[Congressional Record Volume 140, Number 81 (Thursday, June 23, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 23, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
       NATIONAL DEFENSE AUTHORIZA- TION ACT FOR FISCAL YEAR 1995

  The Senate continued with the consideration of the bill.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. JOHNSTON. Madam President, I understand the Senator from 
Wisconsin has a unanimous consent request. I would like to yield to him 
for that purpose, and retain the floor.


                         Privilege of the Floor

  Mr. KOHL. Madam President, I ask unanimous consent that Bill Brennan, 
a fellow in my office, be granted the privilege of the floor during 
consideration of the defense authorization bill.
  Mr. JOHNSTON. I understand the junior Senator from Wisconsin also has 
a unanimous-consent request.
  Mr. FEINGOLD. Madam President, I ask unanimous consent that Bob 
Gerber, a congressional fellow in my office, be granted the privilege 
of the floor during the consideration of the National Defense 
Authorization Act for fiscal year 1995, and all votes thereto.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1840

  (Purpose: To restore the level of funding for the National Defense 
  Sealift Fund that was requested in the budget for fiscal year 1995 
  submitted by the President by reducing fiscal year 1995 funding for 
                                 LHD-7)

  Mr. JOHNSTON. Madam President, on behalf of myself, the Senator from 
California, Mrs. Feinstein, and Senators Breaux, Boxer, and Kohl, I 
send an amendment to the desk and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Louisiana [Mr. Johnston], for himself, 
     Mrs. Feinstein, Mr. Breaux, Mrs. Boxer and Mr. Kohl, proposes 
     an amendment numbered 1840.

  Mr. JOHNSTON. Madam President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 249, line 7, strike out ``1949'' and insert in lieu 
     thereof the following:

     1949.

     SEC. 1068. ACQUISITION OF STRATEGIC SEALIFT SHIPS.

       (a) Amount for Shipbuilding and Conversion.--
     Notwithstanding section 102(3), there is hereby authorized to 
     be appropriated for the Navy for fiscal year 1995, 
     $5,532,007,000 for procurement for shipbuilding and 
     conversion.
       (b) National Defense Sealift Fund.--Notwithstanding section 
     302(2), there is hereby authorized to be appropriated for the 
     Armed Forces and other activities and agencies of the 
     Department of Defense $828,600,000 for providing capital for 
     the National Defense Sealift Fund.

  Mr. LOTT. Madam President, I observe the absence of a quorum.
  Mr. JOHNSTON. Madam President, I believe I had the floor.
  Mr. LOTT. Madam President, I do not believe the Senator keeps the 
floor after he submits an amendment. I ask for this time so I have an 
opportunity to at least take a look at the amendment. I have not had a 
chance to see it at all. I would like to at least have a chance to look 
at it before we proceed, so I would like to observe the absence of a 
quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. JOHNSTON. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. JOHNSTON. Madam President, has the amendment been reported?
  The PRESIDING OFFICER. Yes.
  Mr. JOHNSTON. Madam President, this amendment undoes an amendment 
adopted in error in the Armed Services Committee which transferred $600 
million from the so-called fast sealift account to build an LHD-7, 
which is an amphibious attack ship.
  Madam President, the action of the Armed Services Committee was 
opposed by the Navy, by the Secretary of the Navy, is opposed strongly 
by the Chairman of the Joint Chiefs of Staff, Gen. John Shalikashvili, 
whose letter I have that says that the fast sealift program is the 
centerpiece of Army doctrine now. It is opposed by the administration, 
and it is opposed by the chairman of the Armed Services Committee.
  With that kind of lineup, Madam President, my colleagues may ask: How 
inthe world did the Senate Armed Services Committee ever adopt the 
amendment? Well, the answer is very simple. They were given erroneous 
information about the U.S. Navy. I have a memorandum here by Mr. R.J. 
Natter of the Office of Legislative Affairs of the Department of the 
Navy, dated 13 June 1994, in which he described how the erroneous 
information came about. He says in the first sentence:

       The attached memorandum describes the sequence of events 
     which resulted in your staff being provided incorrect 
     information regarding the option expiration date for new 
     construction ships 2 and 3, awarded to NASSCO.

