and then 
joined with him when we traveled to Poland together along with 
the Secretary of State, Dr. Albright.
    But, Mr. Chairman, it is not only that I support NATO. We 
have to be sure that Congress supports NATO and that the 
American people support NATO. When we vote on whether or not we 
should expand NATO, I believe the results of that vote should 
not come from a Presidential lobbying effort but from a 
Presidential education effort.
    I believe the American people, as well as the Congress, 
needs to have three questions asked. No. 1, how will the 
expansion of NATO, particularly with these three countries, 
contribute to European stability and even greater global 
stability? No. 2, how is it in the interest of the United 
States of America? And No. 3, is the cost worth the price or 
worth the investment? My own preliminary analysis indicates 
that yes, the last part will be answered.
    But, going back to when George Bush was President, I joined 
hands with Senators Hank Brown and Paul Simon to be an advocate 
for NATO expansion, and I believe that it did meet those tests 
that were related to both our national interest as well as the 
interest in European and geopolitical stability.
    Mr. Chairman, we are now celebrating or have celebrated 
over the last couple of years the 50th anniversary of three 
important post-World War institutions--the United Nations and 
its founding, the Marshall plan, and the creation of NATO. All 
three have stood the test of time, and showed the wise, bold, 
executive leadership, backed by a Congress, also with the 
backbone to back Presidential leadership, as well as through 
votes and appropriate funding, has truly stabilized the world 
and laid the groundwork for western democracy.
    We had the United Nations. We had the Marshall plan. And we 
have now NATO. And I think if we want to continue to have those 
pillars or that thinking in the 21st century we need to then 
now seize this opportunity to keep the momentum going. As 
Secretary Albright will say in her testimony, ``should we be 
aligned with the old democracies forever and the new 
democracies never?''
    But after World War II, there were some countries that were 
not new democracies, and they became new democracies because of 
the Marshall plan, because of NATO and Presidential leadership. 
So I look forward to hearing the testimony and participating in 
this grand public education program.
    Chairman Stevens. I believe Senator Campbell was next, 
Senator Specter. Senator Campbell.

                           PREPARED STATEMENT

    Senator Campbell. I think I will just submit a statement 
for the record, Mr. Chairman, since we are running on in time.
    [The statement follows:]

         Prepared Statement of Senator Ben Nighthorse Campbell

    As we open these three days of hearings on the important 
topic of NATO expansion, it is fitting to keep in mind one 
recently retired Senator who has played a pivotal role in 
advancing the cause of NATO expansion. I am referring to my 
good friend from Colorado, Hank Brown.
    Few people have played a more significant role for the 
cause of NATO expansion than Hank Brown. He started his efforts 
after the Iron Curtain crumbled and never let up. His devotion 
and successes in advancing NATO expansion has made Hank Brown a 
warmly regarded household name throughout Central Europe, 
including the three countries that have been invited to join 
NATO in this first round of expansion, Poland, Hungary and the 
Czech Republic.
    In fact, in the Fall of 1996, the people of Poland showed 
their highest regards for Senator Brown by awarding him 
Honorary Polish Citizenship in the name of the historic Capital 
of Poland, Krakow. This is one of Poland's most prestigious 
honors. To this day only two other Americans have received this 
honor--and both of them were Presidents--Ronald Reagan and 
George Bush.
    I recall a moving speech that Senator Mikulski--who sits on 
this committee with me--gave on the Senate Floor just after the 
Brown NATO Expansion Amendment passed last Fall. Senator 
Mikulski said that her mother had just placed a picture of Hank 
Brown in a place of honor on her fireplace mantle at home. I 
hope it is still there. This is but one illustration of how the 
debate over NATO expansion transcends party lines.
    Hank Brown has been one of the most effective advocates of 
securing freedom and peace for the people of Europe. I, for 
one, miss his valuable leadership in the Senate on the cause of 
NATO expansion.
    Today, we continue on his work as we further examine the 
cost and policy implications of NATO expansion. I join the two 
Co-Chairmen of today's hearing, Senator Stevens and Senator 
McConnell, and the rest of my colleagues, in welcoming the 
distinguished Secretary of State Albright and Secretary of 
Defense Cohen. We look forward to their testimony on this 
important issue.

                    STATEMENT OF HON. ARLEN SPECTER

    Chairman Stevens. Senator Specter.
    Senator Specter. Thank you, Mr. Chairman. I join my 
colleagues in commending you for having this hearing. I think 
it is very important for the Appropriations Committee to be 
involved in this important subject.
    I too favor expansion of NATO. I was really surprised a few 
years back, attending a North Atlantic assembly meeting, to see 
the Czech Republic there and Romania there with their placards 
at the NATO assembly meeting as observers. And I think the time 
has come, but it gives us an opportunity to examine some very 
important questions on who is going to pay for expansion and, 
beyond the contribution of the new members, the whole question 
of burdensharing, which has been of critical importance for a 
long time.
    Certainly the sense of the Congress has been that the other 
members of NATO have not borne an adequate share. And that is 
intermixed with the question of Bosnia. So this gives us a 
chance to take a look at some really fundamental questions.
    I think there is another aspect that bears analysis and 
that is what is happening with other key matters. For example, 
when you push air into one section of the balloon, it comes out 
in another section. There is enormous concern today about what 
Russia is doing with respect to Iran on the transfer of nuclear 
technology and missiles. And when we put the pressure on 
through NATO it comes out someplace else. So there are a great 
many indirect costs which have to be assessed here.
    So I think these are very important hearings and I look 
forward to the statements. Thank you very much.
    Chairman Stevens. Senator Reid, do you have a comment?

                      STATEMENT OF HON. HARRY REID

    Senator Reid. Mr. Chairman, I personally appreciate your 
holding not only this hearing, but the others you have held to 
give the Appropriations Committee a broad overview of our 
responsibilities. This is certainly in keeping with some of the 
other hearings that you have held and I hope that we will have 
more of these as we approach the date when we must vote on NATO 
enlargement.
    I understand the importance of this hearing. I understand 
the importance of the enlargement of NATO. My main concern, is 
that we, as elected leaders, must understand going into NATO 
expansion, the total costs associated with this venture. In the 
administration's February 1997 report to Congress on the 
enlargement of NATO, the total cost for new members was 
estimated at $35 billion, spread over 12 years, and the United 
States would be responsible for about $2 billion of the total.
    So, we do have responsibilities, when we realize we have 
not even paid in full our obligation to the United Nations, 
this is something we should be concerned with. I support the 
enlargement of NATO, but going into this, we must be aware and 
recognize the costs that could be borne and should be borne by 
us.

                           PREPARED STATEMENT

    I would ask that my full statement be made part of record.
    Chairman Stevens. Without objection.
    [The statement follows:]

                Prepared Statement of Senator Harry Reid

    The prospect of enlarging NATO has been an issue for the 
United States for several years now. In 1949, the North 
Atlantic Treaty was signed establishing the organization now 
known as NATO. The purpose of NATO was to tie Germany into a 
series of economic, political, and military relationships to 
help end Germany's threat to her neighbors. It was formed 
against the backdrop of emerging post-war tensions from the 
threat of Soviet expansionism and the concern over political 
and economic security throughout Europe. Now, with the 
dissolution of the Warsaw Pact, there is an opportunity to 
extend the stabilizing influence of NATO to include Eastern 
European nations.
    For almost 50 years, NATO has been a vital tool, an 
implement which we used to ensure the security of both our 
nation and of our European allies. The 16 member states pledge 
to preserve each country's security through a combination of 
political solidarity and military force. As we proceed into the 
next era, we must be careful of diluting the military 
effectiveness and political cohesion of this very successful 
alliance.
    The Senate has had only limited opportunity to fully 
consider the ramifications of NATO expansion and I do not 
believe that we have had adequate opportunity to debate the 
advisability and the ultimate cost of NATO Enlargement.
    In general, I support the benefits of NATO expansion. 
However, I temper my support and I have serious reservations 
about NATO enlargement due primarily to the costs associated 
with this venture. Analysts indicate that the total cost of 
NATO expansion, spread out over 10 to 13 years, will fall 
somewhere between $10 to $125 billion, depending upon the 
underlying assumptions and the projected threat. I have even 
seen some estimates as high as $150 billion. It is this wide 
disparity in enlargement costs that prevents me from lending my 
full and unqualified support for NATO enlargement.
    Americans, especially the elected officials within this 
chamber must remain aware that NATO Enlargement is not risk-
free, that it could increase the popularity of Russia's anti-
western politicians, and that there are significant costs 
associated with bringing three new member-states into the 
alliance. We, the elected officials, have a responsibility to 
fully understand the costs of NATO expansion before we commit 
the Nation to such an immense, undoubtedly expensive and risky, 
undertaking.
    As a member of the Appropriations Committee, I remain 
concerned about the true and total costs of expansion. I refer 
primarily to the financial costs, but we must remember that 
there are also political, military, and social costs associated 
with this enlargement.
    The United States, our NATO allies, as well as the new 
member states will all bear the costs and responsibilities 
associated with further Enlargement. To coin a phrase from 
Secretary Albright ``there is no free ride, new members will be 
expected to carry their fair share of the burden.''
    In the Administration's February 1997 ``Report to Congress 
on the Enlargement of NATO,'' it was estimated that total costs 
for new members was $27 to $35 billion spread out over 12 
years. The United States would be responsible for approximately 
$2 billion of the total.
    New NATO members will undoubtedly need to increase their 
defense spending in order to successfully integrate into NATO. 
For these new member countries, such expenditures on defense 
will place enormous pressure on already strained budgets and 
will divert money from other critical reforms. I further 
anticipate that America's costs for NATO expansion will be 
under additional pressure to grow knowing that some of our NATO 
allies have not yet fully committed themselves to sharing the 
financial burden.
    I remain concerned that it will only be a matter of time 
before Congress will be asked to appropriate additional funds 
to support the new members. I fully anticipate that the United 
States will eventually be asked to shoulder a greater burden 
than is estimated in the Report to Congress.
    As I just indicated, I remain concerned that the estimated 
costs for enlargement will prove to be inaccurate. While I 
support NATO Enlargement, I do not support NATO Enlargement at 
any and all costs.
    I remain committed to ensuring the continued viability of 
NATO in our ever-changing world. Now, as always, a stable and 
secure Europe is in our Nation's best interest. We realize that 
NATO enlargement does not come free: security and stability 
will always carry a price. However, I do believe that a more 
accurate estimate of expansion costs is in order before this 
treaty will be ripe to come before this body for consideration 
for ratification.

                     STATEMENT OF HON. CONRAD BURNS

    Chairman Stevens. Senator Burns.
    Senator Burns. Mr. Chairman, thank you for holding these 
hearings. My statement will be very, very brief.
    I have drawn the conclusion that as of this date, this 
Tuesday, the role of NATO is pretty much a role of 
stabilization in this great transition that is going on now in 
Europe. I am also concerned about the tightening amount of 
dollars that we have to spend, because it will affect our own 
ability to take care of our own people.
    And I continue to be concerned about some of the statements 
coming from the foreign minister of Russia, the export of arms 
and military technology to nations hostile to the USA. And then 
a very parochial and political thing back home of who is the 
enemy.
    So I look forward to your statements today and I thank the 
chairman for holding these hearings.
    Chairman Stevens. Senator Hutchison.

                 STATEMENT OF HON. KAY BAILEY HUTCHISON

    Senator Hutchison. Thank you, Mr. Chairman.
    I do thank both of you for taking the time to visit both 
with the Foreign Relations Committee and with our committee, 
because we do share in the responsibility here.
    I do not know a Member of Congress that does not support 
NATO. I think many in Congress are asking the questions, is 
NATO expansion going to strengthen the alliance of NATO, or is 
it going to be the unraveling of this great security alliance. 
I would hope that as we debate this issue that all of us focus 
on how we can strengthen the NATO alliance and take the 
opportunity to discuss these issues in relation to expansion, 
so that we can keep the alliance strong for a long time to 
come.
    I think that the questions that should be asked are: What 
is the mission of NATO going into the 21st century, and how 
does it differ from the reasons for the formation of NATO? That 
is not the issue that we will address today, but it is an 
important issue for strengthening the alliance.
    The issue that this committee will address is the second 
major issue, and that, of course, is the cost of NATO and the 
sharing of the cost in NATO, trying to make sure that America 
bears its fair share and its responsibility for world peace and 
European peace, but not bearing a burden that our taxpayers 
would feel is not commensurate with our responsibility.
    The cost estimates vary so much that I think and hope that 
this committee can get into some of the specifics at the proper 
time and when you are ready. To say that it is $35 billion over 
10 years, our share will be $2 billion, and then to have many 
of our allies in NATO jump up and say, well, we are not going 
to increase our share certainly requires explanation.
    The difference in the $35 billion figure and the $135 
billion figure that is put forward by other entities I think 
cries out for a clarification of just what is going to be the 
responsibility of our country and NATO in expansion. What is 
the basis of these cost estimates? How can we differ between 
$35 billion and $125 billion? I think these are the questions 
that this committee is going to focus on, and we want 
specifics. Of course, there is a difference in what we would 
prepare for and then the eventuality of actually having 
hostilities.
    So I appreciate your time. I think we are taking a first 
step but it is a first step of many, and I hope that we will 
get down to specifics. What are the cost estimates? What are 
the bases of the cost estimates? And not only the cost 
estimates of NATO but I as a member of this committee want to 
know if we are also going to be responsible for any of the 
costs that the countries coming into NATO would be required to 
have and, therefore, we would be required to share in their 
purchasing or their buildups.
    And finally, I would just say that what we do with the 
three countries that are before us today also has a bearing on 
the way this alliance proceeds to expand in the future, and I 
think we must be aware of the parameters that are set here and 
the precedent-setting value of that for the future.
    So I thank you for being here, and I think this is a very 
good first step. Thank you, Mr. Chairman.
    Chairman Stevens. Senator Bumpers.

                     STATEMENT OF HON. DALE BUMPERS

    Senator Bumpers. Mr. Chairman, as Mo Udall used to say, 
everything that needs to be said has been said, but everybody 
has not said it. Let me add that I know what I think, and I 
really came to hear what Secretary Cohen and Secretary Albright 
think.
    Having said that, let me say that I am probably going to 
support this treaty but with considerable misgivings. I would 
quote a member of the Duma, Sergey Baburin, when he said that 
expanding NATO would be a historic mistake. And I agree with an 
op ed piece in the Boston Globe I read last week which said, 
make no mistake about it, you can put the best face on this 
treaty, but the truth of the matter is, it is designed to hem 
Russia in. I think that could possibly carry a very heavy price 
for the United States in the future.
    Mr. Baburin said that the Duma recently refused to ratify 
an agreement over arms in Belarus because it wants to keep its 
options open on reintroducing missiles into that country. He 
also said NATO expansion will give a strategic character to 
U.S. tactical nuclear weapons. That is why Russia has recently 
changed its military doctrine and elevated the role of both 
strategic and tactical nuclear weapons as the mainstay of its 
defense. He went on to say that NATO expansion could undermine 
Russian citizens' trust in their government.
    I have always said that there might come a time for the 
expansion of NATO, but considering Russia's economic troubles 
and their obvious highly internal political disputes, I just 
think we are going to have a very difficult time ever getting 
the Russians to ratify the START treaties under NATO.
    Secretary Albright, I see you shaking your head. I will be 
anxious to hear your rebuttal to that, because I think some 
sophisticated person of Zhiranovsky's charismatic qualities but 
with a doctor's degree could become more credible and be the 
next real threat we face from Russia.
    So, as I say, I am probably going to vote for the treaty. 
But, I have not committed to vote for it. If I do, I will do it 
with considerable misgivings as to the future.
    Thank you, Mr. Chairman.
    Chairman Stevens. Senator Harkin.

                      STATEMENT OF HON. TOM HARKIN

    Senator Harkin. Thank you, Mr. Chairman.
    Again, I want to associate my remarks with the Senator from 
Texas, Senator Hutchison, who raises some really serious 
questions.
    The controversy over the expansion of NATO is easy to 
understand. It is an important security arrangement. We all 
support NATO. But we are concerned about what may happen to 
NATO in the future. There are costs or benefits, but we do not 
know what the parameters of these are. I do not even know the 
genesis of the proposal to expand NATO. Where did this spring 
from? As I have tried to look back in time to find out where 
this idea really sprang from, it seems like it came out of a 
political campaign and then took on a life of its own.
    Beyond, that I cannot seem to find the wellspring of this 
idea.
    Senator Reid. What do you have against political campaigns?
    Senator Harkin. Well, political campaigns are fine.
    Chairman Stevens. Let's not start a debate now.
    Senator Harkin. But who is going to pay the cost? We have 
estimates up to $35 billion over a 13-year period, the U.S. 
share $1.5 to $2 billion. The Congressional Budget Office [CBO] 
says it will cost $61 to $125 billion, with the U.S. share at 
$5 to $19 billion. Who is right?
    How much will it cost, and, again, who is going to pay? The 
administration position is that the United States will pay no 
more than 15 percent of the cost. Our European allies seem to 
disagree. The British defense minister is quoted to have said, 
``The accession of new members will result in a proportionate 
reduction in the United Kingdom's share of NATO common 
budgets.''
    Well, if our allies expect to pay less for NATO, who is 
going to pay more? Us? I do not know if it has been mentioned 
yet, but the International Monetary Fund has raised serious 
concerns about the expansion and the costs to the new nations. 
The IMF has questions regarding the billions of dollars of 
loans that are conditioned on fiscal constraint in nations like 
Poland, Hungary and the Czech Republic.
    Well, what is going to happen when they have to meet those 
loan payments under IMF conditions? Will that mean that we jump 
in and pay more of the expansion costs?
    Also, I am wondering about the purpose of expansion. More 
and more I am hearing that the purpose of expanding NATO is for 
democracy, human rights, and market-based economies. Well, 
fine. We are all for that. But would that not be more in line 
with expanding the Organization for Security and Cooperation in 
Europe? And why would it not be receiving that kind of 
attention, if we want to expand and protect democracy, human 
rights, and market-based economies, rather than using the NATO 
organization?
    Secretary Albright, I have heard you compare the NATO 
expansion to the Marshall plan. But I am aware or at least I am 
informed that there were no military aspects of the Marshall 
plan. It was economic. So if we are looking at this from an 
economic means, then why are we not using a different 
organization rather than using NATO?
    My fear is that NATO expansion will not be a Marshall plan 
to bring stability and democracy to the newly freed European 
nations but, rather, a Marshall plan for defense contractors 
who are chomping at the bit to sell weapons and make profits. 
Billions of dollars in military upgrades are at stake in this 
agreement.
    Last, what is going to happen about future countries? We 
already have a waiting list--Slovenia, Slovakia, Romania, 
Bulgaria, Estonia, Latvia, Lithuania, Macedonia, and Albania. 
You can just keep going on. What will the cost be to push it 
beyond the three countries that we are talking about?
    So I have some very serious questions as to the cost and 
the benefits of NATO expansion, what the genesis of it is, and 
where it is leading and what is its purpose?
    Now, having said that, I do not know whether I am going to 
vote for it or not, but I have a lot of serious questions and 
hope that these cost and benefit analyses will be done to the 
satisfaction of this Senator and, I hope, of the Appropriations 
Committee.
    Thank you very much. Thank you, Mr. Chairman.
    Chairman Stevens. Thank you. Senator Gorton.

                     STATEMENT OF HON. SLADE GORTON

    Senator Gorton. Mr. Chairman, the North Atlantic Treaty 
Organization has been the most successful such organization in 
human history because it prevented the very catastrophe that it 
was designed to prevent. And the investment of the United 
States and of our Western European allies in that organization 
has been, in my view, perhaps the best-spent money that this 
Nation has ever spent on its national security.
    The organization was created to provide a degree of 
security to its members that did not exist and could not have 
existed without that organization. It provided that security, 
but it provided a great deal more. That security allowed for 
the economic growth and prosperity of Western Europeans and, 
not at all incidentally, our own. It resulted in ending 
historic enmities which had caused war after war on the 
European continent.
    And so it provided both security and freedom and 
prosperity. And as a result, it created a tremendous 
attraction, a magnetism toward nations that longed for the same 
degree of security and freedom and prosperity, longed to be a 
part of it, and who had as the central focus of their foreign 
policies, once they became free, becoming a part of such a 
successful organization.
    The case against expanding the North Atlantic Treaty 
Organization today is, I suspect, exactly identical to the case 
against creating it in the first place, that it would aggravate 
the Soviet Union or Russia. That turned out not to be the case 
then; it will turn out not to be the case today.
    Costs are significant, but they are not the significant 
question, in my view, before the Senate. I believe that the 
North Atlantic Treaty Organization should be open to all 
nations in Europe that seek the same goals that we seek, that 
wish to be secure themselves, that have shown a commitment to 
liberty and democracy and opportunity for their citizens. And 
my only regret, my sole regret in this case is that the list of 
potential NATO members this time around is limited to these 
three. The administration made a mistake. It seems to me it 
made a mistake in not being more open and more aggressive in 
that connection.
    So I am comforted by the fact that it is our official 
policy that this is only the first step and that other 
countries, as they become qualified for NATO membership, will 
be offered it under the same circumstances. But I think the 
more promptly and the more enthusiastically that we ratify this 
treaty the better off we will be, the better off Western Europe 
will be, the better off the new three nations will be, and the 
greater our chances for long-term peace and prosperity.
    Chairman Stevens. Senator Craig.

                    STATEMENT OF HON. LARRY E. CRAIG

    Senator Craig. Let me welcome, as all of you have, our two 
Secretaries to the committee today. I am here to listen. I am 
not a convert as to the proposal you bring. I think it has many 
ramifications not yet clearly understood by the Senate, and I 
am not prepared to vote for ratification at this time and I am 
not confident that I ever will be.
    But thank you for coming.
    Chairman Stevens. Senator Bennett.

                  STATEMENT OF HON. ROBERT F. BENNETT

    Senator Bennett. Thank you, Mr. Chairman. I have just 
returned from a week in Europe. I went over with Senator Roth 
and Members of the House to the North Atlantic assembly, which 
was held in Romania. We went to Estonia and then to Germany, 
where I have had the full treatment from Helmut Kohl, as well 
as the defense minister and the foreign minister.
    Clearly this was the main topic that was discussed in all 
of these countries. I went over there somewhat skeptical about 
NATO expansion. I have met with Senator Hutchison and with 
former Senator Sam Nunn, and I think they raise very 
legitimate, worthwhile issues that need to be examined.
    At the same time, coming back from this experience in 
Europe, meeting with the people over there, I recognize that 
there are very valid reasons for us to consider this, and I 
welcome both the Secretaries here and appreciate their adding 
to my educational experience.
    Chairman Stevens. Senator Shelby.

                  STATEMENT OF HON. RICHARD C. SHELBY

    Senator Shelby. Mr. Chairman, I have a written statement 
that I would like to be made part of the record. With that I 
have just got a few brief remarks because we are all waiting on 
the Secretaries.
    Everybody on the committee knows this would be a huge 
expansion of our security commitments. Although it looks on its 
face as worthy and it looks like an historic opportunity, I 
think ultimately the American people are going to want to know 
what it is going to cost us. Is it going to really benefit us? 
And how is it going to benefit us?
    I am looking forward to both the Secretaries answering 
those questions here today. Thank you, Mr. Chairman.
    [The statement follows:]

            Prepared Statement of Senator Richard C. Shelby

    I strongly believe that the United States should commit to 
a security guarantee with many of the nations of eastern and 
central Europe. Before we admit new nations into NATO, however, 
we must ascertain the political and economic ramifications of 
an expanded NATO, and in this respect, I believe the 
Administration has not come to terms with the political and 
budgetary consequences of its proposal. First, notwithstanding 
the Administration's claims, NATO expansion will constitute a 
new division of Europe. Second, it has yet to provide Congress 
with a realistic cost estimate of NATO expansion. In the end, I 
am concerned that thus far the case being made for NATO 
expansion is the latest manifestation of a twisted logic: When 
an institution's mission becomes obsolete, expand it and hope 
that it one day becomes relevant. I believe NATO can have an 
important role to play, but the Administration has an 
obligation to fully define that role and account for the costs 
associated with it. I look forward to hearing today's testimony 
and hope Secretaries Albright and Cohen will address my 
concerns.

                    ADDITIONAL SUBMITTED STATEMENTS

    Chairman Stevens. We have received several statements from 
other members and they will be included in the record at this 
point.
    [The statements follow:]

               Prepared Statement of Senator Thad Cochran

    Mr. Chairman, this series of hearings will help our 
Committee examine the costs and impacts of expanding the 
membership of the North Atlantic Treaty Organization to include 
Poland, the Czech Republic and Hungary. The proposed changes in 
the 1949 Washington Treaty will begin a new era in our policy 
in Eastern Europe if they are approved by the Senate.
    It is my understanding that many of the cost estimates--
both for the new members, as well as the United States--will 
not be available until December, when a NATO analysis is 
complete and subsequent U.S. estimates can be made. However, I 
believe that it is important that we begin now to carefully and 
thoughtfully examine the costs associated with expanding NATO.
    With cost estimates varying depending upon assumptions, it 
is important that we have reliable information upon which to 
base our decisions. Under the terms of the balanced budget 
agreement, we all understand that the amount of funds available 
to finance defense operations as a whole will not increase in 
the near term. It is important that the Administration provide 
us with a detailed proposal of what currently-funded items will 
be reduced or eliminated to finance the U.S. commitment to NATO 
expansion, if ratified. I believe that members of the Senate 
are particularly concerned whether the costs to be paid by the 
United States will affect our readiness, or result in deferred 
development or maintenance of our defense infrastructure.
    I look forward to the testimony of our distinguished panel 
of witnesses.
                                ------                                


           Prepared Statement of Senator Frank R. Lautenberg

    I welcome Secretary Albright and Secretary Cohen to the 
Appropriations Committee this morning.
    As the Senate considers whether or not it intends to give 
its advice and consent to the expansion of NATO, this type of 
exchange with the Administration is extremely helpful.
    Many of the arguments in favor of NATO expansion are 
compelling and, on balance, I'm inclined to support expansion. 
However, I do have some concerns that I'd like the 
Administration to address.
    First, I think it is imperative for the Administration to 
clarify the costs. The disparity in estimates between the 
Administration, the CBO, and the Rand Corporation has caused a 
tremendous amount of confusion about the true costs and who 
will pay for those costs. We need to know if this round of NATO 
expansion will cost $27 billion, $35 billion, $60 billion or 
more.
    We also need to know more clearly what the cost will be to 
the American taxpayer. Under the Administration's estimate, the 
American people will be asked to pay for no more than 16 
percent of the direct costs of NATO expansion. The 
Administration assumes that existing allies and new member 
countries will pay the bulk of the costs.
    Unfortunately, current NATO allies are complaining about 
paying a substantial portion of the costs. I know NATO is 
preparing a final cost estimate, and that estimates will be 
refined.
    As that process moves forward, it's vital for the 
Administration to assure the American people that they will not 
be asked to pay an unfair share of the burden for expanding 
NATO. If expanding NATO is in America's interest, then it is 
also in Europe's interest. The Europeans must be willing to pay 
their fair share of the expansion costs.
    I look forward to hearing from Secretary Albright and 
Secretary Cohen about these and other issues today.

    Chairman Stevens. Madam Secretary and Secretary Cohen, I 
want you to know that this is the most attendance we have had 
at this committee since we had our photograph taken. 
[Laughter.]
    I am delighted that you have attracted my friends here. You 
see the frustration of being an appropriator. They all, 
including myself, have very little occasion to speak before 
cameras on matters of current concern.
    I do want to make one other announcement I did not make, 
and that was that after the first of the year we do intend to 
have hearings for those in academia and private life who will 
express points of view on costs. We will not go into Senator 
Helms' area, but we want to continue and have public hearings 
on the costs of this matter that is before us.
    But let me thank you for your patience and your 
consideration in being here. Bill, with due courtesy, we will 
call on Secretary Albright first.

                  STATEMENT OF HON. MADELEINE ALBRIGHT

    Secretary Albright. Thank you, Mr. Chairman and Secretary 
Cohen.
    Mr. Chairman and members of the committee, I have listened 
with great interest to your opening statements, and I would 
agree that we are launched on one of the great debates of our 
time and that we welcome such a debate. I thank you very much 
for being a part of it.
    When I testified before the Foreign Relations Committee, an 
article was written about the fact that this is what hearings 
ought to be like; it is where difficult questions are posed and 
answers are provided, and all views are made known. I think 
that from listening to all of us, I think we are going the same 
direction here, and I am very grateful for it.
    Secretary Cohen and I are very pleased to come before you 
today to urge your support for the admission of the Czech 
Republic, Hungary, and Poland to NATO. This initiative is the 
culmination of years of hard work by the United States, by 
NATO, and by the new democracies that wish to join our 
alliance. All 16 NATO leaders have approved it, and many 
Members of Congress have urged it.
    Now the fate of NATO enlargement is in your hands, and I 
welcome this because I know the commitment NATO enlargement 
entails will only be meaningful if the American people and 
their representatives understand and accept it. I am very glad 
that this process has begun as early as it has, and I know that 
before you decide we have to continue to address many of your 
questions.
    As appropriators, you will be highly focused, and rightly 
so, on the issue of costs, and as appropriators I know you 
believe that the cost of any public initiative must be 
justified by its benefits. I want to explain today how America 
will benefit from the investment we ask you to make and why I 
believe the costs will be reasonable and equitably shared.
    First, a larger NATO will make us safer by expanding the 
area in Europe where wars simply do not happen. This is the 
productive paradox at NATO's heart. By making clear that we 
will fight, if necessary, to defend our allies, we make it less 
likely that our troops will ever be called upon to do so.
    Now you may say that no part of Europe faces any immediate 
threat of armed attack today. That is true, for the first time 
in history, and the purpose of NATO enlargement is to keep it 
that way.
    It is also fair to ask if our interest in preventing war in 
central Europe is vital enough to justify a security 
commitment. Some imply it is not. But let us not deceive 
ourselves. The United States is a European power. We have an 
interest in the fate of the 200 million people who live in the 
nations between the Baltic and the Black Seas.
    We waged the cold war in part because these nations were 
held captive. We fought World War II in part because they had 
been invaded. If there were a major threat to the security of 
their region, I am certain we would choose to act, enlargement 
or no enlargement. Expanding NATO now is simply the surest way 
to prevent that kind of threat.
    The second reason why enlargement passes the test of 
national interest is that it will make NATO stronger and more 
cohesive. The Poles, Hungarians, and Czechs are committed to 
NATO and to its principles of shared responsibility. Their 
forces have already risked their lives alongside ours from the 
gulf war to Bosnia. Now they are asking to assume the 
obligations of mature democratic statehood and to start taking 
responsibility for the freedom and security of others. That is 
an offer we should not refuse.
    For whatever challenges the future may bring and wherever 
we may face them, it will be in our interest to have a vigorous 
and larger alliance with those European democracies that share 
our values and our determination to defend them.
    Mr. Chairman and members of the committee, the third reason 
why a larger NATO serves our interests is that the very promise 
of it gives the nations of central and Eastern Europe an 
incentive to solve their own problems. To align themselves with 
NATO, aspiring countries have strengthened their democratic 
institutions. They have made sure that soldiers answer to 
civilians. They have signed 10 major accords that, taken 
together, resolve virtually every potential ethnic and border 
dispute in the region.
    I know that some of you have been concerned that a larger 
NATO might involve us in border and ethnic conflicts such as 
the one in Bosnia. On the contrary, the decision to expand the 
alliance has encouraged the resolution of exactly the kind of 
disputes that might have led to future Bosnias.
    I have been a student of central European history and I 
have lived some of it myself. When I see Romanians and 
Hungarians building a genuine friendship after centuries of 
enmity, when I see Poles, Ukrainians, and Lithuanians forming 
joint military units after years of suspicion, when I see 
Czechs and Germans overcoming decades of mistrust, and when I 
see central Europeans confident enough to improve their 
political and economic ties with Russia, I know something 
remarkable is happening.
    NATO is doing for Europe's east precisely what it did for 
Europe's west after World War II. This is another reminder that 
the contingencies we do not want our troops to face are far 
more easily avoided with NATO enlargement than without it. In 
short, Mr. Chairman, a larger NATO will make America safer, 
NATO stronger, and Europe more peaceful and united. That is 
what we gain.
    But we must also think about what would happen if we were 
to turn the new applicants away. That would mean freezing NATO 
at its cold war membership and preserving the old Iron Curtain 
at its eastern frontier. It would mean locking out a whole 
group of otherwise qualified democracies simply because they 
were once, against their will, members of the Warsaw Pact.
    Why would America choose to be allied with Europe's old 
democracies forever but its new democracies never? That is the 
one point that Senator Mikulski predicted I would make. Were we 
to do that, confidence would crumble in central Europe, leading 
to a search for security by other means, including arms 
buildups and competitions among neighbors. This would be the 
price, the very high price, of not enlarging NATO.
    We have chosen a better way. We have chosen to look at the 
landscape of the new Europe and to ask a simple question. Which 
of these nations that are so clearly important to our security 
are ready and able to contribute to our security? The answer to 
that question is before the Senate awaiting your affirmation.
    Mr. Chairman, I know I do not need to tell you that our 
security has never come without a price. So let me address the 
very real costs that this initiative will entail. Last 
February, the administration made a preliminary estimate of the 
total costs of a larger NATO. Since then we have settled on 
three candidates and we are gaining a clearer understanding of 
the capabilities they bring. NATO is now assessing the resource 
implications of enlargement for its common-funded budgets. That 
assessment will be submitted to us for approval in December.
    NATO is also engaged in an intensive effort to determine 
the level of forces our current and future allies will need to 
put at the disposal of the alliance. NATO will not place a 
price tag on these military improvements, but it will define 
what is required.
    I can assure you that we will continue to approach this 
process with several basic principles in mind. The first and 
most important principle is that the amount we and our allies 
pay for a larger NATO must be a function of concrete military 
requirements. Our discussion in these hearings and our 
consultations with our allies should focus on defining the 
level of military capability we want our old and new allies to 
have in this changed security environment, and then making sure 
that they commit to that level.
    This may seem counterintuitive, Mr. Chairman, but even as 
we work to ensure this initiative does not cost too much, we 
also need to be careful that it does not end up costing too 
little. In fact, it now appears, as we examine the assets and 
infrastructure of our new allies, that our new allies bring to 
NATO, that the commonly funded cost of integrating their armed 
forces will turn out to be lower than we estimated in February.
    Either way, the deciding factor will be bang, not buck. If 
we can integrate these nations into the alliance, maintain 
NATO's capabilities, and acquire the new ones we need at a 
lower cost, that will be good news. But we must also be wary of 
false economies and spend no less than we need to keep NATO 
strong.
    A second principle is that the costs within NATO's common-
funded budget must be equitably shared. The United States pays 
about 25 percent of these costs, and that will not change.
    A third principle is that each ally, old and new, must do 
its share at home to meet its military obligations to NATO. 
NATO is a collective defense alliance. We need to know that at 
moments of crisis each member will be able to deliver on its 
commitment to help defend new allies. The President, Secretary 
Cohen, and I have been making these points loud and clear to 
our current and future allies, and our message has been 
received. I am confident today that the costs of a larger 
alliance will be real but affordable and that NATO will emerge 
from this process with its military capabilities as strong as 
ever.
    Let me explain why. First of all, I know that many of you 
are worried that our new allies may not be able to pull their 
weight in NATO. As we all know, just 10 years ago they were 
members of the Warsaw Pact. Their militaries are not as 
advanced as those of most of the NATO allies. I know that you, 
Mr. Chairman, have expressed concern that we will have to fund 
a massive program of assistance to help these countries meet 
their new obligations.
    I can assure that this will not be necessary. These 
countries do not face the kind of threat our allies faced in 
the 1950's. They have time to achieve a mature military 
capability. What is more, these are not ruined nations 
recovering from the devastation of a hot war. If you go to 
Budapest, Prague, and Warsaw, which I know many of you have, 
you will see some of the most vibrant economies in Europe. 
These economies have grown by an annual average of 4 percent in 
the last 3 years. Each of these nations is a member of the 
OECD, which admits only the most advanced industrial economies. 
Each has graduated or is about to graduate from our SEED aid 
program.
    In fact, Poland now funds its own military assistance 
program to support its neighbors, Ukraine and Lithuania. All 
three of these nations have paid their own way to send troops 
to Bosnia and other trouble spots in Africa, Latin America, and 
Asia, and we have seen clear signs that all three have the 
political will to meet the responsibilities of NATO membership. 
Poland already has the most advanced armed forces in the 
region. Its government has unveiled a 15-year defense plan 
which includes substantial resources for further modernization.
    The Czech Government has pledged to increase defense 
spending by 0.1 percent of GDP a year for the next 3 years. It 
has unveiled a new budget that fulfills that commitment, 
despite this summer's costly flooding disaster. As a result, 
Czech defense spending will rise by 17 percent next year, the 
equivalent of a 1-year $40 billion increase in America's 
defense budget. The Czechs still have much work to do, but they 
are determined to get it done.
    Hungary has also committed itself to increased defense 
spending by 0.1 percent of GDP a year over the next 5 years, 
and while Hungary may not yet be in NATO, NATO is already in 
Hungary. More than 100,000 American troops have passed through 
NATO bases in that country on their way in or out of Bosnia. 
Without hesitation, Hungary has fulfilled its responsibilities 
as the supply lifeline for the largest and most complex 
deployment in NATO's history.
    Some people have argued that these new democracies should 
not be asked to bear additional military burdens at a time when 
they are still undergoing difficult economic transformations. 
But these nations will be modernizing their armed forces in any 
case, and they understand that in the long run it will be 
cheaper to do so within NATO than outside it.
    Ultimately, only the people of these countries can decide 
what is best for their future. Today, in all three, solid 
public majorities and every mainstream party support membership 
in NATO. They are telling us they see no contradiction between 
security and prosperity, and we should not substitute our 
judgment for theirs.
    Mr. Chairman and members, I know that many of you are 
equally concerned about the willingness of our old allies to 
meet their new commitments. Many of our Western European allies 
are facing economic difficulties of their own, and many are 
reducing public spending so they can participate in a single 
European currency. But when the 16 allied leaders gathered in 
Madrid in July, they made a commitment. They stated clearly 
that a larger NATO would carry costs, that those costs would be 
manageable, and that they would be met.
    I am confident that our allies will pay their fair share of 
the commonly funded costs of enlargement because we are going 
to determine those costs together. As for their national 
defense spending, that is something we cannot control. But I 
believe that over time they can and will take necessary steps.
    NATO's history gives us ample reason to believe that when 
we set a long-term goal together, we meet it together. Our 
European allies' commitment to the cause of a larger, stronger 
NATO is as deep as ours, and that is no surprise. They need 
this alliance. They provide the majority of its ground troops. 
And over the course of history they have provided the 
battlefield. They have the greatest possible stake in seeing 
our initiative succeed.
    Mr. Chairman, those are my reasons for confidence, and I 
base my assessment on experience and on my best judgment of 
what the immediate future may bring. But, you know, there is 
one piece of equipment that I do not have at the State 
Department, although I do hope that one day the Appropriations 
Committee will fund it, and that is a crystal ball.
    None of us can now know precisely what challenges we will 
be facing in Europe 10, 20, or 50 years down the road. As you 
know, President Clinton has pledged that the process of 
enlargement will continue after 1999. A new round of 
enlargement will carry cost implications that we cannot predict 
today. But the Senate would still have to ratify the admission 
of any additional members and approve any new costs.
    I understand that for Congress our experience in Bosnia, as 
you have stated, introduces another element of uncertainty, and 
I acknowledge that our mission in that country has cost more 
than the administration originally estimated. But I honestly 
believe that the circumstances of NATO enlargement are 
different. It is intrinsically difficult to predict the cost of 
an overseas military deployment. The costs of NATO enlargement, 
on the other hand, are more straightforward. They are budgeted 
in advance and we have a veto.
    We do not run our alliance on supplemental appropriations. 
I know history offers other reasons to doubt our ability to 
predict our future costs, and you have reminded us, Mr. 
Chairman, that when NATO was created Secretary of State Acheson 
was asked by Senator Hickenlooper of Iowa if it would require 
the stationing of American troops in Europe. And, as you said, 
he replied that it would not. Today you understandably fear 
that history will repeat itself.
    I agree that this story is instructive. It helps us 
remember that when we decided to keep our troops in Europe in 
the 1950's it was not just to meet a formal obligation. We did 
so because there were new signs of Communist expansion in the 
world, because we were concerned about the survival of 
democracy in Europe, and because it was in our national 
interest to meet that threat.
    I do not believe we will face such a threat in Europe in 
the foreseeable future. If I am proven wrong and we are called 
upon to defend our new allies, then the costs of a larger NATO 
would obviously grow. But then, if such a dire threat were to 
arise, the cost of our entire defense budget would grow, 
whether we enlarge NATO or not.
    If I am wrong about our allies' willingness to pay their 
share of the costs, that too is a problem we would face with or 
without enlargement. For if our interest in the fate of 
Europe's newly free nations were to be put at risk, we would 
not stand idly by, whether we had a formal treaty commitment to 
defend Poland, Hungary, and the Czech Republic or not.
    The effect of NATO enlargement is to state plainly in 
advance what we would do, in any case wish to do, if the 
security of central Europe were threatened. In this way, it is 
more likely that we will be able to deter such a threat from 
ever arising.
    That is why I am more comfortable facing an uncertain 
future with a larger, stronger NATO than I would be were NATO 
to stand still. I believe that President Vaclav Havel so 
crisply put it when he came to Washington earlier this month, 
that ``even the most costly preventive security is cheaper than 
the cheapest war.''
    Here is the strongest, most successful, most dependable 
alliance we have ever had. Here are three democracies that wish 
to share the responsibilities of that alliance. Here are three 
nations that will help us bear the cost of defending freedom in 
Europe and beyond because they know the cost of losing freedom.
    In the conduct of foreign policy, we are often preoccupied 
with crisis. We spend much of our time managing disagreements 
with nations that do not see the world exactly as we do. In a 
world where attention to what is wrong often drowns attention 
to what is right, we must take care not to forget our friends. 
We must not take for granted those upon whom we can rely.
    Mr. Chairman, the first commandment of foreign policy is 
much the same as the first commandment of politics--secure your 
base. Indeed, across the whole scope of human activity from the 
life of the family and the neighborhood to the politics of our 
Nation and the world, when we want to get something done, we 
start by banding together with those who are closest to us in 
values and outlook.
    That is why we cultivate our partnership with Europe and 
that is why we seek to extend that partnership to those newly 
free nations that have always been our allies in spirit, if 
not, in fact, and we do so not just to advance our interests 
across the Atlantic but because we need dependable democratic 
allies to advance our interests in every part of the world.
    Mr. Chairman and members, some questions were raised about 
Russia, and I do not want to take too much time on this now so 
that Secretary Cohen can speak, but let me just say that the 
reason that we are doing what is going on here is that the 
status quo was breached by an earthquake. And that was the end 
of the Soviet Union.
    Clearly it is that change that has required this to go 
forward. There is no way to preserve NATO as it is currently 
configured because the world is different because of the 
breakup of the Soviet Union.
    We have taken into consideration the fact that it is 
important to help Russia now and the other states of the former 
Soviet Republics of the former Soviet Union to move toward 
democratic forms of government, and, Senator McConnell, the 
funding for the New Independent States was decided long before 
the Helsinki summit and it is in our interest because it is a 
way to try to anchor the democratic movement.
    Second, we have established, as you all know and we can 
talk about it in much more detail, this Permanent Joint 
Council, where Russia has a voice and not a veto. And while the 
Russians will continue to say they do not like NATO 
enlargement, the record is showing that they are adjusting to 
this and that it has in no way changed our relationships with 
them as we manage to develop a new relationship with them.

                           PREPARED STATEMENT

    I do believe that START will be ratified in the Duma and 
the chemical weapons convention is also on the way to being 
ratified there. But I do not want to take more time on that.
    Chairman Stevens. Thank you very much.
    [The statement follows:]
                Prepared Statement of Madeleine Albright
    Mr. Chairman, members of the Committee, I am very pleased to come 
before you today, together with Secretary Cohen, to urge your support 
for the admission of the Czech Republic, Hungary and Poland to NATO.
    This initiative is the culmination of years of hard work--by the 
United States, by NATO, and by the new democracies that wish to join 
our Alliance. All 16 NATO leaders have approved it. Many members of 
Congress have urged it.
    Now the process of advice and consent has begun, and the fate of 
NATO enlargement is in your hands. Our friends in Europe and around the 
world are watching you. For they know that the United States is unique 
in the power our constitutional system grants to the Senate over 
foreign policy, especially over treaties.
    I welcome this, because I know that the commitment NATO enlargement 
entails will only be meaningful if the American people and their 
representatives understand and accept it.
    That is why I am glad, Mr. Chairman, that you have begun these 
hearings at such an early stage in the process, and why I am happy that 
you will be joined in your examination by the Foreign Relations, 
Budget, and Armed Services Committees, by the NATO Observers' Group, 
and by the House of Representatives.
    I am hopeful that with your support, and after the full national 
debate to which these hearings will contribute, the Senate will embrace 
the addition of new members to NATO. I also know that before you 
decide, the Administration must continue to address many questions.
    As appropriators, you will be highly focused, and rightly so, on 
the issue of costs. And as appropriators, I know you believe that the 
cost of any public initiative must be justified by its benefits. I want 
to explain today how America will benefit from the investment we ask 
you to make, and why I believe the costs will be reasonable and 
equitably shared.
    Let me begin by asking you to recall the situation America faced in 
the world during the first year of this decade. The Cold War had ended. 
Our nation would no longer face a single, overriding threat 
concentrated along a well defined frontier in Europe. Many people 
wondered--and I know this is one of your concerns, Mr. Chairman--
whether we needed to continue paying such close attention to Europe and 
NATO in the face of new challenges and opportunities in Asia.
    But we did not lose sight of our interests across the Atlantic. Two 
world wars in this century already taught us that when Europe and 
America stand apart, we always pay a terrible price. What is more, we 
recognized that the triumph of freedom in Europe did not mean we could 
take its security for granted.
    Before long, we saw Russia, with our help, build the foundations of 
a modern market democracy; but we knew and still know that its success 
is not assured. We saw war and genocide spread across the former 
Yugoslavia; only our leadership of a NATO coalition put an end to that 
horror. On Europe's horizon, we saw rogue states develop dangerous 
weapons that might have our allies within their range and in their 
sights. We knew enough from history and human experience to know that a 
grave threat, if allowed to arise, would arise.
    In that first year of the post-Cold War era, another event proved 
the importance of our transatlantic partnership. American troops were 
sent to the Gulf to lead a coalition against a tyrant's aggression. And 
with us stood soldiers, sailors and aviators from virtually all our 
NATO allies--joined, I might add, by men and women from some of the 
brand new democracies of central Europe. We were reminded then that 
when we are faced with new challenges, it helps to have old friends at 
our side.
    If a serious challenge were to develop in Asia or elsewhere, Mr. 
Chairman, the last thing we would need is instability in Europe--and 
the first thing we would want is for our European allies and partners 
to stand with us. Indeed, whatever challenges the future may bring, it 
will be in our interest to have a vigorous and larger alliance with 
those European democracies that share our values and our determination 
to defend them. It is that conviction we ask you to embrace today.
    We recognize that NATO expansion involves a solemn expansion of 
American responsibilities in Europe. As Americans we take our 
commitments seriously, and we do not extend them lightly. Any major 
extension of American commitments must advance our fundamental national 
interests. Let me explain specifically why welcoming the Czech 
Republic, Hungary and Poland into NATO meets that test.
    First, a larger NATO will make us safer by expanding the area in 
Europe where wars simply do not happen. This is the productive paradox 
at NATO's heart: By making clear that we will fight, if necessary, to 
defend our allies, we make it less likely that our troops will ever be 
called upon to do so.
    Now you may say that no part of Europe faces any immediate threat 
of armed attack today. That is true, for the first time in all of 
European history--in part because the existence of NATO has helped 
deter such a threat. And the purpose of NATO enlargement is to keep it 
that way.
    It is also fair to ask if our interest in preventing war in central 
Europe is vital enough to justify a security commitment. Some imply it 
is not. But let us not deceive ourselves.
    The United States is a European power. If we have an interest in 
the lands west of the Oder River, then we surely have an interest in 
the fate of the 200 million people who live in the nations between the 
Baltic and Black Seas. We waged the Cold War in part because these 
nations were held captive. We fought World War II in part because they 
had been invaded. We know that half a continent cannot be secure if the 
other half is in turmoil.
    Now that the nations of central Europe are free, we want them to 
succeed and we want them to be safe. For if there were a major threat 
to the security of their region, if we were to wake up one morning to 
the sight of cities being shelled and borders being overrun, I am 
certain we would choose to act, enlargement or no enlargement. 
Expanding NATO now is simply the surest way to prevent that kind of 
threat from arising, and thus the need to make that kind of choice.
    Mr. Chairman, the second reason why enlargement passes the test of 
national interest is that it will make NATO stronger and more cohesive. 
The Poles, Hungarians, and Czechs are passionately committed to NATO 
and fully accept its principles of shared responsibility. Experience 
has taught them to believe in a strong American leadership role in 
Europe. Their forces have already risked their lives alongside ours 
from the Gulf War to Bosnia. Recently, Czech soldiers joined our 
British allies in securing a police station from heavily armed Bosnian 
Serb extremists.
    When the President went to the Madrid summit in July, he insisted 
that NATO invite only the strongest candidates to join now. We settled 
on three nations that will make a tangible military contribution to the 
Alliance, three nations that have been our dependable partners ever 
since they won their freedom--from the fight against nuclear 
proliferation, to our effort to reform the U.N., to our support for 
human rights--three nations that will be good allies.
    Poland, Hungary and the Czech Republic do not look at NATO as a one 
way street of reassurance. They are asking to assume the obligations of 
mature democratic statehood and to start taking responsibility for the 
freedom and security of others. That is an offer we should not refuse.
    Mr. Chairman, the third reason why a larger NATO serves our 
interests is that the very promise of it gives the nations of central 
and eastern Europe an incentive to solve their own problems. To align 
themselves with NATO, aspiring countries have strengthened their 
democratic institutions. They have made sure that soldiers answer to 
civilians, not the other way around. They have signed 10 major accords 
that taken together resolve virtually every potential ethnic and border 
dispute in the region.
    I know that some of you have been concerned that a larger NATO 
might involve us in border and ethnic conflicts such as the one in 
Bosnia. On the contrary. The decision to expand the Alliance has 
encouraged the resolution of exactly the kind of disputes that might 
have led to future Bosnias. In fact, the three states we have invited 
to join NATO have resolved every potential problem of this type.
    I have been a student of central European history and I have lived 
some of it myself. When I see Romanians and Hungarians building a 
genuine friendship after centuries of enmity, when I see Poles, 
Ukrainians and Lithuanians forming joint military units after years of 
suspicion, when I see Czechs and Germans overcoming decades of 
mistrust, when I see central Europeans confident enough to improve 
their political and economic ties with Russia, I know something 
remarkable is happening.
    NATO is doing for Europe's east precisely what it did for Europe's 
west after World War II. It is helping to vanquish old hatreds, to 
promote integration and to create a secure environment for economic 
prosperity.
    This is another reminder that the contingencies we do not want our 
troops to face, such as ethnic conflict, border skirmishes, and social 
unrest are far more easily avoided with NATO enlargement than without 
it. And if such contingencies were to arise, let me remind you that 
NATO operates by consensus, and that the NATO treaty preserves a role 
for our judgment and constitutional process in deciding how to respond.
    In short, Mr. Chairman, a larger NATO will make America safer, NATO 
stronger, and Europe more peaceful and united. That is the strategic 
rationale. But I would be disingenuous if I did not tell you I see a 
moral imperative as well. Indeed, there is no contradiction here 
between realism and idealism, between pragmatism and principle, between 
security and justice.
    NATO defines a community of interest among the free nations of 
North America and Europe that both preceded and outlasted the Cold War. 
America has long stood for the proposition that this Atlantic community 
should not be artificially divided and that its nations should be free 
to shape their destiny.
    We should also think about what would happen if we were to turn new 
applicants away. That would mean freezing NATO at its Cold War 
membership and preserving the old Iron Curtain as its eastern frontier. 
It would mean locking out a whole group of otherwise qualified 
democracies simply because they were once, against their will, members 
of the Warsaw Pact.
    Why would America choose to be allied with Europe's old democracies 
forever, but its new democracies never? There is no acceptable answer 
to that question. Instead, it would probably be said that we blocked 
the aspirations of our would-be allies because Russia objected. And 
that, in turn, could cause confidence to crumble in central Europe, 
leading to a search for security by other means, including arms 
buildups and competition among neighbors. This would be the price--the 
very high price--of not enlarging NATO.
    We have chosen a better way. We have chosen to look at the 
landscape of the new Europe and to ask a simple question: Which of 
these nations that are so clearly important to our security are ready 
and able to contribute to our security? The answer to that question is 
before the Senate, awaiting your affirmation.
    Mr. Chairman, I know I do not need to tell you that our security 
has never come without a price. So let me address the very real costs 
that this initiative will entail.
    Last February, at the behest of Congress and before we had decided 
which nations to invite to membership, the Administration made a 
preliminary estimate of the total costs of a larger NATO. We projected 
how much our new allies would need to spend to adapt and modernize 
their militaries, the investments our old allies would need to make to 
extend security commitments eastward, as well as the direct costs 
related to enlargement, including those that would be covered by NATO's 
three common funded budgets.
    Since then, we have settled on three candidates and we are gaining 
a much clearer understanding of the capabilities they will bring to the 
Alliance. NATO staff are now assessing the resource implications of 
enlargement for NATO's common funded budgets--civil, military, and 
infrastructure. That assessment will be submitted to us and the other 
NATO ministers for approval at the December ministerial meeting of the 
North Atlantic Council.
    This process is important because the conclusions it reaches about 
the commonly funded cost of enlargement will represent more than just 
another estimate. They will represent a commitment.
    NATO is also engaged in an intensive effort to determine the level 
of forces our current and future allies will need to put at the 
disposal of the Alliance to meet their new commitments. The NATO cost 
study will not place a price tag on these military improvements, which 
are national responsibilities. But the requirements it defines will be 
part of NATO's next round of force planning, which will begin next 
spring.
    I can assure you that we will continue to approach this process 
with several basic principles in mind.
    The first and most important principle is that the amount we and 
our allies pay for a larger NATO must be a function of concrete 
military requirements. Our discussion in these hearings, and our 
consultations with our allies, should focus on defining the level of 
military capability we want our old and new allies to have in this 
changed security environment, and then making sure that they commit to 
that level.
    This may seem counterintuitive, Mr. Chairman, but it now appears, 
as we examine the assets and infrastructure our new allies bring to 
NATO, that the commonly funded cost of integrating their armed forces 
will turn out to be lower than we estimated in February.
    Either way, the deciding factor will be bang not buck. If we can 
integrate these nations into the Alliance, maintain NATO's capabilities 
and acquire the new ones we need at a lower cost than we expected, that 
will be good news. But we must also be wary of false economies and 
spend no less than we need to keep NATO strong. We will not shortchange 
NATO's effectiveness or its necessary investments in military 
readiness.
    A second principle is that costs within NATO's common funded budget 
must be equitably shared. The United States pays about 25 percent of 
these costs. That will not change. Our allies pay roughly three-
quarters of NATO's costs today. And that will still be the case in a 
larger alliance, as old and new allies will pay 75 percent of the 
common funded costs.
    A third principle is that each ally, old and new, must do its share 
at home to meet its military obligations to NATO and to preserve the 
credibility of NATO's security guarantees. NATO's members contribute in 
many different ways, from the United States, with our unequaled 
military arsenal, to Iceland, which provides bases, but no army. Still, 
NATO is a collective defense alliance. We need to know that at moments 
of crisis, each member will be able to deliver on its commitment to 
help defend new allies.
    Mr. Chairman, the President, Secretary Cohen and I have been making 
these points loud and clear to our current and future allies. Our 
message has been received. As a result, I am confident that the costs 
of a larger alliance will be real, but affordable, and that NATO will 
emerge from this process with its military capabilities as strong and 
credible as ever.
    Let me explain why I feel so confident, with respect to our new and 
old allies alike.
    First of all, I know many of you are worried that Poland, Hungary 
and the Czech Republic may not be able to pull their weight in NATO. As 
we all know, just 10 years ago they were members of the Warsaw Pact. 
Their militaries are not as advanced as those of most NATO allies.
    I know that you, Mr. Chairman, have expressed concern that we will 
have to fund a massive program of assistance to help these countries 
meet their new obligations, just as we used the Marshall Plan and 
military assistance to help our original NATO allies half a century 
ago.
    I can assure you this will not be necessary. These countries do not 
face the kind of threat our allies faced in the 1950's. They have time 
to achieve a mature military capability. After taking a hard look at 
what they already bring to the table, we have no doubt they are on 
their way to meeting that goal.
    What is more, these are not ruined nations recovering from the 
devastation of a hot war. If you go to Budapest, Prague and Warsaw you 
will see some of the most vibrant economies in Europe. These economies 
have grown by an annual average of 4 percent in the last 3 years, and 
that trend is likely to continue for some time. Each of these nations 
is a member of the OECD, which admits only the most advanced industrial 
economies. Each has graduated, or is about to graduate from our SEED 
aid program, because they just don't need that kind of help any more.
    In fact, Poland now funds its own military assistance program to 
support its neighbors, Ukraine and Lithuania. It has expanded its 
global responsibilities by joining KEDO, which funds the dismantlement 
of North Korea's nuclear weapons program. All three of these nations 
have paid their own way to send troops to Bosnia and to other trouble 
spots in Africa, Latin America, and Asia.
    All three have pledged to increase the percentage of GDP they spend 
on their armed forces. And we have seen clear signs that all three have 
the political will to carry out that commitment.
    Poland already has the most advanced armed forces in the region. 
The Polish government recently unveiled a 15 year defense plan, which 
includes substantial resources for further modernization. There was no 
controversy whatsoever on this issue during Poland's recent election 
campaign.
    The Czech government has pledged to increase defense spending by 
0.1 percent of GDP a year for the next three years. It recently 
unveiled a new budget that completely fulfills that commitment, and it 
did so after this summer's costly flooding disaster. As a result, Czech 
defense spending will rise by 17 percent next year--about the 
equivalent of a one-year $40 billion increase in America's defense 
budget. The Czech Republic still has much work to do, but it is clearly 
committed to getting the job done.
    Hungary has also committed to increase defense spending by 0.1 
percent of GDP a year over the next five years. And while Hungary may 
not yet be in NATO, NATO is already in Hungary. More than 100,000 
American troops have passed through NATO bases in that country on their 
way in or out of Bosnia. The Hungarian parliament approved NATO's 
request to use Hungarian territory within 72 hours of being asked. 
Without hesitation, Hungary has fulfilled its responsibilities as the 
supply lifeline for the largest and most complex deployment in NATO's 
history.
    Some people have argued that these new democracies should not be 
asked to bear additional military burdens at a time when they are still 
undergoing difficult economic transformations. But these nations plan 
to spend roughly 2 percent of GDP on defense, a figure in line with the 
defense burden shouldered by many NATO countries, and one that their 
dynamic economies can readily sustain without neglecting other 
priorities. They will be modernizing their armed forces in any case, 
and they understand that in the long run, it will be cheaper to do so 
within NATO than outside it. NATO's prospective members know they will 
not have to fend for themselves if peace is threatened in their region. 
This gives them a reason to avoid mortgaging their future on the arms 
market. In fact, it has already given them the confidence to support 
new limits on conventional arms in central Europe.
    Ultimately, only the people of these countries can decide what is 
best for their future. Today, in all three, solid public majorities and 
every mainstream party support membership in NATO. They are telling us 
they see no contradiction between security and prosperity, and we 
should not substitute our judgment for theirs.
    Mr. Chairman and members, I know that many of you are equally 
concerned, if not more so, about the willingness of our old allies to 
meet their commitments to a larger NATO. Many of our western European 
allies are facing economic difficulties of their own. Many are reducing 
public spending so they can participate in a single European currency.
    Fiscal constraints are well known to this committee. But when the 
16 allied leaders gathered in Madrid in July, they made a commitment. 
They stated clearly in their final communique that a larger NATO would 
carry costs, that those costs would be manageable, and that they would 
be met.
    I am confident that our allies will pay their fair share of the 
commonly funded costs of enlargement because we are going to determine 
those costs together. NATO's history gives us ample reason to believe 
that once we set a long term goal together, we will meet it together.
    As for our allies' national defense spending, that is something 
that we obviously cannot control. But they understand the need to 
ensure that their armed forces can meet the new commitments NATO is 
taking on. What is more, some of the costs we expect our allies to 
incur would need to be faced even if NATO were not growing, since they 
would in any case have to adapt their power projection capabilities to 
meet new challenges. Enlargement simply underscores the issue. So I 
believe that over time they can and will take the necessary steps.
    I am confident that our allies are not going to be free riders on 
American leadership in central and eastern Europe because, frankly, up 
to this point they have not been. The western European countries have 
committed over $80 billion to support the central European democracies 
through the end of the decade. The European Union has invited five 
central European countries, including two that are not being considered 
for NATO membership, to begin the process of joining its ranks. 
America's efforts on behalf of democracy and peace in the world are 
unparalleled, but in this region our European allies are making 
substantial contributions.
    Our European allies' commitment to the cause of a larger, stronger 
NATO is as deep as ours, and that is no surprise. They need this 
alliance. They provide the majority of its ground troops. Over the 
course of history, they have provided the battlefield. They have the 
greatest possible stake in seeing our initiative succeed.
    Mr. Chairman, those are my reasons for confidence. I base my 
assessment on my experience as Secretary of State in dealing with our 
current and future allies in Europe, as well as on the experience of a 
lifetime before that. I base it on my best judgment of what the 
immediate future may bring. But you know, there is one piece of 
equipment that I do not have at the State Department, although I hope 
one day the Appropriations Committee will fund it: and that is a 
crystal ball. None of us can know precisely what challenges we will be 
facing in Europe 10 or 20 or 50 years down the road.
    As you know, President Clinton has pledged that the process of 
enlargement will continue after 1999. A new round of enlargement will 
carry cost implications that we cannot predict today. I can assure you, 
however, that the Senate would still have to ratify the admission of 
any additional members. Any new costs would have to be approved by the 
entire Congress.
    I understand that for the Congress, our experience in Bosnia 
introduces another element of uncertainty. I acknowledge that our 
mission in that country has cost more than the Administration 
originally estimated. But I honestly believe that the circumstances of 
NATO enlargement are different.
    It is intrinsically difficult to predict the cost of an overseas 
military deployment in a potentially hostile setting. It is virtually 
impossible to plan for every contingency, and once our troops are on 
the ground, we have a moral obligation to give them the support they 
need, even if it exceeds our original expectations. The costs of NATO 
enlargement, on the other hand, are more straightforward; they are 
budgeted in advance and we have a veto. We do not run our alliance on 
supplemental appropriations.
    I know history offers other reasons to doubt our ability to predict 
future costs. You have reminded us, Mr. Chairman, that when NATO was 
created, Secretary of State Acheson was asked by Senator Hickenlooper 
of Iowa if it would require the permanent stationing of American troops 
in Europe. He replied it would not. Today, you understandably fear that 
history will repeat itself.
    If you were to ask me today whether our continuing commitment to 
NATO requires the continued stationing of U.S. troops in Europe, my 
answer would be yes. We made that decision decades ago and reaffirmed 
it after the Cold War. If you were to ask me if our commitment to a 
larger NATO will require expanding our military presence across the 
Atlantic, my answer would be that in the current and foreseeable 
security environment in Europe, we simply see no need, and nor do our 
future allies.
    But I agree that this story is instructive. It helps us remember 
that when we decided to keep our troops in Europe in the 1950's, it was 
not just to meet a formal obligation. We did so because there were new 
signs of communist expansion in the world, because we were concerned 
about the survival of democracy in Europe, and because it was in our 
national interest to meet that threat.
    I do not believe we will face such a threat in Europe in the 
foreseeable future. If I am proven wrong, and we are called upon to 
send troops to defend our new allies, the cost of defending a larger 
NATO would obviously grow. But then, if such a dire threat were to 
arise, the cost of our entire defense budget would grow, whether we 
enlarge NATO or not. If I am wrong about our allies' willingness to pay 
their share of the costs, that too is a problem we would face with or 
without enlargement. For if our interest in the fate of Europe's newly 
free nations were put at risk, we would not stand idly by, whether we 
had a formal treaty commitment to defend Poland, Hungary and the Czech 
Republic or not.
    The effect of NATO enlargement is to state plainly in advance what 
we would in any case wish to do if the security of central Europe were 
threatened. In this way, it is more likely that we will be able to 
deter such a threat from ever arising.
    That is why I am more comfortable facing an uncertain future with a 
larger, stronger NATO than I would be were NATO to stand still. I 
believe, as President Vaclav Havel so crisply put it when he came to 
Washington earlier this month, that ``even the most costly preventive 
security is cheaper than the cheapest war.''
    So as you consider the cost issue, Mr. Chairman, I ask you to 
consider that there is an even more fundamental issue at stake. It is 
the value of military alliances to America's security and the 
importance of our partnership with Europe.
    Here is the strongest, most successful, most dependable alliance 
America has ever had. Here are three democracies that wish to share the 
responsibilities of that alliance. Here are three nations that I 
believe will help us bear the cost of defending freedom, in Europe and 
beyond, because they know the cost of losing freedom.
    In the conduct of foreign policy, we are often preoccupied with 
crisis. We spend much of our time managing disagreements with nations 
that do not see the world exactly as we do. In a world where attention 
to what is wrong often drowns out attention to what is right, we must 
take care not to forget our friends. We must not take for granted those 
upon whom we can rely.
    Mr. Chairman, the first commandment of foreign policy is much the 
same as the first commandment of politics: Secure your base. Indeed, 
across the whole scope of human activity, from the life of the family 
and the neighborhood, to the politics of our nation and the world, when 
we want to get something done, we start by banding together with those 
who are closest to us in values and outlook.
    That is why we cultivate our partnership with Europe. That is why 
we seek to extend that partnership to those newly free nations that 
have always been our allies in spirit, if not in fact. We do so not 
just to advance our interests across the Atlantic, but because we need 
dependable democratic allies to advance our interests in every part of 
the world.

