    [Senate Hearing 106-238]
    [From the U.S. Government Publishing Office]

                                               S. Hrg. 106-238, Pt. 1

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                           ONE HUNDRED SIXTH CONGRESS

                                 FIRST SESSION

                                       ON

                               H.R. 2561/S. 1122

      AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENT OF DEFENSE FOR THE
         FISCAL YEAR ENDING SEPTEMBER 30, 2000, AND FOR OTHER PURPOSES

                                   __________

                             PART 1 (Pages 1-650)

                             Department of Defense
                           Nondepartmental witnesses

                                   __________

             Printed for the use of the Committee on Appropriations

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

                                     ______

                         U.S. GOVERNMENT PRINTING OFFICE
    54-230 CC                    WASHINGTON : 1999
    _______________________________________________________________________
                For sale by the U.S. Government Printing Office
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                               ISBN 0-16-059779-X

                          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             FRANK R. LAUTENBERG, New Jersey
    MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
    CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
    RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
    JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
    ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
    BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
    LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
    KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
    JON KYL, Arizona
                       Steven J. Cortese, Staff Director
                     Lisa Sutherland, Deputy Staff Director
                   James H. English, Minority Staff Director
                                     ------

                            Subcommittee on Defense

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

                               Professional Staff

                               Steven J. Cortese
                                  Sid Ashworth
                                  Susan Hogan
                                   Gary Reese
                                 John J. Young
                                  Tom Hawkins
                                 Kraig Siracuse
                                Robert J. Henke
                           Charles J. Houy (Minority)
                             Emelie East (Minority)

                             Administrative Support

                                Mazie R. Mattson
                                 Candice Rogers

                                C O N T E N T S

                                  ----------

                            Wednesday, March 3, 1999

                                                                       Page

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

                           Wednesday, March 10, 1999

    Department of Defense: Department of the Navy: Secretary of the
      Navy...........................................................    57

                           Wednesday, March 17, 1999

    Department of Defense: Department of the Air Force: Office of the
      Secretary......................................................   147

                           Wednesday, April 14, 1999

    Department of Defense: Ballistic Missile Defense Organization....   217

                           Wednesday, April 21, 1999

    Department of Defense:
        Surgeon Generals.............................................   265
        Nurse Corps..................................................   333

                           Wednesday, April 28, 1999

    Department of Defense: National Guard Bureau.....................   361

                             Tuesday, May 11, 1999

    Department of Defense: Office of the Secretary of Defense........   457

                              Friday, May 14, 1999

    Nondepartmental witnesses........................................   527

                            Wednesday, May 19, 1999

    Department of Defense: Department of the Army: Secretary of the
      Army...........................................................   669

                            Wednesday, July 14, 1999

    Department of Defense: Forward operating locations (FOL) for
      counterdrug operations.........................................   785

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                            WEDNESDAY, MARCH 3, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 9:58 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Shelby, Inouye, and
    Dorgan.

                             DEPARTMENT OF DEFENSE

                          Deputy Secretary of Defense

    STATEMENT OF HON. JOHN J. HAMRE, DEPUTY SECRETARY OF
                DEFENSE
    ACCOMPANIED BY WILLIAM J. LYNN, UNDER SECRETARY OF DEFENSE
                (COMPTROLLER)

                     opening statement of hon. ted stevens

        Senator Stevens. Good morning, Dr. Hamre.
        Dr. Hamre. Good morning, sir.
        Senator Stevens. An old friend of mine used to say that if
    trains started on time, they would get there on time. So we
    will start this hearing on time.
        We do welcome you back for this presentation of the last
    budget in this millennium.
        Dr. Hamre. Thank you.
        Senator Stevens. I think you have good news for us this
    morning. Our initial review indicates that, while the budget
    has many challenges, we probably can work together to insure
    adequate funding for the national security next year.
        I think others will also commend the department on real
    progress made in this budget to address the compensation needs
    of men and women who serve in the armed forces. We will have
    some questions about that for you, obviously.
        The budget continues to make progress that the committee
    has sought to accelerate the modernization of the armed forces.
    We are full of commendations this morning. Your personal
    efforts to work with our committee to address the needs of the
    National Guard and Reserve components are really very much
    appreciated.
        This budget requests more funding for the National Guard
    than was appropriated for the current year. I think that is the
    first time in the history of my presence on this committee that
    this has happened.
        I think we absolutely have to recognize that the Guard and
    Reserve must be full partners and adequately funded if the
    Total Force concept is going to work to meet our national
    security requirements, and it is a concept that we fully
    support.
        I wish that all that money was actually here, Dr. Hamre, in
    the budget that is before us. Unfortunately, there are some new
    spending ``concepts''--and I will use that word again; I don't
    like to use the other word--that will make it nearly impossible
    for us to meet the needs that I have just discussed.
        To incrementally fund $3.1 billion of military construction
    in my judgment will increase program costs, not decrease them.
    And the assumptions of a $1.6 billion unspecified rescission I
    think goes without saying. We cannot really deal with that;
    $2.9 billion in real estate tax credits and the reselling of
    excess naval vessels that we thought were sold last year, as
    well as changes in Social Security credits cloud these numbers
    before us, Dr. Hamre.
        Last month, Senator Warner, the Majority Leader and I wrote
    the Chairman of the Budget Committee to express our concerns
    about the potential shortfalls in the administration's defense
    budget plan based upon those things I have just mentioned.
        I am certain we are going to discuss those with you today.
    Knowing you, Dr. Hamre, as we know you, I know that you are not
    the author of some of those--perhaps one, but not all of them.
        Let me note the addition to our committee of Senator
    Durbin. I hope he will be here. He took Senator Bumpers' place
    on our committee, and we do welcome him as a new member at this
    first meeting of our subcommittee.
        Now I will call upon someone who has been Ranking Member,
    Deputy Chairman, Co-Chairman.
        Senator Inouye. Just keep on going. [Laughter.]
        Senator Stevens. I think in Chicago, Mayor Daley's father
    was known as ``The Mayor.'' Now the second Mayor Daley is known
    as ``Da Mayor.''
        So this is ``Da Chairman.'' [Laughter.]

                       statement of hon. daniel k. inouye

        Senator Inouye. I thank you very much, Mr. Chairman. I join
    you in welcoming Secretary Hamre.
        Today is our first hearing to review the fiscal year 2000
    budget for the Department of Defense. I want to congratulate
    the administration and your department and our witness here for
    requesting a budget which increases funding for the Department
    of Defense. It has been a long time coming, I believe.
        Your budget request has $4.6 million more purchasing power
    than you had expected at this time last year. While many of us
    might argue that even a larger increase is required, I, for
    one, am pleased that the administration has stepped up to
    increasing spending for our Nation's security requirements.
        Mr. Secretary, I am certain you know that the chairman and
    the committee have visited troops in the field, and it is clear
    to all of us that there is a growing concern with the three
    R's--recruiting, retention and readiness.
        More of our men and women in uniform are being called upon
    to serve overseas, away from their families and for a longer
    duration each year. The stresses that this brings to their
    families are increasing.
        There have been many stories about spare parts shortfalls
    and cannibalized equipment, and military departments are
    considering lowering their standards for military recruits.
        We have all heard about the increasing number of our troops
    who are voting with their feet and getting out of the military.
        We know that this budget attempts to rectify some of these
    problems with a much needed pay raise and some restored
    benefits, and we applaud you for that.
        My concern is that pay might not be the answer. Clearly, we
    cannot compete on a wage basis with the private sector. The
    private citizen is not called upon to serve away from his or
    her family. Private citizens are not required to live under a
    code of conduct that is highly restrictive. And they are not
    forced to move their families every 2 or 3 years.
        We don't have enough money to pay salaries sufficient to
    compensate for these hardships.
        I believe we need to focus, instead, on improving the
    living and working conditions of our men and women in uniform.
    Our families are worried about health care, but little is being
    done to achieve meaningful improvements in that area. Our
    soldiers are worried about the prospects of having a career in
    an institution that is professionally talking about downsizing,
    and it is not good for the morale. Our families are worried
    about being relocated in the middle of a school year and trying
    to sell a house when the real estate market is falling.
        Every day our soldiers look toward the infrastructure for
    reassurance, but what they see is an infrastructure that is
    crumbling, an indication that we are not doing enough to repair
    and modernize it.
        This budget makes some significant improvements for pay and
    retirement. But these changes seem to have come at the expense
    of improving the conditions that some of us believe are the
    real root of our problems.
        As we begin our hearings this year, it is important to note
    that these are a few of the concerns that some of us here in
    the Congress have.
        Dr. Hamre, yours is a difficult challenge, as noted by
    Chairman Stevens, to help manage this immense agency. We are
    grateful for all you do. You know you have our pledge to work
    with you to help in improving these areas.
        So I welcome you and we are ready to work with you.
        Thank you very much, sir.
        Dr. Hamre. Thank you, sir.
        Senator Stevens. Senator, thank you very much.
        Senator Shelby.

                      statement of hon. richard c. shelby

        Senator Shelby. Mr. Chairman, I ask that any opening
    statement I may have would be made a part of the record, any
    written statement.
        I would just like to welcome Dr. Hamre. We are old friends
    getting together. But we worked together a lot on the Armed
    Services Committee, we travelled together, and we are looking
    forward to your presentation, as always, and to a lot of your
    candor for which you are known.
        Dr. Hamre. I will try to live up to the billing, sir.
        Senator Shelby. Thank you, Mr. Chairman.
        [The statement follows:]

                    Prepared Statement of Richard C. Shelby

        Good morning Dr. Hamre. It is good to see you before this
    committee again today. I would like to take this opportunity to
    make a brief statement on the Defense Budget and what I believe
    should be our priorities. First, we must improve readiness,
    recruiting and retention in the ranks of our uniformed
    services. This requires an investment. That investment should
    include top notch military hardware, a pay raise and improved
    benefits for our personnel, and most important a renewed
    respect for those who choose to wear the uniform of this
    country.
        Second, we must continue our efforts to deploy a ballistic
    missile defense. The missile threat from rouge nations and
    others is real and growing. This effort must also include the
    continuing development of supporting technology; technology
    that will ensure that such a defensive system remains effective
    against future unknown threats.
        Dr. Hamre, I look forward to discussing these and other
    important defense issues with you and your staff as our hearing
    process continues. Again, welcome sir.

                       prepared statement of senator bond

        Senator Stevens. The subcommittee has also received a
    statement from Senator Bond which will be placed in the record
    at this point.
        [The statement follows:]

               Prepared Statement of Senator Christopher S. Bond

        Thank you Mr. Chairman. Thank you sir for coming before us
    to explain the fiscal year 2000 Defense budget as proposed by
    the President.
        As you have noticed of late, though the world is
    technically at peace, it is not a peaceful place. Ethnic
    strife, religious intolerance, and an insatiable hunger for
    political expansion by some, have all exploded into armed
    conflicts. Our forces are now deployed in a more wide ranging
    series of operations than during the Cold War. Our naval forces
    are deploying in undermanned units, we have tactical air force
    units reporting less than optimal conditions material with
    shortages in engines, test stands and spares for deployment,
    there are reports of the U.S. Army accepting recruits at
    standards lower than before (High School drop outs), and for
    the first time that I am aware of, our strategic reserve forces
    are now being included in the make-up of our traditionally
    active-duty operational deployment schedules.
        On top of this, we now face a real concern for weapons of
    mass destruction, their proliferation and our vulnerability to
    their use. I note with pride the primary role of the National
    Guard in this arena and the speed with which you have
    implemented the RAID teams (Rapid Assessment and Identification
    Teams), one home based in Missouri. I hope to see even more
    done in research and development activities designed to
    overcome these terrible weapons.
        The tasks which lay before you are not easy. The problems
    you face cannot be solved with stiff upper lips. Real advances
    must be made in terms of equipping, training, and manning the
    force as well as taking care of our military families. This
    cannot be done ``on the cheap''.
        Every year that I have been a member of this committee, I
    have stood on my soapbox and said: Sir, you are not being
    realistic in your presentation. You are not presenting us with
    a budget which reflects the reality of the situation we face.
    Every year I have been told that though we are nearing an
    untenable situation, the proposed budget would meet the
    requirement. Every year, the Congress has added funding, being
    chastised along the way for funding things the ``Pentagon
    didn't even ask for''. Every year we are told ``Thank you'' for
    the previous year's plus up. And even with those additional un-
    asked for funds, we are presented with a mid-year emergency
    supplemental request.
        Principally we are told that these funds are needed to
    offset unanticipated costs of emerging contingency operations.
    Some of these contingencies are several years old, making their
    ``emergency'' or ``contingency'' status suspect.
        I am more than willing to insure that our forces are funded
    to whatever level they need to be in order to permit them to
    safely and effectively carry out the missions to which you
    assign them. I am afraid that this year's budget will once
    again miss that mark.
        We are currently expending large amounts of ordnance of all
    types, long range missiles, mid-range missiles, and LGB's
    (laser guided bombs) in contingency operations in the Persian
    Gulf region. I suspect that your proposal does not account for
    a large portion of these weapons. You operate in a dynamic
    environment. So, I expect you are already preparing your next
    supplemental. We want to work with you to cover those and other
    expenditures.
        It is no sin to say I do not have the assets, and then
    explain your needs--we will listen. What I believe is a sin is
    to stretch our equipment and personnel so thinly, that we
    unnecessarily increase the risk our young men and women must
    face in order to carry out our national policies.
        I look forward to hearing your comments on where you think
    we are in terms of our ability to carry out our broad range of
    missions, where we are going, and how you expect to continue
    this breakneck pace of operational commitments with even fewer
    personnel, equipment, and a significant funding shortage; your
    proposed additions included.
        Thank you, Mr. Chairman, I have a few questions which I
    will address later in the hearing.

                         supporting our Military people

        Senator Stevens. The floor is yours, Dr. Hamre.
        Dr. Hamre. Mr. Chairman, thank you so much. I do have a
    presentation that I would like to give.
        But first, as a matter of personal privilege, may I respond
    to Senator Inouye's statement about our people?
        Senator Stevens. Of course.
        Dr. Hamre. I strongly agree with that. I look at the talent
    that is in the Department of Defense, the senior officer corps,
    the non commissioned officers (NCO's), right down to the
    privates and the corporals.
        Pound for pound, person for person, I would put them up
    against any corporation in the world. It is absolutely
    remarkable what these people do. And we cannot come close to
    paying them for this quality.
        I don't think they join this military to be paid well. I
    think when they go home at night, it is not can they put
    another suit in the closet, can they buy a nicer car. I think
    when they get home at night after a long day they say well, at
    least today I defended the United States of America. That is
    what moves them.
        And you are right. We need to do right by these people. It
    is not going to be just in pay. It is in being right by them
    all along the way. They have given themselves to work with us
    and we owe, I think, exactly what you have said. I thank you
    for making your statement because it very much speaks to the
    way I know the Secretary feels and the way I feel. I thank you
    for that.
        Senator Inouye. Thank you, sir.
        Senator Stevens. Before continuing, Doctor, let me ask if
    the people in the back room can hear Dr. Hamre?
        Dr. Hamre. I will pull up the microphone and speak more
    loudly.
        Senator Stevens. I think perhaps the mikes may have to be
    turned up a bit.
        Ms. Foote, do you have a copy of this chart? I see you are
    sitting behind the screen. I hope you are all right.

                                  introduction

        Dr. Hamre. Mr. Chairman, I do have a number of slides. I
    will try to go through them very quickly. I think we have given
    you a good budget, but we also gave you a hot-foot at the same
    time in the way we pay for it. I think that that is a very
    awkward situation. I will explain why it happened that way and
    what we want to do to try to work with you as we try to bring
    this about. I know that you are just as committed, more
    committed, than we are to try to make sure that this country is
    protected and defended and that we can finance what we need to
    do. And we have made it hard this year. I think we need to go
    through that and explain what it is that we have done and what
    we need to try to work through.
        If I could, let's go to the next chart.

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

                        DOD at the Pivot of the Century
        What shape are we in at the end of the century?
        Are we ready for the challenges of the next century?

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

        Mr. Chairman, you in your opening statement said this is
    the last year of this millennium, and we are at the edge of the
    next one. We are submitting a budget for the next century. So
    the question that we pose, as we really are at that pivot
    point, not just of the millennium but of the century, is in
    what shape are we as a military. What condition are we in and
    are we ready for what is lying ahead for us.
        Let me go to the next chart and talk about each of these.

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

                What Shape Are We In at the End of the Century?
        Flawless execution of military operations (Desert Viper, Desert
    Fox, Hurricane Mitch relief)
        U.S. remains the glue that binds NATO
        No peer competitor on the world scene
        Warfighting professionalism undiminished 10 years after end of Cold
    War
        America's military is welcomed around the world

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

                             What shape are we in?

        First, in terms of what shape are we in, I think there is
    reason to be genuinely proud for what we have seen. I watched
    the operation that our forces went through in December, when we
    were exercising the U.N. authorities in the Middle East against
    Iraq.
        It was flawless. I know of only one operational sortie
    where we had a mechanical failure. If you look at the
    performance, the damage evaluations and that sort of thing, it
    was spectacular. They did a tremendous job. They minimized
    collateral damage, they minimized damage to civilians, and they
    really did a tremendous job.
        So I think we can take great pride that 10 years into this
    drawdown, after 15 years of consecutive budget declines, the
    troops are doing very well. Now this has been because of your
    commitment all along to make sure we had what we needed.
        The U.S. remains the glue that holds together the
    international security order. We are the glue that holds NATO
    together.
        I know that there are friction points that come with that
    as, right now, we are experiencing in Kosovo. These are very
    tough questions. It is very clear that the Kosovo peace
    operation is not going to work if we are not a participant to
    it. We are trying to be a small participant to it for we are
    the glue that holds NATO together. And it still is a
    centerpiece of our security posture in the world.
        There is no peer competitor around the world to match the
    United States. This is not to say that one will not emerge. One
    could very well emerge. But right now we are unparalleled in
    what we can do, and we do have global security interests and
    global responsibilities. We are up to that. But it is
    stressful, and I will go through that in a moment.
        I am probably most impressed by item number 4, that is,
    there is a level of professionalism and innovation in our
    military that is breathtaking. People are thinking more
    creatively about how to do our business efficiently now than I
    think at any time I have seen in the years that I have worked
    in the department. Congress has contributed to that. You pushed
    us last year to joint experimentation. We think that is an
    important dimension to this.
        What is happening in these forces is very impressive and I
    know we will hear that during the year with the hearings. And I
    think you will see, as Hurricane Mitch demonstrated, the
    villagers were out cheering when the United States military
    came into town. Now that is not the case for many militaries
    around the world. But it was and they were when we showed up
    down in Central America. I think that is typical of the very
    thoughtful and sophisticated way that our forces try to work
    when they are overseas.
        Let's go to the next chart, please.

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

                     Are We Prepared for the Next Century?
        Sustaining spectrum of capabilities for likely contingencies
        Major initiatives to counter proliferation of WMD
        Organizing to deal with cyber threats
        Funding National Missile Defense program
        Systematic climate of innovation
      --Service warfighting labs and joint experimentation
        Strong theater engagement plans to shape security environment

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

                     Are we prepared for the next century?

        Are we getting ready for the next century? In many ways I
    think we are.
        We are still maintaining the capability to respond to the
    broad spectrum of conflicts. Yesterday, at a hearing in front
    of the Senate Budget Committee, I was challenged: why do we
    still have a two major regional conflict (MRC) strategy? Why
    are we doing that?
        Well, the fact is that three times in the last 5 years we
    have had two nearly simultaneous contingencies in different
    theaters. We had to get ready. We had to be able to maintain
    that.
        We are dealing with the biggest challenge, trying to deal
    with the biggest challenge we face, which is the proliferation
    of weapons of mass destruction and the horrible idea that these
    things, as terrorist devices, might be coming to the homeland.
    This is a big problem and it is one that I know this committee
    has pushed us on more than anybody has.
        We will talk about some of the things we are doing,
    especially working with the National Guard, to be ready for
    that.
        We have been experiencing during the last 18 months some
    very significant challenges in the cyberspace. I will tell you
    that it is a very complex problem. We would like probably to
    talk about it with you in a closed session to give you some
    examples of things that we are working with right now. This is
    a challenge that we are facing.
        It is not just DOD. Frankly, America's infrastructure now
    is largely in the private sector, and an attack on America is
    going to be an attack on the private sector infrastructure in
    America. We need to start thinking about that and worrying
    about that problem.
        Senator Stevens. I would like to see you give us a date
    very early in the morning, and we will just take our committee
    over to the department. I think that those things require some
    demonstration to understand.
        Dr. Hamre. Yes, sir.
        Senator Stevens. I think the committee ought to be
    interested and we would like to come over and visit in a sort
    of briefing room over there.
        Dr. Hamre. We would be pleased to do that. There are some
    very important things underway right now that we do need to
    tell you about.
        Senator Stevens. We will have Steve and Charlie check with
    you and we will figure out that time. I hope it will be a full
    committee briefing, though, and not just the subcommittee.
        Dr. Hamre. Yes, sir. OK.
        Sir, as you know, we have finally produced a funded
    National Missile Defense Program. The administration advertised
    a National Missile Defense Program over the last several years,
    but we only funded the first three of our 3+3 strategy. We did
    not fund the second plus-three. I think that always undercuts
    the credibility of our overall program. We have tried to
    correct that.
        Now I know there is going to be discussion and argument
    about that program this year and I fully expect that. I think
    the central argument, point of contention, is what does it mean
    for the Anti-Ballistic Missile (ABM) Treaty.
        Now we strongly believe that the ABM Treaty is relevant and
    important for our security in the future. I know that there are
    strong disagreements with that here, and that ought to be a
    focal point of our debate.
        But, finally, I think we are advancing such that we have a
    funded program to put in front of you.
        As I mentioned, we have a systematic climate of innovation.
    At some point I would invite you to get brief presentations
    from the services on what they are doing in their war fighting
    laboratories. It really is tremendous.
        You know, in the Civil War, we suffered so many casualties
    there because the technology of fire power had moved ahead so
    much further than the technology of communication. Back then,
    soldiers had to be so close that they could still hear a verbal
    command from a commanding officer. They had to be so close that
    they were just mowed down with firepower.
        We are now able with technology to reverse that, where our
    troops do not even have to be able to see each other and they
    can bring concentrated fire on an opponent. There are very
    exciting things that are happening to make us powerful and
    innovative into the future. It really is important work for you
    to be aware of, what the department and the services are doing.
        Finally, we have worked very hard to try to have positive,
    constructive operations around the world through our theater
    engagement programs. But we are also at this pivot point in
    history with some definite problems and some concerns that we
    present to you.
        May we go to the next chart, please.

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

                            What Concerns Do I Have?
        Harder to recruit and retain quality force in such a strong economy
        Frequent operations have strained forces
        Threadbare bases after 14 years of budget cuts
        Equipment aging at unacceptable pace

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

                            What concerns do I have?

        As you said, Mr. Chairman, and as Senator Inouye said, we
    are having trouble recruiting. It is tough in this environment.
    The economy is so strong. It is not like the old days where we
    were competing with the drop-outs. We are not competing to get
    the drop-outs. We are competing to get the college-bound. It is
    tough to recruit in this environment. It is a small pool, a
    pool that has opportunities, and we are finding it very
    difficult to recruit in this environment.
        This is why we have to ask for stronger resources to fund
    it. Last week, of course, the Senate took the step to provide
    greater resources for our personnel. We think that was an
    important endorsement for the most important resource we have
    in the military, which is our people.
        But we are having trouble. I will be honest to say that.
    Right now, the Army is falling about 2,000 short in recruiting
    in the first quarter. We are nervous about that. We can
    obviously talk about that.
        The frequent operations that we have frankly are straining
    the force. I know people say what is 4,000 more people in
    Kosovo. Well, it is 4,000 more people on top of extensive,
    ongoing operations all around the world. We have talked a lot
    about what we may have to do to scale back elsewhere because we
    are really working hard.
        The operations tempo for the services, the Army and the Air
    Force, is three times higher than it used to be, and we have 40
    percent fewer forces. People are really working hard.
        This is the main reason why it is so hard to retain people
    right now. We are having a tough time retaining our pilots, as
    you know. So this is a real challenge.
        After 14 years of a drawdown, we have very threadbare
    bases.
        Senator Inouye, you mentioned this in your statement,
    especially about the quality of life. We have about 300,000
    housing units, and the average age is 35 years old for our
    housing units. We are replacing them. We are only replacing
    about 5,000 or 6,000 housing units a year.
        You can tell from that that we are slipping behind. We are
    slipping behind significantly.
        So we have real challenges with our infrastructure. That is
    something, too, that we need to discuss.
        Also, our equipment is aging, as you know. You have been
    looking at this for years. We have taken the bulk of the
    downsizing over the last 10 years. It started before we came,
    but we have been taking it by largely cutting back on our
    modernization programs.
        Now we are working our way back. You will see in the
    subsequent charts that we have turned the corner. We are
    getting up the curve. We fell $1 billion short from our goal
    this year. But where 2 years ago we were at $42 billion when we
    submitted it to you, this year we are at $53 billion. We are
    starting to get back on the curve. But we are really in the
    hole because we have deferred modernization for quite a while.
        This is a real challenge and we will go through that.
        May I have the next chart, please.

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

                   Major Features of Fiscal Year 2000 Budget
        $112 billion increase in resources over next 6 years
        Major boosts in personnel compensation
      --4.4 percent pay raise (higher than COLA)
      --Reinstate 50 percent retirement benefits
      --Reform pay tables to reward talent
        Readiness remains highest priority
      --Funded all ongoing operations
        National Military Defense funding more than doubled
        Sustain increases in procurement budget
        Continue priority on streamlining and business reform
      --Expand A-76 Public-Private Competitions
      --Renewed request for base closures

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

                   major features of fiscal year 2000 Budget

        These are the major features, the bumper stickers, as it
    were, for this budget. There is $112 billion--and I will talk
    about that in a subsequent chart--and I know there are a lot of
    questions about the dollars themselves. The compensation
    package, what we call the new triad, is to have a significant
    pay raise, higher than the cost of living adjustment, for a
    change, to reinstate the retirement benefit back up to 50
    percent, which is a big deal in the field. I know you hear that
    when you talk to troops. There are a lot of people who question
    it here in Washington, but it is a big deal to the troops. We
    have heard that and it has really made a huge difference in
    people's attitudes.
        Also, most important, I am very gratified that the Senate
    endorsed the pay tables reform. That is the big innovation that
    we are bringing to you. We need to start rewarding the talent
    for performance, not just longevity.
        If there is anybody who is underpaid in our armed forces--
    though everybody in one sense is underpaid--the people who are
    really underpaid are the NCO's. When you get above an E-5, they
    are underpaid. When you get to the mid-field grade officers,
    they are underpaid for as hard as those folks are working.
        That is what we are trying to address with the pay table
    reform, and I thank you for dealing with that last week and for
    approving that.
        Readiness is another matter, and we will talk very briefly
    about readiness. About half of the funds that we received from
    the White House, the $112 billion, we have put into readiness.
    It is at really historically high rates. It has to be because
    of how hard we are working, frankly.
        We will talk about National Missile Defense. As you can
    see, we have added significantly to it.
        The Secretary bought the high priced option. When we looked
    at three different alternatives on what to fund, he actually
    chose the high priced option.
        I know there is some criticism that it is not essentially
    on the 2000-03 deployment, that it is 2000-05, with an option
    to bring it back to 2000-03. But that is because we wanted to
    have a program where we test adequately and we are not rushing
    to failure and rushing to have problems like we had on THAAD
    missiles. We are going to make that work, I am convinced. We
    cannot repeat those mistakes, and that is how we designed this
    National Missile Defense System.
        We will continue on with our streamlining efforts. I will
    talk very briefly about that.
        Let's go to the next chart, please.
        [GRAPHIC] [TIFF OMITTED] T02MA03.000

                              DOD funding increase

        I am showing you here a graphic representation of our
    budget. Of course, the top line is the budget that we have
    submitted to you. The dashed line is last year's budget. But
    that is last year's budget at a higher rate of inflation. So
    the purchasing power of last year's budget is the lowest line.
        We were given all of the dollars between the lowest line
    and the top line, and that is the $112 billion increase.
        Now of that $112 billion, $84 billion of it is new budget
    authority. The rest of it, the $28 billion, was dollars that
    were in last year's budget that could have been taken away from
    us because it was lower inflation, but were not, and we were
    allowed to buy other things with it.
        So our purchasing power is up $112 billion, even though
    only $84 billion of it is additional budget authority.
        Now those dollars are made available, of course, only with
    a budget resolution. I mean, we do have to have this unlocked,
    and I know you are working on this right now. But that is the
    only way we can get at that, and the President submitted a
    program hopefully in the context of solving the other big
    problems that are in front of the Congress--Social Security,
    Medicare, and that sort of thing. That is how those dollars get
    loose.
        Otherwise, we still would have to program against lower
    totals. So we are programming against the higher numbers.
        May we go to the next chart, please.

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

                                               FINANCING THE DOD INCREASE
                                      (Discretionary Budget Authority in Billions)
    ----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal year--
                                               ---------------------------------------------------------------------
                                                  2000      2001      2002      2003      2004      2005     2000-05
    ----------------------------------------------------------------------------------------------------------------
    Fiscal Year 1999 Budget...................     264.1     272.3     275.5     285.2     292.1     299.4   1,688.7
    Fiscal Year 2000 Budget...................     268.2     287.4     289.3     299.7     308.5     319.8   1,773.0
    Additional Topline........................       4.1      15.1      13.8      14.5      16.3      20.5      84.3
    Economic Changes..........................       3.8       3.9       4.1       4.5       4.7       5.1      26.1
    MilCon Advance Appn.......................       3.1      -3.1  ........  ........  ........  ........  ........
    Rescissions...............................       1.6  ........  ........  ........  ........  ........       1.6
                                               ---------------------------------------------------------------------
          Total...............................      12.6      15.9      17.9      19.0      21.0      25.6     112.0
    ----------------------------------------------------------------------------------------------------------------

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

                           financing the DOD increase

        This is just the year by year plot points for the previous
    chart. But I would like to spend some time talking about the
    2000 column, the first column, fiscal year 2000.
        There are the additional dollars in the top line, the $4.1
    billion.
        Mr. Chairman, you highlighted in your statement that some
    of those involve legislative change that has to come from this
    reinvestment thing--I forget what the formal title is. It was
    in some other account and was given to us. But it does take an
    Act of Congress, I think, to make it available. So, clearly,
    that is going to be a problem.
        The economic changes that I mentioned are the inflation
    savings, fuel and inflation savings.
        The MilCon advance appropriation looks a lot like
    incremental funding, but we are calling it advance
    appropriations. This is the first year of the expenditures for
    a program.
        We did not cut back any projects. It is all the same
    projects. But it's that we only paid for the first year of
    those projects in 2000 and we asked to pay for the rest in
    2001.
        Now you can do that. It is not a gimmick. This is the way
    other MilCon projects are done. It really is asking you to
    appropriate dollars in 2000 for both 2000 and 2001, and you can
    pull it off.
        It is not our preferred way of doing business, to be
    honest. I mean, we would rather have had additional dollars,
    but it was the only way we could do it and stay under the caps.
        I have talked to a Ms. Ashworth about it. It is a very
    tough problem for the MilCon subcommittee. This is very
    difficult. It is asking you to do business in a very different
    way for 1 year.
        The only reason we did it is because it was the only way we
    could submit a budget--and we have submitted such a budget--
    that stayed consistent with the caps and still provide the
    additional $12.6 billion for DOD.
        So just to be very up front, this is a tough problem that
    we have to work through.
        Sir, the $1.6 billion rescissions--and I know rescissions
    are about as welcome as an undertaker at a 50th anniversary
    high school reunion. We are not happy to bring them to you and
    we are now expecting that you are probably going to gladly
    endorse them. We will have to work with you through the year
    here to try to figure out how we are going to take care of that
    problem.
        I do not have anything more to say on it than that, to be
    honest. I know this is, again, not exactly the way we would
    like to do it. We have done it in the past and it was not
    gladly received then, either. But it is the way that we put the
    program together this year to get to $12.6 billion.
        In essence, we have a good program and we just gave you a
    heck of a problem on how to fund it.
        Sir, let's go to the next chart, please.

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

                               People Come First
        Restore 50 percent retirement benefits
        Provide largest pay raise since 1982
      --Fiscal year 1999 = 3.6 percent; fiscal year 2000 = 4.4 percent;
            fiscal year 2001-05 = 3.9 percent
        Reform military pay table to reward performance
        Increase specially pays and bonuses to address retention issues

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

                               People come first

        This is simply a summary of what we have done for people.
    As we mentioned, it is the retirement. I don't need to go
    through this because you did this last week. You went beyond
    it, but you did do all of this last week. So we don't need to
    linger on it other than for me to say thank you, thank you for
    endorsing the troops. It meant an awful lot to us and it meant
    a lot to people in the field.
        Let's go to the next chart.
        [GRAPHIC] [TIFF OMITTED] T02MA03.001

                              protecting readiness

        This is a graphic representation of what we did on
    readiness and on O&M funding. As I mentioned, of the $112
    billion, about $49 billion of it went into direct readiness
    spending. So what we did a year ago is this.
        The very bottom line that you see was the 1998 budget. That
    was a year in which we were having some real stress points for
    readiness. So last year we increased funding, and that is what
    brought us up to that middle line, before we get to the shaded
    area. It's called the fiscal year 1999 budget. Then we added
    the additional dollars, the $49 billion that is in that shaded
    area.
        So you can see that we are at relatively high rates, high
    historic rates, for this force structure. If we were to
    normalize it on the basis of personnel, it is at an all-time
    high.
        But, again, it takes that to go into the field as regularly
    as we are doing and to keep the warfighting edge the way we
    have to.
        Next chart, please.

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

                               CONTINGENCY FUNDING
                                  [In billions]
    ------------------------------------------------------------------------
                                                           Fiscal    Fiscal
                                                            year      year
                                                            1999      2000
    ------------------------------------------------------------------------
    Bosnia..............................................      $1.8      $1.8
    Southwest Asia......................................       1.0       1.1
    ------------------------------------------------------------------------

        Fiscal year 1999 does not include cost of Kosovo verification
    mission, storm damage relief efforts or recent action against Iraq.
        Fiscal year 2000 budget fully funds support operations in Bosnia
    and Southwest Asia.

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

                              Contingency funding

        This budget does include our budget request to fund
    operations in Bosnia and fully fund the operations in Southwest
    Asia. Now that is for the planned operations in Southwest Asia.
    We don't know how many times Saddam Hussein is going to
    continue to violate the No-Fly Zone and we are going to have to
    respond. I cannot forecast that. So that is not included in the
    budget.
        But we do have the $1.8 billion in to pay for ongoing
    operations in Bosnia and the $1.1 billion for Southwest Asia.
        Now this does not have any money in it for any operation in
    Kosovo if we have to do Kosovo.
        I was asked yesterday what would Kosovo potentially cost if
    we had to do Kosovo. Again, let me just say that we will not be
    going into Kosovo unless there is a peace agreement that both
    the Serbs and the Kosovars sign. If we go in and the Secretary
    said we will participate, that he will recommend we will
    participate with a small percentage of an overall NATO
    operation, we think that to get in and to support for about a
    year we would need between $1.5 billion and $2 billion.
        Now I have to tell you that we cannot pay for that inside
    of our accounts. That would cause serious readiness problems if
    we had to finance that ourselves. So we will have to come back
    to you with a supplemental for that. Just to be very up-front
    about it, that is in our future if this thing unfolds. We think
    it is an important dimension. We think there has been good
    progress in the last week. We obviously have some big problems
    in front of us as we are trying to win both parties to a final
    agreement.
        Let's go to the next chart, please.
        [GRAPHIC] [TIFF OMITTED] T02MA03.002

                            Modernization on target

        This is a graphic representation of our modernization
    program. As you can see, a year ago we were hoping--this year
    we wanted to be at $54 billion. As you see, the Quadrennial
    Defense Review (QDR) goal--the top line of numbers--is what we
    said 2 years ago as what we wanted to do for modernization. We
    wanted to get up to $60 billion next year. This year we wanted
    to be at $54 billion.
        You can see right below it, it says the fiscal year 2000
    budget. That is where we were compared to what we wanted to do.
        As you can see, we fell short here in 2000. Even though we
    got the additional $12.6 billion, we were not able to get to
    our final target. That is, because, frankly, the readiness
    goals and the personnel goals were higher. We wanted to pay
    them first.
        So we fell a little bit short. We are going to be over the
    targets beyond that.
        Now I also have to tell you that I don't think $60 billion
    is going to be enough in the long run for recapitalization of
    the force. As you can see, we get up to about $75 billion in
    our planning. We would like to be able to hold it at that.
        It is going to take that if we are going to start buying
    replacement ships, aircraft, and combat vehicles. We have not
    been buying very much equipment over the last 10 years and we
    are going to need to start doing that again.
        OK, next chart, please.

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

                           Revitalize DOD Facilities
        10 percent increase in military construction over FYDP
        Implementation of privatization projects to increase new housing
    construction
        Significant increases in real properly maintenance to arrest
    maintenance backlogs

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

                          revitalizing DOD facilities

        Regarding our facilities, we do have an increase in our
    budget this year over the fiscal year defense plan (FYDP) for
    facilities.
        This is also controversial, I know, but a major approach
    that we have taken here--it's not a departure, but we have
    strengthened it--is to try to use privatization procedures more
    for especially family housing.
        We know from analytic studies that we probably pay 30
    percent more for housing than the private sector does on a
    comparable square footage basis. We would like to be able to
    unlock the power that is in the private sector to help us buy
    better housing for the troops, and faster.
        This is very definitely a change in the way we do business
    with the Congress. We are used to the old oversight mechanisms,
    you know, where we submit very detailed plans, blueprints, lay-
    outs, et cetera. When you start going the route of using
    private sector innovation, you have to accept the kind of
    streamlined procedures that the private sector routinely uses.
    But it cuts against the grain as to the way we traditionally
    have done business on military construction.
        I think we need to develop a new method of oversight
    because the old method would simply drag us back into the
    detailed blueprints, and most of the private sector would say
    to heck with that, we just don't want to do it that way.
        I think we have to find a new way instead. We are not
    trying to avoid the oversight. Frankly, I think having the
    oversight makes it a national commitment. Trying to slide by
    without oversight makes it a brittle, hollow initiative that
    will not sustain itself over time. So we welcome the oversight,
    and I think we need to find ways to have the professional staff
    of the committees come and work with us earlier in the process
    and see what we are doing. They can warn us ahead of time that
    this is not a good idea, or they don't think there would be
    support for it, or they really think that we need to adjust it
    in this or that way.
        But somehow we must think of a different way of developing
    an oversight mechanism with the Congress so that we can try to
    push ahead with these privatization initiatives.
        They are going to be controversial, and we are not going to
    try to do anything that has opposition in the Congress, of
    course. So we would like to find a way to work closely with
    you, more closely with you, earlier in the process so that we
    can revise it, refine it, and not give you bad ideas at the
    time when you then have to confront them publicly and say we
    have to turn this down because it does not make sense.
        We would much rather know if it makes sense or does not
    make sense earlier in the process when we can do something
    about it.
        OK, next chart, please.

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

                           Defense Reform Initiative
        Streamline organizations
      --Headquarters reductions and agency consolidations
        Reengineer business practices
      --Paperless contracting
        Compete to improve and save
      --229,000 positions opened to competition
        Eliminate unnecessary infrastructure
      --2 new BRAC rounds
            Excess overhead threatens readiness and force structure

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

                           Defense reform initiative

        I won't spend a long time on this one. The Secretary has
    made this a very high priority. We have done an awful lot.
        For example, on the streamlining of the headquarters, the
    Secretary made an announcement a year ago that he would cut a
    third out of his own organization, and we have done that. We
    are 95 percent done.
        The last ones are, of course, the hardest ones, the most
    painful. But we will get that done this year.
        As for business practices, I am very pleased at what we
    have done in the business practices area. Two years ago, for
    example, we were using the credit card to buy most of our small
    purchases. Our small purchases are anything less than $2,500.
    We do about 10 million contract actions a year. Seventy-five
    percent of them were less than $2,500. And yet, we were only
    using the credit card for about a fourth of them.
        We now have that up so that this year about 90 percent of
    all small purchases will be with a commercial credit card. So
    we won't have to go through a contract office, a payment
    office, and all the expense and complexity that government-
    unique purchasing was requiring when we can use just a modern
    business tool.
        That is an example of things that we are doing in this
    area.
        The third bullet is where we talk about competition of jobs
    that are currently in government, being undertaken by
    government employees. There was a real push earlier in the
    1990's for us to privatize everything. We ran into a real buzz
    saw with that.
        Part of it was substantive, and part of it was political.
    It was very hard to just tell government employees who had been
    working hard and thought they were doing a good job that we are
    just going to get rid of you. So we said we were not going to
    do that.
        Then, 2 years ago, our approach was we are going to open it
    up for competition, we are going to try to compete many more
    jobs using the A-76 process. It is cumbersome. It takes 2 years
    to conduct a competition under the A-76 process. And most
    people in the private sector say we are crazy to do it this
    way.
        But this is a process that has been worked out over the
    years, and it is considered to be a fair meeting ground between
    the private sector and the public sector. So government
    employees are not unfairly punished by our just throwing their
    jobs away and the private sector has a chance to explicitly
    know how to compete and to compete fairly.
        Historically, we have done about 2,000 A-76 competitions.
    Roughly half the time the government employees win; the other
    half the time the private sector wins. In every case, the
    taxpayer has won.
        We have averaged savings of 30 percent on the average,
    across the board, when we have done these competitions. We want
    to expand that.
        Last year, we did about 26,000 A-76 competitions. That was
    more than the last 13 years combined. We want to go beyond
    that. We want to compete up to 229,000 jobs.
        Now I have to say that this is causing some back pressure.
    You are all hearing it, I am sure, from back home.
        A lot of the constituents that are talking to you are
    probably saying that this is just pre-staging base realignment
    and closure (BRAC), that they are just setting us up so that
    they can close our base.
        Our view is that it is exactly the other way around. That
    base is going to be a lot more competitive if it becomes
    efficient in how it is working. As I said, half the time
    government employees win and become much more efficient in the
    process. This is a good process and probably one of the best
    ways to save a base.
        It is not pre-staging the closure of bases. But I know you
    are hearing lots of opposition. I would ask you to please let
    us know. We will amend the process in any fair way we can
    without making it less efficient. And it is already pretty
    inefficient. As I said, it takes us about 2 years to do it.

                                 Depot closures

        Senator Stevens. Will you close the depots first?
        Dr. Hamre. Sir, on the two depots that were controversial
    because of the last base closure round, what we did on those is
    this. I know there was a lot of opposition to this. But when
    the President said that we ought to privatize in place, what we
    said on our end was this: Mr. President, what we will do is
    open them for competition. We will keep the jobs there if they
    can win a competition.
        So we held three competitions--actually four. One was for
    the C-5 work that was down in San Antonio. Then there was
    basically all the work at McClellan Air Force Base, which was
    out in California. Excuse me, it's three competitions. Then
    there was the engine work that was at San Antonio.
        In each three we held competitions. For the first one where
    we held a competition, we, frankly, did not do it very well.
    Warner-Robbins won the competition, but there were a lot of
    things we learned in that process that I wish I had known
    earlier. They could have made a difference. But we did not go
    back and try to change that.
        The next two competitions, at McClellan, in each case what
    we said was that McClellan, which was going to be privatized,
    had to find a private sector partner. They did. The Air Force
    depot, in this case Hill Air Force Base, had to find a private
    sector partner to compete as a team-mate.
        They did that, and it turned out Hill won and Sacramento,
    California, lost. So the depot will close in Sacramento.
        We just held a competition about 2 weeks ago at Kelly Air
    Force Base. This was for the engine work. There was a very
    tough competition.
        But Texas and Oklahoma, both the depots, had private sector
    partners. And in this case, it was a heck of a competition, but
    Oklahoma won. They won with a private sector partner.
        Now it turns out some of the jobs are actually going to
    stay in Texas, but entirely under private sector hands.
        So, sir, we are closing those two depots.
        Senator Stevens. But it is 3 years, almost 4, years later.
        Dr. Hamre. Sir, it definitely did take us a longer period
    of time. But I honestly think we have saved enormous sums of
    money that we would not have saved otherwise. This is because
    what we would have done under the old BRAC formula is to take
    every one of those jobs and basically reproduce exactly the
    same way of doing business at one of the other depots. And we
    would have paid huge facilitization bills and we would not have
    gotten the efficiencies from the competition.
        We saved several billion dollars through this, even though
    it did take us longer.
        Believe me, it was painful. I would have loved to have
    avoided the pain of this. But it actually, I think, worked out
    better for everybody when all is said and done.
        Senator Stevens. Thank you.
        Dr. Hamre. Sir, I have to do this next thing or my boss
    would ``whup'' me. I have to say that we need two more rounds
    of BRAC. I know that is not a happy message to bring up here.
    But we have excess facilities.
        We much would prefer to be able to finance the forces we
    need, to do so and not have to finance bases we don't need. I
    know it is controversial. I know it is not a happy message to
    bring. And I know from talking to all of you privately that you
    have been as helpful as anybody has to try to work out these
    problems.
        But we really would like to be able to go along here. We
    think this is the fairest way of doing business, and we hope
    that we have demonstrated our bona fides to you by the way we
    handled the privatization competitions at Texas and California
    such that we can earn your confidence to manage this process.
        Let me wrap it up there. I have a closing chart, but I
    won't show it because I think we have covered everything and
    you have been very kind to let me go on for so long. Let me now
    take any questions that you might have.
        Senator Stevens. Let me first ask Senator Cochran, who has
    joined us, if he has any opening comments.
        Senator Cochran. No, Mr. Chairman. I will await my turn.
        Thank you.

                       Budget caps and budget resolution

        Senator Stevens. You had a list up there. I mentioned it in
    the beginning. We believe we need about $8.3 billion in more
    budget authority to pay for the year 2000 budget.
        What is the administration's position on that? How are we
    going to get over the cap?
        Dr. Hamre. Well, sir, the administration's budget, the
    budget we sent you had all of these different things in it
    because we had to stay under the cap. I think this is the tough
    problem we are presenting to you.
        Everything we have presented to you, you could do. Whether
    you want to do it is another matter. Whether it is a good thing
    to do is another matter. But all of it is executable.
        We did not submit to you a budget that was not executable.
        Senator Stevens. Some of them are here for the third time,
    Mr. Secretary.
        Dr. Hamre. Yes, sir, like the rescissions. I mean, I really
    don't expect you to do that. I mean, I really don't expect you
    to do that, even though we have proposed it to you. So we are
    just going to have to sit and work with you somehow this year.
        Frankly, we would like to see a budget resolution that
    settles the big picture and that opens up the 2000 to whatever
    resolution we need for 2000.
        Senator Stevens. I want to ask you this, just from your
    accounting management background. If we yielded to the budget's
    request for the military construction and just paid the first
    year, am I right that it would cost more money in the long run?
        Dr. Hamre. Sir, I think it has the potential for costing
    more in the long run. This is why I think we would have to
    really manage this much more intensively than we otherwise
    would.
        What we would have to do is to watch very closely for every
    one of these projects that we don't have contractors who are
    hedging their bets that the dollars won't appear the second
    year and, therefore, they price the first year in an aggressive
    manner. I think there are lots of challenges that come with
    that.
        Senator Stevens. I would like to explore this. We might set
    up criteria so that you would put a cap on progress payments
    per year. If that saves money, we ought to know.
        I think that just putting up a portion of the money is
    going to lead to questions from contractors as to whether the
    second year is going to be there in time and whether, if they
    can make better progress, they could obtain monies to complete
    the project sooner at a lower cost.
        I really think you lose basic management to contain costs
    unless it is totally funded at the beginning.
        I wish you would really get some people to study it. I
    think the committee would be willing to examine military
    construction from the point of view of a new approach. But it
    would have to be one that is permanent, not just for 1 year.
        This is just 1 year, for that first year of a series of
    projects that are already on the priority list, right?
        Dr. Hamre. Yes, sir. And it is 1 year and then we back
    right out of it.
        Our preference is to do full funding. That would be our
    preference to do. We only did it because we had the cap that we
    had to slip under.
        I'm sorry, but I'm committing to the truth here.
    [Laughter.]
        Senator Stevens. It's like that old game where you used to
    try to sneak under the pole. We played it when we were young.
    What's that game?
        Senator Cochran. Limbo.
        Senator Stevens. Yes, limbo. This is a ``limbo budget.''
    You had to sneak under the lowest position on the stick. I
    don't think you made it.
        Dr. Hamre. Sir, I was a lot younger when I did limbo, and I
    usually fell down. [Laughter.]

                           limiting progress Payments

        Senator Stevens. You have a series of adjustments, too,
    that I think we ought to talk about. There are really credits
    that you have taken. There's $500 million by limiting progress
    payments to contracts above $2 million. That just harms the
    little guy. Why would we do that?
        Dr. Hamre. Sir, I think there has really been no adjustment
    to the progress payment caps for I don't know how many years.
        Bill came up with this idea. I think Bill ought to sit up
    here and defend it. [Laughter.]
        Of course I am ultimately responsible.
        Senator Stevens. You know, it's nice at least to have
    genius recognized, Bill. [Laughter.]
        Why is just for amounts, contracts, above $2 million? It
    would seem that the people who need progress payments are the
    people in the bracket below $2 million. Why don't you limit the
    progress payments to the area where there is sort of an ability
    to fund concept?
        I am just asking the question. What is that limit for?
        Mr. Lynn. The limit is just the administration and the
    expense of going through the steps of progress payments we have
    had since the 1950's, that we would not do progress payments on
    contracts with a value of less than $1 million.
        This is adjusted essentially for inflation. In fact, it is
    quite a bit less than the inflation adjustment since the
    1950's, and it would bring it up to $2 million.
        Senator Stevens. Isn't the effect of it, though, to take
    small business out of progress payments?
        Mr. Lynn. It would take small contracts, and to the extent
    that those small contracts are with small businesses, that is
    correct, Mr. Chairman.
        Where I think we would like to go in the long run, frankly,
    is to move away from progress payments entirely and move to a
    milestone billing where, instead of just paying for financing,
    to finance contracts over the length of them, to where we
    establish milestones. When a piece of the contract is
    delivered, we would pay a part of the price. That would take us
    entirely away from the old method.
        Senator Stevens. I would like to discuss with you the
    alternative of a departmental loan guarantee approach and get
    away from that altogether.
        But I have used up my time.
        Senator Inouye.

                             Recruiting challenges

        Senator Inouye. Mr. Secretary, I would like just to touch
    upon three areas--recruiting, retention, readiness.
        We have learned that the Navy has reduced its recruit
    requirements. For example, they are taking in a higher
    percentage of dropouts, non-high school graduates. The Air
    Force has not been able to meet 2 of the first 3 months'
    recruiting goals in fiscal year 1999. And we note that the
    propensity to enlist used to be about 18 to 19 percent, and now
    it is 12 percent.
        Are you really concerned because I am?
        Dr. Hamre. Yes, we are very concerned. It is very hard to
    recruit now.
        Senator Inouye. Would the new retirement reform and pay
    raises make a difference?
        Dr. Hamre. Sir, our data does not show that young recruits
    are motivated so much by pay raises. More than anything, it is
    our getting to them. It is hard to get at young men and women
    these days.
        Guidance counselors do not know the military as well. We
    have trouble getting into a lot of schools in some regions.
    Parents do not have the associations with the military that
    lead them to encourage their kids to think about the military.
        It is a big, big, comprehensive problem that we have to
    work through. And we are really competing for very different
    talent.
        You know, 25 years ago, we were competing for kids that
    might try to get a job at the local machine shop. Now we are
    competing for kids who have computer skills, who are going to
    go to junior college and to college. We are really after a much
    tougher market.
        So it takes a combination of things. It takes recruiting,
    that is, enlistment incentives, education incentives. As you
    can see, we have really boosted our education incentives.
        We have to put a lot more recruiters out there. We have to
    start working the high schools again and not the bus stations.
        When you get short, you start getting desperate. Recruiters
    start getting worried and they start working the bus stations,
    where people do not have as many options. We really need to
    start working high schools again.
        Senator Inouye. I notice that the Air Force is going to
    start advertising. Does advertising make that much of a
    difference?

                            advertising for Recruits

        Dr. Hamre. Yes, sir, it does.
        This is the first time in history the Air Force has ever
    had paid advertising. They have had public spots where
    broadcasters would just air them, but that is at 2:00 in the
    morning and that sort of thing.
        What we find is a lot of young people do not know that we
    are still open for business, that we are still hiring, and we
    are hiring lots of people. We are going to hire 220,000 people,
    and young people do not necessarily know. Advertising opens
    things up. It makes them aware that there are options that
    otherwise they may not be hearing.
        It also opens the doors for our recruiters. So we think
    advertising is important.
        I think the question is how effective our advertising is. I
    think that is a fair question. And where should we be
    advertising?
        Here I think the services are really working at this. I
    mean, you want to advertise on things that kids watch, ESPN
    type channels and programs where young, athletically oriented
    kids are frequent viewers. That is where we ought to be doing
    our advertising.
        You and I may not see it because we are watching Public
    Broadcasting or Masterpiece Theater or something similar. But
    that is not where the kids are. So we do not necessarily see
    where our advertising dollars are spent.
        But I think it is important to do it so that they are aware
    of us.

                          impact of Retirement reform

        Senator Inouye. Recently, RAND came out with an analysis
    that suggested that the retirement reforms would have very
    little impact on retention. Is that your view?
        Dr. Hamre. Sir, I think what the RAND analysis showed is
    this. They are looking at where do you put marginal dollars to
    get the biggest return. From their analysis, far and away the
    largest return for the marginal investment would be with pay
    raises for mid-grade NCO's, field officers, and more senior
    NCO's. That is where you really would get your biggest return.
        Those are the people who are most underpaid and that is
    where you have retention questions. It would be bigger cash in
    the pocketbook right now.
        I think that analysis was right. But I think the retirement
    issue became a much larger symbol to our men and women in
    uniform. It became a symbol of do you really understand what I
    am doing for you and do you respect what I am trying to do.
        I don't ask for much but to be treated fairly. Had we not
    increased the retirement, gone back from 40 percent to 50
    percent, it would have been a damaging development and signal
    to our NCO's and to our officers.
        I think we had to do that. In a pure and analytic sense,
    there probably is a higher payoff for the pay table reform. But
    this was something we had to do. There was just no question
    about that and I think the Congress was right to do it and to
    endorse it.

                      Downsizing and recruiting standards

        Senator Inouye. We have Bosnia, we have Iraq, possibly
    Kosovo and other places. Do you believe that we have down-sized
    too much? Every time there is a budgetary crunch, the first
    word that comes out is ``downsize.''
        Dr. Hamre. Sir, there is no question that we are doing more
    with fewer people and it is stressful.
        As I mentioned to you, our analysis shows that our
    operating tempo (OPTEMPO), our deployment days, are running 300
    percent higher, 3 times higher than they were back in 1989. And
    yet, we have 40 percent fewer folks. It is very tough.
        But I also look at how hard it is to recruit. Right now, we
    would not be able to recruit a larger force structure. We are
    having a hard time recruiting to this force structure.
        I think we are going to make it this year. But we want to
    make it in a way that does not lower the quality standards.
        You mentioned in your introductory observation that the
    Navy has lowered its threshold.
        We were very careful in working this through with the Navy.
    It is not getting lower quality people because the people that
    we are after are those that, while they may have dropped out of
    high school, they have demonstrated in other ways that they
    have the innovation and the energy to compensate for that. And
    they have demonstrated on test scores, they have demonstrated
    in other words, in working on getting a general equivalency
    degree (GED) or things of that nature.
        So we really don't think we are accepting lower quality,
    although we are changing the measure, the yardstick by which we
    measure that quality to see if it works.
        This may not be a permanent change.
        Senator Inouye. Today's military requires the most skilled
    people.

                              Retention challenges

        Dr. Hamre. Sir, I tell you that you see that on the
    retention side.
        Almost to the day, 2 months before an NCO is ready for
    reenlistment, if he is in the computer business, he gets job
    offers, big job offers from the private sector. I mean, they
    will buy anybody that we can produce who has computer skills
    because there is such a shortage there. We have a heck of a
    time retaining those folks. It is a lot harder for us to retain
    people who are smart on computers than it is to retain pilots.
    And they are getting job offers that are 2 and 3 times what
    they are making as an E-4, E-5, or E-6. It is really shocking.
        That is where you see the real challenge. We are not
    recruiting to compete against the guy whose only option is to
    flip hamburgers at the local McDonald's. We are competing to
    get real talent, the higher part of the talent spectrum.
        It's tough.
        Senator Inouye. I notice that I have gone beyond the red
    light. I am sorry, Mr. Chairman.
        Senator Stevens. Senator Shelby.
        Senator Shelby. Thank you.

                   technology development for Missile defense

        Secretary Hamre, I have supported for a long time the
    efforts of this country to deploy and to operate ballistic
    missile defense systems. Success of these efforts I believe
    hinges on continued development of advanced technologies and
    research.
        Do you share my concern that we may be short-changing the
    advanced technology side of the ballistic missile defense (BMD)
    budget?
        Dr. Hamre. Boy, I don't know. We have to do it.
        Senator Shelby. Do you agree, basically, that our success
    depends on the continued research and development of
    technologies to deal with this?
        Dr. Hamre. Yes, sir. But what I do not have is a sense from
    building a budget that we had short-changed it this year. So I
    am going to have to go back and find out, or talk with you to
    find out what your concerns are.
        Senator Shelby. Some of my real concerns are there.
        Dr. Hamre. Yes, sir. I would be happy to sit down with you
    on that.
        Senator Shelby. We cannot just go with one technology, can
    we in BMD?
        Dr. Hamre. I think it is very clear that there is high risk
    in this area and we do have to have lots of options. At least
    we have to analyze options here. Yes, sir.
        Senator Shelby. Doctor, hasn't there been an obvious high
    rate of change in the arena of defense technology and would you
    agree that a healthy research and development in technology is
    very important--not only in this area, but in all the areas,
    but especially in the area of ballistic missile defense?
        Dr. Hamre. Yes, sir.
        But I also have to say that it is more complex in the sense
    that there is an awful lot of innovation going on in the
    private sector that we, frankly, ought to be buying from them,
    rather than trying to develop in our own in-house labs,
    sometimes.
        Sometimes our labs, frankly, protect old ideas, not develop
    new ideas. So it is working interactively that is important,
    and only the real experts can sort that out.
        Senator Shelby. But the best thing there is the cross-
    fertilization, would that not be so----
        Dr. Hamre. Yes, yes, sir.
        Senator Shelby (continuing). With our labs and with the
    marketplace----
        Dr. Hamre. Yes, the private sector.
        Senator Shelby (continuing). Because there has been an
    explosion in this area?
        Dr. Hamre. And the universities, too.
        Senator Shelby. Oh, yes. It is just a connection that is so
    obvious and on which we have built over the years. It should be
    nurtured.
        Dr. Hamre. Yes, sir. It still is why we are so strong
    today.
        Senator Shelby. It is obvious to all of us that there has
    not been that breakthrough yet to field a ballistic missile
    defense. In other words, as of today, at 11 o'clock, as far as
    I know, we don't have a defense against ballistic missiles
    incoming to anywhere in America, do we?
        Dr. Hamre. Not for a national sense. The PAC II is good
    against slower velocity ballistic missiles. But not in a
    national sense.
        Senator Shelby. Not against intercontinental ballistic
    missiles.
        Dr. Hamre. No, sir. We don't have that.
        Senator Shelby. Not against any kind of fast missiles.
        Dr. Hamre. That's right. Yes, that's right.
        Senator Shelby. So that has to be not only one of your
    greatest challenges but one of ours, sitting on this committee.
    Should it be?
        Dr. Hamre. Yes, sir. I think the administration has at
    least given you a much stronger program this year in the sense
    that we fund it. There are still some big, technical challenges
    out there, and we have to make sure that we do not create an
    environment where we rush in without doing disciplined testing.
        Senator Shelby. Oh, I totally agree. That is why the
    technology and the continued research and development is so
    important, is it not?
        Dr. Hamre. Yes, sir, and the disciplined research and
    development. Yes, sir.
        Senator Shelby. And the cross-fertilization, as I say, from
    all of that, from our universities, from the private sector,
    and from our own national labs.
        Dr. Hamre. Yes.
        Senator Shelby. Thank you, Mr. Chairman.
        Senator Stevens. Yes, sir.
        Senator Cochran.

                             additional BRAC rounds

        Senator Cochran. Thank you, Mr. Chairman.
        Dr. Hamre, you mentioned the request for two additional
    BRAC rounds. Let me ask you this question.
        Does the budget assume any savings from new BRAC rounds? If
    so, how much?
        Dr. Hamre. Sir, there are some assumed savings in 2005, but
    there are much higher costs in 2001 through 2004. So the budget
    actually has several billion dollars of net costs associated
    with BRAC rounds, not savings.

                           maintaining 300-ship Navy

        Senator Cochran. Is the Future Years Defense Plan which is
    submitted with this budget sufficient to maintain a 300 ship
    Navy? If not, how many ships will it maintain?''
        Dr. Hamre. Sir, it will maintain a 300 ship--may I
    reformulate your question? This is not to avoid it but because
    the Future Years Defense Budget only goes 5 or 6 years.
    Obviously, we are able to keep 300 ships for 5 or 6 years.
        The real issue is can you maintain 300 ships if you are
    only buying 7 new ships every year. I think that is the real
    problem.
        I think the answer to that is no if we are going to hold on
    to the old retirement schedules. So we would either have to buy
    more ships or get ships that can live longer, and probably some
    combination of both.
        We clearly need to get a stronger ship-building program.
        Senator Cochran. Is there a mean lifespan now that you
    consider?
        Dr. Hamre. Sir, I think we talk in the average across all
    ship classes that the average is about 35 years. I remember
    when it used to be 30 years. So you used to be able to divide
    fairly easily and you needed to be buying at least 10 ships a
    year. We now think we can get buy with buying 8 ships a year.
        But we are really just barely at the right number.
        Senator Cochran. But the Navy put the U.S.S. Mississippi in
    mothballs after 17 years, or some short period of time it
    sounded like to me.
        Dr. Hamre. Sir, I'm going to commit a cardinal sin and
    admit to you I don't know what the U.S.S. Mississippi was.
        Senator Cochran. It was a nuclear powered frigate.
        Dr. Hamre. Oh, the cruiser.
        Senator Cochran. Yes. The cost of refueling it ended up
    being so expensive, as a comparative matter, that they decided
    to mothball it.
        Dr. Hamre. Right. That was one of those where we made a
    strategic investment in what we thought made sense and it turns
    out that nuclear power is not very cost effective in smaller
    combatants. So the recoring, redoing the core, was just
    excessive, and we would rather put it onto a brand new ship, so
    that we can keep it modern, up to state of the art electronics
    and fire control systems.

                         release of Appropriated funds

        Senator Cochran. Let me ask another question.
        It has come to my attention that the Comptroller's Office
    at the department has refused to release appropriated funds for
    several programs that have been requested by the services. The
    programs are spread throughout all categories--operations and
    maintenance, procurement, research, development, testing and
    evaluation, military construction and family housing--in
    effect, all services, including the Reserves and National
    Guard.
        For example, over 30 Navy research, development, test and
    evaluation (RDT&E) programs have been on hold since December
    under the order of the Office of the Secretary of Defense
    (OSD).
        What is OSD's policy on releasing appropriated funds? Have
    there been any recent changes in OSD policy concerning release
    of funds?
        Dr. Hamre. Senator, I am shocked at all the problems we are
    having with this new Comptroller. I mean, it is just amazing.
    [Laughter.]
        I'm kidding, of course.
        Sir, there has been no change in policy.
        Senator Cochran. I think we ought to identify the fellow
    with you for the record. He has had such an important part to
    play here this morning.
        Dr. Hamre. The reason I joke about that is he always talks
    about how much better things are now compared to the old
    Comptroller. [Laughter.]
        Sir, there has been no change in policy.
        I think what happened this year is the following. Normally,
    when budgets, when the Appropriations Bill is done, there is a
    process that we have to go through of apportionment and other
    things. The services then give us requests to release the
    dollars, and then we do that on the basis of the requests.
        When we do it, we consider is there an obligation plan, et
    cetera.
        Senator Cochran. Well, the services have requested these
    funds.
        Dr. Hamre. They just started to, sir.
        What has really happened is, because we were so late in
    getting our budget together this year--we really did not wrap
    up our budget until January of this year and the services were
    working on it--all the people who normally would have been
    working in November to prepare budget release documents really
    were not doing that. They have just started coming in to Mr.
    Lynn here in the last month.
        There is no policy of holding anything up. We are not
    building rescission lists, even though we have proposed a
    rescission to you. We will work everything through in normal
    order to try to have a sensible execution. There has been
    absolutely no change in policy, sir. I would be glad to sit
    down and go through any of it with you. And I apologize for my
    rude remark about the Comptroller. He is a good friend and he
    is doing very well. [Laughter.]
        Senator Cochran. Oh, he doesn't mind, I'm sure. [Laughter.]

                          National Missile Defense Act

        The National Missile Defense Act will be before the Senate
    very soon. It provides, and I quote, ``It is the policy of the
    United States to deploy as soon as technologically possible an
    effective National Missile Defense System capable of defending
    the territory of the United States against limited ballistic
    missile attack, whether accidental, unauthorized, or
    deliberate.''
        That is the entire bill.
        Is there anything in this bill that you would interpret to
    mean that the Defense Department should disregard measures of
    operational effectiveness or sound developmental testing
    practices in determining whether the National Missile Defense
    System is technologically ready to provide an effective defense
    against limited ballistic missile attack?
        Dr. Hamre. No, sir. I believe your adding that to the
    legislative record would be an important dimension to us
    understanding how to implement it. But I don't think that is
    the core of the opposition that the administration has to it.
        I think they are opposed not on that. I think it is really
    on the implications it has for arms control and things of that
    nature.
        Senator Cochran. Well, we continue to hear as an excuse for
    not supporting it that there is no assurance that the system
    would be tested, for example, enough to justify its reliability
    to then justify the appropriation of dollars to deploy the
    system. That is why it has in here ``effective,'' the word
    ``effective.'' That contemplates testing. It contemplates that
    it works.
        Dr. Hamre. Yes.
        Senator Cochran. And then also there is the phrase
    ``technologically possible.'' That means the technology is
    sound, and it is effective, and it is reliable.
        So I am suggesting that a fair reading of the words of the
    bill put to rest some of the concerns that are being raised and
    used in the loudest criticism of the legislation.
        I was just curious about your personal reaction to the
    language of the bill.
        Dr. Hamre. Sir, my personal reaction is as you have said. I
    read the language and it says that you would still expect us to
    be good program managers. You would still expect us to do
    testing, disciplined, rigorous testing--not slowing us up, just
    to test for the sake of testing, but to do disciplined testing
    to know that it really would be effective and that it really
    would work.
        Senator Cochran. And that Congress would have to authorize
    the deployment----
        Dr. Hamre. Yes.
        Senator Cochran (continuing). And fund it through the
    authorization and appropriations process.
        Dr. Hamre. Yes, sir. But just so I don't get myself
    terribly in trouble with those with whom I work, I, again,
    don't think that is the centerpiece of the administration's
    opposition to the bill.
        I think it really rests more on the arms control issues and
    things of that nature.
        Senator Cochran. Thank you very much, Mr. Chairman.
        Senator Stevens. Thank you.

                             Kosovo observer costs

        Dr. Hamre, you made a point that there is no money in this
    budget for Kosovo. Yet, we have indications that there have
    been substantial costs for the diplomatic observer mission
    there. We have not seen any accounting for that--
    communications, vehicles, force protection, transportation
    costs. How extensive has that Kosovo expense been so far?
        Dr. Hamre. Not much.
        Bill?
        Mr. Lynn. It's been, I think, in the neighborhood of $50
    million or $60 million so far.
        Senator Stevens. It's at that level? It's not above that?
        Mr. Lynn. Let me double check for the record, but that is
    what my memory says.
        [The information follows:]

        The Department's total cost for KDOM and E-KDOM (Expanded
    Kosovo Diplomatic Observer Mission) was approximately $18
    million ($15 million for the Army and $3 million for the Navy).
    E-KDOM was a rapid expansion of the initial KDOM mission to
    increase the ability to verify compliance with UNSCR 1199 and
    negotiated agreements. Included in the above estimate are
    start-up costs associated with American observers, medical team
    support, purchase of communications equipment, establishment of
    communications infrastructure, security upgrades, and provision
    of vehicles used by the observers.

        Senator Stevens. We had a briefing that indicated that we
    had contingency plans at a substantial level for extraction of
    those people and that we had equipment in place in case
    anything broke down there; and that the United States was
    designated to be sort of the protection force in the event they
    had to come out. Is that not right?
        Dr. Hamre. I believe that we definitely were not doing
    that. I believe that that was being done led by, I think the
    French took the lead in doing that or the British took the lead
    in doing that.
        We have forces in the area, of course, that, if there was
    an extremis situation, could be helpful. But those are like the
    Marines that are already on location.
        We did not designate any specific forces and we are not
    planning for any.
        Senator Stevens. You're not taking any specific forces for
    protection?
        Dr. Hamre. No, sir. We are supporting logistically the
    Kosovo verification mission (KVM). We have some hummvees on the
    ground and things of that nature. But it really is a fairly
    modest composition.
        Senator Stevens. Just for the record, would you give us an
    explanation of the efforts and how they were funded?
        Dr. Hamre. Yes, sir. Sure will.
        Senator Stevens. Also, include whether we are going to be
    seeing any kind of reprogramming on that.
        [The information follows:]

        The Department has contributed to the NATO air
    reconnaissance and surveillance mission in order to assess
    compliance by all parties with the provisions of U.N. Security
    Council Resolution 1199 in Kosovo. DOD assets include U-2, P-3,
    and UAV Predator aircraft and associated personnel support.
    Thus far, the Navy has incurred costs in excess of $10 million
    and the Air Force over $15 million. These costs are not
    reflected in the current budget, and therefore will likely be
    included in a larger emergency supplemental funding request for
    unplanned contingency operations in Kosovo and Southwest Asia.

                   release of fiscal year 1999 Appropriations

        Senator Stevens. Senator Cochran mentioned a portion of the
    items. But we are starting to get calls that indicate that the
    1999 funds have not been released yet. That raises some
    substantial concerns about whether they will be obligated in
    this fiscal year and whether we are facing some attempt to
    carry over portions of 1999 into year 2000 to soften the blow
    of the budget. Is there such advice or plan?
        Dr. Hamre. There is no such plan, sir. We are proceeding
    under the normal order. I think we are, frankly, about 2\1/2\
    months behind schedule because it took us 2\1/2\ months longer
    to build a budget this year. So there has been no change in any
    of that direction.
        Believe me, I talked with Bill on the way up. We will work
    that to make sure that we don't have any problems.

                         concerns about a Hollow force

        Senator Stevens. I have had several personal conversations
    with some of the uniformed people about our approaching signs
    of a hollow force. Are you really keeping track of hollow force
    signs?
        Dr. Hamre. Sir, we meet on a monthly basis, the Senior
    Readiness Oversight Council. It is where we sit down and survey
    where we are on readiness.
        I must confess to say I think that has been, the
    granularity of that as an oversight mechanism I don't think was
    giving us early warning of the recruiting and retention
    problems that we were having, for example.
        We have doubled the effort. The Secretary now meets much
    more regularly with the senior enlisted advisors. He goes out
    in the field every month. We have hired a new guy who goes out
    to look at readiness issues. He gives monthly reports to the
    Secretary. So we are trying to get a better handle on it.
        Each of the service chiefs knows that this is their
    responsibility.
        Senator Stevens. We were in Kuwait, Saudi Arabia, and
    Bosnia about 18 months ago--I think it was 18. No, it was 9
    months ago.
        We had substantial indications from the enlisted and middle
    grade, or lower grade, officers of an intention not to
    reenlist. We also had some rather cryptic comments about the
    availability of parts and replacement systems.
        I remember one who told me personally that he found it nice
    to be where he was in Kuwait because he got what he needed when
    he needed it. The unit he had just left had been put on a long
    delay in order to make those parts and systems available to
    people in either the Persian Gulf or Bosnia.
        Dr. Hamre. I believe that.
        Senator Stevens. To me, that is a sign of a hollow force.
    If your Reserves are not adequately serviced in terms of parts
    and replacements, that means they cannot do much to assist
    anybody who is already deployed.
        That is what happened before. It was not that we could not
    maintain the ships that were deployed. It was that we could not
    get them away from the dock in Norfolk because they did not
    have parts, supplies, and personnel.
        I think we ought to have a watchdog force to tell us about
    the signs of a hollow force. That, to me, at this time would
    just be catastrophic, to see us return to the days of a hollow
    force.
        Dr. Hamre. Sir, if I may, what you have described I think
    we actually see all the time, that we absolutely do resource
    our forward deployed forces richly, by comparison, and then we
    take it out of the nondeployed forces that are back home. We
    are allocating scarcity. That is the nature of where we are
    right now.
        It is part of the reason why--and we laid this out to the
    President--we allocated $49 billion of the $112 billion for
    readiness items. We basically fully funded the readiness items
    that the Chiefs identified in their lists when they submitted
    them.
        Senator Stevens. The Chiefs identified $154 billion and you
    have it at $112 billion, and we really think you have about $12
    billion. I don't really see that money out there beyond this
    year.
        My time is up.
        Senator Inouye.

                       Missile defense and the ABM Treaty

        Senator Inouye. Mr. Chairman, if I may follow up on Senator
    Cochran, when the Department of Defense (DOD) announced that
    they would be requesting $6.6 billion over the next 5 years for
    the production of a National Missile Defense System, it was
    noted that this may violate treaty arrangements but that the
    administration would negotiate changes in the treaty.
        With that sort of assurance in mind, Senator Cochran and I
    reintroduced our bill. Then we were told that the President
    might veto that bill and that no decision on deployment would
    be made until June of the year 2000.
        They also argued that the Cochran bill would jeopardize
    treaty negotiations.
        Has the administration made up its mind as to its position
    on missile defense?
        Dr. Hamre. Yes, sir, I think it has.
        Senator Inouye. It is a bit confusing to me.
        Dr. Hamre. If I may, I will try to do better, although I am
    not as capable as most people who are really the day to day
    experts in this area.
        We believe that we are at the top. We have always said that
    there were two criteria for a National Missile Defense. We had
    to have a threat and we had to have something that was
    technologically feasible. We feel that we are at that point,
    where we should press ahead.
        But there is another dimension to it. We are at a point
    where a National Missile Defense System does, indeed, come up
    against the restrictions that are in the ABM Treaty.
        Now where I think we have a disagreement--not necessarily
    between you and me, sir, but between the administration and
    members of Congress--is, is the ABM Treaty still an important
    dimension of our security posture? Does it contribute to a
    stronger defense of America, the ABM Treaty?
        We think it actually does. We think it continues to do so.
    But we know, then, that we have to find a way to amend the
    treaty if we do, indeed, want to deploy a National Missile
    Defense System.
        This is a process that we would like to do collaboratively
    with the treaty partner, you know, sitting down with Russia. We
    would like to talk it through with them and to make adjustments
    that are mutually acceptable.
        We honestly believe that this treaty, that amending the
    treaty to accommodate a limited National Missile Defense is
    going to help them as well. It really is not going to undermine
    their deterrent force.
        This is designed against relatively small numbers, you
    know, measured in two digits. They still have the capacity to
    launch thousands.
        So we do not believe this in any way threatens their
    deterrent force, and we think it actually strengthens and
    provides more stability in the world against rogue actors. So
    we feel that there is a basis to go and sit down with Russia
    and to say that an amendment of the ABM Treaty is in our mutual
    best interests, one that would accommodate the National Missile
    Defense System that we need.
        Senator Inouye. Is it your belief that the Cochran bill
    will put into jeopardy this negotiation?
        Dr. Hamre. I think, as people read the Cochran bill, sir,
    that they read it to suggest that the only criterion now is
    technical feasibility. That is where the administration says
    you are prejudging any outcome of the discussion that we need
    to have with Russia about amending the ABM Treaty. Therefore,
    because of that we cannot support it.
        That is the basis, the primary basis.
        Senator Inouye. Even with that statement, is it not true
    that if deployment is to be accomplished, it would need
    authorization from the Congress?
        Dr. Hamre. Sir, it would, along with the funding that would
    go with it.
        Senator Inouye. So it is not automatic that, if it
    technologically feasible, a system would be established?
        Dr. Hamre. Sir, I understand that point and I think it is a
    compelling point to be making in a debate.
        However, what our Russian treaty partners are saying is
    look at where this is going. Look at what you now state is the
    law of the land. You are going to do this. It is not an issue
    to negotiate. You are just simply fooling around with us, just
    spending time talking. But you have already committed to this
    thing irrespective of the treaty.
        We do not want to be in a position where our only option is
    simply to use the Supreme National Interest Clause and to drop
    the treaty because we honestly believe that the treaty, in an
    amended form, will continue to be really a strong dimension to
    our program. And we would like to continue it and contain it,
    modify it so that we can retain it.
        But that does take negotiations. That does take discussions
    with them. And I think the senior advisors to the President
    feel that the Cochran bill in its current form prejudices that.
    So that is why I think that they are suggesting their
    opposition to it.

                  threats to U.S. computers and communications

        Senator Inouye. Recently you made a speech before the House
    or in your testimony you suggested that we were engaged in a
    cyber-war at this moment. On Monday, the South China Seas News
    Agency reported that hackers had already captured a British
    military satellite.
        Are we in a position where we can protect our satellites?
        Dr. Hamre. First, the answer to that is yes.
        I would like, however, to find an opportunity to talk with
    you in a more appropriate setting for the comments that I made
    in front of the House. The observations I made there were in a
    classified session. Everyone in the room understood that they
    were classified, that they should not have been discussed. I
    was a little surprised that some members held a press
    conference.
        So I would like to talk with you about it, frankly, in a
    different setting. I would be happy to do that.
        Senator Inouye. Do you believe that there is a problem that
    would justify meeting with us on the other conditions?
        Dr. Hamre. Yes, sir. I do.
        Senator Stevens. We shall arrange that, Senator.
        I am surprised that you are surprised, though. [Laughter.]

                                  Y2K problems

        Senator Inouye. As you know, we are presently involved very
    deeply, not knowing where we are headed, on the Y2K computer
    problems.
        Dr. Hamre. Yes, sir.
        Senator Inouye. Are you satisfied that we are on the right
    track?
        Dr. Hamre. I have had three hearings this week on Y2K.
    Somebody said that we had all these systems at the department
    that were big and bulky and little memory. I thought they were
    talking about me. Instead, it was the computers. [Laughter.]
        We have been working very hard at trying to get on top of
    the Year 2000 program. Absolutely, nothing is more important.
    Rarely does a military organization know exactly the time and
    the place when the enemy will attack. Most of the time we are
    just in some uncertainty about where the threat is and when the
    attack will occur. But we know the time, the date, the location
    of where this attack will take place. There is going to be no
    excuse for a military organization to have a failure because we
    were not ready for this.
        That was the message the Secretary gave to everybody in the
    department.
        Now to put some discipline in it, he turned to the Chairman
    of the Joint Chiefs, and he turned to each of the Chiefs, and
    he turned to each of the CINCs, and he said, ``You are the war
    fighters. This is about your ability to go to war. I am holding
    you responsible and I am putting you in charge of testing.''
        So I am not going to take the word of the computer guys
    that this thing is fixed. I want the war fighter to tell me
    that it is fixed.
        Senator Stevens. My information is that we have $1.1
    billion in emergency money that is available and that you have
    not released it.
        Dr. Hamre. No, sir. It has been released.
        Senator Stevens. Totally?
        Dr. Hamre. No, sir. There is 15 percent withheld that was
    directed that we do back and forth. It is really to reserve for
    contingencies that might come up here this summer in the
    testing program.
        Senator Stevens. Has it gotten down to the service chiefs?
        Dr. Hamre. Yes, sir. It sure has.
        Mr. Lynn. It is being apportioned today.
        Dr. Hamre. Oh?
        I stand corrected. I thought that was done. It is being
    apportioned today and it will be there, then. I apologize.
        Senator Stevens. That's what I had heard. It isn't there
    yet.
        Dr. Hamre. I'm embarrassed for that. I mean, it should be
    that we told anybody--unless I was asked, and some people said
    I can't do this unless you get me the money. I'd say that would
    be a very interesting point to bring up at your court martial.
        I mean, they are not going to let anybody use as an excuse
    that they could not be ready.
        Now I'll tell you that the money is enormously helpful and
    it is going to make all the difference. It is the way we are
    going to finance the testing and to finance the fixes.
        Senator Stevens. We've seriously considered giving a
    whistle blower bonus in an amendment to this bill that is out
    there because I think we ought to know if anybody thinks that
    there is not enough being done. If he or she is right, if that
    person is right, they ought to get some incentive award for
    bringing it out into the light.
        It is a very serious thing.
        Dr. Hamre. Yes, sir.
        Senator Stevens. I think anybody who does not have the
    money and would use that as an excuse and didn't say anything
    about it to Congress or somebody really has no defense.
        Dr. Hamre. Sir, you are absolutely right. But I have also
    told them that you don't have a defense. We have a $10 billion
    I-T budget, information technology budget. We spend $10 billion
    a year. They have the flexibility to divert other projects in
    order to finance corrections on Y2K.
        This is not to say that this is not helpful. Your addition
    in the supplemental was enormously helpful. But we are not
    going to take an excuse from somebody that oh, I'm sorry, I
    could not defend the country with my part of the mission
    because you didn't give me money. I said that is a good excuse,
    but we will use it at your court martial.
        We are not going to take no for an answer. It will be
    fixed.
        Right now, 81 percent of our systems are fixed.

                             Y2K problems overseas

        Senator Stevens. I was told last night that the members of
    the Y2K Committee are going to Russia and other places soon to
    discuss the issue with those with whom we might have some
    problems.
        Does the department have sufficient liaison with those
    people who have problems?
        Dr. Hamre. Sir, if I may, I think regarding problems, there
    are three broad areas where we have been talking with them and
    where we have some concerns.
        First, we are not worried about their Y2K problem that
    would affect their command and control of nuclear weapons. They
    have designed so many redundant systems for control that we see
    no case where missiles will launch by accident in year 2000. It
    would not happen here and we are confident that it won't happen
    there.
        On their early warning systems, frankly, we are worried for
    them. Their early warning systems are older. They are very
    computer based, as are ours. There is already a somewhat
    fragile early warning environment that they have.
        We do not believe that year 2000 will all of a sudden
    generate missile tracks on computer screens. We don't think
    that will happen.
        But we do think that there could, indeed, be disruptions,
    screens could go blank, there could be garbled information that
    would be confusing.
        So, to deal with that we have proposed to them, and at very
    senior levels--this is the Secretary talking to Minister
    Sergeyev, and we had follow-up technical discussions just last
    week--to establish a shared center for the Y2K, what we call
    the Y2K Stability Center, where they would have observers that
    would be watching our terminals and we would have observers at
    the same place. We would invite them to bring their early
    warning terminals as well. We could work together.
        We modeled it after the shared air traffic control center
    that all four parties had in Berlin for 25 years. For 25 years,
    we had a single, shared air traffic control center. Russian air
    traffic controllers were right beside American air traffic
    controllers. So if something went down, if somebody's radar
    went down, they could look at another screen.
        We think that would be useful here in this environment. We
    propose to do that. We will be ready to go operational this
    fall with that capability.
        I would not say we have their signature on the dotted line
    and a date when they are coming. But I think we have had very
    senior discussions and fairly good, encouraging discussions.
        The area about which we are probably the most apprehensive
    really is not so much in the defense area, but it is the safety
    of the nuclear reactors. Are their backup systems adequate to
    this problem?
        With nuclear reactors, if all of a sudden the electricity
    goes out, you still have to continue to cool the reactor for
    several days so that you do not have problems. So what are the
    backup controls associated with the system so that they can
    continue to provide power to the coolant pumps and things of
    that nature?
        I think we have greater concerns in that area, and I think
    that is one where, if there is an international support effort,
    that would be a first place we ought to look.

                   impedance of missile defense by ABM Treaty

        Senator Stevens. I want to thank you. I am a little
    disturbed about your comment about the ABM. You know, back in
    1985, Senator Dole asked me to chair the Arms Control Observer
    Group of the Senate.
        We spent a great deal of time studying the ABM Treaty. We
    have met almost annually with other Nations since that time.
        I do not think the Nations of the world view the ABM Treaty
    as anything other than a treaty that dealt primarily--that
    dealt, period--with ICBMs. Our threat is ballistic missiles,
    not ICBMs. I do think that it is a great problem.
        We come from the part of the country where a ballistic
    missile could, in fact, be an ICBM. We all know that it was the
    distance between Murmansk and Maine that made a missile an
    ICBM, and there are much shorter distances between us and
    potential adversaries on the Pacific Rim.
        But I do think to hold up the proceeding with the
    development and with the preparation of the site for a
    ballistic missile system, a National Ballistic Missile System,
    until we get an agreement from the Soviets--I mean now the
    Russians--an agreement from the Russians as to the agreement we
    made with the Soviets on ICBMs, is foolhardy.
        I have to tell you that we see things differently. I think
    you ought to come up and just visit my state. Just walk down
    the street with me and hear the subject that people talk to me
    about. The first one would be impeachment. The next one would
    be National Missile Defense. Without any question, it is at the
    same level of visibility in our State because of the activities
    in North Korea and now that we know China is cooperating with
    North Korea. It is out in the street over there. It is
    classified there, but it is not classified up there.
        Dr. Hamre. I didn't know I had been impeached. I will go up
    with you any time.
        Senator Stevens. Oh, you haven't been. But some of us were.
    The President wasn't, but some of us were.
        Dr. Hamre. Yes, sir. I understand.
        Sir, if I could, I am not sure there is so much difference
    between us on this issue.
        We have explicit instructions to the developers of the
    National Missile Defense not to be constrained by the ABM
    Treaty in their design. Nothing has happened that I know of----
        Senator Stevens. That's still the design. You're supposed
    to start with the site starting in 2000. It was for deployment
    in the year 2003. No matter what you say, I mean, there have
    been broad statements from the administration, but no matter
    what you say, you have rescheduled it and it has been delayed.
    It is not going to go out on a 3 plus 3, as Dr. Perry committed
    to this committee when he sat in that chair (indicating).
        You know that. It cannot be 2003 now. What you are saying
    is it might not even be in 2004 or 2005 because of the delays
    that might come out of the ABM. I think that is unacceptable to
    the Senate. I hope it is on a bipartisan basis. It is sure not
    acceptable to those of us who come from offshore states.
        Dr. Hamre. Sir, I have heard the President say personally
    that we are not going to let problems with negotiations ever
    keep us from making a decision to deploy this system, in
    deploying it.
        Senator Stevens. But you have already.
        Dr. Hamre. No, sir. I honestly don't think we have. But I
    would like to sit down and talk with you, go through it, to
    make sure I understand the concern that we have and what we
    have indeed done.
        I know of nothing we have done that has been impeded or
    inhibited by the ABM Treaty to date, and I do not believe
    anything we are proposing to you is going to suggest that our
    program is impeded, our going ahead with it.
        Senator Stevens. Well, we put up $1 billion--this committee
    did it, requested Congress to do it, and they agreed with us--
    $1 billion emergency money to try to accelerate the deployment
    date for the National Missile Defense System. It is going to be
    used, but it is not directed toward accelerating the deployment
    date. It is being used toward--what--I would say perhaps
    accelerating the pace of review of the existing developments,
    the existing research.

                          Technology development risks

        Dr. Hamre. Sir, I actually think, to go back to what
    Senator Cochran raised, that we are pressing as fast as we can,
    consistent with prudent management of this technology. This is
    tough stuff, and we are moving ahead. Right now, the program
    that the Secretary recommended to the President and that the
    President submitted has, I think, really only one end to end
    test with production representative hardware before we deploy.
    And this is unbelievable development risk.
        Senator Stevens. If I am correctly informed, we do not have
    a technological problem. What we have is a systems development
    problem. The technology exists. It is the integration that is
    the problem that has to be solved.
        Now that could be accelerated, in my judgment, and it is
    not being accelerated. And, as a matter of fact, I think it is
    being delayed.
        An end to end test is one thing. But I don't even think we
    are getting simulated tests now by 2003.
        Dr. Hamre. No, sir. I think we are doing that.
        Again, what I need to do is to bring up the experts with
    me. I retail at a pretty little markup when it comes to this,
    to your pleasure.
        Senator Stevens. I think we ought to have a hearing here
    and as soon as possible.
        Dr. Hamre. Yes, we would be happy to do so.
        Senator Stevens. Well, I am afraid our hearing is after the
    fact because the bill is going to be up on the floor before
    then.
        Dr. Hamre. We would be glad to have our experts come up and
    talk while you are still working on this, before the bill comes
    on the floor, to go through it. I honestly believe we are not
    that far apart from you on this.
        Senator Stevens. I think the worst thing that could happen
    to the Nation would be to have a veto of the National Missile
    Defense Bill because of a basic misunderstanding about the ABM.
    It looks to me like that is where we are going.
        My friend, I think--and I share the same opinion--we are of
    a different generation. Our generation believes that if you see
    a head, hit it. If someone is going to raise their head over
    that--what was that name out in the Pacific--if you raise your
    head above the fence line, you take it down if it is a danger
    to the United States. That is all there is to it.
        We are not doing that now. We are tip-toeing toward the
    future as far as National Missile Defense, and that is not
    acceptable. I hope this bill goes forward. Man, I tell you that
    I think it would be the worst mistake that could be made, to
    have a veto of that bill because of the ABM considerations.
        Enough said. It's nice to see you all.
        Senator Inouye. Let us sit down together.

                         Additional committee questions

        Senator Stevens. Yes. We would be happy to sit down with
    you anytime.
        Dr. Hamre. OK. Thank you so much.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                  Question Submitted by Senator Arlen Specter
                         funding for v-22 and comanche
        Question. In testimony before Congress earlier this year (February
    2, 1999--House Armed Services Committee), Secretary of Defense Cohen
    and Joint Chiefs of Staff Chairman, General Shelton mentioned the V-22
    ``Osprey'' and RAH ``Comanche'' as programs that still have unfunded
    requirements in terms of modernization. Secretary Cohen spoke of
    accelerating the production rate of the V-22 for the Marine Corps from
    30 to 36 in order to get more aircraft to the field sooner. General
    Shelton mentioned more funding for Comanche so the helicopters can be
    purchased more efficiently or at a faster rate. Would you please
    comment on the requirement and benefits of additional funds for both
    these programs, as supported by both the Secretary of Defense and the
    Joint Chiefs of Staff?
        Answer. Clearly the Department has many unmet needs, even with the
    $112 billion added by the President. I am aware that the Services have
    provided you with their priorities for additional funds, and they are
    not out of line with what we could execute effectively.
                                     ______

                Questions Submitted by Senator Pete V. Domenici
        priorities decreases in rdt&e and science and technology budgets
        Question. Given the long-lead time to develop new weapons and
    information systems, how does the administration propose to maintain
    U.S. technological supremacy while reducing defense-wide RDT&E budgets?
    Do you believe that you can maintain the scientists and infrastructure
    required for success with dwindling resources?
        Answer. While the total defense-wide RDT&E budget request for
    fiscal year 2000 is slightly less than the fiscal year 1999 RDT&E
    budget request, selected Budget Activities within RDT&E have actually
    experienced an increase in requested funding. Specifically the
    summation of Budget Activities 1, 2, and 3 has increased from $7.2
    billion in fiscal year 1999 to $7.4 billion in fiscal year 2000. This
    is the science and technology portion of our RDT&E budget and it is the
    foundation of our modernization program. As technology matures and is
    evaluated in Advance Concept Technology Demonstrations and U.S.
    Atlantic Command's joint experimentation efforts, we will have a better
    idea of which technologies offer high payoff and will pursue their
    integration into operational systems in the remainder of our RDT&E
    activities. I believe we will be able to maintain the scientists and
    infrastructure required to ensure the technological superiority
    currently enjoyed by our armed forces if we have the flexibility to
    hire the right people and choose the right facilities. The BRAC
    authority requested by the Secretary would improve the flexibility in
    decisions regarding infrastructure. The personnel legislation we are
    working on with the Office of Management and Budget and Office of
    Personnel Management, and the Commercial Personnel Transfer Program for
    Science and Engineering will help by increasing the Department's access
    to talent found in the private sector. Further, the department is
    committed to RDT&E infrastructure streamlining as part of the section
    912(c) studies and plans continuous monitoring of infrastructure cost
    reductions to increase the efficiency of RDT&E organizations.
        Question. The Air Force has announced their intention to reduce Air
    Force Research Laboratory personnel. Is Air Force science and
    technology a lower priority than in the past? Given the importance of
    air operations in our deployment and military dominance objections, how
    can these reductions be justified? Is this a wise choice?
        Answer. Air Force Science and Technology (S&T) is not a lower
    priority than in the past. Air Force S&T continues to be critically
    important to our national defense, and the Air Force has maintained its
    overall S&T investment at last year's level. In fiscal year 2000, the
    Air Force's S&T Program has been restructured to provide the research
    essential to the Air Force vision of an Expeditionary Aerospace Force
    (EAF). Achieving this EAF vision requires increased emphasis on space
    technologies and the integration of air and space technologies.
    Unfortunately, restructuring in a tight budget environment requires the
    termination of certain programs with attendant reductions of personnel.
    While portions of the S&T Program will be redirected, the overall
    program remains focused on the most critical technologies needed to
    perform our national security mission in the future.
                         aerospace expeditionary forces
        Question. The Air Force is revamping their structure to be an
    Expeditionary Aerospace Force comprised of 10 Aerospace Expeditionary
    Forces. They are currently in the process of making decisions as to
    what assets and personnel will be drawn from which bases to make up
    these ten forces. When will the Air Force conclude drafting its plans?
    With three Air Force bases in my state, I would like to know what
    changes to anticipate from this restructuring process.
        Answer. We designed our EAF organizational structure to help manage
    our forces under national tasking levels we defined as ``Steady State''
    (i.e. on-going operations in Southwest Asia, Bosnia, Panama, Iceland,
    etc.). We feel that 2 AEFs and an on-call Aerospace Expeditionary Wing
    (AEW) is the structure that we can sustain over the long term. The
    structure also provides initial forces and a systematic process to meet
    national crises such as Humanitarian Relief and combat operations.
        The latest crisis in Kosovo represents a major surge across the
    board and requires a far greater number of forces than our AEF on-call
    structure makes available. This requires our Airmen to operate at surge
    TEMPO levels above and beyond those we defined as sustainable over the
    long term. America's Airmen are answering the nation's latest call with
    superb skill, dedication and personal sacrifice, and this surge
    operations TEMPO comes at a cost to the long-term health and readiness
    of our force.
        Once the TEMPO of Kosovo operations subsides, we will re-apply the
    AEF structure to manage our forces' commitment levels. Our staff is
    presently assessing the impact of Kosovo operations and developing
    transition plans to meet the world-wide ``post-Kosovo'' Steady State
    taskings that have yet to be defined. Our EAF concept is inclusive in
    nature and, as such, consist of weapon systems and personnel from all
    three bases in New Mexico.
        In the fiscal year 2000 PB Force Structure announcement, we
    announced the designation of the 27th Fighter Wing at Cannon AFB as an
    AEF lead wing. In fiscal year 2000, the wing will receive 84 military
    positions as part of implementing the concept. Additionally, the 49th
    Fighter Wing at Holloman AFB received 66 military positions and the
    377th Air Base Wing at Kirtland AFB received 2 military positions.
    These authorizations ensure that our wings have the necessary personnel
    required to handle increasing deployment taskings without placing undue
    burden on the home base.
                         military construction funding
        Question. If the Administration is willing to increase salaries and
    pensions in order to try to address retention, why are they set on
    undercutting military construction support as it also directly relates
    to quality of life at our military installations?
        Answer. We are committed to the quality of life on our military
    installations and the fiscal year 2000 military construction program
    reflects that commitment. Our facility investment program value of
    $8,653,492,000 for fiscal year 2000 represents an 11 percent increase
    over our fiscal year 1999 request of $7,778,074,000 and a 2 percent
    increase over the fiscal year 1999 appropriation of $8,443,742,000. The
    growth in the military construction and family housing programs
    continues over the future years defense plan (FYDP) for a five to ten
    percent increase overall. This affirms our continuing commitment to
    invest in our infrastructure and quality of life. The only difference
    this fiscal year is the manner of financing our fiscal year 2000
    program requirements (over two fiscal years). We believe this one-time
    use of advance appropriations will not impede our ability to execute
    the fiscal year 2000 MilCon program in a timely manner.
                           white sands missile range
        Question. I have been informed that White Sands Missile Range will
    be transferred from Army Materiel Command (AMC) to Army Test and
    Evaluations Command (ATEC) as of fiscal year 2000. What implications
    does this change in structure have for WSMR? What changes can we
    anticipate in terms of personnel, equipment modernization, and
    maintenance funding under this new command structure?
        Answer. There will be no change to White Sands Missile Range (WSMR)
    as part of the establishment of the new Army Test and Evaluation
    Command (ATEC). Downsizing at WSMR that is already in progress will
    continue until 2001. The planned downsizing is due to the Quadrennial
    Defense Review of 1998 and other budget measures, but there will be no
    downsizing due to the establishment of ATEC. In regards to
    modernization and maintenance, we will continue funding at levels
    consistent with current and planned WSMR resources. The new ATEC
    command will consolidate all of the current Operational Test and
    Evaluation Command and most of the current Army Test and Evaluation
    Command. The approved ATEC reorganization does not include any changes
    in the number, grades, or types of personnel at WSMR.
       defense reform initiative and dod's electronic commerce resource
                                    centers
        Question. According to recent reports about the Defense Reform
    initiatives, Electronic Commerce at the Department of Defense is
    reducing overhead and providing a better interface for private
    enterprises, especially small businesses, interested in DOD business.
    So far, the geographic distribution of the existing 17 Electronic
    Commerce Resource Centers appears to heavily favor coastal states.
    (There are four Centers in Texas but none in any of the 4 Corner
    states, OK, NV, KS, WY, etc.) How does DOD make decisions regarding
    locations for the ECRCs? Would it be beneficial to have Resource
    Centers that could serve locations in the Midwest and Southwest?
        Answer. DOD followed the recommendations of congressional
    committees for the locations for sixteen of seventeen ECRC sites. DOD
    made the most recent decision regarding the location of the seventeenth
    ECRC by convening a Committee composed of senior DOD officials to
    identify the site most in need. The criteria used by the ECRC Site
    Selection Committee were based on the level of existing coverage and
    the density of the ``manufacturing cluster.'' The Committee recommended
    the Southern California regional area as the site for establishment of
    an ECRC because it had less coverage but more manufacturing enterprises
    than the other proposed sites. Under this criteria, the Midwest and
    Southwest were more adequately covered than Southern California. With
    the exponential growth of electronic commerce, especially on the
    Internet, the need for an ECRC outreach and training program within DOD
    is being reassessed. A senior-level panel is being formed to review the
    entire program and determine how to proceed with ECRCs in the future.
                             f-117 stealth fighter
        Question. I have been told that we have an F-117 Stealth Fighter
    plane grounded in California that needs about $6 million in landing
    gear repairs before it can return safely to Holloman Air Force Base. It
    will remain in California until these repairs can be made. Because this
    specific incident has not been handled quickly, I am wondering whether
    this is another example of shortfalls in spare parts. We have a multi-
    million dollar asset grounded and awaiting repairs, and we seem to
    either lack the extra money to repair it or the spare parts for our
    Stealth Fighters cannot be located. Could you please enlighten me
    regarding this situation?
        Answer. On June 4, 1997, an F-117 (Tail #825) was damaged during
    landing. Initial on-site inspection revealed major damage to all wheel
    wells, adjacent structure, equipment bay, and internal racks &
    equipment. The initial repair estimate was $5,700,000. In August 1997,
    Lockheed Martin Skunk Works (LMSW) submitted a NTE proposal for
    $6,100,000 to both assess and repair the aircraft. Air Combat Command
    requested more detailed information to better define/refine the repair
    estimate, and LMSW, in response, submitted a proposal (February 5,
    1999, $389,000) to generate the detailed assessment.
        Several attempts have been made to procure repair funds for Tail
    #825. However, Air Combat Command has been able to fully meet all F-117
    wartime taskings and training obligations with existing air frames.
        Earlier this year, Air Combat Command funded the $389,000 damage
    assessment. Tear down activity is underway, and a detailed repair
    estimate will be available in July 1999. Air Combat Command will then
    have until August 10, 1999 to put the requirement on contract.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                         f/a-18e/f procurement strategy
        Question. Mr. Secretary, coming from a state with a large stake in
    the nation's aviation assets, I have been a proponent of multi-year
    procurements of aircraft such as the C-17 for the Air Force and the AV-
    SB for the Marine Corps; when we know that there will be a significant
    procurement for an extended period in order to capture any economies
    that the program managers, comptrollers and industry can squeeze from
    the programs. In that light, I believe that the critical nature and
    progress of the F/A-18E/F program might lend itself to such a
    procurement strategy in the very near term. Would you support such a
    strategy and when would you like to implement it?
        Answer. The Department of Defense has requested multiyear approval
    for the F/A-18E/F in the fiscal year 2000 President's Budget. The F/A-
    18E/F program has consistently been on cost and schedule, and has met
    or exceeded all Key Performance Parameters, making it an excellent
    candidate for multiyear procurement. The program meets the requirements
    for a multiyear procurement by providing substantial savings (estimated
    to be more than $700 million), a stable requirement, funding stability,
    and a stable design.
        Question. Mr. Secretary, though I applaud the idea of smoothing
    deployment schedules for reservists and active duty personnel, I am
    concerned that you are now relying upon strategic reserves to fulfill
    roles traditionally covered by active duty forces, especially when we
    are in a peacetime mode of activity. The modernization plan as I see
    it, works on a sort of trickle-down theory. Will you guarantee that
    reserve and guard units folding into the deployment schedules have
    equipment which is compatible and adequate training to effectively
    employ those assets, and how do you intend to do it?
        Answer. The Department of Defense always strives to ensure that our
    forces are fully trained and ready before deployment. National Guard
    and Reserve forces are provided equipment and training to ensure the
    successful accomplishment of the missions they are tasked to
    accomplish. The key to providing new equipment and appropriate mission
    essential task training is early identification of the mission, the
    capability required, and the specific unit to be employed. Early
    identification allows the necessary training resources for
    participating Reserve Component (RC) units to ensure their readiness
    for deployment. For example, the 49th Armored Division (Texas Army
    National Guard) is programmed to replace the 10th MTN DIV as the
    command and control element of Task Force Eagle (Bosnia) on or about
    March 2000. Prompt identification of that division has allowed the
    development and execution of a focused, properly resourced training and
    equipping program in preparation for this mission.
        The services have the responsibility to equip and train the RC.
    Given adequate resources, they would equip their Reserve components to
    the same standards as their active counterparts. The Total Force
    modernization budget, however, is not sufficient to provide state of
    the art equipment for all. The RC must modernize through a combination
    of new equipment procurement and the use of equipment cascaded from the
    Active component. The services distribute equipment according to the
    ``first-to-fight'' approach, but have the latitude to vary equipment
    distribution to accommodate special missions.
        Once units are identified for an operational mission, the services
    ensure these units have sufficient equipment and training to meet
    mission requirements. If required, new and redistributed equipment
    flows to these units out of sequence to meet deployment timelines.
    Thus, lower priority units may be brought to a higher readiness level
    more quickly than normal, enhancing the ability of such augmented units
    to deploy more rapidly.
                                     ______

                 Questions Submitted by Senator Mitch McConnell
                           army budget and priorities
        Question. Over the past several years the portion of the defense
    budget devoted to the Army has steadily declined. Over the same period
    of time the optempo for the Army has increased dramatically. This has
    resulted in fewer soldiers with greatly increased responsibilities, and
    therefore has hindered the Army's ability to meet mission and retain
    soldiers. Does the DOD foresee a time when this trend will be reversed
    and the Army's share of defense spending will increase?
        Answer. All services have encountered problems because of increase
    optempo. DOD has various initiatives to alleviate these problems, plus
    the added resources added in the President's fiscal year 2000 budget
    will help as well. Solutions are not expected to rest on increased
    troop strengths, but rather better management of optempo burdens.
        The Army's spending share is projected to increase. By fiscal year
    2005, Army outlays are planned to increase to 25.7 percent of the DOD
    total--up from 24.4 percent in fiscal year 1999.
        Question. Does the DOD have a plan to train soldiers (/Marines) on
    urban terrain? What role will simulated training have in this plan?
    What is the proposed funding for this type of training and where will
    it take place?
        Answer. Yes. ``Military Operations on Urbanized Terrain'' (MOUT) is
    not a new warfare environment, but it is receiving a great deal of
    attention, largely due to lessons learned in Chechnya, Somalia, and
    Haiti. The Department has compiled extensive documentation on tactics,
    techniques, and procedures (TTPs) for MOUT. The Army and Marine Corps,
    our principal MOUT Services, routinely use those TTPs as part of their
    training programs. In addition, to deal with the challenges of today's
    threat environments, the Department is conducting significant research,
    in the form of studies, demonstrations, and experiments, to identify
    new doctrine, weapons, TTPs, and training tools that will improve
    warfighting skills and effectiveness, while reducing the potential for
    casualties.
        Simulated training will be an integral part of the training. Part
    of the current experimentation and demonstration programs is
    investigating new training aids. These include simulation as well as
    facilities and instrumentation. As the specific lessons are
    ``learned,'' and programs for dealing with them are developed, they
    will be assessed and incorporated into training and training investment
    programs.
        Training for operations in urban terrain is an integral part of
    unit training for operations in general. It is not funded separately.
    The funding is not tracked through any central account, and the exact
    amount is not known.
        Most combat units train to conduct operations in all terrain,
    including ``urban'' terrain. Such training, therefore, is conducted in
    a wide variety of locations throughout the Army and Marine Corps.
    Specific training for MOUT, such as ``force on force'' or ``live fire''
    training, is conducted at the following locations:
    Army Locations (Current)
        Fort Benning, Fort Polk (JRTC), Camp Ripley, Fort Drum, Camp
    Gruber, Camp San Louis Obispo, Hohenfels (CMTC), Fort McClellan, Camp
    Williams, Fort Hood, Schofield Barracks, and Camp Blanding.
    Army Locations (Planned)
        Fort Bragg, Fort Wainwright, Fort Lewis, Fort Campbell, Fort
    Stewart, Fort Riley, Fort McCoy, and Fort Carson.
    USMC Locations (Current)
        Okinawa, Twenty Nine Palms, Camp Lejeune, San Diego, Camp
    Pendleton, Quantico, and Parris Island.
    USMC Locations (Planned)
        MCAS Yuma.
        Question. Does the DOD consider the failure of the military to meet
    recruiting goals serious? What does the Department plan to do to
    address these shortfalls? Specifically, does the Department plan to
    increase funding for Army recruiting?
        Answer. The robust economy, with the lowest unemployment rate
    experienced during the history of the All-Volunteer Force, coupled with
    ever-increasing youth college attendance, makes recruiting especially
    challenging. We will closely monitor recruiting during this challenging
    year to ensure that sufficient resources and recruiters are being
    applied to ensure success.
        In light of these fiscal year 1999 challenges, the Army increased
    recruiting resources by more than $100 million above its planned fiscal
    year 1999 investment, including a hike in the enlistment bonus (EB)
    ceiling for 3-year enlistments from $4,000 to $6,000. Both the Army and
    Navy have implemented a new $3,000 EB for those agreeing to attend boot
    camp during the historically low-flow spring months. In addition, the
    Navy and Marine Corps increased advertising resources by $35 million
    and $9 million, respectively. The Air Force plans to begin using paid
    TV advertising--the first time ever that Air Force will pay for prime-
    time television exposure. The Air Force also has increased its fiscal
    year 1999 advertising budget by $23 million (from $16 million to $39
    million) and front-loaded $37 million for fiscal year 2000 advertising.
    The Army, Navy, and Marine Corps have added to their College Fund
    ``kickers'' (which are additions to Montgomery GI Bill benefits) so
    that the total money-for-college incentive is now set at $50,000 for
    the traditionally difficult-to-fill skills. Finally, the Navy is
    increasing recruiter strength by 10 percent, up to 4,500 by March 1999,
    and the Air Force is working to fill an 18-percent deficit in recruiter
    manning.
        The Army has boosted its recruitment budget in fiscal year 2000 by
    $17 million (2 percent) over the fiscal year 1999 level. However, we
    monitor recruiting outcomes on a monthly basis and, should we find that
    the Army or another Service is in danger of missing its objectives, we
    will quickly work the problem within the context of the Department's
    Planning, Programming, and Budgeting System.
        Question. Can the JROTC program be expanded, and what impact might
    that have on recruiting?
        Answer. Under title 10, section 2031, the Junior ROTC program is
    authorized a total of 3,500 units. Currently, approximately 2,600 units
    are in place for the Army, Navy, Air Force, and Marine Corps. If
    additional Service funding for the program were available, 900 more
    units could be established without a change to law. Currently, there
    are approximately 450 schools on Service waiting lists for new units.
    Assuming a 4-year phased expansion of 900 units, from 2,600 to 3,500,
    the estimated expansion cost would be approximately $27 million the
    first year, $41 million the second, $54 million the third, and $68
    million the fourth. However, such expansion within the current Defense
    budget would come at the expense of other imperatives. The difficult
    task of prioritizing programs led the Department to conclude it could
    not pursue JROTC expansion in fiscal year 2000.
        We know from surveys of graduating cadets that, historically, about
    40 percent of high school graduates with more than two years'
    participation in the program end up with some military affiliation
    (active enlistment, reserve or guard enlistment, or officer pre-
    commissioning program). In addition, military recruits who are
    graduates of Junior ROTC may qualify for higher enlisted grades upon
    entry into active duty. In summary, Junior ROTC is offered to school
    districts as a DOD citizenship and leadership program for secondary
    school students, and while it may provide students with greater
    awareness of the role of the military, it is not a recruiting program.
               chemical weapons demilitarization and acwa program
        Question. Why has the DOD chosen to ignore clear Congressional
    intent and not reprogrammed funds to complete necessary testing within
    the Assembled Chemical Weapons (ACWA) program?
        Answer. Public Law 104-208 requires the DOD to identify and
    demonstrate not less than two alternative technologies for the
    destruction of assembled chemical weapons. The Program Manager, ACWA
    selected three technology providers that met the demonstration criteria
    to proceed with demonstration activities. Public Law 105-262 permits
    the Army to reprogram up to $25 million for the ACWA Program to
    complete the demonstration of alternatives to baseline incineration for
    the destruction of assembled chemical weapons; however, no additional
    funds were appropriated. The Army is reprogramming $15 million to
    complete the demonstration testing of three technologies and other
    tasks Congressionally mandated in Public Law 105-261.
        Question. Can the DOD assure Congress that the technology with the
    greatest potential to be the safest, most effective and best
    alternative to incineration, is being demonstrated?
        Answer. Thirteen technology proposals were submitted to a multi-
    step evaluation process. Seven proposals were approved at the screening
    step and six proposals at the demonstration step. All six technologies
    that passed the Demonstration Criteria potentially could be the safest,
    most efficient, and least likely to adversely affect both human health
    and the environment. A best value determination was then used to rank
    order the proposals and determine within limitation of funds which
    technologies would be demonstrated. Within the limitations of funding
    and information available at the point of decision for demonstration,
    the three best technologies are being demonstrated. The Congress
    mandated by Public Law 104-208 that DOD identify and demonstrate not
    less than two technologies.
        Question. Is it true that three of the four highest rated
    technologies, according to technical merit, are not being demonstrated
    by the ACWA program?
        Answer. The technologies rated acceptable for demonstration were
    neutralization followed by super critical water oxidation, solvated
    electron technology, Silver II electrochemical oxidation, plasma arc,
    and neutralization followed by biotreatment. The two highest rated
    technology providers submitted similar technologies and one technology
    provider was selected to demonstrate this technology. The remaining
    four technologies were determined equivalent in their technical merits
    and a best value process was used to determine, within the limitations
    of funds, two additional technologies for demonstration. This process
    and finding was supported by the March 8, 1999 General Accounting
    Office (GAO) decision denying the Teledyne-Commodore protest of the
    demonstration selections.
        Question. Is ``cost of demonstration'' relevant to the larger
    question of how expensive the technology will be to operate in the
    actual destruction of chemical weapons?
        Answer. The cost of demonstration is related to the maturity and
    complexity of a technology. Therefore, cost to demonstrate does provide
    insight into the life cycle cost, i.e. maturation, pilot and operation
    of a technology. The demonstration focuses on critical unit processes
    and the interface and effluent streams between unit processes. Complex,
    difficult to control technologies and technologies utilizing highly
    hazardous chemicals will cost more to demonstrate and will likely cost
    more to operate in a routine production environment.
        Question. Is it true that projected ``cost of demonstration'' of
    the competing technologies could have been significantly impacted by
    the Army's assignment of different technologies to different
    demonstration sites? Could these costs have been impacted by the degree
    to which each technology utilized the Army's baseline disassembly and
    caustic neutralization process? Doesn't this factor penalize the most
    innovative technologies?
        Answer. The cost of demonstration was most significantly dictated
    by the nature of the technology itself. If a technology required a
    significant portion of its process to be demonstrated because of an
    inadequate database for the validation of the process, the cost for
    demonstrating the technology would be higher. If the unit process(es)
    selected by the technology providers were a complicated one requiring
    many steps and controls involving very hazardous chemicals, and
    requiring a high level of analytical characterization, the costs would
    be higher. All of the demonstrations are being conducted at Government-
    operated facilities to which the technology providers must bring their
    equipment for testing. There may be some costs differences associated
    with testing different critical process units at different sites, but
    this is insignificant compared to the other direct costs for
    demonstration.
        All of the technologies being demonstrated offer variations on
    baseline disassembly/neutralization which require demonstration and
    have a cost associated with the demonstration. For example, fluid jet
    cutting/hydromining, cyrofracture and chemical neutralization of both
    chemical agent and explosives differ from the baseline disassembly/
    chemical agent neutralization and are being demonstrated at the unit
    process level and the ability to interface with down stream processes.
    These portions of the demonstration were costed-out and considered in
    the best value determination.
        All of the technology offerings and those selected for
    demonstration are innovative, varying in degree. Therefore the more
    critical point is the nature of the innovative technology and how that
    drives costs. An immature, complex technology that requires a high
    level of control that utilizes very hazardous chemicals will cost more
    to demonstrate than an equally innovative technology that is operated
    with low hazardous potential and relatively simple effluent streams.
    These points were considered in the technical and cost evaluation and
    the ultimate best value determination.
        Question. The Program Manager for Chemical Demilitarization has
    stated publicly that the levels of chemical agents routinely emitted
    from incineration facilities under optimum conditions would be an
    acceptable exposure level for workers and civilians.
        How does the DOD reconcile this claim with the September 1998 GAO
    report (GAINSAID-98-228) entitled ``Chemical Weapons: DOD Does Not Have
    A Strategy To Address Low-Level Explosives?''
        Answer. The current operational and monitoring practices at the
    operating chemical agent disposal facilities provide the maximum
    protection to both the workers and general population from destruction
    activities.
        The U.S. Army in coordination with the Department of Health and
    Human Services (DH&HS) developed low level airborne exposure limits for
    the occupational worker and the general population. These airborne
    exposure limits were published in the 1988 Federal Register prior to
    implementation. The worker airborne exposure limit is an 8-hour time
    weighted average for unprotected workers who may be repeatedly exposed
    for 8 hours per day, 40 hours per week, for a working lifetime with no
    adverse health effects. The general population airborne exposure limit
    is expressed as a 72-hour time weighted average which is an atmospheric
    concentration level allowable for the general population (including
    sensitive subpopulations) for indefinite, unprotected lifetime exposure
    with no adverse health effects.
        The chemical agent disposal facilities have a sampling network that
    uses both low level near-real time and historical monitors at the
    facility as point source monitors and historical monitors as perimeter
    monitors. The monitors at the chemical agent disposal facility are
    configured to monitor work areas where workers perform their job
    wearing no protective clothing at the worker airborne exposure limit.
    In addition, a perimeter monitoring network is established around the
    chemical agent disposal facility to monitor for chemical agent at the
    general population limit. This monitoring system is designed to provide
    maximum protection to the worker and the general population, it is
    overseen by the DH&HS to ensure that it is managed to a high standard.
        The GAO report (GAINSAID-98-228) is focused on low level monitoring
    for battlefield scenarios. It does not apply to domestic low level
    monitoring for chemical weapon storage or destruction activities. The
    report states that there is already DOD doctrine for domestic low level
    monitoring.
        The Program Manager for Chemical Demilitarization has a zero
    chemical agent release policy. During the twelve operating years at
    both Johnston Atoll Chemical Agent Disposal System (JACADS) and Tooele
    Chemical Agent Disposal System, there has never been a chemical agent
    release during facility operations. There were two minor releases to
    the environment at JACADS during maintenance activities. Neither of
    these minor releases, however, posed a health threat to the JACADS
    workforce or to the Johnston Island population due to protective
    measures in place. In addition to the monitoring and operating
    practices that are in place to ensure protection of workers and the
    general population, health risk assessments are also performed at each
    of the facilities to ensure conservative results. These health risk
    assessments assume that chemical agents are emitted from the stacks at
    or below the airborne exposure limits published in the 1988 Federal
    Register, even though chemical agent has not been detected in emissions
    from any of the operating facilities. All the health risk assessments
    performed to date show, if agent were to be released at limits
    described in the health risk assessments, that workers and the general
    population would be exposed to levels of chemical agents that would not
    adversely impact their health.
                                     ______

                Question Submitted by Senator Richard C. Shelby
       budgetary contingency plans--potential u.s. ground force in kosovo
        Question. Dr. Hamre, I am sure you share my hope for a peaceful
    solution to the civil strife which has plagued Kosovo. While I am
    hopeful for peace, I am concerned with the wisdom of securing that
    peace utilizing some 4,000 of our Marines, as part of a NATO force, in
    an open-ended peacekeeping venture. If these forces are indeed landed
    in Kosovo, for what would seem to be an extended period, what are the
    implications for the fiscal year 2000 defense Budget? Are there
    contingency plans for such an operation?
        Answer. The cost for U.S. involvement in a NATO peacekeeping force
    in Kosovo would depend on a variety of factors, including the exact
    size and composition of the final U.S. contribution, the intensity of
    the operations, and the condition of the local infrastructure. Since
    these have not been decided, the budget impact cannot be determined.
    This potential cost is not reflected in the current budget since the
    prospect of Kosovo operations emerged only after the fiscal year 2000
    Defense Budget went to print. Therefore, the Department would ask the
    Office of Management and Budget to submit a nonoffset emergency
    supplemental funding request to cover the cost of these operations.
                                     ______

               Questions Submitted by Senator Ernest F. Hollings
        Question. What has your office done to reassure the families of men
    and women who received the Anthrax vaccine during Desert Shield and
    Desert Storm?
        Answer. Since the Gulf War, at least four different panels have
    evaluated the premise that the anthrax vaccine, used alone or in
    combination with other vaccines and medications, contributed to Gulf
    War Illnesses. These four panels, the Institute of Medicine,
    Presidential Advisory Committee, Department of Veterans Affairs, and
    the National Institutes of Health, have investigated the cause of Gulf
    War Illnesses and concluded that the anthrax vaccine does not explain
    the long-term, chronic effects associated with Gulf War Illnesses.
        The Department's Office of the Special Assistant for Gulf War
    Illnesses makes every effort to address all the concerns of Gulf War
    veterans and their families. One of those concerns is that vaccines
    received during the Gulf War might be the cause of illnesses some of
    our veterans have been experiencing.
        In response to these and other concerns, the Special Assistant has
    developed and implemented an extensive outreach effort to the military
    member and his or her family. The Total Force Outreach is designed
    around visits to military installations where the highest
    concentrations of Gulf War veterans are expected to live and be
    assigned. It includes detailed briefings to active duty members,
    retirees, separated veterans, and their family members. The briefings
    include all the major medical concerns to include anthrax vaccines.
        The medical members on the Special Assistant's staff also make
    every effort to talk to military medical personnel to sensitize them to
    the concerns of the veterans as well as ensure they are providing
    complete information to their patients. Special Assistant Dr. Rostker
    and his deputy, retired Lt. Gen. Dale Vesser, also speak frankly with
    senior military leadership to increase their awareness of the concerns
    of military members and enhance the communication process--a lesson
    learned from the Gulf War.
        Dr Rostker has conducted seven Total Force Outreaches and is
    planning approximately one each month through fiscal year 2000. He also
    conducted 13 Town Hall meetings in major metropolitan areas prior to
    focusing on the Total Force.
        Question. We are aware that your office (DOD) is working closely
    with DHHS to respond to the increased threat posed by biological
    weapons and bio-terrorism to citizens of the United States. How can we
    in Congress be of assistance to you and the rest of the country in
    addressing this concern?
        Answer. Under the Federal Response Plan, the DHHS has been assigned
    as the primary agency responsible to provide coordinated federal
    response to public health and medical care needs following a major
    disaster or emergency, including those resulting from a terrorist
    incident involving the use of weapons of mass destruction (WMD). The
    Department of Defense supports HHS in this emergency support function.
        DOD and DHHS have always enjoyed a strong and cooperative
    relationship. Since the signing of PDD 39, we have been working even
    more closely together to develop and leverage areas of mutual interest
    so our collaborative efforts result in both efficiencies and economies
    in our programs. Many of these efforts are addressing the very
    difficult issues associated with medical counter-measures for both
    chemical and biological agents. In fact, we are currently engaged with
    DHHS in the critical issue of vaccines to ensure our efforts are
    synchronized and to develop even greater sharing of information to
    leverage our collective strengths. To that end, support of the
    President's Program for domestic preparedness will significantly
    advance the capabilities necessary to prevent and manage the
    consequences of a WMD incident. Further, your continued support of
    DOD's initiatives and programs needed to assure the availability of
    effective and practical medical counter-measures will pay a collective
    dividend for the citizens of the United States.
                                     ______

                Questions Submitted by Senator Patrick J. Leahy
             searching for alternatives to anti-personnel landmines
        Question. In September 1997, the President announced the objective
    of eliminating U.S. use of anti-personnel mines by 2006, and the
    Pentagon has pledged to ``search aggressively'' for alternatives to
    anti-personnel mines. I heard recently that the Pentagon officials who
    are responsible for the search for alternatives are already saying that
    they are not going to make the 2006 deadline. Besides reiterating that
    you are going to do your best to meet the deadline, what can you tell
    me about the search for alternatives that causes you to doubt your
    ability to meet the deadline?
        Answer. The Department of Defense is firmly committed to
    implementing the President's anti-personnel landmine (APL) policy. In
    June 1998, the President expanded and strengthened his September 1997
    policy announcements and directed the Department to end U.S. APL use
    outside Korea by 2003, and to aggressively pursue the objective of
    having APL alternatives ready for Korea by 2006, to seek alternatives
    to mixed anti-tank munitions that contain APL submunitions and to
    investigate innovative maneuver denial concepts that may eliminate the
    need for mines entirely. Having APL alternatives ready for Korea by
    2006 was set as an objective rather than a deadline because viable
    alternatives have yet to be identified, and the President recognized
    that there are significant risks and costs to build and deploy
    alternatives. There can be no guarantee that the search for suitable
    alternatives will be successful. Given congressional support, I am
    confident in meeting the President's 2003 deadline to end use of APL
    outside Korea and have guarded optimism for meeting his 2006 objective
    for fielding APL alternatives for Korea, but it is important to
    recognize the magnitude and difficulty of this challenge. At this date,
    we have not found suitable alternatives to our APL and mixed anti-tank
    systems, but our search is an aggressive, good faith effort not only to
    find, but also to field alternatives.
        Meeting the President's 2003 deadline.--To end the use of APLs
    outside Korea by 2003, we are developing a mixed anti-tank system, the
    Remote Area Denial Artillery Munition (RADAM) and have destroyed all
    stocks of Non-Self Destructing (NSD) APLs not needed for Korea or for
    training, leaving only our mixed anti-tank systems for use outside of
    Korea. RADAM combines the already fielded Remote Anti-Armor Mine (RAAM)
    and Area Denial Artillery Munition (ADAM) to preserve an artillery
    delivered anti-tank capability essential to protect the lives of U.S.
    forces. The RADAM program is on track and a production decision on this
    system will be made in fiscal year 2001.
        Meeting the President's 2006 objective.--In pursuing the objective
    of having APL alternatives ready for Korea by 2006, an aggressive
    effort is underway to provide effective defense for our forces and our
    South Korean allies that will eliminate the type of long lasting mines
    currently required. This program is called the Non Self-Destruct
    Alternative, (NSD-A). Two contracts have been awarded to develop three
    prototype ``Man-in-the-Loop'' systems adapting existing technologies to
    enable command detonation of weapons designed to halt an attack on
    South Korea. These prototypes will be assessed in fiscal year 1999 and
    the best concept will be selected for further development.
    Additionally, we are exploring technologies beyond Man-in-the-Loop that
    may offer both enhanced protection of U.S. forces and minimized risk to
    civilians.
        Searching for alternatives to mixed systems.--In order to meet the
    President's additional direction with regard to mixed systems, the
    Department will aggressively and fully explore a wide range of
    operational concepts and potential materiel solutions as alternatives
    for all U.S. mixed systems and the existing anti-personnel submunitions
    within the mixed systems. This concept exploration phase will be robust
    and include an examination of doctrine, tactics, force structure
    options, use of systems currently in development, materiel and non-
    materiel solutions recommended by the combatant commands, and other
    materiel concepts from various independent and government-funded
    laboratories and industry.
        Challenges of the search.--We have yet to find suitable
    alternatives to replace all APLs worldwide. However, the Department has
    planned to invest nearly $1 billion to meet the President's direction
    on alternatives and this estimate does not include costs to develop and
    field alternatives to mixed systems. We will not be able to accurately
    determine this potential cost until the concept exploration effort is
    complete. As an additional challenge, the current concept exploration
    effort has been hindered by funding limitations placed on it by Section
    248, H. R. 3616-39, Public Law 105-261. Accordingly, the Department
    still does not hesitate to admit that the task of completely
    eliminating the use of landmines worldwide is a difficult one. U.S.
    landmines currently protect U.S. combatant and non-combatants alike and
    have been employed by our combatant commanders in a manner that have
    always protected human life and have never been used to create the
    human tragedy that exists around the globe. In order to replace these
    systems, we must find an alternative that is militarily advantageous,
    cost-effective, and that does not threaten the protective role offered
    by our current systems. The Department is moving as rapidly as possible
    to find and field alternatives to our APL and mixed anti-tank systems
    in accordance the President's policy to ensure that as the U.S. pursues
    its humanitarian goals, we will take whatever steps are necessary to
    protect the lives of U.S. forces and those civilians they may be sent
    to defend.
                                     ______

               Questions Submitted by Senator Frank R. Lautenberg
        Question. Last week, the Senate passed legislation repealing much
    of the 1986 Military Retirement Reform Act, commonly known as REDUX,
    with the goal of improving retention. The Congressional Budget Office
    has estimated that this policy will increase outlays by 11 percent over
    the long run, or $3.6 billion per year in today's terms. CBO stated in
    testimony last week that according to the hard data, ``being under
    REDUX had no discernible effect on the midcareer retention decisions of
    people who began active duty after 1987 (the law's effective date).''
    Does the Department have analyses beyond anecdotal evidence on this
    point? If so, would you please submit them?
        Answer. The Services routinely employ exit and quality of life
    surveys to guide their decisions regarding personnel policies. Since
    1992, results of these surveys indicate that compensation and
    retirement benefits are clearly at the forefront in the minds of those
    members who are weighing the decision whether or not they should stay
    in the military. Across the Services, survey data show both officers
    and enlisted members cite pay and retirement benefits among the top
    reasons for leaving (or thinking of leaving) the Service. In addition,
    since 1992, the percentage of military members citing compensation and
    retirement benefits as among the most important reasons for leaving the
    Service has been steadily moving up in ranking.
        The November-December 1998 Air Force Computer-Assisted Telephone
    Interview on Compensation surveyed 254 officers and 379 enlisted
    personnel. Of those, 58 percent of the enlisted members identified
    REDUX as the number one reason for separating, while 42 percent of the
    officers rated REDUX third in their reasons for separating. Both groups
    (officers--87 percent; enlisted--86 percent) felt that REDUX does not
    provide a good incentive to serve 20 or more years, and they did not
    believe this was a fair and equitable retirement system (officers--79
    percent; enlisted 81 percent).
        The 1998 Army Research Institute Survey on Officer Careers
    quantified responses from over 10,000 officers, stratified by
    commissioning year group and source of commission. This survey
    indicated that officers were more likely in 1998 than in 1992 to
    perceive that their pay and retirement benefits would be better in the
    civilian sector.
        The 1998 Navy Retention/Separation Survey polled a random sample of
    second term enlisted sailors facing a reenlistment decision--all under
    REDUX. Retirements as the most important reason for leaving the Navy
    has increased from 15th in fiscal year 1995, to 5th in fiscal year
    1998.
        In addition to this direct survey data, current trends for
    retention of mid-career enlisted Service members are troubling. Navy
    retention is declining across the board--1st term retention is about 8
    percent below goal; 2nd and 3rd term retention is approximately 5 to 7
    percent below goal.
        Air Force retention is below goal for all categories for the first
    time since 1990. The aviator bonus take rate is down 50 percent in the
    last three years. The Army's retention of captains (O-3s) has been
    declining since 1996. The Marine Corps is meeting retention goals but
    it is getting tougher. Additionally, both the Army and the Navy missed
    their quantity recruiting goals in fiscal year 1998, the Navy by 12
    percent.
                    20-year service life extension programs
        Question. How much would it cost for the Defense Department to do
    20-year Service Life Extension Programs on the F-15 and F-16? How does
    that compare to the cost of the F-22 and the Joint Strike Fighter?
        Answer. Concerning an F-15 service life extension program (SLEP),
    no significant structural modifications are anticipated to extend the
    airframe life of the F-15. $5,200,000,000 (TY$) is required to upgrade
    aircraft systems to fix known, critical obsolescence, maintainability
    and capability problems. However, a SLEP for the F-15 will not meet
    operational air superiority requirements. From ACC Operational
    Requirements Document: ``No current United States (U.S.) aircraft, or
    derivative, can succeed at this mission in the next century.''
        For the F-22, the cost to complete the program is $42,000,000,000
    ($3,200,000,000 in EMD and $38,800,000,000 in production--TY$). The
    total cost of the F-22 program, to include Demonstration and
    Validation, Engineering and Manufacturing Development (EMD), and
    Production, is $62,500,000,000 (TY$).
        Current U.S. fighters cannot be upgraded to guarantee Air
    Superiority. Low intensity conflicts are not low technology. Without an
    extensive supporting electronic warfare force, survivability of
    existing fighters is doubtful. When developed in the mid-70's, the F-15
    was designed to maintain air superiority at least through the 1980's.
    It has performed admirably, but it is unable to dominate the emerging
    threats. The F-15 will be 30 years old when replaced by the F-22. When
    compared to the F-22, the F-15 requires more than twice as much airlift
    to deploy to a crisis area; will produce fewer sorties; requires more
    maintenance effort; and costs one-third more to operate.
        The need for a new air superiority fighter is driven by the threat
    the U.S. will face early in the next century. That threat includes not
    only advanced fighter aircraft but also increasingly lethal Surface-to-
    Air Missiles (SAMs).
        Advanced fighters are being developed by several countries and are
    available for export. These advanced fighters, which will equal or
    surpass the performance of current U.S. air superiority fighters,
    include the French Rafale, the Eurofighter 2000, and the Russian Su-35.
    The F-22 is expected to remain in service to the year 2030 and beyond,
    pitting it against threats with more advanced capabilities than even
    these known systems.
        The sophistication of SAM systems continues to advance with longer
    range radar, anti-jamming protection, and higher capability missiles.
    Advanced SAM systems, due to their relatively low cost and their
    demonstrated effectiveness, are a quick way for countries to improve
    their air defense systems. The number of countries possessing the most
    advanced SAMs--SA-10/12 class--is expected to increase from 14 today to
    21 in 2005. As a result, these lethal SAMs will challenge our ability
    to gain air superiority.
        Concerning the F-16's SLEP, Structural upgrades can not be
    accomplished to keep the F-16 fleet airworthy an additional 20 years.
    The F-16 C/D, Block 25-52, airframes were designed to last 8,000 flight
    hours. The maximum life extension that could be accomplished is 2,000
    flight hours; total 10,000 flight hours (est 7 years). Contractor
    structural experts have estimated that required repairs and
    modifications would be too extensive to make conducting a SLEP on the
    F-16 C/D past 10,000 flight hours economically feasible. New aircraft
    would be less expensive than a SLEP past 10,000 hours. In addition,
    because of higher operations tempo and heavier aircraft loading, the
    USAF is performing structural modification and repair programs to
    ensure current F-16 C/Ds reach their 8,000 flight hour design life.
    Even if a SLEP was performed at a cost of $7,900,000,000 (TY$),
    additional aircraft purchases, at a cost of $73,300,000,000 (TY$),
    would be required since the 10,000 hour airframes will not extend out a
    full 20 years. If a SLEP was not done on the F-16 fleet, new aircraft
    would be required to replace the aging aircraft as they reach their
    8,000 hr airframe service life: cost would be $63,400,000,000 (TY$). No
    matter which course of action is taken it would also require an
    additional estimated $11,500,000,000 (TY$) to fix known, critical
    obsolescence, maintainability and capability problems, and upgrade
    aircraft systems to maintain rough parity with existing threat aircraft
    and anti-aircraft systems. However, this upgrade to parity with current
    threats ensures inferiority against future threats expected over the 20
    year life extension.
        The Joint Strike Fighter (JSF) total development cost is projected
    at approximately $20,000,000,000 ($FY 1994), the USAF share of which is
    approximately $9,000,000,000 ($FY 1994). The JSF procurement cost
    baseline will not be established until Milestone II in 2001. The
    Services have established Unit Recurring Flyaway (URF) cost goals, the
    major component of procurement cost, in their interim requirements
    document. The URF goal for the USAF variant is $28,000,000 ($FY 1994)
    for the projected USAF buy of 1,763 aircraft. The Program Office and
    prime contractors are focusing on defining the support concept and
    associated estimates for the support elements of procurement cost prior
    to establishing the procurement cost baseline at Milestone II.
        Question. Many have cited today's high operating tempo as a basis
    for increasing the Defense Department's topline. Perhaps this is more
    of an organizational and management issue than a budget issue. The Air
    Force and Marine Corps have adapted their force structures to reflect
    the ``expeditionary'' character of missions today and ease the stress
    placed on them by contingency operations. Is the Army planning to adopt
    this same management principle? Are there other force management
    measures the Department is considering?
        Answer. The Army is also considering ways to improve its force
    projection capability to meet the ``expeditionary'' character of
    today's missions. For example, the Army's ``Strike Force'' concept
    employs small, self-contained, brigade-size units as the basic building
    blocks of a deployable force. Likewise, the Army's ``Force XXI'' effort
    is exploring a number of improvements to the Army's war fighting units
    to make them a more lethal, survivable, and mobile force.
        The Department is also actively managing our forces to meet the
    demands of today's expeditionary environment. For example, through our
    Global Military Force Policy (GMFP), we carefully monitor those units
    that are in high demand for contingency operations. When necessary, we
    make substitutions or force structure adjustments to accommodate the
    increased demand for these units.
        We will continue to explore new and innovative ways to ensure we
    have the right force structure and operational concepts to meet the
    demands of today's expeditionary environment.
                            national missile defense
        Question. In 1996, DOD estimated that deploying a single-site, 100
    interceptor national missile defense would cost $9 billion to procure.
    Last November, the BMDO Joint Program Office estimated it would cost
    $15 billion, or 67 percent more. What is the cause of this dramatic
    increase?
        Answer. The 1996 acquisition cost estimate presented by then Deputy
    of Defense John White was based on a Grand Forks deployment and was
    generated prior to the availability of an updated System Requirements
    Document (SRD). It represented the best information available at that
    time. However, since then, the Lead System Integrator (LSI) has been
    selected, and the technology has matured, as has our understanding of
    what it will take to deploy a National Missile Defense system. As such,
    our estimates have matured as well.
        In November 1997, we estimated $15 billion (acquisition costs) for
    an Alaska based 100 interceptor system, which was just one of several
    alternative excursions being considered at that time.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan
                  ability to meet national security objectives
        Question. During recent testimony before the Budget Committee,
    Lawrence Korb asserted that defense spending could actually be
    decreased by $100 billion. I'd like to ask your opinion on this
    assertion, and how our ability to meet national security objectives
    would be affected by such a shift in strategy.
        Answer. Reducing defense spending by $100 billion would greatly
    detract from our ability to meet core national security objectives.
    Even at present levels of funding, the Department is experiencing
    challenges in combat readiness and in recruiting and retention. As a
    result, an additional $112 billion has been requested for fiscal year
    2000-2005. Actually reducing defense spending by $100 billion would not
    only make it difficult to sustain combat readiness, recruiting and
    retention rates, and critical modernization programs, it would also
    require us to scale back or terminate long-standing commitments and
    would severely hamper our ability to respond quickly to challenges to
    our interests, with a corresponding reduction in our influence in those
    regions where we chose to abandon a major leadership role.
                            u.s. allied cost sharing
        Question. Congress has mandated cost sharing goals between the
    United States and its allies. The 1998 Defense Department report on
    cost sharing expressed concerns about negative trends in direct cost
    sharing for U.S. troops stationed or deployed in Europe. What is your
    current assessment of that trend? Which of our allies are meeting the
    targets? Which are not? Likewise, what is the current status of burden
    sharing contributions by Japan and South Korea for mutual defense
    costs?
        Answer. The Department does not foresee negative trends in direct
    cost-sharing for our troops stationed in Europe, and does not believe
    it conveyed such trends in the 1998 Report on Allied Contributions to
    the Common Defense. That report stated that ``European host nation
    support remains essentially level and focused on indirect
    contributions.'' It went on to note: ``* * * although our European
    allies do not offset the same percentage of U.S. stationing costs as do
    Japan and the Republic of Korea, they contribute significantly more
    toward sharing the military roles, as well as the overall political and
    economic costs, of protecting shared interests.'' Our most recent
    report (March 1999) highlights that in 1997, the Europeans offset
    nearly one-third of U.S. stationing costs, a slight increase from 1996.
        The March 1999 report states that during 1997, Saudi Arabia and
    Japan are the only countries to meet the Congressional cost sharing
    target (an offset of 75 percent of U.S. stationing costs by September
    30, 2000). However, relative to GDP, several additional countries also
    made substantial cost sharing contributions, including Oman, the
    Republic of Korea, Kuwait, Luxembourg, Italy, and Bahrain.
        The March 1999 report provides additional details on Japan and the
    Republic of Korea. Regarding Japan, the report states: ``Its host
    nation support is the most generous of any U.S. ally. Department
    estimates of Japan's cost sharing in support of any U.S. ally.
    Department estimates of Japan's cost sharing in support of U.S. forces
    for 1997 ranged form $3.7 to $4.3 billion ($4.9 billion according to
    State Department sources), covering 75 percent of U.S. basing costs.''
    As for the Republic of Korea, the report says: ``In December 1998, U.S.
    Forces Korea (USFK), the U.S. Embassy, and the ROK Ministry of National
    Defense reached a new multi-year Special Measures Agreement (SMA)
    continuing from 1999-2001. The SMA calls for a ROK contribution of $333
    million for 1999 with increases in 2000 and 2001 based on growth in ROK
    GNP and inflation.''
                   military housing privatization initiative
        Question. DOD is in the process of privatizing its military
    housing. Initial indications are that the Department is getting
    substantially more housing for its military members under this
    approach. However, with the possibility of another round of Base
    Closures, I'm concerned about the risk to privatize contractors who
    would be required to enter into long term housing agreements with the
    DOD under this proposal. What contract mechanisms is the DOD using to
    address this risk to local contractors? Who would bear the risk and
    contractual liability under these agreements if a base is closed?
        Answer. In the event of a base closure, in communities that have a
    viable housing market, the developer may rent the project's housing
    unit to civilians, including military retirees, as the military
    population draws down. The likelihood of default is negligible.
    However, there is an additional potential protection for developers two
    have projects in communities that do not have a viable housing market.
        One of the Military Housing Privatization Initiative authorities
    contained in the 1996 National Defense Authorization Act allows (but
    does not require) DOD to provide a loan guarantee to cover the risk of
    base closure as well as deployment, and downsizing. If included in the
    agreement, in the event of a default, which is proved, to be caused by
    base closure, the government will be obligated to pay off the balance
    of the loan.
                                      b-52
        Question. The Air Force is releasing its bomber study this week and
    I'm looking forward to reviewing the report. Of particular interest is
    the proposal concerning B-52 bombers. As shown in operation Desert Fox
    (where B-52s delivered 90 of the approximately 200 cruise missiles
    used) the B-52 is reemerging in its role as the mainstay of the Air
    Force bomber force. For example, eight of these bombers can deliver the
    same number of missiles (160) and twice the fire power of an entire
    carrier battle group's cruise missile compliment. Unfortunately, the B-
    52 aircraft retention issue is an example of how a cost effective
    proven platform is being retired at time where no replacement program
    is in place. What is the wisdom of deactivating more bombers at time
    when we have no bomber procurement effort in progress.
        Answer. The U.S. Air Force White Paper on Long-Range Bombers
    identified a requirement for a bomber force structure of 190 bombers.
    From the total number of 190 bombers, 130 will be combat coded
    aircraft. Using current operating procedures, attrition models, and
    service lives, the Air Force determined that five of the 23 B-52s
    identified as excess-to-need would be retained to insure the bomber
    force structure does not fall below the requirement prior to fielding a
    replacement capability in 2037.
        Question. I understand that retaining more B-52's would impact the
    nuclear force structure, and that this is a valid consideration in the
    retention issue. What would be the impact on the strategic force
    structure if the entire fleet of 94 B-52's was retained? How would
    other strategic forces be reduced to meet START II limits?
        Answer. Retaining all 94 B-52Hs under START I rules would not
    impact the strategic force structure. All 94 B-52Hs could also be
    retained with minimal impact on the strategic force structure to meet
    START II limits of 3,000 to 3,500 warheads, but some B-52Hs would
    probably require reductions in warhead attribution from 20 to 8
    warheads to meet START II warhead levels. Additionally, for the U.S. to
    meet START II limits, Peacekeeper ICBMs must be deactivated and their
    silos eliminated, Minuteman III ICBMs must be reconfigured with only
    one warhead, deployed B-1 bombers would be declared IAW START II
    guidelines as conventional bombers (thus would not count against START
    II warhead ceilings), and some reductions in SLBM warhead attribution
    would have to occur.
        However, if the START II treaty is ratified by the Russians, and if
    the U.S. enters a START III agreement, START II limits would not be a
    consideration since the 1997 Helsinki Agreement further reduces nuclear
    warheads to meet START III limits of 2,000 to 2,500 warheads. This
    drawdown would run concurrent with the START II proposed timeline
    extension of December 2007 so START II warhead limits would be met on
    the way down to START III warhead limits (the START II timeline
    extension agreed to in Helsinki has not been ratified by Congress).
        Retaining all 94 B-52Hs under a START III scenario would be
    problematic. Reductions to our nuclear forces would have to be made to
    meet the 2,000-2,500 START III limit. Possible options to meet START
    III limits include; reducing warhead attribution on B-52Hs (e.g. 20 to
    8) and B-2s (e.g. 16 to 8), eliminating ICBM wing(s), removing some
    launch tubes on SSBNs, or reducing warheads on SLBMs. Reducing warhead
    attribution on B-52Hs must be carefully considered since the Advanced
    Cruise Missile (ACM) is currently only carried externally on the B-52H.
    B-52Hs with a START II/III attribution of 8 warheads would not carry
    ACMs externally.
        Question. The Air National Guard and Reserve forces are becoming
    more important in meeting the mission requirements of Active Duty
    forces. It is my understanding, that the Air Guard and the Reserve will
    be vital to the successful implementation of the Air Expeditionary
    Force concept. However, many of these units operate the oldest aircraft
    in the inventory, some relying on allies for spare parts. What is the
    department doing to ensure that Air National Guard and Reserve forces
    have the proper equipment and training needed when these men and women
    are put into harm's way. In particular, what are the prospects for
    outfitting Guard units with new aircraft instead of perpetuating the
    current process of handing down older planes?
        Answer. It is in the Nation's best interest to reduce OPTEMPO, and
    thus help improve retention, by assigning the new aircraft to Active
    Duty units and cascade PGM/smart weapons capable F-16 Block 30s to the
    Guard.
        The purchase of new Block 50 aircraft, along with Active Duty force
    structure consolidations, will enable us to retire our aging ANG F-16As
    and replace them with F-16C Block 30s. We are currently procuring
    targeting pods for our ANG units, giving them precision guided
    munitions capability. Furthermore, our modernization roadmap for the F-
    16C Block 30 includes smart munitions capability (Joint Direct Attack
    Munitions, Joint Stand-Off Weapon, Wind Corrected Munitions Dispenser,
    etc.) in the very near future.
        The F-16C Block 50 Suppress Enemy Air Defense (SEAD) mission
    presently has the highest OPTEMPO within the F-16 community. The ANG
    would need an additional five SEAD units (not including McEntire, SC)
    to meet current OPTEMPO requirements and not adversely impact unit
    retention. This would require a total buy of 95 aircraft within a 2-3
    year period
                      icbms and the future u.s. deterrent
        Question. It is my hope that we will soon be able to agree to
    further reductions in deployed nuclear weapons beyond the START II
    levels with the Russians. I think we can all concede at this moment
    however, that nuclear forces will remain in our arsenals. I'd be
    interested in your views on what the strategic force structure should
    look like beyond START II?
        Are ICBMs as [sic] more stabilizing than submarine launched
    missiles since they present a known quantity to other nuclear powers?
        Answer. Both ICBMs and SLBMs present known quantities to other
    nuclear powers. Because SSBNs are so large and take so many years to
    construct, the numbers possessed by the U.S. and Russia are well known
    to both sides. In addition, under the START I Treaty, both sides
    provide periodic declarations detailing the numbers and locations of
    these treaty-accountable missile systems. This information can be
    validated during on-site inspections permitted by START and through the
    use of national technical means.
        Question. Is the ICBM force more cost-effective than the submarine
    launched missile force?
        Answer. Each leg of the triad brings different advantages to our
    deterrent force. The ICBM force brings a high alert rate and an ability
    to respond rapidly once directed to execute. The SSBN force brings
    survivability even without any warning. The bombers bring the ability
    to be recalled once ordered to take off. The combination of all three
    legs of the triad also makes defending against our deterrent force
    extremely complicated for any would-be aggressor. Thus, even as we have
    reduced our strategic deterrent forces, we have done so in a manner
    that would maintain the characteristics and advantages of the triad.
    Moreover, because we have different types of systems in the force, a
    failure of one type of system (due to malfunction) would not leave us
    without a deterrent force.
        Question. Do you perceive a future missile force structure that is
    predominantly land or sea based? Have we carefully weighed all the
    advantages to retaining 500, rather than 300 ICBMs?
        Answer. Under the 3,000-3,500 accountable strategic weapons allowed
    by the START II Treaty, we would maintain a strategic deterrent force
    that included 14 Trident II SSBNs and an ICBM force of 500 Minuteman
    missiles. The Department has not yet decided upon the composition of a
    deterrent force under a 2,000-2,500 accountable warhead limit under a
    future START III agreement.
        Question. If the majority of our strategic forces were land based,
    is the current ICBM modernization program adequately funded to support
    that decision?
        Answer. Under START II the major portion of our strategic,
    accountable warheads will be in our SSBN force. No force structure
    decisions have been made should we achieve agreement on subsequent,
    deeper reductions.
        Question. Is adequate consideration being given in arms control
    discussions to address how dual-purpose bombers, like the B-52, could
    be maintained at higher levels?
        Answer. The B-52 serves primarily as a standoff platform for the
    delivery of conventional and nuclear weapons. The number of B-52s is
    derived from requirements for their use in two nearly simultaneous
    major theater wars and their role in nuclear deterrence. This number of
    B-52 bombers is sufficient to meet our current and projected strategic
    deterrent requirements. In addition, START II allows the U.S. to exempt
    B-1 bombers from the treaty's 3,000-3,500 warhead limits by reorienting
    them to a conventional role. START II also allows each side to change
    the number of nuclear weapons attributed to heavy bombers, thus
    allowing the U.S. to retain a larger number of aircraft than would be
    the case if all were accountable at the original attribution number.
                                     ______

                Question Submitted by Senator Richard J. Durbin
                         defense working capital funds
        Question. What is the Defense Department doing to work with
    facilities such as the Rock Island Arsenal to offset the effects that
    low utilization have on their overhead rate charges? Does DOD have a
    plan to increase both government and private utilization, which could
    control overhead costs?
        Answer. There are two specific things that DOD has done to help
    facilities offset low utilization. First, we budget direct funding for
    underutilized plant capacity (UPC). This UPC funding is provided to
    offset the cost of facilities and equipment which is needed for surge
    operations but are not being used during peacetime. In fiscal year 1999
    the Army Ordnance Activity Group, of which Rock Island Arsenal is a
    part, received $23.3 million in UPC funding.
        Secondly, the Army has reorganized the Ordnance Facilities and
    transferred munitions storage facilities (previously part of Army Depot
    Maintenance) into Ordnance in fiscal year 2000. This provided an
    additional $212.6 million in work load in fiscal year 2000 and allows
    the Ordnance Activity Group to lower their stabilized rate. There are
    some projects being considered for public-private partnering which
    could also help shore up diminishing work load. However, in the final
    analysis, the cost associated with maintaining the industrial
    capability to defend this country cannot be avoided, whether public or
    private interests accomplish that function. The Department will
    continue its efforts to obtain the required capability in the most
    economical fashion.

                              subcommittee recess

        Senator Stevens. If there is nothing further, the hearing
    is recessed.
        [Whereupon, at 11:33 a.m., Wednesday, March 3, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                           WEDNESDAY, MARCH 10, 1999

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

                             DEPARTMENT OF DEFENSE

                             Department of the Navy

                             Secretary of the Navy

    STATEMENT OF HON. RICHARD DANZIG, SECRETARY OF THE NAVY
    ACCOMPANIED BY:
            ADM. J.L. JOHNSON, CHIEF OF NAVAL OPERATIONS, DEPARTMENT OF THE
                NAVY
            GEN. C.C. KRULAK, COMMANDANT OF THE MARINE CORPS, U.S. MARINE
                CORPS

                                OPENING REMARKS

        Senator Stevens. My apologies for being late. I was at
    another committee hearing, and I am pleased to see that I had
    two stalwarts ready to go forward with the hearing. You might
    have been better off if I had stayed over there before we are
    through here this morning, gentlemen.
        But it is nice to see you, Secretary Danzig, Admiral
    Johnson and General Krulak. I look forward to these hearings
    with you.
        General Krulak, my staff tells me that this is going to be
    your last appearance before this committee as our Commandant of
    Marines.
        General Krulak. Yes, sir.
        Senator Stevens. I don't know how these years go by so
    fast, General. He should go reenlist, he is so young.
        But you had a distinguished career. We have all enjoyed
    working with you and traveling with you and getting to know you
    and the way that you believe in the Marines, your outfit. The
    whole committee wishes you well as you finish your tour. We
    will miss your informative and forward looking approach, and we
    believe that the Marines are really better off for the changes
    that you have made.
        So we know that--Steve Cortese reminds me of the Sea Dragon
    and the things that we are working on to better the manner in
    which the Marines can contribute to our defense. We all look
    forward to seeing you as the years go by and wish you very
    well.
        General Krulak. Thank you very much, sir.
        Senator Stevens. Gentlemen, it is nice to have you here. I
    am glad you do not all depart at the same time.
        This year's Navy and Marine budget suggests that your team
    has built a solid budget. It lives within the funds available.
    But there are going to be some challenges along the line, I
    think.
        I talked to Admiral Johnson about this yesterday, Mr.
    Secretary. People are really at the heart of our Armed Forces.
    We passed S. 4. I was with our leader last night when he was
    recognized by the USO for his action in making that the first
    action of the Senate in this new Congress. All of us welcome
    that and voted for it. But I have got to tell you, it is going
    to be an awful difficult job to fund that bill.
        We look forward to trying to work with you to make certain
    that we can carry that out in the areas of your responsibility.
    The operation and maintenance account is basically flat for
    2000 as compared to 1999. And we, I think, are going to have
    some serious questions as to whether that is sufficient to
    maintain the readiness of the forces under your commands.
        You have the F/A-18, the DD-21, the new aircraft carrier
    and the Virginia class submarine moving along in phases of
    development, and that means advanced funding, and it means
    commitment of future budgets to carry out that procurement.
        I have to tell you, you have all seen it in the paper, I
    hope, this morning. All of us concerned with appropriations are
    worried about the decisions we have to make under the ceiling
    that exists now. It is a most welcome challenge, but it is a
    very difficult one. But we look forward to working with you.
        Senator Inouye, do you have any comments?

                       STATEMENT OF HON. DANIEL K. INOUYE

        Senator Inouye. Just a few words, Mr. Chairman, thank you.
    And I join you in welcoming the Secretary on his first
    appearance before us.
        Secretary Danzig. Thank you.
        Senator Inouye. Welcome back, Admiral Johnson. I hate to
    say good-bye to you, General but we never actually say good-bye
    to a Krulak. The Krulaks have been with us as far as I can
    remember.
        If I may add to my chairman's statement, if it were not for
    you, General, the V-22 Osprey would be a picture on a wall. It
    is a reality now. And if it were not for you, the AAAV, I
    think, would also be a picture on the wall. But it is going to
    become a reality.
        And because of your innovative ideas, such as the war
    fighting lab, we can look upon the Marines as ready for
    anything. I wish to commend you and thank you, as a citizen of
    the United States, for all you have done for us. We appreciate
    it very much.
        General Krulak. Thank you very much, sir.
        Senator Inouye. I have much more, but I would like to carry
    on my discussions during the questioning period. But, like all
    of us, I am concerned about readiness. I am concerned about
    recruiting and I am very pleased we had a meeting, Admiral. It
    gave me a better idea on why the lowering of the standard, for
    example, will not hurt your efforts.
        So, if I may, Mr. Chairman, may I have my full statement
    made part of the record.
        Senator Stevens. It will be placed in the record and I'll
    put my full statement in the record, also.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Good morning, I want to join my chairman in welcoming our
    witnesses today. A welcome back to Admiral Johnson and General
    Krulak, and a welcome for his first appearance as the Secretary
    of the Navy to Mr. Richard Danzig.
        I am pleased that we will have the opportunity to hear from
    our sea services today. For those of us whose states border on,
    or, as in my case, are surrounded by ocean, the Navy and
    Marines play an instrumental role in our defense.
        For the past several months we have been hearing disturbing
    things about the status of our military services. We hear that
    retention is down. Readiness is teetering on a precipice, and
    recruiting is difficult because we have a small and generally
    less willing group of young people eager to enter the military.
        Our marines, I would note, seem to be less affected by
    these problems, but I am aware, General Krulak, that you have
    your concerns as well.
        Mr. Secretary, we are pleasantly surprised that the
    administration increased funding for the Department of the
    Navy.
        But, we recognize that even with the increase we are buying
    too few ships to sustain a 300 ship Navy over the long term,
    and the nagging readiness and personnel matters I noted portend
    continued problems for the future.
        Moreover, I note that we increasingly assume we will gain
    substantial future benefits from privatization and other cost
    reduction measures which have yet to demonstrate many real
    savings.
        These plans, which at best are highly optimistic, are the
    underpinnings of our future budgets.
        It is how we plan to have sufficient funds to restore
    readiness and re-energize our investment budget.
        Again, I for one am glad that the administration has
    increased your budget, but I question whether we have tackled
    the underlying problems which are the root of the discontent of
    the troops. It is here that I have my concerns for the future
    of our nation's security.
        With that, I am most pleased that you are here today, and I
    look forward to hearing how you address these concerns and
    other matters.
                                    ------

                   Prepared Statement of Senator Ted Stevens

        Secretary Danzig, Admiral Johnson and General Krulak, we
    are pleased to have all of you here today before the committee.
        Secretary Danzig, I would like to welcome you this morning
    for you first appearance before our committee as Secretary.
        I would also note that today will be General Krulak's last
    appearance before our committee as Commandant of the Marine
    Corps.
        General Krulak, you have had a very distinguished career
    and I know I speak for the entire committee when I say that we
    have enjoyed working with you and wish you the best as you
    retire from the Marine Corps on June 30th.
        General Krulak, your innovative and forward looking outlook
    as Commandant manifested by the Sea Dragon Lab and the Chemical
    Biological Incident Response Force are an important legacy for
    the Marine Corps and the Nation.
        Gentlemen, the committee's initial look at the Navy/Marine
    Corps fiscal year 2000 budget suggests that the Navy and Marine
    Corps team has built a solid budget which lives within the
    funds available. However, this does not mean there will not be
    challenges.
        We all recognize that people are the heart of our Armed
    Forces. The Navy and Marine Corps has seen negative trends in
    retention. While S. 4 will go a long way in reversing these
    trends, S. 4 makes more difficult an already difficult budget
    situation.
        The operation and maintenance account is basically flat
    compared to fiscal year 1999. We will all want to be certain
    that the Navy and Marine Corps can maintain readiness within
    the budget request.
        The Navy and Marine Corps also face a number of near and
    far term acquisition challenges. The F-A18, the DD-21, the
    future aircraft carrier, LPD-17, and the Virginia class
    submarine are all moving to more costly phases of development
    and procurement.
        In a very uncertain budget environment, these many
    competing demands will present the Navy, Marine Corps and the
    Congress with difficult decisions on allocating limited
    dollars.
        We look forward to working with you on the fiscal year 2000
    budget as well as planning for the future of our Navy and
    Marine Corps.
        We will make your full statements a part of the committee's
    record.
        Before you proceed, I would like to ask my colleague from
    Hawaii if he has any opening remarks.

                     STATEMENT OF HON. CHRISTOPHER S. BOND

        Senator Stevens. Senator Bond.
        Senator Bond. Thank you, Mr. Chairman. You see how
    democracy works. The palace coup was effective for about three
    minutes and, fortunately, it was bloodless and I am still here.
    I thank the chairman for allowing me to say just a few words.
        Mr. Secretary, Admiral Johnson and General Krulak, we
    welcome you today.
        I share the concerns that our leaders on this committee do;
    that your team is being asked to carry a major burden while at
    the same time, it is inadequately resourced. We hear in the
    news that the Pentagon is having difficulty trying to realign
    its forces to cover both the Arabian Gulf presence and the
    reemerging threats to peace and security in the Balkan region,
    and these are not close to being two major regional conflicts
    (MRC's).
        We hear of ships, carriers deploying with less than full
    manning. They are still doing the job, but at what cost?
    Current OPTEMPO is as high as we have ever seen it, and the
    ability to sustain such efforts puts a really serious strain on
    the crew and their families, especially when only 80, 85
    percent or even 90 percent of the required work force is
    available.
        It was a great pleasure for me to be on a carrier, and at
    the time I believe it was fully manned. But even then the young
    men and women there were doing the work of at least one and a
    half, if not two individuals, and there certainly was no slack
    that I ever saw.
        And I know that many of our colleagues join in voicing
    concern over the services' abilities to meet effectively their
    mission requirements without making deep and risky cuts in the
    critical supply stocks and accelerating the depreciation of
    major equipment, specifically aircraft, not to mention the
    additional strain which has been put on personnel because of
    increased deployments and decreased manning.
        People join the service not to get rich. They do it to make
    a significant contribution, to lead and be part of a
    superlative group of young men and women, to explore their
    professional limits and to provide adequately for their
    families.
        But, of course, financial considerations must be made. And
    I am concerned about your ability to recruit and retain the
    talents you need, and that clearly is the strength of the
    services.
        High quality training opportunities while deployed, a
    general increase in the number of flight hours per air crew or
    a reduction in the number of administrative reports and
    inspections, restoration of dependent and retiree health care
    availability/quality are examples of incentives, I believe, can
    go a long way.
        I, also, believe there is a seemingly forgotten tradition
    of intangibles which made you, Admiral Johnson and General
    Krulak, when you were an ensign or a second lieutenant look up
    to your commanders.
        Mr. Secretary, we are very pleased with what you are doing,
    and I hope you are listening to the junior officers (JO's) as
    we recognize the awesome burden facing you and our Armed Forces
    both in terms of increase in mission requirements and the
    concurrent decrease in the funding available.
        This committee, under the leadership of the current
    chairman and the ranking member, has long warned the Department
    of Defense about low balling funding requirements which only
    exacerbates the fiscal problems facing all the services'
    abilities to conduct the many operations required.

                               prepared statement

        I have a much longer statement, Mr. Chairman. We will
    express and discuss some of those items like concern--you might
    be interested to know--in the F/A-18E/F. We will address that
    later, but I would like to have the full statement made a part
    of the record.
        Senator Stevens. Yes, sir, it will be placed in the record.
        [The statement follows:]

               Prepared Statement of Senator Christopher S. Bond

        Mr. Secretary, Admiral Johnson, General Krulak, I join with
    my colleagues in welcoming you before the committee today to
    address the President's budget request and the very serious
    issues facing the Navy Marine Corps team.
        Today, I am concerned that this team is being asked to
    carry a major burden while at the same time it is being
    inadequately resourced. We hear in the news that the Pentagon
    is having difficulty trying to realign its forces to cover both
    the Arabian Gulf presence and the re-emerging threats to peace
    and security in the Balkan region, and these are not close to
    being 2 MRC's. We hear of ships, carriers, deploying with less
    than full manning. They are still doing the job, but at what
    cost? Current Ops tempo is as high as I have ever seen it; and
    the ability to sustain such an effort puts a serious strain on
    the crew and their families, especially when only 80, 85, or 90
    percent of the required work force is available. I have been on
    a carrier and let me say even at full manning, these young men
    and women do the work of one and a half individuals--there is
    no slack on the flight decks. I know that many of my colleagues
    join me in voicing concern over the service's ability to
    effectively meet their mission requirements without making deep
    and risky cuts into critical supply stocks and accelerating the
    depreciation of major equipment specifically aircraft, not to
    mention that additional strain which has been put on personnel
    because of increased deployment schedules and decreased
    manning.
        In particular, we have all seen the data concerning the
    abysmal retention rates of all of the services' pilots. We,
    here, are all sympathetic to your efforts to find an answer to
    this serious readiness problem. I submit to you however, that
    throwing money at these individuals is not the only answer. As
    I have stated before, most who join the service do not do it
    for avaricious reasons--they do it to make a significant
    contribution to the country, to lead and be a part of a
    superlative group of young men and women, to explore their
    professional limits, and to provide adequately for their
    families. Of course financial considerations must be made, but
    it is not the be-all, end-all.
        The exodus of individuals now spans the rank structure and
    I am concerned about your ability to recruit new talent. Over
    the years, individual tactical flight time has been
    dramatically curtailed. I venture to say that a Lieutenant
    today has a lot more blank space in his log book than those of
    days past. Now I know that the Navy is trying to get ``more''
    out of every flight, but I also submit that much of the flight
    time dedicated to these other than war contingencies do nothing
    to hone the skills of our aviators and in fact, require the
    pilots to spend hours flying at their aircrafts' most
    conservative power settings drilling holes in the sky while
    ``monitoring'' one peacekeeping mission after another--Iraq,
    notwithstanding. High quality training opportunities while
    deployed, a general increase in the number of flight hours for
    aircrew, a reduction in the number of administrative reports
    and inspections, restoration of dependent and retiree health
    care availability and quality are examples of incentives I
    believe can go along way. I also believe that there is a
    seemingly forgotten tradition of intangibles which made you
    Admiral Johnson and General Krulak when you were an Ensign or
    2nd Lieutenant, look up to your unit commanders--and then once
    you were one of those commanders, gave you the authority and
    the accountability to stand up for your J.O.'s (junior
    officers) and actually lead the Sailors and Marines under your
    command rather than merely manage personnel resources.
        Mr. Secretary, don't wait for your future to desert you and
    then ask why I hope you are listening to the J.O.'s.
        That said, we recognize the awesome burden facing you and
    our armed forces both in terms of its increase in mission
    requirements and concurrent decrease in the funding available
    to meet those missions.
        For many years, this committee has warned the Department of
    Defense about the policy of low balling funding requirements
    which only exacerbates the fiscal problems facing all of the
    services' ability to conduct the myriad of operations required
    of you. As I understand it from Mr. Hamre's comments last week,
    that in this year's request, you were unable to account for the
    vast amount of weapons which you have expended so far in
    covering our No-Fly contingency operation which is what--8
    years old?
        Over the past seven years, this Congress has increased the
    Defense budget by billions of dollars; some critics have
    attacked us for those increases but the Department and the
    Administration have routinely come back to us pleading for
    more, through ``Emergency Supplementals'' primarily because of
    the burgeoning Contingency Operations costs. Some of these
    operations have extended way beyond any ``Contingency'' status
    and we have contested DOD financial planning for them. I note
    some improvement in this year's budget submission but I expect
    we will see another supplemental to cover all of the
    contingencies in which the President has us embroiled.
        Mr. Secretary, last year, we commissioned the newest of the
    nation's capital ships, the U.S.S. Harry S Truman, CVN-75. I
    proudly provided a congratulatory letter to the crew for their
    commissioning book. We have also made a commitment to yet
    another carrier, and we are also in the midst of CVX
    development. However, I am concerned that we need to accelerate
    the operational evaluations of the F-18E/F, not to skip any
    testing but to work as hard as we can to wring out any
    anomalies and begin a robust and multi-year procurement to get
    any additional savings as soon as possible. I understand that
    as we speak, the Superhornet is, as you say, ``bagging traps
    and cats'' a few hundred miles Southeast of here. I am
    committed to providing the men and women who fly from those
    carriers with the finest and most advanced aircraft to give
    them the edge so critical in today's high-tech, high speed,
    highly dangerous air-combat arena. I will be asking you to make
    that same commitment in direct questioning specifically in
    relation to a multi-year funding plan for Superhornet
    procurement.
        Thank you Mr. Chairman.

        Senator Stevens. Gentlemen, we would like to have you
    proceed.
        Mr. Secretary, we call on you first and then, Admiral
    Johnson, I think in deference to the General's leaving, we will
    call on him first this time.

                          STATEMENT OF RICHARD DANZIG

        Secretary Danzig. Thank you, Mr. Chairman. If I can say at
    the outset, we always take your suggestions very seriously and
    as a result I will immediately after this hearing talk with
    General Krulak about reenlisting. It is an excellent idea.
    [Laughter.]
        I would add, seriously, my own personal note. You and
    Senator Inouye and Senator Bond have emphasized General
    Krulak's contributions to the Marine Corps, and I think by
    extension to the Nation as a whole. I would just note that for
    me, personally, General Krulak was really the first Marine
    general I came to know when I arrived as Under Secretary in
    1993. And these almost six years have been, for me, immensely
    rewarding.
        When you speak, Senator Bond, of the great burdens that a
    Secretary has to carry, I can tell you that with people like
    Chuck Krulak and Jay Johnson, those burdens become much more
    achievable and bearable than they would otherwise be. And I
    just want to personally register my regret at General Krulak's
    impending retirement and my delight that you have been here all
    these years.
        Mr. Chairman, I have a formal statement for the record
    which, with your permission, I will simply submit and just make
    a comment for a moment.
        You see in the newspaper this morning evidence of the
    Marine Corps' very good work accompanied by the Navy and the
    other services in Central America--in this case building a
    bridge in Honduras. Really anywhere you look around the globe,
    you find these kinds of contributions, contributions relevant
    to war fighting, contributions relevant to shaping our
    environment, to deterring aggressors, to doing humanitarian
    kinds of things.
        The Navy and the Marine Corps are always there for America.
    I see them, of course, in very close detail. I see them, for
    example, a Navy Battle Group and a Marine Corps Amphibious
    Ready Group in the Mediterranean available for any
    contingencies in Bosnia, or for the possibility we will be
    needed in Kosovo.
        I see that same battle group having performed the first
    night of Desert Fox and along with other naval forces and
    Marine Corps aviation contributing as well, providing all of
    the first night's strike capacity in Desert Fox and continuing
    with the majority of the fire power that was used to protect
    our interests in the Persian Gulf.
        I see Navy and Marine Corps ships and sailors and marines
    throughout Southeast Asia, maintaining stability off the coast
    of Korea, achieving a measure of deterrence there. I see us as
    a capable force everywhere.

                               prepared statement

        With that said, I see this committee as consistently
    supportive of this kind of effort. If the Navy and Marine Corps
    are always there for America--and they are--this committee has
    always been there for the Navy and the Marine Corps, and I am
    very grateful for that support, and I simply want to signal my
    appreciation for it and for the opportunity that this hearing
    presents. And I look forward to a more detailed discussion in
    the minutes ahead. Thank you.
        [The statement follows:]

                      Prepared Statement of Richard Danzig

        A major focus of these hearings will, of course, be the
    budget we have submitted. As it is my first appearance before
    the committee since being confirmed, I thought it might be most
    useful to say something about my personal priorities.
        I have an urgent near term priority and two particularly
    important longer term priorities. The urgent priority is to
    improve the morale and well-being of our sailors and marines.
    The longer-term priorities are: First, to reduce the cost of
    doing business for the Navy and Marine Corps, so as to free up
    more money for procurement, modernization and research and
    development; Second, to bring new technologies and new
    doctrines to bear so that the Navy and Marine Corps are better
    able to serve this nation in the first decades of the 21st
    century.
        As to the first goal, there has been much discussion
    recently about pay and benefits, particularly retirement
    benefits. I think the budget before you makes attractive,
    helpful and sensible proposals in this regard. There will be
    debates about yardsticks, comparability, inflation indicators,
    etc. My view of the matter is simpler. We can never pay Sailors
    and Marines enough for what they do. The sacrifices inherent in
    the risks of combat and the discomforts of deployment away from
    families are too great to be fully compensated in dollars. But
    we can pay too little. Worries about families, retirement and
    day-to-day bills are compelling Sailors and Marines to leave
    the Navy and Marine Corps for civilian occupations--even those
    that are plainly of less value to them and the Nation.
        For me it is not a subtle question when we are paying too
    little. Our Sailors and Marines (and for that matter, our
    Soldiers and Airmen) tell us: they tell us in words and they
    tell us by leaving. Of course, people would always like to be
    paid more. But my judgment, with some experience in these
    matters, is that we are losing too many good people, at too
    fast a rate, to be tolerable, and I take seriously the
    statements of many that with better pay and better retirement
    they would be staying with us. The cost of that better pay and
    better retirement is small as compared with the cost of losing
    these trained people. For these reasons, it has been, and will
    remain, a priority of mine--and, I know, of this committee--to
    see substantial improvement in this regard. I believe that the
    President's budget takes a significant step toward meeting the
    needs of our Sailors and Marines.
        But money is not the be-all and end-all. To the contrary, I
    think we misunderstand our problems and mismanage them if we
    simply throw money at our problems. Sailors and Marines are
    suffering now not simply from a deficiency in pay but from
    overwork as well. This overwork manifests itself in a pattern
    of sixty-hour weeks, of excessive demands between, as well as
    during deployments, and of frustration because there is too
    little time and too little equipment to do a good job even
    while working strenuously. I have been in office less than
    ninety days, but the budget before you includes a program for
    ``Smart Work'' that reflects some of my priorities in this
    regard. We need to give Sailors and Marines the tools and
    equipment that will enhance the quality of their work place
    while reducing the number of hours they have to work.
    Illustrative investments include: money to procure a new type
    of water tight door that will replace the high maintenance,
    antiquated type that now burdens us; acquisition funds for
    basic equipment that will make scraping and painting less
    cumbersome; and resources to install a central freshwater
    cooling system for reduction gears to reduce ship's depot
    maintenance costs.
        A further priority of mine, reflected in some measure in
    the budget, but also in non-budgetary management initiatives,
    has been to develop a program to reduce the manpower mismatches
    and shortfalls that have resulted in 22,000 unfilled billets in
    the Navy. The CNO and I have now developed a plan to reduce
    this number by 4,000 this year, 7,000 next year, and 4,000 the
    year after. Elements of this program include: planning
    extensive use of civilians rather than sailors on shipyard work
    for carriers in overhaul; reissuing existing policy to
    encourage high year tenure waivers for good performing E-4's if
    they are willing to accept orders to sea/overseas duty;
    temporarily assigning students awaiting instruction to their
    ultimate duty station (but for no more than 20 weeks); and
    sending GENDET's to the Fleet for 15-21 months with guaranteed
    follow-on ``A'' School. In parallel with these measures, I have
    also taken a number of steps to raise the prospects of meeting
    the Navy's recruiting goals, correcting for a shortfall last
    year.
        More broadly, I have spoken out with respect to what I
    perceive as the remnants of a pervasive ``psychology of
    conscription'' throughout the Armed Services. We all know that
    we no longer use the draft to coerce military service. We know,
    and are committed to the notion, that military work demands
    decent pay and not conscripted wages. But our personnel and
    budgetary systems still too often treat people as though they
    were essentially a free good. Too often, weeks and months are
    wasted while service members wait for schools and assignments.
    Too often, men and women are misassigned to jobs that don't use
    the skills we've provided them and don't treat them as
    professionals. This affects morale, and therefore concerns me
    with respect to my first priority. But, were this not enough,
    it also is wasteful. To alter this, I will be trying to make
    substantial management changes. I will be asking this
    Committee's help in this work.
        Moving to the longer term, my hope and intent is to bring
    these two services, with this committee's support, to a
    position where we can operate and maintain ourselves at a lower
    on-going cost of doing business. The smart ship innovations
    delineated in the program before you are representative of this
    emphasis and were particularly accelerated by me in the brief
    period I had to affect this budget after coming to office. The
    program before you accelerates smart ship procurements and
    installations on AEGIS Destroyers and Cruisers; reduces ship
    operating costs through installation of automated command and
    control equipment in LSD 41/49 classes; and procures and
    installs smart ship equipment on aircraft carriers across the
    FYDP. I continue to search for promising labor saving
    technologies available today for backfit or projected in the
    future for forward fit. This will free significant manpower and
    permit a greater percentage of ship crews to focus on
    warfighting.
        Finally, I think there is important work to be done in
    adapting the Navy and Marine Corps to the security challenges
    of the next century. For the last several years, leaders of the
    Navy and Marine Corps have, in my opinion, grasped the correct
    central idea about our mission in the time ahead. While doing
    other important things--including control of the seas,
    maintenance of our primary overseas transportation and supply
    capabilities, and assurance of our primary nuclear strategic
    deterrent--the biggest challenge for the Navy and Marine Corps
    will be to bring power to bear ``from the Sea'' to the
    littoral. Littorals are coastal areas. They provide homes to
    over three-quarters of the world's population, sites for over
    80 percent of the world's capital cities, and nearly all of the
    marketplaces for international trade. Because of this,
    littorals are also the place where most of the world's
    important conflicts are likely to occur.
        To completely embrace and fully execute this mission, the
    Navy and Marine Corps need a different kind of equipment and
    personnel priorities than they had in the past. In aviation,
    for example, the F/A-18E/F, Joint Strike Fighter and the V-22
    all point in the right direction. In days gone by we might have
    designed airplanes like these with a greater priority on their
    aerial maneuver (``dog-fight'') capabilities. The first two of
    these multi-capability aircraft have fighter characteristics,
    but they correctly assign primacy in their improvement over
    their predecessors to growth in their strike abilities. The F/
    A-18E/F is designed to execute the missions of the first
    quarter of the 21st century with greatly improved range and
    payload, room for avionics growth, and increased capability to
    conduct night strike warfare and close air support for ground
    forces. Its flexibility, reliability and survivability make it
    the right aircraft to fulfill the majority of missions
    associated with regional and littoral conflicts. The V-22 is
    capable of carrying 24 combat-equipped Marines or a 10,000-
    pound external load; it can fly up to a maximum of 397 miles
    per hour; and it has a strategic self-deployment capability of
    2,100 nautical miles with a single aerial refueling. This VSTOL
    aircraft presents a revolutionary change in aircraft capability
    to meet expeditionary mobility needs for the 21st century.
        In designing the ships of the future, I place a similar
    priority on our abilities to deliver manpower and firepower to
    the littoral. The LPD-17, for example, has a capacity of 25,000
    square feet of vehicle stowage and 36,000 cubic feet of cargo,
    can carry 720 troops and two LCAC's, and can land four CH-46
    helicopters or accommodate a mix of AH-1/UH-1, CH-46 and H-53E
    helicopters and MV-22 aircraft. Major improvements in command-
    and-control and ship self-defense systems will increase its
    ability to operate independently of the amphibious ready groups
    when required. Because 12 LPD's will replace 39 other ships, it
    also contributes significantly to my goal of reducing our cost
    of doing business.
        The DD-21 is being designed not only to minimize costs,
    consistent with the second priority I have articulated, but
    also to greatly expand strike capability. It is being designed
    from the keel up to provide support for forces ashore. Leap
    ahead capabilities include advanced major caliber guns,
    precision weapons, signature reduction, seamless joint
    interoperability and enhanced survivability, reduced manning,
    and, very possibly, even an all-electric drive propulsion
    system. Its emphasis on sensor to shooter connectivity will
    provide a naval or Joint Task Force commander with the mission
    flexibility to counter any maritime threat and to destroy a
    variety of land targets.
        In its VIRGINIA class SSN's, and operations in support of
    the fleet and national tasking, our attack submarine force is
    making the transition from a blue water activity designed to
    combat Soviet submarines, to a powerful influence on events in
    the littoral. Submarines routinely provide about 20 percent of
    a typical carrier battle group Tomahawk land attack firepower.
    A submarine is often the platform of choice for the covert
    insertion and retrieval of special operating forces (SOF).
    Today's submarines and VIRGINIA class SSN's have significantly
    improved anti-submarine warfare, mine reconnaissance and
    offensive mining capabilities. Finally, submarines provide
    crucial intelligence gathering capability in the littorals. In
    fact, even as our SSN force has decreased by nearly 50 percent
    since 1989, the amount of intelligence, surveillance and
    reconnaissance operations undertaken by submarines have doubled
    due to the national need for unique intelligence in troubled
    areas around the globe.
        I should conclude by saying that while pursuing these
    transforming priorities, I am acutely aware, as I know this
    committee is, of the great day-to-day responsibilities your
    Navy and Marine Corps assume for this country. The Navy and
    Marine Corps are, and must be, always there for America.
        In 1998 this meant naval operations across the globe,
    demonstrating the multi-mission capabilities of a maritime
    force. To disrupt the flow of illegal drugs into the United
    States, the Navy deployed substantial assets to the Caribbean
    and eastern Pacific, culminating in several large drug
    seizures. From the Indian Ocean and Mediterranean Sea, the Navy
    came to the aid of victims of natural disasters in both Kenya
    and Italy, assisting in those countries after severe rain and
    mudslides ravaged several areas. Again, the volatile Southwest
    Asia region continued to require the Navy's vigilance,
    flexibility and firepower, as our naval forces anchored ongoing
    operations in and around Iraq, keeping the pressure on a state
    that remains defiant in the face of international pressure.
        Globally deployed, the Marine Corps responded to 16
    contingencies during 1998. Whether transporting highly enriched
    uranium out of Georgia, providing humanitarian assistance to a
    flood-ravaged Kenya, or demonstrating resolve against Iraqi
    aggression, our Marines were on the scene in support of our
    National Military Strategy.
        I cannot say--no one can say--where the Navy and Marine
    Corps will be especially called upon to meet the demands of
    this nation in 1999. I can say, however, that with this
    committee's support we will be ready. The budget before you
    will make us ready and able in the year 2000. For longer than
    the life of this Republic--for almost two and a quarter
    centuries--these great seafaring services have always been
    there for America. Like you--with you--I am dedicated to
    assuring that they will be there in the century soon to come.
        Thank you.
                                    ------

                 Department of the Navy 1999 Posture Statement
        A century ago, the United States Navy defeated the Spanish fleet in
    the Caribbean Sea and the Pacific Ocean. Nine years later, the Great
    White Fleet sailed around the world and dramatically demonstrated
    America's will and means to assert its influence worldwide. ``Speak
    softly and carry a big stick'' became the prevailing American
    philosophy as the Navy-Marine Corps team emerged as the nation's most
    visible symbol of international power.
        Throughout the 20th Century, our naval services adapted to new geo-
    strategic circumstances and major technological and operational
    changes. Our 100-year record of success played a major role in
    America's emergence as the only superpower at century's end. And just
    as our Navy and Marine Corps embraced the changes in warfare brought
    about by the turbulent era of the early 1900s, today we are again
    undergoing a Department-wide transformation that addresses tomorrow's
    significant challenges.
        The overarching objectives for the Navy and Marine Corps--to shape
    the international security environment, to respond to the full range of
    crises, and to prepare now for the challenges of a new century--have
    not changed markedly through the years. In this past century, we were
    concerned with building a force that could protect this nation's
    citizens, rights, and interests, a force that could enforce America's
    will across the oceans. Today, the objectives remain the same, but the
    security environment is much more complex, characterized by rapid
    globalization, economic inequality, and political uncertainty.
        At the same time, lightning-quick communications, space-based
    systems, precision weapons, and global reach are making warfare
    capabilities more lethal than ever before. Sustaining our ability to
    quickly implement new technologies and adapt to new requirements and
    missions will require an increasingly sophisticated array of forces and
    talented people. This is essential to our preeminence as a forward
    deployed, operationally proficient, and technologically advanced
    force--capable of responding anytime, anywhere from the sea.
        This Posture Statement portrays the Navy-Marine Corps Team of the
    21st Century. It describes the Department of the Navy's mission, our
    direction for the future, and the priorities that must guide our
    decision-making. We invite you to read on. You will see--as events in
    1998 so vividly demonstrated--that the Navy and Marine Corps are
    leaning forward, adapting to change, and are always there for America.
            the navy-marine corps team: america's 21st century force
        On the eve of the 21st Century, the international environment is
    more complex than at any other time in America's history. The number
    and diverse nature of nations, organizations, and other entities vying
    for international influence continue to grow. At the same time, the
    global economy is increasingly interdependent. Although this offers the
    promise of greater prosperity for the United States, it also further
    ties the security and well being of Americans to events beyond our
    borders. Incidents and crises once considered peripheral to U.S.
    security--the spread of ethnic and religious conflict, the breakdown of
    law and order abroad, or the disruption of trade in distant regions--
    now threaten our citizens and our interests. On the other hand, a
    fundamental restructuring of global economies, governments, and beliefs
    present new opportunities for a globally engaged United States, in
    concert with other like-minded nations, to advance long-term interests
    and promote stability in critical areas.
        Throughout the 20th Century, the Navy and Marine Corps have played
    key roles in protecting U.S. interests worldwide--supporting America's
    strategies of world leadership and engagement as an alternative to
    inward-looking isolationism. Today, the United States is the world's
    sole superpower. Although the Department of the Navy's 1999 Posture
    Statement appears at the end of the 20th Century, a period that
    witnessed the emergence of the United States as a world power so
    clearly that some have called it ``The American Century,'' it marks the
    beginning of a new era in which naval power will become an even more
    critical element of U.S. national security. This Posture Statement
    provides a template for how the Navy and Marine Corps are preparing for
    the 21st Century.
    A Global Strategy Demands a Global Naval Presence
        Since the earliest days of the Republic, the United States has been
    a seafaring nation relying on the oceans for food, commerce, and
    defense, as well as exerting influence wherever and whenever U.S.
    citizens, interests, and friends have been at risk. Today, America
    stands without peer in military and economic strength, freedom of
    expression, cultural appeal, and moral authority--all key indices by
    which global power and influence are measured. This standing has been
    earned by generations of Americans whose work ethic fueled unparalleled
    growth, who upheld the precepts of democracy, and who fought wars to
    win and preserve freedom at home and abroad.
        The geopolitical and economic world has changed greatly during the
    decade since the fall of the Berlin Wall in November 1989. The
    disintegration of the Soviet Union led to international relations free
    from competitive superpower tensions, but lacking the relatively stable
    Cold War frame of reference. Our victory in the Cold War has not,
    however, brought about a time of tranquillity. Today's observers find
    neither an era of peace and international harmony, nor an era of
    clearly defined confrontation. Rather, in the closing months of the
    20th Century, our world presents a complex and lethal mixture of
    trends, dynamics, and challenges. As a result, we find today's smaller
    naval force--significantly reduced from the Cold War force of the mid-
    1980s--facing broad and frequent dangers.
        Events during 1998 make it clear that the world is still a violent
    place. Last year, terrorist bombs destroyed two U.S. embassies.
    Factional and small-scale conflicts raged in at least 25 countries.
    Economic crises plagued regional and global economies, while growing
    economic and social inequities fueled long-standing as well as nascent
    animosities. Threats to U.S. lives, property, and interests are
    increasing worldwide, and emerging threats to the U.S. homeland are
    likely to become an uncomfortable reality. The next century's
    international security environment will assuredly place an even higher
    premium on the mobility, global access, self-sufficiency,
    sustainability, and competence of the Navy and Marine Corps. Naval
    forces remain the most agile and flexible tools of our national
    security policy--able to move unfettered on the high seas, unencumbered
    by regional or local political constraints. Our ability to maintain
    this mobility depends upon our ability to move unimpeded across the
    world's oceans. In this regard, United States accession to the 1982
    Convention on the Law of the Sea is essential to preserving
    navigational freedoms that underpin our forward deployed strategy. The
    United States must join the more than 130 nations, including the United
    Kingdom, Russia, France, China, and Japan that have already become
    Parties to the Convention.
        U.S. leadership in global affairs, a function of American economic
    and military power, has long been a key ingredient in promoting peace
    and stability, facilitating free enterprise, and fostering democracy
    worldwide. The continued vitality of this leadership during the next
    century will depend in large part upon our willingness to remain
    visibly engaged in regions of importance to U.S. interests. On any
    given day, over one quarter of our naval forces with more than 50,000
    Sailors and Marines are embarked abroad. These forces carry out
    numerous national taskings, conduct multilateral exercises, and monitor
    and influence developments around the world. During times of crisis,
    Navy and Marine Corps units are often already on the scene, or are the
    first U.S. assets to arrive in force.
        This ubiquitous presence, which makes Navy and Marine Corps forces
    uniquely invaluable, has an additional potential benefit--positively
    influencing and shaping the global economy. As the U.S. increases its
    reliance on global trade, the Nation's economic vitality is becoming
    more and more dependent on the stability and growth of the global
    economy. Thus, as the 21st Century moves into an era of the global
    economy, the Nation's fundamental interests increasingly are linked to
    two objectives: the promotion of peace and stability and the growth of
    democracies and market economies. Forward presence naval forces,
    especially when enhanced by multi-agency, joint or allied operations,
    have a fundamental capacity to accomplish both of these 21st Century
    objectives.
    Strategic Concepts of U.S. Naval Forces
        Title 10, U.S. Code requires the Department of the Navy to be
    prepared to conduct prompt and sustained combat operations in support
    of U.S. national interests. Although this core role remains paramount,
    the complicated security landscape of today--marked by challenge and
    uncertainty--demands naval forces do much more than make ready for
    battle. Naval forces remain a critical component of the National
    Military Strategy's imperative to ``Shape, Respond, and Prepare'' for
    the future. This blueprint for security dictates that America's armed
    forces remain globally engaged to address emerging crises and conflicts
    far from our shores.
        Naval forces implement this strategy through four enduring
    concepts: forward presence; deterrence; sea and area control; and power
    projection. These are the critical strategic concepts that naval forces
    provide in direct support of the nation's security and military
    strategies.
        Forward Presence.--Maintaining forward presence capitalizes on the
    expeditionary nature of naval forces; it is the Department of the
    Navy's primary peacetime task. Routine forward presence allows the
    timely arrival of naval forces at virtually any crisis throughout the
    world. We maintain naval forces forward deployed to essential regions
    around the world, covertly if needed and overtly if desired. And when
    necessary, we deploy and sustain additional sea, land, and air forces
    to meet emerging needs.
        Forward presence constitutes a subtle, yet visible, demonstration
    of security and commitment. In times of crisis, these forces embody the
    prompt and sustained response our nation, our friends, and our allies
    expect. The sustained responsiveness of forward deployed naval forces
    is irreplaceable. There is no substitute for being on the scene with
    the full range of capabilities which carrier battle groups and
    amphibious ready groups possess. This visible guarantee that the United
    States will respond to provocation and support its friends,
    significantly influences any would-be aggressor's calculations of risk
    and reward.
        Deterrence.--Throughout the 45 years of Cold War punctuated by
    regional crisis and conflict, the strategic concept of nuclear
    deterrence defined the primary U.S.-Soviet relationship. Yet,
    deterrence of crises and conventional conflicts is also attainable by
    creating the threat of unacceptable consequences to would-be
    aggressors. Forward deployed, combat-credible naval forces serve notice
    to potential aggressors that there will be a high price to pay for any
    hostile action.
        Of continuing concern to U.S. national security are the remaining
    large numbers of nuclear warheads and the worldwide proliferation of
    other Weapons of Mass Destruction (WMD). The U.S. must maintain
    credible deterrence against such devastating weapons for the
    foreseeable future. Although conventional strike weapons can assume
    increasingly strategic roles, today the Navy's nuclear-powered
    ballistic missile submarines remain the most stealthy and survivable
    element of the U.S. nuclear triad to deter the use of WMD.
        Sea and Area Control.--Sea and area control requires the ability to
    defeat coastal defenses and dominate a foe in the littoral
    battlespace--at sea, on the ground, and in the airspace--extending from
    hundreds of miles offshore to hundreds of miles inland. Unless command
    of the seas and the airspace is attained, deployed and follow-on forces
    will be at risk. Naval forces must control the sea lanes leading to a
    region because most of the troops, equipment, and supplies travel to
    the region by sea. Once in theater, naval forces provide a powerful
    forcible-entry capability and are capable of conducting this mission
    anywhere in the world.
        Power Projection.--The projection of naval power ashore--beyond the
    reach of naval gunfire along coasts--was forged as a strategic concept
    in the World War II Pacific Theater and remains an essential naval
    capability today. Whether in the form of carrier-based strike-fighter
    aircraft armed with precision-guided munitions, a Marine Air-Ground
    Task Force (MAGTF) of combined air and ground forces, sea-launched
    cruise missiles, or clandestine special warfare forces, naval forces
    offer combat options tailored for the situation at hand. In a larger
    conflict, naval forces can seize and defend advance bases--ports and
    airfields--to facilitate the arrival of follow-on land-based air and
    ground forces. They simultaneously provide the necessary command and
    control capabilities for joint and allied forces. Major ground and air
    elements ashore depend upon the delivery of heavy equipment and the
    sustainment provided by the Navy's strategic sealift assets. Protection
    of these critical sea- and land-based elements will be provided in the
    near future by Navy Theater Missile Defense systems. All of these
    capabilities help to underwrite deterrence.
        In addition, with increasing overflight limitations and continuing
    reductions in overseas basing rights, only naval forces can maintain
    assured access to most regions of the world. Naval forces are powerful
    instruments of national policy because of their self-sufficiency and
    freedom from host-nation political constraints. Likewise, these forces
    may either be highly visible, for an enhanced deterrent effect, or
    operate from stealthy and secure postures--above, on, or below the
    surface of the sea--ready to strike with maximum surprise.
        These four strategic concepts--forward presence, deterrence, sea
    and area control, and power projection--provide the cornerstone of U.S.
    naval strategy and complement each other in ways that enhance their
    contribution to the security of the nation. Forward presence supports
    both conventional deterrence and deterrence against the threat and
    actual use of WMD. Deterrence, in turn, requires power projection to be
    credible. The ability to gain and maintain sea and area control makes
    power projection possible and sustainable. If deterrence should fail,
    the ability to control critical sea lanes and other areas provides the
    foundation for projection of both naval and follow-on, land-based
    forces. Only the nation's naval forces have the capabilities to
    implement these strategic concepts to their fullest potential.
    Challenges and Solutions for the 21st Century
        As indicated late last year, budgets continue to be constrained,
    making it is difficult to balance the need to sustain day-to-day
    operational readiness and the modernization necessary to ensure U.S.
    naval forces are properly poised and ready to meet future requirements
    and threats. Although deployed readiness remains satisfactory, the key
    readiness indices of our non-deployed forces are worsening, thus posing
    risks for the future. Non-deployed readiness is currently funded at
    levels which minimize flexibility and hamper our ability of these
    assets to surge quickly in the event of a major theater war. The higher
    level of funding requested in the proposed President's fiscal year 2000
    budget, along with savings realized by efficiencies in the way the
    Department operates, will begin to address some of these concerns.
        Long-term readiness is also of concern. Investments in
    modernization of existing equipment and acquisition of new systems are
    based on a comprehensive assessment of future threats. Current threats
    can be dealt with by today's highly capable naval forces., However but
    investments in future capabilities to defeat tomorrow's threats are
    often deferred to fund today's readiness. A higher level of overall
    Department of Defense funding as initiated by the fiscal year 2000
    budget and the savings realized by efficiencies in the way the we
    operate are required to provide the resources critical for the Navy and
    Marine Corps to sustain global presence and power.
        Throughout America's history, a modern and capable fleet has been
    the linchpin for protecting important U.S. interests wherever and
    whenever they might be in jeopardy. Since the end of the Cold War,
    several comprehensive analyses and assessments have addressed the force
    structures needed to ensure that U.S. forces can carry out the
    operations and taskings that underwrite America's security and military
    strategies. Today, the stated requirement is for a Marine Corps of
    three Active Marine Expeditionary Forces (MEFs) and one Reserve
    division air wing and force service support group and a Navy of at
    least 300 ships, including as core assets: 12 aircraft carriers; 10
    Active and one Reserve carrier air wings (CVWs); 12 amphibious ready
    groups (ARGs); 50 nuclear-powered attack submarines (SSNs) with
    enhanced stealth features and strike capabilities; 14 strategic
    ballistic missile submarines (SSBNs) armed with Trident II/D5 ballistic
    missiles and operated in two ocean areas and 116 surface combatants
    (108 Active and eight Naval Reserve Force ships)
        In order to sustain these force levels beyond the FYDP, the Navy
    must achieve a building rate of eight to ten ships per year. Our
    current and projected building rate of six-to-eight ships per year will
    not sustain minimum essential force levels for a 300-ship Navy in the
    future. Therefore, shipbuilding rates must improve early in the next
    decade.
        Similarly, to maintain our ability to carry out all missions
    implicit in . . . From the Sea (1992), Forward . . . from the Sea
    (1994), and Operational Maneuver from the Sea (1997), the Department of
    the Navy is pursuing several keystone programs, including the F/A-18E/F
    Super Hornet strike aircraft, the future CVNX aircraft carrier, the MV-
    22 Osprey aircraft, and the Advanced Amphibious Assault Vehicle (AAAV).
        Refining their respective Service's collaborative efforts to meet
    the Nation's naval and maritime security requirements, the Chief of
    Naval Operations and the Commandant of the U.S. Coast Guard in
    September 1998 signed a joint Navy/Coast Guard policy statement on the
    National Fleet. This policy re-emphasizes the way the two sea services
    will serve the nation while recognizing the broad contributions that
    the Coast Guard makes to America's maritime security. It commits the
    Navy and the Coast Guard ``to shared purpose and common effort focused
    on tailored operational integration of our multi-mission platforms.''
    This complementary partnership calls for the Navy and the Coast Guard
    to work together to build a National Fleet of multi-mission surface
    warships and maritime security cutters to maximize our joint
    effectiveness across all naval and maritime roles, missions, functions,
    and tasks. The National Fleet concept offers enhanced effectiveness in
    the way both Sea Services approach the challenges of meeting tomorrow's
    needs in a most cost-effective manner.
        Several other initiatives are being pursued and implemented in the
    Department to more efficiently utilize the resources we have, while
    instituting a new paradigm for the way we work. Programs such as the
    Secretary of the Navy's Smart Work program, Information Technology for
    the 21st Century (IT-21), the Revolution in Business Affairs (RBA) and
    Strategic Business Plan (SBP) are but a few examples that will help
    sustain our efficacy for tomorrow while making the most of the
    resources we have today. Additionally, the Department of the Navy must
    continue to capitalize on cost reduction initiatives and chart a vision
    for global security and economic prosperity into the 21st Century.
        This 1999 Department of the Navy Posture Statement continues with
    discussions of the need for operational primacy and how we do our day-
    to-day mission; the Sailors, Marines, and civilians at the heart of
    America's naval forces; the means by which we will gain efficiencies
    and flexibility for the total force; and key technologies in support of
    current operational concepts and future naval forces.
             shape--respond--prepare: ensuring operational primacy
        The presence of credible naval forces in critical world regions is
    both a key means of furthering U.S. interests and essential to the
    ability of the U.S. to deal with crises. In recent years, the demand
    for U.S. forces has been increasingly high, yet limited manpower and
    other constrained resources have challenged the Department of the
    Navy's ability to satisfy all requirements without over-burdening our
    people and wearing out our ships and aircraft.
        We expect this situation to continue well into the next century.
    Thus, the peacetime challenge to the Department of Navy is to
    prioritize its operational activities to ensure that our efforts
    concentrate where they will do the most good without sacrificing
    crisis-response and warfighting capabilities. These priorities vary by
    region and situation according to the national security interests
    engaged.
        The National Security Strategy identifies engagement as the best
    means of furthering security interests worldwide. Engagement occurs at
    many levels, but its most visible element is the U.S. Armed Forces
    whose mission is to encourage peace, promote stability, and, when
    necessary, defeat adversaries. It is not enough to be supremely
    competent in waging war; our Armed Forces must be equally capable of
    maintaining the peace.
        The three fundamental elements of U.S. National Military Strategy
    are to shape the international environment, to respond to the full
    range of crises, and to prepare for an uncertain future. America's
    naval forces execute this strategy by deploying ships and aircraft
    around the globe. The closing of many foreign bases makes self-
    contained and self-sustained naval forces the most recognizable
    component of U.S. forward presence, demonstrating our nation's
    commitment to a peaceful and more prosperous future. A forward
    presence--one that visibly reassures allies and deters adversaries--
    must be sustained and enhanced, since the alternatives of isolationism
    and passivity historically proved far more costly. When crisis and
    conflict erupt, we must be there with the ability to effectively
    respond.
    Shaping the International Environment
        Forward presence remains the cornerstone of the nation's strategic
    shaping effort. Forward deployed naval forces are tailor-made for
    promoting regional stability and deterring aggression by operating in
    forward stations with credible power and the means to deliver it. In
    addition, forward deployed naval forces are likely to be much more
    cost-effective alternatives to surging forces from the continental
    United States. For example, a Joint Task Force established in 1997 to
    conduct a full non-combatant evacuation from Zaire cost $236 million. A
    similarly sized Marine Air-Ground Task Force would have cost just over
    three million dollars to accomplish the same mission.
        The Sea Services' most important shaping element is their forward
    deployed posture. Through exercises and port visits, the Navy and
    Marine Corps strengthen U.S. ties with allies and work toward
    establishing new relationships and partnerships that will foster
    regional stability and enhance the world economy.
        U.S. naval forces also train and exercise with countries that have
    limited infrastructure and a minimal ability to support large-scale
    military deployments. These exercises offer other nations unique
    opportunities to develop a relationship with U.S. forces. Forward
    deployed naval forces also provide theater commanders with flexible,
    responsive task organizations that can be positioned in trouble spots
    for extended periods as a visible demonstration of U.S. resolve and
    commitment. Highly mobile, combat-ready naval forces are not as
    burdened by political constraints that often delay or disrupt the
    deployment of ground-based military forces. This flexibility is
    invaluable to the nation, as it allows the National Command
    Authorities--the President and his national security and military
    decision-makers--to act when necessary.
    Summary of Naval Exercises
        The Navy and Marine Corps team significantly enhanced
    interoperability with allies and forged new relationships with other
    nations in 1998. From Cape Horn to the Sea of Japan, the Navy-Marine
    Corps team directly supported the U.S. international shaping strategy
    by engaging allies and friends, and extending the hand of friendship
    around the world--while demonstrating the awesome capabilities of the
    Navy and Marine Corps. Live-fire exercises with surface combatants,
    submarines, and aircraft, as well as extensive amphibious assaults,
    mine warfare, and sophisticated special operations, enable the Navy-
    Marine Corps team to train with our allies the way future coalitions
    will fight.
    Responding to the Nation's Tasking
        On average, the Navy-Marine Corps team responded to national
    tasking once every three weeks in 1998. This is a five-fold increase
    from that experienced during the Cold War. They were called upon to
    demonstrate multipurpose capabilities in wide-ranging assignments: deep
    strike missions against Iraq, evacuations from Eritrea, humanitarian
    assistance in Indonesia, disaster relief in New Guinea and Central
    America, and maritime interception operations (MIO) in the Arabian
    Gulf. Repeatedly, forward deployed naval forces were ready to answer
    the nation's call--sometimes alone, sometimes in concert with the other
    Services and those of our allies and friends.
    Summary of Naval Operations
        U.S. naval operations in 1998 stretched across the globe and
    demonstrated fully the multimission capabilities of a full-spectrum
    maritime force. The volatile Southwest Asia region demanded vigilance,
    flexibility, and ready firepower during 1998 as our naval forces
    shouldered the brunt of continuing operations focused on Iraq,
    implementing United Nations policy against a state that remains defiant
    in the face of international sanctions. Navy and Marine Corps aircraft
    and Tomahawk cruise missiles launched from Navy combatants were
    essential instruments of national resolve in response to continued
    Iraqi violations of United Nations sanctions during Operation Desert
    Fox.
        In the embattled Balkan region, naval forces continued to execute
    operations designed to uphold the fragile peace. Navy cruise missile
    strikes were launched against terrorist targets in the Sudan and
    Afghanistan in response to the bombings of American embassies in Kenya
    and Tanzania.
        In a continuing effort to disrupt the flow of illegal drugs into
    the United States, the Navy deployed active and reserve forces to the
    Caribbean and Eastern Pacific. Working with Coast Guard and civilian
    law-enforcement agencies, the Navy's ships, submarines, and aircraft
    contributed to several large drug seizures. Furthermore, Sailors and
    Marines served with law enforcement and military forces in drug-source
    countries as tactical planners, analysts, and members of mobile
    training teams. In all, Navy assets logged more than 18,000 flight
    hours and some 2,300 ship steaming days in support of drug interdiction
    operations.
        From the Mediterranean Sea and Indian Ocean, Sailors and Marines
    came to the aid of victims of natural disasters in both Kenya and
    Italy, assisting in those countries after severe rain and mudslides
    ravaged several areas. Closer to home, Navy and Marine Reservists
    coordinated disaster relief efforts for Hurricane Georges in Puerto
    Rico and Hurricane Mitch in Central America. In addition, the Navy-
    Marine Corps team answered the call for assistance after wild fires in
    Florida, severe floods in Georgia, and devastating tornadoes in
    Pennsylvania left thousands of American citizens in distress.
    Preparing Now for an Uncertain Future: Instituting a Transformation
        The emerging security environment presents a diverse set of
    challenges and threats to U.S. interests. Naval forces must be prepared
    to confront threats to the nation, U.S. citizens, and America's
    worldwide interests. These challenges demand an integrated approach to
    security issues, involving close cooperation among military, other
    government, non-government, and international organizations.
        Similarly, funding contraints have focused the military's need to
    use technology and improve its tactics and business practices to become
    more efficient and effective. Naval forces of the future may look
    decidedly different from those of today, and a period of transformation
    has already begun. Rapid advances in technology require the Navy-Marine
    Corps team to institute a continuous review of force structure,
    operational concepts, and acquisition and maintenance of its forces and
    systems.
        The Department of the Navy is establishing a comprehensive process
    to innovatively improve its ability to execute both traditional and
    non-traditional missions. The Navy and Marine Corps staffs, Naval War
    College, Strategic Studies Group, and the Marine Corps University are
    conceiving forward-looking concepts on how our naval forces can meet
    tomorrow's challenges. The newly created Navy Warfare Development
    Command and the Marine Corps Combat Development Command further develop
    future warfare doctrine and concepts. A series of Navy Fleet Battle
    Experiments (FBEs) and Marine Corps Advanced Warfighting Experiments
    (AWEs) are used to test new doctrine, gain insights into the utility of
    new technologies, explore new operational capabilities, and test ideas
    for future application.
        The first forward area FBE, FBE Delta, was conducted in conjunction
    with Foal Eagle 1998, a joint and combined theater exercise. Its
    experiments included the most futuristic test yet of theater combined-
    arms coordination. Using E-2C Hawkeye airborne early warning aircraft,
    nuclear submarines, surface combatants, Special Operations Forces
    (SOF), and Air Force F-16 fighters, these experiments addressed
    specific theater concerns including counter-SOF, counter-fire, and
    Joint Theater Air and Missile Defense.
        FBE Echo, scheduled for March-April 1999, will be coordinated with
    the Marine Corps' AWE, Urban Warrior. This experiment will further
    explore naval operations in the urban environment, including naval
    fires (i.e., the emerging concept of netted sensors and strike/land-
    attack weapons, which was previously known simply as ``strike
    operations''), command and control, and theater air defense. FBE Echo
    will also initiate an examination of new concepts for undersea warfare
    to more fully deal with asymmetric maritime threats.
        Concept-based experimentation is the means to fuse new technologies
    with novel operational concepts to satisfy future warfighting
    requirements. The Navy Warfare Development Command's Maritime Battle
    Center (MBC) and Marine Corps Warfighting Laboratory (MCWL) have
    cognizance over the range of naval innovation--to include tactical,
    operational, and organizational concepts as well as technical
    innovations. The laboratories' primary purposes are to develop
    concepts, tactics, techniques, and procedures for the application of
    advanced technologies that will result in a Revolution in Military
    Affairs (RMA) for U.S. naval forces. The RMA promises a dramatic change
    in the fundamental nature of war through a combination of technological
    advances and operational, organizational, and institutional changes.
        The Marine Corps Warfighting Laboratory's primary responsibility is
    to investigate concepts, tactics and technologies, and to coordinate
    results with other organizations. To carry out this process, the MCWL
    has developed the Five Year Experimentation Plan (FYEP). This three-
    phase plan is the cornerstone document for concept-based
    experimentation and the introduction of science and technology into the
    Marine Corps' operating forces. Each phase comprises limited-objective
    experiments and culminates in an AWE. The first phase, called Hunter
    Warrior, was completed in March 1997 and examined the contribution that
    a highly capable MAGTF could make if provided with selected conceptual
    and technological improvements.
        Now in its second phase, Urban Warrior is projecting lessons
    learned from Hunter Warrior--with additional capabilities addressing
    tactics, techniques, and procedures required in a primarily urban
    littoral battlespace. Urban Warrior's charter is to increase the
    ability of naval forces to execute simultaneous, non-contiguous
    operations throughout the littoral region. It will address operations
    in a coastal urban setting and the surrounding battlespace, including
    sea-basing of its support infrastructure, and will also focus on
    defense against WMD attack.
        The final Urban Warrior capstone exercise will be executed by the
    First Marine Expeditionary Force (I MEF) in Kernal Blitz 1999 in
    conjunction with Third Fleet's FBE Echo. Preparations for the third
    phase, Capable Warrior, will begin in early 1999 and will examine
    whether a sea-based Marine Expeditionary Force can conduct maneuver
    throughout an extended littoral battlespace by employing sea-based
    command and control, naval fires, and logistics.
        As AWEs and FBEs explore new warfighting concepts, Advanced Concept
    Technology Demonstrations (ACTDs) explore the military utility of new
    and emerging technologies. ACTDs provide naval forces with the
    opportunity to experiment with new technical capabilities very early in
    the acquisition process and are an effective means of rapidly fielding
    new capabilities at a reduced cost. Preference is given to joint
    programs and is designed to involve the warfighter throughout the
    process. ACTDs can provide insights into the development of doctrine
    and training, and can be used to drive the acquisition process. For
    example, the Navy and Marine Corps are heavily involved in the
    Extending the Littoral Battlespace (ELB) ACTD. As part of Kernal Blitz
    1999 and Urban Warrior, ELB ACTD intends to establish a near-seamless
    C\4\ISR network that fully supports over-the-horizon, sea-based force
    projection, distributed firepower, and manuever warfare.
    Total Force Operations: Navy & Marine Corps Reserve Integration
        The augmentation provided by Reserve forces is a combat multiplier
    that provides active duty forces with depth and flexibility. Cost-
    effective Reserve forces have become an increasingly crucial component
    of the crisis-response and warfighting capabilities of the naval
    services.
        The Naval Reserve plays a significant role in virtually all major
    operations and exercises. Last year, for example, Naval Reserve Force
    ships deployed to the Western Pacific for CARAT-98, to South America
    for Unitas, and to the Caribbean for several counterdrug deployments.
    The 1998 exercise Ulchi Focus Lens included more than 600 Reservists,
    which is double the number deployed just five years ago. Naval Reserve
    aircraft units also contribute to the military effort in Incirlik,
    Turkey, while supporting United Nations' sanctions against Iraq, and
    are integral to all major fleet operations. A Marine Corps security
    team was the first reinforcement force to arrive in Dar Es Salaam,
    Tanzania, after the embassy bombing in 1998, and was flown to the scene
    on board Naval Reserve aircraft.
        The Naval Reserve maintains its traditional capability for wartime
    mobilization, and its people are integral to war-plan staffing. Recent
    emphasis on peacetime support for the Fleet, however, further enhances
    the overall mobilization readiness of the Naval Reserve. It also helps
    the Fleet by providing Personnel Tempo (Perstempo) relief in important
    skill areas. To this end, Naval Reserve support to the Fleet increased
    to more than two million workdays last year.
        During 1998, rotations of 10 Reserve Civil Affairs Marines were
    continuously deployed to Bosnia for Operation Joint Guard. Forty-one
    Reservists were activated to support Marine Forces Pacific and I MEF in
    response to increased tensions over Iraq. Some 2,000 Reserve Sailors
    and Marines augmented II MEF for Exercise Strong Resolve in Norway.
    Marine and Navy Reservists also served alongside their active duty
    counterparts in numerous other operations, exercises, and counterdrug
    missions in 1998.
        The Naval Reserve has embraced a Revolution in Business Affairs
    increasing its flexibility to emerging missions. One example is the
    flexible drilling program, where Reserve personnel are no longer tied
    to traditional monthly drill weekends. Instead, they combine their
    drills into longer-term packages that better address Fleet support
    needs and Reserve training. Reservists in places like Minneapolis and
    Denver are now electronically networked in order to complete time-
    critical work, and enhance their integration with active counterparts.
    Electronic connectivity was extended to Naval Reserve units that serve
    national intelligence centers as well. Additionally, a web-based
    information exchange system provides better Fleet access to the
    civilian skills of the Naval Reserve.
        The Marine Corps Reserve forces mirror their active duty
    counterparts and are structured to augment and reinforce the active
    component as integrated units. Coupled with the individual skills
    resident in the Reserve, this facilitates the ability of the Reserve to
    support total force missions across the spectrum of engagement and
    conflict--from peacekeeping and smaller-scale contingencies to major
    theater war.
        Today more than 98 percent of Marine Corps Reserve units are
    assigned to active duty forces in support of the Marine Corps'
    commitment to joint operation plans. A seamless integration of reserve
    elements with active duty components is essential due to an increasing
    demand for military forces and an smaller overall force structure. The
    Marine Corps Reserve contributes approximately one-fourth of the force
    structure and one-third of the trained manpower of the total Marine
    Corps force. Marine Reservists also comprise all of the adversary
    squadrons and civil affairs groups; one-half of the tank battalions;
    one-third of the artillery battalions; and one-fourth of the
    reconnaissance battalions. Reserve contribution will be reviewed during
    a total force structure review in 1999.
        Retention challenges in the Marine Corps Reserve are being
    addressed through the Reserve Recruiting and Retention Task Force. Two
    important programs sponsored by the task force are Operation Harvest
    and the Reserve Career Management Team (CMT). Operation Harvest matches
    Marines separating from active duty with reserve units, while the CMT
    provides for reserve career management similar to the monitoring of
    Active Component Marine careers. When fully functional in fiscal year
    1999, CMT will provide an equitable reserve career management and
    professional development program to assist Reservists in achieving a
    fulfilling reserve career.
          sailors, marines, and civilians: the cornerstone of success
        America's naval forces are combat-ready largely due to the
    dedication and motivation of individual Sailors, Marines, and
    civilians. Developing and retaining quality people is vital to our
    continued success and is among the Department's biggest challenges.
    Meeting these challenges is essential to long-term effectiveness. But,
    with continued fiscal austerity and constrained funding, any increased
    investment in personnel programs will likely come at the expense of
    future modernization programs. However, as it is so often said, our
    people are our most valuable resource. It is with this in mind that we
    must continue to put a premium on recruiting, retaining, and training
    the best people our country has to offer.
    Core Values: Honor, Courage, and Commitment
        The Department of the Navy's core values of honor, courage, and
    commitment are the very fabric of our naval character. It is the ethos
    of who we are and how we conduct ourselves on a daily basis. From these
    principles we uphold the traditions of the naval profession and shape
    the service's standards for moral conduct. As warfighters, we wield
    destructive power and must often act independently on the battlefield
    to judge situations and show the highest caliber of moral leadership.
    Therefore, it is essential that core values be an integral part of
    Sailors' or Marines' leadership training and professional development
    throughout their careers.
        Sailors, Marines and civilians possess a strong personal commitment
    to these core values and are relied upon to uphold the highest
    standards of professional and personal conduct. Thus, ethical awareness
    and adherence to core values is at the forefront of every decision,
    Department-wide.
    Recruiting America's Best and Brightest
        At the end of fiscal year 1998, the Navy's end strength was 381,502
    active duty and 94,294 reserve. Active duty and Reserve Marines
    numbered 173,142 and 40,842, respectively. Department-wide civilian
    staffing stood at 207,782. The downsizing of the early/mid-1990s is
    nearly complete, and the Department of the Navy is working to ensure
    that the nation's youth are aware of the diverse and rewarding career
    possibilities that naval service offers to America's best and
    brightest. Naval service stimulates and challenges young people while
    providing a solid foundation of ``high-tech'' training, life skills,
    and leadership experience at a relatively early age. Although the Navy
    and Marine Corps both met officer and enlisted recruiting goals for
    their respective Reserve forces, recruiting remains a challenge for
    active duty Navy forces. Increasing college attendance, historically
    low unemployment, and prolonged economic growth all combine to compete
    with naval recruiters for the limited pool of qualified enlistees.
        The Navy experienced a recruiting shortfall of 6,892 Sailors in
    fiscal year 1998. Unfortunately, fiscal year 1999 is equally
    challenging with the same competitive factors. In response, we
    developed a strategy to address this environment and help avoid an
    accession shortfall in fiscal year 1999. First, we boosted the number
    of recruiters by 25 percent, from 3,600 in 1998, to over 4,500 by March
    1999. Next, our advertising campaign strongly emphasizes that the Navy
    represents a great career opportunity. We have further empowered our
    recruiters by increasing recruiting incentives, including Enlistment
    Bonuses, Navy College Funds, and a series of specific bonuses and
    contracts targeted to attract general detail (GENDET) Sailors. Shorter
    enlistment contracts will help young people unsure whether the Navy is
    the right choice for them. Likewise, we included a legislative request
    to increase the maximum enlistment bonus from $12,000 to $20,000, which
    should help attract enlistees.
        Additionally, the Navy increased the maximum allowable enlistment
    percentage of non-High School diploma graduates (NHSDGs) from five
    percent to the DOD limit of 10 percent earlier this year. Although a
    high school diploma is an important validation of ability to succeed,
    it is not the ``be-all'' or ``end-all'' of a potential recruit's
    measure of worth. This initiative authorizes the recruitment of up to
    an additional 2,600 boot camp entrants when their work experience and
    above average test scores identify them as ``Proven Performers'' and
    justifies their admission. Additionally, we will provide highly
    effective training through our Personal Academic Capacity Enhancement
    Program for personnel at boot camp requiring remedial instruction. We
    recognize that recruits without high school diplomas have historically
    failed to complete recruit training at a rate of about 10 percent
    greater than those with diplomas. However, this metric is more than
    offset by the fact that non-diploma graduates who complete boot camp
    have higher retention rates and perform as well or better than their
    peers in the fleet.
        Despite the impact of a strong civilian economy, the Marine Corps
    met all of its recruiting goals in fiscal year 1998, extending an
    unbroken string of recruiting success--both in quantity and quality--to
    41 consecutive months. To continue to recruit quality men and women,
    the Marine Corps maintains an effective and award-winning advertising
    program. As young Americans grow less inclined toward military service,
    new approaches and more resources must be applied to recruiting. To
    generate awareness and quality recruiting leads, and to make the Marine
    Corps more attractive, the Marine Corps expanded the use of high-
    profile marketing opportunities. The Marine Corps is also developing an
    Internet-based system to bolster both initial and follow-up recruiting
    effectiveness. Likewise, a CD-ROM product is under development that
    gives comprehensive Military Occupational Speciality information to
    help recruits make informed career decisions before departing for boot
    camp.
    Retention
        Individual Sailors and Marines are the foundation of the total
    force. Caring for them and their families is central to personnel
    retention and the overall readiness of the Navy-Marine Corps team.
    Decreasing quality of life, family separation, pay disparities with the
    civilian community, lower advancement opportunity, erosion of other
    benefits, and a strong civilian economy adversely affect retention of
    Navy and Marine Corps personnel.
        Enlisted Retention.--Overall, enlisted first-term retention during
    1998 was approximately 32 percent for the Navy, which is about 6
    percent below the retention level to support a steady-state Navy force
    level. Overall enlisted first-term retention for the Marine Corps was
    21.86 percent, which is the minimum rate to sustain the Marine Corps
    force structure. A combination of initiatives, such as increasing the
    Selective Reenlistment Bonus (SRB) from $45,000 to $60,000, should
    boost retention figures. The Navy's ongoing commitment to fund the
    personnel account adequately addresses lingering concerns about timely
    permanent change-of-station moves, bonus payments, and advancement
    opportunities. In addition, the Chief of Naval Operations' initiative
    to reduce the inter-deployment personnel tempo will give Sailors more
    time at home. Despite these efforts, an across-the-board increase of
    military compensation is needed to stem the tide of declining
    accessions and insufficient retention.
        Other initiatives to enhance personnel compensation were included
    in the Fiscal Year 1998 National Defense Authorization Act. Housing
    allowance reform, to be phased in over six years, will first stabilize
    and then reduce the percentage of housing costs absorbed by individual
    Sailors and Marines. Subsistence allowance reform will correct pay
    inequities among enlisted people and will tie increases in this
    allowance to a credible food-cost index. The Department enhanced family
    separation pay, hazardous duty pay, and overseas tour extension bonuses
    to alleviate hardship situations. In order to offer our quality people
    a competitive standard of living, however, the Department needs strong
    and continuing support from the Congress for significant increases in
    military compensation.
        To complement these financial initiatives, the Department of the
    Navy is placing a greater emphasis on the way we work. For example, the
    Department is developing a new Smart Work program to provide our
    Sailors and Marines with the best tools and equipment possible, which
    will help reduce the number of hours our enlisted personnel work while
    increasing the quality of their work. Some examples include: developing
    and procuring a new type of watertight door that will replace the high-
    maintenance type that consumes significant maintenance man-hours;
    acquiring ``top-of-the-shelf'' basic equipment that will make scraping
    and painting less burdensome; and Developing paint for the fleet that
    is more resistant to deterioration and yet does not affect the
    environment, to help reduce maintenance burdens and improve working
    conditions.
        Officer Retention.--During the past few years, reduced force levels
    partially offset the adverse impact of Navy officer community
    shortages, which were exacerbated by high-tempo operations. While the
    Marine Corps is meeting its end strength requirements and will for the
    foreseeable future, retention in aviation specialties is a concern.
    Unfortunately, our armed forces are nearing their lower end-strength
    goals, at a time when the robust civilian market offers strong
    employment alternatives to Sailors and Marines. Inadequate retention
    only increases the personal sacrifices demanded of our remaining
    officers, as sea tours are lengthened due to operational requirements
    and commitments. Positive changes are needed immediately to help stem
    the loss of highly skilled and motivated people before current
    readiness is more adversely affected. Retention must be improved to
    meet officer manning requirements particularly in Navy and Marine Corps
    aviation, nuclear power, surface warfare, and special warfare.
        Aviation.--Navy Pilot retention decreased to 39 percent in fiscal
    year 1997 and further declined to 32 percent in fiscal year 1998. This
    trend is expected to continue for the foreseeable future, and pilot
    retention already falls short of the 35 percent aggregate level
    required to fill critical department head and flight leader positions.
    Naval Flight Officer retention is also declining, with aggregate
    retention in early 1999 at the minimally acceptable level of 38
    percent. While continuation of these mid-level officers represents our
    greatest retention challenge, there was also an increase in
    resignations of more senior aviators, particularly due to intense
    competition from private industry. The Marine Corps is also
    experiencing aviation retention challenges, especially for fixed-wing
    aviators. The Navy is developing compensation proposals to address
    Service-specific retention shortfalls and regain the high ground in the
    retention battle. Relief from current Title 37 legislative constraints
    will enable us to continue developing new compensation programs and
    more efficiently apply limited resources where and when they are
    needed. Aviation Career Continuation Pay (ACCP) is one such initiative
    that would mark a departure from the unsuccessful retention programs of
    the past. Tied directly to force structure, ACCP would meet the
    retention challenge at every critical point throughout an aviation
    career by rewarding aviators for superior performance and increased
    responsibility.
        Nuclear Power.--The success of the Naval Nuclear Propulsion program
    is a direct result of quality people, rigorous selection and training,
    and high standards. Fiscal year 1998 retention for submarine officers
    was 27 percent and 21 percent for nuclear-trained surface warfare
    officers, which is currently adequate because of our post-Cold War
    downsizing. However, nuclear officer accessions and retention remain
    below the required level to sustain the future force structure.
    Retention rates must improve to 38 percent for submarine officers and
    24 percent for nuclear-trained surface warfare officers by fiscal year
    2001 to meet steady-state manning requirements. In its present form,
    the Nuclear Officer Incentive Pay program remains the surest and most
    cost-effective means of meeting current and future manning
    requirements. The authorization requested to extend the program and
    increased pay limitations provides the Department of the Navy with
    sufficient program flexibility to address current and future retention
    challenges.
        Surface Warfare.--Despite a large reduction in the number of ships
    since the Cold War ``high water mark'' in the mid-1980s, the Surface
    Warfare Officer (SWO) community is experiencing difficulty retaining
    enough senior lieutenants and junior lieutenant commanders to meet
    department head requirements. Current retention in the SWO community is
    25 percent against a manning retention requirement of 38 percent. To
    reverse the SWO retention trend, Navy leadership is addressing
    waterfront quality-of-life concerns and has proposed Surface Warfare
    Officer Continuation Pay (SWOCP). This initiative would pay surface
    warfare-qualified officers up to $50,000 to remain in the community
    through their tenth year of commissioned service.
        Special Warfare.--Historically, officer retention in Naval Special
    Warfare (NSW, commonly referred to as SEALs--for Sea, Air, Land forces)
    was among the highest in the Navy. Since 1996, however, the annual
    number of resignations has risen dramatically. The SEAL retention rate
    at the critical seven-year point has fallen to 58.2 percent from
    historical levels of greater than 80 percent. The Navy is attempting to
    address SEAL junior officer retention problems in several ways
    including proposed increased incentives. These incentives include a
    proposal for NSW officer continuation pay--targeting officers with 6-14
    years of service--and proposed legislative relief from the restriction
    on drawing more than one Hazardous Duty Incentive Pay. Additionally,
    the Naval Special Warfare leadership is conducting a thorough
    evaluation of its organization in an effort to reduce personnel tempo,
    improve job satisfaction, develop a mentoring program, and expand
    postgraduate education opportunities.
    A Comprehensive, Competitive Military Compensation Strategy
        Navy leadership is fully cognizant that we need a multi-faceted
    approach to be successful in improving personnel readiness. While there
    is no one remedy to this complex problem, a boost to military
    compensation is fundamental to a long-range solution.
        Therefore, we strongly endorse the DOD compensation triad (basic
    pay increase of 4.4 percent in fiscal year 2000 and 3.9 percent each
    year through fiscal year 2005, pay table reform to recognize and reward
    performance, and repeal of the Military Retirement Reform Act of 1986
    (Redux)) as an excellent step toward addressing pay gap and
    compensation concerns.
        While the compensation triad will begin to address our recruiting
    and retention concerns, it will not ensure adequate retention in many
    of our undermanned, highly skilled warfare specialties. Historically,
    targeted bonuses have proven highly effective and very cost efficient
    in attacking these retention problem areas. This year, we plan to make
    greater use of this proven strategy. As discussed in the section on
    Recruiting and Retention, our Fiscal Year 2000 Authorization Act
    request seeks congressional support for several special and pay
    incentives and bonuses to deal with key personnel problem areas.
        Long-term savings and financial security for our Sailors and
    Marines can help improve recruiting and retention. Therefore, in
    addition to the DOD compensation triad, we believe that a 401K-type
    payroll savings plan would pay significant dividends in providing our
    Sailors and Marines an uncomplicated, low initial investment means of
    establishing financial security. An important program that supports
    these goals is the Uniformed Services Payroll Savings Plan (USPSP), a
    tax-deferred long-term savings program that would authorize service
    members to contribute up to 5 percent of basic pay with no government
    matching funds. It would be managed by the Federal Thrift Investment
    Board (FTIB), which already oversees the Civil Service Thrift Savings
    Plan, who would be charged with professional oversight and participant
    education for the Navy and Marine Corps.
        Strongly supported by the Department of the Navy, the establishment
    of USPSP would be a significant step in addressing continuing
    congressional concerns that young men and women joining the Services
    have inadequate knowledge and understanding of the skills required for
    personal financial management and fiscal responsibility. While the
    Department has implemented personal financial management programs that
    provide excellent access to information for managing a Sailor's or
    Marine's financial future, these programs are only a first step and
    should be complemented by a Defense Department-sponsored savings plan.
        Equal Opportunity/Diversity.--The Department of the Navy remains
    committed to development of Navy and Marine Corps forces that reflect
    the demographics of American society. Both Services traditionally
    emphasize accessions to diversify the military population. Last year
    some modest gains were made in minority recruitment. The services also
    have increased efforts to retain minorities. Mentoring programs are
    also being developed for the benefit of all Sailors and Marines. In
    addition, a cadre of naval leaders is being assigned to a Standing
    Committee for Minority Affairs to provide experience and guidance on
    issues of diversity and equal opportunity.
        Quality of Life.--The availability of effective Quality of Life
    (QoL) programs and services offer Sailors and Marines peace of mind no
    matter where they are stationed or deployed, and contribute greatly to
    retention and readiness. The four major goals for QoL include adequate
    and fair compensation, appropriate bachelor and family housing, access
    to high-quality health care, and effective programs for community and
    family support.
        The Department of the Navy has established QoL Master Plans to
    provide standards for QoL programs and services. Through this effort,
    the Department provides an array of programs that are an essential
    component of the career benefits package. Many of these QoL programs
    cultivate and reinforce Department of Navy core values, while others
    provide vital community support services. Of special note is a $77
    million increase in the Voluntary Education (VOLED) program throughout
    the Fiscal Year 2000 Future Years Defense Plan (FYDP). Recent studies
    show a strong relationship between the use of VOLED and increased
    retention. Additionally, LIFELines, a revolutionary, web-based approach
    to QoL support services education and delivery, was inaugurated in
    early 1999 to provide more effective access to these services.
        In the execution of its QoL Master Plan, the Marine Corps has
    revolutionized its approach to the delivery of critical QoL programs by
    merging Morale, Welfare and Recreation (MWR) and Human Resources (HR)
    programs into the Personal and Family Readiness Division. The Personal
    and Family Readiness model creates a strong advocacy voice for quality
    of life and establishes a proactive, prevention-based focus. The ``One
    Corps, One Standard'' goal is accomplished by a variety of initiatives
    that address the family, youth activities, and physical fitness. A
    premier example of a prevention-oriented program is Semper Fit, which
    promotes the personal readiness of Marines and healthy lifestyles in
    families by offering a team of fitness, medical, and education
    counselors.
        Housing--Ensuring that America's Sailors, Marines, and their
    families are adequately housed in the local community or in military
    housing is a top QoL issue. New initiatives are underway in housing
    allowance reform, family housing, and bachelor housing. The newly
    implemented Basic Allowance for Housing (BAH) system, which is to be
    phased in over a six-year time frame, will provide allowances that more
    closely match the actual housing costs of the service member.
        In addition, the Department will use Public Private Venture (PPV)
    initiatives to meet its future housing needs. The Navy is implementing
    plans to privatize housing at 16 different locations that target more
    than 29,000 family housing units. In a similar fashion, the Marine
    Corps is pursuing privatization at nine locations that include more
    than 8,000 family housing units.
        PPVs have become the first choice to accomplish whole-house
    revitalization or replacement of existing homes. Effective use of PPVs
    allows the Department to increase the number and improve the quality of
    housing. In areas where analysis of economic, quality, and market
    factors demonstrate that a PPV is not feasible, more traditional means
    of meeting our requirements are employed. Privatization allows the
    Services to enter business agreements with the private sector to
    revitalize or replace existing housing, build new units to meet the
    additional needs of the Service, and maintain the inventory.
        The Department is similarly committed to improving the Quality of
    Life for our single Sailors and Marines through the elimination of
    inadequate barracks and the achievement of a higher standard of living.
    As currently programmed, the Navy will eliminate all community
    restrooms by fiscal year 2008 and attain a seven-year replacement cycle
    for all barracks furnishings by fiscal year 2003. The Marine Corps will
    completely replace inadequate barracks by fiscal year 2005, eliminate
    all barracks maintenance and repair backlogs by fiscal year 2004 and
    reach a seven-year replacement cycle for barracks furnishings by fiscal
    year 2002.
    Safety
        Protecting the lives of Sailors and Marines and preserving valuable
    material assets are critical benchmarks in ensuring that America's
    naval forces remain operationally ready to meet their daunting global
    commitments.
        One of the major innovations developed and adopted by the Navy and
    Marine Corps is the Human Factors Analysis and Classification System
    (HFACS). Recognizing that human error continues to be the leading cause
    of accidents, this analytical process provides the first step in the
    Operational Risk Management (ORM) process--hazard identification. This
    new process of analysis better focuses intervention strategies at the
    root causes, and is designed to help Sailors and Marines identify and
    eliminate or reduce these risks.
        The Chief of Naval Operations and the Commandant of the Marine
    Corps continue to move forward with ORM at all levels. The Naval Safety
    Center has conducted eight organizational level ``Train the Trainer''
    courses and developed a new ORM training course for fleet staffs. The
    Navy has also incorporated ORM into the Leadership Training Continuum.
    ORM is used by the Fleet to throughout the Inter-Deployment Training
    Cycle (IDTC) identify and quantify risk and create more dedicated unit-
    training time. Continued emphasis by leaders at all levels throughout
    the Navy and Marine Corps has made safety awareness part of the
    Department's culture. Another significant risk-management tool entered
    the Fleet Marine Forces in April 1998, when the computer-based Squadron
    Assistance/Risk Assessment (SARA) software program was fielded for
    every Marine Corps squadron. SARA is a unit-level risk management and
    flight-scheduling tool, designed to assist military aviation
    organizations in conducting daily activities. SARA facilitates daily
    scheduling, accumulates unit data, and analyzes aircrew risk factors
    based on aircrew qualifications. In July 1998, the Joint Service Safety
    Chiefs endorsed SARA and recommended funding for continued development,
    product support, and possible use of SARA by all U.S. Armed Services.
    Medical
        Navy Medicine is committed to delivering world-class health care to
    the Navy-Marine Corps team, its retirees, and their families.
    Operational medical units, such as hospital ships and fleet hospitals,
    are capable of providing state-of-the-art health services throughout
    the world. On a smaller scale, a lighter and more flexible rapid
    response capability is being developed. Lastly, preventive medicine--
    health education, reducing injuries, encouraging healthy lifestyles--
    has been given priority because it is key to sustaining a fit and
    healthy fighting force.
        TRICARE.--The foundation of our health care system is TRICARE--
    Department of Defense's triple option managed health care program. In
    regions where TRICARE was established early and is now mature, it
    improved access and uniformity of benefits while ensuring a high level
    of medical readiness. In regions where TRICARE has only recently
    started up, there have been some growing pains. Because TRICARE
    introduced some fundamental changes in how beneficiaries receive care,
    the Office of the Secretary of Defense and the Services continue to
    address problem areas in implementing the program. The Department of
    the Navy is committed to making TRICARE work and will work to ensure
    that its beneficiaries continue to receive the finest health care
    possible.
        Retiree Medical Care.--Another important focus for the Department
    is improving access to medical care for Medicare-eligible
    beneficiaries. The TRICARE Senior Prime demonstration project, now
    being implemented at the San Diego Naval Medical Center, offers some
    encouraging opportunities for improved health care for retirees. Other
    promising methods to mitigate the loss of medical benefits for retired
    members and their families at age 65 are under evaluation.
        Medical Innovation.--Navy clinicians and researchers are leveraging
    technology advances and developing processes to improve medical care.
    In addition, telemedicine is now being used to provide better access to
    specialized treatments for both patients and providers. The use of
    telemedicine provides operational and remote units a medical force-
    multiplier by keeping Sailors and Marines on station, while maintaining
    direct contact with designated specialists. The Navy is also
    streamlining medical operations by working closely with the other
    Services and the Department of Veterans Affairs to integrate health
    care services better and avoid duplication.
        The Department is working with the Department of Defense to
    establish the Federal Employees Health Benefits Program (FEHBP) to
    provide medical care for up to 66,000 retired service members and their
    dependents. The demonstration program will be offered at naval
    hospitals in Roosevelt Roads, Puerto Rico, and Camp Pendleton,
    California, starting January 1, 2000. DOD is planning two additional
    demonstration programs, the TRICARE Senior Supplement program and an
    expanded pharmacy benefits program for Medicare-eligible persons over
    age 65 (mail order pharmacy benefit), as mandated by the Fiscal Year
    1999 DOD Authorization Act.
        Moreover, the Navy's research programs are internationally
    recognized as being at the forefront of DNA vaccine technology,
    immunobiology, and hearing conservation. The Navy will continue its
    medical research initiatives for the benefit of our personnel, and make
    results of our research available to citizens everywhere.
    Revolution in Training: Educating Today's Force for Tomorrow
        The Department needs a potent Navy-Marine Corps team capable of
    responding to increasingly diverse and sophisticated operating
    environments. Tomorrow's force must adapt to decentralized operations,
    smaller crews, increasingly sophisticated and lethal weapon systems,
    expectations of precise execution, proliferation of asymmetric threats,
    and unpredictable environments. Satisfying these needs demands a highly
    trained, broadly educated, and exceedingly proficient core of
    individuals molded into cohesive teams to perform a wide variety of
    missions. Intensive training and education are central to the
    continuing success of our naval forces into the 21st Century.
        The Naval Services are committed to training that emulates the
    operational environment and instills the warrior's ethos of sacrifice,
    endurance, teamwork, and dedication. In this regard, the Department of
    the Navy is instituting fundamental changes to the way we train by
    focusing on the following objectives: reducing the infrastructure cost
    of training and education; increasing personnel readiness; improving
    quality of life by increasing time in homeport; and making training an
    ongoing priority for every Sailor and Marine. The current training
    infrastructure is being modernized and made more efficient to take
    advantage of a host of new technologies. Investments in training
    technologies, focused curricula, modeling and simulation, and a shift
    toward increased training in an operational setting will better support
    the preparation of today's Sailor and Marine. The net results will be
    an enhanced ability to teach a broad foundation of knowledge, an
    increased speed of learning, an improved realism of training scenarios,
    access to special situational knowledge, and a focused remediation in
    order to minimize attrition.
        The Department also recognizes that the demands of the 21st Century
    will challenge their training continuum. Accordingly, the Service has
    embarked on a new Training Modernization Initiative that will provide
    our operating forces with trained Marines in a shorter period of time
    than the current training pipeline. The primary focus of the Training
    Modernization Initiative is to identify core competencies that
    contribute to mission accomplishment for each Military Occupational
    Specialty (MOS). We will then infuse technology into institutional
    training for core competencies and provide the proper mix of distance
    and resident learning for core plus competencies. The Department's plan
    is to reduce the length of formal institutional training, teach more
    courses per year, and provide training to Sailors and Marines when and
    where required. Constrained resources require leveraging live training
    opportunities, while remaining within operational and personnel tempo
    constraints. Limited range and training areas, reduced steaming days
    and flight hours, environmental restrictions, and constrained budgets
    restrict operational training opportunities. The importance of ``Train
    Hard, Train Fast, Train Often, Train First'' cannot be overemphasized,
    especially as the Navy-Marine Corps team will continue to be the
    ``force-of-choice'' for forward presence, peacetime engagement, crisis
    response, and many of the conflicts that are sure to come in the
    future.
        Critical to overcoming some of these constraints are some
    simulation initiatives. Although not a complete solution, simulation
    offers a way to overcome many of these obstacles and use technological
    advances to present more realistic training. Combining simulation with
    live training opportunities overcomes range and target limitations,
    enhances the realism of the training scenario, improves after-action
    review and objective evaluation, and supports tactical decision making
    and mission rehearsal/planning. The Navy and Marine Corps will continue
    to develop modeling and simulation capabilities to enhance operational
    training at home and on deployment.
        Basic Training.--Initial training for officer and enlisted
    personnel must prepare them to handle increasingly diverse operational
    environments--from Arctic and desert wastes to urban ``canyons'' and
    labyrinths. Decentralized operations, increasing weapons lethality,
    asymmetric threats, and complex and varied environments require
    innovative and resourceful individuals capable of making timely,
    effective decisions under pressure. The focus on building strong
    foundations in character, integrity, and leadership during recruit
    training and initial officer training lies at the heart of a career-
    long continuum of education. The updated Battle Stations in Navy
    recruit training and The Crucible in Marine Corps recruit training are
    dedicated to instilling a common set of core values, overcoming mental
    and physical challenges, and fostering unit cohesion and teamwork.
    Battle Stations and the Crucible were specifically designed to provide
    a defining moment in the transformation of young men and women into
    Sailors and Marines.
        The Navy and Marine Corps design basic training to best meet the
    needs of their respective operational environments and missions. The
    Navy conducts basic training in a gender-integrated manner, while the
    Marine Corps is gender-segregated. The Department of the Navy believes
    strongly that each Service should retain the flexibility to structure
    its training to satisfy the specific and sometimes unique needs of that
    Service.
        Advanced Military Education.--Integration of Professional Military
    Education (PME) and leadership training with tactical and strategic
    warfare education throughout a naval officer's career is essential in
    meeting the Department of the Navy's mission. Providing advanced
    education opportunities for Navy and Marine Corps officers is
    critically important as the Services transition to more complex network
    centric warfare and operational maneuver doctrines and supporting
    tactics, techniques, and procedures. Education in strategic,
    operational, and tactical levels of warfare is being strengthened to
    prepare officers to integrate their understanding of the wide range of
    21st Century naval warfare. Expansion of off-campus professional
    military education opportunities, development of distributive learning
    options for graduate education, and modernization of advanced education
    labs and libraries increase flexibility in critical education areas for
    tomorrow's leaders. Implementation of the new Operational Planner
    course at the Naval War College highlights the Navy's commitment to
    producing astute tacticians and leaders.
        Furthermore, the Navy has implemented its Foreign Area Officer
    (FAO) program, which combines formal education with overseas
    assignments in an effort to develop a cadre of regional experts. These
    area specialists are essential to furthering the nation's engagement
    strategy.
        The Marine Corps Total Force Distance Learning program is forging a
    worldwide network of satellite campuses to make continuing education
    accessible for everyone. The Marine Corps University (MCU) improved its
    approach to PME through distance learning by establishing the College
    of Continuing Education (CCE) in 1997. Employing the higher education
    resources of the MCU, the CCE improves traditional correspondence-based
    distance education programs in conjunction with the Marine Corps
    Institute, while leveraging multimedia technology, such as the Marine
    Corps Satellite Education Network, to improve course delivery. In
    addition, the Marine Corps makes extensive use of programs like the
    MAGTF Staff Planning Program (MSTP). MSTP is an instuctor and
    evaluation cell that travels to respective Division-equivalent and
    above commands to train and educate commanders and their staffs in
    operational planning and execution.
    Managing our Civilian Workforce
        Civilians make up about one-third of the Department's people and
    are essential members of the Navy-Marine Corps team. Recent efforts to
    train and maintain a pool of well-qualified employees include better
    training opportunities for junior employees and new civilian
    performance appraisals that emphasize incentive awards. The Department
    also has hosted a series of successful civilian recruitment programs
    throughout the country, which brought Navy and Marine Corps activities
    together with civilian college students. In addition, the Department
    sponsored special engineering and science residential programs, to
    expose outstanding high school and college students to Navy and Marine
    Corps technical missions and functions.
        There is growing concern about the impact that such issues as Base
    Operating Support regionalization, claimant consolidation, and
    outsourcing will have on the civilian workforce. A generally shrinking
    workforce does not generate enough new people to replace the
    Department's aging scientists, engineers, and senior managers. Without
    careful management of retirements and hirings, significant gaps in
    experience can occur. Accordingly, we have sharpened our focus on
    succession planning to ensure that the necessary civilian expertise is
    available for continuity, consistency, and strategic support.
        Civilian Leadership Development Program.--The Department of the
    Navy's Civilian Leadership Development Initiative provides
    opportunities for employees to enhance their competitiveness for higher
    level positions. Several civilian leadership and management programs
    including the Defense Leadership and Management Program, the Senior
    Executive Fellows Program (SEF) at the John F. Kennedy School of
    Government, and the Department of the Navy's Brookings Institute
    course, provide significant opportunities for development. The
    curriculum in each of these programs include rigorous graduate-level
    coursework, rotational assignments, and Professional Military Education
    (PME). The long-term goal is to sharpen civilian leadership skills,
    increase experience levels, and enhance understanding of the missions
    of the Departments of Defense and Navy.
            gaining efficiencies and flexibility for the total force
        From 1988 to 1998, the Department of the Navy's Total Obligation
    Authority (TOA) decreased by 40 percent in constant 1998 dollars.
    Coincident with this decrease was a marked increase in forward-presence
    and contingency operations. In fact, owing to the unique capabilities
    naval forces bring to a turbulent post-Cold War world, the peacetime
    Navy-Marine Corps team has never been busier.
        Today, our deployed naval forces maintain a high level of readiness
    in part by shifting resources from non-deployed forces. Therefore,
    previous declines in funding coupled with increases in operational
    tempo, resulted in impacts on personnel retention, maintenance
    backlogs, recapitalization, and modernization which were
    disproportionate. The resulting effect is most apparent and acute in
    non-deployed readiness, which affects those forces that are not on
    deployment or are scheduled to depart in the near term.
    The Readiness Challenge
        This chart shows the readiness ``bath tub'' effect (readiness
    versus time) and illustrates the difficulty non-deployed forces
    experience as they pass through the Inter-Deployment Training Cycle
    (IDTC). While this chart depicts only carrier air wing readiness,
    similar trends are seen among non-deployed ships and submarines. These
    are precisely the forces that would have to surge in the event of a
    major theater war. The deeper the ``bathtub'' becomes, the greater the
    risk to our ability to respond with combat-ready follow-on forces.
    Clearly, the slope that IDTC units must climb to attain the necessary
    levels of readiness by deployment is getting steeper. This accelerated
    activity greatly affects quality of life and fleet morale. To make up
    for resource shortfalls, our Sailors work harder and longer to
    compensate. Not only does this prevent them from spending the needed
    and well-deserved time with their families, it also stresses them both
    mentally and physically at a time where they should be focused on
    preparing for deployment.
        Similarly, the Marine Corps' high operational tempo comes at the
    expense of not investing in modernization, infrastructure, and quality
    of life accounts. For example, sustaining today's readiness requires
    sacrificing more training time for extensive maintenance hours, in
    essence mortgaging tomorrow's Marine Corps to sustain current
    readiness. The Marine Corps' unfunded Backlog of Maintenance And Repair
    (BMAR) leveled off at $700 million. While we have finally peaked, we
    are not achieving the goal of reducing the backlog by fiscal year 2010.
    Reversing this trend requires approximately $500 million per year,
    approximately $125 million per year above current funding levels.
    Additionally, Marine Corps aviation assets saw a 49 percent rise in
    average cost per flight hour during the last three fiscal years. The
    Marine Corps must keep its ``eyes on the prize'' of 21st Century
    warfighting capability and resist the demand to invest limited
    resources into the maintenance of equipment and weapons systems beyond
    their designed service life. This will require investing in advanced
    technology and reducing total cost of ownership of new equipment.
        For these reasons, the fiscal year 2000 budget requests increased
    funding for Navy and Marine Corps readiness and modernization. Over the
    next six years, the request would provide nearly $4 billion to purchase
    spare parts, increase equipment and property maintenance, address
    manning and training concerns, and increase procurement of new Marine
    Corps equipment. Funding of this request would be an initial step
    toward reversing the downward trend in readiness and easing the strain
    on our forces.
    Improving Our Business Processes
        One area in which substantial savings may be achieved is in making
    the Department's support infrastructure--its business side--more
    efficient. A major challenge for the Department of the Navy is
    determining how to transform the way it conducts business in order to
    achieve the efficiencies and effectiveness of the commercial sector.
        In late 1997, the Secretary of Defense announced a sweeping program
    called the Defense Reform Initiative (DRI) to reform the business side
    of the Department of Defense. Secretary Cohen noted that, ``to carry
    out our defense strategy into the 21st Century with military forces
    able to meet the challenges of the new era, there is no alternative to
    achieving fundamental reform in how the Defense Department conducts
    business.'' Following the Secretary's leadership, the Department of the
    Navy initiated its Revolution in Business Affairs (RBA) process in
    early 1998.
        U.S. industry gained a competitive advantage over its overseas
    competitors in the 1980s and 1990s by being faster to market, quicker
    to change, less constrained by needless regulation, and more innovative
    in applying technology.
        In the same manner, the Department's business vision is to
    efficiently and effectively design, acquire, and support the world's
    premier operational naval forces. Our vision must ensure Department of
    the Navy business practices mirror the best examples in public and
    commercial enterprises. By taking advantage of the RBA, the Navy and
    Marine Corps team will become a more combat-effective and cost-
    efficient force postured for the 21st Century.
        Although the Navy and Marine Corps are the world's premier naval
    forces, business processes supporting our forces are not as efficient
    and effective as the best public and private practices. As noted by
    Secretary Cohen in his Defense Reform Initiative Report, ``DOD has
    labored under support systems and business practices that are at least
    a generation out of step with modern corporate America. DOD support
    systems and practices that were once state-of-the-art are now
    antiquated compared with the systems and practices in the corporate
    world, while other systems were developed in their own defense-unique
    culture and have never corresponded with the best practices of the
    private sector.''
        This is unacceptable, particularly since the demands on our
    operational forces have increased while our resources have declined.
    Our people have already taken extraordinary measures to save resources
    by reducing force structure and infrastructure, including more than 350
    initiatives to improve our existing business systems and support to our
    forces. We are also working closely with the Defense Management Council
    (DMC), established to serve as the Secretary of Defense's Board of
    Directors to oversee the Defense Reform Initiative process. Official
    tasking is accomplished in Defense Reform Initiative Directives
    (DRIDs). There are over 45 DRIDs that include initiatives
    for competitive sourcing, utility privatization and paperless
    contracting and acquisition.
        These initiatives are a key part of the Department of the Navy's
    business reform process. For example, DRID 20 is a review of inherently
    governmental functions providing an initial step towards increased
    outsourcing/privatization. DRID 46 directs paperless contracting DOD-
    wide by January 1, 2000. As per DRID 49, the Services will carry out
    the privatization of utility systems by January 1, 2003.
        In conjunction with DRIDs, the Department of the Navy is charting a
    new course and making new rules. We are developing a Department of the
    Navy Strategic Business Plan (SBP) as a first step in organizing and
    managing how the Department meets its business obligations to the
    operational naval forces. This document will provide a strategic plan
    to transform naval business processes and infrastructure to better
    support the naval forces of the 21st century.
        The SBP will outline the Department of the Navy's overall business
    strategy and provide a common focus to guide transformational change in
    naval business affairs. It will also describe a plan for accomplishing
    Title 10 business responsibilities and serve as a focus and guide to
    our efforts toward our key strategic goals. Our overarching goal is to
    foster the continued conceptual, technological, and operational
    superiority of our naval forces.
        Innovative business practices can be implemented at all levels in
    the Department. We will evaluate our business processes, keeping those
    that serve us well, and adapting the best practices of commercial or
    public enterprises to meet our other needs. As our efforts mature and
    systemic innovations are identified, initiatives will be prioritized
    and integrated to enhance our use of time and other resources. We want
    our business systems as agile, fast, and net-centric as our warfighting
    is now. We must do this to enable recapitalization and modernization of
    our forces. While there is much to do, progress has already been made.
    In the fall of 1998, we commenced business reform initiatives in areas
    of recruiting, retention, training and assignment of personnel;
    commercial business practices; and housing. Working groups comprising
    representatives from the Fleets, Navy and Marine Corps Headquarters,
    and field commands began the change process. The reform initiatives
    these groups have grappled with are very much in support of the
    Revolution in Business Affairs articulated in the Department of Defense
    Reform Initiative. These initiatives will produce change that, although
    iterative, will fundamentally revolutionize our business processes over
    the long-term.
        Key to achieving business process re-engineering is the Information
    Technology for the 21st Century (IT-21) initiative. Many of the
    challenges the Navy and Marine Corps face today are driven by
    revolutionary changes in technology. In order to meet these challenges
    and to lead change, the Department of the Navy must invest in both the
    IT-21 infrastructure and in building connectivity. Only then will the
    Navy and Marine Corps be able to fully leverage technology to achieve
    the needed revolution in business processes. Information Technology is
    the critical enabler for the Department to reap the benefits of process
    improvement. Building a world-class corporate intranet is the next step
    in the Navy's commitment to IT-21. The corporate intranet will do for
    the Navy business manager ashore what IT-21 is doing for the warfighter
    afloat. The goal is to connect all commands/units in a common
    information environment by building the critical infrastructure,
    organizing data, and achieving process and cultural change. This will
    enable the sharing of information, eliminate redundancy, achieve near-
    seamless connectivity between afloat and ashore units, improve quality
    and pride in the workplace, and ultimately, enable the Department to
    become a world-class business.
    Research and Development
        Science and technology are the fuel for naval warfare innovation.
    This year's technology demonstrations will identify tomorrow's options.
    Today's R&D programs--focused on affordability and warfighting
    superiority--are the basis for the technology successes of the future.
        Basic Research Programs.--The Navy's basic research programs are
    the basis for the technology successes of the future. Basic research is
    much like seed capital. For example, research initiated at the Naval
    Research Laboratory in the 1960s led to the Global Positioning System,
    which proved its worth in Desert Storm and is arguably the most
    important navigation tool since the advent of the sextant and
    chronometer. Current basic research initiatives include:
      --Molecular trapping research at ultra-cold temperatures that could
            pave the way to a molecule laser for ultra high-precision
            spectroscopy and chemical sensors. The molecule laser may also
            allow precision probing of surfaces for better circuit patterns
            on silicon wafers (chips) and for studying metallic alloys for
            improved materials to increase weapon system accuracy and
            reliability. In addition, trapping cold molecules may improve
            atomic clocks, enhancing the accuracy of the Global Positioning
            System.
      --Autonomous Oceanographic Sampling Network (AOSN) is a sensor
            network of inexpensive, autonomous underwater vehicles to
            survey the marine environment and relay real-time data to
            warfighters. The AOSN oceanographic and bottom-mapping
            capability has major implications for improved anti-submarine
            warfare and in-stride mine countermeasures. AOSN also offers
            mobile underwater communications and versatile sensor payloads.
      --Hearing Loss Rescue is a new medical procedure pioneered by Navy
            doctors that can prevent and restore hearing loss caused by
            sudden, loud, high-impact noises, or hearing loss suffered over
            time in noise-hazardous environments. This procedure will
            reduce lost work time related to hearing degradation and save
            millions in medical care costs each year.
        The Marine Corps is the executive agent for the DOD Non-Lethal
    Weapons (NLW) program and is participating in seven joint non-lethal
    weapons efforts to augment the capabilities already fielded. These
    programs are divided into four categories: (1) personnel protectors
    (e.g., face and riot shields); (2) personnel ``effectors'' (e.g. sting
    grenades, pepper sprays, and incapacitating rounds); (3) mission
    enhancers (combat optics spotlights and caltrops designed to facilitate
    target identification and crowd control); and (4) training devices
    (e.g. training suits, batons, and inert pepper sprays). These basic
    research programs, delivered throughout the FYDP, demonstrate a clear
    Service commitment to this program that offers important new
    capabilities across the spectrum of conflict, particularly in urban
    environments.
        Applied Research and Technology Demonstrations.--These
    demonstrations are of more mature technology that may be fielded within
    a few years. For example, three systems being installed in the Virginia
    class attack submarine were developed through applied research: the
    Light Weight Wide Aperture Array, the High Frequency Chin Array, and
    the advanced propulsor. Other examples of fiscal year 1998 successes
    include:
      --The Joint Countermine demonstration addresses alternatives for
            combating both mine threats and obstacle barrier systems while
            operating in the littorals--from shallow water through the surf
            zone. Efforts continue to improve mine detection,
            classification, data dissemination, breaching, marking, and
            clearing capabilities.
      --The DNA vaccine demonstration successfully completed the first
            Federal Drug Administration-approved human trials for malaria
            and produced the first successful eradication of Stage 1
            malaria infection.
      --The Reconnaissance, Surveillance, and Targeting Vehicle advanced
            technology demonstration program is a joint effort between the
            Marine Corps and the Defense Advanced Research Projects Agency
            (DARPA) to evaluate light combat land vehicles. It includes
            design, fabrication, and demonstration of two prototype
            tactical vehicles capable of being transported inside the MV-22
            Osprey tilt-rotor aircraft. The design also incorporates hybrid
            electric propulsion, integrated survivability, improved
            mobility, and modular design for mission tailoring.
        Affordability is key to recapitalizing force structure.
    Affordability efforts imbedded in current science and technology
    programs include:
      --Power Electronic Building Blocks (PEBBs). PEBBs may lead the second
            electronic revolution. This new approach to power-handling
            promises new efficiencies and phenomenal power densities at
            reduced costs and production time. A PEBB will replace complex
            power circuits with a single device containing a multifunction
            controller. This will reduce design and development costs for
            complex power circuits and simplify the development and design
            of large electric power systems. PEBBs incorporate sensor-
            driven and software-controlled solid state power controllers
            and high-frequency megawatt power devices. These could be the
            foundation for a future ``all-electric Navy,'' and could
            support multi-platform (submarine, surface ship, aircraft)
            applications for advanced propulsion systems, sensors, passive
            armor, and weapons.
      --The Advanced Lightweight Influence Sweep System lays the groundwork
            for a rapid mine clearance capability in shallow water. The
            system uses new technologies for superconducting magnets and
            spark-gap acoustic arrays. This program is merging with the
            Shallow Water Influence Mine Sweep program to develop a highly
            effective acoustic and magnetic influence sweep capability.
      --The Advanced Enclosed Mast/Sensor encloses major antennas and other
            sensitive equipment to protect them from the weather. This not
            only reduces maintenance costs but also improves radar
            performance by eliminating reflections and blockage associated
            with conventional metallic truss-mast structures. It also will
            help significantly reduce the ship's radar cross section.
    Shipbuilding Technology
        Maritime Technology (MARITECH) is the technology-development
    element of the President's five-part plan to revitalize the U.S.
    shipbuilding industry, and is aimed at improving the design and
    construction processes of U.S. shipyards to compete in world markets.
    MARITECH, funded at approximately $40 million per year, was established
    to run for five years (fiscal year 1993 through fiscal year 1998) and
    was initially managed by DARPA. The Navy will take over MARITECH in
    fiscal year 1999, and the renamed MARITECH Advanced Shipbuilding
    Enterprise (ASE) program will be managed by the Naval Sea Systems
    Command with representation from the Office of Naval Research and the
    Maritime Administration. The mission of MARITECH ASE is to manage and
    focus national shipbuilding research-and-development funding on
    technologies that establish U.S. international shipbuilding
    competitiveness--and further reduce the cost of warships and other
    vessels to the Navy.
        Submarine Technology.--The Virginia class SSN is designed to meet
    the demands of the 21st Century. State-of-the-art technologies designed
    into the Virginia class include enhanced acoustic and non-acoustic
    stealth, integrated combat systems, fiber-optic periscopes, vertical-
    launch Tomahawk missiles, and a simplified nuclear propulsion plant
    with a life-of-the-ship reactor core. The Virginia class design/build
    process incorporates the latest Revolution in Business Affairs concepts
    and includes participation by industry, the shipbuilder, and
    government. The submarine has built-in design and operational
    flexibility through the incorporation of modular construction
    techniques, open systems architecture, and commercial off-the-shelf
    components to facilitate insertion of rapidly evolving technologies. As
    new technologies are developed, for example, electric drive and
    advanced autonomous sensors, they will be incorporated into successive
    Virginia class SSNs to improve capability and reduce total ownership
    cost. Increased capabilities funded for the first four hulls include
    organic mine reconnaissance, stealthy weapons launch, and greater
    target detection capabilities in littoral environments.
        Aircraft Carrier Technology.--The transition to CVNX, the next-
    generation aircraft carrier class, will begin with CVN-77, which will
    have a new integrated combat system with multifunction sensor arrays
    and additional technologies. CVNX-1 and later carriers will have
    increasingly sophisticated technologies for improved capability and
    reduced life-cycle costs, particularly in the area of manpower. CVNX-1
    will have a new nuclear propulsion plant, an advanced electrical power
    distribution system, and an electromagnetic aircraft launching system.
    This will provide immediate life cycle cost reductions and warfighting
    improvements, as well as enabling follow-on technologies for subsequent
    CVNX-class carriers. (Both CVN-77 and CVNX-1 will be based on the
    existing Nimitz hull form.) CVNX-2 is planned to have an improved hull,
    improved crew habitability, survivability enhancements, new functional
    arrangements, distributed systems, an electromagnetic aircraft recovery
    system, and enhanced automation to further reduce manning and life-
    cycle costs.
        Surface Ship Technology.--The Navy's 21st Century Land Attack
    Destroyer, DD-21, is being designed from the keel up to provide support
    for forces ashore. ``Leap-ahead'' capabilities targeted for DD-21
    include advanced major caliber guns, precision weapons, signature
    reduction, seamless joint interoperability, enhanced survivability, and
    reduced manning. DD-21 will incorporate an open system architecture and
    modular design, such that newer subsystems can be incorporated as they
    mature. The Navy expects a significant fuel savings compared to the
    Arleigh Burke class through advanced engineering propulsion systems,
    which may include integrated power systems, fuel-efficient propulsors,
    and new hull designs. Finally, the Navy has established a 95-person
    manning objective for DD-21, which is a 70 percent reduction from Burke
    destroyers. Where possible, the DD-21 program will leverage
    technologies from the Defense Advanced Research Projects Agency, the
    Smart Ship Program, and North Atlantic Treaty Organization (NATO)
    programs on reduced-crew-size concepts.
    Network Technology
        The Department of the Navy's Science and Technology investment
    strategy is addressing the top technology concern of the warfighting
    commanders: battlespace connectivity. This critical issue addresses the
    need to standardize data sharing and usage, network management, common
    formats, information management, and transmission protocols. Specific
    technology challenges that need to be addressed are: Radio Frequency
    (RF) throughput to support Precision Engagement RF throughput to
    support the disadvantaged user, which includes new antenna
    technologies; Compatibility with Low Earth Orbiting (LEO) Commercial
    Satellites; Improved Information Management; Improved Network
    Management; Improved Information Assurance/Network and Security
        Year 2000 (Y2K).--The Department places a high priority on
    addressing the Y2K problem. Efforts are on going to ensure Y2K-
    vulnerable systems are evaluated, tested, and necessary modifications
    implemented before January 1, 2000. As these remediation efforts are
    completed, the Navy and Marine Corps have undertaken a comprehensive
    series of operational evaluations to ensure that interrelated systems
    work together in an operational environment. As an added measure of
    assurance, contingency plans are being formulated. These efforts will
    ensure that combat readiness is maintained, and the Department of the
    Navy transitions seamlessly into the next millennium.
    Acquisition Excellence
        Building on the Federal Acquisition Streamlining Act, the Clinger-
    Cohen Act, and elements of the Department's Revolution in Business
    Affairs, we are aggressively seeking to field technologically superior
    warfighting systems. These keystone programs crucial to the
    effectiveness of tomorrow's naval forces must be affordable in the
    numbers required. As an example, the Navy is pursuing a multi-year
    procurement approach to the F/A-18E/F, which will enable the purchase
    of 222 aircraft for the price of 200 during the next six years. The
    Marine Corps seeks efficiencies by pursuing the most economic buy rate
    for its MV-22 program. We seek comparable opportunities for savings in
    acquisition and life-cycle support in all Navy and Marine Corps
    procurements.
        Acquisition Center of Excellence.--The Department of the Navy
    opened its Acquisition Center of Excellence (ACE) in early 1998,
    demonstrating a firm commitment to address the fundamental changes
    needed to achieve the ``faster, better, cheaper'' objective. The ACE
    was the site for the first-ever acquisition war game, which was focused
    on 21st Century aircraft carrier acquisition strategies. ACE will be
    the principal test bed and development site for simulation-based
    acquisition efforts that are expected to revolutionize design and
    procurement of major systems.
        Marine Corps Materiel Command (MARCORMATCOM).--The Marine Corps
    needed a single-process owner for materiel life cycle management of its
    ground equipment, information systems, and ground weapons systems. The
    Marine Corps Materiel Command stood up on 1 September 1998 at Marine
    Corps Logistics Base, Albany, Georgia, and will be fully operational by
    30 September 1999. MARCORMATCOM will consist of a headquarters element
    and two major subordinate commands, Marine Corps Systems Command
    (MARCORSYSCOM) and Marine Corps Logistics Bases (MARCORLOGBASES). Some
    materiel life cycle management functions of the Deputy Chief of Staff
    for Installations and Logistics (DC/S) will be transferred to
    MARCORMATCOM. MARCORMATCOM's top-level objectives are to reduce
    acquisition and logistics' response time, improve readiness and reduce
    total ownership costs. The Commander of MATCOM will be the single life-
    cycle manager responsible for the focused logistics concept articulated
    in Joint Vision 2010 for Marine Corps ground equipment, information
    systems, and ground weapons systems.
        Acquisition Reform Success Stories.--The broad success of the
    Department's aggressive approach is reflected in four examples
    highlighted here:
      --The Standards Improvement program resulted insignificantly fewer
            military standard specifications in acquisition contracts. It
            gives contractors greater flexibility and improves
            communication and cooperation between program managers and
            industry. Thus far, this has resulted in significantly reduced
            costs throughout individual programs. As an example, the Marine
            Corps's Medium Tactical Vehicle Re-manufacture Program
            streamlined the test and evaluation process and applied the
            principles of specification reform to reduce military
            specifications from 24 to 7. The result was a program savings
            of more than $500K.
      --The F/A-18E/F Super Hornet aircraft acquisition program is on
            budget and schedule, and has met or exceeded all key
            performance parameters. Per plane costs are 12 percent below
            the Congressional unit cost cap, and during operational test
            IIA, it received the best possible rating for operational
            effectiveness and suitability. By the beginning of this year,
            the F/A-18E/F logged over 2,700 flights and 4,000 flight hours
            in developmental testing. It begins Operational Evaluation
            (OPEVAL) in May 1999.
      --The Advanced Amphibious Assault Vehicle (AAAV) program combined the
            best of industry and government management practices to create
            a single, highly effective management team, and applied
            innovative acquisition techniques including Integrated Process
            and Product Development (IPPD), Simulation-Based Acquisition
            (SBA), and Cost-As-An-Independent-Variable (CAIV). This
            implementation of IPPD teams is unique in that the program
            office, the prime contractor, and major subcontractors are co-
            located at the AAAV Technology Center. Acquisition reform and
            the use of state-of-the-art business practices has resulted in
            reducing acquisition cycle time, the elimination of unnecessary
            maintenance actions, and the participation of Marines in every
            design decision. In addition, cost savings of approximately
            $225 million will be realized in production, operating, and
            support while maintaining core mission capability and improving
            system performance.
      --The San Antonio class Amphibious Assault Ship (LPD-17) program was
            initiated under the traditional rules of shipbuilding design
            and development, with the Navy performing the ship's
            preliminary and contract design. When the acquisition process
            was modified to focus on total life cycle cost reduction, the
            Navy elected to re-align the program and embrace the ideals of
            acquisition reform. The program is now operating in an IPPD
            environment and the program office has co-located with the
            contractor.
      --The Virginia class submarine was the first major defense
            acquisition program to apply Integrated Process and Product
            Development methods to complex warship system development. The
            program reduced unique parts from 98,000 to 12,000 and
            implemented many environmental-protection design
            considerations. The sharing of test assets alone will avoid
            more than $4.5 million in operational evaluation testing costs.
        International Acquisition Programs.--The Department uses programs
    such as Foreign Military Sales (FMS), leases, grants, cooperative
    development, technology transfer, and training and education to achieve
    program efficiencies, assist allies, and develop coalition partners.
    Early in the acquisition process, we work to identify cooperative
    research and development programs to help reduce each country's
    production costs for major systems. International programs also
    facilitate standardization and interoperability. Examples include:
      --The Joint Strike Fighter program will develop and field a family of
            next-generation strike aircraft with an emphasis on
            affordability and warfighting capabilities for the 21st-Century
            combat environment. The joint-service approach to development
            of this aircraft will pool resources and provide opportunities
            for savings. Allied participation in the concept-demonstration
            phase will provide additional economies of scale.
      --The NATO Sea Sparrow program, now amounting to more than 180 ship
            installations, is the largest and longest-running NATO
            cooperative program to date. Ten countries now participate in a
            collaborative development program called the Evolved Sea
            Sparrow Missile (ESSM). Through allied cooperation, the United
            States saved $153 million in development costs for ESSM, which
            starts testing in 1999.
      --The Rolling Airframe Missile (RAM) is another NATO program
            developed by the U.S. and Germany. RAM is a lightweight, low-
            cost, fire-and-forget missile system installed in more than 50
            U.S. and German ships. An upgrade to the RAM missile completes
            operational testing and enters production in 1999.
      --The Improved Submarine-Launched Mobile Mine (ISLMM) is an
            international mine warfare project between the U.S. and the
            Royal Australian Navies. Development of the ISLMM will provide
            the covert capability to establish distant offensive and
            defensive undersea minefields.
    National Partnership for Reinventing (NPR) Government
        In January 1997, the President issued a challenge to the Executive
    Agencies and Departments to implement the Government Performance and
    Results Act (GPRA). The vision of National Partnership for Reinventing
    Government is to create a government that works better and costs less
    based on the four principles of: (1) putting customers first; (2)
    cutting red tape; (3) empowering employees; and (4) getting back to the
    basics. In July 1997, the Vice President approved 12 three-year
    acquisition goals for the Department of Defense. These goals address
    the acquisition system, program management, financial management,
    logistics, and property management. The Department of the Navy has
    already achieved four of these goals by the end of fiscal year 1998:
    Reduced major defense acquisition program cycle time by 25 percent;
    Increased micro-purchases by purchase card to 90 percent of
    transactions; Reduced toxic material releases by 20 percent and Managed
    major defense acquisition program cost growth to no greater than 1
    percent per annum
        In addition, the Department of the Navy achieved its 1998 annual
    targets in support of Year 2000 goals: Increased Total Asset Visibility
    to 90 percent while reducing logistics response time by 50 percent;
    Eliminated layers of management through streamlined processes while
    reducing the acquisition-related workforce by 15 percent; and Disposed
    of $3 billion in excess property while reducing supply inventories by
    20 percent.
        Significant progress also was made in implementing other Year 2000
    goals, including training the acquisition-related workforce, increasing
    the procurement budget, reducing paper transactions, and implementing
    Activity-Based Costing (ABC) for weapons systems.
    Streamlining Infrastructure
        Base Realignment and Closure (BRAC).--As a result of the four
    rounds of BRAC reviews, the Department of the Navy ultimately will
    close or realign 178 Navy and Marine Corps bases. These closures will
    bring the size of the Department's shore infrastructure more in line
    with its operating force structure. The Department's investment in BRAC
    will result in a $5.6 billion reduction in the Navy's operating budget
    through the year 2001 and $2.6 billion per year thereafter. The Navy's
    strategy has been to reach operational closure quickly, then complete
    cleanup and dispose of the property in support of local redevelopment
    efforts. In 1999, 11 additional closures will be added to the 162
    closures or realignments already completed.
        Of the 178 BRAC-related actions, 135 are closures, but only 91
    require disposal of property. To date, 38 disposals have been
    completed, representing more than 40 percent of the closure sites. By
    the end of fiscal year 1999, 67 percent of the disposals will be
    completed. At the end of the base closure program, the Navy will have
    reduced its property inventory by approximately 163,000 acres. The Navy
    has executed 100 leases at closing bases prior to disposal of the
    property to assist local redevelopment efforts. Also, the Department of
    the Navy is pursuing several opportunities for early conveyance of base
    closure property, which, by statute, permits BRAC property to be
    conveyed before the cleanup remedy is completed.
        After $400 million in construction, MCAF Tustin and MCAS El Toro
    finish the relocation of units to the newly designated MCAS Miramar and
    other air stations by July of this year. The relocation of Marine Corps
    assets to Miramar from El Toro, although a single BRAC action,
    represents 10 percent of the construction budget for all BRAC rounds.
    Disposal of the air stations at Tustin and El Toro is dependent upon
    reuse decisions involving the local communities. These have been slower
    than anticipated, thus delaying the realization of savings as we
    continue to maintain this infrastructure in a caretaker status. Timely
    and equitable resolution of these reuse issues remain a high priority
    within the Department.
        In spite of these accomplishments, reductions in the Navy's
    infrastructure did not keep pace with reductions in force structure.
    While the number of ships and Sailors were reduced by 40 percent and 30
    percent respectively since 1988, the Navy's infrastructure decreased by
    only 17 percent. Additional BRAC rounds are critical to support the
    Secretary of Defense's Quadrennial Defense Review strategy and to
    achieve the objectives of the Joint Staff's Joint Vision 2010.
        Real Property Maintenance.--Ships, aircraft, and weapon systems are
    kept ready through planned maintenance and modernization programs. The
    Navy's piers, runways, buildings, structures, and utilities are equally
    important assets that must be given a similar level of commitment,
    concern, and fiscal support. The Department's focus on real property
    maintenance must be increased to ensure that facilities can support the
    fleet and the growth in the critical backlog of maintenance and repair
    can be reversed. The Navy's critical backlog of maintenance and repair
    (BMAR) is currently $2.4 billion and expected to exceed $2.9 billion by
    fiscal year 2003. Approximately $1.3 billion per year (as compared to
    $961 million in fiscal year 1999) is required to arrest the growth in
    BMAR and attain C\2\ readiness levels for all mission essential
    facilities by the end of the FYDP. Of particular concern are aging
    piers and runways, which require substantial attention in the near-
    term. In addition to its operational facilities, the Department of the
    Navy is also concerned with improving support facilities affecting the
    quality of life of Marines and Sailors. The Marine Corps is making a
    significant investment in repairs of barracks between now and 2004 in
    order to have all barracks in good physical condition. The Marine Corps
    is also taking aggressive stance in demolishing excess facilities to
    help reduce operating costs. Theseinitiatives must be part of a long-
    term funding effort to recapitalize Navy's infrastructure and meet the
    needs of tomorrow's more sophisticated and complex ships, submarines,
    and aircraft.
        Naval Infrastructure Cost Reduction Initiatives.--The Navy has
    developed an infrastructure reduction business plan that pursues
    innovative approaches to reduce infrastructure costs and will provide
    savings that can be allocated to critical modernization and
    recapitalization needs. These initiatives include implementing the
    Office of Management and Budget Circular A-76, business process re-
    engineering, and activity-based costing. Regionalization reduces Base
    Operating Support costs, streamlines administration, and eliminates
    redundant functions. Regionalization also intends to improve use of the
    work force to develop more efficient organizations, produce
    opportunities for regional public/private competition, standardize
    processes, and facilitate interoperability and regional planning. As
    regional installation management organizations are created, Base
    Operating Support resources and responsibilities will transfer to a
    single major claimant, which will permit other claimants to concentrate
    on their primary missions.
        The Marine Corps' primary challenge for infrastructure reduction is
    the elimination of outdated, inefficient, and deteriorated structures.
    We are aggressively identifying and demolishing any facilities where
    installations cannot identify hard requirements. This allows the Marine
    Corps to concentrate scarce maintenance and repair dollars on
    maintaining higher value facilities. As excess plants are identified,
    they will be destroyed. The current 1999 plan is to eliminate 600,000
    square feet of unused infrastructure which will amount to 0.5 percent
    of total Marine Corps inventory.
        Civilian Human Resources Regionalization and Systems
    Modernization.--The Department of the Navy is streamlining the civilian
    human resources (HR) function to meet the objectives of the National
    Performance Review and Department of Defense mandates for
    regionalization and information systems modernization. Approximately 60
    percent of the Department HR functions are being realigned to eight
    Human Resources Service Centers. Regionalization and systems
    modernization are expected to return $148 million for reallocation
    between fiscal year 1997-2003. After fiscal year 2003, savings are
    projected to exceed $40 million dollars per year.
        Smart Base.--The Navy's Smart Base Project Office solicits
    industry, academia, and government agencies for innovative, state-of-
    the-market technologies and business practices to boost shore
    installation efficiency. Two key enablers are the Smart Link and Smart
    Card. Smart Link established a state-of-the-market, wide-area network
    of major Navy installations. Planned to provide connectivity to 300
    sites at completion, Smart Link in early 1999 provides voice, video,
    and data to more than 80 sites on the Navy's Intranet, at significant
    savings. The Navy Smart Card Project starts at the Great Lakes Recruit
    Training Center. This computer-chip card is issued to each recruit to
    facilitate laborious administrative processes. Significant cost is
    already being saved, with a clear potential for additional savings as
    more applications are introduced. In fiscal year 1999, the Smart Base
    Project will partner with fleet commanders, major claimants, and
    regional commanders to test new cost-saving projects and begin
    implementation of the resulting initiatives.
        Regionalization.--The Navy's restructuring efforts use state-of-
    the-market business practices and technologies for installation
    management. Navy installations within a region will no longer be
    operated as independent entities, but as an integrated organization
    using the best business practices. As functional management is
    consolidated and redundant overhead eliminated, additional
    opportunities for demolition, outlease, or alternative use of
    underutilized facilities will become apparent. The creation of Navy
    Regional Commanders allows the Navy to take advantage of these
    opportunities quickly.
    The Environment
        The Department continues its active program for environmental
    compliance and stewardship. Most importantly, the Navy is focused on
    achieving substantial progress in shipboard pollution control. The
    Department of the Navy and the Environmental Protection Agency (EPA)
    published the first set of regulations to establish uniform national
    discharge standards for warships and other vessels. This initiative is
    being developed in partnership with EPA, the Coast Guard, and the
    National Oceanic and Atmospheric Administration, in consultation with
    coastal states.
        Plastic waste processors, designed to eliminate the disposal of
    plastic trash at sea, will be installed as required by the Act to
    Prevent Pollution from Ships. Procurement and installation of other
    required solid waste processing equipment for ships are also on track.
    Also, approximately 500 shipboard air-conditioning and refrigeration
    plants were converted from chlorofluorocarbon-12 (CFC-12) to non-CFC
    plants. The first CFC-114 air-conditioning plant conversion is underway
    in Normandy (CG-60).
        Ashore, the Department's active Pollution Prevention Program
    assists installations to meet environmental requirements. Pollution
    prevention technologies also improve occupational safety, increase
    productivity, and reduce operations and maintenance costs. Pollution
    prevention measures helped reduce toxic releases by 51 percent from the
    1994 baseline.
        The Department's environmental team is effectively carrying out the
    President's five-point program for base reutilization. The Department
    has confirmed that more than 70 percent of the property at closing
    bases is environmentally suitable for transfer, with community reuse
    plans fully considered in cleanup decisions.
        The Department has aggressively searched our installations for
    potentially contaminated land sites and identified nearly 4,500 sites.
    Since 1996, over 1,100 sites had necessary actions taken bringing the
    total sites completed to 2,175, or 48 percent. By the end of 2,001,
    action will be complete at 64 percent of the sites at active bases and
    90 percent of the sites at closed bases. Since 1996, the Department was
    able to reduce the cleanup program cost-to-complete estimate by more
    than $1 billion using new cleanup technologies, better site
    characterizations, and more realistic risk assessments.
        Likewise, the Marine Corps takes its environmental responsibilities
    seriously. It has instituted the Pollution prevention Approach to
    Compliance Efforts (PACE) program, which requires installations to
    evaluate their environmental compliance on a continuing basis. In fact,
    during 1998, the Marine Corps paid more for environmental compliance
    than it did for formal schools training. For example, MCAS Beaufort
    instituted a demodexing/modexing process using vinyl film rather than
    paint for aircraft lettering and markings. This process reduced
    aircraft downtime by an average of one day, reduced hazardous waste
    generation by 90 percent, and saved $35 thousand in labor and materials
    per year. Innovations such as these will continue to ensure that the
    Department is a leader in integrating environmental stewardship in
    business affairs.
        The Department continues to pursue research and development on
    technologies to meet environmental requirements most efficiently. This
    research has recently focused on marine mammal protection, contaminated
    site cleanup, hull paints/coatings, and facilitating full integration
    of life-cycle environmental protection into the design, engineering,
    and acquisition of weapons systems. Indeed, environmental planning is
    now an essential ingredient of acquisition efforts. Environmental
    considerations are weighed when acquiring weapon systems and platforms
    and are carefully monitored throughout each program's life cycle. We
    are finding substantial opportunities for good business decisions and
    cost savings by this practice.
        Several specific goals of the National Performance Review have
    strong environmental components. The Department is pursuing specific
    goals for a 20 percent reduction in toxic emissions releases and
    electronic replacement of paper-intensive procedures. These serve both
    the environment and help to reduce the costs of doing business.
                            technology for tomorrow
        The Navy and Marine Corps' strategic concepts papers . . . From the
    Sea and Forward . . . From The Sea sharpened the focus of naval forces
    to emphasize operations in the littorals and the requirement to project
    decisive power and directly influence actions ashore--anywhere,
    anytime. Events of the past decade demonstrate that naval forces must
    be prepared to confront a variety of threats while executing diverse
    missions--ranging from peacekeeping and disaster relief to combat
    operations. Absent the superpower stability of the Cold War, several
    regions are more prone to violence and conflict, underscoring the need
    for highly effective and credible forces to protect vital interests.
    Moreover, as recent crisis and conflict make clear, naval forces are an
    essential tool of statecraft.
        America's naval forces must meet the diverse challenges of today
    and the ambiguous threats of tomorrow by addressing strategic and
    doctrinal constructs, by preparing for nontraditional and even
    unconventional warfare, and by harnessing the power of the latest
    technology. Littoral operations in a complex, confined battlespace
    place naval forces at greater risk from enemy submarines, sea mines,
    and cruise missiles than open-ocean scenarios. Many regional powers can
    purchase systems, including weapons of mass destruction, virtually off-
    the-shelf. Countering these weapons, and their associated command-and-
    control nodes, presents a continuous challenge to Navy and Marine Corps
    maritime dominance in the littorals.
        Three areas of especially rapid technological growth--sensor
    technology, computer processing capability, and long-range precision
    guided weapons--are vital factors in maintaining our current
    unparalleled offensive capability. Together, these factors provide the
    means for a significant increase in the ability of naval forces to find
    and exploit enemy vulnerabilities, and to project significant power
    precisely and accurately to all but a small fraction of the world's
    surface.
    Leveraging Our Technology
        Our ability to execute the functional characteristics of naval
    forces--naval fires, naval maneuver, cooperative protection, and
    sustainment--and the Marine Corps' application of Operational Maneuver
    from the Sea (OMFTS) are essential to the success of future joint and
    combined campaigns. These primary operational elements parallel the
    four tenets of Joint Vision 2010: Dominant Maneuver, Precision
    Engagement, Full Dimension Protection and Focused Logistics. They frame
    the way force structure, employment policies, and tactics are
    developed. Further, they define how naval forces perform in support of
    national military objectives. Depending upon the particular mix of
    these capabilities, naval forces provide joint task force commanders
    and unified commanders-in-chief a flexible set of tools useful across
    the full spectrum of conflict.
        Naval fires define what previously was called strike operations. It
    includes the networked use of sensors, information systems, responsive
    command and control systems, precisely targeted weapons, and agile,
    lethal forces to achieve desired effects, assess damage, and reengage
    when required. Naval fires range from Marine mortars and artillery to
    conventional land-attack cruise missiles. The capability to precisely
    attack land targets with a variety of weaponry is core to sea-based
    forces' ability to hold at risk and dominate an adversary's military,
    political, and economic centers of gravity.
        Naval maneuver is the coordinated use of mobile sea-based forces to
    gain advantage on or from the sea. Using the sea as maneuver space,
    naval forces, equipped with advanced amphibious capabilities, can
    strike anywhere in the littoral region and deliver a decisive blow to
    an adversary's centers of gravity. Future networked naval forces,
    sharing a common operational picture, will exploit enemy weaknesses.
    Networked naval forces will maximize self-synchronization and achieve
    mass effects, without the need to mass forces off shore. In addition,
    naval forces will concentrate fires from widely separated locations at
    speeds adversaries cannot match. As such, naval maneuver exploits
    several principles of war simultaneously.
        Cooperative protection is the control of the battlespace to ensure
    that joint and combined forces maintain freedom of action during
    deployment, maneuver, and engagement, while defending those forces and
    facilities. As the defensive aspect of sea and area control,
    cooperative protection requires more than self-defense; it also
    integrates force-protection extending throughout area and theater
    defense of naval forces and assets on land. The Navy is developing the
    maritime pieces of a cooperative protection capability with Joint
    Theater Air and Missile Defense and Cooperative Engagement Capability.
    Enhanced situational awareness, coupled with shared, real-time
    targeting information, makes possible a stronger, more complete defense
    than could be provided by any single system or unit.
        Sustainment is the delivery of tailored and focused support and
    logistics from the sea across the spectrum of crisis-response and
    conflict. Sustainment is more than logistics. For high-tempo operations
    to succeed as envisioned in OMFTS and the complementary Ship-to-
    Objective Maneuver (STOM) concept, sea-based sustainment must support
    and work in harmony with naval fires, naval maneuver, and cooperative
    protection. OMFTS forces traveling lighter and faster will carry less
    logistic support organically and depend upon sea-based resources.
        Sealift is a critical enabler for joint ground and air components
    ashore. As recently as Desert Storm, over 90 percent of all material
    transferred into theater, for all U.S. forces, arrived by sea. Joint
    warfighting forces will continue to depend heavily on prepositioned and
    surge sealift assets for sustainment during a conflict.
        The Navy invests heavily in building a fleet of support ships to
    sustain all aspects of a conflict. For instance, 13 Maritime
    Prepositioning Ships (MPS), divided into three squadrons, support the
    Marine Corps. Each squadron carries equipment and supplies to support a
    notional MAGTF of up to 17,000 Marines and Sailors for 30 days of
    combat. A Maritime Prepositioning Force Enhancement program (MPF-E) is
    underway which will add one ship to each squadron.
        The Navy also supports a fleet of ships to preposition equipment
    for an Army brigade. This fleet includes a variety of ships with
    specialized capabilities, such as self-sustaining container ships,
    barge-carrying ships, float-on/float-off ships, crane ships, and roll-
    on/roll-off ships. A third fleet of prepositioned vessels is located in
    key locations with fuel and ammunition for the U.S. Air Force, as well
    as supplies for a fleet hospital. Finally, strategically located near
    U.S. ports of embarkation are eight Fast Sealift Ships (FSS) to provide
    the initial surge lift capability needed to transport tanks and other
    heavy tactical equipment early in a conflict. A new-construction/
    conversion program for 19 Large Medium Speed Roll-on/Roll-off (LMSRs)
    ships will be completed by 2002 to augment the eight FSS for these
    missions.
        A final sealift option exists in a unique business arrangement--the
    Voluntary Intermodal Service Agreement (VISA)--which guarantees the
    Department of Defense priority access to the worldwide container
    distribution system in return for annual subsidy payments to U.S. flag
    companies. This arrangement ensures the capability to move massive
    amounts of cargo needed to sustain a war effort is available.
    Advanced Naval Maneuver Concepts
        The Marine Corps' OMFTS presents a new approach to amphibious,
    expeditionary, and littoral operations. OMFTS capitalizes on the
    advantages inherent in seaborne maneuver and the flexibility provided
    by sea-based command and control, fires, aviation and logistics. It
    couples amphibious and maneuver warfare with technological advances in
    speed, mobility, fire support, communications, and navigation. These
    advantages allow naval forces to identify and rapidly exploit enemy
    vulnerabilities. Most significantly, the sea-based character of future
    MAGTFs and logistics/support ships and bases will allow them--in most
    cases--to be the first to reach a crisis area. This also enables them
    to remain at sea nearby, as a crisis develops--free from dependency
    upon land bases.
        Meeting the military challenges of the next century will require
    innovation, experimentation, and change--grappling with the realities
    of chemical and biological warfare and tackling the difficulties
    inherent in modern warfare, especially in urban terrain. It means
    finding solutions to challenges using both technology and new
    approaches in doctrine, organization, tactics, and training. It also
    means developing a transformation strategy to maximize opportunities
    created by rapid technological advances. Using OMFTS as a roadmap to
    the future, the Marine Corps developed a series of supporting
    warfighting concepts to complement their core competencies.
        Ship-to-Objective Maneuver focuses on the tactical level of
    amphibious operations, eliminating the operational pause at the beach
    during ship-to-shore movement and subsequent maneuver ashore. Sustained
    Operations Ashore describes how naval forces, even in long-duration
    campaigns, will capitalize on their sea-based character to reduce their
    vulnerable footprint ashore, while conducting effective military
    operations. Maritime Prepositioning Force (MPF) 2010 and Beyond
    outlines capabilities required to enhance MPF operations to fully
    support OMFTS.
        Another critical concept is Beyond C\2\: Comprehensive Command and
    Coordination of the MAGTF. It attempts to move future commanders away
    from technology-induced ``mechanistic control'' and toward the
    fundamental exercise of command. Through the principles of adaptive
    learning, implicit communications, mutual understanding, and intuitive
    decisionmaking, Beyond C\2\ focuses on the powerful positive aspects of
    human interaction that foster creative problem-solving. Additionally,
    access to a worldwide command information architecture will provide
    forward deployed situational awareness. Through an in-depth examination
    of technology and the functions of command, Beyond C\2\ explores the
    coordination of the intellectual and material power of the military,
    business entities, academia, other government agencies, and non-
    government organizations to address the challenges of the 21st Century.
    Beyond C\2\ improves upon the MAGTF's ability to serve as a ``JTF
    Enabler'' for large coalitions or follow-on forces.
        Finally, the Marine Corps Combat Development Command (MCCDC) and
    the Navy Warfare Development Command (NWDC) jointly addressed two of
    the most difficult problems facing naval forces in future maritime
    campaigns: the threat of naval mines and sustainment from the sea. Two
    concept papers, Future Mine Countermeasures in Littoral Power
    Projection and Sea-Based Logistics, establish a foundation for the
    Navy-Marine Corps team to take on these challenges. Collectively, these
    publications define future battlespace and the capabilities that are
    needed to win in it.
    Navy Warfare Technologies
        Recognizing the challenges of tomorrow along with advances in
    technology, the Navy is investing its resources in five specific
    warfare areas: Network Centric Warfare, Land Attack, Theater Ballistic
    Missile Defense, Mine Warfare, and Anti-Submarine Warfare.
        Network Centric Warfare (NCW).--The culture of a networked world
    society will make the Navy of the 21st Century unrecognizable from
    today's. At the end of 1998, according to one published account, 900
    million voice-mail messages were exchanged each day, 5 million e-mails
    were sent each minute, Internet traffic was doubling every 100 days,
    and there were 27 million new cellular phone subscribers (285 million
    in all worldwide).
        As we continue to navigate the uncharted waters of this new era,
    the Navy and Marine Corps need to harness technology and accept the
    resulting cultural changes to remain the world's pre-eminent naval
    force. To accomplish this will take at least the following: (1) the
    installation of reliable, robust and secure information infrastructure
    with well-managed bandwidth, spectrum, and information flow (PCs, LANs,
    switches, RF link, and landlines); (2) the effective organization of
    naval information; and (3) fundamentally changing our information-based
    warfighting practices.
        Central to every aspect of the Navy's future operations, NCW
    derives its power from the reliable and ubiquitous networking of well-
    informed, geographically dispersed forces. A multi-sensor information
    grid will provide all commanders access to essential data, sensors,
    command-and-control systems, and weapons. This easily accessible open
    network will support rapid data flow among the sensor, command-and-
    control, and shooter grids. The first steps toward meeting this
    requirement include implementation of Information Technology for the
    21st Century (IT-21), the Navy-Wide Intranet (NWI), and the sensor
    netting technology of the Cooperative Engagement Capability (CEC).
        Superior knowledge is a powerful advantage in a conflict and is a
    prerequisite for victory. NCW will change U.S. warfighting
    fundamentally, by employing information technology as a force
    multiplier. It will facilitate the penetration, disruption, denial, and
    deception of the adversary's information processes, while providing
    friendly forces a superior understanding of complex operations. NCW
    will provide accurate and timely shared situational awareness that
    allows dispersed forces to coordinate actions and respond rapidly to
    emerging threats and opportunities within the theater of operations.
        Land Attack.--Precision land-attack operations conducted by
    carrier-based aircraft, land-attack surface warships, and attack
    submarines will provide massive, sustainable fires from the sea. High-
    intensity sea-based firepower will allow forces ashore to achieve
    critical objectives quickly and permit the flow of heavy follow-on
    forces within desired timelines.
        In the early years of the 21st Century, the Navy will use F/A-18E/F
    Super Hornets, advanced Joint Strike Fighters, and variants of the
    Tomahawk land-attack cruise missile to deliver devastating long-range
    precision strikes. In that same timeframe, the Navy will provide high-
    volume fires from 5-inch/62-caliber guns firing extended-range guided
    munitions (ERGMs). Targeting will be achieved with a Naval Fires
    Control System that operates seamlessly with joint fire support
    systems. In addition, the Navy is using new production methods and
    modular design techniques to develop a new variant of the Tomahawk
    missile. The new program will preserve long-range precision strike
    capability while significantly increasing Tomahawk's responsiveness and
    flexibility.
        Providing sustained, sea-based precision firepower guarantees the
    benefits of effective massed fires without the need to mass forces
    physically. The long reach of precision guided weapons adds a new
    dimension in the ways the Navy can affect conflict ashore. In short,
    the 21st Century Navy will be equipped to deliver offensive distributed
    firepower from long range for extended periods, with reduced risk.
        Theater Ballistic Missile Defense (TBMD).--Recent events emphasize
    the growing need for a theater ballistic missile defense (TBMD).
    Pakistan's test of the medium-range Ghauri ballistic missile, North
    Korea's test of a three-stage, solid fueled Taepo Dong missile, and
    Iran's test of the medium-range Shahab-3 underscored the compelling
    requirement for an effective, forward deployed TBMD capability. Today,
    more than 20 nations have a ballistic missile or cruise missile
    capability. In addition, 20 nations have, or are thought to be
    developing, nuclear, chemical, or biological weapons. The Navy is
    attempting to leverage the impressive power of the Aegis cruiser-
    destroyer force in ways that will provide safety and sanctuary for U.S.
    and allied troops. Through the power of the Aegis SPY radar and the
    capabilities of the Standard Missile (SM-2), the Navy is working to
    provide a reliable theater missile defense network that will act as a
    protective umbrella for operations in most scenarios.
        The mission of the Navy's Area TBMD system is to provide U.S. and
    allied forces, as well as areas of vital national interest, defense
    against TBMs. Rapid deployability of Navy TBMD reduces the requirement
    for airlift to be devoted to TBMD forces in the opening days of a
    crisis. This permits using scarce airlift resources to transport
    aircraft squadron logistics, anti-armor, and troops to deter or stop a
    conflict. Finally, Navy Area TBMD takes advantage of the inherent
    flexibility and mobility of naval forces to provide defense against
    ballistic missiles without reliance on host-nation permission or
    support.
        The Navy Theater Wide (NTW) effort evolves from the Navy Area TBMD
    Program and consists of modifications to the Aegis weapon system and
    the integration of the Lightweight Exoatmospheric Projectile (LEAP)
    with a three-stage SM-2 Block IV missile. The NTW system will be
    capable of high-altitude exoatmospheric intercepts of medium- and
    longer-range TBMs. The near term development approach includes nine
    Aegis-LEAP intercept tests from 1998 to 2000 and parallel risk-
    reduction activities in preparation for engineering development.
        Necessary to winning any littoral conflict is securing control of
    the air. The Navy is developing an afloat Area Air Defense Commander
    (AADC) system to support sea-based theater battlespace management. AADC
    will support the joint commander in conducting near-real-time, area-
    wide air defense planning in support of joint operations. Using
    commercial, off-the-shelf hardware, a prototype is capable of executing
    56 billion instructions per second. This computing power enables the
    testing of alternative air defense plans to support the commander with
    the very best disposition of air defense forces. The use of three-
    dimensional symbology in tactical displays provides unprecedented
    situational awareness to the embarked joint commander and staff. A
    prototype will be installed in USS Shiloh (CG-67) in early 1999 for at-
    sea testing. An Initial Operational Capability (IOC) is anticipated in
    fiscal year 2001. Twelve Aegis cruisers will be outfitted with this
    capability between fiscal year 2004 and fiscal year 2007, in accordance
    with the Cruiser Modernization Program.
        Mine Warfare.--The Department of the Navy is investing now to equip
    carrier battle groups and amphibious ready groups with organic
    minehunting and mine-clearance capabilities. Variants of the H-60
    helicopter will carry minehunting sensors and neutralization gear such
    as the Airborne Laser Mine Detection System, the Shallow Water
    Influence Mine Sweeping System, and the Airborne Mine Neutralization
    System. Instead of waiting for dedicated mine-warfare assets on
    station, the commander will have mine detection and avoidance systems
    at his disposal. The tactical information and tools needed to allow
    freedom of action and dominant maneuver of his force in the face of a
    dangerous, cheaply deployed mine threat will now be on station. The
    ultimate goal of deploying organic mine warfare systems is to extend
    maritime domination into the littorals by minimizing the effectiveness
    of the most asymmetric and prevalent sea threat there, the sea mine.
        The Navy's Underwater Unmanned Vehicle (UUV) program has focused on
    developing a Near-Term Mine Reconnaissance System (NRMS) for Los
    Angeles class submarines. The NRMS will provide limited, stopgap
    operational capability to conduct clandestine mine reconnaissance.
    Subsequently, a Long Range Mine Reconnaissance System (LMRS), which
    will replace NMRS, will fully meet the requirements to conduct
    clandestine mine reconnaissance from submarines.
        Anti-Submarine Warfare (ASW).--ASW is essential to sea control and
    maritime dominance. As such, it is a critical element in attaining
    joint objectives from the sea. Many nations can employ submarines to
    deny access to forward regions or significantly delay the execution of
    operations plans. Because of its inherent stealth, lethality, and
    affordability, the submarine is a powerful counter to an adversary's
    surveillance and targeting systems that increasingly will hold surface
    assets at risk. Although the worldwide inventory of submarines has
    declined, their quality and lethality have improved dramatically.
        The Navy is sustaining efforts to counter our adversaries'
    submarines. A key requirement is an architecture that can maximize
    commonality among all ASW platforms for both effectiveness and
    affordability. Multi-static active detection systems will employ
    advanced processing and leverage legacy ASW systems. The use of rapidly
    deployable, distributed arrays, like that being developed in the
    Advanced Deployable System program, will provide wide-area deployable
    shallow water undersea surveillance in the complex littoral
    environment. The Lightweight Hybrid Torpedo for surface and air ASW
    forces and the CBASS upgrade to the Advanced Capability torpedo (ADCAP)
    for submarines will offer the Navy improved weapon effectiveness
    against littoral submarine targets and countermeasures. In this regard,
    the Virginia class attack submarine is designed for multi-mission
    operations, but will have a level of stealth unsurpassed by any other
    submarine currently in operation or under development.
        These are just a few of the programs, augmented by sustained and
    focused research-and-development efforts that will ensure our continued
    undersea warfare superiority against a continually evolving submarine
    threat.
        Naval forces use space systems to support tactical warfighting
    needs, including communications, reconnaissance, surveillance,
    targeting, battle damage assessment, navigation, and environmental
    monitoring. This tactical focus characterizes naval efforts in space.
    Our maritime forces, operating in accordance with strategies and
    tactics which emphasize maneuverability and joint operations tailored
    to national needs, and operating forward, from the sea, necessitate
    naval dependence upon space-based support.
    Marine Corps Core Competencies
        MAGTF operations are built upon a foundation of six special core
    competencies. The direct result of more than 223 years of expeditionary
    experience, these six core competencies define the essence of the
    unique Marine institutional culture as well as their role within the
    national military establishment. Core competencies are developed from
    inherent Marine missions, such as expeditionary amphibious operations,
    and drive Marines to develop specific sets of skills while executing
    special missions roles and missions.
        The first core competency, expeditionary readiness, defines an
    institution ready to respond instantaneously to world-wide crises,
    every day. This requires a force that can transition from peacetime to
    combat operations at a moment's notice, and achieve certain success
    without critical Reserve augmentation. It also demands a force that can
    flourish under adverse conditions and in ambiguous conflict
    environments. Finally, it means being ready to defeat the opponent-
    after-next, which can be achieved only through continued investment in
    experimentation, adaptation, and change.
        The second core competency is combined-arms operations. The MAGTF
    requires an organic, combined-arms capability. For half a century,
    MAGTFs have been organized, trained, and equipped to ensure that their
    ground combat, air combat, and combat service support capabilities
    would be directed by a single commander.
        Expeditionary operations, the third core competency, is primarily a
    special mind set--one that ensures that Marines will be prepared for
    immediate deployment overseas into austere operating environments.
        The fourth core competency, sea-based operations, provides
    extraordinary strategic reach, and gives the nation an enduring means
    to influence and shape the evolving international environment. An
    appropriately prepared and equipped combined-arms MAGTF, operating from
    a mobile, protected seabase, provides the National Command Authorities
    with unimpeded and politically unencumbered access to potential trouble
    spots around the globe.
        The Marines are best known for their fifth core competency,
    forcible entry. In the past, forcible entry from the sea was defined as
    amphibious assaults, establishing lodgments on the beach and then
    building up combat power ashore for subsequent operations. It is now
    defined as an uninterupted movement of forces from ships located over
    the horizon directly against decisive objectives.
        The sixth core competency of reserve integration captures the
    practice of augmenting and reinforcing active component units with the
    Marine Reserve in crisis-response missions and adding to combat power
    for sustained operations. All Marines are combat-ready, and the
    integration of Reserve elements into the active duty force structure
    ensures that the phrase ``Total Force'' is not a hollow boast.
        These core competencies are not honed to perfection without
    relevant and applicable concepts, and concepts cannot be realized
    without mutually reinforcing warfighing assets. By modernizing and
    tailoring the amphibious fleet, over-the-horizon launch platforms will
    be provided to support the MV-22 Osprey aircraft, the short-takeoff and
    vertical-landing (STOVL) variant of the Joint Strike Fighter, the
    Advanced Amphibious Assault Vehicle, and the already proven Landing
    Craft Air-Cushion. The following program elements are essential to the
    Marine Corps' future ability to execute Operational Manuever From the
    Sea and Ship-to-Objective Maneuver.
        Sea-Based Forcible-Entry Operations.--The MV-22 Osprey remains the
    Marine Corps' highest aviation acquisition priority and is necessary to
    conduct sea-based forcible entry operations. Recognizing the huge
    operational advantages of this aircraft, the Marines have long
    championed the development of tilt-rotor technology. The development of
    the MV-22 compares with earlier technological breakthroughs associated
    with the first helicopter and the first jet engine, and gives the
    Marine Corps the range to cover a much greater expanse of the littorals
    from the sea. The MV-22 flies significantly farther, faster, and with
    greater payloads than the current fleet of aging medium lift CH-46E/CH-
    53D helicopters.
        This combat multiplier allows Marines to strike rapidly at
    objectives located deep inland. It provides Navy ships adequate stand-
    off distance to defend against shore-based missiles, sea mines, and
    other asymmetric threats, and also delays detection of the striking
    force. Initial operational capability for the Osprey is expected to
    occur in fiscal year 2001.
        Amphibious Modernization Program.--The amphibious lift
    modernization plan also supports Marine Corps core competencies. The
    program is focused on the formation of the 12 Amphibious Ready Groups
    (ARGs) needed to meet the nation's forward-presence and contingency
    response requirements, and it supports the lifting equivalent of 2.5
    Marine Expeditionary Brigades in wartime. The plan shapes the future
    amphibious force with the optimum number and type of ships required for
    a flexible and adaptive combined-arms crisis-response capability.
    Ultimately, the amphibious force will consist of 12 LHA/Ds (Tarawa and
    Wasp classes), 12 LPD-17s (San Antonio class), and 12 LSD-41/49s
    (Whidbey Island and Harpers Ferry class), capable of forming 12 ARGs or
    operating independently in a ``split-ARG'' concept of operations.
        The San Antonio class (LPD-17) is a critical link in attaining the
    goal of a modern 12-ARG amphibious force. The LPD-17 will be a
    significant improvement in ameliorating current vehicle stowage
    shortfalls and meeting other MAGTF lift requirements. The LPD-17 will
    carry 700 embarked troops and two LCACs, while providing 25,000 square
    feet of vehicle stowage space, 36,000 cubic feet of cargo space and the
    capacity to accommodate four CH-46 helicopter or a mix of the other
    rotary wing Marine aircraft. The LPD-17 will have a robust
    communications network including narrow- and wide-band satellite
    communications and the ability to connect directly to the Tactical
    Telephone System used by ground units ashore via the Switch Multiplexer
    Unit (SMU). The LPD-17's communication suite will provide multiple
    pathways to and from the theater while the ARG is combined and
    similarly mirror communications capabilities in the ``split-ARG'' mode.
        The Tarawa class LHAs will begin to reach the end of their expected
    service life in 2011. A Development of Options Study (DOS) conducted by
    the Center for Naval Analyses (CNA) is underway to determine the best
    course of action to preserve the land attack and sea control/power
    projection missions of our large deck amphibious ships. There are three
    alternatives being considered: (a) LHA service life extension; (b)
    modification of the Wasp class LHD, designated LHD 8; and (c) a new
    ship designated the LHX.
        An essential component in implementing ship-to-objective maneuver
    is the Advanced Amphibious Assault Vehicle, or AAAV. Currently in its
    demonstration and validation phase, the AAAV will allow rapid, high-
    speed transportation of Marine combat units directly from amphibious
    assault ships--located well beyond the visual horizon--to objectives
    located well inland. This will effectively eliminate the need for an
    operational pause to build up combat power on the beachhead. When
    fielding begins in fiscal year 2006, the AAAV will be the most modern
    and capable amphibious vehicle in the world. The AAAV will have
    capabilities comparable to infantry fighting vehicles.
        Force protection against TBMs and land-attack cruise missiles is a
    critical component of future forcible entry operations. Scheduled for
    Fleet operation in fiscal year 1999, the AN/TPS-59(V)3 is the Marine
    Corps advanced three-dimensional, long-range radar, and is the MAGTF's
    primary means of detecting, identifying, tracking, and reporting on all
    aircraft and missiles within the MAGTF area of responsibility. This
    improved radar provides land-based air surveillance for the Marine
    component of a naval force, and will contribute to the Navy's
    Cooperative Engagement Capability. This system is also capable of
    detecting and tracking multiple theater ballistic missiles, with point
    of origin/point of impact calculations in support of theater missile
    defense.
        Combined-Arms Operations.--The Short Takeoff or Vertical Landing
    variant of the Joint Strike Fighter is critical to conducting combined-
    arms operations in the future. The Marine Corps depends heavily upon
    the use of fully integrated air support in combined-arms and
    expeditionary warfare. This approach reinforces expeditionary warfare
    by radically reducing dependence upon limited armor and artillery
    assets. The JSF will replace the Marine AV-8B Harrier and F/A-18 Hornet
    aircraft, and is scheduled to reach the initial operating capability
    phase in 2010. JSF first delivery of USMC VSTOL type is planned for
    fiscal year 2008.
        The lightweight 155 mm towed howitzer (LW155) will replace the
    aging M198 155 mm towed howitzer as the only artillery system in the
    Marine Corps inventory. The LW155 is designed for expeditionary
    operations requiring light, highly mobile artillery, and will be
    transportable by MV-22 Osprey and CH-53E aircraft. The howitzer's
    lighter weight and automated breech, rammer, and digital fire control
    computer will provide the MAGTF commander with increased responsiveness
    and efficiency. The program is in the engineering and manufacturing
    development phase, with initial operational capability scheduled in
    fiscal year 2003.
        Predator is a one-man portable, fire-and-forget missile system
    capable of defeating the next generation of advanced armor threats.
    This system is ``soft-launch'' capable, which allows it to be fired
    from within an enclosure. Additionally, its fly-over, shoot-down
    profile gives it an effective range between 17 and 600 meters. The
    Predator begins production in fiscal year 2001 for an initial
    operational capability in fiscal year 2003 and a full operational
    capability in fiscal year 2008.
    Naval Command and Control Systems
        The advance of digital technology has had no greater impact than in
    the field of command, control, communications, computers, intelligence,
    surveillance, and reconnaissance (C\4\ISR). The capabilities provided
    by modern C\4\ISR systems dramatically changed the way conflicts will
    be resolved. An innovative, efficient, and well-coordinated approach to
    technology infusion is necessary to establish connectivity for joint
    warfare.
        Command and control afloat is the foundation upon which future
    naval operations will be built. This vision requires an integrated and
    comprehensive command/control structure to facilitate decisive events
    ashore. Technologically, this will require superior sensors and fast
    and powerful networks that are integrated with deadly weapon systems.
    Four of the most prominent C\4\ISR initiatives include:
        Extending the Littoral Battlespace Advanced Concept Technology
    Demonstration (ELB ACTD).--The requirements for the ELB ACTD grew out
    of the Defense Science Board (DSB) Summer 1996 Study, Tactics and
    Techniques for 21st Century Military Superiority. This study
    recommended the establishment of a joint expeditionary force that is
    light, agile, potent, and distributed. The focus of the ACTD is the
    integration of advances in information technology with industry, the
    Services and Defense Agencies to expedite the implementation of the
    advanced warfighting concepts outlined in Forward . . . From The Sea,
    Operational Maneuver From The Sea, and Joint Vision 2010.
        Global Command and Control System--Maritime (GCCS-M).--GCCS-M is
    the Navy's designated command-and-control (C\2\) system for entering
    the 21st Century. A key enabler of the Navy's IT-21 Network Centric
    Warfare initiative, GCCS-M follows an evolutionary acquisition process
    to meet emerging fleet requirements rapidly. This system supports C\2\
    and tactical intelligence warfighting requirements for afloat, ashore,
    and tactical/mobile units. GCCS-M provides timely, accurate, and
    complete all-source C\4\ISR information management and develops a
    common operational picture for warfare mission assessment, planning,
    and execution. The current version of the system software is using the
    same core software as the joint GCCS and MAGTF C\4\I systems. This
    fielded version also initiates the long-term migration from UNIX
    workstation to PC hardware.
        Cooperative Engagement Capability (CEC).--CEC is a weapons-control
    network that uses revolutionary sensor netting technology to exchange
    raw sensor measurement data to develop composite air tracks. This
    capability expands the battlespace and provides increased situational
    awareness to the operators. CEC is the foundation network for the
    development of a single integrated air picture, which is vital to air
    dominance in the littoral. CEC also will allow warfighters to make
    maximum use of advanced surface-to-air weapons.
        The increasingly complex threats in the air-defense arena make it
    necessary to link geographically dispersed sensors of differing
    capabilities with all potential firing platforms. CEC acts as a force
    multiplier in that each firing platform benefits from a force-wide
    netted sensor input. In addition, the ability to build force-wide
    composite tracks means that every participating unit has an identical,
    real-time tactical picture. Installation of the system in the E-2C
    Hawkeye aircraft will greatly expand the CEC envelope to include the
    ability to conduct overland engagement of cruise missiles. Further, the
    E-2C CEC installation, part of the Hawkeye 2000 Program, will allow
    more widely dispersed fleet units to reap the full benefits of this
    enhanced capability. CEC achieved initial operational capability in
    late-September 1996, and was deployed in the Eisenhower battle group in
    1998. The Navy continues to work with the Army and Air Force to expand
    CEC applications in the joint arena.
        Tactical Combat Operations (TCO) System.--TCO is an automated
    capability for processing battlefield information. Achieving its
    initial operating capability in fiscal year 1996, the TCO System
    provides the Marines the same automated operations system currently
    used by the Navy. This system is built around GCCS-M, which brings a
    major increase in interoperability to the services. Currently, the
    Marine Expeditionary Force and Marine Expeditionary Unit headquarters
    elements have an interim capability, with a full operational capability
    expected at the end of fiscal year 1999.
                a vision of tomorrow's challenges and solutions
        The past few years unquestionably demonstrate that the Navy and
    Marine Corps continue to play pivotal roles in the protection and
    advancement of U.S. interests worldwide. On-scene naval forces
    conducting peacetime forward presence operations are frequently the
    first elements of a measured U.S. response to regional crisis and
    aggression. In order to deter aggression, foster peaceful resolution of
    dangerous conflicts, underpin stable foreign markets, encourage
    democracy, and inspire nations to join together to resolve global
    problems, the United States needs a multidimensional naval force ready
    to exert influence and extend national power anywhere on the globe.
    However, possessing the political will to influence events abroad is
    not enough to fulfill U.S. obligations.
        Readiness is the foundation of Navy and Marine Corps credibility as
    indispensable instruments of foreign policy and national resolve. It is
    the key measure of survivability and success for naval forces. Today,
    the most profound challenge to our nation's naval forces arises from
    the mandate to maintain current readiness while preparing for the needs
    of the future. We need to recruit and retain quality people and
    modernize their equipment. Today, fewer Americans are inclined to serve
    in the armed forces. Worries about families, retirement, and day-to-day
    bills are causing our people to leave the Navy and Marine Corps for
    civilian occupations. The cost of better pay and better retirement is
    small as compared with the cost of losing these trained people. For
    these reasons, it has been and will remain a priority of the DON to
    encourage substantial improvement in military compensation. The
    President's budget takes a significant step toward meeting the needs of
    our Sailors and Marines.
        Sailors and Marines are suffering now not simply from a deficiency
    in pay, but from overwork as well. This overwork manifests itself in a
    pattern of sixty-hour weeks, of excessive demands between as well as
    during deployments, and of frustration because there is too little time
    and too little equipment to do a good job even while working
    strenuously. To address this, the President's budget includes a program
    for ``Smart Work'' (described briefly in Chapter 3) whose aim is to
    improve the resources with which we work, the environment in which we
    and our families live, and the power with which we fight. Further, the
    Secretary of Defense's Reform Initiative (DRI) program, the DON's
    Revolution in Business Affairs (RBA), the Navy's Information Technology
    for the 21st Century (IT-21) initiative and the Navy-wide Intranet, and
    the Marine Corps' Reserve Recruiting and Retention Task Force, showcase
    examples of programs and policies that help ensure our efficacy for
    tomorrow.
        With regard to modernization, Navy and Marine Corps initiatives are
    based on a comprehensive assessment of future strategies, interests,
    requirements, and threats. Sufficient force levels--people, ships,
    aircraft, and equipment--to meet long-term needs are in jeopardy under
    current funding constraints. Specifically, the inventory and projected
    build rate for ships and aircraft, and the lack of funds to effectively
    modernize combat equipment will affect naval operations beyond the
    FYDP. Unless sufficient funding is provided, the recapitalization and
    modernization of the Navy and Marine Corps will necessarily be
    deferred, in most cases, to fund current readiness accounts. Another
    consequence of our aging, maintenance-intensive equipment is its
    negative effect on productivity and reliability, detrimentally
    impacting the quality of life for our people, increasing our retention
    challenge. The proposed fiscal year 2000 includes budget increases for
    modernization and begin to address concerns for supporting long term
    force goals.
        It is apparent that in an increasingly constrained fiscal
    environment, innovative thinking and revolutionary initiatives are
    imperative to maintain our readiness, modernize and capitalize our
    forces, improve our processes, and better serve our national interests.
    In the coming year, we will strengthen existing initiatives and begin a
    number of new efforts to ensure that our naval forces can perform the
    missions the Nation is likely to ask of them. These initiatives
    include: (1) identifying and implementing additional cost reduction
    opportunities across the Department; (2) taking a more expansive look
    at our Reserve Forces with regard to potential efficiencies; and, (3)
    exploring the use of Navy and Marine Corps forces in conjunction with
    other agencies and allies as a means to enhance the global economy and
    U.S. interests.
        Cost Reduction.--This initiative will continue to seek cost
    reduction opportunities at a macro level by managing organizations and
    infrastructure costs concurrently with the total ownership costs of
    weapon systems and platforms. In addition, we will seek ideas designed
    to cut costs by consolidating individual activities and deleting
    redundant functions and also analyze and compare similar components and
    successful cost reduction processes used by the private sector and
    foreign navies, adapting those ideas best suited to the U.S. Navy and
    Marine Corps. This initiative will work in concert with the Secretary
    of the Navy's Smart Work program, involving manning initiatives,
    capital investments, improved working conditions and information system
    investments, as well as with the National Partnership for Reinventing
    Government, and the Defense Reform Initiative (DRI).
        Reserves.--We must continue to enhance opportunities for Navy and
    Marine Corps Reserves to perform critical missions where minimal active
    duty capability exists. For example, some reservists have considerable
    education and experience in the private business sector and could be
    effectively used in Peacekeeping missions. Another example is the cadre
    of Reserves who have significant education and experience in areas
    critical to chemical and biological warfare. These individuals, who as
    civilians work in research, medical, and academic communities, could
    provide a CBW response capability which could not be sustained by
    active duty forces without considerable investment.
        Global Economy.--We need to continue to capitalize on the forward
    presence posture of deployed U.S. armed forces as an instrument of
    peace to enhance the global economy. We will improve existing efforts
    by developing operational concepts for expanding the role of naval
    forces to shape events throughout the world. Our efforts will focus on
    three key elements: (1) the significant likelihood that shaping
    activities will occur in or near the littorals; (2) the sizable
    increase in shaping capacity that results when joint, multi-agency or
    allied operations are combined with naval forces; and (3) growing
    evidence that shaping can result in both stability and growth of market
    economies and democratic societies.
        Today, operating forces of the Navy and Marine Corps remains
    forward deployed and ready to protect our nation's interests. We remain
    the finest naval force in the world due to efforts of our superb
    personnel and support of Congress. The challenges and solutions
    detailed in this Posture Statement must be addressed for the benefit of
    the citizens of the United States, and for the courageous and selfless
    men and women who are America's Navy and Marine Corps.

        Senator Stevens. Thank you, Mr. Secretary. General Krulak.

                       opening remarks of General Krulak

        General Krulak. Mr. Chairman, Senator Inouye, let me first
    thank you both for your kind words, and I mean that sincerely.
        You are correct. On the 30th of June, when I take off this
    uniform, it will be the first time in 70 years that a Krulak
    has not worn the uniform of a United States Marine. I mention
    that only because if you think that is continuity, it is
    nothing compared to the continuity provided by this magnificent
    body called the Congress of the United States.
        You two represent a term that we use in the Marine Corps
    all the time, and it is called gung ho. It means work together.
    And I do not think that any committee, subcommittee is better
    represented by that philosophy than this one where two great
    Americans sit together independent of what party they are in
    and produce for this Nation a strong defense.
        Jay Johnson and I would like to claim that we are doing it.
    But the reality is the Congress raises armies and maintains
    navies. We recognize that, and we recognize particularly you
    two war heroes and great gentlemen. I just want to tell you, as
    I walk out the door, I go out with tremendously fond memories
    of the man who brought me in the door so many years ago and who
    has listened to me and your unbelievable support of my marines
    over the years.
        And so although you said kind words about me, I think that
    if I can be a mirror and reflect them back to you and to your
    entire committee, I would do so. On behalf of the Navy-Marine
    Corps team, thank you for all that you do for our precious
    young men and women of character.
        You are right. This is my last time. I have been before
    this committee four times. And in the three and a half years
    that encompass those four times, my testimony has been
    basically pretty consistent. It starts by saying we are ready
    now.
        When the whistle blows, we are going to put on our helmets.
    We are going to put on our flak jackets. We are going to march
    to the sound of the guns. We are going to fight and we are
    going to win. We are going to guarantee that. We guarantee
    that.
        The second thing that we guarantee: That that near-term
    readiness comes at great expense. It comes at great expense.
    Since Desert Storm and the reduction in the defense budgets, we
    have been forced to deal with what we call near-term readiness,
    the health of our Corps versus long-term readiness or the
    wellness of our Corps.
        Since Desert Storm, we have had to make some tough
    decisions that involved reductions in our procurement,
    infrastructure, and quality of life accounts. We did that to
    meet your mandated requirement that we be the Nation's
    expeditionary force in readiness, that force most ready when
    the Nation is least ready.
        We have also maintained the Defense Department's desires
    that readiness be a top priority. In doing so, that has cost us
    dearly in our long-term readiness.
        Simply stated, our equipment is old. It wears out rapidly.
    It takes more money to buy the spare parts to fix that
    equipment. It spends more time in the maintenance bay. It takes
    longer for our young marines, men and women of character, to
    maintain that equipment.
        Because it is in the maintenance bays longer, it is not
    available for training. Because it is not available for
    training, it takes longer to train our marines. And it becomes
    a very vicious and destructive cycle.
        The budget we are looking at today provides the first
    glimmer of hope in attacking this critical problem before your
    Marine Corps--it begins to address procurement, infrastructure
    and quality of life. It is a step in the right direction, and I
    confess it is a very welcome step.
        Unfortunately, I think we all agree it still falls short of
    addressing some of the critical requirements for this year and
    the out years. As I have testified before, it does no good to
    throw money at the short-term operation and maintenance (O&M)
    problem if we forget about the long-term problem of
    modernization.
        This committee knows better than any that the world is
    changing. It is changing rapidly and in ways that I am not sure
    America is prepared to understand, certainly that they have not
    experienced before.
        The days of what I call armed conflict between nation
    states is waning. We see the tip of the iceberg every day. We
    see ethnic, religious, cultural and tribal conflict, asymmetric
    warfare, enemies who have seen our awesome capability on CNN
    and who will attempt to negate our strengths while capitalizing
    on our weaknesses.
        Terrorism, information warfare, economic disruption, chem-
    bio threats will become as dangerous to this Nation as what you
    and I refer to as major theater war. Your Marine Corps has
    never been focused on the major theater war, what I call the
    Russian bear. We fight across the spectrum of conflict. That is
    what we have always done. That is what we will always do.
        We are in many ways the Nation's insurance policy against
    asymmetric conflict, and we are a very inexpensive insurance
    policy.
        I would be remiss, as I walk out the door, if I did not
    express my deepest respect again to this body, my respect,
    appreciation, my admiration for what you do as individuals and
    for what you do as a body.
        In my opinion, you are the patriots in the truest sense of
    the word. You have taken on a job that is very difficult and
    one that many in this country would not take on for all the
    money in the world, and you are not getting paid that much.
        I would also be remiss if I did not mention the people who
    sit behind you, your staff. I will tell you, I have never met a
    greater bunch of patriots and knowledgeable individuals than
    the staff that supports you. And so, as I walk out the door, I
    not only applaud this committee, but I applaud those who work
    behind the scenes. They are as much a patriot as anybody else.
        Thank you very much and ``Semper Fidelis.''
        Senator Stevens. Admiral Johnson.

                       opening remarks of Admiral Johnson

        Admiral Johnson. Thank you, Mr. Chairman, Senator Inouye,
    Senator Bond.
        I am grateful to be back before the committee. I would like
    to endorse what has been said about my friend and my shipmate,
    General Charles Chandler Krulak. And let the record show,
    indeed, he is a proud Marine and a great leader, but he is also
    my friend, and I, too, will miss him when he steps ashore this
    year.
        General Krulak. Thank you.
        Admiral Johnson. I must also note to his first words, what
    he said about the leadership of this committee and what that
    means to us and to our country.
        And I would commend to anyone's reading the chapter in Mr.
    Brokaw's book, ``The Greatest Generation,'' on Senator Inouye.
    It ought to be required reading for every American to
    understand from whence you gentlemen have come. And it is hard
    for me to describe the comfort and reassurance that brings
    people like Chuck Krulak and Jay Johnson and Richard Danzig
    when we are dealing with tough but very important issues of
    national defense. And I thank you, gentlemen, for your service
    and your leadership.
        I will say a couple of words about the Navy, if I could,
    and then we can talk in more detail later, but just to make a
    couple of points, sir.
        The operating tempo you know for us is very high. I would
    categorize it as sustainable for now within our six-month
    maximum deployment policy. The tempo and the work load on the
    nondeployed side of our lives is clearly, clearly too high. We
    are hard at work on many things to fix that. It needs to be
    fixed now.
        The readiness out forward is still good. We are very proud
    of that. Desert Fox is a classic example. When asked to
    execute, we executed and we did it very well.
        But at home, our readiness has eroded. That readiness
    bathtub we talk about is still very much too deep. Recruiting
    and retention for us are problematic. I am very happy to say
    that in the recruitment of sailors thus far this fiscal year we
    have met our numbers. But I also would remind you that
    February, March, April and May are historically the toughest
    time of the year. So we know we have got major challenges ahead
    and we are working those very hard.
        I, too, would like to just stress the importance of the pay
    triad--the pay raise, pay table reform, Redux repeal--as a
    matter of utmost importance in this budget. I believe it is
    fundamental and must underpin everything else we do to help us
    in recruiting, to help us in retention for sure and to better
    sustain the fleet we know we need.
        The No. 1 priority spinning out of that for the Navy in the
    short-term clearly is our people. The pay, as I just described,
    OPTEMPO in providing them stability at home.
        My No. 1 long-term concern is building enough ships and
    aircraft to recapitalize the force. We need a minimum of 305
    ships fully manned, adequately trained, and properly equipped,
    and we need between 150 and 210 aircraft per year to sustain
    the force that is centered around twelve aircraft carrier
    battle groups and twelve amphibious ready groups.
        As always, Mr. Chairman, your Navy is very grateful for
    this committee's support as your sailors continue to stand the
    watch proudly out forward where it counts.
        Thank you very much.
        Senator Stevens. Thank you all very much.
        The two of us appreciate your comments. My friend deserves
    them a great deal more than I do.
        We have some really enormous problems as I mentioned when
    we began. Let me read to you a statement that Secretary Cohen
    made. If we get an $11 billion bill we have not budgeted for,
    we have to take it out of our modernization or operations, and
    that is a major concern we have.
        Now, this bill that we all voted for does a lot of things.
    It even makes the Government Issue (GI) Bill benefits
    transferable to a spouse or children and takes $3 billion out
    of our readiness account to pay for education.
        It is not the Montgomery concept of increasing the
    education of people in the armed services. It is an additional
    benefit to those who have served, but it goes to a spouse or a
    child. In retrospect, now, I seriously question that. As a
    matter of fact, I think I voted against it on the floor. But it
    is really a problem to us to contemplate how to deal with the
    cost of S. 4.

                                      S. 4

        So let me ask you first, Secretary Danzig, have you costed
    out the effect of S. 4 on the Navy and people under your area
    of the military?
        Secretary Danzig. Mr. Chairman, I think you are on to a
    very important theme. We, all of us, are very enthusiastic
    about expanding the pay and the benefits of service members. I
    think the military members do not enter the service for pay
    advantages.
        But if we fall into a circumstance where we are not paying
    them enough and bills distract them, we cause them to flee from
    what they really want to do, which is to serve our Nation as,
    in our case, sailors and marines. So efforts to increase the
    well-being of sailors and marines in these contexts are very
    important to us.
        We found that we could fund the basic triad that I know you
    have embraced, an increase in pay at the level of 4.4 percent,
    a change in the pay table that rewards promotion and
    acceleration and gives some people pay raises of as much as 9.9
    percent, and also a movement away from the Redux system so that
    people get 50 percent retirements.
        We know that activities beyond that are frequently very
    desirable but, as your comments suggest, costly. For example, a
    tenth of a percent of further increase in pay yields to an O4
    after ten years of service, about $11 more a month in his
    paycheck. It brings his pay increase from $127 or so to $138 in
    approximate terms.
        That is a valuable thing, but it costs us $20 million a
    year as we progress out and will do every year in the future.
    And we can give you obvious cost numbers for all of the other
    components associated with this.
        The crucial question, I think, is how do you pay for these.
    From my standpoint, the important thing is to make sure we do
    not pay for them from other aspects of our program.
        I think an aviator, for example, cares very much about
    getting a substantial pay raise, but he cares, I think, even
    more about his ability to fly, to do what he came into the Navy
    to do and making sure he has the spare parts and the platforms
    to be able to do that, that he is flying safe equipment, making
    sure that our sailors and marines are working in acceptable
    environments and that they can perform those missions.
        Those are all very important, and what we have to do is
    find a way to balance what we are doing on the pay side and
    other activities with our needs for readiness, for
    modernization, for quality of life and other respects. Doing
    that requires the kind of calculus that you are encouraging,
    and I applaud it.
        Senator Stevens. Did the Navy get any increase as it went
    through the Office of the Secretary of Defense (OSD) allocation
    process this year in the budget review?
        Secretary Danzig. Yes.
        Senator Stevens. How much?
        Secretary Danzig. Well, the exact numbers vary, in part,
    according to the calculus. I think what you will find is,
    compared to the lists of added requests from the Commandant and
    the Chief of Naval Operations (CNO), they bought something
    between 50 and 60 percent of what they wanted. We can give you
    the exact numbers for the record.
        [The information follows:]

        The topline relief provided for in the fiscal year 2000
    President's Budget gave the Navy an additional $19 billion over
    the Future Years Defense Program, $2.4 billion in fiscal year
    2000. This additional funding allowed the Navy to address its
    most critical readiness, recapitalization and modernization
    needs.

        Senator Stevens. But the Marines decline as compared to the
    fiscal year 1999 and the fiscal year 2000 budget. How did that
    happen?
        Secretary Danzig. I am sorry. The Marines' total
    allocation, you mean?

                       Operation and maintenance account

        Senator Stevens. Our Marine Corps, particularly operation
    and maintenance, is down in 2000 compared to 1999, and yet
    there was additional money received from OSD. How did that
    happen?
        Secretary Danzig. Well, what has happened with the
    operations and maintenance account is that the account was
    revalued to take account of changes in, for example, oil
    pricing and inflation.
        We found that we are able, in fact, to maintain more
    equipment and the like given our recognition that oil pricing,
    for example, is at $10 a barrel. So the practical reality is
    that the Marine Corps and the Navy both are achieving an
    increase in their spares capability, in their ability to
    sustain flying hours and ability to operate----
        Senator Stevens. Mr. Secretary, that is just not true. That
    is the problem. Our reading is the allocation savings in fuel
    and inflation still result in the Marine Corps operation
    maintenance account being down for the fiscal year 2000
    compared to 1999.
        Secretary Danzig. What I am trying to suggest, Mr.
    Chairman, is if you look at the benefits of the account, that
    is, how many flying hours are sustained, how many purchases of
    spare parts, how much ammunition is bought, you will find
    increases in the actual numbers of capabilities that are being
    bought because the per unit price is lower than it was
    previously. And we have captured those savings and allocated
    them to the Navy and Marine Corps rather than return them to
    the Treasury. Perhaps----
        Senator Stevens. The trouble is the budget captures a
    savings in fuel and in interest and the basic exchange
    differences and allocates it across the board, and then you
    come back and say but, look, these are lesser costs, so they
    are going to get more done. You cannot allocate that savings
    twice.
        Watch that clock, will you?
        Secretary Danzig. Could I just make one comment, Mr.
    Chairman.
        Senator Stevens. It is Senator Inouye's time. The clock is
    screwing up on us.
        Secretary Danzig. OK. Sorry.

                           Tactical ballistic defense

        Senator Inouye. Mr. Secretary, Admiral and General, last
    night by chance I was surfing the TV set and came across a
    documentary on the Barbary Coast pirates, and I got a lesson in
    history as to how the phrase from the shores of Tripoli came in
    and the exploits of Lt. Steven Decatur. And now we are talking
    about tactical ballistic defense.
        And, if I may ask any one of you here, we have been funding
    this sea-based tactical ballistic missile defense system. Can
    you tell us how the plans are proceeding? You have asked for
    $617 million.
        Secretary Danzig. Well, perhaps I can comment first and
    then the CNO might want to add.
        I am enthusiastic about these programs. I think that the
    Navy area of missile defense and theater ballistic missile
    defense are both robust programs with enormous potential. We
    have had substantial discussion within the Pentagon directly
    with OSD, about the appropriate levels for funding these
    programs. And from my standpoint, there has been an evolution
    to a recognition that the Navy programs represent a substantial
    opportunity for the Nation and that they warrant robust
    funding.
        The theater high altitude area defense (THAAD) program
    continues as a land-based system from my standpoint. That is
    fine. The Navy program has an opportunity to be technologically
    tested, as does the THAAD program.
        We are going to be running a substantial number of tests
    over these next two years, and I think they will enable us to
    fully validate and demonstrate the capabilities of the Navy
    system and then make a decision as to how much money to put
    towards its deployability. Our area achievements should be
    evident over the next year or two as a result of those and our
    theater in the wake of that. Maybe the CNO would like to add to
    that.
        Admiral Johnson. Thank you, Mr. Secretary, I would. Senator
    Inouye, I share the Secretary's enthusiasm for the Navy
    systems. I believe they are the right answer for the country,
    and they are part of the overall kit that we need to field for
    theater ballistic missile defense. Indeed, the area system for
    us is priority one, and it is well in hand, I would report.
        When I saw you at the Pacific Command (PACOM) change of
    command in Hawaii, I also spent a great deal of time at the
    Pacific Missile Range Facility and talked to the team out
    there. Also one of the two Aegis cruisers we have with area
    theater capability in the build right now is at Pearl Harbor
    and I spent time on the U.S.S. Port Royal. It is a very
    impressive, very aggressive program that will be, as the
    Secretary said, fielded here in the next two years.
        We have the tracking capability right now on those
    linebacker ships. We will have the missiles embedded in those
    ships within the year, and that will give us an area capability
    that will allow us to protect ourselves, our marines, our
    troops, our friends in close to the battle space.
        The theater system which follows out of that is also
    subject to extensive tests. We believe that we are being
    supported now at a level, in my opinion, that has changed
    greatly over the last couple of years. That is the right
    answer. We cannot wait to get started.
        Senator Inouye. I, for one, am convinced that this is a key
    weapons system in our national arsenal--not just in the Navy
    one. So far your testing has shown that it not only has the
    potential, but it will do the job. Will $617 million do the job
    for this coming fiscal year?
        Admiral Johnson. Yes, sir. The answer, sir, my answer to
    that and then I would defer to the Secretary is that that will
    keep us on the aggressive test plan profile that we need right
    now.
        I believe we need to field both the area and theater
    systems as fast as we can sanely do that. This funding profile
    starts us--actually, it continues us on the area side--but
    starts the theater system down that path, I think, with renewed
    vigor with a time line that gives us the option to field that
    system with block one capability in about the 2007 time frame.
        My personal view is that as the tests evolve and go the way
    we think they are going to go, there will be opportunity to
    pull that with additional investment forward to about the 2005
    time frame. And that is the construct as I see it.
        Senator Inouye. Mr. Secretary.
        Secretary Danzig. I would agree with that. At the moment I
    feel that the questions and the issues that we need to address
    in the near term on this program are technological. We are
    funded at appropriate levels now. We may have opportunities for
    more funding later if the technological results are productive.
        Senator Inouye. I have no idea of what the outcome will be
    on our current debate on the ballistic missile defense system.
    That is why your system seems to be the best thing we have got
    going right now. At least it can knock out the Scuds and the
    Nodongs, and that is what concerns us at this point.
        Admiral Johnson. Yes, sir. Our obligation to you is that we
    will proceed down the path of sanity, as I describe it, in
    terms of the construct and test of these systems so that we can
    field both the area system and the theater system and then
    present them to the country. That is my objective.
        Senator Stevens. What about the national system?
        Secretary Danzig. The national system is a central focus,
    of course, for OSD. My feeling is that we have got a logical
    sequence here in what the CNO calls the path of sanity. We need
    to demonstrate and field the area system. We need to work
    through the problems associated with the theater system.
        I think Navy ballistic missile defense does pose an
    opportunity in terms of national missile defense. But it is an
    opportunity that is technologically further out and more
    demanding, as you well know, having treaty compliance issues
    associated with it, because the Anti-Ballistic Missile (ABM)
    Treaty explicitly opposes or restricts or prevents a deployment
    at sea.
        But at the moment it is the technology, not the treaty that
    constrains us, and I am in favor of developing Navy theater
    strike forwardly now.
        Senator Stevens. I will get into that later. Go ahead,
    Senator. I interrupted you. But that is not my understanding of
    that situation either. Sorry about that.

                        Ford Island development program

        Senator Inouye. Mr. Secretary, the Navy has submitted
    legislation to authorize a Ford Island development program. Can
    you tell us what the status is now or tell us why you are
    enthusiastic about it? It is a leading question.
        Secretary Danzig. Right, but I am happy to be led there. We
    are very enthusiastic about the possibilities on Ford Island.
    Our military construction budgets are, of course, restrained.
    But if we can involve a public-private venture for the
    development of Ford Island, we can get great benefit from this
    property and at the same time working with a private developer,
    develop barracks and other kinds of family housing and other
    kinds of facilities as well as give the State of Hawaii a
    center on Ford Island that they can use in good ways.
        We need legislative authorization for such a public-private
    venture, and I expect we will be requesting it in the immediate
    future. It gives us a very efficient use of property that
    otherwise stands fallow and unused.
        Senator Inouye. This concept is not unique or new, is it?
    It has been employed?
        Secretary Danzig. No. That is correct. We are using public-
    private ventures in a number of locations on the continental
    United States, for example, in Washington State at Everett, in
    San Diego with respect to housing. We have used it in Texas,
    and it has yielded to us the advantages of a private
    developer's efficiency and imagination and flexibility while at
    the same time not absorbing Navy resources.
        Senator Stevens. Senator Bond.
        Senator Bond. Thank you very much, Mr. Chairman. And I
    would certainly concur on behalf of the other members of the
    subcommittee with the very kind words that the general and
    others and the admiral mentioned about the leadership of this
    committee.