  It goes on then describing how the Senate Armed Services Committee 
was given erroneous information.
  In effect, Madam President, what the Senate Armed Services Committee 
was told was that you could fund both the sealift program and the LHD-7 
amphibious attack ships within this budget without hurting the fast 
sealift program.
  I ask unanimous consent that the letter from R.J. Natter be printed 
in the Record at this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
                                           Department of the Navy,


                                Office of Legislative Affairs,

                                    Washington, DC, June 13, 1994.
     Memorandum for: Mr. Steve Saulnier and Mr. Creighton Greene.
     Subject: Sealift new construction contract options.
       1. The attached Memorandum describes the sequence of events 
     which resulted in your staff being provided incorrect 
     information regarding the option expiration date for new 
     construction ships 2 and 3 awarded to NASSCO. Contrary to the 
     initial information provided to OLA by NAVSEA on 9 June, the 
     option expires on 31 December 1994 vice 31 December 1995. The 
     correct option expiration date (31 Dec 94) was provided to my 
     office on 10 June and passed immediately to you on that same 
     date.
                                                      R.J. Natter.

  Mr. JOHNSTON. The letter points out that the information was in 
error.
  Why is it, Madam President, that General Shalikashvili states: 
``However, this diversion would place at risk the centerpiece program 
of the MRS''--that being the Mobility Requirement Study--``despite the 
critical shortfall cited by many commanders in chief in congressional 
testimony. Further, it changes the priorities of an essential program 
developed with the Joint Chiefs of Staff and approved by the Secretary 
of Defense.''
  I ask unanimous consent that General Shalikashvili's letter be 
printed in the Record at this point.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    The Joint Chiefs of Staff,

                                    Washington, DC, June 22, 1994.
     Hon. Sam Nunn,
     Chairman, Committee on Armed Services, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman, I am writing to express my concern about 
     the current version of S. 2182 that would significantly 
     damage our long-standing, integrated lift requirements as 
     expressed in the 1992 Mobility Requirements Study (MRS) and 
     supported in our budget request.
       My primary concern is that the proposed legislation diverts 
     all FY 1995 funding from construction of two Large Medium 
     Speed RO/RO ships (LMSR) to an initial down payment for 
     another multi-purpose amphibious assault ship (LHD) and also 
     funds two Maritime Pre-positioning Ships (MPS) that the 
     Department of Defense did not request. I understand this 
     committee revision was based upon erroneous information, 
     later corrected, which was provided to you by the department. 
     However, this diversion would place at risk the centerpiece 
     program of MRS despite the critical shortfall cited by many 
     CINCs in congressional testimony. Further, it changes the 
     priorities of an essential program developed with the Joint 
     Chiefs of Staff and approved by the Secretary of Defense.
       Another concern I have is that the bill diverts $43 million 
     in funding from the purchase of Ready Reserve Force (RRF) RO/
     RO ships which are key to the surge of early arriving forces. 
     The SASC instead funds a subsidy program to incorporate 
     defense features on future US-built commercial ships. This 
     would sacrifice near-term readiness that supports early 
     combat force deliveries in favor of an unproven concept 
     designed to deliver follow-on materiel. At a minimum, I 
     request the Senate provide the Department the legislative 
     authority to acquire these ships.
       If enacted, these measures will unravel our carefully 
     constructed sealift acquisition program. This measured and 
     studied program has enjoyed wide support among military 
     professionals, defense executives and the Congress as both 
     absolutely essential and fiscally responsible. The MRS, a 
     rigorous study which included over 90 warfighting analysis 
     cases, also received the endorsement of each member of the 
     JCS.
       Please reverse these actions to support our sealift 
     requirements--the military strategy critically requires it. I 
     strongly support the execution of the MRS program.
           Sincerely,
                                            John M. Shalikashvili,
                            Chairman of the Joint Chiefs of Staff.