                   STATEMENT OF HON. WILLIAM S. COHEN

    Chairman Stevens. Secretary Cohen, we welcome you back to 
your former place of employment. I am sure that you have 
different duties now, and we look forward to your advice.
    Secretary Cohen. Thank you very much, Mr. Chairman. I never 
had the pleasure of appearing before such a large distinguished 
group of Senators on the Appropriations Committee in my years 
of service in the Senate.

                             The New Europe

    Secretary Albright has said everything, Senator Bumpers, 
and I will resist the temptation to repeat much of what she has 
said, other than talking about, perhaps, the crystal ball. I 
would submit that those who founded NATO did not possess any 
greater clairvoyance or clarity in their day then we do today. 
What they were convinced of, however, and they were possessed 
of was a certitude of the necessity of American leadership, the 
rightness of our values, and the benefits to our people, who 
are going to benefit in the future from the enlargement of this 
community of shared values throughout Europe.
    So I think that whatever doubts exist must have existed 
back then as well. Whatever threats existed, as Senator Gorton 
has pointed out, exist today as well.
    I would just make two or three key points supporting what 
Secretary Albright has said. If it were a question of weakening 
NATO, then the obvious answer would be, reject it. We are 
convinced that by enlarging NATO that we are going to 
strengthen NATO. We are going to strengthen those nations who 
share our common values. They are the nations who have to climb 
a very steep set of stairs. I have likened this climb to NATO 
membership as walking through a door, but it is a door at the 
very top of a steep set of stairs which they have to climb.
    They have to reform their economies. They have to insist 
upon civilian control of their military. They have to adopt 
open market economies. They have to promote human and civil 
rights. They have to basically adopt the same values that we 
have, and, in addition to that, measure up to the article V 
obligation they would be required to carry out in providing for 
collective defense.
    So it is a very steep set of stairs they have to climb. We 
think that those nations who have been recommended for 
accession are willing and are in the process of climbing those 
stairs.
    Will it contribute to new divisions in Europe? To the 
contrary, as Secretary Albright has indicated, what we are 
seeing is the erasing of the lines of division. As she pointed 
out, just by virtue of these countries joining in this family 
of NATO nations, we have seen Poland agreeing to resolve 
difficulties with their neighbors, with Ukraine, with Hungary 
agreeing with Romania, Italy, and Slovenia, Germany, and the 
Czech Republic. They have resolved many of their border 
disputes, their ethnic differences and rivalries because they 
were eager to join in this family of nations.
    Senator Bumpers, you raise an interesting point about 
quoting from an Ambassador from Russia saying this is a 
historic mistake. I recall that President Gorbachev made a 
similar statement when he said a united Germany cannot be a 
part of NATO. He said this would be very destructive, very 
threatening, and we assured him that a united Germany could be, 
in fact, incorporated and configured in such a way that it 
would not present any kind of an offensive threat. And now we 
have a united Germany that is a very solid member of NATO.
    Will it appeal to Russian extremism? The quote from the 
Globe that this is really designed to contain Russia--I would 
use the opposite argument. What it is really designed to do is 
to allow those who have escaped the prison of the Soviet Union 
to remain free and not be pulled back into that dark prison 
where they suffered for so many years. So it is not designed 
against any country, not against Russia, but to allow those who 
have escaped from imprisonment over the years to enjoy their 
freedom and to enjoy a sense of security.
    I had occasion to travel twice this year--I know Senator 
Hutchison has been at least four or five times--but twice this 
year to Bosnia. And on the first occasion I witnessed a 
ceremony that was headed by our former SACEUR, and we were 
giving a medal to General Shetsov. George Joulwan was 
presenting a medal to him at that time because he was leading 
his Russian soldiers in a mission side by side with American 
soldiers. And it was one of the most emotional moments that I 
can recall seeing, where Russians were proud to be serving side 
by side with American soldiers.
    Just recently, some 2 weeks ago, I had a meeting with 
General Krivolapov. He gave a toast at the end of our meeting 
and he said, ``one team, one mission.'' That to me does not 
sound like it is appealing to Russian extremism but rather 
building bridges with key members of the Russian military to 
say that we are going to function as a team in the future.

                           Enlargement costs

    I will address the issue of cost, because that really is 
what many of you, if not all, are concerned about. What are the 
costs of enlargement? Earlier this year I submitted a report to 
the Congress that laid out three categories of costs. In 
addition, there are three different reports. We have our DOD 
study. There is also an assessment that was prepared by the 
RAND Corp. And you also have one by CBO.
    The reason for the great disparity depends upon the 
assumptions that were made. With respect to--I will not go into 
all the details to give you time for your questions, obviously, 
but if you assume, as the CBO assumed, that you have a Russia 
that now poses a significant threat of external aggression, 
that they have rebuilt their economy, they have rebuilt their 
military, they now are poised to attack the West, then 
obviously you would have to match that kind of a buildup with 
something corresponding.
    Under those circumstances, they would insist that we have 
11\2/3\ divisions, and 11\1/2\ wings, 5 brigade sets and so 
forth. They had the maximum assumption of aggression on the 
part of Russia directed toward the West. Under those 
circumstances, you can, in fact, have a very high calculation 
of what it would cost to defend against that.
    DOD and RAND are quite close in terms of our initial 
assessment. We assumed that the initial figures would run 
roughly between $9 to $12 billion on direct enlargement costs, 
$10 to $13 billion on the new members' military restructuring, 
and the current number is $8 to $10 billion, to give a total 
range of between $27 and $35 billion.
    I think it is important to make a point here. The new 
members will have to assume costs in any event. As Secretary 
Albright pointed out, if they were not involved in getting into 
NATO, they would have to reform their military. There would be 
enormous costs that they would have to incur in any event.
    By joining a collective security institution, they will 
have to pay less. They will not have to spend money to try to 
compete against their neighbors. They will be part of a 
collective security arrangement, so they will spend less, not 
more. But they will have to spend money. We estimated it would 
cost between $10 and $13 billion.
    The current members, non-U.S. NATO members, will have to 
spend, according to our initial estimate, between $8 to $10 
billion. Why? That is separate and apart from NATO enlargement. 
It is because they have to reconfigure their forces. The cold 
war is no longer in existence. They no longer have to maintain 
the same sort of force structure, the same numbers. What they 
have to do is to reform their military system so they become 
more rapidly deployable, so they have greater mobility and 
sustainability in terms of preparing for the future.
    Those are costs that they will have to absorb in any event. 
It is separate and totally apart from enlargement. The new 
members, the existing European members of NATO, all have costs 
that they will have to assume separate and apart from NATO 
enlargement.
    We then come back to the one category we said are the 
direct costs for enlargement that we would have to contribute 
to. And that is the $9 to $12 billion figure that has been 
cited. Now, as Secretary Albright has said, we may have to 
reduce that. As we have found from empirical experience, we may 
have to, in fact, lower that number because of what we have 
discovered.
    First of all, I should point out that the $9 to $12 billion 
figure was calculated based on four members coming in, not 
three. So already we overestimated the costs that were involved 
because we said what would it cost for four. Well, now we have 
only three.
    Second, we have found out that, notwithstanding the fact 
that the Soviet Union might have been somewhat inferior in 
terms of the quality of their military, they nonetheless had 
devoted substantial resources to their former republics and 
those who were under the aegis of the Soviet Union. We found, 
for example, when East Germany became part of West Germany and 
united, that the East Germans were far more prepared to go to 
war on a much quicker basis than we in the West had 
anticipated.
    We are now finding, for example, that countries such as 
Hungary are now better prepared than we had anticipated. We 
found, for example, that, contrary to our assumption that they 
would not be able to accept an F-16 squadron, they already 
have. They have had a Dutch F-16 squadron that was present 
several weeks ago before our team of assessors arrived to find 
out what would need to be done.
    We are finding that the Czech Republic has already taken 
its own money and spent its resources on digitizing their 
communications system before even contributing anything to NATO 
enlargement itself. So what we are finding is that those 
countries who are going to or are qualifying for admission, 
assuming we ratify it, that they are taking measures which will 
reduce the cost.
    This brings me to the issue that our European friends have 
been quoted as saying we are not going to pay. I would quote 
for you, Senator Bumpers, I believe you said the British 
minister of defense indicated they would not pay any increase 
in funding. There is in the Washington Times on October 21, 
today, a statement by George Robertson, the new minister of 
defense, and let me just quote one paragraph. ``Because 
enlargement is a high priority for NATO, we may have to delay 
some lower priority projects. But if additional spending is 
required, Britain will pay its share.'' And then it goes on.
    I attended a ministerial meeting in Maastricht just a 
couple of weeks ago, and I made it very clear that there are 
costs involved for everyone. There are costs involved for the 
three countries who wish to become part of NATO, and they will 
have to bear those costs. There are costs involved for the 
current European NATO members who have to modernize their 
forces in order to move away from a defensive posture to one 
where they are rapidly deployable and sustainable. They are in 
the process of doing that. Those are their costs, separate and 
independent.
    And then there are the costs for the common fund. What are 
the direct costs for enlargement? There is some dispute. Last 
year NATO spent, total, $1.8 billion that went into the common 
fund. We spent roughly $485 million of that. That was our 
share, roughly the 24 percent that Secretary Albright has 
talked about.
    That will continue to be our share. What the Europeans have 
said is, we believe we may be in a position to reprioritize, to 
reprogram some of the lower priority funds that we might have, 
be it in Belgium, be it in Germany, be it wherever it might be, 
and place a higher priority on helping these three new nations 
accelerate their entry into NATO.
    If it is possible to do that without in any way 
compromising the military effectiveness of NATO itself, then we 
say fine. But we expect there to be additional costs. They may 
not be as high as we originally estimated, but we are going to 
be coming back to you. NATO defense officials are going around 
to each of the NATO countries, each of the new members, making 
an assessment, asking them to answer that DPQ, the defense 
questionnaire that they have to fill out, and then we will make 
an assessment in December, present that to the NATO alliance, 
and we will have to present that to you next January and 
February in order to say these are the most realistic numbers 
that we can possibly give you.
    Here is what the NATO military defense teams have done in 
going out into the field to find out what each country needs to 
do, to find out what will be required, and these are the 
recommendations that we make. We will have to bring that back 
to you. As the chairman has indicated, you have got some 
private citizens coming back in January. We would expect the 
vote to take place sometime next spring.
    You will have the most detailed numbers we can possibly 
present. But I would forewarn you that I think that the numbers 
that we had that would go from the $27 billion to $35 billion 
may be too high, and that the Europeans may be correct in this 
regard, that we have overestimated.
    One final point and then I will cease. When I appeared 
before the ministerial in Maastricht, most of the Europeans 
adopted the argument, Senator Harkin, that you made, that what 
really is at stake, is that we want to sell a lot of high-end 
equipment to all of those new European entrants. My reaction is 
this, and my response was this. If we overestimate the costs 
involved, which they think we have done, for the purpose of 
simply selling more high-end equipment to these countries, the 
Congress of the United States, the Senate, will reject it as 
being unaffordable.
    As Secretary Albright has said, if we underestimate it, you 
will reject it because it is not credible. What we have to have 
are really solid numbers. We do not have an interest in trying 
to sell high-tech equipment to these three new nations coming 
in.
    The chairman has pointed out what they need most of all is 
to start training their personnel. They have to start training 
in, hopefully, the English language, or French--the two major 
languages--to have greater communications capability. They have 
to upgrade their command, control, communications. They have to 
upgrade their infrastructure. They have to ultimately upgrade 
their interoperability. And then finally you get to the 
purchase of modern equipment, which is way down the line in 
terms of priority.
    So what we are trying to do basically is to put them in a 
position where we can, in fact, communicate effectively, that 
we have these command and control systems, that they take 
measures to beef up their ability to accept reinforcements, 
should they be necessary. But we are not interested in trying 
to sell a lot of high-tech and high-end equipment to these new 
nations. That is not in their interest and that is precisely 
the reason why these military teams are going out to make an 
assessment of what they need to do that will make them an 
effective part of the new NATO.
    So, Mr. Chairman, I have a long prepared statement which I 
will forebear from repeating, because I know the time is 
running and you have many questions you would like to ask.
    But let me just conclude on this note. Whatever the costs 
for enlargement, I think we also have to calculate what are the 
costs of failing to enlarge. What would be the cost if we were 
to reject these three countries from coming in?
    Secretary Albright has quoted from Vaclav Havel. President 
Eisenhower put it a different way. He said, ``A soldier's pack 
is not as heavy as a prisoner's chains.'' And that is something 
that these three countries have endured for too many decades. 
They have had to carry around the weight of prisoner's chains. 
They now have an opportunity to join the most successful 
military institution in the history of the world, and to secure 
their security and to promote their prosperity and their 
stability.

                           PREPARED STATEMENT

    That is in our vital interest and we ought to ratify for 
those reasons alone. Thank you very much.
    [The statement follows:]
              Prepared Statement of Hon. William S. Cohen
    Senator Stevens, Senator Byrd, Senator Inouye, members of the 
Committee, thank you for the opportunity to appear before you today. It 
is a great privilege to appear with the Secretary of State to discuss 
one of the President's top foreign policy objectives: NATO enlargement. 
As you may know, we appeared together before the Senate Armed Services 
Committee in April to discuss this same topic. I welcome the 
opportunity to continue this dialogue with the Senate.
             why enlarge nato? first, some european history
    We are at an historic moment. By working together within the U.S. 
Government, and within the NATO alliance, we can change the face of 
Europe forever in the next few years. It is a challenge from which we 
should not retreat.
    Our veterans of the First World War witnessed how even the vast 
Atlantic Ocean couldn't protect us from being drawn into the fiery 
hatreds of the Old World. They marched into battle singing, ``We won't 
be back 'til it's over, over there.'' But to our lasting regret, when 
the guns of Autumn fell silent, America ignored the embers of hatred 
that still smoldered in Europe and we missed the opportunity to prevent 
another war, the deadliest in human history.
    Millions of American sons returned to the very same terrain that 
their fathers died defending, and thousands of them paid the ultimate 
price for this missed opportunity. But those who fought in World War II 
gave us a second chance to build a safer world.
    President Truman, speaking of the Marshall Plan, said, ``Our 
purpose from the end of the war to the present has never changed. It's 
been to create a political and economic framework in which lasting 
peace can be constructed.'' Western Europe embraced the Marshall Plan, 
built strong democracies and economies, and developed a strong alliance 
that we call NATO. But the other half of Europe was denied the Marshall 
Plan when Joseph Stalin slammed down the Iron Curtain and began a 
separation of the continent which would persist for fifty years.
    Today, having emerged victorious from the long winter of the Cold 
War, we have an historic opportunity and a very sober challenge. We 
have the opportunity to complete George Marshall's vision, and the 
challenge to secure a lasting peace in Europe whose security and 
stability remains a vital interest of America.
                       enlargement enhances nato
    Some question whether making NATO larger is going to make NATO 
weaker and, therefore, weaken America. On the contrary, our definitive 
answer is that enlargement must not and will not be allowed to dilute 
NATO's military effectiveness or political cohesion. A larger NATO will 
be a stronger NATO and will provide a wider allegiance in Europe to our 
values. It was the creation of NATO in 1949 that halted Soviet designs 
on western Europe. It was the enlargement of NATO, with Greece and 
Turkey in 1952, West Germany in 1955, and Spain in 1982, that helped 
strengthen the wall of democracy. If, in the future, another direct 
threat of attack arises, an enlarged NATO would have: additional 
manpower, added military capability, more political support, and 
greater strategic depth. More importantly, a larger NATO will help 
bring stability for the 21st Century to Central Europe--the spawning 
ground of crises throughout the 20th Century. We must seize this 
opportunity to continue to shape the security environment in Europe. In 
doing so, we will strengthen the political democracies and market 
economies of Central and Eastern Europe, and thereby enhance stability 
and reduce the risk that such a crisis will ever emerge. As was the 
case with nuclear deterrence during the Cold War, in this new era NATO 
enlargement is an insurance policy with an unusual twist: by paying a 
modest premium, we not only will be protected in case of fire, we will 
make a fire less likely to ignite.

                       THE CHOICE OF NEW MEMBERS

    Formal membership in NATO carries as President Clinton has said, 
``(t)he most solemn security guarantees.'' Enlargement must not, and 
will not, be allowed to dilute NATO's military effectiveness nor its 
political cohesion. Sincere aspiration is not enough to guarantee 
membership in NATO. New members must demonstrate a commitment to: 
democracy and the rule of law, an open market economic system, civilian 
constitutional control of their militaries, peaceful resolution of 
disputes with their neighbors, respect for human rights, and 
development over time of military capabilities interoperable with NATO.
    After discussions with allies, candidate countries, members of 
Congress and within the Administration, the President decided the U.S. 
would support extending invitations to the Czech Republic, Hungary and 
Poland. The President met with the other leaders of the NATO nations in 
a summit in July, and together they agreed to invite these nations to 
begin accession talks to join the Alliance.
    Enlarging NATO with these three nations will carry the promise of 
peace and liberty into the next century.
    You have heard it argued that by enlarging NATO we are going to 
create a new dividing line in Europe. That argument fails to appreciate 
the new dynamic that is underway in Europe, erasing these old lines and 
avoiding these new divisions. The mere prospect of having NATO 
membership has unleashed a powerful impetus for peace in Europe. Old 
rivals have settled their historic disputes: Poland and Lithuania, 
Poland and Ukraine, Hungary and Romania, Italy and Slovenia, Germany 
and the Czech Republic. Without the prospect of NATO enlargement, these 
smoldering embers--rather than being extinguished--would have been 
fanned by nationalist fervor. This argument also fails to realize that 
by not enlarging, we would allow to stand an illegitimate dividing line 
drawn across the continent by Stalin fifty years ago. Some countries 
would feel compelled to seek security via other avenues, including ones 
potentially destabilizing and contrary to U.S. interests. We must move, 
with Europe, into the future. The Poles, Hungarians and Czechs are 
vital, vigorous and dynamic people. They share our ideals. They are 
making remarkable recoveries from decades of foreign domination. Now 
they want to return to their rightful place as equal partners in the 
European family of free and democratic nations. We need them and they 
need us.
    If we are to ensure the achievement of our stated goal that 
enlargement will not draw new dividing lines in Europe, we must 
continue to give careful consideration to the security interests and 
concerns of those states that were not chosen for membership at Madrid. 
The door is open for future invitations, and no European nation is 
excluded from consideration. We expect other nations to become members 
as they meet the requirements. We need to continue to make clear to 
other aspirant countries that active participation in PfP is the prime 
pathway to membership in the Alliance, and to a solid security 
relationship with NATO. At the same time, no state among the non-
selects has an ``assured invitation'' in 1999, or at any time, and 
future invitees will be held to the same standards as the current 
three. And, of course, any future accessions will, like these three, 
require Senate approval.

                      THE NATO-RUSSIA RELATIONSHIP

    NATO is also embarking on a new relationship with Russia. There are 
some who claim that enlarging NATO is going to feed extremism in Russia 
and jeopardize Russia's move to democracy and its cooperation with the 
West. We should not permit these fears to overwhelm the facts. NATO and 
Russia are erasing old dividing lines every day, not least of which in 
our interactions in Bosnia where Russian and NATO soldiers patrol side 
by side in the cause of peace.
    Mr. Chairman, permit me a moment of personal reflection. In 
February, shortly after I was sworn in as the Secretary of Defense, I 
traveled to Bosnia, and met with some of the American troops serving 
there. During lunch, a Russian soldier came up to me and gave me his 
beret as a gesture of peace, saying how proud he was to be serving 
alongside Americans. Two weeks ago, I was again in Bosnia and met with 
the new Russian commander, General Krivolapov. He concluded the meeting 
by declaring, in a Russian version of General Joulwan's motto for SFOR, 
``one team, one mission.'' Our new relationship with Moscow must 
acknowledge Russia's changing role in Europe and not be forever bound 
by the notion of a Russia in confrontation with NATO.
    The objectives of NATO's new relationship with Russia are: to 
recognize Russia's inherent importance in European security--after all, 
they have been a major player in European security for 300 years; to 
engage Russia in the new European security order; to facilitate a 
security dialogue and; when desirable and appropriate, to cooperate 
with Russia. Equally important to articulate are the things that NATO's 
new relationship with Russia does not do: it does not allow Russian 
participation in internal NATO issues; it does not give Russia a voice 
or a veto over NATO's decisions; and it does not give Russia a de facto 
membership in NATO.
           the military requirements and costs of enlargement
    And now, let me turn to a topic I know is of particular importance 
to members of the Appropriations Committee: how much will enlargement 
cost? And inextricably linked to the matter of cost--in fact the driver 
of how much it will cost--is a second question: what exactly are the 
military requirements of enlarging? These are complicated questions on 
which reasonable people will disagree, and have already disagreed. But 
let me walk you through the work we have done so far and the work we 
are now doing.
    There are new costs to enlarging, but these costs are affordable. 
They are modest compared both to our total defense spending--and to the 
costs and risks of not enlarging. To frame our discussion let me sketch 
for you the three categories of costs.
    First, there are the costs to new members to be able to develop 
interoperable military forces to contribute to their own defense, the 
defense of other NATO members and other NATO operations. While they 
currently make a contribution, in order to be producers of security 
over time, the new members must re-build, re-equip, and re-train their 
forces. They must have smaller, better equipped, better supported, and 
better led forces.
    Second, there are also the costs to current members to meet the 
requirements of NATO's new Strategic Concept, which is based on power 
projection rather than positional defense, and which meets the needs of 
an enlarged Alliance. Current members must do what they already have 
undertaken to improve mobility, deployability, interoperability, and 
flexibility. The key need for the current members is to proceed with 
these efforts.
    I want to stress that these two categories of costs are all actions 
that the countries concerned would have to take to provide for their 
own defense, with or without NATO enlargement. Indeed, to get 
comparable levels of security without NATO enlargement the new members 
would have to spend more. But for NATO to ensure its military potential 
with enlargement, the capabilities which these other costs will fund, 
will be needed. So it is important that the commitments actually be 
met.
    Finally, there are the costs to both new and old members of 
integrating new members into NATO. These direct costs to enlarging, 
costs which NATO would not have incurred but for enlarging, are 
relatively modest. These direct costs are associated with enhancing 
interoperability, extending NATO's integrated command, communications 
and air defense surveillance.
    From one point of view, these could be considered the only true 
costs of NATO enlargement since they are the costs that would not be 
incurred if NATO did not add new members. But we have also thought it 
right to identify the first two categories of costs that will need to 
be paid to ensure that an enlarged NATO is able to meet its 
obligations.

                       INITIAL U.S. COST ESTIMATE

    So, those are the three categories of costs. As you know, the 
Department of Defense developed a notional estimate of the costs of 
enlarging at the end of last year. This estimate was part of the 
report, requested by the Congress, that the President submitted to you 
in late February of this year.
    Let me begin to make the link between costs and the military 
requirements of enlarging. Our initial estimate assumed that while 
there would be a need for serious defense capabilities for an enlarged 
NATO, there is currently no threat of large-scale conventional 
aggression in Europe, and that any such threat would take years to 
develop. This is, of course, the same assumption as we make for our own 
national planning.
    Total costs for achieving all three categories were estimated as 
$27 to $35 billion. These costs would be spread over the 13-year time 
frame of 1997 through 2009--ten years after accession of new members. 
Now, using the breakdown of responsibility for these costs which I just 
outlined for you, the three categories of costs, let me give you what 
we estimated each group would have to bear:
    New member costs for restructuring their militaries were estimated 
at about $10 to $13 billion over that time frame or about $800 million 
to $1 billion per year. These costs would all be borne by the new 
members, except to the limited extent Congress decides to continue 
limited support to Central European militaries. (As you know, the U.S. 
now provides about $100 million in Warsaw Initiative funding to all PfP 
countries combined to support their participation in PfP.)
    Current allies' costs for NATO regional reinforcement upgrades were 
estimated at about $8 to $10 billion, or about $600 to $800 million per 
year. These costs would be borne by the current allies. For decades 
now, the U.S. has made no contribution to Allies' defense budgets 
(except for some loans to Greece and Turkey).
    It is important to note that our cost estimates to date do not 
anticipate any added costs to the U.S. in this category because U.S. 
forces are already readily deployable and sustainable. The requirement 
to deploy to meet a contingency in places like Korea or Southwest Asia 
is more demanding than a hypothetical crisis in Central Europe.
    Direct enlargement costs for new and old allies were estimated at 
about $9 to $12 billion, or about $700 to $900 million per year. This 
again, is the cost of items such as communications, reinforcement 
reception infrastructure, and other interoperability measures. We 
estimated that about 60 percent of these costs, or about $5.5 to $7 
billion would be paid for out of NATO common budgets over the ten years 
following accession, that NATO budgets would be increased accordingly, 
and that the U.S. would pay its standard 24 percent share of the NATO 
common budget. With these assumptions, the U.S. share of the direct 
costs of enlargement would be about $150 to $200 million per year.
    These costs are manageable. Projected U.S. requirements to meet 
direct enlargement common budget costs is only a fraction of a 
percentage point when compared with total U.S. defense spending ($266 
billion in 1997). The projected U.S requirement is also modest when 
considered in relation to total NATO common budget spending. In 1997, 
these budgets totaled about $1.8 billion. The total U.S. contribution 
to the three budgets was about $485 million, while the allies 
contributed the other $1.3 billion. We expect these relative percentage 
cost shares will stay the same--three European to one U.S.--in the 
period when NATO is meeting the requirements of enlargement.
           ongoing nato work to help refine the cost estimate
    Several weeks ago, this Committee asked me for a refined cost 
estimate. On 16 October I submitted a report based on our work done to 
date. Since our work to respond in greater detail to your request will 
dovetail with work being done at NATO, let me first tell you about what 
the Alliance is doing. NATO has undertaken a review of the military 
implications and costs of enlargement, what new members will bring to 
the Alliance, and any additional requirements for current allies. The 
U.S. has long argued that any NATO cost estimate must be driven by the 
military requirements of enlargement. We were successful in pressing 
that argument in the Alliance, and a review of the military 
requirements is currently underway by the NATO staff. This level of 
detailed information, was obviously not available to us when we did our 
first cost study and it is still being formulated.
    These reviews are ongoing at NATO this fall, with recommendations 
to be completed in November for consideration by ministers in December. 
The invitees worked with the NATO international staff to fill out a 
special Defense Planning Questionnaire (DPQ) as their initial step into 
the NATO Defense Planning Process. All NATO allies fill out a DPQ 
annually.
    In an effort to better understand requirements as well as the 
current capabilities of the invited nations, members of NATO's 
international military staff have been conducting site visits at 
various military facilities in the invited countries this summer. They 
visited airfields and railheads in each country. This month they are 
visiting other facilities in each country to try to ensure that the 
first facilities they inspected are representative of the condition of 
the majority of facilities in that country.
    The international staff of NATO will then cost those new 
requirements. That is part of the work that is to be completed in time 
for the December ministerials. These estimates will therefore be 
available to Congress well before any vote on enlargement.

                    NATO COST ESTIMATES MAY BE LOWER

    Based on what we know now, I believe that the NATO cost estimates 
will be lower than those which you received from us in February. First 
the initial U.S. cost assessed four, not three, new members. Further, 
the NATO estimate will address only the direct, common-funded costs. 
National costs borne by each ally or prospective ally are separate 
from, and will not be estimated by, the NATO work.
    But I also expect the NATO cost estimates will be lower because 
some things are better in the invited nations than people thought. As a 
result of assessments NATO planners and logisticians have been 
conducting, we believe the additional investment required to prepare 
each of these nations, their military forces, and their infrastructures 
for full NATO membership will be less than initially anticipated. Let 
me share some examples of our experiences during these assessments to 
show why this is the case.

               INTEROPERABILITY PROGRESS BY THE INVITEES

    When the American General heading a small NATO team visiting 
Kecskemet Air Base asked his Hungarian host how he might accommodate a 
squadron of NATO F-16's, he was surprised by the precision and detail 
of the Hungarian response--and the level of installation readiness 
already achieved. He commented that the Hungarians had done some 
excellent research. He was told it wasn't just research. Hungary had 
hosted a squadron of Dutch F-16's for several weeks in 1996, and a 
United States Air National Guard squadron was scheduled to arrive the 
week after the general's visit. The Dutch and American planes were in 
Hungary as part of a series of PfP exercises designed to improve 
interoperability. Thus Hungarians are already capable of handling NATO 
aircraft at some of their airfields. There is less work that needs to 
be done--and in turn--less money to be spent to improve these airfields 
than we had estimated earlier this year. This example also shows how 
PfP has contributed in direct and practical ways to preparing for NATO 
membership.
    In another example, an analyst monitoring the NATO Common Fund Cost 
Study's progress noted that even though communications and information 
systems requirements were increasing, the prospective costs to the 
Czech Republic kept dropping. Upon closer inspection, it turned out the 
Czechs had already anticipated requirements for secure and non-secure 
digital communications programs and had applied NATO standards to the 
national programs they are pursuing on their own. In short, the Czechs 
had already spent their own money to fund some projects that we had 
assumed would be paid for by NATO as a whole through the common 
budgets.
    Finally, an American General asked a Polish Major familiar with the 
details of a particular rail complex whether we could reasonably expect 
to transport a NATO armored division through it in one week's time. The 
amused Major replied by asking the general how many Soviet heavy 
divisions he thought they planned on moving through the same location 
when trains were going the other way?
    These examples demonstrate an important point. When we conducted 
our initial cost study, we assumed a greater need for improving some 
military bases and equipment. As we spend more time on the ground in 
the countries of each of the invitees, learning the details of their 
military forces and infrastructure, we are gaining a better 
appreciation for just how well prepared they were to fight against 
NATO. We will be modernizing from an extremely robust foundation. We 
will not be building airfields from scratch. Accordingly, the direct 
costs of enlargement will likely be less than we originally estimated. 
In fact, NATO will be inheriting a great deal of usable infrastructure.
    During the Cold War these levels of capabilities would have been 
bad news stories, but today they are all good news stories. What I am 
attempting to demonstrate is that we are increasingly impressed by the 
levels of readiness, understanding, and initial success of the invitees 
in working toward NATO interoperability. These capabilities will 
contribute to driving down the need for NATO common-funded improvements 
once they become members of NATO. These capabilities are generally 
higher than we assumed in our February study on the requirements and 
costs of enlargement. I'm convinced, as we delve deeper into the 
circumstances in these countries, we will discover more examples of 
infrastructure capabilities either inherited from the Cold War or built 
up over the past three years through the Partnership for Peace.

                        SOME DEFICIENCIES EXIST

    We will, of course, likely also find some deficiencies--especially 
regarding personnel, specialized training, communications, and the 
levels of funding for force modernization. While the three cannot be 
expected to ``fix'' everything by 1999, each must have a serious 
program that lays out a defined path toward the enhancement of their 
defense capabilities.
    We have told each invitee that its highest priority should be 
investing in quality personnel. They must develop effective systems for 
recruiting and retaining good troops. Key to this is the development of 
an effective NCO corps. The next priority is training--including 
English language training--for personnel and equipment are meaningless 
without adequate training. The next priority is achievement of a real 
degree of interoperability with NATO, including communications, 
logistics, infrastructure for reinforcement, and air defense.
    While it is clear that each of the invited nations must undergo 
modernization of major weapons systems in the years ahead if it is to 
remain a contributor to overall alliance security, acquiring high tech 
weapons systems should not be a high priority.
    These three countries are working hard to demonstrate that they are 
ready for membership in NATO. After the Madrid Summit, I traveled to 
Budapest while the President and Secretary Albright traveled to Warsaw 
and Prague. We made these trips not only to congratulate them but to 
remind them that the journey to Alliance membership had just begun, not 
ended. In the past month, Assistant Secretary Kramer has traveled to 
each of the invitees to discuss their preparations for membership. Each 
of these nations wants to be a contributor to, not just a consumer of, 
security. They are already contributing to the security of Europe by 
restructuring and modernizing their militaries to operate with NATO, by 
serving with our soldiers in Bosnia, and by helping to make a success 
of the Partnership for Peace.
    Each country has some work to do. The Czechs for example, in their 
original DPQ responses to NATO, did not commit enough of their forces 
to NATO missions but their most recent response commits virtually all 
of their forces to NATO. Their future budgets need to allocate greater 
resources for defense; they have promised to increase their defense 
budget, currently 1.7 percent of GDP, to 2 percent by the year 2000. 
While both Poland and Hungary have had similar deficiencies they are 
overcoming them. Hungary has increased its budget and Poland has an 
extensive fifteen year plan. I am encouraged by the rapid Czech 
response to our and NATO's constructive criticism during the past few 
weeks.

                           NEXT STEPS AT NATO

    The NATO staff work I have been outlining for you, when forwarded 
to Ministers in December, will provide the basis for a more refined 
assessment of the costs associated with NATO enlargement. In order to 
support the Congress' review of issues associated with enlargement, I 
will, as I stated in my 16 October letter to Senator Stevens, provide 
you with an update based on these NATO efforts in early 1998.
    Once the military requirements and cost estimates are agreed to in 
December, we will move forward to make good on the commitment 
undertaken by national leaders at Madrid that, ``the resources 
necessary to meet [the costs of enlargement] will be provided.'' Three 
weeks ago in Maastricht, at the informal NATO defense ministerial, I 
led the discussions on this issue.
    I reminded my colleagues that at our defense ministerial in June, 
we all pledged to play our full part: (1) in preparing the nations 
invited to join NATO for their future roles and obligations as Alliance 
members; (2) in providing sufficient resources to maintain the 
Alliance's ability to perform its full range of missions; (3) in 
implementing the Alliance's decisions to further enhance its relations 
with partners; and (4) in acknowledging that, ``the admission of new 
members * * * will involve the Alliance providing the resources which 
enlargement will necessarily require.'' These commitments were 
reaffirmed at the Summit in Madrid, where our Heads of State agreed: 
(1) that there will be costs associated with the integration of new 
members; (2) that these costs will be manageable; and (3) that the 
resources necessary to meet these costs will be provided. There was no 
disagreement on this topic among my colleagues in Maastricht. Still 
under discussion is whether that portion of the direct costs of 
enlargement which are a shared responsibility must result in a dollar 
for dollar increase in the NATO common budget--or whether some can be 
offset by reductions in lower priority programs currently in the common 
budget. We continue to believe that additional resources will be 
required.
    We will keep you informed over the coming months as this discussion 
continues.

                         EUROPEAN BURDENSHARING

    Let me turn to the topic of burdensharing. Both the U.S. and our 
NATO allies have made big cuts in our defense budgets since the end of 
the Cold War. But, using the key indicators of burdensharing, as set by 
Congress, most of our NATO allies still make very substantial 
contributions to the common defense. For example, more than two-thirds 
of the troops participating in SFOR are non-U.S. forces.
    We believe the allies can and should do more to improve their 
capability for this sort of mobile, flexible operation NATO will need 
to be ready for in the future. Most have already made improvements, and 
are committed to more. For example, Britain provides NATO's only 
rapidly-deployable corps headquarters committed to NATO and British 
forces are the backbone of the Allied Command Europe (ACE) Rapid 
Reaction Corps (ARRC). The U.K. also has the capability to deploy and 
sustain a division-sized force of 20,000 to 25,000 personnel in a Gulf 
War-style scenario.
    France, in general, is restructuring its armed forces to be more 
mobile and easily deployable. The French are establishing a Rapid 
Action Force (FAR) designed for rapid response in both European and 
overseas contingencies. France also participated heavily in IFOR 
efforts to implement the Dayton peace accords in Bosnia and 
Herzegovina. With nearly 10,000 troops, France was the third largest 
troop contributor, after the U.S. and Britain, and was responsible for 
one of the three geographic sectors--and continues to be in SFOR.
    Likewise, Germany is standing up a Rapid Reaction Force of some 
53,000 fully-equipped troops from the Army, Navy and Air Force. The 
first units stood up in 1996 and the force will be fully capable in 
1998. In general, German armed forces are in the process of re-creating 
themselves into a mobile, deployable--rather than static home defense--
force.
    The smaller European nations are also improving their forces. For 
example, the Royal Netherlands Navy and Air Force have improved both 
their transport and air defense capabilities with new procurements such 
as: two KDC-10 transport/tankers (the Dutch can now deploy their own F-
16's without reliance on the U.S.); an amphibious-lift ship to make the 
marine brigade self-deployable; and upgrades to their F-16 fleet and 
their Patriot systems.

                       THE COSTS OF NOT ENLARGING

    Before I leave the topic of costs, I would like to reiterate what 
the President said in the Administration's February report: the costs 
of enlargement must be balanced against the costs of not enlarging. If 
we fail to seize this historic opportunity to help integrate, 
consolidate and stabilize central and eastern Europe, we may pay a much 
higher price later. If NATO fails to enlarge, the risk of instability 
or conflict in the region would rise, with far reaching consequences 
for the U.S. and our allies. The most cost effective way to guarantee 
the stability of the region is to do so collectively with our European 
partners through NATO.
    The bottom line is that alliances save money. Collective defense is 
more cost effective than national defense. NATO will allow the three 
invitees to acquire the same degree of security their western European 
neighbors already enjoy and to do so at a lower cost than would 
otherwise be the case and enhance our own security in the process.

                               CONCLUSION

    Mr. Chairman, if this century has taught us anything, it has taught 
us that our security is inextricably tied to peace and security in 
Europe. We must hold up the lamplight of history so that we do not 
stumble on the footpath to the future. Most importantly, we can promote 
U.S. interests by increasing the security and stability of Europe. In 
so doing, we are building the Europe of the 21st Century in Europe, 
whole, free and at peace.

    Chairman Stevens. Well, thank you very much. Because of the 
timeframe, I would ask that the members agree to a 5-minute 
time limit, which I will apply to myself as well, and we will 
proceed on the early bird rule.
    Let me just state, to begin with, I do appreciate your 
recent letter. It has just come to my attention, as a matter of 
fact. It was received in our absence. I will see to it that 
Secretary Cohen's letter is distributed to all members of the 
committee today. It is an update on the cost estimates.
    I do not have the ability to repeat the Hickenlooper-
Acheson sequence, Secretary Albright, but I wish there was a 
way that I could assure those who will hold the positions we 
now hold in the period after the enlargement of NATO that there 
will not be a development on their watch compared to the 
commitments that Secretary Acheson made.
    I do not know yet how to do it, but I hope this committee 
will find a way to put on the ratification resolution some real 
impediments to the expansion of costs of our Nation in 
connection with the enlarged NATO. We are a global nation. Our 
competitors really are in the Pacific rather than in the 
European area now. I appreciate your concern, Madam Secretary, 
about the 200 million people in this region. We have equal 
concern about the 3 billion people in the Pacific and to the 
extent costs go up in this area, it is going to decrease our 
ability to meet our commitments in the Pacific.
    Now, what I would like to inquire of you, Madam Secretary, 
is what assurances have been given to us that the enlarged NATO 
will not bring about additional demands upon our military as we 
faced in Bosnia. Bosnia is not under the mutual defense 
concepts of NATO. It is an exercise of NATO in trying to 
resurrect Europe from the threat brought about from the 
disintegration of the former Yugoslavia.
    Are we going to have similar engagements in the event there 
is a disintegration of one of these member states in the 
future? Do we have an obligation to go into these new member 
states the way we have gone now into this area of the former 
Yugoslavia? Is NATO committed to the internal defense of these 
three member states the way we have committed our forces in 
Bosnia? Is that an unfair question?

      United States national security interests in Asia and Europe

    Secretary Albright. No; first of all, Mr. Chairman, I 
appreciate very much your concern about this. We obviously also 
want to make sure that however we extend our commitment that it 
is always done in the interest of the United States.
    You have raised a number of questions, but let me just make 
the following statement, because I know of your concern about 
Asia. I am as concerned about Asia as you are, and I made a big 
point of making sure that on my first trip I went to both 
continents, and we have spent a great deal of time in terms of 
developing institutions in Asia. I will continue to do that, 
and I think Secretary Cohen can address our defense posture in 
Asia, which is very robust.
    There are a couple of different ways to answer what you 
have asked. First of all, let me say that in terms of the 
original agreement as we have been talking about NATO expansion 
and the Founding Act, we have made quite clear, as NATO itself 
has released its posture on conventional forces, and I will 
state this specifically, and let me read it: ``In the current 
and foreseeable security environment, the alliance will carry 
out its collective defense and other missions by ensuring the 
necessary interoperability, integration, and capability for 
reinforcement, rather than by additional permanent stationing 
of substantial combat forces.''
    That is a unilateral NATO statement that was made about 
forces. Second, under the Conventional Forces in Europe Treaty, 
which, in fact, rules the number of forces that exist in 
Europe, what you have seen is a steady decline in the number of 
American forces. That is the way we see that treaty.
    On the third point, as I said in my oral statement, we 
frankly are eliminating, by enlarging NATO, some of the exact 
kinds of problems that have led our intervention in Bosnia. I 
think that we are helping to prevent those kinds of conflicts.
    Also, while article V does mean that there is collective 
defense, not all military activities within the NATO structure 
are article V, or require that kind of response. So I would say 
to you that while we do not have a crystal ball, the trends are 
downward in the number of forces that the United States has in 
Europe, and that the enlargement of NATO is one way to prevent 
the kinds of conflicts such as Bosnia.
    Chairman Stevens. Senator Leahy.

                           Enlargement costs

    Senator Leahy. Thank you, Mr. Chairman.
    I noticed that CBO says the cost of NATO expansion in 
fiscal year 1999 will include $110 million from the foreign 
operations budget. Is that amount included in the Defense 
Department's estimate of the cost of NATO expansion for that 
year?
    Secretary Cohen. I am sorry?
    Senator Leahy. There is $110 million for NATO expansion 
that is going to have to come out of the foreign operations 
budget. That $110 million, that is just for 1 year, fiscal year 
1999. Is that amount in the Defense Department's estimate of 
the cost of NATO expansion? Does anybody know?
    Secretary Cohen. No.
    Secretary Albright. It is in the State Department budget.
    Senator Leahy. I know that, but is that $110 million on top 
of what the Department of Defense predicts for expansion, or is 
it within the amount that you have predicted?
    Secretary Cohen. I think it would be part of that, but I 
would have to go back and double check on it.
    Senator Leahy. Could you double check because we are 
talking about military grants, loans, training funds, and so 
on. If we are going to spend $110 million of foreign ops money, 
we want to know if it is in addition to what you are 
predicting.
    Secretary Cohen. It is separate.
    Senator Leahy. OK. Could you provide, then, for the 
committee exactly how that breaks down and how much both of you 
expect to request for fiscal year 1999 for NATO expansion and 
if there are programs that are going to have to be cut to do 
that?

                        Antipersonnel landmines

    Let me ask you another question that occurred to me as I 
was coming here this morning. The day after the Nobel Peace 
Prize was awarded to the International Campaign to Ban Land 
Mines, President Yeltsin announced that Russia would sign the 
land mine treaty. I do not know if he means it when the other 
100 nations come to Ottawa to sign it in December or not.
    To your knowledge, has the administration done anything to 
either discourage or encourage Russia from signing the treaty? 
Madam Secretary.
    Secretary Albright. We have, as you know, all along been 
trying to get a ban on antipersonnel land mines.
    Senator Leahy. I understand that.
    Secretary Albright. But we have not specifically done one 
or the other.
    Secretary Cohen. The answer is no.
    Senator Leahy. Have we sought to encourage or discourage 
Japan from signing the treaty in Ottawa in December?
    Secretary Albright. We have not. I think that it will be 
important for our experts to talk about how the signing of the 
treaty will affect their obligations under the defense 
guidelines.
    Senator Leahy. So it is your understanding that prior to 
Ottawa we will be having discussions with Japan on whether they 
should or should not sign the treaty as written?
    Secretary Cohen. I would like to answer that. I would hope 
we would have discussions with Japan and virtually every other 
member of NATO who is contemplating signing the treaty in terms 
of how to reconcile the NATO Treaty obligations with the 
banning of antipersonnel land mines. If it is going to prevent, 
for example, those who do not sign from carrying out their 
article V agreements, I think we have to clarify that, yes.
    Senator Leahy. So then you would be in a position, as it is 
now written, to discourage NATO members from signing.
    Secretary Cohen. Not at all. What I want to know is whether 
or not the treaty they are signing, if they intend to sign in 
Ottawa, would override their article V obligations to NATO. 
That would be a very important issue.
    Senator Leahy. So you expect to be having those 
conversations with the NATO countries between now and the 
signing time in Ottawa?
    Secretary Cohen. I would hope so.
    Senator Leahy. Well, hope so or will have.
    Secretary Cohen. I would encourage that, yes.
    Senator Leahy. Is the United States putting pressure on 
Australia, one last country, one way or the other, prior to 
signing?
    Secretary Cohen. The answer is no.
    Secretary Albright. No; we have, Senator, just met with the 
Australians. We did not. I just had a conversation with the 
Japanese 2 days ago and I did not. And, as Secretary Cohen has 
said, there needs to be some clarification, but no pressure.
    Senator Leahy. And if in your judgment their signing would 
not be consistent with their NATO obligations, would you make a 
recommendation to them one way or the other whether they should 
sign or not?
    Secretary Cohen. I would like to make my own position very 
clear. I think the President made the right decision in not 
signing the treaty as drafted. I think it will put our troops 
in serious jeopardy. Frankly, each country will have to make 
its own decision. But I think they should sign this. If they 
sign it, with full knowledge that if there is conflict between 
article V obligations of the NATO Treaty or other 
relationships, they should know about it before and not find 
ourselves in a situation later.
    Senator Leahy. That was not my question. I understand the 
DOD's position on this, just as I have pointed out to the 
President that if the administration had gotten into the 
negotiation at the beginning, they probably would have reached 
agreement and we would be signing in December.
    But my question specifically was this. If you felt, after 
talking to our NATO allies that their signing would be 
inconsistent with their NATO obligations, would you make any 
recommendation to them either way whether they should sign or 
not?
    Secretary Cohen. If I have a chance to talk to any of my 
counterparts, I would point out that this is an area that we 
have to discuss. If there is a conflict, we should know about 
it before they sign rather than after, and then have to 
reconcile the differences.
    Senator Leahy. I will repeat the question.
    Chairman Stevens. Senator, sorry. Your time has expired.
    Senator Leahy. I would resubmit the question, then, for the 
record, because frankly, Mr. Chairman, the Secretary has not 
answered my question.
    Chairman Stevens. Well, you will have another time around.
    Senator McConnell.

                         NATO-Russia relations

    Senator McConnell. Thank you, Mr. Chairman.
    As we all know, the Russians trained, financed, and 
supported the Abkhaz succession movement. This is really a 
question to either of you or both. What is your view of 
Russia's regional ambitions today and the role that NATO might 
play in that regard?
    Secretary Albright. Well, it is a rather large question.
    Senator McConnell. Well, take a shot at it.
    Secretary Albright. Let me say that basically it is a 
little different in each of their regional areas. They have, in 
fact, been working with us, for instance, all of us together, 
on resolving the Nagorno-Kharabakh issue, the Armenian-
Azerbaijani issue. On Georgia, we have been talking with them, 
and there is a U.N. operation there also.
    I think there is discussion generally, which I think will 
become a larger part of the discussion, as to how we do 
peacekeeping operations together. Secretary Cohen has talked 
about Bosnia a little bit. I think that these are the kinds of 
future discussions that we might have. But I think their 
general picture at the moment is that they would like to see a 
certain amount of stability on their borders.
    Senator McConnell. Secretary Cohen, do you want to answer?
    Secretary Cohen. Well, what we have tried to do is continue 
a process that was initiated by Bill Perry when he was 
Secretary of Defense, to establish strong military-to-military 
ties and contacts. That was initiated with Bill Perry and I 
have tried to continue that.
    We have the Nunn-Lugar funds, which I think you made at 
least oblique reference to in terms of what kind of 
complications we might have in seeing a continuation of the 
funding, in view of the fact that there have been some 
allegations and stories about sales of weapons going into Iran. 
But the Nunn-Lugar funding is very important to continuing that 
relationship.
    There has been a deterioration in their conventional forces 
which has prompted some of their military officials to say that 
in order to compensate for our deficiencies, we will just turn 
to a tactical nuclear weapons or first-use type of strategy. 
This is something that we would try to discourage very strongly 
and hope that that does not take place. But in order to do 
that, we have to maintain these relationships.
    I met with the new minister, Sergeyev, and I also met with 
the former minister, Rodianov, to impress upon him--I should 
say them--the importance of ratifying START II. Minister 
Sergeyev is a strong proponent of ratifying START II. I think 
if they see it as in their interest to try to lower the 
tensions, to build better relations, to try to get their 
economy rationalized, to continue on the road that President 
Yeltsin is on, and to rebuild their country with the proud 
heritage it has had over the years, they will sign.
    Senator McConnell. If I may, let me come back to you, 
Secretary Albright. I had an opportunity, as you and I 
discussed a couple of weeks ago, to visit the refugee camps in 
Armenia and Azerbaijan during August. I am wondering, even 
though I had mentioned the Abkhaz problem in my question, I 
wondered if you could give me an update on the Minsk group, how 
those discussions are coming and whether or not you believe we 
are going to be able to play a major role in finally settling 
the Armenian-Azerbaijan problem.
    Secretary Albright. There is a three-way co-chairmanship 
among the Russians, the French, and us. At that particular 
discussion now, Strobe Talbott is our representative there. I 
think there has been some progress on it.
    I talked to Foreign Minister Primakov about it when we were 
in New York during the U.N. General Assembly. There are some 
hopeful signs. But it goes back and forth, I have to tell you 
frankly. But the procedure, the process now, we believe is more 
productive than it was previously in the Minsk group.
    Senator McConnell. In your view, the Russians are playing a 
positive role on those discussions, are they?
    Secretary Albright. Yes; I would say so.
    Senator McConnell. Do you think they would like to see this 
dispute settled?
    Secretary Albright. I think they would like to see it 
resolved, and I know we would.
    Senator McConnell. During the Permanent Joint Council 
meetings, will Russia have any access to sensitive material 
pertaining to force structures or military capabilities of 
current, prospective or aspiring NATO members?
    Secretary Cohen. The answer to that is no.
    Senator McConnell. As I understand it, there is an ongoing 
process by which any country having an interest in joining the 
alliance can request individual meetings with current NATO 
members and staff to discuss qualifications for acceptance. As 
those requests for meetings occur, is Russia advised of those 
meetings? Or do you know?
    Secretary Cohen. Not to my knowledge. In fact, I recently 
returned from Bulgaria and have talked with all of the 
officials there. They are very interested at some future time, 
assuming their economy allows it, and assuming their reforms 
take place, to also request admission into NATO. And there is 
no request coming from me or from the Defense Department that 
we notify any Russian official about this.
    Senator McConnell. So any information from these sessions 
then would not be supplied to the Permanent Joint Council and 
the Russians would not be involved in these discussions 
regarding new membership in NATO through the Permanent Joint 
Council?
    Secretary Albright. That is not part of the agenda as it 
was established at the Permanent Joint Council meeting we just 
had.
    Senator McConnell. So when you say, Madam Secretary, they 
will have a voice, not a veto, that does not include briefings 
about prior discussions between NATO and possible members?
    Secretary Albright. They will not, Senator, have a part in 
deciding who the new members of NATO will be, just as they have 
not had a part in deciding the invitations that have been 
issued this time.
    What is established is a consultative mechanism on how we 
can do preventive diplomacy. We are looking at a variety of 
ways that the NATO members, plus Russia, can coordinate 
activities. But if we disagree, then NATO will do its own 
thing. But this does not enable them to be a part of intra-NATO 
discussions and membership of new members is one of those kinds 
of discussions.
    Chairman Stevens. Senator, I am sorry. It is Senator 
Hutchison's turn.