                                   Ammunition

        General Krulak, we, too, have enjoyed having the
    opportunity to work with you on this committee and appreciate
    your great service.
        One of the things that I think struck many of us very, very
    heavily was--and I have heard so many of my colleagues repeat
    it--the story that you told this past holiday of a past holiday
    season concerning the young marine standing his post who, when
    you questioned him about what he most wanted, thinking he would
    probably say he wanted to be home or with his family simply
    responded more ammunition.
        Well, that really tells a tremendous story. And we
    understand that you have an unfunded requirement for small arms
    ammo. Could you give us an idea of the extent of that
    requirement and what do we need to do to make sure that that
    young marine and all the others who are in harm's way have the
    ammo they need?
        General Krulak. Yes, sir. We are short two types of
    ammunition. One of them is a 7.62 ammunition. The shortage is
    about $5 million. And in 5.56, the shortage is about $9.7
    million. So we can solve the entire problem for less than $15
    million.
        Senator Bond. Thank you, sir. That certainly ought to be a
    very high priority.
        General Krulak. Yes, sir, it is.
        Senator Bond. I cannot think of any more serious problem
    than sending somebody out without the ammo.

                                   F/A-18E/F

        Mr. Secretary, it is no secret that I have a great deal of
    interest in the Navy's F/A-18E/F program. I understand that the
    combat capability and the survivability is essential for the
    brave men and women who fly them, and I have heard the
    Department of Defense laud it, and I gather it has achieved the
    milestones. And I, also, understand that, as we are sitting
    here today, it is completing carrier ``quals'' and sea trials.
    They tell me it is called bagging of traps and cats off the
    coast a few hundred miles southeast of here. We have heard
    anecdotal stories from some of the pilots. Some of them say
    that if I had to go to war today, this is an aircraft I would
    want to be in.
        Well, let me ask you first, Mr. Secretary, can you give
    your professional views on the aircraft, its viability, its
    versatility and its need?
        Secretary Danzig. Yes, Senator. I have spent a fair amount
    of time looking at this program. I have also had discussions
    with the CNO and the Secretary of Defense about it. I am very
    enthusiastic about it. I think it brings us a capability that
    we highly value, which is a greatly increased strike
    capability.
        It adds two weapon stations beyond the F/A-18C/D, its
    predecessor. It is 25 percent larger; therefore, it gives us
    more avionics and weapons capability. It has a 40 percent
    greater range capability. It has refueling and tanking
    possibilities that are very welcome.
        What is most remarkable to me about this is that in
    acquiring an airplane that is some 25 percent bigger, we have
    also managed to maintain its fighter capabilities at a level
    that, if anything, exceeds those of the ``C'' and ``D''. So I
    think of this, to use a basketball analogy, something like a
    seven-foot plus center that has all of that kind of scoring
    potential and at the same time has the agility of a point
    guard.
        You cannot be all things to all people, and it is not the
    absolutely maximal fighter aircraft, but it does do an
    extraordinary job of blending strike and fighter capabilities.
        As an acquisition program, I am very impressed with it. It
    is on time. It is underweight. It is slightly under budget. I
    regard these as very great achievements.
        From time to time problems have been shown in the course of
    its 4,000 hours of flight testing. That seems to me to be
    entirely appropriate. We have been very straightforward and
    visible about those.
        I regard problems as like the labor pains of giving birth.
    You encounter these kinds of things. All the ones that I have
    seen that have struck me of any significance have been
    resolved, and I am very optimistic about the program.
        The CNO has hands-on experience as an aviator. And if we
    can take a moment more, I will yield to him with respect to
    some further particulars.
        Senator Bond. Maybe he can tell us about the seven-foot
    center that shoots three pointers from the outer perimeter.
    Maybe he can add something on that.
        Secretary Danzig. I should say this is nothing like my own
    basketball game.
        Admiral Johnson. The Secretary has said it very well,
    Senator Bond. And I would only add that from a pilot's
    perspective--not a test pilot, but an old guy pilot--I would
    tell you that for an airplane that is 25 percent larger, it
    flies smaller, if you know what I mean. From a flying quality
    standpoint, it is very tight, very, very impressive.
        When it comes to the business of generating combat power,
    which after all is what it is all about, it also--when you
    balance it--a wing of F/A-18E/F's against a wing, an air wing
    of F/A-18C/D's--the phenomenal numbers I have stuck in my head
    would tell me that I can service twice as many targets in half
    the time with a third of the combat losses. That is a very
    impressive performance kit.
        When you take the airplane as it is and look at the key
    performance parameters by which it must be measured, we are
    very satisfied with that airplane. And, indeed, we have got two
    of them, an E and an F, out on U.S.S. Harry S. Truman right
    now.
        And the bagging of cats and traps is, indeed, what they are
    doing. But I will put it another way and tell you that they are
    into the serious business of heavyweight asymmetrical cat and
    traps, you know. They are really ringing it out.
        I checked before I came over here. They are a little over a
    third of the way through with this at-sea phase. They are very
    pleased with what they have seen so far.
        So we feel very good about the F/A-18E/F. It is ready for
    full rate production. Our budget reflects that, and we would
    like to put it into multiyear as a result of that, sir.
        Senator Bond. Admiral, I understand that the E and F has a
    significantly enhanced bring back capability with the----
        Admiral Johnson. Yes, sir.
        Senator Bond [continuing]. Say, for example, the joint
    standoff weapons load out. And could you address that and the
    tactical functional maneuvering capability in a wartime
    environment?
        Admiral Johnson. Yes, sir.

                          Joint standoff weapon (JSOW)

        Senator Bond. I think those two items are important.
        Admiral Johnson. Indeed. The JSOW, first of all, is a
    wonderful weapon. It is a weapon that we have all committed to.
    We have had great support from the Congress. We have fielded
    that weapon now, and we are using it, and we are most impressed
    with the results.
        Having said that, I would tell you that the airplanes that
    are carrying it right now for us, the F/A-18C's that are in the
    Arabian Gulf, it is advertised to carry two JSOWs. I will tell
    you as a practical matter, as an operational tactical load
    matter, if you carry two JSOWs in an F-18C, you are either
    going to have to shoot one of them or dump one of them in the
    water to bring it back aboard because you exceed the max
    landing weight of the airplane. The F-18----
        Senator Bond. You can only bring back one JSOW.
        Admiral Johnson. That is correct. And if you look at the
    configurations they are carrying in the Gulf right now, indeed,
    they are only carrying a single JSOW. The F/A-18E/F will carry
    four JSOWs out and bring four back if it has to. That is an
    example of where we are.
        Another characteristic that is probably worth just
    mentioning briefly is the wing that we have today when you send
    those Hornets into the threat area, you send the Hornets and
    you also send EA6B's or other Hornets for suppression of enemy
    air defense. So you have two packages. You have got one of the
    strike birds and one of the suppression of enemy air defenses
    (SEAD) birds.
        When you get to the E-F because of the extra stations,
    because of all the things that the Secretary touched on, you
    will be able to take those eleven or twelve airplanes and send
    six Super Hornets and they can do suppression by themselves.
    They can carry the armed missiles by themselves. So those are
    the kinds of real world trades and upgrades, if you will, that
    this represents. So we are very much committed to it as you can
    tell.
        Senator Bond. Thank you very much, Mr. Chairman, and thank
    you, Mr. Secretary.
        Senator Stevens. I think that is music to my friend's ears
    here.
        Senator Bond. Well, it helps. It does not hurt today a bit.
        Senator Stevens. Senator Durbin.
        Senator Durbin. Thank you, Mr. Chairman, and thanks, Mr.
    Secretary, Admiral Johnson and General Krulak. I am in big
    trouble here because I do not know what a JSOW is. But I am new
    to the committee and my staff is working on it.
        Admiral Johnson. Joint standoff weapon, sir. Sorry. We
    acronym ourself to death.
        General Krulak. Nothing to do with pigs.

                                      S. 4

        Senator Durbin. I am glad to know that.
        The chairman addressed S. 4 that we considered a couple of
    weeks ago. There were eight of us that voted against this bill.
    And I do not believe there is a single person in the Senate who
    does not want to increase the compensation and retirement
    benefits of those serving in the military, as well as
    increasing recruitment and retention. But by the time that bill
    was finished on the Senate floor after not a minute of hearings
    in committee, we had increased the amount requested by some $17
    billion over the President's budget without a clue as to how it
    was going to be paid for. I did not believe that was a
    responsible thing to do.
        But I want to ask you point blank. Some of the things I
    have been told about recruitment and retention in the Navy are
    of great concern. And I noticed in your statement which you
    have presented to the committee you acknowledge problems that
    you have had in this area, the Navy recruiting shortfall of
    6,892 sailors in fiscal year 1998, equally challenging in 1999.
        Can you tell me something about what you have done to come
    to an understanding as to why these shortfalls have occurred?
        Secretary Danzig. Yes. With respect to recruitment, my
    feeling coming in, and I know the CNO's on having reviewed it
    earlier, was that most immediately we had a need to put more
    recruiters in the field. We fielded 3,500 recruiters for the
    Navy in the previous fiscal year. We will over the course of
    this month get to 4,500 recruiters with respect to this fiscal
    year.
        Those additional 1,000 recruiters, almost a 30 percent
    increase, buy us a very substantial increment in capability
    with regard to recruiting. And, as the CNO has commented, we
    have been on track with respect to recruiting this year. So I
    think that is a major step.
        Congress has also helped us and we have directly addressed
    the question of advertising and we have increased the amount of
    advertising. We have noted that the Marine Corps success in 43
    months of unbroken meeting recruiting goals correlates not only
    with an emphasis on this area in the Marine Corps and a full
    funding of billets, but also with additional stations for
    recruiters. We are expanding the number of naval stations so as
    to increase our outreach to communities.
        We have done a number of things on the management side as
    well, and together I think we produced a likelihood that we are
    going to meet our Navy recruiting goals this year. I stand with
    you. I think that is very important.
        Senator Durbin. Now, do you have to reduce your standards
    for recruitment, for example, on the requirement of a high
    school diploma? Bring me up-to-date on what is happening there.
        Secretary Danzig. Thank you for asking about that. Senator
    Inouye also mentioned that in the opening comments, and I am
    glad to address it.
        The Navy is meeting the DOD standard of recruiting 90
    percent of our graduates with high school diplomas. The
    question for me, as a manager, and for the CNO was did we want
    to sustain a level of 95 percent high school graduates or aim
    at the 90 target, which was the OSD established standard.
        I think it is fair to say that a high school diploma is a
    relevant criterion, and on balance, I like people with high
    school diplomas. They have demonstrated a stick-to-itiveness
    that is desirable.
        The question for us was are we overemphasizing that and can
    we do better in recruitment if, for an additional 5 percent of
    our recruits, we do not insist that they have a high school
    diploma but look at some other criteria. And my conclusion was
    yes. It is the right thing to do, to shift the emphasis for
    that 5 percent, some 2,600 recruits, from requiring a high
    school diploma to looking at other criteria.
        What are those other criteria? Test scores, employment
    history, character references.
        My feeling was, we are taking some high school graduates
    who have below average test scores. They are very capable. They
    fall between the 30th and 50th percentile of the population.
    But I have non-high school graduates who score much higher in
    the top half of the population.
        Do I want to take those people with higher test scores,
    especially in critical skill areas, rather than pursue the last
    high school graduate who has lower test scores. My answer was,
    well, yes, if I can be assured that they have the
    characteristics of stick-to-itiveness that high school
    graduates have. How can I do that?
        Answer: We know by looking at employment history and by
    taking people who are somewhat older. The average high school
    graduate may be 18 years old. Let us focus on 19-year-olds and
    older. Let us insist that these people have an employment
    history immediately before coming in that stretches back over a
    year. Let us insist on character references which we do not
    normally insist upon.
        So I do not regard this as a lowering of standards. I view
    this as a shift to people who are proven performers in quite
    another context. And it seems to me we are in no significant
    risk when we take in 2,600 people of this kind rather than
    pursuing the umpteenth high school graduate whose test scores
    are nowhere near as good.
        Senator Durbin. That is a valuable perspective on that
    issue. I am glad you told us that. I would like to ask several
    parochial questions.

                            Great Lakes Naval Center

        One, let us focus on Great Lakes for a moment here. Are you
    familiar with the Navy's plans to privatize certain services of
    Great Lakes Naval Center?
        Secretary Danzig. I have paid a fair amount of attention to
    the Great Lakes issues and been out there and talked with them.
    I have not looked in detail at the privatization there. We have
    pushed the expansion of Great Lakes.
        Go ahead. Sorry.
        Senator Durbin. If I might, I will save my follow-up
    questions for a more direct conversation or in writing. But it
    is my understanding that there is an effort underway to
    privatize or basically to sell off to North Chicago, an
    adjoining community, the water plant as well as the sewage
    services, and they are very anxious to get involved in that
    discussion. So I will follow up with you on that.
        Secretary Danzig. I look forward to that, Senator.

                               Avondale Shipyard

        Senator Durbin. Can I ask you about a more contentious
    issue that has become somewhat national in nature, and that is
    the Avondale shipyard. We have received notice--primarily from
    the American Federation of Labor-Congress Industrial
    Organization (AFL-CIO), but from others--about ongoing concerns
    of the treatment of workers there, the amount being paid, the
    number of foreign workers, the safety of the workplace and
    perhaps the misuse of funds for legal expenses.
        I know you have received a lot of letters from the members
    of Congress on this issue. Can you tell me the extent of your
    investigation of this problem?
        Secretary Danzig. Yes. This is an issue which, as you say,
    has been raised several times. It is one that warrants Navy
    attention. The regulations are very clear that we are not to
    take sides with respect to a labor dispute, and even mediative
    activities and so forth should be undertaken by other
    government agencies. We have talked with the Department of
    Labor about that. I have asked the General Counsel's office
    within the Navy to look at the inclusion of legal fees in the
    cost base and make a judgment about whether they are
    appropriately included.
        The litigation, as you may know, is now before a court of
    appeals. I am hopeful that the labor situation at Avondale will
    be resolved over these next several months. From the Navy's
    standpoint, the achievement of a resolution is a desirable
    thing.
        Senator Durbin. I will ask one last and specific question.
    I want to be sure I understand this if you can answer it.
        Secretary Danzig. Sure.
        Senator Durbin. Here we have a union election at this
    shipyard and, as I understand it, the workers voted to
    unionize. The management then contested that election, and they
    have pursued their legal rights administratively and in the
    courts.
        And the question that has been asked of me and I ask of
    you, does the United States Navy now pay for the company's
    legal expenses to contest this union election? Is that legal
    for the Navy to make that payment?
        Secretary Danzig. And the answer is that the Navy
    recognizes as a legitimate cost in the cost base that we are
    paying for legal fees. And legal fees are appropriately
    included to the extent they are within the range of
    reasonableness. I have asked our General Counsel to look at
    whether Avondale's expenditures in those regards--and our
    procurement activities--to look at whether Avondale's
    expenditures in those regards exceed that range.
        Senator Durbin. So it is the amount that you are interested
    in as opposed to the principle of whether or not a taxpayer
    should be paying a company's efforts to, in effect, reverse a
    union election?
        Secretary Danzig. I am interested in the principle as well.
    But there is some discussion in the context of revising the
    Federal Acquisition Regulations about whether these fees should
    be includable or not, and that issue is one that needs to be
    resolved at a federal level and the Navy does not have, I
    think, the power to make an individual determination about it.
        Senator Durbin. My time is up, but I agree with you
    completely. We should address that because there is some very
    serious concern among some members as to whether or not
    taxpayers should be subsidizing this legal effort. Thank you
    very much.
        Secretary Danzig. Thank you, Senator.
        Senator Stevens. Senator Harkin.
        Senator Harkin. I want to follow up, Mr. Secretary, on that
    directly. Are you telling me and are you telling us that as
    Secretary of the Navy, you do not have the authority to
    disallow legal fees submitted to the Navy by Avondale that are
    being used to overturn or to thwart a legitimate, legal
    election by the workers? Are you telling me you do not have
    that authority?
        Secretary Danzig. The legal fees incurred here are incurred
    by Avondale's contending that the election was not an
    appropriate one. That went first to the National Labor
    Relations Board (NLRB) and is now on appeal.
        So, the issue for us is, is it a reasonable legal fee as a
    part of the cost base for Avondale to exercise its legal rights
    to appeal, first, to the NLRB and then to the court.
        As I say, I have asked the General Counsel to make a
    judgment with regard to that, but the question pivots on the
    reasonableness of the fees. I do not have the power as the
    Secretary of the Navy to say as such that expenditures on
    litigation in this kind of context are not inappropriate or
    unacceptable.
        Did I say that clearly enough?
        Senator Harkin. So you do not have that authority?
        Secretary Danzig. I do not have that authority.
        Senator Harkin. Whether they are reasonable or not.
        Secretary Danzig. Exactly.
        Senator Harkin. All right, fine. I understand that.
        I understand that Avondale recently refused access to
    inspectors from the Occupational Safety and Health
    Administration (OSHA) seeking to examine the company's injury
    records. In the course of OSHA's prior inspections, work had to
    be stopped in several locations because of imminent dangers to
    workers present in Avondale's yard.
        Is this factual? Do you know about that?
        Secretary Danzig. Yes. I cannot say that I know about any
    refusal of permission for OHSA's access.
        Senator Harkin. Would you find out for me?
        Secretary Danzig. Certainly.
        [The information follows:]

        Avondale recently refused OSHA access to employee injury
    and sickness records, asserting the request was overly broad
    and would violate its employees' privacy rights. OSHA did not
    request the Navy's assistance, but at OSHA's behest a Federal
    magistrate ordered Avondale to provide the requested records.
    We believe Avondale is appealing this ruling.
        Currently, OSHA has access to Avondale's facilities and has
    advised us that it expects to complete its inspection of
    alleged safety or health hazards at Avondale by June 1999, but
    otherwise has refused to comment on the ongoing investigation.

        Senator Harkin. I am told that they refused access for OSHA
    inspectors. Now, it seems to me, Mr. Secretary, that someone
    being paid by the taxpayers in making our ships for the Navy to
    refuse the right of OSHA inspectors to come in is something
    that we should not condone. Find out for me if that is factual.
        Secretary Danzig. I will.
        Senator Harkin. And I would like to know about that.
        I am also told that Avondale has one of the highest death
    rates, three times the death rate of any other shipyards making
    ships for the Navy. I have also been told--all kinds of
    information the AFL-CIO.
        Let me say this. If only a third of it is accurate, we have
    a real problem there. And I have found usually the AFL-CIO
    gives me pretty darn good and accurate information. I have got
    to tell you that.
        They told me that last year for no reason--in 1997, 200
    Indian welders worked at Avondale under H2B visas approved by
    the U.S. Government. Yet they go on to say that qualified
    workers in the New Orleans area would like to work full-time at
    Avondale for the prevailing industry wage for about a third
    more than what Avondale pays. So they have plenty of workers
    there. Yet they have 200 people coming in under H2B visas. Is
    that factual?
        Secretary Danzig. They do have a significant number of
    people coming in under those visas, and we have talked directly
    with the Department of Labor about this.
        The one thing I would note, Senator, is that there are, I
    think, two separate questions here. One is the character of any
    given piece of conduct--the appeal of an election, the openness
    to OSHA, the accident rates.
        The other is the question of whether the Navy is an
    appropriate entity to do that. And it is the second question
    that gives me considerable pause as Secretary of the Navy. I do
    not think, for example, that the Navy is the appropriate entity
    to adjudicate whether an election was appropriately conducted
    or whether a union should be certified. That falls within the
    domain of the NLRB.
        And, similarly, the issue of visas is one that is a
    Department of Labor issue in conjunction with the Immigration
    and Naturalization Service. And though I have a real interest
    in this and have had direct discussions myself with the Deputy
    Secretary of Labor, it is not an issue that I can take action
    with regard to.
        Senator Harkin. I am going to get to an important point. I
    am told that a judge has found that Avondale broke the law more
    than a hundred times, including illegally firing 28 workers.
        Now, it seems to me, again, if this goes on and on and on
    that you cannot just wash your hands of it, Mr. Secretary.
        Secretary Danzig. I agree with that.
        Senator Harkin. It seems to me you have got to get a grip
    on this one. And I really believe that some action has to be
    taken.
        What I would like to know is do we have to do something? Is
    there something that we have to do here that will enable you to
    take some positive action?
        As I said, I will not swear that all the facts I am giving
    you are true. I am just saying that this is what I have been
    given.
        Now, I am going to tell you one fact that is true. You
    should write this name down.
        Sidney Jasmin was one of the workers I met with last year.
    He came up here to see me about this issue, and then he was
    fired. The National Labor Relations Board basically has issued
    a charge asserting this is in retaliation for his visiting with
    members of Congress. Now, that really does disturb me, that
    someone comes up here exercising their legitimate,
    constitutional right and they get retaliated against.
        Secretary Danzig. Senator, if I can, I will just suggest
    three avenues here. One is what we have already discussed. It
    is entirely plausible and this body can well speak to this
    point to change the Federal Acquisition Regulation and give us
    authority in regard to these issues.
        Second, you will know that there is a proposal which has
    already been approved by the Department of Defense for Avondale
    to be merged into Newport News. Newport News operates
    considerably differently in terms of its labor activities.
        Senator Harkin. They sure do.
        Secretary Danzig. I have talked with the president of
    Newport News about this. And I think there is a distinct
    possibility that this labor situation will be resolved either
    through the resolution of the Court of Appeals decision or as a
    consequence of the merger.
        The third thing is, I would underscore that I have actively
    talked with the Department of Labor about some of these issues,
    and you may want to do that as well.
        Senator Harkin. Oh, I have. I have and I will continue to.
        Secretary Danzig. All right.
        Senator Harkin. I understand the contractors have their
    legitimate rights, too. But you have a pattern here. The
    pattern has gone on for far too long. And out of that pattern
    emerges a company that is just thumbing its nose at labor law
    and labor relations. And I think something has to be done about
    it pretty soon.
        I see my yellow light is on. I have one more question, but
    I will see if we get another round.
        Senator Stevens. You can finish up.
        Senator Harkin. OK, two minutes.

                                    Trident

        Admiral Johnson, if I can shift abruptly here, Trident
    ballistic missile submarines. You pointed out that the United
    States can reduce its fleet from 18 to 14, with an annual
    savings of hundreds of millions of dollars.
        It is my understanding this would require congressional
    approval through a repeal of the congressional ban on reducing
    the number of deployed nuclear missiles, or at least Congress
    would have to allow DOD some more flexibility in deploying our
    nuclear arsenal.
        Am I stating it correctly and could you elaborate on that a
    little bit?
        Admiral Johnson. Senator Harkin, my understanding is that
    right now until such time as START II is ratified by the Duma,
    we must maintain an 18-boat SSBN force.
        Senator Harkin. That is according to Congress?
        Admiral Johnson. Yes, sir.
        Senator Harkin. So you have to maintain the current force
    unless and until Congress does something about it. You have to
    maintain the 18.
        Secretary Danzig. That is correct, sir. And, indeed, there
    are things being examined right now that would have us look at
    the possibilities for those four boats if and when we are
    allowed to come from 18 to 14. What do we do with the other
    four SSBN's. That is all being looked at right now.
        But for the moment, we must comply with the 18-boat force.
        Senator Harkin. Thank you, Admiral.
        Senator Stevens. Thank you very much, Senator.
        Senator Dorgan.
        Senator Dorgan. Mr. Chairman, thank you very much. Mr.
    Secretary and Admiral and General, welcome. You do not have a
    large presence in North Dakota, the United States Navy. Well,
    we have invited the Navy there for some inland activity in one
    of the----
        Senator Stevens. Nebraska has got a Navy. I do not know why
    you should not have one.
        Senator Dorgan. Well, I have talked to the Secretary about
    this.
        Let me just ask a question on the Trident D-5 ballistic
    missile. I want to get your thoughts about something. As you
    know, one of the departed members of this subcommittee, Senator
    Bumpers, continually raised this question about the acquisition
    of the D-5.
        And I would like to know, if you have the information with
    you, what is the proposed acquisition of D-5's in the future
    according to the Quadrennial Defense Review (QDR)? Do you know
    and what the cost would be about?
        Secretary Danzig. I am happy to comment on this, but if you
    want to go first.
        The intent is to go ahead--and as you know, at the present
    moment, we have got ten of our Tridents on the East Coast all
    D-5 equipped. We have eight Tridents on the West Coast. They
    are not D-5 equipped. The intent is to go ahead and modernize
    those Tridents on the West Coast replacing the C-4 missiles
    that are there with D-5's.
        If, as has just been discussed, we move to a 14-ship
    Trident force, then we will be buying D-5's adequate for four
    Tridents. If we have to go to an 18, then we will because of
    the aging of the C-4's and because of the utility of having all
    our submarines consistently equipped, we will buy D-5
    production capable of covering all eight additional Tridents.
        Senator Dorgan. And what is the difference in cost of the
    D-5's for the four boats?
        Secretary Danzig. Unless the CNO is good enough to have
    that number in his head, I will have to give that to you for
    the record.
        Admiral Johnson. No, I think we would like to give that to
    you for the record. If I could just add to what the Secretary
    said, though, sir.
        It is very important to us that at 14 boats we have an all
    D-5 force. I think that is a point worth making. The Secretary
    may. I will just say it in my own terms. We need a 14-boat--my
    personal red line for the Navy in strategic deterrence is 14
    boats, two oceans, all D-5.
        Senator Dorgan. Why is that important?
        Admiral Johnson. Because of the capabilities of the D-5
    versus the C-4.
        Senator Dorgan. Do you know the acquisition cost of a D-5?
        Admiral Johnson. I will provide that for the record, sir. I
    can't pull it----
        Senator Dorgan. It would be helpful if you would provide
    the procurement schedule and the acquisition cost of that
    program. I would like to talk to you some more about that
    program in the coming weeks before we move an appropriations
    bill to the floor.
        [The information follows:]

        The cost of additional D-5 missiles required for an 18 D-5
    Trident II SSBN force is approximately $2.2 billion above the
    Navy's current program. This figure includes missile
    procurement and re-establishing the missile production base.
    Since the D-5 missile is presently in low-rate production, many
    vendors have elected to have their production lines bought out
    and pursue other ventures. These various component production
    lines would have to be started to produce additional missiles
    beyond those programmed for a 14 Trident II D-5 SSBN fleet.
    Concurrently, there would be additional costs to support the 18
    Trident II D-5 SSBN fleet long-term above the Navy's present
    program. It would require $2 to $3 billion within the Future
    Years Defense Program (2001-2005) to maintain an 18 Trident II
    D-5 SSBN fleet. These costs include the refueling overhauls
    that would be required to maintain these submarines beyond the
    2003 to 2004 time frame and backfit to the D-5 weapons control
    system.
        The total acquisition cost of the TRIDENT II D-5 missile
    program, including both development and production, is $26.9
    billion, as reported in the December 1998, Selected Acquisition
    Report. Of that total, $3.4 billion is budgeted in fiscal year
    2000 and outyears, including years beyond the FYDP, to support
    total life-cycle requirements of the D-5 missile.
        A total of 425 D-5 missiles, including both shipfill and
    flight test missiles, are required to support a force structure
    of 14 Trident II D-5 submarines. The D-5 missile procurement
    schedule is as follows:

    Fiscal year 1999 and prior........................................   360
    Fiscal year 2000..................................................    12
    Fiscal year 2001..................................................    12
    Fiscal year 2002..................................................    12
    Fiscal year 2003..................................................    12
    Fiscal year 2004..................................................    12
    Fiscal year 2005..................................................     5
                                                                      ______
          Total.......................................................   425

        The flyaway unit cost of the 65 D-5 missiles remaining to be
    procured in fiscal year 2000 through fiscal year 2005, including both
    airframe and motor and guidance system costs, is $28.5 million, as
    reflected in the fiscal year 2000 President's Budget request.

        Senator Dorgan. Mr. Chairman, that is all I have. Again, I
    had an opportunity to visit with the Secretary some while ago
    and the general and the admiral. I very much appreciate your
    leadership and appreciate your being here. I was at a hearing
    that the chairman was at earlier today and I regret that I was
    not here for your opening statements.
        Secretary Danzig. Thank you.
        Senator Stevens. Senator Hutchison.
        I might point out to the new Senators that just came in
    this is General Krulak's last appearance before our committee
    unless we have some, God forbid, crisis that requires some
    additional money.
        Senator Hutchison.
        Senator Hutchison. Thank you, Mr. Chairman. I, too, just
    left another hearing and I apologize for not being here. It was
    quite interesting after you left. So we just finished.
        Let me say that I do want to mention General Krulak's
    retirement. The last General Krulak to serve in the Marine
    uniform for 70 years and what a great lifetime of service you
    have given and your father before you and grandfather.
        And I understand your son has stayed sort of in the fold,
    though not exactly.
        General Krulak. Jay Johnson took him from me.
        Senator Hutchison. But Admiral Johnson is very pleased to
    have the next Admiral Krulak.
        But I do appreciate all you have done for our country and I
    have appreciated working with you. And I have to say that I
    will never forget the man that introduced me to SOS. I will
    never forget it. [Laughter.]

                           Recruitment and retention

        I would like to talk about a couple of things. Of course, I
    am sure it has been mentioned, our readiness concerns, our
    recruitment concerns for the Navy. I was very disappointed that
    the Navy felt it had to lower the standards in recruitment. And
    I hope that is temporary, frankly.
        I hope that when you are able to look at the issue and
    determine a strategy that we will not lower the standards, but
    instead increase the interests in serving in the Navy because
    it is such a great service.
        I would like to ask you a question based on the pay raise
    issue that we have addressed in the Senate in the last couple
    of weeks and that is, I think, it was a Rand study that
    actually showed that an overall pay raise is not the best
    approach for recruitment and retention problems, but rather
    targeted pay raises in the areas where you are having the most
    difficulty recruiting qualified people or retaining qualified
    people.
        And I wanted to ask your opinion, both Mr. Secretary and
    Admiral Johnson, if you think that that is a better approach
    and should we be looking at something different from the
    across-the-board pay raise that we have just passed?
        Secretary Danzig. Senator, I think you are very right to
    emphasize the utility of targeted bonuses. The Navy more
    vigorously, I think, than any other service has moved toward
    just such a program. And part of S. 4 that I am very
    enthusiastic about and a part of our program in general, is
    targeted bonuses.@
        I think there are about $100 million of Navy bonuses
    proposed for this year either through S. 4 or through other
    means. A good vivid example is our surface warfare officers. We
    know that our retention at present is about 24 percent. We
    would like to get up to 38 percent. How do we bridge that gap?
        Our division officers as they move up to department heads
    in the Navy go to department head school. I know exactly how
    many people I need to get into department head school, 257. I
    can give 257 bonuses of a substantial kind. It is a very
    concrete, identifiable number to an extremely targeted audience
    and address by that means the surface warfare retention
    problem.
        So I entirely agree with you and with Rand. These are very
    high-value, high-reward kinds of activities.
        Having said that, I would encourage though that we not--and
    I do not think you intend to--slight the desirability of some
    overall force-wide general pay raises and of doing things like
    rolling back the Redux and revising the pay table because those
    provide the foundation across the whole force on which we build
    with respect to the individual targeted bonuses. So I think it
    is a question of achieving a mix of those two things and I
    think the program we laid out for you provides you with that
    mix.
        If I can, I would like to take just a moment on the
    question of standards. But if you would prefer to have the CNO
    or anyone else comment on this one topic, maybe I can come back
    to that question, whatever you would like.
        Senator Hutchison. Why don't we stay on that and then I
    would like to have you address standards if you can.
        Admiral Johnson. I would just add very briefly, I mean, I
    agree exactly with what the Secretary said. I believe that the
    pay triad that we talk about in terms of the overall pay raise,
    the pay table reform, and the Redux repeal is fundamental in
    this year's budget. We have to do that for the force.
        In addition to that, as the Secretary described very
    adequately, we have to have the flexibility to be able to
    target specific critical skills. We have them in the officers'
    side with surface warfare officers. We have them with aviators.
    We have them for the first time ever with our special warfare
    SEALs, and we have them with the submarine officers.
        Ditto on the enlisted side in the technical skills, the
    selective reenlistment bonuses, for instance. We have to be
    able to target those technical skills in order to be able to
    compete to keep those people in the force.
        The enlisted--an E-6, a first class petty officer with ten
    or twelve years of service, base pay is about $2,000 a month.
    That petty officer, if you run that with other numbers, you
    could say, well, he makes maybe $25,000 to $30,000 a year.
        What we are being told or what I am being told from friends
    in corporate America, they will take that same specially
    skilled petty officer--I have a friend who runs a company who
    said, ``I need 72 of them tomorrow and I will pay them. I will
    start them at $50,000 apiece sight unseen just because I know
    what I am getting from the Navy.'' So we have to be able to
    compete with that. So it is the basic package and the special
    skill targeted bonuses that I think are really essential for us
    to compete.
        General Krulak. Can I make one comment that may be a little
    bit different here.
        One, I think the triad is critical. Critical. Two, I am
    very concerned when you go above the triad where the money is
    going to come from because, in fact, what these young men and
    women of character also want is to operate good equipment that
    does not break down all the time.
        And I am very concerned that we not bear the brunt of the
    entire S. 4 at the cost of warfighting. I mean, that is what we
    are here for, to fight and win. And if I do not have the gear
    to do that, these kids, their quality of life is coming home
    alive. And so I am concerned that--I believe--and I think Jay
    agrees--that the triad that the Joint Chiefs talked about is
    critical and that will help.
        Our concern as you go above that, is that money going to be
    there or is that going to eventually come out of all the
    readiness issues that are also part and parcel of why somebody
    stays in? Because they are part of a first-rate outfit?
        Secretary Danzig. And all three of us are as one on this
    point.
        Admiral Johnson. We are, indeed.
        Senator Hutchison. Let me just ask you quickly. I know my
    time is up, but isn't increased OPTEMPO also taking some of
    those valuable dollars, the peacekeeping missions and hurting
    recruiting and retention because the OPTEMPO is----
        General Krulak. One of the great things about your Navy and
    Marine Corps team, of course, is when you buy the Navy and the
    Marine Corps, you buy forward deployed forces and the OPTEMPO
    is there. They are going to deploy at this six months and you
    have already paid for that. So to the extent that we are
    compared to the other two services, it is not quite as bad.
        The question of OPTEMPO, of course, is they want to know
    when they are going to be gone and they want to know when they
    are going to be home. But the actual cost of readiness you have
    already paid for.
        Secretary Danzig. If I can, I will just take a moment on
    the question of standards if it is all right with the chair. If
    it is agreeable to you, Mr. Chairman, perhaps I just can take a
    moment on the last question that Senator Hutchison asked with
    respect to standards, but I do not want to disrupt the time.
        Senator Stevens. I am planning a trip back here.
    [Laughter.]
        Secretary Danzig. If I can just say, you, in my view, are
    coming from exactly the same place that I am with respect to
    quality and the importance of quality in Naval recruits and
    Marine Corps recruits. So I entirely agree with your concern.
        But I actually do not hope, as you said, that it will turn
    out to be a temporary thing that we take an additional 2,600
    non-high school graduates out of our total force of 53,000.
        It should be a temporary thing if it turns out that those
    people are not high-quality sailors and we ought to go back to
    the emphasis on a high school diploma if this does not work. We
    are collecting data on it, and in that respect I am entirely in
    agreement with you.
        But my belief is that we will, in fact, acquire better
    sailors by taking people in the last increment here who are not
    high school graduates and are proven performers in other ways.
    And the proof of that performance in expectation before they
    come in will be in the fact that they have higher test scores,
    dramatically higher test scores than the high school graduates
    they may be displacing, that they will have an employment
    history which shows their stick-to-itiveness and their quality,
    and that they will have substantial character references that
    we can trust.
        In the end, the proof of the pudding will be how they
    perform in the fleet. And we have a long record of many such
    people that suggests that they will perform very well. But I
    agree with your notion that time will tell. That is where I am
    coming from.
        Senator Hutchison. Actually, there have been studies, which
    I am sure you have, on the retention rate of non-high school
    graduates and high school graduates. So you have a record. Now
    maybe you can improve on it. But I hope you will be true to the
    record or true to the issue.
        Secretary Danzig. Right, right, absolutely right. The
    studies of non-high school diploma graduates in general show
    that they have a lower retention rate than high school diploma
    graduates. I entirely agree with that.
        We also have done studies that suggest that we can select
    from that population of non-high school graduates, people who
    have the proven performer characteristics I have described and
    take from that group exceptional sailors who, for example, can
    perform critical skills better than high school graduates who
    have lower test scores.
        So that is where I am coming from. We have long experience.
    The Desert Storm force had 15 percent non-high school graduates
    in it. We know they can perform very well. But you are also
    correct that historically they have had a higher attrition
    rate.
        Senator Hutchison. Thank you.
        Senator Stevens. Thank you very much, Senator.
        Senator Cochran.
        Senator Cochran. Mr. Chairman.
        General Krulak, let me congratulate you on your excellent
    service as Commandant of the Marine Corps. It has been a
    pleasure to work with you and to meet with you at your
    residence for breakfast a couple of times and observe you in
    this capacity very closely. And I just cannot tell you how much
    we are going to miss you. We appreciate the valuable service
    you have rendered to the country.
        General Krulak. Well, thank you, sir.

                                  LHA and LHD

        Senator Cochran. I was reading a copy of an article in Sea
    Power, November 1998. It is an interview with you. And it talks
    about your career and some of the things you see coming along
    that we need to take into account.
        One of the subjects that was discussed was whether or not
    we need to have another Wasp class LHD ship on the schedule
    earlier rather than later. They talk about the service life
    extension program of the LHA, and you compare that with the
    benefits that would accrue from having a newer ship built
    earlier, an LHD-8.
        Could you comment on that subject for us? We are going to
    have to look at this Navy program of LHA and LHD and what you
    see the requirements are in the future.
        General Krulak. Yes, sir. I think that the Secretary of the
    Navy and the Chief of Naval Operations and myself all agree
    that the twelve big deck ARGs coupled with the twelve big deck
    carriers is the forward deployed forces for our Nation.
        As an example, right now we have two big deck amphibious
    ready groups (ARGs), one of them right off the coast of Greece
    and one of them in the Persian Gulf. They are critical. There
    is absolutely nothing that can compare for a Marine like that
    big deck ship. Ninety-plus percent of our aviation is on it. It
    carries 70 percent of all the rolling stock, about 60 percent
    you can put of our personnel in the Marine Expeditionary Unit,
    unbelievable capability.
        They are in the midst right now of a study on whether or
    not to use the LHA or to go with the LHD. That study is due out
    very shortly. We have had a discussion on this. It is our
    belief that the study is going to say it makes sense to go with
    the LHD sooner than later.
        Senator Cochran. One question, then, is about the cost.
    Comparing the cost, of course, there is an initial outlay for a
    new ship that would be greater than the life extension program
    of an older ship. But what do you get for that cost? Can you
    compare those numbers for us?
        General Krulak. You, obviously, get a ship that will last
    for at least 40 years and that will meet the requirements of
    the 21st century system such as the V-22, the advanced
    amphibious assault vehicle (AAAV), and other systems that we
    are going to see as we move into the 21st century that we do
    not have right now.
        Senator Cochran. What about operating efficiency? I hear
    that there are fewer hands that will be needed. Maybe Admiral
    Johnson----
        Admiral Johnson. All of that. And in fact, as this evolves,
    this is a Navy-wide statement but you can target it to an LHD-
    8. You can target it to DD-21.
        There is great work being done on the surface combatant
    force to drive down the operating costs across the board in
    manpower, in technology insertions. All of that would be
    focused like a laser beam on the upgraded LHD that you would
    call LHD-8. So that would be fundamental to anything we do with
    it or DD-21 or anything else.
        Senator Cochran. Do you agree with General Krulak on his
    assessment of the need and the importance of building the new
    ship?
        Admiral Johnson. I do, sir. And, as the three of us have
    talked, what we see and you know as our budget sits today we
    have got an LHD fully funded in the out-years.
        But what is happening right now is we are sort of coming to
    a merge with this study. It is all coming together right now.
    There will be granularity on this here within a matter of
    months at most and likely weeks that I think will follow what
    we intuitively feel to be the right answer and that is that we
    need another LHD.
        Senator Cochran. Right now it is programmed--you mentioned
    the out-years--I think fiscal year 2004 or 2005?
        Admiral Johnson. Yes, sir. It has got an advanced
    procurement in 2004 and a full buy in 2005 is the way it sits
    in the budget right now.
        Senator Cochran. Well, is there not efficiency, too, in the
    shipbuilding assets that we have in terms of having the LHD
    constructed sooner rather than later in terms of losing people
    who are equipped and trained and ready to build the ship?
        Admiral Johnson. Yes, sir. Mr. Secretary.
        Senator Cochran. Secretary Danzig.
        Secretary Danzig. The short answer is yes.
        Senator Cochran. Is there a longer answer that could be
    persuasive? [Laughter.]
        General Krulak. It sounds great to me. [Laughter.]
        Secretary Danzig. Certainly. As the CNO has emphasized, I
    think we will be in a position to provide you the richest
    detail with respect to the cost and benefits of the LHD versus
    the LHA SLEP when we have the study in hand.
        But the continuity in increasing the employment of welders,
    for example, and maintenance of a level work force is
    attractive in terms of accelerating some ship procurement into
    2000. We have succeeded in getting ship procurement for 2001
    and out to eight ships a year, and in the last year of our
    program to nine.
        I think that is a very substantial achievement, but I do
    recognize that we only have six ships in 2000 and a leveling
    certainly has advantages, a leveling of those procurement
    numbers to a higher number in 2000.

                                 DD-21 program

        Senator Cochran. The DD-21 program is also an important
    part of the plan for the Navy shipbuilding program, is it not?
        Secretary Danzig. Definitely.
        Senator Cochran. Could you tell us, and maybe you already
    have in response to other questions, about what your proposals
    in this budget are for the DD-21 program?
        Secretary Danzig. Certainly. I will say a little bit and
    maybe the CNO would like to add.
        We have not really had a chance to talk about it. This is
    very much our ship of the 21st century. It has land attack
    capabilities through its guns and missiles that give us the
    ability to do what we care most about, which is project power
    from sea to shore.
        It has got enormous attraction in terms of its manning
    levels. We have a 95-person crew anticipated for the DD-21.
    That generates for us very great savings as compared to crews
    of 300 and more associated with our DDG-51s and our cruisers.
        My sense is that over the life cycle of the 32 DD-21's that
    we would build, we could save as much as $25 billion because of
    the reduction in crew and the greater efficiencies in the life
    cycle maintenance and the like, really two-thirds of the life
    cycle costs of that ship.
        We envision the first procurement of DD-21 in 2004 and we
    are investing now in study money, and we have two teams
    competing to make presentations to us with regard to the
    development of that ship.
        I do not know, CNO, if you want add anything to that.
        Admiral Johnson. Only to say, Senator Cochran, that DD-21
    is the first member of the Surface Combatant 21 family. We are
    very excited about it, and the strength of it is, to me, is
    that it epitomizes the Navy-Marine Corps team because the
    requirements for the weaponry that that platform will carry
    were built with the Navy and the Marine Corps working the
    numbers together.
        So that we can, indeed, shoot an extended range guided
    munition out of a five-inch 62 gun at 63 miles with precision
    accuracy, that we can shoot a vertical gun 100 miles with that
    same kind of accuracy, that we can shoot a missile, a vertical
    launch missile with precision to 150 miles, and we can fire
    tactical Tomahawks and we can support the marines ashore
    exactly the way they need to be supported. So it is a powerful
    combat asset with great technology applications.
        And as the Secretary said, we are on stride right now. We
    have got $270 million in research and development (R&D)
    investment in 2000 to nurture the teams to help them build
    toward this down select in 2001. So we feel very good about the
    program.
        Secretary Danzig. If I could just add. We have a general
    emphasis that is important to note regarding ship R&D. It is a
    consistently underfunded area historically. And the program in
    front of you shows very dramatic plus ups in that regard not
    only with respect to the DD-21, but also, I would note, with
    regard to the carrier.
        Our carrier investment in research and development has
    frequently been as low as $5 million a year. It is an
    astonishingly low number compared to the billions we put in
    aircraft R&D.
        The program in front of you, has as a result of our joint
    efforts, $1.5 billion in carrier R&D to transform the carrier
    to a weapon system of the 21st century as well.
        So DD-21 fits into a general picture that we are trying to
    emphasize to you. And I am sure we will have an opportunity to
    talk about that further.
        Senator Stevens. Thank you very much.
        Gentlemen and ladies, let me tell you. I know that these
    gentlemen are hosting a luncheon for the distinguished chairman
    of the Armed Services Committee at noon.
        Senator Domenici will have his ten minutes and then I have
    some questions. The clock was screwed up. I only got five
    minutes to start with. So I am going back in the second round.

                            Pay raise and retention

        You go ahead, Senator Domenici.
        Senator Domenici. Thank you very much.
        Mr. Chairman, you will remember last year in lieu of
    putting something in the statute regarding getting an outside
    evaluation of why were our military men and women unhappy and
    why were they not, and you and I wrote a joint letter to the
    General Accounting Office (GAO). They are going to give us
    their final report the first week of April. You have been
    asking how does that pay raise bill affect our ability to keep
    people in.
        You are aware, are you not, that the GAO has undertaken a
    very broad based evaluation talking to men and women in the
    military, getting their conclusions about why they have
    concerns and the like. Did any one of you participate in any
    way in that GAO study that you are aware of?
        Admiral Johnson. Not personally, no, sir.
        Secretary Danzig. No. I can say for myself that we have all
    been doing a very parallel thing in terms of talking with
    members of the services. But I think our feeling is GAO
    obviously should do their work with some independence and we
    have not been intimately involved with it.
        Senator Domenici. I understand that. But I am sure there
    has been some concern whether we have hit the right things in
    terms of retention and ability to get more people to sign up in
    that bill we passed.
        Surely the pay provision needs to be seriously considered,
    but I am very concerned that the price tag for that bill may,
    indeed, be such that many things that you really need you
    cannot get in the areas of shortcomings that everybody has been
    talking about.
        I would hope that before we are finished we have the
    benefit of the in-depth studies that you have done with
    reference to retention and what you think is causing the
    problem.
        It is not the first year and I guess you know that, Mr.
    Secretary, that is of concern under S. 4. It is the third,
    fourth, fifth and sixth years where the money gets very, very
    big. We can afford the first year from what we can see in
    numbers.
        Another thing has concerned me, and this is the only
    question I have today: Why are the Marines so successful in
    both retention and recruiting when it would appear that what we
    expect of them is more rather than less of the kinds of things
    that the other military services are saying cause men and women
    not to want to stay in?
        They are overseas longer. Everything that seems so
    difficult, they do more of and yet they have better retention
    and better recruiting. Why is that?
        Secretary Danzig. Go ahead. You can go first.
        General Krulak. I think there are several reasons. One, we
    early on decided we were going to put our very best against
    this problem. No one goes to recruiting as an officer that his
    jacket is not personally approved by me. I approve every single
    officer who goes onto recruiting duty.
        In order for my staff NCO's to go they must be screened at
    my headquarters level, and then the commanding officer of that
    individual must also give a thumbs up. They are the best in the
    Corps. We literally take our very finest and send them either
    to recruiting duty or to be drill instructors.
        Third, they are rewarded. If they successfully complete
    their recruiting tour, that is a very big plus. It is almost a
    guarantee for their next promotion.
        Four, they are selling a hell of a product and that is
    being a United States Marine.
        Senator Domenici. I thought that would be No. 1.
    [Laughter.]
        Secretary Danzig. This was building to a climax.
    [Laughter.]
        Let me just note that I just have immense admiration for
    the management judgments made by the Marines with regard to
    their recruiting issues. Some of it is just resources.
        The Marines consistently have overridden the number of
    billets. That is, they have assigned 105 percent of the
    individuals they think they need to recruiting. For a variety
    of reasons not attributable to Admiral Johnson's leadership in
    any way but prior decisions that were made, the Navy was
    underfunded in that area.
        I would also underscore that there are differences in the
    requirements. The requirement for a nuclear officer, for
    example, in the Navy is obviously demanding in a way that is
    different from the Marine requirements.
        Marines, in terms of retention, have a very different
    approach to force manning and an appropriate one for the Marine
    Corps, but it would not be appropriate for the Navy. The
    Marines retain a much smaller percentage of their first term
    enlistees than the Navy seeks to or than the Navy does.
        So I think there is a fair amount to be learned from the
    terrific example of the Marine Corps here, but these are not
    exactly symmetrical cases.
        Senator Domenici. Thank you very much, Mr. Chairman.

                                  Rescissions

        Senator Stevens. Yes, sir. Thank you.
        Mr. Secretary, this budget that was presented to us by the
    President assumes reductions or changes that are very difficult
    for us to comprehend. The first is $1.65 billion in unspecified
    rescissions. Congress has only rescinded an average of $250
    million annually for the last four years. No Congress has ever
    rescinded $1.65 billion.
        Second, this budget proposes to incrementally fund military
    construction for the first year with a credit of $3.1 billion
    for deferring it, the balance. It is our studied judgment that
    deferring military construction increases costs in the second
    and third years. It does not decrease it.
        Third, there is a $2.9 billion credit for real estate
    investment tax revenues and there is a $6.6 billion credit for
    military retirement trust fund payments.
        Now I assume that you are aware of these and you know--let
    me ask you this. Has anyone identified anywhere any accounts
    within your jurisdiction where the $1.65 billion could be
    rescinded?
        Secretary Danzig. I have not seen the specific rescission
    numbers that underlie that. So I will have to take a look and
    answer that particular one for the record.
        Senator Stevens. I will be glad to have it on the record. I
    do not want to go into a long discussion because Senator Inouye
    has a couple of questions.
        [The information follows:]

        It is my understanding that the $1.6 billion unspecified
    reduction contained in the fiscal year 2000 President's Budget
    request is to be applied Defense wide. The specific Navy
    programs that would be reduced have not been identified.

        Senator Stevens. I have got to tell you. I have seen smoke
    and mirrors in my life. But these do not have either one. It is
    a broken mirror. We cannot find that money. And yet these
    gentlemen think they are going to spend it. They are going to
    spend the savings that are transferred to their accounts. It is
    just not there.
        Now, this really worries me because I know my friend is
    going to put up the wall between defense and nondefense again
    in the next year if it falls down right now. But those credits
    are to this part, to the defense part. And the savings are
    supposed to be there within the Defense Department in order to
    make available the money that we are telling the armed services
    is there for the year 2000.
        I am going to submit to you some questions for the record
    on that. But I just want to tell you I believe that someone--
    and I am not blaming you all--I believe that someone over at
    the Office of Management and Budget (OMB) has got some new
    gimmick wheel, and you turn it, and you decide who gets the
    reduction. There are no winners in any one of those for the
    Department of Defense.
        Now, second----
        Secretary Danzig. Mr. Chairman, could I----

                                   Retention

        Senator Stevens. I want you to ask it for the record, my
    friend. I want you to get to your lunch, and these guys have
    some questions to ask, and I only had five minutes to start
    with. So I am going to just ask them to you to make sure that
    everybody knows I have asked them.
        I am told that the U.S.S. Harry S. Truman is deployed
    undermanned and is experiencing great strain. The operational
    tempo (OPTEMPO) and the personnel tempo (PERSTEMPO) rates are
    hurting retention. I want to know, Admiral, is that true?
        Admiral Johnson. U.S.S. Harry S. Truman is not yet
    deployed, sir. But the point is well taken because the U.S.S.
    Enterprise is deployed and she is down 400 and some. So, yes,
    in the short term that is true and we are working that issue
    hard. It is partly a shortage of people. It is partly a
    distribution problem. But the facts as you present them are
    correct.
        Senator Stevens. Well, I first heard the phrase a hollow
    military in connection with vessels of the United States Navy.
    They could not get away from the dock at Norfolk because they
    are undermanned and undersupplied. That happened during the
    Carter administration. It led to us having a total revolution
    in the way we handled spending for defense.
        Now, how did those lights come on so quick? [Laughter.]
        I am in charge of everything but those lights.
        Secretary Danzig. Can you solve our problems as rapidly?
        Senator Stevens. That's ringing, that is tolling the bell
    on us that this is a hollow Navy. If it is a hollow Navy, it is
    going to be a hollow Marine force and a hollow Air Force and
    Army if that is happening. We are getting more and more reports
    about shortage of supplies and shortage of material and
    shortage of people.
        Now, I have some questions on that for the record, too. But
    that is worrisome to us when you mix it with that prior
    question I just asked you of where do we find the money that
    OMB says we have to spend to increase defense spending this
    year. I am talking about the year 2000.

                                      V-22

        Second, now, my friend you are leaving. But I remember your
    successor and I and Senator Inouye battled one thing against
    the Republican administration, Republican Secretary of Defense
    and we won the V-22. The buck stopped right here three times
    and we insisted on the V-22.
        Now I am told that the V-22 has some problems during sea
    trials. Can you tell us, have those been solved?
        General Krulak. Yes, sir. The V-22 is doing great. We are
    over a thousand hours on those engineering and manufacturing
    development (EMD) aircraft. It has completed the sea trials. It
    had a software issue that was a minimal problem.
        This aircraft is doing magnificently. We are standing up
    the training squadron in less than three months. We will be
    initial operationally capable in the year 2001.
        Senator Stevens. Has there been a second incident with
    regard to the wind rock oscillation problem on the carriers?
    Was that totally isolated.
        General Krulak. Yes, sir. That is totally isolated. We are
    going back. Jay and I are going to put that thing back on. I
    mean, we are talking about a success story, not something that
    we need to be concerned about.
        Senator Stevens. That is good news for me.
        Admiral Johnson. That was one of the testing cautions,
    Senator Stevens--Mr. Chairman. You know, we are very cautious
    when we take these birds to sea for the first time. They
    elected to bring it back. We have got some computer adjustments
    to make. We are very confident, as Chuck said. I have flown
    that airplane, too. It is a great machine. We need it.
        Senator Stevens. Last night at the United Services
    Organization (USO) dinner there was a naval officer that came
    up to me--I think he is a retired admiral--but he talked about
    the V-22 and said that he thought the fight we put on in 1991
    and 1992 will make the difference in the next war as far as the
    Marines are concerned. That was our belief then and it is still
    my belief.
        Senator Inouye has five minutes of questions. I am sorry,
    gentlemen.
        Senator Inouye. If I may just follow up on the V-22, the
    fellows in Kaneohe want to know when are they going to get
    theirs.
        Senator Stevens. I had one other question. Can I just take
    it back one second.

                                    Okinawa

        I am hearing rumors that you might stand down some of the
    troops on Okinawa. If that is the case, before you leave I
    would like to have you come up and visit Kodiak. There used to
    be an enormous Marine base in Kodiak.
        General Krulak. My wife still does not forgive you for that
    little gift you gave me when I was up there last year. Do you
    remember what that was? It was a fossil.
        Senator Stevens. We do not want to go into that.
    [Laughter.]
        I will tell you about the time I gave one to Barry
    Goldwater and you will understand it even more.
        General Krulak. I got it, sir.
        Senator Stevens. You still own the property on Kodiak?
        General Krulak. Yes, sir.
        Senator Stevens. The Marines still own that property on
    Kodiak?
        General Krulak. Aye, aye, sir.
        Senator Inouye. Mr. Secretary, I have a question that
    Senator Byrd has asked me to submit to you. It refers to fiscal
    year 1998 and 1999 when we appropriated $3 million for the
    Direct Support Squadron Readiness Training Program and somehow
    the funds have not been released for these two fiscal years.
    And, if I may, I would like to submit the statement and
    questions referring to this.
        Secretary Danzig. Good. I would be happy to respond to that
    on the record, but I will just note here that this is a
    particular appropriation I have focused on. It is with the
    Reserve Command. And I would like to see that money flow. I
    think we can address the Senator's concerns.
        Senator Inouye. If I may, I would like to ask General
    Krulak, now that we have had new elections in Okinawa, what is
    the present status of your forces there?
        General Krulak. There has been a great change in the
    relationship between the government on Okinawa, the government
    in Japan and all U.S. forces on Okinawa. The change has been
    for the good and not for the bad.
        I am on my way out there myself to pay a call within the
    next two weeks. I get nothing, but very positive reports back
    from Lieutenant General Libutti and General Fulford regarding
    how we are doing. At the same time, we continue to seek
    opportunities to train off island.
        As you know, we are now doing our artillery firing totally
    off island. We are up in mainland Japan. We have a great
    reception there. That has proven to be very positive.
        We are also training in Thailand, Australia, Indonesia. We
    are looking to possibly move back in small numbers into the
    Philippines and obviously into Korea. So we are doing all in
    our power to lessen the day-to-day footprint of Marines on
    board Okinawa.
        Senator Inouye. What is the latest on the replacement of
    Futenma Air Base?
        General Krulak. That is a great question, sir. We have
    gotten a break through it because of the new election down
    there. There is one township right outside of White Beach just
    a short while ago stood up and said we would accept a look see
    for that. Also, further north the willingness to look at the
    movement of Futenma.
        So we now have two sites that we are looking at. The U.S.
    Government and the Department of Defense is working very hard
    with the government of Japan and the government of Okinawa to
    come to as quick a settlement as possible on where we want to
    go and what it is going to look like.
        Senator Inouye. General, I am planning to visit Okinawa and
    before I do, if I do at all, I would like to sit with you to
    discuss the situation there.
        General Krulak. Absolutely. I will be back from Okinawa in
    about two weeks.
        Secretary Danzig. I would be grateful as well, Senator, if
    that discussion could include our substantial efforts to
    improve the situation with respect to the incinerator on Atsugi
    as well. Maybe you can put that on your list because we really
    care about that.

                                War fighting lab

        Senator Inouye. Sure. Finally, if I may, General, one of
    the first things you recommended as commandant was a war
    fighting lab.
        General Krulak. Yes, sir.
        Senator Inouye. And I think it has the greatest potential,
    not only for the Marines, but for when I was in the infantry in
    the Army. What is the latest you have on that?
        General Krulak. Sir, we are now, thanks to this committee,
    three and a half years into a multiple series of experiments.
    The one that we are doing right now and has been ongoing for
    two years is called Urban Warrior. It is trying to come to
    grips with the asymmetric threat in the battle in the urban
    environment.
        It will culminate an advanced war fighting experiment
    within the next week out in the Alameda area. One of the other
    spin-offs coming out of the experimentation we have done is the
    chemical biological incident response force. Again, if it were
    not for this committee, we would not have that. The Nation
    would not have it. It does now. It is teaching first responders
    all over the country. Plus it has been utilized around the
    Nation for our own--when I say our own, America's needs.
        We have looked at overhead systems, the unmanned aerial
    vehicles (UAV's), payloads on those, nonlethal weapons. Both
    the Army and the Marine Corps now have nonlethal weapon
    capability sets forward deployed. Again, none of that would
    have existed if it were not for this committee's support of the
    war fighting laboratory.
        So it has been a tremendous capability and, as you
    indicated, sir, not just for the Marine Corps, but for the good
    of the country. And we are in deep partnership right now with
    all the services on joint experimentation. Admiral Johnson and
    his fleet will be with us for Urban Warrior this coming week.

                                     DD-21

        Senator Inouye. I, for one, would like to join the chairman
    in thanking all of you. It has been most helpful. This is the
    best description I have had of the F-18 ever before this
    committee. I think everyone who heard you could have understood
    what you talked about.
        I have just one final question. You said that the DD-21 has
    just 60 personnel?
        Secretary Danzig. I am sorry. Ninety-five is the plan.
        Senator Inouye. DDG-51 has 300?
        Secretary Danzig. Yes.
        Senator Inouye. I thought I heard wrong.
        Senator Cochran. Mr. Chairman, can I just make one comment
    and submit a question.
        Senator Stevens. Gentlemen, I promised they would get out
    of here by noon. So go ahead.

                            National missile defense

        Senator Cochran. He can walk that fast. I am going to the
    same lunch. Mr. Chairman, thank you.
        On national missile defense there is a report in the
    newspaper today from one of the think tanks here that the Navy
    program would be the best program to fund and deploy for a
    national missile defense system.
        Admiral Rempt testified that a sea-based capability would
    be a complement to a land-based national missile defense
    program.
        What is the Navy's response to these discussions about
    whether we should pursue both, fully fund both, or pick and
    choose now between the two? What is your assessment of the
    situation?
        Secretary Danzig. I am glad you have come back to that,
    Senator, because I saw, Mr. Chairman, when I answered this
    earlier that you were not entirely satisfied with my answer.
        Senator Stevens. Let me interrupt and tell you. Our
    briefings indicated we have the technology. It is the
    integration of the systems we have as the problem, not
    technology.
        Secretary Danzig. Well, the integration of the systems is,
    I think you are quite correct, fundamental to the creation of
    the land-based national missile defense system. From my
    standpoint, we do not have the proven technologies yet with
    respect to interceptor capability in the Navy system. For upper
    tier, we are going to be testing over these next couple of
    years very intensively. I am optimistic about it.
        But the earliest, I would point out, that we can deploy the
    Navy theater system is something in the range of 2005 or 2006,
    and I think there is a strong argument that the earliest we
    would actually be able to deploy would be 2007.
        So it trails the land-based systems in terms of its
    capability. And I want to get to area defense first and then
    theater defense and then address the issue of national defense
    after that.
        I would add that there is a real question about speed of
    intercept here. The Navy systems are premised around the
    intercept speeds, significantly lower than those that you need
    for a national missile defense system because an
    intercontinental ballistic missile is a faster system, at about
    5.5 kilometers per second.
        The naval threats that we are anticipating are slower than
    that. That makes the Navy systems defense appropriate for area
    and theater defense. There are still, in my view, Mr. Chairman,
    technological steps before you can translate to national
    defense.
        Does the Navy system have potential in the longer term as a
    national system? Yes. Would it be a good complement to a land-
    based system? Very possibly. Is it conceivably a substitute for
    a land system if the land system does not develop well? Yes, I
    think that is conceivable.
        But in my view, the first tasks should be addressed first,
    and those are the demonstration of our area and theater
    capabilities and their deployment, and we ought to come to
    national after that.
        Senator Stevens. I am constrained to comment on that,
    though, because I have got to tell you I think part of the
    Pentagon ought to move to Anchorage or Honolulu and talk to the
    people on the street. They know what has been going on on the
    other side of that ocean. And they know that they are the
    targets. They have the reserve forces for the defense in the
    Pacific.
        Under those circumstances to say that we would have area,
    then theater and then national missile defense means that we
    are going to have national missile defense sometime around
    2010.
        That is entirely unacceptable--entirely unacceptable--the
    thought that we would postpone national missile defense until
    we have perfected the defense for a movable target and leave
    the fixed targets on base. The reserve forces of the United
    States in the Pacific at risk for that period of time is
    totally unacceptable to me.
        Secretary Danzig. Mr. Chairman, can I take a moment more? I
    know I am at some risk that the mallet, the gavel will come in
    my direction.
        Senator Stevens. I have got to break, I promise, here in a
    minute. Go ahead.
        Secretary Danzig. I will take, from our end, the
    responsibility on the promise.
        I am not urging that we ought to suspend national missile
    defense issues now or anything like that. I am merely noting
    that in terms--you may well choose to have a land-based system
    sooner and you are quite right. The problems in the land-based
    system are of integration of existing technologies.
        But with respect to the naval system, what I am urging is
    that before we get to running with missile intercepts at 5.5
    kilometers a second, we ought to develop our abilities at
    walking--it is pretty fast for walking--at 4.5 kilometers a
    second.
        So, on the Navy side I do believe we need an unfolding of
    the technology. If you want to invest faster in national
    missile defense, which is obviously your right to conclude, I
    think you are going to be driven in the near term towards the
    land-based system. It just comes faster. We can discuss this at
    greater length, obviously, separately.
        Senator Stevens. We can do that. Senator Inouye said we
    ought to all come over and have a seminar about this. I have
    been traveling around the country having them with people who
    are investigating the systems. And I have come to the
    conclusion that they are right, that we can integrate--if we
    can integrate the systems, we have a national missile defense
    system now.
        Senator Domenici. Mr. Chairman, I just want to compliment
    you on this last series of questions and make an observation
    with you and the committee. You know, we are devoting an awful
    lot of our time and energy trying to analyze the threat of the
    Soviet Union, with its great arsenal of nuclear weapons, still
    has on the world and on us. I do not hear anybody talking about
    China.
        You know, China is past the stage now where they have one
    rocket and one nuclear bomb. Everybody understands. You see the
    last parade they held, you just look at the weapons.
        Since this committee is always on the cutting edge, would
    you consider having a meeting and asking the Defense Department
    in a private session with this committee to tell us about the
    Chinese threat of nuclear weapons?
        Let me say to you, also, with reference to the Budget
    Committee, we agree with you. We have been absolutely unable to
    find this $1.6 billion. We actually think it is a number that
    was arrived at as a filler: add up all the things that they
    were going to take savings for, put the budget together and
    they are $1.6 billion short. And so they just plus in a
    rescission number. We cannot find anything else other than
    that.
        We are going to get rid of most of the offsets that are
    phony like that and still be able to give you a number that is
    very close to what you spoke of at the last committee meeting
    in terms of how much, $8.3 billion above the President's. We
    are looking towards that goal and I just want you to know that
    in advance.
        Senator Stevens. Good. Senator Inouye and I would like to
    have that checkbook and know that the money is in the bank, not
    the check is in the mail business. We want the money in the
    bank.

                         Additional committee questions

        Thank you very much. Additional questions have been
    requested by members here, and they will submit them through
    the staff for the record, please.
        [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 Richard Danzig
                  Questions Submitted by Senator Thad Cochran
        Question. Mr. Secretary, what is the DoN position on alternate
    funding methods such as long term leasing, extended multi-year
    procurement, or incremental funding to meet ship force structure
    requirements?
        Answer. The Navy continues to explore alternate funding methods,
    where appropriate and permissible, to maintain an affordable and
    appropriate level of ship construction. The Long-term lease authority
    provided by Title 10 U.S.C. 2401 is one alternative funding method we
    are reviewing, especially for ships that provide commercial services to
    the fleet.
        Regarding multi-year contracting, the Navy continues to support
    multi-year authority for ship programs that meet the requirements for
    multi-year statutory authority and involve savings to the government.
    The fiscal year 1998-2001 DDG 51 multi-year contract, as an example,
    achieved savings in excess of $1 billion for the Navy, effectively
    enabling procurement of 12 ships for the price of 11.
        With regard to the DoN position on incremental funding, it is
    contrary to Department of Defense budget policy to use incremental
    funding to meet ship force structure requirements. Navy policy requires
    that funds be available at contract award to cover the total estimated
    cost to deliver the contract quantity of complete, militarily useable
    items.
        Question. Mr. Secretary, the DD 21 acquisition strategy permits the
    competing industry teams the flexibility to meet mission requirements
    as they see fit. Recently, the Navy seems to be promoting integrated
    electric drive as the propulsion system of choice for all future ships.
    Does the DoN intend to permit the teams full flexibility in selecting
    propulsion systems and other major design features, or do you plan to
    direct they use certain government selected systems?
        Answer. The DoN will continue to allow DD 21 industry teams full
    flexibility in selecting propulsion systems and other major design
    features. I have a personal interest, and the Navy has an interest in
    advanced technologies, such as integrated electric drive. This is part
    of a long-term strategy for improved warfighting capability and reduced
    total ownership cost. Support for exploring these possibilities does
    not mean that the Navy is directing their use for any specific
    platform.
        Question. Another aspect of the DD 21 acquisition strategy is the
    requirement for full service contract support. What is DoN's definition
    of full service contract support?
        Answer. Full service contract (FSC) support is envisioned to
    encompass essential ``care and feeding'' of the platform throughout its
    commissioned service life. For DD 21, FSC support is the industry-based
    portion of the life cycle engineering and support program required to
    ensure operational readiness of the ship. Each of the DD 21 industry
    teams are defining their respective FSC support concepts in a
    competitive environment, addressing the following functional areas:
    Operational Context; Engineering and Design; Production and
    Construction; Operator/Equipment Training; Tactical Training; Test and
    Evaluation; Certification; Modernization and Upgrade; Maintenance and
    Logistics; and Disposal.
        Beyond DD 21, the definition of FSC support is expected to vary by
    ship class due to differences in design features, as well as business
    case alternatives pursued by the industrial agent and vendor base.
        Question. I understand the LHAs are reaching their stability design
    limits. Can you describe those limitations?
        Answer. Under normal conditions, LHAs do not have a stability
    problem. The issue is one of damage stability, the ship's ability to
    absorb damage and recover. The Navy standard is the capability to
    withstand three adjacent compartments of flooding damage. The LHA
    class, designed in the 1960s and built in the 1970s, is now only
    capable of sustaining two major compartments of flooding. The primary
    reasons for this situation are that topside weight growth has exceeded
    the design margins built into the ship class and that dirty ballasting
    (filling fuel tanks with seawater as the fuel is consumed) is no longer
    practical in the fleet due to environmental and operational/fuel
    quality considerations. In order to mitigate the damage stability risk,
    the fleet has been advised of this situation, provided flooding control
    software to quickly assist the crew in combating flooding and given
    updated loading instructions. Additionally, topside weight removal of
    obsolete equipment is scheduled during each maintenance availability,
    and weight growth is closely monitored. The Navy is currently studying
    other options such as a fuel compensating ballast system to correct
    this problem.
        Question. What effect will the embarkation of the new MV-22
    ``Osprey'' Tiltrotor and other aircraft aboard the LHA have on these
    limits?
        Answer. As discussed above, weight growth on LHAs has been a major
    factor in the ships reaching/exceeding their damage stability limits.
    The Navy is considering various alternatives to accommodate fleet
    introduction of MV-22s, including LHA replacement options and shipboard
    structural modifications.
        Question. I understand the Navy has studied building an LHD with a
    gas turbine propulsion plant. What are the advantages of such a design
    over the current steam plant, and what savings would you expect to
    accrue in terms of manning and life cycle costs for a gas turbine
    powered LHD?
        Answer. A major benefit of gas turbine over steam propulsion is
    manpower and workload reduction. Current private sector estimates are
    that a significant number of personnel and life cycle costs can be
    saved with a gas turbine LHD. The Navy is currently reviewing those
    estimates.
                                     ______

                 Questions Submitted by Senator Mitch McConnell
                naval gun work performed in louisville, kentucky
        Question. As a result of the 1995 BRAC, the industrial departments
    at the former Naval Ordnance Station in Louisville were privatized and
    the work that had been performed there was turned over to private
    contractors. One of the programs continued at the facility was the
    repair and overhaul of MK45 guns.
        This Committee supported the inclusion of $13 million in Weapons
    Procurement funding and $10 million in O&M for the MK45 program in
    fiscal year 1999. Has the Navy obligated and released these funds as
    directed by Congress?
        If not, why not?
        Answer. O&M: $5 million was released in January 1999, and placed on
    the Privatization Contract with United Defense Limited Partnership
    (UDLP), Louisville. The remaining $5 million will be released April 1,
    1999 and placed on the UDLP Privatization Contract by April 30, 1999.
    WPN: The $13 million was released in April. $9.7 million has been
    obligated on contract with UDLP with the remaining $3.3 million in
    commitment, to be obligated by June 30 1999.
        Question. How much does the Navy plan to spend on MK45 repair and
    overhaul in fiscal year 1999? If less than the appropriated amount,
    what is the justification for not spending the entire amount that
    Congress directed for MK45 repair and overhaul program?
        Answer. $9.88 million of the O&M funds will be spent on MK45
    repair/overhaul and $2.32 million of the O&M funds will be spent on
    Mk45/75 component overhaul/repair. $13 million of the WPN funds will be
    spent on MK45 Gun upgrade and conversion.
                     operational availability of mk45 guns
        Question. What percentage of MK45 guns in the fleet does the Navy
    categorize as 100 percent operationally available? How does this
    percentage compare to the previous 10 year's figures?
        Answer. All deployed Fleet MK45 Guns are 100 percent operational.
    The overall Operational Availability of all MK45 guns for all Fleet
    units for fiscal year 1998 is less than the operational requirement of
    .85 and has been on average declining over the past ten years. The
    calculation of operational availability is dependent upon three
    factors: Mean Time Between Failure, Mean Logistics Delay Time and Mean
    Time to Repair.
        Question. How does the MK45 operational availability status compare
    to that of other weapons systems in the fleet?
        Answer. The MK45 operational availability is comparable to other
    weapons systems similar in age and complexity.
        Question. What are the Navy's plans to repair those MK45 guns,
    which are not fully operational? Can you provide a schedule and budget
    proposal for the repair work which the Navy intends to pursue?
        Answer. The Navy will repair the MK45 Guns on a priority basis as
    funding and deployment training schedules permit. The current Gun
    Weapon System Overhaul Program budget for fiscal year 2001 through
    fiscal year 2005 is approximately $10 million per year. This funding
    level will support in-place pierside MK45 overhaul program and other
    gun weapon system maintenance programs.
                           cruiser conversion program
        Question. What are the Navy's plans for the MK45 advance work for
    the Cruiser Conversion program? Is any thought being given to
    accelerating this schedule?
        Answer. The Cruiser Modernization Program will upgrade two MK45 gun
    mounts per Cruiser. Equipment procurement starts in fiscal year 2002
    with installations starting in fiscal year 2004. While there are no
    current plans to accelerate this schedule, the Navy initiated a
    rotatable pool of MK45 Gun Mounts at United Defense Limited Partnership
    (UDLP) Louisville using fiscal year 1998 WPN Congressional plus-up
    funds to mitigate schedule risks associated with gun deliveries. This
    will also benefit the Navy by providing a level load of work at the
    UDLP contractor site. Three gun mount assets were inducted into the
    rotatable pool in fiscal year 1998 and are being prepared for
    subsequent overhaul and upgrade to the MOD 4 configuration and
    installation at a land-based test site, a training site and on a CG 47
    Class Cruiser. Fiscal year 1999 WPN Congressional plus-up funding will
    be awarded to UDLP Louisville to continue this effort with the
    induction of three additional gun mounts into the rotatable pool for
    subsequent overhaul and upgrade to MOD 4 configuration and installation
    on CG 47 Class Cruisers.
        Question. Can you provide a schedule and budget projection for
    Cruiser Conversion, including gun upgrade work?
        Answer. Procurement of equipment for the Cruiser Modernization
    Program begins in fiscal year 2002 with installation commencing two
    years later in fiscal year 2004. The funding stream for MK45 Gun
    upgrade work in the Cruiser Modernization procurement budget is shown
    below. MK45 Gun upgrade work in fiscal year 1998 and fiscal year 1999
    was funded with Congressional WPN plus-up dollars to mitigate schedule
    risks.

                                                                      [Dollars in millions]
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Fiscal year--
                                                                                                           -------------------------------------------------
                                                                                                              2001      2002      2003      2004      2005
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Number of Ships................................................  ...........  ...........  ...........  ........         1         3         4         4
    Procurement Quantity (Gun Upgrades)............................  ...........  ...........  ...........  ........         2         6         8         8
    Install Quantity (Upgraded  Guns)..............................  ...........  ...........  ...........  ........  ........  ........         2         6
    CG Modernization Procure and Install...........................  ...........  ...........  ...........  ........     $81.2    $231.6    $318.5    $388.9
    MK45 Gun Upgrade...............................................        $5.0        $13.0   ...........  ........     $15.6     $50.0     $67.0     $70.6
    --------------------------------------------------------------------------------------------------------------------------------------------------------

          land conveyance at former naval ordnance station, louisville
        Question. Finally, what is the Navy's schedule and plan for
    completing negotiations and settlement for the property conveyance of
    the former Naval Ordnance Station, Louisville?
        Answer. The Louisville/Jefferson County Redevelopment Authority
    (LJCRA) has indicated plans to acquire the property through an Economic
    Development Conveyance (EDC) to support the reuse plan. The LJCRA's
    ultimate redevelopment plan includes: privatization in place; precision
    manufacturing, high technology and other industry; Navy Engineering
    Detachment; a plating operation; Advanced Technology Center of
    Excellence; Neighborhood Place Clinic and Social Services Center;
    Redevelopment Authority facilities for park support; and Little League
    ballfields.
        The EDC was submitted on 24 July 1998. EDC negotiations are
    targeted to begin in August 1999 and approval of the EDC is targeted
    for December 1999 with the property transfer commencing December 1999
    and concluding October 2002.
        The Draft Statement of Work (SOW) to secure the appraisal was
    reviewed by the LJCRA. Comments received 18 March 1999 will be
    incorporated and the SOW will be awarded. The Appraisal should be
    completed by August 1999 in order to proceed with EDC negotiations.
        The Recreation and Housing Area Finding of Suitability to Transfer
    is targeted for August 1999 with property transfer by December 1999.
    The Building 102 Area Finding of Suitability to Transfer is targeted
    for March 2000 with property transfer by July 2000 and the Industrial
    Area Finding of Suitability to Transfer is targeted for June 2002 with
    property transfer by October 2002.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
        Question. Secretary Danzig, in light of the continual emergence of
    innovative technologies, (i.e. GRAD Consortium's GSCAD) by what
    procedures, criteria and measures does the Navy evaluate and approve
    the most advanced and effective tools available for shipbuilding
    design?
        Answer. In keeping with the principles of Acquisition Reform,
    decisions concerning shipbuilding design tools are made by the
    respective industry teams responsible for design and development.
    Industry considerations include design tool capabilities, design tool
    availability relative to shipbuilding program schedule, and net cost to
    the shipbuilding program.
        Question. Secretary Danzig, with the growing trend in acquisition
    toward outsourcing for services, (i.e, shipbuilding design) how does
    the Navy ensure that: objective competition is maintained, quantifiable
    cost savings are confirmed, and increased effectiveness is verified?
        Answer. The Department is committed to achieving the lowest life
    cycle costs for our platforms. By providing industry performance
    specifications and allowing the industry experts to select technologies
    to achieve the desired cost and performance, the Navy is confident that
    we will realize lower life cycle costs while maintaining a
    technological advantage. For example, in the case of DD 21, we have
    structured the acquisition strategy to maximize the utilization of
    industry's talent. There are two shipbuilder teams (Ingalls and Bath
    Iron Works) which include integrator members (Lockheed and Raytheon)
    whose designs are competing for the platform.
        Question. Secretary Danzig, what role do you envision the Navy
    playing in National Missile Defense? Is the ABM Treaty an obstacle to
    that role?
        Answer. It is first important to note that the Navy has no assigned
    National Missile Defense (NMD) mission. Therefore, there are no current
    Navy NMD programs. We agree with the classified Ballistic Missile
    Defense Organization (BMDO) report to Congress entitled ``Utility of
    Sea-Based Assets to National Missile Defense'', prepared in response to
    the Conference Report accompanying the Defense Authorization Act for
    Fiscal Year 1998 (H.R. 1119). This report notes that the most practical
    and effective role for sea-based NMD systems would be to supplement
    land-based systems.
        A sea-based complementary NMD architecture could provide more
    operational flexibility and robustness than architectures that relied
    solely on a single land-based interceptor site. The mobility and
    flexibility of our ships at sea could allow for earlier detection and
    kill opportunities and enhance the overall architecture with what the
    Navy calls ``Defense in Depth''.
        Currently, the Anti-Ballistic Missile (ABM) Treaty explicitly
    prohibits sea-based Anti-Ballistic Missile systems, just as it
    prohibits space-based, airborne, and land-mobile ABM systems, or sites
    other than in defense of either the National Capital or ICBM field.
    Thus, the development, testing, or deployment of Naval NMD would raise
    significant Treaty issues.
        Question. Secretary Danzig, can the Navy provide a clear and
    logical rationale as to why the Computer-Graphic Aided Three-
    Dimensional Interactive Application (CATIA), a French controlled and
    managed proprietary software, is used by the Navy to design the nuclear
    propulsion plants of U.S. Navy vessels, while in-country industrial
    capabilities are excluded from consideration?
        Answer. The Navy has contracted with Electric Boat Corporation (EB)
    as the prime contractor for the design of the VIRGINIA Class submarine.
    The prime contractor has the responsibility to ensure it has the needed
    design tools for ship design and integration including design of the
    propulsion plant. The Navy does not dictate the tools used by
    contractors for ship design.
        EB found it necessary to develop the next generation of Computer-
    Aided Design (CAD) software tools capable of capturing the complexity
    of ship design and construction interface. Pursuing this new technology
    was an internal business decision necessary for EB to minimize cost and
    risk for both itself and the government. Using standard industry
    processes, EB reviewed all prospective vendors and selected CATIA,
    marketed by IBM, as the best product to satisfy its requirement. CATIA
    has worldwide exposure and is used extensively on commercial and
    defense projects, both shipbuilding and aerospace.
                                     ______

                 Questions Submitted by Senator Robert C. Byrd
        Question. Mr. Secretary, during the processing of the fiscal year
    1998 Defense Appropriations Bill, the Congress provided $3 million for
    the Reserve Components for the Direct Support Squadron Readiness
    Training Program. The intent of this program is to create a computer-
    based training capability that will address the need for reserve
    personnel to meet certain readiness qualifications. The training is
    needed because the operational readiness of the reserve maintenance
    personnel was extremely low. I am told of growing concern within the
    Department of Defense of the ability of the Naval Air Reserve Force to
    perform its war-time mission due to lack of training programs.
        The intent of the contractor, ManTech International, was to conduct
    this effort in Hinton, West Virginia. The funds, to my knowledge, were
    never utilized for the purposes for which they were appropriated,
    despite calling this matter to the attention of your predecessor and
    his staff. I am disappointed that these funds were never released.
        During the processing of the fiscal year 1999 Defense
    Appropriations Bill, the Congress again provided $3 million to fund the
    Direct Squadron Support Readiness Training Program. On February 22,
    1999 I followed up with a letter to Defense Secretary William S. Cohen,
    asking for a status report, including significant milestone events
    leading to the release and obligation of the funds.
        Question. What can you tell about the status of these funds?
        Answer. The appropriated funds have been released by NAVCOMPT and
    are in the process of contract award through GSA.
        Question. When will the funds be obligated and the contract signed?
        Answer. It is anticipated that this process will be complete and
    the contract awarded by mid to late May 1999.
        Question. What suggestions can you make so that the delays that
    have been encountered in fiscal years 1998 and 1999 are not repeated?
    Will assigning another PE number to the program resolve the matter?
    Please elaborate for the record.
        Answer. If Congressional adds are expected to continue to support
    Direct Squadron Support Readiness Training in the future, it is
    recommended that the requirement be included in the Defense
    Appropriations Bill language. Assigning a new PE number will not
    resolve this situation.
                                     ______

                Question Submitted by Senator Richard J. Durbin
        Question. The City of North Chicago, home to Great Lakes Naval
    Training Center, is interested in the transfer of the Navy's water and
    sewer infrastructure into the City's. What is the Navy's time line for
    privatizing services at the Great Lakes Naval Training Center? What
    criteria will be used to transfer the services? Is the Navy working
    with the City of North Chicago on the possible transfer of water and
    sewer functions?
        Answer. The Navy issued Requests for Information (RFI's) in
    February 1999 to determine if there was market interest regarding the
    privatization of the water and sewer systems at Great Lakes Naval
    Training Center. An RFI was sent to the City of North Chicago and the
    City responded, indicating an interest in both systems. The Navy will
    proceed with the development of an environmental baseline survey and an
    engineering assessment designed to document existing conditions and to
    facilitate the development of a government estimate of fair market
    value. Once these actions are complete, the Navy will issue Requests
    for Proposal for each system. Upon receipt and analysis of proposals,
    the Navy will convey the utility systems, in accordance with 10 U.S.C.
    2688, to the offeror whose proposal would result in the best long-term
    economic benefit to the Navy. These systems are scheduled to be
    privatized prior to September 30, 2003.
                                     ______

                    Questions Submitted to Adm. J.L. Johnson
                   Questions Submitted by Senator Ted Stevens
        Question. Admiral Johnson, last year the Committee provided an
    additional $134.9 million for Navy procurement. How far did these
    increased dollars go in meeting the needs of the Navy and in meeting
    your goals of modernization?
        Answer. As always, the assistance of Congress was, and is,
    appreciated. The additional funding provided in fiscal year 1998
    allowed the Navy to make crucial investments in long overdue
    modernization and recapitalization efforts. However, as I have
    testified, an average increase of $6 billion per year above fiscal year
    1999 President's Budget across the future years defense program in
    total obligation authority is required to restore non-deployed
    readiness to acceptable levels and to recapitalize and modernize to
    meet future warfighting requirements.
        Question. Admiral Johnson, which specific area or areas of the Navy
    procurement budget do you believe to have the greatest shortfall?
        Answer. An average increase of $6 billion per year across the
    future years defense program in total obligation authority above fiscal
    year 1999 President's Budget levels is required to restore non-deployed
    readiness to acceptable levels and to recapitalize and modernize to
    meet future warfighting requirements. The President's fiscal year 2000
    Budget request is a substantial down payment toward our needs but falls
    short of addressing them completely. In February 1999, I provided the
    Defense Committees a list of underfunded or unmet requirements that
    additional funds could be applied to if they became available. The
    Navy's underfunded requirements in fiscal year 2000 total about $2.3
    billion, including approximately $1.1 billion in underfunded or unmet
    requirements in procurement accounts. A breakout by procurement account
    is provided below.

                            [In millions of dollars]

                                                                 Fiscal year
                                                                        2000

    APN............................................................... 528.4
    OPN............................................................... 380.8
    WPN............................................................... 101.0
    PANMC............................................................. 112.0

                                     ______

                Question Submitted by Senator Richard C. Shelby
        Question. Admiral Johnson, the Navy has had women assigned to
    combat vessels since 1994. The Navy maintains that pregnancy is
    compatible with a naval career and does not harm readiness. The Navy
    reports that it is short some 18,000-20,000 sailors. Many of these
    vacancies are sea duty billets. The Center for Naval Analysis has
    recently reported that the unplanned loss rate for women at sea is 25
    percent, or 2.5 times the unplanned loss rate for men. More than one-
    third of the 25 percent were lost due to pregnancy.
        In light of these statistics and looking back at the last five
    years in an objective manner, do you believe that the presence of women
    at sea has enhanced the combat readiness of the U.S. Navy?
        Is pregnancy compatible with a combat ready Navy? Does the Navy of
    Communist China have similar policies regarding the presence of women
    (pregnant and not pregnant) in its combat forces?
        Answer. Women have been permanently assigned to Navy ships since
    1978 and have been serving in surface combatants since 1994. There are
    now over 10,000 Navy women serving aboard ships (10,946 as of 01 Jan.
    1999). The majority of these women serve aboard combatant vessels. The
    repeal of the combat exclusion law enables the Navy to fill billets
    with the best qualified Sailors available. In the current challenging
    recruiting environment, readiness would be severely diminished if those
    10,000 plus women were not serving the Navy on combatants and other
    shipboard units.
        Pregnancy and parenthood are compatible with naval service.
    Sailors, men and women, know that they can raise a family and also have
    a successful Navy career. The Navy has an information/training program
    to encourage servicemembers to plan pregnancy and parenthood to meet
    their military and family responsibilities. Women officers and senior
    enlisted women, E-5 and above have low unplanned loss rates for
    pregnancy (less than 4 percent). The Navy is making additional training
    resources available to ensure that the ``responsible parenting''
    message reaches the junior enlisted Sailors (E-4 and below), who
    account for the majority of pregnancy and other unplanned losses.
        Pregnancy accounted for 6 percent of Navy shipboard unplanned
    losses in 1997. Medical (40 percent), other than pregnancy, and
    disciplinary (39 percent) account for the vast majority of Navy
    unplanned losses. Navy policy requires pregnant servicewomen to
    transfer to shore duty no later than their 20th week of pregnancy. The
    pregnant servicewoman's sea duty counter stops at the point of transfer
    and she will transfer back to complete the remainder of her sea duty
    tour four months after delivery of her child (this is waived if there
    is less than 6 months of sea duty remaining). Pregnant sailors are more
    likely than any other category of unplanned losses to return to sea
    duty and the least likely to leave the Navy. Within one year, less than
    30 percent of pregnancy unplanned losses leave the Navy vs. greater
    than 40 percent for other medical and greater than 90 percent of
    disciplinary unplanned losses.
        The Peoples' Liberation Army (Naval Forces) (PLA(N)) of China has
    similar policies to DOD concerning women serving in its armed forces.
        [Deleted.]
                                     ______

                    Questions Submitted to Gen. C.C. Krulak
                   Questions Submitted by Senator Ted Stevens
        Question. General Krulak, last year the Committee provided an
    additional $128,358 million for Marine Corps procurement. How far did
    these increased dollars go in meeting the needs of the Marine Corps and
    in meeting your goals of modernization?
        Answer. The Marine Corps received an increase of approximately $111
    million in Congressional plus-ups for ground equipment in fiscal year
    1999. This $111 million reflects the net increase after application of
    Section 8134 Title III General Reductions. We deeply appreciate your
    assistance in this most critical area. As a result of your increase,
    our ground equipment modernization funding for fiscal year 1999 is
    approximately $1 billion, slightly below our historical, or ``steady
    state'' level of $1.2 billion.
        As you are aware, Marine Corps ground equipment modernization has
    been funded well below this historical, or ``steady state'' level of
    $1.2 billion for the last seven years. During this time, we have
    deferred nearly $4 billion of much-needed ground equipment
    modernization in order to fully fund our top priority, near-term
    readiness. This extended period of underfunding has driven the recovery
    rate to $1.8 billion per year for ground modernization.
        As this budget was being developed, we had reached a critical point
    in the life cycle of our ground equipment. We are facing virtual block
    obsolescence of crucial end items and we are spending more time and
    money maintaining our aging equipment. Ground modernization is quickly
    becoming a near-term readiness issue.
        The topline increases provided in the fiscal year 2000 budget allow
    us to take the first critical steps toward properly funding ground
    equipment modernization. While the increases provided in the current
    budget allow us to achieve the ``steady state'' level in fiscal year
    2000, we do not attain the recovery level until fiscal year 2005.
        I am concerned about our ability to sustain the increases projected
    in the outyears of this budget. It is absolutely critical that the
    increases projected be sustained over the entire Future Years Defense
    Plan--not just in fiscal year 2000. The problems we face are the result
    of years of decreased funding. The solution to these problems cannot
    come overnight--it will take the sustained interest and concern of the
    Administration and the Congress to recover from the cumulative effects
    of years of constrained funding. I deeply appreciate your continued
    support.
        Question. General Krulak, how do the priority items in this budget
    and on the Unfunded list support the Marine Corps' goal of providing a
    flexible military capability for the next century?
        Answer. The Marine Corps has long recognized the need for a
    flexible military capability to meet tomorrow's threat. Our future
    opponents will attempt to mitigate our capabilities and fight us where
    we are least effective. The proliferation of high-tech weapons and
    weapons of mass destruction may make such asymmetric clashes as lethal
    as clashes between superpowers. Therein lies the great danger of our
    time. The United States and the world cannot afford to allow crises to
    escalate and threatens its vital interests. Cultural clashes can
    trigger even bigger wars as outside nations and groups with cultural
    affinities take sides. They can, in fact, threaten the global order as
    well as jeopardize the interdependent global economy. To meet these
    future challenges, the Marine Corps will not rely on outdated solutions
    but is developing new concepts and techniques which will ensure
    decisive victory in the ``savage wars of peace.'' Future conflicts that
    may demand in one moment, Marines to provide humanitarian assistance;
    in the next, to conduct peacekeeping operations; and finally, to fight
    a highly lethal mid-intensity battle--all in the same day--and all
    within three contiguous city blocks. The Marine Corps, in partnership
    with the Navy, is critical to meeting those challenges. Together, we
    provide Naval Expeditionary Forces--integrated air, land, and sea
    combined arms teams. These unique forces are mobile and self-sufficient
    and can operate unfettered from sea bases in international waters. When
    needed, they can immediately operate ashore in austere areas throughout
    the globe.
        Ultimately, a global superpower must possess the ability for
    unilateral action. A key requirement is the capability to project power
    ashore in the face of armed opposition. In the past, forcible entry
    from the sea was defined by amphibious assaults that focused on
    establishing lodgements on the beach and then building up combat power
    for subsequent operations. Under the Operational Maneuver from the Sea
    concept, currently being implemented, it is now defined as the
    uninterrupted movement of forces from ships located far over the
    horizon, directly to decisive objectives, whenever and wherever we
    desire.
        Operational Maneuver from the Sea will provide Naval Expeditionary
    Forces with the ability to maneuver combat forces from the sea, to high
    value objectives deep inland without stopping at the water's edge. At
    the operational level, it will exploit enemy weakness and deliver a
    decisive blow. The concept combines high technology with maneuver
    warfare. What distinguishes Operational Maneuver from the Sea from all
    other types of operational maneuver is its extensive use of the sea as
    a means of gaining advantage. It serves as an avenue for friendly
    movement while acting as barrier to the enemy. The concept is designed
    to ensure that Naval Expeditionary Forces will project decisive power
    and influence in the 21st Century.
        The priority items in this budget and on the unfunded list are
    needed to bring the OMFTS concept to fruition. Several key platforms,
    each at the cutting edge of technology, are critical to the flexibility
    inherent in OMFTS. They are the MV-22 Osprey, the Advanced Amphibious
    Assault Vehicle (AAAV), and the already operational Landing Craft Air
    Cushion (LCAC) vehicle. Once introduced to service, the STOVL variant
    of the Joint Strike Fighter (JSF) will provide fire support critical to
    the success of OMFTS. Continued development of these visionary
    enhancements will open new windows to power projection operations. They
    will enhance decisive responses by forward deployed forces in
    operations ranging from forward presence to conflict resolution.
    Additionally, OMFTS requires overcoming challenges in battlespace
    mobility, intelligence, command and control, and sustainment. These
    challenges will be met through the introduction of such programs as the
    KC-130J aircraft, HMMWVA2, Medium Tactical Vehicle Replacement (MTVR),
    Reverse Osmosis Water Purification Unit (ROWPU), and M88A2 Hercules
    Improved Recovery Vehicle.
        In addition to meeting tomorrow's threats, the Marine Corps must
    ensure that its forces are ready to respond to today's conflicts.
    Improvements to Base Telecommunications and Network Infrastructures, as
    well as maintenance of aging equipment, corrosion control and coating
    (C\3\), and real property maintenance will enhance the readiness of the
    current force. The procurement of additional ammunition, the Advanced
    Targeting Forward Looking Infrared (ATFLIR), and the F-18A engineering
    change kits will help the Marine Corps improve its current operational
    capabilities.
        The Marine Corps is also taking the lead on the Non-Lethal Weapons
    (NLW) capabilities. The NLW Capability Set is designed to counter a
    variety of threats for which Marines have previously lacked the
    appropriate tools to address. The program is currently fully funded.
    However, more funding will be required over the years to keep the NLW
    Capability Set on the cutting edge and to achieve the highest degree of
    commonality attainable among all the Services.
        The priority items in the budget and on the unfunded list will
    allow the Marine Corps to meet the demands of future operational trends
    while halting the process of mortgaging the health of today's Corps.
        Question. General Krulak, which specific area or areas of the
    Marine Corps procurement budget do you believe to have the greatest
    shortfall?
        Answer. The increases provided in this budget allow us to take the
    first critical step toward recovery from the cumulative effects of
    seven years of underfunding. The problems we faced as we developed this
    budget, however, did not occur overnight. It is absolutely essential
    that the increases projected in this budget be sustained over the
    entire Future Years Defense Plan (FYDP)--not just in fiscal year 2000.
        Following is a brief summary of my most critical shortfalls by
    category. A detailed list is attached.
        In the area of ground modernization, although we attain our
    historical, ``steady state'' level of $1.2 billion in fiscal year 2000,
    we do not reach the $1.8 billion ``recovery level'' until fiscal year
    2005. Additional funding beyond the $1.2 billion would be used for
    programs such as acceleration of the procurement of the HMMWVA2,
    modernization of network infrastructure in a more timely manner, and
    acceleration of upgrades to base telecommunications infrastructure in
    order to ensure reliable support to Marine forces deployed, in
    training, or in combat.
        In aviation, although the fiscal year 2000 request provides
    sufficient funding to maintain existing platforms, it does not
    accelerate V-22 near-term procurement rates, nor does it fund the AV-8B
    ATFLIR, or annual procurement of KC-130Js.
        Projected increases for maintenance of real property allow for the
    arrest of the growth of backlog of maintenance and repair (BMAR) and
    stabilization at approximately $700 million, however, this is still far
    short of our goal to reduce BMAR to $100 million by fiscal year 2010.
        Our resource-constrained goal in the area of military construction
    is to invest one percent of plant value in new construction every year,
    replacing plant every 100 years. The industry standard is every 50
    years. While this budget allows us to attain the 100 year replacement
    goal in fiscal year 2002, we would prefer to do so earlier.
        In the area of family housing, the Secretary of Defense guidance is
    to eliminate all substandard housing by fiscal year 2010. Increases
    provided in this budget allow us to achieve this goal in fiscal year
    2012, however, the increases do nothing to address our deficit of
    approximately 10,000 units.
        In summary, while increases provided through the FYDP accompanying
    this budget allow us to make progress toward ensuring our continued
    readiness, there are requirements in many areas which could be
    accelerated to fiscal year 2000 should additional funds become
    available.

    USMC Fiscal Year 2000 High Priority Unfunded Programs (Prioritized
    within appropriations)

                            [In millions of dollars]

                                                                        PRGM
    APN:
        MV-22 Aircraft (3 A/C)........................................ 182.0
        KC-130J Aircraft (5 A/C)...................................... 313.9
        CT-39 Replacement Aircraft (3 A/C)............................  18.0
        F/A-18A ECP-583...............................................  43.0
        CH-53 Helicopter Night Vision Systems (HNVS) ``B'' Kits.......  27.7
        Health of Marine Aviation.....................................  26.4
                                                                      ______
          Subtotal.................................................... 611.0
                            =================================================================
                            ________________________________________________
    FAMILY HOUSING:
        H-346, MCB Hawaii, Family Housing.............................  22.6
        CP-H-0110-M2, MCAS Cherry Pt., Exterior Insulation & Finish
          System (EIFS)...............................................   2.7
        LE-H-0410-R2, MCB Camp Lejeune, Paradise Pt., Whole House
          Revitalization..............................................   9.1
        H-560, MCAS Yuma, Family Housing..............................  17.0
        PE-H-9995-M2, MCB Camp Pendleton, San Onofre Whole House
          Revitalization..............................................  10.6
        CP-H-0201-M2, MCAS Cherry Pt., Whole House Revitalization
          Townhouses I................................................   3.3
        CP-H-0202-M2, MCAS Cherry Pt., Whole House Revitalization
          Townhouses II...............................................   7.2
                                                                      ______
            Subtotal..................................................  72.5
                            =================================================================
                            ________________________________________________
    MILCON: P-741, MCB Hawaii, Bachelor Enlisted Quarters.............  21.3
                            =================================================================
                            ________________________________________________
    NGRE AVIATION:
        F/A-18A ECP-583...............................................  20.0
        CH-53E Helicopter Night Vision System (HNVS) ``B'' Kits.......   9.3
        KC-130T Avionics Modernization................................  16.8
        AN/AAS-38 FLIR................................................   9.7
        O&I Level Support Equipment for AN/AVS-9 Night Vision Goggle..   0.1
        AH-1W Night Targeting System (NTS) Kit........................   9.0
        Aviation Maintenance Trng Continuum System/Computer Based Trng   0.6
        Controlled Environmental Storage Shelters.....................   3.6
        CH-53E Aircrew Procedures Trainer (APT) Flight Simulator......  10.0
        CH-46E Aircrew Procedures Trainer (APT) Flight Simulator......  10.0
                                                                      ______
          Subtotal....................................................  89.1
                            =================================================================
                            ________________________________________________
    NGRE MISC:
        Common End User Computer Equipment............................   2.0
        AN/PSC-5 Single Channel TACSAT Terminal.......................   0.4
        Rough Terrain Container Handler...............................   1.0
        NBC Equipment.................................................   1.6
        Multiplexer AN/FCC-100(V)8....................................   1.2
        M1A1 Dehumidifiers............................................   0.1
        Quad Container (QUAD CON).....................................   6.1
        Pallet Container (PAL CON)....................................   4.6
        Containerized Laundry Unit....................................   0.3
        Special Application Scoped Rifle (SASR).......................   0.2
                                                                      ______
          Subtotal....................................................  17.5
                            =================================================================
                            ________________________________________________
    O&MN:
        Marine Aviation Program Related Logistics (PRL)...............  35.0
        Marine Aviation Program Related Engineering (PRE).............  12.0
                                                                      ______
          Subtotal....................................................  47.0
                            =================================================================
                            ________________________________________________
    O&MMC:
        Maintenance of Aging Equipment Program........................  37.2
        Corrosion Control and Coating (C\3\) Program..................  13.8
        Advertising...................................................   5.0
        Initial Issue.................................................  20.0
        Real Property Maintenance.....................................  82.0
                                                                      ______
          Subtotal.................................................... 158.0
                            =================================================================
                            ________________________________________________
    O&MMCR:
        Maintenance of Aging Equipment Program........................   1.5
        Corrosion Control and Coating (C\3\) Program..................   1.5
        Initial Issue.................................................  10.0
        Real Property Maintenance.....................................   0.8
                                                                      ______
          Subtotal....................................................  13.8
                            =================================================================
                            ________________________________________________
    OPN: OMNI IV NVGs.................................................  18.1
                            =================================================================
                            ________________________________________________
    PANMC:
        25MM Target Practice Discarding Sabot--Tracer (TPDS-T) (DODIC
          A940).......................................................   3.2
        25MM Target Practice--Tracer (TP-T) Linked (DODIC A976).......   3.0
        Fuze, Hand Grenade Practice (DODIC G878)......................   3.0
        5.56MM Ball (DODIC A059)......................................   5.0
        5.56MM Ball 4&1 Linked (DODIC A064)...........................   4.0
        40MM Practice (DODIC B519)....................................   0.4
        40MM White Star Parachute (DODIC B535)........................   1.0
        Cartridge .50 Cal Ball 4&1 Linked (DODIC A576)................   2.0
        60MM with PD Fuze (DODIC B643)................................   4.0
        Charge, Assembly Demolition (DODIC M757)......................   7.2
        Items Less Than $5M...........................................   1.3
        Rocket, 83MM Dual Mode (DM) HE (DODIC HX05)...................   9.0
                                                                      ______
          Subtotal....................................................  43.1
                            =================================================================
                            ________________________________________________
    PMC:
        Base Telecommunications Infrastructure (BTI)..................  32.9
        Network Infrastructure (NI)...................................  57.4
        CBIRF.........................................................   6.5
        HMMWVA2.......................................................  40.0
        Network Infrastructure (NI)...................................  17.3
        IRV, M88A2 HERCULES...........................................  49.4
        Night Vision Equipment........................................   8.5
        P-19A Aircraft Firefighting SLEP..............................   1.3
        Power Equipment...............................................   8.4
        Manpack Secondary Imagery Dissemination System (SIDS).........   0.7
        Base Telecommunication Infrastructure (BTI)...................  25.5
        Network Infrastructure (NI)...................................  37.3
                                                                      ______
          Subtotal.................................................... 285.2
                            =================================================================
                            ________________________________________________
    R&D AVIATION:
        4BN/4BW EMD...................................................  26.6
        AV-8B ATFLIR..................................................  48.3
                                                                      ______
          Subtotal....................................................  74.9
                            =================================================================
                            ________________________________________________
    R&D GROUND:
        AAAV Program Opportunities....................................  26.4
        LW155.........................................................   4.2
        MCWL..........................................................  10.0
        CBIRF.........................................................   4.0
                                                                      ______
          Subtotal....................................................  44.6
                            =================================================================
                            ________________________________________________
    SCN: LHD-8.......................................................( \1\ )
                            =================================================================
                            ________________________________________________
          TOTAL USMC.................................................1,496.1

    \1\ Unspecified.
    ---------------------------------------------------------------------------
                                     ______

                  Questions Submitted by Senator Thad Cochran
        Question. How many Amphibious Ready Groups (ARGs) are required to
    sustain continuous forward presence and how many ARGs do we have today?
    How many Amphibious Ready Groups have the Unified CINCs requested?
        Answer. The twelve Amphibious Ready Groups (ARGs) we have today are
    the minimum needed to meet the Nation's forward presence and
    warfighting requirements.
        Three Unified Commanders (USCINCCENT, USCINCEUR and USCINCPAC)
    continue to have requirements for continuous ARG/Marine Expeditionary
    Unit (Special Operations Capable) (MEU(SOC)) presence in each of their
    areas of responsibility. However, fulfilling this requirement would
    necessitate fourteen ARGs, which would exceed current funding levels.
    The present amphibious ship procurement plan results in an amphibious
    force capable of lifting a fiscally constrained 2.5 MEB equivalents of
    lift and forming twelve ARGs.
        These twelve ARGs and their embarked MEU(SOC)s provide a balanced
    distribution of Naval amphibious assets to the CINCs based on NCA
    approved allocation. Once forward deployed, the inherent mobility of
    naval forces can be exploited by deploying from one CINC to another as
    necessary in response to emerging crises. The 21st century ARG/MEU(SOC)
    will provide the Nation with technological advances in speed, mobility,
    communications, and navigation to identify and exploit enemy weaknesses
    across the entire spectrum of conflict. The LPD-17 and the LHD ship
    classes are the essence of power projection and will not only provide
    added flexibility, but will enhance the Corps' forward-deployed Marine
    Air Ground Task Forces' operational capabilities to effectively combat
    future threats.
        Question. How many LHAs and LHDs does the Navy have in service
    today and how much service life is remaining in the LHAs?
        Answer. Currently there are a total of 11 big deck amphibious ships
    in the Fleet comprised of 5 LHA TARAWA Class ships and 6 LHD WASP class
    ships. A seventh WASP class ship (LHD-7) is under construction and will
    commission in fiscal year 2001 resulting in a total of 12 big deck
    amphibious ships.
        The five LHA-1 TARAWA class ships will decommission at the end of
    their 35 year service life starting in the year 2011. The LHA-1 ship
    class decommissioning plan shows one ship decommissioned per year until
    the last ship in the class is decommissioned in 2015.
        Question. How do the LHD and LHA aviation capabilities differ,
    particularly with respect to MV-22 and other equipment and aircraft
    that will need to be brought aboard in the future?
        Answer. Aviation requirements for LHA and LHD flight decks are
    identical. Although the LHD was designed using the LHA hull as a
    baseline, there are two primary differences between the TARAWA class
    LHA and WASP class LHD. These differences are in flight deck size and
    ``island'' design, which make the LHD deck a safer environment for
    flight operations.
        First the LHD is designed with a smaller island providing more
    available flight deck area. Second, the LHD flight deck is slightly
    larger because the LHA ship class was originally configured with the
    two 5 inch gun mounts located on the forward corners of the flight
    deck. Although this represents a relatively small flight deck area on
    the LHD ship class, it allows for convenience in towing and parking of
    aircraft resulting in a safer environment when conducting flight
    operations. These two factors provide operators and maintainers greater
    clearances and safety margins, increasing the LHD operational
    capability.
        Of final note, neither the LHD or LHA allows concurrent rotary-
    wing/tilt rotor and fixed wing operations.
        Question. What is the cost of constructing an eighth LHD as
    scheduled in the fiscal year 2000 FYDP?
        Answer. Funding for the eighth LHD is contained in the fiscal year
    2000 SCN budget, Advance Procurement in fiscal year 2004 totals $166.7
    million, and SCN Unit Cost in fiscal year 2005 totals $1,537.7 million.
        Question. What are your thoughts on the savings that could be
    realized from building LHD 8 immediately following LHD 7 rather than in
    fiscal year 2004/05 as in the President's budget?
        Answer. We defer to Navy on particular savings for this building
    plan. However, industry has estimated that approximately $780 million
    in shipbuilding and acquisition costs are anticipated if the production
    line is interrupted. Building an LHD-8 immediately following LHD-7
    would prevent lay-off or reassignment of skilled employees, the loss of
    the ``learning curve'' benefit from serial production, the break in
    supplier production, increased material costs due to loss of suppliers,
    retooling and startup costs of the production line, and inflation
    avoidance.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
        Question. General Krulak, many of my colleagues have been struck by
    the story of your encounter with a young Marine standing his post
    overseas this past holiday season and how, when you asked him what he
    wanted most, he responded ``More ammo, sir''--that really brought home
    for us the serious nature of what needs to be done to make sure they
    have what they need to get the job done.
        We are aware of a shortfall in the Marine Corps Small Arms
    Ammunition account. Would you please address the committee on the
    extent of the shortfall and how much it might cost to fix the problem?
        Answer. Ammunition requirement determination is a complicated
    process since it has to take into account the 2 MTW scenarios, Residual
    and Strategic Reserves, as well as training requirements. Small Arms
    Ammunition is on my Unfunded Priority list.
        The following provides the small arms ammunition items that have
    been identified as having shortfalls and the amount needed to correct
    the problem:

    ----------------------------------------------------------------------------------------------------------------
                                                                        Proj fiscal     Proj fiscal
                           Item                         Fiscal year      year 2000       year 2005        Amount
                                                       1999 shortage     shortage        shortage
    ----------------------------------------------------------------------------------------------------------------
    5.56 mm ball (A059).............................  ..............  ..............   \1\ 9,554,862      $5,000,000
    5.56 mm ball (A064).............................       2,876,625      11,502,375       3,230,048       4,000,000
    5.56 mm blank (A080)............................  ..............  ..............         147,713         700,000
    7.62 mm ball (A131).............................  ..............  ..............         605,058       5,000,000
    .50 cal ball (A576).............................       2,832,718       3,881,218         835,859       4,000,000
    25 mm TP (A940).................................          79,442         105,228         104,225       3,200,000
    25 mm TPT (A976)................................  ..............             336          60,332       3,000,000
                                                     ---------------------------------------------------------------
          Total.....................................  ..............  ..............  ..............      24,900,000
    ----------------------------------------------------------------------------------------------------------------
    \1\ Funding request for 5.56 mm ball ammunition (A059) is in support of a projected fiscal year 2001 shortage.
      Due to production lead times, funds are needed in fiscal year 2000.

        Question. Mr. Secretary, CNO, I have championed the F/A-18
    Superhornet program because I am concerned about the well being of our
    pilots. The Department of Defense has lauded the program and the
    aircraft. It has achieved every milestone and requirement, and I
    understand that as we speak, it is undergoing sea trials and carrier
    qualifications as you say, ``bagging cats and traps''. I have heard
    some anecdotal comments about the Superhornet, and the pilots have been
    saying things like ``if I had to go to war today, this is the aircraft
    I would want to be in.'' Would you each address your personal
    professional view of the aircraft, its viability and its versatility?
        Answer. The Superhornet is absolutely the right aircraft for the
    Navy and it is delivering exactly what we have asked for. In addition
    to providing a significant improvement in survivability to our pilots
    over our earlier model F/A-18s, the F/A-18E/F will provide much greater
    operational utility and flexibility due to its 40 percent increase in
    range and 50 percent increase in endurance, greater payload, and a 300
    percent improvement in weapons recovery payload. The Superhornet is
    truly a multi-mission aircraft which will deliver every piece of
    aviation ordnance in the Navy inventory with the exception of the AIM-
    54 Phoenix missile, which will be phased out with the F-14. The carrier
    airwing's flexibility and reach is also improved by the F/A-18E/F's
    ability to function as a tactical refueler. Two separate campaign level
    analyses have concluded that the F/A-18E/F is two to five times more
    effective than the earlier model F/A-18C while suffering up to only
    one-fifth the losses. This means the air campaign could be completed
    more quickly resulting in fewer casualties in the air. The future
    viability of the Superhornet is assured by its capacity for growth and
    ability to accommodate new weapons systems to meet emerging
    requirements and threats. The F/A-18E/F remains on schedule and cost,
    is meeting its performance requirements and will deliver the capability
    needed in the carrier airwing well into the next century.
        Question. CNO, would you please discuss the Superhornet's abilities
    specifically addressing the aircraft's bring back capability and its
    Joint Stand Off Weapon Loadout and its capability in a functional
    tactical wartime environment?
        Answer. ``Bringback'' is the total combined weight of fuel and
    external stores that an aircraft can land aboard the carrier with. When
    you subtract the required fuel reserve, you are left with the weapons
    recovery payload or the amount of ordnance that can be brought back
    aboard the carrier. As the attachment shows, the weapons bringback is
    1,500 lbs for the F/A-18C and 4,500 lbs for the F/A-18E/F. This
    significantly limits the F/A-18C's ability to carry expensive joint
    weapons such as JSOW if there is a possibility of bringing these
    weapons back to the carrier. For example, the F/A-18E/F can launch with
    a weapons loadout of four JSOWs and recover at the carrier with all
    four weapons. On the other hand, an F/A-18C can launch with two JSOW
    but would have to expend or jettison at least one JSOW prior to landing
    aboard the carrier. This limitation has a significant impact on peace
    keeping operations such as those in Bosnia in which aircraft typically
    do not expend their ordnance and have to bring it back to the carrier.
        Another example of the importance of this capability would be a
    strike mission that required 16 targets to be attacked with JSOW. In an
    E/F airwing, you could launch just four E/Fs to complete this mission
    and if needed they could recover with all their weapons. It would take
    16 F/A-18Cs to do the same mission and prevent the possibility of
    having to jettison any weapons or eight F/A-18Cs with the possibility
    of jettisoning eight JSOW at a cost of greater than $200,000/weapon.
        The bottom line is that the F/A-18E/F enables the airwing commander
    to get the job done faster while putting considerably fewer aircraft at
    risk.
    [GRAPHIC] [TIFF OMITTED] T02MA10.000

                                     ______

                Question Submitted by Senator Richard C. Shelby
        Question. General Krulak, if the Marines are ordered into Kosovo as
    part of a NATO peacekeeping unit, how long do you anticipate having
    Marines on the ground? Will the Marines be relieved by Army troops?
    Will this operation adversely affect Marine Expeditionary Unit
    deployment and training cycles?
        Answer. Currently the Marine Corps expects limited involvement in
    Kosovo. In terms of potential NATO-led peacekeeping operations, Marine
    Corps operating forces have thus far been tasked to provide an Initial
    Entry Force capability for follow-on NATO peacekeeping forces (KFOR).
    The projected duration of this USCINCEUR/NATO mission requirement
    should not exceed 30-45 days from the initial introduction of Marine
    forces ashore from amphibious shipping. Such a limited duration force
    deployment will not have a long-term, adverse impact on MEU(SOC)
    training or deployment cycles.
        Given the Marine Corps posture of engagement, few of our operating
    forces are actually deployed in support of ongoing, long-term
    deployments such as those taking place in Bosnia and Iraq. For future
    peacekeeping operations in Kosovo, we anticipate providing individual
    Marines with specific skills (i.e, civil affairs, etc.), electronic
    warfare support with EA-6B assets as required, and naval presence
    through routine MEU(SOC) deployments to the European theater. Assuming
    that the scope of our involvement does not increase, the associated
    operational impact on the Marine Corps will remain limited. If U.S.
    Armed Forces are assigned a ground mission in Kosovo, the Marine Corps
    certainly has the capability to contribute forces towards that mission.

                              subcommittee recess

        Senator Stevens. Thank you very much. I am sorry to hold
    you up. The committee will meet on Wednesday, March 17th in
    this room for testimony on the Air Force fiscal year 2000
    budget request and current operations.
        [Whereupon, at 12:05 p.m., Wednesday, March 10, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    March 17.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                           WEDNESDAY, MARCH 17, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:02 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Specter, Bond, Hutchison,
    Inouye, and Dorgan.

                             DEPARTMENT OF DEFENSE

                          Department of the Air Force

                            Office of the Secretary

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

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. Good morning. We are delighted to have
    General Ryan and Secretary Peters with us this morning. I
    welcome each of you back to our committee, as we review the
    year 2000 budget request.
        Our review of your budget suggests the Air Force has done a
    good job in balancing limited dollars. The budget resolution
    now to consider may, however, develop so that we will not have
    the resources to fund the program you have proposed. I was
    waiting to analyze that.
        The proposed unspecified rescission and incremental funding
    of military construction in the President's budget are holes
    that Congress is trying to find a way to fill so we can pursue
    the defense bill. I know that you face a number of near- and
    far-term acquisition challenges. We are going to be pleased to
    hear your testimony in that regard.
        I must tell you, though, that I am becoming more and more
    worried about the future and our ability to pay for some of the
    systems that we believe you need and Congress has already
    authorized. We want to upgrade our missile warning capability.
    And further, we have anxiety about the future of the Joint
    Strike Fighter (JSF).
        I want to work with you, and I am sure all members of this
    committee want to work with you, through this budget and try to
    understand your priorities. But we must make certain that what
    we do now really lays the foundation for the Air Force for the
    next century. I think that clearly is your goal, and it is
    ours, also.
        I have to tell you, as I drove to work this morning, I kept
    thinking about some of the things I have heard this last week,
    and I am personally alarmed at some of the little facts that
    keep popping up that lead me to the conclusion we are nearer to
    the hollow military than I thought.
        As I mentioned to you, General, when I hear stories that we
    have an aircraft carrier deployed with less-than-full
    capability, and we hear stories about even people deployed
    overseas not having parts available that they need to maintain
    and prevent the redlining of our aircraft abroad, it worries me
    that we could be coming back to the point where we will get
    behind the curve on maintenance and spare parts supply and have
    to back up to do that instead of go forward with the next
    century's new systems.
        I know that that is a matter of your concern, also, and we
    have discussed the great problem of the pilot shortage. I hope
    to work with this committee and with you to develop a new
    approach to pilot education. I think we have to go back out and
    look at the ROTC function and see if we can find a way to start
    young men and women in college thinking about becoming pilots,
    even though they may not yet have made the decision to enter
    the Air Force or the Navy.
        I know I am taking a little bit long. I am a little tired.
    My brother-in-law was in town last night. That is always a
    problem. [Laughter.]
        You have sitting behind you the budget director for the Air
    Force, Major General George Stringer. He sneaked out with that
    announcement of a retirement. He has made these threats before,
    and we have been able to convince him not to do that. He is too
    young to retire.
        But, George, on behalf of the committee and those of us
    who, back in your days when you were a younger man, when you
    did not think about retirement, I traveled a great deal around
    the world with you, we want to thank you for all of the help
    you have given us personally, Senator Inouye and I in
    particular, and for your dedication and for postponing your
    retirement for these years that you did postpone it. We know
    that you wanted to leave before, and we wish you God speed. We
    really do.
        But before we proceed, let me ask Senator Inouye and the
    other members if they have any comments.
        Senator Inouye. We can always provide another star, you
    know. [Laughter.]
        Senator Stevens. Would that do it, George? Are you opening
    bidding?
        General Stringer. We would have to have that discussion on
    a Tuesday. [Laughter.]
        Senator Inouye. Well, I would like to add my gratitude,
    also. I remember General Stringer coming here as a captain.
        I believe you were a captain then, were you not, about 19,
    20 years ago? You have done pretty well. I am waiting for
    Colonel Ruter to follow you in there.

                       STATEMENT OF HON. DANIEL K. INOUYE

        Mr. Chairman, I want to join you in welcoming our Air Force
    leaders. The fiscal year 2000 budget request for the Air Force
    seeks to preserve our forces, but it provides an increase in
    funding compared to previous projections. That is true, but it
    is not as much as many of us on this committee would like to
    see.
        However, this is an important budget in many ways. We hope
    it will help to turn around the decline in our air forces, as
    noted by our chairman. It is clear that there are problems
    today in the Air Force that must be addressed. Mission
    capability rates are down. Recruiting goals are going unmet.
    Pilots are still leaving the force in large numbers. The
    approaches which we have used in the past to try to stem the
    tide do not seem to be succeeding as well as before.
        For those of us who have watched our defense establishment
    over the past several decades, we have seen an Air Force which
    has always been on the top. Your infrastructure has been the
    finest, your airmen and officers the highest caliber, and your
    weapons systems always in pristine condition.
        Even when our Army or Navy might have experienced problems,
    the Air Force usually seemed to be unscathed. So when we hear
    reports from you and from your staff that all is not well, we
    know that we had better respond immediately.
        I am told that there may be some good news as a result of
    increases in compensation and benefits endorsed by our military
    and congressional leaders. We can hope that these increases may
    be enough to signal our men and women in uniform that we intend
    to address their concerns.
        However, I believe we will need to do more to address the
    underlying readiness problems. We simply must provide at least
    the funding level that has been recommended by the
    administration. And, if possible, we should increase it.
        Mr. Chairman, I am sure you agree with this sentiment. Now
    we need the support from our colleagues to make it a reality.
    And I look forward to listening to the statements.
        Senator Stevens. Thank you very much.
        Senator Bond.

                     STATEMENT OF HON. CHRISTOPHER S. BOND

        Senator Bond. Thank you very much, Mr. Chairman.
        Mr. Secretary, General Ryan, I join with my colleagues in
    welcoming you. We know once again the Air Force is being asked
    to do more with less.
        Mr. Secretary, I know I join my colleagues when I voice
    concern over the Air Force's ability effectively to meet its
    mission requirements without making deep cuts into supply
    stocks and accelerating the depreciation of life cycle times of
    equipment, not to mention stretching personnel to their limits
    to increase deployment schedules.
        I understand that certain wings are experiencing
    debilitating cannibalization in order to give deploying
    squadrons fully mission capable aircraft, and that is a major
    concern. We have all heard about the abysmal retention rate of
    our pilots. We are sympathetic and supportive of your efforts
    to find an answer. But I am also concerned that the exodus
    spans the rank structure.
        Now over the years individual tactical training flight time
    has been drastically reduced. Operation maintenance funding has
    been creatively shifted around so that contingency operations
    may be fully resourced, while other phases of readiness
    training are critically short of funds. And operational flights
    in large part are spent flying figure eights in the sky, Iraq
    notwithstanding.
        That said, we recognize the awesome burden facing our armed
    forces, both in terms of increase in mission requirements, such
    as current operations in Iraq and a concurrent decrease in
    funding available to meet those missions.
        For many years, this committee, under the leadership of
    Chairman Stevens and Senator Inouye, has warned the Department
    of Defense about the policy of low-balling funding
    requirements, which only exacerbates the physical problems
    which will face the services' ability to conduct the myriad of
    operations required of you.
        As I understand from Mr. Hamre's comments before the
    committee, Iraqi weapons expenditures are not anticipated in
    this year's request. And we probably are going to be looking at
    another, yet another, emergency supplemental. If we know it is
    happening, it should not be an emergency.
        Over the past six years, the Congress has increased the
    defense budget by billions of dollars. And some critics have
    attacked us for those increases. But the department and the
    administration have routinely come back to us pleading for more
    through these emergency supplementals, primarily because of the
    burgeoning contingency operation costs. Some of those
    operations have extended way beyond contingency, and we have
    contested your financial planning for them.
        On a more happy note, as we look to meet your fiscal
    requirements and operational requirements, I think we ought to
    recognize the need to coordinate and integrate our combat
    forces more than ever.
        And Mr. Secretary and General Ryan, as one who is deeply
    concerned about the integration of our active and reserve
    forces, I particularly congratulate you on the manner in which
    the Air Force leadership has dedicated itself and been able to
    integrate the active, the reserve and guard components into a
    united fighting force.
        I do have concerns about the upgrading of National Guard
    general purpose squadrons to ensure their viability for future
    use in the 21st century. And I draw this fact to your attention
    because the St. Louis Air Guard F-15 unit is scheduled to
    conduct front line deployed operations overseas. And many of
    our nation's most experienced fighter aviators reside in Guard
    units.
        I am sure the service would benefit from ensuring their
    continued full integration into the fighter force, but they
    must be adequately resourced in order to keep them up to speed
    and to permit full integration into the order of battle for the
    front line theater commanders.
        General Ryan, when it comes to my question time, I would
    like you to address how the Air Force intends to ensure this
    and maybe speed up the integration of the F-15C into Guard
    units, or upgrade the fighter-to-fighter data links and
    electronics of the F-15As to keep them front line viable, or
    even convert these units to F-15E squadrons.
        I am also concerned, as you are both well aware, over the
    Air Force's handling of logistics support contracts and, quite
    frankly, the administrative negligence that we believe we see
    in the Air Force planning execution review, which seems to have
    been outlined by the Department of Defense Inspector General as
    well. I will specifically discuss this issue in the question
    and answer round following on our previous discussions.
        I do congratulate and thank both of you on your dedication
    to providing the Air Force with a program to ensure the Air
    Force will continue to meet its airlift mission requirements
    well into the future and will address that, too, in the
    questions and answers or questions submitted for the record.

                               prepared statement

        And, Mr. Chairman, I thank you for the opportunity and look
    forward to the questions and answers.
        [The statement follows:]

               Prepared Statement of Senator Christopher S. Bond

        Mister Secretary, General Ryan, I join with my colleagues
    in welcoming you before the committee today to address
    prominent issues concerning the Air Force.
        Today, the Air Force is once again being asked to do more
    with less. Mister Secretary I know I join with my colleagues
    when I voice my concern over the Air Force's ability to meet
    effectively its mission requirements without making deep cuts
    into supply stocks and accelerating the depreciation of life-
    cycle times of equipment not to mention stretching personnel to
    their limits through increased deployment schedules. I
    understand that certain wings are experiencing debilitating
    cannibalization rates in order to give deploying squadrons
    fully mission capable aircraft.
        We have all heard of the abysmal retention rate of our
    pilots and we are sympathetic to your efforts to find an
    answer. But I am also concerned that the exodus spans the rank
    structure. Over the years, individual tactical training flight
    time has been drastically reduced, operations and maintenance
    funding has been creatively shifted around so that
    ``contingency'' operations may be fully resourced while other
    phases of readiness training are critically short of funds.
    And, ``Operational'' flights in large part, are spent flying
    figure eights in the sky, Iraq notwithstanding.
        That said, we recognize the awesome burden facing our armed
    forces both in terms of its increase in mission requirements,
    such as current operations in Iraq, and a concurrent decrease
    in the funding available to meet those missions.
        For many years, the chairman and the other members of this
    committee have warned the Department of Defense about the
    policy of low balling funding requirements which only
    exacerbates the fiscal problems facing all of the services'
    ability to conduct the myriad of operations required of you. As
    I understand it from Mr. Hamre's comments before this
    committee, Iraqi weapon expenditures are not anticipated in
    this year's request and we might look forward to yet another
    Emergency Supplemental.
        Over the past six years, this Congress has increased the
    Defense budget by billions of dollars, some critics have
    attacked us for those increases but the Department and the
    Administration have routinely come back to us pleading for
    more, through these ``Emergency Supplementals'' primarily
    because of the burgeoning Contingency Operations costs. Some of
    these operations have extended way beyond any ``Contingency''
    status and we have contested your financial planning for them.
        On a more happy note, as we look to meet your fiscal
    requirements and your operational requirements, we recognize
    the need to coordinate and integrate our combat forces now more
    than ever. Mister Secretary, General Ryan, as someone deeply
    concerned about the integration of our active and reserve
    forces, I congratulate you for the manner in which the Air
    Force leadership has dedicated itself, and been able to
    integrate the Active, Reserve, and Guard components into a
    unitary fighting force.
        I do have some concerns regarding the upgrading of National
    Guard General Purpose squadrons to insure their viability for
    future force of the 21st century. I draw attention to this
    because of the fact that the St. Louis Air Guard F-15 unit is
    scheduled to conduct front-line, deployed operations overseas
    and many of our nation's most experienced fighter aviators
    reside in Guard units. I am sure that the service would benefit
    from insuring their continued full integration into the fighter
    force, but they must be adequately resourced in order to keep
    them up to speed, and to permit their full integration into the
    order of battle for the frontline theater commanders. General
    Ryan, when it comes to my question time I would like you to
    address how the Air Force intends to insure this and maybe
    speed up the integration of F-15C into Guard units--or upgrade
    the fighter to fighter datalinks and electronic suite of the F-
    15A's to keep them front line viable or even convert these
    units to F-15E squadrons.
        I am also concerned, as you are well aware, over the Air
    Force's handling of its logistic support contracts and the
    administrative negligence I have found in the Air Force's
    planning, execution, and review which seems to have been
    outlined by the Department of Defense Inspector General, too. I
    will specifically discuss this issue in the question and answer
    round.
        I do congratulate you both on your dedication to providing
    the Air Force with a program to ensure the Air Force will
    continue to meet its airlift mission requirements well into the
    future and we will address this, too, during the question and
    answer portion of this hearing.
        Mr. Chairman, I conclude my remarks now and await my turn
    for the question and answer round.

        Senator Stevens. Senator Hutchison.

                     STATEMENT OF HON. KAY BAILEY HUTCHISON

        Senator Hutchison. Thank you, Mr. Chairman. I thank you for
    having this opportunity for us to talk to our Air Force Chief
    of Staff and Secretary. And I want to say right off that I so
    appreciate Secretary Peters' service as the Acting Secretary.
    He has done a terrific job under some tough circumstances, and
    I appreciate it. I also have appreciated General Ryan since he
    has been on board.
        I would just say that I have been very outspoken and very
    concerned about mission fatigue, over-deployment. As you know,
    I have visited bases in Saudi Arabia with the chairman and the
    ranking member.
        I have certainly visited our troops in Bosnia, not
    necessarily Air Force, but Army there. And there is no question
    that mission fatigue is part of our retention problem.
        I want you to discuss that, because, of course, the pilot
    shortage is a big one. And I am hearing real problems, also, in
    our Guard, which has been the most impressive performer in real
    combat of all of our reserve-type units. This must be
    addressed.
        Now having said that, I believe the Air Force has responded
    with more creativity in the concept of the expeditionary
    aerospace forces (EAFs) than any of the other services, because
    now my Air Force personnel tell me they can plan. They know
    within a 15-month period that they are going to be on-call for
    a 3-month period and when it is going to be.
        Now that is a whale of an improvement in quality of life
    and planning possibilities for these families to know when they
    can have their vacations, when they will not be there for their
    children and perhaps compensate with other family members. So I
    applaud you, and I hope other services will look at that.
        The other--there will be some concerns that I will want to
    address in my question period. TRICARE is another quality of
    life issue that is particularly important for some of my Air
    Force bases.
        And I think shortchanging research in the bigger picture is
    an issue. I understand the constraints that you have and that
    you have had to prioritize. And certainly I support the Joint
    Strike Fighter. It is expensive, but absolutely necessary that
    we stay in the forefront of technology. But I want you to
    address the shortchanging of research. And I do not argue with
    how you cut, because I think you were quite fair. But I argue
    on the merits that I want to know what we are going to lose if
    we do not have human factors research. We are getting ready to
    have a joint strike fighter. I want to make sure that we know
    how the pilots are going to react in every instance with the
    strings that we put on them. And the same for other types of
    research and aerospace medicine.
        So I think you are doing a terrific job with what you have.
    And I applaud you. And I have to say that I am very impressed
    with both of you. But I want you to address these other issues
    and then tell us how we can help.
        Thank you.
        Senator Stevens. Senator Dorgan, do you have an opening
    statement?

                       STATEMENT OF HON. BYRON L. DORGAN

        Senator Dorgan. Mr. Chairman, I will be brief. I am anxious
    to hear the statement of the Secretary and the general. But let
    me echo the comments of Senator Hutchison.
        I think, Mr. Secretary, you have done a first-rate job.
    And, General Ryan, you as well. I am pleased with your
    leadership of the Air Force and pleased to be here today.
        I am going to have to leave at 11 o'clock. We have a
    national missile defense debate on the floor, and I am going to
    participate in that at 11 o'clock. So I do not know whether I
    will be able to offer my questions. But if not, I would like to
    send you some in writing.
        I would like to just mention that I have visited both of
    the air bases in North Dakota in recent weeks and some other
    visits as well. And I find a great deal of pride on both of our
    bases.
        Interestingly enough, I did not come away with the notion
    that there is a crisis in retention among the crews I talked to
    with B-52s and KC-135s. But there are mission fatigue issues,
    and a whole series of quality of life issues that I know that
    we have to deal with.
        But having said all that, these men and women on the
    airbases serving our country have a lot of pride in what they
    are doing and are people that this country should be proud of
    to have serving.
        Senator Stevens. If it would be a convenience to you, you
    could take the first five minutes and question.
        Senator Dorgan. No. That is fine. I will be happy to submit
    questions.
        But let me just also mention, I noticed in your statement
    that you quote Field Marshal Rommel, talking about the
    importance of the command of the air on the battlefield. And as
    I saw that quote, I was thinking of reading ``Citizen
    Soldier,'' which you no doubt have read, a remarkable book. And
    I was struck in reading that book of the importance of control
    of the air as well to our success on the battlefield. That book
    makes that point over and over and over again.
        I would like to ask some questions at some point about
    tiered readiness. You talk about readiness issues. And there
    have been some in Congress talking about a concept of tiered
    readiness, something I have not studied a great deal, but I
    understand what they mean by that. I would be interested in
    having your perspective on that.
        I am very interested, as you know on the issue of the size
    of our bomber force and the future of the B-52s and the
    capability of the B-52s for both the nuclear and non-nuclear
    mission.
        Having said all that, while I have a lot more to say about
    the Air Force, almost all of it complimentary, let me allow you
    to get to your opening statement.
        And again say, Mr. Secretary, thank you for your service. I
    know you have visited our state recently.
        And, General Ryan, I think you are doing a remarkable job,
    and I appreciate your being here.
        Senator Stevens. Thank you very much.
        May we have your statement, please, Mr. Secretary?
        Secretary Peters. Thank you, Mr. Chairman. Mr. Chairman,
    distinguished members of the committee, we very much appreciate
    the opportunity to appear here this morning to discuss the Air
    Force's future plans and priorities and, in particular, our
    proposed program for fiscal year 2000. We have submitted a
    lengthy posture statement for the record, but I would like to
    highlight several points.
        First, I would very much like to thank this committee for
    its unwavering support for Air Force programs, and probably
    even more importantly, your unwavering support for our
    outstanding young men and women. It has truly been gratifying
    to see the support of this committee. And I know everybody in
    the field understands that support and feels very much the same
    way that I do.
        Every day the talent, dedication, patriotism and spirit of
    our young men and women transform our aging aircraft and aging
    space systems into the most competent aerospace force the world
    has ever known. As we have shown in Operation Desert Fox and in
    daily operations in Southwest Asia, our Air Force is ready to
    fight with skill and precision and can deliver a powerful
    punch, when required.

                            Recruiting and retention

        Last year was a tough year, a year in which mission capable
    rates continued to fall, a 10 percent decline since 1991, and
    we were faced with unprecedented recruiting and retention
    problems. To combat these problems, our fiscal year 2000 budget
    focuses on enhancing readiness. Our program, we believe,
    permits real gains for our people, addresses high OPSTEMPO, and
    arrests declining readiness while providing for a balanced
    modernization strategy. Let me talk very briefly about each of
    these points.
        First, experienced airmen are absolutely the heart of our
    combat capability. As you know, we are losing our airmen at a
    rate that threatens readiness. The primary reasons for this, we
    think--and I have been out in the field now for about 125 days,
    talking to these folks--are fourfold: noncompetitive pay,
    reduced retirement benefits, high operational tempo, and lack
    of working equipment and spare parts.
        In my trips to the field and in surveys of airmen who leave
    the force, non-competitive pay and reduced retirement benefits
    are universally cited as key reasons for leaving, not for
    staying. One in three enlisted airmen say they would have
    stayed in the Air Force if the retirement benefit were returned
    to 50 percent. One in two say they would have stayed had pay
    been more competitive.
        Our fiscal year 2000 budget addresses pay and retirement
    through a triad of benefits, a 4.4-percent pay raise, pay table
    reform and return to 50-percent retirement. These are our
    number one priorities and are essential to improving readiness.
        The Air Force's efforts to improve retention and recruiting
    do not rest on these alone, however. During 1998 and continuing
    to 1999 and proposed for 2000, we have greatly increased the
    number of career fields eligible for enlistment or reenlistment
    bonuses that we have budgeted for additional increases.
        But with respect to recruiting, we made our mark in 1998,
    but in the last 5 months we are about 1,000 short out of about
    13,000 we have needed. To combat this shortage, we will
    increase the number of Air Force recruiters in the field. And
    for the first time, we have begun a program of paid
    advertising.
        We have used part of the plus-up money that we were given
    by Congress last year to fund recruiting, and our budget
    request for 2000 seeks additional funds for both recruiting and
    advertising.
        Today, as the chairman noted, we are about 1,000 pilots
    short out of 13,000. And we will be over 2,000 pilots short by
    the year 2002, if current trends continue. To combat this
    trend, we are increasing our pilot production to 1,100 per year
    in fiscal year 2000, and that includes converting Moody Air
    Force Base into a training base, which is part of our 2000
    budget.
        We have also increased our active duty service commitment
    for new pilots from 8 to 10 years. And we are selectively
    offering a 20-year career to pilots who are passed over for
    promotion.
        We will also ask Congress to extend the aviation bonus to
    those who have over 14 years of service and to give us the
    authority to waive restrictions on dual compensation for
    retired pilots, so we may use retirees on our staffs and
    possibly in training roles.
        There is one positive note on the pilot front, and that is
    that our long-term retention rate has gone up to about 45
    percent. It is too early to tell whether this is a trend, but
    we certainly hope it is.
        On the tempo front, as Senator Hutchison noted, we are
    working our young men and women very hard. Not only when they
    deploy for contingency operations, but also when they are at
    home filling in for others who have deployed.

                         Expeditionary aerospace force

        In addition, maintenance forces are working overtime
    because of a scarcity of spare parts. When parts are not on the
    shelf, maintainers cannibalize parts from other equipment, and
    that triples the amount of time to do the repair. To combat
    these tempo problems, we need to create the Expeditionary
    Aerospace Force, or EAF, which General Ryan and I announced
    last August. This effort is essentially budget neutral.
        We are on track to create the EAF by January 1, 2000. We
    believe that the EAF structure will in fact stabilize people's
    lives, even though the world will remain a very unstable place.
    We will ultimately drive down both the deployment tempo and the
    day-to-day work tempo of our forces.
        As part of EAF implementation in fiscal year 2000, we are
    realigning 2,641 positions from jobs that do not directly
    support expeditionary operations to those that do. We have
    found these positions through our reengineering and competitive
    sourcing efforts, which will continue for the next several
    years.
        A new scheduling system will also allow our reserve
    component to increase its participation in contingency
    operations. As a result, we believe we will lower individual
    workload by spreading work more evenly over a larger pool of
    active and Reserve airmen.

                                  Spare parts

        In addition, we are spending money on spare parts. We
    estimate that age-rated factors have driven spare parts
    consumption up by about $570 million over the last two years
    and that cost increases in industry and our depots will have
    added about another $750 million by fiscal year 2000.
        We plussed up spare parts in 1998 through reprogramming. We
    have used the extra money that Congress gave us last year to
    plus up spare parts again and to bring depot maintenance up to
    about 100 percent. And in our budget request for this year, we
    have added $300 million to assure full funding of the flying
    hour program, and an additional $223 million for new engine
    parts to try to stabilize our mission capable rates.
        In order to begin turning the corner on maintenance costs,
    we have also funded upgrade programs for all of our major
    weapons systems. And on our unfunded priority list we have put
    in funds for what we call a bow wave, which is critical spare
    parts, which we need to increase our inventory level.

                             Aircraft modernization

        On the modernization front, we continue the F-22 program,
    which is moving into low rate production. Let me digress for a
    moment to add that we are still within the cost caps on that
    program. And with the full support of our contractors, we will
    continue to aggressively seek cost reductions.
        We funded the C-17 multi-year program and added 14 C-17s
    for special operations. We also propose to buy additional F-16s
    to meet the needs of both our active and Guard fighter units.
    We restructured the airborne laser program to add additional
    funds and an additional year of risk reduction and testing, as
    recommended by General Marsh's independent advisory team, by
    the General Accounting Office (GAO) and by many members of both
    the House and Senate.
        And in space we have fully funded the evolved expendable
    launch vehicle, which now provides two competitive families of
    medium and heavy lift vehicles for use by military, civilian
    and commercial customers.
        Importantly, we also transferred launch complexes at Cape
    Canaveral and Vandenberg to both Boeing and Lockheed, so that
    they may operate EELV as a truly commercial launch service. We
    hope through these efforts to bring launch back to the United
    States, reducing the cost both for ourselves and for civil and
    commercial space users.
        And finally, in the space modernization area, we are
    funding global positioning system (GPS) modernization, advanced
    EHF (extremely high frequency), the polar EHF, the Discover II
    space-based radar demonstration program and the space-based
    laser program.
        In summary, General Ryan and I believe that the synergy of
    EAF with these budget initiatives will stop the decline in
    readiness by addressing the four issues central to sustaining
    our Air Force: people, OPSTEMPO, readiness and modernization.

                               prepared statement

        Mr. Chairman, I very much thank you for the opportunity to
    be here, and I will be happy to take your questions.
        Senator Stevens. Thank you very much, Mr. Secretary.
        [The statement follows:]
        Prepared Statement of F. Whitten Peters and Gen. Michael E. Ryan
                 united states air force posture statement 1999
        Mr. Chairman, members of the committee, 1998 was an important year
    for the United States Air Force. Comprised of the world's finest
    aerospace professionals, America's Air Force provides a flexible force
    that can quickly respond over long distances operating across the
    spectrum of peace and conflict, from combat to humanitarian relief.
        Always a progressive service, the Air Force continues to innovate.
    With its Expeditionary Aerospace Force (EAF) initiative the Service is
    reorganizing its forces to provide better trained aerospace forces to
    U.S. Commanders-in-Chief while adding predictability and stability to
    the lives of our airmen. Through innovative business practices, the Air
    Force is pushing quality up and costs down.
        Today, the Air Force is preparing itself for the challenges of the
    21st century. Our investments in airmen, infrastructure, and
    modernization will ensure the Service's ability to meet the needs of
    the United States in a dynamic national security environment.
                          america's air force in 1998
        America's Air Force is smaller today than at any point in its
    history. At its birth in September 1947, the active duty Air Force
    numbered 387,000 members; today it stands at 367,000. The Total Air
    Force includes 108,000 Air National Guardsmen, 71,000 Air Force
    Reservists, and 173,000 civilians, for a total of 719,000 people.
        Air Force professionals are responsible for operating and
    sustaining 20 fighter wing equivalents, 190 bombers, 120 intelligence,
    surveillance, and reconnaissance platforms, 1,450 mobility aircraft,
    550 intercontinental ballistic missiles, and 59 satellites. They live
    and work at 172 installations around the world; on any given day,
    approximately 95,000 members are either deployed or on permanent duty
    in forward locations. An additional 138,000 airmen are ready to deploy
    on short notice to support America's national security needs.
        The Air Force is globally engaged on a daily basis. While the
    active duty portion of the Air Force has dropped 33 percent since the
    fall of the Berlin Wall, the number of deployed forces has risen 400
    percent. In 1998, the Air Force flew more than 2,200 missions in the
    Balkans, 27,000 missions over Southwest Asia, and 30,000 airlift
    missions. During this same period, Air Force members participated in
    over 1,600 exercises in 35 countries, and conducted almost 300
    military-to-military contact visits in Europe and the Pacific.
    Additionally, Air Force airlifters conducted almost 100 Denton
    Amendment humanitarian relief missions to 30 countries, and supported
    numerous joint force deployments throughout the year. From Air Force
    space ranges, the Service launched 13 military, 13 civil, and 17
    commercial satellites, keeping the nation first in space.
                                  introduction
        Today's national security environment requires flexible military
    forces that are able to quickly respond over long distances and
    accomplish many different missions. The Air Force is uniquely suited to
    this environment--its inherent speed, range, flexibility, and global
    perspective make it the military rapid response force of choice for
    post-Cold War U.S. decision makers. Whether advancing national
    interests from space, deploying to distant theaters to enforce American
    policy, or airlifting life-saving food and medical supplies to victims
    of natural or man-made disasters, the Air Force has proven time and
    again the pivotal role of aerospace power in meeting the nation's
    security needs.
        Aerospace power is critically important to national command
    authorities and to joint force commanders. With its highly trained
    professionals, the Air Force is skilled at bringing unmatched aerospace
    power to bear on any crisis, no matter the distance. The Air Force core
    competencies, aerospace superiority, global attack, precision
    engagement, global mobility, information superiority, and agile combat
    support integrate well into joint campaigns, providing the most rapid
    and effective way to achieve national objectives, while reducing risk
    to our men and women in uniform.
        From beginning to end, Air Force aerospace power enables joint
    operations. Prior to conflict, global intelligence, surveillance, and
    reconnaissance (ISR) assets provide strategic awareness to national
    leaders. On the eve of combat, global aerospace mobility assets bring
    critical manpower and supplies to the theater. During combat
    operations, Air Force ISR provides theater commanders the operational
    and tactical information edge they need to fight and win. The Air Force
    wins aerospace superiority for the joint force--freeing it from the
    threat of attack from aerospace and allowing it the freedom to use the
    medium to maneuver and attack. Uniquely, Air Force long-range airpower
    and air refueling assets give the joint force the ability to deliver
    precise effects throughout the depth of the battlespace to win decisive
    victory. In non-combat scenarios, Air Force global mobility assets are
    the world's best at delivering humanitarian relief. Air Force space-
    based systems are on-duty 24 hours a day providing strategic warning,
    as well as facilitating communication and precise navigation. Across
    the spectrum of peace and conflict, the Air Force provides the joint
    force commander key military capabilities.
        A unique dimension of Air Force aerospace power is its ability to
    project the full range of these capabilities on a global scale,
    quickly, effectively, and when necessary, lethally. If needed, Air
    Force global attack aircraft can leave airfields in the United States,
    fly directly to any target on the globe and deliver overwhelming,
    precise firepower to achieve strategic, operational, or tactical
    effects.
                      air force role in national security
        ``Anyone who has to fight, even with the most modern weapons,
    against an enemy in complete command of the air, fights like a savage
    against modern European troops, under the same handicaps and with the
    same chances of success.''--Field Marshal Erwin Rommel
        The United States integrates its many instruments of power to
    influence the international security environment. In October of last
    year, the President published an updated National Security Strategy.
    This document, in combination with the National Military Strategy,
    directs the Department of Defense to work with other government
    agencies to shape and respond to today's security challenges and
    prepare for those of the 21st century. The Air Force actively executed
    this strategy during 1998.
                                    shaping
        The Air Force shapes the international security environment in many
    ways. With more than six forward-stationed fighter wings, 95,000 people
    permanently or temporarily assigned to forward locations, and satellite
    constellations constantly on watch, Air Force presence immediately and
    continuously influences world events. The Air Force's ability to employ
    aerospace power for combat, peacekeeping, or humanitarian operations
    anytime, anywhere gives national leaders the ability to react to any
    crisis, often at a very early stage.
        In addition, the Air Force shapes the international landscape with
    a comprehensive program of cooperative engagement. Clearly recognized
    as the world's most capable aerospace force, the Air Force is building
    sound security relationships with allies and coalition partners around
    the world through substantive international exercises, education and
    training programs, and foreign military sales.
    Deterring
        Preventing conflict--deterrence--is an important dimension of
    shaping and a mission accomplished by the Air Force daily. The broad
    range and forward posture of aerospace forces--whether conventional or
    nuclear, theater- or CONUS-based--deter aggression and demonstrate U.S.
    commitment to the international community. During 1998, airmen stood
    watch in the Pacific, Europe, and Southwest Asia with forward-based
    units; maintained around-the-clock alert in order to deter conflict
    with Peacekeeper and Minuteman III intercontinental ballistic missile
    forces in the United States; and flew B-1, B-2, and B-52 Global Power
    missions from the U.S. to distant locations, underscoring U.S.
    commitment and willingness to defend its interests throughout the
    world.
    Promoting Stability
        The Air Force seeks to promote international stability by building
    broad relationships with the militaries of other nations. These ties
    increase mutual understanding and enhance interoperability. Air Force
    engagement programs facilitate cooperation and access during
    contingencies and enable future coalitions of willing and capable
    allies.
        Recently, Air Force international engagement and stability efforts
    have focused on support of Joint Chiefs of Staff (JCS) and other
    international exercises, the Partnership for Peace Program, Military
    Contact and International Armaments Cooperation Programs, as well as
    Security Assistance efforts. Last year, the Air Force was actively
    engaged in 88 international exercises in 82 locations throughout the
    world. These included 17 exercises with 27 Partnership for Peace
    countries and nearly 300 focused Military Contact Program events. The
    Service maintains more than 250 agreements under the International
    Armaments Cooperation Program to encourage the exchange of information
    with allies and coalition partners. These exchanges involve cooperative
    research and development, scientist and engineer exchanges, equipment
    loans, and scientific and technical information exchanges.
        In 1998, the Air Force's Foreign Military Sales (FMS) program
    managed over 4,000 contracts for aircraft, spare parts, munitions, and
    training worth more than $105 billion. Meanwhile, the International
    Military Education and Training (IMET) Program continued to emphasize
    management training and professional military education. Under the IMET
    Program, the Air Force trained 1,156 students from 88 countries; 225
    graduated from U.S. specialized undergraduate pilot training.
                                   responding
    Contingency Operations
        Should shaping and deterrence prove inadequate to meet U.S.
    security needs, the Air Force is prepared to respond across the
    spectrum of conflict. For small-scale contingencies, the Air Force
    offers U.S. policy makers the ability to provide humanitarian
    assistance, enforce no-fly zones, evacuate U.S. citizens and conduct
    limited strikes and interventions.
        In the 1998 National Security Strategy, national leaders identified
    halting operations as a linchpin in the nation's two Major Theater War
    (MTW) strategy. This strategy uses fast responding U.S. capabilities to
    defeat aggression in distant theaters, quickly and decisively. This
    strategy allows warfighting commanders to seize the initiative,
    minimize territory that must be won back, and maintain coalition
    integrity. The traditional attributes of aerospace power--speed, range,
    flexibility--and its global reach and perspective; combined with
    stealth and precision, make aerospace power the force of choice to
    execute the halt. The Air Force can rapidly deploy a powerful maneuver
    force to any location and conduct sustained operations with precise
    effects. Importantly, using aerospace power to stop an aggressor allows
    our warfighters to win with minimum risk to U.S. personnel--a strategy
    consistent with enduring national values.
        During 1998, aerospace power advanced the interests of the United
    States in every corner of the world. This was especially true in
    Southwest Asia and the Balkans, where the Air Force put teeth into
    United Nations resolutions and the Dayton Peace Accords. Using
    powerful, day/night, all-weather, surveillance and reconnaissance
    capabilities, the Air Force ensured that allied leaders and U.S.
    commanders retained dominant battlespace awareness in both regions.
        In the Arabian Gulf, Air Force units in operations Northern Watch
    and Southern Watch, patrolled no-fly zones and maintained the ability
    to employ decisive force in support of U.N. resolutions on Iraq. Three
    times in 1998 the international community reacted to violations of
    these resolutions by Iraqi leadership. The Air Force, central to the
    coalition team, rapidly increased its deterrent presence. Behind the
    scenes, CONUS- and space-based assets provided support to, and
    enhanced, this potent in-theater force. Faced with clear resolve and
    imminent employment of aerospace combat power, Iraqi leadership twice
    backed down. In December, because of continuing Iraqi intransigence,
    National Command Authorities ordered DOD to execute Operation Desert
    Fox--a strong, sustained series of air strikes against Iraq.
        The Air Force played a crucial role in Operation Desert Fox
    employing its air and space weapons systems to ensure aerospace and
    information superiority, and to precisely attack Iraqi military
    targets. The Service's space systems provided targeting, threat, and
    navigation support to coalition forces. Air Force bombers precisely
    struck targets from distant bases, once again demonstrating the range,
    striking-power, and flexibility of these weapons systems. The B-1
    Lancer proved itself in combat, destroying Iraqi military barracks. B-
    52 Stratofortresses launched from Diego Garcia and employed
    Conventional Air Launched Cruise Missiles (CALCM) against a range of
    targets, illustrating the long-range power and effectiveness of Air
    Force aircraft with standoff weapons. And, theater based F-16's and A-
    10's conducted precision attacks.
        The Air Force remains the key contributor to our nation's
    commitment to stability in Southwest Asia. The Service's intelligence,
    surveillance, and reconnaissance assets provided the majority of
    resources that informed national leaders about activities in the
    region. Additionally, the Air Force flew 75 percent of the sorties in
    Northern Watch, 68 percent of the sorties in Southern Watch, and nearly
    all of the air refueling sorties essential to Air Force, Navy, and
    Marine operations.
        Air Force participation in operation Joint Forge helped keep peace
    in the Balkans. Fusing imagery and other information from space, manned
    aircraft, and unmanned aerial vehicles, the Service created a unified
    picture of the region, allowing U.N. forces to control what flew in the
    air and moved on the ground. The ability of aerospace power to provide
    battlespace awareness and hold at risk targets that aggressors value
    provided diplomats the leverage they needed to negotiate an agreement
    to end the violence in Kosovo. Within hours of inking the Kosovo
    agreement, Air Force aircraft were flying over the area, executing
    operation Eagle Eye, the NATO mission to monitor compliance. The speed,
    range, and flexibility of aerospace power were again on display.
    Counterdrug Operations
        Throughout 1998, Air Force counterdrug operations demonstrated both
    the versatility of aerospace power and the innovative ways the Service
    uses its assets to counter non-traditional threats. Airborne and
    ground-based radars and sophisticated intelligence collection platforms
    identified suspected drug traffickers before they could enter U.S.
    airspace. Reserve fliers tracked drug smugglers far from our borders,
    and the Civil Air Patrol aided law enforcement agencies at home. On the
    ground, Air Force working dogs detected significant quantities of
    illegal drugs at U.S. ports, which barred their entry.
    Humanitarian and Relief Operations
        The Air Force continues to use its global mobility assets to save
    lives and relieve suffering. When the U.S. embassies in Kenya and
    Tanzania were bombed, the Air Force deployed Initial Response Teams of
    medical personnel and security forces in less than 24 hours from Prince
    Sultan Air Base. Their timely arrival reduced suffering and helped to
    stabilize the situation. This marked one of the first times that the
    Service deployed forces from one contingency operation to another. In
    addition, twice this year, the Air Force reacted to natural disasters
    in China airlifting emergency supplies to remote areas. To the delight
    of the world's children, the Air Force also airlifted Keiko, the whale,
    from Oregon to a new home in Iceland, demonstrating the flexibility of
    our people and equipment.
        At home, when heavy winter storms ravaged the East Coast and Rocky
    Mountains, the Air Force airlifted critical disaster relief supplies to
    the affected areas. Livestock stranded by these conditions were kept
    alive by airdrops in Vermont and New Mexico. When catastrophic
    wildfires engulfed large parts of Florida, the Air Force helped reduce
    the destruction, moving 72 fire trucks and 269 fire fighting personnel
    from the western U.S. to decisive points in Florida to fight these
    fires. Their efforts protected thousands of residents and greatly
    limited damage.
                                   preparing
        The Air Force was in constant demand during 1998 with deployments
    continuing at four times the Cold War pace. The Air Force met this
    demand with one-third fewer people and 40 percent less force structure.
    We did significantly more, with significantly less. The combination of
    increased commitments and reduced resources while operating within a
    Cold War organizational structure have led to a higher tempo and
    increased strain on people and equipment. To improve the way that it
    accomplishes its mission, while lessening the impact of increased tempo
    on our airmen, the Air Force is implementing its Expeditionary
    Aerospace Force initiative.
            expeditionary aerospace force--innovating for the future
        Today's national security environment requires America's Air Force
    to be continuously engaged in contingency operations across the
    spectrum of peace and conflict, frequently in austere locations, while
    remaining ready to fight in two major theater wars. To meet this need,
    the Air Force is revamping its concept of operations--transforming how
    it organizes, trains, and deploys forces into theaters of operation,
    accomplishes its missions, and then redeploys. The Expeditionary
    Aerospace Force (EAF) concept represents an evolutionary transition
    from a threat-based, Cold War garrison force, oriented on containing
    the Soviet Union, to a capabilities-based force focused on
    responsiveness and engagement.
        Under EAF, the Air Force will reorganize its forces by January
    2000, operationally linking geographically separated units to form ten
    Aerospace Expeditionary Forces (AEF's). Each AEF package will consist
    of a full complement of air and space assets with manpower drawn from
    the Total Force: Active duty, Air National Guard, and Air Force
    Reserve. Fighter, bomber, tanker, airlift, command and control, radar,
    and electronic warfare aircraft combined with communication,
    intelligence, surveillance and reconnaissance air and space systems
    will provide customized AEF units with unparalleled lethality and
    responsiveness. The AEF reorganization utilizes new operational
    concepts and developing information-based technology to create these
    units without moving significant force structure.
        AEF's will be scheduled on a 15-month cycle with 90-day
    vulnerability periods for deployment. During each vulnerability period,
    two AEF's will be available to support short notice taskings as well as
    scheduled forward presence missions such as the Balkans and Southwest
    Asia.
        AEF's will provide U.S. combatant commanders more capable, highly
    trained forces. Training as a team during their spin-up cycle, AEF's
    will form fully integrated aerospace units that combine the
    capabilities of the Service's weapons systems to create a powerful
    composite force. AEF deployment schedules will be published a year or
    more in advance allowing commanders to structure training programs to
    put these units at the peak of readiness as they enter their
    vulnerability period. A known commitment period will also permit AEF's
    to refine training and planning to match current world events,
    resulting in shorter response times and a tailored force that better
    meets the needs of U.S. commanders in the field.
        Advanced scheduling is an important dimension of the AEF; it adds
    predictability and stability to the lives of airmen. Letting airmen
    know ahead of time when they are likely to deploy will permit them to
    predictably plan professional and family events and mitigate the impact
    of high operations tempo on them. The AEF also will allow better use of
    the Air Reserve Component. Knowing in advance when they will be
    committed to AEF taskings will permit Air National Guard and Air Force
    Reserve personnel to better manage their civilian work schedules
    enabling them to participate. This predictability will benefit the Air
    Force, its reservists, and their civilian employers. In this way, the
    move to the EAF concept will allow the Air Force to make fuller use of
    its versatile, hard-working Reserve Component.
        The EAF is much more than an innovative way of organizing and
    employing aerospace power. It is a change in the way the Air Force
    assigns its forces. Currently, the Air Force sizes its support forces
    based on the number of permanent bases that it operates. Support forces
    for expeditionary sites are then drawn from this pool of manpower with
    the result that over 10,000 personnel--enough to man three average-
    sized fighter wings--are deployed from their assigned locations every
    day. Consequently, there are not enough support personnel to go around,
    and airmen left at home work longer, and harder than they should,
    without relief. The EAF initiative addresses this problem by realigning
    manpower authorizations to support the Air Force's AEF's. By increasing
    the size of deploying support career fields, the Air Force will be able
    to better sustain expeditionary operations and manage the effect of
    tempo on airmen. In part, this realignment of manpower is being made
    possible through improvements in business practices. As the Service
    finds better ways of accomplishing tasks that do not require uniformed
    personnel, it is redirecting authorizations to career fields that
    deploy and support expeditionary operations.
                                  total force
        America's Air Force is a well-integrated Total Force that relies on
    critical contributions from active-duty members, guardsmen, reservists,
    civilians, and contractors. Each has unique and complementary
    characteristics that, when combined, produce a strong and versatile
    team. This year, building on its reputation as the DOD Total Force
    benchmark, the Air Force expanded the role of the Reserve Component in
    its flying training and security force missions, more fully utilizing
    the special skills reservists bring to these important mission areas.
    Continuing to look ahead, the Air Force commissioned a study, Future
    Total Force, to determine how to achieve the right force mix in the
    21st century. A key to tomorrow's Total Force is continued support of
    Reserve Component personnel by their civilian employers. The Air Force
    is working with employers to make guardsmen and reservists' military
    service as beneficial to them, as it is to the nation.
                                  focus areas
    Force Protection
        The Air Force has an impressive force protection capability. The
    Service's long-range objective is to institutionalize force
    protection--making it a cornerstone of daily operations. The Air Force
    continues to enhance force protection by training airmen, equipping and
    reorganizing security forces, and exploiting technology to protect
    home-station and deployed units. In 1998, the Service continued to
    adapt its security forces to face the evolving threat. For example, to
    meet the needs of expeditionary operations, the 820th Security Forces
    Group provides stand-alone, rapidly deployable security forces
    squadrons consisting of security forces, intelligence, Office of
    Special Investigation, medical, communications, and engineering
    personnel. Tailor-made to support rapid deployments into forward
    theaters and sustained, secure operations from forward locations, the
    820th provided the security for two Air Expeditionary Wing deployments
    to Southwest Asia in 1998.
        To improve the security of its permanent and expeditionary
    locations, the Air Force is conducting vulnerability assessments at
    every installation. The Service is mitigating the deficiencies that the
    teams identify while pursuing long-term remedies. This review is
    strengthening the security of Air Force installations at home and
    abroad.
    Space Operations
        Composed of both air and space, the continuous, indivisible
    aerospace medium is the operating environment of the Air Force. Since
    its founding, the Service has dominated the aerial environment. It is
    now evolving its doctrine, equipment, personnel, and culture in order
    to continue that dominance throughout the entire aerospace dimension.
        Today, Air Force space operations enable many of the current
    capabilities of all the U.S. Armed Forces. The Air Force's space-based
    systems are increasingly responsible for the global awareness that
    national leaders and regional Commanders-in-Chief count on. Air Force
    satellites provide aircrew the intelligence and weather data they need
    to plan and conduct their missions. The Service's constellation of
    Navstar Global Positioning System (GPS) satellites helps all of the
    Armed Forces navigate and deliver weapons precisely on assigned
    targets. Constellations of Air Force communication satellites
    facilitate the command and control of the joint force.
        The Air Force is working hard to better integrate its air and space
    systems. For example, the Multi-Source Tactical System (MSTS) brings a
    range of space products such as weather, surveillance and navigation
    information directly into cockpits. Another example, Combat Track,
    provides airborne aircraft precise GPS location data, two-way message
    text, and planning information.
        As a strong steward of space for the nation, the Service is
    collaborating with several governmental and private organizations to
    best use its resources and improve space operations. One example is the
    Space Partnership Council, which consists of the Air Force, the
    National Aeronautics and Space Administration (NASA), and the National
    Reconnaissance Office (NRO). Working together, the Council integrates
    planning efforts, reduces risk, avoids duplication, and identifies ways
    to save money. In 1998, for example, the Council realized substantial
    savings in the areas of precision targeting and long haul
    communications. In a similar effort, the Air Force and NASA combined
    base operating support contracts at their Florida launch facilities,
    significantly reducing costs for both organizations. Additionally, the
    Air Force Research Laboratory is partnering with NASA to leverage
    research and development funds, maturing important technologies while
    saving tax dollars.
        The Air Force has also formed partnerships with industry. With its
    Warfighter-1 technology demonstration program, the Air Force is taking
    advantage of commercial infrastructure and investment to assess the
    military utility of hyperspectral remote sensing from space--a new
    technology with great promise. Also in 1998, the Air Force reached
    agreement with major companies using the launch facilities at Cape
    Canaveral Air Station, Florida and Vandenberg AFB, California. The
    Commercial Space Operations Support Agreement created a standard for
    commercial use of the Air Force's unique space infrastructure, making
    it simpler and cheaper for U.S. concerns to reach space.
    Information Operations/Assurance
        The Air Force depends on timely, reliable, and secure information.
    The Service executes Information Operations (IO) in air, space, and
    cyberspace to gain and maintain information superiority. Toward this
    end, the Air Force published its IO doctrine and issued a comprehensive
    policy for defensive IO last year. It also completed a sweeping
    Electronic Warfare (EW) Operational Shortfall Study aimed at ensuring
    the superiority of Air Force EW capabilities into the 21st century.
        The Air Force continues to focus on defensive counter-information
    operations, particularly information assurance, by deploying
    technologies that improve intrusion detection and response capabilities
    to protect computer networks. The Service fielded the Automated
    Security Incident Measurement (ASIM) system at all its bases worldwide.
    ASIM gives the Air Force the ability to identify and track those that
    attempt to penetrate its networks. Additionally, the Service deployed a
    new suite of firewall, network management, and protection tools in
    December 1998, giving it an up-to-date, robust capability to assure the
    operational availability and integrity of networks and the information
    contained within them.
        The Air Force is also creating organizations and capabilities at
    all levels to control, monitor, and protect its networks. These
    organizations are establishing reporting and compliance procedures to
    ensure that the vulnerabilities of the Service's networks are
    identified and remedied. These precautions will also ensure that
    information placed on publicly accessible systems is properly reviewed
    and does not include personal or operational data.
        Finally, the Air Force is undertaking a program known as
    Operationalizing and Professionalizing the Network to treat networks
    similar to its weapons systems. ``Operationalizing'' focuses on
    applying operational rigor to network functions including inspections
    and evaluations, graduated response, operational reporting, and rules
    of engagement. ``Professionalizing'' networks involves actions required
    to organize, train, equip, and sustain networks and the personnel that
    operate them. Specific initiatives include applying engineering
    discipline to in-garrison and deployed networks, designing layered
    ``information protection'' throughout the network, certifying and
    licensing network professionals and users, assigning data ownership,
    and standardizing network equipment based on common Air Force technical
    architecture. The Air Force is instilling in every airman that
    information security is everyone's job and that lives depend on it.
        An important information assurance task is the transition to the
    Year 2000. The Air Force will ensure that mission-critical functions
    continue without interruption or error on January 1, 2000 and beyond.
    To do this, the Air Force has evaluated, prioritized, and updated its
    systems. Eighty-two percent of its mission-critical weapons and
    information systems were certified Y2K compliant by December 31, 1998.
    Certification of remaining systems is on-track to meet requirements
    before January 2000. The Air Force began executing a thorough Y2K
    testing and operational evaluation program in 1998 completing ``end-to-
    end'' tests of the F-15, B-1, and Advanced Medium Range Air-to-Air
    Missile. Evaluations will continue in 1999 and include tests with
    sister services, defense agencies, and other joint activities. The
    Service will have continuity of operation plans in place for all
    mission tasks and systems--the Air Force will be mission ready and
    flying on January 1, 2000.
                       readiness under fiscal constraints
        ``Airpower is like poker. A second-best hand is like none at all--
    it will cost you dough and win you nothing.''--Lt Gen George Kenney
        Readiness--the ability of a Service to conduct its primary mission
    is a complex quality. It depends on bringing many components together
    to develop and focus combat power. Some of these components are
    tangible, such as the number of top-notch and fully trained airmen,
    mission-ready aircraft, or orbiting satellites. Others, like individual
    and unit morale, unit cohesion, and unit effectiveness, are less
    tangible. As Air Force senior leaders have reported, the Air Force
    remains ready to meet today's demands. However, the combination of
    several years of constant high operations tempo, aging equipment, and
    the cumulative effect of too few dollars has taken its toll on current
    readiness and created concerns about future readiness.
        Readiness is declining, especially for stateside forces. Because
    the Air Force gives forward units priority for resources to keep them
    at peak strength, stateside units suffer lower readiness rates. The
    strains--and the limits--of doing more with less are clearly evident.
    Major unit readiness decreased by 18 percentage points in the past two
    and a half years, with stateside combat readiness declining by 56
    percentage points in that same period. Nearly half of that decline
    occurred in the last ten months of 1998. In response, the fiscal year
    2000 President's Budget increases readiness spending, which should
    address the readiness decline.
                    our airmen are a treasure to the nation
    Recruiting and Retaining
        ``Only the most dedicated, well-trained personnel with first class
    leaders will succeed in the complex and fast-paced environment of
    future military operations''--Gen Shalikashvili, 1997 National Military
    Strategy
        America's airmen are the foundation of the Air Force and a national
    treasure. We must recruit and retain the very best. Although the Air
    Force met its recruiting goals in fiscal year 1998, its increasing
    difficulty in meeting these goals and a slight decline in the quality
    of recruits caused concern. Therefore, the Air Force enlarged its
    recruiting force, significantly increased its enlistment bonus program
    and increased the size of its advertising budget to ensure that it
    continues to attract top-notch people.
        Attracting good people is only the first step in building and
    maintaining the world's finest air force; retaining them is just as
    important. Retention has become a serious problem. Air Force people
    have earned an enviable reputation as disciplined and highly skilled
    workers--civilian employers actively recruit them. The combination of
    several years of high operations tempo, a less attractive retirement
    package, civilian-military pay disparities, and a strong economy, are
    making it difficult to keep our people in uniform.
        Retention is challenging across all ranks and career fields. For
    many, especially pilots, the pull from the civilian sector is powerful.
    The stable family lifestyle, as well as excellent pay and benefits
    offered by the airline industry, are strong enticements. At the start
    of this year, the Service was 855 pilots short of its needs, that
    number is expected to increase to approximately 2,000 in fiscal year
    2002. The Reserve Component is also having difficulty manning its full-
    time flying billets. To address these shortages, the Air Force has
    increased pilot production and added two years to the initial pilot
    training commitment. These changes will make a difference; however,
    they have a long-term focus and will not be felt for several years.
        Retention is also a serious concern for enlisted personnel,
    especially mid-level non-commissioned officers. These airmen represent
    an experience and leadership base that is critical not only for today's
    readiness, but also for training tomorrow's Air Force leaders. In 1998,
    the reenlistment rate for those completing their second term of
    enlistment was 69 percent. This is below the Air Force goal of 75
    percent and dropped for the fifth year in a row. In fact, many key
    warfighting career fields, such as security forces, avionics, aircraft
    maintenance, and air traffic control are experiencing even larger drops
    in reenlistment. First-term and career reenlistments also fell below
    Air Force goals. For the first time since 1981, the Service has failed
    to meet retention goals for all three categories of its enlisted force:
    first-term; second-term; and, career professional airmen. Losing these
    individuals is a costly blow to readiness. To combat these trends, the
    Air Force more than doubled the number of career fields eligible for
    Selective Reenlistment Bonuses to 117. The Service believes that the
    improvements in the retirement system and military pay, proposed in the
    fiscal year 2000 President's Budget, will enhance retention.
    Quality of Life (QoL)
        America's sons and daughters become Air Force airmen because they
    want to be part of a quality organization--an organization that offers
    a higher calling and special way of life. To provide for, motivate, and
    retain its airmen, the Air Force continues to support several Quality
    of Life initiatives: a valued retirement benefit; fair and competitive
    compensation; safe, affordable, and adequate housing; quality health
    care; balanced tempo; robust community and family programs; and,
    expanded educational opportunities. These are the initiatives
    commanders, first sergeants and airmen indicate are important to them.
        Traditionally, the retirement benefit has been perceived as a
    powerful retention tool. Airmen say that the reduced retirement plan
    adopted by Congress in 1986 is having the opposite effect. The reduced
    program is widely viewed as inadequate and has become an oft-cited
    reason not to remain in uniform for an entire career. The Air Force
    strongly supports the President's proposal to return the 20-year
    retirement to 50 percent of base pay.
        Airmen also report that chief among their QoL concerns is fair and
    competitive compensation. Military pay has not kept pace with the
    civilian economy. The Air Force enthusiastically supports the
    improvements to military pay proposed in the fiscal year 2000
    President's Budget, including both overall pay increases and the pay
    table restructuring that rewards promotion over longevity. Further, the
    Service is committed to ensuring the value of compensation keeps pace
    with inflation and wage growth in the private sector.
        Housing, for both single members and families, continues to be an
    important Air Force concern, especially given the increase in the real
    property maintenance backlog driven by fiscal constraints. Air Force
    commitment to the new DOD 1+1 dormitory standard, where airmen share a
    kitchen and bath, but have a room of their own, is a visible and
    popular QoL improvement for our junior enlisted personnel. The Air
    Force is also addressing family housing concerns. The Air Force is
    committed to reducing out-of-pocket housing expenditures for those
    members living in the civilian community, and to revitalizing over
    61,000 aging, on-base homes. Where feasible, privatization offers one
    way to update base housing quickly and affordably. At Lackland AFB in
    Texas, private funds are being used to replace 272 housing units and
    construct 148 new units on base. With such positive results, the Air
    Force is studying nine additional housing privatization projects, with
    more to come.
        Quality health care is fundamentally a readiness issue that affects
    every Air Force member. Airmen must be physically able to meet the
    challenges of expeditionary warfare and they cannot be distracted by
    worries about their families' health care when they are deployed. To
    deliver timely, reliable, cost efficient health care, the Air Force is
    re-sizing facilities for community needs, promoting healthy lifestyles,
    and employing managed care via the TRICARE program. The Air Force
    operates 48 of the DOD's 115 hospitals and 30 of its 471 clinics. Air
    Force hospitals and clinics are top-notch, meeting the same high
    standards as their civilian counterparts. Health and wellness programs
    offer a range of nutrition and exercise options aimed at keeping airmen
    healthy, rather than treating them after they become ill.
        With the last three regions coming on line in June of last year,
    DOD fully deployed TRICARE, the military form of managed care. TRICARE
    is a significant change in military health care and its implementation
    has had its share of growing pains. Surveys show that confidence in the
    system improves as the program matures. At the direction of Air Force
    senior leadership, the Inspector General is conducting a focused
    management review, known as an EAGLE LOOK. This EAGLE LOOK will review
    available data and current policies to assess active duty and family
    member satisfaction with TRICARE. It will recommend courses of action
    in order to improve airmen's satisfaction level with the system.
        Meanwhile, the Air Force supports alternative efforts to deliver
    affordable healthcare to its retired members. The DOD's Medicare
    Subvention Demonstration Project, TRICARE Senior Prime, began testing
    this year at a number of Air Force medical treatment facilities. With
    Subvention, Medicare is permitted to reimburse select facilities for
    care they give to Medicare-eligible beneficiaries. The Air Force is
    also participating in the congressionally sponsored demonstrations of
    the Federal Employees Health Benefits Program and expansion of the
    National Mail Order Pharmacy Program. If successful, these initiatives
    will deliver improved health care to those who served so commendably
    during another era. The current active-duty and reserve force is
    watching how we treat our retirees. We must do the right thing.
        The Air Force manages tempo as a QoL initiative, seeking to limit
    an individual's time away from home station to a maximum of 120 days
    per year. To do this and still meet operational needs, the Air Force
    reduced its exercise and inspection schedules, increased reliance on
    its Reserve Component, and reduced the typical length of an aircrew
    deployment from 90 to 45 days. The EAF concept reinforces this
    initiative by spreading deployments more evenly among operational
    units, increasing the size of deploying career fields, and providing
    more predictable deployment periods.
        Community and family programs knit our people together at home and
    provide for families while airmen are deployed. Through Air Force-
    sponsored family support, childcare and youth centers, commissaries and
    military exchanges, and morale, welfare, and recreation programs, the
    Air Force demonstrates commitment to its airmen and their families. The
    Air Force has also created a new position at each base, the Family
    Readiness Non-Commissioned Officer, to provide a single-point
    information and referral source for families of deployed airmen.
        For the Air Force, education has always been the gateway to the
    future. Through the Community College of the Air Force, active duty
    airmen can combine college credits and Air Force-related education and
    experience to earn an Associate Degree in Applied Science.
    Additionally, the Air Force tuition assistance program pays up to 75
    percent of tuition costs at accredited colleges and universities, many
    of which offer classes on base. The Air Force civilian tuition program
    answers a similar need for our non-uniformed employees. Taken together,
    Air Force educational programs constitute a meaningful, motivational,
    and highly valued QoL benefit.
    Training
        The highly technical Air Force will always need top-notch, well-
    trained, and highly motivated airmen. To ensure that basic training
    produces the world's finest professional airmen, consistent with the
    recommendations of the Kassebaum-Baker Panel, the Air Force made
    several improvements this year. The Service strengthened the basic
    military training (BMT) physical fitness regime and added a field
    training exercise to better prepare airmen for expeditionary
    operations. The Air Force also added additional military training
    instructor positions to reduce the trainee/trainer ratio. Through
    incentives, such as increasing special-duty pay and uniform clothing
    allowances, a new ribbon, and granting follow-on assignment
    preferences, the Air Force will continue to attract the best Military
    Training Instructors.
        The Air Force strongly supports gender integrated military
    training. This judgement is, in part, based on 25 years of highly
    successful experience in this training environment. Air Force training
    is firmly linked to our combat mission--a mission that requires men and
    women to work together as a team. The aerospace team depends on
    professional relationships at all levels and among all peoples. These
    relationships are best cultivated from the first day of military
    training, rather than delayed until airmen reach operational units.
    Importantly, throughout BMT, trainee safety and security are paramount.
    Accordingly, gender-separated living areas in dormitories are secured
    and monitored twenty-four hours a day, seven days a week.
        The Air Force is improving leadership training with the
    introduction of the Aerospace Basic Course (ABC). Officers and
    civilians attend the ABC shortly after beginning their Air Force
    careers. This course is designed to better prepare company-grade
    officers and select civilians for the future. It provides a foundation
    in the profession of arms and a working knowledge of the unique
    contributions of aerospace power. Through this entry-level professional
    military education program, Air Force lieutenants and key civilian
    interns gain a deep appreciation of Air Force values, history,
    doctrine, and the skills required to operate and fight from austere,
    forward bases, as well as to fully exploit the medium of aerospace for
    the joint force.
        Training warrior-leaders begins with the Aerospace Basic Course and
    extends throughout each officer's career. The Service develops its
    leaders deliberately, using a proven process that exposes them to Air
    Force and joint operations, Professional Military Education (PME), and
    increasing command and staff responsibilities. The depth of an airman's
    expertise is developed through a series of operational assignments that
    make him or her an aerospace power authority. Having always placed a
    premium on education, for both officers and enlisted members, the
    Service's PME system prepares its leaders for the challenges they will
    face in their immediate future. As airmen progress through their
    careers, the Air Force competitively selects the very best to command
    its squadrons, groups, and wings. The Service relies on a comprehensive
    series of additional leadership and command courses to supplement
    continuous mentoring in order to produce commanders who are able to
    make the right call, whether in peace or war. Leadership and command
    have always been an Air Force strength, one it will continue to rely on
    in the 21st century where commanders must quickly, and confidently,
    make life and death decisions.
        The Air Force prepares its airmen for specific operational duties
    through advanced training programs. The Air Force is aggressively
    expanding and updating one of these, specialized undergraduate pilot
    training (SUPT). To address its growing pilot shortage, the Air Force
    is expanding its annual pilot production from a low of approximately
    500 active duty graduates per year in the early nineties, to 1,100 per
    year in fiscal year 2000.
        The Air Force has also made several training force changes that
    improve SUPT, while permitting more efficient use of resources. The Air
    Force is consolidating its ``Introduction to Fighter Fundamentals''
    training and increasing the size of its primary flying training force
    structure. In 1998, the Air Force developed an enhanced training
    syllabus for advanced bomber training. It features the T-1 aircraft
    instead of the T-38 and focuses on developing crucial crew coordination
    skills. Placing greater reliance on the T-1 for bomber training, allows
    the Air Force to dedicate more of its T-38 fleet to fighter training.
        The Air Force is also pursuing new ways to train its operational
    aircrews. Distributed Mission Training (DMT) is an area that holds
    great promise. Using state-of-the-art simulation technology, DMT
    permits aircrews to train in synthetic battlespace, connected
    electronically to other aircrews at distant air bases. Importantly, DMT
    delivers this enhanced training from the home station, helping the Air
    Force limit the amount of time airmen spend deployed and will
    facilitate the training of AEF's as they prepare for deployment.
        Air Force civilians are an integral part of the aerospace team. To
    prepare them for the 21st Century, the Air Force overhauled its
    civilian development program and increased opportunities for
    professional development. The goal is to produce technically proficient
    civilians who are well versed in Air Force missions, structures, and
    doctrine.
    Equipment--Sustaining an Aging Fleet
        The Air Force's weapons systems are older than ever before. In
    1999, the average age of our aircraft will be 20 years and despite
    current modernization plans it will increase to 30 years in 2015. Many
    weapon systems already have exceeded their initial estimated service
    lives. Fatigue, corrosion, and parts obsolescence progressively are
    driving up the costs of maintaining these older aircraft and systems.
    For example, an older model F-15, nearing its third decade of service
    life, costs 37 percent more to maintain than newer models. For the Air
    Force to stay ready, and to keep readiness affordable, it must replace
    weapon systems that are beyond their useful lives and revitalize those
    that are still viable.
        Faced with competing needs--to both operate and modernize in a
    budget-constrained environment--the Air Force has been forced to make
    difficult choices. Over the past few years, the costs for spares and
    depot repairs have continued to outstrip funding. As a result, the rate
    at which we must use our aircraft as a source for spare parts to keep
    the rest of the fleet flying--the cannibalization rate--has increased
    78 percent since 1995. Additionally, mission capable rates have dropped
    by nearly ten percent since 1991, with a two percent drop in fiscal
    year 1998 alone. These indicators point to significant readiness
    challenges now, and in the future. In order to address these trends,
    the Air Force greatly increased spending on spares and repairs for
    fiscal year 1998 and fiscal year 1999. The fiscal year 2000 President's
    Budget adds additional funds to these accounts. The Service believes
    these increases will arrest the decline in mission capable rates. In
    the long term, this remains an area of concern given the increasing
    costs associated with an aging fleet.
    Infrastructure
        In the past decade, manpower and force structure reductions have
    outpaced infrastructure cuts. As a result, the Air Force is spending
    scarce resources on unneeded facilities and spreading its airmen too
    thin. The need to fund higher priority programs has caused the Air
    Force to under-invest in base operating support, communications
    support, real property maintenance, family housing, and military
    construction. To enhance readiness, the Service must be allowed to
    right size its infrastructure so that it matches strategy and force
    structure.
        Key parts of Air Force infrastructure are range complexes. Test and
    training ranges are crucial to readiness and in many cases a national
    asset. The Service is working collaboratively with the Department of
    the Interior to renew the legislative withdrawal of public lands that
    comprise several of its ranges, especially the Barry M. Goldwater Range
    in Arizona and the Nellis Range in Nevada. Additionally, in 1998 the
    Air Force completed an agreement with the commercial space launch
    industry that optimizes use of its unique space launch ranges.
    Readiness
        The Air Force can support the National Security Strategy today, but
    to do so in the future at an acceptable level of risk, requires
    increased funding. To arrest the readiness decline, the Service needs
    additional funding to resolve shortfalls in programs that affect its
    airmen and its equipment. The Air Force believes improvements in the
    retirement system and military pay, proposed in the fiscal year 2000
    President's Budget, will aid retention, and therefore readiness. The
    EAF concept, introduced in 1998, will enhance the Service's ability to
    conduct sustained expeditionary operations and reduce the impact of the
    tempo they require of airmen. Additionally, the fiscal year 2000
    President's Budget proposes additional funding for spares and repairs
    that are intended to affect cannibalization and mission capable rates.
    In the longer-term however, the Service must modernize and upgrade its
    weapon systems to keep its aging fleet sustainable at an affordable
    cost.
                        modernization--future readiness
        ``In the development of air power, one has to look ahead and not
    backward and figure out what is going to happen, not too much what has
    happened.''--Brig Gen Billy Mitchell
        The Expeditionary Aerospace Force will respond rapidly and globally
    to deliver decisive combat power or life-saving humanitarian relief.
    Expeditionary operations require a force that is light, lean, and
    lethal. This force is quick to deploy, easy to sustain, and powerful
    for its size. Air Force modernization efforts focus on developing and
    fielding systems that enhance the Service's expeditionary capabilities.
        The Air Force is both procuring revolutionary new weapons systems
    and revitalizing existing equipment that is still viable. In some
    cases, a fielded, proven weapon system may be upgraded for enhanced
    capability, survivability, or reliability and maintainability. In
    others, the best decision is to procure new. The choice turns on
    whether current capabilities can affordably meet and defeat anticipated
    threats within acceptable levels of risk. The C-5 modification program
    is an example of a successful upgrade strategy. The Air Force's plan to
    update the Galaxy's engines and avionics will keep this unique
    airlifter viable well into the next century at minimum cost to the
    nation. The F-22 program demonstrates the imperative to procure new
    weapons systems. The leap-ahead capabilities of the Raptor will enable
    it to win aerospace superiority in tomorrow's skies--the key to
    successful joint operations--against advanced threats, affordably. In
    all cases, modernization supports the Air Force core competencies and
    enhances the aerospace power that the Air Force delivers to joint force
    commanders. The fiscal year 2000 President's Budget provides funds to
    maintain key modernization programs like the F-22, C-17, and Evolved
    Expendable Launch Vehicle, and will address shortfalls in combat
    aircraft force structure. At the same time, while this budget maintains
    key modernization programs, it does so at slower than optimal rates.
                             aerospace superiority
        ``Once real mastery of the air was obtained, all sorts of
    enterprises would become easy.''--Winston Churchill
        Joint Vision 2010, the Chairman of the Joint Chiefs of Staff
    blueprint for the future, envisions the U.S. military dominating all
    aspects of a conflict--Full Spectrum Dominance. The history of modern
    warfare tells us that to dominate the battlefield, on land or at sea, a
    military must first control the high ground--aerospace. Aerospace
    superiority is the pivot point for every U.S. joint operation. By
    winning aerospace superiority, the Air Force gives every member of the
    joint team the ability to operate free from attack and free to attack.
    Air Force modernization includes a comprehensive and complementary plan
    that will give the nation the ability to control the vertical dimension
    well into the 21st century.
        The Air Force's highest aerospace superiority priority, and its
    most pressing modernization need, is the F-22 Raptor. The F-22,
    replacing the aging F-15 Eagle, gives the nation the technology edge
    that it has come to depend upon. Blending stealth, speed, and
    integrated avionics, the F-22 brings an unmatched capability to the
    battlespace. In the hands of Air Force aviators, the F-22 will dominate
    the aerial arena of the 21st century.
        The Raptor proved itself with extensive flight tests last year;
    demonstrating airworthiness throughout a large portion of the flight
    envelope, and meeting all requirements to enter limited rate
    production. The F-22 will begin operational service in 2005. Funding
    stability is critical.
        The weapons for the F-22 and current aerospace superiority fighters
    are the AIM-120 Advanced Medium-Range Air-to-Air Missile (AMRAAM) and
    the Air Intercept Missile (AIM-9X). The AMRAAM, the world's best air-
    to-air missile, is undergoing an upgrade to improve its range, ability
    to counter electronic threats, and warhead effectiveness. Similarly,
    the AIM-9X will regain dominance over other comparable infrared
    missiles in foreign inventories.
        The Airborne Laser (ABL) will add an important capability to
    aerospace superiority. Presently in development and moving toward a
    lethality demonstration in 2003, the ABL brings several revolutionary
    technologies together to form a formidable theater missile defense
    capability. The ABL will merge state-of-the-art optics and tracking
    technologies to identify, track, shoot, and destroy enemy theater
    ballistic missiles during their initial ascent, long before they place
    American or allied troops at risk. ABL's long range sensors and laser
    tracking systems also will enhance the performance of land- and sea-
    based theater missile defense systems with precise cueing of their
    radars; they also increase attack options by transmitting launch points
    to C\2\ nodes. Last year, the Air Force successfully tested the ABL's
    flight-weighted laser module, demonstrating the ability of the laser to
    produce 110 percent of its required power output. Importantly, the ABL
    is a critical technology waypoint along the development path of the
    complementary Space-Based Laser. The ABL program is being restructured
    to reflect a 10-12 month delay due to congressional actions that reduce
    funding and direct additional risk reduction tasks.
        The Space-Based Laser (SBL) Program is the result of an Air Force
    partnership with the Ballistic Missile Defense Office (BMDO). SBL could
    provide theater missile defense and defense against intercontinental
    missiles launched at the United States. Advancing the potential of SBL
    is part of the Air Force's charter as the nation's military space arm;
    the Service will do so consistent with international treaties and
    national policy.
        Space-based assets play critical roles in aerospace superiority.
    With the Space-Based Infrared System (SBIRS), the Air Force is
    developing two constellations of satellites that provide improved
    detection and warning of strategic and theater missile launches. SBIRS
    also will cue ABL, SBL, and all other missile defense systems allowing
    them to destroy weapons before they can threaten deployed troops or the
    U.S. homeland. The Air Force is scheduled to launch the first SBIRS
    High satellite in fiscal year 2004; the first SBIRS Low satellite in
    fiscal year 2006.
        To operate in space, the Air Force must have reliable and cost
    effective launch vehicles. The Evolved Expendable Launch Vehicle (EELV)
    delivers this capability. The EELV program teams with industry to
    develop a launch vehicle meeting military, civil, and commercial
    requirements with little or no modification. This dual-use procurement
    strategy ensures that military spacelift requirements are met while
    stimulating the nation's commercial launch industry.
                                 global attack
        ``Airpower has become predominant, both as a deterrent to war,
    and--in the eventuality of war--as the devastating force to destroy an
    enemy's potential and fatally undermine his will to wage war.''--Gen
    Omar Bradley
        Central to U.S. warfighting strategy is the ability to rapidly
    defeat aggression. Halting operations prevent aggressors from reaching
    their objectives and create the conditions for a successful counter-
    offensive should it be deemed necessary. To quickly halt enemy forces,
    the U.S. must maintain the ability to project power rapidly, precisely,
    and globally--a job tailor-made for the Expeditionary Aerospace Force
    and the global attack assets that it contains. Air Force bombers can
    deliver decisive combat power from either the continental United States
    or in-theater bases. The responsiveness and overwhelming firepower of
    long-range aircraft greatly increase the options available to regional
    Commanders-in-Chief.
        The B-2 Spirit is the Air Force's newest multi-role heavy bomber
    capable of delivering both conventional and nuclear munitions. The
    Spirit's low-observable characteristics paired with its inter-
    continental range give it the ability to penetrate an enemy's most
    sophisticated defenses and hold his highest valued targets at risk.
    Last year, the B-2 demonstrated the ability to attack buried hard
    targets, such as bunkers, by delivering sequential penetrating bombs
    separated by less than one second. The Air Force continues to enhance
    the Spirit's low observable coatings and to integrate additional
    advanced weapons.
        The B-1 Lancer is the Air Force's primary long-range conventional
    bomber. The Lancer proved its mettle during Operation Desert Fox, when
    it destroyed Iraqi military barracks with its heavy bomb load. Once
    primarily a nuclear bomber, the B-1 is in the midst of a Conventional
    Mission Upgrade Program (CMUP). CMUP, a phased upgrade, will give the
    B-1 the ability to deliver a wide range of precision weapons and update
    its defensive systems, allowing it to counter evolving threats. The Air
    Force took delivery of the first four B-1's modified in the initial
    phase, Block D, in 1998; Block D upgrades will be complete in fiscal
    year 2001. Follow-on phases, Blocks E and F, should be completed by
    fiscal year 2009.
        Although most of the airframes are 40 years old, the B-52 continues
    to be a workhorse of the long-range bomber fleet. The Stratofortress
    and its AGM-86C Conventional Air Launched Cruise Missiles (CALCM) form
    a powerful team--a team that destroyed high-value targets in heavily
    defended portions of Iraq during Operation Desert Fox. The B-52 can
    also deliver a wide range of precision weapons. Upgrades to its
    communication and navigation systems will keep the B-52 viable well
    into the 21st century.
        Air Force modernization both procures new weapons systems and
    revitalizes existing ones. Pursuing this strategy enables the Service
    to deliver aerospace power in the presence of advanced threats in a
    cost-effective manner. The Air Force's roadmap for long-range aviation
    is a good example of this process at work. With this plan the Service
    is modifying its bombers, improving their effectiveness, at a fraction
    of the cost of procuring new aircraft.
                              precision engagement
        ``Battle should no longer resemble a bludgeon fight, but should be
    a test of skill, a maneuver combat, in which is fulfilled the great
    principal of surprise by striking from an unexpected direction against
    an unguarded spot.''--Captain Sir Basil Liddell Hart
        The ability to achieve the precise physical and psychological
    effects that win wars and compel adversaries are an Air Force strength.
    The Service's precision engagement core competency integrates Air Force
    capabilities to give it the ability to locate and accurately attack
    targets with reduced risk of collateral damage. This capability allows
    the Air Force to achieve desired effects faster, with fewer sorties and
    weapons. By giving the Air Force the ability to destroy more targets
    with fewer resources, precision engagement makes the Service lighter,
    leaner, and more lethal--a hallmark of the Expeditionary Aerospace
    Force. Because precision engagement is crucial to U.S. joint
    operations, the Air Force's modernization is guided by a comprehensive
    plan to ensure that the Service will be able to locate, attack, and
    assess damage to the targets that will decide the conflicts of the next
    century.
        Virtually every Air Force fighter and bomber is able to deliver
    precision weapons. Among this group of weapons systems is the F-16
    Falcon, the Service's primary offensive fighter aircraft. This year,
    the Air Force decided to procure additional F-16's in order to enhance
    its ability to suppress surface-to-air threats and maintain the current
    size of Air National Guard units that fly the Falcon. The F-16 is a
    highly capable fighter, however, like the A-10 Thunderbolt II, it is
    aging. The world is developing weapons that threaten the technological
    edge of both these aircraft, and they are increasingly costly to
    maintain. To counter these trends, the Service is making reliability
    and maintainability modifications and acquiring the Joint Strike
    Fighter (JSF) to replace both aircraft. Combining stealth and high
    performance in an affordable multi-role fighter, the JSF will
    complement the Air Force F-22 aerospace superiority fighter, giving the
    nation the one-two punch that will dominate aerospace well into the
    next century.
        The centerpiece of the Air Force's precision engagement capability
    is its family of precision weapons. The best known precision weapon is
    the Joint Direct Attack Munition (JDAM), currently in production. The
    JDAM gives the joint force commander an all weather, low cost, accurate
    weapon by adding Global Positioning System (GPS) and inertial
    navigation capability to existing bombs. The JDAM will arm the F-16, F-
    15E, B-1, B-2, B-52, and the JSF. JDAM low rate initial production
    began in fiscal year 1997 with the first weapons delivered in fiscal
    year 1998.
        Precision engagement weapons also include the Wind Corrected
    Munitions Dispenser (WCMD) and the Joint Stand-Off Weapon (JSOW). The
    WCMD adds a guidance tail kit to existing weapons to make them highly
    accurate. WCMD corrects for wind effects that degrade the accuracy of
    free-fall weapons, improving the Air Force's ability to deliver
    existing munitions with great accuracy from medium and high altitude.
    The JSOW is a near-precision, all-weather, standoff munition. These two
    weapons use advanced systems to guide them to a target area, where they
    then dispense smaller bomblets to destroy tanks, trucks, air defense,
    and command and control systems.
        The Joint Air-to-Surface Standoff Missile (JASSM), currently in
    development, will provide a precise, low-observable cruise missile for
    Air Force aircraft. This missile will be launched from both fighter and
    bomber aircraft, and will be stealthy enough to penetrate the most
    heavily defended targets. JASSM, procured at a fraction of the cost of
    current standoff missiles, will enter the inventory in fiscal year
    2002.
                             rapid global mobility
        ``Strategic mobility allows the United States to be first on the
    scene with assistance in many national or international crises and is
    key to successful American leadership and engagement.''--President
    Clinton, 1998 National Security Strategy
        Rapid global mobility is the key to responding with the right
    force, at the right time, in the right place. Airlift and air refueling
    forces provide tremendous flexibility in deploying, employing, and
    sustaining America's military forces allowing them to rapidly arrive in
    the theater. Studies have consistently cited a shortage of strategic
    airlift, relative to the two major theater war scenario.
        The Air Force showed the versatility of its global mobility fleet
    last year when it reacted to the devastation in Central America caused
    by Hurricane Mitch. The Air Force built an air bridge between the U.S.
    and the region, rapidly moving food and medical supplies to those in
    need. By February 1999, the Service will have delivered 10 million
    pounds of donated cargo to Central America. This relief effort is a
    tribute to the Total Force with the bulk of the airlift missions being
    flown by the Air Reserve Component under the Denton Amendment.
        For the past generation, inter-theater global mobility has rested
    on the shoulders of the C-141 Starlifter and C-5 Galaxy, while intra-
    theater lift was accomplished by the C-130 Hercules. As requirements
    change and operating costs of these aircraft increase, the Air Force is
    replacing and refurbishing them.
        The C-17 Globemaster III, fast becoming the superstar of global
    mobility, is a little over one third through its production run. The
    Air Force's innovative C-17 multi-year procurement strategy is an
    unqualified success. Aircraft deliveries are ahead of schedule and on
    cost. This year, the Air Force decided to purchase additional
    Globemaster III's, allowing it to better support special operations and
    strategic lift requirements. The C-17's ability to directly deliver
    out-sized and over-sized cargo from anywhere in the world to austere,
    forward airfields makes it a key strategic asset. As the C-17 fleet
    reaches maturity, the C-141 will be retired, with the last Starlifter
    projected to leave the inventory in 2006.
        The C-5 fleet is a national asset, comprising 45 percent of the
    military's organic strategic airlift capability. The C-5, first flown
    in 1968, will continue to be a central platform for strategic airlift.
    The Galaxy is showing its age in unacceptably low mission capable
    rates. The Air Force will begin to update the Galaxy's avionics in 1999
    and has programmed funds to replace engines and other major subsystems
    starting in fiscal year 2000. These upgrades will result in the
    delivery of a refurbished C-5 in 2004.
        The C-130 fleet, with many aircraft approaching 40 years old, is
    being refitted with new avionics and electronics subsystems to carry
    them into the new millennium. This upgrade will consolidate several
    different variants into a single, more sustainable configuration. The
    Air Force is exploring the best way to replace 150 of the oldest C-
    130's with the new model C-130J. The C-130J will enter the inventory in
    1999.
        The Service is also updating its air refueling fleet. The Pacer
    CRAG upgrade, a reliability and maintainability modification, was
    completed on the first KC-135 Stratotanker in 1998; the fleet will be
    complete in fiscal year 2002. This program will significantly reduce
    the cost of operating the Stratotanker. Both the KC-135 and KC-10 will
    be modified with the Global Air Traffic Management (GATM) system,
    enabling these aircraft to operate in increasingly busy skies under new
    international mandates.
        Modifications give these aircraft the future ability to operate in
    prime, high-density civilian airspace and improve safety. They are
    critical to extending the life of the global mobility fleet. Safety
    modifications include the Terrain Awareness and Warning System (TAWS)
    and Traffic Collision Avoidance System (TCAS) that help protect
    aircraft from collision. This year, the Air Force accelerated
    installation of TAWS and TCAS on several of its aircraft, making them
    safer.
                            information superiority
        ``In order to conquer that unknown which follows us until the very
    point of going into action, there is only one means, which consists in
    looking out until the last moment, even on the battlefield, for
    information.''--Marshal of France Ferdinand Foch
        Information superiority--the ability to collect, control, exploit,
    and defend information, while denying the adversary the same--is
    critical to success in all military operations. Controlling information
    has become a necessary precondition for success in combat, and is the
    objective of the Air Force's information superiority modernization
    efforts.
        The Air Force manages command and control (C\2\) as a weapons
    system and is committed to fielding state-of-the-art C\2\ equipment and
    operational concepts. The Aerospace Command and Control, Intelligence,
    Surveillance, and Reconnaissance Center was created in 1998 to develop
    and implement standard Air Force C\2\ and ISR programs across the
    Service that ensure joint operability. This Center, together with the
    Air Force Communications and Information Center and the NRO, is rapidly
    moving toward advanced capabilities that will allow commanders to make
    decisions inside an adversary's operating cycle and use information to
    its fullest effect.
        Airborne information superiority assets are a key component of
    theater command and control. The E-3 Airborne Warning and Control
    System (AWACS), a mainstay for airborne situational awareness, is being
    upgraded with an improved radar and avionics. The E-8 Joint
    Surveillance Target Attack Radar System (JSTARS) provides theater
    commanders real-time, wide-area surveillance of enemy ground movements.
    JSTARS demonstrated crucial capabilities in combat and is proving
    itself invaluable supporting contingency operations. The fourth JSTARS
    aircraft was delivered last year, and ten additional JSTARS are
    currently planned, or in production.
        During 1998, the RC-135 RIVET JOINT remained in high demand,
    providing accurate, timely tactical signals intelligence to a broad
    range of users in the Balkans and Southwest Asia. RIVET JOINT marked a
    noteworthy anniversary during October of last year, when it passed its
    3,000th consecutive day deployed to SWA--a testament to the critical
    intelligence this platform collects and the dedication of the airmen
    who operate and sustain it. Two additional RIVET JOINT aircraft will be
    added to the fleet in 1999, helping to alleviate this system's high
    operations tempo.
        Air Force provided satellite communications have been a cornerstone
    of joint military communications (MILSATCOM) for years. Air Force
    MILSATCOM provides critical support, command and control, and
    infrastructure connectivity for joint forces worldwide. Milstar and
    Polar MILSATCOM provides robust protection and Global Broadcast Service
    (GBS) provides efficient dissemination of large volumes of information
    including imagery and video. In the future, systems such as Advanced
    EHF and Wideband MILSATCOM will replenish the Milstar, DSCS and GBS
    constellations.
        Effective C\2\, depends in large measure, on the ability to
    accurately identify all of the hostile, friendly, and neutral entities
    in the battlespace. This is known as Combat Identification (CID). The
    Air Force Research Laboratory is leading the way in CID technology.
    This year, the Lab began a project that seeks to develop a small, low-
    cost device that will identify U.S. or allied troops and vehicles as
    ``friendly'' when interrogated by airborne radar. This will greatly
    reduce the risk of fratricide.
        Unmanned Aerial Vehicles (UAV's) complement the Air Force's manned
    aircraft to build a complete picture of the battlespace for joint force
    commanders. Air Force UAV's include the operational Predator and two
    Advanced Concept Technology Demonstration (ACTD) High Altitude
    Endurance (HAE) systems; Global Hawk and Dark Star. Predator recently
    returned from its third operational deployment to the Balkans, where it
    provided valuable imagery to United Nations forces. If any elements of
    the HAE UAV ACTD prove militarily useful, the residual assets could be
    used while the Service evolves the technology. The goal is to provide
    the joint force commander long-dwell imagery intelligence collection
    capabilities.
                              agile combat support
        ``Logistics controls all campaigns and limits many.''--Gen Dwight
    Eisenhower
        The success of the Expeditionary Aerospace Force ultimately will
    rest on the Air Force's ability to sustain it. Agile Combat Support
    (ACS) provides commanders improved responsiveness, mobility, and
    sustainability of their forces. ACS is accomplished by substituting
    rapid resupply for large deployed inventories, and by acquiring new or
    improved weapons systems that are more reliable and have smaller
    mobility footprints.
        Information technologies, such as the Global Combat Support System,
    featuring both new leading edge capabilities and technical refreshment
    of existing systems, are key to ACS. When combatant commanders require
    an item, integrated information systems will ``reach back'' to U.S.
    locations and ``pull'' the resources required. Streamlined depot
    processes will release materiel in a timely fashion so that time-
    definite transportation can complete the support cycle by rapidly
    delivering needed resources directly to the user in the field.
    Integrated information systems currently being tested provide total
    asset visibility throughout this process, tracking resources throughout
    their delivery cycle. Air Force mobility assets equipped with this
    technology can be tracked in near-real time through Combat Track.
    Commercial aircraft tracking systems will be integrated into the Global
    Command and Control System giving field commanders visibility into
    contract shipments.
                          enhancing future operations
    Air Force Battlelabs
        ``Victory smiles upon those who anticipate the changes in the
    character of war, not upon those who wait to adapt themselves after the
    changes occur.''--Gulio Douhet
        In 1997, the Air Force established six Battlelabs to identify and
    validate innovative ideas that improve execution of the Air Force
    mission. The six Battlelabs--Aerospace Expeditionary Force, Command and
    Control, Force Protection, Information Warfare, Space, and Unmanned
    Aerial Vehicle--are paying big dividends. Battlelab success stories
    include the Air Tasking Order (ATO) Visualization and Assessment Tool
    designed to streamline ATO preparation, Improved Information Reachback,
    which will lessen forward footprint, and the Enroute Operations Center
    allowing aerospace commanders to control operations enroute to the
    theater. Each of these markedly enhanced joint operations by placing
    new and cost-effective capabilities into the hands of combatant
    commanders.
    Expeditionary Force Experiment
        The 1998 Expeditionary Force Experiment (EFX 98) was the first in a
    planned series of experiments designed to explore new operational
    concepts and advanced technologies. EFX 98 concentrated on better ways
    to command and control the air component during expeditionary
    operations. It explored dividing aerospace command and control
    functions between rear area support centers and an in-theater Air
    Operations Center (AOC), reducing the personnel and logistics
    requirements in the forward area. EFX 98 illustrated the ability to
    command and control en route aerospace forces from both ground and air.
    It also tested the spiral development of software systems that are
    critical to the future AOC. By working side-by-side during EFX 98,
    software programmers and operators proved that spiral development
    reduces the cost and time required to develop and deploy new systems.
    Wargaming
        Wargames are valuable tools for exploring new or innovative ways to
    employ military forces. The Air Force conducts two major wargames each
    year that focus on force employment concepts and long-range planning.
    The first, the Global Engagement series, investigates operational
    issues eight years into the future. The second, the Aerospace Future
    Capabilities series, focuses on capability issues 20 years into the
    future.
        Global Engagement wargames improve the understanding of the
    contributions aerospace power makes to the joint force. A key aspect of
    Global Engagement 98 was the rapid deployment and sustainment of
    multiple Aerospace Expeditionary Forces that included Air Reserve
    Component elements. The game demonstrated the use of aerospace power as
    a potent maneuver force for the joint force commander.
        The Aerospace Future Capabilities Wargames evaluate strengths and
    weaknesses of capabilities contemplated by the Air Force's Vision and
    Strategic Plan. They also test alternative force structures in future
    warfighting environments. During the 1998 game, the Air Force gained
    valuable insights into the opportunities provided by--and challenges
    associated with--standoff warfare in an anti-access environment.
                          enhancing business practices
    Defense Reform Initiative
        The Defense Reform Initiative (DRI) is an effort to improve the way
    DOD works. Last year the Air Force implemented 45 DRI Directives,
    pushing costs down and quality up. The City-Base Reinvention Laboratory
    at Brooks AFB in Texas is one example. At Brooks, the Air Force is
    developing a proposal to transfer the base's infrastructure to the City
    of San Antonio. It will then lease back only the facilities it needs.
    San Antonio benefits by gaining facilities it can use to spur
    development while retaining the Brooks mission; the Air Force benefits
    by eliminating unneeded base infrastructure; and, the community
    benefits by keeping its long-standing ties to the Air Force. Additional
    infrastructure initiatives, such as housing and utilities
    privatization, show great promise. The highly successful housing
    privatization effort at Lackland AFB, Texas is replacing 272 housing
    units and building 148 new units on base.
        Competitive sourcing is another DRI success story. During 1998, the
    Air Force fully executed its plan for announcement of OMB Circular A-76
    studies. The Air Force is conducting a top-to-bottom review of its
    manpower authorizations, with an eye toward identifying additional
    positions to compete. Recent competitive sourcing and privatization
    efforts have yielded 35 percent manpower cost savings, demonstrating
    that this is a promising area for business reform.
    Air Force Management Reform
        In 1998, the Air Force established its Management Reform Office,
    reporting to the Under Secretary of the Air Force and the Vice Chief of
    Staff. This office will help implement the Defense Reform Initiative
    and internally generated opportunities to make certain that manpower
    and fiscal resources are focused on high-payoff activities. The Service
    continues to lead the DOD in the shift from paper-based to electronic
    contracting, and in expanding the use of the IMPAC card. In addition,
    the Air Force has challenged its major commands to expand use of
    activity-based costing and activity-based management. Reducing the
    total ownership cost of weapons systems is another area where the
    Service is showing how better business practices yield resources that
    can be applied to high priority needs.
        The Air Force continues to determine its military needs
    programmatically through a requirements based process linked to the
    National Military Strategy. The Service takes advantage of technology,
    modernization, and Total Force integration as well as aggressively
    pursuing opportunities to achieve best value in competing non-military
    essential support functions. Looking to the future, the Air Force will
    continue to size its forces to meet mission requirements, and fully
    resource them to ensure mission accomplishment. The Service must have
    the flexibility to set its required end strength levels consistent with
    evolving missions.
        In today's era of tight budgets, the Air Force is committed to
    reducing overhead functions and moving maximum capability to its combat
    units. The Service continues to aggressively scrutinize management
    headquarters levels to ensure that they are the absolute minimum to
    execute the operational mission. In fact, reductions in management
    headquarters have outpaced those of overall force structure since the
    draw down began in fiscal year 1987. Headquarters must be manned at
    levels that permit proper execution of evolving mission requirements.
    Improving Air Force Depots
        The Air Force also is improving depot maintenance by conducting
    competitions between public organizations and private firms for this
    work. The results, so far, have been encouraging. In the first
    competition, the Air Force awarded the C-5 Programmed Depot Maintenance
    workload to the Warner-Robins Air Logistics Center (ALC), saving the
    Air Force $190 million over the seven-year life of the contract. In a
    similar competition, Ogden ALC teaming with Boeing, won a nine year
    contract for repair of the A-10 and KC-135 aircraft, electrical
    accessories, hydraulics, and other commodities that will save the
    Service $638 million. A third public/private competition, for the
    engine workload at San Antonio ALC, will be completed in February 1999.
    Acquisition Reform
        Acquisition reform is another example of Air Force innovation.
    Lightning Bolt initiatives, the Air Force's initial program for
    improving acquisition, have saved taxpayers $30 billion. Building on
    this success, the Air Force introduced its follow-on concept for
    reform--the Air Force Acquisition and Sustainment Reinvention Process.
    This process capitalizes on proven industrial practices to deliver
    weapons systems faster and cheaper than traditional DOD acquisition
    practices.
        Using partnering, the Air Force is raising acquisition reform to a
    new level. Partnering allows the Air Force to sponsor programs with
    industry and other government agencies, sharing costs and the risks
    associated with developing new systems and concepts. The Evolved
    Expendable Launch Vehicle demonstrates this powerful concept. With
    EELV, the Air Force and two contractors are pooling resources to build
    two new families of space launchers, at a fraction of what the rockets
    would cost if developed independently. America wins all the way around
    with EELV: The Air Force gets the lift vehicles it needs; domestic
    industry improves its space launch competitiveness; and, the nation's
    space infrastructure is enhanced.
                           safeguarding key resources
    Preserving Warfighting Assets
        To maintain its combat edge, the Air Force must train realistically
    while preserving its airmen and weapons systems. This involves
    accepting and managing risk. During 1998, the combination of capable
    leadership, accountability, and Operational Risk Management (ORM) led
    to a ready force with the best safety record in Air Force history. From
    top to bottom Air Force leaders set high standards--they ensured that
    airmen knew how to accomplish the mission effectively and safely.
    Having communicated the mission, leaders hold their people accountable
    through regular inspections and evaluations. Because of strong
    leadership, Air Force units routinely conduct potentially dangerous
    aerospace missions effectively and safely. The Service helps its
    leaders manage operational risk with its proven ORM program, a
    decision-making tool that systematically identifies risks and benefits
    to help make operational and training decisions. It helps Air Force
    leaders enhance mission effectiveness by minimizing risks in order to
    reduce mishaps, preserve resources, and safeguard the health and
    welfare of our airmen.
    Financial Reform
        The Air Force, as a prudent steward of public funds, is working
    diligently to comply with the Chief Financial Officer (CFO) Act and the
    Government Performance and Results Act (GPRA). During the past year,
    the Service achieved relatively clean audit opinions of its military
    and civilian pay accounts. Additionally, the Air Force strengthened its
    internal controls and management oversight to help prevent fraud and
    improve confidence in its financial statements, while incorporating
    some GPRA output measures into its financial statements and long range
    plans. The Service is striving to help reach the President's goal of
    unqualified audit opinions on government financial statements. As it
    improves its financial systems to help achieve this goal, the Air Force
    will emphasize improvements that benefit the decision-making of
    commanders in the field.
    Environmental
        The Air Force recognizes the need to balance its readiness
    requirements with stewardship of the resources with which it has been
    entrusted. For example, the Service actively participates in
    collaborative processes that safeguard the natural and cultural
    resources on public lands withdrawn as training ranges. In virtually
    every case, government and private organizations credit the Air Force
    with preserving range environments that would otherwise have been
    diminished through human encroachment. Similar to its commitment to
    protect range lands, the Service promotes pollution prevention
    programs. Where past practices have disturbed the environment, the Air
    Force is now implementing clean-up programs.
    Promoting Equal Opportunity
        Dependability, trust, and teamwork are bedrock military values that
    directly affect readiness. Fair treatment and freedom from unlawful
    discrimination and harassment are essential to a professional work
    environment. To ensure we get the most from our people and maintain the
    highest levels of readiness, the Air Force promotes human dignity, a
    professional organizational culture, and cohesion among our military
    members and civilian employees through an active Equal Opportunity (EO)
    program.
        The Air Force EO program has military and civilian components. The
    Military Equal Opportunity (MEO) program and the civilian Equal
    Employment Opportunity (EEO) program give commanders, executives,
    managers, and supervisors tools to establish and advance a climate of
    respect and fairness for all Air Force personnel. Full-time MEO
    professionals provide unit climate assessments, conduct a full spectrum
    of human relations education and training, and investigate complaints
    to ensure Air Force workplaces are free from discrimination and
    harassment. The EEO program is equally effective. A variety of avenues
    are available to voice and resolve complaints of discrimination,
    harassment, or reprisal by members of the military and civilian work
    force.
        Through its EO programs, the Air Force has earned a reputation as
    an advocate for equal opportunity that allows it to attract the
    brightest and the best. Active duty racial minority representation has
    risen from 14 percent in 1975 to 24 percent today. Women now comprise
    18 percent of the military force--17 percent of the officer corps and
    18 percent of the enlisted troops. Women constitute 35 percent of the
    civilian force, while minorities represent 25 percent. The Air Force's
    goal is to promote a working environment that allows each employee--
    military and civilian--to realize his or her full potential.
                                   conclusion
        As the 20th century dawned, few imagined the impact that flight
    would have on military operations--as it closes, aerospace power has
    become the preeminent tool of the national command authority.
        The Air Force is postured to meet the nation's security needs and
    is actively confronting the challenges of today's dynamic environment.
    In 1999, the Service will reorganize its forces under the sweeping
    Expeditionary Aerospace Force (EAF) initiative. As a result, the Air
    Force will use its Total Force to deliver improved aerospace power--
    whether lethal firepower or humanitarian relief--wherever, and
    whenever, it is needed. EAF will also add stability and predictability
    to the lives of airmen, mitigating the effect of continued high
    operations tempo and improving retention. Improving retention is one of
    the keys to arresting the decline the Service is experiencing in
    readiness. To stay ready, the Air Force requires sustained funding
    increases in order to recruit, train, and retain its airmen; maintain
    its aging weapons systems; and modernize its forces to affordably face
    the future. As a careful steward of funds, the Service is harnessing
    the power of the Revolution in Business Affairs to improve efficiency
    through better operating practices. Composed of the world's finest
    airmen, the Air Force stands ready to meet the nation's security needs
    now, and in the 21st century.

        Senator Stevens. General Ryan.

                       STATEMENT OF GEN. MICHAEL E. RYAN

        General Ryan. Chairman Stevens, Senator Inouye and members
    of the committee, I appreciate the opportunity to discuss the
    posture of the United States Air Force.
        I recently returned from visiting our airmen in Southwest
    Asia. Our Air Force men and women are superbly executing their
    missions throughout that region and indeed worldwide. They are
    doing it under very dangerous demanding circumstances. And they
    deserve our staunchest support to retain their readiness edge.
        Unfortunately, we face tough challenges in halting our
    readiness decline today while continuing to modernize for our
    readiness tomorrow.
        I want to thank the Congress, and particularly this
    committee, for the rapid response to our readiness needs that
    we described last year. With your support, the increase in
    funding we received for readiness in 1999 and the proposed
    increase in funding in the fiscal year 2000 budget we have just
    submitted will certainly help to address some of our most
    immediate concerns.
        Today our Air Force is engaged around the globe despite the
    lowest active duty manpower level in our 51 years. We have
    95,000 airmen who are stationed or deployed overseas protecting
    our national interests in Korea, in combat operations over
    Iraq, in enforcement operations in Bosnia and reconnaissance
    missions worldwide, and in humanitarian airlift and engineering
    missions to Latin America, such as Hurricane Mitch. They are
    doing all that we ask of them, but readiness is very fragile.
    And the indicators are not good.
        With a progressively aging force of aircraft and under-
    funding readiness accounts, our people are working harder and
    harder to perform the assigned missions. We must end that
    downward readiness spiral by funding the needed spares, by
    rehabilitating our older but useful equipment, like our airlift
    and bomber forces, and by replacing systems that are
    approaching the end of their useful life, such as the F-15,
    with revolutionary capabilities, like the F-22.
        We must continue to provide our people with the best
    equipment and training to do the dangerous missions we ask them
    to undertake. Our airmen, without a doubt, are the most
    critical component of readiness. Their hard work has kept the
    Air Force readiness posture from not declining more rapidly.
    The Air Force requires motivated and professional, highly
    skilled and highly trained airmen to do its missions.
        We are absolutely committed to recruiting and retaining the
    highest caliber of people. But our recruiting challenges are
    becoming more difficult, and we are losing too many of our
    experienced people, both enlisted and officers. Indeed, our
    projections show that we may miss our annual recruiting goals
    this year for the first time since 1979.
        Last year I reported to this committee that pilot retention
    was a major concern. Today in the Air Force we are 1,000 pilots
    short of our requirement. The bonus provided by Congress last
    year helped. Plus the efforts that we have made to spread
    OPSTEMPO, provide downtime and better support our families of
    those who are deployed. Those are all aimed at affecting
    retention.
        The proposed budget for fiscal year 2000 should help the
    Air Force to arrest the decline in readiness and allow the
    force to age a little more gracefully. Unfortunately, the
    additional funding efforts are insufficient to allow the Air
    Force to adequately address much-needed readiness and
    infrastructure shortfalls, such as military family housing and
    base operating support.
        The infrastructure will continue to deteriorate, as well as
    long-term readiness, if we do not achieve increased and
    sustained funding. For our airmen, equitable pay and
    restoration of the retirement system and additional funding for
    readiness are so important. They are visible evidence of our
    nation's commitment to them for the tremendous sacrifices they
    make every day.
        This budget is a significant effort to help our recruitment
    and retention and arrest our readiness decline. And I
    appreciate very much the support we have received from Congress
    in focusing on our needs of our airmen in addressing our
    readiness requirements.
        I look forward to working with you as we tackle these tough
    challenges. Thank you for inviting me to speak on behalf of the
    dedicated men and women of the United States Air Force, who so
    proudly and selflessly serve for all of us. And I am prepared
    to take your questions, sir.
        Senator Stevens. Thank you very much, General and Mr.
    Secretary. I do commend each one of you, as Senator Hutchison
    has, for the way you have been working with this committee. It
    is really a pleasure to be with you and to work with you.
        If there is no objection, we are going to run the clock at
    seven minutes to start with and then shift to five in the
    second round.
        Senator Dorgan, if you have to go, I would be happy to
    yield my time to you now.
        Senator Dorgan. In fairness to my colleagues, why do we not
    just proceed?
        Senator Stevens. I am yielding to you my time. They will
    not be delayed. I play cleanup anyway. So if you want to start
    first, you may.
        Senator Dorgan. Well, let me just ask two quick questions
    then, again in fairness to my colleagues.
        Senator Stevens. Just take your time now, if you are going
    to leave.
        Senator Dorgan. Thank you, Mr. Chairman.
        I would like to ask General Ryan and you, Mr. Secretary, if
    you would comment on the issue of tiered readiness very
    briefly.
        General Ryan. Tiered readiness is a concept that is
    peculiar, I think, to different force structures. For the Air
    Force, we have never tiered our readiness. We have been unable
    to do that for several reasons.
        First of all, we are--in the war plans that are out there
    today and in the construct of major regional contingencies
    (MRCs), all of our units are deployed in the first 30 days to
    either one of the contingencies or the other, because airpower
    is first on scene and needs to be first on scene in the halt
    phase of any type of conflict. We cannot tier our readiness
    because of our need to hold it at the highest level to make
    those time lines.
        The second issue for the Air Force, in a tiered readiness
    concept, we have found in the past that any time we have let
    our readiness fall off some, our accident rate starts up. We
    have to keep our pilots, particularly our young pilots, at the
    highest level of readiness due to the demands of the missions
    that we have for them.
        So falling off into a tiered readiness structure does not
    work for the United States Air Force and will not work under
    the EAF concept either.
        Secretary Peters. Let me just add to that that under the
    EAF concept, while people are in fact going to be on the bubble
    to deploy for 90 days every 15 months, the point of the other
    time is to allow them to train to stay at the highest readiness
    levels, as well as have time with their families. There is no
    intention to drop readiness in the other periods of time.
        This is really a scheduling opportunity for us to make sure
    that people do have time to train and do have time to spend
    with their families and do have time to recover from the very
    fast pace of operations which occurs when they are deployed. So
    our current intention is to try to keep all units up to the
    requirements of the two major theater wars.
        General Ryan. And that includes our Guard and Reserve
    forces. We inspect our Guard and Reserve forces to the same
    readiness standards that we do the active duty, because we use
    them on a day-to-day basis, seamlessly intermingled with us.

                           Standoff weapon deployment

        Senator Dorgan. In recent operations, including Operation
    Desert Fox, we have seen the use of standoff weapon deployment
    from B-52s and also from naval operations, naval vessels.
        Is it your impression that that is the wave of the future?
    I mean, do you predict that having essentially air trucks to
    haul standoff capability to distant shores is the way that we
    will fight in the future?
        General Ryan. It will be the way that we normally initiate
    the fight, because standoff gives you the ability on fixed
    targets to be able to go in and set the conditions to bring on
    forces that can then penetrate. So we will always begin, I
    think, with a standoff capability to allow us the penetration
    and then to bring on bomber forces, which can further
    penetrate, and fighter forces to bring mass and bulk to the
    fight.

                                 Bomber roadmap

        Senator Dorgan. Is the Air Force planning the acquisition
    of a bomber, a new bomber, at some point in the future? And if
    so, when? We have the B-1. We have the B-52s. We have the B-2s
    in our arsenal. What next?
        General Ryan. We just signed out the bomber road map, as
    you are aware.
        Senator Dorgan. Right.
        General Ryan. And that bomber road map shows our bomber
    fleet going out fairly far into the next century. But we are
    undertaking right now a future attack aircraft type of study.
    And do not even know whether the next capability will be a
    ``bomber.'' It could be something else.
        Senator Dorgan. I see.
        General Ryan. So what we are trying to do right now is get
    definition on what are the attributes that we need for this
    world that we are going to live in this next century and how
    does rapid intercontinental precision response fit into that
    capability. So we are in the definition phase of what this B-3,
    if it is going to be a bomber, we are in that phase now.
        Senator Dorgan. My colleagues probably know this, but I was
    interested to learn in talking to some B-52 crews that the
    average B-52, I think, has something like 12,000, 14,000,
    15,000 hours on the airframe. The B-52 manufactured in the
    early sixties has maybe 12,000 or 14,000 hours on the airframe.
    It is not unusual for a passenger to get on a 747 out here in a
    commercial airline someplace to find that the plane they are
    getting on has 50,000, 80,000, 90,000 hours on it.
        And so these B-52s have relatively few hours on them. What
    is your expected life for a B-52 at this point?
        Secretary Peters. Our view is that it could be endless.
    When the engineers put it together, they figured out what they
    thought they needed and doubled it. So it is really an airplane
    that is going to be limited by its systems probably more than
    by fatigue life.
        There are some wing skins, I believe, that we think would
    have to be replaced in the 2030 to 2040 time frame. And
    probably economically it might not be effective to do that at
    that point.
        But our basic plan for the B-52 is to continue to try to
    upgrade the systems, which are the--particularly the
    electronics systems, which do wear out and which do get
    surpassed by other electronic systems on a regular basis. And
    we have started that work, although not all of it is funded.
        Senator Dorgan. And the B-52s that are in our attrition
    reserve, are they generally upgraded to the point where we move
    them in and out of the active force--in a kind of a seamless
    way?
        Secretary Peters. They have been up until now, yes. And
    that would be our plan, to keep them on the same level.
        Senator Dorgan. Do you have the same retention problems
    with the B-52 pilots and skilled maintenance folks as you do
    with the other? The reason I ask the question is that I did not
    detect that as a real serious problem in the KC-135s and the B-
    52 component that I visited.
        General Ryan. Yes, sir. We have that across the board.
        Senator Dorgan. And one of the other aspects is that when I
    visited the two bases, it was just after we had passed the
    legislation improving the retirement benefits and also a pay
    raise that was more than is usual.
        I tell you, the moral boost from that action by the Senate
    was very significant, especially the young airmen and others,
    the commanding officers feeling that they would be able to keep
    a lot of good people they otherwise would not keep. It was a
    big deal to them.
        General Ryan. Everywhere I go and every unit I visit, and I
    think it is true for the Secretary, our folks come up and say
    thank you and tell everybody who is working our issues in
    Washington thank you, that this is--that there is a light at
    the end of this tunnel. And they really appreciate that.
        Senator Dorgan. One final question. The Grand Forks Air
    Force Base is one of the three core tanker bases. Do you have
    any plans to change the component of your tanker bases or the
    makeup of how you would deploy tankers?
        Secretary Peters. No. We have no plans at this point for
    that.
        Senator Dorgan. Let me submit a couple B-52 questions to
    you. And let me thank the chairman for his generosity. Thank
    you, General and Secretary.
        Senator Stevens. Thank you. I think if it really lasts a
    full 80 years, it will be the first mechanism in war that has
    outlived all the generations that were associated with building
    it.
        Secretary Peters. I will tell you, having flown on one
    three weeks ago, that I was the only person on the plane who
    was older than the airplane. But it was in very good shape. And
    actually, we have taken excellent care of those platforms. The
    main concern is that we have not taken good care of the
    electronics, and we do need to fix that.
        Senator Stevens. If you can fly those things until they are
    80, can you not reenlist Strom and me?
        General Ryan. We would be happy to. We are short of pilots.
        Senator Stevens. Senator Inouye.

                                Readiness budget

        Senator Inouye. General Ryan, I understand that additional
    funding was added to your readiness budget for fiscal year
    2000. Was that amount enough, and what was the amount?
        General Ryan. We added a significant amount of spare parts
    and readiness-related funding. In fact, you could almost say
    that everything we added, almost $2.5 billion that we added to
    our budget addressed readiness concerns, either right now or in
    the future. They were things that we really thought we needed.
        But it did not get it all, because we had to balance the
    shortfalls that we had. In balancing them, we still had, as the
    Secretary said, another $300 million-or-so that we needed to
    put against spares and readiness kinds of accounts.
        So we have not turned the corner. In fact, what we think we
    have done is try to level out our readiness; that is, stop the
    decline. But we have not, in the $2.5 billion that we put into
    this budget, turned it around and started it back up.
        Senator Inouye. I gather from your very careful response
    that you are not able to fix serious infrastructure shortfalls.
    In order to do that, what sort of funding would you need?
        General Ryan. Over and above the funding that we put
    forward for this budget, and that was the addition of the $2.5
    billion plus the retirement and pay reforms, we need to spend
    about another $2.5 billion to address some of our shortfalls,
    particularly in the readiness area and infrastructure.
        We are mortgaging our infrastructure right now almost
    across the board. We have a backlog of our real property
    maintenance of $4.4 billion, and it is growing every year.
        We have to stem that, because it is--and we have to make
    sure that we have funded those things that make quality of
    service as good as the quality of life we provide. So there is
    a real balance here between quality of service and quality of
    life that we think is located in this $2.5 billion unfunded
    priority list, which we supplied to this committee.
        Senator Inouye. We speak a lot about spares for engine and
    aircraft readiness. What is the situation at the present time?
        Secretary Peters. The situation is that we are trying to
    climb out of a hole that was created by some underfunding in
    1997. We reprogrammed additional money against spares in 1998.
    We took the bulk of the additional money that Congress gave us
    in 1999 and put it into spares and depots. And we plussed up
    again in 2000.
        Where we think we are right now is that, particularly with
    respect to engine parts, we have an 18-month to 24-month lead
    time. And we are beginning to see some of those new parts
    coming on line, based on the funding changes we made in fiscal
    year 1998.
        Let me say one thing about that. Part of the spare parts
    problem is actually redesigning parts that are failing and need
    to be fixed. So there is a relatively long cycle in some
    circumstances.
        At this point, if you talk to our commanders in Southwest
    Asia, you will find that they are basically getting the parts
    they need. They have priority.
        In Europe and in the Pacific, they are just beginning to
    see additional spare parts. But in the United States, they are
    not seeing spare parts. Our hope is that within the next 12
    months our continental U.S. units, which are the last in
    priority to get spare parts, will begin to see a much better
    fill rate for their requests. But it is an ongoing problem.
        The ultimate solution, we now believe, is to put about
    another $380 million worth of parts, primarily engine parts, on
    the shelves in inventory. What we have been funding is the
    annual consumption.
        What we have not done is rebuild inventory, and that is
    what we put on our unfunded list. And we are actually going to
    try to reprogram to fund those parts and work in the 2001
    budget submission as well.
        Senator Stevens. Can you hold it there for a minute?
        Senator Inouye. Sure
        Senator Stevens. Are you flying parts? I mean, have we
    compared the cost of this resupply system we have now to really
    doing what you said, putting them on the shelf? I am asking
    that because industry now is using an on-time delivery concept.
        Secretary Peters. We are as well. We have both commercial
    delivery services and also world-wide express, which is the Air
    Mobility Command, 48-hour service, which is contracted for all
    of DOD. And we are doing that. But when we----
        Senator Stevens. Have you analyzed those costs?
        Secretary Peters. Yes, we have. And our belief is that when
    you go back and look at--these are by and large parts which
    make--you know, drive the bulk of our non-mission capable rate.
    They are parts which by and large are long lead time and parts
    which simply creating velocity improvements will not really
    affect.
        So the answer is yes. We understand that there is a
    tradeoff here between inventory and velocity, and we are trying
    to work both. But our parts people tell us this is really a
    fundamental requirement we need to improve on.
        Senator Stevens. Thank you.
        Senator Inouye. General and Mr. Secretary, during Desert
    Storm, we used to assure ourselves that we had sufficient
    forces to involve ourselves in two major regional contingencies
    and still have reserves for other potential problem areas. Now
    we are supposed to have sufficient forces to fight two nearly
    simultaneous contingencies. Can you tell us with what degree of
    confidence and at what risk factor do you believe we have
    sufficient force structure to meet this challenge?
        General Ryan. Sir, I believe that we have the force
    structure to meet it. And in two near-simultaneous
    contingencies, we would have to pull back from many of the
    small scale contingencies that we may be involved with. So our
    force structure is based on two near simultaneous major
    regional contingencies, and it will require all our force
    structure to do it.
        That is based upon a fair or a moderate risk. We are at
    high risk, I think, right now in executing two of these major
    regional contingencies because of the readiness of our forces.
    For instance, the assumption in the major regional
    contingencies is that, for instance, a C-5 aircraft would have
    a readiness rate of 75 percent. Its mission capable rate would
    be 75 percent. Today that aircraft is running at 60 percent
    because of required upgrades and spare parts, et cetera.
        So as we dip down in this readiness equation that we are in
    right now, what happens to us is the risk goes up. We still
    believe we could win two major regional contingencies, but that
    risk would be measured in the unresponsiveness of some of our
    systems producing casualties and loss of lives, further loss of
    lives, other than what would occur if we were at our right
    readiness levels.
        Senator Inouye. Can you describe the risks involved? You
    just said loss of lives, but----
        General Ryan. I think additional loss of lives, both ours
    and our allies, additional loss of equipment, just a longer
    time to execute the halt phase of either of these regional
    contingencies, and the offensive parts of them. It would be
    measured in both equipment and loss of life.
        Senator Inouye. If you do not wish to respond to this, I
    can understand. Would we be able to involve ourselves in North
    Korea and Iraq at the same time?
        General Ryan. Not at the same time. We would have--near
    simultaneous, yes. But if they went off both at the same time,
    we would have to swing to one and the other, because some of
    our force is not two MRC capable. And that is why we say near
    simultaneous.
        Our lift capacity is built to take care of the surge up
    front for one. It is not built to take the surge for two. We
    estimate that they would have to be 45 days apart, and that is
    what we build it on. If they come simultaneously, our lift
    capability is not there.
        Our bomber force also swings from one to the other. Some of
    our other special assets swing from one to the other. So we are
    not in total a two MRC simultaneous. It is near simultaneous.
        Senator Inouye. And one final question, if I may. In your
    study or your projection, you speak of retiring the B-52 in
    2040. But I also note that the B-1 and B-2 would be retired
    before then.
        Secretary Peters. Let me address that, if I may, Senator.
    Both the B-1 and the B-2 were designed in a much later period
    of time with a specific number of flying hours on the platform.
    So they have kind of a shelf life, if you will, and x number of
    flying hours.
        The way that we came up with those dates was to look at
    where we are in flying hours today, the projected flying rates
    in basically a peacetime scenario. And that tells you how long
    they will last.
        But both the B-1 and the B-2 have fairly significant
    engineering features that will simply wear out through
    corrosion and through fatigue. At that point they will not be
    economically sustainable once that happens.
        Senator Inouye. At the present pace that you are following
    in design and planning for the new generation aircraft,
    whatever you call it, do you think we will have something ready
    before then?
        Secretary Peters. We are looking at planning today. If you
    in fact agree that the force will not deteriorate until 2037,
    which is probably a number that is way too precise, then we
    have until the end of the next decade, the 2010 to 2013 time
    frame, before we really have to begin in earnest to look at
    requirements and begin a development program.
        Our concern, as the Chief indicated earlier, is that we are
    not sure at this point what the right platform would be.
    Obviously, we are working very hard on precision weapons and
    standoff weapons. I have occasionally heard somebody call the
    C-5 the arsenal plane, where we could just throw precision
    weapons off the back.
        But we need to look at the interaction between the weapons
    we have, the sensor systems we have and the space technology we
    have. And at this point, it is probably premature to start on
    another development course.
        Senator Inouye. Thank you very much.
        Senator Stevens. Thank you.
        Senator Bond.

                                      C-17

        Senator Bond. Thank you very much, Mr. Chairman. Gentlemen,
    you have mentioned the problem with the lift capacity. And this
    is something that we understand from other testimony and other
    committees is a real problem. Focusing on that, what is the
    active Air Force requirement for C-17 lift platforms?
        And second, considering the fact that the National Guard
    performs a major portion of the lift requirements of the
    nation, would it be advisable to contemplate a follow-on
    procurement of C-17 for National Guard lift squadrons? Could
    not additional C-17s be the most long-term cost-effective
    method of answering the problems we face on the aging fleet?
        Secretary Peters. Let me start by saying, Senator, that we
    have a Mobility Requirement Study '05 (MRS 05) ongoing right
    now to try to determine what the mobility requirements for the
    next decade will be. The current mobility requirement is 49.7
    million ton miles a day, and we are not able to get to that
    with the sum of all of the lift we have, given the mission
    capable rates of the
    C-5 aircraft, which we are working on.
        We have funded 14 additional C-17s for the special forces
    mission. The estimate is we need 15. That would be in the out-
    years beyond the end of the future years defense plan (FYDP).
    And we will be reviewing this MRS 05 at the end of the year,
    when it becomes available, to look at exactly that kind of
    issue.
        Right now, my belief is that we should have a plan in
    place, as we do, to upgrade the C-5 to keep it flying. It also,
    like the B-52, has very few flying hours, and has about 80
    percent of its life left on it.
        But there will be tradeoffs between fixing older C-5s and
    buying new C-17s. That analysis has started, but it really
    needs the information from MRS 05.
        As you may know, we already are using Reserve pilots with
    the C-17 community. We have in Charleston, for example, a
    Reserve unit that has no aircraft, but whose pilots and load
    crews work on the C-17s that are assigned to the active force.
        So, one of the models that we are very much looking at is
    integrating active Guard and Reserve in flying units. And I
    suspect that rather than having stand alone flying units, what
    we really probably want, although this again is to be analyzed,
    are Guard, Reserve and active units that fly the same force of
    planes and are essentially interchangeable. That looks to us
    like the way to go. And that is in general where our thinking
    is taking us at this point.

                               Guard and Reserve

        Senator Bond. Actually one of the questions I guess we will
    defer is, as you use more, as we are using more of the Guard
    and Reserve on a routine basis, there is supposed to be this
    strategic reserve. What happens when you need to call in the
    strategic reserve, if you are using them in your routine
    operations?
        Secretary Peters. Well, we are having them play in the EAF,
    because, (a) they want to, and (b) that is probably the best
    way to make sure that their capabilities are interchangeable
    with ours.
        Our basic scenario at this point is that in peacetime
    operations, we will be in these EAF units, and the Guard and
    Reserve will fill in a rotation. And we are doing the smart
    things with the schedules to make that more possible for both
    the Guard and Reserve.
        In the context of two major theater wars, they would swing
    to that. And they are in the plans for that. So that is how
    they--they pull off of other stuff to follow in the two MRCs.
        General Ryan. Our Guard and Reserve in the United States
    Air Force have in the units about one-third full-timers. The
    others are traditional Guard or Reserve folks, who are part
    time. Our full-timers are providing us some of the services
    that we have to use in this era of constant OPSTEMPO. They are
    helping us very much.
        And our traditional Guardsmen and Reservists are using
    their two weeks of time in volunteering that time to us, indeed
    volunteering more than that when they have time off. So we
    could not be doing this day-to-day operation without our Guard
    and Reserve.
        Senator Bond. That is what I understand. Let me move on.
    General Ryan, I raised a question about the National Guard
    general purpose squadrons. And I understand the procedural
    restrictions placed upon upgrading the F-15As. But there are As
    out there which still have a lot of life left on them, even
    more life than some of the early F-15Cs.
        And now I understand that the Guard F-15A to F-15C
    replacement program the Air Force anticipates will be forced to
    the right, extending the sunset date of the F-15A because of
    procurement problems. Air Guard units are out there right now,
    will be for the foreseeable future.
        Is there anything we can do to help with an F-15A system
    upgrade, such as accelerating the installation of fighter-to-
    fighter data links to bring them up to tactical parity with the
    rest of the Air Force TACAIR inventory?
        And specifically, do you see any way to speed up the
    process to take advantage of the experience of Guard pilots
    when they are asked to integrate with other deployed unit of
    the total force?
        General Ryan. I will answer it in general. And could I get
    back to you on the specifics of the A?
        Senator Bond. Please.
        General Ryan. But in general, we are trying to do that
    today. We had an additional buy of 50, or correction 30, block
    50, F-16s primarily for two reasons. One, to increase our
    capability in the active duty force for suppression of enemy
    air defense capabilities and to allow us to upgrade the Guard
    F-16A models, which are running out of life, that we absolutely
    have to replace with better capability.
        And we would move block 30's, which are very capable
    aircraft, into these Guard units, whose the life of the
    aircraft is falling out.
        The A model, I would like to take that for the record and
    get back to you.
        Senator Bond. Please. And I would also like you to think
    about updating your active inventory of F-15s to include a
    procurement of F-15Es to upgrade your wing in Lakenheath,
    England. So if you would take a look at that as well, I would
    appreciate your views on that.
        [The information follows:]

                                     F-15A

        The F-15 A/B fleet is vital to our continued air
    superiority mission. The F-15A/B is being upgraded to parity
    with the active force and is included with the active F-15 C/D
    fleet in the fiscal year 1999 Fighter Data Link (FDL) Lot 1
    production buy. The Lot 1 buy equips 51 ANG aircraft. To
    complete the Guard FDL upgrade would require an additional
    $20,400,000.
        The experience of the average Guard pilot is something we
    very much want to leverage into our force package. We are going
    to extraordinary lengths to upgrade all of the Guard aircraft
    to full parity with the active fleet. Current budget pressure
    leaves the Air Force unable to fully modernize its Total Force
    fleet. All Air Force aircraft (Active, Guard, and Reserve) must
    be completely compatible and mission capable when deployed. We
    are committed to modernizing the Total Force fleet including
    the ANG A-10s, B-1s, F-15s and F-16s with the latest technology
    so our most experienced pilot corps can bring the best
    capability to bear worldwide.

                                     F-15E

        The Air Force has not budgeted for procurement of
    additional F-15Es. The USAF has 17 attrition reserve F-15E
    aircraft on contract with the Boeing Company (St. Louis), which
    will be delivered between May 1999 and February 2000. After
    delivery is completed, the USAF will have 217 F-15Es. These new
    F-15Es have Global Positioning System (GPS), Digital Map System
    (DMS), full wiring for precision weapons, and other avionics
    and fuel system improvements installed on the production line.
    The USAF plans to retrofit all existing F-15Es with these
    modifications.
        Current fleet requirements are 201 aircraft. Given the
    current buy of 17 attrition reserve aircraft, if expected
    attrition rates and aircraft retirements due to expired service
    life are considered, by 2015 the fleet will have been reduced
    to 201 aircraft. The Quadrennial Defense Review (QDR) states
    that an F-15E replacement will be considered when the F-15E
    reaches its service life beyond 2015. Since sufficient aircraft
    will be available to meet fleet requirements, the USAF does not
    require additional F-15Es.

                                 C-20 contract

        Senator Bond. Mr. Secretary, last week you graciously came
    to my office, and we spent a good bit of time discussing the
    logistics support contract for the C-20 contract. A schedule
    was outlined to me which supported your contention that the
    schedule change was a cardinal change.
        However, when we reviewed that information, we believe it
    is of questionable accuracy. And because of that, the huge
    wedge which the Air Force contended drove it to reevaluate its
    workload requirement apparently may not exist or it may be in a
    different construct than was presented to us.
        There are a number of other questions, but additionally the
    175-man-hour per day requirement, as we discussed, may not be
    necessary, at least as has been indicated by some of the
    discussions in the pre-bid conference. So I question whether
    you have any cardinal changes.
        I do think there are some internal administrative problems
    on this that you need to get fixed before you go in any
    direction on it. And I would like to know for the record, are
    you willing to put this matter on hold? Do you think this is
    worth starting over and taking a fresh look?
        Secretary Peters. Senator, I think it is certainly worth
    taking a fresh look at this to try to understand where we are.
    In fact, after the bidders' conference, there was a decision
    made to hold off on putting out an request for proposal (RFP)
    until the comments could be resolved.
        Let me get back to my staff and figure out where we are on
    that. As I mentioned to you last week and again today, this is
    a very important contract.
        [The information follows:]

                                 C-20 Contract

        Our intention to re-compete the contract logistics support
    (CLS) for the C-20 was based on our responsibility to ensure
    current and future DOD mission requirements for C-20 aircraft
    are met.
        Our analysis revealed that the current contract requirement
    for a 125 man-hour per day burn off of over and above effort
    was not being met. Consequently, delivery of aircraft to our
    customers was sometimes late, causing an increased usage of
    available aircraft. In conjunction with this, in fiscal year
    1997/1998 aircraft depot visits averaged approximately 160
    days. Our market analysis revealed that in the commercial
    market place, 60 days is generally the case. Further, our
    projected depot schedules in fiscal year 2000 and 2001
    indicated we would experience an increased number of airplanes
    in the depot beyond what we had experienced to date and what
    was projected at the time the contract was awarded in 1995.
    These schedules have subsequently changed because they are
    driven to a large extent by the use of the airplanes, which we
    do not have total control over. So exactly what the bow wave is
    going to look like and when it will occur is subject to
    continual change. Nevertheless, based on our analysis to ensure
    the success of the C-20 mission, we pursued a new competition
    in order to achieve depot support beyond that of the current
    contract and more consistent with that in the commercial
    sector.
        We have conducted discussions with both the AF program
    office, our customers and Sabreliner on March 25, 1999 to
    ensure the concerns of all parties were clearly represented. As
    a result of these discussions, Sabreliner has recommitted to
    the original terms of the contract and a contract modification
    will be issued to capture that agreement. More importantly,
    Sabreliner has committed to fulfilling all C-20 CLS
    requirements at the current contract rate.
        Given this commitment by Sabreliner, and our careful review
    of all other pertinent information, we have determined it is
    not necessary at this time to conduct a new competition and
    that it is more advantageous to continue with the current
    contract. Therefore, we suspended our planned competition
    efforts on April 2, 1999.
        Finally, I will ensure program office works diligently to
    ensure the success of this effort. As expressed in the DOD/IG
    report, there are areas where we need to improve and we have
    already initiated corrective actions. We are committed to
    working with our users, as well as Sabreliner, to ensure our C-
    20 CLS needs are met.

        Secretary Peters. The schedules are driven pretty much by
    the use of the airplanes, which we do not have total control
    over. So exactly what the bow wave is going to look like, we do
    not know. But we certainly need to look at the concerns that
    you have raised, and we will absolutely do that. And I will get
    back to you on schedule.
        Senator Bond. Well, I very much appreciate that. And we
    would be happy, I think, the Appropriations Committee staff can
    work with yours, my office staff and the DOD Inspector General
    to see how this thing is working, to make sure that we fully
    understand what the needs are and where it stands.
        Thank you, Mr. Secretary.
        Mr. Chairman.

                              Research facilities

        Senator Stevens. Senator Hutchison.
        Senator Hutchison. Thank you, Mr. Chairman.
        My first question deals with the research issue and the
    cuts that were made across the board pretty much of your
    research facilities a couple of weeks ago. And I want to ask
    you if you are shortchanging the future with these cuts. And
    with the Joint Strike Fighter and the F-22 coming on line, can
    we afford to downsize the human impact priority as we are going
    into these new aircraft?
        Secretary Peters. Let me get back with some detail for the
    record. But, Senator, let me say this: When we looked at the
    science and technology budget and other things we had to
    balance, it was clear to us that we had to put the space-based
    radar and space-based laser programs, which are science and
    technology (S&T) programs, into the S&T budget without
    additional money. So something had to come out.
        [The information follows:]

                              Research Facilities

        The fiscal year 2000 President's Budget reductions in the
    Air Force Science and Technology (S&T) Program were taken as
    part of the Air Force restructuring of its S&T Program to focus
    on the Air Force vision of an Expeditionary Aerospace Force
    (EAF). Rather than shortchanging the future, this restructure
    will ensure the Air Force is positioned to meet the challenges
    of the 21st Century. While portions of the S&T Program will be
    redirected, the overall program remains focused on the most
    critical technologies needed to perform our national security
    mission in the future, including human effectiveness
    technologies currently under development such as laser eye
    protection, panoramic night vision goggles, helmet-mounted
    displays, and ejection seats.

        Senator Hutchison. We in fact looked at all of our
    programs, and we tried to prioritize them based not only on
    what we were doing, but what others were doing. And also, in
    the case of F-22 and Joint Strike Fighter (JSF), there is some
    human factors work that is carried within the budget lines of
    those programs.
        As you may be aware, our Air Force Research Lab actually
    executes a total budget that is about two-and-a-half times what
    its appropriated funds are, because it does a great deal of
    work for programs where the actual dollars do not appear in the
    Air Force Research Laboratory (AFRL) budget but appear in the
    programmatics of the F-22, the JSF, and some of the other
    programs. I believe that is the case here, that there is some
    work coming out of those programs.
        As General Ryan alluded to, we did put money back in our
    unfunded priority list, because there is unquestionably some
    good science that we could and should be doing. And we have no
    problem with, if there are additional funds, going back up the
    priority list to try to fund some of those programs.
        So there is no question that there is some benefit that we
    could get, if we had additional money.

                                    TRICARE

        Senator Hutchison. If you had additional money. OK.
        My second question is on TRICARE. You mentioned in your
    opening statements that pay and retirement were number one and
    two for retention and recruitment. I would add number three is
    medical care.
        I put an amendment on the authorization bill that has gone
    through the Senate that actually you could do without
    legislation. And it is fairly simple.
        It would allow you to expedite claims processing, expedite
    payments. And it would authorize you to make larger payments
    where your military personnel cannot get service in a
    particular category. It also requires portability, so that a
    plan can go from one region to another.
        Would you look at putting those in force before the
    legislation goes through?
        Secretary Peters. Both General Ryan and I regularly meet
    with our Surgeon General on TRICARE. And you are right, it is a
    major issue. In fact, in my estimate from going around bases,
    it certainly is one of the top five. And if we were actually
    able to alleviate pay and retirement concerns, it would quickly
    become number one.
        We have tried to both enforce our contractual obligations
    to get more prompt claim payment and also to struggle with our
    contractors to get that to happen. When I was recently out at
    Cannon Air Force Base, which draws on its medical care from
    Lubbock, Texas, as well as from the New Mexico area, I became
    aware that we are not in fact reimbursing people for the cost
    of driving from Cannon to Lubbock to get medical care.
        And that in fact, while they were quite proud of their
    claims payment rates, they were in fact outside of the
    contractual spec. They were not doing as well.
        So our belief is that we need to work all of these things.
    The portability, in particular, was supposed to have been
    achieved by now. It is struggling into existence, and it is
    certainly something we want. But the computer systems still are
    not giving it to us.
        So we are in heated agreement with you that these are key
    areas we need to resolve. The Surgeons General, I think, are
    working this as hard as they can. But there are certain
    computer glitches that seem to continue to happen, which is
    unfortunate.
        And frankly, the funding levels, I think, are a bit low.
    And we are actually having trouble in many areas getting
    providers at the funding levels we have.
        Senator Hutchison. That is a real issue.
        Secretary Peters. So we will continue to work this. It is
    an extremely high priority. I have a meeting about every other
    month on TRICARE with the Surgeon General to try to see how we
    are doing. There are some lights at the end of the tunnel in
    areas like California and Hawaii, I am told, where our TRICARE
    is built on an established health maintenance organization
    (HMO) base.
        But that is certainly not true in a number of other areas
    of the country. And one of the areas of the country that it is
    not true is in West Texas, among other places.
        Senator Hutchison. Right. It is very spotty. I find some
    are very happy with TRICARE, and others just cannot get service
    at all, because that specialty will not be treated in a certain
    plan----
        Secretary Peters. Absolutely.
        Senator Hutchison [continuing]. Because of the problems
    with payment and reimbursement.
        Secretary Peters. One of the things that we have tried to
    emphasize also, although we do beat our surgeon regularly, this
    is also pretty much of a command issue. And that is, that the
    command elements at all of our installations have to be engaged
    with the local community to get the trust and confidence of the
    care providers in that area, along with being able to leverage
    in some way our clout over the administrative mechanism of
    this, to make sure that the payments are on time, so that we
    continue to build on that trust.
        So there is a whole dimension of interaction with the local
    community that is so important to make this TRICARE business
    work. We do not see any substitute for TRICARE. TRICARE is
    where we are, and we are going to have to stay. Now we have to
    make it work for our folks.
        Senator Hutchison. And I think you can make it work with
    some tweaking.
        Secretary Peters. Yes, ma'am.
        Senator Hutchison. But I wish you would tweak before
    legislation goes through.
        General Ryan. Absolutely.
        Secretary Peters. OK.

                           Real property maintenance

        Senator Hutchison. A third question. You said, General
    Ryan, that real property maintenance is a real problem for you.
    Have you looked at your overseas deployments, particularly
    where there are problems with air space for training and
    continuing proficiency?
        And have you determined that you have the right mix of
    U.S.-based and foreign-based personnel so that we do not close
    a base, Reese for example, and then find out we need it? Then
    we do not have the capability to do whatever it is that is
    needed because we closed one before we had our force strength
    settled based on the kinds of threats that we are trying to be
    prepared for?
        General Ryan. Yes, ma'am. We continually look at that every
    year, at our overseas-to-CONUS ratio, the kinds of equipment
    that we have at those bases, the need of the area for the rapid
    response and forward basing requirement. We look at that very
    hard.
        On the Reese----
        Senator Hutchison. Well, you do not have to comment on
    Reese. We all know it was a mistake. But the issue is, if you
    say you look at it every year and we close a base, you either
    cannot reopen it or it is very expensive to reopen it.
        General Ryan. Right.
        Senator Hutchison. So have you come to terms with where we
    are in the world and what our needs are going to be and what is
    the best allocation before we go closing more bases? That is a
    great concern of mine, not only for the Air Force but also for
    the Army and Navy. But I would like to ask you if you have
    looked at that in terms of what you think is a realistic long-
    term force structure and division before we go close a base
    that we cannot reopen?
        Secretary Peters. We have looked very hard at that. And
    General Ryan and I actually raised a series of questions in the
    last budget cycle by inserting the number zero in the funding
    for a number of overseas bases to start a conversation about
    whether we really needed the force structure. And at this
    point, basically where we are is, we feel that we are committed
    through international agreements or the requirement of the two
    major theater wars to be at the permanent bases where we are.
        We are very much interested and continue to urge that some
    of the smaller bases that have specific functions be closed,
    because we do not think the function is a long-term function.
    But at this point, basically our agreements with our allies are
    preventing any real change in that infrastructure.
        General Ryan. We are also forward based for operational
    reasons. Korea, for instance, in our Asian beddown is very much
    driven by the threat that we see there. If that changes in some
    ways, then we want to be capable of changing the force
    structure there.
        We have drawn down overseas in the draw down over 60
    percent of our overseas locations, while we drew down the total
    force only 40 percent. We are fairly thin overseas, and we
    continue to rotate to areas that we never expected we would
    rotate to. So we take that into the equation for the
    responsiveness within theater that we need.
        We had a very good, as the Secretary said, very good
    conversations with our overseas CINCs about the need for those
    forces. And we continue that dialogue all the time.
        Senator Hutchison. Thank you, Mr. Chairman.
        Senator Stevens. Thank you. I was saddened to learn about
    the crash in Alaska of--it was an F-18, was it not?
        General Ryan. Yes, sir.

                                  Night vision

        Senator Stevens. It raised the question in my mind about
    orientation of pilots flying in total darkness. Do we have a
    special program for that?
        General Ryan. Yes, sir. In fact, we are moving in the Air
    Force to an all day/all night Air Force. I mean, we must be
    able to operate around the clock. We have made some very good
    progress in night flying, making it safer, through the use of
    LANTIRN pods that light up the day, put it on the HUD.
        Use of night vision goggles are proliferating throughout
    the Air Force and almost every one of our weapon systems. They
    give you such a better capability to deal with the environment
    at night. Once you fly with them, you say, why have I not done
    this before, and let us get on with it.
        There are some problems with night vision goggles that have
    to do with depth perception and----
        Senator Stevens. That is what I was going to go into,
    because this plane apparently hit the side of a hill. That
    raised several questions in my mind, as a former pilot, as to
    what was going on. We are going to get a lot more of those
    people coming up and using those ranges at night. It is a grand
    place to exercise Air Force and Army units together. And that
    was a night maneuver, as I understand it.
        General Ryan. Yes, sir.
        Senator Stevens. I was happy to hear about the Third Wing,
    Mr. Secretary, being designated as one of the lead air
    expeditionary force wings, but I am unclear how that force
    structure helps the commander-in-chief of the Pacific in his
    Air Force contingent under General Gamble. What does this mean
    to have a wing like that in your command?
        Secretary Peters. It means several different things. First,
    we have been deploying forces from Alaska, and actually from
    Japan as well, to Southwest Asia and to other contingency
    operations. So that merely being in the Pacific theater does
    not exempt you from duty in other theaters. It recognizes first
    that we have a real depth of command knowledge in that wing.
        It is a commitment, basically, to make sure that that wing
    remains properly staffed at the operational level, so that they
    can deploy pieces. As leaders of these units, they have to go
    into contingency operations.
        It also means that there has been some plus up in the
    supporting infrastructure. As I said in my opening statement,
    we put just over 2,600 additional people into the base support
    role. We have put those out in a total of 46 bases in the
    United States. There are another 3,000 of those authorizations
    which we want to move, and there will be some additions to the
    lead wing.
        So what we are trying to do with EAF and with the lead wing
    concept is to regularize what we have been in fact doing in the
    past, which is pulling units out to have them go to Bosnia or
    Southwest Asia, and that if there is a contingency in the
    Pacific theater, obviously--and if that wing is on the duty
    that 90 days, that would take care of the contingency.
        Senator Stevens. Well, when we were in the Persian Gulf
    last year, we got a lot of comments about the tempo of
    operations. General, will this help alleviate that? Does this
    mean that they are going to--I gather that was caused by the
    people from the same units being sent back to the Persian Gulf
    over and over again.
        General Ryan. Right.
        Senator Stevens. Is this going to meet that contingency?
        General Ryan. Yes, sir. We think that this EAF structure
    will allow us to use some units that we had not used before,
    particularly on the support side, to be able to fill some of
    those known contingency places that we have to rotate to for
    the foreseeable future.
        So we think that adding these additional billets allows us
    to continue to do that without taking away the support from the
    wings that need it on a day-to-day basis. We were shorting
    ourselves, quite honestly, in many of our support functions,
    because we never planned to have these contingency locations
    open.
        This acknowledges that we will probably do this into the
    21st century. And it will take some of the onus off the bases
    that were supplying that out of hide.

                                  Spare parts

        Senator Stevens. Mr. Secretary, you mentioned, and I have
    mentioned, the General has mentioned, the spare part problem.
    But from this committee's point of view, does your budget
    contain enough money to do what you have just suggested, so you
    need money to plus up to put some of these spare parts on the
    shelf overseas?
        Secretary Peters. No, it does not. What the funded portion
    of the budget has is 100-percent funding for the parts that we
    predict will be consumed by the flying hour program and by what
    we have programmed for contingency operations.
        Also in the modernization accounts it buys a number of
    additional engines and engine parts so that there is some
    additional inventory being built. However, this is primarily
    replacing things that have worn out so badly that it is time to
    replace them.
        Senator Stevens. The EAF concept will function only if the
    units that have that designation have the spare parts on hand,
    right?
        Secretary Peters. That is correct.
        Senator Stevens. Are you going to prioritize them for spare
    parts?
        Secretary Peters. We are--at this point, the answer is no,
    because there are so many units that actually participate, that
    it is not much different than what we are doing today. Not only
    do the lead units go, but units from the other 46 bases which
    have these elements will go as well.
        So our current prioritization is Southwest Asia, and then
    we are looking now at reprioritizing so everybody will probably
    have the same priority outside of Korea and Southwest Asia.
        Senator Stevens. Well, what about maintenance programs,
    depot maintenance? Is EAF going to affect that all?
        Secretary Peters. We have funded programmed depot
    maintenance spares at approximately 90 percent, so we think we
    are where we need to be. EAF will not alleviate any of the
    depot issues that we know of, nor do we think it will increase,
    because we will in fact be adding to the flying hours of some
    units and taking away roughly an equal amount from others.
        Senator Stevens. Well, we need to find you another $200
    million at least for spare parts inventory and eliminate that
    backlog.
        Secretary Peters. Yes, sir. That is right.
        Senator Stevens. Incidentally, during his questions,
    Senator Bond talked about the C-20 maintenance program. I would
    like to make sure that the staff works with your people on that
    to make sure that that is something that we monitor as well. We
    will monitor the spare parts program, but I would particularly
    monitor that issue that he raised.

                                     Kosovo

        General, we talked briefly personally about the Kosovo
    situation.
        Can you tell us, Secretary Peters, how much have we spent
    so far from the Air Force point of view on Kosovo. Have you
    kept track of that at all?
        Secretary Peters. Yes. It is about $18 million on the
    deployment that we have done to date.
        Senator Stevens. And do you have an estimate of what the
    air operations are going to cost us, if we go into them?
        Secretary Peters. I do not think we do, because at this
    point I do not think we have enough definition to know really
    what that is going to be.
        Senator Stevens. This is going to be another increased
    deployment, or do you have the people there now, General Ryan,
    that could carry out the threatened attacks in Kosovo?
        General Ryan. We have already deployed most of the force
    that needs to be in place to execute the contingency
    operations.
        We have deployed B-52s to the United Kingdom in Fairford.
    We have deployed in-theater assets, F-16s and F-15s, from
    internal in Europe down into Italy. We have deployed the F-117s
    out of Holloman, 12 of them, to Aviano. We have deployed
    additional reconnaissance and tanker assets.
        So the deployments for the most part, there are just a few
    that are still on call, are already there in place.
        Senator Stevens. We had an estimate from the Army what it
    would cost for its deployment, in the event there is an
    agreement. Do you have an estimate of what it would cost the
    Air Force if there is no agreement----
        General Ryan. No, sir.
        Senator Stevens [continuing]. If there is an ordered
    strike, as indicated?
        General Ryan. Right. Because we do not know the length of
    the operation, I do not have an estimate. I will get back to
    you, though, with one, given the length of period that it might
    go on.
        [The information follows:]

                           Cost of Kosovo Operations

        The estimated costs for fiscal year 1999 Air Force O&M,
    Milpers, and munitions total $5,926,100,000. This supports O&M
    and Milpers requirements for Kosovo Diplomatic Observer Mission
    (KDOM)/Air Verification Missions ($17,900,000) and the air
    campaign ($1,854,200,000). Additionally, current estimated
    costs of munitions expended through September 30, 1999 are
    $3,397,000,000 with an estimated replacement cost of
    $4,054,000,000.

        Senator Stevens. I intend to go to this bill for
    supplemental on the floor and ask the Senate to agree to an
    amendment which will require that we are consulted with regard
    to the air strikes. We have been consulted about the
    possibility of what happens with ground forces, if there is an
    agreement. I do not think we have been adequately consulted
    about what is going to happen in terms of air strikes in the
    event there is no agreement.
        And I would very much like you to convey that to the
    Secretary. I intend to call him myself. But I do think we ought
    to know more about these air strikes. We had air strikes going
    on against Sadaam Hussein for, what, nine months, and I do not
    remember him saying, I am willing to change my mind.
        This concept of bombing people to the point where they say
    ``uncle'' is sort of juvenile, as far as I am concerned. I
    think we ought to be consulted before that happens.
        Mr. Secretary, in terms of the budget, we have about a $8.3
    billion gap in this budget as far as this committee is
    concerned. I hope you realize that. We have $1.65 billion for
    unspecified rescissions, $3.1 billion for incrementally funding
    military construction, $2.2 billion credits for real estate
    investment tax revenues, and $6.6 billion for military
    retirement fund payments. That is, if you pardon the phrase,
    smoke. I cannot spend that, and the committee cannot allocate
    it. What do you suggest we do about that? You must be aware of
    it.
        Secretary Peters. We are generally aware of it. With
    respect to the military construction financing, we have in fact
    asked for an advanced appropriation. If that is not--I know the
    custom. It is in general--it has been used before. This is a
    one-time request to try to get the money we need to execute the
    2000 program within what is my understanding was the
    constraints of the budget caps, as they were seen at the time
    this was put together.
        Senator Stevens. I really do not think you expect us to do
    that. We are liable to be forced to do it because of the
    structure of this budget. And I think if we do do it, we are
    all going to learn another terrible lesson again. We learned it
    once before.
        Secretary Peters. It is not my----
        Senator Stevens. Costs will go up, and the delays will go
    up. And your program will be totally out of whack, and we will
    have to try to get it back into balance when budgets are even
    more constrained.
        Secretary Peters. Under the program as it is currently laid
    out over the FYDP, the budget does in fact become less
    constrained in the out-years--but, of course, you never spend
    the out-years, and sometimes that extra money does not show up
    when you get to the out-years.
        But our sense was that we absolutely needed the $2.4
    billion, $2.5 billion, that we got, in addition to the pay and
    personnel fixes. That is certainly true of the other services
    as well.
        We could not come up here and tell you we could execute a
    2000 budget with reasonable readiness unless we were able to
    come up with the amount of program that we got. So these are
    very hard choices, but that is where we were left.
        Senator Stevens. Senator Specter, I--this was my first time
    around. But you are here, so I want to yield to you now, if you
    have questions.
        Senator Specter. Well, thank you very much, Mr. Chairman. I
    do have a few questions. I regret not being here earlier. We
    have had Attorney General Reno testifying at the Governmental
    Affairs Committee on independent counsel.
        Picking up on what Senator Stevens had asked about, with
    respect to the proposed air strikes in Kosovo, General Ryan, to
    the extent that you can answer in a public session, what is
    contemplated, and what is the likelihood of being determinative
    or successful? We know the experience in Iraq.
        What are the prospects of the air strikes being able to be
    a decisive factor in bringing Milosevic and his confederates to
    the bargaining table?
        General Ryan. Senator, I have seen no indication that the
    threat of air strikes has improved the cooperation in the
    ongoing deliberations over there.
        Senator Specter. Beyond the threat, if there are air
    strikes, to the extent you can tell us what they involve and
    give us a judgment as to whether they would be likely to induce
    Milosevic to respond.
        General Ryan. I would like not to go into that in open
    session. If you would like to, I could speak to you afterwards
    on that, sir.
        Senator Specter. The issue of ground forces in Kosovo poses
    a very, very different consideration. I believe it is very
    important for Congress to take up the subject, because I
    believe air strikes are acts of war, and only the Congress
    under the Constitution has the authority to involve the country
    in war.
        I recognize the many instances to the contrary, but where
    there is time for a deliberation, we very frequently in the
    Congress candidly duck the issue. We did last February of 1998,
    when we did not take the matter up, and it looked like air
    strikes would be imminent. At that time there were no air
    strikes, but we did not take it up afterwards. We now have
    time.
        And my instinct on this stage of the record is to support
    air strikes, if they are realistically calculated to bring
    Milosevic to the bargaining table. Ground forces are very
    different from our experience in Bosnia, where there is much
    more risk. There is at least a sense that missile strikes and
    air strikes do not subject U.S. personnel to grave dangers in
    harm's way.
        To what extent, if you can give some overview or some
    response, are our pilots in harm's way, substantially in harm's
    way, by the air strikes?
        General Ryan. The air defense system in Yugoslavia is a
    very mature and professional and robust system. I would not say
    that that is a low threat area at all. In fact, I think there
    would be some losses in trying to take down that system, or we
    could not--no operation is clean, and particularly against a
    determined and very capable foe.
        I ran the air operation in Bosnia. We lost a French
    aircraft. And previous to that, we lost a United Kingdom
    airplane. And they were not half as good as the Yugoslav Army
    (VJ) with the equipment and capability they had. So----
        Senator Specter. Can we accomplish the strikes with
    missiles and not air power?
        General Ryan. I would like to defer that question, sir.

                                Missile defense

        Senator Specter. OK. We are debating right now a missile
    defense system. And that has implicated the strategic defense
    initiative.
        Could you give us a brief summary as to where we stand on
    the strategic defense initiative, how much money we have spent,
    what our success line has been, Secretary Peters?
        Secretary Peters. Let me get that for the record for you.
    That is not primarily out of the Air Force budget. The Air
    Force piece of this is primarily the space-based infrared
    program. And I can get you those numbers on that program for
    the record. And I can probably get you the other numbers, as
    well. But it has been in the tens of billions of dollars up
    until now.
        [The information follows:]

                                Missile Defense

        President Reagan directed the nation's ballistic missile
    defense (BMD) research and development efforts to counter a
    growing U.S.-Soviet ICBM/ballistic missile defense imbalance.
    The Strategic Defense Initiative Organization (SDIO) was
    created as the U.S.'s first joint acquisition organization
    dedicated to the research, development, and ultimate deployment
    of a viable, global BMD capability. Initially, under SDIO's
    leadership, and today, that of the Ballistic Missile Defense
    Organization (BMDO), the U.S. scientific community and military
    Services have explored, prototyped, and begun development of
    both national and international BMD systems to counter the full
    spectrum of ballistic missile threats. The efforts started as a
    directed response to a massive Soviet attack by
    intercontinental thermonuclear missiles on the United States
    and then evolved, with several intermediate steps, into a
    response against a growing number of less sophisticated medium
    range ballistic missiles, potentially with chemical or
    biological warheads as well as nuclear, targeted against the
    United States, our deployed forces, or our allies and friends.
        Since 1984, approximately $50,000,000,000 has been spent on
    ballistic missile defense. Technological possibilities have
    been examined and reduced to those deemed feasible and
    acceptable. Dozens of ideas, systems concepts, and draft
    architectures have been analyzed, modeled, modified, tested,
    consolidated, rejected, or transformed into a few formal
    development programs judged to be affordable and executable.
    Recent successful interceptor flight tests, such as the PAC-3
    intercept on March 15, 1999 and the THAAD intercept on June 10,
    1999, and other successful system component tests prove the
    viability of the investment and acquisition strategy,
    recommended by BMDO and approved by the Administration and the
    Congress.
        Within the next decade, five separate theater missile
    defense systems are scheduled to emerge from development into
    deployment along with the Air Force's Airborne Laser Program.
    In addition, we are developing a National Missile defense
    system for deployment. Once operational, ballistic missile
    defenses will form the key active element of our
    counterproliferation strategy, which includes arms control,
    deterrence, intelligence, and passive defense.

        Senator Specter. Do you have any sense, General Ryan, as to
    how close we are to having a system which would provide some
    shield?
        General Ryan. A limited system. I think Les Lyles of the
    Ballistic Missile Defense Organization (BMDO) office has
    testified. At a fairly high risk, we could probably get
    something out there in the 2005, 2006 time frame.
        Senator Specter. It seems to me we did hear from a three
    star Air Force general some years ago, who was in charge.
        General Ryan. The Ballistic Missile Defense Office is
    actually run by General Les Lyles, who is a three star Air
    Force general, but it is totally funded through OSD and
    controlled through Office of the Secretary of Defense (OSD).
        Senator Specter. But he must be under the control of the
    Chief of Staff and the Secretary.
        General Ryan. I just pay his salary. He really is not. He
    is detached to OSD for these purposes.
        Senator Specter. You just pay his salary. Well, that
    implies some control.

                        Office of Special Investigations

        One final question. How is the Office of Special
    Investigations (OSI) doing, General? I ask that question
    because I was in OSI when you were in grade school.
        General Ryan. Yes, sir. It is very good. In fact, we have
    integrated them into the role we perform in making sure that we
    have the best self-protection for our forces when we deploy
    them overseas. They are a very necessary link to the local
    constabularies and the local investigative arms of other
    nations. So we use them very, very much in this deployed mode
    we are in right now.
        Senator Specter. Well, the investigative techniques I
    learned in OSI have been very helpful to me on this committee.
    I was one of some 2,000 cadets between our junior and senior
    years going to Lowry Air Force Base on a very unique day in
    American history. It was June 25, 1950, the day the Korean War
    started.
        We are all in khaki, and we were sure we were heading
    straight for Korea. And after they saw us for six weeks, they
    sent us back to school. They wanted to win the war. [Laughter.]
        Thank you very much, General and Mr. Secretary.
        Thank you, Mr. Chairman.
        Senator Hutchison. Mr. Chairman, are you going to do a
    second round?

                                Aircraft engines

        Senator Stevens. I am going to start one now, if that is
    all right. I do not know how much longer the general has, but I
    do have a couple more questions I want to get into.
        Mr. Secretary, I remember Senator Andrews of North Dakota
    sitting here on this committee one day and saying to some of
    the aircraft engine manufacturers that, as a farmer, he got a
    guarantee on the number of hours in operation of his tractor.
    And he did not understand why we could not get a similar
    guarantee on the engines.
        As a matter of fact, I think that dialogue led to really
    revolutionize the aircraft engine manufacturing business. And
    now I think we are at the point where we really ought to think
    about going much further. I understand you are exploring this,
    as we have, and that is the releasing of basic non-combat
    equipment, in particular the engines, for our aircraft.
        I congratulate you on what you are doing, requesting
    proposals for at least the re-engining of the joint
    surveillance target attack radar system (JSTARS). But are you
    looking into the total subject that I have raised before, and
    that is leasing aircraft and aircraft engines?
        Secretary Peters. Yes. We are looking at two things. The
    JSTARS obviously is one of them. We also have given--we intend
    right now to give bidders on the C-5 re-engining the option of
    proposing leased engines with respect to that.
        On the aircraft side, we have just received what I think
    are really kind of path-breaking leases from both Gulfstream
    and Boeing for the G-5 and Boeing business jet, 737,
    respectively. These leases, I think, conquer many of the
    problems we have had in the past about indemnification and
    liability for termination.
        I mentioned to your staff yesterday that we would like to
    come up and brief your staff on a potential use of these
    leases.
        Senator Stevens. Thank you.
        Do you have the authority now, if we give you additional
    money or allocate additional money for this process, do you
    have the authority now to go forward with a leasing of aircraft
    and/or aircraft engines program across the board?
        Secretary Peters. We do not believe we do. We think we
    need--the problem that I think we still have is we need to
    understand how to put up what I would call a security deposit.
    And it is really in a way a budgeting issue.
        Senator Stevens. I think it is a money issue. I think it is
    part of our committee's authority to get into that one.
        Secretary Peters. It is.
        Senator Stevens. Because I think in the long run we will
    save money if the Air Force, and the department generally,
    leases noncombat equipment and uses it for a period of time,
    turns it back, and let it go into the general economy, and we
    get another piece that we are not paying for so much
    maintenance and repair.
        Now, I would urge you to give us language that would at
    least give you the opportunity to proceed with a pilot program
    in specific areas and try to stretch this money out. It has a
    lot to do with the availability of money for those next
    generation fighters and bombers that we are talking about, if
    we can find some way to not stretch out the ownership.
        It is nice to have a B-52 that can fly for 80 years, but I
    would much rather have had in 1981 and 1982 and 1983 and 1984
    and have those other things out somewhere being converted into
    something. If they can fly that long as military planes, they
    would have made tremendous cargo planes before they are
    through, as far as I am--and they should have been.
        I do not want to criticize the B-52, because it is a
    wonderful plane, but the concept of building a force that is
    going to last for 80 years does not mean to me that we would be
    a super power in 80 years. If we are flying 80-year-old
    equipment, someone out there is going to build something
    sooner.
        Secretary Peters. Right.
        Senator Stevens. So I would like to get us onto the leasing
    concept as far as possible, because I think it--particularly in
    the noncombat area and the cargo plane and passenger
    transportation areas. We should find a way to turn that over as
    rapidly as possible and to have equipment that does not require
    the massive costs of maintenance that these engines cost, if
    they are held too long.
        General Ryan, do you agree?
        General Ryan. Yes, sir, absolutely. I think power by the
    hour is a mechanism that we should go forward with. We ought to
    do it on those kinds of things that have commercial
    applicability. I think we can drive down the costs so that we
    are interoperable with the commercial----
        Senator Stevens. Absolutely. An engine manufacturer ought
    to have an agreement that if something goes wrong with that
    engine within the guaranteed hours, that they have an engine
    for that airplane within x hours, no matter where it is in the
    world.
        General Ryan. Yes, sir.
        Senator Stevens. And that is the legacy of Andrews'
    concept. That is what the farmers get. I do not know why we
    cannot get them for you.
        General Ryan. In commercial, that seems to be where the
    world is going as well. So the major problem--we would be happy
    to come in and talk with the staff and provide legislation--is
    that we need to get past the problem of having to budget the
    whole amount up front, even if we do not spend it all.
        Senator Stevens. I agree. That is our problem.
        General Ryan. That is the key issue.
        Senator Stevens. We can show you and work with you, I
    think, to at least put in a pilot project for specific engines
    we are in the process of acquiring and making certain that we
    lease them and we have the commitments and we have the up front
    money that you need, and the legislation spells out what
    happens if you want to cancel it. You have to have a
    cancellation clause, too.
        Secretary Peters. The cancellation clauses that the
    manufacturers are proposing are getting better and better and
    are becoming less of a problem. The fundamental problem still
    remains that we--in some instances, we have to essentially put
    up a security deposit. The transportation working capital fund
    has been proposed, and that may be a good solution.
        But we would very much like to come in and talk to you
    about that. We think that in particular the most recent
    Gulfstream and Boeing proposals offer a real opportunity to try
    to do some proof of concept in a pilot project.

                     Joint air-to-surface standoff missile

        Senator Stevens. Let me go to one thing. I have two other
    things that I would like to go to and then I will yield.
        What about the Joint Air-to-Surface Standoff Missile,
    JASSM? We are looking at a request to start a conventional air
    launch cruise missile, as I understand it. My staff tells me
    that we might have a less costly alternative, if we bought more
    JASSMs. Do you have a feeling about that, Mr. Secretary?
        Secretary Peters. Let me, if I may, give this to General
    Ryan, who is much more expert on this than I am.
        Senator Stevens. Well, I was going to pass it to him, too.
    Because I think that we have gone through at least two
    operations in the Persian Gulf where they would have been
    helpful. I do not know whether they would be helpful in a
    Kosovo operation or not. But certainly we are going into an
    area where I think we will have greater exposure for air forces
    than any time since World War II.
        General Ryan. Yes, sir. I think the air forces will always
    be on the front end of most of the operations that occur. It
    has been that way in the past, and it seems to be holding for
    the future.
        We have used the conventional air launched cruise missile
    (CALCM) very effectively, I think, in past operations. We are
    coming over to ask that we get some appropriation to replace 92
    of the CALCMs that we used in this last operation, Desert Fox.
        Senator Stevens. Well, would not the other one be a better
    missile and at less cost?
        General Ryan. Sir, they have--the CALCM has a longer range
    than the JASSM. So they fall into two different categories. It
    also has a much larger warhead than the JASSM is going to have
    on it. They are a complementary kind of capability, rather than
    a substitute for one or the other.
        Secretary Peters. Let me say for a moment on cost, it
    looks----
        Senator Stevens. Pardon me just a minute. But if you are
    looking for air to surface in an area like Kosovo, you are
    looking to a lot shorter range.
        Secretary Peters. Yes, sir.
        General Ryan. Yes, sir. But we do not get our first JASSMs
    now until 2002.
        Senator Stevens. I see.
        General Ryan. They are not available.
        Secretary Peters. The remanufacturing cost of the CALCM is
    actually, we think, in quantity is pretty reasonable and down
    maybe even below the JASSM range. But, of course, we do not
    have that many CALCMs left to convert. So our belief is it
    would be cost effective to convert the roughly 250 to 300, I
    think, are going to be available, because the remanufacturing
    cost is in the same general category as JASSM.
        Senator Stevens. I thank you for that. And I just learned
    something I did not know, or I probably would not have asked
    the question.
        I appreciate what you both already said about pilot
    shortage. I understand you have a new schedule for increase in
    pilot availability. I still would like to see us explore the
    concept of some additional stimulus to pilot availability
    through the Reserve Officer Training Corps (ROTC). Would you
    object to our trying to at least have a pilot program in that
    area?
        General Ryan. Absolutely not, sir. I think that the pilot
    problem is a national problem, not just a military problem or
    commercial problem.
        Senator Stevens. But the problem is that because of the
    shortage generally, the industry is offering more and more to
    your pilots to leave.
        General Ryan. Yes, sir.
        Senator Stevens. Because they have a shortage, and they
    have an enormous demand coming on them, too, for a buildup. The
    global concepts of our express service is taking an enormous
    number of people.
        But I envision using the ROTC to stimulate a return to
    pilot training for people in college. And then let us see you
    and industry bid for them, rather than having industry bid for
    yours.
        General Ryan. Yes, sir. We could not agree more.
        Senator Stevens. OK. Thank you.
        Do you have any second questions?

                                      C-17

        Senator Inouye. Mr. Secretary, I gather that you are
    planning to purchase additional C-17s beyond the planned 120.
        Secretary Peters. Yes.
        Senator Inouye. I hope that at some point you will consider
    Alaska and Hawaii as places to--put some of these aircraft
    there.
        General Ryan. We certainly will.
        Senator Inouye. We do have forward deployed troops there.
        Secretary Peters. We understand that. Right now the ones we
    have added were specifically for the special forces mission,
    where we know we have a shortage. Once we get the mobility
    requirements study done this year, we will be trying to come up
    with a better fleet size. It will probably take us about
    another year to come up with a better estimate of what we are
    really going to need.
        Senator Stevens. Can I add to that?
        Senator Inouye. Sure.
        Senator Stevens. You mentioned the mobility factor and the
    need for additional transport. We have two of the advance
    deployed groups in Alaska and Hawaii, and they are going to
    have to wait for C-17s to come in from Omaha, I guess, to pick
    them up.
        We both share that feeling that those C-17s ought to be
    available, if our rapid deployment and reinforcement for Korea
    mean something. It ought to go now, when they have to go,
    rather than wait ten hours for airplanes, maybe longer.
        But is that number enough? We are looking at 20, an
    increase of 20 in C-17s.
        General Ryan. Right. We have programmed 14. We think 15 is
    the requirement for our----
        Senator Stevens. Well, we are programming 20, if my numbers
    are right. We just want you to know where we think those five
    are going to go. [Laughter.]
        Secretary Peters. Yes, sir. We got it.
        Senator Inouye. You are on target now.
        Secretary Peters. We will know more when we finish this
    mobility study what the big requirement is.
        Senator Inouye. I have a question, Mr. Secretary. It has to
    do with the airborne laser. And I know that there is some
    question as to classification and such. So I think I should
    submit that to you.
        Secretary Peters. That would be fine. You will get a better
    answer, if you submit it for the record.
        Senator Inouye. This is on the investigation that has been
    carried out by the Congressional Research Service (CRS). So----
        Secretary Peters. Let me just say a couple words about
    that. When CRS came out and did the study, as I understand it,
    they sent out investigators who do not have security
    clearances.
        I heard this when I was out in New Mexico about a month
    ago. And at that point, I said, well, that is just really not
    satisfactory. We cannot leave these questions in their minds.
    Let us call back and talk to CRS.
        Congresswoman Heather Wilson was with us. And she in fact
    has done that and said: Get someone with a clearance out so we
    can brief them on the cleared stuff.
        So my sense is that that report is going to be
    substantially different once the folks who have security
    clearances go out and hear the cleared material. It is a
    preliminary report.
        Senator Inouye. I thank you very much, Mr. Secretary. This
    is one of the better hearings that I have participated in. It
    has been very helpful.
        And, General, thank you.
        General Ryan. Thank you, sir.
        Senator Inouye. Always helpful, sir.
        Senator Stevens. Senator Hutchison.

                          Two major regional conflicts

        Senator Hutchison. I just have one last follow-up question.
    General Ryan, in light of your answer to the question from
    Senator Inouye, do you think the near simultaneous policy is
    sufficient for our country with the threats we face?
        General Ryan. I think so. I think it is a good construct
    for gross sizing of your force. But I think you also have to
    use the day-to-day OPSTEMPO measurement, also, how much can
    your force sustain on a day-to-day basis, just not construct
    for force structure that has two near simultaneous major
    theater wars.
        And we are trying to do that in our EAF concept. We are
    structuring ourselves in a day-to-day mode to be able to roll
    into a two MRC construct, if we need to.
        So I think you have to measure it both two MRCs in day-to-
    day OPSTEMPO.
        Secretary Peters. Let me just add to that, if I may,
    Senator. I think in many instances the day-to-day tempo is
    actually more demanding on our forces than two major theater
    wars. For example, on our U-2 forces, it is easier to support
    two major theater wars with U-2s than it is to have them flying
    in the roughly half a dozen places they are flying today.
        Similarly, our transport pilots are much more in demand as
    they deliver humanitarian supplies down in Central America.
    They deliver supplies to Bosnia, Kosovo, Northern Watch,
    Southern Watch, and the Korean Peninsula.
        So I think, as you noted in your opening statement, this
    fatigue is a very serious problem. And it is something we need
    to combat, because that is what is making the Air Force not a
    long-run institution. It is what is causing us the loss of
    people. It is causing us the wear and tear, which is making it
    so difficult to make sure we have forces that are ready for the
    two major theater wars.
        So as we go through this, and particularly in understanding
    our Guard and Reserve requirements, I actually think that that
    is more stressing than two major theater wars. And we are going
    to try in the future to look at that very carefully, as we have
    done this year, to try to properly size for the day-to-day, as
    well as the two major theater wars.
        Senator Hutchison. I appreciate your saying that. I think
    that this is absolutely true from my experiences in visiting
    with our troops. And it is also psychological. Every one of
    them is ready to go when there is a major regional conflict.
        But there is a different question when they are not sure
    that their deployment is really a security threat. So there is
    a psychological reason there, too.
        Secretary Peters. Yes, ma'am, absolutely.
        Senator Hutchison. Thank you very much.
        Thank you, Mr. Chairman.

                         Additional committee questions

        Senator Stevens. We are just arguing about how to flesh out
    your program on pilot training. Thank you very much, gentlemen.
    It is nice to visit with you, and I look forward to talking to
    you further about some of the things we have discussed.
        I would like to arrange for a classified briefing for our
    committee on the status or the reality of the air defense
    problem in Kosovo. I think they should know that.
        Secretary Peters. We will get that over to you.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
               Questions Submitted to Secretary F. Whitten Peters
                   Questions Submitted by Senator Ted Stevens
                                funded programs
        Question. Secretary Peters, the Air Force's pro rata share of the
    $1.65 billion rescission would be $488 million. Do you support the
    budget assumption that the Air Force can make a cut of this magnitude
    to currently funded programs?
        Answer. The Department has not decided on the specifics of the
    proposed rescission and has asked to work with the Congress on the
    issue. Because no decisions have been made, the Air Force has no
    indication that any of the rescission is targeted toward Air Force
    programs. Obviously, a rescission of Air Force programs could force
    difficult choices and might further constrain modernization and
    infrastructure accounts.
                                     jassm
        Question. Secretary Peters, can you tell us about the progress to
    date on the JASSM program and give us an update on the projected
    capability and cost of the JASSM missile?
        Answer. Progress to Date: Program progress is acceptable against
    its cost, performance, and schedule commitments. The JASSM program is 6
    months into its 40-month Engineering and Manufacturing Development
    (EMD) Phase. Early insight into Carrier Operability occurred in 1998,
    when JASSM successfully demonstrated 6 catapult launches and 15
    arrested landings on an F/A-18C. Mission planning activities to support
    route plans and terminal plans are on schedule with early training
    ahead of schedule. Over 100 missions have been flown with the Flying
    Test Bed, a pod with missile processor, seeker, inertial and GPS
    hardware and software mounted on a helicopter, to measure terminal
    accuracy of the missile system. The first 2 EMD test units have been
    manufactured and delivered. Flight test vehicle number 1 (FTV-1) was
    released from an F-16 at White Sands Missile Range on April 8, 1999 and
    although it crashed, achieved 4 out of 6 test objectives. Expect next
    flight test around late July.
        Projected Capability: JASSM projected capability meets or exceeds
    the operational requirements document threshold requirements.
    Demonstration of projected capabilities begins in fiscal year 2000 with
    contractor development test and evaluation and combined development
    test/operational test, and concludes in fiscal year 2002 with the
    completion of initial operational test and evaluation. Low rate initial
    production approval is scheduled for January 2001. Required Assets
    Available (RAA) is planned in fiscal year 2002 for the B-52 and in
    fiscal year 2004 for the F-16.
        Costs: The Lockheed Martin EMD contract includes firm fixed price
    options for the first five lots of production. The Air Force currently
    plans to procure 1,106 missiles in Lots 1-5. The missile average unit
    procurement price for Lots 1-5 is $279,000 (BY95$) and includes a 15-
    year bumper-to-bumper warranty, well below the threshold and objective
    prices of $700,000 and $400,000 (BY95$), respectively.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                                      c-17
        Question. What is the Air Force's plan for the conversion of Air
    National Guard units from the C-141 to the C-17? How many C-17s would
    be required to make this conversion and when would they need to be
    funded to most efficiently make this conversion?
        Answer. In fiscal year 1995, the Air Force selected the 172 Airlift
    Wing, a Guard unit, Jackson, Mississippi for beddown of the C-17
    Globemaster III for fiscal year 2004. The number of aircraft currently
    programmed and funded, beginning in fiscal year 2002 are adequate to
    support this conversion. The ultimate force structure requirement for
    C-17 aircraft--and the division of these aircraft in Active, Guard, and
    Reserve units--cannot be determined until the Joint Staff has concluded
    its Mobility Requirement Study 2005 (MRS 05). We anticipate that this
    study will conclude late this calendar year.
        Question. Mr. Secretary, as you know, the 172nd Airlift Wing of the
    Mississippi Air National Guard in Jackson, Mississippi will be the
    first Air Guard unit to convert to the C-17. What is the current plan
    for the procurement of the additional C-17 aircraft needed to complete
    the 172nd Airlift Wing's conversion? If additional C-17 aircraft become
    available in this budget (i.e. a total of 20 C-17s), which Air Force
    and/or Air National Guard units will receive those aircraft?
        Answer. The programmed conversion of the 172nd Airlift Wing is
    fully funded in the current Air Force Program. In the event that
    additional C-17 aircraft become available to the Air National Guard,
    with no offsets to current program funding, possible increased
    production rates may allow a more expeditious conversion of the 172nd
    Airlift Wing. The Air National Guard's next priority would be to
    convert another experienced strategic airlift unit, currently equipped
    with aging aircraft programmed for retirement within the FYDP.
        Question. With recent reports that delivery of new C-17s is running
    approximately 200 days ahead of schedule, what are the Air Force's
    contingency plans that will ensure the 172nd is supported for early
    deliveries? Do any MilCon projects need to be brought forward, such as
    the construction of the flight simulator facility, or other support
    shops?
        Answer. All projects supporting the C-17 beddown at Jackson, MS are
    in the out years of our FYDP. If delivery of the aircraft were moved up
    200 days we would need to move most projects forward one year. The
    simulator project is based on delivery of the simulator equipment and
    should be constructed starting in fiscal year 2001. The delivery date
    was not known until after the fiscal year 2001 program was established,
    so as we make program adjustments in the coming months, we will work to
    move that project forward from it's current position in fiscal year
    2002.
        Question. I'm advised that the two designated Active Air Force C-17
    flying units, located at the Charleston and McChord AFBs have
    Maintenance Field Training devices. What are the Air Force's plans to
    ensure that the 172nd has these field training devices, when the C-17s
    arrive in Jackson. Wouldn't it be appropriate for the Air Force to go
    ahead and include this equipment in its Future Year's Defense Plan?
        Answer. There is currently no plan to procure Maintenance Training
    Devices for the 172AW at Jackson ANG Base. The cost of a suite of
    trainers currently located at Charleston AFB and the one being shipped
    to McChord AFB is approximately $70,000,000-$75,000,000. An additional
    suite of training devices for Jackson would be considerably more since
    the manufacturing dies are no longer available and would have to be
    constructed. Additionally, a formal training detachment would have to
    be established by AETC to support training activities. Charleston and
    McChord are scheduled to receive 48 aircraft each and establishment of
    a formal training detachment is already in place. Since Jackson is only
    scheduled to receive six aircraft, providing separate training devices
    and a training detachment is not cost effective. Based on current
    delivery schedules, student throughput on the devices at Charleston AFB
    will be considerably less than the present student throughput and can
    accommodate training for maintenance technicians at Jackson. This will
    ensure the 172AW will be provided formal training required to
    effectively maintain their aircraft.
        Question. The 183rd Aeromedical Evacuation Squadron, associated
    with the 172nd Air Wing, is the only Air National Guard unit with a
    regularly scheduled operational aeromedical evacuation mission and the
    only aeromedical evacuation unit with the C-141 as its primary
    aircraft. Will the 183rd retain its critical mission requirements in
    time of war and natural disaster, with the 172nd transition to the C-17
    aircraft?
        Answer. The fact that the 172nd Airlift Wing is transitioning to
    the C-17 aircraft does not impact the 183rd Aeromedical Evacuation
    Squadron's (AES) wartime mission. The Squadron can train to meet its
    mission requirements regardless of the airframe assigned to the Wing.
    Traditionally, the C-141 was designated as the primary airframe for
    inter-theater aeromedical evacuation but the present airframe
    designated to support inter-theater patient movement, in time of war,
    is the Boeing 767. The 183rd AES will continue to be tasked to support
    inter-theater patient movement. Its wartime mission and training
    requirements will not change.
        Presently the 172nd Airlift Wing supports peacetime day to day
    aeromedical evacuation missions. Although the C-17 has been designed to
    support aeromedical evacuation missions, use of the C-17 for peacetime
    AE may not be practical in light of multiple C-17 mission requirements.
    Whether or not the 183rd AES and the 172nd Airlift Wing will continue
    to support routine patient movement will depend upon C-17 availability.
                                    c-130js
        Question. Mr. Secretary, the ``Hurricane Hunters'' of the 403rd
    Wing based at Keesler AFB are vital to the safety of the people of
    Mississippi and the other Southeastern states. They are scheduled to
    receive 9 C-130Js (modified for weather reconnaissance) during the
    September 1999 to February 2000 time frame, providing a significant
    upgrade to their mission capabilities. The 403rd is also scheduled to
    receive a C-130J simulator, best estimate for delivery is early to mid
    fiscal year 2001; however, the MilCon for the simulator building is
    currently scheduled for fiscal year 2002.
        What is the Air Force's plan for setting up the simulator if the
    simulator building has not been built?
        Answer. A definite plan has not been established since the
    simulator is not yet on contract. The simulator will be part of the C-
    130J Maintenance and Aircrew Training System (MATS) contract which will
    be a full and open competition. Contract award is projected for 2nd
    quarter fiscal year 2000. Since none of the existing facilities at
    Keesler AFB can accommodate the simulator, the MATS contract will
    include provisions for the use of the contractor's facilities to house
    the simulator in the event the simulator building is not ready.
        Question. How much would it cost to set the simulator up in a
    temporary facility and then move it to the permanent facility once that
    facility is built?
        Answer. Costs to set up the simulator in temporary facilities are
    unknown at this time. Cost estimates for a temporary set up and move of
    a simulator will most likely be priced options on the Maintenance and
    Aircrew Training System (MATS) contract. Identification of a temporary
    location for the simulator (if necessary) could be determined once the
    simulator contract is awarded.
        Question. Shouldn't the MilCon funding be brought forward so the
    facility is already built when the simulator is ready for delivery?
        Answer. Yes. Based on projected training requirements, the
    simulator facility should be brought forward to better align
    construction completion with the proposed arrival of the simulator.
        Question. In which fiscal year would the simulator building need to
    be funded in order to ensure that it is built before the simulator is
    ready for delivery?
        Answer. Funding the facility in fiscal year 2000 will ensure that
    it is available prior to the earliest possible delivery date for the
    simulator.
                                     ______

                Questions Submitted by Senator Pete V. Domenici
             decreases in rdt&e and science and technology budgets
        Question. Given the long-lead time to develop new weapons and
    information systems, how does the Air Force plan to maintain U.S.
    technological supremacy while reducing defense-wide RDT&E budgets?
        Answer. The Air Force has maintained its overall S&T investment at
    last year's level. In fiscal year 2000, the Air Force's S&T Program has
    been restructured to provide the research essential to the Air Force
    vision of an Expeditionary Aerospace Force (EAF). Achieving this EAF
    vision requires increased emphasis on space technologies and the
    integration of air and space technologies. While portions of the S&T
    Program will be redirected, the overall program remains focused on the
    most critical technologies needed to perform our national security
    mission in the future.
        Question. Do you believe that you can maintain the scientists and
    infrastructure required for success at the present level of resources?
        Answer. The S&T Program provides for the most critical technologies
    needed to perform our national security mission in the future,
    including the necessary scientists and infrastructure. In fiscal year
    2000, the Air Force's S&T Program has been restructured to provide the
    research essential to the Air Force vision of an Expeditionary
    Aerospace Force (EAF). Achieving this EAF vision requires increased
    emphasis on space technologies and the integration of air and space
    technologies. As the Air Force increases its emphasis on space, the
    content of the S&T Program migrates from 6.2, in-house efforts, to more
    than 6.3, contracted efforts. As a result, there will be less in-house
    or manpower-intensive work.
        Question. The Air Force has announced their intention to reduce Air
    Force Research Laboratory personnel. There will be a loss of 43
    civilians at Kirtland. Precisely which programs were reduced or cut and
    how many people were connected with each program?
        Answer. In fiscal year 2000, the Air Force Research Laboratory at
    Kirtland AFB, New Mexico, will reduce laser imaging technology, space
    technology demonstration, and space thermal management efforts,
    resulting in the elimination of approximately 14 civilian positions.
    Elimination of another 29 civilian positions stems from previous
    manpower reductions including ``Dorn'' reductions, the Federal
    Workforce Restructure Act of 1994, and Congressionally-directed
    acquisition workforce reductions.
        Question. What criteria did the Air Force use to make decisions
    regarding these changes in its research laboratories?
        Answer. The decisions made regarding various elements of the Air
    Force Research Laboratory were based on the Air Force vision of an
    Expeditionary Aerospace Force (EAF). In fiscal year 2000, the Air
    Force's S&T Program has been restructured to provide the research
    essential for the Air Force EAF vision which requires increased
    emphasis on space technologies and the integration of air and space
    technologies.
                      air force plans for directed energy
        Question. As you know, the Air Force is now considering its plans
    to centralize and consolidate its directed energy programs. At present,
    I believe that Albuquerque is viewed as the best location for this
    initiative in light of Air Force resources, assets, and capabilities
    already at Kirtland. I would be interested in learning from you the
    most recent plans for directed energy within the Air Force.
        Answer. Directed Energy (DE) research has been in progress for many
    years, and several recent studies have shown the significant potential
    for DE products to benefit the war fighters of the 21st century. The
    Lasers and Space Optical Systems (LASSOS) study led by General (ret)
    Piotrowski identified weapon and nonweapon mission applications for the
    warfighter that can be most effectively accomplished using either
    lasers in space or terrestrial-based lasers whose beams transit space.
    In addition, the Directed Energy Applications to Tactical Airborne
    Combat (DE ATAC) study, led by General (ret) Fogleman identified
    promising airborne tactical applications using directed energy (lasers
    and microwaves) technology. Both studies were conducted through the Air
    Force Research Laboratory's Directed Energy Directorate at Kirtland
    AFB. The Air Force is currently conducting ground and space based laser
    technical developments and the airborne laser weapon program. The
    Airborne Laser (ABL) is on schedule to achieve IOC in 2007.
    Additionally, the Space Based Laser (SBL) Integrated Flight Experiment
    (IFX), a technology experiment to provide information needed to make
    sound decisions on future of SBL, is being developed for a launch in
    2012. The Air Force is also developing and testing a wide range of High
    Power Microwave (HPM) devices. The Air Force believes it is important
    to establish a technology link between ABL, SBL, GBL, HPM, and other
    efforts.
        While several options are available for future directed energy
    program management--including centralization and consolidation--no
    decision has been made to alter the current organization structure.
        Question. Does the Air Force currently desire to create a
    centralized facility for all of its efforts in directed energy? What
    sort of synergies could be leveraged or advantages could be derived for
    directed energy programs?
        Answer. The Air Force understands the synergy of establishing a
    technology link between Airborne Laser (ABL), Space Based Laser, High
    Power Microwave (HPM) technology, and all Directed Energy (DE) efforts.
    DE is an evolving technology that enables revolutionary military
    concepts; however, this cross-cutting technology requires substantial
    engineering and a government team to guide industry and academia toward
    fulfilling military missions. It is critical to insure that maturing
    technologies address the system engineering required for military
    applications through the existing AF and other service Product Centers
    for multiple customers. These technologies include target vulnerability
    and assessment, large optics and space structures, beam control, high
    and low energy laser systems, acquisition and tracking, and high power
    microwave sources and antennas. AFMC is exploring better ways to
    transition DE technologies from the labs to the product centers, but at
    this point no recommendation or decision has been made to create a
    centralized organization for directed energy.
        Question. What weaknesses or strengths does Albuquerque provide as
    a location for a directed energy ``Center of Excellence?''
        Answer. Air Force Research Lab (AFRL) Directed Energy Directorate
    at Kirtland AFB, NM, conducts most Directed Energy (laser and high
    power microwave) S&T. Both the SBL and ABL programs leverage heavily
    off of AFRL technology and experience in key DE technology areas, such
    as target vulnerability and assessment, laser systems, and acquisition
    and tracking. AFRL has world class facilities and employs scientists,
    engineers, and several key support contractors with years of experience
    in beam control, acquisition, tracking, and pointing, and optics gained
    through work done on the Airborne Laser Laboratory (ALL), Airborne
    Laser (ABL), the Relay Mirror Experiment (RME), and the High Altitude
    Balloon Experiment (HABE), among others. Further, all of the HPM
    development work for the Air Force is accomplished at Kirtland AFB. The
    majority of work in this arena is done by the Air Force Research
    Laboratory.
        If a directed energy ``Center of Excellence'' were located in
    Albuquerque, it would benefit from the area's mature work force and
    leverage off an already established relationship with the University of
    New Mexico. Several contractors supporting acquisition, tracking, and
    pointing and Boeing's Rocketdyne division are located in Albuquerque.
    Additionally, certain employees from Lockheed Martin and TRW are
    already working in the area on the ABL program. Albuquerque's moderate
    weather allows year-round testing at the Starfire Optical Range (SOR),
    which currently tests lasers and optics in support of atmospheric
    compensation experiments. Sandia National Laboratories' main site is
    also located in Albuquerque, providing another source of technology
    expertise.
        Unfortunately, much of the contractor workforce involved in
    directed energy is not located in Albuquerque. Major divisions of
    Boeing, TRW, and Lockheed Martin in addition to the Capistrano Test
    Site are located in California. The problem is magnified by the lack of
    major airline traffic through the Albuquerque airport. Though
    Albuquerque is a hub for Southwest Airlines, arranging flights from the
    East Coast for government TDYs can be difficult. For example, there are
    no direct flights from the Washington, DC area to Albuquerque.
        Prior to embarking on a potential plan for a Directed Energy Center
    of Excellence, site selection evaluations should be performed on
    possible locations.
     military construction funding (no military construction budgeted for
                                  new mexico)
        Question. Cannon Air Force Base received no military construction
    money in fiscal year 1999 or in the President's fiscal year 2000
    budget. The Air Force recently designated Cannon's 27th Fighter Wing as
    an Aerospace Expeditionary Force (AEF) lead wing. In addition, Cannon
    is now the base for Singaporean Air Force training operations. For
    these reasons, the adequacy of the runways and air control tower at
    Cannon are of utmost concern. What are the Air Force's standards for
    runways at its installations? How many runways at Cannon do or do not
    meet those standards?
        Answer. The Air Force standard for runways is to have an adequate
    structural foundation to support assigned aircraft and a surface
    condition that prevents foreign object damage (FOD) to aircraft. A
    pavement condition index rating system is used to evaluate the
    condition of airfield pavements. Both operational runways at Cannon AFB
    are rated ``degraded'' due to continuous cracking and breaking of
    slabs, deteriorated joint seals, and spalling.
        Question. What standards does the Air Force have for control
    towers? Does the existing control tower meet those standards?
        Answer. Control towers must provide adequate space for functional
    requirements and must be sited to provide air traffic controllers a
    clear, unobstructed and direct view to all operating portions of the
    airfield traffic area. The existing control tower at Cannon Air Force
    Base is undersized, providing only 25 percent of the required space,
    and the air traffic controllers do not have a clear view of all
    taxiways and runways.
        Question. Do either the runway conditions or control tower at CAFB
    present a safety risk? What about efficiency of operations at the base?
        Answer. The 27th Fighter Wing safety office considers the need for
    tower improvements one of its top three risk areas. This project has
    been programmed for fiscal year 2003 in the Air Force's MILCON Future
    Year Defense Plan. For the present, local commanders are fully aware of
    the challenges posed by the current limitations to ramp visibility and
    are placing great emphasis on positive radio contact during ground
    movements in the out-of-sight area. This has also had the effect of
    keeping operations moving smoothly, and should continue to do so until
    the MILCON project is complete.
                            low-cost launch programs
        Question. You are, of course, aware that the U.S. spends about two
    billion defense dollars annually for space launch. In light of the
    transfer of sensitive technical information to China by U.S. satellite
    companies, the Cox Commission has recommended increased attention to
    achieving reduced costs for U.S. launch capabilities. What programs
    does the Air Force currently support to reduce launch costs?
        Answer. The Evolved Expendable Launch Vehicle (EELV) program is
    designed as the answer to reducing the cost of access to space for the
    21st century. The EELV program has partnered with industry to develop a
    national commercial launch capability that satisfies both government
    and commercial user requirements for medium and heavy lift. The program
    will replace the current Titan II, Titan IV, Delta II, and Atlas II
    launch vehicles with two new competing families of vehicles. The EELV
    program has a requirement to reduce launch costs by at least 25 percent
    below what it would cost to launch future missions on the present
    launch systems. EELV development and launch service contracts were
    awarded on October 16, 1998. The Boeing Company and Lockheed Martin
    Astronautics were each awarded $500 million Other Transaction
    Agreements (OTAs) for EELV Development, with the balance of the
    Development cost to be borne by each contractor. Additionally, two
    contracts were awarded for Initial Launch Services (ILS) for the first
    28 launches between fiscal year 2002 and fiscal year 2006. Boeing
    received 19 launches for a contract value of $1,380,000,000 and
    Lockheed Martin received 9 launches for a contract value of
    $649,000,000. In addition to establishment of two internationally
    competitive commercial families of launch vehicles capable of meeting
    all Government and commercial needs, EELV's benefits include a 31
    percent life cycle cost reduction over current Delta, Atlas, and Titan
    launch systems and $6,200,000,000 in estimated savings.
        Question. Does the Air Force plan to increase resources devoted to
    achieving low-cost launch capabilities? Why or why not?
        Answer. The Air Force believes investment in low cost launch
    research could lead to improved capabilities. The Air Force is funding
    advanced low cost rocket engine technology development with $16,500,000
    in fiscal year 1999 and $7,500,000 in fiscal year 2000. The goal of
    this effort is to develop rocket engines with increased simplicity and
    improved operability. If successful, this has the potential of dropping
    the cost of space launch by more than 50 percent. Based on the results
    of these efforts, the Air Force will consider additional investment.
        In addition we are assessing two high risk ``minimum cost design''
    concepts (Scorpius and Excalibur) funded by Congress. Both are low-
    cost, liquid fueled expendable launch/upperstage vehicle technology
    concepts. Scorpius is funded at $3,000,000 in fiscal year 1997,
    $5,000,000 in fiscal year 1998 and $2,500,000 in fiscal year 1999.
    Excalibur is funded at $1,830,000 in fiscal years 1998/1999 and
    $4,000,000 in fiscal year 1999. Propulsion analysis in conjunction with
    launch vehicle analysis is underway to determine the relative merits of
    these concepts. Although progress is being made, the results do not yet
    warrant Air Force investment.
                            x-34 testing at holloman
        Question. As you know, concerns have been raised about
    environmental, safety, and operational issues related to the plans for
    continued X-34 testing. I would like your comments for the record as to
    what actions the Air Force will pursue regarding X-34 tests. How long
    will this assessment take? What issues are you pursuing in the scope of
    your evaluation? Do you believe that the Air Force's concerns can be
    adequately addressed in order for tests at Holloman to proceed?
        Answer. The Air Force has discussed the X-34 Test Program with
    NASA, and they have agreed to look at alternative locations for the
    recovery of the X-34. Safety, environmental and operational issues are
    being considered. NASA has not indicated any delays in the test program
    due to changes in the recovery site. The Air Force will announce the
    resolution as soon as possible.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
                                officer training
        Question. Secretary Peters, it has been reported over the last year
    that the military services including the Air Force, are experiencing
    shortages in their officer corps. Would you agree that one way to
    combat this shortage is to provide officer candidates with the best and
    most efficient training facilities available?
        Answer. Yes. It should be noted, though, that the Air Force has
    been meeting its officer accession goals. However, the limited lodging
    capacity for the officer training facility at Maxwell Air Force Base
    will restrict the flexibility to increase accessions as required in
    future years. To solve this problem, the Air Force has proposed
    military construction projects for funding in the future years defense
    program.
        Question. Mr. Secretary, I have been told that the number of
    officer candidates scheduled to train at Maxwell Air Force Base will
    continue to rise. In light of that fact, would you agree that the Air
    Force should place a priority on the completion of the Officer Training
    School's campus?
        Answer. Yes, we need to complete the campus as soon as possible to
    meet officer production. The Air Force did not accelerate the new OTS
    requirements into the fiscal year 2000 budget because the validated
    increases came too late in the fiscal year 2000 budget process, but we
    were able to include a line item for an additional dormitory in the
    Future Years Defense Plan (FYDP). The Air Force's earliest opportunity
    to address these critical facility requirements supporting increased
    officer production will be in its budget adjustments for the fiscal
    year 2001 President's Budget submission next year.
                                     kc-135
        Question. Secretary Peters, in Birmingham, Alabama, the PEMCO
    Aeroples Corporation rebuilds KC-135s for the Air Force. The Air Force
    recently began bundling its maintenance contracts in the name of
    readiness. This has hurt PEMCO's business. What is your opinion of the
    bundling process?
        Answer. I support the decision to consolidate workloads.
    Consolidation of workloads is based on military judgment of sustainment
    requirements and the Government's ability to meet operational
    requirements. Consolidation also maximizes the opportunities for
    offerors to achieve cost reductions resulting from the inherent
    economies of scale, and to achieve economies of production through
    shared backshop support, multi-skilling, and facility utilization
    across numerous workloads.
        Question. Has the readiness of the KC-135 fleet been enhanced or
    damaged by this process?
        Answer. Readiness of the KC-135 fleet, as measured by aircraft
    availability and mission capable rates, has remained relatively
    unchanged since contract award.
        Question. How do we as a country protect the vital industrial base
    which repairs and refurbishes military aircraft?
        Answer. The Air Force regularly reviews the adequacy of the
    industrial base for repair and refurbishment of the KC-135 and other
    military aircraft. The KC-135 is currently being supported through
    multiple sources of repair (Oklahoma City Air Logistics Center, Boeing,
    and PEMCO). In the current environment, three sources of depot
    maintenance provide the Air Force the needed flexibility to sustain the
    readiness of the KC-135 fleet.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                        f-22 and c-130 cost relationship
        Question. Mr. Secretary, I understand from the contractor that
    there is a direct relationship in the number of C-130's that are
    purchased and the cost of the F-22 program. One estimate indicates that
    the F-22 program might increase by $2.5 billion if the C-130 program
    were canceled. Can you explain the relationship between the cost of F-
    22 and C-130 production and verify the cost increases that have been
    mentioned?
        Answer. The exact cost to the F-22 program due to reduced C-130J
    deliveries is difficult to quantify at this time. The F-22 Engineering
    and Manufacturing Development (EMD) program is phasing down and is
    planned to complete in fiscal year 2003. Any increase in overhead rates
    resulting from changes in C-130J procurements will have minimal impact
    to the remaining EMD effort. In the production phase, there is no short
    term impact due to firm fixed price contracts for the Production
    Representative Test Vehicles (PRTV) and Lot 1 (fiscal year 1999-2000)
    buys. However, significant decreases to previously anticipated C-130J
    production volume could potentially have adverse impacts to the F-22
    program in the outyears. Although it's too soon to predict the exact
    long term impacts, the Air Force plans to buy approximately 150 C-
    130Js.
        In addition to the C-130J and F-22 programs, overhead cost at the
    Lockheed Martin, Marietta facility is impacted by other programs such
    as: C-5 avionics modifications, S-3/P-3 modifications and spares, C-
    130X modifications, C-5 re-engining and reliability improvement
    programs, and potential international commercial sales of the C-130J.
    Lockheed recently won a competition on the C-5 Avionics Modernization
    Program and is performing the work at the Marietta, Georgia facility.
    The Air Force, along with Lockheed Martin, is aggressively working to
    identify and exploit cost reduction methodologies on the F-22 program.
        The Air Force's production contract with Lockheed Martin will not
    tie the unit price of the F-22 to production rates of the C-130J.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan
                                  eaf concept
        Question. What is the department doing to ensure that Air National
    Guard and Reserve forces have the proper equipment and training needed
    to support the EAF concept?
        Answer. As the AF evolves into the EAF concept and incorporates Air
    Reserve Component (ARC) units into the 10 AEFs, they must be trained,
    properly equipped, and ready. Otherwise, they would be unable to make
    the contributions we require of them. We have taken several steps to
    ensure this occurs. First, the ARC, both the Air National Guard and Air
    Force Reserve forces, are full members in the EAF implementation
    processes. ARC representatives have been integral players throughout
    the on-going EAF planning effort. In fact, the ARC was given the
    opportunity to designate those commitments they could fill before most
    of the active force was scheduled, thus giving the ARC maximum
    flexibility and opportunity to contribute with their available forces.
    Second, while complete details are still in development, the EAF
    concept calls for each element of the Total Force to undergo ``spin-
    up'' training and readiness assessments prior to deployment. The ARC is
    being addressed through this process along side of the active forces.
    Finally, our ongoing planning, programming and budgeting activities are
    addressing equipment, readiness and training as a ``Total Force''
    solution.
                           aircraft procurement rate
        Question. Is the aircraft procurement rate at levels you'd like to
    see to facilitate getting newer aircraft to the Guard and Reserve?
        Answer. No. The fiscal year 2000 President's Budget submission
    funded procurement of 30 F-16 Block 50 aircraft at the following rates:
    fiscal year 2000=10, fiscal year 2001=0, fiscal year 2002=10, and
    fiscal year 2003=10. Available funding within the Air Force budget
    precluded purchase of aircraft in fiscal year 2001. However, to fund
    shortfalls in Space Based Infrared System (SIBRs), we were required to
    re-structure the procurement schedule to fiscal year 2000=6, fiscal
    year 2001=0, fiscal year 2002=6, fiscal year 2003=6, fiscal year
    2004=6, and fiscal year 2005=6.
        The purchase of new Block 50 aircraft, along with Active Duty force
    structure consolidations, will enable us to retire our aging ANG F-16As
    and replace them with F-16C Block 30s. The retirement of F-16As is
    purely a function of how quickly we procure new aircraft, which in
    turn, is an affordability issue for the Air Force. Acquiring new F-16s
    sooner would accelerate the conversion of Guard and Reserve units, but
    is not affordable within current approved funding levels when
    considering overall service priorities. Earlier conversion would
    require funding increases even above the Air Force's Unfunded Priority
    List request and must not be at the expense of other funded programs.
                                  eaf concept
        Question. Is there a need for faster refitting of the Reserve and
    Guard under the EAF concept?
        Answer. The EAF concept does not require faster refitting of the
    ARC. We are in an evolution to the EAF concept. Our current efforts are
    focused on filling known rotational requirements with known forces but
    are overlaying a more predictable and equitable schedule. In doing so,
    we are shaping our capabilities for better use in Small Scale
    Contingencies while maintaining our Major Theater War capabilities. At
    the same time, we are working our readiness investment strategy which
    is a ``Total Force'' strategy. It focuses on improving the capability
    of all our forces in an orderly, predictable manner. This includes the
    ability to train and become proficient on any new capabilities.
    Finally, as we work through the initial rotations, specific EAF related
    deficiencies in both the active and Air Reserve Component (ARC) forces
    will be identified and worked. A broad program of faster refitting is
    not the answer.
                               ballistic missiles
        Question. Assuming further reductions in our nuclear force
    structure, what criteria will be used to determine the mix of bomber,
    land based and sea based ballistic missiles?
        Answer. Working with U.S. Strategic Command, Joint Staff, and OSD,
    the Air Force will assist in determining the proper capabilities to
    ensure that a strong deterrent force is available to the national
    command authorities. The Air Force believes to best meet our nation's
    needs, a TRIAD of bombers, ICBMs, and SLBMs is required. The
    requirement to maintain a strong, effective and credible deterrent is
    consistent with our national security requirements. A complementary
    force of bombers, intercontinental ballistic missiles and submarines
    will provide our nation the necessary flexibility, responsiveness and
    survivability to respond to a myriad of threats.
                                      icbm
        Question. Would you characterize ICBMs as more stabilizing than
    submarine launched missiles since they present a known quantity to
    other nuclear powers?
        Answer. The Air Force believes that a TRIAD of land based ballistic
    missiles; sea-launched ballistic missiles; and, manned bombers will be
    required for the foreseeable future. Each leg of the TRIAD possesses
    stabilizing characteristics. During negotiations of the START II
    agreement, the United States supported the ``De-Mirving'' of ICBMs in
    order to enhance their stability in both peacetime and crisis. As the
    number of strategic weapons is further reduced, and ICBMs are deployed
    with single warheads, we believe they become more stabilizing (than the
    previous MIRV'd configurations) because it requires more than a 1:1
    ratio for an attack to seriously attrit or negate that force.
    Consequently, the contribution of the ICBM force, especially with
    single reentry vehicles, to stability and deterrence, increases as
    total numbers of warheads decreases.
        Question. Would you characterize the ICBM force as being more cost-
    effective than the submarine launched missile force?
        Answer. The Air Force continues to believe that a TRIAD of land-
    based ballistic missiles, sea-launched ballistic missiles, and manned
    bombers are essential for credible deterrence. While the ICBM force has
    historically been considered the most cost-effective leg of the TRIAD,
    it's difficult to substantiate this assertion without identifying
    corresponding assumptions and measures of merit. The United States
    continues to rely on all three legs of the TRIAD to provide a credible
    deterrent force. Each leg of the TRIAD has unique characteristics that
    will become even more important in a further reduced warhead
    environment. The SLBMs will continue to provide the most survivable leg
    of the TRIAD. ICBMs provide a land-based, day-to-day deterrent with a
    high cost to attack. Manned bombers will continue to provide
    flexibility necessary to meet national objectives. The total cost to
    maintain the Minuteman III force and extend the life (including the
    Guidance Replacement and Propulsion Replacement Programs) is
    approximately $5,000,000,000 in fiscal year 2001-2005.
                               ballistic missiles
        Question. Given the past criteria, do you perceive a future missile
    force structure that is predominantly land or sea based?
        Answer. Under the 3,000-3,500 accountable strategic weapons allowed
    by the START II Treaty, we would maintain a strategic deterrent force
    that included 14 Trident II SSBNs and an ICBM force of 500 Minuteman
    missiles. The Department of Defense has not yet decided upon the
    composition of a deterrent force under a 2,000-2,500 accountable
    warhead limit. The Air Force is committed to working with U.S.
    Strategic Command, the Joint Staff and OSD to determine the proper
    force mix to ensure a strong deterrent force is available to meet our
    national objectives.
                                      b-52
        Question. Do you think that operation ``Desert Fox'' is
    representative of the type of engagements the Air Force will be called
    upon in the future--will the B-52 continue to carry the brunt of the
    bomber mission for the Air Force?
        Answer. The bombers are capable of employment across the spectrum
    of conflict. Each of the bombers has unique characteristics that are
    synergistic, providing flexibility and versatility for the bomber
    force. Additionally, the roles and missions of the bomber fleet will
    become additive as the Air Force continues to upgrade the different
    bomber aircraft. The B-52, in conjunction with the B-1 and B-2, will
    provide the range of unique capabilities that the total bomber force
    provides--long range, large payload, and rapid response.
                         aircraft procurement programs
        Question. Given typical lead time for aircraft procurement
    programs, when would you expect needing to start a replacement system
    for the current bomber force?
        Answer. As outlined in the recently released U.S. Air Force White
    Paper on Long-Range Bombers, the initiation of the replacement process
    should occur no later than 2013. This will allow the fielding of a
    replacement capability by 2037.
                                     f-16s
        Question. What is the timeline for the cascade of F-16s to reach
    Guard units such as Fargo? When will they get F-16s?
        Answer. There are four ANG combat coded units flying the F-16A. The
    purchase of new Block 50 aircraft, along with Active Duty force
    structure consolidations, will enable us to begin retiring our aging
    ANG F-16As starting in fiscal year 2001, and replacing them with newer
    F-16C Block 30s. The retirement of our last F-16As is purely a function
    of how quickly we procure new F-16 Block 50 aircraft, which in turn, is
    an affordability issue for the Air Force. Acquiring new F-16s sooner
    would accelerate the conversion of Guard and Reserve units, but is not
    affordable within current approved funding levels when considering
    overall service priorities. Earlier conversion would require funding
    increases even above the Air Force's Unfunded Priority List request and
    must not be at the expense of other funded programs.
                                     ______

                  Questions Submitted to Gen. Michael E. Ryan
                   Questions Submitted by Senator Ted Stevens
                                 pilot shortage
        Question. General Ryan: I know you have said that you are about
    1,000 pilots short--but this shortage is showing up in non-flying,
    staff jobs at headquarters that are supposed to be filled by a pilot.
    Is that correct?
        Let me be sure I understand: your plane cockpits are manned at
    nearly 100 percent, right? If we are short pilots, why don't we
    continue to ramp up production of new pilots?
        Answer. Based on current retention trends, the Air Force will be
    more than 1,300 pilots short by end of fiscal year 1999. By fiscal year
    2002, that shortage will increase to between 1,500 and 2,000 pilots. In
    order to protect our combat capability, pilot shortfalls are impacting
    staff positions and we are attempting to keep our manning in our combat
    and training squadrons at mission capable levels. Active duty pilot
    production is also being increased; reaching 1,100 active duty pilots
    per year beginning fiscal year 2000.
        In light of our pilot shortage, increasing pilot production beyond
    1,100 sounds like an attractive option. However, there are significant
    limitations to how many pilots we can produce and still remain a viable
    combat force. The single biggest limitation is our ability to accept
    these newly produced pilots into a major weapon system. Currently we
    have just enough combat and combat support aircraft to accept the 1,100
    pilots per year we are producing. If we exceed 1,100 per year, the
    majority of pilots in our squadrons will be inexperienced, putting us
    in a situation of not having enough aircraft commanders or fighter
    flight leads to meet mission taskings.
                                     jassm
        Question. General Ryan, would JASSM capabilities have been useful
    to the Air Force in planning and executing Operations Desert Fox and
    Desert Thunder?
        Answer. We were able to achieve our objectives with inventoried
    weapons. However, projected JASSM capabilities of standoff and
    lethality would have enhanced the effects of these operations.
    Additionally, JASSM's projected adverse weather capability would have
    greatly added to planning flexibility.
        Question. General Ryan, are there operational scenarios where JASSM
    capabilities are not adequate to meet Air Force needs?
        Answer. JASSM is projected to be an extremely capable and effective
    weapon. Current estimates are that it will exceed most, if not all,
    operational requirements as set forth in the JASSM operational
    requirements Document (ORD). Cost is a requirement in the JASSM ORD,
    and JASSM is currently under the cost threshold set by the JROC.
        JASSM is a precision weapon ensuring much needed flexibility since
    it can be carried on both fighters and bombers. Due to a relatively low
    projected cost, we hope to procure large numbers to better arm our
    warfighters. JASSM standoff range is a key capability. It is projected
    to exceed the threshold range requirement, and current estimates
    predict JASSM standoff range will approach the objective requirement.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                                 pilot training
        Question. Will the production of 1,100 pilots a year maximize the
    current infrastructure capacity of the Air Education and Training
    Command's bases?
        Answer. It is important to remember that the 1,100 number applies
    only to the number of active duty pilots being produced at the AETC
    training locations. In addition to the active duty production, AETC is
    charged with training Air National Guard (ANG), Air Force Reserve
    Command (AFRC), and international students, as well as students from
    sister services. Further complicating the capacity issue is the fact
    that other training programs conducted at these bases also consume base
    and infrastructure capacity. Assuming these other training programs
    also stay at programmed levels, then when we reach the steady state
    production level of 1,100 active duty pilots in fiscal year 2000 we
    will be operating at the maximum sustainable capacity with the existing
    base structure.
        Question. Is this why the Introduction to Fighter Fundamentals
    training is being consolidated at Moody AFB?
        Answer. Yes, this is why the AT-38/T-38Cs are moving to Moody AFB.
    By moving these aircraft to Moody, Columbus AFB and Randolph AFB can
    increase their training capabilities to help meet the pilot production
    of 1,100. The T-6s are also being added at Moody to increase primary
    pilot training.
        Question. Is Moody AFB being converted to a training base?
        Answer. No, Moody AFB will remain under Air Combat Command.
    However, significant pilot training will be accomplished in the primary
    phase of Specialized Undergraduate Pilot Training (SUPT) and the
    Introduction to Fighter Fundamentals (IFF).
        Question. If Moody AFB is converted to a training base, will it
    stay under the command of the Air Combat Command or will it come under
    the command of the Air Education and Training Command?
        Answer. The flight training operations at Moody AFB will be a
    tenant on Moody AFB. Moody will continue under the auspices of Air
    Combat Command.
        Question. What is the Air Force's long range plan for training and
    other operations at Columbus AFB?
        Answer. The Air Force's long range plan is to continue primary and
    advanced pilot training at Columbus AFB.
        Question. What is the plan if the Air Force decides it must produce
    over 1,100 pilots a year?
        Answer. When we reach the steady state production level of 1,100
    active duty pilots in fiscal year 2000 we will be operating at the
    maximum sustainable capacity with the existing base structure.
        The current AF plan that expanded capacity enough to allow us to
    sustain the 1,100 rate (along with the expanded ANG, AFRC and other
    production requirements) involved the decision to move Introduction to
    Fighter Fundamentals (IFF) to Moody AFB, GA and to add a primary pilot
    training operation to that location. This plan does not provide
    capacity for additional growth beyond the currently programmed
    taskings.
        The fiscal constraints and unique facility and airspace
    requirements needed to support an undergraduate flying training
    operation limit the ability to expand capacity beyond the current
    levels.
        Question. What is the official basing plan and schedule for the
    JPATS (T-6A) aircraft?
        Answer. The basing plan for USAF T-6A aircraft is as follows:

    ------------------------------------------------------------------------
                                     Number of     First Aircraft Delivery
                 Base                 Aircraft               Date
    ------------------------------------------------------------------------
    Randolph AFB TX...............           30  June 1999.
    Moody AFB GA..................           39  April 2001.
    Laughlin AFB TX...............           83  January 2002.
    Vance AFB OK..................           77  November 2004.
    Columbus AFB MS...............           74  April 2006.
    Sheppard AFB TX...............           69  May 2007.
    ------------------------------------------------------------------------

                                     ______

               Questions Submitted by Senator Christopher S. Bond
                    national guard general purpose squadrons
        Question. General Ryan would you please address the issue I raised
    concerning our National Guard General Purpose squadrons, I understand
    the procedural restrictions placed upon upgrading F-15A's (they are
    limited from other than safety upgrades because they are to be
    retired--the same thing happened to the Navy A-6's) but there are A's
    out there which still have a lot of life on them, even more life than
    some of the early model F-15C's. And now, I understand that the Air
    Guard F-15A to F-15C replacement program the Air Force anticipates will
    be forced to the right extending the ``sunset'' date of the F-15A,
    because of other procurement problems. General, Mr. Secretary, Air
    Guard units are out there right now and will be for the foreseeable
    future. Is there anything we can do to help with an F-15A system
    upgrade such as accelerating the installation of Fighter to Fighter
    Data Links to bring them up to tactical parity with the rest of the Air
    Force TACAIR inventory. Specifically, do you see any way to speed up
    the process to take advantage of the experience of the Guard pilots
    when they are asked to integrate with other deployed units of the Total
    Force?
        Answer. The retirement of the ANG F-15As and Bs is predicated upon
    the fielding of the F-22A, which is on schedule for IOC in 2005. We
    currently plan to retire the F-15A/Bs and replace them with F-15 C/Ds
    from the active force as we bring the F-22A on board. All 116 F-15A/Bs
    in the ANG should be replaced by the end of 2009 provided current
    planning factors don't change. Our goal is to equip all ANG F-15
    squadrons with aircraft that have the latest modifications in radar,
    engines, electronic countermeasures and datalink.
        Over the last few years, efforts have been made to upgrade the ANG
    F-15 fleet. All ANG F-15s have been through the Multi-Staged
    Improvement Program (MSIP), an avionics and weapons improvements
    program significantly increasing the aircraft's capability. The
    fleetwide PACER TURBO modification has improved capability and
    reliability of the radar warning receiver on the aircraft.
    Additionally, 51 ANG F-15A/Bs are being modified to accept the new
    Fighter Data Link (FDL) system using fiscal year 1999 National Guard/
    Reserve Equipment Account (NGREA) funding. The remaining aircraft will
    be modified with FDL as additional funding becomes available and within
    acquisition constraints. The ``Sunset'' rule presents us with unique
    modification challenges and we are trying to balance those challenges
    based upon current F-15A/B retirement plans.
        These system upgrades directly enhance the ANG's ability to
    seamlessly integrate with deployed active units as part of the
    Expeditionary Air Force and within the Total Force team concept.
                                      c-17
        Question. Sec. Peters, Gen. Ryan, what is the Active Air Force
    requirement for C-17 lift platforms? Considering the fact that the
    National Guard performs a major portion of the lift requirements of the
    nation would you not think it would be a good idea to contemplate a
    follow-on procurement of C-17 aircraft for National Guard lift
    squadrons and do you not think that additional C-17s would be the most
    long term cost effective method of answering the problem we face
    because of an aging fleet?
        Answer. We need 135 C-17s to meet the strategic airlift capacity
    requirements identified to date associated with a dual MTW scenario and
    concurrent SOF missions. We are replacing retiring C-141s with C-17s at
    active/reserve associate wings at Charleston AFB, SC and McChord AFB,
    WA and the guard wing at Jackson ANG, MS. Beddown for aircraft beyond
    120 has not been determined. The on-going Mobility Requirements Study
    2005 (MRS-05) conducted by the Joint Staff and the Air Force's Analysis
    of Alternatives will identify any additional strategic airlift
    requirement and the most cost effective fleet (mix and size) to meet
    that requirement. The results of MRS-05, which is due for publication
    in December 1999, will help the USAF determine appropriate follow-on
    missions for ANG C-141 squadrons.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
                         air expeditionary force units
        Question. General Ryan, the Air Force continues its force
    modernization and formation of Air Expeditionary Force units. In
    keeping with the spirit of the total force concept, does this process
    include modernizing Air National Guard F-16s for future deployment with
    the Air Expeditionary Force? If so, will this modernization be
    accomplished by procuring more modern F-16 aircraft, or by installing
    precision bombing package upgrades on existing aircraft?
        Answer. In the fiscal year 2000 President's Budget, the Air Force
    requested funding to purchase precision attack targeting pods for the
    Air National Guard F-16 fighters. We are continuing modernization plans
    for upgrading the F-16s flown by the Guard and expect the Air National
    Guard fighter units to be an integral part of the Air Expeditionary
    Force and a total force partner.
        Question. General Ryan, is there an active duty Air Force KC-135
    unit leaving the force structure in the near future? If so, does the
    Air National Guard's 117th Air Refueling Wing in Birmingham have a
    chance of getting additional aircraft to ensure the Wing's
    deployability with the AEFs?
        Answer. There is no change forecast for the KC-135 force structure.
    The 117th Air Refueling Wing currently has adequate primary aircraft
    assigned (PAA) to complete its portion of the AEF.
                          global combat support system
        Question. General Ryan, please discuss the necessity for the Global
    Combat Support System and its importance in Air Force management of
    battlefield and support information technology?
        Answer. In today's business environment, success is dependent on an
    organization's ability to efficiently manage information. Similarly,
    modern warfare requires the same efficient management of information.
    The ability to get the right information to the right players at the
    right time can spell the difference between victory or defeat on the
    battlefield. This ability requires a robust, secure and adaptable
    communications and information infrastructure that can be utilized
    worldwide under numerous operational scenarios.
        The Global Combat Support System (GCSS) is one of four key pillars
    of the Joint Staff's C\4\I for the Warrior (C\4\IFTW) initiative. The
    other three pillars are the Global Command and Control System (GCCS),
    The Defense Information System Network (DISN), and the Defense
    Messaging System (DMS).
        For the Air Force portion of GCSS (GCSS-AF), the primary goal is to
    provide interoperability across all Air Force Combat Support Mission
    Applications as well as among the combat support mission applications
    of the Commanders in Chief (CINCs) and other Services. In this way
    GCSS-AF provides the information conduit through which the warfighter
    can efficiently manage the allocation and disposition of resources
    needed to maintain the necessary level and duration of operations
    required to meet military objectives.
        GCSS-AF is accomplishing this through the modernization of existing
    combat support information systems. These systems have evolved over
    many years and along separate paths to form the present Air Force
    information infrastructure. As a result, these systems are often
    characterized by increasing obsolescence, limited interoperability, and
    high maintenance costs. GCSS-AF provides an umbrella architecture for
    incrementally modernizing combat support information systems that are
    responsive during peacetime and provide the winning edge for war. This
    architecture, based on the Defense Information Infrastructure/Common
    Operating Environment (DII/COE), facilitates the efficient and robust
    intercommunication capabilities needed to meet today's military
    requirements as well as those of the next millennium.
                                     ______

                 Question Submitted by Senator Daniel K. Inouye
                                 airborne laser
        Question. There have been press reports, based on research
    conducted by the Congressional Research Service, that the Airborne
    laser might have trouble hitting targets at long ranges. General Ryan,
    can you dispel this notion?
        Answer. All modeling and simulation and testing to date indicates
    ABL will exceed its Operational Requirements Document (ORD) threshold
    range requirements. This capability will enable ABL to engage theater
    ballistic missiles at long ranges (i.e. hundreds of kilometers). It is
    also important to note the CRS report is still a draft document. As is
    often the case with draft documents, the Air Force has issues with the
    analyses supporting the report's conclusions. Air Staff and ABL program
    representatives met with CRS on both March 8, 1999 and March 18, 1999
    to go over the draft report in detail. The two issue areas the Air
    Force has with the report deal with: (1) technical concerns
    (specifically, assumptions about threat missile boost durations, use of
    a laser radar equation to estimate the performance of ABL's tracking
    subsystem, and the estimated size of ABL's laser beam on target); and
    (2) programmatics (specifically, whether CRS had the most up-to-date
    ABL schedule information upon which to base their findings and
    conclusions). The meetings were cordial and productive. As a result of
    these meetings, the Air Force has provided CRS with additional data,
    i.e., a contractor analysis of ABL's tracking subsystem and an updated
    threat missile table. This information will help expedite publication
    of CRS' final report.

                              subcommittee recess

        Senator Stevens. We will reconvene on April 14 in this room
    to hear testimony on the Army's fiscal year 2000 budget request
    for current operations.
        Thank you all very much.
        Secretary Peters. Thank you.
        General Ryan. Thank you, sir.
        [Whereupon, at 11:52 a.m., Wednesday, March 17, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    April 14.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                           WEDNESDAY, APRIL 14, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:58 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Cochran, Shelby, Hutchison,
    Inouye, Hollings, Leahy, and Dorgan.