  Mr. JOHNSTON. The last sentence states:

       Please reverse these actions to support our sealift 
     requirements--the military strategy critically requires it.

  Madam President, what is the fast sealift program? With the end of 
the cold war, we could no longer place troops in great numbers all 
around the world.
  At one time we had 300,000 troops in Germany. We had troops all over 
the world. And fast sealift has always been important but not such 
critical importance as it has been since the demise of the cold war 
when we had to bring troops back to the continental United States, but 
with a critical fast sealift ability to be able to deploy them quickly 
to trouble spots around the world.
  For example, the present difficulty with North Korea. We have reduced 
our number of troops in South Korea. I believe that we now have only 
37,000 troops in South Korea, a tripwire amount. If hostilities should 
break out in South Korea, we would have to very quickly deploy troops 
and materiel to South Korea to defend them. We would have to deploy 
them very quickly.
  My colleagues who are old enough will remember in 1950 when the North 
attacked the South how the North Koreans were able to chew up a huge 
amount of the South Korean Peninsula because it took our troops so long 
to get there.
  Recognizing this difficulty, in 1991, the Chairman of the Joint 
Chiefs commissioned a study called the MRS, the mobility requirement 
study, to determine how much sealift we would need, of what kind and 
nature, to get what kind of requirements to what trouble spots in the 
world, at what costs, and on what time line.
  They came up with a study that concluded that what we needed were 
some 36 ships which we called roll-on/roll-off ships. Some are fast 
sealift, some are medium-speed ships, having this ability to roll on 
and roll off ships. The 36 ships will allow some 2 million square feet 
of prepositioned materiel equipment within 15 days.
  In other words, a balloon goes up in North Korea. Once we build this 
fast sealift, you could get 2 million square feet of materiel within 15 
days to South Korea. It would also enable us to get two heavy divisions 
on site within 30 days. So, these were thought to be absolutely 
essential requirements to the new post-cold-war strategy. If you are 
going to bring the troops back to the United States, you must be able 
to get them to the trouble spots quickly.
  As General Shalikashvili says, this fast sealift is a centerpiece of 
our strategy. Either you have to have the troops out there on site, 
which means you have to have many more troops at much greater costs, or 
you have to have the fast sealift capability.
  In Operation Desert Storm we learned a great many things. We learned 
about the importance of smart weapons, about the importance of 
technology, and about the importance of having overwhelming force. We 
also learned about our difficulties in our sealift. It so happens that 
that was no problem in Operation Desert Storm because we had some 6 
months within which to get our materiel and our manpower over into the 
desert location.
  Madam President, President Clinton said last week that is probably 
the last conflict that we will have the luxury of that much time to get 
our troops over.
  The next time the balloon goes up it will probably be on a much 
faster timeline, as in North Korea. If North Korea attacks, and we hope 
and pray as to that particular conflict the immediate danger has been 
taken out--we have had discussions here about that particular problem 
today. Some of our colleagues think that that issue is just as 
difficult as it ever was. But there are many other difficult places on 
the face of the Earth which will require a quick reaction.