                       U.S. contributions to NATO

    Senator Hutchison. Thank you, Mr. Chairman.
    Recently the President used his line item veto to veto 
around $300 million of military construction projects, which 
included projects such as operational headquarters 
enhancements, ammunition storage facilities, corrosion control 
facilities, maintenance facilities, almost all of which were in 
our Department of Defense 5-year plan. At the same time, he 
signed into law military construction of $150 million for NATO 
enhancements, many of which were the same as he vetoed in U.S. 
projects.
    I think it is a concern when we are looking at costs that 
we are assured that our priorities for our readiness to be able 
to fight and win two major regional conflicts, I think 
simultaneously, I think the administration believes nearly 
simultaneously. I think these two are beginning to look like 
priority issues. Are we going to spend so much on NATO 
expansion? Are we going to prioritize NATO projects over U.S. 
projects that are in our 5-year plan? And how would you 
reconcile, Mr. Cohen, those kinds of vetoes? Is that something 
that we are going to look forward to for the next 10 years if 
we expand NATO?
    Secretary Cohen. I think that obviously the President is 
going to want to support those projects which strengthen U.S. 
capability to provide our global commitments. To the extent 
that NATO enlargement would be part of that, he is also going 
to support those projects which would help strengthen that.
    I think there is perhaps some confusion over the status of 
some of the military construction projects. That is under 
review right now by the administration as to whether there was 
sufficient information on several of the projects in terms of 
their progress, and whether they could have been executed in 
this fiscal year.
    But I think that to the extent we strengthen our full 
capability of meeting these two major regional conflicts 
simultaneously or nearly simultaneously has to be our top 
priority. To the extent that an enlarged NATO also is part of 
that responsibility, then obviously they would have to 
coincide.

                        United States in Bosnia

    Senator Hutchison. Well, my concern comes from the efforts 
in Bosnia as well. I certainly think that the American people 
will support operations like Bosnia on a short term, where we 
see a chance for success. But if you are looking at extending 
this, which both Secretary Albright and others in the 
administration have indicated that we are going to stay beyond 
June of next year, and that there is no exit strategy that we 
have been given, I think this becomes a real concern about 
whether we are going to be taking from our own readiness and 
our ability to address issues in the Pacific, as mentioned by 
our chairman, in the Middle East, in other concern areas around 
the country.
    How are you going to reconcile this and add another layer 
such as this one? How do you reconcile that?
    Secretary Cohen. I believe the committee has already spoken 
on that issue. The committee, in passing its appropriation 
bill, indicated that the funds for Bosnia at least would 
terminate at the end of June 1998 unless the President were to 
come forward with a proposed plan for deployment of troops--how 
many, how long, what the impact would be upon readiness and 
morale--and submit a supplemental request.
    So I think the committee has already spoken on that issue. 
But I think that the President, myself, Secretary Albright have 
indicated the SFOR mission will end as such in June 1998. The 
President has stated that the international community, of which 
the United States is a part, will have a long-term interest in 
stability in that region, what form that will be manifested has 
to be determined, and Congress is going to play a co-equal role 
in determining that.
    Senator Hutchison. I am glad to hear you say that. So you 
are then indicating that Congress is going to have a role, that 
you take seriously the bill that was just passed saying that 
there would be a supplemental appropriation and, hopefully, a 
strategy for how we would succeed and what would be success so 
that we would know when we would be able to leave?
    Secretary Cohen. That is what the committee's bill 
required.
    Secretary Albright. Let me associate myself with that, so 
that there is no sense of any different position. We have made 
that quite clear, that the SFOR mission will end in the summer 
of 1998, and that, as the Secretary has stated, there will be 
some kind of international presence. No decisions have been 
made that you will not be a part of.
    Senator Hutchison. Well, I think that is important, because 
we have seen now, with the operations in Bosnia, that the 
administration changes the name of the mission and then goes 
forward into staying there. And changing the name of the 
mission is not going to end the commitment.
    What we want to know is what do you envision as a policy, 
what are the chances for success, what will be success, and 
when can we exit. And changing the name from SFOR to something 
else is not the answer. It is what is our long-term commitment 
and will it take from our readiness.
    Chairman Stevens. Senator, your time has expired.
    Senator Hutchison. Thank you.
    Chairman Stevens. Senator Bumpers.

                            Reform in Russia

    Senator Bumpers. Thank you, Mr. Chairman.
    First of all, let me say to both of you that you speak 
extremely well and make the most persuasive case for 
ratification of the treaty. I remember in 1978 Senator Henry 
Bellman from Oklahoma, a man whom I really admired greatly, 
after most of us had made long, lengthy speeches about why we 
should ratify the Panama Canal Treaties, about an hour before 
we voted got up and said, in less than 60 seconds, that he was 
going to vote for the treaties because he thought we ought to 
treat the Panamanians the way we would like to be treated, 
which summarized the whole thing.
    My view on this whole thing is probably more visceral than 
it is cerebral. I think about an old farmer one time in my 
State, when we had boycotted further grain shipments to Russia, 
which you both remember very well. And one night in a meeting 
he said, ``I think a fat, happy Russian is a lot less threat to 
us than a starving Russian.'' I thought that was a very cogent 
thought.
    Now what we want is an economically vibrant, democratic 
Russia, and we think that that would redound to our benefit. My 
own visceral feeling is that if I were a Russian I would feel 
that NATO expansion was designed to further hem me in, not to 
assist me in building a democracy.
    Let me say that, if the Russians feel threatened enough, I 
think history shows that they will penalize their efforts to 
build a vibrant economy in favor of building their military 
forces back up. Now, some people fear that, because its economy 
and conventional military forces are in a shambles, Russia will 
respond to NATO expansion by putting more reliance on its 
nuclear forces and on tactical nuclear weapons as a substitute 
for conventional forces.
    Secretary Cohen, let us just assume for the moment that 
that is a true statement, that that proves to be the case. Is 
the United States more secure if we lower the nuclear 
threshold?
    Secretary Cohen. No; we are not more secure if the 
threshold is reduced, but that is not the situation. In my 
discussions with Minister Sergeyev, for example, a head of the 
strategic rocket forces who is now the minister of defense, he 
strongly favors ratifying START II so that we can go on to 
START III to lower the level of nuclear weapons in both of our 
arsenals. It is in Russia's interest. He knows that. It is in 
our interest, and we know that.
    And that is the reason why we are keeping up these strong 
contacts. It is the reason why, for example, we had Mr. 
Primakov come over to meet with the Joint Chiefs of Staff in 
the tank. It is the reason why we invited the former minister 
of defense to come and talk to us. We think that we are 
persuading them that this is not directed in a hostile way 
against Russia but, rather, we are hoping to spread more 
prosperity and stability so that there will be less tension in 
Europe rather than more.
    So we think we can make that case, and we think we need the 
leadership of President Yeltsin and Sergeyev and Chubias and 
others, and that is the reason Secretary Albright has spent so 
much time on this issue and dealing with her Russian 
counterparts, the reason that I am spending so much time.
    Senator Bumpers. But they have not ratified START II yet, 
and they certainly have not ratified START III, and the 
Communists are very dominant in the Duma right now and for the 
foreseeable future it does not look like they are going to 
ratify it.
    Secretary Cohen. Well, I would tend to disagree. I think 
that there are some very positive signs about that. I think 
that we are moving ahead with negotiating with the Russians on 
this, and it is in their self-interest. I think if you have the 
minister of defense, who enjoys a very high reputation with all 
of his military counterparts and with the President and, my 
understanding is, with the Duma, that that makes a powerful 
case for ratification because it is in their interest to ratify 
it.

                           Threats in Europe

    Senator Bumpers. Secretary Cohen, what is the threat to 
Poland, the Czech Republic, and Hungary?
    Secretary Cohen. There is no current military threat from 
Russia at this point or from any other country. What we have 
seen is the threat in the future or in that region of central 
Europe has been the question of instability. Peter Rodman 
testified before the House National Security Committee, I 
believe, recently and pointed out that what has been the threat 
has been the location. Geography has positioned them between 
two very large powers--one, Russia, one Germany.
    Historically the countries--Poland, the Czech Republic, 
Hungary--have been caught between either German and Russian 
competition or German-Russian collusion. In any event, they 
have found themselves oppressed in a way that none of us would 
find tolerable.
    So what it is is an opportunity for these countries to join 
the Western family as such, or the European community of 
freedom, stability, prosperity, and, hopefully, that will 
produce even greater security for Russia as well.
    Senator Bumpers. Mr. Chairman, let me make this closing 
thought. Zbig Brzezinski has a new book out, which I thought 
was rather impressive, in which he theorizes that anarchy is 
always just a step away. I do not mean literally, but anarchy 
is always a threat to the planet.
    He theorizes that the only way you are going to be able to 
stop that for the foreseeable future is for the United States 
and the Eurasian continent to always have mutual defense 
treaties and economic treaties which allow a certain amount of 
prosperity and mutual interest in keeping peace everywhere.
    And he also says in the book that that must include Russia, 
and you must have an accommodation with China. I agree with 
both those premises. And it seems to me that NATO expansion 
causes me a great deal of pain on that point.
    Secretary Albright. Could I respond, Mr. Chairman? I think 
that we have been very conscious of what you have spoken about 
here. First of all, how to allow these new countries to become 
members of NATO, but at the same time not have Russia have a 
sense of isolation. And that is why the Founding Act, I think, 
has played a huge role in this.
    The predictions about the Russians are not coming true. The 
first meeting of this Permanent Joint Council was remarkable in 
the way that the Russians were able to participate in the 
discussion. Second, we know that they do not like NATO 
enlargement, but they are finding a variety of other ways to 
work with us and, as the Secretary has said, both Foreign 
Minister Primakov and Defense Minister Sergeyev are now pushing 
for the START Treaty to be ratified by the Duma because it is 
to their advantage.
    If I might say, I was working for Senator Muskie at the 
time that Senator Bellman made that statement. Then I did work 
for Zbig Brzezinski. Muskie said I had the great distinction of 
being the only woman in the world that had gone from pole to 
pole. [Laughter.]
    I can tell you that Brzezinski is for the expansion of 
NATO, as he sees it within that construct and also in the way 
that the Permanent Joint Council is working.
    So while you are not going to see the Russians applauding 
the enlargement of NATO, they are, in fact, developing a very 
good working relationship with us on a whole set of issues that 
show a new relationship that is being now institutionalized in 
the PJC.
    Chairman Stevens. Senator Bennett.

                    Russia's reaction to enlargement

    Senator Bennett. Thank you, Mr. Chairman.
    I have enjoyed this a great deal and I hope I have learned 
something. You are both familiar with Michael Mandelbaum's 
piece called ``NATO Expansion: A Bridge to the 19th Century.'' 
I read it with great interest. We do not have the time to go 
through all of his points to give you an opportunity to 
respond, but let me pick out a few of them and get your 
reactions to them, because I think he has been very thoughtful 
in putting this together.
    He says the prospect of expansion has already damaged the 
West's relations with Russia, that it is not necessary to go 
ahead with expansion. There has already been some damage, and 
he cites some evidence to support that.
    Let us suppose for just a moment that the treaty is 
defeated. What would your crystal ball, however clouded and 
unfunded it may be, tell you would be the response in Russia? 
Assuming for just a moment that Dr. Mandelbaum is correct, 
would there be a recovery of damage that may have been done or 
has the damage been done, in which case the argument could be 
made we might as well go ahead because we have already had the 
problem?
    Suppose the Senate rejected the treaty. What do you think 
would be the reaction?
    Secretary Albright. Well, thank you for asking that. I 
think it is a very interesting question. First of all, I would 
like to revert as much to my professor role as to my Secretary 
role in this speculation.
    Senator Bennett. That is what we all need.
    Secretary Albright. I would say the following. First of 
all, we have made very clear why NATO enlargement is important 
and in the U.S. national interest and why it is important to 
the countries that have been invited. There are those that say 
that this gives solace to the extremists in Russia. I would say 
that if this treaty is defeated, that gives solace to the 
extremists in Russia. They will say that they are able to yet 
again be in a position to manipulate Russian foreign policy, 
and it would show that the Russians do have a voice over what 
the United States and our allies would like to do in central 
and Eastern Europe.
    So I would say the opposite of what we want would happen, 
that it, in fact, would give a great deal of strength to the 
extremists that they had been able to do this.
    I had a discussion with President Yeltsin, who says that he 
wants us to see a new Russia, and we do see a new Russia and 
that requires them to see a new NATO. And this new NATO is not 
a threat to Russia. It is not designed in that way. It is 
designed to deal with the problems of instability in central 
and Eastern Europe, and those would be magnified if this treaty 
were turned down.
    I also totally disagree with Dr. Mandelbaum, who is a 
professor and not in the Government, and I would note that our 
position vis-a-vis Russia has not in any way deteriorated as a 
result of our going forward with this.
    Senator Bennett. Do you have anything to add to that?
    Secretary Cohen. No; I think the Secretary of State has 
said it very well. But I just point out I have enormous respect 
for Michael Mandelbaum, but I also would point out what a great 
country we live in that we can have brilliant intellectuals who 
disagree with each other without penalty. We have Henry 
Kissinger, who feels that we should enlarge NATO, but even 
larger than we are currently contemplating, has a disagreement 
in terms of the NATO-Russia charter, which we have talked 
about.
    But you have brilliant minds in this country and scholars 
who each can have different opinions. I respect his opinion, 
but I happen to disagree with him.

                  Military purchases and requirements

    Senator Bennett. One of the issues that I heard from the 
defense minister in Germany had to do with the speed with which 
the new entrants into NATO would be equipped with modern 
weapons. He made the comment that they do not need the very 
latest and fanciest right away and that this could be a fairly 
significant cost saving if you moved into this slowly.
    Do you have a comment on that concept?
    Secretary Cohen. Well, as a matter of fact, it is 
contemplated that there will be an initial capability within 
the first couple of years, but to have a mature military 
capability to allow the full integration will take roughly 8 to 
10 years. We contemplate that.
    And, as the chairman has indicated before, we first have to 
focus on training their personnel, upgrading their NCO corps, 
language training, interoperability, and all the things prior 
to getting into new, expensive equipment.

                            CIA resignation

    Senator Bennett. One last question that has nothing 
whatever to do with NATO expansion but takes advantage of your 
being here. Gordon Oehler, who has headed the CIA's 
nonproliferation center for more than 5 years, rather abruptly 
announced his retirement. Do you attach any significance to 
this? Is this a signal of any kind of attitude in the 
administration toward proliferation and tracking proliferation? 
I know we have talked on proliferation issues at other times 
when you have been before the committee and I wanted to raise 
this and give you an opportunity to comment.
    Secretary Albright. Let me just say I know nothing about it 
beyond what I read in the paper today. But I can also tell you 
that dealing with proliferation is the highest priority item of 
this administration, and we have made that clear across the 
board in our dealings with countries and we will continue to do 
so. I can assure you of that, Senator.
    Senator Bennett. Thank you, Mr. Chairman.
    Chairman Stevens. Senator Harkin.

                            Open door policy

    Senator Harkin. Thank you, Mr. Chairman.
    I appreciate your testimony and your responses to the 
questions. I have listened as carefully as I have been able to 
during this period of time.
    I find myself in much the same position as Senator Bumpers. 
I am not certain. I can see benefits to it. I have always 
believed in the old adage that democracies do not attack one 
another, and to the extent that we can put an umbrella over 
democracies and bring them together into mutual defense 
treaties, that is probably the best thing that we can do.
    On the other hand, if you look at Russia and the other 
countries and their histories, it raises some severe questions 
about the total cost and what the impact will be down the road 
on our relations with Russia.
    There are two parts to my question. One, Secretary Cohen, I 
want to get back to the weapons thing that we talked about, but 
before that I want to talk about NATO expansion. What we are 
talking about is three countries. That is all we are talking 
about. But we always talk in terms of expanding beyond that.
    What is contemplated, if this passes the Senate? When will 
you be back again? When will this administration be back again 
to ask for further expansion of NATO? How soon do we 
contemplate that?
    Secretary Albright. Senator, we have said that this is an 
open door, and that all democracies and market economies in 
Europe are eligible for this. But we have also made clear that 
the next tranche would not be until 1999, if, in fact, there 
are those that are ready to assume the responsibilities and 
privileges of NATO membership.
    I think it is very important here to think about the fact 
that we cannot allow a line that was created at the end of the 
Second World War to continue to dominate our view of Europe. We 
need to see a free, democratic, and unified Europe, which I 
believe is in America's national interest, and to have this be 
static does not allow us to do that. And I do not think that we 
should allow this artificial line that was created to be the 
one that continues to be maintained.
    Senator Harkin. I guess I am concerned about who can be 
considered as new NATO nations. Could any member of the 
Partnership for Peace be eligible?
    Secretary Cohen. The answer is yes. Those who are, in fact, 
engaging in the Partnership for Peace program are ones who are 
trying to prepare themselves for future membership. But it is 
up to them. You have, for example, Ukraine. Ukraine engages in 
Partnership for Peace exercises. I attended one this summer.
    They have not expressed any interest in joining NATO. But 
they could at some future time. It will depend upon those 
countries requesting admission. Then the question will be 
whether the remaining NATO institution itself would agree. 
There is no boundary as far as we are concerned. Those 
countries who measure up by virtue of what they have done with 
their economies, their societies, their militaries, if they 
share our values and want to become part of NATO, would be open 
for recommendation. Then a judgment would have to be reached by 
consensus of all of the existing NATO members as to whether 
they should be admitted, subject to ratification by the 
parliaments.
    Senator Harkin. So even Russia could be admitted?
    Secretary Albright. Yes; technically.
    Senator Harkin. And why should it not be?
    Secretary Albright. Well, they have not----
    Senator Harkin. Why should we not anticipate that down the 
road bringing Russia in might be the best assurance that there 
would not be a new dividing line.
    Secretary Albright. We have, in fact, said that in 
principle it is open to Russia. Russia has exhibited no 
interest in becoming a member.
    Senator Harkin. Not right now. None of us have this crystal 
ball to see what they may be doing in the future.
    Secretary Albright. I do think that we are all present at a 
fantastic time where our imagination in many ways can be set 
free in terms of looking at new institutional arrangements. 
That is what we are doing every day in some form. And I find it 
an exhilarating way of looking at a world that looks entirely 
different from the one that we grew up with.
    Senator Harkin. Well, let me put it this way. A lot of 
time, signals are sent by things that people in one 
administration or another says. Are any signals being sent 
that, down the road, Russia could be a part of this?
    Secretary Albright. The President has said, we have all 
said, that actually the logic of this is that if they as a 
democracy and a market economy, if down the line they would 
like to be members of NATO, they could be. But it is definitely 
hypothetical because they have said they are not interested.
    Senator Harkin. But at least it is a possibility.

                            Defense spending

    Second, on the weapons upgrades point that I raised, I know 
what you are saying about getting in first with communications, 
language training, command and control, and all that kind of 
thing, but weapons systems do take long lead times, and, Madam 
Secretary, you mentioned that the Czech Government, for 
example, is increasing its defense spending by one-tenth of 1 
percent of GDP a year for 3 years. Secretary Cohen, you 
mentioned that also, and you said that they were going from 1.7 
percent of GDP to 2 percent by the year 2000, or one-tenth of 1 
percent per year.
    You equated that to the equivalent of a 1-year increase of 
17 percent, Secretary Albright, in the Czech Republic, a rise 
of 17 percent by next year, the equivalent of a 1-year $40 
billion increase in America's defense budget.
    I just put in the margin of your written testimony, ``this 
is good?'' I put a question mark. Is this good for the Czech 
Republic? You say they have a dynamic economy. We have a 
dynamic economy. What would happen if, Secretary Cohen, you 
came up here next year and requested a $40 billion increase in 
defense spending? It is not going to happen.
    Secretary Cohen. I believe Secretary Weinberger did 
precisely that during the Reagan years and was successful. A 
lot depends on where you are starting from. The Czech Republic 
is behind both Poland and Hungary in terms of their capability 
at this point, but they have made it very clear that they 
intend to reach that 2 percent level of GDP by the year 2000. 
They have made a number of significant changes in recent weeks.
    In fact, we pointed out that they were not allocating 
enough of their military to a NATO commitment. Within a matter 
of a couple of weeks, they now are allocating most of their 
commitment of their military to NATO missions. So we have been 
very pleased that they have been responsive to what we think 
they need to do in terms of upgrading their capability to 
eventually have that mature capability of being able to carry 
out their article V requirements.

                          Economic conditions

    Senator Harkin. Let me just say that in these countries 
where the IMF has said you have got some real problems in terms 
of loan repayments. I have not been to the Czech Republic. I 
have been to others, and they have a lot of catching up to do 
just in terms of their infrastructure--their sewers, their 
roads, their bridges, their schools, their social structures, 
everything. They have got a lot of catching up to do.
    And so they have got to invest some money in 
infrastructure. And if that is being taken away for the NATO 
expansion, I have some real concerns as to what will happen in 
those countries.
    Secretary Cohen. If they were not included in NATO 
expansion, they would still have defense requirements which 
would be even greater, because then they would be outside of 
the protective umbrella. As such, they might feel that they 
have to go in a different direction to acquire the high tech 
equipment which we are suggesting that they do not need at this 
point.
    Senator Harkin. So your point is that by including them in 
NATO they will spend less than what they otherwise would.
    Secretary Albright. Correct. President Havel has said that.
    Chairman Stevens. Thank you, Senator. Senator Lautenberg.

                  Enlargement costs and burdensharing

    Senator Lautenberg. Thanks, Mr. Chairman, and thanks, 
Secretary Albright, Secretary Cohen. We have quite an 
impressive duo sitting at the table--formidable, I would say.
    On balance, I am in favor of the expansion of NATO. I am, 
however, concerned about a few things. I have always been 
interested in burdensharing, because I do not always see our 
relationships with some of our friends with whom we have 
military alliances and, many of which are very prosperous 
nations, as fair. Not until we tweaked them pretty hard did 
they step up to the plate to carry their fair share of the 
defense burden.
    I listened carefully as Secretary Cohen talked about the 
prospects that NATO expansion might cost less than originally 
anticipated. But we have a fixed relationship of our share to 
the total cost, and some of our allies are complaining that 
they will not expand their share. It has come from France. It 
has come from the United Kingdom, as I understand it. No?
    Secretary Cohen. No.
    Senator Lautenberg. Well, how about France? Can we agree on 
that? Can we agree that France represents a fairly significant 
example of reluctance to participate that could result in costs 
passed along to the United States? Now if we see a decline in 
the anticipated cost, will our share of those total costs stay 
constant? Will our contribution go down?
    Secretary Cohen. Our share will stay constant. Let me 
respond.
    Senator Lautenberg. Share constant but dollar value?
    Secretary Cohen. Our dollar value will remain the same, as 
will the percentage. We are looking at that $9 to $12 billion 
figure which I mentioned initially. That is the one category 
that involves NATO enlargement costs. The other two are 
separate and apart. That is the figure that is likely to be 
lower by virtue of what we have learned as far as the 
capability of the three countries coming in.
    The NATO countries, I spoke to the NATO ministerial 
conference, and I indicated there are costs involved and 
everybody will have to share in those costs. There will be 
costs involved to the new members, to the existing non-U.S. 
NATO members, in terms of reforming their military. And then, 
when it comes to the enlargement, again it is about $1.8 
billion in the NATO fund that we all contribute to.
    Our portion of that is about $485 million for 1997. They 
maintain--and there is no unanimity on this--the British 
defense minister is reported in today's Washington Times, I 
believe, as indicating if there are increases they will pay 
their fair share of the increase. France had said it did not 
feel there was any necessity for it. Germany has indicated they 
could reprioritize and take lesser prioritized items and put 
the money into the NATO common fund so that they could help 
those three countries coming in.
    It remains to be determined in terms of the defense 
ministerial assessment. That will be done in December. I will 
be happy to come back to you with some solid figures, as solid 
as we can make them, before you have occasion to vote on this. 
But I believe it is very clear to all of the NATO countries the 
costs involved and they will all have to bear their fair share.
    Senator Lautenberg. Right. But I am concerned about our 
allies paying their fair share of the burden, recognizing 
nonetheless that these are not the kinds of figures that break 
the bank.
    So if there is a decline in costs, do I hear you correctly 
that our percentage share will stay the same? Or is it the 
dollar amount that will determine how much we contribute?
    Secretary Cohen. Well, the percentage, we still pay roughly 
24 percent into the common fund. That is standard. The dollar 
figures may come down because we may not have to reach that $9 
to $12 billion figure.
    Senator Lautenberg. It is simple enough. Therefore, it 
would suggest that if costs go up, we will have the 
responsibility of paying again our share and, thusly, more 
dollars.
    Secretary Cohen. As will they.
    Senator Lautenberg. OK. I just would like to be able to 
talk about this to my constituents as I try to prepare for 
their questions.
    What happens if countries decline to pay their fair share? 
Those receivables, coming from a business background, must be 
tough to collect.
    Secretary Cohen. I turn them over to Secretary Albright.
    Senator Lautenberg. I would be frightened of that, I would 
say, if I was the debtor.
    Secretary Cohen. Well, they have it in their own interests. 
I mean, NATO functions as a consensus institution as such. We, 
if we find that there are deficiencies, we point those 
deficiencies out. For example, when I was in Maastricht, I said 
I did not think they were moving ahead quite fast enough in 
terms of the reforms that they needed to make, that they 
pledged to make in 1991. It turns out that the British, of 
course, have made significant improvements in their rapidly 
deployable forces. They have about a 25,000-person capability 
of deploying to the Persian Gulf, should that ever be 
necessary, and sustain it.
    The Germans are now putting together a rapid action force 
that could be rapidly deployable. It will be about a 53,000-
person unit as such. Ten thousand will be stood up by next 
year, by 1998. The French also have rapidly deployable forces 
which they can deploy to Africa and elsewhere, which they are 
doing.
    And I might point out in terms of burdensharing you have 
got France as the third largest contributor to SFOR, the United 
Kingdom is the second largest contributor to SFOR. Germany now 
has some 2,500 troops outside of German soil in Bosnia 
contributing to that mission.
    So we are seeing a lot of participation on the part of our 
European friends.
    Chairman Stevens. Senator, your time has expired.
    Senator Lautenberg. Well, I close very quickly, Mr. 
Chairman, by commending our witnesses and our friends here 
today at the table for presenting a very cogent and persuasive 
case.
    Chairman Stevens. Thank you, Senator. Senator Inouye.

                           PREPARED STATEMENT

    Senator Inouye. Thank you very much, Mr. Chairman. I 
apologize for being late. May I ask that my statement be made 
part of the record?
    Chairman Stevens. Yes.
    [The statement follows:]

             Prepared Statement of Senator Daniel K. Inouye

    Mr. Chairman, I want to begin today by thanking you for 
agreeing to hold this series of hearings on NATO enlargement. I 
feel this is one of most serious issues to face our country 
today.
    Forty eight years ago, the United States determined that it 
would serve our national interests to enter into a treaty with 
our European allies to help guarantee peace in that region.
    Since then, most would agree that the North Atlantic Treaty 
Organization has been one of the clearest foreign policy 
successes of this nation.
    Each of the last ten Presidents has solidly supported the 
NATO Alliance and our leadership role in that union. There has 
never been a doubt about our national commitment to this 
organization.
    For nearly fifty years, NATO has in large measure been 
responsible for keeping peace in Europe. Our men and women in 
uniform were called upon twice this century to answer the 
clarion call to help create, restore, and preserve democracy in 
Europe. The losses faced by our nation in these bloody 
conflicts were tragic. Since the creation of NATO none of 
America's youth has been required to fight a major conflict in 
that region.
    Today, the situation in Europe seems much different than 
that following World War II. Our most powerful European 
adversary, the Soviet Union, has collapsed. While the dispute 
in the Balkans might not lead one to proclaim that peace is at 
hand, the man on the street no longer looks at Europe as the 
potential trouble spot for this nation.
    The question that we must now grapple with is what should 
be the new role of the United States in the post-cold war era?
    Some, including our esteemed witnesses here today will 
argue forcefully that the United States must reaffirm its 
commitment to European security. That such is the price of 
global leadership. They contend that the United States should 
embrace an expanding role for NATO, one that welcomes new 
emerging democracies into this union.
    It is their view that this is the clearest way to maintain 
the peace in Europe. And, that it is the United States 
strategic interest to support this objective.
    Others maintain that the time for NATO is past. They argue 
it is a relic focused on the Soviet Union. They contend that, 
while the United States had a national interest in containing 
and eventually defeating an expansionist Soviet Union, its 
collapse has eliminated the need for the United States to take 
an active role in intra-European matters.
    Still others have argued that maintaining our role in NATO 
is a good hedge against a future problem in that region, but 
that does not argue for expanding NATO to include the former 
satellite states of the Russian empire. And clearly, they 
contend, it is not in the interest of the United States to pay 
any amount to bring these countries into NATO.
    Hopefully, at this meeting the witnesses can provide the 
committee a detailed explanation of why this administration 
supports NATO enlargement. Again, I thank you Mr. Chairman for 
calling this hearing. This is a very important issue and I hope 
the ensuing discussion will allow all members to better 
understand the matter.

                            Russia's future

    Senator Inouye. Madam Secretary, Mr. Secretary, I agree 
that the circumstances of the latter one-half of the century 
has placed upon us, whether we like it or not, the mantle of 
global leadership. Global leadership is painful at times and 
very costly. But I believe that it is in our best interest to 
maintain that leadership.
    And I agree with you that European security is an important 
part of it. When NATO was originally conceived, we had an 
adversary, the Russians, the Soviet Union. Today the picture 
has changed, but still an important element is Russia. Mr. 
Yeltsin at this moment seems very helpful to us. Do we have any 
indication as to what sort of successor government we can 
anticipate?
    Secretary Albright. Well, it is our hope--more than a hope, 
it is a projection--that basically as we work more with the 
Russians and as we do what we can to help develop their 
institutions, their democratic institutions, in a variety of 
codes that we will add strength to the reform movement.
    Democracy seems to be alive and well in Russia. There is a 
lot of debate and discussion. There is the evolution of a 
variety of institutions. And our policy is based on the fact 
that we want to encourage those institutions so that whoever 
the successor is is one who is grounded in more democratic 
practices than we had seen previously.

                 United States role in NATO and Europe

    Senator Inouye. Sorry I was not here to listen to the 
discussions, but, Mr. Secretary, what would be the results if 
the United States did not continue its leadership role in NATO 
and began to withdraw our interest? What would happen in 
Europe?
    Secretary Cohen. I think we would see a replication of what 
took place during the 20th century. After World War I, we 
returned from our engagement in European affairs and we turned 
our back on all of the sacrifices that were made. We allowed a 
mechanized evil to run over much of Europe and found people 
like yourself and Senator Stevens and others who were required 
to make the same kind of sacrifices that perhaps your fathers 
had made in World War I.
    If we were to turn our back on being a world leader, then 
we would find forces that could prove to unravel much of what 
has been accomplished in the latter part of the 20th century. 
We would find that there would be power centers that would seek 
to fill the vacuum, that that would not be in our interest, and 
we would find, inevitably, instability gathering momentum like 
those storm clouds that Churchill talked about during the 
1930's and 1940's.
    I think that we would see great instability and possibly a 
chaotic situation developing over a period of time. It is in 
America's interest to be a global leader. If we sacrifice that 
leadership or give it up, then we allow other powers who may 
not share our values or our interests to take hold. I think 
that would be a great abdication of our responsibility, be a 
moral abdication.

                           Consensus in NATO

    Senator Inouye. Madam Secretary, in the early days of NATO, 
there was definitely a spirit of cooperation and enthusiasm. Do 
you believe that that spirit still exists?
    Secretary Albright. Senator, I do. First of all, Secretary 
Cohen spoke about the number of activities that we do in common 
with our NATO allies. I think we had a mini-discussion about 
Bosnia. I have to say that we should see NATO's activities in 
Bosnia as a major success and what has been accomplished there 
as great steps forward.
    In the meetings that I have attended of the NATO ministers 
there is a sense of common purpose. There are disagreements, as 
there are within, between and among democratic nations. But I 
do think that there is a spirit of can-do within NATO, and a 
desire to adapt to the post-cold war situation.
    Senator Inouye. Thank you very much, Madam Secretary.
    Mr. Chairman, I commend you for holding these hearings.
    Chairman Stevens. Well, I thank you, Senator, and thank the 
two Secretaries. I feel a little frustration. I thought we were 
going to talk about costs. We have been talking about a lot of 
things other than cost. But I do want to ask you just two 
questions, Secretary Cohen.

                           Enlargement costs

    The ``Quadrennial Defense Review'' [QDR] did not 
contemplate an enlarged NATO. Will we see a revision of that 
based upon the concept of an enlarged NATO?
    Secretary Cohen. As a matter of fact, the QDR did 
contemplate an enlarged NATO, and that was factored in. We 
estimated four new members, but only three in this. So it was 
contemplated in the QDR. That assessment was made.
    Chairman Stevens. I stand corrected. That was not my memory 
of it, but I will go back and take a look at it.

                     United States troops in Europe

    Well, if that is the case, we have approximately 100,000 of 
our people on the continent today. Downstream, even at the 
lower levels, it is projected in terms of the three nations 
that they will provide about 200,000 more forces.
    Secretary Cohen. About 300,000.
    Chairman Stevens. 300,000. Well, then why can we not bring 
some of our people home?
    Secretary Cohen. Well, the question is always balancing 
what signal that does, in fact, send. We have the 300,000 to be 
contributed by the three new members, but we do not anticipate 
forward-deploying any American troops on a permanent basis into 
those regions. We would think, for example, we have a base that 
we have the utilization of right now in Hungary, in Tazar, 
where we train and retrain and upgrade the readiness of our 
forces who are now in Bosnia.
    We would anticipate having training missions in the Czech 
Republic and also in Poland, but not permanent stationing of 
American forces. So we think that by enlarging NATO we would 
still have the same commitment that we have currently. We do 
not see any reason why we would want to cut that commitment 
back.

                            Readiness impact

    Chairman Stevens. Well, I do not want to prolong this. I do 
want to thank you both for coming. I just have the feeling as 
we sit here looking at the defense plans we have less than one-
half of the ships that President Reagan thought we should have, 
and they average 20 years of age. We are replacing three of 
them this year. We have cut our B-2's down to less than one-
half of those we originally intended because of costs. Our B-
52's are retiring, as they should. They are being flown by the 
grandsons of the people who built them.
    I look at this as just being another added cost that will 
further the deterioration of our ability to defend our national 
interests. Bosnia certainly has been that. By the time it winds 
up, even through July, we will have spent $8 to $9 billion we 
did not contemplate in the prior 5-year plan prior to being 
involved in Bosnia.
    That quantifies into just so many ships we did not build, 
so many planes we will not build, and so much modernization we 
will not achieve. This is just another piece out of the armor 
as far as I am concerned. I do not know how we can afford what 
is being projected here without really cutting force structure, 
and I do not see any indications that the Department has looked 
at its force structure requirements as a result of an enlarged 
NATO.
    Have you?
    Secretary Cohen. We have indeed. We contemplated 
specifically enlargement of NATO in the QDR.
    Chairman Stevens. In terms of reducing our capabilities? 
That force structure was reduced as a result of the QDR.
    Secretary Cohen. We are reducing force structure that was 
considered to be unnecessary, but also to achieve some savings 
and it was done in a moderate fashion. We took the force 
structure mostly out of the support activities and not out of 
the tooth, as such. We think we have got the right balance 
right now.
    Chairman Stevens. We will go into that tomorrow with the 
Joint Chiefs of Staff. I do hope and I intend to keep the 
questions to really the costs of this enlargement and its 
impact upon our defense planning in terms of the hearings 
tomorrow and on Thursday, when we get to the General Accounting 
Office.
    I am constrained to tell you that I have had requests from 
three members who have not been able to ask questions to see if 
we might arrange, sometime after the first of the year, a 
return engagement for you two. That I know will be an 
imposition, but we will try to work it out and limit the 
questioning at that time to costs and how we are going to deal 
with the problems of this committee with regard to 
accommodating the impact of enlarged NATO on our defense plans.

                     Additional committee questions

    But again I have to tell you I am being viewed as being an 
opponent of an enlarged NATO. I am not an opponent of an 
enlarged NATO. I am an opponent of additional drainage to the 
funding stream for defense modernization, and I think the two 
of us are getting very frustrated in our ability to maintain 
this defense budget. We are operating under a cap, and anything 
further that is going to increase costs is going to decrease 
our ability to modernize. And that is to me a challenge that I 
do not think the Department or the administration has met yet, 
to tell us how can we afford what is going to come about as a 
result of these plans.
    But again we do thank you very much for coming.
    [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 Madeleine Albright
             Questions Submitted by Senator Mitch McConnell
                                baltics
    Question. What is United States policy regarding the entrance of 
the Baltic countries into NATO?
    Answer. At a press conference in Vilnius on July 13, following my 
meeting with the three Baltic Foreign Ministers, I said the U.S. 
welcomes Baltic aspirations and supports their efforts to join NATO 
which can take place as they show themselves willing and able to assume 
the responsibilities of membership and as NATO concludes that their 
inclusion will serve the interests of the Alliance.
    The Baltic states will have to meet the same high standards that 
NATO has set for other aspiring Partners, but they will not be 
disadvantaged due to their history or geography.
    A year ago we launched our Baltic Action Plan to coordinate our 
support aimed at integrating the Baltic states into European and trans-
Atlantic institutions.
    We and the three Baltic governments recently completed negotiating 
the text of the U.S.-Baltic Charter of Partnership. We have said 
publicly that the Charter ``articulates a common vision for Europe 
based on shared values. It is not a security guarantee. We are not 
offering one; and they are not asking for one.'' We look forward to 
signing the Charter in January.
    At Bergen in September we launched our new three-track Northern 
initiative: (1) strengthen U.S.-Baltic relations, helping them become 
stronger candidates for integration; (2) promoting integration between 
Northern Europe and Northern Russia; and (3) strengthen U.S.-Nordic 
relations, expanding the U.S.-Nordic coalition to include Poland, 
Germany and the EU.
    We are also founding members of BALTSEA, a new group formed on 
October 7 in Copenhagen to better coordinate military donor assistance 
to the Baltic states. We intend to expand our own security assistance 
program with the Baltic states to support their efforts to provide for 
their legitimate security needs.
    Question. As you know, we've provided $18.3 million to enhance the 
Baltic capabilities. Can this Committee expect to see an increase in 
military and economic assistance for these countries in the 
Administrations' fiscal year 1999 budget request. If so, what specific 
programs do you anticipate this assistance being used for?
    Answer. For fiscal year 1998, we had planned to allocate $12.3 
million for the three Baltic states (up from a total of $4.5 million in 
fiscal year 1997). Most of this would go to cover the cost of 
constructing the Regional Air Surveillance Coordination Center and 
national nodes for airspace management. Your fiscal year 1998 earmark 
provides more than enough to construct this facility and conduct 
ongoing military assistance programs at existing or increased levels.
    In fiscal year 1999, we will ask for increased authorization under 
the Warsaw initiative program to both assure that NATO's first new 
members will be successfully integrated and to provide more solid 
support for those Partners who actively aspire to membership in the 
future. For the Baltic states, we would budget a total of $15 million 
to increase the activities and programs we already have. These programs 
would be designed, based on a comprehensive State/DOD evaluation, to 
help the Baltics provide for their legitimate defense needs as 
sovereign European states. Much of this effort will also be geared 
toward making the Baltic states more attractive candidates for NATO 
membership in the future.
    The programs supported by these funds could include: providing 
peripheral support equipment for the regional airspace initiative; 
supporting the deployment and expansion of the Baltic Peacekeeping 
Battalion (BaltBat), a full schedule of PfP and bilateral exercises, 
English language and officer training, procurement of tactical 
communications equipment in support of BaltBat and Baltron, as well as 
search and rescue.

                          NATO: GENERAL COSTS

    Question. To address the concerns of countries not included in the 
first round, the Administration has said we will strengthen Partnership 
for Peace (PFP). The 1998 request was $70 million which was 
supplemented by $20 million in loans to Central European countries.
    If we are strengthening Partnership for Peace, what level of 
support might we expect next year?
    Answer. United States assistance through the Warsaw Initiative, 
including Foreign Military Financing grants and loans (FMF), has been 
instrumental in helping Partnership for Peace become an extremely 
successful program for furthering cooperation between NATO and the 
countries of Central and Eastern Europe and the Newly Independent 
States.
    Our fiscal year 1998 request for $70 million in FMF grants and $20 
million in FMF loan subsidies will provide training and communications 
and non-lethal equipment to our PFP partners to improve their 
interoperability with NATO, continue their defense reforms, and 
strengthen their regional cooperation.
    In fiscal year 1999, we expect to request $100 million in FMF 
grants and $20 million in FMF loan subsidies. This significant increase 
in FMF grant funding will further one of the Administration's highest 
priorities--NATO enlargement--by helping Poland, Hungary and the Czech 
Republic meet the military requirements of NATO membership. This 
funding will also further our Open Door policy by encouraging the 
countries aspiring to NATO membership but not invited at Madrid to 
further their aspirations and strengthen their compatibility and 
cooperation with NATO.
    We will be able to provide greater funding to the countries of 
Southeastern Europe, including Romania, Bulgaria and the former 
Yugoslav Republic of Macedonia, to encourage continued reforms, closer 
regional cooperation, and greater stability. In the Baltics, our fiscal 
year 1999 request will enable us to provide tactical communications 
equipment in support of the Baltic Battalion, BALTRON (a Baltic naval 
cooperative arrangement), and the Regional Airspace Initiative, as well 
as search and rescue training.
    Increased FMF will also enable us to strengthen the participation 
of the eligible countries of the Newly Independent States in PFP. It 
will build upon programs begun in fiscal year 1997, the first year NIS 
countries were eligible for FMF, including providing English language 
and NCO training, tactical communications and basic soldier equipment. 
FMF will enhance regional cooperation through assistance to the Central 
Asian Peacekeeping Battalion (Centrasbatt) and further Russian and 
Ukrainian participation in peacekeeping and humanitarian activities and 
operations.
    Our fiscal year 1999 FMF loan subsidy request in support of the 
Central Europe Defense Loan program will address deeper deficiencies 
through qualitative improvements to eligible countries' defense 
infrastructures.
    Question. I was concerned about press reports from the July summit 
that the French do not plan or expect to assume any additional costs 
for NATO infrastructure improvements. Can you square their assertions 
with your statement that current and new allies will bear 75 percent of 
the costs for improvements?
    Answer. NATO enlargement will entail some additional costs to 
current members. At the NATO Summit in Madrid last July, all Allies 
agreed that there would be costs, that the costs would be manageable, 
and that the resources needed to meet them would be provided. We are 
confident that the allies will meet their obligations.
    Recently both senior British and German government officials placed 
editorials in major American newspapers, stating that their governments 
were pledged to provide their fair share of enlargement costs. On 
October 21, British Secretary of Defense George Robertson stated in an 
editorial in the Washington Times that ``[w]e all recognize that 
bringing new members into NATO will incur a cost. * * * But if 
additional spending is required, Britain will pay its share.'' On 
November 4, German Foreign Minister Klaus Kinkel stated in an editorial 
in the Washington Post that ``[t]he debate on admitting new members 
into the Alliance must take into account the political and military 
rationale behind NATO enlargement * * * It goes without saying that 
Europe and Germany * * * must bear their fair share of the costs of 
NATO enlargement * * * This European contribution to the Alliance will 
not drop with the admission of new members, but will further 
increase.''
    Our allies, including France, have a proven track record of meeting 
their NATO responsibilities. The fact is that our NATO allies 
consistently pay approximately 75 percent of all NATO common costs, 
which includes infrastructure, while the U.S. pays about 25 percent.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

                      CONFLICT WITH CBO ESTIMATES

    Question. The U.S. has been providing roughly $100 million each 
year in the Foreign Operations bill to help pay for expansion. The CBO 
assumes that the U.S. will support the process of NATO expansion by 
increasing the number of loans the U.S. subsidizes for the new members 
to buy upgraded military hardware and by stepping up military-to-
military training and exercises. CBO estimates that these costs will 
double. Why are these costs not included in the Administration's 
estimate?
    Answer. Relevant costs for such measures were included in the 
Administration's estimate. For the February 1997 U.S. estimate of 
enlargement costs, DOD developed enlargement requirements and then 
estimated the costs for meeting those requirements. DOD assumed that 
countries would pay for their own defense enhancements unless there was 
evidence of likely assistance from other sources or where an 
enhancement would likely qualify for NATO common funding. Estimated 
U.S. enlargement costs included continued U.S. assistance for the 
construction costs for Air Sovereignty Operations Centers under the 
Regional Airspace Initiative and for language training through the 
International Military Education and Training program. The United 
States would share in additional costs only to the extent that the 
United States, with Congressional approval, may choose to continue or 
expand the current modest assistance being provided to the new 
democracies of Central and Eastern Europe.
    The U.S. enlargement cost estimate also included costs for training 
and exercises, including education in NATO languages and procedures for 
new member forces, upgrades to existing exercise facilities in new 
member countries, and transportation and operating costs for 
incremental combined exercises tied specifically to enlargement.

                      COSTS BORNE BY U.S. TAXPAYER

    Question. The Administration's estimate assumes that the costs to 
new members and current allies will be borne by them with or without 
NATO expansion. Shouldn't we apply the same standard to costs that will 
be borne by the U.S. taxpayer out of the foreign operations bill and 
include them in the overall estimate of the cost?
    Answer. The Administration's estimate applied a consistent standard 
of identifying costs relevant to enlargement, i.e. costs for 
enhancements related to meeting the requirements outlined in the 
February 1997 report. For those cases in which expenditures in the 
foreign operations bill matched an identified requirement, the estimate 
included them. We did not include in cost estimates military 
requirements unrelated to an enlarged Alliance. Estimated U.S. 
enlargement costs included continuing U.S. assistance for the 
construction costs for Air Sovereignty Operations Centers under the 
Regional Airspace Initiative and for language training through the 
International Military Education and Training program. The United 
States would share in additional costs only to the extent that the 
United States, with Congressional approval, chose to continue or expand 
the current assistance being provided to the new democracies of Central 
and Eastern Europe.
    The U.S. enlargement cost estimate also included costs for training 
and exercises, including education in NATO languages and procedures for 
new member forces, upgrades to existing exercise facilities in new 
member countries, and transportation and operating costs for 
incremental combined exercises tied specifically to enlargement.

                PROSPECTIVE MEMBERS NOT EXPECTING LOANS

    Question. Is there any evidence that prospective NATO members are 
not expecting grants and loans from the U.S. for military upgrades?
    Answer. With strong Congressional support, over the past four years 
the United States has provided, under the Warsaw Initiative, grants to 
countries of Central Europe, including those selected for NATO 
membership. As set out in the appropriations for these grants and NATO 
Participation Acts, one purpose was to prepare the countries which 
received them for NATO membership. On that basis, Congress earmarked 
significant portions of the grants to the Czech Republic, Hungary and 
Poland. In addition, those three countries were eligible for loans as 
well; to date we plan to make loans of $100 million to Poland and $80 
million to the Czech Republic.
    The Administration has requested continued funding for the Warsaw 
Initiative in 1998 and will so do in 1999. While Poland, Hungary and 
the Czech Republic will, of course, welcome these levels of continued 
Warsaw Initiative funding through fiscal year 1999, we have created no 
expectation for them of substantial additional increases. The 
Administration has emphasized to each of these countries that they have 
primary responsibility to fund the military restructuring and 
modernization programs that are needed to bring their militaries up to 
NATO standards. All three countries have demonstrated their willingness 
to meet these responsibilities and are committed to putting sufficient 
resources into their defense budgets. In addition, Warsaw initiative 
funding will also be used to provide assistance to those countries not 
included in this initial group of potential new members. We must 
consider how these programs continue after the initial group actually 
joins NATO.

                   NATO MEMBERS AGREE WITH ESTIMATES

    Question. Do the prospective NATO countries agree with these 
estimates?
    Answer. Our European allies and prospective NATO members have 
neither formally accepted nor rejected the Department of Defense's 
notional estimate of enlargement costs contained in the President's 
February 1997 Report to Congress.
    In general, prospective members agree with the U.S. approach to 
enlargement requirements and costs; they understand and have committed 
to developing the capabilities required.
    In their accession papers, the Czechs have agreed to pay a 0.9 
percent national cost share of the NATO common budgets; Hungary has 
agreed to a 0.65 percent national cost share; and the Poles have agreed 
to a 2.48 percent national cost share.
           nato costs estimates different from united states
    Question. Why is there such a disparity between American and 
European estimates about the cost of expanding NATO?
    Answer. NATO's work on enlargement costs will be considered by NATO 
Ministers at the December Ministerials.
    The NATO cost study estimated costs of enlargement in all three of 
NATO's common budgets; i.e., the civil, the military and the 
infrastructure budgets. The NATO study generated a lower estimate of 
NATO expansion costs than the earlier Department of Defense study for 
the following main reasons:
  --While the NATO study provided a more reliable estimate of common 
        costs, the study did not address other costs, such as the 
        national costs that old and new Alliance members will pay to 
        improve their military capabilities to meet the requirements of 
        an enlarged NATO. The DOD study included these costs;
  --The Defense Department study was based on four new members, not 
        just the three that were actually invited;
  --DOD cost analysis differed from NATO's methodology due to the 
        notional and illustrative nature of the previous DOD estimate 
        v. NATO's costing of specific requirements;
  --Finally, the initial work being conducted by the NATO military 
        staff, based on actual visits to the countries, suggests that 
        the military infrastructure in the three invited states is more 
        readily usable by NATO than previously anticipated.

               NATO MEMBERS TO INCREASE DEFENSE SPENDING

    Question. NATO member countries have been paring defense spending 
since the end of the Cold War, and our European allies have been 
complaining about the U.S. cost estimate, saying that they won't pay so 
large a share of the costs. President Chirac has said that Paris 
intends to pay nothing extra for NATO expansion. The U.K. has said 
America's cost estimates are 40 percent too high. The German Defense 
Minister has called for a ``realistic calculation of costs, not on the 
basis of the Cold War.''
    I was encouraged by Secretary Albright's comments before the 
Foreign Relations Committee on October 7 on the issue of burdensharing. 
At that hearing, Secretary Albright said: ``I will insist that our old 
allies share this burden fairly. That is what NATO is all about.''
    Given the tough fiscal qualifications for entry into the European 
Monetary Union, is it realistic to expect European members of NATO to 
increase--rather than reduce--spending?
    Answer. At the Defense Ministers meeting in Brussels in June 1997, 
Ministers acknowledged that ``the admission of new members * * * will 
involve the Alliance providing the resources which enlargement will 
necessarily require.'' Later, in July at Madrid, all allies agreed that 
there will be costs associated with the integration of new members, 
that these costs will be manageable, and that the resources necessary 
to meet these costs will be provided.
    Recently, both senior European officials placed editorials in major 
American newspapers, stating that their governments were pledged to 
provide their fair share of enlargement costs. On November 4, German 
Foreign Minister Klaus Kinkel stated in an editorial in the Washington 
Post that ``* * * It goes without saying that Europe and Germany * * * 
must bear their fair share of the costs of NATO enlargement. * * * This 
European contribution to the Alliance will not drop with the admission 
of new members, but will further increase''.
        assurance united states won't pay more than their share
    Question. Under the Administration's current burden sharing 
arrangement, the U.S. will pay for roughly 16 percent of the direct 
NATO expansion costs. Current and prospective NATO allies will pay the 
rest. As the cost estimates are refined during the upcoming months, can 
you assure me that the American people will not be asked to pay a 
greater share of the costs?
    Answer. The estimate of the U.S. share of the costs of enlargement 
were based largely on the distribution of cost in NATO's commonly 
funded budgets: the civil budget, the military budget and the 
infrastructure budget. Based on long-standing NATO financial 
arrangements, the U.S. share is roughly 24 percent of each of these 
budgets. This share will be adjusted slightly to take into account the 
contribution of new members.
    In addition, the U.S. also provides limited military modernization 
assistance to Poland, Hungary and the Czech Republic, as well as to 
some other countries of Central Europe and the former Soviet Union 
through the Congressionally-funded Warsaw Initiative. In fiscal year 
1998, the Administration has requested $70 million in FMF grants and 
$20 million in FMF loan subsidies for this program.
    We should point out that the 16 percent figure mentioned in the 
question came from an OSD report which included more than commonly 
funded costs, but also what new member and current members must spend 
directly to meet NATO defense requirements.

                   PLANS SUFFICIENT TO MEET THE COSTS

    Question. The economic strength of the prospective NATO countries 
is a mixed bag. GDP growth in Poland may reach 6 percent in 1996. On 
the other hand, Hungary's economy experienced modest growth in 1994 and 
1995, but it declined to 1 percent in 1996. In 1996, the Czech economy 
grew by about 4 percent. However, GDP growth for 1997 was estimated to 
drop to 2.7 percent. Although these prospective NATO countries need to 
continue to focus on strengthening their economies, NATO expansion will 
require them to spend additional resources on their defense budget. 
Meeting the Administration's cost estimate will require the new 
countries to increase their budgets by roughly 20 percent in real terms 
over the next 15 years. Meanwhile, defense spending in each of the 
prospective NATO countries has declined since the Cold War ended.
    What evidence does the Administration have demonstrating that 
prospective NATO members are planning to accommodate defense budget 
increases over the next 10 to 15 years?
    Are plans sufficient to meet the costs of NATO expansion?
    Given economic pressures in each of the prospective NATO countries, 
are these plans realistic?
    Answer. NATO's Economic Committee, tasked with addressing the 
macroeconomic forecasts in each of the invitee countries, has produced 
a preliminary report which addresses this question. In the case of 
Poland and the Czech Republic, substantial initiatives have been taken 
in order to increase future defense expenditures. In the Czech 
Republic, this will take place under the form of an annual addition to 
the ``military expenditures'' share of the Ministry of Defense budget 
of the equivalent of 0.1 percent of GDP until the year 2000. In Poland, 
a new 15-year defense plan between 1998 and 2012 of $10 billion will 
provide long-term funding, mostly in the field of modern equipment 
procurement. In Hungary, long term decisions hinged on the outcome of 
the recently completed referendum, but an increase of the defense 
budgets by 0.1 percent of GDP from 1998 to 2001 has been announced.
    The budget plans of the three countries have been analyzed using 
various economic parameters and forecasts. Each country has its unique 
economic challenges. Nonetheless, based on currently identified 
military requirements, the Economics Committee has preliminarily 
assessed that the defense plans are achievable and that enlargement 
costs, while not insignificant, are affordable. NATO will continue to 
work with the prospective members to ensure their budget plans account 
for NATO military requirements.

                             PUBLIC OPINION

    Question. Russian political leaders across the political spectrum 
strongly oppose enlargement, although President Yeltsin apparently 
concluded that he would rather work with the West than fight us. For 
now, public opinion shows that among ordinary Russians, NATO 
enlargement is not a significant issue.
    Under what circumstances could you see public opinion in Russia 
swinging in the opposite direction?
    Answer. Our transparent and open approach to enlargement--and the 
Alliance's emphasis on the fact that enlargement threatens the security 
of no country--will help undercut any efforts to portray enlargement as 
an issue which should concern Russians unduly or negatively affect 
their lives or national security.
    Regarding wide swings in Russian public opinion on enlargement, we 
do not forecase such circumstances in the foreseeable future.
    Most ordinary Russians do not consider NATO enlargement a salient 
issue. Given the negative images of NATO that have been presented to 
Russians for decades and the strong public sense of national decline, 
there is at least a latent distrust of the Alliance among average 
Russians. That sentiment has not gained much ground as Russians are 
preoccupied with more immediate issues, such as the economy, 
employment, and crime.
    Question. Is any current or potential leader in Russia capable of 
arousing public sentiment against expansion?
    Answer. Some leaders, such as Communist Party leader Zyuganov and 
nationalist leader Zhirinovskiy, have already sought to arouse public 
sentiment against NATO enlargement, but without notable success, 
largely due to the lack of interest among the Russian public in the 
issue of NATO enlargement.
    The ability of current or future leaders would depend in large 
measure on the domestic political and economic situation. Presently, 
social and economic concerns figure most prominently for most Russians. 
There would be little obvious political advantage to be gained 
presently by seeking to make enlargement a major issue, given that 
there are no national elections on the immediate horizon.

