[Congressional Record Volume 140, Number 29 (Wednesday, March 16, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 16, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                      DEFENSE POLICY AND SPENDING

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                       Wednesday, March 16, 1994

  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, March 16, 1994, into the Congressional Record:

                      Defense Policy and Spending

       Since the fall of the Berlin Wall the general consensus has 
     been that military spending should decline. This has changed 
     and we are at the start of the next debate about the future 
     of defense policy and budgets. The debate has been focused by 
     the completion of the Pentagon's Bottom-Up Review and by the 
     President's statement in his State of the Union address that 
     he was drawing the line against further cuts in defense 
     beyond those already planned.


                   reductions in spending and forces

       The end of the Cold War required that we adjust military 
     forces and spending to the reduced threat. Defense spending 
     has dropped considerably from the peak of the massive 
     military buildup in the 1980s, about 23% since 1989 when 
     adjusted for inflation. The cuts in spending have been 
     matched by significant reductions in the size of the armed 
     services. The military is approaching an overall reduction of 
     25% in size, with larger reductions in some areas, 
     particularly nuclear weapons. This year, however, we will 
     spend only 6% less (adjusted for inflation) than the Cold War 
     average (1950-1989) on a force that is nearly 25% smaller in 
     terms of numbers of soldiers and weapons than typical Cold 
     War levels.


                the bottom-up review and the 1995 budget

       Last fall the DoD unveiled the Bottom-Up Review, its 
     comprehensive attempt to identify the new threats to national 
     security and the military forces necessary to meet them. The 
     principal conclusion was that the U.S. needs to maintain the 
     ability to fight and win, nearly simultaneously, two ``major 
     regional conflicts'' (each comparable to the Gulf War). The 
     Review determined that a force of 1.4 million active-duty 
     personnel (currently between 1.7 and 1.6 million) would meet 
     this requirement. The Army would be reduced from 14 active 
     divisions to 10; the Air Force, from 16 fighter wings to 13; 
     and the Navy, from 443 ships to 346.
       The 1995 budget and five-year defense plan implement the 
     Bottom-Up Review. The President plans to spend nearly $264 
     billion on defense in 1995 and $1.3 trillion over the next 
     five years. Projected spending declines through 1997 but 
     levels off in 1998 and 1999 as the base force is reached.


                             the new debate

       The uncertainty of the current state of world politics 
     makes any attempt to define the long term military needs of 
     this country both difficult and controversial. We confront an 
     unusual mix of hopeful and ominous developments. The emerging 
     debate revolves around four broad issues and questions: 1) 
     Requirements: What are the threats and necessary military 
     forces to meet them? 2) Resources: Will our budgets provide 
     enough resources to fully fund those forces? 3) Readiness: 
     How can we best maintain forces that are ready to fight if 
     necessary? 4) Reform: How can the Pentagon improve its 
     methods of doing business? Congress will address these 
     questions as it debates this year's defense budget.


                              requirements

       The Bottom-Up Review has raised as many questions as it 
     answered about the probable threats to our security and how 
     to address them. Most controversial is the conclusion that 
     the U.S. must maintain a force capable of fighting and 
     winning two nearly simultaneous regional wars, without allied 
     assistance. Both assumptions--two simultaneous wars and no 
     allied support--are debatable. Critics argue that the planned 
     force is excessive given the limited capabilities of 
     potential enemies and the formidable capabilities of our 
     allies. The U.S. and its allies (NATO members and Japan) 
     currently account for about 70% of world military 
     expenditures. We have the right to expect, and must insist 
     on, reasonable contributions to world security from our 
     allies.


                               Resources

       The administration argues that it has fully budgeted for 
     its planned force structure, but that changes in inflation 
     rates could change future funding needs. Some experts, 
     however, dispute whether the armed forces will be fully 
     budgeted in the last years of the five-year plan, even with 
     low inflation. They argue that new procurement programs will 
     begin to swell funding requirements beyond planned levels. 
     One way to avoid funding shortages in future years is to 
     cancel unnecessary defense programs. Advocates of this 
     approach typically include such weapons as the Seawolf 
     submarine, the CVN-76 aircraft carrier, and the F-22 fighter 
     in that category.


                               Readiness

       Readiness encompasses everything from weapons and training 
     to pay and morale. The administration states that readiness 
     is the highest priority in the defense budget. Critics argue 
     that readiness has begun to deteriorate. All agree that, as 
     far as weapons procurement, we have the best equipped armed 
     forces today and for several years to come. Instead, those 
     concerned about readiness cite what they see as emerging 
     problems with maintenance backlogs, training schedules, and 
     recruiting and retention trends. The main point of contention 
     is whether the alleged signs of diminished readiness are real 
     and indicative of long term problems or largely a product of 
     the inevitable but temporary turbulence that accompanies 
     rapid cuts and restructuring. Once the base force is reached 
     and things settle down, we could discover that we have 
     provided more than enough money for military readiness.


                                 Reform

       The Clinton Pentagon is beginning a comprehensive reform of 
     the Department's management and procurement practices. Reform 
     is essential to our ability to maintain a strong and ready 
     military with limited budgets. The major focus is on the 
     military procurement process, where studies have shown that 
     overhead expenses account for as much as 40% of procurement 
     budgets (versus about 5 to 15% in the private sector). 
     Several initiatives are in progress or under consideration. 
     One is to have the services, where possible, jointly develop 
     and build new weapons. Another is to maximize the use of 
     commercial products. Too often regulations and unnecessary 
     military specifications preclude purchase of off-the-shelf 
     commercial products instead of specially produced military 
     versions.


                               Conclusion

       Everyone agrees that the new world, with all its problems, 
     is a safer place for the U.S. than was the Cold War. The 
     Soviet threat has greatly diminished, and no Third World 
     challenge threatens to replace it. I believe, however, we 
     must proceed with caution in cutting our military for several 
     reasons: we still live in a dangerous, unsettled world; we 
     have many calls on our military forces to help around the 
     world; we do not yet have a consensus on the threats we face 
     or a strategy to meet these threats; and it simply takes time 
     to reorganize our military establishment. I would not argue 
     there should be no future cuts in defense spending, only that 
     we assess carefully where we are and what demands will be 
     placed on our world leadership.

                          ____________________