  It is, therefore, absolutely essential, Madam President, that we 
allow for these 36 roll-on/roll-off ships. Now there are 19 of these 36 
ships that have yet to be built. There are six what we call options. An 
option really is an offer stating a price, stating a means to build a 
ship, with a specified time for acceptance of that offer. There are now 
six of those options at a shipyard in my State, Avondale; six at 
NASSCO, National Steel, I think, in California, in San Diego; five 
conversions of presently existing ships; and two yet to be determined.
  The first two of those options at Avondale have been exercised. The 
first two at NASSCO have been exercised.
  What the Armed Services Committee did was put in this budget $600 
million to pay for those first two NASSCO and Avondale ships, so that 
we are just beginning on meeting these requirements for fast sealift. 
And the first $600 million was placed here in order to do that.
  What the Armed Services Committee was told was that this amendment 
would not interfere with those first four ships going forward and being 
constructed. In fact, it would not only prevent those ships from being 
constructed, but the LHD-7, which is an excellent amphibious attack 
ship, which is the alternative funding provided by the Armed Services 
Committee. That is a $1.4 billion ship.
  So you take the first $600 million, and you have an unmet obligation 
for the additional $800 million, which would probably not only take 
these four fast sealift ships, but take the next six or so fast sealift 
ships. So you would be saying probably so long to the whole fast 
sealift program.
  Madam President, I am sure the Armed Services Committee would not 
have done that had they been given the correct information. I feel sure 
that the Senate would not do that based upon the correct information. 
It is rare that you can stand on the floor of the Senate and have an 
issue which is really clear, because usually by the time issues are 
here on the floor of the Senate they are hotly debated, highly 
controversial, with equities on both sides.
  With respect to this issue, Madam President, I say without fear of 
contradiction there is no other position than the position of Senator 
Feinstein and me with respect to this amendment. I hope that we will be 
able to find an alternative way of funding the LHD-7 which, as I 
mentioned earlier, is an excellent amphibious attack ship. Everyone 
would like to fund it, and I would like to cooperate with my 
distinguished friend from Mississippi, Mr. Lott, in finding an 
alternative way to do that. But the fast sealift program Madam 
President, is the centerpiece of our new doctrine. You cannot have it 
both ways. You cannot reduce the size of your armed force and have a 
doctrine that depends upon a projection of power by fast mobility of 
those troops to a trouble spot quickly, and then deny the ability to 
get them there.
  That is what the action of the Armed Services Committee, 
inadvertently, mistakenly, to be sure, in good faith, to be sure, but 
nevertheless that is exactly what the action of the Armed Services 
Committee has done.
  All our amendment does is restore what General Shalikashvili says is 
the centerpiece of this program.
  I would also like to print in the Record at this point, Madam 
President, a letter from Gen. Colin Powell, dated 9 July 1993, really 
to the same effect; the final sentence being: ``Your continued support 
for the MRS''--that is the mobility requirement study--
``recommendations is critical if we are to solve the identified 
mobility shortfalls.''
  Madam President, I ask unanimous consent to print that letter in the 
Record at this point.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                        Joint Chiefs of Staff,