                     MASS OPINION AND PUBLIC POLICY

    Question. To what extent does mass public opinion in Russia 
regarding NATO expansion have an impact on Russian government policy?
    Answer. Public opinion mainly affects Russian government policy on 
any international issue indirectly. For example, public dissatisfaction 
with Russia's general status in the world played a significant role in 
the way both President Yeltsin and his Communist opponent, Gennadiy 
Zyuganov, positioned themselves in the 1996 presidential election.
    Although the Russian government is sensitive to its assessment of 
mass opinion, that fact remains that the Russian public is little 
interested in NATO enlargement. Since there is little negative mass 
public opinion on enlargement, there is a negligible effect on 
government policy. Opposition to NATO enlargement is confined largely 
to the Russian political elite.

                         RUSSIA'S ROLE IN NATO

    Question. Regardless of what the Russians want, I am curious about 
the long-term Administration thinking regarding Russia. Is the 
Administration's ultimate policy goal to include Russia as a full-
fledged member of NATO? Is the relationship outlined in the NATO-Russia 
Founding Act and permanent Joint Council sustainable over the long run? 
What would the reaction to Russia as a full-fledged NATO member be 
among current and prospective NATO members?
    Answer. Russia has not expressed an interest in joining NATO, nor 
has the United States or NATO been contemplating Russian membership in 
the Alliance. The United States and its Allies have stated repeatedly, 
most recently at the NATO summit in Madrid last July, that NATO 
membership is open to all European democracies who express interest in 
joining, meet the requirements for membership and whose inclusion the 
Alliance believes will contribute to the overall security of its 
members.
    We believe there is value in not preemptively excluding any 
European state from consideration for membership. For this position to 
be credible, it must include Russia. But in reality, if we ever get to 
the point where Russia and NATO are seriously talking about Russian 
membership, it would be a very different world--a very different 
Russia, and a very different NATO, in a very different Europe.
    We continue to see great value in deepening cooperation between 
NATO and Russia as outlined in the Founding Act. The Permanent Joint 
Council provides us the framework to further develop NATO's deepening 
relationship with Russia. But the PJC cannot substitute for the parties 
themselves. Our success in realizing the goals described in the 
Founding Act will depend on the sustained interest and commitment of 
both NATO and Russia. We expect that, as the NATO-Russia relationship 
yields benefits to both NATO and Russia, both parties will continue to 
work together and seek additional opportunities to further build this 
partnership.

                         OUT OF AREA INTERESTS

    Question. In the Senate Foreign Relations Committee hearing on 
October 7, Secretary Albright highlighted that, in addition to regional 
defense, NATO agreed to adapt the alliance to meet ``out of area'' 
interests. Bosnia, as a non-NATO member without the guarantee of 
Article V protection, is one example of an ``out of area'' operation. 
Peacekeeping and crisis management beyond alliance borders are types of 
missions I've heard to which new members might contribute. What does 
``out of area'' mean exactly? Does it include the Middle East? Asia?
    Answer. The current NATO ``Area of Responsibility'', or AOR, is 
defined as the territorial integrity of the sixteen members of the 
Alliance. ``Out of Area'' has never been formally defined by the 
Alliance but has traditionally been judged by its members to be areas 
that either border the Alliance or that can influence or threaten its 
AOR. The Gulf War was not an ``out of area'' mission for NATO, but our 
success in that operation relied heavily on work completed earlier by 
NATO to ensure interoperability among allies. While there are currently 
no circumstances in the Asian region which merit NATO's consideration 
as an ``out of area'' mission, we cannot rule out the possibility for 
doing so if a threat to NATO's AOR were to emerge.
    Question. By what standards will participation in an ``out of 
area'' operation be judged?
    Answer. U.S. participation in an ``out of area'' operation will be 
determined by U.S. national interests, and will be executed in 
accordance with the USCINCEUR contingency plans. If an ``out of area'' 
operation is deemed to be in the U.S. National Security Interest as 
stipulated through such a plan, the U.S. could conceivably contribute 
to the operation. It is important to note that any such deployment 
would have to be approved by the North Atlantic Council (in which the 
U.S. participates with full veto powers) after formal consideration.
    Question. Will NATO take on peacekeeping tasks that are currently 
the responsibility of the United Nations? What tasks?
    Answer. NATO may, on a case-by-case basis, take on peacekeeping 
tasks as requested by and in coordination with the United Nations. The 
ongoing NATO operations in Bosnia serve as an example of a United 
Nations peacekeeping operation that was taken over by NATO. In this 
instance, the NAC, acting upon a request for assistance by the U.N. 
agreed to undertake the mission. Again, it would take a NAC decision to 
implement any future operations of a similar nature.

                               CONSENSUS

    Question. NATO has operated effectively by consensus. If the 
organization grows--especially beyond the inclusion of the Czech 
Republic, Hungary, and Poland many have expressed concern about its 
ability to reach consensus.
    How would consensus be reached in an organization that is almost 
double the size of the existing organization?
    Answer. NATO has met the challenge of growth in an organization 
that works by consensus before. NATO has added four countries at 
different times since its inception and has been fully able to 
accomplish its goals without compromising its commitment to consensus 
decision making. The countries we are adding now share our perspective 
on security, NATO's mission and goals, and the need to keep the 
organization's effectiveness and efficiency strong. Future NATO members 
will also need to share these attributes before they will be invited to 
join the Alliance. Thus, we have no concerns about the ability of a 
larger, stronger Alliance to reach consensus on the issues it 
considers.

                      ALLIES PAY LESS, WE PAY MORE

    Question. I understand that the Administration position is that the 
U.S. will pay no more than 15 percent of the costs, leaving the lion's 
share to our NATO allies. However, our European allies seem to 
disagree. To quote the British Defense Ministry, ``the accession of new 
members to [sic] result in a proportionate reduction in the U.K. share 
of NATO common budgets.'' Other NATO nations seem to agree with this 
point. If our allies expect to pay less for NATO, doesn't it follow 
that we will pay more?
    Answer. At the NATO Summit in Madrid last July, all Allies agreed 
that there would be costs, that the costs would be manageable, and that 
the resources needed to meet them would be provided. We are confident 
that the allies will meet their obligations. Our allies have a proven 
track record of meeting their NATO responsibilities. The fact is that 
our NATO allies consistently pay approximately 75 percent of all NATO 
common costs, which includes infrastructure, while the U.S. pays about 
25 percent.
    Recently, both senior British and German government officials 
placed editorials in major American newspapers, stating that their 
governments were pledged to provide their fair share of enlargement 
costs. On October 21, British State Secretary for Defense George 
Robertson stated in an editorial in the Washington Times that ``[w]e 
all recognize that bringing new members into NATO will incur a cost * * 
* But, if additional spending is required, Britain will pay its 
share.'' Most recently, on November 4, German Foreign Minister Klaus 
Kinkel stated in an editorial in the Washington Post that ``[t]he 
debate on admitting new members into the Alliance must take into 
account the political and military rationale behind NATO enlargement * 
* *. This European contribution to the Alliance will not drop with the 
admission of new members, but will further increase.''
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin

                             PUBLIC OPINION

    Question. While public opinion regarding the question of NATO 
expansion has been consistently strong in Poland, it has been weaker in 
the Czech Republic and Hungary. What do the public opinion polls in 
each of the prospective countries indicate about the resilience and 
durability of the public's support for NATO membership, especially if 
public sacrifice is required?
    Answer. The turnout in Hungary's November 16 referendum 
demonstrates that there is strong and resilient support for NATO 
throughout Central Europe and not just in Poland.
    NATO enjoys popular and multi-partisan political support in all 
three countries. The governing coalitions in each country are strongly 
pro-NATO and no mainstream party in any of the countries opposes NATO 
membership.
  --In Poland, opinion polls routinely show that over 80 percent of 
        citizens support their country's integration into NATO.
  --In Hungary's Referendum, 85 percent of the voters supported their 
        country's integration with NATO.
  --Recent USIA polls show that almost 60 percent of Czechs favor NATO 
        accession. 29 percent of Czechs oppose NATO membership.
    In both Hungary and the Czech Republic, there has been a 
substantial increase in public support since NATO extended an 
invitation to these nations at the July Madrid Summit. As the public 
grows more knowledgeable about NATO and sheds Cold War images of the 
Alliance as an offensive force, public support has increased.
    The invitations at Madrid also overcame skepticism in Central 
Europe whether the West would welcome security links to former members 
of the Warsaw Pact.
    While some polls indicate some resistance to social spending cuts 
to pay for military modernization, basing of NATO forces, or overseas 
deployments, public support for practical examples, however, 
demonstrates the opposite. We need to look at what these countries are 
actually doing:
    Basing of NATO forces.--Hungary approved U.S. use of Taszar Air 
Base--the U.S. staging base supporting IFOR and SFOR operations in 
Bosnia--in 72 hours, as well as an important training area and one 
other smaller support base. In addition, Hungary provided a support 
base at Pecs for the Nordics. NATO's use of the bases continues to 
enjoy wide popular support. Finally, the Hungarians are the first 
central Europeans to sign a bilateral Status of Forces Agreement to 
protect U.S. personnel stationed in, or passing through, Hungary.
    Foreign Deployments.--All three countries have contingents serving 
in SFOR. Public support for deployment of troops in Bosnia remains 
high.
    Cutting social spending to pay for modernization.--When austerity 
measures were introduced in Spring 1997, the Czech government 
maintained and later increased defense spending while cutting all other 
Ministries. Even Opposition parties supported the increased defense 
budget.
    The Polish government has stated that it will increase its current 
levels of defense spending despite extensive flood damage earlier this 
year.
    Closer examination of military infrastructure in Poland, Hungary, 
and the Czech Republic revealed that these countries were better 
prepared for NATO integration than previously thought. While we expect 
these countries to pay their share of integration costs, we do not 
expect those costs to be onerous.
    Central Europe is an economically dynamic area which enjoys solid 
economic growth. Assuming moderate growth and a constant budget share 
for defense, the defense budgets in this region will significantly 
increase in real terms over the next decade. If properly used, those 
funds will enable the three countries to meet their financial 
obligations.

                      INTERNATIONAL MONETARY FUND

    Question. The New York Times reported earlier this year that the 
International Monetary Fund has concerns over the cost of expansion for 
the new nations themselves. The IMF understandably has questions 
regarding the billion in dollars of loans that are conditioned on 
fiscal constraint by nations such as Poland, Hungary and the Czech 
Republic. Do you share the concerns of the IMF that the increased costs 
to the new nations could mean a huge and difficult burden?
    Answer. We agree with the IMF that the countries in transition must 
exercise fiscal constraint. In consultation with the IMF, Poland, 
Hungary and the Czech Republic have adopted sound monetary and fiscal 
policies, including central government budgets with reduced budget 
deficits. These budgets adequately cover their commitments to increase 
military spending.
    Positive growth rates in each country will enable the governments 
to increase defense spending and fulfill their commitment to paying the 
direct costs of NATO enlargement without taking on additional debt 
burden. Of course, these countries have other significant needs which 
they will consider in deciding how much can be spent on defense.
    Most of the reforms in the defense sector related to NATO 
membership are necessary for an effective military in a modern 
democratic state. Moreover, the cost of defense would undoubtedly be 
higher if these countries did not join NATO.

                    COSTS OF MORE THAN THREE NATIONS

    Question. What about the cost for adding additional nations to NATO 
beyond the three? How much will it cost for not just the Czech 
Republic, Hungary and Poland, but also Romania, Slovakia, Slovenia, 
Bulgaria, etc.? Please provide cost estimates for an expanded list 
beyond the first three nations.
    Answer. Allies are currently focusing attention on the 
requirements, costs and the process of successfully bringing into NATO 
the three countries initially invited to join: Poland, the Czech 
Republic and Hungary. NATO has made no decision yet regarding admission 
of new members beyond these three countries. When the Alliance decides 
to admit identifiable new members, the cost issue, and the issue of 
military requirements to ensure that NATO remains capable of defending 
all members, can be effectively addressed.

                      COMPARISON TO MARSHALL PLAN

    Question. Secretary Albright, it is interesting to hear you compare 
NATO expansion to the Marshall Plan. I could ask for the details of the 
military elements of the original Marshall Plan. Of course, there were 
really none. Instead, let me ask you to detail the economic components 
of NATO expansion? What are the civilian or political elements of NATO 
expansion?
    Answer. The Marshall Plan, while focusing on civilian programs, had 
the effect of increasing stability and strengthening democracy just as 
NATO enlargement is doing. By extending the zone of stability and 
security which NATO provides to the countries to NATO's east, we 
further our goal of an undivided, democratic, and peaceful Europe.
    The United States is a European power. Two world wars in this 
century have taught us that when Europe and America stand apart, we pay 
a terrible price. We know that we cannot take Europe's security for 
granted.
    By enlarging NATO to include Poland, Hungary and the Czech 
Republic, we expand the area in Europe where wars are not likely to 
happen. By making clear that we will fight, if necessary, to defend our 
allies, we make it less likely that our troops will ever be called upon 
to do so. We have seen in Bosnia what happens when instability and 
insecurity in Europe are allowed to fester. We have an opportunity to 
make it less likely that such a conflict will happen again.
    Poland, Hungary, and the Czech Republic are committed to NATO and 
accept its shared responsibility. Their admission will make NATO 
stronger and more cohesive, and will decrease the likelihood of 
conflicts that could involve our troops or threaten our security. That 
is why a stronger NATO is in our interests.
    Enhancing security in Poland, Hungary and the Czech Republic will 
help consolidate democracy and stability in these countries. Enhancing 
their security by admitting them to NATO is the surest and most cost 
effective way to prevent a major threat to security in the region.
    Central Europe is an economically dynamic area--the fastest growing 
in all of Europe. Its economies are projected to continue to grow at 4 
to 5 percent annually, in real terms. Such growth will make it easier 
for these states to modernize their militaries, even as they invest in 
their economic and social transformations.

                         OSCE: FUTURE EXPANSION

    Question. Why hasn't the Organization for Security and Cooperation 
in Europe been receiving the same attention as NATO expansion recently? 
If a primary goal for NATO expansion is the protection of democracy and 
stability among the European nations, why can't the power and resources 
of the OSCE be expanded? Are there any initiatives for the OSCE that 
are being pursued?
    Answer. We see the conflict prevention and regional stabilization 
role increasingly played by the OSCE as a natural complement to NATO in 
European security. As OSCE has taken on more tasks in places like 
Bosnia, Albania--and now, Croatia--we have increased our investment in 
the organization, as have many of our European allies. In Bosnia, the 
OSCE fully supervised Federation municipal elections this year, and 
will also supervise upcoming Republika Srpska elections this month. 
OSCE's new mission in Tirana has taken on the role of the overall 
coordinator for all international efforts in Albania. In Croatia, the 
OSCE mission will assume the United Nations Transitional Administration 
in Eastern Slavonia's (UNTAES) functions in Eastern Slavonia and extend 
similar monitoring to the rest of the country.
    We are also working closely with other OSCE states in the ongoing 
security model dialogue to develop a consensus about the ways the OSCE 
can work with those states that need help to make the transition to 
democracy and free market economics. Our goals include assisting states 
to improve their compliance with the Helsinki Final Act and other OSCE 
commitments, improving the OSCE's ability to identify and defuse 
potential conflicts, in particular through its field missions, and 
identifying practical steps the OSCE could take to enhance cooperation 
with other European security organizations, particularly in the area of 
conflict prevention and crisis management.
    Further development of the OSCE as a complement to NATO and other 
European security organizations is a key part of achieving our long-
term European security goals. We are determined to remain engaged and 
are grateful for Congress' continuing political and financial support 
so that we can help the OSCE achieve its full potential.

                                SLOVENIA

    Question. What is the status of Slovenia's application to join 
NATO? What are its prospects for joining NATO during the next expansion 
round?
    Answer. Slovenia has made great strides in reforming its military, 
building active security links with its neighbors, and increasing the 
interoperability of its forces with NATO. We continue to work with 
Slovenia to help it prepare for consideration in future rounds of NATO 
Enlargement.
    The Madrid Summit decision made clear that the message for Slovenia 
is not ``no,'' but ``not yet.''
    Slovenia still has much work ahead. The reform process is not 
complete and Slovenia must invest in its own military capabilities so 
that it can become a producer of security in the region and a potential 
ally capable of shouldering its share of the defense burden in 
Southeastern Europe.
    Slovenia was a serious contender for the first round. The country 
is continuing its policy of seeking greater economic, political, and 
security integration with Euro-Atlantic structures. If it maintains its 
current direction, we believe that Slovenia would be an excellent 
candidate inclusion in a future round of NATO Enlargement.
           arms control initiative along with nato expansion
    Question. One of the motivations we hear for an expanded NATO is to 
protect nations against future military threats. For example, one hears 
a lot about a renewed Russian military power, although not necessarily 
from the Administration. What arms control initiatives are being 
pursued to reduce or avoid such future threats?
    Answer. As the NATO enlargement process proceeds, the U.S. and its 
Allies are engaged in negotiations on the adaptation of the Treaty on 
Conventional Armed Forces in Europe (CFE) to ensure its continued 
viability into the next century. Originally negotiated to preserve a 
military balance between two groups of States Parties, corresponding to 
the membership of NATO and the former Warsaw Pact, the CFE Treaty caps 
the equipment holdings of the major conventional armies in Europe, thus 
ensuring predictability about these levels for the future. It has 
helped prevent destabilizing concentrations of forces anywhere in the 
Treaty's area of application, from the Atlantic to the Urals. The 
Treaty has also helped ensure military stability throughout the CFE 
area--for those states that are members of an alliance as well as those 
that are not. The U.S. and its NATO Allies have put forward proposals 
over the course of the past year to ensure that these benefits are 
preserved--and even enhanced--as the geopolitical landscape in Europe 
continues to change.
    The U.S. and Russia are also fully implementing START I which 
entered into force three years ago and mandates significant reductions 
in strategic nuclear weapons. President Yeltsin has promised Russia 
will ratify START II in the near future which will make even deeper 
cuts. Once START II is ratified, Presidents Clinton and Yeltsin have 
committed to begin negotiations on START III with the aim of reducing 
strategic weapons to 2,000 to 2,500 on each side, an 80 percent 
reduction from cold war levels.
    Russia has recently ratified the Chemical Weapons Convention and 
has pledged to destroy its stockpile of 40,000 tons of chemical 
munitions and declared to participate in a regime which is aimed at 
stopping the proliferation of chemical weapons.
    Russia is also a signatory to the Comprehensive Test Ban Treaty and 
the Nuclear Nonproliferation Treaty and is working with the U.S. to 
improve the security of its nuclear materials through a variety of U.S. 
funded programs.
    The U.S. and its NATO allies are also engaged in a number of 
bilateral and multilateral military to military programs designed to 
increase cooperation and understanding between NATO and Russia.
               democratic values of the three new members
    Question. What measures have been taken to ensure that NATO's new 
members uphold values about democracy, the rule of law, and human 
rights? What part of NATO's organizational structure is responsible for 
the internal implementation of the Alliance's values?
    Answer. In the eight-plus years since the fall of the Berlin Wall 
that effectively ended Communist rule, the three invitees' political 
institutions have matured rapidly. Poles, Czechs, and Hungarians now 
enjoy the benefits of a fully functioning parliamentary democracy, 
including free speech, free assembly, and a vigorous, free press.
    Each of the three invitees has enshrined basic human rights and 
freedoms--such as speech, assembly, and religion--in a Constitution, 
which, as in our own case, is the highest law of the land.
    The United States and other NATO allies have made clear to the 
three invitees on numerous occasions that NATO membership requires the 
acceptance of shared democratic values. Specifically, we have pointed 
to the ``Perry Principles,'' with their focus on democracy/human 
rights; free market development; civilian control of the military; good 
relations with neighbors; and interoperability with NATO.
    The Alliance is an alliance of shared democratic values. The North 
Atlantic Council (NAC), the supreme decisionmaking body of the 
Alliance, is the embodiment of these values, since it represents a 
forum in which democratic nations have freely agreed to decide security 
matters on an equal footing.

                NUCLEAR NONPROLIFERATION TREATY PROBLEMS

    Question. South Africa and other nations have expressed concern in 
April of this year that despite the political statements by NATO for 
nuclear weapons non-deployment that bring these nations into the 
political planning group and tying these states into nuclear planning 
and deterrence is a form of proliferation. Is the Administration 
addressing any Nuclear Non-Proliferation Treaty problems associated 
with NATO expansion?
    Answer. NATO's nuclear forces continue to be an essential part of 
U.S. overall deterrence policy, and the Alliance will continue to 
maintain nuclear forces based in Europe. Moreover, there is widespread 
participation by European NATO allies in collective nuclear defense 
planning, in basing of nuclear forces, and in consultation 
arrangements. However, the participation by NATO non-nuclear weapons 
states in these activities in no way contravenes Article I of the NPT. 
This question of NPT Article I and its impact on NATO nuclear forces 
was debated at length during the negotiation of the NPT. All concerned 
accepted that the final language of Article I would not preclude the 
type of nuclear planning, basing, and consultative arrangements that 
have taken place in NATO since NPT entry-into-force in 1970.

                            NUCLEAR SHARING

    Question. In the ``Founding Act on Mutual Relations, Cooperation 
and Security between NATO and the Russian Federation'' NATO's members 
``reiterate that they have no intention, no plan and no reason to 
deploy nuclear weapons on the territory of new members nor any need to 
change any aspect of NATO's nuclear posture or nuclear policy--and do 
not foresee any future need to do so.'' According to the 
administration's point of view, does this statement commit the U.S. and 
its European allies: (a) to maintain the presence of U.S. nuclear 
weapons on the territory of all NATO member nations currently hosting 
U.S. nuclear weapons?; (b) to not reduce the number of U.S. nuclear 
weapons beyond the numbers agreed by the alliance members for 1998?; 
and (c) to maintain and not change the NATO system of nuclear sharing 
as currently practiced?
    Answer. The short answer to all three questions is ``no.'' The 
statement is a matter of NATO policy, not a legal commitment. Moreover, 
NATO will retain its existing, much-reduced, nuclear capabilities, and 
retain its right to modify its nuclear posture or policy should 
circumstances warrant.

                             PILOT TRAINING

    Question. Does the NATO statement--reiterated in the Founding Act--
preclude training pilots from the possible new member states in nuclear 
missions during peacetime and transferring the necessary equipment to 
these countries as soon as these countries have introduced into service 
dual capable aircraft?
    Answer. As noted earlier, the statement in the Founding Act is not 
legally binding on the members of the Alliance. Nonetheless, NATO's 
current nuclear posture has been judged adequate for an enlarged 
Alliance. Thus, there are no plans to train new member states' pilots 
in nuclear missions during peacetime nor to transfer equipment or 
infrastructure to support these countries' dual-capable aircraft in a 
nuclear role.

                          BILATERAL AGREEMENTS

    Question. Does the administration intend or plan to conclude 
bilateral agreements with future new member states to the effect of or 
similar to the ``Agreements for Cooperation for Mutual Defense 
Purposes'' concluded with other NATO members participating in NATO 
nuclear sharing? If so, what are the administration's plans?
    Answer. We have no such intentions or plans.

                                 VAULTS

    Question. Which airbases in European NATO countries are currently 
equipped with WS3-storage vaults for U.S. nuclear weapons and which 
airbases are to be equipped according to current plans? How many vaults 
have been built or will be built on each of the airbases of the new 
NATO states?
    Answer. We would be happy to provide a classified briefing to 
cleared personnel to discuss this subject.

                         DUAL-CAPABLE AIRCRAFT

    Question. Are the new member states, according to the 
administration's point of view, expected to equip at least one unit 
within its air forces with Western dual-capable aircraft? By when 
should such equipment programs be completed?
    Answer. From the Administration's point of view, there are no 
plans, nor are there any requirements, for the new member states to 
equip at least one unit within their air forces with Western dual-
capable aircraft. Nonetheless, members of the Alliance may purchase 
dual-capable aircraft for use in a conventional role, as has been done 
by some current NATO members who do not participate in nuclear programs 
of cooperation. The fact that a certain type aircraft is dual-capable 
is not an indication that such an aircraft is indeed nuclear certified 
or has an assigned nuclear role.

                        AIRCRAFT PURCHASE PLANS

    Question. Which types of aircraft considered by the new member 
states fulfill the requirement of providing DCA to NATO's future 
posture?
    Answer. None of the aircraft currently in or planned to be in the 
inventory of new member states fulfill the requirement of providing DCA 
to NATO's future posture, since we have no plans to change NATO's 
future nuclear posture or to provide nuclear certification to any of 
the new member states' aircraft.

                      NUCLEAR SHARING ARRANGEMENTS

    Question. What other preparations are under consideration to 
prepare the new member states for participation in NATO nuclear sharing 
arrangements?
    Answer. New members will, as do current members, contribute to the 
development and implementation of NATO's strategy, including its 
nuclear component. New members will be eligible to join the Nuclear 
Planning Group (NPG) and its subordinate bodies (NPG Staff Group, High 
Level Group, and the Senior-Level Weapons Protection Group), and to 
participate in nuclear consultations during exercises and crisis. 
During the interim period leading to accession, they will be offered 
periodic briefings on the main nuclear-related issues which the NPG 
Staff Group is addressing as part of its work program, but all such 
briefings during the interim period will be unclassified due to the 
sensitivity of nuclear matters.
                                 ______
                                 
           Questions Submitted to Secretary William S. Cohen
           Questions Submitted by Senator Frank R. Lautenberg

             CBO OPTION 1 VERSUS ADMINISTRATION'S ESTIMATE

    Question. Unfortunately, an exact comparison of the costs of NATO 
expansion between the CBO and the Administration isn't possible because 
both make different assumptions about threat environment and the kinds 
of military upgrades that are necessary. Nonetheless, CBO does have an 
expansion option of $60.6 billion that is similar to the 
Administration's estimate. Both assume a relatively benign security 
situation. Nonetheless, the Administration estimates the overall costs 
of expansion at $27 to $35 billion, and the CBO estimates the overall 
cost at $60.6 billion.
    Even more, the CBO estimates that the U.S. will pay almost two and 
a half to three times more to expand NATO than the Administration 
estimates. The CBO estimates the cost to the U.S. at $4.8 billion and 
the Administration estimates the cost at $1.5 to $2 billion.
    In light of the fact that both options assume a relatively similar 
security situation, why does the CBO estimate that it will cost the 
U.S. two and a half to three times as much as the Administration 
estimates?
    Answer. In general, CBO estimates are larger than the 
Administration's because CBO assumed significantly more extensive 
upgrades than did DOD. The vast majority of the difference is accounted 
for by the following items:
    Combat Aircraft.--Given the substantial comparative advantage 
enjoyed by current NATO members in combat aircraft, the DOD estimate 
assumed procurement of 18 refurbished F-16's for each potential new 
member. The CBO analysis assumes an aggregate fighter force structure 
more than half again as large as DOD's projections, and replaces a much 
larger share of it. In addition, for potential new members' older, 
obsolescing aircraft, CBO assumed installation of new electronics.
    Air Defense.--The CBO assumed that the potential new members would 
acquire Patriot systems, whereas DOD assumed potential new members 
would upgrade their ground based air defense to less expensive I-HAWK 
type systems.
    C\3\I.--The DOD estimate assumed refurbishment/renovation of 
existing headquarters facilities, including necessary communications 
and intelligence equipment and interfaces with NATO commands. 
Additional interfaces are assumed down to the brigade level among 
potential new members' forces. In contrast, as we understand the CBO 
estimate, it outfitted national military headquarters and potential new 
member forces with numbers and types of communications and intelligence 
equipment based on much more demanding U.S. standards.
    Exercise Facilities.--The DOD estimate upgraded exercise facilities 
at five brigade-sized sites and a battalion-sized site, compared to 
CBO's estimate to build large-scale, modern multinational training 
facilities for ground and air forces.
    Road and Rail.--Based on intelligence assessments, the DOD 
assessment of potential new members' road and rail infrastructure was 
on the whole more favorable than that of CBO. In addition, in the DOD 
estimate, we assumed that international investment in the invited 
countries' economies would lead to a greater degree of upgrades to road 
and rail links than in the CBO study.
    Question. Why is there such a disparity in the overall estimate if 
the threat both estimates assume is similar?
    Answer. As described above, the CBO assumed that much more 
extensive upgrades would be required in virtually every category 
evaluated, compared to the assessments embodied in the Department's 
notional cost estimates.

                COSTS OF EXPANSION TO FOREIGN AID BUDGET

    Question. The U.S. has been providing roughly $100 million each 
year in the Foreign Operations bill to help pay for expansion. The CBO 
assumes that the U.S. will support the process of NATO expansion by 
increasing the number of loans the U.S. subsidizes for the new members 
to buy upgraded military hardware and by stepping up military-to-
military training and exercises. CBO estimates that these costs will 
double. Why are these costs not included in the Administration's 
estimate?
    Answer. Relevant costs for such measures were included in the 
Administration's estimate. For the February 1997 U.S. estimate of 
enlargement costs, DOD developed enlargement requirements and then 
estimated the costs for meeting those requirements. DOD assumed that 
countries would pay for their own defense enhancements unless there was 
evidence of likely assistance from other sources or where an 
enhancement would likely qualify for NATO common funding. Estimated 
U.S. enlargement costs included continuing U.S. assistance for the 
construction costs for Air Sovereignty Operations Centers under the 
Regional Airspace Initiative and for language training through the 
International Military Education and Training program. The United 
States would share in additional costs only to the extent that the 
United States, with Congressional approval, may choose to continue or 
expand the current modest assistance being provided to the new 
democracies of Central and Eastern Europe.
    The U.S. enlargement cost estimate also included costs for training 
and exercises, including education in NATO languages and procedures for 
new member forces, upgrades to existing exercise facilities in new 
member countries, and transportation and operating costs for 
incremental combined exercises tied specifically to enlargement.
    Question. The Administration's estimate assumes that the costs to 
new members and current allies will be borne by them with or without 
NATO expansion. Shouldn't we apply the same standard to costs that will 
be borne by the U.S. taxpayer out of the foreign operations bill and 
include them in the overall estimate of the cost?
    Answer. The Administration's estimate applied a consistent standard 
of identifying costs relevant to enlargement, i.e., costs for 
enhancements related to meeting the requirements outlined in the 
February 1997 report. For those cases in which expenditures in the 
foreign operations bill matched those for the requirements, the 
estimate included them; we did not include in enlargement cost 
estimates military requirements unrelated to an enlarged Alliance. 
Estimated U.S. enlargement costs included continuing U.S. assistance 
for the construction costs for Air Sovereignty Operations Centers under 
the Regional Airspace Initiative and for language training through the 
International Military Education and Training program.
    Question. Is there any evidence that prospective NATO members are 
not expecting grants and loans from the U.S. for military upgrades?
    Answer. Yes, there is some evidence that prospective NATO members 
do not have these expectations. They understand that they are expected 
to shoulder substantial national costs, as all other members do.
    For example, the Czech government plans to increase their 1998 
national defense spending from roughly $900 million to $1.1 billion, 
which represents about 1.88 percent of projected GDP. This is above the 
0.1 percent annual increase that they had pledged for next year which 
would have raised defense spending from 1.7 percent to 1.8 percent of 
GDP for fiscal year 1998. Prime Minister Klaus told Secretary Cohen in 
November that he did not see any problem with Parliament passing the 
government's budget next month.
    The Hungarians have increased their 1997 national defense budget to 
about $800 million, which represents about 1.8 percent of projected 
GDP. Hungary has stated that it plans to link defense spending growth 
to the rate of GDP growth and to increase the percentage of GDP 
dedicated to defense by 0.1 percent annually for the next five years. 
If so, Hungarian defense spending may increase in real terms by 3 to 8 
percent annually during the next four years.
    Poland spent 2.3 percent of GDP on defense in 1996. Poland's 15-
year modernization plan calls for annual increases in defense spending 
which are pegged to the rate of GDP growth. Based on a conservative 
estimate of 4.2 percent annual economic growth, Polish defense spending 
should increase approximately 3.2 percent annually.
    Of course, we would share in more of any such costs only to the 
extent that the United States, with Congressional approval, may choose 
to continue or expand the current modest assistance being provided to 
the military modernization of the new democracies of Central and 
Eastern Europe through programs like the Warsaw Initiative.

                          COST TO NEW MEMBERS

    Question. The Administration and the CBO are not in sync on the 
question of the cost of expansion to the new members. CBO estimates 
that expansion will cost the new members $42 billion, and the 
Administration estimates that it will cost them between $13 to $17.5 
billion.
    Why is there such a disparity in the cost estimates for the new 
members?
    Answer. As described in the answer to Question No. 1, the CBO 
assumed that much more extensive upgrades would be required in 
virtually every category evaluated, compared to the assessments 
embodied in the Department's notional cost estimates.
    Question. Please provide, for the record, a breakout of the costs 
of expansion to each of the new countries?
    Answer. According to DOD's notional estimates, the breakout of NATO 
enlargement costs by each potential new member country studied is as 
follows:

                                                             In billions

Czech Republic..........................................    $2.3 to $3.1
Hungary.................................................      2.6 to 3.6
Poland..................................................     7.5 to 10.1
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................    12.4 to 16.8

    NATO is currently working on its own enlargement cost estimate, to 
be provided to Ministers in December.
    Question. Do the prospective NATO countries agree with these 
estimates?
    Answer. Our European allies and prospective NATO members have 
neither formally accepted nor rejected the Department of Defense's 
notional estimate of enlargement costs contained in the President's 
February 1997 Report to Congress. At the conclusion of the NATO Summit 
in Madrid in July 1997, the current allies re-affirmed that the costs 
of enlargement would be borne.
    In general, prospective members agree with the U.S. approach to 
enlargement requirements and costs; they understand and have committed 
to developing the capabilities required.
    In their accession papers, the Czechs have agreed to pay a 0.9 
percent national cost share of the NATO common budgets; Hungary has 
agreed to a 0.65 percent national cost share; and the Poles have agreed 
to a 2.48 percent national cost share.

                        COST TO THE REST OF NATO

    Question. The Administration and the CBO appear to agree about the 
cost of expanding NATO to our current European allies. CBO estimates it 
will cost our current European allies $13.8 billion to expand NATO, and 
the Administration estimates that it will cost $12.5 to $15.5 billion. 
However, the Europeans are claiming that the U.S. is over-estimating 
costs. For example, President Chirac says NATO expansion can be managed 
by reallocating funds and that Paris intends to pay nothing extra. Why 
is there such a disparity between American and European estimates about 
the cost of expanding NATO?
    Answer. There are several aspects to the cost issue. The President 
presented the Congress with our notional cost estimate in February. 
Currently, NATO is working on a refined enlargement cost estimate.
    Based on what we know now, I believe that the NATO cost estimates 
will be lower than those which you received from us in February. First 
the initial cost study assessed four, not three new members. Further, 
the NATO estimate will address only direct, common-funded costs.
    But I also expect the NATO cost estimates will be lower because 
some things are better in the invited nations than people thought. As a 
result of assessments NATO planners and logisticians have been 
conducting, we believe the additional investment required to prepare 
each of these nations, their military forces, and their infrastructures 
for full NATO membership will be less than initially anticipated.
    Despite what has been reported in the press, our allies have 
formally agreed to pay the costs necessary to meet enlargement 
requirements. Recently, both senior British and German government 
officials placed editorials in major American newspapers, stating that 
their governments were pledged to provide their fair share of 
enlargement costs. On October 21, British Secretary of Defense George 
Robertson stated in an editorial in the Washington Times that ``[w]e 
all recognize that bringing new members into NATO will incur a cost. * 
* * But, if additional spending is required, Britain will pay its 
share''. Most recently, on 4 November, German Foreign Minister Klaus 
Kinkel stated in an editorial in the Washington Post that ``[t]he 
debate on admitting new members into the Alliance must take into 
account the political and military rationale behind NATO enlargement. * 
* * It goes without saying that Europe and Germany * * * must bear 
their fair share of the costs of NATO enlargement. * * * This European 
contribution to the Alliance will not drop with the admission of new 
members, but will further increase''.

                          CURRENT NATO MEMBERS

    Question. NATO member countries have been paring defense spending 
since the end of the Cold War, and our European allies have been 
complaining about the U.S. cost estimate, saying that they won't pay so 
large a share of the costs. President Chirac has said that Paris 
intends to pay nothing extra for NATO expansion. The U.K. has said 
America's cost estimates are 40 percent too high. The German Defense 
Minister has called for a ``realistic calculation of costs, not on the 
basis of the Cold War.''
    I was encouraged by Secretary Albright's comments before the 
Foreign Relations Committee on October 7 on the issue of burden 
sharing. At that hearing, Secretary Albright said: ``I will insist that 
our old allies share this burden fairly. That is what NATO is all 
about.''
    Under the Administration's current burden sharing arrangement, the 
U.S. will pay for roughly 16 percent of the direct NATO expansion 
costs. Current and prospective NATO allies will pay the rest. As the 
cost estimates are refined during the upcoming months, can you assure 
me that the American people will not be asked to pay a greater share of 
the costs?
    Answer. The Administration's estimate of enlargement costs assumed 
that the United States would pay its current share (approximately 24 
percent) of NATO common-funded budgets. In 1997, NATO common budgets 
totaled about $1.8 billion. The total U.S. contribution to these 
budgets was about $485 million, while the allies contributed the other 
$1.3 billion.
    In the context of an enlarged Alliance, we expect that the relative 
national cost share contributions that prevail now will stay about the 
same--three European dollar equivalents to one U.S. dollar.
    Question. Given the tough fiscal qualifications for entry into the 
European Monetary Union, is it realistic to expect European members of 
NATO to increase--rather than reduce--spending?
    Answer. At the Defense Ministers meeting in Brussels this past 
June, Ministers acknowledged that ``the admission of new members * * * 
will involve the Alliance providing the resources which enlargement 
will necessarily require.'' Later, in July at Madrid, all allies agreed 
that there will be costs associated with the integration of new 
members, that these costs will be manageable, and that the resources 
necessary to meet these costs will be provided.
    Recently, both senior British and German government officials 
placed editorials in major American newspapers, stating that their 
governments were pledged to provide their fair share of enlargement 
costs. On October 21, British Secretary of Defense George Robertson 
stated in an editorial in the Washington Times that ``[w]e all 
recognize that bringing new members into NATO will incur a cost. * * * 
But, if additional spending is required, Britain will pay its share''. 
Most recently, on 4 November, German Foreign Minister Klaus Kinkel 
stated in an editorial in the Washington Post that ``[t]he debate on 
admitting new members into the Alliance must take into account the 
political and military rationale behind NATO enlargement. * * * It goes 
without saying that Europe and Germany * * * must bear their fair share 
of the costs of NATO enlargement. * * * This European contribution to 
the Alliance will not drop with the admission of new members, but will 
further increase''.
    Our initial estimate of overall enlargement costs for current 
Allies represents less than 1 percent of their projected defense 
spending. Thus, spending increases are not required. What will be 
necessary, and is already underway, is a small reallocation of Allies' 
defense programs toward developing more deployable forces. But we have 
all been downsizing and restructuring simultaneously since the end of 
the Cold War, so this is not a new dynamic.

                PROSPECTIVE NATO MEMBERS' ABILITY TO PAY

    Question. The economic strength of the prospective NATO countries 
is a mixed bag. GDP growth in Poland may reach 6 percent in 1996. On 
the other hand, Hungary's economy experienced modest growth in 1994 and 
1995, but it declined 1 percent in 1996. In 1996, the Czech economy 
grew by about 4 percent. However, GDP growth for 1997 was estimated to 
drop to 2.7 percent. Although these prospective NATO countries need to 
continue to focus on strengthening their economies, NATO expansion will 
require them to spend additional resources on their defense budget. 
Meeting the Administration's cost estimate will require the new 
countries to increase their budgets by roughly 20 percent in real terms 
over the next 15 years. Meanwhile, defense spending in each of the 
prospective NATO countries has declined since the Cold War ended. What 
evidence does the Administration have demonstrating that prospective 
NATO members are planning to accommodate defense budget increases over 
the next 10 to 15 years?
    Answer. All three invited countries are planning to accommodate 
defense budget increases. For new members, the costs of NATO 
enlargement will be a manageable percentage of their planned military 
budgets.
    For example, the Czech government has approved plans to increase 
their 1998 national defense spending to about $1.1 billion, which 
represents about 1.88 percent of projected GDP. The Czech Republic has 
stated its plans to link defense spending growth to the rate of GDP 
growth and to increase the percentage of GDP dedicated to defense by 
0.1 annually for the next 3 years which will raise it from the current 
1.7 percent in fiscal year 1997 to 2.0 percent in 2000.
    The Hungarians have increased their 1997 national defense budget to 
about $800 million, which represents about 1.8 percent of projected 
GDP. Hungary has stated that it plans to link defense spending growth 
to the rate of GDP growth and to increase the percentage of GDP 
dedicated to defense by 0.1 percent annually for the next five years. 
If so, Hungarian defense spending may increase in real terms by 3 to 8 
percent annually during the next four years.
    Poland spent 2.3 percent of GDP on defense in 1996. Poland's 15-
year modernization plan calls for annual increases in defense spending 
which are pegged to the rate of GDP growth. Based on a conservative 
estimate of 4.2 percent annual economic growth, Polish defense spending 
should increase approximately 3.2 percent annually.
    The three invited countries are also pledging national funds to 
NATO's three common budgets. In their accession papers, the Czechs have 
agreed to pay a 0.9 percent national cost share of the NATO common 
budgets; Hungary has agreed to a 0.65 percent national cost share; and 
the Poles have agreed to a 2.48 percent national cost share.
    The Administration's study did not suggest that new members would 
need to increase their budgets by 20 percent to develop the required 
capabilities. Rather, the portion of new members' projected budgets 
devoted to meeting the requirements would be about 20 percent. Some 
percentage of new members' budgets already includes such programs.
    Question. Are plans sufficient to meet the costs of NATO expansion?
    Answer. For new members, the costs of NATO enlargement will be a 
manageable percentage of their current military budgets. Poland, 
Hungary, and the Czech Republic are already beginning to invest in 
modernizing and restructuring their forces. The costs can be met by a 
combination of modest increases in the percentage of GDP devoted to 
defense to bring them into line with NATO averages, a growing GDP base 
as growth advances, and probably most important, reduction in the size 
of their manpower base.
    Throughout this effort, NATO as a whole and the United States in 
particular will try to help new members set priorities in their plans 
and programs in order to focus their resources on the most critical 
areas first. The Administration's study did not suggest that new 
members would need to increase their budgets by 20 percent to develop 
the required capabilities. Rather, the portion of new members' 
projected budgets devoted to meeting the requirements would be about 20 
percent. Some percentage of new members' budgets already includes such 
programs.
    Question. Given economic pressures in each of the prospective NATO 
countries, are these plans realistic?
    Answer. As I indicated in my responses to Questions Nos. 12 and 13, 
for new members, the costs of NATO enlargement will be a manageable 
percentage of their current military budgets. Poland, Hungary, and the 
Czech Republic are already beginning to invest in modernizing and 
restructuring their forces. From all indications, these plans are sound 
and realistic, given prevailing economic and spending forecasts.
    Throughout this effort, NATO as a whole and the United States in 
particular will try to help new members set priorities in their plans 
and programs in order to focus their resources on the most critical 
areas first. The Administration's study did not suggest that new 
members would need to increase their budgets by 20 percent to develop 
the required capabilities. Rather, the portion of new members' 
projected budgets devoted to meeting the requirements would be about 20 
percent. Some percentage of new members' budgets already includes such 
programs.

                PUBLIC OPINION REGARDING NATO EXPANSION

    Question. While public opinion regarding the question of NATO 
expansion has been consistently strong in Poland, it has been weaker in 
the Czech Republic and Hungary. What do the public opinion polls in 
each of the prospective countries indicate about the resilience and 
durability of the public's support for NATO membership, especially if 
public sacrifice is required?
    Answer. Three-fourths of the Polish public support joining NATO and 
many (44 percent) are strong proponents. Asked how they would vote ``if 
a referendum were held tomorrow,'' nearly eight in ten (79 percent) say 
they would vote to join NATO. The Polish public is willing to accept 
the many responsibilities associated with NATO membership. A solid 
majority approve of sending Polish forces to defend other NATO members 
and allowing routine NATO exercises to take place in Poland. While 
nearly nine in ten Poles (88 percent) believe that membership in NATO 
will increase the amount their government spends on defense, a majority 
(55 percent) say they would support such an increase.
    In the Czech Republic, support for membership continues to rise. 
According to a September poll, 63 percent of Czechs say they would vote 
to join NATO in a hypothetical referendum, a two percent rise since 
May. Both foreign and defense officials are actively engaged in 
educating the Czech people on the importance of joining NATO and steady 
increases in popular support both to join NATO and to take on the 
responsibilities of NATO membership are expected.
    Support for Hungarian accession into NATO has been steadily rising. 
Pre-referendum polling indicated that popular support was fluctuating 
from 54 percent to 60 to 65 percent. Press reports on the November 16th 
referendum indicate that about 85 percent of eligible voters favored 
accession.

                        PUBLIC OPINION IN RUSSIA

    Question. Russian political leaders across the spectrum strongly 
oppose enlargement, although President Yeltsin apparently concluded he 
would rather work with the West than fight us. For now, public opinion 
shows that among ordinary Russians, NATO enlargement is not a 
significant issue. Under what circumstances could you see public 
opinion in Russia swinging in the opposite direction?
    Answer. While most ordinary Russians do not consider NATO 
enlargement a salient issue, one must nevertheless assume, given the 
negative images of NATO that have been presented to Russians for 
decades and the strong public sense of national decline, that there is 
at least a widespread latent distrust of the Alliance. Mobilizing this 
latent tendency into more strongly expressed mass opposition would 
depend on the degree to which opponents of NATO among the elite could 
make the case that enlargement--or something related to enlargement--
was having a tangible negative effect on people's daily lives or 
imminently threatening Russian security.
    Question. Is any current or potential leader in Russia capable of 
arousing public sentiment against expansion?
    Answer. Various leaders have already sought to arouse public 
sentiment against expansion but without notable success. The ability of 
current or future leaders to do so would depend in large measure on the 
domestic political and economic situation in Russia. At present, social 
and economic issues are the most salient with the Russian public. In 
addition, with no elections on the immediate horizon, there would be 
little obvious political advantage to be gained at present by seeking 
to make enlargement a major issue. It would not be surprising, however, 
if the Communists, Vladimir Zhirinovsky's ``Liberal Democrats,'' and 
other so-called ``national-patriotic'' groups sought to make the 
Yeltsin administration's inability to stop enlargement a theme in the 
next parliamentary and presidential elections, now scheduled for 1999 
and 2000.
    Question. To what extent does mass public opinion in Russia 
regarding NATO expansion have an impact on Russian government policy?
    Answer. The main effect of mass public opinion on Russian 
government policy on any international issue, including that of NATO 
enlargement, is mainly indirect. For example, public dissatisfaction 
with Russia's general status in the world played a significant role in 
the way both President Yeltsin and his Communist opponent, Gennadiy 
Zhuganov, positioned themselves in the 1996 presidential election and 
in Yeltsin's decision after the first round to bring Aleksandr Lebed 
into his Administration. Both the executive and legislative branches of 
the Russian state are sensitive to their own assessments of mass 
opinion. Other than in the electoral process, however, how this 
sensitivity is reflected in policy depends on other aspects of the 
power relationships and rivalries in Moscow.

                         RUSSIA'S ROLE IN NATO

    Question. Regardless of what the Russians want, I am curious about 
the long term Administration's thinking regarding Russia. Is the 
Administration's ultimate goal to include Russia as a full-fledged 
member of NATO?
    Answer. The Administration's ultimate goal is for a democratic and 
stable Russia to play an important and cooperative role in European 
security. A post-Cold War order which does not engage Russia cannot 
successfully maintain stability and security in the Euro-Atlantic area. 
I believe that the NATO-Russia Founding Act and the Permanent Joint 
Council it created can be valuable tools in this process of engaging 
Russia. The Founding Act and PJC do not give Russia a place or a veto 
in the Alliance, but do create a forum for consultation, and where 
possible and desirable, cooperation between NATO and Russia.
    While NATO's Madrid Declaration makes clear that the Alliance 
remains open to new members, to date, Russia has not applied for NATO 
membership. If a time comes when Russia does apply to join NATO, the 
United States and our allies will have to consider that application on 
its merits.
    Question. Is the relationship outlined in the NATO-Russia Founding 
Act and the Permanent Joint Council sustainable over the long run?
    Answer. While the NATO-Russia Permanent Joint Council is still a 
young forum, it has already proven to be an important venue for 
discussion between NATO and Russia, and a place in which a more 
trusting relationship is being built. It is our hope and that of our 
allies, that the Founding Act and PJC will continue to play this 
constructive role for the foreseeable future. To a large extent, the 
PJC's success, both short- and long-term, is contingent on both 
parties' continued willingness to engage with each other in a 
constructive manner.
    Question. What would the reaction to Russia as a full-fledged NATO 
Member be among current and prospective NATO members?
    Answer. Russia has not applied for NATO membership and we have had 
no indication that Russia intends to do so in the foreseeable future. I 
would venture that when and if Russia seeks NATO membership, the 
security environment in Europe will be sufficiently different from the 
present, and that any comments I could make now on the reaction among 
others to that event would be pure speculation.

                         OUT-OF-AREA INTERESTS

    Question. In the Senate Foreign Relations Committee hearing on 
October 7, Secretary Albright highlighted that, in addition to regional 
defense, NATO agreed to adapt the alliance to meet ``out of area'' 
interests. Bosnia, as a non-NATO member without the guarantee of 
Article V protection, is one example of an ``out of area'' operation. 
Peacekeeping and crisis management beyond alliance borders are types of 
missions I've heard to which new members might contribute. What does 
``out of area'' mean exactly? Does it include the Middle East? Asia?
    Answer. The current NATO ``Area of Responsibility'', or AOR, is 
defined as the territorial integrity of the sixteen members of the 
Alliance. ``Out of Area'' has never been formally defined by the 
Alliance but has been judged by its members to be areas that either 
border the Alliance or that can influence or threaten its AOR. No 
country from the Asian region currently falls under the ``out of area'' 
purview.
    Question. By what standards will participation in an ``out of 
area'' operation be judged?
    Answer. U.S. participation in an ``out of area'' operation will be 
determined in accordance with the USCINCEUR contingency plans. If an 
``out of area'' operation is deemed to be in the U.S. National Security 
Interest as stipulated through such a plan, the U.S. could conceivably 
contribute to the operation. It is important to note that any such 
deployment would have to be approved by the North Atlantic Council (in 
which the U.S. participates with full veto powers) after formal 
consideration.
    Question. Will NATO take on peacekeeping tasks that are currently 
the responsibility of the United Nations? What tasks?
    Answer. NATO may, on a case-by-case basis, take on peacekeeping 
tasks that the United Nations is currently conducting. Again, it would 
take a NAC decision to implement such an operation.
                                 ______
                                 
               Questions Submitted by Senator Tom Harkin

                               CONSENSUS

    Question. NATO has operated effectively by consensus. If the 
organization grows--especially beyond the inclusion of the Czech 
republic, Hungary and Poland--many have expressed concern about its 
ability to reach consensus. How would consensus be reached in an 
organization that is almost double the size of the existing 
organization?
    Answer. Since the time that the Alliance decided to admit new 
members, it has realized the importance of enlarging in a manner that 
preserves the military capability and political cohesion of NATO.
    The Alliance made the commitment to build consensus on all issues 
an explicit criteria for membership in NATO. In the accession process, 
Poland, Hungary and the Czech Republic recognized and accepted that the 
Alliance relies upon commonality of views, based on the principle of 
consensus in decision making, and state in their letters of intent to 
join the Alliance that they will work for consensus within the 
Alliance.
    Concern for preservation of the political cohesion of NATO was one 
of the basic factors which informed President Clinton's decision last 
June to support the admission of just three new members to the 
Alliance. The President was determined that NATO avoid diluting itself 
by pursuing a hasty or overly-ambitious enlargement which could 
undercut the vitality of the Alliance.
    Our vision of NATO enlargement is that as the nations of Europe 
develop their democracy and their capacity to contribute to NATO's 
purposes, they should become members of the Alliance in a steady but 
gradual and deliberate process, one that reflects their own development 
and NATO's ability to assimilate new members without weakening its 
military effectiveness or its political cohesion.

                 COSTS OF NATO: WHO WILL PAY THE COSTS?

    Question. I understand that the Administration position is that the 
U.S. will pay no more than 15 percent of the costs, leaving the lion's 
share to our NATO allies. However, our European allies seem to 
disagree. To quote the British Defense Ministry, ``the accession of new 
members to [sic] result in a proportionate reduction in the U.K. share 
of NATO common budgets''. Other NATO nations seem to agree with this 
point. If our allies expect to pay less for NATO, doesn't it follow 
that we will pay more?
    Answer. The distribution of costs will be in accordance with long-
standing NATO financial principles. The U.S. share of NATO's common-
funded budgets is about 24 percent. U.S. estimated costs are incurred 
largely through our share of those direct enlargement measures that are 
common-funded. We do not expect that U.S. contributions to these 
common-funded budgets will change drastically because of enlargement. 
The U.S. would share in more of the overall costs only to the extent 
that the U.S., with Congressional approval, may choose to continue or 
expand the current modest assistance being provided to the military 
modernization of the new democracies of Central and Eastern Europe 
through programs like the Warsaw Initiative.
    Recently, both senior British and German government officials 
placed editorials in major American newspapers, stating that their 
governments were pledged to provide their fair share of enlargement 
costs. On October 21, British Secretary of Defense George Robertson 
stated in an editorial in the Washington Times that ``[w]e all 
recognize that bringing new members into NATO will incur a cost. * * * 
But, if additional spending is required, Britain will pay its share''. 
Most recently, on 4 November, German Foreign Minister Klaus Kinkel 
stated in an editorial in the Washington Post that ``[t]he debate on 
admitting new members into the Alliance must take into account the 
political and military rationale behind NATO enlargement. * * * It goes 
without saying that Europe and Germany * * * must bear their fair share 
of the costs of NATO enlargement. * * * This European contribution to 
the Alliance will not drop with the admission of new members, but will 
further increase''.

                 COST TO NEW NATIONS VERSUS OTHER NEEDS

    Question. The New York Times reported earlier this year that the 
International Monetary Fund has concerns over the cost of expansion for 
the new nations themselves. The IMF understandably has questions 
regarding the billions of dollars in loans that are conditioned on 
fiscal constraint by nations such as Poland, Hungary and the Czech 
Republic. Do you share the concerns of the IMF that the increased costs 
to the new nations could mean a huge and difficult burden?
    Answer. From our best assessments, we understand that for new 
members, the costs of NATO enlargement will be a manageable percentage 
of their current military budgets.
    For example, the Czech government has approved plans to increase 
their 1998 national defense spending to about $1.1 billion, which 
represents about 1.88 percent of projected GDP. The Czech Republic has 
stated its plans to link defense spending growth to the rate of GDP 
growth and to increase the percentage of GDP dedicated to defense by 
0.1 annually for the next 3 years which will raise it from the current 
1.7 percent in fiscal year 1997 to 2.0 percent in 2000.
    The Hungarians have increased their 1997 national defense budget to 
about $800 million, which represents about 1.8 percent of projected 
GDP. Hungary has stated that it plans to link defense spending growth 
to the rate of GDP growth and to increase the percentage of GDP 
dedicated to defense by 0.1 percent annually for the next five years. 
If so, Hungarian defense spending may increase in real terms by 3 to 8 
percent annually during the next four years.
    Poland spent 2.3 percent of GDP on defense in 1996. Poland's 15-
year modernization plan calls for annual increases in defense spending 
which are pegged to the rate of GDP growth. Based on a conservative 
estimate of 4.2 percent annual economic growth, Polish defense spending 
should increase approximately 3.2 percent annually.
    Throughout this effort, NATO as a whole and the United States in 
particular will try to help new members set priorities in their plans 
and programs in order to focus their resources on the most critical 
areas first.

                   COSTS OF MEMBERSHIP FOR FULL LIST

    Question. What about the cost for adding additional nations to NATO 
beyond the three? How much will it cost for not just the Czech 
republic, Hungary and Poland, but also Romania, Slovakia, Slovenia, 
Bulgaria, etc.? Please provide cost estimates for an expanded list 
beyond the first three nations.
    Answer. DOD notionally estimates the cost of integrating Slovenia 
into the Alliance at about $600 to $700 million over a thirteen-year 
period. DOD has not estimated the cost for integrating other potential 
new members.

                 MARSHALL PLAN FOR DEFENSE CONTRACTORS

    Question. Secretary Cohen, does the Administration estimates for 
NATO expansion costs include any increases in the U.S. subsidies for 
overseas weapon sales? Has the Pentagon been approached by any U.S. 
arms manufacturers to expand the current arms subsidy program?
    Answer. The Administration's February 1997 estimate did not include 
increases in these subsidies. While it is clear that each of the 
invited nations must undergo modernization of major weapons systems in 
the years ahead if it is to be a contributor to overall alliance 
security, acquiring high tech weapons systems should not be the highest 
priority. We have told each invitee that its highest priority should be 
investing in quality personnel: recruiting and training good troops, 
and developing an effective NCO corps. The second priority should be 
training those troops. The next priority is achievement of a real 
degree of interoperability with NATO, including communications, 
logistics, infrastructure for reinforcement, and air defense.

          ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE

    Question. Why hasn't the Organization for Security and Cooperation 
in Europe been receiving the same attention as NATO expansion recently? 
If a primary goal for NATO expansion is the protection of democracy and 
stability among the European nations, why can't the power and resources 
of the OSCE be expanded? Are there any initiatives for the OSCE that 
are being pursued?
    Answer. There is a wide measure of consensus throughout the 
membership of the OSCE that the Organization is doing an effective job 
carrying out its mandates in the areas of enhancing and protecting 
European democracy and stability and that it is a vital part of the 
mosaic of European security institutions. This mosaic of institutions, 
each of which contributes its own unique capabilities, includes both 
OSCE and NATO as well as other bodies. Because of our respect for the 
unique contribution made by the OSCE, the United States is actively 
engaged with the other members of the Organization to strengthen its 
capabilities to carry out its existing mandates and to expand its work 
into the economic and environmental areas. Throughout these efforts, 
the United States has sought to focus attention on enhancing the OSCE's 
practical work rather than creating new theoretical structures.

                          WHAT ABOUT SLOVENIA?

    Question. What is the status of Slovenia's application to join 
NATO? What are its prospects for joining NATO during the next expansion 
round?
    Answer. Slovenia has made progress towards reaching the level of 
political, economic, social and military reform needed for membership 
in the Alliance. During the Madrid Summit, Allied leaders took special 
note of the positive developments towards democracy and the rule of law 
in Slovenia.
    It is premature to speculate about Slovenia's (or any other 
state's) prospects for membership. The Administration has stressed that 
no state should assume it has an ``assured invitation'' for the next 
round of enlargement. In our conversations with all interested Partner 
states, we have stressed that active participation in the Partnership 
for Peace remains the prime pathway to membership in NATO. We also have 
stressed that the criteria for membership will remain the same: 
democracy, a market economy, civilian control of the military, good 
relations with neighboring states, and compatibility with NATO forces.

           ARMS CONTROL INITIATIVE ALONG WITH NATO EXPANSION

    Question. One of the motivations we hear for an expanded NATO is to 
protect nations against future military threats. For example, one hears 
a lot about a renewed Russian military power, although not necessarily 
from the Administration. What arms control initiatives are being 
pursued to reduce or avoid such future threats?
    Answer. The key initiative to enhance arms control in the European 
area is adaptation of the Treaty on Conventional Armed Forces in Europe 
(CFE). The CFE Treaty, which entered into force in 1992, has been a 
critical cornerstone of European security and stability, resulting to 
date in the reduction (by destruction or conversion) of over 50,000 
items of Treaty-limited conventional weapons equipment (TLE). In 
recognition of the changing European security environment, the 30 CFE 
parties (including Russia) agreed in December 1996 to adapt the Treaty 
to enhance its effectiveness and to improve the security of each party. 
The parties have agreed that there will be no increase in total numbers 
of permitted TLE, that their objective should be to achieve overall 
lower force levels and to continue to preclude any potentially 
destabilizing build-up of forces in different regions, and that they 
will exercise restraint during adaptation negotiations with respect to 
their force levels and deployments. CFE adaptation will also preserve 
and enhance the Treaty's transparency and verification measures, 
contributing further to a stable and predictable security environment. 
Adaptation negotiations are currently underway in the CFE Treaty's 
Joint Consultative Group in Vienna.

                     PROMOTION OF DEMOCRATIC VALUES

    Question. What measures have been taken to ensure that NATO's new 
members uphold values about democracy, the rule of law, and human 
rights?
    Answer. There are many programs sponsored by the Department of 
Defense that expose Democratic values to the young soldiers as well as 
to the senior military and civilian leadership of potential new member 
countries. Especially emphasized is civilian control of the military 
and the ways in which that concept is carried out in the West.
    There are information exchange programs between our military and 
civilian defense establishments that discuss important fundamentals 
such as the role in defense establishments of legislative relations and 
public liaison. The National Defense University also conducts seminars 
on civilian control. Other DOD initiatives expose civilian defense 
ministry personnel to the tools which civilian ministries must employ, 
such as defense budgeting and planning, to exercise civilian control. 
Soldiers and civilians also attend professional military education and 
training courses (through IMET) which focus on civil-military 
relations, human rights and other Democratic values. Young soldiers 
also attend our military academies and other military training 
facilities.
    Another example of a DOD program which stresses civilian control is 
the Regional Airspace Initiative (RAI). To be eligible to participate 
in the RAI, countries must reorganize the way in which they ensure air 
sovereignty (such as air traffic management) so that it is managed by 
civilian agencies like it is done in the West.
    Probably the best way in which Democratic values are passed on to 
potential new members is through the hundreds of contacts between U.S./
Allied soldiers and their counterparts in PFP. Through interaction in 
PFP exercises and other PFP events, as well as U.S.-sponsored ``in the 
spirit of PFP'' events, Partner soldiers are shown by example how 
democratic values are upheld in the West.
    Question. What part of NATO's organizational structure is 
responsible for internal implementation of the Alliance's values?
    Answer. NATO is an alliance of sovereign states in which decisions 
are taken under the rule of unanimity. Throughout its almost half-
century of existence, the Alliance has never been given responsibility 
for supervising the internal affairs of its members. The United States, 
for one, would never accept such an imposition on its sovereignty.
    That said, since its establishment by the 1949 Washington Treaty, 
NATO has always identified itself as an alliance founded on the 
principles of democracy, individual liberty and the rule of law. During 
the accession process, each new member will reiterate its support for 
these principles. Each of the new members, as well as each of the 
current Allies, realizes that it could not long remain a viable member 
of the Alliance in the absence of a democratic system of government.

                        NUCLEAR NONPROLIFERATION

    Question. South Africa and other nations have expressed concern in 
April of this year that despite the political statements by NATO for 
nuclear weapons non-deployment that bring these nations into the 
political planning group and tying these states into nuclear planning 
and deterrence is a form of proliferation. Is the Administration 
addressing any Nuclear Non-Proliferation Treaty problems associated 
with NATO expansion?
    Answer. First, there are no ``Non-Proliferation treaty problems 
associated with NATO expansion''. All the new NATO countries have 
signed and ratified the NPT. By doing so, they have agreed not to 
receive, manufacture or otherwise acquire nuclear weapons, or other 
explosive devices (Article II). If NPT signatories attempted to acquire 
nuclear weapons, they would break their commitment to the NPT, whether 
they were in NATO or not.
    There is no requirement to change NATO's current nuclear posture. 
NATO countries have no intention, no plan, and no reason to deploy 
nuclear weapons on the territory of new member states, nor any need to 
change any aspect of NATO's nuclear posture or nuclear policy--nor do 
they foresee any future need to do so.
    The new NATO members are expected to support NATO's strategic 
concept, including its nuclear components. They will, as do current 
members, contribute to the development and implementation of NATO's 
strategy, including its nuclear component. They are eligible to become 
members of the Nuclear Planning Group and its subordinate bodies and to 
participate in the political oversight of NATO's nuclear posture as 
well as in nuclear consultations during exercises and in crises. The 
NATO defense ministers in the Nuclear Planning Group confirmed in 1996 
that NATO's nuclear forces are not targeted at any country, neither on 
NATO's periphery or elsewhere.

              NATO ENLARGEMENT AND NUCLEAR WEAPONS POLICY

    Question. In the ``Founding Act on Mutual Relations, Cooperation 
and Security between NATO and the Russian Federation'' NATO's members 
``reiterate that they have no intention, no plan and no reason to 
deploy nuclear weapons on the territory of new members nor any need to 
change any aspect of NATO's nuclear posture or nuclear policy--and do 
not foresee any future need to do so.'' According to the 
administration's point of view, does this statement commit the U.S. and 
its European allies:
    (a) to maintain the presence of U.S. nuclear weapons on the 
territory of all NATO member nations currently hosting U.S. nuclear 
weapons?
    (b) to not reduce the number of U.S. nuclear weapons beyond the 
numbers agreed by the alliance members for 1998?
    (c) to maintain and not change the NATO system of nuclear sharing 
as currently practiced?
    Answer. The origin of the statement above stems from early 1995 
when, as part of the NATO Enlargement Study effort, the NATO High Level 
Group, which has a continuing remit from Defense Ministers to review 
matters involving nuclear policy and force structure, reached the 
judgment that in the current security environment NATO's current 
nuclear posture was adequate for an enlarged Alliance. Foreign and 
Defense Ministers reaffirmed that decision in December 1996 with the 
statement that NATO has ``no intention, no plan, and no reason'' to 
deploy nuclear weapons on the territory of new NATO members. NATO Heads 
of State and Government reaffirmed the statement in the Founding Act. 
As such, the statement is a matter of NATO policy, not a legal 
commitment. Moreover, NATO will retain its existing, much-reduced, 
nuclear capabilities, and retain its right to modify its nuclear 
posture or policy should circumstances warrant.
    Question. Does the NATO statement--reiterated in the Founding Act--
preclude training pilots from the possible new member states in nuclear 
missions during peacetime and transferring the necessary equipment to 
these countries as soon as these countries have introduced into service 
dual capable aircraft?
    Answer. As noted earlier, the statement in the Founding Act is not 
legally binding on the members of the Alliance. Nonetheless, NATO's 
current nuclear posture has been judged adequate for an enlarged 
Alliance. Thus, there are no plans and no foreseeable reason to train 
new member states' pilots in nuclear missions during peacetime nor to 
transfer equipment or infrastructure to support these countries' dual-
capable aircraft in a nuclear role.
    Question. Does the administration intend or plan to conclude 
bilateral agreements with future new member states to the effect of or 
similar to the ``Agreements for Cooperation for Mutual Defense 
Purposes'' concluded with other NATO members participating in NATO 
nuclear sharing? If so, what are the administration's plans?
    Answer. No. We have no such intentions or plans.
    Question. Which airbases in European NATO countries are currently 
equipped with WS3-storage vaults for U.S. nuclear weapons and which 
airbases are to be equipped according to current plans? How many vaults 
have been built or will be built on each of the airbases of the new 
NATO states?
    Answer. We would be happy to provide a classified briefing to 
cleared personnel to discuss this subject.
    Question. Are the new member states, according to the 
administration's point of view, expected to equip at least one unit 
within its air forces with Western dual-capable aircraft? By when 
should such equipment programs be completed?
    Answer. From the Administration's point of view, there are no 
plans, nor are there any requirements, for the new member states to 
equip at least one unit within their air forces with Western dual-
capable aircraft. Nonetheless, members of the Alliance may purchase 
dual-capable aircraft for use in a conventional role, as has been done 
by some current NATO members who do not participate in nuclear programs 
of cooperation. The fact that a certain type aircraft is dual-capable 
is not an indication that such an aircraft is indeed nuclear certified 
or has an assigned nuclear role.
    Question. Which types of aircraft considered by the new member 
states fulfill the requirement of providing DCA to NATO's future 
posture?
    Answer. None of the aircraft currently in or planned to be in the 
inventory of new member states fulfill the requirement of providing DCA 
to NATO's future posture, since we have no plans to change NATO's 
future nuclear posture or to provide nuclear certification to any of 
the new member states' aircraft.
    Question. What other preparations are under consideration to 
prepare the new member states for participation in NATO nuclear sharing 
arrangements?
    Answer. New members will, as do current members, contribute to the 
development and implementation of NATO's strategy, including its 
nuclear component. New members will be eligible to join the Nuclear 
Planning Group (NPG) and its subordinate bodies (NPG Staff Group and 
High Level Group), and to participate in nuclear consultations during 
exercises and crisis. During the interim period leading to accession, 
they will be offered periodic briefings on the main nuclear-related 
issues which the NPG Staff Group is addressing as part of its work 
program, but all such briefings will be unclassified due to the 
sensitivity of nuclear matters.

                         NATO ENLARGEMENT COSTS

    Question. Could the Administration provide a detailed record of 
U.S. contributions to all bi- and multilateral defense and defense 
industry related projects and programs under which (a) the new member 
states, and (b) the other PFP members receive(d) weapons systems, 
military equipment, training or other defense-related services such as 
financial aid, financial loans, or debt waivers during the 1990-1997 
timeframe?
    Answer. The Department of State handles financial aid and related 
actions for the U.S. PFP program, the Warsaw Initiative. Those items 
that the Department of Defense is responsible for are accounted for in 
the attached spreadsheets on Foreign Military Financing (FMF) grants, 
International Military Education and Training (IMET), and Excess 
Defense Article (EDA) Offers.
    The question asked for information on the transfers of defense 
articles and services to all Partner countries. Such transfers are 
conducted under the auspices of the Arms Export Control Act and the 
Foreign Assistance Act, as amended. However, the Department of Defense 
offers initiatives to Partners that, while not transfers of defense 
articles and services, assist their participation in PFP and ``in the 
spirit of PFP'' activities. DOD also offers information exchange 
programs which help expose Partners to democratic values as they 
pertain to the military in a democratic society. The exchanges 
particularly emphasize aspects of civilian control of the military. 
These initiatives are provided in the attached spreadsheet.

                        DOD WARSAW INITIATIVE PROGRAMS--FISCAL YEAR 1995-97 EXPENDITURES                        
----------------------------------------------------------------------------------------------------------------
                                                       Amount                         Country                   
----------------------------------------------------------------------------------------------------------------
            FISCAL YEAR 1995 PROGRAMS                                                                           
                                                                                                                
Partnership Information Management System (PIMS).      $5,921,326  All Partners.\1\                             
Defense Resource Management Study................         929,199  Poland, Hungary, Slovenia, Romania.          
Emergency Preparedness Planning Seminar..........         750,000  All Partners.                                
Transport of Excess Defense Articles to Albania..         145,000  Albania.                                     
Regional Airspace Initiative Study...............       2,000,000  Poland, Hungary, Czech Rep., Romania.        
Czech C\4\/Hungarian NAVAIDS Studies.............         975,718  Czech Rep, Hungary.                          
English Language Development Study...............         385,000  NA.                                          
J-8 PfP Workshop and Gaming Program..............         300,000  All Partners Invited.                        
Albania MOD Advisor (EUCOM)......................         200,000  Albania.                                     
Support for Partner Participation in PFP               18,240,868  All Partners.                                
 Exercises.                                                                                                     
                                                  ----------------                                              
      Fiscal year 1995 total.....................      29,847,111                                               
                                                  ================                                              
            FISCAL YEAR 1996 PROGRAMS                                                                           
                                                                                                                
Regional Airspace Initiative (RAI)/Czech C\4\I          1,972,000  Baltics, Czech Rep (C\4\I).                  
 Study.                                                                                                         
Partnership Information Management System (PIMS).       3,533,600  All Partners.\1\                             
Defense Resource Management Study................       2,140,562  Czech Rep, Ukraine, Slovak., Balts.          
EDA Transport....................................       2,520,000  Albania, Bulgaria, Balts.                    
Marshall Legacy Symposium........................       1,975,000  All Partners.\1\                             
NATO Environmental Conference (NATO CCMS)........          67,600  All Partners.\1\                             
Ukraine Emergency Preparedness Exercise..........       1,017,000  Ukraine--all Partners invited.               
Albanian Defense Advisor (EUCOM).................         200,000  Albania.                                     
General Officers Program.........................          40,000  Russia.                                      
NDU PFP Conference...............................          13,200  All Partners.\1\                             
Public Affairs Information Exchange..............          25,000  Hungary, Czech Rep, Poland.                  
Support for Partner Participation in PFP               26,478,000  All Partners.\1\                             
 Exercises.                                                                                                     
                                                  ----------------                                              
      Fiscal year 1996 total.....................      39,981,962                                               
                                                  ================                                              
            FISCAL YEAR 1997 PROGRAMS                                                                           
                                                                                                                
Regional Airspace Initiative (RAI)...............         710,000  Bulgaria, FYROM, Lithuania.                  
NAVAIDS Study....................................         850,000  Bulgaria, Poland.                            
C\4\ Studies.....................................       1,820,000  Hungary, Poland.                             
Partnership Information Management System (PIMS).       4,475,305  All Partners.\1\                             
Defense Resource Management Study................       2,151,000  Czech Rep, Ukraine, Slovak., Balts, NIS.     
Personnel and Readiness Exchange.................         200,000  All Partners.                                
General Officers Program.........................         150,000  Russia, Ukraine.                             
EDA Transport....................................       1,000,000  Baltics, Bulgaria.                           
NATO Environmental Conference (NATO CCMS)........         170,695  All Partners.\1\                             
Hungarian Emergency Preparedness Conference......          20,000  All Partners.\1\                             
NDU PFP Conference...............................          25,000  All Partners.\1\                             
Public Affairs Information Exchange..............          20,000  Poland, Romania.                             
Support for Partner Participation in PFP               28,700,000  All Partners.                                
 Exercises.                                                                                                     
                                                  ----------------                                              
      Fiscal year 1997 total.....................      40,292,000                                               
----------------------------------------------------------------------------------------------------------------
\1\ Except Austria, Finland, Sweden, and Switzerland.                                                           
                                                                                                                
NA: Not available.                                                                                              


                                                                       FMF GRANTS                                                                       
                                                                [In thousands of dollars]                                                               
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          1990       1991       1992       1993       1994       1995       1996       1997      Total  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    CENTRAL EUROPE                                                                                                                      
                                                                                                                                                        
Albania \1\..........................................  .........  .........  .........  .........  .........  .........      2,525        100      2,625
Bulgaria.............................................  .........  .........  .........  .........  .........  .........      4,275      3,000      7,275
Czech Republic.......................................  .........  .........  .........  .........  .........  .........      8,900      9,087     17,987
Estonia..............................................  .........  .........  .........  .........  .........    \2\ 706  \3\ 1,500      1,500      3,706
FYROM................................................  .........  .........  .........  .........  .........  .........        750      1,648      2,398
Hungary \4\..........................................  .........  .........  .........  .........  .........  .........      3,200     10,087     13,287
Latvia...............................................  .........  .........  .........  .........  .........    \2\ 706  \3\ 1,500      1,500      3,706
Lithuania............................................  .........  .........  .........  .........  .........    \2\ 706  \3\ 1,500      1,500      3,706
Poland \4\...........................................  .........  .........  .........  .........  .........      1,000     16,475     12,587     30,062
Romania..............................................  .........  .........  .........  .........  .........  .........      9,275      6,500     15,775
Slovakia.............................................  .........  .........  .........  .........  .........  .........      3,550      6,000      9,550
Slovenia.............................................  .........  .........  .........  .........  .........  .........        400      1,000      1,400
                                                      --------------------------------------------------------------------------------------------------
      Totals.........................................  .........  .........  .........  .........  .........      3,118     53,850     54,509    111,477
                                                      ==================================================================================================
                         NIS                                                                                                                            
                                                                                                                                                        
Belarus..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Georgia..............................................  .........  .........  .........  .........  .........  .........  .........        700        700
Kazakhstan...........................................  .........  .........  .........  .........  .........  .........  .........      1,500      1,500
Kyrgyzstan...........................................  .........  .........  .........  .........  .........  .........  .........        800        800
Moldova..............................................  .........  .........  .........  .........  .........  .........  .........        800        800
Russia...............................................  .........  .........  .........  .........  .........  .........  .........      2,250      2,250
Turkmenistan.........................................  .........  .........  .........  .........  .........  .........  .........        500        500
Ukraine..............................................  .........  .........  .........  .........  .........  .........  .........      5,250      5,250
Uzbekistan...........................................  .........  .........  .........  .........  .........  .........  .........      1,000      1,000
                                                      --------------------------------------------------------------------------------------------------
      Totals.........................................  .........  .........  .........  .........  .........  .........  .........     12,800     12,800
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Albania: In fiscal year 1997, State exchanged $1.5 million of Albania's $1.6 million fiscal year 1997 FMF allocation for PKO authority.             
\2\ These FMF funds were provided for Baltic Peacekeeping Battalion (BALTBAT) and were augmented by $9.779 million PKO funds in fiscal year 1995 and    
  fiscal year 1996, plus another $750,000 in fiscal year 1996 FMF. Total USG grant assistance to BALTBAT: $12.647 million.                              
\3\ $250,000 of each of these nations' allocations was earmarked for BALTBAT.                                                                           
\4\ Fiscal year 1997 data for Poland, Hungary and the Czech Republic each reflect $587,000 in reprogrammed excess CE defense loan subsidy funds. An     
  additional $18.24 million in subsidies may also be available.                                                                                         


                                                                          IMET                                                                          
                                                                [In thousands of dollars]                                                               
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          1990       1991       1992       1993       1994       1995       1996       1997      Total  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    CENTRAL EUROPE                                                                                                                      
                                                                                                                                                        
Albania..............................................  .........  .........        128        172        165        226        432        666      1,789
Bulgaria.............................................  .........  .........        333        279        300        400        708        903      2,923
Czech Republic \1\...................................  .........        246        648        530        500        500        795        737      3,956
Estonia..............................................  .........  .........         61         88        152        180        386        572      1,439
FYROM................................................  .........  .........  .........  .........  .........        125        249        319        693
Hungary..............................................  .........        250        641        699        700        796      1,034      1,014      5,134
Latvia...............................................  .........  .........         46        113        195        197        388        535      1,474
Lithuania............................................  .........  .........         72        148        150        196        498        523      1,587
Poland...............................................  .........        351      2,095        684        700        747      1,021      1,000      6,598
Romania..............................................  .........  .........  .........        309        312        460        758        922      2,761
Slovakia \1\.........................................  .........  .........  .........        128        296        253        471        621      1,769
Slovenia.............................................  .........  .........  .........         82        113        150        253        400        998
                                                      --------------------------------------------------------------------------------------------------
      Total..........................................  .........        847      4,024      3,232      3,583      4,230      6,993      8,212     31,121
                                                      ==================================================================================================
                         NIS                                                                                                                            
                                                                                                                                                        
Belarus..............................................  .........  .........  .........         97        100         94        279        273        843
Georgia..............................................  .........  .........  .........  .........         63         82        302        312        759
Kazakhstan...........................................  .........  .........  .........        163         90         97        388        389      1,127
Kyrgyzstan...........................................  .........  .........  .........  .........         50         60        231        257        598
Moldova..............................................  .........  .........  .........  .........         57        106        273        268        704
Russia...............................................  .........  .........        132        455        471        413        760        842      3,073
Turkmenistan.........................................  .........  .........  .........  .........         50        118        213        262        643
Ukraine..............................................  .........  .........         77        379        600        707      1,019      1,015      3,797
Uzbekistan...........................................  .........  .........  .........  .........  .........         95        293        286        674
                                                      --------------------------------------------------------------------------------------------------
      Total..........................................  .........  .........        209      1,094      1,481      1,772      3,758      3,904     12,218
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Czech Republic numbers include IMET provided to the unified Czechoslovakia (1991: $246; 1992: $648; and 1993: $61).                                 


                                                                    EDA GRANT OFFERS                                                                    
                                                      [Then-current value, in thousands of dollars]                                                     
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          1990       1991       1992       1993       1994       1995       1996       1997      Total  
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    CENTRAL EUROPE                                                                                                                      
                                                                                                                                                        
Albania..............................................  .........  .........  .........  .........        258        609     33,452        115     34,434
Bulgaria.............................................  .........  .........  .........  .........  .........        453      7,310          6      7,769
Czech Republic.......................................  .........  .........  .........  .........  .........    ( \1\ )  .........  .........    ( \1\ )
Estonia..............................................  .........  .........  .........        466        613        659      8,887      1,343     11,968
FYROM................................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Hungary..............................................  .........  .........  .........      7,142        584    ( \1\ )  .........         84      7,810
Latvia...............................................  .........  .........  .........  .........        221        268     10,062  .........     10,551
Lithuania............................................  .........  .........  .........  .........        168        292      7,135         45      7,640
Poland...............................................  .........  .........  .........  .........        398  .........  .........  .........        398
Romania..............................................  .........  .........  .........  .........  .........      4,337  .........  .........      4,337
Slovakia.............................................  .........  .........  .........  .........  .........         11  .........  .........         11
Slovenia.............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
                                                      --------------------------------------------------------------------------------------------------
      Total..........................................  .........  .........  .........      7,608      2,242      6,629     66,846      1,593     84,918
                                                      ==================================================================================================
                         NIS                                                                                                                            
                                                                                                                                                        
Belarus (See note 1.)................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Georgia..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kazakhstan...........................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Kyrgyzstan...........................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Moldova..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Russia...............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Turkmenistan.........................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Ukraine..............................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
Uzbekistan...........................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
                                                      --------------------------------------------------------------------------------------------------
      Total..........................................  .........  .........  .........  .........  .........  .........  .........  .........  .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Less than $100,000.                                                                                                                                 
                                                                                                                                                        
Note 1: NIS countries become technically eligible for grant EDA in fiscal year 1996; however, Belarus is not eligible for EDA.                          
Note 2: Offers do not necessarily result in actual deliveries. Significantly, Hungary and Bulgaria rejected C-130 offers.                               
Note 3: Large numbers generally represent either C-130 or wartime host nation support equipment.                                                        

                            committee recess

    Chairman Stevens. If there is nothing further, the 
committee will stand in recess.
    [Whereupon, at 12:32 p.m., Tuesday, October 21, the 
committee was recessed, to reconvene at 10 a.m., Wednesday, 
October 22.]


      NORTH ATLANTIC TREATY ORGANIZATION [NATO] ENLARGEMENT COSTS

                              ----------                              


                      WEDNESDAY, OCTOBER 22, 1997

                                       U.S. Senate,
                               Committee on Appropriations,
                                                    Washington, DC.
    The committee met at 10:04 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Domenici, Gorton, Burns, 
Faircloth, Hutchison, Inouye, Bumpers, Lautenberg, and 
Mikulski.

   NATO ENLARGEMENT COSTS AND DEPARTMENT OF DEFENSE READINESS IMPACT

                         DEPARTMENT OF DEFENSE

STATEMENTS OF:
        GEN. HENRY H. SHELTON, CHAIRMAN, JOINT CHIEFS OF STAFF, 
            DEPARTMENT OF THE ARMY
        GEN. WESLEY K. CLARK, COMMANDER IN CHIEF, U.S. EUROPEAN 
            COMMAND, DEPARTMENT OF THE ARMY

                 OPENING STATEMENT OF HON. TED STEVENS

    Chairman Stevens. We appreciate your being with us this 
morning, Generals. We are going to continue now our hearing on 
NATO expansion costs. I do welcome you, General Shelton, as the 
new Chairman of the Joint Chiefs of Staff, and General Clark as 
the Supreme Allied Commander in Europe.
    We had a very interesting hearing yesterday on the policy 
aspects of NATO expansion, and today we would like you, the two 
commanders who face the challenge in implementing this process, 
to help us understand how it will be done. Of course, our 
primary interest is in the funding of this process.
    Within our 5-year funding agreement you will face difficult 
tradeoffs to pay for the costs of expansion, if there are 
additional costs. General Clark, I am sure that you will make 
the process work within NATO and the European Command, and, 
General Shelton, you are now the president and Secretary of 
Defense's principle military advisor for our total global 
aspects of military strategy.
    We have some real concerns. I believe that we cannot accept 
a reduction in the United States presence in Asia, the Pacific, 
and Latin America, in the Middle East as a cost of expanding 
NATO. But I do welcome your views on these matters.
    Your written statements will be included in the record in 
full. I do not know if we are going to be joined by any other 
members this morning. I do welcome my friend, the chairman of 
the Military Construction Subcommittee, Senator Burns, if he 
has comments.

                     STATEMENT OF HON. CONRAD BURNS

    Senator Burns. Thank you, Mr. Chairman. First of all, let 
me congratulate both of you for the fine job that you do for 
this country and especially General Shelton, who just assumed 
this new job. It was a great selection.
    I think the chairman hit the nail on the head when he said 
that we have to deal with not only policy--is it correct policy 
to do so--and the ramifications of that policy further down the 
line and what it does. Where do we want to be in 20 years as 
far as Europe, as far as NATO is concerned, and the position of 
this country?
    I am not saying that we have not looked into the future 20 
years hence, but sometimes we do not all have the same crystal 
balls, and we get different pictures of what might happen.
    We are dealing especially in military construction, where 
we have tried to refocus our money that we spend for our men 
and women in uniform to quality of life--health care centers, 
child care centers, better facilities. And, as you know, we 
have some of our enlisted personnel that their living 
conditions could be better.
    In order to maintain a strictly voluntary army, 
professional army, as it is today, and the best in the world, 
we have an obligation to those people. And when I say that, 
then I have to put a footnote that whenever we take a look at 
expansion, maybe it would make good policy, but do we have the 
ways and means to get where we want to be and still maintain 
the quality of life with a finite figure as far as dollars we 
spend on our military.
    So we have to weigh all of those things, and I am not real 
sure that I am smart enough by myself to get that done. We rely 
heavily on your recommendations and your judgment on what we 
need in order to fulfill the mission of this country after the 
policy is made. So we will be working a lot with you. I am sort 
of trying to put together a trip. We may not get it done but, 
General Clark, we want to come to see you and to take a look 
and sit down in an environment where we can discuss some things 
with regard not only to the European Command but also with NATO 
and your role. We are very much looking forward to that.
    I think the only way we get those things done, we have to 
just sort of sit down in that kind of a setting and work at it.
    So I thank you, Mr. Chairman, for calling these hearings. 
They are very, very important to our committee, who has to make 
some very, very tough decisions and, of course, with Senator 
Stevens, chairman of the full Appropriations Committee, and his 
work in the defense area, making some very, very tough 
decisions with regard to that too.
    So thank you very much.
    Chairman Stevens. Senator Faircloth.

                   STATEMENT OF HON. LAUCH FAIRCLOTH

    Senator Faircloth. Thank you, Mr. Chairman, and thank you 
for being here, Generals.
    There are two things about this NATO expansion proposal 
that do concern me. First, we do not know what it is going to 
cost. The General Accounting Office [GAO] has said that the 
costs could be substantially higher or lower than Department 
estimates. In other words, they have no idea what it is going 
to cost. If we have no idea how much it is going to cost, how 
could we measure if the benefits, if there are any, are worth 
the costs?
    And, second, the Department has based its cost estimate on 
the belief that there is not a significant conventional threat 
in Europe, which there would appear not to be, and presumably 
this means Russia. But what about the nonconventional threats? 
We are going to go ahead and try and strengthen NATO against a 
threat that does not seem to be there, while we are leaving the 
door wide open for missile attacks from rogue nations around 
the world that we would not be prepared for, and NATO would 
have, presumably, no effect on. I see that as a greater threat 
than the lesser, conventional threat.
    Also, I would like to know what is going to be the Russian 
role in NATO and if they are going to be eventually a partner 
of it. I guess my question is, if everything from Vladivostok 
to Calais is in NATO, then why do you need NATO, if the whole 
of Europe and the original enemy, would be in it?
    The administration has been dragging its feet on providing 
a ballistic missile shield for the United States. It has openly 
opposed the Senate's effort to set a date certain for 
establishing a national missile defense. In my opinion, the 
umbrella of security for the United States is at least as 
important as for Poland, Hungary, and Czechoslovakia, and I 
think the issues need to be linked.

                           PREPARED STATEMENT

    Mr. Chairman, I ask that my entire statement be made a part 
of the record, and I look forward to hearing from General 
Shelton and General Clark.
    [The statement follows:]

             Prepared Statement of Senator Lauch Faircloth

    Thank you, Mr. Chairman. Back when there was a Cold War, 
the North Atlantic Treaty Organization was a great success for 
the democracies of Europe that were threatened by an 
unpredictable superpower to the east. There was a danger of a 
ground war in Europe, and through NATO, sufficient protection 
was attained. President Reagan sapped that Soviet threat, yet 
this does not mean that we should be using NATO now as a trade 
or economic alliance.
    We do not know what an expansion of NATO will cost the 
American taxpayers. The General Accounting Office has stated 
that the costs could be ``substantially higher or lower'' than 
the Defense Department's estimates--in other words, we have no 
idea. And if we have no idea, how can we measure whether the 
benefits of expansion, if any, are worth the cost? Certainly, 
we cannot assume that ``larger'' automatically means 
``stronger.'' It also can mean unwieldy, cumbersome, and more 
bureaucratic.
    As much as I want to encourage Poland, the Czech Republic, 
Hungary, and other former Soviet satellites to adopt economic 
policies that will help make their citizens more free, I need 
to be sure that a NATO expansion will not cause the United 
States to take on additional dollar or troop commitments. We 
will need to see our European allies take on a bigger 
commitment in the future because I do not want to create any 
more excuses to send our troops on ``peacekeeping'' missions. 
Misusing our military, as we've seen over the past several 
years, not only wastes U.S. taxpayers' money but degrades the 
image of what used to be known as the world's most feared 
fighting forces.
    The arguments for this expansion claim the benefit of added 
protection for Europe. The Department, however, believes that 
there is not a ``significant conventional threat'' today facing 
Europe, even though one could materialize in the future. So it 
would appear that we would be fortifying our front door against 
a ``conventional'' threat, which does not exist, while we 
continue to leave the back door wide open to a non-conventional 
threat.
    Both our continents are now vulnerable to an attack from 
smaller, terrorist countries that are becoming more and more 
capable of raining down ballistic missiles with nuclear, 
biological, and chemical warheads. This is a greater threat to 
our national interests than an East versus West ground war in 
Europe. In my opinion, the umbrella of security for the U.S. is 
at least as important as it is for Poland, the Czech Republic, 
and Hungary. Consideration for expanding NATO needs to be 
linked with National Missile Defense. This would be a forward-
looking assessment of our whole national security picture.
    I encourage the President to be as supportive of National 
Missile Defense as he is of NATO expansion.

    Chairman Stevens. Thank you. Both your statements will be 
made a part of the record.
    General Shelton, as I said, is the new chairman of the 
Joint Chiefs of Staff. It is not only an honor to have you 
present, but it is your first appearance before our committee. 
We spend a great deal of time with the people who work with 
you, so we are pleased to have you and your staff that is 
behind you and look forward to your views.
    I will tell you that I think your views, the views of you 
two gentlemen, will have more to do with how the members of 
this committee vote than anyone else that will come before it, 
because we do try our best to pursue actions that you think are 
in the best interests of our national defense.
    Thank you very much for coming.
    Senator Faircloth. Mr. Chairman, may I just make a brief 
statement? General Shelton is from North Carolina, the eastern 
part of North Carolina, so we can believe unquestionably what 
he tells us, and his judgment will be beyond reproach.
    Chairman Stevens. My grandmother used to tell me it is easy 
to take a boy from the hills, but the question is whether you 
can take the hills from the boy. Nice to have you here, 
General.
    General Shelton. Thank you, Mr. Chairman.
    Mr. Chairman, distinguished Senators, I am pleased to come 
before you today to speak on the subject of NATO enlargement. 
As you are well aware, NATO has been a cornerstone of our peace 
and security in Europe for almost 50 years. In fact, we will 
celebrate the 50th anniversary in 1999.
    In recent years, the European and international security 
environment has changed, and this change must be tied directly 
to our national security strategy. To be the strong force for 
peace in the future that it has been in the past, NATO is 
examining new concepts and new approaches to keep peace and 
keep pace with a rapidly changing world.
    NATO enlargement, the alliance's initiative to embrace new 
partners, is fundamental to restructuring NATO for a new 
century. Every NATO country shares in the cost, as well as the 
benefits, of membership in the alliance, and that will include 
NATO enlargement.
    Mr. Chairman, the Joint Chiefs and I endorse the 
President's support for this initiative because we are 
convinced that our strategic interests and the interests of our 
European friends and allies are better served with enlargement 
than without it.
    Mr. Chairman, too often in this century we have been called 
upon to intervene in the major conflicts on the European 
continent at a great price to our Nation, in blood and in our 
treasure. We learned the hard way that we can avoid war by 
joining hands with our friends and by extending a hand to 
yesterday's adversaries to turn them into tomorrow's friends. 
In fact, no NATO country has ever been attacked in the nearly 
five decades of NATO's existence.
    We have lived through the most dangerous century in world 
history, and even today in Bosnia we can see the legacy of 
those earlier conflicts. That is why, in my view, we can only 
gain by encouraging deserving nations to join with us in the 
interest of peace. But we must be sure that candidates for NATO 
membership are up to the task.
    From the military perspective, it is important that new 
members bring genuine military capabilities to NATO though 
specific military standards are not required for admission. We 
must ensure that new members are net contributors and not net 
consumers of security.
    They must be able to conduct coordinated operations with 
other NATO members. They must participate fully in the defense 
planning process. And their military forces must reflect the 
shared values of our alliance, particularly the imperative of 
civilian control, which is so central to our democratic 
systems.
    Of course, we do not expect new members right away to 
operate at the same level as members of long standing, nor do 
we expect them to bear alone all the costs associated with 
joining the alliance. That is why I share the view of my NATO 
counterparts, expressed to me during my recent trips to Europe, 
that NATO enlargement must occur in a deliberate way. We must 
carefully and prudently assess the cost of bringing in new 
members, just as we weigh the benefits to us and to NATO as a 
whole.
    Part of that responsibility is to capture the military 
requirements for NATO enlargement as precisely as we can, and 
to provide an accurate basis for our cost estimates. We are 
doing just that.
    As General Clark will tell you in a moment, the major NATO 
commands are currently conducting a comprehensive study of the 
military requirements associated with NATO enlargement. I share 
the view of Secretary Cohen that these requirements must be the 
foundation upon which NATO cost estimates are based. The 
results will be ready soon, but based on what I have seen thus 
far I am confident that the benefits of NATO enlargement, a 
more stable and secure Europe, will far outweigh the financial 
cost we will incur.
    Just as we must assess our costs accurately, we are also 
obligated to apportion them fairly. As Secretary Albright said 
in testimony before your colleagues on the Foreign Relations 
Committee, the United States will insist that our allies pay 
their fair share. And I would note that new members will pay 
the largest share.
    On balance, I am confident that the methodology that we are 
using to project costs is sound. Considering the alternative, 
the prospect of future instability and conflict, I see the 
tradeoff between the projected cost of enlargement and the 
value of a stable Europe as much in our favor.
    I am also encouraged by the military performance of NATO 
candidates in Partnership for Peace events, in military 
operations in the Balkans, and in other operations like Desert 
Storm. If these operations are any guide, they are well on 
their way to achieving levels of military competence and 
professionalism which will enhance NATO.
    And apart from their military value, these cooperative 
ventures suggest a willingness to share the risk of collective 
security that deserves our respect and our support.
    Mr. Chairman, I believe that the choice before us is clear. 
If we are to avoid the tragedies of this century in the next 
one, then we must embrace the lessons that we have learned at 
such great cost to achieve the peace that we owe our children 
and their children. One of those lessons is that peace is based 
on closer ties--politically, economically, and militarily--and 
NATO enlargement serves these ends very well.

                           PREPARED STATEMENT

    Mr. Chairman, thank you for the opportunity to address this 
distinguished committee. I look forward to answering your 
questions shortly, and at this time I would like to turn the 
microphone over to General Clark. Thank you, sir.
    [The statement follows:]

              Prepared Statement of Gen. Henry H. Shelton

    Mr. Chairman, as you are all well aware, NATO has been a 
cornerstone of our national security strategy for almost fifty 
years. In recent years, the European and international security 
environment has changed, and this change must be tied directly 
into our national security strategy. To be the strong force for 
peace in the future that it has been in the past, NATO is 
examining new concepts and new approaches to keep pace with a 
rapidly changing world.
    ``NATO Enlargement''--the Alliance's initiative to embrace 
new partners--is fundamental to restructuring NATO for a new 
century. Every NATO country shares in the costs as well as the 
benefits of membership in the Alliance, and that will include 
NATO Enlargement. The Joint Chiefs and I endorse the 
President's support for this initiative, because we are 
convinced that our strategic interests, and the interests of 
our European friends and allies, are better served with 
Enlargement than without it. Too often in this century, we have 
been called upon to intervene in major conflicts on the 
European continent, at great price to our nation, in blood and 
in treasure. We learned, the hard way, that we can avoid war by 
joining hands with our friends, and extending a hand to 
yesterday's adversaries, to turn them into tomorrow's friends. 
In fact, no NATO country has ever been attacked in the nearly 
five decades of NATO's existence.
    We have lived through the most dangerous century in world 
history, and even today, in Bosnia, we can see the legacy of 
those earlier conflicts. That is why, in my view, we can only 
gain by encouraging deserving nations to join with us in the 
interests of peace. But we must be sure that candidates for 
NATO membership are up to the task.
    From the military perspective, it is important that new 
members bring genuine military capability to NATO, though 
specific military standards are not required for admission. We 
must ensure that new members are ``net contributors'' and not 
``net consumers'' of security. They must be able to conduct 
coordinated operations with other NATO members. They must 
participate fully in the defense planning process. And their 
military forces must reflect the shared values of our Alliance, 
particularly the imperative of civilian control which is so 
central to our democratic systems.
    Of course we do not expect new members, right away, to 
operate at the same levels as members of long standing. Nor do 
we expect them to bear alone all the costs associated with 
joining the Alliance. That is why I share the view of my NATO 
counterparts, expressed to me during two recent visits to 
Europe, that NATO Enlargement must occur in a deliberate way. 
We must carefully and prudently assess the costs of bringing in 
new members, just as we weigh the benefits to us and to NATO as 
a whole. Part of that responsibility is to capture the military 
requirements of NATO Enlargement as precisely as we can, to 
provide an accurate basis for the costing experts. We are doing 
just that.
    As General Clark will tell you in a moment, the major NATO 
commands are currently conducting a comprehensive study of the 
military requirements associated with NATO Enlargement. I share 
the view of Secretary Cohen that these requirements must be the 
foundation upon which NATO cost estimates are based. The 
results will be ready soon, but based on what I have seen so 
far, I am confident that the benefits of NATO Enlargement--a 
more stable and secure Europe--will far outweigh the financial 
costs we incur.
    Just as we must assess our costs accurately, we are also 
obligated to apportion them fairly. As Secretary Albright said 
in testimony before your colleagues on the Foreign Relations 
Committee, the United States will insist that our allies pay 
their fair share. And I would note that new members will pay 
the largest share. On balance, I am confident that the 
methodology we are using to project future costs is sound. 
Considering the alternative, the prospect of future instability 
and conflict, I see the tradeoff between the projected costs of 
Enlargement, and the value of a stable Europe, as very much in 
our favor.
    I am also encouraged by the military performance of NATO 
candidates, in Partnership for Peace events, in military 
operations in the Balkans, and in other operations like Desert 
Storm. If these operations are any guide, they are well on 
their way to achieving levels of military competence and 
professionalism which will enhance NATO. And apart from their 
military value, these cooperative ventures suggest a 
willingness to share the risks of collective security that 
deserves our respect and support.
    Mr. Chairman, I believe that the choice before us is clear. 
If we are to avoid the tragedies of this century in the next 
one, then we must embrace the lessons we learned at such great 
cost, to achieve the peace we owe to our children, and their 
children. One of those lessons is that peace is based on closer 
ties, politically, economically, and militarily--and NATO 
Enlargement serves those ends very well.

    Chairman Stevens. General Clark.
    General Clark. Mr. Chairman, distinguished members of the 
committee, it is a privilege and a pleasure to be here today to 
discuss NATO enlargement.
    I think we are living in a unique period of history. We 
have unique opportunities and we have some unique challenges. 
And NATO enlargement is an appropriate policy to address both 
the opportunities and the challenges.
    As you know, sir, I have two sets of responsibilities, 
first as Supreme Allied Commander, Europe, and in this role my 
staff has been addressing the military requirements of 
enlargement and is supporting NATO headquarters by determining 
military requirements, identifying training needs, and 
conducting operational planning for all missions in Supreme 
Allied Command, Europe.
    In my second hat, I am the Commander in Chief, U.S. forces 
in Europe, and in this role we have been engaged in providing 
U.S. military support and assistance to the three prospective 
new members.

                          Costs of enlargement

    Turning to the costs of enlargement first, it is best to 
group these costs into three categories. The first is the cost 
borne by the new members for their own national security and 
their contributions to the alliance. Although we do not yet 
know the full extent of the defense requirements these 
countries will identify in the force planning process, each 
country has professed its willingness to commit additional 
resources to live up to its obligations.
    My force planners in NATO tell me that their initial 
assessment of the respective countries' force proposals 
indicates that the plans that these nations are developing will 
be appropriate for the strategic circumstances of the 21st 
century.
    Now, the second category of costs are the expenses to be 
borne by the present 16 member nations to enhance their own 
contributions to the alliance in support of accession. We have 
established that fulfilling the existing force goals will fully 
prepare all current members for the strategic requirements 
introduced by NATO enlargement.
    The third category of cost consists of the NATO common-
funded accounts, of which there are two major areas. First is 
the military budget, which covers travel, common operations, 
maintenance, civilian salaries and pensions, training and 
exercises.

                NATO Security Investment Program [NSIP]

    The other account is the NATO Security Investment Program. 
This account totals about $800 million annually, and it 
provides for infrastructure improvements that are required for 
the NATO common missions. Now this is the area most impacted by 
the enlargement decision.
    The requirements for command and control, integrated air 
defense, reinforcement infrastructure, training and exercises, 
and related projects are the subjects of a vigorous study that 
has been taken by my headquarters and will come to me in 
approximately 2 weeks. This will list the requirements but not 
the costs. The study then goes to NATO headquarters, where the 
requirements are costed. And we are pointing up toward having 
this report completed to support the December ministerial 
meeting in Brussels.

                           The new countries

    Mr. Chairman, I would tell you that NATO welcomes the 
military capabilities that Poland, Hungary, and the Czech 
Republic can bring to the alliance. All three nations have 
transitioned their militaries to civilian control under 
democratic political leadership. And although they have 
inventories of predominantly Soviet equipment, they recognize 
the need to modernize.
    As with many other nations, they are downsizing their force 
structures to finance modernization. We have been active with 
all three nations in the Partnership for Peace Program, and 
they have all contributed units to the implementation and 
stabilization forces in Bosnia. Poland and the Czech Republic 
also contributed forces to the gulf war coalition. Hungary has 
served as an invaluable staging area for NATO forces in Bosnia.
    In working with the invited nations, we have learned to 
respect and value their capabilities. All three are moving to 
adopt's NATO's standards and doctrine. Through the Partnership 
for Peace Program and our Bosnian interface we have built a 
solid foundation for interoperability. And I would add that 
during our survey of military facilities in the three new 
nations, we have been very pleasantly surprised by both the 
quantity and the quality of the infrastructure that we saw.
    Our goal is to make the new nations providers of security 
rather than consumers of security as quickly as possible. And 
so even before accession we have been taking active measures to 
assist. Our major NATO commanders have been interfacing with 
the three nations. For example, one of the component commands 
of NATO, AIRCENT, which is the air arm of NATO's central 
region, has been working to develop a graduated and disciplined 
program to improve interoperability with the new nations. 
AIRCENT has prepared an air interoperability handbook. They are 
pursuing an air operation English course. They have supported 
the European regional airspace initiative to develop a common 
air picture, and so forth.
    The United States-European Command has also had significant 
involvement with these new countries. In 1992 we started a 
joint contact team program with Poland. We now have the same in 
Hungary and the Czech Republic. These joint contact teams 
establish numerous programs that help the militaries to 
transform themselves and they also provide key advice and 
access to U.S. support.
    The State partnership program is now in place, which 
matches United States National Guard units from Illinois with 
Poland, from Ohio with Hungary, and from Texas with the Czech 
Republic. All of these activities, as well as bilateral 
security assistance efforts, have accelerated the progress of 
interoperability and reduced the remaining tasks for full 
interoperability with NATO.

                           PREPARED STATEMENT

    Mr. Chairman and Senators, thank you for the opportunity to 
be here this morning. I look forward now to answering your 
questions.
    [The statement follows:]
               Prepared Statement of Gen. Wesley K. Clark

                              INTRODUCTION

    Mr. Chairman, distinguished members of the Committee, it is a 
privilege and a pleasure to be here today to discuss NATO enlargement.
    First, let me note that NATO's decision to enlarge has been a 
political decision, made by all 16 allies together. I agree that it is 
important that we take advantage of the opportunities and address the 
challenges presented by this unique period in history, and NATO is the 
security organization best suited for this purpose. As you know, I have 
two sets of responsibilities, first as Supreme Allied Commander Europe, 
and in this role my staff has been addressing the military requirements 
of enlargement and is supporting NATO HQ by determining military 
requirements, identifying training needs and conducting operational 
planning for all missions in Allied Command Europe. As Commander in 
Chief, U.S. Forces in Europe, I have been engaged in providing U.S. 
military support and assistance to the three prospective new members.

                          COSTS OF ENLARGEMENT

    In considering potential costs of enlargement, it is best to group 
costs into three categories. First is the cost borne by the new members 
for their own national security and contributions to the Alliance. 
Although we do not yet know the full extent of the defense requirements 
these countries will identify, each has professed its willingness to 
commit additional resources to live up to its obligations. As a 
percentage of Gross Domestic Product, Poland is spending 2.2 percent on 
defense, Hungary is increasing to 1.8 percent and the Czech Republic is 
increasing to 2 percent. This compares to the NATO average of 2.2 
percent. Moreover, the projected growth rates of their economies is 
higher than the average for current NATO nations, so the defense 
budgets will become larger in absolute terms. Clearly, the newly 
invited members are willing to bear the cost of their own defense. My 
force planners tell me that their initial assessment of their force 
proposals indicates that these nations' plans will be appropriate for 
the strategic circumstances of the 21st century.
    The second category of cost is expenses borne by the present 16 
member nations to enhance their own contributions to the alliance in 
support of accession. As NATO has adapted from a static defense to 
emphasize more-mobile operational concepts, the operational and 
strategic deployability of forces has been strengthened. As NATO 
enlarges, this characteristic is clearly desirable because it offers an 
alternative to larger permanently stationed forces. These force 
requirements are routinely developed through the NATO force planning 
process and funded by each nation. We have established that fulfilling 
existing force goals will fully prepare all current members for the 
strategic requirements introduced by NATO enlargement.
    The third category of costs consists of the NATO common-funded 
accounts of which there are two major areas: The Military Budget which 
covers travel, common operations and maintenance, civilian salaries and 
pensions, training and exercises, etc. The other account is the NATO 
Security Investment Program or NSIP. This account, approximately $800 
million in size, provides for infrastructure improvements and is the 
area most impacted by enlargement. The NATO Senior Resource Board 
prioritizes and funds projects to be executed from all these common 
accounts. The ongoing accession process will recommend projects 
required to improve infrastructure in the three invited countries to 
meet the minimum military requirement for an Article V response. It is 
this category of costs that will directly impact U.S. and allied 
expenditures for enlargement. National contributions to common funds 
are agreed on at the ministerial level and have remained fairly 
constant over the years. Presently, the U.S. provides about one-fourth 
of the NATO common funds. The requirements for command and control, 
integrated air defense, reinforcement infrastructure, training and 
exercises, and related projects are the subject of a rigorous study 
that will be submitted to me in two weeks. I am confident that we have 
addressed all potential requirements in a comprehensive manner, and 
that NATO's final report based upon our requirements will accurately 
capture costs to NATO through the first decade after enlargement. This 
report is intended to support the December ministerials in Brussels.

                        PLANNING FOR ENLARGEMENT

    Every year, NATO submits a Defense Planning Questionnaire to each 
of its members. This DPQ document is used by each nation to provide a 
self-assessment of its military capabilities and contributions to the 
Alliance. This year, the three newly invited nations have also 
completed the DPQ. Because this is their first effort at this process, 
the SHAPE staff has worked closely with them to produce this detailed 
document. From this information, we are establishing Target Force Goals 
for the invited nations. Their force goals are ``Targets'' for this 
cycle because we recognize that accession does not occur until all 
nations ratify the process with a target of 1999. We are in the middle 
of this process now. NATO and SHAPE force planners have traveled to 
each of the three nations to assess their military capabilities. By the 
spring ministerials, NATO will be able to describe Target Force Goals 
for the new nations.

                  MILITARY CAPABILITIES OF NEW MEMBERS

    We welcome the military capabilities that Poland, Hungary, and the 
Czech Republic bring to the alliance. First and foremost, all three 
nations have transitioned their militaries to civilian control under 
democratic political leadership. Although all have inventories of 
predominantly Soviet equipment, they recognize the need to modernize. 
As with many other nations, they are downsizing their force structures 
to finance modernization. We have been active with all three nations in 
the Partnership for Peace (PfP) program and they have all contributed 
units to the Implementation and Stabilization Forces in Bosnia. Poland 
and the Czech Republic also contributed forces to the Gulf War 
Coalition. Hungary has served as an invaluable staging area for NATO 
forces in Bosnia. In working with the invited nations, we have learned 
to respect and value their capabilities. All three are moving to adopt 
NATO standards and doctrine. Through the Partnership for Peace Program 
and our Bosnian interface, we have built a solid foundation for 
interoperability. During our survey of military facilities in the three 
new nations, we have been pleasantly surprised by both the quantity and 
quality of the infrastructure we saw. Let me expand on what they have 
found.

                                 POLAND

    By far the largest of the three, Poland's military is downsizing 
from 214,000 to 180,000 troops. They have 1,700 tanks, 1,400 Armoured 
Combat Vehicles (ACV's), 340 fighter aircraft, and a modest navy. At 
the recent ministerials in Maastricht, their Defense Minister pointed 
out that NATO membership is broadly supported in Poland by all 
political parties and 90 percent of the population. Key priorities are 
to enhance interoperability with NATO forces with modernization of 
equipment, starting with command and control elements and education in 
the English language and professional military courses. They have 
developed a fifteen-year plan to upgrade their military and are 
financing it with 2.2 percent of their GDP allocated toward defense. 
Our survey team was especially impressed with the infrastructure 
located in the Malbork area which featured a superb airfield, expansive 
training complex, extensive rail support to both and proximity to 
Baltic ports. This could prove to be an excellent NATO training complex 
comparable to Grafenwohr, Bergen, or Irwin.

                                HUNGARY

    Hungary has 67,000 troops, 800 tanks, 1,300 ACV's and 150 fighter 
aircraft. They are weaning themselves from conscription and developing 
a professional corps of non-commissioned officers. At Maastricht, their 
Defense Minister said that Hungary recognizes its requirement to 
finance its proper share for NATO membership. They are prepared to 
commit the bulk of their forces to the common defense and are ready to 
participate in other Alliance missions such as peace keeping and 
humanitarian operations. Hungary is initiating a comprehensive defense 
review in 1998 to posture its military to fully integrate into the NATO 
structure. They are emphasizing inter-operability, especially in 
command and control, air defense and air control. The government has 
pledged to raise their defense expenditures by 0.1 percent of their GDP 
annually until 2001 when they will be spending 1.81 percent of GDP on 
defense. Hungary's NATO accession is supported by all political parties 
and they have launched a campaign to increase public awareness and 
support. Hungary has already demonstrated its ability to support major 
NATO force projections. Taborfalva and Taszar, the bases that supported 
IFOR and SFOR deployments have been used by thousands of NATO troops.

                             CZECH REPUBLIC

    The Czech military has 65,000 troops, 950 tanks, 1,360 ACV's and 
140 fighter aircraft. They committed to the challenge of meeting NATO 
standards. Their Defense Minister has identified the priority areas 
that they need to fix such as increasing the budget, defense planning 
and interoperability. Despite funding recovery from devastating floods, 
they are increasing their defense budget and by the year 2000 will be 
spending 2 percent of their GDP on defense. They have formed a high-
level committee to address integration issues, chaired by the Prime 
Minister. They have pledged 90 percent of their forces to NATO's use 
and are aggressively pursuing language training, interoperability of 
air defense as well as command and control functions. They have 
recognized the need to build public support for NATO integration and 
are working a media campaign to inform the public. We can in fact see 
the momentum building in the Czech Republic, as evidenced by their 
energetic efforts to bring communication and information systems up to 
NATO standards even prior to accession.

                          TRAINING/INTEGRATION

    As the SHAPE staff works with NATO in assessing capabilities and 
requirements for the new nations, one area that I have directed them to 
examine closely is the area of training. Although we have a solid 
record of combined operations and exercises with the three nations, we 
have not fully exploited the capacity of structured command training to 
teach and reinforce NATO doctrine and standards, particularly 
leadership and decision making. We have found it very successful in 
economically training our own forces, and I think it will have a direct 
application to rapidly enhancing the interoperability of our NATO 
allies. My goal is to make the new nations providers of security rather 
than consumers of security as quickly as possible.
    Let me share how some of our major NATO Commands have been 
interfacing with the three new nations. From an air perspective one of 
my components, AIRCENT, the air arm of NATO's Central Region, has been 
interfacing with the Air Forces of the three new nations. Because 
flying safety demands close cooperation of all users, AIRCENT has 
developed a graduated and disciplined program to address 
interoperability with the new nations. They have prepared an Air 
Interoperability Handbook with separate sections on Flight Safety, Air 
Defense, Logistics, Air Refueling, etc. They are also pursuing an Air 
Operation English Course to supplement basic English courses. They have 
supported the European ``Regional Airspace Initiative'' to provide a 
common picture of air traffic in the region, with standardized command 
and control. This air picture will be exportable to NATO air command 
and control centers throughout Europe. All three invited nations have 
fully subscribed to this initiative.
    On the ground, LANDCENT is even further along with respect to 
integration due to their long cooperative experience in Bosnia. Forces 
from Poland, Hungary and the Czech Republic have been full participants 
in both IFOR and SFOR. The Poles have been key players in the Nord-Pol 
Brigade where English is the language of command. The Czechs have been 
full partners with the Canadians and British. The Hungarian engineer 
battalion has been so useful and effective, our force planners are 
requesting that Hungary provide it permanently to NATO's Rapid Reaction 
Force. There remains a lot of work to be done of course, but the 
combination of Partnership for Peace and Balkan Peacekeeping have 
already welded a great deal of ground cooperation with the newly 
invited countries.
    From a maritime perspective, only Poland has a navy, so less 
integration is required than in the above cases. Poland has been active 
in PfP naval activities and has successfully accomplished a number of 
exercises with NATO, particularly with their German and Danish 
counterparts.
    These examples demonstrate the range of activities we are pursuing 
to enhance our present activities with partner nations and when 
political guidance is received, to rapidly integrate the new nations. 
These initiatives serve to invest first ``between the ears'' rather 
than for additional hardware.
    The U.S. European Command also has significant involvement with the 
three new countries. In 1992, we started a Joint Contact Team Program 
with Poland and now have the same in Hungary and the Czech Republic. In 
addition to numerous engagement activities common to all countries in 
the region, EUCOM has intensified the exercise schedule with the three 
invited nations and has increased their opportunity to attend courses 
at the George C. Marshall Center where the role of the military in a 
democracy is emphasized. The State Partnership program matches U.S. 
National Guard units from Illinois with Poland, Ohio with Hungary and 
Texas with the Czech Republic. All of these activities, as well as bi-
lateral security assistance efforts have accelerated the progress of 
interoperability and reduced the remaining tasks for full 
interoperability with NATO.