                             DEPARTMENT OF DEFENSE

                     Ballistic Missile Defense Organization

    STATEMENT OF LT. GEN. LESTER L. LYLES, DIRECTOR

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. I do not normally do this, but because we
    have already delayed this hearing for an hour, I do want to
    proceed. I would ask members to agree that we will just keep
    our opening statements to two minutes or less and have the
    questioning round be just five minutes each, so we can try to
    get back on schedule, if we can.
        First, congratulations, General Lyles. We welcome the
    announcement that you will be promoted. And I know you will be
    an excellent vice chief of staff for the Air Force.
        General Lyles. Thank you, Mr. Chairman.
        Senator Stevens. I have already told you you have my strong
    support. And I am sure we will look for anyone that is not
    ready to give you strong support. Let us put it that way.
        General Lyles. Thank you, sir. I appreciate that. Thank
    you.
        Senator Stevens. I do think that we have had a very
    positive success in the Patriot advanced capability-3 (PAC-3)
    hit on the ballistic missile. We are looking forward to
    learning from you what has happened with theater high altitude
    area defense (THAAD). We are anxious to hear about the National
    Missile Defense (NMD) program and the test plan this year.
        I will make your statement, your full statement, a part of
    the record. And I hope you will summarize your comments, as I
    just have mine.
        Senator Hollings.

                       STATEMENT OF HON. ERNEST HOLLINGS

        Senator Hollings. Well, General, I have committed to
    Senator Stevens to support you and I am very interested in this
    particular program. I have not been able to attend all the
    hearings because of conflicts. However, I would like to find
    out where we are and where we are headed.
        Thank you, Mr. Chairman.
        General Lyles. Thank you, sir.
        Senator Stevens. Senator Leahy.

                        STATEMENT OF HON. PATRICK LEAHY

        Senator Leahy. Mr. Chairman, I also will be supporting the
    general. I do not think he has to worry too much about being
    confirmed in the Senate.
        But I do want to state just briefly, that on March 17 the
    Senate committed the country to a National Missile Defense
    system, whose technology is unproven, a cost that no one can
    estimate with certainty. It has an overwhelming vote. Only
    three Senators voted against it. I was one of them, primarily
    because I believe their collective political willpower will not
    have any effect on the daunting technology involved in getting
    these systems to work.
        I came down from a hearing we are having down the hall in
    judiciary to say that it seems to me the Pentagon has unending
    patience and unlimited resources for missile defense, in
    contrast to other military necessities that are evident today
    in the Balkans, Iraq.
        The chairman has seen briefings, as we all have, that we
    are running low on precision munitions. We have only a few of
    the cheap unmanned drones that can get below the clouds and see
    what is going on in Kosovo. There are other such shortfalls.
        This is not your fault, General, but we have to have some
    priorities here. When it comes to missile defense, I read the
    headlines. It seems like nearly every missile defense program
    is running over budget and having technical problems. April 6
    in the Washington Post says ``Navy anti-missile program
    overshoots budget by 50 percent.'' April 5, Defense Week,
    ``Pentagon criticizes $11 billion airborne laser program.''
    March 30, the Washington Post, ``Anti-missile system misses
    again, clouding larger plans.'' That was the sixth consecutive
    failure of the Army's theater high-altitude area defense
    system, that has cost taxpayers $4 billion so far.
        General, your testimony shows that our modestly improved
    version of the Patriot missile, the PAC-3, is also experiencing
    significant cost overruns. Now I have never opposed research on
    these. I have always supported that. I always hope for success.
    But we spent $50 billion on ballistic missile defenses (BMD)
    since 1983. I am concerned that we do not have a great deal to
    show for it.
        In my view, we have too many missile defense programs, and
    not enough technical progress on them. And I think that we are
    going to have to make some tough decisions here, especially if
    we are going to be asked to replace some of our conventional
    munitions and systems that are running perilously short.
        With that, Mr. Chairman, I must go to another hearing.
        Senator Stevens. Thank you very much.

                         introduction of general lyles

        We are ready to listen to you, General, and I hope you will
    give us some of the information that Senator Leahy indicates he
    would like to hear, but not all the answers he wants.
    [Laughter.]
        General Lyles. Well, thank you, Mr. Chairman.
        Senator Leahy. Maybe I did not convince him. [Laughter.]

                           statement of General Lyles

        General Lyles. Well, Mr. Chairman and members of the
    committee, it is always a pleasure to appear before you. I will
    submit my statement for the record and briefly outline a few
    key points about our missile defense programs. And I will sort
    of abbreviate my statements to allow us to get to the critical
    questions and answers.
        Mr. Chairman, I consciously refer to missile defense as our
    program, because the Congress, and this committee particularly,
    have played a crucial role in assuring that the program is
    robustly funded and is oriented towards the important goal of
    fielding systems to support the warfighter and also our nation.
        And, Mr. Chairman, your personal leadership and the
    leadership of this committee and strong support resulted in the
    $1 billion emergency supplemental for missile defense that we
    received last year. This important funding source provided a
    critical jump start to the administration's revised National
    Missile Defense program strategy. And we plan to use some other
    parts and allocate parts of that $1 billion supplemental to
    making sure we stay ahead and jump start all of our missile
    defense activities.
        So on behalf of the department and my team, Mr. Chairman, I
    want to start my remarks by giving a very sincere thank you to
    you and the committee for the support that you provided us.

                            Missile defense funding

        Those funds that have been appropriated have been
    absolutely critical to the continued development and a
    demonstration to the systems we are close to fielding today.
    For instance, our Navy Theater Wide program is progressing
    thanks to this committee, particularly in the funds you have
    provided us each year.
        And now we have fully funded that program for the first
    time in the President's budget. We now have an actual fielding
    date for our Navy Theater Wide program, and we have fully
    funded that particular effort.
        Another example, last year's Iran Missile Protection Act
    (IMPACT) 98 legislation that you provided us, Mr. Chairman,
    will allow us to fund critical tests to demonstrate whether or
    not the lower-tier systems that we have today, that we are
    planning today, will have the capability against longer range
    theater missile class threats. This could give us a hedge
    against those emerging medium range threats that we know are
    being developed by adversaries and are proliferating. And we
    could not have done these critical tests that are planned for
    the next couple years without the support of this particular
    committee.

                            National missile defense

        Mr. Chairman, to get down to specifics about our current
    President's budget, as you know, on January 20, Secretary Cohen
    announced our revised National Missile Defense program. That
    program included providing an additional $6.6 billion to the
    program through fiscal year 2005. And for the first time, Mr.
    Chairman, we put money into the program to support deployment
    of our NMD system.

                                  Expectations

        The other key element that the secretary announced was our
    expectation--and I want to emphasize the word ``expectation''--
    that the likely deployment date could be 2005 for the system.
    But we specifically are preserving the option and making sure
    we do not do anything in our testing and our programs in the
    next couple years that would prohibit us from fielding the
    system earlier, if the threats warrants and if we have made
    good technical progress. That is a mandate to my organization,
    a mandate to the program. And we are doing everything we can to
    preserve that particular option.

                      lessons from Theater missile defense

        We have incorporated some lessons learned from our theater
    missile defense (TMD) program. Senator Leahy talked about some
    of the problems we have had in our TMD programs. And we have
    learned some critical lessons that we have applied to our NMD
    system.
        We have revised our program as part of the activity we have
    done this year by adding additional ground tests, added more
    modeling and simulation, and adding critical flight tests to
    this program to make sure we can demonstrate and prove to
    ourselves that the system is technically ready and to support
    the key decisions that are going to be made about 18 months
    from now in the summer of the year 2000.
        We have done a lot of testing to date. We have done a lot
    of activities that have not received visibility, both in terms
    of software development and the battle management command,
    control, communications (BMC\3\) development, radar
    development, preparing for deployment, site-related work and
    activation and study work. We have done a lot of things to
    prepare for the eventual decision to deploy a National Missile
    Defense system.

                              Deployment decision

        The proof of all this, however, is going to come within the
    next 18 months, in the summer of 2000, when we will be making a
    decision as to whether or not we are ready to deploy a system,
    and we have demonstrated we have the ability to intercept and
    counter an intercontinental ballistic missile (ICBM)-class
    target. And the tests that are coming up this summer will be
    the first beginning activities towards making that proof and
    determining whether or not we are technically ready.
        Mr. Chairman, the combination of additional resources,
    those provided by the Congress in your supplemental and the
    money we have added from the department, have made it possible
    for us to structure a realistic NMD program and one that I am
    confident will prove that we had the capability of meeting this
    very, very daunting task.

                            Theater missile defense

        Let me switch very quickly to theater missile defense.
    Again, in the interest of time I will keep my remarks very,
    very short. I regret, as Senator Leahy talked about, that we
    have not experienced all the success that we wanted in our
    theater missile defense systems. We have had some test
    failures. We have experienced some cost growth. But let me sort
    of put those into perspective, if I can.
        During the past two years, I and others have directed the
    implementation of independent assessments of our theater
    missile defense program and our whole acquisition and
    management approach. We wanted to make sure we were doing the
    proper thing towards providing good stewardship of the money
    that you provided us and that we are managing these programs
    properly.

                              Welch panel lessons

        One of the results of those independent assessments was
    what was called the Welch Panel study, one that came up with
    the term that we call ``rush to failure'' that really sort of
    gave us a wake-up call to make sure that we are doing the
    proper things towards managing our programs.
        The key lesson learned from that particular study was that
    you cannot skip critical engineering and testing steps in order
    to try to fill an effective system quickly. And we have applied
    that lesson learned now back to all of our programs, including
    our National Missile Defense program. The result of that kind
    of mind set in the past has led to the kind of quality problems
    that we have experienced, both in terms of test failures and
    delays in our THAAD program.
        And in some cases, the emphasis on trying to rush to get a
    capability out has also led to some of the delays which
    resulted in cost increases in our program. So we put a premium
    on making sure that we are controlling the cost as much as we
    are trying to control the performance and the schedule of our
    systems.

                                  Cost control

        Mr. Chairman, I want you to know that my staff and I are
    fully committed to controlling the cost of our programs, as
    well as we are the schedule and performance. And as a result,
    we have taken some very tough, serious actions to make sure we
    have the proper management controls and we are doing the right
    thing towards addressing the management of these particular
    efforts.
        We are establishing firm cost baselines for the first time,
    based on actual experience over the last couple years. We are
    working closely with the system contractors to verify and
    validate their cost estimates. We are working with the
    contractors to identify opportunities to maintain the costs for
    development of the systems and, more importantly, initiatives
    to allow us to reduce the production and unit costs. And I will
    talk at the very end as to why I think that is very, very
    critical to us.
        And we are trying to make sure we have the proper leverage
    on the contractors, proper incentives, proper motivation for
    them in terms of award fees, profits, et cetera, to ensure they
    are working closely with us, not only in terms of performance
    and schedule, but maintaining the cost of these systems.
        This has to be a joint effort. We cannot do it alone within
    the government. There has to be close cooperation and teamwork
    of industry, with the services, with my organization and,
    indeed, with the Congress. What I really want to create, Mr.
    Chairman, is what I call a lean missile initiative and initiate
    them to make sure that we are maintaining schedules as much as
    possible, certainly maintaining performance, but getting the
    cost down to where these systems can be affordable, in addition
    to being effective.

                               PAC-3 flight test

        I am confident that the latter is going to be the case. We
    know the systems, I think, are going to be effective. One proof
    of that was a test we did on March 15 with our PAC-3 program,
    the first intercept attempt for the PAC-3 system, and the test
    was an unqualified success. Every aspect of the PAC-3 missile,
    the entire system, radar, battle management, command and
    control, and the missile itself, worked extremely well.
        There were some minor things that we learned, which is
    exactly why you want to do tests, to understand exactly the
    kind of little tweaks you have to make before you field the
    system. And I am convinced that we will have another successful
    intercept within the next 60 days. And then we can proceed into
    low rate initial production on the PAC-3 program and field that
    system within the next two years.
        Mr. Chairman, I will be happy to talk to any of you or any
    of the other members to show you the results of that PAC-3
    test. Our eyes were watering with how well it actually did work
    in that first intercept attempt.

                               THAAD flight test

        Similarly, however, we tried to conduct a THAAD flight
    test, our sixth attempt to have an intercept with the THAAD
    program on March 29. As you know, unfortunately we did not have
    a body-to-body intercept of the THAAD system. And so we
    consider it to be another failure.
        As a result of that failure and the controls we have now
    established with the contractor, the prime contractor owes the
    government roughly $50 million as a result of the penalties for
    not making an intercept. We will not be getting a check from
    the prime contractor. He will not bill us for that amount of
    effort. And we can use the resources we already have planned to
    support other activities in our missile defense programs.
        However, in looking at the results of that particular
    attempt, we found that we came very, very close. We did get
    into the critical end game, which is something we really wanted
    to do for the THAAD program. We determined that the most likely
    cause of the problems we had was the failure of one of our
    small attitude control motors, one of four critical ones, that
    we have on the THAAD system.
        We are looking at the actual cause as to what happened, but
    we think that this attitude control motor alone not functioning
    properly could account for the roughly 12 to 30 meters miss
    distance that we experienced on that particular flight test.
        We lost telemetry as a result of also having that one
    thruster failure, so we did not get all the data we really
    wanted. But with the data we do have from both the THAAD radar,
    which performed flawlessly again, and the radars out in the
    White Sands Missile Range, we were able to determine that we
    did come very, very close to having an actual intercept.
        As a result of that, I am confident that we are getting
    close and that we are going to prove very, very quickly,
    hopefully within the next 60 days, when we go back to have our
    next intercept attempt on THAAD, that the system design is
    proper and that we can proceed with the program.
        Mr. Chairman, I want again to keep my remarks somewhat
    short. So I will abbreviate the rest of my comments.

                        Missile defense interoperability

        I said earlier that I want to make sure that our systems
    are affordable, as well as being effective. One of the things
    towards being effective is to make sure we do not lose track of
    the key issue of interoperability by making sure that all of
    our systems that we are developing, all the theater systems,
    and indeed even our National Missile Defense elements, are
    interoperable.
        They all can work together with each other, provide queuing
    information to each other, and even provide fire control
    solutions in some cases for each other, particularly in the
    theater missile range. That will provide us the kind of
    interoperability we need for our theater missile defense
    systems.

                                 Cost controls

        But I come back to the issue of affordability. The emphasis
    that I place on cost controls in the program, making sure we
    get cost under control, not only in development but also
    production, is really brought home by an example that came from
    one of our warfighting commander in chiefs (CINCs) last fall.
    During a meeting of the CINCs with President Clinton and
    Secretary of Defense Cohen, General John Tillelli, who was in
    Korea, made a comment that he needs missile defense systems
    today to counter the some 600 North Korean theater ballistic
    missiles that are facing South Korea today.
        While I am confident that we can provide General Tillelli
    and all the other warfighters effective systems in terms of
    performance and do it very, very soon, what I am not confident
    about, unless we can get our arms around controls of cost, is
    that we can provide the quantities he needs to counter those
    600 systems that are facing him today. And other CINCs are
    facing similar numbers, or will be facing similar numbers, in
    other theaters.

                                 Affordability

        So cost control and affordability is a very, very big thing
    with me personally and my organization, and we are working
    diligently to ensure that when we say make missile defense a
    reality, we are not just talking about in terms of performance.
    We are talking about in terms of affordability so we can get
    the quantities we need to support our warfighters and support
    our nation's needs.

                               prepared statement

        Mr. Chairman, I am going to close my remarks at this point.
    And I will be happy to address any questions and answer
    anything that you and the other members would like to address
    to me.
        [The statement follows:]
                 Prepared Statement of Lt. Gen. Lester L. Lyles
        Good morning. Mr. Chairman and Members of the Committee, it is my
    pleasure to appear before you today to present the Department of
    Defense's fiscal year 2000 missile defense program and budget.
        The Ballistic Missile Defense Organization (BMDO) is chartered
    within the Department of Defense to manage, direct and execute the BMD
    program in order to achieve the following objectives: enable deployment
    of effective, rapidly relocatable Theater Missile Defenses to protect
    forward deployed and expeditionary U.S. armed forces as well as friends
    and allies; develop options for, and deploy when directed, an
    antiballistic missile system to defend the U.S.; demonstrate advanced
    technologies to enhance initial BMD systems; and continue basic applied
    research to develop follow-on technologies.
        BMDO is developing and demonstrating systems which integrate the
    missile defense weapons systems of each Military Service to provide a
    highly effective, total defensive capability for the joint warfighter.
    This is a concept we call joint mission area acquisition. BMDO is
    unique in this regard. We do not manage a particular weapon, or even a
    class of weapons. We function as the ``integration systems architect''
    for an entire mission area--one that cuts across all of the Services.
    BMDO directs a joint ``family of systems'' approach for theater air and
    missile defense--a multi-tier, multi-platform architecture that
    utilizes ground-, sea- and air-based missile defense systems in order
    to provide defense in depth against a wide range of ballistic and
    cruise missiles carrying conventional and unconventional warheads. This
    also entails a system of systems approach for National Missile
    Defense--a mission for which there is not a single Service solution.
    The NMD system approach will utilize Air Force space- and ground-based
    early warning and tracking sensors; Army ground-based systems to engage
    and destroy the target; and a battle management/command, control and
    communications system to tie all the system elements together. Finally,
    we are conducting a joint technology program that coordinates the
    technology needs of systems under development and invests in the
    technologies that can address those needs. In addition, we are jointly
    planning and exploring technology responses to evolving threat
    scenarios.
        In order to coordinate the Department's efforts in missile defense,
    BMDO has institutionalized three important processes. First, in order
    to assess architectural effectiveness and the performance of individual
    systems, BMDO's chief architect and engineer conducts architectural
    studies and analyses in coordination with the Joint Theater Air and
    Missile Defense Organization (JTAMDO), the Military Services and other
    key stakeholders. Second, recognizing that limited resources exist for
    missile defense programs, this same team works together to allocate
    resources to missile defense programs and projects in a manner that
    prioritizes efforts within the overall joint mission area. JTAMDO leads
    the effort to validate theater air and missile defense (TAMD)
    operational requirements through the Joint Requirements Oversight
    Council (JROC), while BMDO leads the architecture development,
    integration and systems engineering. Lastly, looking toward the future,
    BMDO's joint technology program plays a key role in ensuring we
    continue to invest in future technologies which can help us address
    future threats. This joint technology approach coordinates the
    technology needs of systems currently under development and invests in
    those technologies that can address those needs. To institutionalize
    this, BMDO's Joint Technology Board includes the Services to jointly
    plan and explore technology responses to evolving threat scenarios--and
    to leverage one another's financial investments in this area.
        The Department has made a series of substantial changes to our
    approach to missile defense and increased the resources available. In
    order to address the missile threat and fully execute the Department's
    plans for missile defense, we have structured a sound and affordable
    program for fiscal year 2000 and beyond. I would like to take a few
    moments to outline specifically the status of our programs and how we
    intend to proceed over the next few years to demonstrate and field
    these systems.
        Fiscal year 2000 Program and Budget.--The total fiscal year 2000
    budget request for the Ballistic Missile Defense Organization is $3.3
    billion. This includes $2.9 billion for RDT&E, $355.9 million for
    procurement, and $1.4 million for military construction activities.
    Combining these three budget categories, Theater Air and Missile
    Defense programs account for $1.9 billion or roughly 60 percent of the
    budget. National Missile Defense represents $836.6 million or 25
    percent of the budget. We are requesting $65.3 million for Applied
    Research and $173.7 million for Advanced Technologies, together; these
    represent about 7 percent of the budget. BMD Technical Operations
    accounts for $192 million and is about 6 percent of the budget. We will
    ask for $16.5 million for Threat and Countermeasures efforts and $36.7
    million for International Cooperative Programs. Together, these
    represent 2 percent of our overall budget. The chart that follows
    provides a break out of the fiscal year 2000 budget request by program
    element for BMDO-managed programs.

                                     [TY$M]
    ------------------------------------------------------------------------
                                                         Fiscal year--
                                                 ---------------------------
                                                      1999          2000
    ------------------------------------------------------------------------
    Theater Air and Missile Defense:
        PAC-3 EMD \1\...........................       320.842        29.141
        PAC-3 Procurement \1\...................       245.494       300.898
        Navy Area EMD...........................       242.597       268.389
        Navy Area Procurement...................        43.189        55.002
        THAAD Dem/Val...........................       433.922       527.871
        THAAD EMD...............................  ............        83.755
        THAAD Procurement.......................  ............  ............
        Navy Theater Wide Dem/Val \2\...........       364.284       329.768
        TAMD BMC/3 Procurement..................        22.759  ............
        Joint TAMD Dem/Val......................       200.133       195.722
        Joint TAMD Milcon.......................         0.331  ............
        FoS E&I.................................        95.721       141.821
        MEADS Dem/Val (ADSAM in fiscal year 1999         9.915        48.597
         and MEADS PDV in fiscal year 2000).....
    National Missile Defense:
        NMD Dem/Val \2\.........................     1,533.532       836.555
        NMD Procurement.........................  ............  ............
        NMD Milcon..............................         9.669  ............
    Support Technologies:
        Applied Research........................        97.436        65.328
        Advanced Technology Dev.................       272.82        173.704
        BPI.....................................         6.426  ............
    BMD Technical Operations:
        BMD Tech Ops............................       184.842       190.650
        BMD Tech Ops Milcon.....................  ............         1.372
    International Coop Pro......................        58.903        36.650
    Threat & Countermeasures....................        23.263        16.497
    ------------------------------------------------------------------------
    \1\ Funding shown is consistent with the February 1999 President's
      Budget request and does not include pending reprogrammings. The budget
      assumed $140 million from the fiscal year 1999 emergency supplemental
      appropriation would be applied to PAC-3. DOD plans to work with the
      Congress to address concerns about using the supplemental for PAC-3.
    \2\ Funding shown on fiscal year 1999 includes funding from the fiscal
      year 1999 Supplemental that will be executed in fiscal year 2000.

    Theater Air and Missile Defense--the Family of Systems Approach
        The Family of Systems (FoS) concept is a flexible configuration of
    highly interoperable theater air and missile defense systems capable of
    joint operations, which allows the joint force commander to tailor the
    right mix of systems and capabilities according to the situation and
    threat. This FoS must be able to counter a wide range of threats
    providing a robust defense for U.S. forward-deployed forces, our
    friends and allies. This mission cannot be accomplished with just one
    or two systems; it requires multiple systems designed to counter an
    ever-growing and diverse missile threat during all phases of flight.
    The Department's recent missile defense program review again endorsed
    this TAMD family of systems approach as the most effective means to
    provide highly effective defenses to protect our interests.
        Our analyses continue to conclude that one system cannot do it all.
    The mission of TAMD requires a layered defense allowing for multiple
    shot opportunities. The threat is so varied, and the mission demands so
    complex, that we do not currently have the technology to allow us to
    develop a single weapon system that can meet all of the mission
    requirements. In short, there is no single ``silver bullet'' in theater
    missile defense. Multiple systems working in unison greatly enhance the
    probability of destroying incoming missiles before they can hit U.S. or
    coalition forces, critical assets, or population centers.
        For these reasons, BMDO is working to acquire and integrate land-
    and sea-based systems that will effectively counter current and rapidly
    emerging theater missile threats. This strategy includes pursuing four
    major defense acquisition programs (MDAP's) within BMDO, with Service
    execution. These include the Patriot Advanced Capability-3 (PAC-3),
    Navy Area, Theater High Altitude Area Defense (THAAD) and Navy Theater
    Wide (NTW) systems. In addition, the U.S. Air Force is managing and
    executing the Airborne Laser (ABL). While this program is not funded or
    managed by my organization, the ABL remains a critical part of the FoS
    architecture. The ABL system will provide a critical boost-phase
    intercept capability in the theater of operations, thereby extending
    our layered defense approach to the earliest stages of missile flight.
        In the context of the Department's program review, let me summarize
    the status of these theater air and missile defense major defense
    acquisition programs (MDAP's) and address our direction on the
    cooperative TAMD program known as Medium Extended Air Defense System
    (MEADS).
        Lower-tier TAMD systems.--Fielding both the PAC-3 and Navy Area
    systems remains our highest near-term TAMD program priorities. Our goal
    is to press on with those activities, which will allow us to achieve
    first unit equipped (FUE) dates of fiscal year 2001 for PAC-3 and 2003
    for Navy Area. Unfortunately, these represent a slip from last year's
    projected FUE dates. I would like to explain why these programs are
    delayed and what, specifically, we plan to do in the next fiscal year
    on these programs and fact of life changes.
        Patriot Advanced Capability 3 (PAC-3).--In the case of PAC-3, the
    first intercept flight test has been delayed by about a year because of
    software and seeker integration setbacks. Moreover, a planned seeker
    characterization risk reduction flight test did not take place in
    December because of a failure of the test target. This was a target
    that we have reliably flown many times before. I am delighted to report
    that we conducted a successful seeker characterization flight test on
    March 15 at White Sands Missile Range. Objectives included the
    collection of data and analysis of the system/missile capability to
    detect, track, and close with the target, the PAC-3 missile seeker data
    in a flight environment, and the missile closed-loop homing guidance
    performance in flight. While not a specific objective of the SCF, the
    PAC-3 missile intercepted the HERA reentry vehicle target.
        Despite this successful test, flight test delays have resulted in a
    one year slip to Developmental Test & Evaluation and a comparable slip
    to Milestone III--full rate production authority. In addition, the
    fiscal year 1999 Defense Appropriation bill specifically directed that
    PAC-3 may not enter low-rate initial production until two successful
    intercept flight tests have taken place. In hindsight, I think that was
    a very prudent move. Based on these issues, the planned PAC-3 FUE is
    now targeted for fiscal year 2001.
        In addition to the delay in the program that I have already
    mentioned, the Committee should know that there is substantial cost
    growth in the PAC-3 program. This is not a good news story. It is a
    serious matter that concerns me greatly. In order to cover this cost
    growth, the Department has sent a reprogramming action to Congress to
    move $60 million of fiscal year 1999 funds from the Procurement account
    to Engineering, Manufacturing and Development (EMD). We will also need
    to work with Congress to adjust the budget in fiscal year 2000 to
    ensure the program remains on track.
        I appreciate that such transactions do not increase one's
    confidence that the program is well-executed. But, I want to make
    certain that we are in the best position to field PAC-3 as soon as
    possible. I regret that we are in the position of either covering this
    cost-growth at this time or accepting further delays in fielding the
    system. These resources are absolutely necessary for us to keep PAC-3
    on track.
        In concert with our Army executing agent, I have commissioned a
    comprehensive review of the entire PAC-3 program. Additionally, we have
    asked the Defense Contracting Management Command (DCMC) and the Defense
    Contract Auditing Agency (DCAA) for assistance. We are examining all
    aspects of cost growth, technical and program management, and the
    fundamental assumptions behind the schedules that the contractor has
    proposed. I have also requested a team of senior-level acquisition
    leaders--to include retired general officers--for their assessment of
    the program. Based upon my initial findings, I have already reviewed
    some initiatives aimed at reducing the unit cost of these missiles.
    While I am very concerned about the cost aspects of the program, I
    cannot ignore the need for a realistic schedule, performance and timely
    deployment for the warfighter. I have met with the prime contractor at
    the CEO level and have expressed my concern about the program and
    desire for corporate commitment to a realistic program baseline, a
    realistic schedule and real cost-reduction efforts. This should include
    cost-sharing arrangements to reduce Government liability. I am
    committed to coming back to the Committee and reporting on our progress
    before you complete action on the Defense Appropriations Bill.
        Ultimately, I want to reduce the unit costs of PAC-3 so we can
    procure more inventory for the warfighter with the same level of
    funding. This must always be our bottom line--more inventory and
    defensive protection within the budget allocated.
        Navy Area.--The Navy Area program builds upon the legacy of success
    found in the AEGIS program. This sea-based missile defense capability
    consists of modifications to the AEGIS combat systems and the SPY-1
    radar to enable the ship to detect, track and engage theater ballistic
    missiles using a modified Standard missile. There are over 50 AEGIS
    destroyers and cruisers, which will eventually constitute a fleet of
    forward deployed, multi-mission platforms--including theater missile
    defense. The Navy Area program is currently in the engineering and
    manufacturing development phase. We have successfully developed and
    demonstrated this system--including a successful series of flight
    tests. However, the program's progress has been slowed by the Navy's
    AEGIS Weapon System (AWS) Baseline 6 Phase III software development--
    not missile defense development issues. This has resulted in an
    eighteen month slip to ten developmental/operational assessment tests
    that were scheduled to occur in fiscal years 1999 to 2000. This slip
    has caused a six month delay to initial EMD testing and a one year
    delay in the FUE status for Navy Area. BMDO and the Navy are currently
    working to address an emerging cost-growth issue for the EMD phase of
    the Navy Area program. We will attempt to work this issue inside the
    Department during the Summer budget cycle. We are requesting $268.389
    million in EMD and $55.002 million in procurement funds for Navy Area
    in fiscal year 2000.
        In light of the emerging missile threat, we are endeavoring to
    provide a capability to the fleet as early as possible. Our plan
    includes providing a User Operational Evaluation System (UOES) that we
    call ``Linebacker'' for fleet use. ``Linebacker'' will be a single
    mission ship capable of performing TBMD or Aegis multiple missions. Two
    AEGIS cruisers, the U.S.S. Port Royal and the U.S.S. Lake Erie, are at
    sea now providing critical feedback to influence the tactical design
    improvements and modifications to the AEGIS combat system. They will
    conduct a variety of at-sea tests, develop core doctrine and tactics,
    and serve as a focal point for getting our theater missile defense
    capability to sea. In a contingency, the warfighting CINC's can call
    upon this Linebacker capability. I believe this is the most prudent
    approach to fielding our lower-tier naval TAMD capability as soon as
    possible.
        Upper-tier TAMD Strategy.--We have revised our upper-tier strategy
    because we have found ourselves in a very tight spot. The medium-range
    ballistic missile threat is emerging very rapidly. More countries are
    acquiring ballistic missiles with ranges up to 1,000 kilometers, and
    more importantly, with ranges between 1,000 and 1,300 kilometers. North
    Korea has developed the No Dong-1 missile. Last July, Iran conducted a
    partially successful flight test of its Shahab-3 missile. With a range
    of 1,300 kilometers, the Shahab-3 significantly alters the military
    equation in the Middle East by giving Iran the capability to strike
    targets in Israel, Saudi Arabia and most of Turkey.
        The emergence of these missile capabilities is important because
    our upper tier systems--THAAD and Navy Theater Wide--are designed to
    specifically take on these medium-range theater-class missiles. The
    dilemma we face, however, is that we continue to have problems
    demonstrating the THAAD interceptor. Each of our six intercept test
    failures was caused by a different problem with a different missile
    component. This leads us to believe there are problems with the quality
    of the interceptor's components, but not the overall interceptor
    design.
        At the same time, Navy Theater Wide has experienced development
    problems of its own--even though it is not yet at the same level of
    testing as THAAD. In September 1997, the initial Control Test Vehicle
    flight test was unsuccessful due to a steering component failure. The
    follow-on flight test is scheduled for later this year and will use
    improved Standard Missile-3 components. The first Navy Theater Wide
    intercept attempt is currently scheduled to take place during the third
    quarter of fiscal year 2000.
        Based on a review of program performance--test results, schedule,
    cost, program risk, and projected performance--we will propose by
    December 2000, that either THAAD or Navy Theater Wide be deployed
    first. The system that is not selected will continue to be developed
    and will be fielded as soon as practicable. Therefore, instead of a
    competition, I really see this more akin to a ``leader-follower''
    approach.
        The fundamental reason why we are compelled to follow this approach
    is that the threat is rapidly expanding and we have not made
    substantial progress in demonstrating these systems. I think in this
    area--because of the pressing threat--a little ``sibling rivalry'' can
    go a long way within our family of systems.
        I realize there has been a lot of concern that we are directly
    competing the two Upper Tier systems. Some Members have pointed to
    language in the fiscal year 1999 National Defense Authorization
    Conference Report as direction that these two systems should be seen as
    ``complementary'' versus ``in competition.'' While we have referred to
    our revised TAMD upper-tier approach as a ``competitive strategy,'' we
    are not directly flying one system off against the other.
        Theater High Altitude Area Defense.--So, with the threat rapidly
    expanding and our upper-tier programs experiencing development
    setbacks, we have devised an approach that will challenge us to field
    an upper-tier system as early as possible in order to meet the threat.
    As part of this approach, we will continue to fly THAAD. The most
    recent flight test that was conducted on March 29, 1999 did not achieve
    an intercept. While we are still analyzing the data, the miss distance
    estimate is between 10 and 30 meters. We were very close and we have
    evidence that the interceptor was actively firing its divert motors to
    steer into the oncoming target missile. Although it will take some time
    to analyze the cause for the failure of the missile to intercept the
    target, we still plan to conduct four more flight tests this year. The
    cost-sharing agreement we have worked out with the prime contractor
    requires that the program achieve three flight test intercepts by the
    end of this year. The three intercepts are required for the missile and
    system to demonstrate sufficient design maturity to proceed into the
    next phase of development. The cost-sharing agreement provides that the
    contractor shall be responsible for up to $75 million of negative cost
    incentives should these intercepts not occur.
        It is important to note that the rest of the THAAD system has
    performed remarkably well during all flight tests. We have successfully
    demonstrated the THAAD ground-based radar, the launcher, and the battle
    management, command, control and communications system. Overall, the
    THAAD system has performed well, but the critical element--the
    interceptor--still needs to demonstrate its technical maturity. The
    Department has made the right decision by continuing to fly the THAAD
    interceptor. We must get the missile in the critical ``end game'' and
    learn from that vital test experience. I am confident that the THAAD
    team can shake out all the various ``bugs in the system'' and THAAD
    will successfully intercept its target later this year.
        I would like to note that Lockheed Martin's senior leadership has
    demonstrated to me that it is fully committed to the success of the
    THAAD program and that it has devoted the resources necessary to ensure
    success. I believe the cost-sharing plan that we have agreed to is a
    clear indication of the contractor's commitment to the success of the
    program. I continue to meet frequently with their leadership and remain
    very impressed with the quality of the people they have working on this
    program. They clearly have put the ``A plus'' team on the program. In
    light of this and the considerable progress I have observed over the
    last year, I am confident that the program will successfully engage its
    target during the upcoming flight tests.
        If the next flight test, however, should fail to fully meet its
    objectives and successfully engage and intercept the target, I hope the
    Congress will recognize that this remains a program in the
    demonstration/validation phase. This is the phase when we want to learn
    from our mistakes and failures. This is the phase when we can still fix
    the system and have it properly aligned for acquisition. I confess that
    no one is more frustrated with our progress to date than me, but we
    need to be patient and to work the ``bugs out of the system.'' THAAD is
    a critical element of our family of systems. We need to successfully
    develop, demonstrate and field a ground-based upper-tier system.
        Navy Theater Wide.--The Department is following the Congress'
    recommendation that we allocate the full funding required to make Navy
    Theater Wide an acquisition program. In fiscal year 2000, we will
    request $329.768 million for Navy Theater Wide. Over fiscal years 1999-
    2001, we will increase Navy Theater Wide funding by about $500 million,
    including funds added by Congress. This increased level of funding will
    allow the Navy Theater Wide system to conduct ground and flight tests
    to demonstrate its capabilities. The Navy Theater Wide AEGIS-LEAP
    Intercept Program now in progress is a series of progressively more
    challenging flight tests culminating in a demonstration of the Navy's
    ability to hit a ballistic missile target above the atmosphere. A
    Control Test Vehicle flight test is planned for the fourth quarter of
    this fiscal year to test the flight characteristics of the SM-3
    missile. Following this, we plan to fly seven Flight Test Round shots--
    one per quarter--through the third quarter of fiscal year 2001. The
    last five flight tests will attempt to intercept their targets. The
    first intercept flight test will now take place in fiscal year 2000.
        In acquisition programs, we have seen how competition has
    encouraged technological progress, reduced system costs and provided
    the Department with more than one program option to address a threat.
    My hope is that this competitive approach to the upper-tier strategy
    will also provide a positive incentive for both the THAAD and Navy
    Theater Wide teams to succeed.
        Personally, I want both programs to successfully demonstrate their
    readiness to be fielded. Both THAAD and Navy Theater Wide will play
    vital roles in protecting our forward deployed forces, friends and
    allies against the existing and emerging theater-class missile threat.
    We need both THAAD and Navy Theater Wide in our TAMD family of systems
    architecture.
        Medium Extended Air Defense System.--As a result of resource
    constraints, especially in the years when we intend to field our core
    TAMD systems and develop and deploy NMD, the Department recognized that
    it could not afford to proceed with the Design and Development phase of
    the MEADS program as originally planned. We made this decision even
    though there remains a valid military requirement for maneuver force
    protection and a compelling case for armaments cooperation with our
    allies.
        The Department proposes using about $150 million over the next
    three fiscal years to demonstrate critical technologies--such as a fire
    control radar and mobile launcher--we need to satisfy the MEADS
    requirement. This restructured MEADS program allows us to explore less
    costly program options by leveraging developments in existing missile
    defense development programs, such as PAC-3. This approach will
    hopefully enable us to continue cooperation with our allies in this
    important mission area. As we solidify our approach with our allies, we
    intend to capitalize on the concurrent Air Directed Surface-to-Air
    Missile proof-of-principle activity as well.
        On Dr. Gansler's behalf, I met with our German and Italian partners
    in March to discuss the future of MEADS. I must report that they were
    concerned about the commitment of the United States to this program.
    However, they recognized the resource constraints we faced in missile
    defense and support our overall approach. They would, however, like for
    the Department and Congress to express our commitment to following the
    three year technology demonstration with an affordable restructured
    program to field a MEADS system. Quite frankly, they are concerned that
    the Congress will not support the program in fiscal year 2000. I know
    that both the Secretary and Deputy Secretary are looking to Dr. Gansler
    and me to work with the four defense committees to secure a stable
    future for our MEADS technology development program. I realize that
    especially in a tight budget environment $48.6 million is a very
    substantial amount of money. I hope to work with the Committee, and the
    other three defense committees, to lay out how we intend to proceed
    with this program, demonstrate that we have clear end-products for our
    investments, and also outline how our German and Italian partners will
    play in this cooperative venture.
    Joint TAMD Programs
        Several research, development, test and evaluation efforts--which
    effectively support multiple theater air and missile defense system
    development program requirements--are managed and funded under the
    Joint TAMD program. Joint TAMD requirements and supporting tasks
    include development of target missiles, collection and analysis of
    target signature and discrimination measurements, and funding of CINC-
    level planning and participation in wargaming exercises that maximize
    the consideration of theater air and missile defense requirements and
    systems capabilities.
        BMDO funds the development of the Extended Air Defense Testbed
    (EADTB), an object-based simulation and analytic tool which supports
    architecture analysis and system performance, and supports the theater
    air and missile defense community through distributed interactive
    simulation (DIS) connectivity. An important element of Joint TAMD is
    the TAMD Critical Measurements Program (TCMP), which provides tactical
    ballistic missile target signature and related discrimination data.
    Collected data from recent test flights will be used to characterize
    potential countermeasures and to develop and test algorithms designed
    to mitigate their effects. Programs that are expected to directly
    benefit from EADTB and TCMP include all theater air and missile defense
    MDAP's and the U.S. Air Force Space-based Infrared System (SBIRS). The
    Joint TAMD program element includes a requested $195.7 million in
    fiscal year 2000.
    Family of Systems Engineering and Integration
        Each member of the family of systems will contribute what it sees
    to a common picture of what is occurring in the battlespace, and then
    based on that picture, the warfighter will launch the most effective
    and efficient missile defense response. All theater air and missile
    defense systems must be capable of joint or autonomous operations. For
    example, based on cueing from a space-based sensor and target detection
    and tracking by the THAAD ground-based radar, a Navy Theater Wide
    interceptor could be launched to counter a ballistic missile threat.
    This system will be demonstrated through a series of systems
    integration tests. We are currently planning such an integration test
    for fiscal year 2002. That test will fly targets that realistically
    simulate medium-range ballistic missiles against both the PAC-3 and
    Navy Area systems. Our intent is to calibrate how well our lower-tier
    systems can protect their defended areas against these longer-range
    targets. Our fiscal year 2000 budget request for FoS E&I is $141.821
    million.
        Theater Missile Defense Challenges.--Mr. Chairman, missile defense
    is one of the most technically challenging projects the Department has
    ever undertaken. The urgency to develop and deploy a highly effective
    TAMD system grows directly out of our experience in the Gulf War. We
    recall that the largest single loss of U.S. servicemen was the result
    of the SCUD missile attack on our barracks in Dharan. And we see how
    the threat is growing in both numbers and capabilities. The Gulf War
    experience and emerging threat drove us to make TAMD a schedule-driven
    effort that has stressed the Department's most technically challenging
    projects.
        Missile defense requires the integration of many new technologies
    into a system that must perform in a very dynamic threat and operating
    environment. For instance, TAMD systems must operate largely inside the
    atmosphere at very fast speeds against targets that are traveling
    several kilometers per second. TAMD systems, such as THAAD and PAC-3,
    use hit-to-kill technologies and must literally ``hit a bullet with a
    bullet.'' This is a technical and engineering challenge--but it can be
    done.
        We have other substantial programmatic challenges as well. For
    instance, we must develop and test TAMD systems and demonstrate they
    are highly interoperable--to ensure that the whole architecture is
    greater than the sum of its parts. And finally, we must ensure these
    systems are affordable--because we want to maximize the inventory we
    can buy for the warfighter. Despite our recent program and cost
    setbacks, I believe we are up to these challenges.
        We must continue to press on with these TAMD systems because the
    threat is there and it is growing. I pledge to keep the pressure on our
    Government and industry team to deliver highly effective and affordable
    defenses as soon as possible. For the sake of our servicemen and women,
    we cannot afford to fail.
    National Missile Defense
        The Department has dedicated the funds necessary to develop and
    deploy NMD. We have worked to ensure that our NMD development program
    was properly funded. But until now, we had not budgeted funds to
    support a possible NMD deployment that could protect us against a
    limited missile attack. In fiscal year 2000, we are requesting $836.555
    million for NMD. In addition, we propose to use for NMD roughly $600
    million from last year's $1 billion emergency supplemental
    appropriation. Between fiscal years 1999 through 2005, we intend to
    allocate $10.504 billion (in then year dollars) for the NMD program.
        The Secretary's January 20, 1999, announcement acknowledged and
    affirmed the rogue nation strategic missile threat is emerging. In
    addition, he announced the dedication of an additional $6.6 billion for
    NMD during fiscal years 1999 through 2005. He also noted that the
    Administration had begun a dialogue with Russia about the development
    related to our NMD program and ABM Treaty. Lastly, he recognized that
    the program was now structured to work toward a key requirement--
    developing and demonstrating the technological readiness of our system.
        Our challenge during the next few years is to make sure all NMD
    elements work together as an integrated system and that it can do
    exactly what the mission tells us we need to do. Success on the
    critical tests and execution of the element schedules, which constitute
    the NMD program, will provide the answer to the question: are we
    technically ready to deploy a capability?
        I would like to lay out for the Committee the time line of
    programmatic decisions we will seek between now and 2005. I will also
    review our plans to develop and test the NMD system elements and to
    demonstrate the effectiveness of the integrated NMD system.
        NMD Decision Time Line.--In order to be able to deploy a ground-
    based NMD system by 2005, we have developed a detailed plan of program
    activities to ensure success. The proposed changes to the NMD program I
    will address today will ensure that we fully develop, test and
    demonstrate the system elements in an integrated fashion before we
    begin to deploy. This will significantly reduce the program risk
    associated with our previous ``3 plus 3'' program approach.
        We still plan to conduct a Deployment Readiness Review (DRR) in
    June 2000. This DRR will take place at the defense acquisition
    executive level--with full participation from all key Department of
    Defense stakeholders. The DRR will not constitute the actual decision
    to deploy the NMD system, rather it will assess whether or not the
    technical progress has been made which would allow the Administration
    to decide whether and when to deploy. At this time, the Administration
    will also assess the current state of the threat, the affordability of
    the system, and the potential impact on treaty and strategic arms
    reduction negotiations. When a decision is made to deploy, we will seek
    commitment to several key elements of the program. First, we would seek
    approval of the recommended NMD site--either in North Dakota or Alaska.
    Similarly, we would seek approval to award the construction contract
    for the selected NMD site. And finally, we would seek a decision on
    whether to pursue deployment sooner than the proposed deployment of
    2005, if it is both warranted and technologically possible.
        In fiscal year 2001, we would conduct a Defense Acquisition Board
    review to assess the status of the program. Based on program
    performance, we would seek approval to initiate upgrades to the current
    early warning radars; begin building the X-band ground-based radar and
    start integrating the battle management, command, control and
    communications into the Cheyenne Mountain complex.
        In fiscal year 2003, we would conduct a second Defense Acquisition
    Board review to seek approval to build and deploy the weapon system--
    the ground based interceptor. At this point, we would seek
    authorization to procure 61 GBI missiles--this would include deployment
    interceptors, spares and test rounds. Based on this schedule, if the
    program proceeds as we anticipate, we would deploy in late 2005.
        In order to meet this schedule, we plan to conduct a series of 19
    more flight tests between now and 2005 to demonstrate the technical
    maturity of the system. As the Committee is aware, in June 1997 and
    January 1998, we conducted two very successful seeker ``fly by'' tests
    that allowed us to demonstrate key elements of the kill vehicle--namely
    the ``eyes'' that will allow the weapon to move into the end game,
    discriminate the warhead from decoys and intercept the target. In the
    remaining 19 flight tests we will attempt to intercept the target. In
    addition, we will conduct major ground testing of hardware and
    demonstrate the integration of system elements. Let me briefly outline
    our test program.
        NMD Flight Testing.--The proof of the NMD system's maturity
    literally will be ``put to the test'' over the next 18 months in a
    demanding series of system tests. In summer 1999, the performance of
    the exoatmospheric kill vehicle will be demonstrated for the first time
    as we attempt to intercept a target. We have a lot to learn in this
    first intercept test. Later in the fall, we plan to conduct a second
    intercept flight test. Both flight tests will use the developmental
    version of the kill vehicle produced by Raytheon. We will fly these
    interceptors against threat-representative target warheads launched
    from Vandenberg AFB, California. We will launch the kill vehicle on a
    booster from the Kwajalein Missile Range in the Pacific Ocean. The
    actual intercept will take place outside the atmosphere over the
    Pacific Ocean. We intend to demonstrate the continuing development of
    our non-nuclear kill vehicle, its sensor, software and discrimination
    capabilities.
        In fiscal year 2000, we plan to conduct two full integrated system
    tests--one in each of the second and third quarters. This will allow us
    to conduct four intercept opportunities prior to the Deployment
    Readiness Review.
        Starting in fiscal year 2001, we plan to fly three intercept flight
    tests each fiscal year through 2005. This will allow us to gradually
    demonstrate the increasing sophistication of our kill vehicle and
    ultimately the integrated ground-based interceptor weapon system.
    Flight test 7, scheduled to take place in fiscal year 2001 after the
    DRR, will be the first flight test to incorporate both the
    exoatmospheric kill vehicle and the proposed operational booster.
    Flight test 13, scheduled for 2003, will fly the production-quality
    ground-based interceptor--including both the kill vehicle and booster.
        The revised program follows a very specific path to reaching the
    initial operational capability by fiscal year 2005. This path includes
    two key milestones that, in effect, postpone the need to freeze the
    interceptor design until the latest possible time dictated by lead time
    to the 2005 deployment date. The interceptor remains the least mature
    element of the NMD architecture. Therefore, by waiting to lock in the
    interceptor design until after we have tested the production-quality
    ``round,'' we add confidence to the system we will ultimately deploy.
        We have done nothing in the NMD program that would result in a
    delay as a result of the Secretary's announcement. Between now and the
    DRR in June 2000, nothing has been slowed down. In fact, we have
    actually added modeling and simulation efforts in the next two years
    that will help us develop and demonstrate the system further, as well
    as reduce flight test risks.
        To prove out the system's readiness for deployment, we have chosen
    2005 as the deployment date for NMD to avoid rushing to failure. I have
    testified on several occasions that I felt the NMD program was being
    executed along a very high risk schedule. Our recommended approach will
    reduce schedule risk by taking the time to develop, demonstrate and,
    ultimately, deploy the system in a more prudent manner. However, the
    program schedule, albeit less risky, still has significant concurrency.
    In the meantime, if the testing goes flawlessly, we may be able to
    deploy a system on an accelerated basis. However, such acceleration
    would be a very high-risk approach that we would only pursue if our
    assessment of the technological maturity and threat indicate it is
    warranted.
        Given the reality of the threat, the NMD program cannot afford to
    fail. The funds provided by the Congress in last year's Emergency
    Supplemental Appropriation, combined with the programmatic adjustments
    proposed in our current budget, enable us to deliver the defensive
    protection as soon as practicable against the emerging rogue nation
    limited threat.
        NMD Concept of Operations.--I would like to take a moment to
    explain how we envision the individual NMD system elements will operate
    when combined as a fully operational and integrated system. A hostile
    launch from a rogue state begins the engagement process. Space-based
    sensors make the initial detection and report a threat launch. DSP, and
    ultimately SBIRS high, will alert the entire system of a potential
    ballistic missile attack; cue the radars to erect ``search fences'' to
    detect the incoming missile and start the battle management centers to
    evaluate engagement options. When the threat missile crosses into the
    range of ground-based early warning radars, these radars confirm flight
    and tracking information on the target missile. Upon data confirmation,
    the battle management, command and control center directs the launch of
    a ground-based interceptor. A ground-based X-band radar will provide
    high resolution target tracking data to the interceptor in flight
    through an In-Flight Interceptor Communications System--IFICS. This
    data will be used by the interceptor to maneuver close enough to the
    target missile for the on-board kill vehicle sensor to discriminate the
    warheads from potential decoys. Sensors on the kill vehicle provide
    final, precise course corrections to enable the kill vehicle to destroy
    the target with a direct hit--or ``kinetic kill.''
        We have already made progress in demonstrating some elements of the
    system. For instance, some hardware and software upgrades to early
    warning radars have been incorporated into an existing radar and are
    being tested. A prototype X-band tracking radar has been built at the
    Kwajalein Missile Range and has successfully tracked test launch
    vehicles out of Vandenberg AFB, California, including the most recent
    Air Force operational test on February 10, 1999. Both the upgraded
    early warning radar and prototype X-band radar will support the
    intercept flight tests this year.
        The ground-based interceptor (GBI) weapon is the least mature
    element of the system and entails the highest technological development
    risks. The GBI consists of the exoatmospheric kill vehicle (EKV)
    launched by commercial-off-the-shelf boosters. As I noted earlier, we
    have already flown two successful EKV sensor flight tests. Our next 19
    flight tests will build upon these two sensor tests and demonstrate our
    kill vehicle's capabilities.
        The battle management, command, control and communications system
    links the NMD system elements to the warfighter. The BMC\3\ development
    is a continuous effort. Our capability will be increased on an
    incremental basis as we progress toward system deployment.
        While we have been developing and testing the system elements, we
    also have been proceeding vigorously on deployment planning activities.
    We have conducted fact-finding and siting studies in two potential site
    locations--North Dakota and Alaska. We have initiated site designs for
    the X-band radar and weapon sites. We will start the design of the
    BMC\3\ facilities later this year. On November 17, 1998 we published in
    the Federal Register a Notice of Intent, announcing the beginning of
    the NMD Program's Deployment Environmental Impact Analysis process. We
    held public scoping meetings in North Dakota and Alaska in which over
    650 people attended. We are in the process of preparing a draft
    Environmental Impact Statement. We plan to return to North Dakota and
    Alaska this fall to conduct public hearings on the draft Environmental
    Impact Statement. As required by law, the results of the EIS will
    represent one of many inputs into the deployment decision process.
        I believe that we have structured a prudent NMD program and we are
    moving out smartly to execute it. We have made important technical
    progress to date. While we have important challenges still ahead of us,
    I believe we can meet those challenges and field an NMD system in a
    timely manner.
    International Cooperative Programs
        Our International Cooperative program element contains two project
    areas. First, our cooperative programs with Israel. Secondly, our
    cooperative efforts with Russia. I would like to outline briefly our
    efforts in both areas.
        Cooperative Programs with Israel.--The U.S.-Israeli cooperative
    Arrow Program continues to make progress toward the deployment of a
    contingency capable Arrow Weapon System (AWS) later this year. On
    September 14, 1998, Israel conducted a successful fly-out test against
    a simulated ballistic missile target. For the first time, the Arrow II
    interceptor was controlled throughout the flight by the other system
    elements of the Arrow Weapon System; for example: the surveillance/fire
    control radar (Green Pine), fire control center (Citron Tree) and
    launcher control center (Hazel Nut Tree). The integrated AWS flight
    test was a combined Phase II/III test that served to complete the Phase
    II Arrow Continuation Experiments (ACES) program and to begin the
    integrated flight tests under the Phase III Arrow Deployability Program
    (ADP). The next ADP flight test is scheduled for this summer and will
    be an intercept test against a ballistic missile target. If successful,
    the Israeli Air Force will declare the Arrow Weapon System to be
    initially operational, as a limited contingency capability.
        Several proof-of-concept tests have been conducted toward achieving
    Arrow interoperability with U.S. theater missile defense systems. The
    Arrow Link-16 Upgrade Converter is in final development and will be
    delivered to Israel later this spring. This device is a two-way
    translator that will convert U.S. Link 16 TADIL-J formulated messages
    to the Arrow-formatted protocols, and vice-a-verse. Once the Foreign
    Military Sales case is concluded for Israel to purchase a JTIDS 2H
    terminal, with delivery anticipated in late 1999 or early 2000, Israel
    will have the full capability for Arrow to ``interoperate'' with U.S.
    TAMD systems.
        We are continuing our efforts that use both the Israeli Test Bed
    (ITB) and the Israeli Systems Architecture and Integration (ISA&I)
    analysis capabilities to assist with the deployment of the Arrow Weapon
    System. In addition, we are working with Israel in the ITB and ISA&I to
    refine procedures for combined operations between USEUCOM and the
    Israeli Air Force, and to examine future missile defense architectures
    that consider evolving regional threats. Recent contingency operations
    with Israel have benefited greatly from the work conducted bilaterally
    in the ITB and ISA&I.
        We continue to reap benefits from our cooperative missile defense
    programs with Israel. In one specific case, the Arrow seeker technology
    flown by Israel is the same seeker planned to be flown aboard THAAD.
    Similarly, the lethality mechanism used in Arrow will greatly assist us
    as we develop the Navy Area system that also employs a fragmentation
    warhead. Additionally, the experience gained with the cooperative Arrow
    flight tests will provide many benefits as we begin a very robust
    flight test program for our TAMD systems this year.
        Cooperative Programs with Russia.--The Russian-American Observatory
    Sensor (RAMOS) program has been our cooperative effort with Russia on
    space-based surveillance technology. The program was conceived as a way
    to jointly develop and test these technologies. The projected budget to
    complete this program over the next few years is about $250 million.
    After very careful scrutiny we decided that the technical merits of the
    program did not warrant that level of funding--especially in light of
    the limited resources available for technology programs that directly
    benefit the missile defense mission.
        While I appreciate the importance of cooperative programs with
    Russia, I cannot recommend continuation of the RAMOS project as it
    existed. However, in the spirit of cooperation with Russia, we are
    considering two other cooperative programs with Russia that promise
    similar benefits but at a substantially reduced cost. Both will ensure
    that the Russian scientific and technical community is engaged in a
    funded endeavor with America research interests. For instance, we will
    continue to work with several Russian research institutes (through the
    Utah State University Space Dynamics Lab) to cooperatively research
    space surveillance technologies of mutual interest. As the Committee
    recognizes, it is in our collective interest to work cooperatively with
    Russia's technical and scientific community on a wide-range of mutual
    interests. Together, we can build a bridge of technical and political
    understanding, while lessening the opportunity for rogue states to gain
    access to Russian space and missile expertise.
        I will personally ensure that we keep the Committee and interested
    Members fully informed as we proceed with our plans.
    Threat and Countermeasures Programs
        BMDO's Threat and Countermeasures program provides intelligence and
    threat support to all aspects of the missile defense program. The
    efforts covered under this program element directly support our TAMD
    and NMD acquisition programs by providing potential threat and
    countermeasures information central to the planning and execution of
    those programs. In addition, it also supports our Advanced Technology
    Development program by providing information on future threats and the
    time lines associated with their emergence. Our efforts draw heavily on
    the Intelligence Community for analysis, reports and, in some cases,
    collection of technical data in the field. It also sponsors threat work
    tied directly to the performance parameters of BMD defense systems,
    exploring possible vulnerabilities as they may be perceived by
    potential adversaries. This countermeasures-oriented work is conducted
    in a systems-engineering context by means of a newly developed threat
    risk assessment methodology that is supported by selected hardware-
    oriented experiments. For example, we work very closely with the U.S.
    Air Force Phillips Laboratory's Countermeasures Hands-on Project (CHOP)
    to assist us with such hardware-oriented efforts. Lastly, the BMDO
    Threat and Countermeasures program produces a series of carefully
    constructed and documented missile attack scenarios--including
    simulated flight trajectory information--for use in many forms of
    missile warfare engagement modeling and simulations. These include
    wargames conducted at the Joint National Test Facility in Colorado
    Springs, Colorado. We propose $16.5 million for these activities in
    fiscal year 2000.
    Ballistic Missile Defense Technical Operations
        The BMD Technical Operation program element contains the centrally-
    managed activities that provide functional expertise (i.e., systems
    engineering), analytical tools and support (i.e., the Joint National
    Test Facility) and test resources (i.e., data collection assets and
    test ranges) for theater missile defense, FoS engineering and
    integration, national missile defense and advanced technology efforts.
    Technical Operations truly provides a common, critical base of
    economical support for the entire BMD program.
        This program element specifically provides funding for the
    activities of the Chief Architect/Engineer office that is responsible
    for the joint system mission area architecture, integration,
    interoperability, and engineering. The Chief Architect/Engineer
    provides the technical foundation for program acquisition decisions at
    the architecture level and leads the BMDO process for development,
    integration, and upgrade of mission area requirements with the military
    users and systems engineers for NMD and TAMD. Within BMDO, the Chief
    Architect/Engineer leads the implementation of Department of Defense
    architecture and engineering initiatives, such as Open Systems, Value
    Engineering, and Cost as an Independent Variable (CAIV) from an
    engineering perspective.
    Advanced Technology Programs
        Advanced Technology programs underlie the success of our current
    MDAP's and remain a critical component of the overall BMD program. Our
    Advanced Technology program's objective is to enhance the effectiveness
    of our current MDAP's and reduce their costs while simultaneously
    investing in future technologies that that could serve as our nation's
    ``insurance policy'' to protect against future missile threats.
        In recent years, we have found that it has become increasingly
    difficult to maintain our technology programs in the face of competing
    demands presented by the MDAP's. Therefore, it is not as robustly
    funded as in previous years. Although our annual Advanced Technology
    request has remained constant, investment has declined from the last
    several years appropriated levels. However, the program continues to
    focus on providing some of the critical capabilities needed across the
    current missile defense architecture.
        Our Advanced Technology program has become more focused through a
    new, more formal technology planning process which we implemented last
    year. This process builds upon the technology needs identified by our
    system architect in coordination with the MDAP's based upon current
    system performance, emerging threats, and cost drivers. Working with
    the Services, we have tailored our technology programs and leveraged
    Service technology programs to meet many but not all of our highest
    priority needs. This process has helped us maximize benefit from every
    technology dollar through harmonizing the Services efforts in the areas
    of interceptors, surveillance, and ballistic missile C\4\I technology
    to provide advanced technology performance enhancing and cost reducing
    components and software, as well as critically needed phenomenology
    data, for as many MDAP's as possible with limited funding. This ensured
    these efforts benefit the Services' MDAP's as much as possible.
        I would like to provide you with some specific examples. Our
    Atmospheric Interceptor Technology program is currently developing an
    advanced interceptor seeker and a solid propellant divert and attitude
    control system to enable block upgrade capabilities for our current
    generation of endo-atmospheric interceptors. Concurrently, the AIT
    program, along with other BMDO technology programs, is developing cost
    saving components for both PAC-3 and THAAD. Our Exo-atmospheric
    Interceptor Technology program is developing an advanced active and
    passive seeker system to enable future block upgrades for our Upper
    Tier and National Missile Defense interceptors to counter a potential
    growth in the threats those systems must address.
        Finally, in our fiscal year 2000 program, we will begin to more
    robustly fund a program to develop advanced radar technologies to
    support cost reduction and performance enhancements for all of our
    ground- and sea-based radar systems. Unfortunately, because of our
    fiscal constraints, we were able to provide funding for this advanced
    radar technology program only through reducing our funding for other
    important technology programs.
        Our concern about the Advanced Technology program remains. In the
    past, we were able to fund more robust technology programs, such as
    LEAP which is now the basis for both the Navy Theater Wide and NMD
    interceptors. At the current funding levels, we are unable to fund
    programs such as this for next generation weapon systems. We are
    concerned about our ability to keep pace with the emerging threat
    through our Advanced Technology program. We continue to examine ways we
    can increase technology funding in the future.
        Space-based Laser Program.--The key focus of our Advanced
    Technology directed energy program remains the chemical Space-Based
    Laser (SBL). SBL is a high-payoff, next generation concept for a
    missile defense system. The SBL concept we envision would provide the
    Nation with a highly effective, continuous boost-phase intercept
    capability for both theater and national missile defense missions. In
    addition, SBL could perform non-missile defense missions, such as
    aerospace superiority and information dominance. Working with ground-,
    sea- and air-based missile defenses, the SBL's boost-phase intercepts
    could ``thin out'' missile attacks and reduce the burden on mid-course
    and terminal phase defenses. The SBL will be instrumental in protecting
    airfields and ports in the early stages of the conflict. Additionally,
    because of its global presence, SBL will be available to protect U.S.
    Allies and coalitions that may be threatened by inter-theater ballistic
    missiles.
        The SBL program is managed by BMDO and executed by the U.S. Air
    Force on our behalf. Both BMDO and the Air Force are requesting funds
    in the fiscal year 2000 budget for the SBL program. We are working
    jointly on this very important program, pooling resources and ensuring
    the program is following a clear direction. The BMDO budget contains
    $75 million and the Air Force budget has $63.8 million, for a combined
    request of $138.8 million. This level of funding on an annual basis
    will allow us to work on the program at a moderate pace while focusing
    our efforts on reducing the program's technical and engineering
    challenges.
        In the near term, the SBL program will focus on ground-based
    efforts to develop and demonstrate the component and subsystem
    technologies required for an operational space-based laser system.
    These efforts will lead to the design and development of an Integrated
    Flight Experiment (IFX) vehicle to be tested in space. I believe this
    approach is a prudent, moderate-risk development program.
        We recently sponsored the third Independent Review Team (IRT-3) as
    part of the ongoing assessment of technology readiness, role, and
    content for a meaningful Integrated Flight Experiment program for SBL.
    Closure
        Mr. Chairman, acquisition of joint missile defenses is not a simple
    mission. I think we all appreciate the technical challenges and
    experience the frustration of not moving as fast as we would like. We
    are now vigorously addressing the cost of these systems as well. An
    equal challenge is BMDO's continuous effort to ensure that the joint
    missile defense mission area is understood, adequately resourced and--
    working with JTAMDO and the Military Services--that the systems we are
    developing are fielded in a manner consistent with the needs of the
    joint warfighter. This means that we must develop missile defense
    systems that are effective, interoperable and affordable. My
    organization and I are addressing these issues across all our programs
    and we are working with our Executing Agents and industry partners to
    ensure we succeed.
        I would like to express my gratitude for your continued support of
    missile defense. You and the Members of this Committee have steadfastly
    supported this program and have made very difficult funding decisions
    in order to ensure our programs succeed. Over the last few years, the
    additional funds provided by Congress have helped us in many areas to
    keep these programs moving forward, ensure additional test hardware
    could be procured, and in some cases accelerated our progress. Last
    year's IMPACT legislation, which was ultimately provided to the
    Department as a supplemental appropriation, helped us to gain momentum
    to do some vitally important activities which otherwise we would not
    have been able to afford.
        Finally, last year the Congress authorized and appropriated an
    additional $1 billion for missile defense efforts. The Department looks
    forward to putting those additional resources to good use. Part of the
    billion dollars will be used to directly support our NMD program.
    Another portion will be used to posture the Navy Theater Wide program
    for acceleration.
        Mr. Chairman, on behalf of the missile defense community, I want to
    thank you and the Committee for your leadership and support.
    Successfully developing and fielding missile defenses has been a joint
    goal of ours. Since we work hard everyday to make substantial progress
    in fielding these systems, we are often too focused to remember to
    acknowledge the partnership we form and to thank you for your
    leadership, support and continued confidence in this important mission
    area. Thank you.
        I would be delighted to answer the Committee's questions.

                      prepared statement of senator inouye

        Senator Stevens. All right, General.
        We have had Vice Chairman and Senator Cochran come in.
    Gentlemen, I announced at the beginning that we kept our
    opening remarks to two minutes, and the round will be five
    minutes.
        You have not had your opening statements, Senator Inouye.
        Senator Inouye. I request that my statement be made part of
    the record.
        Senator Stevens. It will be made part of the record.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Mr. Chairman, I want to join you in welcoming our witness,
    General Lyles, here today to discuss this very important topic.
        Our forces in the field are increasingly in range of
    ballistic missiles held by adversaries. For the past 15 years
    we have been working on developing systems under the old SDI
    and now BMDO programs to counter this threat.
        None of the systems developed under either of those
    programs are yet in the field to protect our troops.
        Even today we will hear about additional delays to Patriot
    and Navy missile defense programs as well as more bad news
    about the THAAD program.
        General I know you are doing everything you can to get
    these programs under control and we sincerely appreciate your
    efforts.
        However, it is hard not to get frustrated by the continued
    delays and failures.
        General, in light of these facts, and the billions of
    dollars annually invested in missile defense, we really need to
    hear your candid views today on the status of our nation's
    missile defense programs. We need to know what we can do to
    help improve the situation.
        I look forward to hearing your responses to this most
    difficult issue.

                        Congratulations to General Lyles

        Senator Stevens. Senator Cochran.
        Senator Cochran. Mr. Chairman, thank you very much. I join
    you in greeting our witness and in congratulating him on being
    nominated for his fourth star.
        General Lyles. Thank you, Senator Cochran.
        Senator Cochran. I understand you have been nominated as
    vice chief of staff for the Air Force. So we congratulate you
    and look forward to working with you in those new capacities
    later this year.
        General Lyles. Thank you, sir. And I support that, also.
    Thank you.
        Senator Cochran. Thank you, Mr. Chairman.
        Senator Stevens. Senator Hutchison, we are limiting the
    opening statements to two minutes. Do you have an opening
    statement?
        Senator Hutchison. No, thank you, Mr. Chairman, I do not.
        Senator Stevens. Well, thank you very much. We will run the
    clock five minutes.
        General----
        Senator Dorgan. Mr. Chairman----
        Senator Stevens. Pardon me, Senator Dorgan.
        Senator Dorgan. That is all right. Let me just----
        Senator Stevens. I did not notice you. Someone else was in
    that seat the last time I looked over there.
        Senator Dorgan. Mr. Chairman, I just wanted to add my
    congratulations to General Lyles. He is providing some very
    important leadership, and I am glad he is here.
        General Lyles. Thank you, Senator Dorgan.

                               Program tradeoffs

        Senator Stevens. It is nice to see leadership recognized.
        General, I want to make sure we understand one another,
    because we have a slip of two years now in the national
    program. I think we all understand that, and I understand your
    statement saying if we can do it sooner, we will do it. But I
    do not want to see any tradeoffs now in terms of monies that we
    have to have for Kosovo or Bosnia or Iraq or wherever it is in
    the world. I hope everybody understands that. We would really
    come up and roar if that happened. You will help us prevent
    that, will you not?
        General Lyles. Certainly, Mr. Chairman. And I think in all
    the discussions I have heard, everybody is very, very sensitive
    to the need for this program, National Missile Defense, and our
    theater program. So I hope that is definitely not going to be
    something we even have to consider.

                          Space-based infrared system

        Senator Stevens. Let me just ask a few short questions. I
    hope you realize our time limitations, and I would appreciate
    it if you can keep your answers as short as the questions.
        Is the capability of the National Missile Defense system
    significantly enhanced by the addition of the space-based
    infrared system (SBIRS) high component?
        General Lyles. Mr. Chairman, it is enhanced. I would not
    use perhaps the term ``significantly.'' SBIRS high in terms of
    queuing and warning, et cetera, provides some additional
    probability of success and probability of warning and
    confidence level for our National Missile Defense system. Our
    key determinant in terms of performance enhance for NMD will
    come from the SBIRS low component.
        There is an increase, however, so I do not want to negate
    that. But it is sort of a few percentage points in terms of
    confidence.
        Senator Stevens. NMD is not the driver for SBIRS high. It
    is the other way around?
        General Lyles. No, sir, it is not. SBIRS high does provide
    some additional defended area protection for our theater
    missile systems. And again, I do not want to mislead the
    committee. It does enhance our confidence level, probability
    levels, for our National Missile Defense, but we are talking
    the difference between a confidence level like 93, 92 percent
    versus our requirement for 95 percent.
        And I have to emphasize that word ``requirement.'' The user
    requirement is 95. So we do not actually meet that 95-percent
    confidence level unless we have SBIRS high. But we are talking
    just a few percentage points difference.

                       NMD military construction funding

        Senator Stevens. My staff tells me there is an unfunded
    requirement for National Missile Defense planning and design
    funds for the year 2000 of approximately $15 million. Is that
    right? And how would this funding be used to develop and field
    the NMD?
        General Lyles. Sir, there is military construction (Milcon)
    money specifically, Mr. Chairman. And it is one of the key
    things we want to do to make sure that we are protecting the
    option to field the system as early as possible. What we would
    like to have is 100-percent design for all the different
    options and all the different sites that we are looking at.
        And in order to protect--provide that 100-percent design
    level, we need $50.7 million in 2000 in Milcon money to really
    preserve the option to be able to field the system and get to a
    site as quickly as possible.
        Senator Stevens. If that is that essential, why do you not
    reprogram part of the billion dollars and take it now and go?
        General Lyles. Actually, Mr. Chairman, what we were going
    to do is just reprogram existing research and development (R&D)
    money within NMD. Part of that is, of course, the supplemental.
    So we will probably not try to touch the actual supplemental
    amount. There are other dollars within the program that we can
    program.
        Senator Stevens. I urge you to proceed as rapidly as you
    can.
        General Lyles. Yes, sir. And we are getting great support
    from all the committees in this regard.

                       Flight testing from Kodiak, Alaska

        Senator Stevens. I want to be a little provincial. The Air
    Force had a successful launch from Kodiak this past November. I
    understand there is going to be a second test now. Could you
    tell the committee about that?
        General Lyles. Yes, sir, Mr. Chairman. We have, I think,
    now scheduled for August 15 the next series of tests coming out
    of Kodiak. We sort of euphemistically use the term small AIT,
    small atmospheric intercept technology program associated with
    the first test, because it was part of an Air Force-related
    effort.
        The next test is going to be sponsored by my own
    atmospheric advanced interceptor technology program, Big AIT.
    We have a formal name for it. And we will be testing some
    shroud deployment capabilities, in addition to other things, as
    part of that activity. So I am very pleased that the Kodiak
    facility has now been certified by the Federal Aviation
    Administration (FAA) as a space launch facility as of last
    September. And it will really support our needs in the tests
    coming up this August.
        Senator Stevens. Will it be involved in the risk reduction
    tests, do you think?
        General Lyles. To date we have used some of the activities
    coming out of Kodiak to support our risk reduction activities
    for National Missile Defense. Those risk reduction activities,
    for those who are not familiar, take advantage of the Beale
    radar, as an example, that we have on the west coast and other
    sensors to look at and check our software at battle management
    command and control for National Missile Defense.
        So firing out of Kodiak, firing out into the Pacific,
    allows us to view those with that radar, test the software we
    have. So the answer is yes, sir, it has been able to help us in
    that regard.
        Senator Stevens. Thank you.
        Senator Inouye.
        Senator Inouye. Thank you very much.
        Welcome, General Lyles, and congratulations.
        General Lyles. Thank you, Senator.

                            THAAD flight test record

        Senator Inouye. You have told us of the most recent THAAD
    failure. That is number six. We have had six failures in a row.
    In a previous testimony, you spoke of random success, the
    possibility of approving a system that has one success.
        Now with six failures, when do we say for THAAD, how many
    successful launches do we need?
        General Lyles. Senator Inouye, what we have tried to do is
    to ensure we give the THAAD program an opportunity to succeed
    without being silly about it in terms of having a success. We
    have examined all of those failures that we have had in the
    past, all the previous five and even this one. And we have
    determined that they are primarily quality problems, not
    anything that is wrong with the design.

                      THAAD flight test follow up actions

        As a result of that, we have put some stringent penalty
    clauses in our next series of tests with the existing test
    motors and test missiles that we have. We had five, roughly,
    that we had planned to test. Now one is expended. So we have
    four left. And in those four tests we have some specific
    penalty clauses that apply to the prime contractor.
        What we wanted to make sure is that we are incentivizing
    and motivating the prime contractor to solve those quality
    problems that have caused us to not have success to date. But
    we also want to make sure that we recoup, if I can use that
    term, some of the money associated with the testing. I do not
    want to fool anybody in terms of the numbers.
        We roughly expend about $25 million per test. And our
    penalty is roughly about $15 million that we get back from the
    contractor, if we are not successful. So we are not recouping
    everything. We are not recouping all of the government costs.
        I guess the bottom line answer to your question, Senator
    Inouye, is that we are trying to give us the opportunity to at
    least get through that five series of tests, four remaining
    now, to see if the system will work. And we are hoping that the
    quality problems will get behind us, and we can prove that
    THAAD is going to be successful.

                       penalty clauses for THAAD contract

        Senator Inouye. By establishing this penalty system, are
    you suggesting that you have limited faith in the outcome?
        General Lyles. What I am suggesting, sir, is that we have
    five missiles, we had five missiles left. Before we commit
    dollars to building any other test missiles and ensuring that
    we are not wasting the government's and taxpayers' dollars, we
    want to make sure we get through these tests. And we wanted to
    provide the right motivation to the contractor.
        So I personally have confidence in this particular
    contractor. I think we understand what has caused us to have
    these sort of quality failures. I know the contractor has done
    a great job over the last several months of trying to rectify
    the problems that led to this particular situation. So I was
    very disappointed that we had what may have been another
    quality problem on this most recent failure. But we have
    established this sort of mechanism to give us some protection,
    if you will.

                      flight test at Pacific Missile Range

        Senator Inouye. Are all events proceeding on track for the
    testing of the Navy's area and theater-wide programs at the
    Pacific Missile Range?
        General Lyles. Senator Inouye, they are. The Navy Area
    program, I think, as Senator Leahy mentioned before you walked
    in, has experienced some cost growth that we are now addressing
    with the Navy and with the contractor. But in terms of
    performance for the program, we have had some minor software
    delays and other things associated with the missile.
        The biggest delay to the Navy Area program has been the
    AEGIS platform itself. There have been some significant delays
    independent from our missile defense needs relative to
    integrating all the capabilities the Navy needs to have with
    the AEGIS platform. That has led to a delay in our fielding
    date for the Navy Area. But for our testing and development
    program, we are just about on track for Navy Area.
        Navy Theater Wide is still at the beginning stages of the
    program. As I mentioned in my opening statement, we have now
    fully funded the program, so it is a viable one with an actual
    fielding date. And we are looking forward to getting on with
    the test series for Navy Theater Wide starting hopefully the
    end of this calendar year.

                           Ballistic missile threats

        Senator Inouye. General, as you mentioned, a lot has been
    said about the possibility of rogue nations possessing these
    systems. But I gather from statements made by very high-ranking
    military officers that some are not too concerned. Can you
    explain why this lack of concern?
        General Lyles. Senator Inouye, I am not quite sure which
    specific statements. I can tell you that the people that I deal
    with and leadership I deal with and certainly the information
    coming to us from the Defense Intelligence Agency, I think Mr.
    Tenet, George Tenet, the Director Central Intelligence (DCI)
    from the Central Intelligence Agency (CIA), has also made
    statements about the nature of some of these emerging
    proliferating threats. And I think we are all very, very
    concerned.
        And hence, I think the strong support for adding additional
    money to our missile defense programs, like our National
    Missile Defense within the program. So I am not sure as to what
    specific statement has been made, so I cannot comment on that.
        Senator Inouye. I will share some with you later, sir.
        General Lyles. OK. Thank you.

                      PAC-3 program delay and cost growth

        Senator Inouye. On March 15, you indicated that PAC-3
    scored a direct hit, but we were also told that the program is
    suffering from delays and significant cost increases. Can you
    explain how this program, which is basically a mature
    technology, is slipping and increasing in cost?
        General Lyles. Well, Senator Inouye, the primary delay for
    the PAC-3 program were delays in getting literally to this
    first test that we just accomplished on the 15th of March. They
    were primarily software delays, software development delays. I
    think the contractor and the government mis-estimated the
    complexity and the difficulty of developing the software going
    into all the different elements of the program.
        That is now behind us, obviously. Otherwise we would not
    have been able to accomplish the flight tests that we have had.
    And so I think those problems are behind us.
        The cost growth problems are primarily associated with the
    slip in schedule. And as I mentioned in my comments, I now have
    a war, if I can use that terminology, a war on cost controls
    for all of our programs, starting with the PAC-3 program. We
    have worked very closely with the contractor.
        I met with the CEO of the prime contractor on numerous
    occasions to talk about ways that we together can keep the
    developing costs under control, but, more importantly, get the
    production costs of the systems down. And we have some
    initiatives in front of us that we will be implementing within
    the next 60 days that I think will get the costs under control
    for PAC-3.

                              PAC-3 intercept test

        Senator Inouye. And you do not consider this recent success
    a random success.
        General Lyles. No, sir, I do not. And the proof of that, I
    think, will come when we have our next test, which will be in
    the next few weeks for PAC-3.
        Senator Inouye. Thank you, General.
        General Lyles. Thank you, Senator.
        Senator Stevens. Thank you, Senator.
        Senator Hollings.

                     Is missile defense a realistic program

        Senator Hollings. Thank you, Mr. Chairman.
        General, that was a very, very impressive statement. I am
    equally impressed by our chairman's statement that we do not
    want to see any tradeoffs. Perhaps I have not kept as current
    as I could have because of conflicts and other duties here, but
    I am a long-time believer in what you are doing.
        My question is, now that you are leaving, are you still as
    strong a believer? Is this really a realistic program? I ask
    because of the questions being asked here and in other forums.
    I go back 30-some years ago, when the challenge was to bring a
    missile submerged 500 feet beneath the ocean to the surface,
    ignite it, and then guide it down range 1,500 miles to hit a
    target. That was the Polaris.
        Then, they had a fellow named Stan Burris out at Lockheed
    with what he called back planning or PERT (Projects Engineering
    Research Testing). Many at this particular level, said the
    Polaris would never work. Of course now the outcome is obvious.
        I do not mind delays. I get a little disturbed when you say
    maintaining schedule, because if we put a schedule out for
    developing a cure for cancer, we never would have made it. Is
    this a realistic program? I want to hear you describe its
    reality and, in your tenure in charge, what advancements and
    progress can you point to.

                            Theater missile defense

        General Lyles. Senator Hollings, let me take that question
    in two phases, if you do not mind. In terms of our theater
    missile defense programs, I think yes, indeed, they are. They
    are realistic, realistic in terms of the technology, realistic
    in terms of the challenges we are trying to meet.
        And if there have been any questions about the reality
    aspect, it was with hit to kill lethality methodology that we
    have embraced for all of our programs. We do have hit to kill
    on our PAC-3, and we proved in that test on March 15 that hit
    to kill is not just something that you can do on paper, that
    you can do it for real. So I am very confident for our theater
    missile defense systems that we can get the job done.

                            National missile defense

        In terms of National Missile Defense, I have that same
    confidence in terms of the technology. We do not have to invent
    anything new relative to accomplishing it. What we have to do
    is to make sure that all the different elements work together
    very, very well and that they are performing and integrating
    properly. That is the challenge that we have, and making sure
    that we have enough testing to prove that we understand that
    those things do work well.
        So the biggest challenge to us from a National Missile
    Defense perspective was the aggressive schedule that we put in
    front of us. Rightly so, given the emerging threat. But I think
    we are doing the right thing relative to the needs for our
    country.

                      quality controls on BMD contractors

        Senator Hollings. Your statement, that testing failures
    have been caused by quality rather than design problems, is
    remarkable. In departing, do you have some recommendation to
    solve this, other than to hire a new contractor? Or, perhaps
    now you now have confidence in the current contractor? In any
    case, there should be a better approach than wasting $15
    million trying a new contractor for each test. Contractors know
    how to speak convincingly, to sell. Can't you restructure the
    contract so that you require improved quality?
        General Lyles. Yes, sir, Senator Hollings. And I think if
    there is a--if I can point to one benefit--somebody may
    question me for using this adjective--one benefit to the
    failures we had on our THAAD program, it was to cause us to go
    back and reflect and look very, very carefully as to what led
    us to this particular point.
        The study that I mentioned earlier, the Welch Study,
    General Welch's study from the Institute for Defense Analyses
    (IDA), that coined the phrase ``rush to failure,'' that is not
    to say you cannot do things quickly. I am a big believer that
    we can do a lot of our things in the department very, very
    quickly. But you have to do them right up front.
        And what General Welch's study quickly and, I think,
    succinctly pointed out to us was that when you skip basic
    steps, basic engineering steps, basic integration steps, up
    front to try to save time, ultimately it is going to come back
    to haunt you.
        So we have applied the lessons learned from the Welch
    Study, the Welch Panel, now back to all of our programs. It has
    been the primary precept for where we apply the money, the $1
    billion supplemental, that we received from Congress to our
    National Missile Defense program and the key precept for how we
    re-look at all of our systems.
        In some cases that means we have added a little bit of
    schedule to some of our programs, but we have reduced the risks
    significantly. And ultimately, to me, that results in saving
    schedule and even saving dollars.
        So sort of a short answer to your question, Senator
    Hollings, I think the big lesson learned is to make sure you do
    things properly up front. If you do them properly up front, the
    rest of the things will sort of take care of themselves. And we
    did not quite do that in some of our existing programs.

                              New Director of BMDO

        Senator Hollings. Has your successor been chosen yet?
        General Lyles. Yes, sir, he has.
        Senator Hollings. Have you fully briefed him so that he
    knows this program as well as you do?
        General Lyles. He is getting fully briefed right now,
    Senator Hollings. I can tell you he comes from a major record
    of success. He was the Director for the C-17 program. This
    committee and others have dealt with the problems we have had
    in the past with C-17. He led the charge during all of the
    recovery activity on C-17. So he is very, very experienced in
    these kinds of problems.
        Senator Hollings. You stick with him, because the committee
    will want to see continuity of your outstanding leadership.
        Thank you, Mr. Chairman.
        General Lyles. Thank you, Senator.
        Senator Stevens. Thank you.
        Senator Cochran.

                    feasibility of National missile defense

        Senator Cochran. Mr. Chairman.
        General, it appears that some of the harshest critics of
    the National Missile Defense program are using the THAAD
    missile test failures as a reason to be pessimistic about the
    ability that we have technologically to develop a National
    Missile Defense system, saying that if you cannot have a
    theater system that works, how in the world are you going to
    have a National Missile Defense system that works? Is that not
    a fallacious argument? And if it is, could you tell us why it
    is?
        General Lyles. Well, Senator Cochran, obviously we have
    some of the same basic physics, if you will, involved in the
    missile defense, whether you are talking theater or National
    Missile Defense. The elements are a little bit different.
    Obviously the environment is different.
        And so I think we have been able to prove that the key
    thing, as I mentioned to Senator Hollings, of hit to kill for
    lethality is one of the key areas that people challenge. And we
    have been able to prove it for our theater system, like the
    PAC-3.
        That is not to say we do not have still a daunting
    challenge with our National Missile Defense system. We are
    operating a different regime in space, if you will, much, much
    higher, much more stringent environment. You do not have to
    deal primarily with decoys and countermeasures with theater
    systems, today anyway, that we know we will have to contend
    with in the strategic ICBM-like systems. And so we try to make
    sure that we understand what the key differences are.
        But I think we have proven that you can do it in theater,
    and you should be able to get around the key challenges in the
    national aspect, also.

                      THAAD design and technical approach

        Senator Cochran. Are you satisfied that the THAAD program
    technical approach is sound? If not, what are you doing about
    it?
        General Lyles. Senator Cochran, I am satisfied that the
    technical approach and the design approach are sound. As a
    result of all the lessons learned, I mentioned the Welch
    Study--I did not mention the independent studies in addition to
    that that we both led, from the government standpoint and the
    contractor, to really peel back the onion.
        In addition to that, Lockheed Martin, the Sunnyvale group
    that leads the THAAD program, has made some significant
    management changes, even as recently as this week. And I think
    they have also brought in the right kind of talent to make sure
    that we are managing the program properly and doing all the
    right things.
        And so I am confident that we are on the right track and
    obviously very disappointed we were not able to prove that with
    the THAAD test at the end of March.

                            SBIRS program management

        Senator Cochran. There was a question the chairman asked
    you about the SBIRS program and funding. Let me ask you this: I
    understand that the Air Force at one time had said these were
    essential satellites to have in place in order to proceed with
    this program on a certain schedule.
        And I think you had anticipated the year 2004 you would
    have that program in place. And now it is 2006. And you were
    asked about this in the authorizing committee recently, and you
    said you had really anticipated that it was going to be delayed
    two years anyway, that that was really an advertised date, not
    a real date, or something like that.
        Could you explain what you meant by that? And are we
    dealing with a lot of fictitious target dates here that we are
    going to come along and then change and say this is what was
    advertised, but we really did not mean it?
        General Lyles. No, Senator Cochran. The dates that the
    authorizing committee were addressing were the actual dates of
    the program. And my answer is, I subsequently explained in a
    personal letter to the committee and to Senator Smith. My
    answer dealt with the fact that I personally had known for
    several months that the program was about to slip two years.
    And that is the answer I tried to provide during that one
    particular hearing.
        In terms of the formal dates for the program, it was
    originally 2004. It did slip to 2006 in terms of having a
    capability on orbit. And so that is an accurate statement.

                      importance of SBIRS to BMD programs

        Senator Cochran. Well, if those satellites were so
    necessary, as they were earlier thought to be, how can you
    continue to say that you are preserving an option for earlier
    deployment of National Missile Defense, suggesting, for
    example, that if we come up with some additional Milcon money
    for construction of facilities, that we might preserve an
    earlier deployment option? How can we deploy without these
    satellites, if they were at one point said to be so essential?
        General Lyles. Let me just clarify, Senator Cochran. The
    SBIRS program has two different elements, SBIRS high and SBIRS
    low. The one you are referring to specifically is dealing with
    SBIRS high. As you well know, the defense support program (DSP)
    satellites we have today in orbit are a primary bastion of
    early warning and surveillance. We can still operate a National
    Missile Defense system and one that is fairly effective with
    just DSP.
        SBIRS high, however, provides us that additional confidence
    level that we need to meet the full user requirement. As I
    stated in an earlier question, we would like to have a 95-
    percent confidence level, which is the requirement stipulated
    to us by the user community, U.S. Space Command. We cannot get
    quite that with DSP, the current DSP constellation. You need
    SBIRS high to get to the 95-percent confidence level.
        Where we are with DSP alone and not having SBIRS high until
    2005, 2006, we will be up to 93-or 92-percent confidence level.
        Does that mean we do not have an effective system? I cannot
    quite state that. It is not as effective as we would like, but
    it certainly will be fairly effective in providing protection
    for the country.

                    resource constraints on Missile defense

        Senator Cochran. That leads to the other question I wanted
    to ask. If we add more money to the BMD appropriated accounts,
    will that help us develop and be able to deploy our systems
    sooner than staying with the administration's requested levels
    of funding?
        General Lyles. You are talking about the National Missile
    Defense?
        Senator Cochran. Yes.
        General Lyles. The additional money received to date really
    is to help reduce the risk. That is sort of a pat term, and I
    want to make sure I state accurately what I mean by that. We
    would use the additional money to provide additional testing,
    robust testing, provide additional hardware to support testing,
    to make sure we can confidently say that the system is
    technologically ready at the time we have to make a decision.
        We literally have our pedal to the metal, if I can use that
    term, in terms of all of the activities that are going on. The
    prime contractor stated, as an example, at that SASC hearing,
    the Senate Armed Services Committee hearing, that they are
    working two shifts a day, ten hours both shifts, six days a
    week, with people working on National Missile Defense.
        Can we go a little bit faster with a little bit more
    people? I cannot say we cannot. But the primary need, if we had
    additional money, would be to make sure that we are prepared in
    terms of risk that we do not have any hiccups.

                                  NMD targets

        Let me give you one example, a spare target. We have spare
    targets we are able to put into the program. But they are sort
    of a rolling spare. If we had a failure of one of our targets,
    we have a spare target in the barn, in the hangar, that we can
    then put online within another 30 to 60 days.
        With additional money, perhaps we can build targets and
    have one sitting on a launch pad ready to go in weeks, instead
    of a couple months. So that is the kind of things that we would
    do with additional funding, to give us a hedge to make sure we
    can maintain the schedule that we currently have.
        Senator Cochran. Thank you very much.
        Senator Stevens. Senator Hutchison.

                       PAC-3 low rate initial production

        Senator Hutchison. Mr. Chairman.
        General Lyles, in light of the recent success with the PAC-
    3 and what I am sure will be a success very shortly for the
    second test, how are you going to execute the low rate initial
    production this year? Do you feel that you have sufficient
    funding? And are you concerned about the layoffs in some of the
    subcontractors that have been announced for the end of the
    fiscal year, presumably because you have budget constraints?
        General Lyles. Senator Hutchison, we are concerned about
    our ability to execute low rate initial production, assuming we
    do have a success with the next flight. And I feel very
    confident, like you, that we will. We have had to reprogram or
    plan on reprogramming. There is a reprogramming action on the
    Hill right now to reprogram dollars to allow us to accommodate
    some of the cost growth we experienced in development for the
    PAC-3 and the dollars that we are reprogramming are the kinds
    of procurement dollars that would support that low rate initial
    production.
        So if we are successful and we are ready to pass into that
    next milestone of low rate initial production, we are frankly
    going to need some help from Congress to make sure we have the
    right amount of money and the right dollars to execute that.
    And we have ongoing discussions right now to make sure
    everybody is conscious of that.

                    PAC-3 low rate initial production funds

        Senator Hutchison. So you may be coming back to us in order
    to go into production for more money?
        General Lyles. We certainly have to do so in terms of
    permission. We had a mandate from the appropriations language
    last year that we could not proceed into low rate initial
    production unless we did have two successful tests. So we
    certainly need to come and tell you where we are in
    implementing and executing the tests successfully on the
    program.
        And then, because of our reprogramming action, we have had
    to initiate for fiscal year 1999, we will probably have to come
    back and ask for some additional support.

                           PAC-3 production schedule

        Senator Hutchison. When would you be able to produce
    missiles that you could use, if you have the success in the
    next few weeks?
        General Lyles. If we had the success in the next few weeks,
    the low rate initial production money will probably be needed
    by the end of this fiscal year. So certainly we will start
    production activity and start some of the subcontract activity
    later in this fiscal year, like the latter part of this summer,
    the early part of the fall.
        That is just my guesstimate. I would love to get back to
    you, Senator Hutchison, and give you the specifics. But for my
    estimation, it would be roughly that time frame. We would
    actually start producing components and subsystems.
        [The information follows:]

                      Patriot Advanced Capability (PAC-3)

        To answer more fully your questions concerning executing
    Low Rate Initial Production (LRIP) and actually producing
    missiles that we could use, let me quickly review for you the
    process for entry into LRIP. Proceeding with an LRIP contract
    requires approval by the Defense Acquisition Board (DAB). This
    senior level review panel requires that the PAC-3 missile
    program meet six exit criteria before authorizing the start of
    LRIP. To date, five of the six exit criteria have been fully
    satisfied. The only outstanding issue is achieving a successful
    intercept against a threat representative target. While the
    successful Seeker Characterization Flight on March 15, 1999
    satisfied this intercept requirement, Congressional language
    requires two successful intercepts prior to obligating
    procurement funds for missile production. The Department of
    Defense has therefore decided not to approve entry into LRIP
    until the program achieves a second intercept. The next flight
    test of the PAC-3 missile is currently scheduled for September
    16, 1999. If this flight test is successful, the DAB process
    will culminate with an approval in mid-October 1999 to begin
    LRIP, followed by award of an LRIP contract.
        Award of the contract to begin assembly of the first twenty
    PAC-3 missiles would take place in early November 1999. Long
    lead components have been procured for these twenty missiles,
    reducing the production leadtime for this lot to fourteen
    months. The first missile for this lot would be delivered in 2Q
    fiscal year 2001. First unit equipped will occur with the
    delivery of the sixteenth missile in 4Q fiscal year 2001.

                       funding impact on PAC-3 production

        Senator Hutchison. And you are not worried about losing
    some of your experienced people toward the end of this fiscal
    year in layoffs or losing them for good. Is that going to hurt
    you in production?
        General Lyles. Senator Hutchison, I am worried about that.
    And we are trying to work with the contractor, the prime
    contractor, to see if there is some work arounds. There is some
    specific areas.
        One specific subcontractor, who is obviously in your state,
    but in a territory of Representative Turner, we are trying to
    work with the prime contractor to see if there are some ways
    that they could help protect that workforce until we can
    proceed and be able to get additional money so we can start
    producing hardware. And I owe him a call today to talk about
    that particular initiative. We are concerned. Yes, ma'am.

                           MEADS program restructure

        Senator Hutchison. Let me ask you, it is my understanding
    that you are looking at restructuring the medium extended air
    defense system (MEADS) program and that you may have a mobile
    follow-on for the PAC-3. And I just wanted to ask you, if you
    do that, will it help alleviate some of the cost pressures that
    you are looking at? Or is cost a factor?
        General Lyles. Two answers to that, Senator Hutchison. In
    terms of the MEADS itself, we restructured the MEADS program in
    part because of the issue of affordability. We have always been
    concerned within the department that the MEADS program we were
    originally embarking upon was going to cost more than the
    original estimates that some of our--that our two allies,
    Germany and Italy, had estimated for the program.
        And we thought there was a better way in allowing us to use
    the existing PAC-3 as the missile for the MEADS mission. PAC-3
    meets most of the requirements, if not 90 percent of the
    requirements, for what we wanted in a MEADS missile. And we
    thought it made good sense to do that so we do not have to go
    through the expense of developing a whole new missile and
    keeping the cost down for MEADS.
        Again, as a result of affordability, we were only able to
    put in $150 million over the next three years to support
    addressing the mobile requirements that we have for maneuver
    force protection and the kind of requirements that our European
    partners also have.
        Working with that $150 million in a couple key areas and
    having a PAC-3 missile, we think we have set the stage for
    having a mobile sort of capability in the future that will be
    based on the PAC-3 missile.
        Having the additional quantities for PAC-3 will
    automatically give us an opportunity to get the costs down for
    the PAC-3 system, also. So there is some synergistic benefit
    there.

                              deployment of PAC-3

        Senator Hutchison. You know, when do you think we can have
    PAC-3s in real action, if we needed them?
        General Lyles. Senator Hutchison, our current----
        Senator Hutchison. If success occurs in the next couple of
    weeks on the second test?
        General Lyles. Our current plan is to have a fielding date
    of first unit equip date in 2001. I would like to make that as
    early in fiscal year 2001 as we possibly can. And obviously we
    are going to look at opportunities to see if we can make that
    any earlier. But our advertised date in our schedule is fiscal
    year 2001, two years from now.
        Senator Hutchison. Year and a half.
        General Lyles. Thank you.
        Senator Hutchison. Thank you.
        Senator Stevens. Senator Dorgan.

                             Emergency supplemental

        Senator Dorgan. Mr. Chairman, thank you. General, I have a
    slightly different take on some of this. I have certainly
    supported research on these issues and do support research and
    would support deployment when a system is evidently workable
    that provides a reasonable defense against a credible threat.
        But I worry a bit about throwing money at things as well.
    And I worry a little about throwing money at this missile
    defense issue. Last fall, you were provided, DOD was provided,
    $1 billion in the emergency supplemental, $1 billion. And I
    think you have not been able to find a place to put that $1
    billion for missile defense, have you?
        General Lyles. We have. Not----
        Senator Dorgan. All of the $1 billion?
        General Lyles. Not all of the $1 billion, Senator Dorgan.
    The bulk of it, some roughly $600 million, initially and plan
    $230 million. So we are talking roughly $830 million will be
    applied to the National Missile Defense program. That is part
    of our strategy for parts of that.
        The remaining money, obviously, we are looking at other
    good initiatives to meet the mandate from Congress that we jump
    start the programs, reward success, et cetera. And we have a
    large candidate list. I have a large candidate list and will be
    consulting with the Congress relative to how we spend the other
    $140 million, $160 million.

                  Emergency supplemental impact on deployment

        Senator Dorgan. But that $1 billion will not enhance a
    deployment date, as I understand your testimony today.
        General Lyles. It would enhance it from the standpoint of
    trying to protect it. And I am not trying to be cute about that
    answer, Senator Dorgan. As I stated earlier to Senator
    Hollings, we want to make sure that we have the right kind of
    testing, that we have the robust testing, to ensure that we
    have a system that is technically ready to proceed into
    deployment.
        And so we have used that money to enhance primarily all the
    testing and backup activities we need for developing this
    system.

                         NMD system technical readiness

        Senator Dorgan. No such system now exists, one that is
    technically ready to proceed, is that correct?
        General Lyles. For National Missile Defense, no, sir, not
    yet.

                      Missile threat to the United States

        Senator Dorgan. And let me ask a question about the threat,
    because we are spending a lot of money building to respond to a
    threat. If there were not a threat, we would not be trying to
    build a system to respond.
        On an unclassified basis, what is the threat that you are
    building a system to respond to?
        General Lyles. The National Missile Defense program mandate
    is to make sure we are providing the capability to encounter a
    threat to the United States from rogue nations, obviously be
    that North Korean, Iran, Iraq, Libya, nations of that type,
    from rogue nations, proliferation of missile systems.
        We know what the North Koreans did last August, the end of
    last August, their three-stage--what they were able to fire.
    That system alone, though it would have a very small payload
    capability, but that system alone, if it were deployed, or if
    it is deployed, has some capability of reaching the further
    western-most parts of Hawaii and parts of Alaska. So we know
    there is an emerging threat there, and we know that it is
    growing.
        We also--excuse me, sir, if you do not mind. We also, as
    part of our program have a mandate to protect against an
    unauthorized or accidental launch from an existing nuclear
    power.

                         more advanced Missile threats

        Senator Dorgan. Would a system like this, for example,
    defeat the launch of one aggressively--I do not know whether I
    should use missile. Use an SS-18 hypothetically, but an
    intercontinental ballistic missile loaded with ten warheads,
    would this system defeat that type of missile?
        General Lyles. When we get the system deployed and in the
    inventory, in the field, with sufficient quantities, there
    should be a capability to address that. And I say that in
    part--I do not want to get into any classified activities in
    this open hearing. Our design-to capability, what we are
    designing to, are the kinds of threats represented by some of
    the systems that you mentioned. And again, sir, I cannot get
    into the specifics here. But I would be very happy to come
    explain that to you.

                     defense against limited Missile attack

        Senator Dorgan. I appreciate that. And the reason I ask the
    question is this: The importance of START II and the reduction
    of systems by, for example, the Russians, taking down some of
    their missiles that are the multiple independently targetable
    reentry vehicle (MIRV'ed) is critically important in the
    context of the kind of system we are building, because the
    system we are building--you were describing who and I was
    really asking what. The who is important as well, but the what
    I think is the opportunity for a nation to get a hold of one or
    two ICBMs.
        Frankly, it is more likely they would get a hold of a
    cruise missile, I would think. But let us assume that they
    would get a hold of an ICBM, they are certainly testing them,
    and launch that ICBM at this country.
        You are building a system that can go up and intercept a
    few of them. Is that not a good characterization of the system
    you are building?
        General Lyles. That is accurate, yes, sir.

                      defend against more complex Threats

        Senator Dorgan. But not a system that could protect this
    country against a commander in a submarine that has an
    authorized launch of all of his tubes.
        General Lyles. Absolutely not, Senator Dorgan. That is not
    our specific requirement for this limited--and I probably
    should have used that adjective in front of it. This is a
    limited NMD system that we are developing.

                         NMD and arms control interests

        Senator Dorgan. And perhaps not a system that would defeat
    one aggressively MIRV'ed missile by a determined adversary, at
    least as I understand the system. And that brings me to the
    point that what we do here in creating a defensive system
    should not in any way be allowed to jeopardize our arms control
    agreements because part of protecting this country is also to
    bring down the number of MIRV missiles in arsenals around the
    world, particularly, of course, in the Russian arsenal.
        So I want to make the point that I fully support work on
    these issues. Today we have news reports of another test of
    another ICBM. I note the test of Korea, the tests of Iran. I
    understand the potential threat.
        The threat clock goes from a suitcase bomb at a dock in New
    York in the trunk of a rusty car to a deadly vial of biologic
    agents someplace to a dozen things that potential terrorist
    countries would want to do, including at the end scale of this
    threat achieve some sort of ICBM, tip it with a nuclear weapon,
    and launch it at this country.
        I support the research necessary to try to find a way to
    defeat that. At the same time, it is critically important for
    us to support, as aggressively as is possible, the opportunity
    to bring down the threat by destroying potential adversaries'
    weapons before they are ever launched through arms control
    reductions. And the destruction of delivery systems and
    warheads has been enormously impressive, as we have gone along.
        General Lyles. Yes, sir.

                       Threat reduction via START process

        Senator Dorgan. I do not want what you do or what DOD does
    or what Congress demands you do to in any way threaten or
    thwart the opportunity for arms reductions from the arms
    control side.
        General Lyles. Understand, Senator.

                           technical challenge of BMD

        Senator Dorgan. But having said all that, now let me just
    turn back to say I think that the work you are doing is
    challenging and interesting. I know that you have experienced
    failures.
        But I cannot think of anyone that is doing the kind of
    technological efforts you are doing, trying to hit a bullet
    with a bullet, that would not encounter failures.
        My expectation is the testing of our advanced jet fighters
    and other things, early on you did have the same kind of record
    of failure. You are building towards success.
        General Lyles. Exactly. Yes, sir.
        Senator Dorgan. Let me thank you for your work and say that
    I continue to support your research. I do not want us, however,
    just to throw money at this whole system just to believe that
    somehow some of it will stick and will be helpful.
        General Lyles. Understand.
        Senator Dorgan. Do this in a thoughtful way to respond to a
    real threat.
        General Lyles. Thank you, Senator.
        Senator Dorgan. General, thank you.
        General Lyles. Thank you, sir.
        Senator Stevens. Senator Shelby.

                      prepared statement of Senator Shelby

        Senator Shelby. Mr. Chairman, I ask that my opening
    statement be made part of the record in this fashion.
        Senator Stevens. Without objection.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        Good morning General Lyles and thank you for appearing here
    today. I would like to take a moment to congratulate you on
    your selection as the new Vice Chief of Staff of the Air Force.
    I know that I and my colleagues wish you the best in your new
    position. As that Air Force recruiting ad says, ``Aim High!''
    Well General, you certainly have ``Aimed High,'' and I know
    that this Committee will continue to support you and our
    personnel who wear the uniform of the United States Air Force.
    Good luck to you General.
        Today we are here to discuss an issue that is not only
    important to me, it is important to the members of this body
    and to the American people. It is no secret that I have
    adamantly supported the efforts of this nation to expediently
    deploy and operate ballistic missile defense systems. We must
    continue these efforts. The threat from rouge nations and
    others is real and growing. Our efforts have met with successes
    and yes, some setbacks. However, we must keep test failures in
    perspective. The heritage of this nation is rich with high
    technology programs which overcame test failures. These
    programs went on to become the backbone of America's defense
    and space arsenals.
        Additionally, our efforts must include investment in
    advanced support technology. This is technology that will
    ensure that a deployed ballistic missile defensive system
    remains effective against future unknown threats.
        General Lyles, I have a few questions regarding these
    issues and I look forward to hearing your responses. Again,
    welcome sir.

        Senator Shelby. General Lyles, I want to congratulate you
    on your selection to be the vice chief of staff.
        General Lyles. Thank you, Senator Shelby.
        Senator Shelby. That is a signal accomplishment, one you
    have earned and one I have total confidence that you will excel
    in.
        General Lyles. Thank you, sir.

                              BMD technology base

        Senator Shelby. Having said that, I am concerned to some
    extent about the technological development of ballistic missile
    defense in the budget. We know that you are moving toward
    success, or at least we have reason to believe that you are
    moving toward success I think as THAAD is concerned.
        General Lyles. Yes, sir.

                       need for robust Technology program

        Senator Shelby. I believe that you will work out the
    problems. You have testified here before that it is good
    architecture, and you start with architecture. But we have to
    consider the future, too. Senator Dorgan mentioned that, I
    think, or at least alluded to it.
        Do you share my concern that in our zeal--and we are all a
    little zealous here, for good reason, for protection--to get
    missile defense systems into the field that we may have in some
    ways short-changed the advancing technology side of the
    ballistic missile defense budget? In other words, that we may
    have begun, not totally, but begun to eat our technological
    seed corn? You know, you do not eat the crop of tomorrow. You
    save some of it.
        General Lyles. Yes, sir.

                          importance of BMD technology

        Senator Shelby. And we may be, may be, short-changing the
    advanced technology side of the ballistic missile budget. In
    other words, what percent, General--well, do you agree? Do you
    have some concerns there?
        General Lyles. Oh, I do absolutely, Senator Shelby. We
    really have sort of three missions within my organizations, I
    tell people. Obviously theater missile defense to get those
    systems out quickly, National Missile Defense to protect the
    nation, but also make sure we still have a robust technology
    program.
        Senator Stevens. Senator, would you yield just a second? I
    have to go immediately to the Library of Congress. I do want to
    congratulate you again. And I leave my trusty vice-chairman in
    charge.
        General Lyles. Thank you, Senator Stevens. Thanks for your
    support, sir.
        Senator Shelby. Go ahead, Senator Lyles--General Lyles, I
    mean. You might be one day. Who knows?
        General Lyles. That is a promotion. Thank you, sir.
    [Laughter.]
        I am very concerned about technology because in some
    respects everything that we are doing today, everything we are
    planning to do today and all of our programs are based on the
    technologies that were started 10 to 15 years ago. Someone made
    a question earlier about legacy for my successor. One of my
    strongest concerns is that a legacy for future directors of the
    Ballistic Missile Defense Organization (BMDO) or whatever it
    might be here 10 to 15 years from now may not be as good, if we
    do not have the technology on the shelf. So I am very concerned
    about that.
        You started to ask the question, Senator Shelby, about
    percentage.

                 percent of BMD budget allocated to technology

        Senator Shelby. What percent of the total ballistic missile
    defense program budget in the best cases should be allocated
    for advanced technology in order to stop the erosion, the
    future, of our technological base and returning it to a
    sufficient level in five years? You just cannot do it all at
    once.
        General Lyles. No, sir.
        Senator Shelby. You have to do it on an upward curve, do
    you not?
        General Lyles. That is correct. Roughly about--we are--
    about six percent today of our total budget goes towards
    technology, research and development and technology. That
    happens to be equal to, maybe just a little bit better, than
    the department average. So I may get challenged in terms of
    what I am about to mention to you.
        I have a strict goal within the organization that I would
    like to get that number back up to ten percent of our total
    dollars, just to make sure we do have robust technologies and
    development.
        Senator Shelby. How much money would that be?
        General Lyles. We are roughly about $300 million today.
        Senator Shelby. That doubles it, does it not?
        General Lyles. And I would like to, if not double it,
    certainly get it up significantly higher.

                        funding increase for Technology

        Senator Shelby. $50 million, $60 million, $70 million, $100
    million a year would help, would it not?
        General Lyles. It certainly could, yes, sir.
        Senator Shelby. And could be a tremendous difference in the
    future, because I know from your background, you believe
    investing in technological future is a lot of what it is all
    about, do you not?
        General Lyles. That is correct. We have made some
    improvements and increases. The joint effort that we are doing
    with the Air Force in putting more money into a space-based
    laser program, that is certainly technology for the future. But
    there are some other technology efforts that also need
    additional robust funding. So that is an area that we are
    concerned about.
        Senator Shelby. That is an area that I want to work with
    you on or your successor.
        General Lyles. Yes, sir. Thanks, Senator Shelby.
        Senator Shelby. Thank you. General Lyles, again,
    congratulations.
        General Lyles. Thank you, sir. And thank you for your
    support.
        Senator Shelby. Mr. Chairman, that is all I have.

                              Israeli Arrow system

        Senator Inouye [presiding]. Thank you very much.
        General, I have a couple more questions, if I may. Last
    year Secretary Cohen visited Israel and expressed support for
    the Arrow third battery. In the fiscal year 1998 emergency
    supplemental, we provided $45 million to start this program.
        I note that there is no additional funding for this
    program. Can you give us any reason why?
        General Lyles. Senator Inouye, we certainly support the
    cooperative efforts that we have with Israel. As you know,
    Arrow is a co-development effort that we have with them. And we
    have identified the need for roughly about $40 million, $42
    million, up to $45 million a year over the next three or four
    years in order to support helping them to procure a third
    battery of Arrow systems.
        We support the need, because of the threats, environments,
    that they are facing. But we are literally having to depend on
    additional support from the Congress every year to help us to
    do that. We did get, as you mentioned, $45 million last year.
    We were looking to see if there was additional support we could
    get, both in 1999 for perhaps through the emergency $1 billion
    supplemental part of that, and then in the subsequent years to
    help us to support them with the need to procure this third
    battery.

                             Arrow program funding

        Senator Inouye. But you are not requesting any funds.
        General Lyles. We had not requested funds certainly in 1999
    or 2000 because of the dependence, if you will, in trying to
    get support from the Congress.
        I can tell you, Senator Inouye, that is something we are
    re-looking at in terms of our future budgets, to see whether or
    not we should have a larger amount of dollars associated with
    our international support, particularly with Israel. But to
    date, we do not have anything in our current request.
        Senator Inouye. In other words, if Congress should initiate
    funding, you would not oppose it.
        General Lyles. Absolutely not.

                               NMD program policy

        Senator Inouye. And, my final question is on the National
    Missile Defense policy. As you are well aware, Senator Cochran
    and I cosponsored a measure, and the administration was
    initially not too happy with it. But, it announced a National
    Missile Defense policy and suggested a $6.6 billion
    appropriations increase.
        When we debated the matter before the Senate, two
    amendments were presented. And all of us accepted it. Does it
    mean that you support this now?
        General Lyles. Me personally? Obviously we support the
    National Missile Defense program and the initiatives we all
    have, Senator.

                      National Missile Defense Act of 1999

        Senator Inouye. The Cochran bill.
        General Lyles. I think the Cochran bill will help send a
    signal relative to particularly--if I can use an example,
    Senator Inouye, the contractor team, the president of the
    contractor team, Dr. John Peller, testified before Senator
    Smith's committee that this will help send a signal to
    particularly the contractor community that the nation is indeed
    serious about missile defense.
        Relative to us within my organization, I can tell you we
    have always been serious about it and assume that we were going
    to eventually deploy a system. So we have been working
    diligently in making sure that we are doing everything to
    support that.
        So obviously there is some concerns about the two other
    elements about deploying a system, treaty implications, which
    is what Senator Dorgan talked about, and whether or not it is
    affordable. My mandate in my organization is to make sure we
    could provide back to the decision makers a system that is
    affordable and a system that works. And then the other issues
    will have to be dealt with by the decision makers who are going
    to make the final deployment decision.

                         Additional committee questions

        Senator Inouye. I thank you very much, General, and we are
    most grateful for your very candid and very impressive
    testimony today. I hope that your organization will be able to
    provide reports of more successful flight tests as the year
    proceeds.
        And also, and I speak for the chairman and for all of us
    here, prior to the committee's markup, I hope we can get your
    final views about any budget adjustments you determine are
    necessary in order to pursue success during fiscal year 2000.
        General Lyles. Absolutely, Senator.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                   Questions Submitted by Senator Ted Stevens
                            national missile defense
        Question. I have been very concerned about the high risk and
    uncertain cost of developing a sea-based National Missile Defense.
    Secretary Danzig seemed to agree, suggesting it was premature to look
    at sea-based NMD until the Navy Area and Theater Wide programs have
    demonstrated results. Would you agree with these perspectives?
        Answer. I agree with Secretary Danzig that it is premature at this
    time to make any final decisions regarding sea-based NMD until
    significant success is achieved in the Navy Theater Wide (NTW) test
    program. Currently, the NTW Block I system (a configuration less
    capable than the one analyzed in the June 1998 report to Congress,
    ``Utility of Sea-based Assets to NMD'') has been assessed as a high
    technical risk program (although the Navy has laid out a sound risk
    mitigation/management plan for the program).
        The configuration of NTW that was used in the analysis done for the
    June 1998 report to Congress used an NTW Block II interceptor which
    will have significantly greater speed, target discrimination and divert
    capabilities than the NTW Block I system. The NTW Block II system
    development is partially funded within the approved NTW Block I
    program. However, some critical NTW Block II development efforts are
    not currently funded and significant development work remains before
    the system can be tested in a theater ballistic missile defense (TBMD)
    mode, much less in the more stressing NMD mode where the targets are
    faster and harder to detect and discriminate.
        In addition to the interceptor upgrades, conducting sea-based NMD
    requires at a minimum, integration with a set of external sensors
    similar to those being developed for the current NMD program (the SPY-1
    radar has insufficient capability to track ICBM reentry vehicles from
    several likely threat nations). The NTW Block I and Block II systems
    are urgently needed to meet TBMD requirements, and we have a separate
    program funded to do the NMD mission. Therefore, the most pragmatic
    course of action would be to maintain the NTW program as a TBMD system
    while continuing the currently planned land-based NMD system and
    continue to entertain the potential of a future sea-based capability.
        Question. Do you have estimates of the cost to develop, procure,
    operate and maintain a sea-based NMD system?
        Answer. Rough order of magnitude cost estimates were done for
    various sea-based NMD alternatives that were analyzed for the June 1998
    report to Congress ``Utility of Sea-Based Assets to NMD''. These sea-
    based alternatives ranged from stand-alone sea-based NMD with greatly
    enhanced interceptors to modifying the NTW Block II system to serve as
    an adjunct to the current land-based NMD system with a single
    interceptor launch site. All of the stand-alone sea-based NMD options
    (3 interceptor alternatives were studied) would cost between $16
    billion and $19 billion (in fiscal year 1997 dollars) to develop and
    procure. Operating costs for a sea-based NMD system were not estimated.
    The cost drivers for any stand-alone sea-based NMD system would be the
    external sensors (similar to the sensors required by the land-based NMD
    system; specifically, nine x-band radars, six upgraded early warning
    radars, an L-band radar in South Korea, SBIRS High, and SBIRS Low) and
    the potential need for additional ships (required due to the full time
    nature of NMD in operating areas not typical of current Navy operating
    areas). These NMD ships could retain their multi-mission capability.
    Operational schedules and homeports would need to be reviewed to ensure
    the Naval NMD operational areas are patrolled. For the stand-alone sea-
    based NMD alternatives, fewer ships would be required as interceptor
    speed is increased. However, increased interceptor speed and improved
    kill vehicles requires greater development investment and greater per
    unit procurement costs. The net result is a similar rough order of
    magnitude cost estimate for any stand-alone sea-based NMD system.
        The rough order of magnitude cost estimate of modifying the NTW
    Block II system to serve as an adjunct to the current NMD system was
    $1.3 billion (fiscal year 1997 dollars). The adjunct rough cost
    estimate includes the procurement of an additional 200 interceptors
    (400 NTW Block II interceptors currently required for theater ballistic
    missile defense plus 200 Block II interceptors for the NMD adjunct
    mission), and development and procurement of a BM/C\3\ interface
    between the NMD BM/C\3\ system and the AEGIS Weapon System to enable
    the land-based NMD sensor system to guide the sea-based interceptor to
    its target (the AEGIS SPY-1 radar has insufficient capability to track
    ICBM reentry vehicles from several likely threat launch locations). The
    $1.3 billion rough order of magnitude cost estimate does not include
    any of the NTW Block II development and procurement costs, nor any
    costs for the NMD external sensors (which were booked against the
    primary land-based NMD system in this case). Therefore, the $1.3
    billion rough order of magnitude estimate represents a delta cost above
    and beyond all the costs associated with developing and procuring the
    NTW Block II system and the currently planned land-based NMD system.
        Question. Would you agree that the cost to operate and maintain a
    sea-based NMD system would be substantially higher than the cost of a
    land-based NMD system?
        Answer. The operating and maintenance (O&M) costs for a stand-alone
    sea-based NMD system would be expected to cost more than a land-based
    NMD system especially if additional ships were required for this
    mission and total ship costs were factored in. For slower sea-based
    interceptors, additional ships may be required which would contribute
    to increased O&M costs. Detailed O&M cost estimates have not been done
    for sea-based NMD. In our June 1998 report to Congress, the limited
    scope of the report forced us to use AEGIS ships as the operating
    platform. A more detailed study could surface other ship platform
    alternatives with lower acquisition and operating costs. These
    operational costs may be contained within the current Navy operational
    budget if additional ships or at-sea time are not required to perform
    this mission. However, I would expect a fixed land site would generally
    have lower O&M costs than a stand-alone ship dedicated to this single
    mission.
        Question. Can you provide us with an update on the pace and
    progress of NMD development?
        Answer. The NMD Development Program is on track to conduct a
    Deployment Readiness Review (DRR) in 2000 and be able to meet a 2005
    deployment if directed. The schedule compresses the typical 20-year
    development and deployment cycle into just over eight years.
        In April 1997, BMDO established the NMD JPO and a year later
    awarded the Boeing North American the Lead System Integrator (LSI)
    contract to assume responsibility for the overall system development,
    integration and fielding. The LSI has established letter or definitized
    contracts with major subcontractors for the Exoatmospheric Kill Vehicle
    (Raytheon); commercial-off-the-shelf (COTS) Boosters (Alliant, et al);
    the X-Band Radar (Raytheon); Upgraded Early Warning Radar (Raytheon);
    and Battle Management, Command, Control and Communications (TRW).
    Previous Government contracts with Raytheon and Boeing for the EKV have
    been terminated and transitioned to Boeing responsibility. The previous
    Government contract with Lockheed Martin Missiles and Space Company for
    Payload Launch Vehicle (predecessor to the COTS Booster) will be
    transitioned to Boeing responsibility in the near future. The
    Government contract with Raytheon for the Ground Based Radar Prototype
    (GBR-P), the predecessor to the X-Band Radar, will continue to
    completion under Government management.
        During the past year the program has been significantly
    restructured from a ``3+3'' acquisition strategy to a fully funded
    program focused on a deployment in fiscal year 2005. The Defense
    Acquisition Executive reviewed and approved the restructure. Specific
    program status follows:
      --Design Development.--The booster and kill vehicle have been
            selected and the kill vehicle hover tested. Weapon System
            Requirement Documents have been updated. The System Functional
            Review and element Preliminary Design Reviews for the Weapon,
            XBR, BMC\3\ and UEWR have been completed. The System
            Preliminary Design Review is underway.
      --Testing & Evaluation.--The program has conducted two successful
            kill vehicle sensor discrimination tests. The first intercept
            test is scheduled for Fall 1999. The program has completed
            three integrated ground tests and five risk reduction flights.
            Prototype Ground Based Rad ars and Upgraded Early Warning
            Radars have successfully participated in Risk Reduction
            Flights. Development of comprehensive system models and
            simulations has begun.
      --Deployment.--The program office has conducted site visits to Alaska
            and North Dakota, developed preliminary site designs and
            initiated the Environmental Impact Statement analysis. The JPO
            has formalized a partnering relationship with the U.S. Army
            Corps of Engineers to accomplish site construction activities.
        Question. Is there a potential to accelerate the deployment date
    for an NMD system so that we achieve an initial capability earlier than
    2005?
        Answer. The NMD Program could conceivably accelerate deployment of
    a limited system under three circumstances: if the test program
    performs flawlessly, the threat warrants an accelerated deployment, and
    we are willing to accept the resulting very high risk program.
        However, it must be noted that the 2005 deployment schedule was
    selected because it reduces both schedule and technical risk. The 2005
    schedule enables the program manager to conduct seven more flight tests
    of the weapon prior to making a production decision. These tests are
    particularly critical because they include the first test of the Kill
    Vehicle with the deployable booster, six confidence-building tests, and
    a test of the production representative weapon. This additional testing
    of the system in general and the weapon, in particular, will
    significantly reduce technical risk and increase confidence.
        Returning to an accelerated deployment timeline would return the
    system to an extremely high risk program. As such, any decision to
    implement an early deployment option should only be made in an
    emergency situation where the U.S. is facing an obvious and direct
    threat that warranted such a programmatic acceleration.
        Question. Is the NMD Joint Program Office adequately manned to
    manage the aggressive schedule laid out for the NMD program?
        Answer. Public Law 105-18 Section 305 limits the National Missile
    Defense (NMD) Joint Program Office (JPO) to 55 government (military and
    civilian) personnel located in the National Capital Region. The NMD JPO
    has faithfully operated under this provision for the past three years
    and has been able to execute the program to date. However, the program
    recently has undergone a significant restructuring, increasing its
    scope and funding. The NMD program is within 14 months of its
    Deployment Readiness Review (DRR), which will be a major milestone for
    the NMD program.
        To meet DRR and continue system development in preparation for
    successive major milestones including a production decision, the NMD
    JPO in the National Capital Region will need the flexibility to add
    manpower. Increases are also anticipated at our sites in Huntsville, AL
    and Colorado Springs, CO. In July 1999, the U.S. Army Manpower Analysis
    Agency completed a review of the NMD Program and validated the need for
    these personnel increases.
        Question. If $15 million of NMD planning and design funds are not
    provided in fiscal year 2000, what will be the impact to the
    development and fielding of the NMD system?
        Answer. As BMDO formulated its fiscal year 2000 Budget Request, we
    had always intended to do facility planning and design with RDT&E
    funding for the NMD Program. The $15.7 million for planning and design
    was included as part of the NMD RDT&E funding line. It was recently
    brought to our attention that we must use MILCON funding for this
    planning and design effort. Therefore, we propose to move $15.7 million
    from the RDT&E account to the MILCON account. Consequently, moving the
    $15.7 million will not impact the RDT&E line. However, if this funding
    is not transferred to the MILCON account, then the necessary planning
    and design work on the ground based radar and the weapon field site
    will not be complete in time for the summer 1900 Deployment Readiness
    Review (DRR). A critical element of the NMD Program is the completion
    of 100 percent site designs for both North Dakota and central Alaska in
    preparation for the DRR. If fiscal year 2000 funds are not moved from
    RDT&E to MILCON essential MILCON project designs will be delayed until
    fiscal year 2001. This will impact needed information for the DRR (as
    this work has to be completed before construction begins) and could
    result in the loss of a construction season and system deployment
    opportunities which would considerably increase program risk. This
    delay in MILCON project design could delay a decision on the deployment
    of the NMD system.
                                     ______

                  Questions Submitted by Senator Thad Cochran
                             naval missile defense
        Question. Between the Navy Area program for lower-tier defense and
    Navy Theater Wide for upper-tier, it seems we are asking a lot of the
    Aegis weapon system and our Aegis-equipped fleet of cruisers and
    destroyers. Some are also suggesting that we should pursue sea-based
    national missile defense. Navy Secretary Danzig recently cautioned
    against trying to do too much at once with naval missile defense.
        In light of the development problems we've encountered with various
    programs, is it your sense that the Navy should first get its lower-
    and upper-tier programs on track before turning its attention to NMD?
        Answer. Yes. The AEGIS Weapon System has encountered significant
    development and integration issues, which will delay fielding of the
    Navy Area TBMD system until fiscal year 2003. The Navy Theater Wide
    (NTW) Block I program is currently assessed as a high technical risk
    program until the flight tests scheduled for 4Q fiscal year 2000
    successfully demonstrate the capability to hit the target.
        I believe that the sound risk mitigation plans developed for both
    Navy Area and NTW programs need to be executed. As risk is retired in
    these programs and we have demonstrated successes, we can begin to plan
    for the next step. It should be noted that the ABM treaty would have to
    be amended to accommodate a sea-based NMD option.
        Question. If BMDO and the Navy were to focus their attention and
    resources now on sea-based NMD, do you believe a sea-based NMD could be
    fielded before a ground-based system?
        Answer. No. In the 12 June 1998 report to Congress, ``Navy Theater
    Wide TBMD Program Acceleration'', the department's position was that
    acceleration of the NTW Block I program to a fielding date earlier than
    fiscal year 2005 would not be prudent from a technical risk standpoint.
        Given a deployment decision by fiscal year 2000 the NMD program
    could begin fielding an NMD capability by fiscal year 2005.
        It should be noted that the ABM Treaty would have to be amended to
    accommodate a sea-based NMD option.
        Question. You have testified previously, as have Army and Navy
    officials, that THAAD and Navy Theater Wide are complementary systems.
    Is this still your view?
        Answer. Yes, THAAD and NTW are considered complementary parts of a
    coherent TMD architecture. We have created common upper-tier program
    element beginning in fiscal year 2002 to pool funding to support
    acceleration of one of the two systems. The fundamental strategy
    revolves around a leader-follower relationship based on program
    success. Through the upper-tier acquisition strategy, we have sought to
    posture one of the two programs to field a capability as early as
    possible. Unfortunately, THAAD, our most mature upper-tier system, has
    yet to demonstrate success in flight testing, and thus the capability
    it is designed to provide continues to slip to the right. Conversely,
    Navy Theater Wide is still early in its development, and will not
    conduct its first intercept attempt until 4Q fiscal year 2000.
        We are operating in a constrained fiscal environment, and we do not
    have sufficient funds in the theater ballistic missile defense mission
    area to concurrently fund and execute two upper-tier programs. The
    benefit to this approach is that it should provide the warfighter with
    an earlier upper-tier capability than would otherwise be possible given
    the funding available. Further, and I believe that this is important,
    the strategy should be an incentive for both programs and their
    contractors to strive for optimum programmatic performance. Our
    decision on the lead program will be made not just on flight test
    results, but also on factors such as cost, schedule performance, and
    risk.
        It is my fervent hope that the Department is presented with the
    dilemma of having both upper-tier programs successful as we approach
    the lead select decision in fiscal year 2001.
                              airborne laser (abl)
        Question. Is ABL our only BMD program that is meeting its schedule
    and cost plans?
        Answer. The ABL program was restructured during fiscal year 1999 to
    accommodate additional risk reduction efforts and increased test
    activities to ensure the system's success. The ABL program continues to
    meet both its cost and schedule since the restructure.
        It is true that all BMD programs have suffered some setbacks in the
    form of schedule difficulties and cost growths. All programs are still
    in the research, development and testing phases of system acquisition
    wherein problems are expected, especially given the unique and
    technically challenging nature of the BMD mission.
        Several shortfalls in estimating the technical challenges of our
    BMD systems have been brought to light during the past year. The 1998
    Welch Report on reducing risk in BMD programs identified the need for
    more rigorous and disciplined flight testing for BMD programs. These
    findings/recommendations resulted in BMD program adjustments that,
    while imposing schedule delays, greatly help to ensure an acceptable
    level of risk and system development/testing in the BMD programs and
    obviate a ``rush to failure''. Secondly, the submission by the NMD LSI
    of more detailed development requirements (testing, development, and
    construction) contributed to a move in the system's IOC from fiscal
    year 2003 to fiscal year 2005.
        Question. Do you believe there is technological synergy between ABL
    and the Space-Based Laser?
        Answer. Yes, the ABL program will provide important technological
    insights for SBL--it will continue to mature enabling technologies for
    SBL. Some examples include:
      --Flight-weighting a weapons class, multi-megawatt laser
      --Detection, acquisition, tracking, and kill techniques for high-
            velocity ballistic missiles at hundreds of kilometers using a
            Directed Energy (DE) weapon
      --Development of lightweight, miniaturized beam control system,
            including large uncooled optics capable of handling multi-
            megawatt laser power
      --Integration of complex laser and beam control systems
        --Compensation for imperfections in optics train (i.e., alignment)
        --Jitter reduction (vibration dampening) associated with moving
                platform
        --Multi-megawatt laser steering and firing control
      --Improve reliability of DE weapon components
        Historically, all the capabilities that have been moved into space
    (i.e., communications and surveillance) have first been demonstrated on
    airborne platforms. ABL will not only reduce technical risk for the SBL
    program from a technical perspective, it will also help the Department
    learn how to operate and employ DE weapons.
        Question. Despite criticisms from various quarters, do you believe
    ABL is well-structured and has the potential to be a viable part of our
    BMD architecture?
        Answer. Yes. The fiscal year 1999 program restructure added early
    risk reduction activities and greatly increased the amount of testing,
    especially flight testing.
        ABL will make vital contributions to the BMDO ``family of systems''
    (FoS). ABL is the only boost phase intercept system. Destroying enemy
    missiles in the boost phase is extremely important for several reasons:
      --Deterrence: it presents an enemy with the possibility that missile
            debris, including the warhead, may fall back on their
            territory--in this way, ABL serves as a viable deterrent to use
            of weapons of mass destruction;
      --Enhances FoS effectiveness: it reduces the number of missiles that
            the midcourse and terminal defense systems must engage,
            allowing these systems to focus on fewer targets and easing
            interceptor inventory requirements;
      --Defeats terminal system countermeasures: it kills missiles with
            advanced submunitions, as it is a very significant challenge
            for hit-to-kill defense systems.
        In addition to its role as a boost-phase ``shooter,'' ABL will also
    possess significant sensing capabilities that will improve the
    performance of other FoS elements. ABL will provide quick and accurate
    missile launch point estimates which will cue attack operations assets.
    It will also pass trajectory data and impact point predictions on
    ``leakers'' to midcourse and terminal systems which will allow the
    terminal systems to narrow their sensor search patterns and extend
    their ranges. This will provide accurate and timely impact point
    predictions to enhance passive defenses in the target areas.
                  medium extended air defense program (meads)
        Question. You noted in your testimony that the approach to the
    MEADS program has been changed to try to leverage other missile defense
    development programs, such as PAC-3. Are you confident that this
    approach can produce a system that will meet the requirement to provide
    protection to maneuver forces in the field?
        Answer. The original full Medium Extended Air Defense System
    (MEADS) program was very ambitious and expensive given available
    funding for Ballistic Missile Defense programs. Now the Department has
    identified a lower cost MEADS approach relying on the PATRIOT Advanced
    Capability-3 (PAC-3) interceptor. The three-year MEADS risk reduction
    effort will develop prototype hardware with the purpose of reducing the
    cost and technical risk for the full MEADS development. Prototype
    hardware will range in maturity from the use of surrogates to digital
    simulations to fully functional end items. The Department's priorities
    are to prototype a mobile 360-degree fire control radar, lightweight
    mobile launcher, and BMC\4\I. The specific priority of elements to be
    prototyped within this effort is currently under discussion with our
    allies. While this strategy does not yield a MEADS prototype system
    ready for operational use that fully satisfies the MEADS requirements,
    it will allow us to identify and mitigate the risks of entering the
    full development of a system that will satisfy the MEADS requirements.
        While, the strategy of incorporating a PAC-3 missile may limit the
    system's ability to prosecute some of the more stressing threats in the
    MEADS requirement, a recent examination of updated threat information
    shows that the MEADS architecture with the PAC-3 interceptor satisfies
    the majority of the near term threat requirements. Incorporating the
    PAC-3 interceptor into the restructured MEADS system should provide a
    system that satisfies the majority of the MEADS requirements providing
    a highly mobile tactically deployable system for protecting the
    maneuver force. I am therefore confident that this strategy can produce
    a system that will meet the requirement to provide protection to the
    maneuver forces in the field.
        Question. What is the view of our allies in this project?
        Answer. The original full Medium Extended Air Defense System
    (MEADS) program was very ambitious and expensive given available
    funding for Ballistic Missile Defense programs. Now the Department has
    identified a lower cost MEADS approach relying on the PATRIOT Advanced
    Capability-3 (PAC-3) interceptor. We have discussed this idea with our
    German and Italian allies and they have agreed to pursue a lower cost
    PAC-3 based system. On March 10, 1999, the U.S. Secretary of Defense
    signed a letter to his German and Italian counterparts proposing a
    restructured MEADS program beginning in fiscal year 2000 and expressing
    our intent to develop a MEADS capability. It also offered that we would
    sign an updated Statement of Intent (SOI) reflecting the revised
    program. Both German MOD Scharping and Italian MOD Scognamiglio have
    responded to the Secretary endorsing the U.S. proposal, expressing a
    willingness to participate in this restructured MEADS program. The
    MEADS Joint Steering Committee continues planning for this three-year
    effort which includes updating the SOI.
                                     ______

                    Question Submitted by Senator Judd Gregg
                        high power discriminator program
        Question. I understand that one of the consistent bright spots in
    the Theater High Altitude Area Defense program has been the performance
    of the Ground Based Radar. The Navy is apparently capitalizing on this
    success and has recently awarded a contract to develop a High Power
    Discriminator radar prototype that uses much of the same technology
    that has already been developed, for ship board use. Would you give me
    your view on this effort?
        Answer. The Navy is currently embarked on a radar roadmap study
    that will guide the sensor development for all Navy ships in the
    future. As part of that study the Navy has recently awarded two
    contracts for radar demonstrations/prototypes. The High Power
    Discriminator (Raytheon) prototype you mentioned and a solid state
    upgrade to the SPY radar (Lockheed Martin) are two alternatives the
    Navy is assessing to support the NTW program.
        BMDO continues to support the leveraging of any technologies into
    and out of our programs that reduce program cost, risk and schedule.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
                   theater high altitude area defense (thaad)
        Question. General, the recent flight test of the THAAD system
    narrowly missed its target. As I understand from your written
    statement, there were a number of positives which came out of this
    test. As the test program continues, how much confidence do you have
    that the THAAD program is on the right track and ultimately will be
    fielded?
        Answer. Based on measures implemented by Lockheed Martin Missiles &
    Space Company (LMMS), following the FT-08 failure and even though FT-09
    did narrowly miss intercepting its target, I am increasingly confident
    in the reliability of the THAAD missile and the probability of a
    successful intercept on subsequent flight tests. [Note: Corrective
    action was taken on the FT-10 vehicle to preclude a repeat of the FT-09
    failure mode. FT-10 was conducted on June 10, 1999, and a successful
    body-to-body intercept of the target in the high-endoatmosphere was
    achieved. All system segments performed as planned and no major
    anomalies were experienced.]
        LMMS has implemented recommendations from an internal senior review
    team, the government Project Office, and assorted independent review
    teams to improve system reliability and reduce flight test risk. This
    includes a detailed design review of the entire missile, increased
    ground testing in all phases of pre-flight readiness checks (at vendor
    facilities, Courtland missile assembly plant, and at the flight test
    range, White Sands Missile Range (WSMR)) and a complete reassessment of
    the acceptance test procedures and the environmental stress screening
    of the missile components. As a result, the ground test shock and
    vibration testing for several components was increased to more
    thoroughly test the packages and increase confidence going into the
    mission.
        More broadly, as problems are discovered they are being corrected
    across entire lots of hardware. The planning and implementation of this
    new testing and the detailed pedigree reviews of missile sub-components
    has taken considerable time, but this is consistent with the event-
    driven nature of the test program. This disciplined approach is
    identifying discrepancies which may have gone undetected and which
    potentially could contribute to future flight test failure.
        Other specific measures implemented are: institution of a Foreign
    Object Debris (FOD) Elimination Program (FOD was responsible for
    failure on FT-06 and FT-08 as well); expansion of the scope of the
    Detailed Test Readiness Investigations (DTRI) of key segments;
    increased attention to root cause analysis/corrective actions; and
    increased attention to subcontract management. This work has resulted
    in concrete measures that increase confidence in the missile's
    reliability. For example, LMMS replaced a contaminated operational
    amplifier in the inertial measurement unit, will transport the missile
    via air (vice truck) from Courtland to WSMR in order to reduce its
    exposure to high vibration levels, and switched-out the booster due to
    behavior of the thrust vector control system performance less than its
    sibling units, even though it was within specifications.
        In summary, I support the measures being implemented by our
    Government-Contractor team; our success on FT-10 in June demonstrates
    clearly, I believe, that we are indeed on the right track. Support for
    THAAD within the Department of Defense and in Congress remains strong
    and I am confident that we will successfully field the system to
    provide our soldiers, sailors, and airmen with the protection they
    need.
               ballistic missile defense organization challenges
        Question. General thank you again for your fine service to the
    Ballistic Missile Defense Organization. You've been there for the
    better part of three years. As you look back on your tenure, what do
    you feel has been your greatest challenge at BMDO? What recommendations
    will you make to General Kadish as he takes over?
        Answer. When I look back, I see three major challenges. Program
    execution--fielding a missile defense program--is the premier
    challenge. Key elements to execution are instituting realistic cost
    controls and devising contract strategies that will incentivize
    improved contractor performance and accountability. We must also design
    affordable architectures for the future; missile defense architectures
    that are not affordable will not succeed in Congress or the Department.
    Even the perfect architecture is useless if it's not affordable. And
    then there is the perennial technology funding shortage. Technology
    funding often is curtailed in favor of more immediate issues even
    though technology provides the building blocks we must have in order to
    construct affordable architectures. Earlier this year, Dr. John Peller
    testified before the Senate Armed Services Committee that the robust
    support of technology by SDIO and BMDO in previous years had provided
    him the legacy of a solid foundation for a National Missile Defense
    program.
        My first recommendation to General Kadish would be to use his many
    years of acquisition experience and manage BMD programs just like any
    other major acquisition programs. Viewing BMD as special has nurtured a
    government and contractor culture/attitude that has been the
    underpinning for today's problems. I would also urge bringing in fresh,
    smart, acquisition people. Along with building on experience, I would
    encourage General Kadish not to overlook the future but to seek
    innovative technology solutions for BMD questions. And finally, I
    cannot over emphasize frequent and open communication with everyone--
    especially the Congress.
                      patriot advanced capability (pac-3)
        Question. General, I was pleased to see that PAC-3 scored a hit
    last month. I am hopeful that a second hit is in order later this
    spring. I realize that you touched on the PAC-3 funding issue in your
    statement, but I would like to give you an opportunity to further
    review the issue for the Committee. General, assuming that PAC-3 does
    achieve a second hit, what additional funding will be required to move
    the program into the production phase?
        Answer. Patriot previously requested emergency supplemental funding
    to address cost growth in the missile development program that resulted
    from the delay in the start of flight testing. This emergency
    supplemental funding request was denied, consequently, the Department
    has requested additional RDT&E funding of $152 million in fiscal year
    2000. An additional $60 million of procurement funding is requested for
    fiscal year 2000 to replace the $60 million which was transferred from
    fiscal year 1999 procurement to cover cost growth in the fiscal year
    1999 missile development effort. This procurement funding is critical
    to the low rate initial production of the PAC-3 missile that will start
    in fiscal year 2000. The $60 million will restore initial production
    facilitation tooling, 11 launcher modification kits, and 7 fire
    solution computers lost as a result of the fiscal year 1999
    reprogramming action.
                   medium extended air defense system (meads)
        Question. General Lyles, the Pentagon has requested $48.6 million
    this year for the MEADS program, yet it is my understanding that no
    funds have been identified beyond fiscal year 2002. What is your view
    regarding the future of MEADS?
        Answer. The Department is committed to working with our German and
    Italian allies to develop and deploy a MEADS system. In a letter to his
    German and Italian counterparts, Secretary Cohen stated that the U.S.
    is committed to developing a MEADS capability. On May 7, 1999, Deputy
    Secretary Hamre sent a letter to the four Congressional Defense
    Committees stating that the Department ``will program a MEADS
    development that goes beyond the 3-year technology program with a goal
    of fielding a MEADS system as a long-term replacement for PATRIOT.'' To
    that end, the Department is in the process of developing its long-term
    program and is evaluating options for continuing the MEADS program
    beyond fiscal year 2002.
        We are currently working with our allies on a revised Statement of
    Intent that defines the way ahead for the development, production, and
    deployment of this system.

                              subcommittee recess

        Senator Inouye. And so the subcommittee will reconvene on
    Wednesday, April 21, in this room to receive testimony on
    fiscal year 2000 budget request for the defense health program.
        We will stand in recess.
        [Whereupon, at 12:06 p.m., Wednesday, April 14, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    April 21.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                           WEDNESDAY, APRIL 21, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:05 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senators Stevens, Shelby, Hutchison, Inouye, and
    Leahy.

                             DEPARTMENT OF DEFENSE

                                Surgeon Generals

    STATEMENT OF DR. SUE BAILEY, ASSISTANT SECRETARY OF
                DEFENSE FOR HEALTH AFFAIRS

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. I apologize, Dr. Bailey and Admiral
    Nelson, General Blanck and General Roadman. I want to welcome
    you to your first appearance here today, Dr. Bailey and Admiral
    Nelson. We are glad to have you with us and look forward to
    working with you.
        Today's hearing takes on particular significance as our men
    and women in uniform and the North Atlantic Treaty Organization
    (NATO) forces are engaged in combat in the former Yugoslavian
    Republic. Our mutual and solemn responsibility to ensure the
    health of our Armed Forces and their families should never be
    clearer than it is today. The Defense health program budget
    request is more robustly funded than it was last year, and I
    commend you for your efforts to make that a reality. However,
    we must continue to work together to ensure that the program is
    not minimally executable but, rather, is fully funded.
        Unfortunately, I have to inform you that I do have to
    depart for a meeting with the Majority Leader and Speaker on
    the subject of our recent trip to Kosovo, and my great friend
    from Hawaii and vice chairman will chair the meeting in my
    absence. I hope to return before the conclusion of the meeting,
    but before I proceed, I will turn to the Senator from Hawaii
    who, as we all know, has really been the originator of many of
    the programs that you are involved in, and I am pleased to say
    he probably will contribute a great deal more to the hearing
    than I will if I were here.
        Senator.

                       STATEMENT OF HON. DANIEL K. INOUYE

        Senator Inouye. With that, I will just say thank you. I
    wish to join you, Mr. Chairman, in welcoming Dr. Bailey,
    General Blanck, General Roadman, and Admiral Nelson, and I also
    want to join you in giving a special aloha to our Secretary and
    to the admiral for their first appearance before this
    committee. I have a rather lengthy statement, but may I submit
    this for the record?
        [The statement follows:]
                 Prepared Statement of Senator Daniel K. Inouye
        Good morning. I join my Chairman in welcoming Dr. Bailey, General
    Blanck, General Roadman, and Admiral Nelson to discuss Military Medical
    Programs.
        I would like to take this opportunity to especially welcome Dr.
    Bailey and Admiral Nelson in their first appearance before this
    committee. I hope you find this hearing to be a worthwhile experience
    and that it will be the first of many positive discussions. Dr. Bailey,
    I hope you will have the opportunity to visit Hawaii soon.
        I recently returned from trips to Asia and Saudi Arabia. The
    conditions in these countries reinforced for me that this nation
    provides a far superior quality of life for our service members and
    their families. We do this because our service members and their
    families deserve the best that we can provide.
        One of the most important aspects of high quality military medicine
    is the access to care provided to our beneficiaries. With TRICARE now
    available in all regions, and demonstration projects for our Medicare-
    eligible retirees being implemented, beneficiaries continue to express
    confusion and concern about the options available.
        During my visits to my home state, many current and former members
    of the military frequently ask questions about the future of military
    health care. Those currently on active duty are concerned that their
    family members will not have easy access to the health care services
    they need. Soldiers, sailors and airmen who commit to a career of
    service to our nation worry that medical benefits will be inadequate
    when they retire. Retired military members are apprehensive about the
    changes to the availability of quality services for themselves and
    their family members. I can say with confidence, that the ready access
    to quality health care, wherever military members are living, is always
    of paramount concern to them.
        I commend DOD for being a leader on the cutting edge of medical
    technology. The particular successes of Akamai in Hawaii are
    noteworthy, and I hope this technology will be shared with appropriate
    members of the public and private sector in the future. General Blanck,
    I appreciate your support of the Akamai project.
        Today, as we address many of the issues facing our military health
    systems, I would like to focus on military medical readiness, the
    provision of health care services to our beneficiaries, new technology
    initiatives, and the President's fiscal year 2000 budget request.
        I look forward to hearing your testimony this morning.

        Senator Stevens. I wish he would tell us what he is
    thinking, because with that we will know we will have to go
    back and read it later, but--Senator Shelby.

                      STATEMENT OF HON. RICHARD C. SHELBY

        Senator Shelby. Mr. Chairman, I ask that my entire written
    statement be made a part of the record.
        But I want to welcome all of you here, as the chairman and
    Senator Inouye, the former chairman have done. I especially
    want to say hello again to my good friend, General Blanck, and
    to all of you. I think you are doing a good job. I think we
    need to furnish, I believe, more tools for you to do it,
    especially. It is a challenge. But with that, Senator Stevens
    wanted to hear from Senator Inouye. I think we want to hear
    from you.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        Good morning Dr. Bailey and welcome to you and your
    distinguished panel members. It is a pleasure to see you all
    here today. Mr. Chairman, I will be very brief with my remarks.
    The quality of military medicine is essential to the viability
    and maintenance of our all volunteer armed forces in three
    areas. First, we must provide our combat forces with proper
    care so that they are physically prepared to go into battle and
    win. Also, our personnel must be provided with the finest
    medical care possible should they be wounded in action. I hope
    that this is the case today as our forces continue combat
    operations in the Balkans.
        Second, military medicine must be prepared, through a
    variety of means, to care for the dependents of our military
    personnel. Without such care, this nation risks losing those
    highly trained personnel to the civilian sector.
        Finally, to recruit, train and retain men and women for a
    military career requires an effective health care plan for
    retirees. Men and women who have made the military a career
    deserve nothing less.
        Our military medicine programs are an integral part of this
    nation's total force. Without proper funding and implementation
    of those programs our all volunteer force will be difficult to
    maintain. Again, Dr. Bailey welcome to you and your colleagues.

        Senator Stevens. I think we all want to hear from you, too.
        Dr. Bailey. Mr. Chairman, thank you for having us here
    today. We in the military health care system are charged with
    two missions: We take care of the peacetime health care needs
    of our beneficiary service members and their families, as well
    as our wartime responsibilities. Our readiness and force health
    protection responsibility has grown. As you know, there are
    increased deployments. The nature of those deployments have
    shifted, and we now also encounter weapons of mass destruction
    on the battlefield and have concerns about that in terms of
    terrorism elsewhere.
        With regard to peacetime mission we have completely stood
    up within the last year a managed health care system we call
    TRICARE. It provides to our beneficiaries world class health
    care but, as we know, we have had some business problems with
    TRICARE. We need to get our claims paid quicker and we need to
    make our appointment scheduling easier.
        This year, we have had an unprecedented collaboration on
    our budget with the Surgeons General and I, the Under Secretary
    of Personnel and Readiness, the Comptroller, and Admiral Sears
    at TRICARE management activity (TMA). For the fiscal year 2000
    funding for the Defense health care program we are seeking
    $10.8 billion, and under the President's budget we are
    requesting a total of $16.4 billion for the whole military
    health care system.
        This includes funding for our responsibilities for force
    health protection information systems that will let us provide
    the surveillance that is so necessary both on the battlefield,
    before deployment, during deployment, and after deployment. It
    supports medical readiness and training so that our health care
    providers can continue to provide world class health care
    whether on the battlefield or in peacetime. It expands our
    dental program overseas.
        It looks to the TRICARE remote issue so that we can provide
    for those who are out there in remote areas not near military
    treatment facilities (MTF's); and it funds demonstration
    projects which will let us attend to our over 65 population,
    those we honor and revere for their service.
        We hope that the funding of the Defense health care program
    will provide the resources for the men and women of the
    military health care system to continue to provide the very
    best health care in the world as they undertake their
    courageous missions in wartime when called upon to do so, and
    do that from the platform of the highest quality peacetime
    health care.

                               prepared statement

        I look forward to working together to assure their
    resources so that they may complete their mission.
        Thank you very much.
        [The statement follows:]
                      Prepared Statement of Dr. Sue Bailey
        Mr. Chairman, distinguished Members of the Committee, it is my
    distinct honor to appear before your Committee today and to provide for
    you an overview of the Military Health System.
        The Military Health System is a vast and extraordinary health
    system. There is no other like it in the world. We ensure the health of
    our forces, care for them when ill or injured anywhere around the
    globe, and we provide comprehensive health coverage to the families of
    our services members, our retirees and their families and the surviving
    family members of those who have died in service to their country. Our
    attention to the health of our forces involves research, health
    promotion, and appropriate care whether deployed or at home stations.
    It relies on fully trained and militarily prepared health care
    personnel. It demands timely, supportive and quality care for family
    members. Some view the components of the Military Health System
    separately; they see the support for deployed force as separate from
    the operation of hospitals and clinics. However, these components are
    interdependent, each requires the other in order to provide the highest
    quality, effective healthcare for our forces. We cannot provide Force
    Health Protection in wartime without a robust peacetime healthcare
    system.
    Fiscal Year 2000 Defense Health Program Budget
        For fiscal year 2000, we are seeking funding for the Defense Health
    Program in the amount of $10.8 billion. Under the President's budget
    request, the total proposed budget for the Military Health System is
    $16.4 billion. Our proposed funding for military personnel is $5.5
    billion and for military construction it is $73 million.
        The President's fiscal year 2000 budget request:
      --Continues and increases funding for the numerous Force Health
            Protection measures designed to promote health, prevent
            injuries and disease, care for casualties, and have a viable
            automated record system for all services members detailing
            their health status, plus possible exposures to health hazards
      --Supports increased medical readiness training
      --Contributes funds to the Global Emerging Infectious Disease
            Surveillance initiative
      --Requires management efficiencies within the military treatment
            facility operations while providing increased funding for
            additional services
      --Supports adequately the seven managed care support contracts, the
            transition to the next generation of contracts, the TRICARE
            Prime Remote program, the Family Member Dental Program
            expansion overseas, and the Selected Reserve dental program
      --Provides funding for advances in medical practice
      --Funds demonstration programs for providing healthcare coverage for
            beneficiaries age 65 and older. These demonstrations will test
            using the Federal Employees Health Benefit Program, offering a
            TRICARE supplemental benefit to Medicare, and expanding the
            national mail order pharmacy program to include Medicare-
            eligible military beneficiaries.
    Force Health Protection
        Force Health Protection (FHP) is the military health strategy that
    supports the national military strategy for the next century, Joint
    Vision 2010. FHP addresses the national obligation and DOD's commitment
    to protect the health of all service members while at home and during
    deployments. The number and scope of current military operations, the
    variety of deployment environments and hazards, and our expectations of
    men and women in uniform all have increased as the Nation responds to
    changing global threats.
        Force Health Protection reflects a commitment to:
      --Promote and sustain wellness to ensure that we can deploy a fit and
            healthy military force
      --Implement medical countermeasures to prevent casualties from
            occurring in the deployed environment
      --Provide high quality casualty care.
        The many activities underway that contribute to FHP include greater
    attention to individual health status and the continual medical
    monitoring and recording of hazards that might affect the health of
    service members. Medical Surveillance has been in effect for recent
    deployments to Southwest Asia, as well as for deployments to Bosnia,
    Croatia and Hungary. Included are pre- and post-deployment medical
    briefings and individual health assessments, extensive environmental
    hazard monitoring in the theater of operations plus increased
    preventive and mental health resources in the theater.
        We face a new era in our efforts to prevent casualties. Chemical
    and biological warfare (CBW) threats have complicated conventional
    preventive measures. To counter these threats, ongoing application of
    the latest technology for CBW detection, prevention and immunization
    (pre-treatment) are now employed to assure the protection of our
    forces. For instance, the Department initiated the Anthrax Vaccine
    Immunization Program, which is progressing very well with relatively
    few objections. We have now vaccinated over 200,000 service members.
    This summer we will enter Phase II of the program and begin immunizing
    those service members who will be the early deployers to high threat
    areas.
        As the U.S. Armed Forces move into the 21st Century, they will
    become the highly mobile, technologically advanced forces envisioned by
    the Chairman of the Joint Chiefs of Staff. Medical support units can be
    no less mobile, no less agile, no less advanced if they are to
    discharge their Force Health Protection responsibilities. We have
    several initiatives underway that will afford us greater flexibility
    and improved patient care in conflict and wartime scenarios.
        FHP is our unified strategy that protects service men and women
    from health and environmental hazards associated with military service
    through their continuum of service from accession, training and
    deployment(s), to separation or retirement, and beyond. Further, FHP
    acknowledges that the service member cannot focus on the mission at
    hand if he or she is concerned about the healthcare that his or her
    family is receiving at home. Therefore, TRICARE is directly related to
    force health protection.
    TRICARE
        TRICARE is an integrated health care delivery system that has
    enabled the Department to provide better access to high quality care
    for more of our beneficiaries more cost-effectively than the previous
    health care delivery modalities available in the Military Health
    System. As a health plan, TRICARE offers a triple-option health benefit
    package providing beneficiaries a choice of: TRICARE Prime, an enrolled
    HMO like option; TRICARE Extra, a preferred provider option; and
    TRICARE Standard, the standard CHAMPUS option. All active duty service
    members are enrolled in TRICARE Prime.
        To better identify and remedy problems with TRICARE, I have begun
    intensive on-site reviews of each TRICARE region. These reviews include
    meetings with the Lead Agent, service line representatives, our managed
    care support contractor, beneficiaries and providers. At these meetings
    we conduct focus groups with beneficiaries and with civilian and
    military providers to obtain candid assessments of healthcare delivery
    issues in the region. For each region we will develop an action plan
    for correcting problems identified. I believe that these regional
    reviews will provide us with valuable information on the level of
    service provided to our beneficiaries, as well as how we can improve
    the perception of TRICARE in the field.
        We have already underway a number of initiatives to improve TRICARE
    and the military health benefit. Two of these initiatives are of
    particular concern: pharmacy redesign and claims processing.
        Pharmacy Redesign.--The proportion of Defense Health Program
    dollars to deliver a pharmacy benefit is growing faster than all other
    sectors of health program spending. In 1997, the MHS spent $1.3 billion
    on the pharmacy benefit. DOD costs for the pharmacy benefit in fiscal
    year 1997 rose about 13 percent; while less than the private sector
    increases of about 15 percent, they were more than the rate of
    inflation.
        In June 1998, the General Accounting Office (GAO) issued a report
    regarding their review of the pharmacy benefit. The major findings
    included lack of an integrated information system and a fragmented and
    complicated benefit structure. The Fiscal Year 1999 Defense
    Authorization Act directed the Department to address the pharmacy
    benefit.
        DOD formed a working group to thoroughly examine the pharmacy
    benefit and to compare and contrast the current program with the best
    business practices in the private sector. The working group solicited
    input from beneficiaries and beneficiary organizations, professional
    pharmacy organizations, and the pharmaceutical industry.
        Currently, the Department is proceeding with a pharmacy benefit
    redesign plan that focuses on the advantages of an integrated
    information system. This system will enable some Prospective Drug
    Utilization Review and on-line edits. Improving just one part of a
    system will generate a positive effect on other parts.
        Another Congressionally directed action the Department is pursuing
    is the extension of the pharmacy benefit to Medicare-eligible
    beneficiaries at two sites beginning October 1999. Planning is
    underway, however the sites have not been identified to date.
        Claims Processing.--TRICARE claims processing is complex and unique
    in the industry. This is due to the numerous eligibility categories of
    our beneficiaries, the differing cost shares and benefits based on
    eligibility category, and the three TRICARE options for coverage. The
    managed care support contractors are responsible for processing TRICARE
    claims and have a timeliness standard of 75 percent of claims will be
    processed within 21 days.
        In 1998, approximately 27,500,000 TRICARE claims were processed. Of
    these, 83 percent were processed within 21 days and 90 percent within
    30 days. Although meeting the standard, it is not good enough. Several
    initiatives are underway to improve the timeliness and the efficiency
    of claims processing.
        We will strengthen our timeliness standards for faster payment and
    require the contractors to pay interest on claims not processed on
    time. We plan to revise prescriptive government requirements and adopt
    commercial business practices. This will reduce the number of claims
    requiring review and the amount of clinical information required. We
    want to facilitate electronic filing of claims and to improve provider
    education on how to submit claims to TRICARE. With our managed care
    support contractors we have identified a number of reforms and one
    result will be a bottom-up review of the entire system by an
    independent firm with claims processing expertise. Finally, we have
    established tiger teams to work on-site with the TRICARE regions,
    especially Regions 1, 2, and 5, to identify and resolve claims
    processing problems.
        As these reform measures take effect, we expect beneficiary and
    provider satisfaction to increase, administrative burdens to disappear,
    and best commercial practices to become widespread.
    Prevention
        A major initiative of the Military Health System is prevention and
    health promotion. We are in the final stages of implementation of
    several instruments that will significantly improve our ability to
    offer comprehensive preventive services to all of our beneficiaries.
    The Health Enrollment Assessment Review (HEAR) is completed by each
    beneficiary at the time of enrollment into TRICARE and is used by their
    Primary Care Manager to assess the beneficiary's current health status
    and to recommend a course of action or treatment to appropriately
    manage existing diseases. In addition, the Put Prevention Into Practice
    Program (PPIP) will allow our providers to evaluate and review the
    prevention and health promotion needs of each patient, from
    immunizations to screening services, and to provide these services in a
    more timely manner. The PPIP will be in place at all of our military
    treatment facilities by the end of 1999.
        The recently established Safety, Prevention and Health Promotion
    Council has developed implementation plans for addressing three
    priority health promotion initiatives:
      --Alcohol Abuse Elimination.--Develop strategies that will lead to
            the reduction of alcohol abuse and foster an atmosphere of
            either abstinence or the responsible use of alcohol by service
            members and our other beneficiaries.
      --Tobacco Use Cessation.--Promote the elimination of tobacco use
            through education and the development of avoidance and/or
            cessation programs that will include the use of nicotine
            replacement therapy and behavioral counseling when appropriate.
      --Injury Prevention.--Recognizing that one of the most common reasons
            people seek care in the Military Health System is for the
            treatment of unintentional injuries either in training or at
            home, develop initiatives to address the reduction of injuries
            both in and out of the workplace.
    High Performance Military Health System
        To ensure maximum efficiency of the Military Health System, we
    committed to a strategy that identifies, evaluates and achieves
    management improvements throughout military medicine. We identified 29
    initiatives for implementing a high performance Military Health System.
    The focus of these initiatives, or our reengineering program, is
    optimizing our military system and its facilities. These include:
      --Effective use of readiness-required personnel and equipment to
            support the everyday health service mission
      --Equitable alignment of resources to maximize use of the direct care
            system
      --Use of evidence-based clinical practices and a population health
            approach to ensure consistent, high quality healthcare.
    Quality of Military Healthcare
        Still, we continue to strive for improvement. For example, we are
    creating Centers of Excellence where high risk, complex and expensive
    medical procedures are carried out using the concentrated expertise and
    resources of the military services to provide state-of-the-art care. In
    partnership with the Department of Veterans Affairs, we are working on
    patient safety issues and clinical practice guidelines. We have revised
    our licensing policies to require all military physicians to maintain
    at least one completely unrestricted state medical license. Finally, we
    will work with the Congressionally mandated Quality Council to evaluate
    the effectiveness of current quality programs and to explore future
    initiatives to further strengthen them. We have identified candidates
    for this Commission and it will soon begin its review of our system.
        Mr. Chairman, my statement has addressed the highlights of our
    fiscal year 2000 budget request, our strategy of Force Health
    Protection, progress in our TRICARE program, our prevention strategy,
    our comprehensive reengineering initiatives and our efforts to achieve
    improved quality within the Military Health System. These are vitally
    important aspects of the system of military healthcare. Together they
    provide the resources and organizational improvements that cause men
    and women to want to be physicians in the military; that cause
    soldiers, sailors, airmen and marines to want to stay in the service of
    their country; that cause the American people to have great confidence
    in those who run the military.
        I am very proud of the Military Health System, its people and the
    many courageous missions they undertake. We are deeply committed to do
    whatever is necessary to take care of our people. It is my honor to be
    the leader of this extraordinary health system. I look forward to
    working with you in the New Year and to the many opportunities we have
    to serve our troops, their families and our nation.
    STATEMENT OF LT. GEN. RONALD R. BLANCK, ARMY SURGEON
                GENERAL
        Senator Stevens. General Blanck.
        General Blanck. Thank you, Mr. Chairman, Senator Inouye,
    Senator Shelby. It is always a pleasure to appear before you. I
    have a statement which has been submitted for the record. I
    would like to briefly summarize a few of the points. First, we
    are focused on job number 1, and that is making sure the men
    and women of the Armed Services are healthy and ready to do
    their jobs, so we have a focus on prevention that I think is
    unprecedented, and we are doing some very interesting and good
    work on that.

                                Force protection

        With it, we have something called force protection, that
    involves making sure that we record all the preventive medicine
    efforts, all of the interventions, all of the exposures that
    our service members are potentially--that they potentially
    encounter on something called the personal information carrier,
    and that is in testing as we speak, and we will be able to put
    it into the field later this year and for the final testing
    before deploying it, sometime next year.

                        Anthrax program/health promotion

        You all know about our anthrax immunization vaccine
    program, another successful program using the safe and
    effective vaccine as a medical defense against a very serious
    weapon of war, and that is biologic weapon anthrax itself. We
    are also making sure that our service personnel get a lot of
    information on how to stay healthy, and these are some
    pamphlets that we have, and I will show you later, on some of
    the health risks that they may encounter in Central Europe
    areas where we in fact are engaged and may subsequently be even
    further engaged, so we are taking very seriously the issue of
    keeping our force healthy in many, many ways.

                          deployment of Medical assets

        We are also concentrating on making sure that we in the
    medical services are ready to deploy, whether in the Air Force,
    the Navy, or the Army. The Air Force, of course, is
    concentrating on evacuation systems such as the 60 Quebec, and
    we appreciate the efforts of everyone on the committee in
    achieving funding to get our air ambulance, which is really
    state of the art. We have our first eight, and we have more
    programmed to come.

                              Trauma team training

        We are doing surgical team training at trauma centers. It
    is a fact that, strange as it may seem, although military
    forces are, of course, structured and designed to take care of
    combat casualties, trauma, in addition to all of the prevention
    and other kinds of things that we do, in peacetime we are the
    ones that probably see the least amount of trauma because we
    are on bases where there are young, healthy people and little
    trauma except for training accidents and that kind of thing.
        So we have started a program of sending our teams, the Air
    Force and Army, to Ben Taub Hospital in Houston, the Navy to
    Martin Luther King Hospital in Los Angeles, to expose them to
    the trauma that is there and provide collective or team
    training for that kind of trauma care, and we believe we will
    be able to rotate our folks through these trauma centers every
    2 years, and then on the alternate year send them to some place
    like the Joint Readiness Training Center at Fort Polk,
    Louisiana for the kind of military unique training that they
    receive there.

                    Combat trauma patient simulation device

        I also this morning visited the Walter Reed Army Medical
    Center and saw something called the combat trauma patient
    simulation device, and this is a mannequin, very sophisticated,
    that has over 300 kinds of disease or injury kinds of trauma or
    instances that can be simulated, and allows a clinician,
    whether it is a nurse, a physician, a medic, a technician, to
    actually take care of a patient with the instructor changing
    the scenarios, looking at the physiologic monitors,
    administering the medication, intubating, and I will tell you,
    it has been some years, really, since I have been involved in
    taking care of patients at that level, but as I worked with
    this simulated patient, I was astounded to have the same
    feelings come back of a sense of urgency as to what to do to
    take care of that patient.
        This is something that the Navy has on board the U.S.S.
    Comfort, the Air Force has at Wilford Hall, and the Army has at
    many of our training sites, including at Walter Reed and at the
    AMEDD Center and School at San Antonio. This is a
    congressionally funded project that we're working out of Fort
    Detrick, and I think is a great success.

                               prepared statement

        I have some flyers on this that I would like to give to you
    after the session if I might, because I think you will find it
    fascinating, and if you ever want to see this, this is
    absolutely a model for how medical training is going to be done
    not just in the military, but throughout this country.
        [The statement follows:]
                Prepared Statement of Lt. Gen. Ronald R. Blanck
        Mr. Chairman and members of the Committee, I am Lieutenant General
    Ronald R. Blanck, The Army Surgeon General. It is a privilege for me to
    address this committee. I am particularly pleased to do so here--in
    this setting with the other two Service Surgeons General. As this
    committee knows, we have and continue to work more and more closely
    together along with the Assistant Secretary of Defense for Health
    Affairs. I am very gratified to say that, in no small part, the success
    of today's Army Medical Department is built on this continued
    relationship of inter-service cooperation and collaboration.
        Today I would like to provide you with a picture of the Army
    Medical Department. I will provide this picture in the context of the
    three Army imperatives: shaping the force, preparing the force, and
    responding to the needs of our Army and the nation. Through this
    picture you will see an Army Medical Department fully integrated not
    only on any future field of battle, but in garrison as well, taking
    care of all our soldiers, retired and active, and their family members.
    At the conclusion of my testimony, I believe you will agree that
    today's Army Medical Department is more flexible and better prepared to
    meet all our diverse missions than ever before. I thank you for your
    continued support of our efforts to provide the finest quality of
    medical support to America's Army.
        Current Status of the Army Medical Department.--The Army Medical
    Department continues to respond with creativity and energy to the
    challenges of health care in a rapidly changing environment. Even as we
    reduce our numbers, we are deploying all over the world more than we
    have in recent years. These deployments are not only for combat
    support, but also for humanitarian assistance, stability and support
    operations. Medical personnel are finding that on these missions they
    are typically providing preventive medicine expertise, disease and
    environmental surveillance. All the while, we must maintain day-to-day
    health care for soldiers, retired soldiers and their families.
        The Army leadership has articulated three imperatives as we prepare
    to meet the challenges of the 21st Century. We in the medical
    department have aligned ourselves with the rest of the Army to shape
    our forces to meet the needs of a changing world; we must also prepare
    our forces by staffing, equipping and training them to successfully
    complete all missions they may be called upon to perform; and we must
    respond to the needs of the Army and the Nation.
        The primary mission of the Army Medical Department continues to be
    support of the Army in the field, whether that means dealing with
    military threats, peacekeeping or humanitarian relief. Let's look at
    the Army Medical Department's current priorities, as they relate to
    these imperatives:
                                     shape
        We are continuing to refine our organizational structure in order
    to perform our mission in the most efficient and effective manner. In
    1998, the Army Medical Department celebrated 25 years as a distinct
    Major Command for health care units. Health Services Command was
    activated on April 1, 1973. Before then, the leadership chain for
    medical units was fragmented, with hospitals under the authority of
    individual installation commanders.
        The organization has been an undeniable success. Refinements were
    added through the years, including expansion and redesignation as
    Medical Command in 1993. Most recently, Medical Command Headquarters
    merged with the Office of The Surgeon General in 1997 to create one
    staff under the authority and command of the Surgeon General dual
    hatted as the Medical Command Commander.
        The great added value of this organization is integrating the
    peacetime and readiness roles of Army medicine into a total health-care
    system. Each component of the medical system is inextricably linked to
    all of the other components. This seamless organization produces
    significant economies and efficiencies, as demonstrated by the fact
    that we currently provide health care to our beneficiaries for
    significantly less than such care costs in the civilian marketplace.
        Leadership Development Opportunity.--As I testified last year,
    historically, senior leadership positions and commands within the Army
    Medical Department had been corps specific. As an example, officers of
    the Medical Corps have commanded Medical Treatment Facilities and non-
    deployed Table of Organization and Equipment--TO&E--medical units have
    been commanded by Medical Service Corps officers. Dental Corps and
    Veterinary Corps Officers have commanded Dental and Veterinary units
    respectively. As a result, there have been few corps immaterial senior
    leadership or command opportunities for Army Medical Department
    officers. This policy has limited the Army Medical Department's ability
    to select the best-qualified officers for senior leadership positions.
        In January 1997, the Secretary of the Army approved my request to
    change Army regulations, which had restricted command of Medical
    Treatment Facilities. In general, veterinary, dental, aviation,
    garrison and logistics commands will remain corps specific. Virtually
    all other commands are quickly becoming Army Medical Department corps
    immaterial. The implementation of corps immaterial commands within the
    Army Medical Department will be phased in over the next few years. The
    fiscal year 1998 Department of the Army Command Selection List
    selection boards held in November 1997 for Lieutenant Colonel and
    January 1998 for Colonel was the first opportunity for Army Medical
    Department officers to compete for commands designated corps
    immaterial. Results of these boards yielded increased facility command
    opportunities for highly qualified Medical Service and Army Nurse Corps
    officers. These colonels will begin to assume their new duties this
    Spring and Summer. In addition, the Army Medical Department has
    identified and opened appropriate non-command senior leadership
    positions to the best-qualified officers of each Army Medical
    Department Corps.
        Most noteworthy in this area, Major General Nancy Adams, Army Nurse
    Corps, was selected to be the Commander of Tripler Army Medical Center
    and took command of that organization last summer. Brigadier General
    Marianne Mathewson-Chapman, Army Nurse Corps, was selected to be the
    Deputy Surgeon General/Special Assistant Army National Guard in the
    Office of the Surgeon General. Brigadier General Mack Hill, the Medical
    Service Corps Chief, recently assumed command of Madigan Army Medical
    Center and the Western Regional Medical Command. All are firsts for the
    Army Medical Department.
        Reserve Component Integration.--The Army depends heavily on its
    Reserve Component for medical support. About 70 percent of the Army's
    medical forces are in the Army Reserve and Army National Guard--
    representing approximately 273 medical units. Several efforts over the
    past several years have improved some aspects of reserve readiness. For
    example, Medical Command and U.S. Army Reserve Command signed a
    Memorandum of Understanding that allowed closer interaction and support
    between reserve and active duty assets. Medical Command has also
    established Regional Medical Commands that are responsible for active/
    reserve integration in their respective geographical areas.
    Additionally, for the first time we have captured and documented
    Reserve Component individual medical readiness requirements and are
    progressing to insure they are equally considered for appropriate
    funding.
        Although these efforts have been successful in meeting their major
    objectives, we continue to have serious problems in other areas, most
    notably acute shortages of physicians and dentists in many reserve
    units. With a loss rate higher than our gains every year since Desert
    Storm, the current recruiting incentives are obviously not meeting the
    objectives of the force.
        It is a very complex set of challenges but we have already begun
    working on the following partial remedies with increased emphasis with
    Recruiting Command on manpower needs; and individualized efforts to
    convince physicians and dentists leaving active duty to join reserve
    units.
        Neither of these efforts alone will solve the problem, but if we do
    a good job in both areas, along with on-going restructuring, we can
    make significant inroads in eliminating the shortages.
        Dental Officer Shortages.--We continue to have concern regarding
    the recruitment and retention of dental officers in the Army Dental
    Corps. Our budgeted end strength for active duty dental officers is
    1,138, and on the September 30, 1998, we had 1,013 in the Dental Corps,
    indicating that we are 11 percent under-strength. We have not been able
    to meet our accession goals for the past 14 years. Additionally, the
    Dental Corps is an aging force. As of September 30, 1998, there were
    292 Dental Corps officers (29 percent of all Dental Corps officers)
    were retirement eligible (20 or more years of Active Federal Service)
    and an additional 55 Dental Corps officers will be retirement eligible
    within one year.
        In response to this, Congress enacted a pay increase for both
    junior and senior officers, and an accession bonus and loan repayment
    program to enhance the recruiting of new officers. The National Defense
    Authorization Act of 1998 also provides for a Multiyear Retention Bonus
    for Dental Specialists.
        We are working to maintain the number of Health Professions
    Scholarship Program scholarships in dentistry and to obtain funding for
    specialists under the Multiyear Retention Bonus. We will continue to
    work in this area and monitor its progress.
        Physician Assistant Shortages.--Since 1992, the number of Physician
    Assistants leaving the Army has exceeded the number of accessions. This
    has resulted in insufficient numbers of Army Physician Assistants,
    creating assignment challenges in prioritizing Physician Assistant
    placements. There are a number of reasons for this problem and we are
    looking at several potential solutions. The solutions range from loan
    repayment for Physician Assistant School and recruitment bonuses to
    expanding the Green to Gold program and increasing the number of
    Physician Assistant Training seats. This problem is receiving a great
    deal of attention and I am confident we will overcome this critical
    shortage.
        Consolidate Regions.--The Army Medical Department has begun to
    align its subordinate organizations in three ways. First, we are
    positioning ourselves around the deployable corps--XVIII Airborne
    Corps, III Corps and I Corps--by focusing on the needs of each of the
    warfighting Commanders in Chief. Also, we are looking to align and link
    ourselves better with TRICARE lead agents. They are increasingly
    important organizations for coordinating health care throughout the
    Army, Navy and Air Force. And, to a certain extent, we're looking to
    align with the Public Health Service and the Department of Veteran's
    Affairs, in order to oversee managed care support contracts and sharing
    agreements.
        We have begun that alignment process by consolidating the Southwest
    Regional Medical Command with the Great Plains Regional Medical Command
    last fall. The expanded Great Plains Regional Medical Command supports
    III Corps, and will focus on Southern Command. The Pacific Regional
    Medical Command and the Western Regional Medical Command have signed a
    Memorandum of Understanding defining their peacetime/wartime support of
    I Corps and Pacific Command, particularly with regard to crossed lines
    of authority in Alaska. The North Atlantic Regional Medical Command and
    the Southeast Regional Medical Command are developing a Memorandum of
    Understanding as to how they will both support 18th Airborne Corps and
    share resources. Southeast Regional Medical Command will focus on
    Central Command and North Atlantic Regional Medical Command will align
    with the Europe Regional Medical Command to focus on European Command.
    These alignments should clarify regional responsibility and facilitate
    and improve training and support relationships.
        Integration of Field Units into Fixed Facilities.--The Army must
    maintain a number of deployable, fully staffed, combat support
    hospitals to meet the early bed requirement for two nearly simultaneous
    Major Theater Wars. Other Combat Support Hospitals are given
    ``Caretaker'' status and must be able to rapidly deploy within 30 days
    to round out the required number of beds needed to support the
    Warfighting force. This helps maintain clinical skills and makes the
    best use of personnel to meet the daily demand for health care. Each
    Caretaker Hospital, with the staff working in the fixed facility,
    provides approximately $24 million worth of health care per year to our
    beneficiaries. Reserve personnel will mobilize to staff the fixed
    hospital when its active personnel deploy with their Caretaker Hospital
    and train with the hospital during their annual training period,
    providing even more cost savings. TRICARE support contracts also
    provide for increasing the level of care and number of providers
    available during times of war or full mobilization.
        Medical Reengineering Initiative.--The Medical Reengineering
    Initiative is the outcome of a process that examined the ten functional
    areas of Combat Health Support to ensure their relevance to future
    operations. It provides for a single, modular hospital and better
    command and control, with treatment teams and streamlined support
    elements. The Army Medical Department is an integral part of the Army,
    and as the Army reduces, so must its medical support. As a result of
    the Quadrennial Defense Review decision to reduce the Army from 495,000
    to 480,000, the Medical Command will be reducing by about 800 military
    spaces. Some of this directed reduction will impact on health care
    providers and ancillary support. Although we are still assessing how
    best to execute our share of the Quadrennial Defense Review decrement,
    Medical Command intends to base its reduction on changes in workload
    and population served. Critical to this analysis will be the protection
    of Medical Command's core competency as a readiness focused health care
    enterprise.
        Reinvention.--The Army Medical Department's commitment to
    reinvention remains strong and enthusiastic. The U.S. Army Medical
    Command has been designated as a Reinvention Center and has committed
    itself to the principles of the National Partnership for Reinventing
    Government as well as the Total Army Quality initiatives. Examples of
    this Center's efforts include a patient centered dental care delivery
    system, the use of innovative practice management to serve more
    patients, more efficient professional development training and the
    implementation of clinical practice guidelines to improve quality of
    patient care.
        In addition to the Medical Command Reinvention Center, the Army
    Medical Department now has five Reinvention Laboratories as well as a
    Science & Technology Laboratory. These laboratories champion
    innovation, encouraging prudent risk taking, removing bureaucratic
    barriers, and linking authority, responsibility and accountability.
                                    prepare
        Readiness Training.--A phased implementation of new standards to
    train all medical soldiers for combat support began October 1, 1998.
    These are not intended to revolutionize the substance of training, but
    rather to ensure wider understanding of requirements and greater
    consistency in implementation. The eight requirements are survival
    skills, weapons training (for selected personnel), collective training,
    competency-based orientation, Deployable Medical Systems training, job-
    specific medical training, job-specific readiness training and a
    briefing on Medical Force Doctrine.
        Battlefield Evacuation.--Clearing the battlefield continues to be
    one of my highest priorities. The platforms designed to evacuate our
    wounded from the battlefield have not kept pace with the modernized
    force and can no longer provide rapid battlefield evacuation. Studies
    conducted on injuries sustained in combat indicate that prompt
    treatment and evacuation of the wounded on the battlefield
    significantly reduces the mortality rate. The use of nuclear,
    biological and chemical weapons on the battlefield could significantly
    delay this process and may require altering the mix of battlefield
    evacuation resources. To meet this prospective challenge, we are
    working to modernize three major evacuation platforms: the UH-60Q
    helicopter, the Armored Medical Evacuation Vehicle, and the Armored
    Medical Treatment Vehicle.
        The UH-60Q is the number one near-term medical modernization issue
    for the Army Medical Department and is critical to early entry, mounted
    and dismounted forces. It improves the medical, navigation and
    communication capabilities of our current UH-60A aircraft. With the UH-
    60Q we significantly improve our capability to evacuate casualties from
    as far forward as the tactical situation permits; conduct combat search
    and rescue; transport medical material and teams on an emergency basis;
    and perform the shore-to-ship evacuation missions.
        The UH-60Q program received partial funding in the current Program
    Objective Memorandum, with funding starting in 2002. Additionally, we
    have a coordinated effort with the Army aviation community to align the
    UH-60Q production with the UH-60 Service Life Extension Program. As a
    result, we will gain a better performing aircraft; have commonality
    across the utility fleet; and save Research, Development Test and
    Evaluation dollars. The total requirement is 357 medevac aircraft--192
    to the active component and 165 to the reserves. Fielding priority is
    in the Department of the Army Master Priority List sequence. Current
    modernization funding projections for the UH-60Q complete the 117
    aircraft requirement identified in Total Army Analysis-05 for Force
    Package One by 2012 and the 75 aircraft in Force Package Two by 2016.
        The Armored Medical Evacuation Vehicle supports ground evacuation
    of our wounded and is intended to replace the M113 Armored Ambulance
    for direct support to the heavy forces. It has the mobility,
    survivability and maintainability equivalent to the supported force,
    all traits lacking in the M113.
        The Armored Medical Evacuation Vehicle is a component of the
    Armored Systems Force Modernization Plan currently being briefed to
    Congress by the Army staff. Development of the Armored Medical
    Evacuation Vehicle is funded from fiscal year 1999 to 2000, however
    procurement is unfunded. Fielding requirements for the active force and
    the enhanced Separate Brigades of the Army Reserve and National Guard
    are 819 vehicles.
        The third leg in our battlefield evacuation triad is the Armored
    Medical Treatment Vehicle. The Armored Medical Treatment Vehicle is
    intended to replace the M577 Battalion Aid Station and is designed to
    provide a protected, trauma treatment workspace in direct support of
    our heavy forces. The Armored Medical Treatment Vehicle is a variant of
    the M4 Bradley and is 100 percent common with the Command and Control
    Vehicle. In addition to the medical workspace improvements, the Armored
    Medical Treatment Vehicle provides the mobility, survivability,
    situational awareness, and communications similar to the supported
    forces.
        A prototype of the Armored Medical Treatment Vehicle performed
    superbly last spring during the Task Force XXI Advanced Warfighting
    Experiment at Fort Irwin, California. Although Armored Medical
    Treatment Vehicle development is essentially complete, procurement
    remains unfunded. Production, however, is possible whenever program
    funding is available. The procurement objective is 142 Armored Medical
    Treatment Vehicles for the Digital Corps and the Army Pre-positioned
    Stocks 3, 4, and 5.
        These three platforms are more mobile, enhance survivability, and
    offer greater medical capabilities than the platforms they are designed
    to replace.
        Special Medical Augmentation Response Teams (SMART).--We have
    organized SMART Teams in our regional medical commands and major
    subordinate commands to give us a preset, ready-to-go capability to
    provide rapid assistance when civilian authorities need help due to a
    terrorist incident, accident or natural disaster. It is possible for us
    to have a few highly-trained specialists on site within a few hours,
    with skills in trauma/critical care, burn injuries, chemical/biological
    casualties, stress management, communications, telemedicine, preventive
    medicine, disease surveillance, veterinary care and health facility
    planning. When Korean Air Flight 801 crashed in Guam last August,
    Tripler Army Medical Center had a critical care team in the air within
    hours to assist the Navy hospital in Guam. Shortly thereafter, the
    Institute of Surgical Research at Brooke Army Medical Center had two
    teams of burn specialists flying to the site to provide care to
    casualties. The teams will give us the capability to get two-to-four
    highly skilled care providers to a remote site rapidly, while larger
    support forces are mobilizing. These teams, primarily based in the
    Continental United States, are designed to quickly respond to regional
    needs, often civilian, and are not designed to replace field units.
        Technology.--We are enthusiastically incorporating advanced
    technology into the way we provide world-class care to our patients.
    Some of our initiatives are:
      --The Personal Information Carrier (PIC) or ``digital dog tag'',
            which will carry medical and personal information on service
            members. Commercial-off-the-shelf candidates were tested last
            summer, and a model built to military specifications will be
            field tested this year.
      --A dry fibrin sealant bandage developed by the U.S. Army Medical
            Research and Materiel Command in conjunction with the American
            Red Cross. Made from the last two proteins in the human blood
            coagulation cascade, and freeze dried on absorbable packing.
            The bandage will set a clot within one minute. Research shows
            it can reduce blood loss by 50 to 85 percent. The Red Cross
            plans to conduct clinical tests and seek Food and Drug
            Administration licensure of the bandage within three years.
      --A high-tech litter with resuscitative and life-sustaining
            capabilities that allows field surgery and care en route during
            evacuation. The Life Support for Trauma and Transport prototype
            was approved by the U.S. Food and Drug Administration for human
            use last June. This approval allows further evaluation by
            Walter Reed Army Institute of Research, using volunteer
            research subjects and patients.
        I would be remiss in discussing technology if I did not also
    mention our refurbished World Wide Web site for Army medicine. It has a
    new look, easier navigation and more updated information. We plan to
    make full use of the site (http://www.armymedicine.army.mil) for rapid
    communication with the public. It regularly carries updates on my Top
    20 priority issues, messages for our staff and copies of our Army
    Medical Department newspaper, as well as information about our
    organization, history and values.
        Telemedicine is a technology to efficiently leverage healthcare
    delivery over long distance. The aims of this technology are to improve
    quality, improve access, enhance provider and patient satisfaction, and
    reduce cost. The technologies that it encompasses may include the
    personal computer with internet and email access, intranet access,
    store-and-forward technology, videoconferencing and digital exchange of
    various types of images. Most of Army Medical Department telemedicine
    is store-and-forward technology usually sent over the internet; this
    involves the capture of still images via digital camera attached to a
    personal computer. Tertiary care physicians can review the images and
    render a diagnosis and return the diagnosis back to the referring
    physician via the internet.
        Last year the telemedicine projects from the six Regional Medical
    Commands were catalogued and can be reviewed at http://www.tatrc.org/
    pages/projects/armyproj.html. There are close to 54 projects being done
    in the Army Medical Department. The majority of projects are in the
    areas of radiology, dermatology, and psychiatry. At the North Atlantic
    Regional Medical Command, there are projects with teledermatology.
    Shortly, this will be deployed at Brooke, Madigan, Landstuhl, and
    Eisenhower Army Medical Centers. Telechocardiography, which is digital
    radiographic examination of the heart, is starting between Fort Belvoir
    Army Community Hospital and Walter Reed Army Medical Center to provide
    echocardiogram support to the military beneficiaries. The Armed Forces
    Institute of Pathology continues to pioneer telepathology throughout
    the United States and to foreign countries. The Center for Total Access
    is doing home health telemedicine for the care of diabetic patients.
    The intent is to improve the compliance and control of the patients
    with diabetes and to prevent inpatient hospitalizations. In the Great
    Plains Region, active neuropsychology telemedicine sessions take place
    between Brooke Army Medical Center and Darnall Army Hospital at Fort
    Hood, both in Texas. In Europe, there are teledentristry programs at 37
    sites. In the Pacific Regional Medical Command, there are a number of
    projects that deal with teleradiology from Korea and Japan to Tripler
    Army Medical Center, Hawaii. There is an internet tumor board to review
    patients from the remote Hawaiian islands with neoplasms and
    subspecialtist in pathology, radiology, surgery, radiation oncology and
    hematology oncology render opinions on the best treatments for these
    patients. In addition, Tripler Army Medical Center has been active in
    the development of video-otoscopy (video inspection of the middle ear)
    for diagnosis of middle ear diseases in patients from remote sites,
    which will be important for early treatment and possible prevention of
    significant hearing loss.
        The Advanced Medical Operations-Telemedicine Advanced Concepts
    Technology Demonstration is an effort to work with Pacific Command and
    the Joint service community to evaluate mature technologies for command
    and control and medical situational awareness. These issues include
    minimizing the medical footprint in the tactical area of operation,
    minimizing the need to evacuate Disease Non-Battle Injury casualties,
    enhancing medical threat information accessibility, and providing
    deployable telemedicine capabilities. The Army Medical Department
    continues to excel in telemedicine and attempts to efficiently leverage
    the care of its beneficiaries over a wide geographic distance.
        Soldier Medical Readiness.--The Medical Protection System, a
    Medical Occupational Data System application, has been identified as
    the system to record, report and archive soldier and unit readiness.
    Implementation of the system is ongoing with anthrax immunization
    tracking being the first module to be completed.
        Ambulatory Data System.--This new automation system captures
    diagnosis and procedure information on outpatient visits. Capturing
    this more detailed clinical information is critical for decision making
    and to support our new costing methodology.
        Clinical Pathway Implementation.--Variation is the enemy of
    quality. Clinical practice guidelines and clinical pathways are road
    maps used to reduce unwanted variation and to maximize the quality of
    care rendered. The use of clinical practice guidelines, the adaptation
    of locally specific clinical pathways and the sharing of information
    will enable us to achieve our overall goals of improving clinical
    outcomes, conserving resources and improving patient satisfaction.
        Initiatives from the National Quality Management Program have been
    incorporated into a database to identify indicators of patient care
    quality for each of our medical treatment facilities. These actions
    coupled with the TRICARE Management Activity Reengineering efforts and
    the activities of the Department of Defense and the Veteran's
    Administration Practice Guideline Working Group are expected to
    facilitate this initiative.
        The Military Health System in partnership with the Veteran's
    Administration began an aggressive effort, in early 1998, to implement
    practice guidelines throughout the system. Extensive efforts are
    ongoing to have guidelines in place to support informed clinical
    decision making for our providers and patients. Our Medical Treatment
    Facilities are now using 103 more clinical pathways than they were a
    year ago.
                                    respond
        This last imperative is where the Army Medical Department differs
    somewhat from the Army's line units. We must not only respond to the
    call to battle in far-off lands, but also to the daily demand for high-
    quality, cost-efficient health care for soldiers, retirees and their
    family members.
        Army medicine answered the call in 1998 as it has every year since
    the Continental Congress authorized a Hospital Department and Director
    General and Chief Surgeon of the Continental Army in 1775. The most
    dramatic example came in August when bombs exploded at American
    embassies in Kenya and Tanzania. Personnel from the U.S. Army Medical
    Research Unit-Kenya joined the medical effort within hours and provided
    support for rescue, treatment and recovery operations for five days. A
    forward surgical team and a combat stress company flew in from Germany
    to help, and 22 casualties were evacuated for treatment at Landstuhl
    Regional Medical Center in Germany, Walter Reed Army Medical Center in
    Washington, DC and Brooke Army Medical Center in Texas.
        A medical task force in Haiti not only supported units remaining
    there, but carried out frequent humanitarian missions to help the
    impoverished people of that island. Other medics on humanitarian
    training missions brought health care to people in Asia, Africa and
    Latin America, and helped the medical establishments of Eastern Europe
    modernize and adapt to post-Communist society.
        In the U.S., we helped alleviate the affects of a winter ice storm
    at Fort Drum, New York, and of an April tornado that swept through Fort
    Stewart, Georgia. In August, Army National Guard medics helped people
    in Texas recover from floods after Tropical Storm Charley.
        As we deal with current requirements for medical support, we also
    must prepare for developing threats. The Army is the executive agent
    for the Department of Defense program to immunize all U.S. military
    personnel against anthrax, one of the most dangerous biological
    weapons. This initiative poses tremendous challenges in logistics and
    record keeping. A million service members, many deployed around the
    world, must receive a series of six injections on the proper schedule
    over 18 months.
        The program began in 1998 with military personnel in Southwest and
    Northeast Asia. It is a high priority to ensure this is done right and
    all indications are we are doing it right.
        Perhaps the biggest challenge, to the implementation of this
    program, is overcoming misinformation that has linked the anthrax
    vaccine to well-publicized illnesses affecting some veterans of
    Operation Desert Storm. This Food and Drug Administration-licensed
    vaccine has been used safely and effectively for 27 years, primarily
    with veterinarians. Additionally, various scientific bodies, such as
    the Presidential Advisory Committee, have also found it to be safe.
    Educating service members, their families and the general public is
    essential and is an ongoing challenge.
        Terrorism may be the greatest threat our nation faces in the near
    future. Small groups that could never stand up to the U.S. military in
    open battle can stage clandestine attacks against our citizens and our
    interests with relatively little danger to themselves. Thus, we can
    expect terrorism to become the strategy of choice for opponents of U.S.
    policies. The Sarin gas attack on Japanese commuters in 1995 revealed a
    new dimension to this form of threat. We have stepped up efforts to
    ensure we are ready to provide assistance to civilian authorities with
    such an incident.
        Quality of healthcare.--Army medical facilities exceed the civilian
    average score on surveys by the Joint Commission on Accreditation of
    Healthcare Organizations. We are particularly proud of Tripler Army
    Medical Center at Honolulu, Hawaii and Martin Army Community Hospital
    at Fort Benning, Georgia, who scored 100 and 99 out of 100 respectively
    and received accreditation with commendation in 1998. The 121st General
    Hospital in Korea received a score of 96 and commendation after its
    first ever Joint Commission on Accreditation of Healthcare
    Organizations survey. Munson Army Health Center at Fort Leavenworth,
    Kansas, received a 98 and commendation in its first survey after
    downsizing from inpatient hospital to clinic; Noble Army Health Clinic
    at Fort McClellan, Alabama, scored a perfect 100 in its first survey
    after downsizing in 1996. The majority of our facilities surveyed in
    the last three years have scored over 90. Success is always due to
    outstanding people and the Army's medical people compare well to any
    health-care organization anywhere and I am proud of them.
        TRICARE.--In 1998 TRICARE, the Department of Defense's managed-care
    initiative, became fully operational in all CONUS regions.
    Implementation has been a challenging journey since the first TRICARE
    contract became operational in March 1995 at Madigan Army Medical
    Center, in the Northwest Region.
        We want TRICARE Prime to be the number one choice of beneficiaries
    as their health-care system. To reach that goal, we must stress quality
    of care, ease of access and customer-focused service.
        A study of the Northwest Region, where TRICARE is most mature, has
    shown increases in use of preventive care, obtaining care when needed
    and satisfaction in making an appointment. There has been a decrease in
    use of the emergency room as a walk-in clinic, keeping it free for true
    emergencies. Most beneficiaries surveyed reported they were satisfied
    with the quality of their care. This was accomplished without increased
    cost to the government.
        We are forging closer relationships between the services and the
    TRICARE Lead Agents to ensure issues requiring immediate action are
    handled without delay. And, as TRICARE continues to mature over the
    coming years, I am confident it will produce the desired benefits in
    terms of healthier military beneficiaries and lower costs for
    taxpayers.
        Another highlight of 1998 was the demonstration of TRICARE Senior
    Prime (sometimes known as ``Medicare subvention''), which began in
    selected locations throughout the Department of Defense. Army medical
    treatment facilities participating are at Madigan Army Medical Center,
    Tacoma, Washington; Brooke Army Medical Center, San Antonio, Texas;
    Fort Sill, Oklahoma; and Fort Carson, Colorado.
        The purpose of this three-year program is to deliver accessible,
    high-quality care to people eligible for both Medicare and military
    medical benefits, without increasing the total Federal cost for either
    Medicare or the Department of Defense. The Department of Defense will
    continue to provide the level of care it has historically provided for
    these ``dual-eligible'' patients and Medicare will pay Department of
    Defense for care beyond that historical level.
        Federal Employee's Health Benefits Program demonstration, TRICARE
    Senior Supplementation, and the pharmacy benefit expansion target
    Medicare-eligible beneficiaries living outside Military Treatment
    Facility catchment areas. Of the eight sites identified, one Army site,
    Fort Knox, Kentucky, will participate in the Federal Employee's Health
    Benefits Program test. Military Medicare eligibles will be able to join
    the Federal Employee's Health Benefits Program during the Fall of 1999
    open season.
        These are all important steps toward meeting our obligation to take
    care of those who devoted a career to military service.
        One way we are operating more efficiently is through closer
    cooperation with the Department of Veterans Affairs. The Army and
    Department of Veteran's Affairs are benefiting from more than 130
    Resource Sharing Agreements, at least 35 Memoranda of Agreement or
    Understanding and nine Interagency Support Agreements. These various
    kinds of agreements have different administrative and funding details,
    but all involve using resources of both departments more efficiently to
    provide services for less cost.
        In addition, many Department of Veterans Affairs facilities are
    participating as TRICARE providers. The Department of Veteran's Affairs
    is treating outpatients in community-based clinics at Fort Belvoir,
    Virginia, and Fort Leonard Wood, Missouri. Tripler Army Medical Center,
    Hawaii provides care for most veterans in the Pacific region. A Joint
    Venture there includes a renovated wing for administrative services, an
    ambulatory care center and a 60-bed ``Center for Aging'' facility. In
    fiscal year 1997, Department of Veteran's Affairs reimbursed Tripler
    $9.5 million for its services. Department of Veteran's Affairs patients
    receive easier access to care, and both agencies benefit by expanded
    training and research opportunities. This is truly a ``win-win''
    partnership.
        We should see greater savings as we move into the era of
    enrollment-based capitation. With an accurate count of beneficiaries
    enrolled in TRICARE Prime through each facility, and with the ability
    of the Corporate Executive Information System to keep ``score'' of
    resources expended, we can make better financial decisions. However,
    there is a bottom below which we cannot responsibly go. Our priorities
    must be to provide quality medical care, to keep faith with our service
    members and to invest in the future so the quality of our medical
    program will keep pace with advances in medical science.
        As I mentioned previously, each of our medical treatment facilities
    displays the Military Health System ``report card''. This compares the
    actual quality, access and satisfaction performance of that facility to
    published standards or to civilian norms. We exceed the standards in
    almost every area, though we seek continuous improvement, particularly
    in access. Our system must remain firmly rooted in the unique values of
    military medical service. The system must never be used to deny care,
    but rather to facilitate appropriate care in a proper setting.
        Health Promotion and Preventive Medicine.--Whether engaged in armed
    conflict, deployed in support of peacekeeping operations, participating
    in any operation other than war, or training in garrison, commanders
    are concerned about any potential threat to the mission. In particular,
    commanders are becoming increasingly concerned about the health threats
    their personnel face and the ways to prevent these threats. This
    concept, designated Force Health Protection has three basic tenets:
    provide a healthy and fit force, prevent diseases and non-battle
    injuries, and care for casualties.
        The vision for Force Health Protection requires a robust public
    health surveillance capability to provide commanders the timely
    information needed to identify and neutralize the health threats to
    their troops. The limited capability of the Department of Defense to
    address health concerns of veterans of the Gulf War (1990-91) with
    valid and timely data on force health and potentially hazardous
    exposures reinforces the need for comprehensive military medical
    surveillance.
        Medical surveillance is defined as the timely, routine, and
    systematic collection and analysis of pertinent health information on a
    defined population and dissemination of this information to those who
    need to know. Comprehensive military medical surveillance is conducted
    to reduce or prevent illness and injury, and targeted to assist
    commanders and other decision-makers.
        Comprehensive military medical surveillance is a Department of
    Defense capability to provide timely information (at the tactical,
    operational, and strategic levels) on a broad range of indicators of
    health in populations of interest unique to Department of Defense
    (active duty, civilian workforce, etc.).
        Some of the major health indicators are population factors,
    including demographic risk factors (age, sex, and military occupation);
    potentially hazardous exposures (including workplace and deployment-
    related exposures); use of protective measures and equipment
    (immunizations, personal, protective equipment); personal risk factors
    (smoking, alcohol use, stress, pre and post deployment screening);
    health outcomes (injury, illness, sentinel health events); clinical
    screening (occupational ``medical surveillance''); relevant data
    elements are integrated and analyzed in order to provide population
    based information at the corporate level to support policy decisions. A
    major product of this effort is the construction of a series of related
    ``accession though retirement'' databases on the Department of Defense
    populations of interest.
        One of our recent significant successes used distance-learning
    technology to educate military and civilian health care providers on
    the care for biological warfare casualties. Through satellite links,
    17,319 medical professionals at more than 583 downlink sites in the
    U.S. and overseas were able to tap in to the expertise of the U.S. Army
    Medical Research Institute of Infectious Diseases in treating injuries
    from biological weapons. Cosponsored by the Centers for Disease Control
    and Prevention, the 12-hour course included information on the medical
    consequences of a bioterrorist attack and scenarios on defense against
    battlefield biological threats.
        Our researchers are continuing to develop vaccines against a
    variety of diseases, both naturally occurring and those that may be
    employed as biological weapons. In addition to protecting soldiers,
    this work can make a great contribution to civilian health. An
    antitoxin developed by the U.S. Army Research Institute of Infectious
    Diseases saved the life of an Ohio infant suffering from botulism last
    January. U.S. Army Research Institute of Infectious Diseases arranged
    an overnight shipment of the antitoxin when their assistance was
    requested, and after administering the antitoxin, the baby girl began
    to show improvement within hours. The antitoxin is an Investigational
    New Drug developed to protect soldiers on the battlefield but clearly
    such research can be beneficial to civilians as well.
        The world is constantly changing and as the Army and the Army
    Medical Department adapts to these changes, we will continue to focus
    on our core values and functions. We will maintain our position as a
    world class system capable of continuing Army Medicine's proud
    tradition of ``Caring Beyond the Call of Duty.'' Mr. Chairman, thank
    you again for the opportunity to appear before the committee.

                             Walter Reed angio CAT

        Senator Stevens. General, I am constrained to leave here in
    a minute, but I have one question I would like to ask you, or
    maybe two. Have you been out and seen the angio computer aided
    tomography (CAT) at Walter Reed?
        General Blanck. Yes, sir.
        Senator Stevens. Is it functioning properly?
        General Blanck. It is functioning very, very well. Right
    now we are doing the electron beam computed tomography (EBCT).
    We have over 2,000 patients that have gone through that. It is
    functioning extremely well and, as you point out, it is the
    basis for the development of the volume angio computerized
    tomography which will allow us to do the three-dimensional
    imaging.

                       time line for Angio CAT employment

        Senator Stevens. That is the one I am interested in. We
    hoped that would be ready for, God forbid, the next war, but we
    are in the next war now, and the angio CAT too is not there.
    How far away is it?
        General Blanck. We are working it with the company in Los
    Angeles, and they ought to have a prototype based upon the EBCT
    probably within the next year.

                             funding for Angio CAT

        Senator Stevens. That is disappointing, because it was 2
    years ago we thought it would be here this year. Has it been
    properly funded, fully funded?
        General Blanck. It has been properly funded, and it is just
    taking that long to meld all the technology together.

                           function of the Angio CAT

        Senator Stevens. As I understand the goal of that would be
    that if a person was injured in combat, and that was in the
    vicinity, that that injured person could be placed in a chair
    and in about 90 seconds scanned and have three different
    computers read out the problems and instruct the corpsman what
    to do to save that life.
        General Blanck. Exactly right, in a very, very short period
    of time, a minute, somewhat less, somewhat more. A casualty
    would go through, you could see the entire vascular system, all
    the other anatomic structures, and the computer would, in fact,
    direct the corpsman, in fact could even potentially have the
    computer place a catheter, for example, which would have it go
    to where a wound is.
        Senator Stevens. That is angio CAT 3, but I am interested
    in number 2. I would urge you to inquire and see what we can do
    to speed that up. If that ground war starts over there, we
    ought to have a dozen of those in the area because that is
    modern medicine to the nth degree, in my opinion.
        General Blanck. Absolutely. That technology is phenomenal,
    and I will look at it.
        Senator Stevens. Did you go through the angio CATs?
        General Blanck. Yes, sir.
        Senator Stevens. Have you put him through it, and you are
    not supposed to tell your patient's business, I know. A few of
    my friends ought to go through that and understand what it
    means. It is really preventive medicine in the sense of the
    first person. The second is trauma treatment in an instant, and
    I think we should have that if it is at all possible.
        General Blanck. I know General Roadman has gone through it
    too, and the irritating thing is, he has a lower score than me.
        Senator Stevens. I went through it, too, but it is about
    time for my second trip, I think. I have not been for years. I
    went through the manufacturers. I just went out to test it. I
    figured if it could diagnose me, it could diagnose anybody.
        Thank you very much, Mr. Chairman, you have the gavel.
        Senator Inouye [presiding]. Thank you. General Roadman.
    STATEMENT OF LT. GEN. CHARLES H. ROADMAN, II, AIR FORCE
                SURGEON GENERAL

                               summary statement

        General Roadman. Thank you. I have submitted my statement
    for the record. I would like to start off by saying that--
    addressing the chairman's comment, and that is that the budget
    for 1999 is executable. I do not think I would say minimally
    executable. It is executable. That we will not be turning
    patients away, or restricting their care. We project that in
    2000 and 2001 that is also true, and a lot of work is being
    done for the 2002, 2005 budget.
        We would like to thank this committee for all their support
    in helping us resolve the 1999 issue. We are in a time of great
    change, as the Air Force transitions to an expeditionary Air
    Force and the combat support requirement medically. We are
    finding that we are having to redo our unit-type codes (UTCs)
    and to take our medical system from a cold war structure into a
    very reactive plug-and-play clinically capable force. We have
    done that and are finishing up our fourth year of
    reengineering, have all of our UTC's reengineered, and are now
    in the acquisition phase.
        Second, we are deploying and employing TRICARE. TRICARE is
    the backbone of readiness in our peacetime care for our
    families, and it is a critical meld of understanding both our
    wartime mission and our peacetime mission and the outsourcing
    and privatization that is occurring as the size of the military
    becomes smaller.
        In addition to that, in order to go into a modern health
    care system we are in the phase of transitioning from a body
    fix it approach to health care to one where we can prevent
    where we can, and a population focus on health as well as a
    focus on world class health care. That requires different
    training, different equipment, different mind set for our
    providers and, by the way, it requires a different force
    structure as we begin to look at what is required to do that.
        Now, it is clear that many of our administrative procedures
    that the Secretary has talked about need to be improved with
    claims payment and those types of issues. We are on the way to
    do that.
        I will tell you, in my estimation TRICARE is a great
    success. We still have a long way to go, but we are making
    great progress.
        The things that we are doing are really the outcomes of the
    strategy that I briefed to this committee over the past several
    years, which we call the Parthenon strategy, which is a five-
    point plan to reengineer medical readiness, which we have done
    to employ TRICARE. It used to be deploy TRICARE. We have
    deployed it. We are now in the employment, and that is an
    ongoing thing that we must constantly pay attention to.
        We are in the final phases of our tailoring the force,
    which is really getting the right patient with the right
    provider at the right facility at the right time, and it is an
    understanding that health care in fact is a process, not a
    place, and as Senator Shelby knows, we have taken a World War
    II type big hospital, converted it to an ambulatory care
    superclinic which is world class, and what we will do is, we
    will increase the access, even though we will purchase patient
    care downtown, and so you see a melding of the civil sector as
    well as the military. I think it is the model that we will see
    in the future.
        In addition, we are building healthy communities, which
    involves intervening so early that we call it prevention, and
    that is, about 70 percent of premature deaths in our country
    are due to lifestyle, and that is due to lack of exercise,
    nutrition, unsafe sex practices, and other issues.
        The real issue is, our system in the past has been focused
    on, when people present with findings and symptoms, it is
    taking care of those, yet what we really need to do is go so
    far upstream and begin to intervene in things like smoking
    cessation and alcohol limitation and those types of issues. If
    we do that, we can significantly decrease the human toll as
    well as the fiscal cost, and I believe it is the ethical thing
    for a health care system to do that.
        And then the fifth component is customer satisfaction. Now,
    clearly, as a physician I will tell you I rankle when we talk
    about customers, because it is patients that are the coin of
    the realm. On the other hand, we have combatant Commander in
    Chief (CINCS), we have wing commanders, we have third party
    payers, we have a whole panoply of folks that we need to be
    able to satisfy, so what we have really got to do is optimize
    the health care outcomes, the health care costs, and the
    services that we provide, and it is that optimization that we
    find our system struggling with.
        Again, we have a plan but we still struggle. We are
    struggling together, I must tell you, in that all the things we
    are doing we are doing synergistically with the Department of
    Defense, with our sister services, and with the Veterans
    Administration, but as we focus on the future, I believe that
    it is incredibly important that we begin to lead turn into
    something we see coming, and the health care system that I
    think we owe you and we owe our Nation and we owe our people is
    one that prevents disease when possible and cures disease when
    necessary, but begins to balance those and move them more
    toward prevention.

                               prepared statement

        It is clear that we have got to add value to our patients
    and our parent services. I think we are making great progress
    in that. I look forward to answering your questions and again,
    I thank you for the time and the ability to speak.
        Senator Inouye. Thank you very much, General.
        [The statement follows:]
             Prepared Statement of Lt. Gen. Charles H. Roadman, II
        Mr. Chairman and members of the committee, thank you for this
    opportunity to address the goals and accomplishments of the Air Force
    Medical Service (AFMS) in realizing our vision for the future. I
    consider it a privilege to appear before this committee who has worked
    so hard on our behalf.
        As the Air Force prepares to enter the next millennium with a new
    organizational paradigm, the Expeditionary Air Force, the Air Force
    Medical Service will provide expeditionary medical support by
    transitioning from hospital-focused support to primary care and
    essential care. The AFMS ``Parthenon'' strategy will continue to be the
    foundation for Air Force health care into the next century. Our efforts
    under the strategic pillars of medical readiness, employing TRICARE,
    tailoring the force, and building healthy communities, with the
    capstone of customer satisfaction, have resulted in the most fit and
    healthy force in our history. We have the ability to provide state-of-
    the-art medical care to our personnel under any condition, anywhere in
    the world. Our strategy also has ensured a health care system able to
    provide high quality care to our Air Force family members. Now this
    strategy is mature enough to support our vision of population-based
    health care management (PBHM), using a total community approach. We
    believe this is an important template for the Military Health System.
    Population-based Health Care
        Population-based health care seeks to improve the overall health of
    a specific population through needs assessment, proactive delivery of
    preventive services, condition management, and outcome measurements.
    Its success depends on an interactive relationship among all elements
    of the community. The community approach has already been tested and
    proven by the Air Force. For example, in response to a community
    problem, suicide, the Air Force established an Integrated Product Team
    (IPT), comprised of members from various functional specialties--such
    as chaplains, security police, family advocacy, legal services, and
    mental health--and chaired by the AFMS. As a result of the IPT's
    efforts, suicides have declined 40 percent within the Air Force during
    the past two years--in 1998, we had the lowest number of suicides in 20
    years. The Air Force suicide prevention program has been applauded as a
    benchmark for both the public and private sector.
        Following this success, the IPT concept was expanded to our
    Integrated Delivery System (IDS), which links the synergy among base
    agencies to promote help-seeking behavior and integrate prevention
    programs. The IDS addresses risk factors through a collaborative,
    integrated, customer-focused prevention effort designed to offer
    programs such as stress and anger management, personal financial
    management, and effective parenting. These programs support readiness
    by reducing risk factors and building the performance-enhancing life
    skills of our community members.
        The concepts of a healthy community involve more than just medical
    interventions. They include local environmental quality and hazards;
    quality of housing, education, and transportation; spiritual, cultural
    and recreational opportunities; social support services; diversity and
    stability of employment opportunities; and effective local government.
    Impacting these elements requires long-term, dedicated planning and
    cooperation between local Air Force commanders and civilian community
    leaders. The process will also involve changes in doctrine and policy.
    If we are serious about improving quality of life for our personnel--
    and the senior Air Force leadership has testified that we are--then we
    must impact all areas that touch people's lives--they are the essence
    of quality of life.
    Medical Readiness
        Population-based health care is essential to our first pillar,
    medical readiness. By ensuring that active duty members can deploy
    anywhere, anytime, with little notice, we provide our leaders and
    commanders with their most critical weapons system: a healthy and fit
    fighting force. Our tool to assure individual readiness for any
    contingency is the Preventive Health Assessment (PHA). The PHA changes
    the way the Air Force performs periodic physical examinations from a
    system based on episodic intervention, which has not been effective, to
    a system that stresses an annual review of the entire population using
    principles of epidemiology and prevention. The goal is to identify risk
    factors from a person's life-style--such as whether a person smokes,
    how frequently he exercises, and his diet--as well as his genetic
    background, individual health history and occupational exposure. Then,
    through proper prevention practices, we assist the member to moderate
    those risks, resulting in a more fit member capable of accomplishing
    the mission.
        By managing the health of our active duty members, we in turn
    manage the health of entire units, addressing the requirements of the
    theater commanders. We have now established five readiness metrics for
    evaluation by our Performance Measurement Tool (PMT): PHA completion,
    medically related lost duty days, immunizations status, dental
    readiness and fitness status. This data will provide the unit commander
    vital information about the health readiness of his or her unit.
        We also seek to safeguard the readiness of our troops through force
    health protection initiatives. For example, we have an extensive array
    of deployable medical capabilities, which ranges from four-person Air
    Transportable Clinics to 90-bed Air Transportable Hospitals. In
    addition, wide ranges of preventive health teams exist, such as the
    Preventive Aerospace Medicine Team, Theater Epidemiology Team, and the
    Bioenvironmental Engineering Nuclear-Biological-Chemical (NBC) Team. We
    have continued the deployment of new specialty teams--such as
    infectious disease, mental health rapid response, air transportable
    dental clinic, and pediatric teams--which we will complete by the end
    of the year 2000. In July of 1997 we conducted a form, fit, and
    function test of these newly reengineered specialty teams. We
    incorporated the results of this test into the improved Concept of
    Operations (CONOP's) and allowance standards (equipment sets), and have
    just concluded a second test to assess the improvements made to the
    specialty teams. Our next step will be to procure the new specialty
    sets.
        In April 1998, a multidisciplinary team completed development of
    the Air Force Theater Hospital (AFTH) CONOP's. These facilities will
    replace our current contingency hospitals by the end of fiscal year
    2000. They will provide a modular, incrementally deployable capability
    to provide essential care. They use existing ATH and specialty teams,
    along with pre-positioned (buildings) and deployable (tents) AFTH's.
        Our top priority at this time is to formulate an expeditionary
    medical support package to support the Expeditionary Air Force (EAF)
    concept. Our goal is to reengineer our core assemblages so we can
    deploy first responder packages with multi-skilled personnel to any
    theater of operation within 72 hours. Our efforts in previous years to
    develop modular, flexible, and interoperable teams provide an excellent
    working base. We recognized the need to reengineer the Air
    Transportable Hospital to ideally support the EAF as well as to better
    mesh with the Air Force Theater Hospital CONOP's. The objective is to
    provide required capability while at the same time absolutely
    minimizing weight and cube. The new Air Force Theater Hospitalization
    and Expeditionary Medicine (EMEDS) CONOP's, personnel packages, and
    allowance standards are projected to be completed by September 1999.
        Within the EMEDS, forward resuscitative surgical capability will be
    provided by the Mini Field Surgical Team (MFST), a five-person, man-
    portable (300 pounds) team. Stabilization will be done by a ground
    version of our new Critical Care Air Transport Team (CCATT).
        In addition, the AFMS will support the EAF with a robust and
    capable aeromedical evacuation (AE) system that will facilitate
    transport of the stabilized casualty as we provide primary care and
    essential care in theater. Throughout contingency and humanitarian
    operations, Air Force AE flight crews and CCATT's provide in-flight
    care to quickly move stable and stabilized patients.
        The CCATT, which adds an intensive care capability to routine
    medical flight crews, provides high quality enroute care without
    draining staff and equipment from theater commanders. For example, the
    AFMS sent two CCATT teams to Ecuador in February 1998 in response to
    Ecuador's largest pipeline explosion, which caused a fire that killed
    11 people and badly burned another 60. The teams, from Wilford Hall
    Medical Center, Lackland AFB, successfully evacuated six patients to
    burn hospitals in Galveston, Texas. To support this valuable asset, we
    began a certified CCATT course in October 1997 and now have trained 133
    CCATT's, and will have more than 50 kits in the inventory by this
    summer.
        Last September, we began the Aeromedical Evacuation Contingency
    Operations Course (AECOT). This course will ensure we have well trained
    personnel familiar with standardized aeromedical ground support. Later
    this year, the course will be conducted simultaneously with the ATH
    course, allowing personnel from both weapons systems to benefit from
    their synergy.
        Telemedicine will play an increasingly important role in our
    aeromedical evacuation mission under EAF. As DOD Executive Agent for
    airborne telemedicine, the AFMS continues to pursue the insertion of
    telemedicine into the aeromedical environment. Air Force human systems
    experts researched available technologies and recommended the use of
    existing Government Off-the-Shelf (GOTS) military satellite
    technologies to provide communications links from the aerovac
    platforms. Medical data can be transmitted to/from the patient
    compartment of the cargo aircraft and sent to the appropriate
    telemedicine referral centers as required. Additionally, clear voice
    communications can be utilized for provider-to-provider consultation as
    needed. We will be conducting the operational testing phase of this
    system this year in concert with major exercises, such as Patriot
    Medstar, and the Joint Medical Operations Telemedicine Advanced Concept
    Technology Demonstration.
        Finally, no discussion of Air Force medical readiness is complete
    without recognition of our Guard and Reserve counterparts'
    contributions to our mission. The Guard and Reserve have long been
    recognized for their vital role in our wartime aeromedical evacuation
    mission, for which they provide 93 percent of the capability. Our
    Mirror Force strategy, which provides a blueprint to organize, train
    and equip active duty, Guard and Reserve medics as one integrated team,
    will increasingly prove its value as more operational missions transfer
    to the Guard and Reserve in the future. Last summer, the Air Force
    Reserve Command and Air National Guard deployed ATH units to support
    Operation SOUTHERN WATCH at Prince Sultan Air Base, Saudi Arabia. In
    addition, the Air National Guard began rotations at the Eskan Village
    Clinic in Riyadh in January. Medical readiness personnel from the Air
    Force Reserve Command and Air National Guard will continue to serve
    rotations in the Joint Task force-Southwest Asia theater planner
    position.
        These Air Reserve Component deployments have been so successful
    that the senior medical leadership has decided to conduct integrated
    deployments in the future--active, Guard and Reserve members will
    deploy together to provide medical support in theater. Additionally,
    the Guard and Reserve are actively participating in the planning and
    implementation of the Expeditionary Air Force for medical forces. They
    will continue to be active partners in our efforts to maximize the
    medical readiness capability of the AFMS by achieving a seamless,
    integrated medical force through the use of all components.
    Employ TRICARE
        Because combat readiness begins with the health and fitness of
    individuals--who depend on highly skilled health care providers--our
    peacetime health care system, TRICARE, remains the backbone of our
    medical readiness mission. Therefore, it is essential that TRICARE
    continue to evolve to meet the needs of the military population.
    Fortunately, TRICARE Prime represents a solid foundation for
    population-based health care, which must be built on an enrollment
    system to more accurately capture the size, characteristics, and unique
    needs of the patient population. Thus our second pillar, Employ
    TRICARE, is key to the success of our population-based health care
    management goals.
        TRICARE, the Department of Defense's managed care system, concluded
    its implementation during this last year with the standup of the
    Northeast U.S. regions. While this makes TRICARE available to all of
    our eligible beneficiaries, there are still several hurdles to overcome
    to maximize its effectiveness, such as difficulties with claims
    processing and CHAMPUS Maximum Allowable Charge (CMAC) rates, and
    improving beneficiary awareness. We are working these issues diligently
    with the Lead Agents and the DOD TRICARE Management Activity.
    Unfortunately, as with the civilian sector, we are frequently met with
    local resistance to managed care, from local medical societies,
    civilian providers and our patients. This is all part of the education
    process with which we are challenged.
        We are encouraged by the steady increase in patient satisfaction
    with TRICARE, as evidenced by recent survey data. This data shows that
    93 percent of TRICARE Prime users would reenroll in TRICARE. We are
    particularly proud of the fact that TRICARE fares extremely well when
    compared to patient satisfaction with civilian HMO benefit packages.
        TRICARE Prime brings together all the tools of population-based
    health care. In concert with the TRICARE support contractors, self-care
    and health-care information line programs have been instituted at each
    medical treatment facility (MTF), forming the basis for demand
    management. By providing such services as the Health and Wellness
    Centers (HAWC's), the Health Enrollment Assessment Review (HEAR)
    survey, and Put Prevention Into Practice (PPIP), we enable patients to
    access the best possible resources for improving their overall health
    and to become educated, responsible consumers. We're developing policy
    and programs where each MTF will use population needs and health
    assessment information to prioritize and proactively deliver evidence-
    based clinical preventive services. As part of our PPIP program, we
    established prevention committees at each of our MTF's. The senior
    medical staff, in consultation with the MTF Prevention Committee and
    using demographic and health assessment information, can ensure that
    appropriate appointments and ancillary services are available to
    support preventive interventions for the empanelled population.
        Over the next year, we look forward to continued refinement of the
    health care delivery process in Air Force facilities, to include
    sharing arrangements with the Department of Veterans Affairs (DVA), as
    well as managing our Medicare Subvention and Federal Employee Health
    Benefits Program (FEHBP) demonstrations, which will help us serve the
    needs of our over-65 retiree population.
        The Air Force has a long heritage of resource sharing with the DVA.
    Today we have 100 agreements with the DVA, sharing more than 270
    services. In addition to our two joint ventures at Albuquerque, New
    Mexico, and Las Vegas, Nevada, we will be establishing a new joint
    venture in Alaska with the May opening of our new hospital at Elmendorf
    AFB. We're pursuing numerous joint initiatives with the DVA to improve
    mutual efficiencies. For example,
      --Clinical guidelines improving the standards of care will be shared
            across the Services and DVA, enhancing continuity and outcomes
      --Discharge physicals will be ``one-stop shopping'' through one
            organization
      --Numerous DOD and DVA staff have been collaborating to establish one
            computerized record that could be used during and after active
            duty service
      --DVA representatives are participating on the DOD pharmacy redesign
            working group to establish standardization between agencies
            where feasible.
        We are also excited about our efforts to better serve the over-65
    retiree population. All of our five Senior Prime demo sites have now
    begun seeing patients, and additional enrollment capacity still exists
    at most sites. We are optimistic about the prospects of Senior Prime
    for our older retirees, and believe that these demos will show we can
    provide high quality medical care for less money than can the civilian
    sector, particularly in our larger facilities. However, we do have some
    concern regarding the financial implications of Senior Prime for our
    smaller facilities, which will be required to buy a significant amount
    of needed care from the civilian sector. That is the value of the
    demonstration: a trial period to test whether the program is
    financially viable at our small facilities as well as our large ones.
        Our alternative demo at MacDill AFB, MacDill Senior, has enrolled
    all 2,000 participants and provides the full scope of primary care
    services while meeting TRICARE access standards. MacDill also will
    provide specialty care within the capabilities of the facility. Reports
    of the demo so far have been very positive--our patients are delighted!
        These demos are an important first step for our Medicare-eligible
    retirees. We welcome the opportunity to test other alternatives and
    fully support the FEHBP demonstration and pharmacy benefit redesign
    requested by Congress. Along with our sister Services, we remain
    committed to fulfilling ``the promise'' these deserving beneficiaries
    believe were made to them.
    Tailored Force
        Our ability to continue providing quality health care to the
    military family depends on the effective use of all our resources--
    people, facilities and money. Population-based health care management
    is driving the methods the AFMS uses to plan for and allocate resources
    to our MTF's, and is therefore vital to our tailored force pillar.
    Financial and manpower resources will be determined first by the unit's
    readiness mission, second by operational support to the base mission,
    and third by the health care needs of the enrolled population. We have
    developed and implemented tools such as Enrollment-Based Capitation
    (EBC) and the Enrollment-Based Reengineering Model (EBRM) to properly
    size and resource our MTF's to meet their mission requirements and the
    health care needs of their population. The primary objective of
    tailored force is to develop an overarching strategy that will optimize
    the overall force size, while it ensures we have the right number of
    people with the right skills at the right place and right time.
        Enrollment-Based Capitation (EBC).--The AFMS is a strong supporter
    of the Defense Department's development and implementation of a
    capitation model that allocates funds to a specific medical treatment
    facility (MTF) based on their enrolled population, rather than merely
    allocating between the three services based on an estimated user
    population. EBC results in making MTF commanders fully accountable for
    all the resources used by their TRICARE Prime enrolled population. The
    evolution from a workload-based resource allocation system to an MTF-
    enrolled population system makes this possible. Unlike the past,
    commanders will know which TRICARE Prime patients they are financially
    responsible for and how much they are being given for the care of these
    patients.
        Enrollment-Based Reengineering Model (EBRM).--The traditional
    method of using historical workload of an ``unenrolled'' population to
    determine staffing requirements for Military Health System (MHS)
    components is outmoded. The EBRM is the Air Force's latest tool for
    determining manpower requirements for a managed care delivery system
    with an enrolled population. This model relies on civilian studies
    validating physician-to-beneficiary-population ratios, AFMS-generated
    data on support staff-to-physician ratios, and MTF-reported enrollment
    projections. The model was developed by an Air Staff Integrated Process
    Team (IPT), which included representatives from all Major Air Commands.
    Consistent with changes in the civilian sector delivery of health care,
    the model shows more primary care physicians are required than
    specialists, particularly as the health care industry shifts from an
    inpatient to an ambulatory care setting. The EBRM also suggests the
    ``ideal'' support staff ratios, according to our consultants involved
    in the development of the model; they were not constrained by the old
    ways of doing things. Finally, the EBRM IPT modeled a ``robust''
    primary care delivery system in which the Primary Care Manager (PCM) is
    expected to provide comprehensive care in the primary care setting,
    rather than merely acting as a gatekeeper of care.
        These system improvements are crucial in allowing us to effectively
    execute our tailored force strategy. This strategy, although initially
    directed from senior leadership, has been validated through a
    comprehensive strategic planning process, essentially a bottom-up
    review and analysis. The end product is a roadmap that will reengineer
    how care is delivered in the AFMS. Programmed changes will result in
    fewer inpatient services throughout the AFMS. Inefficient small
    hospitals will convert to clinics as we move to a prevention-based
    system. Inpatient care at these clinics will shift to the civilian
    community resulting in a greater partnership within the community and
    significant improvement in efficiency and quality of care. At the same
    time, this shift will allow increased access to primary care services
    in the MTF as we free up precious resources that have been
    underutilized in inpatient care. While we have already completed 50
    percent of this reengineering effort, we have a formidable two years
    ahead of us as we strive to achieve the strategy by the end of fiscal
    year 2000. Our facilities are committed to communicating these changes
    promptly and openly with their beneficiaries--your constituents--and
    their local civic leaders and members of Congress.
        In summary, the ultimate outcome of a reengineered system using EBC
    and EBRM is a system in which the MTF's enrolled population drives
    money and manpower. The majority of health services will be delivered
    through prevention programs and well-supported PCM's. EBC and EBRM
    encourage MTF commanders to enroll their beneficiaries and retain them
    as satisfied customers while emphasizing preventive and primary care as
    the preferred delivery setting.
    Building Healthy Communities
        The prevention paradigm of our fourth pillar, Building Healthy
    Communities, is the cornerstone of the population-based health care
    management system. Previously we concentrated on individual health care
    through clinical intervention, but now we are using the community-
    approach, population-based initiatives. For example, three major areas
    we are targeting at the community level are decreases in tobacco use,
    alcohol abuse, and injuries. The Under Secretary of Defense for
    Personnel and Readiness has established a DOD Health and Safety
    Promotion and Injury/Illness Prevention Council, with the Air Force as
    its executive agent, to address these areas. The Air Force is the lead
    service for promoting tobacco use avoidance and cessation; the Navy is
    the lead service for alcohol abuse, and the Army for injury and illness
    prevention. We feel very confident in our ability to lead in the fight
    against tobacco use--thanks to years of hard work, tobacco use is at an
    all-time low in the Air Force.
        We're also very proud of our success in the prevention of family
    violence, and I make particular note of this in light of a recent ``60
    Minutes'' story on domestic violence in the military. The Air Force
    Family Advocacy Program (FAP) is a comprehensive network of family
    programs and services, with 600 professionals serving families at 80
    installations worldwide. Our proactive approach and emphasis on early
    intervention allows us to provide services to families at an earlier
    stage of the domestic violence cycle. We believe these efforts are
    paying off. Not only are substantiated rates of child and spouse abuse
    declining, but the rates of severity of abuse are also decreasing. From
    1990-1994, we averaged six deaths a year as a result of domestic
    violence--since 1995 we've averaged less than one death a year, clear
    evidence that our awareness and prevention programs are making a
    difference. However, we must continue to improve, for any loss of life
    or emotional scar is too many.
        Our Health and Wellness Centers (HAWC's) continue to promote health
    and fitness for our people. These centers have been established at each
    Air Force installation as central points to focus on opportunities to
    promote and enhance health, fitness, and performance in the general
    beneficiary population. All Air Force bases have at least a full-time
    Health Promotion Manager, and every HAWC has an exercise physiologist
    to manage the USAF (including the Air Reserve Component) fitness
    assessment program and provide fitness counseling and prescriptions.
        Another essential element of our Building Healthy Communities
    pillar is the Health Enrollment Assessment Review (HEAR) survey, which
    identifies behavioral health risk factors, the need for clinical
    preventive services and management of chronic diseases. Information
    from this survey is used at multiple levels: the individual, the
    primary care manager, the MTF, the TRICARE region, and the Air Force
    itself. In November 1998, the Department of Defense began to use a
    software program automating the HEAR. This incorporates the use of
    numerous survey data into a global approach to understanding population
    health needs and status, and provides information from all branches of
    the service.
        We have an aggressive fitness and performance enhancement research
    program headed by a newly created Force Enhancement and Fitness
    Division at our USAF School of Aerospace Medicine, Brooks AFB, Texas.
    In support of an Air Force Chief of Staff decision, the AFMS will
    enhance the USAF fitness program by adding muscular strength,
    endurance, and flexibility assessments for all members, and will
    develop performance-based occupation-specific physical conditioning
    programs. We will be testing these changes and determining the
    standards throughout 1999, and anticipate final implementation in
    January 2000. We've invested in our personnel and most are certified in
    their specialty (i.e., as health promotion managers, physiologists) and
    attend annual professional conferences to enhance their certification
    or education. Aerospace medicine, public health, bioenvironmental
    engineering, and occupational medicine personnel focus on opportunities
    to promote and enhance worksite health.
    Customer Satisfaction and Quality Care
        Prevention is the key to a better quality of life for our personnel
    and their families. Healthy, happy patients are satisfied customers.
    This is so important to us that we've identified customer satisfaction
    as the capstone for the AFMS strategy. We must ensure that our customer
    satisfaction efforts include our external customers, our military
    leaders and patients, as well as our internal customers, our medical
    staff personnel.
        As a means to provide overall guidance, a customer satisfaction
    task force, known as our ``Skunkworks,'' was formed in 1996. The task
    force developed a three-phase strategy to create a climate and culture
    where customer focus and service permeates all that we do in the AFMS.
    In Phase I, we researched best business practices in the public and
    private sectors to establish our program framework and develop tool
    kits. We have just completed Phase II of our three-phase strategy,
    which involved deployment to the field. With the last of our six
    rollout meetings, every AFMS organization now has trained
    representatives. We will use ``report card data'' and the AFMS customer
    satisfaction metrics that are part of the Performance Measurement Tool
    to monitor and measure our success. Finally, Phase III of our program,
    known as ``Sustainment and Partnering,'' will be focused on maintaining
    a high level of momentum for customer service and continued monitoring
    of the data.
        While we're excited about the potential of our Skunkworks program,
    we also recognize that no amount of provider training can replace high
    quality care as a means of satisfying our customers. We have plenty of
    proof that the quality of our care has never been better and that we
    have many satisfied customers.
        Quality is the hallmark of our MTF's. With 97 percent of our
    facilities surveyed by the Joint Commission on Accreditation of
    Healthcare Organizations (JCAHO), the Air Force continues to match or
    exceed civilian scores. The average Air Force hospital accreditation
    score has risen from 92.38 percent in 1997 to 94.43 percent in 1998.
    Clinics maintained an accreditation score of 97 percent, and an
    impressive 48 percent were accredited with Commendation.
        Let me offer you another example of the high quality of care we
    provide. Many of our facilities have participated in the Maryland
    Hospitals Association Quality Indicator Project for more than eight
    years. Air Force inpatient facilities have maintained significantly
    better rates than the aggregate average of more than 1,000
    participating inpatient facilities on five clinical indicators
    including inpatient mortality, perioperative mortality, unscheduled
    readmissions, unscheduled returns to the operating room, and
    unscheduled returns to the special care unit.
        This level of quality is reflected in our patient satisfaction. Not
    only do we know that 93 percent of our Prime enrollees would reenroll,
    we've received outstanding kudos from other customers. For example, our
    line commanders are delighted with the preventive health assessment,
    used to track and manage data on the readiness status of their troops.
    They have praised the program because it addresses their troops'
    readiness capabilities. They were especially pleased when their units
    were prepared to go to the field for deployment exercises without any
    medical discrepancies.
        We're proud of our record in delivering quality care, but there
    will always remain room for improvement. We take this very seriously,
    and continue to work hard with our sister Services to fulfill the
    mandates of the quality initiatives established by the former Assistant
    Secretary of Defense (Health Affairs). Some of these things I've
    addressed in the course of this testimony. Among others is ensuring
    that every Air Force MTF has a health care council or consumer
    committee to offer beneficiaries an open line of communication. In
    fact, this is an item on the checklist of the Air Force Inspection
    Agency during their Health Services Inspection. During the past two
    years, all Air Force MTF's inspected received a satisfactory or higher
    rating on this item.
        I'm also pleased to say that 100 percent of our MTF's have
    published a directory of providers to better inform patients about
    professional information relating to their providers. Air Force MTF's
    are also 100 percent compliant in posting their ``report cards'' for
    patients to see when they visit the facility. Report cards contain
    ``how are we doing'' data on access times for major service areas,
    patient satisfaction, and JCAHO scores as well as information on
    patient education, patient rights and web site availability.
        Our bottom line: The AFMS is dedicated to maintaining the finest
    professional work force, the best quality care and truly satisfied
    customers!
    Conclusion
        Our responsibility as providers and caregivers is to our
    customers--our nation, our patients, our leaders, our families,
    ourselves. We believe there must be changes in how military medicine is
    currently managed and a strategy to prepare for the future 10, 20 or 30
    years from now--that strategy is population-based health care
    management. To succeed, it must be reinforced with a foundation that
    sustains medical readiness, employs TRICARE, tailors the force, builds
    healthy communities, and--ultimately--delights our customers. We
    confidently and wholeheartedly accept that challenge, the challenge of
    stewardship of resources, responsibility for our patients and our
    nation's health and support of our national security interests. Our
    strategy is about stewardship.
    STATEMENT OF VICE ADM. RICHARD A. NELSON, MEDICAL
                CORPS, SURGEON GENERAL, U.S. NAVY
        Senator Inouye. Admiral Nelson.
        Admiral Nelson. Mr. Chairman, Thank you for the opportunity
    to come before you today and speak a little bit about the Navy
    programs. One of the problems with being the fourth person in
    four is that most things have already been said, but I would
    like to share a little bit about Navy issues.
        Just like the other services, our first priority is our
    readiness role, and being prepared for contingency operations.
    I took a look yesterday at where we have people deployed right
    now, and I would share with you that we have almost 1,700
    folks, between our reservists and our active duty who are taken
    out of their regular roles in the MTF's and our treatment
    facilities and are at sea or else with the marines.
        Right now, we have--the U.S.S. Mercy, the hospital ship on
    the West Coast is in an exercise. We have also folks out of
    hospitals with the First Marine Division, and that exercise,
    and we have a reserve fleet hospital stood up to also
    participate in the exercise, and so a good mix of both our
    active and reserve forces in support of a major exercise, and
    also prepared for their contingency roles.
        We also have part of a fleet hospital deployed to Haiti
    right now, and other folks scattered around the world, and so
    we are paying attention to our first job.
        We are very attuned to our responsibility for force health
    protection and how we prepare our sailors and marines for their
    roles. An important part of that, though, is also how we care
    for the families. That is an important part of their well-being
    and of their peace of mind when they are deployed, and so along
    with my counterparts here we take the TRICARE program very
    seriously. We see it as our program, our responsibility to see
    that it works.
        We certainly have had some start-up problems with it, but
    where we have had it in place awhile, it is a very successful
    program. I look forward to making it a success throughout the
    system.
        Along with the TRICARE program we are really going through
    a culture change in military medicine, and both of the other
    two Surgeons General alluded to that. It is a change of our
    thinking from being one fee for service sort of medicine, take
    care of you when you are sick, to really doing the full scope
    of health promotion and prevention, disease management things
    to see that we keep people as healthy as they can be and take
    care of them at the appropriate level.
        As we transition to that, as we have transitioned to that
    kind of health care it has made all the more important the
    roles of our various parts of our medical department, and that
    they work together and that we have better teamwork than we
    ever had before.
        I am aware that today you have the nursing chiefs from the
    various services as another panel. The role of nurses in the
    culture change is most important.
        Another program that we are well-started with right now,
    and I am anxious to see the results of, is the TRICARE senior
    prime program. I have felt a strong commitment to our former
    military who have passed the age of 65 and their families, and
    I think we have a commitment that includes them, and I have
    been very pleased that the Navy has one site participating in
    the TRICARE senior prime program. That is Naval Medical Center
    in San Diego. We are anxious to see that program a success, and
    we are anxious to try another over-65 programs to see what they
    offer and how they are accepted by our beneficiary population.
        Navy medicine's vision now focuses on superior readiness
    through excellence in health services, and to give you a sense
    of how we feel about the importance of those health services
    and how well we think we are doing, this past year, 1998, we
    have 15 of our hospitals and major clinics go through
    inspections surveyed by the Joint Commission on Accreditation
    of Health Care Organizations (JCHO). Fifteen of those all
    passed. They all had an average score of 95.6. Thirty-seven
    percent of those received commendation as well as that level of
    passing.
        The overall average of JCHO for commendations is 17
    percent. We more than doubled it. We have quality. We have
    quality in our practitioners, we have quality in our
    facilities, and we are committed to keeping it that way.

                               prepared statement

        I thank you for the opportunity to come before you. I look
    forward to the discussion. Thank you very much.
        [The statement follows:]
               Prepared Statement of Vice Adm. Richard A. Nelson
                                  introduction
        Good morning. I am Vice Admiral Richard A. Nelson the U.S. Navy
    Surgeon General. I want to thank you, Mr. Chairman and members of the
    Subcommittee, for your invitation to testify at this important hearing
    on Military Health Care. I would also like to share with you Navy
    Medicine's and our strategies and goals for the new millennium.
        Upon taking the helm last summer, I was quickly brought up to speed
    on the depth and breadth of the Military Health System (MHS), including
    issues of concern to you, the Department of Defense (DOD) leadership,
    and our beneficiaries. It has been very gratifying to see our
    dedicated, innovative, and highly competent health care professionals
    meet these challenges head-on and find viable, inventive and cost-
    effective solutions to these complex issues. I will specifically
    address these matters of concern later on in my statement.
        Readiness is the overarching theme that continues to shape Navy
    Medicine's future. We are continually developing mechanisms to enhance
    our Readiness. Navy Medicine is extremely proud of our medical
    mobilization platforms--two hospital ships and ten fleet hospitals--
    specifically designed to provide comprehensive, high quality medical
    care to our troops anytime and anywhere. Another initiative of our
    readiness mission is to ensure our Sailors and Marines are fit and
    healthy physically, psychologically, and emotionally. We call this part
    of our mission Force Health Protection. This mission is best achieved
    through preventive medicine, health promotion and disease management.
    Focusing on the wellness of the whole person best protects the health
    of our Sailors and Marines. Specific programs have been designed to
    reduce alcohol and tobacco use, promote exercise and healthy diet, and
    advocate early diagnosis and aggressive management of chronic
    illnesses. Over the past several years Navy Medicine developed many
    unique health care delivery initiatives at sea and ashore. These
    initiatives are designed to minimize lost work time, especially in the
    operational environment of the Navy and Marine Corps team, and include
    the development and deployment of safe vaccines, and the placement of
    sports medicine, physical therapy and mental health professionals in
    close proximity to our training sites and deployed troops.
        The readiness of our deployed forces is further ensured by the
    knowledge that superior health care services are available to their
    loved ones while they are deployed. With completion of the TRICARE
    program across the United States, we now have registered nurses
    available around the clock in all 12 geographical regions through toll
    free numbers to answer health related questions.
        Navy Medicine continues to focus on improving TRICARE
    implementation. Please be assured we take ownership of the inherent
    difficulties experienced with implementing this new program and are
    actively involved with DOD to simplify and improve TRICARE. We are
    accomplishing this through customer-focused marketing efforts designed
    to provide uncomplicated explanations of the TRICARE benefit. Access to
    this consumer information is provided over the Internet and within our
    Military Treatment Facilities (MTF's). We are also working to improve
    provider claims processing, improve telephone responsiveness, eliminate
    barriers to specialty referrals when needed, and improve the ease of
    portability. Establishing equitable health care benefits for our over
    65 beneficiaries using congressionally directed senior health care
    demonstration projects also remains a priority. I will provide an
    update on these programs later.
        In line with these efforts, Navy Medicine's leadership recently
    redefined our guiding vision and updated our strategic plan. Navy
    Medicine's vision now focuses on ``Superior readiness through
    excellence in health services,'' and our updated strategic plan aligns
    our organization with today's needs as well as the challenges we expect
    to experience in the near future. This will be accomplished by focusing
    on: (1) force health protection; (2) people; (3) health benefit; and
    (4) best clinical and business practices.
                            force health protection
        As I stated earlier, Force Health Protection (FHP) is a key
    component to sustaining our military readiness. FHP promotes a healthy
    lifestyle, improves existing health, proactively and aggressively
    addresses medical threats through prevention and awareness programs,
    and provides quality health care for illnesses or injuries when they do
    occur.
        A major component of our readiness posture as well as supporting
    FHP is Navy Medicine's deployable medical platforms. We presently have
    two 1,000-bed capacity hospital ships and ten 500-bed capacity fleet
    hospitals (six active and four reserve) specifically designed to
    provide comprehensive and definitive health care to our deployed troops
    in any region of the world. Our Fleet Hospital program has been
    improved through the development of a Naval Expeditionary Medical
    Support System (NEMSS). This system provides the flexibility to
    activate portions of the Fleet Hospital instead of the full 500 beds,
    based on the needs of a particular mission.
        Personnel assigned to our MTF's within the continental United
    States staff the Hospital Ship and Fleet Hospital platforms. Periodic
    training is conducted to hone the skills necessary to provide medical
    care in combat environments and conduct medical mass casualty
    operations.
        In June of last year more than 700 active duty and reserve Navy
    personnel from the National Naval Medical Center, Bethesda and the
    Naval Medical Center, Portsmouth deployed aboard the U.S.N.S. Comfort
    (T-AH 20) for Exercise Baltic Challenge in Lithuania. The Comfort
    joined participants from Lithuania, Latvia, Estonia, Norway, and Sweden
    for an exercise scenario based on providing humanitarian assistance
    following an earthquake in Lithuania.
        The Comfort was the afloat cornerstone of the medical portion of
    this exercise which involved over 1,400 medical personnel. The exercise
    included helicopter medical evacuation to the Comfort, triage and
    treatment of over 220 simulated casualties and further transfer of
    these casualties into the fixed wing aeromedical evacuation system. In
    addition to familiarizing the crew with the physical plant, the
    exercise also tested the crew's expertise in medical regulating,
    helicopter operations, management of mass casualties, humanitarian
    operations, telemedicine and operating with non-governmental and
    private volunteer organizations.
        The U.S.N.S. Mercy, based in San Diego, is presently preparing for
    a similarly complex training exercise this spring.
        Preparation of our Fleet Hospital staff for the realities of combat
    is another top priority. Dedicated staff at the Fleet Hospital
    Operations and Training Command, Camp Pendleton, California, teach
    medical personnel, construction battalion units, and other nonmedical
    ratings units how to erect, operate and disassemble a Fleet Hospital.
    The training exposes students to living and working in conditions
    similar to a battle zone and includes operational exercises involving
    chemical, biological and radiological defense; casualty drills; and
    terrorist infiltrations. Naval Hospitals Camp Lejeune, Bremerton, and
    Pensacola have taken fleet hospital training one step further by
    actually erecting medical tents on the hospital grounds and routinely
    treating patients in them. This allows medical personnel to receive
    meaningful hands-on training in a setting very similar to one they will
    encounter when deployed.
        One aspect of FHP, the Anthrax Vaccine Immunization Program (AVIP),
    has received heightened attention over the last several months. In May
    1998, the Secretary of Defense approved the implementation of AVIP for
    the Total Force. Currently, service members deploying for thirty days
    or more, or assigned to the high threat areas of Southwest Asia and the
    Korean Peninsula are being vaccinated. By 2003, the entire force will
    begin receiving the six-shot series of the anthrax vaccination in a
    phased inoculation program. As of March 22, 1999, over 82,000 Navy and
    Marine Corps members have been inoculated.
        I am well aware of the controversy associated with AVIP and the
    concern some of our troops have regarding potential side effects. The
    vaccine is safe. It is a sterile product made from a strain of dead
    anthrax organisms that does not cause the disease. The anthrax vaccine
    was approved by the Food and Drug Administration in 1970 and has since
    been safely used in the civilian sector. It is administered to
    veterinarians, laboratory workers, and livestock handlers in the United
    States. Infectious disease experts at the Centers for Disease Control
    and Prevention also agree that the overall benefits of the anthrax
    vaccine far outweigh the risks. Of the over 82,000 Marines and Sailors
    inoculated, only eight reactions have been reported via the Vaccine
    Adverse Reporting System. All have returned to full duty.
        Administration of the Anthrax vaccine plays a crucial role in
    achieving our goal of improving and maintaining the overall readiness
    posture of our military forces. The threat to our troops is real and it
    is our responsibility to use all available means to protect them.
        Navy Medicine is also focusing on numerous other, less high-profile
    venues designed to keep our Total Force fit and healthy. Smoking rates,
    though on the decline nationally since 1980, continue to be higher
    within all military branches as compared to our civilian counterparts.
    In response to the higher smoking rates, the Navy Health Promotion and
    Marine Corps Semper Fit Programs, available on the majority of our Navy
    and Marine Corps bases, all offer tobacco-cessation classes. These
    classes not only assist the cigarette smoker, but also are intended to
    help individuals stop using smokeless tobacco products. Smokeless
    tobacco is not a safe alternative to smoking, as it causes oral cancer
    and severe dental problems. Use of smokeless tobacco products within
    the Department of the Navy is significant; approximately 12 percent of
    our Sailors and 24 percent of our Marines use smokeless tobacco.
        Examples of innovative Health and Wellness Promotion programs
    implemented aboard our ships by our hard-working Navy Medicine health
    care professionals in conjunction with the ship's food service and
    Morale, Welfare and Recreation personnel are numerous. They include:
        The U.S.S. Vincennes' (CG 49) medical department improved the
    crew's wellness by developing a smoking cessation program, submitting
    daily health notes for the plan of day, conducting cardiopulmonary
    resuscitation and medical training for all personnel and, with the help
    of the dining facility personnel, improved the overall quantity and
    quality of healthy foods available.
        The medical staff aboard the U.S.S. Blue Ridge (LCC 19) established
    a registry to track back and knee injuries in each workspace. The
    registry is designed to identify trends in work place behaviors and
    conditions, allowing for the necessary corrective action in order to
    prevent further job-related injuries.
        Aboard the U.S.S. Cleveland (LPD 7), dental staff aggressively
    counsel dippers, chewers, and smokers on the very real hazards of
    tobacco use. The ship is also providing ``mint chew'' to assist Sailors
    who want to kick the habit.
        To ensure a healthy crew, the medical staff aboard the U.S.S.
    Chosin (CG 65) performs mandatory screening programs for hypertension
    and cholesterol. They also offer courses in anger and stress
    management, nutrition education, and sexually transmitted disease. In
    addition, the U.S.S. Chosin has a LEAN (Lifestyle, Exercise, Attitude
    and Nutrition) program that encourages weight reduction and behavior
    modification.
        These ships, along with many others received the Surface Force
    Commander's Annual Wellness Unit Award or green ``H'' award for their
    efforts. This award was initiated in 1996 by the Commander, Naval
    Forces Pacific and encourages ships to develop lifestyle programs that
    will keep Sailors and Marines healthy and contribute to personnel
    readiness. Health and Wellness programs are also plentiful at our shore
    installations. The Navy Environmental Health Center (NEHC) in Norfolk,
    Virginia offers a similar program titled the Command Excellence in
    Health Award, which recognizes both sea and shore commands for
    excellence in health promotion programs. NEHC's program began in 1995
    and has three levels of awards: Bronze Anchor, Silver Eagle and Gold
    Star. Each level represents increased command participation in health
    promotion programs. In 1998, 22 commands across the fleet received this
    award, another key indicator of Navy leadership's continued commitment
    to promoting a ``Fit and Healthy Force''.
                                     people
        I am well aware that achieving our goals is highly dependent upon
    the bright, dedicated and energetic men and women of Navy Medicine.
    From the Hospital Corpsman attending to a wounded Marine in a remote
    corner of the world to the neurosurgeon assigned to one of our premiere
    medical centers, two elements are absolutely critical if we intend to
    attract and retain top quality people: job satisfaction and providing
    the necessary training to maintain their skills.
        In fiscal year 1998 Navy Medicine met or exceeded recruiting goals
    for our Medical Corps, Nurse Corps and Medical Service Corps community.
    The Dental Corps was the only Navy Medicine officer community not
    achieving recruitment goals. Legislation passed to increase special
    pays for Dental Corps officers as well as increases in the number of
    Armed Forces Health Professional Scholarships are expected to balance
    and stabilize the force structure of Naval Dentistry in fiscal year
    2000.
        While the other officer corps within the medical community met
    overall recruiting goals, there remains a shortage within specific sub-
    specialty communities. For example, the Medical Corps is presently
    experiencing shortages of orthopedic and general surgeons. Shortages in
    radiologists are also expected in the future. The Medical Service Corps
    is encountering similar shortfalls in clinical psychologists and
    optometrists. Health professions compensation and special pays,
    designed to compensate for these shortfalls, have aided in alleviating
    the shortfalls and Navy Medicine continues to work very closely with
    Health Affairs in determining how best to utilize these tools.
        Graduate medical and dental education is another essential program
    that enables us to attract the best and brightest medical and dental
    students. Graduate Medical Education (GME) provides us with the
    specialty-trained practitioners to staff our worldwide network of
    medical and dental treatment facilities, and helps us retain a
    dedicated cadre of clinical faculty. High quality in-house GME leads
    directly to high quality health care. Navy programs are some of the
    best in the country, with our medical and dental residents regularly
    scoring well above the national average on inservice training
    examinations, and graduates of our programs excelling on their
    specialty boards. Keep in mind, graduate medical and dental education
    isn't just about training doctors and dentists. It also creates the
    right environment for training nurses, physician assistants, hospital
    corpsmen and dental technicians. GME is a vital part of Navy Medicine.
        The way we manage our GME programs today will have tremendous
    influence over the size and shape of Navy Medicine for many years to
    come. Navy Medicine's leaders are evaluating the projected requirements
    of the Navy and the needs and expectations of our beneficiaries in
    order to determine our training output requirements, both in absolute
    numbers and in specialty mix. Another consideration is our increased
    need for providers from the primary care specialties. This need is a
    direct result of our full transition to TRICARE.
        Fortunately, interest in Navy Medicine training programs is very
    high. The Joint Service Graduate Medical Education Selection Board
    (GMESB) has the formidable task of selecting the best candidates for
    training, and matching their desires with the needs of the Navy. Those
    young men and women who are selected will be guiding Navy Medicine into
    the new millennium and beyond.
        My philosophy is to identify Navy requirements and match them to
    our training output, both in absolute numbers and in specialty mix. I
    believe the GME system is working well for us at the present time. We
    have the right proportion of people in training and the mix of
    graduates is meeting the needs of the patients they are serving. In
    addition, feedback from line commanders, up to and including the Chief
    of Naval Operations, indicates they are quite satisfied with both the
    level of training and overall quality of the medical officers we have
    been sending them.
        As mentioned earlier, there are a few areas that require fine-
    tuning. We remain chronically understaffed in areas such as general
    surgery and orthopedics and our need for primary care specialties
    continues to grow now that we have fully transitioned to TRICARE with
    its emphasis on prevention, wellness, continuity of care, and disease
    management. Consequently, I have asked the Medical Education Policy
    Council (MEPC) and the GMESB to rigorously evaluate the projected
    medical requirements of the Navy and make the recommendations for our
    GME needs of the future.
                                 health benefit
        As you are aware, the MHS has recently completed transition from a
    direct care system to a managed care system known as TRICARE. The Navy
    line leadership and Navy Medicine are committed to making TRICARE work
    and want it to be the very best health care system for all our
    beneficiaries. TRICARE is a vital component of the MHS and is
    absolutely essential to achieving Navy Medicine's mission of supporting
    the combat readiness of our uniformed services and promoting,
    protecting and maintaining the health of all those entrusted to our
    care, anytime, anywhere.
        TRICARE and readiness are complementary aspects of our mission. In
    fact, the effective implementation of TRICARE has a direct and positive
    influence on the readiness of our military members. Keeping our men and
    women fit for duty involves several key concepts: prevention of disease
    and injury; timely, world class restorative care and rapid
    rehabilitation; a mobile medical force that can deliver care anytime,
    anywhere we are called upon; and the security and peace of mind brought
    on by knowing that loved ones are well cared for and provisions are
    made for those who have served before us.
        Navy Medicine is committed to meld the critical functions of a
    peacetime health care delivery system with the unique requirements of
    our operational medicine mission. We're taking our best clinical and
    business practices and implementing them to improve our overall health
    care delivery system. Application of our goals at Branch Dental Clinic
    Jacksonville has resulted in improved operational dental readiness of
    aircraft squadrons and reduced lost time from work. This was
    accomplished by placing three satellite clinics within the hangar
    complexes at the Naval Air Station.
        The Branch Medical Clinic, Marine Corps Recruit Depot Parris Island
    is testing a new program that will ensure timely health care for
    recruits and reduce time they spend away from training. Called the
    ``Company Corpsman Pilot Program,'' it not only ensures a continuous
    medical presence with the recruits, the test also provides an
    opportunity for Hospital Corpsmen to gain valuable sickcall experience.
    Hospital Corpsmen are trained especially for this program and, under
    the supervision of a physician assistant, act as sickcall screeners,
    treat minor conditions, and refer more serious cases to higher levels
    of medical care. One of the immediate benefits of this program is a
    dramatic reduction in sickcall time from three and one-half hours to
    about one and one-half hours. The recruit, company-level involvement
    has also improved the ability to support the recruits by becoming
    familiar with their individual strengths and weaknesses.
        These examples show the synergetic relationship keeping people
    healthy has with maintaining their operational readiness.
        Navy Medicine remains actively involved in ensuring the success of
    TRICARE. With the implementation of the last two geographic regions,
    TRICARE is now accessible nationwide. In Region II, we have experienced
    some start-up issues that have affected our beneficiaries and network
    providers. They have encountered difficulties with claims processing,
    appointment access, and availability of MTF Prime choice. Be assured
    that Navy leadership takes seriously the concerns expressed by our
    beneficiaries and network providers. Navy leadership is engaged at all
    levels working with Health Affairs, the TRICARE Management Activity,
    the Lead Agent, the medical center, and the contractor to fix these
    problems and restore the prompt access to care our beneficiaries expect
    and deserve. The lead Agent, MTF and contractor have formed a strong
    team and we are making progress. The new, state-of-the-art, hospital
    building at Naval Medical Center Portsmouth will be dedicated soon and
    will significantly improve Navy Medicine's ability and flexibility to
    care for our patients in the Tidewater area.
        Navy Medicine's experience with TRICARE implementation across the
    nation has taught us that start-up issues regarding appointments,
    access to networks, and claims processing turnaround can be mitigated
    through lead agent, medical center, and contractor teamwork. Navy
    Medical Department leaders are aware of the common pitfalls associated
    with TRICARE implementation and we are listening to our customers.
    Based on a recent survey, it appears beneficiaries who are well
    informed about their TRICARE benefits have higher satisfaction levels
    with their health care. We are therefore increasing educational
    efforts. For example, U.S. Naval Hospital Okinawa's personnel take the
    benefits message directly to current enrollees and potential customers.
    Practitioners, receptionists, technicians, and managers are all trained
    benefits advocates able to advise staff and beneficiaries efficiently
    and effectively on the details of TRICARE membership. Based on our West
    Coast experience, we know TRICARE works well in support of our core
    missions. The feedback from line commanders in southern California
    regarding troops' satisfaction with the quality of health benefits is
    encouraging. The TRICARE Lead Agent is very successful in uncovering
    and fixing the healthcare problems of our active duty members and their
    families. Successful TRICARE execution is the chief reason those levels
    of satisfaction, good health, and readiness are present in southern
    California. Navy leaders and Navy Medical Department leadership are
    committed to seeing the newer TRICARE regions mature and achieve
    similar success.
        TRICARE now provides a platform for keeping the promise to our over
    65 retirees through Medicare subvention and other demonstration
    programs. The TRICARE Senior Prime demonstration has been implemented
    and is running well at the Naval Medical Center San Diego. The Federal
    Employee Health Benefits Program (FEHBP) demonstration sites were
    recently announced. There are two Navy sites (Naval Hospital Camp
    Pendleton, Naval Hospital Roosevelt Roads) included among the
    demonstration locations. The FEHBP demonstration program will allow our
    beneficiaries the option of choosing among a variety of commercial
    health plans. We support the senior health care demonstration projects
    and are looking forward to learning the details of the TRICARE Senior
    Supplement and Mail Order Pharmacy demonstrations, due to debut later
    this year.
                      best clinical and business practices
        Before I begin presenting examples of what we are doing to
    incorporate our best clinical and business practices, I would like to
    make it clear that the implementation of these initiatives will not
    alleviate all the budget issues Navy Medicine will be facing in fiscal
    year 2000 and beyond. Our current plan includes reducing real property
    maintenance and deferring replacement of some equipment. While patient
    care will not be directly affected by these actions, they may have an
    indirect effect on our overall ability to provide top quality patient
    care. Unfortunately, we do not believe this picture will improve over
    time.
        The primary reason for my concern is the unexpectedly high
    increases in U.S. healthcare costs. Recent reports by civilian
    healthcare industry consultants indicate that costs of employee health
    benefits at large companies will increase seven to ten percent this
    year, civilian pharmacy costs are escalating at ten percent a year, and
    FEHBP premiums will increase 10.2 percent this year. Also, Health
    Maintenance Organizations are dropping out of Medicare across the
    country--which may cause more retirees to seek space-available care in
    our MTF's. This situation is further exacerbated by an aging DOD
    beneficiary population who consume more expensive care, and the need to
    fund several demonstration projects including TRICARE Senior, FEHBP,
    and the National Mail Order Pharmacy to support their needs.
        As you are aware, Sailors and Marines along with retirees consider
    their health care benefit the most important aspect of their
    compensation after their paycheck. We must work to ensure that our
    beneficiaries do not perceive an erosion of benefits or a broken
    ``promise'' in their healthcare system.
        Having stated my concerns, I would like to now mention that the men
    and women of Navy Medicine are ever optimistic and actively
    participating in detailed reengineering of clinical and business
    practices across the MHS. As we further implement utilization
    management, develop clinical guidelines, and achieve best clinical and
    business practices, I am also asking my leaders to look at the global
    effect their decisions will have on the Defense Health Program.
        A key area presently undergoing revision is Navy Medicine's
    readiness systems. The Readiness Reengineering Oversight Council (RROC)
    was established to oversee these revisions which are designed to
    achieve integration of wartime and peacetime health care resulting in a
    stronger health care system to meet these dual missions. The RROC is
    currently overseeing the following initiatives: realignment of
    peacetime health care billets to support our hospital ships and fleet
    hospitals; provision of appropriate readiness training; development of
    doctrinal publications to update and clarify mission support for these
    mobilization platforms; and planning for the necessary systemic changes
    to meet operational health care needs in the future.
        Best clinical and business practices are also being used to develop
    efficiencies in the daily provision of health care. For example,
    several facilities in the Navy have found they can enhance patient
    satisfaction, decrease waiting times, and reduce costs by transitioning
    to the Patient Oriented Dispensing System (PODS) in their pharmacies.
    PODS put the pharmacist or technician in face to face contact with the
    patient who can be counseled about medication compliance and
    interactions while prescriptions are filled on demand. Patients
    experience a shorter wait, have all their questions answered and
    unclaimed prescriptions are eliminated. This saves both man-hours and
    costs, as medications do not need to be discarded or returned to stock.
        Incorporating our best clinical and business practices to reduce
    costs, improve efficiencies and enhance customer service involves all
    aspects of our business including patient access, pharmacy services,
    clinical practices, TRICARE marketing, education and training, and
    readiness. As we develop new innovations, we are incorporating them
    system wide through active communication with our principal
    stakeholders--the line community, the MTF commanders, clinical leaders,
    managed care staffs, and performance improvement and quality management
    coordinators.
        A prime example of Navy Medicine's application of best clinical and
    business practices is our vigorous telemedicine program. Telemedicine
    not only allows us to provide comprehensive, high quality care to our
    forward-deployed troops, but also significantly reduces the number of
    medevacs from our overseas installation and deployed ships. On recent
    deployments to the Persian Gulf, the U.S.S. Enterprise, U.S.S. Carl
    Vinson, U.S.S. George Washington, and U.S.S. Theodore Roosevelt medical
    teams successfully managed mental health, neurology, orthopedics, and
    dermatology cases using teleconsultation. U.S. Forces deployed to
    Bosnia, Haiti, Macedonia, and Southwest Asia have utilized telemedicine
    in their operational environments. We are also using telemedicine to
    increase our physicians' scope of practice. At Naval Hospital Lemoore,
    California, a board certified family practice physician with
    dermatology training handles skin care issues utilizing telemedicine
    consultations with Dermatology, rather than the past practice of
    referring patients to civilian providers hundreds of miles away. The
    previous process could take over 30 days, but now the physician is able
    to establish a treatment plan within 72 hours. Patient convenience and
    cost savings, along with more comprehensive care are the primary
    advantages to providing care through telemedicine.
        The use of teleradiology at U.S. Naval Hospital Yokosuka is also
    realizing savings, and improving the quality of health care by
    enhancing x-ray support capability at the Navy installations in Japan.
    Naval Hospital Yokosuka provides interpretations of x-rays and other
    radiological studies through a computer network linked to the radiology
    departments within its branch medical clinics located throughout
    mainland Japan. The key benefit of teleradiology is faster diagnostic
    feedback to the provider.
        In an effort to effectively utilize resources and prevent
    duplication of services, Navy Medicine along with Health Affairs is
    examining the consolidation of supply and pharmaceutical purchasing
    with the Veterans' Administration. We are also evaluating and
    establishing cooperative agreements in areas such as laboratory
    services, specialized treatment systems, standardization of discharge
    physicals, and a joint formulary. Navy Medicine welcomes these
    opportunities to provide wider health services for our active duty and
    family member populations through the Veterans Affairs Medical Centers
    (VAMC). Full integration of VAMC's into the TRICARE regional managed
    care support contractors' networks, enhances Navy Medicine's ability to
    execute sharing opportunities.
        Navy Medical Research and Development plays a vital role in
    reengineering our clinical and business practices by providing
    biomedical research that enhances the ability of our Sailors and
    Marines to perform their missions safely. Examples include the
    development of a software package to automatically scan and record room
    temperature measurements in shipboard workspaces, introduction of a new
    Marine combat boot that will reduce musculoskeletal injuries, and
    development of a self-contained personal microwave and radio frequency
    detector worn in the ear that produces an instantaneous, audible
    warning of high electromagnetic fields.
        The scope of our research community's efforts spans all operational
    aspects of Navy Medicine from the development of a computer model
    streamlining the flow of forward medical supplies for the Marine Corps,
    to the design of a prototype diver-worn sound meter that will detect
    and identify hazardous underwater sounds. Researchers have even
    developed and tested a torso harness that continuously updates a
    pilot's awareness of spatial orientation through a sense of touch.
        Many times our researchers' work has direct applicability to the
    civilian medical community. For instance, while studying new strategies
    for the treatment of combat injuries, our scientists made important
    advances in T-cell manipulation, known as anergy therapy. The numerous
    potential applications of this therapy are very exciting and offer an
    opportunity to treat a spectrum of illnesses from organ transplantation
    to allergic reactions.
        Navy Medicine is acutely aware that quality and emphasis on
    customer service are vital to an organization's survival. Navy Medicine
    takes the care of all its beneficiaries very seriously and works
    extremely hard to ensure the safety and well being of those entrusted
    to our care. I am proud to note that 15 Navy MTF's were accredited by
    the Joint Commission on Accreditation of Healthcare Organizations
    (JCAHO) in 1998 with an average score of 95.7. Our Navy Hospitals
    achieve markedly higher accreditation scores when compared with
    civilian facilities and 37 percent of our hospitals have received the
    coveted ``accreditation with commendation'' compared with only 17
    percent of all JCAHO accredited hospitals. We continue to work very
    closely with Health Affairs to further improve the quality of care and
    customer service in our MTF's. Effective April 1, 1999, all physicians
    not possessing a valid unrestricted license will have their special
    pays terminated and be removed from patient care and contact. We
    presently have four physicians in this status, none of whom are
    practicing independently. In order to assist our beneficiaries in
    making informed decisions on health care, we have developed a ``report
    card'' for our MTF's, providing ``on line'' quality and consumer
    information and we are developing a health care provider directory.
                                   conclusion
        In closing, I would like to thank the Committee for the support
    they have given me in my first eight months as the Navy Surgeon
    General. The last year of this millennium has provided us with many
    successes and challenges and I am confident that the new millennium
    will provide additional opportunities for the men and women of Navy
    Medicine. I would like to reemphasize my commitment to supporting the
    combat readiness of our uniformed services and the provision of top
    quality health care to all our beneficiaries. I look forward to
    continuing a close working relationship with the members of this
    Committee and sincerely appreciate all your help in enabling Navy
    Medicine to realize its goals.

                               Kosovo operations

        Senator Inouye. I look forward to your many, many more
    appearances here. I would like to begin with a general question
    for all. The budgetary process that led us to this point has
    been ongoing, but the bulk of the work I believe began about a
    year ago. At the time, your budgeteers got together the nature
    of the conflict in the Balkans was not quite clear, but it is
    becoming a war now. It is a conflict. It is violent. We have
    been fortunate we have had no casualties, but my question is,
    are all of you prepared for any contingency?
        Dr. Bailey. I will take that question first. Clearly, we
    are in a situation now that requires a review of our budget so
    that we are able to stand at the ready should we be called upon
    and, in fact, we are already engaged in some medical support to
    the contingency.
        We have requested $91 million to cover additional cost
    related to the operations there in Kosovo and in and around
    former Yugoslavia. The funding is requested to offset
    additional cost incurred due to the deployments of our medical
    personnel and also the responsibility that we have to the
    reserve and guard and to the families when they are deployed,
    so yes, we will be looking for additional funds, and they will
    be requested to meet this contingency operation.
        Senator Inouye. Would you also cover this point? Yesterday,
    the administration submitted its budget request, the emergency
    supplemental. I believe it was $5.4 billion. It covered
    humanitarian plus the ongoing military mission. Does that cover
    your concerns?
        Dr. Bailey. Yes. The $91 million I am referring to is part
    of that $5.4 billion.
        Senator Inouye. And is that sufficient?
        Dr. Bailey. And in my estimation, it will be sufficient.
        General Blanck. If I may add to that, it is sufficient for
    now. The concern I think we all have is, if there are larger
    scale operations which require us to deploy our personnel from
    fixed facilities whether in the States or in Germany or Italy,
    then we will require some reserve backfill to continue the
    level of care of all the beneficiaries that we now provide.
        But clearly there will be an increase in cost as some of
    that care is shifted to the contractor out of the military
    treatment facilities because the surgeons will not be there, or
    whatever it is, and so I think if there are further
    deployments, then we are looking at additional cost, and I know
    Dr. Bailey and her folks have taken that into account as they
    are looking to that future.
        General Roadman. Senator, the majority of the mobilization
    we have right now is flight surgery-oriented because, in fact,
    we have aircraft with squadrons deployed, so that is our
    squadron medical element that is there, in addition to some
    medics in Tirana.
        I think the issue where--there are two possibilities where
    costs would go up, and that is if we became involved on the
    land, or if we became responsible for taking care of the
    refugees, which right now is an non-governmental organizations
    (NGO) responsibility, and so both of those issues are ones
    that, quite frankly, are wild cards that we do not know what
    the answer is, but as we look at what is going on today, we are
    adequately covered.
        Senator Inouye. Admiral.
        Admiral Nelson. Senator, we from the Navy standpoint tend
    to--what we do in wartime pretty much matches what we do in
    peacetime as far as the medical coverage goes, but for the
    Marine Corps, we are prepared to support them if they are put
    ashore. I am not certain what all is in the $91 million, but my
    expectation is that unless something totally unexpected occurs
    we would be covered in that.
        Your question, though, did not ask specifically about
    money. Did you mean more? You asked if we were ready.

                               budget for Kosovo

        Senator Inouye. Is the present budget sufficient?
        Admiral Nelson. From a budget standpoint for this fiscal
    year I am still $71 million shy for being fully funded, but I
    can make this year, and I can support what I anticipate in
    contingencies right now, and with additional funds that Dr.
    Bailey is speaking of, we should make it.
        Senator Inouye. My concern is that if this conflict should
    get a bit more violent, and in order to cover additional costs
    we employ this procedure called reprogramming, and
    reprogramming always leaves all of you injured because you
    cannot pick it up. You may get something a year from now, which
    may be too late, and we on this committee look upon that
    procedure as being less than satisfactory, but are you prepared
    if the time should come for you to reprogram?
        Dr. Bailey. I guess what you are hearing from us all is
    that we have concerns as well as we go forward. At this point
    we feel the budgetary process is appropriate for the years
    2000, 2001, and in fact we have factored out through the year
    2005 the contingency operations. The situation in Kosovo today
    certainly raises concerns that you are hearing here from the
    Surgeons, yet we feel at this time the $91 million will cover
    not only the needs of the reservists who will be deployed and
    their families, but as you heard General Blanck say, it also
    covers our backfield situation so that we are able to continue
    to provide peacetime health care through our managed support
    contracts.
        General Roadman. Senator Inouye, maybe I am starting to
    fall in with Admiral Nelson. Maybe I do not understand the
    question exactly, because as you ask about reprogramming, if
    you are talking about reprogramming $91 million to pay for
    something other than medical, as I said in the hearings last
    year, I had to get $194 million added to my budget in order to
    be executable. I got $194 million added to my budget in 1999 to
    become executable. I am executable in 1999 because of that.
        If I have money taken out of my budget in order to be able
    to pay for other issues, I will go inexecutable and would
    require restricting care, decreasing real property maintenance
    (RPM), decreasing equipment purchases and all of those. So if
    that is the question, the answer is no, sir, I am not.
        Senator Inouye. Well, that is what I wanted to get. In
    other words, your budget covers the condition of this world as
    you saw it a year ago.

                          War readiness materiel (WRM)

        General Roadman. Absolutely. Now, recognize that the world
    as we saw it a year ago and the majority of that budget other
    than our WRM, which is another pot, but the world as we saw
    that included TRICARE, peacetime health care. The contingencies
    that we are in right now are not big money drivers. I mean,
    there is some cost to it, but it is not a big money driver, but
    if we are talking about reprogramming of any significance we
    would become inexecutable in the present year, and if we are
    talking about taking money, the additional that has been
    planned for 2000 and 2001, we would become inexecutable in that
    year.
        Senator Inouye. There are two other Senators here, so if I
    may ask one more question, I was very pleased to hear all of
    you speak of prevention and, as you, General, stated,
    prevention when possible and cure when necessary.
        About 20 years ago, this committee did a little research,
    and we found at that time that nationally we were spending
    about $1,400 for curative medicine and less than 10 cents per
    person for preventive medicine. I realize you cannot do it in
    terms of dollars and cents, but are you satisfied we are doing
    enough in prevention?
        General Roadman. No, sir, we are not. Nationally we spent 1
    percent in prevention and 99 percent in intervention.
        Senator Inouye. My question leads to this important one.
    Part of your prevention program covers research that has
    military implications, but at the same time a lot of
    nonmilitary implications such as smoking, such as pediatric
    asthma, maybe sleep management, alcoholism, and so there are
    some who are suggesting that maybe this type of research
    activity should be turned over to the civilian sector.
        Now, if you start doing that, I presume it is going to have
    a major impact upon military medicine, but what are your
    thoughts?
        General Roadman. Sir, if I could just continue on with
    that, I am chairing the Department of Defense (DOD) Prevention
    Council where we are now working on three major initiatives and
    that is smoking cessation, alcohol reduction, and unintentional
    injuries, and I will get back to your other question, but I
    want to wrap it in, because as you talk about things that were
    nonmilitary I would like to give you our number, which is
    staggering.
        In 1996, the Department of Defense spent $1.3 billion on
    cigarette-related illness. We spent $1.6 billion on alcohol-
    related illness. Now, that is direct and indirect cost. That
    has direct military implications, and it has to do with force
    protection and the ability of our people to do the jobs they
    need to do when deployed.
        So what I will tell you is that in all of these the big
    advantage that the military has is that we are a very large
    closed model health maintenance organization (HMO) with people
    who stay within our system for a long time. The problem that we
    have in the civilian sector is that there is a high turnover in
    staff model HMO's, and so there is very little fiscal or
    continuity of care to be able to track people over a long time,
    so this is an ideal model to be able to show the Nation where
    we need to go in prevention.
        Pediatric asthma, as you said, that has direct military
    implications, because a number of our kids have asthma. Our
    pilots are flying at just below the speed of sound at 600 feet.
    They are worried about their child getting adequate care, and
    we know that if we put clinical practice patterns in that we
    can control the cost, and we can put those other costs into
    those other things we clearly need to do.
        So I think everything we look at in the prevention area is
    looking at a dynamic system, and everywhere where we begin to
    deliver better care, more efficient, more effective, it frees
    up dollars that we do not have to go after our services where
    they need to do modernization as well, and so the real problem
    is, I cannot put those boundaries on it. I think you have the
    ideal system to be able to develop a model health care system,
    which I think we already are, but have so much more further to
    go.
        Many of the things we are talking about have direct and
    indirect military implications that we are a good test bed for
    this type of study. Now, there is one caveat that I would give
    you, and that is, if we get prevention type tasking, additional
    tasking, and do not have the money flow with it, it has direct
    military implications because it decreases the availability of
    our budget, and in essence it is taxation without
    representation, if I can use an old historical phrase, and we
    have got to be sure that if we want to know the answer, that we
    pay for it.

                       Research versus clinical practice

        General Blanck. If I could add to that with two comments,
    much of the research we do is inextricably intertwined with the
    clinical practice that we perform. Our day-to-day practice,
    clinicians do much of this research. It cannot be split out,
    and I think General Roadman alluded to that as well. You cannot
    put a boundary around much of this research and separate it out
    from clinical practice.
        Part of what makes us the excellent system we are is the
    ability to push the frontiers and do that research while
    providing that care in all of the populations for whom we are
    responsible first and foremost.
        Second, in some of the very specific research programs,
    breast cancer, prostate, for example, which we serve as the
    executive agent at the Medical Research Materiel Command, it is
    done very, very well and, in fact, a recent article in
    Scientific America commented on some of the advocates for these
    programs being made part of the research program at the
    National Institute of Health (NIH), and this was pioneered by
    the military, actually, in the programs you all have supported
    at Fort Detrick, and so we do the research very well. We feel
    it is part of our system. We are a large test bed for much of
    that. It is part of the quality of our organization.
        Dr. Bailey. Let me just also add to that that the
    Department of Science and Technology strategy does support dual
    use research and development by using commercial practices,
    processes, and products and by developing technology that can
    be a base for both military and commercial products.
        Often, we are given research projects in breast cancer and
    in other areas specifically because of the fact that our
    funding stream is often year-by-year, as you well know.
    Projects that are turned over to other organizations or
    agencies often look for a funding stream that is out 20 years,
    so the bad news is we go year to year, but the good news is,
    that means our research is often very intense, very focused.
        Now, let me also add that turning over research and
    development to the civilian sector could possibly significantly
    undermine and jeopardize the ability of the Department to
    develop and field equipment and technologies to meet its
    current needs or its future needs or specifically the unique
    needs of the Department of Defense.
        Senator Inouye. Admiral.
        Admiral Nelson. Again, most of it has been said, Senator,
    but we constitute a very good test bed for population research,
    for whether that deals with preventable diseases, preventable
    issues, or studying disease occurrence. We are a fairly
    controlled population. We have central data bases. We are able
    to have probably a better core control than most any other
    population would be.
        I agree with General Roadman that, as we are tasked with
    research, the dollars need to follow that. That becomes a
    tight, critical issue for us, but sometimes we get involved in
    research that people look askance at, as about, I just came--
    last month I visited our research facility in Cairo, Egypt. We
    are doing research on pediatric diarrheal diseases through
    Africa, also doing malaria vaccine development, and people
    wondered, why do you look at development of vaccine for
    pediatric diseases in Africa?
        Well, what we are looking for are vaccines for our naive
    immune systems. If we sent marines ashore in some part of that
    part of the world we would be experiencing the same diseases,
    and those are serious diseases, so it is important that we look
    further than the things that are right in front of us as far as
    research goes.
        Senator Inouye. It sounds like a pun, but the response you
    made is just what the doctor ordered, as far as I am concerned.
    Thank you very much.
        Senator Shelby.
        Senator Shelby. Thank you, Mr. Chairman. What I am thinking
    about here and the question I am trying to pose is, will there
    be enough funding if we get into a real shooting war in Kosovo
    and take a lot of casualties will you have enough to cover it?
    General Blanck.

                        funding for Combat casualty care

        General Blanck. Today, no.
        Senator Shelby. The answer is no.
        General Blanck. The answer is absolutely no. The
    contingency is, it must be anticipated. The $91 million Dr.
    Bailey spoke of is a beginning towards that, and as that would
    move forward my anticipation is, but it is only an
    anticipation, that subsequent funding would be forthcoming, but
    no. We are funded to do what we are doing and not much more
    than that, and the demands so far on the medical system from
    what is going on in Kosovo have been relatively minimal.
        Senator Shelby. Do you concur with that, General?
        General Roadman. I do. I think as you think about what it
    is we do folks will say, well, why are you not ready? We have
    the fixed cost ready. We have the manpower, we have the WRM
    equipment, but as we begin to do treatment we have expendable
    supplies that have got to be replaced and refunded, and that is
    really the issue that would begin to drive it, so it is the
    variable cost of readiness that we will be short that we would
    have to be funded up on.
        Senator Shelby. And would it be hard to put a figure on
    that, because you projected in the future. You do not really
    know what you need, do you?

                    cost projection of Combat casualty care

        General Blanck. That is relatively easy to cost out. What I
    think is the unknown cost, and I alluded to it before, is
    maintaining the same level of care at the facilities from where
    we have drawn the military folks to go into theater, and I do
    not know what that is, because it is dependent upon how many
    other of the beneficiaries, active duty go to that part of the
    world, and so we do not provide their care any more, and how
    many members stay in the area, what the contract cost would be,
    how many reservists we are able to get to backfill, and so
    there is variables in there, but we have begun looking at that,
    and I know TMA with Dr. Bailey have some figures on it.
        Senator Shelby. Admiral, as far as the Navy and marines,
    will you address that?
        Admiral Nelson. I think our issues are similar, or if you
    steam a hospital ship, we have figures on what that costs us a
    day, both from a manning and a steaming and then dependant on
    the volume of patients they take care of, that starts eating up
    the dollars and consumable supplies, so we have a significant
    cost if we are to use that, or if we were to put a fleet
    hospital ashore, then you start eating consumables.
        Again, we have the fixed cost covered. It is some of the
    moving it around, and then the consumables that go through it.
    But also, again, I would reiterate what has been said here. As
    we have started more fully utilizing the capacity of our
    facilities, our hospitals and clinics, we have become very
    dependent upon the manpower to cover our TRICARE program, so we
    would be buying that care, and that does not come cheap.
        Senator Shelby. But I think it is very important that if--
    and I hope we will not, but if we did get into a ground war in
    Kosovo, you would have to anticipate from the medical care a
    lot more funds to take care of our soldiers and sailors.
        Admiral Nelson. Yes, sir.
        Senator Shelby. I think that is what Senator Inouye was
    alluding to.
        General Roadman. I think the way to say it is that we have
    funded in the past the cost of readiness. We have not funded
    the cost of executing a war.
        Senator Shelby. Dr. Bailey, my inquiry now would relate to
    research into combat-related lung injuries. One disease being
    researched is the condition of acute respiratory disease
    syndrome. This syndrome is often the result of battlefield
    wounds, exposure to agents used in chemical or biological
    warfare, and other events that are common in combat, such as
    extensive skin burn, shock, smoke inhalation, and clamping of
    the aorta in trauma surgery. Recent reports indicate that more
    than 90 percent of the combat casualties who died after
    evacuation from field had evidence of acute respiratory disease
    syndrome (ARDS), and that those surviving for more than 5 days
    had a high incidence of pneumonia and other ARDS indicators.
        Dr. Bailey, given the broad incidence of acute respiratory
    disease syndrome among combat casualties, should we not be
    placing a higher priority on understanding this syndrome?
        Dr. Bailey. Clearly, that syndrome is something that we
    focus on, as you know. Many of the concerns after the gulf war
    were the environmental exposures. Of course, we had the smoke
    fires. We were also concerned about what we were using to
    protect our forces. Clearly, we provide vaccines and pre-
    treatments and medications, and at times even the clothing that
    has been sprayed with insecticide, so you can imagine there are
    many things in the environment that are breathed in, and
    therefore we are very concerned that we provide for the
    protection of the respiratory system as well.
        I should mention to you that as part of the $19 million
    that is provided for research and development, one of the
    topics for a research proposal is under lung research, so I
    could provide for the record additional information, if you
    like about that.
        Senator Shelby. I wish you would.
        [The information follows:]

        Within DHP are funds to be used for research that focuses
    on issues pertinent to our military forces. There are fifteen
    suggested areas, of which one is lung research. The USAMRMC has
    been selected to execute this program. Once the funds are
    received by USAMRMC, a public announcement on the program will
    be made.

        Senator Shelby. Wouldn't a more robust ARDS research
    program be timely?
        Dr. Bailey. I would agree. Clearly, we have a long, long
    list of research projects, and are sorting out now how we can
    apply the funding we have to research and development which
    again generally is done not through the Defense Health Program
    (DHP) specifically, but Director, Defense Research and
    Engineering (DDR&E) and again, we could provide you with some
    additional information about that, but we do, through the Armed
    Services Committee that I, in fact, co-chair, have input from
    the Health Affairs point of view, so that we direct the
    research, given our lessons learned in our military contingency
    operations, previous wars, and our medical knowledge, so that
    we do direct research.
        Senator Shelby. I have been told this is very important to
    get to the bottom of in research. Do you agree with that?
        Dr. Bailey. I agree.
        Senator Shelby. Thank you, Mr. Chairman.
        [The information follows:]

        USAMRMC does not have research projects that primarily
    investigate ARDS or its pathogenesis. However, there are
    several projects that address primary lung injury that may
    predispose a patient to ARDS. These projects emphasize far-
    forward casualty care that will limit lung injury and decrease
    the chance of a patient later developing ARDS. Specifically,
    these projects are: (1) evaluating treatments for smoke and
    thermal inhalation injuries, (2) studying damage from ischemia
    and reperfusion in lungs, as well as from tension
    pneumothoraces, and examining the use of antisense DNA
    compounds as a therapy against the excessive mucus secretion
    that occurs after smoke inhalation. All of these research
    efforts will likely reduce the induction and magnitude of ARDS
    after trauma. An additional research project studies delivery
    of nitric oxide via high-frequency percussive ventilation,
    which could be used in the treatment of ARDS. Total funding for
    these projects is $1.0 million for fiscal year 1999 and $1.0
    million for fiscal year 2000 (planned).

        Senator Inouye. Senator Hutchison.
        Senator Hutchison. Thank you, Mr. Chairman. I am very
    concerned about the health care issue, and as you probably
    know, put an amendment on the Soldiers Sailors Bill of Rights
    Act to address health care, because when I am out visiting
    bases either in Texas, or Saudi Arabia or Bosnia, or Kuwait, or
    wherever we are, people mention pensions, they mention pay, but
    they also mention health care. I remember visiting with an
    airman in Saudi Arabia and I said, what is your biggest problem
    in the Air Force, and he said, it is calling my wife at home,
    and she is crying because she cannot get a pediatrician to see
    our baby. I did an amendment that would try to address some of
    the concerns in TRICARE.
        And let me say that I know you are really trying to make
    TRICARE work. I do, and with the BRAC drawdown and the loss of
    facilities and the fact that we have more married people with
    children in the services now, it has produced a different
    picture, and I know you are trying to address it, but this is
    my question.
        Have you been able to address some of the mandates that
    would be in my amendment now, which you can. For instance,
    first making it easier to file claims for both the beneficiary
    and the physician, or the medical personnel. Second, targeting
    where the doctors in a certain area just can no longer afford
    to serve the patients that are military because the
    reimbursement is so low, going ahead and reimbursing them at a
    higher level. Just saying, if we have a shortage and we cannot
    get a pediatrician in Abilene, Texas, for Heaven's sakes we
    will increase the reimbursements to their normal levels. Are
    you doing that now, which you can without my bill?

              comment on Soldiers/sailors bill of rights amendment

        General Blanck. Dr. Bailey will answer that, but I would
    like to on behalf of all of our patients and all of us at the
    table thank you very, very much for your interest and for the
    amendment. I think that is exactly the way we need to go, and
    it is going to be very helpful as we try to deal with this.
        Dr. Bailey. There are many things in the bill, and they are
    very helpful to us, and I also want to thank you for that. They
    are all the things we looked at, and I should share with you, I
    think I followed you in all of those places in Bosnia and Saudi
    Arabia, and I have been to 11 of the 12 regions in the United
    States where we have Lead Agents and TRICARE, because we really
    want to understand region by region.
        There are things happening in Texas which in fact are not
    happening elsewhere. We have increased the rate in Alaska, for
    instance, in remote areas of reimbursement, and so we need to
    look at it region by region, even though we know what a
    portable culture we are, and therefore we are stressing
    portability, and uniformity in our system so that the airman
    and his family find it easier to access the system.

                                  Portability

        Senator Hutchison. Portability is one of the parts of my
    amendment, but in addition to region--Alaska and Hawaii are two
    very good examples of where the cost of living is much higher,
    but in addition to region, do you also target shortages where,
    for instance, a cardiologist will not see military personnel in
    Abilene, which certainly is not a high regional expense, but do
    you target shortages also, in addition to regional differences?
        Dr. Bailey. First of all, in a very service-specific way,
    each Surgeon General here and their teams look at their
    responsibility in terms of providing specialists that are
    appropriate for the needs of the community they serve. At the
    same time, overall we look at the number of specialists per
    region, and we are looking also at some creative ways of
    providing care, not only in remote regions, where there is not
    a pediatric cardiologist, for instance, and providing through
    circuit riding, if you will, bringing--instead of taking the
    patients a long distance to a particular specialist, bringing
    the specialist, and sometimes sharing the specialist between
    the different services, which I think is something rather
    unique that we have accomplished in the tenure of everyone you
    see here at the table, to provide that kind of cross-coverage.
        Senator Hutchison. I understand that is one approach, but
    are you able to just target shortages with an increase in
    reimbursement if you are out a phase?
        General Blanck. No, and that is something that we are
    looking to do, but to the best of my knowledge at least we have
    not been able to do that by the example you used in Abilene, a
    civilian cardiologist who might be the only one in the area
    saying, I would love to see you, but you do not pay enough, so
    then we can use, as in your amendment, the usual charges which
    would be above, presumably, the rate.
        Senator Hutchison. So you need the legislative authority to
    do that?
        Dr. Bailey. In fact, we would need legislative relief to do
    that. We are only charged or allowed to provide through
    legislative directive at the CHAMPUS level, the maximum
    allowable at the Medicare rate. Now, that is done standard
    throughout the system. It was several months ago, that has been
    implemented, but that still puts us at a level that may
    provide, particularly in the area of certain specialties, what
    we need, and we would need legislative relief to provide that.
        Senator Hutchison. I would just ask you if there is
    anything that I have missed in my amendment because, of course,
    we passed a bill in the Senate. My amendment got 100 votes, so
    I think everyone is in total support of adding this aspect to
    our readiness.
        But if there is something we have missed, it still has not
    been conferenced, and I would like for you to tell me what you
    feel you need legislative authority to do that would allow you
    to serve our personnel wherever they are in a better way,
    because that is what the amendment is intended to do, and it is
    what we have done our research to try to address, but if we
    have missed something I want you to tell me, because this is
    our chance to give you every opportunity to give the best
    service that we can give.
        I will just end by saying I really appreciate your looking
    at what we are trying to do and letting us work together to do
    this, because the last thing I want is one of these pilots that
    is out there on the front thinking about whether his wife and
    children are getting medical care, or if it is a woman, her
    husband, who may be taking care of the children.
        So I want to make sure that they are not worried about
    something that we can take off their minds. I want to just add
    one other point. Back to the line of questioning that Senator
    Shelby gave. Are you saying that if we were planning for an
    escalating contingency in Kosovo or anywhere else, that we have
    enough medical personnel to serve? It is just the other kinds
    of supplies and facilities that we would have to add. We would
    not have to, for instance, go out and draft military personnel.
        General Roadman. You are correct.
        Senator Hutchison. Thank you. Thank you, Mr. Chairman.
        Senator Inouye. Thank you. Senator Leahy.
        Senator Leahy. Thank you, Mr. Chairman. I am glad to see
    everybody is here. I am unfortunately, as oftentimes happens,
    bouncing back and forth between two hearings, one here and one
    in Judiciary upstairs.
        General Blanck, I wanted to ask you, for the past several
    years, this committee has provided funds for the Army's breast
    cancer research program. Could you tell me how that program is
    administered by the Army? I have been told it is one of the
    most efficient research programs in or outside the military in
    terms of cost and effectiveness and, as one who helped start
    it, I would kind of like to hear how it is going.

             administration of Army breast cancer research program

        General Blanck. Well, Thank you, Senator. Yes, I believe
    that what you have heard is correct. It is run out of the U.S.
    Army Medical Research Materiel Command at Fort Detrick. There
    is a specific organization within that command that takes the
    funds and then we have civilian integration panels that look at
    how--or set up the criteria for how the request for proposals
    will go out, and then grant proposals come in.
        The panels involve members of the academic community,
    involve advocates for--that is, the consumer groups who will
    benefit from the program, involve our own personnel, of course,
    and it is a very, very good way of trying to get together all
    of those who are involved in this who look at it in a very
    timely fashion.
        They set up areas of looking at certain biochemical markers
    or treatment protocols, or other creative ways to get at this
    program, to include some new diagnostics. I really take a great
    deal of pride, and I think all of us at the table justifiably
    can do this. This is, of course, a Triservice program as far as
    that goes.
        Most of the funds then are sent out to the civilian
    community to those who propose the various research protocols,
    and we kind of operate as a hopefully efficient pass-through.
        Senator Leahy. Well, I am glad to hear that. We talked
    about this actually in Burlington, Vermont last Friday. I was
    speaking to a group in honor of a friend involved with a group
    of breast cancer survivors, and when I mentioned the program
    that you have in the military, and just mentioned it, it got a
    round of applause. I figured, Mr. Chairman, at that point I
    probably just should have shut up and sat down.
        But I want you to know that I wish you could have been
    there. You would have appreciated it.
        Tell me, in the fiscal year 1998-99 funds, have they been
    spent, the breast cancer funds? Have they been spent? Where are
    we on that baseline?

            Breast cancer fund expenditures for fiscal year 1998-99

        General Blanck. Not the 1999, but the 1998 have been, in
    some cases and, as you know, we run a 2-year program, and so we
    combined some of the funding. Some of the projects have been
    approved, funding granted. Others are still undergoing that
    process.
        By the way, Senator, I have to, as an aside, mention I do
    get to Burlington. My daughter is a senior at the University of
    Vermont.
        Senator Leahy. Good for you.
        General Blanck. Well, good for her, actually.
        Senator Leahy. Good for her. I have three who went there,
    three children who went there. As I look at the military lineup
    here, I am almost afraid to mention one went in the Marine
    Corps.
        Admiral Nelson. That's OK. [Laughter.]
        Senator Leahy. But I think it is a fine school, and I live
    close by there, and so I hope she is enjoying it.
        General Blanck. Very much. Thank you, and I will be glad
    when she is through, because my pocketbook will be fatter.

                           Electronic medical records

        Senator Leahy. I know the feeling. I saw your invitation
    for the medical evacuation (MEDEVAC) helicopters out here at
    National Airport. We have one of the older models that just
    moved into Vermont with our guard, and I think it is tremendous
    what they can do.
        I have one other area of questions. General Blanck, you
    have been a strong proponent of electronic medical records for
    deployed troops, whether active or guard or reserve, and you
    have been a leader in the effort to field computerized tools
    that automate the process of maintaining medical records, and I
    have some idea of how important that is, and I hear from my
    wife, who is a nurse and most recently had a medical surgical
    floor, how important these records can be.
        Are we going to have a time when all deployed troops will
    go into theater with a complete medical record baseline, and
    then can be screened as they come out of the theater? We always
    seem to have these deployment-related problems and syndromes,
    and some are significant and real, and some could be avoided,
    probably, in future deployments if we had a better idea of what
    medical events are occurring when.
        Dr. Bailey. I am going to turn it over to General Blanck,
    but let me say, since I mentioned earlier the gulf war, I want
    to say on behalf of all the medics who participated in that
    war, there was good medicine done there, but part of the
    problem was, we did not have the surveillance capability in
    order to prove that, or to indicate how good the work was that
    was done.
        It was one of our lowest disease nonbattle injury rates
    ever in any wartime situation and, again, the medics get a lot
    of credit for that, or should get more credit for that, so I
    just want to back up and state that.
        Let me also say that that points out exactly what you are
    saying. We need a record, and we will have one soon, with the
    help of everybody at this table. I think that we, like no other
    group of surgeons or anybody in health affairs have really
    pushed for the computerized patient record, and I am going to
    let General Blanck take over and do his demonstration on that,
    but we are spending for our composite health care system II
    (CHCS-2) $100 million a year. We are pushing this, and in fact
    we are now comparing it to be sure we are getting it fast
    enough and at the right price, so we can have pre-deployment
    records, know what happens in the field, and know what is
    happening when people come home.
        Senator Leahy. And I think you will find strong support
    from this committee for that, because we also know that in many
    instances you are going to have people, nonphysician-providers
    out there, providing care. I have been very interested in some
    of the new techniques of diagnostic tools for nonphysician
    providers, some of which we are developing for very rural areas
    here in the United States, but would be just as applicable in a
    forward deployment where we are using the nonphysician
    providers, and helpful to the physicians who are going to be
    there. The physicians are not going to be lugging around--in
    forward deployment, they are not going to be lugging around all
    kinds of medical libraries with them.
        We have done it with--I watched a procedure used on the
    Internet the other morning. I am sitting out in Rosslyn
    watching surgery in Vermont being observed in Vietnam, with
    everybody talking in a three-way event. It was fascinating. And
    then surgery in Vietnam being critiqued by people in the United
    States who were experts in that field watching it in real time,
    and it was fascinating.
        I have gotten way off my basic question, and I will hush up
    with that and let anybody else add that would like to.
        General Roadman. Senator, embedded in your question was the
    question of, will there be a time when our troops go in and
    they have been prescreened and when they come out they are
    postscreened, and the answer is, that time is now. The fact of
    the matter is, one of the lessons we learned out of Desert
    Shield and Desert Storm is that we could not add science to
    questions that we needed to have answers to, and so in fact,
    immediately after that, immediately being several years, we put
    in a predeployment screening process and a postdeployment
    screening process with blood samples that are stored so that we
    can compare pre and post deployment.
        But the point of what you are asking I think was, and when
    will that be automated, and of course, Ron is leading the
    charge on the personal information carrier, which I think he
    always has in his hand, and I see he has it there now, which is
    what?
        Senator Leahy. I thought you might.
        General Roadman. Let me see if your lips move while I talk.
    [Laughter.]
        That we can carry not only images but immunizations, and we
    can update them so that it has read and write capability right
    there at the provider, and I will let Ron talk about the
    programmatics of that.

                      Personnel information carrier (PIC)

        General Blanck. The basis of it, of course, is the
    computerized patient record that we are doing in conjunction
    with the Veterans Administration with the Department of
    Veterans Affairs (DVA). We need to have the same record because
    folks transition from one system to the other. There is that
    degree of overlap. Much of that can be stored centrally, and it
    will be where there is the connectivity.
        However, as everyone knows, when folks go into the field,
    occasionally when you are in the air, or on ship, or with the
    marines, you do not have that connectivity. Certainly in times
    of war, and so we have this, that will carry the information
    necessary for a medic, for a nurse, for a physician, for a
    physician's assistant, whoever it is to have at their
    fingertips--and by the way, this fits in a sleeve that just
    goes in a personal computer, and so it does not take additional
    equipment, or a lot of infrastructure necessary, and actually
    we even have a device that a medic can, on the battlefield,
    dictate what he or she is doing to a patient while they are
    putting on a compress, or bandaging up a wound, or using our
    new Band-Aids, that kind of thing.
        It is on here. It goes back on the chain of the soldier to
    the forward surgical team, or the battalion aid station,
    whatever it is. This is then read, information gathered,
    additional kinds of things put on. You can do it either by menu
    or free text to the combat surgical hospital, and so forth.

                             proposals for the PIC

        Now, we put out a request for proposals after doing the
    initial testing this past January. We are in the process of
    evaluating those proposals now. We will purchase, perhaps
    50,000 of these this summer and begin field testing of them at
    the end of this year so that by the time I retire, which is
    next year, we ought to be able to deploy these to soldiers,
    sailors, airmen and marines going into areas where there is not
    that connectivity.
        We ought to have it far enough along that we will be able
    to put those elements on the computerized patient record
    necessary, immunizations, family history, allergies,
    medications on here, and actually have it in use, and then that
    will fit in with what has been said in terms of us actually
    recording the predeployment screening that we now do, the
    interventions, the exposures, the surveillance of results that
    we get while in theater, and then the post deployment
    surveillance, and we will have that record.
        Senator Leahy. General, as you go along with that, if you
    could keep me and my staff posted, because it is something that
    I am very interested in. I suspect everybody on this committee
    would be.

             Chemical/biological terrorism distance learning course

        General Blanck. If I may add one other thing on technology,
    you talked about the television show that you saw. It is
    fascinating. We started yesterday, three services, a distance
    learning course on medical response to chemical terrorism. We
    do that a couple of times a year, and we also do it for
    biologic terrorism. It is a distance learning course. Actually,
    Dr. Bailey opened it.
        Senator Leahy. That is what this was, distance learning. I
    mean, this was real time. I was talking with the people in
    Vietnam and Vermont at the same time.
        General Blanck. It is real time, 3-day course, 50,000
    soldiers, sailors, airmen, and marines, active and reserve,
    signed up for the course, civilian, fire and police, 14 other
    nations, including the entire nation of Singapore. It is
    available to every household in Singapore, interactive, and
    this was the kind of thing that all of us are involved in as,
    of course, we try to deal not only with recordkeeping but also
    using the technology to bring the information on chemical-
    biologic in this case, but in other things, too, to the
    civilian world.
        Senator Leahy. Thank you. Thank you, Mr. Chairman.
        Senator Inouye. Thank you. I realize that the nurses have
    been waiting a long time, but I have just a few more questions,
    if I may.
        Senator Leahy. I especially apologize to the nurses,
    because I have got to go back to the Judiciary Committee, and I
    will apologize again when I get home, too. [Laughter.]

                                role of Reserves

        Senator Inouye. One of the lesser known facts about
    military and military medicine is the role that the reserves
    play, and I realize that you are not directly involved in the
    administration of reserves. Now, for examples, guard and
    reserves comprise 53 percent of the total military users, and
    the cost in the DOD budget is 7\1/2\ percent. That is a
    bargain. Seventy percent of the Army's deployable medical
    capability is in the reserve component.
        However, since Desert Storm, certain statistics have become
    available to all of us that concern us. For example, for every
    physician recruited we lose three. In the medical reserves. The
    reserve component Medical Corps strength was 67 percent of the
    authorized strength. Dental Corps, 70 percent, Army Medical
    Specialist Corps, 53 percent. These are getting pretty bad. Are
    we doing anything about it, recruiting and retention?

              Reserve medical specialty Recruitment and Retention

        General Blanck. Senator, this is, I suspect, more an Army
    problem, since we rely more heavily on the reserves than do the
    other services, though I suspect for the Navy, Marines and Air
    Force the statistics are similar, but I am more heavily relying
    for my deployable assets as well as backfill assets for folks
    that deploy out of Walter Reed or Brooke Army Medical Center,
    or Tripler, probably, than the other services, and indeed the
    figures that you have quoted are accurate, although there has
    been some sign of progress in the past. However, I continue to
    be extremely concerned, because we have not reversed the trend.
        We have slowed down some of the losses and our recruitment
    has increased a bit, but the one that scares me the most is the
    fact that by 2002 82 percent of physicians, close to 90 percent
    of dentists, I believe 67 percent of nurses will be retirement-
    eligible in the reserves, and that says that we may be keeping
    some, but it is a graying force, and clearly we need to bring
    in folks and then have the appropriate opportunities for them
    to advance.

              initiatives for enhancing Recruitment and retention

        We have many initiatives we have worked through, and for
    the past 2 years we have had a group from the guard reserve and
    active working virtually full-time on it. With the help of this
    committee and other Members we were able to pass legislation
    which allowed us to set up a loan repayment program that is
    better than it had been and offers more money; that has helped.

                            outsourcing Recruitment

        We are contracting out recruitment, and not just leaving it
    to the Recruiting Command, which are really concentrating on
    bringing in the young soldiers to be infantry, or artillery, or
    whatever, so that they can specifically look at our reserve
    medical folks.

                Insurance proposal/health profession scholarship

        We have a legislative proposal not yet ready for prime time
    that would provide insurance to those in private practice so
    that when they come on board they would not lose everything, as
    happened to many. We have a program that would provide a health
    profession scholarship program for those folks in medical
    school, nursing school, dental school that actually then would
    have them do their payback in the reserves, very similar, in
    fact exactly the same as the program we have now for active,
    and on and on it goes, many, many initiatives.

                             90-day rotation policy

        The one that we are about that close to finalizing is the
    90-day rotation policy for nurse anesthetists, for surgeons,
    for folks who really cannot afford to go for 279 days and, in
    fact, their skills atrophy when they are on a deployment for
    that long, so we can rotate more frequently, and that is
    something that we think will be positive, and I could go
    through an even greater litany.

                   summary of resource Recruitment/retention

        The point is, the problem has been recognized. We have a
    lot of processes and programs in place, but the outcome has not
    yet changed. I actually have a layout by fiscal year as to when
    the programs come into play or are approved or implemented, and
    then what that means in terms of changing those numbers, and I
    would be happy to share that with you afterwards.
        General Roadman. Senator, I listened to Ron very carefully,
    and I have to tell you, he does not rely on the guard more than
    the other services, the guard and the reserve. Ninety-three
    percent of all of our strategic air evac is flown by guard and
    reserve in peacetime and in war, and so we are absolutely
    dependent on the guard and reserve to do our day-to-day job as
    well as any contingency we would have.
        Our numbers are a little bit different. The numbers are not
    big, but for the reserve we have increased by five physicians
    per year over the last 7 years, so we are not in a sliding
    scale back, and for the guard it is an increase of 15 on the
    average per year, and so we are not in the slump that you are
    talking about.
        As a matter of fact, for our selective reserve we are 89
    percent, and for our guard we are at 90 percent filled in our
    billets, so we are still struggling. We are still struggling
    with specific Air Force functional codes (AFFC's) with specific
    skills, but we think we have the tools with the things Ron
    mentioned of education loan repayment, changes with the stipend
    program and with the bonus program, we feel like those will be
    incentives that will help us.
        It is still clearly a problem of folks having pressure from
    their employers in peacetime to do their guard and reserve
    duty, and particularly when they get mobilized, and so the
    emphasis on employer support needs to continue, as well as, I
    believe, particularly in the medical field, some protection
    from loss of their practice as they come on board to deliver
    service to our country.
        Dr. Bailey. Let me just say, as a former Navy reservist
    myself, that I take great pride in not so much what I did but
    what I watched my unit do. They came and drilled on the
    weekends and were standing at the ready during the gulf war to
    deploy, to back-fill, to do whatever they were called upon to
    do, and so again I think we all give great credit to our
    reserve and guard. Specifically, there are programs underway,
    and I would want to let this committee know about concerns we
    have about providing the medical support to the families of
    reservists when they are gone.
        The Department of Defense has always stood behind reserve
    and guard and in fact would like to see a waiver of
    deductibles, would like to see a more fair arrangement for the
    medical services to their family. Right now, if you are
    deployed for under 30 days we do not have coverage. Over 30
    days you are what is called standard, which is old CHAMPUS,
    which is not as cost-effective as it could be for a family, and
    it has to go past 180 days for them to get equal benefits for
    other active duty members.
        So again, that is something the Department has always been
    behind, but the Office of Management and Budget (OMB) has felt
    was too costly to implement. I would suggest it is not too
    costly to provide for the medical needs of those who deploy and
    leave families at home at a moment's notice, as the reserves
    do.
        Let me just also say, in the recruitment and retention,
    that the loan repayment that General Blanck mentioned is now up
    to $10,000 a year, up from $3,000 a year, and that it is also
    available now, even during the training years, and that for
    retention we have a bonus of $30,000 that has recently become
    available to health care providers, especially in the
    critically short specialty areas.
        Senator Inouye. Admiral.
        Admiral Nelson. We have several problems in reserve and
    retention of reservists for bringing them in. In the enlisted
    community I am about 2,000, over 2,000 short, and we have a
    number of initiatives out to try and increase our accessioning
    in of individuals into the reserve, particularly hospital
    corpsmen, and also to retain the hospital corpsmen who leave us
    but go to medical technical training and try to offer them an
    incentive to stay in the reserve as we assist them with school,
    and so certain initiatives going, but I do have a significant
    shortfall in corpsmen and other dental techs as well.
        In the Nurse Corps, I am about 200 short in the reserve
    right now. We have not been able to recruit to the level we
    need, but more than just the numbers, it is a distribution
    issue. We are short on the perioperative trained nurses, the
    critical care skills, the nurse anesthetists, and so it is a
    focused shortfall, really, in the reserves.
        For the Medical Corps and Dental Corps, the issue is a
    little bit different. Our numbers are not as short, but we are
    short of the right mix, and one that is critical for us is, we
    plan our manpower and how we resource the reserve officers
    based upon an average grade level of lieutenant commander, I
    think, or major.
        By the time a surgeon, an orthopedic surgeon trains, comes
    out of medical school, does--let's say he does an in-service
    internship residency, does his payback time, and then makes a
    decision to leave the service, he has reached a level of 05. He
    has reached a level of, is ready to be or has been selected for
    commander in the Navy. I do not have any billets open for
    commanders and captains in the reserve. No matter how much I
    want that individual, I am having trouble getting them into a
    slot in the reserve now.
        So we have got a problem with the grade levels that we
    distribute to in the reserves, and I have got to figure out a
    way to overcome that, because I have lots of good people we
    have trained, many of them who leave active duty and would be
    willing to stay in the reserves, and we do not have slots for
    them.

            Uniformed services university of health sciences (USUHS)

        Senator Inouye. Thank you.
        USUHS has been under attack ever since its inauguration,
    although I am happy to note that the attacks have become less
    and less in recent months, in recent years. I just want to
    know, are you satisfied with what USUHS is doing?
        General Roadman. Absolutely. As a commander in previous
    assignments I was much happier to get a USUHS graduate than a
    graduate of any other medical school because they had the
    officership skills, they had the core understanding of the
    military, and they in fact were a cadre of leadership within
    the military, the Medical Corps. That is also true of products
    of the school of nursing, in that we get excellent officers. I
    think it is--as you know from watching that battle, it depends
    upon how you cut the cost to figure out whether it is cost-
    effective. My assessment is, it is a cost-effective method when
    you include the recruitment and the retention of people over a
    long career, and I am delighted with the product we get.

                        satisfaction with USUHS programs

        General Blanck. Also extremely supportive and pleased with
    the product of all of the schools, graduate schools. Graduate
    School of Nursing, the medical school, and it does offer that
    combination of officership within the medical practice
    discipline.
        I would add that it is a cadre. We probably should not get
    everybody from the same school, and so it is probably in the
    right proportion with the others whom we rely upon from the
    health professions scholarship program that bring in physicians
    and other health professionals from the civilian schools.
        The challenge there, of course, is to provide them with the
    basic course, with the tools to function in our culture, and
    truly become military physicians, military nurses, rather than
    just practicing medicine in the military. There is a difference
    between that and military medicine. USUHS graduates practice
    military medicine, not just medicine in the military, or
    nursing in the military. They truly do that, and we need to
    bring the health professionals scholarship programs (HPSP's)
    along.
        It always occurs to me, as we all will, I suspect, be
    supportive of the medical school, none of us are graduates of
    it. We came from civilian schools, and in fact General Roadman
    says that he is thinking seriously of making the Air Force a
    career. [Laughter.]
        Admiral Nelson. I would echo those comments about the
    products of USUHS. I have had two hospital commands in which I
    have had the physician students from there on my staff, and I
    was skeptical of them initially, but my assessment, after 7
    years in command of hospitals, is that that is our best
    quality, overall our best quality producer of military medical
    officers.
        Dr. Bailey. Let me just add that fortunately--I agree,
    USUHS is really a shining star, I think for military medicine,
    and fortunately the funding has now been corrected. They are
    indeed funded, and they have also received some additional
    funding, and I just want to mention that that is in the area of
    military nursing research, the Graduate School of Nursing,
    brain injury treatment, noninvasive prostate treatment,
    coronary disease reversal program, and finally the Center for
    Disease Management. So you can see the kind of work that is
    going on in USUHS. They are a great institution.

                                Retention rates

        Senator Inouye. I just want to add this to your statement.
    If my recollection is correct, for USUHS graduates going beyond
    the obligatory period, I think the retention numbers exceed 90
    percent, is that not correct?
        General Blanck. Yes, sir. Last year it was in excess of 92
    percent.
        Senator Inouye. And if you compare that to the other
    service academies, Annapolis, the Air Force, and West Point, I
    think they average about 60, do they not?
        General Roadman. I do not know.
        Senator Inouye. Which shows that you have done very well,
    and we here on this committee are most grateful.
        My last, and it may not be a question, but I am certain you
    are aware that all of us are constantly confronted with letters
    from constituents, nonmilitary, who are always complaining we
    are spending too much for the military.
        Now, for example, on my last visit to Hawaii I spent a
    couple of hours at a community gathering, and the first
    question I was asked is, why don't you cut down defense? Well,
    I think we are doing a lousy job in informing the people of the
    United States. For example, less than 1 percent of the
    population is involved in uniform. Ninety-nine percent do not
    play a direct role in our military.
        Furthermore, I think, when I tell my constituents that if
    one looks at the budget and decides upon how much we are
    spending, you will notice that 60 percent of the money spent is
    for preparation of war, and after wars, 60 percent are
    personnel. In the defense budget I think it is about 50
    percent, and when you add retirement costs, there's another 8
    or 9 percent, so roughly 60 percent of our total defense budget
    is spent on personnel, and people, when they hear this, are a
    little stunned. They were not aware of that.
        Second, when I point out, because I am one of the dinosaurs
    here, that when I was in the service, in my regiment 4 percent
    of the men had dependents. Today, I think the average in all
    services exceeds 60 percent. I think in the Army it is, what,
    65, 70 percent. The same thing with the Navy and the Air Force.
        And I think this should be made known to the people that
    our military hospital is not the type that I attended back in
    the forties, where you very seldom, if ever, saw a child or a
    dependent there. Today, I think at Walter Reed, 15 percent of
    the beds are occupied by active service personnel and 85
    percent by dependents or retirees, and that is the cost.
        When I point out that personnel costs far exceed the costs
    of weapons systems, but we hear only about weapons systems, I
    would hope that you people would start blowing your own horn
    and talking about how important you are, because what you are
    doing keeps our military together. From a very practical
    standpoint, without you, retention is out of the window,
    recruiting is out of the window, and without you we will not
    have the research.
        These are all leading questions that I gave you, but for
    example, the best research on acquired immune deficiency
    syndrome (AIDS) is done in the military. All the best research,
    whether it be breast cancer or pediatric asthma, it is all in
    the military, because it does have a military impact, and I
    hope we tell the folks at home what all of you are doing.
        We have a lot of publicity on other aspects of the
    military. You see the B-2 flying around, or an aircraft carrier
    sailing around, but very seldom do you see the work of nurses
    and doctors, and that is what keeps our military together.
        Dr. Bailey. Senator, I would certainly echo your thoughts.
    Again, I think we all take pride in the men and women who serve
    our Nation as medics for the service and, in fact, military
    medicine is better than it ever was before. If you look back
    years ago, there was not the preventative folks. Health and
    wellness and a fit force was not something that was focused
    upon the way you hear General Blanck discuss it today. Our
    beneficiary population has gone up.
        In fact, the demographics have shifted tremendously. Our
    over 65 population in the 1950's was about 7 or 8 percent. In
    the year 2002 it will go past 50 percent, 50 percent active
    duty and families and 50 percent over 65, so again, our
    peacetime mission has shifted dramatically.
        I would want to state here for the record that it is that
    peacetime platform from which we take this managed care
    organization, the HMO that is the military health care system,
    and we go to war when we are called upon to do so, and I think
    everyone takes pride when they see military medics in action,
    like they were in Kenya. Our people from the combat casualty
    air transport team in Ramstein, Germany, went in to get our
    people out of Kenya after that terrible bombing, and when you
    see people in American uniforms on the end of the gurney,
    everybody knows you are in good hands.
        So I think you are right. I think we need to give the pride
    and the recognition to the medics of the military.
        General Roadman. Senator, if I can add one thing, I think
    in the rational world everything you have described is
    absolutely correct, what we do, what we do well, how we aid the
    Nation. However, I think we are caught in a political cross-
    fire as we get to this demographic change, and folks going over
    65, quite frankly, since we went to an all-volunteer military
    in 1973, we retained and recruited based on the promise of
    health care for life.
        But as the folks get to 65, and as the post cold war right-
    sizing occurs they find themselves in communities that are
    orphaned, and the cost of Medicare Part B that they did not
    take before is exorbitant to them, or that in fact they cannot
    get in because space available is decreasing, and so we are
    caught in a problem between beneficiaries that quite frankly
    have a legitimate case, title 10, which does not cover them,
    nor does it cause the dollars to flow to take care of those,
    and where that battle occurs is not at how good we are, it is
    at the appointment desk.
        And so quite frankly we get beat up by the associations and
    by the individual beneficiaries that cannot get their care, and
    quite frankly it is a problem we cannot solve, because we are
    here to execute a benefit with the funds that we are given, and
    quite frankly, it is never enough to meet the expectations of
    what people think they are entitled to.
        So as you are doing that, quite frankly we are not very
    effective at blowing our horn, because we are in a crouched
    position with our hands over our heads trying to keep from
    getting beat up, and so I love hearing what you say. You are
    better at blowing our horn than we are, while we are ducking
    for cover.
        Senator Inouye. Well, it is about time you get up and stand
    tall.
        General Roadman. Well, I agree with that, sir.
        Senator Inouye. Well, Dr. Bailey, General Blanck, General
    Roadman, Admiral Nelson, on behalf of the committee, I thank
    you very much for the testimony, and on behalf of the committee
    I thank you for the service you are rendering to our Nation.
    Thank you.
        Now, at long last--and we are supposed to have adjourned by
    now, but if I may now call upon Brigadier General Bettye
    Simmons, Chief of the United States Army Nurse Corps, Brigadier
    General Linda Stierle, Director of Medical Readiness and
    Nursing Services, Rear Admiral Kathleen Martin, Director of
    Navy Nurse Corps.

                         Additional committee questions

        I have a very lengthy statement here, but I am going to put
    that in the record because time is of the essence at this time.
    I would like to thank all of you for being with us today.
    Before I call upon you, I would like to say that I have many,
    many questions and, if I may, to the Surgeons General I will be
    submitting them for your response, so may I now thank all of
    you for attending, and may I call upon General Simmons.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                     Questions Submitted to Dr. Sue Bailey
                   Questions Submitted by Senator Ted Stevens
        Question. Can you give us an update on your Anthrax Vaccine
    Program?
        Answer. To date, execution of the program has gone exceeding well
    overall. As of May 16, 1999, more than 890,000 anthrax immunizations
    have been given to over 288,000 Service members since implementation of
    the Anthrax Vaccine Immunization Program (AVIP) on March 10, 1998.
    Immunization compliance rate for most of the Military Departments meet
    or exceed the Department of Defense goal of 90 percent. The incidence
    of side effects or adverse reactions following injection approximates
    other similarly prepared, common vaccines. Although local reactions at
    the injection site are not uncommon, they are usually mild and short-
    lived. There have been very few serious adverse reactions (defined as
    resulting in hospitalization or loss of work time greater than 24
    hours) and these cases have been medically resolved. To date, there
    have been 79 reports of adverse reactions following administration of
    the anthrax immunization. It is unclear whether these reactions are
    directly attributable to administration of the anthrax vaccine. Only
    eleven of these cases required hospitalization or loss of duty for more
    than 24 hours.
        Question. I understand from press reports that some service members
    have received shots of vaccine that was expired. How did this happen,
    and how will you prevent it from happening again?
        Answer. A number of recent articles in magazines and newspapers
    have incorrectly reported that a certain lot of anthrax vaccine (i.e.,
    FAV020) that were administered to our Service members or shipped to
    military facilities was expired. At no time have expired lots or vials
    of anthrax vaccine been administered to our Service members or shipped
    by DOD to any military facilities.
        Anthrax vaccine lot number FAV020 was originally approved for
    release by the FDA in 1994, with an expiration date in 1996. The
    manufacturer of the FDA-licensed anthrax vaccine, BioPort (MBPI),
    requested an extension of the expiration date and conducted additional
    potency testing on lot number FAV020 in 1996 in order to meet FDA's
    requirements for extending the expiration date. This potency testing
    was satisfactory and FDA subsequently re-released lot number FAV020
    with the expiration date extended until 1999. The extension of the
    expiration date on anthrax vaccine lot number FAV020 involved the
    manufacturer, MBPI, and the FDA. The DOD was not involved in the
    extension of anthrax lot number FAV020. Any manufacturer of a
    pharmaceutical or biological product can request and receive an
    extension from the FDA on the expiration date of the product after
    federal requirements for product extension have been successfully met.
    It is not uncommon for a government or private-sector organization to
    use a pharmaceutical or biological product whose expiration date has
    been extended by the FDA.
                                     ______

                  Question Submitted by Senator Arlen Specter
        Question. One criticism of the Department of Defense's inoculation
    policy, especially during the Gulf War, was that there was no way to
    track which soldiers were given a particular vaccine and at what time.
    Are you familiar with the recent incident in which 59 Marines, 20 of
    whom are unidentified, were given expired doses of the anthrax vaccine?
    What is the Department doing to ensure that all lots of the vaccine are
    inspected prior to administration? Also, what effort is the Department
    making to correct its incomplete record keeping?
        Answer. At no time have expired lots or vials of anthrax vaccine
    been administered to our Service members or shipped by DOD to any
    military facilities. A number of recent articles in magazines and
    newspapers have incorrectly reported that a certain lot of anthrax
    vaccine (i.e., FAV020) that were administered to our Service members or
    shipped to military facilities was expired. Anthrax vaccine lot number
    FAV020 was originally approved for release by the FDA in 1994, with an
    expiration date in 1996. The manufacturer of the FDA-licensed anthrax
    vaccine, BioPort (MBPI), requested an extension of the expiration date
    and conducted additional potency testing on lot number FAV020 in 1996
    in order to meet FDA's requirements for extending the expiration date.
    This potency testing was satisfactory and FDA subsequently re-released
    lot number FAV020 with the expiration date extended until 1999. The
    extension of the expiration date on anthrax vaccine lot number FAV020
    involved the manufacturer, MBPI, and the FDA. The DOD was not involved
    in the extension of anthrax lot number FAV020. Any manufacturer of a
    pharmaceutical or biological product can request and receive an
    extension from the FDA on the expiration date of the product after
    federal requirements for product extension have been successfully met.
    It is not uncommon for a government or private-sector organization to
    use a pharmaceutical or biological product whose expiration date has
    been extended by the FDA.
        With respect to record keeping for the anthrax vaccine, the
    Services use automated immunization tracking systems (ITS) to record
    and track the anthrax immunization status of Service members. A core
    set of anthrax information data in a standard format is transmitted to
    the DOD's central personnel database, the Defense Enrollment and
    Eligibility Reporting System (DEERS). As individuals redeploy or move
    from one geographic location to another, the automated ITS allow query
    of the DEERS database to confirm the immunization status of an
    individual or update the individual Service members immunization
    record. These ITS are also used as a management tool to remind
    Commanders and individuals about their anthrax immunization status. As
    a redundant back-up to the automated ITS, anthrax immunization data is
    also recorded in the Service member's medical records and the
    immunization shot record (PHS 731, International Certificate of
    Vaccination). The Department conducts routine audits of the ITS, DEERS
    database, and Service member medical records to ensure that anthrax
    immunization data is being appropriately documented.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                                family advocacy
        Question. Dr. Bailey, there has been concern and increased
    attention to violence in military families. In fiscal year 1997 alone,
    $100.7 million was earmarked for Family Advocacy programs in DOD. While
    child neglect and abuse has remained stable at half the civilian rate,
    spouse abuse has increased. What is the military medical community's
    involvement with line units to address this issue and improve Family
    Advocacy programs?
        Answer. Physicians, nurses and other health care providers play a
    key role in the evaluation and treatment of persons who are victims of
    domestic violence. Sometimes the signs are obvious, such as in the case
    of a woman who is brought to the emergency room with multiple injuries
    that clearly were not accidental. Often it is much more subtle, such as
    a patient who comes into a Family Practice clinic with a headache and
    is reluctant to talk about what is happening at home. Identifying
    patients who are victims of domestic violence requires a thorough
    understanding of the problem, excellent diagnostic skills and the
    ability to make patients comfortable in discussing very distressing
    events. Our physicians, nurses and other health care providers receive
    regular training in these areas.
        Identification is just the first step. Physicians and other health
    care providers not only treat the injuries but also help patients stay
    safe and find solutions. Referral to Family Advocacy for specialized
    services is an essential part of that process. Physicians work with
    Family Advocacy as an essential part of the Case Review Committees who
    review all Family Advocacy cases.
        As you know, the Assistant Secretary of Defense for Force
    Management Policy has responsibility for the Family Advocacy Program.
    Recently the Office of Family Policy initiated a thorough review of DOD
    and Service policies on spouse and child abuse. Several opportunities
    for improvement were identified. Family Policy convened a working group
    with representatives from the Services and from Health Affairs that is
    meeting monthly to deal with the issues identified.
        The Services vary in the way the Family Advocacy Program fits into
    the organization. In the Army and the Air Force, the medical command
    has a major responsibility for the program. In the Navy and the Marine
    Corps, Family Advocacy is a personnel program. In all the Services, the
    Family Advocacy Program works closely with unit commanders and military
    treatment facilities to increase awareness and improve services.
                    federal employee health benefits program
        Question. Congress mandated a demonstration project to offer the
    Federal Employee Health Benefits Program (FEHBP) to retirees as an
    alternative to receiving care through the military health system. While
    there are strong segments of support for this alternative, there is
    also concern that this proposal would be very expensive both to the
    government and the individual. There is also concern that this
    particular plan would have a negative impact on the military medical
    system. What is your assessment of the impact of this proposal on
    military medicine?
        Answer. DOD recognizes its responsibility to offer a health program
    for military beneficiaries aged 65 and older, and desires to improve
    upon the vagaries of ``space available'' care. For example, DOD mail
    order and retail pharmacy benefits are extended to Medicare-eligibles
    who formerly relied on now-closed pharmacies. Our commitment is to
    maintain access to care, and maintain our level of space-available care
    to the maximum extent feasible despite continuing reductions in medical
    infrastructure. We believe that significant efficiencies can be
    achieved in the Military Health System without reducing space-available
    care. Our strategy is to explore and test viable options for retiree
    health care, to identify the best ways to meet our beneficiaries' needs
    in the future.
        Among the programs that are now under way or being developed are
    the following:
      --TRICARE Senior (Medicare subvention) is undergoing a 3-year test at
            six sites, as authorized by the Balanced Budget Act of 1997.
            Under the first component, called TRICARE Senior Prime, DOD may
            receive capitated payments from Medicare Trust Funds for
            beneficiaries enrolling in TRICARE. Under the Medicare Partners
            component, DOD will enter into agreements with Medicare Choice
            Plans, and receive payments from the plans for care provided to
            dual-eligible beneficiaries enrolled with the Partner plan.
      --A demonstration project at MacDill AFB, Florida involves enrollment
            of 2,000 seniors for primary care services at the MacDill
            hospital; when they need services beyond the capabilities of
            MacDill, they will obtain those services from civilian
            providers and use their Medicare entitlement. Annual DHP
            funding of $2 million has been allocated to this project.
      --Additional demonstrations TRICARE as a supplement to Medicare, at
            two sites, and enhanced pharmacy coverage, at two sites, have
            been directed, along with the FEHBP Demonstration, in the Strom
            Thurmond National Defense Authorization Act for Fiscal Year
            1999. Health care under these projects will begin in fiscal
            year 2000. With full implementation of these demonstration
            programs next year, DOD will have in place projects in about 20
            locations, affecting about 100,000 over-65 military
            beneficiaries. As information becomes available about
            beneficiary satisfaction, program costs and feasibility, and
            other factors, it will be vital to examine the options and come
            up with a well-reasoned approach to meeting the health care
            needs of the beneficiaries, to whom the nation owes so much.
    Estimating the Cost of FEHBP for Military Beneficiaries
        DOD has reviewed the results of two analyses of the Military Health
    System (MHS) and FEHBP conducted by the Congressional Budget Office,
    and the findings in the General Accounting Office report, ``Military
    Retirees' Health Care--Costs and other Implications of Options to
    Enhance Older Retirees' Benefits'' (June 1997).
        The key implication of CBO's July, 1995, report, ``Restructuring
    Military Medical Care,'' is that replacing the peacetime military
    health benefit with FEHBP would result in a net added cost to the
    Government, ranging from $7.3 billion to $12.1 billion, depending on
    the level of government contribution to the FEHB premiums. This
    includes increased Medicare trust fund expenditures estimated at $1.4
    billion. Also, the average annual out-of-pocket costs per beneficiary
    are about $1,250 under the most widely used FEHBP plan, Blue Cross and
    Blue Shield standard option. A comparable figure for TRICARE would
    range from $100 to $500, depending on beneficiary category and option
    selected.
        In January 1998, CBO provided cost estimates for several bills that
    would provide coverage for certain MHS beneficiaries. Because of the
    provisions of these bills, CBO took a different approach than in its
    1995 analysis: FEHBP is considered as an additional choice for
    beneficiaries, rather than as an alternative to existing coverage. CBO
    concludes that, given government and beneficiary premium contributions
    commensurate with those for civil service non-postal employees and
    annuitants, participation rates would be about 70 percent for
    beneficiaries over 65, about 5 percent for retirees, their families and
    survivors under 65, and nil for active duty families. These
    participation rates reflect the availability of cost effective
    alternatives to FEHBP. Overall, CBO estimates the net cost of offering
    an FEHBP option at about $2.1 billion annually. Most of this cost is
    attributed to Medicare-eligible beneficiaries, because CBO expects very
    low participation by other MHS beneficiaries.
        These two analyses by CBO delineate two extremes: the 1995 report
    provides a high estimate, based an assumption that the MHS will be
    unavailable, and the 1998 report provides a low estimate, based on
    expected beneficiary response to an FEHBP option offered in addition to
    current options.
        In its June 1997 report, the General Accounting Office assumed that
    83 percent of Medicare-eligible retirees and family members would
    enroll in FEHBP if offered the choice, and estimated the cost to DOD at
    $1.6 billion. GAO did not estimate the cost to the Medicare Trust Funds
    of offering FEHBP.
    Impact of FEHBP on Military Medical Readiness
        In addition to the issue of cost, DOD has concerns about the
    military readiness implications of offering an FEHBP entitlement to MHS
    beneficiaries. These impacts would be exacerbated if the CBO's alarming
    estimates for the costs for an FEHBP option prove accurate, and some of
    the costs must be borne out of the existing Defense Health Program. The
    inseparability of the twin missions of military medicine is, simply
    stated, the ability to care for the men and women of the uniformed
    services through a continuum of operations reaching from the ``boots on
    the ground'' to installations here in the United States. A vital, and
    unique component is the ability to assess health risks associated with
    ongoing worldwide deployments. The MHS must have physicians, nurses,
    technicians, and medics who know what to do to save lives and prevent
    illness and disease. They learn how to operate in a field or shipboard
    environment by working within that military setting, and they maintain
    their professional, technical skills by working in a military medical
    setting. We need hospitals and clinics where our health care personnel
    can practice and provide a highly valued benefit to the families of our
    active duty personnel, our retirees and their families.
        If substantial numbers of beneficiaries are removed from the
    Military Health System, then DOD's ability to recruit, train, and
    maintain the needed medical force could be seriously impeded or
    disrupted. Existing training programs in military facilities may be
    unsupportable; new arrangements with civilian facilities for training
    military personnel would have to be made. There are considerable
    overlaps in the resources needed to treat seniors in peacetime and the
    casualties of war--from intensive care and operating rooms, to
    radiology and pathology services, to physical therapy and dialysis.
    Keeping these resources on standby for war is impractical; using them
    to support peacetime care for military beneficiaries is the sensible
    approach.
        DOD is committed to improving the military health system. Health
    care is an important aspect of quality of life, and DOD is committed to
    ensuring the quality and availability of medical care for all members
    of the military community including active duty personnel and their
    families, and retirees, their families, and survivors. FEHBP presents
    an alternative health care delivery option that could threaten the
    viability of our medical readiness infrastructure and would be
    dramatically more expensive for the Government and for beneficiaries
    than TRICARE for CHAMPUS-eligible beneficiaries and TRICARE Senior for
    Medicare eligibles.
                                     ______

                Questions Submitted by Lt. Gen. Ronald R. Blanck
                   Questions Submitted by Senator Ted Stevens
                         breast cancer research program
        Question. Can you give us an update on the breast cancer research
    program?
        Answer. The U.S. Army Medical Research and Materiel Command
    (USAMRMC) sponsors basic and clinical research relevant to breast
    cancer that will result in substantial improvements over today's
    approach to the prevention, detection, diagnosis, treatment, and basic
    biology of the disease. Awards are designed to stimulate innovative
    research, address issues of morbidity and mortality, and fortify the
    national effort against breast cancer. Congress directed the U.S.
    Army's involvement in the current BCRP; the Army program is in
    accordance with Institute of Medicine (IOM) guidelines; appropriations
    for fiscal years 1992 through 1999 (fiscal year 1992-99) total $864.1
    million; since the inception of the BCRP, 10,728 proposals have been
    received and approximately 1,400 awards have been made.
    Program Accomplishments
        The overall goal of the BCRP is to promote research directed toward
    eradicating breast cancer. To accomplish this mission, the Program
    funds a diverse portfolio that encompasses research on prevention,
    detection, diagnosis, treatment, quality of life, and basic biology.
    Research achievements for the fiscal year 1997 program are preliminary
    since these projects have only been funded for approximately one year.
        Congress has appropriated $135 million for the fiscal year 1999
    BCRP; this money was received at USAMRMC on 11 January 1999. Vision
    Setting for the fiscal year 1999 BCRP occurred on 27-28 January 1999.
    The Program Announcement for fiscal year 1999 was released 3 March
    1999. Approximately 1,500 proposals are anticipated, resulting in
    approximately 400 awards. Scientific review will be conducted August/
    September 1999 and programmatic review will occur in November 1999.
    Investigators will be notified of their funding status in December 1999
    with the first award being made shortly thereafter.
        New award mechanisms have been developed to complement those
    offered by other agencies. They stimulate innovative, creative research
    and provide training of scientists for careers in breast cancer
    research. The fiscal year 1999 BCRP Program Announcement solicited
    proposals in the following eleven categories: Career Development Award
    (CDA), Clinical Translational Research (CTR) Award, CTR CDA Award, CTR
    Fellowship Award, Collaborative CTR Award, Historically Black Colleges
    and Universities/Minority Institutions (HBCU/MI)-Focused Training
    Award, HBCU/MI-Partnership Training Award, Idea Award, Institutional
    Training Grant, Post-doctoral Traineeship, and Pre-doctoral
    Traineeship.
        Some of the more noteworthy results stemming from the BCRP are
    under prevention: the development of a new vaccine targeted against
    ductal cell carcinoma in situ that results in a decreased rate of tumor
    development in an animal model (Esserman LJ, et al., 1997 Era of Hope
    Proceedings, Volume I, p. 265). Under Detection/Diagnosis: the
    development of a new methodology that may provide a convenient,
    sensitive means to detect changes to genes in human breast samples
    (Giese RW, et al., 1997 Era of Hope Proceedings, Volume I, p. 153).
    Finally, under Basic Biology: work in the characterization of matrix
    metalloproteinases and their role in metastases (Matrisian LM, et al.,
    1997 Era of Hope Proceedings, Volume II, p. 623).
        As a result of funding through the BCRP researches have obtained 27
    approved patients with 2 more expected to be granted in time for the
    ERA of Hope II, which I will address in a moment. Additionally, joint
    funding projects with the National Cancer Institute outline common
    scientific research projects reduced duplication of effort. The BCRP
    also works closely with state agencies and utilizes cancer prevention/
    cure advocacy groups in the review process.
        The DOD BCRP employs a flexible funding strategy that is responsive
    to Congressional direction and is adaptable to the needs of the public
    and the research community. A major program accomplishment for the BCRP
    was the multidisciplinary Era of Hope meeting held in the fall of 1997.
    This meeting achieved many goals, including demonstrating the
    successful BCRP public-private-government partnership, providing an
    opportunity for the exchange of information among scientists from the
    diverse disciplines and consumer advocates, and disseminating the
    research results from DOD-funded research. The success of the ERA of
    Hope meeting has prompted the USAMRMC to hold a similar
    multidisciplinary meeting to showcase funded DOD projects. ERA of Hope
    II is scheduled to take place 8-12 June 2000 in Atlanta, Georgia.
    Conclusion
        The DOD CDMRP creates a unique partnership among the public,
    private, and military sectors. As the Executive Agent for the DOD
    CDMRP, the USAMRMC has interpreted and executed the Congressional
    directives for each appropriation with rigor and integrity. As a
    result, the USAMRMC has created programs that are innovative,
    scientifically sound, and responsive to the needs of the scientific and
    advocacy communities.
        Question. As you know, the Congress appropriated $135 million for
    breast cancer research in both fiscal years 1998 and 1999. When do you
    expect to award these research funds?
        Answer.
    Fiscal year 1998 BCRP
        The first award for the fiscal year 1998 BCRP was negotiated on 31
    March 1999. As of 19 May 1999, 82 awards (20.5 percent of all fiscal
    year 1998 awards) have been negotiated. The remaining 330 awards will
    be granted no later than 30 August 1999.
    Fiscal year 1999 BCRP
        The deadline for receipt of all submissions except Clinical
    Translational Research (CTR) and Collaborative Clinical Translational
    Research (C-CTR) pre-proposals is 2 June 1999. The deadline for receipt
    of invited, full CTR and C-CTR proposals is 28 July 1999. Peer and
    programmatic review of fiscal year 1999 proposals will be completed by
    17 November 1999, with the subsequent approval of the awards list by
    the Commanding General, USAMRMC. The first awards will be negotiated in
    January 2000 with all awards finalized shortly thereafter.
                        computer-based simulation models
        Question. Do you believe that computer-based simulation models can
    enhance health planning and reduce health care costs, while maintaining
    quality?
        Answer. I certainly believe they have the potential to. In fact,
    based on this belief, one of my major subordinate commands (U.S. Army
    Medical Research and Material Command [USAMRMC]) partnered with Vector
    Research, Inc. (VRI) to produce the first version of the Healthcare
    Management Model (HMM) in 1998. The HMM is a prospective, population-
    based, strategic planning decision support tool that can model for
    complex healthcare systems the impact of alternative disease management
    (DM) processes on health status and future workload requirements. This
    product was expanded for disease state modeling at Wilford Hall and
    Brooke Army Medical Centers in the past year along with expanded work
    for the Great Plains Regional Medical Command. It helps provide answers
    to questions such as which diseases to target for DM, what are the most
    cost-effect interventions, and how to allocate resources between
    preventive and acute clinical interventions.
        The Healthcare Complex Model (HCM), also developed under contract
    to USAMRMC, is also a simulation-based model which focuses on
    healthcare reengineering from a corporate perspective. The strengths of
    the HCM are in running quantitative analyses of significant variations
    in health system policy or structure such as variations in clinical
    practice patterns (i.e., referral), changes in medical technology, or
    staffing patterns. These systems are an exciting way to model different
    healthcare scenarios.
                        prostate cancer research program
        Question. Can you give us an update on the prostate cancer research
    project?
        Answer. The U.S. Army Medical Research and Materiel Command
    (USAMRMC) sponsors basic and clinical research relevant to prostate
    cancer that will result in substantial improvements over today's
    approach to the prevention, detection, diagnosis, treatment, and basic
    biology of the disease. Awards are designed to stimulate innovative
    research, address issues of morbidity and mortality, and fortify the
    national effort against prostate cancer. The PCRP is modeled after the
    current and highly praised Breast Cancer Research Program (BCRP).
    Current Status
        Congress appropriated $50 million for continuation of the PCRP in
    fiscal year 1999. New Investigator Awards and Idea Development Awards
    have been continued in fiscal year 1999. The MPFT Award was renamed the
    Minority Population Focused Collaborative Training (MPFCT) Award in
    fiscal year 1999, since emphasis was placed on fostering collaborations
    between applicants and established prostate cancer researchers. Two new
    award subcategories have been introduced: Prostate Cancer Center
    Initiation Awards and Post-doctoral Traineeship Awards. The intent of
    the Center Award is to engage experts from multiple disciplines to
    establish regional centers for the study and treatment of prostate
    cancer. The intent of the Traineeship Award is to enable recent
    doctoral degree students to conduct research in prostate cancer.
        Scientific peer review of 48 Post-doctoral Traineeship proposals
    was conducted in March 1999. Programmatic review of these proposals was
    performed in April 1999, where 26 proposals (54.2 percent) were
    recommended for funding. Scientific peer review of 202 New
    Investigator, 366 Idea Development, and 10 MPFCT proposals was
    conducted in May 1999, and programmatic review of these proposals will
    occur in August 1999. Screening of 43 Cancer Center Initiation pre-
    proposals was conducted in April 1999, where 20 pre-proposals (46.5
    percent) were invited to submit full proposals. Scientific peer review
    of Cancer Center Initiation full proposals will be performed in
    September 1999, and programmatic review of these proposals will occur
    in October 1999. Award negotiations for Post-doctoral Traineeships will
    begin in May 1999; award negotiations for the other award types will
    begin shortly after the proposals are programmatically reviewed. All
    award negotiations will be completed by 30 September 2000.
    Program Accomplishments
        To date, 185 proposals have been approved for funding with the
    fiscal year 1997/98 funds by the Commanding General, USAMRMC, and work
    on these projects is currently being initiated.
        In response to requests from scientists, advocates, and members of
    Congress to increase the pace of distributing appropriations for
    scientific research, the PCRP has decreased the time between
    appropriation of funds and distribution to scientists. The fiscal year
    1999 PCRP Program Announcement was released on 23 December 1998, and
    the time between receipt of appropriation and distribution of funds to
    scientists has been decreased from 15 months to 6-10 months, depending
    on award category.
        Question. In the past, it has taken too long to get research money
    out to the scientists and researchers. What are you doing to speed up
    the process?
        Answer. The Congressionally Directed Medical Research Program
    (CDMRP) office has significantly accelerated proposal review and award
    negotiations, so that research money can be expeditiously allocated to
    the researchers without compromising the integrity of the proposed
    review process. For example, for the fiscal year 1999 PCRP, the time
    between receipt of appropriation and the first distribution of funds to
    scientists was decreased from 15 to 6 months for certain award
    categories (i.e., Post-doctoral Traineeships). Milestones for all
    CDMRPs are reviewed quarterly to continuously seek ways to accelerate
    the programs while maintaining a high quality review process.
    Specific Actions
        Certain actions have been taken to expedite the process of getting
    research funds to the scientists, including the following, Regulatory
    Documentation--Institutional Review Board appendices for high scoring
    proposals are now being requested prior to Programmatic Review so that
    Regulatory Compliance and Quality processing can begin as soon as the
    Commanding General approves the awards list; Electronic Funding--
    funding documents required to initiate awards have been converted to an
    electronic form thereby accelerating the time to award by approximately
    2 months; and Current Processing--the dissemination of paperwork/
    information to the different offices involved in negotiations is now
    done concurrently instead of sequentially; this has reduced the time in
    negotiations by approximately 3 months.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                            family advocacy program
        Question. There has been concern and increased attention to
    violence in military families. In fiscal year 1997 alone, $100.7
    million was earmarked for Family Advocacy programs in DOD. While child
    neglect and abuse has remained stable at half the civilian rate, spouse
    abuse has increased. What is the military medical community's
    involvement with the line units to address this issue and improve
    family advocacy programs?
        Answer. Increased OPTEMPO is having a negative effect on retention
    and morale with the result of a smaller Army with an increased demand
    for every form of family support and treatment. Increased family
    separations are ``placing tremendous stress on our troops and their
    families.'' Behavioral, mental health and family treatment/service
    providers system-wide report increased cases of marital problems,
    parent-child problems, adolescent acting out, child and spouse abuse
    (including significant other abuse), and alcohol and other substance
    abuse.
        The above challenges are further complicated as an increasing
    percentage of soldiers marry and have children. These individuals and
    their families can reasonably be expected to experience family related
    stressors associated with adjustment to the mobile military lifestyle,
    frequent deployments, field training exercises, and isolated
    assignments. Further, some young soldiers marry before they are mature
    enough to deal with attendant responsibilities, leading to increases in
    family problems and a tendency to utilize non-constructive coping
    behaviors.
        Increased stress of military life associated with increased OPTEMPO
    also affects families relative to assignments and promotion. With fewer
    soldiers available to meet demands for assignments, stress is increased
    as families attempt to seek assignments where identified special family
    needs can be met without family separations (e.g. exceptional family
    members) while meeting the demands of military service. Concern about
    whether such problems will negatively affect promotion and career
    potential is a source of stress for these soldiers and families. The
    Department of the Army provides a comprehensive range of individual,
    family, command and community behavioral and mental health programs and
    services to sustain, restore, or enhance social well being and
    functioning of individuals, families, military units and the Army
    community. These services and programs provide a continuum of care
    through peacetime, deployment, sustained operations, and post
    deployment, from birth through retirement and beyond.
        We provide the same family support programs and services found in
    the civilian community. The Army also has unique programs specifically
    for soldier support such as combat stress control, division mental
    health, unit and command mental health consultation, and stress
    response teams. These programs are significant to soldiers, their
    family members and the Army.
        Programs and services for soldiers and their families include the
    full range of inpatient and outpatient behavioral and mental health
    treatment, and programs in collaboration with other Army agencies such
    as the exceptional family member program; family team building; family
    advocacy (child and spouse abuse); and alcohol and drug treatment. In
    addition, Army Community Service Centers provide community-based
    programs to support soldiers, families and all beneficiaries.
        Programs and services are generally accessible to our service men
    and women, but some program areas are understaffed because of funding
    or personnel reductions. These reductions may result in waiting lists
    and delays in providing timely services or no services. Service
    providers have raised concerns regarding timely provision of the full
    range of services to soldiers, and regarding limitations of some
    services to family members. These concerns are particularly evident in
    outside Continental United States (OCONUS) and isolated CONUS locations
    which are most challenged by a relative lack of these providers.
    Professional Behavioral Health Providers
        As the Army force structure has been decreased over the last
    several years, the Army Medical Department (AMEDD) force structure has
    also been reduced. Consequently force structure reductions have
    occurred in behavioral health personnel, and other soldier and family
    program providers have been reduced.
        The social work officer (73A) strength decline serves as an
    excellent example of the declining AMEDD force structure. The
    authorizations for Army licensed social work officers (major providers
    of marriage/family therapy and family services to soldiers and
    families) has decreased from 153 in fiscal year 1996 (fiscal year
    1996), to 115 in fiscal year 2000. This represents a loss of 38 active
    duty social workers or a 25 percent reduction. These officers provide
    program leadership as well as direct services.