                                     Washington, DC, July 9, 1993.
     Hon. Sam Nunn,
     Chairman, Committee on Armed Services, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman, This letter reaffirms my full support 
     for the recommendations of the Mobility Requirements Study 
     (MRS). I understand that there are Congressional questions 
     regarding whether a final decision on the MRS recommendations 
     has been made and if additional analysis concerning 
     alternative pre-positioning options is required.
       A decision on the MRS recommendations was made when the 
     Secretary of Defense signed Volume I of the MRS on 23 January 
     1992. The MRS remains the central defining mobility document 
     within the Department of Defense, as evidenced by the recent 
     Deputy Secretary of Defense approval of MRS Volume II. 
     Exhaustive analysis during the study demonstrated the MRS 
     recommendations to be the best solution for meeting 
     warfighting requirements at moderate risk at the lowest 
     possible cost. Further analysis is not needed and would 
     either hold in abeyance or slow the acquisition of the MRS-
     recommended lift assets, and will delay implementation of the 
     needed mobility improvements.
       Your continued support for the MRS recommendations is 
     critical if we are to solve the identified mobility 
     shortfalls.
           Sincerely,
     Colin L. Powell,
       Chairman of the Joint Chiefs of Staff.

  Mr. JOHNSTON. Madam President, I would simply like to emphasize what 
the Chairman of the Joint Cheifs of Staff says in his letter of this 
month: ``Please reverse these actions to support our sealift 
requirements. The military strategy critically requires it.''
  ``The military strategy critically requires it.''
  Madam President, there is no other position, I submit, but to support 
the position of Senator Feinstein and myself, and I urge the Senate to 
do so.
  Mrs. FEINSTEIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mr. FEINSTEIN. Madam President, I rise today as an original cosponsor 
of this amendment to restore $600.8 million to a high-priority military 
program--the National Defense Sealift Fund.
  The Sealift Program is extremely important to U.S. national security. 
As fewer U.S. troops are deployed overseas, it becomes even more 
important to have the ability to quickly and effectively transport 
military personnel and equipment anywhere in the world.
  The sealift program--and the National Defense Sealift Fund--addresses 
this high priority national security requirement and is strongly 
supported by the Joint Chiefs of Staff and the regional commanders in 
chief.
  Before I get into the specifics of the sealift program and why it is 
so important to restore the funds requested by the President, let me 
briefly summarize how we got to this point.


                         incorrect information

  During its markup of the Defense Authorization Act, the Senate Armed 
Services Committee recommended shifting $600.8 million from the 
National Defense Sealift Fund to the LDH-7 amphibious assault ship, 
which was not requested by the President nor supported by the Pentagon.
  However, as the chairman of the Armed Services Committee and others 
now realize, the committee's action was based on factually incorrect 
information provided to staff by the Navy.
  In a recent memorandum to the committee, Admiral Natter, the Chief of 
Navy Legislative Affairs, states that certain events resulted ``in your 
staff being provided incorrect information regarding the option 
expiration date for new construction ships * * * the option expires on 
December 31, 1994 vice December 31, 1995.''
  I ask unanimous consent that the memorandum be printed in the Record 
at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1).
  Mrs. FEINSTEIN. As a result of this error, fiscal year 1995 funds 
were shifted to the LHD-7 amphibious assault ship--which, by the way, 
will be incrementally funded at only 40 percent of the actual cost of 
$1.4 billion--on the assumption that new construction of the sealift 
ships would not be affected. However, without fiscal year 1995 funds 
for the National Defense Sealift Fund, options for new construction of 
sealift ships cannot be exercised, and this high-priority program will 
be unacceptably delayed.
  So, I believe that if incorrect information had not been provided to 
the committee by the Navy, we would not be here today. This amendment 
corrects the Armed Services Committee's action, which was based on 
faulty information.


                 support from the joint chiefs of staff

  It is vitally important to restore money to the National Defense 
Sealift Fund. As I previously stated, this program is also strongly 
supported by the Joint Chiefs of Staff. Let me read from a recent 
letter from General Shalikashvili to the committee:

       I am writing to express my concern about the current 
     version of S. 2182 that would significantly damage our long-
     standing, integrated lift requirements as expressed in the 
     1992 mobility requirements study (MRS) and supported in our 
     budget request.
       My primary concern is that the proposed legislation diverts 
     all fiscal year 1995 funding from construction of two large 
     medium speed RO/RO ships (LMSR) to an initial down payment 
     for another multi-purpose amphibious assault ship (LHD) * * 
     *.
       This diversion would place at risk the centerpiece program 
     of the MRS despite the critical shortfall cited by many CINCs 
     in congressional testimony. Further, it changes the 
     priorities of an essential program developed with the Joint 
     Chiefs of Staff and approved by the Secretary of Defense.

  So, as you can see, General Shalikashvili, the Chairman of the Joint 
Chiefs of Staff, strongly supports restoration of the National Defense 
Sealift Fund.
  I ask unanimous consent that this letter, as well as letters from 
General Fogleman, commander of U.S. Transportation Command, and A.J. 
Herberger, Maritime Administration, also be printed in the Record at 
the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mrs. FEINSTEIN. Madam President, the Sealift Program is also 
supported by the Secretary of the Navy.
  I called the Secretary of the Navy last night and said, ``Secretary 
Dalton, what about this program?''
  He said, ``It is our top priority.''
  I said, ``What about the LHD-7?''
  He said, ``No question, it is a good ship; but this is our priority 
and this is what we are asking for.''
  I said, ``May I quote you?''
  He said, ``Yes, you may quote me.''
  As you know, and has been said, as a result of the mistaken 
information, funding of $600 million was applied to the LHD-7.
  I would very much like to accommodate my colleague from Mississippi. 
We have worked together on other matters. If an offset could be found, 
I would be happy to make this accommodation.
  I was in the chair, Madam President, when the chairman of the Armed 
Services Committee, the distinguished Senator from Georgia, reported 
yesterday that the authorization is larger than the 602(b) allocation. 
So unless an offset can be found, when the issue comes to 
appropriations, there will be a real problem in terms of two competing 
programs.