                               CONCLUSION

    Throughout the remainder of this century and into the next, the 
United States has the historic opportunity to help expand security and 
democracy in Europe. Adapting NATO to the present day realities is the 
most important step we can take toward making this possibility become 
reality. NATO will continue to set the conditions for peace in Europe 
well into the 21st Century, and, as in the past, U.S. leadership will 
remain key to success. Any assessment of costs should include the 
potential costs and risks of not taking advantage of these rare 
circumstances.
    Again, I appreciate the opportunity to address the committee and I 
look forward to answering your questions.

    Chairman Stevens. General Clark, when is that meeting in 
Brussels that you mentioned?
    General Clark. The NATO ministerials in December will be on 
December 2-4 for the ministers of defense and December 16-17 
for the ministers of foreign affairs.
    Chairman Stevens. It appears we are sort of premature on 
this hearing, then, I think. I apologize for that. I thought we 
were further along in assessing these costs. I think we have to 
handle these hearings from that point of view.
    We will have additional hearings after the first of the 
year. We had intended to listen to some of the people from 
academia at that time. But I think it would be well if we could 
schedule a hearing after you have had time to assess the 
reports that you and General Shelton have mentioned.
    I think it is going to be critical for us to have an 
analysis of these projected costs because of our experience 
with Bosnia. We did hold hearings. We were assured as to costs. 
And we have now seen the costs of Bosnia just literally go off 
the wall. If there is going to be a similar experience within 
the new member countries in terms of assessing what their costs 
will be, I think it will have an enormous impact upon our 
budgetary concepts here in the United States.
    Let me just say this. I made my statement at the beginning, 
and I do want to follow our process here and move it along a 
little faster than we did yesterday. So unless there is severe 
objection, what I am going to do is say each member has 5 
minutes. You may ask questions or make a statement, whatever 
you would like to do, and we will pursue that on the basis of 
the early bird rule.
    I have had my statement, and I turn to Senator Burns.
    Senator Burns. I would yield to my friend from New Mexico. 
I think you have other obligations; is that right, Senator 
Domenici?
    Senator Domenici. I do, and I do not know that I have any 
questions, but I would raise one for the committee and one for 
the generals that I would hope they would look at.
    Chairman Stevens. Senator Burns yields to Senator Domenici.
    Senator Domenici. Yesterday, Generals, we had a hearing in 
the Budget Committee--Senator Lautenberg and I were there and 
then he had to leave to come to the meeting here--and it 
centered around a subject that most Americans are not familiar 
with yet but we will be familiar with soon, and that is the 
European Union countries and the new European monetary union.
    It is in the offing. It will occur prior to enlargement, I 
would assume, at least its first steps. And I would like to 
make sure that you all are looking at what the economic 
commitments, the fiscal commitments, that are going to be 
imposed on the European community, including, by coincidence, 
the three countries that we are closest to saying we should 
bring into NATO. They are all going to have pressures to 
dramatically reduce their deficits.
    A condition to joining that union is a dramatic reduction 
in the annual expenditures of those countries. I think it is 
absolutely necessary that the economic people that help you be 
able to tell us about the implications of that pressure to 
reduce expenditures to get their deficits in line so that they 
can have a unified currency. Mr. Chairman, you cannot imagine 
the changes that are already being made in their budgets just 
in anticipation of joining this union.
    I think we ought to know what is the potential impact of 
that on current members' and future members' ability to meet 
their military commitments. It is most interesting. We are, on 
the one hand, saying we think they are going to have to 
increase their military commitments. On the other hand, they 
are talking about reducing their expenditures that they can 
make to stay within their union.
    I just want to put that on the record. Mr. Chairman, I 
believe if you take a trip, as you plan this issue ought to be 
raised not by the appropriators. We are going to take a trip on 
the Budget Committee to look at this overall European monetary 
situation. We will want to know what does the EMU really mean 
in the future in terms of their ability to meet military 
commitments, when they are being pressured to reduce the amount 
of money they spend in their budgets?
    I thank you for yielding, Senator, and that is all I have 
to say.

                       NATO ministerial meetings

    Chairman Stevens. Well, you make an extremely important 
point, Senator, and I welcome your contribution. I think we 
ought to know before the day is out here what the timeframe is. 
Can you tell us now, General Clark? Is that possible?
    General Clark. As I recall, the first set of meetings is 
the first week of December, and there is another set of 
meetings the third week of December. So I would say by the 17th 
of December all of the NATO meetings should be concluded.
    Chairman Stevens. That would be not only the estimates of 
requirements but the cost of those per country will be analyzed 
at the ministerial?
    General Clark. That is correct, Senator. The common costs 
for both the military budget and the NATO security investment 
program are what will be reported in December.
    Chairman Stevens. Senator Faircloth, you made a statement. 
Do you have any further statement at this time?
    Senator Faircloth. No; I do not.
    Chairman Stevens. Senator Bumpers.
    Senator Bumpers. General Clark perhaps this question would 
be best directed to you. Does NATO have any kind of a doctrine 
for settlement of disputes within the borders of a member? I am 
talking about violent disputes, something close to civil war.
    General Clark. Yes; we do. Of course, one of the reasons 
that people, countries want to be included in NATO is the very 
close consultative process that occurs on a day-by-day basis at 
NATO headquarters amongst Ambassadors, and the twice and three 
times yearly meetings of ministers, key ministers of foreign 
affairs and state.
    This provides the foundation for the resolution of all 
problems. Now, in addition, we have stated that one of the 
preconditions for the invitation of these three countries and 
others who might be interested in joining NATO is that disputes 
with neighbors must be satisfactorily resolved as a 
precondition for joining.
    Senator Bumpers. If I may, that brings me to the next 
question and you can include the answer to that also. Because 
the next question was, do we have a doctrine or do we have 
rules for how NATO will deal with border disputes between 
member nations.
    General Clark. Well, we would settle these in the context 
of the ongoing business of the alliance.
    Senator Bumpers. What does that mean?
    General Clark. There is consultation and dispute resolution 
and problemsolving constantly at work at all levels of the 
alliance. This is done in the military at the major NATO 
command levels. It is done at the international military staff. 
It is done in Brussels at the North Atlantic Council, with 
permanent representatives.
    So whatever issues may arise are dealt with by the standing 
mechanisms of NATO. This is one of the features that 
distinguishes NATO and makes NATO such a robust and effective 
alliance. It provides full-time, integrated consultation on all 
matters affecting security for its members.
    Senator Bumpers. Does NATO have the authority to send 
troops into a civil conflict within one of its member nations?
    General Clark. NATO has a pledge for collective defense, 
that is under article V, and all of the members are committed 
to work together if there is a violation of a border of another 
member. Obviously, diplomatically NATO is going to do 
everything it can to prevent a quarrel arising between members. 
Were that to happen, it would be dealt with in the consultative 
mechanisms and the North Atlantic Council, composed of the 
member nations of NATO, would have to decide the appropriate 
response.

                      Russia and the NATO alliance

    Senator Bumpers. I saw something the other day--I do not 
know where it was, some sort of an intelligence document that 
had been leaked to the press that said, and Russia later on 
said, so what is the big deal--and the document presumably said 
that Russia has already made a determination that they are 
going to move toward a tactical nuclear force and not try to 
rebuild their conventional forces.
    Are you familiar with that story?
    General Clark. Yes, Senator, I am.
    Senator Bumpers. Could you confirm it? Is that the present 
doctrine in Russian military circles?
    General Clark. Well, my understanding of the doctrine is 
that there is no reason for them to try to build the excessive 
military forces that they had when they were the Soviet Union 
and that represented the Warsaw Pact. They do have a large 
inventory of tactical nuclear weapons.
    Now how they would actually use those weapons or threaten 
to use them is not clear, and I do not have any insight on the 
doctrine to that. But I do know that the conventional forces 
are not, as I understand it, projected to grow back to what 
they were previously.
    Senator Bumpers. When you consider 70 years of Soviet-
American relations and the history of the Soviet Union and the 
hostility that existed between the two nations for all of that 
time, we have a little difficulty in this country turning loose 
the cold war mentality, and I am sure that is true in Russia 
too.
    We say that we will never introduce tactical nuclear 
weapons in any nation that joins Russia. If you were the chief 
military guy in Russia, what would you tell President Yelstin? 
Would you accept that just on our word that we would never do 
it? This is not a formal part of NATO's doctrine, is it? And it 
is not a formal part of the agreement to admit Poland, the 
Czech Republic, and Hungary?
    We just simply say do not worry, Russia; we are not going 
to introduce tactical weapons into these three nations. Would 
you be willing to accept that as the chief military advisor in 
Russia?
    General Clark. Senator, I think that the Russian military 
advisors have to be realistic enough to appreciate the fact 
that the security environment is dynamic, and at the present 
time NATO has stated it has no reason and has no intent to 
introduce any nuclear weapons into the territories of these 
prospective new members.
    And should the relationships continue to improve, as they 
have in the past, I would think that would be a very sound 
assumption for the Russian military to continue to rely on.
    General Shelton. If I might add, Senator, the Founding Act, 
a part of the NATO expansion plan, itself, along with the 
Permanent Joint Military Council provides two other high-level 
forums within which they could express any reservations or any 
concerns they had about NATO's plans. But, to second what 
General Clark says, no plan, no intent, no reason to introduce 
these weapons into the new members.
    Senator Bumpers. I see my time is up. Thank you.
    Chairman Stevens. Senator Faircloth, do you have a 
question?
    Senator Faircloth. Yes, I do. My question would be, General 
Clark, where does Russia fit into this expansion of NATO? Is 
there a potential to bring Russia into NATO? Is that not being 
considered?
    General Clark. Well, from NATO's perspective, Senator, we 
have said that the alliance is open to new members, and no 
nation is excluded from the consideration that it could someday 
want to become a new member.
    Now, Russia has said thus far, as I understand it, that 
they do not intend to become a new member. But I would also 
note that they are working very closely with us. As you may 
know, I have a Russian deputy at NATO, a deputy for Russian 
forces that are engaged with us and working with us on the 
ground in Bosnia. In Bosnia there is a Russian airborne brigade 
with two battalions and a brigade headquarters, with a very 
fine Russian colonel there.
    And I give orders through my Russian deputy to this Russian 
brigade. So they are involved very closely with us in 
peacekeeping. They want to expand and deepen this relationship. 
And they want the partnership to go well beyond what is 
currently in place on the ground in Bosnia.
    So I have hopes that we can expand and deepen the 
relationship with Russia.
    Senator Faircloth. Thank you.
    Chairman Stevens. Senator Mikulski.
    Senator Mikulski. Thank you very much, Mr. Chairman. I 
would like first to welcome you, General Shelton. We have not 
yet had a chance to become acquainted, but I really want to 
give you my enthusiastic congratulations as the Chairman of the 
Joint Chiefs and look forward to working with you on many 
issues facing the military.
    General Shelton. Thank you, Senator.
    Senator Mikulski. And, of course, a very cordial welcome to 
you, General Clark.
    General Clark. Thank you.

                        Personnel and the threat

    Senator Mikulski. My question goes to--I have two areas of 
questioning--one, personnel, and then the other what threat are 
we dealing with. Know that I am a supporter of NATO expansion, 
an enthusiastic supporter. And while we are looking at the cost 
let me go to the personnel issues, not our personnel but their 
personnel in the three countries.
    As I understand it, while we are looking at cost I am also 
looking at benefit. I understand that as part of the 
requirement to join NATO the new nations joining NATO must have 
a military capability among their officer corps to speak 
English. Am I correct in that?
    General Clark. That is correct.
    Senator Mikulski. What is the nature of that? Does that 
mean five generals per country? Does it mean that the ability 
to speak English goes through the entire ranks? If so, how do 
they learn English and what do you think would be the impact of 
a whole new generation of Poles, Hungarians, and Czechs with an 
incredible ability to speak English, who are part of an officer 
corps, both as officers and then when they go to civilian life?
    Could you elaborate on that? Like how many will have to 
speak English? Who is going to train them? And what do you 
think will be the impact not only in the military but the 
future nature of that in those countries? And who is going to 
pay the cost of that teaching?
    General Shelton. First of all, just to give you the facts, 
Senator, right up front, it varies between the new member 
nations right now. From Hungary there are already roughly 10 
percent of the officers that speak the NATO language, 7 percent 
in Poland, and 2 percent in the Czech Republic.
    There is a program underway, and I will let General Clark 
address that.
    General Clark. For some time we have had a variety of 
efforts to improve the NATO interoperability, including the 
ability to speak English. One of these programs is at the 
Marshall Center, where we bring officers in from these three 
countries, they study English, they participate in the defense 
studies. We also have sponsored the development of language 
laboratories for these officers in their own countries. Other 
nations--Germany and England and The Netherlands--are also 
sponsoring training in English language for the officers for 
these countries.
    So there is a broad array of programs underway, some 
financed directly by the United States, others financed by our 
allies, to help prepare these officers.
    Senator Mikulski. Do you have a goal on what percentage of 
the officers will be speaking English? Is it 15 percent, 20 
percent?
    General Clark. To the best of my knowledge, we have not 
established a numerical goal. But clearly there is a practice 
standard at work. Their forces have to be able to interoperate 
with ours. And the principal language for operations is 
English, and this is the language that is being used primarily 
in Bosnia today, and this is the experience that these 
countries are drawing from, from their participation there.
    Senator Mikulski. Do you anticipate that this really 
profound educational effort that is going on for really a whole 
group of military personnel of all ages and all officer corps 
levels, do you think that has an impact on building democratic 
institutions in those countries and ties to the United States 
of America that outweigh the benefits of only interoperability, 
which, of course, is the reason for doing this?
    General Clark. Absolutely.
    Senator Mikulski. General Shelton, did you want to 
elaborate?
    General Shelton. Very clearly, Senator, I think that is one 
of the great side benefits, so to speak, that comes out of 
this. And I might add opening up the communications, the 
ability to consult, the ability to talk to their counterparts 
when operating together all adds to building democratic and not 
only democratic but shared values in a lot of areas.
    Senator Mikulski. Do you also feel that one of the other 
dynamics is that by interacting with NATO democracies they have 
a clearer understanding of what it is to be military operating 
under parliamentary democracies, which further democratizes the 
military in these new countries?
    General Shelton. Very clearly, and not only just in NATO 
but throughout the world where our forces operate. One of the 
benefits and one of the things that we try to inculcate in the 
forces that we operate with are democratic principles--civilian 
control of the military as an example. We try to teach our 
partners, our military counterparts how we operate and how the 
civilian control of the military works.
    And that is true not only in NATO but down in South 
America, in the Pacific, et cetera.
    Senator Mikulski. Mr. Chairman, I know my time is up. Let 
me just say a few things to you and to some of the members.
    When I had the opportunity to travel, particularly with the 
Pacific dialog with Senator Glenn, Senator Cohen, and Senator 
Nunn, when we went to countries like Malaysia and Thailand they 
were so eager to be involved with our military, not only 
because we had the best technology, not only because we had 
brilliant tactics, but also our code of conduct, that the 
military embraced a code of conduct under a civilian head of a 
military and it was for their officer corps to see what it was 
like to be part of democratic militaries.
    Now, as they convert from a comrade military, though they 
never really embraced them in their heart and soul, this then 
is a whole other benefit which I think, when you have a 
military that is working with democratic military, because what 
has always been the tool of instability has been who controls 
the military and who controls the military's mind.
    So here it is reinforcing a democratic state of mind. I 
also believe that the cost of English is a benefit that will 
accrue both in terms of democratic institutions, but even in 
terms of our economy. So when we analyze the cost, we use the 
term ``collateral benefits,'' but I think these collateral 
benefits are going to be part of the intrinsic benefits.
    I share those thoughts with my colleagues just as they are 
analyzing this. General Shelton, thank you, and, General Clark, 
thank you.
    General Shelton. Thank you, Senator.
    Chairman Stevens. Thank you. Senator Burns.
    Senator Burns. Senator Mikulski brought up saying we are 
going to start establishing a democratic military, and I almost 
had a heart attack. I made corporal in the U.S. Marine Corps, 
and I did not see anything democratic about that. [Laughter.]
    We never did get to take a vote.
    Senator Bumpers. I am a former marine, and that is the only 
mistake I can ever remember the Marine Corps making--making you 
a corporal. [Laughter.]
    Senator Burns. I would have made sergeant, but I think 
there was a ship tied up at White Beach--well, that had quite a 
lot to do with a lot of things back in those days.
    But, anyway, thank you. I am not real sure that Senator 
Bumpers, for those of you who may not know, may have had a hand 
in getting General Clark into the military academy, he has been 
around here that long. He has been around as long as dirt. 
[Laughter.]
    General, I think all of us who live in the political 
arena--and I direct this to either one of you but principally 
to General Clark--I want to pick up on what Senator Domenici 
raised, I think a bona fide question that maybe we should 
consider here, with the expansion of the EU and what they are 
doing with their budgets, and also knowing of your expertise or 
somewhat expertise in political science and your interest in 
that--and I think you are a man in the right place probably at 
the right time to understand some of these things.
    But also, we have to go back home and we have to justify 
what we are doing to our own constituents. And I know with me 
we put $156 million into the NATO Security Investment Program 
this time so far as military construction is concerned. My 
question with our expansion to the three, how that impacts that 
particular line and can we do that plus fulfill our obligations 
like Aviano and some things that we have to do in other areas 
that are sort of beyond the planning stages and ready to put 
into effect.
    Can you give me an overall on what impact that will have, 
because we are dealing with finite numbers?

                         Military construction

    General Clark. Senator, it is my understanding that once we 
develop requirements, those requirements will go up to Brussels 
for costing. And the NATO staff up there will look at the cost 
of the requirements--whether it is airfield improvement or 
whatever else. And this is something that will have to be dealt 
with by the NATO military committees that work these issues.
    So at this point I do not know what the magnitude of the 
requirements will be and how they will impact on the existing 
funding programs. But we have made very clear from the outset 
that there were going to be costs associated with NATO 
expansion and the job of my staff is to come up with good solid 
military requirements that will assure that we can meet our 
article V commitments when we bring these countries in.
    Senator Burns. I may have to agree with the chairman this 
morning. Maybe this hearing and maybe our asking those kinds of 
questions is premature until after your meetings in December. 
Is that a correct assumption?
    General Clark. For that particular level of detail, it is, 
sir.
    Senator Burns. Whenever we talk about mission expansion, we 
understand that the cost of the Bosnian situation is starting 
to become critical and brings on quite a lot of concern on this 
committee and the rest of the Congress. People, when I talk--I 
was down to a stock show, of all things, but they still are 
concerned about mission creep in Bosnia and what our role is 
there, that SFOR may be turning into EFOR, and they are 
concerned about that.
    So I think most of my questions, Mr. Chairman, are really 
basically on my end of it could be premature to December, but I 
wanted to make that point, and maybe even our trip over there 
might even be put off until after the first of the year, 
whenever we can talk about more things that we have on the 
table and we will have more to talk about.
    That may be a distinct possibility also. But I thank you 
and my time is up.
    Chairman Stevens. Senator Lautenberg.
    Senator Lautenberg. Thanks, Mr. Chairman. I too, General 
Shelton, add my congratulations to you and wish you well in 
your very important assignment.
    General Shelton. Thank you, Senator.
    Senator Lautenberg. Of course, General Clark, the same goes 
to you, but I think that is a more recent action.
    General Clark. Thank you, sir.
    Senator Lautenberg. I have a couple of questions. First of 
all, let me say at the outset my inclination is to support NATO 
expansion, but there are things I feel I must know to be able 
to communicate my views as to why I support it. The costs are a 
significant factor. Of course, our security is the most 
important factor.
    Now we have seen various cost estimates. The administration 
has one, CBO has one, RAND Corp. has another. Does the Defense 
Department have one of its own?
    General Shelton. Senator, we do, in fact, have one, 
although I would tell you up front the estimate was done before 
the final three prospective new members were decided. But the 
Department's estimate that you have heard several times or seen 
in the press, I am sure, runs about $150 to $200 million per 
year.
    This again--how much it costs and the reason you see such a 
disparity in the estimates between CBO, RAND, and DOD is based 
on the assumptions that you make about the threat. It is based 
on how quickly you plan to ramp up the three prospective new 
members to a full capability. And this can have a tremendous 
impact.
    For example, in the CBO study their threat saw a resurgence 
of the Soviet Union and a necessity to ramp up the three new 
member nations very rapidly. The DOD study, on the other hand, 
looks at what has been confirmed by the GAO as a realistic 
threat--the same one basically that we used for the QDR--which 
did not see a resurgence of the Soviet Union but looked at what 
we think is the threat going out to about 2015 and viewed a 
more gradual ramping up of the prospective new members vice 
trying to do it overnight.
    Senator Lautenberg. Well, just as a footnote here, the 
response of our longtime friends and allies about paying for 
the costs of expansion hardly seems enthusiastic. The United 
Kingdom says America's cost estimates are $27 to $35 billion, 
too high by about 40 percent. France says that NATO expansion 
can be managed by reallocating funds and that it intends to pay 
nothing extra. Germany says that they want to see a realistic 
calculation of costs, not one that is based on the cold war.
    So the cost issue is significant, and I think we are going 
to have to get something more specific about costs and 
burdensharing to hang our hat on before we move forward.
    Secretary Albright has said that theoretically Russia would 
be able to join NATO if it meets the criteria. So far Russia 
has indicated that they do not want to be a part of NATO.
    Is including Russia as a full-fledged member a good or a 
bad idea? Do either of you have a view on that?

                      The Russians and instability

    General Shelton. Senator, I would say from my perspective 
that having an open process, as we have, that allows any member 
in Europe to apply for admission is the right answer. Again, to 
my knowledge, the Russians have not expressed any interest in 
becoming a part of NATO.
    But I think, on the other hand, it would be a mistake to 
say that you are excluded from ever being able to become a 
member of NATO at this point.
    Senator Lautenberg. Then I would like to carry this 
further. If we bring into NATO those in Eastern Europe, who 
want to be members, it may be good for our security. It may be 
good for our relationships.
    Of course, they have to pass all the tests, including the 
readiness test as well as the financial test. But if we are 
going to bring new members into NATO and we have got the full-
fledged membership going even beyond the three, because 
everyone feels that three would be an invitation to others and 
certainly the door is not going to be closed if they qualify--
we need to know more about the threat. Where is the threat? 
Where does it come from?
    General Shelton. I think I will take it first, Wes. First 
of all, I see potentially three threats. First is the 
instability inside Europe itself, and we have seen that in 
Bosnia, in which we are participating right now. We have 
threats from the outside, outside being represented by 
transnational threats, by weapons of mass destruction, 
terrorism. And then finally, as some have postulated, a revival 
of a Russian threat.
    So there are three threats potentially that we have to 
watch for.
    Senator Lautenberg. But the door is not closed to Russia. 
Senator Bumpers talked about their tactical nuclear forces 
would get their principal investment. I cannot imagine that 
those weapons are being developed to take care of Chechnya or 
what have you. So is that a signal of some kind that says OK, 
if we have to go to war, we know that we have got to be able to 
carry this thing pretty far off our boundaries, and with 
weapons of mass destruction.
    What does that tell us? What is the possibility there? What 
is their inclination?
    General Clark. First of all, Senator, I am not sure that 
anybody has said--and certainly we do not have any evidence to 
indicate, that I am aware of--that their tactical nuclear 
weapons will get the majority of their investment. It is my 
understanding these weapons are the leftovers. This is what 
happened. They are not covered under the strategic arms 
reduction talks, and they were more or less left over.
    The conventional forces have rapidly come down in size. 
What is left are these nuclear weapons. There has been talk 
repeatedly that maybe this could form the basis for giving 
Russia a sense of protection from other threats that would mean 
they would not have to rebuild large conventional forces.
    So I think that there is substantial, still substantial 
uncertainty in where Russia is going. I think we can very much 
shape the direction that Russia perceives its threats and where 
Russia may want to go with its defense programs.
    Senator Lautenberg. Thank you very much. Thank you, Mr. 
Chairman.
    Chairman Stevens. Thank you very much.
    Senator Hutchison.
    Senator Hutchison. Thank you, Mr. Chairman.
    I too want to welcome General Shelton for your first 
appearance here at the Appropriations Committee.
    General Shelton. Thank you, Senator.
    Senator Hutchison. And I want to thank General Clark for 
going with me on my last trip to Bosnia. It was very helpful to 
see the changes in Bosnia. I think my first trip was with 
Senator Stevens, and I have been there four times, and I think 
the ability to see it on the ground is essential to really 
begin to have an opinion on the policies.
    I have a question for each of you, and I am going to first 
talk to General Clark and ask you to comment on information 
that was given to us yesterday from Secretary Cohen. He roughly 
laid out the parameters of the administration's view of the 
cost of expansion at about $35 billion, and he allocated that 
at about $10 to $12 billion for the general NATO expansion, of 
which we would pay our part, roughly $2 billion, then 
approximately $10 billion for the new members to beef up their 
operations and come in, and then the third part was $10 to $12 
billion for our present European allies to upgrade their own 
rapid deployment capabilities.
    Now, lay that on top of the fact that at least France and 
Germany have said they are not going to increase their defense 
expenditures. Do you see that they will spend that $10 billion 
that does not come out of our part for their rapid deployment 
capabilities, and if they do what they say they are going to 
do, which is not increase their share, who is going to make up 
that difference or what will have to be done to accommodate 
this shortfall?

                          Allied contributions

    General Clark. Senator, I do not have any independent means 
of validating the DOD cost study for what the shortfalls are 
for our other alliance members. So I am not able to say whether 
it is $10 billion, $5 billion or what. We just do not operate 
it that way inside NATO.
    What we have seen, though, is some very, very encouraging 
responses since 1992 by our NATO allies to the new strategic 
concept for the alliance. If you permit me, I would just like 
to cover some of those because I do not think they have 
received very much notice in the United States.
    The United Kingdom has a joint rapid deployment force. It 
has built a new headquarters. It is procuring 100 new attack 
and support helicopters. It is purchasing 25 new C-130's, 2 RO/
RO ships, and 2 amphibious assault ships.
    Germany is creating a rapid reaction force that will be a 
joint unit with 53,000 troops that should reach its operational 
capability in 1998. And I could go on through the list.
    The force planning process that NATO uses is very effective 
and it has been met with very good response. So on balance we 
are encouraged that we are going to be able to meet the 
strategic requirements that are facing the alliance and that 
will continue to face us after the accession of the new 
members.
    General Shelton. Senator, if I could add onto that, we also 
are seeing that of the common-funded areas today 75 percent of 
our partners in NATO are paying their share right now. I do not 
believe, like you, everything I read in the newspapers, and 
that is where I have heard or read some of the statements made 
about not paying.
    I can tell you that in meeting over in Maastricht along 
with the meetings that I had on the second trip to Europe just 
recently that I have heard in those particular forums three 
things. No. 1 is they all realize there will be costs 
associated with this. They also understand that the cost, as it 
appears right now, based on the studies that have been done by 
us as well as the way it appears to be going within NATO now, 
that they will be manageable costs, and they all understand the 
costs will have to be paid if we are to expand.
    Senator Hutchison. Well, my time is almost up, so I cannot 
follow up on that, because I want to ask you, as the Chairman 
of the Joint Chiefs, the person who will be setting the 
priorities, you stated some of the other threats that we are 
facing outside of Europe, and you are going to have to 
establish the priorities.
    I am concerned when I see the President vetoing military 
construction in America that is operational support, 300 
million dollars' worth, while at the same time he signed the 
exact same types of projects for NATO, to the cost of $150 
million. I have to ask if our priorities are going to be set so 
that all of the threats that we are being faced with, that you 
have already outlined and which we could go into more detail on 
if we had time, are you going to be able to look at all of that 
and put NATO in context for the threat and the potential 
reaction to those threats when the time comes?
    General Shelton. Senator, I can assure you that from my 
perspective as the Chairman there is absolutely nothing that 
has any higher priority than our readiness accounts, our 
modernization accounts, and our quality of life accounts. But 
as I look at the cost of the current estimate that DOD has done 
and make an assumption that this is somewhere in the ballpark 
of what will come out of NATO, these costs are less than one-
tenth of 1 percent of DOD's budget, and what we gain from that 
in terms of the NATO collective security, the alliance, I think 
fully justifies that type of an expenditure.
    Senator Hutchison. Thank you.
    Chairman Stevens. Senator Inouye.
    Senator Inouye. Thank you very much, Mr. Chairman.
    Before proceeding, I wish to add my congratulations to you, 
General Shelton.
    General Shelton. Thank you very much, Senator.
    Senator Inouye. The chairman, in issuing this call for the 
meeting, entitled the subject to ``NATO Enlargement Costs and 
DOD Readiness Impacts.'' The chairman and I have been very 
concerned about the readiness of our forces, so I will ask a 
general question.
    Will the additional NATO enlargement costs have any direct 
impact upon the readiness of our forces?
    General Shelton. Senator, from my perspective, as we 
currently speak in the DOD budget, starting in fiscal year 
2000, we have built into that budget, into the POM, $100 
million, increasing up to $200 million by 2003. That was done 
as a part of the QDR process, with a vision toward NATO 
enlargement occurring or expansion occurring.
    Again, O&M, quality of life, modernization are of the 
utmost importance to us, without a doubt, but for this price, 
less than one-tenth of 1 percent, I think it is worth what we 
pay for it for what we get out of it.
    Senator Inouye. It is not any weakening of our readiness 
level?
    General Shelton. To the contrary, as I would see it, the 
collective security arrangements that come out of this, long 
term for the United States, really put us in great shape 
compared to what it costs us, even though that cost occurs 
early on and continues.
    Senator Inouye. I realize, General, that in discussing 
threats we must make guesstimates, at best. Prior to World War 
I, no one suggested that an assassination in Bosnia would cause 
World War I. I think all of us will admit now, we were woefully 
unprepared for World War II. In fact, we are lucky that we were 
given the opportunity to build up our forces.
    In the Korean conflict, once again we sent a very bad 
message to the world that we were not ready for anything. So 
there are some of us here who have seen war and who have seen 
blood and believe that the best way to prevent war is to be 
ready for war. Are we ready for war?
    General Shelton. From my assessment as Chairman, the answer 
is unequivocally yes. Do we have some challenges within some of 
our accounts right now, again the answer to that question is 
yes. But we are well prepared today. We have a trained and 
ready force. And I do not see the long-term cost associated 
with NATO expansion as being detrimental to our readiness.
    Senator Inouye. Do you think that involvement in NATO would 
enhance our readiness?
    General Shelton. It would enhance our security, readiness 
being a little different from security. The requirement to have 
to use our forces I think would be reduced by having an 
expanded or enlarged NATO.
    The readiness per se, if we looked at it in a purely 
hypothetical manner and say every penny that we get our hands 
on will go directly into either another exercise or operation 
or modernization or building more barracks, then you could 
argue that every dollar you take away from that will result in 
less of one of the three things that I have said are extremely 
important to us.
    But in a larger context reducing the requirements to have 
to use these forces I think are extremely important to us as 
well. And I put this in that context, that this reduces the 
possibility that we would have to use the forces that we want 
to keep trained and ready.
    Senator Inouye. As our Nation's No. 1 military leader, you 
are in favor of NATO enlargement.
    General Shelton. Yes, sir, I am.
    Senator Inouye. Thank you, sir.
    Chairman Stevens. Generals, I keep looking at costs and 
wondering where we are going to get the money for our own 
modernization programs, and I came across one yesterday after 
the hearing. I want to direct your attention to the ground 
surveillance statement, the joint surveillance target attack 
radar system, Joint STARS.

                              Joint STARS

    Now Senator Inouye and I had visited that here when it was 
a testbed, and then we found it when we went over to Desert 
Storm and we were there the night they brought it in. It was 
still a testbed but we made it operational right then at the 
time. You all did; we did not.
    We offered Joint STARS to NATO, a package of six aircraft 
and ground equipment, for $3 billion to meet the advanced 
ground surveillance [AGS] system requirements of NATO. That was 
scaled back to four aircraft and common ground equipment based 
on a lack of support from Britain, France, and Germany.
    Now we have a new proposal that we have offered at $2.14 
billion for four aircraft, and we will pay 49.5 percent of that 
cost to NATO. I think this sort of begs the question for many 
of us. We paid the cost of developing that, and now we are 
going to pay more than $1 billion to make it available to NATO. 
We seem to pay on both ends.
    And yet we are still meeting opposition from our NATO 
allies with the proposal. Instead, I understand they are going 
to independently develop systems to meet the NATO AGS 
requirement.
    Now is there not a message there for us in terms of paying 
and paying and paying? We develop a system. Certainly they can 
replicate it. There is no question about that. And we will have 
to pay for what they replicate when we pay our cost to the NATO 
acquisition eventually, will we not, General? And that will be 
the way it comes, if they adopt another system, a competing 
system to what we have already developed and proved to the 
world, we will pay for that too.
    Is that not right?
    General Clark. Senator, there is no question about it, that 
when you are looking at defense procurement there is hot 
competition between various manufacturers, and when those 
manufacturers are in different nations, then the competition is 
even more intense.
    Chairman Stevens. I understand that, General. What I am 
saying is this committee will review and pay for the cost. We 
have already paid for JSTARS, but if NATO, where you are, 
decides to take the European version, we will pay almost 50 
percent of that too. Now I am beginning to question our 
involvement in NATO in terms of the fact that the United States 
continues to pay the bulk of the costs no matter where it goes.
    We are paying more than anybody else in Bosnia. We are 
paying more than anybody else right now to support NATO. Why 
should we continue to do this?
    General Clark. These are the shares that generally have 
been assessed based on relative gross national products of the 
partners, and that has been used as the basis upon which shares 
were developed. So we typically pay about 28 percent of the 
infrastructure cost, and it depends on what program it is as to 
what our share is.
    But that is the basic method for assessment.
    Chairman Stevens. Well, I quit going to the NATO assembly 
because for year after year after year I asked them to review 
that, but we continue to pay the same amount that we did 15, 20 
years ago. Are we going to get a new allocation if NATO is 
enlarged? Will our costs come down?
    General Clark. I need to get you an answer for the record 
on that, Senator. It is my understanding that there will be a 
reallocation, but I have not heard anything definitive on that.
    [The information follows:]

    Yes. The U.S. percentage cost shares in the three NATO 
common funded budgets (National Security Investment Program 
(NSIP), Military and Civil Budgets), along with the cost shares 
of all other existing NATO members, will be reduced 
proportionally based on the added participation of the three 
new members. If the budgets are maintained at their current 
levels, then the U.S. and other existing members will pay less 
than they do now. However, budget levels may be increased to 
pay for the cost of enlargement, in which case the U.S., while 
paying a lower percentage, may actually pay a greater amount of 
funds.

    Chairman Stevens. Well, when we were new Senators I 
remember listening on the floor to Senator Mansfield, and I 
went over and sat and listened to him because Senator Jackson 
and I had great regard for him, and yet here he was, saying we 
should bring our forces back from Europe at that time. And I 
think we voted against--I know we did--against Senator 
Mansfield.

                          U.S. force reduction

    Now we have a situation, as I asked Senator Cohen 
yesterday, where we are going to have about 300,000 more forces 
in NATO if it is enlarged. And as our commander there, General 
Clark, do you think we will be able to bring some of our forces 
back? We have 100,000 there now. If we had 300,000 from these 
new NATO countries, will we be able to have some offsetting 
cost and bring some of ours back?
    General Clark. Senator, I think you have to look at the 
functions that the U.S. forces perform over there before you 
can answer that question.
    Our forces are the glue of the alliance. They are there not 
only to meet NATO's interests but to meet our own American 
interests. They participate in the Mediterranean. They are 
available to be deployed as a contingency force outside of NATO 
areas, and we did this during the gulf war, and they were very 
effective in that purpose.
    When they are there, they are available to help shape the 
international environment. Those forces today are serving a 
very important function, for example in strengthening the 
relationship and reducing the remnants of the cold war 
attitudes that are residual in Russia.
    So I think we are getting a substantial benefit for the 
forces that are there, and I would hope that we would continue 
to maintain the level of approximately 100,000 forces in 
Europe.
    General Shelton. And, Senator, if I might add to that, we 
also I think show a total commitment to peace and stability on 
the European continent in addition to that. And we also have 
forward-deployed forces, which reduce the strategic mobility 
required if we have to move forces into that part of the world 
to reinforce, or for whatever reason.
    And so there is a substantial savings in that regard, and 
one of the most critical parts of it is the time we save. 
Without the strategic mobility assets ready to start moving our 
forces instantaneously, then you have already bought quite a 
bit of time to be able to reinforce or to react to an 
environment.
    Chairman Stevens. Well, I predict to you gentlemen that 
there will be people sitting here in 2007, 2008 that will have 
a different point of view, and it does seem to me that what we 
are hearing in these statements of my colleagues, they are all 
saying, you know, yes, we believe in NATO, but if there is a 
stable Europe is that the place to keep our forces.
    Isn't the instability somewhere else in the world, then? We 
are locking ourselves into a period here, it seems to me, that 
we are going to rue the day when we have some real crisis 
somewhere else in the world and they are tied down here, tied 
down in the NATO structure.
    Now I think I am going to go back and get out Senator 
Mansfield's speeches and read them to the Senate, because, you 
know, the older I get, the more I understand what Mike was 
saying at the time, that forever is a long time. We kept forces 
in Europe now for more than 50 years after World War II, and we 
continue to build them up, and we continue to increase the cost 
of keeping them there.
    The cost per person over there now is just enormous 
compared to the original cost of keeping our people there. They 
were draftees then. They were unaccompanied tours. We were not 
providing all of the things we are providing over there now. We 
were not paying costs to nations that were there at the time. 
We do not get much host nation support any more in NATO.
    I see just an ever-increasing cost of our presence in NATO, 
and I do not know why we do not put something on this to say, 
look, if we get 300,000 more forces over there, let us bring 
part of our people back. It does not cost as much to keep them 
here as it does to keep them over there. The cost factor is 
going to have to be looked into, as far as I am concerned, 
before we are through.
    And I look forward to the results of your December 
ministerials, General Clark. But I again say, you know, I do 
not know how we are going to maintain the force that I believe 
we will need in the period of 2003 to 2023 at the rate we are 
going now.
    General Shelton, your ships, as I said yesterday, average 
20 years of age today. They are being replaced at the rate of 
two to three per year. It does not take a rocket scientist to 
tell you that by the time my and his watch are over the average 
age of our naval vessels is going to be somewhere around 30.
    General Shelton. I know.
    Chairman Stevens. Now where are you going to get the money 
to replace them if you increase the cost of keeping people in 
NATO and we increase our payments to NATO, and we face 
something like this JSTARS thing. I think that is what really 
irritates us.
    We are going to pay one-half of the cost of developing a 
competing system to one we have already proven to the world is 
available and we offered to make it available to them at less 
than cost. Now somehow or other I think that the Nation has to 
understand where we are going as far as this readiness concept 
is concerned.
    My friends ask, are we ready today. Yes; I think you are 
ready today. But I do not think you are going to be ready in 
2003 if you keep spending money in Bosnia the way we are going 
to spend it and spend money in expanding NATO and do not 
modernize this force. I do not know. Somehow or other you are 
going to have to prove to me that we are capable of modernizing 
this force and replacing the aircraft, replacing the ships, 
replacing the tanks, replacing the other systems we need and 
developing new ones before we add to the cost of our military 
because of an enlarged NATO.
    It is cost that is driving me and the need for 
modernization, not the question of whether NATO should be 
enlarged. Of course, NATO should be enlarged. That is not the 
question. The question is who should pay for it, and every one 
of our colleagues has read what has been reported in the 
European press.
    France is not going to pay any more. We visited Britain. 
They are not going to pay any more. Germany says they are not 
going to pay any more. And by definition there are more costs, 
and we are being told and you and the two Secretaries said, 
well, do not worry. It is not going to cost us any more.
    But that has not been proven to me yet. So I would hope 
that you do not mind if we say to you, after you have this 
ministerial and get those costs, we would like to have you come 
back and tell us what the analysis is and how they justify 
telling us that we can fit it into this program and continue to 
modernize and maintain our capability to defend this country.
    As I said, that has not been proven to me yet, that we 
should proceed on the course we are on and just assume that the 
money will be there.
    General Shelton. Senator, as you probably recall from the 
QDR process, in terms of modernization we are counting very 
heavily on three things. One was a reduction in our 
infrastructure, one was a revolution in military affairs, and 
one was a revolution in business affairs. And, of course, that 
will have to be done in conjunction with Congress, but that is 
going to be critical for us as well as we look at how we 
modernize our U.S. forces.
    Chairman Stevens. Well, I have to confess to you that 
yesterday I did not read that you had the money in the QDR for 
this, and you have mentioned today that there is $100 million 
going up to $200 million. I did not see that.
    General Shelton. Starting in 2000.
    Chairman Stevens. I am glad to know that it is there. I do 
not think it is enough if you look at the cost of our 
involvement in Bosnia. I do not think it is enough to say that 
is what it is going to cost us to bring these people in and 
make them interoperable and make them part of the force that we 
are a part of.
    I think the interoperability costs alone are going to be 
staggering. We will wait and see what you all tell us.
    Do you have any further comments?
    Senator Hutchison. Yes; and I appreciate very much what you 
said. But I just want to reinforce the chairman and the ranking 
member. We are looking at an average of over $3 billion a year 
in Bosnia right now. This is a committee that has increased the 
President's defense budget year after year. The defense budget 
is going to be about where it is now.
    So I would just ask you, as you are putting these costs 
together, to look at the priorities, look at the threats that 
we face throughout the world, and make sure you understand that 
with the defense budget what it is and the choices that we 
have, there is an issue right now in the defense authorization 
bill where there is an effort being made to severely curtail 
competition in depot maintenance, which is another $100 million 
per project that will be wasted if we are not able to have 
competitive bids on that, in addition to the infrastructure 
that you are talking about bringing down.
    Everything that we have been told since I have been in the 
United States Senate about being able to be ready with a 
smaller force structure depends on lift and rapid deployment, 
and I worry very much that we are cutting back in this country 
to too great an extent, that we are not looking at the full 
range of our security risks when we are building up so much 
with NATO military construction, with NATO investment, with 
investments in Bosnia.
    I just hope that you will think about these priorities as 
you are assessing what the costs will be and what our share is 
and what our fair share should be with regard to stability in 
Europe.
    Thank you. Thank you, Mr. Chairman.
    Senator Inouye. General, I have had the privilege of 
serving with the chairman now for over 25 years on this 
committee, and one thing I have learned, take his words very 
seriously.
    Senator Hutchison. Other than his wonderful personality. 
[Laughter.]

                     Additional committee questions

    Chairman Stevens. Enough of that. We will continue these 
hearings tomorrow. But I do thank you very much, and we are 
very grateful to you for what you do. You are both 
distinguished officers and have proven yourself in the field 
and certainly proven yourself to get where you are today. And 
we respect you for what you are doing.
    Thank you very much.
    General Shelton. Thank you very much, Mr. Chairman, 
Senators.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
              Questions Submitted to Gen. Henry H. Shelton
            Questions Submitted by Senator Richard C. Shelby

                          INTELLIGENCE SHARING

    Question. What is the status of military to military meetings with 
regard to arrangements about intelligence gathering and intelligence 
sharing?
    Answer. The Defense Intelligence Agency established relationships 
with its counterpart organizations in the three prospective NATO 
members in 1992. Since that time these nations have all concluded 
General Security Agreements on the protection of classified military 
information with the United States. The relationships both at the 
leadership and working levels have become increasingly comfortable. All 
three countries send students to our Combined Strategic Intelligence 
Training Program where they learn about U.S. intelligence doctrine and 
have an opportunity to interact with mid-grade officers from allied 
military intelligence organizations. The primary focus of current 
exchanges with these nations has been in Bosnia, where interaction 
between the militaries of these nations and those of the Alliance has 
been excellent. In particular, as part of IFOR/SFOR, military units of 
these nations have gained experience in using U.S. military 
intelligence and also in the application of tactical intelligence in a 
NATO military environment. Military and intelligence relationships 
between the U.S./NATO and these three countries continue to mature in a 
very satisfactory and mutually beneficial manner.

             ENLARGEMENT AND U.S. FORCE STRUCTURE DECREASES

    Question. For several years, I have been extremely concerned about 
the defense budget topline and the concomitant shortages we are 
experiencing in virtually every facet of defense spending, end strength 
goals, and near-term and long-term readiness. These problems are 
especially vexing when no one takes into account the fact that our 
troops are being deployed at a record pace. With this in mind, will 
enlargement allow us to decrease our force structure in Europe and 
apply the savings into those program areas that need it, like 
modernization? Is NATO enlargement just another ``event on the 
operational continuum'' that will push our forces to the breaking point 
more quickly than if NATO was not enlarged?
    Answer. NATO Enlargement is not a factor in determining the size or 
shape of U.S. military forces in Europe. Maintaining a sufficient level 
of U.S. military forces in Europe is essential to preserving U.S. 
influence and leadership there and in adjacent regions. For the 
foreseeable future, this forward deployed presence will remain 
approximately 100,000. This size is sufficient to respond to plausible 
crises, provide tangible evidence of America's commitment to preserve 
regional stability, actively participate in multinational training, 
reinforce our bi-lateral relations with key partners, bolster U.S. 
leverage in helping allies shape allied defense capabilities, and 
minimize the likelihood of having to deploy additional forces from 
CONUS in the early stages of a regional crisis. This force anchors both 
NATO's deterrent capability and the alliance's ability to respond to 
out-of-area contingencies.

                       NATO EXPANSION IN THE QDR

    Question. General Shelton, I was surprised by Secretary Cohen's 
statement during testimony to this Committee yesterday that the 
Quadrennial Defense Review takes into account the admission of our new 
nations to NATO. It was my understanding that the QDR does not 
contemplate NATO expansion into its strategy. While I realize the QDR 
was presented prior to your appointment as Chairman of the Joint Chiefs 
of Staff, I would appreciate learning in detail how the proposal to 
expand NATO impacted the QDR. If the QDR does not in fact contemplate 
additional nations joining NATO, how do you reconcile this omission and 
what accounts in the DOD budget do you intend to use as bill payers for 
the costs of NATO expansion in the fiscal year 1999 budget submission?
    Answer. The Joint Chiefs of Staff provided a strategic assessment 
to the Secretary of Defense prior to the QDR process that assumed the 
likely addition of an unspecified number of new members to NATO between 
now and 2010. This was based on the stated NATO and USG policy, since 
1992, of seeking to admit new members to the Alliance, while 
acknowledging that such admissions would not occur until and unless 
ratified by the U.S. Congress and the Parliaments of all NATO members. 
This assumption is reflected in the Defense Strategy's discussion on 
successful adaptation of our alliances. During development of the 
Quadrennial Defense Review (QDR), it was anticipated that there would 
be costs associated with NATO enlargement and it was designated as one 
of a number of priority areas for funding. Funds sufficient to cover 
our expected share of enlargement costs are provided in the FYDP.
    The cost will be sourced from infrastructure and force structure 
savings. Therefore, cancellation of programs or reduction to troop 
readiness is not needed.
    We anticipate that the funding will be divided between O&M (which 
funds the U.S. contribution to the NATO Military Budget), and Military 
Construction funds (which funds the U.S. contribution to the NATO 
Security Investment Program).
    Specific details of how this funding stream will be apportioned 
between O&M and MilCon funds will be decided as the Department develops 
its fiscal year 2000 budget.

                        COST OF NATO ENLARGEMENT

    Question. All Administration cost estimates that I have seen assume 
no military deployment, extended or otherwise, like Bosnia. In your 
opinion, is that wise or realistic, and if so, why? Let me ask a 
related question: What trade-off to modernization, R&D, end strength, 
and readiness would have to be made if we faced another prolonged 
``engagement'' either simultaneously or subsequently to Bosnia?
    Answer. It is Department of Defense Policy to budget for known, 
ongoing contingencies only. The Department does not budget for 
unforeseen crises. Therefore, the methodology for estimating costs 
associated with NATO enlargement is consistent with Department of 
Defense policy.
    Current cost estimates for NATO enlargement represent common 
funding requirements for NATO infrastructure investment. These are 
primarily military construction and procurement requirements to provide 
capabilities for interoperability between armed forces of current and 
new members; and to extend NATO's integrated command, communications, 
and air defense surveillance systems.
    The Department of Defense is analyzing the recently completed NATO 
Enlargement Study. This study provides SHAPE's analysis of NATO's 
military requirements for enlargement. The Department is in the process 
of refining initial cost estimates based upon the study's findings. The 
Department will be able to provide refined cost estimates in early 
1998.
    As with other priorities, NATO enlargement requirements will 
compete for resources in the budget development process. In this 
rigorous process, programs are resourced within the context of the 
entire Defense program. As you know, we are already looking at 
requirements for fiscal years 2000 through 2003 in our Future Years 
Defense Plan, and NATO enlargement costs are included. Funding NATO 
enlargement will involve resources across appropriations within the 
Department. Readiness remains the Department's number one priority and 
will not be compromised.

                           NATO CONTINGENCIES

    Question. What type of contingencies may involve the United States 
if the three prospective nations are admitted to NATO? What steps are 
you taking to incorporate these scenarios into our military planning 
and budget?
    Answer. In general, the major contingency that the U.S. could be 
involved in if the three prospective members are admitted to NATO is 
the Article 5 defense of an attacked member. At present, however, NATO 
military authorities have not yet completed detailed contingency 
planning that involves the new members.
    As for budgeting for these contingencies, it is Department of 
Defense policy to budget only for known, ongoing contingencies. 
However, once contingency plans are developed, they will impact NATO's 
Defense Planning Process and Defense Planning Questionnaire. It is 
through this process that the U.S. will take the scenarios into our 
military planning.

                             NATO EXPANSION

    Question. It is my understanding that the European members of NATO 
lack the sustainment capability for prolonged operations. Specifically, 
NATO's European members have an inadequate Combat Support (CS) and 
Combat Service Support (CSS) elements, and therefore, NATO planners 
have no alternative except to rely heavily on the United States to 
provide that type of critical support for NATO operations. If NATO is 
weak in CS and CSS units, should we look to the three prospective 
members for that CS and CSS capability? Would this proposal improve 
NATO's capability to conduct sustained operations without U.S. 
logistical involvement?
    Answer. I would not characterize NATO as being weak in Combat 
Support (CS) or Combat Service Support (CSS) forces. Since NATO's 
creation, military forces of several European member nations have been 
tailored toward an ``Article V'' scenario, which is the collective 
defense of NATO nations. Their forces relied upon some military support 
functions being performed by their own nations' civilian 
infrastructure, in defending their own soil. In the past several years, 
NATO has become involved in ``non-Article V'' operations, such as in 
Bosnia, and has seen the need for military CS and CSS increase. 
Therefore, any increase in NATO's support forces would obviously 
contribute toward sustainment issues in non-Article V operations. Such 
an increase would be generated through NATO's Defense Planning Process 
and Force Goals.
    Regarding our nation's logistical involvement, we must always 
maintain the capability to logistically support our own forces, whether 
we're in a NATO operation or somewhere else in the world. Having 
additional logistical support options within NATO would obviously 
relieve the potential reliance of U.S. support forces by Allied nations 
in a multinational operation.

           MILITARY CAPABILITIES OF PROSPECTIVE NATO MEMBERS

    Question. Based on NATO's experience working with the prospective 
members in the Partnership For Peace program and in Bosnia, I'm 
interested in knowing your assessment of the strengths and weaknesses 
of their militaries. How will the addition of Poland, the Czech 
Republic, and Hungary to NATO add to the alliance's ability to fulfill 
its collective defense mission?
    Answer. The greatest strengths of the armed forces of the three 
NATO invitee states is their commitment to constitutional civilian 
control of the military, democracy and reform. Senior civilian leaders 
in all three states have taken steps to ensure that their militaries 
follow the guidance of civilian authorities. In addition, reforms to 
instill commitment to democratic principles, as well as to improve 
defense planning and staff procedures, are underway in all three 
countries. These reforms have made considerable progress. Hungary's 
willingness to allow NATO Allies to use Hungarian facilities in support 
of IFOR/SFOR operations indicates the desire to put words into action 
in support of NATO. Additionally, each country possesses a reservoir of 
talented, trainable professional officers who will form the core of 
their restructured militaries.
    The principal weakness of the three militaries is their current 
limited ability to operate in conjunction with NATO military forces. 
Four areas in particular--air defense, command, control and 
communications, military infrastructure and training to NATO 
standards--are of greatest concern because they directly affect the 
Alliance's ability to reinforce these states in time of crisis.
    Early warning and command and control for air defenses are 
extremely weak in all three countries, but are being aided by the U.S.-
sponsored Regional Airspace Initiative.
    Planning for command, control and communications upgrades is 
underway that will establish connectivity between NATO and the three 
invitees at the highest levels of government and the military shortly 
after accession.
    All three countries are currently working with NATO to determine 
which infrastructure needs to be upgraded. Several areas that require 
attention after accession are: cargo-handling capabilities, ammunition 
storage facilities and POL (petroleum, oils and lubricants) storage and 
distribution. A number of areas require more modest improvements, 
including air bases, road and rail networks, staging areas, ports and 
headquarters facilities.
    All three invitees are working to develop their officers and non-
commissioned officers, to adopt NATO doctrine, to build understanding 
of tactical procedures, and to increase the number of troops proficient 
in NATO languages, particularly English. NATO's Partnership for Peace 
program and the NATO-led peacekeeping force in Bosnia-Herzegovina have 
been important tools for improving interoperability with the Alliance 
in all these areas.
    Question. What are the most serious military deficiencies of each 
as candidates for NATO?
    Answer. The Czechs, Poles and Hungarians are all focusing on the 
deficiencies that we believe present the greatest challenges: 
personnel; training and the adoption of NATO doctrine; and 
interoperability.
Personnel
    We have made it clear to all three that serious, effective military 
personnel reform must be accomplished as soon as possible within the 
Armed Forces, and all three have begun to take the necessary steps. The 
Czechs agree that they need to create a Western-structured military, 
reliant on an effective Non-Commissioned Officer corps, with quality, 
well-trained forces that are properly recruited, paid, housed, and 
retained. To accomplish these goals, they understand that they need to 
dedicate the required resources and, in some cases, pass appropriate 
legislation.
    Personnel reforms will encompass perhaps the most drastic and the 
most difficult changes to the Polish military. The military has 
announced plans to cut total forces from 230,000 to 198,000 by 1999, 
and to 180,000 by 2004. It will increase the number of career soldiers 
from 36 percent to 50 percent of total troops, and it plans to improve 
the junior-to-senior officer ratio from its current 50:50 to a more 
appropriate 70:30 by the year 2012. To reflect better the reliance by 
NATO militaries on a skilled, professional NCO corps, Poland plans to 
increase the number of NCO's to one-third of its total forces and to 
invest heavily in their training.
    Difficult personnel reforms are also needed in Hungary. Hungary's 
priority areas for personnel also include improving the ratio of junior 
to senior officers and of officers to NCO's, but they also plan to 
address quality of life issues for the military, win a 23 percent pay 
raise for the military in 1998 (Parliament votes on this issue in early 
December), and enact legislation on pay standards (scheduled to take 
effect on January 1, 1999). The military has stated that it will cut 
ground forces personnel from the present 59,715 to 34,000 by 2005, and 
Air Force personnel from the current 17,500 to 14,000. Hungary hopes to 
have a 60:40 professional to conscript ratio by the end of the century. 
Another important objective is to increase the present one-to-one 
proportion of NCO's to officers to two-to-one, and ultimately three-to-
one. The length of service for conscripts will be reduced from 12 to 9 
months.
    Like Poland and Hungary, personnel reforms will be perhaps the most 
drastic and most difficult change for the Czech military to implement. 
The Czechs assured us during a recent visit to Prague by Assistant 
Secretary of Defense for Force Management Policy Fred Pang that 
personnel reform is their number one military priority. They pledged to 
develop, with our support, a concrete action plan that will address and 
correct their personnel deficiencies.
    The Czechs began the process of implementing personnel reform back 
in March when it approved the National Defense Concept. The primary 
objective of the concept is to reorient the military away from the 
heavy, manpower-intensive Soviet-style corps of the Warsaw Pact and 
toward smaller, more mobile, NATO-compatible units in both the Czech 
Ground Forces (Army) and Air Forces. The plan aims to downsize the 
armed forces to 55,000; develop a professional cadre of career 
soldiers; standardize structures along NATO lines; improve the quality 
of military life; and, most importantly, develop a professional NCO 
corps. The implementation of this plan, which started on July 1, is 
scheduled for completion by the end of 1998.

