[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
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402
                           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.
[GRAPHIC] [TIFF OMITTED] T02MA28.000

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

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                        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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