                                                AUTHORIZATION COMPARISON
                                                    [April 16, 1999]
    ----------------------------------------------------------------------------------------------------------------
                                                                            Fiscal year--
                                                         --------------------------------------------------  Overall
                                                            1996      1997      1998      1999      2000
    ----------------------------------------------------------------------------------------------------------------
    Social Workers (73A)................................       153       156       127       116       115       -38
    Percent.............................................  ........         2       -19        -9        -1       -25
    73A MEDCOM..........................................       113        86        92        95        83       -30
    Percent.............................................  ........       -24         7         3       -13       -27
    ----------------------------------------------------------------------------------------------------------------
    NOTE: 73A MEDCOM authorizations are part of total 73A authorizations.

    Prepared by APPD, Data Source: PMAD.

        Other providers of behavioral and mental health services including
    psychiatrists, psychologists, family counselors, drug and alcohol
    treatment specialists, family advocacy personnel, and exceptional
    family member program staff have experienced similar reductions in
    personnel as well as reductions in program budgets. However, the demand
    for these services has not decreased.
        Historically, professional treatment providers for families were
    assigned proportionally to medical treatment facilities (MTFs) and
    other program locations based on the number of soldiers and family
    members served. Today MTF commanders have the option to determine which
    personnel authorizations will be filled within their commands. In some
    instances, behavioral health providers are reduced in favor of other
    priorities. This in combination with the reality of decreased
    authorizations across the board has resulted in reductions in soldier/
    family program staffing.
    Exceptional Family Member Program (EFMP)
        The EFMP and the Educational and Developmental Intervention
    Services (EDIS) programs assist families with special needs to ensure
    that their needs are considered in the assignment process, and support
    Army readiness by maintaining personnel data on these family members
    and providing mandated services. Over 42,000 family members are
    enrolled. Authorizations are adequate but programs can be unevenly
    staffed which may negatively impact accessibility in certain locations
    where command priorities supersede staffing guidelines. This again is
    particularly true in OCONUS and isolated CONUS locations.
    Family Advocacy Program (FAP)
        The Army Audit Agency found the AMEDD underfunded for its mission
    to prevent and treat child and spouse abuse in its 24 October 1997 FAP
    report. With current funding, the AMEDD is 46 clinical personnel below
    the Department of Defense staffing standard. The most significant
    impact of the shortages is noted at deploying installations because of
    the large number of service members and family members. The European
    Regional Medical Command submitted an Army Family Action Plan
    initiative for 17 additional marriage and family counselors. This is an
    unfinanced requirement. Understaffing places programs in a reactive
    rather than proactive position relative to family problems and needs.
    There is currently a draft proposal in review which will change the
    funding stream for the Family Advocacy Program. In this proposal, funds
    will be distributed through Department of Defense ultimately to
    installation Commanders who will determine funding ratios for
    prevention and treatment.
    Alcohol and Drug Abuse Prevention and Control Program (ADAPCP)
        The Army ADAPCP provides a full range of comprehensive drug and
    alcohol identification, detoxification, treatment and follow-up
    services for soldiers and their families members. The ADAPCP counter-
    narcotics funding (known as VCND) program budget for treatment between
    1996 and 1998 was reduced from $4 million to $1.7 million. Twenty-one
    clinical positions have been eliminated in the program due to these
    cuts. The full gamut of services to beneficiaries can no longer be
    provided in many locations. Waiting lists exist intermittently at
    several installations including Fort Bliss, Fort Bragg, Fort Lewis,
    Fort Sam Houston, and Fort Stewart.
    Care for service members outside catchment areas
        Professional treatment providers and counselors outside of the DOD
    Family Advocacy Program are treated under the TRICARE benefit for
    mental health services, beneficiaries are eligible for eight visits for
    services with no pre-authorization required. They may choose from a
    network of providers. However, marriage and family counseling is not a
    benefit. Some of the other family counseling and intervention services
    that Army families experiencing psychosocial and environmental issues
    may need (and commanders expect) are not part of the benefit package.
        For active duty members outside the catchment areas, such as where
    recruiters may be located, we are working to amend TRICARE contracts so
    those beneficiaries will be able to call the contractor and obtain the
    name of a provider. Instances where the contractor may not have a
    provider readily available can be addressed on an individual basis.
        Also available to service members in Geographically Separated Units
    is a process which has been in place for a number of years. Soldiers,
    in need of mental health treatment, are identified by commanders who
    then contact social work services at the nearest medical facility. The
    social worker provides access to supplemental funds which are used to
    fund the treatment.
                    federal employee health benefits program
        Question. Congress mandated a demonstration project to offer the
    Federal Employee Health Benefits Program (FEHBP) to retirees as an
    alternative to receiving care through the military health system. While
    there are strong segments of support for this alternative, there is
    also concern that this particular plan would have a negative impact on
    the military medical system. What is your assessment of the impact of
    this proposal on military medicine?
        Answer. The Military Health System (MHS) must work hard to develop
    an equitable health benefit for retirees. TRICARE provides an excellent
    benefit for retirees and their families who are age under 65.
        For retirees age 65 and older, TRICARE Senior Prime (Medicare
    Subvention) should be proliferated throughout the MHS as soon as
    possible. Second, the National Mail Order Pharmacy should be expanded
    nationwide for this beneficiary group. Finally, FEHBP should be
    considered for those retirees age 65 and older who do not live near a
    military treatment facility (MTF). The Army supports the legislated
    demonstration of FEHBP for retirees age 65 and older, scheduled to
    begin 1 January 2000.
        Offering FEHBP to retirees age 65 and older who do not live near a
    MTF would have minimal impact on the MHS, given sufficient additional
    funding for such a new initiative. The MHS does not have existing
    resources to offer FEHBP as a new benefit.
        Offering FEHBP to all retirees regardless of age and location
    threatens the readiness of military providers by shrinking the
    beneficiary population and reducing the complexity of health care
    requirements. Graduate medical education within the MHS, a major
    incentive for physician accession and retention, would also be
    threatened by proliferation of FEHBP due to reduced complexity and
    population size.
                                     ______

               Questions Submitted to Vice Adm. Richard A. Nelson
                Questions Submitted by Senator Daniel K. Inouye
                                family advocacy
        Question. There has been concern and increased attention to
    violence in military families. In fiscal year 1997 alone, $100.7
    million was earmarked for Family Advocacy programs in DOD. While child
    neglect and abuse has remained stable at half the civilian rate, spouse
    abuse has increased. What is the military medical community's
    involvement with line units to address this issue and improve family
    advocacy programs?
        Answer. Although the Family Advocacy Program is managed by the Navy
    Personnel Command (NPC-661), our Military Treatment Facility (MTF)
    Commanders work collaboratively with the Line Commands to identify,
    assess, protect victims, intervene, treat, and follow-up on family
    violence situations.
        An MTF privileged provider chairs the Case Review Committee. The
    Case Review Committee is the multi-disciplinary body that reviews all
    cases of family violence, determines if abuse occurred, makes
    intervention/treatment recommendations to the service member's
    commanding officer, reviews treatment progress, and decides when to
    bring a case to closure.
        Our MTFs provide medical care in family violence cases that involve
    injury. The Joint Commission on the Accreditation of Healthcare
    Organizations requires that MTFs have criteria and protocol in place
    for identifying, treating, and referring victims of abuse of all kinds.
    There is also a requirement to have educational programs for hospital
    staff in domestic violence, child abuse, sexual assault, and elder
    abuse.
        MTFs provide mental health services to active duty victims and
    offenders. When care is not available within the Military Health
    System, the Bureau of Medicine and Surgery provides the necessary
    supplemental care funds to obtain treatment at civilian health care
    facilities.
        Family Service Centers are currently under the purview of Bureau of
    Naval Personnel and employ social workers who interface directly with
    the local commands concerning preventive and educational services.
                    federal employee health benefits program
        Question. Congress mandated a demonstration project to offer the
    Federal Employee Health Benefits Program (FEHBP) to retirees as an
    alternative to receiving care through the military health system. While
    there are strong segments of support for this alternative, there is
    also concern that this proposal would be very expensive both to the
    government and the individual. There is also concern that this
    particular plan would have a negative impact on the military medical
    system. What is your assessment of the impact of this proposal on
    military medicine?
        Answer. The Bureau of Medicine and Surgery fully supports the
    development and evaluation of demonstration projects designed to
    improve health care access to our 65 and over beneficiaries. By
    contrast, while full-scale implementation of FEHBP may provide more
    choice and protection for some military retirees, the program is
    prohibitively costly in terms of dollars, impairs the ability to
    continue to provide care to our beneficiaries, and negatively impacts
    on the capability to maintain an effective military readiness program.
        Specific impact on readiness training and readiness will result
    from reductions in MTF care provided to military retirees, their
    dependents and survivors. Training, retention, and quality of
    physicians and other health professionals necessary for medical
    readiness will additionally suffer if the retiree population is reduced
    in the direct Military Health System (MHS).
        A study completed by the Center for Naval Analysis in 1998
    estimates the cost of offering the FEHBP to our Medicare eligible
    beneficiaries to be $1.7 billion. The Office of Personnel Management
    oversees 450 different FEHBP plans ranging from Fee-for-Service to
    Health Maintenance Organizations. A blended premium across these
    selections indicates an approximate out-of-pocket expense to
    beneficiaries ranging from $590/individual up to $1,456/family per
    month.\1\ Additionally, the department's projected share of 72 percent
    or higher for the FEHBP premium is not affordable in today's defense
    fiscal climate. Unless additional or offset funding is provided to
    support this project, care in military facilities will be ultimately
    reduced to resource this program. In addition, broad implementation of
    FEHBP jeopardizes the success of Medicare Subvention demonstration
    programs already in place and eliminates the purpose of the FEHBP
    demonstration project designed to properly evaluate the feasibility of
    the program and determine the Department's financial liability.
    ---------------------------------------------------------------------------
        \1\ Center for Naval Analyses. ``Options for Improving Access to
    Health Care for Retirees.'' CAB 98-60.09/29 May 1998, Sponsor Review
    Version.
    ---------------------------------------------------------------------------
        Navy Medicine, in conjunction with the Office of the Assistant
    Secretary of the Navy (Health Affairs), continues in its willingness to
    work with Congress to develop, implement and evaluate limited
    demonstration models designed to improve health care access to our
    Medicare eligible military retirees. These models not only include
    FEHBP, but other alternatives such as a TRICARE Supplement to Medicare,
    a redesigned pharmacy benefit, and Medicare Subvention (TRICARE
    Senior). All options must be carefully evaluated to ensure we provide
    the greatest benefit to the greatest number, while both maintaining our
    military readiness posture and providing quality health care to all our
    beneficiaries.
                                     ______

               Questions Submitted to Lt. Gen. Charles H. Roadman
                   Questions Submitted by Senator Ted Stevens
                            dod health care delivery
        Question. How do you and the other Surgeons General conduct long
    range, strategic-planning for the delivery of health care?
        Answer. In order to effectively support the Air Force Mission, the
    Air Force Medical Service (AFMS) participates actively in the Air Force
    Line strategic planning processes. This allows us to insert into these
    efforts the necessary provisions for consideration of and logistical
    support for human performance factors in all aspects, from recruiting
    standards to training and performance expectations, to prevention and
    rehabilitation efforts, to post-career health care.
        In addition to working closely with the Air Force Line, much work
    is done in collaboration with the other Services to provide a coherent,
    efficient Military Health System (MHS). The MHS Executive Committee
    (MHSEC) regularly meets for the purpose of long-range planning and
    oversight of initiatives. We have developed long-range goals which
    include leadership development, reengineering of joint readiness
    capability, implementation of a benchmark health care system, taking an
    aggressive strategic approach to leading and managing the MHS in a
    changing environment, and exploiting and integrating technology and
    information systems. Two subcommittees assist in these processes:
        The MHS Strategic Planning Subcommittee identifies to the MHSEC
    specific recommended breakthroughs to achieve the MHS Vision and Goals.
    At the direction of the MHSEC, the Subcommittee recommends teams and
    plans to achieve the breakthroughs and maintains oversight of the
    activities in the process.
        MHS 2025 is charged with envisioning plausible futures of the MHS
    and developing a view of the preferred future towards which we may put
    our efforts. The charge to the subcommittee for this year is to design
    the Military Health System of the future--that is, to reengineer the
    MHS to meet the challenges of 2025.
        Currently a comprehensive MHS reengineering effort is underway.
    This effort is led by the MHS Reengineering Coordination Team, which is
    chartered by MHS senior leadership to conduct research, coordinate
    working groups, integrate initiatives, and recommend strategies and
    operational plans to achieve the MHS vision.
        Within the AFMS we have developed a corporate structure and
    strategy geared to inextricably link planning, programming, and
    budgeting and contribute to mission accomplishment in a resource-
    constrained environment. We have adapted the Air Force Strategic
    Planning process to develop an approach linking long-range planning to
    resource allocation. The approach begins with the AFMS Strategy and
    cascades through Operational Tasks to current year operations.
        This year we have published the first AFMS Medical Annual Planning
    and Programming Guidance (MAPPG). This guidance will drive the fiscal
    year 2000-2001 Mission Support Plan (MSP). Next year's MAPPG will drive
    preparation of the 02-07 POM. The MAPPG includes incorporation of the
    Enrollment Based Reengineering Model, which applies specific provider
    and support staff ratios to balance AFMS resources.
        To meet the challenges of changes in the management and delivery of
    health care, the AFMS developed a Strategic Resourcing Portfolio (SRP).
    This process involves linking all resourcing processes to achieve
    improved resource allocation. The SRP gives us tools to challenge the
    traditional approach to health care; so manpower is driven by
    population, not workload. Capitated budgets create improved incentives.
    Thus the resourcing process directly supports the Mission Support Plan
    (MSP).
        ``AFMS Operational Health Support Into the Next Millennium'' is a
    study which we commissioned from Karta Technologies, Inc., to paint a
    picture of what the 21st Century Warrior will require of his/her
    military health system. It provides a look over the horizon to
    operations in 2025 and what capabilities will be demanded of the MHS by
    the warfighters.
        Question. Where are you making strategic investments to re-engineer
    DOD health care delivery?
        Answer. All of the programs outlined above represent considerable
    strategic investment. The MHS Reengineering Coordination Team has
    developed TriService models defining requirements for enrollment,
    readiness, and resourcing. Current initiatives of the Team include
    pharmacy improvements; recapture of workload from managed care support
    contractors through MHS facility optimization; MHS information
    technology consolidation; outsourcing of medical technical training,
    improvements in acquisition and administration of managed care support
    contracts; reengineering and improvement of prevention programs; and
    restructuring medical centers. The Technology Insertion Board of
    Directors develops strategies to continue Information Management/
    Information Technology (IM/IT) investments that will increase
    efficiency and maximize population health for MHS beneficiaries.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                                family advocacy
        Question. There has been concern and increased attention to
    violence in military families. In fiscal year 1997 alone, $100.7
    million was earmarked for Family Advocacy programs in DOD. While child
    neglect and abuse has remained stable at half the civilian rate, spouse
    abuse has increased. What is the military medical community's
    involvement with line units to address this issue and improve family
    advocacy programs?
        Answer. While the spouse abuse rate has increased slightly across
    the Department of Defense, Air Force data demonstrate a consistent
    decline in these rates over the past five years. Clearly, we take
    family violence seriously in Air Force communities; and we have devoted
    significant resources to its prevention as well as intervention when
    violence occurs.
        Toward this end, the Air Force Family Advocacy Program is uniquely
    organized and structured to ensure the regular and ongoing contact and
    involvement between line commanders and the medical community.
    Specifically I, as the Surgeon General, have overall responsibility for
    our Family Advocacy Program (FAP). At the Air Staff level, the FAP is a
    division of our Air Force Medical Operations Agency, reporting to a
    two-star medical commander.
        At the installation level, the Family Advocacy Office belongs to
    the local medical commander. This alignment ensures the medical
    community's total involvement in family advocacy across the entire
    continuum of domestic violence issues and provides us significant
    leverage. First, as a matter of routine, medical group commanders are
    actively involved with line commanders in FAP installation policy and
    oversight committees; and, second, our medical group staff are the
    primary providers of consultation and support to line commanders at
    each stage of a family violence case.
        Let me provide four specific examples of the Air Force medical
    community's involvement and support to installation line commanders in
    our efforts to prevent and intervene in family violence:
        Policy Development.--Line commanders, including the Support Group
    Commander, are part of installation policymaking committees designed to
    address family issues, including family violence prevention and
    treatment. Examples are the Community Action Information Board, the
    Care on Target Team, and the Family Advocacy Committee. This Air Force
    infrastructure, established to address family issues, provides a
    multidisciplinary forum to continually evaluate and improve the
    military community's response to family violence.
        Prevention Efforts, Community Collaboration and Education.--Medical
    Group commanders insure that line commanders are periodically briefed
    on all prevention programs available to their troops. Implementation of
    the Air Force Integrated Delivery System insures seamless service
    delivery of family programs at each installation.
        Treatment Programs.--Line Commanders and First Sergeants are
    encouraged to attend monthly Family Maltreatment Case Management Team
    meetings where they are offered multidisciplinary input about the
    assessment/status of their troop and they participate in formulating
    the course of treatment recommended by the family violence
    professionals.
        The Medical Group multidisciplinary staff offers consultation and
    advisory support to line commanders at each stage of the reported
    maltreatment incident:
      --Initially, when risk of further harm is assessed, line commanders
            are given clinical recommendations about whether family members
            should be separated and for how long.
      --At disposition, line commanders are involved in the process of
            making case status determinations and formulating an initial
            course of treatment.
      --As treatment progresses, line commanders receive monthly to
            quarterly updates on the level of participation of their troops
            in the treatment process and the level of risk of continued
            violence in the home.
      --At case closure, line commanders receive information in writing
            about the progress of their troop and his/her family members in
            treatment and the status of the family at the close of the FAP
            record.
        As a final example of our comprehensive coordination across
    functional areas on Air Force installations, I would like to highlight
    the High Risk For Violence Team (HRVRT) implemented in 1996. This team
    is a classic example of the multidisciplinary approach to informing and
    advising line commanders of the level of risk to victims. The
    installation HRVRT develops a coordinated community approach to
    protecting potential victims and reducing the risk of further violent
    behavior from perpetrators, utilizing all appropriate base resources
    and expertise in support of this effort. Family Advocacy staff and the
    staff of the Judge Advocate are always available to line commanders to
    advise them on their jurisdiction issues and the course of action
    considered to be in the best interest of the victim and the family
    system.
        Since 1995 we have seen a significant reduction in the most severe
    cases of spouse abuse, especially spouse deaths. This is due to our
    strong collaborative response to family violence, which includes line
    commanders, Judge Advocates, law enforcement, and personnel staff--all
    closely integrated with our medical community to prevent family
    violence and protect victims of family violence when it occurs.
                    federal employee health benefits program
        Question. Congress mandated a demonstration project to offer the
    Federal Employee Health Benefits Program (FEHBP) to retirees as an
    alternative to receiving care through the military health system. While
    there are strong segments of support for this alternative, there is
    also concern that this proposal would be very expensive both to the
    government and the individual. There is also concern that this
    particular plan would have a negative impact on the military medical
    system. What is your assessment of the impact of this proposal on
    military medicine?
        Answer. The Air Force fully supports the FEHBP demonstration. It is
    difficult to predict the program's cost to either the beneficiary or
    the government due to several variables. Without knowing which plans
    would be available in each area, what the coverage options would look
    like and what the costs would be in various locations, it has been
    difficult to gain consensus on estimates. We are concerned that this
    program may draw workload from the Military Health System, which would
    negatively impact readiness. This would take two forms: through
    diminution of necessary skills and an eventual loss of resources due to
    reduced workload. We feel a number of varying approaches may be needed
    to meet the needs of the over-65 population while assuring maintenance
    of our readiness capabilities. This demonstration is vital to assessing
    the contribution and demands of FEHBP in different situations, and
    determining what options work best, and in what combinations, to meet
    our competing requirements.
                                  Nurse Corps

    STATEMENT OF BRIG. GEN. BETTYE H. SIMMONS, CHIEF, ARMY
                NURSE CORPS, U.S. ARMY

                 prepared statement of senator daniel k. inouye

        Senator Inouye. Because we are running late, I would like
    to put my opening statement in the record.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Good morning. I join my Chairman in welcoming Brigadier
    General Simmons, Brigadier General Stierle, and Rear Admiral
    Martin to discuss Military Nursing Programs. It has been my
    pleasure to work with military nurses for many years and to
    reflect on their many accomplishments.
        I understand that both General Simmons and General Stierle
    are appearing before this Committee for the last time as
    Director of the Army and Air Force Nurse Corps respectively. I
    would like to take this opportunity to thank you both for your
    outstanding service during your tenure.
        I would also like to welcome Rear Admiral Martin to this
    Committee. I hope that you will find this hearing a worthwhile
    experience and that it will be the first of many positive
    discussions.
        Military nursing as a profession continues to provide
    outstanding care to our active duty troops, family members, and
    our retiree population. Military nursing, however, is faced
    with challenges similar to those faced by the civilian nursing
    sector. Organizational restructuring and concerns about
    increasing cost efficiencies have stimulated military nurses to
    look at expanded roles for nurses and new ways of providing
    care to ensure medical readiness and quality of care. The
    future of military nursing will require continued leadership
    and innovation.
        Another milestone for nurses is the success of our senior
    Nurse Corps officers being assigned to more executive level,
    command positions. There are now a total of 38 nurses serving
    as commanders of military hospitals and clinics. I am
    particularly pleased to note that your former colleague, Army
    Major General Nancy Adams, has been assigned as the Commander
    at Tripler Army Medical Center in Hawaii. Under her leadership,
    Tripler has had remarkable success with a perfect score of 100
    on the recent Joint Commission survey. Like General Adams,
    nurses in these kinds of command positions continue to be at
    the forefront of developing innovative ways to reduce health
    care costs while providing high quality care.
        The success of military nurses in critical leadership
    positions begins when they enter active duty. Last year, the
    Office of Management and Budget suggested an initiative to
    reduce the educational requirement for nurses in the military,
    an initiative the Chairman and I strongly opposed. The success
    of these nurses reinforces the need for an appropriate
    educational foundation and supports the requirement that all
    military nurses have, at a minimum, a Bachelor of Science in
    Nursing degree.
        Certified Registered Nurse Anesthetists (CRNAs) in the
    Armed Forces continue to provide high quality care as
    independent practitioners, often without anesthesiologist
    supervision. They are often the sole provider of anesthesia
    services at our small military facilities, in field hospitals,
    and aboard ships.
        By contrast, their civilian counterpart CRNAs face
    professional limitations as they continue to struggle with
    anesthesiologists over the Health Care Financing
    Administration's (HCFA) proposed rule to remove the Medicare
    requirement for supervision of nurse anesthetists by
    anesthesiologists. I understand that the Surgeons General and
    the Chief Nurses are examining this issue within their services
    to maximize the contributions of all health care providers.
        I am proud to say that military nurses are excelling in
    both the patient care and command arenas. Nurses continue to
    lead the way in creating expanded opportunities for the
    delivery of safe, high quality patient care throughout the
    world--on land, at sea, and in the air.
        I appreciate your attendance this morning and look forward
    to hearing about readiness, quality of care issues, and
    research initiatives in the Nurse Corps.

                         state of the Army Nurse Corps

        General Simmons. Mr. Chairman, it is my privilege to appear
    before you and report on the state of the Army Nurse Corps. I
    would like to thank you for your overwhelming support of
    military nursing. It has enabled our corps to make a difference
    in the life of American soldiers, and our beneficiaries. We are
    indeed very proud, and I will highlight a few imperatives in
    terms of how we are making a difference. Army nurses are ready.

                        support of Humanitarian missions

        Right now, we have over 120 active and reserve component
    nurses deployed in supporting humanitarian assistance missions.
    For example, we have a nurse in El Salvador converting dirty
    classrooms to clinics to provide health care. Within hours of
    Hurricane Mitch hitting Honduras, nurses were filling sandbags
    to keep an air base from being engulfed with flood waters.
        Last summer, during the bombing at the embassy in Kenya, an
    Army nurse officer on leave there reported to the embassy and
    got actively engaged in providing care. When she returned, she
    identified that she could not come home, that that is what the
    Army had trained her to do, and it was the right thing to do.
        We are helping to shape the international geopolitical
    environment. Last summer, at the request of the Egyptian
    Government an Army Nurse Corps officer led a team to Egypt to
    assess the requirements for upgrading the Egyptian health care
    system. We are involved in many, many initiatives to get the
    right person to the right job.

                      expanding role of Nurse practitioner

        Part of that is expanding the role of the nurse
    practitioner to increase resource efficiency in our health care
    system. Army nurse and launch tool has implemented a program
    called risk reduction for readiness, in which we are
    identifying high risk behaviors in soldiers, such as sexually
    transmitted disease, drug and alcohol offenses, so we are
    targeting those conditions, working with commanders to target
    specific problems rather than dealing with illness.
        At Fort Huachuca, Arizona, we have instituted field sick
    call where the family nurse practitioner goes out to the unit
    rather than the soldier having to come into the hospital,
    reducing lost duty time. We are particularly proud of the
    innovations through nursing research. We are using it to
    respond to the challenges of taking care of patients in the
    military environment.

                          Triscience nursing research

        Thanks to your support, the Triservice Nursing Research
    Program has been the primary funding link that we would
    probably not receive from any other source, and one study on
    nursing research is developing a portable device to accurately
    record soldiers' vital signs during a medevac helicopter
    flight.
        We have a Nurse Corps officer who is leading an
    investigation team on a nutritional supplement for
    traumatically injured soldiers to preserve lean body mass and
    to be field expedient.
        We are using Triservice nursing research dollars to fund
    issues related to problems with breast feeding for soldiers on
    active duty. The investigator uncovered barriers to breast
    feeding that included lack of support from the system, and on
    and on and on.
        Certainly the research reveals that human breast milk
    improves babies' health, provides a jump start in their growth
    and development, and decreases the risk of acute and chronic
    disease. As a result of that funding from Triservice research
    there was additional research that was done with Triservice
    dollars that resulted in the first DOD-recognized hospital for
    a baby-friendly hospital initiative. That is at Fort Irwin,
    California. The National Training Center, and this program is
    sponsored by the World Health Organization United Nations
    Children's fund, and this DOD hospital, Fort Irwin, was the
    first facility in DOD to be recognized for its efforts at
    breast-feeding and again a direct result of Triservice nursing
    research dollars.
        Again, advanced nursing practice has led the way in many
    initiatives for research efficiency. We have an advanced
    practice nurse clinic at Brook Army Medical Center that has
    increased access to care and costs less in terms of the
    delivery of health care than a traditional medical clinic.
        Lots of good results from the technology multiplier
    initiatives, product Akamai, the use of telemedicine. That
    group has focused on using telemedicine as a resource in time-
    efficient method of providing care. Again, Triservice nursing
    research dollars have been critical in that.

                    Nursing as a profession--(opportunities)

        We are proud of who we are and what we have done, sir.
    Based on your support and your belief in nursing as a
    profession, we have many, many opportunities for nurses. We
    have the first Army nurse to be selected on a command selection
    list to command an Army medical treatment facility, Colonel
    William Bester. He was leader developed in our core competency
    of nursing, documenting that our core competency of providing
    leading delivery of nursing care gives us the skills that we
    need to lead the organization.

                     future challenges for Army Nurse Corps

        I would like to highlight a couple of challenges that we
    need your continuing support for. As you know, part of the
    cost-cutting methods are, one of the initiatives is a look at
    whether or not nurses in the military need to come in at the
    baccalaureate level. As we move to a wellness model, the
    baccalaureate-prepared nurse is the most flexible nurse. We
    need your support to ensure that the bachelor of science and
    nursing (BSN) remains a criteria. We must have your continuing
    support to ensure that nurse remains at the table in terms of
    innovation in the health care delivery system.

                      summary of state of Army Nurse Corps

        Your support of Triservice nursing research has provided
    funding for nursing studies with significant impact on soldiers
    in readiness. We are evolving. We have identified needs. We are
    improving every year as we go to identify innovations in
    nursing practice that improve the delivery of health care to
    soldiers on the battlefield and their families in our medical
    treatment facilities.

                               prepared statement

        I am proud to say that Army nurses are a critical link in
    the changing face of the military health care system. From the
    fox hole to the front line of the hospital, nurses are making a
    difference in the lives of soldiers and their beneficiaries.
    Nursing is, indeed, the linchpin in the health care delivery
    system. Keeping nursing at the decisionmaking table is critical
    to continuing the evolution of our Nation's health care
    delivery system. Sir, we thank you for believing in the value-
    added of nursing to our health care system.
        Senator Inouye. Thank you, General.
        [The statement follows:]
                Prepared Statement of Brig. Gen. Bettye Simmons
        Mr. Chairman, distinguished members of the committee, ladies and
    gentlemen. I am Brigadier General Bettye Simmons, Chief of the Army
    Nurse Corps. It is my privilege to appear before this committee and
    report on the state of the Army Nurse Corps. This is the third time I
    have had the opportunity to testify before this committee and my last
    as Chief. First, I'd like to thank the members of this committee for
    your wholehearted support of military nursing. Your support has enabled
    the Army Nurse Corps to make a difference in the lives of America's
    soldiers and our beneficiaries. Our vision is Army nurses who are
    Ready, Caring, and Proud. This morning, I'll use these imperatives to
    focus on how Army nurses are making a difference. I'll also discuss
    challenges that lay ahead for the Army Nurse Corps as the Nation and
    the Army transition into the new millennium.
        Army nurses are Ready. Last year, over 120 active and reserve
    component Army nurses deployed in support of humanitarian assistance
    missions. Our task now is to continue to deploy nurses who make sound
    decisions in complex situations and rapidly transition between peace
    and wartime operations. To that end, our readiness strategy is three-
    fold: leader development, nursing role development, and innovation
    through nursing research.
                               leader development
        Our leadership process has already produced nurses who are experts
    at matching requirements to resources. For example, in El Salvador,
    nurses converted dirty classrooms into clinics to provide care and
    comfort to homeless families. Within hours of Hurricane Mitch hitting
    Honduras, nurses were filling sandbags to keep Soto Cano Airbase from
    being engulfed by floodwaters. Leader development in our core
    competency of nursing prepared one nurse to work as U.S. Embassy staff
    in Nicaragua where she assisted in-country military groups. Nurse
    leader development prepared another nurse to serve as the Deputy
    Surgeon for Central American medical military operations. Army nurses
    do very well in their deployment role because in their peacetime
    mission they have become expert at managing the human dimension of
    change. Our leadership process highlights preparing nurse critical
    thinkers who can respond to any contingency and--the process is
    working. Last summer, an Army nurse was vacationing in Kenya when she
    learned of the American embassy bombing. She quickly made arrangements
    to travel to the Embassy. Once there, she retrieved supplies from the
    bombed clinic in the embassy basement, organized the supplies into a
    clinic at another location then assisted in managing the clinic for
    both American and Kenyan employees of the Embassy. After returning
    home, the nurse wrote; ``There was no way I could just get on the plane
    and fly away. This is what the Army has trained me to do and it was the
    right thing to do.''
        Nurse leaders are helping the Army to shape the international
    geopolitical environment by building face-to-face relationships via
    foreign medical assistance initiatives. Last summer, at the request of
    the Egyptian government, a medical foreign assistance team led by the
    Assistant Chief of the Army Nurse Corps went to Egypt to assess
    requirements for upgrading the Egyptian military health care system. As
    a result of that visit, several Egyptian nurses completed Army Nurse
    Corps training courses and several more nurses are slated for future
    training.
                                role development
        We are working hard to use the right person for the right job.
    Consequently, we have expanded the role of the Family Nurse
    Practitioner, (FNP) in the field hospital to provide care to a wide
    array of patients with an economy of personnel. To further broaden the
    FNP's scope of care, an Army nurse instructor at the Uniformed Services
    University of the Health Sciences is developing new curriculum aimed at
    better preparing graduates for their role in operational deployments.
    This curriculum includes topics that will prepare graduates to function
    as trauma care providers as well as family nurse practitioners in an
    operational environment. The program will culminate with a medical
    field readiness exercise known as ``Operation Bushmaster''. This
    exercise will provide tough, realistic training scenarios for the FNP's
    that will maximize their effectiveness as operational health care
    providers.
        Army nurses are expanding their roles as advance practice nurses to
    develop innovations that improve our ability to deploy a healthy force.
    For example, an Army FNP at Landstuhl, GE is implementing a program
    called ``Risk Reduction for Readiness''. This program targets high risk
    soldier behaviors that are detrimental to readiness. Fourteen high-risk
    behaviors such as sexually transmitted diseases, drug or alcohol
    offenses, spouse or child abuse and suicide attempts are tracked using
    data from local human service agencies. Each commander gets a quarterly
    printout for their unit that identifies high-risk behaviors in their
    soldiers. This program enables health care providers, working together
    with unit commanders to target specific problems rather than using a
    shotgun approach to health promotion and readiness.
        Another nurse initiative that is improving readiness is the Medical
    Readiness Database for the 42,000 soldiers at Ft Hood, Texas. By
    querying the database, commanders can analyze their unit's medical
    readiness then partner with health care providers to correct
    deficiencies. Nurses are currently expanding the database to include
    the USAR and ARNG units that are assigned with active duty units at Ft.
    Hood.
        A nurse at Ft. Huachuaca, Arizona, is decreasing the time soldiers
    spend at sick call with the Field Sick Call. Twice a month, the FNP
    goes out to local field units to conduct sick call and interface with
    line commanders about health care issues in their units. Field Sick
    Call has reduced the number of soldiers waiting at hospital sick call
    thereby increasing soldiers' availability to their units.
                      innovations through nursing research
        Finally, we are using nursing research to respond to the challenges
    of caring for patients in austere environments. Thanks to your support,
    the Triservice Nursing Research Program provides funding for military
    nursing studies that might not receive funding from other sources.
    These studies will provide leap-ahead capabilities for military nurses
    on future deployments.
        In one study, a nurse researcher is developing a portable device
    that can monitor patients' heart rate, respiration and blood pressure
    in high noise and vibration environments. A non-invasive device that
    accurately measures and records a soldier's vital signs in the field or
    combat environment, as well as in a MEDEVAC helicopter, could greatly
    improve care in the field and improve health outcomes for these
    soldiers. Advance testing is showing the device is performing even
    better than expected.
        Another study funded through your support of the Triservice Nursing
    Research Program is investigating a nutritional supplement for
    traumatically injured soldiers. The supplement promises to preserve
    lean body mass and protect vital respiratory strength and endurance
    after a soldier is injured. It is field-expedient, compact, doesn't
    require refrigeration and is less susceptible to contamination.
        Both studies illustrate how nurses are using research funding to
    develop innovative applications of high technology care to care of the
    soldier.
        Army nurses Care. Nurses are making a difference with women's
    health issues. A study funded by the Triservice Nursing Research
    Program investigated why military women stopped breastfeeding before
    they had planned. By interviewing both officer and enlisted soldiers,
    the investigator uncovered barriers to breastfeeding that included lack
    of supervisor support, co-worker's squeamishness towards pumping breast
    milk in the workplace and lack of structured time to breastfeed.
    Conflicting loyalties caused many women to terminate breastfeeding. For
    example, a non-commissioned officer struggling to meet weight standards
    post-delivery had to decide at the end of her twelve-hour days--does
    she go home to breastfeed her baby or to the gym to work out? An Army
    specialist spoke of the irony of a supervisor who supported soldiers'
    smoke breaks but denied her a break to pump her breastmilk. Recent
    research has proven that human breastmilk improves babies health,
    provides a jumpstart in their growth and development and decreases
    their risk of acute and chronic diseases. For Moms, breastfeeding
    decreases postpartum bleeding, helps women return faster to their pre-
    pregnancy weight and decreases the risk of ovarian and breast cancer.
        An Army nurse at Ft. Irwin, California, linked the questions raised
    in the Triservice study with the science detailed in breastfeeding
    studies to implement an innovative program called the Baby Friendly
    Hospital initiative. This program is sponsored by the World Health
    Organization and the United Nations Children's' Fund. It encourages and
    recognizes hospitals and birthing centers that offer an optimal level
    of care for breastfeeding moms and babies. Recently, the hospital at
    Ft. Irwin, California was the first DOD medical facility to receive
    recognition for its efforts at promoting breastfeeding. The nurses at
    Ft. Irwin provide education on the benefits of breastfeeding to
    battalion and company commanders and give breast pumps to women who are
    deploying to the field. Nursing initiatives that are founded on
    research, such as this one, are decreasing costs by improving outcomes.
        Another nursing study funded by the Triservice Nursing Research
    Program is aimed at helping battered women who develop post-traumatic
    stress disorder. Many abused women develop post-traumatic stress
    disorder. The investigator on this study will use cognitive Trauma
    Therapy to reduce PTSD, depression and guilt in battered women. At this
    time, the investigator is doing the training with actual victims of
    battering and is already seeing significant decreases in PTSD and guilt
    feelings and increases in self-esteem. Findings from this study will
    have significant implications for military readiness and costs related
    to treatment for battered women.
        Nurses are increasing access to care. The Advanced Practice Nurse
    (APN) Clinic at Ft. Sam Houston, Texas provides care to a population of
    7,200 active duty and civilian patients, averaging 115 patient visits
    per day. This clinic has increased access to care and costs the
    organization fifty dollars LESS per patient than that same patient's
    visit to the Internal Medicine Clinic. Also, the patient gets more bang
    for their proverbial buck. The APN's at this clinic focus on wellness
    and prevention and devote approximately ten minutes of each clinic
    visit to wellness education.
        Nurses in non-traditional roles are leveraging technology to
    improve care and increase access. For example, an Army nurse corps
    officer directed the life cycle management of the Composite Health Care
    System II, or CHCS. This system is a compendium of clinical
    applications that provides the Department of Defense with an
    enterprise-wide clinical information system. CHCS integrates patient
    data from multiple sources and displays this data in a user-friendly
    format at the point of care. This system, currently in alpha-testing in
    Hawaii, will eventually allow health care providers to reach out to
    patients geographically dispersed in the Pacific and improve quality of
    care. The value added of placing nurses in information technology
    initiatives is that the nurse, as the patient advocate, knows
    technology must serve not only the organization but also, the patient.
    Nurses recognize the importance of preserving small details such as
    maximizing patient/provider eye contact when a hospital becomes
    automated.
        Nurses are evaluating technology as a healthcare provider
    multiplier. For example, an Army nurse is conducting a study, funded by
    Project Akamai, to evaluate the care patients receive via telemedicine.
    Initial focus groups with patients and providers involved in
    telemedicine indicate that it is a time and cost-effective mechanism
    for receiving care. The current climate of decreased numbers of
    military healthcare providers coupled with an increasing operation
    tempo is opening a door for telenursing initiatives. Initiatives like
    the electronic housecall, that I shared with you in last year's
    testimony, can expand the ability of military nurse practitioners to
    provide care in areas where physician support is limited.
        A nurse methods analyst in the TRICARE division is developing the
    first-of-its-kind Tricare Survey Web Site on the AMEDD web page. The
    web site will allow hospital commanders to compare how well they are
    doing with other facilities with the overall goal of raising the level
    of quality care across the Army Medical Department.
        Army nurses are Proud. We are especially proud of the success we've
    had with our leadership initiatives. We realize the Army imperative of
    leadership development is crucial. As a result, our leader development
    philosophy focuses on leader training that develops the officer as a
    critical thinker and managing officer assignments to alternate
    operational and clinical jobs. This philosophy insures our nurse
    leaders can develop and make the best contributions to the Army Medical
    Department. On the seventh of August, 1998, the hospital commander at
    Ft. Jackson, South Carolina, relinquished command to an Army nurse.
    This nurse is a superb example of an officer that has been leader
    developed in our core competency of nursing. His experience will help
    other nurses realize their future goals.
        And now, I'd like to highlight two challenges facing the Army Nurse
    Corps. As cost-cutting methods are sought to reduce the price tag
    associated with military health care, our use of the Bachelor of
    Science-prepared nurse continues to be scrutinized. As we move to a
    wellness model of military health care, it is imperative we access
    nurses who have the flexibility to provide care in outpatient centers,
    homes and nurse-managed clinics where demand is expanding as healthcare
    moves beyond the hospital. Your support of the BSN criterion for entry
    into active duty Army nursing has insured we remain on the cutting edge
    of the wellness revolution.
        Finally, your support of the Triservice Nursing Research Program
    has provided funding for nursing studies with significant impact on
    soldiers and our readiness mission. We need your continued support to
    insure that nursing studies relevant to our unique military environment
    are guaranteed a funding pipeline that is absolutely unavailable
    elsewhere.
        I'm proud to say that Army nurses are changing the face of military
    healthcare. From the foxhole to the frontline of a hospital, we are
    making a difference in the lives of our soldiers and beneficiaries. As
    the Nation, the Army and the Army Medical Department continue to adapt
    to changes in the world around us, Army nurses will continue to be part
    of that change. I thank you for this opportunity to tell you about Army
    nursing.
    STATEMENT OF BRIG. GEN. LINDA J. STIERLE, DIRECTOR,
                MEDICAL READINESS AND NURSING SERVICES,
                OFFICE OF THE SURGEON GENERAL
        Senator Inouye. General Stierle.
        General Stierle. Senator Inouye, it is an honor to present
    my final report as the Director of Air Force Medical Readiness
    and Nursing Services. Your continuing endorsement has enabled
    us to make invaluable contributions as vital members of the Air
    Force Medical Service. I have submitted my medical testimony
    for the record, and will now highlight some of our successes.
        First, leadership opportunities for nurses continue to
    grow. There are currently 20 Air Force Nurse Corps officers
    assigned as group commanders of our medical treatment
    facilities. Squadron commander experience is crucial for
    competitive selection to group command, so I am pleased to
    report that 17 percent of almost 300 squadron commander billets
    are also filled by billets. Nurses also command 37 percent of
    medical units in the Air Force Reserve Command and 12 percent
    of the Air National Guard medical units and, for the first
    time, an Air Force Reserve nurse was selected to be the command
    surgeon of the Air Reserve Personnel Center. We anticipate
    continued progress in filling active and reserve senior
    leadership positions.
        Now, I will highlight some of our successful disease and
    population and health management initiatives. Grand Forks Air
    Force Base, North Dakota, Dover Air Force Base, Delaware, and
    Bolling Air Force Base, District of Columbia, implemented the
    role of the health care integrator to support primary care
    management teams. Health care integrators are the bridge
    between our dual missions of peacetime health care and
    operational health support. Hill Air Force Base, Utah, and
    Travis Air Force Base, California, successfully decreased the
    hospitalization rate and the acute care appointments required
    for asthma and hypertensive patients.
        Eielson Air Force Base, Alaska, streamlined the health
    assessment of active duty by incorporating their annual fitness
    test and reducing a 5-hour procedure into a 2-hour one-stop
    process. At Hickham Air Force Base, Hawaii, TRICARE enrollment
    is built into the command orientation program, and permits
    completion of health data collection and screening in one 4-
    hour block. Nursing, because of its system-wide perspective and
    its holistic approach to care is strategically positioned to
    ensure the successful integration of population health into
    practice.
        The term, total nursing force, describes the partnership
    that exists between the active and the reserve components,
    including officer and enlisted. The disaster relief provided to
    the victims of the embassy bombings in Africa by the active and
    reserve component medics from Prince Sultan Air Base in Saudi
    Arabia is an excellent illustration of this enterprise in
    action.
        The vision of the total nursing force strategic plan is to
    achieve a seamless, integrated force, and it is more reality
    today than ever before. The active and reserve component
    partnership has also been vital in the development of skills
    sustainment programs. One of the best examples of our team
    collaboration is a program called TOPSTAR, a medical training
    program that uses state of the art mannequins and computer-
    based instruction.
        This 2-week course enables attendees to complete 100
    percent of their skill sustainment requirements that previously
    took them up to 4 years. With the significant reduction of in-
    patient units, it will be increasingly more difficult to meet
    all clinical training requirements without initiatives like
    TOPSTAR. We also strongly endorse joint training programs.
    Nursing will be participating in a pilot military training
    program at Ben Taub General Hospital in Houston, Texas. This
    30-day course is designed for trauma teams composed of medical
    and nursing personnel who can rapidly respond to worldwide
    contingencies.
        Another example is the distance learning program designed
    by an Air Force faculty member of the Uniformed Services
    University of Health Sciences. This innovative training affords
    military nurse-anesthetists the opportunity to complete an
    advanced academic degree, even though they are geographically
    separated.
        Because the training platforms in our treatment facilities
    are decreasing due to the decline in the quantity and the
    acuity of patients, we must develop adjunct methods of
    training. Laughlin Air Force Base initiated a ride-along
    program for their emergency medical technicians with the Vel
    Verde paramedics in Del Rio, Texas. Air Force medics are now
    exposed to a larger volume and a greater variety of emergency
    patients that help them maintain their critical skills while
    forging a stronger partnership with our civilian community.
        Another example is the simulated medical unit at the 383
    Training Squadron at Sheppard Air Force Base, Texas, which
    allows students to experience the typical work flow on a busy
    in-patient unit. This training innovation was awarded the Air
    Force 1999 Commanders in Chief's installation excellence award
    for special recognition.
        We continue to use advanced technology to achieve
    breakthroughs in health care delivery systems. Virtual modeling
    and data bases have been developed that enable the right match
    of clinical capability to the care requirements of injured
    troops. Enhanced telecommunication in the aeromedical
    evacuation environment is moving at a fast pace as a result of
    Air Force nursing leadership.
        Accession and recruiting efforts continue to receive my
    close attention. Now, as never before, as we transition health
    care to an outpatient environment, we need experienced nurses
    who have the maximum flexibility to meet both our peacetime and
    our wartime patient care requirements. Commissioning of
    enlisted airmen who have completed a bachelor's of science
    degree in nursing continues to be a success story. We want to
    retain these stellar individuals as Nurse Corps officers,
    because they have demonstrated their career potential and
    commitment to the Air Force.
        Foremost, I want to thank this committee for the continued
    backing for the Triservice Nursing Research Program. The
    benefits of completed research are not always immediately
    evident, but we are grateful that you recognize this, and we
    look forward to your continued support in our ongoing research
    endeavors.
        Air Force nursing is generating timely research, addressing
    military readiness concerns as well as global health care
    issues. As an example, the results of a study on the effects of
    fluid hydration on personnel wearing the chem-bio ensemble
    concluded that water was just as effective as the more
    expensive sports drink in maintaining hydration. Last year, we
    saw a significant increase in the number of nurses formally
    presenting their research and also submitting it for
    publication, and it is my sincere belief that our research
    investment will improve nursing practice and patient outcomes
    in future years.
        In closing, it has been my great privilege these last 4
    years to present the state of the Air Force Nursing Service.
    Our dynamic cadre of total nursing force professionals is
    dedicated to our credo of global nursing, precision care for
    our airmen, their families, and our Nation.

                               prepared statement

        Senator Inouye, I want to thank you again for the
    opportunity to showcase the invaluable contributions of
    military nursing. We appreciate your support in behalf of the
    Department of Defense, the Air Force Medical Service, and the
    communities we serve.
        Thank you.
        [The statement follows:]
               Prepared Statement of Brig. Gen. Linda J. Stierle
        Mister Chairman and members of the committee, it is an honor to
    report on the achievements of the Air Force Nurse Corps (AFNC) since my
    testimony in April of 1998. Thanks to your continued endorsement the
    AFNC has made significant strides as we revise and sculpt our role in
    the ongoing evolution of the Air Force Medical Service (AFMS) vision of
    population-based health care management. As we prepare to enter the new
    millennium and transition from hospital-focused services to a health
    care system which emphasizes disease prevention and promotion of
    healthy life styles, the benefits of the Total Nursing Force Strategic
    Plan (TNFSP) and our collaborative vision of ``Global Nursing . . .
    Precision Care'', become realized.
        As reported in previous testimony the TNFSP links directly to the
    AFMS strategic initiatives and from a broader viewpoint, correlates
    with the strategic plan of the Military Health System (MHS). The TNFSP
    has six goals. The goals are (1) Cultivate, Identify and Advance Strong
    Leaders, (2) Spearhead Customer-Driven Nursing Practice, (3) Forge
    Ahead as a Full Partner in the AFMS Building Healthy Communities, (4)
    Champion an Integrated Ready Force, (5) Effectively Use AF Nursing
    Resources, and (6) Employ and Integrate Technology and Research. As we
    begin the third year of the TNFSP, this approach will continue to be
    the foundation for Air Force Nursing into the next century.
    Goal #1: Cultivate, Identify and Advance Strong Leaders:
        Goal statement.--Optimize nursing leadership to meet mission
    challenges of the 21st century.
                Command Opportunities
        Leadership opportunities for AFNC officers in the AFMS continue to
    increase. It is my opinion that an AFNC officer in a medical group or
    squadron commander position brings an inclusive perspective of the
    overall health of a specific population to the organization. Nurses,
    because of their diverse blend of clinical expertise, leadership
    experience, educational and customer focus, are among the best equipped
    disciplines to lead the way in proactive delivery of preventative
    services. In addition, I believe advanced academic degrees only serve
    to strengthen their qualifications for command roles.
        The AFNC competitiveness and selection for command has steadily
    increased over the last 12 years. There are currently 20 AFNC officers
    in group command, or CEO, positions. This translates to 25 percent of
    the 80 AFMS medical treatment facilities (MTF's) are currently
    commanded by AFNC officers.
        Gaining squadron commander experience is crucial for future
    selection to medical group commander positions. Of the 296 medical
    squadron commander billets, 17 percent or 51 are currently filled by
    nurses. Since the squadron commander position was introduced in October
    1994, there has been an inconsistent fluctuation in the percentage of
    these billets that are filled by nurse corps officers. We will continue
    to closely monitor this command opportunity to ensure appropriate corps
    representation within the AFMS.
        In order to evaluate progress in our achievement of Goal #1, we
    also began tracking senior leadership positions for nurses in the Air
    Reserve Components (ARC). Thirty-seven percent of medical units in the
    Air Force Reserve Command are commanded by nurses, whereas Air National
    Guard (ANG) units commanded by nurses are 12 percent, averaging 23
    percent for the Air Reserve Components. I'm also pleased to report that
    for the first time an Air Force Reserve nurse was selected to be the
    Command Surgeon of the Air Force Reserve Personnel Center.
                Nurses In Senior/General Officer Billets
        In September 1994, the 2-star general officer promotion board
    opened to all corps and in September 1995, the 1-star board became a
    corps neutral opportunity. Moreover, the Fiscal Year 1996 DOD
    Authorization Act expanded the 3-star Surgeon General position beyond
    the Medical Corps (MC) to include all Air Force Medical Service
    officers. These are important steps in assuring a level playing field
    for leadership opportunities for all corps throughout the AFMS.
        Officers compete for 1-star flag officer promotion at 2-years time
    in grade of colonel and must assume 1-star rank before their mandatory
    retirement date (normally 30 years commissioned service). Before
    competing for 1-star flag officer positions, AFMS officers normally
    progress through a series of medical group commands and other senior
    leadership positions. Eligibility for Medical Group command begins
    after the officer has been selected for colonel and ends at 26 years of
    commissioned service.
        The usual phase point for Medical Corps (MC) and Dental Corps (DC)
    officers to reach colonel is between 13 to 18 years of commissioned
    service. The MC/DC officers have up to 13 years as a colonel to
    progress through medical group commands, and a total of 17 years to
    reach other higher level career milestones in preparation for general
    officer promotion. In comparison, the normal phase point to colonel for
    the DOPMA constrained corps, the AFNC, Biomedical Science Corps (BSC),
    and Medical Service Corps (MSC), is 21 to 22 years. These officers only
    have a 4 to 5 year window to progress through multiple medical group
    commands, and a total of 8 years to achieve higher positions that make
    them competitive for general officer promotion. This puts nurses, as
    well as other DOPMA constrained corps, at a distinct disadvantage for
    general officer promotion.
        In order to be competitive with the non-DOPMA constrained corps
    (MC/DC) and have enough time to progress through a career track toward
    general officer promotion, DOPMA constrained candidates (NC, BSC, MSC)
    need at least one, if not more, below-the-primary-zone (BPZ)
    promotions. The AFMS recognized that the BPZ opportunity for DOPMA
    constrained corps was significantly less than for Line of the Air Force
    (LAF) officers and non-DOPMA constrained corps (physicians/dentists).
    Therefore we successfully campaigned to increase the BPZ opportunity to
    the rank of Lt Colonel and Colonel from 2.5 percent to 10 percent for
    the NC, BSC, and MSC officers.
    Goal #2: Spearhead Customer-Driven Nursing Practice:
        Goal statement.--Champion competent, collaborative practice among
    healthcare professionals to deliver truly customer-centered, affordable
    and accessible healthcare.
                Customer Satisfaction
        Nursing is intensely involved in the AFMS Customer Satisfaction
    Task Force, chartered to instill a customer-focused culture throughout
    the enterprise. Nurses and medical technicians assumed leading roles in
    the deployment of this strategy. Regional ``kick-off'' meetings were
    conducted to explain the essential elements of the strategy to all
    MTF's. They were asked to concentrate on four priorities--putting
    customers first, eliminating the ``crazymakers'' (distracters),
    empowering the staff, and reinforcing customer service basics. We have
    numerous success stories. For example, Scott Air Force Base, Illinois,
    eliminated restricted newborn nursery visiting hours. A ride-along
    program for EMT's was initiated between Laughlin Air Force Base and the
    Val Verde EMS Paramedics in Del Rio, Texas. This helped AF medics
    maintain critical EMT skills while at the same time promoting
    collaboration with the local civilian community--a win-win situation
    for all involved. Another win-win situation, F.E. Warren Air Force
    Base, Wyoming, listened to customers who pointed out that parents come
    in both sexes and either may need access to baby changing tables. So,
    they designated one restroom as a unisex, family bathroom that anybody
    may use to tend to their children's needs. These are just a few
    examples of how nurses are leading the way in the customer service
    revolution occurring in the AFMS.
    Goal #3: Forge Ahead as a Full Partner in the AFMS Building Healthy
            Communities:
        Goal statement.--Integrate nursing's unique healthcare expertise
    into building robust, prevention-based health and wellness, which will
    make healthy communities cultural and societal realities.
                Prevention-based Health and Wellness
        Managed care, in the context of population health management,
    presents rich new opportunities for nursing. Capitalizing on these
    opportunities will require a strategic vision, new training efforts,
    and the ability to face complex organizational challenges. These new
    opportunities are consistent with the professional practice framework
    within which nurses are prepared and practice, thus making them an
    ideal choice as health care leaders and partners in the new managed
    care millennium.
        The goal of an ethical managed care organization is to care in the
    most appropriate way for all the individuals in the system, based on
    identified needs of the population being served. The civilian sector
    reports a shortage of primary care physicians that is predicted to last
    for 40 to 45 years. It would be appropriate to conclude that nurses and
    other health care disciplines will step in to offset this shortage.
    Trends in health care predict that nursing will be utilized in several
    directions beyond the traditional inpatient bedside. Advanced practice
    nurses (APN's) will substitute for physicians for less complex patient
    conditions and make independent clinical judgements. Nurse case
    managers will coordinate care and delegate assignments to other support
    health care disciplines and as team leaders will organize, educate and
    provide patient care. Nurses will be responsible for increasingly
    complex and independent clinical roles. These changes will be in
    response to the shift toward primary care and care in the clinic, home
    and community.
        In the last two years, I have reported on the implementation of the
    Health Care Integrator (HCI) role. Each MTF has been provided the
    guidance to implement this position.
        Since its inception, over 60 percent of AFMS facilities have
    resourced an HCI as compared to 48 percent in 1998. Of the facilities
    that do not have HCI's assigned, 90 percent plan to do so in the next
    year. We anticipate the HCI will become a pivotal player in ensuring
    our enrolled population receives appropriate guidance and intervention
    to maintain and obtain healthy life styles.
        Roles for the AFMS nurses that resonate most closely with the goals
    and objectives set by the MHS, AFMS, and TNF are: disease management,
    critical pathway development and implementation, case management,
    informatics, call centers, plus telephonic nursing and nurse-managed
    clinics. I would like to highlight some of the successful disease
    management and population health initiatives implemented at our
    facilities.
        Ambulatory clinics across the AFMS have consistently developed
    nurse-managed clinics, primary care triage services, and Ambulatory
    Procedure Units (APU). Typically nurse-managed clinics focus on
    managing asthma, hypertension, and diabetes with HCI's providing case
    management, patient education, follow-up, and coordination of care
    between the primary care managers (PCM's), referral services and
    patients. Some facilities have expanded management activities to
    include routine women's health and obstetrical services. Nurses in
    primary care triage services use approved protocols to manage acute
    appointments, referrals, and provide home and self care advice.
        Grand Forks AFB in North Dakota transitioned their successful
    nurse-managed clinic staff to the family medicine PCM teams. These
    nurses became the HCI's for the PCM's. The HCI's are responsible for
    disease management of their population. Patients can walk in to see
    their nurse for advice, be referred to a specialty service or have a
    appointment made with their PCM.
        The HCI role has expanded to an increased educational role linking
    technicians, nurses, and providers as a team. The HCI and team will go
    out into the community, work centers, commissary, or wherever the need
    is. An HCI has recently been added to the Aerospace Medicine,
    Pediatrics and Women's Health clinic. Feedback and data collection has
    confirmed each PCM has a more definitive understanding of their
    populations health needs and deficiencies. The numerous outreach
    efforts by HCI's have turned a population of skeptical customers into
    believers. Continuous marketing campaigns and distribution of HCI
    business cards have served to create a sound foundation for a solid
    patient relationship. The staff strongly feel that efficient clinic
    operations and a cultural change to population based health care is
    dependent on the nurses' ability to see the big picture and manage the
    processes.
        At Dover AFB, Delaware, the HCI nurses have found one-on-one
    interviews with each Senior Prime enrollee to be very beneficial in
    assessing their health needs and enrolling them to a PCM. At Bolling
    AFB, District of Columbia, an HCI is assigned to each PCM team. The two
    HCI's are at the forefront in building action plans to reengineer
    managed care at this clinic. They are integrally involved in
    implementing strategies for population health to include utilization
    management, disease management, case management, and prevention based
    health care.
        At Hill AFB in Utah the HCI role has been in place for 20 months.
    In that short period of time the merging of population health
    management and managed care is a working reality. The HCI and the staff
    have developed programs that integrate services along the wellness-to-
    illness spectrum. I will outline a few examples of the programs they
    instituted.
        New arrivals to base receive information during base orientation on
    the family health care planning that is available for individuals with
    chronic illnesses. A case manager developed short and long term plans
    for proactive, tailored care for the Exceptional Family Member Program
    beneficiaries as as well as anyone being followed. A cancer patient
    used to require two days for chemotherapy in addition to two days
    travel time to the MTF. As a result of health care integration the
    treatment that previously took 12 hours to complete can now be
    accomplished in three hours. These solutions sound simple but are often
    complex when there is not one person who is monitoring all aspects of
    the patient's needs.
        At Travis AFB in California, the incorporation of healthcare
    integration into the MTF's culture has been successful in decreasing
    the hospitalization rate and acute care appointments for patients in
    the asthma program. Additionally, hypertension patients have improved
    blood pressure control since being enrolled in the program. Nurses have
    become key players in disease management because of their system-wide
    perspective and comparatively holistic approach to care.
        In summary, the TNF continues to support and facilitate the vision
    to move ``Building Healthy Communities'' forward. Disease management
    and population health care may be the medium through which nursing
    firmly establishes itself for the next century in health care.
    Goal #4: Champion an Integrated Ready Force:
        Goal statement.--Maximize medical readiness capability with the
    right mix of multi-skilled personnel, incorporating joint training and
    interoperable equipment.
        It is essential that we ensure our total force members are ready to
    deploy anywhere, anytime, with little notice. We provide our leaders
    and commanders with their most valuable weapon for a successful
    outcome: a healthy and fit fighting force. As our Surgeon General
    stated in his witness statement, ``in managing the health of our total
    force members, we in turn manage the health of entire units''. It is
    also essential that we provide our MHS members from all disciplines
    with not only the appropriate tools to do the job but with a high level
    of skill competency to do the job. Here are a few examples of
    initiatives we have implemented that provide this training.
                Joint Training
        The surgeons general (SG) from the Air Force, Army and Navy
    approved a one-year feasibility study to conduct a Military Trauma
    Fellowship program at Ben Taub General Hospital in Houston, Texas. The
    training is designed for first responder trauma teams of approximately
    20 physician and nursing personnel. The military services will
    permanently assign nursing personnel as observer controllers (OC) to
    validate uniformity of training, establish didactic program guidelines
    and maximize the training experience. The OC's will report no later
    than July 1, 1999 to complete training and be considered a fully
    qualified member of the Ben Taub emergency trauma staff. Air Force
    nursing personnel, scheduled to begin training in February 2000, are
    assigned to the Expeditionary Medical Support (EMEDS) unit training
    codes. The EMEDS is a small and mobile surgical and intensive care team
    of physicians, nurses and enlisted specialists designed to quickly
    respond to contingencies or disasters around the world.
        The EMEDS team will complete a 30-day program in Ben Taub focusing
    on pre-hospital care/transport, resuscitation, shock stabilization, and
    peri-operative nursing care of trauma patients. The nursing personnel
    participating in training will be Certified Registered Nurse
    Anesthetists (CRNA), operating room (OR) nurses/technicians; critical
    care nurses and technicians, respiratory technicians, emergency room
    (ER) nurses, and Emergency Medical Technicians (EMT's). The success of
    this pilot project could help point the way towards optimizing future
    training programs with ``clinically rich'' civilian sites and make
    joint training more of a reality.
                Joint Training Through Mirror Force
        Joint training activities to meet Mirror Force contingency needs is
    an AF Leadership initiative that the Active, Reserve and Guard are
    strongly committed to enhancing. By focusing on sharing similar
    training and mission opportunities, while optimizing utilization
    efficiencies, our ARC personnel are brought together into a seamless,
    medically ready force.
        Patriot Medstar, as reported in last year's testimony, is a joint
    DOD medical training exercise designed to promote interoperability and
    understanding of how our medical weapons systems interface. Our 1997
    exercise was a tremendous success. For the first time all Aeromedical
    Staging Squadron (ASTS) and Air Transportable Hospital (ATH) elements
    participated in total force training. Patriot Medstar 99 will be held
    in conjunction with TopStar this year as we launch our second TOPSTAR
    Travis (West) site, and project even greater opportunities for all
    health care disciplines.
        I'm proud to say that nurses were the first corps to deploy a
    clinical core competency training reference for our clinical nurses.
    This reference, which has been posted on our web page, provides a
    systemized process for obtaining and planning training on the skills
    and knowledge necessary to provide patient care in a wartime or
    contingency operation.
        A web page has been developed to incorporate medical readiness
    ``one stop shopping'' training opportunities for the Air Force Active
    and Reserve Components as well as other Services. This initiative has
    increased the Total Nursing Force's accessibility to current training
    information. Prior to this, ARC training personnel and commanders had
    to make countless calls to collect the necessary information to
    effectively plan the training.
        As reported last year, the Nursing Department at the USAF School of
    Aerospace Medicine, Brooks AFB, Texas, implemented the Critical Care
    Air Transport (CCAT) Course. Through their diligent commitment to this
    program they have been able to train 240 CCAT teams composed of Total
    Force physicians, nurses, and enlisted specialists who may be required
    to provide critical care support to AE patients.
        As the AFMS continues to tailor its force, the ability to maintain
    proficiency in all medical skills will become increasingly more
    difficult. It will be impossible to meet all training requirements in
    the remaining inpatient settings for our active duty medics, not to
    mention our reserve component. The TNF will continue to create
    efficient and effective methods to obtain and maintain critical skill
    proficiency.
        Although the most valuable training platform is real world
    deployments, we have several sustainment operations that provide
    exceptional learning experiences.
        Operation SOUTHERN WATCH.--The ongoing support to Southwest Asia
    (SWA) has been a TNF commitment from all Active Duty, AFRC, and ANG
    medical specialties. A 25-bed Air Transportable Hospital (ATH) remains
    deployed at Prince Sultan Air Base (PSAB), Kingdom of Saudi Arabia. It
    is staffed with 65 medical personnel on a 120-day rotational deployment
    schedule. AE assets are co-located serving as the hub for tactical and
    strategic patient movement. In addition, the ARC was tasked to provide
    complete coverage of the ATH. The ANG led the rotation schedule
    starting in March 1998, while the AFRC's rotation schedule started
    August 1998.
        Our enlisted Independent Duty Medical Technicians (IDMT) continue
    to provide medical surveillance. The team is positioned at PSAB,
    monitoring the health of personnel pre/post deployment and conducting
    environmental surveillance of sites within SWA. Support is also
    provided for an in-theater clinic, consisting of six holding beds,
    staffed with 25 personnel on 120-day rotations. It is located in Eskan
    Village, Riyadh. The ANG led this rotation schedule beginning in
    January 1999. There are also other numerous Squadron Medical Elements
    (SME) deployed with operational flying units. There is currently an
    aeromedical evacuation (AE) hub with an Aeromedical Evacuation Control
    Center (AECC) and AE crews covering Ali Al Saleem, Kuwait.
        Operation JOINT FORGE.--Though considerable downsizing has occurred
    in the past year, we still have personnel deployed to Hungary, Bosnia,
    Croatia, Italy and Germany. In Croatia, we provide base medical support
    with a 3-person clinic operation with five holding beds. AE support for
    the operation is conducted with liaison teams, Mobile Aeromedical
    Staging Facilities, Aeromedical Evacuation Control Centers, and
    Aeromedical Evacuation Support Cells in Germany, Bosnia, and Hungary.
    In addition to sustainment operations, such as Southern Watch and Joint
    Forge, we also have the opportunity to be primary instruments for
    global engagement through Humanitarian Civic Actions.
                Humanitarian Civic Actions (HCA)/Disaster Relief
        The AFMS provides medical relief for natural and man-made disasters
    throughout the world. The AFRC and the ANG were full participants in
    fiscal year 1998 U.S. SOUTHCOM's HCA programs. They accepted taskings
    for eight missions, providing medical and dental care in five
    countries. Their involvement in the fiscal year 1999 HCA program has
    increased to eleven missions in eight countries. Medical technicians
    from the ANG provided AE support in Honduras during the aftermath of
    Hurricane Mitch. Medics from Prince Sultan AB also flew to Nairobi,
    Kenya, in response to the bombing of the U.S. Embassy. These are prime
    examples of the TNF's involvement in HCA efforts. These programs
    enhance our national and military strategies, provide quality
    healthcare to needy populations and impart good healthcare practices to
    future generations.
    Goal #5: Effectively Use AF Nursing Resources
        Goal statement.--Capitalize on Air Force nursing personnel to
    optimize support for the AFMS mission requirements.
        We want to ensure the TNF maintains the proper skill mix, grade
    structure, and experience balance necessary for mission accomplishment.
    We begin this sustainment process through accessions and recruiting
    efforts, accompanied by the force tailoring of size, skill mix and
    grade requirements.
                Accessions/Recruitment
        As reported in last year's testimony, the entry-level educational
    requirement for commissioning AFNC officers was changed in 1997 to a
    Bachelors of Science in Nursing (BSN) degree. In CY 1998 our senior
    AFNC leadership made the corporate decision to limit recruiting of
    novice BSN nurses to Reserve Officer Training Cadets (ROTC) and
    enlisted members who had completed their BSN. The nurses we now recruit
    require not only a BSN but also a minimum of one-year of acute care
    experience. These nurses are considered fully qualified to function
    independently, thus ensuring the smaller force we have today has
    maximum flexibility to meet both our peacetime and wartime patient care
    requirements. We need experienced nurses primarily because of decreased
    training platforms within the AFMS. The movement of health care from an
    inpatient to an outpatient environment has reduced the training
    opportunities for nurses to acquire basic medical-surgical skills
    normally obtained in a nurses' beginning years of practice. These
    skills form the foundation of our wartime clinical practice
    competencies.
        BSN nurses have the requisite knowledge base, flexibility, and
    experience to teach our medical technicians, and to collaborate with
    interdisciplinary professionals and agencies. To date we have filled 50
    percent of our targeted recruitment goal for fiscal year 1999. Although
    our more stringent recruiting criteria can account in part for
    recruitment deficiencies, the civilian sector's decreasing pool of
    fully qualified nurses is also a factor. Nursing school enrollments
    have been down for the last three years. This coupled with a forecasted
    greater requirement for skilled nurses further compounds our ability to
    meet our recruiting goal. We are aggressively pursuing other avenues of
    nurse accessions to meet our requirements. In the past year we have
    increased the commissioning opportunities for enlisted members who have
    their BSN, in addition to continuing with ROTC scholarships. Our
    criteria will remain unchanged and we strongly believe that a BSN nurse
    provides the AFMS with an AFNC officer that can independently lead,
    manage, teach, and integrate health care across the spectrum of
    peacetime, war, and humanitarian operations.
                Force Tailoring:
        As reported last year, the AFMS Mission Support Plan (MSP)
    identified the need to reduce inpatient beds in facilities as the AFMS
    transitioned to a population-based health care management model. Our
    reengineering efforts are on track as we strive to attain the right
    ratios of nursing personnel and staffing mix for our beneficiaries in
    the outpatient environment by the accelerated completion date of fiscal
    year 2000.
        The AFNC is actively participating in Phase I and Phase II drawdown
    incentives currently in place. The Phase II portion of the drawdown is
    open to all Air Force Specialty Codes (AFSC's) such as emergency or
    critical care nurses, and these AFSC's can be closed to applicants any
    time. In addition to previous years incentives, we were able to ensure
    that any AFNC officer who opted for a special line transfer would be
    eligible to retain accrued constructive credit. It is unlikely,
    however, with the current incentives that we will meet our rightsizing
    requirements by fiscal year 2000. Other creative methods will have to
    be considered to reach our goal, such as Variable Separation Incentive
    (VSI) and Special Separation Benefit (SSB). These programs would apply
    to those individuals with between six and fifteen years of active
    military service.
                Graduate Education
        A nurse's practice is embodied in the following four domains:
    clinical, research, education and administration. Graduate education
    prepares the nurse for expanded roles in one or more of these domains.
        The 1998 Integrated Forecast Board (IFB) projected advanced
    academic educational requirements for the AFMS. The IFB approved a
    significant number of training years to support Community Health Nurses
    in Health Care Integrator roles at Medicare Subvention sites.
        We continue to stress the value of graduate and post-graduate
    education for our AFNC members. Advanced practice preparation is the
    hallmark of our profession and is essential to our evolution and
    journey towards our culture, which embodies population health while at
    the same time providing for our wartime requirements.
                Uniformed Services University of the Health Sciences
                        (USUHS)
        The mission of the Graduate School of Nursing (GSN) is to prepare
    advanced practice nurses (APN's) at the graduate level to meet the
    primary and critical care needs of active duty members of the Uniformed
    Services, their families, and all other eligible beneficiaries. USUHS
    prepares graduates who are equipped to contribute to the Uniformed
    Services' peacetime health care delivery systems and to provide
    military and public health support during combat operations, civil
    disasters, and humanitarian missions. Air Force Nurse Corps officers
    are assigned to the Certified Registered Nurse Anesthetist (CRNA) and
    Family Nurse Practitioner (FNP) program GSN faculty.
        The CRNA Program received a maximum 6-year accreditation in
    September 1997 from the Council of Accreditation. We continue to assign
    all CRNA students to the USUHS GSN, believing it to be one of the
    strongest programs in the country. To date, the USAF CRNA students
    graduating from the USUHS program have had a 100 percent success rate
    on their board certification examinations.
                Force Sculpting: Enlisted Specialists
        The utilization of medical technicians in non-traditional roles
    like managed care, readiness and health promotion as well as
    commissioning of enlisted Airmen who have a BSN continues to be of
    tremendous benefit to the AFMS. These force multiplier endeavors have
    served to provide the enterprise with critical resources in a
    rightsizing environment and increased the breadth of career
    opportunities afforded these stellar individuals.
    Goal #6: Employ and Integrate Technology and Research:
        Goal statement.--Exploit cutting edge technology and research to
    manage information and advance nursing practice.
                Modeling and Simulation Technology in Medical Readiness
        The nursing profession has, for years, recognized the contribution
    of advanced information systems in defining health care delivery
    requirements. The AFMS has led the charge in developing a suite of
    sophisticated models and databases that support the full analysis of
    the right match of clinical capability to the health care requirements
    of one or more ill or injured airmen/troops. This technology-driven
    capability allows for medical care validation, without placing one
    patient at risk.
        The Medical Readiness System Database, another advanced and robust
    AFMS product, is based on over 300 clinical profiles addressing patient
    needs from the most severely injured trauma patient to a simple upper
    respiratory infection. Not only does this database drive all modeling
    efforts, it also captures optimal care requirements in the deployed
    setting. Nurses participating in training exercises today, such as
    Patriot Medstar 99, now have a clear set of clinical requirements.
    Those requirements are then matched, through modeling, to actual
    casualty projections. Training is realistic, operationally driven and
    standardized. Exploiting simulation models for training is a new focus
    of the AFMS.
        A newly developed prototype, the Synthetic Theater of War Model, is
    the first simulated training tool developed to allow medics the
    opportunity to realistically rehearse expected medical requirements
    before actually deploying to war. Leadership, critical thinking under
    pressure, and clinical care determination are only three of the many
    useful skills developed through this type of training platform. For the
    first time, the medics can participate in the Line of the Air Force
    simulation model development with a clear vision of how medics should
    be inserted into their program development.
                Telemedicine Technology
        Work on the insertion of enhanced telecommunications into the AE
    environment is continuing at a very fast pace; two exciting programs
    are in the works. The first is commonly called the ``Care in the Air''
    project. The second is the Joint Medical Operations--Telemedicine
    Advanced Concept Technology Demonstration (JMO-T ACTD).
        The ``Care in the Air'' project started almost three years ago,
    with our Proof of Concept Demonstration in the European Theater. Many
    lessons were gleaned from this pivotal event. Perhaps the most
    important was electronic mail (e-mail) on/off AE platforms, this would
    provide the ability to send and receive e-mail in the air and at Mobil
    Staging facilities. The 311th Human Systems Wing at Brooks AFB, Texas,
    has been investigating the best solution to address this critical
    operational issue. That work will soon come to closure when a list of
    potential solutions, with well defined pros and cons, is provided to a
    decision making team of experts, including medics, for determination of
    the ``best fit'' technology solution.
        The JMO-T ACTD is a joint program focused on integrating service-
    specific telecommunication solutions, such as the ``Care in the Air''
    project, in the operational setting. Designed to match emerging
    technologies to a specific theater's critical operational issues, this
    ACTD was first developed by the medics. Its' vision is to provide joint
    war-fighting commanders the ability to deliver effective force
    protection in austere, non-linear operational theaters, a bridge
    between how we do business today and Joint Vision 2010. The JMO-T
    ACTD's overall objectives are (1) enhance the JTF commander's view of
    the common operational battlespace, (2) enhance awareness of medical
    threats to deployed forces, (3) speed and improve medical care and
    return-to-duty decisions closer to the front lines, (4) optimize
    medical evacuation, (5) minimize the medical footprint, and (6) enhance
    deliberate and collaborative medical planning capabilities. Questions
    regarding who collects clinical and operational data, how that data is
    packaged, sent, and to whom are just a few of the functional issues to
    be studied.
        An Air Force nurse is leading the AFMS portion of this important
    ground breaking demonstration. Work began over 12 months ago and will
    continue over the next four years. Aggressive planning is presently
    occurring in preparation for demonstrating joint operability during
    Kernel Blitz 99, followed by Patriot Medstar 99. It is an excellent
    opportunity for the AFMS to investigate how their communication
    infrastructure ``fits'' within the joint arena before we go to war. The
    ``Care in the Air'' project will flow nicely into this demonstration as
    the next step in determining how technology enhancements within the AE
    environment can improve our clinical and operational efficiencies.
                Information Technology
        The Total Nursing Force Strategic Plan (TNFSP) homepage website was
    updated to a designated user-publishing process with Netscape
    Communicator. A platform was created to allow for virtual discussion
    forums. Information can now be exchanged or feedback obtained almost
    immediately to brainstorm, resolve issues, and share best practices.
    These electronic communication systems placed the AF TNF ``on the map''
    for state of the art, customer-responsive communication. Timely
    dissemination of accurate information is critical to successful mission
    accomplishment in these dynamic times.
                Technology in Education
        In the last year, the Nurse Transition Program has been
    reengineered to better accommodate the needs of the students as well as
    chief nurses and nurse managers. As our training platforms in the MTF's
    decrease in quantity and acuity of patients, we have been investigating
    adjunct methods of training. One of these has been the simulated
    inpatient medical unit, developed at the 383rd Training Squadron at
    Sheppard AFB, Texas. This unit allows students (both officer and
    enlisted) to experience the typical workflow on a moderately busy
    patient care unit. It is believed that this tool will be a beneficial
    supplement to skills training and sustainment of the Total Force in the
    future.
                Military Nursing Research
        The Tri-Service Nursing Research Program continues to provide the
    essential resources to ensure the continued growth of a flourishing Air
    Force nursing research milieu. The benefits of completed research are
    not always immediately evident. We are grateful that this committee
    recognizes this and look forward to your continued support in our
    ongoing research endeavors.
        From 1992 to present day, 28 of 142 (20 percent) Tri-Service
    nursing research studies came from the Air Force. Proposals completed
    to date display a diverse range of topics to include: The Effect of
    Healing Touch, Cancer Prevention and Detection in Military Nurses,
    Family Stress Associated with Wartime Separation, and Readjustment of
    Gulf War Veteran Women. For fiscal year 1998, Air Force nurses in the
    Active, Guard and Reserve forces submitted four of nineteen (21
    percent) Tri-Service research proposals selected for funding. The
    research proposals were: Preventing Suctioning-Induced Hypoxemia at
    Altitude, Impact of TRICARE/Managed Care on Mirror Force Readiness, Air
    Force Women's Health Surveillance Study and Management of Hypertensive
    Patients by CNS in Military Setting. I am very pleased that the subject
    matter being researched is timely, addresses global health care issues
    as well as military specific concerns of the day.
        Our final grant writing workshop made tremendous strides this year.
    We provided over 60 ARC members with a heightened understanding and
    participation in research activities and increased the cadre of AF AFNC
    investigators. Placement of Clinical Nurse Researchers (CNR) at each of
    our clinical investigative sites provided the essential link for
    nursing staff to incorporate research into day-to-day activities. The
    CNR's increased the nursing staff's knowledge and participation in
    clinical research, dissemination of research findings, and utilization
    of research findings in daily practice.
        Of the 29 nursing research studies completed and ongoing at WHMC,
    seven have been competitively selected for Tri-Service nursing research
    grants, with an additional proposal currently pending grant approval.
    Four studies have been completed (two were Tri-Service funded). The two
    Tri-Service funded studies are entitled; ``Impedance of Chest Tube
    Drainage: Effect of Position'' and ``Effects of 3 Fluids on Hydration
    During MOPP Training.'' The first study validated current nursing
    practice in the care of patients with chest tubes. The results of this
    study have the potential of maximizing chest drainage systems; thus,
    reducing treatment time, reducing patient discomfort and health care
    costs. The results are particularly important to military nurses who
    may be faced with situations where avoiding dependent loops in the
    tubing may be impossible. In these cases, it appears that periodic
    lifting and drainage of the tubing results in adequate fluid drainage.
    The investigators have submitted the study for publication in a
    national nursing journal.
        The data from the second study dealing with fluid hydration is
    still being analyzed, but the researchers have concluded that water was
    as good as the more expensive ``sports drinks'' in maintaining adequate
    hydration during strenuous activity while wearing chemical/biologic
    warfare protective clothing. If this conclusion holds true after
    analysis, it will have a significant impact on the resource constrained
    environment of our austere deployment sites.
        Since assignment of the CNR to the Keesler AFB Medical Center in
    Mississippi, 49 staff members representing six disciplines have
    conducted 12 interdisciplinary clinical studies. We are extremely proud
    of this multidisciplinary collaborative approach to research. This data
    reflects tenfold improvement in staff involvement in research
    activities, as compared to the previous five years. There are eight
    studies now being conducted to address clinical issues and concerns.
        One completed study examined effects of ``patient-preferred'' music
    use by patients about to undergo surgical procedures. ``Patient-
    preferred'' music, as a therapy, substantially reduced (p<.001) anxiety
    perceived by patients, prior to surgery. This knowledge provides for
    potential reduction of some medications currently being used during the
    anesthesia induction period, thus impacting our current surgical
    patient care practice.
        The prevalent rate of high blood pressure was studied in one of the
    under served civilian communities in the local area. It was determined
    that high blood pressure is highly prevalent (4 out of 10) in this
    particular group of individuals who also had an extremely low level of
    self-care and knowledge regarding high blood pressure. Based on this
    substantiated knowledge deficit, an initiative was implemented by
    military nurses to improve the knowledge level concerning high blood
    pressure in this off-base community. This project has strengthened our
    community relationship. The study is being reviewed for publication at
    this time, and it will be the first of its kind in the professional
    literature.
        The Keesler AFB Clinical Nurse Researcher was awarded continued
    Tri-Service Nursing Research Program funding of $167,833 on a two-year
    study. This study will evaluate benefits of managing hypertensive
    patients by advanced practice nurses utilizing advanced telehealth
    procedures in reducing blood pressure and prevention of complications.
        Another benefit that can be directly linked to the presence of a
    CNR at Keelser AFB medical facility is the level of dissemination of
    research findings by nurses for nurses and others professionals. During
    last year alone and as a first, over 30 nurses presented 15 research
    posters at national conferences, three papers at research conferences,
    and five manuscripts for publication in professional journals.
        The presence of a CNR at Travis AFB Medical Center has served to
    heighten the spirit of inquiry. Over the last year six studies have
    been completed, with topics ranging from, ``Impact of Staff Education/
    Practice on Success of Breast Feeding'', ``Factors Affecting Department
    of Defense and Veteran Administration Patient Satisfaction in a
    Military Emergency Department'' to ``The Effects of Implementing a
    Cerebral Vascular Accident (CVA) Critical Pathway'', the second study
    has been submitted for publication in Military Medicine. On the horizon
    are four collaborative studies that this facility will do with Wilford
    Hall Medical Center in San Antonio and the Graduate Nursing faculty at
    USUHS. In addition to ongoing research, continuing education classes
    are offered quarterly to provide nurses with the tools/knowledge they
    need to read, critique, and utilize research in their practice and
    provide the inspiration to conduct their own studies.
        As you can see, Air Force nursing is generating research studies
    targeted to both critical practice and readiness issues. It is my
    sincere belief that we're pursuing a course that will offer many
    improved practice opportunities in the years to come.
                                   conclusion
        In closing, it has been my great privilege to present the state of
    the Air Force Nurse Corps these last five years. I can say
    unequivocally that this dynamic assemblage of nursing professionals is
    strategically positioned to carry the Total Nursing Force into the new
    millennium. They are committed to ensuring that our airmen, their
    families and our nation are provided with the most preeminent health
    care available worldwide. Our strategic plan charts the course to meet
    the challenges and opportunities that lay ahead. Mr. Chairman and
    committee members, thank you for recognizing the invaluable
    contributions of military nursing. We appreciate your support in behalf
    of the Department of Defense, the AFMS and the patients we serve.

        Senator Inouye. Thank you very much. Admiral Martin,
    welcome aboard. This is your first appearance before us. We
    look forward to your help here.
    STATEMENT OF REAR ADM. KATHLEEN L. MARTIN, DIRECTOR,
                NAVY NURSE CORPS
        Admiral Martin. Thank you, Senator Inouye, and thank you
    for inviting me to speak to you today about the Navy Nurse
    Corps. As my first appearance, I am certainly delighted to
    report on the current state of our corps, and to explain our
    future challenges, which will echo the same remarks that both
    General Stierle and General Simmons made as far as our
    challenges for all of our Nurse Corps.
        The Navy Nurse Corps is a total integrated force of over
    5,300 reserve and active duty nurses who actively support the
    Navy health care team. Our focus is on, as Admiral Nelson
    mentioned, readiness, and accomplishing our health benefit
    mission through practicing, teaching, and leading medical
    treatment facilities of all sizes.
        Navy nurses envision themselves as leaders in creating
    teams and developing partnerships for optimal health promotion
    and organizational performance. Our strategic plan in the Navy
    Nurse Corps focuses us on mission accomplishment and support,
    inspirational leadership, and exceptional professionalism.
    Therefore, the drivers of our strategic plan are operational
    readiness, leadership, and professional practice.
        As Admiral Nelson mentioned, our fundamental purpose for
    existence is operational readiness. In addition to supporting
    our fixed treatment facilities, we have over 70 active duty
    nurses serving in a broad range of operational assignments that
    include aircraft carriers, hospital ships, fleet surgical
    teams, and fleet marine force units. Navy nurses routinely
    support military operations and exercises involving our
    hospital ships U.S.S. Mercy and U.S.S. Comfort, and are
    critical to giving operational experiences to Navy nurses as
    well as supporting the exercise itself.
        Operational readiness also includes humanitarian support
    missions conducted in response to sudden tragedies and
    environmental disasters. Nurse Corps officers assisted in the
    aftermath of destruction caused by Hurricane Mitch in Honduras,
    and were an essential part of medical units deployed to provide
    support to the people of Haiti. Operational readiness also
    means maintaining the health and well-being of our sailors and
    marines on a daily basis.
        In our fleet concentration areas, family nurse
    practitioners deliver care at the pierside to provide ready
    access to health care and reduce time lost from the workplace.
    Critical to maintaining a readiness posture is the successful
    utilization and integration of our reserve personnel.
        Reserve nurses contribute to our total force integration,
    providing superbly skilled replacements for deployed active
    duty staff, allowing continuation of full-scale health care
    services in all facilities. Some examples include support to
    Naval Medical Center Bethesda during Baltic Challenge, support
    to naval hospitals at San Diego and Camp Pendleton during
    Operation Kernel Blitz, support to Naval Hospital Pensacola in
    preparation for a major operational exercise.
        Leadership is our second focus of our strategic plan.
    Currently, there are 27 nurses serving in commanding officer
    and executive officer positions in military treatment
    facilities and other health care activities. In the operational
    arena, several of our active duty and fleet hospitals have
    Nurse Corps officers serving as commanding officers. Many of
    our reserve units and commands are also commanded by reserve
    officers, Nurse Corps officers.
        Our accomplishments would not be possible without the
    dedicated and motivated Navy nurses who demonstrate nursing
    excellence on a daily basis. Numerous professional practice
    initiatives reflect this devotion to outstanding health care to
    our beneficiaries. For example, nurse-managed clinics are being
    opened at many commands. The goals of these clinics are,
    decrease inpatient hospitalization rates, decrease numbers of
    outpatient visits, and improve patient compliance and quality
    of life. Protocols for care are developed by nurses and
    physicians and approved by the medical staff.
        Advance technology has also led to new and exciting
    practice initiatives. Nurses in San Diego are involved in
    telehealth program to reduce emergency department visits and
    improve outcomes for pediatric asthma patients.
        A multidisciplinary team uses video technology to conduct
    physical assessments, treatments, and patient educations
    without the patients or their families leaving home. As the
    complexity of our professional practice increases, it is
    essential to maintain a strong research foundation. Doctorally
    prepared nurse-researchers actively guide staff nurses to
    investigate practice issues where they think improvements can
    be made. Nurses at one of our facilities projected substantial
    savings by studying the use of compression devices on post
    operative patients which resulted in new standardized treatment
    protocols.
        Having focused on our accomplishments, I would like to
    briefly mention our primary challenge, and it is a challenge
    that has been mentioned again this morning. We will be faced
    with a national shortage of nurses. Two of the major causes of
    this shortfall are an aging registered nurse (RN) workforce and
    a drop in enrollment numbers in BSN programs around the
    country.
        Our Recruiting Command is already experiencing difficulties
    in recruiting both new graduates as well as experienced nurses.
    Recruiters are competing with large signing bonuses from
    civilian health care organizations and pay that exceeds our
    beginning salaries for Navy nurses. For these reasons, our
    Nurse Corps accession bonuses and our pipeline scholarship
    programs are critically important to us. We certainly are
    extremely appreciative of your support of these programs.
        Navy nurses have the dual role of professional nurse and
    military officer. Today's health care system presents complex
    challenges, requiring a comprehensive knowledge base as well as
    enhanced leadership skills. Nurses must have critical thinking
    skills, effective communication, leadership ability, and
    proficient clinical expertise for this dual role. Your
    continued support for maintaining a bachelor's degree as the
    baseline entry level for all military nurses is imperative.
        The Navy Nurse Corps is committed to the success of the
    military health care system, and we are extremely proud of our
    part in Navy medicine. As we collaborate with our colleagues in
    all the services to achieve high cost--excuse me, quality,
    cost-effective care, we will continue to keep the health and
    safety of our beneficiaries as our highest priority, and by the
    way, quality does cost.

                               prepared statement

        I sincerely thank you for your support and for the
    opportunity to address you today. I look forward to our
    continued association during my tenure as the Director of the
    Navy Nurse Corps. Thank you.
        [The statement follows:]
               Prepared Statement of Rear Adm. Kathleen L. Martin
        Mr. Chairman and distinguished members of the Committee, thank you
    for inviting me to speak with you about the Navy Nurse Corps. This is
    my first appearance before you as the Director, and I am delighted to
    report on our current state and explain our plans and priorities for
    the future. I am immensely proud of the Navy health care team and the
    Navy Nurse Corps. After briefly reviewing our mission, I will address
    our accomplishments and challenges.
        The Navy Nurse Corps is a totally integrated force of over 5,300
    reserve and active duty Navy nurses who actively support the Navy and
    Marine Corps team and Navy Medical Department. Our focus is on
    accomplishing our readiness and health benefit missions; serving with
    pride and distinction with our fleet and Fleet Marine Force world-wide;
    and practicing, teaching, and leading in military treatment facilities
    (MTF's) of all sizes.
        We envision ourselves as leaders in creating teams and developing
    partnerships for optimal health promotion and organizational
    performance. We accomplish this by focusing on accurate mission
    alignment and support, inspirational leadership, and exceptional
    professionalism. The three ``drivers'' of our Nurse Corps strategic
    plan are operational readiness, leadership and professional practice.
    Operational Readiness
        Our fundamental purpose for existence is operational readiness. In
    addition to supporting the fixed MTF's, we have over 70 active duty
    nurses serving in a broad range of operational assignments that include
    aircraft carriers, hospital ships, Fleet Surgical Teams, and Fleet
    Marine Force units.
        Navy nurses routinely support military operations. Operational
    exercises involving our hospital ships U.S.N.S. Mercy and U.S.N.S.
    Comfort are critical to giving Navy nurses experience in an operational
    setting as well as supporting the exercise itself. In the 1998 ``Baltic
    Challenge'' exercise, the U.S.N.S. Comfort deployed 96 active and
    Reserve Nurse Corps officers for 30 days in support of a partnership
    for peace initiative to the Baltic States of Latvia, Estonia, and
    Lithuania.
        Currently active and Reserve nurses train to support our fleet
    hospitals. Much of this training is at fleet hospital training sites.
    Fleet hospital training sites have been established at Naval Hospitals
    Camp Lejeune, Pensacola, Bremerton, and Camp Pendleton allowing nurses
    and other medical department staff to train in an operational setting
    while decreasing training costs.
        Operational readiness is also demonstrated during participation in
    humanitarian support missions conducted in response to sudden tragedy.
    Nurse Corps officers assisted in the aftermath of destruction caused by
    Hurricane Mitch in Honduras. They served with the Marine Corps Second
    Medical Battalion and with the Special Psychiatric Rapid Intervention
    Team (SPRINT). The SPRINT Team provided post traumatic incident
    debriefing and counseling, and assisted the other military units in
    providing Spanish translators, disaster assistance guidelines, and
    provisions for the special needs of children affected by the disaster.
        Another significant humanitarian mission we participated in is the
    deployment of medical units to provide support to the people of Haiti.
    Staff from Naval Medical Center Portsmouth deployed to Haiti with the
    Second Medical Battalion in July 1998. After six months of service, the
    Medical Battalion was relieved by members of Fleet Hospital
    Jacksonville; a significant number of nurses supported both teams.
        Operational readiness also means maintaining the health and well
    being of our Sailors and Marines on a daily basis. In our fleet
    concentration areas, Family Nurse Practitioners deliver care at the
    pierside to provide ready access to health care and reduce time lost
    from the workplace.
        Critical to maintaining a readiness posture is the successful
    utilization and integration of our Reserve personnel. Reserve nurses
    contribute to ``total force integration,'' providing superbly skilled
    replacements for deployed active duty staff, allowing continuation of
    full-scale healthcare services in all facilities. Examples include:
      --Support to National Naval Medical Center Bethesda during Baltic
            Challenge;
      --Support to Naval Medical Center San Diego and Naval Hospital Camp
            Pendleton during Operation Kernel Blitz;
      --Over 100 Reservists will replace active duty staff at Naval
            Hospital Pensacola, as they begin an intense training
            curriculum in preparation for a major operational readiness
            exercise this summer.
        We have a plan for total force integration that matches the superb
    talents of Reserve officers with the readiness mission of the Navy. At
    Navy facilities around the country, the Reservists are teaming up with
    their active duty counterparts to implement the Integrated Medical
    Support Program that emphasizes consistent Reserve drills at a specific
    mobilization site. This program strengthens both the Reservists' skills
    and the facility's ability to meet its peacetime and operational
    missions. A facility can gain up to six weeks a year of a Reservist's
    time, instead of two weeks of annual training and disjointed portions
    of weekend drills.
    Leadership
        Leadership is the second focus of our strategic plan. I am very
    proud of our leaders in the Nurse Corps. Currently there are 27 nurses
    serving in commanding officer and executive officer positions at MTF's
    and supporting commands. Some of the most exciting leadership
    initiatives are occurring as we undergo major organizational changes
    within our MTF's around the world. In numerous hospitals, nurses are
    assuming roles as department heads or directors of clinical services
    and product lines. Several nurse practitioners are serving in dual
    roles as health care executives, while maintaining an active clinical
    practice.
        In the operational arena, Nurse Corps officers are excelling in
    leadership positions. Several of our active duty fleet hospitals and
    one Reserve fleet hospital are commanded by nurses. A Nurse Corps
    officer has just been selected to serve as the Medical Detachment
    Commander, providing medical support for the 15th Marine Expeditionary
    Unit. We recently had our first Navy nurse qualify as a Command Duty
    Officer onboard a carrier, the U.S.S. John C. Stennis; an
    accomplishment I feel confident will be repeated in the future.
        I am particularly proud of our increased operational role. As Navy
    nurses become increasingly involved in more and varied leadership roles
    and responsibilities, and make significant contribution to leadership
    onboard our ships, we get more Line Navy requests for nurses to serve
    in such roles. Their ability to become a part of the Navy and Marine
    Corps team in support of our operational forces is exemplary.
    Professional Practice
        Our accomplishments would not be possible without the dedicated,
    educated, and motivated Navy nurses who demonstrate nursing excellence
    on a daily basis at MTF's around the world. Similar to our excellent
    leadership initiatives, we have many professional practice initiatives
    that demonstrate our dedication to outstanding healthcare to our
    beneficiaries.
        Nurse-managed clinics are being opened at numerous commands around
    the country. The primary aim of these clinics is to encourage patients'
    involvement in their care and provide individualized education to
    patients regarding their disease or complication. The goal is for these
    efforts to decrease inpatient hospitalization rates, improve patient
    compliance and quality of life, and decrease the number of outpatient
    visits to the emergency department and primary care managers. Protocols
    in these clinics are developed by nurses and physicians and approved by
    the medical staff.
        At the Naval Ambulatory Care Center Groton, Connecticut protocols
    have been established with physicians that assist nurses in assessing
    and providing care for patients. Beneficiaries requiring education or
    initial screening for conditions such as sore throats, chicken pox, or
    pregnancy can be managed by the nurse. Additionally, nurses begin
    preliminary screening for school physicals. The nurses see
    approximately 20 to 25 patients per day, enhancing access to care and
    increasing the number of patients enrolled to providers.
        Nurse Corps officers at Naval Hospital Jacksonville developed a
    comprehensive program known as ``Baby Boot Camp'' to support and
    educate new parents. This program assists parents in planning for their
    new babies and includes topics ranging from feeding and bathing basics
    to infant resuscitation.
        Advanced technology has also led to new and exciting practice
    initiatives. Nurses at Naval Medical Center San Diego are involved in a
    telehealth program to reduce emergency department visits and improve
    outcomes for pediatric asthma patients. A multi-disciplinary team uses
    video technology to conduct physical assessments, treatments, and
    parent education without the patient ever leaving home.
        Advanced technology has also allowed us to use the Training and
    Education Device (TED) as an extremely valuable teaching adjunct for
    nursing and medical students. TED is an electronic patient simulator
    whose human appearance and state-of-the-art technology simulates real-
    time illness or injuries and real-time responses to treatment
    interventions. TED can be programmed to give all the physical signs and
    symptoms of a Marine extensively injured from a minefield explosion or
    a pregnant woman with multiple complications. TED has been used to
    train over one thousand corpsmen, nurses, and physicians worldwide, and
    has proven to be a most innovative and cost-effective member of our
    educational team.
        As the complexity of our professional practice increases, it is
    essential to maintain a strong research foundation. Doctorally prepared
    nurse researchers actively guide staff nurses to investigate practice
    issues where they think improvements can be made. Nurses at one of our
    facilities saved the command over $100,000 by studying the use of
    compression devices on post-op patients, which resulted in new
    standardized treatment protocols. Another research team decreased the
    incidence of postoperative spinal headaches by looking at traditional
    preoperative practices and making state-of-the-art changes.
    Perioperative nurses actually proved that buying more expensive suture
    was cost effective because it was more durable and broke less
    frequently. These and multiple other research initiatives have resulted
    in better patient care and more efficient use of scarce resources.
        We also have nurses working pierside and onboard ships, focusing on
    health promotion, prevention and women's health initiatives. At several
    commands, nurse practitioners have initiated ``Adopt-A-Ship'' programs,
    where nurse practitioners spend a portion of their time on ``their''
    ship, determining the particular health needs of the crew. Of special
    interest to the Navy are the concerns of women onboard ship, the
    greatest of which are, pregnancy avoidance, sexually transmitted
    diseases, tobacco and alcohol abuse, training injuries and return to
    duty post-partum. Additionally, many commands are using nurse
    practitioners to provide health care at the workplaces of sailors. This
    minimizes time lost from the workplace and leads to greater
    understanding and unity between the medical department and Line Navy.
        As you can see, teamwork, interdisciplinary efforts, managed care
    practices and research initiatives are hallmarks of our professional
    practice endeavors. I am extremely proud of the many accomplishments of
    Navy nurses and their contribution to the Navy Medicine team.
    Challenges
        Having focused on our operational, leadership and professional
    practice efforts and accomplishments, I would also like to briefly
    mention two of our challenges. I am concerned that we may be facing a
    nation-wide nursing shortage. This impending shortage is being widely
    publicized in numerous professional journals and national conferences.
    Two major causes of this shortage are an aging RN workforce and a drop
    in enrollment numbers at nursing schools around the country. A study
    funded by the Association for Health Services Research concluded that
    the RN workforce is aging at a rate that far exceeds all other
    occupations contained in Bureau of Census data. The average age of
    practicing nurses in the United States is 42 years old. As this
    population ages and leaves the workforce, we will need nurses to
    replace them. The decreasing numbers of students in nursing schools
    today is worrisome. Our Recruiting Command is already experiencing
    difficulties in recruiting both new graduate and experienced nurses.
    They are competing with large ``signing bonuses'' from civilian health
    care organizations and pay that exceeds beginning Navy salaries. For
    these reasons, our Nurse Corps accession bonuses and our pipeline
    scholarship programs are critically important to us; we are extremely
    appreciative of your support for them.
        Secondly, rapid changes in technology, moving health care to the
    home and outpatient arenas, and a sicker inpatient population require
    nurses to be educated to meet these complex challenges. Nurses must
    have critical thinking skills, effective communication skills, and
    proficient clinical talents. As with all other officers commissioned
    for military Service, nurses need to have a baccalaureate degree. As
    nurses work with various healthcare providers and Line officers to meet
    the numerous and unique needs of active duty members and their
    families, they must have the educational preparation to meet these
    challenges. I feel confident in the Nurse Corps' ability to meet these
    challenges. We would not have come this far without the support of our
    medical department and Line colleagues, and especially you here on
    Capitol Hill.
        The Navy Nurse Corps is committed to the success of the military
    health care system, and we are extremely proud to be part of the Navy
    Medicine team. As we collaborate with our colleagues in all the
    Services to achieve high quality, cost effective care, we will continue
    to keep the health and safety of our beneficiaries as our highest
    priority. I sincerely thank you for your support and for the
    opportunity to address you today, and I look forward to our continued
    association during my tenure as Director.

        Senator Inouye. Thank you very much, Admiral. Before I
    pursue it, I would like to on behalf of the committee
    acknowledge and thank General Simmons and General Stierle for
    your many years of service to our Nation. I realize that this
    may be your last appearance before this committee in uniform,
    but you are always welcome back.
        Fifty-four years ago on this day, I met my first Army
    nurse, because on this day I received my final Purple Heart,
    and it was in a field hospital, and from that moment on I have
    had a love affair with nurses. It did not take me too long to
    realize that nurses were professionals, that they were very
    competent, and yet I was disappointed because at that time
    nurses were looked upon by doctors as inferior subordinates,
    and yet in my care in the hospital I believe I saw the
    physician about once a week at the most, and the rest of the
    time the nurses took care of me, everything from minor surgery
    to IV's or what-have-you. They were the psychiatrists, they
    were the nurses, they were everything.
        I am pleased that finally recognition and appreciation is
    becoming evident in the Medical Corps, and that you are treated
    like professionals, but I do not think we have really achieved
    that yet. I think, for example, you should have at least two
    stars apiece. [Laughter.]
        The number of people you are commanding at this time would
    justify an additional star.
        As you have indicated, and especially Admiral Martin, the
    nursing shortage is a matter of major concern to us, and I have
    had the committee's executive nurse intern, Patricia Boyle,
    come up with a few numbers, and these numbers really frighten
    us. Employment for nurses will grow faster than the average for
    all occupations through 2005, with job growth at 30 percent. By
    2010, the demand for registered nurses will outstrip the
    anticipated supply. By 2000, there will be over twice the
    number of jobs for master and doctoral prepared nurses as
    nurses available.
        The average age of an RN today is 44 years. Half of the
    Nation's registered nurses will reach or be near retirement age
    in the next 15 years. Entry level bachelor students fell more
    than 6 percent from 1996 and 1997. Estimates forecast that the
    need for nurses in hospitals will increase by 36 percent by the
    year 2020 because of the rising complexity of care. Two-thirds
    of nurses should hold bachelor's of science degrees by 2010.
    Whatever it is, these numbers are not promising. Are you
    satisfied that the programs we have in place in recruiting and
    retention will be sufficient to meet this problem that is right
    upon us now?

          effectiveness of recruiting initiatives for Army Nurse Corps

        General Simmons. Senator, right now our recruiting
    initiatives are effective. You know, we have some chronic
    shortfalls, as everyone does, in specialty nurses, and
    particularly nursing anesthesia, and you know we have had some
    legislative help for comparability pay to improve our
    retention, and that has helped.
        We do have the capability for accession bonuses through the
    United States Army Recruiting Command, again legislative
    assistance, that we are using for hard-to-recruit specialties,
    i.e., critical care nurses and nurse anesthetists, and working
    family nurse practitioners.
        Right now, based on multiple factors, the downsizing in the
    Army, quadrennial defense review (QDR) reductions, those kinds
    of things, as the military health care system has taken
    personnel reductions, we do not feel that shortage today.
    Certainly, the projections are exactly as Pat has said.

                           BSN entry versus MSN entry

        Entry into baccalaureate programs has decreased, but entry
    into master's programs have increased. Nursing remains a
    predominantly female profession, and as opportunities in the
    country have expanded for women, women are looking at other
    alternatives for careers other than traditional roles and
    health care is certainly one of those, so we are watching
    carefully. We do not feel that impact today in our system. We
    have gotten the support that we need. We have the capability
    and the flexibility for accession bonuses, so I would have to
    say today that we are comfortable and are getting the support
    that we need.
        Senator Inouye. Does USUHS help in this program?
        General Stierle. USUHS helps again in terms of I think
    providing us with a product that even though you can prepare
    individuals in terms of advance practice nursing in the
    civilian sector, what you do not get from that experience is
    the military unique aspect of their training in terms of
    helping them focus on how their practice would have to change
    in austere environments, austere settings.
        The other thing I think that is very good about USUHS is
    that it is a joint environment, so it gives us an opportunity
    to interact with each other in terms of the services and gives
    us a better understanding of how we are alike but also how we
    are different as we come together, and I think USUHS is also--
    it has a unique opportunity to make a contribution to the
    Nation in terms of modeling, how more collaborative education
    could benefit the health care system, because one of the things
    that we know from research studies, in particular in critical
    care arenas, is that collaborative practice between the
    different disciplines has a positive impact on the quality of
    health care and patient outcomes, and so it is uniquely
    positioned to be able to demonstrate to this Nation how we
    could do more of that not only for the patients but also in
    terms of cost.
        But getting back to your question about recruitment and the
    shortage of nursing, I think the programs that we have in place
    now are serving us well, but I think as I said in my testimony
    we need to be ever vigilant, and there may be certain areas
    that we will have to target in the near future.
        For example, in years past, all three services have had
    very serious problems with recruiting sufficient numbers and
    retaining nurse anesthetists, but with the special incentive
    pay that we were able to get, plus educational programs that we
    had, scholarship programs, the Air Force for the last 3 years
    has met 100 percent plus our requirements in that arena.
        In the future, we may need to target something like the
    critical care nurses in terms of intensive care units, because
    there is not only a shortage in nursing, but in particular in
    critical care nursing we are seeing a shortage across the
    Nation, and certainly in wartime we have a tremendous need for
    nurses with those skills, although in our peacetime environment
    we really do not have a large requirement for that.
        So I think in the not-too-distant future we may need
    legislative assistance in terms of putting in place certain
    programs to incentivize getting individuals with specialty
    skills that we need.
        Admiral Martin. Senator Inouye, I believe that we will
    have, very soon will have a very critical problem. I was a
    recruiter in the mid-seventies, right after Vietnam, and I know
    what it is like to beat the bushes out there, and we have had
    nursing shortfalls in the past, and I think this is the time to
    prepare ourselves. Right now, we really need to look at those
    and maintain those scholarship pipelines, our accession
    bonuses.
        We need to look at our young enlisted corpsmen and other
    ratings and really encourage them to continue with their career
    in the services and incentivize them to continue on to get
    their bachelor's degrees in nursing, but I really believe we
    will have a problem, and it is coming fast.
        Senator Inouye. Another problem that concerns us is skills,
    I suppose. Medical facilities have gone from hospital status
    with acute care to outpatient facilities with primary care
    models. For example, between 1990 and 1999, the Air Force went
    from 75 hospitals and 40 clinics to 40 hospitals and 34
    clinics. Do you believe that we are putting ourselves in
    jeopardy by these changes?
        General Stierle. I do not think we are putting ourselves in
    jeopardy by these changes. These changes are necessary. They
    are the right things to do. But I think what it means is that
    sustainment training is going to become a critical issue for
    the active component just like it has long been for the reserve
    component, and we are going to have to look at a variety of
    ways that we are going to sustain those skills, and we are
    already.
        I mentioned in my testimony the Ben Taub initiatives,
    partnering with our civilian counterparts in terms of looking
    for win-win options, in terms of providing them people to
    provide care, plus providing us with a platform to sustain our
    skills, looking at simulated and use of sophisticated
    mannequins in terms of trying to sustain skills over time,
    careful assignment management in terms of how we utilize our
    different facilities over time to try and ensure that we
    maintain the level of experience, optimal use of our deployment
    opportunities in terms of, those are some of the best learning
    platforms that we have in terms of the humanitarian programs,
    small-scale contingency operations, so I think we just have to
    be very creative in terms of the different methodologies that
    are available to us in terms of sustaining skills.

                       Readiness training and cost impact

        General Simmons. I think as we have worked to make the
    military health care system more resource-efficient, part of
    the impact has been a decrease in the inpatient census, which
    has been the training bed traditionally for nursing personnel,
    officer and enlisted.
        As General Stierle talked about, the Ben Taub initiative in
    Houston, to send our personnel to do some acute care training,
    there is a big price attached to that. The Army Medical
    Department of the services are in the daily business of taking
    care of soldiers and families. When we train, there is a bill
    associated with that. There are opportunities to train in
    particular in the civilian sector, enhanced skill sustainment,
    but that is at the cost of peacetime health care.
        If you pull a full surgical team out with the
    anesthesiologist and the surgeon and the nurse anesthetist, the
    licensed practical nurse, the emergency medical technicians
    (EMT's), someone is gone from that hospital in the peacetime,
    and you do not reap the peacetime benefit of having those
    people in our system.
        So as we look for innovations, critical innovations to
    ensure that we are ready, the issue then becomes the impact on
    the daily care of soldiers in our hospitals, and I know the
    Surgeons General are working this as we speak, because
    readiness has a big price tag attached to it, so in order to
    assure that we have the skills that we need, it does detract
    from our peacetime mission, because we have a real mission
    every day in the table of distributions and allowances (TDA)
    hospitals, and so can it be done, yes, it can, but it has a
    price tag, sir.
        Senator Inouye. Does the budget cover that, the price tag?
        General Simmons. We have the readiness equation in it, but
    we are still continuing to calculate the growing cost
    associated with that.
        Admiral Martin. I think as General Simmons mentioned, one
    of the impacts is when we send individuals out on various
    training exercises that is lost to our facility, and then we
    have to really look to see how to compensate for the patients
    in those facilities as active duty nurses leave.
        The other thing, we have some very good memorandum of
    understanding (MOU's) with the Veterans Affairs (VA) hospitals
    but then again the nurses leave the facilities to go and really
    get their competencies elevated in outside facilities.
        One of the unique things the Navy has done is, we have
    taken our fleet hospital training sets and established them at
    some of our hospital sites and actually put up fleet hospitals
    in the backyards of our MTF's, and we are actually doing
    patient care in those fleet hospitals, but it certainly is a
    challenge to the leadership and our creativity.
        Senator Inouye. Because of our culture and our history the
    nursing profession has been primarily a ladies' profession, but
    in the real world there is no secret that men get better pay
    than women, and in the private sector a male nurse would get a
    different title and bigger pay than a female nurse in many
    cases. Are we doing enough to recruit male nurses?

                           recruitment of Male nurses

        General Simmons. Sir, I will tell you the Army Nurse Corps
    has a higher percentage of men than any other segment of
    society in the military and the civilian sector; 34 percent of
    Army nurses are men.
        Senator Inouye. Thirty-four percent?
        General Simmons. Yes, sir.
        Admiral Martin. Thirty-two percent of Navy nurses are
    males, and we certainly are doing an awful lot as far as
    getting them and maintaining them and retaining them in our
    Corps.
        General Stierle. Thirty percent in the United States Air
    Force overall.
        Senator Inouye. I think if you polled the committee they
    would say something like 5 percent.
        General Simmons. In the civilian sector that is an accurate
    statement, sir.
        Senator Inouye. We should have men also testifying, and
    then you might get a better pay scale. [Laughter.]
        Admiral Martin. I think the men went before us. [Laughter.]
        Senator Inouye. Well, you have overstayed here, and you
    have waited long. I would like to thank all of you, and Admiral
    Martin, welcome, and to both of you, General Stierle and
    General Simmons, we thank you very much for your service.

                              subcommittee recess

        This subcommittee will meet again next Wednesday, April 28,
    at 10 a.m. in this room, to review the National Guard programs.
    Thank you very much.
        [Whereupon, at 12:22 p.m., Wednesday, April 21, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    April 28.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                           WEDNESDAY, APRIL 28, 1999

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

                             DEPARTMENT OF DEFENSE

                             National Guard Bureau

    STATEMENT OF LT. GEN. RUSSELL C. DAVIS, USAF, CHIEF,
                NATIONAL GUARD BUREAU

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. Good morning, gentlemen. My apologies to
    all concerned. We had a meeting preliminary to other people
    going down to the White House on the matter of Kosovo, and I
    regret my being late.
        We are pleased to have you all here this morning. We want
    to commence with the Chief of the National Guard Bureau,
    Lieutenant General Russ Davis. Nice to have you back, General.
    You are accompanied, I know, by the Director of the Army Guard,
    General Schultz, and the Director of the Air National Guard,
    Major General Paul Weaver.
        Now, we have transitioned to the point where the Guard has
    become a central participant in our worldwide national military
    strategy. In addition, I think the Guard plays an important
    role in countering threats related to defense of the
    continental United States, including terrorism, information
    warfare, national defense, and the transnational threats and
    attacks of critical infrastructure that are just too ominous
    for the future.
        You have vital missions now as part of the Total Force.
    Senator Inouye and I have worked very hard to try to see to it
    that you have the funding and the support that you need from
    the Congress, working with the National Guard Caucus. We have
    seen some tremendous performances from our people, your people,
    the National Guard people in overseas contingency missions as
    well as support for the national disasters in our country and
    also Honduras.
        I think it is important that we realize that this is an
    increased OPTEMPO, and your modernization and infrastructure
    funding must be increased accordingly, so I want to address
    those funding requirements this morning. I can assure you that
    in partnership with my friend, Senator Inouye here, we are not
    going to allow any of your priorities to be underfunded in the
    year 2000. We welcome your statements here today, and I can
    tell you that the importance we put upon the Guard is such that
    while we have canceled two other hearings to go to the White
    House for meetings on Kosovo, we both felt we should be here
    today.
        So, Senator Inouye.

                       STATEMENT OF HON. DANIEL K. INOUYE

        Senator Inouye. Thank you very much, Mr. Chairman. I want
    to join you in welcoming General Davis, General Schultz, and
    General Weaver. Since the very beginning of our Nation, we have
    depended upon our citizen soldiers. Two hundred years ago they
    were known as State militias, the forerunners of our National
    Guard. The National Guard provides an essential part of our
    defense, as you have noted, Mr. Chairman, one that deserves our
    full support, and cannot be short-changed.
        In recent years, there have been some disagreements between
    our Army Guard and active duty forces, but all of us here are
    pleased that some of these problems are apparently now behind
    us. I believe this year's budget goes a long way toward
    addressing this situation. However, there are still concerns.
    We find that it is still difficult to convince the active
    component to procure new weapons for our Guard forces, and the
    situation in the Army for military construction remains a real
    problem. Too few dollars are requested annually to satisfy the
    legitimate requirements of our Guard forces.
        On another note, I want to commend the administration for
    seeking to increase the number of National Guard rapid
    assessment initial detection (RAID) teams to defend against
    terrorists with weapons of mass destruction. This is a critical
    problem that requires our full attention.
        General Davis, I hope you will carefully consider Hawaii as
    one of the sites for this new mission. I think we are ready for
    that.
        Mr. Chairman, I want to thank you for this hearing and for
    your many courtesies. I look forward to the testimony of the
    witnesses.
        Senator Stevens. Yes, sir. Senator Bond.

                       STATEMENT OF HON. CHRISTOPHER BOND

        Senator Bond. Thank you very much, Mr. Chairman. Generals,
    I join with the chairman and ranking member and my colleagues
    in welcoming you before the committee. We here, as you have
    heard, are united in our belief that the National Guard's
    missions are crucial to our national and civil defense. As
    cochairman of the National Guard Caucus, I am very proud to
    recognize that in terms of military readiness, national
    disaster preparedness, and law enforcement, the Guard has
    distinguished itself with an unsurpassed level of
    professionalism and a bargain price.
        I also note happily that the administration acknowledges
    your viability. They have consciously decided to increase your
    mission areas, a blessing, maybe in disguise. I note proudly
    that the Missouri Guard F-15 unit based in St. Louis have been
    routinely flying missions in support of our mission in Bosnia,
    but I am concerned that they may be severely restricted in
    their ability to be integrated into a larger force because of
    their lack of the advanced data links which are critical to
    multiunit operations.
        On a State-wide note, I would like very much to see the
    Cobra helicopter unit based at Whiteman Air Base get Apaches as
    soon as possible. Ground-based units are serving well around
    the globe in support of the multiple missions directed by the
    President.
        The Secretary has sufficiently recognized the Guard's
    funding shortfall and made an effort to alleviate their
    financial predicament, although in my opinion it has not been
    adequate, and I assure you, gentlemen, that I am fully
    supportive of the chairman and the ranking member that we are
    going to do all we can to ensure that your components are
    adequately resourced in funding as well as manning.
        Secretary Cohen's announcement already referred to that the
    Department of Defense (DOD) has established new chemical-
    biological incident response teams manned by guardsmen as once
    again an affirmation of your ability to carry out the most
    dangerous of missions. I hope that you are going to receive a
    funding spike to train and field those teams.

                                    Funding

        This, Mr. Chairman, is what concerns me, that mission
    shifts and additions have overwhelmed the ``additional
    funding'' provided by the Secretary of Defense's budget
    request. I am also concerned because the plans proposed for the
    armed expeditionary force and expeditionary Air Force concepts
    scheduling Guard and Reserve units into operational rotational
    slots indicates that the active force is too small to carry the
    load the President has placed on it in peacetime, and I am
    concerned that when we use our strategic reserve to fulfill
    peacetime daily requirements, we will not have a strategic
    reserve for time of war.
        Additionally, I am concerned about the precedent of
    wresting control away arbitrarily of Guard units from the
    Governors, and I would be interested if you have been hearing
    from the Governors on that.
        Rather than being a bit player, the Guard's role should be
    vibrant, viable, and adequately funded by the Department of
    Defense, which leads me to my most immediate concern for the
    Guard. As I understand it, General Davis, you face a $184
    million shortfall, my words, not yours, in your personnel
    accounts alone. I am also deeply concerned about your ability
    to conduct effective training at all levels, individual through
    various unit levels.
        Generals, I wonder if you are concerned that if training is
    tiered, the top getting the 100 percent, on down to 20 percent,
    that unit preparedness might be, too, also tiered, and that
    that could lead to a call to slice off the bottom reduction of
    force because of the atrophying readiness levels and their
    inability eventually to fulfill their mission requirements.
        To me, it looks like they are setting themselves up for a
    good excuse for a cut. I hope we will have an opportunity to
    address those issues during the question and answer rounds,
    especially in light of the fact that much of this comes out of
    statutory requirements, military schools, and training funds.
        I look forward to hearing your testimony today, and I thank
    you.
        Senator Stevens. Thank you, and we appreciate your work on
    the Guard Caucus.
        Senator Cochran.

                         STATEMENT OF HON. THAD COCHRAN

        Senator Cochran. Mr. Chairman, I do not want to delay the
    hearing, but I do want to join you in welcoming our panel. We
    understand the stress that you are under right now trying to
    match the needs that you have with the funding that is
    available under this President's budget. We are pleased to see
    some increases in the budget this year to reflect the growing
    importance of Guard units in the Air Guard as well as Army
    National Guard.
        We hope that you can be assured by your visit here today
    that we are going to do everything we can to make sure you have
    the funding you need to protect yourselves and to protect the
    men and women under your command, as you go in harm's way in
    Kosovo and elsewhere in the world to protect our security
    interests and the interest of our great country. That is the
    message I think that we should give you this morning, that we
    are going to do everything we can to be sure that the Congress
    responds to ensure that you have the funds that you need to do
    your job.
        I know that there are specific questions that I am going to
    ask later in the hearing, but I will defer those and any other
    specific comments about parochial interests to thank you for
    the leadership you are providing.
        Senator Stevens. General, I hope your comments will address
    what to me appears to be a dichotomy in the whole planning for
    your operation, and that is that the QDR, the Quadrennial
    Defense Review would indicate that we should reduce the Army
    Guard strength by 21,000 beginning in the year 2001, and yet my
    staff tells me that there is an identified need of 4,700 full-
    time positions right now to correct chronic shortfalls in the
    Guard, and that this is impacting your readiness, particularly
    in view of the deployments contemplated due to the current
    conflict.

                      prepared statement of Senator Shelby

        The subcommittee has received a statement from Senator
    Shelby, which will be placed in the record.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        Good morning gentlemen. It is a pleasure to see you before
    the Committee today. General Davis, it is especially gratifying
    to see that a fellow Alabamian is in charge of the National
    Guard Bureau. I believe that you are about eight months into
    your tenure. I know it will be both a trying and gratifying
    assignment. I would also like to point out to the Committee
    that the General is not only an accomplished military pilot and
    leader, he is also an experienced corporate lawyer in civilian
    life. I think that is quite a unique background and it is an
    example of what a hard working person can achieve while in the
    National Guard. General, you are a credit to the state of
    Alabama and the Guard. I wish you the best.
        I would like to note that in National Guard Bureau's
    Posture Statement is a quote from Thomas Jefferson, ``For a
    people who are free, and who mean to remain so, a well-
    organized and armed militia is their best security.'' Without
    such a militia this nation would never have thrown off the yoke
    of the British Monarchy. For two centuries state militias and
    now the National Guard have answered the call when our nation
    needed them most. Whether it was Saratoga, Gettysburg,
    Normandy, the Persian Gulf, or South Florida after Hurricane
    Andrew, the Guard has done the job and done it well.
        Yesterday, our nation called again. Guard units, some in my
    home state of Alabama, have been activated for the war in
    Kosovo. I urge this Committee to ensure that we provide the
    proper funding to allow the Guard to continue its role in our
    military's Total Force Concept and as a source of trained
    manpower in disaster relief situations. Generals, I have a few
    questions for you this morning and I look forward to your
    responses. Thank you Mr. Chairman.

        Senator Stevens. We welcome you, and look forward to
    working with you as you carry out your role, and we are
    delighted to have you as the head of the Guard Bureau.
        Thank you.
        General Davis. Mr. Chairman, Senator Inouye, Senator Bond,
    Senator Cochran, I would like to thank you first of all for the
    opportunity to come over here and represent the almost half-a-
    million folks in the Army and Air National Guard. In addition,
    we would like to thank you for the outstanding support you have
    provided us in the past, and we have had the opportunity to
    work with you and your staffs this year and thank you for
    considering the Guard a vital and key part of our national
    defense. We think it is.
        Senator Stevens. Before the two of us leave this thing, you
    or your successor is going to have four stars. We believe he
    should be equal to the other Chiefs.
        Senator Bond. Amen
        Senator Cochran. Amen.
        General Davis. Thank you, sir. We think we are very vital
    and key to the common defense of the United States, and we work
    very closely with our parent services and with Congress, and I
    would like to say we feel from our viewpoint we have been very
    successful because of that partnering and that relationship, so
    we would like to thank you all for the support you have given
    us.

                                     Guard

        From the very founding of our country the Guard has been a
    very key element of our national defense, and we feel we are
    still fulfilling that role. As recently as yesterday, the
    Presidential selective reserve call-up (PSRC) requested some of
    our National Guard members to come over and support actions in
    Kosovo, and we have that capability, and we have combat-ready
    forces both in the Army Guard and the Air Guard. In the Army
    Guard we have got, in combat forces we represent about 52
    percent of the total Army combat capability, the total Army
    capabilities in the Guard. In combat support, 42 percent, in
    combat service support, about one-third.
        Just last year, 1998, the Army National Guardsmen were
    deployed, about 22,000, almost 23,000 were deployed forward,
    and that is really about the equivalent of a division from
    World War II, in over 90 countries, so we are a vital and key
    part of the total Army.
        In the Air National Guard we have a significant portion of
    the capability in the Guard, 100 percent of the continental air
    defense, and the theater airlift, 49 percent, and 43 percent of
    the aerial tankers, and that is why, when the services became
    so tapped, the requirement to have a Presidential selective
    recall.
        The issue there is, we have had a large number of our
    people involved in tanker support. I was over in France a few
    months ago with the air refuelers out of Hawaii, and they were
    there on a volunteer basis. We have been doing it on a
    volunteer basis. We are at a point now where, with the
    additional requirements, volunteerism is not serving us as well
    as it has in the past, and we are concerned about the ability
    to meet all of those requirements.
        So the Air Force requested it, and because of the
    additional requirements we had from the commander in chief
    (CINC) through the process of the system we will be providing
    some additional folks over there, and General Weaver will get
    into a little more detail on that, but really about 2,100
    people, about 1,200 of those personnel will be called up, and
    the first increment of the 33,000 will be Air Guard refuelers.
        But they, too, play a very key and vital role. On almost
    any given day we have got about 5,000 Air Guardsmen who are out
    there in the system, and roughly 400 of our 1,100 airplanes,
    and with this call-up we will have even more folks involved.
        Our readiness, though, like our active components, is a
    function of resources. We can only do what we have the dollars
    to do and the people to do and the equipment to do, and we have
    done very well in that arena, and we are improving, and with
    the additional dollars we received last year we will be able to
    do a lot more in training, particularly in the Army Guard.
    General Schultz will get into that.
        We cannot only train our people. In the past few years we
    have had the option of our young people either going to school
    or training with their units. We did not have enough dollars to
    pay, and enough work days to support both, so it was an either-
    or choice. This year, for the first time in the last 3 or 4
    years, we are going to have the dollars to do it. We have the
    dollars in 1999 to do it, so that is a major increase in
    improvement, and General Schultz will get more into that.

                               prepared statement

        I would like to defer to our two Directors if I could,
    please, at this point, sir, and then come back and make some
    closing remarks regarding youth programs and counterdrug and
    all that. I would like to have General Schultz, the Director of
    the Army Guard, proceed.
        [The statement follows:]
                Prepared Statement of Lt. Gen. Russell C. Davis
                                    foreword
        This Posture Statement of the Chief, National Guard Bureau is a
    document that looks to the future. In the Annual Review of the Chief of
    the National Guard Bureau we document our recent past and record our
    progress. These two publications together provide an overview of where
    we have been, where we are, and most importantly, where we are going in
    the National Guard of the next century.
        This Posture Statement is a tool designed to forecast the National
    Guard stance for the future and the role we play in both the ``shape''
    and the ``preparation'' phase of our national security strategy. Our
    corporate task is to generate and sustain combat readiness for the
    defense of our country across the full spectrum of missions the
    National Guard must perform. This posture statement will outline how we
    intend to prepare ourselves for that mission.
        The National Guard faces many challenges in our future, including
    recruiting, force structure, modernization, and readiness, as well as
    the struggle to match resources to requirements. We have faced similar
    challenges for over 362 years. We have remained a relevant institution
    for America since our founding and will remain so as we move into the
    new millennium.
        At our country's founding we were the primary vehicle for our
    nation's defense. Congress in the Selective Training and Reserve Act of
    1940 stated that the National Guard was an integral part of the first
    line of defense of our country. We remain the primary ready reserve
    force for our nation today. Being in the forefront requires an
    integrated, balanced, full-spectrum combat capability as we face the
    challenges before us. Emerging missions such as National Missile
    Defense, countering Weapons of Mass Destruction, and grappling with the
    challenges of Homeland Defense require a combat-ready and fully
    prepared National Guard. An increasing operations tempo, with
    integrated operations in the Sinai, Bosnia, and Macedonia, are just a
    few examples of the challenges the National Guard faces.
        Today the Army National Guard provides a full measure of that
    capability, with over half of its Total Army Combat forces (54
    percent), almost half of the Combat Support capability (46 percent),
    and about one third of the Combat Service Support forces. In fiscal
    year 1998, the Army National Guard deployed 22,990 soldiers to over 90
    countries for a total of 672,679 man-days.
        The Air National Guard likewise is a full partner in providing
    about half of our nation's theater airlift capability (49 percent),
    almost half (43 percent) of our aerial tanker forces, a third of our
    fighters (33 percent) and a forth (25 percent) of our Air Rescue
    resources to name just a few. In a typical month the Air Guard will
    deploy thousands of people and hundreds of airplanes (Feb. 1999, 5,142
    personnel, 553 aircraft) to work hand in glove with the Total Air Force
    team.
        Our challenge is to maintain the National Guard's relevance and
    historical contribution to America. As we enter the new century, the
    National Guard will be taking on new responsibilities and utilizing new
    tools and methods as part of a strategic plan to maintain our role as a
    key player in the National Military Strategy. The reader will find a
    comprehensive look at our Army, Air and Joint National Guard programs
    and objectives in these pages. This report will outline how we intend
    to meet those objectives and will document some of the challenges we
    face.
        By providing the Congress with this Posture Statement we are
    renewing the strong partnership between the National Guard and our
    legislators in teaming to make America ready and prepared for the
    challenges of the 21st century. The National Guard is near the zenith
    of its abilities thanks to the support and concern of Congress for our
    nation's security, safety and military preparedness.
                             a full-spectrum force
        The mission of the National Guard, first and foremost, is to be
    prepared to deploy as a member of this nation's military team to fight
    and win. We are organized, we are trained, and we are equipped to do
    that mission. As a consequence of that organization, that training and
    that equipment, this nation also gets a full spectrum force capable of
    operations in support of our neighbors, our community, our states and
    our nation anywhere we are needed.
        The Army and Air National Guard is engaged everywhere we turn. Our
    people were on the spot in Tennessee as the tornadoes struck. Our
    Coronet Oak airlifters were there in Central America even as Hurricane
    Mitch hit. National Guard members are in Central America as part of
    ``Operation Amigos''. The damage our close neighbors in Central America
    have endured will set them back decades, and we are in for a sustained
    effort in the coming years helping them to rebuild and recover.
        The National Guard is on virtually every continent, with thousands
    of people and hundreds of airplanes at any given time. We are active in
    countering drugs, building relations with emerging democracies and
    fighting terrorism. We are on the line in Bosnia and Kuwait, and we are
    guarding America's security on land and in the sky. The Guard is active
    in space missions, we are on the arctic ice, we are inventing
    information operations, helping disadvantaged youth, is committed to
    diversity and supporting our airmen and women at their workplace and at
    their homes. Our men and women have compiled an outstanding safety
    record on the ground and in the air. The list of accomplishment goes on
    and on.
        We are poised to join the fray in Kosovo, Southwest Asia, in Korea,
    or anywhere we are needed. By now, it goes beyond saying that the Army
    will not deploy, will not fight, and will not prevail without the Army
    National Guard. And the Air Force will not fight, and cannot defeat
    this nation's foes without the Air National Guard.
        The National Guard remains a great organization that has worked
    hard at staying at the top of its game. Despite downsizing and budget
    cuts, we have maintained and honed our capabilities and remain a
    dependable, and an outstanding national asset. The Air National Guard's
    close and seamless partnership with the Air Force of the future, the
    ``Expeditionary Aerospace Force'' and the Army National Guard's
    integrative partnership with the Total Army ensures our continuing
    relevance to America. Our continued focus on the combat imperative will
    be our strength as we cross the threshold of the new century, the first
    of a new millennium. This focus will ensure that the National Guard of
    the United States will continue to be the full spectrum force that this
    nation must have to support our neighbors at home and our National
    Security Strategy anywhere in the world we are called.
                  committed to the national security strategy
        The National Guard is a full player in the U.S. military
    contribution to meeting the three core objectives of the National
    Security Strategy; enhance our security, to bolster America's Economic
    prosperity, to promote democracy abroad. Today the threats to our
    nations' security are diverse in a continually changing international
    security environment. We must continually prepare ourselves for the
    regional or State-centered threats particularly the states that are
    actively improving upon their offensive capabilities such as the
    planned use of nuclear, biological, or chemical weapons. Transnational
    threats exist like terrorism, drug trafficking, illicit arms
    trafficking, environmental damage, and attacks on our national
    information infrastructure i.e. ``cyber attack'' on such areas as
    electrical power, and transportation systems. With the rise in
    technological capabilities rogue states, and terrorist organizations
    pose a threat, along with a more diverse methods for foreign
    intelligence collection from sensitive government networks. The Army
    and Air National Guard is well positioned to prepare for and respond to
    these divergent threats. We continue our rich history of contributions
    to the nation, state and local community. Our focus is on ensuring the
    appropriate readiness capability to meet and adapt to the changing
    security environment.
        A central thrust of the National Security Strategy is to ``enhance
    relationships with key nations around the world to combat transnational
    threats to common interest''. U.S security is enhanced by promoting
    activities that shape the international environment by promoting
    regional security, democratic governance, basic education, and through
    peacetime engagement. The National Guard State Partnership Program is a
    premier example of the value in conducting training exercises,
    cooperative exchanges, and assistance with our allies and friends. Our
    efforts help to deter aggression an coercion, promote regional
    stability, reduce threats, and at the same time serve as role model for
    militaries in emerging democracies, highlighting our rich history of
    strong civilian control of the military and rich heritage of the
    citizen soldier and airman.
        The National Guard provides an affordable component of our National
    Defense thus contributing to one of the main objectives of our
    strategy: bolstering America's economic prosperity. The strength of our
    nation for shaping the international environment and responding to the
    full spectrum of threats and crises depends on additional capabilities
    and technologies. At the heart of being a capable force is the quality
    of our people. We place a high priority on recruiting, training,
    education, quality of life, and retention initiatives and programs.
    Soldiers and airman need to be afforded the opportunity to receive the
    appropriate training and education to perform a variety of specialized
    skills. We plan to keep up with the pace of technology advances in
    intelligence, surveillance, reconnaissance, Space, Missile Defense. We
    remain the foundation of the military contribution to National Security
    Emergency Preparedness. As the reader will see throughout this
    document, our contribution is accomplished within the context of the
    three elements of the National Military Strategy: shape the
    international environment, respond to full spectrum of crises, and
    prepare now for an uncertain future.
                       joint force and joint vision 2010
        The National Guard is a quality force that will continue to make a
    difference at the national, state, and community levels well into the
    next millennium. We will do that as we always have by: Capitalizing on
    Creativity; Leveraging Technological Opportunities; and Achieving
    Maximum Effectiveness.
        The Army and Air National Guard are the lineal descendants of the
    early colonial militia with the constitutionally mandated role of
    defending the United States against its enemies--both foreign and
    domestic. As we enter the 21st Century, this purpose will continue to
    be relevant as the National Guard's fundamental organizing principle.
    Joint Operations will shape the way the U.S. military forces think,
    plan, and fight. In time of conflict our military forces must be able
    to fight and win against any aggressor. In time of peace, our forces
    will serve our Nation in a variety of ways including deterring
    conflict, and when necessary, provide peacekeeping and assist with
    humanitarian needs. The joint vision foresees all elements of the U.S.
    military manned, led, trained, organized, and equipped to prevail
    across all levels of operations.
        The National Guard is engaged in the operational concepts of
    Dominant Maneuver, Precision Engagement, Focused Logistics, and Full
    Dimensional Protection.
        The four operational concepts set forth in Joint Vision 2010,
    conducted in an atmosphere where information superiority prevails, will
    have far reaching impact on all the military services to include the
    National Guard.
        In Dominant Maneuver we will achieve the multidimensional
    application of information, engagement, and mobility capabilities to
    position and employ widely dispersed joint air, land, sea, and space
    forces to accomplish the assigned operational tasks.
        In Precision Engagement we will employ a system of systems that
    will enable our forces to locate the objective or target, provide
    responsive command and control, generate the desired effect, assess our
    level of success, and retain the flexibility to reengage with precision
    when required.
        In Full Dimensional Protection we will control the battlespace to
    ensure our forces can maintain freedom of action during deployment,
    maneuver, and engagement, while simultaneously providing multi-layered
    defenses for our forces and facilities at all levels.
        In Focused Logistics we will achieve the fusion of information,
    logistics, and transportation technologies to provide rapid crisis
    response, to track and shift assets even while enroute, and to deliver
    tailored logistics packages and sustainment directly at the strategic,
    operational, and tactical levels of operations.
        The Key Ingredients in accomplishing these operational concepts
    are: High Quality People; Innovative Leadership; Joint Doctrine; Joint
    Education & Training; Agile Organizations; and Enhanced Material.
        The synergy of the Joint Vision 2010 operational concepts,
    underpinned by information superiority and technology innovation, will
    greatly enhance the National Guard's capabilities in high intensity
    conventional military operations and move U.S. forces toward full
    spectrum dominance. These concepts will apply across the entire
    spectrum of military activity. The National Guard must therefore be
    prepared for a wide range of operations. Our history of adapting to a
    broad spectrum of missions will assist us greatly as we focus on
    acquiring the latest technology, being well equipped, well trained, and
    ready to support and defend the interests of our Nation.
                              army national guard
        Army National Guard soldiers contributed throughout the world to
    operational missions in over 70 countries in fiscal year 1998. These
    fine men and women further took time from work and from home to serve
    in over 300 domestic support missions.
    Active Component/Army National Guard (AC/RC) Integration
        As we approach the 21st Century we in the Army National Guard find
    ourselves more integrated into the Total Army. Efforts to achieve
    greater Active Component and Army National Guard integration have been
    successful. The primary focus is on the Army National Guard Division
    Redesign Study (ADRS), the Active Component/Reserve Component (AC/RC)
    Integrated Divisions, Divisional Teaming and the AC/RC command exchange
    initiative.
                Division Redesign Study
        Its implementation will result in a large scale conversion of the
    Army National Guard combat force structure to Combat Support and Combat
    Service Support assets. A result of the 1995 Commission on Roles and
    Missions recommendation that the Army reorganize lower priority Reserve
    Component forces to fill force shortfalls in higher priority areas.
    This Division Redesign will eliminate the potential shortfalls in
    personnel required for the Total Army to implement the National
    Military Strategy. The most recent Total Army Analysis and the Total
    Army Requirements Determination results in a greater percentage of Army
    National Guard combat forces receiving relevant warfighting missions.
                Integrated Divisions
        The associated AC/RC integrated division initiative will place six
    Army National Guard combat brigades under the leadership of two Active
    Component Divisional headquarters in an unprecedented degree of AC/RC
    force structure integration. The first of two integrated divisions will
    become a reality before the end of this year.
                The Teaming Concept
        Even further integration will be realized through division teaming
    effort, which has resulted in direct training affiliations between
    several Army National Guard combat divisions and their Active Component
    counterparts. Under the teaming concept partnered divisions will
    conduct joint planning, training, and readiness assessments. The
    divisions will team their resources for rapid response to requirements
    across the full spectrum of military operations.
                Command Exchange Program
        Finally, the placement of several Active Component Officers in
    Guard command positions has increased understanding on all sides. Last
    year fourteen Active Component officers were placed in command of
    National Guard units and this year for the first time, two National
    Guard officers will be placed in command of Active Component
    battalions.
        Each of these efforts will ensure that the Total Army greets the
    new century as a seamlessly integrated land combat force.
    The ``Readiness'' Focus
        Our focus is on readiness to fight and win our nations wars as part
    of the Total Army. Understanding the following goals of our Army
    National Guard is essential to knowing how we meet our overall
    objective of readiness.
                Manning the Force
        Recruiting and retaining quality people in the Army National Guard
    is a critical leadership and management function. The goal is to
    develop and execute a Total Army integrated human resource system to
    acquire, manage, compensate, retain, and transition people enabling the
    Army National Guard to provide combat ready units. Leadership emphasis
    on recruiting and retaining quality personnel will enable the Guard to
    meet the emerging personnel challenges of the new century. We must also
    strive to ensure that full time manning and support levels are
    sufficient to ensure the necessary readiness levels in our units.
                Organizing for Success
        Provide the maximum possible number of missioned Army National
    Guard units based on the Total Army Analysis (TAA) process with
    required support as part of the Army's total force structure required
    to achieve directed capabilities. Army National Guard Division
    Redesign, the AC/RC Integrated Divisions, the Teaming Concept, and the
    Command Exchange Program noted above are key factors in organizing for
    success. Additional studies like the Total Army Analysis 07, Total Army
    Requirements Determination process, and the Reserve Component
    Employment Study 05 will examine the increasing use of the Reserve
    Components.
    Equipping the Guard
        Obtain and distribute mission capable equipment to optimize Army
    National Guard unit readiness, modernization, and force relevance.
    State-of-the-art weapons (M109A6 Paladin 155 mm systems, Multiple
    Launch Rocket Systems, M2AODS Bradley Infantry Fighting Vehicles,
    Avenger Air Defense systems, and Patriot Air Defense systems), aircraft
    (UH-60L, OH-58D, AH-64A, Search & Rescue UH60Q, Light Utility
    Helicopter), communications devices, night vision devices, laser aiming
    sights, and other equipment such as the Enhanced Position Location
    Reporting System, and tactical wheeled vehicles are necessary if Guard
    units are to seamlessly interface with their Active Component
    counterparts.
    Sustaining the Force
        Provide appropriate and efficient support for personnel, equipment
    and operations to accomplish all Army National Guard missions. The
    management of readiness is conducted by prioritizing resources to the
    units that are designated as ``First to Deploy''. While high priority,
    early deploying units such as the Combat Support and Combat Service
    Support Force Support Package units have recently received adequate
    funding, other units like the eight Army National Guard combat
    divisions have been working hard to meet minimal readiness goals.
    Despite innovative resource management initiatives, Unit Status Reports
    indicate a decline in overall unit readiness. Despite the fiscal
    constraints the Army National Guard Divisions are moving forward. The
    49th Armored Division has been selected as the command and control
    Headquarters for an Operation Joint Forge rotation in fiscal year 2000.
    The Army National Guard has successfully demonstrated its capability to
    conduct Home Station Mobilization throughout the past three years as
    eighteen units mobilized and deployed in support of Operation Joint
    Endeavor/Guard/and Forge. Resourcing the Force is critically important.
    The Army National Guard represents approximately 9.4 percent of the
    Army's budget and 2.4 percent of the Department of Defense budget.
    Ensuring the Army National Guard receives the proper resources results
    in a Guard that is capable, affordable, and accessible for responding
    to both state and federal missions. Further efforts by the Army
    National Guard to meet sustainment goals involve providing efficient
    and seamless logistical operations.
                Knowledge Infrastructure
        The infrastructure necessary to capture and create information and
    knowledge, store it in an organized manner, improve it, clarify it and
    make it accessible in a usable format to anyone who needs it is a
    combat imperative. The Army National Guard focus on modernization and
    increased utilization of knowledge infrastructure will decrease the
    time spent on maintenance of databases, and increase the speed in which
    units can be mobilized and deployed. The key to this effort is the
    design, maintenance and upgrading of a system that will be cross
    dimensional within the Active and reserve components. The Reserve
    Component Automation System (RCAS), an automated information management
    system, provides the Army the capability to more effectively
    administer, manage, and mobilize the Army National Guard and the Army
    Reserve.
                Training the Force
        A primary mission of the Guard is to produce ready units to meet
    the National Military Strategy. This requires the development of
    strategies and the planning, acquisition, distribution and execution of
    resources to train individual, leader and collective tasks in the live,
    virtual and constructive environments. National Guard members actively
    attend training and education activities at all of the Army's Combat
    Training Centers and at the Guard Aviation Training Sites. The Guard is
    actively increasing its participation at the National Training Center,
    Joint Readiness Training Center, and the Combat Maneuver Training
    Center. The Army National Guard operates four Aviation Training Sites
    that are utilized by the Total Army. Leveraging simulation technology
    for increased training efficiency, has received ever increasing
    attention for the potential it offers.
                Quality Installations
        These provide state of the art, environmentally sound, community
    based power projection platforms that integrate all functions required
    to sustain and enhance unit readiness, quality of life, and community
    support. This goal needs particular attention because many facilities
    do not yet provide the community based power projection platform
    required. The Army National Guard operates over 3,100 armories in
    nearly 2,700 communities in all 50 states, Puerto Rico, the Virgin
    Islands, Guam and the District of Columbia. The Army National Guard
    federally supports the operations and maintenance of more than 19,000
    training, aviation, and logistical facilities. The Army National Guard
    promotes and accomplishes a sound environmental program focusing on
    compliance, conservation, and restoration efforts.
                Missioning the Guard
        A mandatory goal is 100 percent of all Army National Guard force
    structure federally missioned. All Modified Table of Organization and
    Equipment (MTOE) units and Table of Distribution and Allowances (TDA)
    structure included within Time Phase Force Deployment Data (TPFDD) or
    supporting the Commander in Chief (CinC) war plans. While Guard men and
    women continue to answer the call for numerous state missions
    throughout the year they are increasingly supporting the national
    missions at home and abroad supporting the Theater Commanders in Chief.
                Quality of Life
        We must provide an environment and culture that promotes equal
    opportunities for all, fosters environmental stewardship and provides
    for the safety, health and fitness of the force, families and
    communities. Keys to supporting our men and women of the National Guard
    are a strong Family Support Program, obtaining strong employer support,
    effective risk management techniques, motor vehicle safety & accident
    avoidance, ground & aviation safety, and a vibrant Occupational Health
    Program, and facilities that reflect the pride, contribution and
    importance of the Guard members.
                               air national guard
        Air National Guard personnel routinely rotate with active duty
    personnel in Central America, Europe, Southwest Asia, Southeast Asia,
    Middle East, and the Balkans in support of National Security Strategy
    objectives. In 1998 more than 7,000 Air National Guard members
    contributed to the U.S. Forces in Europe mission.
        People remain our most vital resource, they are the heart of our
    organization. The ability of the Air National Guard to meet its federal
    and state obligations is directly related to the quality of our human
    resources. The responsibility of the quality of our people rest with
    the organization's leadership. Strength in leadership and quality
    planning is the foundation for successful force management. Our
    objective is the achievement of the highest possible level of
    competence and accomplishment by each member of our organization. This
    will result in the successful accomplishment of our missions.
        We are continually building upon our leadership training to ensure
    the entire spectrum of elements throughout the personnel life cycle of
    our guardsmen receive considerable attention. These elements focus on:
      --Accession of personnel.
      --Development of each member both technically and professionally.
      --Effective utilization of our people.
      --Rewarding airmen who demonstrate potential, and preparing them for
            greater responsibility.
      --Soundly managing the retirement or separations of each individual.
        The willingness of our airmen and women to volunteer as an able
    force is well documented. With this record we must remain committed to
    our people's quality of life, such as pay, health care, community
    programs, family programs, upgrading our base resources and equipment.
    Currently recruitment rates are stable, but retention has declined
    slightly. An improved compensation and benefits package will help
    ensure competitiveness in recruitment and prevent the decline in
    retention. Strengthening Educational benefits such as the successful
    Montgomery GI bill and student loan repayment programs will assist our
    efforts. The leadership of the Air National Guard has developed a Four
    Year Roadmap to increase the focus on the important elements of a
    successful force: Year of the Enlisted (1999), Year of the Family
    (2000), Year of the Employer (2001), Year of Diversity (2004).
    Readiness
        It is required for rapidly responsive aerospace power projection.
    This is achieved and maintained through a wide spectrum of tasks, such
    as worldwide deployments and training exercises. Nearly 90 percent of
    our flying units are rated ``C-1'' or ``C-2'' (fully mission ready).
    While our forces are ready our weapon systems are aging. The average
    age of our aircraft fleet is over 25 years old. This causes increased
    requirements for maintenance and repair, which drives the cost up
    higher. Overall mission capable rates are down from 73.3 percent to
    67.3 percent since fiscal year 1994. Today, Air Guard operations tempo
    is nearly at Desert Shield and Desert Storm levels. Additionally an
    increase in tempo is expected with the establishment of the
    Expeditionary Aerospace Force. Personnel tempo requirements are a
    concern. An internal re-engineering effort is underway to ensure a
    fully missioned rapid tailorable response force. We are ready but we
    must modernize.
    Modernization
        It is a critically needed investment in readiness and enhancing our
    Expeditionary Air Force capabilities across our core competencies of:
        Aerospace Superiority.--F-22 air superiority fighter, AMRAAM/AIM-9X
    missiles, Space Based Infrared System, and support Evolved Expendable
    Launch Vehicle program.
        Global Attack.--Support B-2 and B-1 conventional munitions upgrade
    program.
        Rapid Global Mobility.--C-17, modernization of C-5, C-130, and KC-
    135, GANS/Global Air Traffic Management
        Precision Engagement.--Joint Air-to-Surface Standoff Missile, Joint
    Direct Attack Munition. Joint Standoff Weapon (JSOW). Conventional Air
    Launched Cruise Missile, Wind Correction Munitions Dispenser, and the
    Joint Strike Fighter.
        Information Superiority.--Military Satellite Communications,
    Unmanned Aerial Vehicle's, JSTARS, and Computer Network Defense.
        Agile Combat Support.--GCSS and other integrated information
    systems.
        These core competencies integrate well into joint campaigns,
    providing the most rapid and effective way to achieve national
    objectives, while reducing risk to our men and women serving our
    nation. Modernization requirements require us to focus on these
    additional programs and equipment: F-16 (NVIS), (SADL), GPS & CUPID
    program for F-16 Block 30 aircraft, Precision Attack Targeting System
    (PATS), F-16 Unit Training Device (UTD), F-15 Fighter Data Link (FDL)
    seamless with the Total Air Force, Airlift refueler modernization KC
    135E fleet, C-130-H3 simulator development in partnership with the Air
    Force Reserve, A-10 8 mm color video recorder and avionics upgrades,
    Support arena-Combat Communications units with Theater Deployable
    Communications, and acquisition of the F-22 fighter. Investment into
    Military Construction and real property maintenance accounts will
    enhance our readiness capabilities.
        The Air National Guard seeks to ensure its attack assets will have
    the latest and best in precision attack capability (PGM) and
    battlefield information equipment. Our objectives are to ensure all Air
    National Guard aircraft have the latest, best defensive and anytime all
    weather equipment. Further modernization of our tanker fleet and C-130
    enhancements are also needed. We must have adequate funding for
    replacement parts, especially engines, and ``mid-life'' upgrades for
    our weapon systems. We expect to obtain new F-22 and C-17 systems as
    they are produced. Space and information warfare offer enormous
    opportunity for new Air National Guard missions. We are actively
    engaged with Space Command and the newly formed C-2 Agencies to seek
    out these missions. Modernization is the lifeblood of the Air National
    Guard. New mission opportunities exist in our own back yards working in
    concert with the Army National Guard in response to potential attacks
    against our homeland. The Air National Guard will be working together
    with the Army National Guard on this mission utilizing the security,
    disaster preparedness, medical, intelligence, communications, and
    services organizations.
    Expeditionary Aerospace Force
        It is the vision for how the Total Force will organize, train, and
    equip to meet national security challenges of the near future. Ten
    Aerospace Expeditionary Force packages are being developed from the air
    and space resources and manpower from the Total Air Force. Aerospace
    Expeditionary Force (AEF) units will serve on a 15 month rotation cycle
    with 90 day vulnerability windows for deployment. During each
    vulnerability window, two AEF's will be available for short notice
    taskings and/or scheduled forward presence missions. The objective is
    to increase predictability and stability to the lives of our airmen.
    These forces will be light lean, lethal forces that exploit speed,
    range, flexibility, and responsiveness of aerospace power. The
    Expeditionary Aerospace Force provides a full spectrum of capabilities
    that can be tailored to meet the requirements of the Theater Commander
    in Chief's (CinC's).
    Air National Guard Objectives--An overview
        Missions.--Assume missions that support national and state
    requirements and take maximum advantage of the unique characteristics
    of the Air National Guard while maintaining its traditional character.
        Force Structure.--Proactive participation in the development of
    force structure to support national policy while preserving the
    constitutionally based militia role of the Air National Guard.
        People.--Recruit and retain personnel capable of performing
    assigned missions.
        Leadership.--Develop leaders to effectively operate in a multi-
    service, multi-national environment while continuing to effectively
    lead and manage peacetime activities within their state and unit.
        Training.--Provide effective and efficient training that develops
    and maintain a high level of proficiency and readiness to meet federal
    and state mission requirements.
        Basing.--Provide operationally, politically, economically and
    environmentally acceptable bases to support force structure and mission
    requirements.
    New Missions
        The Air National Guard is postured to take on new roles and
    missions. The Guard is focused on re-engineering units to meet the
    requirements of the National Security Strategy.
      --Satellite and Space Platform Communication
      --Space-Based Infrared System
      --Expeditionary Forces
      --Command and Control
      --Battlefield Management
      --Information Warfare--Information Assurance
      --Unmanned Aerial Vehicles i.e. Global Hawk
      --Intelligence i.e. Imagery Analyst Unit & Tactical Reconnaissance
      --New Force Protection requirements
      --Preparedness and Response to Weapons of Mass Destruction
    Core Values
        They are the fundamental beliefs that propel our organization's
    behavior and decision making. Values define our culture, and in so
    doing, direct our efforts. Our success depends upon the individual
    National Guard man or woman who consistently demonstrate these values;
    Integrity First, Service Before Self, Excellence in All We Do,
    Commitment to the Citizen Soldier Heritage, Strength of Our Diverse
    Family.
    Safety Record
        At the forefront of everything we do in the Air National Guard is
    safety. The number of class A flight mishaps has been half of what they
    were the last five years. The number of ground mishaps has reduced at a
    similar rate. An emphasis on accountability both personal and peer has
    helped bring about this change. Although this reduction is a noteworthy
    achievement the challenge remaining is to eliminate all flight,
    weapons, ground mishaps. The Air National Guard has embraced the
    operational risk program, another tool to assist our commanders in
    assessing risk and determining the value of each mission. For our
    safety program to be as effective in the future we must insure it is an
    integral part of every organization. Our units logged in excess of
    370,000 flying hours while making 1998 our safest flying year in Air
    National Guard history.
                           joint force contributions
        As stated previously, our focus on the combat imperative combined
    with our presence not only in the community, but as part of the
    community, results in a capability unique in this nation. Our ability
    to operate across the full spectrum of operational requirements make us
    an unparalleled national asset. Outlined in this section are missions
    that the National Guard can and will perform as an outgrowth of our
    ability to fight and win our nations wars.
    Domestic Preparedness
                Natural and Man-made Disasters
        The Army and Air National Guard provides military support
    (personnel and equipment) to civil authorities (MSCA) during periods of
    emergency. The National Guard works very closely with the civil
    authorities who have primary responsibility for emergency planning,
    response and recovery. Emergencies that could result in military
    support are:
        Natural.--Any hurricane, tornado, storm, flood, high water, wind
    driven water, tidal wave, earthquake, volcanic eruption, landslide,
    mud-slide, snowstorm, drought, fire, or other catastrophic event not
    caused by man.
        Civil.--Any man-made emergency or threat which causes or may cause
    substantial property damage or loss such as civil disturbances or
    government sector strikes. The National Guard response efforts to the
    Los Angeles riots, the Oklahoma City bombing, and the TWA Flight 800
    crash are examples of civil response actions.
        Other.--An emergency in any part of the United States which
    requires assistance to supplement local or State efforts to save lives
    and protect property, preserve public health and safety, or to avert or
    lessen the threat of a disaster.
        Governors authorize non-federal, National Guard, military support
    to civil authorities by their respective Executive Order. The Governor
    of a State or jurisdiction uses the National Guard in State Active Duty
    status to carry out these missions. These missions are of a temporary
    nature and are terminated as soon as civil authorities are capable of
    handling the emergency. The Governors normally employ their State
    National Guard in a State Active Duty status under their State
    constitution and State laws. Under legal agreements between the States
    and under federal guidelines, States may provide mutual assistance to
    other States during times of emergency. In these circumstances, the
    State where the National Guard is being sent must request mutual aid
    from the sending State, in accordance with an interstate compact.
        The National Guard Bureau maintains daily contact with States that
    are conducting military support operations. The National Guard Bureau
    also coordinates through the DOD Director of Military Support with the
    Federal Bureau of Investigation, the Federal Emergency Management
    Agency and the other agencies responsible for Emergency Support
    Functions established in the Federal Response Plan.
        In fiscal year 1998, over 375,771 National Guard workdays were
    expended in response to 308 call-ups. Beginning with Typhoon Paka, and
    ending with Hurricane Georges, National Guard members provided the work
    force and equipment needed to help local communities recover. In all,
    eight States suffered the effects of hurricanes, six States were struck
    by tornadoes, and Guam was hit by a typhoon. Florida and California
    provided significant support to State officials fighting wildfires.
    Three State National Guard units provided drought relief to farmers.
    Floods devastated six States and winter storms struck nine States.
    National Guard units from three States provided support to law
    enforcement agencies. Most State National Guard call-ups do not
    escalate to federal declarations.
                Weapons of Mass Destruction--Enhancing The National Guard's
                        Readiness To Support Emergency Responders In
                        Domestic Chemical And Biological Terrorism Defense
        The Guard strongly supports a fully coordinated, integrated and
    clearly focused national program that assists State and local agencies
    with preparing for and responding to Weapons of Mass Destruction (WMD)
    terrorism. The National Guard acknowledges that nationwide many State
    and local elected officials and other responsible authorities are
    working diligently, within their limited resources, to prepare their
    respective jurisdictions for defense against chemical and biological
    terrorism. The emergency response community has been actively engaged
    in chemical and biological incident preparation. They have aggressively
    pursued, with limited success, the resources, equipment and training
    they have determined to be most critical to their abilities to protect
    lives and safeguard order.
        The National Guard maintains a long tradition of providing support
    to civil authorities from its earliest days in colonial Massachusetts
    in 1636 to the more than 300 call-ups across the Nation in response to
    natural disasters or civil unrest in 1998.
        With its broad-based doctrine and training, force structure,
    infrastructure and information architecture, the National Guard stands
    ready to support the emergency response community to prepare for and
    respond to a WMD incident.
                Current National Guard WMD-Related Capabilities
        The National Guard possesses numerous capabilities that can
    directly assist in addressing the threat of WMD attack. These range
    across the response spectrum and encompass prevention, management, and
    mitigation efforts.
        Some of these capabilities are discussed below.
        Rapid Assessment and Initial Detection (RAID) Detachment.--Ten, 22-
    member RAID Detachments are currently being formed (one per Federal
    Emergency Management Agency Region). They are projected to be fully
    operational by January 2000. The RAID Detachment's mission is to assess
    a suspected biological and/or chemical event in support of a local
    incident commander. They will have the ability to advise civilian
    responders and emergency management officials regarding appropriate
    actions, and facilitate requests for assistance to expedite arrival of
    additional military State and federal assets.
        RAID (Light) Detachments.--The National Guard is also establishing
    44 RAID (Light) Detachments in each of the 44 States and territories
    not receiving an initial RAID Detachment in 1999. The RAID (Light)
    Detachments will provide limited chemical and biological response
    capability.
        Reconnaissance and Decontamination Teams.--Nuclear Biological &
    Chemical Reconnaissance and Patient Decontamination elements are
    programmed to be organized, trained and equipped within the National
    Guard and other Reserve Components in fiscal years 1999 and 2000. The
    Army National Guard will have 8 Reconnaissance and up to 42
    Decontamination Platoons. The Air National Guard will have 8
    Reconnaissance and 21 Decontamination Detachments.
        The National Guard's WMD Training Organizations.--The National
    Guard supports a number of excellent training organizations. Originally
    chartered to train or facilitate the training of military and law
    enforcement officials for the Counterdrug mission, these institutions
    are being made more robust to support WMD training initiatives.
        Distributive Training Technology Program (DTTP).--The Army National
    Guard's GuardNet XXI, along with the Air National Guard's Warrior
    Network combine to become Network America. This network is the backbone
    for the delivery of voice, video and other data, to include the DTTP,
    to the National Guard. It can be made available to civilian emergency
    responders, hospital and emergency medical personnel desiring to
    participate.
        National Guard Bureau Liaisons to Major Organizations.--In addition
    to the temporary positions currently being staffed at the NDPO, Federal
    Emergency Management Agency, and Department of Justice/Office of
    Justice Programs, the National Guard has also placed personnel in
    temporary positions at the U.S. Army Training and Doctrine Command,
    U.S. Army Soldier and Biological Chemical Command.
        National Guard Bureau Partnerships with Civilian Training
    Initiatives.--The National Guard, as a community-based military force,
    is a partner in building better and safer communities. These
    partnership projects encompass education, training, and preparedness.
                Y2K The Year 2000 Challenge
        The National Guard in its role as the primary federal reserve of
    the Army and Air Force has undertaken an extensive Y2K testing and
    surety program which meets the directives of the Department of Defense.
    The testing programs range across areas such as personnel pay and
    benefits, engineering, logistics, security systems, communications, and
    operations. A concentrated effort is being made on developing and
    testing contingency plans. We will validate through an exercise that
    the National Guard Bureau in Washington D.C. will be able to provide
    the federal government the capability for command communications to the
    54 states, territories and the District of Columbia. We will verify our
    ability, even with potential Y2K disruptions, to call-up or Federalize
    the National Guard soldiers and Airmen should they be needed to respond
    to a National Emergency.
        One of the main challenges facing the National Guard is the
    difficulty in acquiring replacement parts for Y2K sensitive items. Y2K
    compliance enables the Guard to perform its warfight mission as well as
    be able to respond to the call of our Governors for a natural or
    manmade disaster. The National Guard is taking actions similar to all
    public and private sector organizations to maintain their viability to
    conduct their business with minimum or no interruption as a result of
    the Y2K issue.
        The National Guard Bureau has asked the National Guard forces in
    the all 54 states, territories, and the District of Columbia to ensure
    Y2K compliance so they are capable of performing their federal
    missions. The Guard units will be ensuring they are Y2K complaint so
    they can also answer the call of the respective Governors. Several
    States have indicated they will alert elements of the Guard in case
    they are needed for a Y2K incident response. An alert or call to State
    active duty remains a prerogative of the respective Governors. Units
    are focusing on awareness, identifying infrastructure, and conducting
    contingency plan walks. A ``systems walk'' to ensure the unit
    continuity of operations plan covers all critical items. An ``interface
    walk'' to identify linkages with off-base entities to verify their
    ability to provide continuous support. It is critical the National
    Guard achieve Y2K compliance to ensure we can meet the requirements of
    our elected civilian leaders, State and federal, today, on New Years
    eve and into the next millennium.
                National Missile Defense
        Our nation is currently developing a policy on a missile defense
    system. This policy will likely call for the future deployment of a
    missile defense system capable of defending the United States of
    America against a limited ballistic missile attack. The Army and Air
    National Guard is capable of making a significant contribution to this
    mission with our active service components. This would be a progression
    of the historic Nike Air Defense sites and Coast Artillery mission of
    the Army National Guard and the current contribution the Air National
    Guard makes to U. S. Space Command.
                Information Protection
        The Army and Air National Guard will contribute to the recently
    created 22-member Reserve component team called the Joint Web Risk
    Assessment Cell (JWRAC) to monitor and evaluate Department of Defense
    Web sites to ensure the sites do not compromise national security by
    revealing sensitive defense information. The Secretary of Defense
    approved the development of the team, which will comprise two full-time
    Reservists and 20 drilling Reserve and National Guard personnel.
        The Defense Information Systems Agency started the cell on March 1,
    1999. The JWRAC will search and purge defense web sites for information
    and trends of data that could be used to breach security or pose a
    threat to defense operations and personnel. In addition, team members
    will evaluate web-site content to ensure compliance with departmental
    policies, procedures and best practices. Two full time personnel will
    manage the daily operations. They will perform operational scheduling,
    manage training, and ensure the team maintains technical proficiency.
        A fundamental requirement for the conduct of all military
    operations is information superiority, which is ``the capability to
    collect, process, and disseminate an uninterrupted flow of information
    while exploiting or denying an adversary's ability to do the same.''
    Information superiority will be enabled by the enhanced command and
    control, fused source intelligence, dominant battlefield awareness and
    offensive and defensive information warfare. The Army and Air National
    Guard is poised to make a significant contribution to this joint
    effort. Recruitment of personnel that are on the leading edge of the
    communications technology transformations will benefit the Nation in
    many areas. Personnel who may have traditionally not considered the
    military as a full time career may very well be interested in
    contributing to our nation as members of the Guard and Reserve. This
    role will increase the citizens' involvement in national security while
    at the same time making a contribution in both offensive and defensive
    information operations strengthening and protecting our nation, state
    and local community communication infrastructure.
                Counternarcotics and Drug Interdiction
        Counterdrug operations make up an important part of all three
    National Guard mission areas. In addition to demand reduction programs
    we foster within our communities, we have both Title 10 and Title 32
    responsibilities in the war. Under Title 10, the Army and Air National
    Guard help theater CinCs detect and monitor attempts to smuggle
    narcotics into the United States and its Territories from their
    regions. We do this by deploying individuals and units to locations
    abroad where they perform ground-based and airborne surveillance,
    provide linguistic support, augment intelligence staff, and assist in
    other ways. Our recurring deployments to Panama for Operations Coronet
    Nighthawk and Constant Vigil are familiar examples of this.
        Under Title 32, the National Guard supports various Federal, State,
    and local law enforcement agencies in counternarcotics and drug
    interdiction operations within the country and Territories. We furnish
    equipment, manpower, and special expertise that other agencies have
    come to rely on heavily. We have been involved in the past few years in
    campaigns against drug smuggling, distribution, and domestic
    cultivation. From assistance with cargo inspection at U.S. ports of
    entry to providing aerial reconnaissance and aerial photo-
    interpretation for interception operations and the location of illicit
    domestic drug crops, Guard members are recognized as key players on the
    U.S. counterdrug team.
        During 1998, militia men and women--all volunteers--participated in
    more than 16,981 counterdrug missions and helped seize over 1,146 tons
    of processed narcotics and amphetamines, 9,070 vehicles, 15,175
    weapons, and 46,100,997 marijuana plants. More than 90,908 arrests were
    made and $240 million in currency confiscated in these operations.
    Guard members' status as agents in their State exempts them from the
    posse comitatus restrictions that prevent other U.S. military forces
    from being used in a similar way. Counterdrug support is performed in
    addition to regular mission training and it enhances basic military
    skills.
                Drug Demand Reduction (DDR)
        Narcotics are of the most pervasive and deadly threats our nation
    faces, and we in the Army and Air National Guard take the war
    seriously. We actively support a wide range of operations that enhances
    the Drug Demand Reduction Mission. The National Guard is positioned in
    hometown America, and with this we know our schools and neighborhoods
    are also battlefields where the drug war is waged. We either win or
    loose this war one life at a time. Our militia men and women are
    trained to provide support to community-based drug demand reduction
    initiatives in our local areas.
        Our members and their families participate in many of the over
    8,000 separate drug demand reduction programs underway throughout the
    nation. These programs focus on community coalition building,
    presenting anti-drug messages, developing leadership within vulnerable
    groups, and promoting high standards of citizenship. The men and women
    of the National Guard are stable role models committed to a ``zero
    tolerance policy'' toward illegal drugs for themselves, their families
    and for others with whom they serve. They are, and will continue to
    make, a positive change in the communities where they live and work.
        The National Guard Drug Demand Reduction program supports parents,
    community leaders, drug coalitions, and other agencies by providing
    facilitators for strategic planning sessions, parenting courses to
    those in need, drug-free individuals to speakers' bureaus, and trainers
    to those who present an anti-drug message to America's at-risk youth.
    Youth prevention programs like ``Adopt-A-School'' or ``Lunch Buddy''
    programs along with ``Ropes'' Confidence and esteem building courses
    have National Guard members serving as mentors and tutors.
        We continue our three year partnership with the Community Anti-Drug
    Coalitions of America (CADCA) to support the fight against drugs in our
    local communities. We along with CADCA also produce a series of Drug
    demand reduction teleconferences concerning coalition development,
    mentoring, issues affecting our youth, and drug trends in our Schools.
                National Guard Youth Programs--Enriching the lives of our
                        children throughout the nation
        ChalleNGe & Youth Conservation Corps.--The ChalleNGe program and
    Youth Conservation Corps first received congressional authorization and
    appropriations for a three-year pilot program under Section 1091(a)--
    National Defense Authorization Act for Fiscal Year 1993. The pilot
    programs purpose was to determine whether life skills and employment
    potential of youths who dropout of secondary school could be
    significantly improved through military-based training, including
    supervised work experience in community service and conservation
    projects, and to determine the feasibility and cost-effectiveness of
    such a program for the National Guard. The legislation allowed the
    National Guard Bureau to enter into agreements with state governors to
    conduct programs targeting youth in general and youth at-risk in
    particular. Preventive rather than remedial, the programs aim at
    providing young people with the values, self esteem, life skills,
    education and self-discipline to succeed as students and adults. States
    are selected on interest and ability to host a program at a National
    Guard site.
        In fiscal year 1998, 32 United States Code, Section 509--authorized
    the National Guard ChalleNGe Program on a permanent basis. Five new
    programs were added. Participating states provide matching funds
    beginning at 25 percent and increasing 5 percent each subsequent fiscal
    year until a 40 percent matching fund is reached in fiscal year 2001. A
    positive step forward occurred in the fiscal year 1999 legislation
    authorizing the National Guard ChalleNGe Program expansion and Tier 1
    status for graduates making them eligible for enlistment in the armed
    forces with a GED upon successful completion of the program.
        Why the National Guard? Conduct of youth programs is consistent
    with and fits the community role and state mission of the National
    Guard. The required infrastructure is already in place to support such
    a program and the National Guard has the availability of trained
    personnel in areas of organization, planning, execution, self-
    discipline and leadership. The program adds value America.
        ChalleNGe: Program consists of a five-month residential phase and a
    one-year post-residential mentoring phase for youth between 16 and 18
    years of age who are not in trouble with the law, drug free,
    unemployed, and a high school dropout. The goal: through military-based
    training, significantly improve life skills and employment potential.
        ChalleNGe is based on eight core components that support the
    development of the whole person in terms of mind, body, and personal
    values. Emphasis on self-discipline, self-esteem, education, and
    development of healthy life-styles.
        ChalleNGe Eight Core Components: Leadership/Followership;
    Responsible Citizenship; Community Service; Life Coping Skills; Job
    Skills; Health, Sex Education and Nutrition Academic Excellence;
    Physical Education.
        Youth Conservation Corps: Currently the Commonwealth of Kentucky is
    operating a Youth Conservation Corps program. It is a six week
    residential version of the Youth Challenge Program.
        Youth ChalleNGe Participating States and Current Enrollment: Alaska
    200, Arizona 224, Arkansas 200, California 200, Colorado 200, Georgia
    400, Hawaii 200, Illinois 800, Louisiana 350, Maryland 200, Mississippi
    248, Missouri 200, New Jersey 200, New York 200, North Carolina 200,
    Oklahoma 200, South Carolina 200, Virginia 200, West Virginia 200,
    Wisconsin 200.
        New ChalleNGe Programs and Enrollment for fiscal year 1999:
    Massachusetts 200, Michigan 200, Oregon 208, Montana 200, Puerto Rico
    288, Texas 200, and potentially the State of Indiana.
                STARBASE
        STARBASE represents the Science and Technology Academies
    Reinforcing Basic Aviation and Space Exploration Program. It was first
    created at Selfridge Air National Guard Base in Michigan with an
    initial grant from Kellogg Foundation in 1989. In fiscal year 1993
    Congress appropriated $2 million to the Air National Guard to establish
    five STARBASE sites. The program was authorized as a 10 U.S.C.
    Sec. 2193, science and mathematics education improvement program.
    STARBASE is a nonresidential program for students in the grades K-12.
    It provides them with real-world applications of math and science
    through experiential learning, simulations, and experiments in aviation
    and space related fields. The program targets ``at risk'' (minority,
    female, and low socioeconomic) students, and utilizes instruction
    modules specifically designed to meet the State's math and science
    objectives. The STARBASE program is conducted by the National Guard in
    14 states and territories (California, Florida, Iowa, Kansas, Michigan,
    Minnesota, North Carolina, Oklahoma, Oregon, South Dakota, Texas,
    Vermont, Wyoming, and Puerto Rico). The Air Force Reserve and the U.S.
    Navy now operate two STARBASE programs each. This year the District of
    Columbia Air National Guard will commence a STARBASE program.
    Additionally three other reserve component sites are coming on line in
    fiscal year 1999: Marine Corps Air Station Beaufort, SC; Barksdale AFB,
    LA (USAFR); and Navy Station San Diego, CA.
                Family Support
        Families can exist without the National Guard, but the National
    Guard cannot exist without families. The mission of the Family Program
    is to establish and facilitate communication, involvement, support, and
    recognition between National Guard families and the National Guard in a
    partnership. An informed and committed National Guard family helps
    support a strong National Guard. And, a strong National Guard helps
    maintain a strong America.
        The National Guard Family Support program provides a national
    network linking over 3,200 communities within 54 states, territories,
    and the District of Columbia. This network includes 54 full time State
    Family Program Coordinators, who work with military points of contact
    and volunteers at every organizational level. Volunteers are the heart
    of the program. Augmenting this network as required by the situation,
    approximately 3,000 National Guard retention and recruiting personnel
    in the Air and Army National Guard are tasked with the mission of
    supporting the National Guard Family Program.
        The program focuses on promoting family member volunteerism,
    development of family support groups at the local level, and
    facilitating family readiness training. It further increases the
    awareness of the family importance to the National Guard and to the
    success of its mission, notifying families of available benefits,
    entitlements and services. The program provides the infrastructure that
    supports the process of identifying, defining, addressing, and
    resolving issues that impact the balance between National Guard service
    and family stability.
        Families partner with our members and units to build the strongest
    possible Family Support Programs. Partnership is crucial and mutually
    beneficially to State missions and the national defense. It emphasizes
    family involvement as a partnership with the unit, fosters a sense of
    well being, and strengthens a sense of community with shared benefits
    and responsibilities. Partnership creates an environment where we work
    together to overcome obstacles that would hinder or impede our mission
    competency.
                Employer Support
        The Army and Air National Guard support a strong relationship
    between our soldiers and airmen and their respective employers. A great
    deal of assistance is provided by the National Committee for Employer
    Support of the Guard and Reserve (NCESGR). This Department of Defense
    organization works with employers, reservists, military leadership, and
    54 volunteer committees to build and maintain a strong base of support
    for the role of the National Guard, and Reserve in our Nation's
    defense. Throughout the years, studies have shown that nearly a third
    of the men and women surveyed about why they were leaving the National
    Guard and Reserve indicated ``employment conflict'' as the reason for
    their separation. The NCESGR established a nationwide network of local
    employer support volunteers, organized within each state, commonwealth,
    territory, and the District of Columbia to bring the message to all
    employers, large and small, in cities, towns, and rural areas that the
    National Guard and its individual members are full players in the
    defense of our nation. By explaining the missions of the National Guard
    and Reserve and by increasing public awareness of the role of the
    employer, they develop a dialogue among employers, the state employers
    support committees, and local National Guard and Reserve unit
    commanders and members. Now, with thousands of volunteer executives,
    senior government representatives, educators, and military personnel
    serving on local Employer Support of the Guard and Reserve committees,
    a wide variety of informational and assistance programs designed to
    capture the attention of employers and win their support is in place.
    The objectives of the employer support program are to acquaint
    employers with the vital role of the National Guard and Reserve, the
    positive impact of employing National Guard members, and the changing
    role and missions of the Reserve components.
                Diversity is our Strength
        All of our men and women in the National Guard are truly
    outstanding. It is important that our leadership understand the
    strength in our diverse force. Workforce diversity is an organizational
    behavior that acknowledges and values differences and similarities
    among people and how the differences can work to improve the
    organization. It also means understanding the organizational
    environments with an appreciation for gender, culture and ethnic
    lifestyles. The members of the National Guard ask only for their
    dignity and our respect. It is important that we offer them that
    respect as leaders, but it is more important that the environment we
    help create, makes respect mutual--up, down and sideways. Our citizen
    soldiers also have a right to fair and equitable treatment. Guard men
    and women serve with as much dedication as anyone in uniform. They may
    be part-time or full time, in operations, logistics or in support but
    they are always Guardsmen. They may be male or female, and of any race
    but they are always our fellow soldiers and airmen. They may believe in
    different creeds, religions, or may be from foreign land, but they are
    all citizen-soldiers and airmen. Our objective is to continually
    improve our goal of teamwork, reaching out to every member to work
    together and accept each others differences. The differences we have
    make us stronger by the diversity of viewpoints.
                Promoting Democracy Abroad through Engagement--The National
                        Guard State Partnership Program
        An influential component of the National Guard's Federal role is
    that of Preventive Defense. We are uniquely positioned to promote
    democratic practices abroad and find ourselves in frequent demand for
    nation-building programs. Under the auspices of the National Guard's
    State Partnership Program, National Guard personnel participate in
    various commands sponsored engagements.
        The National Guard participates in programs such as the North
    Atlantic Treaty Organization's Partnership for Peace program, European
    Command's Joint Contact Team Program, Southern Command's Traditional
    CINC Activities Program, and similar activities sponsored by the Office
    of the Secretary of Defense, the Joint Staff and various State
    Department Agencies.
        There is good reason to summon the National Guard when America
    wants to promulgate its best to the world. Our professional militia
    provides an influential example of how a military force can be
    effective while demonstrating military subordination to civil
    authorities. This is the ultimate embodiment of democratic values,
    particularly to the states of Eastern Europe, and Central and South
    America, as these countries work to break with repressive pasts.
        National Guard personnel and the militia system under which they
    operate are models for the role of a military in a democratic society.
    They illustrate how a military force of the people remains committed to
    the people. The wealth of civilian skills our Guard members take
    overseas--and the diversity of non-military professions they
    represent--are important, giving our men and women a versatility and
    credibility as goodwill ambassadors that no other American military arm
    can match.
                The State Partnership Program
        This program builds long standing institutional affiliations and
    people-to-people relationships with nations while establishing
    democratic military organizations. By utilizing National Guardsmen in
    their dual roles as citizen-soldiers, the partner nation's military
    leaders are encountering highly trained and cost-effective members of
    the United States Armed Forces. Guardsmen serve as role models in
    making a compelling case for the ideals of democracy, professionalism,
    and deference to civilian authority. They also demonstrate the
    necessity and economy of Reserve Components with the ability to react
    immediately to civil and military emergencies.
        Much of the Guard's success in promoting democracy abroad is the
    result of the State Partnership Program. To date thirty states and
    Puerto Rico have joined as Partners or Associate Partners in extending
    the hand of friendship from grassroots America to twenty-seven
    countries that would emulate our ways and institutions. Foreign
    military personnel and political leaders visit our country to observe
    how the National Guard operates within the State and Federal framework.
    National Guard members reciprocate with visits to the partner country
    in which they provide detailed information on civil-military topics
    like search and rescue, medical support, disaster response, military
    law, and family programs. Importantly, these are more than just
    military-to military contacts. By involving governors, mayors, and
    their staffs; State legislatures; and the families and friends of our
    Guard men and women in building these bridges of friendship, we promote
    political ``buy-in'' on national security strategy at the local level.
    We also foster cooperation between the Federal and State governments in
    other productive ways.
        Partner Nations and States are currently developing partnership
    events for the coming year. Some events being discussed are multi-
    national disaster preparedness exercises, search and rescue exercises,
    environmental operations, military justice, Non-Commissioned Officer
    development programs and civil/military cooperative programs.
        Tasking in this area is growing rapidly. During 1998, exercise New
    Horizons took place in Ecuador. Approximately 1,300 Army and Air
    National Guard members in addition to troops from the U.S. Marine
    Corps, Air Force, and Ecuador's Armed Forces participated. During the
    exercise the joint forces built schools and clinics; and provided
    logistical, medical, aviation, and security support to the project.
    State partners (Illinois, Texas and, Ohio,) helped 3 countries (Poland,
    Czech Republic, and Hungary) prepare to become NATO members. Three
    states conducted civic/opinion leader visits to their partner
    countries. These trips included state governors, state legislators,
    congressional staffers', educators, business leaders, and guard
    employers. Tennessee traveled to Bulgaria to observe Cornerstone 98.
    California went to Ukraine to observe Peaceshield 98 and Arizona went
    to Kazakhstan to plan for a Regional Workshop, just to name just a few
    of the activities conducted under this valuable bilateral linkage.
        Sharpening the military skills of our militia men and women while
    demonstrating their ability and willingness to enhance the quality of
    life for hemispheric neighbors is just one benefit of this timely and
    innovative engagement. We are firmly committed to sustaining this
    effort which has our Guard men and women helping to shape emerging
    democracies, prepare for and improve readiness by engaging in
    international events and activities, and respond as our national
    security needs require.
                               concluding remarks
        I have attempted to underscore the importance of our Total Force as
    a sterling example of what we have done, and what we will continue to
    do together. In essence, we have a contract to receive federal money to
    enable us to be ready to fulfill our duty if called to federal service.
    The National Guard has met the conditions of that contract in every
    instance. The federal money we receive combined with our state funding,
    also results in a valuable state resource to respond to the needs of
    our communities and our neighbors when needed.
        The French poet and philosopher Charles Peguy said, ``freedom is a
    system based on courage''. I think he meant not just battlefield
    bravery, but the broader idea of the courage to act on our beliefs, and
    to exercise our freedoms in the face of tyranny. Our history of courage
    is one of over 362 years of standing up for our country and defending
    these ideas in every war and conflict in our history. The privilege
    exercised to fight for this nations ideals, its liberty and its
    freedom.
        At the onset of World War II, twenty Guard divisions were called up
    to flesh out and to break trail for the total of 89 divisions that
    would ultimately fight the Axis powers. Those National Guard divisions
    proved as they have done on so many previous occasions that the Army
    Guard can fight and prevail in combat. Their sacrifices reaffirmed and
    validated once again the courage, the dedication, and the value of the
    National Guard to our nation.
        By 1950 the Army had shrunk to only ten divisions and fewer than
    600,000 soldiers. There were real readiness issues then too. We will
    soon celebrate the fiftieth anniversary of the ``Forgotten War'' which
    took place on the Korean Peninsula. General E.C. Meyer, the former
    Chief of Staff of the Army served as a company commander with the 40th
    Division, a Guard Division, in that conflict. He was part of the Total
    Force before there was a Total Force. Eight Army Guard Divisions were
    called up, and two (the 40th and 45th) saw combat in that conflict.
    Once again the contribution of the National Guard was critical to
    achieving this nations objectives at a crucial time in our history.
        Over 45,000 Air Guardsmen were called as well, with two Wings in
    combat (the 116th and the 136th). Among other things, The Korean War
    was our first racially integrated combat experience. It is a forgotten
    war, but it was an illustration of the forgotten lessons of
    unreadiness. It got off to an ignominious start with the famous ``Task
    Force Smith''--a military debacle which illustrated our lack of
    preparedness, only a few years after we had been victorious in World
    War II. We must not forget the lessons of what a lack of readiness can
    cost in American lives.
        The Guard was recognizably under-utilized in Vietnam, possibly out
    of an administration concern of public acceptance and commitment to
    that conflict. It gained an unearned reputation as a refuge the
    unwilling. That old stain reappeared when we went to the Gulf War
    without the Army Guard combat units in the belief by some that the
    Guard could not meet the standard. Others believed that the Army
    National Guard was good enough to fight alongside of their active
    component. That was almost a decade ago. Today we are even more ready
    than we were then in a lot of ways, but not as ready in some others.
    Primarily due to the funding issues noted in the September 1998 and
    January 1999 testimony of the Chairman of the Joint Chiefs of Staff and
    the Service Chiefs the Guard has endured readiness challenges in the
    recent past, but this year and the future looks brighter.
        The Guard is prepared for our primary responsibility as the first-
    line, ready-reserve defense force for America. It is the mission we
    have always had, and today it remains our first responsibility. We will
    organize, train, and equip, ourselves for this fundamental mission.
    That will require that we focus on force structure, end-strength, and
    above all, the resourcing and funding to do the job. There are a
    plethora of important jobs to perform. We have a reservoir of vast
    experience, capable of taking on the missions of countering Weapons of
    Mass Destruction, Homeland Defense, Information Operations, and
    paramount--maintaining our combat role. Our military is shrinking in
    size, but faces a dynamic of change that includes preparing for two
    major regional conflicts (MRCs), managing day to day operations, and
    small scale operations, evacuations, humanitarian and peacekeeping
    missions.
        We need to permanently drive home the importance of being prepared
    for war as a way of preventing war. The commemorations we celebrate are
    a way for us to remind ourselves of the price of freedom. But we need
    more than commemorative reminders. We need more than rhetoric. We need
    a strong, ready, capable National Guard to effectively contribute to
    our state and federal missions. On behalf of the over 450,00 men and
    women of your National Guard, I assure you that we are a capable,
    accessible, and affordable component of our Nation's Defense.
    STATEMENT OF MAJ. GEN. ROGER C. SCHULTZ, DIRECTOR, ARMY
                NATIONAL GUARD

                                   Readiness

        Senator Stevens. General Schultz.
        General Schultz. Mr. Chairman, distinguished members of the
    Senate Appropriations Committee, first, I must begin by
    thanking you for your support with last year's appropriation,
    and I want to assure you that the money that we realized in
    fiscal year 1999 has been sent to all units, OPTEMPO dollars in
    particular, to get inside of our readiness-related requirements
    and bring up those later deploying units to readiness
    conditions, because we clearly have sliced off the bottom, in
    the tiering models that we use, those units that simply are not
    the first to deploy.
        As has already been mentioned, there is concern about
    integrating the Guard into the Army, and I want to assure this
    committee that we have taken significant steps across the
    Guard's adjutant generals and commanders across our
    organizations to become better integrated into the Army, and we
    are making progress in that endeavor, and as we look at the
    activity, both mission sets at home and abroad, the Guard is
    busier than ever.
        Last year, we deployed to 70 countries. This year we have
    already deployed to 70 countries, and as we further integrate
    the Army Guard into the Army, what we are realizing is
    compatibility of systems, modernization obviously comes along
    with additional requirements for our tanks and our Bradleys and
    other weapons systems to be compatible with or to interoperate
    with those units that we will deploy to war with, and so
    interoperability is an issue, modernization is an issue. We are
    making some progress with those requirements.
        Communications systems are a classic example of one of our
    priorities, so that as our units are deployed on shorter
    notices than ever, with the missions that are currently
    pending, those kinds of priorities you will see us explaining
    in terms of preferences.
        I think another example of integration, Mr. Chairman, is
    the 49th Division. A Texas-based Guard division headquarters
    will assume responsibility, command and control-type
    responsibility for a multinational division north in Bosnia.
    March of 2000 is the transfer of authority, and we are on the
    path, with 1,300 soldiers from the Army National Guard, 11
    States contributing to that mission set, so we are clearly
    integrated in ways that many never thought would be possible.
        And as I talk about these kind of conditions, I must
    underscore the issue that has already been raised, and that is
    the concern about readiness. Seventy-one percent of the units
    in the Army National Guard today are deployable, standing by
    for short-notice missions. The units that are not prepared for
    their mission today are primarily found in our combat
    divisions. We have eight combat divisions in the Guard, and the
    readiness condition of those units is simply a factor of
    affordability. It means we just do not have enough money, or
    have not realized enough money or distribution in the past to
    keep those units set at baseline platoon-level maneuver skill
    requirement. We are making progress in fiscal year 1999, as I
    have already outlined, and we expect in the next 12 months,
    perhaps 18 months, we will have our Guard divisions back to
    what we consider to be minimum deployable level, and that is a
    readiness condition, C-3.
        Mr. Chairman, the top priority for the Army National Guard
    today, in terms of quality of life, and also showing early
    signs of readiness implications, is full-time staffing within
    our units. Today, we are short 3,000 military technicians in
    our units across the Guard. We are short over 1,600 active
    Guard and Reserve soldiers in our units across the Guard.
        We have examples in readiness reports today where
    commanders are saying, I have the repair parts on the shelf,
    but I do not have the full-time staff to put the parts on the
    aircraft, or on the systems, or the vehicles, so full-time
    staffing is showing signs of clear implications for some of the
    lower readiness conditions that I have already talked about.
        Along with figures, as I talk with you about our
    requirement for fiscal year 2000, there is a costing model
    adjustment in those figures of $57 million, so it is not just
    increasing technicians and active Guard and Reserve soldiers,
    it actually is adjusting a costing model error that we had in
    our formulas.
        Mr. Chairman, I tell you that the Army National Guard will
    meet end strength as of September 30 of this year. We are above
    program slightly, so we are clearly on track, and we are, of
    course, 59,000 today. At the end of the year we will be at a
    congressionally directed 357,000.

                               prepared statement

        Mr. Chairman, readiness is our priority. We are standing by
    for missions should we receive them. Thank you for your
    support.
        [The statement follows:]
                Prepared Statement of Maj. Gen. Roger C. Schultz
                               director's summary
        As I look back on fiscal year 1998, I am proud of the indelible
    spirit of our soldiers. They traveled around the world performing
    missions in more than 70 countries. They aided neighbors and friends in
    over 300 domestic support missions, using 374,115 man-days. Each
    soldier took time from work and home to do the job and achieve the
    mission. Six of these fine soldiers, our Army National Guard Soldiers
    and NCOs of the Year, are highlighted later on in this document. They
    are representative of the hundreds of thousands who selflessly balance
    the demands of employer, family and Army Guard duty.
        In our efforts to support these fine soldiers, we have worked
    toward improving the readiness of our units today, while looking
    forward into the 21st century to define the requirements of our nation
    and the support it will need from its Army National Guard.
        Most significant among our efforts have been the successes in
    achieving greater integration with our counterparts in the Active
    Component and Army Reserve. Included in those efforts are two
    Integrated Divisions, Command Exchange programs, and the Teaming
    concept. Each of these is detailed a little later, but all work
    together to help our Army National Guard become a critical part of a
    unified, seamless Total Army.
        In telling the story of the Army National Guard in fiscal year
    1998, it is important to understand the goals that guide our
    organization. These, goals, which form the framework for our Army
    National Guard Posture Statement, include: Manning; Organizing;
    Equipping; Sustaining; Knowledge Infrastructure; Readiness; Training;
    Quality Installations; Missioning; Quality of Life; and Resourcing.
        This year's Army National Guard Posture Statement provides an
    overview of our efforts in each of these critical areas. While each
    goal is important we must remember that each looks toward achieving our
    overall objective--readiness. As the ``Federal Reserve of the Army'',
    the Army National Guard has as its paramount mission the readiness to
    fight and win the nation's wars as a part of the Total Army.
        While our successes through fiscal year 1998 have been many and
    varied, the force responsible for those successes has remained
    constant. Army National Guard men and women, along with their families
    and employers, richly deserve credit for the progress we have seen in
    the past year. Without the efforts of Guard soldiers--sometimes at
    their own time and expense--our readiness challenge would be far
    greater than is the case today. Without the selfless support of Guard
    families across the nation, our readiness as a military force would
    suffer. Finally, without the understanding and support of Guard
    civilian employers, the men and women of the Guard would be simply
    unable to provide the dedicated service for which they are so well
    known. Readiness in the Army National Guard is evaluated in many ways,
    but the core reason for our success has never varied. The Guard is
    people.
                             organizational history
        The Army National Guard predates the founding of the nation and a
    standing national military by almost 150 years. America's first
    permanent militia regiments, among the oldest continuing units in
    history, were organized by the Massachusetts Bay Colony in 1636. Since
    that time, the Guard has participated in every U.S. conflict from the
    Pequot War of 1637 to Operation Desert Storm in 1991.
        A subject of extensive debate and compromise during the
    Constitutional Convention of 1787, the National Guard finds its formal
    origins in provisions of the United States Constitution. This language
    reads, in part:
        ``to provide trained units and qualified persons available for
    active duty in the armed forces, in time of war or national emergency
    and at such other times as the national security requires, to fill the
    needs of the armed forces whenever, during, and after the period needed
    to procure and train additional units and qualified persons to achieve
    the planned mobilization, more units and persons are needed than are in
    the regular components.''
        In addition to the constitutional charter, a variety of statutes
    have been enacted over the years to better define the Guard's role in
    our nation's affairs. Detailed federal guidelines, both statutory and
    regulatory, govern the organization and operation of the National
    Guard.
        While federal regulations dictate much of the Guard's organization
    and function, control of Guard personnel and units is divided between
    state and national levels. For example, the Federal government
    determines the number of authorized National Guard personnel and the
    unit mix available across the country. However, the States reserve the
    authority to locate units and their headquarters and Federal officials
    may not change any branch, organization, or allotment located entirely
    within a State without the approval of the governor. This state-federal
    relationship in Guard management and control continues to evolve today.
        Where the colonial period saw Guard activities largely confined
    within the nation's borders, later 19th century conflicts found the
    Guard contributing to the nation's defense both at home and abroad. The
    first half of this century witnessed the foundation of the modern Army
    National Guard, as Guard soldiers contributed greatly to U.S.
    participation in both World Wars. The Guard's evolution continued in
    the years following the Second World War with participation in Korea
    and in several Cold War mobilizations. Finally, the Guard has found a
    dramatically increasing role at home and throughout the World during
    the 1990s.
        The Army National Guard of today and tomorrow fulfills a vital
    national defense role. Strategic planning integrates Guard units into
    crucial combat, combat support, and combat service support elements of
    our nation's military forces. These elements provide a trained,
    capable, and cost effective military force, able to provide rapid
    augmentation, reinforcement, and expansion in time of call-up or
    mobilization. The National Guard has emerged as a well-armed fighting
    force and an important component in the nation's emergency preparedness
    network, the only organization with this dual responsibility.
                      the guard today--current initiatives
        As the Army National Guard (ARNG) approaches the end of the
    century, we find the pace and variety of operations steadily
    increasing. These rapidly occurring events include tremendous strides
    in Active Component-Army Guard integration, on-going support to
    peacekeeping efforts in the Balkans, Counter-Drug activities and
    Homeland Defense.
    Active Component/Army National Guard Integration
        Efforts to achieve greater Active Component/Army National Guard
    integration met with far reaching success during the course of fiscal
    year 1998. At the heart of these intensive efforts were the Army
    National Guard Division Redesign (ADRS) effort, the AC/ARNG Integrated
    Divisions, Divisional Teaming and the AC/ARNG command exchange
    initiative. ADRS will result in a large scale conversion of ARNG combat
    force structure to Combat Support and Combat Service Support assets
    needed by the Total Army to implement the National Military Strategy.
    The associated AC/ARNG Integrated Division Initiative will place six
    ARNG combat brigades under the leadership of two Active Component
    Divisional headquarters in an unprecedented degree of AC/ARNG force
    structure integration. Even further integration will be realized
    through the division teaming effort, which has resulted in direct
    training affiliations between several ARNG Divisions and their Active
    Component counterparts. Finally, the placement of several AC officers
    in Guard command positions has increased understanding on all sides.
    These efforts, described further in Organizing for Success will ensure
    that the Total Army greets the new century as a seamlessly integrated
    land combat force.
    The Army National Guard in Bosnia
        Fiscal year 1998 saw a continuation of Guard support to the U.S.
    Stabilization Force (SFOR) in the Balkans. During the course of the
    year, over 2,000 Guard soldiers supported this effort under the
    auspices of OPERATION JOINT GUARD and OPERATION JOINT FORGE as detailed
    in Missioning the Guard.
        As in previous years, Guard efforts in Bosnia required the
    deployment of troops and equipment from every ARNG division as well as
    numerous smaller organizations. These deployments complimented the
    efforts of Active Component troops in the region by providing personnel
    with expertise in areas such as aviation, fire support, public affairs,
    and other specialties found largely in the Reserve Component. Guard
    support to the U.S. mission in Bosnia provides a representative look at
    increasing AC/RC integration and cooperation.
    Counterdrug Program
        Throughout fiscal year 1998 the ARNG continued to provide
    assistance to law enforcement agencies and community based
    organizations in support of the President's National Drug Control
    Strategy. The bulk of the ARNG effort supported State Governors' plans
    for use of Guard personnel in drug interdiction and demand reduction
    activities while in Title 32, United States Code status. The ARNG
    provides a wide range of counterdrug support capabilities, including
    cargo inspection assistance at ports of entry, aerial and ground
    reconnaissance, intelligence analysis, training, construction of border
    roads and fences and production of over 33,000 map products. The Guard
    is also providing training to law enforcement agencies and community
    based organizations at the National Interagency Civil-Military
    Institute in California the Multi-jurisdictional Counterdrug Task Force
    Training Program in Florida and the Regional Counterdrug Training
    Academy in Mississippi. Army National Guard Drug Demand Reduction
    activities in fiscal year 1998 reached millions of people as a result
    of support to communities throughout the nation. The ARNG provided
    552,543 mandays in support of 13,212 domestic counterdrug missions
    during the year.
        Although the law enforcement community and community coalition
    demand for National Guard counterdrug support is increasing, the Guard
    counterdrug resources will remain static over the next several years.
    Despite this challenge, the ARNG plans to increase emphasis on drug
    demand reduction support in accordance with the priorities established
    by the National Drug Control Strategy.
    Homeland Defense
        Another emerging Guard mission area involves the growing Homeland
    Defense requirement. This emerging threat area encompasses a variety of
    potential missions, including such far reaching requirements as
    National Missile Defense and supporting State and Federal agencies in
    combating terrorism on U.S. soil.
    Weapons of Mass Destruction (WMD)
        In keeping with the emerging Homeland Defense mission, one of the
    most important new initiatives for the Army Guard involves Weapons of
    Mass Destruction (WMD) consequence management. Operating from a 1996
    Congressional mandate, the Department of Defense and the Army National
    Guard are working diligently to assist local first responder personnel
    and agencies nationwide with identifying requirements needed to respond
    effectively to potential terrorist use of WMD on U.S. soil.
        Efforts in this important mission area, which are described in
    detail in the Missioning the Guard segment, are already bearing fruit.
    A landmark WMD study was completed during the year and ten Army
    National Guard WMD consequence management teams have been established
    across the United States.
                Background
        The Congressionally mandated ``Defense Against Weapons of Mass
    Destruction Act of 1996'' charged the Department of Defense (DOD) with
    the domestic anti-terrorism mission. Congress directed that a program
    be established ``to improve the capabilities of state and local
    emergency response agencies [to deal with the WMD threat]. The National
    Guard provides the States with a ready asset to augment first
    responders.''
        In keeping with this sentiment, the Emergency Response Assistance
    Program (ERAP) was signed into law as a part of the Fiscal Year 1997
    Defense Authorization Act. This law mandated that DOD assist state and
    local emergency responders in training and the loan of appropriate
    equipment. This legislation further designated the National Guard as a
    means of support for these state and local organizations.
        The Deputy Secretary of Defense, in November 1997, directed the
    Under Secretary of Defense for Personnel and Readiness to oversee the
    development of a plan to integrate all reserve components into DOD
    plans for consequence management response to domestic Weapons of Mass
    Destruction (WMD) attacks. The Under Secretary of the Army was given
    the lead for plan development. The objective of the DOD plan is to
    improve the military capabilities required to effectively support
    local, State, and Federal level consequence management response to
    domestic terrorist attacks involving WMD. Because of its experience in
    working with state and local organizations, the National Guard is
    uniquely positioned to support these agencies and is actively engaged
    in the implementation of the DOD plan.
                Information and Architecture
        Information management and an effective communications architecture
    will be critical parts of the Guard WMD consequence management effort.
    The Army National Guard is fielding the Emergency Information System
    (EIS) software as part of the Reserve Component Automation System
    (RCAS) to provide a variety of standardized emergency management
    functions, including near real-time mapping, communications and
    integrated information flow at the state and local levels. EIS is the
    Federal Emergency Management Agency's (FEMA) standard for emergency
    information management. The Guard will also use the Reserve Component
    Automation System to interface with EIS as it integrates ARNG
    capabilities with those of FEMA. The National Guard Distributive
    Training Technologies (DTT) Network (See Training Technologies--
    Distance Learning) is also available to other agencies for WMD and
    related instruction on a space available basis.
        With the full integration of FEMA and ARNG information
    architectures, the Guard communications infrastructure can function as
    a national communications and information highway and training support
    vehicle to assist a myriad of local, state and federal agencies
    preparing for or responding to a WMD incident.
                Infrastructure
        A central reason for the emerging Guard WMD mission lies in the
    unique Guard domestic support capability. With a wide variety of
    communications and logistics assets in all 54 states and territories,
    the Guard continually responds to a variety of natural and man-made
    disasters. At the implementation level, the Guard can provide planning
    and exercise coordination for disaster response training, as well as
    assisting in the procurement of urgently needed equipment.
    Additionally, in 45 percent of the states, the Adjutant General is also
    the State Emergency Management Officer, thus providing a direct link
    between the Guard and the state agencies it supports. Finally, when the
    Guard completes EIS communications integration, every Army National
    Guard armory and Air National Guard air base can serve as a Joint
    Operations Center or Disaster Field Office if necessary. The
    combination of Guard infrastructure and state level integration will
    greatly improve the nation's ability to deal with the use of WMD and
    all other disasters as well.
                Training
        No effort as broad and far-reaching as the anti-terrorism/WMD
    program can be effective without proper training for those involved in
    the program. The National Guard Bureau intends for its Distributive
    Training Technology network to facilitate bringing cost effective,
    required training to remote areas of the country, at the ``grass
    roots'' level. Upon full fielding, the goal is to have a distance
    learning classroom within 60 minutes of every Army and Air National
    Guard facility. The National Guard Bureau's National Interagency
    Counterdrug Institute (NICI), the Florida National Guard's Multi-
    jurisdictional Counterdrug Task Force Training (MCTFT) program, and the
    Mississippi National Guard's Regional Counterdrug Training Academy
    (RCTA) are in the forefront. These institutes provide important
    training on many aspects of the Weapons of Mass Destruction program to
    DOD agencies. These institutes, in coordination with NGB, have
    developed new courses to train Guardsmen as well as civilian first
    responders with the goal of developing a unified, coordinated WMD
    incident response capability and knowledge base.
                Force Structure
        The integration of all reserve components into domestic
    preparations to respond to terrorist or other incidents involving WMD
    is another step in fulfilling DOD's mandate. In May 1998, the Secretary
    of Defense announced the stationing (effective in fiscal year 1999) of
    ten Military Support Detachments (MSD) Rapid Assessment and Initial
    Detection (RAID) teams to be stationed in California, Colorado,
    Georgia, Illinois, Massachusetts, Missouri, New York, Pennsylvania,
    Texas, and Washington. Each RAID detachment is located within one of
    the ten Federal Emergency Management Agency regions. RAID Detachment
    missions include (1) Deploy rapidly, (2) Assist local first responders
    in determining the nature of a possible WMD attack, (3) Provide medical
    and technical advice, and, (4) Pave the way for the identification and
    arrival of follow-on DOD response assets. Each RAID detachment will
    consist of 22 highly skilled, full-time Army and Air National Guard
    personnel who will act as the tip of the national military support
    spear. These detachments are scheduled to be fully fielded, trained and
    mission ready by 5 January 2000. Additionally, Congress has directed
    that chemical/biological response teams be fielded in those states not
    receiving one of the ten full-time RAID detachments.
        DOD will also leverage the capabilities of existing National Guard
    (and other reserve components) chemical and patient decontamination
    force structure to provide additional response support to civilian
    authorities. These units will be provided with additional training and
    specialized equipment to accomplish this mission. Twenty-eight
    specialized decon teams and sixty-four patient decontamination teams
    will be designated using personnel from existing ARNG and United States
    Army Reserve chemical companies as well as Air National Guard and
    United States Air Force Reserve patient decontamination units.
        Further future steps also involve the integration of Guard medical
    force structure in DOD response plans. Potential missions include
    providing WMD specific medical advice, triage support and casualty
    evacuation support to civilian authorities.
                Current Status
        When formed and trained, Guard units with WMD capabilities will
    retain day-to-day mission requirements of being first and foremost
    viable, deployable warfighting assets, while maintaining a stand-by
    national consequence management capability.
        In the changing world climate, our enemies may resort to covert,
    asymmetrical, transnational attacks within the borders of the United
    States. Recognizing this support for the development of a robust Guard
    WMD consequence management capability comes from the highest levels of
    government. Secretary of Defense William Cohen noted, ``The Guard and
    Reserve are going to play a major role in dealing with detection of
    chemical and biological weapons. These responsibilities will include
    how to intervene and how to deal with the victims of terrorism when it
    occurs.''
                             looking to the future
        In order for us to provide our soldiers (our most important asset)
    with the resources they need to produce mission ready units, we must
    anticipate the requirements of today's world while looking forward to
    the challenges of tomorrow. To do this, we have focused ourselves on
    defining the keys to readiness needed to create the emerging Army
    National Guard. These keys are encompassed in our eleven Army National
    Guard goals.
        Manning.--Develop and execute a Total Army integrated human
    resource system to acquire, distribute, manage, compensate, retain and
    transition people, enabling the Army National Guard to provide combat
    ready units.
        Organizing.--Provide the maximum possible number of missioned ARNG
    units based on the Total Army Analysis (TAA) process, with required
    support as part of the Army's total force structure required to achieve
    directed capabilities.
        Equipping.--Obtain and distribute mission capable equipment to
    optimize Army National Guard unit readiness, modernization, and force
    relevance.
        Readiness.--Ensure all Army National Guard units are resourced to
    attain and sustain readiness levels needed to meet CINC mission
    requirements and deployment timelines.
        Sustaining.--Provide appropriate and efficient support for
    personnel, equipment and operations to accomplish all ARNG missions.
        Training.--Produce ready units to meet the National Military
    Strategy. This requires the development of strategies and the planning,
    acquisition, distribution and execution of resources to train
    individual, leader and collective tasks in the live, virtual and
    constructive environments.
        Quality Installations.--Provide state-of-the-art, environmentally
    sound, community-based power projection platforms that integrate all
    functions required to sustain and enhance unit readiness and community
    support.
        Missioning.--100 percent of all ARNG Force Structure Federally
    Missioned--All MTOE units and Table of Distribution and Allowances
    (TDA) structure included within Time Phase Force Deployment Data
    (TPFDD) or supporting the Commander in Chief (CINC) War plans.
        Quality of Life.--Provide an environment and culture that promotes
    equal opportunities for all, fosters environmental stewardship and
    provides for the safety, health and fitness of the force, families and
    communities.
        Knowledge Infrastructure.--The infrastructure necessary to capture
    and create information and knowledge, store it in an organized manner,
    improve it, clarify it and make it accessible in a usable format to
    anyone who needs it in the enterprise.
        Resourcing.--Secure resources for all statutory and critical
    requirements. Achieve parity by Force Package across all components to
    provide trained and deployable forces for the Army and CINCs.
        By remaining firmly focused upon these goals and the readiness that
    results, the Army National Guard will successfully meet the coming
    challenges.
    Army National Guard Vision 2010
        No successful plan for mastering our future can be complete without
    a thorough understanding of that environment. The cornerstone of this
    future vision for our organization lies in Army National Guard Vision
    2010. This document is the link between Army Vision 2010, Army After
    Next and the Department of Defense Joint Vision 2010. Together, these
    integrated planning documents provide the Army National Guard guidance
    for meeting its goals, objectives, missions and responsibilities in the
    new millennium.
        In fulfilling its role as a part of this integrated road map to the
    future, Army National Guard Vision 2010 notes that the development of a
    full spectrum land force will be critical to meeting long-term ARNG
    readiness objectives. This force must possess an unprecedented degree
    of operational and strategic flexibility, allowing Army National Guard
    troops to fulfill a wide variety of mission requirements. With
    capabilities ranging from sustained, high intensity combat to the
    conduct of disaster relief and assistance operations, this full
    spectrum land force will draw on traditional Guard strengths as well as
    a variety of new capabilities in meeting the nation's military and
    civil needs.
        Recognizing the need for both traditional and non-traditional
    capabilities in the years ahead, Army National Guard Vision 2010 notes
    that the ARNG's heritage as a community based force will play a
    critical role in meeting these challenges. With over 3,100 armories in
    all 54 states and territories, the ARNG's 362,000 personnel are well
    positioned to meet both existing and emerging state and federal mission
    requirements. Diverse capabilities ranging from Combat to Combat
    Service Support combine with the Guard's community orientation to
    provide unparalleled capability and responsiveness both at home and
    abroad. The unique attributes of the ARNG, coupled with rapidly
    emerging capabilities, will make Army National Guard Vision 2010 a
    reality.
    A National Guard Frontier of the Next Century
        Even as the ARNG leverages its existing capabilities in meeting the
    challenges ahead, much has already been accomplished in developing new
    capabilities to meet these emerging requirements. The Army National
    Guard White Paper, A National Guard Frontier of the Next Century
    examines the new and emerging threats that will confront the nation and
    the Guard in the future. A National Guard Frontier provides detailed
    insights into emerging defense missions, including the increasing need
    for Homeland Defense. This emerging Homeland Defense requirement may
    include such diverse missions as managing the consequences of Weapons
    of Mass Destruction use by domestic terrorists and defense against
    ballistic missiles. This ground breaking document goes on to discuss
    specific measures for dealing with these new threats, to include new
    capabilities as well as new and different command and control
    paradigms. With its insights into future Guard roles and
    responsibilities, A National Guard Frontier provides many of the
    conceptual underpinnings critical to the ARNG's success in the first
    years of the next century.
    The Future is People
        Most of all, success in meeting the challenges ahead depends upon
    Army National Guard soldiers and families. Guard men and women, ably
    supported by their families, represent the bedrock upon which the Guard
    is founded. Just as importantly, the continuing support of Guard
    employers nationwide plays a critical role in the readiness and
    availability of Guard soldiers for any mission. Working together Guard
    members, families and employers equal readiness.
                               manning the force
        At its core, the Guard and its capabilities are a direct function
    of its quality people. Manning the force--recruiting and retaining
    quality soldiers--remains a critical leadership and management function
    within the ARNG. During the course of the year, the Guard met its
    strength goals through an ambitious program of recruiting and retention
    incentive programs. Additional efforts were devoted to ensuring the
    continuing vitality of ARNG full-time manning programs during the year.
    Building on these successful force management efforts, the Guard is
    actively involved in planning for future manning challenges through
    initiatives like Officer Personnel Management System (OPMS) XXI and
    implementation of the Reserve Officer Personnel Management Act (ROPMA).
    These programs, along with continued leadership emphasis on recruiting
    and retaining quality personnel, will enable the Guard to meet the
    emerging personnel challenges of the new century.
    Recruiting and Retention
        The Guard's fiscal year 1998 end strength objectives included
    achieving a selected reserve strength of 362,000 (40,291 commissioned
    and warrant officers and 321,709 enlisted personnel). To attain this
    goal, enlisted gains were programmed at 56,638, officer gains at 3,682
    and enlisted extensions at 45,318. Enlisted losses were projected not
    to exceed 64,219.

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

                                                    FORCE COMPOSITION
    ----------------------------------------------------------------------------------------------------------------
                       Category                       Total                           Strength
    ----------------------------------------------------------------------------------------------------------------
    Minority Officers.............................      5,197  13.2 percent of assigned officers.
    Minority Enlisted.............................     88,674  27.4 percent of assigned enlisted.
                                                   ------------
          Total Minority Membership...............     93,871  25.9 percent of assigned personnel.
                                                   ============
    Black Officers................................      2,564  6.5 percent of assigned officers.
    Black Enlisted................................     53,880  16.7 percent of assigned enlisted.
                                                   ------------
          Total Black Membership..................     56,444  15.6 percent of assigned personnel.
                                                   ============
    Hispanic Officers.............................      1,607  4.1 percent of assigned officers.
    Hispanic Enlisted.............................     23,613  7.3 percent of assigned enlisted.
                                                   ------------
          Total Hispanic Membership...............     25,220  7.0 percent of assigned personnel.
                                                   ============
    Female Officers...............................      3,391  8.6 percent of assigned officers.
    Female Enlisted...............................     32,321  10.0 percent of assigned enlisted.
                                                   ------------
          Total Female Membership.................     35,712  9.9 percent of assigned personnel.
    ----------------------------------------------------------------------------------------------------------------

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

                Enlisted Personnel Recruiting and Retention
        Enlisted accessions of 55,401 were 97.8 percent of the programmed
    objective of 56,638 for the year. Non-prior service accessions of
    25,817 were 101.2 percent of the objective, while prior service
    accessions were 29,584, or 94.9 percent of objective. These numbers
    reflected an accession mix of 46.6 percent non-prior and 53.4 percent
    prior service personnel. The overall Army National Guard Loss Rate
    through the end of fiscal year 1998 was 18.1 percent. ARNG quality
    accessions fell slightly below established goals. High school diploma
    graduates accounted for 84.8 percent, short of the established goal of
    90 percent. However, when Alternate High School Certificate Holders
    (GEDs) are included, this percentage increased to 100 percent. The
    Guard goal for CAT I-IIIA accessions for the year was set at 67
    percent. While CAT I-IIIA accessions totaled 54.5 percent for the year,
    the Guard came in below the CAT IV goal of 2 percent by finishing at
    1.8 percent. The breakout of NPS accession quality for fiscal year 1998
    is as follows:

    ------------------------------------------------------------------------
                                                         Personnel   Percent
    ------------------------------------------------------------------------
    Non-prior service accession quality:
        HSDG...........................................     21,882      84.8
        AHSCH..........................................      3,923      15.2
    Test category:
        I-IIIA.........................................     14,071      54.5
        I-IIIB.........................................     11,280      43.7
        IV.............................................        466       1.8
    ------------------------------------------------------------------------

    Enlisted:
        Accessions................................................    55,401
        Non prior service.........................................    25,817
        Prior service.............................................    29,584
        Losses....................................................    61,539
    ETS...........................................................    14,664
    Non ETS.......................................................    46,875
    Extensions:
        First term................................................     9,607
        Careerist.................................................    31,882
    Fiscal year 1998 loss rate (percent)..........................      18.1

    Incentive Programs
        The Army National Guard employed a wide variety of incentive
    programs in fiscal year 1998. These programs included the Selected
    Reserve Incentive Program (SRIP) and educational programs like Service
    members Opportunity Colleges (SOC), educational tuition assistance and
    the Montgomery GI Bill (MGIB). Together, these initiatives contributed
    significantly to successful ARNG recruiting and retention efforts
    during the year.
                The Selected Reserve Incentive Program (SRIP)
        The Selected Reserve Incentive Program (SRIP) for fiscal year 1998
    offered the following:
      --$2,500 Enlistment Bonus for Non-Prior Service (NPS) enlistees into
            high priority units.
      --$4,000 Enlistment Bonus for NPS enlistees entering into high
            priority units with hard-to-fill low density MOSs (CAT I-IIIA
            only)
      --$2,500 Enlistment Bonus for NPS enlistees in selected units with
            hard-to-fill low density MOS (CAT I-IIIA only),
      --$5,000 Civilian Acquired Skills Program (CASP) Bonus for NPS
            enlistees, an Affiliation Bonus for prior-service enlistees
            based on their remaining Military Service Obligation (MSO), the
            Student Loan Repayment Program (SLRP) for NPS soldiers.
      --$2,500 3-year Reenlistment/Extension Bonus. A second 3-year
            Reenlistment Bonus of $2,000 was offered effective 17 November
            1997 for soldiers with less than 14 years of service. Soldiers
            are eligible for two 3-year Reenlistment Bonuses as long as the
            contracts are consecutive.
                Education Tuition Assistance
        The Guard has traditionally used educational incentives as a
    recruiting and retention tool. Educational benefit programs benefit the
    Army National Guard as well as the individual service member.
        Tuition Assistance was provided to over 15,000 M-Day soldiers in
    fiscal year 1998. Soldiers were offered 75 percent tuition assistance
    for 15 semester hours during the fiscal year for post-secondary
    education courses.
        Distance Learning and external degree tuition assistance were
    available for both soldiers and ARNG federal civilian employees in
    fiscal year 1998. This assistance was provided upon registration for
    traditional semester length courses required to be completed within 18
    weeks or less. Tuition reimbursement for courses greater than 18 weeks
    in length was also available. Enrollment in Distance Learning programs
    increased threefold as a result of the up front tuition assistance
    offered for the shorter courses.
        Distance Learning programs allow soldiers to pursue vocational,
    baccalaureate, graduate, and doctoral studies without entering a
    traditional classroom. A one-time fee of $75 is reimbursed for both M-
    Day and AGR soldiers to allow for an evaluation of service members'
    military education and training, previous college credit and any
    college level exams a soldier could successfully complete for college
    credit. The evaluation could offer a plan for soldiers to obtain an
    Associate or Bachelor's degree through an external degree program.
    Additionally, College Level Examination Program (CLEP) and DANTES
    Subject Standardized Tests (DSST) were offered free to soldiers, their
    spouses and ARNG federal civilian employees. These programs are
    designed to enhance recruiting and retention by allowing soldiers to
    earn college credit.
        All 32 nationally recognized certification exams offered through
    DANTES were funded through the Army National Guard tuition assistance
    program in fiscal year 1998. Previously, only the Automotive Service
    Excellence (ASE) Exam and the Food Protection Certification Program
    (FPCP) Exam were funded. Other exams funded under this effort include
    the Educational Institute of the American Hotel and Motel Association
    (EIAHandMA) and the Institute for Certification of Computing
    Professionals. Soldiers are eligible to take certification exams once
    they completed Initial Active Duty for Training (IADT) and are awarded
    a MOS.
        Working with the Army National Guard, the Servicemembers
    Opportunity Colleges (SOC) Guard continued to provide college workshops
    to encourage increased enrollments of non-member accredited colleges
    and universities to join SOC in support of the local ARNG community
    with post-secondary education programs. SOC colleges limit their on-
    campus requirements to 25 percent of required attendances, a necessary
    precondition for many Guard soldier-students who would otherwise be
    unable to attend. SOC Guard also worked in the recruiting and retention
    arena along with Strength Maintenance NCOs to encourage young men and
    women to enlist.
        Another primary education program is the Montgomery GI Bill (MGIB)
    for members of the Selected Reserve. When a soldier signs a six-year
    contract, completes Initial Entry Training and remains a member in good
    standing during the period, he or she may be entitled to education
    benefits totaling $9,036, effective 1 October 1998. The MGIB funds
    undergraduate, graduate, postgraduate, vocational and flight training.
    As a drilling Guard member, soldiers have ten years after gaining
    eligibility to use the program. In fiscal year 1999, the ARNG will
    offer an additional MGIB financial incentive to selected units and MOSs
    at a rate of $100, which will increase monthly benefits for these
    selected full time students to $351 per month.
    Officer Personnel Management
        Officer personnel attrition continued to decline in fiscal year
    1998 to a low of 10.9 percent. Initiatives such as a new officer
    evaluation system and implementation of the Reserve Officer Personnel
    Management Act (ROPMA) contributed to the retention of officer
    personnel throughout the ARNG. Total officer strength at the end of
    fiscal year 1998 was 39,307. This was 984 officers below the identified
    objective.
        The Army National Guard began fiscal year 1998 by implementing the
    transition plan to the New Officer Evaluation Reporting (OER) system,
    which is designed to significantly improve the existing system. The
    Army National Guard's program essentially mirrors Active Component
    efforts in this area. The Army National Guard implemented the Title 10
    AGR portion of the new OER system on 1 October 1997 followed by the
    Title 32 AGR and M-day programs on 1 June 1998.
        Another important Officer Personnel Management initiative for
    fiscal year 1998 involved implementation of ROPMA. By the end of the
    fiscal year the primary provisions of this important program were
    integrated into the Guard personnel management structure. A majority of
    ROPMA goals have been achieved and work to improve the system
    continues. Suggestions for better adapting ROPMA to the unique needs of
    ARNG officer personnel are also being reviewed and will move forward as
    regulatory and legislative proposals when it is determined that they
    will enhance the ARNG program.
        While implementation of ROPMA represents a vital step in reforming
    the ARNG Officer Personnel Management System, the future of officer
    management lies in OPMS XXI. OPMS XXI is designed to meet the emerging
    personnel management challenges of the 21st century. The ARNG has
    established a transition team tasked with implementing OPMS XXI. The
    goal of the transition team is to complete this important process on or
    ahead of the Army's five-year time line.
        Short term personnel management challenges include meeting the
    Guard's company grade officer needs. In working with the Guard to meet
    these requirements, the Army introduced the ARNG Combat Reform
    Initiative (CRI), a program designed to enhance ARNG officer strength
    at the company grade level. This program approved 150 active duty
    lieutenants for early release from their active service commitments.
    These officers will fulfill their remaining 18-24 month commitments in
    ARNG Troop Program Units (TPU). The first officers available under this
    program began arriving in April 1998. AC and ARNG Leaders have high
    expectations for this program, which may be expanded if it proves
    successful.
        Another AC/ARNG leadership program places selected Active Component
    Officers in key Army National Guard positions. This program is in its
    second year. Lieutenant Colonel John Hennigan, Commander of the 1-141
    Field Artillery Battalion Louisiana Army National Guard completed his
    tour in September 1998 and was reassigned to the Army's Office of the
    Deputy Chief of Staff for Operations. The second phase of this program
    is already underway with a total of thirteen AC officers reporting to
    six states during the period May to October 1998. These officers will
    serve in a variety of positions from battalion command to brigade level
    operations and executive officer slots. This program has been well
    received and promises to provide significant benefits in the effort to
    promote the Total Army concept. The Army Deputy Chief of Staff for
    Personnel formed a working group to examine expanding the program to
    allow Army Guard officers to serve on active duty in a direct one for
    one exchange program of commanders, executive officers, operations
    officers and company commanders.
    Warrant Officer Personnel
        The Army National Guard met with continuing challenges in its
    efforts to effectively manage Warrant Officer Personnel strength
    throughout fiscal year 1998. Guard Warrant officer strength for the
    fiscal year revealed a shortage of 1,536 in technical specialties at
    the end of fiscal year 1998. The ARNG is currently at 72 percent fill
    for technical warrant officers and 100.8 percent for rated aviators.
    Authorized Warrant Officer strength in fiscal year 1998 totaled 9,491,
    with an assigned strength of 7,988.
    Enlisted Personnel Management
        Guard fiscal year 1998 efforts to initiate personnel management
    reform were not confined to the Officer ranks. An Enlisted Personnel
    Management Review Panel was formed and directed to examine the present
    promotion system in order to propose changes to existing policies and
    procedures. The panel was composed of ARNG members from ten states and
    representatives of the Army Guard Directorate staff. Among the
    significant issues examined by the committee were proposals to review
    enlisted promotion system point values and the relative weight with
    which the points were spread over nine administrative point areas. The
    committee also studied devising a means to improve promotion and
    assignment cycles, improving individual training seat use during the
    first quarter of the fiscal year, and improving language testing and
    the use of the Civilian Acquired Skills Program. Finally, members
    examined the future of weapons qualification and the Army Physical
    Fitness Test in the promotion system and addressed the purpose and
    efficiency of the Qualitative Retention Board.
        These issues, along with a number of related questions, will be
    staffed through the State Command Sergeants Major and Military
    Personnel Management Officers for input from all levels through
    December 1998. Feedback from this effort will lead to decisions and
    staffing of approved changes during 1999.
    Changes in Noncommissioned Officer Structure
        Efforts to bring the ARNG NCO structure in line with Total Army
    objectives met with considerable success during fiscal year 1998.
    Objectives included a return to 1989 NCO force levels. The changes will
    have far reaching impacts; revised base Tables of Organization and
    Equipment have been applied to the fiscal year 1999 Army National Guard
    Modified Tables of Organization and Equipment that will take effect in
    fiscal year 2000. Previously, the Army National Guard Noncommissioned
    Officer content baseline was 43.6 percent of the enlisted force.
    Application of the new policies resulted in a one-half percent
    reduction to 43.1 percent. The longer term effects of this important
    initiative have not yet been fully measured. Because the overall
    program objective is to adjust noncommissioned officer distribution in
    order to assure career development and management opportunities, there
    will be increases and realignments within military occupational
    specialties and career management fields. These are generally grade
    increases as well as specialty consolidations. The most profound effect
    will be cuts in the noncommissioned grades in companies and detachments
    without resultant increases in similar or related units elsewhere in
    the state. In these cases, soldiers will be forced to accept reduction
    in grade or reclassification training to remain in a unit within
    commuting distance. The service member may also transfer to the Retired
    Reserve, the Individual Ready Reserve, or an United States Army Reserve
    unit or accept discharge.
        Increases in transition benefits and increases in both the number
    of enlistment's required to replace potential losses and initial entry
    training seats for non-prior service enlistees will be necessary to
    compensate for expected losses.
    Full-Time Support
        The Army National Guard's (ARNG) Full-Time Support (FTS) program
    provides a cadre of over 45,000 full-time personnel to organize,
    recruit, administer, train and maintain the Army National Guard. The
    fiscal year 1998 FTS military force is composed of 25,108 Military
    Technicians (MT) and 22,310 Active Guard Reserve (AGR) personnel,
    soldiers who perform the bulwark of day-to-day operations for the
    Guard.
        Full-time support requirements are established by detailed analysis
    of workload. Grades are determined by classification studies. Congress
    authorizes FTS, which is then allocated to the states by NGB in
    accordance with the deployment criteria of various Force Support
    Packages.
        The Army National Guard continues to work with the Department of
    the Army, Department of Defense, Congress and other interested parties
    to ensure directed missions are supported with adequate levels of FTS
    personnel. A central challenge of our full-time support effort lies in
    meeting increasing missioning requirements with reduced authorized
    strength and budget.
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                Active Guard Reserve (AGR)
        AGR soldiers throughout the country provide vital management and
    leadership essential to ARNG readiness. Support for AGR requirements
    for fiscal year 2000 is programmed at 55 percent.
        The development of an effective AGR officer career management
    program poses challenges for the ARNG. In fiscal year 1998 the ARNG
    requested and received an increase in the number of controlled grades
    to promote career AGR enlisted soldiers and officers. These are the
    soldiers who delayed their promotions because of lack of adequate
    controlled grade authorizations. The additional AGR controlled grades
    will also provide junior soldiers with an opportunity for developmental
    progression.
        Despite increasing mission requirements and operational tempo, AGR
    ranks are being reduced. The Temporary Early Retirement Authority
    (TERA) program was used as a force shaping tool to assist in achieving
    a Congressionally mandated reduction in AGR authorization levels.
    Shaping allows for the reassignment of authorizations among the states.
    [GRAPHIC] [TIFF OMITTED] T02MA28.001

                Military Technicians
        Military Technicians are force multipliers as well as mobilization
    assets. The Military Technician level of support for fiscal year 2000
    is programmed to be 56 percent percent of authorized requirements.
        Force structure reductions, equipment modernization and
    restructuring has caused technician requirements to increase. Complex
    modern equipment such as the Apache helicopter, Abrams tank, Bradley
    Fighting Vehicle and Multiple Launch Rocket System require more
    maintenance manpower than the equipment these systems replace. While
    Guard units can maintain these systems at significant savings to the
    Total Force, critical full-time support levels must still be
    maintained.
                             organizing for success
        The organization of the Army National Guard reflects the combined
    federal-state mission with which it is tasked. On the national level,
    the Army National Guard maintains properly trained and equipped units
    available for prompt mobilization for war, national emergency or as
    otherwise needed. To meet this requirement, the ARNG maintains a large
    number of combat, combat support and combat service support units,
    structured to integrate seamlessly with Active Component units as
    needed. The ARNG state mission requires that the Guard provide trained
    and disciplined forces for domestic emergencies or as otherwise
    required by state laws. Meeting this requirement requires significant
    flexibility among Guard leaders and soldiers, who must execute state
    missions ranging from civil disturbance to various type of natural
    disasters even as they maintain the capability to perform federal
    missions. These widely varied organizational challenges have resulted
    in a Guard force structure that is fully prepared for war, yet ready on
    short notice to respond to the needs of local communities across the
    United States.
    Organizational Evolution
        The end of the Cold War and the approach of the new millennium have
    combined to present unparalleled organizational challenges for the
    Department of Defense. Guard efforts to provide the maximum number of
    missioned ARNG units with the necessary support to meet the
    requirements of the Total Army continued in 1998. These efforts
    included implementation of initiatives such as the Army National Guard
    Division Redesign (ADRS) and the Active Component/ARNG Integrated
    Division. Additional AC/ARNG integration initiatives, coupled with
    continuing studies like Total Army Analysis (TAA)-07 and Reserve
    Component Employment-05 (RCE-05) will allow the Guard to meet the 21st
    century challenges as a seamless part of the Total Force.
    Army National Guard Division Redesign Study (ADRS)
        Total Army efforts to ensure that the total force is properly
    structured to meet the needs of the National Military Strategy
    continued in fiscal year 1998. The most important of these initiatives,
    the Army National Guard Division Redesign Study (ADRS), achieved
    significant milestones during the year.
                ADRS--Background
        Efforts to mold a force capable of addressing the likely threats of
    the next century have been the subject of intense interest throughout
    the 1990s. In May 1995, the Commission on Roles and Missions
    recommended that the Army reorganize lower priority Reserve Component
    forces to fill force shortfalls in higher priority areas. In keeping
    with this recommendation, the Army conducted Total Army Analysis-03
    (TAA-03) in late 1995 to determine potential shortfalls in personnel
    required to implement the National Military Strategy (NMS). As a result
    of TAA-03, the Army determined that nearly 124,800 additional Combat
    Support and Combat Service Support (CS/CSS) personnel would be required
    to fully implement the NMS. Following this conclusion, the ARNG
    commissioned the Army National Guard Division Redesign Study (ADRS) to
    examine ways it could address this shortfall in CS and CSS personnel.
        As a result of the study, the Guard will convert a number of units
    from Combat to Combat Support and Combat Service Support formations in
    the coming years. Among other suggestions, the ADRS recommends the
    conversion of up to 12 ARNG combat brigades and their associated
    divisional slice elements to CS/CSS units during fiscal year 1999-2012.
        Implementation of the ADRS will occur in four phases. Three combat
    brigades will be converted in each of phases one and two. Phases three
    and four will see conversion of remaining units in the two ARNG
    divisions affected by the redesign. The end state will find the
    equivalent of up to 12 combat brigades converted to CS/CSS or composite
    divisions. The first brigades designated for conversion were
    tentatively identified at the Division Project Action Committee
    (DIVPAC) in December 1997.
        In June 1996, the Army began to develop a costing methodology study
    for both TAA-03 and ADRS to define the total conversion cost. The
    entire process received intensive oversight from both the Army
    Secretariat and the Army Staff to ensure all related issues were
    addressed. The Vice Chief of Staff of the Army approved the cost
    analysis on 27 March 1997 and directed ADRS be highlighted in the
    Quadrennial Defense Review (QDR) as a major initiative.
    Total Army Analysis--2007
        Total Army Analysis (TAA) is a multi-phased force structure process
    that uses quantitative and qualitative analysis to determine total Army
    force structure requirements for future years (fiscal years 2002-07).
    The combat forces are specified in the Defense Planning Guidance (DPG)
    and further detailed in the Illustrative Planning Scenarios (IPS). TAA
    simulations develop the Echelon Above Division (EAD) through Theater
    Forces required to support the war fight.
        The latest in this series of analysis efforts, TAA-07, will result
    in large-scale functional and organizational changes within the Total
    Army. TAA-07 will attempt to incorporate Force XXI organization
    designs, and review Institutional Army requirements. TAA-07 was
    preceded by a new process called Total Army Requirements Determination
    (TARD). Through the TARD process Mission Task Organized Forces (MTOF)
    are built for several scenarios with each CINC area of responsibility
    (AOR). The MTOFs are then incorporated into the TAA process to more
    closely link CINC requirements to TAA. As a result of TAA-07 and the
    TARD process, a greater percentage of ARNG combat forces will receive
    relevant warfighting missions.
    Reserve Component Employment Study RCE-05
        The Reserve Component Employment Study (RCE-05) is a study of
    alternative concepts for employing reserve component forces in the
    future. The Defense Planning Guidance includes developing and assessing
    alternative RC employment roles and force-mix concepts, to include an
    evaluation of costs, benefits and risks of each option.
        The purpose of the study is not to provide recommendations but to
    examine costs, benefits and risks associated with different aspects of
    increasing the use of the RC.
    Current Status
        The Army is accelerating the pace of the Army National Guard
    Division Redesign Study conversions by increasing both near-term and
    mid-term funding. The Secretary of the Army signed a memorandum to
    include appropriate funds in future POMs for equipment procurement no
    later than fiscal year 2002, with complete ADRS conversions by fiscal
    year 2009. Meeting this objective requires approximately the same level
    of effort for the fiscal year 1998-03 POM (approximately $600 million
    per year).
        The initial 1996 cost analysis estimated that total funding
    requirement for TAA-03 and ADRS was approximately $4 billion.
    Subsequent revisions have amended the estimate to $5 billion. In the
    fiscal year 1998-03 POM, the Army programmed $743 million, which
    includes $83 million--AC, $468 million--ARNG, and $192 million--USAR.
        The fiscal year 1998 BES included an additional $200 million for
    ADRS. In the fiscal year 1998-03 POM, the Army invested an additional
    $1.1 billion for TAA-03 and ADRS, which includes $968 million--ARNG and
    $106 million--USAR, to fully fund TAA-03 requirements and accelerate
    the ADRS plan. Total funding programmed for TAA-03 and ADRS is $2.017
    billion (including fiscal year 1998) with an approximately $3 billion
    shortfall to be programmed in subsequent POMs.
    Active Component/Army National Guard (AC/ARNG) Integrated Divisions
        An additional proposal contained in ADRS established two AC/ARNG
    Integrated Divisions, each consisting of an active Army headquarters
    (staffed by some of the 5,000 AC support personnel) and three eSBs. The
    Division Commander would become responsible for the combat readiness of
    the three brigades and the other elements necessary to create a full
    division capable of deploying in wartime.
        This concept was approved by the Secretary of the Army in fiscal
    year 1998 and Forces Command (FORSCOM) is now in the process of
    implementation. One division will be headquartered in Fort Riley,
    Kansas, with a forward element in Fort Jackson, South Carolina. ARNG
    units making up this division will include the 30th Mechanized Infantry
    Brigade (North Carolina), the 218th Mechanized Infantry Brigade (South
    Carolina), and the 48th Mechanized Infantry Brigade (Georgia). The
    other Integrated Division, to be headquartered at Fort Carson,
    Colorado, will be composed of the 39th Infantry Brigade (Arkansas), the
    45th Infantry Brigade (Oklahoma), and the 41st Infantry Brigade
    (Oregon).
        A formal Memorandum of Agreement between the MACOMs establishing
    these integrated divisions was signed by the Adjutants General of each
    state, the Director, Army National Guard and the FORSCOM Commander. The
    activation of these divisions is set for October 1999.
                              equipping the guard
        Modern, mission capable equipment is an essential element in the
    Army National Guard readiness equation. State-of-the-art weapons,
    aircraft, communications devices, and other equipment are necessary for
    Guard units to seamlessly interface with their Active Component
    counterparts. Recognizing the importance of equipment modernization,
    Active Component and Army National Guard leaders worked through the
    year to bring about needed upgrades and fielding of current generation
    equipment. While the ARNG received significant quantities of new
    equipment during fiscal year 1998, much remains to be accomplished in
    this vitally important area of readiness.
    Equipment Modernization
        The goal of the modernization strategy for the Army National Guard
    is to provide the nation with a relevant, compatible and interoperable
    force. This force must be capable of fulfilling state, national and
    international missions in war and peace. Resourcing this force with
    modernized equipment and associated training packages is key to
    maintaining the quality force the nation expects in its Army National
    Guard.
        During fiscal year 1999 significant modernization initiatives will
    include the M109A6 Paladin 155 mm artillery systems and Multiple Launch
    Rocket Systems (MLRS). Through fiscal year 1998, the ARNG has been
    modernized with three Paladin battalions and is programmed to field an
    additional 15 Paladin battalions by fiscal year 2001. MLRS fielding to
    the ARNG is also continuing. To date, 10 MLRS battalions have been
    fielded to the ARNG. Based on a Chief of Staff of the Army (CSA)
    directed MLRS restructuring initiative, the Department of the Army (DA)
    is currently staffing a plan that will convert an additional 11
    battalions of ARNG force structure to MLRS over the next two to six
    years.
        The Javelin is the new infantry anti-armor weapon and is critical
    for a self-defense capability for light forces and M113 equipped
    mechanized infantry. The current budget addresses 100 percent of the
    ARNG Javelin requirements. However, fielding to the ARNG will not begin
    until fiscal year 2004, with completion in fiscal year 2006.
        Congress appropriated $95 million in fiscal year 1998 for the
    procurement of 80 M2A2ODS Bradley Infantry Fighting Vehicles (BIFV) in
    the ARNG. Follow-on fiscal year 1999 congressional appropriations are
    required to complete a brigade set for the ARNG. The ARNG anticipates
    fielding these M2A2ODS to the 218th eSB (SCARNG) in fiscal year 1999
    and fiscal year 2000. This fielding begins to address the need to
    provide the enhanced Separate Brigades with upgraded BIFV's. Along with
    the cascade of older Bradleys into ARNG Divisions, this initiative will
    assist in moving toward pure fleeting the force with BIFVs.
        The ARNG has assumed the Corps level Air Defense Artillery (ADA)
    role within the Total Army with the standup of nine Avenger battalions.
    Seven of the nine Corp Avenger Battalions are fully fielded with the
    weapon system. The two remaining battalions, 2-265 and 2-263 ADA are in
    the process of fielding the last of the required systems. Currently,
    one Corps Avenger Battalion (1-204 ADA) is being fielded to the Forward
    Area Air Defense Command Control and Intelligence system (FAAC\2\I).
    This is an out of cycle action and is ahead of schedule.
        The heavy enhanced Separate Brigades are currently equipped with
    M1A1 Abrams tanks. Actions are currently being taken to upgrade tanks
    in non-eSB units in the ARNG from the 105 mm M1 tank to the 120 mm
    M1A1. Not only will this give these units greatly increased firepower
    and survivability; this modernization initiative will provide
    ammunition compatibility with the rest of the Army.
        Communications have been supported with the continued fielding of
    SINCGARs Radios, a key component in interoperability with the Total
    Army. Currently five enhanced Separate Brigades are equipped with the
    system and the remaining ten are scheduled to receive them in the next
    two years. In addition, ARNG artillery brigades that support early
    deploying forces are also receiving the system.
        The Enhanced Position Location Reporting System (EPLRS) provides
    the backbone of the tactical Internet by generating real-time, GPS
    based position data to the maneuver commander. The Active Component's
    first digitized corps has been scheduled to receive EPLRS. The
    Department of the Army is in the process of identifying which ARNG
    units will support the corps, and these will be the first to receive
    EPLRS. This system is also a critical component of the air defense
    artillery Slew-to-Cue tracking system.
        Several successful modernization efforts have taken place with
    small arms and night vision equipment. The MK19 Automatic Grenade
    Launcher will resume fielding in fiscal year 1999 and the Army National
    Guard is scheduled to receive 1,000 weapons. The M240B Medium Machine
    Gun will be received by ARNG combat arms units in fiscal year 1999. The
    Army National Guard has received several thousand M249 Squad Automatic
    Weapons (SAW), and will receive a total of over 30,000 SAWs by fiscal
    year 2003, filling 80 percent of the ARNG requirements. The ARNG has
    received over 70,000 M16A2 rifles during fiscal year 1997-98 and
    anticipates being pure-fleeted by fiscal year 2003. During fiscal year
    1999 the ARNG eSB and Special Forces battalions will be fielded the
    PAQ4C and PEQ2 Laser Aiming lights, although there is still a funding
    shortfall in this acquisition area.
        Nuclear, Biological and Chemical (NBC) equipment is being upgraded
    with the fielding of the M40 Chemical and Biological Protective Mask to
    Force Package 1 and 2 units. The M42 Combat Vehicle Crewman's mask is
    also being fielded to FP 1 and 2, as well as the M41 Protective Mask
    Test Kit (PATS). The PDR-75 Radiac Set, designed for use in detecting
    radiation in the atmosphere, is being fielded through all Force
    Packages (1-4).
    Aviation Modernization
        The UH-60 Blackhawk helicopter remains the main focus of aviation
    modernization through fiscal year 2000 for the Army National Guard.
    Planned procurement of new UH-60L aircraft and the cascading of
    refurbished UH-60A models from the active component will increase the
    ARNG inventory. Other modernization initiatives include OH-58D, AH-64A,
    and the potential procurement of a new Light Utility Helicopter (LUH).
        The UH-60Q, Search and Rescue Aeromedical Evacuation helicopter,
    has been a National Guard development priority for over six years.
    After testing several variant prototype Aeromedical platforms, using
    Tennessee Army National Guard (TNARNG) aircraft, the Army has approved
    a UH60Q production aircraft for future air ambulance requirements. Four
    type-classified demonstration aircraft have been built by a team of
    aerospace contractors and these are operated by the TNARNG. The Army is
    negotiating final approval of a multiyear procurement budget to support
    an Army-wide fielding plan.
        The ARNG purchased 28 UH-60 utility helicopters in fiscal year 1998
    and is scheduled to purchase another eight in fiscal year 1999.
    Initiatives are being developed to speed modernization of the attack
    helicopter fleet and retire aging AH-1 Cobra attack helicopters.
        While significant progress has been made in all Guard modernization
    areas, almost all these initiatives stretch out into the future and
    require management and guidance to ensure their success. In addition, a
    variety of shortages persist, such as tactical wheeled vehicles,
    Patriot Air Defense systems, rotary wing aircraft, Bradley Infantry
    Fighting Vehicles and engineer equipment. The Army National Guard is
    working hard with the Army Staff to meet these modernization
    challenges.
    National Guard and Reserve Equipment Appropriation
        The National Guard and Reserve Equipment Appropriation (NGREA)
    provides supplemental funding to acquire urgently needed equipment for
    the modernization of high priority Army National Guard units. This
    support allows the implementation of modernization initiatives that lie
    beyond the budgetary authority available to the Total Army.
        The NGREA has resulted in urgently needed modernization for the
    Guard in recent years. During fiscal year 1998 the Guard received $70
    million in NGREA funding. Equipment procured with these funds included
    night vision goggles, engineer construction equipment, tactical wheeled
    vehicles and training simulation equipment.
        The fiscal year 1999 Defense Appropriation authorizes the ARNG $20
    million in NGREA funds. These resources will support a limited amount
    of critical modernization for enhanced Separate Brigades, Force Support
    Package and other ARNG units. The $20 million in fiscal year 1999
    funding will also support constrained day-to-day operations, domestic
    support, training, and wartime readiness efforts.
                                   readiness
        The Army Guard sustains and maintains the force through a variety
    of support initiatives. The Guard philosophy is to utilize the organic
    assets of our existing force structure while maintaining a baseline of
    readiness across the broad spectrum of units and missions.
        Sustaining the force involves the combination of Readiness,
    Resourcing, Logistics Operations and Knowledge Infrastructure. By
    maintaining a well sustained force, the Army National Guard continues
    to meet the challenges of the next century.
    Readiness
        During the year the Guard managed overall readiness by prioritizing
    resources to units that are designated as ``First to Deploy''. This
    method of resource tiering ensures that high priority units receive
    necessary resources to meet operational readiness requirements and
    effectively support the National Military Strategy. While high
    priority, early deploying units received adequate funding during fiscal
    year 1998, lower priority units like the eight combat divisions worked
    to meet minimal readiness goals with the resources provided to them.
        Despite a variety of innovative resource management initiatives,
    Unit Status Reports (USR) indicated overall unit readiness levels in
    the Army National Guard declined by 5 percent in fiscal year 1998.
    Several factors contributed to this decline, including decreased
    training levels, equipment serviceability challenges and non-duty
    qualified military occupational specialty (MOS) personnel.
    Additionally, the number of nondeployable soldiers decreased by
    approximately 2,000 from the previous fiscal year. This was due
    primarily to soldiers receiving appropriate MOS training.
    Force Support Package (FSP) Readiness
        The 218 ARNG units designated in the FSP are the highest priority
    units for the Army National Guard. Combat Support (CS) and Combat
    Service Support (CSS) units primarily comprise the Guard's FSP roster.
    Consistent with the National Military Strategy, these units are
    doctrinally aligned to support the nearly two simultaneous Major
    Theater War (MTW) strategy. They feature one full and one partial corps
    HQ, one theater element, and one theater opening element. The FSP is
    divided into two Packages: FSP 1 supports 5\1/3\ divisions, one full
    corps HQs and one theater element and FSP 2 supports the remaining
    crisis response forces. During fiscal year 1998, Unit Status Reports
    (USR) indicate a 4 percent increase in overall FSP readiness.
    Enhanced Separate Brigade (eSB) Readiness
        The fifteen ARNG enhanced Separate Brigades (eSBs) are the Army's
    principle reserve ground combat maneuver forces and are fully
    integrated into the two MTW scenarios. The eSBs are expected to meet
    established ARNG readiness goals by the end of fiscal year 1999.
    Additionally, all of the eSBs have achieved the Army Mobilization and
    Operations Planning and Execution System (AMOPES) deployment standards.
    Divisional Readiness
        During fiscal year 1998, training readiness within the ARNG
    Divisions declined due to insufficient OPTEMPO and execution funding.
    As a result, pre-mobilization training levels and the overall readiness
    of these units dramatically decreased. Fiscal year 1998 USR data
    indicated overall unit resources and training levels in the Division's
    declined 15 percent due to decreases in DMOSQ, equipment serviceability
    and training readiness. Despite tremendous fiscal constraints and
    training obstacles, the ARNG Divisions have proved resilient. For
    example, the 49th Armored Division (TX ARNG) has been selected as the
    command and control HQs for an OPERATION JOINT FORGE rotation during
    fiscal year 2000.
    Home Station Mobilization
        Home Station Mobilization (HSM) is an ARNG initiative that empowers
    the STARCs with greater responsibilities for the mobilization and
    deployment of selected units. STARCs assume responsibility for all the
    mobilization inprocessing activities now conducted by mobilization
    stations. A unit selected for HSM moves directly to ports of
    embarkation. STARCs also validate HSM units for deployment. This
    increases accessibility of Reserve Component units to CINCs by
    delivering them to the theater of operation earlier and allowing them
    to be in theater longer.
        The Army National Guard has successfully demonstrated its
    capability to conduct Home Station Mobilizations throughout the past
    three years. To date, eighteen units have Home Station mobilized and
    deployed in support of Operation JOINT ENDEAVOR/GUARD/FORGE.
                              sustaining the force
        Along with resourcing, meeting Army National Guard sustainment
    goals involves efficient, seamless logistical operations. Throughout
    fiscal year 1998, the ARNG devoted extensive efforts to streamlining
    existing logistics operations while planning for future challenges.
    Highly successful on-going efforts like the Controlled Humidity
    Preservation (CHP) Program, logistics velocity management and AC/ARNG
    logistics integration continued during the year. At the same time,
    initiatives like velocity management and Army Aviation Support
    Facility-2000 will enable ARNG logistics efforts to evolve in response
    to new and emerging requirements. Together, these programs allow the
    Guard to meet its sustainment goals in the next century.
    Logistics OPTEMPO
        The Army National Guard fiscal year 2000 Surface OPTEMPO program
    continues to manage the resource challenges confronting the Guard.
    While fiscal year 1998 OPTEMPO funding presented the Guard with
    difficult resource management choices, the future promises challenges
    as well. The Budget Estimate Submission (BES) position for Surface
    OPTEMPO in fiscal year 2000 is $27 million more than the BES position
    for fiscal year 1999, which represents a 5 percent rate of growth.
    Unfortunately, this rate of growth means that, from fiscal year 1999 to
    fiscal year 2000 PB Surface OPTEMPO funding remains constant when
    adjusted for inflation. Current resourcing supports surface OPTEMPO at
    a level $206 million less than established requirements, which directly
    impacts unit readiness.
                OPTEMPO Programming
        OPTEMPO resources are routinely reallocated between various
    categories of units as a result of Force Modernization initiatives,
    ARNG Division Redesign Study (ADRS) implementation, force structure
    changes and updates to the War Trace Plans. OPTEMPO must be viewed as a
    comprehensive program for all units, and resources cannot be fixed each
    year to a specific category. As an example, during fiscal year 2000 the
    initial conversions mandated under ADRS will begin. ADRS will convert
    significant portions of ARNG Divisional Force Structure to Combat
    Support/Combat Service Support. This will cause funding for units to
    move between categories.
        In recognition of the resource constraints affecting the Guard,
    Congress increased OPTEMPO funding for the Guard in the fiscal year
    1999 Defense Appropriation Bill by $100 million.
    Guard Material Management Center (GMMC)
        Located in Lexington, KY, the GMMC is a Surface and Air Class IX
    (repair parts) distribution activity, which supports the Army National
    Guard in all states and territories. The GMMC was established to
    identify high dollar and high demand Class IX items turned in to
    Defense Reutilization and Management Offices (DRMOs). These Class IX
    items are recovered from DRMO's and made available for redistribution
    within the Guard. The GMMC provides the focus to aggressively pursue
    and redistribute assets needed by the ARNG. Initial cost avoidance as a
    result of this innovative program is estimated at $10-$20 million a
    year with significant potential for increased savings. To date, the
    GMMC has saved the Army National Guard over $9 million.
        The GMMC redistributes Class IX repair parts on a ``FREE ISSUE''
    basis. Available assets are listed on the Internet at www.ngmmc.com.
    Anyone can browse this site, but authorization is required to place an
    order for the free issue. The GMMC has the capability to electronically
    accept any authorized user's Unfinanced Requirements Listing and match
    it against GMMC on hand assets. The GMMC is user friendly and with
    prior coordination, can make special Class IX searches to accommodate
    units during Annual Training.
    Controlled Humidity Preservation (CHP)
        Another innovative cost avoidance initiative undertaken by the Army
    National Guard involves the use of Controlled Humidity Preservation
    techniques. This storage technique significantly reduces maintenance
    requirements resulting from environmental wear and tear on Guard
    equipment. The Guard was faced with equipment deterioration caused by
    long periods of non-use and exposure to the environment, coupled with
    declining OPTEMPO resourcing and full time maintenance manning. The
    ARNG CHP program was the solution to maintaining equipment readiness
    rates while compensating for increasingly scarce resources. By storing
    operational equipment under environmentally controlled conditions, CHP
    saves manpower and OPTEMPO dollars and returns a cost savings over
    expenditures on a magnitude of seven to one.
        The CHP program evolved from an initial concept in 1994 to full-
    scale implementation by 1998. In fiscal year 1998, the ARNG was
    designated as the lead agency for CHP implementation Army-wide. A vital
    force readiness multiplier, it is currently available in 31 States.
    Fielding plans include CHP for every ARNG State and Territory by fiscal
    year 2006.
    Fort State
        The Army National Guard's Fort State initiative seeks to leverage
    existing infrastructure, experience and capabilities within states and
    territories to perform services such as maintenance, calibration,
    controlled humidity preservation, supply and transportation.
    Utilization of ARNG capabilities through the Fort State concept will
    provide the Department of Defense (DOD) alternative methods to acquire
    cost effective services. Additionally, the Fort State concept enhances
    the ``One Army'' concept by fostering day-to-day working relations
    between the three Army components.
        A Fort State feasibility analysis, undertaken at the request of the
    Active Army leadership, has examined Total Army requirements as set
    against ARNG state level capabilities. This analysis has indicated the
    potential for the ARNG to support the Department of Defense (DOD) in
    certain logistical areas. Economies achieved through the more efficient
    use of various support functions at the state level will save money and
    further strengthen Active Component and ARNG integration, cohesion, and
    cooperation.
    Surface Maintenance Facilities
        The ARNG currently operates 787 surface maintenance facilities. As
    a result of a concerted effort to close and consolidate small and co-
    located facilities, this number represents a drop of 33 facilities from
    1997 levels. These facilities provide organizational (user level),
    direct support (repair/replace and return to user) and general support
    (commodity oriented repair of components and end items) levels of
    maintenance for all Army National Guard issued equipment. The 820
    current facilities include: Organizational Maintenance Shops (656);
    Combined Support Maintenance Shops (67); Unit Training Equipment Sites
    (40); and Maneuver Area Training Equipment Sites (24). These facilities
    employ a full time support strength of 10,901 federal technicians.
    Depot Maintenance
        The Army National Guard depot maintenance program is based on a
    ``repair and return to user'' premise. This means equipment is repaired
    to deployable standards and returned to the owning units. The Army
    Guard does not currently maintain an equipment maintenance float.
        Projected depot maintenance resourcing will continue to provide
    challenges for the Guard. Funding for depot maintenance supports 78
    percent of requirements for fiscal year 2000. Funding for depot
    maintenance requirements for the enhanced Separate Brigades has
    increased over the fiscal year 2000 funding level to 80 percent of
    requirements. However, funding levels for ARNG Divisional units
    currently supports 50 percent of total ARNG depot maintenance
    requirements.
        Maintenance of adequate resource levels on an annual basis is an
    essential contributor to overall ARNG readiness. Backlogs and carry-
    over from year to year increase the unserviceable equipment that must
    be supported. A depot maintenance backlog decreases the Guard's
    capability to meet assigned materiel readiness goals, decreases the
    quantities of serviceable equipment available to support training
    programs, and impairs the capability to rapidly mobilize and deploy
    high priority units. Depot level maintenance of aging equipment is the
    key to obtaining the highest possible level of equipment readiness.
    Velocity Management
        The 1990s have seen dramatic changes in the nature and
    effectiveness of logistical operations within civilian industry. Taking
    advantage of these advances, Velocity Management (VM) is a Total Army
    process designed to improve Army logistics responsiveness in garrison
    and when deployed. The program objective is to decrease reliance on
    stockpiled commodities and rely on automation, speed, and
    transportation to move logistics support into the hands of soldiers as
    fast as any first-rate commercial activity, while providing a hedge
    against unforeseen interruptions in the logistics pipeline.
    Implementation of VM will assure outstanding supply performance by
    finding and eliminating sources of delay and unreliability in the Total
    Army's logistics processes. In order to effectively implement VM, the
    ARNG logistics community will measure its performance closely in order
    to identify obstacles and bottlenecks and implement changes that
    improve its support to the commanders in the field. Ultimately, VM will
    result in reduced stocks while providing real dollar savings as the
    ARNG replaces logistics mass with precision and speed. The ultimate
    goal is to improve the effectiveness of the logistics processes in
    sustaining mission accomplishment by working better, faster, and
    smarter.
    Logistics Systems Automation Integration
        The Army logistics community has made great strides in recent years
    in its efforts to make maximum use of every dollar. Initiatives taken
    by Guard logistics personnel include a wide variety of cost avoidance
    efforts:
      --The Army Guard has made great strides in improving logistics
            automation through a transition from the ARNG unique automated
            supply management systems to the Standard Army Management
            Information Systems (STAMISs).
      --The ARNG has virtually eliminated manual property books through
            fielding of the Standard Property Book System-Redesign (SPBS-R)
            within its units. It is supported by the Standard Property Book
            System-Resign Installation/TDA (SPBS-R I/TDA) within the office
            of the United States Property and Fiscal Officer (USPFO). These
            information systems significantly improved equipment
            accountability and enhanced property reporting accuracy.
      --The ARNG is currently engaged in the fielding of the Unit Level
            Logistics System-S4 (ULLS-S4). This effort was initiated in
            fiscal year 1997 with the training of cadre personnel in each
            of the 54 states and territories in the use of the system. Upon
            receipt of the hardware in fiscal year 1998, units across the
            country began rapidly automating day to day supply operations.
            It is estimated that all appropriate ARNG units will be
            operating ULLS-S4 by fiscal year 2000.
      --The ARNG eliminated the use of the Supply Accounting Management
            Information System (SAMIS), a Guard unique supply management
            system in fiscal year 1997 with the implementation of the
            Standard Army Retail Supply System (SARSS) within the USPFOs
            and those Divisions/Brigades operating full-time Class IX
            (repair parts) support activities. Fielding of SARSS to the
            remaining or part time Modified Table of Organization and
            Equipment (MTOE) units continues as hardware becomes available.
            A completion date for this initiative has not been established.
            To enhance equipment management, the ARNG is in the process of
            fielding the SARSS gateway (SARSS-G) system allowing for an
            improved lateral redistribution system of Class IX. Projected
            completion of the fielding of SARSS-G by early fiscal year
            2000.
      --The ARNG is a full partner and is actively working with the
            Combined Arms Support Command (CASCOM) in the development of
            the Global Combat Service Support--Army (GCSS-Army) system
            which will replace those systems discussed above with a fully
            integrated networked system beginning in fiscal year 2000.
      --The Guard maintains one significant unique supply system, the
            Objective Supply Capability Adaptive Redesign (OSCAR). OSCAR
            provides a fully automated system to manage Class VII (major
            end items) of equipment including trucks, radios, tanks and a
            variety of other equipment. This system allows for day to day
            distribution and redistribution decisions from item managers at
            the National Guard Bureau (NGB) level to the appropriate
            personnel in the state and territories. OSCAR covers functions
            not currently available in supply STAMISs and has been
            effective in enhancing ARNG readiness. Development/refining of
            OSCAR will continue through fiscal year 2000.
        The Reserve Component Automation System (RCAS) continues to provide
    supply management functions and reports needed for daily operations but
    not found within the STAMISs. Additionally, Project Manager (PM) RCAS
    is working closely with CASCOM in the development of programs to allow
    STAMISs to operate on RCAS hardware. This will result in further
    automation improvement to ARNG logistics management.
        Use of the supply STAMISs has not only improved day to day supply
    operations within the ARNG but has enhanced readiness by easing
    integration into the Active Army upon mobilization. The ARNG will
    continue to support the STAMISs through fiscal year 2000 and well into
    the next century.
    Operational Support Airlift Agency (OSAA)
        The Operational Support Airlift Agency is a Department of the Army
    Field Operating Agency under the National Guard Bureau which provides
    management and oversight for the Total Army Operational Support Airlift
    (OSA) program. Headquartered at Fort Belvoir, VA, the Brigade (OSAA)
    and Battalion level commanders (OSACOM) share a common staff for
    economy and efficiency. OSAA/OSACOM managed assets are stationed in 72
    locations throughout CONUS as well as five locations OCONUS (Alaska,
    Hawaii, Panama, Puerto Rico and the Virgin Islands). These
    geographically dispersed locations provide the best mix of operational
    and training support to Army, ARNG and USAR units distributed
    throughout the area of operations.
        The OSAA/OSACOM is a multi-component organization missioned to
    provide training and seasoning of fixed wing aviators, as well as a
    CONUS rotation base for Active Component fixed wing pilots and
    immediate OSA support for contingency operations. In fiscal year 1998,
    ARNG OSA aircraft flew 56,915 hours, supported 66,996 passengers and
    transported 566,806 pounds of cargo in direct support of Army missions.
    All of this transportation was provided while accomplishing training in
    support of their wartime mission. This effort provided the added
    benefit of cost avoidance totaling approximately $42 million in
    commercial transportation costs for the DOD.
        The Operational Support Airlift Agency is at the forefront and
    leading the charge to leverage the efficiency of the Reserve Components
    in multi-component units as proof of the concept for the Total Army's
    ``One Team, One Fight, One Future'' concept.
    Aviation Maintenance
        Army Aviation Support Facilities (AASF) and Aviation Classification
    Repair Area Depots (AVCRAD) provide the foundation for the Army
    National Guard aviation logistical support efforts. These facilities
    are designed to provide logistical support for non-modernized aircraft.
    While these facilities have successfully supported ARNG aviation
    logistical support needs in the past, doctrinal procedures governing
    the operation of these facilities must be updated to effectively
    support an increasingly modern, complex and expensive aircraft fleet.
    The ARNG Aviation Logistics Program is meeting this challenge through
    the reengineering of our AASFs and AVCRADs with two innovative logistic
    concepts, AASF-2000 and AVCRAD 21.
                AASF-2000
        The AASF-2000 Test Plan is focused on the management and
    accountability of logistics processes by forming teams to support the
    Army's modernized aviation fleet. The main concepts of AASF-2000 are:
      --A Quality Assurance Section (QAS) dedicated to ensuring maintenance
            processes are completed in a safe, high quality operation with
            random in-work inspections.
      --A Production Control Section (PSC) dedicated to managing logistical
            services to satisfy operational and supported unit readiness
            requirements with emphasis on developing and managing
            production schedules. The PSC is the primary point of contact
            for all automation actions.
      --Systems Teams dedicated to inspecting and correcting deficiencies
            found on Phase Maintenance Inspections or other scheduled
            maintenance actions and also having Technical Inspectors
            assigned to ensure quality work.
      --Phase Teams dedicated to inspecting and correcting deficiencies
            found on Phase Maintenance Inspections or other scheduled
            maintenance actions and also having Technical Inspectors
            assigned.
      --Material Management Section dedicated to managing the budget,
            repair parts, hardware, HAZMAT, Facilities Management and POL
            functions.
                AVCRAD 21
        The second major modernization initiative, AVCRAD 21, seeks to
    change the aviation logistical support ``management philosophy'' within
    the aviation community as a whole. The AVCRAD 21 Logistic Program
    mission statement is ``a quality oriented group of aviation
    professionals, committed to a common goal of enhancing Army National
    Guard aviation logistics objectives, capable of meeting the challenge
    of the 21st century''. This will be done primarily by changing the
    philosophy of doing business at the AVCRADs in order to realize greater
    efficiencies and by procuring and fielding new test equipment and tools
    to the AVCRADs for repair of modernized aircraft and components. The
    main concepts of AVCRAD 21 are:
      --AVCRADs transition to specific areas of concentration (80 percent
            of man-hours in component repair and 20 percent of man-hours
            spend in airframe repair).
      --Reduction of wholesale requisitions through repair of items that
            are most costly in terms of readiness and resources.
      --Establish regional Authorized Stockage Lists (ASL) and Reparable
            Management (RM) programs with all Class IX (repair parts)
            managed by the AVCRADs.
      --Use of AVCRAD contact teams for airframe maintenance.
                              resourcing the force
        The Army National Guard is funded by three separate budget
    appropriations: National Guard Pay and Allowances (NGPA), Operations
    and Maintenance (OMNG), and Military Construction (MCNG). The ARNG
    fiscal year 2000 Budget Estimate Submission (BES) for these three
    accounts totals more than $6.2 billion. This represents approximately
    9.4 percent of the Army's $65.9 billion budget for this period.
        In addition, the Army has identified in its investment accounts,
    equipment that will be distributed to the Army Guard for implementation
    of ADRS, which converts up to 12 ARNG Brigades to Combat Support and
    Combat Service Support to meet the needs of the Army.
    Military Construction
        Fiscal year 1998 saw a number of much needed Army National Guard
    military construction (MILCON) projects initiated throughout the
    nation. In all, 29 major construction projects worth over $123 million
    were awarded in fiscal year 1998. An additional 27 projects projects
    are scheduled to be awarded in fiscal year 1999.
        The fiscal year 1998 appropriation of $122 million funded 24
    projects, including $105 million for major construction, $6.33 million
    for planning and design and $10.90 million for unspecified minor
    construction. This appropriation includes $3.7 million for a
    supplemental appropriation to repair storm damage in Georgia.

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

               ARMY NATIONAL GUARD APPROPRIATIONS, BY FISCAL YEAR
                              [Dollars in millions]
    ------------------------------------------------------------------------
                                           Fiscal year--             Change
                                 ---------------------------------    from
                                                                     fiscal
                                     1997       1998       1999    year 1998
                                                                   (percent)
    ------------------------------------------------------------------------
    Personnel...................     $3,397     $3,459     $3,494       2.13
    O&M.........................      2,298      2,419      2,437        .74
    MILCON......................         78        122        145      16.39
    ------------------------------------------------------------------------

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

                            knowledge infrastructure
        Modernization and increased utilization of knowledge infrastructure
    will decrease the time spent on maintenance of databases and increase
    the speed in which units can be mobilized and deployed. The key to the
    ARNG knowledge infrastructure effort is the design, maintenance and
    upgrade of a system that will be cross dimensional within the Active
    and Reserve Components.
    Information Access
        Seamless, integrated access to information represents a critical
    objective for the Army National Guard as the 21st century begins.
    Efficient information access will play a vital role in meeting many
    Army and DOD reform initiatives, which include efforts to reduce
    operational costs and make more efficient use of scarce resources. High
    speed information access will make important contributions to efforts
    in areas such as distance learning, electronic publications and forms,
    training simulation and World Wide Web technology applications.
        The ARNG met with considerable success in its efforts to leverage
    high-speed information access during fiscal year 1998. Chief among
    these successes was the use of existing Distance Learning and RCAS
    telecommunications infrastructure to develop a single network combining
    voice, video and data capabilities. This initiative cut costs and
    improved efficiency by consolidating and upgrading numerous
    telecommunications functions that had previously operated in solitary
    ``stovepipe'' environments. During the year, the ARNG completed the
    task of integrating the RCAS data network into the Asynchronous
    Transfer Mode (ATM) Distance Learning Network. Additionally, minor
    modifications to the RCAS design enabled two States to integrate voice
    traffic into their network, significantly reducing long distance
    telecommunications costs. This new approach will be expanded to include
    an additional six states in the first quarter of fiscal year 1999. When
    fully operational, this system, dubbed Guardnet XXI, will provide more
    efficient, effective and economical high speed communications
    throughout the 54 states and territories.
    Software Development
        In addition to its efforts in leveraging the efficiency of existing
    networks, the Guard is leading the way in creating a more efficient
    software development paradigm. Throughout the year, the Guard continued
    to expand the use of integrated Computer Assisted Software Engineering
    (CASE) tools and structured engineering methodology in streamlining
    Information Operations. Expansion of the CASE tool set provides the
    capability to develop reusable software components, enforces the use of
    ``business rule'' and data integrity, and is platform and database
    independent. In one example of the system's application flexibility, a
    management system for Title 10 soldiers was recently completed using
    components from an ammunition fielding software system fielded in 1997.
    The ultimate objective is to create a broad array of reusable software
    objects and components that can be used by application designers to
    meet a wide variety of ARNG programming requirements.
    Information Security
        Even as the Guard looks to the future in leveraging information
    technologies, efforts continue to safeguard existing information based
    hardware and software. Working in conjunction with DISC4, the ARNG
    began a phased implementation of intrusion detection systems and
    firewalls designed to control network access and increase security. The
    intrusion detection system was implemented in eighteen states during
    fiscal year 1998 with remaining states scheduled for implementation in
    fiscal year 1999. Firewalls were implemented at all three NIPRNET
    access points and many of the States have implemented firewalls at the
    local level. Program goals for fiscal year 1999 include implementation
    of firewalls between military network and state network connections.
    Ultimately, the information security program must meet DOD security
    standards while guaranteeing State access requirements.
    Year 2000 (Y2K) Compliance
        Along with information security concerns, the Guard continues to
    prepare for the potential effects of the Y2K phenomena on computerized
    information systems. During the course of fiscal year 1998, the Guard
    made significant strides toward meeting DOD Y2K compliance objectives
    for its automation systems. Various legacy platforms and operating
    systems have been transitioned to compliant Commercial off the Shelf
    (COTS) software and hardware. Additionally, two of the nineteen
    critical Guard automation systems were certified as Y2K compliant
    during the course of the year. Testing and code fixes have been
    initiated on the remaining seventeen identified systems, which will be
    certified as Y2K compliant by the end of fiscal year 1999. Finally, a
    study was performed on the ARNG telecommunications infrastructure, and
    funding was reprogrammed to procure replacements and upgrades to ARNG
    PBXs and key systems as a result of this analysis. RCAS officials also
    undertook to ensure that their infrastructure was Y2K compliant. All of
    these measures will ensure that the Army National Guard is fully
    prepared for the challenges of the year 2000.
    Reserve Components Automation System (RCAS)
        The Reserve Component Automation System (RCAS) is an automated
    information management system that provides the Army the capability to
    more effectively administer, manage, and mobilize Army National Guard
    and United States Army Reserve forces. RCAS supports daily operational,
    training and administrative tasks at all Guard and Reserve locations,
    providing timely and accurate information to plan and support
    mobilization. Fully deployed, RCAS will link over 10,500 Guard and
    Reserve units at over 4,000 sites located in all 50 states, the
    District of Columbia, Guam, Puerto Rico, the Virgin Islands, Europe and
    the Pacific Rim.
        RCAS consists of commercial off-the-shelf (COTS) hardware and
    office automation software, government off-the-shelf software, and
    newly developed software applications integrated into an open system
    personal computer based architecture. The system has been designed to
    take advantage of the latest technology while providing the Army with
    the most cost-effective solutions to meet the automation needs of the
    Reserve Component.
        RCAS will support eleven user prioritized functional areas:
    aviation, facilities, logistics, force authorization, human resources,
    information management, internal review, mobilization, resource
    management, safety, and training. The RCAS program management office
    works closely with both Active and Reserve Component information
    management personnel to facilitate the software development effort and
    ensure cost effective software acquisition.
    Fielding and Implementation
        RCAS Infrastructure fielding, which includes wide area network
    inter-connectivity, COTS office automation software, and unclassified
    as well as classified capable workstations, began in fiscal year 1997
    and is scheduled to be completed in fiscal year 2002. Data servers and
    logistics applications were released to the field in September 1998.
    Functionality in force authorization, security, and training is
    scheduled for approval in the summer of 1999. Full RCAS functionality
    is expected to be achieved in fiscal year 2002.
        As a part of the overall ARNG information management effort, RCAS
    has teamed with the National Guard Distributive Training Technology
    Project (DTTP) to migrate Army National Guard State Area Commands to
    the GuardNet XXI Asynchronous Transfer Mode (ATM) telecommunications
    backbone. All states and territories are now passing RCAS traffic over
    the Guardnet XXI backbone. Integration of RCAS and DTTP into the
    Guardnet XXI network will result in significant benefits for both of
    these important information systems.
        The RCAS program is on schedule and within cost. To date, 43,425
    out of over 56,000 personal computers that compose the majority of the
    system hardware have been placed in the hands of the user community.
    Through the end of fiscal year 1998, fielding has been completed at 28
    of the 94 commands that will ultimately receive RCAS. By the end of
    fiscal year 1999, 39 commands will be completed. The system has already
    been used to communicate with soldiers in Bosnia and to respond to
    disasters such as Midwest floods, Northeast ice storms, and El Nino on
    the West Coast. Imagination is the only limiting factor for its use.
                               training the force
        The Guard continued to place great emphasis upon the training and
    education of ARNG personnel in fiscal year 1998. Existing training and
    education activities like Guard participation at the Combat Training
    Centers and the Guard Aviation Training Sites were complimented by a
    variety of new initiatives. Taken together, these efforts provide Guard
    soldiers with unparalleled training and educational opportunities for a
    better trained and educated force in the future.
    Training Sites and Centers
        The ARNG participates in all of the Army's Combat Training Centers
    (CTC); The National Training Center (NTC), Fort Irwin, CA, the Joint
    Readiness Training Center (JRTC), Fort Polk, LA, the Combat Maneuver
    Training Center (CMTC), Hohenfels, Germany, and the Battle Command
    Training Program (BCTP), Fort Leavenworth, KS. The Brigade Command
    Battle Staff Training Program (BCBST) is a subset of BCTP. The Army CTC
    program is divided into live simulation (NTC, JRTC, and CMTC) and
    constructive simulation (BCTP and BCBST). The ARNG CTC program
    schedules units to attend the CTCs in the following capacities;
    rotational (BLUFOR) units, augmentation to other ARNG and AC rotational
    (including BLUFOR) units, augmentation to CTC Opposing Forces (OPFOR),
    and other types of support based on the needs of the Combat Training
    Centers.
                National Training Center (NTC)
        The National Training Center, located at Fort Irwin, CA is the
    Army's premier heavy maneuver Combat Training Center. As large as the
    state of Rhode Island, the fully instrumented NTC allows live Brigade
    level force-on-force exercises to be conducted several times each year.
        Participation at the NTC is a growing part of the Guard training
    strategy, with over 20,000 Guard soldiers participating last year
    alone. The ARNG completes one brigade NTC rotation each year. Rotations
    are allocated to the eight mechanized infantry/armored enhanced
    Separate Brigades (eSBs), making the rotation schedule once every eight
    years for each brigade.
        Based on associated Active Component unit input and using FORSCOM/
    ARNG Regulation 350-2, dated 12 June 1998, (FORSCOM Commander's
    Assessment Matrix), the Adjutants General of the eSB's state/territory
    validates that the unit met the training requirements and approves
    their participation in it's scheduled rotation. The 155th enhanced
    Separate Armored Brigade (MS) is scheduled to attend in fiscal year
    1999 and the 218th eSB (mechanized infantry) is scheduled to
    participate in fiscal year 2000.
        In addition to unit based NTC rotations, the ARNG also receives and
    allocates three NTC Leader Training Program (LTP) rotations annually.
    The LTPs are six days in length, and enhance staff coordination and
    combat decision making skills. The three LTPs are allocated to heavy
    brigades that attend NTC. LTPs include a Tactical Exercise Without
    Troops (TEWT) and a JANUS battle staff trainer simulated exercise tied
    to the CTC terrain and fought against the CTC OPFOR.
                Joint Readiness Training Center (JRTC)
        The Joint Readiness Training Center (JRTC) is the light infantry
    equivalent of the Army's NTC. Located at Fort Polk, LA, JRTC hosts
    light infantry and special operations forces from all components for
    rotations throughout the year. The ARNG receives one brigade rotation
    each year. The rotations are allocated to the seven light infantry
    enhanced Separate Brigades (eSBs). As with the other eSBs, the Adjutant
    General determines if the unit will attend. The 29th eSB (HI) is
    scheduled to attend in fiscal year 1999 and the 76th eSB is scheduled
    to participate in fiscal year 2000.
        The ARNG receives and allocates two JRTC LTP rotations annually.
    These rotations are allocated to the eSBs based on units' relative
    calendar proximity to scheduled JRTC rotations.
        As with the NTC, training opportunities exist for Combat Arms,
    Combat Support and Combat Service Support units to augment BLUFOR and
    OPFOR units and to provide installation support.
                Combat Maneuver Training Center (CMTC)
        The Combat Maneuver Training Center (CMTC), Hohenfels, Germany,
    combines aspects of the NTC and JRTC for U.S. Forces assigned to U.S.
    Army Europe. Attendance at the CMTC involves Overseas Deployment
    Training (ODT). The scheduling of units and training opportunities is
    managed by NGB. During fiscal year 1999 the ARNG trained over 3,600
    soldiers at the CMTC. These units included 17 OPFOR infantry, 16
    engineer sapper teams, 6 construction engineer battalions, 16 DS/GS
    maintenance companies, 6 military police companies and various smaller
    cells/individual soldier augmentations in finance, judge advocate
    general, public affairs, aviation, chaplain and signal branches. ARNG
    support for the CMTC is considered vital to the Center's continued
    viability as a CTC.
    Training Opportunities
        In addition to dedicated Guard rotations at NTC and JRTC, numerous
    opportunities exist for Guard units to augment Active Component
    maneuver forces at the CTCs. Units required by the CTCs for the
    augmentation of Active Component rotations include field artillery MET
    sections and Tactical Operations Centers (TOC), Main Support
    Battalions, air defense artillery Batteries, military police platoons,
    chemical companies, and military intelligence companies. In addition,
    each NTC and JRTC rotation requires engineer and infantry elements to
    serve as Opposing Forces (OPFOR), and various CSS assets to provide
    general rotation support.
    Leveraging Training Technology
        Maintaining peak combat readiness on an average of 39 training days
    annually requires that the Guard make extremely effective use of its
    limited training time. With this constraint in mind, the Army National
    Guard made extensive use of simulation in training again this year. As
    in the past, these simulations have provided a stressful training
    environment for commanders, staffs, units, and individual soldiers to
    practice skills necessary for fighting and winning on today's
    battlefield. Simulations provide equivalent difficulty and greatly
    enhanced repetitive training at a fraction of the cost of ``full-up''
    live training experiences. The Army National Guard plans to
    aggressively pursue the leveraging of simulation technologies to
    enhance training in the future.
                ARNG Aviation Training Sites (AATS)
        The ARNG missions four Aviation Training Sites designated as
    national training assets for the Total Army. The Eastern ARNG Aviation
    Training Site (EAATS) is located at Fort Indiantown Gap, Pennsylvania
    and conducts Aviator Qualification Courses, Enlisted Training Courses,
    NCOES and Foreign Military Sales training for UH-1, UH-60 and CH-47D
    helicopters. The Western ARNG Aviation Training Site (WAATS) is located
    at Silver Bell Army Heliport, Marana, Arizona and conducts Aviator
    Qualification Courses, Enlisted Training Courses, NCOES, and Foreign
    Military Sales training for AH-1F, OH-58 helicopters and RAID aircraft.
    AH-1F training is only conducted at the WAATS for the Total Army and
    future plans are to conduct AH-64A helicopter training at this location
    in fiscal year 2000. The High Altitude Aviation Training Site (HATS) is
    located in Gypsum, Colorado and conducts high altitude power management
    courses in Utility and Observation aircraft for Active Component,
    Reserve Component and Foreign Military Sales. The Army National Guard,
    under the Operational Support Airlift Agency (OSAA) also operates the
    Fixed-Wing Army Aviation Training Site (FWATS) in Clarksburg, West
    Virginia. The FWATS conducts Aircraft qualification courses in C-12, C-
    26, and C-23 fixed wing aircraft for the Total Army. Both the EAATS and
    WAATS are regional simulation sites, offering simulation support to the
    Total Army in AH-1F, UH-1H, UH-60, and AH-64 helicopters. A CH-47D and
    a UH-60 simulator are being added to EAATS and an additional AH-64
    Combat Mission Simulator (CMS) to WAATS.
                Aviation Combined Arms Tactical Trainer
        The Army National Guard is developing an Aviation Reconfigurable
    Manned Simulator (ARMS) as a cost-effective solution to enhance flying
    safety and readiness. This system is being developed with the mutual
    cooperation and support of the U.S. Army Aviation Center (USAAVNC) and
    the Army's Simulation, Training and Instrumentation Command (STRICOM).
    It can be quickly reconfigured to each of the rotary and fixed wing
    airframes flown in the ARNG. The device is a collective training
    simulator that provides for a 360 degree virtual environment, a helmet
    mounted display system, accurate cockpit housing, realistic controls
    and essential panels, and tactile-interactive cockpit panels. Each ARMS
    provides training in individual and crew tasks, and focuses on
    collective, combined arms, and joint service operations. Reconfigurable
    simulators such as ARMS complement existing older technology simulators
    as well as future training technologies. Army National Guard Aviation
    has established a requirement for six company-size sets of 6 cockpits
    each for a total of 36 cockpits. Each of these company sized simulator
    sets will be transportable to Army Guard units as needed.
        The U.S. Army Aviation Command (USAAVNC) recognized ARMS satisfies
    many of the collective training simulation tasks of the Army's planned
    Aviation Combined Arms Tactical Trainer (AVCATT) in an extremely cost
    effective manner. As a result, USAAVNC merged it into the Total Army's
    simulation strategy, and it is now called AVCATT-ARMS (AVCATT-A).
                Distributed Learning Initiative
        The Army schoolhouse is becoming multi-dimensional. The Total Army
    Distance Learning Program (TADLP) will provide this capability by
    leveraging distance learning (DL) methods and exploiting the growing
    power of computer-based systems and the internet. The Army National
    Guard Distributed Learning initiative will extend the reach of the
    TADLP and the Total Army School System (TASS) to soldiers in their
    communities by providing high-quality, locally-accessible training and
    education in support of the total force.
        The DL initiative represents the future of training and education
    in the Army National Guard. It significantly expands the potential to
    improve readiness by making training more readily available to
    soldiers. The goal is to shift from the traditional resident training
    methodology to greater reliance on DL technology, methods and
    materials. The strategic plan is to maintain readiness through high-
    quality, locally accessible training in support of the total force. The
    strategy consists of four components: network and classrooms,
    courseware, instructor training and student/training support.
        Network/Classrooms.--A critical component to the success of the DL
    initiative is GUARDNET XXI. This provides a robust and dynamic
    telecommunication infrastructure consolidating existing educational
    programs into an efficient and economical integrated network. The
    National Guard Distributed Training Technology Project (DTTP) provides
    this technological component. During the first quarter of fiscal year
    1998, the DTTP succeeded in connecting NGB to all State Area Commands.
    This network is expanding through the installation of high-tech
    classrooms at our training sites, armories and surrounding communities,
    exceeding 150 by the end of fiscal year 1999. By the end of fiscal year
    2002, 639 sites will offer fully interactive learning facilities for
    both military and non-military studies. The DTTP infrastructure of 639
    sites will extend the reach of TADLP from proponent schools and TASS
    training battalions to soldiers in their communities.
        Courseware Development.--The TADLP calls for the redesign of 525
    DMOSQ courses over a 12-year period ending in fiscal year 2010. The
    National Guard Professional Education Center (PEC) developed eight
    courses and is targeting seventy as a total program inventory.
        Instructor Training.--The PEC is currently conducting DL instructor
    training courses to supplement the Army Training Support Center (ATSC)
    course teaching the additional DL capabilities of the DL classrooms.
        Student/Training Support.--Army Training and Resources Requirements
    System (ATRRS) now supports DL course enrollment and reporting.
    Distance Learning orientation videos created specifically for
    commanders and students facilitate the transition to DL. The four
    pillars that support a successful transition to DL include Student
    Administration, Program Orientation, Instructor Resources and Student
    Support Services.
                SIMITAR Training Exportable Package (STEP)
        While ARMS revolutionizes the way in which Guard aviators train,
    the STEP Program will bring similar advances to the world of ground
    systems training. The Simulation in Training for Advanced Readiness
    (SIMITAR) program launched the SIMITAR Training Exportable Package
    (STEP) as a viable cost-effective method of training Brigade Combat
    Teams (BCT) in preparation for Combat Training Center (CTC) rotations.
    The package contains a training strategy, methodologies and
    technologies necessary for the preparation of ARNG brigades to conduct
    Brigade Combat Team (BCT) operations during a CTC rotation.
        STEP is a unit sustainment-training program that is home station
    based and employs simulations to the greatest extent possible to
    conduct structured training. The strategies, methodologies and
    technologies developed for SIMITAR are refined, packaged and presented
    to ARNG separate brigades during years six, seven, and eight of their
    eight year training cycle.
        STEP provides training in three key areas:
      --Battlestaff Training.--This component uses the JANUS constructive
            exercise system to train battalion and brigade battle staffs in
            a rigorous and structured way. JANUS exercises are conducted at
            home station.
      --Unit Collective Training.--This component employs both virtual
            maneuver and virtual gunnery devices to conduct home station
            training. The Compressed Gunnery Strategy is the centerpiece of
            the collective training aspect allowing a unit to conduct both
            gunnery and maneuver in the same year.
      --Combat Service Support (CSS) and Individual Training.--STEP uses
            computer based training systems to the maximum extent possible.
            The CSS training strategy emphasizes a focus on CTC support to
            maneuver battalions in all three combat missions.
        STEP is the necessary system to prepare a BCT to meet the rigors of
    a CTC rotation. The implementation of a sequential, device-based
    progressive training strategy complimented with demanding live training
    will help produce successful CTC rotations for ARNG enhanced Separate
    Brigades.
                TROUPERS
        While hardware infrastructure is critical to the Guard's growing
    training capability, management and decision making resources are also
    extremely important components. The Training, Readiness and Operations,
    Unit Planning, Execution and Resourcing System (TROUPERS), provides
    Army Guard leaders with the tools to maximize training benefits and
    support the full execution of training funds. TROUPERS is a reports
    generator that draws information from existing Standard Army Management
    Information Systems (STAMIS) databases.
        This application provides the state and national leadership the
    tools to plan training, allocate resources and monitor the execution of
    annual training, schools, special training and Inactive Duty Training.
        The system allows senior leaders access to budget information
    relating to reservation, obligation, execution and forecasted year-end
    execution for Annual Training, Individual Duty Training, Schools and
    Special Training.
                             quality installations
        State-of-the-art installations provide the foundation upon which
    Army National Guard readiness is built. Many Guard facilities do not
    yet provide the community based, power-projection platforms outlined in
    the ARNG Quality Installations goal. Military construction and
    revitalization efforts aimed at meeting Guard installation objectives
    met with considerable successes during fiscal year 1998. Nonetheless,
    much more remains to be done.
    Facilities Overview
        The Guard operates over 3,100 armories in nearly 2,700 communities
    in 54 states and territories. In addition, the Army National Guard
    federally supports the operation and maintenance of more than 19,000
    training, aviation, and logistical facilities located throughout the
    nation.
    Facility Operations and Maintenance
        In fiscal year 1998, $235.7 million, or $3.03 per square foot, was
    provided for Real Property Operations and Maintenance, $40.4 million
    more than in fiscal year 1997. This program pays for salaries required
    to support facility operations and maintenance as well as providing
    funds for engineering services, utilities, minor construction,
    maintenance and repair projects, and supplies required to extend the
    useful life of Guard facilities. The federally supported square footage
    increased from 65.0 million square feet in fiscal year 1997 to 70.7
    million square feet in fiscal year 1998, while equipment modernization
    and aging facilities have increased overall maintenance requirements.
    In fiscal year 1988, $3.41 per square foot was available to operate and
    maintain Army Guard facilities. In fiscal year 1999, that amount is
    $3.03 per square foot, or $1.82 in constant fiscal year 1988 dollars, a
    decrease of almost 50 percent.
    Base Realignment and Closure Commission (BRAC)
        BRAC findings and recommendations in 1995 resulted in the transfer
    of four active component installations to the National Guard. The
    transfer of Fort Pickett, VA, and Fort Chaffee, AR, took place in
    fiscal year 1998. Fort Indiantown Gap, PA, will transition in fiscal
    year 1999, and Fort McClellan, AL, will transition in fiscal year 2000.
    Environmental Programs
        The Army National Guard Environmental Program emphasizes
    responsible stewardship of the land and facilities managed by the ARNG
    and compliance with environmental laws and regulations. This is
    accomplished by promoting the Army's environmental goals through ARNG
    environmental compliance, conservation and restoration efforts in all
    54 states and territories.
                Compliance
        The Army National Guard environmental compliance strategy
    emphasizes early identification of problems and immediate corrective
    action. Army Guard environmental self assessment programs, such as
    Environmental Compliance Assessment System (ECAS), Internal Compliance
    Assessment System (ICAS) and Installation Status Reports (ISR), will
    greatly improve early identification of activities and installations
    requiring a corrective action to meet regulatory standards.
    Unfortunately, constraints in the fiscal year 2000 budget will make
    compliance with regulatory requirements difficult. Continued deferral
    of corrective actions due to resource constraints may increase the
    magnitude of the corrective action costs and risks the loss of funds to
    the payment of fines and penalties.
        In keeping with its environmental strategy, the Guard is acquiring
    pollution prevention technologies which will support military
    operations and training while reducing the expense of hazardous waste
    management and disposal. ``Green Ammunition'' for 5.56 mm weapons
    should begin to replace lead based bullets in fiscal year 2000. This
    will dramatically reduce potential threats to surface water and
    groundwater posed by lead ammunition.
        New pollution prevention technologies, such as improved paint
    stripping equipment will require additional resources. Much of the
    funding of pollution prevention initiatives requires the return on
    investment time of five years or less.
        Camp Edwards at the Massachusetts Military Reservation (MMR)
    consumes nearly 10 percent of the total ARNG compliance budget.
    Although little actual contamination was discovered in the first year
    of the investigation, intense regulatory and community pressure to
    identify potential contamination will extend the investigation beyond
    fiscal year 2000. Our ability to determine whether military training
    over the past seventy years has impacted the underlying sole source
    aquifer will be based upon the results of an extensive field
    investigation and the data forthcoming from Army munitions tests.
    Training will continue to be impacted until these costly and time
    consuming requirements are completed. Continuance of compliance funding
    for MMR is essential to answering environmental questions, which not
    only affect MMR but can be asked at other similar training locations.
                Conservation
        The ARNG has successfully used programmatic environmental
    assessments to evaluate equipment fielding in the Paladin, MLRS and UH-
    60 programs in order to ensure environmental issues are nationally
    addressed as required by the National Environmental Policy Act (NEPA).
        Planning level surveys involving pest management, wetlands, soils
    and cultural resources using national contracts are nearing completion.
    These efforts will ensure that all ARNG training sites have Integrated
    Natural Resource Management Plans, Pest Management Plans and Cultural
    Resource Management Plans in place by fiscal year 2001.
        Currently 43 states are using Geographic Information Systems (GIS)
    as decision-making tools ensuring operational and stewardship missions
    of the training sites are met. The ARNG sponsored GIS support contract
    at Utah State University is one of four DA sponsored Regional Support
    Centers around the country. The ARNG is also supporting six AC
    installations.
        The Forestry/Agricultural program continues to provide funding back
    to the training sites and local communities in the form of timber sales
    and grazing fees. In fiscal year 1999 over $1.4 million will be
    returned to the ARNG.
                Restoration
        The ARNG's most significant environmental challenge continues to be
    the cleanup of past-practice contamination. To meet this challenge, the
    ARNG places cleanup priority on sites determined to have a high
    relative risk for impacts to human health and the environment.
        In order to determine the relative risk for their sites, the ARNG
    is conducting Preliminary Assessments and Site Inspections (PA/SI).
    These PA/SI are resourced with program management funds from the
    Environmental Restoration Army (ER,A) account. Army Guard sites cannot
    receive further ER,A account funding without completion of the relative
    risk evaluation. If the number of PA/SI required exceeds the amount of
    available program management funds, Operations and Maintenance funds
    may be needed to meet this requirement.
        Army Guard environmental restoration efforts can be found at sites
    across the country. The cleanup at Camp Edwards is currently the ARNG's
    largest restoration program. Remedial action design and approval for
    all of the known restoration sites should be completed in fiscal year
    2000. Operation of the various remediation facilities will be required
    for some 20 to 50 years before the installation can be removed from the
    National Priority List.
        The restoration of sites within Base Realignment and Closure (BRAC)
    95, Reserve Component enclaves will also require a determination of
    relative risk. PA/SI for areas of concern within these BRAC 95 Reserve
    Component enclaves will be conducted with Department of the Army BRAC
    funds. Sites requiring investigation beyond the PA/SI phase will
    compete with other sites for ER,A funding.
                              missioning the guard
    The Army National Guard Worldwide
        Army National Guard personnel supported numerous missions at home
    and around the world during the year. Some of these efforts came in
    response to the needs of theater Commanders in Chief (CINC), while
    others filled the needs of Presidential Selected Reserve Call-ups to
    support missions in Europe and Southeast Asia. Domestically, Guard men
    and women answered the call for numerous state missions throughout the
    year.
                U.S. European Command (USEUCOM)
        Over 2,000 Army National Guard soldiers were mobilized to support
    Commander in Chief, U.S. Army Europe (CINC USAREUR) in Operation JOINT
    GUARD/JOINT FORGE in the Balkans during fiscal year 1998. Units
    deployed in support of this effort included Infantry, Firefighting,
    Special Forces, Military Police, Public Affairs, Transportation,
    Aviation, Finance, Personnel, Field Artillery Target Acquisition, and
    Medical assets. To date, approximately 5,000 soldiers from more than
    160 units have mobilized for active duty during all rotations in
    support of this mission. The total deployability rate was 99 percent
    for the first rotation, 98 percent for the second rotation, 100 percent
    for the 3d rotation, 100 percent for Supporting Force 1 and Supporting
    Force 2 and 100 percent for the Follow-on Force. Eighteen units have
    mobilized at Home Station and deployed directly to Europe without the
    aid of a Mobilization Station. Two other units which deployed through a
    mobilization station have redeployed directly to Home Station.
        TASK FORCE ABLE SENTRY (TFAS).--The ARNG provided elements of a
    Combat Support Company consisting of 65 soldiers from Missouri,
    Colorado and Illinois in support of Task Force Able Sentry in
    Macedonia. The TFAS Mission is to ensure that the unrest in the Former
    Yugoslavia does not spill over the border to the South, into Macedonia.
    These soldiers provided Engineer, Military Police and Aviation support
    for base camp operations at Camp Able Sentry. Following a successful
    six month rotation, the unit redeployed in February 1998. The ARNG has
    also committed to support future TFAS rotations with another Combat
    Support Company, an Infantry Company or Infantry Battalion.
        In addition to deployments directed by the President, the Guard
    deployed 9,395 soldiers and units into the European Command (EUCOM) to
    conduct training and to provide the Unified Command with a variety of
    requested capabilities. In the EUCOM area of responsibility, Guard
    soldiers participated in a variety of Joint Chiefs of Staff (JCS)
    exercises including Operations STRONG RESOLVE, COOPERATIVE
    DETERMINATION, BALTIC CHALLENGE, CORNERSTONE and PEACESHIELD. While
    supporting these efforts, Guard personnel conducted maintenance
    activities, executed engineer projects, and performed military
    intelligence, infantry and military police missions.
                U.S. Central Command (USCENTCOM)
        OPERATION SOUTHERN WATCH (OSW).--The Army National Guard continues
    to support CENTCOM with deployments in support of OSW. The first
    rotation of Army National Guard unit deployments occurred in February
    1998 mobilizing soldiers from the South Carolina and Florida ARNG. A
    second rotation of ARNG units deployed to Kuwait as an Aviation Task
    Force in September 1998. Units from the North Carolina and Alabama Army
    National Guard provided the task force headquarters, aviation crews
    (AH-64s and UH-60s), AVUM and AVIM maintenance. Florida and
    Pennsylvania ARNG units provided air traffic controllers for the task
    force. A second aviation task force rotation consisting of aviation
    crews from the Alabama Army National Guard (UH-60 Blackhawks) and air
    traffic controllers from the Maine ARNG will deploy in February 1999.
    Another aviation task force rotation consisting of aviation crews from
    the South Carolina ARNG (AH-64 Apaches) and Mississippi Army National
    Guard (UH-60 Blackhawks) will deploy in August 1999. Air traffic
    controllers from the Minnesota Army National Guard will be provided for
    this rotation. A company level force protection mission in Saudi Arabia
    will be provided by the 39th eSB, Arkansas Army National Guard
    beginning in June 1999. Future aviation missions and force protection
    missions are expected.
                U.S. Southern Command (USOUTHCOM)
        The Army National Guard played a key role in the successful
    execution of U.S. Southern Command missions during fiscal year 1998. In
    all, 10,513 Guard soldiers deployed into the region during the year.
    These training deployments focused on force protection activities,
    theater-wide equipment maintenance support, explosive ordnance
    detachment support to range clearing operations, and special forces
    training provided to foreign soldiers. During fiscal year 1998, the
    Guard participated in JCS exercises NUEVOS HORIZANTES and TRADEWINDS,
    providing both aviation and engineering support.
                U.S. Pacific Command (USPACOM)
        The Army National Guard was also active in supporting mission
    requirements in the U.S. Pacific Command. Over 1,000 Guard personnel
    participated in a variety of operations including JCS exercises COBRA
    GOLD, YAMA SAKURA, FOAL EAGLE, RSOI, NORTH WIND, KEEN EDGE/KEEN SWORD
    and ULCHI FOCUSED LENS.
        In addition to these JCS sponsored exercises, Guard soldiers
    supported Commander in Chief--Pacific requirements for engineers,
    special forces, infantry and military intelligence capabilities.
    The Army National Guard at Home
        In addition to Guard deployments in support of federal missions,
    the Guard plays an extensive and highly visible role domestically. As
    part of its unique ``dual-mission'' responsibilities, the Guard
    routinely responds to domestic requirements within each state. Local
    governments in 48 states requested emergency support through their
    state Governments 308 times in fiscal year 1998. The Army National
    Guard provided 374,115 soldier man-days in response to these
    requirements in reducing suffering and meeting critical support needs
    in local communities. Services provided by the Guard in support of
    state requirements included security, electrical power, heat, water,
    transportation services, food, and shelter. In addition, the Guard
    provided emergency engineering support to victims of numerous natural
    disasters, including floods, drought, ice storms, and tornadoes.
        In addition to responding to local emergencies, the Guard routinely
    performs missions that allow units to assist communities while
    performing required training activities. Under the Innovative Readiness
    Training (IRT) Program, the ARNG provided in excess of 205,000 soldier
    man-days to improve schools, parks and recreation facilities, build and
    maintain roads, and administer immunizations and provide medical care
    to under-served areas.
        Guard IRT projects can be found in communities throughout the
    United States. In California, for example, the Guard is leading an
    effort to construct access roads to the U.S. Mexican border to assist
    the Border Patrol in dealing with the growing tide of illegal
    immigrants and narcotics. In Alaska, the Guard is leading a five year
    project that will result in a 15 mile road connecting two villages on
    Annette Island (currently the trip can only be made by boat), while
    Maine, Oregon, and Alaska's ARNG medical exercises provide under-served
    populations with inoculations, physician contacts, dental care and
    optometrist services. IRT projects benefit both the ARNG and the
    communities it serves by increasing Guard training readiness and
    community support for the Army Guard at the same time.
        Another important Guard program in support of domestic needs
    involves counter-drug activities. In a program dubbed ``the war on
    drugs'', Guard soldiers provided in excess of 411,336 soldier man-days
    in support of local law enforcement and the Drug Enforcement Agency
    (DEA). Through these efforts, the Guard plays a significant supporting
    role in the battle to stem the flow of illegal narcotics into and
    across the United States.
                                quality of life
        Support for our soldiers requires that we increase the overall
    quality of life each service member enjoys. This quality of life
    extends from coverage for family members to safety both on and off
    duty. Our soldiers may not wear the uniform every day, but their total
    welfare is a day-in, day-out concern.
    National Guard Family Program
        Support of National Guard families is a critical component of
    readiness and retention. The National Guard Family Program provides an
    extensive infrastructure with a national network linking over 2,700
    communities within the 54 states and territories. This network includes
    54 full-time State Family Program Coordinators, who work with military
    points of contact and volunteers at every organizational level. This
    team promotes family member volunteerism, family support groups and
    networks, and quality of life issues, and facilitates family readiness
    training throughout the National Guard.
        Augmenting this family support network during periods of
    mobilization and as required by the situation, approximately 3,000 ARNG
    strength maintenance personnel are tasked with the mission of
    supporting Family Programs in Family Assistance Center operations
    throughout the United States. Family Program services include basic
    family readiness training and counseling in preparation for the
    deployment of military family members; information, referral, and
    follow-up; community involvement; emergency assistance; crisis
    intervention; reunion preparation and activities; and youth outreach
    programs for children of Guard personnel. A key Army National Guard
    quality of life goal is to provide assistance to all military families,
    regardless of branch or component, who find themselves beyond the
    support capability of active duty military facilities or their home
    units.
    Employer Support of the Guard and Reserve (ESGR)
        Obtaining employer support for Army National Guard soldiers is a
    vital element in quality of life and force retention. To foster
    employer-ARNG partnerships, the National Committee for Employer Support
    of the Guard and Reserve (NCESGR) was chartered by Presidential
    proclamation in 1972 under the Office of the Secretary of Defense. It
    is the sole DOD agency directed to ``promote public and private
    understanding of the National Guard and Reserve in order to gain
    employer and community support to ensure the availability and readiness
    of National Guard and Reserve forces.'' NCESGR has 54 state-level
    employer support committees, comprised of over 4,200 volunteer members
    and is supported by a small joint service staff in Washington. The
    volunteers implement a variety of programs and services for both
    Reserve Component members and their employers. They provide information
    on employment rights and responsibilities related to military leave;
    offer informal employment conflict mediation; and conduct employer
    recognition and public affairs events that promote understanding of the
    vital role of the Reserve Components and activities. Army National
    Guard members can find out more, toll-free, at 1-800-336-4590 or
    through the internet web site (www.esgr.org).
    Army National Guard Risk Management
        As the OPTEMPO increases throughout the Army National Guard, Risk
    Management has become a critical tool for commanders and leaders
    throughout our force. The Guard's goal is for all unit commanders and
    leaders to use Risk Management techniques in every day mission planning
    and execution. This is a continuing program and training is ongoing. In
    fiscal year 1998 over 960 soldiers were trained in Risk Management
    techniques. It is projected that over 2,000 soldiers and leaders will
    be trained in Risk Management during fiscal year 1999 in 50 courses
    offered throughout the U.S.
    Motor Vehicle Accident Avoidance
        A primary focus in fiscal year 1999 is to fully integrate risk
    management into the motor vehicle accident avoidance strategy. Motor
    vehicle travel is the primary means of transportation in the Army
    National Guard. It provides an unprecedented degree of mobility.
    Unfortunately, driving presents a serious problem in the Army National
    Guard that leads to numerous motor vehicle crashes annually, especially
    in privately owned vehicles (POVs). Historically, much progress has
    been made in reducing the number of vehicular deaths and serious
    injuries. Despite these advances, the economic cost alone associated
    with motor vehicle crashes continues to total millions of dollars Army-
    wide. In view of this unfortunate reality, the Army National Guard has
    formed the ``Motor Vehicle Accident Avoidance Task Force'' whose
    charter is to investigate, formulate and recommend options to better
    prepare our soldiers to avoid motor vehicle accidents.
    Ground Safety
        As a result of several factors, to include better safety management
    and the application of risk analysis, the Army National Guard
    experienced a 13.2 percent decrease in ground accidents during fiscal
    year 1998. Of the total number of ARNG accidents that occurred that
    year, 50.7 percent resulted in personal injury, 25.1 percent involved
    Army Motor Vehicles, 19.8 percent involved POV and 4.3 percent involved
    Combat Vehicles. With such a high proportion of our accidents involving
    motor vehicles, the Army National Guard has created an ambitious Motor
    Vehicle Accident Avoidance Taskforce.
    Occupational Health Program
        The Army National Guard's Occupational Health Program (OHP) manager
    and selected state Occupational Health Nurses have been working with
    the Reserve Component Automation System to integrate the Occupational
    Health Managers' software. This software tracks comprehensive
    occupational illnesses and injuries, case management, liability costs,
    physical examinations and medical testing for medical surveillance,
    health promotion and wellness, vaccines and titers, employee training
    and has a host of other features. This system will assist in optimizing
    soldier readiness, expedite access to medical data, and improve
    efficiency in reporting statistics to the National Guard Bureau for
    analysis. Our goal is to provide the most effective medical tools and
    services possible for our full time support technicians and AGR
    personnel.
    Aviation Safety
        The ARNG is committed to taking an active approach to ARNG aviation
    accident prevention. During fiscal year 1998 the ARNG experienced only
    1 Class A Aviation flight accident for a Class A rate of only .52 per
    100,000 flying hours. All crew members completed crew coordination
    training in fiscal year 1998. The focus for the ARNG Aviation accident
    prevention for fiscal year 1999 is situational awareness and to sustain
    crew coordination training. In fiscal year 2000, Aviation accident
    prevention focus will emphasize spatial disorientation training.
        The ARNG Aviation community faces the challenge of increasing
    deployments and an increase in OPTEMPO. We must ensure that missioning
    does not exceed individual and unit capabilities.

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

         CLASS A-C AVIATION ACCIDENT DATA (AS OF 28 OCTOBER 1998)--TOTAL
                                    ACCIDENTS
    ------------------------------------------------------------------------
                                                 Fiscal year--
                                            ----------------------  Percent
                                                1998       1997      change
    ------------------------------------------------------------------------
    Class A................................          1          3        -67
    Class B................................          1          3        -67
    Class C................................         17          6       +180
    ------------------------------------------------------------------------

             CLASS A-C GROUND ACCIDENT DATA (AS OF 15 OCTOBER 1998)
    ------------------------------------------------------------------------
                                                 Fiscal year--
                                            ----------------------  Percent
                                                1998       1997      change
    ------------------------------------------------------------------------
    Personal injury........................        105        144      -37.1
    AMV....................................         52         41      +26.8
    POV....................................         41         24      +70.8
    CBT VEH................................          9          7      +28.5
                                            --------------------------------
          Totals...........................        207        216       -4.3
    ------------------------------------------------------------------------

                                                 CLASS A-C GROUND TOTALS
    ----------------------------------------------------------------------------------------------------------------
                                                                        A         B         C         D       Total
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year 1998..............................................        23         6       147        36       212
    Fiscal year 1997..............................................        15        10       163        52       240
    Percent change................................................     +53.3     -40.0      -9.8    -30.77    -11.67
    ----------------------------------------------------------------------------------------------------------------

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

                   appendix a: soldiers and ncos of the year
        The Army National Guard consists of far more than equipment or
    funding. The people that make up the Guard represent its greatest
    resources. Accomplishing Guard missions would be impossible without the
    dedicated work by Guard members throughout the nation. This page is
    dedicated to those Guard soldiers who distinguished themselves during
    fiscal year 1998. We salute them, and Guard members like them
    everywhere.
        SGT Paul Dahlen, 147th Aviation, Minnesota ARNG, 1st Army NCO of
    the  year.
        SGT Michael O'Connor, 220th Military Police Co., Colorado ARNG, 5th
    Army NCO of the Year.
        SGT Iven Sugai, HSB, 487 Field Artillery, Hawaii ARNG, USARPAC NCO
    of the Year.
        SPC John Joyce, Jr., 123d Armor Regiment, Kentucky ARNG, 1st Army
    Soldier of the Year.
        SPC Todd Loughney, 635th Armor, Kansas ARNG, 5th Army Soldier of
    the Year.
        SPC Mi Soon Han, 29th Support Bn., Hawaii ARNG, USARPAC Soldier of
    the Year.
                appendix b: constitutional charter of the guard
        our charter is the constitution of the united states of america
        Militia Clauses.--Article I, Section 8 of the U.S. Constitution
    contains a series of ``militia clauses,'' vesting distinct authority in
    the Federal government and the State governments.
        Clause 14 provides that the Congress has three constitutional
    grounds for calling up the militia: ``to execute the laws of the Union,
    suppress insurrections, and repel invasions.'' All three standards
    appear to be applicable only to the Territory of the United States.
        Clause 15 gives Congress the power ``to provide for organizing,
    arming, and disciplining the militia, and for governing such part of
    them as may be employed in the service of the United States.'' That
    same clause specifically reserves to the States the authority to
    establish a State-based militia, to appoint the officers, and to train
    the militia according to the discipline prescribed by the Congress. As
    written, the clause seeks to limit Federal power over State militias
    during peacetime.
        Armies Clause.--The ``armies clause'' in Article I, Section 8
    conferred on the Congress the power to provide for the common defense
    of the United States, declare war, raise and support armies, and make
    rules for the ``government and regulation of the land and naval
    forces.'' The Congress also was granted authority to make all laws
    ``necessary and proper'' for carrying out such powers. Under this
    provision, congressional power over the National Guard appears to be
    far-reaching.
        Other Relevant Provisions.--Other sections add to the
    constitutional underpinnings of our national defense structure. Article
    I, Section 10 provides that no State, without the consent of the
    Congress, shall keep troops or ships of war in time of peace, or engage
    in war unless actually invaded. This section was qualified, however, by
    the Second Amendment to the Constitution, which was intended to prevent
    the Federal government from disarming the militia. Part of the Bill of
    Rights that the Anti-Federalists insisted on, states: ``A well-
    regulated militia, being necessary to the security of a free State, the
    right of the people to keep and bear arms shall not be infringed.''
        In addition, Article IV, Section 4 provides that the Federal
    government ``shall guarantee to every State in this Union a republican
    form of government,'' and shall protect each of the States against
    invasion. At State request, the Federal government was to protect the
    States ``against domestic violence.'' Through these provisions, the
    potential for both cooperative Federalism and for tension between the
    ``militia'' and ``army'' clauses was built into the Constitution.
        Article II, Section 2 places all forces, including the militia when
    in Federal service, under the control of the executive branch by making
    the president commander-in-chief. Article I, Section 8 gave the
    ultimate control to the Congress, however, by granting it the sole
    power to collect taxes to pay for the military, to declare war, and to
    employ the militia for common purposes of internal security. Existing
    State militias could be maintained, although troops could be called
    into national service. But the founding fathers moderated that
    authority by leaving the individual States with the explicit
    responsibility for appointing officers and for supervising peacetime
    training of the citizen-soldiers.
        Militia Act of 1792.--Federal policy subsequently expanded and
    clarified the role of the militia. The Militia Act of 1792 required all
    able bodied men aged 18-45 to serve, to be armed, to be equipped at
    their own expense, and to participate in annual musters. The 1792 act
    established an idea of organizing these militia forces into standard
    divisions, brigades, regiments, battalions, and companies, as directed
    by the State legislatures.
        For the 111 years that it remained in effect, this act defined the
    position of the militia in relation to the Federal government. The War
    of 1812 tested this unique American defense establishment. To fight
    that war, the new republic formed a small regular military, and trained
    it to protect the frontiers and coastlines. Although it performed
    poorly in the offensive against Canada, this small force of regulars,
    when backed by a well-armed militia, accomplished its defensive mission
    in the War of 1812. Generals like Andrew Jackson proved, just as they
    had in the Revolution, that regulars and militia could be effective
    when employed as a team.
        With the coming of the Civil War, State militias played a pivotal
    role. Because the Regular Army was so small throughout the nineteenth
    century and the Army Reserve did not exist, the majority of Army units
    which carry Civil War battle honors are from the Army National Guard.
        Posse Comitatus.--In 1867, the Congress suspended the southern
    States' right to organize their militias until a State was firmly under
    the control of an acceptable government. The U.S. Army was used to
    enforce martial law in the South during Reconstruction. Expansion of
    the military's role in domestic life, however, did not occur without
    debate or response. Reaction to the use of the Army in suppressing
    labor unrest in the North and guarding polls in the South during the
    1876 election led to congressional enactment of the Posse Comitatus Act
    in 1878. Designed to limit the president's use of military forces in
    peacetime, this statute provided that:
        ``. . . it shall not be lawful to employ any part of the Army of
    the United States . . . for the purpose of executing the laws, except
    on such cases and under such circumstances as such employment of said
    force may be expressly authorized by the Constitution or by any act of
    Congress . . .''
        Concern over this new domestic role also led the States to
    reexamine their need for a well-equipped and trained militia, and
    between 1881 and 1892, every State revised the military code to provide
    for an organized force. Most called their State militias the National
    Guard following New York's example.
        Beginning in 1903 through the 1920s, legislation was enacted that
    strengthened the Army National Guard as a component of the national
    defense force. The Dick Act of 1903 replaced the 1792 Militia Act and
    affirmed the National Guard as the Army's primary organized reserve.
        The National Defense Act of 1916 further expanded the Guard's role
    and guaranteed the State militias' status as the Army's primary reserve
    force. Furthermore, the law mandated use of the term ``National Guard''
    for that force. Moreover, the President was given authority, in case of
    war or national emergency, to mobilize the National Guard for the
    duration of the emergency. The number of yearly drills increased from
    24 to 48, and annual training from five to 15 days. Drill pay was
    authorized for the first time.
        The National Defense Act Amendments of 1920 established that the
    chief of the Militia Bureau (later National Guard Bureau) would be a
    National Guard officer, that National Guard officers would be assigned
    to the general staff, and that the divisions, as used by the Guard in
    World War I, would be reorganized. Subsequent amendments to the act,
    the National Guard Mobilization Act of 1933, created the National Guard
    of the United States as a component of the Army at all times, which
    could be ordered into active Federal service by the President whenever
    Congress declared a national emergency.
        Following the experience of fighting an unpopular war in Vietnam,
    the 1973 Total Force Policy was designed to involve a large portion of
    the American public by mobilizing the National Guard from its thousands
    of locations throughout the United States when needed. The Total Force
    Policy requires that all active and reserve military organizations of
    the United States be treated as a single integrated force. A related
    benefit of this approach is to permit elected officials to have a
    better sense of public support or opposition to any major military
    operation. This policy echoes the original intentions of the founding
    fathers for a small standing army complemented by citizen soldiers.

                                 APPENDIX C: ECONOMIC IMPACT OF ARNG PRESENCE, BY STATE
    ----------------------------------------------------------------------------------------------------------------
                                                                      Number of        Number of      Total Economic
                           State/Territory                             Armories          Cities           Impact
    ----------------------------------------------------------------------------------------------------------------
    Alaska.......................................................              117               88     $136,442,500
    Alabama......................................................              147              129      448,942,500
    Arkansas.....................................................               76               74      330,302,500
    Arizona......................................................               29               22      197,242,500
    California...................................................              131              119      711,567,500
    Colorado.....................................................               36               24      131,035,000
    Connecticut..................................................               31               22      198,845,000
    District of Columbia.........................................                4                1       75,002,500
    Delaware.....................................................               16               12       70,927,500
    Florida......................................................               73               63      340,365,000
    Georgia......................................................               76               73      351,725,000
    Guam.........................................................               16                1       33,220,000
    Hawaii.......................................................               22               17      146,892,500
    Iowa.........................................................               58               53      232,570,000
    Idaho........................................................               41               31      224,420,000
    Illinois.....................................................               53               50      261,312,500
    Indiana......................................................               74               69      324,717,500
    Kansas.......................................................               59               57      205,892,500
    Kentucky.....................................................               61               53      212,130,000
    Louisiana....................................................               90               66      352,655,000
    Massachusetts................................................               68               58      225,127,500
    Maryland.....................................................               40               34      217,882,500
    Maine........................................................               29               26      102,237,500
    Michigan.....................................................               65               54      312,042,500
    Minnesota....................................................               56               58      278,682,500
    Missouri.....................................................               64               64      339,052,500
    Mississippi..................................................               93               93      562,600,000
    Montana......................................................               53               38      149,765,000
    North Carolina...............................................              103              103      322,005,000
    North Dakota.................................................               26               26      127,562,500
    Nebraska.....................................................               31               31      129,972,500
    New Hampshire................................................               24               23       70,075,000
    New Jersey...................................................               54               42      219,072,500
    New Mexico...................................................               29               29      156,542,500
    Nevada.......................................................               21               13       75,455,000
    New York.....................................................               80               72      364,925,000
    Ohio.........................................................               79               79      285,295,000
    Oklahoma.....................................................               83               79      254,007,500
    Oregon.......................................................               50               37      271,650,000
    Pennsylvania.................................................              138               96      488,300,000
    Puerto Rico..................................................               49               30      215,875,000
    Rhode Island.................................................               16               13       89,375,000
    South Carolina...............................................               82               78      364,057,500
    South Dakota.................................................               34               31      131,642,500
    Tennessee....................................................              119               92      382,905,000
    Texas........................................................              125              102      502,225,000
    Utah.........................................................               33               27      241,122,500
    Virginia.....................................................               77               50      252,407,500
    Virgin Islands...............................................               31                2       43,622,500
    Vermont......................................................               24               22      127,080,000
    Washington...................................................               52               35      249,707,500
    Wisconsin....................................................               67               67      226,820,000
    West Virginia................................................               38               34      143,130,000
    Wyoming......................................................               23               17       72,340,000
    NG2..........................................................  ...............  ...............       16,037,500
    NGB..........................................................  ...............  ...............    1,880,660,000
                                                                  --------------------------------------------------
          Totals.................................................             3166              267   14,877,467,500
    ----------------------------------------------------------------------------------------------------------------

        Senator Stevens. Thank you very much.
    STATEMENT OF MAJ. GEN. PAUL A. WEAVER, JR., DIRECTOR,
                AIR NATIONAL GUARD

                               Summary statement

        General Weaver. Mr. Chairman, thank you for the opportunity
    to appear before this great committee that gives us so much
    support in our Air National Guard, not only on behalf of the
    107,000 men and women of our great Air National Guard, but also
    as part of the total Air Force team.
        We are at a historic crossroads, as we are in the midst of
    a fourth Presidential selective reserve call-up (PSRC) since
    Desert Shield/Desert Storm. Our citizen soldiers and airmen are
    preparing to execute an incremental call-up plan that will
    initially impact four States, Arizona, Pennsylvania, Alabama,
    and Wisconsin.
        This PSRC reaches the grassroots of our America, and we do
    not take this tasking lightly. This has the potential of being
    the largest call-up of our Air National Guard forces ever in
    our history. Answering the call to service is nothing new to
    our Air National Guard members. Throughout history, these fine
    men and women have been in every major conflict in which this
    Nation has been engaged.
        For close to three decades, our Nation's Total Force Policy
    has brought the Air National Guard forces into the spotlight,
    requiring them to deploy with little or no notice for real
    world contingencies. For the current Kosovo mission, the Air
    National Guard has had hundreds of volunteers already serving
    on active duty. They are performing a variety of missions,
    including air refueling, airlift, special operations to NATO's
    ongoing efforts in the region.
        On any given day, you can find the Guard on duty anywhere
    in the world, serving their communities, their States, and
    their Nation. The Air National Guard has and will continue to
    serve whenever and wherever asked. National Guard members who
    take the dual oath to State and Nation know that one day they
    may be called, that they are full partners with their sister
    services in our Nation's defense. They embrace this
    responsibility knowing they must count on the continued support
    of their families and their employers. They are the keys to our
    success. Family readiness and employer support are certainly
    vital members in preparing our airmen and women to perform
    their missions.
        We have made significant effort and progress to combine the
    capabilities of all components to support the families of the
    Total Force. The Air National Guard is included in total Air
    Force family readiness and support provided by the services.
    Employers are an integral part of the Guard triad, our
    guardsmen, their families, and their employers. The Air
    National Guard supports congressional recognition of the
    invaluable contribution of our employers of our guardsmen and
    women and reservists in support of national defense.
        Mr. Chairman, our citizen airmen are prepared. In the past
    decade, they have been in the forefront in Operation Southern
    Watch, the Persian Gulf, and Haiti, as well as ongoing
    operations in Turkey, Bosnia, the Caribbean, and Central
    America. The Air National Guard has responded to all requests
    for additional forces with volunteers. Rarely has our Guard
    family lived through so much change in so many ways in so short
    a time.
        Our Air National Guard personnel regularly rotate with
    active duty personnel to Central America, Europe, the Balkans,
    the Middle East, and Southwest Asia in support of our Air Force
    objectives. Today, we have over 472 of our 1,150 aircraft of
    the Air National Guard deployed and 6,500 Air National Guard
    personnel deployed around the world.

                                     Units

        In 1998, our units logged in excess of 370,000 flying hours
    while making 1998 our safest flying year in the history of our
    great Air National Guard. Our units accomplished this with the
    highest number ever of outstanding and excellent ratings on our
    readiness inspections. At the same time, we worked toward
    increasing our state of readiness, modernizing our forces,
    equally critical to our efforts. As we stay involved with real
    world activities we must keep real-time pace with active duty
    modernization.
        As the age of our aircraft and combat support system
    increases, we incur greater cost and workload to maintain that
    readiness. If we do not modernize by replacing aircraft beyond
    their useful life, and revitalizing those with life left in
    them, we can expect additional maintenance requirements,
    reduced reliability, and increased cost as these aircraft
    continue to age. Inevitably, this also takes a toll on all of
    our people who must maintain and fly them.
        Additionally, we must equip our forces with the most modern
    equipment available compatible with our active duty
    counterparts if we are to stay an equal Total Force partner.
        Mr. Chairman, even with these challenges, we are making
    modernization a reality, thanks to you and this great
    committee. Part of our modernization program progress is being
    made in the support arena. Suffice it to say that we are
    working very hard to keep all of our Air National Guard
    aircraft and support equipment combat-ready and seamlessly
    compatible.
        In closing, our people, readiness, and modernization
    program supported through congressional action is necessary to
    help us build an Air National Guard for the new millennium. It
    is imperative that we maintain our force structure and
    organization suited to the national military strategy.
        Today, sir, our Air National Guard is the most sought-after
    Reserve component force of all Reserve component forces. We are
    the busiest, along with the Air Force Reserve. We are the most
    combat-ready and most of all we have got the best retention
    rates of all the Reserve components, and we are very proud of
    that.

                                 Modernization

        Our challenges in modernization and becoming fully combat-
    capable continue to have requirements and we would appreciate
    all the support that you continue to give to us and in the
    future. Our support for our employers goes without saying, and
    for our families.