Training and NATO Doctrine

    Each country has begun to aggressively adopt NATO doctrine and 
incorporate it into their training programs. Within the PfP framework, 
all have obtained NATO Standardization Agreements (STANAG's) and 
regulations and are translating them as fast as they receive the 
documents from Brussels. All three have also set up NATO Integration 
departments in the Ministries of Defense and Foreign Affairs, as well 
as in the General Staff, to help achieve their prioritized 
interoperability goals and facilitate their swift operational 
integration into the Alliance.
    Training will become a crucial element of each country's 
integration plans. The operational experience gained through active 
participation in PfP exercises has greatly improved the ability of all 
three invitees to operate jointly with NATO forces. Each country is 
conducting staff exchanges with the United States in such areas as 
acquisition, budget and finance, logistics, public affairs and 
legislative affairs.
    The one million dollars Poland received from the United States 
under the International Military Education and Training (IMET) program 
has provided training in such key areas as English language skills, NCO 
development, and logistics. Poland has also received training from 
other Allies in logistics, English language, C\3\, and defense 
planning. English language proficiency is a critical element of NATO 
interoperability, and Poland plans to have 25 percent of officers in 
NATO-designated units proficient by 1999. Over 1,100 officers per year 
are currently studying NATO languages (primarily English).
    The Hungarians have placed a great deal of emphasis on training. 
Two of Hungary's highest priorities are to increase English proficiency 
and to improve the quality of professional training, and the one 
million dollars in IMET funds which the United States provided in 1997 
has been spent wisely in both areas. NATO Allies also provide training 
to Hungary in NATO doctrine, recruitment, defense planning, and force 
modernization.
    Training provided by the United States and Allies has directly 
impacted both Hungarian operational capabilities and senior-level 
defense planning and reform. The Chief of the Defense Staff and 
Commander of the HDF is the first officer of his grade and 
responsibility from all of Central and Eastern Europe to attend the 
U.S. Army War College. His First Deputy Chief of Staff is also a U.S. 
War College graduate. Together, based on their U.S.-training, they have 
successfully restructured the Hungarian General Staff and Service 
Staffs along NATO lines to be more compatible and interoperable with 
NATO.
    The Czech Republic rightfully views the Partnership for Peace (PfP) 
program as the most direct path to achieving NATO compatibility, and 
its participation with the United States and other Allies have enabled 
it to begin developing the capabilities needed for it to operate with 
NATO forces. Active PfP participation, coupled with its peacekeeping 
activities, already allows Prague to contribute well-trained and 
seasoned personnel that are familiar with NATO procedures and 
operations. The Czechs have used the $800,000 in IMET funds provided by 
the United States in 1997 for training in such areas as English 
language skills, NCO development, and defense planning.
    The Czech Republic has also received training from other Allies--
the United Kingdom, France and Germany, among others--in C\3\, 
logistics, air defense, and air traffic control.

Interoperability

    The third broad area of national effort for each of these countries 
is interoperability with a focus on C\3\, air defense architecture, 
logistics, and infrastructure. All three invitees will be making 
significant investments to infrastructure improvements--some of which 
they would have made whether they were invited to join the Alliance or 
not--and they know that those improvements will be costly. We are 
finding, however, that some of the infrastructure inherited from the 
Warsaw Pact is adequate and does not require significant modifications 
for NATO use.
    All three countries are also moving quickly ahead on initiatives to 
improve interoperability in key areas. For example, sweeping reforms to 
existing air defense and air traffic control systems have greatly 
improved the three invitees' ability to defend and manage their 
airspace. When their Air Sovereignty Operations Centers (ASOC) come on-
line in 1998, Poland, Hungary and the Czech Republic will have 
consolidated control of their civilian and military air traffic control 
networks into one streamlined system and be ready to establish a future 
link with NATO's air defense system when the political decision to do 
so is made. Hungary has already completed the installation of 
``identification-friend-or-foe'' (IFF) transponders to their modern 
combat aircraft, and Poland and the Czech Republic plan to do so by 
1999. Shortcomings exist in terms of the quality of their equipment, 
but this is not critical in the near-term. Units from all three 
selectees participate successfully in the NATO-led Stabilization Force 
(SFOR) with this equipment. The key point is communications. Most of 
these countries' modern Warsaw Pact equipment can continue to be used 
and made to operate satisfactorily with NATO forces' equipment, so long 
as communications can be upgraded for compatibility.
    Question. What can each prospective member offer the alliance 
militarily in the interim?
    Answer. While the three selects are not formally NATO members, they 
already have appreciable capabilities, as demonstrated by their 
performance in Bosnia; however, improvements are still necessary. They 
have developed plans on how to improve in critical interoperability 
areas and will continue to increase and improve their capabilities, 
provided sufficient resources are obtained from their parliaments. 
Poland has already committed to meeting all 41 of NATO's 
interoperability objectives, Hungary has pledged to meet 38, and the 
Czech Republic has promised to attain 31.
    All three states are capable of defending their own territory 
against current and projected threats in the short- to near-term. This 
would prove invaluable in an Article V operation that might take place 
within their own borders.
    In addition, all three invitees can contribute military forces to 
peacekeeping and other non-Article V missions. Forces capable of 
conducting such operations are currently limited to a few Rapid 
Reaction units, which amount to several high-readiness, well trained 
battalions. As capabilities improve, they will be able to project power 
better and develop the capability to more flexibly deploy their troops 
abroad.

                            EUROPEAN ALLIES

    Question. What really is the limit of their ability to reprogram 
funds to cover the cost of NATO expansion?
    Answer. The allies have said that they are willing to reallocate 
money from efficiencies and economies within the three NATO common 
budgets to cover the cost of upgrading and improving common 
requirements. The total for these common budgets currently is about 
$1.8 billion. Additionally, they have indicated a willingness to pay 
their ``fair share'' of direct enlargement costs. Our European allies 
would not include force modernization, either for new members, or for 
themselves, as part of these direct costs. We believe that additional 
funds will be required over and above those made available through 
reprioritization.

                                 THREAT

    Question. A key issue that many members of Congress will be 
considering as we contemplate the issue of NATO expansion is the threat 
level in Europe and the likelihood that U.S. troops would be involved 
in a conflict on behalf of a new NATO member. What is the threat to 
Europe? Are we more likely to see a flare up of border clashes or the 
type of ethnic strife we have seen in former Yugoslavia?
    Answer. While Article 5 collective defense is still the cornerstone 
of NATO's strategy, the Alliance, as it accommodates the new strategic 
landscape, has put emphasis on its ability to respond to Article 4 type 
contingencies that exhibit the potential for escalation. NATO assesses 
that Russia poses only a minimal threat over the next decade, owing to 
its greatly diminished military. Conceivably, there does exist the 
possibility of conflict emerging among various contiguous states within 
Europe. On NATO's southern flank, Iran, Iraq, Syria, and Libya are 
identified as potential threats to the Alliance during the near- to 
long-term. Threats from these nations fall into several functional 
threat areas, to include terrorism, religious extremism, development 
and possession of weapons of mass destruction, and direct 
destabilization of neighboring nations. Instability among nations in 
North Africa and the Mediterranean littoral in general, is viewed by 
NATO as potentially threatening in that it might fuel refugee flows, 
narcotics trafficking, and organized crime, all of which have the 
potential for spilling over into Europe.
    The potential for political instability in the Balkans remains 
relatively high. Indeed, it is this type of threat which is assessed in 
NATO as the most likely near-term threat to the Alliance. Within the 
former Yugoslavia, border clashes, ethnic strife and general 
instability will remain serious threats for the foreseeable future 
(although, NATO's present commitment to stabilization efforts will 
continue to reduce these threats in former Yugoslavia.) Tensions in 
Kosovo have not abated, and the potential for violent Serbian 
repression there continues to fuel fears in Macedonia and Greece of a 
spillover crisis in the form of refugees. Macedonia itself will remain 
vulnerable to internal ethnic strife, a scenario which could in turn 
destabilize its neighbors. Similar low intensity conflict threats will 
continue to fester throughout the Balkans. Recurrences of civil unrest, 
similar to what recently happened in Albania, will remain possible for 
the near-term in countries like Bulgaria and Romania. Driven by ethnic 
and political strife, poor economies, and lingering undemocratic 
tendencies, the weaker Balkan nations will remain volatile and will 
challenge the Alliance's ability to maintain regional stability.
    Question. What are the foreseeable threats to the national security 
of each prospective member that might involve the use of NATO troops?
    Answer. Prospective NATO members are stable and face no foreseeable 
internal threats (as do some of their neighbors). Nor are there 
currently identifiable external, strategic threats to these nations' 
security. [Deleted.]
    Question. As NATO expands, how likely is it that Russia would want 
to or be able to build up its armed forces and pose a threat to NATO 
countries?
    Answer. Russia is exhibiting those tendencies which will lead to a 
type of military that will become a positive component on the European 
and global landscape. We agree with NATO's current threat estimate 
which identifies little strategic threat to the Alliance from Russia 
for the foreseeable future. While Russia may concentrate additional 
forces on the border areas and orient its armed forces against the West 
in general, its military capability will be severely constrained by its 
own harsh economic realities.
    Question. Do NATO allies and incoming members share the American 
assessment of the threat in Europe? What are the differences?
    Answer. The United States, its fellow NATO allies, and prospective 
NATO members largely agree on the nature and scope of threat to the 
Alliance, now and in the future. There are however minor differences in 
threat perceptions. For example, the European allies, particularly 
``southern'' nations perceive the threat emanating from the 
Mediterranean littoral as more serious than the Atlantic powers do. The 
closer proximity of some allies to unstable North African countries has 
led to disagreement over where to bolster the Alliance--both in terms 
of new members and in terms of the level of European control of the 
southern region in NATO. Similarly, prospective NATO members--each 
having a history of repeated Russian invasions, appear to see a 
resurgent Russian threat as far more likely than do other allies.

                          INTELLIGENCE SHARING

    Question. As I understand it, new NATO members will have the same 
access to intelligence information that current NATO allies have. Are 
you confident that the prospective NATO members have severed all ties 
with Russian intelligence and security agencies?
    Answer. In spite of a long history of close intelligence sharing 
with Russia and other former Soviet states, prospective NATO members 
have, to the best of our knowledge, ended these relationships. The high 
value intelligence officials in these countries place on NATO 
membership far outweighs any possible benefit in maintaining residual 
ties to Russia. Moreover, counterintelligence efforts in these 
countries have been mounted to closely monitor the behavior of retired 
Russian military personnel and other Russians living in their 
respective countries. These efforts are predominantly aimed against any 
Russian infiltration of intelligence operations. Moreover, the 
intelligence organizations have signed agreements and adopted security 
procedures to safeguard NATO classified documents. All three 
prospective members have restructured their intelligence services to 
mirror those of the West, in order to ensure security of classified 
NATO information.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

            MILITARY CAPABILITIES OF PROSPECTIVE NEW MEMBERS

    Question. What is the greatest strategic value of each prospective 
member to the NATO alliance?
    Answer. Poland, Hungary and the Czech Republic are each enhancing 
NATO's mission of a stable and secure European continent through 
unilateral initiatives along their borders and thus contributing to 
collective defense. They act as a benchmark against ethnic strife and 
demonstrate support for contingencies to quell disturbances on the 
continent as in Bosnia-Herzegovina. For example, the Czech Republic has 
made great progress in establishing broad democratic control over its 
armed forces and has also cultivated close ties with all its neighbors. 
No border is in dispute with Germany, Austria, Poland or Slovakia, and 
the Czechs have no conflicts with neighboring countries relating to 
minority ethnic groups. Since the Madrid Summit, Prague has also 
increased its trilateral regional defense cooperation with Warsaw and 
Budapest. Bilaterally, the Czechs have also contributed to the security 
of Central Europe by resolving historical disputes and developing close 
ties with Germany. In 1993, they signed a military cooperation 
agreement with Germany, and they have worked closely with the German 
military since then.
    The invitees have dramatically improved in the last several years 
regarding military strength and interoperability capabilities. Each of 
the invitees has substantially improved their ability to contribute to 
the work of the Alliance as evidenced in their excellent performance on 
Partnership for Peace exercises and through deployments with both IFOR 
and SFOR. As a result, the greatest strategic contribution that each 
NATO invitee brings to the Alliance occurs through the process of 
collective defense.
    Poland is forming joint NATO-interoperable peacekeeping battalions 
with both Ukraine and Lithuania, efforts which not only improve its 
ability to deploy to peacekeeping operations, but which also reassure 
both Kiev and Vilnius that their future lies with Europe. It is also 
working with Germany and Denmark to form a trilateral mechanized 
infantry corps that would be fully integrated into the NATO force 
structure. Poland has undertaken active defense cooperation with the 
Baltic states, particularly Lithuania, to reassure them of Europe's 
commitment to their security. Poland has also made efforts to normalize 
relations with Moscow, which reinforces the increasingly close 
cooperation between NATO and Russia.
    Hungary participates in several Central-European regional 
cooperation organizations that indirectly reduce the effects of risks 
and instability. Hungary has concluded more than 170 cooperation 
agreements with its neighbors, encompassing a broad variety of fields. 
Its agreements with Romania and Slovakia are especially significant. 
Agreements with Slovenia, Italy, and with Romania, to form peacekeeping 
units in the future are especially noteworthy.
    Numerically, the invitees bring some 347,000 troops and a 
significant force structure to supplement existing NATO capabilities. 
As seen in Bosnia and through numerous PfP exercises, these new nations 
have demonstrated they can operate with current NATO members and also 
bring strengths and areas of military expertise that are of significant 
benefit to the alliance.
Poland
    With the largest and most capable military in Central and Eastern 
Europe, Poland has brought its 25 years of peacekeeping experience to 
NATO's efforts in Bosnia. Since 1974, Poland has participated in more 
peacekeeping operations than any former Warsaw Pact country and thereby 
gained experience which has served to greatly enhance the NATO-
interoperability of its forces. It currently has a 400-person airborne 
infantry battalion in SFOR, a 355-person logistics battalion in the 
Golan Heights (UNDOF), an infantry battalion and military hospital (632 
troops) in Lebanon (UNIFIL), 53 soldiers in Eastern Slavonia (UNTAES), 
and troops supporting eight U.N. observer missions. It currently has a 
400-person airborne battalion in SFOR as part of the U.S. sector. In 
1989, they established a military training center for U.N. operations 
in southeastern Poland. In 1992, the Poles deployed an infantry 
battalion with U.N. forces in Croatia. Since then, Poland has shown an 
increased willingness to provide combat forces in support of 
peacekeeping, as reflected by their commitment to IFOR and SFOR. Poland 
is currently working to establish joint peacekeeping battalions with 
Ukraine and Lithuania, and the Poles have contributed to U.N. efforts 
in Rwanda (UNIMIR), Georgia (UNOMIG), Tajikistan (UNMOT), Iraq/Kuwait 
(UNIKOM), the Western Sahara (MINURSO) and Cambodia (UNTAC).
Czech Republic
    The Czech Republic currently has a 620-person mechanized battalion 
in SFOR, and prior to that it contributed an 870-person mechanized 
battalion to IFOR and a 985-person infantry battalion in UNPROFOR. The 
Czechs also deployed a 200-man decontamination unit to Desert Shield/
Desert Storm and have also provided observers to U.N. observer missions 
in Croatia (UNTAES), the Prevlaka Peninsula (UNMOP), the Former 
Yugoslav Republic of Macedonia (UNPREDEP), Mozambique (UNOMOZ), Georgia 
(UNOMIG) and Liberia (UNOMIL).
Hungary
    Hungary contributed a 400-500 man engineer battalion to conduct 
bridging and other engineering operations in support of IFOR. This 
battalion, now reduced in number to 200-250, is currently deployed in 
support of SFOR. Hungary's support to IFOR and SFOR also included 
allowing U.S. and NATO forces to transit its airspace, station at its 
airfields and use its facilities. Hungary's ability to operate as part 
of the NATO team was demonstrated with every bridge that was built and 
every plane that landed and took off from its airfields. Over 80,000 
U.S. military personnel rotated in and out of IFOR and SFOR assignments 
through the Hungarian airbase at Taszar. U.S. artillery units calibrate 
their guns at Hungarian ranges prior to deploying to Bosnia, and again 
upon re-deploying. All three countries have begun training their troops 
in NATO doctrine in earnest, and all three will be able to make a 
substantial contribution to the force projection, strategic depth, and 
capabilities of the Alliance. From this perspective, an Alliance with 
nineteen committed Allies has more to offer than one with sixteen, and 
a larger Alliance can spread the fiscal and operational burden more 
evenly. In short, Poland, Hungary and the Czech Republic are already 
working with NATO and NATO allies in the field.
    Question. How difficult will it be to fully integrate these members 
and how long will it take?
    Answer. All three invitees have been active contributors and 
participants in the Partnership For Peace Program. They have 
contributed units to the Implementation and Stabilization Force in 
Bosnia. Hungary has served as a valuable staging area for Bosnia 
deployments. In addition, Poland and the Czech Republic contributed 
forces to the Gulf War Coalition. The three countries are currently 
transitioning to NATO standards and doctrine. Senior DOD officials have 
conducted site surveys of military facilities and capabilities, and 
there are many encouraging signs. Poland has developed a 15-year plan 
to upgrade their military structure and are financing it with 2.4 
percent of their GDP allocated toward defense. Key priorities are to 
enhance interoperability with NATO forces through a modernization of 
equipment and to increase the number of professional military courses 
and English language training opportunities. Hungary is prepared to 
commit the bulk of their forces to Alliance missions such as peace 
keeping and humanitarian operations. They are currently initiating a 
comprehensive defense review in order to posture their military to be 
fully integrated into NATO, emphasizing inter-operability, especially 
in command and control, air defense and air control. The Czech Republic 
has pledged 90 percent of their forces to NATO's use and are 
aggressively pursuing language training, interoperability of air 
defense and command and control upgrades.
    While much more work remains to be done, we are confident that the 
three NATO invitees will accomplish all the necessary tasks to meet 
minimum NATO standards for accession by 1999. Full integration is a 
longer term issue and could take an estimated 10-15 years as these 
nations restructure and rebuild their militaries under democratic 
principles.

                            EUROPEAN ALLIES

    Question. Our European allies have said they can cover the cost of 
NATO expansion through reallocation of funds in their defense budgets. 
Is it true?
    Answer. No. We believe that additional funds will be required over 
and above those made available through reprioritization. Our European 
Allies are committed to strengthening the Alliance through NATO 
Enlargement. As such, they have agreed to pay for their fair share of 
enlargement related costs. The allies pay the majority of NATO common 
costs year in and year out. While the U.S. pays in about 25 percent of 
NATO common costs, our European allies pay out the other 75 percent of 
those costs--some $1.3 billion last year. We expect them--and they have 
pledged--to provide the resources necessary to support a successful 
enlargement effort.
    Question. In 1991, NATO adopted a ``strategic concept'' that called 
for making our forces more deployable, lighter, and easier to project. 
Have our European allies adapted their force structure to meet the 1991 
strategic concept?
    Answer. Yes. NATO's military doctrine has changed since 1991, going 
from a reliance on in-place forces for a static defense to a 
requirement for a more mobile, flexible, military capability to respond 
to problems when and where they arise. We knew in 1991 that this was to 
be a long-term project, just as the United States expects to take a 
number of years to field completely new capabilities.
    Our European allies have made considerable progress over the past 
six years toward building the needed capabilities for the Alliance's 
new doctrine. Some examples: The UK now has the capability to deploy 
and sustain a division-sized force of 20,000-25,000 personnel in a Gulf 
War-style scenario. France is establishing a Rapid Reaction Force 
designed for rapid response in both European and overseas 
contingencies. The Italians, as demonstrated in Albania, are upgrading 
their ability to project forces to areas of need. Additionally, Germany 
is developing a Crisis Reaction Force that will eventually have the 
capability to deploy approximately 50,000 personnel. Clearly, these are 
capabilities the Alliance would need whether or not NATO added new 
members.
    It is clear however, that more work needs to be done to improve the 
capability of the European forces for mobility, deployability and 
sustainability. Senior U.S. officials in Washington and at NATO 
continue to press the European Allies to fulfill the commitments they 
have already accepted to make available forces for Alliance defense.
    Question. Do we expect them to make further force structure 
adjustments to accommodate the inclusion of new members?
    Answer. Absolutely. The Alliance is currently going through 
comprehensive internal and external adaptation in anticipation of 
gaining three new members in 1999. The most important aspect of these 
adaptation issues is military integration and inter-operability between 
and among new and existing members. Any force structure adjustments to 
accommodate the inclusion of new members will be identified through 
NATO's Defense Planning Process.
    Question. Since defense spending in the countries of our European 
allies has been on the steady decline, how can they do this?
    Answer. While Alliance members are experiencing budget cuts, they 
are also downsizing and restructuring current force configurations. 
Costs will be sourced from anticipated infrastructure and force 
structure savings.

                                 RUSSIA

    Question. The Administration has said that theoretically, Russia 
would be able to join NATO if it meets the criteria. However, the 
Administration has also said that so far, Russia has said it doesn't 
want to be a part of NATO. Regardless of what Russians want, I am 
curious about our long-term thinking regarding Russia. Is our ultimate 
military goal to include Russia as a full-fledged member of NATO?
    Answer. I support Secretary of State Albright's position on 
admitting Russia into the Alliance: ``NATO membership is open to all 
European democracies who express interest, meet the requirements of 
membership and whose inclusion the Alliance believes will contribute to 
overall security of its members. The fact is, if we ever get to the 
point where Russia and NATO are seriously talking about membership, it 
would be a very different world--a very different Russia, and a very 
different NATO, in a very different Europe.'' There has been no 
discussion to have as an ultimate military goal the inclusion of Russia 
as a full-fledged member of NATO.
    Question. Is including Russia as a full fledged member a good or a 
bad idea in your view? Why?
    Answer. You are correct to state that Russia has not expressed an 
interest in joining NATO, nor has NATO been contemplating Russian 
membership. It is important to note that any decision on potential 
Russian membership would be made by NATO political authorities and 
would be contingent upon subsequent approval by each member nation. It 
is premature to make an assessment on Russian potential membership in 
NATO.

          AMERICAN MILITARY RELATIONSHIP WITH RUSSIAN MILITARY

    Question. I'm curious about your relationship with the Russian 
military. How will NATO expansion affect the American military's 
relationship with Russia's military leaders? Has it already had an 
impact? Are they less or more cooperative? Do you expect that to 
change?
    Answer. Our military relationship with Russia's military leaders 
will continue to remain strong despite NATO expansion, especially if we 
ensure the successful development of the NATO-Russia relationship. 
Although much more work needs to be done, our cooperative relationship 
is steadily improving.
    Yes, In the early stages of NATO expansion, Russian military 
officials were slow to respond to U.S. initiatives to improve our 
military-to-military relations. Political and military officials in 
Moscow considered the U.S. as the driving force behind an expanding 
NATO that continued to view Russia as an opponent. In addition, the 
high rate of turnover at the top of Russia's defense organizations has 
made it politically risky to be viewed as a supporter of a closer 
relationship with the United States. But as Russia maintains a course 
of internal reform, respect for its neighbors' independence, and 
cooperation with the West, NATO continues to evolve in the direction of 
maximum inclusiveness--including a relationship with Russia.
    More. Today, we are experiencing with Russia a level of trust and 
cooperation previously unknown since NATO's post Cold War 
transformation began. As Russia's political and military leaders 
increasingly recognize NATO's reformation as building a stabilizing 
force for a democratic Europe, to include Russia, rather than as a 
force projected against Russia, the tensions associated with an 
expanding NATO begin to decline. Russia has also realized that it 
cannot stop NATO expansion and now understands cooperation and 
interaction with the U.S. and the West is the best means to influence 
its future position in Europe.
    We expect this recent trend towards an improved relationship to 
continue. By including Russia in PfP activities and steadily pursuing 
our military-to-military contacts at all levels, we continue to 
strengthen the bridge of trust and cooperation between our militaries.
                                 ______
                                 
              Questions Submitted to Gen. Wesley K. Clark
            Questions Submitted by Senator Richard C. Shelby

                            NATO ENLARGEMENT

    Question. What is the status of military-to-military meetings with 
respect to arrangements about intelligence gathering and intelligence 
sharing?
    Answer. [Deleted.]
    Question. For several years, I have been extremely concerned about 
the defense budget topline and the concomitant shortages we are 
experiencing in virtually every facet of defense spending, end strength 
goals and near term and long term readiness. These problems are 
especially vexing when one takes into account the fact that our troops 
are being deployed at a record pace. With this in mind, will 
enlargement allow us to decrease our force structure in Europe and 
apply the savings into those program areas that need it, like 
modernization? Is NATO enlargement just another ``event on the 
operational continuum'' that will push our forces to the breaking point 
more quickly than if NATO was not enlarged?
    Answer. NATO enlargement may not allow us to decrease our force 
structure in Europe. No immediate savings are evident.
    USEUCOM defines its force requirements primarily in terms of the 
force structure required to implement our peacetime and wartime 
taskings. This force structure based on studies begun in 1990, has been 
repeatedly re-validated in DOD and Congressional studies. The strategic 
concepts of shape and respond defined in the Quadrennial Defense 
Review, generate the requirements for the USEUCOM force structure.
    Shape.--The DOD complements other instruments of national power to 
shape or influence the international security environment. Forces 
permanently stationed abroad, forces rotationally deployed and 
temporarily deployed all contribute to shaping with programs such as 
defense cooperation, security assistance, training and arms 
cooperation. Although the impact of this concept is large, the force 
structure dedicated exclusively to shaping activities is a small 
portion of European Troop Strength. Engagement exercises can be 
manpower intensive but are of short duration and are typically 
conducted by in-theater response forces with augmentation from the 
reserve components. Small groups of staff officers at the embassies and 
on headquarters staffs manage security assistance. The Joint Contact 
Team is manned primarily by teams on temporary orders and individual 
reservists on temporary active duty. The Marshall Center has a 
permanent staff of under 200 personnel, and the German government pays 
many of these. U.S. leadership in the NATO arena is critical--we do 
this with forward presence and engagement activities.
    Respond.--The Joint Strategic Capabilities Plan and the U.S. 
response to NATO's Defense Planning Questionnaire are the primary force 
structure drivers for USEUCOM. Respond requires the ability to form on 
short notice a capable, interoperable, joint task force for commitment 
in the region or elsewhere. Reinforcing an existing structure already 
in the command is many times faster than reconstructing an organization 
that at the start of the crisis has major pieces missing. It is 
important that we continue our force contributions to NATO at 
approximately the current level. The present number of operations, and 
the dangers of a future that is still uncertain, make this a necessity. 
Furthermore, at a time when NATO adaptation requires decisions that 
will have impact for decades, American leadership is vital; that 
leadership is secured by our contribution to the Alliance's military 
capability. Respond also requires that USEUCOM respond to crises 
throughout the region as directed by the NCA. These events put 
tremendous stress on USEUCOM forces. There is little indication that 
these requirements will decrease in the future, and there is a real 
chance that they will increase.
    NATO enlargement is more than ``just another event on the 
operational continuum.'' It will mean a larger zone of security and 
stability in Europe thereby allowing the new democracies to flourish. 
It will also help heal old wounds in Europe encouraging abstention from 
costly arms buildups. As present operations tempo and personnel tempo 
for our land component, USAREUR, are near all-time highs, any 
additional NATO exercises or operations established as a direct result 
of NATO enlargement would have to be balanced by a corresponding 
decrease in U.S. participation in existing exercises and/or operations.

              SUPPORT FOR FAMILIES OF 1ST ARMORED DIVISION

    Question. General Clark, in a related question, (a) what steps have 
you taken to provide for the families of the soldiers from the 1st 
Armored Division in Germany who are being deployed to Bosnia for the 
second time in 18 months? (b) Do you see any evidence that this 
deployment will have a greater impact on the families of the soldiers 
who are participating in their third peacekeeping mission in 18 months? 
(c) Do you have assets to take care of these families? (d) If not, what 
do you need?
    Answer. (a) With the initial deployment, USAREUR developed and 
established an effective system for family support and assistance 
which, per USAREUR Regulation 608-2, our commanders ensure operates 
continuously. This family support system (FSS) is implemented in three 
phases, pre-deployment, deployment and post-deployment. Pre-deployment 
support consists of Family Support Group (FSG) Training, unit-level 
personal financial readiness training, Family Assistance Center (FAC) 
Certification, Rear Detachment Commander/Family Support Liaison (RDC/
FSL) Training, unit and community-level family assistance plans and a 
regular program of command information which confirms the unit and 
family partnership. Unit family support plans and community family 
assistance plans are coordinated and in place prior to deployment.
    Deployment support or sustainment requires the smooth networking of 
the various FSS systems within the community. Well-trained FSG's, 
RDC's, FSL's help maintain information flow and stability within the 
families. The FAC's operate for extended hours allowing greater 
flexibility for families to access services. 24-hour emergency service 
is offered in each community. Additional personnel augment existing FAC 
staff to allow flexible work schedules.
    Post-deployment preparation and assistance consists of coordinating 
reunion activities and providing information and training on reunion-
related family issues both to the returning soldier and the waiting 
family. Additionally, in anticipation of increased stress levels 
connected with reunion, counseling services are monitored and counselor 
support can adjusted from community to community as needed.
    (b) USAREUR deployed approximately 54 percent for the second time, 
and 1 percent for a third. Initial feedback from the families indicates 
that adjustment to this deployment is good. Families are knowledgeable 
about the available support services and their previous experience with 
deployment in Europe was mostly positive. The 1AD command made a point 
of notifying their personnel well in advance of this deployment, 
including providing specific end-of-deployment by individual where 
possible--with the period of time for this mission well-defined, 
although families are feeling some stress with this additional 
deployment, knowing when it will end eases some of the difficulty of 
the separation. The families undergoing a third deployment are of 
particular interest--their commands are well-aware of who they are and 
ensure appropriate support--however it is fact that first-time 
deployers generally have more family support requirements. There is no 
evidence to date that this deployment will have a greater impact on 
families than any previous deployment.
    (c) USAREUR is currently adequately resourced to deal with the 
deployment challenges, including personnel staffing at the Army 
Community Service (ACS) Facilities. Maintaining the current level of 
funding for family support programs will be sufficient to take care of 
the 1AD families. The staffing level and quality of personnel working 
in the FAC's directly impacts support to the families during 
deployment--essential to maintaining mission readiness and current Army 
OPTEMPO in Europe.
    (d) We currently have no additional needs/requirements to ensure 
adequate support for our 1AD families.

                         BOSNIA COST ESTIMATES

    Question. All Administration cost estimates that I have seen assume 
no military deployment, extended or otherwise, like Bosnia. In your 
opinion, is that wise or realistic and, if so, why? Let me ask a 
related question: what tradeoffs to modernization, R&D, end strength 
and readiness would have to be made if we faced another prolonged 
``engagement'' either simultaneously or subsequently to Bosnia?
    Answer. Senator, the Department of Defense has always responded to 
unforeseen, assigned missions, making tradeoffs when needed. Congress 
has always been reluctant to provide funds for unspecified military 
operations. And, the Congress has been very supportive of our troops in 
Bosnia and provided funding to reimburse the DOD. It would, from my 
point of view, be ideal if a mechanism could be found to provide funds 
for unforeseen contingencies in advance so that readiness impacts could 
be minimized, however that is a decision for the wisdom of the 
representatives of the taxpayers. With respect to tradeoffs if we faced 
another prolonged ``engagement'', I am afraid I can't answer with any 
fidelity from my seat as CINCEUR. Many factors would be involved such 
as what time of the year the engagement began, where it was, and what 
its magnitude was. The fundamental decisions on tradeoffs would have to 
be made by the Secretary of Defense with the advice from the Joint 
Chiefs of Staff. While the history of those tradeoffs indicates that 
there would be impacts to readiness and modernization in particular, I 
cannot speculate on what those might be.

                            NATO ENLARGEMENT

    Question. What type of contingencies may involve the United States 
if the three prospective nations are admitted to NATO? What steps are 
you taking to incorporate these possible scenarios into our military 
planning and budget?
    Answer. Article V contingencies: [deleted].
    Non-Article V contingencies: Non-Article V contingencies include 
humanitarian relief operation in the case of a natural disaster or 
influx of refugees. The latter could result from renewed hostilities in 
Bosnia or drastic economic downturn in Eastern Europe.
    [Deleted.]

                       NATO ENLARGEMENT LOGISTICS

    Question. It is my understanding that the European members of NATO 
lack the sustainment capability necessary for prolonged operations. 
Specifically, NATO's European members have inadequate Combat Support 
(CS) and Combat Service Support (CSS) elements and, therefore, NATO 
planners have no alternative except to rely heavily on the U.S. to 
provide that type of critical support for NATO operations. If NATO is 
weak in CS and CSS units, should we look to the three prospective 
members for that CS and CSS capability? Would this proposal improve 
NATO's capability to conduct sustained operation without U.S. 
logistical involvement?
    Answer. The support provided by our NATO allies is based on the 
planning principle of Collective Defense Benchmark. Within NATO we plan 
for combat capability for future not present possible scenarios--we are 
currently planning for the 1998-2004 period. A review of our allies 
current status shows that our European met all their CS requirements 
for the Allied Rapid Reaction Corps and the ACE Mobile Force Land. 
[Deleted.] Additionally, our European allies have recently made 
significant improvements in their CSS to these units--in fact Turkey 
recently met all their requirements. Another example of how the 
Europeans have met the CS/CSS obligations has been in Bosnia. In Both 
IFOR and now SFOR Logistics have been a national responsibility and our 
European allies have fulfilled their requirements.
    In regard to the three candidate nations the NATO staff has 
examined the full range of their combat and support capabilities 
through a highly intensive Defense Planning Questionnaire--we believe 
that they can become full partners within NATO and provide full combat 
ready and support units immediately upon assession. This report will be 
reviewed by an Office of the Secretary of Defense. Hungary will be able 
to provide outstanding engineering service support based on their 
proven results of supporting NATO Bosnian deployments. The Czech 
Republic has outstanding biological and chemical warfare capabilities. 
The Polish military has the most well-rounded capability in CS and CSS 
areas. However, we must not lose sight of the target--we are focused on 
developing all NATO forces for operations in the 2004 time-frame and 
the military three candidate countries will evolve into a inter-
operable functioning force structure.

                            NATO ENLARGEMENT

    Question. General Clark, is this proposal [Senator Shelby's 
proposal to look to the three prospective members to provide the CS/CSS 
capability in which he believes NATO is weak] credible? Do you believe 
this would promote tiered resourcing among NATO members or tension 
among members that is similar to the friction between the active Army 
and National Guard?
    Answer. NATO continues to maintain a robust capability to provide 
for the collective defense of the Allies and in response to a changing 
security environment is aggressively pursuing a strategic concept that 
increasingly relies on a contingency response capability. There are at 
present four NATO committees at work to assess specific country 
capabilities and costs; the results of these analyses will be briefed 
at the December 1997 ministerials. However, it is not unreasonable to 
predict aspirant future CS/CSS support to NATO, though it is not 
feasible at this time. We are not suggesting they specialize in CS/CSS.
                                 ______
                                 
           Questions Submitted by Senator Frank R. Lautenberg

           MILITARY CAPABILITIES OF PROSPECTIVE NATO MEMBERS

    Question. Based on NATO's experience working with the prospective 
members in the Partnership for Peace Program and in Bosnia, I'm 
interested in knowing your assessment of the strengths and weakness of 
their militaries.
    How will the addition of Poland, the Czech Republic and Hungary to 
NATO add to the alliance's ability to fulfill its collective defense 
mission?
    Answer. These countries have established militaries and 
infrastructure able to support NATO missions. Poland has a force of 
more than 200,000, roughly the size of the forces of the United Kingdom 
(228,000) and Spain (200,000). The Czech Republic and Hungary both have 
forces greater than 50,000, roughly the size of the armed forces of 
Portugal (56,000) and Canada (64,830). Combined, the three invitees 
will add significant numbers of soldiers, sailors and airmen to the 
Alliance, including units with unique and specialized capabilities such 
as chemical decontamination and combat engineering.
    The three countries also bring a fairly robust infrastructure: NATO 
would immediately attain 8 Rapid Reaction Brigades capable of 
deployment and reinforcement of other NATO forces; 96 paved runways 
capable of handling C-130 aircraft; 361,000 KM of roadway; 41,000 km of 
standard gauge railway; 22 merchant marine ships, 6 of which have total 
of 70,000 tons of roll-on/roll-off capability. Additionally, with the 
growth of three strong democratic governments in Central Europe, within 
the umbrage of NATO, the possibility of regional conflict is reduced, 
thereby increasing the strategic depth of security within Europe.
    Question. What is the greatest strategic value of each prospective 
member to the NATO alliance?
    Answer. From an alliance perspective the greatest value is the 
collective integration of three former totalitarian states into our 
democratic alliance--this has increased the strategic depth and 
security within Europe, thereby extending NATO's zone of stability and 
security further eastward across the European Continent. Additionally, 
as European democracies mature, it will allow NATO, through our PfP 
program, to pro-actively engage the NIS of the Caucuses and the Stans, 
giving these emerging countries a democratic security model in this 
highly volatile area of the world.
    Poland has the most developed military of the three and occupies a 
large amount of key territory in the center of Europe. They have 
already taken on a leadership role in their region by forming joint 
NATO-interoperable peacekeeping battalions with both Ukraine and 
Lithuania, efforts which not only improve its ability to deploy to 
peacekeeping operations, but which also reassure both Kiev and Vilnius 
that their future lies with Europe. It is also working with Germany and 
Denmark to form a trilateral mechanized infantry corps that would be 
fully integrated into the NATO force structure.
    The Czech Republic's strategic role is different but not any less 
important. It serves as a political role model for Central and Eastern 
Europe. It has made great progress in establishing broad democratic 
control over its armed forces since 1989 it has been a fully 
functioning democracy. Bilaterally, the Czechs have also contributed to 
the security of Central Europe by resolving historical disputes and 
developing close ties with Germany. In 1993, they signed a military 
cooperation agreement with Germany, and they have worked closely with 
the German military since then.
    Hungary's geographical location has already proven its strategic 
value. IFOR and SFOR have used Hungary as a launch point for two 
years--NATO troops are stationed there now and operating missions from 
there now. Further, Hungary participates in several Central-European 
regional cooperation organizations that indirectly reduce the effects 
of risks and instability. Hungary has concluded more than 170 
cooperation agreements with its neighbors, encompassing a broad variety 
of fields. Especially noteworthy are agreements with Slovenia and Italy 
to form a trilateral peacekeeping brigade; an agreement with Romania to 
form a combined peacekeeping battalion; and a treaty with neighboring 
Slovakia on good-neighborly relations and friendly cooperation that 
covers everything from protecting the environment, to protecting 
minorities, to pledging never to use force against each other.
    Question. What are the most serious military deficiencies of each 
as candidates for NATO?
    Answer. The Czechs, Poles and Hungarians are all focusing on the 
deficiencies that we believe present the greatest challenges: 
personnel; adoption of NATO doctrine, training, and interoperability. 
The first area they need to address is the personnel systems within 
their militaries. None of the three countries possess a professional 
NCO Corps based on our Western model; additionally they need to attract 
and recruit professional officers capable of functioning within 
civilian democratic control. Each of the countries recognize these 
personnel problems and have plans in place to remedy the situation. The 
military doctrine of the three countries was based on old Soviet 
tactics, but each country has begun to restructure their forces along 
the NATO model of mobility and deployability--they have demonstrated 
their recent improvements while participating with NATO forces in 
Bosnia. Since the fall of the Berlin Wall these countries devoted their 
resources toward developing their market economies and naturally let 
their commitment has a goal of military forces become less of a 
priority. Today each nation is committed to matching the NATO standard 
of approximately 2 percent of their GDP toward defense spending. A 
return to full combat capability will not occur overnight, but with the 
proper allocation of resources each of the countries will achieve the 
proper level of training, IAW NATO Doctrine, within the current six 
year Deliberate Planning Process. Finally, interoperability is a common 
challenge facing the three countries, particularly in the regard to 
radars, communication, and navigational equipment. Their present Soviet 
vintage military equipment will need to be replaced over the next 6 
years, as it exceeds its useful life-span. As the equipment is 
replaced, NATO interoperability issues will be resolved. As mentioned 
earlier, with a 2 percent GDP commitment to defense spending force 
modernization/interoperability issues have been addressed by the three 
countries. Even in their present state, the three nations can provide 
real combat capability to NATO--they will be able to meet NATO 
requirements for Article V and non-Article V operations immediately 
upon accession into NATO. It is NATO's intent to make use of their 
strengths right away and take the long term view in fixing these 
deficiencies.
    Question. How difficult will it be to fully integrate these new 
members and how long will it take?
    Answer. Each nation will be able to immediately contribute forces 
for NATO Article V and non-Article V operations. NATO will soon 
implement a new Alliance command structure which reflects the new 
reality of the changed security environment in Europe. The new command 
structure provides the needed flexibility between strategic, regional, 
and sub-regional command relationships. This will allow the three 
countries to be immediately integrated into the NATO command 
structure--a full partner from day one. We are not starting from 
scratch--all three have viable militaries that are participating 
successfully with NATO units right now in SFOR. Like every military, 
each country has its strengths and weaknesses. SHAPE planners are 
developing Target Force Goals for the three invitees for release in 
February 1998 that will take their strengths and put them to use 
immediately upon accession. This iterative process will continue 
through each NATO force planning cycle to further increase their 
integration into more complex missions--just as we do for other NATO 
members. Full integration should be looked at in terms of 10-15 years, 
but with each country contributing something important to the NATO 
combat mission.
    Question. What can each prospective member offer the alliance 
militarily in the interim?
    Answer. Each country brings a well exercised and proven military 
capability immediately upon accession into NATO. They have participated 
in numerous U.N. and coalition operations ranging from on-going Peace-
Keeping operations to Humanitarian Relief missions--they are 
experienced. As stated each nation also provides a significant NATO 
compatible infrastructure and associated facilities.
    Poland.--With the largest and most capable military in Central and 
Eastern Europe, Poland has brought its 25 years of peacekeeping 
experience to NATO's efforts in Bosnia. Since 1974, Poland has 
participated in more peacekeeping operations than any former Warsaw 
Pact country, and it currently has more personnel in U.N. peacekeeping, 
military observer and civilian police missions than any other country. 
It currently has a 400-person airborne infantry battalion in SFOR's 
U.S. sector, a 355-person logistics battalion in the Golan Heights 
(UNDOF), an infantry battalion and military hospital (632 troops) in 
Lebanon (UNIFIL), 53 soldiers in Eastern Slavonia (UNTAES), and troops 
supporting eight U.N. observer missions. Poland is currently working to 
establish joint peacekeeping battalions with Ukraine and Lithuania, and 
the Poles have contributed to U.N. efforts in Rwanda (UNIMIR), Georgia 
(UNOMIG), Tajikistan (UNMOT), Iraq/Kuwait (UNIKOM), the Western Sahara 
(MINURSO) and Cambodia (UNTAC). Poland has declared its willingness to 
commit all of its operational military forces to NATO. One-third will 
be designated as ``NATO-Assigned,'' meaning they will be fully 
integrated into the NATO force structure and placed under the 
operational command or control of a NATO commander when called upon. 
The types of units to be assigned to NATO include airborne, armor and 
air defense units, as well as fighter squadrons and transport aircraft. 
Poland will designate the remaining two-thirds of its armed forces as 
``NATO Earmarked,'' meaning they could be put under NATO operational 
command or control in time of need.
    Czech Republic.--The Czech Republic currently has a 620-person 
mechanized battalion in SFOR, and prior to that it contributed an 870-
person mechanized battalion to IFOR and a 985-person infantry battalion 
in UNPROFOR. The Czechs also deployed a 200-man decontamination unit to 
Desert Shield/Desert Storm and have provided observers to U.N. observer 
missions in Croatia (UNTAES), the Prevlaka Peninsula (UNMOP), the 
Former Yugoslav Republic of Macedonia (UNPREDEP), Mozambique (UNOMOZ), 
Georgia (UNOMIG) and Liberia (UNOMIL). Since its DPQ submission, Czech 
officials have noted that they are willing to earmark up to 90 percent 
of their operational forces to NATO in times of crisis. The Czech 
Republic is also expected to assign to NATO's force structure elements 
of both their immediate and rapid reaction brigades, as well as fighter 
and combat helicopter squadrons, search and rescue units, chemical 
defense units, and mechanized and artillery brigades.
    Hungary.--Hungary contributed a 400-500 man engineer battalion to 
conduct bridging and other engineering operations in support of IFOR. 
This battalion, now reduced in number to 200-250, is currently deployed 
in support of SFOR. Hungary's support to IFOR and SFOR also included 
allowing U.S. and NATO forces to transit its airspace, station at its 
airfields and use its facilities. Over 80,000 U.S. military personnel 
rotated in and out of IFOR and SFOR assignments through the Hungarian 
airbase at Taszar. U.S. armor units calibrate their guns at Hungarian 
ranges prior to deploying to Bosnia, and again upon re-deploying. Past 
Hungarian peacekeeping contributions have included a 39-troop 
contingent in Cyprus (recently increased to more than 100) as part of 
an Austrian battalion assigned to UNFICYP; a 26 soldier and 15 
policemen contingent in the Sinai (MFO); and 20 observers in Iraq/
Kuwait (UNIKOM), Angola (UNAVEM), Cambodia (UNTAC), Mozambique 
(UNOMOZ), Tajikistan (UNMOT), and Georgia (UNOMIG). Hungary may also 
provide forces to the U.N. Standby Forces High Readiness Brigade 
(SHIRBRIG). Presently, Hungary has assigned to NATO both immediate 
reaction and rapid reaction forces, consisting of combat brigades and 
battalions, support brigades and battalions, fighter squadrons, 
artillery units, and anti-air, anti-armor and combat helicopter assets.

                            EUROPEAN ALLIES

    Question. Our European allies have said they can cover the cost of 
NATO expansion through reallocation of funds in their defense budgets.
    Is this true?
    Answer. Some of NATO allies, notably France and Germany, believe 
that sufficient resources are currently available within the existing 
NATO budget, combined with reallocating funds from their budgets, to 
pay their fair share of the costs of expansion. Our allies share our 
mutual commitment to enlargement and only want to be assured that if 
the funds required are not found within the existing NATO budget that 
they, like the U.S., will only pay their fare-share utilizing NATO and 
national resources. I believe they will honor this commitment.
    Question. What really is the limit of their ability to reprogram 
funds to cover the costs of NATO expansion?
    Answer. Members of the Alliance contribute to common funded 
accounts according to agreed-upon cost shares. The three new members 
will also share common expenses. Based on the stated military 
requirements, NATO is computing the cost of enlargement for the common 
funded accounts to be delivered for the upcoming ministerial. The 
analysis was based on the minimum military requirements for 
interoperability, C\3\I, air defense and reinforcement; costing was 
based on typical NATO military common-funded facilities.
    Based on their initial analysis it appears that the shared 
infrastructure cost of enlargement will be approximately $1.5 billion 
over a 10-year period; approximately $4.3 million of requirements have 
been identified for 1998. Based on the U.S. 25 percent contribution to 
the infrastructure budget our cost will be $375 million over the 10 
year period. The ability of NATO nations to reprogram their funds to 
cover the costs of expansion will be determined by each individual 
nation.

                         NATO STRATEGIC CONCEPT

    Question. In 1991 NATO adopted a ``strategic concept'' that called 
for making our forces more deployable, lighter, and easier to project.
    Have our European allies adapted their force structure to meet the 
1991 strategic concept?
    Answer. Our allies have begun to adapt their force structure but 
many projected requirements have not been met. In 1991, the U.S. 
adopted a power-projection strategy. We decided, in order to be able to 
respond flexibly to a wide range of possible contingencies, our forces 
would require effective surveillance and intelligence, flexible command 
and control, mobility within and outside the regions, strong defenses 
against nuclear, biological and chemical weapons and missiles, and 
appropriate logistics and transport capabilities.
    In response to those decisions, NATO developed force goals that 
emphasize those requirements. Many of those projected requirements have 
not been met. In addition to lift, there are substantial support assets 
required at the core level. For example, construction engineers, heavy 
equipment lifters, port offloaders, mobile maintenance, mobile 
medicine, and field hospitals. Current NATO force goals accommodate all 
of these, and are in the process of being met.
    Question. Do we expect them to make further force structure 
adjustments to accommodate the inclusion of new members?
    Answer. Yes. The decision to invite new NATO members has 
implications for defense planning. NATO is currently examining how 
enlargement will affect NATO's defense requirements. In light of this 
ongoing analysis, any further comments on specific force structure 
adjustments on the part of our European allies would be premature at 
this time.
    Question. Since defense spending in the countries of our European 
allies has been on the steady decline, how can they do this?
    Answer. Almost all allies have made significant reductions in their 
defense expenditure, both in real terms and as a percentage of GDP. In 
some countries, defense budgets risk further reductions as governments 
continue efforts to meet their financial targets. A few countries are 
projecting real growth in defense expenditure but most are anticipating 
zero growth or further reductions. The process of adapting the 
Alliance's new force structure has proved more expensive for some 
countries than had been expected and there are now major shortfalls in 
some essential modernization programs, especially relating to strategic 
capabilities.
    The proportions of GDP devoted to defense vary considerably between 
allies. This needs to be addressed to ensure more equitable burden 
sharing. Provided that overall defense performance is not jeopardized, 
the efforts of many allies to make more effective use of national and 
collective resources to accommodate the inclusion of new members can 
make an important contribution to sustaining capabilities and programs. 
Allies performance in meeting resource guidance will be assessed in 
successive defense reviews; and within this broad guidance, our allies 
should aim to take into account the cost implications of enlargement.

                                 THREAT

    Question. A key issue that many members of Congress will be 
considering as we contemplate the issue of NATO expansion is the threat 
level in Europe and the likelihood that U.S. troops would be involved 
in a conflict on behalf of a new NATO member.
    What is the threat in Europe? Are we more likely to see a flare up 
of border clashes or the type of civil ethnic strife we have seen in 
the former Yugoslavia?
    Answer. No large-scale conventional threat to NATO in the near-term 
is foreseen. However, the threats and risks to the alliance are varied. 
The nations of the Alliance are faced with regional instability, 
Islamic extremism, nationalism, state-sponsored terrorism, 
proliferation of weapons of mass destruction, organized crime, and 
economic and political instability. [Deleted.]
    Question. What are the foreseeable threats to the national security 
of each prospective member of NATO that might involve the use of NATO 
troops?
    Answer. [Deleted.]
    Question. As NATO expands, how likely is it that Russia would want 
to or be able to build up its forces and pose a threat to NATO 
countries?
    Answer. [Deleted.]
    Question. Do NATO allies and incoming members share the American 
assessment of the threat in Europe? What are the differences?
    Answer. NATO allies and Invitees share the American assessment of 
the threat in Europe, however, the degree and priority of concern vary.
    [Deleted.]
    NATO allies, incoming members, and the U.S. recognize the same 
threats to the security of Europe, although degree of concern will vary 
due to geography and history.

                                 RUSSIA

    Question. The Administration has said that, theoretically, Russia 
would be able to join NATO if it meets the criteria. However, the 
Administration has also said that, so far, Russia has said it doesn't 
want to be a part of NATO.
    Regardless of what the Russians want, I am curious about our long-
term thinking regarding Russia. Is our ultimate military goal to 
include Russia as a full-fledged member of NATO?
    Answer. I support the position that ``NATO membership is open to 
all European democracies who express interest, meet the requirements of 
membership and whose inclusion the Alliance believes will contribute to 
overall security of its members. The fact is, if we ever get to the 
point where Russia and NATO are seriously talking about membership, it 
would be a very different world--a very different Russia, and a very 
different NATO, in a very different Europe.''
    The question of Russian membership in NATO is a political one that 
would have to be decided by the collective NATO membership. At the 
moment, NATO is more interested in institutionalizing the processes 
embodied in the NATO-Russia Founding Act and engaging the Russians via 
its provisions.
    Question. Is including Russia as a full-fledged member a good or 
bad idea in your view? Why?
    Answer. Russian membership in NATO would have to be weighed 
carefully. Membership would require Russia to meet all the essential 
political criteria and military obligations. As you know, Russia is 
both a European and Asian nation with a complex security equation. 
Russian membership in NATO would require a fundamental transformation 
of NATO from a Euro-Atlantic Security organization to a Atlantic-
Eurasian alliance, redefining the Alliance's Area of Responsibility and 
a reassessing of the security environment and risks. This would 
necessitate the reorganization of the NATO military command structure. 
With this in mind and the associated economic costs, many NATO nations 
would not be disposed to supporting Russian membership in NATO. Moscow 
as well would probably have several reservations associated with the 
political and military requirements of membership. However, Russia and 
NATO have just begun the implementation of the special relationship 
codified in the Founding Act. The Founding Act reaffirmed the 
determination of NATO and Russia to overcome the vestiges of 
confrontation, strengthen mutual trust and cooperation, and commitment 
to achieving the shared goal of a stable, peaceful, and undivided 
Europe. This document will be the basis for guiding the relationship 
between NATO and Russia for the near-term and foreseeable future.

                          INTELLIGENCE SHARING

    Question. As I understand it, new NATO members will have the same 
access to intelligence information that current NATO allies have.
    Are you confident that the prospective NATO members have severed 
all ties with Russian intelligence and security agencies?
    Answer. [Deleted.]

          AMERICAN MILITARY RELATIONSHIP WITH RUSSIAN MILITARY

    Question. I'm curious about your relationship with the Russian 
military.
    How will NATO expansion affect the American military's relationship 
with Russia's military leaders? Has it already had an impact? Are they 
less or more cooperative? Do you expect that to change?
    Answer. My experience with the Russian military has been very 
positive. I work daily with Gen. Lt. Krivolapov, my Deputy for Russian 
Forces in SFOR. A common understanding and appreciation of the SFOR 
mission has evolved at all levels, strategic, operational, and 
tactical. In IFOR/SFOR, NATO and Russia have conducted an unprecedented 
military to military consultative process, involving numerous meetings 
with the Russian Minister of Defense and Chief of the General Staff and 
routine, working discussions with my Gen. Lt. Krivolapov, who is 
permanently assigned to my headquarters.
    Recently, I met with Russian MOD Sergeyev in the Netherlands. 
Russian Chief of the General Staff, Gen. Kvashnin and I conducted a 
joint visit to Bosnia to see first-hand Russian and U.S. soldiers 
implementing the difficult tasks associated with the SFOR mission. I 
have received an invitation from Col. Gen. Kvashnin and plan to visit 
in early 1998. This consultative process has strengthened mutual 
understanding and respect and provided an essential communication link 
between NATO and Russian military authorities. Moreover, NATO and 
Russian military forces have been working shoulder to shoulder in 
Bosnia for almost two years. Mutual trust and confidence has developed 
between NATO and Russian soldiers. The numbers of Russian soldiers 
exposed to NATO and U.S. military operations in SFOR is impressive, 
particularly in light of the limited exposure of the Russian military 
to their western counterparts since the end of the Cold War.
    In Bosnia, over 4,000 Russian Airborne Troops have served with U.S. 
and NATO forces in a common mission with common tactics and common 
rules of engagements. This number includes 2 Russian General Staff 
Representatives to SHAPE, 4 Brigade Commanders, 7 Russian Airborne 
Forces Generals, 9 Battalion Commanders, 52 Company Commanders, 196 
Platoon Commanders, and over 3,400 other officers and soldiers. This 
operation represents the most significant U.S.-Russian military 
cooperation since War II and I am strongly in favor of the Founding 
Act's mandate to develop this relationship further based on the SFOR 
operation.
    I am encouraged by Russia's establishment of a permanent mission in 
Brussels, headed by Gen. Lt. Zavarzin. Gen. Lt. Zavarzin has already 
visited my headquarters. I strongly support Russia's robust 
participation in the PfP program, including permanent representation in 
the Partnership Coordination Center in Mons. It is my hope that Russian 
will follow through with their plans to develop a new Individual 
Partnership Program for PfP. The Russian military is also interested in 
establishing a permanent military presence at my headquarters in Mons 
and support the establishment of a permanent NATO presence with Russian 
MOD/GS in Moscow. It is my goal to continue to develop a strong, stable 
military to military relationship with Russia, building on the 
achievements in IFOR and SFOR and the Founding Act.

                            COMMITTEE RECESS

    Chairman Stevens. If there is nothing further, the 
committee will recess until tomorrow morning at 10 a.m.
    [Whereupon, at 11:26 a.m., Wednesday, October 22, the 
committee was recessed, to reconvene at 10 a.m., Thursday, 
October 23.]


      NORTH ATLANTIC TREATY ORGANIZATION [NATO] ENLARGEMENT COSTS

                              ----------                              


                       THURSDAY, OCTOBER 23, 1997

                                       U.S. Senate,
                               Committee on Appropriations,
                                                    Washington, DC.
    The committee met at 10:01 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Ted Stevens (chairman) presiding.
    Present: Senators Stevens, Gorton, Campbell, Hutchison, and 
Inouye.