                     requirement for sealift ships

  The requirement for the roll-on/roll-off ships is well documented. 
The Nation's deployment to Operation Desert Shield/Storm highlighted a 
significant shortfall in strategic sealift assets. Hence, Congress 
mandated the Pentagon to conduct a mobility requirements study to 
determine the Nation's strategic airlift and sealift requirements.
  The study, concluded and approved by the Joint Chiefs of Staff in 
January 1992, states that the Nation should have the ability to deploy 
2 million square feet of Army prepositioned afloat equipment sets 
available for combat operations within 15 days of the beginning of a 
conflict, and the ability to surge two Army heavy division ready for 
combat operations within 30 days of the beginning of a conflict.
  These roll on/roll off ships, with a capacity of nearly 400,000 
square feet per ship, have the ability to meet the requirements in the 
mobility requirements study.


                     impact of not funding sealift

  Let me quote from a Defense Department point paper on the effects of 
not funding the National Defense Sealift Fund at the requested amount:

       Result: Increased risk of early casualties and loss of key 
     facilities. Loss of deterrence value obtained through 
     perception that United States will respond rapidly and with 
     overwhelming capability if challenged.

  The DOD point paper goes on to spell out the real risks to our 
fighting forces and the major threats to U.S. national security if 
these sealift ships are not funded in fiscal year 1995. As it states, 
any delay to sealift funding is detrimental to our military strategy--
even a 1 year delay.
  I ask unanimous consent that the DOD point paper also be printed in 
the Record at the conclusion of my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered
  (See exhibit 3.)


                           shipyard contracts

  Mrs. FEINSTEIN. Let me now just briefly touch on what the actual 
impact to the shipyards and the new construction contracts will be if 
funding for the National Defense Sealift Fund is not restored and the 
contract options for the second and third ships are delayed.
  The two shipyards that won the competitive bidding process to 
construct the sealift ships are the National Steal and Shipbuilding 
Company [NASSCO] in San Diego, and Avondale in New Orleans. So, this 
issue is particularly important to California and Louisiana, as well as 
many other states with various suppliers and subcontractors.

  If the National Defense Sealift Fund is not fully funded in fiscal 
year 1995 and the contract options are not exercised by the expiration 
date of December 1994, the following would happen:
  Most importantly, the high priority sealift program will be 
unacceptably delayed up to 14 months, which puts U.S. national security 
and our war fighting strategy at risk;
  Any disruption in the program with the current contract options would 
result in increase program costs due to the loss of learning from ship 
to ship, higher overhead costs, layoff/rehire costs and other factors;
  Contracts will have to be renegotiated, and then questions arise 
about increased cost, as well as contract disputes and protests; and
  The 12 to 14 month gap between construction of ships 1 and 2 would 
disrupt the series construction of up to 5 additional ships and cause 
the shipyards to lay off and then rehire over 1,000 workers--something 
that would be devastating to the San Diego area and the entire State of 
California which has been hit hard by defense downsizing and military 
base closures.
  The sealift contracts were justly competed and fairly won. Funds are 
needed in fiscal year 1995 to exercise the two planned options for 
additional RO/RO ships.