                               prepared statement

        Our Air National Guard thanks you for all your support. We
    are confident that our people, our readiness, and our
    modernization programs will continue to lead us into the 21st
    century, as they have done in the past, and I thank you for
    allowing me this opportunity, sir.
        [The statement follows:]
              Prepared Statement of Maj. Gen. Paul A. Weaver, Jr.
        Mr. Chairman and members of the committee: Thank you for the
    opportunity to appear before this committee, not only on behalf of the
    107,000 men and women of the Air National Guard, but also as part of
    the Total Force team. It is no accident that we are on the threshold of
    a new millennium, a time in human affairs that will define our course
    and our character for the era to come.
        We are at a historic crossroads as significant as September 1947
    when the Army Air Force and the Air National Guard became separate
    components. We are witnessing a golden opportunity for change and
    transformation. Secretary Cohen stated, ``Our goal, as we move into the
    21st century, must be a seamless Total Force that provides the National
    Command Authorities the flexibility and interoperability necessary for
    the full range of military operations.'' The Air National Guard has
    great flexibility and is stepping up efforts to meet post-cold war
    realities by re-shaping our internal operations, shedding cold war
    missions and signing up to new missions from the Air Force.
        With a vision for the Guard 21st Century, we are seizing our future
    now! With the advent of changing defense strategies the Guard stands by
    the Air Force in meeting the security needs of the Republic. I am proud
    to provide you our current Air National Guard posture.
        Because the nature of how we fight wars is fundamentally changing
    we must understand that a basic paradigm shift is underway. Previously,
    the cold war scenario defined us primarily as a stay-at-home force
    focusing on containment and operating abroad from fixed bases with
    self-sustaining infrastructures. Those days are gone. Due to changing
    political and economic realities, we have had to close many of those
    fixed locations and transition to a capabilities-based, light and lean
    expeditionary force responding to ``pop-up'' contingencies, operating
    out of forward bare-bases for the duration of a mission. As our Chief
    of Staff sums it up, we have become an expeditionary force that is ``on
    the road.'' In light of today's environment of fiscal limitations and
    political influences, this is a far superior and absolutely essential
    way to respond to world crises.
        Rarely has our Guard family lived through so much change, in so
    many ways, in so short a time. Quietly, but with gathering force, the
    ground has shifted beneath our feet as we ready ourselves for a new
    age. Just as we have met the challenges of these changes at every
    turning point by widening the circle of opportunity, deepening the
    commitment of our warrior spirit, and forging a stronger union--so too
    will we rise to meet the challenges of the expeditionary age.
        Mr. Chairman, please allow me to share with you an array of
    relevant Air National Guard issues for congressional consideration in
    reviewing our role as an integral part of the national defense
    strategy. These issues will give you a sense of our current posture and
    roles with regard to people, training, readiness and modernization.
    Additionally I include other issues relating to facilities and general
    items that are shaping our force structure to meet the demands of our
    nation.
        An overview of the Air National Guard roles and missions is
    essential to keep our unique focus on national as well as domestic
    responsibilities. The federal mission of the Air National Guard of the
    United States is to maintain well-trained, well-equipped units
    available for prompt mobilization during war. During peacetime, combat-
    ready aviation and support units are assigned to most major Air Force
    Commands to carry out missions compatible with training, mobilization
    readiness, and contingency operations. The DOD has an essential role to
    play in shaping the international security environment in ways that
    promote and protect U.S. national interests. DOD's Reserve components
    routinely participate in these day-to-day shaping operations. The Air
    National Guard helps to build coalitions, promote regional stability,
    prevent conflict and deter aggression on a routine basis in key regions
    of the world. To do so, the Air Guard deploys overseas and performs
    exercises, combined training, and military-to-military interactions.
        Air Reserve Component personnel regularly rotate with active duty
    personnel to Central America, Europe, the Balkans, the Middle East, and
    Southwest Asia in support of Air Force objectives. In 1998 alone more
    than 6,000 Air Guard members contributed to the U.S. Air Forces in
    Europe mission. Air Reserve Component tasking will continue to
    increase. These roles are crucial to building and maintaining the
    security relationships needed for successful coalition operations in
    both wartime and peacetime.
        Unlike the Reserves, the Air National Guard has a dual federal-
    state mission. There are 54 State National Guard organizations,
    including the 50 states plus Puerto Rico, Guam, the Virgin Islands, and
    the District of Columbia. Each such state organization is led by an
    Adjutant General who reports to the Governor. In their state
    capacities, members of the Air National Guard are subject to state
    call-up to protect life and property in state emergencies like riots,
    floods, forest fires, etc.
        The men and women of the Air National Guard continue to play a
    major role in our nation's involvement around the world and at home. In
    daily support of the USAF mission, the Air National Guard can be found
    at work on--or over--every continent in the world. The greater our
    participation, the broader our experience base becomes. Guard skills
    are sharpened with use and we become better able to serve the nation.
    Readiness is nothing new to us. We have demonstrated our readiness for
    years, responding, mission-ready, on short notice, exactly as
    advertised. However, we must closely monitor our resources to preserve
    our current readiness.
        The Air National Guard, and the Air Force generally, have led the
    way in providing responsive reserve forces, available immediately, to
    meet service and national needs. The responsiveness and availability of
    Air National Guard assets is illustrated by the fact that although
    Presidential Selected Reserve Call-up authority was authorized for
    Operation Uphold Democracy in Haiti, it was unnecessary to
    involuntarily recall any personnel. Since that time, the augmentation
    of Operation Southern Watch has also been accomplished using volunteers
    only. In the Persian Gulf and Haiti, as well as ongoing operations in
    Turkey, Bosnia, the Caribbean and Central America, the Air National
    Guard has responded to all requests for additional forces using only
    volunteers.
        The Air National Guard continues to remain on the leading edge of
    using volunteer participation in peacetime operations. By using
    volunteers, we minimize potentially adverse impact on readiness and
    training, recruiting and retention. Air National Guard volunteers
    consistently provide trained and ready forces to gaining commands.
    These forces are available for short-notice contingency operations as
    well as for longer-term mobilizations. With this increasing OPTEMPO and
    PERSTEMPO, the Air National Guard is aggressively pursuing ways to
    better leverage the time of Air Force Guardsmen and women.
        Mr. Chairman let me first acknowledge where we are today. Because
    of the hard work of our guardsmen and women, we are not only
    indispensable at home but now are also crucial in keeping the United
    States Air Force the world's most respected air and space power. Yet
    our reenlistment rates are the highest. Much like our reserve
    counterparts, we can boast the highest combat readiness status of our
    flying units which collectively are near 90 percent ``C1'' or ``C2'',
    the two highest categories, as we actively participate in real world
    missions around the globe. Moreover, our units logged in excess of
    370,000 flying hours, while making fiscal year 1998 our safest flying
    year in Air National Guard history. Our units accomplished this with
    the highest number ever of ``outstanding'' and ``excellent''
    Operational Readiness Inspections (ORIs). As a crowning capstone, we
    closed out the fiscal year achieving our personnel end strength goals
    demonstrating that we are wise and prudent stewards of our resources as
    well.
        Mr. Chairman, the focus on EAF, in turn, brings readiness to the
    forefront. Several years of continued high operations tempo, reduced
    funding in real terms, steadily declining mission capable rates for all
    weapon systems, full time pilot retention shortfalls, higher
    infrastructure costs to provide our quality people with quality
    facilities in which to live and work--all of these issues and more
    stress the importance of maintaining the readiness of our force.
        Ominously, our projections indicate a continued budget decline in
    the key areas of aerospace power, forces, people, and infrastructure
    unless we can reverse the trends now. We are particularly heartened
    that the President and many in Congress have endorsed efforts to secure
    additional funding for defense. Now, it is up to us to use our precious
    and limited resources wisely. Force readiness is fragile. If we do not
    reverse these trends through substantial and sustained funding for our
    forces, the concern expressed today could turn rapidly into a readiness
    crisis tomorrow.
        One of our concerns is quality of life for our Airmen. The Air
    National Guard's biggest infrastructure challenge is the simultaneous
    programmatic reductions to both Military Construction (MILCON) and Real
    Property Maintenance (RPM). Having constrained funding levels for both
    programs is forcing tough, short-term trade-offs. As personnel are
    forced to operate and maintain weapon systems in unsatisfactory and
    degraded facilities, Air National Guard readiness and quality of life
    will be adversely affected. Already the Air National Guard has the
    oldest facility inventory in the Air Force, and mission conversions
    generate new facility requirements. Without MILCON dollars for
    replacement, the Air National Guard is retaining its antiquated
    facilities longer and requiring more RPM dollars to operate and
    maintain them. In addition, backlogs for both MILCON and RPM are
    increasing.
        Another related component of readiness is Modernization. Our
    transition into the Shaping Mission and EAF approach demands that we
    keep real-time pace with active duty modernization. As the age of our
    aircraft and combat support systems increase, we incur greater costs
    and workloads to maintain readiness. If we do not modernize by
    replacing aircraft beyond their useful life and revitalizing those with
    life left in them, we can expect additional maintenance requirements,
    reduced reliability, and increased costs as these aircraft continue to
    age. Inevitably, this also takes a toll on our people who must maintain
    and fly them.
        Mr. Chairman, even with these challenges, we are making
    modernization a reality. We are incorporating many critical
    modernization programs into our aircraft as we speak. Let me recount
    where we are in terms of our major programs. We have strong teams
    working each of these programs and they are becoming experts at
    leveraging limited resources and building partnerships. First, our Air
    National Guard F-16s are the first in the world to be equipped with
    Night Vision Imaging System (NVIS) to enhance 24 hour combat
    operations. Most of the fleet will be equipped by the year 2000.
    Additionally, we are taking the lead in installing Situational
    Awareness Data Link (SADL) to improve combat ID, mission targeting and
    situational awareness, revolutionizing how we fight and save countless
    lives. More than 500 of these systems are being built for us today. We
    also have the most successful fighter modernization effort by anyone's
    standards in the Guard-led CUPID program, which in one speed line
    installs GPS, SADL, NVIS and counter measures on all F-16 block 30
    aircraft. This unprecedented approach to modernization will save the
    Air Force several millions of dollars and give these aircraft combat
    capabilities that surpass new aircraft coming off the factory line.
    CUPID installations began in October and will be complete by 2000.
        Additionally, the Precision Attack Targeting System (PATS) is our
    number one modernization requirement for our existing fighter fleet.
    The addition of the Litening II Targeting Pod allows full Air Reserve
    Component participation in contingency operations and provides a
    ``precision strike'' capability for our theater commanders. The
    Litening II Pod provides a 3rd generation target designator that we
    expect to be our ``silver bullet'' on the battlefield. We awarded the
    contract in August of 1998 and expect first pod delivery early by 2000.
        Other successes this year include final delivery of the F-16 Unit
    Training Device (UTD), one to every unit. This high fidelity, in-
    squadron training system has lowered costs and improved the quality of
    our cockpit simulation training for our aircrews. Look for improvements
    to the UTD as we explore other advances in visual and networking
    technology. Lastly, we also delivered the first Digital Terrain Systems
    to five units, giving the F-16 Terrain-Avoidance Guidance for enhanced
    mission planning and safety. All F-16 units will eventually get this
    capability.
        Similar to our F-16 modernization program, we have aggressively
    pursued acquisition of Fighter Data Link (FDL) for the F-15 community.
    Fighter Data Links were not programmed in the original Air Force
    contract. However, I am happy to announce that we have just signed an
    agreement with the Air Force to acquire 51 FDLs for our F-15s. Now our
    F-15s will be able to operate seamlessly with the active Air Force. We
    are working to outfit the entire fleet. We have also equipped each F-15
    unit with Night Vision Goggles and have approved a low-cost field
    modification to equip their cockpit lighting.
        We are also equipping our theater and strategic aircraft as part of
    our modernization program. For example, in January our KC-135 aircraft
    began PACER CRAG. This program adds Global Positioning System, color
    radar, glass displays, and other avionics enhancements. PACER CRAG will
    take several years to complete and we will add other upgrades as the
    program matures.
        Most important to the tanker community is an aircraft to replace
    the aging KC-135E fleet. We envision this aircraft to be a multi-
    mission platform compatible with existing commercial systems,
    fulfilling cargo and refueling needs. We are in the planning stages of
    a Total Force effort with the Air Force Reserve, Air Mobility Command
    and the Air Staff. In the meantime, we will field additional R-model
    conversions as funded by Congress or as directed by force structure
    changes. We are upgrading selected E-models with Hush Kits and TF-33
    engines to achieve improved reliability and maintainability cost. We
    also closely monitor stage III noise and emission restrictions and will
    respond as required by regulatory agencies.
        In the area of our C-130's we recently dedicated our new C-130-H3
    Simulator in partnership with Air Force Reserve. We are acquiring new
    C-130J and EC-130J aircraft and we have added Night Vision Capability
    to the rescue C-130's as we continue to work spares and support
    equipment shortages. We are also testing Situational Awareness Data
    Link improving self-protection capabilities and night vision solutions
    for the C-130. We are in the design of a major upgrade program for the
    C-130H fleet to bring it into a standard configuration. In all, we have
    dedicated huge resources to modernizing our important C-130 community.
        Our A-10 modernization program includes acquisition of a new 8MM-
    color video recorder for the A-10. We received delivery of four unit
    training devices in the first quarter of 1999. We are also planning
    upgrades for the A-10 fleet. We are looking at Situational Awareness
    Data Link, Global Positioning Systems installations, and
    countermeasures and avionics upgrades similar to a CUPID-like program
    that will tie these together. Additionally, we are looking to replace
    the C-141 with C-17's and upgrading the C-5 with much-needed avionics,
    engines, and other enhancements. Most of these initiatives are Air
    Force led programs in partnership with the Air National Guard.
        As you are aware, the F-22 is an important modernization program
    for the Air Force and for the Air National Guard. The need for swift
    and decisive air-supremacy in any future battle is paramount. The F-22
    will bring that capability and more to the Total Force benefiting all
    of us who share arms. We will continue to support the acquisition of
    the F-22 and encourage its eventual flow into the Air National Guard.
        Part of our modernization program progress is being made in the
    support arena. We are working with the Air Staff and Air Combat Command
    to ensure our Combat communications units are fully equipped with the
    latest Theater Deployable Communications. For example, in Air Traffic
    Control we recently gained congressional funding for an initial test
    package for a new air traffic radar to include a new range instrument
    package for our Alpena Control Radar Training Center.
        Suffice it to say we are working hard to keep all Air National
    Guard aircraft and support equipment combat ready and seamlessly
    compatible with our active duty counterparts. Bottom line: we are
    laying the groundwork for the greatest modernization program the Guard
    has ever seen.
        Well, it is one thing to have the needed hardware, but where and
    how will we employ it? New missions are one of our highest priority
    topics. We are in an unparalleled time when the Air National Guard will
    be coming into it's own. We will be increasingly called on for our
    ability to leverage our core competencies of professional knowledge,
    airpower expertise, and technological know-how that produce superior
    military capabilities. When we are called, we will be ready. We are
    going to be called on for new future-oriented missions. It is a future
    in which dramatic changes wrought by technology will be the norm, a
    future that plays well to our Air National Guard strengths.
        We are already reaping benefits as we move into the areas of Space,
    Expeditionary Forces, Information Assurance, Battle Management, Force
    Protection, and Unmanned Aerial Vehicles. These new missions are
    stepping stones in our transition from an Air Force to an Aerospace
    Force. We are continually scanning the horizon through initiatives such
    as Future Total Force to explore new ideas and foster innovative
    technologies to improve our capabilities to meet the challenges of our
    future.
        We are at the portal of an entirely new way of operating--we are at
    the beginning of the new expeditionary aerospace force. With good
    reason, we are enthusiastic about how the new Expeditionary Air Force
    will meet the real-world defense needs of our nation while
    simultaneously addressing our force management and employment concerns.
        The EAF offers the Air National Guard the ability to meet the full
    spectrum of global engagement needs mandated by our Defense Department
    to include major theater war as well as recurrent contingencies.
    Specifically, the April 1998 Defense Planning Guidance states that the
    Air National Guard will now become actively involved in these
    commitments through ``shaping, preparing, and responding'' activities
    (This is the overriding policy and guidance that directs us into these
    new arenas). It offers us integrated Active, Guard, and Reserve units
    who will train and deploy as they will fight. It also offers us
    specifically tailored responses to a particular contingency requiring
    decisive firepower or humanitarian support. This enables our forces to
    be more lethal and responsive than ever before. Ultimately, EAF will
    achieve an equitable redistribution and leveling in personnel and
    operations tempo for our air warriors deployed abroad with anticipated
    reductions in work requirements for troops who remain at home bases.
    And finally by redistributing among the components PERS and OPTEMPO and
    work demands at home, we provide a more stable and predictable schedule
    for us, our families, and our civilian employers.
        Through the EAF initiative, we will address these concerns and in
    the process achieve better retention rates among all our people. The
    Air Force is already in the process of shifting 2,600 jobs in fiscal
    year 2000 into the career fields that deploy most often thereby
    leveling OPTEMPO and work demands even more. Look for similar and
    necessary redistribution within our own force structure. This new
    expeditionary aerospace concept is our lifeblood! As important as it is
    to honor the past, it is just as necessary to envision the future in a
    way that promises invigorated purpose and possibility.
        This year the Guard will provide maximum participation. The Air
    Force EFX 98 was the first in a series of experiments designed to
    explore new operational concepts and advanced technologies. This year's
    experiment concentrated on better ways to command and control the air
    component during expeditionary operations. It explored improving
    reachback to rear area support centers, reducing the personnel and
    logistic requirements in the forward area, and commanding and
    controlling en route aerospace forces.
        We have spent years building strong foundational relationships
    between the active and the reserve components that yield the kind of
    trust and interdependence on which the EAF concept rests and our
    futures depend. This is no small feat and is a synergy that promises a
    win-win for all.
        To fully embrace the new, we need to let go of some of the old. We
    need to take an honest account of those missions that no longer have
    relevance. The Guard has been given the dramatically new and over-
    arching mission of ``shaping.'' In our fiscally constrained
    environment, this requires that we optimally task and allocate each of
    our units. Given the increasing interdependence of the modern world, we
    recognize that we will be called on to defend in situations beyond the
    national and international arenas. Because our nation also depends on
    our inherent strengths at the state and community levels, we are in
    full partnership with our Army National Guard counterparts to stem the
    proliferation of Weapons of Mass Destruction. Threats to our homeland
    strike us at our core and we will engage every resource in restoring
    security.
        We are enthusiastic because our future is bright and holds
    unlimited opportunities. It is also a future in which our core values
    of integrity first, service before self, excellence in all we do,
    commitment to the citizen soldier heritage, and strength in our diverse
    family will continue to sustain our Air National Guard family. Despite
    the ongoing nature of change, what makes us successful will not change.
    Our core values are fundamental and timeless and are reinforced in
    everything we do. They provide a framework to establish how we want to
    work and live.
        Let me spend a moment on that framework that I first laid out in
    terms of a road map almost a year ago when I took over as the Director
    of Air National Guard. In that four year road map, I described how we
    would organizationally move forward together to fulfill our Air
    National Guard legacy. This road map will not only guide us into our
    shared future, but it will be an important means to measure our
    progress.
        Getting ready is the secret of success. The first year of my term,
    the ``year of transition,'' began with preparing ourselves for the
    ensuing years. We set our foundation before we began to build our
    skyscraper. Architectural law teaches that form follows function so we
    set up a way of operating to improve connectivity between the field and
    the Air Directorate. The improved relationship would be measured from
    the eyes of the unit Commanders. Our objective, listening to the field,
    while instituting positive change, means incorporating the right
    leadership, processes and structures to make this happen. Achieving
    this goal has been neither easy nor without confusion both internally
    and externally. Yet with the help of our field units we continue moving
    forward.
        A centerpiece of the year of transition is our new Air National
    Guard corporate process. This process leverages our unique field
    expertise by establishing participatory decision making in all vital
    actions. Field issues focused on mission execution are surfaced and
    acted upon in our Air Directorate field advisory council and enlisted
    field advisory council. Then, those issues that need programmatic
    visibility are brought up through our Air National Guard panels and
    group prior to being folded into the Air Force corporate process.
        To better meet our cross-functional needs, we set up our core and
    executive leadership teams to address issues which require the entire
    Air Directorate leadership perspective.
        The means by which we all come together and connect our plans to
    deliberate actions is known as our Integrated Planning and Programming
    (IPP) process. I take a moment to highlight this because this is one of
    our core competencies which the Air Force benchmarked off us to refine
    their own planning and programming. Our IPP helps us maintain an
    atmosphere of relative stability within this wide sea of change. The
    IPP, which includes long-term and strategic planning, is our means for
    moderating change at a pace we can live with.
        One of our major success stories is that we are seen as full Total
    Force partners and as such we sit at the planning table as equals when
    our fate is being decided. This has taken years of relationship and
    trust building. Now, as architects of our own destiny, we will use that
    authority responsibly in tempering the pace of change and to balance
    the needs of our Air National Guard with those of the Total Force. The
    bottom line is we are all working together to create a better operating
    environment suited to our unique needs.
        Additionally, to underscore our new operating philosophy, we
    established a new Air National Guard theme line and logo ``Fuel Your
    Future--Air National Guard''. These will complement our future
    recruiting and retention campaigns while emphasizing our common
    identity and strategic focus.
        My second year theme is ``The Year of the Enlisted Force.'' We are
    very excited about this yearlong focus on our enlisted force. This has
    been a Guard-wide collaborative effort. It is only right that we single
    out our enlisted personnel because they have technological know-how
    required in our new mission areas.
        Visioning and strategizing together is becoming our new operating
    norm. This is true of each of our theme years. Much work has already
    been accomplished for year 2000, ``The Year of the Family'' and we are
    building plans with a special interactive town meeting to continue
    sharing ideas. A lesson to the wise: while we recruit individuals, it
    is families we retain. We are building to create the strong synergy we
    need for us to operate at our potential both in the home and on the
    work front.
        Taking care of families is vitally important for the Guard. Family
    readiness is an essential element in preparing our airmen to do their
    missions. Significant efforts and progress have been made in combining
    the capabilities of all components to support families of the Total
    Force. The Air National Guard is now included in Total Force family
    readiness and support provided by the Services. The Air National Guard
    uses active component inspections as well as Operational Readiness
    Evaluations (Exercises and Inspections) to evaluate family support
    programs. We have been able to integrate with state level programs,
    establishing networking and professionally prepared guides and
    brochures which also are available to facilitate information about
    family support programs in the Guard.
        Because every part of our guard family needs to stay strong, in
    2001 we will kick off ``The Year of the Employer''. The traditional
    character of our militia heritage is at the core of our citizen-soldier
    concept. As you know, that relationship is being severely tested due to
    the current high PERS and OPTEMPO. Just as we owe our members and their
    families predictability and stability in their lives, we also owe this
    to our civilian employers. We support legislative initiatives that
    assist employers of Guardsmen and women. Employers are an integral part
    of the Guard triad (Guardsmen, their families and their employers). We
    have vigorously pursued feedback from employers and they have expressed
    an interest in relief. The Air National Guard supports congressional
    recognition of the invaluable contribution of employers of Guardsmen
    and reservists in support of national defense.
        To finish out my term, we have declared 2002 ``The Year of
    Diversity.'' Diversity holds such a prominent place on our road map
    because of one simple reason: it is a readiness and leadership issue.
    If we do not engage the hearts and minds of all our people to maintain
    our high performance, we put ourselves at risk for squandering the fine
    talent we have been blessed with. Our unit commanders are the direct
    link to our success--we cannot succeed without them being fully
    committed. I am heartened by the definite strides being made--we are
    giving everyone equal opportunity to participate because we know it is
    the right thing to do. More than goals, a cultural change is occurring.
    This cultural transformation will become the changeless core of our Air
    National Guard family. We promote a working environment, which allows
    each employee--military and civilian--to realize his or her full
    potential. Bottom line--diversity reaffirms the importance of equity of
    treatment and opportunity for readiness.
        Mr. Chairman, in completing the first year's cycle of this road
    map, we already are seeing the fruits of our labor. I have several
    success stories to share with you that have positively affected the Air
    National Guard.
        We have made significant strides in moving closer to the field. We
    have designed and implemented an organizational structure that includes
    them in issue development and decision making in our Integrated
    Planning Process and through our Air National Guard corporate process.
    To facilitate more effective leadership and management in our units, we
    are maximizing our funds distribution early in the fiscal year. We have
    also partnered with the field units via Unit Training Assemblies visits
    and enlisted Warrior Network Broadcasts will also be held on Unit
    Training Assemblies to further enhance our communications.
        We have established an Air National Guard corporate strategic plan
    that reflects all of our goals and endeavors. This is our planning road
    map in which all our voices, field and Air Directorate, are heard.
    Together we wrote this document and together we will carry it out.
        Furthermore, to more completely integrate into and influence the
    Air Staff budget process, we have developed the Guard Planning and
    Programming Guidance (GPPG). This documents our federal, state and
    community roles by giving critical visibility to our missions that
    require funding priority.
        We are working together aggressively pursuing the re-role of combat
    communications units. We are actively engaged in finding new missions
    for those of our units in which traditional missions have gone by the
    wayside--either because of outdated equipment or simply because the
    new, post-cold war realities require different tasks of us. We realize
    every mission that gets proposed may not be a perfect fit. But we will
    have our sights set on the 21st century and do what is right for the
    nation and what is right for our people.
        Using our Air National Guard corporate process we have responded to
    our units with Flight Training Instructor (FTI) assistance. We listened
    and acted on the units concerns regarding pilot retention and OPTEMPO
    and gave our unit Commanders flexibility to recruit and retain a pilot
    workforce and reduce OPTEMPO for our rated force.
        In the area of education and training, we achieved a 75 percent
    increase in specialized undergraduate pilot training production. We
    have also stood up a joint distance learning working group to share
    funds and resources in meeting training requirements. Units are
    broadcasting among each other as well as receiving standard Air Force
    developed courses.
        Airman leadership schools are being expanded and enhanced to
    include a complete correspondence course update and a regional site at
    the Training Education Center. Additionally, we are testing a ``night
    school'' program format. Also, the NCO academy satellite program
    continues to increase and includes Total Force representation.
        Our first students are attending the Kingsley, Oregon, Air National
    Guard Base flight training unit instructor course; basic course
    students will begin in mid fiscal year 1999.
        The F-16 Flight Training Unit is another initiative that resulted
    from our close partnership with the active duty and concerns the issue
    of F-16 training shortages. Both our corporate processes tackled this
    problem and together we leveraged our Total Force resources to resolve
    this issue. Solution: we have established two F-16 Rated Training
    Units, one at Kelly Air Force Base and the other at Springfield, Ohio,
    Air National Guard Base. We will stay actively engaged in this issue to
    enhance our training needs.
        Warrior Network Broadcasts are changing the way the Air Directorate
    and units communicate. Technology can best serve us by connecting us
    real time and instantaneously. We have now participated in several
    broadcasts where our staff links face to face with our 54 states and
    territories to discuss the issues important to all of us. To stay in
    close touch, we do these broadcasts at least quarterly.
        In the area of career management and compensation, we are unique
    among the Total Force in terms of traditional and full-time status,
    personnel programs and incentives needed to ensure a parity of benefits
    for everyone. Our group councils in conjunction with our staff are
    spearheading efforts with the goal to improve compensation and
    retirement packages, speed up promotion review and streamline our
    personnel system.
        One of our most promising initiatives is Staff Integration. Team
    Langley Air National Guard and our Aerospace Command Control Center
    have identified six potential new mission areas with a total personnel
    requirement of 1,200 personnel; in the future, 40 percent of our force
    structure will be in this arena. Additionally, USAFE is already
    actively engaged in placing Guard members in senior command positions
    at the Expeditionary Air Base Group at Istres, France, Tuzla, Hungary,
    Bosnia and the Air Expeditionary Wing at Aviano, Italy.
        The new Expeditionary Aerospace Force puts the Air National Guard
    in the forefront as it relates to command positions as well. We have
    already set the precedent with a Guardsman called up to command active
    duty forces. As we fully engage in EAF, command slots will increase and
    we must and will be ready to step up to this challenge.
        Another success story is the Predator mission Unmanned Arial
    Vehicle (UAV). Our staff is collaborating with Air Combat Command and
    is in the process of standing up a team of Guard members at Indian
    Springs, Nevada, in direct support of the active duty to alleviate the
    high OPTEMPO and PERSTEMPO. This is a specialty mission associated with
    a low density/high demand asset--another chance for the Air National
    Guard to excel.
        Our premier core competency is Maintenance. As the life span of our
    weapon systems and primarily our aircraft is extended to new levels,
    meeting maintenance and reliability thresholds rests on the superior
    knowledge and expertise of our maintenance and logistics community.
    There is no near competitor that can match the talents of our
    maintenance force and we will not rest until we leverage our unique
    capability across the Total Force. We are putting together proposals
    with the field's help to develop the best ways of doing this. Bottom
    line: we will leverage our maintenance capability for the active duty
    to cut costs while providing better service.
        Our Guard performance is second to none. Not only do we accomplish
    the mission, but also we do it in a manner that removes any doubt about
    our professionalism. The statistics speak for themselves: 40 percent
    outstanding, 45 percent excellent, 15 percent satisfactory ratings in
    Air National Guard flying units. With 3 percent outstanding, 48 percent
    excellent, 46 percent satisfactory in support units. These are the best
    inspection results in the last three years!
        In closing, we share a common past and we depend on a common
    future. Building the strongest Air National Guard is our most important
    mission, the foundation of many generations. Our people, readiness and
    modernization programs supported through congressional action is
    necessary to help us build an Air National Guard for the new
    millennium. The Total Force mission remains to fight and win the
    nation's wars, and the force structure is constantly evolving to
    support this mission. However with the current emphasis on the growing
    involvement of Reserve component forces in small-scale contingencies,
    the challenge to the Air National Guard force structure is more
    complex. We must now support peacetime missions and crisis response, as
    well as wartime mobilization. It is imperative that we develop a force
    structure and organization suited to the National Military Strategy.
        Mr. Chairman, we have faith that congressional support is there for
    our finest Airmen, missions and national security. We are confident
    that our people, readiness and modernization programs will continue to
    lead us into the 21st century as they have done in the past. I thank
    you for allowing me this opportunity to give you the Air National Guard
    posture, God bless America.

                                Combat readiness

        Senator Stevens. General Davis.
        General Davis. I would like to close by talking about a
    couple of things that we think are very key and vital. At the
    same time we are producing combat readiness as part of our
    Federal mission, we are also using that same training and the
    same paradigms to allow us to do State missions as we respond
    to hurricanes and tornadoes and other emergencies throughout
    this great Nation of ours. Our National Guard, with the
    training they have to do combat missions and the combat support
    and the combat service support missions, those same Guard
    members have a dual responsibility to take care of the citizens
    of the State, the county, and the city or town in which they
    live, and they do that very ably as part of our national
    strategy to shape, respond, and prepare.

                                 Youth programs

        I would like to make a couple of comments. In the area of
    our young people, which is the future of our Nation, we are
    very much involved there with the National Guard Youth
    ChalleNGe Program, currently on board in about 26 States, and
    with a couple more States to come on board this year, programs
    which allow us to take young people off of the street, who
    might otherwise be in trouble, high risk young men and women,
    and then turn them into outstanding citizens, and we have got
    about a 5\1/2\ year track record on that, and we think we are
    moving down there and making great progress.
        Another program, the Youth Conservation Corps, and Star
    Base. In Star Base, we focus on math and science in the
    schools. Most of you will remember the days of Sputnik when we
    got behind. We are trying to avoid that as a proactive step in
    working with the young people. As I said, they are the future
    of the Nation.
        In spite of what happened in Colorado, we know that the
    bulk of the people in the United States, our young people, are
    on the right track and we are helping them to stay on that same
    right track. One of the impediments to doing that is drugs, so
    we have got a very active counterdrug program where we go out
    and we interdict drugs, and we try to destroy drugs on the
    ground, and at the same time we are talking to a lot of these
    young people and other young people to get them to stay away
    from drugs, reduce the demand for drugs.
        No point in saving all these young people unless we can
    make it a better world, so our State partnership program, we
    are working with some 31 States and 28 nations to make it a
    better world. I was just returning yesterday from Cincinnati,
    where we had a workshop on flood, and most of you are aware,
    last year they had massive floods in the northern part of
    Europe. We are talking to them about working together.
        As I met with some of the gentlemen, one of them, who was
    in a contiguous country, said that for the first time we have
    gotten along with our neighbors next door, and we have shared
    resources in a common project dealing with flooding, and they
    have an agreement. They would love to have a treaty, but they
    have got an agreement, which is the first step, so we are
    making a lot of progress in that arena, and the Guard is right
    in the middle of it, facilitating.
        As we look to emerging missions, and you talked about them,
    Mr. Chairman, national missile defense, and the weapons of mass
    destruction, and homeland defense, and information operations,
    we look forward to those challenges. As both Directors have
    said, we have got men and women standing by trained and ready,
    and we can do additional training as is necessary.
        In the area of OPSTEMPO we have been involved in the Sinai,
    and Bosnia, and Southwest Asia, and we are capable of doing
    this, and we want to be called upon, because we think we can
    respond to our Nation's needs.
        I want to close by saying that as our soldiers, our citizen
    soldiers and citizen airmen leave their homes to go forward to
    do America's business, to take part in executing our national
    military strategy, they leave behind their homes and their
    jobs, and we have got great concerns about that, and they leave
    behind their communities.
        We have an outstanding program, family programs to take
    care of these families and dependents of these young men and
    women as they move forward, and we have got another program
    where we work with the Department of Defense and the employees.
    To support the Guard and Reserve we need to reinforce these
    programs and pay a lot more attention to them.
        I think we are doing a great job of it, but as with
    readiness I think we can do a better job, but our job is a
    military calling to service to our great country, and our men
    and women stand forward and step forward to serve our country
    in whatever way they ask.
        Sir, we await your questions.
        Senator Stevens. Thank you very much. Senator Bond, I
    understand you have to leave.
        Senator Bond. Yes, sir.
        Senator Stevens. We would be glad to defer to you.
        Senator Bond. I very much appreciate that.
        General Davis, given the recent events in Kosovo, how do
    you anticipate the Guard will be utilized in that theater, and
    what do you anticipate will be needed to support these units
    when they are called up?
        General Davis. Well, first of all, Senator Bond, I think we
    will need additional forces. They have indicated with the PSRC
    that it will be about 33,102 personnel. The first increment is
    2,100 air refuelers, depending on what direction that goes in,
    and I think a lot of that will depend upon what happens as a
    result of the current activities and the reaction of Mr.
    Milosevic as to what additional things will be needed, but we
    have got capabilities for additional air refueling, airlift. We
    have got a number of Army Guard resources in like manner which
    could be used. We do not really know, and it is very difficult
    to speculate in that arena.
        Senator Bond. Do you have any idea of the cost, what we are
    going to have to provide in terms of the cost of your
    activities?
        General Davis. The cost of our activation will typically be
    borne by the active component. As we work with them on the
    Kosovo supplemental, we have decided that our numbers are
    really going to need to be incorporated with the active
    component, and I will defer to either one of these gentlemen,
    if you do not mind, sir.

                                F-15 data links

        Senator Bond. General Weaver, I spoke earlier of the need
    to update the F-15's data links. Could you explain why this is
    critical to the mission's success, and if you would also
    address the criticality of the 220-E reengining to the
    capability of the fighter force.
        General Weaver. Sir, two great points. The fighter data
    link (FDL) for our F-15's will interlink our aircraft with
    those of our active duty counterparts. That is singly--our FDL
    requirement is our number 2 priority on our Guard and Reserve
    equipment account. The quantity which would take us through and
    fulfill our F-15 requirements, about 70, for about $17 million.
    It is centrally--it is key to making our F-15's integral to the
    war fight, and for the CINC's requirements, and it is also link
    16 compatible.
        Senator Stevens. If they are going to be flying together,
    it would make some sense.
        General Weaver. Yes, sir, it would. I cannot agree with you
    more.
        As far as the requirements on the engines, our engines are
    getting old, and even though they are extremely well-
    maintained, our additional requirement of additional funding
    for 220 engines would really help both our F-16 and our F-15
    community.

                      shortfall in Army personnel accounts

        Senator Bond. General Schultz, I mentioned in my opening
    statement that I believe there is a $184 million shortfall or
    over in your personnel accounts, using the Army's current
    program objective memorandum (POM) plan, how long do you think
    it would take to fix the problem if at all? In your opinion,
    what would the effect of such a shortfall be on the unit
    preparedness and the effect on individual soldiers and
    technicians?
        General Schultz. Senator, we could fix the problem in 1
    year, and yet the answer comes back with an affordability
    question, so when you look at the Army's POM you will see our
    spread of our technician and active Guard Reserve requirements
    over a 5-year period. We could execute the numbers, 3,000
    technicians and 1,600-plus active Guard and Reserve (AGR)
    soldiers in year one with one caveat, and that is, some of the
    technicians could be in a temporary status, meaning not fully
    processed, and so we could execute the program.
        But budget development is a consensus-building effort in
    the Pentagon, and so we spread those numbers out because we
    could not convince the Army staff that executing it in the
    first year was even possible, and so it is a difference of
    opinion we have had with the Army staff. I am not changing my
    position. At the maximum, 2 years would be the limit for our
    execution of both technician and AGR numbers.
        Now, the impact on not realizing any adjustment, and the
    question you are asking specifically is, we have units today,
    commanders are commenting to us, units today that are not
    realizing their readiness-related standards because we do not
    have technicians and AGR soldiers in the right places, a person
    to process an individual's promotion, to order the person's
    supplies, individual equipment, to be in the armories, to
    represent our units on a day-to-day basis, so it becomes a
    quality of life issue on the one hand and a readiness-related
    issue on the other.
        The short answer is, we can execute this program in a
    maximum of 2 years.

                        Air Guard military construction

        Senator Bond. Let me finish up with the dreaded military
    construction account. Nationwide, our armory system is in
    pretty bad shape. Combined, I understand the Army and Air Guard
    Milcon account is $5.6 billion, billion with a B.
        That said, I might ask first General Schultz and then
    General Weaver to give a brief summary of your outstanding
    components requirements, and then I would ask General Davis for
    any comments, and if you would submit for the record an account
    of the critical, what you view as the critical Milcon projects
    which languish in the unfunded category.
        [The information follows:]
                          Milcon Unfunded Requirements
        For fiscal year 2000 the Air National Guard has a significant
    unfunded requirement, $75,000,000, which is comprised primarily of
    deferred new mission requirements. These projects support mission
    beddowns or conversions, but could not be included in the fiscal year
    2000 program due to funding shortfalls.

    Deferred new mission requirements

            Project                                             In thousands

    Robins AFB, GA--B-1 Aircraft Beddown....................     $33,000,000
        Munitions Complex...................................       9,800,000
        Operations & Training Complex.......................       6,100,000
        Supply Warehouse....................................       5,400,000
        BCE Complex.........................................       3,200,000
        Vehicle Maintenance.................................       2,100,000
        Avionics Shop (not yet in FYDP).....................       6,900,000
    Kelly AFB, TX...........................................       6,500,000
        F-16 School House...................................       3,400,000
        F-16 School House (not yet in FYDP).................       3,100,000
    Springfield ANGB, OH....................................       6,000,000
        F-16 School House...................................       1,700,000
        F-16 School House (not yet in FYDP).................       4,230,000
    Atlantic City ANGB, NJ..................................       1,400,000
        F-16--General Purpose (not yet in FYDP).............       1,400,000
    Puerto Rico ANG, PR.....................................       1,600,000
        ADAL Squadron Operations (not yet in FYDP)..........         840,000
        ADAL Aerial Port (not yet in FYDP)..................         740,000
    Boise ANG, ID...........................................       5,300,000
        Supply Complex......................................       3,000,000
        Upgrade Fuel Cell and Shops.........................       2,300,000
    Jacksonville ANG, FL--F-15 Conversion...................       2,400,000
        Add to Fuel Cell Hangar.............................       2,400,000
    Key Field, MS--ASOS Conversion..........................       6,400,000
        Comm-Electronics Training/ASE Facility..............       6,400,000
    Hancock ANG, NY- ASOS Conversion........................       8,900,000
        Comm-Electronics Training/ASE Facility..............       8,900,000
    March ANG, CA--KC-135 Conversion........................       3,600,000
        KC-135 General Purpose Shops........................       3,600,000
                        --------------------------------------------------------
                        ____________________________________________________
          GRAND TOTAL.......................................      75,000,000

        Beyond the fiscal year 2000 program there are a large number of
    valid requirements which could not be included in the funded portion of
    our program. These unfunded projects include a variety of current
    mission requirements totaling roughly $400,000,000.

                                                [In thousands of dollars]
    ----------------------------------------------------------------------------------------------------------------
                Installation/State                                     Project Title                          Cost
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year 2002:
        Birmingham, AL........................  Replace Base Engineer Maintenance Complex.................     4,200
        Fort Smith, AR........................  Operations and Training Facilities........................     6,500
        Hickam, HI............................  Aircraft Rinse Facility...................................     1,200
        New Orleans, LA.......................  Replace Vehicle/ASE Maintenance Complex...................     4,400
        Barnes, MA............................  Replace Base Supply Complex...............................     5,900
        W K Kellogg, MI.......................  Replace Munitions Maintenance & Storage Complex...........     8,800
        Selfridge, MI.........................  Replace Crash Fire Rescue Station.........................     7,400
        Atlantic City, NJ.....................  Communications and Security Forces Complex................     3,450
        Gabreski, NY..........................  Replace Vehicle/ASE Maintenance Complex...................     4,250
        Salt Lake City, UT....................  Composite Ops and Training/Squad Ops Complex..............    10,400
        Yeager, WV............................  Replace Base Engineer Maintenance Complex.................     3,500
        Various...............................  Planning and Design.......................................     7,396
                                                                                                           ---------
          Fiscal year 2002 total unfunded       ..........................................................    67,396
           requirements.
                                                                                                           =========
    Fiscal year 2003:
        Hunter, GA............................  Replace Vehicle Maintenance Facility......................     2,400
        McConnell, KS.........................  B-1 Aircraft Live Munitions Loading Ramp..................     6,900
        Minn-St Paul, MN......................  Composite Maintenance Complex.............................     6,900
        Jackson, MS...........................  C-17 Upgrade Fuel Cell and Shops..........................     5,100
        Jackson, MS...........................  C-17 Upgrade Squad Ops/Hangar and Shops...................    12,100
        Camp Shelby, MS.......................  C-17 Shortfield Runway....................................     7,700
        McGuire, NJ...........................  Medical Training Facility (w/AFRC)........................     2,900
        Schenectady, NY.......................  Base Supply/Base Engineer Complex.........................     7,400
        Tulsa, OK.............................  Replace Composite Support Complex.........................    10,800
        Camp Pendleton, VA....................  Replace Troop Training Quarters...........................     2,500
        Fairchild, WA.........................  Replace Composite Support Complex.........................     9,800
        Various...............................  Planning and Design.......................................     7,107
                                                                                                           ---------
          Fiscal year 2003 total unfunded       ..........................................................    81,607
           requirements.
                                                                                                           =========
    Fiscal year 2004:
        Barnes, MA............................  Relocate Taxiway..........................................     3,200
        Pease, NH.............................  Replace Medical Training Facility (VA Joint Use)..........     3,200
        Will Rogers, OK.......................  Replace Composite Aircraft Maintenance Complex............    19,500
        Portland, OR..........................  Replace Joint Dining Facility (w/AFRES/ARNG)..............     8,200
        Pittsburgh, PA........................  Add/Alter Squad Ops/Support Complex.......................     9,400
        Quonset, RI...........................  Replace Aircraft Maintenance Hangar.......................    16,500
        McGhee Tyson, TN......................  Aircraft Hydrant Refueling System.........................     9,500
        Kelly, TX.............................  Replace Vehicle/ASE Maintenance Complex...................     3,000
        Cheyenne, WY..........................  Aerial Port/Air Traffic Control Complex...................     7,000
        Various...............................  Planning and Design.......................................     6,980
                                                                                                           ---------
          Fiscal year 2004 total unfunded       ..........................................................    86,480
           requirements.
                                                                                                           =========
    Fiscal year 2005:
        New Castle, DE........................  Upgrade Aircraft Parking Apron and Taxiway................     9,500
        Jacksonville, FL......................  F-15 Add/Alter Fuel Cell/Corrosion Control Facility.......     2,400
        Boise, ID.............................  Replace Joint Medical Training Facility (w/ARNG)..........     2,250
        Forbes, KS............................  Replace Operations and Training Facility..................     8,900
        New Orleans, LA.......................  Munitions Storage Igloo...................................     1,350
        Alpena, MI............................  Replace Operations and Training Facility..................     4,500
        Jackson, MS...........................  Expeditionary Forces Center...............................     9,000
        Jackson, MS...........................  C-17 Upgrade Aeromedical Evacuation Facility..............       600
        Stanly County, NC.....................  Relocate Comm/Electronics Training Facility...............     4,300
        McGuire, NJ...........................  Replace Base Engineer Maintenance Complex.................     4,000
        Toledo, OH............................  Upgrade Aircraft Maintenance Hangar.......................     8,400
        Will Rogers, OK.......................  Replace Base Supply Complex...............................     5,800
        Nashville, TN.........................  Replace Aircraft Maintenance Complex--Phase I.............    10,400
        Burlington, VT........................  Replace Aircraft Maintenance Complex......................     8,600
        Various...............................  Planning and Design.......................................     7,963
                                                                                                           ---------
          Fiscal year 2005 total unfunded       ..........................................................    87,963
           requirements.
                                                                                                           =========
    Charlotte, NC.............................  Replace Supply Warehouse..................................     3,800
    Hector Field, ND..........................  Weapons Release Systems Shop..............................     2,500
    McGuire AFB, NJ...........................  Replace Aircraft Maintenance Hangar/Shops.................    17,000
    Reno-Tahoe, NV............................  Base Infrastructure.......................................     4,500
                                                Replace Supply Warehouse..................................     7,000
                                                Jet Fuel Storage Complex..................................     4,800
    Springfield, OH...........................  Aircraft Parking Apron....................................     7,000
    Willow Grove, PA..........................  Replace Composite Support Jt HQ Complex...................    17,500
    Ellington, TX.............................  Replace Base Supply Complex...............................     5,800
    Volk Field, WI............................  Replace Control Tower.....................................     5,100
    Gen Mitchell, WI..........................  Aircraft Parking Apron....................................     1,500
                                                                                                           ---------
          Total other unfunded requirements...  ..........................................................    76,500
                                                                                                           =========
          CUMULATIVE TOTAL....................  ..........................................................   399,946
    ----------------------------------------------------------------------------------------------------------------

        General Schultz. Senator Bond, the impact on the Milcon
    issue looks like this in the Army National Guard. The $16
    million will for us mean two projects, two Milcon projects in
    fiscal year 2000. As I say that, we have validated $473 million
    Milcon-related projects by the Army staff, so it has already
    been cleared and reviewed, endorsed by the Army leadership.
        So that gives you a difference, between the $60 and $473
    million, of where we really are in terms of impact there. If
    you look at the total backlog, we have $4.4 billion in military
    construction backlog in the Army National Guard.
        General Weaver. Sir, on the air side, our Milcon deficit is
    approaching I believe $1.2 billion, with a Reserve personnel
    management (RPM) deficit of about $850 million. We have been
    very fortunate in the Air National Guard. If you look at
    whether the glass is half full or half empty, thanks to this
    committee, we have been helped greatly with our needed Milcon
    requirements. Our deficit would have been a lot worse had we
    not been able to get your support in the past.
        We have challenges there, because of requirements of
    hangars and facilities for our test equipment and what-not this
    year. Our Milcon probably has reached the lowest point ever as
    far as the request, and there is going to be some very big
    challenges for us if we cannot turn this around.
        Senator Bond. General Davis, your comment.
        General Davis. Well, we have got, as both of the Directors
    have said, some major challenges in this area of Milcon,
    because with emerging missions come emerging requirements for
    the physical facilities in which our people operate, and we
    have a different view, I think, than some of our physical
    facilities. That is really quality of life to our young
    soldiers and airmen.
        That is where they spend their day. It is not a bus stop.
    It is not where they just stop by and change clothes. It is
    where they spend those 8-plus hour days on Saturday, and 8-plus
    hour days on Sunday to do their work, and we think we owe them
    the quality facilities that they deserve as top notch soldiers
    and airmen, so we work pretty hard at that, and we think that
    is very important.
        I do not think we have been as successful with getting our
    message across in some quarters, but we thank you for the
    outstanding support we have gotten from this committee.
        Senator Bond. We look forward to working with you, and
    thank you very much, Mr. Chairman. I very much appreciate your
    courtesy.
        Senator Stevens. Thank you. That is about the longest 10
    minutes you have ever had, General.
        Let me recognize Vice Chief of the National Guard Bureau,
    Major General Fred Reese from Oregon. We are happy to have you
    back again, a second tour of duty at the bureau, or the Guard,
    and we look forward to having your advice as we go ahead.
        And General Davis, if you would accept a little, just a
    little suggestion, I am not a capable semanticist, but I do
    believe that you referred to your parent services. Maybe
    brothers and sisters, maybe even big brothers and sisters, but
    no parent services here when you deploy right along with them.
        General Davis. I was talking to the total Air Force, sir,
    and the total Air Force from my viewpoint, and I certainly
    would not presuppose that I am correcting you, but it is just
    my perspective, sir, would be to say the Air Force and part of
    the Air Force is the active component, the National Guard, the
    United States Air Force Reserve, and then the civilians who
    work as a part of our total Air Force, sir, and so the parent
    would be the Air Force, but the active is only a component of
    that, as is the Guard, sir, so I did not mean they were our
    parent. I apologize if I gave that misimpression, sir.

                              Funding deployments

        Senator Stevens. We are still fighting this fight to make
    sure there is equality there. I believe when people deploy
    together, there ought to be equality.
        By the way, let me ask the first question, just to show my
    stupidity, really. When you deploy right now, for instance, in
    Kosovo, do you go onto the budget of the regular service, or
    are you carrying your funds on to the deployment?
        General Davis. It will be kind of a mix. Most of it would
    be picked up by the active component Air Force and active
    component Army when we have folks involved.
        Senator Stevens. They pick up the incremental costs, or you
    continue paying the money, right?
        General Davis. Yes, sir. It is just an administrative thing
    we do in a PSRC.
        Senator Stevens. But if there is combat pay, they pay it?
        General Davis. Yes, sir. They reimburse us.
        Senator Stevens. I would like to straighten that out and
    make sure we are not getting short-changed, is what I am
    saying, because these deployments are becoming more often, and
    for more intensive and for longer periods, and that is going to
    soon wear on your budget if you have to pick up that and they
    get emergency funds, that you are spending your regular money.
        General Davis. Sir, in the past they had reimbursed us for
    that, or they have given us their checking account and we write
    checks out of it.
        Senator Stevens. It sounds like my wife. [Laughter.]
        She has her account, but she writes checks on mine, too,
    but that is all right. It all comes out in the end.
        General Davis. And we do the same thing in the Army, and
    one of the issues has been in the Army, that is so expensive to
    call up in a PSRC. It is much more expensive to call up the
    Army Guard, because that comes out of the active budget.
        General Schultz, you may want to comment.
        General Schultz. Yes, Mr. Chairman. As we transition on
    active duty we are just like any other soldier on active duty,
    and so we fall under their budget requirements.

                            Equipment compatibility

        Senator Stevens. Well, I am worried about the compatibility
    issue you mentioned, General Schultz, because you know, when
    you deploy your people, if they have been training with hand-
    me-downs they are not at the state of readiness as the regular
    Army or the regular Air Force would be.
        How is the compatibility going? We have tried to transition
    and get you new equipment. A portion of each new buy should go
    to each of you, the Air Force and the Army Guard. Is that
    working? Are your people really training in the equipment they
    are going to be deployed to operate?
        General Schultz. Mr. Chairman, what you are describing is
    working. We are, of course, always at the end of the line
    saying we are ready for the next generation of equipment, as
    are others on active duty, but we have clearly made some
    progress in this issue of modernization and compatibility.
        As the active units, and these are active divisions, change
    out their tanks and Bradleys, they are making available to us
    really state-of-the-art systems, tank and Bradley systems and
    other systems that are cascaded. General Reimer made a decision
    to change the configuration within the multiple launch rocket
    system battalions, and all of those launchers that are made
    available come right to the Army National Guard, so we are
    making progress.
        We still have a long ways to go. Communication systems, for
    example, in our enhanced brigades, we have a requirement for
    6,000 radio systems in our enhanced brigades alone. We are
    making progress within the Army staff for support on that
    particular critical line item. So the answer is yes, making
    progress.

                                      B-1

        Senator Stevens. General Weaver, I notice some of the
    systems the B-1, for instance, were sent to your people and are
    proving themselves. In terms of this current operation, are
    those guardsmen flying the B-1's?
        General Weaver. No, sir. Even though I am parochial, I
    think we have got the best B-1 units in the total Air Force. We
    still lack some requirements on those B-1's that we are looking
    to be able to hopefully get funded this year through our Guard
    and Reserve equipment account as well, to make them compatible
    to what the CINC's requirements over there are.
        Senator Stevens. You should tell us about that. We are
    working on money now.
        General Weaver. Yes, sir. I will get with the committee.
        [The information follows:]

                                      B-1

        System modifications/upgrades and equipment acquisitions to
    bring all Air National Guard B-1 aircraft up to theater CINC
    requirements are in work at this time. All requirements are
    being coordinated with Air Combat Command and the B-1 System
    Program Office, and are currently in the Air Force modification
    schedule for the B-1, and/or are being coordinated for
    acquisition in the Air Force budget or through the use of ANG
    funds. All active duty and ANG B-1 aircraft are scheduled for
    these modifications/upgrades--Guard B-1s are currently
    scheduled to start depot modification in August 1999. Note:
    Only six (6) B-1s in the entire Air Force inventory (of 93
    aircraft) had the required equipment and modifications required
    for the Kosovo conflict.

        Senator Stevens. General Schultz, the Guard has had greater
    success in maintaining end strengths than the regular Army and
    Air Force, and as I indicated, I am concerned about this
    conflict between the QDR, that you have got to get rid of
    21,000 people, and the report that you need 4,700 more now. I
    do not know, is this just Army, or is it both Air Force, Army
    Guard and Air Guard?
        General Schultz. Mr. Chairman, a couple of questions in
    what you are asking. One full-time staff is really from within
    our current levels of end strength. That is where the 3,000
    technicians and the 1,600 AGR soldiers come from. That is the
    4,600 you are describing.
        The 21,000 coming from the QDR is what is loaded in the
    Army program today. I must also say, though, that that decision
    has not been made by the Secretary of the Army, but if you look
    inside of the Army program, 21,000 end strength is going to be
    cut from the Army National Guard in fiscal year 2001.
        Senator Stevens. But are you funded for 2000 for the full
    amount? You do not have to cut it yet?
        General Schultz. No adjustments in 2000. We were actually
    going to 350,000 in fiscal year 2000, so we are on track
    through the end of the year 2000.
        Senator Stevens. Do you know it is the position of this
    committee that we are better off to maintain the Guard
    readiness and not to have any further reduction in the end
    strength? I am going to have to talk to the Armed Services
    Committee. Has that been mandated by the Armed Services
    Committee yet?
        General Schultz. Mr. Chairman, I am not aware of the Armed
    Services Committee.
        Senator Stevens. The 2001 reduction, have you a mandate to
    come down to that yet?
        General Schultz. Not from that committee, Mr. Chairman. We
    have clearly not volunteered from the Army National Guard's
    point of view, and I have told General Reimer and the Secretary
    we are not volunteering to turn in any soldiers beyond the
    350,000, but based upon the QDR decision there is 25,000
    soldiers yet to be apportioned between the Guard and Reserve if
    that original decision holds, and that is really where we are
    in the process.
        Senator Stevens. Well, let me congratulate you, because I
    understand that Pentagon leadership added $690 million to your
    operation and maintenance (O&M) account above the level that
    the Guard was programmed to receive. That shows some real
    progress in terms of relationship between you and the regular
    service, and I think General Reimer is to be congratulated for
    that, also.
        But I do think we have still got some problems about
    backlog, and Senator Bond mentioned the tiered basis of
    allocating resources. That is like shooting your foot every
    time you want to go down another step, because if the top step
    is fully funded, then the next step is not, and you get to that
    one, you are in real trouble. I do not like that too much.
        General Schultz. If I can respond to that point, 48 States'
    guardsmen have supported the mission in Bosnia to date, and
    what is of interest to us is all of those later-deploying units
    are among the set that we are sending to Bosnia, meaning they
    are at the bottom of the food chain.
        They are later in the tiering, which means we clearly have
    not sent them adequate money in past years. That is why I
    mentioned the support of this committee last year, putting our
    divisions back on a road to a reasonable level of readiness,
    and we have made some progress, but clearly in the past those
    units have not been appropriately funded.

                               Kosovo operations

        Senator Stevens. I am in a battle up here now. We are
    spending $1.6 billion in Bosnia for 5,400 people, and yet with
    20,000 people in the Kosovo area we are supposed to get by on
    about $10 million. You know, you do not need an abacus to
    figure out there is a misconnect there somewhere, but I cannot
    get anyone to listen to that. At least so far they are not
    listening. Are you fully funded now in what you are getting for
    your deployments?
        General Davis. Mr. Chairman, our OPTEMPO account is really
    the only one that is a little short this year, in addition to
    full-time staffing, and we are at $139 million short or
    unfunded for fiscal year 2000.
        Senator Stevens. How about you, General Weaver?
        General Weaver. We are OK. Our Air Force does very well by
    us. Any time we are either through volunteerism or PSRC we are
    taken care of quite well. As far as manpower, back to the
    manpower, we have got a potential problem. We are working
    within the Air Force. That mandates that we take out 1,500
    civil engineers.
        We are working that problem within our Air Force, and
    trying to make sure that does not happen, because if it did it
    would take down 26 Air National Guard civil engineering units
    in 26 different States, and we are working very hard with
    Secretary Peters, and he believes strongly we should not take
    those down, and we are working with him.
        Senator Stevens. I want to get back with you on military
    construction. I will recognize Senator Inouye now.
        Senator Inouye. Thank you. I would like to first ask
    questions on the rapid assessment initial detection team, RAID.
    I believe the goal is to have a team available within a couple
    of hours of any major metropolitan area. Alaska and Hawaii,
    because of their locations, are put together with California,
    and naturally California is going to get the RAID team, and
    this has been the name of the game from day one. Hawaii and
    Alaska are foreign countries, I believe.
        I hope you are seriously considering setting up these RAID
    teams in Alaska and Hawaii, and I am not saying this from a
    parochial standpoint. The tempting targets are Alaska and
    Hawaii, number 1, militarily. We have significant military
    activity in those two States. Second, our level of visitors,
    tourism and otherwise, dignitaries, I would say would far
    outdistance most States, and I would think that because of the
    vulnerability as potential targets our two areas should be
    considered. Do you agree with me, sir?
        General Davis. Yes, sir, and I know as a part of the
    effort, looking at somewhere between 5 and 10 teams this year,
    the Department of Defense is establishing criteria to look at
    that, and I know that Hawaii and the arrival of RAID teams on-
    site is one of the factors they are using, one to which you
    alluded. Some of the other factors are population density, the
    availability of aircraft to move the RAID teams and that kind
    of thing.
        And I know that as a part of that consideration, I know
    last year when the 10 teams were given out to the 10 Federal
    Emergency Management Agency (FEMA) regions, Hawaii and Alaska
    received major consideration there, and I know that there has
    been a lot of discussion of additional RAID teams, that would
    be very, very likely and logical candidates.
        I do not know where we are in that process. Hawaii and
    Alaska, I know I will carry that message back to the Department
    of Defense.
        Senator Inouye. Senator Bond brought up the matter of
    Milcon and armories. I would like to add a little different
    dimension to that. In my assessment of armories throughout the
    Nation, and more closely with the ones in Hawaii, I note that
    unlike regular military buildings, an armory is also a
    community center, and I think it serves a good purpose.
        For one thing, it advises our people, the nonmilitary, that
    there is someone looking after your interest all the time, and
    I would hope that the active forces would take that into
    consideration. The average American does not often go onto
    military bases, but they are in your armories to attend
    everything from high school dances to community bazaars. So, I
    think they serve a good purpose.

                    combat readiness of Army National Guard

        General Schultz, you mentioned that 79 percent of your
    units, or your personnel, are combat-ready.
        General Schultz. Today, Senator, 71 percent of our units
    are deployable. If you take out the units that are undergoing
    new equipment conversion and so on, it is really 76 percent, so
    it is the 76 percent of our units, plus those later deploying
    units, the divisions that make up our total capability.
        Senator Inouye. Now, what standards do you apply in
    determining what is ready and what is not ready?
        General Schultz. In the case of combat units their
    requirement for premobilization is that they demonstrate
    platoon-level skills, platoon-level maneuver. That is a
    lieutenant and a platoon sergeant, demonstrating that they can
    maneuver and control the squads that are subordinate to them.
    In the case of service support units it is really company-level
    training that is required.
        Senator Inouye. Is this the standard set by the active
    forces?
        General Schultz. It is the standard set for Reserve
    components, yes, by the active forces.
        Senator Inouye. I ask this because during Desert Storm
    there was some severe criticism about our Guard troops not
    being ready, and yet at that time we were told that the Guard
    troops were ready, so I was wondering who was determining who
    is or who is not ready.
        General Schultz. Senator, as you are familiar, the 29th
    Brigade will go through joint readiness training, Senator, this
    summer, another example of an ongoing evaluation of our combat
    unit formations, and we can--the Army Guard can deliver
    brigade-level combat formations without any question. Today,
    the standard is within or less than 90 days.

                                Guard readiness

        Senator Inouye. And my other question is, how can you
    maintain this level of readiness if you are not permitted to
    have the full-time manning requirements met? For example, I do
    not know what the national average is, but for Hawaii they are
    limited to 54 percent, so 46 percent of the slots are unfilled.
    What is the situation nationwide?
        General Schultz. Across the country, Senator, we have 51
    percent of our requirements filled. That is from the higher
    priority to the later deploying units. What it means is every
    unit in the Army National Guard shares a piece of the pain that
    you are describing. What it means is, we are less ready than we
    should be, and it means that we cannot look after our soldiers
    like we should, and also the equipment component that I talked
    about earlier is also another factor.
        Senator Inouye. And you are still able to present 76
    percent readiness level at this time?
        General Schultz. Yes. I say, Senator, we are operating
    right on the margins. When the commanders say to us, I am OK
    with this level of readiness, but it is right at the tier of
    falling from one category to another, and full-time staffing is
    showing up in more of the reports than we have ever seen.
        Senator Inouye. As a commander, are you satisfied with that
    situation?
        General Schultz. No, I am not, Senator.
        Senator Inouye. What is the shortfall involved in this, to
    have a fully manned organization? I was told it is $186
    million.
        General Schultz. Senator, it is $185 million for fiscal
    year 2001. I mentioned earlier the costing factor. There is an
    adjustment in how we had costed our technicians. When you take
    out the $57 million costing error, our requirement is $128
    million to bring back both technicians, military technicians
    and active Guard and Reserve soldiers to levels that are
    validated by the Army.
        Senator Inouye. Do you think you can find $128 million, Mr.
    Chairman?
        Senator Stevens. If you ask for it.
        Senator Inouye. You heard the answer. He says if you ask
    for it, we can find it.
        General Schultz. Senator, I am asking.
        Senator Inouye. General Weaver, are you asking for it, too?
        General Weaver. Boy, I need some new F-16's, sir.
    [Laughter.]
        Senator Inouye. General Davis, are you asking for it?
        General Davis. Yes, sir. I think it is very key. One of the
    things that we might mention as a part of our capability of
    maintaining our readiness at a very high level, we have a large
    number in the 60 to 70 percent range of people who have been on
    active duty before.
        The other thing is, they do not shift units from year to
    year. In a typical active unit an individual will stay there
    from 2 to 3 to 4 years, probably max. In the Guard, they are in
    the same unit doing the same job as a squad leader with the
    same people year after year after year.
        We have got about a 20-percent turnover rate in the
    National Guard, and many of these combat units, these folks
    stay there and work together for a long time, and so they are
    very comfortable with what they do, and that is why they are
    able to maintain the readiness standards, because they have got
    16 years or 18 years as a squad leader, or in a squad.

                                      F-16

        Senator Stevens. Would you yield just a second, and I know
    Senator Cochran is next, but I prefer we look at these
    increments on a structural basis and not on a 1-year basis,
    General, and yours, too, General Weaver. I think we ought to
    look at maybe saying we could get you 10 more F-16's a year for
    a period of years, rather than try to get you a lump sum and
    not be able to go on out.
        With your money, I do not know what it means, but I would
    have to analyze that, but I would much rather see us start
    something that we can keep up, than to have some blip on your
    screen as far as your figures are concerned. Would you take a
    look at that and see what kind of a program you would need
    funded for, say, 4 to 5 years, and I think there would be
    probably a little bit lower than the figure you mentioned, but
    the total would be a lot more than is in the QDR right now for
    both of you, but I do think you need more F-16's, and your
    people are going to be flying them over there in Kosovo, are
    they not?
        General Weaver. Yes, sir.
        [The information follows:]

                                      F-16

        The Air Force will procure 30 new F-16CJ aircraft over a
    four (4) year period of time: fiscal year 2000 = 10, fiscal
    year 2001 = 0, fiscal year 2002 = 10, fiscal year 2003 = 10.
    The unit cost (in fiscal year 2000 dollars) is $26,600,000.
    This 30 aircraft procurement will create an additional (i.e.
    tenth) active duty SEAD squadron. Therefore, an additional cost
    of $40,000,000 exists for support equipment unique to the F-
    16CJ Suppression of Enemy Air Defenses (SEAD) mission. This
    will hold true for any subsequent unit that converts from pre-
    block 50/52 to the block 50/52.
        These new aircraft will replace active duty F-16 Block 30s,
    which in turn will be assigned to ANG units currently flying
    older F-16A aircraft. This Total Force solution will result in
    an increased capability in both the active duty and ANG, while
    enabling us to save money by retiring our aging A-models.

        Senator Stevens. If we win the argument, you will get some.
        Senator Inouye. I have just one final question, Mr.
    Chairman. There is a difference between the active forces and
    the Reserve forces, and as a result, problems differ. Before
    the hearing began, General Davis, we were discussing some of
    the problems, and you came up with something that I thought was
    very important, that we are not saying enough about the
    sacrifices that have to be made by families. It is one thing to
    be a spouse, or family member of an active duty soldier,
    because you know that certain things are to be anticipated, but
    with the Guard, that is another story. Are we doing enough to
    take care of our families?
        General Davis. We are doing a lot. Enough? I doubt it. As I
    go around the country and talk to families, as is typical of
    most military families, and I think in the Guard we are not any
    different, people understand there is going to be some
    sacrifice, so they tuck it in and sacrifice.
        But the additional hardships with two parents working--and
    it is not really any different than the active component,
    except that they have health care and they have day care, or
    child care and that kind of thing, and we do not have that in
    the Guard, sir.
        And so--and everything comes at a price, and I understand
    the requirements of dollars, but we are not able to take care
    of our people as well as we would like when they get mobilized
    and they come into the same requirements of pay, as was
    mentioned a little bit earlier, and entitlements, so they are
    just like any other active soldier or any other active airmen,
    and so they can go to the base and they can request to get
    their young kids, dependents into child care, and so the spouse
    is there doing that.
        We have not done as good a job, I think maybe, in terms of
    some of the preparation, things we could do in the Guard, and
    part of that is a function of having the full-time people on
    board. General Weaver has engaged in the last year-and-a-half
    in a major program to upgrade his family program, so we have
    not been able to find the exact dollars we need in that arena.
        We are not doing nearly enough, and so I think we need to,
    and we are talking about having a seminar this summer in
    Dallas, and we are going to look at what additional things do
    we need to be doing to support our families. As opposed to, we
    are doing these things and this is nice, what are we missing,
    what are we not doing.
        Senator Inouye. Thank you.
        Senator Stevens. Senator Cochran.

                                  Guard forces

        Senator Cochran. Mr. Chairman, thank you. General Davis, we
    know that you are busy complying with the call-up order that
    has gone out to Guard forces. General Weaver talked about some
    of the units who would be sending airmen to the Adriatic,
    Kosovo and related bases. As you are well aware, there are many
    Guard and Reserve forces already supporting the Kosovo
    operations.
        In fact, in our State the 186th Air Refueling Wing, which
    is based at Meridian, Mississippi, is refueling combat aircraft
    over the Adriatic Sea today, and there are a number of others
    throughout the country who are active in this conflict.
        You mentioned what you are doing to try to help deal with
    family situations and requirements, and you pointed out the
    employers and the sacrifice that they are making when their
    employees are mobilized and are sent off to active duty.
        Could you describe in a little more detail what the
    Department is doing, and what the Bureau is doing to ensure
    that we continue to get the support we need from employers
    around the country, who have to lose critical members of their
    staff and their businesses who become members of the total
    force? How does the National Guard help the small businesses,
    in particular? In my State, we do not have many big
    corporations involved in this, but we have a lot of small
    businesses that are affected. What is being done to deal with
    that?
        General Davis. Well, one of the things we do is, we conduct
    seminars so that we can explain to them what it is all about. I
    was in Dayton, Ohio about 3 weeks ago on a Sunday to visit with
    about 300 of these volunteer patriots who have come there
    because they are willing to help us explain to employers--
    Employers to Support the Guard and Reserve is the committee,
    and it is chaired here in Washington, DC, and that works out of
    the Department of Defense--explaining to them how we are doing,
    what we are doing, and why it is necessary for them to have
    their employees away, and these are people who volunteered,
    great American patriots, to help us explain to other employers.
        We have a law that was passed a few years ago, Uniformed
    Services Employment and Reemployment Act, that gives the
    statutory basis for what employers have to do. We do not want
    to rely just on the statute. We want the goodwill of the
    employers, so it is important and very key we have the
    employers in each of the States and territories, here in the
    District, where we have those folks come together and meet to
    try to talk to employers.
        We have what we call an ombudsman as a part of that process
    who can go out and talk to employers when an employee has a
    difficulty being rehired following a deployment, or for a
    contingency, or just a normal, routine annual training
    deployment, and so we are doing a number of things.
        Are we doing enough? Probably back to the same issue with
    the family. I think we could probably do a lot more.

                           Mississippi National Guard

        Senator Cochran. General Schultz, the Mississippi National
    Guard is going out to the National Training Center this summer.
        Last fall I was down at Camp Shelby observing the
    preparations that were underway so they could have a successful
    training exercise in California at Fort Irwin, and it reminded
    me, with this callup and General Clark commanding our forces in
    Kosovo for the entire NATO alliance, that I first met him when
    he was a Brigadier General in charge of the National Training
    Center, when the Mississippi 155th Armored Brigade was sent out
    there for training during Desert Shield/Desert Storm. And here
    we are now seeing our unit go back again to prepare to be a
    part of whatever total force requirements they may be called
    upon to fulfill.
        I hope I can go out and observe this training this summer.
    I would not be in the way, I hope, if I went out there, would
    I?
        General Schultz. Senator, I hope you can visit. I spent
    this last weekend with the leadership of the Mississippi Guard,
    and General Robertson and the team are prepared for this
    mission, I assure you.
        Senator Cochran. We are very proud of the work that they
    do, and one of the things I observed was the tank range
    exercise at Camp Shelby. They are working now to try to enhance
    the training as possible there. They have got a multipurpose
    range which they are hoping to complete. An environmental
    impact study has been completed.
        I hope you will look into that and be sure that everything
    that is needed from up here in Washington is being provided in
    terms of support for the efforts of the Mississippi Army
    National Guard and that training center. Do you think the
    improved range that is contemplated will contribute to Guard
    and Reserve readiness?
        General Schultz. Senator, we look at the ranges at Camp
    Shelby as one of our treasures in terms of resources for
    training soldiers. We are awaiting Phase 3 of that construction
    project right now. There are no impacts that I am aware of
    holding up that project. We have completed the environmental
    impact statement, and we are proceeding on schedule, of course
    with the clearance of the Congress on this particular budget.
    It is in our future years defense plan (FYDP) right now as a
    project.
        Senator Cochran. Good. Well, we want to be sure we try to
    get the support we need from this committee and the Congress to
    fund that effort.

                                      C-17

        General Weaver, the C-17 aircraft have been identified as
    the next generation, and we are happy that the Mississippi Air
    National Guard unit in Jackson, Mississippi, will be the first
    Guard unit in the country to receive those aircraft. Even
    though it is some distance in the future, I hope we are
    planning to accept those planes when they are able to be
    allocated to that unit, and I hope you will help us by
    providing for the record what needs to be done in terms of
    military construction or equipment or training to prepare and
    be ready for that eventuality. We are very pleased that the
    plan is still on track. I wonder if you could just bring us up
    to date and give us an overview of what the timetable is for
    that deployment?
        General Weaver. The exact timetable in fact, sir, with
    General Robertson, the commander of the Air Mobility Command
    certainly has recognized the importance of making sure that
    this conversion is a textbook conversion, and we at the Guard
    Bureau as well will ensure that that will happen.
        Everything right now is on track, to include the military
    construction. We are looking at possibly updating the simulator
    building by 1 year to accept the simulator earlier, if we are
    able to get the simulator, and so we are--actually, all of us
    are leaning forward to accept the C-17 not only on time, but we
    hope to break that time schedule, and I can give you that for
    the record, sequential, but as far as assistance and help, I
    think we are pretty set in that conversion, and we are really
    looking forward to the C-17 being up there in Mississippi.
        [The information follows:]

                                 C-17 Aircraft

        The MILCON for C-17 beddown at the 172nd Airlift Wing is
    ``on track''. A C-17 flight simulator building is scheduled for
    fiscal year 2000. In fiscal year 2001, a C-17 Corrosion
    Control/Maintenance Hangar is proposed. In fiscal year 2002, a
    C-17 Conversion project is planned that combines several base
    facilities. In fiscal year 2003, the Fuel Cell Hangar and Shops
    will be upgraded to accommodate the C-17, and the aircraft ramp
    will be modified to meet C-17 requirements. The flight
    simulator equipment installation is also planned in fiscal year
    2003. In fiscal year 2004, a C-17 Maintenance Training Facility
    is planned, and a C-17 Shortfield Runway is proposed for
    construction at Camp Shelby. To round out the ANG MILCON
    requirements, an Expeditionary Forces Center is planned in
    fiscal year 2005.
        All Support equipment is planned and funded in the Future
    Years Defense Program.
        The Air Force Air Education and Training Command will
    accomplish all training for the 172nd Airlift Wing personnel
    on-site, using existing Air Force C-17 facilities.
        Additionally, circumstances may preclude all training
    taking place on-site. Definite training requirements will be
    forthcoming following the Site Activation Task Force (SATAF)
    visit in October 1999.

        Senator Cochran. We had heard that there is a possibility
    that the delivery of the C-17's might actually occur ahead of
    schedule, and I think right now it is fiscal year 2004, is the
    plan for the arrival date. If there is a possibility of
    delivering the planes ahead of schedule, there is a chance or
    possibility that the C-17's will be delivered to the
    Mississippi Air Guard in Jackson earlier than 2004?
        General Weaver. Yes, sir. That is not only our comment but
    the comment of General Robertson as well.
        Senator Cochran. Well, we appreciate the support that you
    have provided to the units in our State, and we are pleased
    that we were able to get some additional funds because of
    hurricane damage on the gulf coast to improve and repair
    Gulfport units, and the facilities in that area. They are very
    important, as I understand it, to the Air Guard requirements.
        General Weaver. Yes, sir. That is a great cooperative
    threat reduction (CRT) force.
        Senator Cochran. Thank you very much, Mr. Chairman.
        Senator Stevens. Yes, sir. I appreciate your raising the
    subject of the C-17. Senator Inouye and I want to talk about
    the C-17's with you one of these days, too. We have forward-
    deployed forces, but we are going to have to wait for
    transportation to come and take them to areas of crisis, and I
    think that as these transitions take place, that that
    consideration ought to be taken into account. We are going to
    have after 2000 and what, 7 or 8, that will be a major air
    transport capability, the C-17's.
        General Weaver. Yes, sir. It is a great airplane.
        Senator Stevens. I think we are going to have to build some
    more of them if this current situation shows what happens when
    you get a small crisis, and it is a small crisis, 20 million
    people standing up against 780 million people. The difference
    is their ability to resist based upon where they are located,
    and that basis raises some questions.
        I understand, General Schultz, the training center that
    Senator Cochran is talking about, and it is a very vital one,
    but you know, if we have to stay in Kosovo during the winter,
    and Albania during the winter, that training is not going to be
    worth that much. I hope you get some people thinking about
    letting people learn the ability to survive in cold weather and
    to come up to Wainwright training range with some of these
    people, too. They come up in the summertime, but they very
    seldom come up in the wintertime. That has always bothered me a
    little bit about our ranges.
        General, I understand that you have two Army division
    headquarters associated with enhanced Army brigades, Army Guard
    brigades. Is that an ongoing thing, or is this just an
    experimental thing?
        General Schultz. Mr. Chairman, it is a test. We have two
    active component division headquarters that we are going to
    stand up this October. We are going to raise the organizational
    colors here in June, but officially the divisions stand up on
    October 1, and subordinate to these two major general commands
    on active duty will be three enhanced brigades each, three
    light and three heavy brigades that will be subordinate to an
    active component division headquarters for training, readiness,
    and oversight. It is a test program.
        Our thoughts right now include looking at these units at
    some point in the future, perhaps 2 years away yet, where we
    confirm that these new divisions could be deployable as
    division sets.

                         Military construction backlog

        Senator Stevens. You know, General Davis, according to my
    calculations, last year, 1998, was the lowest funding on a
    comparable basis for the military since 1939. We have tried to
    bring that back up again. I asked my staff to look into it. We
    are informed the Army Guard backlog for military construction
    is $4 billion, and the backlog for the Air Guard is $1.6
    billion, and you continue to receive a disproportionate share
    of the Department's Milcon resources.
        The military construction funding for this year is
    abysmally low. I understand the budget restrictions, but at the
    same time, this cannot continue if you are really going to be
    full active partners with the other services. Did you request--
    and I know you are not supposed to answer unless asked
    specifically, so I am going to ask you. Did you request more
    money from the Office of Management and Budget (OMB) for
    Milcon?
        General Davis. Well, sir, we make our request through the
    Army and the active. In terms of the way----
        Senator Stevens. Did you request more?
        General Davis. Yes, sir. We requested additional funding.
        Senator Stevens. Did the Department send that on to OMB?
        General Davis. Some of it got sent on. Some of it did not.
    Normally, that is a process that is a dual review process, so
    DOD works in conjunction with OMB as they do their review
    process. We requested additional funding.
        Senator Stevens. I see the result, much too low. We cannot
    see that backlog continue to increase. Do you have any figure
    of how much it continues to increase, to build up and compound
    per year?
        General Davis. On an annual basis, we think it is somewhere
    in the area, I think in the Army Guard about, something on the
    order of about $400 million a year, and slightly less than that
    in the Air Guard, I think something like $200 million, I
    believe, are the numbers we have done.
        One of the concerns, and one of the difficulties I think in
    that process has been in the past this committee has really
    done a magnificent job of providing funding, and there are some
    people who feel that there is no purpose in, or point in adding
    it in, because the money will get added once it gets over here.
        Senator Stevens. We cannot add that much every year to even
    keep up with the backlog, and the regular services have this
    same backlog. We are funding our overseas deployments by
    failing to take care of our assets and to maintain our bases,
    and maintain our equipment, and really keep up with the
    backlog, even in the basic infrastructure that Milcon will take
    care of, and I really do not know the answer.
        I was just telling my colleague, we are facing considerable
    opposition in what we are trying to do, and make people realize
    we just cannot keep up this tempo of operation in South Korea
    and Iraq and Saudi Arabia and Bosnia, and now around the Kosovo
    area, without recognizing that all of that is wear and tear not
    only on the personnel but on the equipment.
        And I think we are seeing it in terms of the reenlistment
    rates, and the enlistment rates as far as personnel, but we
    certainly are seeing it even more so in terms of the basic
    inability to keep up with this normal wear and tear on the
    systems. It bothers me a great deal, and I will talk to you
    later about that.

                                   Shortfalls

        I mentioned you did get $690 million in O&M. Did that cover
    your critical shortfalls?
        General Davis. It covered a significant number of them,
    sir, not all of them. As General Schultz said, we are still
    about $139 million short of what we need and require to train
    at the required levels for our individual crew squad training
    in the Army Guard and its Army related question, sir, and so we
    do not have enough yet.
        We are working our way through that. We are getting better
    and getting well. In the 2001 budget there is even more funding
    involved in that, as we look at the program, now. It is not
    budgeted until we actually have the dollars, but it does look
    like there is some more improvement in the deficit, in our
    shortfalls.
        This year for the first time I think, as I said, we have
    been able to send people to both training to do their training
    in their military occupation specialty (MOS) and training in
    their professional development training in the Army, in
    addition to be able to go to annual training. That was not the
    case in the past few years.
        So we are able to do that. We still require that additional
    $100 million, and then we have to have that as a continuing
    stream in the long term. It is not just a 1-year incremental.
    We need that, and it needs to be programmed out in the future,
    so it is that kind of a situation.
        Senator Stevens. Now, how about the emergency supplemental
    we have got before us now. Is there any part of that, have you
    been notified, will come to you?
        General Davis. Yes, sir. I believe our part is something on
    the order of about $800 million, and that is all of the
    requirements we have placed in there. I am not sure how that
    will fair. There have been some additional scrubs to the
    dollars, actual dollars for that, and I know early this week
    there were some additional review, in-depth review justified
    line by line, each of the items, so we are trying to get a more
    pure figure, I think, from the Department of Defense to bring
    over to you. I think you asked on the Hill here.
        Senator Stevens. We are going to have a classified briefing
    this afternoon with the military, with one of the Generals from
    the Joint Chiefs. I would hope that you can tell them if you
    have any items that are in that area, that classified area that
    have not been covered in this pending request, because it is
    going to be difficult to have a second supplemental.
        General Davis. I think we have expressed our requirements
    day-to-day, and I would defer that to the two Directors, since
    their people are working at the working level with all of the
    programmers and all of the budgeteers in the building in both
    the Army and----

                                    Rotation

        Senator Stevens. Those reservists have been called up to
    guard the Apaches, have they not?
        General Schultz. The Army Reserve, yes, does have an Apache
    rotation in Operation Southern Watch, so the Guard has already
    pulled one rotation, and we are scheduled to go back with a
    unit from South Carolina this fall.
        Senator Stevens. You have a limitation of 180 days?
        General Schultz. The limitation is really 270 days, and we
    are really in favor of shorter duration deployments than
    longer, for the very reasons that have already been mentioned.
        Senator Stevens. We talked about that yesterday. There is
    no provision in that request of the President's for any
    rotational costs, and that bothers me considerably.
        I do want to urge you to take a look at that and would
    welcome you to have a Guard trip to Alaska this summer, if one
    of you can take that on. We do have an annual trip up there, or
    biannual trip, visiting some of the smaller units, and that is
    a very important visit to them, and I would like to see it take
    place, if it can be arranged.
        General Davis. Yes, sir. We have an interest in going up
    there and looking at the units also, so we will work with your
    staff and see if we can possibly do that and invite you along,
    sir.

                      Combat to combat support conversion

        Senator Stevens. You are going to have a conversion of our
    people, are you not, to combat support? Didn't I hear that you
    are going to convert our people?
        General Schultz. Mr. Chairman, the Army Guard leadership
    has agreed to convert up to 12 combat brigades to combat
    support and combat service support missions. We are in the
    first phase of that program right now, and it is a four-phased
    accomplishment overall, and so we are really in the early
    stages of that execution.
        Senator Stevens. I would be remiss, General, if I did not
    mention Littleton here because of your National Guard ChalleNGe
    Program. I do not know whether there was a program there in
    that area of Colorado. Is there an armory in Littleton?
        I do not know that area that well, but I do know that the
    work that you are doing in regard to the National Guard
    ChalleNGe Program, and the general equivalency diploma (GED)
    capability that you have to take young people through, young
    men and women through a critical period of their life where
    they are not making it in high school, and your program is
    really--is a fantastic one. As you know, I know from personal
    experience, that it has been very successful, and it is
    something that I hope we can make certain that you have the
    ability to continue.
        One of the problems is the cost-sharing from the States is
    increasing, and many States are complaining they do not have
    the ability to increase that cost-sharing. I would like to see
    if we cannot find some way to work with you so that there is an
    amount that will enable you to continue and expand some of
    those programs with lesser contributions from the States once
    the programs are underway. I think you have the capability to
    provide additional opportunities for young people.
        You had, as I understand it, just 15 States last year. This
    year, by the end of this year you will have 26 States and one
    territory. Twelve more States have told us they want into that
    program, and the contribution of the DOD is capped at 60
    percent of the program. That just will not work, because States
    will not pick up the additional cost of success, really. I
    think they will participate, but I think you have got a chance
    to really have an increasing impact on these young people that
    have sort of lost their way, and it has been highly successful
    in Alaska. I am told you have 16,000 graduates so far.
        General Davis. Yes, sir, 16,000 graduates and 12,000 of
    them managed to get their GED, so it has been a very, very
    effective program, one of the most cost-effective programs we
    have for young people. Also, young people are staying free of
    crime. We are in a major study now to look back at the 5 years
    of graduates to see what they have done and where they are, and
    I was just down in Louisiana 2 weeks ago and had the
    opportunity to visit some of those fine young people in the
    program.
        Senator Stevens. I wish we would get more Members of
    Congress to visit them and find out what they mean, because I
    think it is the most effective program to deal with juvenile
    delinquency in the whole country.
        The next one is the Boys and Girls Clubs, and we have been
    increasing funding them. They are generally a younger group,
    but you are picking up really young people who have been
    partially through high school and for one reason or another
    have run afoul of the law, or run afoul of just drugs, and the
    accomplishment is really staggering, and I think the Guard
    should be really commended for what it is doing.
        I have met some of these people that have come back, and
    they are really retired military in many instances who are the
    instructors and the mentors. It is just a fabulous, fabulous
    program. Every single parent that I have met that has had
    children go through that course have sought me out and said, if
    you can possibly expand that, do it, because that is the one
    that is working.
        I want to encourage you to tell us, you ask how much money
    we can find for that other program. We can find any amount that
    you want to take on to expand that National Guard ChalleNGe
    Program. I can tell you that without any question the Congress
    will support that, and what you are doing, you really ought to
    get recognition from the President as far as basic unit
    citations for the people that are working on this National
    Guard program.
        It is the most fabulous thing I have seen the military do
    in all my time sitting here. It is just a tremendous thing, and
    you have to be involved in it to understand it, I think. As an
    old friend of mine said to me once, I puddle up too easy, but
    that one affected the future of my grandson, and I will never
    forget it, so thank you very much.
        Senator Inouye. If you would yield, sir, I cannot say
    enough about ChalleNGe, also. It is very successful, as you
    know, in Hawaii. I think the record should show the costs as
    shown in your report. For ChalleNGe, it is $14,000 per corps
    member, for boot camps, $30,600, for the Job Corps, $30,000 per
    member. We have got a bargain here, and I think of all the
    three programs ChalleNGe is much more successful.
        Senator Stevens. And it is turning out to be one of the
    finest recruiting mechanisms, far and away. Almost half of
    those young people, men and women, are going into the service
    and being accepted. It is really a tremendous thing.
        Senator Inouye. And to think we were ready to dump it at
    one time.
        General Davis. Well, it started as a test program. That was
    one of the difficulties. It started as a test program, and
    people said, we do not think the test has proved what we think
    it ought to prove, but the alternative for many of these young
    people, because they are unemployed, and because they are in
    that high threat group, 16 to 18 years old, and they are not
    involved in school, they are drop-outs, there is a very great
    tendency for them to get involved in the penal system and the
    judicial system, and the result is that about $20,000 to
    $30,000 a year also, to keep them incarcerated, so we think we
    are making a big difference, and hopefully we are taking those
    young people and putting them on a path to become contributors
    to society, and not detractors from society.

                         Additional committee questions

        Senator Stevens. Well, that ChalleNGe Program will not
    decline as long as the two of us are here, either, but I think
    the two of us sat here and listened to people who said we did
    not need the C-17. Three years in a row they tried to kill the
    C-17 and the F-22. Sometimes I wonder what is going to happen
    when some of the old heads from our war are no longer here.
        [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. Roger C. Schultz
                Question Submitted by Senator Richard C. Shelby
                     army national guard full-time manning
        Question. The size of our Army National Guard is shrinking while
    operational tempo has remained the same. What can be done to improve
    the level of full-time manning in the Army National Guard units?
        Answer. The reduced size and increased tempo of the remaining units
    of the Army National Guard make adequate resourcing of Full-Time
    Support even more critical. I am requesting, but do not expect full
    funding and authorization in fiscal year 2000 to support the Army
    National Guard request of 23,500 Active Guard Reserves (AGRs) and
    25,500 Military Technicians. The Army National Guard will work through
    the POM (2001-2005) incrementally increasing our Full Time Support
    objective levels, however, if authorizations and resources are provided
    prior to 2001 we will fully execute those authorizations. Army National
    Guard Full Time Support levels directly impact Army readiness by
    providing critical training, command and control, technical, functional
    and military expertise required to efficiently and effectively sustain
    required peacetime readiness levels and transition to a wartime
    posture. The shortfall of Full Time Support significantly increases the
    risk of mission failure for those units in support of operations for
    the unified and combatant commands as well as Homeland Defense. Today,
    an aggressive modernization program exists which significantly
    increases the number of high tech, maintenance intensive weapon systems
    and equipment in the inventory. The impact of reduced Full Time Support
    manning levels manifests itself in a significant downward trend in
    equipment and training readiness. New Active Component/ARNG Integrated
    Divisions, including multiple-component units, Force XXI Division
    Redesign and Division Teaming have also generated the need for support,
    which may adversely impact our currently undermanned organizations.
    Without additional Full Time Support resources, the Army National Guard
    will not be able to fully support the integration initiatives without
    further reducing the level of support to our later deploying units.
    Implementing a phased approach is the best solution to begin on a
    ``road to recovery''.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan
                          full-time manning shortfalls
        Question. How is the Army addressing the shortfall in full-time
    positions for the Guard and Reserve?
        Answer. Current and future Army operations depend on a fully
    integrated force with the flexibility to respond quickly to meet
    rapidly changing operational requirements. Full Time Support personnel
    are critical links to the interoperability of the Army components. The
    Army leadership has conducted a rigorous analysis of Full Time Support
    requirements in its reserve components and endorses the requirements
    and the methodology used to determine those requirements; however,
    current resourced levels of Full Time Support manning do not meet the
    responsibilities of my office. I have submitted requests for additional
    Full Time Support authorizations. To begin on a ``road to recovery'',
    the Army National Guard has requested Full Time Support end strength
    and resourcing to support 23,500 Active Guard Reserve (AGR), (an
    increase of 1,627 AGRs--funding phased over POM 2001-2005) and 25,500
    technicians, (an increase of 2,399 military technicians--funding phased
    over POM 2001-2005). During this timeframe, Full Time Support
    requirements will be reviewed in conjunction with realigned TAA07 force
    structure allocations during the POM 2002-2007 process. However, the
    Army has not been able to meet the required levels of manning due to an
    affordability issue (i.e., the Army Total Obligation Authority (TOA)
    has not been sufficient to cover the requirements).
                        readiness and retention problems
        Question. Will a phased approach (fixing the problem over the FYDP)
    to fixing this problem mean readiness and retention in the Guard and
    Reserve components will get worse before they get better?
        Answer. The drawdown of Full Time Support end-strength has had a
    severe impact on the ability of all Army National Guard units to
    maintain readiness standards and contributes to the degradation of
    quality of life for our citizen soldiers and their families.
    Implementing a phased approach is the best solution to begin on a
    ``road to recovery''. I do not expect full funding and authorization in
    fiscal year 2000 to support the Army National Guard request of 23,500
    Active Guard Reserves (AGRs) and 25,500 Military Technicians. The Army
    National Guard will work through the POM (2001-2005) incrementally
    increasing our Full Time Support objective levels, however, if
    authorizations and resources were provided prior to 2001 we would fully
    execute those authorizations. During the interim, as we phase the
    increase in Full Time Support force, our challenge lies in meeting
    increasing mission requirements. Implementation of force structure
    changes (Multiple-Component, Force Integration, Total Force, Weapons of
    Mass Destruction, Information Operations, etc.) and modernization of
    equipment has intensified training and maintenance demands on Full Time
    Support manpower. There is a negative impact on units/armories when
    validated requirements are resourced at less than half. Soldier overall
    morale is low when there are only one or two soldiers in an armory or
    unit performing the work of three or four soldiers to recruit, supply,
    train, administer, organize and maintain the unit. When traditional
    soldiers do not receive adequate service due to shortages in unit level
    Full Time Support, some of them decide to leave the Army National
    Guard. Losing fully qualified soldiers impacts on unit readiness.
    Quality of life is degraded because there is insufficient manpower to
    provide fundamental services and support for the soldier and family. In
    light of all this, soldiers are being required to increase their
    commitments to accomplish implementation of force structure changes,
    additional mission requirements and equipment modernization
    initiatives.
        Question. Would the Army be able to address this problem more
    quickly if additional resources were made available?
        Answer. Yes. Army National Guard Full Time Support levels directly
    impact Army readiness by providing critical training, command and
    control, technical, functional and military expertise required to
    efficiently and effectively sustain required peacetime readiness levels
    and transition to a wartime posture. The shortfall of Full Time Support
    significantly increases the risk of mission failure for those units in
    support of operations for the unified and combatant commands as well as
    Homeland Defense. Today, an aggressive modernization program exists
    which significantly increases the number of highly technical,
    maintenance intensive weapons systems and equipment in the inventory.
    The impact of reduced Full Time Support manning levels manifests itself
    in a significant downward trend in equipment and training readiness.
    Initiatives such as new Active Component/Army National Guard Integrated
    Divisions, multiple component units, Force XXI, Division Redesign and
    Division Teaming have also generated the need for support, which may
    adversely impact our currently undermanned organizations. Without
    additional Full Time Support resources, the Army National Guard will
    not be able to fully support the integration initiatives without
    further reducing the level of support to our later deploying units. It
    is necessary to begin a ``road to recovery'' to increase the Army
    National Guard Full Time Support manning levels so I can fill vital
    positions in support of Total Army operations.
                                     ______

                Questions Submitted by Senator Richard J. Durbin
                        illinois guard full-time manning
        Question. The Illinois Adjutant General of the Army National Guard
    says that the Illinois Guard is woefully understaffed, and the lack of
    Full Time manning is affecting readiness. A number of state Adjutants
    General say that $184.6 million is needed for increased staffing, and
    that staffing requirements should not be handled through the Army POM
    process, which they say could take up to five years to reach desired
    staffing levels. Are more personnel critical for the Army National
    Guard? Will the Army process take five years? If so, can the Army
    National Guard afford to wait five years for the staffing shortage to
    be remedied?
        Answer. The Army National Guard's resourcing for its Full Time
    Support force is woefully low. We are now taking measured risks against
    deployment criteria with our lesser priority units to ensure a larger
    portion of required strength to resource our highest priority units.
    The failure to provide an adequate level of full time manning in our
    Army National Guard units is creating an unacceptable risk of mission
    failure if called upon for a national or state crisis. The current Full
    Time Support force is resourced at 54 percent of the overall required
    manning levels, less in lower priority units. When our current force is
    arrayed against deployment timelines, the Army National Guard is only
    able to support Force Package 1 units at 65 percent Active Guard
    Reserve (AGR) and 70 percent Military Technician (MILTECH) while Force
    Package 4 units are only able to be supported at 36 percent AGR and 40
    percent MILTECH. Additionally, during the last three year period the
    Army National Guard has recorded a significant downward trend in
    equipment and training readiness rates. We immediately need 23,500 AGRs
    and 25,500 MILTECHs. Implementing a phase approach is the best solution
    to begin on a ``road to recovery'' because I do not expect full funding
    and authorization in fiscal year 2000 to support the Army National
    Guard request of 23,500 Active Guard Reserves (AGRs) and 25,500
    MILTECHs. The Army National Guard will work through the POM (2001-2005)
    incrementally increasing our Full Time Support objective levels but if
    authorizations and resources are provided prior to 2001 we will fully
    execute. During the interim as we phase the increased Full Time Support
    force the challenge lies in meeting increasing mission requirements.
    The composition of force structure in the Army National Guard has
    changed significantly due to modernization of equipment, the fill of
    equipment to authorized TO&E levels and the realignment of Force
    Structure Allowance among the Army's components. Today's more modern
    equipment is more manpower intensive with respect to routine
    maintenance and repair. Too many of our armories have only one Full
    Time Support soldier assigned which has caused a severe lack of support
    for soldier and family care as well as an unrealistic expectation for
    this lone Full Time Support soldier to perform in multiple functional
    areas. We also need more manpower to handle both Weapons of Mass
    Destruction and the emerging mission of Information Operations.
    Additionally, the ARNG has been assigned many additional missions,
    which are absolutely necessary to facilitate the integration of the
    Army National Guard into one common force with the Active Component and
    United States Army Reserve. Increasing our full time support force to
    23,500 AGR and 25,500 MILTECH will put the Army National Guard on the
    ``road to recovery''.
                       danville armory and milcon issues
        Question. The Danville Armory in Danville, IL is a structure that
    was built more than 75 years ago. It is severely dilapidated and has no
    military or civilian car parking. In short, unless a new readiness
    center is built soon, the community faces the very real threat of
    losing its National Guard presence.
        To that end, the community has identified a new site near the
    Danville Airport for a readiness center. Danville would donate the land
    to the National Guard for the purposes of a new readiness center. The
    state of IL has earmarked more than $1.1 million for the project. This
    project is 100 percent design complete and it is the number one
    priority of the IL National Guard, as submitted to the National Guard
    Bureau in the Long Range Construction Program.
        Answer. Concur. This is an accurate statement of the facts.
                           danville il, armory status
        Question. Currently, a new Danville readiness center is 82 out of
    more than 1,300 projects on the Future Years Defense Plan (FYDP) wait
    list. However, of concern is the fact that last year the project was 37
    on the list. Thus, construction of a new facility is several years
    away. Is the National Guard aware of the need for a new readiness
    center in Danville, IL? Can the Guard explain why the Danville project
    is moving farther from the FYDP rather than closer to it?
        Answer. The Army National Guard is well aware of the deteriorating
    conditions of its readiness centers, including the one in Danville.
    Currently over 25 percent of all readiness centers are rated
    inadequate. In addition, many more are short space because the rapidly
    changing force structure has increased readiness center requirements.
    Finally, the average age of all readiness centers is 45 years, and over
    700 are 57 years old or older. The Danville Readiness Center ranked
    lower on the Infrastructure Requirements Plan last year, because more
    States are using the master planning tools we have provided them. Thus,
    they are providing more precise and detailed project listings in the
    Long Range Construction Program they submit each fall. Last year's
    Infrastructure Requirements Plan included almost 30 percent more
    projects than the year before. Because the plan's methodology gives
    priority to projects supporting the first-to-fight units, the Danville
    project will continue to fall as long as other States submit additional
    projects that support units of a higher priority than a division. It
    should be noted, however, that the Future Years Defense Plan has severe
    financial limits placed on it. It can only support about 5 percent of
    the projects that the States have planned for. The Infrastructure
    Requirements Plan is the only document that provides a complete,
    prioritized listing of Army National Guard military construction
    projects. That the Danville Readiness Center ranked 82 out of 1,340
    projects shows how worthy it truly is.
                                     ______

              Questions Submitted to Maj. Gen. Paul A. Weaver, Jr.
                Questions Submitted by Senator Richard C. Shelby
                                      f-16
        Question. In keeping with the spirit of the total force concept,
    does this process include modernizing Air National Guard F-16s for
    future deployment with the Air Expeditionary Force?
        Answer. The USAF plans to retire our aging ANG F-16As within the
    FYDP, replacing them with more capable F-16Cs. The ANG presently has
    four units equipped with LANTIRN Targeting Pods, and have procured 40
    Litening II targeting pods: fiscal year 1999 = 8, fiscal year 2000 =
    32. The ANG Precision Guided Munitions (PGM) roadmap was recently
    approved by the SECAF, outlining the Air Force's intent to continue
    procuring Litening II pods at a rate of 24 per year until all units are
    equipped. Additionally, we have a significant number of modifications
    planned for our C-model fleet.
        Question. If so, will this modernization be accomplished by
    procuring more modern F-16 aircraft, or by installing precision bombing
    package upgrades on existing aircraft?
        Answer. The current plan calls for the modernization of the
    existing ANG F-16C fleet. Four units currently flying the older F-16A
    variant will upgrade to the F-16C within the FYDP.
        Below is a listing of the mods/upgrades recently completed or
    currently funded for ANG F-16Cs between now and fiscal year 2005.
    All Blocks
        DTS
        AIM-9X
    F-16 Block 25/30/32
        Falcon-up Structural Improvements
        SLIP
        CUPID: GPS, NVIS, ALQ-213, and SADL
        Litening II Targeting Pod
        TARS Recce Pod
        EEFCC Fire Control Computer Upgrade
        Advanced Weapons Pylons /OFP: JDAM, JSOW, WCMD
    F-16 Block 40/42
        Falcon-up Structural Improvements
        CCIP: Modular Mission Computer (MMC), Color MFDs, Link-16, and
    Joint Helmet Mounted Cueing System (JHMCS)
        ALE 47 Dispenser
        ALE 50 Towed Decoy
        ALE 56M Radar Warning Receiver
        Improved Data Modem (IDM)
        Advanced Weapons Pylons/OFP: JDAM, JSOW, WCMD, JASSM
    F-16 Block 52
        CCIP: Modular Mission Computer (MMC), Color MFDs, Link-16, and
    Joint Helmet Mounted Cueing System (JHMCS)
        Color AVTR
        Harm Targeting System (HTS) R6/R7
        ALE 47 Dispenser
        ALE 50 Towed Decoy
        Improved Data Modem (IDM)
        Advanced Weapons Pylons/OFP: JDAM, JSOW, WCMD, JASSM
                            117th air refueling wing
        Question. Yesterday, elements of the Air Guard's 117th Air
    Refueling Wing in Birmingham were activated for the current war in
    Kosovo. As I am told, the Air Force would like to incorporate tanker
    units like the 117th into its Air Expeditionary Force structure.
    However the 117th needs a few additional tankers to optimize its
    utility to a unified commander in chief (CINC). How does the 117th
    acquire additional aircraft to ensure the Wing's deployability with the
    AEFs?
        Answer. The Expeditionary Aerospace Force (EAF) concept was
    designed as an effort to better manage force employment in the new
    global security environment. EAF provides a prepackaged response to all
    challenges from Smaller Scale Contingencies (SSCs) and other operations
    up to and including Major Theater War (MTW). EAF is a Total Force
    effort and includes participation from the 117th ARW.
        The Air National Guard and Air Force Reserve Command determined
    ``rainbowing'' units is the best way to support the EAF concept. The
    Reserve Components team with Active forces to form Aerospace
    Expeditionary Forces (AEFs). By assuming responsibility for a certain
    number of deployable tankers in each AEF, the Reserve Components
    support the National Military Strategy while maximizing opportunities
    for ``volunteerism.'' Taking available volunteers and aircraft from
    several units maximizes use of available manpower and aircraft to
    reduce active force OPSTEMPO/PERSTEMPO while continuing to support the
    local employer and unit training needs. The rainbow concept also
    ensures every Reserve Component unit is a full participant in the
    Expeditionary Aerospace Force without the need for additional aircraft.
    There are no ``excess aircraft'' in the tanker fleet, so acquisition of
    additional aircraft would be at the expense of another existing unit.
                                     ______

                 Questions Submitted by Senator Byron L. Dorgan
                     air national guard and reserve forces
        Question. What is the department doing to ensure that Air National
    Guard and Reserve forces have the proper equipment and training needed
    when these men and women are placed into harm's way?
        Answer. The combat readiness of Air Reserve Component (ARC)
    aircrews is dependent on current and future training devices. All
    aircrews within specific weapon systems train to the same requirements
    and standards ensuring total force readiness. However, the ARC must
    also focus on the unique training needs of the individual Reservist and
    Guardsman, their location, employment, and weapon system in order to
    provide quality training.
        The ARC continues to work with Air Force, DOD, and Congress to
    modernized and equip its force to ``fly, fight, and win.'' Funding for
    modernization remains the top priority for the ARC. National Guard
    Reserve Equipment Account funding and AF program funding is critical to
    ARC modernization. Modernization and sustainment investment must
    continue after the AF has transitioned combat capability to the ARC in
    order to meet the warfighters' needs.
        A training strategy of the Air National Guard led to establishing
    regional trainers for multi-engine aircrews, unit level trainers to
    meet the continuation training for tactical fighter aircrew, and
    ``rangeless'' air combat training systems [formerly Air Combat
    Maneuvering Instrumentation (ACMI)] which is used in any ANG
    ``backyard'' range. The Air Force Reserve, however, has concentrated on
    developing some of the most creative training options by using existing
    technology, combined with low-cost, available resources, to deliver
    unit training devices and multi-task trainers that allow crewmen to
    significantly strengthen their air proficiency.
        The ARC's primary training occurs using actual equipment with which
    units deploy, and secondary training is completed with simulators,
    trainers, and debriefing equipment. Continual increases in the cost of
    using actual equipment and advances in simulation technology will drive
    the use of secondary training sources.
        The Air Force generally procures training systems based on one
    simulator per active wing or base (typically an organization of three
    or more squadrons). Since ARC units are generally organized with a
    single squadron per base, elaborate motion simulators are not always
    cost-effective to procure and operate. Recognizing this, the Air
    National Guard and Air Force Reserve instituted a training concept
    designed to provide home unit training or regional training centers.
        Question. Is there a shortfall in the F-16 Attrition Reserve?
        Answer. Yes. The table below reflects the projected shortfall for
    each Block of our F-16 Fleet.

                           TABLE 1.--PROJECTED F-16 ATTRITION RESERVE SHORTFALL OF 42 AIRCRAFT
    ----------------------------------------------------------------------------------------------------------------
                                     Attrition   Current                         Fiscal year--
                                        Rate     AR (As  -----------------------------------------------------------
               F-16 Block              (Acft/   of 8 Jun
                                       Year)       99)      2000      2002      2004      2006      2008      2010
    ----------------------------------------------------------------------------------------------------------------
    Block 25.......................        1.0        11        10         8         6         4         2  ........
    Block 30.......................        2.6        28        25        20        15        10         5        -1
    Block 32.......................         .6         3         2         1  ........        -1        -2        -4
    Block 40.......................        2.2         2  ........        -5        -9       -13       -18       -22
    Block 42.......................        1.3         4         3  ........        -3        -5        -8       -10
    Block 50.......................        1.6        12        10         7         3  ........        -4        -8
    Block 52.......................         .4         7         7         6         5         4         3         3
                                    --------------------------------------------------------------------------------
          Totals...................        9.7        67        57        38        18        -2       -22       -42
    ----------------------------------------------------------------------------------------------------------------

        In fiscal year 1996, the USAF estimated our AF shortfall to be 120
    aircraft (i.e. 15 aircraft per year).
        In fiscal year 1997, the attrition rate was revised to account for
    numerous safety modifications accomplished. The revised shortfall
    became 40 aircraft (i.e. 9.7 aircraft per year).
      --This shortfall was reduced to 24 aircraft by the purchase of 16 AR
            aircraft: fiscal year 1996 = 6, fiscal year 1997 = 6, fiscal
            year 1998 = 3, and fiscal year 1999 = 1.
      --The fiscal year 1996-1999 procurement has been offset by higher
            than forecasted mishap rates, combat losses (are not
            programmed), and required QDR force structure changes to enable
            retirement of the ANG F-16As.
        The fiscal year 2000 PB contains a purchase of 30 new F-16
    aircraft: fiscal year 2000 = 10, fiscal year 2002 = 10, and fiscal year
    2003 = 10. These are not attrition reserve aircraft.
        These 30 new F-16 aircraft will partially backfill 66 F-16
    programmed to replace our aging F-16A aircraft in four ANG units: Great
    Falls, Duluth, Fargo, and Ft. Smith.
        Question. Are there concerns that the Joint Strike Fighter schedule
    could slip, leaving the Air Force with a shortage of ground attack
    aircraft?
        Answer. No. The JSF Program is on track to replace our aging F-16
    and A-10 fleets with operational aircraft beginning in fiscal year
    2008. Recent contractor and DOD replanning efforts for the remaining
    portion of the Concept Demonstration phase had little impact on the
    overall program schedule. The Joint Operational Requirements Document
    (ORD) is on schedule for Joint Requirements Oversight Council (JROC)
    review and approval in Fall 1999. Assembly of the contractors' Concept
    Demonstration aircraft is progressing well, leading to first flight in
    Spring 2000, and the subsequent start of Engineering and Manufacturing
    Development in fiscal year 2001. Extensive technology maturation, cost
    and operational performance trade studies, modeling and simulation, and
    Cost As An Independent Variable (CAIV) have all worked together to
    reduce risk lower than that of previous fighter development programs.

                              subcommittee recess

        Senator Stevens. Thank you all very much.
        If nobody has anything further, the hearing is recessed.
        [Whereupon, at 11:53 a.m., Wednesday, April 28, the
    subcommittee was recessed, to reconvene at 10 a.m., Wednesday,
    May 5.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                             TUESDAY, MAY 11, 1999

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

                             DEPARTMENT OF DEFENSE

                       Office of the Secretary of Defense

    STATEMENT OF HON. WILLIAM S. COHEN, SECRETARY OF
                DEFENSE
    ACCOMPANIED BY GEN. HENRY H. SHELTON, CHAIRMAN, JOINT CHIEFS OF STAFF,
                U.S. ARMY

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. Good morning, Mr. Secretary and Mr.
    Chairman. We are delighted to have you with us this morning.
        These are turbulent days for all of us, but I want you to
    know we are as proud of the two of you as we are of the people
    over there carrying out the Commander-in-Chief's direction. So
    we welcome you here today.
        We hope the committee will join us in wanting to discuss
    the fiscal year 2000 budget request, but I have an idea you
    might get off on a few other trails before the morning is over.
    That should not surprise anybody.
        We believe this fiscal year 2000 budget request that you
    have given us makes considerable progress towards improving
    readiness, modernization, and quality of life for the men and
    women in the armed forces. But that is put at risk by the
    contingency operations that have not been specifically
    authorized in our budget. We will want to discuss that with
    you.
        Later today, as you know, we want to commence and hopefully
    conclude the conference on the current funding needs for the
    operations in and around Kosovo. Our work on that bill does not
    address the level of funding that may be required to continue
    those operations or a new peacekeeping mission beyond fiscal
    year 1999.
        We know that you realize that the Balkans are not our only
    national security priority, and I would hope that while we may
    be preoccupied by what is going on in and around Kosovo we
    could discuss some of the critical security questions that face
    us here in our own hemisphere and Asia, and particularly in and
    around the former Soviet Union.
        We want to try and discuss also whether those priorities in
    other areas of the globe are suffering because of the emphasis
    now on the operations there on the continent.
        As I indicated at the beginning, all of us--I believe I can
    speak for our whole committee--have great confidence in you,
    each of you, and we want to have that reflect also our support
    of the men and women who serve under your command.
        The problem that I have right now is whether or not we are
    in fact lessening our readiness in other areas, such as the
    Pacific or the Persian Gulf. Our committee, just for your
    information, plans now to try to report the fiscal year 2000
    defense bill on Tuesday, May 25. We have been asked to see if
    we can get that bill ready to go to the floor prior to the
    Memorial Day recess. Of course that is somewhat contingent upon
    the Armed Services bill getting out there before us.
        But I think it can be done, and I think it would be very
    helpful to all of us if we would get that bill out as the first
    bill this year rather than the last bill, as we normally do.
        I want to again commend you for what you are doing and
    yield now to my friend from Hawaii.

                       STATEMENT OF HON. DANIEL K. INOUYE

        Senator Inouye. Thank you very much, Mr. Chairman. I wish
    to join you in welcoming the Secretary of Defense and General
    Shelton. May I ask that my full statement be made part of the
    record?
        Senator Stevens. Yes, sir, it will be.
        [The statement follows:]

                 Prepared Statement of Senator Daniel K. Inouye

        Good morning, I want to join my chairman in welcoming you,
    Mr. Secretary and General Shelton.
        During the course of our hearings this year, there has been
    one issue that keeps coming up--readiness.
        Our field commanders tell us their forces are ready to meet
    any challenge. Their personnel are capable and confident.
        But, when we look a little deeper we see that all is not
    well. For example, we are told that it is taking much longer to
    get our units ready to deploy; that there is neither the
    qualified manpower nor equipment available for them to deploy
    as quickly or as ready as before; that our workers at home are
    putting in longer hours because they are short in personnel and
    resources, but our forces overseas must be fully supported; and
    that our aging equipment is requiring more maintenance,
    stressing the wrench turners whose task is to keep the
    equipment running.
        We have the best military in the world and it is ready to
    respond.
        But, it is teetering on the edge.
        Pilots and other key personnel are still voting with their
    feet. Yes, pay and retirement are important, but many of our
    personnel tell us they are leaving because they have been
    deployed and re-deployed to the desert or Bosnia enough times
    that their families are no longer willing to accept the time
    apart, no matter how much you increase pay.
        We continue to defer property maintenance and our bases are
    feeling the strain.
        Our privatization efforts are demoralizing to our dedicated
    public servants who don't see an end to the process or a silver
    lining in this dark cloud.
        Mr. Secretary, it is a good budget which you have presented
    to the Congress this year.
        I am confident the improvements you recommend for our
    personnel will help our recruiting and retention efforts
    somewhat.
        But, we are living in an unprecedented era of global
    challenges. As the world's only superpower there have been many
    emergencies to which we simply have had to respond. This has
    forced us to expend our reserves.
        There is no longer any margin for error.
        The administration is wise to try and achieve efficiencies,
    but we must be sure our aim is true.
        We are investing in many costly modernization programs.
    There are those who contend that some of these new weapons
    might not be urgent or relevant to the future threats we are
    likely to face.
        Our defense accounting systems have been improved under
    your tenure, but we still cannot always be sure that we know
    all our dollars are being spent wisely.
        I, for one, believe you and General Shelton are doing
    excellent work and the nation should be indebted to you both.
        But, to survive in this world of budget caps, and global
    uncertainty, we must all redouble our efforts to ensure our
    dollars are spent wisely and that we do what is required to
    sustain our United States military.
        Mr. Chairman, I thank you for calling this hearing, and I
    look forward to the testimony of our witnesses.

        Senator Stevens. Does any other Senator have an opening
    statement? Senator Specter.

                        STATEMENT OF HON. ARLEN SPECTER

        Senator Specter. Thank you, Mr. Chairman. I commend you for
    calling this hearing. We are going to be marking up today, and
    the Department of Defense budget is a very, very big item.
        The recent events with the accidental striking of the
    Chinese embassy is a very big question. I note in this
    morning's media that there are going to be some more satellite
    transfers to the Chinese, and I will want to ask both the
    Secretary and the Chairman of the Joint Chiefs of Staff about
    that, whether the Department of Defense is privy to that and
    approving of it, and whether this is an appropriate time to be
    transferring technology to the Chinese at a time when they will
    not take a telephone call from the President.
        So these are very important questions and a very important
    time for this Defense Appropriations Subcommittee to have these
    two very important officials before us.
        Thank you, Mr. Chairman.

                      prepared statement of senator shelby

        Senator Stevens. Senator Dorgan, do you have an opening
    comment?
        Senator Dorgan. Mr. Chairman, no I do not.
        Senator Stevens. We will include a statement received by
    Senator Shelby.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        Good morning gentlemen, it is a pleasure to see you both
    again. Mr. Chairman, it is impossible to consider the fiscal
    year 2000 Defense Budget in a vacuum. For the past seven weeks,
    American military forces have been participating in a NATO led
    aerial campaign in the Balkans.
        Mr. Chairman, like many of my colleagues, I have traveled
    to the region. I have been briefed by General Clark, spoken to
    troops in the field and visited refugee camps in Albania. There
    is no question that our military personnel are the best in the
    world and are doing an outstanding job under extremely
    difficult circumstances. However, I have concerns over NATO's
    ability to salvage the humanitarian situation through aerial
    bombardment and its policy of war by committee. The United
    States led a coalition force during the Persian Gulf War. Yet
    in that war it was our military leaders and not politicians in
    Brussels who called the shots. Mr. Chairman, we won the Persian
    Gulf War; we are not winning this war. America should not fight
    wars to a stalemate, it should fight them to win or not fight
    them at all.
        A greater concern to me is the effect that this operation
    is having on the readiness of our military forces worldwide.
    Can we adequately defend South Korea, Taiwan and Kuwait while
    waging a full scale war against Serbia? Some of the facts are
    alarming. We have no carrier battle group in the Western
    Pacific. The Air Force has committed one-third of its combat
    aircraft to the Balkans. The President has authorized the
    activation of over 33,000 reservists. The United States is
    still involved in an undeclared shooting war with Iraq. Last
    month, the Administration informed the Appropriations Committee
    that the nation's stated ability to simultaneously fight and
    win two major regional conflicts is tenuous at best. In short,
    we are pushing the envelope of our military capabilities. Are
    there more Kosovo like conflicts in America's future? Do we
    have the force structure to engage in such conflicts? Mr.
    Chairman, the answer to these questions will impact defense
    budgets well beyond the year 2000.
        Make no mistake, I want this nation to succeed. However, I
    have concerns about our vital interests in the Balkans, the
    NATO command structure, and the effect of this operation on
    overall military optempo and readiness. The Balkans are not a
    place for the faint of heart. It is a harsh region and if there
    is a national interest in fully prosecuting this war we must be
    prepared to pay a heavy price in both dollars and maybe
    American lives. Success in any form, will not be cheap.
        Mr. Chairman, I would like to conclude by reiterating my
    support for our military forces throughout the world,
    especially those personnel fighting in the Balkans. Like their
    predecessors throughout history, the Americans who today go in
    harm's way wearing the uniform of their country lead a noble
    pursuit. Their service is not just another job as some would
    have us believe. I pledge my continued support to those
    Soldiers, Sailors, Airmen, Marines, and Coast Guardsmen who are
    in the field as we deliberate here today.
        Gentlemen, again welcome to the Committee. I have a number
    of questions regarding my stated concerns. I look forward to
    hearing your responses.

        Senator Stevens. Thank you very much. Senator Gregg.
        Senator Gregg. Pass. I would like to hear from the
    Secretary.
        Senator Stevens. Senator Lautenberg.
        Senator Lautenberg. No. I would like to hear from the
    witnesses, Mr. Chairman.
        Senator Stevens. Senator Bond.

                       STATEMENT OF HON. CHRISTOPHER BOND

        Senator Bond. Mr. Chairman, there are a lot of things that
    have gone wrong. We have managed to align the Russian
    extremists with the Chinese communist government. We have had
    problems in intelligence.
        Our job here is not to rehearse the problems, which seem to
    grow every day. We are looking for guidance and leadership from
    you gentlemen. We have confidence in you personally. There are
    an awful lot of questions, but our challenge today is to
    provide the resources that you must have, and we hope that we
    will get a clearer sense of mission and how we are going to
    achieve a favorable outcome when everything that we have done
    so far has led us in the wrong direction.
        So we want to help, but we need to know what direction you
    are going.
        Senator Stevens. Thank you very much.
        Gentlemen, we really need to know what you need in terms of
    funds before the end of this fiscal year, what you think needs
    emphasis for fiscal year 2000, and any guidance you can give us
    beyond that.
        I would hope we will stay with the problems of this
    committee, because they are very, very pertinent today because
    of our meeting on the supplemental. Thank you very much.
    Secretary Cohen.

                                 Kosovo update

        Secretary Cohen. Thank you very much, Mr. Chairman.
        Let me simply submit my statement for the record and I will
    try to be as brief as possible so as to allow the maximum time
    for questions.
        A brief word on Kosovo. There were reports yesterday that
    Mr. Milosevic was preparing for a partial pullout. Number one,
    we have seen no evidence of any partial pullout. Number two, a
    partial pullout would mean a total victory for him. Partial
    pullout is not acceptable.
        He must comply with all of the five component requirements
    that have been laid out by the North Atlantic Treaty
    Organization (NATO), and that means he must pull all of his
    forces out, both army and police, from Kosovo; he must allow
    the refugees back in to a safe environment; and he must allow
    for an international peacekeeping force with NATO at its core;
    and he must grant autonomy to the Kosovar Albanians.
        Anything less than these key components would mean a
    victory for Milosevic, and so we will insist upon this. And the
    notion that somehow if he just makes a partial pullout and goes
    back to what he claimed peacetime conditions would mean that he
    would have successfully purged a large number of the ethnic
    Albanians from Kosovo, creating a humanitarian catastrophe of
    immense proportions, and then said let us make peace.
        In other words, he would have codified Tacitus's
    observation that they made a desert and they called it peace.
    That is something that we simply cannot accept.
        As we have indicated before, Mr. Chairman and members of
    the committee, we have tried diplomacy. We tried deterrence.
    And when both failed we set about to damage his military
    capability. And, as the Chairman I am sure will indicate, we
    have been successful in achieving our goals and will continue
    to be successful as we intensify the campaign.

              intelligence failure behind Chinese Embassy bombing

        Which brings me, of course, to the supplemental. But before
    I do one word about the Chinese embassy. I made a statement
    yesterday from the Pentagon indicating that it was an
    intelligence failure. It was not a pilot error. It was not a
    mechanical error. It was an intelligence failure. Some
    interpreted my remarks as trying to shift blame to the State
    Department--completely wrong.
        This was an intelligence failure, a series of mistakes that
    were made throughout the intelligence community which in fact
    ended up by allowing the Chinese embassy to be misdesignated in
    terms of the targeting.
        And so it is not a question of pointing any fingers. The
    fingers point clearly to an intelligence breakdown as far as
    failing to identify the movement of the Chinese embassy from
    Old Belgrade to the so-called New Belgrade.
        I think there is also a difference or distinction between
    righteous indignation and calculated exploitation. I think we
    have to be very concerned about that. I think many of the
    Chinese people were justifiably angry in terms of what had
    happened, but we must keep in mind that they are seeing a very
    small part of the total picture.
        They do not have freedom of the press. They do not have
    unlimited access to world news. They do not see what Milosevic
    has done in terms of his forces executing several thousand, if
    not more, of innocent civilians, of causing 1.5 million
    refugees, displaced persons of 300,000 or 400,000 who are now
    roaming the hills in search of safety.
        They have seen none of that, and what they have seen is a
    stream of invective directed at the United States and NATO
    against a supposedly innocent and unarmed country by the power
    of 19 countries.
        And so if you put that in that context, you can understand
    why they expressed the outrage that they have.
        But it must also be said that those in government at high
    levels must know--indeed we have made every attempt to convey
    to them--the message that this was a mistake, an error on our
    part. It was not an intentional attack upon the Chinese
    embassy.
        And we have said it several times, and only today do I
    believe that President Clinton's message was allowed to get
    through, and we will continue to point out that this defies all
    logic. It defies all logic to say, for anyone to say this was a
    deliberate attack, Mr. Chairman, because we have tried to
    promote better relations with the Chinese.
        I myself have made a number of trips to meet with my
    counterparts in China, including the leadership of China, and
    had planned to be there earlier this year, had planned to go
    again in June. And so I believe that our long-term relations
    are important, and it would be contrary to every shred of logic
    that we would seek to deliberately undermine that relationship
    by deliberately targeting the Chinese embassy.

                         fiscal year 1999 Supplemental

        Now, Mr. Chairman, let me come to the supplemental first.
    We have requested approximately $5.5 billion as far as the
    defense portion of the supplemental request, with another $0.5
    billion, roughly, going to the State Department.
        We believe that that is necessary for us to carry through
    the current air campaign at its current operational tempo. The
    funds, I would point out very quickly, do not include anything
    for peacekeeping. It would not include any funds for any kind
    of land force, should any ever be required. And again the
    President has indicated he does not intend that, but even if
    there were a peacekeeping force there are not funds in the
    supplement for that.
        This is purely to continue the air campaign at its current
    pace and rate until the end of this fiscal year.

                 Fiscal year 2000 budget request and priorities

        With respect to the budget itself, budget 2000, that this
    hearing is focused on, we, as you know, have requested a total
    of a $112 billion increase over the next 6 years. That is short
    of what the Joint Chiefs of Staff testified to before the
    Senate Armed Services Committee.
        The Joint Chiefs indicated they needed roughly $148 billion
    over the 6-year period. We were able to recommend and support
    $112 billion as meeting our most immediate needs.
        In that $112 billion request, we have focused in three
    areas. First of all, people. I think all of you are aware, many
    of you have made trips around the world to visit with our
    troops, and you would verify that we have the finest fighting
    force in the world. We have the best people, the best educated,
    the best equipped, the best led force in the world.
        And we want to keep it that way, and we have found that we
    have seen some real stresses being placed on that force. And as
    a result of that we are having more difficulty recruiting and
    retaining the quality people which make us the best fighting
    force in the world.
        So we have tried to address that in our recommendation for
    the 2000 budget and those that follow, with a pay raise of 4.4
    percent, with pay table reform, trying to take those mid-grade
    officers and non-commissioned officers (NCO) who are the most
    attractive to the private sector, to see if we cannot provide
    additional compensation, anywhere from a half of 1 percent up
    to 5 percent, on top of the pay raise.
        So we have tried to target those benefits to the
    individuals who really have performed in an outstanding
    fashion, and are the most attractive to the private sector.
        And then there is a retirement package, the so-called
    Redux. We have put the retirement base from 40 percent back up
    to 50 percent, where it was prior to 1986.
        We believe that the combination, the triad, of those three
    components will help with our recruitment and also with our
    retention. The Chairman can address those in a moment.
        Also with respect to operation and maintenance (O&M), here
    I know from my past experience that many times when it comes to
    a budget crunch, so to speak, there are always undistributed
    reductions that are handed to the Defense Department, and where
    they come out of, clearly, is operation and maintenance.
        And so we find ourselves denying funds for either training
    or maintenance or maintaining this wonderful force that we
    have. So I would hope that we would fully fund the O&M accounts
    as we have requested.
        The final component is that of procurement. Mr. Chairman, I
    spent a good deal of my time on the other side of this table
    trying to reverse the decline in procurement in our defense
    budgets. We have witnessed over the years, ever since the
    height of the cold war, roughly a 70 percent reduction in our
    procurement budgets.
        We got down to the level of $40 billion, $41 billion, $42
    billion when in fact you had the uniformed services coming
    before you, and the former Chairman of the Joint Chiefs,
    General Shalikashvili, saying we really have to have
    approximately $60 billion on an annual basis in order to
    replenish the stocks that we have and to modernize them in a
    way that will keep us one or two generations ahead of our
    opponents.
        We have been climbing up that ladder now, and this year I
    had had a goal of $54 billion. I fell roughly $1 billion short.
    I am at $53 billion. But by the year 2001 we will be above the
    $60 billion mark, so we are on an upward climb that will take
    us to where we have to be in order to modernize our forces for
    the future.
        So it is people in terms of the pay and the compensation,
    retirement. It is O&M in terms of maintaining our operational
    readiness. And readiness, as you know, has been a problem for
    us. We have always had to try to balance readiness, O&M, and
    procurement. And they are never in perfect static balance.
        Some years we have had very large amounts devoted to
    readiness and we have let the procurement go down. In other
    years we tried to bring the procurement up, and readiness
    starts to drop down. In this particular package we have tried
    to achieve a balance by increasing the funding for readiness
    and increasing the funding for procurement, and also increasing
    the funding for people.

                                Funding topline

        In order to do that, I have had to request an increase.
    When I first took over this position about two and a half years
    ago, we had just completed, Congress had just completed
    negotiating with the White House in terms of what the top line
    was going to be. And at that time it was fixed, in my judgment,
    having taken over this position, we were unlikely to get an
    increase in the foreseeable future and the immediate future.
        So we had to work within the confines of those budget caps,
    and we still are. But I must say that after serving in this
    position and really trying to do whatever we can in the way of
    reforming the way in which we do business--and I can talk about
    that in a moment--that we simply cannot carry out the missions
    that we have with the budget that we have.
        There is a mismatch. We have more to do and less to do it
    with. So that is starting to show in wear and tear--wear and
    tear on people, wear and tear on equipment. And that is the
    reason why I went to the President and Office of Management and
    Budget (OMB) and said we have to have an increase. Again, the
    Chiefs said $148 billion. We were able to get $112 billion, and
    we believe that meets the most immediate pressing needs in
    terms of revising and modernizing our force.
        A final word on the revolution in military affairs. You
    have heard me speak about this before, but there also is a
    revolution in business affairs. We have really undertaken to
    revolutionize the way in which the Pentagon operates. We are
    engaging in reengineering practices. We are consolidating
    agencies. We are competing positions. We will compete some
    229,000 positions over the next 6 years, and that, we
    anticipate, will save us about $11 billion.
        And we are eliminating. And here I would just say a brief
    word about base realignment and closure (BRAC). The Senate
    Armed Services Committee is about to mark up their bill. I have
    sent a letter, which has been endorsed by all of the members of
    the Joint Chiefs of Staff, that we need at least two more
    rounds of BRAC to get the savings in the future, not now,
    because the money that I have put in the budget really costs us
    to close bases, and I have added some almost $3 billion in the
    budget in order to pay for the costs of achieving these two
    rounds, two more rounds of closures.
        But they will, by the year 2008 to 2015, they will during
    that period of time save us approximately $20 billion
    cumulatively, and after that roughly $3.5 billion on an annual
    basis.
        So it is not for me or for the Chairman or for our military
    at this moment that we need to adopt these two more rounds and
    to pursue them. It is for those who are coming behind us and
    who will need the money to put into pay and compensation and
    pay table reform and Redux and more procurement, because there
    will be a bulge coming in terms of procurement, and unless we
    are able to start saving funds that we know we need to save,
    then we are going to put them in some jeopardy.

                               prepared statement

        Mr. Chairman, I have more to say, but I think I will abide
    by my own admonition of not speaking too long and defer to the
    Chairman and then try to answer your questions.
        [The statement follows:]
                     Prepared Statement of William S. Cohen
        Mr. Chairman, members of the Committee, it is a pleasure to be here
    for this wrap-up hearing on President Clinton's fiscal year 2000
    Department of Defense (DOD) budget request. You previously received my
    full statement explaining our fiscal year 2000 request, so today I will
    only highlight its major themes.
        Before getting to fiscal year 2000 issues, I want to comment
    briefly on our operations in Kosovo. Thanks largely to the exceptional
    performance of the men and women of America's armed forces, our
    intensified air campaign continues to go very well. We continue to
    degrade the structure that President Milosevic has used to destroy the
    Albanian majority in Kosovo. We are systematically choking off the
    Yugoslav army and security forces in Kosovo by cutting their supply
    lines and are directly attacking those forces on the ground. And we are
    continuing to attack Milosevic's command, control and communications
    and other elements of the infrastructure that supports his machinery of
    repression.
        Meanwhile, NATO nations remain resolved to achieve NATO's aims.
    President Milosevic must withdraw his forces from Kosovo and allow all
    refugees to return, with full access for humanitarian assistance and
    with the deployment of an international military force that must have
    NATO at its core.
        With our intensified operations consuming considerable resources
    previously budgeted for other needs, I urge Congress' prompt completion
    of action on President Clinton's request for supplemental fiscal year
    1999 appropriations for Kosovo and other requirements. We must ensure
    that our armed forces have what they need to fulfill the missions given
    them and to stay ready for future missions as well.
                   priorities in the fiscal year 2000 budget
        Turning now to next year's budget, President Clinton's proposed
    budget authority for fiscal year 2000-2005 reflects his plan to make
    available to DOD $112 billion in additional resources. These added
    resources will enable us to fund the most critical priorities
    identified by our military leaders. I am delighted that most members of
    Congress seem to agree with President Clinton's conclusion that defense
    resources must be increased substantially over the next several years.
    I also perceive strong support for the spending priorities reflected in
    our multiyear program. Indications are that the Congress agrees with
    the need to: Put people first with major increases in pay and military
    retirement benefits; protect readiness with strong funding for
    operations, training, and maintenance; and achieve critical weapons
    modernization through increased Procurement funding.
        Congressional leaders have been especially receptive to our
    proposals to improve military pay and retirement benefits. As you know
    we put forward a triad of compensation enhancements:
        (1) The REDUX change in military retirement would be reversed by
    raising benefits from 40 percent to 50 percent of base pay for members
    retiring after 20 years. Restoring military retirement benefits was the
    military leadership's top priority.
        (2) Military base pay in fiscal year 2000 would be raised 4.4
    percent--the largest military pay increase since fiscal year 1982. This
    raise exceeds the forecasted rate of civilian wage growth (employment
    cost index or ECI) and is more than two percentage points above the
    general inflation rate as reflected in the Consumer Price Index.
        (3) Pay also would rise in connection with military pay table
    changes to increase the raises associated with promotions. This change
    will reward performance, compensate people for their skills and
    experience, and encourage them to continue their service.
        We are very proud of our efforts to put people first and to
    compensate better the tremendous sacrifices of our military men and
    women.
                              protecting readiness
        For fiscal year 1999, prompt approval of Kosovo supplemental
    appropriations will ensure that our forces remain fully ready to
    support our national military strategy. Currently, most of the costs of
    our Kosovo operation are being accommodated from within the military
    services' Operation and Maintenance (O&M) accounts by borrowing funds
    that will be required for 4th quarter training. The services are
    continuing to conduct normal training for those forces not involved in
    Kosovo operations, and readiness is not yet being affected. However,
    expeditious action on this supplemental is needed to restore previously
    budgeted fiscal year 1999 funds and avoid serious readiness impacts
    later in the year.
        For fiscal year 2000, I urge you to fund fully our Operation and
    Maintenance (O&M) request, which funds the military services' most
    pressing readiness requirements. It supports traditionally high
    OPTEMPO, flying time, and other readiness enhancers; readiness-related
    maintenance and improvements at DOD facilities; and readiness-related
    modernization, in areas like electronics and maintainability.
        I especially ask you to keep in mind the consequences of
    undistributed cuts to O&M accounts. These cuts often are justified as a
    way to compel the Pentagon to cut waste or bureaucracy. But their
    ultimate effect is to hurt force readiness by underfunding O&M. I am
    sparing no effort in streamlining infrastructure and preventing waste.
    We are making tremendous progress, and I urge your support so we can do
    much more. But extracting greater savings takes more than legislative
    provisions mandating such savings as a bill-payer for other desired
    funding. As I have stressed repeatedly, by far the best way to achieve
    greater streamlining is for Congress to approve two additional base
    closure rounds.
                         achieving modernization goals
        As reconfigured by the QDR, the Department's weapons modernization
    plans include development of cutting-edge capabilities as well as cost-
    effective upgrades to existing systems. Helped substantially by the
    President's addition of resources, our fiscal year 2000 request meets
    the QDR recommendation to increase Procurement funding to $60 billion
    per year by fiscal year 2001. To stay on track for this and subsequent
    modernization goals, we need your support both for our total dollar
    request and for all our program's schedule and components.
               continuing validity of our fiscal year 2000 budget
        Our Kosovo operations validate the conceptual foundation of my
    department's budget and programs. Most notable is the importance of
    preserving the high quality of our military people. The Kosovo campaign
    demands peak performance and leaves precious little room for error.
    Every pilot, support technician, air and ground crew member--everyone
    is critical to successful missions. By putting people first, the fiscal
    year 2000 request reflects our conviction that America's superior
    military professionals will be the most critical determinant of
    battlefield success in this post-Cold War era.
        Kosovo operations demonstrate why we must retain high standards of
    readiness. When certain forces are needed, there may not be much time
    for them to recover from personnel shortages, deferred maintenance, and
    supply shortages. Evident as well is why we must make every O&M dollar
    count. As done in our fiscal year 2000 request, the budget must fund
    the requirements that our military leaders have assessed to be the most
    critical to battlefield success.
        Kosovo shows why, even in the face of pressing current needs, we
    must set aside substantial sums for the future. We must modernize our
    weapons, electronics, and other critical systems because they need to
    be exceedingly accurate, fast, reliable, and capable of giving U.S.
    forces an overwhelming advantage. We are not looking for a fair fight.
    Indeed, we want to destroy targets before a fight can develop. Missions
    in this new era will continue to be highly demanding.
                                    closing
        In closing, I urge your strong support for our fiscal year 2000
    budget request. The details of our program reflect the enormous effort
    of our civilian and military leaders to include in the request the most
    critical needs of our armed forces. While there is more to be done to
    improve our military's quality of life, accelerate modernization, and
    acquire more assets that are in high demand, we are convinced that ours
    is a balanced and very strong plan to ensure the future superiority of
    America's armed forces. I urge your approval of that plan, as reflected
    in our fiscal year 2000 budget request.

        Senator Stevens. Thank you very much, Mr. Secretary.
        Mr. Chairman?
        General Shelton. Mr. Chairman, Senator Inouye, and other
    distinguished members of the committee, it is an honor to
    appear again before this distinguished committee, and I would
    like to submit a written statement for the record and take only
    a few minutes to highlight some key points of that statement.
        Two weeks ago I appeared before the full Appropriations
    Committee to discuss Operation Allied Force and the Defense
    Department's request for emergency funding to cover the cost of
    this operation, the ongoing humanitarian efforts in the
    Balkans, as well as the munitions expended in Allied Force and
    Desert Fox.
        In the past 2 weeks I have had the opportunity to visit our
    troops in Bosnia, Italy, Albania, Germany, and, most recently,
    Macedonia. In every case, I have been very impressed with their
    unswerving patriotism and sense of duty. Our troops operating
    in the Balkans are great representatives of America, and we
    should be grateful that we have men and women in uniform to
    carry out the missions that we have given them.
        They still face a high risk in Operation Allied Force, but
    thanks to their superb planning and their outstanding
    execution, our air forces have not only substantially degraded
    the robust, multi-layered, integrated air defense system in
    Yugoslavia, but they have also been able to attack the Serbian
    army and police units with great effect.
        These NATO air strikes are having a significant impact on
    Milosevic's forces in the field. Nonetheless, the risk of
    casualties remains high, and, of course, it remains very real.
    In spite of our best efforts to the contrary, the possibility
    of unintended casualties and damage remains very real.
        As you are all aware, there is no such thing as a risk-free
    military operation, a fact that has been made very clear to all
    of us by the tragic deaths of Chief Warrant Officers David
    Gibbs and Kevin Reichert on a training mission in Albania, as
    well as by the erroneous strike on the Chinese embassy which
    Secretary Cohen commented on in his statement.
        It is important to remember that these risks are always
    present, and so our thoughts and prayers go out to the families
    and those brave aviators and brave Americans and their NATO
    colleagues, and all the innocent victims of Milosevic's brutal
    actions.
        On my last trip I was able to meet with a large number of
    soldiers, sailors, airmen and marines in the theater
    participating in Operation Allied Force. I found their
    dedication, morale, and sense of professionalism almost
    overwhelming. And the even better news is that we are not
    alone. Our NATO allies are performing magnificently. It is
    truly a well-oiled machine.
        During my testimony in closed session 2 weeks ago before
    the full committee, I asked for the swift approval of the $5.5
    billion request for a non-offset supplemental. This money is
    needed now to replenish the funds that our outstanding people
    in the field and our fleet units have had to borrow from fourth
    quarter operations and training accounts in the current fiscal
    year 1999 budget. Unless these funds are added very soon, the
    readiness of non-deployed units will slip, leaving them less
    ready to replace or reinforce our forward-deployed units.
        Furthermore, the progress made in the aviation spares
    program could be undone, and in fact the situation could be
    made even worse by the increase in our operating tempo.
        While the focus of attention recently has been on the
    ongoing operations in the Balkans, I know that this committee
    is focusing on the fiscal year 2000 budget, which, if funded by
    the Congress, will mean an increase in defense spending of more
    than $12 billion in fiscal year 2000, and $112 billion over the
    next 6 years. This budget, as Secretary Cohen said, will fully
    fund our critical readiness requirements and provide the
    resources needed for essential retirement and compensation
    reforms. It will also enable us to achieve the procurement
    goals outlined in the Quadrennial Defense Review (QDR).
        The ongoing combat and humanitarian operations carried out
    in Europe today have once again demonstrated that our deployed
    and first-to-fight forces remain very capable, and the true
    foundation of a world-class military is our people and not our
    hardware. Therefore, we must reform our personnel retirement
    and military pay, and these initiatives remain the Joint
    Chiefs' highest priority.
        I am fully aware that these initiatives--across-the-board
    pay raises, pay reform, and return to a retirement formula
    based on 50 percent of pay at 20 years--have very strong
    support from members of this committee, and on behalf of all
    the Joint Chiefs, as well as all of our men and women in
    uniform, I would like to express our appreciation for your
    strong support.
        As we continue to grapple with the competing requirements
    of current readiness and providing adequate compensation, we
    must also continue to move forward on our plans to prepare for
    the future, and the President's budget meets the QDR goals of
    funding for our modernization programs and will be a major step
    in the right direction.
        We are also making progress toward making our conceptual
    framework for future military operations, spelled out in Joint
    Vision 2010, a reality. We realize that we must also have an
    accompanying vision for how best to organize our forces and how
    to support the future joint battle. That conceptual framework,
    which we call the Unified Command Plan 21, will be included as
    an annex to the 1999 Unified Command Plan recommendation.
        Finally, as I have testified before and as Secretary Cohen
    mentioned in his statement, the Joint Chiefs of Staff remain
    firm in our belief that we need additional BRAC rounds to
    reduce the remaining excess infrastructure and the accompanying
    drain on already-strained fiscal resources.
        Mr. Chairman, today the United States has the finest
    military in the world, a force that is substantially sound and
    still capable of executing our national military strategy and
    defending our interests around the globe. It is a force, as you
    know, that is extremely busy and is being used frequently to
    meet our global responsibilities and our global commitments.
    Every step that this committee takes to ensure that we have the
    right training, the equipment and the compensation will be a
    step in the right direction toward preserving this excellence
    for the future.

                               prepared statement

        Again, I appreciate the opportunity to appear before this
    committee, and I look forward to your questions. Thank you, Mr.
    Chairman.
        [The statement follows:]
                  Prepared Statement of Gen. Henry H. Shelton
        It is an honor to report to the Congress today on the state of the
    United States Armed Forces. At the outset, I would like to pay tribute
    to our men and women in uniform. As always, they serve our country
    selflessly, often far from home and loved ones, defending our Nation
    and its interests and helping to keep the peace in a still dangerous
    world. America can--and should--be proud of its soldiers, sailors,
    airmen, and marines. They represent the United States at its very best.
                           sustaining a quality force
        America's military strength rests on a foundation of quality
    people, ready forces, and an effective modernization program. While
    each of these elements is absolutely essential, one must come first--
    people. Without skilled, committed people, we will be unable to exploit
    the full potential of our advanced weapons systems on the battlefield.
    And without the support of strong military families, we will be unable
    to field a force capable of meeting the demands of the next century. To
    preserve a high quality, professional military we must act decisively
    now to ensure the quality of life that our service members and their
    families deserve.
        The building blocks of a quality volunteer force are the ``Big 4:''
    an attractive, equitable retirement system; competitive pay;
    accessible, quality health care; and adequate housing. Providing the
    resources to meet our needs in these critical areas is essential to the
    long-term health of the force and our future readiness.
    Reforming Military Retirement
        The success of the National Military Strategy hinges on our ability
    to attract and retain high quality personnel. Without bright,
    motivated, and technically skilled people we will be unable to exploit
    the promise of our future weaponry, operational concepts, and advanced
    technology.
        In our units, the perception of an inadequate retirement program
    consistently surfaces as a primary cause of our recruiting and
    retention problems. Survey results, combined with feedback gathered by
    leaders from all the Services during field and fleet visits, have
    convinced us that long-term retention is not well served by the Redux
    retirement plan. Our men and women deserve a retirement system that
    more appropriately rewards their service.
        Restoring an attractive retirement program for all active duty
    members is therefore my top legislative priority in the fiscal year
    2000 Budget. The system adopted must provide an incentive to serve
    until retirement. Redux does not do that; in fact, it has emerged as a
    disincentive to continued service.
        Fixing our retirement system is an urgent priority because the
    lifetime value of military retirement has declined by as much as 25
    percent following the reforms of the 1980s that created the High-3 and
    Redux programs. Two-thirds of the current active duty population is now
    under the Redux ``40 percent of base pay'' formula after 20 years of
    service, instead of the 50 percent enjoyed by all others. In addition,
    these members will not be provided full Consumer Price Index cost-of-
    living adjustments (COLAs), as their predecessors are. This variance in
    the value of military retirement programs gives career service a
    diminished value. As a first step to correcting this disparity, I urge
    the Congress to eliminate the 40 percent Redux retirement formula and
    to restore the ``50 percent of base pay'' formula for 20 years of
    active-duty service, as proposed in the President's fiscal year 2000
    budget.
    Competitive Pay and Pay Reform
        Competitive pay is the other core element of a comprehensive
    compensation package essential to sustaining a quality, all-volunteer
    force. To recruit and retain high quality men and women, military pay
    levels must compare favorably with salaries in the private sector. The
    recent challenges faced by the Services in meeting accession and
    retention goals are clear signs that the growing disparity between
    military and civilian pay levels must be resolved.
        Much of the discussion about the pay gap between the military and
    civilian sectors has to do with the Employment Cost Index, or ECI (the
    ECI reflects civilian wage growth and is identified in law as the
    appropriate guideline for federal pay raises). Depending on which year
    and associated ECI value is used to begin pay comparisons, the current
    gap between military and private sector pay ranges from 5.5 percent to
    13.5 percent. Military pay raises have lagged behind average private
    sector raises for 12 of the last 16 years. This decline is significant
    because it affects both active and retired pay and communicates a lack
    of commitment to pay equity.
        Secretary Cohen has noted in the past that while we can never pay
    our men and women in uniform enough, we can pay them too little--and in
    my view, we are.
        To maintain a professional, ready, all-volunteer force, we must
    resolve this problem. Congress and the Administration have recently
    taken important first steps in leveling off the long decline in
    military pay levels. The full ECI pay raise enacted for fiscal year
    1999 and the commitment to provide such raises over the Future Years
    Defense Program are very positive indications that our Nation's
    leadership is committed to restoring military-civilian pay
    comparability.
        We should also undertake long-overdue reform of basic pay. This
    idea is not new. Both the 7th and 8th Quadrennial Reviews of Military
    Compensation called for a restructured pay table emphasizing promotion
    over longevity as the primary basis for pay increases, as this would
    send a clear signal that superior performance is valued and rewarded.
    Such an initiative would help us achieve two important and related
    goals: first, to provide enhanced pay raises for our mid-career
    commissioned and non-commissioned officers, those who serve at the
    grade levels where the most significant pay gaps between the military
    and the private sector exist; and second, to achieve greater retention
    of our high performing service members.
        In sum, if we are to compete more favorably with the private
    sector, we must close the pay gap, sustain military pay at full value
    with annual pay raises linked to full ECI, and provide enhanced pay to
    our mid-careerists. We are confident that these actions, together with
    return to a retirement system that provides 50 percent of base pay at
    20 years, will help substantially in our efforts to reverse the
    negative trends in recruiting and retention. A recent RAND study
    concluded, for example, that our proposed pay and retirement reforms
    could increase overall retention by 14 percent and enlisted retention
    to the 20-year point by 20 percent. To keep our Armed Forces strong and
    healthy, I urge the Congress to approve these programs as quickly as
    possible.
    Military Health Care
        We are currently in the midst of a long-term program to restructure
    the military medical community to better support its wartime mission.
    The full implementation of managed health care for military members and
    families was just completed in June, and in upcoming months we will
    assess the level of success TRICARE has achieved in meeting its goals
    of improving access and holding down costs. We are also anxious to see
    whether our other initiatives, such as the National Mail Order
    Pharmacy, have improved health care services.
        As we transition to new programs and procedures, I want to stress
    that our commitment to quality health care for military retirees
    remains firm. To that end, we appreciate Congressional legislation that
    will allow the Department of Defense to test various retiree health
    care initiatives, such as Medicare subvention and participation in the
    Federal Employees Health Benefits Program. We believe these will be
    important steps in the effort to ensure uninterrupted medical care for
    our retirees, steps that will also send a strong signal to those
    considering a career in uniform.
    Military Housing
        For our active duty military families, the status of military
    housing is a particular concern because of its immediate impact on
    quality of life. As I reported last year, the condition of many of our
    family and single-member housing units is alarming. One-third of our
    military families are housed in approximately 320,000 units, 66 percent
    of which are substandard. Beyond that, 25 percent of DOD's 383,000
    barracks spaces do not meet current standards, with the Services
    reporting a shortfall of 42,000 additional spaces. Currently, all the
    Services have submitted, or are drafting, plans to conform to the most
    recent DOD guidance to bring single member and family housing up to
    acceptable standards by 2010. Congressional funding to implement
    Service plans and to correct the shortcomings in military housing is
    vitally important, and will do much to upgrade the quality of life
    enjoyed by our service members and their families.
    Family Support Systems
        Support for family services on military installations also
    contributes significantly to the effort to retain our best personnel.
    Given the demanding pace of military operations, service members should
    be allowed to focus on their mission free from worry about the welfare
    of their families. Accordingly, funding for quality DOD schools, child
    development activities, and other family assistance programs is
    important, particularly today when the stresses of operational
    deployments are higher than ever before. Other family support
    initiatives, such as morale-enhancing communication links with deployed
    members and spouse employment programs, are helping to counter the
    effects of frequent moves and separations on military households.
    Especially today in an era of repeated deployments, family support
    programs must continuously evolve to respond to the unique demands of
    military service. It has often been said that to sustain a quality all-
    volunteer force, we recruit the individual but we reenlist the family.
    While that has always been true, it has never been more true than
    today.
    Equal Opportunity
        One of the U.S. military's great success stories is its ability to
    accomplish difficult missions under challenging circumstances with a
    force composed of men and women from many different ethnic, cultural,
    and religious backgrounds. Our Armed Forces today reflect American
    society, with its diverse experiences, goals, and expectations. Our
    task is to transform young enlistees into a cohesive, well-trained
    force, always cognizant of the right of our service members to be
    treated with dignity and respect. America's sons and daughters deserve
    the opportunity to succeed and work in an environment free of
    discrimination and sexual harassment. Throughout our military, equal
    opportunity and fair treatment are core values that reflect an
    enduring, bedrock commitment by military leaders at every level.
                   supporting the national security strategy
        Though the United States currently enjoys relative peace and
    security, the international security environment remains complex and
    dangerous. While the threat of global war has receded and former
    enemies now cooperate with us on many issues, very real threats to our
    citizens and interests remain. Though we currently face no peer
    competitor, openly hostile regional adversaries fielding potent forces
    have both the desire and the means to challenge the United States
    militarily. Additionally, in a number of cases, transnational movements
    threaten our interests, our values, and even our physical security here
    at home. And, while our military strength remains unmatched, state or
    non-state actors may attempt to circumvent our strengths and exploit
    our weaknesses using methods that differ significantly from our own.
    Attacks on our information systems, use of weapons of mass destruction,
    domestic and international terrorism, and even man-made environmental
    disasters are all examples of asymmetric threats that could be employed
    against us. Indeed, some already have.
        To deal successfully with these challenges, the National Security
    Strategy stresses the ``imperative of engagement.'' If the United
    States were to withdraw from international commitments, forsake its
    leadership responsibilities, or relinquish military superiority, the
    world would surely become more dangerous and the threats to U.S.
    interests would increase. Within their capabilities, therefore, our
    Armed Forces are committed to engagement as the best way of reducing
    the sources of conflict and preventing local crises from escalating.
        The National Security Strategy also recognizes that America's
    security is a function of all elements of national power. The Armed
    Forces play a central role, of course, by focusing on the principal
    objectives outlined in the National Military Strategy--to encourage
    peace and stability, and to defeat adversaries. To help ensure that all
    elements of American power are engaged, the military will continue
    working to improve interaction and coordination with the other
    government agencies that contribute to the common defense.
        Though peacetime engagement can reduce potential sources of
    conflict, the ability to fight and win our Nation's wars must remain
    the fundamental, overarching purpose of the military. The core military
    capability of deterring and, if necessary, defeating large-scale
    aggression in more than one theater, in nearly simultaneous time
    frames, defines the United States as a global power. The defense of
    American lives, territory and interests has been, and always will be,
    the principal mission of America's Armed Forces.
    Readiness
        Though military readiness has been challenged in many ways over the
    past year, our Armed Forces remain fundamentally capable of performing
    their assigned national security tasks. The combat operations conducted
    against Iraq in December and Operation Allied Force demonstrate that
    our first-to-fight units remain very capable of executing a demanding
    range of missions. As I told the Senate Armed Services Committee last
    September and again in January, we remain fully capable of executing
    our current strategy. As I highlighted in those hearings, however, the
    risks associated with the most demanding scenarios have increased.
    Under normal conditions, we assess the risk factors for fighting and
    winning the 1st Major Theater War as moderate and for the 2d MTW as
    high. Operation Allied Force should be considered a major theater war
    for air assets. While it has a significant impact on our forces, we
    retain the ability to respond to an MTW in another theater, albeit at a
    higher risk level.
        As I have explained in the past, this does not mean that we doubt
    our ability to prevail in either contingency. We are not the ``hollow''
    force of the 1970s, a force that I served in and know well.
    Nevertheless, increased risk translates into longer timelines and
    correspondingly higher casualties, and thus leads to our increasing
    concern.
        Prolonged deployments in Southwest Asia, the Balkans, the Sinai,
    and elsewhere have taken a toll in readiness. The effects are apparent
    both in the areas of personnel and, to varying degrees, materiel
    readiness. The latter is also the result of aging combat systems and
    the demands placed on them in the last ten years. And, as noted
    earlier, recruiting and retention efforts have been made tougher by a
    strong economy and a growing perception that military pay and benefits,
    including housing, medical care, and the retirement system, have eroded
    substantially. Reversing these trends will not be simple or easy;
    however, it is clear that the time has come to take decisive steps
    before the downturn in readiness becomes irreversible. In this regard,
    the substantial increases in readiness funding included in the
    President's fiscal year 2000 budget are a significant and important
    step forward.
    Readiness Reporting System Improvements
        In the previous 12 months the Joint Staff and the Services have
    continued to improve and refine our readiness reporting systems. Our
    objectives were to increase the level of detail, shift the focus to
    highlight key warfighting deficiencies, and reinforce the link to
    budgetary solutions. Inputs from the CINCs and Services have helped us
    better understand the specific shortfalls that underlie our risk
    assessments, particularly for the Major Theater War scenarios.
        Rather than providing readiness snapshots in the Joint Monthly
    Readiness Review (or JMRR), the Services now brief detailed trend
    indicators covering personnel, equipment, and training readiness. These
    indicators show us where we've been and will help us project future
    readiness trends based on current funding and OPTEMPO. As part of every
    JMRR, Services brief their top readiness concerns and corrective
    actions, while high priority deficiencies in the Unified Commands are
    briefed every quarter. The additional detail allows us to replace
    anecdotal reports with rigorous, fact-based assessments and to
    communicate to Congress our specific problems in areas like equipment
    availability, aviation mission capable rates, recruiting and retention,
    and aging infrastructure. I believe a review of our recent Quarterly
    Readiness Reports to Congress would reveal an unprecedented level of
    detail regarding CINC and Service readiness concerns.
        In addition to more accurate readiness assessments, we are also
    making fundamental improvements to the Global Status of Resources and
    Training System (GSORTS) to make it more timely, accurate, automated,
    and user-friendly. These improvements to the readiness reporting
    process will help keep us properly focused on identifying and fixing
    our most critical readiness concerns.
                               optempo/perstempo
        It is clear that the current pace of peacetime operations has a
    major impact on service members and their families. To alleviate the
    stress of ongoing deployments, we have implemented several initiatives
    to better manage the increased tempo brought on by a changed security
    environment and our strategy of global engagement. Through the Global
    Military Force Policy (GMFP), we are working hard to monitor and
    control the use of Low Density/High Demand assets to preclude their
    overuse. Further man-day reductions in the Joint Exercise Program are
    planned as well, and other approaches, such as increased use of Reserve
    Components, global sourcing, and more comprehensive use of contractors
    and allied support will also help.
        In the long term, high tempo rates can dangerously erode our
    readiness across the board. Consequently, we are looking closely at
    proposed deployments and carefully weighing the anticipated benefits
    against the expected costs. Too many unprogrammed deployments will
    inevitably disrupt operating budgets, sap morale, cause lost training
    opportunities, and accelerate wear and tear on equipment. Most
    importantly of all, uncontrolled OPTEMPO destroys quality of life and
    jeopardizes our ability to retain quality people.
        Each Service reports its OPTEMPO assessments as part of the JMRR
    and the Senior Readiness Oversight Council (SROC). The results are
    published in the Quarterly Readiness Report to Congress (QRRC). TEMPO
    indicators that exceed Service guidelines are then raised as issues in
    the Feedback JMRR. The Army's goal is no more than 120 days away from
    home per unit per year. The Navy uses three criteria: no continuous
    deployment longer than six months; at least a two-to-one turn around
    time in homeport between deployments; and a goal of 50 percent of the
    time in homeport over a five-year period. The Marine Corps limits
    deployment away from home station to no more than 180 days per year,
    averaged over three years. The Air Force goal is for individual airmen
    to spend no more than 120 days away from home base per year. The Air
    Force has also reduced the length of Southwest Asia (SWA) flying unit
    deployments from 90 to 45 days to better manage tempo.
        These guidelines reflect our recognition that high tempo places
    great strain on the force and that senior leaders must provide
    effective oversight and make timely decisions to better manage the pace
    of operations. Together with a well thought-out, disciplined approach
    to potential uses of force, the guidelines should help us manage
    OPTEMPO and PERSTEMPO to ensure the force remains combat ready and able
    to respond to any contingency around the world.
    Recruiting
        Both in terms of quantity and quality, fiscal year 1998 proved to
    be a very challenging recruiting year. Though recruit quality, defined
    as recruits with high school diplomas and top-half military entry test
    scores, declined slightly, all Services did meet quality goals.
    However, both the Navy and the Army fell short in achieving their
    quantity goals, with the Navy missing its goal by 6,892 recruits and
    the Army by 776. The Air Force met its quantity goal, but was forced to
    dig deep into its reserve of delayed entry applicants.
        A reduced propensity to enlist, coupled with a strong civilian
    economy and low unemployment, has reduced recruiter productivity and
    driven accession costs to an all-time high. Although expensive to
    recruit, high quality young people are essential to the health of the
    force because they are easier to train, perform better, and stay
    longer. For these reasons, the Services are committed to maintaining
    quality goals and are increasing recruiting budgets to improve their
    competitive position in the marketplace.
        Successful recruiting is the lifeblood of our all-volunteer force.
    With today's reduced forces and increased tempo of operations, the
    value of quality personnel is at a premium. To meet the demands of our
    National Security Strategy, we must provide the appropriate incentives
    and compensation to attract educated, motivated, and technically
    capable people into military service.
    Retention
        In addition to a tougher recruiting environment, the Services are
    also experiencing declining retention rates. The growing loss of pilots
    is troubling, not only because of its direct impact on combat
    effectiveness, but also because of the heavy investment we make in
    training them, the costs of replacing them, and the many years required
    to produce competent combat pilots. Mounting losses of junior NCOs who
    elect not to reenlist after their first term are also alarming. These
    skilled men and women represent the future of the Noncommissioned
    Officer Corps in every service; they are the backbone of our military.
        In many critical skill areas, such as those associated with high-
    technology systems, retention levels are below sustainment levels. The
    Navy and the Air Force in particular are experiencing retention gaps
    with their first, second, and third term enlisted members. For example,
    Air Force second-term reenlistment rates have dropped 13 percent in the
    last five years. Similar declines are appearing in officer inventories
    as well, and the Navy currently has a 9 percent shortfall in junior
    Surface Warfare Officers. These trends, which are complicated by
    significant attrition among first termers who fail to complete their
    first enlistment, spotlight today's retention shortfalls--a crucial
    readiness issue that has captured the attention of senior leadership
    within the Services and Department of Defense.
        Because of the quality of the people we recruit and the significant
    training they receive, the private sector is anxious to outbid us for
    their services. The Services have increased Selective Reenlistment
    Bonus offers to persuade these experienced and talented members to stay
    with us, and in some cases this approach has met with success. However,
    this compensation adjustment is most effective only for short-term
    retention gains. In several important critical skill areas, bonus
    dollars have not stemmed the losses. For instance, the Navy has
    steadily increased bonus levels for their electronics technicians over
    the past three years, essentially doubling the offer, but first-term
    retention continues to decline rapidly. In spite of nearly doubling the
    value of Aviation Continuation Pay bonuses, the bonus ``take rate'' of
    Air Force pilots is down 50 percent since 1995 and pilot shortages are
    expected to reach 2,000 by fiscal year 2001.
        The stable and predictable lifestyle of the private sector also
    presents an attractive alternative to military service because of the
    increasing demands we are placing on a much smaller force. Long duty
    hours, frequent moves, extended family separations, and disruptions in
    a spouse's employment are just a few of the burdens currently being
    borne by our service members. The decreased value of retirement
    benefits and lagging pay are being interpreted by many as a lack of
    appreciation for their commitment and sacrifices. Improved military
    compensation is the most direct and effective solution to a growing
    retention problem that cannot be ignored.
    Recapitalization/Maintenance/Spares
        Another factor affecting readiness is the growing cost of
    maintaining our inventory of aging weapons systems. The stressful pace
    of operations in this decade has meant higher than anticipated wear on
    our equipment and systems, many of which were fielded in the 1970s and
    1980s. High OPTEMPO, in addition to causing increased wear-and-tear on
    aging systems, has also forced commanders to tap maintenance and
    training accounts to help fund operational deployments. Significant
    increases in the cost of repair parts have compounded the problem,
    leading to shortages and maintenance backlogs.
        In this regard, the timely approval of the fiscal year 1999
    emergency readiness supplemental for maintenance and spare parts proved
    a great help. The fiscal year 2000 budget builds on fiscal year 1999
    efforts, and is a product of our determination to ensure the right
    level of funding for spares and maintenance. However, as our equipment
    continues to age, it will be increasingly difficult to keep our
    equipment combat ready at current funding levels. Adequate funding for
    spares and maintenance, as proposed in the President's budget, is
    urgently needed to help us reduce the migration of funds from
    modernization accounts--a trend that has cut deeply into our
    modernization efforts in recent years.
    AC/RC Integration
        In coping with an increasingly demanding security environment, the
    role of our Reserve Components has grown markedly as the active force
    has drawn down. In virtually every significant deployment of military
    forces, our Reserve and National Guard personnel have played key roles.
    Often the capabilities they provide are found predominantly in the
    Reserve Components (RC).
        In virtually every domestic and overseas mission, from disaster
    relief in the continental U.S. to humanitarian assistance in Central
    America to peacekeeping operations in Bosnia, our reservists and
    guardsmen have performed magnificently in important and in some cases
    indispensable roles. The wide range of potential contributions by the
    RC has proven to be a bright spot as we strive to match available
    resources to a demanding mission load, and demonstrates clearly the
    enduring value and relevance of the citizen-soldier. This experience is
    also helping to inform the Reserve Component Employment 2005 Study,
    which began in 1998 and is reviewing the employment of the RC as a
    vital part of the Total Force. Of note as well, the addition this past
    year of two RC Major Generals as Assistants to the Chairman, one from
    the Army National Guard and one from the Air Force Reserve, has greatly
    assisted in our efforts to integrate RC forces more effectively into
    the Total Force.
        One area that holds considerable promise for RC involvement is
    Information Operations. By exploiting the technical skills that many
    reservists use on a daily basis in their civilian jobs, the military
    can take advantage of industry's latest techniques for protecting
    information systems. Similarly, defending our homeland from terrorism
    and responding to chemical attack are natural roles for our Guard and
    Reserve forces. Their knowledge of their communities as business
    people, city managers, facility operators, and local law enforcement
    officers, makes them the ideal first response force. In these and many
    other areas, we will continue to look for innovative ways to capitalize
    upon the strengths of our Reserve Components, our trump card for
    maintaining high readiness levels in these challenging times.
    Force Protection
        Wherever our forces are deployed, force protection is the top
    priority for commanders. The tragic bombings of our embassies in Dar Es
    Salaam, Tanzania and Nairobi, Kenya reminded us that terrorists can
    strike anywhere, at any time. During my testimony last year, I noted
    that our adversaries, unable to confront or compete with the United
    States militarily, spend millions of dollars each year to finance
    terrorist organizations that target U.S. citizens, property and
    interests. Consequently, our Combatant Commanders and the Services
    continue to focus on force protection issues as a first order priority.
        Over the past year the Joint Staff conducted a comprehensive
    Mission Area Analysis to review the CINCs' and Services' Anti-Terrorism
    programs. We have also commissioned a study to examine how our program
    ``stacks up'' against some of our allies' best efforts to combat
    terrorism at the strategic and operational levels. Results from this
    study will be used to reevaluate our strategy and improve our
    techniques.
        We continue to conduct Joint Staff Integrated Vulnerability
    Assessments (100 this past year) worldwide in order to help the CINCs
    and Service Chiefs enhance their force protection posture. Lessons
    learned from these assessments are used to improve readiness and
    physical protection worldwide, providing commanders a benchmark from
    which to evaluate and reinforce their efforts to eliminate
    vulnerabilities and keep our people safe. Advanced technology also
    plays a key role in the fight against terrorism. Our intent is to
    develop the most advanced, reliable, and effective equipment and to
    field it when and where it's needed, using the Chairman's Combating
    Terrorism Readiness Initiative Fund in addition to resources allocated
    by the formal budget process.
        Our best efforts notwithstanding, we know that terrorism will
    remain a serious threat as we move into the 21st century. More than a
    ``war,'' international terrorism is a part of the strategic environment
    that will not fade away. Our enemies will continue to test our resolve,
    both at home and abroad. To protect our forces, our citizens and our
    facilities, we must continue to move forward with renewed emphasis and
    awareness. While we cannot prevent every attack, we can lower both the
    threat and the consequences of terrorist incidents.
    Arms Control
        In a very real sense, one of the best ways to protect our troops
    and our interests is to promote arms control in its many different
    forms. In both the conventional and nuclear realms, arms control can
    reduce the chances of conflict, lower tensions, generate cost savings,
    and encourage peaceful solutions to international and intra-state
    disputes.
        In the conventional area, we remain committed to providing world
    leadership to end the use of anti-personnel landmines (APLs), while
    ensuring our ability to meet our international obligations and provide
    for the safety and security of our armed forces. The President has
    directed DOD to end the use of APLs outside Korea by 2003, to
    aggressively pursue and develop alternatives to APLs in Korea by 2006,
    and to search for alternatives to our mixed anti-tank systems that
    contain anti-personnel submunitions. Furthermore, the President
    announced that we will sign the Ottawa convention by 2006, if we
    succeed in identifying and fielding suitable alternatives to our APLs
    and mixed anti-tank systems by then.
        Perhaps our greatest contribution to this worldwide problem is in
    the field of demining. Today, the U.S. leads the international demining
    effort, providing more funding, trainers, and other resources than any
    other nation. DOD has trained over one-quarter of the world's deminers
    to date and has demining programs in place in 21 countries.
        The Strategic Arms Reduction Treaty (START) process continues to
    evolve, with START I implementation proceeding even as we continue to
    push for final ratification of START II. Currently, all parties have
    exceeded START I Phase I (December 1997) reduction requirements and are
    already approaching Phase II (December 1999) limits. As for START II,
    although we have worked hard to address Russian concerns through the
    NATO Founding Act, the New York Protocols to the START II Treaty, and
    other initiatives, the prospects for ratification by the Duma remain
    uncertain. It remains our position that the Duma must ratify START II
    before formal negotiations can begin on START III.
        Our efforts to lower the numbers of strategic nuclear weapons
    coincide with efforts to control testing of nuclear weapons. In the
    1999 State of the Union Address, the President asked the Senate to
    approve the Comprehensive Test Ban Treaty, now, to make it harder for
    other nations to develop nuclear arms. To date, 152 nations have signed
    the treaty and 27 have ratified it. The Joint Chiefs of Staff support
    the ratification of this treaty, with the safeguards package that
    establishes the conditions under which the United States would adhere
    to the treaty.
    Global Hot Spots
        Around the world, our military supports our strategy of engagement
    and is ready to respond to threats anywhere in the world. However,
    three specific areas occupy center stage: the Korean peninsula, the
    Balkans, and Southwest Asia. These areas pose the greatest potential
    threats to stability and consume more energy and resources than any
    others.
                Korea
        The divided Korean peninsula remains a potential flashpoint, with
    recent developments complicating an already tense security situation.
    North Korea represents one of the few major military powers capable of
    launching a major conventional attack on U.S. forces with minimal
    warning. Despite its collapsed economy and struggle to feed its own
    population, the North Korean government continues to pour resources
    into its military and to pursue a policy of confrontation with South
    Korea and its neighbors in the region.
        More than one million North Korean soldiers serve on active duty,
    the vast majority deployed within hours of the DMZ and South Korea's
    capital city, Seoul. Infiltration by North Korean special forces
    continues to exacerbate tensions between the two governments, and the
    launch of a previously unknown long-range variant of the Taepo Dong One
    ballistic missile represents a significant improvement in the North's
    capability to threaten the region and beyond. Finally, North Korea's
    repeated threats to walk away from the Agreed Framework that curtailed
    their nuclear production program have been unsettling to the
    international community.
        The North Korean threat remains one that we must--and do--take very
    seriously. We have pursued a number of initiatives in recent years to
    enhance the capabilities of both our forces forward-deployed on the
    peninsula and our reinforcing elements, as well as the forces of our
    South Korean Allies. We now have better U.S. tanks, better infantry
    fighting vehicles and better artillery, as well as improved attack
    helicopters and aircraft, on hand in Korea. We have also deployed
    Patriot missile defense systems and improved surveillance capabilities,
    and assisted with a number of upgrades to South Korean forces. Our
    naval forces have greatly stepped up their anti-SOF activities, while
    forward-deployed marine units stand ready to reinforce the peninsula on
    short notice. We have upgraded our prepositioned stocks as well,
    substantially improving our ability to reinforce the peninsula with
    ground troops from the continental United States.
        These actions have significantly improved our defensive posture.
    Still, the threat remains, and North Korea's substantial chemical and
    biological weapons capability, coupled with its continued pursuit of
    ballistic missile technology, will demand our attention for the
    foreseeable future.
                Southwest Asia
        Our recent military operations in Southwest Asia underscore how
    both our longterm interests and the prospect of continuing regional
    instability combine to keep the area a major source of concern. The
    ongoing disputes with Saddam Hussein and the military threat Iraq poses
    to its neighbors require a substantial, capable, and ready military
    force in the Persian Gulf region, as well as powerful reinforcing units
    in the U.S. prepared to move quickly should conditions require rapid
    deployment of additional assets.
        As we showed in December, we are ready to act swiftly, in concert
    with our coalition partners or alone if necessary, to protect U.S.
    interests and those of our friends and allies. Forces in the region
    include powerful land-based bomber and fighter forces, an aircraft
    carrier battle group with a significant number of cruise missiles, and
    strong ground forces that can be reinforced within days. In recent
    years we have built up our pre-positioned stocks of weapons and
    supplies, considerably improved our strategic lift, and developed a
    crisis response force in the United States that can deploy to the Gulf
    region on very short notice. The development of this force is one
    example of our efforts to reduce the number of soldiers, sailors,
    airmen, and marines deployed overseas on contingency operations, while
    still maintaining sufficient capability to meet our security needs
    around the world.
                Balkans
        The world's attention is focused on the ongoing crisis in Kosovo.
    After the collapse of the Rambouillet talks, and in the face of
    continued Serb intransigence and ethnic cleansing directed at civilian
    Kosovar Albanians, NATO had no choice but to commence military
    operations against Serb forces. Operation Allied Force is designed to
    systematically disrupt and degrade the capability of the Yugoslav
    military and security forces to continue their campaign in Kosovo. Our
    objective is being achieved despite considerable challenges, including
    bad weather, rugged terrain, a robust air defense system, and the
    efforts by the Serbian forces to disperse and camouflage their
    equipment to avoid detection and destruction.
        We began our air operation by degrading the multi-layered,
    integrated air defense network in Yugoslavia, an essential first step
    in reducing the risk to pilots and aircrews in subsequent missions. We
    have also effectively disrupted command, control, and communications
    links, attacked and destroyed POL facilities, and severed lines of
    communication. The fielded forces are facing increasing fuel and supply
    difficulties and are now facing the brunt of our air attacks. The air
    campaign is working and NATO resolve remains strong.
        Thanks to thorough planning and superb execution, U.S. forces have
    suffered few casualties and have lost a minimum of aircraft, despite
    flying thousands of sorties. However, the risk of additional casualties
    remains a very real possibility. There is no such thing as a ``risk
    free'' military operation. In addition to minimizing the risk to Allied
    aircrews, NATO has exercised extraordinary care to avoid civilian
    collateral damage from these air operations, but we cannot eliminate
    the risk in this area either.
        The U.S. Armed Forces are fully involved in relieving the human
    suffering caused by the Yugoslav army and security forces. A
    humanitarian air bridge has been established to bring badly needed
    relief supplies to the Balkans. Military aircraft and military-
    chartered commercial aircraft have brought in food, water, tents,
    blankets, and medical supplies. Construction has begun on a 20,000-
    person refugee camp in Albania, and plans for a second camp are
    underway. In addition, the military is supporting other government
    agencies in accepting refugees into the United States.
        Other areas of the Balkans continue to be of intense U.S. interest
    and involvement as well. Most prominently, in Bosnia-Herzegovina, we
    are reducing the number of U.S. servicemen and women deployed in
    support of the NATO multi-national Stabilization Force, or SFOR, to
    6,200, down from 18,000 in 1996. U.S. troops are performing
    magnificently in Bosnia, providing a secure environment so that
    political and economic activities can go forward smoothly. No
    fatalities occurred in fiscal year 1998 and the health and morale of
    our forces there remains excellent.
        SFOR operations in Bosnia over the past year have contributed to a
    number of successes. The recent elections were characterized by high
    voter turnout and an absence of violence--real achievements given the
    recent history of that troubled region. Since 1996 more than 200,000
    weapons have been destroyed, heavy weapons have been put into
    cantonment areas, and military parity has been established between the
    former warring factions. The recent activation of a Multinational
    Specialized Unit, composed of police organizations from several
    countries, has enhanced SFOR's ability to provide public security.
    These steps, and SFOR's success in sustaining a secure environment for
    the further implementation of civil tasks, have done much to reduce the
    chances of future conflict.
        The outstanding performance of U.S. and other NATO military units
    has enabled SFOR to fulfill the military tasks spelled out in the
    Dayton Accords. Nevertheless, success in achieving the civil,
    political, and economic tasks identified at Dayton has been slower in
    coming. The focus now must be on pressing forward with those tasks as
    we plan to reduce and eventually withdraw our ground forces from
    Bosnia.
    Funding for Contingency Operations
        Last year our Armed Forces benefited greatly from the prompt
    approval of the emergency supplemental for Bosnia and Southwest Asia,
    totaling $1.9 billion and $850 million respectively. This strong
    support has enabled us to execute these missions without taxing our
    already-stressed readiness and modernization accounts. We are
    requesting that the same quick approval be given to the almost $5.5
    billion request for an emergency, non-offset supplemental for
    operations in Kosovo, as well as recent operations in Southwest Asia.
    If approved, this money will be applied directly to the field and fleet
    to replenish the funds borrowed from fourth quarter operations and
    training accounts.
        Without these funds, training needed to maintain combat readiness
    will have to be cancelled. The readiness of non-deployed units will
    slip, leaving them less ready to replace or reinforce our forward-
    deployed forces. The progress made in the aviation spares program could
    be undone and, in fact, the situation could be made even worse as a
    result of the increase in the operating tempo. In short, without the
    assistance from Congress in quickly funding the costs of these vital
    operations, we will pay a price in degraded readiness and quality of
    life and find ourselves with an aging inventory of systems and weapons.
                        building tomorrow's joint force
        Even as we focus on the present we must look to the future to
    ensure that tomorrow's force is just as ready, just as capable, and
    just as versatile as today's. Given finite resources, maintaining
    current readiness and funding modernization for the future will often
    conflict--but both are equally important. To ensure that tomorrow's
    Joint Force remains the world's best, we are moving forward to
    ``operationalize'' Joint Vision 2010--our conceptual framework for
    future joint operations--on a number of fronts.
    Joint Experimentation
        The principal mechanism for translating JV2010 into reality will be
    the Joint Experimentation process, a multi-year series of simulations,
    wargames, and exercises designed to rigorously test JV2010's key
    operational concepts. In 1998, the Secretary of Defense assigned USACOM
    the mission of serving as the controlling headquarters for joint
    warfighting experimentation. USACOM's Joint Experimentation Program
    incorporates lessons learned from Service experimentation and
    exercises, and includes a comprehensive schedule of joint exercises of
    increasing scope and complexity over the years ahead. Our intent is to
    focus on the seams that exist between Service core competencies,
    leading to an enhanced and continuous exchange of ideas and results.
    This approach will include Strategic Development Experiments focusing
    on capabilities we believe we'll need beyond 2010, and Operational
    Capability Experiments that deal specifically with desired operational
    capabilities needed before 2010.
        Ultimately, the Joint Experimentation process will influence
    everything about the Joint Force of 2010: systems, strategy, force
    structure, doctrine, training, recruiting, and professional military
    education. By examining our assumptions and refining our concepts in
    the crucible of Joint Experimentation, we can best achieve the full
    potential of JV2010--a Joint Force capable of defending the Nation
    against any conceivable threat or enemy.
    Unified Command Plan
        A major part of our modernization effort is our long-range vision
    of how to organize the Unified Commands for the future. As part of the
    current Unified Command Plan (UCP) review cycle, the Joint Staff worked
    with the CINCs and Services to study a wide range of options, including
    the recommendations of the National Defense Panel. I intend to include
    the results of this review, called UCP 21, as an annex to the 1999 UCP.
    It will lay out a flexible plan, with decision points based on the
    biennial UCP review cycle, to establish a Joint Forces Command, a Space
    and Information Command, and a joint command for homeland defense.
        The first step along the path for UCP 21 is the establishment of
    the Joint Forces Command in the 1999 UCP. This will help guide us to
    the next level of jointness by focusing more attention and resources on
    joint training, experimentation, interoperability, and doctrine. We
    will also establish a Joint Task Force for Civil Support to provide
    military support and planning for threats to the homeland from weapons
    of mass destruction. At the same time, the newly created Computer
    Network Defense Joint Task force will evolve into a Joint Task Force
    for Information Support designed to help protect our critical defense
    information systems, both at home and abroad. These three steps, taken
    in the 1999 UCP, will lay out a flexible, evolutionary path to the
    future designed to improve jointness and protect our national interests
    against evolving threats well into the next century.
    National Missile Defense
        An important element to be considered in providing for the defense
    of America is National Missile Defense (NMD), particularly in light of
    developing ballistic missile programs that could pose a threat to the
    United States. The NMD program objective is to develop and provide the
    option to deploy a system that will defend the U.S. against a limited
    strategic ballistic missile attack by a rogue nation and to provide
    some capability against a small accidental or unauthorized launch from
    a nuclear-capable state. Our NMD program is structured to demonstrate a
    system-level capability that could permit a deployment decision as
    early as the Year 2000.
        This has been a very ambitious endeavor. Beyond the tremendous
    technological challenges associated with the development of an NMD
    system, we have also been striving to develop a system that could
    potentially be fielded sooner than is typically required for such an
    effort. The decision to deploy an NMD system will be based on several
    factors, the most important of which will be assessments of the threat
    and the current state of the technology. A threat is clearly emerging;
    however, the technology to ``hit a bullet with a bullet'' remains
    elusive. We will continue to press hard to develop an effective NMD
    system, very mindful that the growing threat is placing a deployment
    decision in clearer context.
    Defense Reform Initiatives
        A key component of defense modernization is the Revolution in
    Business Affairs. Over the last year, the Services have worked closely
    with OSD and the Defense Agencies to reengineer business practices,
    consolidate and streamline functions, outsource defense activities, and
    eliminate excess infrastructure. By bringing competition and proven
    business efficiencies to DOD, we can generate substantial savings in
    future years that can be applied to our modernization efforts. Each of
    the Military Departments has made significant progress over the past
    year, highlighted by success stories like the Army's supply and
    distribution Velocity Management initiative; the Air Force's utilities
    privatization and electronic commerce programs; and the Navy's reform
    initiatives in the areas of recruiting, retention, personnel training
    and assignment, commercial business practices and housing.
        The Service Chiefs and I strongly support the Secretary's Defense
    Reform Initiative as an essential complement to the Revolution in
    Military Affairs. Both will be vital to preparing our military for a
    challenging and demanding 21st Century. By combining the best business
    and management practices with leading edge technology and the world's
    best-trained force, we will continue to provide the American people
    with the number one military in the world.
    Modernizing the Force
        For most of this decade, current readiness funding has come at the
    expense of future modernization. During the early and mid-1990s,
    procurement accounts served as bill payers for short-term readiness,
    contingencies, and excess infrastructure. Consequently projected
    procurement funding necessary for modernizing the force repeatedly
    slipped further into the future with each succeeding budget year.
        Our goal is to meet programmed modernization targets by having a
    fiscally executable fiscal year 2000 budget and FYDP. Our current plans
    take us down that path. The previously programmed QDR adjustments to
    endstrength, force structure, and modernization initiatives, combined
    with planned business efficiencies, provided resources that were
    redistributed to both modernization and current readiness accounts to
    yield a more stable and sustainable Defense program. As a direct
    result, and in line with our QDR goals, procurement has increased from
    $49 billion in fiscal year 1999 to $53 billion in fiscal year 2000, an
    increase of nearly $23 billion for procurement over the FYDP to address
    our most critical modernization needs.
        However, despite these adjustments, significant risk still remains.
    This risk stems from unprogrammed contingency operations, aging
    equipment, and unrealized efficiencies that could make achieving our
    future QDR procurement goals difficult. As long as we remain at current
    funding levels, we will continue to face the readiness vs.
    modernization dilemma.
        The time has come to act on our long-range readiness problem--
    modernizing the force. We must act now to reverse the cycle of
    escalating maintenance costs prompted by aged and overworked systems.
    While the QDR gave us a roadmap to do so, our plan was contingent upon
    savings from two additional rounds of base closures and greater
    efficiencies in DOD business practices. Without the additional BRAC
    rounds, the only real answer to achieving our programmed modernization
    targets is to adjust the budget top-line upwards.
        The U.S. is the dominant military power in the world today. Our
    armed forces are fundamentally sound and capable of fulfilling their
    role in executing our national security strategy. However, the
    combination of multiple, competing missions, recruiting and retention
    shortfalls, aging equipment, and fixed defense budgets has frayed the
    force. The warning signals cannot and should not be ignored. With the
    support of this Committee and the Congress as a whole, we can apply the
    right kind of corrective action now and avoid a downward spiral that
    could take years to overcome. As we look to the future, we should move
    forward with a clear understanding of what must be done and with
    confidence in America's sons and daughters in uniform. They represent
    the heart and soul of our Armed Forces, and it is our responsibility to
    ensure they remain part of a military worthy of their sacrifice and
    commitment.

                funding peculiarities in fiscal year 2000 Budget

        Senator Stevens. Thank you very much.
        On this 2000 budget, I discussed with Deputy Secretary
    Hamre last week some of the problems. For instance, Mr.
    Secretary, there is a $1.65 billion unspecified rescission in
    this proposal, and there is also a proposal to fund military
    construction on an incremental basis.
        We have a series of technical assumptions by the OMB that
    were rejected by the Congressional Budget Office (CBO). We are
    hard-pressed to try to understand some of the shortfalls and
    there is no other better word for it but gimmicks in this
    budget.
        What do you suggest we take out for the $1.65 billion?
        Secretary Cohen. Mr. Chairman, there were several items
    that you touched upon. Number one, the rescissions. Those were
    to be negotiated with the members of Congress because they were
    items that are of concern to individual members. That was not
    something that I would propose to do unilaterally.
        Senator Stevens. Well, we do not even have a list of them.
        Secretary Cohen. Well, we can sit down and do that at any
    time with you, Mr. Chairman. I thought that there was a process
    under way whereby we could in fact reach some kind of an accord
    on that.
        But let me just address the other issue. This $3.1 billion,
    you are right, on the military construction is what we call
    split funding, which is not a happy occasion for me to come
    before you to ask for that. As a general rule, I do not support
    it as a policy and, frankly, the reason we had to come up with
    the $1.6 billion and $3.1 billion in those two categories was
    to try to get the funding up as close to $12 billion as we
    could and still stay within the caps.
        Now the program that we have submitted is executable. Is it
    necessarily desirable? That is something that I am sure that
    you and other members may take issue with. But we believe that
    we could in fact execute the military construction budget for
    this one year, allocating just the funds necessary for the
    construction for the year 2000 and paying the balance in 2001.
    But it was a way for me to have to get under the budget caps.
        That is the very direct reason why we did that. So if you
    do not agree with the split funding or the incremental funding,
    and if you do not agree that we have to have rescissions, then
    there will be the shortfall that you have indicated. So it will
    have to be paid for in some other fashion. That was the best
    fashion I could come up with, given the restrictions that are
    in the budget.
        Senator Stevens. Well, I think if we asked the committee we
    would have 29 different suggestions as to how to deal with the
    $1.65 billion, and I think, in all fairness, if you want us to
    rescind something, you ought to tell us what we should rescind.
        Secretary Cohen. I will be happy, as soon as this meeting
    is over, to sit down with you and other members and come up
    with a list of rescissions.
        Senator Stevens. By the way, gentlemen, we are running a 7-
    minute clock so we will try to keep it going.

                           Missile defense deployment

        We provided for this fiscal year $1 billion as a special
    add on to accelerate the missile defense programs, and we have
    been working with General Lyles to try to ensure that those
    funds are applied only to accelerate or enhance the integration
    of the systems and the testing.
        Do you think that we are still on track to maintain the
    course so we will get a deployment decision in June 2000?
        Secretary Cohen. I do, Mr. Chairman. I think that a
    decision has to be made at that time, and that is the pledge
    that I made and it is part of the budget submission in terms of
    the funds that we put in to allow for the President to be in a
    position to make that determination by June of next year.
        Senator Stevens. Mr. Chairman, do you support the concept
    that this national missile defense system should defend all 50
    States?
        General Shelton. I do, Mr. Chairman.

                           bombing of Chinese Embassy

        Senator Stevens. Thank you. Let me tell you, you are both
    good friends. I was out of town when I saw the television
    reports on the terrible mistake that was made in Belgrade in
    striking the Chinese embassy.
        As you know, I served in China in World War II, and I have
    tried to maintain a strong relationship with those people since
    we had the opening following President Nixon's visit there, and
    I think this committee has done everything we can to try and
    enhance that relationship. I think the ordinary people have
    been basically desirous of expanding their relationship to us.
        This terrible accident has now put that into a very tenuous
    position. I hope that there is some way we can find an avenue
    to explain to them just our national regret about this
    incident. But one of the problems that bothered me was that,
    with this elaborate target selection mechanism we have, working
    through NATO, is the fact that such an accident could happen.
        We are here to provide money. Is there any problem there
    that could be solved by money as far as this target review?
    Where is the gap in the intelligence that led to this problem?
        Secretary Cohen. Mr. Chairman, I heard yesterday that
    someone said that it was a resource-based problem. I do not
    believe that. I think it was an institutional failure. When you
    look at the series, almost concatenation of events that led to
    the mistaken identify of the Chinese embassy, I do not think
    you could associate that with inadequate resources.
        They may feel that way in some segments of our defense
    intelligence community, but I think that there are adequate
    resources in order to have dealt with this. We made a number of
    recommended changes--things that are fairly elemental but
    apparently are not in operation today--and I laid those out
    yesterday during the course of a press conference in terms of
    making sure that we take every measure necessary to keep maps
    updated, to keep the data base which these maps really rely
    upon current.
        You could point to a whole series of events. There are
    people who have been to the new Chinese embassy in Belgrade.
    That is why it is very difficult for some to understand how it
    is possible. You had high-level officials who have visited the
    new Chinese embassy, but they have not placed a call out to the
    agency or to the Department saying, by the way, we are at the
    new embassy.
        You have various military personnel who have been there in
    the past. Again, it was not factored into the accumulation of
    the data base. So there are a whole series of omissions that we
    can now go back in retrospect and say can we do things
    differently to try to make sure that we do our level best to
    prevent this from happening in the future. And we will.
        But I must tell you, as the Chairman has said, that we are
    probably going to make mistakes again in the future. I was
    listening as Senator Bond, who is no longer here, indicated
    everything has gone all wrong.
        Let me just point out we have had 18,000 sorties. We have
    had 4,000 attack sorties. We have had 380 separate targets. We
    have had over 10,000 munitions that have been dropped. And out
    of all of that roughly a dozen have involved unintended
    consequences. So we made a mistake here. It was a big mistake
    in terms of a case of mistaken identity.
        We did in fact target that building, thinking it to be a
    federal procurement building as such and one that should have
    been on a target list. It happened to be several blocks down
    the street, the real building that should have been hit. And we
    regret that deeply. But we will do our best to correct that in
    the future and institute some changes as far as how the target
    list is put together and the level of supervision it must go
    through.
        We think it is pretty extraordinary right now, but to the
    extent that this could happen it is unacceptable, and we will
    do our best to change that so it does not happen again in the
    future.
        Is there any guarantee? I do not think anyone could sit
    here and say we will never make a mistake in the future. We
    will do our best to eliminate those mistakes.
        Senator Stevens. I am constrained to say that almost 3,000
    tankers came into Valdez and one went aground, and we had a
    terrible, terrible, terrible incident that caused a total
    review of the whole vessel traffic control system. It required
    a lot of additional money to make sure that we have an
    information system that should, I hope to God, prevent that in
    the future.
        I hope that you are looking at the cost factor, and see if
    anyone cut costs in terms of the maintenance of this data and
    information base that is necessary for intelligence, because we
    would like to put that money back in if that has happened.
        Senator Inouye.
        Senator Inouye. Thank you very much.
        Before I proceed with my questions, Mr. Chairman, I would
    like to commend and thank the Secretary for his forthright and
    strong statement on the unfortunate, tragic bombing of the
    Chinese embassy.
        Having said that, Mr. Chairman, I find it strange, I find
    it most disconcerting that at a time when we are going out of
    our way to try to help the Chinese acquire information on
    satellite technology and communications technology, we are
    doing our best to assist them in becoming members of the World
    Trade Organization, that now they condemn us with inflammatory
    rhetoric. We have apologized. The President has apologized. The
    Secretary of State has apologized. Everyone has apologized. The
    flags at the embassy grounds are now at half-mast, honoring the
    Chinese dead.
        I cannot help but recall that when the news of the Chinese
    stealing of our nuclear secrets became public, we did not react
    by condemning the Chinese. We did not urge our citizens to
    throw rocks at the Chinese embassy here. Instead, we involved
    ourselves in a strange national masochistic practice. We blamed
    ourselves. No one knows who stole the secrets. He is almost
    forgotten. But we are pointing fingers at ourselves and
    condemning ourselves.
        I hope the Chinese do not misinterpret this, because enough
    is enough. We have been good and decent, I believe, and when
    the President's call is not responded to, that is an insult of
    the highest nature. So I am glad you made a strong statement.

                                Military manning

        If I may ask General Shelton, we have been getting reports
    that our carriers are going to the Kosovo battle area not fully
    manned. They are short of personnel. For example, we have been
    told that the U.S.S. Roosevelt is about 400 personnel short,
    and the same thing can be said about U.S.S. Kitty Hawk. Is that
    correct?
        General Shelton. Those figures are approximately correct,
    Senator Inouye. Most of the carriers that are deploying today
    do in fact deploy in a C-2 for personnel status, based on the
    fact that they have had--the Navy, as you know, has had a
    recruiting shortfall. Last year it was in the neighborhood of
    7,000. They are still struggling this year, but gaining some
    ground back now.
        But they are fully trained, ready to go when they arrive in
    the operational area, although they are short on manning. And,
    of course, that drives the personnel tempo of those who are
    aboard the ship, and the Chief of Naval Operations, Admiral
    Johnson, is very aware of this and has been working very hard
    to try to make up the shortfalls.
        Senator Inouye. Will the shortfall have any negative impact
    upon the men carrying out their missions?
        General Shelton. It will have an impact in terms of the
    numbers of hours that they work, but in terms of their training
    and their ability to carry out their mission, they have been
    doing a magnificent job showing that they are fully trained and
    ready for combat.
        Senator Inouye. The matter of readiness. We have been told,
    at least by the letters that I receive, that it is really not
    the pay raise or the retirement program that would finally
    determine whether a man stays on in uniform. It appears that
    many of the spouses and children are getting a little tired
    about their husbands and wives staying out on one mission after
    the other.
        We have a military force of 1.4 million, but we have called
    upon them to carry out missions, albeit unexpected, but
    nevertheless they are missions that they have to involve
    themselves in. Do we have too many missions for them?
        Secretary Cohen. Senator Inouye, we have a situation where
    we have a smaller force and we have more missions, and so we
    are in fact, as I indicated in my opening statement, we are
    wearing out systems, wearing out people.
        In addition, I would say that the pay raise and the
    retirement is of significance to many members who are now
    serving, but the quality of life--and I put quality of life in
    terms of being able to be home with one's family--is also of
    critical importance.
        The services have tried to manage that. General Shelton has
    talked about the need to relook how the current end strength is
    structured so that we can put more people into those high
    demand jobs where we have low density, fewer people. But it is
    a real challenge that we have to watch. We are either going to
    have to have fewer missions or more people, but we cannot
    continue the kind of pace that we have.
        And I see the yellow light is on, but let me just continue
    one moment. When it comes to morale, there are several factors
    involved. If you go over and visit--and I know you have; you
    have been with me--whether you go over to the gulf or you go
    over to Aviano or Ramstein or where our people are currently
    engaged in rather serious operations, you will find that they
    are most satisfied when they are doing that which they were
    trained to do.
        So you will find, notwithstanding the heat and the humidity
    in the Persian Gulf, where the temperatures climb at a combined
    level to 150 degrees during August and you have got 1,000
    sorties taking off a day, those sailors are happy to be doing
    what they are doing.
        The same thing is true in Ramstein. The humanitarian
    missions, all the C-17s carrying humanitarian relief missions
    to Kosovo, or the pilots who are carrying out these
    extraordinary air campaigns against Milosevic's forces, they
    are happiest when they are doing that which they are trained to
    do.
        But if we do it too long, if we do it at such a sustained
    rate, then the morale will drop off eventually and it will then
    reinforce what has been taking place, and that is we can do
    better on the outside. Life will be easier. I will be home
    weekends or evenings with my wife or husband, and I will have a
    better quality of life for my family. That is the real danger
    that we face, and we have got to find a way to either increase
    the size of our forces or decrease the number of our missions.
        Senator Inouye. We are at the edge, are we not?
        Secretary Cohen. I think we are at that edge, yes.
        Senator Inouye. Thank you very much.
        Senator Stevens. Senator Specter.
        Senator Specter. Thank you, Mr. Chairman.
        Secretary Cohen, yesterday the Clinton administration
    notified the Congress that it had approved the export of
    technology to China to permit the launching of a communications
    satellite, and this is pursuant to a requirement in last year's
    legislation for presidential certification.
        Last week the Senate Intelligence Committee, where you and
    I served together not too long ago, made a finding that the
    monitoring of the launching of American-made satellites aboard
    Chinese rockets had enhanced the accuracy of China's ballistic
    missile arsenal. And the President said, in his transmission
    yesterday, that there would not be a ``significant improvement
    in China's military capability in space.''
        There has been a lot of dispute about our export controls
    and the battle goes significantly between Commerce, which
    favors commercial enterprises, as opposed to State, which has
    been a restraining influence. But it seems to me that the
    Department of Defense is in the best position to really answer
    our national security concerns.
        A two-part question, intimately related. First, was the
    Department of Defense, were you consulted about this approval
    on the satellite launch? And, second, what is hidden between
    the language or within the lines of ``not significantly
    improving China's military capability?'' If there is any, it
    seems to me highly questionable that that approval ought to be
    given.

                         Satellite technology transfer

        Secretary Cohen. Senator Specter, both the State Department
    and the Defense Department are always consulted on any
    satellite transfer such as this and have an opportunity to
    object to it and carry those objections to the President. My
    understanding is that both the State Department and DOD
    approved the satellite transfer in this case.
        Senator Specter. Well, in the Department of Defense does it
    get to you, Mr. Secretary?
        Secretary Cohen. It gets to my Under Secretary level, and
    then is brought to me, my attention, but basically it is
    handled at a technical level and then I get to have a
    recommendation in terms of approval.
        Senator Specter. It seems to me, following up on what
    Senator Inouye eloquently said, that at a time when the Chinese
    are not taking the President's call that this is a particularly
    inopportune time. Do you think consideration ought to be given
    to at least delaying this transfer of technology?
        Secretary Cohen. I think we ought to try to cool down the
    passions that currently have been inflamed. I think that at
    this point the Chinese have indicated their sense of outrage at
    the bombing of their embassy. And I think now is the time now
    to try to, either for them to exploit it or for us in return to
    exploit a negative reaction against them.
        I think that if this satellite in fact will not
    substantially alter their capability that we ought to remain on
    good commercial terms with the Chinese. The timing happens to
    be unfortunate in the sense that I am sure that the approval
    was granted long before the attack on their embassy. So the
    timing may seem to be not propitious at this moment.
        But to the extent--I think there is a danger. Let me just
    take a moment. There is a danger that if we allow this
    situation to get out of hand--I would point to the Chinese
    government in particular--I would urge them to accept the
    President's statement, to accept his phone calls, to find ways
    to minimize the tensions now rather than exacerbating them,
    because this is precisely the kind of situation which can be
    then exploited by us, by saying if you are going to react in
    that fashion, if you are going to start burning American flags,
    if you are going to destroy our embassy, then perhaps we should
    not be proceeding apace with our commercial transactions.
        That in turn could produce other reaction from them, and
    you have a series of counter and other types of reactions going
    across the Pacific. I think that is not in our interest to do
    that.
        Senator Specter. Let me move on to another question because
    of limited time. I would comment on commercial transactions. I
    would frankly be a little restrained on that, but when they are
    military, I would be just a little more hesitant.

                         apprehension of War criminals

        Justice Arborough, Louise Arborough, the chief prosecutor
    in the War Crimes Tribunal, was in the Senate 10 days ago and
    met with a bipartisan group and made a very strenuous appeal to
    us for funding, and that is something that this committee is
    going to be taking up this afternoon. They have asked for $20
    million. So far we have appropriated a gross sum of about $153
    million, and I am hoping we can segregate that down.
        But she made a point that if we were to take into custody
    Karadjic, whom we have identified in the French quarter--there
    is an issue as to whether we are getting adequate cooperation
    from the French, and there are a number of other sealed
    indictments which could be made public. If a number of other
    ranking officials on war crimes in Bosnia were taken into
    custody, these arrests could have a very profound effect on
    people right under Milosevic in the chain of command.
        When the President met with a group of House Members and
    Senators recently, at a meeting you attended, he made a point
    of the War Crimes Tribunal being a collateral way to accomplish
    our objectives with Milosevic in addition to the military line.
        Sixteen of us wrote to the President on this last week. I
    would urge you to do what you can, or perhaps you have some
    suggestions, perhaps General Shelton does, as to how we might
    take Karadjic into custody. There has been an indictment
    outstanding against him for 4 years. My visits to the area have
    led me to hear the military people saying they could take him
    into custody if they had the order.
        But at a time when there is gathering of evidence, a large
    media disclosure this morning, gathering evidence about
    Milosevic as a war criminal, that, it seems to me, would be a
    very, very salutary move. How do we get that done?
        Secretary Cohen. Well, we have in fact intensified our
    efforts to arrest, apprehend war criminals and bring them to
    The Hague. You have seen, I think, a rather dramatic increase
    in the number of war criminals who have in fact been arrested
    and transported to The Hague in the past year and a half.
        With respect to Karadjic, he presents a more difficult
    challenge in terms of his location, what it would take to go in
    and get him, what kind of force would be necessary, and what
    the ramifications would be for our forces and for the security
    of stabilization forces (SFOR) itself.
        But what we have done is, whenever we have intelligence,
    whenever we can in fact put together the right circumstances
    where a war criminal can be identified, tracked and
    apprehended, we have been doing so. And we should pursue that
    with Karadjic as well.
        Senator Specter. Well, I would just hope you would
    intensify those efforts.
        Thank you very much, Mr. Secretary, General Shelton. Thank
    you, Mr. Chairman.
        Senator Stevens. Senator Dorgan.

                   added fiscal year 1999 Emergency spending

        Senator Dorgan. Mr. Chairman and General, thank you very
    much. Mr. Secretary, $7 billion has been added to the emergency
    supplemental on the House side. We will go to conference this
    afternoon with $7 billion of added spending on the House side,
    most all of that for defense needs.
        Those funds were not requested by the administration; is
    that correct?
        Secretary Cohen. That is correct.
        Senator Dorgan. Would it be your view that most of those
    funds are not emergency funds?
        Secretary Cohen. What we have indicated is that the funds
    we have requested will satisfy our replacement needs between
    now and the end of this fiscal year. No one is going to come
    before you and say we could not use more. We can always use
    more. But we believe that will meet our needs to carry out the
    air campaign.
        As I pointed out to the Chairman, there will be other costs
    that have not been budgeted for. We have not budgeted for a
    peacekeeping force, we have not budgeted for the return of our
    forces from the region. This will carry us through the air
    campaign to the end of September and that is it.
        Senator Dorgan. Well, $7 billion is an enormous amount of
    money, as you well imagine, and to classify it as an emergency
    coming to us from the House of Representatives, it
    substantially increases this bill. But I guess your answer is
    you have not requested these funds. These are added by the
    Congress.
        Secretary Cohen. That is right.

                       reduced procurement of D-5 missile

        Senator Dorgan. Let me just mention an area where I think
    you can save $2 billion, and I want to try to help you do that.
    That is with the procurement of D-5 missiles. You plan to equip
    only 12 of your Trident submarines from 2005 through the year
    2019, because you are going to have approximately 2 of them out
    of service, at any one time, being refueled and having their
    fuel cells reactivated.
        And yet in the year 2019 you will potentially have to load
    14 boats. You are going to have 12 submarines with D-5 missiles
    for some 15 years out there, and you are going to have a
    procurement plan for the D-5 missile that will build to such an
    inventory that you can add 2 additional submarines after the
    year 2019. But you can save $2 billion by reducing that
    procurement of the D-5, and if you want to have the additional
    missiles you can use the C-4 missile.
        I want to ask you to look at that, if you will, because we
    have done some work with the Navy on it, but it seems to me it
    makes sense to save the $2 billion and reduce the procurement
    schedule of the D-5 missile.
        Secretary Cohen. Well, if we have an invigorated arms
    control reduction process with the Russians that will help as
    well. They have yet to ratify START II. We have indicated as
    soon as they do we will try to go to START III levels, which
    would have a substantial reduction on both sides. So we would
    be able to save some money in that respect as well.
        Senator Dorgan. Well, that is true. And we will perhaps be
    able to save more money. But my point is, if for 15 years we
    have 12 Tridents out there, 12 boats, with a certain number of
    missiles and warheads, we do not have to produce to increase
    that number in the year 2019 and beyond. It seems to me you can
    save a couple billion dollars there.
        Let me say that I certainly support the comments by Senator
    Specter about prosecution of war crimes and so on. But I do
    want to ask one other question that deals with something
    Senator Bond indicated. You responded partially to it.

                        accomplishments of Air campaign

        He said everything has gone wrong, which kind of surprised
    me. The Chinese embassy bombing was a horrible mistake. I mean,
    I think all of us probably heard that news and shook our head
    and thought how on earth could this have happened. That was not
    just a dumb mistake but a horrible mistake, with tragic
    consequences for innocent civilians. But this country has
    profoundly apologized for it. I think all of us in this country
    deeply regret that happened.
        The Chinese reaction to it, however, is very troubling to
    me as well. There is something at work here that is very
    troubling, and I hope they will think through what they have
    been doing in recent days.
        But this issue of everything is wrong, this campaign now
    has gone on for some while. I have been in meetings with you at
    the White House and leadership meetings and various others. I
    have heard presentations by the General and by you, Mr.
    Secretary, about the air campaign. Give me a better description
    about where we are and what is happening. Some think everything
    has gone wrong, as you just heard this morning. Others,
    yourself, would make the case that this is the prosecution of
    an air war by NATO and the United States in which it is having
    an impact.
        So let me have you and the General describe that in the
    context of an assertion that everything has gone wrong.
        Secretary Cohen. Senator Dorgan, I would be happy to take
    the time. I was just handed a complete list of all that we have
    accomplished in terms of going after the army, the police, the
    air defense, the command, control, communications, his
    petroleum oils and lubricants (POL), his petroleum, his
    industry and his lines of communication.
        I will let the Chairman get into a bit more detail and we
    will give you a copy of this. I think it will lay it out pretty
    clearly. But I will just take a few moments.
        If you look at what has been accomplished in the 45-day
    period--again I have tried to place it in some balance--with
    the weather, geography, the redundancy of the air defense
    system this country has, if you look at the nature of the
    challenge, we have had only, let us say, a half dozen of
    unrestricted days where we have not had to pull our force, the
    air missions back.
        We have had day after day or night after night when various
    flights of combat aircraft have had to turn around and come
    back because they could not penetrate the weather. We have had
    5 or 6 really clear days out of that 45 days, so you place that
    in some perspective when we compare it to, let us say, Desert
    Storm.
        In Desert Storm, we bombed for 44 days in a climate that
    was clear, flat land, certainly there were heavy defense
    systems in Iraq as well. But it was a much different challenge
    for the pilots under those circumstances compared to the one
    that we have now.
        Again, not comparing. Comparisons are said to be odious,
    but nonetheless you have to look at what we had to accomplish
    in that mission plus what we had to accomplish in this one.
        And I would say that if you look at the Desert Storm I
    think we lost an average of one aircraft a day during that
    time, again many more missions being flown under a different
    environment. But we had more losses than we have had today. We
    have tried to minimize our losses, and frankly that has been
    the subject of some criticism. Why are you hanging up so high?
    Well, because they have some very sophisticated air defense
    systems, and we could lose a pilot a day or a plane a day if we
    were to simply go down lower and lower. They are waiting for
    that.
        I always felt that you do not fight on the enemy's terms;
    you fight on your terms. And you try to do that which will
    accomplish your goals. So what have we done? We have destroyed
    his entire oil refinery capacity. That is gone. 100 percent of
    it is eliminated.
        We have taken out about 60 percent of his ammunition
    production capability, maybe higher now. We have eliminated 9
    out of 14 of his Mig-29s that he had, his front-line aircraft.
    Those have been destroyed.
        In terms of his ammunition supplies, they have been
    degraded, I would say, 30 or 40 percent. I will get the exact
    figure for you.
        [The information follows:]

        As of May 11, [deleted] of the [deleted] ammunition storage
    facilities in Serbia (including Kosovo) had been targeted and
    [deleted] percent of their storage capacity had been destroyed.
    Strikes against Former Republic of Yugoslavia ammunition
    production plants had degraded their production by [deleted]
    percent.
        By the end of the air campaign, [deleted] percent of
    Serbia's ammunition storage capacity was destroyed. In
    addition, Serbia's ammunition, production, supply, and
    munitions armaments sustainability was degraded by [deleted]
    percent.

        Secretary Cohen. His air defense, the C\3\ communications,
    we have eliminated two presidential residences, the
    headquarters of the army, air force, air defense force,
    Socialist Party of Serbia, the national security services have
    all been either damaged or destroyed.
        This list is quite lengthy in terms of the damage that is
    being done--the bridges taken out, the lines of communication
    interrupted. And now, in the last week, we have been focusing
    on the forces in the field. We are now going after and killing
    individual tanks, artillery pieces, forces who are gathered in
    the field.
        So I would say, given the restrictions that we have had,
    given the enormous challenge that the geography, his dispersal
    of all of his forces in the woods, putting his tanks up against
    houses, all of the mechanisms he uses in order to defeat air
    power, we have had extraordinary success. But again I do not
    want to take the time to go through word by word. The Chairman
    may want to indicate this in a bit more detail.
        But let me once again point out that out of the 18,000
    sorties and 4,000 attack missions itself, 10,000 munitions that
    have been dropped, we have suffered only 3 or 4 losses. We have
    had two Apaches lost in training. We had the F-117 that was
    also lost. We have had an F-16, and we have had some damage
    done to an A-10.
        But out of all of these missions, if you look at the losses
    that we have suffered and the damage that we have done, and the
    fact that now he is even talking about, quote, a partial
    pullback, he is talking about a partial pullback because he
    feels, number one, he thinks he has achieved his goal. He has
    not. The Kosovo Liberation Army (KLA) is stronger today. They
    are getting more in numbers. They may be dispersed in the
    hills, but they are going to come back stronger and he is going
    to be much weaker.
        And that is the reason I believe he is starting to show
    some willingness to meet the demands that we have insisted
    upon. He is not there yet, but we are intensifying this
    campaign. We will operate this campaign on a 24-hour-a-day
    basis. We now will have sufficient aircraft to operate 24 hours
    a day, all over Serbia, day and night, and we are going to
    intensify this campaign and hit the rest of the targets that we
    have on our list.
        Senator Stevens. Senator Gregg.
        Senator Gregg. Thank you.
        Mr. Secretary, there are a number of places where we have
    significant strategic interests. Obviously one is Russia, and
    unfortunately I think Kosovo has undermined the credibility of
    the more reasonable people in Russia to some degree. And
    another is China, where we have huge strategic interests.
        And a lot is going on vis-a-vis China. And I wanted to talk
    to you about a couple of these items. First, it is fairly
    obvious that a very significant event of espionage has occurred
    relative to our nuclear capability and knowledge. Is that not
    true?
        Secretary Cohen. I think that is a fair statement, Senator.
        Senator Gregg. And I guess one of my questions to you is,
    there seems to have been within the administration, at least in
    the White House, an almost casualness about reviewing the issue
    of espionage that occurred at the labs. Certainly the time
    lapses that have been reported and the response to it that has
    been reported, and the briefings that we have received that
    have been intelligence briefings so they cannot be reviewed
    here reflect, to me anyway, a high degree of casualness, to be
    kind, relative to what is a severe breach of our national
    security.

                  When nuclear security breaches become known

        So I guess my question to us is, when did you learn about
    the labs being breached relative to, number one, the warheads
    and, number two, computer systems?
        Secretary Cohen. I learned about the breach in security in
    the spring of a year ago, the spring of 1998, I believe the
    first report that was surfaced. It may have been sooner than
    that, but the first time it surfaced I was made aware of it.
    The Deputy Secretary of Defense was made aware of it. And we
    brought it to the attention of others in the administration the
    same day.
        Senator Gregg. But the President's position is that he was
    not made aware of it until November.
        Secretary Cohen. Well, I think that there were activities,
    initiatives undertaken before that. As a matter of fact, I
    believe that Secretary Richardson has testified to this, but I
    believe that there were a number of things instituted before
    that.
        I will not go into it in open session, but I believe it
    would be important as you review this--and I know that you are
    on the Intelligence Committee--that you get a full briefing
    from the Federal Bureau of Investigation (FBI) as well, because
    I believe that a number of things were undertaken through
    Justice and the FBI that may perhaps not contribute to--the
    inability to discuss it in public may not contribute to the
    full understanding of what was taking place once these
    allegations surfaced about the activities of certain
    individuals.
        I believe the FBI was notified immediately and then
    undertook its own investigation. I think that would help a
    complete understanding of what the reaction of the
    administration was, what steps were taken, what was the role of
    the Bureau and others.
        Senator Gregg. When you say you communicated in the spring
    of 1998, are you saying you communicated it to the White House
    that you had become aware of these breaches of security?
        Secretary Cohen. Yes, indeed. The National Security
    Advisor, Secretary of State and I gather frequently. We
    discussed this issue, along with the Department of Energy.
        Senator Gregg. Now, looking at it from a defense
    standpoint, does the capability that was potentially removed
    from these facilities, does it represent a severe national
    security issue?
        Secretary Cohen. If the allegations in fact are true and
    proven to be so, I believe it will represent a serious breach
    of security, and it will in fact have allowed the Chinese, if
    they acquired this information, to have accelerated their
    nuclear program, yes.
        There is still some question in terms of what happened to
    the information, who had access to it. I am not in a position
    to verify it or even confirm it at this point, because it is
    still under investigation. But if in fact that information was
    transferred back to Chinese scientists and authorities, then it
    would certainly have allowed them to accelerate their nuclear
    weapons development program.
        Senator Gregg. Does that mean that the Chinese missile
    capability today could better target American defensive
    structure, if they had this type of information?
        Secretary Cohen. If they have this kind of capability, then
    certainly it would help them in their targeting, yes.

                         cost of Embassy reconstruction

        Senator Gregg. The embassies that have been attacked, the
    Chinese embassy, have we offered to rebuild that embassy?
        Secretary Cohen. No.
        Senator Gregg. Do you expect as part of this process that
    we will offer to pay for the cost of reconstruction?
        Secretary Cohen. I do not know what will be worked out, if
    anything, in terms of their embassy. This is something that I
    am sure the State Department and the White House will take
    under advisement, but there has been no request, nor have we
    made such an offer.
        Senator Gregg. Have the Chinese offered in any way to
    assist in paying the costs of rehabilitating the embassy that
    they are in the process of destroying in Beijing, our embassy?
        Secretary Cohen. Not our embassy and not the consulate, the
    home of the consulate that was destroyed.

                           Refugee resettlement costs

        Senator Gregg. On the refugees, do you have an estimate of
    how much it is going to cost us to move these refugees back
    into Kosovo, to resettle them, to rebuild their housing, to
    rebuild the electric infrastructure, the water infrastructure,
    and the commercial infrastructure?
        Secretary Cohen. I do not have an estimate on that. We have
    requested some $330 million in this request, the supplemental,
    to just handle the 20,000 refugees, and frankly I think the
    number is going to be more than that. It is going to be closer
    not to 20,000 but closer to 60,000.
        Senator Gregg. $300 million?
        Secretary Cohen. There is $330 million, I believe, in the
    budget that has been requested.
        Senator Gregg. Is it reasonable to presume that when we are
    dealing with a million refugees that the cost of returning them
    to Kosovo, rebuilding their housing, rebuilding the
    infrastructure--water, sewer, electricity--is going to be
    multiple billions of dollars?
        Secretary Cohen. I would think that that would be the case.
        Senator Gregg. Does the administration have a position yet
    on what portion of that cost the United States taxpayer will be
    asked to bear?
        Secretary Cohen. I do not believe the administration has a
    position on this yet. We have indicated that we would share
    with our NATO allies and western European nations, the European
    Union (EU) and others, to help develop a Balkan strategy as
    such to try to stabilize that region so we do not see a
    repetition of what Milosevic has done. But I do not think any
    figures have been attached to it.
        Senator Gregg. Thank you, Mr. Secretary.
        Senator Stevens. Senator Lautenberg.
        Senator Lautenberg. Thank you very much, Mr. Chairman.
        I want to start by responding to the Secretary and to
    General Shelton with a commendation for all of our people who
    are serving, because it is obvious that the task grows even as
    we pursue it. And our people deserve a commendation for the
    enormous and skillful effort they are putting forward.
        We have, as Secretary Cohen said, decided that lives of our
    servicepeople were worth something else, whether it was time or
    money. That is the choice that we made. If we want to change
    it, we have the right to change it, but there will be
    considerable debate.
        You know, this week was the 54th anniversary of the
    surrender of Germany in World War II, and three of us were
    there at the time--not in Germany but in uniform. There are
    still soldiers in Germany. There are still troops in South
    Korea. And when we talk about this--and I hear all the
    criticism about where we are going--we have to decide, ``Is
    there a peace worth achieving instead of spectatorship by this
    country and other civilized or advanced nations as people get
    murdered simply because of what they are--assaulted, raped?''
    That is a decision we make.
        And I do not know what the bill is, frankly, if we went
    back and said well, how much have we spent keeping our troops
    in Germany. How long are we now in the Persian Gulf? How long
    have we been and how much has it cost in Korea? So I think that
    that has to be accounted for even as we look at where we are
    going. And again our people in service have been fantastic.
        I just wonder whether or not a raise of and by itself, 4.4
    percent, does what we want to do, because there is a fairly
    generous retirement program that will go back into place, if I
    heard, 50 percent of base wages in 20 years. And are we
    challenging our retention by giving more at the end than in the
    beginning. I think that we have to take a look at how it is we
    pay people, because if we give them a little bit here and a
    juicy retirement program that is out of sync, I think, with the
    amount of money we are paying now, then it is an inducement to
    leave.
        And I wonder whether we can ever satisfy these multiple
    tasks that we acquire with an all-voluntary force, or whether
    some part of it has to be made up of people who have their
    educations paid for. This is not novel, but I do not think it
    is fully employed. But I suggest that we ought to be taking a
    look at that as we look at what our requirements are.

         military construction funding in fiscal year 1999 Supplemental

        Mr. Secretary, is the military construction proposal that
    is in the House supplemental something that you see as urgent
    and current?
        Secretary Cohen. We have indicated what we need is what we
    have requested as far as military construction. If you are
    talking about the supplemental or the 2000 budget----
        Senator Lautenberg. The supplemental.
        Secretary Cohen. We have indicated we need only what we
    have requested.

                   restrictions on use of Apache helicopters

        Senator Lautenberg. Are we restricted in resource from
    using the Apache helicopters as was planned as part of our
    military offensive there?
        Secretary Cohen. I am going to defer to the Chairman on
    this question, but just let me say preliminarily it is not
    resource-restricted. The Supreme Allied Command, Europe
    (SACEUR), General Clark, is putting the pilots and their crews
    through a very rigorous training regime because this is a very
    unusual type of deployment for the Apache, under circumstances
    which are highly challenging. And we have seen we have lost two
    already in the training mission, and he wants to be satisfied
    that he has the proper training and the proper deployment for
    them before he asks for the employment of them.
        But I think I will yield to the Chairman to give you a more
    professional judgment in terms of the use of the Apache. But it
    is not resource-constrained.
        General Shelton. Sir, I would underscore what the Secretary
    said. It really has nothing to do with resources. It is a
    matter of getting the training conducted, putting all of this
    relatively complicated operation, very similar to running any
    other type of air operation together, same types of resources
    required in terms of electronic warfare, support aircraft, et
    cetera, the suppression fire that has to be in place.
        And all this has to be rehearsed, and then you weigh the
    risks versus the gain and you make a decision as to when and
    where the proper time is, and the proper place to employ them,
    and that is what is ongoing at this time.

                    allied contributions to Kosovo campaign

        Senator Lautenberg. We have spent about $1.3 billion
    prosecuting this air campaign against Milosevic. What share
    have our allies produced in this campaign of ours?
        General Shelton. Sir, that is a difficult question to
    answer because, as you know, the United States contributes
    roughly 25 percent to NATO, but that is just the base operating
    costs, so to speak. The operation, the ongoing contingency
    operation, is paid by each nation. So to figure out how much
    theirs is costing versus ours, we do not have those figures at
    this time.
        Secretary Cohen. We can say, however, Senator Lautenberg,
    that the ratio is roughly 60/40 overall. While we have the
    majority, the overwhelming majority, of the aircraft, in terms
    of missions flown it is basically 60/40, but when you get into
    the attack missions I think it goes to about 70/30, the ratio.
        General Shelton. It is 56 percent for us and the remaining
    40-some percent for them on the attack alone.
        Senator Lautenberg. I close with a wish for the strength to
    follow our conviction and to do it not any less skillfully than
    we have done, despite the tragic error that took place. Thank
    you.
        Senator Stevens. Senator Domenici.
        Senator Domenici. Thank you, Mr. Chairman.
        Senator Inouye, I want to congratulate you on your
    statement, and, if you would permit me, rather than repeat
    anything on the issue, I would like to indicate that I
    wholeheartedly support your remarks.
        You could have added economic help to China. They have
    become our biggest trading partner in terms of the excess of
    imports versus exports. They are aware of that. Millions and
    millions of their people have a survival and economic
    opportunity now because they are trading with the United
    States. Thousands upon thousands of their students are being
    educated here.
        I believe it is obvious that they could not believe we are
    the country they are accusing us of being. It is just so
    obviously such an irrational conclusion that I think you were
    right today in bringing up the issue as you did.
        Having said that, Mr. Secretary, I want to praise you for
    your leadership, whether or not some of us support the
    undertaking, we support the men and women and we support you to
    give them what they need. And you too, General. I am positive
    we will come out of the supplemental, in spite of the delays,
    with the urgent part being the Kosovo military necessities, and
    we may, in our judgment, think you need more than you are
    asking for. I am quite sure we are not going to do things that
    you will want to veto a bill over, because we understand.
        It is very hard to calculate the real cost to our defense
    of that war, and if we err we are going to err on the side of
    more rather than less, because it is very hard.
        Now I want to talk about the 2000 budget, and herein I am
    not as laudatory of you and the administration as I am of your
    performance in the face of this war. I do not believe the caps
    were a good excuse to limit defense spending in the year 2000.
    We increased the dollar numbers for defense in our budget,
    because there is no cap for the year 2000, 2001, and 2002. The
    only cap is the combined expenditure for all discretionary
    spending. There is no cap just on defense.
        What we were willing to do was to reduce domestic spending
    more than you did, well below what you wanted, what the
    administration wanted, in order to beef up defense spending.
        Now, having said that, not only did you not do that in
    spite of your warnings to the administration that we really
    needed additional money, you put in at least three items that
    are not going to work in terms of making money available to our
    men and women in the armed forces. Three of them are not going
    to work because they are unreal.
        But the truth of the matter is you had a level that was too
    low, and then you added three items, that are not going to
    happen, to make it look bigger. First of all, your $1.6 billion
    rescission. You have a wonderful explanation and you are
    getting by with it here today because we all think you are
    great.
        But the truth of the matter is, you do not know what you
    are going to rescind.
        Second, $3.1 billion in military construction comes from
    funding a new approach to military construction, including
    housing. You simply failed to provide the money for the
    programs you asked us to support.
        $3.8 billion of it are economic adjustments. Maybe we
    should ask you to revise the adjustment you must make because
    gasoline prices have gone up. You took a low estimate and hoped
    it would continue. We have already had the price per barrel of
    oil go up 30 percent. I do not think the military is going to
    get the oil and gas and the other things at the price they
    estimated. That money is gone.
        So I am here to tell you it is going to be hard. But I
    think you are going to find on this side we are going to spend
    more money on defense than you recommended, and we are probably
    going to find it by spending less on domestic spending, and
    then we will have a big argument with the President about
    domestic spending.
        And one of our arguments will be defense came first, and
    the other is he could spend Social Security money for his
    budget; we do not intend to.

                      Department of Energy reorganization

        Now, having said that, I want to move on to another issue.
    If you want to answer that, I will let you in a minute. The
    Secretary of Energy made a proposal on the ``Imus Show'' this
    morning, where he is going to reorganize the Department of
    Energy so as to try to inhibit spying, which the Chinese have
    done a great job at. We ought to remind them that maybe they
    ought to reimburse us for our costs if they are wondering about
    relationships.
        He recommends a reorganization, and I just want to say
    publicly that I believe the Defense Department should look at
    that. They should be part of this reorganization, looking at
    it, because every Secretary of Energy since I have been here
    has recommended a new program for the Department of Energy as
    it pertains to better organization and management. And with all
    those changes, some of which we are in, we find ourself in an
    institutional mess.
        You know, people are going to blame individuals, but you
    will find when your people examine this carefully that the
    institutions that were set up to protect and preserve our
    security interests in nuclear weapons have failed us because
    they were created in such a way that they could not work. And
    it is very important that we fix it now as best we can.
        Are you involved or anyone in your Department involved with
    the Secretary of Energy in terms of this issue at this point?
        Secretary Cohen. Well, I did not hear the presentation on
    ``Imus'' this morning, but I will get a transcript of it and
    find out whether or not it is the same as he has been talking
    to other members of the Department--John Hamre has been very
    engaged in protecting our national security.
        Senator Domenici. I met with Dr. Hamre. He knows a lot
    about the problem and he is very aware of the laboratories and
    their pluses and minuses, most of which he concludes are very
    plus issues, very positive.

                            Spare parts and manning

        But let me move now to costs in your budget. I know that
    everyone is trying to tell us what issue is making the military
    men and women most upset about their tenure. You should know
    that Senator Stevens and I asked the General Accounting Office
    (GAO) to do an in-depth study. I am sure they are going to
    share it with you very soon, if they have not.
        The number one issue GAO found to affect retention is the
    issue of spare parts and manning--spare parts and manning. The
    military are telling us they do not like to serve in a military
    where they have to borrow parts from one airplane to fix
    another one. They do not like to be in a military when there
    are so many vacancies in manpower and the person that comes in
    to take the place is not properly qualified, or you leave it
    unmanned for substantial periods of time.
        Now these are important issues, because these issues money
    will fix, and it seems to me that we have to be absolutely
    careful that we put enough in the supplemental to take care of
    this and that in next year's budget we make sure we take care
    of spare parts, manning needs, and munitions shortages.

                      comparing Munitions and other stocks

        Now I am going to submit a series of questions, asking you
    to compare, in each of these areas, the situation today versus
    the situation a year ago. I think it is important for us to
    know what is the spare parts or the robbing of parts from one
    plane to another, what is the situation today versus a year
    ago? I might add to it 2 years ago, so we get some objective
    notion of what this is all about.
        We also want to ask about munitions storage. And I think we
    ought to compare it to the very best time you had versus now,
    because we understand we have got to be back up to the very
    best time in terms of munitions storages and availability of
    these kinds of things.
        So, Mr. Chairman, I will submit those questions and
    hopefully they will answer them to this committee, and that
    should give us some idea in the areas you have been so
    concerned about, which are not really readiness in the long
    term but readiness in the very short term, for the men and
    women who have to serve and do things day by day.
        Secretary Cohen. Senator Domenici, first, let me thank you
    for at least half of your statement, the first half. And the
    second part, I would point out in terms of comparisons on
    munitions, I think that comparisons are helpful, but we should
    not be dazzled by them, if you want to compare the stocks of
    certain types of older munitions with the stocks that we are
    building up now, where they are much more accurate and some
    much less costly.
        For example, we have the joint direct attack munition
    (JDAM), which we are now starting--we have started production.
    We are tripling the production rate of the JDAM to make sure
    that those go into the force. They are much less expensive than
    prior munitions that we have used, particularly the cruise
    missile. So the comparisons may be helpful in some aspects, but
    not necessarily in terms of cost-effectiveness and also
    military effectiveness.
        But I would be happy to do that.
        Senator Domenici. I will review the questions and I will
    try to have a comparison. How much did you use in this air war,
    how much your inventory is, and what you plan under your new
    budget. That might be a good way to compare it.
        Thank you.
        Senator Stevens. Thank you very much. Senator Cochran.
        Senator Cochran. Thank you, Mr. Chairman.
        Mr. Secretary, the Chairman asked about the ballistic
    missile defense funding requirements, and the intention to make
    a decision this next year to deploy a national missile defense
    system.

                      deployment date for Missile defenses

        My question is similar to his. We heard earlier from the
    Ballistic Missile Defense Organization that maintaining the
    option to deploy by the year 2003 would require more money than
    is being requested in this budget that is before the committee
    today, and up to $1 billion in additional funds each year until
    2003, if the decision is made to deploy in 2003.
        If that is a fair estimate of the funding needs, is it
    really an option that you could deploy by the year 2003, or
    have you not already made a decision, just not announced it,
    that the deployment is going to be delayed well beyond 2003?
        Secretary Cohen. Senator Cochran, I think I indicated when
    I submitted the budget that I would expect a decision on the
    deployment to be made next June, July, roughly that time frame.
    And then I had projected, in talking with General Lyles, that
    we would have a deployment actually by 2005.
        You may recall I did testify to that because I felt that we
    should have more tests to make sure that we had the right
    system before we started on a production line, that if more
    money would--if it were a question of more money producing the
    technology that would allow a deployment by 2003, I certainly
    would support that.
        But what I was told, based on listening to the BMDO,
    Ballistic Missile Defense Organization or Office, is that they
    believed a more responsible course of action was to make a
    decision by June of next year, July of next year, and then to
    allow for the actual deployment roughly 2005.
        So if more money would accelerate that to 2003, then that
    is something that I would certainly be open to. But I was
    planning on the 2005.

                    Antiballistic Missile Treaty constraints

        Senator Cochran. We had a hearing the other day looking at
    the constraints that Antiballistic Missile Treaty (ABM) and
    compliance with Treaty terms is imposing on ballistic missile
    defense development, not only national missile defense but
    theater and area missile defense and the like.
        Is this a matter of concern to you and, if it is, what
    recommendations are you suggesting to the President and others
    in the administration for getting with it and negotiating some
    changes in the Treaty so that those will not be impediments, or
    announcing that you are going to withdraw from the Treaty, or
    you are going to intentionally violate it, but stating the
    reason so you are not misleading the Russians.
        Secretary Cohen. I do not think there is any testing that
    has been inhibited by the ABM Treaty. I think that all the
    testing that is being done is not violating the ABM, is not
    being inhibited by the ABM at this point.
        The crunch will come next year. Now it is possible, it is
    conceivable that you could have a system located currently, let
    us say, in North Dakota that could cover 50 States. But if the
    technology proves to be insufficient to do that, then we have
    to explore a possibility such as Alaska, where they are now
    doing at least some land preparation or survey work.
        I believe this year should be used and is being used in
    dealing with the Russians, saying we may have to modify the ABM
    Treaty to allow for the deployment of a system that will
    protect all 50 of our States.
        And frankly that was one of the reasons why there was such
    a contention over the Cochran bill. It was felt that we needed
    this one year in order to deal with the Russians and talk to
    them and say we may have to make changes here, and we are
    telling you now that come next June a decision will have to be
    made.
        And so we are trying to convey that right now and to
    negotiate whatever changes might have to be made during the
    course of this time. We still expect that that can be done and
    will be done.
        Senator Cochran. It would be good to have for the record--
    you probably do not want to detail these at this point--to know
    what you think the specific changes are in the ABM Treaty that
    are required to accommodate the national missile defense
    architecture that is now being contemplated.
        [The information follows:]

        The Administration is currently working to assess the
    nature and scope of ABM Treaty modifications that may be
    required and which we would seek to negotiate. Specific changes
    will depend on decisions to be made about the NMD architecture
    that would be deployed. However, it is likely that we would
    need to address the Treaty's prohibition against a nationwide
    defense, and other examples of potential changes could relate
    to ABM deployment in Alaska, rather than or in addition to
    Grand Forks, and deployments location for ABM radars.

        Senator Cochran. Also, let me bring to your attention the
    fact that this week, or last week, a member of the staff of the
    National Security Council acknowledged that the administration
    was reexamining the requirements for the national missile
    defense system to see whether changes in the requirements could
    resolve some of the potential conflicts with terms of the ABM
    Treaty.
        My question of you is, do you think it is possible that the
    Department of Defense would approve changes in the requirements
    of the national missile defense (NMD) system so that conflicts
    with ABM Treaty provisions would be reduced?
        Secretary Cohen. I would think it would be the other way
    around. I think that the Treaty would have to be modified to
    conform to whatever is required to defend our country against a
    ballistic missile threat.

                           needed Procurement funding

        Senator Cochran. Let me ask you, on the question of
    procurement numbers that are in this budget, there was a
    Quadrennial Defense Review (QDR) goal of $60 billion for
    procurement. My understanding is that this budget submission
    falls short of the fiscal year 2000 intermediate goal of $54
    billion.
        We hear from a Congressional Budget Office (CBO) analyst
    that if we are really going to meet the goals we are going to
    have to spend about $90 billion a year to maintain procurement
    funding for today's force structure.
        Is that inconsistent with the analysis that you have made
    of your budget needs in view of the QDR goals that were already
    approved?
        Secretary Cohen. I would say $30 billion a year is a
    significant difference from our analysis, but I am happy to
    look at what CBO has said. We projected $60 billion based on
    the previous recommendations from the Chairman of the Joint
    Chiefs and others.
        I would indicate also that if you look at the projections
    under the QDR and under our budget proposal, it is going well
    above $60 billion and will climb much higher at the out-years.
    So we are on an upward climb.
        Senator Cochran. Thank you.
        Senator Stevens. Thank you very much. Senator Hutchison.
        Senator Hutchison. Thank you, Mr. Chairman.

          sufficiency of fiscal year 1999 Supplemental appropriations

        Mr. Secretary, we entered the current operation--I am
    talking now supplemental, because we are going into a
    conference this afternoon with the request from the
    administration on Kosovo and the House adds. And it seems to me
    that when we entered this operation there were already some
    significant readiness problems--certainly recruiting and
    retention, depot level maintenance, spare parts, mentioned by
    Senator Domenici, as well as munitions stocks.
        And I look at the adds that the House put on, and I see
    procurement for munitions, for rapid response, for contingent
    emergencies. That is about $1.08 billion. Spare parts, $1.4
    billion, depot maintenance, contingent emergency almost $1
    billion, and then the pay raises, increasing those at an
    earlier time to address our retention problems.
        You didn't ask for that, but would it not be prudent to at
    least add those that would be necessary to replenish other
    places in the world, to increase our retention or recruitment
    at this important time? You are not saying that you do not need
    those or that you are against those particular adds, are you?
        Secretary Cohen. What we have said is that in our request
    this will meet our immediate emergency needs. Those other
    issues we tried to address in the 2000 budget and beyond.
        I would indicate, for example, you mentioned other areas.
    We have the funding request in the supplemental to reimburse
    the costs expended during the operations against Iraq last
    November and December, so we put money to replenish those
    stocks as well.
        We have put roughly $850 million in terms of a wedge that
    deals with munitions and readiness issues combined. So we tried
    to build in some additional flexibility so in the event we do
    need more munitions we will have them through this emergency
    supplemental.
        But as far as the other items, we tried to budget for those
    in the fiscal year 2000 and the so-called 6-year future year
    defense plan (FYDP) budget.
        Senator Hutchison. Is there not a good effect or prudence
    about having the pay raise go in now rather than October 1?
        Secretary Cohen. Actually, I think the pay raise was
    scheduled to go in starting next January in terms of going to
    the 4.4 percent. I think in my dealings with all the men and
    women who are serving us--and I think the Chairman can talk
    more about this--as long as they understand that we are
    listening to their needs, that we are responding to what they
    see as deficiencies, as long as we send the signal that the pay
    raise is coming, the changes in retirement, the changes in pay
    table reform, they are satisfied that we are listening to what
    they need.
        Whether it comes in June or October or January, as long as
    they are satisfied that they are going to get it, I think that
    is the incentive they are looking for.
        Senator Hutchison. And you do not think, then, that any of
    the procurement for munitions, the spare parts, the depot
    maintenance would be prudent at this time?
        Secretary Cohen. Well, I think we are trying to deal with
    those issues in the normal appropriations process and deal only
    with the emergency issues on an emergency basis. Obviously
    there is room for disagreement on that, but we think that this
    meets our requirements, what we submitted.
        Senator Hutchison. Well, it seems to me that in earlier
    testimony we have been told that we are stretched too thin
    already, and we want to make sure that we are putting the
    amount in that not only would be used for Kosovo but would
    allow you to have an OPTEMPO that is escalated in other places.
        It just seems to me that it would be prudent to address
    that issue now if we are going to see something happen in
    another part of the world that thinks that perhaps we are
    stretched.
        Secretary Cohen. I think that is where the $850 million
    comes in in terms of readiness and munitions. That is the wedge
    that we have put in there on this emergency basis.
        But again I would indicate even though we have requested
    this as an emergency supplemental, it does not deal with a
    number of issues that we will have to contend with. The
    redeployment of the forces back to the United States once this
    is over, that is not included in the supplemental.
        We just did not know when that would take place, and so we
    have carried out the campaign as such to the end, to the end of
    this fiscal year on the emergency basis, and if we have to then
    come back in and say but now we have additional costs, we will
    have to come back to you during an amendment to the 2000
    budget.

                         risks of future Base closings

        Senator Hutchison. Let me ask you a question about the 2000
    budget, because I understand that you said before I got here
    that you are asking for another round of BRAC, actually two.
        I am concerned about that, especially in a time where we
    are seeing new things come up that had not been anticipated,
    like this more extended effort in the Balkans. And here are
    some things that I would like for you to bring to us before we
    would be asked to vote on another two rounds of BRAC.
        And that is you said earlier today that we may have to
    increase the size of our force structure or cut down on the
    number of missions. It seems to me that if we are looking at
    increasing the size of our force structure that that would have
    to be something that is anticipated for how many bases we would
    need or if we can close bases.
        As I travel around the world and talk to our troops out
    there, there are training limitations in many parts of the
    world. So if we are going to have the total capability to
    train, are we going to be able to do it in overseas bases to
    the extent that we need do, or should we be taking another look
    at some of our own bases?
        For instance, we closed and we now admit that we closed too
    many training bases for the Air Force, and you cannot reopen a
    base, at least not inexpensively. And so I would like to know
    if we have anticipated all of the training that we are going to
    need and if that is not going to be available overseas.
        It seems to me that we are looking at more military
    construction overseas while we are looking at closing bases at
    home. Is that going to be a long-term strategy for us, and is
    it going to allow us to train our people well enough?
        These are questions that I am not asking you to answer
    right now, but before I vote on closing more bases I want to
    know if we have ramped down our troop strength too much and if
    we are going to have to ramp back up, if we are doing more
    military construction overseas and closing bases at home, and
    is that going to be a training problem for us.
        So that is, I think, important for us to have when we are
    asked to vote on closing more bases.
        Thank you, Mr. Chairman.
        Senator Stevens. Thank you very much. Senator Durbin.
        Senator Durbin. Thank you, Mr. Chairman.
        Secretary Cohen and General Shelton, thank you for being
    here. I would like to say as part of the record first that I
    join in the comments made earlier by Senator Inouye concerning
    the tragic bombing of the Chinese embassy, and I certainly hope
    that the Chinese people understand that this was an accident
    for which we are deeply apologetic, and I hope that message is
    communicated.
        Second, I would like to commend both of you, because during
    the course of the last several months while we have been
    discussing and debating the development of our effort in the
    Balkans, you and your staff have been totally forthcoming in
    answering all questions posed.
        When the chairman of this committee took us on a delegation
    trip just a few weeks ago, I was impressed both with General
    Clark and virtually every person we met, who bent over
    backwards to give us all the information that we could possibly
    want.
        I might also add that you could not leave Ramstein Air
    Force Base or Aviano without a deep admiration for the men and
    women in uniform.
        I think you are conducting yourselves very well under
    trying circumstances. I do not believe that Congress has given
    you the sort of support which you deserve. I think we are all
    outspoken in our support of the men and women in uniform, but
    when it comes to the direction of our undertaking, I think you
    would have to conclude that the House's action was, at best,
    contradictory, and the Senate's action ambivalent.
        Though we supported by resolution the initiation of the air
    war, when it came to Senator McCain's resolution a week or so
    ago, we tabled it, leaving a lot of questions unanswered about
    our support. I will just say from my point of view that though
    I have misgivings about a ground war, I totally support your
    undertaking, and I think that those who joined with us in
    visiting these refugee camps understand what is at stake here.
        I think the American people understand what is at stake
    here. And I commend you for that effort.
        This afternoon we will have a conference committee over
    this supplemental appropriation bill. I am urging my chairman
    and others to consider adding some money in here for an item in
    the supplemental which is not included in any way. It is an
    item which, if you asked most American families, they would be
    surprised to find missing in any discussion of emergency need
    in America.
        There is absolutely nothing, no resources in the
    supplemental relative to school safety and trying to do
    something to make certain that classrooms are safer and that
    our children have a better education, a safer education. I hope
    I can prevail on the conferees.
        But I am sure one of the questions they will ask me is what
    would you cut out of the supplemental, and that is why your
    testimony today is so important. As I look, for example, at the
    House add-ons of some $7 billion over and beyond the
    administration's request, Senator Hutchison and others have
    tried to ask you, well, is it not prudent for us to spend more
    money for these things.

                        NATO security investment program

        Let me ask you in specific terms. I take it that you have
    reviewed some of the items that the House included in their
    supplemental request beyond the administration's request. Can
    you explain to me what the $240 million that the House added in
    for continued support of the NATO security investment program?
    Do you know what that is about?
        Secretary Cohen. The chairman can probably give you a
    better explanation of that program. I am not fully familiar
    with the security investment program they are talking about.
        General Shelton. Senator, we will have to provide you with
    a response for the record.
        Senator Durbin. I am sorry?
        General Shelton. We will have to provide you with a
    response for the record in answer.
        Senator Durbin. Is that because of security classifications
    or the fact that you are not certain as you sit there?
        General Shelton. I am not certain what that has been added
    for.
        Senator Durbin. That is an indication, I think, to the
    committee----
        Senator Stevens. Senator, we will be glad to tell you what
    those are, if you want to know. That is an advance of the 2000
    request for the NATO security fund, and it pulls into this
    fiscal year the monies that would be in the 2000 bill.
        The desire of the House is to pull some of those up so that
    we can have space available in the bill to take care of the
    things that the Secretary has mentioned are not funded. We are
    not funding the monies for bringing the troops home. We are not
    funding the monies for peacekeeping, we are not funding
    replacements of the Apaches, other things that are there. So
    they are pulling some of these things into this year so that
    the monies--we will be able to live under the cap next year and
    take care of things that have not been funded yet.
        Senator Durbin. Thank you, Mr. Chairman. I understand the
    rationale. If you can buy it in the emergency supplemental, you
    free up money under the caps for other spending.
        What I would like to suggest is that we take a hard look
    and decide if these are of an emergency nature. When I look at
    the milcon projects, $800 million worth, it is hard for me as a
    layman and a member of the Senate and not involved in defense
    to really judge the merit of each.
        But I find it difficult to explain back home how we find no
    money for school safety but money for, for example, centralized
    vehicle wash facilities in Europe, millions of dollars being
    spent on these things. And I would like to think that there
    could be some balance in this bill, and I hope that there can
    be.

                 differences on Military compensation increases

        May I ask you, on the pay raise, when the Senate authorized
    the pay raise and added some $17 billion to it, the
    administration views this issue a little differently in how
    much is to be spent. Do you have an understanding, Mr.
    Secretary, of the $1.8 billion for pay raise and retirement,
    whether or not there are conditions attached, that it will
    follow the Senate authorization language or anything of that
    nature?
        Secretary Cohen. I have not looked at the language. You
    mentioned $17 billion. I do not think that is the issue in
    terms of the pay raise.
        Senator Durbin. This was the Senate amendments on the
    floor, and we are told some $17 billion in cost to the pay
    raise program the President had proposed.
        Secretary Cohen. I believe it fell in the range of $11
    billion. As I recall, we were roughly at $36 billion and it
    came out about $47 billion roughly in that category.
        So what they did in the Senate, adding to our proposal,
    they went from 4.4 percent to 4.8 percent. It also had a change
    in the Redux that allowed for a thrift saving plan. It added
    money to allow for a transfer of Government issue (GI) benefits
    to families and added something for food stamp recipients as
    well.
        But it totaled up to roughly $11 billion over and above
    what we had requested.
        Senator Durbin. I see my time is up, but I would like to
    ask just one final comment or question. I wrote to you a little
    over a year ago about an extraordinary situation where they had
    identified a sergeant, a black sergeant who served in the Civil
    War, who many people had researched and believed that he should
    have been eligible for a Medal of Honor.
        We are waiting, not to prompt any specific reply, but
    waiting for a reply. As hard as it may be to believe, the
    daughter of that Civil War soldier is still alive today, in her
    nineties, and we are hoping to get some answer back from the
    Pentagon about our request on a timely basis because of her
    advancing age.
        His name is Andrew Jackson Smith, and if you would be kind
    enough to check into that, I would appreciate it.
        Secretary Cohen. Senator Durbin, let me say of all the
    reforms that I have tried to institute at the Pentagon, the one
    I have failed at magnificently is getting a timely response to
    inquiries coming from Members of Congress.
        And I will say publicly, as I have said privately, if you
    really have an issue that you want me to address, call me.
        Senator Durbin. How about face-to-face? Is that good?
        Secretary Cohen. This is great.
        Senator Durbin. Thank you. Thank you very much.

                         Munitions expended per target

        Senator Stevens. You are being very patient. Did I
    understand correctly that you said we have used 10,000
    munitions on 380 targets?
        Secretary Cohen. 380 separate targets.
        Senator Stevens. That ratio--that means each one of those
    targets have been hit a substantial number of times.
        Secretary Cohen. When we say target we do not mean
    individual targets. These are target groups.
        Senator Stevens. Oh, target groups.
        General Shelton. An example, Mr. Chairman, would be like an
    assembly area. That is one target. But that is a very large
    area--troop assembly areas, vehicle assembly areas--where maybe
    you release 16 to 18 weapons within that one target area.
        Senator Stevens. Well, thank you. I did not want someone to
    do some rapid simply analysis arithmetic, as I did, and say
    that is a lot of bombs for one target.
        Secretary Cohen. And, as a matter of fact, we tried to
    point out that if you look at the precision munitions that we
    have in fact used, they are much more effective and accurate
    than what we had just a few years ago during Desert Storm.
        So the precision is getting better, so we are able to do
    more damage with fewer and fewer munitions than we were able to
    just a few years ago.

                    meeting the needs of the National Guard

        Senator Stevens. I want to congratulate you for the
    progress you have made in meeting the needs of the National
    Guard. General, you appointed two special assistants for the
    Guard and Reserve matters. Could you tell us just briefly what
    role those new people are playing?
        General Shelton. I would be happy to, Mr. Chairman. First
    of all, I think they have been of immense assistance to me and,
    I think, in our overall total force effort to make sure that
    the Reserve and the National Guard are fully integrated in
    everything with the Pentagon.
        They attend almost every meeting at which National Guard or
    Reserve issues are discussed. They participate in the ongoing
    studies, and previous studies in the last year related to
    potential roles for the National Guard, any additional missions
    that they might take up. They perform a liaison function with
    the Adjutant Generals as well as coordinate for me with items
    of interest to the Congress, working with the staff of the
    Members of Congress.
        And I think overall they have been one of the significant
    factors that has brought us all together, just a tremendous job
    by both of these gentlemen.
        Senator Stevens. Thank you. Mr. Secretary, I again thank
    you for your trip to Alaska. You really inspired our troops up
    there. I saw that negative comment in one article, which was
    not accurate. But I do hope you noticed the tremendous
    importance that the ChalleNGe program of the National Guard
    plays in supplementing the roles of the military.
        They are doing a wonderful job and bringing a great many
    people into the armed services through the recruiting process
    once they finish that program.
        Secretary Cohen. Well, thank you, Mr. Chairman. I want to
    thank you for making the trip with me and then on to Hawaii,
    where we see the less than hospitable welcome by Senator Inouye
    in that driving rain during the retirement ceremony of Admiral
    Prueher.
        But it was a great trip, and I think it is very important
    that I in this position get out and visit with the troops and
    see the magnificent job that they are doing. You really have an
    extraordinary operation going in Alaska. And the opportunity
    for me to meet with the ChalleNGe program people was very
    beneficial to me.
        And, of course, I am saying it in jest with you, Senator
    Inouye. That was probably the coldest, wettest day that I have
    ever experienced in Hawaii. But you gave me a warm reception
    nonetheless.
        Senator Stevens. Thank you very much. In view of the time,
    I am going to submit a couple of my questions, particularly one
    with regard to space launch failures that we would like an
    answer for the record.
        Do you have any more questions?
        Senator Inouye. I do not have any questions. I would like
    to submit my questions and ask for responses.

                       downsizing DOD civilian employees

        But I just want to make a statement on some of my concerns.
    In 1987, DOD had 1,127,000 civilian employees. Today it is down
    to about 747,000. You are in the process of cutting back
    another 106,000, examining 229,000 jobs to privatize.
        I hope that together with our concern for military
    personnel, uniformed personnel, we would have some concern for
    civil service workers, because most of them have dedicated
    their lives and they have put in good time. And, you know,
    these cutbacks have an impact upon their families also. So that
    is one concern.
        The other one is the Pacific. As a result of Kosovo, we
    have sent important surveillance assets to Kosovo from Korea.
    One of the carriers that would usually serve within those
    waters there in Korea is now on its way to replace another sent
    to Kosovo. We have sent other aircraft to Kosovo.
        My concern is that all of us agree that the Korean
    Peninsula has a potential for some volatility, and yet if that
    happens we need immediate response, and the immediate response
    is not there. So I hope we will take those things into
    consideration.
        Secretary Cohen. Senator Inouye, let me just respond
    briefly, I indicated before that we wanted to compete some
    229,000 positions, but what we have found out when there is
    competition, usually the public sector wins half of those. So I
    did not want to indicate that is 229,000 we are trying to move
    out but rather to get the savings that come about through the
    competing of the positions.
        But I agree with you that we have to be careful that we do
    not find our civil servants reduced to such a level it will
    have an impact on our military as well.

                handling more than two major Theater operations

        On the major theater war (MTW) capability, as you know we
    have always tried to structure our forces in a way that we
    could handle two nearly simultaneously. We have never been
    structured to handle three.
        What we have now in Kosovo is roughly a major theater war
    under way, air war campaign. That means that we are at three
    MTWs rather than just two. And so we did not plan for this. We
    would have to make a number of adjustments should we ever have
    another two erupt nearly simultaneously, which we do not
    believe will happen but could theoretically. We would have to
    make a number of changes then.
        With respect to having to adjust our forces to deal with
    Kosovo, we have. We did have to move a carrier into the
    Adriatic. We did take compensatory steps by having land-based
    forces here in the United States be on a very short time frame
    to deal with any contingency in Asia.
        And General Tillelli is aware of that, so we have taken
    measures over here to make sure that in the event something
    happened in Korea we would have the forces necessary to get
    there in a very short period of time.
        We did have some reallocation, if I can put it in that
    fashion, of EA-6Bs out of Operation Northern Watch temporarily.
    We sent those down and had a shortage of those up in Operation
    Northern Watch. They have now been replenished, so we are
    carrying out Operation Northern Watch and Operation Southern
    Watch so that Saddam Hussein is not going to be able to take
    advantage of it.
        But it has been challenging. It has been very difficult on
    all of our personnel, and that again brings us back to the
    issue of we have fewer people but more missions and we have got
    to make adjustments to bring that back into balance.
        Senator Inouye. Thank you.
        Senator Stevens. Thank you very much. Senator Cochran.

                         successful military Recruiting

        Senator Cochran. Mr. Chairman. General Shelton, when we had
    the individual service chiefs before the committee the other
    day we asked a question about recruiting and retention problems
    that the services were having, and you mentioned the Navy
    having a shortfall now in their recruiting.
        General Krulak pointed out that the Marine Corps was not
    having that difficulty, and he said, of course we have a better
    product to sell. He went on to point out, though, that the
    reason that they are doing a good job is that they put their
    best people in the recruiting business, and they reward people
    for success in recruiting.
        Is it not about time that the other services were given an
    order by you to do what the Marine Corps is doing, emphasize
    recruiting more, try to bring these numbers up so we are not
    having the problems that were pointed out with the aircraft
    carriers going to the theater not manned sufficiently to do
    their job?
        General Shelton. Senator Cochran, first of all, I think
    that there is a lot to be said for additional recruiting and
    putting your best people out. It has not taken an order from me
    or from the Secretary. They are in fact doing that.
        As you probably know, the Navy a couple of years ago cut
    back on the numbers of recruiters, increased the size of the
    areas they had to cover, cut back on some of the advertising.
    That was reinstituted by Admiral Johnson this past year. It is
    starting to pay dividends. They are starting to make it up.
        The Army has done the same thing, along with a number of
    other initiatives, to include bonuses, increased the bonus, the
    college fund. You have probably seen some of the Army's
    advertising in that regard where it now has gone up to $50,000
    for a 4-year commitment in critical, hard-to-fill, military
    occupational specialties.
        But it is those types of initiatives that are ongoing that
    are helping start to reduce some of the shortfall that we had
    anticipated this year unless we did take some rather drastic
    steps.

                     budget assumptions about Base closings

        Senator Cochran. Mr. Secretary, I know that you have been
    advocating another round of base realignment and closure. We
    talked about that before, and you have heard my disagreement
    with you on that subject.
        My question is, Do you assume any savings in the budget
    that you have submitted to be derived from another round of
    base realignment and closure?
        Secretary Cohen. No. I have only assumed the costs. I put
    the costs in, but not the savings.
        Senator Cochran. How much does it cost?
        Secretary Cohen. It costs just under $3 billion.
        Senator Cochran. We may be able to save that.
        Secretary Cohen. Well, you can save that, but you will
    carry all of that excess capacity for a long time to come, and
    when you are still here, perhaps as chairman, in the year 2008,
    and those bills come due, you can say why didn't I take the
    opportunity when Secretary Cohen came before the committee to
    urge me to vote for them.
        Senator Cochran. Thank you for your endorsement.
    [Laughter.]
        Secretary Cohen. Thank you, Mr. Chairman.
        Senator Stevens. I do not want to presume, but I am not
    sure you would be chairman of this subcommittee in 2008. You
    would be chairman of the full committee in 2008, that is for
    sure. And we will endorse you for that now.

                    content of fiscal year 1999 Supplemental

        Let me ask this one last question. There is no money in
    this request that we received on the supplemental for rotation
    of people there in Kosovo, there is no money to bring them
    home.
        Secretary Cohen. No, sir.
        Senator Stevens. And there is no money for replacement of
    things we have lost so far.
        Secretary Cohen. That is correct.
        Senator Stevens. And you did not advance any of the 2000
    costs back into 1999 to make headroom under the cap for the
    things we know will occur?
        Secretary Cohen. No.
        Senator Stevens. Thank you very much.

                         Additional committee questions

        Any additional questions from members will be submitted for
    your response in the record.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                  Questions Submitted to Hon. William S. Cohen
                Questions Submitted by Senator Pete V. Domenici
               cost to sustain and/or expand military operations
        Question. In the April 19 White House briefing and the April 28
    hearing in this subcommittee, both Mr. Hamre of DOD and Mr. Lew of OMB
    made clear that the funding in the supplemental for military operations
    and munitions for the Balkans region, $5.1 billion, is intended to pay
    for all military costs through the end of September. Mr. Lew also
    stated that the cost of the first month of operations was $985 million
    ($287 million for operations; $698 million for munitions). In its cost
    estimate, CBO agreed that the first month of bombing cost about $1
    billion.
        However, since then General Clark has asked for almost an
    additional 400 aircraft. Clearly air operations are intensifying--and
    have become more expensive. There are five more months to go.
        How can $5.1 billion pay for six months of air operations at a cost
    of $1 billion per month?
        Answer. The cost of $1 billion for the first month of operations
    cannot be used to estimate the cost of the air campaign for the
    remainder of the fiscal year. The $698 million for munitions includes
    the replacement cost of munitions that were previously expended in
    Southwest Asia as well as the cost of projected usage in Kosovo.
    Additionally, the initial estimate includes operating costs for
    deployment and stationing costs that will not reoccur each month.
    Therefore, the $5.1 billion is adequate to support the air campaign
    through the end of fiscal year 1999 to include the additional aircraft
    requested by General Clark.
        Question. How can this same $5.1 billion pay for five months of
    expanded air operations?
        Answer. When we were building the supplemental request, we included
    costs for all known assets that General Clark had formally requested.
    Thus, the $3.3 billion requested for the air campaign covers known
    operating costs of U.S. Forces participating in Allied Force through
    fiscal year 1999, to include the approximately 300 additional aircraft
    requested by USCINCEUR.
        Question. Were the costs of the Apache helicopter deployment to
    Albania included in the original cost estimate? What are these costs?
        Answer. Yes. The Supplemental request includes $678 million for
    Task Force Hawk, the Apache helicopter deployment to Albania. This
    amount covers Operation and Maintenance and Military Personnel costs
    associated with deployment, OPTEMPO, and sustainment of the task force
    through fiscal year 1999.
        Question. What are your initial estimates of a deployment of
    significant ground forces, if such a decision were to be made? Do you
    have reason to disagree with CBO's estimate of $200 million per month
    per 27,000-man increment, with an additional $100 million if combat
    occurs?
        Answer. Based on first-year Bosnia experience, the CBO estimate of
    $200 million per month per 27,000-man increment seems too low. Because
    a cost estimate for a hypothetical ground force does not provide
    significant useful data, we have not made the attempt. If a decision is
    made for a ground force in Kosovo, we will develop a cost estimate for
    any U.S. contribution to the force as quickly as possible.
                           increased readiness needs
        Question. GAO is competing the first phase of its retention/Quality
    of Life study for myself and Senator Stevens. GAO briefed our staffs.
    They found that across all military services, both enlisted personnel
    and officers, the number one complaint and stated reason to leave
    military service is lack of needed equipment--meaning spare parts,
    munitions, and other support equipment. Another major reason was
    ``manning''--meaning undertrained, mis-assigned, or simply missing
    personnel.
        What information has been made available to you about the
    seriousness of spare parts and equipment shortages and the impact on
    morale?
        Answer. Shortages in spares and equipment play a major role in how
    our airmen perceive their Air Force and Nation supports them in their
    efforts to defend this Country. Constrained funding over the past
    several years, along with aging aircraft issues, technical surprises,
    engine maturation problems, significantly increased OPSTEMPO,
    downsizing of personnel, etc., have taken a toll on readiness and
    personnel morale. As a result, many of our readiness metrics cause
    concern: since our peak of fiscal year 1991, mission capable rates have
    declined by 10 percent; supply not mission capable rates and
    maintenance not mission capable rates have grown by 5.4 percent and 4.6
    percent, respectively.
        For several years, in order to balance resources, the common
    support equipment for aircraft has been funded at 68 percent and base
    maintenance and support equipment at 50 percent. No improvement in
    support equipment funding is projected across the FYDP. From 24 March-
    14 June 1999, Operations Allied Force and Shining Hope required 355
    additional pieces of support equipment. In order to support this
    requirement, it was necessary to divert the delivery of new equipment
    from state-side units, further exacerbating their equipment shortages.
        The air war in Yugoslavia has increased maintenance requirements on
    a lot of aging systems and engines. It also added strain on an already
    strapped series of critical supply lines that provide fighters and
    bombers with spare parts. This situation leaves our maintainers to
    resort to extraordinary measures--cannibalizations--to support their
    weapon systems. A CANN means they find an aircraft in for extended
    maintenance and take parts from it to fix another aircraft.
    Cannibalization rates have doubled since 1995. It takes more
    maintenance hours to remove and reinstall parts twice, which puts the
    morale of the maintainers at risk.
        While there are no current official surveys that attest to the
    impact these shortages are having on morale, there is anecdotal
    evidence of discouragement: airmen voicing their concerns with this
    situation. Also, retention rates have suffered within the maintenance
    force which we believe is partially caused by lack of equipment and
    parts.
        We are optimistic about the future, though. Improved spares funding
    in the fiscal year 1999 and fiscal year 2000 budgets should lessen the
    impact of spares shortages, and we are seeing some improvement in
    retention rates resulting from offering more reenlistment bonuses.
        Question. Especially for the type of combat aircraft being used in
    the Persian Gulf and the Balkans, what is the status of War Reserve
    stocks for maintenance and munitions?
        Answer. [Deleted.]
        Question. How do cannibalization rates for fighters and fighter-
    bombers compare to one year ago?
        Answer. Over the past few years, the requirement for spares and
    depot repairs has outpaced funding. A lack of spare parts drives
    cannibalization actions. As a result, the rate at which we must use our
    aircraft as spare part sources (cannibalization rate) to keep the rest
    of the force ready has increased.
        Another action driving this increase was lowering the fighters'
    Direct Support Objective (DSO) floor. The DSO represents the desired
    number of mission capable aircraft and is one of many wartime factors
    used in the Aircraft Sustainability Model which computes readiness
    spares package (RSP) authorizations. The current fighter DSO floor was
    established to enable the Air Force to meet its wartime taskings while
    holding costs to a minimum. By lowering the DSO floor, fewer parts were
    stocked, or available in the readiness spares packages, and a greater
    reliance was placed on cannibalizations.
        Due to lessons learned in Kosovo, we have reassessed this decision
    and determined the DSO floor, and RSP levels, must be restored to pre-
    Desert Storm levels. Our analysis indicates that $109,000,000 is
    required to refill RSP kits used in Kosovo, and another $195,000,000 is
    needed to restore the DSO floor to mitigate today's level of
    cannibalization. Cannibalization rates (CANNs per 100 sorties) for both
    Fighters and Bombers are higher in fiscal year 1999 than they were in
    fiscal year 1998. Below is a table depicting both the Fighters and
    Bombers annual CANN rates since fiscal year 1998:

    ------------------------------------------------------------------------
                                                                     Fiscal
                                                          Fiscal   year 1999
                                                        year 1998     \1\
    ------------------------------------------------------------------------
    Fighters..........................................      11.45      12.09
    Bombers...........................................      64.18      66.37
    ------------------------------------------------------------------------
    \1\ Only covers October 1998-April 1999.

        For the Fighters, the F-15A/D and F-15E are currently being
    cannibalized at the highest rate--20.3 and 26.4 CANNs per 100 sorties
    for fiscal year 1999, respectively. Both aircraft are also among our
    most tasked/deployed in fiscal year 1999 and consistently have high not
    mission capable for supply rates (13.5 percent and 13.1 percent,
    respectively). Below is a table depicting the F-15A/D's and F-15E's
    annual CANN rate since fiscal year 1998:

    ------------------------------------------------------------------------
                                                                     Fiscal
                                                          Fiscal   year 1999
                                                        year 1998     \1\
    ------------------------------------------------------------------------
    F-15A/D...........................................       17.7       20.3
    F-15E.............................................       22.5       26.4
    ------------------------------------------------------------------------
    \1\ Only covers October 1998-April 1999.

        For the Bombers, the B-1 and B-52 are currently being cannibalized
    at the highest rate--83.5 and 35.5 CANNs per 100 sorties for fiscal
    year 1999, respectively. Also, both aircraft have the highest Bomber
    not mission capable for supply rates in fiscal year 1999 (26.5 percent
    and 15.6 percent, respectively). Below is a table depicting the B-1's
    and B-52's annual CANN rate since fiscal year 1998:

    ------------------------------------------------------------------------
                                                                     Fiscal
                                                          Fiscal   year 1999
                                                        year 1998     \1\
    ------------------------------------------------------------------------
    B-1...............................................       84.6       83.5
    B-52..............................................       29.1       35.5
    ------------------------------------------------------------------------
    \1\ Only covers October 1998-April 1999.

        Question. For personnel not yet deployed overseas, how does pilot
    experience compare to that for forces in the U.S. one year ago? How
    does it compare for deployed pilots? Has pilot training in the U.S.
    increased or decreased from one year ago?
        Answer. Each AF Major Command (MAJCOM) establishes minimum levels
    of flying time which a crew member must possess in order to be an
    aircraft commander or flight lead. These minimums are normally defined
    in terms of total time and primarily assigned aircraft (PAA) time. The
    experience level of an individual major weapon system (MWS) is based on
    a ratio of experienced vs. non-experienced crew members. The objective
    of any unit is to ensure they have at least the minimum number of
    positions occupied by experienced crew members in order to meet
    readiness constraints (assumes 100 percent manning and is expressed as
    a percentage). At an April 1999 Rated Summit, Air Force 4-star military
    and civilian leaders validated that established experience objectives
    (shown below) will protect our combat capability in each MWS.
        The Air Force does not track experience levels by deployed vs. non-
    deployed status. HQ AF Operations and Personnel are responsible for
    ensuring that the MWSs maintain the proper level of readiness.
    Following is a breakdown of experience levels by MWS one year ago vs.
    today:

                                  [In percent]
    ------------------------------------------------------------------------
                                                                  Experience
                   MWS                   May 1998     May 1999    Objective
    ------------------------------------------------------------------------
    Fighter..........................         66.9         59.4           55
    Bomber...........................         84.2         66.1           43
    Tanker...........................         77.3         68.9           57
    Strat Air........................         75.2         70.1           57
    Theater Air......................         65.7         63.7           60
    Helicopter.......................         63.3         64.1           60
    ------------------------------------------------------------------------

        Although these numbers show that there has been a slow decline
    overall, all MWS's remain healthy. It is reasonable to expect that
    experience levels of both deployed and non-deployed pilots reflect
    these numbers. Also, these are averages; individual units will vary
    above and below these figures.
        One reason for the decline in experience levels is due to maximum
    pilot training production, coupled with decreased pilot retention. This
    situation increases the number of young, inexperienced pilots in a
    unit, driving down overall experience levels. We increased production
    to 869 in fiscal year 1998, and plan to increase production to 1,025 in
    fiscal year 1999.
        Question. For aircraft maintenance personnel not yet deployed
    overseas, how does aircraft maintenance experience compare to that for
    forces in the U.S. one year ago?
        Answer. With 50+ aircraft maintenance specialties (AF jobs)
    composed of over 55,000 active duty personnel, ascertaining how
    aircraft maintenance ``experience'' compares from year to year is
    difficult without conducting extensive, time-consuming research.
    However, a simple, aggregate view of skill level manning percentages
    (authorized versus assigned number of personnel) provides enough data
    to make a credible comparison. The table below illustrates a skill
    level manning comparison from the end of fiscal year 1997 to the end of
    May 1999.

                                                      [In percent]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                           Overall
                             Month/Year                           3-Level \1\  5-Level \2\  7-Level \3\    Manning
                                                                                                           Percent
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year 1997............................................          107           92          116          101
    May 1998....................................................          112           87          115           99
    Fiscal year 1998............................................          117           86          112           98
    May 1999....................................................          124           83          111           98
    ----------------------------------------------------------------------------------------------------------------
    \1\ 3-Level personnel are apprentices (semi-skilled).
    \2\ 5-Level personnel are journeymen (skilled).
    \3\ 7-Level personnel are craftsmen (advanced skills).

        As you can see, the overall percentages are fairly comparable, but
    we've experienced an increase in the number of apprentices and a
    decrease in the number of journeymen. This is the result of not only
    the GAO findings, but also an increase in the number of journeymen
    separating from the service after their first or second term. Eroding
    military benefits and the lure of well-paying jobs on the economy are
    prime factors in this exodus. To help (we also use reenlistment
    incentive programs) compensate for the loss of journeymen, the USAF
    increases the number of accessions, eventually resulting in more
    apprentices.
        Question. How does it (experience) compare for deployed aircraft
    maintenance personnel?
        Answer. There is no appreciable difference in experience between
    deployed personnel and all others.
        Question. Has aircraft maintenance training in the U.S. increased
    or decreased from one year ago?
        Answer. The aircraft maintenance formal training course lengths
    have remained fairly constant over the past year. The quality of
    training often suffers from one of the GAO findings--lack of equipment.
    There is a shortage of maintenance training devices (training aircraft,
    equipment, mock-ups, etc.) or, in some cases, the devices are
    antiquated.
        Question. For munitions personnel not yet deployed overseas, how
    does munitions experience compare to that for forces in the U.S. one
    year ago?
        Answer. Determining experience levels of forces in the U.S. from
    one year to the next is impossible to do without conducting a detailed
    survey. However, data is available for the 2W0X1 (munitions
    maintenance) and 2W1X1 (armament) AFSCs worldwide. In addition to
    providing 1998 and 1999 (as of 1 June) data, we also added 1990 (Pre-
    Desert Storm) for a better comparison. The table below illustrate the
    increase in 3-level (semi-skilled) and decrease in 5-level (skilled)
    personnel. The data indicates a decline of experience in munitions
    AFSCs.

    ----------------------------------------------------------------------------------------------------------------
                                                                                      3 Level
                                                                                       semi-     5 Levels   7 Level
                         Year                      Authorized  Assigned  Percentage   skilled    skilled    advanced
                                                                                     (percent)  (percent)  (percent)
    ----------------------------------------------------------------------------------------------------------------
    2W0X1:
        1990.....................................      8,236      7,841         95          20         59         20
        1998.....................................      6,522      5,915         91          24         54         20
        1999.....................................      6,473      5,875         91          24         50         25
    2W1X1:
        1990.....................................     11,250     10,576         94          16         59         23
        1998.....................................      7,617      7,317         96          30         47         22
        1999.....................................      7,517      6,911         92          24         48         27
    ----------------------------------------------------------------------------------------------------------------

        Question. How does it compare for deployed munitions personnel?
        Answer. Deployed personnel experience is essentially the same as
    U.S. based personnel.
        Question. Has munitions training in the U.S. increased or decreased
    from one year ago?
        Answer. Formal training has increased. Technical School teaches new
    personnel to a higher proficiency level than before (3-skill level).
    Additionally, an in-residence craftsman course was mandated prior to
    award of 7-skill level.
        Practical training at the unit level has decreased due to the lack
    of munitions available for aircrew training.
        Because of the lack of munitions to meet aircrew training
    requirements, 2W0X1 and 2W1X1 personnel do not receive as much
    practical experience building and loading munitions.
        Most of the training is reduced to demonstration of proficiency
    during periodic evaluations.
        Question. How do stocks of laser guided bombs (LGB) compare to 1990
    (the year before Desert Storm)?
        Answer. [Deleted.]
        Question. Where are our biggest problems for the human and material
    readiness of ground forces? Please specify types of military
    specialties and types of hardware.
      --Accelerated equipment usage;
      --Increased consumption of spare parts;
      --Rescheduling all canceled training;
      --Retention losses due to ``operational tempo (opstempo)'';
      --Replacing all munitions consumed in combat operations since 1992.
        Answer. The Army Research Institute (ARI) has been conducting
    annual surveys since 1992 which track the most important reasons given
    by soldiers for leaving the Army. The spring 1999 survey shows that
    ``Amount of time separated from my family'' was the reason that 10.5
    percent of enlisted soldiers and 16.1 percent of officers cited as
    their reason for separating from the Army. This was the third highest
    reason for enlisted soldiers (behind pay and quality of life) and has
    remained essentially stable since fiscal year 1993. It is the leading
    reason for officers and has risen by 6 percent since fiscal year 1993.
    Although the Army achieved overall enlisted retention objectives during
    fiscal year 1999, concerns over the long-term impact of frequent
    deployments continue to play a role in the development of retention
    programs and benefit packages.
                              x-34 testing program
        Question. As you are aware, NASA and the Air Force have determined
    to move the X-34 testing program away from White Sands Missile Range
    and Holloman to Edwards Air Force Base in California. Have you been
    able to evaluate the substantive reasons for this decision?
        Answer. In his 26 May 1999 letter to the NM delegation, Acting
    Secretary of the Air Force, F. Whitten Peters, consented to proceeding
    with the necessary safety board reviews to determine if the X-34
    program can be conducted at Holloman AFB NM. The Air Force is prepared
    to work with NASA to convene a safety review board. Additionally,
    before testing can be conducted, NASA will have to prepare an
    environmental analysis for the X-34 program. We understand that NASA
    will initiate a full environmental impact statement effort for the X-34
    program, which will include Holloman as a potential test site. If the
    outcome of the safety review and the environmental impact statement is
    positive, then Holloman could possibly be used for X-34 operations.
        Holloman AFB is primarily a war-fighting and training base, with
    the F-117 aircraft and the German Air Force F-4s and Tornadoes.
    Holloman has experienced a significant increase in flight proficiency
    training operations over the last few years, with the introduction of
    the German Air Force training operations. Prototype air vehicle testing
    is not a primary mission for Holloman. The X-34 is an experimental air
    vehicle with unproven flight control and flight termination systems.
    The Air Force's greatest concern is the possible risk exposure to AF
    assets at Holloman from potential X-34 flight anomalies. Scheduling X-
    34 test operations on weekends and other periods, when normal flying
    operations are not conducted, may mitigate some of the impacts to
    Holloman. Holloman is also constrained by shortages in the air traffic
    controller career field, resulting in reductions to weekend airfield
    operations.
        Question. Do you understand why we have and continue to test other
    space vehicles (X-40A) and land other unmanned aerial vehicles at
    Holloman, but a similar program is deemed too dangerous to proceed?
        Answer. After discussions with NASA, Orbital Sciences Corp, and
    White Sands Missile Range personnel at Holloman AFB NM on 17 May 1999,
    the Air Force agreed to perform the necessary safety board reviews to
    insure that the X-34 test program is conducted in a way that minimizes
    risk to AF assets and personnel. The X-40A and the QF-4 unmanned drone
    operations at Holloman had to pass the same type of safety review board
    that X-34 will. Since each test program and drone operation program is
    unique, each one must be evaluated based upon its own hazards and
    risks. The X-34 vehicle utilizes untested flight control and flight
    termination systems that increase the risk exposure to AF assets from
    potential X-34 flight anomalies. Scheduling X-34 test operations on
    weekends and other periods, when normal flying operations are not
    conducted, may mitigate the impacts to Holloman.
                                     ______

               Questions Submitted by Senator Christopher S. Bond
                             weapons effectiveness
        Question. Mr. Secretary, I understand that NATO is still
    controlling the flow of information concerning weapon damage
    assessments of the various targets assigned to USAF assets. Do you
    anticipate that when this operation draws to a close, you might be able
    to report to this committee an assessment of our effectiveness?
        Answer. Yes. Assessments will be completed by the Services after
    every strike operation. The Air Force and Navy will assess how well the
    ``weapons on target'' performed during the Kosovo conflict. These
    assessments can take anywhere from months to years to complete.
                            tactical strike aviation
        Question. Mr. Secretary, tactical strike aviation has proven to be
    a major player in this operation as it has in the past. I anticipate
    that it will into the future. We are currently facing the imminent
    closure of the line for the nation's premiere strike fighter platform,
    the F-15E Eagle. With budget crunches anticipated for the future, and
    the escalating costs and schedule stretching of follow-on aircraft,
    would you please perform a review of the strategic risks associated
    with a line closure, and provide the answer to me for the record?
        Answer. There are two strategic risks associated with an F-15E line
    closure: the effects on USAF deep interdiction capabilities in future
    conflicts, and the effects on the U.S. industrial base.
        The F-15E is projected to be the USAF's deep interdiction platform
    until at least 2015 and perhaps beyond. On-going and future avionics
    and systems upgrades will ensure the aircraft's continued effectiveness
    until a replacement platform is fielded.
        The risk to the U.S. industrial base is low. The contractor, The
    Boeing Company, is beginning production of the Navy's newest fighter,
    the F/A-18E/F, which will use some F-15E production facilities and
    subcontractors. Production of this aircraft will last for at least 10
    years. Additionally, should Boeing win the Joint Strike Fighter
    competition, it could be assured of approximately 25 years fighter
    aircraft production. The cost to maintain F-15E production capabilities
    is considerable. It would cost $10 to $20 million per year to maintain
    an idle plant, based on Boeing rough order of magnitude pricing.
    ``Trickle'' production based on a rate of 6 F-15E aircraft per year
    would cost $75 to $90 million per aircraft. Current budgetary levels
    and USAF requirements do not support these costs.
        Question. Mr. Secretary, based on your current planning you seem to
    believe that this operation could continue into October. Maybe longer.
    Do you have any idea what our plans are for the relief of the refugees
    when winter comes to the region, of what our commitments will be once
    peace is established, and what the potential costs will be?
        Answer. As you know, the withdrawal of Yugoslav forces from Kosovo
    in June, and the subsequent deployment of KFOR, resulted in the rapid
    repatriation of the overwhelming majority of refugees then housed in
    Albania and the Former Yugoslav Republic of Macedonia. This
    fundamentally altered the nature of international humanitarian
    operations. While we are greatly relieved that Kosovars will not have
    to spend the winter in refugee camps, there was significant destruction
    and damage to housing in Kosovo, which will require international
    assistance to prepare for winter conditions. The U.N. and other
    international organizations have the lead for relief in Kosovo,
    supported by the United States and our European allies. U.S. forces in
    Kosovo will provide appropriate support as needed to the Department of
    State and the Agency for International Development in conducting
    humanitarian operations. Costs of such operations would be funded
    through supplemental appropriations already provided to the Department
    for refugee assistance.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
                           two theater war assumption
        Question. Mr. Secretary, I would like to ask you a few questions
    concerning military readiness and this nation's ability to protect its
    vital national interests. Two weeks ago I and others on this Committee
    asked Dr. Hamre about the ability of the armed forces to fight and win
    two major regional conflicts at the same time. He was somewhat
    equivocal in his response. His answer was, and I'm paraphrasing here,
    that this nation has never advertised that it can fight and win two
    major regional conflicts simultaneously. We can do it almost
    simultaneously, in that we can depend on a little time lag between
    conflicts.
        Mr. Secretary, it seems that the success of the policy is dependent
    upon the benevolence of our adversaries to attack only when we are not
    otherwise engaged. Is this a wise policy?
        Answer. The most stressing requirement for the U.S. military is
    fighting and winning major theater wars. In particular, it is
    imperative that the United Sates, together with its regional allies, be
    able to deter and defeat large-scale, cross-border aggression in two
    distant theaters in overlapping time frames.
        The Department assumes, as we have for many years, that these wars
    would not occur simultaneously. Rather, we assumed that a second foe
    would need time to decide and then organize itself to take advantage of
    heavy U.S. military engagement in the other theater. In such a case,
    the United States would seek to halt the second aggressor's advance
    while it concludes operations in the first theater. It would then shift
    its focus to the second theater, including, where necessary, a
    counteroffensive operation.
        This requirement by no means counts on the benevolence of our
    adversaries. Rather, it assumes that our adversaries will seek to
    exploit opportunities created by U.S. engagement in other theaters. I
    believe that the requirement for defeating aggression that occurs in
    overlapping timeframes appropriately balances the relative likelihood
    of a quick-acting, opportunistic second aggressor with the risks
    associated with such opportunism.
      north korean attack during operation allied force: effectiveness of
                                 u.s. response
        Question. This conflict is occupying a significant portion of our
    military. I am concerned that as we escalate our commitment to the
    Balkans, that this nation is able to protect what are its true
    strategic interests around the globe.
        Secretary Cohen, if during the current crisis, the Communists in
    North Korea launched an attack across the 38th parallel, could we
    respond effectively in defense of our South Korean ally?
        Answer. Yes, in accordance with our strategy, U.S. forces are
    prepared to transition to fighting and winning major theater wars from
    substantial levels of peacetime engagement overseas as well as multiple
    concurrent smaller-scale contingency operations. Clearly, our
    experience with Operation Noble Anvil--the U.S. contribution to Allied
    Force--was substantial in many respects. Nevertheless, I consulted
    routinely with the Chairman of the Joint Chiefs of Staff and the CINC
    and had high confidence in our capability to halt invading forces and
    win a major theater war in the event of a North Korean attack. Yet I
    would caution that in doing so we would have faced an added element of
    risk.
        Without question, Operation Noble Anvil involved a significant--
    [deleted]--commitment of land-based airpower. In fact, during the
    course of the operation, we committed nearly a full theater war's
    allotment of certain aviation assets and munitions--[deleted]. Given
    this level of commitment of land-based airpower, the conduct of a major
    theater war in Korea would have presented several significant
    challenges that could have increased the risk of casualties (especially
    during the early phases of the conflict).
        In light of these challenges, the Department took significant and
    prudent measures to lessen these risks. These measures included the
    advanced deployment of certain aircraft to Korea as well as the
    identification of other units that would be required to respond on very
    short notice. These measures helped to better position us to respond to
    aggression on the Korean peninsula should we have faced that challenge.
           carrier battle group steaming time to the western pacific
        Question. How long would it take to get a carrier battle group to
    the Western Pacific?
        Answer. While the exact period of time it would take to deploy
    certain aircraft carrier battle groups to the Western Pacific is
    classified, the steaming time from San Diego to the waters of the
    Western Pacific is approximately two weeks.
        [Deleted.]
                sufficiency of lift asset support to korean mtw
        Question. Will our military airlift and sealift assets support such
    a contingency?
        Answer. Though many U.S. air assets were stretched thin by
    operations in Kosovo, U.S. sealift and airlift assets would ultimately
    have been sufficient to support such a contingency. If it were
    necessary, we would have--per the outlines of U.S. defense strategy--
    disengaged some needed lift assets to assist with the defense of the
    Korean peninsula, should the Korean contingency have commenced at the
    same time that our lift assets were in greatest demand in the Balkans.
        Question. Taking the scenario one step further. If during the
    current crisis, the North Koreans attacked, and at the same time, Iraq
    moved 100 or so tanks and associated equipment up to the Kuwaiti
    border, how would this nation respond?
        Answer. A critical component of our strategy is the capability to
    transition to fighting major theater wars from a posture of global
    engagement--both peacetime engagement activities and smaller-scale
    contingency operations. The ability to transition between peacetime
    operations and warfighting effectively and in a timely manner is a
    fundamental requirement for virtually every military unit. In the event
    of the posited North Korean attack, we would likely choose to begin
    disengaging from engagement activities and operations not deemed vital
    to U.S. interests in order to better posture our forces to deter the
    possible outbreak of a second war. In the case of Kosovo, we would seek
    to mitigate the impact of such disengagement by working with allies to
    increase their commitment accordingly.
        However, it is important to note that we do not consider it highly
    likely that the United States would be challenged with major theater
    war in two theaters at once. Indeed, maintaining a two-theater war
    capability deters just such opportunism and adventurism. In October
    1994, for example, we were able to surge forces to the Persian Gulf to
    deter Saddam Hussein despite our buildup around North Korea at
    approximately the same time. In addition, we were also participating in
    smaller-scale operations in Haiti and Zaire, as well as routine
    engagement activities around the world.
            protecting vital interests in asia and the persian gulf
        Question. Could we protect our vital national interests in both
    Asia and the Persian Gulf, while conducting an air war of almost Desert
    Storm size in the Balkans?
        Answer. While it is difficult to provide a definitive answer
    without a more detailed scenario, our forces remain postured to respond
    decisively in defense of vital national interests in two separate
    theaters in overlapping timeframes. In the event of a single major
    theater war, we would likely choose to begin disengaging from
    engagement activities or smaller-scale contingency operations that
    represent important, but lesser, interests. In the event of two major
    theater wars, we would shift from our efforts to shape the
    international security environment to a posture of deterring and
    defeating aggression. In this scenario, U.S. forces would be withdrawn
    from peacetime engagement activities as smaller-scale contingencies
    (including operations such as Allied Force) as quickly as possible.
    U.S. forces could not prosecute three nearly simultaneous major theater
    wars; in such a scenario, we would have to carefully prioritize the
    allocation of our forces and assets based on the most significant
    threats to our vital national interests.
                                   readiness
        Question. Secretary Cohen, one message comes home to us that our
    men and women in uniform are working harder than ever? Have you
    examined whether the missions that we have for our military simply
    outstrip the capabilities of a force sized at 1.4 million people?
        Answer. The Armed Forces of the United States remain capable of
    executing the U.S. Defense Strategy. Overall unit readiness is
    satisfactory, although some deficient readiness indicators, especially
    personnel and aviation equipment, are a concern. The Services have
    already taken active measures to address many readiness issues, but
    concerns about personnel shortages and aging equipment require more
    attention and resources. Despite additional funds in fiscal year 1999,
    the impact of these increases has yet to be realized, and in some key
    areas, readiness continues to decline. Keeping current readiness
    posture sharp while preparing for tomorrow's challenges will require
    continued attention and resources. Finally, some specific enhancements
    that have significantly improved the U.S. military forces include: (1)
    strike capabilities of Naval and Air Force tactical aviation, (2)
    lethality of Army firepower, (3) capabilities of long-range bombers,
    (4) strategic mobility, (5) capabilities and lethality of munitions and
    munition systems, (6) battlefield surveillance, (7) nuclear, chemical
    and biological defenses, and (8) capabilities of Reserve Component
    forces.
                  rapid assessment and initial detection teams
        Question. Mr. Secretary, I understand your budget request proposes
    to increase the number of National Guard RAID teams, the units designed
    to respond to terrorist acts with weapons of mass destruction by five,
    from 10 to 15. In testimony before this Committee earlier this year,
    the Chief of the National Guard Bureau indicated his view that both the
    Alaska and Hawaii Guard could present strong justification for
    receiving RAID teams. Would you concur in this assessment?
        Answer. No decision has been made yet regarding the location of
    RAID teams. The Office of Consequence Management and the Department of
    the Army are working this issue and I expect a recommendation soon.
                                     korea
        Question. Mr. Secretary, with all the attention on the Balkans and
    Southwest Asia, are we paying enough attention to Korea; could you
    update us on the situation on the Korean peninsula?
        Answer. [Deleted.]
        Despite persistent economic and humanitarian problems, North Korea
    remains reasonably stable and under the tight control of the Kim Chong-
    il regime. Pyongyang's conventional military readiness has eroded since
    the early 1990's, but it remains capable of inflicting considerable
    damage on South Korea with little warning, mainly from long-range
    artillery and rocket systems. Development of ballistic missiles is a
    high regime priority. These missiles pose a potential threat throughout
    the region, especially to South Korea and Japan and to the American
    forces stationed there. Food aid and the resiliency of the North Korean
    population have averted mass starvation, but numerous people have died
    in recent years and an unknown portion of the population still suffers
    from malnutrition. A solution to these problems requires a commitment
    to fundamental economic and social change, something Kim Chong-il
    remains unwilling or unable to accomplish. The long-term humanitarian
    and economic prospects for North Korea are bleak. North Korea is
    committed to engagement with the U.S. and has adhered to the Agreed
    Framework. Nevertheless, the regime will use confrontational tactics
    and military provocations to enhance its regional stature and to obtain
    aid.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                              personnel shortfalls
        Question. Secretary Cohen, has your office studied whether we need
    to reexamine the process by which we determine personnel requirements
    for ships and other military units?
        Answer. The Military Departments use a variety of methods to
    determine their personnel requirements for ships and other military
    units. For the most part, the Services man their force structure based
    on numbers and types of equipment, and model wartime requirements
    predicated on the requirement to fight and win two major regional
    conflicts.
        My staff examines the processes that each of the Military
    Departments uses to man ships, planes, tanks, and other equipment on a
    continuing basis. To develop doctrinal and operational concepts for
    wars of the future, the Chairman and I established a new Joint
    Experimentation Directorate, reporting to the Commander in Chief of
    U.S. Atlantic Command. An integral part of the joint experimentation
    process will be determining human resource requirements driven by
    emerging equipment and doctrine. We will continue to work hard to
    ensure our operational forces are manned with the proper numbers and
    skills to execute the national strategy.
                                   readiness
        Question. Secretary Cohen, one message comes home to us that our
    men and women in uniform are working harder than ever? Have you
    examined whether the missions that we have for our military simply
    outstrip the capabilities of a force sized at 1.4 million people?
        Answer. The Armed Forces of the United States remain capable of
    executing the U.S. Defense Strategy. Overall unit readiness is
    satisfactory, although some deficient readiness indicators, especially
    personnel and aviation equipment, are a concern. The Services have
    already taken active measures to address many readiness issues, but
    concerns about personnel shortages and aging equipment require more
    attention and resources. Despite additional funds in fiscal year 1999,
    the impact of these increases has yet to be realized, and in some key
    areas, readiness continues to decline. Keeping current readiness
    posture sharp while preparing for tomorrow's challenges will require
    continued attention and resources. Finally, some specific enhancements
    that have significantly improved the U.S. military forces include: (1)
    strike capabilities of Naval and Air Force tactical aviation, (2)
    lethality of Army firepower, (3) capabilities of long-range bombers,
    (4) strategic mobility, (5) capabilities and lethality of munitions and
    munition systems, (6) battlefield surveillance, (7) nuclear, chemical
    and biological defenses, and (8) capabilities of Reserve Component
    forces.
                                 defense reform
        Question. Can you achieve your goal to cut civilian manpower
    another 107,000 positions without additional Base Closures?
        Answer. Yes. The civilian manpower estimates that have been
    programmed through fiscal year 2005 reflect significant reductions
    associated with conducting government versus private sector cost
    competitions for work that can be performed by the commercial sector.
    As you know, competition was identified as a primary strategy for
    reducing DOD infrastructure costs under my Defense Reform Initiative.
    The civilian manpower estimates reflect savings assumptions that are
    based upon the Department's historical experience in competing work and
    will be revised, as necessary, to reflect the actual results of
    competitions. The Department continues to request Base Realignment and
    Closure (BRAC) authority because we believe it is one of the primary
    methods to reduce our infrastructure costs.
        Question. What will be the impact on your Defense Reform
    Initiatives goals and future budget requirements if Congress does not
    approve additional Base Closure rounds?
        Answer. We consider all the Defense Reform Initiatives, which
    includes securing authority for additional base closures rounds, to be
    vitally important for eliminating unneeded base infrastructure. Absent
    this authority, the other initiatives, such as demolition, outsourcing
    and consolidations will take on even greater importance. None of these
    initiative is a substitute for BRAC's ability to reduce infrastructure
    and produce an estimated $3 billion in annual recurring savings.
    Without future BRAC rounds, I would need to identify other potential
    sources of funding, further cuts in force structure, reductions in
    training and readiness, or negative impacts on quality of life
    programs.
                  rapid assessment and initial detection teams
        Question. Mr. Secretary, I understand your budget request proposes
    to increase the number of National Guard RAID teams, the units designed
    to respond to terrorist acts with weapons of mass destruction by five,
    from 10 to 15. In testimony before this Committee earlier this year,
    the Chief of the National Guard Bureau indicated his view that both the
    Alaska and Hawaii Guard could present strong justification for
    receiving RAID teams. Would you concur in this assessment?
        Answer. No decision has been made yet regarding the location of
    RAID teams. The Office of Consequence Management and the Department of
    the Army are working this issue and I expect a recommendation soon.This
    conflict is occupying a significant portion of our military. I am
    concerned that as we escalate our commitment to the Balkans, that this
    nation is able to protect what are its true strategic interests around
    the globe.
                                     korea
        Question. Mr. Secretary, with all the attention on the Balkans and
    Southwest Asia, are we paying enough attention to Korea; could you
    update us on the situation on the Korean peninsula?
        Answer. [Deleted.]
        Despite persistent economic and humanitarian problems, North Korea
    remains reasonably stable and under the tight control of the Kim Chong-
    il regime. Pyongyang's conventional military readiness has eroded since
    the early 1990's, but it remains capable of inflicting considerable
    damage on South Korea with little warning, mainly from long-range
    artillery and rocket systems. Development of ballistic missiles is a
    high regime priority. These missiles pose a potential threat throughout
    the region, especially to South Korea and Japan and to the American
    forces stationed there. Food aid and the resiliency of the North Korean
    population have averted mass starvation, but numerous people have died
    in recent years and an unknown portion of the population still suffers
    from malnutrition. A solution to these problems requires a commitment
    to fundamental economic and social change, something Kim Chong-il
    remains unwilling or unable to accomplish. The long-term humanitarian
    and economic prospects for North Korea are bleak. North Korea is
    committed to engagement with the U.S. and has adhered to the Agreed
    Framework. Nevertheless, the regime will use confrontational tactics
    and military provocations to enhance its regional stature and to obtain
    aid.
                                     ______

                   Questions Submitted by Senator Tom Harkin
                               readiness funding
        Question. In my view, any readiness problems are due to management
    issues, not lack of money. I note that in fiscal year 1990--during the
    Bush Administration--we funded operations and maintenance of the Armed
    Forces at more than $90 billion annually. That worked out to about
    $27,000 per person in the Armed Forces. However, in fiscal year 2000,
    the Administration plans on spending more than $100 billion on
    operations and maintenance, more than $46,000 per person. Do these
    numbers show that the Department is receiving a high level of funding
    for readiness?
        Answer. It has been the consistent policy of the Department to
    protect readiness and the readiness of our first-to-fight forces
    remains high. While the per capita growth in operation and maintenance
    reflects in part the Department's commitment to maintain readiness, it
    is also indicative of other trends that can increase per capita
    spending.
        Inflation, civilian pay raises and foreign currency adjustments
    over the last ten years account for the largest change in per capita
    spending. When adjusted for the effects of these pricing changes, the
    fiscal year 2000 figure is $36,000 per person.
        Program changes may drive an increase in per capita spending with
    little effect on readiness. For example, as the Department has reduced
    the size of the military force, some functions once performed by
    military personnel are now done by civilian and contract personnel. Per
    capita cost as measured against military forces will go up as military
    force levels decline and functions shift to the civilian or contract
    personnel.
        Some equipment is aging and we have experienced higher maintenance
    costs to care for older equipment and to maintain capability rates. On
    the other hand, more modern equipment recently fielded is less manpower
    intensive and may require fewer military personnel to operate. Both of
    these trends--higher maintenance costs and less manpower intensive
    weapons systems--will create an increase in the per capita cost.
        Over the last ten years, we have seen increases in programs that do
    not have a direct effect on readiness. Environmental programs are an
    important responsibility of the Department, but their influence on the
    increase in per capita spending does not enhance readiness.
        Finally, the Department has requested authority for several years
    to conduct another round of base closures. The increase in per capita
    spending also reflects underutilized installations and capacity within
    the Department. As the military and civilian populations have decreased
    over the last ten years, the infrastructure of the Department has not
    declined at the same pace. The Department is carrying more
    infrastructure than required, thus driving up per capita spending.
        Readiness is a complex issue and cannot be measured using a single
    indicator. As can be seen from the examples above, it is not accurate
    to conclude from per capita figures that the Department has mismanaged
    readiness funds nor should you conclude from these figures alone that
    the Department has a high level of funding for readiness. For this
    reason, the Department continually monitors readiness and adjusts
    funding to prevent any negative trends.
                                 pilot shortage
        Question. Some have pointed to ``pilot shortages'' as evidence that
    our Armed Forces are not ready. I understand that the Air Force
    announced a shortfall of 954 pilots. However, I further understand that
    this does not mean that planes are left with empty cockpits. The Air
    Force employs more than 13,000 pilots. The Air Forces assigns about 60
    percent of its pilots to operational force cockpits. This includes not
    just pilots flying operations, but also instructors and others. The
    rest--about 40 percent of Air Force pilots--are assigned to staff
    positions or other special duty, in other words desk jobs. This seems
    to mean that any shortage may mean that some desks may lack pilots, but
    there are plenty of pilots for aircraft.
        Has the ``pilot shortage'' resulted in any operational problems? Is
    the Pentagon looking at creative solutions to the pilot issue, such as
    retaining more pilots who desire to keep flying in operational billets?
        Answer. Although the Air Force has a serious pilot shortage, to
    date we have been able to protect our operational capability by manning
    our operational units and absorbing shortages on the staff. A pilot
    prioritization plan protects our capability and allows us to meet our
    operational commitments.
        The Air Force continues to examine and introduce creative solutions
    that will retain those pilots who desire to remain in flying positions.
    Air Force leadership is currently considering continuation of Phoenix
    Aviator 20 (PA20). PA20, developed in conjunction with commercial
    aviation, recognizes that experienced AF pilots are a ``National
    Asset,'' needed in both military and civilian aviation. The program is
    designed to improve AF pilot retention by increasing the marketability
    of AF pilot retirees, thereby increasing the likelihood of improving
    the career intent of our younger pilots.
        The current pilot shortage dictates that we keep the bulk of our
    pilot force in cockpits in order to maintain our combat capability.
    This makes it much easier for a pilot to serve an entire career in
    operational flying billets.
                    quality of life for air force personnel
        Question. Quality of life for the troops is a key element of
    readiness. However, I think it is clear that there are some substantial
    shortfalls in our troops quality of life, especially the thousands of
    troops forced to turn to food stamps and other forms of federal
    assistance due to inadequate pay. Last year, I joined with Senator
    Domenici in passing a simple provision that requires the Pentagon to
    address this problem and propose some solutions. Also, during the
    debate over S. 4, the troop pay bill, earlier this year, I was able to
    work with other Senators to get agreement on a provision to provide a
    special income supplement to those families who are eligible for food
    stamps.
        I haven't seen the Pentagon's proposal to fix the problem of
    military families receiving food stamps. Does the provision I describe
    make sense to you? Does it coincide with some of the solutions now
    being explored by the Department?
        Answer. This was part of the reason we submitted a comprehensive
    package of compensation improvements. The January 1, 2000, pay increase
    and pay table reform will be the largest increase in the past twenty
    years. We believe this will be a significant help to our members.
        We do see difficulties with the proposed supplemental subsistence
    allowance. For example, our analysis indicates it will not
    significantly reduce the number of members receiving food stamps. Also,
    since the proposed special income supplement is based strictly on
    eligibility for food stamp benefits, members with income just above the
    eligibility limit would receive no benefit while those with a slightly
    smaller income would receive the $180 a month special supplement.
        Similarly, a significant percentage of food stamp recipients are
    the families of more junior enlisted members who live in on-base
    housing. The in-kind value of that housing and the utilities that are
    furnished are not included in the calculation of their income. On the
    other hand, the housing allowances of their colleagues, who occupy
    often more expensive off-base housing, are included in computing family
    income for food stamp benefits. Thus, the $180 a month special
    supplement would more likely go to members living on base than in the
    community. We believe that allowances not associated with military
    duties can create inequities; members feel that they should receive
    equal compensation for similar duties.
                            nuclear weapons and nato
        Question. Do U.S. allies in NATO influence U.S. national nuclear
    policy through the Alliance's Nuclear Planning Group? If so, how? Is
    there contact between U.S. Strategic Command and NATO allies, and if
    so, what kind? If not, is there any relationship between NATO nuclear
    policy and U.S. nuclear policy?
        Answer. The Alliance's Nuclear Planning Group (NPG) is composed of
    NATO Defense Ministers. U.S. national nuclear policy is established by
    the President of the United States and is in no way influenced by
    allies through the NPG. In reality, the contrary has been the case as
    the U.S. has greatly influenced the development and evolution of NATO
    nuclear policy as a result of its leadership role in providing nuclear
    forces to the Alliance. Hence, NATO nuclear policy has historically
    been consistent with that of U.S. nuclear policy. [Deleted.] Two UK
    personnel are continuously assigned on a rotational basis to STRATCOM.
    [Deleted.]
        Question. Does U.S. theater nuclear doctrine apply to U.S. nuclear
    forces in Europe? What is the relationship between U.S. nuclear
    doctrine and U.S. nuclear forces in Europe?
        Answer. U.S. strategic and theater nuclear doctrine is established
    by the President and set forth in a series of increasingly detailed
    documents. [Deleted.] U.S. Nuclear doctrine applies equally to U.S.
    forces stationed or deployed anywhere in the world, to include those in
    Europe.
        Question. Can U.S. nuclear weapons currently deployed in Europe be
    used for any task by the United States without consulting with NATO or
    Alliance members on whose territory those weapons are deployed?
        Answer. Consultation is an inherent characteristic of the Atlantic
    Alliance. The Political Principles for Nuclear Planning and
    Consultation contains the basic principles for consultation within the
    Alliance on nuclear employment. [Deleted.]
        Question. Can the United States withdraw some or all of its nuclear
    forces deployed in Europe, specifically without consulting NATO allies?
        Answer. NATO's nuclear force posture has been reviewed and approved
    by Nuclear Planning Group Ministers. The High Level Group, chaired by
    the United States, is an expert-level body tasked with reviewing
    matters involving nuclear policy, force structure and posture, and to
    provide advice to Ministers as appropriate. [Deleted.]
        Question. What is the status of training and readiness of nuclear-
    capable air forces of NATO allies, Belgium, Germany, Greece, Italy,
    Netherlands, and Turkey?
        Answer. NATO Defense Ministers approved a three-tiered readiness
    system for allies' nuclear-capable air forces: [deleted]. As the
    current security environment does not warrant maintaining a large
    number of dual-capable aircraft (DCA) at a high nuclear readiness
    level, a credible minimum deterrent against potential risks can be
    achieved by a smaller number of DCA at high readiness. [Deleted.]
        Question. The new NATO members are joining the Nuclear Planning
    Group. What information concerning U.S. nuclear forces and planning is
    being supplied to them and what is the legal basis for this?
        Answer. In July 1998, the NATO High Level Group prepared a course
    of action, [deleted] to ensure that the Three Invited Countries acquire
    the necessary expertise on nuclear aspects of NATO's strategy so that
    they could fulfill their responsibilities as members of the NPG and the
    Alliance's integrated military structure. Fundamental to this aim was
    the timely preparation of key Defense personnel of the Invitees so that
    they could fulfill their role in the development of NATO nuclear policy
    and in nuclear consultations, and therefore participate effectively in
    Alliance nuclear matters as soon as their countries became full
    members. [Deleted.]
        As part of this process, and to accompany presentations, Ministers
    approved the release of certain documents to provide the Invitees,
    prior to their accession, with the necessary insight into the
    Alliance's nuclear policy and procedures. The physical release of the
    documents was accompanied by all necessary safeguards appropriate to
    the holding of such classified material in accordance with the
    provisions of NATO regulations governing control and accounting of
    classified documents. No ``atomal'' information (U.S. restricted data)
    has been disclosed. [Deleted.]
        Question. Are U.S. Trident submarines specifically assigned to
    NATO? If so, are submarines in both the Atlantic and Pacific fleets
    assigned to NATO? How does this arrangement work? Are any and, if so,
    how many SSBNs in which fleets assigned to SACEUR for targeting?
        Answer. U.S. Trident submarines are not specifically assigned to
    NATO, [deleted].
        Question. Secretary of State Madeline Albright announced last year
    that NATO nuclear forces were no longer on alert. How is this policy
    extended to U.S. Trident submarines assigned to NATO?
        Answer. Secretary of State Albright's announcement last year was
    likely meant to refer to Alliance non-strategic nuclear forces,
    specifically dual-capable aircraft, which no longer maintain any alert
    commitment and their readiness criteria have been greatly reduced as
    noted earlier. [Deleted.]
                      u.s. tomahawk and the united kingdom
        Question. The U.S. has supplied Tomahawk cruise missiles to the UK.
    The U.S. cooperates on nuclear weapons issues with the UK through the
    Joint Working Groups. What information has been supplied to the United
    Kingdom about the U.S. TLAM/N variant since the introduction by the
    U.S. of this system in the 1980s? Has the UK ever expressed interest in
    a nuclear option for its TLAM? What information and technology specific
    to the TLAM/N has been shared or supplied to the UK?
        Answer. The United Kingdom has the conventional version of the U.S.
    TEAM. [Deleted] no data on TLAM/N has been provided to the UK
    [deleted].
                                     ______

                  Questions Submitted to Gen. Henry H. Shelton
                Questions Submitted by Senator Richard C. Shelby
                               command structure
        Question. General Shelton, we are fighting the current war as a
    member of a coalition. We also fought the Persian Gulf War as a member
    of a coalition. During that air campaign, the military called the
    shots. When I visited the Balkans this spring, one of the most
    disturbing revelations was that in the NATO coalition, the military has
    not been calling the shots. It seems that we are fighting a war by
    committee, with bombing targets being screened by politicians in
    Brussels.
        General Shelton, what are the differences between the command
    structure in the Gulf War compared with NATO's current command
    structure?
        Answer. Desert Storm.--Due to the myriad of political, military,
    and cultural considerations among countries participating in the
    Coalition (over 800,000 personnel from 36 nations), separate parallel
    lines of command/authority were established. In general, the Islamic
    forces were organized into a joint forces/theater of operations command
    structure under Saudi Lieutenant General Khalid bin Sultan bin Abdul-
    Aziz. The Commander-in-Chief, U.S. Central Command (USCINCCENT, GEN
    Schwarzkopf) commanded U.S. and non-Islamic members of the Coalition.
    However, no single overall commander was designated.
        Allied Force.--Once again, a multi-national force; however, they
    are all under the command of the NATO Supreme Allied Commander, Europe
    (SACEUR, GEN Clark).
        Key points.--All U.S. troops in Desert Storm were under U.S.
    control (USCINCCENT). NATO's command structure would allow SACEUR to
    transfer NATO operational control (OPCON) of selected U.S. forces to
    competent NATO commanders. This permits the commander to direct forces
    to accomplish specific missions or tasks. It does not allow transfer of
    NATO operational command (OPCOM) which would permit a commander to
    reassign U.S. forces to other missions.
        Question. Do you believe that from day one of Operation Allied
    Force, that NATO command structure has enhanced the effectiveness of
    the air campaign?
        Answer. From the beginning, Operation Allied Force has had the full
    consensus and support of all 19 NATO nations. Many of the nations
    provide both strike and support air assets while many assist in other
    ways. Even non-NATO neighboring nations assist by granting over-flight
    rights and use of their airspace. NATO aircraft are seamlessly
    integrated on the daily air tasking order and fly combined combat and
    support missions integrated into multinational force packages from NATO
    bases throughout Europe. NATO strategy, operational objectives, and
    tactical execution are synchronized and remain highly effective under
    the command structure of the NATO Alliance.
                                 ground forces
        Question. One final question. General Shelton, if we are forced to
    invade Kosovo and occupy it, how many U.S. troops will NATO require?
    How many casualties should be expected?
        Answer. [Deleted.]
        As we stated from the beginning of Operation Allied Force,
    casualties should be expected in any operation. Due to the high
    standards of training, robust rules of engagement, the best equipment
    in the world, and most importantly, the utmost professionalism with
    which our soldiers, sailors, airmen, and marines execute daily
    operations, the U.S. did not suffer a single casualty due to enemy fire
    in Operation Allied Force. If a ground invasion into Kosovo was
    conducted in a hostile environment, casualties should be expected.
    Again, due to the reasons mentioned above, I believe U.S. casualties
    could be kept to an absolute minimum.
        Question. If NATO is forced to invade and occupy the whole of
    Serbia, how many U.S. troops will be required? Again, how many
    casualties should we expect?
        Answer. [Deleted.]
        As we stated from the beginning of Operation Allied Force,
    casualties could be expected in any operation. Due to the high
    standards of training, robust rules of engagement, the best equipment
    in the world, and most important, the utmost professionalism our
    soldiers, sailors, airmen, and marines execute daily operations with,
    the United States did not suffer a single casualty due to enemy fire in
    Operation Allied Force. If a ground invasion was conducted in a hostile
    environment into Serbia, casualties should be expected. Again, due to
    the reasons mentioned above, I believe U.S. casualties could be kept to
    a minimum.
                              personnel shortfalls
        Question. General Shelton, how many of your front line forces
    deployed with five percent or more shortages of personnel?
        Answer. As a general rule, front line forces are deployed as near
    to full strength as possible, but often at the expense of non-deployed
    force readiness levels. Currently, the Army and Air Force strive to
    deploy units at greater than 95 percent strength while the Naval forces
    deploy in accordance with Defense Planning Guidance (DPG) which
    requires achieving C-1/C-2 readiness in all categories no later than
    their arrival in theater. While these percentages are approximations,
    the certain fact is the increasing number of deployments is making unit
    readiness a more challenging concern for the Services.
        Question. What is your goal for deploying units 90 percent, 95
    percent or 100 percent of requirement?
        Answer. The standing requirement for all forces, Active and Reserve
    Component, which are scheduled to deploy within 30 days in support of
    operations plans, is to maintain strengths at between 80 and 100
    percent of requirements. At times of actual deployment, each Service
    takes steps to bring affected units up to the fullest mission capable
    status possible.
                                   readiness
        Question. General Shelton, our theater commanders ensure us their
    front line forces are equipped and ready, but those forces at home seem
    to be stretched to the breaking point? How would you assess the overall
    readiness of the entire force?
        Answer. [Deleted.]
                  rapid assessment and initial detection teams
        Question. General Shelton, are you in favor of expanding the number
    of National Guard RAID teams, as requested from 10 to 15?
        Answer. I support the President's Budget and the increase indicated
    for the National Guard RAID teams.
                                     korea
        Question. General Shelton, are we ready to respond to a serious
    crisis in Korea?
        Answer. Yes, we are.
        Question. Do we have any assessment of what the difference would be
    if a crisis developed today versus before we were conducting Operation
    Allied Force?
        Answer. We will be able to respond to a crisis in the Korean area
    of operation (AOR) with the same or an equal magnitude as we would have
    prior, during, and after the conduct of Operation Allied Force.
        There have been some concerns expressed over our military
    capability in the region due to the absence of the Kitty Hawk battle
    group from the Pacific Command AOR. However, we have taken steps to
    mitigate the operational impact of this situation should a crisis occur
    in the Korean AOR.
        [Deleted.]
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                              personnel shortfalls
        Question. General Shelton, how many of your front line forces
    deployed with five percent or more shortages of personnel?
        Answer. As a general rule, front line forces are deployed as near
    to full strength as possible, but often at the expense of non-deployed
    force readiness levels. Currently, the Army and Air Force strive to
    deploy units at greater than 95 percent strength while the Naval forces
    deploy in accordance with Defense Planning Guidance (DPG) which
    requires achieving C-1/C-2 readiness in all categories no later than
    their arrival in theater. While these percentages are approximations,
    the certain fact is the increasing number of deployments is making unit
    readiness a more challenging concern for the Services.
        Question. What is your goal for deploying units 90 percent, 95
    percent or 100 percent of requirement?
        Answer. The standing requirement for all forces, Active and Reserve
    Component, which are scheduled to deploy within 30 days in support of
    operations plans, is to maintain strengths at between 80 and 100
    percent of requirements. At times of actual deployment, each Service
    takes steps to bring affected units up to the fullest mission capable
    status possible.
                                   readiness
        Question. General Shelton, our theater commanders ensure us their
    front line forces are equipped and ready, but those forces at home seem
    to be stretched to the breaking point? How would you assess the overall
    readiness of the entire force?
        Answer. [Deleted.]
                  rapid assessment and initial detection teams
        Question. General Shelton, are you in favor of expanding the number
    of National Guard RAID teams, as requested from 10 to 15?
        Answer. I support the President's Budget and the increase indicated
    for the National Guard RAID teams.
                                     korea
        Question. General Shelton, are we ready to respond to a serious
    crisis in Korea?
        Answer. Yes, we are.
        Question. Do we have any assessment of what the difference would be
    if a crisis developed today versus before we were conducting Operation
    Allied Force?
        Answer. We will be able to respond to a crisis in the Korean area
    of operation (AOR) with the same or an equal magnitude as we would have
    prior, during, and after the conduct of Operation Allied Force.
        There have been some concerns expressed over our military
    capability in the region due to the absence of the Kitty Hawk battle
    group from the Pacific Command AOR. However, we have taken steps to
    mitigate the operational impact of this situation should a crisis occur
    in the Korean AOR.
        [Deleted.]
                                     ______

                   Questions Submitted by Senator Tom Harkin
                               readiness funding
        Question. In my view, any readiness problems are due to management
    issues, not lack of money. I note that in fiscal year 1990--during the
    Bush Administration--we funded operations and maintenance of the armed
    forces at more that $90 billion annually. That worked out to about
    $27,000 per person in the armed forces. However, in fiscal year 2000,
    the Administration plans on spending more that $100 billion on
    operations and maintenance, more than $46,000 per person.
        Do these numbers show that the Department is receiving a high level
    of funding for readiness?
        Answer. Including Active, Guard, and Reserve personnel, the O&M
    ratio to personnel has increased by roughly 66 percent from fiscal year
    1990 to fiscal year 2000 as you indicated. There are several factors
    that account for the increase. To begin with, approximately one-third
    of the increase is directly caused by inflation. Second, as we continue
    our efforts to increase efficiency, we have looked hard at many of our
    support functions. Where beneficial, we have either converted military
    endstrengths to civilian or contracted out support functions using O&M
    funding instead of military pay. While providing significant overall
    DOD savings, these conversion actions have a compounding effect on the
    O&M ratio as we reduce military endstrength and increase O&M costs.
    Third, Congress has recently increased the investment/expense criteria
    and approved depot level repair parts to be part of the O&M
    appropriation. These two accounting changes have shifted significant
    funding into O&M versus procurement. Last, we cannot overlook the fact
    that the advanced technology that has enhanced our military capability
    is more expensive to operate and maintain.
        With a decrease in endstrength, numerous military to civilian or
    contract conversions, increased operational commitments, accounting
    changes, and technological innovation, it is not at all surprising that
    O&M expenditures per person have significantly increased. Using more
    accurate indicators of our readiness capability, such as our recently
    decreasing mission capable rates, we can see that our operations and
    maintenance (O&M) accounts have in fact been under-funded in the past
    few years. The increases programmed in the fiscal year 2000 President's
    Budget are critical to preserve our future warfighting capability.
                                  carrier gap
        Question. It has been suggested by some that the decision to re-
    deploy the U.S.S. Kitty Hawk from its home base in Japan to the Persian
    Gulf so that the U.S.S. Theodore Roosevelt could deploy to the Adriatic
    to support operations over Kosovo has left the U.S. and its allies in a
    strategically risky posture in the Far East. It is my impression that
    the re-deployment of the Kitty Hawk was well within the Navy's normal
    planning for response to contingencies. As such it does not represent
    an emergency surge in carrier-based air power.
        Please comment on the quantity of additional carrier-based air
    power that the U.S. possesses that could surge to any emergency in the
    Far East and on the quantity and quality of land-based air power
    available in the Far East region from U.S. forces based in the region
    and from our allies?
        Answer. Navy planning policy directs the resourcing for contingency
    operations from forward deployed assets. Consistent with this policy,
    the Theodore Roosevelt was re-deployed to support Operation Noble Anvil
    while the Kitty Hawk battlegroup was re-deployed to the Arabian Gulf.
    The latter re-deployment created a carrier battlegroup (CVBG)
    ``presence gap'' in the Western Pacific. The Constellation (CV-64)
    battlegroup deploys from San Diego on 18 June and will fill the ``gap''
    when they arrive in the Western Pacific.
        To bridge the ``presence gap'' and to mitigate any risk incurred by
    the absence of a CVBG, Navy maintained 10 surface combatants and 4
    attack submarines in the Western Pacific with over 300 Tomahawk Land
    Attack Missiles on hand. Navy further maintains two CVBGs ready to
    deploy on 96 hours from the United States (one on the East Coast and
    one on the West Coast). The Constellation has been on 96 hour alert
    prior to the Kitty Hawk group movement. When the Constellation group
    deploys, another CVBG will assume the 96-hour ready for sea posture. A
    third carrier battle group will be ready to deploy within 30 days.
        Each carrier battlegroup deploys with a notional number of six
    surface combatants, two submarines, a replenishment ship, the carrier,
    and the embarked airwing. The forces are deployed ``ready for combat''
    and maintain their qualifications throughout the deployments. Recent
    operations have continued to validate the force's readiness by
    conducting combat operations within hours of arriving on scene. As
    described above, carrier-based airpower available for surge to any
    emergency in the Far East will arrive combat ready.
        [Deleted.]
        Our allies in the region possess capable combat aircraft that are
    variants of our F-15s and F-16s. Japan has 204 F-15Js, 32 F-2s (similar
    to our F-16) and 110 P-3 maritime patrol aircraft. South Korea has
    numerous aircraft, including 120 F-16C/Ds.

                              subcommittee recess

        Senator Stevens. We will recess. We are going to have the
    last meeting on this bill for this year on Friday, the 14th, to
    hear testimony from the public on all matters before the
    subcommittee.
        Thank you very much.
        [Whereupon, at 12:05 p.m., Tuesday, May 11, the
    subcommittee was recessed, to reconvene at 10 a.m., Friday, May
    14.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                              FRIDAY, MAY 14, 1999

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:15 a.m., in room SD-192, Dirksen
    Senate Office Building, Hon. Ted Stevens (chairman) presiding.
        Present: Senator Stevens.

                           NONDEPARTMENTAL WITNESSES

    STATEMENT OF DR. JANICE H. LAURENCE, AMERICAN
                PSYCHOLOGICAL ASSOCIATION

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. My apologies. We did not know these votes
    would go on. They should have started at 9:30, but they are
    just starting now, and there will be another vote in a few
    minutes. We might as well take 20 minutes and I will go right
    before the end of the second vote, but I do welcome you all as
    witnesses.
        Twenty-six separate witnesses indicated they wanted to
    testify or submit statements for the record. That is a fairly
    large number for this morning. I do have to request that you
    limit your statements, I hope to not more than 5 minutes each.
    All of the statements you present to us today will be printed
    in the record, and I assure you the staff does look them over
    and calls them to our attention, Senator Inouye and me, the
    ones that they think should have an impact on our deliberations
    here for the defense bill for this year.
        I do thank you all for your interest, and I appreciate your
    willingness to participate in the work of the committee. I
    assume you all have the schedule of how you are going to
    appear, and we will, I hope, work through this. It has been an
    interesting week for us. We did complete our supplemental last
    night, after several nights of session, as you probably know,
    and so our first witness is Janice Laurence of the American
    Psychological Association. I do appreciate your appearance.
    Thank you, ma'am.
        Dr. Laurence. Good morning, Senator. My name is Dr. Janice
    Laurence, and I am speaking on behalf of the American
    Psychological Association (APA). APA has more than 159,000
    professional members and associates, many of whom conduct
    behavioral research relevant to the military. In the written
    testimony I have submitted I have described the pressing need
    to maintain the Department of Defense's (DOD) funding for
    human-oriented research in fiscal year 2000.
        Psychological research today can and does address the most
    critical issue facing our Armed Services, maintaining readiness
    in an ever-changing national security climate by providing
    policy relevant data on personnel selection and assignment,
    skills training, human machine interface design, and efficient
    and safe operation of complex systems.
        In the months prior to our immediate involvement in Kosovo,
    senior Pentagon officials had identified serious concerns about
    the recruitment and retention of qualified personnel,
    particularly in the Air Force. High tech weapons are useless
    without human resources--the people who operate and maintain
    the equipment and risk their lives engaging in a myriad of
    missions--war-fighting, peacekeeping and humanitarian
    assistance at home and abroad.
        The linchpin of those sorties over and around Kosovo is not
    the impressive F-15's but rather the proficient pilots,
    navigators, mechanics, crews, and other support personnel. The
    fact that our forces are unparalleled should not lead us to
    forego conducting research with the aim of further improving
    the preparedness and well-being of our soldiers, sailors,
    airmen and marines. Contributions from research on manpower
    personnel, training, human factors, cognitive science, and
    other areas have been critical to sustaining our combat
    superiority.
        Results of this research reflect a huge return on an
    extremely modest monetary investment. At a time when Federal
    support for nondefense research is growing, APA has real
    concerns about declining federal support for defense research,
    especially human-oriented behavioral research.
        Relative to its spending on hardware and personnel, DOD
    spends an appallingly small amount of research that helps the
    services more effectively select and assign new recruits and
    train personnel to use the expensive new equipment Pentagon
    officials are requesting.
        Behavioral research is at a particular disadvantage in the
    current decisionmaking atmosphere, which favors easily
    identifiable research products such as new hardware. The fact
    that behavioral research can determine whether personnel will
    be able to use that hardware is not obvious until something
    goes wrong.
        With the help of this subcommittee, the recent decline in
    spending on basic research has been temporarily slowed. We now
    need your help again. I would like to highlight two main issues
    of relevance to the subcommittee, the need to immediately
    reprogram fiscal year 1999, mandated funds for the Army
    Research Institute, and the Air Force Research Lab, and a
    particularly urgent situation regarding the Air Force's fiscal
    year 2000 applied research budget.
        Although the Air Force's own scientific advisory board
    recently identified people as one of six capability areas vital
    to future performance, its priority status is not reflected in
    the Air Force's funding for people-oriented research.
        We are extremely concerned about the significant cuts
    anticipated for development work, especially the planned
    elimination of the Armstrong Lab at Brooks Air Force Base in
    fiscal year 2000. The cut is extremely shortsighted. The work
    being done there will provide the knowledge base needed to
    address tomorrow's formidable Air Force manpower and personnel
    and training problems, particularly at this time when the Air
    Force transitions to a highly mobile air expeditionary force.
        Elimination of this program will have a profound negative
    impact on force capability and readiness. The planned
    elimination of the Armstrong Lab is even more striking, given a
    congressional mandate to restore funding to the lab after an
    initial cut was proposed by the administration in fiscal year
    1999.
        To date, the millions of dollars restored by Congress for
    use by both the Air Force Research Lab and the Army Research
    Institute with the help of this subcommittee have not been
    reprogrammed by DOD. We urge the subcommittee to direct DOD to
    immediately reprogram these fiscal year 1999 funds. We also
    urge you to support the administration's request for basic 6.1
    research in fiscal year 2000 Air Force budget to increase the
    6.2 research budget by restoring it to its fiscal year 1998
    level of $43.052 million, and to increase funding for 6.3
    research by restoring it to its fiscal year 1999 level of
    $6.595 million.

                               prepared statement

        APA asks the subcommittee to use these additional funds to
    continue the work of scientists at the Armstrong Laboratory at
    another location, if necessary.
        Senator Stevens. Thank you very much. We will look into
    that. I do appreciate your testimony.
        [The statement follows:]
                Prepared Statement of Janice H. Laurence, Ph.D.
        My name is Janice Laurence, Ph.D., and I am speaking here on behalf
    of the American Psychological Association (APA). APA is a professional
    and scientific organization of 159,000 members and associates, many of
    whom conduct behavioral research relevant to the military. This
    statement addresses two main issues of relevance to the Subcommittee:
    the continuing need to invest in psychological research in the
    Department of Defense; and the particular need to sustain support for
    the human systems programs in the Air Force, both by reprogramming
    fiscal year 1999 mandated funds and by restoring cuts to the applied
    research budgets requested by the Administration for fiscal year 2000.
        Our military faces a host of current challenges around the world,
    including renewed hostilities, the emergence of non-traditional
    conflict situations, new peace-keeping missions, increased operational
    tempo and longer deployments for military members, at the same time
    that forces are downsizing and facing critical recruitment and
    retention problems. In addition, the sophistication of weapons and
    information technology has dramatically changed the skills required of
    military personnel. What hasn't changed is that success in military
    operations still depends on people--at every level, in every unit. We
    simply cannot afford to let hardware and software get too far ahead of
    the ``humanware.''
        Behavioral research can and does address many of these issues,
    although its relevance and contributions often have been less widely
    publicized than advances in military hardware. DOD's support of
    psychological research dates from WWII, when the efficient testing and
    classification of new recruits was critical to the rapid buildup of
    U.S. forces after Pearl Harbor. Today, psychological research can
    address the most critical mission issue facing our armed services--
    maintaining readiness in an ever-changing national security climate--by
    providing policy-relevant data on the selection and assignment of
    personnel, skills-training, design of the human-machine interface, and
    efficient and safe operation of complex systems.
                                the rdt&e budget
        In the months immediately prior to our involvement in Kosovo,
    senior Pentagon officials speaking before this Subcommittee and those
    of the Armed Services Committees had already identified serious
    concerns about military hardware needs and the recruitment and
    retention of qualified personnel, particularly in the Air Force. High-
    tech weapons and systems are useless without human resources--the
    people who operate and maintain the equipment and risk their lives
    engaging in a myriad of missions--warfighting, peacekeeping and
    humanitarian assistance, at home and abroad. The lynchpin of those
    sorties over and around Kosovo is not the impressive F-15s, but rather
    the proficient pilots, navigators, mechanics, crews and other support
    personnel. The fact that our forces are unparalleled should not lead us
    to forego conducting research with the aim of further improving the
    preparedness and well-being of our soldiers, sailors, airmen and
    Marines.
        At a time when federal support for non-defense research and
    development is growing, APA has real concerns about declining federal
    support for defense research, especially human-oriented, behavioral
    research. Relative to its spending on hardware and personnel, DOD
    spends an appallingly small amount on the research that, for example,
    helps the services more effectively select and assign new recruits, and
    train personnel to use the expensive new equipment Pentagon officials
    are requesting. Behavioral research is at a particular disadvantage in
    the current decision-making atmosphere, which favors easily
    identifiable research ``products,'' such as new hardware; the fact that
    behavioral research can determine whether personnel will be able to use
    that hardware is not obvious until something goes wrong.
        Maintenance of DOD's technology base must include 6.1 (basic), 6.2
    (exploratory development) and 6.3A (advanced development) research on
    manpower, personnel selection, training, human factors, cognitive
    science, and other areas of behavioral research. These contributions
    have been critical to sustaining our combat superiority. They have been
    possible only because the services have maintained closely coupled 6.1,
    6.2, and 6.3A research programs on key human resources, training, and
    human factors issues. With systems growing more sophisticated and
    demands on the human operator more complex, we can ill afford to cut
    back on the research that is necessary to preserve our ``combat edge.''
        With the help of this Subcommittee, the recent decline in spending
    on basic, 6.1 research has been temporarily slowed. Right now we see
    the fruits of research conducted in the late 1970s through the 1980s,
    when support for DOD research was expanding. Even in the absence of a
    high growth rate, it is important to retain DOD's capacity to respond
    to future needs. More than ever, careful and prudent planning for
    future defense needs must be done. With the support of this
    Subcommittee, U.S. leadership in crucial areas of behavioral research--
    in the service laboratories and in the nation's universities--will be
    assured.
                    the military behavioral science programs
        The Army, Navy, and Air Force each support basic psychological
    research to meet their particular mission needs. The services have been
    directed by Project Reliance to cooperate in order to eliminate
    unnecessary duplication of research efforts and actively share research
    results.
    Air Force Office of Scientific Research (AFOSR)
        APA urges the Subcommittee to support the Administration's request
    for $13.212 million for basic (6.1) research in the fiscal year 2000
    DOD budget for the Air Force.
        APA urges the Subcommittee to direct the Air Force to immediately
    reprogram fiscal year 1999 funds previously mandated to restore cuts
    made to the Armstrong Laboratory at Brooks Air Force Base. For fiscal
    year 2000, APA urges the Subcommittee to increase the amount requested
    by the Administration for the Air Force's 6.2 research by restoring it
    to its fiscal year 1998 level of $43.052 million, and to increase
    funding for 6.3 research to restore it to its fiscal year 1999 level of
    $6.595 million. APA also urges the Subcommittee to direct the Air Force
    to use these additional funds to continue the work of scientists at the
    Armstrong Laboratory, at another location (such as Wright-Patterson Air
    Force Base) if necessary.
        AFOSR funds basic research both in the Air Force laboratories and
    through grants to academic institutions and other contractors. The Air
    Force laboratories compete for these funds through the submission of
    research proposals that are evaluated in competition with proposals
    from the civilian sector. This ensures that the best and most relevant
    research is funded. The Air Force Scientific Advisory Board's New World
    Vistas report recently identified six ``capability areas'' which are
    seen as vital to the Air Force's future performance. One of these six
    areas is ``People;'' unfortunately, its priority status is not
    reflected in the Air Force's funding plans.
        We are extremely concerned about the significant cuts anticipated
    for development work, especially the planned elimination of the
    Armstrong Laboratory at Brooks Air Force Base in fiscal year 2000. This
    laboratory is responsible for developing the products that flow from
    manpower, personnel, and training research in the Air Force, products
    which are relevant to an enormous number of Air Force mission needs,
    ranging from weapons design, to improvements in simulator technology,
    to improving crew survivability in combat, to faster, more powerful,
    and less expensive training regimens.
        This fatal cut is short-sighted in the extreme. The work being done
    at the Armstrong Lab is the only research being done anywhere today
    that will provide the knowledge base needed to address tomorrow's
    formidable Air Force manpower, personnel and training problems,
    particularly at this time when the Air Force transitions to a highly
    mobile Air Expeditionary Force. We know there will be new skill
    requirements, that force diversity will increase, that downsizing will
    continue, that the demand for distributed training will increase, that
    there will be new system design requirements, and that the very nature
    of warfare will continue to change. You have heard recently from senior
    Pentagon officials of their intentions to make substantial use of
    written tests and assessment procedures in addressing recruitment and
    retention problems; the Armstrong Laboratory is largely responsible for
    designing, modifying and analyzing results of these assessment
    procedures for all branches of the military. Elimination of this
    program will assure that the people of the Air Force will not be
    prepared for the multiple challenges ahead, and failure to sustain this
    investment will have a profound impact on force capability and
    readiness.
        The planned elimination of the Armstrong Laboratory is even more
    striking given a Congressional mandate to restore funding to the
    Laboratory after an initial cut was proposed by the Administration in
    fiscal year 1999. Last year, the Administration requested only $3
    million in funding for the Air Force Manpower, Personnel, and Training
    Research Program and the Air Force Research Laboratory, but Congress
    mandated that the program maintain its 1998 funding level of $11
    million. Unfortunately, the mandate for restoring those funds (and
    others for the Army behavioral research program) apparently was
    sufficiently unclear to allow the Department of Defense to divert the
    money to other defense programs. To date, those funds have not been
    reprogrammed, and as a result, commitments to provide research products
    (including those to other branches of the military under Project
    Reliance) are not being honored.
    Army Research Institute for the Behavioral and Social Sciences (ARI)
        APA is grateful for this Subcommittee's leadership in restoring
    funds to the Army Research Institute in fiscal year 1999, although they
    have not yet been reprogrammed for ARI. Last year's anticipated cuts
    would have crippled ARI's research capabilities. We urge the
    Subcommittee to fund ARI at the requested level of $21.882 million in
    fiscal year 2000.
        About half of the Army's budget, some $45 billion, is spent on
    personnel. But less than $18 million is now spent on research to help
    those personnel work more effectively. It appears shortsighted to
    invest such a disproportionately small amount in the Army's human
    resources. ARI works to build the ultimate smart weapon: the American
    soldier. And its efforts deserve your support.
        ARI was established to conduct personnel and behavioral research on
    such topics as minority and general recruitment; personnel testing and
    evaluation; training and retraining; and leadership. Reliable data
    about these issues is critical, as you know from today's headlines.
    While the Army seeks to solve the problem of sexual harassment within
    its ranks and establish workplace ethics and procedures that bring out
    the best from a diverse workforce, good data collected for the Army
    from scientists who understand how the Army works, will help the Army
    plan and execute reasonable policies.
        ARI is the focal point and principal source of expertise for all
    the military services in leadership research, an area critical to the
    success of the military. Research that helps our armed forces identify,
    nurture, and train leaders is critical to their success. ARI also is
    interested in investigating how particular aspects of Army culture and/
    or larger societal issues influence recruitment, retention, morale and
    performance.
    Office of Naval Research (ONR)
        APA urges the Subcommittee to support the Administration's fiscal
    year 2000 request for ONR. The request would fund 6.1, 6.2 and 6.3
    behavioral research at a level of $50 million.
        The Cognitive and Neural Sciences Division (CNS) of ONR supports
    research to increase the understanding of complex cognitive skills in
    humans; aid in the development and improvement of machine vision;
    improve human factors engineering in new technologies; and advance the
    design of robotics systems. An example of CNS-supported research is the
    division's long-term investment in artificial intelligence research.
    This research has led to many useful products, including software that
    enables the use of ``embedded training.''
        Many of the Navy's operational tasks, such as recognizing and
    responding to threats, require complex interactions with sophisticated,
    computer-based systems. Embedded training allows shipboard personnel to
    develop and refine critical skills by practicing simulated exercises on
    their own workstations. Once developed, embedded training software can
    be loaded onto specified computer systems and delivered wherever and
    however it is needed. Embedded training is particularly valuable for
    the Navy because Naval personnel are often required to maintain high
    proficiency and readiness levels during lengthy, uneventful deployments
    at sea--far from land-based training facilities.
                          summary and recommendations
        We support the Administration's fiscal year 2000 requests for the
    Army and Navy behavioral research programs, but we urge you to increase
    the Air Force's funding for applied, human-oriented research in order
    to continue the vital work of the Armstrong Laboratory, wherever this
    work can be efficiently conducted. APA also recommends that Congress
    direct and fund the Pentagon to reexamine how the services make
    decisions about human-related research in order to more effectively
    coordinate their behavioral research programs.
        More immediately, APA asks this Subcommittee to intervene quickly
    to direct the Pentagon to reprogram fiscal year 1999 funds previously
    mandated for use by AFOSR and ARI.
        It is sometimes easy to overlook the important contributions of
    behavioral research to the missions of the Army, Navy and Air Force
    because the results usually do not translate directly into new weapons
    systems or hardware. Yet behavioral research has provided and will
    continue to provide the foundation for tremendous savings through
    increased personnel efficiency and productivity. This work is vital to
    the military for identifying critically needed improvements in human
    resources development, training and human error reduction.
        Increasing demands for qualified recruits place huge demands on the
    military to more efficiently target and train personnel; increasingly
    sophisticated weapons systems place more, not fewer, demands on human
    operators. We must ensure that military personnel are as well prepared
    as their machines to meet the challenge. Our servicemen and women
    deserve no less from us. This is not possible without a sustained
    investment in human-oriented research.

    STATEMENT OF DR. DAVID JOHNSON, EXECUTIVE DIRECTOR,
                FEDERATION OF BEHAVIORAL, PSYCHOLOGICAL AND
                COGNITIVE SCIENCES
        Senator Stevens. Dr. David Johnson.
        Dr. Johnson. Mr. Chairman, Congress has long been
    instrumental in preserving human-centered research in the Army,
    Navy, and Air Force. Two years ago, the Army planned to abolish
    the Army Research Institute and you prevented it. Last year,
    the Air Force planned to close down applied training and
    personnel research at the Air Force Research Laboratory, but
    you restored funding.
        Unfortunately, as my predecessor just pointed out, that
    money has not been reprogrammed, despite its having been
    appropriated, and the Air Force is proceeding with its plan to
    end the research this fiscal year, so I have to plead with you
    to prevail on the Pentagon to do the reprogramming and get the
    funds where they need to be. That would require returning the
    money to the fiscal 1997 level of $11.36 million, with $9.952
    million going to 6.2 and the remainder to 6.3 research.
        The endangered research is important not only to the Air
    Force, but also to science. For example, for nearly four
    decades the laboratories maintained a cognitive science data
    base containing skill and aptitude data on all who have entered
    the Air Force during those decades. That data base is a
    priceless tool for understanding human cognitive processes. No
    other data set in the world is as complete, or extends over as
    long an unbroken period of time. It can never be replaced, and
    losing it would be a tragedy for science.
        Human-centered research has struggled for existence within
    the Armed Services largely because its benefits are taken for
    granted. If personnel perform their jobs well, then
    decisionmakers in the various commands have no need to consider
    how their people learn to do those jobs, so when they make
    their budget recommendations human-centered research takes a
    distinct back seat to hardware needs. The result is that DOD is
    requesting $75.4 billion to pay personnel cost in 2000, but
    only $127 million for research to see that the personnel can do
    their jobs. That is a little more than a tenth of a cent for
    human-centered research for every dollar spent on personnel, a
    meager investment by any standard.
        For those who serve in the Armed Forces and for our own
    well-being we suggest that human-centered military research has
    to be placed on a more solid footing. Critical as your
    interventions have been in keeping these basic and applied
    research programs going, constant crisis should not be their
    normal state. To begin moving towards stabilization, we ask you
    to allocate $500,000 to the Pentagon's Defense Committee on
    Research, to assess the current situation, and to develop a
    plan for strengthening human-centered basic and applied
    research.
        I should note that since my written statement was prepared
    and delivered to you I have been in contact with program
    officers at the National Academy of Sciences and have been told
    that $500,000 would fund an adequate review. That is greater
    than the amount that was mentioned in the original written
    statement and I have sent a correction in.
        Let me close by outlining the funding levels we recommend
    for human-centered military research in fiscal year 2000. The
    administration asks $55.132 million for the Air Force. We
    recommend $66.492 million, which would restore funding for the
    programs now being cut.
        For the Neural Science and Technology Division of the
    Office of Naval Research the administration now asks $50
    million. We recommend $50.2 million, which would eliminate a
    cut to the 6.3 program.
        Likewise, the administration asks $21.882 million for the
    Army Research Institute, and we recommend $22.796 million,
    again to restore cuts.

                               prepared statement

        These restorations would not amount to new money. They
    would just limit the losses in the ability to buy research to
    inflationary changes.
        I thank the subcommittee for the opportunity to express
    these views.
        Senator Stevens. Thank you very much, doctor.
        [The statement follows:]
                   Prepared Statement of David Johnson, Ph.D.
        Mr. Chairman, members of the Subcommittee, my name is David
    Johnson. I am executive director of the Federation of Behavioral,
    Psychological, and Cognitive Sciences. The Federation is comprised of
    18 scientific societies and approximately 100 university graduate
    departments. Our scientists conduct behavioral research with a broad
    array of applications, not the least of which is national defense.
    Today I will speak with you about the administration's fiscal year 2000
    request for such research in the Army, Navy, and Air Force.
    Increases in Operations and Maintenance Should Not Come at the Expense
            of Research
        This testimony comes at time when each of the armed services is
    choosing to put major resources into operations and maintenance because
    there is an immediate need to do so. Unfortunately, it also appears
    that some of these resources are going to come from significant
    reductions in military commitment to research and development. While it
    is clear enough that operations and maintenance have not been
    sufficiently funded in recent years, to make up that deficit in part by
    turning away from direct support of research is a precipitous step
    whose adverse consequences will be felt for decades. It is a step so
    serious that we believe Congress should act in the best interest of the
    country's citizens to see that the step is not taken.
        Military support of behavioral and social science research is of
    most concern to the scientists for whom I speak, but the arguments I
    will make today apply not solely to such research. They have to do with
    how the longstanding partnership of science and defense has been
    essential to protection of our citizens and why reducing the closeness
    of that partnership in favor of buying ``off the shelf'' science-based
    products from the civilian sector is going to undermine the capability
    of the country to produce science-based products for both the military
    and civilian use.
        For many years, the House and Senate National Security and Defense
    Appropriations Subcommittees have rescued from extinction research
    aimed at improving the performance of those who serve in the armed
    forces. Two years ago, you saved the Army Research Institute. In this
    fiscal year, you restored funding for applied training research at the
    Air Force Research Laboratory. Despite your effort, it appears at this
    point that the Air Force will not use the funds as you intended.
    Instead, our understanding is that these research programs will be
    abolished during this fiscal year unless you take further action
    quickly and follow that action with restoration of funds for fiscal
    year 2000.
    Cuts for Air Force Training and Personnel Research Are a Particular
            Concern
        We strongly believe these programs are essential to assuring high
    quality performance from those in the Air Force because they provide
    the means to adapt personnel rapidly and effectively as missions,
    equipment, and skill requirements change. We also know that the
    research those at the Air Force Research Laboratory have conducted, and
    the cognitive data they have gathered and preserved over the past four
    decades, have played indispensable roles in advancing the science of
    human cognition. Both functions are so important that taking action to
    save the programs is necessary and warranted.
        We, therefore, urge you to do everything you can to save these
    research programs in this fiscal year and to stabilize their funding at
    productive levels in fiscal year 2000. We thank you for supporting
    human-centered military research in the past, and we also thank you for
    whatever you can do now to again rescue the endangered Air Force
    personnel and training applied research programs. At the same time,
    this long pattern of research cuts by one or another armed service and
    restorations by Congress needs desperately to be replaced by a
    rational, coordinated, and empowered process for assessing present and
    future knowledge and product needs related to military human resources
    and for allocating funds sufficient to meet those needs.
    Human Resource Related Research Support Needs Stabilization and
            Improvement
        We ask that you help the services, in cooperation with the
    Pentagon, to develop such a process by providing funds to, and
    instructive report language for, the Pentagon's Defense Committee on
    Research to undertake a formal assessment and evaluation of current
    decision making practices regarding 6.1 through 6.5 behavioral,
    cognitive, neural, and social science research and research funding.
    The assessment should include an evaluation of strengths and weaknesses
    in the current system and options both for addressing specific
    weaknesses and for improving the system overall. And we recommend that
    the results of the assessment be forwarded to the House and Senate
    appropriating and authorizing committees as well as to the Secretary of
    Defense, the Joint Chiefs of Staff, and the White House Office of
    Science and Technology Policy by the time the President submits his
    fiscal year 2001 budget to Congress.
        We have the whole history of national defense to tell us that
    change is a constant. The same history tells us that the nations that
    anticipate, or even drive, change, and make provision to adapt, are the
    ones most successful at defending themselves. Research is the key to
    controlling change as well as adapting to it.
    A Comparison of Research Budgets to Other Defense Expenditures
        The 6.1, 6.2, and 6.3, or basic, applied, and exploratory
    development research budget request for fiscal year 2000 is $7.4
    billion, a $405 million, or 5.2 percent decrease from fiscal year 1999.
    It accounts for about 2.8 percent of the total DOD request. This means
    that of the $34.4 billion requested by the administration for all
    military research, development, testing, and evaluation, only about one
    fifth would go to research with the remaining $27 billion going to
    development, testing, and evaluation. This less-than-three-cents on
    every dollar is the DOD investment in future preparedness.
        Within that $7.4 billion, the request for human-centered research
    is $127.014 million, a little less than two cents of each 6.1 through
    6.3 research dollar. That works out to less than five ten thousandths
    of each DOD dollar being spent on research to improve the performance
    of its personnel. The fiscal year 2000 request to pay personnel costs
    is $75.437 billion, meaning that for every dollar DOD spends on
    personnel, it spends a little more than a tenth of a cent on research
    to see that those personnel will be able to do their jobs well. We
    think that 2.8 cents on the dollar for all 6.1, 6.2, and 6.3 research
    and .00047 of a cent for personnel-related research is not enough to
    prepare the armed forces for the future. That is why we are alarmed by
    the administration's requested $405 million cut for research.
    A Sample of Achievements Enabled by DOD Support of Human-Centered
            Research
        Let me try to give you a flavor for the human-centered research
    that is carried out by the Defense Department. Military supported
    behavioral and social science research has covered a diverse set of
    topics including adapting training techniques to the changing skill
    levels of new recruits, organizational research to understand how to
    downsize without critical losses in effectiveness, sociological
    research to understand essential differences in the nature of
    peacekeeping versus war fighting preparedness, development of voice
    recognition technology, development for robotic applications of
    computer circuitry that imitates processes in the human brain,
    development of signal detection techniques that allow identification of
    submarines through their sound signatures, development of simulators
    for training tank and aircraft crews and air traffic controllers,
    development of embedded training devices that allow sailors to sharpen
    their expertise while at sea using the same equipment they would
    operate in battle--and this list just scratches the surface.
    What Has Been Gained? What Would be Lost?
        The net result of almost a century of behavioral and social science
    research has been a national defense community with the ability to
    adapt quickly and effectively to changing mission requirements, armed
    services personnel whose initial skills are assessed precisely, and
    whose specialized training is tailored to individual strengths and
    weaknesses to assure a high level of skill acquisition in a short
    amount of time. The research has also increased the safety of those in
    uniform by enabling earlier identification of enemy locations,
    improving methods for communicating critical information, improving the
    usability of equipment, identifying and correcting life-endangering
    design flaws in equipment, replacing humans with ``smart'' machines
    wherever possible, and by producing the scientific knowledge to improve
    teamwork and group effectiveness. Behavioral and social science
    research has also saved a great deal of money. For what has always been
    a modest research investment, human lives have been saved, planes and
    helicopters that would have crashed have not crashed, submarines that
    could have been destroyed by undetected enemies have not been
    destroyed.
    The Role of Behavioral Research in DOD and the Role of DOD in
            Sustaining Science
        These products of behavioral and social science research were not
    produced instantly. They came at the end of a process. First, military-
    supported basic research yielded new understanding of fundamental
    phenomena. That knowledge enabled advanced applied research which, in
    turn, led to prototypes that were tested and refined until, at last,
    the products that met military needs were perfected. This has not been
    a dispensable process. The products could not have been produced
    without the process. Moreover, the process is iterative. Product
    improvements and adaptations to changing needs can happen because the
    military has supported continuing basic research that yields new
    knowledge that makes the improvements and adaptations possible. For
    some products, that cycle of knowledge generation and innovation can be
    traced back over nearly a century of military support of research.
        One other point is necessary to make about military support of this
    research, development, and application process. It is that military
    support has been as indispensable to the development of behavioral and
    social science as it has been to meeting military needs. DOD support
    has been instrumental in creating or sustaining many areas of research.
    The multidisciplinary field of judgment and decision making research
    grew out of DOD support. DOD has been a major player in the growth of
    cognitive science and neuroscience. DOD support enabled the development
    of signal detection theory which has had wide application in both the
    military and civilian sectors. Development of the field of
    psychoacoustics would not have been possible without DOD support. Many
    of the most important advances in teaching and learning research have
    occurred because DOD supported the research. And, again, the list goes
    on.
        Science underpins our economy and our national defense. It is,
    therefore, decidedly within the national interest to support science.
    All of the Federal agencies that fund scientific research are pieces of
    an essential tapestry. Together, these agencies pay for much of the
    basic and applied research that has given the United States its
    economic and its military strength. DOD has been a responsible part of
    that tapestry. But the cuts that are beginning to occur, and that are
    projected to continue, will tear the tapestry of scientific support if
    they are allowed to continue. Each Federal agency has taken
    responsibility for support of areas of science that it is in its
    interest to support. If as important a contributor as DOD cuts back,
    whole areas of science can easily be destroyed, and funding pressure on
    the other agencies in the tapestry will rise tremendously, potentially
    damaging yet other areas of research. The proposed cuts would do grave
    damage to several areas of behavioral research, including cognitive
    science, organizational research, education and training research, and
    human-computer interaction research. It is assumed by some military
    planners that DOD will be able to buy end products whose research and
    development costs it did not support. The fallacy in this assumption is
    that the origin of many of those products can be traced back to basic
    and applied research the military supported for other purposes. Future
    products won't be on the shelf to purchase if DOD moves away from
    support of basic and applied research. We hope you will do everything
    you can to see that DOD support of research does not diminish.
    A Summary of Specific Funding Recommendations
        I will end by making some specific recommendations regarding
    funding levels for human-centered research. We would like to see
    $50,000 allocated to the Defense Committee on Research to assess
    processes and recommend improvements for support of behavioral,
    cognitive, neural and social science research across the services. The
    failure thus far in Fiscal 1999 of the Air Force to use funds assigned
    by Congress to preserve personnel and training research at the Air
    Force Research Laboratory needs to be rectified. Then, to assure that
    the programs can function in fiscal year 2000, $9.592 million would
    need to be restored to the 6.2 budget bringing it to $46.685 million,
    and $1.768 million would need to be restored to the 6.3 budget,
    bringing it to $6.595 million. Those restorations would allow manpower,
    personnel and training, crew technology, and advanced training and
    force management research to continue. For 6.1 Air Force behavioral
    research, we support the administration's requested level of $13.212
    million. Thus, we recommend a 6.1 through 6.3 funding level for
    behavioral research at the Air Force Research Laboratory of $66.492
    million, $11.36 million more than requested by the administration.
        For the Army Research Institute behavioral research programs, we
    recommend $2.708 million for 6.1, $12.071 million for 6.2, $3.913
    million for 6.3, and $4.104 million for 6.5, which the ARI uses for
    research syntheses. The overall administration request for this
    research is $21.882 million. Our recommendation is $22.796 million.
        For the Neural Science and Technology Division of the Office of
    Naval Research, we recommend $16.8 million for 6.1 research, $15.4
    million for 6.2, and $18 million for 6.3. The administration request,
    overall, for these programs is $50 million. Our recommendation is that
    they be funded at the slightly higher level of $50.2 million. That
    figure would maintain 6.3 research at its fiscal year 1999 level. These
    recommendations are summarized in the table below.
        I thank the Subcommittee for this opportunity to speak, and I would
    be happy to answer any questions you might have.