                 GAO STUDIES ON NATO ENLARGEMENT COSTS

                       GENERAL ACCOUNTING OFFICE

STATEMENT OF HENRY L. HINTON, JR., ASSISTANT 
            COMPTROLLER GENERAL FOR NATIONAL SECURITY 
            AND INTERNATIONAL RELATIONS
ACCOMPANIED BY:
        HAROLD J. JOHNSON, JR., ASSOCIATE DIRECTOR FOR INTERNATIONAL 
            RELATIONS AND FOREIGN TRADE ISSUES, NATIONAL SECURITY AND 
            INTERNATIONAL AFFAIRS DIVISION
        F. JAMES SHAFER, JR., ASSISTANT DIRECTOR FOR INTERNATIONAL 
            RELATIONS AND FOREIGN TRADE ISSUES, NATIONAL SECURITY AND 
            INTERNATIONAL AFFAIRS DIVISION

                 OPENING STATEMENT OF HON. TED STEVENS

    Chairman Stevens. Good morning. I appreciate the witnesses 
being here. This is a strange day in the Senate. There is a 
markup in the Commerce Committee and another one in another 
committee, and we have two votes at 11 o'clock. So I would 
prefer that we just go ahead and have an opportunity for you to 
make your statement, and, hopefully, there will be other 
Senators here and if they have questions they will be able to 
ask them. If not, they have your statement, Mr. Hinton, and we 
would ask that you respond to questions if they decide to 
submit them.
    Again, we are continuing the hearings we have had to try 
and get a better understanding of what the NATO expansion costs 
are going to be. GAO has completed two studies which evaluate 
the NATO costing estimates. These reports raise some questions 
about the accuracy and reliability of the estimates that have 
been provided already by others, and we were told yesterday 
that there is a new costing process going on at NATO and there 
will be a ministerial meeting in NATO in the first weeks of 
December.
    We will probably review those after the first of the year. 
But we want to work with you throughout the consideration of 
the debate on the NATO expansion, and I think that you will 
find that Congress will put strong emphasis on the results of 
your studies.
    We have your statements in the record, and let me see if 
Senator Campbell has an opening statement.
    Senator Campbell. No; I have none, Mr. Chairman, other than 
to say I am sorry I have been in and out. As you can tell by 
this turnout this morning, we have many conflicts. But I wanted 
to thank you for the hearing. I have been reading with interest 
the testimony, and I think my big concern, like many of the 
members of the committee, has not been policy as much as it has 
been what it is going to cost the taxpayers.
    I just appreciate your doing this hearing. Thank you.
    Chairman Stevens. Mr. Hinton, we have your statement for 
the record, but I want you to give your statement to the full 
extent that you wish to present it. You have with you Mr. 
Harold Johnson, I see, and Mr. James Shafer.
    Mr. Hinton. Yes, sir, two of my colleagues have been 
actively involved in looking at NATO issues.
    Chairman Stevens. Well, let us proceed with your statement 
and see who else comes before we start the question period.
    Mr. Hinton. Very well. Thank you, Mr. Chairman. I am 
pleased to be here today to help the committee sort through 
some of the issues related to the cost and financial 
obligations of expanding NATO.

                        NATO enlargement issues

    My testimony today will address three issues--one, current 
U.S. costs to support NATO's common budgets and other funding 
that supports relations with central and East European nations 
and promote NATO enlargement; two, NATO's defense planning 
process, which will form the basis for more definitive cost 
estimates for an enlarge alliance; and, three, our evaluation 
of the recent DOD study of NATO expansion and a comparison of 
DOD's studies with studies by CBO and the RAND Corp.
    Mr. Chairman, in a few moments I am going to be referring 
to the tables of my prepared statement as I go through my 
summary.
    To begin, Mr. Chairman, I would like to point out that the 
ultimate cost of NATO enlargement will be contingent on several 
factors that have not yet been determined. Specifically, NATO 
has yet to formally define its future strategy for defending 
the expanded alliance or the force and facility requirements of 
the newly invited states. Nor has NATO determined how costs of 
expanding the alliance will be financed.
    NATO's process for doing so is underway and is expected, as 
you said, Mr. Chairman, to be completed later next year. And 
right now the date I have is June 1998 when it will be 
completed.

               U.S. contributions to NATO common budgets

    Now let me turn briefly to the U.S. contributions to NATO's 
common budgets and other funding sources. As it does now, the 
United States will fund its share of NATO enlargement primarily 
through contributions to the three common budgets. The NATO 
security investment program pays for infrastructure items that 
are over and above the needs of the member nations, including, 
for example, communication links to NATO headquarters or 
reinforcement reception facilities such as increased apron 
space at existing airfields.
    The military budget pays for NATO's AWACS program and 
military headquarters cost. The civil budget pays primarily for 
NATO's international staff and operations and maintenance costs 
for its civilian facility at Brussels.
    For fiscal year 1997, the U.S. contribution for the three 
common budgets was about $470 million: $172 million for the 
security investment program, $252 million for NATO's military 
budget, and about $44.5 million for NATO's civil budget.
    Any increases to the U.S. budget accounts would be 
reflected primarily through increased funding requests for the 
DOD military construction budget from which the security 
investment program is funded, the Army's O&M budget, from which 
the military budget is funded. Both of those accounts reside in 
the 050 budget function. And last the State Department's 
contributions to international organizations from which the 
civil budget is funded. That is the 150 account.
    In addition, the United States could choose to help members 
in their efforts to meet their NATO membership obligations 
through continued foreign military financing grants and/or 
loans, or through the international military education and 
training grants, and joint exercises.

                Other assistance to candidate countries

    The three candidate countries and other countries have been 
receiving such assistance since the inception of the 
Partnership for Peace Program, and this has enabled some of 
these countries to be more prepared for NATO membership. In 
fiscal year 1997, over $120 million was programmed for these 
activities, and about $60 million of this amount was targeted 
to the three candidates for NATO membership.
    This is strictly bilateral assistance that may assist the 
candidates and other countries' participation in PFP to meet 
certain NATO standards, but it is not directly related to NATO 
decisions concerning military requirements or enlargement. Any 
increased funding for this bilateral assistance would be funded 
through the international affairs or national defense budget 
functions.

                     NATO defense planning process

    With regard to NATO's defense planning process, NATO 
planners are now developing military requirements and are close 
to completing their analysis. These requirements will be 
ultimately translated into costs eligible for common funding. I 
should point out, Mr. Chairman, that, according to officials at 
the U.S. mission to NATO, it is unlikely that any additional 
military capability requirements will be placed on NATO members 
over and above the force goals that they have already agreed to 
provide.
    In other words, if current force goals are attained, NATO 
will have sufficient forces to respond to likely contingencies 
in the current and new member countries. Therefore, it can be 
concluded that although enlargement of the alliance is another 
reason for current allies to attain their force goals, it will 
not add any new, unknown costs to existing members' force 
plans. Nonetheless, this is a very important issue and stresses 
the need for our allies to meet their force goals.
    NATO officials plan to present their cost estimates for 
approval at the NATO defense ministerial meeting in early 
December. However, it will not be until June 1998 that NATO 
will make decisions about whether or how much to increase the 
common budgets, which would then be shared among current and 
new members. Until this has been done, Mr. Chairman, the 
implications for the U.S. contributions to NATO's common 
budgets will be unclear.
    If you could turn to attachment I of my prepared statement, 
there is a table about milestones for decisionmaking around 
NATO enlargement. I would like to call your attention to the 
middle section of that table, which lays out the various 
reports that are now being prepared at NATO that will be 
considered as they go through the decisionmaking process this 
December and carrying forward through June 1998.
    You can see that those reports cover requirements, commonly 
funded items, infrastructure, communications, interoperability 
issues, and the studies that will eventually lead to cost 
estimates.

         Comparison of DOD, CBO, and RAND enlargement estimates

    Last, Mr. Chairman, let me turn to the cost studies on NATO 
enlargement. As you know, CBO, DOD, and RAND developed cost 
estimates for enlarging NATO before invitations were extended 
to Poland, Hungary, and the Czech Republic and, therefore, 
before NATO had assessed its current military needs or 
developed military requirements that could be used to make more 
accurate cost estimates.
    We found the estimates in these studies to be speculative, 
and that the ranges of estimates, from $10 to $125 billion, to 
be substantially different depending upon the assumptions that 
were used. In some instances, the cost range estimates overlap. 
However, this may be coincidental, since the assumptions and 
force postures used to develop the estimates were different.
    Thus, it is not surprising that the debate on this issue 
has been surrounded by some confusion. In August, Mr. Chairman, 
we issued a report in response to a request by Messrs. Gilman 
and Hamilton of the House International Relations Committee 
evaluating DOD's study and comparing DOD's estimate to the 
estimates by CBO and RAND.
    An analysis of DOD's cost estimate to enlarge NATO 
indicates that its key assumptions were generally reasonable 
and were largely consistent with the views of United States, 
NATO, and foreign officials that we spoke with. In particular, 
the assumption that large-scale conventional security threats 
will remain low significantly influenced the estimate. However, 
DOD's lack of supporting cost documentation and its decision to 
include cost elements that were not directly related to 
enlargement call into question the overall estimate.
    Because of the uncertainties associated with enlargement 
and DOD's estimating procedures, the actual cost of NATO 
enlargement could be substantially different from DOD's 
estimated cost of about $27 to $35 billion.
    If I could have you turn to attachment II of my prepared 
statement, we have provided a table that will help you see how 
DOD broke out the $27 to $35 billion estimate. There are a 
couple points that I would like to mention.
    In the first two columns of the table, where you see the 
new member share and the current allies' share, DOD's 
assumption is that the new members and the allies would pay 
their share of those costs. There are indications that direct 
enlargement, which is the third line down, that NATO has gone 
in and visited with some of the new invitees, and that some of 
the costs for infrastructure improvements may be less than what 
they had originally anticipated. This means that those costs 
that you see in that third line may be lower.
    One point that I would like to mention concerns the middle 
line dealing with the current members' reinforcement 
enhancements. Throughout our study of DOD's work, we have not 
seen any comprehensive assessment of where the allies stand in 
terms of meeting their current force goals.
    This is a very important point, as NATO proceeds in 
implementing its new defense strategy, and we have not seen 
that. We have anecdotal information about various countries in 
terms of what they have done, but we have not seen a 
comprehensive assessment across all the allies about where they 
are in meeting the force goals.
    As I mentioned, CBO and RAND developed a range of cost 
estimates for NATO enlargement, including estimates that employ 
a defense strategy similar to DOD's. That is, each member would 
have a basic self-defense capability and the ability to rapidly 
receive NATO reinforcements. CBO's estimates range from $61 to 
$125 billion. RAND's estimates range from $10 to $110 billion.
    If you would turn to the last page of my prepared 
statement, Mr. Chairman, we have attempted to capture these 
three studies in this table. There are several factors that 
account for the differences between DOD's estimate and the 
estimates of CBO and RAND.
    For example, CBO assumed a much larger reinforcement force 
and much more extensive modernization, infrastructure, and 
training costs than DOD did. RAND, on the other hand, assumed a 
somewhat larger reinforcement force and higher training and air 
defense modernization costs than DOD did.

                           PREPARED STATEMENT

    Mr. Chairman, that concludes my opening statement. My 
colleagues and I would be happy to address any questions you or 
the other members of the committee may have.
    [The statement follows:]
               Prepared Statement of Henry L. Hinton, Jr.
    Mr. Chairman and Members of the Committee: I am pleased to be here 
today to help the Committee sort through some of the issues related to 
the cost and financial obligations of expanding the North Atlantic 
Treaty Organization (NATO). My testimony today will address three 
issues: (1) current U.S. costs to support NATO's common budgets and 
other funding that supports relations with Central and East European 
nations and promotes NATO enlargement; (2) NATO's defense planning 
process, which will form the basis for more definitive cost estimates 
for an enlarged alliance; and (3) our evaluation of the recent 
Department of Defense (DOD) study of NATO expansion and a comparison of 
DOD's study with studies of the Congressional Budget Office (CBO) and 
the Rand Corporation.

                        SUMMARY OF OBSERVATIONS

    The ultimate cost of NATO enlargement will be contingent on several 
factors that have not yet been determined. Specifically, NATO has yet 
to formally define (1) its strategy for defending the expanded 
alliance, (2) force and facility requirements of the newly invited 
states, and (3) how costs of expanding the alliance will be financed. 
Also unknown is the long-term security threat environment in Europe. 
NATO's process for determining the cost of enlargement is underway and 
expected to be completed by June 1998.
    In fiscal year 1997, the United States contributed about $470 
million directly to NATO to support its three commonly funded budgets, 
the NATO Security Investment Program (NSIP), the military budget, and 
the civil budget. This is about 25 percent of the total funding for 
these budgets. It is through proposed increases to these budgets, 
primarily the NSIP and to a lesser extent the civil budget, that most 
of the direct cost of NATO enlargement will be reflected and therefore 
where the United States is likely to incur additional costs.
    Additionally, over $120 million was programmed in fiscal year 1997 
for Warsaw Initiative activities in the three countries that are 
candidates for NATO membership and other Partnership for Peace (PFP) 
countries.\1\ This money was provided to help pay for Foreign Military 
Financing grants and loans, exercises, and other PFP-related 
activities. Funding for these activities will continue, but the 
allocation between the candidates for NATO membership and all other PFP 
participants may change over time. This funding is strictly bilateral 
assistance that may assist the candidate countries and other countries 
participating in PFP to meet certain NATO standards, but it is not 
directly related to NATO decisions concerning military requirements or 
enlargement.
---------------------------------------------------------------------------
    \1\ In 1994 NATO launched a wide-ranging cooperative effort--known 
as PFP--with nonmember countries to promote democracy, expand 
cooperation, and strengthen relationships between NATO and nonmember 
countries. Participation of countries in PFP plays a role in NATO's 
decisions regarding expansion. For further information see ``NATO 
Enlargement: U.S. and International Efforts to Assist Potential New 
Member States'' (GAO/NSIAD-97-164, June 27, 1997).
---------------------------------------------------------------------------
    NATO defense planners are now developing military requirements 
through their defense planning process and are close to completing 
their analyses. These requirements will ultimately be translated into 
costs eligible for common funding. NATO officials plan to present their 
cost estimates for these items for approval at the NATO defense 
ministerial meeting in early December 1997. However, it will not be 
until June 1998 that NATO will make decisions about whether or how much 
to increase the common budgets, which would then be shared among 
current and new members. Until this has been done, the implications for 
the U.S. contributions to NATO's common budgets will be unclear.
    As you know, DOD, CBO, and Rand developed cost estimates for 
enlarging NATO before invitations were extended to Poland, Hungary, and 
the Czech Republic and therefore before NATO had assessed its current 
military needs or developed military requirements that could be used to 
make more accurate cost estimates. Thus, the ranges of these 
estimates--from $10 billion to $125 billion--are substantially 
different, depending on the assumptions used. In some instances, the 
cost range estimates overlap; however, this may be coincidental, since 
the assumptions and force postures used to develop the estimates were 
different. Thus, it is not surprising that the debate on this issue has 
been surrounded by some confusion.
    Our analysis of DOD's cost estimate to enlarge NATO indicates that 
its key assumptions were generally reasonable and were largely 
consistent with the views of U.S., NATO, and foreign government 
officials.\2\ In particular, the assumption that large-scale 
conventional security threats will remain low significantly influenced 
the estimate. However, DOD's lack of supporting cost documentation and 
its decision to include cost elements that were not directly related to 
enlargement call into question its overall estimate. Because of the 
uncertainties associated with enlargement and DOD's estimating 
procedures, the actual cost of NATO enlargement could be substantially 
different from DOD's estimated cost of about $27 billion to $35 
billion.
---------------------------------------------------------------------------
    \2\ See our report ``NATO Enlargement: Cost Estimates Developed to 
Date Are Notional'' (GAO/NSIAD-97-209, Aug. 18, 1997).
---------------------------------------------------------------------------
    Rand and CBO cost estimates are no more reliable than DOD's, based 
on our comparison of the three studies. CBO and Rand developed a range 
of cost estimates for NATO enlargement, including estimates that employ 
a defense strategy similar to DOD's. Several factors account for the 
differences between DOD's estimate and the CBO and Rand estimates, 
including those estimates that employed defense strategies similar to 
DOD's. For example, CBO assumed a much larger reinforcement force and 
much more extensive modernization, infrastructure, and training costs 
than DOD did. Rand assumed a somewhat larger reinforcement force and 
higher training and air defense modernization costs than DOD did.
     u.s. contributions to common budgets and other funding sources
    As it does now, the United States will fund its share of NATO 
enlargement primarily through contributions to the three common 
budgets. NSIP pays for infrastructure items that are over and above the 
needs of the member nations, including communications links to NATO 
headquarters or reinforcement reception facilities, such as increased 
apron space at existing airfields. The military budget pays for NATO's 
AWACS program and military headquarters costs, and the civil budget 
pays primarily for NATO's international staff and operation and 
maintenance costs of its civilian facility in Brussels. For fiscal year 
1997 the U.S. contribution for the three common budgets was about $470 
million: $172 million for the NSIP, $252 million for NATO's military 
budget, and $44.5 million for NATO's civil budget. Any increases to the 
U.S. budget accounts would be reflected primarily through increased 
funding requests for the DOD military construction budget from which 
the NSIP is funded, the Army operations and maintenance budget from 
which the military budget is funded (both part of the National Defense 
050 budget function), and the State Department's contributions to 
international organizations from which the civil budget is funded (part 
of the International Affairs 150 budget function).
    While NATO will not have finalized its common infrastructure 
requirements for new members until December 1997 or decided whether or 
how much to increase the common budgets until June 1998, DOD and State 
Department officials told us that the civil and NSIP budgets are likely 
to increase by only 5 to 10 percent and the military budget will 
probably not increase at all. This would mean an increase of about $20 
million annually for the U.S. contribution to NATO. However, as I 
indicated, NATO has yet to make decisions on these matters. In 
addition, the United States could choose to help new members in their 
efforts to meet their NATO membership obligations through continued 
Foreign Military Financing grants and/or loans, International Military 
Education and Training grants, and assistance for training activities. 
The three candidate countries and other PFP countries have been 
receiving assistance through these accounts since the inception of the 
PFP program, and this has enabled some of these countries to be more 
prepared for NATO membership. In fiscal year 1997, over $120 million 
was programmed for these activities, and about $60 million of this 
amount went to the three candidates for NATO membership. Any increased 
funding for such assistance would be funded through the International 
Affairs and Defense budget functions.

                    NATO'S DEFENSE PLANNING PROCESS

    It is through NATO's defense planning process that decisions are 
made on how the defense burden will be shared, what military 
requirements will be satisfied, and what shortfalls will exist.
    NATO's New Strategic Concept, adopted in Rome in 1991, places 
greater emphasis on crisis management and conflict prevention and 
outlines the characteristics of the force structure. Key features 
include (1) smaller, more mobile and flexible forces that can counter 
multifaceted risks, possibly outside the NATO area; (2) fewer troops 
stationed away from their home countries; (3) reduced readiness levels 
for many active units; (4) emphasis on building up forces in a crisis; 
(5) reduced reliance on nuclear weapons; and (6) immediate and rapid 
reaction forces, main defense forces (including multinational corps), 
and augmentation forces. Although NATO has not defined exactly the type 
and amount of equipment and training needed, it has encouraged nations 
to invest in transport, air refueling, and reconnaissance aircraft and 
improved command and control equipment, among other items.
    NATO's force-planning and goal-setting process involves two 
interrelated phases that run concurrently: setting force goals and 
responding to a defense planning questionnaire. The force goals, which 
are developed every 2 years, define NATO's requirements. The major NATO 
commanders propose force goals for each nation based on command 
requirements. Each nation typically has over 100 force goals. NATO and 
national officials frequently consult one another while developing 
force goals and national defense plans. NATO commanders are unlikely to 
demand that member nations establish units or acquire equipment they do 
not have.
    In its annual response to NATO's defense planning questionnaire, 
each member verifies its commitment for the previous year, defines its 
commitment for the next year, and lays out plans for the following 5 
years. Alliance members review each nation's questionnaire and, in 
meetings, can question national plans and urge member nations to alter 
their plans. After finishing their reviews, generally in October or 
November, NATO staff write a report summarizing each nation's plans and 
assessing national commitments to NATO. Once NATO members approve this 
report, it becomes the alliance's consensus view on each country's 
strengths and weaknesses and plan to support the force structure. It is 
through this process that NATO determines what shortfalls exist, for 
example, in combat support and combat service support capabilities.
    According to U.S. officials, NATO is preparing several reports to 
be presented for approval at the defense ministerial meetings in 
December 1997. One report will discuss the additional military 
capability requirements existing alliance members will face as a result 
of the alliance's enlargement. According to officials at the U.S. 
mission and Supreme Headquarters Allied Powers Europe, it is unlikely 
that any additional military capability requirements will be placed on 
NATO members over and above the force goals they have already agreed to 
provide. In other words, if current force goals are attained, NATO will 
have sufficient resources to respond to likely contingencies in current 
and new member countries. Therefore, it can be concluded that although 
enlargement of the alliance is another reason for current allies to 
attain their force goals, it will not add any new, unknown costs to 
existing members' force plans.
    Other reports resulting from this process will discuss the 
requirements for commonly funded items in the new nations and their 
estimated costs. These items include infrastructure that will enable 
the new allies to receive NATO reinforcements in times of crisis, 
communication systems between NATO and their national headquarters, and 
a tie-in to NATO's air defense system. How these projects will be 
financed by NATO, for example, whether they will be financed within 
existing budgets or by increasing the size of NATO's common budgets, 
will not be determined until June 1998. Therefore, the impact of these 
costs on the U.S. contributions to NATO's common budgets and the U.S. 
budget will be unknown until next spring.
    Another report will present an assessment of the capabilities and 
shortfalls in the military forces of Poland, Hungary, and the Czech 
Republic. NATO does not and will not estimate the costs of the 
shortfalls of either the current or the new member states, but once 
these shortfalls are identified, cost estimates can be made by others. 
However, even though new members' capabilities and shortfalls will be 
identified in December, these countries' force goals will not be set 
until the spring. These force goals will, in effect, be a roadmap for 
the new members on how to address their shortfalls. (See attachment I 
for a timeline illustrating these events.)
    key assumptions and cost estimates for nato enlargement studies
    When the DOD, CBO, and Rand studies were completed, many key cost 
determinants had not been established. Consequently, each study made a 
series of key assumptions that had important implications for each 
studies' results.
    DOD made the following key assumptions:
  --Specific nations would be invited to join NATO in the first round 
        of enlargement.\3\
---------------------------------------------------------------------------
    \3\ The number of countries DOD assumed would be invited to join 
NATO and the actual countries that were the basis for the estimate are 
classified information.
---------------------------------------------------------------------------
  --NATO would continue to rely on its existing post-Cold War strategy 
        to carry out its collective defense obligations (that is, each 
        member state would have a basic self-defense capability and the 
        ability to rapidly receive NATO reinforcements).\4\
---------------------------------------------------------------------------
    \4\ NATO adopted a new post-Cold War strategic concept at its Rome 
summit meeting in 1991. The concept provides for substantial reductions 
in the size and readiness of NATO's forces but increased force 
mobility, flexibility, and ability to adapt to the changed threat 
environment.
---------------------------------------------------------------------------
  --NATO would not be confronted by a significant conventional military 
        threat for the foreseeable future, and such a threat would take 
        many years to develop.
  --NATO would continue to use existing criteria for determining which 
        items would be funded in common and which costs would be 
        allocated among members.\5\
---------------------------------------------------------------------------
    \5\ NATO funds only those facilities or portions of facilities that 
are over and above the needs of an individual country's national 
security requirements. For example, NATO would fund only the portion of 
infrastructure at an air base that is beyond the host nation's own 
needs, such as hangars for reinforcing aircraft, but not hangars for 
the host country's aircraft.
---------------------------------------------------------------------------
    Using these assumptions, DOD estimated the cost of enlarging NATO 
would range from about $27 billion to $35 billion from 1997 through 
2009. The estimate was broken down as follows: about $8 billion to $10 
billion for improvements in current NATO members' regional 
reinforcement capabilities, such as developing mobile logistics and 
other combat support capabilities; about $10 billion to $13 billion for 
restructuring and modernizing new members' militaries (for example, 
selectively upgrading self-defense capabilities); and about $9 billion 
to $12 billion for costs directly attributable to NATO enlargement (for 
example, costs of ensuring that current and new members' forces are 
interoperable and capable of combined NATO operations and of upgrading 
or constructing facilities to receive NATO reinforcements).
    DOD estimated the U.S. share of these costs would range from about 
$1.5 billion to $2 billion--averaging $150 million to $200 million 
annually from 2000 to 2009. The estimated U.S. share chiefly consisted 
of a portion of direct enlargement costs commonly funded through NATO's 
Security Investment Program. DOD assumed that the other costs would be 
borne by the new members and other current member states and concluded 
that they could afford these costs, although this would be challenging 
for new members. (See attachment II.)

DOD's Key Assumptions Were Reasonable, But Cost Estimates Are 
        Speculative

    In our review of DOD's study of NATO enlargement, we (1) assessed 
the reasonableness of DOD's key assumptions, (2) attempted to verify 
pricing information used as the basis for estimating enlargement costs, 
(3) looked into whether certain cost categories were actually linked to 
enlargement, and (4) identified factors excluded from the study that 
could affect enlargement costs.
    We concluded that DOD's assumptions were reasonable. The assumption 
regarding the threat was probably the most significant variable in 
estimating the cost of enlargement. Based on information available to 
us, we concluded that it was reasonable to assume the threat would be 
low and there would be a fairly long warning time if a serious threat 
developed. This assumption, and the assumption that the post-Cold War 
strategic concept would be employed, provided the basis for DOD's 
judgments concerning required regional reinforcement capabilities, new 
members' force modernization, and to a large extent those items 
categorized as direct enlargement costs.
    DOD also assumed that during 1997-2009, new members would increase 
their real defense spending at an average annual rate of 1 to 2 
percent. Both private and government analysts project gross domestic 
product (GDP) growth rates averaging 4 to 5 percent annually for the 
Czech Republic, Hungary, and Poland during 1997-2001. Thus, projected 
increases in defense budgets appear affordable. Analysts also point out 
that potential new member countries face real fiscal constraints, 
especially in the short term. An increase in defense budgets at the 
expense of pressing social concerns becomes a matter of setting 
national priorities, which are difficult to predict. If these 
countries' growth rates do not meet expectations, their ability to 
increase real defense spending becomes more problematic.
    DOD further assumed that current NATO members would on average 
maintain constant real defense spending levels during 1997-2009.\6\ 
Analysts have expressed somewhat greater concern about this assumption 
and generally consider it to be an optimistic, but reasonable 
projection. Some analysts indicated that defense spending in some 
current member states may decline further over the next several years. 
Such declines would partly be due to economic requirements associated 
with entry into the European Monetary Union.\7\
---------------------------------------------------------------------------
    \6\ In 1996, defense spending as a percent of the gross domestic 
product was 2 percent for Italy, 1.7 percent for Germany, 2.9 percent 
for the United Kingdom, and 3 percent for France. If the gross domestic 
product increases in real terms, these percentages will decline under 
DOD's assumption of constant real defense spending.
    \7\ Under the European Monetary Union, scheduled to go into effect 
January 1, 1999, the European Union would have a common central bank 
and monetary policy and a single currency called the euro. According to 
the Maastricht Treaty, the primary goal of the common central bank is 
price stability. The treaty requires that the economies of the 
participating countries converge toward certain performance goals in 
terms of inflation, long-term interest rates, exchange rate stability, 
and budget deficits (no greater than 3 percent of GDP) and debt (no 
greater than 60 percent of GDP).
---------------------------------------------------------------------------
    Despite our conclusion that DOD's underlying assumptions were 
sound, for several reasons we concluded that its estimates are quite 
speculative. First, DOD's pricing of many individual cost elements were 
``best guesses'' and lacked supporting documentation. This was the case 
for all three categories of costs: direct enlargement costs, current 
members' reinforcement enhancements, and new members' modernization 
requirements. Most of the infrastructure upgrade and refurbishment cost 
estimates were based on judgments. For example, DOD's estimate of $140 
million to $240 million for upgrading a new member's existing air base 
into a NATO collocated operating base was not based on surveys of 
actual facilities but on expert judgment. We were told that the actual 
cost could easily be double--or half--the estimate.
    DOD's estimated costs for training and modernization were notional, 
and actual costs may vary substantially. DOD analysts did not project 
training tempos and specific exercise costs. Instead, they extrapolated 
U.S. and NATO training and exercise costs and evaluated the results 
from the point of view of affordability. DOD's estimate for 
modernization and restructuring of new members' ground forces was also 
notional and was based on improving 25 percent of the new members' 
forces. However, it did not specify what upgrades would be done and how 
much they would cost.
    Second, we could find no linkage between DOD's estimated cost of $8 
billion to $10 billion for remedying current shortfalls in NATO's 
reinforcement capabilities and enlargement of the alliance. Neither DOD 
nor NATO could point to any specific reinforcement shortfalls that 
would result from enlargement that do not already exist. However, 
existing shortfalls could impair the implementation of NATO's new 
strategic concept. DOD officials told us that while reinforcement needs 
would not be greater in an enlarged NATO, enlargement makes eliminating 
the shortfalls essential. This issue is important in the context of 
burdensharing because DOD's estimate shows that these costs would be 
covered by our current NATO allies but not shared by the United States.
    Finally, NATO has yet to determine what military capabilities, 
modernization, and restructuring will be sought from new members. 
Consequently, DOD had little solid basis for its $10 billion to $13 
billion estimate for this cost category. Moreover, DOD and new member 
governments have noted that new members are likely to incur costs to 
restructure and modernize their forces whether or not they join NATO. 
Indeed, some countries have indicated that they may need to spend more 
for these purposes if they do not become NATO members. DOD showed these 
costs as being covered entirely by the new members.
Potential Additional Costs of Enlargement
    NATO enlargement could entail costs in addition to those included 
in DOD's estimates, including costs for assistance to enhance the 
Partnership for Peace or other bilateral assistance for countries not 
invited to join NATO in July 1997. In addition, the United States may 
provide assistance to help new members restructure and modernize their 
forces. For example, Polish officials said they may need up to $2 
billion in credits to buy multipurpose aircraft. While not an added 
cost of enlargement, such assistance would represent a shift in the 
cost burden from the new member countries to the countries providing 
assistance. DOD did not include such costs in its estimate of the U.S. 
share, though it acknowledged that the cost was possible. Moreover, 
U.S. and NATO officials have stated that additional countries may be 
invited to join NATO in the future, most likely in 1999. DOD's cost 
estimate did not take into account a second or third round of 
invitations. If additional countries are invited, cost of enlargement 
would obviously increase.

Comparison of the DOD, CBO, and Rand Estimates

    CBO and Rand estimated the cost of incorporating the Czech 
Republic, Hungary, Poland, and Slovakia into NATO. They based their 
estimates on a range of NATO defense postures, from enhanced self-
defense with minimal NATO interoperability to the forward stationing of 
NATO troops in new member states. However, they also noted that the 
current lack of a major threat in Europe could allow NATO to spend as 
little as it chose in enlarging the alliance.
    Because of the uncertainties of future threats, and the many 
possible ways to defend an enlarged NATO, CBO examined five 
illustrative options to provide such a defense. Each option built on 
the previous one in scope and cost. CBO estimated that the cost of the 
five options over the 15-year period would range from $61 billion to 
$125 billion. Of that total, CBO estimated that the United States might 
be expected to pay between $5 billion and $19 billion. CBO included in 
its range of options a $109 billion estimate that was predicated on a 
resurgent Russian threat, although it was based on a self-defense and 
reinforcement strategy similar to that used by DOD.\8\ Of this $109 
billion, CBO estimated that the United States would pay $13 billion.
---------------------------------------------------------------------------
    \8\ CBO's lowest estimate is based on a low-threat assessment; the 
additional costs are predicated on a resurgent Russian threat.
---------------------------------------------------------------------------
    Similarly, Rand developed estimates for four options to defend an 
enlarged NATO that build upon one another, from only self-defense 
support at a cost of $10 billion to $20 billion to the forward 
deployment of forces in new member states at a cost of $55 billion to 
$110 billion. These options include a middle option that would cost 
about $42 billion that was also based on a self-defense and 
reinforcement strategy. Rand estimated that the United States would pay 
$5 billion to $6 billion of this $42 billion in total costs.
    Several factors account for the differences between DOD's estimates 
and the CBO and Rand estimates, even those that employed defense 
strategies similar to DOD's. (Attachment III illustrates the major 
results and key assumptions of the three estimates.)
    CBO's cost estimate is significantly higher than DOD's for the 
following reasons:
  --DOD assumed reinforcements of 4 divisions and 6 wings, whereas CBO 
        assumed a force of 11\2/3\ divisions and 11\1/2\ wings and a 
        much larger infrastructure for this force in the new member 
        states.
  --CBO's modernization costs are much higher than DOD's and include 
        the purchase of 350 new aircraft and 1,150 new tanks for the 
        new member states. DOD assumed that about 25 percent of the new 
        member states' ground forces would be modernized through 
        upgrades and that each nation would procure a single squadron 
        of refurbished Western combat aircraft.
  --CBO assumed much higher training costs, $23 billion, which include 
        annual, large-scale combined exercises. DOD included $2 billion 
        to $4 billion for training.
  --CBO included the purchase of Patriot air defense missiles at a cost 
        of $8.7 billion, which is considerably higher than DOD's 
        assumed purchase of refurbished I-HAWK type missiles at $1.9 
        billion to $2.6 billion.
  --CBO's infrastructure costs were much higher than DOD's and included 
        new construction, such as extending the NATO fuel pipeline, 
        which CBO assumed would meet U.S. standards. DOD assumed 
        planned refurbishment of existing facilities that would meet 
        minimal wartime standards.
    Rand's cost estimate is somewhat higher than DOD's, although both 
were based on similar threat assessments. First, its reinforcement 
package was larger--5 divisions and 10 wings--and therefore 
infrastructure costs were higher. Second, it assumed new members would 
purchase the more expensive Patriot air defense system rather than the 
refurbished I-HAWK's. Finally, it assumed greater training costs than 
did DOD. The author of the Rand study stated that if he had used DOD's 
assumptions, the cost range would have been almost identical to DOD's.
    Mr. Chairman, this concludes my prepared remarks. I would be happy 
to respond to any questions you or other Committee members may have.
                                 ______
                                 

                                                        Attachment I.--NATO enlargement timeline                                                        
                                                                                                                                                        
                             Date                                                                       Activity                                        
                                                                                                                                                        
September 1995..........................................  NATO issues study on enlargement.                                                             
July 1997...............................................  NATO issues invitations to Poland, Hungary, and the Czech Republic to begin accessions talks. 
October/November 1997...................................  NATO prepares several reports:                                                                
                                                            --additional military capability requirements for existing alliance members that will result
                                                             from the alliance's enlargement;                                                           
                                                            --requirements for commonly funded items in the new member nations, including:              
                                                             infrastructure that will enable the new allies to receive NATO reinforcements in times of  
                                                             crisis; communication systems between NATO and their national headquarters; and a tie-in to
                                                             NATO's air defense system;                                                                 
                                                            --cost estimates for items eligible for common funding presented by NATO officials; and     
                                                            --the capabilities and shortfalls in the military forces of Poland, Hungary, and the Czech  
                                                             Republic.                                                                                  
Early December 1997.....................................  NATO defense ministerial meeting to approve the above reports.                                
Spring 1998.............................................  New members' force goals set.                                                                 
June 1998...............................................  NATO decides whether or how much to increase the common budgets, which would then be shared   
                                                           among current and new members.                                                               
April 1999..............................................  Target date for new member accession into NATO.                                               
                                                                                                                                                        

                                 ______
                                 

                                  ATTACHMENT II.--CATEGORIES AND SHARE OF COSTS                                 
                                              [Dollars in billions]                                             
----------------------------------------------------------------------------------------------------------------
                                                   New members'       Current                                   
                  Cost category                        share       allies' share    U.S. share         Total    
----------------------------------------------------------------------------------------------------------------
New members' military restructuring and                                                                         
 modernization..................................      $10 to $13  ..............  ..............      $10 to $13
Current members' reinforcement enhancements.....  ..............       $8 to $10  ..............       $8 to $10
Direct enlargement..............................     $3 to $44.5    $4.5 to $5.5      $1.5 to $2       $9 to $12
                                                 ---------------------------------------------------------------
      Total.....................................    $13 to $17.5  $12.5 to $15.5      $1.5 to $2      $27 to $35
----------------------------------------------------------------------------------------------------------------


                                  ATTACHMENT III.--DOD, CBO, AND RAND ESTIMATES                                 
                                              [Dollars in billions]                                             
----------------------------------------------------------------------------------------------------------------
          Assumption                    DOD                        CBO                          RAND            
----------------------------------------------------------------------------------------------------------------
Total cost...................  $27-$35 in constant    $61-$125 in constant 1997     $10-$110 in constant 1996   
                                1997 dollars.          dollars ($109 for a defense   dollars ($42 for a defense 
                                                       strategy similar to DOD's).   strategy similar to DOD's).
U.S. cost share..............  $1.5-$2.0............  $13.1 \1\...................  $5-$6 \1\.                  
Notional new NATO members....  A small group          Poland, Hungary, Czech        Poland, Hungary, Czech      
                                (details classified).  Republic, Slovakia.           Republic, Slovakia.        
Time period..................  1997-2009............  1996-2010...................  Approximately 1995-2010.    
Threat assessment............  Low threat...........  A resurgent Russia \1\......  Low threat \1\.             
Comparable force posture       4 divisions/6 wings..  11.7 divisions/11.5 wings     5 divisions/10 wings \1\.   
 options.                                              \1\.                                                     
----------------------------------------------------------------------------------------------------------------
\1\ These assumptions correspond to the estimate based on a defense strategy similar to DOD's.                  

    Chairman Stevens. Senator Inouye has come in. Do you have 
an opening statement, Senator?
    Senator Inouye. No, Mr. Chairman.

                     Force goals have not been met

    Chairman Stevens. You mentioned, Mr. Hinton, that some of 
our allies have not met their current force goals. Can you tell 
us now which of the allies that applies to and how far off they 
are from their force goals now?
    Mr. Hinton. That is the study that we have not seen, Mr. 
Chairman. We have heard some about what the Brits have done and 
others, but we have not seen that comprehensive analysis across 
the full membership as to where they stand against those goals.

         Affect of European monetary union on NATO enlargement

    Chairman Stevens. Senator Domenici yesterday mentioned the 
new European Community [EC] goals to eliminate deficits in 
order to have the right to use common currency. Are you 
familiar with that problem he mentioned?
    Mr. Hinton. Yes, sir.
    Chairman Stevens. Is that a problem you could analyze for 
us as the time goes ahead now, so that we can have some study 
of that for the January-February timeframe? He indicates that 
in order to be a party to the EC monetary change that emerging 
nations, and particularly the three that would become part of 
the NATO enlargement process, would have to restrict their 
spending in order to comply. And yet the NATO requirements 
would mandate that they expand their spending in order to be 
prepared to be a NATO member.
    Would that be within your competence to look at that 
problem?
    Mr. Hinton. Yes, sir; I think we could take a look at that 
for you. We have had some discussions with Senator Domenici's 
staff on this issue, as they have been outlining the series of 
hearings that they are having. We have not begun that work, but 
I think we could look at it.
    It does create a challenge for those members as to how they 
are going to accomplish the goals of meeting the force goals 
for NATO expansion as well as the goals that are going to be 
laid out for joining the European Union.
    Chairman Stevens. I do not want to have two separate 
requests, so I would hope that you and your staff would 
coordinate the requests from the Budget Committee and this 
committee so we would have one report that would cover both of 
our needs.
    But it does seem to me, those of us that have been over 
there and have visited, that there is a real apparent rush to 
acquire aircraft in particular. The difference between the DOD 
and the CBO analysis, and RAND too, I guess, really looks to 
the problem of whether or not there is a resurgent Russia and 
whether or not there is a need for an increased number of wings 
of aircraft and an increase in the number of divisions that 
would be required in the new NATO members.
    Now I think that that conflict between the economic posture 
of the country in order to be an economic partner, on the one 
hand, of an expanded European Community as compared to being a 
fully performing member of an expanded NATO is a very real one, 
and that we should have some guidance as to what will be the 
impact of the economic constraints.
    It appears that it would stretch out the time within which 
the new members could comply with NATO, because I assume that 
the economic mandate would be the most compelling to comply 
with in the first instance.
    Mr. Hinton. Mr. Chairman, it is my understanding that as 
they have been going through the requirements determination 
process in NATO that the push has been on trying to move away 
from buying major aircraft, for example, and focusing more on 
logistical support requirements that you would need in the 
early years to be interoperable with the other NATO elements.
    And over time we may learn, in the December timeframe and 
as we move to the June 1998 timeframe, when we see some of 
these costs, exactly what are behind those costs, and we would 
see those requirements. I think your point is right on mark, 
and that needs to be looked at.
    Mr. Johnson. Could I elaborate just slightly on your 
question? I think the problem that you describe also applies to 
current allies. The difficulty is that they need, in order to 
belong to the European monetary union, they need to get their 
deficits and debt under control within certain guidelines. That 
limits the amount of spending for defense, and it places a 
great deal of pressure on their defense budgets. That is part 
of the problem with not meeting their force goals.
    So it is on both sides. It does not just apply to the new 
members coming in; the problem also applies to the existing 
allies.
    Chairman Stevens. Mr. Johnson, it applies to us too. We 
have already committed to a 5-year plan that supposedly will 
get us to the point where we have eliminated our deficits and 
bring us closer to having a means to control the expansion of 
our own debt.
    Mr. Johnson. That is right.
    Chairman Stevens. Maybe it is a good thing we are not 
applying for membership to the EC.
    Senator Campbell.

                   NATO requirements for new members

    Senator Campbell. Thanks, Mr. Chairman.
    During yesterday's hearing General Shelton and General 
Clark testified that NATO is developing these military 
requirements for the invited members. I wanted to focus on that 
just a little bit. As I understood your testimony, Mr. Hinton, 
you estimate there will not be a significant increase in what 
is called the common budget for NATO. Did I understand you to 
say that?
    Mr. Hinton. What I said there is that we will not know what 
the exact estimates are going to be until we get in and see the 
data coming out of the June timeframe, when the costs are going 
to be there.
    Senator Campbell. All right. These new estimates are going 
to be discussed in December.
    Mr. Hinton. Right. But what has come up recently, Senator 
Campbell, from testimony from Secretary Cohen and some of what 
you heard yesterday, was that we have gone into some of the new 
member states and looked at their infrastructure. What we have 
seen is that some of the conditions are better than what we 
thought they were when DOD prepared the initial study back 
early this year.
    Therefore, the costs of the direct enlargement could be 
considerably lower than what DOD had in its study, but we will 
not know for sure until later in 1998.
    Senator Campbell. Can you provide the committee with an 
update of the GAO work on that issue?
    Mr. Hinton. We would be happy to update the analysis of 
DOD's report up here to the committee.
    [The information follows:]

    The updated DOD study is scheduled for release the end of 
February 1998. GAO will provide the Committee with its analysis 
of this report shortly after we receive it.

    Senator Campbell. But, in addition to that, as I understand 
it, we have given about $60 million so far to those three 
candidate members. Is that correct?
    Mr. Johnson. Right.

                        U.S. obligations to pay

    Senator Campbell. I guess my concern is in the title of 
your testimony which says it all--cost implications to the 
United States remain unclear. I am concerned a little bit if we 
are expected to foot the bill for these additional military 
requirements that will be put on the new members. That is one 
thing.
    The other thing, I guess, is really a policy question. I am 
also concerned about what would prevent them from sharing 
whatever technology we give them in terms of equipment or 
money, since some of them were former Warsaw Pact members, and 
I am sure some of the people are still involved in their 
administrative decisionmaking coalition at their headquarters 
and still have some possible leanings to the old Warsaw Pact. 
That would kind of concern me.
    Would you comment on that?
    Mr. Hinton. On your cost question, Senator, if you look at 
the table designated attachment II in the direct enlargement 
line, as well as to the two lines above, when DOD did its study 
one of the assumptions was that the new members would be 
responsible for their share and that we would not be obligated 
to pay for that.
    What we, the United States, would have an obligation to pay 
would be those costs that would likely come up from the direct 
enlargement that are shared by all members, and on that bottom 
line over in the third column you see what that number was in 
DOD's study. The indications from Secretary Cohen and the folks 
that were testifying yesterday is that could be----
    Senator Campbell. I understand what you are saying, but 
apparently it is not what we are doing if we have already given 
them $60 million. That was basically the question I had. If 
there are military requirements for these invited new members, 
are we going to get stuck with the bill, regardless of what 
your chart says?
    Mr. Hinton. I understand that. Now the $60 million that I 
referred to earlier is bilateral assistance that we are giving 
in working with the other countries in terms of the Partnership 
for Peace Program. It is not tied into the numbers that would 
come out through the common budgets.
    Senator Campbell. It was $60 million of American taxpayers' 
money.

                      NATO's requirements process

    Mr. Hinton. You are exactly right. And on the technology 
question that you raised, Senator, as NATO goes through the 
requirements determination process and puts out the force goals 
and the countries come back and respond to the defense planning 
questionnaire you will be able to see where NATO is going to be 
looking to the new members as to what they can provide for the 
common defense of the whole alliance.
    And I think that would put some boundaries around the 
technology question that you had.
    Senator Campbell. OK. Well, I will not belabor it, Mr. 
Chairman, but I think it is going to be kind of a one-way 
street when we talk about who is going to provide what and who 
is going to pay for it.
    Mr. Hinton. I think that is a significant issue for the 
committee to be concerned about. I think that it is important 
to get the right information and the most current information 
as you go into the decisionmaking process here in the Congress, 
and I think it is also important to determine whether the 
allies are living up to their commitments so that we do not 
find ourselves having to pay for that too.
    Senator Campbell. I appreciate that. I just have a feeling 
that when we all come to the table and define who is going to 
be responsible for each thing, that the three new member 
countries are going to come with very little to offer in terms 
of balancing the cost for their own defense. But I thank you.
    Thank you, Mr. Chairman.
    Chairman Stevens. Thank you. Senator Hutchison.
    Senator Hutchison. Thank you, Mr. Chairman.

                   NATO enlargement costs are unclear

    In your report, of course, I am sure it has been said you 
are saying that not only are you not able to quantify all of 
the costs, but neither have any of the others who have 
attempted to do this, including the Department of Defense, 
RAND, CBO. Everyone who has looked at it is saying it is 
impossible to quantify.
    But at some point this committee is going to have to have a 
bottom line, and it is my hope that this committee is going to 
have enough information to set a ceiling on what our share it--
determine what our fair share is, what are the reasonable 
requirements, and set a limit on our share so that there will 
be no question about that.
    But I would like to ask you if, in your looking at this, if 
there is going to be a way for you to determine what our share 
really is. Now, we have in the President's or the Department of 
Defense estimate the overall NATO share, the new member share, 
and then the other ally commitments for their own rapid 
deployment improvements.

                         Bosnia costs increase

    Are you able to quantify in the numbers what is really our 
share--not just our share of the overall, but are we going to 
have a share in the new member share? Are we going to have 
requirements outside of NATO, as we do in Bosnia, that are not 
even factored in? The cost of Bosnia was supposed to be $2 
billion. We are up to $7 billion, and that still does not 
include all of the peripheral things we do in support of the 
Bosnia operation that is not actually there.
    So in your looking at this are you going to be comfortable 
that when we say our share is x million or x hundreds of 
millions that we will know what really is our share?

                  NATO's schedule for costing reports

    Mr. Hinton. I think, Senator, as the process carries itself 
out in what NATO is doing right now and the studies are being 
done that are highlighted in our statement, beginning in 
December you will be getting more definitive answers to the 
requirements, to what the new members bring to the alliance to 
meet the force goals, and I think you will also see more 
definitive requirements around some of the infrastructure costs 
that are going to be involved to bring them up to what you need 
to receive reinforcements.
    Now, on that point, those items that may be of a common 
nature, that are over and above what the individual countries 
are responsible for, there may be an obligation for the United 
States to pay some part of that. However, it is not known right 
now what those costs will be.
    I hope that, and we would be happy to continue to look 
behind the numbers that are provided by NATO as to what they 
exactly mean, how they were determined, the priorities that are 
there amongst some of the projects to help inform the debate up 
here when you all have to make the decision on deciding about 
enlargement. And, hopefully, at that point we can move to more 
concrete information about the true cost.
    Now when it goes beyond NATO----
    Senator Hutchison. To the periphery.
    Mr. Hinton. Right. I do not know that we will have that as 
part of this process.
    Senator Hutchison. Do you think it is legitimate to 
consider that when we are looking at what our bottom line is 
going to be?
    Mr. Hinton. Well, I think that, and I know this committee 
was involved in trying to put in place over in the Department a 
process to bring more oversight to the cost of peacekeeping 
operations, and that has been helpful in the process. But I 
think NATO is going to be one piece, and maybe that is another 
subject that is going to have to be looked at, maybe 
independent of what the NATO situation is, because there are 
several peacekeeping operations around which the United States 
has an obligation to be a part of right now.
    But in terms of NATO, I think that is going to be fairly 
well defined. But any decisions to go outside of NATO will 
create, in the future, a situation like Bosnia, and you just 
have to find out what the operation is going to be, what it 
requires, and what are the costs of going into that operation. 
One key point we have learned in looking at the other 
peacekeeping operations is the importance of having an exit 
strategy and trying to adhere to that.
    But a lot of that goes into factoring the cost. But I do 
not think that is going to be part of what you will see coming 
out of the NATO process that I am aware of right now.
    Senator Hutchison. Well, we have not seen an exit strategy 
on anything else we have done in the last few years, so I am 
not optimistic about that.
    Well, I just am very concerned in looking at Bosnia as an 
example. I do not think $7 billion is anywhere close to the 
real cost of Bosnia, because you are not including operations 
on the perimeter that support that operation, and I am worried 
that we are going to have other costs that might not be 
included, and all I can say is I hope you will try to figure a 
way to determine, to the best extent that you can, what the 
real commitment is, whether it is our share, allies' share, new 
member share, contingencies for others not paying their fair 
share, if that is going to be our responsibility.
    There are a lot of things out there that I hope you will 
find a way to quantify.
    Mr. Hinton. Thank you, ma'am.
    Chairman Stevens. Do you have any questions, Danny?

                         Cost estimates unclear

    Senator Inouye. Mr. Chairman, I just want to note that 
nothing is clear at this time, and I hope that we will be in a 
position to make the necessary decisions on this committee. I 
hope that your agency will continue to monitor the progress of 
resolving these estimates.
    For example, do you have anyone monitoring the ministerial 
meetings this December?
    Mr. Hinton. Not at the moment.
    Senator Inouye. I think it would help, so that we would 
know the basis for the decisions.
    Mr. Hinton. We will be happy to see what we can do on that.
    Senator Inouye. Do you have any recommendations? I know 
that you have stated that the assumptions of DOD seem 
reasonable, but the estimates are speculative. Do you have 
anything that is less speculative?
    Mr. Hinton. Not based on the work that we have done to 
date. I do not have any at this time. But, as has been brought 
up, I would expect that as we go down and get more involved 
into the process that that would--the potential for us coming 
up with recommendations on improving the process is good.
    Senator Inouye. That would be extremely helpful, sir. Thank 
you very much.
    Thank you, Mr. Chairman.

               GAO to monitor NATO's December ministerial

    Chairman Stevens. Mr. Hinton, as a former chairman of the 
Governmental Affairs Committee, I have relied very heavily upon 
your agency. I defended it on the basis that you are shared 
staff of the Congress, and that the use of your organization 
will actually reduce the costs of the Congress.
    So, following up on what Senator Inouye has said, I want 
you to notify the NATO people that your people are going to be 
at NATO at the request of this committee. We will not have 
people there observing that, because you will. And if they do 
not give you access to what is going on over there the way they 
would give our committee, I want you to notify us about that, 
and we will straighten it out for you fairly quickly.
    I just do not feel we should keep a whole series of 
congressional observers there during the ministerial meetings, 
and what we are really after is an analysis of what their 
conclusions are, not the reasons for their conclusions. So I do 
hope that you will be able to do that.

                    Support for U.S. forces overseas

    Second, yesterday I raised with General Clark the increased 
costs of the military units in Europe, and this is without 
regard to the current problem of the NATO enlargement, as 
compared to the costs of support of our forces in Asia. I am of 
the impression from our hearings in the past that we have 
substantial support from Korea and Japan, but a substantial 
increase in costs of maintaining our forces in the NATO 
structure.
    Have you ever made a comparison of that?
    Mr. Hinton. No, sir, but we can do that. We can do that. I 
can lay those out for you and I think I can bring some 
information that will help you see that data.
    Chairman Stevens. I never thought I would get to the day 
where I was sounding like Senator Mansfield. I am not sure I 
have that capability in the first place, but beyond that it has 
occurred to me that with an increase of 300,000 troops in NATO 
it may well be that the best place for some of our troops that 
are going to be stationed overseas is to increase our 
deployments in the Asian area and Pacific, where I believe that 
the problems of the 21st century will occur first.
    But, in any event, I would like to have that comparison, if 
you can prepare it.

                       Resurgent Russia estimate

    Last, let me say this--two points really. One of the basic 
differences in the estimates that we have is the assumption by 
CBO of a resurgent Russia. I think that makes these comparisons 
really difficult to understand, and it would seem to me that 
the underlying question in the whole NATO organization is, is 
there going to be a resurgent Russia. Is there going to be a 
new alliance in that area. I do not ask you to analyze that.
    But I do think we ought to ask and I intend to ask RAND and 
the CBO to give us their analysis without regard to that 
question, and I want to have you look at the question of what 
difference it would make in your analysis if there was a 
resurgent Russia. We intend to ask the DOD to do the same 
thing. What would be the costs of preparing to meet a resurgent 
Russia?
    I guess the other side of that coin would be what would be 
the decrease in costs if Russia joined NATO. That was what 
Senator Faircloth was looking at yesterday.

              Budget for NATO security investment program

    Last, in the current budget this year the President asked 
for military construction for the NATO security investment 
program at less than the previous year. It is my understanding 
that 1997 we had $172.6 million, and the President's request 
was $170 million, roughly. We have appropriated now $152.6 
million for improvements in infrastructure or communications in 
NATO.
    That is a cost-sharing account for which we provide 25 
percent. That is the same account you mentioned, was it not?
    Mr. Hinton. The security investment program.
    Chairman Stevens. You anticipated that that might increase.
    Mr. Hinton. What we are being told is that there could be 
some increase to that account.
    Chairman Stevens. I have to tell you I get a little lost in 
this because yesterday I was told that on the European 
alternative to the joint surveillance target attack radar 
system [JSTARS] we would pay 49 percent of the cost if they 
went that way on a new system. Even though we have our own, if 
they decide to get another one for NATO, we still pay 49.5 
percent of the cost of a new system, notwithstanding the fact 
that we have offered them the system we have, which I think is 
the finest in the world, at less than cost.
    Now have you ever made an analysis of the different 
percentages of the costs as how they are assessed to the United 
States in terms of NATO costs?
    Mr. Hinton. No; we have not.
    Chairman Stevens. We pay 25 percent of the NATO security 
investment program. If we pay 49.5 percent of a new system for 
air defense, I would like to know what is the background of 
some of this differential in the costs that we actually pay as 
part of NATO, and I see no reason why we should not ask NATO to 
review these costs for the future.
    They were obviously put into place back in the days when we 
had probably the only super economy in the world. There are 
several others that are challenging us now that are part of 
NATO, and we ought to ask that those costs be reviewed, as well 
as the costs of the enlargement process.
    Mr. Hinton. We can do that for you, Mr. Chairman. I am 
aware of the 25 percent. We have information on that. But the 
49 percent is a new number for me.
    [The information follows:]

    GAO's analysis of the pending NATO acquisition of a new air 
defense system is ongoing and will be provided to the Committee 
in February 1998.

    Mr. Johnson. I have not heard about that 49 percent. But 
that is similar to the cost share on the AWACS system.
    Chairman Stevens. Well, we are told that the cost for this 
NATO enlargement is somewhere in the vicinity of $100 to $200 
million a year for the next 10 years, a little bit more than 10 
years--11 years. That seems hard for me to believe, in view of 
the current cost to us of our share in the NATO infrastructure 
and communications account. We are paying more than that now 
just for the existing fully matured NATO.
    So I do think that the whole committee wants some 
assistance in trying to make sure that when we are looking at 
the barrel we know whether we are looking at a full barrel of 
apples or an empty barrel of apples as far as these 
comparisons. And so far I have no confidence in what we have 
been given in terms of the estimates of the costs for the NATO 
enlargement--none. They are all fraught with assumptions that 
no one will defend.
    Mr. Hinton. I share your concern, Mr. Chairman.
    Chairman Stevens. I am not blaming you either.

                    DOD's future years defense plan

    Mr. Hinton. We have become aware of DOD's plan to put into 
the future years defense program a placeholder for NATO 
expansion that is going to deal with the amount of money that 
you just mentioned right there.
    On the other hand, and this is why this is somewhat 
confusing and you do not know whether the glass is one-half 
full or one-half empty, we are hearing from some of our visits 
that the ultimate costs or increase around the NATO security 
investment program and the civil budget may be to the range of 
about 5 to 10 percent.
    Now if that were to be the case, that turns out to be about 
$20 million. So there is a big delta right there that I cannot 
explain the difference to you because I do not have all the raw 
data that I need to get behind some of that. And the reason for 
that is some of that data is just not available at the moment.
    Chairman Stevens. They are the same people that told us 
that the deployment in Bosnia could not cost more than $1 
billion in 18 months.
    Mr. Hinton. Yes, sir; and, you know, on that operation we 
have followed that for the committees in terms of monitoring 
the costs and reporting the reasons for the changes in the 
cost, and we have watched that grow over the last couple of 
years substantially.
    Chairman Stevens. Gentlemen, do you have any further 
questions?
    Senator Campbell. Mr. Chairman, I had just one comment. I 
certainly support your decision to try and include GAO in these 
enlargement proceedings so we can get a better handle on the 
cost. But, as I understand it, we are going to be dealing with 
the resolution of ratification in early 1998. Looking at their 
timeline in attachment I, it says in spring of 1998 the new 
members will force goal set. In June 1998 NATO will decide on 
how much to increase the common budgets.
    So, at best, we might not get the numbers back that we 
need. If we are going to vote on ratification before they even 
find out the increased costs, it is still going to put us at a 
disadvantage.
    Chairman Stevens. I think the Senator has a point. There is 
no question about it, and I do not think we can control that 
timetable, our only device for being able to control the 
reservations we put on the resolution of ratification.

                         CONCLUSION OF HEARINGS

    Well, we do thank you very much and look forward to working 
with you. If you need any documentation for our request, we 
will notify DOD and notify the State Department of our request 
to your agency. Thank you very much.
    Mr. Hinton. Thank you very much, Mr. Chairman.
    [Whereupon, at 10:47 a.m., Thursday, October 23, the 
hearings were concluded, and the committee was recessed, to 
reconvene subject to the call of the Chair.]

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