                     lhd-7 amphibious assault ship

  While I do not necessarily oppose the LHD-7 amphibious assault ship, 
I do oppose the way its authorization is being proposed.
  I strongly oppose funding the LHD-7 by shifting funds out of a higher 
priority military program--the National Defense Sealift Fund.
  Additionally, the Pentagon does not plan to request funding for the 
LHD-7 until the year 2000. Yes, amphibious assault ships are important 
and they have a place in the U.S. military. But, priorities need to be 
determined and decisions need to be made.
  The Secretary of Defense and the Joint Chiefs of Staff determined 
that sealift ships are a higher priority, and the President's fiscal 
year 1995 budget requests reflects this priority--it requested funds 
for sealift, and did request funds for the LHD-7.
  The LHD-7 would be also incrementally funded at only 40 percent of 
its actual costs of $1.4 billion. Therefore, in addition to authorizing 
$600 million in fiscal year 1995, we will have to come up with the 
additional $800 million next year, plus find the $600 million in 
funding for this year's requested sealift ships.
  As a result, funding the LHD-7 from the National Defense Sealift Fund 
becomes a $1.4 billion problem for the Department of Defense and 
Congress next year--funds that were not anticipated nor programmed. 
With a defense budget as tight as it is, I cannot justify placing a 
financial burden on tomorrow's defense budget simply to fund another, 
lower priority program, today.


                               conclusion

  The sealift program is extremely important to U.S. national security, 
as documented by the Defense Department's Mobility Requirement's Study. 
The sum of $600.8 million for the National Defense Sealift Fund was 
requested by the President in fiscal year 1995, is supported by our 
military leaders, and--if not for incorrect information being provided 
to the Armed Services Committee--would not have been shifted to fund 
the LHD-7 amphibious assault ship, which was not requested by the 
President nor supported by the Pentagon.
  This amendment would simply restore the President's budget request by 
returning the $600.8 million from the LHD-7 to the National Defense 
Sealift Fund, thus protecting the sealift program and U.S. national 
security.
  I strongly urge my colleagues to support the amendment.

                               Exhibit 1

                                           Department of the Navy,


                                Office of Legislative Affairs,

                                    Washington, DC, June 13, 1994.
     Memorandum for Mr. Steve Saulnier and Mr. Creighton Greene.
     Subject: Sealift New Construction Contract Options.

       1. The attached Memorandum describes the sequence of events 
     which resulted in your staff being provided incorrect 
     information regarding the option expiration date for new 
     construction ships 2 and 3 awarded to NASSCO. Contrary to the 
     initial information provided to OLA by NAVSEA on 9 June, the 
     option expires on 31 December 1994 vice 31 December 1995. The 
     correct option expiration date (31 Dec 94) was provided to my 
     office on 10 June and passed immediately to you on that same 
     date.
                                                      R.J. Natter.
                                  ____

                                                    June 10, 1994.
     Memorandum for the Chief of Legislative Affairs.
     Subject: Sealift New Construction Funding.