                                  [In millions]
    ------------------------------------------------------------------------
                                             Administration
                                                Request        Recommended
    ------------------------------------------------------------------------
    Defense Committee on Research:          ...............      $50,000
     Assessment of Human-Centered Research
     Support..............................
    Air Force Research Laboratory:
        Program Element:
            PE 0601102F: Project 2313               $13.212           13.212
             (University-Based Basic
             Research)....................
            PE 0602202F:
                Project 1123 (Manpower,               9.041           18.633
                 Personnel, Training).....
                Project 7184 (Crew                   28.052           28.052
                 Technology)..............
            PE 0603227F: Project 2743                 4.827            6.595
             (Advanced Training/Force
             Mgmt.).......................
    Office of Naval Research: Neural
     Science and Technology Division:
        Program Number:
            6.1 (Basic Research)..........           16.8             16.8
            6.2 (Applied Research)........           15.4             15.4
            6.3 (Exploratory Development).           17.8             18.0
    Army Research Institute:
        Program Element:
            61102 (B74F)..................            2.708            2.708
            62785 (A790)..................           12.071           12.071
            63007 (A792)..................            3.030            3.913
            65801 (MM15)..................            2.013            2.027
            65803 (D730)..................            2.060            2.077
    ------------------------------------------------------------------------

    STATEMENT OF COL. JOHN SHERNER (RET.), CERTIFIED
                REGISTERED NURSE ANESTHETIST, AMERICAN
                ASSOCIATION OF NURSE ANESTHETISTS
        Senator Stevens. Colonel Sherner.
        Colonel Sherner. Good morning.
        Mr. Chairman, thank you for the opportunity to testify
    before this committee today. My name is Colonel John Sherner. I
    am a certified registered nurse anesthetist (CRNA). I recently
    retired from the United States Army with 31 years of service,
    and am a member of the American Association of Nurse
    Anesthetists (AANA), and have served on the AANA's Federal
    Service Committee for 5 years by holding the position of
    anesthesia nurse consultant to the Army Surgeon General. I am
    currently employed as a staff anesthetist at a large university
    hospital level 1 trauma center.
        I am testifying today on behalf of the American Association
    of Nurse Anesthetists, which represents more than 27,000
    CRNA's, including over 600 that serve in the military forces.
        I would ask my written statement be submitted for the
    record. My testimony today will touch on the status of CRNA's
    in the military and how effective utilization of CRNA's can
    result in considerable cost savings for the Department of
    Defense without sacrifice of quality of care.
        I would like to thank this committee for the continued
    support of the efforts of the Department of Defense to recruit
    and retain qualified nurse anesthetists. There has been a
    crying shortage of CRNA providers in the military of recent
    years. Recruitment and retention of CRNA's remains of utmost
    importance in order to assure that our Federal services can
    meet their medical mission. This committee can assist in this
    effort.
        In striving to provide the best possible health care for
    our Nation's military, CRNA's are a critical component. CRNA's
    save the Department of Defense considerable resources without
    any sacrifice in quality of care. Nurse anesthetists, while
    providing the same services as a physician anesthesiologist,
    are far less costly to educate and to retain. Data indicate
    that as many as 10 qualified CRNA's can be educated for the
    cost of training one physician anesthetist. Cost effectiveness
    means nothing if quality is not present. It is important for
    the members of the committee to know that many studies have
    shown that there are no significant differences in the outcomes
    between the two health care providers. Both the providers use
    similar anesthesia training. The differences being that CRNA's
    enter anesthesia training with a nursing background and
    anesthesiologists come from a medical background.
        The military services also save resources by spending far
    less in bonus moneys for CRNA's compared to anesthetists. Nurse
    anesthetists receive only incentive special pay and are
    eligible for board certification pay.
        The American Nurses Association (ANA) thanks this committee
    for its support of the special pay program for CRNA and
    strongly recommends their continuation as an important
    recruitment and retention mechanisms. Physician anesthetists
    received far more types and amounts of bonus money. If nurse
    anesthetists and physicians start training at the same time in
    8 years a nurse anesthetist will receive probably $6,000 to
    $9,000 in special pay, while anesthetists will receive
    approximately $250,000.
        The Department of Defense is providing more cost effective
    providers with effective utilization of anesthesia providers.
    Currently the Army, Navy, and the Air Force are operating in
    most medical troop facilities with approximately two CRNA's to
    every one anesthetist. For many years over several wars and
    conflicts nurse anesthetists have provided quality anesthesia
    care with little or no supervision. Compare that to today, when
    anesthesia is much safer, with sophisticated technology and
    monitors and alarms, and nurse anesthetists are educated at the
    master's degree level.
        CRNA's are being supervised at a much closer ratio of one
    anesthetist to two nurse anesthetists. There is no
    documentation that supports this specific ratio of one
    anesthetist to two nurse anesthetists.

                               prepared statement

        In conclusion, the ANA thanks this committee again for its
    longstanding support of military nurse anesthetists through the
    enactment of incentive special pay and board certification pay.
    The ANA believes that more effective utilization of CRNA's in
    the military is a critical concern, and is an area that can be
    examined for increased cost savings. I thank the committee
    members for their consideration of these issues, and will be
    happy to answer any questions you may have.
        Thank you.
        [The statement follows:]
                       Prepared Statement of John Sherner
        The American Association of Nurse Anesthetists (AANA) is the
    professional association that represents over 27,000 certified
    registered nurse anesthetists (CRNAs) in the United States, including
    over 600 CRNAs in the military services. The AANA appreciates the
    opportunity to provide testimony regarding CRNAs in the military. We
    would also like to thank this committee for the help it has given us in
    assisting the Department of Defense (DOD) and each of the Services to
    recruit and retain CRNAs.
                    current status of crna forces in the dod
        Nurse anesthetists have been the principal anesthesia providers in
    combat areas in every war the U.S. has been engaged since World War I.
    Military nurse anesthetists have been honored and decorated by the U.S.
    and foreign governments for outstanding achievements, resulting from
    their dedication and commitment to duty, and competence in managing
    seriously wounded casualties. In World War II, there were 17 nurse
    anesthetists to every one anesthesiologist. In Vietnam, the ratio of
    CRNAs to physician anesthetists was approximately 3:1. Two nurse
    anesthetists were killed in Vietnam and their names have been engraved
    on the Vietnam Memorial Wall. During the Panama strike, only CRNAs were
    sent with the fighting forces. Nurse anesthetists served with honor
    during Desert Shield and Desert Storm. Military CRNAs continue to
    provide critical anesthesia support to humanitarian missions around the
    globe in such places as Somalia, Haiti and Bosnia.
        In all of the Services, maintaining adequate numbers of active duty
    CRNAs is of utmost concern. For several years, the number of CRNAs
    serving in active duty has consistently fallen short of the number
    authorized by DOD as needed providers. Current statistics on the number
    of active-duty CRNAs for fiscal year 1999 are detailed below:

                                      NUMBER OF ACTIVE DUTY CRNAs--FISCAL YEAR 1999
    ----------------------------------------------------------------------------------------------------------------
                                                                       AUTHORIZATION     INVENTORY       SHORTAGE
    ----------------------------------------------------------------------------------------------------------------
    Army............................................................             245             216             -29
    Navy............................................................             134             125              -9
    Air Force.......................................................             225         \1\ 244         \1\ +19
                                                                     -----------------------------------------------
          DOD Total.................................................             604             585             -19
    ----------------------------------------------------------------------------------------------------------------
    \1\ Projected to decrease to 212 by the year 2001, resulting in a deficit of 13.

                            how crnas save dod money
        The practice of anesthesia is a recognized specialty within both
    the nursing and medical professions. Both CRNAs and anesthesiologists
    (MDAs) administer anesthesia for all types of surgical procedures, from
    the simplest to the most complex, either as single providers or in a
    ``care team setting.'' Patient outcomes data has consistently shown
    that the anesthesia provided by solo CRNAs is of the same high quality
    as that provided by CRNAs who work with anesthesiologists, or that
    provided by solo anesthesiologists. CRNAs and MDAs are both educated to
    use the same anesthesia processes in the provision of anesthesia and
    related services.
        While both types of health care professionals can provide the same
    or similar services, CRNAs cost the military much less to educate and
    to retain. In the first place, it costs the military significantly less
    to educate a CRNA as an anesthesia provider compared to the cost of
    educating an anesthesiologist. Second, a physician draws thousands of
    dollars in additional bonuses that illustrate they are significantly
    more expensive to retain.
    Training costs are less
        The most substantial educational difference between CRNAs and
    anesthesiologists is that prior to anesthesia education, MDAs receive
    medical education while CRNAs receive nursing education. However, the
    anesthesia part of the education is very similar for both providers.
    CRNAs and anesthesiologists are both educated to use the same
    anesthesia processes in the provision of anesthesia and related
    services. However, the cost to educate nurse anesthetists is
    significantly lower than the educational costs for physician
    anesthesiologists. Becoming a CRNA takes an average of 30 months
    additional education beyond the nurse's baccalaureate education, while
    becoming an anesthesiologist takes a minimum of 8 years beyond the
    baccalaureate degree. But if you compare just the cost of the
    anesthesia portion of their educational programs, CRNA education is far
    more cost-effective than physician education. Data from the 1992 AANA
    Council on Accreditation survey of nurse anesthesia programs indicates
    that the average annual program cost per student nurse anesthetists is
    $11,741. The total cost for 30 months of CRNA education would therefore
    be approximately $29,352 ($11,741 per year 2.5 years). According to a
    letter received by AANA from the Health Care Financing Administration
    (HCFA) in 1990, the average annual residency program cost per medical
    resident was $84,837. The total cost for a four-year anesthesiologist
    residency would therefore be approximately $339,400 ($84,837 per year 4
    years). AANA estimates that at least 10 CRNAs can be educated for the
    cost of educating one anesthesiologist. With the shorter training
    period, the 10 CRNAs will each be in practice for several years before
    the one anesthesiologist completes his/her residency.
    Non-MD bonuses are less than physician bonuses
        In addition to the decreased cost of training a nurse anesthetist,
    the bonuses received by CRNAs in the military are significantly lower
    than those received by military physicians.
                The Incentive Special Pay for Nurses
        In the early 1980s, once military CRNAs reached the grade of major
    with 12-14 years service, they could expect their salary and fringe
    benefits to match that of the average employed CRNA in the civilian
    workforce. By the 1990s, due to significant increases in civilian CRNA
    salaries, military pay and fringe benefits were no longer comparable to
    the average employed civilian CRNA. According to a March, 1994 study
    requested by the Health Policy Directorate of Health Affairs and
    conducted by DOD, a large pay gap existed between annual civilian and
    military pay in 1992. This study concluded that ``this earnings gap is
    a major reason why the military has difficulty retaining CRNAs.'' In
    order to address this pay gap, in the fiscal year 1995 Defense
    Authorization bill Congress authorized the implementation of an
    increase in the annual Incentive Special Pay (ISP) for nurse
    anesthetists from $6,000 to $15,000 for those CRNAs who are no longer
    under service obligation to pay back their anesthesia education. Those
    CRNAs who remain obligated will receive the $6,000 ISP. In addition,
    DOD has standardized the payback obligation across all the Services,
    which allowed for fair implementation of this increase.
        AANA thanks this Committee for its assistance in securing this
    increase in the annual ISP. AANA strongly recommends the continuation
    of the annual ISP for CRNAs, which recognizes the special skills and
    advanced education that CRNAs bring to the DOD health care system.
                Board Certification Pay for Nurses
        Included in the fiscal year 1996 Defense Authorization bill was
    language authorizing the implementation of a board certification pay
    for certain non-MD health care professionals, including advanced
    practice nurses. AANA is highly supportive of board certification pay
    for all advanced practice nurses. It is clear that the concept of board
    certification pay comes from the physician model, which was implemented
    as an incentive for physicians to attain the highest level of
    competency and certification. The establishment of this type of pay for
    nurses recognizes that there are levels of excellence in the profession
    of nursing that should be recognized, just as in the medical
    profession.
        While many CRNAs have received board certification pay to date,
    there are many that remain ineligible. Since certification to practice
    as a CRNA does not require a specific master's degree, many nurse
    anesthetists have chosen to diversify their education by pursuing an
    advanced degree in other related fields. But CRNAs with masters degrees
    in education, administration, or management are not eligible for board
    certification pay since their graduate degree is not in a clinical
    specialty. Many CRNAs who have non-clinical master's degrees either
    chose or were guided by their respective services to pursue a degree
    other than in a clinical specialty. Many feel that diversity in
    education equates to a stronger, more viable profession. CRNAs do
    utilize education and management principles in their everyday practice
    and these skills are vital to performance of their duties. To deny a
    bonus to these individuals is unfair, and will certainly affect their
    morale as they work side-by-side with their less-experienced
    colleagues, who will collect a bonus for which they are not eligible.
    In addition, in the future this bonus will act as a financial
    disincentive for nurse anesthetists to diversify and broaden their
    horizons.
        AANA encourages DOD and the respective services to reexamine the
    issue of awarding board certification pay only to CRNAs who have
    clinical master's degrees.
                Comparison to Physician Bonuses
        Even with the implementation of an increased ISP and the addition
    of a board certification pay, CRNAs remain cost effective anesthesia
    providers for DOD. Nurse anesthesia students receive no bonus money at
    all while attending anesthesia school. Then, CRNAs receive only $6,000
    per year in ISP, and an average of $2,500 in board certification pay
    while under payback service obligation for four years. After their
    payback is completed, nurse anesthetists are eligible for a $15,000
    annual ISP bonus, with a continuation of the board certification pay.
    The alternatives to CRNAs, physician anesthesiologists, are eligible
    for four different bonuses. Physicians are eligible for a $5,000 annual
    variable special pay upon entering residency. After their four years of
    residency, they immediately are eligible for an additional $15,000
    special pay, and a $33,000 physician ISP annually. Upon passing board
    certification (usually about 18 months after residency is completed),
    an additional $2,500 in board certification pay is added to the bonus
    total (See Appendix for breakdown of total). All of this bonus money is
    paid to physicians annually while they are still under a payback
    service obligation.
        In the first eight years of service alone, the result is a wide
    disparity in the amount of bonus dollars paid to physician
    anesthesiologists ($253,500) compared to the amount paid to CRNAs
    ($69,000).
       how more effective utilization can save money without sacrificing
                                quality of care
        In light of the fact that it costs less to educate CRNAs, that
    nurse anesthetists draw minimal bonuses compared to physician
    anesthesiologists, and that numerous studies show there is no
    significant differences in outcomes between anesthesia providers, it is
    clear that CRNAs are a cost-effective anesthesia provider for the
    military. From a budgetary standpoint, it is vitally important to
    utilize these high quality, cost-effective anesthesia providers in
    appropriate ratios with their physician anesthesiologist counterparts.
    ``Over-supervision'' is not only unproductive, it is financially
    wasteful and unnecessary.
        During World War II, there were 17 CRNAs for every one
    anesthesiologist (17:1). In Vietnam, the ratio was approximately three
    to one (3:1). Currently the military is operating with much narrower
    ratios of CRNAs to anesthesiologists. As recently as 1997, the Army was
    functioning with two CRNAs to every anesthesiologist (2:1); in the Air
    Force, the ratio was even narrower at approximately 1.6:1; and the Navy
    was at the level of nearly one CRNA for every one anesthesiologist
    (1:1).
        Such practice models are generally unheard of in the private
    sector, even in locations where CRNAs practice with little or no
    autonomy. In most civilian hospitals, the practice ratios run
    approximately 3 or 4 CRNAs to every one anesthesiologist (3-4:1). The
    practice ratios could be increased in military treatment facilities
    from their current levels to a more cost-effective level of 3-4:1, with
    no sacrifice to quality of care.
        The U.S. military services do not require anesthesiologist
    supervision of CRNAs. There are many military medical treatment
    facilities throughout the world which have military CRNAs as their sole
    anesthesia providers, and this practice arrangement has not had a
    negative impact on the quality of anesthesia care. Increasing numbers
    of anesthesiologists in the military has resulted in practice models
    with wasteful practice ratios. There continues to be proposals in all
    Services for increased supervision of CRNAs, with attempts by physician
    anesthesiologists to place unnecessary supervision language into local
    military treatment facility policies which would require strict
    adherence to a practice model of one CRNA to every one
    anesthesiologist.
        A practice model requiring a 1:1 ratio for the provision of
    anesthesia would not only be financially wasteful, but even more
    importantly, the Services would lose mobilization effectiveness by
    requiring two anesthesia providers where autonomous CRNAs have
    previously provided anesthesia safely and effectively for over 100
    years. This military standard is based on the need of the Services to
    provide a wide range of health care with as few providers as necessary
    during mobilization to remote or isolated locations. Historically,
    CRNAs have always worked independently at such locations; therefore,
    there is no basis for requiring supervision of CRNAs when they then
    return to more urban facilities. A predetermined ratio of supervision
    should not become part of the practice environment. The supervision of
    CRNAs should be based on the experience of the anesthesia care
    providers (both CRNA and anesthesiologist), the mission of the medical
    treatment facility, and the complexity and type of surgical procedure.
        The ability to function autonomously in remote locations is
    required of all military CRNAs. It is the promise of this independence
    that draws many to military anesthesia service. Therefore, any attempt
    to adopt an anesthesia practice standard that would require that an
    anesthesia care team consisting of a CRNA and a supervising
    anesthesiologist to deliver all anesthesia would not only undermine
    mobilization effectiveness, but it would also prove detrimental to the
    morale of military CRNAs and would undermine attempts by the Services
    to recruit highly motivated individuals.
        AANA recommends that this Committee direct DOD to maintain the
    mobilization effectiveness of CRNAs by enforcement of the current
    practice standard of autonomous anesthesia care by CRNAs in all
    locations, with practice ratios of 3-4:1. This ratio is more cost-
    effective, with no sacrifice of quality of care.
                                   conclusion
        In conclusion, the AANA believes that retention and the appropriate
    utilization of CRNAs in the Services is of critical concern. There is a
    deficit of 19 CRNAs in fiscal year 1999, with greater deficits
    projected by the year 2001. Many active-duty CRNAs are suffering from
    ineffective practice models. The efforts detailed above will assist the
    Services in maintaining the military's ability to meet its peacetime
    and mobilization medical mission in a cost-effective manner without
    sacrificing quality of care. We thank the Committee for its support of
    CRNAs. For further information, please contact Greta Todd, AANA
    Associate Director of Federal Government Affairs, at 202/484-8400.

        Senator Stevens. Where are the CRNA's trained?
        Colonel Sherner. The Army, Navy, and Air Force all have
    their own separate training programs, but we also recruit in
    the civilian community and also the Uniformed Services
    University of Health Sciences has a training program for nurse
    anesthetists.
        Senator Stevens. Is it your testimony they are training
    more of--what are they called, more than the anesthesiologists?
        Colonel Sherner. No, we are not training more, but there is
    a cost difference between the training of a nurse anesthetist
    and anesthesiologist. We feel the quality of service is the
    same.
        Senator Stevens. I understand that better, and the
    university is turning out these CRNA's?
        Colonel Sherner. I do not understand your question.
        Senator Stevens. Can you get that training through a
    university course?
        Colonel Sherner. Most of them have a university master's
    degree. The Army, Air Force, and Navy all have master's degree
    programs of nurse anesthesia affiliated with the universities
    and civilian communities also have university trained nurse
    anesthetists.
        Senator Stevens. We will look into that. That is very
    interesting testimony. Thank you very much.
        Our next witness is Mike Duggan, and did Reverend Collins
    submit his statement?
    STATEMENT OF MIKE DUGGAN, DEPUTY DIRECTOR FOR NATIONAL
                SECURITY, FOREIGN RELATIONS DIVISION, THE
                AMERICAN LEGION
        Mr. Duggan. Sir, I also for the record am a retired Army
    colonel and deputy director for the American Legion's national
    security foreign relations division here in Washington, DC, and
    as the Nation's largest veterans association the Legion would
    like to express its gratitude to you, Senator Stevens, for
    allowing us the opportunity to present testimony before the
    Appropriations Committee during this stressful period involving
    the fiscal year 1999 emergency supplemental spending bill. We
    commend you and the people you have worked with for your roles
    in that great endeavor.
        As you have indicated, and as you have proven, one of our
    greatest concerns as well at this juncture has been military
    quality of life issues, to include recruiting, retention, and
    also modernization needs of the Armed Forces.
        We believe that military compensation, as we know, has
    fallen behind the private sector, and both the military
    retirement systems and the Montgomery GI bill we believe are
    losing their attractiveness to not only recruit and retain a
    quality force. Undoubtedly operational tempos and deployments
    are also wearing down the men and materiel.
        The Joint Chiefs of Staff have indicated that quality of
    life to include military retirement pay is their top priority,
    and they would like to see it fixed, and we support many of the
    features that were included in the S. 4 package which
    expeditiously went through the United States Senate.
        The redux retirement system we feel should be repealed and
    replaced with a more equitable 50 percent retirement formula at
    20 years. We would also like to see the restoration of full
    cost of living adjustments (COLA), 12 COLA caps in 17 years are
    obviously too many, and continuing the practice has probably
    been a prescription for eventual retention problems.
        We also strongly advocate improving the Montgomery GI bill.
    These enhancements include increasing the monthly GI bill
    allowances for service members who serve more or less than 3
    years, and eliminating the $1,200 annual contribution to $100
    monthly, as well as accelerated payments for personnel in the
    Reserve components.
        As we have previously indicated, we believe that the high
    rate of U.S. troop deployments, particularly over the past 6
    years, has worn down and continues to wear down men and
    materiel. Our military is spread thin. We now have open-ended
    commitments in such places as Bosnia, Haiti, the Sinai, Persian
    Gulf and, of course, our defense agreements in the Far East, as
    well as in Europe.
        In our view, another open-ended commitment in Kosovo could
    well be the proverbial straw that breaks the camel's back, and
    could further erode military readiness and exacerbate
    recruiting and readiness.
        We are fully aware that funding alone, and doing so in 1
    year, will not fix systematic readiness problems, but we
    believe a good start was made, sir, in this supplemental
    defense bill, and the message that that hopefully will send.
        Procurement spending has also been cut over the years. The
    Army and the Marines are flying Vietnam War vintage
    helicopters, and the Air Force is flying, of course, Korean War
    vintage B-52 bombers. We are essentially asking our sons and
    daughters to operate equipment that is older than they are.
        Through our mandates, we strongly believe that the Armed
    Forces are in fact undermanned in light of the numerous
    missions which they are being assigned. Rather than 10 Army
    divisions, sir, we have advocated a minimal force structure
    similar to the base force strategy which was advocated by
    former Chairman of the Joint Chiefs Colin Powell, namely 12
    fully manned Army divisions, adequately manned Navy ships, and
    12 active carrier groups and at least 15 Air Force Fighter
    Wings.

                               prepared statement

        Mr. Chairman, I see I have run out of time, and I would
    like to conclude my statement at this point. Thank you very
    much.
        [The statement follows:]
                       Prepared Statement of Mike Duggan
        Mr. Chairman, The American Legion is pleased to appear before this
    Subcommittee to express its concerns about fiscal year 2000 defense
    appropriations. The American Legion knows only too well what can happen
    when diplomacy and deterrence fail. As history has demonstrated, it is
    important for the President and Congress to continue to uphold their
    constitutional responsibilities to provide for the ``common defense''
    of the American people in a highly uncertain world.
        With the end of the Cold War, the clear and identifiable threat
    posed by communism and the Soviet Union no longer existed. Instead, the
    United States has been faced with a myriad of threats and challenges
    which appear more perplexing, complex and difficult. Serious regional
    threats continue to include those in the Balkans, North Korea and the
    ever-growing threat of the People's Republic of China. A vehemently
    defiant Iraq and Iran pose continuing threats to vital oil reserves in
    the Persian Gulf. Additionally, the United States faces the non-
    traditional threats of increasing nuclear proliferation, development of
    chemical and biological warfare weapons by rogue nations or groups and
    the challenges posed by international terrorism.
        The American Legion has always adhered to the principle that our
    nation's armed forces must be well manned and equipped, not to pursue
    war, but to preserve and protect the hard-earned peace. The American
    Legion also strongly believes the on-going military downsizing has been
    based more on budget targets and budget deficit reduction than on
    current and foreseeable threats to the national security well being of
    the American people and America's vital interests. Mr. Chairman, we
    would agree with Senator Chuck Hagel's statement that ``We are coming
    perilously close to the edge of not being able to continue to defend
    our national interests.'' Once Army divisions, Navy aircraft carrier
    battle groups, and Air Force fighter wings are cut from the force
    structure, they cannot be rapidly reconstituted without the costly
    expenditures of time, money, and human lives. Military recruiting and
    retention of sevicemembers has become problematic in the face of
    declining quality of life features, continued deployments and a robust
    economy.
        This budget continues the shift of funding from defense to
    domestic, social programs. The President's budget for fiscal year 2000
    totals over $1.77 trillion and allocates 15 percent for defense and
    well over 50 percent for social programs and entitlement spending. The
    American Legion believes the Defense budget continues to bear the brunt
    of deficit reduction. The fiscal year 2000 Defense budget continues the
    steady reduction in defense spending and is 40 percent below the 1985
    Reagan budget which led to the end of the Cold War. In 1990, the United
    States was spending 5.1 percent of the gross domestic product on
    defense. The proposed fiscal year 2000 of $267 billion only represents
    2.5 percent of the GDP, less than before the 1941 Japanese attack on
    Pearl Harbor.
        Budgets, force structures and military endstrengths have been
    reduced by about 40 percent from the Cold War 1990 base to 1999: During
    this period, defense budgets declined from being 25 percent of the
    total Federal budget to 15 percent, or from about 5.1 percent of Gross
    Domestic Product (GDP) in 1990 to 3.2 percent in 1997 and to 2.5
    percent in fiscal year 2000. Military manpower has been continually
    reduced from 2.17 million in 1987 to 1.4 million in 1998 and is
    projected to decline even further.
        It was becoming clear that much of the hard-earned Cold War ``peace
    dividend,'' to include the Reagan-era defense budgets and projected
    defense budgeting, would no longer be spent on National Defense but,
    instead, was being shifted to domestic priorities. This peace dividend
    has been estimated to be on the order of $878 billion between fiscal
    year 1989 and fiscal year 2000.
        In 1998, the Army and the Navy both missed recruiting goals, and
    retention of experienced servicemembers, particularly in the Navy, was
    becoming problematical. For the first time ever, the Air Force would
    miss a quarterly recruiting goal. During Congressional hearings in the
    fall of 1998, the Joint Chiefs of Staff stated that the Armed forces
    needed over $150 billion over six years to adequately address
    personnel, readiness and modernization issues. The fiscal year 2000
    Department of Defense budget proposed $12 billion in additional
    spending in fiscal year 2000 and $112 billion in additional resources
    over six years primarily to increase military pay and improve the
    military retirement system.
        The proposed budget supposedly would constitute the first long-term
    increase in defense spending since the end of the Cold War. The added
    $112 billion was to consist of an $84 billion increase over the
    previous year's planned topline and $28 billion in ``savings from lower
    inflation, lower fuel prices, recessions, and other adjustments.'' The
    Chairman of the House Armed Services Committee (HASC) has asserted that
    this budget only contains $4 billion in new money and represented only
    an $84 billion increase over the six-year period. If all of the
    administration's assumed savings from within the budget materialize,
    the six-year plan would still fall more than $70 billion short of
    meeting the Joint Chiefs' requirements. According to the Chairman of
    the HASC, this budget and the next two proposed defense budgets
    represented real declines with no sustained growth until beyond fiscal
    year 2003.
        The American Legion receives letters from veterans citing the
    string of broken promises, and the growing list of benefits under
    attack. Medicare-eligible military retirees and their dependents are
    prohibited from enrolling in the TRICARE program. The TRICARE system
    will require considerable improvement. A Senate bill is again proposing
    the closure of the cost-effective military medical school, the
    Uniformed Services University of Health Sciences; and, again, this
    budget is proposing that a fifth round of base closures be conducted to
    pay for modernization of the Services.
        The American Legion's greatest concerns include quality of life
    issues and recruiting and retention; the steady decline in funding and
    support for the military health care system; and the fact that there
    has been no comprehensive plan to provide care to all 8.3 million
    military beneficiaries. The marked decline in quality of life features
    for the active force and military retirees, coupled with heightened
    operational tempos, could only adversely impact on both recruiting and
    retention. The fact that the military is experiencing recruiting and
    retentions problem comes as no surprise, and funding alone will not
    solve it. The operational tempo and continued deployments must be
    reduced, and military pay must be on par with the civilian sector. If
    these benefits like health care, commissaries, adequate pay and
    quarters all of which were taken for granted in the past, are funded at
    significantly reduced rates, or are privatized or eliminated
    completely, they will only serve to further undermine the United States
    Government's effort to honor its obligations to its active and retired
    warriors.
        In early February 1999, The American Legion held a meeting of its
    Policy Coordination and Action Group (PCAG). This PCAG meeting was
    prompted by Department of Defense and media reports that the armed
    forces were showing signs of difficulty in attracting qualified
    individuals to volunteer for military service and for seasoned
    servicemembers to reenlist. Allied to these issues are the perceptions
    of declining military quality of life features and readiness as well as
    the impact of increased operating tempos and under-resource defense
    budgets on recruiting, retention and readiness.
        What needs to be done? The American Legion recommends, as a
    minimum, that the following steps be implemented:
      --Immediate passage of the provisions of Senate bill S. 4 and House
            equivalent bills, which call for increased military pay raises,
            reformed military pay tables, a revised military retirement
            system, improved benefits under the Montgomery G.I. Bill and
            other quality of life features;
      --Defense spending as a percentage of Gross Domestic Product needs to
            be maintained between 3 and 4 percent annually. At least $160
            billion should be authorized and appropriated over six years to
            address those concerns voiced by the Joint Chiefs of Staff;
      --The Quadrennial Defense Review (QDR) needs to be reevaluated as it
            provides neither the forces nor the defense budgets to fight
            two nearly simultaneous major regional conflicts while also
            conducting peacekeeping operations. The strategy-resources
            mismatch needs to be eliminated;
      --Force modernization for the Services needs to be realistically
            funded and not further delayed or the United States is likely
            to unnecessarily risk American lives in the years ahead;
      --The National Guard and Reserves must be realistically manned,
            structured, equipped and trained, fully deployable and
            maintained at high readiness levels in order to accomplish
            their indispensable roles and missions in our national defense.
                           quadrennial defense review
        Since the collapse of the Soviet Union in 1991, the United States
    has conducted three substantial assessments of the strategy and force
    structures of the Armed Forces necessary to meet the national defense
    requirements of our Country. The assessment by the Bush Administration
    (``Base Force'' assessment) and the assessment by the Clinton
    Administration (``Bottom-Up Review'') were intended to reassess the
    force structure of the armed forces in light of the changing realities
    of the post-Cold War world. Both assessments served an important
    purpose in focusing attention on the need to reevaluate the military
    posture of the United States; but the pace of global change
    necessitated a new, comprehensive assessment of the current defense
    strategy for the twenty-first century.
        The American Legion, in its adopted mandates, continues to support
    the force structure proposed by the Base Force strategy, namely, the
    need for the United States to maintain 12 active Army combat divisions,
    12 Navy aircraft carrier battle groups, 15 active Air Force fighter
    wings and three Marine Corps divisions. The American Legion supports
    the theory behind the two-war strategy which reflects the concern that
    if America were drawn into a war with one regional aggressor, another
    could be tempted to attack its neighbor--especially if it were
    convinced that the United States and its allies were distracted, lacked
    the will to fight conflicts on two fronts or did not possess the
    military power to deal with more than one major conflict at a time.
    Sizing U.S. forces for more than one major conflict would provide a
    hedge against the possibility that a future adversary might mount a
    larger than expected threat. It would also allow for a credible
    overseas presence, which is essential in dealing with potential
    regional dangers and pursuing new opportunities to advance stability
    and peace. The American Legion believes such a strategy, however,
    should be threat-based rather than budget-driven and should employ more
    robust force structures and increased budgeting for quality of life,
    readiness and modernization than that recommended in the Bottom-Up
    Review or its follow-on Quadrennial Defense Review.
                         active force personnel issues
        The American Legion is concerned that a number of influences, to
    include the military drawdown, pose significant--and often
    underestimated--retention and readiness risks for the remainder of the
    decade.
        The speed and depth of the defense drawdown has significantly
    undermined one of the major historical selling features of a military
    career--employment security. In the history of the All-Volunteer Force,
    qualified young enlisted members and officers were actively recruited
    for extended terms of service or full military careers, but the
    situation has radically changed within the past six years. Now, the
    only experience of military members coming to career decision points
    has been the repetitive message that the government which recruited
    them wants them to leave in large numbers.
        In addition, the Department of Defense, aided by the Congressional
    Budget Office and other government agencies, has appeared determined to
    further reduce the quality of life of its servicemembers by reducing
    medical personnel to treat active duty personnel and retirees, less-
    than-inflation pay raises, overhauling housing and subsistence
    allowances, reducing commissary stores and consolidating exchanges and
    the possibility of more base closings.
        Mr. Chairman, The American Legion and the Armed Forces owe you and
    your subcommittee a debt of gratitude for your strong support of
    military quality of life issues. Nevertheless your assistance is needed
    now more than ever. Positive congressional action is needed in this
    budget to overcome old and new threats to retaining the finest military
    in the world. Servicemembers and their families have endured physical
    risks to their well being and livelihood, substandard living
    conditions, and forfeiture of personal freedoms that most American
    civilians would find unacceptable. Worldwide deployments have increased
    significantly, and a smaller force has had to pickup the tempo with
    longer work hours and increased family separations.
        Throughout the drawdown years, military members have been called
    upon to set the example for the nation by accepting personal financial
    sacrifices. Their pay raises have been capped for years, and their
    health care system has been overhauled to cut costs, leaving military
    families with lessened access to proper health care. We congratulate
    the Congress for their quality of life enhancements contained in the
    Fiscal Year 1997 National Defense Authorization Act. But more must be
    done now.
        Now is the time to look beyond the drawdown to the force retention
    needs of the future. Positive congressional action is needed now to
    begin overcoming past years of negative career messages and begin
    countering the renewed attacks on military benefits.
        Full Military Pay Raises.--Since 1982, military raises have lagged
    a cumulative 13.5 percent behind private sector wage growth. The Bureau
    of Labor Statistics measures private sector wage growth with a tool
    called the Employment Cost Index (ECI). Before 1994, federal civilian
    and military raises were supposed to match the ECI. But in 1994, new
    legislation took effect, capping federal civilian raises at one-half
    percentage point below the ECI. The difference was used to fund a ``new
    locality pay'' additive for federal civilians that varied by
    geographical location. When the pay raise standard for federal
    civilians changed to ``ECI minus one-half percent,'' service members
    got stuck with the half-point reduction in their pay raises, even
    though they are not eligible for the civilian locality pay.
        The only way to fix the problem is to change the pay raise process
    to link military basic pay raises to the ECI, the full ECI. The
    military drawdown is about over and the economy is a robust one. A
    smaller force with a high operations tempo will be extremely retention-
    sensitive. Service members have earned and deserve a raise at least
    equal to the average American's for every year not just for one or two
    years. It is time to put that standard into law.
        The Chairman of the Joint Chiefs of Staff stated that the area of
    greatest need for additional defense spending is ``taking care of our
    most important resource, the uniformed members of the armed forces.''
    To meet this need, he enjoined the (congressional) committee members to
    ``close the substantial gap between what we pay our men and women in
    uniform and what their civilian counterparts with similar skills,
    training and education are earning'' and to ``fix the so-called Redux
    retirement system and return the bulk of our force to a retirement
    system that provides 50 percent of the average base pay upon completion
    of 20 years of service.'' Mr. Chairman, 11 pay caps in 15 years are
    already too many, and continuing this practice has been a sure
    prescription for eventual retention disaster. The American Legion also
    strongly believes this subcommittee should exert every effort to
    adequately compensate those hundreds of military families from having
    to rely on monthly food stamps and women's' and infants compensation
    (WIC).
        More and frequent operational deployments, family separations,
    degradation in quality of life--particularly health care, compensation
    and the less attractive Redux retirement system--are acting in synergy
    to make longer careers less attractive.
        What needs to be done? The Chairman of the Joint Chiefs of Staff
    and each of the service chiefs have pointed out the importance of
    returning to the system of 50 percent of basic pay for 20 years'
    service. Several congressional leaders have voiced their support, and
    the momentum for legislative relief is building for action by Congress
    in 1999. The bottom line would require Congress to legislate a return
    to the 50/20 retirement system by authorizing and appropriating
    additional defense dollars and not simply shifting funds from other
    already stretched defense programs.
        Montgomery G.I. Bill Enhancements (MGIB).--While The American
    Legion is supportive of most of the quality of life improvements
    contained in Senate bill, S. 4 and its amendments, it is particularly
    supportive of improvements pertaining to the MGIB. These enhancements
    include increasing the monthly G.I Bill allowance for servicemembers
    who serve for more than or less than three years; eliminating the
    $1,200 contribution ($100 monthly) that each service member must make
    to participate in the G.I. Bill program, as well as accelerated
    payments for personnel who served in the reserve components; allowing
    Select Reservists up to five years from their date of separation to use
    their G.I. Bill entitlements; and allowing veterans to apply their G.I.
    Bill benefits for required testing for admission to institutions of
    higher learning.
        Mr. Chairman, we believe these particular improvements to the MGIB
    offer the incentives and the potential to favorably turn the recruiting
    trend around.
                      dod healthcare for military retirees
        Today, there are approximately 8.5 million beneficiaries in the
    military health care program. Military retirees and their dependents
    make up nearly one half of that number, and over 500,000 retirees have
    lost or will lose their access to military health care as a result of
    the closure of approximately 45 percent of military treatment
    facilities. Access to affordable health care, regardless of age, status
    or location, represents the number one concern among military retirees.
    The Sense of the Congress resolution in the Fiscal Year 1993 National
    Defense Authorization Act reaffirmed the basis of health care promised
    in law and tradition dating back more than 100 years. Until recently,
    military retirees were always led to believe that they were entitled to
    free lifetime health care as a major promise made in exchange for
    meager pay received and after having served 20 or more years in the
    most demanding and dangerous of professions.
        Military retirees are the only group of Federal ``employees'' who
    lose their health care benefits when they become 65 and are no longer
    eligible for CHAMPUS or TRICARE but become Medicare-eligible. Medicare
    covers much less than TRICARE, and must be supplemented by expensive
    health care supplement insurance which many military retirees cannot
    afford. We often tend to forget that the average military retiree is an
    E-6 Staff Sergeant or Petty Officer and not a Lieutenant Colonel.
    Despite its concerns, The American Legion supports full-funding and
    improvement of the TRICARE program, and it strongly believes that all
    military retirees, to include Medicare-eligible military retirees and
    their dependents should continue to have access to military treatment
    facilities. Furthermore, all military retirees and their dependents
    regardless of age, status or location should continue to receive free
    prescriptions from military treatment facilities.
        The American Legion has a number of concerns, however, with the DOD
    TRICARE Health Care System as it affects military retirees, namely,
    that military retirees and their dependents are required to pay annual
    ``registration fees'' and co-payments which are likely to increase over
    time. In addition, questions remain concerning out-of-pocket expenses
    and the viability of Medicare reimbursement for treatment in DOD
    facilities; and TRICARE Prime health care requires both portability and
    reciprocity. Many military retirees do not reside near TRICARE
    providers. The American Legion believes that, as a minimum, the
    following improvements should be incorporated or retained as part of
    the TRICARE package or any reform of military health care for active
    duty families, military retirees and their dependents and military
    survivors:
      --No further military medical facilities should be closed or
            downsized, and military medical personnel, to include graduates
            of the Uniformed Services University of Health Sciences, should
            be retained on active duty to provide health care for active
            duty personnel and their dependents and retired military
            personnel and their dependents. Military medical personnel
            should not be misutilized in other duties.
      --Authorize all military retirees and their dependents the
            opportunity to voluntarily enroll in the Federal Employee
            Health Benefits Program, regardless of age, status or location.
            For this program to be cost effective for the government and
            military retirees, we believe it would have to be offered as an
            option to TRICARE for service members entering retirement.
      --Providing for long-term healthcare.
      --Increase TRICARE reimbursement levels and expedite reimbursement
            processing to attract and retain quality providers.
      --Pharmacy networks and mail order pharmacy programs should be
            extended beyond the 40-mile radius of closing military bases
            and they should operate on a flat-rate basis rather that one
            based on percentage of costs.
      --Improve quality control oversight of managed care support
            contracts, preferably by independent parties.
      --Remove the requirement for TRICARE Standard beneficiaries to obtain
            non-availability statements or preauthorization before seeing
            private providers.
      --Reduce the TRICARE Standard (CHAMPUS) Catastrophic Cap for retirees
            from $7,500 preferably to $3,000.
      --Implementation of the G.I. Bill of Health: The use of Department of
            Veterans Affairs medical centers by non-service-connected
            military retirees and their dependents who are TRICARE or
            Medicare eligible should be authorized. As TRICARE and Medicare
            providers, VA medical centers should be authorized to bill the
            Departments of Defense and Health and Human Services for
            medical care provided to these veterans. Unlike military
            treatment facilities, there are VA medical care facilities in
            all the states to include Alaska and Hawaii.
      --Transferring TRICARE coverage for active duty families and families
            of military retirees should be facilitated when they transfer
            or move between TRICARE regions (reciprocity and portability).
      --Make the TRICARE Prime fee structure more comparable to fees in
            civilian HMOs.
        Mr. Chairman, the nation has an obligation to do better. We believe
    there is a moral obligation for the government to find a way to provide
    at least the same level of health coverage to military retirees that it
    already provides to every other federal retiree.
                         other military retiree issues
        Military Retired Pay COLAs.--Service members, current and future,
    need the leadership of this subcommittee to ensure the Congress remains
    sensitive to long-standing contracts made with generations of career
    military personnel. A major difficulty is the tendency of some to
    portray all so-called ``entitlement'' programs, including military
    retirement, as a gratuitous gift from the taxpayer. In truth, military
    retired pay is earned, deferred compensation for accepting the unique
    demands and sacrifices of decades of military service. Because most
    Americans are unwilling to endure those arduous conditions, the
    retirement system is the services' single most important career
    incentive.
        The American Legion urgently recommends that the subcommittee
    oppose any changes to the military retirement system, whether
    prospective or retroactive, that would undermine readiness or violate
    contracts made with military retirees.
        VA Compensation Offset to Military Retired Pay.--A continuing issue
    of high concern to The American Legion is the VA compensation offset to
    military retiree pay. The purposes of these two compensation elements
    are fundamentally different. Longevity retirement pay is designed
    primarily as a force management tool that will attract large numbers of
    high-quality members to serve for at least 20 years despite
    extraordinary and arduous conditions of service, including a forced
    mid-life career change. Veterans disability compensation is paid to
    veterans who are disabled by injury or disease incurred or aggravated
    during active military service in the line of duty. Monetary benefits
    are related to the residual effects of the injury or disease or for the
    physical or mental pain and suffering and subsequently reduced
    employment and earnings potential. Opinions may differ over the extent
    to which concurrent receipt should be implemented to the offset formula
    used. But action should be taken to provide more equitable compensation
    for those who served more than 20 years in uniform and incurred
    substantial service-connected disabilities that severely inhibit their
    post-serving earning opportunities.
        The American Legion believes strongly that the 100 percent offset
    requirement is an inordinate penalty especially for those disabled
    retirees who are most severely disabled and whose disabilities have
    precluded them from pursuing productive post-service employment
    opportunities.
        Twenty-five years ago Americans opted for an all-volunteer force to
    provide for our national security. Inherent in that commitment was a
    willingness to invest the needed resources to bring into existence a
    competent, professional, and well-equipped military. Now is not the
    time to dismantle, through the consequences of underresourcing national
    defense, what has been achieved in creating the all-volunteer force.
        Mr. Chairman, this concludes The American Legion statement.

        Senator Stevens. Thank you for that, and I did look over
    your statement. You are absolutely correct. We are pursuing the
    policies that you have outlined, and we thank you for your
    support. Thank you very much.
        Chief Master Sergeant Krebs, please.
    STATEMENT OF CHIEF MASTER SERGEANT JOSHUA W. KREBS
                (RET.), MANAGER FOR LEGISLATIVE AFFAIRS,
                AIR FORCE SERGEANTS ASSOCIATION
        Sergeant Krebs. Mr. Chairman, on behalf of the members of
    the Air Force Sergeants Association (AFSA), thank you for this
    opportunity to offer our views on the fiscal year 2000
    Department of Defense appropriations.
        AFSA represents enlisted active and retired members of all
    components of the United States Air Force and their family
    members and survivors. I would be remiss if I did not thank
    this committee for its help in providing the $1.8 billion for
    military compensation in the emergency supplemental
    appropriations bill. This is a substantial down payment on
    starting to pay for the military compensation shortfalls that
    have accumulated over many years.
        The men and women serving in the military and their
    families remain the most valuable resource of our Armed Forces.
    Increased military and humanitarian missions abroad combined
    with increasing shortfalls in recruiting and retention continue
    to provide extraordinary burdens on the truly dedicated men and
    women serving today.
        Service members have endured years of pay raise caps,
    longer duty days, increasing family separations, and growing
    health care difficulties. Mr. Chairman, it is time to take care
    of those who serve and have served. Although the fiscal year
    2000 pay raise will start to restore pay equity, more needs to
    be done. Since 1982, when military pay was last considered as
    having achieved general compatibility with the private sector,
    military raises have lagged a cumulative 13.5 percent behind
    those achieved by the average Americans.
        In 12 of the last 17 years, military pay raises have been
    capped below private sector pay growth for enlisted members. An
    equally disturbing pay gap is that between enlisted,
    noncommissioned, and commissioned members. Keep in mind that
    military compensation is provided by two separate pay charts,
    the commissioned one, which is higher than the enlisted one.
        Quite often, our members ask when, if Congress is going to
    rework the pay charts to incorporate a more realistic
    reflection of the increased mission responsibilities and
    education levels of enlisted members.
        A promise of free lifetime health care is one of the major
    reasons many military members and their families endured the
    hardships of military life. A significant abrogation of that
    promise has many retired members and their families asking why
    they lived up to their end of the bargain but the United States
    Government has not.
        Especially important to older retirees is universal
    pharmacy benefit. We are continually asked by Medicare-eligible
    retirees why the coverage for prescription services is lost at
    the time when they need it most. They want access to a DOD
    pharmacy benefit no matter where they live, or how old they
    become.
        As younger retirees see what is happening to military
    health care for Medicare-eligible military retirees, they
    question their Government's commitment to their military health
    care benefits. We can also tell you that this questioning is
    not limited to retirees. Active duty military members of all
    ages and grades are also questioning what will be there for
    them.
        While military pay, retirement, and the operations tempo
    have received much of the attention during the current
    recruitment and retention difficulties, we would suggest that
    if you go into the trenches and talk to the troops, health care
    needs to be added to that list.

                               prepared statement

        Mr. Chairman, again thank you for this opportunity to
    present the views of the Air Force enlisted men, members and
    their families. This concludes my remarks.
        [The statement follows:]
                     Prepared Statement of Joshua W. Krebs
        Mr. Chairman and distinguished committee members, on behalf of the
    150,000 members of the Air Force Sergeants Association, thank you for
    this opportunity to offer our views on the fiscal year 2000 Department
    of Defense appropriations. AFSA represents enlisted active and retired
    members of all components of the United States Air Force, and their
    family members and survivors. It is particularly gratifying that you
    offer this opportunity to express the enlisted point of view.
        The men and women serving in the military and their families remain
    the most valuable resource of our Armed Forces. Increased military and
    humanitarian missions abroad, combined with increasing shortfalls in
    recruiting and retention, continue to place extraordinary burdens on
    the truly dedicated men and women serving today. Servicemembers have
    endured years of pay raise caps, longer duty days, increasing family
    separations, growing health care difficulties, deteriorating military
    housing, less opportunity to use educational benefits and more out-of-
    pocket expenses with every military relocation. As Secretary of Defense
    William Cohen asked, ``What is a fair salary for someone who is on call
    24 hours a day, who's prepared to lead troops into deadly combat? What
    do you pay someone who is rigorously trained in highly lethal, cutting-
    edge technology, who is constantly relocated and restricted in
    lifestyle? What's that worth?'' Mr. Chairman, it is time to adequately
    compensate those who serve.
        AFSA appreciates the lead the Senate has taken in improving
    quality-of-life benefits for military members as embodied in the
    Soldiers', Sailors' Airmen's and Marines' Bill of Rights Act of 1999,
    Senate 4. However, as you well know, S. 4 is only a hollow promise if
    the money is not appropriated to fund those promises. We urge this
    committee to fund the improvements passed earlier by the Senate.
                                  military pay
        Administration plans for fiscal year 2000 call for a 4.4 percent
    military pay raise for January 1, 2000, and targeted additional raises
    effective July 1, 2000, ``focusing on rewarding performance,
    compensating people for their skills and experience, and encouraging
    them to continue in service.'' These targeted raises will range up to
    5.5 percent and will be in addition to the January 1, 2000, military
    pay raise. In response to the administration's defense budget plans,
    the Senate passed S. 4, the Soldiers', Sailors', Airmen's, and Marines'
    Bill of Rights Act of 1999. S. 4 would provide a 4.8 percent pay raise
    January 1, 2000, and essentially the same July 1, 2000, additive raises
    as called for by the Administration.
        Since 1982 when military pay was last considered as having achieved
    ``general comparability'' with the private sector, military raises have
    lagged a cumulative 13.5 percent behind those achieved by the average
    American. In 12 of the last 17 years, military pay raises have been
    capped below private sector pay growth. For enlisted members, an
    equally disturbing ``pay gap'' is that between enlisted
    (noncommissioned) and commissioned members. Keep in mind that military
    compensation is provided by two, separate pay charts--the commissioned
    one much higher than the enlisted one. Even allowances (e.g., housing
    allowances) are provided in two separate, financially disparate charts.
    The net effect of across-the-board pay raises over the years has been
    to pull the charts further and further apart--more dollars each time
    for the group already making the most, although both must cope with the
    same economic life challenges. Quite often our members ask when/if
    Congress is going to rework the pay charts to incorporate a more
    realistic reflection of the increased mission responsibilities and
    education levels of enlisted members. Certainly, jobs that were once
    handled exclusively by officers are now being handled by enlisted
    members. Mid-career, fully-qualified and experienced NCOs question the
    fairness of their pay being so far behind relatively inexperienced,
    early career officers. This is not an officer-vs.-enlisted issue; nor
    is it a criticism of the necessary separation inherent in a chain-of-
    command. Rather, it is a matter of equity, appreciation, and fairness
    to the majority of military members: the enlisted servicemembers. Such
    an equitable restructuring of compensation will take congressional
    action, as the Department of Defense's track record indicates that it
    does not have the willingness or inclination to do so.
        The targeted July 1, 2000, raises supported by both the
    Administration and S. 4. certainly raise some questions about the
    methodology used to arrive at the chart figures. We ask you to continue
    with the concept of targeted raises, but to closely examine the
    administration's July 1 targeting chart to ensure the enlisted ranks
    are being treated fairly.
                                redux retirement
        In testimony before Congress in September 1998 and January 1999 the
    Joint Chiefs of Staff made it clear that, in their opinion based on the
    date available to them, the incentive for career personnel to remain on
    active duty longer than 20 years envisioned by the Military Retirement
    Reform Act of 1986 (H.R. 4420) was not as attractive as originally
    thought in 1986. The Joint Chiefs testified that mid-career military
    personnel were deciding to leave the service well before 20 years of
    service. In exit surveys, these departing personnel reported that
    dissatisfaction with reduced retirement benefits was an important
    factor in their decision to leave the service.
        AFSA agrees with the Joint Chiefs. The net effect of the changes to
    military retirement since 1980 have caused consternation in the ranks
    and have affected recruiting and retention. These changes have resulted
    in a combined 25 percent reduction in lifetime retired pay value
    compared to retirees who entered service before 1980.
        Prior to September 8, 1980, those who completed 20 or more years of
    active service were authorized retired pay amounting to 2.5 percent of
    their final basic pay per year of service (up to a maximum of 75
    percent of basic pay for 30 or more years). This system provided a full
    CPI-equivalent Cost-of-Living Adjustment (COLA) for military retirees.
    In an effort to save money, in September 1980 Congress changed the
    retirement formula basis from final basic pay to a monthly average of
    the highest 36 months average. This change had the net effect of
    reducing affected members' lifetime retired pay value by an average of
    roughly 8 percent--although this percentage varied based on promotions
    or longevity increases received during the last three years of service,
    the size of the annual pay raises during that period, and even which
    month of the year the member retired. The July 1986 (Redux) change
    dropped the 20-year level from 50 percent of the final average base pay
    to 40 percent. For each year of service over 20, the percentage
    increased from 2.5 percent per year to 3.5 percent per year.
    Administration and some congressional members claimed that the 1986
    plan's one percent increase (from 2.5 percent to 3.5 percent) for every
    year of service over 20 would make people want to stay in longer. Such
    claims were disingenuous at best since:
        (1) the vast majority of military members do not have the option to
    stay in past the 20-year point; time in service and grade restrictions
    often determine a member's separation;
        (2) the 3.5 percent per year over 20 is not an enticing ``carrot''
    when the member receives only 40 percent of the average basic pay at
    the 20-year mark versus the 50 percent which existed for the previous
    group of retirees; and
        (3) the Redux formula's inclusion of a full one-percent reduction
    to this group's retiree COLA each year further lessens this group's
    purchasing power.
        Indeed, those who entered service August 1, 1986 (and later) see a
    reduction of at least tens of thousands of dollars in retirement income
    when compared to those who came in before August 1986. Even greater,
    the net effect of the combined 1980 and 1986 changes represent a
    cumulative 25 percent reduction in lifetime retired pay value compared
    to retirees who entered service before 1980.
        Such disparities make those who are serving today--with much
    greater responsibility, significantly heavier taskings, and more
    regular and longer family separations--question the appreciation of
    national leaders for those who sign on to the unlimited liability
    clause; prepared every day to sacrifice their lives, if necessary, to
    protect our ``vital national interests.'' AFSA members have
    unequivocally communicated to us that military retirement is, by the
    current rules, not much of an incentive to make the military a career.
    They indicate to us that the increased degradation of several aspects
    of the military ``career package'' make it easier to walk away from the
    military ``company'' in favor of more generous, grateful employers
    elsewhere.
        We urge that you provide funding to take the 1986 Redux formula off
    the books. Reinstate the 50 percent formula at 20 years of service with
    2.5 percent for each year thereafter. Ensure that all military retirees
    get a full Cost-of-Living Adjustment each year of their retirement.
                          supplemental food allowance
        The 1995 National Defense Authorization Act directed, ``The
    Secretary of Agriculture shall make available to the Secretary of
    Defense from funds appropriated for such purpose, the same payments and
    commodities as are made for the special supplemental food program in
    the United States under section 17 of the Child Nutrition Act of 1996
    (42 U.S.C. 1786).'' It further directed that the program would be
    administered by the Secretary of Defense. In effect, this law mandated
    a Women, Infants, and Children (WIC) program for overseas military
    families. Mr. Chairman, despite the law, this program has not been
    implemented because of Department of Agriculture reluctance to use
    money set aside for stateside children to fund a program designed to
    help children of military members assigned overseas.
        AFSA representatives recently visited several bases at overseas
    locations and saw a definite need for this law to be implemented. We
    encountered many clear cases of need, especially with lower-ranking
    military members (even considering other allowances they receive), and
    overseas commanders asked for this program. The need for this program
    was evident throughout our travels.
        According to government estimates, approximately 11,000 military
    family members would be eligible for WIC overseas. The annual cost to
    extend WIC overseas would be approximately $4.5 million. Administrative
    costs would be negligible; the program could be administered at local
    bases/posts by already-existing offices like Family Support Centers.
    Low-cost, on-base administrative precedents have already been set;
    e.g., the federal supplements provided to lower the costs of the school
    lunch program are handled by the bases/posts.
        Mr. Chairman, I ask that you coordinate with your counterpart on
    the Labor, Health and Human Services, Education, and Related Agencies
    Subcommittee and ensure this program is funded and executed during
    fiscal year 2000.
                                  health care
        The promise of ``free'' lifetime health care is one of the major
    reasons many military members and their families endured the hardships
    of military life. The significant abrogation of that promise has many
    of these retired military members and their families asking why they
    lived up to their end of the bargain, but the United States Government
    has not. Especially important to older retirees is a universal pharmacy
    benefit. We are continually asked by Medicare-eligible retirees why
    they lose coverage for prescription services at the time in life when
    they need it the most.
        The best way to describe the pharmacy benefit available to
    Department of Defense Medicare-eligible health services beneficiaries
    is uneven. It largely depends on where one lives. If you reside near a
    military installation with a major medical facility, you can
    ``normally'' get the prescription support you need; if you reside near
    a military installation with a clinic you may or may not get the
    prescriptions you need; and if you reside away from any military
    installation, you are left on your own.
        The Fiscal Year 1999 Strom Thurmond Department of Defense
    Authorization Act requires that the Department of Defense submit a plan
    to Congress not later than March 1, 1999, for a system-wide redesign of
    the military pharmacy system. Recently, at a hearing before the
    Military Personnel Subcommittee of the House Armed Service Committee,
    DOD announced that the plan would be late. As of May 7th the report has
    still not been received. Apparently, after ``tearing apart'' the
    current system to find increased efficiencies, ``putting it back
    together'' in a cohesive manner is much harder than envisioned by DOD.
    We wonder if the problem is finding the money necessary to pay for the
    expanded benefit that Congress mandated. AFSA is concerned that DOD's
    solution will require either co-payments for medical prescriptions at a
    military treatment facility or a monthly fee for Medicare-eligibles to
    use the pharmacy program. Either of these solutions is unacceptable and
    will be viewed as a violation of one more health care promise. DOD
    health services beneficiaries don't care whether the money comes from
    increased efficiencies from within the pharmacy program or from
    additional funds from Congress--they want access to a DOD pharmacy
    benefit no matter where they live or how old they become.
        A major concern for both civilian TRICARE providers and
    beneficiaries is the cumbersome and unresponsive TRICARE claims
    process. Many providers experience long delays in receiving payments
    and have difficulties many times in contacting TRICARE claims
    processors to resolve processing difficulties. Although many think that
    the low payment levels authorized by TRICARE would drive away doctors,
    the number one reason cited by doctors is the difficulty in claims
    processing.
        From the perspective of individual beneficiaries, claims processing
    difficulties can result in repeated notices from providers or, even
    worse, having their accounts turned over to a collection agency (which
    jeopardizes their credit ratings if they fail to pay the claims out of
    their own pockets).
        The TRICARE Standard catastrophic cap for out-of-pocket expenses is
    still $7,500 for retirees. This cap is much higher than most civilian
    fee-for-service health care plans which traditionally set annual limits
    between $2,000 and $3,000. AFSA asks this committee to provide funding
    to allow DOD to reduce the catastrophic cap to $3,000.
        Many older military retirees turned down Medicare Part B when they
    first became eligible because they believed they could get their
    medical care at a nearby military hospital. Now because of base closure
    actions, these retirees are faced with the difficult proposition of
    going without hospital insurance (Medicare Part B) or must pay a late
    enrollment fee. There are approximately 12,000 people affected by this
    situation. AFSA asks this committee to support funding to allow a
    waiver of the Part B late enrollment fee for those members affected by
    base closures or medical facility downsizing.
        TRICARE, and specifically TRICARE Prime, the current health care
    system for the Department of Defense, was designed to be a ``managed
    care'' program. Over the course of the past several years, it seems to
    have become a ``managed cost'' system. As younger retirees see what is
    happening to health care for Medicare-eligible military retirees, they
    question their government's commitment to their military health care
    benefits. We can also tell you that this questioning is not limited to
    retirees. Active duty military members of all ages and grades are also
    questioning what will be there for them. While military pay, retirement
    and the operations tempo have received much of the attention during the
    current recruiting and retention difficulties, we would suggest if you
    ``go into the trenches'' and talk to the troops, health care needs to
    be added to that list.
                                   impact aid
        Impact Aid appropriations provide assistance to school districts
    for several reasons. Impact Aid is provided to local communities in
    light of the presence of civil servants, Native American children, low
    rent housing, and, in 40 percent of the total appropriation, to school
    districts impacted by the presence of military children. From AFSA's
    perspective, Impact Aid is the federal government's obligation to the
    children of military personnel. It is ironic that the administration
    that purports to focus so much on education has chosen to once again
    slash Impact Aid dollars--by $128 million in its fiscal year 2000
    Department of Education budget. The implicit statement in these such
    decisions is that military children are a lower priority than others in
    our nation.
        From the time of the Truman Administration, our government has
    recognized the unique sacrifices, transient nature, and special
    requirements of military families. Impact Aid has helped compensate for
    a funding inadequacy in local districts which educate military
    children. This shortfall is created by an inadequate contribution on
    the part of the military installation and military members to local
    taxes which fund public education.
        For military children, funding is provided at two different levels;
    one level (3a) if the parents of a student live and work on federal
    property and another level (3b) when a parent works on federal property
    but lives in the community as a renter or homeowner. Local education
    agencies receive $2,000 for each 3a student and $200 for each 3b
    student. Impact Aid is an excellent example of federal funds going
    directly to the program with little bureaucratic red tape. The funds go
    directly to schools to serve the education of military children, and
    local boards of education decide how it is to be spent.
        Today, there are increasing pressures on military families with the
    very vigorous military operations tempo and administration decisions to
    involve the U.S. military in peacekeeping/police actions around the
    world. Military parents are now constantly ``on the bubble,'' subject
    to short-notice deployments. As the national leadership has
    significantly reduced the size of the military, it has also
    significantly increased the mission requirements. On top of that,
    further anxiety exists with the uncertainty of downsizing,
    privatization and outsourcing. With all of the other challenges of
    military life, it is important that, at the least, we are committed to
    provide a quality education for military children. It is a high
    priority for military families--it is a readiness and a quality of life
    issue. As our military personnel are deployed, they should not have to
    worry about whether their children are taken care of.
        We would like to remind this committee that there have been
    attempts in the past to charge ``enrollment fees'' to the parents of
    military children. For enlisted families, in particular, such an
    eventuality could be devastating since they are paid the least.
    Military parents expect that the federal government will act in the
    best interests of their families. If there is any group of the nation's
    families that should earn an extra measure of governmental support, it
    is those who serve our nation and are transferred at the pleasure of
    the government. However, we fear that continued diminishment of the
    program will result in other attempts by communities to charge fees to
    make up for education funding shortfalls. It would be wrong to penalize
    military families simply because the government stations the family at
    a particular location.
        During the past 18 years, while the number of students served
    through Impact Aid has remained the same and the Consumer Price Index
    has increased by 70 percent, Impact Aid funding has not been treated as
    a priority. Without question, full funding for Impact Aid would greatly
    assist in insuring the children of our military personnel a quality
    education without endangering or compromising the budgets of local
    school districts. As in years past, we ask this committee to provide
    supplemental funds in the Department of Defense budget to help make-up
    some of the projected funding shortfall, especially for more seriously
    impacted, high need districts.
                         morale, welfare and recreation
        AFSA representatives often travel to stateside and overseas
    locations where our military members serve. One aspect of military life
    that those who have not served may have trouble relating to is that
    military bases and posts are self-contained towns. This is true
    particularly at overseas locations where the base or post is the
    central focus of the member's physiological, financial and
    psychological support network. The base serves as the congregation
    point for much more than mission; it is the heart of entertainment,
    recreation, and family and personal development. MWR facilities are a
    central part of this sense of shared community.
        One great mission of MWR programs, though not often stated, is
    their incredibly positive impact on the ability of our troops and
    families to respond to the contingencies and missions of military life.
    Likewise, the stresses and frustrations of military service (witnessed
    by the current dialogue on recruiting and retention problems)
    absolutely require that fitness activities be available and of the
    highest quality. There is no question that physical fitness is an
    inseparable part of readiness. Full funding must be ensured to maintain
    and upgrade fitness facilities at all military locations.
        Another aspect of the new demographics of our military services is
    the need for Child Development Centers. These facilities are not
    luxuries; they are an inescapable requirement that is a byproduct of
    the all-volunteer force, the significantly increased number of
    military-military couples, and the absolute need for the spouses of
    enlisted military members to work in order to simply meet the day-to-
    day needs of family life. At a time when the military has thousands of
    enlisted members who are eligible for food stamps and for the Women,
    Infants and Children Program, working outside the home is not an
    option; it is a necessity. We ask your full support for these vital
    facilities.
                          base exchange and commissary
        Mr. Chairman, I ask this committee to focus, for a moment, on the
    importance of military stores: our exchanges and commissaries. There is
    no question that military members consider these stores an extremely
    important non-pay benefit. Airmen know, for example, when they enter an
    airbase--whether stateside or overseas--they are, in a sense, home.
    They see the welcome sight of the familiar base exchange. They know
    that, despite the volatile local (foreign) economy that may exist
    outside of the base, there is a commissary where they and/or their
    families can continue to purchase reasonably priced food stuffs to
    which they, as Americans, are accustomed. Military members we visit
    tell us how important it is to have these services available,
    particularly with the incredible tempo of deployments and family
    separations that the current national military philosophy has
    engendered.
        Just why are they so important? I ask that you consider these
    facts: (1) Military stores are a fundamental part of the military
    lifestyle, both for active duty and retired military members; (2) For
    enlisted members, who receive considerably lower compensation and
    benefits (and retired pay), these stores provide a modest, though
    vital, supplemental financial benefit; (3) Military stores are part of
    the military retirement package--part of the promise; (4) Overseas,
    military stores often serve as a lifeline; (5) These stores have a
    military mission in that they more-closely adapt to the needs of their
    clientele (military members and their families) than commercial
    enterprises do. For the commercial industry, the bottom line is service
    only when/if it translates into increased profits; (6) In a very real
    sense, maintaining the exchange system allows the military to ``take
    care of its own'' due to its significant monetary contribution to MWR
    programs. The exchange system's contribution to MWR accounts for one
    out of every two dollars spent on MWR on Air Force and Army bases; and
    (7) Commissaries and exchanges are, very simply, part of the price of
    maintaining the enlisted portion of an all-volunteer military force. We
    ask you to provide full support and funding for the base exchange and
    commissary systems and the facilities they provide for military
    members.
                                   conclusion
        Mr. Chairman, thank you for this opportunity to present the views
    of Air Force enlisted members and their families. AFSA believes that
    the work this committee does in protecting and rewarding those who
    serve is among the most important done on the Hill, and we ask that you
    fulfill the promises made by the Senate in the Soldiers', Sailors',
    Airmen's and Marines' Bill of Rights Act. AFSA is proud to work with
    you, appreciates your efforts, and as always, is ready to support you
    in matters of mutual concern.

        Senator Stevens. Thank you, Mr. Duggan. We think we are on
    the track you have outlined. At least we hope we are.
        Terry Rogers, American Federation of Government Employees.
    Good morning, Terry.
    STATEMENT OF TERRY ROGERS, NATIONAL VICE PRESIDENT, 8TH
                DISTRICT, AMERICAN FEDERATION OF GOVERNMENT
                EMPLOYEES, AFL-CIO
        Mr. Rogers. Chairman Stevens, members of the committee, I
    am Terry Rogers, national vice president of the American
    Federation of Government Employees (AFGE) 8th District, which
    is the Upper Midwest States of Minnesota, North Dakota, Iowa,
    and Nebraska. AFGE national president Bobby Harnage regrets
    that he cannot be here today and extends his best wishes to
    this committee and staff.
        I am here to talk about the issues of most concern to DOD
    workers, contracting out. In several recent reports, the
    General Accounting Office (GAO) has said DOD consistently
    overestimates savings from contracting out. It has no proof
    savings are actually realized, and does a terrible job of
    contracting out costs and savings. Nevertheless, DOD intends to
    put up for grabs the jobs of at least 230,000 workers over the
    next 5 years.
        History shows that at least 115,000 of those workers will
    lose their jobs to contractors. Just what is the point of all
    this contracting out, other than replacing civil service
    workers with contractors, if DOD cannot show it saves money? I
    urge the committee to require DOD to report on the cost and
    savings of its contracting out efforts.
        We are also concerned about the increasing amount of work
    being contracted out without any public-private competition.
    For example, of the Army's contractor workforce of 224,000,
    only 16,000 of those jobs were acquired by winning OMB circular
    A-76 competitions. That is why AFGE is asking this committee to
    prevent any contracting out that is done without public-private
    competition.
        Surely it is not too much to ask that Federal employees be
    allowed to defend their jobs before contracting out their work.
    In too many cases, Federal employees are prevented from
    competing for work because of the use of personnel ceilings.
    These ceilings force agencies to lay off Federal employees or
    prevent them from hiring new Federal employees even when there
    is work to be done and the money is there. Instead, work is
    contracted out, often at higher cost.
        We appreciate the subcommittee's annual inclusion in the
    bill of a provision prohibiting the use of personnel ceilings.
    Since the practice continues relatively unabated, we urge the
    subcommittee to make the prohibition even stronger. A-76 is
    intended to be used both ways, on contractors' work and Federal
    employees' work. Nevertheless, DOD uses A-76 exclusively on our
    work.
        Clearly, Pentagon officials regard A-76 as a mechanism for
    replacing Federal employees with contractor employees, not as a
    tool for making DOD more efficient. DOD plans to compete the
    jobs of 230,000 workers over the next 5 years. How many
    contractor jobs? Zero. Mr. Chairman, we hope the committee will
    require DOD to consider bringing work back in-house as well.
        Finally, to the extent contracting out saves money, such
    savings usually come from undercutting Federal employees on
    their wages and benefits. It is one thing to contract out to
    take advantage of a better way of delivering service. It is
    another entirely to contract out just to replace middle class
    Americans who make up the Federal workforce with a poorly paid
    contingent workforce. That is why we have submitted a proposal
    to your staff that would require DOD to study the effect of
    contracting out on ages and benefits.
        For these reasons and others, AFGE is asking that Congress
    to one, impose a moratorium on further contracting out until
    DOD can prove that their unprecedented reliance on contractors
    is actually saving money and maintaining readiness, two, stop
    contracting out work without giving Federal employees
    opportunities to defend their jobs, three, stop using personnel
    ceilings that prevent Federal employees from competing for
    work, four, start using A-76 equitably on work performed by
    contractors, and five, stop contracting out to undercut Federal
    employees on wages and benefits.

                               prepared statement

        Thank you for inviting AFGE to testify, Mr. Chairman, and
    we would be happy to answer any questions.
        [The statement follows:]
                       Prepared Statement of Terry Rogers
                                  introduction
        Mr. Chairman and Subcommittee members, my name is Terry Rogers. I
    am the National Vice President of the American Federation of Government
    Employees. AFGE represents more than 600,000 federal employees serving
    across the nation and around the world, including 300,000 employed by
    the Department of Defense (DOD). I thank the Subcommittee for this
    opportunity to offer the views of federal employees.
        While there are many important issues affecting DOD employees which
    this Subcommittee will consider, I will limit my statement today to the
    issue which is of the most concern to the DOD workforce as a whole: the
    need to require DOD to undertake a contractor inventory.
                              contractor inventory
        The Pentagon's relentless crusade to contract out and privatize
    work performed by experienced and reliable federal employees in safe
    and secure government installations has itself come under increasing
    attack. Although DOD officials still boast of savings from outsourcing
    of 20 to 45 percent, those claims have no support outside the self-
    interested contractor community. In fact, DOD officials admit that they
    have no evidence that the savings promised by contractors are actually
    realized.
        The GAO has repeatedly ``urged caution regarding the magnitude of
    savings likely to be achieved. In March 1997, we reported that prior
    savings estimates were based on initial savings estimates from
    competitive sourcing competitions, but that expected savings can change
    over time with changes in scope of work or mandated work changes.
    Further, we noted that continuing budget and personnel reductions could
    make it difficult to sustain the levels of previously projected
    savings.''
        Is there any chance that DOD officials will come up with more
    reliable data with which to determine the success of their
    controversial contracting out and privatization crusade? Not if left to
    their own devices. DOD's mechanism for developing contracting out
    savings guesstimates--the Commercial Activities Management Information
    System (CAMIS)--has also come under fire. CAMIS' savings guesstimates,
    according to GAO, ``are not modified and are being used continuously
    without updating the data to reflect changes in or even termination of
    contracts. DOD officials have noted that they could not determine from
    the CAMIS data if savings were actually being realized from the A-76
    competitions. Our work continues to show important limitations in CAMIS
    data * * * During our review, (GAO) found that CAMIS did not always
    record completed competitions and sometimes incorrectly indicated that
    competitions were completed where they had not yet begun or were still
    underway. We also identified where savings data recorded for completed
    competitions were incorrect based on other data provided by the
    applicable service.''
        Pentagon officials have declared that DOD will compete the jobs of
    230,000 federal employees over the next five years. However, as GAO has
    pointed out, DOD officials admit that they lack the staff and the
    resources necessary to carefully conduct all of those competitions:
    ``While none of the services has yet fully determined the staff
    resources necessary to implement its competition program, some service
    officials have expressed concern about their ability to provide
    sufficient existing in-house staff as the number of ongoing studies
    increases and the potential effect on other mission requirements of
    devoting available resources to meet competition needs. Some officials
    have already begun to express concern about the adequacy of their
    resources to initiate and complete ongoing competitions and to deal
    with other ongoing mission responsibilities. Officials at one Army
    command stated that they have finite resources to accomplish their
    overall missions and tasks. If one mission, such as performing
    competitions, is given command priority, resources are shifted to meet
    that priority, and other tasks or activities may be delayed or not
    performed. The large increase in the number of competitions expected to
    be ongoing in fiscal years 1999 and 2000 is likely to greatly increase
    resource requirements.''
        Given that DOD consistently overestimates savings from contracting
    out, has no proof that savings are ultimately realized, does a terrible
    job of tracking contracting out costs and savings, and doesn't have
    enough staff to conduct competitions worth 230,000 jobs let alone make
    sure losses and gains from contracting out are accurately calculated
    and reported, it is imperative that the Senate Defense Appropriations
    Subcommittee require DOD to establish a contractor inventory. And
    thanks to the report language inserted in last year's defense
    appropriations bill by Representative Joe Skeen (R-NM) and the
    subcommittee's excellent professional staff, a foundation for a
    contractor inventory has already been established.
    Contractor Inventory Element #1: Contractor Workforce
        ``The government knows virtually nothing about its shadow''--the
    ever-expanding number of politically well-connected contractors who are
    taking more and more work from federal employees--writes Paul Light, a
    political scientist at the Brookings Institute, in The True Size of
    Government, his forthcoming expose. ``Neither the Office of Personnel
    Management nor the Office of Management and Budget has ever counted the
    full-time equivalent non-federal workforce, let alone analyzed its
    appropriateness.''
        A former senior OMB official once said when asked about the size of
    the contractor workforce, ``You can use any number you want * * * But
    whatever it is * * * it is a lot of people.'' Indeed, it is. Light's
    research indicates that the contractor workforce may be almost 4
    million employees. In contrast, there are just over 1.8 million federal
    employees. That is, the contractor workforce is now likely at least
    twice the size of the federal government's in-house staff.
        Although the Administration has directed agencies to rely more on
    contractors than ever before, the shadow workforce has been built up
    over many, many years. As Light has observed, the shadow workforce
    reflects in large part ``decades of personnel ceilings, hiring limits
    and unrelenting pressure to do more with less. Under pressure to create
    a government that looks smaller and delivers at least as much of
    everything the public wants, federal departments and agencies did what
    comes naturally. They pushed jobs outward and downward into a vast
    shadow that is mostly outside the public's consciousness.''
        Administration officials have long dismissed the need to document
    the size of the contractor workforce, both at the micro (i.e., number
    of workers employed under specific contracts) and macro (i.e., number
    of contractor workers employed agency-wide and government-wide) levels.
    ``Numbers are not important,'' they would blithely insist. ``What
    really matters is how well the job is done.'' In an ideal world, those
    Administration officials would be right. But we don't live in an ideal
    world--especially when it comes to federal service contracting.
        In documents ranging from the federal budget to the OMB Circular A-
    76 inventory, detailed information is kept on the number of federal
    employees, at both the micro and macro levels. Clearly, Clinton
    Administration officials, like those who came before them, believe it
    is very important to maintain meticulous records about the size of the
    federal government's in-house workforce.
        However, they have historically professed no interest whatsoever in
    keeping the same statistics about the contractor workforce. While one
    can speculate about the reason for this false distinction, there's no
    denying that the government's ability to easily quantify its in-house
    workforce has put federal employees at a severe disadvantage vis-a-vis
    their contractor counterparts. Put bluntly, if the Administration and
    the Congress know who you are and where you are, they can hurt you.
        In the Federal Workforce Restructuring Act, for example, the
    President and the Congress arbitrarily slashed the number of civil
    servants by almost 275,000--without also cutting by the same proportion
    all of the services performed by federal employees.
        The use of numbers to ``manage'' the federal workforce didn't stop
    there; in fact, the practice has grown even more pernicious. Today, the
    extensive (and sometimes illegal) use of arbitrary personnel ceilings
    forces agencies to contract out work, often at higher costs, because
    they are either forced to fire or forbidden from hiring the staff
    needed to perform the work in-house.
        Moreover, DOD has arbitrarily decided to compete the jobs of almost
    230,000 federal employees under OMB Circular A-76. If DOD officials
    were actually interested in competing certain types of work, they'd
    just list the services to be placed under scrutiny. However, because
    DOD's quota refers to the number of employees to be competed, rather
    than the services to be put up for bid, it would be difficult, indeed,
    to conclude that the Pentagon's drastically expanded use of OMB
    Circular A-76 is not just another attempt to replace federal employees
    with contractor employees.
        Contrary to the assertions of Administration officials, numbers do
    count--at least for federal employees. In order to ensure equity, the
    contractor workforce must be documented in a similar manner.
        Of course, the importance of documenting the size of the contractor
    workforce is not just that it puts contractor employees at the same
    disadvantage in the budget process as federal employees. Light
    concludes that, ``It is impossible to have an honest debate about the
    role of government in society if the measurements only include part of
    the government. The government also is increasingly reliant on non-
    federal workers to produce goods and services that used to be delivered
    in-house. Not only does the shadow workforce create an illusion about
    the true size of government, it may create an illusion of merit as jobs
    inside government are held to strict merit standards while jobs under
    contracts are not. It may also create illusions of capacity and
    accountability as agencies pretend they know enough to oversee their
    shadow workforce when, in fact, they no longer have the ability to
    distinguish good product or service from bad. * * *
        ``Expanding the headcount (to include, among others, contractor
    employees) would force Congress and the President to confront a series
    of difficult questions. Instead of engaging in an endless effort to
    keep the civil service looking small, they would have to ask just how
    many (employees working directly and indirectly for the government)
    should be kept in-house and at what cost. One can easily argue that the
    answers would lead to a larger, not smaller, civil service, or at least
    a civil service very differently configured.''
        More information about the size of the contractor workforce would
    also influence agencies' contracting out decisions. Administration
    officials have long insisted that reliable statistics about the
    contractor workforce simply aren't kept.
        However, that's not true. For example, one of the military services
    has determined after a comprehensive review of its records for fiscal
    year 1996 that it employed 224,000 contractor employees. Prior to
    conducting the research that went into the report, that military
    service had assumed it employed only 47,000 contractor employees.
    Analysts pointed out that the failure of the military service in
    question to ``take full credit for (its) level of contracting * * *
    could result in driving increased civilian manpower cuts that may
    compromise governmental control and erode critical technical and
    readiness capability in'' important functions.
    Contractor Inventory Element #2: Renewal Dates
        Agencies should be required to keep track of when their contracts
    come up for renewal, so that managers can give due consideration to the
    option of contracting in certain services if in-house performance is
    likely to be more effective, more efficient, and more reliable than
    private sector performance.
        The Administration deserves credit for working with AFGE to ensure
    that the last revision to OMB Circular A-76 allows agencies to bring
    work in-house. As is the case when work is contracted out, federal
    employees are required to submit a bid at least 10 percent cheaper than
    the contractor's in order to bring the work in-house.
        As might be expected, contractors view the prospect of having to
    compete for their work against federal employees with dread. Sure, they
    are keen to compete against federal employees for work currently
    performed in-house. But contractors quickly reconsider their pro-
    competition position when it's their work which is put up for grabs. In
    fact, most versions of the contractors' notorious Freedom From
    Government Competition Act included implicit and explicit prohibitions
    against federal employees competing with contractors for work already
    performed in the private sector. Inclusion of such provisions inspired
    more than one lawmaker to refer to the Freedom From Government
    Competition Act as the ``Elimination of Government Competition Act''.
        The possibility of contracting in would keep contractors from
    forcing taxpayers to swallow costly post-award mark-ups. Usually, there
    is very little competition among contractors for work, especially when
    the initial contract comes up for renewal. Columbia University
    Professor Elliot Sclar, an expert witness frequently called upon by the
    Congress to comment on contracting out legislation, has described
    service contracting as a ``* * * dynamic political process that
    typically moves from a competitive market structure towards a
    monopolistic one. Even if the first round of bidding is genuinely
    competitive, the very act of bestowing a contract transforms the
    relative market power between the one buyer and the few sellers into a
    bilateral negotiation between the government and the winning bidder.
        ``The simple textbook models of competition so prized by
    privatization advocates provide no guidance to what actually occurs
    when public services are contracted. Over time, the winning contractor
    moves to secure permanent control of the `turf' by addressing threats
    of potential returns to (contracting in) or from other outside
    competitors. To counteract the former threat, they move to neutralize
    competition, most typically through mergers and market consolidation
    among contractors. This trend helps to explain why two-thirds of all
    public service contracts at any time are sole-source affairs * * *.''
        Contractors have been almost completely successful in preventing
    the use of contracting in. Administration officials are unwilling to
    reveal how much work has been contracted in, but observers insist that
    the amount is small. That this is so when report after report documents
    shoddy, overpriced work by federal contractors suggests that taxpayers
    are not being well-served by the Administration's insufficient emphasis
    on contracting in.
        In response to a letter from AFGE National President Bobby L.
    Harnage which asked the Administration to work with this union to
    remove all legislative and regulatory obstacles to contracting in, a
    senior OMB official wrote, ``I agree with you that we should ask
    federal managers to * * * consider the potential benefits of converting
    work from contract to in-house performance * * * OMB will encourage
    agencies to identify opportunities for the conversion of work from
    contract to in-house performance * * *.''
        Unfortunately, the encouragement necessary to inspire agency
    managers to take work away from poorly performing but politically well-
    connected contractors and reassign it to experienced and reliable
    federal employees has not been forthcoming.
        In the Administration's fiscal year 2000 budget, for example, a
    section is devoted to public-private competition. But, as is the case
    all too often, what the Administration means by public-private
    competition is contractors competing for work performed by federal
    employees, not federal employees competing for work that is currently
    being done by contractors.
        That the Administration still regards public-private competition as
    a one-way street is made abundantly clear by the endorsement in the
    budget for DOD's radical plan to compete the jobs of almost 230,000
    federal employees under OMB Circular A-76. If its approach to public-
    private competition were truly equitable, the Administration would
    require DOD to also consider contracting in the jobs of almost 230,000
    contractor employees.
        Only when they are required to systematically keep track of when
    their contracts come up for renewal will agencies finally begin to give
    serious consideration to the option of contracting in work. That's why
    such a requirement should be included in any contractor inventory.
        AFGE understands that contractors fear the prospect of DOD managers
    being able to contract in work when it would benefit the taxpayers.
    They are all for public-private competition until it's their work which
    might be lost. But if public-private competition is more than just a
    rationale for replacing federal employees with contractor employees,
    then it must work both ways. If the contractor workforce is 4 million
    strong, as Paul Light has documented; if public-private competition is
    a good deal for the taxpayers and the warfighters, as the
    Administration insists; if federal employees win 50 percent of A-76
    competitions and if those victories translate into roughly 50 percent
    of the jobs put up for bid, as reported by OMB; then there are 2
    million jobs currently performed by contractors which could be
    performed more efficiently by experienced and reliable federal
    employees in safe and secure government installations. The
    Administration and the Congress can no longer have it both ways:
    competing our jobs but failing to compete contractor jobs. If work
    performed by contractors is not going to be subjected to the same
    degree of competition as work performed by federal employees, then the
    Pentagon's A-76 crusade must be terminated immediately since it is
    nothing more than an anti-federal employee scheme.
    Contractor Inventory Element #3: Contracting Out Costs
        According to the Administration, contractors and federal employees
    each win about one-half of their OMB Circular A-76 competitions.
    Whether work stays in-house or is contracted out, the Administration
    says, the public-private competitions generate savings for the
    taxpayers. Whether OMB Circular A-76 really does save money has long
    been a source of controversy. The Administration's fiscal year 2000
    budget claims that contracting out ``has shown savings of 30 to 40
    percent''.
        The GAO takes a much different view. While consistently noting that
    public-private competition can save money, Congressional auditors don't
    share the Administration's high opinion of contracting out: ``During
    the long history of our work in this area, GAO has consistently found
    that evaluating the overall effectiveness of contracting out decisions
    and verifying the estimated savings reported by agencies is extremely
    difficult after the fact. As a result, we cannot convincingly prove nor
    disprove that the results of federal agencies' contracting out
    decisions have been beneficial and cost-effective.''
        That is, even after years and years and billions and billions of
    dollars in contracting out, the GAO cannot say that the taxpayers have
    been well served. On what basis, then, does the Administration insist
    that contracting out shows savings of at least 30 percent? That
    estimate is based on the difference between the costs of performing the
    work in-house when the contracts are awarded and the bids which are
    submitted by winning contractors. Only after persistent questioning
    will Administration officials admit that they have no proof that the
    savings promised by contractors are actually realized. Instead, they
    simply take it on faith that the contractors will deliver services at
    the costs specified in their contracts despite considerable evidence to
    the contrary.
        Virtually every AFGE Activist has seen contractors win contracts by
    low-balling--offering bids unrealistically lower than those submitted
    by federal employees--and then later dramatically increase their costs
    or insist on renegotiating their contracts when it's simply no longer
    possible for agency managers to return the work to in-house
    performance. Adding insult to injury, more than a few AFGE Activists
    have been required by desperate agency managers to help out (i.e.,
    clean up after) contractors who couldn't come close to delivering the
    savings they had promised.
        Some Administration officials will insist that the problem of low-
    balling contractors can be taken care of simply by recompeting the
    work. Wrong. As discussed above, there is usually insufficient
    competition for most contracts to keep winning contractors honest.
    Indeed, it's been estimated that most public service contracts are
    sole-sourced.
        Moreover, the Pentagon's contention that its civilian workforce is
    inferior to contractors has been refuted by earlier head-to-head
    contests. In 1991, GAO reported that ``support service contracts cost
    substantially more than would using additional federal employees for
    the same work. Eleven of the 12 support service activities for which we
    conducted cost comparisons were, on average, 25 percent more costly.''
    Three years later, GAO determined that savings would have been possible
    in all nine contracting out studies it reviewed if the work had only
    been kept in-house. The uproar from the contractor community after the
    release of these reports has discouraged GAO from again comparing the
    performances of contractors and federal employees.
        However, in an internal report which a particular military service
    has not released, reportedly because its conclusions call into question
    the Administration's entire contracting out policy, federal employees
    have come out on top once again. In what is likely to be the most
    comprehensive survey of its kind ever conducted, this military service
    surveyed ten percent of its contracts and determined that it ``spent
    $21 billion in contract fees in fiscal year 1996 (which is estimated to
    have paid for 224,000 workyears), in comparison to $12.5 billion''
    (which is estimated to have paid for 238,000 civilian workyears). At
    the macro level, for pay and benefits, this military service paid
    $70,100 for the average contractor employee but only $48,100 for the
    average federal employee.
        Comparisons were also made for four types of work performed by
    rank-and-file federal employees. In each case, we either tied or beat
    the contractors. For professional work, contractors and federal
    employees tied at $62,000, on average; For testing and technical
    support, the average contractor employee cost $61,000 while the average
    federal employee cost only $53,000; For social work, the average
    contractor employee cost $32,000 while the average federal employee
    cost just $30,000; and For photography and printing, the average
    contractor employee cost $40,000 while the average federal employee
    cost only $31,000.
        Because so little information is available, AFGE believes the most
    important element in the contractor inventory is requiring agencies to
    keep track of basic costs for each contract: how much it cost for
    federal employees to do the work at the time their work was contracted
    out, how much the contractor said it would cost, and then how much the
    contract is really costing the taxpayers. One would think that such
    information would already be kept, especially when Administration
    officials ostensibly ``only care about how well the job gets done''.
    But contractor cost data isn't kept--which explains why taxpayers lose
    billions of dollars to contractor waste, fraud, and abuse, according to
    GAO.
        Administration officials and Congressional lawmakers often talk
    about the importance of safeguarding taxpayer dollars, but will they
    practice what they preach if that means taking on politically well-
    connected contractors and compiling information that will surely
    undermine the case for contracting out?
    Contractor Inventory Element #4: Acquisition Strategy
        Although generating much attention, OMB Circular A-76 is really a
    sideshow. Most government work that is performed by contractors is
    never subject to public-private competition. Either the work has never
    been performed by federal employees and was simply given to contractors
    from the very start (``new starts'') or it was begun in-house and then
    transferred to the private sector without giving federal employees any
    opportunity to compete in defense of their jobs. That is, despite the
    Administration's ostensible support for the principle of public-private
    competition, most contractors get their contracts without ever
    competing against federal employees.
        For the last several years, taxpayers have paid contractors at
    least $45 billion annually for services provided to agencies other than
    DOD. Yet, during that time, there have been virtually no OMB Circular
    A-76 competitions outside of DOD, which means that federal employees
    have not been allowed to compete for billions of dollars in work. At
    HUD, for example, start-up services are automatically given to
    contractors without any public-private competitions because OMB
    Circular A-76 doesn't apply to ``new'' services--even though they are
    often similar to services already ably provided by the agency's in-
    house workforce.
        DOD often sends work performed by federal employees to the private
    sector without any public-private competition on the pretext that the
    government ``is getting out of the business'' (i.e., privatizing the
    work). However, that misses the point. DOD may have decided that it
    will no longer perform the work in-house, but that doesn't mean it no
    longer needs the work. In fact, the work will continue to be done for
    DOD--but by contractors, not federal employees. And since the taxpayers
    will still be paying for that work to be done for DOD, why shouldn't
    they at least have the comfort of knowing contractors had to prove that
    they could perform the work more efficiently, more effectively, and
    more reliably than federal employees?
        According to an internal study, only 16,000 contractor jobs out of
    a particular service's entire fiscal year 1996 contractor workforce of
    224,000 were competed through OMB Circular A-76. That is, contractors
    actually had to compete with federal employees for only a tiny fraction
    of their work. In order to correct such abuses, AFGE worked with
    Congressional lawmakers last year to strengthen the law that requires
    cost comparisons be conducted prior to any DOD work being given to the
    private sector--only to encounter fierce resistance from the Pentagon.
        The fourth and final element in a contractor inventory should be a
    requirement that agencies report how work was sent to the private
    sector (i.e., the ``acquisition strategy''). That is, was the work
    competed through A-76, or was it simply taken away from federal
    employees without giving them a chance to defend their jobs? Agency
    managers would be much less likely to transfer work to the private
    sector if a contractor inventory compelled them to publicly declare, in
    each instance, how contractors came by their lucrative contracts.
                                   conclusion
        It is obvious that contracting out is not about saving taxpayer
    dollars. In fact, GAO studies and experience show that the same amount
    of work, or less, is costing more. It is not about doing a better job
    in maintaining weapons systems and providing services to warfighters.
    There is absolutely no evidence to show that the contractors are doing
    a better job than DOD's civilian workforce. It is not about better
    management control. In fact, both military and civilian managers lose
    flexibility and control of their workforce when they use contractors.
    It is not about using competition to get a ``better bang for the buck''
    or to improve efficiency because so many DOD contracts are bid under
    limited competition--or with no competition whatsoever. Contracting out
    is about politics, not improving efficiency. It is driven by the
    lobbying of the well-financed and well-connected military-industrial
    complex that President Eisenhower warned us about more than forty years
    ago. I urge the Subcommittee to consider how contracting out is
    undermining readiness and hurting taxpayers.
        Finally, Mr. Chairman, let me discuss a group of DOD civilian
    employees who are of particularly important to AFGE: civilian
    technicians. Historically, DOD has singled out civilian technicians for
    disproportionate downsizing. AFGE appreciates how the Subcommittee has
    imposed floors in order to ensure that DOD continues to employ
    sufficient numbers of civilian technicians. We urge the Subcommittee to
    impose a strong floor again this year and to provide adequate funding
    to pay for those civilian technician positions.
        AFGE's members are also concerned about the wasteful and unfair
    application to Air Reserves civilian technicians of the High Year
    Tenure (HYT) program. Currently, Air Reserves civilian technicians are
    prematurely terminated under HYT when they turn 55 if they have
    rendered 33 years of service to their country, even if they are not yet
    eligible for military retired pay. AFGE urges the members of this
    Subcommittee to correct this injustice by permitting civilian
    technicians to continue to serve their country until they meet the
    requirements for both civilian and military retirement. Failing that,
    any civilian technician separated due to the application of HYT or
    other similar programs should be considered eligible for military
    retirement even if the age and service requirements have not been fully
    met.
        Mr. Chairman, this concludes my testimony. I appreciate the
    opportunity to appear before the Subcommittee today. I would gladly
    answer any questions. AFGE looks forward to working with the
    Subcommittee as the defense appropriations bill is marked up.

        Senator Stevens. You know, the other day, when we had a
    hearing, we asked the Department and they said over half of the
    work that is competed is, in fact, won by the Government agency
    on a competition. We will follow up on the GAO again, and ask
    the Department to comment on that GAO report. I think that is
    wise.
        I am not sure we can put a moratorium on. I do not think it
    would be feasible right now. But we can get more data that can
    lead to it. We will follow up on that.
        Mr. Rogers. Thank you very much, Mr. Chairman.
        Senator Stevens. Thank you.
        Dr. Roodman, please.
    STATEMENT OF DR. DAVID ROODMAN, PROFESSOR OF MEDICINE
                AND ASSOCIATED CHAIR FOR RESEARCH AT
                UNIVERSITY OF TEXAS, HEALTH SCIENCE CENTER
                IN SAN ANTONIO, TEXAS, NATIONAL COALITION
                FOR OSTEOPOROSIS AND RELATED BONE DISEASES
        Dr. Roodman. Thank you, Mr. Chairman. Mr. Chairman, on
    behalf of the National Coalition for Osteoporosis and Related
    Bone Disease I want to thank you for giving me the opportunity
    to discuss bone disease research funding in fiscal year 2000.
        My name is Dr. David Roodman. I am professor of medicine at
    the University of Texas Health Science Center in San Antonio,
    Texas, where I also serve as associate chair for research in
    the Department of Medicine. I am appearing here this morning
    with the hope of realizing one common goal, of improving bone
    health by reducing the incidence of stress and other fractures.
        Osteoporosis, Paget's disease of bone, osteogenesis,
    imperfecta, myeloma, and other bone diseases. I ask your
    support for increased funding for the Department of Defense to
    continue its research efforts on osteoporosis and related bone
    disease in the fiscal year 2000 national security
    appropriations legislation.
        The Clinton administration requested $2.5 million in the
    fiscal year 2000 Federal budget in order to continue the
    Department of Defense's bone disease research program. This is
    very significant, since it is the first time the administration
    has recognized the importance of this research by including a
    request for continuing the program in its annual budget.
        The goal of DOD's research program is to enhance military
    readiness by reducing the incidence of stress fractures which
    incurs costs and lost time during physically intensive
    training. We need research to help determine a process which
    will make these fractures less common. This is a problem for
    both sexes, but it is particularly important for women.
    According to a recent report released by the Institute of
    Medicine entitled, Reducing Stress Fractures in Physically
    Active Military Women, the prevalence of stress fractures in
    the military has a marked impact on the health of service
    personnel.
        This study concluded that the prevalence of stress
    fractures poses a significant financial burden on the military
    by delaying completion of training of new recruits. Typically,
    the healing from stress fractures takes from 8 to 12 weeks.
        The study also discusses the significant costs associated
    with stress fractures. One study of stress fractures among
    2,000 female marine recruits estimated the cost to be
    $1,850,000 annually, with 4,120 lost training days. This delay
    in the training of new recruits impacts military readiness. The
    military needs research to determine approaches for making
    these fractures less common and maximizing bone health among
    its personnel.
        Also, with the increasing number of women in the military,
    diseases that disproportionately affect women such as
    osteoporosis become more important to the military.
    Furthermore, our scientific knowledge of the impact of bone
    diseases on ethnic and minority groups and in men is severely
    limited.
        The military health services system serves 8.4 million
    active and retired military personnel and their dependents. In
    fiscal year 1995, program costs rose to $15.3 billion. The
    economic burden of health care costs from this range of chronic
    diseases is staggering. For example, the combined annual cost
    to society for osteoporosis alone is estimated at $13 billion.
        Despite this overwhelming figure, osteoporosis is
    preventable if measures are taken before an individual reaches
    the mid-thirties, which encompasses the time period that many
    men and women spend in the military. Skeletal development in
    average healthy individuals is maximal at age 25 in women and
    at age 30 to 35 in men.
        Further, major advances in bone research have occurred that
    directly impact on this problem. Bone growth factors are being
    identified and their mechanisms of action are being intensively
    studied. New treatments for osteoporosis are being investigated
    and are very promising, as is the use of bisphosphonates in
    treating and preventing osteoporosis.
        The recent identification of the major factors that
    regulate bone destruction by the oseoclast, the primary bone
    resorbing cell, should lead to the development of new
    treatments to prevent bone loss. Thus, the DOD-supported bone
    research should help to improve bone health in our military and
    military readiness.

                               prepared statement

        On behalf of the entire bone community, we want to thank
    you, Mr. Chairman, for your past support of DOD's bone disease
    program. We hope you will consider our request to enhance the
    President's request to $10 million, thus matching the amount
    that was allocated in fiscal year 1997 to address the problems
    raised in the Institute of Medicine study. We believe this
    research will directly benefit the many military men and women
    who serve our country.
        Thank you very much.
        [The statement follows:]
                    Prepared Statement of Dr. David Roodman
        Mr. Chairman and members of the subcommittee, on behalf of the
    National Coalition for Osteoporosis and Related Bone Diseases, I want
    to thank you for giving me the opportunity to discuss bone disease
    research funding in fiscal year 2000. My name is Dr. David Roodman. I
    am a Professor of Medicine at the University of Texas Health Science
    Center in San Antonio, Texas where I also serve as Associate Chair for
    Research in the Department of Medicine. I am proud to say that the
    University of Texas Health Science Center in San Antonio has one of the
    largest groups of high quality bone researchers in the world. I also
    serve as the Chief of the Hematology Section at the Audie Murphy
    Veterans Hospital in San Antonio and Associate Scientist for the
    Biomedical Research Foundation of South Texas also in San Antonio.
        I am appearing here this morning with the hope of realizing one
    common goal of improving bone health by reducing the incidence of
    stress and other fractures, osteoporosis, Paget's disease of bone,
    osteogenesis imperfecta, myeloma, and other bone diseases. I ask for
    your support for increased funding for the Department of Defense to
    continue its research fiscal year efforts on osteoporosis and related
    bone diseases in the fiscal year 2000 national security appropriations
    legislation. As you may know, the Clinton administration requested $2.5
    million in the fiscal year 2000 federal budget in order to continue the
    Department of Defense's bone disease research program.
        This is very significant since it is the first time the
    administration has recognized the importance of this research by
    including a request for continuing the program in its annual budget.
        The goal of DOD's research program is to enhance military readiness
    by reducing the incidence of fracture, which incurs cost and lost time,
    during physically intensive training. We need research to help
    determine approaches which will make these fractures less common. This
    is a problem for both sexes, but is particularly important for women.
        According to a report recently released by the Institute of
    Medicine entitled ``Reducing Stress Fractures in Physically Active
    Women'' the prevalence of stress fractures in the military has a marked
    impact on the health of service personnel. This study, conducted by
    several committees including the Subcommittee on Body Composition,
    Nutrition, and Health of military also concluded that the prevalence of
    stress fractures poses a significant financial burden on the military
    by delaying completion of the training of new recruits. Typically, the
    healing from stress fractures takes from eight to twelve weeks. This
    study also discusses the significant costs associated with stress
    fractures. One study of stress fractures among 2,000 female marine
    recruits estimates the cost to be $1,850,000 annually with 4,120 lost
    training days. This delay in the training of new recruits impacts
    military readiness. The military needs research to determine approaches
    for making these fractures less common and maximizing bone health among
    its personnel. Also, with the increasing number of women in the
    military, diseases that disproportionately effect women, such as
    osteoporosis, become more important to the military. Furthermore, our
    scientific knowledge of the impact of bone diseases on ethnic and
    minority groups and men is severely limited.
        The military health services system serves 8.4 million active and
    retired military personnel and their dependents. In fiscal year 1995,
    program costs rose to $15.3 billion. The economic burden of health care
    costs from this range of chronic diseases is staggering. For example,
    the combined annual cost to society for osteoporosis alone is estimated
    at $13 billion. Despite this overwhelming figure, osteoporosis is
    preventable if measures are taken before an individual reaches the mid-
    30s--which encompasses the time period that many men and women spend in
    the military. Skeletal development in average, healthy individuals is
    maximal at age 25 in women and age 30 to 35 in men.
        Furthermore major advances in bone research have occurred that
    directly impact on this problem. Bone growth factors are being
    identified and their mechanisms of action are being intensively
    studied. New treatments for osteoporosis, such as the use of PTH, are
    being investigated and are very promising, as is the use of the
    bisphosphonates in treating and preventing osteoporosis. The recent
    identification of the major factors that regulate bone destruction by
    the osteoclast, the primary bone resorbing cell, should lead to
    development of new treatments to prevent bone loss. Thus the DOD's
    support of bone research should help to improve bone health in our
    military.
        On behalf of the entire bone community, we want to thank you, Mr.
    Chairman, and your colleagues on the subcommittee for your past support
    for DOD's bone disease program. We hope you will consider our request
    to enhance the President's request to $10 million (matching the amount
    which was allocated in fiscal year 1997) to address the problems raised
    in the IOM study. We believe this research will directly benefit the
    many military men and women who serve our country.

        Senator Stevens. If young men and women in the military
    develop these fractures, does that mean that later in life they
    will have some complications?
        Dr. Roodman. They can. Women especially are more prone to
    get femoral fractures, the long bones in the upper part of
    their leg, and pelvic fractures, and half of those type of
    fractures end up having surgery, and some women end up having
    rods put in to correct the fractures, so some of them will have
    increased problems from these fractures.
        The other problem is that any kind of problem that occurs
    in the military early on results in these ladies leaving the
    military early, and so we lose their ability to serve, and so I
    think it has a major impact on our overall readiness.
        Senator Stevens. Well, I think we probably do need a study
    that would go over a period of years. Who have you been working
    with? We work with Walter Reed primarily on the basic research.
    Have you worked with Walter Reed on basic research in this
    area?
        Dr. Roodman. Me personally, no, sir, but the DOD has a
    number of research grants available, and I have served on their
    study sections to review the types of research, so they have
    used universities as well as Walter Reed to look at all of
    these areas.
        Senator Stevens. I think it would be helpful if we had a
    study that was ongoing and went through a period of years and
    we got some trend lines of what happens to people after they
    develop these fractures.
        Dr. Roodman. I agree with you.
        Senator Stevens. I have three daughters, and one of them
    has had a bone fracture at one time or another, but I have
    never known whether that has an ongoing problem in later life.
        I think perhaps we could even get a study that would follow
    through on some women who stay in the military and see what
    happens, but we will do that. We will increase that. But my
    feeling is that it should go either to Walter Reed or to that
    hospital of the uniformed services which is under Walter Reed,
    I think.
        Well, we will check that, but we will do that. I think we
    have done several studies that have sort of established some
    baseline problems for the military, and with the increasing
    number of young women in the Army in particular, it is
    somewhere around 35 percent now, you have got a point, doctor.
    Thank you for coming.
        John Gannon.
    STATEMENT OF JOHN GANNON, CHAIR, DEPARTMENT OF COMPUTER
                SCIENCE, UNIVERSITY OF MARYLAND, COMPUTING
                RESEARCH ASSOCIATION
        Mr. Gannon. Good morning, Mr. Chairman. Thanks very much
    for the opportunity to comment on the DOD appropriations this
    year. I am John Gannon from the University of Maryland,
    representing the Computing Research Association.
        Senator Stevens. I cannot quite hear you with my ears.
        Mr. Gannon. I would like to address DOD's special role in
    the information technology initiative and urge this
    subcommittee to fully fund the initiative at $100 million. This
    is a small price to pay for maintaining DOD's capacity to
    respond to and shape the information technology revolution and
    to achieve their goals of information superiority.
        The information technology initiative is designed to
    revitalize the Federal investment in information technology
    research and development to ensure continued U.S. economic
    leadership, and to enable technologies that meet public needs,
    including national security. It will lead to new capabilities
    and innovations and fuel the information technology revolution.
    This revolution will continue to have a significant impact on
    the way DOD meets its responsibilities, especially war-
    fighting.
        DOD and the Defense Advanced Research Projects Agency
    (DARPA) in particular have always been at the forefront of
    information technology. Indeed, the Internet, for instance,
    grew out of DARPA communications research in the late 1960s and
    1970s. DARPA's role as an innovator and IT research must be
    further enabled to ensure that the ongoing information
    technology revolution is an advantage and not a hindrance to
    the U.S. military.
        Let me give you some idea of what the new funding might pay
    for. The new funding will be concentrated on high risk, high
    payoff ideas to produce new thrusts in hardware and software. A
    top priority would be research in software for agile networks,
    an area with enormous----
        Senator Stevens. What kind of networks?
        Mr. Gannon. Agile networks, networks that can change over
    time, an area with enormous potential for future weapons, C\3\,
    logistics and other defense systems.
        The development of software to make devices, and
    communicate between devices, robust enough and fast enough to
    accomplish precise, sophisticated tasks in real time is still
    in its infancy. With your help and provided funding, DARPA will
    be a key pioneer in this field.
        The value that we could derive from these new capabilities
    includes performance gains, cost efficiency and, most
    importantly, troop safety. For instance, we would like networks
    of robotic devices that can adapt to their surroundings and
    accomplish physical tasks. They could enter dangerous areas and
    environments, minimizing the risk of casualties or providing
    tactical advantage.
        While remote operations of robots is commonplace today,
    they would be far more useful if we could get them to interact
    with one another and their environment to accomplish precise
    and complex missions. The barrier to making this kind of
    collaboration work is software for embedded and network
    systems.
        Another area where we have a similar problem is in
    logistics. Logistic systems could be made much more efficient
    and scalable if control was decentralized so that efficient
    decisionmaking took place at the source of incoming
    information, and that information and intelligence was then
    conveyed back up the line for human understanding.
        So we have some challenging research opportunities ahead of
    us, and we need to make devices more effective than they are
    today. We need to be able to reprogram them to meet new and
    changing tactics. The time is right to make a huge leap forward
    in this technology, and that is what the information technology
    initiative is about.

                               prepared statement

        Thank you very much for being able to comment on DOD
    appropriations, and I would be happy to answer any questions
    you have.
        [The statement follows:]
                       Prepared Statement of John Gannon
        Good morning, Mr. Chairman and Members of the Subcommittee. Thank
    you very much for this opportunity to comment on fiscal year 2000
    appropriations for the Department of Defense. I am John Gannon, Chair
    of the Computer Science Department at the University of Maryland. I am
    testifying today on behalf of the Computing Research Association, an
    alliance of about 180 academic, industrial, and other organizations
    involved in and devoted to computing research.
        Today I would like to address DOD's special role in the interagency
    Information Technology Initiative and urge the subcommittee to fully
    fund the proposed fiscal year 2000 activities at $100 million. This is
    a small price to pay for maintaining DOD's capacity to respond to and
    shape the information revolution and for supporting strategic
    imperatives concerning information superiority.
        The Information Technology Initiative, as you probably know, is a
    six-agency effort to revitalize the federal investment in information
    technology R&D to ensure the U.S. economic lead in IT well into the
    21st century and to enable technologies that meet public needs and
    objectives, including, through DOD's participation, national security.
    The initiative implements the recommendations of an independent,
    Congressionally-chartered panel, the President's Information Technology
    Advisory Committee (PITAC), which found that the federal investment in
    information technology R&D is inadequate, especially long-term, broad-
    based IT research that generates new capabilities and innovations--the
    fuel of the information technology industry and of the information
    technology revolution.
        In its report, the advisory committee described how information
    technologies are rapidly transforming many aspects of society: the way
    we work, the way we learn, the way we communicate, as well as how we
    design and build things and conduct research, health care, commerce,
    and manufacturing, to name a few. These transformations are having and
    will continue to have significant impact on the way the Department of
    Defense meets its vast and challenging responsibilities, and especially
    on warfighting.
        In February, the Deputy Secretary of Defense, John J. Hamre,
    testified before the House Armed Services Committee's subcommittees on
    Military Procurement and R&D and emphasized the importance of
    information technology to the DOD mission: ``Information technology has
    provided us with a means to insure a military advantage over our
    adversaries while actually reducing our force structure. These
    technologies have made precision strike and focused logistics possible.
    They allow us to hit a target with one missile, and manage our
    logistics requirements so efficiently that we can move forces much
    farther and quicker--and sustain them--than we have ever been able to
    do before.''
        DOD's strategies for IT R&D follow from broader defense and
    warfighting strategies developed at higher levels in DOD and the Joint
    Chiefs of Staff. In particular, Joint Vision 2010 identifies the
    imperative of information superiority to U.S. objectives. Again, the
    Deputy Secretary said it better than I could: ``Information superiority
    is essential to our capability to meet the challenges of the 21st
    century. It is a key enabler of Joint Vision 2010 and its four
    fundamental operational concepts of dominant maneuver, precision
    engagement, full dimensional protection and focused logistics--because
    each demands obtaining, processing, distributing and protecting
    accurate information in a timely manner while preventing our
    adversaries from doing so. Without achieving Information Superiority we
    will, very simply, not be able to achieve the goals established in
    Joint Vision 2010.''
        The DOD--and the Defense Advanced Research Projects Agency (DARPA)
    in particular--has always been at the forefront of information
    technology R&D. You are no doubt aware that the Internet, for instance,
    originated from DARPA's efforts in the 1960's and 1970's to meet
    communications needs and challenges. DARPA has made significant
    contributions to many of the computing and communications technologies
    that have become critical to the defense mission. DARPA's role as an
    innovator in IT research must be further enabled to ensure that the
    ongoing information revolution is an advantage for and not a hindrance
    to the U.S. military and our national security and that DOD can meet
    its strategic objectives in information superiority.
        Let me give some further detail about the new funding and the
    research it would support. DOD has requested $100 million in fiscal
    year 2000 funding for its activities under the IT initiative. The
    budget would include the following components: $70 million for focused
    research programs at DARPA; $20 million for a new Advanced Research and
    Development Activity (ARDA); and $10 million for fundamental IT
    research through the DOD-wide University Research Initiative.
        DARPA's participation in the initiative would be consistent with
    its overall investment strategy of concentrating on high-risk/high-
    payoff ideas and technologies with vision and focus. The increased
    support would enable exploration of new thrusts in hardware and
    software. A top priority would be research in software for agile
    networks, that is, expansive networked systems of rapidly re-
    configurable, or even self-configuring, mechanical, sensing, and
    control devices. This area has enormous potential for the future of
    weapons, C\3\, logistics, and other defense systems. But the
    development of software to make the devices and communications among
    them robust enough and fast enough to accomplish precise, sophisticated
    tasks in real-time is still in its infancy. With your help in providing
    the funds, DARPA will be a key pioneer in this field.
        The value to be derived from new capabilities like these includes
    performance gains, cost efficiency, and, most importantly, the safety
    of our troops. For instance, networks of robotic devices that can adapt
    to their surroundings and accomplish physical tasks, called autonomous
    systems by researchers, could enter dangerous environments, minimizing
    the risk of casualties or providing tactical advantages. While the
    remote operation of robots has become a commonplace, they would be far
    more useful if we could get them to interact with each other, construct
    models of their environment, and use them to react and accomplish a
    precise and complex mission. Rather than remote human operators we
    would have human supervisors of collaborative robot ``teams.'' The
    barrier to making these kinds of systems a reality is the great
    difficulty in designing embedded and networking software to enable
    collaboration among devices.
        Another area where information technologies can revolutionize DOD's
    operations is in the automation of logistics. Current DOD weapons,
    C\3\, and logistics systems are based on hierarchical control,
    entailing gatekeeping barriers and incurring delays because of
    unnecessary human interaction. Logistics systems could be made more
    efficient and more scalable if control was decentralized so that
    decision-making took place at the source of incoming information.
    Devising locally competent and efficient mechanisms that can assess
    situations and take action, while conveying information and
    intelligence up to higher levels for review, is really hindered, again,
    by a lack of appropriate software, software that is costly to develop
    and difficult to test.
        The research challenges are daunting: we have to learn how to make
    machines communicate with each other far more effectively than
    computers on the Internet, or any existing network, communicate with
    each other today. We need to be able to reprogram devices remotely and
    on the fly to alter their capabilities as conditions or as objectives
    change. (Computing researchers call this deploying mobile code.) While
    DARPA supports base research efforts in these areas, the time is ripe
    to make huge leaps forward, and that's what the Information Technology
    Initiative is all about.
        With regard to the other components of DOD's participation in the
    initiative, ARDA is a joint effort of the Defense Department and the
    intelligence community to support long-term research on problems and
    enabling technologies relevant to intelligence and information
    security. We would also urge you to provide full funding for the
    University Research Initiative, which is an important mechanism for
    keeping university-based scientists and engineers involved in defense
    efforts.
        Some final thoughts on the IT Initiative: We cannot rely on the IT
    industry, despite its phenomenal success in the U.S. economy, to
    produce the innovations that have the most relevance to defense IT
    needs. The pace of the IT marketplace is too intense, requiring firms
    to devote the bulk of their R&D resources to shorter-term applied
    research and product development. Only a vigorous R&D effort on the
    part of DOD will ensure the development of IT capabilities designed
    specifically to meet military and national security objectives.
        The IT initiative complements and does not duplicate the High
    Performance Computing and Communications program. It is designed to
    address fundamental questions in many facets of computing research, the
    answers to which will have impact on a broader range of information
    technologies, not just high performance or high-end computing. Whereas
    HPCC was about making faster computers in a specified time frame for
    solving scientific and mission-oriented problems, the IT research
    initiative is about making computers and networks that are better--
    easier to design and use, more stable and reliable, more secure, and
    amenable to more users and uses. These objectives are no less important
    to DOD than they are to society in general, as I hope was clear from
    the examples above.
        In conclusion, Mr. Chairman, it is critical that DOD participate
    fully in the proposed Information Technology Initiative. CRA urges the
    subcommittee to provide the requested $100 million to enable these
    important research activities. Thank you very much for your time and
    attention. I would be pleased to answer any questions you might have.

        Senator Stevens. Are these readers that are coming into
    use, are they part of the information technology research?
        Mr. Gannon. I am sorry, Senator.
        Senator Stevens. The systems that read documents.
        Mr. Gannon. The OCR documents, yes, certainly to be able to
    capture information on printed pages and to be able to
    translate between languages would be part of this initiative,
    so we could get intelligence in different languages.
        Senator Stevens. Good. Well, we will do our utmost to get
    that money. I think DARPA needs some money, and I think we
    ought to stay ahead of the curve on this. I am particularly
    concerned, as I go around I see people putting in information
    that someone else has done and copying it, and I think we ought
    to find some way to stop that nonsense.
        Once it is put in, it ought to be able to be used and
    translated into another language with ease. Are you pursuing
    that?
        Mr. Gannon. We are pursuing that. There is actually a
    research project at my university on exactly this project.
        Senator Stevens. Good. Sometime I will talk to you about
    that. Thank you very much.
        I need to go vote, I am told. I will be back in about 10
    minutes.
        [A brief recess was taken.]
        Senator Stevens. I understand that Ms. Frances Visco has a
    plane to catch. I am sorry, Mr. Foil has a plane to catch, and
    with no objection we will ask for him to come forward now.
    STATEMENT OF MARTIN B. FOIL, JR., CHAIRMAN,
                INTERNATIONAL BRAIN INJURY ASSOCIATION,
                INC.
        Mr. Foil. Thank you, Chairman Stevens. Good morning. Thank
    you for allowing me to be here today. My name is Martin B.
    Foil, Jr., and I come before you this morning as the father of
    a young man with a severe brain injury, and request your
    support for $10.5 million for the defense and veterans head
    injury program.
        I am the past chairman of the Brain Injury Association, and
    now serve as a voluntary chairman of the International Brain
    Injury. I receive no compensation for these programs that I am
    testifying about today. Rather, I do contribute considerable
    sums of my own money. I am here, sir, simply because I care.
        The defense and veterans head injury program (DVHIP) is a
    collaborative effort of the DOD, the Department of Veterans
    Affairs (VA), the VI and International Brain Injury Association
    (IBIA), and together we serve active duty military personnel,
    retirees, veterans, and civilians. Our program is an exemplary
    case of dual use funding. I am pleased to report that our
    efforts continue to pay off. We conducted the first randomized
    controlled trial of brain injury rehab in the Nation. We
    compared home rehab of moderately to severely injured military
    personnel with an institutional cognitive rehab program.
        Despite a wide cost differential, $370 a year versus
    $51,000, the study showed equal outcomes for both groups; 90
    percent were able to return to work; 67 percent were fit for
    duty 1 year after injury. These findings show that our programs
    contributed to military readiness and cost-savings of military
    dollars.
        Some of our other notable activities include creation of a
    day care treatment program, treatment of neural behavioral
    problems, implementation of combat training, mild traumatic
    brain injury (TBI) study in paratroopers at Fort Bragg, and I
    think that is a necessary one, follow-up of the veterans with
    brain injuries from the Vietnam War, and sir, we are receiving
    65 percent more patients this year than last. We support all
    military veteran and civilian personnel with brain injuries,
    and their families.
        In conclusion, brain injury continues to be a major
    national health problem. More needs to be done to research
    brain injury and improve rehabilitation and patient outcomes.
    Our efforts continue to help the Nation's military readiness by
    helping service members get appropriate care and return to
    duty.

                               prepared statement

        I do, sir, respectfully request your support for this $10.5
    million project for this very important program, and I will
    answer any questions if I can, if you have any, and I just want
    to say in closing this is a real privilege to be here, so thank
    you very much, and God bless you.
        [The statement follows:]
                   Prepared Statement of Martin B. Foil, Jr.
        Dear Mr. Chairman and Members of the Senate Appropriations
    Subcommittee on Defense: My name is Martin B. Foil, Jr., and I am the
    father of Philip Foil, a young man with a severe brain injury. I am
    past Chairman of the Brain Injury Association (BIA), and I currently
    serve as voluntary Chairman of the International Brain Injury
    Association (IBIA). I am also the Chief Executive Officer and Chairman
    of Tuscarora Yarns in Mt. Pleasant, North Carolina.
        I appreciate the opportunity to provide testimony regarding the
    Defense and Veterans Head Injury Program (DVHIP). As you know, this
    program is a collaborative effort among the Departments of Defense and
    Veterans Affairs, BIA and IBIA, and it addresses the prevention and
    treatment of brain injury in the military and civilian sectors. DVHIP
    is a prime example of a dual use project that contributes significantly
    to the readiness of United States military personnel. I respectfully
    request that you support funding of $10.5 million for this program in
    fiscal year 2000.\1\
    ---------------------------------------------------------------------------
        \1\ For the past few years, we have requested and received level
    funding at $8.5 million (DOD includes $7 million in its budget and
    another $1.5 million was appropriated by Congress). This is the first
    time since 1996 that we are requesting an increase. $10.5 million
    (DOD's $7 million plus a requested $3.5 million), is very much needed
    to advance our objectives and contribute to military readiness.
    ---------------------------------------------------------------------------
        I urge your support for the DVHIP on behalf of BIA and IBIA. BIA is
    a national, non-profit organization dedicated to promoting brain injury
    awareness, understanding, and dissemination of ``best practices.''
    BIA's mission is to create a better future through prevention,
    education, research and advocacy. BIA has 43 state associations, 800
    support groups, and serves persons with brain injury, their families
    and caregivers in all 50 states and the territories. IBIA is a non-
    profit organization dedicated to the support and development of medical
    and clinical professionals and others who work to improve opportunities
    and successes for persons with brain injury. IBIA is the only
    international association representing and convening brain injury
    professionals and specialists throughout the world. BIA has been a
    member of IBIA since 1992.
        I receive no personal benefit or monetary gain from the programs I
    will discuss. I am providing this testimony simply because I care about
    the millions of Americans living with brain injuries and their
    families.
        My testimony will summarize some significant accomplishments that
    the DVHIP achieved in 1998, and what we, through the BIA and IBIA,
    expect for the coming year.
    Brain Injury in the United States and the U.S. Military
        Traumatic brain injury (TBI) is defined as an insult to the brain,
    not of a degenerative or congenital nature but caused by an external
    physical force, that may produce a diminished or altered state of
    consciousness, and which often results in an impairment of cognitive
    abilities or physical functioning. TBI can also result in the
    disturbance of behavioral or emotional functioning. TBI does not
    discriminate, and it can strike any one--military or civilian--at any
    age, at any time.
        In a February 1998 Report to Congress entitled, ``Traumatic Brain
    Injury: Programs Supporting Long Term Services in Selected States,''
    (GAO/HEHS-98-55), the General Accounting Office stated that TBI is the
    leading cause of death and disability in young people in the United
    States. TBI affects the whole family and often results in huge medical
    and rehabilitation expenses over a lifetime. Brain injury can occur in
    military combat, military training, or as a result of motor vehicle
    crashes, falls, sports and recreational incidents, child and spousal
    abuse, Shaken Baby Syndrome and violence. Every 15 seconds, someone in
    America sustains a brain injury. Brain injury and its physical and
    emotional consequences impact entire families and whole communities.
        An estimated 2 million Americans experience traumatic brain
    injuries each year. About half of these cases result in at least short-
    term disability, and 51,000 people die as a result of their injuries.
    Each year, approximately 260,000 persons require hospitalization for
    TBI (30 percent of which show disabilities a year post injury), and
    over 1 million people receive emergency medical care for TBI. Annually,
    about 90,000 people sustain severe brain injuries leading to long term
    disability, and there are now 5.1 million Americans living with long
    term severe disability and 6.5 million with some form of disability as
    a result of brain injury.
        Each year, approximately 7,500 military personnel are admitted to
    military and VA hospitals because of brain injury. This number does not
    include personnel who experienced mild brain injury, concussions, or
    those receiving emergency room treatment and early release. The cost to
    the military has been estimated at $30 million annually in medical
    retirement payments alone.
    Defense and Veterans Head Injury Program
        The Defense and Veterans Head Injury Program (DVHIP) is a close
    collaborative program among the Department of Defense (DOD), the
    Department of Veterans Affairs (VA), BIA and IBIA. It is an integrated,
    multidisciplinary Disease Management System focusing on both peacetime
    and combat traumatic brain injury (TBI). Its activities span the
    spectrum of brain injury from prevention, education, community support,
    and advocacy, to clinical care and community rehabilitation, and basic
    and clinical applied research focused on persons with TBI.
        The collaborative efforts of the DVHIP contribute to our nation's
    military readiness by preparing personnel for active duty, helping
    injured service members return to work, and providing critical support
    to keep families together during the difficult times after brain
    injury. The DVHIP is a prime example of a dual use program that serves
    a significant national purpose in response to the huge economic and
    social costs of TBI.
        The DVHIP's primary objective is to ensure that military personnel
    and veterans with brain injury receive specialized evaluation,
    treatment, and follow-up, while at the same time, help define optimal
    treatment, and provide state of the art education, information and
    support for persons with TBI and their families and caregivers
    nationwide.
        The work of the DVHIP has resulted in significant findings that
    offer cost savings to the U.S. military and civilian sectors. For
    example, in 1998 analysis was completed of a randomized controlled
    study at Walter Reed Army Medical Center comparing home rehabilitation
    of moderately to severely injured service members with an institutional
    cognitive rehabilitation program. Despite a cost differential of $370
    for home care and $51,000 for in-patient care, the study showed equal
    outcomes for both groups. In spite of the relative severity of their
    injuries, 90 percent were able to return to work and 67 percent were
    fit for duty one year after injury. This represents the first major
    randomized controlled trial of TBI rehabilitation in the nation. These
    findings highlight the potential of home rehabilitation and have major
    implications for TBI rehabilitation nationwide. Further research of
    this kind applied to the civilian sector could potentially save
    billions of health care dollars annually.
        Some of the significant activities of the program are as follows:
                Research and Treatment
        Expanding peacetime and combat TBI patient registries (as of
    February 1999, the registry included 7,540 patients).
        Continuing support of the 7 primary DVHIP TBI centers \2\ and 16
    DVA secondary network sites, including several randomized controlled
    trials of rehabilitation and of pharmacotherapy in persons with both
    acute and chronic TBI.
    ---------------------------------------------------------------------------
        \2\ Walter Reed Army Medical Center, Washington, DC; James A. Haley
    Veterans Hospital, Tampa, FL; Naval Medical Center San Diego, San
    Diego, CA; Minneapolis Veterans Affairs Medical Center, Minneapolis,
    MN; Veterans Affairs Palo Alto Health Care System, Palo Alto, CA;
    Hunter McGuire Veterans Affairs Medical Center, Richmond, VA; Wilford
    Hall Medical Center, Lackland Air Force Base, TX.
    ---------------------------------------------------------------------------
        Developed and implementing a TRICARE demonstration project allowing
    rehabilitation of military dependents at DVHIP VA medical centers.
        Consolidated the basic national infrastructure of the DVHIP and are
    now receiving a marked increase in patient referrals.
        Developed and implementing a Combat Training Mild TBI study in
    paratroopers at Ft. Bragg, NC, involving pre-injury baseline testing
    and extensive post-injury performance evaluation.
        Developed a protocol for a Phase III follow-up of Vietnam War Head
    Injured veterans (who are now some 30 years post injury) providing a
    unique opportunity to study TBI and the aging process.
        IBIA/BIA/DVHIP furthers the development of evidence-based practice
    guidelines to improve treatment delivery and outcomes for acute TBI,
    mild TBI, and penetrating head injuries.
        IBIA/DVHIP created a day treatment program for persons with TBI and
    their families in a community setting and continues to evaluate with
    BIA other equally effective and less costly alternatives to in-patient
    rehabilitation.
        IBIA/DVHIP supports research and treatment to address
    neurobehavioral problems that affect return to work and fitness for
    duty rates.
        IBIA/DVHIP conducts collaborative outcomes research utilizing
    functional Magnetic Resonance Imaging (fMRI) to identify brain lesion
    location and create diagnostic criteria for mild and moderate brain
    injuries which are significant problems in the military; this research
    is valuable to maintaining readiness by discerning who is capable of
    returning to active duty.
        IBIA/DVHIP conducts studies on executive dysfunction and decision
    making in persons with mild TBI (mild TBI is the single most important
    reason for failure to return to active duty, work or school); this
    study complements efforts to improve military readiness.
                Education, Information and Support Services
        BIA/IBIA/DVHIP sponsors a Neurobehavioral Institute, a think-tank
    meeting of leaders in science, medicine, law, ethics and consumer
    issues relating to brain injury. The 1999 Institute will build on some
    of the work begun at the 1998 meeting and will result in practice
    guidelines on the vegetative and minimally conscious states. The 1999
    Institute will also begin to develop a framework for evidence based
    guidelines for children and adolescents.
        BIA/DVHIP established the American Academy for the Certification of
    Brain Injury Specialists (AACBIS) and develops and disseminates
    materials used to train staff working in brain injury programs at DVHIP
    sites. Materials include the AACBIS Clinical Examiner Manual, AACBIS
    Brochure and Training Manual Level I. Preliminary work to develop Level
    II standards and curriculum are underway in 1999.
        BIA/DVHIP is revising its DVHIP Case Manager's Manual, and reprints
    are planned for the DVHIP Information Brochure; Road to Rehabilitation;
    ``Causes, Consequences and Challenges of Brain Injury'' Brochure and an
    Information and Resource Manual.
        The Information and Resources Department of BIA acts as a
    clearinghouse of community service information and resources for
    military personnel, veterans and civilians and responded to 14,000
    inquiries for assistance in 1998 through its free Family Help Line.
    Through BIA's state affiliates 50,000 calls for assistance are answered
    each year, and hundreds of thousands of informational brochures,
    pamphlets, books, videos, and other material are distributed.
        BIA/DVHIP educational brochures feature background information on
    brain injury, the DVHIP, and the lead and network DVHIP sites. They are
    available at any one of the military or Department of Veterans Affairs
    Medical Centers, and are also provided to referral sources in both
    military and civilian sectors in an effort to increase awareness of the
    DVHIP and to increase accessions to the research protocol.
        BIA publishes a bimonthly newsletter, TBI Challenge! with a
    circulation of over 30,000, and a full color quarterly magazine for
    professionals, Brain Injury Source with a circulation of over 20,000.
    Each issue of the Source features a regular column entitled ``Military
    Zone'' which is written by staff members from DVHIP sites.
        BIA's Brain Injury Resource CenterTM (BIRC), provides
    easy access to a multi-media computer library through a touch-screen
    monitor and program that allows users to learn about brain injury at a
    personalized pace. The BIRC is available in over 60 locations across
    the country, including 18 DOD and VA hospitals.\3\ Additional locations
    will be added in 1999, and work has begun to develop the BIRC into a
    CD-Rom for enhanced, affordable access for the millions of potential
    users.
    ---------------------------------------------------------------------------
        \3\ Central Arkansas Veterans Health Care Network, North Little
    Rock, AR; Darnall Army Community Hospital, Ft. Hood, TX; Denver
    Veterans Affairs Medical Center, Denver, CO; Hines Veterans Affairs
    Medical Center, Hines, IL; James A. Haley VA Medical Center, Tampa, FL;
    Madigan Army Medical Center, Takoma, WA; Minneapolis VA Medical Center,
    Minneapolis, MN; National Naval Medical Center, Bethesda, MD; Palo Alto
    VA Medical Center, Palo Alto, CA; Portsmouth Naval Medical Center,
    Portsmouth, VA; Richmond VA Medical Center, Richmond, VA; San Diego
    Naval Medical Center, San Diego, CA; San Juan VA Hospital, San Juan,
    Puerto Rico; Seattle Veterans Affairs Medical Center, Seattle, WA;
    Tripler Army Medical Center, Hawaii; Walter Reed Army Medical Center,
    Washington, DC; Wilford Hall Air Force Medical Center, San Antonio, TX;
    Womack Army Medical Center, Fort Bragg, NC; VA Medical Center,
    Albuquerque, NM.
    ---------------------------------------------------------------------------
        BIA is launching a diversity initiative to reach out to persons
    with different cultural viewpoints in the military and civilian
    communities, including developing spanish editions of selected
    materials and information on disk.
        BIA developed DVHIP's website in 1998 and will continue to work on
    providing DVHIP resources and information. BIA's website increased its
    monthly unique visitors to 7,700 by December 1998.
        BIA/DVHIP continues its Violence and Brain Injury Project (VBIP),
    which is based on the premise that brain injury is a significant risk
    factor for violent behavior. VBIP addresses various aspects of violent
    behavior, including causes, prevention and education.
        The VBIP is responsible for integrating prevention education
    curricula into DOD and civilian schools and military communities. The
    HeadSmart Schools Program is currently being used in 127
    schools nationwide including 26 military dependent schools, affecting
    the education of over 100,000 students. In addition, there are
    HeadSmart Military Communities in 7 military facilities.\4\
    ---------------------------------------------------------------------------
        \4\ Fort Bragg, NC; Fort Knox, KY; Fort Campbell, TN; Fort Bliss,
    TX; Fort Sam Houston, TX; West Point, NY; Wright Patterson Air Force
    Base, OH.
    ---------------------------------------------------------------------------
    Conclusion
        The work of the DVHIP in collaboration with BIA and IBIA is a
    significant contribution to the health and readiness of the United
    States military. Recent DVHIP studies have resulted in findings that
    can have enormous effects on the treatment and rehabilitation of
    military personnel, veterans and civilians.
        As the United States stands on the brink of the new millennium,
    great strides are being made in the fields of medicine, pharmaceuticals
    and scientific research. DVHIP is in a unique position to combine the
    research with the program's education, information and support
    services. This synergy allows DOD and VA, in partnership with BIA and
    IBIA, to help prevent and treat this ``silent epidemic'' and for the
    DVHIP program to lead the nation in providing state of the art care to
    all active duty and retired military personnel and veterans with brain
    injury as well as improving the lives of civilians with brain injuries,
    their families and caregivers. We respectfully request funding of $10.5
    million for fiscal year 2000 to continue these important programs.
    Thank you, and God bless you!

        Senator Stevens. That is the budget request?
        Mr. Foil. Yes, it is.
        Senator Stevens. We will maintain it.
        Mr. Foil. Thank you very much, Mr. Chairman.
        Senator Stevens. Thank you, sir.
        Our next witness is Dr. Quickel.
    STATEMENT OF DR. KENNETH E. QUICKEL, JR., PRESIDENT,
                JOSLIN DIABETES CENTER
    ACCOMPANIED BY RONALD C. VIOLI, CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
                CHILDREN'S HOSPITAL OF PITTSBURGH, PENNSYLVANIA

        Dr. Quickel. Mr. Chairman and staff, thank you for
    providing us this opportunity to appear. I am Dr. Ken Quickel,
    president of the Joslin Diabetes Center in Boston.
        Mr. Ron Violi, on my right, of the Children's Hospital of
    Pittsburgh and I are here to present a joint diabetes proposal,
    and I would like to report on progress to date with the ongoing
    Joslin component of that project that I presented last year.
        We greatly appreciate the continued funding we received
    through the 1998 and 1999 defense appropriations acts for the
    Joslin-DOD-VA diabetes detection prevention and care project,
    and we request a budget of $7 million to continue and expand
    this project in fiscal year 2000.
        The program has two critical modules that were developed at
    Joslin. One is a telemedicine module that allows you to conduct
    eye exams at very long distance to detect and prevent blindness
    that diabetes causes. The second module is a self-management
    training strategy that prepares individuals with diabetes to
    care for themselves and to prevent the complications.
        In Hawaii, we have now deployed both the self-management
    training module and the eye telemedicine module at Tripler Army
    Medical Center and also at the Honolulu VA clinic there.
        In New England, we now have the eye telemedicine module
    located at the VA hospitals in West Roxbury and Brockton, and
    will do also in Togas, Maine, before the summer is over.
        Research protocols for both programs have been developed,
    and are ongoing. We have completed studies validating that the
    simplified eye telemedicine strategy that we are employing at
    these sites is as effective as the gold standard currently in
    use elsewhere, and there will be on-site clinical studies
    throughout this period of time.
        Joslin and the Department of Defense have established a
    series of critical operational tasks over the next fiscal year.
    In Hawaii, Tripler will operate a central eye reading center,
    and there will be three remote eye imaging centers connected by
    telemedicine strategies. They will also conduct monthly self-
    management training for selected personnel at high risk of
    diabetes complications.
        Similarly, in New England the VA will operate three remote
    imaging centers throughout New England and we will read them at
    a central reading center at Joslin, and the VA hospital in West
    Roxbury will provide self-management training on a monthly
    basis to selected veterans and their families. That process has
    already started.
        This is the last year I will testify before you as the
    president of the Joslin Diabetes Center, since I will be
    retiring in January. I would like to express my very deep
    appreciation for the support you have given over the years to
    these very important initiatives to help our men and women in
    uniform and their families.
        I would like to tell you that I can thank you with more
    than professional knowledge, because I myself have diabetes,
    and I know how very important these services are in preventing
    the complications of this potentially devastating disease.
        I am pleased to introduce my colleague, Ron Violi, chairman
    and chief executive officer (CEO) of Children's Hospital of
    Pittsburgh.
        Mr. Violi. Mr. Chairman, the development of juvenile
    diabetes research at Children's Hospital of the University of
    Pittsburgh has a long and productive history. In contrast to
    other large cities, those born in Pittsburgh have a high
    tendency to stay in the region. The fact that families do not
    leave the area has allowed us to conduct quality long term
    research on the cause and treatment of juvenile diabetes.
        At Children's, we have made major strides in diabetes
    research under the leadership of Dr. Massimo Trucco. Dr. Trucco
    is recognized around the world for his work in the field of
    diabetes. Last year, he was the first to report a link between
    childhood diabetes and a virus, and the immune system response
    that could trigger the onset of juvenile diabetes.
        His findings suggest that we are one step closer to
    understanding the cause of diabetes and to develop a vaccine to
    protect those at risk. A report released by the Diabetes
    Research Group recommends increasing research to better
    understand the cause of juvenile diabetes.
        For fiscal year 2000, we are proposing expansion of
    juvenile diabetes research program that was initially funded
    through the Department of Defense. Continuing this project will
    allow us to work with the Department to address the incidence
    of juvenile diabetes among employees, dependents, and enlisted
    personnel.
        With increased funding, we believe our research will enable
    us to predict and prevent the onset of diabetes. At Children's,
    we are working to find a cure for this disease. The funding for
    such significant research cannot come from only one source, but
    must be provided through a combination of public and private
    dollars.
        We are in the midst of trying to secure $20 million worth
    of additional funding through public and private sources,
    including the National Institute of Health (NIH), the Juvenile
    Diabetes Foundation, private donors, and through our own
    Commonwealth. However, a substantial fertile commitment is
    critical to the success of this effort. Therefore, we are
    requesting $7 million for the second year of this initiative.

                               prepared statement

        We plan to work with our colleagues from Joslin on a
    project that will allow us to improve the treatment of people
    with diabetes and to concentrate our collective efforts on
    finding a cure for this disease.
        Thank you for your time. We will answer any questions you
    might have.
        [The statement follows:]
               Prepared Statement of Dr. Kenneth E. Quickel, Jr.
                                  introduction
        Mr. Chairman, and Members of the Committee, thank you for this
    opportunity to appear before you. I am Dr. Kenneth Quickel of the
    Joslin Diabetes Center, located in Boston, Massachusetts. Joining me
    today to present our joint diabetes project proposal is Mr. Ronald
    Violi of the Children's Hospital of Pittsburgh. We are here to present
    to you a joint proposal that addresses the growing health concerns and
    costs related to diabetes, specifically in the Departments of Defense
    and the Veterans Affairs.
        Mr. Violi and I are here today to present a balanced, cooperative
    diabetes proposal, appropriately named the Joint Diabetes Project. Each
    of our institutions brings unique strengths and extraordinary
    scientific and patient care talent to this partnership. Together we
    offer the most advanced detection, treatment, prevention, and basic and
    applied research approaches in the world to manage diabetes and its
    resulting complications. The proposal, which we will detail later,
    provides the most balanced approach available to the problems
    associated with both Type 1 and Type 2 diabetes (or juvenile and adult
    onset, respectively).
                joslin diabetes center plan for fiscal year 2000
        In fiscal year 2000, Joslin will continue to concentrate on the
    patient populations of the Department of Defense--which includes a
    large number of dependents as well as employees--and the Veterans
    Administration.
        Mr. Chairman, Joslin Diabetes Center seeks funding for an extension
    of the project that the Congress funded through the fiscal year 1998
    and 1999 Defense Appropriations Acts for the DOD/VA Diabetes Detection,
    Prevention and Care Project (Program Element #630002, Project # 941).
        For fiscal year 2000, Joslin will refine and develop the
    demonstration pilot projects funded in fiscal year 1998 and 1999 in the
    Hawaii and New England regions. In Hawaii we have set up the Joslin
    Vision Network (JVN) at the Tripler Army Medical Center and the
    Honolulu VA Clinic. At the New England VA (VISN-I), we have the JVN
    located at the West Roxbury/Boston and Brockton VA Hospitals with
    Togus, Maine scheduled for mid-summer deployment. We have also deployed
    the Joslin Diabetes Outpatient Intensive Treatment and Education (DO
    IT) Programs to Tripler Army Medical Center and the West Roxbury VA
    Hospital.
        Research protocols for the JVN and DO IT programs have been
    cooperatively developed and are in the early stages of implementation.
    From these pilot models, we will develop evidence based practice models
    that can be implemented effectively in current and future additional
    sites.
        The use of the JVN equipment and the expansion of screening
    opportunities in the two regions will be the focus for fiscal year 2000
    activities. The advancements in DOD and VA capabilities to detect and
    treat diabetes will result in benefits and cost savings to our patients
    over a period of time. This also results in cost savings to the health
    care systems of DOD and VA. The real thrust of the program's importance
    is not the introduction of the new equipment and techniques--the real
    importance is the use of the detection equipment and education in
    treatment protocol that minimize the incidence and severity of the
    impact of diabetes.
        Following the expansion of the JVN and incorporation of the DO IT
    protocol within the two regions during fiscal year 2000, Joslin will
    provide technical assistance in file management, patient follow up and
    monitoring, and the design of long term studies to measure the impact
    of the introduction of these two new elements, to the DOD and VA
    medical networks and infrastructure.
        Joslin will also work with DOD and VA medical personnel on
    developing documentation for use in other DOD/VA locations and with
    their respective geographically adjacent civilian populations. The
    promise of the pilot programs lies in the reach to civilian populations
    and the expanding use within both DOD and VA.
        Unforeseen delays in the production of the detection component of
    the project have resulted in a modified deployment schedule for the
    current fiscal year. The good news is that the production cost per unit
    has decreased dramatically over the past year, permitting the
    appropriated funds more purchasing power. Thus, we experienced a
    smaller scale reduction than we had anticipated when we faced the
    fiscal year 1999 conference dollar level, which was lower than the
    amount carried in the House bill.
        For the fiscal year 2000 project phase, the first fully operational
    year, we have established the following tasks, targets, and activities:
      --The three sites in Hawaii will become fully operational, with
            Tripler Army Medical Center operating the Reading Center.
      --Tripler will provide the DO IT program on a monthly basis for
            military personnel, families, and veterans.
      --The New England VA will have its three Image Acquisition Sites
            fully operational, with Joslin providing the Reader Center
            component.
      --The VA hospital in West Roxbury will also provide one DO IT program
            on a monthly basis for veterans and family members.
      --All research protocols currently established will be completed;
            while new studies will be developed to continue the product/
            program evaluation.
      --One new site will be developed within the Department of the Army to
            include a full JVN and DO IT product.
      --One new satellite will be developed within the VA (VISN-1) region
            for image acquisitions.
      --Additional research protocols will be established to accommodate
            these two additional sites.

    Fiscal Year 2000 Joslin Diabetes Center Funding Request--$7,000,000

    JOSLIN FUNDING SUMMARY:
        DOD/VA Program Participation Costs (current)........      $1,200,000
        DOD Management and Administration Fees..............         840,000
        Joslin Diabetes Center Expenses.....................       4,960,000
                        --------------------------------------------------------
                        ____________________________________________________
          TOTAL, JOSLIN PROJECT COST........................       7,000,000
    Joslin Diabetes Center Funding Justification
        Over the past two years, Joslin prepared a budget that covered the
    costs that Joslin estimated it would reasonably incur. We did not
    budget for program costs of the DOD and VA that were necessary to carry
    out this Federal partnership. Neither did we budget for DOD's
    management and administration fees that were levied against the
    project's appropriation.
        Therefore, the budget that Joslin is submitting this year addresses
    all known expense items and Federal agency participation costs. The
    standard management and administration fee has been approximately 14
    percent for each of the past two years. These fees are spread across
    several agencies within DOD, which is apparently a standard practice
    for extramural contracts.
        We have taken those elements into consideration and budgeted
    accordingly. Of the total of $7 million related to the Joslin Diabetes
    Center pilot program, $1,200,000 of this amount would be split among
    DOD and VA for their program costs associated with this project. Of the
    remaining $5,800,000, we estimate that $840,000 would be levied by DOD
    against the project. Therefore, the remaining $4,960,000 would be used
    for the development and purchase of equipment, supplies, travel and
    Joslin personnel to carry out the program objectives outlined in this
    statement.
          children's hospital of pittsburgh plan for fiscal year 2000
    Children's Hospital of Pittsburgh Background
        The development of juvenile diabetes research and clinical care at
    Children's Hospital of Pittsburgh (CHP) and at the University of
    Pittsburgh Medical Center (UPMC) has had a long and highly productive
    history for over fifty years. During this time, physicians at CHP and
    UPMC have offered patients from western Pennsylvania, eastern Ohio and
    northern West Virginia, a unique and collaborative approach directed
    toward the comprehensive study of diabetes in children and adolescents.
        This research has greatly benefited from the fact that in contrast
    to other larger cities in the United States, those who are born in
    Pittsburgh have a high tendency to remain in the City. This lack of
    transience in Pittsburgh has bolstered our ability to conduct quality
    longitudinal research, as several generations of residents have been
    able to develop long-standing and compliant relationships with our
    physicians and researchers. These patients have in turn benefited from
    the unique conglomerate of medical institutions which the University
    offers which allows diabetes to be studied from a variety of diverse
    juvenile and adult perspectives, while allowing therapies to be
    approached from both the preventive and transplantation intervention
    aspects. This has enabled CHP to establish epidemiologically sound
    diabetic registries encompassing three generations of patients.
        Tremendous strides in diabetes research have been made at CHP under
    the outstanding leadership of Massimo Trucco, M.D., Hillman Professor
    and Director of the Division of Pediatric Immunogenetics at Children's
    and Professor of Pediatrics at the University of Pittsburgh Medical
    Center. Dr. Trucco also holds secondary appointments at the University
    in the Departments of Genetics and Epidemiology. We are pleased to have
    Dr. Trucco leading our diabetes efforts, as he is both nationally and
    internationally recognized for his expertise in the field of the
    immunogenetics of diabetes and has an outstanding track record of
    scientific contribution in prestigious journals. Dr. Trucco's primary
    focus has been the study of diabetes mellitus in children, from both
    the genetic and immunologic perspectives. He is a recognized authority
    in HLA-related research and clinical histocompatability and
    transplantation.
        Dr. Trucco's recent groundbreaking research has established a link
    between a common childhood virus, Coxsackievirus B or CVB, which may
    make the body turn against itself in some children, potentially
    triggering the onset of juvenile diabetes. Researchers have known that
    juvenile diabetes is associated with viral infections, but they did not
    know exactly how the virus caused the damage. Dr. Trucco's new evidence
    suggests that CVB can produce a ``superantigen'' that can cause the
    cells of the immune system to act in an unusually aggressive way,
    whereby cells that normally protect the body turn against it. Dr.
    Trucco has found that because some children's genetic makeups cause
    them to be more susceptible, this relatively common virus can
    potentially become serious.
        With this evidence, Dr. Trucco is one step closer to understanding
    the initial cause of diabetes and to potentially developing a vaccine
    to prevent diabetes in children who are predisposed to the disease.
    This exciting research has tremendous implications for the future for
    the prevention of juvenile diabetes as well as the elimination of the
    high physical, emotional and financial costs of the long-term
    management of the disease.
        This research, combined with other complementary scientific efforts
    at CHP and UPMC, have resulted in the creation of the Diabetes
    Institute of Pittsburgh, which has the goal of understanding,
    preventing and curing diabetes.
    Fiscal Year 2000 Program Overview
        As recommended in the recent report released by the Congressionally
    established Diabetes Research Working Group, efforts to understand the
    immunological basis of juvenile diabetes and research on islet cell
    transplantation must be intensified. There are extraordinary
    opportunities with the rapid advancements in scientific knowledge and
    in the development of new technologies. Two of these opportunities are
    in the areas of the genetics of diabetes and autoimmunity and the beta
    cell, important research areas for CHP.
        For fiscal year 2000, Children's Hospital of Pittsburgh will
    continue to expand upon the initial juvenile diabetes research program
    that was funded by Congress through the Department of Defense in fiscal
    year 1999. The Diabetes Institute of Pittsburgh presently maintains
    expertise in the determination of molecular genetics markers for
    susceptibility to diabetes and in the determination of molecular and
    immunologic markers for monitoring diabetic pathology progression. The
    expansion of the program will allow for the further refinement of the
    research protocols that have been undertaken by the Institute. To
    further this important research, the Institute will build upon its
    pancreatic islet isolation facility which is dedicated to human, mouse
    and porcine islet transplantation, while also developing a diabetes-
    committed Molecular Biology Core for the construction and testing of
    vectors suitable for gene therapy projects.
        In addition, further expansions are also planned for the Immunology
    Core for the definition of diabetes prediction markers and in the
    Imaging Facility to allow for an Imaging Core for scientists focusing
    on the study of diabetes. These initiatives will build on an
    outstanding scientific base and expand opportunities so that
    investigators can reach for even higher levels of achievements in
    finding a cure for diabetes.
    Other Tasks, Activities or Goals
        This research will allow CHP to work with the Department of Defense
    in addressing the incidence of juvenile diabetes among the dependents
    of employees and enlisted personnel. These research programs will
    ultimately enhance the ability to predict and prevent the onset of
    juvenile diabetes and its resulting medical complications. This
    research, conducted in a clinical setting, dramatically enhances our
    ability to more rapidly take scientific discovery from bench to
    bedside. Following the establishment of these programs, treatment
    protocols will be established which will allow for an efficient, safer
    and prolonged acceptance of transplanted pancreatic islets in our
    diabetic patients, guaranteeing appropriate insulin production.
    Fiscal Year 2000 Children's Hospital of Pittsburgh Funding Request--
            $7,000,000
        Funding for such a significant research enterprise cannot come from
    one source, but must be provided from a combination of public and
    private dollars. CHP, in partnership with UPMC, has provided start-up
    funds and some ongoing support for Dr. Trucco and his team. In
    addition, research laboratories are being expanded for the recruitment
    of additional scientists who will provide further synergistic
    opportunities in Pittsburgh. Funding continues to be secured from the
    National Institutes of Health and from organizations like the Juvenile
    Diabetes Foundation. However, in our request for a private-public
    partnership, a substantial infusion of federal dollars is critical to
    the success of this effort. Public funds provide strong and visible
    leverage to secure matching private philanthropic contributions from
    the Pittsburgh region. The project then becomes a true partnership that
    will make an impact, not only on a regional level, but on a national
    level as well.

    CHP/Diabetes Institute of Pittsburgh Expenses

    Expansion of Current Resources and Laboratory Expenses........$2,500,000
    Recruitment of Complementary Personnel........................ 1,600,000
    Molecular Biology Core........................................ 1,000,000
    Immunology Core............................................... 1,500,000
    Imaging Core..................................................   400,000
                        --------------------------------------------------------------
                        ____________________________________________________

          TOTAL, CHP/DIABETES PROJECT COSTS....................... 7,000,000
    Summary
        The proposed Joint Diabetes Project will provide for the continuing
    improvement of health and costs related to diabetes in the Departments
    of Defense and Veteran Affairs through the Joslin/DOD/VA Diabetes
    Detection, Prevention and Care Project (Program Element #630002,
    Project #941) and will enable Children's Hospital of Pittsburgh to
    expand juvenile diabetes research to benefit dependents of employees
    and enlisted personnel.
        This collaborative initiative will allow each institution to
    contribute its unique patient care and scientific capabilities to
    further improve the diagnosis and treatment of those with diabetes and
    to concentrate on efforts to identify a cure for the disease. The
    shared goal of this approach will help to maximize current efforts to
    reduce the incidence of diabetes and diabetes-related complications
    within the jurisdictions of the Departments of Defense and Veterans
    Affairs as well as society as a whole, while also working toward the
    ultimate goal of a cure.

    Summary--Joint Diabetes Project, Fiscal Year 2000 Funding

    Joslin Diabetes Center..................................     $7,000,000
    (DOD and VA Costs, DOD Administration and Management
        Fees)...............................................     (1,840,000)
    Children's Hospital of Pittsburgh.......................      7,000,000
    (DOD Administration and Management Fees)................       (980,000)
                        --------------------------------------------------------
                        ____________________________________________________
          Total Program.....................................     14,000,000

        Mr. Chairman, we are pleased to be a part of this project with
    Department of Defense and appreciate your Committee's support. We would
    be pleased to answer any questions from you or any other Members of the
    Committee.

        Senator Stevens. There is $7 million in the 1999 budget for
    children's diabetes?
        Mr. Violi. That is 2000. We had a request in for last year
    that we are still working with.
        Senator Stevens. You did receive $7 million last year?
        Mr. Violi. No. Last year it was $1.5 million.
        Senator Stevens. $1.5 million. Well, we will do our best.
    Neither one of these is in the budget. I am informed that there
    was $4.5 million in this year's budget.
        Mr. Violi. Correct.
        Senator Stevens. But there is a zero request from the
    administration. And I will try my best to do it.
        We have a new project in Alaska, by the way, on
    telemedicine. All Federal agencies--after all, we are one-fifth
    the size of the United States--are involved in a telemedicine
    joint project. Doctor, despite your retirement, I would
    appreciate it if you would contact those people and see when it
    would be possible to put some similar facilities in Alaska to
    do this telemedicine testings.
        Dr. Quickel. That is certainly possible. In fact, our
    intent is that once having developed these systems at Tripler
    and in the VA, that those then could be extended nationwide in
    multiple sites. So the long-range intent is to provide access
    to the entire Nation.
        Senator Stevens. We have a situation, with our State being
    so large, that often the cost of transportation to get to
    medical care is much greater than the cost of medical care.
        Dr. Quickel. Absolutely.
        Senator Stevens. So if we can possibly do it by
    telemedicine, we should do it. For your information, my father
    went blind because of diabetes, and I am very sensitive about
    the study that you are doing on juvenile diabetes. We will do
    our best to help. I am not sure I can meet the total request of
    this $14 million here, but we will do our best. And we will
    increase what we had from last year, we can assure you of that.
        Thank you very much.
        Our next witness is Sharon Barnes. And you are with the
    National Military and Veterans Alliance.
    STATEMENT OF SHARON BARNES, NATIONAL MILITARY AND
                VETERANS ALLIANCE
        Ms. Barnes. Mr. Chairman, Colonel Charles Partridge, our
    Legislative Counsel, asked me to convey his regrets, that he
    was called out of town and could not be here today, and I am
    delivering his statement.
        On behalf of the National Association for Uniformed
    Services and the National Military Veterans Alliance, we thank
    you for allowing us to present our views to you today. Our
    members appreciate your position on the emergency supplemental,
    to include funds for military pay and retirement. Anyone who
    thinks that the current state of military pay and retirement is
    not a threat to medical readiness in an emergency has not kept
    up with the huge losses of experienced personnel, recruiting
    problems, and the erosion of the military compensation package
    over the years.
        The Senate proposal, as passed in S. 4, to fix military pay
    and the Redux retirement system is the correct course. It would
    begin to address the military pay discrepancy and give military
    personnel options for retirement. We thank you and urge you to
    stand fast on this proposal.
        Mr. Chairman, the military community, as well as all
    Americans, are proud of your World War II service, especially
    as a C-47 pilot in the China-Burma-India theater. I would like
    to discuss the current plight of military medicine, relating it
    to the relationship of a pilot to his crew chief. Although not
    a pilot, our Legislative Counsel, Colonel Charles Partridge,
    flew many hours in Vietnam, and observed firsthand the trust
    and confidence that must exist between the pilot and his crew
    chief. He never heard a crew chief say that an aircraft might
    fly or maybe the oil levels are OK; that crew chief put all of
    his skills and reputation on the line every time that aircraft
    took off.
        Unfortunately, this is now what is happening in military
    medicine today. Last month, the military Surgeons General
    stated that their fiscal year 2000 budget was executable but
    not fully funded. This is the equivalent of the crew chiefs
    stating the airplane can take off, but there are no guarantees
    after that. This would not be acceptable to the crew chief nor
    the pilot, and it is not an acceptable way to deliver health
    care to patients.
        This year, fiscal year 1999, hospital commanders are
    desperately short of funds. Their oldest, sickest patients are
    paying the price by not getting the drugs they need or being
    turned away from military hospital. In a April 17 summit
    meeting, the DOD Comptroller, Health Affairs, and Surgeons
    General disagreed not on what the military health system should
    do or how to accomplish it between fiscal year 2000 and 2005,
    but how big the shortage is. The Comptroller says it is only
    $2.2 billion, the Assistant Secretary, only $2.6 billion;
    Surgeons General, $4.3 billion.
        Based on earlier GAO estimates, even the Surgeons General
    figure will not fully fund the system or problems not
    considered. For example, shortages in funding have resulted in
    hospital commanders refusing to issue drugs and sending TRICARE
    patients to buy them from TRICARE contractors at a much higher
    price than the MTF pays. The result is a $200 million contract
    dispute that threatens the future of TRICARE.

                               prepared statement

        Mr. Chairman, we need a plan from DOD, not demonstrations
    and tests, to provide care for every military beneficiary by
    the year 2000, expanding FEHBP and the military's National Mail
    Order Pharmacy now to all who have no access. Solving the
    health care problems, coupled with the passage of the
    provisions of S. 4, will turn recruiting and retention around,
    restore morale, and promote a climate where, once again,
    military personnel and retirees can honestly recommend military
    service as a career.
        Thank you very much.
        [The statement follows:]
                Prepared Statement of Col. Charles C. Partridge
                                  introduction
        Mr. Chairman and distinguished members of the Committee, NAUS and
    the National Military and Veterans Alliance would like to express its
    appreciation to you for holding these important hearings. The testimony
    provided here represents the collective views of our members.
        The Alliance includes 20 military and veterans' organizations.
    These organizations represent over 3,500,000 members of the seven
    uniformed services, officer and enlisted, active duty, reserve,
    National Guard, retired and other veterans plus their families and
    survivors. These organizations whose top priority is a strong national
    defense are listed below:
        Air Force Sergeants Association; American Military Retirees
    Association; American Military Society; American Retirees Association;
    Catholic War Veterans; Class Act Group; Gold Star Wives of America;
    Korean War Veterans Association; Legion of Valor; Military Order of the
    Purple Heart; Military Order of the World Wars; National Assn. for
    Uniformed Services; Naval Enlisted Reserve Association; Naval Reserve
    Association; Non Commissioned Officers Assn.; Society of Medical
    Consultants; The Retired Enlisted Association; Tragedy Assistance Prog
    for Survivors; Veterans of Foreign Wars; Women in Search of Equity.
        Medical care along with adequate pay and inflation protected
    retired pay and commissaries are the top concerns of the military
    community. With base and hospital closures and reductions in medical
    personnel, the increasing lack of available health care continues to be
    a major concern to active and retired personnel alike.
        We want to thank the committee for its long-standing interest in
    Military Health Care and for its support for the Federal Employees
    Health Benefits Program for military retirees.
                                   background
        The military health system has several missions, first and foremost
    is caring for active duty troops and maintaining military medical care
    readiness, readiness training and contingency operations as well as
    providing care for active duty family members; continuing to provide
    promised, lifetime medical care to military retirees, and their family
    members. To carry out these missions, top quality personnel to staff
    military medical units, hospitals and clinics are essential. These
    personnel are attracted to military medicine through the Uniformed
    Services University of the Health Sciences, the U.S. Health Profession
    Scholarship Program and quality graduate medical education programs
    sponsored by the various military medical services. Each is an
    important element of the system and are all linked together.
    Additionally, as we are seeing today with the recruiting shortages in
    all services except for the Marine Corps, keeping faith with the
    retirees by keeping the medical health care promise is vital to our
    strong all volunteer force and to our national defense. In a recent
    Christian Science Monitor article addressing recruitment problems,
    Major General Evan Gaddis, the commander of the Army's Recruiting
    Command headquartered in Fort Knox made special note of the fact that
    ``military retirees, upset over a steady erosion of benefits like
    health care and pensions, aren't talking up military careers to young
    adults as they might once have.''
        A military medical system is necessary to support not only the
    present active forces but also to meet future requirements. To attract,
    maintain and properly certify highly qualified medical professionals
    requires assuring them that they will have a complete range of patients
    with varied health problems to include older retirees. They can't be
    adequately trained treating only young (average 23) service members and
    young family members. This means it is imperative to maintain a strong,
    vibrant, capable direct care system.
        The Defense Health System has undergone a significant downsizing in
    the past 10 years and continues to shrink. The number of normal beds
    has decreased by 41 percent (12,000), expanded beds have decreased by
    46 percent (20,000), the number of hospitals has decreased by 35
    percent (58) and the number of medical centers has decreased by 33
    percent (6). Additionally, military medical personnel have decreased by
    13 percent while civilian medical personnel have decreased by 22
    percent. Please contrast these reductions with the 10 percent reduction
    in the eligible serviced population (867,000) during the past 10 years.
    According to the Department of Defense ``demand continues to exceed
    supply, especially among retirees'' all the while, the ``Medicare
    eligible population (is) growing 4 to 5 percent annually''. And at the
    same time, the Department of the Air Force is directing its Medical
    Command to eliminate 1,300 more uniformed officer medical personnel.
                                    current
        The direct care system coupled with TRICARE Prime, Extra and
    Standard along with Medicare Subvention and increased cooperation
    between DOD and DVA should result in adequate care for all eligible
    beneficiaries. Unfortunately, military personnel are increasingly being
    disenfranchised and DOD has not yet developed a plan that will provide
    an adequate health care option for all DOD beneficiaries. In addition,
    the TRICARE system is flawed. Some of the problems and recommendations
    for solving them follow:
        A DOD study found that TRICARE administrative costs are far too
    high. Each Managed Care support contract proposal costs millions of
    dollars; each winner can expect protest from the losers costing more
    millions. More money is being spent on medical administration and less
    on the patient. We believe this committee should direct a review of
    alternative means of procuring private sector healthcare to supplement
    the Military healthcare system. Pending that review, current contracts
    in the Western regions, which will soon require recompeting, should be
    extended. The extension would provide badly needed program stability
    before starting another round of contracting.
        While we support expanding TRICARE Prime beyond catchment areas,
    some areas are too sparsely populated to create networks. If the
    TRICARE Standard benefit were adequate, beneficiaries in those areas
    could still be served. However, the CHAMPUS Maximum Allowance Charge
    (CMAC) is too low. The CMAC should be linked to the service benefit
    plan of the Federal Employees Benefits Program plan benefit as Congress
    originally directed, rather than the Medicare rate. This point cannot
    be overstated especially in areas that are medically undeserved.
        DOD has also reduced the value of TRICARE Standard/CHAMPUS when it
    is used as second payer to other insurance. When CHAMPUS/TRICARE
    Standard is used as a second payer it is based on ``benefits-less-
    benefits'' rather than a ``coordination of benefits'' basis. As a
    result beneficiaries usually receive no benefits from CHAMPUS as second
    payer. The coordination of benefits method should be restored and
    legislative provisions put in place to keep it.
        The TRICARE Point of Service (P.O.S.) option for enrollees in the
    Prime program is too expensive at $300/$600 deductibles and 50 percent
    copay. The P.O.S. option should be changed to the TRICARE Standard
    rate, $150/300 and 25 percent copay. We have seen no evidence of abuse
    of the P.O.S. option and believe that the standard deductible and
    copays are enough to prevent frivolous use. Further, there should be no
    requirement to obtain advance authorization to use the P.O.S. option.
        The VA is a TRICARE subcontractor in some regions. Currently,
    copays are the same whether beneficiaries use the VA or civilian
    providers. Military personnel believe that VA hospitals/clinics should
    be given the same status as MTFs for TRICARE purposes and that copays
    be waived if beneficiaries obtain their care at VA hospitals and
    clinics.
        Every one of these problems cited here has a common thread--save
    money by eliminating or reducing care provided. The fewer beneficiaries
    served means the fewer DOD dollars needed to provide health care and
    increases the dollars available for equipment and weapons systems.
    Regardless of the promises made and of all the intentions of this
    Congress, health care for military retirees is not treated as a benefit
    and it certainly is not treated as an entitlement. Health care for
    military retirees, their families and their survivors is merely a line
    item expense in the DOD budget to be squeezed for more pressing needs
    by comptrollers and budget analysts who do not rely on the Defense
    Health Program for their health care.
        Unfortunately the shortcomings in the Defense Health Program for
    retirees are spilling over to the active force as well. In early 1999,
    the Army's 5th Recruiting Brigade held a Family Symposium in St. Louis,
    Missouri. This symposium was one step in the Army's Family Action Plan
    and it brought together spouses to discuss issues of concern to
    recruiters, their families and the U.S. Army. At the close of the
    meeting the delegates voted on their top 5 issues. Issue #2 was
    ``Timeliness of TRICARE Claims Payment''. Issue #1 was ``Lack of
    TRICARE Providers''. Last fall, a member of the NAUS staff was
    attending the Chief of Staff, U.S. Air Force's Retiree Council
    conducted at Randolph Air Force Base. While visiting the gymnasium, he
    met a young F-15 pilot who had just resigned his commission and
    accepted an appointment in the reserves. His reason for leaving the
    active force? Health care. While deployed in the Middle East, his
    spouse and their children could find no health care providers near his
    parents-in-law's home that would accept TRICARE Standard and, of
    course, there were no health care providers in a TRICARE Prime network.
    His new job with airlines offered him trouble free health care that he
    and his spouse could depend on. The young man said his decision to
    leave wasn't about money, and in fact, he would have paid to fly the F-
    15 Eagle. He said it was all in how you take care of your people and
    health care was the most important part of that for him. There are
    other TRICARE and Defense Health Program ``spill-overs'' into the
    active force that you need to be aware of. At the 1999 national TRICARE
    conference, the Under Secretary of Defense for Health affairs, Dr. Sue
    Bailey, made a special point of talking about bringing more care into
    the MTF. There is a great irony here because Dr. Bailey's call for
    bringing more health care inside the MTF comes at a time when military
    hospitals are continually being downgraded to clinics status, military
    doctors are being eliminated (1,300 in the U.S. Air Force alone by the
    year 2000), and skilled medical support personnel positions are being
    eliminated (600 licensed practical nurse positions are being
    reclassified as infantrymen or truck drivers in the Army). To see the
    results of these conflicting policies you need go no further than right
    here in Washington, DC. Personnel shortages and staffing decisions have
    left Walter Reed Army Medical Center (WRAMC) no longer able to care for
    all seriously ill dependent children of our active duty service members
    in the National Capitol Area. In February at least 10 children had to
    be referred to Children's Hospital because neither WRAMC nor Bethesda
    (the National Naval Medical Center) had the necessary beds and support
    personnel. Many of these costly referrals could have been avoided with
    the addition of just one more nurse on evening shift and one extra
    nurse on nights.
        There is another ramification worth mentioning, especially to this
    Committee that has already devoted so much time and energy on the
    subject of pay and compensation issues for our uniformed personnel as
    well as this Committee's efforts in trying to fix the disincentives for
    military service. In the next 2 to 3 years, the vast majority of our
    enlisted personnel will be up for re-enlistment. One can imagine the
    frustration and anger that the active duty men and women will feel
    about the inability of the respective medical corps to take care of
    their children inside of the system. Because, not only does each
    referral to Children's Hospital add at least $10,000 to the cost of
    care for the government and the taxpayers, the families of these
    children are faced with copayments and deductibles that they otherwise
    would not have been required to pay had their children been admitted to
    WRAMC or Bethesda. If this is occurring in the Army and Navy's premier
    facilities, what must be going on in Colorado and Georgia? Additional
    medical expenses, especially for our more junior members, was not part
    of the recruiting pitch or re-enlistment talk and these expenses
    adversely impact on the overall compensation package for these young
    soldiers, airmen and marines.
        One final, general point that is being made at WRAMC--every aspect
    of business is starting to revolve around the patient's TRICARE status.
    Non-Medicare eligible retirees are restricted from primary care except
    for space available. If they get in for one visit, they are told not to
    expect a follow up appointment. Therefore, even if a patient needs care
    for a continuing disease such as Diabetes, or other conditions that
    would support a Graduate Medical Education (GME) program at WRAMC, they
    are told to go somewhere else or buy into Prime.
                      medicare reimbursement (subvention)
        We welcome the Medicare reimbursement demonstration project, which
    is authorized at six sites in 10 locations. We hope that the program
    can be rapidly expanded to serve more beneficiaries at more sites and
    full implementation expedited. According to the GAO (GAO/T/HEH5-97-84
    Feb. 1997) no more than 75,000 of the 1.2 million Medicare eligible
    beneficiaries can be accommodated by military treatment facilities even
    after the program is fully expanded throughout the United States. DOD
    expects to care for additional Medicare eligibles in the TRICARE
    Networks; however, it is clear that all Medicare eligibles will not be
    served and that another option is needed. We will address this issue
    later.
                         medicare subvention ppo option
        Last year Medicare reform legislation also provided for the first
    time for a Medicare Preferred Provider Option demonstration project.
    Unfortunately, the DOD/Medicare Subvention agreement allows only a test
    of an HMO option, which DOD plans to do through the TRICARE Senior
    Prime program. We believe the PPO Option should be added to the DOD/
    Medicare demonstration project. This has the potential for the biggest
    benefit to DOD and the largest savings to the Medicare Program. It
    would be a more acceptable option to retirees than the TRICARE Partners
    or Affinity program that will be part of the Subvention demonstration.
                      fee-for-service medicare subvention
        We would like to see another Medicare reimbursement option tested
    on a fee-for-service basis. This test would allow Medicare eligible
    military beneficiaries to keep their standard Medicare benefit, and
    when using the MTFs on a space available basis, present their Medicare
    Card to the MTF. The MTF would bill Medicare as other providers do,
    except that it would be on a discounted basis to reflect the lower cost
    of care provided by the MTFs.
        This would save Medicare Trust funds while making more efficient
    use of MTFs and use capacity that otherwise would not be used. This
    also supports our contention that Medicare eligible military medical
    beneficiaries earned the promised lifetime medical care for themselves
    and their eligible family members in MTFs and they paid for Medicare
    Part A coverage through mandatory deductions from their military and
    civilian pay checks. The combined earned and paid for health care
    access is moral justification for this fee-for-service option.
                                  fehbp option
        We appreciate the support of this Committee and the Senate for a
    demonstration of the Federal Employees Health Benefits Program (FEHBP).
    While DOD still has not yet submitted a plan that would provide a
    health care option for all military beneficiaries, we believe this
    test, if properly supported and executed, will provide them with the
    information they need to design an FEHBP plan for those military
    beneficiaries unable to gain access to an MTF or to a TRICARE Prime
    network. However the program is not funded at the level initially
    planned; further, DOD has not solved the problem of ensuring that the
    cost to the military beneficiary in the demonstration is the same as
    comparable plans offered to federal civilians.
        We believe funds should be earmarked for the purpose of
    guaranteeing the rates while ensuring that the current FEHBP
    beneficiaries are protected. We also recommend that sufficient funds be
    added to the demonstration to establish a reserve fund to guarantee the
    rate structure and to increase the number of enrollees. Congress said
    that the test could involve a total of 66,000 participating
    beneficiaries but the test has been designed with a total of 66,000
    eligible beneficiaries. In the absence of adequate funding, in our
    opinion, the issue of the separate risk pool is not being addressed
    aggressively and no assistance is being offered to OPM by DOD to
    resolve the question on insurance reserve funds. OPM appears to be
    proceeding on track to have the program ready to go on 1 January 2000,
    but our concerns remain.
        There is a bill in the House that would remove the ceiling on
    eligible participants and permits Medicare-eligible retirees throughout
    the country to participate should they desire. The bill, H.R. 113, is
    sponsored by Representative Duke Cunningham who said in his Dear
    Colleague letter: ``Military Health Care: If It Ain't Right, Fix It''.
    Costs could be controlled if necessary by capping the program. Our
    estimates indicate that some 30 percent of retirees would select the
    FEHBP option. The death rate of older military retirees, especially
    those of WWII and Korea is close to 3,200 per month. They need access
    to health care now, not five to seven years from now when it would be
    too late. Now is the time to act. We must not continue to allow the
    decline in availability of medical care to disenfranchise military
    retirees and their families.
                                pharmacy issues
        A uniform benefit with integrated pharmacy databases that serve all
    8.2 million military health care beneficiaries is a benefit supported
    by the National Military Veterans Alliance (NMVA). However the NMVA has
    the strongest opposition to any pharmacy fee inside of the military
    treatment facility. Any proposal that includes MTF pharmacy fees would
    be a gross breach of faith and a violation of the military health care
    promise. The NMVA would urge that any proposed benefit would allow
    military healthcare beneficiaries access to all FDA approved drugs for
    all beneficiaries regardless of age or geographical location.
    Additionally, although we support the maximum use of generic drugs, if
    a particular brand or new drugs are needed, they should be made
    available. While management efficiencies and centralized database can
    provide some savings, the pharmacy redesign cannot be fully funded from
    within current resources without a reduction elsewhere in the DHP.
    Since the DHP is already not fully funded, this would create serious
    problems.
                           medical corps end strength
        It is not cost effective to include military health care personnel
    in the downsizing efforts of DOD. Rising cost of health care
    maintenance organizations (HMOs) substantiate that the overall cost of
    the military health system (MHS) to the taxpayers will be significantly
    reduced if military beneficiaries (active duty, retirees and their
    family members) are treated, to the optimum capacity, in the military
    treatment facilities. Breaking out the health care billets from the
    overall force strength will ensure quality, cost effective care by MHS
    and eliminate the competition for billets as identified for both
    military and medical readiness.
              uniformed services university of the health sciences
        NAUS thanks this committee for its strong support for providing
    necessary funding for the continued operations of the Uniformed
    Services University of the Health Sciences. Study after study has shown
    that when all factors are considered USUHS is more cost effective that
    the U.S. Health Profession Scholarship Program. We urge you to continue
    your support for this school, which is a national resource.
                             retiree dental program
        The unsubsidized Retiree Dental Program, which recently began
    enrolling retirees, has already signed up over 100,000 military
    families. The program should be reviewed as we obtain experience this
    year to determine what adjustments in benefits should be made to meet
    the needs of beneficiaries and remain cost effective to them.
                 uniformed services family health plan (usfhp)
        NAUS wants to take a moment to support the USFHP program offered by
    the seven TRICARE Designated Providers, also known as USTFs. We see it
    as a choice for certain populations and a choice that is highly rated
    by beneficiaries. The USTFs have transitioned to TRICARE Prime and are
    doing great work educating beneficiaries on all options available to
    them, including those offered by the Managed Care Support Contractor in
    the region. Additionally, the nine Uniformed Services Treatment
    Facilities continue to treat military beneficiaries through their USFHP
    at a satisfaction rate of well over 90 percent (as contrasted to an
    overall satisfaction of 75 percent for TRICARE). They use the same fee
    structure as TRICARE providers. The Facilities offer the only DOD
    sponsored program that is keeping the military healthcare promise by
    guaranteeing care to Medicare eligible military beneficiaries fortunate
    enough to live near them and obtain care there. We thank this committee
    for its support for the USTFs in the past and urge you to continue to
    support their operation.
        Both the Managed Care Support Contractors and the USTFs provide
    essentially the same benefit at essentially the same cost to the
    government. The programs differ in the local networks of doctors and
    hospitals available to beneficiaries. Some beneficiaries find one
    network more to their liking; others find it easier to access care in
    the competing network.
        Since the benefit packages and costs are essentially the same, this
    should be purely an issue of beneficiary choice and ease of access to
    care. Yet, while retirees and their eligible family members may enroll
    in the TRICARE Prime networks offered by Managed Care Support
    Contractor for a twelve month commitment at any time during the year,
    this opportunity is available only one month each year for the TRICARE
    Prime program offered by the USTFs. In the interest of beneficiary
    choice and improving access to care by retirees and family members, we
    encourage you to allow enrollment into both TRICARE Prime programs year
    round.
        The government's contracting officer for TRICARE has denied several
    requests to broaden the enrollment period, citing the statutory
    requirements of the contract. The contracting officer also reinforced
    and confirmed a point NAUS has been making for several years,
    specifically that the Department of Defense is not interested in
    providing health care for the Military's Medicare eligible
    beneficiaries, considering them to be financial liabilities, except in
    confined test situations inside of an MTF. The contracting officer
    wrote: ``To now propose continuous open enrollment for retirees and
    their families would put the Department at a significant financial risk
    for adverse selection, particularly in the age 65 and older
    population.'' As mentioned earlier, it's not about health care for the
    deserving warriors and their families, the very men and women who saved
    the world in World War II. It's all about denying care to save money.
                                    closing
        Mr. Chairman, the National Military Veterans Alliance thanks you
    and this subcommittee for holding this hearing and we urge immediate
    action to enact FEHBP legislation now, so that military beneficiaries
    can begin enrolling and receiving care in fiscal year 2000.
        A sense of the Congress resolution passed eight years ago expressed
    the Congress' intention to solve the health care problem. Mr. Chairman,
    the Department of Defense still does not have a plan that by a date
    certain will provide all military personnel and retirees, access to
    health care. Even in a period of surplus, we are told there is no
    money. Our response is if this Administration and Congress cannot solve
    this problem now, when can it be solved and who can and who will?

        Senator Stevens. Thank you.
        My trouble is that the administration told the military
    there is $4 billion more in this bill. When we examine it,
    there is more than $4 billion of items we cannot use. For
    instance, they told us there is $1.65 billion in unspecified
    rescissions that we must make. They did not tell us where to
    put the cuts, but they told us to cut it. They told us they
    were taking fuel savings and foreign currency exchange savings.
    And, as a matter of fact, fuel costs are going up, not down.
        Ms. Barnes. That is right.
        Senator Stevens. And the exchange rates are going up, not
    down. And we have got a bill that is probably $4 billion to $5
    billion underfunded, rather than having $4 billion more. Now,
    that is not easy to meet requests like yours that go into the
    billions. We can adjust a few million here and there and take
    out other priorities. It is very hard to take care of that kind
    of money.
        We did, last night, put in the $1.8 billion to start the
    increase in pay and to start the change in the retirement
    system. Although that has to be authorized. The pay raise is
    authorized, but the other is not. So that will take place on
    the first day of January of next year.
        But I doubt seriously we can find the money to meet your
    request. We will start adjusting it, but I do not think we can
    meet that in one year. It is just not possible. But we will do
    our best. You are right. And I think you are right, too, in
    terms of the problems of reenlistment and future enlistments. I
    doubt very many young men and women are going to join the
    military if their parents come back and tell them that the
    Federal Government has not kept the commitments that were made
    to them.
        Ms. Barnes. Yes, sir.
        Senator Stevens. And we are already seeing that in terms of
    the people from the Vietnam era, who are telling their children
    that they did not keep their commitments made to them. And I
    think it gets harder and harder to maintain a volunteer force
    under those circumstances. If it keeps up, they are going to
    drive us back to the draft, which none of us want.
        Ms. Barnes. Yes, sir.
        Senator Stevens. But right now, this enlistment rate and
    reenlistment rate is very bad. But we will do our best to help.
    Thank you for coming.
        Ms. Barnes. Thank you very much, sir.
        Senator Stevens. Now we want to talk to Joyce Raezer,
    please.
    STATEMENT OF JOYCE WESSEL RAEZER, SENIOR ISSUES
                SPECIALIST, NATIONAL MILITARY FAMILY
                ASSOCIATION
        Ms. Raezer. Thank you, Mr. Chairman.
        It is appropriate that the National Military Family
    Association is presenting testimony today on the quality of
    life for military families because today is Military Spouse
    Day. In his Military Spouse Day statement, the Secretary of
    Defense spoke of the challenges faced by military spouses as
    they, ``Manage the unique demands military life places on them
    and their families.''
        This morning, I would like to share with the subcommittee
    some of the challenges, other than the most obvious one of
    holding things together to support the mission in times of war,
    facing military families on Military Spouse Day 1999.
        When the military member is away from home two or three
    times more than he or she was a few years ago, the stress on
    the family is a challenge. When the military member works 16-
    hour days and six-and seven-day work weeks at a home station,
    the loss of family time is a challenge. When the family budget
    must absorb increased costs because the member is deployed, the
    loss of buying power is a challenge. When a change to the
    formula for the basic allowance for subsistence causes married
    folks to lose income, filling the grocery cart is a challenge.
        When families encounter changing rules, inaccurate
    information, and fluctuating provider networks in TRICARE,
    accessing health care for a child is a challenge. When health
    care costs actually rise because of a faulty and lengthy claims
    process, the out-of-pocket costs are a challenge. When recently
    called up Reserve families receive incorrect information on
    their health care benefit, making the best decision about a
    family's medical care in the short time available to these
    families is a challenge.
        When a family cannot get plumbing or electricity fixed in
    their government quarters for weeks on end, that is a
    challenge. When a family loses benefits, such as the Women,
    Infants and Children Nutrition Program, WIC, simply because
    they are ordered overseas, buying baby formula is a challenge.
    When the per diem and mileage allowances for a permanent change
    of station are not changed for 13 years, the increased cost to
    families of making the move is a challenge.
        When military children go from one school district to
    another, and must always attend class in a portable because the
    government does not meet its stated fiscal obligation to these
    school districts, that is a challenge. When contracts to
    outsource family services cause the loss of volunteers, filling
    the void left in the military community is a challenge. When
    military construction projects for family housing are put on
    hold while the services work out the nuts and bolts of the
    privatization initiative, the wait for quality housing is a
    challenge.
        When military families are told that they only perceive the
    diminution in their quality of life, maintaining trust in the
    system is a challenge. Military families are flexible. They are
    realistic and they are patient. They know that not all these
    challenges can be successfully addressed in one year or two or
    even five. A combination of circumstances and policy and
    operational decisions have broken the trust of the military
    family. To rebuild that trust, a long-range plan to ease the
    challenges they face must be developed and followed year by
    year.
        We view some of the initiatives in S. 4 and the recent
    allocation in the supplemental for the additional pay increase
    as a start in meeting some of that promise and that commitment.
    We especially like the pay increase, the pay table reform and
    the inclusion in S. 4 of the WIC program overseas.

                               prepared statement

        Military families need to know that their country's leaders
    recognize the challenges they face, and that policymakers have
    promised to fix those problems. But, above all, they need to
    see that promises made are promises kept.
        Thank you.
        [The statement follows:]
                   Prepared Statement of Joyce Wessel Raezer
                                quality of life
    It Didn't Just Happen Last Year
        Members of this Subcommittee may remember that three years ago NMFA
    reported to you a situation we called ``They Only Sleep Here'': a
    situation caused by 12 to 16 hour work days and 6 and 7 day work weeks.
    We reported that while frequent deployments were placing increasing
    stress on families, the long work days and weeks when at home station
    were causing the greatest disruption in family life. We also reported
    that the change in the formula for the Basic Allowance for Housing,
    while an improvement in concept, proved to be a ``robbing Peter to pay
    Paul'' formula in actual practice. Families going to higher cost of
    living areas saw a decrease in their out of pocket costs for housing,
    but families going to lower cost areas saw an unexpected increase in
    their out of pocket costs. We have reported that the cap on the Basic
    Allowance for Subsistence was an actual pay cut for married enlisted
    members and all officers. In practice, young officer families are
    seeing an increase in the amount they must pay out of the family budget
    to meet the servicemember's government food bill when the servicemember
    is deployed.
        We reported that pay caps have caused families to dig deeper into
    their pockets each fall to buy school clothes and supplies for their
    children; to reduce or eliminate their recreation activities; and to
    rob the family's food budget to pay necessary bills.
    Government Housing, Where is the Landlord?
        Military families living in government quarters have seen the
    maintenance of these houses go from bad to worse. Families are
    frequently told that if they have two bathrooms, the plumbing problem
    that precludes the use of one of them is not considered a priority and
    may be fixed in a few weeks. Peeling paint, water running down walls
    and sewage back ups when it rains, and frequent electrical outages are
    all considered a norm in many older military housing areas. Families
    were excited to hear of the new privatization initiative that was
    supposed to build housing more quickly. They were equally pleased when
    former Secretary of Defense Perry announced a five-year plan to upgrade
    the maintenance on their quarters. Unfortunately, no shovels have been
    turned on the privatization initiative and the Perry initiative lasted
    one year.
    Privatization--Panacea or Problem
        Families now read on the internet that privatization may mean the
    loss of base security, which is often their number one reason for
    moving into government quarters. They also hear that private retail
    concerns may take the place of their familiar commissary, exchange and
    MWR facilities. They wonder what that will mean to their pocketbooks.
    Will these facilities cost more to use? Will the profits from these
    private retail activities fund their MWR programs? If the land under
    these new homes does not remain federal, what effect will the nine-fold
    cut in Impact Aid have on the quality of their children's education?
    Noting the dearth of new family housing construction in the past few
    years, families wonder if the services are attempting to turn their
    installations into places of work, instead of communities.
    Outsourcing--Does it Save Money or Cut Services?
        Some families are finding it harder to access the services of
    family service centers as regionalization has increased the distance
    they must travel for these services or reduced the hours these services
    are available. Families are concerned that outsourcing these activities
    will lead to reduced services. Traditionally when funds are cut,
    professional family service center staff double and triple hat and
    increase the use of volunteers to provide needed services. Will private
    contractors wear two and three hats? Will the outsourcing contracts
    call for volunteer training and supervision? Or will volunteer programs
    be eliminated, further eroding the sense of community?
    Family Advocacy--Before or After?
        NMFA disputes much of the characterization of family violence in
    the military as portrayed in a recent ``60 Minutes'' airing. We are
    aware that some Commanders do not place the proper command emphasis on
    the issue. Others are either unaware of the programs the military has
    in place to assist servicemembers and their families in avoiding
    inappropriate behavior and actions, or believe the servicemember's
    presence at his/her job is more important than making sure of their
    attendance at counseling sessions. However, the military services are
    far more proactive in many arenas having to do with family violence
    than is the civilian sector. DOD's transition program for family
    violence victims stands at the head of the class when compared to other
    programs.
        NMFA's biggest concern is for the New Parent Support Program. The
    military is composed of young families having their first babies,
    thousands of miles from their extended family and under the stressful
    conditions of today's high OPTEMPO. The New Parent Support Program
    gives these families the tools, education and skills to be loving,
    effective parents. The Program both decreases the probability of family
    violence and increases the healthy maturation of these young adults
    into responsible parents. However, when funding is cut, programs are
    cut. When funding is cut only those noted to be ``at risk'' are served.
    New parents either have no access to the program or are ``labeled'' if
    they do. NMFA believes strongly that this is one of the best and most
    productive proactive family violence prevention tools in DOD's armory.
    DOD must be encouraged to fully fund the program for all installations.
    Best Business Practices on the Backs of Military Families
        Families have read in their military papers that the Defense
    Commissary Agency (DeCA) plans to add an additional 1 percent to the
    price of most goods sold within commissaries. NMFA is aware that DeCA
    no longer has access to the fund that helped absorb the loss due to
    spoilage and pilferage. We are also aware that some would call this a
    ``best business practice.'' Military families view it as one more
    attack on their benefits. They question why ``best business practices''
    always seems to mean more money out of their pockets.
    Overseas Tours = Loss of Benefits
        Young families arriving for an overseas duty tour are shocked to
    discover that they no longer have access to the Women's, Infants' and
    Children's nutrition program (WIC). Professionals at family service
    centers and volunteers with military spouse clubs struggle valiantly to
    provide some sort of nutritional relief for these pregnant women and
    young children. However, reports to NMFA indicate they are slowly
    losing the battle. Spouse clubs, whose membership has been vastly
    reduced due to the drawdown, and whose ability to raise funds has been
    curtailed by service directives, can no longer cover the costs of
    providing even a modicum of service in some overseas communities. In
    larger communities the funds seldom go beyond one or two trips to the
    Commissary for infant formula. The frustration of these professionals
    and volunteers is severely exacerbated because they know a law has
    existed for five years, which allows a WIC like program to be
    implemented overseas. Apparently their voices and the voices of the
    young families are not being heard when representatives of the
    Department of Agriculture and DOD argue over who is to pay.
    Another Move = More Dollars Out of Pocket = More Frustration
        Servicemembers have not seen an increase in their per diem and
    mileage allowances for permanent change of station moves since 1986.
    While the current low price of gasoline helps, it does not make up for
    13 years of inflation in the costs to make a military move. Families
    hear of plans to increase the quality of their steadily deteriorating
    household goods movement process. Then families hear the changes may
    take years to affect their own moves.
    School Reforms Produce Problems for Military Families
        The increased emphasis on state testing in schools has caused
    military children to enter new schools only to miserably fail the first
    test they are given. When a state test in social studies includes
    questions principally regarding that state's history and the child has
    just arrived in the state, it is a setup for failure. Block scheduling
    has meant military children transferring in the middle of the school
    year may be unable to compete in certain subjects. School districts,
    principals, teachers and parents are struggling to meet the unique
    needs of the mobile military child, but this does not come without
    cost. Many military families are now opting to home school in order to
    avoid these pitfalls. However, that reduces the family's income, as the
    spouse must remain unemployed.
    REDUX, The Road to Poverty in Retirement
        Military families also know that, for the majority of them, the
    financial reward at the end of 20 years of sacrifice has been
    significantly reduced by the REDUX retirement plan. The ``cushion''
    that current retirees and their families have to ease their transition
    to civilian life will not be there for the servicemembers retiring
    under REDUX. Forty percent of base pay combined with Cost of Living
    Adjustment caps may well not cover even the mortgage or rent payment.
                                    tricare
    Whose Rules?
        As Tricare has completed its march across the country, families are
    finding it even more difficult to keep track of the ``rules of the
    road.'' Each contractor appears to have different rules for accessing
    care.
        Health care services covered in one Tricare Region are not covered
    in another. When is skilled nursing care a benefit and when is it not?
        Providers drop out of the network while a family is en route to a
    new duty station or while they are at the new station and therefore
    some promised specialty care for Exceptional Family Members is no
    longer available. These family members are often advised to disenroll
    from Prime and go Tricare Standard in order to access that specialty
    care. Besides having higher Standard co-payments, these Exceptional
    Family Members cannot usually access routine primary care at their
    local military facility because they are not now enrolled in Prime!!
        How in the world is the family assigned to recruiting duty hundreds
    of miles from a military installation supposed to know that they now
    need pre-authorization for all inpatient care and a host of outpatient
    services? Unlike those in private sector and federal civilian plans,
    Tricare Standard beneficiaries are not routinely provided a benefits
    coverage booklet. Families are told by DOD and military Tricare
    officials that the pre-authorization process is a requirement for the
    provider. Families are also told that any deduction in payment (or non-
    payment) for not having a pre-authorization will be born by the
    provider. We have yet to hear from a family who has received a refund
    from the provider when they have paid for the care up front!! In
    addition, most military families are especially attuned to paying their
    bills. If a bill comes in they pay it! At least one Tricare Support
    Contractor has written a Member of Congress that the BENEFICIARY was
    aware that she needed to obtain pre-authorization for care. Did the
    Tricare Contractor not understand the role of the provider in pre-
    authorization?
    Whose rules are families to follow?
                Pre-authorization
        Tricare Standard families and their providers spend days trying to
    get authorization for care. Can you imagine what it is like to wait for
    days to schedule an MRI to discover if you have a tumor because pre-
    authorization is so difficult to obtain?
        Tricare Prime beneficiaries away from home on vacation can spend
    days waiting to receive authorization for care for an urgent condition.
    Can you imagine what it is like to have a baby with an ear infection
    and be unable to get permission to get care for that baby for several
    days?
                Only ``Start Up'' Problems?
        Families have repeatedly been told that the ``problems'' of Tricare
    are simply ``start up'' problems. Yet each Region, as it has gone on
    line, has had the SAME problems. What will happen when the contracts
    are re-competed? If a new contractor comes in, will families experience
    the same old ``start up'' problems? In fact many problems persist
    across most of the Regions. Region 11, which up to now has been one of
    the best running Regions, has just lost its prime subcontractor. Large
    provider groups have pulled out of Prime networks in a majority of the
    Regions.
        Low Tricare maximum allowables and contractors' attempts to obtain
    discounts off these prices do reduce provider participation in many
    areas. However, the claims hassle is the problem most often cited by
    providers as their reason for leaving the network. Numerous military
    families have reported to NMFA that they felt like welfare patients as
    providers or providers' business offices freely shared their disgust
    with Tricare.
        Calls to Tricare Support Contractors' toll free numbers (the only
    toll free numbers usually provided to military families) produce a
    variety of misinformation. Military family members who think they are
    aware of the rules have no place to turn when they get questionable
    information from the Tricare Support Contractor's telephone line. Even
    families stationed where there is a military medical facility receive
    incorrect information by their Health Benefits Advisors who listen to
    contractor personnel rather than checking with their military chain of
    command. An on-call military doctor, acting as the primary care manager
    for a northern Virginia area over a holiday, recently suggested that
    the parent might want to take a child enrolled in Prime to a civilian
    neighborhood 24 hour clinic rather than the military hospital's
    emergency room to ascertain if the child had a broken bone. Such action
    would have undoubtedly resulted in an extremely costly point of service
    charge for the child's care. How can we expect families to know the
    rules when the contractor's personnel do not, when military health care
    professionals do not, and when the rules change from one Region to the
    other?
    Reserve Families and Tricare
        As the services begin the largest call-up of the Reserves since the
    Gulf War, families unfamiliar with Tricare will need accurate
    information fast to make important decisions about their health
    coverage. Many Reservists and their families do not know what Tricare
    is--all they remember is CHAMPUS. When called up, they will receive the
    toll free number of their region's Tricare Support Contractor. The
    Support Contractors' operators must be able to explain Tricare and its
    options to people in a stressful situation who are unfamiliar with the
    program. Early indications are that the quality of the information from
    Support Contractors varies greatly. One reservist's family had recently
    made the decision to stay with the servicemembers's civilian employer's
    health care insurance, even though they would have to pay the total
    premium, because of incorrect information provided through the Region's
    toll free number.
        To minimize the financial toll on Reserve families, NMFA would
    support an extension of the demonstration authority granted in support
    of the Bosnia deployments for Reservists called up in support of the
    Kosovo operations. This authority waived the Tricare Standard
    deductible so that Reservists, who had probably already paid the
    deductible for their civilian plan, would not have to pay another. The
    authority would also allow Reservists' families to join Tricare Prime
    if a network existed in their community without waiting the 149 days.
    Military Families Are Paying the Bills
        NMFA's greatest concern is that many military families are simply
    paying the bill rather than go through the hassle of dealing with the
    Tricare claims process. Military families know that a letter of
    indebtedness going to a servicemember's commanding officer is a ``kiss
    of death.'' Since most military spouses are working, neither the member
    nor the spouse has the six to eight hours it often takes to go through
    the maze of attempting to fix a claim.
    Medicare Eligibles
        The over-65 beneficiaries have, thanks to Congress, been given a
    wee light at the end of the tunnel. The Medicare Subvention
    demonstrations, called Tricare Senior Prime, are now up and running in
    all six sites. The Federal Employees Health Benefits Program (FEHBP)
    demonstration is to start in eight sites by January 1, 2000.
        NMFA has noticed that in all but one of the Tricare Senior areas
    enrollment has not reached capacity. Dialogue with many of the eligible
    military retirees in these areas reveals a profound distrust of the
    ``demonstration.'' To quote a retired Sergeant, ``They kicked us out
    once, what's to keep them from doing it again when the demonstration is
    over?''
        The FEHBP demonstration program may also be running into a major
    snag. The Office of Personnel Management has apparently decided that
    the language requiring a separate risk pool also requires the insurance
    companies to set up a separate reserve account. Since DOD has selected
    sites with only 65,000 eligibles rather than sites that would produce
    65,000 enrollees, as was the Congressional direction, some small
    regional HMO companies may have to set exorbitantly high premiums for
    the demonstration in order to fund the reserve account. Since the
    demonstration program is to test how many eligible military retirees
    would join an FEHBP plan, excessively high premiums will not produce
    accurate test results. In addition, military retirees who had
    reasonably expected their premiums to be in line with their fellow
    federal civilian retirees will undoubtedly blame both DOD and Congress
    and view the situation as just one more way to deny them care.
        NMFA is also concerned that even the combination of the two test
    programs still leaves a vast number of the over-65 military retiree
    population with no employer-sponsored health care. We continue to
    believe that not providing a DOD health care benefit to this entire
    population immediately is a broken promise. For DOD to design a program
    that intentionally left out this most vulnerable population is a breach
    of faith of enormous proportions. Many of these retirees are the
    parents, grandparents, or aunts and uncles of those who are now serving
    in uniform or who are potential recruits. Other retirees are
    undoubtedly the family friends and neighbors of those currently serving
    or who could serve. These men and women, normally the best recruiters
    the services have, trusted their country to stand by its promise. For
    many, the demonstration programs and their follow-ons will be too
    little too late.
    NMFA's Health Care Plan
        Appendix 1 is a plan for a military health care plan that NMFA
    first proposed to Congress and DOD in 1992. With Tricare now fully
    implemented across the country, we believe it is time to review that
    plan. NMFA believes that either the plan itself, or some combination of
    the plan and Tricare, may more fully meet the government's obligation
    of providing a health care benefit to its military employees and
    retirees and their families. The NMFA plan combines the FEHBP with a
    military health care delivery system that should provide a more uniform
    program, with choice, and still support the readiness mission of the
    military health care system.
                                  perception?
        Can one wonder why military families have lost faith when they hear
    policymakers talk of this diminution in their quality of life and their
    increased out of pocket expenses as a PERCEPTION? Can one wonder why
    servicemembers and their families are questioning the value their
    country places on their service?
        The increased stress caused by frequent and unexpected deployments
    and long home station work days and weeks is not a perception to
    families whose lives are consumed by it. The pay gap is not a
    perception for those who balance the family budget. The out of pocket
    cost for permanent change of station moves and housing is not a
    perception to families who can no longer afford a family vacation.
    Finding their dishes in pieces at the end of a military move is not a
    perception. The loss of access to the WIC program simply because they
    are stationed overseas is not a perception to families with young
    children and small incomes. The mildew on their carpets from rainwater
    dripping down the inside of the walls of their government quarters is
    not a perception to those who spend countless hours pleading for
    repairs. The increased complexity of trying to get care under Tricare
    is not a perception to a mother with a sick child. The challenges of
    new education programs and tests is not a perception to a fifth grader
    who moves to a new state and, on his first day at his new school, is
    presented with a test composed primarily of questions relating to that
    state's history. A retirement plan that cuts the value of retired pay
    by almost 20 percent is not a perception.
                                    promises
        Families are hearing the promises of higher pay, a fix to the REDUX
    retirement system, a mandatory extension of a WIC-like program to
    overseas areas, and an improvement in the Tricare program. They
    question, however, if these promises will actually come to fruition and
    if the trend toward improving their quality of life will be on-going.
                               the silver bullet
        Military families are flexible, resilient and relatively patient.
    But it is past time for them to see a glimmer of light at the end of
    the tunnel. They also need to trust that the light will grow brighter
    each year and not disappear after a single flicker. Mister Chairman and
    members of the Subcommittee, it is this trust that is the Silver
    Bullet:
        Trust that leaders and policymakers see the diminution in their
    quality of life as a reality and not a perception
        Trust that their concerns will be addressed in a steady and
    constant manner
        Trust that the sacrifices of their servicemembers and themselves is
    appreciated by their country and its leaders
        Trust that the funding will be there for the promises to be kept
    this year and next year and in the ensuing years
        Trust that quality of life is not just a nice phrase in a speech,
    but an abiding concern of those responsible for their wellbeing and the
    wellbeing and safety of the country they serve.
        Appendix 1.--Health Benefits Program for Military Beneficiaries
        The National Military Family Association's (NMFA) Proposal for a
    Health Benefits Program for Military Beneficiaries has three
    components. They are as follows:
      --A Military Health Plan based at Military Treatment Facilities
            (MTFs) would be created.
      --All eligible military beneficiaries (with the exception of active
            duty servicemembers), regardless of age or health status would
            have the option of enrolling in any non-restricted Plan in the
            Federal Employee Health Benefits Program (FEHBP).
      --A Health Care Allowance would be established for Active Duty
            Personnel for their family members.
        NMFA believes the health care of active duty personnel is a
    readiness issue. The decision to apply the program to Active Duty
    Members must be made by DOD and the Services, therefore they are not
    included in this Proposal.
        Military Health Plan.--The Military Health Plan would be based at
    Military Treatment Facilities and when necessary, supplemented with
    civilian health care providers or networks under contract to the
    Department of Defense. All eligible military beneficiaries (including
    those eligible for Medicare) would have the option of enrolling in this
    plan during an annual ``Open Season''. Enrollment would guarantee
    access to health care for all beneficiaries who choose to enroll.
        FEHBP.--All eligible beneficiaries (other than Active Duty
    Personnel) would have the option of choosing any non-restricted FEHBP
    Plan under the same terms as Federal civilian employees and retirees.
    All eligible military beneficiaries would have the option of enrolling
    in a Plan during annual ``Open Season''. The FEHBP offers a wide range
    of choices and does not allow exclusion for pre-existing conditions. It
    offers full or supplemental coverage for Medicare eligible
    beneficiaries and covers prescription drugs. Many plans offer vision
    and dental coverage. The FEHBP is also offered to beneficiaries living
    overseas.
        Health Care Allowance.--The Services would establish a Health Care
    Allowance for Active Duty Personnel for their family members. The
    Health Care Allowance would cover the premium cost of a moderate HMO
    within the FEHBP. The allowance would be forfeited (or paid to the
    local military hospital) if beneficiaries enrolled in the Military
    Health Plan. This would allow active duty families to choose the
    Military Health Plan or a health plan under the FEHBP.
        Retirees would pay their share of premiums, just as retired Federal
    Civilians do, with DOD paying the employer's share.
        Military beneficiaries will be able to choose a health plan that
    would suit their needs. If they wish to obtain their health care in the
    military system, they may do so by choosing the Military Health Plan.
    If they wish to opt for a civilian plan they may do so. Whichever plan
    they choose their entitlement to employer provided health care coverage
    would no longer end at age 65 when they become Medicare eligible.
                               why fehbp option?
        Why is the FEHBP option part of NMFA's Health Care Proposal? NMFA
    has included an option for all military beneficiaries to participate in
    the Federal Employees Health Benefits Program (FEHBP) for several
    reasons. In the last decade the number of people eligible for health
    care in military facilities has increased. The all-volunteer force has
    more married service members with families. Americans are living
    longer. The military direct health care system can no longer
    accommodate all eligible beneficiaries. The end of the Cold War has
    brought reduced wartime medical requirements; reductions in personnel;
    and base closures and realignments. Further cuts in medical personnel
    can be expected.
        The direct care system of the Department of Defense (DOD) can no
    longer provide all military beneficiaries with health care. DOD has
    attempted to provide care for those beneficiaries it cannot treat
    through Support Contracts. The new DOD health care delivery program is
    called Tricare and is supposed to offer beneficiaries a choice of an
    HMO (Tricare Prime); a PPO (Tricare Extra) and a fee for service plan
    (Tricare Standard). However, Tricare was specifically designed to leave
    out a significant portion of the DOD beneficiary population, those over
    age 64 and eligible for Medicare. In addition, many beneficiaries,
    including active duty family members, do not live in an area where
    Tricare Prime or Extra are offered. Hence these beneficiaries do not
    have a choice of options, but are forced to use the higher cost Tricare
    Standard plan.
        Tricare was first started in the states of Washington and Oregon in
    March of 1995. As of June 1, 1998, all regions of the United States
    were covered by a Tricare Support Contract and Tricare was supposed to
    be fully operational as a ``uniform benefit''. However, many
    beneficiaries continue to complain about access to care; unpaid bills;
    claims hassles; expenses to them above their stated copayments; and
    different rules in different parts of the country. Providers express
    dismay about reimbursement levels; delayed claims payments and constant
    claims hassles. Provider groups have dropped out in Florida, Texas,
    Washington, and Colorado. Provider lists are chronically incorrect,
    with listed providers who claim they have never been part of the
    network or who state they dropped out months before. The administrative
    costs for the Tricare Support Contracts appear to be in the 18 percent
    to 20 percent range. Prescription drugs are available at military
    hospitals one month, disappear the next month, only to reappear at a
    later date and for an unknown period of time.
        TRICARE is not health care coverage, but a health care delivery
    system. This system leaves beneficiaries with differing benefits
    depending on where they reside, and on the current military health care
    budget.
        NMFA believes it is time for DOD to act as the employer in the same
    manner it does for its civilian employees and retirees. NMFA believes
    DOD has an obligation to provide health care coverage to active duty
    members for their families, to survivors and to retirees and their
    families.
        The Federal Employee Health Benefits Program (FEHBP) is a market
    based, consumer driven cooperative administered by the Office of
    Personnel Management. It offers several national health plans and
    approximately 300 local health plans. It includes fee-for-service
    plans, preferred provider plans and HMOs. All federal civilian
    employees, retirees, and survivors, including the U.S. Postal Service
    are eligible to participate. Military beneficiaries are the only
    federal employees or retirees who are not allowed to participate in the
    FEHBP. NMFA believes military beneficiaries should have the opportunity
    to participate in the FEHBP.
        Highlights of the FEHBP are as follows:
      --Beneficiaries may change plans once a year during an Open Season
            even with preexisting conditions.
      --Active duty sponsors may deploy secure in the knowledge their
            families have health care coverage and guaranteed access to
            health care through a seasoned and well-respected program.
      --Beneficiaries who select an FEHBP fee-for-service plan will not be
            subject to Non-Availability Statement (NAS) requirements, which
            can cause them to lose their health care provider when
            inpatient care is needed, as is the case under TRICARE.
      --Beneficiaries retain coverage when they become Medicare eligible,
            generally at age 65. TRICARE coverage ends at age 65.
            Beneficiaries in this age group can combine Medicare with an
            FEHBP plan and obtain nearly 100 percent coverage, including
            prescription drugs, for as little as $105 a month (including
            Medicare Part B payment).
      --FEHBP national plans are available to beneficiaries no matter where
            they choose to live. Retirees will not have to retire near a
            military base in order to receive their health care benefits.
            Military retirees who choose to live overseas are currently cut
            off from health care coverage when they reach the age of 65,
            because their TRICARE coverage ends and Medicare is not
            available overseas.
      --Active duty families assigned to remote locations will have the
            same choice of plans as those stationed near military treatment
            facilities (NMFA's proposed Health Care Allowance would cover
            the cost of the premium of a moderate FEHBP HMO).
      --Beneficiaries affected by Base Realignment and Closure (BRAC) can
            choose an FEHBP Plan and not lose their health care coverage
            when a base hospital or clinic closes. Those who are Medicare
            eligible may select a plan from FEHBP which, combined with
            Medicare, provides prescription drug coverage.
      --FEHBP can co-exist with a Military Health Plan. TRICARE Prime
            (including Senior Prime) as well as the U.S. Family Health Plan
            can function as Military Health Plans. Beneficiaries will have
            an annual choice of a Military Health Plan or a Plan selected
            from the FEHBP.
        FEHBP allows beneficiaries the choice of how they want to spend
    their money. Payments for health care coverage are made through a
    monthly premium with little extra cost at the point of service
    (doctor's visits, prescription drugs, inpatient care, etc.). TRICARE,
    on the other hand, collects most payments at the point of service.

        Senator Stevens. Well, that was a very nice statement. But
    the unfortunate problem is that you cannot keep promises other
    people make unless they also back it up with money.
        Ms. Raezer. That is right.
        Senator Stevens. And I have a serious problem here right
    now with the continued deployment in Bosnia and Saudi Arabia,
    Kuwait, Somalia, increased activity in South Korea, Haiti. All
    of those things are taking place--not all of them, but almost
    all of them--without budget requests, so we have to take it out
    of other things. And that is what is decreasing the money that
    really was there to keep those promises.
        I do not know what the answer is, but clearly, with the war
    going on now--and last night we passed a bill to about $11.8
    billion of more money in it--but there is not much in there
    really, except for the pay raise, that is going to deal with
    quality of life. It is going to deal with moving more people in
    this country from Kosovo. It is going to deal with the whole
    problem of replacing equipment that is being aged or destroyed
    in that operation over there. And I think it is going to be
    longer than you think before we catch up with this.
        Ms. Raezer. We understand.
        Senator Stevens. We are committed to keep up with it, but I
    wish people would stop taking actions that no one has
    authorized. Then we might be able to catch up with it.
        Ms. Raezer. And there are a lot of people out there that
    feel the same way, Mr. Chairman. I was in Fort Irwin,
    California, a couple of weeks ago. And a young captain said
    almost the exact same thing. He said: Somebody has got to say
    no.
        Senator Stevens. Well, we tried, but we did not succeed.
        Thank you very much.
        Ms. Raezer. Thank you.
        Senator Stevens. Next I think is Kristen Pugh, please.
        Good morning.
    STATEMENT OF KRISTEN L. PUGH, DEPUTY LEGISLATIVE
                DIRECTOR, THE RETIRED ENLISTED ASSOCIATION
        Ms. Pugh. Good morning. The Retired Enlisted Association
    (TREA) would like to thank you, Chairman Stevens, and this
    subcommittee for the opportunity to come before you today to
    discuss fiscal year 2000 funding issues, as well as extending
    our appreciation for your support last year.
        TREA has over 100,000 members and auxiliary, representing
    all branches of the armed services, retired, active duty, Guard
    and Reserve, who continue to be concerned over the issues of
    medical care, concurrent receipt, survivor benefit plan,
    adequate plan, inflation-protected retired pay, commissaries,
    and base realignment and closure (BRAC).
        Pharmacy redesign: Access to pharmaceuticals is one of the
    greatest concerns to Medicare-eligible military retirees due to
    cost and increased usage. Additional funding must be allocated
    to expand the National Mail Order Pharmacy benefit to Medicare-
    eligible military retirees and expand the under-65 drug benefit
    to the over-65. Further, complete funding is necessary to
    implement an integrated data system, as well as a complete
    national formulary that addresses the drug utilization of our
    aging military retirees.
        TRICARE funding: TREA recommends full funding for the
    Defense Health Program, including the TRICARE program. TRICARE
    funding should reflect the number of beneficiaries eligible for
    military health benefits, not just the ever-declining number of
    people able to use the military system for the previous year.
        Nationwide implementation of TRICARE Senior Prime: S. 915
    expands TRICARE Senior Prime to 10 additional locations, with
    full service military hospitals by January 1, 2000, and then
    across the remaining TRICARE Prime catchment areas no later
    than October 1, 2002. Our members are very pleased with the
    program as it is running in the test year.
        Military retired pay and VA disability compensation
    concurrent receipt: Enactment of S. 789 provides specific
    relief to the most severely disabled military retirees--those
    rated 70 percent and higher shortly after retirement and served
    over 20 years. This is an issue of equity, as these service
    members left with severely limited post-service career
    opportunities. It is vital that this subcommittee appropriate
    funding to guarantee retirees receive their earned retired
    benefits.
        Survivor benefits plan, the SBP: There are two issues
    regarding SBP which many retirees have concerns about. First,
    to move the 30-year paid up SBP program to begin in 2003
    instead of 2008. We appreciate all your work last year on this
    very issue.
        Second, an even greater impact on military retirees
    especially is the offset which survivors face once they become
    eligible to receive social security. Under the existing rules
    of SBP, survivors of retirees are eligible to receive 55
    percent of their spouse's retirement until they are social
    security eligible. Then this amount is reduced to 35 percent
    even if those survivors earn social security benefit through
    their own career. S. 763 would reduce this offset to have
    survivors receive 40 percent, and then 45 percent at the end of
    the five years, of their spouse's retired pay. This legislation
    will be of great assistance to survivors of military retirees.
        The retirement system: Currently, as you know, three
    retirement systems are in effect for the uniformed services.
    The differences between the three have no doubt caused one
    service member to question why his or her career did not hold
    the same value as another service member of the same rank. TREA
    would like to see a complete repeal of the Redux system
    introduced in 1986, particularly the cost of living adjustment
    reduction, the long-term effects of which may be greater than
    the reduced percentage at 20 years of service.
        However, S. 4 deals with the discrepancy in the retirement
    system in a way that TREA does support, and we appreciate your
    work.
        In order to guarantee the strength of our military, we must
    ensure that those mid-career personnel make the decision to
    remain in the service. It is imperative that the necessary
    funding is appropriate to carry out these changes to the
    military retirement system.

                               prepared statement

        Thank you for your attention. I would be pleased to answer
    any questions you may have at this time, Mr. Chairman.
        [The statement follows:]
                     Prepared Statement of Kristen L. Pugh
                                  introduction
        The Retired Enlisted Association (TREA) would like to thank the
    chairman and distinguished members of the Senate Defense Appropriations
    subcommittee for the opportunity to come before you to discuss funding
    issues as relates to our members needs. We extend our appreciation for
    the funding levels last year as it pertains to health care, retirement
    benefits, and pay. In addition, we are requesting increased levels to
    meet the needs of military retirees, guard and reserve as well as
    active duty and their dependents.
        TREA has 100,000 members and auxiliary representing all branches of
    the armed services, retired, active duty, guard and reserve whose
    continued concern over the downsizing of the DOD Budget impacts their
    daily lives from the healthcare they receive at a military facility to
    the retirement check they receive in the mail. Medical care, adequate
    pay, inflation protected retired pay, and commissaries are concerns of
    the entire military community.
                                  health care
        With bases closing, military treatment facilities (MTFs) downsizing
    and demographics changing, the need to provide access to health care to
    our ever growing number of aging retirees creates anxiety with those
    that ``were promised lifetime health care.'' The fact remains that DOD
    has a responsibility to those men and women who have served in the
    uniformed services to provide a medical benefit to nearly 50 percent of
    the current retired military beneficiaries that were promised health
    care. The demographics have changed from the 1950's when retirees were
    only 7 percent of the military health care beneficiary population,
    therefore Congress needs to provide adequate funding to create a plan
    to administer a health care benefit to retirees. The funding from this
    committee for the Federal Employees Health Benefit Plan (FEHBP) for
    Medicare Eligible Military Retirees Test program is appreciated and the
    step in the right direction to testing the viable health care options
    for retirees access to medical care in the future. As this committee is
    aware, this is only one part of the matrix for accessing health care,
    pharmacy redesign and the expansion of the current test of Medicare
    subvention will help offer a complete medical benefit for Medicare
    eligible military retirees.
    Pharmacy redesign
        The Fiscal Year 1999 Defense Authorization Act directed DOD to
    establish a mail order pharmacy program and discount retail benefit for
    military retirees in two designated non-catchment areas by October 1,
    1999. TREA was an active participant in the preliminary planning
    discussions on pharmacy redesign with DOD, until recently when the
    March 1, 1999 report deadline was due to Congress and was not met until
    May 1.
        On March 10 of this year, the Chairman of the House Armed Services
    Subcommittee for military personal, Congressman Steve Buyer (R-IN),
    held a hearing to identify current problems in the Military Pharmacy
    program. Dave McIntyre (TriWest Healthcare Alliance, CEO), Virginia
    Torsche (Representative for the Military Coalition, TMC), and Stephen
    P. Backhus (GAO's director for military health care) brought forth some
    proposals to redesign the current pharmacy benefit. These three
    representatives agreed that an integrated pharmacy benefit to combine
    the MTF outpatient pharmacy, national mail order pharmacy (NMOP), and
    the TRICARE network pharmacy was essential to creating a cost effective
    and efficient nationwide military pharmacy program. Of course, this
    requires funding to bring these three entities under one computer data
    system. Dr. Sue Bailey agreed to these comments on pharmacy redesign by
    stating, ``DOD to look first at our information systems which I believe
    is the key to really providing for an updated and efficient, cost
    efficient and medically efficient, pharmaceutical delivery system.''
        GAO's June 1998 report, Defense Health Care: Fully Integrated
    Pharmacy System Would Improve Service and Cost-Effectiveness, made the
    recommendation that one computerized pharmacy system would not only
    save DOD dollars, but would prevent health conditions from occurring
    due to drug interactions. Mr. Backhus referenced the conclusion of the
    report by stating, ``in delivering its $1.3 billion pharmacy benefit,
    stem largely from the way it manages the three programs. DOD needs to
    take a system-wide view of MTF and contractor operations, because they
    share patient populations. Because non-integrated databases,
    conflicting formularies, and varying eligibility rules, changes made to
    one program inevitably affect the others and have unintended
    consequences for DOD and contractor costs, as well as for beneficiaries
    access to the pharmacy benefit.''
        Again, I cannot stress the concern over the access of
    pharmaceuticals to our Medicare eligible military retirees due to cost
    and increasing use of drugs for our senior citizens. We are requesting
    additional funding to be allocated to expand the pharmacy benefits to
    Medicare-eligible military retirees for the NMOP and the extension of
    the under 65 drug benefit for the over 65. In addition, we are asking
    for complete funding for a pharmacy redesign to include providing an
    integrated data system, as well as a complete national formulary that
    addresses the drug utilization of our aging war heroes and heroines.
    TRICARE senior prime demonstration program
        TREA would like to thank you for your support for the Tricare
    Senior Prime Test program, Medicare Subvention. With the favorable
    response to this program by military retirees in those six designated
    test sites, TREA is asking for nationwide implementation of TRICARE
    Senior Prime. Senator Phil Gramm (R-TX) introduced S. 915 to make the
    TRICARE Senior Prime program permanent on a phased-in basis. The bill
    would expand Senior Prime to ten additional locations with full-service
    military hospitals by January 1, 2000 and then across the remaining
    TRICARE Prime catchment areas no later than October 1, 2002.
        Many of our Medicare-eligible retirees have received letters from
    hospitals stating that ``space availability'' no longer exists or is
    extremely limited due to downsizing of staff at MTFs. Allowing as many
    Medicare-eligible military retirees to use Medicare at MTFs will
    provide them with yet another option for health care. Though it should
    be understood that this is not the complete solution to the current
    problem, as it would provide health service to 33 percent of the 1.2
    million retirees over 65 now, but is an important piece to solving the
    whole health care dilemma for these beneficiaries.
        The connotation of ``TEST'' has deterred some of our members from
    enrolling in TRICARE Senior Prime, though they want to participate,
    they have a lack of trust for the MTF that turned them away years ago
    only to welcome them back again with no guarantees of health care past
    the three year test. TREA has discussed this issue with DOD Health
    Affairs, TRICARE Management Activities (TMA), TRICARE contractors, and
    our members that all conclude that they support the initiative to
    expand this program. I would like to add that Senator Gramm's bill, S.
    915, would give DOD the option to provide a fee-for-service Medicare
    option at certain MTFs if this would be more cost effective for those
    facilities.
        TREA urges the support for funding from this committee to expand
    TRICARE Senior Prime to a permanent program. This committee's support
    would ensure expanding TRICARE Senior Prime to 10 additional sites by
    January 1, 2000 and national expansion on October 1, 2002 to provide a
    true health care benefit to military retirees that still reside near
    MTFs.
    TRICARE: Full funding for all military beneficiaries
        In order to ensure the viability of TRICARE for all eligible
    beneficiaries to the program, it is necessary that TRICARE funding
    reflect the number of beneficiaries eligible for military health
    benefits, not just the ever-declining number of people able to use the
    military system the previous year. The overall Defense Health Programs
    continue to have funding shortfalls, TREA urges this committee to
    provide adequate funding for military readiness as well as the current
    peacetime component. Our active duty members need assurances that
    funding will enable access to quality health care for their families,
    as well as assuring incentives for these uniformed service members to
    be recruited and retained in the military. As well, the promise of this
    health care benefit must be kept for our military retirees that are
    over and under the age of 65.
        Additional funding will be required to keep providers in TRICARE
    Prime networks as our members are experiencing physicians leaving the
    system. Most TRICARE managed care support contractors have negotiated
    TRICARE Prime reimbursement rates with network providers that are even
    lower than Medicare. Though the issue is a combination of low rates and
    physicians not being paid in a timely manner due to claims processing.
    TRICARE is giving physicians two disincentives for not signing up in
    the networks, low payment and slow payment.
        TRICARE Standard (CHAMPUS) reimbursement levels are still much to
    low to attract quality health care providers. There are also
    unreasonable delays in reimbursement for TRICARE Standard (CHAMPUS)
    claims. Members have reported that in the more rural areas, and even
    some urban areas, where providers do not depend on a military patient
    base, health care providers have become increasingly unwilling to
    accept TRICARE Standard (CHAMPUS) patients at all. TREA feels that de-
    linking the CMAC (CHAMPUS maximum allowable charge) from the Medicare
    Schedule and authorizing higher payments to providers as necessary will
    improve access to quality care for our beneficiaries.
        The current claims processing system for TRICARE needs to be
    revamped in order to reduce the hassles of claims payment for
    physicians and beneficiaries. The beneficiaries end up getting caught
    in the middle when they receive collection notices from their
    creditors, even after they were told the claim would be paid by the
    TRICARE subcontractor. General Reimer restated this point at the recent
    TRICARE Conference on February 1, 1999 as it is a reflection of
    recruiting and retention, ``When a recruiter facing challenges with
    having to go out there and sell the military, and is also facing a
    letter of indebtedness because he hasn't paid or she hasn't paid their
    medical care bills, which are not theirs--they belong to somebody else,
    the HMO supporting that area, that is a tough situation.'' Also,
    Senator Kay Bailey Hutchison (R-TX) included the Military Health Care
    Improvement amendment to S. 4, Soldiers', Sailors', Airmen's and
    Marines' Bill of Rights, which directed DOD to bring the TRICARE claims
    processing to the best commercial industry standard. The amendment
    included the requirement for electronic processing for claims and
    streamlining the information flow, this being two pieces of the claims
    puzzle to be fixed. We request this committee to support a redesign of
    the claims processing procedures to put mechanisms in place via the
    TRICARE contractor, claims subcontractor, and DOD to bring the claims
    system to ``the best industry standard.''
        As we review the TRICARE program, the issues of low reimbursement
    rates and claims processing continue to be a disincentive for providers
    to sign up with a Prime network or to be a provider to accept TRICARE
    Standard. We will continue to work with the Senate Armed Services
    Committee to address the bureaucracy of the overall TRICARE program,
    but one fact remains, money needs to be fully funded to provide a
    comprehensive health care benefit to the men and women who serve and
    their families, as well as those that have sacrificed for this country
    in their career in the uniformed services.
    FEHBP-65+ Test Program
        Currently, DOD and the Office of Personal Management (OPM) are in
    the process of implementing the FEHBP-65 + test program for the open
    enrollment season to begin November 1, 1999. TREA is concerned that the
    rate structure set by the insurance carriers will deter our members
    from enrolling in the program, due to high cost premiums that may be
    set without access to reserve funds by the carriers. As I speak today,
    actuaries in the eight test areas are determining the cost of this new
    category of enrollees in a separate risk pool. OPM may allow the
    various plans to use administrative or contingency reserves to
    compensate for possible financial risk of enrolling service retirees
    (even though this is the usual practice under FEHBP for federal
    civilian beneficiaries). This access to a reserve fund would control
    costs for the carriers, especially since this is a limited test with a
    limited amount of enrollees in each site. Carriers will set high
    premiums over and beyond the cost of current FEHBP programs in order to
    protect their groups, until they gather some claims experience for this
    new group of beneficiaries.
        In order to have a fair and accurate test, we need to provide the
    opportunity for Medicare eligible military retirees to enroll in FEHBP
    in the November open enrollment season with reasonable premiums. As we
    testified last year before this committee, we know that not all
    military retirees will enroll in this program, but we need to give them
    the option to make that choice in order to determine the future of
    providing care for those that have served in the military. TREA is
    urging this subcommittee to support access to the OPM reserve accounts
    for the purpose of determining rates for the FEHBP+65 test. It is
    absolutely necessary that we give these retirees an equitable benefit
    that is as good or as equal to federal retirees.
    Medicare part B waiver for military retiree 65+
        Senator Christopher ``Kit'' Bond (R-MO) will be reintroducing his
    legislation to authorize the waiver of the penalty for not enrolling in
    Medicare Part ``B'' for Medicare-eligible military retirees. Retirees
    were counseled by MTF advisors not to enroll in Part ``B'' because they
    resided near MTFs and would be able to access their free health care.
    These retirees should not be punished with late enrollment fees due to
    the fact that the local MTF has closed. The issue must be addressed now
    as the Secretary of Defense is planning two additional rounds of BRAC
    for 2001 and 20005.
        TREA believes that this small investment will enable retirees to
    enroll in health care programs which require Medicare Part B for
    eligibility such as TRICARE Senior Prime and the Fee-for-Service Option
    plans in FEHBP. Currently, we have military retirees that either are
    paying a high penalty for Medicare Part B, or just cannot enroll
    because it is to costly.
    Medicare part B waiver for Medicare eligible retirees under age 65
        On March 19, 1998 the Defense Enrollment Eligibility Reporting
    System (DEERS) and the Health Care Financing Administration (HCFA)
    finished a data match for those military retirees that were under 65
    and eligible for Medicare Part B. These 12,093 individuals were then
    sent letters by DEERS on March 20, 1998 to inform them that they must
    enroll in Medicare Part B, by March 31, 1998 in order to continue to
    receive their CHAMPUS/TRICARE benefit. This data match was delayed for
    6 years, after the requirement for Medicare Part B to receive CHAMPUS/
    TRICARE benefits had been implemented in the Defense Authorization Act
    for fiscal year 1992 for Medicare Eligible Disabled Retirees under 65.
        By the time the 12,093 affected individuals received a letter from
    DEERS there was little or no time to act in attaining the Part B
    coverage by March 31, 1998. This was due to incorrect addresses in
    DEERS or not being home when the letter was sent. For those that did
    enroll, they incurred a 10 percent penalty for the years of not
    enrolling, while the others had to wait for the Medicare Part B open
    enrollment season from January 1, 1999 to March 31, 1999 to be
    penalized.
        TREA is requesting funding to waive the Medicare Part B 10 percent
    penalty. Out of the 12,093 that took part B with a penalty, the
    legislation will grant equitable relief through the Social Security
    Administration (SSA) to eliminate their penalty. We ask for support in
    funding this part B waiver for Medicare eligible disabled retirees.
    Retiree dental plan
        The Retiree Dental plan does not provide coverage of crucial
    benefits, such as bridges and crowns which are needs characteristic of
    our members. Currently, the contract is not subsidized by DOD, which
    would mean that increasing the benefit level now would make the program
    to costly to are aging retirees. Therefore, TREA is requesting funding
    for a subsidy for the DOD Retiree Dental plan's premium to expand the
    benefit schedule to military retirees.
                         retirement and survivor issues
    Concurrent receipt
        The issue of concurrent receipt of military retired pay and VA
    disability payment is a great concern to military retirees. Presently,
    military retired veterans are the only class of veteran who has their
    retirement pay reduced, dollar for dollar, if they receive disability
    compensation from the Department of Veterans Affairs. Senator John
    McCain (R-AZ) has introduced legislation, S. 789, legislation which
    would address this reduction. The members of TREA and all military
    retirees would greatly appreciate the support of this committee to
    provide a funding mechanism for Senator McCain's legislation.
    Particularly, S. 789 would provide specific relief to the most severely
    disabled military retirees, those rated 70 percent and higher, who have
    served over twenty years and who's disability has developed within four
    years after separation from the military. This is equitable
    legislation, the passage of which would be a tremendous step in
    restoring the confidence of military retirees to reflect the nation's
    appreciation for their years of service and sacrifice. It is vital that
    this committee appropriates the necessary funding to guarantee retirees
    receive their earned retirement benefits.
    Survivor benefits plan (SBP)
        There are two issues regarding the Survivor Benefit Plan (SBP)
    which military retirees have concerns about. The first concern deals
    with legislation enacted by Congress last year which called for a 30
    year paid-up SBP program to begin in 2008. We are appreciative of
    Congress for the passage of this important legislation. However, with
    the current budget situation, we see no reason why the paid-up program
    cannot be moved up to 2003, as was originally called for.
        Another issue concerning SBP which has an even greater impact on
    military retirees, and their survivors especially, is the off-set which
    survivors face once they become eligible to receive Social Security.
    Under the existing rules of the Survivor Benefit Plan, survivors of
    military retirees are eligible to receive 55 percent of the survivors
    retirement until they are Social Security eligible, then this amount is
    reduced to 35 percent. This off-set is particularly upsetting to those
    survivors who have earned Social Security benefits through their own
    career and have had to live the life of a military spouse. Why, they
    ask, should they have their earnings reduced because they were married
    to a military retiree, as opposed to a retiree from a major
    corporation? S. 763, introduced by Senator Strom Thurmond (R-SC) would
    reduce this off-set. By reducing the off-set to allow survivors to
    receive 40 percent, and then 45 percent at the end of five years, of
    their spouses retired pay, this legislation will be a great assistance
    to survivors of military retirees. Distinguished committee members, we
    ask for your support to reduce this penalty which military retiree
    survivors have to pay. Appropriate the necessary funding so survivors
    of our military retirees can receive the financial benefit they have
    earned when they need it most.
                               active duty issues
    Retirement system
        TREA urges the members of this Committee to join with their
    colleagues in the Armed Services Committee and support the changes to
    the military retirement system which will properly reward individuals
    for a career of military service. As you are no doubt aware there are
    currently three retirement systems in effect in the uniformed services.
    The differences between the three have, no doubt, caused one
    servicemember to question why his career did not hold the same value as
    another servicemember of the same rank. TREA would like to see a
    complete repeal of the ``Redux'' system introduced in 1986,
    particularly the COLA reduction, the long term effects of which may be
    greater than the reduced percentage at twenty years of service.
    However, the legislation which the Senate passed in S. 4 deals with the
    discrepancy in the retirement systems in a way which TREA feels is
    worthy of congressional support. These changes will be costly, but
    national defense is not inexpensive. Chairman Stevens (R-AK) summed it
    up in a statement made in August of 1998, ``It is my intention to work
    with the leaders here in Congress and the Secretary of Defense to put
    us on a track to fix the retirement system. There is no higher defense
    funding priority, for it has led to a rise of decisions by men and
    women in the services not to continue (in the military) because of
    their feeling about the unfairness of retirement policies.'' In order
    to guarantee the strength of our military we must ensure that those
    mid-career personnel make the decision to remain in the service. It is
    imperative that the necessary funding is appropriated to carry out
    these changes to the military retirement system.
                          base closure and realignment
        During the deliberations of Base Realignment and Closures (BRAC)
    the impact on military retirees does not seem to be a very important
    issue, if it is even addressed at all. Legislation has been introduced
    in the Senate which calls for two additional rounds of BRAC. Secretary
    of Defense Cohen has also been ``lobbying'' for more Base Closures to
    re-invest in modernization. However, before we close bases there are
    several questions which must be addressed. These questions include:
    What about the military retiree who rely on base facilities for health
    care? Why does DOD wait for bases to close and then try to solve the
    health care problem? We believe a plan must be in place to resolve
    retiree health care before a base closes. It is important to remember
    that military and retired pay is based on a concept called ``Regular
    Military Compensation'' (RMC). Health Care, Exchange and Commissary
    benefits are included in RMC. When a base or post is closed, the
    military retiree is not compensated for this loss of RMC. It is
    imperative that benefits such as the Mail-order pharmacy and BX Mart be
    provided to retirees in BRAC areas. We ask that all of these issues be
    addressed, authorized and appropriated before additional rounds of BRAC
    begin.
                                   conclusion
        Mr. Chairman, members of the committee, why do military retirees
    have to come before Congress and fight to have lost benefits restored?
    Health care, commissary/exchange privileges, survivors' benefits, the
    list goes on and on. In return for a life-time of service to the
    nation, military retirees have been told health care effectively ends
    at age 65, the base you based your retirement life on may close and
    your survivor will not get the amount of money you had planned on.
    People ask why the military cannot recruit young people today. Has
    anyone asked if military retirees have stopped recruiting young people?
    For years, the military retiree was one of the best recruiters the
    uniformed services had. Today, retirees are a disappointed and
    disenfranchised group of people. You, today, have the opportunity to
    help retirees and ensure the residual effects, such as pride,
    patriotism and a whole new class of recruiters.
        Thank you for your attention. I would be pleased to answer any
    questions you may have at this time.

        Senator Stevens. I was interested in your comments about
    the Federal employees health benefit plan (FEHBP). Do you want
    it to go ahead before the tests are over?
        Ms. Pugh. Full expansion of FEHBP? Chairman, right now we
    are having problems implementing the program between DOD and
    the Office of Personnel Management (OPM). We would like to see
    expansion, but we need to get it up and running. And any
    assistance that you can give us at this time is necessary.
    Right now we are very concerned over the reserve account issue,
    which OPM is not letting us access the reserve account. Which
    would mean that the retirees would have a higher rate structure
    than Federal employees currently. And I think yet again it
    would be another inequity.
        Senator Stevens. Higher than what?
        Ms. Pugh. Than the current FEHBP rates. We were hoping that
    they would be more in line with the current rates.
        Senator Stevens. More in line with the retired civil
    service people or the currently employed civil service people?
        Ms. Pugh. For the retired employees right now, they would
    be higher. Those actuaries for those carriers are going to set
    the rates higher because this is a new group, a new population
    of members.
        Senator Stevens. Military retirees are younger than the
    civil service retirees. I will check into that.
        Ms. Pugh. OK. This is for the test program.
        Senator Stevens. I used to ride herd on FEHBP for many
    years on the Governmental Affairs Committee. I am interested in
    the test. I do not know how it will work, because of the way
    many retirees are dispersed as compared to civil service
    retirees.
        Ms. Pugh. Well, any help that you can give us at this
    time--the TREA resolution, I mean we would like to see this as
    a program for all military retirees. Thank you very much.
        Senator Stevens. Thank you.
        And now we turn to Timothy Dixon, please.
        Dr. Dixon, thank you.
    STATEMENT OF TIMOTHY H. DIXON, Ph.D., PROFESSOR,
                ROSENSTIEL SCHOOL OF MARINE AND ATMOSPHERIC
                SCIENCE AND DIRECTOR, GEODESY LABORATORY,
                ON BEHALF OF THE UNIVERSITY OF MIAMI
        Dr. Dixon. My name is Tim Dixon. I am a Professor at the
    University of Miami, and Director of the University's Geodesy
    Lab. I am here on behalf of a consortium of universities to
    address three research initiatives. I very much appreciate the
    opportunity to appear before you this morning, especially given
    the schedule you have had this week and the review of very
    compelling needs we have just heard this morning. I have to
    admit that I am humbled.
        The three initiatives I am talking about involve satellite
    data receiving, an oceanographic research vessel, and an
    initiative for cancer research and treatment.
        Let me first address the satellite data receiving station.
    The defense component of this station involves synthetic
    aperture radar (SAR). SAR is synthetic aperture radar. And it
    is an incredibly powerful remote sensing system, capable of
    taking high resolution images, day or night, in cloudy weather
    or clear. It has tactical uses, such as making high-accuracy
    maps and monitoring ship and troop movements at night or in bad
    weather.
        It has civil defense applications, such as tracking
    hurricanes and doing rapid damage assessment after storms and
    floods. And it has numerous scientific applications, which are
    my expertise and I will not bore you with those this morning.
    They have to do with mapping ocean waves and currents, studying
    earthquakes and monitoring volcanoes and predicting eruptions.
        Unfortunately, our current national infrastructure
    precludes many of these applications. Although the satellites
    pass overhead, the Southeastern United States lacks a ground
    receiving station such as you have in Alaska. And without the
    ground receiving station, we cannot retrieve the signals. Right
    now, our data must come from stations in Canada or in Oklahoma.
    And it can take as long as 2 months to acquire the data.
        In a recent report, the Office of Naval Intelligence (ONI)
    concluded that civilian SAR satellites now in orbit could play
    a critical role in the Nation's drug interdiction effort
    because of its ability to detect small, fast-moving boats at
    night and through clouds. These craft travel at night and are a
    major source of drug delivery to our shores.
        ONI further concluded that this capability could only be
    realized if a SAR ground station was constructed somewhere in
    the Caribbean region, and recommended Miami as a possible site.
    The University of Miami, in conjunction with a consortium of
    Florida and other U.S. universities, proposes to build such a
    station, in collaboration with Southern Command, which, as you
    know, is now headquartered in Miami.
        This station will enable us to see virtually all parts of
    the Caribbean region, North and South America, Central America,
    Mexico, and the equatorial Atlantic, and will allow us to
    address a host of military remote sensing applications, civil
    defense applications, and scientific research.
        Next I would like to give our support to an initiative
    brought to you earlier by the University of Southern
    Mississippi, the lead institution in a consortium of
    Southeastern universities called SECOR. This consortium
    includes universities in Texas and Florida. SECOR seeks your
    support to construct and operate a research vessel, a research
    ship, that would allow us to address critical environmental and
    ocean research needs in the Gulf of Mexico, the competitive,
    and the equatorial Atlantic.

                               prepared statement

        Finally, we request your support for a cancer research
    initiative that involves research, treatment and control. This
    initiative will focus on minority ethnic groups, taking
    advantage of Miami's unique multi-ethnic and multicultural
    society, to investigate and treat a broad range of cancers.
    Some of which affect certain ethnic and cultural groups at
    rates far above the national average. Given the Armed Forces
    increasing ethnic diversity in the next millennium, we feel
    this initiative is appropriate for your committee to consider.
        Thank you.
        [The statement follows:]
                     Prepared Statement of Timothy H. Dixon
        Mr. Chairman and Members of the Subcommittee: I appreciate the
    opportunity to present testimony on behalf of the University of Miami.
        The University is seeking your support for three initiatives within
    your purview: the National Center for Advanced Tropical Remote Sensing;
    the University's Minority Cancer Prevention, Control, and Treatment
    initiatives; an oceanographic research vessel to be used by a
    consortium of universities in the southeastern United States (SECOR)
    for Gulf Coast and Caribbean Basin research.
        First, let me address the Defense component of the National Center
    for Advanced Tropical Remote Sensing. The center will include a state-
    of-the-art, real time SAR facility with full satellite downlink
    capability. SAR (Synthetic Aperture Radar) is a powerful remote sensing
    system operating at microwave frequencies, able to image in all
    weather, day or night. Satellite SAR systems are able to monitor the
    movement of targets on land and ocean, map topography with
    unprecedented accuracy, rapidly assess storm and flood damage to urban
    and rural infrastructure even through thick cloud cover, and have many
    other scientific and civil defense applications. Real-time SAR imagery
    can make a major contribution to state and federal agencies, especially
    in the areas of drug interdiction and human smuggling, storm damage
    assessment and natural hazard mitigation, including floods, severe
    storm, landslide, tsunami and volcanic eruption, all critical issues
    throughout the Caribbean Basin.
        Unfortunately, our current national infrastructure precludes most
    of these applications. The southeastern U.S. lacks its own ground
    receiving station, so even though a number of satellites frequently
    pass over targets of interest, the data must be downlinked to stations
    in either Canada or Oklahoma. This downlink request must be made months
    in advance, as large numbers of users are requesting time on a limited
    facility. It often takes so long to obtain and process raw SAR data
    into a usable image that the ``window of opportunity'' for time-
    critical applications is lost. In a recent test involving NIMA
    (National Image and Map Agency), the University of Miami and Southern
    Command (Southcom), now headquartered in Miami, high priority data were
    received fully two months after initial order.
        As more people and societal infrastructure concentrate along
    coastal areas, the United States becomes more vulnerable to hurricanes,
    the costliest natural disaster we face. Early and accurate warnings can
    help focus the evacuation region, saving millions in dollars per year
    and reducing the detrimental impact of these storms. SAR can improve
    our ability to accurately forecast the time and location of landfall
    for severe storms and hurricanes, but only if the data are available to
    operational agencies in a timely manner. At the present time the
    southeastern U.S. and Caribbean Basin lacks this capability.
        Drug interdiction is another good example of a real-time
    application. Small, fast moving boats are one of the major vectors for
    drug delivery to the USA. These boats travel at night without running
    lights, and are very difficult to detect. Given the large expanse of
    ocean, frequent cloud cover, and the relatively small number of
    surveillance flights, detection rate by conventional means is low. A
    recent test by the Office of Naval Intelligence (ONI) proved that
    civilian satellite SAR can detect such craft (security considerations
    preclude the use of military satellites for such routine policing
    tasks). However as noted in ONI's Final Report (10 April 98) ``Lack of
    a ground station within satellite mask for the Caribbean region
    precluded tactical use of the systems. Establishment of a ground
    processing station in the Caribbean region is essential''. The
    University of Miami proposes to do just that, in partnership with
    Southcom.
        A SAR Facility in South Florida would significantly expand the
    present satellite coverage available to U.S. agencies and scientists,
    extending as far south as the equator, as far east as the central
    equatorial Atlantic, and as far west as the eastern Pacific Ocean. An
    operational center with this coverage and quick turn-around time would
    significantly enhance military and law-enforcement missions in the
    Caribbean Basin.
        The University of Miami uses SAR data for a variety of terrestrial
    and oceanographic research applications. We have experience in the
    operation of satellite downlink facilities, in the analysis and use of
    SAR data, and in the development of state of the art algorithms for a
    variety of remote sensing applications.
        We seek $5 million to establish a SAR ground station in fiscal year
    2000. Scientists from a consortium of Florida and out-of-state
    universities will provide the scientific expertise for development, and
    will work with Southcom to build a fully operational remote sensing
    facility to meet a wide variety of military and civilian needs. We are
    convinced that a long-term partnership between academia and the
    military is the best way to meet the challenging joint requirements of
    continued access to state of the art science and technology, combined
    with reliable, operational coverage. Military, government agency, and
    civilian science applications all require the same basic SAR data,
    making a shared facility a good use of scarce resources. The unique
    collaboration of civilian earth scientists and military personnel we
    propose will provide military and law-enforcement as well as civilian
    government agencies with state of the art satellite data. It will help
    us to interdict drugs, mitigate natural disasters, monitor and
    understand environmental change, and also provide critical scientific
    data to meet the challenges of the next millennium.
        Next, Mr. Chairman, we ask that you support the request put forward
    by the University of Southern Mississippi on behalf of the Southeast
    Consortium for Ocean Research (SECOR) for the construction of a new
    Class II oceanographic-fisheries vessel for the Southeast/Gulf of
    Mexico region. Other SECOR members are the University of Texas at
    Austin and Texas A&M University. UNOLS is apprised of and supports the
    existing SECOR arrangement, which provides dockside facilities in
    Galveston, Texas and Miami, Florida, and coordinates instrumentation
    and marine technician support among SECOR members. This initiative will
    provide an intermediate-size vessel for critical environmental research
    in the Gulf of Mexico and adjacent seas. It will be small enough to
    serve as a versatile coastal vessel, and will be outfitted with state-
    of-the-art equipment and instruments. SECOR, our Florida-Mississippi-
    Texas partnership, seeks $35 million for this important project.
        Finally, Mr. Chairman, I join my colleagues at the University of
    Miami School of Medicine in seeking support for a cancer prevention,
    control, and treatment initiative. Our School of Medicine and Sylvester
    Comprehensive Cancer Center provide the nation with a unique resource
    for basic, applied, and clinical cancer research and treatment. We are
    convinced that our cancer work in Miami with high-risk populations and
    cancer survivors, two-thirds of whom are African-American, Hispanic,
    representatives of other diverse ethnic groups--can benefit DOD and the
    nation as a whole. It is these populations that are becoming more and
    more the ``face'' of our current and future military forces. We are
    requesting $10.5 million for this initiative.
        Our $10.5 million request consists of three parts. First, $5
    million to more fully develop the cancer prevention and control
    initiatives, focusing on ethnically diverse minority populations
    because of the increased incidence of cancer, including prostate and
    breast cancer, among minorities. Next, $2 million for an expanded basic
    and clinical research effort that focuses on the potential application
    of cutting-edge blood transplantation treatment technologies and to
    more fully explore application to older children and young adults, and
    $2 million for the development of critically needed laboratory and
    blood storage facilities. Finally, $1.5 million annually for five years
    to support the breast cancer early detection program, increasing the
    number of women screened from an average of 15 to 50 per day, which
    would result in screening 12,500 women per year.
        Mr. Chairman, we understand how difficult this year will be for you
    and the Subcommittee. However, we respectfully request that you give
    serious consideration to these initiatives, all of which we believe
    will provide great benefit to the nation.
        Thank you for permitting to appear personally today.

        Senator Stevens. The first two may be within our reach, but
    the last one is an NIH function. And I urge you to talk to
    them. We are not going to increase defense spending for medical
    uses this year. We are at the point now where we almost have
    half-a-billion dollars of defense money going directly into
    medical research. And that is also infringing on the overall
    quality-of-life issues. We are just not going to go any higher
    in that this year.
        Dr. Dixon. Thank you. We will address those to NIH. Thank
    you.
        Senator Stevens. Thank you very much.
        Next is Dr. Joseph Mauderly and Dr. Matalon. Thank you very
    much.
    STATEMENT OF JOE L. MAUDERLY, M.D., SENIOR SCIENTIST
                AND DIRECTOR OF EXTERNAL AFFAIRS, LOVELACE
                RESPIRATORY INSTITUTE
    ACCOMPANIED BY SADIS MATALON, Ph.D., PROFESSOR OF ANESTHESIOLOGY,
                UNIVERSITY OF ALABAMA

        Dr. Mauderly. Thank you, Mr. Chairman.
        We are testifying on behalf of a joint project on acute
    military lung injury proposed by the Lovelace Respiratory
    Research Institute and the University of Alabama at Birmingham,
    UAB. Dr. Matalon, of UAB, will describe the problem.
        Dr. Matalon. Acute, or rapidly developing lung injury, is a
    very serious unresolved problem for the military. Trauma,
    burns, infection, or blood loss can result in a rapid
    accumulation of fluid in the lungs by means not well understood
    presently. During the Vietnam conflict, this condition affected
    over 90 percent of injured personnel who were evacuated alive
    from the battlefield but later died. Permanent lung disability
    is common. There is no specific treatment for this condition
    presently.
        In injured civilians, the condition is called adult
    respiratory distress syndrome (ARDS). There are about 150,000
    cases per year. The survival rate is only about 50 percent.
    Current research on ARDS does not focus on the special concerns
    of the military. Injury from inhaled chemical and biological
    agents, extensive bullet wounds, burns, blood loss, or blast
    injury often lead to ARDS. Field treatment, especially during
    the first hour after injury, is very important to minimize lung
    damage.
        Dr. Mauderly. Lovelace and UAB combined their resources to
    plan research to address this problem. Lovelace excels in
    studying injury from inhaled materials, and has a facility for
    handling highly toxic agents safely. Our Institute can create
    appropriate exposure atmospheres and use animals to evaluate
    injury and new treatments. UAB has complementary research and
    clinical skills. During the past 6 years, UAB scientists and
    clinicians have been studying the causes and prognosis of ARDS.
        Working with the Office of Naval Research, Dr. Matalon's
    group has begun to identify potential new treatments. The
    University treats many cases of ARDS in its hospital, and can
    readily evaluate new therapy. Together, we have designed a
    focused program, having high potential for solving key problems
    of military significance. This program brings together a better
    knowledge of lung injury of defense significance and the
    development of new treatments.

                              prepared statements

        Mr. Chairman, we respectfully request that the need for
    this important work be recognized in the Defense appropriation.
    Thank you.
        [The statements follow:]
                     Prepared Statement of Joe L. Mauderly
        It is proposed that the Department of Defense support the Center
    for Acute Lung Injury, a joint effort of the Lovelace Respiratory
    Research Institute and the University of Alabama aimed at improving the
    early management of life-threatening lung injury and enhancing lung
    repair. Support is also sought for the Research Alliance for Health and
    National Security, an alliance among the Lovelace Respiratory Research
    Institute, the University of New Mexico, and the Sandia and Los Alamos
    National Laboratories aimed at developing new technologies to identify
    and reduce military and domestic chemical, biological and radiological
    threats.
                          center for acute lung injury
    The Problem
        Acute, life-threatening lung injury is a major problem for the
    military, and is also a major unresolved cause of death in the general
    population. Military operations involve risk for chest injuries and
    other bodily injuries in which rapid-onset lung failure is the major
    threat to survival, even if the primary injury site is not the lung.
    Training and battlefield operations involve potential exposure of
    troops to smokes and obscurants that deposit in the lung, detonations
    produce shock waves that injure the lung, confined personnel spaces in
    equipment promote exposures to noxious substances under adverse
    conditions, and exposures to inhaled chemical, biological, and
    radiological agents injure the lung. Systemic infection and severe
    trauma promote onset of the adult respiratory distress syndrome (ARDS),
    a rapidly-progressing intractable condition involving respiratory
    insufficiency, oxygen starvation, and multi-organ failure. The present
    prognosis for repair, or functional restoration, of lung tissue
    seriously damaged by ARDS and other injuries is historically very poor.
    Two Institutions Join to Respond to the Need
        To address this problem, two of the nation's premier lung research
    institutions, the Lovelace Respiratory Research Institute (LRRI) and
    the University of Alabama (UAB), have joined their unique resources to
    establish a program aimed specifically toward the prevention and
    treatment of acute lung injury of defense significance. The Acute Lung
    Injury Center is proposed as a coordinated effort initially involving
    seven specific research goals complemented by the necessary research
    support cores. In addition to conducting independent research, the
    Center would also serve as a focal point for the research efforts of
    the military in this area and would be an effective extension of the
    multiple Defense offices charged with protecting the health of military
    personnel and their families.
    Roles of the Collaborating Institutions
        The Lovelace Respiratory Research Institute.--LRRI is recognized
    world-wide for its inhalation toxicology research, for its use of
    laboratory research to determine human health risks from inhaled
    materials, and for the federally-owned privatized inhalation laboratory
    it operates as a national resource. This unique laboratory is fully
    equipped to handle highly toxic agents, such as strategic chemical,
    biological and radiological agents, and has a long history of doing so
    safely. LRRI aerosol scientists are also known for their ability to
    monitor and characterize atmospheres under field conditions, and to
    reproduce those atmospheres under controlled laboratory conditions.
    LRRI excels in conducting laboratory studies of human lung health risks
    and therapies for lung disease. The Institute is currently working on
    new therapies that show promise for inducing the restoration of damaged
    lung tissue, a goal that the clinical and research communities have
    long thought unreachable.
        The University of Alabama.--UAB has, under the outstanding
    leadership of Dr. Sadis Matalon, established a world-renown laboratory
    studying the cellular and molecular mechanism of acute lung injury, and
    in particular, the mechanism of the development of ARDS. During the
    past 6 years, scientists and clinicians at UAB have conducted several
    key biochemical, molecular biology and physiological studies advancing
    our understanding of the basic mechanisms by which reactive oxygen
    species damage the lungs and identifying the pathological and
    physiological consequences and prognosis of this injury.
        Both LRRI and UAB have a solid track record of performing high
    quality research for DOD. In addition, both institutions have clinical
    research centers for clinical trials and extensive contacts and
    collaborations with biotechnology and pharmaceutical companies aimed at
    designing and testing new therapeutic agents. The combination of these
    two outstanding groups form a state-of-the-art team for addressing the
    problems of the DOD related to acute lung injury. It is the specific
    intention of the two collaborating organizations that the Center for
    Acute Lung Injury would be a much-needed first-line source of
    information and assistance for DOD when a problem regarding inhalation
    toxicology and acute lung injury arises.
    The Center's Research Strategy
        The two partner institutions have identified and prioritized a set
    of interrelated key issues that target current knowledge barriers, are
    amenable to research by their coordinated efforts in a constrained time
    frame, and have high potential for pay-off. Through the Center, this
    team will conduct integrated research specifically targeting lung
    injury, repair, and treatment issues pertaining to DOD problems. The
    research will include basic studies on induction and repair of acute
    lung injury, applied inhalation toxicity studies to address specific
    DOD problems, and atmosphere monitoring and characterization to meet
    DOD needs. Basic research will be conducted to determine the key
    defense mechanisms of the lung with emphasis on enhancing the defenses
    that kill pathogens, and studies to assess the ability of drugs
    (retinoids and growth factors) to promote wound healing and tissue
    repair.
        This carefully-targeted body of research will begin with the
    following seven projects supported by core activities at both
    institutions. A key feature of the work is that both LRRI and UAB will
    be represented among the chief investigators of each project.
      --Mechanisms of Pathogen Killing by Normal and Injured Lungs
      --Mechanisms and Prevention of Acute Lung Injury Following Systemic
            Trauma
      --Role of Oxidant Stress and FGF-1 During Acute Lung Injury
      --Role of Saudi Arabian Sand and Pyridostigmine in Gulf War Syndrome
      --Influence of Nicotine on Lung Inflammation from Acute Sulfur
            Mustard Vapor and Pneumococci
      --Toxicity of Inhaled DI-t-Butyl-Nitrophenol
      --Ability of Retinoids to Promote Tissue Repair after Acute Lung
            Injury
    Benefits to the Department of Defense
        More effective anticipation, prevention, diagnosis, and treatment
    of life-threatening acute lung injury will enhance the effectiveness of
    DOD programs at all levels from battlefield protection of troops from
    chemical and biological warfare agents or blast damage to routine
    protection of service personnel from toxic chemicals during peacetime
    duties. With emerging threats from weapons of mass destruction, state
    of the art information from the Center for Acute Lung Injury will be of
    interest to many DOD organizations and could have critical significance
    for U.S. tactical and strategic postures.
        There are many major DOD stakeholders in the issues addressed by
    this program. These include the Office of Naval Research (ONR) with
    broad responsibilities for improving technology to protect personnel,
    the U.S. Army Medical Research Institute of Infectious Disease
    (USAMRIID) with lead responsibilities for research to advance the
    medical prevention and treatment of biological diseases and biological
    warfare casualties, the U.S. Army Medical Research Institute for
    Chemical Defense (USAMRICD) which is the nation's lead laboratory for
    research to advance the medical prevention and treatment of chemical
    warfare casualties, the Defense Threat Reduction Agency (DTRA) which is
    dedicated to reducing the threat to the United States and its allies
    form nuclear, chemical, biological, conventional, and special weapons,
    the Air Force Nuclear Weapons and Counterproliferation Agency (NWCA)
    with responsibility for ensuring an effective deterrence posture for
    weapons of mass destruction, and the Defense Advanced Research Program
    Agency (DARPA) which is DOD's central research and development
    organization for pursuing high risk/high payoff research and
    technology. In addition, improved knowledge of the opportunities and
    limitations for preventing and treating acute lung injury will of
    interest to many special purpose organizations such as the Marine Corps
    Chemical and Biological Incident Response Force (CBIRF) which is a
    self-contained, task-oriented unit with the ability to detect hazardous
    materials, perform decontamination, and offer medical treatment and
    security.
    Funding is Sought to Conduct This Important Research
        A total of $6 million ($3 million each to LRRI and UAB) is sought
    to provide salaries, purchase equipment, provide core support services,
    facilitate travel for collaborating scientists between the two
    institutions as necessary to conduct the studies described above.
           research alliance for health and national security (rahns)
    The Problem
        There is a need to develop new technologies to deal with
    biological, chemical, and radiological threats. The military has faced
    chemical, biological and radiological threats for some time. There is
    increasing concern for domestic threats from these agents. Effective
    detection, mitigation, and countermeasures require a continual
    development of new technologies to outpace the development of threat
    agents and dispersion techniques. Examples of new technologies include
    sensors having greater sensitivity and range, better models for
    predicting dispersion, miniaturized analytical chemistry and
    microbiological techniques, better respiratory protection, improved
    inhalation drugs and delivery for protection or treatment, and more
    rapid and effective diagnosis, staging, decontamination, treatment, and
    follow-up of exposed individuals.
        These advances will require timely, coordinated, multidisciplinary
    research and development. No one institution has expertise in all these
    areas. Significant advances will require the integrated collaborative
    efforts of multiple institutions. The ideal consortium would be
    comprised of institutions having the requisite core capabilities,
    located in the same area, and having a track record of working together
    effectively. The RAHNS Alliance is proposed as a exactly such a
    consortium.
    RAHNS--Responding to the Need
        The mission of RAHNS is to develop new technologies to protect the
    health of our military and the public, and to protect national security
    from biological, chemical, and radiological threats.
        In recognition of the importance of the threat and the pressing
    need for defensive technological advances, Lovelace Respiratory
    Research Institute (LRRI), Sandia National Laboratories (SNL), Los
    Alamos National Laboratory (LANL), and the University of New Mexico
    (UNM) have formed an alliance (RAHNS) to merge their research
    resources, technical experience, and intellectual capabilities in an
    enhanced collaborative manner. The alliance brings together two
    National Laboratories having superior strengths in security-related
    engineering, computational, and genomic research, a private nonprofit
    basic biological research organization having world-renown strengths in
    aerosol science, inhalation toxicology, and respiratory biology, and a
    university having exceptional strengths in infectious and respiratory
    disease. Moreover, the resources of these members will be extended to
    other potential federal, industry, and university, research and
    development partners.
        The Alliance member organizations have collaborated together in
    pairs for many years, including research and development activities
    sponsored by the Department of Defense and aimed at chemical-biological
    defense barriers. As RAHNS, the members will now approach the problems
    as an integrated team to identify and solve problems, develop
    technologies, and transfer technologies to other federal and nonfederal
    entities as appropriate. Coordination will involve facilities, as well
    as research activities. Space will be set aside specifically for this
    work. Private entities with Small Business Innovative Research (SBIR)
    funding will be offered space and services as appropriate. Space will
    also be provided to industrial partners for commercializing the new
    technologies that result from this research.
    Roles of Alliance Members
        The Lovelace Respiratory Research Institute.--LRRI has extensive
    experience studying the health effects of inhaled toxins,
    radionuclides, and biological agents and predicting human risks from
    laboratory simulations. It manages a federally-owned, privatized
    facility which has unique capabilities for simulating atmospheres of
    airborne agents in the laboratory and assessing health responses to
    inhaled materials. It has generated atmospheres of airborne biological
    agents for SNL sensor development efforts and is currently conducting a
    DOD study of the long-term effects of exposure to traces of airborne
    neurotoxin. The Institute has a 30-year record of working safely with
    airborne sensitive materials without personnel exposure or
    environmental releases.
        Sandia National Laboratories.--SNL is distinguished in the area of
    remote sensing, agent detection and identification, transport modeling
    and simulations, intelligent agents, and remote handling (robotics).
    Photonics, micro-electro-mechanical systems, system miniaturization,
    and computational analysis adapted to these areas will be emphasized.
        Los Alamos National Laboratory.--LANL is heavily involved in the
    national effort to sequence the genomes of the most dangerous potential
    pathogens in the biological warfare setting. LANL has the expertise to
    create new, rapid field-ready diagnostic technology using their genome
    expertise. Such technology, when added to the aerosol science from LRRI
    and software and hardware capabilities from Sandia, could lead to
    significant new battlefield-ready counter measures and early diagnostic
    capabilities.
        University of New Mexico.--The UNM Health Sciences Center School of
    Medicine has an excellent respiratory disease group with strengths in
    pathology, medicine, and infectious disease. This group is well-known
    for its experience in successfully identifying and treating cases of
    hantavirus infection. It played a key role in the development of a
    rapid diagnostic test based upon recombinant DNA technology within 4
    months of the onset of the 1996 hantavirus epidemic in the southwest.
    This group has current DOD funding for anti-biological threat research.
    RAHNS Focus Areas
        Hantavirus.--Use of this existing New Mexico model of aerosolized
    infectious disease (including vertical integration of all aspects of
    exposure, detection, diagnosis, treatment, and mitigation) to provide
    realistic protocol guidance for other chem/bio/radiological threats.
        Aerosol Delivery.--Use of traditional alliance expertise to
    predict, identify, and understand technical advances in dispersion
    threats.
        Respiratory Protection.--Use of traditional alliance expertise to
    develop more effective, less expensive, filtration technologies with
    built-in, agent-specific protection and detection.
        Detection of Agents in Human Fluids.--Development of sensitive,
    affordable, preferably field-deployable, methods for rapid detection of
    agents in human sputum or blood.
        Biodetection.--Development of improved technologies for other
    methods of screening for biological contamination, including
    differentiating from background effects.
        Agri-Economic Vulnerabilities.--Assessment of vulnerabilities and
    countermeasures for threats to livestock and agricultural products.
        Emergency Search Capabilities.--Building on the Nuclear Emergency
    Search Team (NEST) experience base to develop improved technologies and
    strategies for locating, identifying, and neutralizing chemical and
    biological threats.
        Decontamination and Recovery.--Development and evaluation of
    technologies for restoration of contaminated sites, including
    assessments and models of long-term, low-level health risks,
    measurement technologies, and adequate cleanup criteria.
        Medical Intervention.--Development of antidotes, active-site
    blockers, and other methods to prevent or reduce the effects of
    exposure.
        ``Natural'' Public Health Threats.--Assessment and reduction of
    risks from natural threats (eg, hantavirus, TB, influenza) to public
    health and security, including ethical questions of triage, treatment
    priorities, behavioral aspects of response, issues of quarantine, and
    potential collapse of health care systems during crises.
    Funding is Sought to Implement the Alliance
        Support in the amount of $2 million is sought to establish the
    infrastructure necessary to fully implement the RAHNS Alliance.
                                     ______

                   Prepared Statement of Sadis Matalon, Ph.D.
        The University of Alabama at Birmingham (UAB) and the Lovelace
    Respiratory Research Institute (LRRI) have joined forces in developing
    a Center for Acute Lung Injury. The Center will draw upon a
    complementary set of research and clinical capabilities at each
    institution that are relevant to the prevention, diagnosis and
    treatment of acute lung injury, including Acute Respiratory Distress
    Syndrome (ARDS). UAB and LRRI propose that the Department of Defense
    fund the Center to undertake an integrated set of seven specific lung
    injury research projects. The Center will have collaborative teams work
    on these projects. They will draw upon the LRRI's strengths in
    inhalation toxicology and in handling a variety of pathological agents
    and substances and upon UAB's well-known capabilities in studying the
    cellular and molecular mechanisms of acute lung injury and its active
    clinical programs treating patients with ARDS and other acute lung
    injuries.
    What is Acute Respiratory Distress Syndrome (ARDS)
        A number of pathological conditions including extensive skin burns,
    blood loss, trauma, sepsis, smoke inhalation, aspiration of abdominal
    contents, or reperfusion of ischemic tissues (such as transplanted
    livers) often result in a clinical condition referred to as Acute
    Respiratory Distress Syndrome (ARDS), characterized by accumulation of
    protein-rich fluid in the alveolar space resulting in respiratory
    insufficiency, tissue hypoxemia and multi-organ failure. The incidence
    of ARDS in the civilian population of the United States is estimated at
    150,000 cases per year in adults alone.
        Currently there is no treatment for ARDS. The main objective of
    clinical management is the maintenance of adequate arterial and tissue
    oxygenation, by ventilating patients with positive pressure ventilation
    and high oxygen concentrations, and treatment of the precipitating
    disorder. This type of supportive treatment is not always effective and
    may be associated with a variety of side effects including permanent
    injury to the lung. Regardless of its etiology, ARDS has an associated
    mortality of 30-60 percent in different centers. To put this in
    perspective, conservative estimates of annual mortality of ARDS are
    estimated to be around 60,000, which exceeds deaths from breast cancer
    (about 45,000) or AIDS (about 50,000). For this reason, the Lung
    Division of the National Institutes of Health has dedicated significant
    resources to basic and clinical research in this area. It was
    gratifying and exciting to hear the report of the NIH network,
    presented recently during the annual meeting of the American Lung
    Association, that a new way of ventilating patients with ARDS reduced
    mortality in some centers from 40 to 30 percent.
    Why is ARDS important to the military?
        Dr. Thomas Petty of the University of Colorado first described ARDS
    in 1967. At that time it was observed that those soldiers suffering
    severe systemic wounds developed severe pulmonary edema and respiratory
    failure some time later. This condition was referred to as Shock Lung
    or Da Nang Lung and was identical to ARDS. More than 90 percent of
    combat casualties who died after evacuation from the field, had
    histological evidence of ARDS; those surviving for more than five days
    had a high incidence of pneumonia and alveolar hyaline membranes, well
    known sequelae of ARDS.
        Training exercises or actual battlefield situations can involve
    potential exposure of troops to smokes and obscurants, respirable
    aerosols that will deposit in the lung. Detonations of military weapons
    produce shock waves that injure the lungs. Confined spaces, such as on
    nuclear submarines, holds of aircraft carriers, and tank interiors
    provide the potential for exposures to noxious substances where
    increased ventilation may be difficult to achieve. In actual
    battlefield operations, exposure to chemical and biological warfare
    agents all pose a threat to the pulmonary system if inhaled. All of
    these agents may damage the linings of the lungs and allow fluid to
    enter the air spaces resulting in ARDS.
        More effective anticipation, prevention, diagnosis, and treatment
    of acute lung injury will enhance the effectiveness of Department of
    Defense programs at all levels, from battlefield protection of troops
    from chemical and biological warfare agents or blast damage, to routine
    protection of service personnel from toxic chemicals during peacetime
    duties. With emerging threats from weapons of mass destruction, state
    of the art information from the Center for Acute Lung Injury will be of
    interest to many DOD organizations and could have critical significance
    for U.S. tactical and strategic postures.
        Some of the major DOD stakeholders with concerns for acute lung
    injury include the Office of Naval Research (ONR) with broad
    responsibilities for improving technology to protect personnel, the
    U.S. Army Medical Research Institute of Infectious Disease (USAMRIID)
    with lead responsibilities for research to advance the medical
    prevention and treatment of biological diseases and biological warfare
    casualties, the U.S. Army Medical Research Institute for Chemical
    Defense (USAMRICD) which is the nation's lead laboratory for research
    to advance the medical prevention and treatment of chemical warfare
    casualties, the Defense Threat Reduction Agency (DTRA) which is
    dedicated to reducing the threat to the United States and its allies
    from nuclear, chemical, biological, conventional, and special weapons,
    the Air Force Nuclear Weapons and Counterproliferation Agency (NWCA)
    with responsibility for ensuring an effective deterrence posture for
    weapons of mass destruction, and the Defense Advanced Research Program
    Agency (DARPA) which is DOD's central research and development
    organization for pursuing high risk/high payoff research and
    technology. In addition, improved knowledge of the opportunities and
    limitations for preventing and treating acute lung injury will be of
    interest to many special purpose organizations such as the Marine Corps
    Chemical and Biological Incident Response Force (CBIRF), a self-
    contained, task-oriented unit with the ability to detect hazardous
    materials, perform decontamination, and offer medical treatment and
    security.
    Roles of the Collaborating Institutions
        Both LRRI and UAB have a solid track record of performing high
    quality research for DOD. In addition, both institutions have clinical
    research centers for clinical trials and extensive contacts and
    collaborations with biotechnology and pharmaceutical companies aimed at
    designing and testing new therapeutic agents. The combination of these
    two outstanding groups form a state-of-the-art team for addressing the
    problems of the DOD related to acute lung injury. It is the specific
    intention of the two collaborating organizations that the Center for
    Acute Lung Injury would be a much-needed first-line source of
    information and assistance for DOD when a problem regarding inhalation
    toxicology and acute lung injury arises.
        The Lovelace Respiratory Research Institute.--LRRI is recognized
    world-wide for its inhalation toxicology research, for its use of
    laboratory research to determine human health risks from inhaled
    materials, and for the federally-owned privatized inhalation laboratory
    it operates as a national resource. This unique laboratory is fully
    equipped to handle highly toxic agents, such as strategic chemical,
    biological and radiological agents, and has a long history of doing so
    safely. LRRI aerosol scientists are also known for their ability to
    monitor and characterize atmospheres under field conditions, and to
    reproduce those atmospheres under controlled laboratory conditions.
    LRRI excels in conducting laboratory studies of human lung health risks
    and therapies for lung disease. The Institute is currently working on
    new therapies that show promise for inducing the restoration of damaged
    lung tissue, a goal that the clinical and research communities have
    long thought unreachable.
        The University of Alabama at Birmingham.--UAB has, under the
    outstanding leadership of Dr. Sadis Matalon, established a world-renown
    laboratory studying the cellular and molecular mechanism of acute lung
    injury, and in particular, the mechanism of the development of ARDS.
    During the past 6 years, scientists and clinicians at UAB have
    conducted several key biochemical, molecular biology and physiological
    studies advancing our understanding of the basic mechanisms by which
    reactive oxygen species damage the lungs and identifying the
    pathological and physiological consequences and prognosis of this
    injury.
        Among the special strengths that UAB brings to this alliance are:
        Major Medical Center with a University Hospital. In the last two
    years more than 250 ARDS patients per year were treated in the Medical
    and Surgical Intensive Care Units. There is close collaboration at
    every level between clinicians and scientists with ample opportunity
    for clinical research.
        Significant expertise in lung research.
        Outstanding faculty funded both by NIH and the Department of
    Defense to perform basic research in Acute Lung Injury. For example,
    during the last six years, Dr. Sadis Matalon and his collaborators have
    been funded by the Office of Naval Research to identify new strategies
    for the effective enhancement of antioxidant defenses in both the lungs
    and systemic organs, thus limiting the catastrophic consequences of
    various chemical warfare agents, systemic sepsis, severe trauma,
    secondary to battlefield wounds, and various inflammatory agents in
    both combatants and civilian personnel. This research effort has been
    very successful resulting in over fifty publications in peer-reviewed
    journals. In addition, Dr. Matalon organized an international meeting
    on ARDS, sponsored by NATO and has been collaborating with Dr. J.
    Anthony Thompson, Associate Professor of Surgery and Director of
    Surgical Research at UAB, to develop novel mechanisms for antioxidant
    protein and gene delivery to the lung and systemic organs which will
    bolster antioxidant defenses and reduce the morbidity and mortality of
    ARDS. In addition UAB has a number of faculty members funded by DOD
    whose research can be integrated into this project.
    The Center's Research Strategy
        During fiscal years 1999 and 2000 NIH, allocated about $20,000,000
    per year for research related to ARDS. However, additional research
    investment is needed in projects that are responsive to specific
    thematic needs of the Department of Defense (i.e identify how pathogens
    may damage the lungs and develop appropriate countermeasures; extending
    the ``golden hour'' following extensive trauma and injury).
        The two partner institutions have identified and prioritized a set
    of interrelated key issues that target current knowledge barriers, are
    amenable to research by their coordinated efforts in a constrained time
    frame, and have high potential for pay-off. Through the Center, this
    team will conduct integrated research specifically targeting lung
    injury, repair, and treatment issues pertaining to DOD problems. The
    research will include basic studies on induction and repair of acute
    lung injury, applied inhalation toxicity studies to address specific
    DOD problems, and atmosphere monitoring and characterization to meet
    DOD needs. Basic research will be conducted to determine the key
    defense mechanisms of the lung with emphasis on enhancing the defenses
    that kill pathogens, and studies to assess the ability of drugs
    (retinoids and growth factors) to promote wound healing and tissue
    repair.
        This carefully-targeted body of research will begin with the
    following seven projects supported by core activities at both
    institutions. A key feature of the work is that both LRRI and UAB will
    be represented among the chief investigators of each project.
      --Mechanisms of Pathogen Killing by Normal and Injured Lungs
      --Mechanisms and Prevention of Acute Lung Injury Following Systemic
            Trauma
      --Role of Oxidant Stress and FGF-1 During Acute Lung Injury
      --Role of Saudi Arabian Sand and Pyridostigmine in Gulf War Syndrome
      --Influence of Nicotine on Lung Inflammation from Acute Sulfur
            Mustard Vapor and Pneumococci
      --Toxicity of Inhaled DI-t-Butyl-Nitrophenol
      --Ability of Retinoids to Promote Tissue Repair after Acute Lung
            Injury
    Funding is Sought to Conduct This Important Research
        A total of $6 million ($3 million each to LRRI and UAB) is sought
    to provide salaries, purchase equipment, provide core support services,
    facilitate travel for collaborating scientists between the two
    institutions as necessary to conduct the studies described above.

        Senator Stevens. Is it not included in the budget?
        Dr. Mauderly. There is a small amount of work included in
    the budget that is going in this direction. This particular
    program is not included in the budget this time.
        Senator Stevens. Did you ask DOD to put it in?
        Dr. Mauderly. Yes, we did.
        Senator Stevens. All right. We will look into it. I am not
    familiar with this, but I will look into it.
        Thank you very much.
        Dr. Mauderly. Thank you.
        Senator Stevens. Dr. Peter Lennie.
        Good afternoon.
    STATEMENT OF PETER LENNIE, Ph.D., DEAN FOR SCIENCE,
                PROFESSOR OF NEURAL SCIENCE, NEW YORK
                UNIVERSITY
        Dr. Lennie. Thank you, Mr. Chairman, for the opportunity to
    appear before you today.
        I am speaking on behalf of New York University (NYU), as
    its Dean for Science. I appreciate being able to discuss a
    project that will enhance national security by advancing the
    scientific understanding of the brain, its development and
    activity. I would like to thank the committee for its vision in
    recognizing that university research is a cornerstone of
    national security efforts and for its willingness to support
    basic research that brings about discoveries with important
    military and civilian applications.
        In particular, we subscribe to the goals described in the
    conference report accompanying the appropriations for Defense
    for fiscal year 1999. That report directed that the Department
    add to its list of research priorities the area of
    computational neuroscience and vision studies for learning and
    human/machine interaction. This is an area of exceptional
    significance and indeed one in which NYU has great strength.
    And I thank the committee for endorsing the importance of this
    work.
        I would like to say a little about investments in research
    that will substantially increase what we know about the neural
    mechanisms that underlie several aspects of human behavior that
    are of great importance in both military and civilian contexts.
    At NYU, we are promoting such research by establishing a Center
    for Cognition, Learning, Emotion, and Memory Studies.
    Researchers will examine neural mechanisms of learning and
    memory. They will probe fear and its impact on learning and
    performance. And they will study perception and information
    processing in the brain.
        By understanding better how the human brain does these
    things, we will be better able to design machines that can do
    similar things. The initiative directly addresses defense
    research priorities, including the computational modeling and
    measurement of brain function.
        I would like to offer you some examples. First, researchers
    will investigate intelligence and information processing in
    neural systems, and also in machines. These studies have far-
    reaching implications for understanding the human capacity to
    perceive visual objects and for developing computer
    technologies to process, monitor and display large bodies of
    data.
        Second, researchers will explore the cognitive processes
    that affect attention and memory and the strategies that can
    optimize these components of learning. For example, computer-
    aided or intelligent tutoring, and learning technologies that
    can improve motivation and increase retention.
        Third, the studies have implications for improving
    performance under the high-stress conditions that characterize
    military operations. Researchers in the neural biology of fear
    are examining the brain systems that malfunction in panic
    attacks and stress disorders. These studies will help us
    understand the source of fear and other emotions, how they are
    triggered, how they can undermine performance, and, ultimately,
    whether the unconscious neural circuity of emotions can be
    altered or inhibited.
        Many of these studies have a common focus on the changes in
    the nervous system that occur when we remember new things or
    learn new skills. Understanding neural plasticity is essential
    to understanding and improving the flexibility of human
    behavior. If we understand this flexibility and harness it, we
    can work better and learn better, even as we age.

                               prepared statement

        Mr. Chairman, this concludes my testimony. I thank you for
    your support of the research and for the opportunity to appear
    before you today.
        [The statement follows:]
                 Prepared Statement of Dr. Peter Lennie, Ph.D.
        Thank you, Mr. Chairman. My name is Peter Lennie, and I am speaking
    on behalf of New York University as its Dean for Science. I appreciate
    this opportunity to appear before the Subcommittee today to discuss a
    project of scientific research which is not only an important priority
    for New York University, but which we believe will advance national
    security interests through enhanced scientific understanding of brain
    function and brain development.
        Our project addresses the programmatic interests of this
    subcommittee in enlisting fundamental, university-based scientific
    research to catalyze technological innovation with applications for
    defense purposes as well as industrial, medical, and educational
    sectors. This initiative is congruent with Department of Defense
    research priorities and application areas, including its interest in
    sophisticated techniques that involve measurement of brain function and
    computational modeling. Our project will contribute to the training and
    performance of military personnel and the development of new
    technologies by substantially expanding what we know about: the neural
    mechanisms of learning and memory; the perception, acquisition and
    storage of information in the nervous system; the neurobiology of fear
    and its impact on learning and performance; and the implications of
    neural vision systems for their machine analog, computer vision.
        We strongly support the goals presented in the Conference Report
    accompanying the Appropriations for the Department of Defense for
    fiscal year 1999. That report directed the department to add a multi-
    disciplinary University Research Initiative topic area on
    ``computational neuroscience and vision studies for learning and human/
    machine interaction.'' We thank the Subcommittee for taking the time to
    consider and give its support to the important research being conducted
    in this area--an area of great strength at New York University. We at
    NYU firmly believe that in the coming decades, a federal investment in
    mind and brain studies will repay itself many times over.
        In line with the Subcommittee's interests, New York University is
    undertaking to establish a Center for Cognition, Learning, Emotion, and
    Memory Studies. This Center will draw on the University's strengths in
    the fields of neural science, computer science, biology, chemistry,
    psychology, and linguistics to push the frontiers of our understanding
    of how the brain develops, functions, and malfunctions. In addition, as
    a major training institute, the Center will help prepare the next
    generation of interdisciplinary brain scientists.
        A major thrust of the work to be carried out in the Center is
    research on the learning process, including the underlying cognitive
    processes and architecture that affect attention, memory, information
    processing, skills acquisition, and retention, as well as their
    implications for strategies that can rationalize and optimize training
    and learning--for example, computer-aided or ``intelligent'' tutoring--
    and ultimately, human task performance. Of special interest to those
    studying learning and memory systems is neural plasticity, which is the
    nature of the underlying change in the nervous system. At NYU, ongoing
    investigations into the neurobiology of fear are especially revealing
    in this regard, and are helping to explain the basis and ultimately the
    impact of the neural emotional memory system for functional and
    dysfunctional performance caused by emotional disorders like phobias,
    panic attacks, and anxiety. Central to the neural science enterprise at
    NYU are fundamental studies in neural systems, particularly vision--
    including studies of visual processing pathways, perception, and
    information processing; and audition--including studies of auditory
    regions of the nervous system.
        These various studies of mind and brain employ a full range of
    techniques; they coordinate anatomical, neurophysiological,
    biochemical, and behavioral experiments; and they are conducted in
    various model systems up through humans, and computer modeling and
    simulations. Additional studies examine biological systems, e.g., the
    neural bases of vision perception and information processing, to
    engineer their computer analogs in data imaging, processing, and
    retrieval.
        New York University is seeking $10.5 million over five years to
    support and expand the research programs of existing faculty, attract
    additional faculty and trainees, and provide the technical resources
    and personnel support that result in a world class scientific
    enterprise. Individual researchers in the science programs at NYU
    compete very effectively for investigational support through
    traditional routes. However, these traditional funding sources do not
    address the specific need for establishment of an integrated area of
    scientific study that transcends numerous disciplines and application
    areas. Nor do they provide the extensive funding necessary for faculty
    and student support, and personnel and technical resources. Support
    from this Subcommittee would enable us to meet these needs, and to
    fully develop the potential New York University has to develop a new
    understanding of the brain, and new ways of using that knowledge for
    improving the national welfare.
    Research Applications for National Security
        The fundamental biomedical and behavioral research conducted in the
    Center for Cognition, Learning, Emotion, and Memory Studies will have
    important applications for the development of military technology, the
    training and preparation of personnel, military performance.
        Technology Development.--The fundamental research being conducted
    at NYU in learning, intelligence, and information processing in
    biological systems can contribute significant new understanding of
    computer and communication technologies for the future. Research at the
    interface between computer science, vision science, and learning
    research builds on the recognition first, that vision impacts all areas
    of cognition, and second, that computer vision studies the processing
    of images and thus, in its own way, addresses cognitive issues. Vision
    psychologists and computer vision researchers are working together to
    investigate the neural bases of object and pattern recognition, depth
    perception, and motion perception, and their computer analogs in data
    imaging, processing, and retrieval. These kinds of fundamental studies
    have far reaching implications, on the one hand, for developing
    sophisticated computer technologies to process, monitor and present the
    enormous bodies of data related to military operations, personnel
    deployment, etc. and on the other hand, for understanding and improving
    the human capacity to perceive and respond to visual cues.
        Training and Preparation of Personnel.--Understanding how the brain
    functions and how we learn is crucial to training a diverse range of
    individuals for a diverse range of skills, one of the primary tasks of
    the Armed Services. The more we know about how people acquire, process,
    and retain information, the better training programs can be designed
    and targeted for specific skills, selected groups of trainees, and
    various settings, whether in the classroom, simulated environments, or
    in the field. Rationalizing the training process is especially
    important in military training, where the acceptable margin of error is
    slight and where personnel need to be prepared to make informed
    decisions with far-reaching outcomes. CLEM research can clarify how
    adult learners use different learning styles, how training personnel
    can accommodate those styles, and how educational technology and
    simulated learning environments can be harnessed to improve motivation
    and increase retention and memory. At NYU, one locus for the
    development of practical applications of neurobiological and behavioral
    research is the Center for Digital Multimedia (a New York State Center
    for Advanced Technology), which brings together teaching experts,
    laboratory scientists, and software designers to explore how
    interactive multimedia technologies enhance training, and to develop
    prototype teaching models and facilitate computer-human communication
    through graphics, speech and vision. Speaking more generally, CLEM
    research will help address the persisting challenge which the nation
    faces in training new recruits to the work force and retraining workers
    in new technologies. Basic scientific research into neural and
    psychological mechanisms will help rationalize job training programs
    and increase their effectiveness.
        Performance of Personnel.--Research into the interaction of
    cognition, emotion, and memory can be critical in strengthening
    preparation for performance under the high-stress conditions that
    characterize military operations. At NYU, pioneering research into the
    neurobiology of fear is generating important information about the
    brain systems that malfunction in, for example, anxiety, phobias, panic
    attacks, and post-traumatic stress disorders. The brain's fear system
    is related to many human emotional disorders, and these malfunctions in
    emotional systems commonly characterize serious psychiatric disorders.
    Research into the neural mechanisms of fear will help us understand the
    source of emotions, how they are triggered by circumstance, why these
    emotional conditions are so hard to control, and, of greatest practical
    importance, how they can incapacitate, undermine attentiveness, and
    weaken the memory of learned skills and routines. Ultimately, our
    research will generate clues for prevention and treatment of emotional
    disorders, focusing perhaps on the ways in which unconscious neural
    circuitry can, in effect, be altered or inhibited.
        While research at NYU will have these direct applications for
    national security, there will be important spin-offs in other social
    areas, including biomedical therapeutics and diagnostics, early
    childhood learning and intervention, and job training.
    Feasibility: Institutional Strengths
        New York University is well positioned to create and operate a
    major multidisciplinary research and training center. There is
    commitment to the CLEM project at the highest level of the University
    administration, established frameworks for interdisciplinary and
    interschool collaboration, strengths in neurobiological, psychological
    and computational sciences, and international standing in the
    scientific community. The nation's largest private university, with 13
    schools and over 49,000 students, NYU is a leading center of
    scholarship, teaching and research. It is one of 29 private
    institutions constituting the distinguished Association of American
    Universities, and is consistently among the top U.S. universities in
    funds received from foundations and federal sources.
        As the core of a decade-long multi-million dollar science
    development plan, NYU created a premier neuroscience and cognitive
    psychology program that encompasses a pre-eminent faculty and generates
    substantial external funding from federal and state agencies as well as
    the private sector. These investigations have attracted millions of
    federal dollars from the NIH, the NSF and the EPA. In addition, NYU has
    received major funding from the most prestigious private foundations
    supporting the sciences. This includes the Howard Hughes Medical
    Institute (HHMI)--the foundation most active in support of the life
    sciences. (NYU is now home to no fewer than six HHMI Investigators,
    with corresponding funding from the Institute.) The HHMI also has
    awarded NYU two major grants, each exceeding $1 million, from its
    Undergraduate Biological Science Initiative Program, as well as a major
    facility improvement grant. The W.M. Keck Foundation also awarded two
    grants, each exceeding $1 million, for facility and program development
    in the neural and cognitive sciences; one grant funded the renovation
    of a major new laboratory in emotional memory studies. The Alfred M.
    Sloan Foundation similarly awarded two major grants totaling $2 million
    to found the Sloan Center for Theoretical Visual Neuroscience--one of
    five institutions chosen to implement the Foundation's national
    initiative in theoretical neurobiology. Neural science faculty have, as
    individuals, won prestigious awards, including HHMI Investigator, NSF
    Presidential Faculty Fellow, NIH Merit Awardee, McKnight Foundation
    Scholar in Neuroscience, and MacArthur ``Genius'' Fellow.
        Neural science at NYU is particularly well known for research in
    the neural basis of visual processing and perception, theoretical/
    computational neurobiology, the linkage of sensation and perception
    with action, emotional memory, plasticity in the visual and auditory
    system, molecular and developmental neurobiology, and cognitive
    neuroscience. With these strengths, NYU is particularly well placed to
    create a distinctive center that will capitalize on expertise in
    physiology, neuroanatomy, and behavioral studies and build on active
    studies that range from the molecular foundations of development and
    learning to the mental coding and representations of memory.
        While other academic institutions are also conducting brain
    studies, NYU has special strengths in important emerging research
    directions that are central to the Defense mission. To elaborate,
    vision studies at NYU follow an integrated systems approach that has
    been shown to be highly successful approach in unraveling this complex
    system, and that has established NYU as an internationally known
    center. The interest in vision, a key input to learning, is associated
    with focused studies on the learning process, particularly, the
    interaction with memory and behavior.
        NYU vision scientists are studying form, color and depth
    perception; visual identification; the varieties of visual memory; and
    the relationship of vision and perception to decision and action.
    Studies ask: How does vision develop? How does the brain encode and
    analyze visual scenes? What are the neural mechanisms that lead to the
    visual perception of objects and patterns? How do we perceive spaces,
    depth, and color? How does the brain move from vision and perception to
    planning and action?
        NYU is also at the frontier of studies in the neuroanatomy and
    physiology of emotion, a new area of exploration that complements
    studies of how perceptions, thoughts, and memories emerge from brain
    processes. Work recently conducted at NYU and elsewhere has established
    the biological basis of emotions and the patterns by which they are
    expressed within the neural circuits of the brain. The new studies have
    found that there are multiple systems in the brain, each having evolved
    for different functional purposes, and each producing different
    emotions. Work being conducted at NYU also suggests that the neural
    circuits supporting the expression of emotions were highly conserved
    through evolution. They persist, unconsciously, in our daily behavior,
    and shape our reactions to events well before we rationally and
    consciously process the event. Scientists at NYU are using behavioral
    testing, physiological recording of neural activity, and
    neuroanatomical tract tracing to ask, what are the neuroanatomical
    pathways for the formation of emotions and emotional memories? How do
    we learn and remember emotions? These studies have crucial applications
    for personnel training, job performance and mental health, and address
    such questions as: How can emotions, such as fear, facilitate or
    undermine the training process? Do emotionally stressful situations
    affect our ability to remember facts, retrieve information, perceive
    events and objects? How can we better diagnose and treat emotional
    disorders which undermine performance? How can we enhance attentiveness
    and memory in stressful situations?
        NYU's special strengths also lie in the established infrastructures
    that exist within NYU to promote multidisciplinary brain research that
    incorporates experimental, theoretical, and computational components.
    As an example, the Sloan Center for Theoretical Visual Neuroscience
    fosters joint research that harnesses the tremendous recent advances in
    computational speed, size and memory to effectively revolutionize the
    power of quantitative analysis to address fundamental problems in
    neurobiological systems. The Center houses faculty with joint
    appointments in neural science (Arts and Science) and mathematics
    (Courant Institute of Mathematical Sciences), supports neural science
    trainees with backgrounds in the physical and mathematical sciences,
    and fosters a range of multidisciplinary projects which include
    analysis of neural and network dynamics of the visual cortex; the
    nonlinear dynamics of the thalamus and other neural structures;
    analysis of the visual perception of occluding objects; brain imaging
    and adult brain plasticity.
        CLEM will bring the University's many strengths in these areas more
    fully to bear on the challenges and opportunities that
    multidisciplinary studies present. The Center will provide an
    organizational identity, core resources, and common focus for the
    university's efforts. For students, it will provide an educational
    forum to apply knowledge gained in one discipline to problems in other
    disciplines. For researchers, the Center's synergistic linkages between
    basic science departments, mathematical and computational units, and
    biomedical departments will encourage intellectual cross fertilization
    and will permit the consolidation of individual efforts in
    multidisciplinary but conceptually coordinated efforts. For colleagues
    in the fields of technology, education, and medicine, the Center will
    facilitate connections with life scientists and enhance the translation
    of research knowledge into commercial and educational applications and
    health care.
        CLEM will be an interdisciplinary unit linking faculty, students,
    programs and resources from several schools of New York University.
    These are the Faculty of Arts and Science, the Courant Institute,
    School of Education, and School of Medicine, including its Skirball
    Institute of Biomolecular Medicine and the associated Nathan Kline
    Institute Center for Advanced Brain Imaging. To be housed at the
    University's Washington Square campus within the Faculty of Arts and
    Science, CLEM will coordinate laboratory research and training in
    fundamental neurobiological, psychological, and computational studies
    of the nervous system. The enhanced research and training that will be
    possible will attract public and private funding above and beyond the
    substantial funds, honors and recognition already awarded to the
    University's researchers, and will support the center's continued
    growth and development.
        Mr. Chairman, this concludes my testimony. I thank you for the
    opportunity to testify before you today.

        Senator Stevens. Are you participating in the dedicated
    brain activities?
        Dr. Lennie. Absolutely, sir.
        Senator Stevens. I see you have received some substantial
    grants from the Environmental Protection Agency (EPA).
        Dr. Lennie. That is right.
        Senator Stevens. Have you applied to NIH?
        Dr. Lennie. Some of the work, and different components of
    this work, unrelated to the projects that I am discussing now,
    are supported by NIH, yes.
        Senator Stevens. Why should this be funded from the Defense
    Department?
        Dr. Lennie. Because many of the initiatives here are of
    direct relevance, I think, to the military's imperatives, sir.
        Senator Stevens. That same relevance applies to every other
    human being, does it not? What is the unique thing for the
    Department of Defense?
        Dr. Lennie. For example, automatic target recognition or
    coping with post-traumatic stress disorder. Many of these
    problems are particularly, if not peculiarly, distinctively
    problems for the military.
        Senator Stevens. Well, I would like to have you give us a
    little bit more information about that. I was in a civilian
    aircraft crash. I had a brain injury. Why should anything like
    that be just solely Defense's responsibility?
        Dr. Lennie. I did not mean to imply it was solely, but that
    many of the high incidence of some of these conditions is
    distinctively a military problem.
        Senator Stevens. Would you mind following that up a little
    bit? I am interested in the brain. Along with David Mahoney, I
    have participated in trying to keep up the funding. But I think
    we have put a lot of money at NIH, and there is a lot of money
    at EPA. I am not sure it has to come from DOD. But if you can
    give me some further information as to why it should, I would
    appreciate it.
        Dr. Lennie. Well, the work that comes to mind immediately
    would be the work on the management of emotional disorders
    following trauma and the implications that particularly
    stressful episodes have on people's future performance.
        Senator Stevens. But, again, I think that happens to non-
    military just as much as military.
        Dr. Lennie. Certainly, to an extent.
        Senator Stevens. Give me the paper, will you. If you will,
    I will follow up on it. But just tell me why this should be a
    Defense function. OK?
        Dr. Lennie. I will endeavor to do that, sir.
        Senator Stevens. Thank you very much.
        Dr. Lennie. Thank you.
        Senator Stevens. Dr. Feldman.
    STATEMENT OF LAWRENCE A. FELDMAN, ACTING EXECUTIVE VICE
                PRESIDENT, OFFICE OF THE PRESIDENT,
                UNIVERSITY OF MEDICINE AND DENTISTRY OF NEW
                JERSEY
        Dr. Feldman. Mr. Chairman, in view of your very busy and
    extended schedule, I will thank you for the opportunity to
    appear before you.
        My name is Dr. Lawrence Feldman, and I am the acting Vice
    President of the University of Medicine and Dentistry (UMD) of
    New Jersey, the largest public health sciences university in
    the Nation. We are a statewide system, located on five
    campuses, with three medical schools and schools of dentistry,
    nursing, allied health, public health, and graduate biomedical
    sciences.
        You have our written testimony before you, so I will be
    brief in my comments. I thank you for the opportunity to bring
    to your attention a priority project of UMDNJ, which is
    consistent with the mission of this committee. And that is to
    counter the threat of chemical and biological terrorism in
    military and civilian populations. In today's modern society,
    the possibility of employment of terrorist weapons of mass
    destruction has already become a reality, such as the sarin
    nerve gas attack in the subways of Tokyo.
        New Jersey is the Nation's most densely populated State.
    Therefore, we have particular concern about being the target of
    biological and chemical terrorism. As a central transportation
    hub in the Northeast, we could be a prime target for such
    attacks. State and local governments and health organizations
    need information upon which to develop and coordinate response
    plans to bioterrorism. We also need programs to educate
    planners and response teams on the public health aspects of
    these threats.
        Such a plan requires a broad base of scientific and
    educational expertise in order to devise approaches for the
    early detection, treatment and control of biological and
    chemical weapons of terror. There are three disciplines
    required for a comprehensive approach to meeting the challenges
    posed by bioterrorism: expertise in infectious diseases,
    expertise in the chemical and physical agents of concern, and
    the ability to translate this expertise into effective programs
    for emergency responders.
        UMD has the expertise to respond to the threat of
    biological and chemical terrorism. Our Environmental and
    Occupational Health Sciences Institute is one of the foremost
    university-based centers of research and education in
    environmental and occupational health. Our faculty are
    recognized internationally for a broad base of activities,
    including clean up of weapon sites, gulf war veterans studies,
    and Hazmat training. We also train health care workers in
    emergency response, diagnosis, and treatment of exposure to
    chemicals.
        Many of our faculty are advisers to the United States
    Government, and have served on committees such as the program
    and technical review of U.S. Chemical and Biological Defense
    Command, and the Committee on Toxicology, which responds to the
    Department of Defense concerning toxic substances. The interim
    Dean of our School of Public Health is also the President of
    the American Public Health Association. Among her programs is
    the Center for Education and Training, which provides training
    concerning chemical agents to more than 160,000 police,
    firefighters and municipal and State employees, physicians,
    nurses, and industrial hygienists.
        UMDNJ is also home to the International Center for Public
    Health, a strategic initiative that is establishing a world-
    class infectious disease research and treatment complex at
    University Heights Science Park, in Newark. We would make four
    recommendations for your consideration:
        One, provide funding for a major program aimed at improving
    recognition of the effects of chemical and biological terrorism
    weapons; two, unify the approaches to educating emergency
    responders; three, provide multi-agency funding to force the
    research to identify, understand and learn how to neutralize
    biological and chemical weapons; and, four, provide funding for
    research and design specifically, and understanding the health
    effects of these agents on large populations so that early
    diagnosis and treatment can become more likely.
        We respectfully request that you identify with a high
    priority, funds within the Defense health science accounts to
    support a national basic and applied research program designed
    to counter the threat of bioterrorist attacks. As a
    representative of UMDNJ and as a professor of microbiology and
    molecular genetics, I believe that the threat of such attacks
    will increase in the future.

                               prepared statement

        Senator, as I am certain you are aware of, this represents
    a major national concern. I again thank you for the opportunity
    to appear before you, and thank you for your support of
    research in general.
        [The statement follows:]
                 Prepared Statement of Dr. Lawrence A. Feldman
        The following is the testimony of the University of Medicine and
    Dentistry of New Jersey (UMDNJ), the largest public health sciences
    university in the nation. The UMDNJ statewide system is located on five
    academic campuses and consists of 3 medical schools, and schools of
    dentistry, nursing, health related professions, public health and
    graduate biomedical sciences. UMDNJ also comprises a University-owned
    acute care hospital, three core teaching hospitals, an integrated
    behavioral health care delivery system, a statewide system for managed
    care and affiliations with more than 100 health care and educational
    institutions statewide. No other institution in the nation possesses
    the resources which match our scope in higher education, health care
    delivery, research and community service initiatives with state,
    federal and local entities.
        UMDNJ is home to the International Center for Public Health, a
    strategic initiative that will create a world-class infectious disease
    research and treatment complex at University Heights Science Park in
    Newark, New Jersey, the New Jersey Medical School National Tuberculosis
    Center at UMDNJ, one of only three model Tuberculosis Prevention and
    Control Centers in the United States funded by the Center for Disease
    Control and Prevention, and the Environmental and Occupational Health
    Sciences Institute (EOHSI), the largest environmental institute in the
    world designated a National Institute of Environmental Health Sciences
    ((NIEHS)-funded Center of Excellence. UMDNJ's core and affiliated
    hospitals also operate the New Jersey's system of Level I and Level II
    Trauma Centers.
        No other institution in the nation possesses resources which match
    our scope in higher education, health care delivery, research and
    community service initiatives with state, federal and local entities.
        We appreciate this opportunity to bring to your attention a
    priority project of UMDNJ that is consistent with the mission of this
    committee, that is to counter the threat of chemical and biological
    terrorism.
        In our complex world of instant communication and ease of global
    transportation, disaffected individuals or political groups have access
    to highly destructive weapons of terror. With our open society, the
    United States is particularly at risk to an individual with a grudge, a
    band of ideologically motivated fanatics, or to nations seeking
    revenge. The possibility of the employment of weapons of mass
    destruction on an innocent population has already become a reality with
    the Sarin nerve gas attack in the subways of Tokyo.
        As citizens of the nation's most densely populated state, we in New
    Jersey have a particular concern about being targets of biological and
    chemical terrorist activities. Our communities abut each other and our
    traffic patterns are statewide making us especially vulnerable to
    infectious disease. There are no obvious geographical boundaries to
    readily institute a quarantine. Our central location as a
    transportation hub for the populous Northeast also makes us a prime
    target.
        State and local governments and health organizations need reliable
    information upon which to develop and coordinate response plans for
    contingencies due to weapons of mass destruction. They need programs to
    educate planners and response teams on the public health aspects of
    these threats and how to recognize and respond to them. In addition,
    they need to understand both the short and long term implications for
    human and ecologic health. Such a plan requires a broad base of
    scientific and educational expertise which has an international scope
    in order to devise approaches for the early detection and treatment of
    biological and chemical weapons of terror.
        Terrorists have three types of weapons available to them. For the
    first, explosive devices, although increasingly deadly, we have
    developed responses and have become all too familiar with this form of
    terror and chaos. The other two types of terrorist weapons are
    relatively new and present particular challenges to our normal response
    processes. These are chemical weapons of terror, such as nerve gas, and
    biological weapons of terror, such as anthrax bacillis. Chemical and
    biological weapons differ dramatically from explosions in that for
    these newer threats early recognition and diagnosis is crucial for both
    those initially affected and for others who might yet be affected
    through spread of infection or contact with the chemical.
        Education of emergency responders to correctly identify these
    threats, whether they occur here or abroad, is crucial to minimize the
    impact of biological and chemical weapons, as well as to protecting the
    emergency responders themselves. Compounding our problems is the need
    for a better understanding of the effects of likely chemical and
    biological agents of terrorism, development of the means to prevent
    their spread, and to rapidly treat their victims.
        There are three distinct disciplines required for a comprehensive
    university-based approach to meeting the challenges posed by terrorism.
    These are expertise in infectious disease agents likely to be used;
    expertise in the chemical and physical agents of concern; and the
    ability to translate this expertise into effective training programs
    for emergency responders. UMDNJ has this expertise to be broadly
    responsive to the threat of biological and chemical terrorism.
        Our Environmental and Occupational Health Sciences Institute, a
    joint program of UMDNJ and Rutgers University, has established one of
    the foremost university-based centers of research and education in
    environmental and occupational health. The faculty are recognized
    internationally for a broad base of activities from human and ecologic
    health to clean up of weapons' sites, Gulf War veterans' studies, and
    HAZMAT training courses. We also train health care workers in emergency
    response, diagnosis and treatment of exposure to chemicals.
        Many of our faculty are advisors to the U.S. Government and have
    served on committees such as the Program and Technical Review of the
    U.S. Chemical and Biological Defense Command and the Committee on
    Toxicology, which responds to the Department of Defense concerning
    toxic substances.
        The nation's foremost program in education and training concerning
    chemical and physical threats is headed by a UMDNJ faculty member, Dr.
    Audrey Gotsch, who is currently President of the American Public Health
    Association. Among her programs is the Center for Education and
    Training which provides training concerning chemical and physical
    agents to more than 160,000 police, firefighters, municipal and state
    employees, as well as to physicians, nurses and industrial hygienists.
        Also, our researchers at the Child Health Institute at the UMDNJ-
    Robert Wood Johnson Medical School in New Brunswick, New Jersey are
    looking into the effects of radiation on children in utero and on their
    growth and long-term development. Children who survive bio-terrorist
    attacks live and carry forward the results of that attack in a
    different manner than exposed adults. The basic mechanisms of biology
    that operate to cause serious neurological injury can be counteracted
    or reversed if properly understood at the molecular and chemical level.
        We respectfully make four recommendations for this committee's
    consideration:
      --Provide funding for a major program aimed at improving the
            recognition of the effects of chemical and biological terrorism
            weapons by community emergency response elements.
      --Unify the approaches to educating emergency responders about
            chemical and biological terrorism.
      --Provide multi-agency funding to foster international research
            efforts to identify, understand the pathogenecity and learn how
            to neutralize agents being developed by terrorists intent on
            using biological and chemical agents and,
      --Provide funding for research designed specifically at understanding
            the health effects of chemical and biological agents on large
            populations so that early diagnosis and treatment becomes more
            likely.
        Because of its scientific expertise, UMDNJ is uniquely qualified to
    develop a program to educate state and municipal governments, emergency
    responders and health and hospital professionals on planning for the
    response to terrorism and training personnel to deal with threats of
    terrorism and how they affect public health. We are also ready to
    assist by providing scientific expertise appropriate to improve early
    detection of terrorist attacks and early treatment of its effects.
        UMDNJ also has international collaborative studies in infectious
    disease and health education and is uniquely positioned to study these
    problems and to provide solutions.
        We respectfully seek $1.5 million through the Department of Defense
    to expand our research, education and training programs in response to
    threats of chemical and biological terrorism.
        Thank you for the opportunity to appear before you today. This
    Subcommittee has demonstrated leadership in supporting nationally and
    internationally critically-needed research and development initiatives.
    Your support of the universities and research institutions in this
    country is especially recognized.

        Senator Stevens. We have a new task force on terrorism and
    its consequences. And I will turn your testimony over to them
    and ask them to contact you. I congratulate you on your
    concept. But they will give us advice not only in this
    subcommittee, but the full committee, of where to put money to
    help start the process of counteracting terrorists in our
    country. So I will put them in touch with you. We will get
    someone to contact you from that task force.
        Dr. Feldman. We will be happy to participate.
        Senator Stevens. Thank you very much.
        Our next witness is Mildred Brooke. Good afternoon.
    STATEMENT OF MILDRED BROOKE, VICE PRESIDENT OF
                OPERATIONS, J&E ASSOCIATES, INC.
        Ms. Brooke. Mr. Chairman, thank you for the opportunity to
    appear before you today. I am Mildred Brooke, Vice President of
    J&E Associates.
        You and members of your subcommittee have for years been
    aware of a troubling situation that ``60 Minutes'' made
    millions of Americans aware of earlier this year. Sadly, that
    fact is that our Nation's military families experience domestic
    violence at a rate far higher than their civilian counterparts.
    However, ``60 Minutes'' left its viewers with the distinct
    impression that combatting family violence is a low priority
    for DOD and that its programs for preventing and responding to
    family violence are ineffective.
        The purpose of my testimony today is twofold. First, I
    would like to provide a more balanced and accurate picture of
    DOD's efforts to reduce family violence by updating you on one
    program, the New Parent Support Program. Second, I am here to
    ask your assistance in keeping this vibrant, proven program
    alive and strong so that we can hasten the day when having a
    parent in the military does not increase a child's risk of
    being abused or neglected.
        My company, in partnership with DOD, operates a number of
    programs aimed at improving the quality of military family
    life. Thanks to this committee's longstanding support, the New
    Parent Support Program has proven to be a model program for
    preventing child abuse and neglect. The program is based on a
    practical model for preventing violence against children. The
    program targets expectant parents and families with children
    under the age of 6 years, and provides home visits, referrals
    to community resources, and a wide variety of life skill and
    parent education classes.
        J&E currently operates the New Parent Support Program for
    the Army service-wide, and provides staff to operate the
    program at five Navy installations. Regrettably, I must note
    that our Navy program reflects a 55 percent reduction in the
    number of installations served since I appeared before you last
    year.
        Within our program for the Army, we are conducting
    extensive research to learn more about the families we serve
    and the effectiveness of the New Parent Support Program. Upon
    voluntary entry into the program, we ask parents to complete a
    battery of questionnaires which measures factors such as
    marital satisfaction, child behavior, depression, family
    conflict, and parental stress. We reassess these families every
    6 months.
        What have we learned from this? First, we have found that
    parents entering the program have high levels of distress that
    far exceed the normal concerns and worries new parents
    typically have about child bearing. Among other findings we
    reported to the Army in our semiannual reports in October of
    1998 and then last month, are that 58 percent of the mothers
    and 39 percent of the fathers are clinically depressed.
        Nearly 15 percent of the families have children with severe
    emotional and/or behavioral problems. Mothers entering the
    program have significantly fewer social supports available to
    them than their civilian counterparts. Nearly 70 percent of the
    mothers and 75 percent of the fathers report clinically
    significant levels of marital dissatisfaction. Thirty-eight
    percent of the mothers and 25 percent of the fathers have
    personality traits, belief systems and attitudes toward
    parenting that are similar to those identified in studies of
    abusive parents.
        In summary, significant proportions of the parents are at
    high or moderate risk of abusing their children or committing
    acts of domestic violence. These findings show that the New
    Parent Support Program is exactly on target.
        Does the program help these parents? The research evidence
    strongly indicates that it does. Additionally, we consistently
    receive extremely positive evaluations of the program from
    installation commanders, senior enlisted leaders, as well as
    the parents.
        More importantly, the research results show that, following
    program interventions, there are major improvements in many
    areas of family functioning. Parenting questionnaires
    administered 6 months into the program show parents scoring
    significantly better on scales that measure factors including
    family problems, strengths and abuse risk factors.
        The implications of this research are there is a definite
    need among military families for new parent support services,
    and the program services we provide are working. In fiscal year
    1998, our staff provided home visitation services to over 4,000
    Army families. In the first 4 months of this fiscal year, we
    have delivered services to nearly 1,000 additional families,
    averaging 250 new families each month. This is the maximum
    level of services that can be delivered to Army families with
    the current staffing levels.
        For the funding levels that DOD has released to the Army
    and Navy this fiscal year, the programs are at maximum
    capacity. In some instances, staff have had to limit their
    outreach efforts so as not to create long waiting lists for
    services.
        Mr. Chairman, without DOD's release of the $8 million added
    by Congress for fiscal year 1999, I fear that both the Army and
    Navy will be forced to drastically reduce, if not terminate,
    the operations of this valuable and viable program. I am
    certain that the program will not extend to the additional
    installations as originally designed. Many installations and
    families will not be served.
        Mr. Chairman, this subcommittee has been a champion of the
    New Parent Support Program since its introduction in 1992. I
    request that you continue your commitment, give your fullest
    support to ensuring that the fiscal year 1999 funds that your
    subcommittee provided are immediately released by DOD, and that
    funding continue for the program in fiscal year 2000 at a level
    of $20 million.

                               prepared statement

        I thank you for your support and look forward to working
    with you and the subcommittee. Thank you. And I would be happy
    to answer any questions.
        [The statement follows:]
                      Prepared Statement of Mildred Brooke
        On January 17, 1999, the news program ``Sixty Minutes'' made
    millions of Americans aware of the fact that our nation's military
    families experience domestic violence at a rate far higher than their
    civilian counterparts. In addition to pointing out the pervasiveness of
    this problem, ``Sixty Minutes'' left its viewers with the distinct
    impression that combating family violence is a low priority for the
    Department of Defense and that its programs for preventing and
    responding to family violence are ineffective.
        The purpose of my testimony today is twofold. First, I would like
    to provide a more balanced, accurate picture of the DOD's efforts to
    reduce family violence by telling you about one program that has helped
    thousands of military families to effectively cope with situations that
    heighten a family's risk for child abuse and neglect. Second, I am here
    to ask your assistance in keeping this vibrant, successful program
    alive and strong so that we can hasten the day when having a parent in
    the U.S. military does not increase a child's risk of being abused or
    neglected.
        As an introduction, I am Mildred Brooke, Vice President of
    Operations of J&E Associates, Inc. My company operates a number of
    programs aimed at improving the quality of military family life in
    partnership with the Department of Defense. One of these programs is
    the New Parent Support Program, or NPSP, a model program for preventing
    child abuse and neglect.
    The New Parent Support Program: A Success Story in the DOD's Effort to
            Combat Child Abuse and Neglect
        The New Parent Support Program, which exists in some form in all
    four Services, is based on a practical, successful model for preventing
    violence against children. As designed, the program targets expectant
    parents and families with children under the age of 6 years and
    provides home visits by nurses or social workers, referrals to
    community resources, and a wide variety of life skill and parent
    education classes.
        J&E currently operates the NPSP for the Army service-wide and
    provides staff to operate the program at five Navy installations. Under
    our contract with the Army, we are also conducting extensive research
    to learn more about the families we serve and the efficacy of the NPSP.
    Upon voluntary entry into the Army NPSP, parents who agree to
    participate in research complete a battery of questionnaires frequently
    used by family violence researchers to assess family functioning and
    risk factors for child abuse. The questionnaires contain nationally
    normed scales that measure factors such as marital satisfaction, child
    behavior, depression, family conflict, and parental stress. We reassess
    these families every six months using the same questionnaires. So far,
    684 families have consented to participate in the study and completed
    the initial set of questionnaires.
        What have we learned from this research?
        First, we have found that parents entering the program have high
    levels of distress that far exceed the normal concerns and worries new
    parents typically have about childrearing. Here are some of the
    characteristics of these families:
      --58 percent of the mothers and 39 percent of the fathers are
            clinically depressed;
      --about 15 percent of the families have children who have severe
            emotional and/or behavioral problems;
      --compared to a norm group of expectant mothers who are not at risk
            for child abuse, mothers entering the program have
            significantly fewer social supports available to them;
      --nearly 70 percent of the mothers and 75 percent of the fathers
            report clinically significant levels of marital
            dissatisfaction;
      --according to their scores on a parental stress index, approximately
            one-third of the parents are experiencing such high levels of
            stress that they need to receive immediate professional
            assistance;
      --38 percent of the mothers and 25 percent of the fathers have
            personality traits, belief systems, and attitudes toward
            parenting that are similar to those identified in studies of
            abusive parents--a finding which indicates that these parents
            are at definite risk of abusing their children; and
      --using a more liberal definition for risk of child abuse--that is, a
            somewhat lower cutoff score on a child abuse potential
            inventory that correctly differentiates abusers from non-
            abusers 89 percent of the time--nearly half of the mothers and
            one-third of the fathers were classified as at risk of abuse.
        In summary, the parents entering this program--including active-
    duty fathers--are depressed, stressed out, dissatisfied in their family
    lives, and often lacking in natural social supports. A significant
    proportion of the parents are at high or moderate risk of abusing their
    children or committing acts of domestic violence.
        These findings show that the NPSP is exactly on target. The high
    level of marital distress among participants indicates a strong need
    for marital interventions delivered directly by NPSP home visitors or
    through referrals to outside services. The low levels of social support
    among mothers indicates the importance of support services for these
    women.
        Does the NPSP help these parents?
        The research evidence strongly indicates that it does. We
    consistently receive highly positive evaluations of the program from
    base commanders, senior enlisted leaders, and the parents themselves.
    According to regularly administered client satisfaction surveys,
    parents rate the home visitation services, parenting information, and
    parenting classes offered through the NPSP as ``excellent.''
        More importantly, the research results show that following NPSP
    interventions there are major improvements in many areas of family
    functioning. Parenting questionnaires administered six-months into the
    program show parents scoring significantly better on scales that
    measure the following: family conflict, rigidity, and problems; family
    strengths; child aggressive symptoms; parent depression; high risk
    factors for child abuse; low and moderate risk factors for child abuse;
    and high risk factors for spouse abuse.
        The implications of this research are: (1) there is a definite need
    among military families for new parent support services and (2) the
    NPSP services we provide really work.
        The research results cited above are from our semi-annual research
    reports submitted to the Army in October 1998 and April 1999.
    The Need for Increased Funding
        In fiscal year 1998, J&E staff provided home visitation services--
    the cornerstone services of the NPSP--to 4,026 Army families, producing
    the positive results just described. In the first four months of fiscal
    year 1999, we delivered these services to nearly one thousand
    additional families, an average of about 250 new families each month.
    This is the maximum level of services that can be delivered with our
    current staffing of approximately 100 people on the Army NPSP. However,
    unless the funds that were allocated by the Subcommittee in the fiscal
    year 1999 Conference Report are released by the DOD for the NPSP, J&E
    believes that the Army and Navy will be forced to drastically reduce
    the scope of our operations on this valuable and viable program.
        Programs on all installations served by J&E are currently operating
    at capacity, and in some instances staff has had to limit their
    outreach efforts so as not to create long waiting lists for NPSP
    services.
        Mr. Chairman, I request that you and members of the Defense
    Subcommittee take whatever steps are necessary to ensure that the
    fiscal year 1999 funds you allocated for the NPSP are immediately
    released by DOD. I also request that you ensure that funding continue
    for the NPSP in fiscal year 2000 at a level of $20 million.
        I appreciate the opportunity to submit this testimony. I thank you
    for your support and look forward to working with you and the
    Subcommittee to ensure that our young military families, at risk,
    receive the support services that they have come to rely on and expect.
        Thank you.

        Senator Stevens. Senator Kennedy and I are working on a new
    program to deal with parenting education, but doing it in high
    schools. Our indications are that so many of the young people
    move away from their families and are becoming young parents
    without anyone around to assist them, or even knowing what it
    means to be a parent or, in particular, how to deal with
    children in the period from 1 to 3 years, which is a critical
    period of evolvement, as we all know now.
        Does your program cover that?
        Ms. Brooke. Yes, it works with the expectant and then the
    new parents, and helps teach the parents their parenting
    skills, how to play with their children, what is normal child
    development.
        Senator Stevens. But does it deal with them before they
    even think about having kids?
        Ms. Brooke. No. It is usually when they are expecting or
    just having their first child. We do not have the staff
    available to reach out to other families or couples planning to
    be parents.
        Senator Stevens. A lot of these young people go into the
    military before they even--some of them--before they finish
    high school.
        Ms. Brooke. Correct.
        Senator Stevens. I think we ought to explore what to do
    about that. It does seem that that is the difficulty right now.
    So many young parents have no guidance about what to do with
    their offspring and how to take care of them, literally. I
    would be interested in talking to you about that later. We
    might be able to include some portion of our bill to cover the
    program you have got, too.
        Ms. Brooke. I agree with you, Senator. I think if you could
    provide young people with realistic expectations about
    parenthood it would be very helpful.
        Senator Stevens. We teach them how to run their checkbooks
    and other things, but we do not teach them what to do with
    their children if they ever have them. Thank you very much.
        Ms. Brooke. Thank you.
        Senator Stevens. Our next witness is Fran Visco, President,
    the National Breast Cancer Coalition.
    STATEMENT OF FRAN VISCO, PRESIDENT, NATIONAL BREAST
                CANCER COALITION
        Ms. Visco. Good afternoon, Senator.
        As a breast cancer survivor and President of the National
    Breast Cancer Coalition, and a lawyer, I would like to thank
    you on behalf of the 2.6 million women living with breast
    cancer for this committee's ongoing support of the Department
    of Defense peer-reviewed breast cancer research program. And I
    am here today, of course, to ask--joined by 62 of your
    colleagues in the letter that was delivered to the committee
    this past week--for a continuation in maintenance of the
    program.
        I know that you are well aware of the program and its
    success.
        Senator Stevens. Let me cut you short. I know the program,
    as you know. And I am a prostate cancer survivor myself. We
    will agree to put in $175 million again if you will agree you
    will not ask for anymore.
        Ms. Visco. How about if I ask for a little less?
        Senator Stevens. Every time we come out of this committee
    with a figure, it is increased on the floor. Now, this year,
    the pressure on this bill is so great that if that happens, it
    is going to be, I think, a very bad result. Because we have
    kept our commitment in the past, but I hope you will give us a
    commitment that we are not going to have pressure to increase
    that amount once we get to the floor or conference. Because
    every year, when we come out of here with a figure, it has gone
    up and up.
        Now, this year, as I have said, and you have heard what I
    have said, we are underfunded and have an over-demand on this
    committee. We will keep up that line at the same level, but I
    hope you will honor us by not requesting an increase anymore
    this year.
        Ms. Visco. Senator Stevens, I make a commitment to you that
    we will not ask for an increase in the program this year.
        Senator Stevens. Thank you very much.
        I have your statement and you have my support.
        Ms. Visco. Thank you very much.
        Senator Stevens. By the way, it is essential that we do
    that, because I think we have 35 to 40 percent of the Army now
    who are women. We are getting more and more problems dealing
    with young women in the military. I think it is a legitimate
    interest for the military research money to continue that
    research on breast cancer. As a matter of fact, they have less
    money, but they have a substantial problem in prostate cancer,
    as you know.
        Ms. Visco. Yes, I do, Senator.

                               prepared statement

        Senator Stevens. Thank you very much.
        Ms. Visco. Thank you. And thank you for giving better
    testimony than I could have in support of the program.
        Senator Stevens. Thank you.
        [The statement follows:]
                        Prepared Statement of Fran Visco
        Thank you, Mr. Chairman and members of the Appropriations
    Subcommittee on Defense for your exceptional leadership in the effort
    to increase and improve breast cancer research. As my testimony will
    describe in detail, the investment in cancer research made by you and
    this Committee is one of the contributions which has brought us closer
    than ever to the verge of significant discoveries about cancer. I am
    Fran Visco, President of the National Breast Cancer Coalition. I am
    also a wife, mother, lawyer, and breast cancer survivor.
        On behalf of the National Breast Cancer Coalition and the 2.6
    million women who are now living with breast cancer, I thank you for
    your strong past support of the Department of Defense's (DOD) Peer-
    Reviewed Breast Cancer Research Program and I urge your continued
    support of this important program with an appropriation of $175 million
    for the program for fiscal year 2000. The National Breast Cancer
    Coalition believes this program is vital to the eradication of breast
    cancer. And we are not alone. I have with me a letter signed by over 60
    of your colleagues in the Senate which requests that the DOD Peer-
    Reviewed Breast Cancer Research Program be funded at $175 million for
    fiscal year 2000.
        As you know, the National Breast Cancer Coalition is a grassroots
    advocacy organization made up of over 500 organizations and more than
    60,000 individuals and has been working since 1991 toward the
    eradication of this disease through advocacy and action. The National
    Breast Cancer Coalition's goals are (1) to increase the federal funds
    available for breast cancer research and to focus research on
    prevention, on finding the cause of and a cure for this insidious
    disease; (2) to make certain that all women have access to the quality
    care and treatment they need, regardless of their economic
    circumstances and (3) to increase the influence of women with breast
    cancer in the decision making that affects their lives.
        The DOD Peer-Reviewed Breast Cancer Research Program has been an
    incredible model that others have replicated. Broadly defined, the
    innovative research performed through the program has the potential to
    benefit not just breast cancer, but all cancers, as well as other
    diseases. Its success is literally changing the face of biomedical
    research in many arenas.
        This program is not only innovative, but is also incredibly
    streamlined. As you know, it is overseen by a group of distinguished
    scientists and activists, as recommended by the Institute of Medicine.
    Because there is no bureaucracy, the program is able to quickly respond
    to what is currently happening in the scientific community. It is able
    to fill gaps, with little fuss. It is responsive, not just to the
    scientific community, but also to the public.
        As the Chairperson (and former member) of the Integration Panel
    that implements the DOD Breast Cancer Research Program, I have
    witnessed the evolution of this program. In just six short years, the
    program has matured from an isolated research program to a broad-
    reaching influential voice forging new and innovative directions for
    breast cancer research and science. The flexibility of the program has
    allowed the Army to administer this groundbreaking research effort with
    unparalleled efficiency and skill. In addition, an inherent part of
    this program has been the inclusion of consumer advocates at every
    level, which has created an unprecedented working relationship between
    advocates and scientists, and ultimately led to unchartered research in
    breast cancer.
        It is important to note that the DOD Integration Panel that designs
    this program has a plan of how best to spend the funds appropriated.
    This plan is based on the state of the science--both what scientists
    know now and the gaps in our knowledge--as well as the needs of the
    public. This plan coincides with our philosophy that we do not want to
    restrict scientific freedom, creativity and innovation. While we
    carefully allocate these resources we do not want to predetermine the
    specific research areas to be addressed. This permits us to complement
    and not duplicate other federal funding programs.
        The National Breast Cancer Coalition has been the driving force
    behind this program for many years. The success of the DOD Peer-
    Reviewed Breast Cancer Research Program has been illustrated by two
    unique assessments of the program. The Institute of Medicine (IOM)
    which originally recommended the structure for the program,
    independently re-examined the program in a report published in 1997.
    Their findings overwhelmingly encourage the continuation of the program
    and offer guidance for program implementation improvements.
        The 1997 IOM review of the DOD Peer-Review Breast Cancer Research
    Program commended the program and stated that ``the program fills a
    unique niche among public and private funding sources for cancer
    research. It is not duplicative of other programs and is a promising
    vehicle for forging new ideas and scientific breakthroughs in the
    nation's fight against breast cancer.'' The IOM report recommends
    continuing the program and establishes a solid direction for the next
    phase of the program. It is imperative that Congress complement the
    independent evaluations of the DOD Breast Cancer Research Program, as
    well as reiterate their own high level of commitment to the Program by
    appropriating the funding needed to ensure its success. The IOM report
    has laid the groundwork for effective and efficient implementation of
    the next phase of this vital research program, now all that it needs is
    the appropriate funding.
        In addition to the IOM report, the DOD Peer-Reviewed Breast Cancer
    Research Program reported the progress of the program to the American
    people during a public meeting called the ``Era of Hope.'' It was the
    first time a federally funded program reported back to the public in
    detail not only on the funds used, but on the research undertaken, the
    knowledge gained from that research and future directions to be
    pursued. This meeting allowed scientists, consumers and the American
    public to see the exceptional progress made in breast cancer research
    through the DOD Peer-Reviewed Breast Cancer Research Program.
        Many scientists at the ``Era of Hope'' meeting expressed their
    enthusiasm for the program and the opportunity to work substantively
    with consumers at every step of the research process. In fact, the
    scientists who have seen first hand the benefits of the DOD Peer-
    Reviewed Breast Cancer Research Program have issued a strong statement,
    that in their scientific judgement the program should continue: ``* * *
    we urge that this program receive ongoing funding. This program has
    been broadly defined such that the research performed will be of
    benefit not just for breast cancer, but for all cancers and other
    diseases.''
        The DOD Peer-Reviewed Breast Cancer Research Program has attracted
    bright, fresh scientific minds with new ideas and continued to open the
    doors to how they think about breast cancer research and research in
    general.
        Developments in the past few years have begun to offer breast
    cancer researchers fascinating insights into the biology of breast
    cancer and have brought into sharp focus the areas of research that
    hold promise and will build on the knowledge and investment we have
    made. The Innovative Developmental and Exploratory Awards (IDEA) grants
    of the DOD program have been critical in the effort to respond to new
    discoveries and to encourage and support innovative, risk-taking
    research. The IDEA grants have been instrumental in the development of
    promising breast cancer research. These grants have allowed scientists
    to explore beyond the realm of traditional research and have unleashed
    incredible new ideas and concepts. IDEA grants are uniquely designed to
    dramatically advance our knowledge in areas that offer the greatest
    potential.
        Therefore, we have devoted a majority of the DOD funds to these
    types of grants, yet there were many promising proposals that could not
    be supported because of a lack of funds. It is disheartening to think
    that lack of funding could be the only factor stalling scientific
    research that could save so many lives. IDEA grants are precisely the
    type of grants that cannot receive funding through more traditional
    programs such as the National Institutes of Health, and academic
    research programs. It is vital that these grants are able to continue
    to support the growing interest in breast cancer research--$175 million
    for peer-reviewed research will help sustain the IDEA grant momentum.
        The DOD Peer-Reviewed Program has also sought innovative ways to
    translate what is discovered under the microscope to the bedside. Most
    recently, it defined a new funding mechanism that will carve out a
    niche in clinical translational research by bringing cancer clinical
    trials into community settings.
        In addition to the fact that the DOD program provides desperately
    needed, excellent quality breast cancer research, it also makes
    extremely efficient use of its resources. In fact, over 90 percent of
    the funds went directly to research grants. The federal government can
    truly be proud of its investment in DOD breast cancer research. The
    overall structure of the system has streamlined the entire funding
    process, while retaining traditional quality assurance mechanisms.
        The National Breast Cancer Coalition is highly committed to the DOD
    program in every effort, as we truly believe it is one of our best
    chances at finding a cure or prevention for breast cancer. The
    Coalition and its members are dedicated to working with you to ensure
    the continuation of funding for this program at a level that allows
    this research to forge ahead.
        In May of 1997, our members presented a petition with over 2.6
    million signatures to the Congressional leaders on the steps of the
    Capitol. The petition calls on the President and the U.S. Congress to
    spend $2.6 billion on breast cancer research between 1997 and the year
    2000. Funding for the DOD Peer-Reviewed Breast Cancer Research Program
    is an essential component of reaching the $2.6 billion goal that so
    many women and families worked to gain.
        Once again, we are prepared to bring our message to Congress. In
    less than two weeks, many of the women and family members who supported
    the campaign to gain the 2.6 million signatures will be at our Annual
    Advocacy Training Conference here in Washington, D.C. We expect more
    than 500 breast cancer activists from across the country to join us in
    continuing to mobilize behind the efforts to eradicate breast cancer.
    The overwhelming interest and dedication to eradicate this disease
    continues to be evident as people are not only signing petitions, but
    are willing to come all the way to Washington, D.C. to deliver their
    message about the importance of our commitment.
        Since the very beginning of this program, in 1993, Congress has
    stood in support of this important investment in the fight against
    breast cancer. In the years since then, Mr. Chairman, you and this
    entire Committee have been leaders in the effort to continue this
    innovative investment in breast cancer research.
        We ask you, the Defense Appropriations Subcommittee, to recognize
    the importance of what you have initiated. What you have done is set in
    motion an innovative and highly efficient approach to fighting the
    breast cancer epidemic. What you must do now is continue to support
    this effort by funding research that will help us win this very real
    and devastating war against a cruel enemy.
        Thank you again for inviting me to testify and giving hope to the
    2.6 million women living with breast cancer.

        Senator Stevens. Martin Foil.
        [No response.]
        Senator Stevens. Robert Morris, please.
    STATEMENT OF ROBERT V. MORRIS, EXECUTIVE DIRECTOR, FORT
                DES MOINES BLACK OFFICERS MEMORIAL, INC.
        Mr. Morris. Good afternoon, Senator. My name is Robert
    Morris. I am the Executive Director of the Fort Des Moines
    project.
        We have an opportunity to preserve a critical part of
    military history for America's youth to see and learn from at
    Fort Des Moines, Iowa. No military installation has played a
    greater part in the racial and gender integration of America's
    armed forces than Fort Des Moines, which we are attempting to
    preserve through a development of a memorial park project in
    this $2 million rehabilitation request, sponsored by Iowa
    Senators Tom Harkin and Charles Grassley.
        During the First World War, the United States established
    its first officer candidate school open to black Americans at
    Fort Des Moines, in 1917. Although three black officers had
    previously graduated at West Point, the Fort Des Moines OCS
    became the first class open to black candidates, authorized by
    Secretary of War Newton Baker. President Woodrow Wilson
    skeptically labelled this his great experiment, to determine
    the intelligence and courage of blacks to lead troops in
    combat.
        Of the 1,250 black officer candidates that became the 17th
    Provisional Training Regiment at Fort Des Moines, 1,000 were
    college graduates and faculty from historically black colleges,
    such as Howard, Morehouse and Tuskegee, and major institutions,
    including Harvard and Yale. The 250 noncommissioned officers
    called represented the famous 9th and 10th Calvary ``Buffalo
    Soldiers'' and the 24th and 25th Infantry who were in service
    on the Plains.
        Called the largest gathering of black college men in
    history, 639 graduated as captains and lieutenants on 15
    October 1917 and were dispatched for basic training at camps
    around the Nation. Many of the graduate officers went on to
    lead the 92nd Division against Imperial Germany on the
    battlefields of France in 1918. Those who survived combat
    returned victorious to America, to lead a fledgling human
    rights movement during the infamous Red Summer of 1919.
        A symbol of their noble spirit is my grandfather, 2nd
    Lieutenant J.B. Morris, who survived a near-fatal wound at the
    Battle of Metz, 9 months and a dozen operations in French
    hospitals, and a trampled spirit, to return to Iowa and publish
    the oldest black-oriented newspaper west of the Mississippi
    River for half a century, and co-found the National Bar
    Association in 1925. Some 25 years before military
    desegregation--actually 31 years before military
    desegregation--these graduate officers of Fort Des Moines
    racially integrated the command structure of America's armed
    forces and set the standard for all who followed.
        Some 25 years later, the very thought of female soldiers
    offended many Americans, in 1942, but the Army was determined
    to try yet another experiment, and once again conducted it at
    Fort Des Moines, Iowa. The Women's Army Auxiliary Corps (WAAC)
    was launched at Fort Des Moines in 1942, where 65,000 women
    would receive noncombat training during the war. As part of the
    WAAC, Fort Des Moines hosted the first officer candidate school
    for women, graduating 427 third officers, which is equivalent
    to a 2nd lieutenant, including 26 black females, on 29 August
    1942.
        The WAAC units served with distinction in England and
    France during World War II, and created a standard of
    excellence followed by female troops serving in America's armed
    forces today. It is astonishing to imagine that these two
    critical events were held at the same location 25 years apart,
    and that Fort Des Moines launched the racial and gender command
    integration of the United States military. The importance of
    our project is reflected in our board membership, including
    General Colin Powell, Brigadier General Elizabeth Hoisington,
    the military's first female general officer, and others, as you
    see on the list there.
        As part of our $6 million memorial park project at Fort Des
    Moines, an active Army Reserve post, which is named on the
    endangered National Historic Landmark list, the renovation of
    Clayton Hall, Building 46, should be a top priority. The
    dilapidated 20,000-square-foot building is deteriorating and
    must be saved immediately.
        A museum is planned for Clayton Hall, honoring the first
    black officers, the WAAC, and veterans everywhere, and mostly
    the military's historic role in leading our greater society
    toward equality. To this end, we request the $2 million funding
    support to save this critical part of our Nation's history.
        One note that I want to make on the end of this is that we
    are only asking the DOD to save this Army building with
    operations and maintenance funds. This is not for new
    construction. But as you know, out in Iowa, the winters are
    very brutal, and this building is literally falling apart. And
    if we do not save this critical part of our Nation's history,
    it is going to be lost on us forever.
        Senator Stevens. Is it a total $6 million plan for the
    memorial park?
        Mr. Morris. Actually, it is $7 million altogether.
        Senator Stevens. You are asking for Federal support for $2
    million of that?
        Mr. Morris. Right. And that is just sheer rehabilitation
    and nothing else. Just to save that building.
        As you can see from the brochure I handed out, the building
    is pictured there on the left-hand side. And it faces three
    other buildings.
        Senator Stevens. I looked at that.
        Mr. Morris. OK.
        Senator Stevens. Well, your chairman I consider to be one
    of my best friends. So we will do our best to support that
    request. I assume he joins you in this request.
        Mr. Morris. Senator Harkin?
        Senator Stevens. Colin Powell.
        Mr. Morris. Oh, Colin Powell. Yes, he is on our board.
        Senator Stevens. Your two Senators have written us about
    this.
        Mr. Morris. Yes.

                               prepared statement

        Senator Stevens. And we will do our utmost to fulfill that
    request.
        Mr. Morris. Thank you very much.
        Senator Stevens. Thank you very much.
        [The statement follows:]
                     Prepared Statement of Robert V. Morris
        I am Robert Morris, Executive Director of the Fort Des Moines Black
    Officers Memorial, Inc. of Des Moines, Iowa. I am honored to speak to
    his distinguished body and today, we have the opportunity to preserve a
    critical part of military history for America's youth to see and learn
    from at Fort Des Moines, Iowa.
        No military installation has played a greater part in the racial
    and gender integration of America's Armed Forces than Fort Des Moines
    which we are attempting to preserve through the development of our
    Memorial Park Project and this $2 million rehabilitation request by
    Iowa Senators Tom Harkin and Charles Grassley.
        During the First World War, the United States Army established its
    first officer candidate school open to black Americans at Fort Des
    Moines in 1917. Although three black officers had previously graduated
    West Point, the Fort Des Moines OCS became the first class open to
    black candidates authorized by Secretary of War Newton Baker. President
    Woodrow Wilson skeptically labeled it his ``great experiment'' to
    determine the intelligence and courage of blacks to lead troops in
    combat.
        Of the 1,250 black officer candidates that became the 17th
    Provisional Training Regiment at Fort Des Moines, 1,000 were college
    graduates and faculty from historically black colleges such as Howard,
    Morehouse and Tuskegee and major institutions including Harvard and
    Yale. The 250 non-commissioned officers called represented the famous
    9th and 10th Cavalry ``Buffalo Soldiers'' and the 24th and 25th
    Infantry who were in service on the plains.
        Called ``the largest gathering of black college men in history,''
    639 graduated as Captains and Lieutenants on 15 October 1917 and were
    dispatched for basic training at camps around the nation.
        Many of the graduate officers went on to lead the 92nd Division
    against Imperial Germany on the battlefields of France in 1918. Those
    who survived combat returned victorious to America to lead the
    fledgling human rights movement during the infamous ``Red Summer'' of
    1919 and beyond.
        A symbol of their noble spirit is my grandfather, 2nd Lieutenant
    J.B. Morris, who survived a near-fatal wound at the Battle of Metz,
    nine months and a dozen operations in French hospitals, and a trampled
    spirit, to return to Iowa and publish the oldest black-oriented
    newspaper West of the Mississippi River for half a century and co-found
    the National Bar Association in 1925.
        Three decades before official military desegregation, the graduate
    officers of Fort Des Moines racially integrated the command structure
    of America's Armed Forces and set the standard for all who would
    follow.
    The WAAC
        Some 25 years after the first black OCS, the very thought of female
    soldiers offended many Americans in 1942 but the Army was determined to
    try yet another ``experiment'' and once again conduct it at Fort Des
    Moines, Iowa.
        The Womens Army Auxiliary Corps (WAAC) was formed at Fort Des
    Moines in 1942 where 65,000 women would eventually receive non-combat
    training during World War Two.
        As part of the WAAC training, Fort Des Moines hosted the first
    officer candidate school for women graduating 427 officers, including
    36 black females, on 29 August 1942. WAAC units served with distinction
    in England and France during World War Two and created a standard of
    excellence followed by female troops serving in America's Armed Forces
    today.
        It is astonishing to imaging that these two critical events were
    held at the same location 25 years apart and that Fort Des Moines
    launched the racial and gender command integration of the United States
    military. The importance of our project is reflected in our Board
    membership that includes:
      --Gen. Colin L. Powell, USA (ret) former Chairman of the Joint Chiefs
            of Staff;
      --B/Gen. Elizabeth Hoisington, (ret) the military's first female
            General Officer;
      --M/Gen Evan Hultman, AUS (ret) former Executive Director of 100,000
            member Reserve Officers Association and United States Attorney;
      --Lt. Gen. Russell C. Davis, first black Chief of the National Guard;
      --Nebraska Senator Bob Kerrey, Medal of Honor winner Vietnam, and;
      --Col. Delores Hampton (ret) President of the National Association of
            Black Military Women.
        As part of our $6 million Memorial Park Project at Fort Des Moines,
    an active Army Reserve post which is named on the Endangered National
    Historic Landmark list, the renovation of Clayton Hall (Bldg. 46)
    should be a top priority. The dilapidated 20,000 square foot building
    is deteriorating and must be saved immediately before weather or
    vandalism destroy it.
        The museum planned for Clayton Hall honors the first black
    officers, the WAAC, and veterans everywhere and most of all the
    military's historic roll in leading our greater society toward racial
    and gender equality. To this end, we request your $2 million funding
    support to save this critical part of our nation's history.
        Thank you.

        Senator Stevens. Sergeant Ouellette.
    STATEMENT OF MICHAEL F. OUELLETTE, SERGEANT MAJOR, USA
                (RETIRED), DIRECTOR, LEGISLATIVE AFFAIRS,
                NON COMMISSIONED OFFICERS ASSOCIATION OF
                THE UNITED STATES OF AMERICA
        Sergeant Ouellette. Good afternoon, Mr. Chairman. I am
    Sergeant Major Michael Ouellette. On behalf of the Non
    Commissioned Officers Association (NCOA), we certainly
    appreciate the opportunity to be here.
        In the interest of time, I will not go into a lot of the
    recommendations made in our statement, because we clearly
    support the statements by our colleagues earlier. Most of those
    individuals representing those organizations were part of the
    National Military and Veterans Alliance, which I currently am a
    Co-Director, with Colonel Charles Partridge.
        I do want to take this opportunity to just mention last
    year's testimony. If you recall, at that time, NCOA came to you
    and said that it had moved the Redux retirement change to its
    highest level of priority. At that time, you said that you had
    just returned from a trip, and that is the rumblings that you
    had heard. And later that year, the Joint Chiefs came in and
    reiterated that they did in fact have a problem with that. And
    NCOA and the Military and Veterans Alliance are very pleased by
    the efforts put forth to respond to that alert.
        We also appreciate your effort in the interest of pay
    raises, retiree COLA's, and, most recently, the $200 million
    that you put in the emergency supplemental to support the Coast
    Guard, which had been left out of that whole equation. We
    certainly appreciate that.
        And, Mr. Chairman, it is for those reasons that you know
    that the Non Commissioned Officer Association has selected you
    to be the 1999 recipient of the L. Mendel Rivers Award for
    legislative achievement, which is the Association's highest
    legislative honor.

                               prepared statement

        So, on behalf of NCOA President Roger Putnam, the NCOA
    Board of Directors, and of course the 148,000 members of our
    Association, we offer you congratulations. We appreciate your
    support and response to the Association's request. And we look
    forward to you attending our convention in Las Vegas and making
    a presentation for that award and accepting the acknowledgement
    and the appreciation of our membership.
        [The statement follows:]
           Prepared Statement of Sergeant Major Michael F. Ouellette
        Mr. Chairman, the Non Commissioned Officers Association of the USA
    (NCOA) appreciates the opportunity to present testimony before this
    subcommittee on the fiscal year 2000 Department of Defense (DOD)
    Budget. The Association's comments and recommendations represent the
    views and concerns of its noncommissioned and petty officer members and
    will address a wide range of compensation, personnel, medical care and
    quality-of-life issues of significant importance to NCOA members.
    Hopefully, the members of the subcommittee will consider the
    recommendations from an enlisted viewpoint to be of benefit and value
    during deliberations.
        NCOA is a federally chartered organization representing 148,000
    active-duty, guard and reserve, military retirees, veterans and family
    members of noncommissioned and petty officers serving in every
    component of the Armed Forces of the United States; Army, Marine Corps,
    Navy, Air Force and Coast Guard.
        It is unfortunate that the Secretary of Defense and the military
    service chiefs are reporting recruiting and retention problems to the
    Congress. However, NCOA is enthusiastic that the solutions offered by
    the Secretary of Defense and the Joint Chiefs of Staff during recent
    testimony before the Senate and the House Armed Services Committees
    include military retirement system and military pay reforms as being
    vital to the improvement of recruiting and retention capabilities. Both
    of these solutions have been supported by NCOA in the past and
    currently are among the very highest priority legislative goals of the
    Association. In the interest of maintaining a strong national defense,
    NCOA believes this subcommittee recognizes the need to focus on the
    same issues as being vitally important to the success of the armed
    forces' ability to recruit the necessary people to support a strong
    national defense and ensure for the well being of the enlisted force of
    each military service. NCOA is pleased with the Administration's budget
    request supporting a 4.4 percent military pay raise on January 1, 2000,
    and that the DOD budget includes a funding request to support the pay
    increase. However, the Senate's passage of legislation to address
    military pay, retirement and benefits improvements far beyond those
    requested by the Administration could very well make a major
    difference. Consequently this subcommittee will be looking to
    appropriate increased Defense Department funding levels beyond initial
    forecasts and requests should S. 4 subsequently be passed in whole or
    in part by the House.
             senate ``fast track'' reform legislation (s. 4) exists
        In an effort to address the recruiting and retention problems and
    meet the corresponding recommendations offered by the military service
    chiefs, the Senate recently passed S. 4, a bill that contains sweeping
    reform measures in military pay, personnel and benefit programs. The
    provisions of S. 4 are summarized as follows:
      --Provides military members entering the service on or after August
            1, 1986, a choice between the 1980 retirement system or a
            $30,000 bonus and retirement under the 1986 REDUX military
            retirement system.
      --Provides a 4.8 percent military pay raise on January 1, 2000.
      --Provides for a further targeted military pay raise on July 1, 2000.
      --Gives authority to implement the Uniformed Services Thrift Saving
            Plan (USTSP) for participation by military members with
            provisions to match contributions in certain circumstances.
      --Payment of a $180 monthly allowance to those military members who
            qualify for food stamps.
      --Makes significant changes to the current military education benefit
            including, removal of the existing $1,200 enrollment fee;
            increase in the monthly benefit amount, and adds the ability to
            transfer the benefit to their families.
        As the members of the subcommittee can readily see, the very
    existence of S. 4 would result in a need for substantial funding
    increases to implement these provisions within the armed forces. The
    cost of implementing these programs from within the current budget
    request would be impossible and appropriations beyond the requested
    levels will be needed to facilitate the reality of the measures. NCOA
    wishes to offer a number of pay, personnel, medical care and quality-
    of-life recommendations which can significantly improve the overall
    well-being of military members, retirees, their families and survivors.
    The recommendations are as follows:
      --Annual military pay raise.--NCOA appreciates the support of this
            subcommittee to pass legislation in 1998 that awarded members
            of the armed forces a 3.6 percent full Employment Cost Index
            (ECI) pay raise on January 1, 1999. However, it must be noted
            that even though the increase matched wage inflation as
            measured by the ECI, it only served to stabilize the military/
            civilian wage differential at 13.5 percent. NCOA and many
            members of the armed forces are well aware that past military
            pay raises have been capped below private sector pay growth or
            full inflation in 12 of the last 17 years. The result is that
            military pay, even with the full ECI January 1999 increase,
            lags a cumulative 13.5 percent behind that enjoyed by the
            average American worker performing similar work. Knowing this
            and after sustaining weeks and months of family separation and
            the hardships associated with the missions of the military
            services, complicated by increasingly longer workdays due to
            force reductions and operation tempo, enlisted men and women
            feel they are being ``short-changed'' by those in control of
            their destinies.
        Already this year, the Senate Armed Services Committee recognized
    the seriousness of the pay situation by including language in S. 4 that
    provides for an ECI plus pay raise and an additional targeted raise in
    July 2000. The Administration's request for a 4.4 percent increase for
    January 2000 and commitment to full ECI pay raises in the future also
    denotes an effort to address the current 13.5 percent ``pay gap.''
    Although NCOA supports full ECI pay raises and a rapid elimination of
    the differential with civilian sector pay, the Association prefers the
    pay raise provisions of S. 4 as opposed to the Administration's plan.
    Therefore, NCOA recommends this subcommittee appropriate funding to
    support implementation of the 4.8 percent pay raise and the additional
    July 2000 targeted pay raise provisions of S. 4.
      --The uniformed services thrift savings plan (USTSP).--The Senate has
            already demonstrated an increased determination to establish a
            saving plan for members of the uniformed services. This
            proposal would give those eligible to participate an
            opportunity to contribute up to 5 percent of their basic pay
            into a program referred to as the Uniformed Services Thrift
            Savings Plan (USTSP) with the monthly deduction made from their
            pay by the servicing Defense Finance and Accounting Services
            (DFAS). Under normal conditions, such a proposal would appear
            to have considerable merit; however, NCOA has expressed concern
            in the past that such a proposal sends the wrong message or
            paints an inaccurate picture of the current financial
            capabilities of enlisted members of the military services.
            However, when viewed with the current efforts to improve the
            pay levels of military members, NCOA believes the time is now
            right to offer such a savings alternative. Consequently, NCOA
            recommends this subcommittee appropriate the funding needed to
            ensure implementation of the USTSP for participation by members
            of the armed forces, to include the Guard and Reserve, should
            the program be passed by Congress in 1999.
          Concurrently, NCOA believes that the enlisted community would be
            better served by a thrift savings plan that allows pre-age 59
            and one-half withdrawals without penalty at discharge,
            reenlistment and in special circumstances.
      --Military retirement system reform.--In early 1998 during testimony
            before Congress, NCOA identified the repeal of the 1980 and
            1986 military retirement systems as the Association's highest
            legislative priority. In view of the provisions of S. 4, as
            reported out by the Senate Armed Services Committee, NCOA
            supports the proposed alternative to the total repeal of REDUX
            retirement. The alternative contained in the Senate legislation
            would provide service members who enlisted after August 1,
            1986, with two retirement choices. At the 15th year of service
            they could choose to stay under the REDUX program and receive a
            $30,000 bonus or they could elect to receive benefits under the
            pre-1986 retirement program. REDUX retirement would pay 40
            percent of three-year averaged base pay at 20 years and would
            have limited (reduced) annual Cost-of-Living Adjustments
            (COLAs). The pre-1986 retirement benefit pays 50 percent of
            three-year averaged base pays plus full annual COLAs. NCOA
            recommends this subcommittee be prepared to appropriate the
            Defense Department with the increased funding levels needed to
            implement the Senate's proposal and permit retirement plan
            choice to be available to future military retirees.
        Retired Pay Cost-Of-Living Adjustment (COLA).--NCOA appreciates the
    efforts of this subcommittee to provide a January 1, 1999, 1.3 percent
    COLA to military retirees. Nonetheless, NCOA remains extremely
    concerned with previous year's congressional activity and debate
    suggesting that the Consumer Price Index (CPI) overstates inflation.
    Should the debate continue this year, the Association urges this
    subcommittee to continue to resist retirement or COLA proposals that
    would reduce the value or purchasing power of military retired pay.
        Concurrent Receipt.--Despite the reality that cost is a major
    factor in changing the current offset between VA disability
    compensation and military retired pay, NCOA remains committed to
    correcting this equity. Retired pay and VA compensation are made
    available for two distinctively different reasons. Yet, should a
    military retiree be adjudicated to be disabled by the VA, there
    continues to be a dollar for dollar offset in the payment of benefits.
    NCOA urges this subcommittee to work toward or be prepared to
    appropriate funding to reduce or eliminate the current VA disability
    offset to military retired pay or at least provide some relief to the
    most severely disabled as stipulated by H.R. 44.
                             military medical care
        Mr. Chairman, availability and access to military health care or
    alternative options are needed to provide for the medical care needs of
    all military beneficiaries. Surveys of military people and their
    families consistently group medical care right beside adequate pay,
    inflation protected retired pay and commissary availability as the top
    concerns of the military community. In fact, with base and hospital
    closures and reductions in medical personnel, the increasing lack of
    no-cost health care is a major concern to active and retired personnel
    alike. Enlisted people, both active and retired, suffer the greatest
    impact because of their lower pay levels which cause them to place a
    greater value on the earned ``lifetime'' benefit. Many military members
    are further penalized because their duty stations are normally outside
    of TRICARE Prime option catchment areas resulting in increased out-of
    pocket costs associated with the TRICARE Standard option.
        Currently more than 58 hospitals have been closed as part of the
    Base Realignment and Closure Commission (BRAC) or other actions.
    Services have been cut back at many of the hospitals remaining open and
    many of them have been and continue to be downgraded to clinic size.
    Hundreds of thousands of retirees and their family members who received
    care in Military Treatment Facilities (MTFs) are now finding that care
    is no longer available. Retirees are being denied prescription drugs by
    MTF pharmacies in increasing numbers. They are told that many
    prescribed drugs are too costly and are either not stocked or are
    restricted for issue to only active duty beneficiaries.
        The TRICARE Program has been in various states of development or
    implementation for nearly a decade. Still the TRICARE-Prime option is
    not available in many parts of the United States. For example, in
    California where the military managed care system has been in place the
    longest, there are still areas without TRICARE Prime networks. However,
    despite the lack of established networks, the TRICARE-Standard/CHAMPUS
    option is then the only alternative. Unfortunately, the CHAMPUS Maximum
    Allowable Charge (CMAC) is so low many physicians will not accept it.
    The current system is broken, and must be fixed.
        NCOA fully supports keeping a strong, effective direct medical care
    system for the delivery of health care as being in the best interests
    of national security. The Association also supports making full use of
    the MTFs and TRICARE networks as primary providers. However those
    retirees (Medicare-eligible) who are either ``locked-out'' of TRICARE-
    Prime or not guaranteed access to these primary sources of care should
    be offered a number of alternatives or options. In this regard, NCOA
    supports:
      --Waiver of Medical Care Co-Pays/Cost Shares/Deductibles.--NCOA fully
            supports the passage of legislation that would provide no-cost
            medical or waive any co-payments, cost shares or deductibles
            for military families assigned to isolated areas where health
            care options are limited and result in significant increases in
            out-of-pocket expenditures.
      --Medicare Subvention.--NCOA is pleased that Congress passed
            legislation in 1997 providing authority to provide a Medicare
            Subvention (TRICARE Senior Prime) demonstration project at six
            sites across the United States. Although this action was a
            major step forward, the Association is greatly concerned by
            loss of military medical care access for the many Medicare
            eligible military retirees residing outside the confines of the
            designated demonstration test sites. Therefore, NCOA strongly
            supports the implementation of the Medicare Subvention concept
            across the United States in order to provide immediate relief
            and to minimize the injustice being levied on all Medicare
            eligible military retirees who have lost earned health care
            benefits.
      --FEHBP as an Option.--NCOA has supported offering the Federal
            Employees Health Benefit Program (FEHBP) as an option to
            Medicare eligible military retirees, their families and
            survivors. Therefore the Association is extremely pleased with
            last years action by Congress to offer FEHBP to up to 66,000
            Medicare-eligible military retirees residing within the
            catchment areas of eight specific demonstration sites.
            Additionally, the Association is also pleased that Congress
            directed DOD to study the feasibility of offering TRICARE-
            Standard to eligible Medicare beneficiaries residing outside of
            TRICARE-Prime catchment areas as a second payer to Medicare.
            NCOA urges the subcommittee to support any legislative effort
            to direct DOD to restore TRICARE-Standard or CHAMPUS as
            originally intended by Congress or authorize and fund FEHBP as
            an option for all military retirees and their families.
      --Medicare Part B Enrollment Penalty Waiver.--NCOA urges the
            subcommittee members to support the enactment of any
            legislation to waive the 10 percent per year Part B Medicare
            late enrollment penalty for military retirees whose access to
            the military health care system has been curtailed due to
            implementation of TRICARE-Prime in any given area.
      --Mail-Order Pharmacy Program Expansion.--Another legislative item
            that would be most beneficial to all military retirees would be
            the expansion of this program beyond just those affected by
            BRAC actions. NCOA urges the subcommittee members to support
            legislation to expand the DOD mail-order pharmacy program and
            make it available to all military retirees, regardless of age,
            status or location. The availability of this program would be a
            great benefit to Medicare eligible military retirees even if
            Medicare Subvention or FEHBP options were expanded beyond the
            current demonstration project stages.
                             survivor benefit plan
        Because of congressional support for previous NCOA recommendations
    to make a number of improvements to the Survivor Benefit Plan (SBP),
    military retirees who enroll in SBP can now withdraw from the program
    during the first year following the two-year anniversary date of their
    retirement. Additionally, military retirees who participate in SBP will
    not be required to pay premiums for coverage after participating in the
    program for 30-years or reaching age 70 whichever comes later.
    Unfortunately, this change will not become effective until October 1,
    2008. One further enhancement to SBP would be the repeal of the two-
    tier annuity computation system applicable to SBP annuities for
    surviving spouses under the SBP. In this regard, NCOA fully supports
    the provisions of H.R. 363 introduced by Rep. Bob Filner (CA) that
    would eliminate the Social Security offset in an SBP annuity when the
    beneficiary becomes 62 years of age. Passage of this legislation would
    go far in making the SBP more appealing to military retirees and
    increasing the likelihood of participation in the plan. NCOA recommends
    this subcommittee support any effort to enact H.R. 363 into law.
    Additionally, since the SBP became effective on September 21, 1972, it
    would seem appropriate to NCOA that the effective date of the paid-up
    premium change in law should be changed to October 1, 2002, a date more
    closely aligned with the 30-year anniversary date of the original
    enactment of SBP. NCOA additionally supports the passage of S. 763 to
    increase post-62 SBP annuity levels.
                            guard and reserve issues
        NCOA recommends this subcommittee include provisions in the fiscal
    year 2000 DOD Appropriations Bill that would make a number of
    significant improvements for members of the Guard and Reserve. The
    recommendations follow:
      --Authorize the crediting of all satisfactory military service toward
            the 30-year requirement for retirement at the highest grade
            satisfactorily held.
      --Include provisions for reserve component retirees that would
            recognize extraordinary valor and heroism in the same manner as
            active component retirees, namely authorize a 10 percent
            increase in retired pay based upon such decorations.
      --Include provisions that directs a DOD regulatory change to
            authorize identical privileges for space available travel among
            all retired uniformed service members, their spouses and
            dependents (remove current inequitable restrictions for retired
            reservists not yet age 60).
                uniformed services former spouse protection act
        NCOA sincerely appreciates the efforts of Rep. Bob Stump (AZ) to
    introduce USFSPA legislation last year and, more importantly, to hold a
    House Veterans Committee hearing on the subject. NCOA strongly supports
    and appreciates Rep. Stump's introduction of H.R. 72 this year and
    urges this subcommittee to support important and educational hearings
    on the subject of USFSPA this year and closely monitor DOD's release of
    the congressionally directed USFSPA report not later than September 30,
    1999.
      congressional commission on servicemembers and veterans transition
                        assistance presents final report
        NCOA wishes to congratulate the Commissioners (members) of the
    Congressional Commission on Servicemembers and Veterans Transition
    Assistance for their outstanding efforts culminating with their final
    report will was presented on January 14, 1999. NCOA supports the
    Commission's recommendations but feels obligated to point out that to
    enactment many of its more than 100 recommendation addressing a total
    of 31 separate issues, must begin with this subcommittee and eventually
    the House and Senate Armed Services Committees working in tandem with
    the Department of Defense. In this regard, NCOA recommends enactment
    and funding of the following Commission recommendations:
      --Enhancement of the Montgomery GI Bill.
      --Improve Servicemembers' Transition Programs and Services.
      --Identify Credentialing (License, certification, apprenticeship
            requirements) Barriers and Opportunities.
      --Provide incentives for federal contractors to hire veterans.
      --Eliminate disincentives and restrictions for retired members of the
            Uniformed Services to obtain federal civilian employment.
      --Provide transition health care for recently separated
            servicemembers and their families.
      --Require DOD and VA to combine purchasing power for medical
            products.
      --Streamline the physical disability evaluation process.
      --Foster personal financial management skills for servicemembers.
                             other important issues
        Temporary Lodging Expense (TLE).--NCOA strongly supports the
    expansion of the TLE allowance to those military members making their
    first permanent duty assignment move. NCOA recommends this subcommittee
    fund the expansion of this allowance in legislation this year.
        Welfare Program Considerations.--NCOA is encourage with the recent
    congressional activity and debate regarding certain military members
    eligibility for Food Stamps and Women and Infant Children Programs.
    NCOA only wants to ensure that this subcommittee consider expanding
    program eligibility to those qualified military families residing in
    oversea areas by providing necessary funding.
                                   conclusion
        Mr. Chairman, perhaps the single most valuable effort this
    subcommittee could make to the well-being of the enlisted military
    community and the armed forces in general is to send a signal that
    Congress supports those who serve their Country and will provide some
    stability in pay and benefits. In 1997, the House of Representatives
    attempted to pass legislation to give military members annual full ECI
    pay raises.
        Although that particular effort was not successful, there were
    numerous other improvements. For instance, Congress passed legislation
    that reduced out-of-pocket medical costs for military families assigned
    to isolated areas. They made improvements in Hazardous Duty Pay and
    Family Separation Allowance (FSA) and even gave military members a new
    Hardship Deployment Pay. A Retiree Dental Plan, although non-
    subsidized, became a reality. In 1998, Congress succeeded in passing
    legislation to give military people a full ECI pay raise on 1 January
    1999. There were also increases in Hazardous Duty Pay for Aerial Flight
    Crew Members, improved Montgomery G.I. Bill levels, expansion of
    Hardship Duty Pay eligibility and a number of key medical care
    improvements. Still there remains uncertainty in the minds of military
    people. Still there remain reports of severe recruiting and retention
    problems with the services. Even with the legislative gains achieved by
    military people, they still seem only to remember the attempted threats
    to their benefits.
        The insecurity caused by this constant churning of threats to
    benefits creates an environment of stress that takes a real toll on
    national security. Military members and their families simply must be
    given opportunities to respect and participate in change instead of
    living in constant dread and fear of loss. The very fact that Congress
    and this subcommittee in particular listens to their expressed concerns
    about those things that are important and then responds legislatively
    to meet their needs, means a great deal to the military member and
    family who serves.
        NCOA appreciates the opportunity to present a number of enlisted
    views in testimony before this subcommittee. The Association looks
    forward to addressing further details regarding the issues discussed
    and any other issues with you and the subcommittee staff.
        Thank You.

        Senator Stevens. That is on my schedule, and I do
    appreciate your comments. We will continue to try and pursue
    these objectives. As you know, they take authorization, so we
    are awaiting the authorization bill's passage. We did pass this
    in the House, as you know.
        Sergeant Ouellette. That is right. I understand.
        Senator Stevens. Thank you very much. I appreciate your
    courtesy.
        Sergeant Ouellette. I certainly appreciate it, Mr.
    Chairman. Thank you for the opportunity.
        Senator Stevens. I will see you there. It is at the end of
    the July recess, as I recall, on Saturday.
        Sergeant Ouellette. Yes, that is correct.
        Senator Stevens. Yes, sir, that is on the schedule. Thank
    you very much.
        Sergeant Ouellette. Thank you.
        Senator Stevens. Ann Kolker.
    STATEMENT OF ANN KOLKER, EXECUTIVE DIRECTOR, OVARIAN
                CANCER NATIONAL ALLIANCE
        Ms. Kolker. Thank you, Mr. Chairman, for the opportunity to
    testify at this hearing. I am Ann Kolker, a founder and the
    Executive Director of the Ovarian Cancer National Alliance.
        We are a relatively young organization, established in the
    summer of 1977. A consumer-led group, uniting ovarian cancer
    survivors, women's health activists, and health care
    professionals in a coordinated effort to focus national
    attention on ovarian cancer, a disease that has gone
    unrecognized for far too long.
        The Department of Defense Ovarian Cancer Research Program
    plays a vital role in the ovarian cancer community's urgent
    effort to better understand the disease and improve survival
    from this deadliest of gynecologic cancers. I know firsthand. I
    am an ovarian cancer survivor, one of the lucky few discovered
    in first stage. I also serve as a consumer representative on
    the DOD Ovarian Cancer Research Integration Panel.
        The Alliance is pleased that there was $10 million for
    ovarian cancer research in this year's appropriation. I thank
    the committee for your efforts on our behalf.
        However, because of the particularly lethal nature of
    ovarian cancer and the smaller growth in this program as
    compared to the other DOD research cancer efforts--breast and
    prostate cancer particularly--the Alliance views the ovarian
    cancer research program as modest and ripe for an increase. We
    respectfully request this committee to increase funding for
    ovarian cancer research to $20 million in fiscal year 2000.
        Innovative, integrated and multi-disciplinary--these are
    the hallmarks of this unique program. And I am happy to report
    that the first grants awarded reflect these themes. There are
    three projects funded in the first grant cycle. One is the
    biological basis of chemo prevention in ovarian cancer, a
    project that is being conducted at Duke University Medical
    Center. The study examines the reproductive and genetic factors
    which affect ovarian cancer, and explores the potential for
    various approaches to prevention strategies.
        The second program is housed at Fox-Chase Cancer Center in
    Pennsylvania. Again, it is to look at the prevention of ovarian
    cancer and follows a particular group of high-risk women due to
    family history.
        The third grant that was funded is the very exciting grant
    using new technologies to identify and investigate molecular
    markers for ovarian cancer. This study is housed at the Fred
    Hutchinson Center in Seattle, and offers the promise of
    identifying new molecular markers that can help to detect
    ovarian cancer at an early stage, when it is treatable and
    survival rates are much higher.
        These three grants, with their emphasis on understanding
    the causes of ovarian cancer, early detection and prevention,
    are exactly what is needed to improve survival from this very
    lethal disease. And importantly, because these are project
    grants which infuse a significant amount of money into one
    institution and encourages collaboration between investigators
    of various disciplines, these grants strengthen the scientific
    community's commitment to ovarian cancer research.
        The $2 million that was added to the program over a couple
    of years has resulted in 20 applications that were reviewed for
    this grant cycle. And I believe the announcements will be made
    this fall. This research is tremendously important because
    ovarian cancer is truly life threatening. There will be over
    25,000 new cases this year. And currently over half of the
    women with this disease die within 5 years of diagnosis,
    because so often it is detected in late stage, when the
    survival rates for those women are only about 25 percent. But
    when women are detected in the early stage, as was my
    situation, the 5-year survival rate is over 90 percent.
        The dearth of scientific research in ovarian cancer and the
    absence of sufficient resources contribute to these terrible
    statistics. As with other cancers, the key to increase survival
    is early detection. And yet, for ovarian cancer, there is not a
    screening tool like there is for prostate, breast and cervical
    cancer. And that is essentially why we need more research.

                               prepared statement

        This can happen if we build on the work that has begun in
    this program by bolstering funds for a disease that each year
    kills one-third as many women as breast cancer, but receives
    less than one-tenth the dedicated research dollars in the DOD
    budget. With ovarian cancer research neglected and underfunded
    too long, the DOD ovarian cancer research program is critically
    important. The Alliance urges the committee to increase funding
    dedicated to this terrible disease that takes the lives of too
    many women too soon.
        Thank you for your consideration and for your support.
        [The statement follows:]
                        Prepared Statement of Ann Kolker
        Thank you very much for the opportunity to testify at this
    important hearing.
        I am Ann Kolker, a founder and Executive Director of the Ovarian
    Cancer National Alliance. Established in the summer of 1997, the
    Alliance is a consumer-led umbrella organization uniting ovarian cancer
    survivors, women's health activists and health care professionals in a
    coordinated effort to focus national attention on ovarian cancer. The
    Alliance is working at the national level to increase public and
    professional understanding of ovarian cancer and to advocate for
    increased research for more effective diagnostics, treatments and a
    cure. The Department of Defense Ovarian Cancer Research Program plays a
    vital role in the ovarian cancer community's urgent effort to better
    understand the disease and to improve survival from this deadliest of
    gynecologic cancers. I know first hand; I am an ovarian cancer
    survivor, one of the lucky few discovered in first stage. I also serve
    as a consumer representative on the DOD Integration Panel.
        The DOD Ovarian Cancer Research Program is just beginning to
    develop a track record. Today, I will talk about the initial success of
    this program and the importance of building upon that success with an
    expanded and stronger program. The Alliance is pleased there was $10
    million for ovarian cancer research in this year's appropriation.
    However, because of the particularly lethal nature of ovarian cancer
    and the smaller growth in this program as compared to other DOD
    research cancer efforts, the Alliance views the Ovarian Cancer Research
    Program as modest and ripe for a significant increase. The Alliance
    respectfully requests this Committee to increase funding for ovarian
    cancer research to $20 million in the next fiscal year.
        ``Innovative, integrated and multi-disciplinary.'' These are the
    hallmarks of this unique program created by this Committee. And I am
    happy to report that the first grants awarded, (based on the $7.5
    million Congress appropriated for this program in 1997), reflect these
    themes. The three projects funded in the first grant cycle are:
      --``Biological Basis of Chemoprevention in Ovarian Cancer''--being
            conducted at Duke University Medical Center in Durham, North
            Carolina. This study examines the reproductive and genetic
            factors which affect ovarian cancer, and explores the potential
            use of progestins as a prevention strategy.
      --``Ovarian Cancer Prevention Program''--being conducted at Fox Chase
            Cancer Center in Philadelphia, Pennsylvania. This study focuses
            on women at high risk due to family history, follows them
            through the decision-making about their options, including
            prophylactic oophorectomy (removal of the ovaries), and
            evaluates the efficacy of the chemoprevention.
      --``Use of Novel Technologies to Identify and Investigate Molecular
            Markers for Ovarian Cancer Screening and Prevention''--being
            conducted at the Fred Hutchinson Cancer Research Center in
            Seattle, Washington. This study will look for new molecular
            markers that can help detect ovarian cancer at an early stage.
        What is important about these grants is that they address the core
    problem facing the ovarian cancer community--poor survival, because the
    vast majority of cases are not detected until late stage. The three
    grants awarded by the DOD in 1998, with their emphasis on understanding
    the causes of ovarian cancer, early detection and prevention, are
    exactly what is needed to improve survival from this deadliest of
    gynecologic cancers. Importantly, because these are project grants
    which infuse a significant amount of money into one institution and
    encourage collaboration between departments and other institutions,
    these grants strengthen the scientific community committed to ovarian
    cancer research.
        I would also like this Committee to know that the prospects for
    enhancing these innovative and pioneering approaches to ovarian cancer
    research with monies from the 1998 funding stream are very strong. An
    additional $2.5 million of funds and an expansion of eligible
    participants created a three fold increase in the number of proposals
    submitted for the 1998 funding cycle. The 20 proposals submitted were
    reviewed by the Scientific Review Panels in January, the Integration
    Panel has met, and announcements of the awards will be made within the
    next few months.
        Let me be clear about why this research is so important. Ovarian
    cancer is life threatening! An estimated 14,500 American women will die
    from ovarian cancer in 1999 and more than 25,200 new cases will be
    diagnosed this year. Currently, 50 percent of the women diagnosed with
    ovarian cancer die from it within five years. Among African American
    women, only 46 percent survive five years or more. Tragically, over
    two-thirds of the cases in the U.S. are diagnosed in advanced stage,
    when the five year survival rate is only 24-28 percent. But, when women
    are diagnosed in the first stage, which occurs in less than one-quarter
    of the cases, the five year survival rate is over 90 percent. As I
    mentioned earlier, I was fortunate to have been diagnosed in this early
    stage.
        The dearth of scientific research on ovarian cancer and the absence
    of sufficient resources contribute to these terrible statistics.
    Unfortunately, key aspects of the disease are unknown. Currently,
    diagnostic tools are imprecise and there is no simple, reliable and
    easy-to-administer screening mechanism for the general population. As
    is the case with other cancers, the key to improved survival is early
    detection. Yet, there are no early detection tools that work for the
    general population to detect ovarian cancer, like there are for
    cervical cancer (the Pap Smear) and for breast cancer (the mammogram).
    These life-saving measures will only be found when more research
    funding is made available.
        An ultimate goal of the Alliance is to prevent ovarian cancer. But,
    until we can prevent ovarian cancer, an immediate priority is to
    increase the research dedicated to a better understanding, early
    detection and prevention of ovarian cancer. We need to build on the
    work that has begun in the DOD Ovarian Cancer Research Program by
    bolstering research on a disease that each year kills one-third as many
    women as breast cancer, but receives less than one-tenth the dedicated
    research dollars in the DOD budget.
        With ovarian cancer research neglected and underfunded for too
    long, the Department of Defense Ovarian Cancer Research Program is
    critically important. It strengthens the federal government's
    commitment to ovarian cancer research. It supports innovative and novel
    approaches that offer promise of better understanding the cause and
    prevention of ovarian cancer. It encourages new investigators into the
    field of ovarian cancer research and it encourages programs to address
    the needs of the minority, elderly, low-income, rural and other under-
    represented populations. And finally, it helps to build the
    institutional commitments to ovarian cancer research so essential to
    unlocking the mysteries of this deadliest of gynecologic cancers.
        Thank you for your attention to this important women's health
    issue. The 183,000 women currently living with ovarian cancer, our
    sisters, daughters and granddaughters, the millions of at-risk women
    around the country, and all of our families look to your support for
    increasing the financial resources dedicated to this terrible disease
    that takes the lives of too many women too soon.

        Senator Stevens. Well, as you probably know, last year this
    committee provided a fund, and earmarked only the $2 million
    that had been continued from the past. That was changed in
    conference. I do not know what will happen this year. But
    clearly there was funding that we put in the bill. I think it
    was a line item when it came out of conference.
        Ms. Kolker. It was $10 million, that is correct. Yes.
        Senator Stevens. We will see what happens this year.
        I also know that I talked to the National Cancer Institute
    (NCI), and they are continuing to go into this cancer very
    seriously.
        Ms. Kolker. They are increasing their efforts on this
    cancer, but we are so behind some of the other cancers and the
    understanding. It needs a jump start.
        Senator Stevens. I know you are behind on this bill, ma'am.
    But we are not going to put any more money into the bill. We
    put the money in last year, and we will continue to try to have
    a fund that DOD can fund beyond prostate and breast cancer, the
    cancer research they want to fund. I do not know what the House
    will do with that, but that will be our policy again. But we
    have increased the money for NCI, and particularly for this
    research.
        We are in the process of trying to double NCI over 5 years.
    You cannot ask us to double here, too. You have got the money
    in NCI, and I hope you will approach them to get your
    priorities from NCI.
        Ms. Kolker. We are working very closely with NCI. But as
    with the other cancers, particularly breast and prostate, there
    are so many unique things about the money that is dedicated in
    this program--it is dedicated money, it funds novel and
    innovative research, and it is quite unique.
        Senator Stevens. I understand that. And with all the people
    that appear before us, we could dedicate almost the whole
    Defense budget to basic medical research. But it is not going
    to be done this year. There are too many constraints on this
    budget. We cannot increase that medical money.
        Now, we may end up in conference allocating more to this
    line. We will have to wait and see what happens. But we cannot
    increase the total amount we are putting into medical research
    from the DOD bill. It is just not possible, because we are
    about $4 billion below the amount of money we have this year.
    And I hope you will go to NCI and really tell them that they
    should put the priority out there, because they have more
    money. And we are going to continue to give them more money.
        Ms. Kolker. We appreciate what you could do, Senator. Thank
    you very much.
        Senator Stevens. Thank you very much.

                        additional submitted statements

        Senator Stevens. The subcommittee has received a statement
    from Senator Shelby and a number of statements from witnesses
    who could not be heard and they will be placed in the record at
    this point.
        [The statements follow:]
                Prepared Statement of Senator Richard C. Shelby
        Mr. Chairman, I am pleased that one of the witnesses here today is
    a nationally recognized researcher from the University of Alabama in
    Birmingham School of Medicine. Dr. Sadis Matalon is a well-known expert
    on the condition called Acute Respiratory Distress Syndrome (ARDS).
        ARDS, in layman's terms is an accumulation of fluid in the lungs,
    which usually occurs as a result of some precipitating injury. If not
    treated, ARDS eventually leads to respiratory or multi-organ failure.
    According to Dr. Matalon's written statement, more than 90 percent of
    combat casualties who died after being evacuated had evidence of ARDS.
    Those surviving for more than five days had a high incidence of ARDS.
    The incidence in the civilian population in the U.S. is some 150,000
    cases a year, so this is a medical issue related to both battlefield
    and civilian trauma. In fact, more people die from ARDS than die from
    AIDS each year. (est. 60,000 ARDS vs 50,000 AIDS)
        Research that will give us a better understanding of why ARDS
    occurs and result in more effective treatment of ARDS is particularly
    important for the military where close quarters, such as those found on
    ships, can actually confound the condition and its treatment. The
    threat posed by the use of chemical or biological warfare, which
    results in severe injury to the lungs, is an additional reason for an
    increased effort to combat ARDS.
        It is clear that we need to do more in this area. Last year, the
    Defense Appropriations bill provided $19.5 million for medical research
    activities and indicated that lung research should be one of the focus
    areas in allocating these funds.
        I am pleased to see the University of Alabama in Birmingham and the
    Lovelace Respiratory Research Institute collaborating on a research
    effort that could lead to a better understanding of ARDS and better
    methods of treating the condition. This is an issue in which all the
    military services have a substantial interest and I am happy to support
    the efforts of these two fine institutions.
                                     ______

    Prepared Statement of the California Industry and Government Coalition
                                on PM-10/PM-2.5
        Mr. Chairman and Members of the Subcommittee: On behalf of the
    California Industry and Government Coalition on PM-10/PM-2.5, we are
    pleased to submit this statement for the record in support of our
    fiscal year 2000 funding request of $750,000 for the California
    Regional PM-10/PM 2.5 Air Quality Study.
        The San Joaquin Valley of California and surrounding regions exceed
    both state and federal clean air standards for small particulate
    matter, designated PM-10/PM-2.5. The 1990 federal Clean Air Act
    Amendments require these areas to attain federal PM-10/PM-2.5 standards
    by December 31, 2001, and the proposed PM-2.5 by mid 2003. Attainment
    of these standards requires effective and equitable distribution of
    pollution controls that cannot be determined without a major study of
    this issue.
        According to EPA and the California Air Resources Board, existing
    research data show that air quality caused by the PM-10/PM-2.5 problem
    has the potential to threaten the health of more than 3 million people
    living in the region, reduce visibility, and impact negatively on the
    quality of life. Unless the causes, effects and problems associated
    with PM-10/PM-2.5 are better addressed and understood, many industries
    will suffer due to production and transportation problems, diminishing
    natural resources, and increasing costs of fighting a problem that begs
    for a soundly researched solution.
        PM-10/PM-2.5 problems stem from a variety of industry and other
    sources, and they are a significant problem in the areas that are
    characteristic of much of California. Typical PM-10/PM-2.5 sources are
    dust stirred up by vehicles on unpaved roads, and dirt loosened and
    carried by wind during cultivation of agricultural land. Soil erosion
    through wind and other agents also leads to aggravation of PM-10/PM-2.5
    air pollution problems. Chemical transformation of gaseous precursors
    are also a significant contributor to PM-2.5, as combustion sources.
        Several aspects of the research are important to the U.S.
    Department of Defense:
      --DOD has a number of facilities within the affected region, such as
            Edwards Air Force Base and China Lake. Degradation of air
            quality and visibility could impact their operations.
      --Poor air quality also degrades the health and quality of life of
            personnel stationed at Valley bases.
      --Operations at DOD facilities in the Valley produce emissions which
            contribute to the Valley's air quality problem.
      --Transport out of the Valley may impact operations in the R-2508
            airspace in the Mojave Desert. Visibility reduction in
            particular could interfere with the ability to conduct
            sensitive optical tracking operations at DOD desert test
            ranges.
        The Department of Defense is a double stakeholder with respect to
    the PM-10/PM-2.5 issue and this important study. DOD activities not
    only contribute to the problem, they also are negatively affected by
    it. The importance of this study on PM-10/PM-2.5 is underscored by the
    need for more information on how the federal Clean Air Act Amendments
    standards can be met effectively by the business community, as well as
    by agencies of federal, state and local government whose activities
    contribute to the problem, and who are subject to the requirements of
    Title V of the Clean Air Act. There is a void in our current
    understanding of the amount and impact each source of PM-10/PM-2.5
    actually contributes to the overall problem. Without a better
    understanding and more information--which this study would provide--
    industry and government will be unable to develop an effective
    attainment plain and control measures.
        Our Coalition is working diligently to be a part of the effort to
    solve this major problem, but to do so, we need federal assistance to
    support research and efforts to deal effectively with what is
    essentially an unfunded federal mandate.
        Numerous industries, in concert with the State of California and
    local government entities, are attempting to do our part, and we come
    to the appropriations process to request assistance in obtaining a fair
    federal share of financial support for this important research effort.
    In 1990, our Coalition joined forces to undertake a study essential to
    the development of an effective attainment plan and effective control
    measures for the San Joaquin Valley of California. This unique
    cooperative partnership involving federal, state and local government,
    as well as private industry, has raised more than $24 million to date
    to fund research and planning for a comprehensive PM-10/PM-2.5 air
    quality study. Our cooperative effort on this issue continues, and it
    is our hope that private industry, federal, state and local governments
    will be able to raise the final $4.6 million needed to complete the
    funding for this important study.
        To date, this study project has benefited from federal funding
    provided through USDA's, DOD's, Interior's and EPA's budgets--a total
    of $13.3 million in federal funding. Through the Department of Defense,
    $250,000 was appropriated in fiscal year 1996, and $750,000 was
    provided in fiscal years 1997, 1998, and 1999. State and industry
    funding has matched this amount virtually dollar for dollar.
        With the planning phase of the California Regional PM-10/PM-2.5 Air
    Quality Study complete, a number of significant accomplishments have
    been achieved. These interim products have not only provided guidance
    for completion of the remainder of the Study and crucial information
    for near-term regulatory planning, they have also produced preliminary
    findings which are significant to the Department of Defense's (DOD)
    interests.
        The Study is significant to DOD interests for a number of reasons.
    The San Joaquin Valley experiences some of the most severe PM episodes
    in the nation. The information being collected by the PM study is
    essential for development of sound and cost-effective control plans.
    Without this information, military installations such as Lemoore NAS in
    the San Joaquin Valley could be subjected to unnecessary or ineffective
    controls. In addition, previous studies have demonstrated that
    significant amounts of fine particles and their precursors from the San
    Joaquin Valley are transported trough the Tehachapi Pass into the
    Mojave Desert, impacting operations at both Edwards AFB and China Lake
    NAWS. Good visibility is a mission-essential resource for both Edwards
    AFB and China Lake NAWS due to reliance on optically-based methods of
    collecting data at the testing ranges at each facility. Significant
    visibility reduction could compromise testing operations at these
    facilities. Effective control plans for the San Joaquin Valley, based
    upon the results of the PM study, will help mitigate visibility
    reduction in the Mojave Desert through the reduction of transport from
    the Valley.
        To this end, the PM study is expending significant resources to
    provide an improved understanding of visibility in the San Joaquin
    Valley and the Mojave Desert and transport between these two air
    basins. A preliminary field monitoring program was conducted during the
    fall and winter of 1995/96. Extensive visibility and meteorological
    measurements were collected. This database is being analyzed to address
    the spatial and temporal patterns of visibility, determine the sources
    which contribute to visibility impairment, and provide an improved
    understanding of the wind flow patterns and transport routes between
    the Valley and the Mojave Desert. Preliminary results indicate that
    secondary ammonium nitrate is the largest contributor to visibility
    reduction in the Valley.
        The results of these analyses are being used to design large scale
    field monitoring programs to be conducted in 1999 and 2000. These field
    programs will address both the annual and 24-hour PM-10 and PM-2.5
    standards. Surface and aloft monitoring of air quality, meteorology,
    fog, and visibility will be conducted at a cost of over $12 million.
    Final plans for these field studies are being developed, which will be
    carried out by numerous contractors over a broad area encompassing
    Central California, the Sierra Nevada Mountains, and the Mojave Desert.
    A database of the field study results will be completed in 2001, with
    air quality modeling and data analysis findings available in 2002. This
    timeline is ideally positioned to provide information for federal
    planning requirements as part of the new PM-10/PM-2.5 national ambient
    air quality standards.
        The Department of Defense's prior funding and participation have
    enabled these projects to occur. Continued support by DOD is essential
    to implement a full scope of visibility and transport-related programs
    and to ensure that DOD concerns are met.
        For fiscal year 2000, our Coalition is seeking $750,000 in federal
    funding through the U.S. Department of Defense to support continuation
    of this vital study in California. We respectfully request that the
    Appropriations Subcommittee on Defense provide this additional amount
    in the DOD appropriation for fiscal year 2000, and that report language
    be included directing the full amount for California. This will
    represent the final year of funding requested from DOD.
        The California Regional PM-10/PM-2.5 Air Quality Study will not
    only provide this vital information for a region identified as having
    particularly acute PM-10/PM-2.5 problems, it will also serve as a model
    for other regions of the country that are experiencing similar
    problems. The results of this study will provide improved methods and
    tools for air quality monitoring, emission estimations, and effective
    control strategies nationwide.
        The Coalition appreciates the Subcommittee's consideration of this
    request for a fiscal year 2000 appropriation of $750,000 for DOD to
    support the California Regional PM-10/PM-2.5 Air Quality Study. DOD's
    past contributions have helped ensure the success of the study. The
    coalition thanks you for your support of this important program.
                                     ______

            Prepared Statement of the Research Society on Alcoholism
        The Research Society on Alcoholism (RSA), is a professional
    research society whose 1,200 members conduct basic, clinical, and
    psychosocial research on alcoholism and alcohol abuse.
        Last year our organization submitted testimony to this subcommittee
    about alcoholism in the military, a serious problem that compromises
    national preparedness and the defense of the nation. We are deeply
    grateful that the Congress recognized this problem in the fiscal year
    1999 Department of Defense (DOD) Conference Report (105-746) by
    providing additional funding in the Defense health program for medical
    research. We were particularly pleased that alcohol research was
    specifically mentioned as one area to be funded. We would like to
    propose that these funds be directed towards research that will address
    the problem of alcoholism and alcohol abuse in the military.
        Alcoholism is a tragedy that touches all Americans. One in ten
    Americans will suffer from alcoholism or alcohol abuse and their
    drinking will impact on the family, the community, and society as a
    whole. Recent research indicates that alcoholism and alcohol abuse cost
    the nation approximately $167 billion annually. One tenth of this pays
    for treatment; the rest is the cost of lost productivity, accidents,
    violence, and premature death.
        In the military, the costs of alcoholism and alcohol abuse are
    likely to be enormous. Heavy drinking in the military is 40 percent
    more prevalent than in the civilian sector. Nearly one in five military
    personnel engages in heavy drinking, defined as having five or more
    drinks at least once a week (1995 Department of Defense Survey of
    Health Related Behaviors Among Military Personnel). The prevalence of
    heavy drinking is strikingly high for each of the services: Air Force,
    10.3 percent; Army, 18.0 percent; Navy, 18.8 percent; and Marine Corps,
    27.8 percent. For personnel in the E1-E3 pay grades, there were high
    rates of serious consequences (16.9 percent), productivity loss (24.5
    percent), and dependence symptoms (11.8 percent). These patterns of
    alcohol abuse, which are acquired in the military, persist in the
    veterans population. Alcoholism is one of the most common illnesses
    found among hospitalized veterans.
        In the civilian population, alcohol is a factor in 50 percent of
    all homicides, 40 percent of motor vehicle fatalities, 30 percent of
    all suicides, and 30 percent of all accidental deaths. Projecting these
    figures into the military population suggests that heavy drinking could
    significantly compromise the military's effectiveness as a fighting
    force. In 1990, 23 percent of deaths in the U.S. Air Force were related
    to alcohol.
        Many talented and dedicated people in the Department of Defense are
    working hard to reduce heavy drinking in the military, but current
    prevention and treatment programs are simply not good enough. Research
    holds the promise of developing more effective prevention programs and
    new and better methods for the treatment of alcoholism. Unfortunately,
    alcohol research, which is conducted primarily at the National
    Institute on Alcohol Abuse and Alcoholism (NIAAA) at the National
    Institutes of Health and in the Department of Veterans Affairs (DVA),
    is severely underfunded. Moreover, neither NIAAA nor the VA focus their
    research on prevention and treatment approaches that are specific to
    the needs of the military. Little attention has been paid to how the
    culture of the military contributes to high rates of problem drinking.
    Little is known about how prevention measures should be implemented in
    this unique social context. The Research Society on Alcoholism urges
    that the Department of Defense fund research into the causes,
    consequences, prevention, and treatment of alcohol abuse and
    alcoholism.
        While the high rates of use and abuse of alcohol in the military
    are alarming, the good news is that we are poised at a time of
    unprecedented opportunities in alcohol research. Scientists are
    exploring new ways to prevent alcohol-associated accidents and
    violence, and prevention trials are developing methods to address
    problem use. For the first time scientists have identified discrete
    regions of the human genome that contribute to the inheritance of
    alcoholism. Genetic research will accelerate the rational design of
    drugs to treat alcoholism and improve our understanding of the
    interaction between heredity and environment in the development of
    alcoholism. The field of neuroscience is another promising area of
    alcohol research. The development of more effective drug therapies for
    alcoholism requires an improved understanding of how alcohol changes
    brain function to produce craving, loss of control, tolerance, and the
    alcohol withdrawal syndrome. This knowledge is starting to bear fruit.
    Naltrexone, a drug that blocks the brain's natural opiates, reduces
    craving for alcohol and helps maintain abstinence. Ongoing clinical
    trials will help determine which patients benefit most from naltrexone
    and how the drug can best be used. Another promising drug, acamprosate,
    has proven effective in European trials and is undergoing evaluation in
    the United States. The military needs to be part of this effort.
        Alcohol abuse and alcoholism are devastating problems of national
    importance. Men, women, and children paralyzed in car accidents caused
    by drunk drivers, accomplished individuals who will never remember
    another new experience because of alcohol-related brain damage,
    children who grow up in homes with abusive alcoholic parents. These are
    some of the tragic consequences of drinking that we must prevent and
    treat.
        Alcohol research has now reached a critical juncture, and the
    scientific opportunities are numerous. With the support of this
    subcommittee and the Congress, we believe that we can produce
    significant advances in alcohol research and aid in understanding and
    reducing the problem of alcoholism and alcohol abuse in the military.
        Recommendation: The Research Society on Alcoholism urges that $10
    million be allocated to research on alcoholism. These funds could be
    administered by the Department of Defense alone or jointly with the VA
    and NIAAA. This request balances the increased morbidity, mortality,
    lost productivity, accidents, and an overall reduction in readiness
    caused by the high rate of alcoholism in the military with the
    abundance of research opportunities which will prevent and abet the
    consequences of alcoholism.
                                     ______

              Prepared Statement of the Optical Society of America
        This testimony is submitted for the record on behalf of OSA, a
    scientific and professional organization of over 12,000 optical
    scientists and engineers. OSA's members, who include many of the
    world's most distinguished optical scientists and engineers, conduct
    leading-edge research in areas crucial to national security. We have
    noted with alarm the eroding support for the science and technology
    program (S&T Program) at the Department of Defense (DOD), and are
    concerned about the long-term implications for maintaining a
    technologically superior force; a technical work force essential for
    the military; and support for critical fields such as mathematics,
    engineering and computer science.
    Defense Science and Technology Base
        ``We must prepare for the future. We must invest in the next
    generation of weapons and technology if we are to maintain our ability
    to shape and respond to world events in the 21st century.'' Defense
    Secretary William Cohen, Feb. 1999
        The S&T Program, 6.1 (Basic Research), 6.2 (Applied Research) and
    6.3 (Advanced Technology Development), supports the scientific and
    engineering research which led to the advanced technology that has
    produced today's preeminent U.S. defense forces. This decisive edge was
    demonstrated in Desert Storm and other recent peacekeeping missions. It
    is the continued investment in DOD's S&T Program that will maintain
    this superior force for the 21st century.
        The funds in 6.1 support the basic research in the nation's
    universities that is essential to maintaining a technologically
    superior U.S. defense force. Unlike the support for university research
    from the National Science Foundation, the Department of Energy and
    NASA--DOD support focuses on engineering sciences that are the bridge
    between fundamental science discoveries and future military
    applications.
        DOD support was critical for the research conducted by Dr. Charles
    Townes at Columbia University that led to the development of the laser.
    Laser technology has enabled such military applications as precision
    laser-guided targeting--seen during Desert Storm--and has produced both
    the fiber-optics revolution and the rise of the telecommunications
    industry.
        The 6.2 and 6.3 programs fund the DOD laboratories, and private
    sector industries that focus on technologies to support future DOD
    systems. These critical technologies include sensors, electronics, and
    computer hardware and software. The 6.2 and 6.3 programs are
    increasingly important to DOD since they focus on longer-term
    revolutionary changes in military technology--unlike industrial applied
    research programs that are increasingly focused on incremental, market-
    oriented technology improvements. It is the revolutionary, or paradigm
    shifting, changes in military technology that will keep U.S. forces
    ahead of foreign competitors and enable a quick response to emerging
    threats such as chemical and biological agents.
        The Army Research Laboratory (ARL) conducts applied research to
    extend the senses and reach of the soldier. ARL was instrumental in the
    development of night vision technology that has dramatically enhanced
    war-fighting capabilities and given U.S. military forces the ability to
    ``own the night.'' ARL is also responsible for the development of
    technologies that will allow soldiers in the field to identify
    camouflaged enemy vehicles and structures, and which allow
    sophisticated recognition of friend and foe in battle conditions.
        DOD support of university research also plays a critical role in
    sustaining those disciplines where it is a major source of federal
    funding. These disciplines (below) make essential contributions to the
    national defense and civilian economy by fueling innovation and
    providing highly skilled, technical workers.

                                                          Percent University
                                                                    Research
            Discipline                                      Supported by DOD

    Physics...........................................................    12
    Mathematics.......................................................    27
    Computer Science..................................................    60
    Electrical Engineering............................................    70

    Source: Science and Engineering Indicators, 1998.

        The support of university research advances the body of scientific
    and engineering knowledge that is critical to DOD's technological
    superiority and produces the future scientists and engineers that DOD
    and industry will need to compete in the 21st century.
        For these reasons, the continued decline in the S&T Program is of
    concern to OSA. The President's fiscal year 2000 request for the
    Department of Defense continues the precipitous slide that began in the
    late 1980's. This is particularly apparent in the 6.2 and 6.3 accounts
    that would decrease by over 6 percent in fiscal year 2000.
        The long-term decline in the 6.1, 6.2 and 6.3 programs produced
    enough concern for the Under Secretary of Defense for Acquisition and
    Technology, to request the Defense Science Board (DSB) to establish a
    Task Force in the spring of 1997, to recommend a strategy to assure an
    appropriate science and technology base. In the letter charging the DSB
    with the task, the Under Secretary states, ``U.S. military strategy
    calls for the use of superior technology as one critical enabling
    component of military strategy. You are requested to establish a
    Defense Science Board (DSB) Task Force to address the issues involved
    in assuring that the U.S. has adequate technology base from which to
    develop sustained military superiority for the 21st century * * *.''
        A year and a half later the Report of the Defense Science Board
    Task Force on Defense Science and Technology Base for the 21st Century
    was delivered to the Under Secretary. One of the report's major
    recommendations stated, ``That the Deputy Secretary of Defense insure
    the future superiority of U.S. military forces by increasing the
    funding for the Department's Science and Technology Program to $8
    billion per year.''
        The Task Force came to this conclusion after carefully studying
    several factors. First, the Task Force examined a model of the impact
    of DOD's S&T base on national security that clearly demonstrated the
    strong influence the U.S. technology base has on long-term military
    balance-of-power. In the past, this technology base was a product of
    both DOD and civilian S&T investment. The report notes, however: ``A
    key point is that the civil-sector S&T investment by U.S. firms (and
    foreign firms) is becoming global--that is, there is leakage from the
    U.S. civil sector to assist foreign military capabilities. Thus, the
    primary investment applicable to providing unique U.S. military future
    capabilities comes from the DOD S&T component [italics added].''
        Second, the DSB Task Force examined the optimum level of DOD
    investment in the S&T Program by drawing comparisons with industries
    whose competitive environment most mirrors the unique requirements of
    the military. The report concluded that pharmaceuticals and leading
    computer technology industries, for a variety of reasons, would be a
    good basis of comparison for investments in R&D. By looking at the
    percentage of revenues invested in research and development by these
    industries, 15 percent, the Task Force concluded that DOD should be
    spending at least $8 billion in order to insure the continued long-term
    technical superiority of U.S. military forces in the 21st century.
        OSA agrees with the recommendation in the DSB Task Force report and
    urges the Subcommittee to increase the S&T Program funding (6.1, 6.2
    and 6.3) from the requested fiscal year 2000 level of $7.4 billion, to
    at least $8 billion--a 2.6 percent increase over the current fiscal
    year 1999 funding level.
    Optical Science and Engineering--Protecting the Future
        The critical nature of DOD's support for its science and technology
    base can be illustrated by looking at the considerable contributions of
    optical science and engineering to national security. These current--
    and potential--contributions are enumerated in the National Research
    Council (NRC) report Harnessing Light: Optical Science and Engineering
    for the 21st Century. This 1998 report is a comprehensive review of
    optical science and engineering that assessed the field's contribution
    to meeting national needs--including national security.
        According to Harnessing Light, DOD support of optical science and
    engineering has revolutionized the modern battlefield by:
      --Increasing by orders of magnitude U.S. surveillance capability;
      --Fueling the development of night vision technologies;
      --Deploying laser systems that operate in the atmosphere and in space
            for applications such as range finders and laser-guided
            weapons;
      --Developing fiber-optic systems that greatly enhance inertial
            navigation sensors and ground-based communication;
      --Allowing long-range detection of chemical and biological threats
            and underwater mines; and
      --Producing displays that revolutionized the acquisition, processing
            and distribution of information under battle condition.
        ``An airborne system is in active development that would intercept
    tactical ballistic missiles such as Scuds during their boost phase and
    blow them up via laser heating. This is an important deterrent since
    the munitions would be destroyed over enemy territory''. Harnessing
    Light, 1998
        Harnessing Light documents the critical need to enhance and ensure
    the future contributions of optical science and engineering to our
    nation's defense. OSA has joined other members of the Coalition for
    Photonics and Optics (CPO) in endorsing this report, and we urge the
    Subcommittee to consider the following recommendation as they examine
    the fiscal year 2000 request for DOD's Science and Technology Program:
      --DOD should ensure the existence of domestic optics manufacturing
            infrastructure by supporting DARPA-university-industry
            consortia, such as the current program on conformal optics.
      --A central, coordinated DOD-Department of Energy (DOE) plan should
            be developed to enable worldwide optical detection and
            verification of chemical and biological threats to civilian and
            military personnel.
      --A central, coordinated DOD-NASA plan should be developed to enable
            future technology in space-based optics.
      --DOD should continue to pursue key technologies such as high-power
            lasers and optical imaging systems.
    Summary and Recommendations
        All of the above recommendations depend on stable, long-term
    support for the 6.1, 6.2, and 6.3 programs. The research supported by
    these programs is threatened by wide fluctuations in funding and the
    consequent inability to plan multiyear research projects; and, by
    dramatic decreases in already appropriated funds to pay for
    unanticipated foreign peacekeeping missions such as Bosnia. Stable
    funding is also difficult to maintain when DOD's research accounts are
    viewed as a ``bank'' where funds can be withdrawn for use in other
    activities, but not reinvested. This happens both through redirection
    of funds to non-research projects and through redefining projects as
    research which actually involve little or no research.
        OSA recognizes the many important priorities that must be
    considered in formulating defense policy and the consequent budget
    priorities. We are especially mindful of current Congressional concerns
    about defense personnel--their recruitment, training, and retention.
    Indeed, this has become a crisis situation in the hiring and retention
    of the skilled, technical workforce needed to operate the DOD
    laboratories. For instance, current civil-service hiring rules have
    made it almost impossible for the labs to hire the best-qualified
    candidates for open positions, or promote those who most deserve it.
    This has had a devastating effect on the labs, as has the relatively
    low salaries that can be offered for technical personnel (compared with
    the private sector).
        In the face of these daunting problems, however, we ask the
    Subcommittee to keep in mind the ultimate goal of the DOD's S&T
    program--the development of a technically superior force that acts as a
    deterrent and mitigates losses on the battlefield.
                                     ______

      Prepared Statement of the American Society of Tropical Medicine and
                                    Hygiene
        Mr. Chairman and members of the Committee, the American Society of
    Tropical Medicine and Hygiene (ASTMH) appreciates the opportunity to
    submit for the record its fiscal year 2000 funding priorities.
        ASTMH is a professional society of 3,500 researchers and
    practitioners dedicated to the prevention and treatment of infectious
    and tropical infectious diseases. The collective expertise of our
    members is in the areas of basic molecular science, medicine, vector
    control, epidemiology, and public health. ASTMH has had the privilege
    of testifying before this Subcommittee on several occasions, and we
    hope that our recommendations are helpful to you in determining the
    annual funding levels for DOD's infectious disease research programs.
        DOD medical research programs play a critical role in our nation's
    infectious disease efforts. Furthermore, the programs are vitally
    important to maintain the health of our troops in the theater. Working
    with other U.S. public health agencies, DOD scientists at the U.S. Army
    Research Institute for Infectious Diseases (USAMRIID), the Walter Reed
    Army Institute of Research (WRAIR), the U.S. Naval Medical Research
    Institute (NMRI), and in DOD medical laboratories abroad are helping us
    to better understand, diagnose, and treat infectious and tropical
    diseases such as malaria, AIDS, dengue fever, leishmaniasis, yellow
    fever, cholera, and diarrheal diseases.
        ASTMH appreciates past congressional support for military
    infectious diseases research. In particular, this is the year in which
    the long awaited new WRAIR will open in Forest Glen, Maryland. This
    outstanding laboratory facility will be the focus of tropical medicine
    research conducted by the military in its overseas laboratories. It
    will be staffed by military and civilian experts in tropical medicine
    and will be the focal point for tropical disease research conducted in
    the DOD's overseas laboratories.
        In support of its unique role in the defense of the country, the
    DOD has been a leader in infectious disease research. Much of this
    research has been vital for the successful outcome of military
    campaigns. Studies conducted by Major Walter Reed, which demonstrated
    the mosquito transmission of yellow fever, contributed directly to the
    successful completion of the Panama Canal.
        This tradition of highly applied and immediately effective
    infectious diseases research and development continues. In several
    areas, programs in the military infectious diseases research program
    are vital for national defense and global health. These programs
    include clearly focused and highly successful efforts to develop
    vaccines for malaria, travelers diarrhea, dengue, hepatitis E,
    hantaviruses, and group B meningococcal disease. The military malaria
    drug development effort is the only such program of its kind in the
    world. Indeed, virtually all of the important discoveries in malaria
    drugs have resulted from the efforts of this program. Every American
    tourist or visitor who is prescribed preventive drugs for malaria is
    benefitting from DOD research.
        Recent notable advances accomplished by military experts in
    tropical diseases working with corporate partners include the invention
    of hepatitis A vaccine at WRAIR and its ultimate licensure based on
    studies conducted at the U.S. Armed Forces Research Institute of
    Medical Sciences (AFRIMS), the licensure of Japanese encephalitis
    vaccine, based on studies conducted at AFRIMS and WRAIR, and the
    discovery and licensure of mefloquine and halofantrine for treatment
    and prevention of malaria. WRAIR scientists recently reported the first
    successful cultivation of vivax malaria. A significant accomplishment
    recently made by military scientists at WRAIR and their corporate
    partners is the discovery of the first prototype vaccine shown to be
    capable of preventing falciparum malaria. Novel vaccines, such as a DNA
    vaccine for malaria, are being developed under the leadership of DOD
    scientists who will soon move into the new WRAIR facility. Licenses
    have been requested or will soon be requested for two new malaria
    drugs, Malarone and Tafenaquine. With the certainty that resistance to
    malaria drugs quickly appears, these drugs have a useful lifespan of
    only about 10 years. Replacements must be sought continually.
        The DOD investment in malaria vaccine development is not only good
    public health policy, but it also makes good sense from an economic
    standpoint. Malaria is estimated to cause up to 500 million clinical
    cases and up to 2.7 million deaths each year, representing 4 percent to
    5 percent of all fatalities. Malaria affects 2.4 billion people, or
    about 40 percent of the world's population. Tragically, every 30
    seconds a child somewhere dies of malaria. Malaria causes an enormous
    burden of disease in Africa and is considered a primary cause of
    poverty.
        ASTMH is concerned that the military program in tropical diseases
    research is the target of budget cuts and staff reductions. These cuts
    seriously compromise our ability to discover the products that protect
    American soldiers and citizens at home and abroad, and improve global
    health and economic stability in developing countries. The total
    infectious diseases research program budget in fiscal year 1998 was $44
    million. In fiscal year 1999 this budget was cut by $4 million,
    resulting in a total budget of $40 million. Funding for advanced
    testing of new tropical diseases products has been cut in half over
    recent years. Furthermore, inadequate funding levels for DOD basic
    research directly affects important vaccine and drug development work.
    Cutting these funds cripples the scientific base from which applied
    discoveries are drawn.
        ASTMH is further concerned that the DOD military budget for HIV
    research was cut by over 40 percent in fiscal year 1999, from a level
    of $38 million in fiscal year 1998 to the current funding level of $20
    million. This funding supports important vaccine research, therapeutic
    trials studying drug protocols and drug resistance, and epidemiology
    and surveillance activities. The reductions in the fiscal year 1999
    budget will delay important clinical trials which will setback the
    search for a preventive HIV vaccine.
        Perhaps even more important than funding reductions, DOD downsizing
    and restrictions on hiring has been coupled with competition for scarce
    medical officers in clinical assignments and retirements. The result is
    a serious erosion in the active duty and civilian investigator
    expertise in tropical diseases in the military.
        The ASTMH believes the military's overseas laboratories also
    deserve special mention. The U.S. Army and the Navy currently support
    six overseas laboratories in Thailand, Indonesia, Egypt, Brazil, Kenya,
    and Peru. These labs are strategically located in regions of the world
    where the threat from existing and emerging infectious and tropical
    diseases is the greatest. They serve as critical sentinel stations
    alerting both the military and public health agencies to dangerous
    infectious disease outbreaks and increasing microbial resistance.
    Because they are located close to the source, laboratory personnel can
    be mobilized to respond quickly to potential problems.
        The military's overseas laboratories also play an important role in
    collaboration with U.S. research institutions including academia,
    industry, and government agencies. Having the fixed facilities, field
    sites, and staff makes it possible to maximize our infectious and
    tropical disease research efforts. These collaborations are important
    not only for expanding our knowledge and understanding of infectious
    diseases, but also for providing hands-on training for students,
    investigators, and local health authorities. In many cases, these sites
    have ensured that productive projects could be carried out.
    Collaborations between the Walter Reed Research Unit in Rio de Janeiro,
    Harvard School of Public Health scientists, the Naval Medical Research
    Institute detachment in Lima, Peru, and the University of Texas at
    Galveston School of Medicine has resulted in important advances in
    malaria research and in improved international infectious disease
    surveillance capabilities.
        Conclusion: ASTMH requests your strong support for the DOD
    Infectious Diseases Research programs. Our nation's commitment to this
    research is critically important given the resurgent and emerging
    infectious disease threats which exist today. The DOD programs are
    essential to advancing our war on infectious diseases to protect
    American military forces and civilians at home and abroad. As the
    world's only superpower and the global leader in biomedical research,
    the United States has an obligation to lead the fight against
    infectious disease. Our efforts in this area will lead to improved
    global health and the economic stability of developing nations.
        ASTMH urges Congress to make infectious disease research a priority
    in fiscal year 2000 by increasing the DOD tropical infectious disease
    research budget by $20 million, and providing an additional $20 million
    for HIV vaccine development. We also request an additional $10 million
    be allocated to support DOD basic research into the microbiology of
    tropical diseases.
        As we have indicated, there are many areas of unmet need and
    scientific opportunity that warrant a continued strong national
    commitment to this important DOD activity. Failure to act now will only
    result in increased health care costs and threaten future troop
    deployments.
        Thank you for the opportunity to present our views and for your
    consideration.
                                     ______

    Prepared Statement of Charles L. Calkins, National Executive Secretary,
                           Fleet Reserve Association
                                  introduction
        Mr. Chairman. The Fleet Reserve Association (FRA) thanks you for
    the opportunity to present its views on the fiscal year 2000 budget for
    the Department of Defense. The Association's nearly 155,000 members
    also extend their appreciation to all members of your distinguished
    Subcommittee.
        The role of the FRA, the oldest and largest of the enlisted
    military service organizations, has been constant for 75 years--to be
    the spokesman for the enlisted men and women of the Sea Services--the
    Navy, Marine Corps, and Coast Guard. The Association counts as its
    members those serving on active duty, in the reserve, or retired after
    completing the required number of years in the uniform of one of those
    three services. FRA is particularly proud that it has been in the
    forefront in initiating and supporting legislation beneficial to the
    well-being of the Nation's Sailors, Marines, and Coast Guard personnel.
    Among its major legislative accomplishments are the Civilian Health and
    Medical Program for the Uniformed Services (CHAMPUS)--now being
    replaced with the military's Tricare System--and the Uniformed Services
    Survivor Benefit Plan (USSBP). This past year, FRA took the lead in the
    campaign to repeal REDUX, the so-called 1986 ``reform'' of the military
    retirement system.
        FRA's pride in its service to the Nation and the Sea Services is
    paled in comparison to the work of this Subcommittee. It has remained
    four-square in support of quality of life programs so essential in
    maintaining morale and readiness among the men and women in the Armed
    Forces. The Association thanks and commends the Subcommittee for a job
    well done.
     the soldiers', sailors', airmen's and marines' bill of rights act of
                                      1999
        In anticipation of consideration of provisions of Senate bill, S.
    4, ``The Soldiers', Sailors', Airmen's and Marines' Bill of Rights Act
    of 1999,'' the Association has taken the liberty of offering its views
    on the proposals therein.
        FRA has not listed all of the provisions adopted by the Senate in
    its bill. Many of the proposals have the Association's full endorsement
    and others do not. The following titled sections provide specifics.
                                     redux
        Of particular interest to the Association is the repeal of the 1986
    Military Retirement Reform Act (MRRA), also known as ``REDUX.'' FRA was
    the first military service organization to accept the challenge of
    seeking congressional support for repealing the law. It prepared and
    disseminated correspondence and ``Repeal REDUX'' brochures to selected
    members of the House and Senate. It visited congressional offices and
    found willing ``torch bearers'' in Representative Owen Pickett and
    Senator Pat Roberts. Each introduced a ``Repeal REDUX'' resolution near
    the end of the 105th Congress. In addition, they were followed by the
    distinguished Ranking Member of the House Defense Appropriations
    Subcommittee, Representative John Murtha, who made a valiant but
    unsuccessful effort in the last weeks of the 105th Congress to resolve
    the issue. FRA is indebted to these three gentlemen, their cosponsors
    and supporters.
        REDUX is the worst of the military's three retirement systems.
    Without going into considerable detail it suffices to say that the men
    and women of the uniformed services who retire under REDUX will receive
    an estimated 24 to 25 percent less than their counterparts retiring
    under the post-WW II program referenced by most as ``Final Pay.'' REDUX
    was enacted in 1986 for the primary purpose of providing funds for the
    Department of Defense Military Retirement Fund, but heralded by its
    sponsors as a means to end early 20-year retirements. Although all the
    major military service organizations, and the Secretary of Defense,
    opposed further change in retirement plans, the proposal sailed through
    both the House and Senate.
        As predicted, REDUX turned out to be a loser. By 1998, uniformed
    service members who entered the military between 1986 and 1990, under
    the REDUX system, were approaching 8 to 12 years of active service. It
    would soon be time to consider the future, time to think of what was
    out there for them if they decided on a 20-year career. They suddenly
    understood the hard, cold fact that their retirement pay wasn't in the
    same ball park as that of their shipmates whose duties corresponded
    with theirs and who were of the same pay grade. The only difference was
    the date of entry in the uniformed services, perhaps no more than a
    day.
        It wasn't long before the military services realized that there was
    more to the downsizing in military manpower strengths than Congress had
    mandated. Some of their top mid-level officers and noncommissioned and
    petty officers were also departing. The reasons for leaving were
    staggering and ranged from better jobs on the outside to family
    considerations. In between were complaints of poor leadership, high
    optempo, antiquated working facilities, inadequate pay, insufficient
    spare parts, aging equipment, not enough training dollars, lack of
    personnel, and the list goes on. But overall, the major complaint among
    service members with 8 to 12 years of service was the REDUX retirement
    plan.
        The complaints caught the attention of FRA. Members of the
    Association's staff then visited Navy, Marine Corps, and Coast Guard
    installations. They were able to verify that REDUX was the cause for a
    sufficient number of Sea Service personnel to opt for separation rather
    than stay in uniform. A concerned FRA moved quickly to conduct a survey
    among the Sea Services to confirm the validity of the complaints. The
    result, tabulated over a six month period, found that 64 percent of the
    active duty respondents indicated that REDUX would have a negative
    affect on their decisions to reenlist.
        There is no doubt that there are many adversities plaguing today's
    service members. A Rand study recommends pay increases and bonuses to
    correct the problem of sliding retention rates. Others may point to
    housing, family stress, optempos, etc., but when the time arrives for
    the individual to extend his or her time in uniform, benefits at the
    end of the retirement rainbow will be the final measure of influence.
        Mr. Chairman. FRA recommends that appropriations be granted for the
    purpose of totally repealing the REDUX plan.
                               pay and allowances
        FRA is elated that Congress is taking the ``bull by the horns'' to
    increase the pay of military personnel. The Administration's request
    for a 4.4 percent pay hike is welcome, but a 4.8 percent increase is
    much better because it offers some headway in making military pay more
    comparable to that received by the military's civilian counterparts.
    FRA supports the 4.8 percent pay hike and urges this Subcommittee to
    appropriate sufficient funds to pay for the increase.
        The Association also endorses a ``targeted'' pay raise for
    noncommissioned and petty officers in the grades of E4 and above.
    Recently, Charles Moskos, noted military sociologist, wrote that: ``Pay
    raises should be focused on the career force, not on the lower enlisted
    grades.'' He went on to note that in the era of the draft, the pay
    ratio of a master sergeant (MSGT) or chief petty officer (CPO) and a
    private (PVT) or seaman (SN) was seven to one. Today, it's three to
    one.
        Moskos' recent article raising this disparity in pay among the
    enlisted grades supports the FRA effort over the past few years to
    bring the matter to the attention of this Subcommittee and others
    having authority over military pay. His 7:1 ratio between a MSGT/CPO
    (Pay Grade E7) and a PVT/SN (Pay Grade E1) must relate to the full
    compensation package of both pay grades. FRA has compared only basic
    pay finding that in the draft era, an E7 with 14 years of service
    earned about $4.20 for every $1.00 paid the E1. Since then the E-7's
    pay has declined 43 percent earning only $2.40 for every dollar the E1
    receives. (See chart.)

    Pay ratio chart

                           (To the Nearest .1 percent)

            Time period                                    E7 (14 YOS) to E1

    Pre-AVF........................................................... 4.2:1
    Pre-Fiscal Year 1982.............................................. 2.3:1
    Target Pay Raise, Fiscal Year 1982................................ 2.4:1
    Current, 1999..................................................... 2.4:1

        On the lower side of the targeted pay equation, the Subcommittee's
    further attention is directed to the pay of an E3 and an E4. When the
    E3 is promoted to that grade, the fiscal year 1999 pay differential
    between what was earned as an E2 and what will be received as an E3 is
    $150. Yet, the E3 for the most, will not gain any more authority than
    given at the junior grade of E2. The E4, however, becomes a
    noncommissioned or petty officer upon the attainment of that grade. His
    authority is upgraded considerably and he becomes responsible for those
    under his supervision. His net gain of dollars is two-thirds ($100) of
    what the E-3 earns upon promotion to that grade.
        The situation is further aggravated in the proposed basic pay
    reform in S. 4. (See Chart below.)

      MONTHLY BASIC PAY FOR PROMOTED E3S AND E4S UNDER CURRENT AND PROPOSED
                                      RATES
    ------------------------------------------------------------------------
                                                               PROPOSED PAY
                    PAY GRADE                 1999 PAY TABLE   REFORM (S. 4)
    ------------------------------------------------------------------------
    E4......................................   \1\ $1,326.60   \2\ $1,447.20
    E3......................................    \3\ 1,225.80    \4\ 1,334.10
    E2......................................        1,075.80        1,127.40
    ------------------------------------------------------------------------
    \1\ $100.80 more than E3.
    \2\ $113.10 more than E3.
    \3\ $150.00 more than E2.
    \4\ $206.70 more than E2.

        Mr. Chairman, FRA recommends that the Subcommittee adopt pay reform
    that targets increases to the men and women who shoulder the bulk of
    training, leading and supervising the enlisted force, those in pay
    grades E4 through E9. Their pay has been compressed in order to provide
    more for the junior enlisted grades. It's time for this distinguished
    Subcommittee to again take the lead to provide a target pay raise for
    noncommissioned and petty officers. If pay reform is authorized and
    funded, FRA suggests that the dollar amounts as recommended in S. 4 not
    be set in concrete so that situations such as that now existing in the
    pay differential between promotions to E3 and to E4 be amended in favor
    of the E4. FRA will be willing to work with your staff in developing
    new basic pay rates for the enlisted grades.
            special subsistence allowances for food stamp recipients
        FRA is opposed to the provision in S. 4 that provides a special
    allowance for service members who are recipients of food stamps. The
    Association is joined by the senior enlisted chiefs of the Sea Services
    in urging Congress not to authorize such an allowance. It gives a
    black-eye to the Armed Forces who are doing all they can to take care
    of their own. Much of the problem causing service members to apply for
    food stamps can be traced back to the service members themselves. They
    are not really destitute but they fail to live within their budgets.
    Further, most service families using food stamps would be ineligible if
    they had to report the in-kind value of their base housing.
        A DOD study reported in the Navy Times of September 7, 1998, found
    that only 451 out of 1.4 million service members are at or below the
    poverty level. To qualify for food stamps a Seaman/Private, Pay Grade
    E1, with less than four months, must have a family size of five.
        Another 1987 study by Rand, sponsored by DOD's Office of Family
    Policy, and reported in the Navy Times of October 19, 1998, found that
    among young enlisted service members, there's a ``relatively
    significant financial management problem.'' It noted that 27 percent of
    the group surveyed had difficulty paying bills. 31 percent of Marines
    are more likely to have financial problems; 28 percent of Sailors. 21
    percent said they had been pressured to pay past due bills while 9
    percent had pawned valuables ``to make ends meet.'' The senior enlisted
    chiefs of the Navy and Coast Guard have personally assured FRA that
    their experiences prove that, except for a few, their members on food
    stamps are financially irresponsible. To assist in correcting the
    problem, the Services are expanding classes to include budgeting,
    managing finances and checkbooks, and planning for the future. FRA
    believes the Services can take care of their own.
        Mr. Chairman, it is most gracious of the sponsors of this provision
    to wish to provide a subsistence allowance to the few service members
    on food stamps but, is it fair to increase the pay and allowances of
    junior personnel so that they earn more money than their superiors? FRA
    believes not and urges this Subcommittee to reject such a proposal.
                                      mgib
        There is little doubt that the Montgomery GI Bill (MGIB) requires
    improvement. FRA agrees with those who suggest that enhanced benefits
    in the MGIB may increase its use by service members separating from the
    military and, as predicted by the Commission on Servicemembers and
    Veterans' Transition Assistance, ``* * * a more financially attractive
    MGIB could enable our Nation to fully capitalize on the unique national
    resource of veterans' skills, training, experience, and character.''
        FRA does not agree with the provision in S. 4 that would authorize
    all veterans participating in the MGIB to transfer the entitlement to a
    member of the immediate family. Instead, FRA recommends that this
    proposal, if agreed to, should be used as an incentive to reenlist for
    a career in the uniformed services. For example, if a service member
    reenlists for a second four-year period and sufficient successive terms
    to complete a minimum of 20 years of active duty, unless separated
    earlier for reason of disability, he or she only would have the option
    to transfer the entitlement to a spouse or child, or combination
    thereof.
        While on the subject of education, FRA urges the Subcommittee to
    appropriate funds to increase tuition assistance for members of the
    Armed Forces deployed in support of a contingency or similar
    operations. It also supports any and all efforts to enhance education
    programs for enlisted service members.
                            bonuses and special pays
        FRA has no objection to the increases and extensions of bonuses and
    special pays recommended in the Senate bill, S. 4. It does; however,
    question the absence of increases to Sea Duty Pay and Submarine Duty
    Incentive Pay. The last increases to the two special pays were
    authorized some 10 years ago. With the number of deployments required
    of the Navy, nearly twice the number during the six years of the
    Clinton Administration compared to the eight years of the Reagan
    Presidency, it behooves Congress to take a look at addressing
    enhancements to both programs. With fewer personnel, the Navy must
    order greater numbers of experienced sailors to sea duty. Without a
    more substantial reward for serving at sea for longer periods of time
    there's a possibility of lower future retention rates than the Navy is
    suffering at this time.
        Last year, FRA urged the Subcommittee to review the possibility of
    providing a type of cash allowance for junior enlisted Sailors assigned
    to sea duty; however, the recommendation hinged on the availability of
    additional funds to inaugurate the program. Although the Association
    continues to believe this special pay allowance will be of value to the
    Navy, it concedes that the need for the repeal of REDUX and an overall
    pay raise must take priority.
        FRA recommends that the Subcommittee review the rates of Sea Duty
    and Submarine Duty Incentive Pays and consider establishing higher
    rates to cover the cost-of-living increases over the past decade.
                              thrift savings plan
        Although FRA earlier had some reservations concerning the Thrift
    Savings Plan (see last year's statement), the senior enlisted chiefs of
    the Navy and Coast Guard have assured the Association that it will be a
    plus for their members. FRA, therefore, recommends that the
    Subcommittee endorse the Plan. The Association would be more
    enthusiastic for the Plan's adoption if the Federal government provided
    matching funds.
          improvement of tricare program and other health care issues
        The Association is four-square in support of improving the Tricare
    Program. Not only is FRA the recipient of numerous complaints from its
    members and other Sea Service personnel, but personal contact with a
    broad audience of senior Marine noncommissioned officers has proved
    that the Tricare program requires significant improvements. In response
    to the latter, FRA polled two subsequent groups and found that the
    majority rate Tricare as ``poor.''
        For most if not all the challenges in improving Tricare and other
    health care issues available to military beneficiaries, including
    pharmaceuticals, FRA invites the Subcommittee's members to review the
    recent statement of The Military Coalition as to what actions are
    necessary to make the system well. The Association will be pleased to
    provide a copy upon request. FRA, by the way, is a ``charter'' member
    of the Coalition and fully supports its health care initiatives.
                              miscellaneous issues
        Mr. Chairman, the following issues or programs are included in the
    Association's legislative agenda for 1999. Assuming that funds are made
    available above and beyond the cost of repealing REDUX, providing a 4.8
    percent pay hike, and the July 1, 2000 pay reform, FRA urges your
    distinguished Subcommittee to consider appropriations for the programs
    listed.
        Survivor Benefit Plan.--The plan needs the attention of this
    Subcommittee and others that have oversight authority in amending and
    providing funds for the program. First, the authority to terminate
    premiums payable to the plan in the year 2008 shall be amended to read
    2003. The change will allow members who have participated in the plan
    since its enactment in 1972, to become eligible for the waiver of
    premiums. Second, to increase the minimum post-62 SBP annuity from 35
    percent to 40 percent of the service member's SBP covered retired pay,
    and further provide incremental raises in the future to match the
    benefit level accorded survivors under the Federal Employees Retirement
    System. Third, to reevaluate the tax provision as it applies to the
    receipt of annuities by minor children. Currently, the tax on the
    annuity, particularly if its augmented by Social Security payments, is
    devastating.
        There should be no objection to providing funds for these
    enhancements. The government's promise of a 40 percent share of the
    costs has dropped to about 28 percent over the past years. As a result,
    participants are paying a heavier premium to make up for the funds the
    government is shirking.
        Personnel Strengths.--The challenges facing the Armed Forces in
    attaining their recruiting and retention goals, the increase in
    optempo, and family pressures demand that there be no further
    downsizing of military uniformed strengths. Although it goes without
    saying, no funds should be provided to the military services to reduce
    their military strengths below that appropriated for fiscal year 1999.
    Further, the Association requests that a careful review of funding for
    military operations be undertaken by Congress. The number of operations
    must coincide with the military manpower available to deploy--
    preferably for no more than six months of every 18 month period.
        Basic Allowance for Subsistence (BAS).--Two years ago, Congress
    enacted an Administration proposal to cap future BAS annual increases
    at one percent. The result has and will continue to depress needed rate
    increases for enlisted personnel, some of whom are on food stamps.
    Congress should readdress this issue and possibly look at changing the
    allowance to an increase in basic pay. This would ease the financial
    penalties on BAS-eligibles while according unmarried personnel
    additional funds in lieu of a partial BAS.
        Commissaries.--FRA recommends the appropriation of adequate funds
    to preserve the value of the commissary benefit for all eligible
    beneficiaries.
        Impact Aid.--The Defense Subcommittee has been most generous in
    providing some funds for school districts impacted with dependent
    children of military personnel. FRA appreciates the generosity and
    urges the Subcommittee to continue appropriating funds to be available
    for payments to heavily military impacted school districts.
        Transition Assistance (TAP) and Relocation Programs.--The recent
    report of the Commission on Servicemembers and Veterans Transition
    Assistance recommended not only the continued operation of the
    military's Transition Assistance Program, but that it be enhanced to
    better serve members returning to a civilian environment after years of
    military service. FRA has been a proponent of TAP for years and
    believes it to be invaluable in assisting service members in job
    assistance and other need-to-know services and programs available to
    veterans. The Association urges its continued funding along with that
    of the Relocation Program. The latter also is invaluable in the
    welcoming of service members and families to unfamiliar military
    installations. The program saves considerable man-hours that would
    normally be used by the members and families in acquainting themselves
    with the locale and the installation's many available services.
        Concurrent Receipt.--FRA continues to support concurrent receipt of
    both military non-disability retired pay and veterans' service-
    connected disability pay without loss of either. However, the issue is
    one that is a matter requiring joint jurisdiction. Before the Armed
    Services Committees can act, the House and Senate Veterans' Affairs
    Committees must first agree to repeal a provision in Title 38 U.S.C.
    that prevents the receipt of the latter without an offset to the
    former.
        Until Congress acts on this matter, concurrent receipt is out of
    the question. Nevertheless, there should be no objection to enacting
    Representative Michael Bilirakis' bill, H.R. 44. The legislative
    proposal will provide a special pay to military retirees who are
    seriously disabled as a result of duty in the uniformed services. FRA
    urges this Subcommittee to consider actively endorsing the Bilirakis
    resolution.
        Former Spouses Protection Act (FSPA).--The Uniformed Services FSPA
    is not currently a matter for the Subcommittee to consider but, it is
    an issue that adversely affects both the active duty, reserve, and
    retired service member who has the misfortune to be a defendant in a
    divorce suit. The FSPA is a terrible law. It is stacked in favor of the
    former spouse regardless of his or her lack of good conduct,
    faithfulness, and loyalty to family or this Nation. As such, FRA
    believes that the members of this Subcommittee should do all within
    their power to have the Act amended. H.R. 72, by Representative Bob
    Stump, is the vehicle that would cleanse the law so it will be
    equitable for both parties. The Association urges your support.
        Base Closures and Realignments.--The Association seeks the
    cooperation of the Subcommittee in providing appropriations to continue
    the operation of military treatment facilities (MTFs), commissaries,
    exchanges and other major MWR facilities on military installations
    where there is a large complement of military retirees and their
    families.
                                   conclusion
        Mr. Chairman, the above list is long. Yet, the issues addressed are
    important to the Association's membership. It would be exhilarating if
    all could come together, but the Association realizes that there aren't
    sufficient appropriations to do the job. So, FRA seeks what will be the
    best for the most. Its priorities are (1) repealing REDUX, (2) a 4.8
    percent increase in active duty and reserve basic pay, and (3) a pay
    reform for July 1, 2000, that recognizes the need to target increased
    rates of basic pay for noncommissioned and petty officers of the Armed
    Forces.
        Thank you, Mr. Chairman and members of this distinguished
    Subcommittee for allowing FRA the opportunity to address the goals of
    its members. Your support for these issues will as always, be sincerely
    appreciated.
                                     ______

    Prepared Statement of Maj. Gen. Roger W. Sandler, AUS (Ret.), Executive
          Director, Reserve Officers Association of the United States
        Mr. Chairman and Members of the Committee: On behalf of the members
    of the Reserve Officers Association from each of the uniformed
    services, I thank you for the opportunity to present the association's
    views and concerns relating to the Reserve components and the Defense
    Appropriations Bill for fiscal year 2000. A more detailed version of
    this testimony is available, should you require it.
        First, I would like to thank you for your past support of the
    Reserve components. By consistently promoting Reserve component
    programs, you have contributed directly to morale and to the high state
    of Reserve component readiness.
        In the National Defense Authorization Act for Fiscal Year 1991, the
    Congress stated that ``the overall reduction in the threat and the
    likelihood of continued fiscal constraints require the United States to
    increase the use of the Reserve components of the Armed Forces. The
    Department of Defense should shift a greater share of force structure
    and budgetary resources to the Reserve components of the Armed Forces.
    Expanding the Reserve components is the most effective way to retain
    quality personnel as the force structure of the Active components is
    reduced * * *The United States should recommit itself to the concept of
    the citizen-soldier as a cornerstone of national defense policy for the
    future.''
    Greater reliance on Reserve components
        The 50 years of reliance on a large, Cold War, standing military
    have ended. Confronted with sizeable defense budget reductions, changes
    in the threat, and new missions, America's military answer for the
    future must be a return to the traditional reliance on its Minutemen--
    the members of the Reserve components. Can America's Reservists fulfill
    their commitment to the Total Force--can they meet the challenge?
        Operations Desert Shield and Desert Storm proved that the Reserve
    components were ready and able. During the Gulf War, more than 245,000
    Reservists were called to active duty. Of the total mobilized, 32
    percent were from the National Guard and 67 percent from ``the
    Reserve.'' More than 106,000 Reservists were deployed to Southwest
    Asia. About 20 percent of the forces in the theater were members of the
    Reserve components.
        In Operations Joint Endeavor and Joint Guard, more than 17,000
    Reservists have again demonstrated their readiness and their capability
    to respond to their nation's call. In light of this increasing usage of
    Reserve forces (up 300 percent since 1990) to close the gap between
    available active duty forces and contingency requirements, we must ask
    ourselves why we continue to reduce the size of the Reserve components.
    Based upon the recommendations of the last Quadrennial Defense Review,
    which envisioned neither our extended presence in Bosnia, nor the war
    in Kosovo, the Army is poised to remove 25,000 spaces from its Reserve
    components' end strength; this at a time when the Army Reserve is
    literally running out of civil affairs units to deploy to Bosnia and
    perhaps Kosovo.
        We urge the Congress to direct the Army to take no further cuts in
    its Reserve components at this time, but rather to defer the issue of
    the 25,000 space reduction until the next Quadrennial Defense Review.
    We further urge the Congress to appropriate the funds necessary to
    support this end strength (approximately $200 million) until the next
    QDR can examine all of the issue involved.
                      reserve component cost effectiveness
        ROA has long maintained that a proper mix of Active and Reserve
    forces can provide the nation with the most cost-effective defense for
    a given expenditure of federal funds. Reservists provide 35 percent of
    the Total Force, but cost only 7.4 percent ($20 billion) of the fiscal
    year 2000 DOD budget. They require only 23 percent of active duty
    personnel costs, even when factoring in the cost of needed full-time
    support personnel. We need only consider the comparable yearly
    personnel (only) costs for 100,000 Active and Reserve personnel to see
    the savings. Over a 4-year period, 100,000 Reservists cost $3 billion
    less than 100,000 Active duty personnel. If the significant savings in
    Reserve unit operations and maintenance costs are included, billions
    more can be saved in the same period. ROA is not suggesting that DOD
    should transfer all missions to the Reserve, but the savings Reservists
    can provide must be considered in force-mix decisions. It is incumbent
    upon DOD to ensure that the services recognize these savings by
    seriously investigating every mission area and transferring as much
    structure as possible to their Reserve components.
                                  army reserve
        America's Army is the most capable Army in the world today. In
    executing the requirements of the National Military Strategy, the Army
    has provided over 60 percent of the people for the major American
    military operations since the end of the Cold War while receiving only
    one-quarter of the defense budget (Fiscal Year 2000 Army Posture
    Statement).
        As missions increased, available budget resources, ironically, did
    not keep pace. For fiscal year 2000 the Army's total obligation
    authority (TOA) for its Active, Guard, and Reserve components is $67.4
    billion, only 25 percent of the total Defense budget. Since fiscal year
    1989 the Army's buying power has decreased by about 37 percent in
    constant fiscal year 2000 dollars, while OPTEMPO has increased 300
    percent.
        The Army Reserve has played a major role in this increased OPTEMPO.
    When the Army deployed, so did its Army Reserve. In support of
    Operation Desert Shield/Storm the Army Reserve provided 650 units, and
    85,000 soldiers. Since the inception of operations in Bosnia, it has
    provided 74 percent of the all the Reserve component units called and
    72 percent of the RC soldiers called. Over 11,000 Army Reserve soldiers
    from nearly 450 units and the Individual Ready Reserve have answered
    the call. In 1998 alone, 1,010 USAR soldiers from 98 units mobilized
    and deployed to Bosnia, Hungary, Germany, and Italy.
        The reduction in the size of our active duty forces has placed a
    much greater reliance, especially in the Army, on Reserve components.
    In fact, the Army today is so dependent on its Army Reserve and
    National Guard forces that it can no longer conduct its expanding
    missions or go to war without them.
        This increased reliance now requires the Army Reserve to maintain
    many units at substantially higher levels of readiness and to be ready
    to deploy these ``first-to-fight'' units on very short notice. However,
    this increased reliance has not generated adequate funding in the
    Defense budget.
    Reserve personnel, Army
        Fiscal year 1999 is once again a restructuring year for the Army
    Reserve as it downsizes to a programmed fiscal year 1999 end strength
    of 205,000. We believe the President's RPA budget request for $2.3
    billion fails to provide adequate funds to train, educate, man, and
    support Army Reserve personnel and units. We believe the fiscal year
    2000 Defense budget request critically underfunds the Army Reserve by
    over $117 million in several Reserve Personnel, Army accounts. Listed
    are the critical shortfalls that the Army Reserve could execute in
    fiscal year 2000:

                                                                 In millions

    Professional Development Education (PDE).......................... $21.8
    Inactive Duty Training............................................  17.4
    Army Reserve CINC Support.........................................  11.0
    Soldier Incentives................................................  15.8
    Health Professional Incentives....................................  13.5
    Military Occupational Skill Qualification.........................  33.8
    Distributive Education............................................   4.1
                                                                      ______
          Total....................................................... 117.4

        We believe the RPA budget request understates the actual
    executable/critical shortfall by at least $117 million. Listed below
    are several examples.
        Professional development education (PDE).--The fiscal year 2000 RPA
    training budget for Army Reserve PDE is funded at only 72 percent of
    its requirements and is underfunded by at least $21.8 million. This
    critical RPA shortfall forces the Army Reserve to limit, or not offer,
    professional development education (PDE), required for promotion to
    some unit, and many IMA and IRR personnel. It likewise forces leaders
    to use their limited annual training time to complete their PDE
    requirements, in lieu of annual training with their units, adversely
    affecting unit/leader cohesion and resulting in degraded training
    readiness levels. The Army Reserve has an executable/critical shortfall
    of $21.8 million in its professional development education program.
        Inactive duty training.--The Army Reserve inactive duty training
    account, which funds inactive duty training for the members of troop
    program units, is underfunded by $34.8 million. Taking into
    consideration that there will be a number of soldiers excused from IDT
    due to mobilization and Active Duty for Training, there will still be
    an expected 3,400 soldiers not funded for IDT. The executable/critical
    shortfall for Army Reserve IDT is $17.4 million.
        Army Reserve CINC support.--CINC support missions (overseas
    deployment training) provides forward presence and nation-building
    activities in support of commander-in-chief (CINC) engagement strategy
    missions for Army Reserve soldiers and units. The executable/critical
    shortfall for CINC Support is $11.5 million.
        Soldier incentives.--Recruiting and retention of quality soldiers
    is becoming the one of the major challenges facing the Army Reserve.
    Without adequate incentives to attract and retain new and existing
    soldiers in the Army Reserve, the Army Reserve will be severely
    challenged and possibly unable to reach its end strength goals. The
    estimated accession shortfall is 4,000 to 8,000 personnel. The minimum
    acceptable risk is determined to be 85 percent of the required $11.4
    million shortfall, or $9.7 million. Additionally, the Army Reserve has
    identified and requested $8.1 million to fund educational programs.
    These programs assist soldiers in obtaining a higher education, thus
    increasing the quality of the USAR while offering an incentive to
    remain in the Army Reserve. The executable/critical shortfall is $6.1
    million. Combined executable/critical shortfalls in these incentive
    programs exceed $15.8 million.
        Health professional incentives.--Health professional incentives are
    the primary methods used by the Army Reserve to attract and retain
    qualified professionals in critically short medical fields in the
    Selected Reserve. The increased demand for Army Reserve medical
    personnel to support contingencies around the world, has increased the
    challenge of recruiting and retaining these highly trained
    professionals. The total shortfall is $15.9 million and the critical/
    executable shortfall for the Health Professions Scholarship Program is
    $13.5 million.
        Military occupational skills qualification (MOSQ).--The Army's MOSQ
    goal is to attain 85 percent MOSQ for its Reserve Components. Due to
    shortages of training funds the Army Reserve has been forced to use
    annual training funds to send soldiers to MOSQ training in lieu of
    attending annual training. This practice mortgages unit training by
    degrading units' ability to train collectively on wartime mission-
    essential tasks. Requiring soldiers to complete MOSQ training in lieu
    of unit training will adversely affect unit cohesion, resulting in
    degraded training readiness levels. The executable/critical shortfall
    in Army Reserve MOSQ training is $33.8 million.
        Operations and maintenance, Army Reserve (OMAR).--The fiscal year
    2000 DOD budget request for the Army Reserve Operations and Maintenance
    (OMAR) account is $1.2 billion. We believe there is at least a $187
    million executable/critical OMAR shortfall in the fiscal year 2000
    budget request that will force the Army Reserve to compensate by
    further reducing equipment and facility maintenance, OPTEMPO, and
    supply purchases. Backlogs for maintenance and repair continue to grow
    and necessary support to essential training continues to deteriorate,
    decreasing readiness.
        Currently the OMAR appropriation is experiencing serious resourcing
    shortfalls in recruiting and advertising, OPTEMPO, information
    management, and the backlog of maintenance and repair. Some critical
    shortfalls are shown below:

                                                                 In millions

    Recruiting and Advertising........................................ $36.3
    Operational Tempo.................................................  60.8
    Information Management............................................  27.0
    Distributive Education............................................  12.2
    Information operations............................................   4.2
    Depot Maintenance.................................................   3.4
    Real Property Maintenance.........................................  43.7
                                                                      ______
          Total....................................................... 187.6

        Recruiting and advertising.--In fiscal year 1998 the Army Reserve
    met only 92 percent of its recruiting mission of 47,940 soldiers. The
    Army Reserve's recruiting advertising shortfall of $36.3 million in
    fiscal year 2000 puts at risk its ability to meet both the enlisted
    recruiting mission and its end strength objective. The fiscal year 2000
    budget request for recruiting advertising is $16.0 million, only 30
    percent of the known and identified Army Reserve $52.3 million
    requirement. This current funding level coupled with an increased
    accession mission to turn around the recruiting shortfall places the
    Army Reserve fiscal year 2000 end strength at risk, potentially
    producing a 6,000 to 11,000 enlisted recruiting shortfall. The lack of
    adequate funds to support the required recruiting efforts will have an
    adverse effect on current personnel strengths degrading unit readiness.
    The executable/critical shortfall for recruiting and advertising is
    $36.3 million.
        Army Reserve operational tempo (OPTEMPO).--The Army Reserve fiscal
    year 2000 OPTEMPO is currently funded at 82 percent of the requirement,
    leaving an executable shortfall of $60.8 million for the 691 units in
    Force Package 4, which are early deploying and enabling units that are
    aligned against valid war plans. We believe the OPTEMPO budget request
    for the USAR critically underfunds the executable funding requirement
    by $60.8 million.
        Information management (IM).--The geographic dispersion of USAR
    units, Reserve centers, and headquarters located in 1,700 facilities in
    nearly 1,200 locations across the United States, Europe, and the
    Pacific places an ever increasing, reliance on automation,
    communications, mail and copiers to support command and control,
    mobilization, and administration.Combined, there is an executable/
    critical shortfall of $27 million in the information management
    accounts.
        Depot maintenance.--The Army Reserve Depot Maintenance program is
    readiness-sensitive and is required to repair and return end items to
    units. The program includes the overhaul, repair, and renovation of
    unserviceable but repairable army surface and air equipment. Supported
    equipment includes combat vehicles, communication and electronic
    equipment, watercraft, test measurement and diagnostic equipment (TMDE)
    including medical, tactical vehicles, construction, rail and other
    support equipment. The total shortfall is $8.2 million and the
    executable/critical shortfall is $3.4 million.
        Real property maintenance.--The USAR currently operates facilities
    in approximately 1,200 locations worldwide (CONUS, Puerto Rico,
    Germany, and the Pacific) and commands and controls 6 installations
    including 2 power projection installations (Fort McCoy, WI, and Fort
    Dix, NJ). We believe the fiscal year 2000 budget request critically
    underfunds the executable Backlog of Maintenance and Repair requirement
    by at least $43.7 million.
        National Guard and Reserve equipment request.--The Office of the
    Secretary of Defense, in its February 1999 National Guard and Reserve
    Equipment Report (NGRER) for Budget Year 2000, states that the Army
    Reserve has 68 percent of its Equipment Readiness Code A (ERC A)
    equipment items and 84 percent of its ERC-P items on-hand for all
    units. This represents a shortfall of critical equipment that exceeds
    $1.1 billion. Realistically, the equipment on hand (EOH) includes
    substituted equipment--some that is not compatible with newer equipment
    in the Active Army, Army National Guard, and Army Reserve equipment
    inventory and may not perform as required.
        The greatest source of relief to Army Reserve equipment shortages
    is the National Guard and Reserve Equipment Appropriation (NGREA).
    Since 1981 the Army Reserve has received nearly $1.5 billion in
    equipment through this special congressional appropriation. Without the
    appropriation the Army Reserve would still be struggling to reach 50
    percent equipment on hand (EOH). NGREA works, and works well.
        Due to the interest of Congress and the success this appropriation
    has made in increasing the level of EOH in the Army Reserve, the
    readiness of the Army Reserve has increased significantly over the past
    decade. We urge the Congress to continue NGREA and to provide $218
    million for such high priority equipment as 2.5- and 5-ton trucks,
    tractors, rough terrain forklifts, semi-trailers, smoke generators, and
    triage medical sets.
        Military construction, Army Reserve.--The organization, roles, and
    missions of the Army Reserve dictate the need for a widely dispersed
    inventory of facilities. It occupies nearly 1,200 facilities,
    consisting of more than 7,600 buildings and structures that average 37
    years old. Army Reserve-operated installations add another 2,600
    buildings and structures to the total inventory. The average age of
    facilities on these installations is about 48 years. The plant
    replacement value of Army Reserve facilities and installations is
    approximately $10.6 billion.
        The Army Reserve continues to have a $1.9 billion backlog of known
    construction requirements. This facility shortage is further
    complicated by recent base closings and the loss of co-located support
    facilities. Many of those facilities were geographically close to Army
    Reserve units. Existing shortages and the recent loss of usable
    facilities contribute to an average utilization rate that nears 200
    percent. ROA urges the Congress to authorize and fully fund the Army
    Reserve fiscal year 2000 $81,215,000 MCAR budget request.
                               air force reserve
        The Air Force Reserve makes up 11 percent of the total Air Force--
    Active, Guard and Reserve. It is composed of 74,000 Reservists and
    5,300 civilians. Its aircrews are 93 percent prior service, while 86
    percent fits support force has been on active duty previously. It
    operates 400 aircraft all over the world on a daily basis in support of
    Air Force and DOD missions. It is allocated 6 percent of the Air Force
    budget and provides 20 percent of the Air Force combat capability. It
    is a good deal for the service and for the country.
        Its key issues are people, readiness and modernization. With
    support for those issues from the active Air Force and the Congress,
    Air Force Reserve has become an indispensable national asset. ROA
    thanks you for consistent support that has allowed the command to
    demonstrate its skill in carrying out its portion of the National
    Military Strategy.
        Still, issues come up regularly that need the attention of both the
    Pentagon and the Congress. Some of these are:
        The Air Force Reserve Command C-141s.--The most recent Air Force
    structure announcement identified the next two sites at which 10 each
    C-141s will be removed from the service's force structure--McGuire AFB,
    NJ, and Charleston AFB, SC. Along with the aircraft will go all of the
    crews and maintenance support and funding, i.e., force structure. This
    is in accordance with a drawdown plan, which will ensure the
    elimination of an aging and worn aircraft from the inventory by the
    year 2006. In the Air Force Reserve Command alone, the loss will be
    between 4,000 and 5,000 people.
        Also, along with the aircraft goes their huge ton-mile airlift
    capacity, which the JCS will need to prosecute the two, nearly
    simultaneous major theater war scenario about which they testified
    about during readiness hearings in September 1998. Though 120 C-17s are
    in the process of being delivered to help fill the strategic airlift
    shortfall being created, that figure is far from an adequate
    replacement for the departing airlift capability. The Air Force's
    original requirement of 210 C-17s comes much closer to the number
    required to get the U.S. Army to a distant war, but that number did not
    survive budget negotiations. ROA urges the Congress to direct DOD to
    keep a minimum of 60 C-141C aircraft in the AFRC until sufficient
    numbers of C-17s are acquired to fulfill the ton-mile requirement of
    the National Military Strategy.
        The Air Force Reserve Command C-130 reductions.--In 1996 Congress
    directed DOD and the Air Force to submit a plan justifying any further
    reduction in the total number of aircraft in the C-130 fleet. The Air
    Force conducted the Mobility Requirements Study, which resulted in the
    Master Stationing Plan, which indicated that 388 aircraft were adequate
    to meet requirements. At that time the Active component had 150
    aircraft, the ANG had 190 and the AFRC had 104, for a total of 444. To
    draw down to the requirement of 388, the Active component was to lose
    24 aircraft, the ANG 24, and the AFRC 8.
        AFRC's eight aircraft were to come from Willow Grove ARS, PA
    (four), Peterson AFB, CO (two) and Billy Mitchell Field, WI (two)--all
    units with more than eight aircraft. Reductions were to begin in fiscal
    year 1998 and were included in the DOD portion of the fiscal year 1998
    President's Budget. During its review of the budget request, Congress
    disagreed with the proposed reductions to the ANG and AFRC aircraft.
    Aircraft and resources were restored in fiscal year 1998 Authorization
    and Appropriations Acts for one year only. Subsequently, the 24 ANG
    aircraft and resources were restored by the Air Force across the FYDP;
    the 8 AFRC aircraft were not.
        This is an obvious equity issue. As full partners in the Total Air
    Force, any plan to store airlift capability in the Reserve components
    should treat the components as equal partners, favoring neither one
    over another. ROA urges the Congress to direct the Air Force to restore
    AFRC's eight aircraft and resources across the FYDP. (Cost ranges from
    $10.6 million in fiscal year 2000 to $12.1 million in fiscal year
    2005.)
        Equipment modernization requirements for fiscal year 2000.--Thanks
    to the steady hand of Congress the Air Force Reserve Command is a full
    partner in the Total Force. Through appropriations added to the budget
    requests of the last several years, necessary modernization and
    training has been accomplished. When CINCs call to request support,
    they know the Air Force Reserve is fully mission-capable. But only with
    constant vigilance can we be assured that this necessary support will
    remain constant. AFRC is still in urgent need of much equipment to
    become and maintain constant interoperability. Requirements total $148
    million and include fighter and other aircraft upgrades in color
    displays, situational awareness data links, tactical radios, night
    vision devices, weather avoidance systems, forward-looking infra-red
    radar, radar warning receivers and electronic warfare management
    systems. The KC-135Es need re-engining kits for safety and
    environmental concerns, and there is still a requirement for one more
    C-130H2/X simulator. ROA urges the Congress to continue to fund the
    commands' requirements, thereby guaranteeing its utility to any CINC's
    need for a compatible force.
        Unfunded military construction requirements for fiscal year 2000.--
    Though ROA is grateful for whatever additional MILCON money the
    Congress sees fit to grant the Reserve components, we are still very
    concerned with the overall state of the Air Force Reserve's military
    construction requirements. Their total backlog is over $500 million,
    yet the FYDP envisions an average of only $21 million per year through
    fiscal year 2005. This mammoth figure represents years of inadequate
    attention from the active component and a long history of inequitable
    distribution of Congressionally added MILCON funds. When OSD's plan to
    fund only 25 percent of the fiscal year 2000 requirement is considered,
    and the reality of contractors not wanting to bid on such a project is
    examined, the likelihood of any such project being finished is
    significantly reduced. ROA thanks the Congress for its past support but
    urges it to correct years of inequity by beginning the process of
    reducing the horrendously long current mission MILCON list.
        ROA remains concerned with the apparent lack of concern for the
    state of AFRC's military construction requirements. Our previous
    testimony has included all new mission and current mission requirements
    for the command, last year totaling nearly $500 million. Even scaling
    back the list to those projects approved in the FYDP, the total remains
    astronomical compared to the PB submission of $12 million. Factoring in
    OSD's plan to fund only 25 percent of that figure brings AFRC's share
    of the pie to $3.7 million--a paltry and ineffective sum when weighed
    against the command's requirement. ROA urges the Congress to take the
    first step toward recognizing a long history of inequity in the
    distribution of MILCON funding by providing a minimum of $50 million
    for the use of AFRC in executing its new and current mission
    requirements.
                                 naval reserve
        Thanks to the Congress, in fiscal year 1999, for the first time in
    over a decade, the funding for the Naval Reserve is sufficient to
    ensure that Naval Reservists receive annual training for 14 days. In
    addition, thanks to the Congress, for the first time in a decade, the
    funding for contributory support is adequate for fiscal year 1999. In
    this regard, it is clearly evident that the Congress has given full
    recognition to the significant and well-recognized compensating
    leverage offered by today's Naval Reserve, which represents 20 percent
    of the Navy yet expends only 3 percent of the budget.
        Unfortunately, the fiscal year 2000 budget submission, although a
    significant improvement from the past, does not reflect the same
    thinking as the Congress, in recognition of the increasing
    responsibility that has been placed on the Naval Reserve. Similarly,
    although the funding for Reserve equipment modernization is a marked
    improvement from the past, the proposed budget for equipment
    modernization also falls short of the $100 million to $150 million that
    the Congress has provided to the Naval Reserve over the past several
    years.
        Funding shortfalls--personnel.--The Department's budget papers
    state that ``There is mounting evidence that the historically budgeted
    enlisted AT participation rate of 81 percent does not afford all
    eligible Naval Reservists the opportunity to perform AT. * * *
    Therefore, this budget provides the necessary funding to increase the
    budgeted AT participation rate for enlisted drilling Reservists to 87
    percent beginning in fiscal year 2000.'' As a consequence, funding to
    the Naval Reserve Personnel Account has been proposed at $1,464
    million. The increase notwithstanding, an additional $19 million is
    required for fleet contributory support to provide the same level of
    funding in fiscal year 2000 as the Congress provided for fiscal year
    1999. ROA recommends that the Congress add $19 million in ADT funding,
    as well as an additional $18 million for recruiting and retention
    incentives, enabling the Naval Reserve to fully employ its limited AT
    funding for the purpose for which it is intended, as well as ease
    OPTEMPO/PERSTEMPO demands significantly.
        Equipment modernization.--ROA continues to strongly advocate the
    assignment of modern fleet-compatible equipment to the Naval Reserve.
    The fiscal year 2000 budget includes $30 million for aircraft
    modifications, along with $19 million for a CH-60 helicopter and $45
    million for a C-40 replacement aircraft. It is also noted that funding
    in the out-years is included for four CH-60s and two C-40 replacement
    aircraft in fiscal year 2002. As previously discussed, however, this
    increased funding level, although not insignificant, is not of the
    level provided by the Congress over the previous years.
        In this regard, over the past years, much of the progress made in
    improving the readiness and capability of Naval Reserve units has been
    the direct result of congressional action--to designate new equipment
    for the Naval Reserve in the National Guard and Reserve Equipment
    Appropriation (NGREA) to earmark funding for the Naval Reserve in the
    traditional procurement appropriations.
        ROA has identified unfunded Naval Reserve equipment requirements
    for consideration by Congress for addition to the administration's
    request for fiscal year 2000, in either the NGREA or as earmarked
    additions to the Navy's traditional procurement appropriations. Among
    the top priorities are the CH-60 Seahawk aircraft, the C-40 replacement
    aircraft, and the P-3 update III kits. The H-60B transition to level
    III is a part of the helicopter master plan. Fleet capability and
    horizontal integration will result from this conversion at a cost of
    $304 million. The C-40A transport aircraft are of vital importance to
    fleet logistics as the Naval Reserve continues to provide 100 percent
    of the Navy's organic lift capability, providing direct logistics
    support for fleet CINCs in all operating theaters. C-40A replacement
    will cost $450 million. The P-3 update kits bring Reserve maritime
    patrol aircraft in line with Active fleet capabilities and broaden the
    mission of the Reserve P-3Cs beyond the role of anti-submarine warfare.
    P-3 update kits will cost $192 million. ROA requests that these
    unfunded Naval Reserve equipment requirements be considered by Congress
    for addition to the administration's request for fiscal year 2000, in
    either the NGREA or as earmarked additions to the Navy's traditional
    procurement appropriations.
                              marine corps reserve
        The Administration's budget proposes an end strength of 39,624
    Selected Marine Corps Reserve (SMCR) personnel for fiscal year 2000,
    down slightly from the level of 39,966 in fiscal year 1999. Similar to
    the Navy, there is also increased funding for the Marine Corps Reserve,
    at $410 million, an increase of $17 million from fiscal year 1999. Of
    particular note, the department's posture statement observes, ``Today
    more than 98 percent of Marine Corps Reserve units are assigned to
    active duty forces in support of the Marine Corps' commitment to joint
    operations plans. The Marine Corps Reserve contributes approximately
    one-fourth of the force structure and one-third of the trained manpower
    of the Marine Corps. Specifically, Marine Reservists comprise all of
    the adversary squadrons and civil affairs groups, one-half of the tank
    battalions, one-third of the artillery battalions, and one fourth of
    the reconnaissance battalions.''
        Funding shortfalls.--The request to support the Marine Corps
    Reserve appears to be underfunded in the Operation and Maintenance,
    Marine Corps Reserve (O&M, MCR) and Reserve Personnel, Marine Corps
    Reserve (RP, MCR) appropriations as well as in equipment modernization.
    Additional O&M funds are needed for individual equipment issue and to
    provide required training, maintenance, and depot level repairables.
    Maintaining the necessary funding to pay, educate, and train our Marine
    Reservists, and to enable the units of the Marine Forces Reserve to
    conduct appropriate training and operations is the vital first step to
    combat readiness and sustainability.
        The Marine Corps Reserve personnel appropriation also appears
    underfunded. The major deficiency in this appropriation is in the area
    of active duty for special work (ADSW). This valuable individual
    training is directly related to probable wartime tasking. The Congress'
    strong support to maintain ADSW funding allows Reserve Marines to
    sustain wartime skills while directly reducing the operating tempo of
    their Active counterparts. Further, ADSW provides critical support to
    Active force commanders, allowing them to augment Regular forces with
    Reserve Marines to participate in both USMC combined arms exercises
    (CAXs) and scheduled joint exercises in support of the warfighting
    CINCs.
        Equipment modernization.--Modern equipment is critical to the
    readiness and capability of the Marine Corps Reserve. Although the
    Marine Corps attempts to implement fully the single acquisition
    objective philosophy throughout the Marine Corps Total Force (Active
    and Reserve), there are some unfilled Reserve equipment requirements
    that have not been met because of funding shortfalls. In this regard,
    the Initial Issue Program continues to be a top priority. This program
    provides Reserve Marines with the same modern field clothing and
    personal equipment issued to their Regular Marine counterparts. The
    Marine Corps Reserve is also in need of ECP-560s to make its F/A-18
    aircraft compatible with the F/A 18 Cs and Ds utilized by the Active
    force. The cost of this program is $20 million.
        Real property maintenance in the Navy and Marine Corps Reserve.--
    There is a particular need for additional funding for real property
    maintenance in the Navy and Marine Corps Reserve. For example, as a
    result of BRAC closures and a reduction in force structure the Naval
    Reserve now has the smallest number of demographic centers since World
    War II and one-third fewer than were in operation in 1978 when the
    number of drilling Reservists was just slightly above what it is today.
        Some states have only one Naval and Marine Corps Reserve center,
    resulting in the further lessening of the integration of the nation's
    armed forces with the civilian population. In addition, the
    concentration of personnel resulting from Reserve center consolidation
    makes it even more important that our sailors and marines have access
    to modern, efficient and cost-effective facilities. Despite the
    reduction in facilities, the backlog of military construction and the
    critical backlog of essential maintenance and repair of Naval and
    Marine Corps facilities have continued to rise dramatically. The
    continuing shortage of funds for the orderly maintenance, repair and
    equipment replacement of these facilities is obvious. Accordingly,
    additional funds from the Congress are necessary to address these
    critical problems. ROA recommends at least $24 million of additional
    funding be added to keep the critical backlog of real property
    maintenance from increasing above the current level. This appropriation
    also needs approximately $21 million in additional funding for base
    operating support and $8.8 million for Reserve military construction.
                              coast guard reserve
        We are fully aware that this committee is not responsible for the
    direct funding of the Coast Guard or the Coast Guard Reserve.
    Nevertheless, funding for the Coast Guard is very austere, with only
    $2.941 billion in operational funding, the minimum level required for
    basic services. Similarly, funding for the Department of Defense and
    the Department of the Navy remains constrained. Therefore, it is vital
    to be farsighted as we cross into the 21st century, to ensure a
    continued robust sea power.
        Selected Reserve strength.--The fiscal year 2000 administration
    request is to maintain the Coast Guard Selected Reserve's authorized
    end-strength at the 8,000 level, whereas the appropriation's request is
    for 7,600. As the Coast Guard Reserve's appropriated end-strength for
    fiscal year 1999 is 8,000 and the Coast Guard Reserve end-strength
    continues to increase to meet the Congress' mandate of 8,000 Coast
    Guard Reservists, we have very serious concerns regarding the
    administration's proposal for an appropriated end-strength of only
    7,600. We also have concerns regarding an authorized end-strength of
    only 8,000, in view of the fact that the commandant has conducted an
    in-depth study that clearly indicates and justifies a requirement
    nearly 12,300 Coast Guard Reservists. In this regard, we would request
    that the committee undertake a detailed examination of Coast Guard
    Reserve requirements.
        In view of the foregoing, a request to fund only 7,600 Reservists
    simply makes no sense at a time when the Coast Guard is making
    significant strides in correcting the end-strength shortfall that has
    existed over the past several years. The Coast Guard has increased its
    recruiting capabilities and put into place a multi-year plan to get the
    Coast Guard Reserve back to strength. As of January 25, 1999 Coast
    Guard Reserve end-strength was at 7,579, having increased from a 2-year
    low of 7,243 in April 1998.
        In summary, the Congress and the Coast Guard have made the
    substantial financial and manpower commitment to rectify the Reserve
    end-strength problem. As a result, significant progress has been, and
    will continue to be made. As a result, the demand for Reservists to
    fill fleet requirements in a Coast Guard that is short of personnel can
    only be expected to increase. It, therefore, makes little sense at this
    juncture to reverse course and force the Coast Guard Reserve end-
    strength downward.
        Coast Guard Reserve funding.--The administration has requested $72
    million for the Reserve Training (RT) appropriation for fiscal year
    2000, with $24.427 million in reimbursement to operating expenses.
    Given the present procedures for reimbursement for operating expenses
    and direct payments by the Coast Guard Reserve, this is the minimum
    needed to fund a full training program for 7,600 personnel. Even at
    this minimal funding level, Coast Guard Reservists would continue to
    receive only 12 days of annual training (AT) each year (all the other
    armed services are entitled to 14 days' AT by departmental regulation).
        The funding required to support the full 8,000 level authorized is
    approximately $78 million. It should, however, be noted that the fiscal
    year 1999 appropriations bill, in appropriating $69 million for the
    Coast Guard Reserve, limited the amount of Reserve training funds that
    may be transferred to operating expenses to $20 million. The House
    committee report notes that this limitation is included because,
    ``Given the small size of the reserve training appropriation, and the
    declining size of the selected reserve, the Committee wants to ensure
    that reserves are not assessed excessive charge-backs to the Coast
    Guard operating budget. The Committee continues to believe that, absent
    this provision, the proposed level of reimbursement would be too high,
    especially given the substantial amount of reserve augmentation work
    hours provided by the reserves in direct support of Coast Guard
    missions.''
        The House report also specifically prohibits the Coast Guard from
    instituting any ``direct charges'' that were not in effect during
    fiscal year 1997.
        ROA thanks the Congress for its recognition of the support provided
    by the Coast Guard Reserve and the provision of this additional funding
    through the limitation in reimbursement for operating expenses. In this
    regard, the Coast Guard is the only component among all the armed
    services that reimburses operating expenses to the Active account. The
    Coast Guard is reviewing its procedures for reimbursement with a view
    toward modification in fiscal year 2000, and we are unable at this time
    to give an opinion on this change in procedures. We would, however,
    note, that the bottom line is that the Coast Guard Reserve must have
    sufficient funding for 8,000 Reservists and that the reimbursement cap
    has over the past 2 years provided approximately $2.5 million of this
    much needed funding. Accordingly, we would ask that any proposed change
    in procedures be closely examined and meticulously monitored--to ensure
    that the Coast Guard Reserve is fully funded at a level of 8,000 ($77
    million).
        Coast Guard Reserve equipment.--We are fully aware that this
    committee is not responsible for the direct funding of the Coast Guard
    or the Coast Guard Reserve. Nevertheless, funding for the Coast Guard
    is very austere, with only $2.941 billion in operational funding, the
    minimum level required for basic services. Mobile support units (MSUs)
    are Reserve units designed to be a limited deployable logistical and
    maintenance support and repair facility service for one, and under
    certain circumstances, for up to two co-located squadrons of Coast
    Guard 110-foot patrol boats. These units are staffed by Reservists and
    will support the Active component when deployed for operations
    overseas. The MSU provides on-site repair facilities for hull
    maintenance and engineering and electronics systems for use by support
    personnel assigned for operational maintenance. The Coast Guard is in
    need of $419,524 for the MSU program. In addition, chemical,
    biological, and radiological defense is required for Coast Guard
    Reserve personnel assigned to the Marine Safety Officers who have
    Department of Defense strategic load-out responsibilities. The current
    mobilization requirements call for a Reserve personnel requirement in
    excess of 3,500 personnel. The total cost of required chemical,
    biological and radiological defense equipment required is $3.135
    million.
                                   conclusion
        Thank you for the opportunity to represent the Reserve Officers
    Association's views on these important subjects. Your support for the
    men and women in uniform, both Active and Reserve is sincerely
    appreciated. I'll be happy to answer any questions that you might have.

                              subcommittee recess

        Senator Stevens. Thank you all very much. We will recess
    until May 19, when we will hear from the Department of the
    Army.
        Thank you all very much.
        [Whereupon, at 12:40 p.m., Friday, May 14, the subcommittee
    was recessed, to reconvene at 10 a.m., Wednesday, May 19.]

           DEPARTMENT OF DEFENSE APPROPRIATIONS FOR FISCAL YEAR 2000

                                  ----------

                            WEDNESDAY, MAY 19, 1999

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

                             DEPARTMENT OF DEFENSE

                             Department of the Army

                             Secretary of the Army

    STATEMENTS OF:
            HON. LOUIS CALDERA, SECRETARY OF THE ARMY
            GEN. DENNIS J. REIMER, CHIEF OF STAFF

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. Thank you very much, General. It is nice
    to see you here. This morning we are going to hear from Army
    Secretary Caldera and Chief of Staff General Reimer. Secretary
    Caldera, this is your first appearance before the committee. We
    had a very successful visit to Alaska. I am sure you will be
    visiting our friend soon.
        Senator Inouye. He has been there.
        Senator Stevens. And General Reimer, time passes too fast
    in this committee. I am told this is your final appearance
    before the subcommittee as Chief of Staff of the Army.
        General Reimer. It depends on how well I do. You may call
    me back. [Laughter.]
        Senator Stevens. Well, maybe we could demote you, Denny,
    and you could stay for another couple of years. [Laughter.]
        It really does not seem like that long ago you were here
    for the first time. I do want to express our appreciation to
    you and all the members of the committee for all you have done
    to work with us and keep us informed on the needs of the Army.
    You have left many significant legacies, but there are two that
    we would highlight, and I am serious. I think the total Army
    concept is a really, really good one, and the leadership team
    you have created with General Shelton and General Plewes has
    created a new situation in the Army, and we congratulate you.
        The National Guard and the Army Reserve are an integrated
    part of your force, and it is really, I think, the best
    situation that the Army has had with the Guard and Reserve
    since Senator Inouye and I joined this subcommittee. It is
    really, really good.
        And second, your vision to push the Army into the 21st
    century through the digitization initiative is going to remake
    the Army. We want to help you in all we can, in every way we
    can. It is not only right to go forward into a new concept and
    really there is no way to step back on the modernization
    program. We have got to go forward with everything we have got.
        We are pleased to look at your budget. It is a sound,
    straightforward, no smoke and mirrors budget. We think we can
    support you all the way.
        There are pressures on the Army. We all know about those.
    There is no use belaboring them now. The House passed that
    emergency supplemental, and we are going to do our best to get
    it passed here sometime today I hope. If not tomorrow, but I
    think that that will go a long way to try and fill in some of
    the little chink, put our finger in the dike a little bit, but
    I am not saying this does it all. We know we need more, and we
    are going to welcome your comments about funding and the needs
    that you foresee for the Army, particularly commitments in
    Kosovo.
        But Denny, we are only a telephone call away. We do take
    advice from friends, no matter where they go.
        General Reimer. Thank you, Mr. Chairman.
        Senator Stevens. We will give you our home phone numbers.
    We do want to rely on you in the future if you have any
    comments to make about what is going on.
        Senator Inouye.

                       STATEMENT OF HON. DANIEL K. INOUYE

        Senator Inouye. Thank you very much, Mr. Chairman. I would
    like to join you in welcoming the Secretary on his first
    appearance and sadly to say goodbye to our Army Chief, General
    Reimer, because very likely this may be your last appearances
    before the committee and, like the chairman, I find it very
    difficult to find the appropriate words to express our
    gratitude, but I am certain you know that we appreciate all you
    have done, and we wish you the best in the coming years.
        Mr. Chairman, as the Army faces the next century, it is a
    time of great challenges and there are those, many of them, in
    this era of global reach and instantaneous communication, that
    suggest a large standing Army is not necessary. In fact, it is
    an anachronism. But Mr. Chairman, I am not one of them.
        For most of the world's military it is the size and
    strength of the Army that denotes their military prowess. I
    believe we, too, must measure our Nation's strength by
    examining our Army and supporting our Army. To retain our
    status as the world's only superpower I believe that we must
    maintain our Army as a force second to none.
        So like you, Mr. Chairman I look forward to hearing from
    our witnesses on how the requests for fiscal year 2000 will
    maintain the strength and readiness of our Army and I would
    like to, as the chairman has assured you, to assure you that we
    will look upon your budget with great favor.
        Thank you, sir.
        Senator Stevens. Thank you very much.

                      prepared statement of senator shelby

        Before you begin, Mr. Secretary, we have received a
    statement from Senator Shelby which I will place in the record
    at this point.
        [The statement follows:]

                Prepared Statement of Senator Richard C. Shelby

        Good morning gentlemen and thank you both for appearing
    here today. Secretary Caldera, it is a pleasure to welcome you
    to the Committee. I hope you are enjoying your tenure as
    Secretary of the Army. As a West Point graduate, I am sure you
    feel a certain kinship with the troops you are now charged with
    overseeing. I know that I and many others on this Committee
    look forward to working with you in the coming years.
        General Reimer, I am told that this will be your final
    appearance in front of us. As you prepare to move on, I would
    like to commend you on your 36 years of uniformed service to
    the nation. I have enjoyed working with you during a period of
    declining defense spending, to ensure that the Army has
    maintained its fighting edge.
        That fighting edge has been tested over the last seven
    weeks. As we speak, our troops are engaged in combat operations
    in the Balkans. I can only hope that the decisions of this
    committee in past years have properly prepared and equipped
    those soldiers for the current conflict. We must be mindful as
    well, that the decisions we make now and throughout this year,
    will affect the ability of tomorrow's Army to face some future
    crisis, wherever that might be. Our task is not to be taken
    lightly. Future soldiers are depending upon us to make prudent
    decisions.
        Again, welcome to both of you. I have a number of questions
    and I look forward to your responses.

        Senator Stevens. Mr. Secretary, General Reimer, your
    statements are printed in full in the record already. We would
    appreciate it if you would make any statements you want to
    make.
        Mr. Caldera. Thank you very much, Senator Stevens, Senator
    Inouye. We first want to say thank you for your strong and
    steadfast support of our soldiers and our Army over the years.
    I appreciate this opportunity to appear before you and just
    wanted to make a couple of brief statements.
        At this time when our Nation is involved in a conflict,
    your support is tremendously important to our soldiers. What
    you did for us last fall in terms of the supplemental for
    fiscal year 1999, both to pay for contingency missions and
    readiness, was very important, and it is paying dividends today
    in our ability to meet all of our obligations around the world.

                             Emergency supplemental

        The emergency supplemental that will be before you shortly
    is also very important in terms of being able to fund some of
    the things we have already done in responding to the need for
    hurricane disaster relief assistance in Central America, as
    well as the surge deployment that we did to Southwest Asia in
    December and the mission that is now being undertaken in the
    Balkans. It will allow us to meet all of those obligations and
    still continue to be able to train and maintain the readiness
    posture that our forces must have to meet all of the other
    requirements that they need to be ready and available for.
        With respect to the Senate proposal to increase pay,
    restore retirement benefits, and reform the pay table, it
    certainly does the right thing in terms of sending the message
    to our soldiers that their sacrifice and service is
    appreciated. It will allow us to continue with our aggressive
    training program through the rest of the year if we receive the
    timely payments of those past contingency missions that that
    emergency supplemental represents, so we would appreciate that.

                        fiscal year 2000 Budget proposal

        The budget that we present to you represents our best
    effort to support the great soldiers who serve in the Army in
    terms of their training and in terms of their quality of life.
    We are challenged in modernization to be able to provide them
    the tools that they need to get the job done.
        We make our most important steps forward in near-term
    readiness, but over the midterm and the long term we are going
    to be challenged to recapitalize the aging equipment we have in
    the Army and to press forward with the transformation
    activities and initiatives we have undertaken to leverage what
    computers and digitization offer soldiers in the future in
    terms of increased capabilities, command and control,
    situational awareness, and all of the tremendous promise the
    technology has for making our Army the world's first
    information age Army.
        Having superior capabilities over any other force in the
    world requires a significant investment, and we are starting
    with the down payment and certainly moving in the right
    direction in terms of being able to fund necessary
    modernization, but there is still much more that we need to be
    able to do.
        So we appreciate this opportunity to talk to you about the
    budget and the challenges that we continue to face as the Army
    continues to meet the needs of the Nation throughout the world
    in the variety of ways that we have been challenged to do.

                               prepared statement

        It is a very creative, adaptable Army, with very talented
    people able to fulfill the full range of missions from high
    intensity conflict to peacekeeping to humanitarian assistance.
    That is why our soldiers are truly underwriting U.S. leadership
    in the world by their service and contributions, and are
    deserving of all the support that we can give them.
        Thank you, Senator.
        Senator Stevens. Thank you, Mr. Secretary.
        [The statement follows:]
                      Prepared Statement of Louis Caldera
        It is with great pleasure that I appear before you today to report
    on the state of your Army and to talk about our proposed budget for
    fiscal year 2000. Since my confirmation this past June, I have traveled
    widely to visit our soldiers at their duty stations at home and abroad.
    Everywhere I have visited, from Bosnia, to Korea, to Central America,
    to bases across the United States, I have been deeply impressed by
    their motivation and patriotism, as well as the important contributions
    they are making to our Nation. I came away from these visits reassured
    that America's soldiers are fully prepared to fight and win our
    Nation's wars. I have also seen how they advance our national interests
    around the world every day through their contributions to U.S.-led
    nation building, peacekeeping, disaster relief and humanitarian
    assistance missions. I am very proud of what our soldiers are doing on
    behalf of America. I am also proud of what they have shown me they are
    prepared to do when the Nation calls.
        Our soldiers are the most creative, adaptable and strategically
    relevant force in our Nation's 21st century arsenal for freedom. They
    have the ability to deploy rapidly anytime, anywhere, to close with and
    destroy the enemy as only ground combat forces can. This all-weather,
    all-terrain force can also deploy rapidly to deliver competent and
    caring emergency assistance, forge order out of chaos, and bring hope
    to the forsaken. The quality of the people in our force--their
    individual abilities, values and good judgment, and their collective
    capabilities and cohesion--make them outstanding representatives of
    America's principles and ideals in action. They not only guarantee our
    freedoms at home, they also underwrite our Nation's security
    commitments and leadership role in the world.
                                 the army today
        In recent years, the Army has assumed the central role in executing
    the National Military Strategy of shaping the international environment
    in ways that are favorable to U.S. interests, responding to the full
    spectrum of crises that challenge U.S. security interests, and
    preparing now for an uncertain future. All told, the Army has increased
    its pace of operations by 300 percent since the end of the Cold War,
    providing approximately 60 per cent of the forces involved in
    contingency operations. On any given day during the past year, an
    average of over 28,000 Army soldiers were deployed to more than 70
    countries, in addition to the 119,000 soldiers that are permanently
    stationed overseas, to promote security and stability throughout the
    world.
        From Korea to Southwest Asia to Central Europe, trained and ready
    soldiers deter aggression and reassure our friends and allies. They
    secure the peace from Macedonia to the Sinai, to Haiti, to Peru, while
    providing the bulk of the force for ongoing operations in the Balkans.
    Our extensive military-to-military contacts, exercise programs, and
    training activities further our Nation's goals of engaging and
    influencing other countries in ways that contribute to our national
    security. At home, the Army has reacted to the reality of new threats
    to the American heartland by training the ``first responders'' in our
    major cities to better deal with chemical and biological attacks.
    Throughout the world, Army soldiers also help the helpless by providing
    support to domestic and international humanitarian assistance
    operations for hurricanes, floods, wildfires, and other natural
    disasters.
        The Army accomplished an unprecedented amount of work on behalf of
    the Nation in fiscal year 1998 and, with Hurricane Mitch and Operation
    Desert Fox already under our belt, fiscal year 1999 promises to be an
    even more challenging year. We do all this with a force that is much
    smaller than it was a decade ago. Since 1989, the Total Army has
    reduced spaces for almost 700,000 people while closing or realigning
    more than 700 installations, both at home and abroad.\1\ To meet
    growing demands for American presence with a smaller force and budget,
    the Army has attempted to balance the load across units and components,
    and has increased efficiency in its operational and business practices.
    We have done this by exploiting information technology, enhancing
    active-reserve force integration, and implementing a broad set of
    defense reforms and cost-saving initiatives.
    ---------------------------------------------------------------------------
        \1\ The breakdown of the Army's personnel decrease between fiscal
    years 1989 and 2000 is as follows: Active Component: 290,000, or 38
    percent; Army National Guard: 107,000, or 23 percent; Army Reserve:
    114,000, or 36 percent; and Department of the Army civilians: 187,000
    or 46 percent.
    ---------------------------------------------------------------------------
        The high pace of operations being carried out by this smaller force
    challenges our leaders daily as they strive to take care of the great
    soldiers who are doing the Nation's work. Taking care of our people is
    more than just protecting our investment in human resources to ensure
    we maintain a quality force; it is the right thing to do to recognize
    their selfless service.
                            fiscal year 2000 budget
        The President's budget request for fiscal year 2000 provides a
    significant and timely increase in the resources available to the Army
    to do the work of the Nation. It furthers the steps begun with the
    fiscal year 1999 supplemental, which is already having a positive
    impact across the Total Army. With your support, we have been able to
    increase fiscal year 1999 funding for Base Operations, Army National
    Guard training, depot level maintenance, and recruiting initiatives
    across the force. Additionally, the supplemental's up-front funding for
    the Bosnia contingency operation meant we did not have to cancel
    training and maintenance activities in order to pay for that operation
    pending uncertain reimbursement.
        The fiscal year 2000 budget request builds upon the improvements
    funded in the supplemental by addressing our most pressing near-term
    readiness needs while supporting our quality of life efforts and our
    strategy to transform the Army for the future. Importantly, it proposes
    funding for the outyears that is critical to assuring Army readiness
    over the long-term. In general, this budget will allow us to accomplish
    our major priorities by providing the resources we need in the key
    areas of people, training, overall quality of life, and modernization.
        Army people are the cornerstone of Army readiness. The President's
    Budget request supports our people by proposing pay and retirement
    reforms. It also supports commanders' efforts to execute tough
    training, take care of their installations, and provide the quality of
    life our soldiers deserve. As we near the end of the drawdown, the
    combined effects of increased deployments, a smaller force, perceptions
    of a pay gap, the erosion of retirement and medical benefits, and
    uncertainties related to the timing and location of deployments have
    exacted a toll on soldiers and their families, as well as our civilian
    work force. The President's leadership and the commitment of the
    Administration and Congress to increase pay and reform military
    retirement are key steps that will help us to recruit and retain the
    high quality people we need to man the force. They also send a clear
    signal to soldiers that the Nation recognizes and values their service.
        Pay and retirement reforms will help with recruiting and retention.
    For fiscal year 1998 and the first quarter of fiscal year 1999, the
    Army did not meet its recruiting goals despite the exhaustive efforts
    of our recruiters. Recruitment for the active component was about 800
    enlistees short of our target last year, and missed this year's first
    quarter target by 2,400 soldiers. Recruitment for the Army National
    Guard and Army Reserve was about 1,200 and 3,700 recruits short of 1998
    targets, respectively. Despite these shortages, the Army met its
    quality goals for the active component and the Army Reserve.
        Certain retention indicators also merit our attention. Over the
    past seven years, the number of soldiers indicating an intention to
    remain on active duty has declined by more than five percent. The top
    two reasons they cite for wanting to leave the military are the amount
    of time separated from family and the amount of their basic pay. Since
    1992, satisfaction with retirement benefits fell from 62 to 39 percent
    for officers and from 45 to 28 percent for enlisted soldiers. While
    overall retention percentages still exceed requirements, we are still
    experiencing some retention difficulty in certain ranks and specialty
    skills such as aviation mechanics, military intelligence, and personnel
    administration. Shortages in these skills are being monitored closely
    so they do not detract from our operational units or their ability to
    accomplish day-to-day missions, especially as we field new technologies
    across the Army. Targeted pay table reform will help address these
    retention concerns.
        Given our requirement for high-quality people, our recruiting
    shortages and the trends of retention indicators have caused us to step
    up our efforts in these areas. This budget request will help the Army
    turn the corner in these key personnel areas. The incentives contained
    in the budget provide strong support for our efforts to ensure that the
    Army continues to attract and retain dedicated, quality patriots
    throughout the force.
        Soldiers come in to the Army to train hard, and that training is at
    the heart of their readiness. The fiscal year 2000 budget will have a
    very positive impact on our Army's ability to achieve results that
    support U.S. interests by increasing funding in all three of the major
    accounts that support training and the facilities and ranges where
    soldiers train: Operations Tempo, Base Operations, and Real Property
    Maintenance.
        Operations Tempo (OPTEMPO) is the primary account that funds
    training. It pays for the fuel and repair parts needed to drive or fly
    Army equipment. To develop the readiness needed to execute the National
    Military Strategy, OPTEMPO accounts must be funded at levels that
    enable commanders to meet training requirements. The most basic of
    these requirements is to ensure that squads, platoons, companies, and
    battalions are trained to proficiency in wartime missions. Such
    training prepares units for, and is tested by, the rigors of our Combat
    Training Centers (CTCs), which can simulate everything from high
    intensity combat to chaotic peacekeeping environments. Although the
    CTCs offer the world's best training, this experience is enhanced when
    units have had the opportunity to do all of their collective training
    prior to reporting for their rotations. In recent years, commanders
    have had to curtail some of this home station training. In light of the
    CTC's role as the crown jewel of Army training, our objective is to
    fund OPTEMPO accounts at 100 percent of requirements so that units can
    fully train at home before taking the Army's preeminent test of their
    readiness.
        The fiscal year 2000 budget request makes dramatic progress towards
    achieving this objective. It will fund greatly increased vehicle and
    helicopter use at home stations and the institutional training bases
    for both active and reserve units. This budget also resources Army
    National Guard divisions at more than 75 percent of training
    requirements for individual, crew, and squad training in fiscal year
    2000. The budget plan for fiscal year 2001 and beyond will sustain this
    commitment. Additionally, the fiscal year 2000 budget provides for 100
    percent of the requirements for Title XI support to reserve forces.
        The fiscal year 2000 budget request also increases funding for Base
    Operations (BASOPS), which provides basic municipal services such as
    water, electricity, gas, and sewerage, and pays for leased facilities.
    BASOPS is ``must fund'' support that allows us to operate our
    installations--the posts, camps, stations, Army Reserve Centers, and
    Army National Guard armories--at a level necessary to sustain the day
    to day activities of the Army.
        BASOPS also bears directly on our ability to improve training,
    particularly at home stations, for two reasons. First, adequate BASOPS
    funding reduces the need to shift, or ``migrate,'' funds away from
    OPTEMPO accounts. When BASOPS accounts are underfunded, commanders are
    often forced to divert training dollars in order to provide essential
    services to soldiers and their families on the installations where they
    live and work. Second, BASOPS funds are used to support training costs
    not captured in OPTEMPO accounts, such as the use of installation
    transportation to move soldiers to training activities and the
    utilities needed to operate and maintain ranges and training
    facilities.
        BASOPS not only supports training, it also directly affects the
    quality of life we provide for our soldiers and families. Commanders
    use BASOPS monies to fund installation services such as professional
    learning centers, gymnasiums, libraries, recreation centers, pools,
    automotive facilities, and craft centers. BASOPS also provides for
    financial counseling, the buildings used by family support groups,
    transition services, and relocation assistance, as well as payroll
    expenses for the people who provide these services. Because such
    services are essential to the Army's quality of life and community
    missions, underfunded BASOPS accounts force commanders to either
    curtail essential services or redirect resources from the training
    mission.
        In short, BASOPS dollars are used to make military communities safe
    and desirable places to live and work. They also make it possible to
    operate military infrastructure needed for training. Taking care of the
    places where soldiers live, work, and train is a signal--comparable to
    the signal that we send when we raise their pay--that we recognize the
    importance of their service and the vital contribution they make to the
    Army and the Nation.
        The fiscal year 2000 budget and accompanying proposal for the
    outyears fund BASOPS at 95 percent from fiscal years 2000 through 2005.
    This budget will improve essential readiness and quality of life by
    continuing the positive trend initiated by the fiscal year 1999
    readiness supplemental, which increased BASOPS funding from the
    budgeted level of 84 percent to 91 percent.
        In recent years commanders have also been challenged to maintain
    their infrastructure, a function resourced by the Real Property
    Maintenance (RPM) account. To measure the condition of its real
    property, the Army uses a system similar to the one we use to assess
    unit training readiness, an Installation Status Report similar to the
    Unit Status Report. Today, the Army's real property as a whole is
    assessed as C-3, or not fully mission capable. This rating reflects the
    backlog of facilities maintenance and repair that has accumulated over
    years of underfunding RPM. To get to C-1, a fully mission capable
    status, repairs and improvements to training facilities, maintenance
    facilities, community facilities, installation support facilities and
    railheads are needed. Coupled with the initiation of numerous Military
    Construction (MILCON) projects, increases in RPM funding will enable
    the Army to begin this infrastructure revitalization.
        The fiscal year 2000 budget and outyears plan provide a substantial
    increase to RPM funding by increasing this account to 77 percent of
    requirements through fiscal year 2001, and to 90 percent for fiscal
    years 2002 through 2005. This compares favorably to fiscal years 1990
    through 1997, when average RPM was only 56 percent of requirements. The
    increases in RPM funding contained in this budget proposal and the
    accompanying plan for the outyears will enable the Army to stem the
    deterioration of its facilities between fiscal years 2000 and 2002, and
    begin to reduce the maintenance backlog beginning in fiscal year 2003.
    This commitment to funding RPM will also alleviate the need to use
    training funds to repair infrastructure and to support quality of life
    programs.
                               army modernization
        Although it depends heavily on funding in the outyears, the fiscal
    year 2000 budget request protects our modernization efforts in two
    ways. First, it stems the decreases in modernization funding that began
    in 1986 while providing for real increases during the outyears. Second,
    it provides sufficient funding in the OPTEMPO, BASOPS, and RPM
    accounts, which would otherwise turn the modernization account into the
    bill payer for current readiness requirements.
        Modernization is the key to future readiness. The Army must
    continually transform to ensure we can accomplish current and potential
    future missions without knowing their exact nature. The unique
    challenge is to do this within expected fiscal limitations and without
    undue risk to the Army's people or the Nation's interests. The Army
    Modernization Plan is the Army's answer to meeting the challenge
    through its research, development and acquisition strategy. The
    products of the strategy are fielded systems that will provide the
    capabilities that we envision the Army will need to serve the Nation,
    while minimizing casualties, for the first part of the next century.
        With this objective in mind, the five goals of the Army
    Modernization Plan are to: (1) digitize the force, (2) maintain combat
    overmatch, (3) sustain essential research and development (R&D) while
    focusing science and technology (S&T) on leap-ahead capabilities; (4)
    recapitalize the force, and (5) integrate the capabilities of the
    active and reserve components.
        The Army's primary modernization goal is to achieve information
    dominance. Linking modern communications capabilities and computers
    within and among units, referred to as ``digitization,'' will enable
    commanders, planners, and shooters to rapidly acquire and share
    information, and dramatically improve combat effectiveness.
    Digitization will increase situational awareness by allowing commanders
    from corps to platoon level to know where they and their forces are
    located, what condition they are in, and where the enemy is. This will
    enable commanders to seize the initiative, create opportunities, and
    maneuver their forces to achieve decisive outcomes, while minimizing
    casualties. The Army will digitize the 4th Infantry Division
    (Mechanized) by the end of fiscal year 2000 and the III Corps by the
    end of fiscal year 2004. The fiscal year 2000 budget supports this
    aspect of our transformation strategy.
        We refer to the force with information dominance capabilities as
    Army XXI. It will be a hybrid force consisting of some current systems
    with added-on digitization capability and new ``leap-ahead'' systems
    with this capability embedded, such as the Comanche helicopter and the
    Crusader howitzer. In the future, using lessons learned from Joint and
    Army Warfighting Experiments, other advanced technologies will be
    leveraged to create a force, the Army After Next (AAN), with more leap-
    ahead systems, which will be needed to defeat threats that might emerge
    two to three decades hence.
        Although the Army is currently unmatched in ground combat systems,
    we must continue to make improvements to our current force to ensure
    that combat overmatch, particularly as it relates to lethality and
    survivability, is maintained. Such improvements in combat effectiveness
    require periodic technology insertions through Preplanned Product
    Improvement (P\3\I) programs. As we modernize, we must do so by brigade
    sets to preserve the capability to fight as combined arms teams at this
    level and to satisfy the requirements of the combatant commanders.
    P\3\I programs provide a less expensive method to leverage
    technological innovations, while sustaining our industrial base, to
    ensure combat forces retain the overmatch to defeat any potential
    adversaries.
        Maintaining combat overmatch requires continuing the research and
    development (R&D) necessary to insert new technologies into current
    systems and focusing our science and technology (S&T) efforts toward
    developing leap-ahead technologies. Army soldiers need high quality
    small arms, tanks, personnel carriers, artillery, air defense, engineer
    support, transportation assets, field hospitals, a substantial
    logistical train, and a host of other systems that enable them to
    survive and operate in hostile and diverse environments. These soldiers
    deserve the best we can afford when they are deployed in harm's way; it
    is toward this end that we direct the Nation's best scientific and
    technical talent.
        Since fiscal constraints have forced us to defer the acquisition of
    most next-generation systems, we are focusing S&T, R&D, and the
    industrial base on identifying and developing leap-ahead systems that
    will eventually equip the Army After Next. The Army's investment in
    science and technology is our down payment on leap-ahead systems that
    will allow our children and grandchildren to effectively answer our
    Nation's call while manning the Army of the future.
        Recapitalizing the force means replacing or refitting selected old
    systems to ensure they remain effective, safe, and affordable to
    operate and maintain. This can be achieved through individual system
    replacement, extended service programs (ESP), P\3\I, depot rebuild, or
    technology insertion. The objective of this effort is to ensure mission
    essential systems do not exceed their refit, replace, or retire (R\3\)
    points, a metric for determining when systems are no longer cost-
    effective to keep. Recapitalization is also important for maintaining
    an industrial capability to introduce leap-ahead technologies as they
    mature.
        Modernization is often only associated with major weapon systems.
    Certainly, systems such as Comanche and Crusader will play dramatic
    roles in ensuring information dominance and demonstrating superior
    agility, and are therefore a mainstay of our modernization plan. In the
    short-term, however, we must modernize other systems through individual
    replacement just to recapitalize the force. For example, in the case of
    the venerable ``deuce and a half,'' the 2\1/2\ ton utility truck that
    has been an Army icon since the 1960's, it is no longer economically
    viable or desirable to remanufacture systems. In cases such as this, we
    should field new systems such as the Family of Medium Tactical Vehicles
    (FMTV), which has far superior performance capabilities and will
    greatly reduce our operating and support costs. Fielding new systems
    with lower life cycle costs to replace our aging systems will enable us
    to save considerable taxpayer dollars over the long-term.
        To ensure interoperability, new capabilities must be optimized
    across the Total Army. Accordingly, the Army will continue to modernize
    on a ``first to fight'' basis. From fiscal years 1992 through 1999,
    over $21.5 billion in new or serviceable equipment was provided to the
    reserve components, through a combination of both procurement and
    equipment cascading. Since we will fight as one integrated team, we
    must modernize the reserve component elements in accordance with their
    respective force packages, just as we do with active component units.
    The Army will ensure that deployable active and reserve component units
    are equipped with the latest equipment that we can provide and are
    fully interoperable with one another. This is particularly important
    with respect to digitization, which will provide the backbone of
    command, control and communications.
        Meeting the goals of the Army Modernization Plan in a fiscally
    constrained environment presents a great challenge. Over the last ten
    years, Army modernization buying power has dropped 44 percent. In
    addition, the challenge of meeting increased mission requirements,
    while taking care of people, has forced us to accept risk in recent
    years by canceling or delaying modernization programs. Since 1987, we
    have terminated or restructured over 100 programs, and delayed many
    others.
        Achieving our modernization goals will help us to field Army XXI
    and ``set the conditions'' for the transformation to the AAN, while
    retaining the capability to execute the National Military Strategy
    today. Deferring and delaying procurement programs make realizing all
    of our modernization goals over the long-term difficult. In addition,
    this creates a more immediate situation in which many of our forces do
    not have the latest generation of equipment. For example, many of our
    light forces such as the 25th Infantry Division and the 10th Mountain
    Division have yet to be equipped with the Javelin, which would provide
    a much-needed enhancement of their anti-tank capability.
        A people-intensive force such as the Army, after providing for
    personnel and associated costs, has relatively few funds to devote to
    procurement. Given what amount to our fixed operating costs, and given
    the substantial investments we must make to enable the pursuit of
    advanced technologies, simply trading off between programs will not
    work. A sustained commitment to providing funding for the Army's
    modernization programs during the outyears is necessary to ensure the
    Army has what it needs to accomplish its missions without undue risk.
                        integrating the army components
        Addressing Army challenges in a way that makes the most effective
    use of each of our components is one of our foremost objectives. Our
    motivation for improving integration is simple: with 54 percent of the
    Total Army in the reserve components and an increasing Army workload,
    both active and reserve components must contribute to the Army's role
    in ways that optimize their capabilities.
        The Army White Paper One Team, One Fight, One Future provides a
    framework for modernizing and integrating the active and reserve
    components to this end. Strengthening integration means that each
    component will actively participate in determinations of how the Total
    Army can best employ assets and allocate funds so that the Nation gets
    the greatest return on its investment in the Army. As we examine how to
    optimize capabilities and strengthen relationships, we are applying
    lessons learned from actual operations and carefully reviewing how to
    allocate forces to the full range of Army missions.
        As a result of the expanded reserve component role in contingency
    operations and lessons learned from other missions, a number of other
    initiatives to foster seamless active-reserve relationships have
    received renewed attention. In addition to the Divisional Teaming pilot
    program mentioned above, we will be exploring new multi-component
    organizational designs to increase integration and enhance
    effectiveness. During fiscal year 1999, two integrated divisions, one
    at Fort Riley and one at Fort Carson, will be created. Each will be
    comprised of Army National Guard enhanced Separate Brigades (eSBs)
    under a division headquarters commanded by an active component Major
    General. This division headquarters will be responsible for the
    training, readiness, and mobilization of the division's eSBs. A plan
    for incorporating Army National Guard companies into active component
    light infantry battalions is also under study. As we explore new force
    mixes and new pairings of units, we will continue to balance new
    equipment fielding and distribution with evolving organizational
    concepts.
        Two years ago, the Army National Guard Division Redesign Study
    (ADRS) recommended the conversion of approximately 48,000 personnel
    authorizations currently in Army National Guard combat force structure
    to provide required combat support and combat service support
    structure. Between fiscal years 2000 and 2005, the Army National Guard
    will convert six combat brigades (19,000 soldiers), with the balance of
    the conversion, six additional brigades, taking place by the end of
    fiscal year 2009. This conversion will provide combat support and
    combat service support force structure that will enhance the integrated
    capabilities of Army components.
        The integration of reserve component personnel into the new heavy
    division structure is a major initiative for the Total Army. Along with
    a range of other initiatives, and operational realities, this is
    indicative of our mutual commitment to give the Nation the greatest
    return for its investment in the Total Army, and to strengthen the
    fabric of the Army and its ties to the Nation it serves.
                               army efficiencies
        The Army has realized, and continues to realize, substantial
    savings through aggressive efforts to increase its efficiency. With
    increasing requirements and decreasing resources, we must do all we can
    to help ourselves. Through such areas as infrastructure reduction, a
    range of logistics and contracting initiatives, and significant
    progress in numerous Defense Reform Initiatives (DRI), the Army plans
    to realize approximately $10 billion in savings during the budget year
    and the outyears. These savings will be used to help fund critical
    requirements. We will continue to expand our efforts to reap savings
    from efficiencies.
        The closing of certain Army bases under the Base Realignment and
    Closure (BRAC) process has been a helpful source of efficiencies for
    the Army. The Army has already closed 102 of the 112 bases scheduled
    for closure within the United States, and has nearly completed all of
    the 667 bases scheduled for closure overseas. The Army BRAC program is
    now yielding more in savings than it costs to execute. Additional base
    closures will produce more cost-effective savings. Other
    infrastructure-related efficiency initiatives include privatizing
    utilities and housing at Army installations and eliminating unneeded
    buildings. In fiscal year 1998, the Army completed the seventh year of
    a Facilities Reduction Program that has divested more than 57 million
    square feet (MSF) of excess infrastructure. By the end of fiscal year
    1999, we expect to have eliminated another seven MSF at a cost of $99.6
    million in RPM. The Army supports future BRAC rounds that will enable
    it to reshape its infrastructure, streamline its installations, and
    reallocate scare resources to higher priorities, such as sustaining
    quality of life and modernizing the force.
        In the logistics arena, the Army is pursuing a number of
    initiatives which offer potential savings of over $2 billion between
    fiscal years 1998 and 2003. The initiatives follow three strategies to
    achieve cost savings: inventory reduction through better management and
    faster delivery, demand reduction through increased component
    reliability, and cost reduction. Army Total Asset Visibility (ATAV) is
    an example of an initiative that is improving efficiency and joint
    warfighting capability. ATAV employs existing and emerging information
    technologies to furnish managers and leaders with information on the
    quantity, condition, and location of assets worldwide. The application
    of Radio Frequency technology, laser optics, and bar coding are
    enabling Army logisticians to monitor cargo movements, redirect crucial
    shipments, and locate critical supplies, even while in transit. Current
    capability provides visibility of more than three million types of
    equipment and supplies throughout the Army and the Department of
    Defense.
        Over the last ten years, the Army has made great progress in
    increasing the efficiency of its business processes. Our implementation
    of the DRI has already yielded results which are reflected in the
    Future Years Defense Program (FYDP). In several areas, we are leading
    the Department of Defense's implementation of these initiatives. For
    example, the Army has the Department of Defense's highest usage rate
    (95 percent) of the Government Purchase Credit Card. We are also a
    leader in implementing ``paperless contracting,'' and are scheduled to
    field the Standard Procurement Systems early next year. Overall, the
    Army has reduced its cost to contract per dollar obligated by over 50
    percent in the last 14 years.
        The Army has also been an aggressive advocate of outsourcing or
    privatizing when it will save taxpayer dollars without affecting the
    Army's ability to accomplish its missions. For example, the Residential
    Community Initiative (RCI), which privatizes the development,
    maintenance, and management of Army family housing, is an initiative
    that will allow the Army to focus on its core competencies while
    providing a better quality of life for its families at a lower cost.
    Just as warfighting experimentation allows the Army to get the most
    capability for the dollar, pilot projects such as RCI allow the Army to
    seek ways of getting a greater return on quality of life for the
    dollar. Other initiatives and DRI efforts, in areas such as the
    Revolution in Military Logistics, acquisition reform, A-76 cost
    competitions, and infrastructure management, have allowed the Army to
    achieve efficiencies that will continue to yield benefits in the years
    ahead.
                     serving the nation: today and tomorrow
        The Army is making a vital contribution to the National Military
    Strategy by ensuring peace and stability wherever American interests
    are at stake. While the Army promotes America and our way of life by
    exporting our values and ideals though its direct contact with many
    parts of the global community, it also remains ready to achieve
    decisive results through force if necessary. While the Army must
    continue to monitor and address factors that may affect its ability to
    serve the Nation, you can rest assured that your Army is on call, and
    will get the job done whenever and wherever necessary.
        How do soldiers, many of whom until recently were young,
    inexperienced citizens, accomplish all that they do for the Nation? The
    answer is simple. America's Army has served America for over two
    centuries by developing and nurturing young Americans from all walks of
    life and turning them into professional warriors and caring ambassadors
    of goodwill. The Army is not only a great steward for the resources you
    provide us, but a great steward of the lives of America's sons and
    daughters. We can all be truly proud of our Army and what it produces
    on behalf of our Nation.
        I am very pleased to represent the Army before you here today. I
    look forward to working with you to ensure that the Army remains an
    effective and efficient organization in its service to our country, and
    that it continues to represent the best that America has to offer.
        Thank you, Mr. Chairman and Members of the Committee, for all you
    have done for the Army, and thank you for this opportunity to appear
    before you on behalf of the Army. I look forward to your questions.

                       STATEMENT OF GEN. DENNIS J. REIMER

        Senator Stevens. General.
        General Reimer. Mr. Chairman, Senator Inouye, I first of
    all join the Secretary in expressing my thanks to you and the
    members of the committee for your great support of the Army in
    1999. The supplemental that you passed initially, when you
    started the fiscal year, and supplemental that you are working
    on now have gone a long way to stabilize the Army. We deeply
    appreciate that, and on behalf of the million soldiers that
    serve in America's Army, I thank you.
        I just simply say the challenge we face is very simple. It
    is: how do we keep the force trained and ready and at the same
    time conduct the most fundamental restructuring since the end
    of World War II, and do it in a constrained resource
    environment.

                              Readiness challenge

        I would like to talk about each of those for a minute. The
    trained and ready piece is one we must measure against the
    National Military Strategy. Our National Military Strategy is
    based upon three pillars of shape, respond, and prepare, and we
    have about 30,000 soldiers on a daily basis doing that. They
    are in Bosnia, they are in Korea, and they are in other places,
    and so there is a lot of commitment in that area.
        Fiscal year 1998 was a watershed year, because it focused
    us on the readiness problem. It was a readiness problem that
    did not surprise us, because we had been through 8 straight
    years of drawdown and reducing the force and 13 straight years
    of declining resources. So, the dialog that started in
    September of 1998 and has continued about the readiness of the
    force is a very important one.

                            Modernization challenge

        In terms of restructuring the force, as you mentioned, we
    must continue modernization and, Mr. Chairman, you are right,
    we are committed to situational awareness and digitization of
    the battlefield. In that regard, the Force XXI Battle Command
    Brigade and Below is a tremendously important system, and we
    are working with your staff in order to make sure that we have
    a complete understanding of what we would like to do in that
    area.
        We are committed to that. There is no turning back. We
    believe that situational awareness is the secret to success in
    the information age. So, we will stay committed to that and
    continue to work with the members of the committee so you are
    fully informed as to what we are trying to do.

                               Resource challenge

        In terms of constrained resources, and during the readiness
    discussion that took place in September of last year, I have
    continually said the Army is about $5 billion per year short.
    The budget that we have submitted to you starts to improve
    that, but it does not completely solve all of the problems. We
    are about $2.6 billion short from where I said we should be.
    With $5 billion per year, most of that is in modernization.
    There is some in near-term readiness, but it starts to make a
    sizeable commitment to improving the readiness, both the near-
    term and future readiness.
        There is no secret, Mr. Chairman, to our success, and to
    our ability to meet the challenges that we face. It is people.

                               Manning challenge

        Senator Inouye, as you mentioned, I think the size and
    strength of the United States Army is terribly important. I
    think we are at the minimum right now, and we need to make sure
    that we continue to grow high quality leaders and make sure
    they are trained in information technology and in how to lead
    troops--the high quality soldiers that are a part of this Army
    and have been a part of our success for so many years.
        Of course, as you mentioned also, this is a Total Army--
    Active, Guard, and Reserve, and I thank you for your kind
    comments about where we are today, but I would give most of the
    credit to Generals Roger Shultz and Tom Plewes behind me,
    because they are the ones who have come in with an approach of
    doing what is right for the Nation, and we have done that, and
    I think we have got the momentum going. I am convinced that
    momentum will continue.
        The most pressing challenge we face in the near term is:
    how do we get the right balance between recruiting, retaining,
    and attrition of our soldiers. Right now, our challenge is to
    be able to recruit. We are a little short in all components, in
    terms of our ability to recruit the soldiers.
        Our retention is high. We are running higher than what we
    expected, and we established pretty high goals, but at the same
    time, our attrition is a little bit too high. So, we must get
    that balance right. We are working very hard on that. But that
    is the most pressing near-term readiness challenge we face.
        The key to solving that challenge is the pay compensation
    package that is included in this budget. To be able to give our
    soldiers a little bit more pay, to fix their retirement system,
    and to reform the pay table is absolutely essential. We have to
    make that happen. Those soldiers are entitled to that
    compensation, and we need to press forward to make it happen.
        During the last 30 days, I have had the opportunity to go
    around and visit the Army. I have been in the Pacific, I have
    been in Europe, and I have been in Southwest Asia. We have
    soldiers walking point in lonely and austere places, places
    like Albania, the Kabals in Southwest Asia, and the
    demilitarized zone (DMZ). They are doing a wonderful job of
    representing not only the United States Army, but the United
    States of America. Those are the soldiers who really are our
    credentials, and that is what this hearing is all about as far
    as I am concerned.

                               prepared statement

        If I could conclude with just a personal note of thanks,
    and to tell you and all the members of the committee, Senator
    Cochran and everybody else, how much I appreciate the great
    support of this committee. You and your staff have been
    absolutely great to work with. Every time we were in a bind, we
    would come to you and we could discuss it and you would help.
    So as I leave, I want to express my heartfelt thanks to all of
    you for the great support you have provided America's soldiers.
    God bless you for that.
        I look forward to your questions.
        [The statement follows:]
                 Prepared Statement of General Dennis J. Reimer
        It is an honor to testify before you on this historic occasion as
    we prepare the Army's first budget of the next century--the beginning
    of the next one hundred years of providing for the security of the
    American people. We are at a significant turning point. This is without
    question a year of transition. In 1998, we saw the convergence of two
    axes, 8 years of drawing down the force and 13 years of straight
    decline in real buying power. These are trend lines that can no longer
    continue if we are going to maintain the trained and ready Army our
    Nation requires. We must chart a new direction. Today we are poised for
    the future. We have an opportunity, with the leadership of the
    Administration and the Congress, to set the right course for what must
    be done in the years ahead. The fiscal year 2000 budget is our down
    payment on the Army America needs for the 21st century.
        In my remarks today, I will update you on the state of America's
    Army, assessing both our preparedness to support the Nation and the
    risks we face in ensuring both current and future readiness.
        First, I want to again thank Congress for their support over my
    tenure as the Army Chief of Staff. In previous years you have
    supplemented our annual budget request, funding key unfinanced
    requirements that have significantly improved our ability to maintain a
    trained and ready force. In particular, we are thankful for the
    supplemental funding to the fiscal year 1999 budget which included, for
    the Army, about $1.4 billion for contingency operations and $375
    million that directly addressed our most pressing near-term readiness
    issues.
        The supplemental funding was much needed and deeply appreciated. As
    I testified before you during the hearings on the fiscal year 1999
    budget, in our efforts to ensure readiness for both today and tomorrow,
    and given the resources we had to work with, we balanced our
    investments as carefully as we could. Providing for current readiness
    meant funding the force so that our soldiers were trained and ready to
    take on any mission they might be assigned today. Future readiness
    required preparing now so that we will have the capabilities needed to
    meet the missions we foresee in the years ahead. To achieve both, we
    stretched our resources as far they could go. We programmed
    efficiencies to get the very most out of every dollar given to us. We
    also built a budget without ``shock absorbers,'' where any shift,
    adding resources in one area, could only be achieved at the detriment
    of providing for other equally vital areas. The fiscal year 1999 budget
    was as ``finely tuned'' as we could possibly make it, distributing
    resources in a manner that dispersed risk prudently.
        The events of the last year quickly upset our delicate balancing
    act. The pace at which we used land forces reflected an increasing
    operations tempo (OPTEMPO) for Active and Reserve units and proved
    higher than expected. The continuing mission in Bosnia, conducting
    domestic operations in response to floods and other natural disasters,
    preparing for the Kosovo Diplomatic Observer Mission, providing forces
    to reinforce our presence in Southwest Asia, and responding to aid
    countries in Central America in the wake of Hurricane Mitch all added
    to the already high global demand for American ground forces. Meanwhile
    at their home stations, commanders were forced to use funds allocated
    for training to address the chronic underfunding of our installations
    and quality of life programs that take care of our soldiers and
    families. Finally, recruiting became an increasingly greater challenge
    as the Army found itself in fierce competition with the other services
    and the commercial sector for quality young men and women. Together,
    these pressures significantly affected near-term preparedness. Though
    we had assumed some risk in current readiness to increase modernization
    funding, the readiness trend lines were declining faster and more
    precipitously than we could accept if we were to be true to our mission
    of executing the National Military Strategy and avoid becoming a
    ``hollow'' Army.
        The supplemental funding Congress provided to the fiscal year 1999
    budget significantly contributed to addressing our most pressing and
    immediate concerns. As a result, we are still recruiting and retaining
    great soldiers. They are well supported and superbly trained. In short,
    the additional funds, while not solving all our problems, provided a
    timely boost to near-term readiness. Again, on behalf of all the
    soldiers and families of America's Army, I thank you for your prompt
    and concerted effort in this particular area.
                                army's challenge
        The fiscal year 1999 supplemental, while helpful and greatly
    appreciated, does not meet our total requirements. Preparing America's
    Army for the 21st century cannot be adequately addressed in one year or
    one budget. We have to think for the long term, making the right
    choices today so that in the future we have the flexibility to pick the
    best options on how to preserve the Nation's place in a free and
    prosperous world. In my testimony today, I want to focus primarily on
    the future--the Army's challenge. I describe this challenge as ``being
    able to remain trained and ready, while conducting the most fundamental
    transformation since the end of World War II, in an era of constrained
    resources.'' To place the Army's proposed fiscal year 2000 budget in
    perspective, I would like to look briefly at each component of the Army
    challenge.
                          trained and ready for what?
        First, we insist that the Army must be trained and ready, but as I
    have testified before, I think we must ask, ``trained and ready for
    what?'' Fundamentally, the mission of America's Army has not changed.
    No one stated it better than General Douglas MacArthur when he said,
    ``through all this welter of change and development your mission
    remains fixed, determined, inviolable. It is to win our wars.'' His
    words are as relevant today as they were when he spoke them to the
    cadets at West Point in 1962. Arguments that we do not need to prepare
    for conventional wars in the future simply lack credibility. Though the
    United States is the world's preeminent military power, as the 1991
    Gulf War demonstrated, we should never assume our forces will always go
    unchallenged or that we can predict with certainty where and when we
    will have to fight. Whatever the military does, it must be prepared to
    win our Nation's wars.
        We know, however, that there is more to winning wars and securing a
    peaceful, stable world than winning battles. There are other tasks,
    equally important for ensuring the security of the United States,
    including deterring potential enemies, supporting domestic authorities,
    defending the homeland, addressing the conditions that might lead to
    war or helping nations recover from hardships and conflict, preempting
    future wars. Before the fall of the Berlin Wall, containing Soviet
    power defined the Army's primary tasks. The Soviet threat provided a
    simple and clear standard for measuring the readiness of American
    forces. Today, our tasks differ from what we performed during the Cold
    War. The United States has moved beyond containment with a new
    strategic approach that emphasizes global leadership and continuous,
    meaningful engagement in world affairs. This profound change is
    reflected in our National Military Strategy which requires us to
    ``shape, respond and prepare.'' We conduct operations to ``shape'' the
    international environment. At the same time, the Army must be ready to
    ``respond'' to crisis worldwide. Finally, we must prepare now for the
    security tasks and challenges we will face in the future. Today, we
    must measure readiness against all the Nation's diverse strategic
    requirements for land forces.
        You do not have to go much further than a newspaper to gain a sense
    of what is required for current readiness. I remember vividly last
    fall, when over the span of a few weeks each day's headlines and
    evening broadcasts carried an important story about America's Army:
      --The President standing with U.S. soldiers in South Korea reminding
            us that a North Korea undeterred, if it chose to, could
            seriously threaten Asia's peace and security;
      --Soldiers in Bosnia and Macedonia, working, on the ground, seeking
            to preserve stability and prevent a regional crisis;
      --Across Central America, U.S. soldiers joining in an international
            effort responding to the devastation left in the wake of
            Hurricane Mitch; and
      --In Southwest Asia, soldiers supporting Operation Desert Fox,
            keeping the pressure on Saddam Hussein.
        These headlines reflected different dangers on different parts of
    the globe, but together they illustrate the wide range of tasks our
    Nation expects the Army to perform well--deterring potential enemies,
    reassuring friends and allies, and fostering regional peace and
    stability. In short, these events demonstrate powerfully that measuring
    and maintaining readiness today is much more complex and challenging
    than during the Cold War.
        Regardless of the diversity of requirements, readiness is and must
    always remain non-negotiable. We must never place soldiers in harm's
    way without thoroughly preparing them for the missions they have been
    assigned. This imperative remains at the forefront of the Army
    challenge.
                               fundamental change
        Fundamentally transforming the Army is the second component of our
    challenge. As we ``shape'' and ``respond'' today, we are changing from
    a Cold War force to an Army prepared to conduct military operations in
    the 21st century--fulfilling the requirements of the third pillar of
    our National Military Strategy, preparing now for the future. To
    accomplish this task the Army has a disciplined, deliberate change
    process to prepare ourselves for the challenges ahead. Our process is
    called Force XXI. The term reflects our commitment to providing the
    Nation the right land forces for the 21st century. The Force XXI
    process incorporates a number of wide-ranging, but integrated,
    activities including research, field trials, wargaming, computer-
    assisted analysis and simulations, strategic management, leadership
    development, training and force modernization programs, all focused on
    providing for the synchronized development of future landpower. Based
    on a decade of practical experience and extensive study and
    experimentation, we have adjusted and refined this process, using it to
    develop the capabilities we need to keep pace with the Nation's
    evolving strategic needs. Force XXI has served us well over the years,
    and it will continue to provide a disciplined and effective framework
    to guide us in the years to come.
        Throughout our implementation of the Force XXI process, we have
    always stressed that the most important thing is that we change at the
    right pace. If we have learned one thing from our post-Cold War
    experience, it is that we cannot wish ourselves into the future. We
    must force change, but change, particularly concerning something as
    serious as the security of the Nation, takes time and must improve our
    capabilities to respond to future challenges. Revolutions in military
    affairs do not occur as quickly or dramatically as history books might
    suggest. Even in modern times, profound change has taken decades or
    sometimes even a generation. A true revolution in military affairs is
    more than simply ``dressing-up'' the current force with high-tech
    weaponry. It requires advancing all the Army's capabilities: equipment,
    doctrine, force mix, training, leadership and quality soldiers. It does
    us no good to have new weapons without quality soldiers trained to use
    them, the doctrine to employ them or the organizations to support them.
    We have to develop all our capabilities in a synchronized manner--and
    that takes time and resources.
        While we change, we must continually provide trained and ready
    forces that are needed every day to support the Nation's strategic
    requirements. The world permits no ``time-outs'' in preparing for the
    future. There has been over a 300 percent increase in the tempo at
    which we use ground forces since the end of the Cold War. We do not
    expect that pace to slow appreciably in the years ahead. So, we must be
    prepared to develop future capabilities and, at the same time, be ever
    ready to place our soldiers in harm's way with the absolute confidence
    that we have done everything required to best prepare them for the job.
    That is the second component of the Army's challenge.
                        an era of constrained resources
        The third component of the Army's challenge is ensuring both
    current and future readiness in an era of constrained resources. Since
    1989, reductions in defense spending have provided a significant
    ``peace dividend.'' More than a decade of decreased defense spending
    has resulted in more than $750 billion in savings that has helped
    energize the economy and turn the budget deficit into a surplus for the
    first time in thirty years. Proportionally, we spend far less on
    defense today than we have in our recent history. In fact, the total
    budget for the Department of Defense accounts for less than three
    percent of the Gross Domestic Product, the lowest level of spending on
    defense since before Pearl Harbor.
        The fiscal year 1999 budget capped 13 years of straight decline in
    real buying power for the U.S. Army. That has required us to manage our
    resources very carefully. The Army adjusted to the fiscal realities of
    the post-Cold War's first decade by significantly reducing our force
    (by almost 700,000 Active, U.S. Army Reserve and Army National Guard
    soldiers and Department of the Army civilians) and closing or
    realigning bases (more than 700 total in the United States and
    overseas). We have improved our business practices and programmed
    efficiencies over the Future Year Defense Plan (FYDP). Most important,
    the Army had to undertake a prolonged ``procurement holiday.'' Since
    1985, Army procurement in real terms has dropped 67 percent. The Army
    has terminated or restructured over 100 programs since 1987. We
    deferred and stretched modernization programs and research and
    development to ensure we maintained minimum essential near-term
    readiness and the trained and ready forces that have served the Nation
    so well over the last decade.
        Today, however, we are at the point where we can no longer delay
    investments in future readiness. Our equipment is getting older and the
    Quadrennial Defense Review reductions for the total force represent the
    minimum level forces required at this time. If we want to maintain our
    ability to provide forces with dominating combat power and minimize the
    risk of casualties, we must ensure that our smaller forces have
    superior capabilities. Quality has a quantity all its own. Maintaining
    our strategic edge requires we provide our soldiers the best equipment
    available.
        Our Force XXI process is a proven concept. Our Advanced Warfighting
    Experiments (AWEs) have demonstrated, under realistic, stressful test
    and operational conditions, real world capabilities that we can field
    right now to harness the potential of information age warfare. Our Army
    After Next wargames have also begun to identify the future capabilities
    that we must begin developing today. These two efforts provide a
    roadmap that is focusing the procurement and research and development
    required to prepare the Army for the 21st century. The results of Force
    XXI efforts also remind us that we must start investing in the future
    now or risk losing our dominant advantage in conducting prompt and
    sustained land operations.
        To prepare for future readiness now, we remain concerned about
    several pressing modernization shortfalls: the pace of replacing aging
    equipment, modernizing the Army's Reserve component, implementing our
    Force XXI digitization initiatives, and procuring next generation
    munitions and combat systems. The longer we delay these key
    modernization efforts, the greater risk the force assumes.
        As I testified before you last year, to meet this third component
    of the Army challenge we assumed more risk in the near-term. We made a
    deliberate effort to shift resources into modernizing the force. This
    conscious decision placed even greater strains on the conduct of
    current operations. It was, however, an investment that we had to make
    to meet our commitments to the soldiers of the next generation.
        Wisely balancing scarce resources, remaining trained and ready, and
    changing at the right pace are the taproot of the Army's challenge for
    the dawn of the 21st century. We have crafted the Army's proposed
    budget for fiscal year 2000 to address these difficult, but vital
    tasks.
                             poised for the future
        Today, we are an Army poised for the future, because we know what
    must be done to meet the Army's challenges. We have built the Army's
    budget on a decade of living in the post-Cold War world--a decade of
    practical experience in using military force to ensure peace while
    promoting prosperity, freedom and justice, and, through Force XXI, a
    decade of groundbreaking experimentation and thoughtful reflection
    about how to best support and defend our country in the decades ahead.
    We have seen what works and what does not. We have learned, not only
    what to change and what not to change, but how to change. Today, we are
    putting this knowledge into action.
                               the army is people
        The greatest and enduring lesson of our past is that people are the
    single most important element of any successful force. As I have said,
    our approach to meeting the Army challenge has been to balance risk,
    but one area in which we cannot compromise is ensuring the quality of
    our force. Quality people remain the foundation of a world class Army.
        Recruiting efforts over the last year have demonstrated mixed
    results. Our recruiting for the Active force was difficult, but
    relatively successful. We came very close to meeting our recruiting
    goals for the year and the indicators of quality remained very high. On
    the other hand, the United States Army Reserve fell 3,700 recruits
    short, while the Army National Guard missed its quantity goals by about
    1,200. These results and current indicators suggest the year ahead will
    be another tough one for recruiters.
        Recruiting remains a continuing challenge. A strong economy and a
    declining propensity to serve make the job of recruiting soldiers
    tougher each year. This challenge is exacerbated by the fact that the
    cost of recruiting each individual soldier has doubled since 1986 from
    $5,300 to more than $10,000 today. For the first quarter of fiscal year
    1999, the Active component missed its recruiting goal by 2,400. Over
    the last few months, I have visited our recruiters around the country
    from Houston, Texas, to Queens in New York City. We have an incredibly
    dedicated, innovative, and professional corps of Army recruiters, and
    we are doing everything we can to give them the tools they need to do
    their job, but they still face a challenging year ahead.
        We are also continuing to closely monitor retention in the force.
    Throughout fiscal year 1998, the primary measures we use to track
    retention remained strong. Over the Christmas holidays, I visited our
    soldiers in Bosnia. They are outstanding representatives of today's
    Army. They are selfless and enthusiastic. In fact, we are finding that
    units serving in Bosnia typically lead the Army in reenlistment rates.
    The hopes and aspirations of the young men and women I talked to are
    representative of how all our soldiers feel. They ask for little and
    give much. They want to be challenged. They want tough, realistic
    training and a chance to do the job for which they've been trained.
    They want to continue to serve. In return, all they ask is adequate
    compensation for their service and sacrifice and a reasonable quality
    of life for themselves and their families.
        We must be vigilant in ensuring our ability to recruit and retain
    quality soldiers. Anecdotal evidence suggests that the repeated and
    prolonged deployments overseas and concerns over the future are
    beginning to take their toll on the force. Our soldiers are deeply
    concerned about pay and compensation issues. They perceive that there
    is a gap between civilian and military pay. Service member pay raises
    have been capped below the Employment Cost Index for 12 of the last 16
    years. Our soldiers are becoming more and more vocal that their
    compensation is not keeping pace with their civilian counterparts.
        Further, many soldiers are concerned about the reduced retirement
    benefits they will receive under the Military Retirement Reform Act of
    1986 (Redux). Since 1992, satisfaction with retirement benefits has
    fallen from 61.8 percent to 39 percent for officers and 44.8 percent to
    28.1 percent for enlisted soldiers. The value of the retirements
    benefit package we have offered soldiers entering the Army since 1986
    is worth 25 percent less than under previous systems.
        To address the serious concerns of our soldiers, the Administration
    has proposed a compensation ``triad.'' This triad includes a
    substantial pay raise for fiscal year 2000, a return to a system of 20-
    year retirement at 50 percent of base pay for soldiers currently under
    the Redux plan, and a reform of current pay scales to increase base pay
    for our noncommissioned officers and mid-grade commissioned officers.
    Recruiters tell me that increased pay and retirement will help them
    make the case with young men and women looking for an attractive career
    option. When I talked with our soldiers in Bosnia, they were equally
    enthusiastic. Make no mistake, our men and women would see passage of
    these initiatives as a powerful statement that their service and
    sacrifice is recognized and appreciated. If possible, Congressional
    approval of a compensation package as quickly as possible would send an
    important, clear and unmistakable signal to those who serve the Nation.
    It is not a question of making anybody rich. It is about making a
    statement that we recognize what they have done--and we truly care.
                    reducing risks in the near and long term
        While we cannot accept a degradation in the quality of our people,
    we also recognize that we must carefully evaluate and manage risks in
    operating the force. Risks reflect our measure of confidence in
    supporting the Nation's strategic needs and minimizing causalities in
    the conduct of operations. I would like to review my most serious
    concerns for both near- and long-term readiness and how we are working
    to mitigate these risks as much as possible.
                              protecting training
        With regard to current readiness, ensuring tough, realistic
    training is our best hedge against risk. The Army's Combat Training
    Centers (CTCs) remain the best training grounds in the world. Over the
    years we have expanded the capabilities to train at the CTCs,
    increasing the opportunities to conduct brigade level training and
    enhancing live-fire training. As a result, today the CTCs produce
    confident, skilled leaders and combat ready, cohesive units for the
    Active and Reserve forces. In addition to ensuring combat readiness, we
    have used the CTCs to prepare units for a wide-range of other military
    missions enroute to their operational theaters. The success of our
    soldiers in Bosnia is directly related to the rehearsal training they
    conduct at the CTCs before deployment. While the quality of the CTC
    experience remains superior, we have seen over the last year that the
    entry level proficiency of units, at the company, battalion and brigade
    level, is not as high as in the past. This is the result of decreased
    collective training at home station. Ensuring adequate resources to
    support home station training for both our Active and Reserve component
    forces will significantly enhance the CTC training experience and
    improve the Army's near-term readiness to support the full range of
    military missions.
        Ensuring adequate home station training requires balanced and
    sufficient resources for training, base operations (BASOPS), and real
    property maintenance (RPM) accounts. In recent years, funding for
    BASOPS and RPM has been insufficient to run our installations in a way
    that provides our soldiers and families with an adequate quality of
    life. We have had to assume increased risk in these accounts for
    several years to protect essential training. Now, however, services and
    facilities are deteriorating to the point that we can no longer take
    care of our people and meet their expectations for an adequate quality
    of life. As a result, our commanders have been forced to migrate funds
    from training accounts to BASOPS. The fiscal year 1999 supplemental
    allowed us to increase BASOPS funding. The fiscal year 2000 budget
    increases funding for BASOPS to 95 percent of the requirement. These
    additional resources will help significantly to reduce the migration of
    funds, thereby protecting training and enhancing quality of life--that
    means improved readiness. The needs of our installations, however,
    cannot be solved in one or two years of funding increases. Plus-ups
    have helped stem the deterioration of installations, but now we have to
    rebuild, revitalizing our facilities and quality of life initiatives.
    We must continue to provide adequate funding in the right balance for
    training, BASOPS, and RPM.
        In addition, prompt funding for contingency operations is also
    critically important. Until funding for these operations is
    forthcoming, we must reprogram funds from other accounts. As a result,
    planned training, maintenance, and repairs have to be deferred,
    disrupting commanders' training plans and sustainment programs. We must
    fund contingency operations promptly, giving commanders in the field
    adequate and dependable resources so that they can make the best and
    most efficient use of their assets.
                             using the total force
        Reducing risks also requires getting the most out of all our
    forces. The United States Army Reserve and the Army National Guard
    comprise 54 percent of the Army. We simply cannot conduct any mission
    without the contributions of the Total Force. We cannot, however,
    simply transfer the high OPTEMPO of the Active force to the Reserve
    components. Rather, we have to make the best use out of the unique
    capabilities and attributes of each part of the force.
        In the past year, we have made tremendous progress in seeking
    innovative ways to efficiently combine the assets of all our
    components. One important initiative is ``Divisional Teaming,'' a pilot
    program that will pair selected Active and National Guard combat
    divisions. This is necessary to address the force structure/
    requirements mis-match associated between a force designed to fight the
    Cold War and one that can support the National Military Strategy. Under
    the Divisional Teaming concept, partnered divisions will conduct
    leadership exchanges, joint planning, training, and readiness
    assessments. They will refine and practice their teaming skills through
    deployments at the Army's National Training Center at Fort Irwin,
    California, and the Joint Readiness Training Center at Fort Polk,
    Louisiana. When called upon to support operational requirements, the
    divisions will team their resources for rapid response. The Active
    division will take the lead in global crisis response. The Army
    National Guard Division will augment and assist its partnered command,
    speeding deployment of the Active division and then conducting its own
    follow-on, post-mobilization preparations. In domestic emergencies, the
    Active division will be prepared to reinforce the Army National Guard
    division's lead. Through this partnership, both units will benefit, and
    the Army will improve its capability to respond to every military
    operation.
        Last year, we announced that the Army National Guard's 49th Armored
    Division, headquartered in Austin, Texas, will deploy to Bosnia,
    providing the command and control for Army units participating in Joint
    Endeavor. The 49th Armored Division, paired with the 1st Cavalry
    Division at Fort Hood, Texas, will form the first Divisional Team.
    Supporting the Bosnia mission will give us the first opportunity to
    evaluate the full potential of the Divisional Teaming relationship.
    While the 1st Cavalry Division uses its experience from serving in
    Bosnia to help prepare the 49th Armored Division for its mission,
    Active forces of the 1st Cavalry will also be available to help provide
    the domestic response and assistance the 49th Division normally
    furnishes to its home state. As the two divisions work together to
    prepare for and execute the Bosnia mission, they will lay the
    groundwork for creating an enduring division-to-division relationship
    and establish the framework for effective Divisional Teaming.
        Divisional Teaming is just one example of the many Active-Reserve
    initiatives that are creating ``win-win'' opportunities for all the
    Army components. It is also a powerful demonstration that today's force
    is becoming much different from the Cold War Army. We are ``broadening
    the base'' to better meet the diverse needs of the National Military
    Strategy with a smaller force. At the same time, we are trying to build
    more ``predictability'' into the systems so we can better employ our
    Reserve component forces.
                                the strike force
        Reducing risks to future readiness also requires making the right
    targeted investments now, not just in new equipment, but in the right
    organizations, training methods, doctrine, leadership and personnel
    development programs. One of the most important of our future-oriented
    initiatives is the upcoming Army Strike Force experiments with the 2nd
    Armored Cavalry Regiment at Fort Polk, Louisiana.
        Today, we know that our land forces are applicable to a wide-range
    of critical security tasks. Unit for unit, our forces are more lethal,
    more versatile and can deploy faster than at any time in our Nation's
    history. In qualitative terms, their capabilities are unmatched by any
    army, anywhere else in the world. In addition, we are well on our way
    to developing the future-oriented capabilities that incorporate new
    path-breaking technologies and prepare us for the 21st century's
    security challenges. We have the range of capabilities we need--and
    they are improving year by year. What we must do now is enhance our
    ability to adapt them to each strategic requirement. The solution for
    best harnessing the full potential of landpower is to embed the element
    of adaptability into our forces, maximizing our capacity to provide
    just the right combination of forces for each unique strategic
    requirement.
        Today, when we are faced with unique contingency requirements that
    fall in the gap between what can be provided by the rapid response of
    our light forces and the tremendous combat power of our heavy forces,
    we must deploy multiple divisions (a heavy/light mix) or create an ad
    hoc task force. This enormously complicates the challenge of deploying,
    controlling and sustaining forces.
        In addition to meeting the challenge of providing the right mix of
    force for conventional operations, we also are increasingly concerned
    about our ability to tailor our forces to deal with other emerging
    threats. We must be concerned that:
      --Potential foes are far more likely to seek out asymmetrical
            responses, avoiding our strengths and attacking our
            vulnerabilities.
      --The proliferation of weapons of mass destruction--chemical,
            biological and nuclear arms that can hold both military forces
            and civilian populations hostage--will continue.
      --Enemies may chose to attack our homeland, as well as threaten our
            forces abroad.
      --Hostile powers may attempt to expand the realms of conflict into
            both space and ``cyberspace.''
      --Our military forces, designed for conflicts between nation-states,
            are less suited for dealing with emerging transnational threats
            whose power, influence and interests transcend borders.
      --The pace of urbanization across the globe is a growing issue for
            military operations. When conflict moves to the cities, the
            cost in human terms rises dramatically and radically alters how
            we must fight and what tools we can bring to bear.
        We must be able to mix and match the capabilities of our ground
    forces to meet these threats.
        Under the Strike Force concept, we will develop a system that
    allows us to draw just the precise capabilities we need for a given
    mission and integrate them into an efficient organization that can
    project power quickly and conduct effective early entry contingency
    operations. For example, a theater commander might be faced with the
    difficult task of seizing an airfield and then defending it against a
    combination of conventional forces, terrorist threats, and weapons of
    mass destruction. The Army's 82d Airborne Division from Fort Bragg,
    North Carolina, is the world-class expert in taking down airfields, but
    it doesn't have the firepower and resources to hold off a combination
    of conventional and asymmetrical threats. This mission requires a unit
    that can bridge the capabilities provided by our heavy and light
    forces. The Strike Force could incorporate 82d Airborne elements to
    seize the airfield; urban warfare specialists from the 10th Mountain
    Division to guard the urbanized avenue of approach to the airstrips; a
    slice of heavy fire support and army aviation to defeat conventional
    forces; and teams of experts from Special Operations Forces, the Army
    Reserve and Army National Guard to counter terrorist, chemical and
    biological warfare threats. Not only would the Strike Force
    headquarters control these assets, but it would also serve as a focal
    point for integrating the other joint capabilities that the force would
    need for the mission.
        The key to the Strike Force concept will be the command and control
    capabilities we embed in the 2nd Armored Cavalry Regiment. We will
    start by making the Strike Force the Army's premier operational
    headquarters, incorporating lessons learned from Advanced Warfighting
    Experiments and emphasizing the knowledge, speed, and power achieved
    through information dominance. The force's command and control will
    provide the core around which we can task organize an array of Army
    capabilities as missions require and provide the linkages to quickly
    integrate the right set of joint capabilities. Tactical operations,
    logistical support, planning, joint coordination, liaison, and
    rehearsals will all be facilitated by the rapid exchange of high
    volumes of accurate, timely, relevant information made possible by
    transforming the regiment into a unique knowledge-based organization.
    We will combine the best information-age technology with the most
    robust and versatile command and control systems available to create an
    unmatched capacity to collect, understand, and distribute information.
    The regiment will become, in effect, a ``receptacle'' headquarters into
    which we can ``plug-in'' the potentially wide range of capabilities we
    need.
        As we develop the Strike Force it will provide:
      --Just the right force mix for a contingency operation, making the
            most efficient use of our existing capabilities.
      --An early entry force that can be deployed rapidly.
      --The means to more effectively tailor forces for each mission.
      --Improved links to joint forces, and supporting governmental and
            non-governmental agencies.
      --The capability to better deal with emerging threats such as urban
            warfare, Weapons of Mass Destruction and ballistic missiles.
      --A test bed for experimenting with the capabilities we need for the
            Army After Next, developing both the human dimension and the
            technology we will require in the future force.
        The Strike Force will give us a real world capability today, and
    with our other Force XXI efforts, will help reduce risk because it
    allows us to get the most out of today's force. More important, these
    efforts are also serving as our test bed for developing the kinds of
    leaders, organizations and capabilities we will need in the Army After
    Next. By beginning to identify and develop today the capabilities we
    require to deal with future security challenges, we reduce risks to
    long-term readiness as well.
        Together our teaming and Strike Force concepts will enhance current
    readiness and provide the basis for the Army After Next (AAN) force--a
    force designed for the information-age and indispensable to the needs
    of the Nation. It will be a truly ``seamless'' force (Active, United
    States Army Reserve and Army National Guard) which will continue the
    great tradition of selfless service to the Nation.
                          a down payment on the future
        We do not have the resources to do everything that must be done.
    Despite our best efforts to mitigate risks through balanced
    investments, efficiencies and innovative practices and capabilities,
    concerns remain. I have quantified our readiness risk before Congress
    as about $5 billion each year over the course of the FYDP, not
    including requirements for increasing compensation, fixing the
    retirement system, and funding contingency operations.
        The fiscal year 2000 budget makes a significant down payment on the
    future. In particular, it addresses many of our most serious concerns
    in near term readiness and allows us to continue to transform the Army
    through the initiatives of our Force XXI process.
        There is, however, much work still to be done. It will take us more
    than one year to prepare for the future. In particular, while the
    President's fiscal year 2000 budget proposal addresses many of the
    concerns associated with training and readiness, it is only a down
    payment on the resources needed to fund modernization programs to the
    level required to assure future readiness.
        I look forward to discussing these issues with you. With the
    leadership of the Administration and the Congress, I am confident we
    can make the right steps toward building the Army our Nation will need
    in the 21st century.
                                     ______

     A Statement on the Posture of the United States Army, Fiscal Year 2000
        Editor's Note.--This text of the fiscal year 2000 Army Posture
    Statement has been converted from its original publication software to
    support Congressional Committee publishing requirements. The pictures
    and charts that accompanied the original text have therefore been
    omitted from this version. The pagination is also different from that
    indicated in the Table of Contents. The original document may be viewed
    on the internet at http://www.army.mil until February 2000. Limited
    numbers of hard copies are available from the editor of the Army
    Posture Statement at (703) 695-9913.
                                    Foreword
        America's Army is transforming itself in accordance with the
    National Military Strategy to a force that measures its readiness not
    only by its preeminent mission--to fight and win our Nation's wars--but
    also by its readiness to meet the challenges of preserving peace and
    countering emerging threats. The transformation has stretched the Army
    from a force oriented on responding to the dangers of the Cold War to a
    force capable of shaping the international environment, responding to
    crises that challenge U.S. security interests, and preparing for a
    range of threats and opportunities. The Army has attained an
    unprecedented achievement by meeting the continuous demands of current
    readiness while adjusting its focus and structure in significant ways.
    Despite the toll this transformation and increasing requirements have
    taken on our people, equipment and systems, the Army is proud of its
    central role in U.S. engagement around the world.
        The Army's challenge is to take care of our people while meeting
    near-term readiness demands and preparing for the requirements of
    future readiness. To assure we can accomplish future missions,
    leveraging information technology to revolutionize military operations
    over the next ten to fifteen years is a key priority. We remain
    committed to providing the American people the most readiness for the
    resources provided. Accordingly, we continue to focus on and support
    more efficient ways of doing business, such as the Defense Reform
    Initiatives. In conjunction with these efforts, America's role as a
    global leader makes it vital to fund the Army at a level commensurate
    with the requirements of the world's preeminent land combat force.
                               Executive Summary
        ``I do not know when or where, but we will sometime place soldiers
    in harm's way, on short notice and ask them to defeat a determined and
    dangerous foe. When that happens, we should be satisfied that we have
    done our best to prepare them for the task at hand.'' General Dennis J.
    Reimer, CSA
        America's Army is the most potent land combat force in the world.
    The Army is indispensable to the protection and furtherance of our
    national interests because it has greater utility across the full range
    of contingencies than other types of military force. This utility comes
    from Army capabilities for executing a broad range of operations from
    nation building and disaster relief to defeating enemies on the
    battlefield. Generating and sustaining these capabilities over time
    requires a deliberate, complex process involving people, readiness, and
    modernization. The Army's challenge in recent years has been to take
    care of people, keep the force trained and ready, and simultaneously
    continue the most fundamental institutional change since World War II.
    Meeting this challenge with constrained resources has stretched the
    fabric of America's Army. We are committed to be as efficient as we
    can, continuing robust efforts to move forward on the Army's part of
    the Defense Department's Defense Reform Initiatives and the Revolution
    in Business Affairs. The fiscal year 1999 supplemental funding measure
    approved by Congress and the President's fiscal year 2000 Budget
    support our efforts, and address many of our most pressing readiness
    concerns.
    The Geostrategic Environment and National Military Strategy
        Changes to the National Military Strategy (NMS) in response to the
    geostrategic environment have driven the Army's transition since the
    final years of the Cold War. The containment strategy of the previous
    era demanded an Army focused on the Soviet threat. The U.S. Army
    maintained a higher level of forward presence overseas than it does
    today, and training was based largely on countering predictable Soviet
    doctrine. Increasing instability in some regions made the need for
    engagement evident even before the Soviet Union's demise. However, the
    end of the Cold War's bipolar stability allowed a more rapid emergence
    of regional instabilities and transnational challenges, such as
    terrorism, aggressive behavior by rogue states seeking power and
    resources, and the proliferation of weapons of mass destruction. These
    threats are much less predictable, and, consequently, the United States
    may face some combination of them at any time. The diverse nature of
    these emergent threats fostered a new strategy for using America's
    global leadership to make the world a safer place. By mitigating
    potential threats through shaping operations, countering actual threats
    and responding to crises, and preparing for future threats, the new
    military strategy seeks to promote global stability. As a result of the
    geostrategic environment and the NMS, the Army is transforming itself
    to a force based on capabilities needed for shaping and responding,
    while at the same time preparing for the future.
        The Army's most fundamental capability is the exercise of
    sustained, comprehensive control over people, land, and natural
    resources. Putting American soldiers on the ground is the most
    effective method to shape the international environment in ways
    favorable to our interests. Army shaping activities are executed face-
    to-face and one-on-one with the armies and people of other nations.
    Such interaction has a lasting and positive effect that simply cannot
    be achieved through less direct engagement. Putting American soldiers
    on the ground is the most credible response to potential aggressors and
    to those who would exploit instability for their own ends. It is also
    the most tangible evidence of the nation's commitment to both allies
    and adversaries. Bombs and missiles can destroy selected targets and
    temporarily deny control of terrain, but they cannot provide the
    presence required to compel compliance with the rule of law and the
    processes of peace. Maintaining the capability to project and employ
    land power in the information age is essential to protecting the
    nation's interests against the diverse threats likely to emerge in an
    uncertain future.
        Even as changes in environment and strategy have increased the
    frequency with which the Army is employed worldwide, social and
    economic factors created pressure for reducing defense spending. The
    Army has transitioned to a force about one-third smaller than it was in
    1989 and has capitalized on the end of Cold War containment to shift
    many forces from overseas bases back to the continental United States
    (CONUS). The Army has sought increased efficiency in its operational
    and business practices to meet today's more frequent demands for
    American presence with a smaller force and budget. Exploiting the
    potential of information technology, enhancing the integration of
    active and reserve component forces, and implementing a broad set of
    defense reforms and Army initiatives are among the avenues by which the
    Army is becoming a more effective and efficient force.
        Much leaner than it was ten years ago, the Army nonetheless finds
    itself almost continuously engaged at home and abroad. More than 60
    percent of the people participating in 32 of the 36 major military
    deployments since 1989 have been soldiers, yet the Army receives only
    25 percent of the defense budget. Proud of its central role in the
    execution of the National Military Strategy, the Army can continue to
    execute this strategy with acceptable risk if provided with sufficient
    resources. However, the resource constraints of the past fourteen
    years, coupled with the high pace of operations, have severely
    stretched the fabric of the Army. While we remain ready today to play
    the central role in the National Military Strategy, adverse trends in
    recruiting and retention (people), readiness, and modernization must be
    countered to assure sustained readiness for today and into the 21st
    century. The fiscal year 1999 supplemental and the increase in Army
    Total Obligation Authority (TOA) in the fiscal year 2000 Budget and
    outyear spending plan are helpful and are being applied to improve
    readiness. These funding increases will address many of the concerns
    expressed by Army and other Department of Defense leaders by
    demonstrating our commitment to take care of our people and to enhance
    near-term readiness. Modernization needs are being addressed by holding
    investments at roughly the same levels forecasted in last year's
    President's Budget with the expectation of growth in the outyears.
        Last year, the Army identified the need for an annual increase of
    $5 billion over the fiscal year 1999 Budget in addition to increases
    required for contingency operations, pay increases and reform of
    military retirement. The President's fiscal year 2000 Budget sends a
    strong signal of support and concern for the welfare of our soldiers,
    Army civilians, and their families. The budget provides for known
    contingency funding and enhances near-term readiness. While funding
    increases have been helpful in many areas, modernization continues to
    carry the largest burden of risk. Increases to readiness accounts will
    reduce the need to migrate funds from modernization, and Army-wide
    efforts to become more efficient, along with Defense Reform Initiatives
    and a capacity for additional Base Realignment and Closure, create the
    potential for increased funding for the modernization account. The
    Army's Force XXI process has provided a roadmap for transforming the
    Army to meet 21st century requirements. Funding levels will be the
    primary determinant of the pace at which that transformation occurs.
    Supporting the National Military Strategy
        In spite of resource constraints and signs of wear, America's Army
    is supporting the NMS around the world, 24 hours a day. On an average
    day in fiscal year 1998, over 122,000 soldiers stationed overseas and
    28,000 soldiers deployed away from home station were conducting
    operations in more than 70 countries.
        Army personnel conduct numerous activities that help shape the
    international environment. Continued support for observer missions in
    Macedonia, the Multinational Force and Observers in the Sinai, and
    along the border between Ecuador and Peru help foster stability and
    promote peace. Active and reserve component soldiers and Army civilians
    contribute to deterrence through forward presence. Soldiers and Army
    civilians also enhance our relationships with allies and friends
    through a variety of programs. In fiscal year 1998, army-to-army
    activities ranged from senior-level contacts to the training of 5,980
    foreign military personnel under the International Military Education
    and Training (IMET) and Foreign Military Sales programs. Such
    activities foster cooperation with other nations, and offer a unique
    opportunity to influence the character of other nations' militaries in
    a positive way. Army participation in Partnership for Peace and
    associated exchanges and exercises helped set the stage for the
    peaceful enlargement of NATO while building the foundation for
    cooperative efforts with non-NATO forces as well. American soldiers
    trained soldiers of other nations on the tactics, techniques and
    procedures of humanitarian demining and counter-drug operations. Under
    the African Crisis Response Initiative, American soldiers provided
    peacekeeping training to soldiers of several African nations. These
    important operations are proactive: shaping the world to be a safer
    place.
        The Army also responds to crises to protect American interests
    around the world with its decisive combat, logistics, and
    administrative capabilities. The deployment of the 1st Brigade (-) of
    the 3d Infantry Division (Mechanized) to Kuwait in February, 1998,
    demonstrated such a response. Within 96 hours, the brigade had
    completed its deployment from the United States and occupied defensive
    positions in Kuwait. In support of Operation Desert Fox in December,
    the Army once again rapidly deployed units to reinforce elements
    already deployed for training in Kuwait. The presence of several
    thousand American soldiers effectively deterred any threatening
    activity by Iraqi ground forces. While Desert Fox was unfolding, the
    Army also provided substantial support for Hurricane Mitch Disaster
    Relief in Honduras, Nicaragua, El Salvador, and Guatemala through both
    Joint Task Force-Bravo and the Disaster Relief Joint Task Force. In
    Bosnia, the Europe-based 1st Armored Division, with active and reserve
    component augmentation, provided the U.S. contingent to NATO forces
    ensuring compliance with the Dayton Accords for most of last year. The
    CONUS-based 1st Cavalry Division assumed responsibility for the U.S.
    portion of this contingency operation in October, 1998. Closer to home,
    soldiers and Army civilians were instrumental in providing support for
    numerous disaster relief efforts in the United States and its
    territories.
        In addition to its shaping and responding activities, the Army is
    preparing for emerging threats ranging from the proliferation of
    weapons of mass destruction to attacks on our information systems. The
    Secretary of the Army's role as the Executive Agent for the Department
    of Defense (DOD) Domestic Preparedness program places the Army in the
    forefront of this key initiative. The program is the centerpiece of
    joint and interagency efforts to prepare our military and civilian
    ``first responders'' for incidents involving weapons of mass
    destruction (WMD). By giving local officials the tools to train their
    own response teams, the Domestic Preparedness program will provide 120
    cities with the ability to train first responders by the end of fiscal
    year 2002. A Federal Training Team, which includes reserve component
    instructors, conducts the initial training for individuals who will set
    up the local programs. At the end of fiscal year 1998, a total of 9,950
    first-responder trainers in 32 cities had received the training. In the
    area of cyber-defense, the Army is implementing measures to protect
    friendly information and decision making processes from intentional
    disruption. The addition of Information Operations specialists at
    division level and above, installation of intrusion detection devices,
    and development of regional Computer Emergency Response Teams in both
    the active and reserve components are among the steps the Army has
    taken in this regard.
        Efforts to field the first information age Army continue as well.
    In response to the promise of information technology, Joint Vision 2010
    (JV2010) and Army Vision 2010 (AV2010) have identified operational
    concepts and patterns of operation to guide the development of
    information-based warfighting capabilities. The Revolution in Military
    Affairs (RMA) refers to increased combat effectiveness through the
    integration and exploitation of information technology. Information
    technology allows the Army to give every friendly soldier on the
    battlefield a continuously updated picture of where other forces--both
    friendly and enemy--are and what they are doing. Each element of the
    friendly force is thereby made more effective because the ability to
    share information makes it possible to better concentrate the effects
    of friendly combat power against the enemy's vulnerabilities. A force
    that can achieve information dominance to this degree should also
    reduce fratricide, the accidental casualties within its ranks caused by
    misidentification. Another revolution enabled by information
    technology, the ongoing Revolution in Military Logistics, is
    transitioning the Army to a logistics system based on rapid
    distribution of supplies and equipment to units when they need them, as
    opposed to a system based on prepositioning large stockpiles in
    anticipation of unit needs. This ``distribution-based'' system employs
    automated systems for total asset visibility, communications, new
    organizational designs, improved platforms, and new distribution
    concepts. Such a system will enhance the Army's operational
    capabilities, increase efficiency by cutting demand, and reduce the
    deployment time for follow-on forces.
    Experimentation
        The Army's Force XXI process is building the first information age
    Army. By using a variety of different field training experiments, in
    which soldiers use a blend of old and new equipment under realistic
    conditions, the process fuels the development of equipment and
    concepts. Experimentation under realistic conditions permits a holistic
    approach to change. Soldiers gain an appreciation for the strengths and
    weaknesses of new concepts and prototypes under field conditions,
    provide immediate feedback to materiel developers and industry
    representatives, and then assess improvements. This so-called ``foxhole
    to factory'' linkage leads to a significantly faster development cycle,
    known as spiral development, and permits a more rapid fielding of
    equipment with information technologies to soldiers and units.
        The Force XXI process not only benefits the Army by providing
    feedback for equipment development, but also reveals the implications
    of new equipment for the Army's core competencies--our ``six
    imperatives.'' These imperatives--force mix, doctrine, training, modern
    equipment, and leader development--must support one another at any
    given point in time to produce readiness. When changes in one
    imperative are accompanied by appropriate corresponding changes in the
    other imperatives, we say the imperatives are synchronized. The recent
    heavy-force experiments conducted with the 4th Infantry Division
    (Mechanized) (4ID(M)) offer an example of the power of the Force XXI
    process for synchronizing the imperatives. The experiments included a
    brigade-level Task Force XXI Advanced Warfighting Experiment (AWE) at
    the National Training Center and a computer-driven, division-level AWE
    at Fort Hood. Lessons learned from these experiments led to a redesign
    of Army heavy divisions. The heavy division redesign features a
    reduction in the number of tanks and infantry fighting vehicles (from
    58 to 44) in each battalion. This reduction, essentially a change in
    the Army's force mix, is possible because of the increased lethality
    that information technology (modern equipment) allows. Through its
    experimentation with modern equipment, the Force XXI process
    illuminates desirable changes, such as the heavy division redesign,
    across the other imperatives.
    People
        Quality people are the first of the six imperatives and the single
    most important factor for maintaining readiness. The Army is people.
    Army capabilities to shape, to respond, and to prepare are embedded in
    the foundation our people provide. The 25-year-old Sergeant commanding
    a tank in California, the 18-year-old Private First Class serving in
    the crew of a Patriot missile launcher in Saudi Arabia, the soldiers on
    leave from civilian jobs to serve their Nation, and countless others
    performing demanding tasks all over the world are our credentials: they
    do the things that make us the world's best Army. Not just anyone can
    do these things, nor can our Nation afford to send just anyone to do
    them. It is the people who do the unexpected, extraordinary things in
    difficult circumstances who make the Army much more than the sum of its
    parts. Given the importance of people to our Army, recent recruiting
    trends and retention indicators are causes for concern.
        The Army failed to meet its recruiting goals for fiscal year 1998
    and for the first quarter of fiscal year 1999. The active component
    fell about 800 enlistees short of the target last year, and missed this
    year's first quarter target by 2,300 soldiers. The Army National Guard
    (ARNG) and United States Army Reserve (USAR) were about 1,200 and 3,700
    recruits short of fiscal year 1998 targets, respectively. Quality is
    also an important indicator of people trends. The Total Army continues
    to meet most of its recruiting quality goals.
        While overall retention percentages still exceed requirements,
    these percentages mask retention difficulties among noncommissioned
    officers (NCOs) and soldiers with certain Military Occupational
    Specialties (MOS). Also, over the past seven years, the number of
    officers and enlisted soldiers indicating an intent to remain on active
    duty has declined by more than five percent. The Spring 1998 Sample
    Survey of Military Personnel shows the top two reasons cited by
    officers for leaving the military to be the amount of time separated
    from family and the amount of basic pay. Since 1992, satisfaction with
    retirement benefits fell from 61.8 percent to 36 percent for officers
    and from 47.2 percent to 28.8 percent for enlisted soldiers. The REDUX
    retirement system resulting from the 1986 Military Retirement Reduction
    Act was the fastest-rising area of discontent for our soldiers on these
    surveys.
        Recruiting trends and survey results confirm that compensation,
    retirement, and quality of life issues are important factors for
    recruiting and retaining quality people in the Army. The commitment of
    the Administration and Congress to increase pay and reform military
    retirement are important steps to reinforce the Army's recruiting and
    retention efforts, and will send a strong signal to soldiers that the
    nation values their service.
    Readiness and Training
        While people are indispensable to our Army's success, there are
    other dimensions to maintaining readiness. Military readiness is a
    measure of capabilities against requirements. The Army generates
    capabilities to meet the requirements of the National Military Strategy
    by synchronizing the six imperatives continuously over time. When
    properly synchronized, these imperatives complement each other and
    create optimal readiness. Today's readiness is the product of our
    investments in these imperatives over many years. The development of
    today's battalion-level officer and NCO leaders, for instance, began
    almost 20 years ago.
        Unfortunately, readiness can dissipate far more rapidly than it can
    be built. Underfunded Operations Tempo, Base Operations, and Real
    Property Maintenance accounts, as well as late reimbursement for
    contingency operations, detract from training and readiness. Sustained
    underfunding of modernization, and subsequent delayed fielding of new
    and modern equipment, can have serious impacts on the other
    imperatives. Recent difficulties in recruiting and retention threaten
    to erode the pool of outstanding soldiers that are the heart of today's
    readiness and the source of tomorrow's leaders. All of these recent
    issues can, if left unresolved, disrupt the imperatives and unhinge
    readiness.
        Realistic training for the Army's soldiers and civilians supports
    readiness by maintaining land power proficiency for the full spectrum
    of military operations. Army training is performance-oriented; soldiers
    and civilians perform essential tasks to established standards under
    realistic conditions. For soldiers who serve in gender-integrated
    units, gender-integrated training is a key aspect of training realism.
    Units are teams, and soldiers learn to perform their duties best when
    they are trained from their first days of service to understand and
    respect other members of their team. Gender-integrated training
    supports the Army's need to build teams and to have all soldiers feel
    like valued members of their teams. The Army's Combat Training Centers
    (CTCs) are another example of the Army's commitment to training
    realism. At CTCs, units conduct sustained operations against a skillful
    opposing force and under the watchful eye of a professional cadre well-
    versed in the latest doctrine. CTCs conduct the world's best training.
    Continuing to enhance CTC operations will be a critical contributor to
    future Army battlefield successes.
        While the quality of Army training is second to none, the challenge
    in recent years has been to resource enough training, particularly at
    home station. Recent reports indicate that units are arriving at CTCs
    at lower levels of proficiency than in the past. Resource constraints
    for Base Operations (BASOPS) and Real Property Maintenance (RPM)
    accounts have been areas of concern affecting training and readiness.
    In the past, the Army resourced training primarily through Operations
    Tempo (OPTEMPO) accounts. OPTEMPO captures the fuel and repair parts
    costs associated with driving or flying Army equipment the number of
    miles or hours associated with executing certain groupings of training
    exercises. OPTEMPO does not capture many costs associated with
    training, such as the cost of training aids and simulators, ranges, and
    maintenance operations. The Army generally funds OPTEMPO at 100 percent
    of annual requirements for priority units, but has had to underfund
    BASOPS and RPM accounts in order to do so. BASOPS and RPM, however,
    fund many training costs not covered by OPTEMPO, as well as quality of
    life programs and facilities. In recent years, the cumulative effect of
    underfunded BASOPS and RPM has forced many commanders to decrement
    OPTEMPO accounts to pay for readiness-related BASOPS and RPM needs.
    Stemming this so-called ``migration'' of OPTEMPO dollars requires
    sufficient resourcing for BASOPS and RPM.
        BASOPS and RPM affect readiness through their impact on training,
    maintenance, deployment infrastructure, and quality of life. Average
    RPM funding from fiscal year 1990 to fiscal year 1997 was only 56
    percent of annual requirements, resulting in a backlog of facility
    maintenance requirements. BASOPS, which includes essential items such
    as utilities and municipal services, has traditionally been funded at a
    higher level; the fiscal year 1999 supplemental funding measure
    increased BASOPS funding from the budgeted level of 84 percent to 91
    percent. The fiscal year 2000 budget and outyear proposal will allow
    better resourcing of these accounts. BASOPS funding is at 95 percent
    from fiscal year 2000 through fiscal year 2005 under this plan, with
    RPM at 75 percent through fiscal year 2001 and 90 percent from fiscal
    year 2002 through fiscal year 2005. RPM funding at these levels will
    allow the Army to begin reducing the facilities maintenance backlog
    beginning in fiscal year 2003.
        The Army's substantial contributions to shaping and small-scale
    contingency operations also have a readiness cost. For combat units,
    the skills required for peace operations are oftentimes not those
    required for combat. Training and execution of such operations detract
    from unit combat training, and consequently, from warfighting skills.
    Nevertheless, these operations constitute a critical, proactive
    component of national security activities, and the Army is the force
    best suited to conduct them. For many combat support and logistics
    units, operations such as Bosnia offer an opportunity to operate under
    realistic conditions. Combat units also realize some training benefit
    from deploying, conducting force protection activities, and
    implementing rules of engagement. However, these missions increase the
    pace of operations in units by creating additional training
    requirements that compete for limited training time and, in some cases,
    decrease the level of training on warfighting skills.
        The Army has also had to use OPTEMPO funds in the past to pay for
    contingency operations in the past. Delayed reimbursement for these
    operations can detract from unit training by causing cancellation of
    scheduled training due to lack of funds. Even though the money may
    eventually be replaced, it is impossible to replace the loss of
    training time associated with this phenomenon. Timely, non-offset
    funding for contingency operations, such as that contained in the
    President's fiscal year 2000 Budget, is important for current
    readiness.
    Modernization
        While the fiscal year 2000 Budget request addresses many of the
    concerns associated with taking care of people and ensuring readiness,
    there simply have not been enough resources to fund all priorities.
    Highest priority modernization programs have been funded to ensure
    development of future capabilities, but at a pace slower than desired.
    Other programs will have to await the results of initiatives that will
    generate additional funding for modernization. The Army Modernization
    Plan is the Army's strategy for fielding systems that provide the
    capabilities to support JV2010 and AV2010. The Army executes its
    modernization plan by establishing and pursuing specific goals
    essential to enabling AV2010 patterns of operation. Through this
    framework, the modernization plan links future equipment to anticipated
    future operational requirements.
        Digitization, our goal to modernize Army units by equipping them
    with digital systems, is the means by which we will achieve information
    dominance. It involves the use of modern communications capabilities
    and computers to enable commanders, planners, and shooters to rapidly
    acquire and share information. The Army will equip the 4th Infantry
    Division (Mechanized)--the Army's heavy experimental force--with
    information dominance capability by the end of fiscal year 2000, and
    will equip III Corps by the end of fiscal year 2004. The force capable
    of achieving information dominance is called Army XXI. Army XXI units
    will have some current systems that have information dominance
    capabilities added, as well as some new ``leap ahead'' systems, such as
    the Comanche helicopter and the Crusader howitzer. Further in the
    future, other advanced technologies will be leveraged to create more
    leap-ahead systems. Fielding and integration of these systems will
    create the force we refer to as the Army After Next (AAN), a force that
    will combine information dominance with better strategic and tactical
    mobility.
        The four other goals identified in The Army Modernization Plan are
    maintaining combat overmatch, sustaining essential research and
    development while focusing science and technology on leap-ahead
    capabilities, recapitalizing the force, and integrating the active and
    reserve components. We maintain combat overmatch by upgrading current
    systems periodically through Preplanned Product Improvements programs,
    thus keeping our current systems more capable than those of our
    adversaries. At the same time, we focus the limited resources available
    on development of technologies and systems that promise truly
    revolutionary, or leap-ahead, capabilities. Recapitalization keeps our
    force viable and avoids block obsolescence through extended service
    plans, depot rebuild programs, and selective replacement of important
    assets, such as our truck fleet. As we modernize, we must also ensure
    that our active and reserve components are fully integrated to ensure
    new capabilities are optimized throughout the Army.
        The challenge of meeting the increased mission requirements
    generated by the NMS while taking care of its people has forced the
    Army to accept risk in modernization in recent years. Since 1989, Army
    modernization buying power has dropped 44 percent. The Army has
    terminated or restructured over 100 programs since 1987. In general,
    slowing procurement increases costs for each system procured. Because
    of funding constraints, the Army has maintained procurement programs at
    minimum sustaining rates rather than at more efficient economic rates.
    Modernization also helps to reduce operations and support costs. While
    equipment serviceability rates remain high for fielded equipment, older
    equipment is more expensive and more time-intensive to maintain;
    allowing fleets to age beyond their economic usefulness will cost the
    Army future dollars, manpower commitment, and training time. Today's
    modernization programs are tomorrow's capabilities. Increased
    modernization funding will ensure future readiness and provide our
    soldiers the combat overmatch they need to win quickly, decisively, and
    with minimum casualties.
    Total Army Integration
        With 54 percent of the Army in the reserve components, integration
    of the Total Army--active component, USAR, and ARNG--is important for
    optimizing readiness. The White Paper, One Team, One Fight, One Future,
    provides a framework for integrating the active component (AC) and the
    reserve component (RC). The conversion of some ARNG combat forces to
    meet Army combat support and combat service support requirements will
    facilitate the integration of the components. Two years ago, the ARNG
    Division Redesign Study recommended the conversion of approximately
    48,000 personnel authorizations currently in ARNG combat force
    structure to provide required combat support and combat service support
    forces. The ARNG will convert six combat brigades (19,000 soldiers)
    between fiscal year 2000 and fiscal year 2005, with the rest of the
    conversion taking place by the end of fiscal year 2009.
        A number of other initiatives to foster a seamless relationship
    between the AC and the RC have received renewed attention as a result
    of the expanded employment of the reserve component in ongoing
    missions. This year two integrated divisions will be created, each
    comprised of ARNG enhanced Separate Brigades under a division
    headquarters commanded by an AC major general. The division
    headquarters will be responsible for training, readiness, and
    mobilization of the division's enhanced Separate Brigades. Divisional
    teaming offers another way to enhance readiness by promoting a habitual
    and mutual support relationship between ARNG and AC divisions. Each
    division takes the lead for particular missions, and the other division
    in the team provides personnel, equipment, and other agreed-upon
    support to help accomplish the mission. Incorporating ARNG companies
    into AC light infantry battalions is also under study. The USAR is
    participating in the multi-component unit initiatives by providing
    personnel and units with key combat support and combat service support
    specialties. For instance, the Army relies on the USAR for two-thirds
    of its Psychological Operations capability and more than 90 percent of
    its Civil Affairs expertise. The redesigned heavy division includes 513
    RC authorizations across two-thirds of the units in the division.
    Multi-component units and other integration initiatives will create
    flexible organizations able to respond to emerging threats in both the
    international and domestic arenas.
    Defense Reform Initiatives
        While Total Army Integration aims to optimize effectiveness through
    efficient use of the active and reserve components, the Army is also
    striving to improve efficiency in other areas. Over the last ten years,
    the Army has made great progress in reducing costs and increasing the
    effectiveness of its business processes. Support for the latest DOD-
    wide effort--the Defense Reform Initiatives (DRI)--includes several
    efficiency initiatives that are already part of our Future Years
    Defense Plan. We are leading in the implementation of several DOD
    initiatives. For instance, the Army has the highest usage rate (95
    percent) of the Government Purchase Credit Card in DOD. We are also a
    leader in implementing the DOD ``paperless contracting'' initiative,
    and are scheduled to complete fielding of the Standard Procurement
    Systems during the first quarter of next year. Overall, the Army has
    reduced its cost to contract per dollar obligated by over 50 percent in
    the last 14 years. Due to our own initiatives and DRI efforts, the Army
    is programmed to achieve about $10 billion in savings over the Future
    Years Defense Plan. Initiatives such as the Revolution in Military
    Logistics, acquisition reform, A-76 cost competitions, and
    infrastructure management initiatives have reduced costs or improved
    effectiveness. This has enabled the Army to meet its increased
    commitments under the National Military Strategy during a period of
    severe personnel and budget reductions.
    Values
        This summary highlights a number of revolutionary changes and
    initiatives now underway to sustain readiness into the 21st century,
    but nothing should displace the shared values that enable soldiers to
    form essential bonds of trust and respect. The Army must preserve the
    fundamental values that are the bedrock for success in military
    operations. We must continue to ensure that American soldiers embrace
    the essential values that have been the soul of our Army since its
    birth. The values of loyalty, duty, respect, selfless service, honor,
    integrity, and personal courage have been the hallmark of the American
    soldier for over 223 years. The Army's Human Relations Action Plan and
    Character Development XXI initiatives provide the mechanisms for
    ensuring that soldiers understand these values from their earliest days
    of training and have that understanding reinforced throughout their
    time in the Army. The Army, therefore, serves the Nation not only by
    executing the National Military Strategy, but also through the value-
    rich example that soldiers and former soldiers provide.
    Conclusion
        The fiscal year 2000 Budget addresses most of the Army's people and
    near-term readiness concerns. Included are an essential increase in
    funding for contingencies, pay, and retirement. The Army is committed
    to ensuring these dollars are effectively and efficiently allocated to
    fix critical deficiencies. Modernization increases are not yet possible
    within current resource levels; however, we remain ready to move
    forward in modernization through our Force XXI processes as soon as
    resources can be identified. We will continue to do our part to
    implement Defense Reform Initiatives and other cost-saving measures to
    help generate funding for unfunded modernization priorities. This
    budget represents the best possible balance of available resources
    applied across the priorities of people, readiness, and modernization.
                Chapter 1--Assuring Current and Future Readiness
        America's Army is the most capable Army in the world today. In
    executing the requirements of the National Military Strategy, the Army
    has provided over 60 percent of the people for the major American
    military operations since the end of the Cold War while receiving only
    one-quarter of the defense budget. The NMS is the right strategy for
    protecting America's interests, and the Army is indispensable to the
    execution of the NMS.
        The pillars of the NMS--shaping the international environment,
    responding to crises, and preparing for an uncertain future--are an
    efficient way to protect our national interests. Because the NMS
    addresses proactive shaping activities as well as more conventional
    responding and preparing activities, this strategy offers the potential
    for America to protect her interests with engagement rather than
    relying solely on the threat of military response. The Army's most
    fundamental capability is the exercise of sustained, comprehensive
    control over people, land, and natural resources; the Army can
    therefore perform missions ranging from nation building to defeating
    enemies on the battlefield. The versatility and discrimination possible
    when American soldiers are on the ground make the Army the force of
    choice for most military operations in support of the NMS.
        From Bosnia to Korea, the Army continues to do the Nation's heavy
    lifting. Through the extraordinary efforts of our soldiers and Army
    civilians, the Army executes the NMS while maintaining its capability
    for decisive response and preparing for tomorrow.
        Nonetheless, resource constraints, coupled with the increased pace
    of shaping and responding operations required by the NMS, have created
    concerns in the areas of people (recruiting and retention), readiness,
    and modernization. The fiscal year 2000 Budget and outyear plan provide
    for pay increases and for many of the Army's near-term readiness
    concerns. Addressing these concerns adequately precludes increasing
    modernization funding at this time.
        readiness, the national military strategy, and army capabilities
        America's Army is the best land combat force in the world. We stand
    ready today, as our predecessors have for over 223 years, to fight and
    win our nation's wars. Supporting the military strategy established by
    our National Command Authorities, we are currently conducting
    operations worldwide to promote peace by shaping the international
    environment. These operations are improving the lives of people of many
    nations. We are also keeping and enforcing the peace in a number of
    tense regions where, but for the presence of American soldiers, peace
    would have no chance. We are ready and able to compel our enemies to do
    what they would otherwise not do of their own free will, to deter those
    who would become our enemies, to reassure our allies and friends, and
    to support domestic authorities in times of disaster or other
    emergencies.
        The Army is the largest Service component of the Department of
    Defense (DOD). Three interdependent elements--active component
    soldiers, reserve component soldiers, and Army civilians comprise the
    more than 1.3 million people that make up today's Army. Each element
    makes vital contributions to the Army capabilities needed to execute
    the National Military Strategy.
        The Army's fundamental capability, its unique contribution to joint
    military operations, is the exercise of comprehensive and continuous
    control over people, land, and resources. Our soldiers and leaders, and
    those who support them, are prepared to conduct prompt and sustained
    operations throughout the spectrum of military operations in any
    environment that requires land forces. The Army is therefore the force
    of choice to support peace, to deter war, and to compel enemies in
    defense of the interests of the United States. The Army is the central
    element of our Nation's military readiness: a full spectrum force of
    decision.
    Readiness for What? The National Military Strategy
        Military readiness is a measure of the capabilities of our military
    forces against the requirements those forces must satisfy. These
    requirements are determined by evaluating U.S. interests in the context
    of the international environment. The next steps are to develop a
    strategy to promote and defend those interests, distill from the
    strategy the set of required military capabilities, and balance the
    required capabilities against available resources. Finally, we must
    take steps to acquire and maintain the capabilities indispensable for
    defending our interests. Achieving and maintaining readiness is thus a
    responsibility shared by the Executive and Legislative branches of
    government. In short, the Executive branch formulates both the National
    Security Strategy and National Military Strategy, and requests funding
    from Congress for capabilities deemed essential to executing the NMS.
    We can say that we have attained an adequate level of military
    readiness when current capabilities meet or exceed the capabilities
    required by the NMS, and the program for acquiring new or updated
    capabilities is keeping pace with anticipated requirements for them.
        The current NMS reflects the profound change in the international
    environment that resulted from our victory in the Cold War. No longer
    are we confronted with the monolithic threat against which we assessed
    our readiness for the 44 years following World War II. Rather we are
    faced with a complex array of threats and challenges that emerged in
    the wake of the Soviet Union's demise. Wars between rival ethnic
    factions, the proliferation of weapons of mass destruction and
    ballistic missile technology, and a resurgence of international
    terrorism are but some of the characteristics of the post Cold War
    world.
        Whereas we once viewed the mission of the American military largely
    in terms of fighting and winning mid- to high-intensity conflicts, we
    now find the military involved almost continuously in other types of
    military operations, including such missions as nation-building and
    peacekeeping. However, since mid- to high-intensity conflict remains
    the most demanding mission along the spectrum of military operations,
    we must always stand ready to fight and win our Nation's wars, even
    while executing operations along the lower end of the spectrum.
    Readiness today, then, must be assessed in terms of our ability to
    shape the international environment, our effectiveness as we execute
    military operations in response to crises, and our preparations to
    answer tomorrow's challenges. By answering the question, ``Readiness
    for what?,'' the NMS provides the framework around which we build
    military capabilities.
    The NMS and Army Capabilities
        The first pillar of the NMS, shaping the international environment
    in ways favorable to our national interests, is indispensable in
    minimizing potential threats. Shaping activities vary widely, from
    efforts aimed at preventing or minimizing conflict to peacetime
    military engagement programs that stabilize and strengthen current
    alliance relationships. This pillar is best supported by long-term,
    face-to-face activities that build friends and cement trust, promote
    stability in fragile societies, strengthen coalitions, and ensure
    cooperation with traditional allies. The presence of the American
    soldier on the ground is the principal method to execute these
    activities. Since the majority of other nations' militaries are
    dominated by their armies, military engagement with these countries is
    most effective through army-to-army contact. Army presence in fragile
    societies yields multiple benefits for both the Army and the host
    nation: it promotes national stability and provides training
    opportunities for U.S. soldiers who learn and teach skills that both
    improve the quality of life in participating nations and enhance Army
    readiness. America's Army is ideally suited for and heavily engaged in
    the execution of this pillar of the NMS. Indeed, the Army's unique and
    robust shaping capabilities give it the lead role in the first pillar
    of the NMS.
        To execute the second pillar of the NMS, our military must
    effectively respond to threats and challenges to our national
    interests. The Army, as the only Service that can compel and maintain
    decisive results, plays a critical role in this regard. In the current
    strategic environment, America cannot afford to wait for a clear threat
    to emerge and then rely on oceans to protect the Nation while preparing
    an adequate response. We must be ready to respond very quickly, and we
    must be ready to respond here in America as well as wherever else our
    interests are threatened. To respond effectively, we must maintain
    enough forces to make trained and ready units available for deployment
    on short notice, sufficient strategic air and sealift to project power
    rapidly, and ample forward-positioned forces and prepositioned assets
    to cut down deployment times for initial response forces. America's
    Army has proven time and again over the past ten years that we can
    project combat power worldwide on short notice as well as provide
    security and essential services in response to disasters here at home.
        The third pillar of our NMS is to prepare to meet the threats we
    anticipate confronting us in the future. The threats of the future may
    have a familiar face, as some nations or coalitions grow in power and
    seek to challenge our interests. On the other hand, the speed of
    technological advance presents asymmetrical threats: a rival or group
    of rivals seeking to challenge our interests with some technology,
    weapon, strategy, or tactic that avoids our strengths and exploits our
    vulnerabilities. In either event, we must prepare now to ensure that we
    are ready to counter tomorrow's threats. America's Army is implementing
    a comprehensive transformation strategy to build the information-age
    capabilities needed to protect our interests well into the 21st century
    while preserving current readiness. This strategy, discussed at length
    in Chapter 3, requires a substantial commitment of money, soldiers and
    training time to develop and validate the equipment and doctrine that
    will enable us to effectively wield new technologies on future
    battlefields. Our dominance of recent battlefields is no guarantee of
    future success; we must continue to generate the military capabilities
    that will dominate future battlefields. Only by preparing now will we
    maintain our ability to defend America's interests in the face of a
    complex array of rapidly evolving threats.
        Shaping, responding, preparing the NMS has been carefully tailored
    to protect American interests in the context of the current
    international environment. The NMS is the right strategy, and America's
    Army is indispensable to its proper execution.
              doing america's heavy lifting: the army and the nms
        The Army is prepared now to fight and win our Nation's wars, and it
    continues to prepare each day, bringing unique and substantial
    capabilities to the joint team. While contributions of air and sea
    power are key enablers for decisive ground combat operations, and they
    facilitate the application of land power capabilities throughout the
    full spectrum of military operations, today's NMS is demonstrably Army-
    intensive. The Army has a larger forward presence than any other
    Service, with more than 122,000 soldiers assigned to overseas bases.
    These soldiers perform real-world missions every day, from the
    Demilitarized Zone in Korea to Bosnia, Egypt, and countless other
    places. Furthermore, on an average day in fiscal year 1998, over 28,000
    soldiers were deployed away from their home stations to more than 70
    countries around the world. On a daily basis, American soldiers and
    Army civilians interact with host nation soldiers, officials, and
    citizens; implement treaty requirements and rules of engagement; and
    put a human face on the image of America held by people all over the
    world.
    Shaping the International Environment
        American soldiers are conducting shaping operations 24 hours a day,
    seven days a week. The Army shapes the international environment
    through the presence of our forward-deployed forces around the world,
    robust programs of nation-building and military-to-military activities,
    and support of arms control initiatives.
        Most of the American soldiers stationed overseas are assigned to
    U.S. Army Europe (USAREUR) and to the 8th U.S. Army in Korea, where
    they provide the critical core of our alliances in these strategic
    regions. The forces of USAREUR represent an enduring commitment to
    NATO--a commitment that has been a key factor in providing essential
    stability for managing the turbulence associated with the breakup of
    the Warsaw Pact. In addition to their contribution to the Partnership
    for Peace (PfP) Program and associated military exchanges and
    exercises, the presence of these American soldiers is a key enabler to
    ongoing international efforts to maintain peace in the Balkans. In
    Korea, the presence of American soldiers reassures our allies and
    provides a potent, necessary deterrent to the unpredictable North
    Korean regime. Other soldiers stationed in the U.S. Pacific Command and
    the U.S. Southern Command areas of operation contribute to engagement
    operations in the countries of the Pacific Rim and throughout Latin
    America and the Caribbean. In sum, our substantial forward-deployed
    forces shape the international environment by deterring aggression,
    leading our response to global threats, and promoting stability through
    military-to-military contacts in key regions.
                Keeping the Peace
        Fiscal year 1998 marked the sixteenth year of American support for
    the Multinational Force and Observers (MFO) in the Sinai, which
    verifies compliance with the treaty of peace between Egypt and Israel.
    Army soldiers serving in similar observer and peacekeeping missions
    from the border between Ecuador and Peru to the Former Yugoslav
    Republic of Macedonia (FYROM) helped foster peace in troubled regions
    around the world. Over 300 AC and RC soldiers also served with the
    United States Support Group in Haiti, participating in operations
    centered on peacekeeping, humanitarian relief, and law enforcement
    training. Under the African Crisis Response Initiative (ACRI), soldiers
    of our Special Operations Forces provided peacekeeping training to
    soldiers of Mali, Malawi, and Ghana in fiscal year 1998. This brings
    the total number of countries trained under this program to six, with
    Cote d'Ivoire expected to join the ranks of Army-trained African
    peacekeepers in the near future.
                Partnership for Peace
        Army participation in PfP and related exchanges and exercises in
    fiscal year 1998 helped set the stage for the enlargement of NATO while
    building the foundation for cooperative efforts with non-NATO forces as
    well. During Exercise Peace Shield 98 in September, active and reserve
    component soldiers worked with soldiers from the Ukraine and 13 other
    eastern European countries in a multinational brigade-level command
    post exercise designed to improve interoperability in peace support
    operations. For the second year, our soldiers also participated in a
    ``In-the-Spirit-of'' PfP training exercise with the Central Asian
    Peacekeeping Battalion. PfP fosters military cooperation, encourages
    support for peacekeeping operations among participating nations, and
    showcases the professionalism and values of America's Army.
                Military-to-Military Exchanges
        In addition to operations and exercises, the Army participates in a
    wide variety of day-to-day foreign interactions that contribute to
    shaping goals. Army-to-army contacts constitute the majority of all
    cooperative activities between the armed forces of the United States
    and the armed forces of other nations. Last year, such activities
    ranged from senior-level contacts to the training of 5,980 foreign
    military personnel under the International Military Education and
    Training (IMET) and Foreign Military Sales programs. These programs
    encourage other nations to participate in international peacekeeping
    missions and offer an opportunity to mold the values of foreign
    militaries in positive ways. The Army's reserve components play a
    critical role in military-to-military exchanges. The National Guard
    State Partnership Program, for example, has been instrumental in
    forging close ties with the armies and governments of the former Warsaw
    Pact. Besides helping to shape the international environment in line
    with U.S. interests, these continuing contacts with foreign armies
    enhance our ability to participate in coalition operations today and in
    the future.
                Counterdrug Efforts
        The National Defense Authorization Act for Fiscal Year 1989
    mandated DOD involvement in counterdrug activities. In accordance with
    applicable laws, the Army conducts a wide range of activities and
    operations at home and abroad in support of U.S. government counterdrug
    efforts.
        In the domestic arena last year, more than 2,000 AC and RC soldiers
    performed tasks ranging from construction of fences along the border
    with Mexico to providing intelligence analyst support to Drug Law
    Enforcement Agencies (DLEA). The ARNG provides unique counterdrug
    support to the 54 states and territories under provisions of Title 32.
    This support involves over 3,000 people and consists of activities such
    as cargo inspections and supporting operations to reduce drug demand.
        The Army also provides counterdrug support in many nations of Latin
    America, the Caribbean, and the heroin producing and transshipping
    regions of southeast and southwest Asia. Army counterdrug activities
    abroad include training host nation personnel by our Special Operations
    Forces along with aviation transportation, intelligence, planning and
    reconnaissance support. In close cooperation with other Federal
    agencies, the Army plays a key role in our Nation's fight against this
    transnational threat.
                Supporting Arms Control and Nonproliferation
        Other Army shaping operations promote American interests abroad by
    training foreign militaries and by supporting our government's arms
    control and nonproliferation initiatives. In support of our
    government's policy of reducing the threat of non-self destructing
    anti-personnel landmines, Army Special Operations Forces and Explosive
    Ordnance Disposal soldiers are deployed in 19 countries around the
    world. These soldiers are providing training and support in areas such
    as mine awareness, mine clearance, and planning. To date, we have led
    demining efforts that have trained nearly 25 percent of the world's
    deminers. As the DOD Executive Agent, the Army also supports the
    Chemical Demilitarization Program by continuing the safe destruction of
    the U.S. lethal chemical weapons stockpile and related non-stockpile
    warfare materiel in compliance with the world-wide Chemical Weapons
    Convention. Through these efforts, America's Army is making the world a
    safer place.
                Building Friendships
        American soldiers performed missions all over the world in fiscal
    year 1998. Many of these missions allowed soldiers to practice job-
    related skills while concurrently benefiting the host nation by
    improving infrastructure or providing medical care for the population.
    For example, USAR soldiers provided medical care for over 116,000 host
    nation civilians while deployed on Medical Readiness Training Exercises
    in five different countries in Latin America. Other soldiers conducted
    similar medical training missions in Sri Lanka, Fiji, the Maldives, and
    Madagascar. Army engineer units conducted Civic Action Team engineering
    projects in Tonga, the Republic of Korea, Micronesia, Mongolia, and the
    Republic of Marshall Islands. Operations such as these support
    political and economic stability and build friendships in fragile
    societies that might otherwise breed conflict.
        The wide range of Army operations conducted to shape the
    international environment helps reduce the potential for conflict and
    human suffering around the world. Our soldiers and civilians mold
    institutions and attitudes, giving substance to the image of America
    held by people of many nations. Support for peace operations, demining
    programs, and programs that promote cooperation through exchanges also
    provide valuable experience for Army personnel. Through the numerous
    activities discussed in this section, the Army is enhancing global
    security and stability; the results of these shaping operations will
    continue to advance our national security and humanitarian interests in
    the future.
    Responding to Crises Abroad and at Home
        America's Army responded to crises abroad and at home in fiscal
    year 1998 by deploying a heavy brigade to Kuwait in 96 hours,
    conducting a relief in place of forces involved in the peacekeeping
    mission in Bosnia, supporting the Hurricane Mitch Disaster Relief
    effort in Central America, and supporting a wide range of domestic
    support activities. These successes validate our full-spectrum
    readiness.
                Full-Spectrum Readiness: Maintaining the Capability to
                        Respond
        The capability to respond anywhere in the world on short notice
    comes from our sustained commitment to the complex requirements of
    full-spectrum readiness. This readiness comes from the unmatched
    capabilities of American soldiers and the rigorous training that
    prepares them for battle. The readiness of soldiers today is the
    product of many years' investment in quality people, training,
    doctrine, force mix, modern equipment, and leader development. These
    ``Army imperatives'' are discussed in detail in Chapter 2. Since we
    fight as a member of a joint team, and often in coalition with other
    nations, we must also train with the other members of the joint team
    (joint training exercises) and with our allies (combined training
    exercises) to assure readiness for today and for the 21st century.
        The Army executed a robust program of training deployments in
    fiscal year 1998 designed to validate and improve our ability to deploy
    rapidly, fight, and win. Exercise Bright Star, for instance, allowed us
    to practice deploying rapidly as well as conducting combined operations
    with the Egyptian military. Joint Task Force Exercise (JTF-X) Purple
    Dragon, one of the largest exercises of the year, included
    participation by soldiers of XVIII Airborne Corps and all four of its
    divisions along with elements of the Navy, Air Force, and Marine Corps.
    This massive exercise, conducted at several locations in the Eastern
    United States, the Atlantic Ocean, and the Caribbean, offered the
    unique opportunity to integrate the operations of all Services in a
    scenario involving everything from counterinsurgency to weapons of mass
    destruction. In March, over 500 soldiers from the Europe-based V Corps
    and from the Minnesota National Guard participated in NATO Field
    Training Exercise (FTX) Strong Resolve 98 in Norway. Last August,
    soldiers from Alaska conducted a combined training exercise with the
    Thai Army that featured the largest airborne operation ever conducted
    in Thailand. These exercises, along with a number of others, provided
    invaluable deployment and training experience for the soldiers and
    leaders involved.
                Responding Abroad
        In February 1998, the 1st Brigade (-) of 3d Infantry Division
    (Mechanized) (3 ID (M)) was ordered to deploy to Kuwait in conjunction
    with other forces sent to the region when Iraq refused to comply with
    U.N. weapons inspections. The brigade
    (-) moved by air and utilized prepositioned equipment to assume a ready
    posture within 96 hours. They joined another battalion from 3 ID (M)
    that was already training with the Kuwaiti Land Forces. An Army
    headquarters was sent to assume command of all combined and joint
    forces in Kuwait. On 20 February, the President authorized the call-up
    of RC soldiers to support military operations in Southwest Asia. As of
    22 September 1998, 184 ARNG and 192 USAR soldiers had mobilized for
    service in Southwest Asia, where they performed chemical detection,
    logistics, air defense, communications, and aviation missions. In
    support of Operation Desert Fox in December, the Army once again
    deployed active and reserve component forces on short notice to augment
    the forces already in theater for training. The presence of several
    thousand American soldiers effectively deterred any threatening
    activity by Iraqi ground forces. The successful execution of these
    operations validates our program of regular training deployments to key
    regions, and underscores the importance of integrating the reserve
    components rapidly in ongoing contingencies.
        The deployment of the 1st Cavalry Division (-) last September to
    assume responsibility for the U.S. portion of the NATO peacekeeping
    mission in Bosnia offers another example of the Army's support for
    global contingencies. The Europe-based 1st Armored Division, augmented
    by a significant number of individuals and units from both active and
    reserve component forces in the United States, provided the American
    contingent to NATO forces in Bosnia for most of fiscal year 1998. The
    shift to the CONUS-based 1st Cavalry Division helped stabilize some
    Europe-based units for readiness training and reduced their time spent
    away from home station, or PERSTEMPO. The professional execution of
    this relief in place allowed the transition to occur without reducing
    our commitment to supporting U.S. goals in the Balkans. Reserve
    component support is again a key factor in our success in Bosnia.
    During fiscal year 1998, over 1,300 RC soldiers were mobilized in
    support of operations there.
        The U.S. Army also provided substantial support for disaster relief
    efforts in the wake of Hurricane Mitch in Central America. Through
    Joint Task Force-Bravo and the Disaster Relief Joint Task Force,
    soldiers and civilians conducted relief operations in Honduras,
    Nicaragua, El Salvador, and Guatemala. The XVIII Airborne Corps
    deployed substantial logistics and aviation support to help with the
    immediate response to this catastrophic storm. ARNG soldiers in the
    United States supported relief efforts by assisting with the
    preparation of shipments of relief supplies. Ongoing USAR support
    includes a program of sequential, 21-day deployments of soldiers
    trained in civil affairs, engineer, medical, maintenance, and supply
    specialties to the region. These deployments are projected to include
    as many as 8000 soldiers.
                Responding at Home
        The Army provided substantial support to Federal, state and local
    authorities responding to natural disasters in the United States and
    its territories last year. Active, U.S. Army Reserve, and National
    Guard soldiers, along with many Army civilians, supported Federal
    Emergency Management Agency (FEMA) disaster relief efforts for Typhoon
    Paka (Guam), Hurricanes Bonnie (North Carolina) and Georges (U.S.
    Virgin Islands, Puerto Rico, Florida and the Gulf Coast), the Northeast
    Ice Storms (New York and Maine), and for fighting wildfires in Florida.
    The Army Corps of Engineers contributed greatly to Army disaster relief
    efforts. Army support included providing and operating power
    generators, flying helicopters for missions ranging from medical
    evacuation to damage assessment, and providing emergency shelter,
    water, ice and food. Additionally, on numerous occasions in fiscal year
    1998, the Army provided Explosive Ordnance Disposal or Technical Escort
    Unit personnel in response to requests from Federal, state, and local
    authorities for assistance in dealing with explosives or hazardous
    materiel. Activities and response efforts such as these validate the
    ability of the Army, in accordance with the law and at the request of
    local authorities, to respond rapidly to domestic situations as
    required.
    Preparing for an Uncertain Future
        Preparing for an uncertain future encompasses not only the widely
    publicized harnessing of information-age technology to create a
    Revolution in Military Affairs, but also preparations for countering
    the threats emerging from the activities of potential rivals. Due to
    the scope of the Army's Modernization Plan and related programs, we
    have reserved discussion of this aspect of ``preparing now'' for
    Chapter 3. The remainder of this section surveys ongoing Army
    initiatives for addressing the challenges of terrorism, threats to the
    homeland, and information technology.
                Combating Terrorism
        The terrorist threat demands a coherent program to protect our
    soldiers, Army civilians, family members, information, and critical
    resources at home and abroad. The Army's Antiterrorism Force Protection
    (AT/FP) program is designed to meet this threat. The effectiveness of
    antiterrorism programs depend to a large degree on how well response
    plans are integrated amongst the appropriate Federal, state and local
    agencies. In addition to specifying protective measures, the AT/FP
    program charges installation commanders with the responsibility for
    ensuring connectivity with Federal, state, local, and host nation law
    enforcement and intelligence agencies. The program requires
    establishment of AT/FP committees at installation level as the
    mechanism for oversight and coordination of the AT/FP Program.
        The Army's Antiterrorism/Force Protection program provides an
    operational model for safeguarding personnel, information, and critical
    resources from the threat of terrorism. The program includes four
    levels of training tailored to meet the requirements of groups ranging
    from individual soldiers through senior leaders. It requires periodic
    installation vulnerability assessments to keep plans current. In
    general, the AT/FP program ensures that our personnel and leaders are
    aware of the threat, conduct continuous assessments of specific
    vulnerabilities, and take steps to reduce risks through improving
    physical and operational security.
                Homeland Defense: National Missile Defense and Domestic
                        Preparedness
        The recent launch of a multistage missile by North Korea and
    continuing efforts by other nation-states to acquire or improve long-
    range missile systems underscore the importance of developing the
    capability to field a national missile defense (NMD) system. The Army
    supports the current joint NMD program designed to develop and test a
    land-based NMD system that can be operational in 2005, or sooner (2003)
    if so directed. With funding and guidance from DOD's Ballistic Missile
    Defense Organization (BMDO), the Army manages the development of the
    dedicated NMD ground-based elements, which include the Ground-Based
    Radar and the Ground-Based Interceptor. Development of both elements
    are on schedule. Facilities for the prototype Ground-Based Radar at
    Kwajalein Atoll are complete, and the radar is now operational.
        The Secretary of the Army's role as the Executive Agent for the DOD
    Domestic Preparedness program places the Army in the forefront of joint
    and interagency efforts to prepare our military and civilian ``first
    responders'' for incidents involving weapons of mass destruction. This
    program will train instructors in 120 cities by the end of fiscal year
    2002, giving these cities the ability to train their own first
    responders to handle emergencies involving WMD. A Federal Training
    Team, which includes ARNG and USAR instructors, conducts this training.
    As of the end of fiscal year 1998, a total of 9,950 first-responder
    trainers in 32 cities had received the training.
        The Army also supports DOD efforts to improve its ability to
    respond to terrorist attacks involving WMD in support of lead Federal
    agencies. The Army's Technical Escort Unit and lab elements from the
    Soldier Biological and Chemical Command are among DOD forces that could
    respond today to requests for assistance under the Federal Response
    Plan. The Federal Response Plan comes into play in this case just as in
    any other disaster--in response to a presidential declaration of a
    disaster or major emergency.
        The unique status of the ARNG as a state-controlled force (unless
    called to Federal service) enhances the states' initial response
    capability while preserving the supporting role of the DOD for domestic
    disaster relief. Under the DOD Plan for Integrating National Guard and
    Reserve Component Support for Response to Attacks Using Weapons of Mass
    Destruction, National Guard Rapid Assessment and Initial Detection
    (RAID) detachments will be trained beginning in fiscal year 1999 to
    provide initial response capability to WMD incidents. Each of the ten
    detachments (one per Federal Emergency Management Agency region) are
    jointly staffed by a combination of 22 Air and Army National Guard
    personnel. They assess suspected nuclear, biological, chemical or
    radiological events; advise civilian responders regarding appropriate
    actions; and expedite requests for assistance from state and Federal
    agencies to help save lives, prevent human suffering, and mitigate
    property damage. In most cases, these RAID detachments will remain
    under state control. USAR and ARNG chemical companies and USAR medical
    units are among the elements that will be trained to provide an
    enhanced DOD response capability (at the request of Federal lead
    agencies) to domestic disasters involving WMD.
    Information Technology Challenges: The Year 2000 Problem, Cyber-
            Defense, and Allocation of the Electromagnetic Spectrum
        The global explosion of information technology offers the potential
    for dramatically improved military capabilities, but reliance on this
    technology also creates the challenge of ensuring its integrity. Wide-
    spread system failures due to intentional attacks on our information
    systems or systemic flaws are a serious threat. The possibility that
    the once-common practice of referencing dates in computer software
    using only two digits could disrupt computer-based systems in the year
    2000 a problem known as the Year 2000 ``bug'' (Y2K)--is one
    manifestation of the challenge posed by our reliance on information
    technology. Protecting friendly information and decision making
    processes from intentional disruption and commercial constraint of the
    electromagnetic spectrum are two others. Several Army programs aim to
    ensure that our information systems remain free from disruption.
        The Army is implementing a detailed plan to ensure that our
    weapons, information systems, and information technology controlled
    devices are not affected by the Y2K problem. We have identified at-risk
    systems, classified them according to their criticality, and are
    carefully managing the renovation of these systems using an Army-wide
    database and monthly reports. For key activities that involve the
    integration of multiple systems, the Army is conducting ``end-to-end''
    tests as well as participating in joint tests and evaluations to ensure
    full system functionality. No Army mission-critical systems will fail
    due to Y2K problems.
        Information Operations refers to the integration of offensive and
    defensive measures that provide enhanced situational awareness to
    friendly forces while degrading the situational awareness of our
    enemies. Since potential enemies also have access to information
    technology, the Army is implementing a series of mechanisms to protect
    friendly information and decision making processes from intentional
    disruption. Improvements undertaken in support of this approach include
    the addition of Information Operations capabilities at division level
    and above, installation of intrusion detection devices, and the
    development of regional Computer Emergency Response Teams in both the
    active and reserve components.
        Many modern warfighting systems depend on the electromagnetic
    spectrum, making access to this spectrum an important resource for
    information-age warfare. Recent global initiatives to auction this
    limited resource as a commodity constrain military use of the spectrum
    for operations and for training. This development has made spectrum
    management an important consideration for military planners.
                               resource concerns
        The capabilities needed to execute the National Military Strategy
    are the yardstick for military readiness. For the Army, our vital and
    substantial role in shaping the international environment, responding,
    and preparing for the future require a sustained commitment to
    achieving readiness by generating and maintaining Army capabilities.
    While we remain ready today, constrained funding is stretching the
    fabric of our Army, creating concerns in the areas of people,
    readiness, and modernization. Chapter 5 discusses these concerns in
    detail; they are outlined in this section because they provide
    important context for the discussions of Army capabilities,
    modernization and quality of life in Chapters 2 through 4.
        Over the past several months, Army leaders have consulted with the
    Administration and testified before Congress regarding readiness. The
    Army requested a $5 billion annual increase in Total Obligation
    Authority (TOA) due to concerns centered chiefly on recruiting and
    retention, current readiness, and modernization. The efforts of the
    Administration and Congress to provide additional funding in the form
    of a fiscal year 1999 supplemental funding measure and the President's
    fiscal year 2000 Budget and outyear plan have addressed many of these
    concerns.
        Our concerns in the area of people stem from increasing
    difficulties recruiting and retaining sufficient numbers of high
    quality young Americans for military service. The Army must recruit
    almost 180,000 new recruits each year to provide enough trained
    soldiers to meet requirements. We must also retain enough experienced
    soldiers across the full range of Military Occupational Specialties
    (MOS) to continue producing quality mid-grade and senior-level leaders.
    The robust economy has created significant competition for the
    population we seek to recruit and retain.
        Even though our first-to-fight units are trained and ready today,
    this state of readiness can dissipate rapidly if not properly
    sustained. Reports that units are arriving at CTCs at lower levels of
    proficiency than in the past underscore the need to fund training-
    related accounts adequately and to protect unit training time.
    Providing funds for contingency operations before the Army has to
    divert training funds to cover costs is part of the solution. Adequate
    funding for Base Operations and Real Property Maintenance accounts will
    also help protect training funds from migrating to cover severe
    deficiencies in infrastructure or quality of life.
        The Army has accepted risk in its modernization accounts in order
    to fund current readiness accounts at acceptable levels in recent
    years. Over 100 major programs have been terminated or restructured
    since 1987, and Army modernization funding has decreased by 44 percent
    since 1989. The current rates of recapitalization and procurement are
    too slow to keep pace with aging fleets in many cases. Procurement
    programs are funded at minimum sustaining rates rather than at more
    economical rates. While equipment serviceability rates remain high,
    older equipment is more expensive and more time-intensive to maintain.
    The greatest challenge facing the Army today is to take care of people
    and meet current readiness demands while continuing to prepare for the
    future with constrained resources.
        Assuring readiness for today and for the 21st century requires
    quality people, adequate resources, and modern equipment. Providing the
    resources to address current readiness concerns is important, and the
    fiscal year 2000 budget proposal does that to a large degree. The
    fiscal year 2000 Budget represents the best possible balance of
    available resources applied across the priorities of people, readiness,
    and modernization.
                                   conclusion
        The Army is meeting the challenge of successfully executing
    numerous activities, exercises, and operations around the world that
    are essential to national security. At the same time, we have the
    capability today to respond, fight and win on short notice. We are
    stretched by current resource constraints, and our readiness levels are
    declining. Today, however, the Army is executing the NMS and has the
    capabilities to fight and win the Nation's wars.
        The NMS is the strategy that defines readiness for the United
    States military. The current strategy requires forces committed to
    proactive shaping activities, more traditional responding activities,
    and preparing activities made essential by the uncertain geostrategic
    environment and the wide range of potential threats. The NMS answers
    the question, ``Readiness for what?''
        The Army conducts shaping activities all over the world. These
    activities cover a broad range, from training other nations' militaries
    in the conduct of peacekeeping operations to providing counterdrug
    support to authorities here at home. The Army is ready to respond on
    short notice anywhere in the world to protect U.S. interests through
    the unique powers of its land forces. American soldiers deployed twice
    to Kuwait in fiscal year 1998, as well supporting disaster relief
    efforts across the United States, in both the Pacific and the
    Caribbean, and in Central America. While conducting these activities,
    the Army also pursued a number of programs and initiatives to prepare
    for the future. Providing substantial support to the DOD's efforts to
    enhance consequence management for WMD attacks, implementing measures
    to secure its information systems, and striving to modernize within
    tight fiscal constraints are some of the major ways the Army is
    preparing to secure the interests of the U.S. in the future.
        While the NMS is the right strategy to maximize the potential for
    global stability, the rapid pace of operations and fiscal constraints
    of the past several years have given rise to indications that Army
    readiness is in decline. The Army's senior leaders have identified the
    need for an additional $5 billion in annual TOA increases in order to
    reverse the effects of this decline and preserve essential readiness.
    The current budget request addresses many of the Army's most pressing
    concerns, especially in the areas of taking care of people and
    sustaining current readiness.
        ``Let us recollect that peace or war will not always be left to our
    option; that however moderate or unambitious we may be, we cannot count
    upon the moderation, or hope to extinguish the ambition of others.''
    Alexander Hamilton
     Chapter 2--Generating Capabilities for the Full Spectrum of Military
                                   Operations
        The defense of our national interests requires a broad range of
    military capabilities that America's Army is well-suited to provide.
    Each component, branch, and organization has a role to play in
    generating the Army's capabilities. The six imperatives quality people,
    training, force mix, doctrine, modern equipment, and leader development
    are the framework the Army uses to manage this process. By maintaining
    a complementary relationship among the imperatives, the Army optimizes
    its readiness. Training standards, for instance, should reflect the
    current Army doctrine and the equipment that soldiers are using to
    train. If this relationship holds, soldiers gain confidence from
    meeting relevant standards, units operate harmoniously using common
    doctrine, and equipment is employed to best effect. Conversely, the
    failure to maintain a complementary relationship among the imperatives
    results in a less effective force. Achieving this complementary
    relationship is called synchronizing the imperatives. The Army is a
    system of systems. Its systems work together to produce a force capable
    of performing the tasks required to execute the NMS.
                                the army vision
        The Army Vision sets the azimuth for the Total Army. It guides our
    execution of the National Military Strategy today and our evolution to
    meet the challenges of tomorrow.
        The values we refer to in our vision are the Army values of
    loyalty, duty, respect, selfless service, honor, integrity, and
    personal courage. They are the values we have inherited from the
    American soldiers who, from the birth of our Nation, have fulfilled our
    oath to support and defend the Constitution of the United States. They
    are stamped on a tag worn with the personal identification of each
    soldier. Just as our personal identification tags identify us
    individually, our Army Vision is the collective statement of who we
    are.
                           ac, rc, and army civilians
        The twin realities of the post-Cold War world diverse, almost
    continuous global challenges and fiscal constraints have led to a
    careful examination of the force structure of today's Total Army, which
    consists of the active component, the reserve components (ARNG and
    USAR), and Army civilians. We have programmed endstrengths for each of
    these components based on Quadrennial Defense Review (QDR)
    recommendations and a series of analyses of Army requirements and
    structure (known as Total Army Analyses). By comparing possible
    scenarios with the forces available to respond to contingencies, Total
    Army Analyses offer a mechanism for determining the proper size of the
    Army. Analysis indicates that further endstrength reductions beyond
    those already directed will place our ability to execute the NMS at
    greater risk. Current endstrengths make the contributions of each
    component vital for effective Army operations. These contributions are
    evident from Bosnia to Korea. Every day, all over the world, soldiers
    and civilians are forging the Total Army's broad range of capabilities
    by practicing and executing tasks required to carry out the NMS.
    The Active Component
        At the end of fiscal year 1998, the active component consisted of
    484,000 soldiers. AC soldiers make up the bulk of the four corps, ten
    divisions, and Special Operations Forces that are the nucleus of the
    Army. The AC also provides most of the soldiers who fill the Army's
    staff positions and perform myriad other full-time duties, such as
    facilitating training at the Combat Training Centers, providing cadre
    to the Army's institutional training program, or serving as advisors to
    reserve component units. Our OCONUS forces not only provide a forward-
    positioned capability to respond to threats world-wide, but also
    reassure allies and deter potential adversaries by providing tangible
    evidence of America's commitment to global security. The active
    component was below its programmed endstrength at the end of fiscal
    year 1998 and will continue to manage its endstrength to meet the QDR-
    programmed level of 480,000 by the end of fiscal year 1999.
    The Reserve Components
        Comprising 54 percent of the Total Army, the RC is made up of the
    ARNG and USAR. These forces include a significant percentage of
    soldiers with critical specialties necessary to sustain and support
    Army forces during lengthy deployments. There are three major
    categories of reserve service: the Ready Reserve, the Standby Reserve,
    and the Retired Reserve. The Ready Reserve is further organized into
    the Selected Reserve, the Individual Ready Reserve, and the Inactive
    Army National Guard. All of these reserve categories may be called to
    active service in time of a national or (for the ARNG) state emergency.
        One mechanism for activating RC soldiers is the Presidential
    Selected Reserve Call-up (PSRC). By authority of the PSRC, the
    President may activate as many as 200,000 RC soldiers for periods up to
    270 days. Under the Bosnia PSRC, six increments of RC soldiers totaling
    570 units and 16,434 soldiers were activated from 1995 to 1998. Another
    mechanism for activating reserve forces is Section 12302 of Title 10
    (Partial Mobilization), which authorizes the involuntary call-up of
    reservists for up to 24 months. Under provisions for full mobilization,
    reservists may be called up for indefinite periods of time following
    the passage of a public law or joint resolution declaring war or
    national emergency by Congress. The importance of the RC's
    contributions to Army operations makes the provisions governing
    activation of the reserve components key enablers to the execution of
    the NMS.
        The Army's increasing reliance on reserve component participation
    in ongoing contingency operations underscores a key readiness principle
    for the 21st Century: protecting America's interests amidst a range of
    threats and challenges will require constant and efficient utilization
    of the Total Force. Last year, the Army's White Paper One Team, One
    Fight, One Future provided a framework for better integrating active
    and reserve forces. The specific initiatives the Army is implementing
    (described in Chapter 3) are moving us towards our goal of a seamless
    Total Army.
                The Army National Guard
        The nucleus of the ARNG consists of combat formations comprising 58
    percent of the Army's combat force organized into eight divisions,
    eighteen separate brigades, and two Special Forces Groups.
    Additionally, the ARNG comprises 38 percent of the Combat Support and
    33 percent of the Combat Service Support at echelons above division.
    The Army National Guard is the component with most of the RC combat
    formations. National Guard units are commanded by their state governors
    unless federalized by the President. ARNG endstrength will be 350,000
    by the end of fiscal year 2000.
                The United States Army Reserve
        The U.S. Army Reserve provides 45 percent of the Army's Combat
    Service Support and 26 percent of the Combat Support forces at echelons
    above division. The logistics-heavy composition of the USAR makes it a
    vital part of the Total Army's force projection and sustainment
    capability and allows the AC and ARNG to devote more force structure to
    combat forces. The USAR has provided over 70 percent of RC forces
    deployed to Bosnia since 1995. The 208,000 soldiers of the USAR
    Selected Reserve serve in troop program units, as Active Guard/Reserve,
    or as Individual Mobilization Augmentees. Additionally, the USAR
    maintains a pool of 225,000 personnel (Individual Ready Reserve) with
    prior military training that may be called upon to augment standing
    forces. The USAR will reduce its Selected Reserve endstrength to
    205,000 by the end of fiscal year 2000.
    Army Civilians
        At the end of fiscal year 1998, over 232,000 civilians were
    performing important functions on Army installations and staffs
    worldwide. The experience and perspective civilians bring to the Army
    facilitate efficient, effective operations and training. In addition to
    filling key billets on staffs, Army civilians manage training
    facilities, monitor environmental compliance, and oversee or perform
    work in safety, force projection, force modernization, and other
    important functions affecting readiness and quality of life at
    installations worldwide. Since our soldiers and leaders change jobs
    frequently as part of their progression through the ranks, our
    civilians provide valuable continuity and assist the transition of
    newly assigned personnel in key areas. Army civilian endstrength will
    decrease to 209,000 by the end of fiscal year 2005.
                      institutional and operational forces
        At the end of fiscal year 1998, American soldiers made up nearly
    half of the 2.3 million men and women serving in the active and reserve
    components of our armed forces. These soldiers, along with the Army's
    civilians, are distributed between two major, functionally distinct
    groups of organizations that many refer to as the institutional Army
    and the operational Army. Both of these groups play important roles in
    generating land power capabilities. The institutional Army provides the
    structure that supports the operational Army's conduct of military
    operations and training. Counting soldiers assigned for training, about
    36 percent of the Total Army serve in institutional assignments at any
    given time; the remainder are assigned to the operational forces
    comprising the Army component of the joint warfighting commands or to
    reserve component units. Institutional and operational organizations
    perform complementary functions that together generate the capabilities
    needed to support the NMS.
        The institutional portion of the Army consists primarily of the
    Army Staff, Training and Doctrine Command (TRADOC), Army Materiel
    Command (AMC), the U.S. Army Medical Command, and the U.S. Army Corps
    of Engineers. These elements are largely based in the United States.
    Under the direction of the Secretary of the Army and the Chief of
    Staff, the institutional Army provides strategic guidance and
    administrative leadership for the Army. Institutional organizations
    also recruit and train individual soldiers and officers, develop common
    doctrine for the Total Army, sustain the force, and prepare the Army
    for the future. The major organizations comprising the institutional
    portion of the Army are shown in the figure on the preceding page.
        The major warfighting elements of the operational Army are its
    corps, divisions, and separate brigades. These combat units and their
    supporting elements are the deployable forces that execute the full
    spectrum of military operations; many are based overseas. Operational
    units of different types are grouped together to make the most
    effective use of the different functional skills and equipment
    characteristic of these different units. The sample divisional grouping
    of light infantry, artillery, aviation and other units shown on the
    next page illustrates this principle. Combat support units add specific
    functional capabilities, such as engineer support or air defense, to
    combined arms organizations. Combat service support (CSS), or
    logistics, units are normally grouped under a support command. Tables
    of Organization and Equipment (TOE) define each type of unit by
    specifying the subordinate units and equipment that the unit is
    authorized. These generic organizations can be temporarily adjusted, or
    ``task-organized'' to meet the requirements of specific missions.
        The Army provides capabilities for the execution of the NMS by
    apportioning operational forces among the joint combatant commands:
    Atlantic Command (ACOM), Central Command (CENTCOM), European Command
    (EUCOM), Pacific Command (PACOM), Southern Command (SOUTH-COM), and
    Special Operations Command (SOCOM). Forces may be shifted between
    combatant commands based on the requirements of particular
    contingencies. In accordance with the Department of Defense Reform Act
    of 1986, the chain of command for these forces runs directly from the
    President through the Secretary of Defense to the Commanders-in-Chief
    (CINCs) of the joint war-fighting commands.
                            total army capabilities
        As the world's preeminent ground combat force, America's Army
    brings a wide range of unique capabilities to the Joint Team and to our
    Nation. Our soldiers and their leaders are prepared to conduct prompt
    and sustained operations throughout the entire spectrum of military
    operations in any environment that requires land-force capabilities.
    From our heavy and light divisions and brigades to our Special
    Operations Forces, the Army is the foundation of our national military
    power because of our unique capabilities, the scale and duration at
    which we can effectively employ these capabilities, and our Nation's
    capability to project and sustain combat power.
    Conventional Forces
        The Army maintains six heavy divisions in its active component and
    four heavy divisions in the Army National Guard. The ARNG also has
    seven heavy enhanced Separate Brigades (eSB) and an Armored Cavalry
    Regiment. These divisions, brigades, and regiments employ tanks and
    infantry fighting vehicles, supported by artillery and attack
    helicopters, to defeat enemy forces and to seize and hold key terrain.
    Like much of our Army, heavy divisions have been extensively used in
    peace operations in recent years; in fact, our heavy divisions have
    executed most of the requirements of the peacekeeping mission in
    Bosnia.
        Army light infantry forces are well-suited for operations in
    restrictive terrain, such as in cities, mountains, jungles, and swamps.
    They are capable of conducting large-scale helicopter assaults; the
    101st Airborne Division (Air Assault) specializes in these operations.
    The 82d Airborne Division is the Army's only division that retains the
    capability to conduct large-scale parachute assaults. Light infantry
    units participate in a wide range of operations, including support for
    the peacekeeping mission in Bosnia and for the Multinational Force and
    Observer mission in the Sinai. Currently, there are four Active
    component light divisions, one ARNG light division, and seven light
    ARNG enhanced Separate Brigades. The ARNG also maintains three
    divisions with a mix of heavy and light force structure.
    Special Operations Forces
        The Army provides the bulk of our nation's Special Operations
    capabilities through the Special Forces, Civil Affairs, Psychological
    Operations, and other Special Operations units of both the active and
    reserve components. Army Special Operations Forces currently consist of
    seven Special Forces Groups (five AC and two ARNG), one Aviation
    Regiment, one Ranger Regiment, three Psychological Operations Groups
    (one AC, two USAR), four Civil Affairs Commands (USAR), eight Civil
    Affairs Brigades (USAR), and 25 Civil Affairs battalions (one AC
    tactical battalion, 24 USAR battalions). Special Operations Forces
    include specially organized, equipped, and trained units prepared to
    conduct a wide range of missions including counter-terrorism missions,
    such as hostage rescue, attack of terrorist infrastructure and recovery
    or neutralization of stolen or improvised nuclear, biological or
    chemical weapons. The Special Operations Aviation Regiment provides
    aviation support for the full range of Special Operations missions.
        Special Forces Groups combine subject matter expertise in many
    functional areas of ground combat with in-depth knowledge of the
    languages and cultures of specific regions. The ``Green Berets'' in
    these units specialize in training the forces of other nations in a
    broad range of operational skills. The Ranger Regiment provides the
    capability of conducting precision raids and other ``direct action''
    missions, including securing port and airfield facilities by parachute
    (airborne) assault.
        Some of the most heavily deployed soldiers in our Army in recent
    years have been those in the Psychological Operations and Civil Affairs
    units. These units offer unique capabilities, such as providing
    specially trained liaison teams to work with foreign governments and
    non-governmental organizations, broadcast and print media in austere
    theaters, expertise on infrastructure requirements and status in an
    operational area, and information to host nation populations to
    facilitate ongoing operations. Army Special Operations Forces are the
    only source for many functional skills; they are important contributors
    to our substantial shaping and responding capabilities.
    Other Unique Capabilities
        In addition to these broad categories of units, the Army also has a
    wide array of logistics and special-function support units designed to
    provide food, fuel, engineer and communications support, and other
    resources to military forces operating in austere areas. Besides
    providing the essential sustainment and support for Army combat
    operations, these units give the Army an unmatched capability to
    support most of the shaping and responding operations ongoing in the
    world today. From purifying water for Rwandan refugees to providing
    temporary power generation capability in the wake of Hurricane Georges,
    our logistical and special function support units are used extensively
    across the full spectrum of military operations.
        While the tasks and missions Army forces can perform are in many
    ways unique, the scale on which the Army can perform these missions,
    anywhere in the world, is itself a unique capability. With significant
    numbers of soldiers stationed overseas, and another six divisions able
    to deploy from their bases in the United States, our Army is capable of
    projecting overwhelming combat power. These forces are fully occupied
    with the many readiness-related activities associated with executing
    the NMS, and we have reduced Army force structure to the minimum
    required for executing the NMS with acceptable risk. However, the fact
    that we are the largest source of land combat power available for
    sustained, global employment makes America's Army particularly valuable
    to the Nation.
    Power Projection--the Army Strategic Mobility Program
        Current contingency plans require mobility support to deploy three
    divisions into a theater of operations within 30 days of notification,
    with another two divisions plus sustainment arriving in the next 45
    days. The Army Strategic Mobility Program (ASMP) is a comprehensive
    program that addresses infrastructure requirements, such as rail,
    highway, port, and airfield improvements, to facilitate movement of
    personnel and equipment from bases in the continental United States to
    air and sea ports of embarkation. Infrastructure and equipment
    improvements focus on designated CONUS Power Projection Platforms,
    including 15 installations, 14 airfields, 17 strategic seaports, and 11
    ammunition depots and plants.
        Under ASMP, the Army also monitors the procurement of C-17
    Globemaster III aircraft by the Air Force and additional Roll-On/Roll-
    Off (RO/RO) ships by the Navy to correct the shortfall in strategic
    lift identified in the last Mobility Requirements Study. Currently 47
    of the required 134 C-17s have been delivered. The Navy has awarded
    contracts for 19 Large, Medium-Speed, Roll-On/Roll-Off (LMSR) ships;
    eight of them have been delivered. Eventually, eight of these ships
    will be used for afloat prepositioning and the other 11 to increase
    surge sealift capability.
        The Army's Global Prepositioning Strategy further strengthens rapid
    deployment capabilities by prepositioning heavy brigade sets of unit
    equipment in different strategic regions of the world. Army Materiel
    Command currently manages seven prepositioned Brigade sets (with an
    eighth planned). One set is prepositioned afloat, ready for rapid
    transport to likely crisis areas. The combination of the Army's
    investments in infrastructure and the procurement requirements
    identified by the Mobility Requirements Study significantly enhance the
    Army's rapid power-projection capability.
                       synchronizing the six imperatives
        Generating the Total Army capabilities to execute the NMS requires
    both the resources Congress provides to the Total Army and the process
    that the Army uses to turn those resources into readiness. We need
    quality people and equipment, time, and money to build the necessary
    capabilities. We build these capabilities by integrating and
    synchronizing the six major components of Total Army readiness: quality
    people, training, force mix, doctrine, modern equipment, and leader
    development. We call these the six imperatives.
        Each imperative affects and is affected by the other five
    imperatives. Allowing any one of the imperatives to get out of sync
    with the others can have major repercussions for readiness. Conversely,
    when the imperatives are properly synchronized over time, the Army
    truly maximizes the military capabilities produced for the dollars
    spent.
    Quality People
        The Army must recruit about 180,000 soldiers annually, which is
    more than the recruiting needs of the other Services combined. We use
    three principal criteria to monitor the quality of the soldiers
    entering our ranks. One of these is the level of education of our
    recruits. Our goal is to have 90 percent of the total number of
    recruits enter service with high school diplomas. The second criterion
    is the Armed Forces Qualification Test (AFQT) score that soldiers
    achieve on the Armed Services Vocational Aptitude Battery (ASVAB), a
    standardized test administered to determine enlistment eligibility and
    Military Occupational Specialty (MOS) assignment qualifications. The
    Army goal is for 67 percent of our enlistees to achieve scores placing
    them in the top three categories (Categories I-IIIA) on the ASVAB. The
    final criterion is to accept no more than two percent of recruits with
    AFQT scores in Category IV, the lowest acceptable category.
        Maintaining a force capable of executing demanding missions is
    contingent on our ability to recruit and retain high quality people
    like those who comprise our current force. We need people capable of
    learning and growing with the information technologies that are driving
    the Revolution in Military Affairs and changing the way we will
    operate. Besides the challenges of new technologies, today's soldiers
    must exercise mature judgment under stressful circumstances. The
    soldiers keeping and enforcing the peace in numerous locations around
    the world must be able to understand the diplomatic and operational
    context of their actions to operate effectively. At any moment, any
    soldier performing these sensitive duties could be confronted with a
    problem of strategic significance. The reality of instantaneous news
    and information transmission makes every soldier an ambassador for
    America--potentially to a global audience.
        Today's Army is a force of great quality. Ninety percent of the
    enlisted forces have graduated from high school, and over 99 percent
    have at least high school equivalency. About 60 percent of the active
    component enlisted force have some college credit. The jobs these
    soldiers must perform demand increasing levels of technical expertise
    and judgment. The people capable of meeting this challenge are sought
    after by colleges and are in high demand in the commercial sector. In
    order to attract and retain the high quality people we will need to
    lead the 21st-century Army, we must take aggressive steps to keep
    military service competitive with other career options.
    Training
        We build and validate the current readiness of our units by
    executing tough, realistic training. Since mid- to high-intensity
    conflict remains the most demanding mission along the spectrum of
    military operations, the most important measure of readiness for a
    particular unit is its ability to perform the essential tasks it would
    most likely have to perform in this type of conflict. Different types
    of units perform different essential tasks; therefore, the Army has a
    generic Combined Arms Training Strategy (CATS) for each type of unit.
    The CATS for a tank battalion task force, for instance, provides the
    recommended frequency for tank battalions and habitually associated
    units to conduct training on various key tasks specific to those type
    units. Unit training is currently funded through Operational Tempo
    accounts based on the amount of money required to execute the unit
    CATS.
        Units must complete certain types of training periodically to
    maintain their readiness. This training is conducted under a variety of
    rigorous conditions, often with observers from like units to provide
    feedback on unit performance. Since units experience a constant
    turnover of personnel due to soldiers leaving the Army or moving to new
    jobs, the ability of a unit to perform complex missions is perishable.
    Based on a number of factors, such as the number of essential tasks the
    unit has performed recently, the level of proficiency demonstrated on
    those tasks, and the amount of turnover the unit has experienced,
    commanders make a subjective assessment of their unit's readiness.
        Today's Army relies increasingly upon training simulators and
    simulations to augment live training and optimize the level of training
    achieved per dollar spent. Rather than actually maneuvering a group of
    Bradley Fighting Vehicles in actual terrain (live training), some tasks
    may be practiced using networked simulators. The simulators provide
    some of the training benefit while minimizing the costs of fuel and
    maintenance associated with live training. Simulators and simulations
    allow repetitive, structured training and facilitate evaluation of
    training to a common standard. They allow for the conduct of training
    under increasingly difficult (simulated) conditions, and are an
    efficient way to prepare for more costly live training.
        Periodic rotations at our CTCs provide an outstanding opportunity
    to hone essential skills. At the National Training Center in
    California, the Joint Readiness Training Center in Louisiana, the
    Combined Maneuver Training Center in Germany, and the Battle Command
    Training Program in Kansas, units conduct prolonged operations against
    a highly skilled opposing force. A professional cadre, fully versed in
    the latest doctrine, observes and critiques unit performance at each
    center.
        The maneuver CTCs provide training as close to real combat
    conditions as possible. Units deploy and conduct operations while
    immersed in a training environment that closely replicates the likely
    conditions of low- to high-intensity conflict. Extensive use of
    civilian ``role players'' and training aids, devices, simulators, and
    simulations (TADSS); dedicated opposing forces; and observer/
    controllers ensure the CTCs offer the most realistic preparation
    possible for threats ranging from terrorism to full-scale combat. Units
    complete these rotations much more proficient at critical skills than
    they were at the outset. Each unit receives a comprehensive assessment
    to guide their future training.
        In general, each maneuver CTC conducts 10 brigade rotations per
    year. U.S. Army Reserve and Army National Guard soldiers participate in
    almost all of these rotations to some extent, and some rotations are
    devoted to ARNG enhanced Separate Brigades. Last year alone, more than
    143,000 soldiers trained at either the National Training Center in
    California, the Joint Readiness Training Center in Louisiana, or the
    Combat Maneuver Training Center in Germany.
        The key to great training, at CTCs and Army bases around the world,
    is the execution of well-defined tasks under prescribed conditions to
    clearly articulated standards. The conditions must be realistic for the
    training to be meaningful. Soldiers must be able to meet the Army
    standard under such conditions in order to be considered trained. For
    soldiers who will serve in gender-integrated units, working with
    soldiers of opposite gender is a key aspect of training realism--it is
    one of the conditions under which these soldiers will conduct actual
    military operations. Gender-integrated basic training is important
    preparation for that portion of the Army's recruits that will go to
    mixed units. Units are teams, and soldiers learn to perform their
    duties best when they are trained from their first days of service to
    understand and respect other members of their team.
    Force Mix
        The size and mix of forces in the Total Army relates to the
    capabilities required by the NMS in complex ways. Most obviously, we
    must maintain sufficient trained and ready forces to respond to global
    contingencies or domestic emergencies on short notice while
    simultaneously executing sustained, people-intensive operations, such
    as Operation Joint Forge in Bosnia. Furthermore, the Army must dedicate
    adequate forces to conduct the experimentation necessary to prepare for
    information-age warfare. The force mix must allow all units to conduct
    required readiness training in addition to their operational missions.
    It must provide an adequate ``buffer'' to account for that constant
    portion of our force that is either transitioning from one assignment
    to another, undergoing initial entry training, or attending schools to
    prepare for increased responsibilities. Finally, we must maintain an
    adequate framework of people and organizations to perform the Total
    Army's institutional functions. Among its other missions, the
    institutional Army recruits and trains soldiers in the many skills
    needed for the Army as a whole. Maintaining the right number of
    soldiers trained in the 511 specialty skills the Army requires while
    achieving an optimal distribution of skills throughout the force is a
    difficult task. Currently, about 36 percent of the Army's forces serve
    in institutional assignments.
        Any discussion of Total Army force mix must address the critical
    fact that more than half of America's Army resides in the reserve
    components. Army National Guard and United States Army Reserve soldiers
    are deployed around the world every day performing missions in support
    of the NMS. These soldiers deploy with their units and as individual
    augmentees to AC units. While the ARNG and USAR still provide the basis
    for rapidly expanding the Army's available forces in an emergency, they
    are playing an important role in ongoing contingency operations as
    well.
        Based on recent experience, we are increasing the integration of
    active and reserve forces through a variety of programs (discussed
    fully in Chapter 3) and will deploy the headquarters of the 49th
    Armored Division (ARNG) to participate in Operation Joint Forge next
    year. Since reserve component soldiers balance their military service
    to the Nation with full-time jobs as civilians, it is important to
    structure their participation in ongoing contingencies to provide
    soldiers and their employers with the predictability necessary to
    properly manage this balance. Both the USAR and ARNG make critical
    contributions to our readiness at home and abroad every day: thus,
    adequately sized and resourced reserve components are an integral part
    of the Total Army's ability to execute the NMS.
    Doctrine
        Army doctrine describes how the Army fights, establishes the
    standards for how we train to fight, and details the procedures for
    caring for Army equipment. It also defines and outlines the needs of
    the future force. To maintain efficiency, any required revisions to
    existing doctrine should precede the fielding of major new pieces of
    equipment or the implementation of new organizational designs. This
    allows time for training Army leaders on how to conduct operations to
    maximize the effect of the new system or organization as well as
    ensuring that the soldiers receiving new equipment have time to receive
    training on how to operate and maintain it properly.
        Army Battle Laboratories help keep doctrine current. The Army began
    forming Battle Laboratories in 1992 as a means for the Training and
    Doctrine Command (TRADOC) to streamline its mission of identifying
    concepts and requirements for new doctrine, training, leader
    development, organizations, materiel, and soldier systems. Today there
    are 11 Battle Laboratories, each focused on specific functional areas
    that contribute to the application of effective land combat power. Each
    year, these Battle Labs team with industry to evaluate mature
    technologies from industrial research and development centers.
        Since their inception, the Battle Labs have been the focal points
    for nine Advanced Warfighting Experiments (AWE). AWEs are large-scale,
    force-on-force training exercises conducted by actual units either live
    at maneuver training centers or with computer-driven simulations. These
    experiments provide the critical analysis essential to synchronizing
    doctrine, force structure, equipment and training.
    Modern Equipment
        Maintaining the Army's capability to fight and win our Nation's
    wars requires modern equipment. Ensuring that America's military forces
    have better equipment than any potential adversary--a prerequisite for
    the combination of training and superior equipment that creates
    ``combat overmatch''--helps deter potential aggressors. Combat
    overmatch will contribute to shorter wars and fewer casualties. The
    Army has a comprehensive modernization plan designed to maintain combat
    capability greater than that of any potential adversary. While this
    plan is discussed in detail in Chapter 3, the highlights presented here
    illustrate the relationship between modern equipment and the other
    imperatives of readiness.
        Imminent and revolutionary changes in the conduct of military
    operations make it critical for the United States to field systems that
    can capitalize on information technology. Such systems make it possible
    to keep friendly forces constantly up to date on where they are, where
    the enemy is, and where other friendly units are. By enabling this
    ``situational awareness,'' systems incorporating information technology
    allow units to achieve greater effectiveness on the battlefield.
    Information technologies are significant for military logistics as
    well. Here, by giving logisticians a current status of what is
    available and what is required, modern systems can greatly improve both
    efficiency and effectiveness. The Revolutions in Military Affairs and
    Military Logistics made possible by information technologies are
    discussed in greater detail in Chapter 3.
        Digitization refers to the fielding of equipment and to equipment
    modifications that provide information dominance. This capability will
    allow all U.S. and other friendly forces to share an accurate,
    constantly updated common view of the entire battlefield, enabling them
    to act faster than the enemy can react. The Army's digitization
    strategy includes experimentation, evaluation, and acquisition to
    achieve specific results: equipping the first digitized division by the
    end of fiscal year 2000 and the first digitized corps by the end of
    fiscal year 2004. Army XXI--the force with the fielded information
    dominance capability--is a critical step to maintain combat overmatch
    while maturing the technology required for the revolutionary force of
    the next century, the Army After Next (AAN).
        Modernization requires a significant investment of soldiers to
    conduct the training experiments necessary for the development of new
    systems and doctrine. Recent Advanced Warfighting Experiments have been
    key elements for ensuring that our doctrine, leader development and
    force structure are synchronized with the introduction of new
    equipment. Experiments have guided the Heavy Division Redesign that
    will be the blueprint for the 4th Infantry Division (Mechanized). This
    redesign, explained in detail in Chapter 3, encompasses the integration
    of reserve component soldiers and units as well as a dramatic reduction
    in the number of main combat systems (tanks and infantry fighting
    vehicles). The reduction in numbers of tanks and infantry fighting
    vehicles in the new heavy division is possible because of the increased
    capabilities that digitization brings to the force; these capabilities
    were validated by experimentation.
        The imperative of modern equipment involves more than the
    integration of new systems with enhanced capabilities discussed above.
    It is also important to recapitalize existing systems to account for
    the wear and aging that is a normal part of the life cycle of any piece
    of equipment. It often takes more money and time to maintain older
    equipment than new equipment. The inefficiency of failing to
    recapitalize existing systems drains critical dollars away from other
    Army requirements, including research and development of next-
    generation systems, which degrades our ability to maintain combat
    overmatch in the long term. A balanced, long-term approach to
    modernization is important to provide the Army with the equipment
    necessary to assure readiness.
    Leader Development
        The senior leaders who will have to train, maintain, and fight the
    Army After Next are now in our ranks. We must train these leaders to be
    comfortable with information technologies so they can maximize the
    effects of those technologies without being overwhelmed by the high
    volume of information. We must also constantly scrutinize the roles of
    officer, warrant officer, and noncommissioned officer (NCO) leaders in
    the future organizations of Army XXI and the Army After Next. Only by
    continually assessing the implications of new technologies for the
    roles leaders will play on future battlefields can we ensure that we
    provide our future leaders with the skills and knowledge they will need
    to fight and win.
        Leader development in the Army is accomplished through
    institutional training, operational assignments, and self-development.
    Different training courses conducted by the institutional Army prepare
    officers and NCOs for specific levels of responsibility in units by
    teaching the doctrine and basic skills which leaders at that level must
    have. Operational assignments allow leaders to put what they have
    learned into practice. Finally, the shared conviction that the military
    profession requires special commitment motivates self-development
    programs that are a key contributor to leader confidence and success.
        Accomplishing all of this intensive preparation while maintaining
    the ability to shape and respond requires a new way of thinking about
    leader development. The technologies that are reshaping our world offer
    opportunities for revolutionizing military professional education
    programs by fully exploiting distance learning to supplement or replace
    other educational techniques. Distance learning relies on information
    technology to bring the classroom to the student. With distance
    learning technology, we can make leader development a continuous
    process with significantly enhanced opportunities for self-development.
    We will blend distance learning and periodic institutional training at
    Army schools with intensive training and mentoring in units to develop
    the warrior-leaders of the 21st century.
                                   conclusion
        The Army is a Total Force comprised of active and reserve component
    soldiers and Army civilians. We have extensive capabilities for
    conducting military operations throughout the full spectrum of military
    operations, and we generate these capabilities by synchronizing the six
    imperatives of quality people, training, doctrine, force structure,
    modern equipment, and leader development. Our contribution to national
    security rests on the quality of the American soldiers and civilians
    who make up the Total Army.
        ``Without readiness in necessary land forces, all so-called
    retaliatory and even defensive plans are mere scraps of paper.''
    President Dwight D. Eisenhower
       Chapter 3--Readiness for the 21st Century: Knowing What to Change
        The Army is executing a comprehensive plan for achieving full-
    spectrum dominance in the 21st century. The likely requirements of
    future national security strategy are the foundation of our plan for
    future readiness. From these anticipated requirements, Joint Vision
    2010 establishes the conceptual template for America's armed forces in
    the 21st century. Army Vision 2010 identifies the capabilities required
    to ensure our Army remains ready to conduct prompt and sustained
    operations on land throughout the full spectrum of military operations.
        The Army uses the Force XXI process to ensure it remains the
    preeminent information-age Army. To do this, Force XXI incorporates a
    holistic approach to change. This innovative approach, which we call
    ``spiral development,'' compresses the development cycle for new
    systems by fielding prototypes and incorporating new technologies on
    fielded systems within a designated experimental force.
        The Army Modernization Plan describes our long-term strategy for
    modernization given anticipated force requirements. The plan uses
    modernization goals, the six Army patterns of operation from AV2010,
    and the results of experimentation to prioritize modernization
    investments and acquisitions. This prioritization yields a two-stage
    evolution to the Army After Next. The first stage, Army XXI, is an
    essential step to preserve the synchronization of the six imperatives
    and assure readiness in the mid-term. Army XXI, the product of the
    Army's near-term digitization and product improvement efforts, will
    achieve these objectives by fielding systems that enable the Army to
    achieve and exploit information dominance. Army XXI will begin to come
    into existence when the 4th Infantry Division (Mechanized) is equipped
    with digital capability in fiscal year 2000. The AAN will couple
    information dominance capabilities with lighter, more agile systems we
    expect to be possible with future technologies.
        Amidst the many changes we are making to assure readiness for the
    21st century, the Army must preserve its commitment to its core values,
    which are the bedrock of success in battle and in the service of the
    Nation. We must also continue our commitment to taking care of the
    quality soldiers and civilians who make up the Total Army.
                         strategy for the 21st century
        The requirements of military readiness arise from the Nation's
    interests and the security strategy designed to protect those
    interests. The current National Security Strategy identifies certain
    goals that have remained constant throughout our Nation's history:
    Protect the lives and safety of Americans; Maintain the sovereignty,
    political freedom, and independence of the United States, with its
    values, institutions, and territory intact; and Promote the prosperity
    and well-being of the nation and its people.
        Beginning with the likely trends that will affect future national
    security requirements and the future military capabilities necessary to
    carry out those requirements, this chapter presents the Army programs
    for experimenting with new technologies and building required
    capabilities. The potential for significant changes in the conduct of
    military operations is the catalyst for the Army's efforts to acquire
    systems that can exploit the latest information technology. The Force
    XXI process and the Army Modernization Plan are key elements to the
    identification, development and acquisition of information-age systems.
    Tomorrow's Geostrategic Environment
        Recent studies of military readiness and national security
    requirements offer assessments of the shape of the 21st-century
    geostrategic environment based on current demographic, economic,
    political and environmental trends. Population growth, increasing
    competition for critical resources, and possible environmental
    catastrophes all feature in these projections. The possibility that
    some societies will collapse due to their inability to provide basic
    services is another feature common to many projections. Threats posed
    by terrorism and regional competitors, along with the potential
    emergence of a peer rival, are likely. Some forecasts are more
    optimistic than others. However, since military capabilities are built
    over long periods of time and can erode rapidly, projections of likely
    military requirements must address the less optimistic scenarios. The
    fact that multiple threats could confront the United States
    simultaneously increases the importance of preparing now.
        Global trends indicate a continuing need for the Army to respond to
    crises and catastrophes abroad and at home into the next century. To
    mitigate and, whenever possible, prevent global threats, we are also
    likely to be called on to continue our current extensive commitment to
    shaping operations. The requirement to protect the lives and safety of
    Americans demands that we remain ready to fight and win our Nation's
    wars and to accomplish this mission decisively, with minimal American
    casualties.
    Joint Vision 2010 and Army Vision 2010
        Joint Vision 2010, a conceptual template for America's armed
    forces, predicts that the United States will face a wider range of
    threats in the future. Threats to our national interests range from the
    possibility of terrorist attacks here in our own country to potential
    for full-scale conflict with a rising global or regional peer. The
    proliferation of weapons of mass destruction and the unpredictability
    of rapid technological advances are dangerous variables that could
    affect conflict at any point along the spectrum of military operations.
    Since mid- to high-intensity combat operations present us with the most
    demanding requirements, and forces designed to meet these requirements
    are also capable of conducting operations in a lower intensity
    environment, JV2010 concludes that we should continue to build the
    capabilities required to conduct direct combat operations.
        JV2010 predicts that joint and, where possible, combined operations
    will continue to be the most effective recipe for defeating threats in
    the next century. The four operational concepts of dominant maneuver,
    precision engagement, full dimensional protection, and focused
    logistics will guide the application of combat power in the information
    age. To support these operational concepts and achieve new levels of
    effectiveness as the land component member of the joint warfighting
    team, Army Vision 2010 distills six essential Army patterns of
    operation: Gaining Information Dominance, Projecting the Force,
    Protecting the Force, Shaping the Battlespace, Decisive Operations, and
    Sustaining the Force. By identifying concepts, technologies, and
    systems that support these patterns of operation, AV2010 provides the
    starting point for the experimentation necessary to build a 21st-
    century Army. The Army envisioned by AV2010 will be capable of
    projecting power globally as part of the joint team and of conducting
    prompt and sustained operations on land throughout the full spectrum of
    military operations.
     army experiments and the revolutions in military affairs and military
                                   logistics
        The term Revolution in Military Affairs (RMA) refers to the radical
    enhancement of warfighting capability enabled by the application of
    information technology to military systems. By adding high-speed
    computers and communications to weapons systems and other military
    equipment, it is possible to provide all friendly forces with an
    almost-continuously updated picture of where they are, where the enemy
    is, and where other friendly units are. Situational awareness on this
    scale increases the lethality of friendly forces by allowing the
    focused application of combat power against enemy systems and units. At
    the same time, the survivability of friendly forces increases because
    of the enhanced ability to avoid the enemy's combat power and because
    of the reduction in accidental casualties, or fratricide, among
    friendly units. Finally, information dominance allows friendly forces
    to act far more rapidly than the enemy can react. For these reasons,
    the application of the latest information technology to the military
    sphere will create a revolutionary change in the nature of military
    operations.
        The revolutionary potential of information technology extends to
    military logistics as well. The Revolution in Military Logistics (RML)
    harnesses technology to provide an almost-continuously updated picture
    of the logistics requirements of units as well as the location and
    status of supplies, equipment, personnel, and logistics organizations
    on the battlefield. With this level of situational awareness, friendly
    forces can focus logistics resources where they are needed, and, in the
    process enhance both the effectiveness and the efficiency of the force.
        The potential for revolutionary change demands that we assess the
    impact of new technologies on the Army and make appropriate adjustments
    to maintain the best and most effective force possible. Other nations
    will pursue the advantages of information technology, much of which is
    commercially available. The Army cannot afford to pursue the
    acquisition of information technology haphazardly because the systems
    ultimately must support information sharing across the entire joint
    team and among both active and reserve component forces. Therefore, as
    the potential of emerging information technologies became apparent, the
    Army developed an experimentation process and campaign plan to guide
    our investigations of new concepts and technologies. The Force XXI
    process, the Army Experimentation Campaign Plan, and the Army After
    Next Project help the Army efficiently explore how best to match
    technology against the practical requirements of soldiers and leaders
    now and in the future.
    Force XXI: A Process for Synchronizing Future Readiness and Change
        The Army has adopted Force XXI as its process for building the
    information-age Army. The Force XXI process leverages the power of
    information age technology through a series of experiments ranging from
    the large-scale AWE to smaller-scale efforts focused on particular
    functional areas. By streamlining the way we turn concepts into
    systems, Force XXI provides us with the experimental data needed to
    maintain the most capable land combat force in the world. It evolved
    from the requirement to manage revolutionary change extending across
    virtually all of the functions of joint warfighting. The process allows
    rapid evaluation of a broad range of technologies, identification of
    promising areas, and development of new systems in those areas. To do
    this, Force XXI incorporates a holistic approach to change that ensures
    that innovations are synchronized with the six imperatives discussed in
    Chapter 2.
        This innovative approach, which we call ``spiral development,''
    compresses the development cycle for new systems by fielding prototypes
    and incorporating new technologies on fielded systems within a
    designated experimental force. By locating contractors and program
    managers with the experimental force and conducting various military
    operations in a training environment, soldiers and leaders are able to
    provide feedback. Valid feedback is incorporated directly into system
    improvements, which are then used in further operational tests. This
    ``foxhole to factory'' linkage leads to a significantly faster
    development cycle, and permits a more rapid fielding of new information
    technology capabilities to soldiers and units.
        This process not only develops systems more rapidly than the
    traditional developmental process, it also provides important insights
    that are often not evident with more linear development processes until
    after the systems are fielded. Many of the operational and human
    factors affecting system characteristics and doctrine do not appear in
    isolated tests of the system. Only when the system is employed in
    concert with other Army systems and under demanding conditions do the
    full implications, strengths, and limitations of the system emerge. The
    ``spiral development'' of the Force XXI process facilitates
    synchronization of the six imperatives: it provides insights into
    doctrinal and force structure adjustments necessary to employ new
    systems and helps identify leader development and training necessary to
    prepare soldiers to use new systems effectively.
    The Army Experimentation Campaign Plan
        The Army Experimentation Campaign Plan (AECP) maps future
    experiments and exercises that support each successive phase of the
    Force XXI process. Currently, the AECP is oriented along three axes:
    Mechanized Contingency Force, Light Contingency Force, and Strike
    Force. In each of these axes, the AECP provides the framework upon
    which new organizational designs and concepts will be developed. The
    AECP will move the Army from concepts to capabilities in the new
    systems and organizations that will make up the Army After Next.
        The mechanized axis focuses on heavy forces. Recent heavy-force
    experiments conducted with the 4th Infantry Division (Mechanized)
    (4ID(M)) have led to the redesign of the Army heavy division. Future
    heavy axis milestones include the Division Capstone Exercise (DCX). The
    DCX concept involves a live, brigade-level National Training Center
    rotation at Fort Irwin, CA in March, 2001, and a computer-based Battle
    Command Training Program Warfighter Exercise at Fort Hood, TX in
    September, 2001. These 4ID(M) training events will demonstrate go-to-
    war capabilities with the systems to be fielded over the next few
    years.
        The light axis includes units that can fight their way into a
    theater of operations by seizing ports, airfields, or other areas.
    These units also operate well in urban and restrictive terrain and are
    often called ``contingency forces'' because of their rapid response
    capability. A Joint Contingency Force (JCF) AWE for this axis will
    occur in September 2000, focusing on crisis response and rapid
    deployment. One objective for this AWE is to improve the effectiveness
    and efficiency of joint command, control, communication, computers,
    intelligence, surveillance and reconnaissance (C\4\ISR) through
    digitization, enhanced communications, and joint interoperability of
    systems, processes and procedures. Another objective is to improve
    joint operations in urban and restrictive terrain. Finally, this AWE
    will serve as a venue for experimentation with U.S. Atlantic Command's
    joint experimentation process.
        The Strike Force axis will lead to the development of a highly
    deployable, agile, lethal, and survivable middleweight force. Strike
    Force will provide a bridge between early-entry light forces and
    slower-to-arrive mechanized forces, combining the strengths of both
    heavy and light forces in a rapidly deployable configuration able to
    enhance early-entry operations as well as operate in urban and
    restrictive terrain. Initially, it will be a command and control
    headquarters that can assimilate light, airborne, air assault,
    mechanized and motorized joint and combined forces to create a tailored
    force package for entry operations. This Strike Force headquarters will
    participate in the JCF AWE.
        The AECP provides key experience and analysis to guide the
    development and employment of new systems. It allows the Army to
    synchronize the six imperatives over time. By employing the latest
    technology and dedicated experimental forces in controlled warfighting
    experiments, the three axes of the AECP ensure that the Army will
    continue to identify and address evolutionary and revolutionary changes
    in the conduct of land warfare.
    Battle Labs and CTCs: Enabling Change
        Army Battle Labs and Combat Training Centers (CTCs) have been
    critical to the success of the Force XXI process. Battle Labs
    facilitate the spiral development process through different types of
    experiments, ranging from large-scale Advanced Warfighting Experiments
    to smaller Advanced Technology Demonstrations (ATD) and Advanced
    Concept Technology Demonstrations (ACTD). While the larger AWE might
    involve the integrated efforts of multiple Battle Labs, ATD and ACTD
    are most often managed by individual labs. The recent Military
    Operations in Urban Terrain (MOUT) ACTD provides examples of
    experiments conducted by the Battle Laboratories in fiscal year 1998.
    Three experiments were conducted employing infantry platoons as the
    experimental force. Each experiment assessed selected technologies
    designed to enhance joint Army and Marine Corps warfighting
    capabilities in urban terrain. Tests such as these offer an efficient
    way to identify promising technologies and improve systems deemed
    suitable for further development.
        Advanced Warfighting Experiments leverage the fully-instrumented
    training environments of Army CTCs to enable comprehensive evaluation
    of new systems and technologies on a large scale. The 4th Infantry
    Division (Mechanized) Task Force XXI AWE at the NTC (March 1997) and
    the subsequent Division AWE conducted at Fort Hood in conjunction with
    the Battle Command Training Program (November 1997) are examples of the
    Force XXI process in action. The results of these experiments were key
    to the Heavy Division Redesign.
    The Army After Next Project
        The term ``Army After Next'' is frequently used to refer to the
    Army of 2025, but it also refers to a project begun in 1996. The
    mission of the AAN Project is to conduct broad studies of warfare out
    to the year 2025 to assist senior leaders in developing a vision of
    future Army requirements. The project examines a wide range of areas,
    including the future strategic setting, force projection concepts, the
    use of AAN-era forces in urban and complex terrain, AC/RC integration,
    the role of the Army in homeland defense, the nature of future joint
    and coalition operations, and the identification of promising
    technologies. Issues and insights from the AAN Project help focus the
    Army's science and technology efforts and combat development program.
        The AAN Project institutionalizes a process for examining the
    probable nature of future warfare. Each year, the Army sponsors a major
    wargame, conducts follow-on seminars and games to examine specific
    issues in greater depth, and produces a report capturing the insights
    gained. During the fiscal year 1999 Spring Wargame, the opposing force
    will be a major military competitor equipped with asymmetric
    capabilities including weapons of mass destruction and advanced
    information technology systems. Subsequent events will examine the Army
    imperatives and the transformation of the current Army into the Army of
    2025.
        The Army has sponsored three major AAN wargames to date, each
    involving hundreds of participants in computer-supported exercises.
    Representatives from all services and from multiple agencies outside
    DOD participate in each game. During the past two years, the AAN
    Project has made significant contributions towards shaping both near-
    term transformation efforts and the Army of the future.
    Joint and Combined Experimentation
        As evidenced by the AAN wargames and our inclusion of other
    services in our AWE, the Army fully supports recent initiatives in
    joint experimentation. The designation of the Commander-in-Chief, U.S.
    Atlantic Command (USACOM), as the DOD Executive Agent for joint
    experimentation last May will accelerate this process. Joint
    experimentation will leverage Army expertise developed in our highly
    successful experimentation program and will employ CONUS-based Army
    organizations and facilities.
        Through efforts to shape the development of joint operational
    concepts and integrate our Battle Labs with USACOM joint
    experimentation activities, the Army is ensuring that new systems are
    compatible with those of the other services. The Army is also engaged
    in a number of forums designed to ensure that we achieve multinational
    force compatibility with our allies and likely coalition partners.
    Cooperative research and development efforts with our NATO allies to
    field interoperable information systems is supplementing our own
    modernization efforts. Cooperative efforts with allies can help America
    gain access to advanced foreign technologies while at the same time
    enhancing the interoperability and effectiveness of future coalitions.
                            army modernization plan
        The Army's Modernization Plan balances, with risk, the demands for
    current and future readiness within fiscal constraints. Because of the
    great potential of information technologies, digitization is a high
    priority for our near-term efforts. Since maintaining interoperability
    is vital in fielding digitized systems, the Army will field digital
    capability by Brigade Combat Team, the critical grouping of combined
    arms elements that wage the maneuver war. Maintaining interoperability
    with the reserve components is another important consideration in the
    Army's Modernization Plan. The plan also emphasizes recapitalization of
    our aging equipment, because the savings in operations and sustainment
    costs generated by recapitalization are critical to funding the
    transition to the Army After Next.
        The long-term strategy for modernization which the Army
    Modernization Plan describes uses modernization goals, the six Army
    patterns of operation from AV2010, and the results of experimentation
    to prioritize investments and acquisitions. This prioritization yields
    a two-stage evolution to the AAN. The first stage, Army XXI, is an
    essential step to ensure the Army assimilates the revolutionary
    capabilities of information technologies into its training, force mix,
    doctrine, equipment, and leader development while maintaining readiness
    through the mid-term. Army XXI will achieve these objectives by
    fielding systems that enable the Army to achieve information dominance.
    The AAN will couple these information dominance capabilities with
    lighter, more agile systems we expect to be possible with future
    technologies. This section provides an overview of Army modernization
    goals and surveys some major systems that contribute to the six AV2010
    patterns of operation.
    Army Modernization Goals
        The Army's modernization strategy establishes and pursues specific
    goals essential to enabling AV2010 patterns of operation. The five
    major goals of Army modernization are: Digitize the Army; Maintain
    Combat Overmatch; Sustain Essential Research and Development and Focus
    Science and Technology to Leap-Ahead Technologies; Recapitalize the
    Force; and Integrate the AC and RC. The discussion in this section
    explains how achieving these goals will equip our Army to maintain
    full-spectrum dominance in the 21st century.
        To achieve the capabilities required by AV2010, the Army's number
    one modernization priority is to achieve information dominance in the
    near- and mid-terms. Information dominance stems from superior
    information systems and the mindset and training that ensure soldiers
    are prepared to win on the complex battlefield of the future.
                Digitize the Army
        The first Army modernization goal, Digitizing the Army, is the
    means by which we will achieve information dominance. Digitization
    involves the use of modern communications capabilities and computers to
    enable commanders, planners, and shooters to rapidly acquire and share
    information. This enhanced ability to share information will improve
    our ability to find and target the enemy rapidly and precisely.
    Digitization is not a program in the traditional acquisition sense.
    Rather, it is a broad effort to integrate command and control hardware
    and software, the underlying communications systems, and weapons
    systems to provide information-sharing throughout the battlespace.
        Our digitization efforts leverage the latest advances in
    information technology from the commercial sector. We will equip the
    experimental force--the 4th Infantry Division (Mechanized) at Fort
    Hood--with digital capabilities by the end of fiscal year 2000, and
    will digitize III Corps by the end of fiscal year 2004. The force with
    the fielded digital capabilities is Army XXI, the intermediate force
    between the Army of today and the Army After Next.
        It is difficult to overstate the importance of the initial goal of
    digitization. Since much of this technology is available commercially,
    timely investment is essential to maintain our status as the world's
    preeminent land combat force in the information age.
                Maintain Combat Overmatch
        The Army currently enjoys combat overmatch in most ground combat
    systems. The addition of Comanche and Crusader will add decisive combat
    power to Army XXI and the Army After Next. Modernization of current
    systems is important to maintain overmatch as threat capabilities
    improve. Improvements in signature reduction, survivability, and air
    defense protection by potential adversaries will require corresponding
    improvements in target acquisition, lethality, and range in order to
    keep our current advantage. Preplanned Product Improvement (P\3\I)
    programs will enhance combat effectiveness through periodic, focused
    technology insertions and will maintain much of the industrial base.
    Making the minimal improvements necessary to maintain combat overmatch
    was a function of the Army's decision to accept risk in modernization
    in order to fund near-term readiness requirements. The Longbow Apache
    program is an example of how the Army will use technology upgrades to
    maintain its combat overmatch capabilities.
                Sustain Essential Research and Development and Focus
                        Science and Technology on Leap-Ahead Technologies
        In recent years, the Army deferred the modernization of many
    systems. Deferred modernization creates a capability gap as current
    systems approach wearout dates without replacement systems ready for
    fielding. In order to have systems with the required capabilities and
    characteristics in the far term, the Army must field some leap-ahead
    capability systems to bridge the gap caused by modernization deferrals.
    Focused Research and Development (R&D) investments addresses this
    challenge by accelerating essential leap-ahead technologies and
    ensuring the industrial base is ready to field the systems needed for
    Army After Next. Developing technologies to make lighter, more mobile,
    more supportable vehicles is an integral part of the focused R&D
    strategy.
                Recapitalize the Force
        Recapitalization of worn or dated equipment extends its usability
    and effectiveness. The Army recapitalizes its equipment through a
    combination of replacement and refurbishment programs that not only
    extend useful life, but also reduce operating costs. Current production
    and fielding rates of many Army systems do not meet the levels required
    to prevent fleet aging from becoming a chronic problem.
        Some examples of systems requiring recapitalization include the
    Abrams and Bradley powerpacks (engines), other armor systems, and
    aviation Service Life Extension Programs.
                Integrate the Active and Reserve Components
        The Army will continue to modernize the reserve components along a
    timeline that ensures that AC and RC forces remain interoperable and
    compatible. Initiatives to create multi-component units underscore the
    importance of this modernization goal. The reserve components are at a
    historical high point in modernization due to a combination of
    procurement programs and equipment cascading from AC forces. For
    example, M1/M1A1 Abrams tanks have replaced M60A3s in all ARNG tank
    battalions, and five transport and supply companies in the USAR have
    been equipped with modernized Heavy Equipment Transports.
        The Army's modernization plan uses the goals discussed above to
    allocate resources over time to transform the Army from its current
    state to Army XXI and then Army After Next. Current modernization
    investments emphasize fielding equipment with the latest information
    technologies. This will allow the Army to train its soldiers and
    leaders to operate effectively as part of the digitized force, Army
    XXI, and give that force as a whole ``mental agility.'' As the
    evolution to the Army After Next continues, the Army's modernization
    investments will shift to the procurement of additional advanced, or
    leap-ahead, systems that will be lighter and more mobile. The force
    which combines the mental agility of Army XXI with the physical agility
    made possible by lighter systems is the Army After Next, an Army able
    to assure readiness for the 21st century.
                         fielding required capabilities
        As stated previously, the Army has derived six patterns of
    operations from the operational concepts of JV2010 and likely land
    power requirements of future national security strategies. The U.S.
    Army 1998 Modernization Plan links specific systems to each pattern of
    operation. This section highlights some of the systems and programs
    that contribute significantly to the six patterns of operation.
    Gain Information Dominance
        Fielding the systems necessary to gain Information Dominance is
    essential to realizing the potential of the Revolution in Military
    Affairs. As mentioned previously, digitization is not a single program
    but a broad effort affecting many programs.
        The digitization effort ranges from upgrading tanks and infantry
    fighting vehicles to incorporate onboard computers to the fielding of
    the Army Battle Command System (ABCS). ABCS is the central framework
    for networking the battlefield to execute military operations faster
    and more decisively. It includes other critical systems that will form
    the backbone of the networked and digitized force. These systems
    include the Army Tactical Command and Control System (ATCCS); Force XXI
    Battle Command Brigade and Below (FBCB\2\); Maneuver Control System
    (MCS); Single Channel Ground Airborne Radio System, System Improvement
    Program (SINCGARS-SIP/ASIP); Enhanced Position Location Reporting
    System, Very High Speed Integrated Circuitry (EPLRS-VHSIC); and the
    Joint Tactical Radio System (JTRS). Together, these systems will yield
    near real time situational awareness throughout the force. Such
    situational awareness, in turn, makes it possible to apply combat power
    much more rapidly and effectively than our enemies, increase the
    survivability of our systems, and decrease fratricide.
        Ensuring compatibility with other members of the joint team is a
    critical part of attaining information dominance. The Army Enterprise
    Architecture (AEA) is the Army's process for developing and maintaining
    an integrated information systems blueprint. This blueprint is being
    developed in accordance with the 1996 Clinger-Cohen Act and will ensure
    Army systems meet required compatibility standards within DOD.
    Project the Force
        In addition to the Army Strategic Mobility Plan, which ensures the
    fielding of the Air Force C-17 Globemaster III and the Navy's expansion
    of its RO/RO sealift capability (discussed in Chapter 2), another group
    of programs that support Projecting the Force are those that provide
    Logistics Over The Shore (LOTS) capability. This set of systems
    includes vessels to transport cargo from strategic sealift ships to the
    beach, pier, or shore. Utility craft, such as floating cranes, also
    contribute to LOTS operations. By ensuring the Army can conduct
    operations over unimproved shorelines and through restricted access
    ports, LOTS equipment enhances the Army's ability to Project the Force.
    Protect the Force
        Theater Air and Missile Defense (TAMD) is a key requirement for
    Protecting the Force. From initial entry to redeployment, Army air and
    missile defense systems support the joint TAMD architecture. In
    addition to defending against aircraft, the Patriot system provides
    lower tier protection against Tactical Ballistic Missiles (TBM) within
    a limited area. Patriot Advanced Capability-3 (PAC-3) will more than
    double the defended area, defeat more capable TBM that have more than
    twice the range of the Gulf War threat, and increase missile accuracy
    and lethality to effectively destroy TBM and cruise missiles with WMD
    warheads. The Theater High Altitude Air Defense System (THAAD),
    currently being developed for possible deployment in 2007, will provide
    wide-area, upper-tier protection against TBM. The Army also supports
    the continued development of a system capable of providing force
    protection for forward area critical assets against short-range
    ballistic missiles and cruise missiles. The Medium Extended Air Defense
    System (MEADS) was being developed for this purpose. No other planned
    or programmed TMD system of any service can fill this role.
        Protection of maneuver forces against attacking aircraft has been
    greatly enhanced with the fielding of the Bradley Linebacker, the
    Sentinel radar, and the Forward Area Air Defense Command and Control
    System (FAADC\2\). The future fielding of Avengers with Slew-to-Cue
    capability will further improve air defense capability. These
    improvements provide greater lethality against existing and emerging
    air threats and will increase the survivability of our combat forces on
    future battlefields.
    Shape the Battlespace
        Shaping the battlespace refers to the synchronized use of various
    Army assets and weapons systems, such as long-range missile fires,
    jamming, and deception, in conjunction with maneuver, to overwhelm an
    enemy. The destruction of enemy reinforcements with long-range fires
    before they can influence the fight is an example. The capability to
    detect enemy forces at great distances and transmit this information to
    friendly forces, often referred to as sensor-to-shooter linkages, are
    key to shaping the battlespace. The Joint Surveillance Target Attack
    Radar System (JSTARS) Ground Station Module/Common Ground Station
    receives, processes, manipulates, and disseminates data from the
    airborne JSTARS radar, unmanned aerial vehicles, and other tactical,
    theater, and national systems. The Army Tactical Missile System
    (ATACMS) Block IIA program combines an extended-range missile (300 km)
    with the Brilliant Anti-Tank munition to engage moving armor formations
    effectively at great distances. The capability to detect and disrupt
    enemy formations at long range provided by these systems is an
    important element of land combat power.
    Decisive Operations
        Decisive Operations compel the enemy to do what friendly forces
    want them to do (e.g., retreat, surrender, etc.). In combat operations,
    we achieve this result by winning battles. With the exception of the
    M109A6 Paladin howitzer, we currently have better systems than our
    potential adversaries. However, other nations are developing weapons
    that equal, and, in some cases, surpass the weapons we currently field.
    Further, the dramatic increases in system capabilities made possible by
    emerging information technologies could accelerate the fielding of more
    capable systems by other nations. This makes improving our current
    systems critical to maintaining our current combat overmatch.
        Several other nations, including Russia and China, currently field
    howitzers with better ranges and rates of fire than the Paladin. The
    Crusader is the Army's highest priority ground combat modernization
    program. This howitzer will give the Army a better system for providing
    close artillery fire than that of potential enemies. The Crusader
    features advanced technology, including the world's first fully-
    automated reload system, which makes Crusader's rate of fire more than
    three times that of the Paladin. Other incorporated technology advances
    ensure that the Crusader will remain the world's best close artillery
    system well into the 21st century and the AAN. While heavier than the
    current howitzer, the threefold increase in rate of fire that Crusader
    provides translates into a dramatic reduction in the strategic lift
    required to provide fire support for deployed forces because fewer
    Crusaders can provide better fire support than a larger number of the
    current howitzers.
        The reconnaissance, security, and attack functions of Army aviation
    are keys to our capability to conduct decisive operations. The Longbow
    Apache fuses new technology with proven performance to ensure our
    forces retain the best attack helicopter into the next century. The
    RAH-66 Comanche addresses the current deficiencies in reconnaissance
    and security helicopters (Kiowa, Cobra) by providing a day, night, and
    adverse weather armed reconnaissance capability. Comanche is fully
    digitized, highly deployable, and is designed to operate in the joint
    environment.
        The Abrams Upgrade and Systems Enhancement Programs are other key
    pieces of the Army's modernization strategy. The upgrade consists of
    converting M1 tanks to an M1A2 configuration through a number of
    improvements which include a digital electronics package, better armor,
    and better night vision. The M1A2 System Enhancement Program further
    improves the M1A2's digital, night vision, and on-board navigation
    system. Because they enable each tank to send and receive reports via
    digital command and control systems, these upgrades are an important
    aspect of digitizing the battlefield. Since the Army cannot afford to
    upgrade all its tanks to the M1A2 standard and continue to pursue other
    important modernization objectives, some M1s will be converted to M1A1D
    models. By adding an applique computer, this upgrade gives the M1A1D
    digital capability.
    Sustain the Force
        Sustainment enables all other patterns of operation. The improved
    situational awareness afforded by digitization is essential to achieve
    both the Revolution in Military Logistics and the capability for
    focused logistics envisioned by JV2010. The Global Combat Support
    System-Army (GCSS-A) will be the automated system that will provide
    global visibility of assets and requirements. GCSS-A will interface
    with the Combat Service Support Control System (CSSCS), which is the
    component of the Army Tactical Command and Control System that will
    provide instant visibility of tactical logistics requirements and
    assets. CSSCS features automatic connectivity to consumption sensors
    that eliminate the need for manual input from logistical, medical,
    financial and personnel systems. These systems, together with other
    improvements in equipment, communications, and organizational design,
    will help streamline sustainment and contribute to reduced demand.
    GCSS-A and CSSCS are key contributors to a more responsive logistics
    system.
        Tactical Wheeled Vehicle (TWV) modernization is another key to
    providing the logistics capabilities required for the 21st century.
    Approximately 25 percent of the TWV fleet has exceeded its life
    expectancy. Congress provided additional funds in fiscal year 1999,
    which has helped with the procurement of new vehicles. To support the
    requirement of sustaining the force and avoid the inefficiencies of
    maintaining an aging fleet, the Army must continue funding of TWV
    modernization, including recapitalization.
                             future force structure
        The Total Army has decreased in size by 37 percent since the end of
    the Cold War. The endstrengths recommended by the QDR (480,000 AC and
    530,000 RC) make the Army as small as it can get while continuing to
    meet the demands of the National Military Strategy with acceptable
    risk. Further, reducing the size of the Total Army is likely to
    increase the time it takes to win future wars, with an attendant rise
    in casualties.
        The Army has undertaken a number of initiatives in the force
    structure arena. We are continuing the Total Army Analysis process for
    evaluating our force structure. Based on recent experimentation, we
    have created a new design for heavy divisions that exploits the
    potential of digitization. Future light force experimentation and
    ongoing initiatives to achieve seamless integration of AC and RC forces
    will also influence force structure in the near term. Together, Total
    Army Analysis 2007 (TAA07), the Heavy Division Redesign, the ARNG
    Division Redesign, and the series of Total Army integration initiatives
    reflect the Army's efforts to shape the force to best meet the
    requirements of the NMS.
    Total Army Analysis 2007
        The Total Army Analysis process provides periodic assessments of
    Army force structure. TAA07 will capture the full range of Army
    requirements, going well beyond the possibility of having to fight two
    nearly simultaneous, major theater wars (MTW). TAA07 will be the first
    study to evaluate the force requirements for both the institutional and
    operational forces of Army XXI. It will consider the full range of
    emerging requirements, such as Homeland Defense and Domestic Operations
    Support, and will integrate Force XXI organizational designs. As part
    of the ongoing TAA process, TAA07 will ensure that our Army is
    employing its total strength in the most effective manner possible.
    Division XXI: Redesigning the Heavy Division
        The redesigned heavy division has fewer people in both its armor
    and mechanized infantry variants than the current Army of Excellence
    (AOE) division due to the greater synergy and efficiency made possible
    by digitizing the force. The enhanced situational awareness made
    possible by digitization allows maneuver forces to move to points of
    positional advantage with greater speed and precision, avoid enemy
    strengths, and combine effects of direct and indirect fires more
    quickly and effectively than non-digitized forces. Consequently, the
    number of main battle systems (tanks and infantry fighting vehicles)
    decreases from 58 to 44 in each line battalion in the Division XXI
    force structure. The increased efficiency gained from digitization in
    the logistics arena allows for a reduction in the number of soldiers
    performing the division's combat service support functions. In sum, the
    Division XXI armor and mechanized infantry divisions are about 12
    percent smaller than their AOE predecessors, with total required
    strengths of 15,593 and 15,812, respectively.
        The Division XXI design features a number of innovations. Each
    variant has 513 Reserve Component authorizations, including one ARNG
    MLRS battery and one ARNG general support aviation company. Embedding
    RC soldiers and units in the Division XXI force structure recognizes
    the essential role they play in Army operations today and will
    facilitate sustaining their readiness and rapid deployability in the
    next century. Among its other features, the new design adds a 49-man
    reconnaissance troop to each maneuver brigade, and increases mechanized
    infantry strength by including three squads of nine men each in
    infantry platoons. Based on the anticipated increase in direct support
    artillery capability provided by the Crusader, the Division XXI design
    reduces the number of howitzers in the new division from 24 to 18.
    Overall, the new design significantly reduces the number of people in
    our heavy divisions as a result of the increased lethality,
    survivability, and efficiency we expect from digitization.
    ARNG Division Redesign Study
        Total Army Analysis 2005 identified a 72,000-soldier shortfall
    between required and available combat support (CS) and combat service
    support (CSS) force structure. Two years ago, the ARNG Division
    Redesign Study recommended the conversion of approximately 48,000
    personnel authorizations currently in ARNG combat force structure to
    provide some of this required CS and CSS structure. The ARNG will
    convert six combat brigades (19,000 soldiers) between fiscal year 2000
    and fiscal year 2005, with the rest of the conversion taking place by
    the end of fiscal year 2009.
    Total Army Integration
        The pace of operations demanded by the NMS, resource constraints,
    and the historical tradition of the citizen-soldier in America make the
    further integration of the AC and RC an essential priority for
    America's Army. The Army's integration initiatives employ a combination
    of enhanced senior leader coordination mechanisms, leader and component
    exchange programs, and multi-component composite units to build the
    shared experience and trust essential for a seamless Total Army. Total
    Army integration initiatives demonstrate our commitment to ensuring the
    efficiency and relevance of Total Army force structure.
        To facilitate the tough force structure decisions necessary to
    achieve peak efficiency, the Army has moved aggressively to improve
    communications among the senior leadership of the components. The
    Assistant Secretary for Manpower and Reserve Affairs has emphasized the
    role of the Army Reserve Forces Policy Committee, a committee composed
    of general officers of all three components. The Vice Chief of Staff
    re-energized another key avenue for inter-component communication, the
    Reserve Component Coordination Council, in order to better address
    difficult policy and resourcing issues. Although resource constraints
    require sacrifices by all, retaining the bedrock commitment to pursue
    the policies that best serve the nation will enable our senior Army
    leaders to speak with one voice and achieve the goals of integration.
        The Army is expanding an initiative to embed both active and
    reserve elements in one unit. Programs ranging from simple leadership
    exchanges to the establishment of multi-component units at all levels
    seek to increase cross-component understanding through shared
    experiences. The Army is currently placing AC officers in key RC
    command and staff billets. This year, this program will be expanded to
    include assigning RC officers to command AC units. The creation of two
    integrated divisions, each comprised of ARNG enhanced Separate Brigades
    (eSB) under a headquarters commanded by an AC major general, is another
    AC/RC integration highlight for this year. The division headquarters
    will be responsible for training, readiness, and mobilization of the
    eSB. We are also experimenting with using RC companies to replace one
    of the companies in our AC light infantry battalions. These initiatives
    and others like them will create the kind of flexible organizations
    able to respond to emerging threats in both the international and
    domestic arenas.
        Yet another initiative, divisional teaming, establishes a habitual
    relationship between an active component division and a reserve
    component division. The RC division would lead responses to certain
    kinds of contingencies, such as disaster relief and response to
    domestic emergencies, with the AC division providing personnel and
    equipment to augment the reserve unit. In the case of a contingency
    involving deployment abroad, the AC division would assume primary
    responsibility while accepting augmentation from the associated RC
    division.
        Divisional teaming is in place today between the 4th Infantry
    Division (Mechanized) and the 40th Infantry Division (Mechanized) of
    the ARNG. Likewise, the 1st Cavalry Division is teamed with the 49th
    Armored Division. Next year, the 1st Cavalry Division will be able to
    use its current experience in Bosnia to help prepare the 49th Armored
    Division to assume responsibility for Operation Joint Forge, the U.S.
    portion of the Bosnia mission.
        Both the increased communication at senior levels and the various
    proposals for blending components at all levels have the potential to
    enhance the future readiness of the Total Army. Any significant Army
    operation today must draw on the reserve components. The expanded role
    of the Total Army in the execution of the NMS makes rapport and
    cooperation among all components essential for national security.
                         training soldiers and leaders
        The senior officer and NCO leaders of the AAN are platoon leaders
    and privates today. In addition to the fundamental mental and physical
    toughness that will always be required of warriors, the leaders of the
    AAN will require broad proficiency in a wide range of complex skills to
    win information-age battles. We are preparing these leaders today just
    as we prepare soldiers every day, all over the world through demanding
    training in our units and institutional schools. The Revolution in
    Military Affairs offers dramatic new opportunities on the battlefield,
    but it also offers new opportunities to leverage information technology
    for training soldiers and leaders more efficiently and effectively than
    we do today. The Total Army School System (TASS) and improvements in
    Training Aids, Devices, Simulators, and Simulations will contribute
    significantly to the preparation of tomorrow's soldiers and leaders.
    The Army Leader Campaign Plan
        The Army Leader Campaign Plan (ALCP) is designed to integrate
    current leader development efforts to produce leaders with the right
    values, attributes and skills to be successful in direct,
    organizational and strategic leadership roles. The doctrinal basis for
    these efforts, Field Manual 22-100, Army Leadership, has just been
    rewritten to establish a common framework incorporating the redefined
    Army values, a character development model, and an ethical climate
    assessment instrument. The addition of the Army values to new officer,
    NCO, and civilian evaluation reports is one initiative under the ALCP.
    Another is the increased emphasis on leadership assessments in an
    operational setting, such as at Combat Training Centers.
    The Total Army School System
        The Army is using information technology to improve how it teaches
    the many diverse functional skills our soldiers need to acquire. All
    soldiers and leaders must complete periodic skill training to attain
    proficiency in the new responsibilities associated with higher ranks.
    The Total Army School System (TASS) provides the requisite training
    through a network of schools spread over seven geographical regions and
    a distance education program based largely on correspondence courses.
    Information technology is helping streamline the TASS by ensuring
    soldiers have easier access to standardized Total Army Training System
    Courseware (TATSC). TATSC is making it easier for all soldiers to get
    the right training at the right time, regardless of where they are.
        The Total Army Distance Learning Program (TADLP) is one of the
    initiatives for making required instruction more accessible to
    soldiers. This program offers a significant means for delivery of
    standardized individual, collective, and self-development training to
    soldiers and units at the right place and time through the application
    of multiple means and technologies. TADLP consists of a variety of
    different types of instruction, including video tapes and interactive
    multimedia instruction. The program is being significantly improved
    through the use of video-teletraining (VTT) and web-based instruction.
    Over 140 classrooms with VTT and CD-ROM capability will be fielded by
    the end of fiscal year 1999 to both active and reserve component sites.
        The mission of the Total Army School System is challenging. Through
    the TADLP and TATSC, the Army is changing the education paradigm for
    our soldiers and leaders to meet this challenge. Eventually, these
    programs will replace the current system of periodic instruction with
    one in which soldiers and leaders participate continuously in
    professional education throughout their careers.
    Training Aids, Devices, Simulators, and Simulations
        As part of our ongoing efforts to increase the efficiency of the
    Army, we are incorporating a wide variety of TADSS to achieve the most
    realistic training possible at the lowest cost. TADSS refers to a wide
    range of equipment and software, from the simple laser that replicates
    the firing of a rifle or machine gun to the complex computer programs
    that drive computer-driven command post exercises to help train staff
    officers and NCOs at battalion and higher levels. TADSS is a valuable
    supplement to the live field training that is the foundation of
    readiness.
        Computer simulations of combat operations are useful staff training
    tools. The Battle Command Training Program (BCTP), for example,
    provides an experience analogous to the combat maneuver training
    centers for corps, division and RC brigade staffs. The BCTP subjects
    staffs to fast-paced, simulated combat operations and generates the
    associated information flow to test the staff's ability to track
    subordinate units and plan future operations around the clock for
    several days. The virtual ``enemy'' is maneuvered by a professional
    cadre well-versed in current U.S. doctrine, making every BCTP event a
    challenging training exercise.
        Weapons system simulators replicate the functioning of advanced
    weapon systems, such as the Bradley Infantry Fighting Vehicle or an
    attack helicopter. The efficiencies possible through the appropriate
    use of these TADSS are obvious. Helicopter simulators, for instance,
    enable air crews to achieve training proficiency on certain tasks and
    thus reduce the actual helicopter flying hours required for training.
        In many cases, TADSS afford the Army a way to attain levels of
    readiness that would otherwise be impossible to achieve within safety,
    environmental, and resourcing constraints. Future TADSS will
    incorporate the Synthetic Environment (SE) Core in which a group of
    related systems simulators (e.g., Close Combat Tactical Trainer,
    Aviation Combined Arms Tactical Trainer, Fire Support Combined Arms
    Tactical Trainer II, etc.) will be integrated to conduct high fidelity
    combined arms operations. The SE Core concept will allow commanders to
    simultaneously train all battlefield operating systems, in real time
    and on the terrain of choice, across the full spectrum of military
    operations. The synthetic environment will link live, virtual, and
    constructive domains. These TADSS will substantially supplement, but
    cannot replace, the necessary field training that allows soldiers to
    train to proficiency on actual equipment while exposed to the full
    effects of weather and terrain.
                             preserving army values
        The changes embodied in the Army's modernization, force structure
    and training initiatives are truly revolutionary. As we implement these
    initiatives, it is important to balance our desire to make the changes
    necessary to maintain readiness with the need to preserve the
    fundamental qualities that have been and remain the bedrock for success
    in battle. We must continue to ensure that our soldiers embrace the
    essential values that have been the soul of our Army since its birth.
        The values of loyalty, duty, respect, selfless service, honor,
    integrity, and personal courage are deeply rooted in our American
    character. These values have been the hallmark of the American soldier
    for over 223 years. While these values are not new, competing values in
    our society can obscure and dilute them. This section provides an
    overview of the initiatives designed to ensure that our values remain
    the central feature of our Army.
    The Human Relations Action Plan
        Our Human Relations Action Plan, published in September 1997,
    responded to incidents that revealed equal opportunity and sexual
    harassment problems in our ranks. The Army has implemented a series of
    initiatives outlined in the plan to fix these problems: an emphasis on
    teaching Army values and traditions in Initial Entry Training and in
    the Army at large, the assignment of additional personnel to improve
    supervision of Initial Entry Training, and the implementation of Army-
    wide Character Development XXI initiatives. Additionally, the Army is
    increasing the number of Equal Opportunity Advisors from 350 to 500.
    This year, a reassessment of the human relations environment throughout
    the Army will determine the effectiveness of the measures implemented
    under the Human Relations Action Plan.
    Character Development XXI
        Character Development XXI implements initiatives in doctrine and
    policy, training and education, and communication to strengthen the
    values focus of our Army. Policy initiatives include the revision of
    the Army leadership manual and evaluation instruments for officers,
    NCOs, and Army civilians discussed previously. In the training arena,
    the Army has lengthened Initial Entry Training by one week to permit
    increased training on Army values and disseminated an Ethical Climate
    Assessment Survey for use by Army leaders. Communications initiatives
    emphasized the Army's values through measures like the production of
    the video ``Living Army Values'' and the distribution of soldier cards
    and values tags to all soldiers.
    The Consideration of Others Program
        The Consideration of Others Program consists of regular small-group
    discussions oriented on values. Soldiers' lives are full of
    opportunities to meet the high standard of Army values, from the way
    they treat other soldiers in their units to the performance of routine
    inspections during guard duty. The Consideration of Others Program
    fosters better understanding of Army values by allowing soldiers and
    leaders to focus on the concrete aspects of their organizational and
    training environment that directly illustrate Army values in action.
    The program is based on the successful approach used at the United
    States Military Academy, and it has been implemented Army-wide as a
    recurring, mandatory requirement.
                                   conclusion
        The Army is implementing a comprehensive modernization plan based
    on the anticipated requirements of future strategy and extensive
    experimentation with emerging technologies. The execution of this plan
    will provide the Army with the capability to conduct prompt and
    sustained operations on land throughout the full spectrum of military
    operations in the 21st century. The new equipment and initiatives that
    will realize the Revolution in Military Affairs do not change the fact
    that quality soldiers are the single most important factor in achieving
    both current and future readiness. The Army's focus on traditional
    values the source of our organizational excellence is a critical aspect
    of attracting, developing and retaining quality soldiers and leaders.
        ``Officers and men must know their equipment. They must train with
    the equipment they intend to use in battle. Equipment must be in the
    best operational condition when taken to the Theater of Operations.''
    General George S. Patton, Jr.
            Chapter 4--The Army Community--Getting the Balance Right
        America's Army is a community united by its special purpose to
    defend the Constitution of the United States. We are a community rooted
    in service, with installations and organizations in every state and
    around the world. These Army communities are good stewards of our
    Nation's sons and daughters, committed to providing a good quality of
    life and a family-friendly environment. They are also good stewards of
    the Nation's financial, natural and cultural resources, pursuing every
    reasonable efficiency and striving to comply with Federal and state
    regulations. The Total Army serves the Nation not only through our
    readiness, but in the way that readiness is achieved--while taking care
    of its people and the other resources entrusted to its care.
        Army installations and organizations take care of soldiers, Army
    civilians, and family members through a collection of programs and
    activities that range from providing medical care to Morale, Welfare,
    and Recreation activities. These activities aim to preserve the quality
    of life within the Army community.
        Whether striving to remain ready through rigorous training or
    applying the skills gleaned from training to the execution of the NMS,
    the Army is committed to be an efficient organization. Army
    efficiencies and Army support for the wide-ranging DOD Defense Reform
    Initiatives are making a difference: The Army is programmed to achieve
    about $10 billion in savings over the Future Years Defense Plan. By
    streamlining, privatizing, and seeking cost reductions across a full
    range of activities and processes, the Army is harnessing the
    Revolution in Business Activities to improve both effectiveness and
    efficiency.
                           a community with a mission
        America's Army is a community with a mission: to fight and win
    America's wars. For the Army, this mission requires constant readiness
    to conduct prompt and sustained operations throughout the entire
    spectrum of military operations. Military service places unique demands
    on military members, their families, and the civilians who work with
    them. These shared sacrifices forge common interests and form the
    foundation of the military community.
        The physical manifestations of the Army community today are our
    installations and organizations, just as they were when frontier
    outposts guarded key routes and points of access to the nation. Many
    soldiers and their families live in military communities located and
    designed to support the Army's mission. Our military communities are
    also important for the readiness-enhancing functions they perform.
    Installations manage the land the Army uses for training as well as
    many other resources that contribute to readiness. They oversee many
    programs that contribute to the quality of life of soldiers and their
    family members. The sections that follow describe important Army-wide
    programs and procedures for managing installations and organizations.
    These programs incorporate safety into Army operations, maintain
    quality of life, sustain the environment, and improve efficiency.
                 managing army installations and organizations
        Army installations range in size from the small outposts that
    support peace operations in Bosnia and other places around the world to
    major bases that combine large maneuver training areas with communities
    the size of small towns. Installation staffs perform over 100 functions
    that parallel those of a city, business or commercial enterprise. They
    operate in accordance with Army regulations and standards. Efforts to
    increase efficiency and readiness Army-wide have led to the development
    of a comprehensive, annual report to monitor the status of key
    installation functions and facilities; a vision to guide the evolution
    of Army installations into the next century; and a comprehensive effort
    to manage the increasingly complex network of installation computers
    and information systems.
    The Installation Status Report
        The Installation Status Report (ISR), a decision support system
    designed to assist the Army's senior leaders in the management of our
    installations, provides an assessment of the status of facilities,
    environmental compliance, and services both on individual installations
    and Army-wide. The ISR provides assessments of installation readiness
    to perform missions such as supporting deployments and conducting
    mobilization training. In addition to helping installations and
    organizations comply with Federal and state regulations, it is a useful
    tool for informing resource allocation decisions.
    Installation Vision 2010
        Installation Vision 2010 (IV 2010) is the conceptual template for
    installations that supports Army Vision 2010. It is based on five
    tenets: Maintaining Readiness, Providing Power Projection, Maintaining
    Quality of Life, Sustaining the Environment, and Operating Efficiently.
    For each tenet, IV 2010 assigns specific goals and strategies to
    achieve those goals. By providing guidance and standardized strategies
    for achieving common goals, IV2010 will promote installation management
    efficiencies Army-wide.
    The Installation Information Infrastructure Architecture
        The Installation Information Infrastructure Architecture (I\3\A), a
    component of the overarching Army Enterprise Architecture effort
    discussed in the last chapter, ensures Army systems relying on
    information technology meet Army and DOD capability and compatibility
    requirements. The I\3\A provides a tool for managing installation
    information technology resources down to individual building level. By
    showing the existing and planned information technology infrastructure,
    the I\3\A helps the installation Director of Information Management
    decide where and how to best use available resources. A related
    security architecture helps the Army protect its information systems.
                                     safety
        The Army operates the largest, most comprehensive safety program in
    the world. Protecting its people and preventing the accidental loss of
    resources is a top priority for the Army's leadership. The Army has
    experienced dramatic improvements in its safety record over the past
    few years.
        Army safety activities are organized to protect the force and
    enhance warfighting effectiveness through a systematic and progressive
    process of hazard identification and risk mitigation that is embedded
    in Army doctrine. Commanders use this risk management process to
    identify safety problems before they can degrade readiness or mission
    accomplishment. When they identify safety problems, commanders take
    action to address them. The Army integrates risk management into all
    its day-to-day processes: from the sustaining base to combat training
    centers and from testing and depot activities to all types of
    contingency operations.
        Besides protecting the force during operations, emphasis on safety
    at installation level insures that Army communities are safe places to
    live and work. Safety offices on Army installations are directly linked
    to the command. Installation safety managers are direct advisors to
    installation commanders. Each installation safety manager is
    responsible for the design, development, and execution of an
    installation safety program tailored to the unique mission functions of
    the installation. Safety offices on Army installations monitor safety
    trends identified by the Department of the Army and major command
    (MACOM) safety offices.
                                quality of life
        Quality of life for our soldiers and their families is a top
    priority for the Army leadership because it plays a key role in Army
    readiness. Besides influencing recruitment and retention, installation
    programs and services help soldiers and their families cope with
    increased PERSTEMPO, frequent relocations and deployments, and long
    separations.
        To track the attitudes of soldiers and their families towards
    quality of life and other important issues, the Army uses the Sample
    Survey of Military Personnel (SSMP). The U.S. Army Research Institute
    for the Behavioral and Social Sciences conducts the SSMP semi-annually
    in the spring and fall. SSMP results contribute to the development of
    strategies for maintaining quality of life. These results indicate that
    the programs and facilities discussed in the following paragraphs--Army
    family and single soldier housing; healthcare; commissary and exchange
    privileges; family programs; and morale, welfare, and recreation (MWR)
    programs--are all important contributors to quality of life for
    soldiers and their families.
    Army Family Housing
        The Army's leadership is committed to providing high quality Army
    Family Housing (AFH). The cost of achieving this goal exceeds the
    funding level available. Our strategy for attaining the goal of quality
    housing while avoiding the high cost of revitalizing and sustaining AFH
    is to privatize and transition to a business basis all AFH operations
    and management to the maximum extent possible.
        The 1996 Military Housing Privatization Initiative, also known as
    the Residential Communities Initiative (RCI), authorizes the use of
    appropriated funds and Army property to attract private-sector capital
    and expertise for operating, managing, repairing, improving and
    constructing military housing in the United States. The principal
    objective of the RCI, part of the DOD Defense Reform Initiatives
    discussed later in this chapter, is to eliminate inadequate military
    housing by the year 2010. Although RCI has not been authorized
    overseas, the Army intends to privatize all Army Family Housing in the
    United States by 2005. The first Army RCI project, at Fort Carson,
    Colorado, involves having a business lease land and housing from the
    Army and use them to meet Army Family Housing requirements. The
    organization will revitalize the inventory and build 840 new units
    within five years. In addition, it will own, operate and maintain the
    inventory for 50 years. Families will pay rent, but the rent will not
    exceed allowances. In addition to the Fort Carson project, additional
    RCI projects at 42 installations, including about 85,000 units, are
    either being planned or are under development. When complete, the Army
    community will have improved quality of life and divested a major
    resource burden.
        While the RCI initiative is gaining momentum, the Whole-
    Neighborhood Revitalization Program (WNRP) is an ongoing program for
    systematically improving existing AFH. The goals of this program are to
    improve housing to current standards, reduce recurring maintenance and
    repair costs, and reduce energy and utility costs. There are 12 funded
    WNRP projects (10 in the United States and 2 in Europe) for fiscal year
    1999. Fiscal year 1999 is the last year the Army will fund the WNRP in
    the United States; beginning next year the program will be funded
    exclusively overseas, where it will remain the Army's tool for managing
    AFH until RCI authority is extended to overseas areas.
    Single Soldier Housing
        Quality barracks for our single soldiers provide a safe, clean
    living environment and support both recruiting and retention efforts.
    Modernizing permanent-party, single soldier housing to what we call a
    ``1+1'' standard is our highest priority for facilities. The 1+1
    standard provides each soldier with a private living/sleeping area as
    well as a service area (with refrigerator and microwave) and a bathroom
    shared with one other soldier. The Army aims to achieve this standard
    in the United States by 2008. With some funding assistance from host
    nations, we should also achieve the 1+1 standard in Europe by 2010 and
    in Korea by 2012.
        The Army has undertaken a reexamination of barracks design for
    soldiers undergoing initial entry training (IET). The Trainee Barracks
    Design Subcommittee will work from the existing standard design
    developed in 1986. As part of the process of defining future facility
    requirements, this Subcommittee will challenge all assumptions about
    how soldiers in IET live and train.
    Medical Care
        The Army completed implementation of the TRICARE program in the
    last of eleven TRICARE regions in June, 1998. The TRICARE program
    offers CHAMPUS-eligible beneficiaries three options for obtaining
    health care: TRICARE Prime, Standard or Extra. Automatically enrolled
    in TRICARE Prime, active duty personnel continue to have their health
    care needs managed in military medical treatment facilities and pay
    nothing out of pocket for referrals to civilian providers. Depending on
    the rank of their sponsor, the enrolled families of active duty
    soldiers pay $6 or $12 for each outpatient visit to nonmilitary medical
    care facilities. TRICARE Standard and Extra benefits are the same as
    under the CHAMPUS program, with the exception that TRICARE Extra offers
    discounts for beneficiaries who use providers from a preferred provider
    network. Non-Medicare-eligible retirees under age 65 pay an annual
    enrollment fee of $460 per family (or $230 for the retiree alone) in
    addition to the copayments.
        Although Medicare-eligible retirees are currently ineligible for
    TRICARE coverage, the Army began a demonstration program in September
    1998 to test using the military program to provide care for these
    retirees. The 1997 Balanced Budget Act authorized the Health Care
    Financing Administration to reimburse DOD medical facilities for care
    provided to the retirees who participate in this demonstration. DOD
    expects to implement Medicare subvention system-wide upon successful
    completion of the demonstration.
        The level of enrollment in TRICARE indicates the high value
    military members place on the benefit of high-quality medical care for
    themselves and their families. This benefit reassures deployed soldiers
    that their families will receive adequate care. The Army aggressively
    supports the TRICARE managed care program and managed care support
    (MCS) contracts, and continues to work with the Office of the Assistant
    Secretary of Defense (Health Affairs) to tailor TRICARE to better suit
    service readiness and patient needs.
        Families of active duty soldiers receive dental coverage through
    the Family Member Dental Plan that covers a significant portion of
    dental procedures. Soldiers pay monthly premiums of $8.09 for one
    additional family member and $20.00 for more than one additional family
    member to be covered under this plan. Starting in February 1998,
    retirees and their family members began enrolling in the newly
    established Department of Defense Retiree Dental Plan that charges
    premiums according to a retiree's geographical region and number of
    people covered.
    Commissaries and Exchanges
        Commissaries and exchanges continue to be a benefit our soldiers,
    retirees and their families value highly. Results from a recent SSMP
    (Spring, 1998) indicated that commissary and exchange privileges are
    the two factors (out of 56) with the highest levels of satisfaction
    (over 70 percent) for enlisted soldiers. Commissary privileges also
    were the single factor with the highest level of satisfaction among
    officers (82 percent).
        Commissaries and exchanges are an important contributor to military
    quality of life. These facilities offer an economical alternative to
    shopping in commercial grocery and department stores. Additionally,
    revenues generated by exchange profits contribute to installation
    morale, welfare, and recreation programs. The presence of commissaries
    and exchanges reduces the uncertainty of frequent relocations,
    particularly for soldiers and family members moving overseas for the
    first time. For those stationed overseas, commissaries and exchanges
    often offer the only practical access to American products.
    Morale, Welfare, and Recreation Programs
        Army MWR programs improve soldier readiness by promoting mental and
    physical fitness, increasing family wellness, and enhancing soldier and
    Army civilian quality of life. The programs offer a variety of
    recreational activities: sports and fitness facilities, libraries,
    indoor recreation centers, outdoor recreation centers, arts and crafts
    facilities, automotive skills facilities, and entertainment and leisure
    travel programs. Among enlisted soldiers surveyed in the SSMP, the
    quality and availability of Army recreation services received the third
    and fourth highest levels of satisfaction. The availability of
    recreation services was also important to the officers surveyed--rating
    third overall on the SSMP.
        Civilian MWR professionals support major deployments by providing a
    range of MWR services for deployed soldiers and Army civilians. For
    instance, 139 civilian professionals have voluntarily served in the
    Operation Joint Endeavor/Guard/Forge Area of Responsibility (AOR),
    promoting physical fitness and providing recreation, social and other
    support services. At the end of fiscal year 1998, 21 MWR specialists
    were operating 30 MWR service points in the Bosnia AOR, supporting
    soldiers with DOD and United Services Organization (USO) entertainment
    programs, recreation programs, and special events.
    Army Family Programs
        Army Family Programs help soldiers and their families balance the
    demands of military life, provide a forum for addressing quality of
    life issues, and assist families in handling the stress of deployments.
    These programs are an important asset for our Army because 62 percent
    of our soldiers are married, and another four percent are single
    parents. By increasing our families' self reliance and improving access
    to the support available from within our communities, Army Family
    Programs are a ``force multiplier'' that enhance readiness.
        Army Child and Youth programs support Army families by making high
    quality, affordable services accessible to soldiers. The Army matches
    child care fees paid by parents with appropriated fund support. Family
    Child Care homes help meet specialized care requirements. Computer
    labs, homework centers, and summer camps are available for school-age
    children. Middle school and teen open recreation programs go beyond
    traditional sports and recreation by providing supervision that helps
    these impressionable youngsters learn appropriate and healthy behavior.
    All of these programs help balance the demands of the Army with the
    needs of Army families.
        The Army harnesses the volunteer spirit of its members through
    Family Support Groups (FSGs). These groups provide a strong internal
    support network for Army families. FSGs are voluntary organizations
    centered around the soldier's assigned unit. Scheduled meetings,
    telephone rosters, and newsletters foster communication and friendship
    within the unit ``family.'' Many FSGs schedule regular activities
    designed to provide social and emotional support. When a unit deploys,
    the FSG becomes a mechanism to focus community support for the families
    of deployed soldiers. Family Assistance Centers (FAC), operated by Army
    units and installations during major deployments, work closely with
    FSGs to provide assistance, information, and referral to soldiers and
    family members. FACs have direct access to the resources available in
    key community agencies, like the Red Cross, Army Community Service, and
    the Judge Advocate General.
        The Army Family Teambuilding Program (AFTB) enhances personal and
    family preparedness for three audiences: soldiers, civilians serving in
    positions that might require deployment, and families. Each track
    provides training on Army community resources. AFTB promotes self-
    reliance in those new to the Army, and also prepares leaders in the
    FSGs and units to assist others with problems. In the family member
    track of AFTB, the training begins with an orientation to the military
    for new members, and it provides a vehicle for welcoming new people
    into the community as well as teaching the ``nuts and bolts'' of Army
    life and Army community resources.
        The Army Family Action Plan (AFAP) is one of the Army's most
    effective tools to manage change and help maintain high quality of life
    standards for soldiers, family members, and civilian employees. By
    providing a forum for installation and Army quality-of-life issues, the
    AFAP gives commanders and leaders an accurate assessment of how the
    people in their organizations view Army quality of life. The AFAP
    process begins with local conferences, where representatives of the
    installations' organizations identify issues of concern and recommend
    solutions. Most issues are resolved at local level, but some are
    forwarded for action at higher levels. To date, issues raised through
    this forum have led to 54 pieces of state and national legislation that
    benefit all military families. The program has also contributed to Army
    quality of life by generating important policy revisions, programs, and
    services.
        Army Family Programs are an important resource for making the Army
    more than just the sum of its parts. By easing access to essential
    services and harnessing the spirit of volunteerism, these programs
    foster a spirit of sharing and caring that help make the Army a
    ``family friendly'' community.
    Retired Soldiers
        The Army community includes over 900,000 retirees and surviving
    spouses. These valuable members of our community provide a tangible
    reminder of the dedicated service of countless soldiers throughout our
    Nation's history. Many retirees are active members of unit associations
    that foster esprit among today's soldiers through ceremonies
    commemorating past unit achievements. They also sponsor volunteer
    projects in local communities and support recruiting efforts. For
    today's soldiers, retirees are a compelling example of Army values and
    an important reminder of our duty to something larger than ourselves.
                           sustaining the environment
        The Army recognizes environmental stewardship as necessary to
    conserve the Nation's natural resources and promote a world that
    supports the quality of life of future generations. Accordingly, the
    Army executes no mission without addressing its environmental impact.
    The environmental program sustains readiness, improves the Army
    community's quality of life, strengthens community relationships, and
    provides sound stewardship of resources.
        Compliance with environmental laws and regulations protects the
    environment, demonstrates stewardship, and prevents costly fines and
    penalties. The Environmental Compliance Assessment System (ECAS) is the
    cornerstone for Army compliance. These external assessments are
    conducted at active Army installations, National Guard facilities, and
    Army Reserve Centers. In addition, the Army uses the Installation
    Status Report as an internal audit system at all active and reserve
    installations. This annual report highlights areas of excellence in an
    installation's environmental program and pinpoints areas for
    improvement.
        Pollution prevention shifts the Army's environmental focus from
    compliance and restoration to reduction or elimination of pollution at
    the source before it enters the environment. It provides a high return
    on investment through cost avoidance. Pollution prevention supports
    readiness by reducing maintenance and supply costs through centralized
    management of hazardous materials. By promoting non-hazardous
    substitutes for hazardous materials, it reduces the volume of hazardous
    waste disposed and the associated compliance overhead. Pollution
    prevention supports Army modernization through promotion of materials
    and processes that preclude future environmental liability.
        Conservation of natural and cultural resources preserves the Army's
    12 million acres for readiness activities. Conservation enables a
    realistic training environment; it also provides a clean, healthy
    environment for the recreation of soldiers, their families and the
    general public.
        Through the Installation Restoration Program, the Army has acted
    aggressively to evaluate contamination from past practices and then
    take the appropriate steps to restore affected areas. To evaluate a
    site, the Army conducts a technical assessment and classifies each site
    according to their relative risks (high, medium or low). The Defense
    Planning Guidance (DPG) has established goals for reducing all such
    sites by 2014. The Army will fund restoration sufficiently to maintain
    progress towards meeting DPG goals.
    defense reform and army initiatives: assuring a revolution in business
                                    affairs
        Over the last ten years, the Army has made great progress in
    reducing costs and increasing the effectiveness of its business
    processes. The latest effort--the Defense Reform Initiative--includes
    several efficiencies that are already included in our Future Years
    Defense Program. We expect to achieve about $10 billion in savings from
    efforts like the Revolution in Military Logistics, acquisition reform,
    A-76 cost competitions, and infrastructure management initiatives. By
    reducing costs or improving effectiveness, each of these programs has
    helped the Army to meet the requirements of the National Military
    Strategy as our force and funding has grown significantly smaller.
        Though not strictly a part of the Defense Reform Initiatives, Total
    Army Quality (TAQ) and Army Performance Improvement Criteria (APIC)
    support the intent of the DRI by fostering efficient processes
    throughout the Army. TAQ, an adaptation of successful commercial
    management practices to the ``business'' of military readiness, is the
    Army's strategic management approach. The APIC provides a systematic
    framework for assessing continuous improvement through seven proven
    criteria. They are based on the Malcolm Baldrige Criteria for
    Performance Excellence used by leading American businesses and
    industry. By applying TAQ and APIC, the Army is streamlining and
    continually improving business operations and practices. This is
    evidenced by the three Army organizations that have earned the
    Presidential Award for Quality, the highest recognition given by the
    Federal government to organizations that implement best business
    management techniques, strategies, and performance practices: the U.S.
    Army Tank-Automotive Research, Development and Engineering Center in
    Warren, MI (1995), the U.S. Army Research, Development and Engineering
    Center in Picatinny Arsenal, NJ (1996), and the U.S. Army Infantry
    Center and Fort Benning in Fort Benning, GA (1997). TAQ has contributed
    to many of the efficiencies discussed in this section.
    Reinvention
        The National Partnership for Reinventing Government (NPR) is an
    attempt to improve efficiency by implementing the imperatives of
    putting customers first, empowering employees, cutting red tape, and
    eliminating activities that do not support core missions. Army support
    for this program has led to the creation of 47 reinvention laboratories
    and six reinvention centers. The commanders of these organizations have
    the mandate to reinvent processes and waive DOD regulations as needed.
    At the end of fiscal year 1998, the Army had implemented 333
    reinvention waivers, and in concert with DOD, is developing a process
    to review reinvention waivers for broader application department-wide.
    Army reengineering efforts continue to receive executive branch
    recognition through competition for the Vice President's Hammer Award.
    The Hammer Award recognizes teams whose reinvention actions have led to
    new processes that support the NPR imperatives. Through fiscal year
    1998, 55 Army teams had received a Hammer Award. The 23 Hammer Awards
    approved last year (fiscal year 1998) promise savings in excess of $465
    million.
    Acquisition Reform
        Acquisition reform is a key component of the Defense Reform
    Initiative and has been a major part of the business transformation of
    the Army. Continuing to lead the way in acquisition reform, the Army is
    acquiring equipment and services more quickly and at less cost. The
    Army continues to lead the way in acquisition reform. Our successful
    Government Purchase Credit Card program for simplified acquisitions (95
    percent usage) led to the Deputy Secretary of Defense directing the
    Army to lead a joint Program Management Office. This office is
    responsible for ensuring that over 90 percent of DOD is using the card
    by January 1, 2000. We are also a leader in implementing the DOD
    ``paperless contracting'' initiative, and are scheduled to complete
    fielding of the Standard Procurement Systems during the first quarter
    of next fiscal year. The Past Performance Information Management System
    (PPIMS) has been another contributor to Army contracting efficiency
    since it was implemented at the beginning of fiscal year 1998. With
    PPIMS, contracting officers can quickly check the past performance of
    contractors to determine their history of contract execution. Overall,
    the Army has reduced its cost to contract per dollar obligated by over
    50 percent in the last 14 years.
        Our proactive training and continuing education program for Army
    contractors have been instrumental in the success of our acquisition
    reform effort. We are leading DOD in requiring and offering continuing
    education for its contracting workforce. The Army Civilian Training
    Education Development plan requires contractors to complete 80
    Continuing Education Units (CEU) every two years. The Office of the
    Deputy Assistant Secretary of the Army (Procurement) awards CEUs for
    the Acquisition Reform training that it offers. Since 1993, the Army
    has trained over 12,000 acquisition professionals on acquisition
    reform.
    Streamlining Civilian Personnel Administration
        In response to NPR streamlining mandates to reduce overhead, the
    Office of the Secretary of Defense (OSD) directed the military
    departments to regionalize civilian personnel services. The Army is
    leading DOD in the implementation of this initiative, with regionalized
    civilian personnel services in effect for approximately 96 percent of
    the Army's civilian workforce at the end of fiscal year 1998. Army
    Civilian Personnel Operations Centers (CPOCs) achieve economies of
    scale by performing automated functions that do not require face-to-
    face interaction. Small on-site staffs at Civilian Personnel Advisory
    Centers (CPACs) remain at installations to provide advisory services to
    commanders, managers, supervisors and employees.
    Financial Management
        Financial management practices have steadily improved as DOD
    struggles to improve its accountability and stewardship of the nation's
    resources. In the Army, these efforts are directly responsive to the
    Government Performance and Results Act (GPRA) and the Chief Financial
    Officer's (CFO) Act. The GPRA, established in 1993, requires Federal
    agencies to develop and establish strategic plans, performance
    measures, annual performance plans, and performance reporting. In
    support of DOD execution of GPRA requirements and in accordance with
    DOD guidance, the Army continuously reviews and monitors its strategic
    plans and mission objectives. The CFO Act, established in 1990, puts
    the Federal government on a ``private industry'' standard for financial
    reporting by requiring annual, audited financial statements. To meet
    the intent of this law, the Army has made great progress in integrating
    its functional and financial systems to achieve single-source,
    transaction-driven financial control. When completed, decision makers
    will have accurate and timely financial management information and
    financial statements with unqualified audit opinions.
    Activity-Based Costing
        Activity-Based Costing (ABC) is the Army's tool for implementing
    cost management, a process of continuous improvement that focuses on
    cost and performance to gain efficiencies and improve operations. Local
    managers trace the cost of resources consumed to provide products or
    services. The program encourages cost control through rewards and
    incentives. The Army has a number of ABC efforts ongoing. U.S. Army
    Forces Command (FORSCOM) is instituting ABC methodologies across all of
    their installations. Installation directorates have developed models to
    measure the cost of the garrison support activities. These
    installations have identified areas for business process reengineering
    through their ABC efforts. TRADOC has ABC efforts underway at Fort
    Huachuca, AZ and Fort Knox, KY. Army Materiel Command has implemented
    ABC at Picatinny Arsenal, NJ and Corpus Christi Army Depot, TX.
    A-76 Cost Competition Studies
        The Army's A-76 Cost Competition Studies are a major part of the
    Defense Reform Initiative. These studies evaluate whether a given
    activity can be provided most efficiently by a streamlined government
    work force or by a commercial provider. The Army plan is to complete A-
    76 studies of about 73,000 positions by fiscal year 2005, including all
    commercial activities and some activities currently considered
    governmental. Since fiscal year 1979, the Army has completed A-76 cost
    competitions for functions covering over 25,000 positions. Nearly two-
    thirds of these positions (13,000 civilian and 2,900 military) were
    converted to contract. The average savings achieved by these studies,
    either by outsourcing to a private competitor or instituting a
    reengineered process within the current activity, has been about 28
    percent of the pre-competition cost.
    Base Realignment and Closure
        Base Realignment and Closure (BRAC) is one way the Army reduces its
    excess infrastructure. The Army has already closed 102 of the 112 bases
    scheduled for closure in the United States and has nearly completed the
    667 overseas closures resulting from the BRAC process thus far. The
    Army is on schedule to complete the closures authorized in the most
    recent BRAC process.
        The annual savings from BRAC actions currently being implemented
    exceeds the annual costs of implementation. Although the Army will
    spend $5.2 billion implementing current BRAC actions, about 32 percent
    of that amount is invested in constructing or modifying facilities at
    locations that are gaining realigned activities. With the completion of
    scheduled closures under current BRAC authority in fiscal year 2001,
    the Army will have reduced its infrastructure by 30 percent since the
    Cold War. Additional base closures can realize even more cost-effective
    savings. While closing installations costs alot in the near term, the
    long-term benefits in terms of Army efficiencies and property made
    available for public use exceed the costs. The Army supports the DOD
    position requesting additional BRAC authorizations as part of our
    continuing defense reform efforts.
    Other Infrastructure Management Initiatives
        In addition to implementing BRAC decisions, the Army also has a
    host of other equally important initiatives that contribute to improved
    economic efficiency and combat capability in both the active and
    reserve components. The Army is reducing costs and managing its
    infrastructure more efficiently through several infrastructure
    management programs that are part of the Defense Reform Initiatives.
    These efforts include initiatives to dispose of excess infrastructure,
    use its infrastructure in innovative ways and privatize utilities. In
    1997, the Army completed the seventh year of a Facilities Reduction
    Program that disposed of more than 57 million square feet of excess
    infrastructure. By the end of fiscal year 1999, we expect to have
    eliminated an additional 7 million square feet, at a cost of $99.6
    million in fiscal year 1999 RPM funds.
        Three major initiatives improve how the Army uses its current
    infrastructure. The first moves Army units from commercially-leased
    space to renovated Army facilities. Four Army activities were moved
    into renovated Army facilities in fiscal year 1998, eliminating the
    expense of leasing the 69,500 square feet of commercial space these
    activities required. The fiscal year 1999 budget contains another $15.9
    million to construct buildings and renovate space to support moving
    another 35 activities out of commercially-leased space by fiscal year
    2002.
        The second initiative is to lease Army real property temporarily
    available for other use to private organizations in accordance with the
    provisions of 10 U.S.C. 2667. The Army earns about $20 million annually
    in revenues and an unknown amount of in-kind benefits through this
    initiative.
        Under the third initiative, the Asset Management Strategy, the Army
    seeks to obtain private sector financing to accomplish installation
    objectives and generate revenues in exchange for shared use of real
    property with commercial firms. The result is a win-win situation for
    all--the Army, the private sector partner, the local community, and the
    American taxpayer. Three pilot Asset Management Strategy programs are
    currently underway at Yuma Proving Ground, AZ; Picatinny Arsenal, NJ;
    and Fort Sam Houston, TX.
        The utilities privatization initiative transfers ownership and
    responsibility for operation, maintenance and upgrade of Army-owned
    utilities to the local utility provider who can ensure safe, efficient
    operation at a savings to the Army. The privatization goal is to
    transfer ownership of all Army-owned utilities by 30 September 2003,
    except for those not economically justifiable or that meet unique
    security requirements. Forty-nine of the 1,101 Army-owned utilities
    have been privatized, and privatization has been determined either
    undesirable or economically unjustifiable for another 34. One hundred
    thirty-six utilities are currently under study. Eighty-seven are either
    awaiting negotiation, under negotiation, or have requests for proposal
    under development. The remaining 795 utilities require study.
    Logistics Efficiencies
        The Revolution in Military Logistics is a major component of Army
    and DOD efforts for reducing costs. The RML is also important to
    ensuring that the Army remains dominant on the battlefields of
    tomorrow. The RML, part of the Defense Reform Initiatives, will convert
    Army logistics over several years from a system based on maintenance of
    large stockpiles (mass) to one based on the ability to move required
    items to the point they are needed at the time they are needed. This
    transition includes a number of Army logistics initiatives that offer
    potential savings of over $2 billion during the period fiscal year 1998
    to fiscal year 2003. RML initiatives follow three strategies to achieve
    cost savings: inventory reductions through better management and faster
    deliveries (Army repair parts inventories have been reduced $9.5
    billion, or 50 percent, from fiscal year 1989 to fiscal year 1998),
    demand reductions through increased reliability of parts, and cost
    reductions.
    Total Asset Visibility and Velocity Management
        Army Total Asset Visibility offers one example of a comprehensive
    initiative that will make the Army a more efficient organization while
    enhancing Army warfighting capabilities. ATAV will realize the JV2010
    operational concept of focused logistics. It employs existing and
    emerging information technologies to furnish managers and leaders
    throughout the Army with information on the location, quantity,
    condition, and movement of assets worldwide. Radio frequency
    technology, laser optical technology, and bar coding are examples of
    technologies that allow Army logisticians to monitor cargo movements,
    redirect crucial shipments and locate critical supplies. We are
    currently able to track more than three million types of equipment and
    supplies throughout DOD and the Army.
        In support of the DOD-directed Lateral Redistribution and
    Procurement Offset Initiative, ATAV provides asset data to all services
    and to the Defense Logistics Agency (DLA). This information is used to
    redistribute critical assets to meet user requirements.
        A related initiative, Velocity Management, achieves savings by
    substituting velocity (rapid delivery from wholesale level) for mass
    (large stockpiles in theater). The work of a number of process
    improvement teams (PIT) has served to accelerate the overall delivery
    process. The Order-Ship Time PIT, for example, has reduced Order-Ship
    Time for high priority shipments worldwide by coordinating regular
    shipments between Army installations and the DLA, providing dedicated
    transportation support, and eliminating wasted time in the supply
    distribution chain. The key to improving Order Ship Time is the
    fielding of the Standard Army Retail Supply System-Objective (SARSS-O)
    and related automatic identification technology throughout the Army. We
    are already seeing tangible improvements. Comparisons conducted by
    RAND's Arroyo Center indicate our Order-Ship Time results are far
    better than those of the private sector.
    Integrated Sustainment Maintenance
        Integrated Sustainment Maintenance (ISM) streamlines all
    maintenance organizations and activities in the Army at general support
    level (the second level of maintenance support above the using unit)
    and higher by bringing them all under a single management structure and
    by establishing regional component repair programs. Centers of
    Excellence (COE) within each region support several major commands and
    all components of the Total Army. COE focus the demand for specific
    types of maintenance within a particular region. A national-level
    management structure under control of the Army Materiel Command
    provides inter-region coordination. Local Sustainment Maintenance
    Management (LSMM) offices feed installation requirements into the
    regional and national system. Cost savings from all facets of ISM are
    expected to total $142 million over the period from fiscal year 1998 to
    fiscal year 2003. Actual savings from fiscal year 1998 totaled $26.7
    million.
    Operating and Support Cost Reduction
        An internal initiative, the Army's operating and support cost
    reduction program, seeks to lower costs by funding the redesign of
    selected high-cost spare parts in order to increase reliability, reduce
    manufacturing and repair costs, and optimize the financial benefit of
    repair instead of replacement. For instance, adding a replaceable,
    leading edge erosion strip to the tail rotor of the AH-64 helicopter
    extends the life of the blade and is replaceable at depot maintenance
    level. Through this measure, the Army reduces the frequency with which
    it must replace the relatively expensive tail rotor by adding a less
    expensive component to absorb wear and tear. The Army's Operating and
    Support Cost Reduction program currently has 71 active projects, and
    the Army Audit Agency has concluded that the program should save $295
    million over the fiscal year 1998-2003 time period.
    Depot Consolidation and Competitive Sourcing
        Depot consolidation and competitive sourcing is an effort that
    balances the savings possible through BRAC and commercial procurement
    with the requirement to preserve organic core depot capabilities as
    part of America's industrial base. From the BRAC perspective, there are
    obvious savings to consolidating core capabilities at remaining depots.
    The relocation of core capabilities often allows commercial enterprises
    to move into vacated depot facilities. Competitive sourcing of the
    depot workload has historically been limited by Title 10 U.S.C.,
    Section 2466, to no more than 40 percent of the total required workload
    per fiscal year. The Fiscal Year 1998 Defense Authorization Act
    increased this threshold to 50 percent, allowing DOD to utilize the
    private sector to perform more non-core depot maintenance work.
    Prime Vendor Initiatives
        The Prime Vendor program is another major Defense Reform
    Initiative. A number of programs achieve savings for the Army by
    providing one or more prime vendors with the Army's high-volume market
    for various commodities. Prime vendor programs focus Army purchases to
    allow vendors to achieve efficiencies possible with high-volume sales.
    The benefit is passed on to the Army through the reduced total cost of
    the purchases.
        A recent DOD success with Subsistence Prime Vendor (SPV)
    illustrates an additional benefit of this initiative. Installations
    using SPV reduce Defense Logistics Agency depot support demands by
    procuring products through local prime vendors. The DLA recently
    reduced its surcharge for installations using SPV. The surcharge
    reduction was in part the result of decreased operational costs in
    depot support due to installation purchases from prime vendors. All AC
    CONUS installations, which have been under SPV since the end of fiscal
    year 1997, benefited from this surcharge reduction.
        army installations and organizations: good neighbors nation-wide
        As the largest Service component of the DOD, the Service with the
    largest reserve component force structure, and the proponent of the
    Army Civil Works Program, the Army has a special relationship with
    American communities nation-wide. Through over 190 major installations
    and many thousands of readiness and reserve centers across the country,
    the Army is rooted in the nation we serve.
    America's Army: The Community Next Door
        More Americans serve in the Total Army than in any other branch of
    Service. For many Americans and for many people around the world,
    contact with an American soldier is the most tangible contact with our
    government they experience. Army leaders often say that soldiers are
    our credentials, but American soldiers are America's credentials as
    well. The nature of the Army's contribution to the NMS brings soldiers
    into direct contact with civilians, in our communities and abroad, to a
    greater extent than for any other branch of Service. The Army is a
    quality team of America's sons and daughters representing all Americans
    today. The values, diversity and teamwork of our soldiers are
    compelling examples for people at home and abroad.
        Contributing to the well-being of the nation we serve both directly
    and indirectly, Army installations and organizations are good neighbors
    for America's communities. They provide a market for community goods
    and services and are committed to safety, environmental stewardship,
    and maintaining good relations with local authorities. The Army was the
    largest single source of prime DOD contracts (those worth more than
    $25,000) in 17 states and the second largest source of such contracts
    in 19 additional states in fiscal year 1997.
        The 530,000 soldiers of the Selected Reserve balance their military
    service with full-time civilian jobs. These soldiers and their families
    bring the vitality of America to the Total Army. They also take Total
    Army values to their civilian endeavors.
        By the same token, American communities support our soldiers.
    Community organizations sponsor soldiers deployed around the world. On
    a recent Multinational Force and Observers (MFO) peacekeeping
    deployment, sponsored units received ``care packages'' of magazines and
    disposable cameras from community organizations at home. Soldiers
    returned pictures and letters describing their duties and activities.
    ``Grassroots'' programs such as these build morale for deployed
    soldiers and keep communities in touch with the contributions of their
    Army.
    The Army Civil Works Program
        Civil Works missions conducted by the U.S. Army Corps of Engineers
    (USACE) are extremely beneficial to the Nation. The Army's harbor
    projects are vital to the import and export trade, and waterways
    maintained by the USACE help move inter-city cargo. Flood protection
    projects have prevented billions of dollars in damage. The Army
    produces 25 percent of the Nation's hydropower and provides water to
    about 10 million people. Civil Works missions in natural resources,
    water quality, flood plain management, and toxic waste control assist
    the Army in complying with Federal environmental statutes and help the
    Army maintain a grass-roots presence in communities across the Nation.
        The Army maintains a force of approximately 300 military and 27,000
    civilians, supported by tens of thousands of contractor employees, to
    carry out the Civil Works program. The USACE provides the Army
    experience in many specialized fields. This significant force stands
    ready to meet the engineering and technical needs of the Army and the
    Nation.
                                   conclusion
        America's Army supports our Nation through more than simply our
    military capabilities. In addition to doing America's heavy lifting in
    the execution of the National Military Strategy, the character of
    America's Army--a community with a mission--supports the well-being of
    all American communities and the American people. The Army's commitment
    to taking care of its soldiers and Army civilians benefits the Nation
    by fostering strong families, safe communities, and volunteerism. Our
    commitment to service makes America's Army a good custodian of the
    Nation's financial, natural and cultural resources. For America, the
    Total Army is a high-yield investment, ready to fight and win the
    Nation's wars and striving to be all we can be.
                  Chapter 5--Stretching the Fabric of the Army
        Recent funding constraints and increasing operational demands are
    stretching the fabric of our Army in three major areas: people,
    readiness, and modernization. During recent testimony before Congress,
    the Chief of Staff, Army, identified the need to increase the Army's
    Total Obligation Authority by $5 billion per year in addition to
    funding for contingency operations and increases in military pay and
    retirement. In response, Congress authorized a fiscal year 1999
    supplemental funding measure which included $377.5 million for Army
    readiness and $1,859 million for contingency operations, of which the
    Army received $1,495 million. The President's fiscal year 2000 Budget
    builds on the progress begun with the supplemental. The fiscal year
    1999 supplemental appropriations and the fiscal year 2000 President's
    Budget Request are steps in the right direction; these measures begin
    to address our concerns in people and near-term readiness.
    Modernization needs are being addressed with investment levels
    remaining roughly at the same level as in fiscal year 1999, with the
    expectation for increases in future years.
        Army concerns in people, readiness, and modernization programs
    voiced last year are real concerns that cannot be addressed with a one-
    time funding fix or in one year's budget. Manning the force adequately
    by recruiting and retaining quality men and women requires a sustained
    commitment to a pay and benefits package that makes military service a
    competitive option. The Army must also carefully manage PERSTEMPO and
    quality of life while meeting the increased demands of the NMS. To
    assure current readiness, the Army requires more than just the OPTEMPO
    dollars that fund the bulk of Army training. Sustained, adequate
    funding for contingency operations, base operations, and real property
    maintenance also protect training dollars and enhance readiness.
    Modernization is a continuous process that requires disciplined
    investment to achieve and sustain an effective fighting force.
        The complexities of readiness today require careful allocation of
    resources to meet national objectives. Readiness across the full range
    of missions we must perform to execute the NMS remains our fundamental
    precept. The Army's increased role in the execution of the NMS since
    the end of the Cold War requires increased resources for Army
    readiness. The readiness warning signs that emerged last year were a
    function of trying to meet expanded requirements with reduced
    resources. The fiscal year 2000 Budget Request represents the best
    possible balance of available resources applied across the priorities
    of people, readiness, and modernization. These three areas require a
    sustained commitment to an increased level of funding for the Army.
    This chapter describes the issues associated with each area and points
    out how the fiscal year 2000 Budget addresses many of the Army's
    concerns in the areas of people and current readiness for the coming
    year. This budget, with timely and non-offset funding for any unfunded
    contingencies, will allow the Army to execute the NMS in fiscal year
    2000.
                             taking care of people
        Quality soldiers are the single most important factor in achieving
    and sustaining readiness, but recruiting and retaining them is
    increasingly difficult. The Army must recruit, train, and retain enough
    soldiers to meet the requirements of 511 different specialty skills
    needed to generate the Army's warfighting capabilities; our studies
    show that the population of young males today is less willing to enlist
    for military service than their counterparts of a decade ago. Keen
    competition for the quality people we seek to enlist and for those we
    seek to retain, coupled with a decrease in the propensity for military
    service, has doubled the cost to recruit a soldier since 1986. To meet
    the challenge of attracting and retaining enough quality people for our
    Army, it is important to reduce dissatisfaction with compensation and
    restore the retirement benefits lost with the introduction of the
    Military Retirement Reduction Act (MRRA) retirement plan. We must also
    mitigate the challenging PERSTEMPO associated with executing the NMS
    and provide commanders the tools to help them manage PERSTEMPO and
    quality of life.
    Recruiting, Retention, and Compensation
        As indicated in the chart on the next page, the Total Army is
    having difficulty recruiting sufficient numbers of high-quality young
    men and women to meet requirements. The AC missed its fiscal year 1998
    target of 72,550 new recruits by 797 soldiers. The United States Army
    Recruiting Command missed their USAR target by 3,729 soldiers, and the
    ARNG fell 1,237 soldiers short of their recruiting goals. Compounding
    this problem, the cost of recruiting each individual soldier has
    doubled since 1986 from $5,300 to more than $10,000. Recruiting enough
    soldiers to meet our targets is important for filling the ranks today,
    but it is also critical to ensure that we have enough high quality NCOs
    for the future.
        Meeting quality goals is another area of concern. Eighty-nine
    percent of the Total Army fiscal year 1998 enlistees who had no
    previous military service were high school diploma graduates. Both the
    AC and the USAR met the 90 percent target for high school diploma
    graduates. To achieve this goal, however, the active component had to
    draw upon some of its pool of Delayed Entry Program (DEP) candidates
    for fiscal year 1999. Because the DEP is traditionally a way to begin
    building the pool of recruits for any given year, the fact that we
    inducted some of the fiscal year 1999 DEP pool in fiscal year 1998 is
    making it harder to meet this year's goals. Sixty-five percent of Total
    Army non-prior-service enlistees in fiscal year 1998 had AFQT scores in
    the top three ASVAB categories. All three components satisfied the
    third quality criterion by accepting two percent or less of non-prior
    service enlistees with AFQT scores in Category IV. The Army is
    resourcing its recruiting efforts to improve future recruiting
    performance.
        Because the recruiting goals of all three components are higher for
    fiscal year 1999 than they were last year, the Army has taken active
    steps to increase the number of recruiters and revamp its advertising
    strategy. The $13 million devoted to recruiting under the fiscal year
    1999 supplemental has helped address the increased costs of recruiting
    by providing money for increased enlisted bonuses and additional
    advertising for the USAR. Other incentives include increasing the
    College Fund maximum from $40,000 to $50,000 and extending enlistment
    bonus and Loan Repayment Program maximums. In spite of these
    incentives, current projections indicate that the active component will
    fall several thousand recruits short of its fiscal year 1999 goal.
    Retention and Compensation
        Our soldiers and leaders are working hard. Frequent deployments
    result in a challenging pace. Because many of our soldiers have
    families, they must balance training and operational deployments with
    Little League, child care, and other important responsibilities to
    their spouses and families. Many of our single soldiers are among those
    still wrestling with important career choices. For all of our soldiers,
    compensation, retirement benefits, and quality of life are important
    factors for determining whether they remain in the Army.
        In general, the Army exceeded its retention (or reenlistment) goals
    for fiscal year 1998. However, these overall percentages mask retention
    difficulties in certain ranks and specialty skills. Between 1991 and
    1998, the percentage of both officers and enlisted soldiers indicating
    they intended to remain on active duty until retirement declined by
    over five percent. According to a recent (Spring 1998) Sample Survey of
    Military Personnel, the top two reasons cited by officers for leaving
    the military were the amount of time they were separated from their
    family and the amount of basic pay. The top two reasons for leaving
    cited by enlisted soldiers were the amount of pay they receive and the
    quality of Army life. The survey reflected a statistically significant
    increase (up 5.6 percent for officers and 6.9 percent for enlisted
    soldiers between 1993 and 1998) in the percentage of both officers and
    enlisted soldiers citing inadequate retirement pay as a reason for
    leaving the Army. These results confirm that compensation, retirement
    benefits, and quality of life issues are important factors for
    recruiting and retaining quality people in our Army.
        A soldier's regular military compensation has three components:
    basic pay, various cost of living allowances that accrue to each
    soldier based on his or her marital status and area of assignment, and
    other factors such as hazardous duty, special skill pay, and deployment
    pay. Military pay raises have been capped at .5 percent below the
    Employment Cost Index (ECI). Over time, the perception of a gap between
    military pay and pay for comparable work in the civilian sector has
    grown to the point that it is a frequent complaint among soldiers.
    Research indicates soldiers believe they receive less pay than
    Americans doing comparable work in the civilian sector. The Army
    supports increasing pay over time, but the money to achieve this goal
    must come from an increase in the Army's Total Obligation Authority. We
    cannot accept further reductions in force structure or other Army
    accounts without increasing readiness risks unacceptably.
        Military retirement pay is another factor that affects individual
    decisions to enlist, reenlist, or remain in the Army. Consequently,
    changes to military retirement can have repercussions for force
    structure and readiness. Depending on when they entered service, our
    soldiers are covered by one of three retirement plans. As shown in the
    graph at the top of the page, each of these retirement systems provide
    retired soldiers with some percentage of their base pay multiplied by
    the number of years of military service. As of the end of fiscal year
    1998, the 8.4 percent of the AC who entered service prior to 1980 were
    under the traditional plan, the 14.4 percent who entered service
    between 1980 and 1986 were under the ``High Three'' system, and the
    77.2 percent who entered service after 1986 were under the MRRA system.
    In addition to using a smaller percentage of base pay to calculate the
    retired benefit, the MRRA system features a smaller annual cost of
    living allowance that further erodes the benefit over time. The
    disparity between the MRRA plan and the other retirement systems is an
    issue of growing concern among soldiers who will begin retiring under
    this plan in 2006. For these and other reasons, the Army opposes any
    further reduction in military retirement and supports the
    Administration's proposal to restore the 20-year retirement at 50
    percent of final base pay.
        The Army is aggressively pursuing better marketing and recruiting
    techniques to help meet the challenge of recruiting and retaining
    enough quality people to assure readiness for today and tomorrow. We
    support measures to reduce our soldiers' perception of a gap between
    military and civilian pay and redress the disparity between the MRRA
    retirement plan and previous plans. Our success in recruiting and
    retention will ultimately depend on making military service attractive
    to the pool of high-quality young people eligible to serve.
    Managing PERSTEMPO
        Deployments and separations have always been a part of military
    life, and the increased operational commitment of American soldiers
    abroad combined with necessary readiness training and training
    deployments make them even more common today. While the excitement of
    military deployments and travel is part of the attraction of military
    life for many people, the time that soldiers spend away from home can
    negatively affect morale, quality of life, recruiting and retention if
    not managed properly. Deployments can also disrupt our units' normal
    training rythyms, particularly when the deployments are for missions
    that emphasize nonstandard skills.
        There are a number of benefits to the nontraditional missions the
    Army has been called upon to execute in recent years. We believe the
    peace operations the Army is executing today serve to reduce the need
    to respond to potential crises tomorrow. Finally, many Army combat
    support and logistics units are doing substantially the same thing in
    Bosnia and other peace operations that they would in full-scale
    conflict. All soldiers participating in such operations get some
    training benefit from their experience, whether it is implementing
    rules of engagement, conducting force protection missions, or executing
    deployment operations.
        These benefits notwithstanding, however, the pace of operations
    since the end of the Cold War has increased the ``wear and tear'' of
    military life. Ongoing peacekeeping and peace enforcement commitments
    affect many more units and soldiers than are actually deployed at any
    given time. Because these missions require special skills not
    associated with most combat units' normal wartime tasks, units
    committed to peacekeeping and peace enforcement roles must conduct
    preparatory training before they deploy and refresher training to
    regain warfighting skill proficiency after they return. Peacekeeping
    and peace enforcement missions also require augmentation from sister
    units and from soldiers with certain low-density skills or Military
    Occupational Specialties (MOS). The net effect is that missions such as
    Bosnia affect the combat readiness training of more units than are
    actually deployed at any given time. A good rule of thumb to assess the
    readiness impact of these kinds of missions is to count two additional
    units as committed for each one actually deployed.
        The increased pace of contingency operations and associated
    training cuts into time available for home station training on
    essential tasks. This contributes to the decline in proficiency noted
    in our CTCs. We are still proficient, but we are not as proficient as
    we were a few years ago.
        The employment of the reserve components for contingency operations
    helps the Army manage PERSTEMPO. The RC has been a big contributor and
    has helped greatly in our missions abroad. We need the RC to conduct
    operations if we are to sustain readiness training and manage
    PERSTEMPO. With the expansion of Total Army integration initiatives,
    employment of reserve forces will increase in the future. For example,
    the 49th Armored Division (ARNG) will provide the division headquarters
    for the Bosnia mission in fiscal year 2000.
        While the employment of the 49th Armored Division is significant,
    the Army must manage RC PERSTEMPO also. The PERSTEMPO impact on a
    reserve component unit performing a mission such as Bosnia is even
    greater than the impact on AC units. Including the time required to
    conduct the necessary preparatory training, committing RC soldiers to
    Bosnia requires us to pull them away from their jobs, and from their
    employers, for about a year. When one considers that over 16,000 RC
    soldiers have served in Bosnia thus far, and the Army will continue to
    rely on their contribution, the message is clear. We must manage RC
    PERSTEMPO carefully.
        Total Army Integration initiatives offer a variety of combinations
    to capitalize on the strengths of the various components and manage
    PERSTEMPO. We must explore these initiatives to help continue the
    effective use of both AC and RC units in peacekeeping and peace
    enforcement roles, while minimizing the costs and negative impacts on
    individuals and units. For this reason, the divisional teaming
    initiative focuses extensively on keeping the main efforts of the
    reserve components on missions like Homeland Defense and Disaster
    Relief. These are important missions, and they are compatible with the
    special PERSTEMPO considerations of employing RC personnel in
    peacetime.
        Managing PERSTEMPO is an important consideration for Army
    operations. Excessive PERSTEMPO is one of a number of factors that can
    undermine the attractiveness of military life and erode our ability to
    recruit and retain quality people. Commanders must manage soldier
    PERSTEMPO while meeting the demands of their operational and training
    missions. We can help commanders manage some PERSTEMPO by funding
    modernization, training, BASOPS, and RPM because the equipment and
    other resources available to our soldiers affect the time it takes to
    accomplish necessary training and to maintain equipment.
                   concerns with readiness and modernization
        From fiscal year 1989 to fiscal year 1999, Army Total Obligation
    Authority declined 37 percent in fiscal year 2000 dollars (normalized
    for one-time transfers). The Army's share of Department of Defense TOA
    declined from 27.5 percent in fiscal year 1989 to 25 percent in fiscal
    year 1999. Concurrently, the Army has played an increasing role in
    executing the National Military Strategy, providing over 60 percent of
    the people for 32 of the 36 major military operations since the end of
    the Cold War. While we have preserved readiness for today by deferring
    modernization and taking advantage of our soldiers' extraordinary
    efforts, sustaining readiness requires increased resourcing to enable
    the Army to take care of people, meet current readiness requirements,
    and prepare for the future.
        The difference between funding levels and actual readiness costs in
    the last decade has required Army leaders to take increased risk in
    modernization (including recapitalization) and maintenance of
    facilities so they could resource current readiness. The funding for
    many of the direct costs associated with training (OPTEMPO) has also
    suffered, in part due to the migration of funds to shore up readiness-
    related elements of BASOPS and RPM. The fiscal year 2000 Budget
    provides funds to address the most significant of our near-term
    readiness concerns. Funding current readiness and taking care of people
    precludes increasing modernization accounts at this time.
    Readiness
        Properly resourced training prepares our quality soldiers to do
    their current jobs and assume increased responsibilities in the future.
    Assets such as our combat training centers make the American Army the
    best-trained Army in the world. Frequent deployments and scarce
    resources, however, have decreased our ability to conduct home-station
    unit field training at battalion and brigade level in recent years. The
    result has been a major challenge in maintaining unit proficiency
    between CTC rotations.
        Army leaders plan training in detail, integrating their training
    plans with other units to ensure that training is properly resourced
    and efficient. Leaders evaluate training and lead after action reviews
    (AARs) with all participants to ensure soldiers get the maximum benefit
    from each event. This systematic approach allows the Army to identify
    resource requirements with some precision. Additional resource
    requirements identified in recent testimony before Congress included
    fully funding the training costs of some RC units, upgrading ranges
    Army-wide to support quality training with our most modern weapon
    systems and targetry, and protecting OPTEMPO dollars from being used
    for funding contingency operations or other readiness-related expenses.
    Although funding for CONOPs must be addressed with each new
    contingency, the fiscal year 2000 Budget Request satisfies most of the
    near-term readiness requirements we have identified.
        Recent funding constraints have forced the Army to adopt a tiered-
    resourcing strategy to fund training for first-to-fight units. The
    resource tiers are related to a given unit's place in one of four
    ``force packages.'' Force Packages (FP) are groupings of units based on
    their order of anticipated commitment to support contingencies. Units
    in FP 1 through 3 are funded for 100 percent of the operations, spare
    parts, and training costs associated with each unit's Combined Arms
    Training Strategy (CATS). We have not been able to fully fund training
    for reserve component units in FP4 in recent years. The fiscal year
    2000 Budget and outyear plan increases OPTEMPO funding for these units.
        The Army must also upgrade its range facilities to ensure soldiers
    are properly trained to employ new weapon systems and technologies.
    Ranges must enable training at greater distances and must allow the
    integration of weapon systems with information technologies. The Army
    Ranges and Training Lands Requirements Review and Prioritization Board
    has prioritized 157 range and training land projects. These projects
    include digital ranges to support our modern weapon systems, urban
    terrain training facilities, and qualification ranges. High quality
    ranges with advanced target systems are important tools to train
    soldiers to fire and maneuver effectively and safely. Such ranges
    contribute to reducing fratricide in combat. The budget request funds
    some improvements to ranges in fiscal year 2000, with additional
    funding planned through fiscal year 2005.
        Contingency deployments have become routine in recent years. Since
    they are technically ``unforeseen'' requirements, they generally are
    not funded in advance. When the Army sends soldiers to these
    deployments, the funding comes out of our TOA for the year of
    execution; specifically it comes out of our OPTEMPO funds. These funds
    also support our training. When a large chunk of this money is
    unexpectedly committed to cover the costs of a contingency mission, the
    training that money was earmarked to support is jeopardized. Though the
    funding may eventually be provided, there is no way to recapture the
    lost time if a training event must be cancelled. Timely, non-offset
    reimbursement for contingency missions is essential to protect
    training. The fiscal year 2000 Budget provides funding for known
    contingency operations.
                BASOPS and RPM
        BASOPS and RPM accounts are important. They affect readiness
    because they fund the installation facilities and activities that
    support training, maintenance and deployment. They also affect morale
    by impacting the quality of life of soldiers and their families. In the
    fiscal year 2000 Budget and outyear plan, our BASOPS and RPM accounts
    are funded at 95 percent and 75 percent of requirements, respectively.
    RPM funding increases to 90 percent from fiscal year 2002 through
    fiscal year 2005.
        Deterioration of facilities and activities that support training,
    maintenance, and deployment over the past several years resulting from
    underfunded BASOPS and RPM accounts has forced commanders to use
    training money to provide needed funds for the maintenance of
    readiness-related infrastructure. In an effort to identify the
    readiness-related components of these two accounts more clearly for the
    purpose of readiness reporting, the Army has developed the concept of
    Operational Readiness (OPRED). The OPRED concept will give better
    visibility to the resources needed to fund the infrastructure that
    contributes to readiness. This includes infrastructure such as ranges,
    land, power projection facilities and facilities housing supply
    operations, TADSS, and maintenance activities. The fiscal year 2000
    budget and outyear plan fund BASOPS and RPM at a level that should help
    stem the migration of training money and will allow the Army to prevent
    further deterioration of critical facilities.
        Better funding of RPM will also makes it easier to streamline
    infrastructure. As described in the previous chapter, the Army is
    pursuing a wide range of programs that divest excess infrastructure to
    free resources for better care of needed facilities. Divestiture takes
    place through a number of programs, ranging from Base Realignment and
    Closure (BRAC) to demolition of old facilities unsuitable for other
    purposes. Proper funding of RPM facilitates getting rid of unusable
    facilities and saves the money that would otherwise be spent on them.
    Modernization
        Shaping and responding operations compete for the same limited
    resources needed to modernize. At the same time, the increased wear and
    tear on Army equipment associated with supporting contingency
    operations causes a higher than programmed toll on that equipment's
    useful life, thus shortening potential life cycles and further
    increasing the need for recapitalization. Maintaining current readiness
    at the cost of modernization has resulted in slowing, stretching, or
    canceling key programs. In accepting the inefficiencies of these
    actions, the Army has deferred the capabilities these systems would
    provide.
        Declining Army TOA has had the most acute effect in our
    modernization accounts. Over the past decade, Army Research,
    Development, and Acquisition funding has dropped 47 percent.
    Furthermore, Army RDA spending constitutes only 16 percent ($14 billion
    including Chemical Demilitarization funds) of total DOD RDA dollars. In
    acquisition, procurement programs are generally most efficient and
    yield the lowest cost per item when manufacturers can produce equipment
    at rates that optimize the efficiency of production facilities and
    people. Due to funding constraints, the Army has terminated or
    restructured over 100 programs since 1987 and has maintained
    procurement programs at minimum sustaining rates rather than more
    efficient rates.
        While the funding increases contained in the fiscal year 2000
    budget begin to address many concerns in the areas of people and near-
    term readiness, the Army continues to carry the largest burden of risk
    in its modernization funding. This budget holds modernization accounts
    at roughly the same level as last year. This level of funding is
    sufficient to sustain our highest priority programs at the minimum
    essential levels to ensure development of future capabilities, but at a
    pace slower than desired. The Army expects to be able to fund
    modernization at a higher level in future years. Among the priorities
    for these funds will be increasing the pace for the modernization of
    soldier support systems, replacement of aging equipment, improvement of
    combat systems, procurement of modernized munitions, expansion of RC
    modernization, and Force XXI digitization.
                resources available: the fiscal year 2000 budget
        The fiscal year 2000 Budget submission for the Army totals $67.4
    billion. The following chart shows both the fiscal year 1999 (current
    year) budget and the proposed fiscal year 2000 budget by major spending
    categories:

                          FISCAL YEAR 2000 ARMY BUDGET
                     [Dollars in billions, current dollars]
    ------------------------------------------------------------------------
                                                 Fiscal    Fiscal
                   Appropriation                  year      year     Change
                                                  1999      2000
    ------------------------------------------------------------------------
    Military Personnel........................      26.8      27.8      +1.0
    Operation and Maintenance.................      21.1      22.9      +1.8
    Procurement...............................       8.5       8.6       +.1
    Research, Development, Test and Evaluation       5.0       4.4       -.6
    Military Construction.....................       1.2        .7       -.5
    Army Family Housing.......................       1.2       1.1       -.1
    Base Realignment and Closure..............        .5        .2       -.3
    Chemical Demilitarization.................        .8       1.2       +.4
    Environmental Restoration.................        .4        .4  ........
    Defense Working Capital Fund, Army........  ........        .1       -.1
                                               -----------------------------
          Total \1\...........................      65.5      67.4      +1.9
    ------------------------------------------------------------------------
    \1\ Totals may not add due to rounding.

        The budget reflects almost a $2.0 billion increase from last year's
    budget. Increases in funding for contingencies, pay, retirement, and
    near-term readiness are included. The budget funds OPTEMPO at 100
    percent for both AC and RC units in Force Packages (FP) 1 through 3.
    OPTEMPO for the RC units in FP4 has been increased. Funding for BASOPS
    covers 95 percent of requirements. This increase from last year's
    budgeted level of 84 percent (91 percent after the supplemental), is
    significant because it will reduce the need to migrate funds from
    OPTEMPO accounts. Funding for RPM is 75 percent, which is also an
    increase from last year. This level of Real Property Maintenance
    funding will allow the Army to begin reversing the deterioration of its
    facilities, and anticipated increases to 90 percent of requirements in
    future years will enable a modest revitalization program beginning in
    fiscal year 2003. By providing funds for modernizing ranges, the budget
    supports another key near-term readiness requirement. Finally, the
    budget funds modernization programs at roughly the same level as last
    year.
                                   conclusion
        Today's Total Army is one-third smaller than the Cold War Army, yet
    it conducts many times the number of operations per year as that larger
    force. The NMS places unique demands on America's Army and American
    soldiers because of the nature of our missions as well as the nature of
    our readiness and modernization requirements. The Army should receive
    resources commensurate with its role in executing the NMS.
        Assuring readiness for today and for the 21st century requires a
    steady commitment to providing funds for people, readiness, and
    modernization. The cost avoidances made possible by reduced defense
    spending in the wake of the Cold War, now in excess of $750 billion,
    support such a commitment. Adequately funding readiness requires
    keeping BASOPS and RPM accounts at levels that protect training
    dollars. Contingency operation funding must be provided early and must
    come above the Army's top line. Adequate funding is essential to
    preparing American soldiers for the full spectrum of military
    operations necessary to support national security.
        Attracting and retaining quality people requires funding the
    programs that provide those people and their families with an adequate
    quality of life. At a time when the NMS requires sending soldiers
    abroad more than at any time in recent history, we must strive to
    improve pay and retirement to a level that provides adequate
    compensation for a career of service to our Nation. In short, we must
    let America's sons and daughters know that the Nation values their
    service. By providing funds to increase pay, the fiscal year 2000
    Budget sends the right message, at a critical time, to our soldiers,
    civilians, and families.
        The fiscal year 2000 Budget addresses most of the Army's people and
    current readiness concerns. Modernization funding continues at roughly
    the same level as in fiscal year 1999, which allows the Army to sustain
    its highest priority programs. The Army will continue to do our part to
    implement Defense Reform Initiatives and other cost-saving measures to
    help generate funding for unfunded modernization priorities.
        Shaping, responding, and preparing now--the elements of our NMS--
    are landpower intensive and are essential to protecting America's
    interests. The Army has been increasingly, and almost continuously,
    called upon to commit our soldiers to operations that serve the
    Nation's interests both at home and around the world. The execution of
    the NMS has dramatically increased the operational pace of America's
    Army even as we have reduced the size of that Army by one-third. The
    proper execution of the Army's substantial piece of this strategy
    demands adequate resourcing. American soldiers, trained and ready,
    serving the Nation's interests around the world, deserve no less.
        ``We must be prepared to pay the price for peace or assuredly we
    will pay the price for war.'' President Harry S. Truman
                                    Addendum
    data required by the national defense authorization act for fiscal year
                                      1994
           (bold italics indicate supplemental data required by hqda)
        Section 517(b)(2)(A): The promotion rate for officers considered
    for promotion from within the promotion zone who are serving as active
    component advisors to units of the Selected Reserve of the Ready
    Reserve (in accordance with that program) compared with the promotion
    rate for other officers considered for promotion from within the
    promotion zone in the same pay grade and the same competitive category,
    shown for all officers of the Army. For fiscal year 1998 the promotion
    rate to Major was 67.2 percent for officers serving as Active component
    advisors to the Selected Reserve. The promotion rate to Lieutenant
    Colonel was 38.55 percent. The table below compares these rates with
    the Army average as well as rates within other selected commands.

                                  [In percent]
    ------------------------------------------------------------------------
                                                Fiscal year     Fiscal year
                                              1998 MAJ Board  1998 LTC Board
    ------------------------------------------------------------------------
    AC/RC...................................            67.2            38.6
    FORSCOM.................................            70.6            77.5
    USAREC..................................            48.9            25.0
    Cadet Cmd...............................            59.9            27.3
    TRADOC..................................            76.2            62.6
    Army....................................            76.8            67.5
    ------------------------------------------------------------------------

        Section 517(b)(2)(B): The promotion rate for officers considered
    for promotion from below the promotion zone who are serving as active
    component advisors to units of the Selected Reserve of the Ready
    Reserve (in accordance with that program) compared in the same manner
    (as the para above). The promotion rates for officers within the
    promotion zone and below the zone are summarized below:

                                                      [In percent]
    ----------------------------------------------------------------------------------------------------------------
                                                                        AC/RC      ARMY AVG.   AC/RC BZ     ARMY BZ
    ----------------------------------------------------------------------------------------------------------------
    Fiscal year 1998 MAJ...........................................        67.2         76.8         4.4         6.5
    Fiscal year 1998 LTC...........................................        38.55        67.5  ..........         3.4
    ----------------------------------------------------------------------------------------------------------------

    Section 521(b):
        (1) The number and percentage of officers with at least two years
    of active-duty before becoming a member of the Army National Guard; and
    the number and percentage of officers with at least two years of
    active-duty before becoming a member of U.S. Army Reserve Selected
    Reserve units. In fiscal year 1998 there were 17,479 officers with at
    least two years of active-duty before becoming a member of a U.S. Army
    Selected Reserve unit for a percentage of 51.87 percent. The Army
    National Guard (ARNG) has 19,077 or 48.53 percent of the assigned
    officer strength with at least two years of active-duty before becoming
    a member of the Army National Guard.
        (2) The number and percentage of enlisted personnel with at least
    two years of active-duty before becoming a member of the Army National
    Guard or the U.S. Army Reserve Selected Reserve units: In fiscal year
    1997 there were 55,375 soldiers with at least two years of active-duty
    before becoming a member of a U.S. Army Selected Reserve unit for a
    percentage of 36.98 percent. The Army National Guard has 155,144 or
    48.01 percent of the assigned enlisted strength with at least two years
    of active-duty before becoming a member of the ARNG.
        (3) The number of officers who are graduates of one of the service
    academies and were released from active duty before completion of their
    active-duty service obligation: 92 officers who were graduates of one
    of the service academies were released from active duty before they
    completed their active duty service obligation in fiscal year 1998. Of
    those officers--
              (A) the number who are serving the remaining period of their
            active-duty service obligation as a member of the Selected
            Reserve pursuant to section 1112(a)(1) of ANGCRRA, 39 academy
            graduates are serving the remainder of their active duty
            commitments as members of the Selected Reserve.
              (B) the number for whom waivers were granted by the Secretary
            under section 1112(a)(2) of ANGCRRA, together with the reason
            for each waiver: No officer received waivers by the Secretary
            of the Army in fiscal year 1998.
        (4) The number of officers who were commissioned as distinguished
    Reserve Officers' Training Corps graduates and were released from
    active duty before the completion of their active-duty service
    obligation: 18 officers who were commissioned as Distinguished Reserve
    Officers' Training Corps graduates were released from active duty
    before they completed their active-duty service obligation. Of these
    officers--
              (A) the number who are serving the remaining period of their
            active-duty service obligation as a member of the Selected
            Reserve pursuant to section 1112(a)(1) of ANGCRRA; ten officers
            who were commissioned as Distinguished Reserve officers'
            Training Corps Graduates are now serving in the Selected
            Reserve.
              (B) the number for whom waivers are granted by the Secretary
            under section 1112(a)(2) of ANGCRRA, together with the reason
            for each waiver: No officer received waivers by the Secretary
            of the Army in fiscal year 1998.
        (5) The number of officers who are graduates of the Reserve
    Officers' Training Corps program and who are performing their minimum
    period of obligated service in accordance with section 1112(b) of
    ANGCRRA by a combination of (A) two years of active duty, and (B) such
    additional period of service as is necessary to complete the remainder
    of such obligation served in the National Guard and, of those officers,
    the number for whom permission to perform their minimum period of
    obligated service in accordance with that section was granted during
    the preceding fiscal year. Twenty-four ROTC graduates were released
    after serving a minimum of two years of active duty. Effective fiscal
    year 1995, the Army initiated a program to insure these officers have a
    letter of acceptance from a National Guard or Army Reserve unit prior
    to release from Active Duty.
        (6) The number of officers for whom recommendations were made
    during the preceding fiscal year for a unit vacancy promotion to a
    grade above first lieutenant and, of those recommendations, the number
    and percentage that were concurred in by an active duty officer under
    section 1113(a) of ANGCRRA, shown separately for each of the three
    categories of officers set forth in section 1113(b) of ANGCRRA:
        ARMY NATIONAL GUARD.--In the Army National Guard, fiscal year 1998,
    the number of officers recommended for a unit vacancy promotion was
    958. All of these officers were approved for promotion.
        U.S. ARMY RESERVE.--The U.S. Army Reserve FSP units promoted 11
    officers by unit vacancy promotion in fiscal year 1998. The remaining
    units promoted 39 officers by unit vacancy boards in fiscal year 1998.
    The Army Reserve does not have a federal recognition program like the
    National Guard. U.S. Army Reserve unit vacancy boards are centralized
    under HQDA management. Active duty officers are an integral part of all
    the U.S. Army Reserve's unit vacancy board selections.
        (7) The number of waivers during the preceding fiscal year under
    section 1114(a) of ANGCRRA of any standard prescribed by the Secretary
    establishing a military education requirement for noncommissioned
    officers and the reason for each such waiver. There were no waivers
    granted in fiscal year 1998 for either the ARNG or the USAR.
        (8) The number and distribution by grade, shown for each State, of
    personnel in the initial entry training and nondeployability personnel
    accounting category established under 1115 of ANGCRRA for members of
    the Army National Guard who have not completed the minimum training
    required for deployment or who are otherwise not available for
    deployment and a narrative summarizing procedures to be followed in
    fiscal year 1998 to account for members of the USAR who have not
    completed the minimum training required for deployment or who are
    otherwise not available for deployment:
        NATIONAL GUARD.--The number and distribution of ARNG soldiers in
    initial entry training and other nondeployable personnel accounting
    status are maintained by National Guard Bureau. The total number of
    non-deployables in the ARNG is 31,076. Information by grade and state
    is maintained by National Guard Bureau (NGB).
        ARMY RESERVE.--The U.S. Army Reserve identifies the number and
    distribution of non-deploying personnel in the Units Status Report
    (USR). In the Reserve Forces, DOD requires a complete USR each quarter
    and change report in each month that a change occurs.
        (9) The number of members of the Army National Guard, shown for
    each State, that were discharged during the previous fiscal year
    pursuant to 1115(c)(1) of ANGCRRA for not completing the minimum
    training required for deployment within 24 months after entering the
    National Guard and a narrative summarizing procedures to be followed in
    fiscal year 1998 for discharging members of the USAR who have not
    completed the minimum training required for deployment within 24 months
    of entering the USAR.
        NATIONAL GUARD.--None.
        ARMY RESERVE.--Soldiers who have not completed minimum training
    required for deployment within 24 months of entering the U.S. Army
    Reserve are discharged in accordance with Army Regulations 135-175
    Separation of Officers, and 135-178 Enlisted Separations. Enrollment
    and completion of minimum training requirements are monitored through
    personnel (Total Army Personnel Database Reserve) and training (Army
    Training And Requirements Resources System) databases that identify
    USAR soldiers' military education and their adherence to regulatory
    guidelines.
        (10) The number of waivers, shown for each State, that were granted
    by the Secretary during the previous fiscal year under section
    1115(c)(2) of ANGCRRA of the requirement in section 1115(c)(1) of
    ANGCRRA described in paragraph (9), together with the reason for each
    waiver. Account was fully implemented in July 1994. During fiscal year
    1998, there were no waivers granted within either the National Guard or
    the U.S. Army Reserve.
        (11) The number of Army National Guard members, shown for each
    State, and the number of U.S. Army Reserve members shown by each Army
    Reserve Command/General Officer Command who were screened during the
    preceding fiscal year to determine whether they meet minimum physical
    profile standards required for deployment and, of those members--
              (A) the number and percentage who did not meet minimum
            physical profile standards required for deployment; 39,706
            soldiers were screened medically and 1,159 failed to meet the
            minimum physical profile standards required for deployment for
            a percentage of 2.91 percent of all soldiers screened.
              (B) the number and percentage who were transferred pursuant
            to section 116 of ANGCRRA to the personnel accounting category
            described in paragraph (8). 186 soldiers were transferred to
            the personnel accounting code category described in paragraph
            (8).
        (11) The number of members, and the percentage of total membership,
    of the Army National Guard, shown for each State, and of the U.S. Army
    Reserve shown by each Army Reserve Command/General Officer Command, who
    underwent a medical screening during the previous fiscal year as
    provided in section 1117 of ANGCRRA. During fiscal year 1998, 253,911
    or 69 percent of Army National Guard members completed medical
    screening. During fiscal year 1998, 39,706 or 21.6 percent of USAR unit
    members completed medical screening.
        (13) The number of members, and the percentage of the total
    membership, of the Army National Guard, shown for each State, and the
    number of members, and the percentage of the total membership, of the
    U.S. Army Reserve shown for each Army Reserve Command/General Officer
    Command who underwent a dental screening during the previous fiscal
    year as provided in section 1117 of ANGCRRA. Note: Funding is not
    approved for implementing this provision at this time. Funds were not
    available to conduct dental screening during fiscal year 1998. Twenty
    percent of USAR members received a visual check by a physician, not a
    dentist, during their periodic physical exam. This is not a true dental
    screen, which by definition of the Dental Consultant at the Army
    Surgeon General's office would have to be performed by a dentist, to
    include x-rays of teeth.
        (14) The number of members, and the percentage of the total
    membership, of the Army National Guard, shown for each State, and the
    number of members, and the percentage of the total Selected Reserve
    unit membership, of the U.S. Army Reserve, shown for each Army Reserve
    Command/General Officer Command, over the age of 40 who underwent a
    full physical examination during the previous fiscal year for purposes
    of section 1117 of ANGCRRA. Section 1074a of Title 10 covers the
    requirement for full physical examinations (personnel over 40) and
    annual medical screenings (all personnel). The over 40 population of
    the Army National Guard is 77,170 or 20.9 percent of the total
    membership. Of the over 40 population, 13,234 (17.1 percent) received
    full physical exams during fiscal year 1998. (National Guard Bureau
    maintains the state breakdown.) The over 40 population of the USAR unit
    membership is 43,957 or 24 percent of the total unit membership. Of the
    over 40 population, 7,588 (17.3 percent) received full physical exams
    during fiscal year 1998.
        (15) The number of units of the Army National Guard, and the U.S.
    Army Reserve, that are scheduled for early deployment in the event of a
    mobilization and, of those units, the number that are dentally ready
    for deployment in accordance with section 1118 of ANGCRRA. Section 1118
    of the ANGCRRA was repealed in Section 740 of the 1996 ANGCRRA. The
    requirement for annual medical screenings and care is now covered under
    Section 1074a of Title 10. 155 Army National Guard units and 371 USAR
    units are scheduled for early deployment in the event of mobilization.
    Dental readiness screening has not begun due to lack of approved
    funding in fiscal year 1999.
        (16) The estimated post-mobilization training time for each Army
    National Guard combat and FSP unit, and U.S. Army Reserve FSP unit, and
    a description, displayed in broad categories and by State for Army
    National Guard units, and by the ARCOM/GOCOM for U.S. Army Reserve
    units, of what training would need to be accomplished for Army National
    Guard combat and CFP units, and U.S. Army Reserve units, in a post-
    mobilization period for purposes of section 1119 of ANGCRRA.
              (A) Estimated time required by units for postmobilization
            training is reported through the Unit Status Report and is
            available from the unit readiness rating system. This
            classified information is now included in classified summary
            tables of unit readiness, which are compiled and reported by
            DCSOPS, DAMO-ODR.
              (B) Information on types of training required by units during
            postmobilization is maintained by CONUSA. That information is
            summarized in paragraphs and tables that are maintained by
            DCSOPS, DAMO-TRC.
                      1. Types of postmobilization training required for
                    Enhanced Separate Brigades (eSB) can be generally
                    categorized as maneuver, attack, defend, protect the
                    force, gunnery and NBC defense. Tables showing types of
                    postmobilization training required for each eSB is
                    maintained by DCSOPS, DAMO-TR.
                      2. Types of postmobilization training required for
                    Force Support package (FSP) units can be generally
                    categorized as Common Task Testing, NBC Defense, Force
                    Protection, Sustainment, Command and Control, Weapons
                    Qualification, and Tactical communications Training.
                    Virtually all units also required branch specific
                    technical training to meet deployment standards. Tables
                    showing types of postmobilization training required for
                    FSP1 and FSP2 units organized by component and branch
                    are maintained by DCSOPS, DAMO-TR.
        Enhanced Brigades.--Initiatives continue to ensure that each
    Enhanced Brigade is prepared to deploy within 90 days of its
    mobilization. Mobilization timelines will coincide with availability of
    training areas and lift capability. FORSCOM/Army National Guard
    Regulation 350-2, which is currently being rewritten, remains the
    guidepost for Enhanced Brigade training in the near term. Specific data
    regarding the training requirements of the individual Enhanced Brigades
    is maintained by Directorate of Operations (G-3), Forces Command.
        The following diagram depicts the Post-Mobilization Training phases
    of the ARNG Enhanced Brigades.
    [GRAPHIC] [TIFF OMITTED] T02MY19.000

        THIS DIAGRAM DISPLAYS THE COMPOSITION AND SEQUENCE OF THE ENHANCED
    BRIGADE POST-MOBILIZATION TRAINING PLAN. IT ENCOMPASSES FOUR PHASES AND
    WILL TAKE 90 DAYS.

        The following diagram demonstrates how ARNG Enhanced Brigades would
    flow into the various post-mobilization training sites.
    [GRAPHIC] [TIFF OMITTED] T02MY19.001

        THIS DIAGRAM DEPICTS HOW UNITS WOULD FLOW INTO THE NUMBER OF HEAVY
    ENHANCED BRIGADE POST-MOBILIZATION TRAINING SITES RECOMMENDED BY RAND
    (3), AND LIGHT ENHANCED BRIGADE SITE.
        THE NATIONAL TRAINING CENTER, AT FORT IRWIN, WOULD TRAIN THREE
    MECHANIZED ENHANCED BRIGADES.
        FORT HOOD WOULD BE USED TO TRAIN THREE HEAVIES.
        ENHANCED BRIGADES HOME-STATIONED IN THE NORTHWEST, NEAR I CORPS, AS
    WELL AS THE 29TH HAWAII, WOULD TRAIN AT YAKIMA.
        THE LIGHT ENHANCED BRIGADES (EXCEPT FOR THE 41ST IN OREGON AND 29TH
    IN HAWAII) WOULD GO TO THE JOINT READINESS TRAINING CENTER, TO MRC
    REQUIREMENTS.

        (17) A description of the measures taken during the preceding
    fiscal year to comply with the requirement in section 1120 of ANGCRRA
    to expand the use of simulations, simulators, and advanced training
    devices and technologies for members and units of the Army National
    Guard and the U.S. Army Reserve. The ARNG has continued to incorporate
    simulation and simulators into individual, crew/team, platoon, and
    battalion and brigade battlestaff training. The ARNG's use of virtual
    and constructive simulation provides a solution to reduced funding and
    a method to increase individual and unit readiness.
        The use of virtual simulators provides for increased proficiency
    when the crew/team move into the collective training event. The ARNG
    has been fielding the Abrams Full-Crew Interactive Simulation Trainer
    (A-FIST) a full-crew precision gunnery trainer for armor units, and the
    Engagement Skills Trainer (EST). There are currently two mobile platoon
    sets of the Close Combat Tactical Trainer (CCTT) being used by the
    ARNG. There is one platoon set for each of the Abrams and the Bradley
    versions of the M-CCTT. The two M-CCTT platoon sets are currently based
    at Camp Beauregard, Louisiana. The EST is a multi-task trainer for
    dismounted infantry teams and squads. The EST also functions as a
    marksmanship trainer and training support tool for mortars, the Mark 19
    40 mm Grenade Launcher and other crew-served weapons. They have fielded
    the Fire Support Combined Arms Tactical Trainer (FSCATT) Howitzer Crew
    Trainer (HCT), the GUARDFIST II (Guard Armory Device Full-crew
    Interactive Simulation Trainer--GFII) observed fire trainer, and the
    Digital Systems Test and Training Simulator (DSTATS) for Field
    Artillery units. The ARNG has also expanded collective battlestaff
    training using SIMITAR Janus, and the USAR's Brigade and Battalion
    Battlestaff Simulation System (BBS).
        The Total Army Distance Learning Program (TADLP) is in the process
    of establishing Distance Learning (DL) classrooms on Active Army Posts,
    in Total Army School System (TASS) battalions quartered in National
    Guard Armories, and in Army Reserve Centers. These classrooms will be
    used by all components of the Army to include the civilian workforce.
    The National Guard has been aggressively pursuing the establishment of
    additional DL classrooms with special Congressional funds. Currently,
    the Guard has placed 32 DL classrooms into operation. In fiscal year
    1998, an additional 112 were planned for installation, which would
    bring the total to approximately 144 operational DL classrooms. The
    addition of hardware, software, and an integrated strategy now provides
    the Total Army with a method to distribute training to a large
    geographic area. The Army Reserve has also developed plans for fielding
    DL classrooms beginning in fiscal year 1998.
        The Simulation Brigades U.S. Army Reserve Divisions (Exercise)
    (Div(Ex)) under the Training Support XXI (TSXXI) training initiative
    conduct Battle Command and Staff Training (BCST) annually to: Force
    Support Packages (FSP) units; units with a Latest Arrival Date (LAD) of
    less than 30 days; Divisional Round Out units; and, ARNG Enhanced
    Separate Brigades (eSB). All other units conduct BCST triennially. Five
    USAR Battle Projection Centers (BPC's) provide both Army Reserve and
    Army National Guard units with the ability to train using Army standard
    simulation tools: the Battalion and Brigade Battlestaff Simulation
    System (BBS), the Corps Battle Simulation (CBS), the Janus Battle Focus
    Trainer, and the Combat Service Support Training Simulation System
    (CSSTSS). Constructive simulations will facilitate realistic large
    scale training for commanders, battlestaffs and their units and
    soldiers. The USAR has also expanded its ability to support collective
    and staff training using the SPECTRUM (a computer software program for
    battlestaff training) constructive simulation system.
        The five Battle Projection Centers (BPC's) continue to use legacy
    constructive simulation systems: CBS, BBS, and CSSTSS. The fielding of
    the Warfighter's Simulation 2000 (WARSIM 2000) to the 78th and 91st
    Divisions (Exercise) is currently scheduled for fiscal year 2002. The
    three other Div(Ex)'s (the 75th, the 85th, and the 87th) are scheduled
    to receive WARSIM 2000 during fiscal year 2003. Legacy simulations are
    still required to provide training to the force WARSIM 2000 is fully
    fielded to the USAR Div(Ex)'s. Continued funding is necessary for
    continued functionality and development crosswalks and transition
    requirements. This way the Army Reserve meet its mission to train the
    priority warfighting and supporting commands of the Reserve Components
    in the field.
        Funding constraints limit Active Army, Army National Guard, and
    Army Reserve efforts to increase the use, to the extent desired, of
    training devices, simulations, simulators, and advanced training
    technologies, to support individual and unit training. These
    constraints impact the Reserve Components especially hard due to the
    limited time available for units to train.
        (18) Summary tables of unit readiness, shown for each State for
    Army National Guard units, and for each ARCOM/GOCOM for the U.S. Army
    Reserve units, and drawn from the unit readiness rating system as
    required by section 1121 of ANGCRRA, including the personnel readiness
    rating information and the equipment readiness assessment information
    required by that section, together with--
              (A) explanations of the information shown in the table:
            Classified tables have been developed by NGB and OCAR with a
            detailed narrative analysis of personnel and equipment
            readiness trends indicated since implementation of the January,
            1994, revision to Army Regulation 220-1 on Unit Status
            Reporting. They are currently maintained by the Office of the
            Deputy Chief of Staff for Operations and Plans (DAMO-TR).
              (B) based on the information shown in the tables, the
            Secretary's overall assessment of the deployability of units of
            the Army National Guard, and U.S. Army Reserve, including a
            discussion of personnel deficiencies and equipment shortfalls
            in accordance with such section 1121: The classified overall
            assessment of the deployability of ARNG combat units, and FSP
            units of both Reserve Components is currently maintained by the
            Office of the Deputy Chief of Staff for Operations and Plans
            (DAMO-TR).
        (19) Summary tables, shown for each State, for units of the Army
    National Guard and for each ARCOM/GOCOM for units of the U.S. Army
    Reserve, of the results of inspections of units of the Army National
    Guard by inspectors general or other commissioned officers of the
    Regular Army under the provisions of section 105 of title 32, together
    with explanations of the information shown in the tables, and including
    display of--
              (A) the number of such inspections;
              (B) identification of the entity conducting each inspection;
              (C) the number of units inspected; and
              (D) the overall results of such inspections, including the
            inspector's determination for each inspected unit of whether
            the unit met deployability standards and, for those units not
            meeting deployability standards, the reasons for such failure
            and the status of corrective actions. For purposes of this
            report, data for Operational Readiness Evaluations will be
            provided on Enhanced Brigade and FSP units of the Army National
            Guard and for FSP units of the U.S. Army Reserve. Training
            Assessment Model data will be provided to meet this reporting
            requirement for all other units of the Army National Guard and
            U.S. Army Reserve. Data on Army National Guard units will be
            reported by State and on U.S. Army Reserve units by Army
            Reserve Command/General Officer Command.
        Forces Command (FORSCOM) conducted 1,957 inspections, evaluations
    and assessments of Reserve Component (RC) Force Support Package (FSP)
    units during fiscal year 1997. These included Training Assessment Model
    (TAM) assessments, Operational Compliance Evaluations (OCE) formerly
    Operational Readiness Evaluations (ORE), and Aviation Resource
    Management Surveys (ARMS). These were conducted primarily by CONUSA,
    installations, and associated units. The ARMS were conducted by FORSCOM
    ARMS teams. The number of inspections, evaluations and assessments of
    eSB and FSP units in fiscal year 1998 exceeded fiscal year 1997 by 326
    percent, from 600 in fiscal year 1997.
        a. First U.S. Army.--During fiscal year 1998, First U.S. Army
    conducted a total of 1,132 inspections, evaluations, and assessments of
    eSB and FSP units. The number of inspections, evaluations and
    inspections conducted on eSB and FSP units increased 343 percent in
    fiscal year 1998, from 330 in fiscal year 1997. Of the total
    evaluations, 137 OCEs were conducted on company, battery, or detachment
    sized eSB and FSP units. Operational Compliance Evaluations conducted
    on eSB and FSP units increased 274 percent in fiscal year 1998, from 50
    OREs in fiscal year 1997.
        b. Fifth U.S. Army.--During fiscal year 1998, Fifth U.S. Army
    conducted a total of 485 inspections, evaluations, and assessments of
    eSB and FSP units. The number of inspections, evaluations and
    inspections conducted on eSB and FSP units increased 179 percent in
    fiscal year 1998, from 270 in fiscal year 1997. Of the total
    evaluations, 94 OCEs were conducted on company, battery, or detachment
    sized eSB and FSP units. Operational Compliance Evaluations conducted
    on eSB and FSP units increased 208 percent in fiscal year 1998, from 45
    OREs in fiscal year 1997.
        c. Summary tables depicting CONUSA inspection numbers by state for
    the ARNG and by Regional Support Command for the USAR units are
    available in DCSOPS, DAMO-TR. Results of FORSCOM ARMS on RC units are
    also maintained there.
        (20) A listing, for each Army National Guard combat and FSP unit,
    and the U.S. Army Reserve FSP unit, of the active-duty combat and other
    units associated with that Army National Guard and U.S. Army Reserve
    unit in accordance with section 1131(a) of ANGCRRA, shown by State for
    the Army National Guard and ARCOM/GOCOM for the U.S. Army Reserve and
    to be accompanied, for each such National Guard and U.S. Army Reserve
    unit, by--
              (A) the assessment of the commander of that associated
            active-duty unit of the manpower, equipment, and training
            resource requirements of that National Guard or U.S. Army
            Reserve unit in accordance with section 1131(b)(3) of ANGCRRA.
            Completed assessments are maintained by the Office of the
            Directorate of Operations (G-3) FORSCOM. A summary of responses
            addressing eSB and FSP units are found below; and
              (B) the results of the validation by the commander of that
            associated active-duty unit of the compatibility of that
            National Guard or U.S. Army Reserve unit with active duty
            forces in accordance with section 1131(b)(4) of ANGCRRA.
            Completed assessments are maintained by the Office of the
            Directorate of Operations (G-3) FORSCOM. A summary of responses
            addressing eSB and FSP units are found below.
        In April 1994, the Secretary of the Army designated the Army
    National Guard Enhanced Separate Brigades as the principal Reserve
    Component maneuver forces of the Army. Enhanced Separate Brigade
    locations and Active Army training associations are shown below.

                                    TRAINING ASSOCIATIONS FOR DIVISIONS AND BRIGADES
    ----------------------------------------------------------------------------------------------------------------
         ARNG DIVISION/BRIGADE                    PEER MENTOR                  SENIOR MENTOR             NOTE
    ----------------------------------------------------------------------------------------------------------------
    28 IN DIV--HARRISBURG, PA......  3 IN DIV (M)--FT STEWART............  XVIII CORPS.........  ...................
    29 IN DIV (L)--FT BELVOIR, VA..  82 AB DIV (ABN)--FT BRAGG...........  XVIII CORPS.........  ...................
    34 IN DIV--ST PAUL, MN.........  101 AB DIV (AASLT)--FT CAMPBELL.....  XVIII CORPS.........  ...................
    35 IN DIV (M)--FT LVNWTH, KS...  FT RILEY--FT RILEY..................  III CORPS...........  TAM BY CONUSA.
    38 IN DIV--INDIANOPLIS, IN.....  10 MTN DIV--FT DRUM.................  XVIII CORPS.........  TAM BY CONUSA.
    40 IN DIV (M)--LONG BEACH, CA..  I CORPS--FT LEWIS...................  I CORPS.............  TAM BY CONUSA.
    42 IN DIV (M)--NEW YORK, NY....  4 IN DIV (M)--FT HOOD...............  III CORPS...........  ...................
    49 AR DIV--AUSTIN, TX..........  1 CAV DIV--FT HOOD..................  III CORPS...........  ...................
    27 IN BDE--SYRACUSE, NY........  10 MTN DIV, BDE--FT DRUM............  10 MTN DIV..........  E BDE.
    29 IN BDE--FT RUGER, HI........  25 IN DIV (L), BDE--SCHOFLD BKS.....  25 IN DIV (L).......  E BDE.
    30 IN BDE (M)--CLINTON, NC.....  3 IN DIV (M), BDE--FT STEWART.......  3 IN DIV (M)........  E BDE.
    39 IN BDE--LITTLE ROCK, AR.....  101 AB DIV (AASLT), BDE--FT CAMPBELL  101 ABN DIV.........  E BDE.
    41 IN BDE--PORTLAND, OR........  25 IN DIV (L), 1 BDE--FT LEWIS......  I CORPS.............  E BDE.
    45 IN BDE--EDMOND, OK..........  1 CAV DIV, BDE--FT HOOD.............  1 CAV DIV...........  E BDE.
    48 IN BDE (M)--MACON, GA.......  3 IN DIV (M), BDE--FT STEWART.......  3 IN DIV (M)........  E BDE.
    53 IN BDE--TAMPA, FL...........  82 AB DIV (ABN), BDE--FT BRAGG......  82 ABN DIV..........  E BDE.
    76 IN BDE--KOKOMO, IN..........  101 AB DIV (AASLT), BDE--FT CAMPBELL  101 ABN DIV.........  E BDE.
    81 IN BDE (M)--SEATTLE, WA.....  2 IN DIV (M), 3 BDE--FT LEWIS.......  I CORPS.............  E BDE.
    116 AR BDE--BOISE, ID..........  4 IN DIV (M), 3 BDE--FT CARSON......  4 IN DIV (M)........  E BDE.
    155 AR BDE--TUPELO, MS.........  1 CAV DIV, BDE--FT HOOD.............  1 CAV DIV...........  E BDE.
    218 IN BDE (M)--NEWBERRY, SC...  1 IN DIV (M), 1 BDE--FT RILEY.......  FT RILEY............  E BDE.
    256 IN BDE (M)--LAFAYETTE, LA..  4 IN DIV (M), BDE--FT HOOD..........  4 IN DIV (M)........  E BDE.
    278 AR CAV RGT--KNOXVILLE, TN..  3 AR CAV RGT--FT CARSON.............  FT CARSON...........  E BDE.
    31 AR BDE--NORTHPORT, AL.......  1 AR DIV, 1 BDE--FT RILEY...........  FT RILEY............  TAM BY CONUSA.
    92 IN BDE--SAN JUAN, PR........  82 AB DIV (ABN), BDE--FT BRAGG......  82 AB DIV (ABN).....  TAM BY CONUSA.
    207 IN SCT GP--FT RCHDSN, AK...  6 IN DIV (L), 1 BDE--FT RICHDSN.....  USARPAC.............  ...................
    ----------------------------------------------------------------------------------------------------------------

        1. Enhanced Separate Brigades (eSB).
        Information on the manpower, equipment and training resource
    shortfalls for the eSB is annotated below. The above chart shows the AC
    Training Associations for the eSB and ARNG Divisions. The column that
    is identified as certifier means that the AC associated commander will
    have the responsibility to conduct an assessment at the two and one
    year mark prior to a potential rotation by a Combat Training Center
    (CTC) by an eSB. The results are then provided through command channels
    to the Commander FORSCOM for review. The decision on whether a brigade
    will continue in its program for an NTC or JRTC rotation will be made
    by the state authority based on the value of the anticipated training
    experience weighed against the cost of the rotation. The 41st IN light
    and the 116th AR heavy completed their CTC rotations, NTC and JRTC
    respectively, in Training Year 1998.
        a. Manpower.--The majority of the eSB reported shortages in both
    junior and senior enlisted personnel (11B, 11M, 13B, 13F, 19K) and
    officers. Throughout the eSB, Duty Military Occupational Skill
    Qualification (DMOSQ) tends to be the major training challenge with
    many soldiers attending DMOSQ schools instead of Annual Training.
        b. Equipment.--Equipment on hand in some eSB have not kept up with
    the MTOE changes. Across the board, the eSB are short ERC-A
    communications equipment (primarily SINCGARS radios) which impacts on
    their ability to communication with their AC counterparts. Shortages
    exist in chemical defense equipment, especially chemical alarms.
    Shortages in night vision devices limits the ability of the eSB to
    conduct night training. One brigade is short HEMMTS and MICLICS and
    lacks dedicated signal support. Additionally, the engineers are short
    bridging equipment.
        c. Training Resource Shortfalls.--Funding constraints have limited
    units from sending soldiers to MOS producing schools, such as 11M, 13F,
    19F, 19K, 77F and 88M. Reported shortfalls in school allocations,
    particularly for master gunners and aviation specialties, are harming
    professional development and unit leader training programs. Changes to
    MTOE and accompanying reclassification and retraining in Air Defense
    Artillery and Military Intelligence skills exacerbate the situation
    with regard to training funding and school seats. Extant shortfalls in
    Additional Flight Training Periods (AFTP) cut into the flying hour
    budget, causing reduced aircraft availability, which, in turn, impact
    air crew proficiency. Shortage of available ranges and adequate
    maneuver areas, and distance to ranges and areas increases the cost of
    conducting training and hampers platoon and crew training readiness.
        d. Compatibility.--Compatibility is limited due to lack of
    communications equipment, especially SINCGARS and MSE radios.
    Incompatibility of automation equipment and lack of equipment at the
    unit level hampers connectivity and training. After completion of the
    Aviation Restructuring Initiative, one air cavalry squadron is
    organized instead as an attack battalion, thus reducing its ability to
    conduct aviation reconnaissance operations. Recent fielding of M1s and
    M3A2s has enhanced compatibility of the ARNG heavy brigades with the AC
    force.
        2. ARNG and USAR Force Support Package Units.
        a. ARNG and USAR FSP units are represented by the following
    branches or areas of concentration: Chemical; Combat Engineer;
    Engineer; Aviation; Military Police; Signal Corps; Adjutant General;
    Logistics; Maintenance; Rear Tactical Operations Center; Supply; Corps
    Headquarters; Finance; Supply Command Headquarters; Public Affairs;
    Medical; Military History; Military Intelligence, Ordnance;
    Quartermaster; and Transportation. The ARNG had Air Defense Artillery,
    Field Artillery and Armor units in addition to those types listed; the
    USAR had Military Intelligence and Judge Advocate General units within
    their FSP units.
        b. Information on the manpower, equipment and training resource
    shortfalls for the FSP units is available in reports submitted by
    associated AC commanders. These reports are maintained at DCSOPS, DAMO-
    TRO. That information is also summarized below:
              (1) Manpower.--Several FSP units have soldier shortages in
            the range of 8-12 percent. Also a shortfall in DMOSQ soldiers
            affects a number of units. The most predominant shortcoming is
            in Military Intelligence units, in language skills.
              (2) Equipment.--Some FSP units are short NBC equipment and
            some lack tactical communications equipment, especially
            SINCGARS. A number of units are lacking ERC-A equipment, which
            renders them non-deployable, placing the burden of acquiring
            the equipment on the mobilization station. If FSP units remain
            without essential equipment for extended periods of time, it
            will seriously degrade their ability to perform their wartime
            mission without significant training and time at
            postmobilization.
              (3) Training Resources.--Several FSP units do not have an
            adequate training area by which to perform their mission
            essential task list training. Some engineer, air defense
            artillery and aviation FSP units are reporting inadequate
            funding. Others are having problems getting school seats, i.e.
            for training engineer, military intelligence language and
            quartermaster water specialities.
              (4) Overall Comments on RC Force Compatibility with AC
            Force.--Communications equipment shortages, particularly
            SINCGARs, is having the greatest impact on compatibility. As
            MTOE changes and unit reorganizations continue to mature, and,
            coupled with distribution of equipment by priority fill,
            communications and automation compatibility between AC and RC
            units will progressively improve.
        (21) A specification of the active-duty personnel assigned to units
    of the Selected Reserve pursuant to section 414(c) of the National
    Defense Authorization Act for Fiscal Years 1992 and 1993 (10 U.S.C. 261
    note), shown (A) by State for the Army National Guard and ARCOM/GOCOM
    for the U.S. Army Reserve, (b) by rank of officers, warrant officers,
    and enlisted members assigned, and (c) by unit or other organizational
    entity of assignment. The Total Army Personnel Command does not
    maintain assignment data as specified above, as active component
    personnel are not managed by state or reserve component command.
        The Active Component/Reserve Component (AC/RC) reorganization
    consisted of a three-phase program. The first phase of this
    Congressionally mandated program was the Pilot Program, which assigned
    2,000 Active Duty personnel as full-time advisors to selected Army
    National Guard and U.S. Army Reserve Units. Personnel rotations for
    phase one took place in fiscal year 1994 and fiscal year 1995. Phase
    two followed enactment of Sec. 1132, Title XI, Fiscal Year 1993,
    National Defense Authorization Act. This expanded the dedicated Active
    Component (AC) support by 3,000 active duty personnel, bringing the
    total to 5,000 Congressionally mandated active duty personnel beginning
    in fiscal year 1995. The original target for 100 percent fielding was 1
    October 1997.
        During fiscal year 1996 and 1997, FORSCOM conducted a Support to
    Organizational Training Functional Area Assessment (SOT FAA). Its
    mandate was to streamline command and control, and reduce any
    redundancy in unit missions and functions. In March 1997, the Vice
    Chief of Staff, Army approved FORSCOM's plan to restructure the AC/RC
    program, resulting in over 1,200 duty position and location changes.
        Beginning in fiscal year 1998 and continuing throughout fiscal year
    1999, FORSCOM is executing the third phase of the AC/RC restructuring
    program. This restructure moved titled positions within the AC/RC
    program to meet force structure needs. The new structure also created
    two dual component (AC, ARNG) Integrated Division Headquarters at Fort
    Riley and Fort Carson which will each serve as the division
    headquarters to three National Guard Enhanced Brigades. Furthermore,
    five tri-component (AC, USAR, ARNG) Training Support Division
    Headquarters were added to command and control the training of the
    Reserve Component. DA PERSCOM is now assigning against the future
    structure.
        The charts below depict the current enlisted and officer fill for
    titled positions based on the current force structure mandated by TDA
    3098. These charts show personnel fill for AC/RC titled positions by
    command and grade:
        The current reorganization will cause some soldiers to be assigned
    to unauthorized positions as the AC/RC force structure changes to meet
    the TDA 1000 requirement. Where possible, these personnel will be
    reassigned to vacant Title XI positions in the new structure. The
    remainder of these soldiers have been identified and placed on orders
    to move from the AC/RC assignment to the mainstream Army beginning May
    1999 through September 1999.
        The Army is committed to providing enough personnel to fill titled
    positions to 100 percent. As the Army reaches the end of its three-
    phased AC/RC restructure process in October 1999 and the force
    stabilizes, fill for titled positions is projected to reach 100 percent
    by the end of 1st Quarter fiscal year 2000. Assignment to Title XI
    positions is included in the highest priority of fill in the Army.

                                     Kosovo

        Senator Stevens. Thank you very much. I want to yield to
    Senator Inouye. I understand he wants to go to another
    committee.
        But before I do, do either of you know anything about what
    we heard in the news this morning about the possibility of
    ground forces now to Kosovo?
        General Reimer. I am sorry?
        Senator Stevens. The news indicates the President has
    indicated there is now the possibility of ground forces to
    Kosovo. Have you all been informed about that?
        General Reimer. My understanding is the President said that
    all options are still on the table and that he has not
    discarded the use of ground forces under the proper conditions,
    but that is all I know. I saw the reports. One paper concluded
    that the use of ground forces was an option, and one paper I
    read concluded it was not an option, so I think what he said is
    that using ground forces is still an option on the table under
    the right set of conditions. That is my understanding.
        Senator Stevens. Senator Inouye.

                                 Modernization

        Senator Inouye. Mr. Chairman, I thank you very much. I have
    a few questions, and I would like to submit the rest for the
    record.
        General Reimer, you pointed out that for the last 13 years
    we have been cutting back not only in troop strength but in
    procurement programs. At this stage, what war-fighting
    procurement programs are most critical for readiness?
        General Reimer. Well, Senator, we are committed primarily
    to situational awareness, and the effort to make sure that we
    develop that awareness is our top priority. Our Advanced
    Warfighting Experiments being conducted on a number of
    different axes--the heavy, light, and Strike Force--really
    focus on situational awareness, answering three small
    questions: Where am I? Where is the enemy? Where are my
    buddies? If we can answer those three questions, we can
    fundamentally change the way we conduct operations.
        Situational awareness and the Force XXI Battle Command
    Brigade and Below program is absolutely essential. To do that,
    we have about $2.8 billion committed to digitization programs.
        In addition to that, the only two new programs we have are
    Comanche and Crusader. Comanche, of course, is the Scout
    helicopter. It is the quarterback of our digitized battlefield.
    Its ability to find targets and be able to identify them for
    other systems is absolutely fundamental.
        If we had Comanche now, I am sure we would have it deployed
    in Albania and with Task Force Hawk, because it complements the
    Apaches very well. The Crusader is really a means of making
    sure that we synchronize the combined arms team to conduct fire
    support. As I said, the current system we have has been in the
    Army as long as I have. We have probably gotten as much out of
    both of us as we can. It is time to move on to a new system,
    and Crusader gives us that system. It gives us three times the
    capability for the same amount of lift.
        Crusader and Comanche are the two new systems. In addition,
    we need to continue our work with night vision devices to
    ensure we really do own the night by turning the night into
    day, and we are making progress in that area. At the same time,
    we need to recapitalize our trucks and other current systems.
        So, those are the issues. We have not had enough money in
    our modernization account to keep the balance we should, and
    that is what we are asking to do, to keep the balance about
    right.
        Senator Inouye. And you believe this budget would fulfill
    that?
        General Reimer. This budget is still a little short,
    Senator. I said about $5 billion is an amount that we need in
    addition each year. We are about $0.8 billion short in terms of
    near-term readiness and another $1.8 billion short in the
    modernization account. That is the very minimum. There are more
    unfinanced requirements out there, but we are primarily short
    in our modernization account.

                         Operating and personnel tempos

        Senator Inouye. During the past 8 years, your Army has been
    faced with one crisis after the other. If it is not Bosnia, it
    is the desert. If it is not the desert, it is Korea. If it is
    not that, it is Kosovo now.
        How are the men and women managing current OPTEMPO and
    PERSTEMPO demands?
        General Reimer. Amazingly well, because you are exactly
    right, they have been worked very hard, and it is something
    that we have got to keep under control.
        I think the greatest thing that we can do is to provide
    them predictability. They understand if they have to deploy on
    a moment's notice for some major crisis, but if we can give
    them planning guidance--that they are going to have to go and
    will be gone for a certain amount of time--that seems to sooth
    the pain associated with the deployment.
        We have to keep it manageable. We cannot deploy them one
    right after the other, and our system has to be such that as
    soldiers come back from Europe and they have been in Bosnia,
    they do not join the 1st Cavalry Division and are sent right
    back to Bosnia. We must manage that very carefully, and we are
    doing that at the Department level and at all levels, by trying
    to ease the tempo and balance the burden, so to speak.
        Critical to this is to be able to use the Reserve
    components (RC). We have 54 percent of the Total Army in the
    Guard and Reserve now. That is over 20 percent higher than any
    other service, and we have to continue using the RC more. There
    have been approximately 15,000 reservists who have served in
    Bosnia during that operation, and so this has been a Total Army
    effort.
        The 49th Division from Texas will take a primary rotation
    in Bosnia. So, there are two points to be made: it is
    predictable, and it spreads commitments across the force as
    best as we possibly can by using more of the total force. But,
    we have to be careful that we do not burn out these young
    soldiers. That is why your point about the size and strength of
    the Army is important. If we let the size get smaller, we are
    going to have major, major problems.

                         Contingency operations funding

        Senator Inouye. As you know, we just concluded our
    supplemental appropriations conference, and in that context
    there was no funding requested for rotation or redeployment. Is
    there any significance there?
        General Reimer. I thought the 2000 budget, and I will have
    to go back and verify that, had some contingency operations
    forecasts. However, we have been unable to forecast exactly
    what contingency will take place, and we have always had to
    come back to you for a supplemental, because we could not
    forecast the exact cost.
        I do not attach any significance to it, other than the fact
    that we expect we will be involved in contingency operations in
    2000. We just do not know where and to what extent.
        Senator Inouye. Once again, I would like to thank you for
    all you have done for this Nation, and we wish you the very
    best, sir.
        General Reimer. Thank you very much, sir.
        Senator Inouye. Mr. Chairman, may I submit my questions for
    the record?
        Senator Stevens. Yes, sir. We will have a series of
    questions. Thank you.
        Senator Cochran.

                                 Urban training

        Senator Cochran. Mr. Chairman, thank you. Let me first of
    all congratulate General Reimer on his outstanding service as
    the Army Chief. I appreciate his comments, as I know all the
    members of the committee do, about the responsiveness that we
    have tried to make available in times of emergency and other
    times to help make sure that we are funded where we need to be
    in order to maintain the security interest and safety and
    security of our country. We appreciate your leadership. I think
    it has been truly outstanding.
        Mr. Secretary, welcome to you. We appreciate very much your
    service as Secretary of the Army.
        I noticed the other day some comments in the newspaper
    about urban training exercises and how this has been a problem
    in some cities where the Army has tried, the Marine Corps, too,
    to train troops in what might be urban combat situations, but
    it is hard to find places to train where you do not disturb the
    people who live there.
        Somebody has suggested that we add to the National Training
    Center an urban complex, or in some other place create a
    training site that would be more conducive to training and
    would not disturb the civilian population. Are there any plans
    like this, and do we have other places besides, maybe, Fort
    Irwin, where such training could take place?
        General Reimer. We have one site at Fort Polk, which has
    urban terrain, a small village, and we use that extensively for
    training. That supports most of our light forces that rotate
    through the Joint Readiness Training Center. We would welcome a
    facility at Fort Irwin, and we need to build another one. Our
    problem is getting the funds to do it at the proper time so our
    heavy force would also have the opportunity to train in that
    particular area.
        Most of the other installations have small places. Fort
    Drum, for example, has a small military operations urban
    terrain training area. Fort Carson has just built one. There
    are various types of training areas around the Army, but the
    major areas where we can do the most realistic training should
    be at our Combat Training Centers: the Joint Readiness Training
    Center at Fort Polk, the National Training Center at Fort
    Irwin, and the Combat Manuever Training Center at Hohenfels in
    Germany.
        Senator Cochran. Mr. Secretary, do you have any comments
    you would like to make?
        Mr. Caldera. That is exactly correct--we are doing more of
    that kind of training. What you see at Fort Drum, I saw at the
    site they are building at Fort Carson when I was there
    recently. That is helping us in terms of training soldiers for
    the Bosnia rotation, because they actually get to be in a
    village that is a replica of the kind of environment they will
    be operating in.
        In the future, urban areas are the likely place where
    forces will be employed and where we need to develop the
    training, leaders tactics, and doctrine that will help soldiers
    be successful in that environment. So, we need to have places
    and opportunities to do that kind of training.

                                Missile defense

        Senator Cochran. There have been some significant
    developments recently with respect to the ballistic missile
    threat that confronts our country, particularly in medium-range
    missiles. Pakistan, Iran, North Korea are places where we have
    seen evidence of new capabilities in this area and North Korea
    has launched the Taepo Dong I. How well-equipped, if you can
    tell us, is the Patriot system that is available to us to
    counter and defend against these threats?
        General Reimer. The Patriot will be able to handle the
    medium-range threat, the theater missiles, ballistic missiles,
    but it does not provide a capability for the longer range
    national missiles. We need a different type of system to
    provide that particular capability.
        Senator Cochran. What is the outlook for the THAAD program
    that you have under your jurisdiction, to be developed to a
    point where it will provide an answer to some of these new
    threats?
        General Reimer. The theater high altitude area defense, or
    THAAD, is on track. We are conducting the test at the beginning
    of next month. We have had nine. There have been successes and
    failures with that system, and it is on a fast track. It
    provides you the high altitude capability that complements the
    Patriot and gives you the capability to engage in both
    endoatmosphere and exoatmosphere conditions. It is terribly
    important to provide as much assurance as we can to people on
    the ground that we are going to be able to get those theater
    ballistic missiles, and it is in competition with Navy theater-
    wide.
        The Department of Defense has kind of a shoot-off program,
    and I think it down-selects somewhere around 2001 to go to one
    type of system, but THAAD is a serious competitor in this
    particular area. It is absolutely essential that we get a high
    altitude capability. THAAD provides the only exoatmospheric and
    endoatmospheric capability that is on the drawing boards today.
        Senator Cochran. There has been a lot of attention paid to
    the initiative for a national missile defense. We have had
    legislation passed in both Houses, as you know, to state a new
    policy, and that is to deploy a system as soon as technology
    permits us to.
        The question is, how much of our resources are we going to
    allocate to that effort, and how much should we allocate to
    some of the other missile defense programs like the ones that
    we have been talking about in the Patriot system, for example.
    Is there enough money in your budget to keep these programs
    under development and moving forward in a way that will assure
    that our forces in the field will have the protection of
    missile defense systems in theaters of operation?
        Mr. Caldera. Senator, I think the investments we are making
    in THAAD and Patriot advanced capability-3 (PAC-3) will pay
    dividends in terms of national missile defense in terms of what
    we are learning, and in terms of the lessons learned and their
    application to developing those kinds of systems.
        Protecting soldiers in the field is, of course, a critical
    capability that we have to be able to provide wherever it is
    that they are deployed. That is part of the importance of THAAD
    and PAC-3, that is, to provide the umbrella of protection we
    need. The THAAD program is a real challenge, but a challenge
    that we are going to successfully overcome. I am confident that
    the THAAD program is very close now in terms of its ability to
    have the metal on metal hit that the system requires.
        I think we recognize within the Office of the Secretary of
    Defense (OSD) that there is a significant investment that has
    to be made, not just to the service missile programs, but
    investment for national missile defense which is competing,
    frankly, with all of the priorities that we have, as we look at
    what the future threats are going to be and what our country is
    going to expect us to be ready for.
        Senator Cochran. Thank you, Mr. Chairman.

                        fiscal year 2000 Budget proposal

        Senator Stevens. Thank you very much.
        Mr. Secretary, first, a question to you. I have been
    laboring trying to find out what the problem is with this
    budget, and let me tell you, the budget that was submitted to
    us recommends $1.65 billion in unspecified rescissions--this is
    Department-wide, now--$3.1 billion for incrementally funding
    military construction, that is a savings, supposedly, $2.9
    billion of credits for real estate investment tax revenues, and
    I have yet to find out how we get a hold of that to spend, and
    $6.6 billion of credits for military retirement trust fund
    payments.
        Those are all savings that we are told have been worked
    out, and that means the Department has roughly--I know it does
    not quite add up, but we are told that the calculation of our
    budget people is that under the terms of the Budget Act we need
    $8.3 billion to fully fund the budget that was presented to us
    for the Department of Defense.
        If we look at your share of that, the Army share of that is
    substantial. As a matter of fact, of the money, the $1.65
    billion rescissions alone, $450 million would have to come out
    of the Army on a pro rata basis.
        My problem is, were you aware that under this budget that
    it is underfunded by $8.3 billion?
        Mr. Caldera. We were aware that as the budget was being
    built and submitted, in order to be able to have some of the
    readiness plus-ups that were needed and identified last fall,
    additional money needed to be put into the budget. Some of the
    efforts to find that money within the budget caps included
    things like incremental funding for military construction.
        The rescission notion was that it was an unprogrammed
    rescission, and that as we went through the year, we would look
    and see where we were underexecuting and look for those places
    to be able to----
        Senator Stevens. But rescissions, we have not rescinded
    more than $250 million Department-wide since I have been here.
    This is $1.65 billion in rescissions. Did anyone ask you to
    identify the Army's pro rata share of those rescissions? No one
    has told us what to rescind.
        Mr. Caldera. We have not been asked to identify what those
    rescissions ought to be.
        Senator Stevens. You are aware of what it means, is that
    while the news is out that there is an increase here of $4
    billion, it is actually not so. We do not have that $4 billion
    at all. That is made available theoretically because of this
    $8.3 million we are supposed to save somewhere.
        We are actually more than $4 billion short going into this
    budget, and I am having a hard time trying to figure out how we
    can tell all of you that we do not have the money for the
    things you have requested, because this budget is not smoke and
    mirrors, it is just puff. It is not even--it is a cloud. It is
    not even good smoke. I do not know what to do with this budget,
    and it bothers me considerably that we have the problem of a
    war going on, and Bosnia and Iraq, and I do not know what to
    say.
        I think some of you in the Department ought to stand up to
    the Office of Management and Budget (OMB) and tell them to stop
    jerry-rigging these budgets, because it is just not possible
    for us to deliver an answer to the President's budget based
    upon the assumptions that are in it.

                                     Kosovo

        Now, we have been asked--we understand what the President
    announced, and I have to ask you, have you been asked to
    prepare any plans for the additional forces, and do we know any
    estimate of what the cost will be as far as the deployment for
    ground forces when that occurs?
        Mr. Caldera. If the forces were deployed in a peacekeeping
    mission----
        Senator Stevens. Now, Mr. Secretary, that is not what the
    President has said. This is a wartime deployment now. We had
    the figures before that General Clark mentioned to us of
    deploying, what was it, 4,000 troops in a peacekeeping mode.
    Clark told us above 50,000, almost 70,000 forces would be
    needed if we went in under wartime conditions into Kosovo. That
    is an entirely different set of facts.
        Mr. Caldera. It is, Senator. The initiative to start with,
    the initial base, which was 4,000 in a peacekeeping mode, was
    about $1.3 billion for the first year. If you increase that
    number--because you are talking more like 7,000 to 8,000
    soldiers--then obviously that cost increases tremendously if it
    is not a peacekeeping mode. If it is a different mode of entry,
    then clearly it would be higher than the $1.3 billion.
        Senator Stevens. You are not suggesting we could
    incrementally increase the peacekeeping amount and adequately
    fund forces going to war. You are not suggesting that to me,
    are you?
        Mr. Caldera. No, sir. To the extent that we introduce those
    soldiers, that is a contingency that is unplanned, and we would
    ask for supplenmental funding.
        Senator Stevens. But I am asking you, do you have the
    figures yet, what it was going to cost to put those figures in
    under fire?
        Mr. Caldera. Well, the estimated cost is for soldiers not
    under fire, Senator. I think the estimates are $1.3 billion to
    $3 billion, depending upon the size of the peacekeeping force,
    but not if you are introducing them into combat operations.

                                Task Force Hawk

        Senator Stevens. General Reimer, I do not know who made the
    decision not to reinsert the Hawk helicopters, but I applaud
    it, because I think that is as close as you can get to a ground
    war without support. Are we going to hear some more about that
    now? Are there changes made in terms of the utilization of the
    Hawks?
        General Reimer. Well, Task Force Hawk, as you said, is in
    Albania. The decision was made to deploy them there, but there
    has been no decision yet to employ them. They were sent there
    because, at the time, the weather conditions were really such
    that you almost had to have some capability available to get
    underneath the clouds.
        As the weather has improved and the other situations have
    changed, there has not been a need to use them at this
    particular point. I would not rule out their use. I would not
    rule it in or rule it out. It would be dependent upon the
    conditions that exist over there and what the ground commanders
    decide needs to be done. So yes, there could be more
    information coming about that, but right now we are not using
    them, because the conditions are not right. But, they are ready
    to go.

                            Unmanned aerial vehicles

        Senator Stevens. Are those Predators going to support the
    operations of the Army also? I know they are operated by the
    Air Force.
        General Reimer. There are two unmanned aerial vehicles
    (UAV's) over there. One of them is the Predator, and it is
    flying in support of the force. We have access to that
    information with Task Force Hawk, and we also have Hunter over
    there flying out of Skopje, Macedonia. The UAV's are also
    providing intelligence information to which Task Force Hawk has
    access. Task Force Hawk has access to all the intelligence
    information in the theater, so yes, they are flying in support.

                               Manning challenge

        Senator Stevens. You made the statement, General, you are
    doing pretty well on recruiting. My staff tells me we are about
    3,800 recruits behind this year in the active component alone.
    That is not enough to worry you?
        General Reimer. No, that does worry me, Mr. Chairman. If I
    said recruiting, I misspoke, because recruiting is our
    challenge, and our estimates are that we will probably come in
    around 5,000 short on the recruiting goal we had, which is
    around 75,000.
        Senator Stevens. Are you talking about retention?
        General Reimer. Retention is high. We are retaining at
    about 112 percent, and we did set high objectives, and so our
    real challenge is to recruit soldiers into the Army. We are
    retaining them in terms of the macro numbers.
        We are also going to have spot shortages, because you do
    not retain evenly across the force, but in terms of the macro
    numbers on retention, they are very good. Recruiting is not
    good.
        Senator Stevens. Your budget proposes a buy-back of the
    noncommissioned officers (NCO) positions that were downgraded 2
    years ago.
        General Reimer. Yes, sir.
        Senator Stevens. How do you buy back people that have
    already left?
        General Reimer. Well, when we cut the force down, Mr.
    Chairman, we cut the NCO content of the force too much. All we
    are suggesting here is we have to buy back NCO spaces, grow our
    NCO's from specialist to sergeant and sergeant all the way up,
    so we will open up the promotion gates to ensure that NCO's who
    are qualified get promoted. It is a matter of recognizing the
    spaces, then promoting the qualified NCO's into them.
        That is one of our biggest issues in terms of readiness--
    the NCO shortages. We have had to work very carefully to keep
    it in balance, so the NCO content buy-back is terribly
    important to the near-term readiness of the United States Army.
    It is a matter of creating the spaces and buying back the
    number of NCO's we need. Increasing the NCO content of the
    force is essentially what we are doing.
        Senator Stevens. Is your buy-back proposal fully funded?
        General Reimer. Yes, it is.
        Senator Stevens. Do you have enough for that?
        General Reimer. Yes, we did.

                         quality of life in the Pacific

        Senator Stevens. I have got to get a little provincial
    here. I hope you do not mind that. I asked the staff to look at
    what happened to the $137 million we provided the Army for
    quality of life enhancements projects. Do you know where I am
    going?
        General Reimer. Yes, sir.
        Senator Stevens. The Army allocated that to seven bases in
    the whole Army, and no increase was provided for the Army of
    the Pacific and, as a matter of fact, if we look at the overall
    spending for this year, the Army of the Pacific got 25 percent
    of the funds which were allocated to the Army of Europe, and so
    I am sort of compelled to ask you two things. One, is this
    Kosovo operation and the things going on in Bosnia and Kosovo
    and Iraq, is that putting such pressure that we do not have
    readiness in the Pacific?
        Senator Inouye and I feel that that is the lowest ebb we
    have seen now in the Army of the Pacific, and if we at the
    world, as you know, the six and seven largest armies of the
    world are in the Pacific. Really, the threat against this
    country for the coming century is in the Pacific.
        Now, there are lots of threats against other places in the
    world, but the real one against us is in the Pacific, and we
    seem to be downgrading the Army of the Pacific considerably.
    Can you tell me why we should kick priorities over to Germany
    over the Pacific? There is four times as much money going into
    the Army of Europe alone compared to what is going into all of
    the Pacific.
        General Reimer. The $137 million you mentioned, Mr.
    Chairman, was the 1999 supplemental that you gave us, quality
    of life enhancement for defense.
        Senator Stevens. That was in the general bill, General.
        General Reimer. The decision we made was to upgrade our
    barracks program. When we looked at it across the force, the
    only major command that needed barracks upgrades at that
    particular point in time was in Forces Command, and so that
    money went to Forces Command.
        If you look back at 1998 and then also look at 2000, there
    is a better balance of the allocation of funding. Your point
    about the percentage going to Europe and the percentage going
    to the Pacific is one that I will take a look at, because I do
    not know the exact percentage.
        In Europe, the barracks are in very bad shape right now.
    That does not mean we could not improve the ones in the
    Pacific, but the bigger issue is the downgrading of the
    Pacific. That is absolutely, in my mind at least, not occurring
    in the Army. I just came back from there and, of course, one of
    my messages was to make sure that we were vigilant there just
    because of the reasons you talk about.
        That is still a very dangerous complex area, and the
    threats over there are numerous. I did not see a downgrading in
    terms of readiness, in terms of the percentage of money going
    for barracks upgrade and quality of life. I will take a look at
    that.
        Senator Stevens. Well, General, I have a firm memory of the
    time Senator Hollings and I were sent by Senator Stennis to
    look at conditions in Germany when we were freshmen Senators,
    and that was the time of a draftee force, and we had families
    living in third and fourth story walk-ups. We called them cold
    water flats. In those days, however, the host nation support
    was that they provided the barracks and they provided the bases
    for us.
        Now, once we started deploying families with our people and
    a volunteer force the host nation stopped providing assistance
    for the quarters. As a matter of fact, our costs per capita in
    Europe have gone up staggeringly compared to deployment in,
    say, Korea, or even Japan, and we find this bill just being
    acted on now, that passed the House last night, there was a
    considerable amount of money to go into facilities in Germany.
        I think we have got to really look at that situation, that
    deployment. If the host countries are not going to contribute
    to our maintaining forces there, I think I am going to dust off
    Mansfield's resolution and bring some of them home, because the
    cost of that deployment, when we are providing 100 percent of
    the cost and 25 percent of NATO and maintaining the supply
    lines we do to keep those forces resupplied and rotated, a
    reasonable rotation is just horrendous, compared to the force
    in the rest of the world.
        But above all, it does seem to me we have got to take a
    long look at this cost. They even wanted to modernize some of
    the towers, and I guess that is your base, I know, but all of
    that in the past was host country support, and I seriously
    question whether we should get into another 50 years of
    maintaining a force there totally at our expense, because I am
    looking at this budget trying to find money, and I find it
    seeping out under the edges. The modernization is going not to
    modernization of the force, it is going to modernization of
    facilities in Europe to keep the force there, an enormous
    amount.
        I invite you to take a look at that amount and project what
    it is going to cost if we are going to modernize those
    facilities for deploying families rather than just forces.
    Maybe we should change our policy and do what Senator Stennis
    thought, and that is have unaccompanied tours, shorter tours to
    Europe, have them unaccompanied and have them be one-quarter
    Reserve, one-quarter Guard, 50 percent Regular.
        As a matter of fact, he talked about that when he had this
    chair I have, and it is time we started looking at some way to
    maintain those costs, because a friend of mine used to say, you
    should never let someone else eat your lunch. Those people are
    eating--the cost of those people are cutting into the core of
    your modernization program for the total force, and I would
    urge that we try to do something about it.

                          Montgomery GI bill benefits

        Last, and I know my friends here are waiting to ask
    questions, the Senate bill 4, as it passed the Senate, had a
    provision in there that really increases the cost of the
    Government issued (GI) bill considerably. I wonder if you all
    have studied that.
        Secretary Cohen indicated it would be from $11 billion more
    than the budget that the Department had submitted, but
    primarily the GI bill is associated with the Army enlistment,
    and I think Congressman Montgomery is to be credited and
    deserves a lot of credit for giving some real backbone to the
    GI bill in peacetime, but this suggestion is that we now make
    the GI bill transferable to a spouse or children of the service
    person, and we understood when we supported Montgomery's bill
    to enhance enlistment.
        I do not know how passing on those benefits to a spouse and
    children is going to enhance your enlistment. Maybe out 20
    years it might, but not now, and it is a very great enlistment
    tool, but it looks to me like it is about ready to be, if not
    destroyed, severely limited by this suggestion. Have you all
    studied that, and do you have any comments to make about the
    modifications that S. 4 proposed to the GI bill?
        Mr. Caldera. Well, one concern about the transferability
    proposal is that today a lot of the young people who come into
    the Army are sons and daughters of career military personnel,
    and if you can transfer the GI bill to them and they have the
    option of going to college without serving themselves, there is
    a concern that that might actually work against enlistments in
    the future.
        I think there is an issue with respect to spouses who are
    in places like Germany, where they cannot qualify for in-State
    tuition programs. If they want to continue their education, or
    achieve their educational goals, it is hard for a spouse to be
    able to pursue a college program while they are in a
    ``deployed'' status. There are some things we are looking at in
    terms of the same kind of tuition assistance for spouses that
    we do for soldiers.
        I think some of the services have tried that and
    experimented with it a little bit.
        Senator Stevens. I have not seen the report on that. I
    would like to see it.
        Mr. Secretary, you know, the tents that I visited there in
    Bosnia, there are three universities there operating at the
    camp I visited, and your young members, male and female, were
    attending college while they are deployed in Bosnia.
        Now, in terms of Germany, we did change the law so spouses
    could work on our bases and earn some money while they were
    there so they could help pay their cost of furthering their
    education. I remember that was one of the reasons suggested at
    the time. Now it is being suggested that we extend the GI bill
    money over there. It does look to me like it is just too much
    of an invasion on the GI bill money. I would urge you to study
    it.
        Senator Harkin.

                                Task Force Hawk

        Senator Harkin. Thank you very much, Mr. Chairman.
        First of all, thank you, Mr. Chairman and Mr. Secretary and
    General Reimer. I just returned from a Senate delegation led by
    Senator Hutchison. We were in Albania and also in Macedonia,
    Aviano, Brussels, Hungary, and Bulgaria. We visited the
    military forces in Tirana, and some of those who are helping us
    also in other places, in Aviano especially.
        Again, I just want to tell you that I found the morale very
    high, the purpose well imbued. They knew what they were doing.
    They knew why they were there. I especially thought that the
    professionalism of the Apache helicopter pilots was very high.
    I was one of those always asking tough questions of briefers,
    General Shelton and others, about why they did take so long to
    get the Apaches to the area.
        Having been there, I now understand, and I must say,
    General, and Mr. Secretary, I am awed, overawed by what the
    Armed Forces were capable of doing in a 4-week span of time.
    You would be amazed at what they did in Tirana in 4 weeks in
    terms of the material that was brought to the region.
        They actually had to go out to a quarry. They had trouble
    bringing the Apaches in. It was a mud hole, so they had to go
    out to a quarry to get the rock, bring the rock in, build the
    pads, build everything so they could bring in the helicopters.
    They did all this in 4 weeks.
        Actually, when I saw the material there, I thought the
    material had come by ship. Then I found out they flew in all
    that stuff. To me, that is just an awesome show of force and
    power, as well as all of the support that is necessary to
    accomplish something like that, so I congratulate you for that
    phase of the operations under very, very tough conditions.
        The Apache helicopter pilots I believe are getting the
    training they need. I agreed with their commander. A lot of
    questions were asked about the two Apaches that were lost, but
    as one of the commanders said, he does not want to send any of
    his men into battle unless they are totally and fully trained.
    It is very difficult terrain, and I agreed with him.
        I remembered when I was in after-flight training, after I
    got my wings, and I was in training. I remember, we lost a
    couple of people in training, too, because you want to train
    for the real thing, and so you push the envelope, and things
    like that are going to happen.
        But I believe they are getting the best possible training
    under the most adverse of all circumstances, and I agree with
    that process and the procedure to make sure they are fully and
    totally trained to the nth degree before we ever ask them to go
    into battle with the Apaches.

                            Unmanned aerial vehicles

        So again, I just want to congratulate you on a job well
    done thus far. You mentioned something about the Hunters and
    the Predators. Maybe not in this forum but in another forum, I
    would like to know whether or not you have enough, and what the
    basis of that program is. Again, I am a believer in these
    programs now. I am a real firm believer that we need more of
    these. The eyes and the intelligence that these provide us is
    just immeasurable.
        I do not know if you have ever seen what these Hunters can
    do, and what they can do with their optics, and how they can
    pinpoint targets and call the fire power in, and without
    risking anybody.
        They have shot down a couple of them, but you are not
    losing any personnel, but what they are capable of, their
    capabilities, they are just amazing, and so I am just hopeful
    that we have the wherewithal to keep the Hunters and the
    Predators in the air, and that we have enough, and we have
    enough backup, and we have enough people who know how to
    operate them. Can you reassure me, General and Mr. Secretary,
    that that is the case, that we are not lacking for those
    aircraft?
        General Reimer. Senator, may I say first of all, thank you
    for two reasons. One, for going over there and visiting the
    troops. That means an awful lot to them, and they really
    appreciate that. Second, thank you for sharing your experience.
    I was there about a week ago and earlier also. My view is the
    same as yours, and this is not a story that is understood by a
    lot of people because they say, ``Why is the Army so slow
    getting there?'' They have not seen the conditions. You have to
    see it to believe it. That is an amazing accomplishment.
        And I looked those young warrant officers in the eyes, as
    you did, and they are ready to go. It is a matter of whether or
    not the conditions require their commitment or their
    deployment.
        In terms of the UAV's, we have enough Hunters over there to
    do what they are being asked to do. Our issue is one of
    sustaining them for a longer period of time. But the bigger
    issue is the need for a tactical UAV in the Army, and that is
    the one we are addressing.
        We have a program in the budget to bring on the tactical
    UAV so that we can have this capability full-time, not only for
    Kosovo but wherever we have our people. Deployed, it does give
    us the capability of looking over the hill without putting
    soldiers at risk, and it does provide great intelligence, as
    you indicated.
        Senator Stevens. Would the Senator yield there?
        Senator Harkin. Sure.
        Senator Stevens. You know, I am an Air Force background and
    so is the Senator, but why is this problem between the two
    services over these UAV's? The Hunters and the Predators have--
    they function together, as I understand it, and we saw the Air
    Force operating them for you, but why can't we get them
    deployed to the Army?
        General Reimer. Well, I think they are supporting the Army,
    Mr. Chairman. The tactical UAV is the Hunter. The Predator is
    the medium altitude UAV. They provide two different
    capabilities and the Predator has a longer dwell time, but they
    both support all of the systems. They are funneled through the
    intelligence system and end up supporting the Task Force Hawk,
    for example. As I indicated, Task Force Hawk has access to all
    of that.
        Senator Stevens. We found they were waiting for the
    Predators. They were still here waiting for some manual. Has
    that been corrected?
        General Reimer. Waiting?
        Senator Stevens. We were told they were waiting for a
    manual before they sent over the Predators. Have the Predators
    arrived now?
        General Reimer. The Predators and Hunters are over there
    flying.
        Senator Stevens. It was a very limited number when we were
    there.
        General Reimer. Well, it may still be a limited number. I
    am not sure of the exact numbers, but I do know the Predator is
    flying over there.
        Senator Stevens. Well, I am with the Senator. I believe we
    should just have a maximum utilization of that new technology.
    It is absolute protection for pilots to know who is out there
    and where they are going in that kind of country, which is sort
    of like China. I remember China, and wish to God we had had
    UAV's. We should have them over there in great numbers.
        General Reimer. My staff will tell you, Mr. Chairman, I am
    really frustrated about our ability to get the tactical UAV to
    work properly over there. I think the Hunter is demonstrating
    the capabilities. We just have to institutionalize it within
    the military.
        Senator Harkin. I appreciate what the chairman said. I did
    not ask the question then, and if you cannot say now, you
    cannot say in an open meeting, but I want to know, do we have
    enough Hunters? Do we have enough? I mean, obviously, we are
    going to lose some.
        They are not that expensive in the scheme of things, but
    the intelligence and what they are capable of doing in real
    time fire power is amazing. If you really want to strike fear
    and terror in the hearts of the Serb soldiers, the Hunters can
    do it.
        General Reimer. The answer, I think, is that given the
    mission that we have right now, we have enough Hunters. If the
    initiative expands, then we will be very short on Hunters.
        Senator Stevens. I agree with the Senator that the use of
    those, there ought to be as many of them up there--I would like
    to see them use their hand-held weapons on Predators and
    Hunters. That is cost-effective for us, though, but they ought
    to be out there, and they ought to be out there now, and some
    of them are still in warehouses, General.
        Senator Harkin. If that is the case, we ought to get them
    out of there.
        General Reimer. I will check on the Predator. We have some
    Hunters back there, but they have enough to do with what they
    have been tasked to do over in Skopje.
        Senator Harkin. Especially now, when we have another month,
    and the weather is getting better over there, so now these
    things can really be used to their maximum effectiveness. I
    would like to look into this more and just make sure, and I do
    want to get more fully briefed on the difference.
        I know only a little bit about the difference between the
    Predator and the Hunter. I know more about the Hunter. I do not
    know so much about the Predator. I have got to get more up to
    speed on that, but it seems to me from what I saw that the
    Hunter is what we need over there.
        I do not know if I am wrong or not. I could be wrong, but
    that is just----
        Senator Stevens. It depends upon the range and altitude.
        General Reimer. Pardon me?
        Senator Stevens. It depends upon the range and altitude.
        General Reimer. It does.
        Senator Stevens. The Predator can stay out longer, and the
    Hunter is lower level, more tactical short-range.

                  African American military museum or memorial

        Senator Harkin. That I understand, but it seems to me
    that--well, anyway, we will get into that some other time.
        Let me get to another thing here. Mr. Chairman, I guess
    about a week ago--I was not here, but there was a man from Des
    Moines by the name of Robert Morris that came and testified in
    your open hearing, and I would like to describe a little bit
    about this for both of you, and again for the chairman.
        The first U.S. Army Officer Candidate School for African
    American soldiers was established, believe it or not, in Des
    Moines, Iowa, at Fort Des Moines in 1917. Many of the 639
    officers who graduated went on to lead the all-black 92nd and
    93rd divisions in France. They came back to America, and many
    of them became leaders in the battle for racial equality in our
    Nation.
        One of those was Lieutenant Morris, who came back to Des
    Moines and started a newspaper and it became one of the larger
    African American newspapers anywhere in the country, and his
    whole family went on to become lawyers, very distinguished
    citizens of our country.
        Well, one of his grandchildren is spearheading this
    project, and they have put together a board that is called the
    Fort Des Moines Black Officers Memorial, Incorporated. The
    building in which World War I officers trained, believe it or
    not, is still standing, barely. The roof is leaking and the
    windows are gone, and the Iowa winters are pretty harsh.
        Well, Iowa veterans, community leaders, leaders in the
    African American community, have pledged substantial support
    for establishing a permanent museum at this original site. The
    Department of Defense's (DOD's) support would represent the
    first substantial contribution by the DOD in support of a large
    African American military museum or memorial, and so I guess--
    and they have got a board set up of a lot of distinguished
    people, and I guess--I do not know if you are aware of this or
    not.
        I hope you become more aware of it, Mr. Secretary, and I
    would like to ask if the Army could provide some support for
    repairing and refurbishing the facilities and the associated
    grounds. Senator Grassley, Kerrey and I had asked for $2
    million to help start repairing this facility. I know you have
    got a lot of demands and I think this is a very important part
    of our history.
        Senator Stevens. He committed when he was here to look into
    that. He has got a very good plan, Senator.
        Senator Harkin. Well, that was Mr. Morris from Des Moines.
        Senator Stevens. Right.
        Senator Harkin. He does have a good plan, and I guess I
    just want to raise the issue here to see if perhaps we can find
    some support from DOD. Maybe not Army, but a DOD umbrella-type
    thing, because the building really ought to be preserved, so I
    would hope you would look into that, Mr. Secretary.
        Mr. Caldera. Will do.

                              Rock Island Arsenal

        Senator Harkin. Now, last, Rock Island Arsenal. You may
    know the Army recently announced a few hundred employees of
    Rock Island Arsenal Industrial Operations Center will be let
    go, and I know Senator Durbin is also strongly interested in
    this, and the reason is simple. The Army is not providing any
    work at the arsenal. That was causing concern for me, and the
    Iowa and Illinois delegation. Our story is that Rock Island is
    being denied the opportunity to even compete for the work.
        Most recently, it was denied, I am told, the opportunity to
    even join the competition for the 155 howitzer, despite the
    arsenal's long history of howitzer production. Rock Island was
    never given--again, I am told this--an official reason why it
    was dropped from the program. Rumors are rife at the arsenal
    that the Army pressured the prime contractor so that the
    arsenal was removed from the competition.
        I further understand that the current contractor is facing
    cost overruns and program delays.
        So Mr. Secretary, my request is this. Would you review the
    status of the 155 howitzer contract, and why, if, in fact, Rock
    Island was even denied an opportunity to participate?
        Mr. Caldera. I certainly will, Senator. Clearly, we look
    for competition to help deliver the best value, but the
    arsenals' ability to compete is sometimes impacted by their
    utilization. If they are underutilized, their overhead tends to
    be relatively high so they have a hard time being competitive.
    But, I do not know about this particular situation. I certainly
    will look into the 155 millimeter howitzer competition.
        Senator Harkin. My staff reminded me they are underutilized
    because they cannot compete. If they cannot compete, they are
    not utilized, so they are underutilized.
        Mr. Caldera. Part of what we are trying to do with the
    arsenals is to make sure that they are sized properly in terms
    of staffing so they do not have excess overhead in order to
    preserve that capacity, but preserve it at a level at which
    they can be competitive. So, Army Materiel Command has been
    working to shape those arsenals in a way that makes it
    possible.

                       family of Medium tactical vehicles

        Senator Harkin. I want to find out more about the
    situation. I am sure Senator Durbin has other questions.
        Last and very briefly, and I appreciate the chairman's
    indulgence--now, Mr. Secretary, I think you have got a big
    scandal brewing, and it is already hitting a little bit, and it
    is going to hit even more, and you have really got to look at
    it. In November of 1998, the General Accounting Office (GAO)
    came out with a report on the Army medium trucks. That is,
    FMTV's, the family of medium tactical vehicles. They came out
    with another report in January 1999.
        ABC News--I just say that, and I do not say that they are
    totally accurate, but ABC News did a program on it in February.
    I asked for these GAO reports, I asked for these studies, and
    when you read them, I mean, it is pretty damning.
        When you look at the GAO results, the current contract
    allowed the manufacturer to produce trucks during testing even
    though the trucks were unable to pass testing and demonstrate
    that they met the FMTV performance and reliability,
    maintainability requirements. That is just one issue out of
    many in the GAO reports.
        We had a corrosion problem described in the reports in
    which the Army determined the first 4,955 trucks produced did
    not meet the FMTV's corrosion protection requirements. The
    contract specified the trucks would be designed to prevent
    corrosion from perforating or causing other damage requiring
    repair or replacement during the initial 10 years.
        Corrosion was found in the cabs of trucks less than 3 years
    old that were still awaiting modification at the contractor's
    plant. They had not even been out in the field yet.
        Now, rather than making the contractor replace all of these
    truck cabs at a cost of $31 million, the Army accepted the
    contractor's proposal to repair the corrosion damage and to
    provide a 10-year warranty not to exceed $10 million against
    any future corrosion. This dollar limitation in effect relieved
    the contractor of a potential $21 million liability.
        The Army also subjected one of the trucks to a contract-
    specified corrosion test. It failed, with corrosion being
    detected in 60 areas.
        Now, this is not a small item. This is a $15 billion
    program that is going to go to the year 2022, I believe, and
    yet the first 10 years, that first 10 years is now completed
    and I, quite frankly, after getting these GAO reports, I really
    do not see much happening at your level to really look into
    this, and to find out whether or not this contractor ought to
    be rewarded with another, what, 10,000 trucks. After all of
    this we are going to say, well, that is OK, you are going to
    get another 10,000 trucks.
        Mr. Caldera. Well, it certainly is receiving attention both
    at the Army and at OSD through the Under Secretary of Defense
    for Acquisition and Technology. Some of the items that have
    been identified were identified during performance tests
    designed to see if FMTV meets all the specifications and
    requirements, as well as to identify problems. This testing
    allows us to work with the contractor to iron out those
    problems and make sure they are fixed before we go into longer-
    term production.
        We are also developing the second source production models
    in order to look at the economics of introducing some
    competition into the production of the trucks. Our goal is to
    get the best value for the taxpayer if we can develop a second
    source that can more economically produce these trucks. But, we
    certainly are addressing all of the issues that have been
    raised with respect to trucks.
        Some of the comments that have been made about the trucks
    in terms of rollovers are not accurate, and we have tried to
    correct the record. There are some assessments that do need to
    be looked at, but there are other assessments that are not
    really accurate.
        Senator Harkin. Is it true this contractor who had got this
    contract had never made trucks for the Army?
        Mr. Caldera. They had not made trucks for the Army before.
    They had been involved in industrial production. They did not
    produce trucks; they produced agriculture and other industrial
    vehicles.
        Senator Harkin. I have information the marines have gone to
    a second contractor for its medium trucks. Is that true?
        Mr. Caldera. I do not know.
        Senator Harkin. Well, I will just tell you, these GAO
    reports and everything we have looked at here, the cost per
    truck rose 74 percent in one year, from $142,000 per truck to
    $251,000 per truck. Every time I look at that----
        Mr. Caldera. Some of those cost increases, though, reflect
    a better product. That is, we increased the capabilities that
    we asked them to put into the truck in terms of----
        Senator Harkin. Do not go down that road, Mr. Secretary, a
    better truck, and you are finding corrosion on a truck that has
    not even been out in the field yet and the contract specified
    10 years corrosion-free. They did one test on one truck, found
    60 corrosion areas in one truck, and we are getting a better
    product? I do not think so. I do not think so.
        I am going to keep on this, because I will tell you--and I
    hope you are going to keep on it, Mr. Secretary, because I am
    telling you, it is going to hit, and it is going to start
    hitting hard, and if they are going to be rewarded with 10,000
    more trucks to this contractor after the shoddy business that
    they have done in the past, something is wrong, and I do not
    know where it is all leading, but this truck program is
    important.
        It is important to the troops that are going to be fighting
    the future wars, and I will be damned if I want to have trucks
    that are going to be corroding and falling apart, windows
    shattering when they slam the doors. This is a fact. This is in
    the GAO report. Do not take my word for it. Is that the kind of
    trucks we are going to put our troops in, in the battlefield? I
    do not think so.
        Anyway, I am really upset about this one.
        Thanks, Mr. Chairman.
        Senator Stevens. Senator Durbin.
        Senator Durbin. Thank you, Mr. Chairman. General Reimer,
    Mr. Secretary, thank you for joining us.
        First, I would like to thank Under Secretary Bernie
    Rostker, who has been working with us on the Joliet Arsenal. We
    have an exciting plan there, and I want to tell you that Mr.
    Rostker and the Army have been very cooperative in moving us
    along. I think it will be a good example of the kind of
    decommissioning of a facility that ultimately is going to
    benefit the surrounding community, so thank you very much on
    that.

                                    Arsenals

        If I could follow through on Senator Harkin's question
    about the Rock Island Arsenal, Secretary, could you just tell
    me what your vision is about the future of facilities like the
    Rock Island Arsenal?
        Mr. Caldera. Well, I think we need to maintain the
    capability in our arsenals that exist there today. That is
    important to the Nation's future production of armaments that
    are important tools for our soldiers. We have had excess
    capacity in our arsenals, and some of that excess capacity is
    being worked down as we try to reshape the arsenals to be sure
    that they can be competitive and that they have enough work to
    be cost-effective while maintaining their capacity. We want to
    ensure we get the benefits of competition and outsourcing to
    the private sector when it makes sense to do so.
        Senator Durbin. So if the arsenal facility can be
    competitive, price-competitive with the private sector, do you
    feel they should have an equal chance to bid on work?
        Mr. Caldera. Certainly, absolutely.

                              Rock Island Arsenal

        Senator Durbin. I think that is the point Senator Harkin
    was making, at least in the instance with the howitzer, the
    feeling is that that was not the case for the Rock Island
    Arsenal. Over a period of time, for whatever reason, the Army
    has been moving in the opposite direction, trying to find
    reasons not to allow the arsenal and its facilities to do the
    work, or even compete for the work; that seems shortsighted.
        Another thing that concerns me and Senator Harkin related
    to it was this question of moving jobs away from the arsenal. I
    have to believe that this investment we have in places like the
    Rock Island Arsenal has got to be cost-competitive with going
    into the private sector and trying to find comparable space to
    locate individuals.
        We own this land. It has to be price competitive for us to
    keep as many facilities as we can, realistically, at these
    locations. The suggestion of moving the civilian personnel
    operations centers and 180 jobs away from the arsenal, and then
    for the Army and taxpayers to pay in the private sector for
    30,000 square feet of office space somewhere else does not
    strike me as a very thoughtful decision. Are you familiar with
    that at all?
        Mr. Caldera. I am familiar with that. In fact, where we
    can, we have actually been trying to move from where we are
    paying the private sector onto military bases, to try to get
    out of those situations. I share your concerns, and we will
    look into it.

                 Junior Reserve Officer Training Corps (JROTC)

        Senator Durbin. If you would, I would appreciate it.
        Can I mention two somewhat local issues and, if I can, one
    that is much more national, or international in scope. The
    Chicago public school system has a junior ROTC program which is
    a roaring success, bringing 7,500 cadets into this program in
    all four branches of the Armed Services.
        These kids have turned out to be much better students. I
    have seen them, gone to the high schools and seen the kids in
    uniform. Their attendance is better, their grades are better,
    they have fewer problems, and they really do start thinking
    about the possibility of being involved in serving our country
    in the Armed Forces.
        What steps is the Army taking, if you know, with local
    sponsors to expand junior ROTC?
        Mr. Caldera. We actually have the largest junior ROTC
    (JROTC) program of all the services and a waiting list of
    schools that want our program. We are expanding the JROTC
    program by putting more dollars into it and offering the
    program to more schools. In particular, we are working in the
    Chicago area to increase the number of schools that are able to
    offer the junior ROTC program. It is a great program.
        I have had a chance to visit several different schools
    around the country. JROTC has a great dual pay-off in terms of
    better citizenship among students and some recruitment for us
    when they come into the enlisted ranks and the officer
    accession programs. So, I share your enthusiasm and support for
    JROTC. Within our resource-constrained environment, we have
    found additional resources for the JROTC program.

                          Montgomery GI bill benefits

        Senator Durbin. I want to follow up. Senator Stevens made
    reference to the Montgomery GI bill, and our old friend Sunny
    Montgomery's efforts, and I am sure that has a lot to do with
    enlistment.
        I have a high school intern in my office in Springfield,
    Illinois now who is going to be joining the Army very shortly,
    and I asked him, why did you want to do that? Well, he said, my
    dad was in the Army. He still is in the Reserves. He served in
    Vietnam. I have always thought about the Army. But, he said,
    the GI bill is really what I like, the idea that when it is all
    over I can go to college and have some money to do it. So that
    has a lot to do with it.
        I think the other side of that equation is just as we have
    mentioned here, to get young people at an early age to consider
    the possibility of military service, and so I encourage that,
    and particularly would ask if you can take a look--we have
    Bronzeville Academy, the Chicago Military Academy at
    Bronzeville, where we are working with the junior ROTC. I would
    hope you can take a look at where they are on the waiting list.

                             School of the Americas

        So those are the parochial, local things you would expect
    when you come to these meetings. Now to go to one much more
    controversial, and almost international in scope. I have been
    voting to close the School of the Americas at Fort Benning
    every year I have had an opportunity, and it has not been
    offered as an amendment in the Senate. I am going to offer it
    this time, this year.
        I have about a dozen cosponsors, people who feel, as I do,
    that the Army should have stepped back years ago, a decade ago,
    and decided that whatever benefits were derived from the School
    of the Americas, that certainly should be reassessed in terms
    of today's world.
        The countries of Eastern Europe as they emerged from the
    Cold War took a brand new look at the world. Poland decided to
    push away all that Soviet and Russian thinking and instead look
    to the West, looked to the North Atlantic Treaty Organization
    (NATO). So many stories like that in country after country
    suggested a reassessment of their priorities and their vision.
        The School of the Americas was established and functioned
    during a very controversial period in the history of America
    and Central America. I am certain that there were men and women
    trained at that facility who were professional military, who
    benefited from that experience and went back and did good
    things for their countries. I will concede that point.
        I would hope that the Army would concede that there were
    some things done at the School of the Americas which we are not
    proud of. Some of the training manuals that were used, that the
    Army ultimately conceded did not reflect American foreign
    policy, manuals that envisioned torture and things that were
    just inconsistent with American values, were scrapped after
    they were discovered.
        And if you go through the list of graduates of the Army
    School of the Americas, there are certain classes where you
    would never want to have a reunion, because they included--and
    I read it on the floor of the United States Senate--page after
    page after page of those who matriculated through the Army
    School of the Americas only to return to their home countries
    and to be involved in atrocities which we would never
    countenance, never, neither you, Mr. Secretary, nor any of the
    men and women in uniform behind you.
        It strikes me that there is a compelling case here for the
    Army to step away from that model, that name, that history, and
    to say, if they are to have a future role in training the
    military in any country, that they come to the United States
    and pick up the skill, that it should be in a different
    context, the context of the 21st century and not the darkest
    days of the 20th century. I am going to offer that amendment.
        When I speak to my friends in uniform, I just marvel at the
    fact that they have not seized an opportunity to make a break,
    to close this school, and to say, if we are going to have one
    in the future, it is going to be dedicated to much different
    principles.
        Coca-Cola realized that New Coke was not going to make it,
    and they realized it very quickly, but for some reason there is
    just a feeling in the Army that they cannot concede that
    anything might have gone wrong there. What is your thinking?
        Mr. Caldera. Senator, I have to tell you, I think actually
    the School of the Americas functions in the way you would want
    it to function. First of all, it is a U.S. Army school and,
    therefore, is run as a U.S. Army school. It reflects the same
    values and principles we expect of all of our U.S. Army
    soldiers. We do not teach U.S. Army soldiers to violate human
    rights, and we do not teach the soldiers of any other nation to
    do that.
        Today, the School of the Americas is a very important tool
    for emphasizing those lessons to the militaries of Central
    America and South America. Their countries have legitimate
    security concerns, such as patrolling their borders against
    drug traffickers, and in the past they faced insurgencies.
        I think our Army officers who were there as advisors will
    tell you they are very proud of the fact that they helped those
    governments work through periods of insurgency and turmoil,
    where much of the Cold War was being fought out in Latin
    America. Those countries today are democracies, are turning
    toward market-based economies, and want to be closer to the
    United States and to emulate our country and our principles.
        So in addition to teaching military courses there, we also
    have a very significant block of instruction for protection of
    human rights, strengthening democracy, and the role of civilian
    control. They are also taught in military subjects like
    demining--to get these mines out of the countries that were
    left by wars in the past--and how to deal with disaster
    assistance; important topics for how they see their own
    militaries changing in this post-Cold War era to be more
    relevant in supporting their countries.
        I think the School of the Americas plays a very important
    role in U.S. foreign policy by engaging the countries of
    Central America and South America to be more like the United
    States in terms of what it means to have a professional
    military in service to a democracy.
        In addition, the school has been investigated several
    different times and has a very distinguished board of visitors
    that allows human rights leaders, positions for clergy, and
    others to be involved in supervising and scrutinizing the
    instruction at the school.
        Going back over what was used in the past in terms of
    manuals and instruction books, the things that were found were
    unauthorized materials.
        Now, there have been some 60,000 graduates of the School of
    the Americas, and clearly we cannot be responsible for the
    actions of the graduates any more than any other educational
    institution is for all of the actions of all of its graduates.
        They are regrettable, and I think that if you go back and
    go through the lessons of it, where there were countries that
    violated human rights, the U.S. Government responded by
    removing military assistance, by removing advisors, by refusing
    to deal with those countries, and one of the chief messages our
    military advisors and our soldiers there had was, if they
    expect support from the United States for their government,
    they have to act like a professional military, and they have to
    protect the rights of the people in their country.
        So I actually think it is very important for us to now,
    today, continue to have this school and to go forward engaging
    the militaries and the leaders of these countries in order to
    support and strengthen the appropriate role of the military in
    a democracy.
        Now, let me add as a final note that we have other schools
    where we have foreign officers. They can come to the War
    College, they can come to the Command and General Staff School,
    but they come in small numbers, and those schools are taught in
    English language subjects.
        The School of the Americas is an opportunity to train and
    teach many more students in their native Spanish language, and
    for our country to have a leadership role in advising those
    militaries as they develop. One of the most important things
    that happens at the School of the Americas is that they come to
    Fort Benning, Georgia, where they are welcomed by the local
    community and they develop personal relationships with
    Americans who invite them into their homes for meals, to meet
    their families, and to develop friendships.
        And they get to see what our country and our form of
    government and democracy is all about. They go back wanting the
    same things for their country, and it is a terrific interaction
    between our soldiers and the soldiers of those countries; one
    that our country would be poorer for if we did not have that
    school.
        Senator Durbin. Mr. Secretary, we have no quarrel over what
    you have set out as the goal of this training program, and I
    think, as I have traveled around the world, and have seen the
    changes which we have been fortunate enough to witness in our
    lifetime, that the United States has an important lesson that
    it can teach in terms of civilian control and a responsible
    military.
        I hope you will acknowledge that in the past that has not
    been the case in some of these countries. The army has been a
    force of oppression against efforts by the people to bring true
    democracies to their countries. Those dictators who sought
    power did not stop first at the equivalent of the American
    Civil Liberties Union for an endorsement. They stopped at their
    army headquarters in their local countries, and when they came
    to power, it was the army that forced their power on the people
    to stop democracy.
        Too many of those people in the army were graduates of the
    School of the Americas of years gone by. When I read the pages
    of people who have come out of that school, these are not just
    occasional mistakes, these are leaders in foreign countries who
    have graduated from the School of the Americas and were
    involved in the most brutal repressions against indigenous
    populations, against the Catholic clergy and nuns, things that
    frankly you and I would never countenance as having the
    approval of the United States.
        It is beyond me that the Army cannot understand that there
    has been such a generational change in thinking about Central
    America that they should make a clear break with the past, not
    just in terms of curriculum, but in terms of the kind of change
    where people would say, they got it, they understand it, it is
    a new world.
        And I think that is why there is such resistance to the
    continuation of the School of the Americas. The votes in the
    House of Representatives are always within a handful of votes
    of closing this facility. I cannot image, as Secretary of the
    Army, that you have missed that, and in the Senate it will be
    tougher.
        But the fact is that there is a continued drum beat against
    this, and why the Army has not stepped back and said, we need
    to break clean from the past, to serve the goals you have
    articulated in a way that we can be proud of in the future, is
    beyond me. It just strikes me that that is one of the things,
    as Secretary, that you could accomplish, and I hope you will
    consider.
        I thank you very much for your testimony, and thank you,
    General.
        General Reimer. Senator, may I say something on that,
    because I have been involved with the military in that area
    since 1974. I have seen a great growth in terms of
    professionalism of that military force, and I would argue that
    one of the reasons you have democracies in all of those
    countries save one, Cuba, is a little because of the military
    commitment we have made in that area, not only the School of
    the Americas, but also the mobile training teams we have had
    working with them.
        And as I deal with their military, I know they are very
    professional. I also know they appreciate the School of the
    Americas in terms of the training that their people receive.
        Yes, there have been people who have gone there who have
    not turned out right, and my guess is that any institution in
    the world could make the same statement, and it would probably
    be true, but I do not think that we should back off from our
    commitment to make them more professional.
        If the School of the Americas contributed to that
    professionalism, then I do not see why we should have to close
    it. I would invite you to come there and look at the School of
    the Americas and let us tell you what we are doing there. If
    you find something wrong, we are more than willing to change,
    if we are doing something wrong. We have made that commitment
    to all of the critics, and generally when we get them to come
    there, they take a little different view of the situation.
        Senator Durbin. In fairness, General, I received that
    invitation, and it is my fault I have not been there yet, and I
    hope to visit it to see it first-hand. I owe that to you and to
    the Army, and I do concede the point that you made. In the
    countries where the army becomes professional and does not
    become a political tool and is not dedicated to repression,
    these are the countries where you see real emerging
    democracies, the positive contributions by the military that we
    value so much in the United States.
        But I hope that you can also step back and concede that
    some of these operations in the past, the dictators and
    repression, have been accomplished through misuse of military
    force. Many of these same people who supposedly came through
    this training learned little or nothing and, as a consequence,
    there are people in these countries who do not view the
    military in a very positive light, and do not think much of us
    for what we did in the years gone by.
        And so I hope that we can find some way to resolve this.
    This should be resolved. There ought to be a way to combine
    military professionalism and the sensitivity for human rights,
    and a dedication to a new approach that suggests that it is a
    new day for Central America, South America, and for the United
    States. I would like to work with you on that.
        Thanks, Mr. Secretary, and thank you, General. Thank you,
    Mr. Chairman.
        Senator Stevens. Thank you very much.
        We are discussing what to do with your UAV's, General.
        General Reimer. Could you share it with me, Mr. Chairman?
    [Laughter.]
        Senator Stevens. We would be glad to chat with you about
    it. I think we have some ideas about them. I still believe it
    is cost-effective to have those things out there to attract, if
    for nothing else to attract those hand-held weapons.
        This is going to be our last meeting. We want to thank you
    very much for your presentation. We are going to mark up this
    bill starting Monday, and hopefully we will have it ready to go
    to the floor, if things break right on the floor, next week,
    before the Memorial Day recess.

                         Additional committee questions

        Mr. Secretary, it is a pleasure to start working with you,
    and General, it has been an honor, a downright privilege to
    work with you. I do thank you for all you have done. I think I
    pressed you a little hard on the Guard to begin with, but you
    took that ball and ran right around me.
        [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 Louis Caldera
                Questions Submitted by Senator Richard C. Shelby
                      theater and national missile defense
        Question. Secretary Caldera, what role do you envision the Army
    playing in the development and fielding of Theater and National Missile
    Defense systems?
        Answer. The Army has, and will continue to have, a critical role in
    the development and fielding of Theater Missile Defense (TMD) and
    National Missile Defense (NMD) systems.
        In the area of TMD, the Army has the Nation's only fielded, TMD
    (active defense) capable system, Patriot. In fiscal year 2001, we will
    achieve First Unit Equipped (FUE) for Patriot Advanced Capability-3
    which, as our lower tier program with its proven hit-to-kill
    capability, will protect our deployed forces from short-range theater
    ballistic missile threats, including those armed with weapons of mass
    destruction. Additionally, the Army's upper tier program, Theater High
    Altitude Area Defense, designed to defeat both short- and medium-range
    ballistic missile threats, is scheduled for an FUE of fiscal year 2007.
    A battalion of soldiers is on the ground, participating in development
    and testing, and is trained and ready to deploy upon receipt of
    operational missiles. The Army is also directly involved in the
    international cooperative program, the Medium Extended Air Defense
    System. Finally, the Army is developing an elevated sensor, the Joint
    Land Attack Cruise Missile Defense Elevated Netted Sensor System, which
    will be of great benefit to the entire TMD mission area.
        In the area of NMD, the Army, in conjunction with the Ballistic
    Missile Defense Organization and the NMD Joint Program Office, is
    developing the ground-based elements of the current NMD system. These
    elements include the X-band radars, the interceptors, the in-flight
    interceptor communications system, and the site battle management
    command, control, communications, computers, and intelligence. Army
    National Guard soldiers would provide full time manning of the system.
                      enhanced fiber optic guided missile
        Question. Kosovo has demonstrated the need for a precision weapon,
    like Enhanced Fiber Optic Guided Missile (EFOGM), which minimizes the
    risk of fratricide and collateral damage while enabling the Army to
    attack high value targets at long range. EFOGM has demonstrated success
    in five consecutive flight tests, including hitting two out of two
    targets. If Congress funds EFOGM in fiscal year 2000, will the Army
    support the continuance of the program and field the first long range,
    precision strike weapon for light forces?
        Answer. The Army has not budgeted funds for continuing EFOGM beyond
    fiscal year 1999. While EFOGM has several operationally attractive
    capabilities, there are also some significant operational issues with
    the EFOGM technology. Two teams of experts, our independent Operational
    Test Command and the Training and Doctrine Command's (TRADOC's)
    Infantry Center, have recommended against continuing the EFOGM program.
    The TRADOC Light Anti-Tank (LAT) Study, that supports this
    recommendation, consisted of both Northeast and Southwest Asia
    scenarios and a warfighter analysis of doctrine, training, leadership,
    organization, materiel, and soldier with respect to anti-tank systems.
    However, our analysis did not rest solely on the findings in the TRADOC
    LAT study, but also included information gained during the Rapid Force
    Projection Initiative Advanced Concepts Technology Demonstration, as
    well as from field exercises of our light forces at the Combat Training
    Centers. In addition, the Army had a long range weapon system (the
    Apache helicopter equipped with Hellfire II missiles) in place to use
    in Kosovo, had the situation warranted. The Army Staff recommendation
    is consistent with those of the Test Command and the Infantry Center in
    that the Army believes that investment in the precision non-line-of-
    sight capability provided by EFOGM is not justified by unmet
    requirements. Thus, we have chosen not to continue to fund the EFOGM
    program.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                            recruiting and retention
        Question. Mr. Secretary, in your prepared testimony you note that
    the Army missed its recruiting goals in 1998 and in the first quarter
    of fiscal year 1999. Can you give us an update on how you are
    addressing this problem and the results to date?
        Answer. In order to meet the difficult challenge in fiscal year
    1999, we:
      --Implemented a prior service selective reenlistment bonus and break-
            in-service selective reenlistment bonus for an expanded number
            of military occupational specialties (MOSs);
      --Increased the maximum benefit of the combined Montgomery G.I. Bill
            and the Army College Fund to $50,000 from $40,000 and offered
            it to 32 MOSs, an increase from 16 MOSs;
      --Increased the maximum enlistment bonus for three-year term of
            service to $6,000 from $4,000;
      --Implemented $3,000 seasonal bonus from November 1998 to May 1999;
      --Expanded the number of MOSs eligible for the Loan Repayment Program
            to 109 from 78;
      --Expanded job match opportunities for applicants;
      --Accelerated the fielding of the Army Recruiting Information Support
            System; and
      --Expanded the number of MOSs allowing two-year terms of service to
            57 from 32.
        So far, these initiatives have not had the desired effect of
    enabling us to meet the fiscal year 1999 accession mission. At this
    time, we estimate we will miss our fiscal year 1999 accession mission
    by about 6,700 recruits.
                              18-month enlistment
        Question. Mr. Secretary, do you believe it would be cost effective
    to go to an 18-month enlistment for most of your recruits?
        Answer. We believe that anything less than two years service,
    including training time, is too short to recoup the investment in
    training, increases turbulence in an already turbulent force, and
    presents other problems, such as increased accession requirements in
    future years. Our historical data indicate that soldiers with two-year
    terms-of-service leave the service at a higher rate at the end of their
    first enlistment than those with longer enlistments. We anticipate that
    for each 1,000 additional two-year enlistments, we will see an increase
    in future accession and training requirements of 200 soldiers per year.
    If the terms-of-service were 18 months rather than two years, we would
    expect an increased future annual accession and training requirement of
    at least 267 soldiers for each 1,000 18-month enlistments. With a two-
    year enlistment, we get approximately 18 trained man-months from each
    enlistee, after accounting for training and leave time. With an 18-
    month enlistment, we would get approximately 12 trained man-months. So,
    for a 25 percent increase in enlistment length (24 months versus 18
    months), we get a 33 percent increase in utilization (18 months versus
    12 months).
        Question. Secretary Caldera, considering the recruiting and
    retention problems that the Army is facing, do you think the Army
    should look to more innovative approaches, like shortening basic
    enlistments even if 18 months is not the right approach for the bulk of
    your forces?
        Answer. The Army intends to reinvigorate its two-year enlistment
    option, but believes that anything less than two years of service,
    including training time, is too short to recoup the investment in
    training, increases turbulence in an already turbulent force, and
    presents other problems, such as increased accession requirements in
    future years. We believe that the two-year enlistment option may be a
    way to expand the high quality market. We have requested legislative
    changes to allow payment of an enlistment bonus for a two-year term-of-
    service and to remove the military occupational specialty-specific
    limitations on the two-year Army College Fund.
                                  strike force
        Question. Secretary Caldera, what are the resource requirements for
    the Strike Force, and what are you planning on spending on this
    initiative in fiscal years 1999 and 2000?
        Answer. Over the last six months, the Strike Force concept has been
    maturing, with more and more definition of the requirement. The
    Secretary of Defense resourced the Army Experimentation Campaign Plan,
    including the Strike Force concept, at the level identified by the Army
    in the fiscal year 2000 budget request. Based on the information
    available at that time, Strike Force was considered fully funded. The
    funded amount for fiscal year 1999 is $11,600,000. In fiscal year 2000,
    the budgeted amount is $56,300,000. As the Army continues to refine the
    Strike Force concept, including the doctrinal, organizational,
    training, leader development, materiel, and soldier support
    requirements, additional funding requirements may be identified.
                                johnston island
        Question. Secretary Caldera, the Army has been destroying its
    stockpile of chemical weapons at its facility in Johnston Island since
    1985. According to your plans, the total amount to be destroyed at
    Johnston Island is expected to be completed in 2000 and the plant will
    be closed in 2001. Are you still on that timetable?
        Answer. Yes, the Johnston Atoll Chemical Agent Disposal System
    (JACADS) is scheduled to complete disposal operations in late calendar
    year 2000. Since JACADS began destroying its stockpile of chemical
    weapons in June 1990, a significant portion (in excess of 80 percent)
    of the original stockpile located on Johnston Atoll has been safely
    destroyed. Closure planning is actively underway, with participation by
    environmental regulators, other island tenants, and external
    stakeholders, to further define JACADS closure requirements. A
    substantial portion of the closure activities will be completed during
    calendar year 2001; however, completion of final closure activities,
    including contract closeout actions, will continue into the first half
    of calendar year 2002.
        Question. Mr. Secretary, almost every year there are those who want
    to revisit the issue of where chemical munitions should be destroyed.
    They want to consider whether they should be shipped to existing plants
    instead of being destroyed where they have been stored. All your
    experts agree that the most dangerous thing to do with chemical
    munitions is to ship them. Do you know of any reason why this debate
    should be reopened?
        Answer. Currently, approximately 90 percent of the United States
    chemical stockpile is under contract for destruction on-site. There is
    no need to open the transportation issue for these sites. However,
    destruction of the other 10 percent, which is stored in Pueblo,
    Colorado, and Blue Grass, Kentucky, has been delayed by legislation.
    Should destruction prove infeasible or impossible at these sites,
    transportation of this material to sites where destruction has already
    begun, and the legislative changes that would enable such
    transportation, should be carefully considered.
                                     ______

                  Questions Submitted to Gen. Dennis J. Reimer
                  Questions Submitted by Senator Thad Cochran
                enhanced position location and reporting system
        Question. General Reimer, I understand that the Enhanced Position
    Location and Report System (EPLRS) provides secure, jam-resistant, near
    real-time data communications, and that it is the data backbone for
    situational awareness and tactical internet operations for Force XXI
    activities. I've been informed that a recent review revealed a 60
    percent increase in the Army's data radio requirements.
        What will be the operational impact if this increased requirement
    is not met?
        Answer. Our current requirement is 8,157 EPLRS. The Army procured
    5,015 EPLRS prior to fiscal year 1999. The remaining 3,142 systems are
    required to resource the First Digitized Corps and Force Package One
    first-to-fight divisions and meet data radio requirements for the
    Avenger Slew-to-Cue (STC) program. Failure to procure the remainder of
    the EPLRS requirement jeopardizes ongoing digitization initiatives and
    our ability to resource first-to-fight units with position navigation
    and anti-fratricide capability. Avenger STC, a critical air defense
    system, is designed to operate with EPLRS radios, and the system would
    be at risk without the radios.
        Question. How would an accelerated rate of procurement of EPLRS
    impact this situation?
        Answer. Procuring the remaining EPLRS at an accelerated rate
    (fiscal year 1999-2001) versus the current budgeted program (fiscal
    year 1999-2004) will afford a cost avoidance of $53 million in the out-
    years and will accelerate fielding of EPLRS by three years.
                         first force instrumented range
        Question. The Deployable Force-on-Force Instrumented Range System
    (DFIRST), a new global positioning system-based maneuver training
    instrumentation system for mounted maneuver training exercises, showed
    significant readiness benefits for Army National Guard (ARNG) home
    station training during the DARPA/SIMITAR evaluation in 1996 by the
    Idaho Army National Guard. The system's increased training safety
    benefit through constant identification of friendly and adversary
    forces led to its selection as the instrumentation system for the
    Secretary of Defense's All Service Combat Identification Evaluation
    Test.
        The need for a mounted maneuver instrumentation system is supported
    by the ARNG-commissioned independent study conducted by the ARIST
    Corporation that assessed the ARNG Home Station Instrumentation (HIS)
    needs to complement the Active Army's HIS goals. The study identified a
    near term need for six ARNG training sites to be developed into
    complete HIS sites at a rate of two per year.
        It is my understanding that if funding was available, the first two
    ARNG training sites to receive the DFIRST system would be Fort Pickett,
    Virginia, and Camp Shelby, Mississippi.
        General Reimer, will Camp Shelby, Mississippi, and Fort Pickett,
    Virginia, be the first two sites to receive the DFIRST system if
    funding is available?
        Answer. Yes. Camp Shelby, Mississippi, and Fort Pickett, Virginia,
    have been determined to provide the best force-on-force mounted combat
    maneuver training area for utilizing DFIRST for the Army National
    Guard.
                                     ______

                Questions Submitted by Senator Richard C. Shelby
                                    patriot
        Question. General Reimer, I have a question concerning the Army's
    plan to improve the Patriot Weapon system.
        Could you clarify the Army's position on the need for the Patriot
    Anti-Cruise Missile (PACM) as a complement to PAC-3?
        When do you foresee continuing PAC-3 testing?
        Answer. The Army has no requirement or plan for procurement of the
    PACM missile. The centerpiece of the Army's Theater Missile Defense
    modernization plan is to deploy the Patriot Advanced Capability-3 (PAC-
    3) weapon system as soon as possible, not PACM.
        PAC-3 testing is currently underway. The Army is prepared to
    conduct its next PAC-3 flight test as soon as conditions at White Sands
    Missile Range (WSMR) permit. Due to extremely dry conditions in the
    target booster drop zone, WSMR has placed the flight test on hold due
    to fire hazard.
                                 longbow apache
        Question. General Reimer, the Army's Apache helicopter has been in
    the news almost nightly since the Kosovo crisis began. I understand
    that modernization of the Army's helicopter fleet is a big issue to the
    future of Army Aviation. I would like to hear your assessment of the
    modernization process in general, and more specifically, please comment
    upon the implications of the Apache Longbow ``530'' Plan.
        Answer. The Army remains strongly committed to fielding a
    modernized aviation force. Although not funded at optimum levels, the
    Army has been able to fund these major aviation programs at a level
    sufficient to meet our wartime requirements. The Longbow Apache ``530''
    Plan represents a unique aviation modernization challenge. At present
    funding levels, the Army cannot afford to procure two major aviation
    systems simultaneously, Longbow Apache and Comanche. The Apache is a
    proven system and, with the Longbow improvements, it will continue to
    provide the Army an attack helicopter overmatch well into the future.
    Tactical reconnaissance and security remains the Army's priority in
    aviation modernization. Comanche will fill the reconnaissance
    requirement and together with the Longbow Apache, provide the Army with
    a tremendously lethal fighting force. The ``530'' Plan provides the
    Army flexibility to husband resources, while maintaining the Comanche
    fielding schedule.
        Question. If Air Guard and Reserve Apache units are required to
    operate the ``A'' model, will those units be as useful to our Unified
    Combat Commands as units equipped with Apache ``D'' models?
        Answer. The AH-64D Longbow is a more capable aircraft and will be
    fielded to both the Active and Reserve Component attack helicopter
    battalions. Several Strategic Reserve battalions equipped with AH-1s
    will be given the AH-64As. As Comanche is fielded to the attack
    battalions, Longbow Apaches will cascade and replace the Strategic
    Reserve AH-64As. In the interim, the AH-64A will continue to be
    relevant and useful well into the next decade.
        Question. If the Apache fleet is split, what effect will there be
    on maintenance, training and logistics in Army Aviation?
        Answer. As the Army fields the Longbow Apache under the ``530''
    Plan, split fleet operations will be unavoidable out to at least fiscal
    year 2006. Approximately 70 percent of the Longbow requires the same
    logistics and maintenance efforts as an ``A'' model. The Army is
    considering an innovative proposal known as Apache Prime Vendor Support
    that will mitigate the split fleet logistics impact on the Army. The
    Army is in the process of reviewing its aviation modernization plan.
    The plan will consider the impact of maintaining dual training base and
    the logistical impact of maintaining unique ``A'' model-only parts.
                                     ______

               Question Submitted by Senator Kay Bailey Hutchison
                                    patriot
        Question. General Reimer, my question concerns the Army's plan to
    improve the Patriot Weapon System. My recollection of the Army's plan
    to upgrade Patriot is to improve its anti-missile capability with one
    new missile, the Patriot Advanced Capability-3 (PAC-3) missile. I'm
    also aware that we funded a contingency program, the Patriot Anti-
    Cruise Missile (PACM) upgrade program, as a hedge in case the advanced
    cruise missile threat emerged before we could deploy an adequate
    inventory of PAC-3 missiles.
        I read your recent report documenting the results of the PACM
    evaluation. In the letter that accompanied the PACM report, Army
    Assistant Secretary Hoeper stated that the ``Army is confident that the
    * * * PAC-3 Missile will be capable against the entire threat spectrum
    including Tactical Ballistic Missiles armed with Weapons of Mass
    Destruction warheads.''
        Recently, our Senate Armed Services Committee recommended in their
    markup of the Defense Authorization bill that an additional $60 million
    be added to initiate Low Rate Initial Production of the PACM. So, I am
    a little confused. Now that you have recently concluded your first
    successful intercept with the PAC-3 missile, and I understand you will
    soon go for a second intercept when weather permits, would you clarify
    for the committee whether you require two missiles to fulfill your
    Patriot upgrade plans or is it still just one new missile that is
    required, the PAC-3 missile?
        Answer. To clarify any misunderstanding, I want to be clear that
    the centerpiece of our Patriot modernization plan is to deploy the PAC-
    3 missile as soon as possible. The PACM seeker technology demonstration
    program was helpful in our PAC-3 missile risk mitigation effort, but we
    do not plan to deploy any PACM configured missiles at this time. We
    fulfilled our PACM development and test obligations and documented the
    results in the report that you mentioned. I believe we need to focus
    our production priority on deploying PAC-3, the only Patriot missile
    for which the Army has a valid operational requirement, not PACM.
                                     ______

                Questions Submitted by Senator Daniel K. Inouye
                            recruiting and retention
        Question. General Reimer, what actions have been taken or are
    required to man the force?
        Answer. We have increased our enlistment incentives to include
    enlistment bonuses (EB), the Army College Fund (ACF), and the Loan
    Repayment Program (LRP). They are part of a comprehensive package of
    incentives and benefits designed to attract a broad spectrum of high
    quality applicants into hard-to-fill military occupational specialties
    (MOSs). We offer a regular EB in 67 MOSs. We offered a $3,000 seasonal
    bonus for all Armed Forces Qualification Test Score Category (TSC) I-
    IIIA applicants who accessed during the period November 12, 1998, to
    May 31, 1999. We also offered the $3,000 seasonal bonus to TSC IIIB
    applicants who accessed during the period January 26, 1999, to May 31,
    1999. We increased the number of MOSs eligible for the $50,000 combined
    Montgomery GI Bill and ACF incentive from 16 to 32. We also increased
    the lower ACF levels from $20,000 to $26,500 for a two-year term of
    service, from $25,000 to $33,000 for a three-year term, and from
    $30,000 to $40,000 for a four-year or more term in 90 MOSs. We now
    offer the LRP for 109 MOSs.
        We have asked Congress for the authority to offer a 2-year EB and
    to expand the 2-year ACF. In addition, Congress is considering raising
    the maximum EB level to $20,000. All of these are critical in ensuring
    the Army can offer an enlistment incentive package comparable to that
    offered by the private sector and colleges or vocational schools.
        The Army's enlistment incentive program has been effective in
    appealing to the dominant buying motives of most applicants, such as
    money for college. The program is critical in channeling applicants
    into the MOSs in the numbers and at the time they are needed.
                              18-month enlistment
        Question. General Reimer, recently some experts have argued that
    the Army should return to an 18-month enlistment. They contend that
    many young men and women are reluctant to join the military for a
    longer tour. What do you think shorter enlistments would do to
    readiness?
        Answer. Our projections show a short term enlistment option (18
    months) would probably have a slightly adverse effect on readiness. We
    believe anything less than two years of service, including training
    time, is too short and would exacerbate the difficulties we are already
    experiencing in manning the force. Assuming a four-month period of
    initial entry training, the soldier would only be available for 14
    months of operational duty. This would severely limit his distribution
    options. For example, an 18-month enlistee would not be available for
    assignment on a Permanent Change of Station basis to any long tour area
    overseas where the tour length exceeded 14 months (e.g., Alaska,
    Hawaii, Europe, etc.). Consequently, he could be assigned only in the
    continental United States (CONUS) or to dependent-restricted areas
    outside CONUS. Additionally, the additional turbulence, which shorter
    terms of enlistment would foster, would hinder the development of the
    environment of cohesion, continuity, and stability necessary to the
    enhance combat effectiveness of our squads, crews, and teams.
                                  strike force
        Question. General Reimer, in your prepared statement you note that
    the 2nd Armored Cavalry Regiment (ACR) at Fort Polk will be the
    experimental force for your new Strike Force concept. Can you explain
    this concept, and how the 2nd was chosen for this mission?
        Answer. As we have committed forces repeatedly to a wide variety of
    contingencies over the last several years, we have invariably found we
    need to adapt our Cold War force packages to meet the specific
    operational requirements of each contingency. In other words, we
    generally have not been deploying units the way we designed them for
    the Cold War. We have either had to supplement them with other units or
    we have mixed different kinds of units to create the exact capabilities
    appropriate for the mission.
        At the same time, we cannot just discard our Cold War structure
    because we need that conventional capability for potential hot spots
    like Iraq and Korea. For these kinds of operations, it is a superb,
    proven force that comes in unit packages well-designed to address these
    more conventional ``MTW'' threats. Ironically, the features that make
    it so effective as a deterrent to would-be aggressors are also
    precisely the ones that cause them to explore asymmetric ways to
    challenge us.
        Our near-term challenge is thus fairly easy to describe. On the one
    hand, we still need our Cold War force to address potential
    conventional threats. On the other hand, we need a new, more adaptable
    force to address the wide range of other military requirements, such as
    asymmetric threats, but we do not have enough money to build it
    quickly. So, the essential question for us is how do we take our Cold
    War Army and make it adaptable to the challenges of the post-Cold War
    world?
        Our only truly practical alternative is to take our Cold War force
    and make it more adaptive to execute the full range of military
    operations in the post-Cold War world. Because each particular mission
    requires different capabilities and, hence, different force
    requirements, we need a ``converter'' organization that allows us to
    adapt our current Cold War force structure to meet the needs of the
    post-Cold War world. That ``converter'' should allow us the freedom to
    counter mid- to low-range threats while, at the same time, keeping our
    major warfighting headquarters--at corps level--free to address major
    conventional threats, if and when they arise. The Strike Force is well
    suited to serve this purpose. It acts much like a transformer does in
    converting 220 voltage current to 110 voltage current.
        The Strike Force provides us with a near-term strategic capability
    to rapidly deploy initial-entry forces that can be readily adapted to
    meet diverse requirements and threats--across the full spectrum of
    operations. It will also serve as a vehicle for testing Army After Next
    organizations and developing the leader development and critical
    soldier skills for such organizations. This experimentation effort will
    speed our transformation from an industrial age force to an information
    age Army, while maintaining readiness to support the National Military
    Strategy.
        For the Strike Force to be maximally adaptive--to give us the
    knowledge, speed, and power we need in the Army After Next--we need to
    begin with the Strike Force's headquarters and make it a world class
    command and control system. Starting with the headquarters allows us to
    explore four key areas:
        (1) How best to command and control diverse forces;
        (2) How to streamline our command and control with the information
    technology becoming available to us (potentially eliminating layers of
    command structure);
        (3) What we need in terms of ``reach back'' capabilities to take
    advantage of all the national systems available to us (but are not
    normally available to a unit at this particular level);
        (4) How we develop leaders for these tremendously more challenging
    tasks; and
        (5) How we rapidly build teams with diverse capabilities.
        We want to employ our Army's full arsenal of capabilities--Active,
    Guard, and Reserve--and give the Strike Force headquarters the ability
    to take the component forces they need and forge them into a cohesive,
    highly effective team with the right capabilities. To do that, we must
    have a vastly improved command and control system, and we must develop
    leaders and staffs capable of commanding and controlling whatever
    organization is needed for a specific situation.
        We are asking the 2nd ACR to take the lead. The oldest regiment in
    continuous active service, the 2nd ACR is based at Fort Polk,
    Louisiana. Initially, the key to the adaptive capacity of the Strike
    Force will be the command and control capabilities we embed in the 2nd
    ACR. In addition, Fort Polk is home to the Joint Readiness Training
    Center, one of the Army's combat training centers. The 2nd ACR will
    rely heavily on the training facilities on post as it goes through its
    Strike Force development.
        In sum, Strike Force is the natural bridge between today's forces
    and tomorrow's. It will provide us with the responsiveness and
    adaptability to configure for whatever contingency we face and give us
    a vehicle for experimenting with ways to address the emerging threats
    we are seeing today. It will allow us to reshape Cold War force
    structure into post-Cold War force packages. The beauty of this concept
    is that Strike Force allows us to begin converting the full power of
    our Cold War force without having to ``rewire the entire house.'' We
    believe that this is the most cost-effective way to manage risk and
    requirements. It is the right kind of force for the threat environment
    we face.
        Question. General Reimer, can you tell us how a Strike Force might
    be employed and how it might support a regional Commander-in-Chief
    (CINC)?
        Answer. In my view, the mission Task Force Hawk has assumed in
    Albania is one ideally suited for the Strike Force and is an example of
    how Strike Force can provide support to regional CINCs. It requires us
    to bring a variety of units from across the Army together rapidly to
    perform a specifically tailored mission. Using the Strike Force's
    command and control platform as the integrating headquarters for this
    mission in Kosovo would free corps command and control assets to
    respond to the larger and potentially more serious hot spots in the
    world.
        Question. General Reimer, last year, the U.S. Army Pacific
    Commander, General Steele, proposed that Army units under his command
    stationed in Alaska and Hawaii be developed into crisis response units
    capable of responding to the requirements of the Pacific Command. How
    does this idea match up with your Strike Force headquartered at Fort
    Polk?
        Answer. Lieutenant General Steele considered forming an ad hoc Army
    component of a joint task force (JTF) that would respond to a crisis in
    the Pacific Command (PACOM) area of responsibility (AOR). The Army's
    new Strike Force can fill the JTF role or become the nucleus for a JTF
    that could respond in the PACOM AOR. Under the Strike Force concept, we
    will develop a system that allows us to draw just the precise
    capabilities we need for a given mission and integrate them into an
    efficient organization that can project power quickly and conduct
    effective early entry contingency operations for any Commander-in-
    Chief.
                                     ______

               Questions Submitted by Senator Ernest F. Hollings
                                chinook engines
        Question. General Reimer, I note the Army included a proposal for
    $56 million on the unfunded priorities list for additional--714 engines
    for the CH-47.
        I understand that there are enough engine conversion kits in stock
    to increase the monthly engine conversion rate from six to ten or more
    per month. This would in turn permit an increase in the rate at which
    engines are put into the field. Funds to support much of this increase
    have already been provided.
        If Congress could find the additional $56 million, can you assure
    me that the conversion and fielding rates will be increased starting
    early fiscal year 2000 as a transition to the fiscal year 2000 program
    without causing any disruption within the vendor or subcontractor base?
        Answer. The additional $56 million will increase both the
    conversion and fielding rates. The conversion rate will ramp up from
    six to ten per month. The rate will reach ten per month in fiscal year
    2001, thus stabilizing the vendor and subcontractor production base at
    an economic production.
        Question. Please confirm my understanding that these additional
    funds initiate, if not completely fund, the fielding of the improved--
    714 engines to Korea.
        Answer. The additional $56 million, combined with budgeted fiscal
    year 2001 funding, will procure a sufficient quantity of improved
    engines to complete the fielding to Korea 26 months earlier than
    current funding would allow.

                              subcommittee recess

        Senator Stevens. I thank you very much for what you have
    done, and we have got a much better relationship, and that is
    an ongoing relationship. We hope to improve thanks to your
    work. We appreciate it very much.
        General Reimer. Thank you, Mr. Chairman.
        Senator Stevens. Thank you.
        [Whereupon, at 11:40 a.m., Wednesday, May 19, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

     DEPARTMENT OF DEFENSE/MILITARY CONSTRUCTION APPROPRIATIONS FOR FISCAL
                                   YEAR 2000

                                  ----------

                            WEDNESDAY, JULY 14, 1999

                                           U.S. Senate,
              Subcommittees of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittees met at 10:03 a.m., in room SD-192,
    Dirksen Senate Office Building, Hon. Ted Stevens (chairman of
    the Defense Subcommittee) presiding.
        Present: Senators Stevens, Domenici, Burns, and Inouye.
        Also present: Senator Roberts.

                             DEPARTMENT OF DEFENSE

          Forward Operating Locations (FOL) for Counterdrug Operations

    STATEMENTS OF:
            GEN. CHARLES E. WILHELM, COMMANDER IN CHIEF, U.S. SOUTHERN
                COMMAND, U.S. MARINE CORPS
            HON. WALTER B. SLOCOMBE, UNDER SECRETARY OF DEFENSE (POLICY)

                     OPENING STATEMENT OF HON. TED STEVENS

        Senator Stevens. Good morning, Mr. Slocombe and General.
    This morning we want to hear from you about the establishment
    of military operating locations in Latin America. I do want to
    thank Senator Burns for joining us, and Senator Roberts.

                            new Military facilities

        This proposal to open up four new military facilities in
    Aruba, Curacao, and Costa Rica impacts the work of both
    subcommittees, the Defense Subcommittee and Military
    Construction Subcommittee, and has implications on future year
    funding.
        Last month, Senator Inouye and I notified Secretary Cohen
    that the Defense Subcommittee was not in a position to approve
    the request for $45 million to commence the establishment of
    these new bases in operating locations at the time the
    Department was seeking the authority to close additional bases
    in the United States, and our forces face expanded overseas
    contingency deployments.
        We believe the committee needed to review the proposal in
    greater detail to understand the fiscal and operational
    implications. Senator Inouye and I noted in our letter to
    Secretary Cohen this subcommittee has consistently increased
    fundings available for the defense counterdrug missions over
    the levels sought by the President in the budget request.
        For the fiscal year 2000, the bill passed by the Senate, we
    added $54 million directly for the DOD counterdrug operations.
    General Wilhelm, in your testimony you rightly note the Coast
    Guard is the lead U.S. agency for drug interdiction. In light
    of that role, however, the subcommittee increased defense
    funding for the Coast Guard counterdrug operations, adding $200
    million to the Coast Guard allocation for the fiscal year 2000.
        In the Kosovo emergency supplemental passed in May, the
    subcommittee added a further $200 million for 1999 for the
    Coast Guard to enhance counterdrug roles. These considerations
    led us to seek a better understanding of why new military
    facilities were needed overseas at a time when operational
    stress is resulting in some of the lowest personnel retention
    figures since the establishment of the all-volunteer force.
        There is no question that the military has an important
    contribution to make in our national effort to stop the flow of
    drugs into the United States. The appropriate role for the
    military in that effort must take into account other missions
    faced by the Armed Services, especially the unprecedented pace
    of long-term overseas deployment.

                              Infrastructure costs

        I will defer to Senator Burns, and I am sure Senator Inouye
    also, on the implications of the infrastructure costs
    associated with the new locations.
        For the fiscal year 2000 the Armed Services and
    Appropriations Committees of the Senate judged that the
    permanent infrastructure costs should be funded through the
    military construction budget rather than through the defense
    appropriations bills as sought in the budget. This hearing
    affords both subcommittees the benefit of your views on the
    matter as we proceed to act on reprogramming requests that are
    still pending and the funding sought for fiscal year 2000.
        Both of your prepared statements will be inserted into the
    record in full. I want to turn to my colleague, Senator Inouye,
    and then if Senator Burns does not mind, Senator Roberts is in
    the chair at 10:30, and I want to see if he has any comments
    before he leaves.

                       statement of Hon. Daniel K. Inouye

        Senator Inouye. Thank you very much. Mr. Secretary and
    General Wilhelm, we appreciate your presence here this morning.
        No one questions the importance of the counterdrug mission,
    and I do not believe that that is an issue here this morning.
    What is at issue is how the Department of Defense interprets
    its authority to conduct overseas operations in advance of
    receiving congressional approval.
        Also, the subcommittee needs to understand what the impact
    of establishing four new temporary overseas facilities will
    have on family separations, readiness, retention, et cetera,
    and there are questions regarding how long we will be operating
    from these new bases.
        DOD keeps insisting that we need to reduce infrastructure
    to consolidate bases here in the United States, but with this
    plan we see the possibility of establishing new overseas
    locations that will be manned by U.S. military personnel.
        These are some of the questions that many of us have, and
    why our chairman has called this hearing, and so we look
    forward to your testimony to explain this approach.
        I thank you very much, Mr. Chairman.
        Senator Stevens. Thank you, Senator. Senator Burns, do you
    object to turning to Senator Roberts?
        Senator Burns. No.
        Senator Stevens. Senator Roberts.

                         statement of Hon. Pat Roberts

        Senator Roberts. Thank you, Mr. Chairman. Thank you for
    your indulgence. I thank my colleague from Montana for his
    patience. I plan to maintain my status as an honorary member--
    that is not ornery member, that is honorary member--of the
    Appropriations Committee. I am on good behavior, sir, and will
    make my remarks as short as I possibly can.

                                Emerging threats

        I am chairman of a new subcommittee on the Armed Services
    Committee called Emerging Threats and Capabilities. We have an
    obligation to take a look at the emerging threats that we think
    are of vital interest to our national security. We have had six
    hearings. Most of those hearings dealt with weapons of mass
    destruction, cyber threats--that is, information warfare--
    terrorism, and down on the list, and I do not mean that in
    terms of priority, but also down on the list is the problem of
    drugs.
        I was invited by General Wilhelm to come to the Southern
    Command. I went down and talked to General Wilhelm at length,
    and I must say that I had my eyes opened. My horizon was
    broadened, because I think in terms of the Southern Command and
    what is entailed in 32 nations down there, 360 million people,
    and the stakes involved, that it is terribly, terribly
    important.
        When I became the chairman of the Emerging Threats and
    Capabilities Subcommittee, I tried to make a concerted effort
    in the hearings that we held to the future and the security
    environment, rather than that of the past. One of the
    conclusions we reached is that Latin America will either be a
    source of great strength for the United States or it will be a
    principal weakness, and we want to make sure that it is a
    strength.
        Now, what am I talking about? What are the stakes? In my
    prepared remarks I go into the energy situation, the Panama
    Canal, our trade interest compared to other theaters, to the
    regional threats in regards to a very fragile area in regards
    to democracy and the terrorism problem, also the drug problems,
    the corruption problem, narcotrafficking, but I just made a
    list this morning.
        We do not want to reverse the success that we have had in
    the eighties in this region, Mr. Chairman. Thirty-one out of
    thirty-two nations now have democracy in this very crucial part
    of the world. It is a tremendous success story. I do not know
    of too many people who have really written the history of what
    we went through in the eighties and where we are today.
        Three hundred sixty million people, average age about 17,
    18 years old, a lot of very crucial needs. With 31 out of 32
    nations now having democracy, obviously the only one remaining
    is Cuba.
        There could be a threat to our Nation's oil supply.
    Venezuela does supply approximately 18 percent of our oil
    supply. With a situation in Colombia and unrest there and
    rebels dedicated to interests that are not in our vital
    interest, that could be a real problem, and so consequently I
    do not think we want to see gas lines and oil price inflation.
    That is a situation that could occur.
        This is a situation where we must maintain a presence
    because of our world's leading trading partners, Mr. Chairman.
    I was over in Brussels talking with the European Union, trying
    to get some progress in regards to the World Trade Organization
    talks. I must tell you that I do not think the potential or the
    prospects for trade in that part of the world are very good.

                                  Food safety

        We have a food safety situation over in Europe, where sound
    science is being tossed out the window. Eighty-five percent of
    the subsidies paid on agriculture today come from the European
    Union. Where must we look? We must look south.
        Again, 360 million people who need a good, nutritious diet.
    We can export those bulk commodities. The Appropriations
    Committee will be considering on down the road an emergency
    bill in regards to agriculture probably totalling $5, $6, $7,
    $8 billion. If we had fast track now in place, and we were in a
    competitive situation with our competitors overseas, the
    Southern Command, the southern area is where we should go.
        It has a lot of ramifications for the Kansas wheat farmer
    out there now, saying I get $2 a bushel for my wheat. That is
    the kind of individual relationship that we have with our
    constituents in regards to their economic livelihood.
        We are going to have a hearing on down the road in the
    Emerging Threats Subcommittee on the weapons of mass
    destruction. John Deutch is in charge of a commission. There
    has been some press about it. We are going to have him in there
    for a hearing.
        I asked General Schumacher what would be the easiest way to
    introduce a weapon of mass destruction and nuclear device into
    this country. Guess what, in a shipment of cocaine. That would
    be the easiest way to get it into this country, and so in terms
    of our vital national interest in that kind of a threat, why,
    this region is all-important.
        I know the General will mention that we are into a culture
    of the Americas and not an American culture any more. I know
    the General will mention the problems with immigration, the
    fact that by 2010 the Hispanic Americans will represent the
    largest minority population of the United States.

                          Forward operating locations

        I think with some kind of presence, Mr. Chairman, whether
    it's the forward operating locations--I will go out on a limb.
    I think the situation with Howard Air Force Base was a mistake.
    I think we ought to have some kind of a lease-back arrangement.
    I know that is probably not possible, and I am not sure what
    kind of format it will take with the forward-operating
    locations, but I will tell you, sir, that I think that on a
    cost basis we could do it about half the cost in regards to the
    cost of Howard.
        So how that works out, obviously, sir, that is your
    responsibility, that of the Department of Defense. I just
    wanted to go on record in saying that as chairman of the
    Emerging Threats Subcommittee, strategically, geopolitically,
    with a whole range of issues, this part of the world is
    extremely important.
        We have had a success story, but the history of foreign
    policy and involvement in that part of the world is that when
    we have success we tend to draw back, and then we get into real
    problems.
        With that, Mr. Chairman, I want to thank you for the
    opportunity to come before the committee. I am an admirer of
    General Wilhelm. He has certainly opened up my eyes. I would
    encourage every member of the committee to go down there to the
    Southern Command and let him walk you through some of the
    obligations and the missions.
        This is just not about drugs. Drugs are very important, but
    I think from the standpoint of our strategic interests it is
    exceedingly important.
        I want to thank the General for the job that he does, and I
    thank you, Mr. Chairman, for the opportunity to make a
    statement.
        Senator Stevens. Thank you.
        General, Senator Roberts demonstrates there is no such
    thing as an ex-marine. [Laughter.]
        Senator Burns.

                         statement of Hon. Conrad Burns

        Senator Burns. I would concur with that. There are only
    farmers and whatever. Thank you, Mr. Chairman, and thank you
    for holding these hearings.

                      North American Free Trade Agreement

        I also want to footnote on what Senator Roberts has just
    revealed to us as far as not only from a drug interdiction and
    security in the area, from the trade point of view also. There
    is a great success story down there, and the European Union has
    made overtures already to include South America in their plans
    of an extended, what we call our North American Free Trade
    Agreement. We have been trying to expand, so there is much more
    at stake here than just military security and drug
    interdiction.
        There is a possibility and a future of an extended
    relationship in the Americas that I think will be very
    beneficial to everybody that lives here both in North America
    and in South America.
        My questioning will go along the lines of what we have in
    existence there as far as facilities are concerned. Also the
    requests that have been made here through military
    construction, because any time we have any expansion we are
    dealing with a finite amount of money that is being stretched
    almost to the breaking point. Mr. Chairman, as you know, you
    have wrestled in your full committee with all of these
    appropriations, and you know how we have to set our priorities
    on where we can get the best, where they should be used.
        We did not really know about this until we had already
    marked up our bill this year. The administration made no
    revelation to us the amount of money that they were going to
    request to construct facilities for the fiscal year 2000
    budget, and we just found out about it. Now we are trying to
    scramble to get our house in order where we may at least
    facilitate or help facilitate our presence there and the
    mission that we have ahead of us.
        The committee did not receive detailed justification for
    these projects until June of this year. So we want to better
    understand the requirement of these bases as well as the
    justification to spend $122 million in these overseas areas,
    especially when we have existing bases, and some would judge
    might be able to support these missions.
        So I look forward to the testimony this morning, and again
    I want to thank the chairman for these hearings.
        Senator Stevens. Senator Domenici, do you want to make a
    statement?
        Senator Domenici. No, thank you, Mr. Chairman.

                                 Reprogramming

        Senator Stevens. Mr. Slocombe and General, I just want to
    relate two things to you. First, this reprogramming was from
    operating funds to military construction, and we did not
    approve it partially for that reason, and second, when we went
    to Kuwait and visited with General Pate after the President
    increased the deployment to Kuwait, I inquired where the money
    came from, and how we started this base that was there. That
    was not an air base. It was Army, as I recall, and General Pate
    told me he was building a base for 50 years.
        When we looked at King Sultan Airfield, which until Aviano
    was the largest Air Force base for our military, it was never
    really a subject of an authorization. I was told that when we
    appropriated funds for the account which had been mentioned in
    the statement that would be a field there to replace after the
    Khobar Towers, as I recall, in Iran, and the problem of Iran.
    It was viewed as an implicit approval of the new bases that
    were to be established.
        Now, I just do not want to see a situation where we
    implicitly are approving bases, and I hope that the Congress
    will agree with us on that. As I said in my statement, the
    issue before us is not your judgment about whether they should
    be there.
        The issue really is, what is the deterrent today to the
    reenlistment of our people? Only 29 percent of our pilots who
    are up for retention reenlisted this last year, and I believe
    that is the result of extensive overseas deployments and
    unaccompanied tours.
        I hope you will tell us, will these be unaccompanied tours,
    and how long will these tours be, and are we setting up three
    more bases that will take people away from their families for
    4, 5, 6 months of a year and lead to further problems as far as
    retention is concerned?
        Mr. Slocombe, who wishes to go first?
        Mr. Slocombe. Mr. Chairman, with your permission, I suggest
    that General Wilhelm go first to outline the details of the
    proposal and its relation to both our counterdrug effort and
    our broader interest, and then I will have a short summary of
    my statement afterwards.
        Senator Stevens. General.

                      statement of Gen. Charles E. Wilhelm

        General Wilhelm. Mr. Chairman, distinguished members of the
    committees, I welcome this opportunity to appear before you
    this morning to discuss and testify about what I consider to be
    the single most important issues that confronts United States
    Southern Command today.
        Mr. Chairman, I took notes during the very powerful and
    direct opening statements which you made and the members of the
    committee made, and I have made some notes to myself prior to
    coming in here this morning as to some points that I might
    raise in my opening statement.
        I certainly do not want to waste the time of the committee,
    and I think that you have defined very clearly the path you
    would like for this testimony to take, so I am going to pick my
    way through my notes and try to really just hit those points
    that are of concern to the committee.

                        Post Panama theater architecture

        As we withdraw our forces from Panama, as we must under the
    provisions of the 1977 treaties, reestablishing the United
    States Southern Command theater architecture in a way that will
    enable us to perform our missions in the 21st century has
    become for me the single most important task that I will
    perform during my tenure in command, and I have made that
    statement to Secretary Cohen, and he has agreed with the
    direction that I have decided to go.
        I will tell you it has been a difficult task. It has been
    made more difficult by the very short time that has been
    available to make these arrangements.
        To be very honest, Mr. Chairman and members of the
    committee, when I assumed command at Southern Command in
    September 1997, I did so with about a 99 percent expectation
    that we would succeed in our negotiations with Panama for the
    creation of a multinational counterdrug center there and as a
    part of that I really contemplated a residual presence of about
    2,500 to 3,500 U.S. personnel to do many of the things that we
    need to do in the region to preserve the financial and other
    equities that members of the committee have already mentioned.
        As I mentioned, we have done pretty well. In my formal
    statement I have given you a brief recap of where we are in our
    repositioning and relocation efforts. With the help of this
    committee, with the help of some of your staffers--Mr. Cortese,
    Ms. Ashworth are here today. They have been very helpful with
    the things that we have done on Puerto Rico, which has really
    in a great many ways assumed the role that Panama did in the
    past.
        This morning, as I see it, we have got one major task that
    remains to be performed, and that is to identify a network of
    forward operating locations that will enable us to perform the
    missions that we previously performed from Howard Air Force
    Base in Panama, and I would hasten to add that as important as
    it is, the counterdrug mission is only a portion of this.
        Senator Roberts in his statements made some comments about
    the growth of democracy in this region, the fact that 31 out of
    32 countries are now ruled and governed by people who are in
    office based on the wishes of the populace, and these countries
    have free market economies, and I think all members of the
    committee are aware of the directions that our financial
    dealings with this part of the world have taken since 1990.
        Our exports to Latin America have more than doubled, as I
    have mentioned in other statements. Today we do more business
    with Chile, a country of 14.5 million people, than we do with
    India, with 952 million. We do more business with either Mexico
    or Brazil than we do with China, with 1.3 billion, and the list
    goes on.

                           Forward operating location

        I believe that the forward operating location concept that
    we have developed provides an efficient and a very cost-
    effective way to perform the missions that we previously
    performed from Howard Air Force Base. Just to very quickly
    review the bidding on the cost, the numbers cited by the
    chairman are precisely correct.
        In fiscal years 2000 and 2001, we have a requirement for a
    total of $122.5 million, not to build bases, but simply to
    improve existing facilities in Ecuador, in Curacao, and Aruba,
    and to bring them to a state where they meet safety and
    operating standards that are acceptable to the United States
    Air Force and the U.S. Customs Service.
        I really need to make that distinction. We are not
    intending to build bases, simply to improve the operating
    conditions at these existing host nation facilities which we
    have negotiated access to and that will permit us to carry out
    important counterdrug and other engagement missions.
        I have taken a little bit longer-term view of this, and I
    think it is important that we put these outlays into a
    meaningful context. The cost of annual operations at Howard Air
    Force Base was $75.8 million. After we complete these upgrades
    that I have mentioned, we estimate that the annual operating
    cost for the forward operating locations will range somewhere
    between about $14 to $18 million, and so if we look at this
    over a 10-year operating horizon, operations from the forward
    operating locations will actually cost only 40 percent of what
    we would pay if we continued to conduct these operations from
    Howard.
        I really think that to fully understand the importance of
    the FOL's and to make the important distinction that these are
    really a network of facilities, geography is very instructive.
    Mr. Chairman, if you do not mind, I would like to refer to a
    chart.
        Senator Stevens. Yes, sir.

        [GRAPHIC] [TIFF OMITTED] T02JY14.000

        General Wilhelm. Sir, to walk you through the chart, the
    pink circle in the middle depicts the operating range of an E-3
    AWACS aircraft operating out of Howard Air Force Base.
        Senator Stevens. General, is it possible to turn that
    around so people out there can see the same thing and we can
    see it, too?
        General Wilhelm. Yes, sir, we probably can.
        Senator Stevens. We had the charts. They do not have the
    charts. If you could just move it around so people out there
    can see it, too.

                                     AWACS

        General Wilhelm. Again, the circle in the center in pink
    depicts the operational reach that an AWACS, an E-3 AWACS
    aircraft would have operating from Howard Air Force Base. These
    two operating circles here in blue and overlapping in pink
    depict the same coverage that we would get from the same
    aircraft operating from the forward operating location at
    Manta, Ecuador, here to the northeast.
        This operating radius depicts the coverage we would get
    from the AWACS operating from Curacao or Aruba.
        I should make the point that this reflects 2 hours transit
    time out to the mission area, 8 hours on station, and 2 hours
    back. That is the standard profile for an AWACS mission, and
    the range of the arc depicts the range of the radar on the
    aircraft itself.
        Now, there are some important points to be made here. It
    has been suggested that perhaps we could realize significant
    savings if we did not operate the full family of detection
    monitoring and tracking assets, to include the AWACS from
    Manta, Ecuador. I need to draw something on the map, because
    this is the most important order that we contend with when we
    look at the counterdrug mission and more and more regional
    stability, and I will sketch it right on, sir.
        This is the border here, between Colombia and Peru. This is
    the air bridge that we worked so hard and devoted so many
    resources to interdict starting in the earlier part of this
    decade, and in my statement I think you saw, if you will pardon
    the phrase, the body count that we have achieved on
    narcotrafficking aircraft, over 123 aircraft since 1995 shot
    down, forced down, seized or confiscated as a result of our air
    bridge interdiction operations.
        What is important is the operating arc coming out of Aruba
    and Curacao does not reach the border between Peru and Ecuador.
    We could stand to lose what we worked so hard to gain.
        On the positive side, looking at Aruba and Curacao, it does
    provide us very favorable coverage over the Eastern and Central
    Caribbean. Ecuador is extremely important for two reasons: one,
    again, very, very short reach to the Peru-Colombia border, and
    it provides us excellent coverage of this portion of the
    Eastern Pacific, which at this point in time has largely been
    an open back door, feeding narcotics up toward Mexico through
    the Sea of Cortez into Mexico's specific ports and then over
    our Southwest border.
        And as you know from other testimony by General McCaffrey
    and others, 59 percent of the drugs get here over those routes,
    so this needs to be considered as a network of facilities which
    will provide us the operational reach or coverage that we need
    to fully address the challenge.
        Now, I have added in this final arc which reflects the
    positioning of a Central American forward operating location.
    For the purposes of this chart we have placed the center part,
    the star over northern Costa Rica, roughly where the Liberia
    Air Base is. As to whether or not we can negotiate an FOL
    agreement with Costa Rica at this point is perhaps problematic,
    but if not Costa Rica, I am very confident that we could
    negotiate an access agreement with another country in Central
    America.
        As you can see, this arc then provides us complete coverage
    of all of Central America and the balance of the Eastern
    Pacific transit routes headed up toward the coast of Mexico.
        I felt it very important to try to put this entire issue
    into a geographic context, because I think only when we regard
    the FOL's as a network do they really make strategic and
    operational sense.
        Thank you, sir. I appreciate your patience with the
    chartology.

                               prepared statement

        Mr. Chairman, members of the committee, I had a number of
    things I was going to say about the nature of the drug threat,
    about what it has done and is doing to the societies in our
    region, and what it has done to our own society, but as Senator
    Inouye stated, you are very much aware of that, so I think it
    would not be a good use of the committee's time for me to cover
    ground that has already been pretty well trod upon, and so I
    would like to terminate my opening statement at this point,
    sir, and I look forward to your questions and the questions of
    the members of the committee.
        Senator Stevens. Thank you, General.
        [The statement follows:]
                 Prepared Statement of Gen. Charles E. Wilhelm
                                  introduction
        Mr. Chairman, distinguished members of the committees, I welcome
    this opportunity to discuss with you the plans and concepts that will
    enable us to sustain a strong Department of Defense contribution to the
    crucial struggle against illicit drugs. As we complete the withdrawal
    of United States military forces from Panama, the Forward Operating
    Locations (FOLS) we are establishing in the Caribbean and Latin America
    become a critical means of access to the region, providing the U.S. an
    efficient and cost-effective alternative to Howard Air Force Base for
    the execution of critical counterdrug missions. Moreover, in addition
    to enabling Southern Command to meet its responsibilities under
    Presidential Decision Directive 14 (PDD-14) and Goals 4 and 5 of the
    U.S. National Drug Control Strategy, the FOLs will emerge as a vital
    component of our cooperative regional engagement strategy.
        Over the last two decades, regional stability has been a key
    element in fostering economic growth and democratization throughout the
    Caribbean and Latin America. However, drug trafficking and its
    relationship with organized crime are seriously threatening the
    hemisphere's potential to achieve long-term stability, peace, and
    economic prosperity.
        The complete withdrawal of United States forces from Panama is
    challenging our ability to sustain necessary levels of effort in
    countering this threat. Up until now, DOD and other interagency
    organizations provided the majority of support in the fight against the
    illegal drug trade from U.S. military facilities in Panama. To offset
    the loss of basing rights in Panama, we are aggressively executing a
    plan to realign and rebalance the theater architecture to sustain
    counterdrug efforts in support of PDD-14 and The National Drug Control
    Strategy. An interlocking network of FOLs is an essential element of
    this new architecture.
        In this statement I will present my assessment of this region's
    importance to the United States, followed by an overview of the
    transnational threats that jeopardize our regional interests. I will
    conclude with a discussion of the FOL concept, the FOLs themselves and
    the absolutely pivotal role they will play in our regional engagement
    and counterdrug strategies.
                          the importance of the region
        Growing economic interdependence and the wave of democratic reform
    that has swept over this region, as well as shifting cultural and
    demographic trends have significantly elevated the importance of the
    Caribbean and Latin America to the United States.
        Latin America is our fastest growing export market. Today, 44 cents
    of every dollar that the 411 million inhabitants of the region spend on
    imports are for goods and services from the United States. Statistics
    can be instructive. It is meaningful to note that our annual trade with
    Chile, a nation of 14.5 million people, exceeds our trade with India
    with a population of 952 million. With almost 1.3 billion inhabitants,
    China is the most populous nation on the earth, yet we do more business
    with our 98 million next-door-neighbors in Mexico. By 2010, trade with
    Latin America is expected to exceed trade with Europe and Japan
    combined, and if the Free Trade Area of the Americas (FTAA) initiative
    is in place by 2005, we can expect to see additional growth in
    hemispheric economic interdependence.
        The influence of Latin America is also reshaping America's cultural
    and demographic landscapes. What was once an ``American Culture'' is
    rapidly becoming a ``Culture of the Americas.'' Today, the United
    States is the fifth largest Spanish speaking country in the world. By
    2010 Hispanics will become our largest minority population and by the
    mid-point of the 21st century demographers project that 100 million
    U.S. citizens will be of Hispanic descent.
        Along with these trends, the dramatic expansion of democracy and
    resolution of intra-regional disputes and rivalries provides visible
    evidence of a hemisphere that has taken important first steps toward
    the achievement of long term peace and stability, at least at the
    state-to-state level. In the last twenty years, the paradigm of coups,
    military dictatorships, communist-inspired insurgencies, border
    disputes, and economic crises has gradually given way to elected
    governments and militaries that are subordinate to civilian leadership
    and support democratic processes. These are nations that are resolving
    disputes without resorting to the use of force. As an example, last
    October, we witnessed a watershed event--the resolution of Peru and
    Ecuador's longstanding border dispute with the historic signing of a
    peace agreement between the two countries.
        Viewed through the prism of the national security strategy of
    engagement and enlargement there is no better success story for U.S.
    Foreign policy. On the other hand, history has demonstrated that
    success is many times harder to sustain than failure is to fix, and
    these positive trends must be nurtured, encouraged and reinforced.
                                   the threat
        Despite positive cultural, economic, and political developments,
    there is a pervasive sense of unease in the region regarding security
    issues. Our enemies are not well known, our challenges are unclear,
    dangers are not always obvious and responses are frequently difficult
    to formulate. It has been suggested that uncertainty is the norm and
    apprehension the mood. Some of the region's democracies remain fragile;
    facing economic adversity, rapid population growth, and proliferating
    transnational threats. Out of area powers have shown increased interest
    in our next-door neighbors. Under these circumstances it is reasonable
    to anticipate setbacks, particularly when fledgling democracies are
    confronted with chronic corruption, narco-financed insurgencies, and
    deeply rooted organized crime. United States presence within the
    hemisphere demonstrates our commitment to the region, prevents the
    creation of a security void, and provides engagement opportunities to
    counter emerging threats to regional security and prosperity.
        Today, I believe the primary threat to the region can be summed-up
    in a single word--corruption. Corruption in all its forms eats at and
    stunts the growth of young democracies. In Latin America, at the heart
    of most forms of corruption are the corrosive effects of the drug
    trade. Drugs and the people who grow, produce and sell them, are
    aggressively challenging the ability of many governments to provide
    long-term stability and economic prosperity. Illegal drugs are killing
    and sickening the people, sapping productivity, draining economies,
    threatening the environment, and undermining democratic institutions.
    We are not immune to these problems--far from it. In the United States
    in 1996 alone, drugs and drug related illness and violence claimed the
    lives of 14,843 Americans. In an historic context that equates to 88
    percent of our losses in the Korean Conflict! Each year, illegal drugs
    send a half million Americans to emergency rooms, turn our urban
    neighborhoods into battle grounds, and for many of our youth turn the
    American dream into an American nightmare. No nation, not even one as
    powerful as ours can afford such devastating social, health and
    criminal consequences. Because this tragedy has been with us for years,
    and because it kills and disables our citizens one at a time, I
    sometimes fear that we've developed a tolerance for it. If we
    experienced these kinds of losses in a day, a week or even a month,
    they would simply not be tolerated. By my definition, illegal drugs are
    a ``weapon of mass destruction,'' and should be treated as such.
        The countries of the Caribbean and Latin America have grown to
    accept and understand the drug threat as a shared challenge and they
    are now more ready than ever to join us in the fight. However, they
    need our help and encouragement for the long struggle ahead. SOUTHCOM
    and DOD play a supporting role in this fight through both theater
    engagement and counterdrug operations. Presidential Decision Directive
    14 and goals 4 and 5 of the National Drug Control Strategy provide the
    foundations for Southern Command's counter-drug campaign.
                          forward operating locations
        An adequate operational presence in our theater of operations is
    absolutely essential for the full and successful implementation of our
    counterdrug and regional engagement missions. While executing our
    counterdrug campaign plan, forces strategically placed in the theater
    give us flexibility and allow us to be proactive rather than reactive
    in confronting narcotraffickers. Our goal is to force them into a
    defensive posture. The past two years have witnessed significant
    reductions in coca cultivation in Peru and Bolivia. During the past
    year alone cultivation has been reduced by 26 percent in Peru and 17
    percent in Bolivia, while production of coca base has been reduced by
    about 25 percent in both countries. These successes are attributable to
    a combination of effective host country eradication and alternative
    development programs and aggressive U.S. and host country efforts to
    interdict the air bridge that previously linked cultivation sites in
    Peru and Bolivia with processing and production laboratories in
    Colombia.
        The Air Bridge Denial Program has employed forward-deployed U.S.
    aircraft to provide intelligence, surveillance, reconnaissance,
    airborne early warning, and tracking support to host nation forces.
    Last year, with U.S. support, host nation interceptors shot down,
    forced down, seized or destroyed 26 narcotrafficking aircraft, bringing
    the total to 123 narcotrafficking aircraft taken out of action since
    1995.
        As a result, we have observed a shift in trafficking patterns. The
    cost of cocaine base in Peru and Bolivia plummeted to unprofitable
    levels as pilot fees skyrocketed. As a consequence, more illegal drug
    shipments were diverted to the rivers. To compensate for setbacks in
    Peru and Bolivia, Narcotraffickers increased their cultivation of coca
    by 28 percent in Colombia and further streamlined their operations by
    consolidating cultivation and production. We are now supporting efforts
    by Colombia and its neighbors to effectively counter these revised
    trafficking patterns.
        Continued forward presence by our forces is mandatory if we are to
    sustain the progress that has been made. The combination of U.S.
    detection, monitoring and tracking aircraft and host country
    interceptors has proven to be an effective team; one that strikes an
    appropriate balance between U.S. and host nation capabilities and roles
    in pursuit of end games. Continued forward presence under the FOL
    concept will enable us to continue this support, and provides an
    efficient and cost-effective alternative to the permanent bases that we
    previously occupied.
                             alternatives to panama
        Historically, DOD support for source zone countries has been
    provided from military facilities in Panama--over 2,000 counterdrug
    flights per year originated from Howard Air Force Base. From Panama, we
    also supported transit zone interdiction operations, pier-side boarding
    and searches, and training for U.S. and host country counterdrug units.
        The Panama Canal Treaties of 1977 mandate a complete withdrawal of
    U.S. Military Forces not later than December 31, 1999. The departure of
    forces does not, however, alter Southern Command's mission
    responsibilities or requirements. When negotiations with Panama for a
    Post-1999 presence were terminated, Southern Command conducted a
    strategic analysis and determined that a series of Forward Operating
    Locations (FOLs) would be necessary to provide the capabilities
    required to achieve our counterdrug mission objectives.
        FOLs have become an integral part of SOUTHCOM's theater
    architecture for the next century. While they will allow us to remain
    fully engaged in the multilateral effort to combat narcotrafficking,
    they are not bases to be constructed at U.S. expense nor are they
    intended to replace Howard Air Force Base. Rather, FOLs are intended to
    replace the counterdrug operational capability that was provided by
    Howard Air Force Base without incurring the expense of base
    construction and at reduced annual operating cost. In simple terms,
    FOLs are agreements between the United States Government and Host
    Nations whereby the United States will be granted access to existing
    facilities that are owned and operated by the host nation. These sites
    will provide a 24-hour, seven-day per week, operational capability.
    U.S. Aircraft will rotate in and out of FOLs as mission needs dictate.
    Each site must be night and all weather capable with an air traffic
    control facility, an 8,000-foot runway with the capability to support
    small, medium and heavy aircraft. Each FOL must also have refueling and
    crash/fire rescue capabilities and minimum ramp, hangar, office,
    maintenance, and storage space.
        Numbers of support personnel will vary depending on numbers and
    types of aircraft deployed and the availability of host nation support.
    We envision a requirement for 8-12 permanently assigned personnel at
    each FOL. Depending on mission requirements, FOLs will be required to
    support as many as 200 temporarily deployed personnel.
        Three FOLs are needed to maintain the optempo and area coverage
    that we previously enjoyed from Howard AFB; one in South America for
    source zone operations, and one each in the Caribbean and Central
    America to support transit zone and northern source zone operations.
    Three FOLs also provide the flexibility that is necessary to contend
    with weather patterns and changes in trafficking routes. Initial access
    agreements have been negotiated and operations are currently underway
    from FOLs in the Caribbean and South America. Site surveys at each
    location have identified improvements that are needed to support full-
    scale operations and to upgrade host nation facilities to U.S. safety
    and operational standards.
        In close consultation with host nations, we have devised a three-
    phase program for FOL development. Phase one, which commenced on 1 May,
    coinciding with the termination of flight operations from Howard Air
    Force Base, consists of what we have termed ``expeditionary
    operations.'' This entails use of facilities in ``as is'' condition.
    Phase one operations are in progress at Curacao, Aruba and Manta,
    Ecuador, albeit at reduced operational tempo. The second phase will
    begin in fiscal year 2000 with the initiation of MILCON projects that
    will increase the operating capacities of the FOLs and bring them up to
    U.S. standards. During the third phase in fiscal year 2001, MILCON
    projects will be completed and we will attain full operational capacity
    and capabilities. At the end of phase three we will achieve operational
    reach or area coverage that will equal or exceed that which we had from
    Howard at roughly 25 percent of annual recurring operating costs.
                                 manta, ecuador
        The FOL at Manta is critical for adequate support of operations in
    the crucial source zone. Operations are now underway from Eloy Alfaro
    International Airport in Manta. This site allows forward-deployed
    intelligence, surveillance, and airborne early warning aircraft to
    monitor key narcotics trafficking routes deep in the source zone and
    over the Eastern Pacific--a pipeline that feeds Mexico, and ultimately
    the U.S.
        The USAF, as DOD executive agent for this FOL, recently sent a Site
    Activation Task Force to survey Manta facilities. The team concluded
    that the runway was suitable for most counterdrug aircraft but would
    require upgrades to accommodate AWACS, a critical asset for execution
    of our source zone strategy. The task force also recommended
    construction of various maintenance and other support facilities.
        Ecuador has been an eager and gracious host. The local Air Force
    commander has worked tirelessly to correct deficiencies at the airfield
    and to provide the safest possible operating environment.
        The footprint at Manta is expected to consist of five to eight
    aircraft and six to eight permanently assigned staff personnel. As
    previously discussed, when full capabilities are attained, the numbers
    of DOD and interagency personnel temporarily assigned to Manta will
    fluctuate based on missions and numbers and types of aircraft deployed.
                               aruba and curacao
        The airfields on the islands of Curacao and Aruba are approximately
    45 miles apart; therefore, they must be improved and managed
    separately. These two airfields are well situated and together they
    provide adequate capacity to support operations in the Caribbean
    Transit and Northern Source Zones. Operations by DOD and U.S. Customs
    Service aircraft have commenced from Hato International Airport in
    Curacao and Reina Beatrix International Airport in Aruba under
    diplomatic notes negotiated and exchanged with the Kingdom of the
    Netherlands. The Site Activation Task Force identified requirements for
    improvements to ramps and taxiways at Curacao and Aruba. For longer-
    term operations, their report recommends construction of maintenance
    and operations facilities at both sites.
        The footprint in Curacao is expected to consist of seven to nine
    aircraft, 12 to 15 permanently assigned staff personnel and as many as
    200-230 temporarily deployed operations and maintenance personnel. In
    Aruba, the footprint is expected to consist of four U.S. Customs
    aircraft, with approximately 15 permanently assigned staff and 20-25
    deployed operations and maintenance personnel. As in the case of Manta,
    the numbers at Aruba and Curacao will be small initially and will grow
    incrementally as we improve existing facilities to accommodate more
    deployed aircraft and personnel.
                           the cost of doing business
        My Air Force Component Commander, Lieutenant General Lansford
    Trapp, has visited all three sites and has reviewed the findings of the
    Site Activation Task Force. To achieve Southern Command's strategic
    goals and to meet requisite safety and operational standards, he
    assesses the MILCON requirement to be $122.47 million for Manta,
    Curacao and Aruba. For purposes of comparison, our most recent annual
    operating costs at Howard Air Force Base were $75.8 million. Once
    deficiencies are corrected at the three FOLs, we estimate that annual
    operating costs will be in the neighborhood of $14 million to $18
    million. Based on 10 years of operations, FOL costs would be
    approximately 40 percent of those we would have incurred over the same
    period at Howard with permanently assigned forces.
                                   conclusion
        The departure of United States military forces from Panama has
    created unique and difficult challenges for U.S. Southern Command. In
    the space of less than one year we have been required to recraft a
    theater architecture that was almost a century old. The end of this
    task is in sight. Our Theater Special Operations Command has
    successfully displaced its headquarters from Panama and is now
    conducting full-scale operations from its new home in Puerto Rico. U.S.
    Army South will haul down its colors at Fort Clayton in Panama on the
    30th of this month and raise them over a new command post at Fort
    Buchanan in Puerto Rico. We have already successfully merged Panama-
    based Joint interagency Task Force (JIATF) South with its counterpart
    organization JIATF East in Key West. This consolidated organization is
    now planning and overseeing execution of counterdrug operations in both
    the transit and source zones. With support from the government of
    Honduras we have increased our presence at the Soto Cano Air Base
    absorbing urgently needed helicopter assets previously based in Panama.
    These actions, coupled with the earlier relocation of our Headquarters
    from Panama to Miami, have resulted in a leaner United States Southern
    Command, but a Southern Command that is nonetheless properly postured
    to conduct its regional engagement and counterdrug missions in the 21st
    century. The Forward Operating Locations are the final pieces of the
    future theater architecture. In this statement I have emphasized how
    crucial this final element is, and I am not alone in this assessment.
    On June 30th I attended an interagency meeting at the White House.
    Included among those present were National Security Advisor Berger,
    Office of National Drug Control Policy Director McCaffrey, Assistant
    Secretary of State for Western Hemisphere Affairs Romero, Special Envoy
    for Latin America McKay, Commandant of the Coast Guard and United
    States Interdiction Coordinator Admiral Loy, representatives from the
    Departments of Transportation and Justice and others. We discussed the
    FOLs and the requirements for them. There was unanimous support and
    universal acknowledgment that the FOLs are essential for the continued
    prosecution of an effective supply-side counterdrug campaign. I
    concluded my presentation to this interagency gathering with the simple
    and direct statement that without the FOLs, United States Southern
    Command would be unable to effectively confront the threat postulated
    in Presidential Decision Directive 14, and we would be incapable of
    carrying out missions in support of goals 4 and 5 of the National Drug
    Control Strategy. We at Southern Command are grateful for the support
    and encouragement we have received from the Congress as we have gone
    about the difficult business of resetting our theater architecture.
    Timely implementation of the FOL concept is the final step in this
    process. For a modest investment the FOLS will enable us to safely and
    efficiently carry out vital missions without the costs and other
    encumbrances associated with overseas bases.

                      statement of Hon. Walter B. Slocombe

        Senator Stevens. Mr. Slocombe.
        Mr. Slocombe. Thank you, Mr. Chairman. It is as always an
    honor to appear before this committee and to address your
    concerns and the programs of the Department of Defense,
    particularly in this case with regard to Latin America and the
    counterdrug effort.

                          Forward operating locations

        General Wilhelm has explained the operational necessity for
    the three planned forward operating locations. I would just
    like to add a couple of points. Everybody recognizes the
    importance of the counterdrug mission, and certainly the
    Department of Defense. We recognize and appreciate the
    consistent support from this committee and from the Congress as
    a whole.
        The surveillance and detection in the areas that would be
    covered by these aircraft operating out of these locations is a
    key part of our overall counterdrug effort, but I want to make
    the point that it is a relatively small part, a very small part
    of the overall Government effort, which just at the Federal
    level alone is something like $17 billion, and quite a small
    part even of the Defense Department effort, which is just under
    $1 billion annually, about a quarter of that for source zone
    operations.
        Second, I think General Wilhelm's presentation has
    explained the geography, which makes it so clear that it is
    essential to have operating locations within the region, and
    that it is not practical to conduct these operations from bases
    either in the United States or Puerto Rico or Guantanamo, just
    because of distance.
        There is another consideration, and this goes in a sense to
    what Senator Burns and Senator Roberts said. We have a broader
    interest in a presence and influence in Latin America. In
    particular, a consistent and vigorous U.S. effort to deal with
    the transit and source zone problem are essential to our
    credibility in getting the countries in the region to take
    actions in their own interests and ours, particularly with
    respect to their own counterdrug efforts, an area where there
    is still a lot to do but where a fair amount of progress has
    been made.
        Third, I want to underscore the point that we recognize
    that this committee has always given especially rigorous
    scrutiny to military construction and other capital
    expenditures by the U.S. military on facilities overseas. This
    is as it should be, not only because we are trying to reduce
    the burden of unneeded infrastructure both overseas and in the
    United States, but because of the concerns that you, Mr.
    Chairman, in particular have raised about our long-term ability
    to sustain the level of operations that we now maintain.
        As General Wilhelm's statement I think makes clear, these
    are not the construction of new bases. To build new bases in
    this region to replace Howard would simply dwarf by many times
    the amounts of Milcon money we are talking about here. These
    are necessary measures on what I think is a pretty austere
    basis to bring these facilities up to the standards that we
    need to be able to operate from them.
        It is an efficient approach. It makes use of existing
    foreign airports and foreign facilities. Indeed, one of the
    main purposes of the FOL concept is to do this important
    mission with the smallest footprint possible. Over the long
    run, the forward operating locations will actually cost less
    than Howard would have cost had we continued to operate there
    and maintain that facility, had we been able to reach agreement
    with the Panamanian Government.
        And third, we are in this area, as I hope is the case
    everywhere, trying to accomplish the mission in a way that is
    most efficient not only from the point of view of dollars spent
    on military construction and operation, but burden on our
    people. General Wilhelm can give the details, but these will be
    relatively short tours for the air crew involved. The permanent
    presence will be extremely limited, something like a dozen
    people at each facility.
        As a part of recognizing the many pressures on the budget,
    but more important the pressures on our people and on key
    assets, we scrub very carefully every request to undertake a
    mission like this, and particularly because this is primarily
    surveillance aircraft, which are in heavy demand in other
    theaters. That is particularly the case here.

                            reduction in Deployments

        We believe we have struck an appropriate balance in
    allocating both the available inventory of surveillance
    aircraft and the pace at which they operate. As part of this
    effort, we are reviewing a number of our current overseas
    activities. Secretary Cohen yesterday was in Bosnia and
    indicated the very real prospect that we will be able to make
    substantial reductions in our deployments and our allies'
    deployments there in Bosnia, and we are reviewing both the size
    and, indeed, the need to continue our operations in a number of
    other areas.

                               prepared statement

        In summary, this is, as the committee--and we fully
    understand you know this--this is a very important mission. It
    can, under current circumstances, be conducted only from bases,
    facilities in the region, and we believe that we have put
    forward a proposal which is an efficient and, indeed, an
    austere one to get this critical job done at a minimal cost to
    the taxpayer and, equally important, at a minimal impact on the
    burden on our military service personnel who will have to carry
    out the mission.
        I look forward to answering the committee's questions.
        [The statement follows:]
                     Prepared Statement of Walter Slocombe
        Mr. Chairman, as always it is an honor to appear before this
    committee to discuss the Department of Defense's role in United States
    counterdrug activities, how these activities support our national
    security interests, and specifically the importance of Forward
    Operating Locations in an environment shaped by our changed
    relationship with Panama. I particularly welcome the opportunity to
    address these issues with General Wilhelm who, as CINC SOUTHCOM has
    personal responsibility for the counterdrug operations at issue. I want
    to thank both subcommittees for their support of the counterdrug
    program in general. Congressional support enables us to counter some of
    the drug threat, which costs our nation over 14,000 lives and billions
    of dollars each year.
    The Threat
        We as a nation face a comprehensive threat from drugs and must, as
    a nation, carry out a comprehensive response. Treatment and suppression
    of demand are critical elements, and are up to domestic law enforcement
    and other agencies. But dealing with the source of drugs must also be a
    key element of our effort.
        Nearly all the cocaine and most of the heroin consumed in the
    United States is produced from crops in Colombia, Bolivia, Peru and
    Mexico--the ``source zone.'' Drug traffickers transport the cocaine to
    the United States in a multi-step process by air, and over sea and land
    through a ``transit zone'' consisting of the Caribbean, Central America
    and the waters of the eastern Pacific. Areas through which illegal
    drugs flow into the United States and its immediate environs are termed
    the ``arrival zone,'' where DOD as well as federal, state and local law
    enforcement agencies cooperate to apprehend drug traffickers. While
    global seizures of cocaine average 270 metric tons per year, the
    current annual production capability of 550-650 metric tons continues
    to be sufficient to meet current user demands in the United States,
    Europe and South America. The bottom line is that while our progress
    has been significant, the threat remains very, very potent.
    DOD's Role in Counterdrug Activities
        The U.S. Government's role in counterdrug initiatives has evolved
    from disparate activities conducted by a various agencies to a unified
    mission characterized by joint military and civilian collaboration--a
    mission that was established by Congress and which has received
    consistent Congressional support. Congress passed the Anti-Drug Abuse
    Act of 1986, which gave the Executive Branch more authority to fight
    the tide of illegal drug shipments. Also in 1986, the President issued
    National Security Directive 221, which declared drug trafficking to be
    a threat to U.S. national security. Two years later, the Congress
    enacted another anti-drug abuse act in order to establish a coherent
    and comprehensive national policy to unify the efforts of the more than
    thirty Federal agencies and numerous state and local agencies engaged
    in counterdrug activities. The National Defense Authorization Act for
    Fiscal Year 1989 proved a watershed for Congressional interest in
    counterdrug activities conducted by the U.S. military, assigning
    primary responsibility for the detection and monitoring of aerial and
    maritime transportation of illegal drugs into the United States to the
    Department of Defense.
    The National Drug Control Strategy
        The 1999 edition of the National Drug Control Strategy embodies the
    1989 Act's mandate that the Department take the interagency lead in
    drug detection and interdiction. The Strategy states that our domestic
    challenge is to reduce illegal drug use while ensuring individual
    liberty and the rule of law. Our international challenge is to develop
    effective, cooperative programs that respect national sovereignty and
    reduce the cultivation, production, trafficking, distribution and use
    of illegal drugs while supporting democratic governance and human
    rights.
        The Strategy highlights the critical need to ``[s]hield America's
    air, land and sea frontiers from the drug threat,'' by interdicting the
    international flow of drugs in the transit and arrival zones. Yet, even
    in 1989, when the Department was first assigned the lead in aerial and
    maritime detection and monitoring, we knew that defending Americans
    from the influx of drugs in the arrival and transit zones represented
    only part of the solution. Going beyond the transit zone and into the
    source zones to break foreign and domestic sources of supply was and
    remains a key element of our integrated strategy. DOD pursues this
    element by working with source zone nations in both civilian and
    military capacities to provide intelligence, training and other
    building-blocks of national self-sufficiency regarding counterdrug
    activities. Under General Wilhelm's leadership, and in concert with the
    U.S. embassy country teams, the Southern Command has aggressively
    pursued these contacts with cooperative source zone nations.
        Consistent with Congressional direction, we have devoted
    significant resources to this endeavor, and we believe we have achieved
    significant successes. It is the Department's commitment to this
    Congressionally-directed mission that brings General Wilhelm and me
    before the subcommittees today. Our success to date has depended on
    effective aerial surveillance and interdiction of key drug transit
    routes. We need to reach beyond the transit routes and deep into the
    source zones to continue this fight. Quite simply, from both a military
    and policy perspective, we cannot continue to execute this mission that
    Congress has given us without the Forward Operating Locations. We must
    be able to project our own assets, our own detection and monitoring
    resources well into the transit and source zones. Without this ability
    to meet the threat where it originates, the Department will not be able
    to fully execute the mandate it has been given by Congress. Moreover,
    we will not be able to sustain the effort to convince the governments
    of producing nations to cooperate in regional, integrated efforts.
    Successes
        There have been some notable successes. Howard Air Force Base in
    Panama provided a key staging area for counterdrug missions into both
    the transit and source zones. Among other achievements, this capability
    helped U.S. assets support Peruvian interdiction efforts that disrupted
    the movement of cocaine base from Peru to Colombia by air. Peru's
    airborne interdiction of several dozen drug-trafficking aircraft over a
    three-year period resulted in the significant disruption of the
    traditional north-south airbridge between Peru and Colombia. As a
    result, Peruvian coca cultivation exceeded traffickers' transport
    capabilities and drove down coca prices. Depressed coca prices from
    1996 to 1998 dramatically reduced coca base production in Peru from
    more than 450 metric tons to 240 metric tons annually. In addition,
    coca cultivation declined substantially in Bolivia in 1998 as the
    result of ground interdiction efforts in the Chapare region and
    controls on processing chemicals.
        The net impact of these gains was offset by the increased coca
    cultivation in Colombia during the same period. Significantly, it is
    the Colombian production in particular that can be addressed by U.S.
    assets deploying from Forward Operating Locations. We are working with
    the Colombians and others in the region to address movement of cocaine
    hydrochloride--the ``finished product''--by air from local laboratories
    to transshipment points on the north and west coasts of Colombia. It is
    from these locations that cocaine is smuggled into Mexico and the
    United States. The infrastructure supporting the smuggling of cocaine
    by air has been the key to efficient operation of the cocaine industry.
    We cannot begin to attack this infrastructure--figuratively and
    literally--without the operational flexibility provided by the FOLs. In
    particular, the FOL at Manta, Ecuador allows us to reach this
    infrastructure deep in the Colombia source zone, Peru, as well as the
    increasingly popular eastern Pacific transit zone, although this
    facility requires improvements to realize its full potential.
    The International Dimension
        Regrettably, the option of continued operation from Howard Air
    Force Base in Panama is not available. The United States and Panama
    discussed at length the possibility of a continued U.S. military
    presence beyond the effective date of the Panama Canal Treaty but
    agreement was not possible. As a result, counterdrug operations from
    Howard Air Force Base ceased as of May 1, 1999.
        The importance of the counterdrug operation and the need for a
    forward-based U.S. presence to sustain it led SOUTHCOM to develop the
    current Forward Operating Location concept. The FOL concept, explained
    in detail in General Wilhelm's statement, uses existing airport
    facilities owned and operated by host nations that are made available
    under bilateral agreements. Indeed, the concept has already proven its
    value as U.S. aircraft have continued their detection and monitoring
    missions on an interim basis from the newly established Forward
    Operating Locations in the Netherlands Antilles/Aruba and from Ecuador.
    SOUTHCOM was able to put its FOL contingency plan into effect after
    closure of the Howard AFB runway on May 1.
        The Department of Defense will spend $247 million in fiscal year
    1999 on counterdrug activities in source zone countries this fiscal
    year, focusing on cocaine production and movement in Peru and Colombia.
    The Department will work with other U.S. agencies to dismantle the
    cocaine cartels and the cocaine ``business,'' and with the Peruvian and
    Colombian governments to break traffickers' air transit routes. The
    concentration of traffickers in this area, and their dependence on air
    routes, makes the source zone a special focus of our near-term efforts.
    The value of military presence options afforded by FOLs for this
    mission, specifically the additional location at Manta, Ecuador, cannot
    be overestimated. However, continued detection and monitoring efforts
    in the source and transit zones using the FOLs depend on Congressional
    support. Funds are needed both for operations and for construction of
    minimum essential upgrades to facilities. The inability to reprogram
    fiscal year 1999 operating funds, or a shortfall in fiscal year 2000
    construction funds, will force us to continue operating the Aruba and
    Curacao FOLs on an interim basis, deploying our personnel as
    expeditionary units: quality of life and efficiency will suffer
    drastically.
        On April 16, 1999, the Air Force was designated ``Executive Agent''
    for the FOLs. In this capacity, the Air Force will implement necessary
    upgrades and maintain the three planned FOLs. The Air Force determined
    that a total $122.5 million in MILCON funding is required to augment
    existing host-nation FOL facilities during the fiscal year 2000-2001
    period. This funding will support upgrades to facilities in Curacao,
    Aruba, and Manta so that the Department can continue to execute its
    statutorily mandated counterdrug mission.
    Conclusion
        The Department is firmly committed to meeting the goals of the
    National Drug Control Strategy as well as its congressionally-mandated
    leadership role in detection and monitoring. The key to continued
    effective execution of this mission is the ability to operate in the
    source zones. We cannot extend our reach in this manner without the
    Forward Operating Location strategy. I join General Wilhelm in urging
    your support and we look forward to working with you.

                        Forward operating locations cost

        Senator Stevens. Thank you very much.
        Mr. Slocombe and General, our attention was called to an
    Inside the Pentagon report on May 27. I am sure you must have
    seen it, and the real problem as pointed out in this, in many
    ways, and I am quoting, the Manta location alone was found
    earlier this year by a site survey to need such substantial
    modifications that it may eat up at least twice the $50 million
    in funds budgeted to start up the three initial FOL's.
        Each of the Caribbean islands was judged by the military
    site surveyors to require $50 million in long-term
    improvements. Concrete is deteriorating--I am just going down
    this--the debris is dangerous, lighting is substandard, the
    base has an emergency power supply but it is broken, and cable
    is deteriorating. As a result, the United States will have to
    build a power base, I guess. Something is missing here. The
    base water is not potable. It provides only 50 percent of the
    current demand. Air traffic control tower is antiquated.
        The Manta airfield, security at the airfield is plentiful.
    Wildlife abounds. Bird activity is horrendous. Off-base medical
    care substandard, should be avoided. It will take 6 months to
    improve the airfield, and office space for military personnel,
    and it goes on, is very critical.
        But the main point that was raised to me, though, is we
    would be replacing Howard, which was an accompanied tour base,
    with three forward locations where our people once again will
    be deployed without their families, and it just seems to me we
    ought to have some review of that.
        Now, General, you mentioned the savings over a 10-year
    period. I question whether there should be an agreement signed
    for 10 years without approval of Congress in any event, but
    beyond that, those savings are the savings from not having
    families with our people. That is the difference.
        As a matter of fact, I think if you put forward, operating
    on the FOL's, and if you put the cost of full family
    deployment, it would cost more for three bases than it did for
    Howard, so are we not redeploying this at the cost of the
    burden on our personnel by going to forward locations to
    operate without their families year after year after year? Is
    that not what this is all about?
        General Wilhelm. Senator, I do not think so. I think that
    this is a manageable proposition. As Mr. Slocombe mentioned in
    his testimony and in his opening statement, our personnel
    structure would be quite different. His numbers were correct.
    We project about 8 to 12 personnel permanently assigned to each
    one of these locations to handle the day-to-day management and
    contracting tasks that would be necessary to sustain operations
    at the FOL's.

                                  Deployments

        The deployments of the aircraft themselves, based on past
    patterns, these would not be lengthy deployments. Probably 2
    weeks up to 1 month at most. I think the shorter term
    deployments are things that most of our men and women in
    uniform have become pretty accustomed to. It is the long 4, 6-
    month deployments, the remote tours of 1 year, where families
    do not accompany their sponsors, that we really fracture the
    harmony and the cohesiveness of families.
        I personally have lived with these short deployments. Many
    of them are simply categorized as necessary training to
    maintain either a unit or individual readiness. Senator, very
    honestly I believe that is a manageable challenge.
        You are quite correct, the principal savings associated
    with a forward operating location as opposed to a base is the
    lack of a necessity to develop what we call a vertical
    infrastructure, schools, child development centers,
    commissaries, and PX's. But again, sir, given the short periods
    of deployments, I think these are very manageable challenges,
    and I think the services can cope with that.
        Sir, I did also read with considerable interest the article
    that you referred to in Inside the Pentagon. That article was
    published before the results of the site activation task forces
    were made available to me. Quite frankly, I challenge off most
    of that article. I visited Manta last week. The conditions that
    are cited in that report are quite frankly significant
    exaggerations.
        The local base commander, the Ecuadorean base commander has
    already corrected many of these shortfalls. In terms of foreign
    debris that was on the runways, the vegetation that had grown
    up around the runways has been cut back. Many of the
    deficiencies on lighting and other issues cited in the report
    have already been corrected, not by us but by the Ecuadoreans.
        A squadron operations building has already been freed up by
    the Ecuadoreans for us. It has been repainted. I toured the
    space in its entirety. I visited the Oro Verde Hotel, toured
    the entire facility right down to the main air conditioning
    unit with the manager of the hotel.
        In short, sir, I think that report was misleading, and I
    would note that a staff delegation went to Manta. I believe
    Senator Grahams' senior staffer was present, I think Ms.
    Hatheway, one of Senator DeWine's staffers were present. I
    believe the total delegation was about six to eight strong.
        They came back to Miami and gave me a completely different
    debriefing of what they found. The Customs Service
    representative there indicated that the facility was in a far
    better state of repair than he had been led to believe, and
    they essentially took the same exceptions that I did with the
    article that appeared in the Inside the Pentagon. I do not
    regard that as a credible piece of journalism.
        Mr. Slocombe. Mr. Chairman, could I add one point?
        Senator Stevens. My time is up. It is Senator Inouye's
    time.
        Senator Inouye. Thank you very much.

                          Forward operating locations

        Mr. Secretary, you have tried to describe to us the
    difference between the forward operating location and a base on
    the basis of cost. How long do we plan to operate out of these
    temporary locations?
        Mr. Slocombe. There is no reason that we could not continue
    to operate on this basis for an indefinite period of time. I am
    afraid we are going to have the drug problem for a long time. I
    think realistically we are going to have to operate from
    somewhere in that region for a considerable period.
        Senator Inouye. Then it would be appropriate for us to
    assume that it would be a long-term presence there, not 10
    years, but more than that.
        Mr. Slocombe. Even 10 years is a relatively short time,
    given the scale and the persistence of this problem. I am
    afraid we are going to have to be concerned about the import of
    illegal drugs into the United States from Latin America for a
    long time.
        One of the reasons why this is an attractive approach is
    that it means that at least the lower foreign cost of operating
    from the foreign bases in the long-term justifies the initial
    cost to bring the facilities up to standard.
        Senator Inouye. Whatever it is, if we are going to be there
    for several decades you will have to appropriate additional
    funds to maintain our presence there.
        Mr. Slocombe. There is no question we will have to
    appropriate funds both to conduct the operations and to
    maintain the facilities.
        Senator Inouye. In our negotiations with the host nations,
    have we set down specific time periods and, if so, what are
    they?
        Mr. Slocombe. The current arrangements run about 1 year,
    and will be renewed, and we look forward to having an agreement
    for a long-term presence and long-term use of the facilities.
    The precise duration has not been agreed yet.
        I have to say, we found both in the case of the Ecuadorean
    and the Dutch Government, who have responsibility for Curacao
    and Aruba, that they understand the importance of the mission
    and have been supportive of the idea of our using the
    facilities.
        Could I just make one point, going back to the issue--my
    understanding is that the crews for the aircraft that did the
    surveillance out of Howard often were not personal change of
    station (PCS). Their families were often not with them in all
    cases. Those are the people who will be going on a temporary
    basis to these airfields to operate. The people who are there
    on a permanent basis, the dozen or so may well take their
    families with them. That is an issue to be worked out.
        Senator Inouye. What is the so-called temporary assignment
    time period? How long can they expect to be there?
        General Wilhelm. Sir, that is a decision that is normally
    made by the services. As a practical matter, looking as Mr.
    Slocombe mentioned, it was truly the temporary duty (TDY) air
    crews that did most of the work out of Howard.
        The normal deployments, based on my observations, were
    about 2 weeks to 6 weeks, but I would like to run the line on
    that, sir, and provide you a precise answer through the
    quadrennial defense review (QFR), sir. I will give you a good
    profile on exactly what our deployment time lines were for TDY
    people to Howard. I think I am probably fairly safe in saying
    that I think you would see it parallel at the forward operating
    locations. So, sir, if I might, I will get back to you on that.
        Senator Inouye. I thank you.
        Mr. Secretary, in your statement you note the quality of
    life and the efficiency of our forces will ``suffer drastically
    if Congress fails to approve your reprogramming request.'' Does
    this mean that if Congress denies this request DOD will still
    proceed with the establishment of the FOL's anyway?
        Mr. Slocombe. No. We will not do what we do not have the
    authority and money to do, but we will have to find some other
    way to execute the mission.
        Senator Inouye. Under what authority would you be operating
    these FOL's?

                                  FOL concept

        Mr. Slocombe. We believe, and this actually goes back to a
    point about the reprogramming. The reprogramming is not for
    money for Milcon. It is for funds out of an operating, in
    effect a holding account for the counterdrug money to use for
    the operations at the FOL's.
        We believe we have authority, and it has been the
    consistent practice that we can operate on the basis of using a
    facility and pay the operating costs out of operating funds.
    That is what we are doing now.
        We believe that we can make a case and that we are
    confident that we will be able to carry forward on the FOL
    concept. Just how we would manage if we were not able to do
    that, we would have to work with the committee and work with
    the Congress and work with the services and the command to
    figure out some other way to do it.
        I think it would be more expensive in the long run, and it
    would almost certainly have a bigger impact on the people.
        I am informed that the specific authority for the FOL's and
    for the operation is section 1004 of the National Defense
    Authorization Act for Fiscal Year 1991, but in general it is
    our authority to conduct these counterdrug operations.
        I emphasize the point that the reprogramming has to do with
    operating money, and not with Milcon money.
        Senator Inouye. General Wilhelm, in your statement you
    stated that out of Howard there were 2,000 missions, and out of
    these new bases, how many do you anticipate, the same level of
    activity?
        General Wilhelm. Sir, assuming that we would get roughly
    the same commitment of resources, we would hope to achieve
    about the same level of activity. That was 2,000 missions out
    of Howard each year, and on a normal day we have 21 aircraft of
    various types, models, and series committed to the counterdrug
    mission.
        Yes, sir, I would hope we could maintain a steady state for
    resource commitment and could roughly duplicate that tempo of
    operations from the forward operating locations.
        Senator Inouye. The question that the chairman asked on the
    cost difference related to a family accompanying and not, I
    hope you can provide that to us, what would be the difference
    if families were there.
        General Wilhelm. In terms of the cost factor, sir, if we
    had to recreate and build an entire base, I suspect the cost
    would be very large indeed.
        Senator Inouye. Can you provide that to us?
        Mr. Slocombe. We can try to provide an estimate, at least.
    Without doing a comprehensive survey it would be hard to tell
    what it would cost to build a full-up permanent base in one of
    these countries.
        You and the chairman are right, the cost probably somewhere
    is paid because the schools, the housing, the support of the
    family, it will be paid somewhere, presumably, but it will be
    in the United States, but the operating cost will be
    substantially lower.
        General Wilhelm. Senator, there is no question about it,
    the recreation of a Howard Air Force Base like facility in
    Latin America would be an enormously expensive proposition,
    there is no question about it.
        Mr. Slocombe. And also, running Howard for 10 years would
    be an expensive proposition.
        Senator Inouye. Thank you.
        Senator Stevens. Senator Burns.

                                   Retention

        Senator Burns. Senator Stevens and I had an opportunity to
    go on a trip to the Middle East. He mentioned retention, and as
    I visit our different military personnel and facilities around
    the world, I am increasingly concerned about our ability to
    build noncommissioned officers (NCO's) and to obtain skilled
    people.
        We met with a group and Senator Inouye was there in Saudi
    Arabia where Air Force personnel, tech sergeants, staff
    sergeants, men and women who had been, say, in the Air Force
    for some 8 to 14 years were on their eleventh trip to the
    Middle East since 1991, and were leaving the Armed Services.
        They were highly skilled people. They were AWACS, they were
    radar technicians on AWACS, and that continues to I think
    bother and concern our chairman whenever we start talking about
    the nuts and bolts of really operating an efficient military
    organization, and that is my concern.

                          Aruba and Curacao operations

        General, you have recommended Aruba and Curacao. They are
    only 10 miles apart. What is the difference in their
    operations, and can that operation be combined?
        General Wilhelm. Sir, the operation cannot be combined, and
    the problem is the capacity of the two airfields. As you point
    out, the two islands are approximate to each other, but if you
    look at the ramp space to park aircraft, if you look at the
    capacity to make launches and recoveries, they are relatively
    small facilities.
        You need both to get the full coverage that we require, and
    the breakout that we have done thus far in an operational
    context would primarily place customs assets at Aruba,
    principally their P-3's, where our Air Force assets would
    operate out of Curacao, but neither base on its own is
    sufficiently large to handle the numbers of aircraft that we
    need to conduct the mission, so that is the reason for the two.

                      consideration of alternate Locations

        Senator Burns. In the overall picture of this, did we
    consider Honduras, Puerto Rico, or Guantanamo? Were any of
    these facilities considered in the overall scheme of things?
        General Wilhelm. Senator, they certainly were. We took a
    close look at Honduras, but as you know we have had a
    continuous presence there since 1983, so we are pretty familiar
    with what that base will support, and what it will not support.
        We really ran into a series of really three constraining
    factors there. First, there was some reluctance on the part of
    the Government of Honduras to open Soto Cano up for large-scale
    counterdrug operations.
        Second, Senator, I really needed to find a home for the
    Army helicopters coming out of Panama, and we already had
    rotary wing aviation assets on the ground at Soto Cano, so it
    made good sense to marry those aircraft up with the ones that
    were already there. That way we did not have to duplicate
    maintenance supply and other structures at some other place.
        Third, and probably most important, is geography. There are
    some high elevations in and around the airfield at Soto Cano
    that make it impossible for many of our aircraft to take off
    with a full fuel load, so they end up with constrained time on
    station and a lot of our counterdrug aircraft are not
    configured for aerial refueling, so that was really a hard
    constraint against wholesale use of Honduras.
        As far as Puerto Rico is concerned and Guantanamo Bay,
    those facilities are being used. The Coast Guard, as I think
    you are aware, Senator, uses the Borinquen facility very
    heavily in Puerto Rico to conduct many of its counterdrug and
    other operations in what we refer to as the transit zone.
        As we have come out of Panama I have identified airfields
    in Puerto Rico as the basing locations for our theater airlift
    assets, so we have put our C-130's in there to support our
    other regional engagement missions.
        Sir, as you know, our facilities at Guantanamo are somewhat
    limited, and it is a tough runway to get in and out of with the
    air space restrictions. Again, the Coast Guard and the Navy use
    that probably just about up to the limits of its capacity, and
    it does support many of our operations in the transit zone, so
    sir, we really did look at just about every option we had in
    the region.

                                     FOL's

        Senator Burns. Mr. Slocombe, would you give the committee
    an update on negotiation with these countries for a permanent
    presence there, and I say that because we are going to make
    some capital expenditures, and I would like to know the status
    of the negotiations of the recommended FOL's.
        Mr. Slocombe. The short answer is, we are discussing with
    both the Netherlands, who as I say have responsibility for the
    Netherlands Antilles in this area, although they have to talk
    to the local Governments as well, and with Ecuador, for long-
    term arrangements which would provide the status of continued
    eligibility, I guess, continued agreement to our use of the
    facilities, and in particular continued, the equivalent of a
    status of forces agreement.
        It is not formally a status of forces agreement, but it
    provides protection for our people against jurisdiction by the
    local courts for official acts, the kind of issue which is
    important if you are going to have people operating, even on a
    temporary basis, out of a location, and in practice we will not
    make investments, we will not do the construction until we have
    a long-term commitment. I do not necessarily mean a commitment
    forever, but a long-term commitment.
        There is a meeting with the Netherlands tomorrow, the 15th,
    and a meeting with the Ecuadoreans within a couple of weeks,
    and the indications are that we will be able to work out our
    arrangements. The progress is going forward, and in any event
    we are confident on the point we will not spend the money.
        Senator Burns. Mr. Chairman, with your indulgence, I have
    one more question along those lines.
        I understand a major issue remains as to whether or not
    U.S. forces have the authority to operate and bear arms at
    forward operational locations to protect our deployed assets.
    Give me an idea, or would you comment on that issue for the
    committee, and the status of those discussions with those host
    governments?
        Mr. Slocombe. My understanding is the host governments are
    agreeable to U.S. personnel having firearms for security
    purposes. They do now, and this should not be an issue as far
    as we understand.
        Senator Burns. Thank you, Mr. Chairman.
        Senator Stevens. I thank you.
        Gentlemen, I am informed that our special operations forces
    deployed to 152 countries, foreign countries, foreign
    territories included, with 123 counterdrug missions in 22
    countries last year.
        We have got people in Haiti and in Kuwait and Saudi Arabia.
    We have got people in Iceland. We have got people in Bosnia. We
    have got people in South Korea. Two of those are accompanied,
    all the rest are not.
        Now, when you look at this, we travel a lot, probably too
    much, and we ask too many questions. I remember two pilots that
    visited me in Britain, I think it is 18 months or 2 years ago,
    roughly. They had been with their families 3 months out of the
    last 3 years, each year. They had been deployed to Kuwait, and
    then redeployed to Bosnia, they had been deployed elsewhere,
    and they were getting out.
        Now, that is what I see is what is happening here now. We
    are going from an accompanied tour to an unaccompanied tour
    status in the war on drugs, which we support, but it does not
    seem to me to have been thought through very well about
    personnel.
        What about security, General? This is probably one of the
    most violent places in the world today because of the drug
    activities. We are going to have 15 to 20 people in, what,
    three different, four different locations. Are you going to
    have an extra marine detachment there to protect them? Who is
    going to protect them?

                                Force protection

        General Wilhelm. Sir, the issue of force protection I will
    tell you right up front is job one for the United States
    Southern Command. That is the first thing we look at before we
    deploy any force for any period of time to any location.
        The security of the force, as you would expect, normally
    comes from one of two sources. Either the host nation provides
    security forces, or we provide augmenting security forces.
        Senator, that is really one of the foremost tasks that I
    levy against my intelligence organization, and that is to stay
    dead on top of the security situation at every location where
    we have troops deployed in Latin America and the Caribbean.
        I have told them, I do not want information day to day, I
    want it from minute to minute about the security conditions
    there. For example, we received a report that one of the young
    men, one of our first deployers to Ecuador, had been accosted
    outside of his hotel room in Manta. He had been confronted by
    two knife-wielding assailants. They took his billfold with $20
    and a hand-held radio. We are working on that right now with
    the Ecuadorean authorities.
        We are very conscious of the fact that we need a buddy
    system when people on liberty, or are at and around town. We
    are working with the Ecuadoreans to get better security around
    our billeting locations. This was a criminal act, sir. I only
    bring that up anecdotally to let you know how much importance I
    place on that. Sir, we will never blink our eyes where force
    security is concerned.
        Senator Stevens. Do you think these four bases are secure
    without an occupational security force?
        General Wilhelm. Sir, I believe these are secure locations.
    Yes, sir, I do.

                    AWACS/retractable over the horizon radar

        Senator Stevens. Apparently AWACS are part of the key to
    this. What happened to that over-the-horizon radar we took from
    Manchikta and put in Puerto Rico for this purpose? Are you
    using it?
        General Wilhelm. Yes, sir. Not the Puerto Rican radar quite
    yet. Senator, as I think you know, the initial operational
    capability for the relocatable over-the-horizon radar in
    Vieques, Puerto Rico, is in fiscal year 2000.
        The two radars that we have right now that give us the deep
    look and broad area coverage are the ROTHR's in Virginia and
    Texas. When we stand up the third radar in Puerto Rico it will
    improve our coverage particularly of the deep source zone. The
    issue here, sir, is that the radars do different jobs.
        Senator Stevens. I understand that, but are they going to
    take some of the pressure off the AWACS? You need three AWACS
    now, rather than one.
        General Wilhelm. Sir, we actually use two AWACS. That is
    the asset level that is assigned to us by the Joint Chief of
    Staff (JCS). We have not had two.
        Senator Stevens. You had three circles?
        General Wilhelm. No, sir. Those were the operating radius
    out of the three FOL's. We would not necessarily have an AWACS
    at each one of those. In fact, we would probably have no more
    than two at any given time, because that is the asset ceiling
    that has been assigned by JCS. Those circles simply depicted
    the operational coverage that we could achieve from each of the
    three FOL's.
        Again, it is our duty to make clear that the ROTHR's
    provide us with the initial tipper. They let us know that an
    aircraft has taken off. The locating data is not precise. Ten
    to 20 miles is about as close as we get.
        We do not get altitude. That is when the AWACS, when the P-
    3 domes come in. They add more precision to the locating data
    on the contact, its direction of flight, its altitude, and that
    is how we start to build a case toward a track of interest. But
    all of the radars have to work together to make this happen.
        Senator, I am sorry if the chart created confusion. We
    actually rate only two AWACS assigned Southern Command for this
    mission, and since the crisis in Kosovo we have only had one.
        Senator Stevens. I went down and rode the P-3 out of Key
    West into this area, and was briefed on what they were doing to
    support the counterdrug activities. Why is it we cannot use
    some portion of these forces out of Key West, from our own
    soil?
        General Wilhelm. Sir, we do fly some missions out of Key
    West.
        Senator Stevens. I know, I flew in them, but why don't you
    use that location rather than these?
        General Wilhelm. Sir, the operational reach from Key West
    would not get into either the southern source zone nor--our
    southern transit zone, excuse me, nor would it even touch the
    source zone. It is simply too far away. We would end up
    covering only really the northern and central regions of the
    Caribbean. We could not cover Central America from there, and
    we would get no coverage of the Pacific movement vectors.
        Senator Stevens. Mr. Slocombe, would you give the committee
    the estimate of the total numbers of military personnel
    deployed overseas in fiscal years 1998, 1999, and projected for
    2000, please?
        Mr. Slocombe. I have the numbers, if you will bear with me
    for a second.
        Senator Stevens. You can give those for the record, if you
    like.
        Mr. Slocombe. Let me give them for the record.
        [The information follows:]

                   Excerpt From Joint Staff Information Paper

        Subject: Under Secretary of Defense for Policy Testimony
    Regarding Overseas and Long Term Contingency Deployments
        Purpose.--To respond to a Deputy Assistant Secretary of
    Defense for Drug Enforcement Policy and Support request for
    information.
        Total number of military personnel deployed overseas.--This
    number is best presented by the average number of active duty
    U.S. military personnel deployed, not stationed, on any given
    week overseas in support of contingency operations. This number
    does not include those deployed in a temporary duty status or
    those deployed for exercises.
        [Deleted.]
        Fiscal year 2000--Estimate not available.

        Senator Stevens. I sort of am going back where Senator
    Burns was. It does seem to us that the two, Aruba and Curacao,
    are so close together in terms of the availability of the other
    two sites, that the necessity of having four sites in this area
    is stretching our capability more than we should stretch it. I
    would urge you to take a look again as to whether we should
    spend defense funds for the infrastructure and base operations
    on a site that is for the Customs Service.
        I have been trying to get people to do that in California
    and in Arizona and New Mexico for years, but we will not do it,
    but here we are spending money outside of our country for the
    same operations to protect South American countries. I think we
    need to develop a real definite United States policy of what we
    are going to do with military assets in terms of the war on
    drugs, but we are not currently using them to protect our own
    borders.
        When we were down on the Arizona border 2 weeks ago, there
    were almost as many people coming into Arizona daily as there
    are going into Albania from Kosovo, straining a whole operation
    down there as far as immigration, customs, and border patrol.
        In this area that you are operating in, the military takes
    the full brunt of the whole operation, but you will not take
    any in the United States. I really see the development of some
    very inconsistent policies in terms of the use of military
    force to support the war on drugs, and I hope to have that
    reviewed by another committee.
        Senator, do you have any further questions?
        Senator Inouye. No, thank you.
        Senator Stevens. Senator Burns.
        Senator Burns. I guess I am concerned about our expenditure
    further out than just, here we are, we have got a request now
    for a reprogram of funds, and how we are going to move some of
    those dollars around, and we have yet to figure out how we are
    going to do that, General. We are supportive of the drug
    intervention program down there, let there be no doubt about
    that.
        There will always be drug flow into this country for the
    simple reason this country has got the money to buy them, and
    that is it. You are never going to stop drugs coming into this
    country until we run out of money, and that is just a fact, and
    of course you have a terrific mission ahead of you.
        But you know, I think the stabilization, the security of
    the area also has far-reaching yields in the best interests of
    this country. I am just wondering, have you given any thought
    what we are going to need, say, past this initial investment in
    capital expenditures, what it is going to take in the next 5
    years?
        I guess I am an old county commissioner. We really did not
    get the efficiency of our county down until we did a 5-year
    budget, and what we did this year affected what we could do 5
    years down the road. I would kind of like to get ahead of the
    hounds a little bit. Have we had any kind of a projection or
    demand on our funds in that respect?

                              Five-year projection

        General Wilhelm. Senator Burns, that is a wide-ranging
    question, of course, and I will take it on in that context, if
    I might.
        Senator Burns. You might just give a thumbnail, because I
    know you cannot be too precise. I understand that.
        General Wilhelm. I think probably one of the most often-
    used statements when we talk about the drug struggle is that
    there is no silver bullet, and that is quite correct. I think
    that we can have a very powerful impact on this problem, but we
    are going to have to do it in a variety of ways, and I will
    just work from south to north, and I will do this very quickly.
        I encounter a lot of frustration, and sometimes the feeling
    that this is mission impossible. I do not agree. There are
    three countries, really, that produce drugs. They are Peru,
    Colombia, and Bolivia, and we are winning the war in two of
    those countries today. Cultivation was down 26 percent in Peru
    last year, 17 percent in Bolivia, and their production of base
    was down 25 percent in both countries.
        The problem was the 28 percent increase in Colombia, but we
    are doing some pretty vigorous things right now with Colombia
    to help them more effectively counter the drug threat in their
    country. It is going to take some time, but I am one of those
    that is cautiously optimistic--not many of us, but I am
    cautiously optimistic about Colombia, its national resilience,
    and its ability to overcome its problems.
        So two out of three is the way I look at it in the source
    zone, and I think we have got some pretty good programs to do
    that.
        We knocked off 147 metric tons of dope in route to the
    United States last year. That is not too bad. I would like to
    get 200 metric tons this year.
        In his national drug control strategy, General Barry
    McCaffrey has created some hard goals for us to achieve, 10
    percent reduction by 2002, and about a 20-percent reduction by
    2007. We are going to work hard to make that happen and, of
    course, that is nipping the stuff before it gets to the
    frontiers of the United States.
        Again, Senator, things like the forward operating locations
    are absolutely indispensable if we want to do this. I am an
    infantryman. I always want----
        Senator Burns. Primarily you are a rifleman first and then
    everything else comes later.
        General Wilhelm. Absolutely, sir, and you always want to
    defeat the enemy as far forward from your main battle position
    as you possibly can. I would like to win as much of this war as
    we can in the source zone, pick up the bleeders in the transit
    zone, and then, as Senator Stevens and Senator Inouye
    suggested, we probably need to buttress the defenses right
    along our own borders, right in the wire, so to speak.
        But I view my job as fighting the deep fight, going down
    and bloodying their nose in the source zone, try to give them
    two black eyes in the transit zone, and make them weak before
    they get to the arrival zone.
        If we do all these things, eradication, interdiction,
    alternative development, the things that State and the rest of
    the interagency do, sir, we can win this thing.
        Senator Burns. Mr. Chairman, I know most that my Ranking
    Member, Senator Murray of Washington, would probably have some
    questions this morning. She is involved in other issues, and if
    she has questions of either of you, I would appreciate if you
    would respond both to the committee and to Senator Murray out
    of respect, and I appreciate you having this hearing this
    morning.
        Senator Stevens. Yes. She is on the floor. May I ask,
    Senator, have you received the supplemental for the $122.5
    million for Milcon?
        Senator Burns. We have not.
        Senator Stevens. We have seen an outline of it. When are we
    going to receive it?
        General Wilhelm. Senator, I know that--I think the document
    is called a 1391. I am looking at Steve Cortese. He knows these
    kinds of things. I know that those documents were cut for the
    $122.5 million, sir. I do not know where they are, but I am
    sure between Mr. Slocombe and I we can find them.
        Senator Stevens. We have not seen the projection. As
    Senator Burns mentioned, we normally do get a 5-year
    projection. We got the $45 million reprogramming, and then we
    understood there is another sum coming for the year 2000,
    $122.5 million, and we do not know, and that was for augmenting
    facilities at the existing sites, and we were told that there
    would be further funds for the increases in operational
    maintenance and personnel cost, and we have not seen those. I
    think it would be helpful if we could see those.
        Are you operating planes out of these four bases now?

                              FOL funding concerns

        General Wilhelm. Sir, we are, out of all of them, out of
    Curacao, out of Aruba, and out of Manta, that is correct.
        Senator Stevens. You have made some changes, I assume, out
    of your operating accounts for that.
        General Wilhelm. Yes. Well, this was money that was
    previously in the accounts to conduct counterdrug operations,
    and as I mentioned in response to a previous question, we have
    done the things that we could do on the ground at Manta to
    correct the deficiencies that were there, and we have gotten a
    thumbs up from the Customs Service and from Navy, who have
    operated the P-3's, that it is an acceptable base from an
    operational and safety standpoint.
        Sir, if I could clarify one point, the Milcon requirements
    are for $42.8 million in 2000 with the balance in 2001, so it
    is not all in fiscal year 2000.
        And if I might return to one point for just a second,
    because I am confused right now about the reprogramming action.
    That reprogramming action was for fiscal year 1999. That was
    $45 million, and all of that was in the O&M accounts, and
    Senator, only $6.1 million of that was related to the forward
    operating locations. The majority of those reprogramming funds
    were to support other consolidations, and movements that were
    associated with the closure of our bases in Panama.
        I do not quite know what happened here.
        Senator Stevens. We did not approve it. The main reason
    was, it seemed to me, and I consulted with Senator Inouye, it
    looked like we were going to implicitly approve the creation of
    four new bases overseas without any congressional hearings at
    all, and after our experience in Haiti and in King Sultan and
    Kuwait, it was just not the thing to do in our opinion. We
    think the public should have knowledge if we are going to start
    a new series of bases overseas, they are going to be ongoing
    for a period of time, and Mr. Slocombe was correct when he says
    that 10 years it is going to be a short time on this.
        Now, if this is a new policy to replace Howard and replace
    it with four bases instead of one, the public ought to know.
    That is one of the costs of the Panama Canal agreement, but it
    is also one of the costs of the war on drugs, and this time it
    is coming all out of defense. It is the first time I have seen
    it come all out of defense, General.
        In the past, with the Coast Guard, we transferred some
    money to the Coast Guard, and the counterdrug funds were
    transferred to the Coast Guard, and the P-3 I flew on was
    reimbursed by the Coast Guard, or by the drug operations to the
    Coast Guard. This, you are not seeking any reimbursement from
    the other funds. This is using defense funds now for
    counterdrug activity straight up, and I think there should be a
    record on that, and we should understand what you are doing.
        I am not dissatisfied with your explanation. I am not too
    happy about it, but I think you have answered our questions,
    and we will consult with the committee to see what we will do
    about the reprogramming, but it just did not seem to us that we
    ought to approve a reprogramming of operation and maintenance
    (O&M) funds for the counterdrug activities in a fashion that
    you could implicitly assume that we had approved the concept of
    replacing Howard with four different bases.
        General Wilhelm. Senator, I can completely appreciate your
    concerns. The reason I wanted to mention it, sir, was I read
    your letter of, I believe June 28, and the issues that are
    addressed in there I had a hard time correlating with the real
    purpose for the $45 million reprogramming action.
        Senator Stevens. We did not get the breakdown of how you
    were going to spend the $45 million until after I sent the
    letter. Then we were told the specifics.
        The reprogramming request was not specific. It was just for
    use in four locations overseas of O&M money for the drug
    operations, and we just wanted to have a record on it, and now
    that we have it, as I said, I am not too happy about what I
    see, because I see further stress on the forces from
    unaccompanied tours for a period of time ahead of us that is
    going to lead to worse statistics as far as reenlistment is
    concerned.
        I do not know the answer to it. I am sure you do not know,
    either, but I am getting to the point where every time I talk
    to these young pilots--it is particularly pilots that we have a
    real shortage of now. Do you have any knowledge of what the
    shortage of the AWACS pilots is now?
        General Wilhelm. Sir, I do not know.
        Senator Stevens. We will have to track that down.
        Senator Burns. Well, Mr. Chairman, I just want to make a
    point. We sat there, all three of us sat there and listened to
    those young folks, among NCO's. I mean, these are the skilled
    people that I think are the nuts and bolts of making this thing
    operate, and that was very enlightening, that day we spent, and
    we threw everybody out of there and just had a very frank
    conversation with those folks, so that is a concern.
        I thank the chairman.

                         Additional committee questions

        Senator Stevens. We did that in Kuwait, at King Sultan.
        Thank you very much, gentlemen. We appreciate it.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                  Questions Submitted by Senator Conrad Burns
          dod forward operating locations for counter drug operations
        Question. Why did the Department not request military construction
    funding for these forward operating locations as is the normal practice
    for constructing military facilities overseas?
        Answer. The request was based on what was believed to be the
    established precedent concerning MILCON and the DOD's Counterdrug
    Central Transfer Account (CTA). The precedence was the Department's
    fiscal year 1995 CTA request, which included $10,000,000 in MILCON
    funding for the construction of a Relocatable Over-the-Horizon Radar
    (ROTHR) in Puerto Rico. The Congress appropriated this MILCON amount as
    a part of the CTA in Public Law 103-335.
        Question. It appears that there are additional funding requirements
    for these bases over the next several years. Will the military
    construction budget for fiscal year 2001 include these additional
    projects?
        Answer. Yes, the military construction funding for the remaining
    requirements at the FOLs will be forwarded as a part of the fiscal year
    2001 MILCON budget.
        Question. What will be the legal basis for U.S. deployed or
    stationed personnel in both the Netherland Antilles and Ecuador?
        Answer. All personnel will be at the Forward Operating Locations
    pursuant to bi-lateral access agreements with the respective countries.
    They will be deployed to fulfill our 10 U.S.C. 124 detection and
    monitoring mission.
                             fol negotiation status
        Question. What is the status of negotiations with these countries
    on securing a more permanent agreement to base our forces?
        Answer. The status of FOL negotiations are fluid. Ambassador Brown
    is doing a superb job in securing these agreements and is in the best
    position to provide you a current status of the negotiations. I am
    confident that these agreements will be secured in the near future.
                             concept of operations
        Question. Could you begin by describing how you envision the
    concept of operations for each of the three bases in Aruba, Curacao,
    and Ecuador?
        Answer. These sites will replace the capabilities lost with our
    departure from Panama but without the overhead costs of building a
    base. This is achieved through forward operating location (FOL)
    agreements.
        FOL agreements with host nations enable us to use their existing
    facilities, upgraded to U.S. standards, for the conduct of counterdrug
    operations throughout the source zone and to do so at considerably less
    expense than our operations from Howard Air Force Base.
        The Caribbean sites of Curacao and Aruba are to focus on the
    transit zone and the northern portion of the source zone. Light and
    medium aircraft (C-550, C-130, F-16 and P-3) will fly from these sites
    in support of our detection and monitoring mission. Curacao will also
    be capable of hosting heavy aircraft (E-3 AWACS and KC-135).
        Manta, Ecuador, will be capable of hosting all three weight classes
    of aircraft and is the most critical of the three sites. Manta provides
    the flexibility to conduct intelligence-cued operations throughout the
    deep source zone with little or no warning to narco-traffickers. The
    necessity to maximize the use of limited assets, like the AWACS, makes
    Manta the right place. No other FOL provides the flexibility to direct
    this strategic asset against the shifting patterns of the narco-
    traffickers in Colombia, Peru, and Bolivia.
                                   facilities
        Question. What is the current state of facilities and
    infrastructure at each of these locations?
        Answer. Facilities and infrastructure at the Forward Operating
    Locations (FOLs) is generally good but will require approximately
    $122.5 million in upgrades to meet U.S. operational and safety
    standards. To reduce costs, we will use host-nation facilities to the
    maximum extent consistent with U.S. operational, safety, and quality of
    life considerations. The Aruba Airport Authority currently provides
    adequate office space inside the airport terminal and sufficient ramp
    space adjacent to the main commercial ramp. Renovation on the Aruba
    airport terminal, scheduled to begin on 1 November 1999, will require
    construction of temporary office facilities. In Curacao, the host-
    nation government and the Dutch military allocated sufficient aircraft
    ramp space and assigned temporary office facilities. In Manta, host-
    nation military facilities are supporting limited operations. Local
    civilian establishments are providing billeting and messing support at
    all three locations.
        Question. Describe the type of facilities that Southern Command and
    the Air Force agree are needed for each of the locations?
        Answer. To meet U.S. operational and safety standards, all three
    Forward Operating Locations (FOLs) require additional aircraft ramp
    space, adequate aircraft maintenance facilities, and permanently
    assigned office spaces. To reduce costs, we will use expeditionary
    facilities at each location where possible. Manta Air Base (AB)
    requires more upgrades to meet U.S. operational and safety standards
    than Curacao and Aruba international airfields. Manta requires moderate
    upgrades to crash/fire/rescue capability, bulk fuel storage capacity,
    and billeting/messing facilities. We estimate the total construction
    cost for all three FOLs to be $122.5 million.
                        military construction estimates
        Question. Finally, what are our military construction estimates for
    each of the bases in Aruba, Curacao and Ecuador?
        Answer. For the sake of clarity, Forward Operating Locations (FOL)
    are not bases. FOLs are host nation facilities where the U.S. is
    granted use and access for the purpose of conducting counterdrug
    operations. Military construction is limited to those areas necessary
    to support U.S. counterdrug operations.
        For fiscal year 2000 we must receive $42.8 million of which $10.8
    million will be used for consolidated planning and design of all three
    FOLs, with the remainder being used for airfield pavement/site
    improvements at Manta, Ecuador. Manta will require the bulk of the
    expenditure to enhance the parking ramp, runway and taxiways. The
    upgrades will allow us to accommodate four large aircraft (E-3, AWACS
    and KC-135) and four medium (E-2, P-3, C-550, C-130, and ARL) aircraft.
        In the following fiscal year the remaining $79.7 million is needed
    to complete upgrades in all three sites ensuring adequate, safe and
    mission essential facilities from which to operate.
                      construction of temporary facilities
        Question. It appears that we plan to construct permanent facilities
    at each of these forward operating locations. Why not use more
    temporary facilities?
        Answer. We are using host nation facilities to the maximum extent
    possible at each of the locations. We will only build essential
    facilities that we cannot obtain from the host nation. In the initial
    stages of developing the forward operating locations, temporary
    facilities were used, and where temporary facilities can support the
    operation, we will retain those temporary facilities.
        Temporary facilities, however, like the Air Force's ``Harvest
    Bare'' camps, are currently being used for interim facilities which
    will continue until more permanent facilities can be completed. These
    types of facilities (tents and prefabricated structures) are effective,
    but have a limited useful life. After 18-24 months they require
    replacement or significant maintenance.
        Permanent support facilities will be constructed using materials
    and methods which will result in the least cost, both in terms of
    initial construction and routine operations and maintenance.
    ``Expeditionary'' type facilities (pre-engineered buildings, K-spans,
    etc.) will be considered where practical.
                            operational requirements
        Question. What are the operational requirements for Aruba and
    Curacao installations?
        Answer. The operational requirements for Forward Operating
    Locations in Aruba and Curacao are:
      --An operational capability of twenty-four hours per day, seven days
            per week.
      --Night and all weather landing/takeoff capability with manned air
            traffic control facilities.
      --Runway length of at least 8,000 feet, with a load bearing capacity
            for AWACS and C-141 aircraft.
      --Refueling/Defueling capability.
      --Crash, Fire and Rescue services.
      --Ramp, Hangar, Office and Storage space.
      --Communications capability to support aircraft maintenance
            requirements, and connectivity with command and control
            organizations such as Joint Interagency Task Force East (JIATF-
            E).
                    alternative forward operating locations
        Question. Did the department consider our facilities in Honduras,
    Puerto Rico and in Guantanamo Bay to conduct these operations? Please
    explain why these are not being used rather than new locations?
        Answer. Yes, and all three locations continue to support
    counterdrug operations just as they did prior to the closure of Howard
    Air Force Base.
        Soto Cano Air Base, Honduras, is the home for a majority of Army
    aviation assets in theater. These assets support counterdrug operations
    such as CENTRAL SKIES as well as many non-counterdrug missions.
    Although the topography of the region limits Soto Cano's use as a
    Forward Operating Location, it can be used to support surge operations
    in the Eastern Pacific and in Central America.
        The geographic location of Guantanamo Bay, Cuba, and Naval Station
    Roosevelt Roads, Puerto Rico, allow Department of Defense, Coast Guard,
    and Customs Service detection, monitoring and tracking assets to
    continue supporting counterdrug operations in the Caribbean transit
    zone. These locations, however, do not provide the required operational
    reach into the South American source zone and large portions of the
    Eastern Pacific.
                      construction of temporary facilities
        Question. How long is it anticipated that our forces will remain at
    these forward operating locations?
        Answer. We anticipate a network of interlocking Forward Operating
    Locations (FOLs) will be necessary until we have achieved the targets
    and goals directed in Presidential Decision Directive 14 and the
    National Drug Control Strategy. Ongoing negotiations are for an
    agreement that allows U.S. access to FOLs for 10 years with an option
    for an additional 5 years.
                              host nation support
        Question. General Wilhelm, what if any contributions are the host
    nations providing for the construction of these forward operating
    locations?
        Answer. The host nations of Ecuador and the Netherlands are
    contributing significantly to our efforts to establish forward
    operating locations.
        At all three locations, the host nations have provided temporary
    ramp space at no charge. The same holds true of office space,
    maintenance facilities, and hangar space provided on a temporary basis
    within their capability. In Curacao, the Royal Netherlands Navy will
    provide, on a permanent basis, sufficient ramp space for two P-3 and
    one E-2 aircraft along with co-use of their maintenance hangar. In
    Manta, the Ecuadorian Air Force has provided several buildings for use
    on a permanent basis. The Ecuadorian Air Force also conducted extensive
    excavation of brush and existing obstructions around the runway
    environment so counterdrug operations could commence in June. This
    action was performed to meet U.S. air safety standards--the Ecuadorian
    fighter wing at Manta did not require this safety enhancement.
        These gratuitous actions, along with the host nations'
    contributions to overcoming day-to-day obstacles, have convinced me of
    their sincere desire to participate in our collective counterdrug
    mission.
                         military construction funding
        Question. The Department requested $42.8 million in fiscal year
    2000 Southern Command military construction funding for the forward
    operating locations. The total program requirements are $122.37
    million. What are the priority projects for fiscal year 2000?
        Answer. Fiscal year 2000 military construction program funding of
    $42.8 million for Forward Operating Locations (FOLs) will provide $10.8
    million for consolidated FOL planning and design and the remainder will
    be used for parking ramp enhancements and runway/taxiway repair to
    accommodate four large aircraft (E-3, AWACS and KC-135) and four medium
    (E-2, P-3, C-550, C-130 ARL) aircraft in Manta, Ecuador. These funds
    will also provide the means to repair an existing ramp for three medium
    aircraft.
                              supporting aircraft
        Question. General, the Congress had earlier been briefed on the
    forward operating locations that these facilities were to support
    transit aircraft on a mission required basis. However, the
    documentation that the committee has received indicates that the F-15s
    or F-16s will be the only aircraft permanently assigned to Curacao. Is
    this a change to the initial intent of the program and what is the
    justification for the permanent assignment of these aircraft?
        Answer. There has been no change in our original concept of
    operations at the Curacao, Aruba or Manta Forward Operating Locations
    (FOLs). Air National Guard units, from throughout the United States,
    rotate every six weeks and crews rotate at 15-day intervals. As a new
    unit arrives, the previous unit departs. This rotation achieves near-
    continuous presence with temporarily deployed personnel and equipment.
                                     ______

                  Questions Submitted by Senator Patty Murray
                       forward operating locations (fols)
        Question. Mr. Chairman, I would like to preface my question by
    commending General Wilhelm for his leadership and dedication to the
    Defense Department's counter narcotics mission. As the head of the U.S.
    Southern Command, he has mounted a determined and aggressive campaign
    to stem the flow of illegal drugs from the Caribbean and Central
    America and to promote stability and democracy in the region. His is an
    enormous task, and a vitally important one. We are all well aware that
    it is crucial that he succeeds.
        On that note, I cannot help but think that a coordinated battle
    plan is a necessary ingredient of success, but what this Committee is
    being presented appears to be more of a scattershot, almost piecemeal
    approach. One day, we receive a relatively vague reprogramming request
    for $45 million for Forward Operating Locations. Another day, we are
    asked to shift $42.8 million into military construction for the FOL's.
    Later, we are told that a total of $122 million will be needed for
    construction at these locations in fiscal years 2000 and 2001. At the
    same time, Southern Command is significantly increasing its presence in
    Puerto Rico, and Congress is being urged to acquire the headquarters
    site that SOUTHCOM currently leases in Miami. I understand that all of
    these actions were precipitated by the closing of Howard Air Force Base
    in Panama, but I am concerned that in the haste to relocate the
    missions that had been based at Howard, we may be so focused on short
    term fixes that we lose sight of our long term goals.
        I understand that SOUTHCOM is currently operating some missions out
    of the proposed Forward Operating Locations, so my first question, for
    both General Wilhelm and Mr. Slocomb, is this: what would the impact on
    the counter narcotics mission be if SOUTHCOM were to complete a long-
    range master plan, as the Senate Subcommittee on Military Construction
    has directed, before investing $122 million in overseas military
    construction projects? How quickly could you complete such a plan and
    submit it to Congress.
        Answer. The Department of Defense long-range plan for Forward
    Operating Locations has been developed and was briefed to the Senate
    Subcommittee for Military Construction in August. Because of the many
    variables that have an impact on these plans, they are always being
    updated and adapted in order to have the greatest impact on our
    mission. The Department of Defense and U.S. Southern Command stand
    ready to provide updates or answer your questions at any time.
               deployments to forward operating locations (fols)
        Question. General Wilhelm, you have indicated that the majority of
    deployments to the FOLs would be short term--a period of weeks as
    opposed to months. In responding to the Committee on the specific
    lengths of tours, would you also indicate for the record how frequently
    a service member would be rotated into this duty. In other words, how
    many times a year could a service member expect to be assigned to this
    duty, and what would be the total amount of time during the year that
    he or she would have to spend away from their families?
        Answer. Each Service establishes deployment timelines consistent
    with their overarching personnel tempo (PERSTEMPO) criteria. All our
    Forward Operating Location (FOL) deployments will be short duration
    temporary duty (TDY) assignments. FOLs provide Services the flexibility
    to tailor their PERSTEMPO criteria to support our mission requirements.
    The frequency with which individual Service members would be assigned
    to these missions is a Service determination.
                                quality of life
        Question. In your opinion, how will these assignments affect the
    quality of life and operating tempo concerns that are having such a
    severe impact on Air Force retention levels? What steps are you taking
    to mitigate the impact of any quality of life concerns caused by this
    duty on the service members and their families?
        Answer. Forward Operating Location (FOL) deployments have a
    positive impact on morale and retention. Counterdrug operations are
    actual missions against actual targets. Aircrews respond favorably to
    these challenges and gain a sense of accomplishment from performing
    these missions. Guard personnel support many of the Air Force
    deployments, easing the operating tempo on the active force. For
    example, Guard F-15s/F-16s fly Coronet Nighthawk deployments, typically
    deploying from various home units to Curacao every six weeks and
    rotating crews at 15-day intervals.
        Service personnel tempo (PERSTEMPO) is further reduced by
    contracting as much base operating support as possible. We selected,
    from available sites, those airfields that best meet U.S. operational
    requirements, safety standards, and adequate personnel support
    facilities. We will upgrade these facilities to U.S. standards during
    the next two fiscal years. The quality of life needs of military
    personnel and their families will be provided by the Services.
                        home bases of deployed personnel
        Question. General Wilhelm, would you provide for the record the
    home bases from which the personnel would be deployed to the Forward
    Operating Location missions.
        Answer. The designation of units and personnel to support
    counterdrug requirements at the Forward Operating Locations is Service
    responsibility. I defer to the Services to answer this question.
                             security arrangements
        Question. General Wilhelm, you indicated that, in your opinion, the
    proposed FOLs are secure locations. Would you elaborate for the record
    on the specific security arrangements that will be made for U.S.
    personnel assigned either permanently or temporarily to these sites,
    who will provide the security on and off base, and what the security
    arrangements will cost the U.S.
        Answer. The assessed terrorism threat levels at Forward Operating
    Locations (FOLs) are NEGLIGIBLE for Curacao and Aruba and LOW for
    Ecuador. The assessed threat levels for crime is MEDIUM for Curacao and
    Aruba and HIGH for Ecuador. Threat level assessments are updated on a
    daily basis. Host nations provide security at the FOLs, to counter the
    assessed terrorism and criminal threat levels.
        As our executive agent for FOLs, U.S. Air Forces South (USSOUTHAF)
    is responsible for the security of permanent and temporary duty (TDY)
    Department of Defense (DOD) and U.S. Customs Service personnel located
    at the FOLs. Where necessary, USSOUTHAF augments host nation security
    forces.
        In addition, all U.S. personnel deploying to the U.S. Southern
    Command area of responsibility are required to receive pre-deployment
    anti-terrorism (AT) awareness training. FOL Detachment Commanders are
    also required to conduct security in-briefs for personnel arriving at
    FOLs.
        Security costs are negligible because of host nation support and
    existing security provisions at FOL facilities. Physical security
    requirements will be integrated into plans for U.S. FOL infrastructure
    improvements.
                                    housing
        Question. I note that the $122 million military construction cost
    estimate includes funding for visiting enlisted and officers quarters
    at Manta. What, if any, type of housing is being provided for visiting
    military personnel at the sites in Aruba and Curacao? What is the cost
    estimate? What type of housing (on base, off base; leased; single or
    multi family etc.) will be provided for the permanent U.S. personnel
    stationed at these sites? What is the cost estimate?
        Answer. Visiting military and interagency personnel to Aruba and
    Curacao are billeted in U.S. Air Force contracted hotels, most of which
    are within 15 minutes of their assigned airfields. The fiscal year 2000
    budget for housing temporary duty personnel is $2,700,000. Furthermore,
    a small number of permanent personnel will be assigned housing within
    the local community. Their housing costs are projected to be within the
    current housing allowance.
                              regional assistance
        Question. General Wilhelm, you note in your prepared remarks that
    the nations of the Caribbean and Latin America recognize that fighting
    the illegal drug trade in the region is a shared responsibility.
    Certainly, Southern Command's counter narcotics operations benefit not
    only the United States but also our neighbors in the Caribbean. Other
    than allowing the U.S. military to use existing facilities on Aruba,
    Curacao, and Ecuador, what types of assistance are we receiving from
    these nations to fight illegal drugs?
        Answer. Together with the Latin American, Caribbean, and European
    nations, we are pursuing a regional approach to combat illicit drug
    production, transportation, and the associated problems inherent with
    the narcotics trade.
        In addition to the Forward Operating Location agreements, the
    Dutch, British, and French contribute surface and air assets to
    regional counterdrug operations in the Caribbean. This multinational
    support provides greater operational flexibility and complements U.S.
    and Participating Nation military and law enforcement assets on a
    continuing basis with maritime air detection and monitoring, at sea
    refueling, and maritime patrol aircraft.
        The nations of the Caribbean and Latin America support the regional
    counterdrug effort by conducting both military and law enforcement
    counterdrug operations within their borders. They own and operate
    numerous ground based radars to conduct detection and tracking and they
    provide the military and law enforcement personnel who are interdicting
    drugs, eradicating illicit crops, and arresting drug traffickers inside
    their respective countries. In 1998, nations of the source and transit
    zone were responsible for 85 percent of worldwide cocaine seizures and
    the destruction of 3.1 million marijuana plants and over 38,500
    hectares of coca. Additionally, 18 nations in the hemisphere have
    entered into bilateral maritime agreements with the U.S. to help each
    nation plan and conduct multinational air and maritime counterdrug
    operations regardless of territorial seas or airspace.
                                     ______

                Questions Submitted by Senator Richard J. Durbin
                  colombian revolutionary armed forces (farc)
        Question. Are Colombian drug-related guerrillas of the Colombian
    revolutionary Armed Forces (FARC) still operating in the jungle
    province of Darien in Panama and are you concerned that this group may
    threaten the operation of the Panama Canal?
        Answer. The FARC is reported to frequently cross the Colombian-
    Panamanian border into the Darien province. Although the Panamanian
    Public Forces (PPF) are neither manned, trained, nor equipped to combat
    them, I do not believe the FARC, or any other paramilitary group,
    presents a threat to the safe and efficient operation of the Canal at
    this time.
                           panama unexploded ordnance
        Question. Under Article IV of the Panama Canal Treaty the United
    States promised to clean up unexploded ordnance in former U.S. military
    installations. However, I have heard press reports that we are instead
    planning to close certain areas rather than clearing the ordnance. Why
    can't the ordnance be cleared?
        Answer. There are former range areas, characterized by steep cliffs
    and triple canopy jungles, which are virtually impassable. Ordnance
    detection and clearing in these areas is not possible without
    subjecting personnel to extreme risk or resulting in significant
    environmental damage.
        We used the same techniques and technology to clear our ranges in
    Panama that we used to clear transferring rangelands in the United
    States. More aggressive clearing methods such as clear cutting and
    excavation have been rejected for the devastating effect they would
    have on the forests and the plant and animal species harbored in these
    canal watershed areas. The areas that cannot be cleared represent two
    percent of the total acreage returned to the Government of Panama under
    the Panama Canal Treaty.
        The framers of the treaty realized the range areas could not be
    completely cleared of all unexploded ordnance, which is why all parties
    agreed to include the ``practicability'' clause in the document. We
    have complied with our treaty obligations consistent with terrain
    accessibility, technology limitations, and environmental concerns.
           dod forward operating locations for counterdrug operations
        Question. I understand that the United States funds the Regional
    Counterdrug Training Academy. I would like to know more about this
    academy. Where is it located/Does it do the same type of training as
    the Army School of the Americas, at Fort Benning, Georgia? Is it
    training military or law enforcement officials? Does the Academy
    include human rights training? Does the Academy provide Counter-
    insurgency training? (Note: The remainder of this question will be
    addressed by SOUTHCOM) The Washington Post reported in May 1998 that
    U.S. special operations forces were training Colombian military units
    under the Joint Combined Exchange training program. It seems very
    difficult to conduct counter-insurgency operations when guerrillas and
    drug traffickers are located in and around civilian populations. Are
    the special forces providing counter-insurgency training? How is human
    rights training integrated? Does this training conform with the Leahy
    Amendment, which prohibits training to units that engage in human
    rights violations?
        Answer. The Regional Counterdrug Training Academy (RCTA) is located
    at Naval Air Station, Meridian, Mississippi. The RCTA was established
    in 1992 and its mission is to provide no cost, ``street level'' case-
    making, counterdrug skills to domestic law enforcement officials. The
    RCTA is congressionally directed and is funded through the Department
    of Defense. The Mississippi National Guard is responsible for
    management of the academy and the courses are taught by guest subject
    matter experts, with a ``cops training cops'' environment. The RCTA
    does not do the same type of training as the Army School of the
    Americas, at Fort Benning, Georgia. The academy's mission is to train
    domestic local law enforcement officials in counterdrug operations,
    versus the School of the America's mission to train foreign military
    forces in military operations. The RCTA curriculum includes some of the
    following general areas: Undercover Investigations, K-9 Training, Drug
    Labs, Operational Skills and Raid Planning. The academy has more than
    35 courses, all oriented toward domestic local law enforcement
    counterdrug operations. The curriculum for the academy is oriented
    toward domestic law enforcement officials and specifically does not
    cover training in human rights or counter-insurgency operations.
        One last point, the academy's original charter was limited to law
    enforcement officials in the states of Alabama, Louisiana, and
    Mississippi, but in 1996 was modified to include Georgia. The RCTA is
    now authorized to train domestic law enforcement officials outside the
    four-state region, as well as National Guard personnel involved in
    counterdrug support operations.
        Question. Is a forward operating location agreement still a
    possibility in Panama? If not, what additional location is Central
    America is DOD seeking?
        Answer. At this time, there are no plans to re-engage the
    Government of Panama on the topic of U.S. military access. DOD will
    comply fully with the provisions of the 1977 Panama Canal Treaty and
    will withdraw all military forces and turnover facilities in Panama by
    December 31, 1999. DOD and the State Department are coordinating
    efforts to identify a location for a FOL in Central America however no
    site has yet to be identified.

                             conclusion of hearings

        Senator Stevens. If there is nothing further, this will
    conclude the hearings for both the Defense Subcommittee and the
    Military Construction Subcommittee.
        [Whereupon, at 11:25 a.m., Wednesday, July 14, the hearings
    were concluded, and the subcommittees were recessed, to
    reconvene subject to the call of the Chair.]

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page
    American Society of Tropical Medicine and Hygiene, prepared
      statement......................................................   651

    Bailey, Dr. Sue, Assistant Secretary of Defense for Health
      Affairs, Department of Defense.................................   265
        Prepared statement...........................................   268
        Questions submitted to.......................................   319
    Barnes, Sharon, National Military and Veterans Alliance..........   581
    Blanck, Lt. Gen. Ronald R., Army Surgeon General, Department of
      Defense........................................................   271
        Prepared statement...........................................   273
        Questions submitted by.......................................   323
    Bond, Hon. Christopher S., U.S. Senator from Missouri:
        Prepared statements......................................4, 61, 151
        Questions submitted by............................42, 144, 214, 514
        Statements of.....................................60, 149, 362, 460
    Brooke, Mildred, Vice President of Operations, J&E Associates,
      Inc............................................................   624
        Prepared statement...........................................   626
    Burns, Hon. Conrad, U.S. Senator from Montana:
        Questions submitted by.......................................   816
        Statement of.................................................   789
    Byrd, Hon. Robert C., U.S. Senator from West Virginia, questions
      submitted by...................................................   136

    Caldera, Hon. Louis, Secretary of the Army, Department of the
      Army, Department of Defense....................................   669
        Prepared statement...........................................   672
        Questions submitted to.......................................   775
    California Industry and Government Coalition on PM-10/PM-2.5,
      prepared statement.............................................   645
    Calkins, Charles L., National Executive Secretary, Fleet Reserve
      Association, prepared statement................................   653
    Cochran, Hon. Thad, U.S. Senator from Mississippi:
        Questions submitted by.................132, 143, 203, 213, 259, 777
        Statement of.................................................   364
    Cohen, Hon. William S., Secretary of Defense, Office of the
      Secretary of Defense, Department of Defense....................   457
        Prepared statement...........................................   465
        Questions submitted to.......................................   509

    Danzig, Hon. Richard, Secretary of the Navy, Department of the
      Navy, Department of Defense....................................57, 62
        Prepared statement...........................................    63
        Questions submitted to.......................................   132
    Davis, Lt. Gen. Russell C., USAF, Chief, National Guard Bureau,
      Department of Defense..........................................   361
        Prepared statement...........................................   366
    Dixon, Timothy H., Ph.D., Professor, Rosenstiel School of Marine
      and Atmospheric Science and Director, Geodesy Laboratory, on
      behalf of the University of Miami..............................   604
        Prepared statement...........................................   605
    Domenici, Hon. Pete V., U.S. Senator from New Mexico, questions
      submitted by.............................................39, 205, 509
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota:
        Statement of.................................................   153
        Questions submitted by............................51, 210, 450, 454
    Duggan, Mike, Deputy Director for National Security, Foreign
      Relations Division, The American Legion........................   542
        Prepared statement...........................................   544
    Durbin, Hon. Richard J., U.S. Senator from Illinois, questions
      submitted by........................................54, 137, 451, 822

    Feldman, Lawrence A., Acting Executive Vice President, Office of
      the President, University of Medicine and Dentistry of New
      Jersey.........................................................   620
        Prepared statement...........................................   622
    Foil, Martin B., Jr., Chairman, International Brain Injury
      Association, Inc...............................................   570
        Prepared statement...........................................   571

    Gannon, John, Chair, Department of Computer Science, University
      of Maryland, Computing Research Association....................   567
        Prepared statement...........................................   568
    Gregg, Hon. Judd, U.S. Senator from New Hampshire, question
      submitted by...................................................   262

    Hamre, Hon. John J., Deputy Secretary of Defense, Department of
      Defense........................................................     1
    Harkin, Hon. Tom, U.S. Senator from Iowa, questions submitted b519, 524
    Hollings, Hon. Ernest F., U.S. Senator from South Carolina:
        Questions submitted by......................................47, 782
        Statement of.................................................   218
    Hutchison, Hon. Kay Bailey, U.S. Senator from Texas:
        Question submitted by........................................   779
        Statement of.................................................   152

    Inouye, Hon. Daniel K., U.S. Senator from Hawaii:
        Prepared statements..........................59, 236, 266, 333, 458
        Questions submitted209, 215, 321, 326, 328, 331, 517, 523, 776, 779
        Statements of...................2, 58, 149, 266, 362, 458, 670, 786

    Johnson, Adm. J.L., Chief of Naval Operations, Department of the
      Navy, Department of Defense....................................    57
        Opening remarks of...........................................   100
        Questions submitted to.......................................   137
    Johnson, Dr. David, Executive Director, Federation of Behavioral,
      Psychological and Cognitive Sciences...........................   532
        Prepared statement...........................................   534

    Kolker, Ann, Executive Director, Ovarian Cancer National Alliance   641
        Prepared statement...........................................   642
    Krebs, Chief Master Sergeant Joshua W., (ret.), Manager for
      Legislative Affairs, Air Force Sergeants Association...........   549
        Prepared statement...........................................   551
    Krulak, Gen. C.C., Commandant of the Marine Corps, U.S. Marine
      Corps, Department of the Navy, Department of Defense...........    57
        Opening remarks of...........................................    98
        Questions submitted to.......................................   138

    Laurence, Dr. Janice H., American Psychological Association......   527
        Prepared statement...........................................   529
    Lautenberg, Hon. Frank R., U.S. Senator from New Jersey,
      questions submitted by.........................................    49
    Leahy, Hon. Patrick J., U.S. Senator from Vermont:
        Questions submitted by.......................................    48
        Statement of.................................................   218
    Lennie, Peter, Ph.D., Dean for Science, Professor of Neural
      Science, New York University...................................   615
        Prepared statement...........................................   616
    Lyles, Lt. Gen. Lester L., Director, Ballistic Missile Defense
      Organization, Department of Defense............................   217
        Prepared statement...........................................   224
        Statement of.................................................   219
    Lynn, William J., Under Secretary of Defense (Comptroller),
      Department of Defense..........................................     1

    Martin, Rear Adm. Kathleen L., Director, Navy Nurse Corps,
      Department of Defense..........................................   350
        Prepared statement...........................................   352
    Matalon, Sadis, Ph.D., Professor of Anesthesiology, University of
      Alabama........................................................   607
        Prepared statement...........................................   612
    Mauderly, Joe L., M.D., Senior Scientist and Director of External
      Affairs, Lovelace Respiratory Institute........................   607
        Prepared statement...........................................   608
    McConnell, Hon. Mitch, U.S. Senator from Kentucky, questions
      submitted by..................................................43, 134
    Morris, Robert V., Executive Director, Fort Des Moines Black
      Officers Memorial, Inc.........................................   632
        Prepared statement...........................................   634
    Murray, Hon. Patty, U.S. Senator from Washington, questions
      submitted by...................................................   819

    Nelson, Vice Adm. Richard A., Medical Corps, Surgeon General,
      U.S. Navy, Department of Defense...............................   291
        Prepared statement...........................................   292
        Questions submitted to.......................................   328

    Optical Society of America, prepared statement...................   648
    Ouellette, Michael F., Sergeant Major, USA (retired), Director,
      Legislative Affairs, Non Commissioned Officers Association of
      the United States of America...................................   635
        Prepared statement...........................................   635

    Partridge, Charles C., Legislative Counsel, National Military and
      Veterans Alliance, prepared statement..........................   582
    Peters, Hon. F. Whitten, Acting Secretary of the Air Force,
      Office of the Secretary, Department of the Air Force,
      Department of Defense..........................................   147
        Prepared statement...........................................   157
        Questions submitted to.......................................   203
    Pugh, Kristen L., Deputy Legislative Director, The Retired
      Enlisted Association...........................................   597
        Prepared statement...........................................   598

    Quickel, Dr. Kenneth E., Jr., President, Joslin Diabetes Center..   575
        Prepared statement...........................................   577

    Raezer, Joyce Wessel, Senior Issues Specialist, National Military
      Family Association.............................................   588
        Prepared statement...........................................   590
    Reimer, Gen. Dennis J., Chief of Staff, Department of the Army,
      Department of Defense........................................669, 679
        Prepared statement...........................................   681
        Questions submitted to.......................................   777
    Research Society on Alcoholism, prepared statement...............   647
    Roadman, Lt. Gen. Charles H., II, Air Force Surgeon General,
      Department of Defense..........................................   283
        Prepared statement...........................................   284
        Questions submitted to.......................................   330
    Roberts, Hon. Pat, U.S. Senator from Kansas, statement of........   787
    Rogers, Terry, National Vice President, 8th District, American
      Federation of Government Employees, AFL-CIO....................   556
        Prepared statement...........................................   557
    Roodman, Dr. David, Professor of Medicine and Associated Chair
      for Research at University of Texas, Health Science Center in
      San Antonio, Texas, National Coalition for Osteoporosis and
      Related Bone Diseases..........................................   563
        Prepared statement...........................................   565
    Ryan, Gen. Michael E., Chief of Staff, Office of the Secretary,
      Department of the Air Force..................................147, 175
        Prepared statement...........................................   157
        Questions submitted to.......................................   212

    Sandler, Maj. Gen. Roger W., AUS (ret.), Executive Director,
      Reserve Officers Association of the United States, prepared
      statement......................................................   658
    Schultz, Maj. Gen. Roger C., Director, Army National Guard,
      Department of Defense..........................................   382
        Prepared statement...........................................   383
        Questions submitted to.......................................   450
    Shelby, Hon. Richard C., U.S. Senator from Alabama:
        Prepared statements.................4, 252, 267, 364, 459, 645, 671
        Questions submitted by.......................................   46,
                 135, 138, 145, 208, 214, 262, 450, 453, 514, 522, 775, 778
        Statements of................................................3, 266
    Shelton, Gen. Henry H., Chairman, Joint Chiefs of Staff, U.S.
      Army, Office of the Secretary of Defense, Department of Defense   457
        Prepared statement...........................................   469
        Questions submitted to.......................................   522
    Sherner, Col. John, (ret.), Certified Registered Nurse
      Anesthetist, American Association of Nurse Anesthetists........   537
        Prepared statement...........................................   539
    Simmons, Brig. Gen. Bettye H., Chief, Army Nurse Corps, U.S.
      Army, Department of Defense....................................   333
        Prepared statement...........................................   336
    Slocombe, Hon. Walter B., Under Secretary of Defense (Policy),
      Department of Defense........................................785, 799
        Prepared statement...........................................   801
    Specter, Hon. Arlen, U.S. Senator from Pennsylvania:
        Statement of.................................................   459
        Questions submitted by......................................39, 320
    Stevens, Hon. Ted, U.S. Senator from Alaska:
        Opening statements of.......................265, 361, 457, 669, 785
        Prepared statement...........................................    59
        Questions submitted by.......137, 138, 203, 212, 256, 319, 323, 330
    Stierle, Brig. Gen. Linda J., Director, Medical Readiness and
      Nursing Services, Office of the Surgeon General, Department of
      Defense........................................................   339
        Prepared statement...........................................   341

    Violi, Ronald C., Chairman and Chief Executive Officer,
      Children's Hospital of Pittsburgh, Pennsylvania................   575
    Visco, Fran, President, National Breast Cancer Coalition.........   628
        Prepared statement...........................................   629

    Weaver, Maj. Gen. Paul A., Jr., Director, Air National Guard,
      Department of Defense..........................................   418
        Prepared statement...........................................   420
        Questions submitted to.......................................   453
    Wilhelm, Gen. Charles E., Commander in Chief, U.S. Southern
      Command, U.S. Marine Corps, Department of Defense..............   785
        Prepared statement...........................................   795
        Statement of.................................................   791

                                 SUBJECT INDEX

                                  ----------

                             DEPARTMENT OF DEFENSE

                     Ballistic Missile Defense Organization

                                                                       Page
    Additional committee questions...................................   256
    Affordability....................................................   224
    Airborne laser (ABL).............................................   260
    Arrow program funding............................................   255
    Ballistic Missile Defense Organization challenges................   263
    Ballistic missile threats........................................   241
    BMD:
        Importance of technology.....................................   253
        Percent of budget allocated to technology....................   254
        Quality controls on contractors..............................   243
        Technical challenge of.......................................   252
        Technology base..............................................   253
    Cost controls...................................................221,223
    Deployment decision..............................................   220
    Emergency supplemental...........................................   249
        Impact on deployment.........................................   250
    Expectations.....................................................   220
    Flight testing from Kodiak, Alaska...............................   238
    General Lyles, congratulations to................................   237
    High Power Discriminator Program.................................   262
    Is missile defense a realistic program...........................   242
    Israeli Arrow system.............................................   255
    Medium Extended Air Defense Program (MEADS)......................   261
        Program restructure..........................................   248
        System.......................................................   263
    Missile defense:
        Against limited attack.......................................   251
        Funding......................................................   219
        Interoperability.............................................   223
        Resource constraints on......................................   246
    Missile threats:
        More advanced................................................   250
        To the United States.........................................   250
    National missile defense (NMD)............................220, 242, 256
        And arms control interests...................................   251
        Feasibility of...............................................   244
        Military construction funding................................   238
        Program policy...............................................   255
        System technical readiness...................................   250
        Targets......................................................   246
    National Missile Defense Act of 1999.............................   256
    Naval missile defense............................................   259
    New Director of BMDO.............................................   243
    Pacific Missile Range, flight test at............................   240
    Patriot advanced capability (PAC-3)............................248, 263
        Deployment of................................................   249
        Flight test..................................................   222
        Funding impact on production.................................   248
        Intercept test...............................................   242
        Low rate initial production..................................   247
            Funds....................................................   247
        Production schedule..........................................   247
        Program delay and cost growth................................   241
    Program tradeoffs................................................   237
    Space-based infrared system (SBIRS)..............................   237
        Program management...........................................   245
        To BMD programs, importance of...............................   245
    Technology program, need for robust..............................   253
    Technology, funding increase for.................................   254
    Theater high altitude area defense (THAAD).......................   262
        Design and technical approach................................   244
        Flight test..................................................   222
            Follow up actions........................................   239
            Record...................................................   239
        Penalty clauses for contract.................................   240
    Theater missile defense........................................221, 242
        Lessons from.................................................   220
    Threat reduction via START process...............................   252
    Threats, defend against more complex.............................   251
    Welch panel lessons..............................................   221

                          Department of the Air Force

                            Office of the Secretary

    Additional committee questions...................................   202
    Aerospace superiority............................................   168
    Agile combat support.............................................   172
    Air expeditionary force units....................................   214
    Air Force role in national security..............................   158
    Airborne laser...................................................   215
    Aircraft:
        Engines......................................................   197
        Modernization................................................   156
        Procurement:
            Programs.................................................   211
            Rate.....................................................   210
    America's Air Force in 1998......................................   157
    B-52.............................................................   211
    Ballistic missiles.............................................210, 211
    Bomber roadmap...................................................   178
    Business practices, enhancing....................................   173
    C-17.................................................183, 200, 203, 214
    C-20 contract...................................................185,186
    C-130Js..........................................................   205
    Directed energy, Air Force plans for.............................   206
    Expeditionary aerospace force....................................   155
        Concept......................................................   210
        Innovating for the future....................................   161
    F-15A............................................................   185
    F-15E............................................................   185
    F-16s............................................................   212
    F-22 and C-130 cost relationship.................................   209
    Focus areas......................................................   162
    Funded programs..................................................   203
    Global attack....................................................   169
    Global combat support system.....................................   215
    Guard and Reserve................................................   184
    ICBM.............................................................   211
    Information superiority..........................................   171
    Joint air-to-surface standoff missile (JASSM).............199, 203, 212
    KC-135...........................................................   209
    Kosovo...........................................................   193
        Cost of operations...........................................   193
    Low-cost launch programs.........................................   207
    Military construction funding (no military construction budgeted
      for New Mexico)................................................   207
    Missile defense................................................195, 196
    Modernization--future readiness..................................   167
    National Guard general purpose squadrons.........................   214
    Night vision.....................................................   190
    Office of Special Investigations.................................   197
    Officer training.................................................   208
    Operations, enhancing future.....................................   172
    Our airmen are a treasure to the Nation..........................   164
    Pilot:
        Shortage.....................................................   212
        Training.....................................................   213
    Precision engagement.............................................   169
    Preparing........................................................   160
    Rapid global mobility............................................   170
    RDT&E and science and technology budgets, decreases in...........   205
    Readiness:
        Budget.......................................................   180
        Under fiscal constraints.....................................   163
    Real property maintenance........................................   189
    Recruiting and retention.........................................   154
    Research facilities..............................................   187
    Resources, safeguarding key......................................   174
    Responding.......................................................   159
    Shaping..........................................................   158
    Spare parts....................................................156, 192
    Standoff weapon deployment.......................................   178
    Total Force......................................................   161
    TRICARE..........................................................   188
    Two major regional conflicts.....................................   202
    United States Air Force Posture Statement 1999...................   157
    X-34 testing at Holloman.........................................   208

                             Department of the Army

                             Secretary of the Army

    A community with a mission.......................................   725
    A statement on the Posture of the United States Army, Fiscal Year
      2000...........................................................   689
    AC, RC, and Army civilians.......................................   706
    Additional committee questions...................................   775
    African American military museum or memorial.....................   766
    Army:
        Components, integrating the..................................   677
        Efficiencies.................................................   678
        Experiments and the revolutions in military affairs and
          military logis-
          tics.......................................................   715
        Installations and organizations:
            Good neighbors nation-wide...............................   734
            Managing.................................................   726
        Modernization................................................   676
            Plan.....................................................   717
        Values, preserving...........................................   724
    Army's challenge.................................................   682
    Arsenals.........................................................   769
    Budget, fiscal year 2000.........................................   673
        Proposal...................................................756, 672
    Chapter 1--Assuring current and future readiness.................   697
    Chapter 2--Generating capabilities for the full spectrum of
      military operations............................................   705
    Chapter 3--Readiness for the 21st century: Knowing what to change   713
    Chapter 4--The Army community--Getting the balance right.........   725
    Chapter 5--Stretching the fabric of the Army.....................   735
    Chinook engines..................................................   782
    Contingency operations funding...................................   754
    Defense reform and Army initiatives: Assuring a revolution in
      business affairs...............................................   730
    Doing America's heavy lifting: the Army and the NMS..............   699
    18-month enlistment............................................777, 781
    Emergency supplemental...........................................   671
    Enhanced fiber optic guided missile..............................   776
    Enhanced position location and reporting system..................   778
    Environment, sustaining the......................................   730
    Executive summary................................................   690
    Fielding required capabilities...................................   719
    First force instrumented range...................................   778
    Foreword.........................................................   689
    Fundamental change...............................................   683
    Future:
        A down payment on the........................................   689
        Force structure..............................................   721
        Poised for the...............................................   685
    Institutional and operational forces.............................   707
    Johnston Island..................................................   778
    Junior Reserve Officer Training Corps (JROTC)....................   770
    Kosovo.........................................................752, 758
    Longbow Apache...................................................   779
    Manning challenge..............................................680, 759
    Medium tactical vehicles, family of..............................   767
    Missile defense..................................................   755
    Modernization....................................................   752
        Challenge....................................................   680
    Montgomery GI bill benefits....................................761, 771
    Near and long term, reducing risks in the........................   686
    Operating and personnel tempos...................................   753
    Patriot........................................................779, 780
    People, taking care of...........................................   736
    Quality of life..................................................   727
        In the Pacific...............................................   760
    Readiness:
        And modernization, concerns with.............................   738
        Challenge....................................................   680
        The national military strategy, and Army capabilities........   697
    Recruiting and retention.......................................776, 780
    Resource challenge...............................................   680
    Resource concerns................................................   704
    Resources available: The fiscal year 2000 budget.................   740
    Resources, an era of constrained.................................   684
    Rock Island Arsenal............................................766, 770
    Safety...........................................................   726
    School of the Americas...........................................   771
    Serving the Nation: Today and tomorrow...........................   679
    Six imperatives, synchronizing the...............................   709
    Strategy for the 21st century....................................   714
    Strike Force...................................................777, 781
    Task Force Hawk................................................758, 762
    The Army is people...............................................   685
    The Army today...................................................   673
    The Army vision..................................................   705
    The strike force.................................................   687
    Theater and national missile defense.............................   776
    Total Army capabilities..........................................   708
    Total force, using the...........................................   687
    Trained and ready for what?......................................   682
    Training soldiers and leaders....................................   723
    Training, protecting.............................................   686
    Unmanned aerial vehicles.......................................759, 763
    Urban training...................................................   754

                             Department of the Navy

                             Secretary of the Navy

    Additional committee questions...................................   132
    Ammunition.......................................................   106
    Avondale Shipyard................................................   111
    Cruiser Conversion Program.......................................   134
    DD-21............................................................   130
        Program......................................................   122
    Department of the Navy 1999 posture statement....................    66
    F/A-18E/F........................................................   107
    Ford Island development program..................................   106
    Great Lakes Naval Center.........................................   111
    Joint standoff weapon (JSOW).....................................   108
    LHA and LHD......................................................   121
    MK45 guns, operational availability of...........................   134
    National missile defense.........................................   130
    Naval gun work performed in Louisville, Kentucky.................   134
    Naval Ordnance Station, Louisville, land conveyance at former....   135
    Okinawa..........................................................   128
    Operation and maintenance account................................   103
    Pay raise and retention..........................................   124
    Recruitment and retention........................................   118
    Rescissions......................................................   125
    Retention........................................................   126
    S. 4...........................................................102, 109
    Tactical ballistic defense.......................................   104
    Trident..........................................................   115
    V-22.............................................................   127
    War fighting lab.................................................   129

                          Deputy Secretary of Defense

    ABM Treaty:
        Impedance of missile defense by..............................    37
        Missile defense and the......................................    32
    Additional committee questions...................................    39
    Aerospace expeditionary forces...................................    40
    Appropriated funds, release of...................................    28
    Appropriations, release of fiscal year 1999......................    31
    Are we prepared for the next century?............................     7
    Army budget and priorities.......................................    43
    B-52.............................................................    52
    BRAC rounds, additional..........................................    27
    Budget:
        Caps and budget resolution...................................    21
        Major features of fiscal year 2000...........................    10
    Budgetary contingency plans--potential U.S. ground force in
      Kosovo.........................................................    46
    Chemical weapons demilitarization and ACWA Program...............    44
    Contingency funding..............................................    15
    Defense reform initiative........................................    18
        And DOD's electronic commerce resource centers...............    41
    Defense working capital funds....................................    54
    Depot closures...................................................    19
    DOD:
        Financing the increase.......................................    12
        Funding increase.............................................    11
        Revitalizing facilities......................................    17
    Downsizing and recruiting standards..............................    24
    F-117 Stealth fighter............................................    42
    F/A-18E/F procurement strategy...................................    42
    Hollow force, concerns about a...................................    31
    ICBMS and the future U.S. deterrent..............................    53
    Kosovo observer costs............................................    30
    Landmines, searching for alternatives to anti-personnel..........    48
    Military construction funding....................................    41
    Military housing privatization initiative........................    52
    Military people, supporting our..................................     5
    Missile defense, technology development for......................    25
    Modernization on target..........................................    16
    National missile defense.........................................    51
    National Missile Defense Act.....................................    29
    National security objectives, ability to meet....................    51
    Navy, maintaining 300-ship.......................................    27
    Payments, limiting progress......................................    22
    People come first................................................    13
    Protecting readiness.............................................    14
    RDT&E and science and technology budgets, priorities decreases in    39
    Recruiting challenges............................................    23
    Recruits, advertising for........................................    23
    Retention challenges.............................................    25
    Retirement reform, impact of.....................................    24
    Technology development risks.....................................    38
    20-year service life extension programs..........................    49
    U.S.:
        Allied cost sharing..........................................    51
        Computers and communications, threats to.....................    34
    V-22 and Comanche, funding for...................................    39
    What concerns do I have?.........................................     9
    What shape are we in?............................................     6
    White Sands missile range........................................    41
    Y2K problems.....................................................    34
        Overseas.....................................................    36

          Forward Operating Locations (FOL) for Counterdrug Operations

    Additional committee questions...................................   816
    Aruba and Curacao operations.....................................   808
    AWACS............................................................   793
        Retractable over the horizon radar...........................   811
    Colombian revolutionary armed forces (FARC)......................   822
    Deployments......................................................   804
        Reduction in.................................................   800
    DOD forward operating locations for counter drug operations....816, 822
    Emerging threats.................................................   787
    Facilities.......................................................   817
        Construction of temporary....................................   818
    Five-year projection.............................................   813
    Food safety......................................................   788
    Force protection.................................................   810
    Forward operating locations (FOLs).........792, 788, 799, 805, 809, 819
        Alternative..................................................   818
        Concept......................................................   806
        Cost.........................................................   803
        Deployments to...............................................   820
        Funding concerns.............................................   814
        Negotiation status...........................................   816
    Home bases of deployed personnel.................................   820
    Host nation support..............................................   819
    Housing..........................................................   821
    Infrastructure costs.............................................   786
    Joint Staff Information Paper, excerpt from......................   812
    Locations, consideration of alternate............................   808
    Military construction:
        Estimates....................................................   817
        Funding......................................................   819
    Military facilities, new.........................................   785
    North American Free Trade Agreement..............................   789
    Operational requirements.........................................   818
    Operations, concept of...........................................   817
    Panama unexploded ordnance.......................................   822
    Post Panama theater architecture.................................   791
    Quality of life..................................................   820
    Regional assistance..............................................   821
    Reprogramming....................................................   790
    Retention........................................................   807
    Security arrangements............................................   821
    Supporting aircraft..............................................   819

                             National Guard Bureau

    A Full-Spectrum Force............................................   367
    Additional committee questions...................................   449
    Air Guard military construction..................................   431
    Air National Guard...............................................   371
        And Reserve forces...........................................   454
    Army National Guard..............................................   369
        Combat readiness of..........................................   438
        Full-time manning............................................   450
    Army personnel accounts, shortfall in............................   430
    B-1............................................................435, 436
    C-17 aircraft..................................................443, 444
    Combat readiness.................................................   428
    Combat to combat support conversion..............................   447
    Danville, IL:
        Armory and Milcon issues.....................................   452
        Armory status................................................   452
    Director's summary...............................................   383
    Equipment compatibility..........................................   435
    F-15 data links..................................................   430
    F-16...........................................................440, 453
    Force:
        Manning the..................................................   389
        Resourcing the...............................................   404
        Sustaining the...............................................   400
        Training the.................................................   406
    Full-time manning shortfalls.....................................   450
    Funding..........................................................   363
        Deployments..................................................   434
    Guard............................................................   365
        Equipping the................................................   397
        Forces.......................................................   441
        Missioning the...............................................   411
        Readiness....................................................   439
    Illinois Guard full-time manning.................................   451
    Joint Force and Joint Vision 2010................................   368
    Joint Force contributions........................................   374
    Knowledge infrastructure.........................................   404
    Kosovo operations................................................   437
    Looking to the future............................................   387
    Milcon unfunded requirements.....................................   431
    Military construction backlog....................................   445
    Mississippi National Guard.......................................   442
    Modernization....................................................   420
    National security strategy, committed to the.....................   368
    Organizational history...........................................   384
    Organizing for success...........................................   395
    Quality installations............................................   410
    Quality of life..................................................   413
    Readiness......................................................382, 399
        And retention problems.......................................   450
    Rotation.........................................................   447
    117th Air Refueling Wing.........................................   453
    Shortfalls.......................................................   446
    The Guard today--current initiatives.............................   385
    Units............................................................   419
    Youth programs...................................................   428

                                  Nurse Corps

    Army Nurse Corps:
        Effectiveness of recruiting initiatives for..................   356
        Future challenges for........................................   335
        State of the.................................................   334
        Summary of state of..........................................   336
    BSN entry versus MSN entry.......................................   357
    Humanitarian missions, support of................................   334
    Leader development...............................................   336
    Male nurses, recruitment of......................................   359
    Nurse practitioner, expanding role of............................   334
    Nursing:
        As a profession--(opportunities).............................   335
        Research, innovations through................................   337
    Readiness training and cost impact...............................   358
    Role development.................................................   337
    Triscience nursing research......................................   334

                       Office of the Secretary of Defense

    Achieving modernization goals....................................   466
    Additional committee questions...................................   508
    Air campaign, accomplishments of.................................   488
    Air Force personnel, quality of life for.........................   520
    Antiballistic Missile Treaty constraints.........................   498
    Apache helicopters, restrictions on use of.......................   493
    Asia and the Persian Gulf, protecting vital interests in.........   516
    Base closings:
        Budget assumptions about.....................................   508
        Risks of future..............................................   501
    Budget:
        Continuing validity of our fiscal year 2000..................   466
        Funding peculiarities in fiscal year 2000....................   479
        Priorities in the fiscal year 2000...........................   465
        Request and priorities, fiscal year 2000.....................   462
    Carrier battle group steaming time to the western Pacific........   515
    Carrier gap......................................................   524
    Chinese Embassy:
        Bombing of...................................................   481
        Intelligence failure behind bombing..........................   461
    Command structure................................................   522
    D-5 missile, reduced procurement of..............................   487
    Defense reform...................................................   518
    Department of Energy reorganization..............................   495
    DOD civilian employees, downsizing...............................   506
    Embassy reconstruction, cost of..................................   491
    Emergency spending, added fiscal year 1999.......................   487
    Fiscal year 1999 supplemental....................................   462
        Appropriations, sufficiency of...............................   499
        Content of...................................................   508
        Military construction funding in.............................   493
    Funding topline..................................................   464
    Ground forces....................................................   522
    Joint force, building tomorrow's.................................   478
    Korea................................................517, 518, 523, 524
    Korean MTW, sufficiency of lift asset support to.................   515
    Kosovo:
        Campaign, allied contributions to............................   494
        Update.......................................................   461
    Military:
        Compensation increases, differences on.......................   503
        Manning......................................................   483
        Operations, cost to sustain and/or expand....................   509
    Missile defense deployment.......................................   480
        Date for.....................................................   497
    Munitions:
        And other stocks, comparing..................................   496
        Expended per target..........................................   504
    National Guard, meeting the needs of the.........................   505
    National security strategy, supporting the.......................   471
    NATO security investment program.................................   503
    North Korean attack during Operation Allied Force: Effectiveness
      of U.S. response...............................................   515
    Nuclear weapons and NATO.........................................   520
    OPTEMPO/PERSTEMPO................................................   472
    Personnel shortfalls...........................................517, 523
    Pilot shortage...................................................   519
    Procurement, needed funding......................................   499
    Quality force, sustaining a......................................   469
    Rapid assessment and initial detection teams.........517, 518, 523, 524
    Readiness............................................516, 517, 523, 524
        Funding....................................................519, 524
        Needs, increased.............................................   509
        Protecting...................................................   466
    Recruiting, successful military..................................   507
    Refugee resettlement costs.......................................   492
    Satellite technology transfer....................................   485
    Spare parts and manning..........................................   496
    Tactical strike aviation.........................................   514
    Theater operations, handling more than two major.................   506
    Two theater war assumption.......................................   514
    U.S. Tomahawk and the United Kingdom.............................   521
    War criminals, apprehension of...................................   486
    Weapons effectiveness............................................   514
    When nuclear security breaches become known......................   490
    X-34 testing program.............................................   513

                                Surgeon Generals

    Additional committee questions...................................   319
    Angio CAT:
        Employment, time line for....................................   282
        Function of the..............................................   282
        Funding for..................................................   282
    Anthrax program/health promotion.................................   272
    Army breast cancer research program, administration of...........   309
    Best clinical and business practices.............................   297
    Breast cancer fund expenditures for fiscal year 1998-99..........   309
    Breast Cancer Research Program...................................   323
    Chemical/biological terrorism distance learning course...........   312
    Combat casualty care:
        Cost projection of...........................................   304
        Funding for..................................................   304
    Combat trauma patient simulation device..........................   272
    Computer-based simulation models.................................   324
    DOD health care delivery.........................................   330
    Electronic medical records.......................................   310
    Family advocacy...........................................321, 328, 331
        Program......................................................   326
    Federal Employee Health Benefits Program.............321, 328, 329, 332
    Force health protection..........................................   293
    Force protection.................................................   271
    Health benefit...................................................   296
    Insurance proposal/health profession scholarship.................   313
    Kosovo:
        Budget for...................................................   300
        Operations...................................................   299
    Medical assets, deployment of....................................   272
    90-day rotation policy...........................................   314
    People...........................................................   295
    Personnel information carrier (PIC)..............................   311
        Proposals for the............................................   312
    Portability......................................................   307
    Prostate Cancer Research Program.................................   325
    Recruitment and retention:
        Initiatives for enhancing....................................   313
        Reserve medical specialty....................................   313
        Summary of resource..........................................   314
    Recruitment, outsourcing.........................................   313
    Research versus clinical practice................................   303
    Reserves, role of................................................   313
    Retention rates..................................................   317
    Soldiers/sailors bill of rights amendment, comment on............   307
    Trauma team training.............................................   272
    Uniformed services university of health sciences (USUHS).........   316
        Satisfaction with programs...................................   316
    Walter Reed angio CAT............................................   281
    War readiness materiel (WRM).....................................   301

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