       1. Prior to the mark on 09 June, Mr. Steve Saulnier, PSM, 
     SASC, requested the funding profile for the National Defense 
     Sealift Fund and the sequence of contract option awards. The 
     NAVCOMP SCN/NDSF analyst provided the attached table of NDSF 
     obligations. Prior to providing the table, I contacted the 
     Strategic Sealift Program Office and was referred to Mr. Jack 
     Cameron, Director of New Construction (NASSCO). My specific 
     question at this time was, ``When does USN intend to award 
     the options for the FY94 and FY95 new construction sealift 
     ships?'' I received the response that the first option for 
     each yard was for two new construction ships, with the first 
     award planned for August 94 (Avondale) and the second award 
     planned for Feb 95 (NASSCO). My notes from this conversation 
     were written on the bottom of the attached NDSF funding 
     table. This table was provided to the SASC.
       2. On 09 June (approx 1100), Mr. Saulnier asked the 
     question, ``For the option planned for award in Feb 95, when 
     does that option expire, 30 Sep 95 or 31 Dec 95?'' I again 
     contacted Mr. Cameron for the answer. His response was the 
     option expired on 31 Dec 95. I passed this information to Mr. 
     Saulnier.
       3. On 09 June at approximately 1630, Mr. Creighton Greene, 
     PSM, SASC, called to confirm the information concerning the 
     contract options. I called NAVCOMP NDSF/SCN analyst and her 
     recollection was the options were calendar year options, but 
     she requested I contact the program office to confirm. I 
     again called Mr. Cameron and asked him the impact if the 
     Sealift Procurement funds were delayed until FY96. His reply 
     was that this would result in a delay of the award from Feb 
     95 to Dec 95, would cause a 10 month delay in the five NASSCO 
     new construction ships, and would result in a cost 
     escalation. I asked Mr. Cameron to provide an estimate of the 
     cost impact, but he indicated the budget analysis would take 
     time. He again confirmed the date of 31 Dec 95 for the NASSCO 
     options. I informed Mr. Greene the program office confirmed 
     the dates and the deletion of the FY95 funds would delay the 
     five NASSCO new construction ships approximately one year and 
     cause a cost escalation.
       4. On 10 June at approximately 0900, Mr. Cameron called me 
     to state he had erred in his information concerning the 
     contract option expiration dates and provided the attached 
     memo.
                                           M.E. Ferguson, CDR USN.
                                  ____


                               Memorandum

                                                    June 10, 1994.
     From: John Cameron (PMS3851).
     To: Cdr. Mark Ferguson (OLA).
     Subject: Strategic Sealift Option Exercise Dates.
     Ref: (a) Phonecon Mr. Cameron/Cdr Ferguson of 9 Jun 94.

       1. This memo provides clarification of the existing 
     Contractual option exercise dates for the first two follow on 
     ships for both new construction contracts awarded to Avondale 
     and NASSCO. The option exercise dates for ships 2 & 3 for 
     each contract is ``not later than 31 December 1994''. The 
     current plan is to exercise the Avondale options with 
     available funding provided through FY94 in the Aug/Sep 94 
     time frame and the NASSCO options with FY95 funds prior to 31 
     Dec 94. The FY95 HASC report, which deleted the FY95 funds 
     but in turn would make available the same amount of the FY94 
     $1.2B of the carrier funds, thus would not impact the 
     exercise of the two ship NASSCO option. Any adjudication of 
     the stop work order resulting from the protest is not 
     expected to shift the ``exercise option date'' to the right 
     more than four and a half months. Therefore, FY95 funds are 
     still required to exercise the NASSCO two ship option.
       2. Any information that was passed to you during reference 
     (a) that differs from this information was incorrect.

                                              John C. Cameron,

                                                         Director,
                                          NASSCO New Construction.
                                  ____


                  Questions Concerning Sealift Awards

       Q1. What do the Avondale and NASSCO contracts specify as 
     the expiration dates for options on ships 2 through 5?
       A1. The contract option dates for AII and NASSCO ships are 
     the same, and are as follows:

                                                      Option expiration
Ship Numbers:                                                      date
  2 and 3*.....................................................12/31/94
  4............................................................12/31/95
  5............................................................12/31/96
  6............................................................12/31/97

*Contract requires exercising 2 ships and has no provision to exercise 
only one.

       Q2. What is the impact of the contract protest resolution 
     on the option expiration dates?
       A2. The Navy is negotiating an extension to the option 
     exercise dates for NASSCO option to reflect the 4\1/2\ months 
     stop work order which was imposed as a result of the award 
     protest to GAO. This adjustment is in process and exact 
     extension and cost is to be determined.
       Q3. What is the amount needed to exercise LHD-7 option 
     prior to expiration?
       A3. $1.4 billion is required to exercise the current option 
     to produce LHD-7. (incomplete answer)
       Q4. What is the cost associated with extending the option 
     dates for the two NASSCO ships until FY96? Of extending one 
     option each for Avondale and NASSCO until FY96? What are the 
     contractual implications of extending the options?
       A4. The costs for extending the first option for two ships 
     for NASSCO and of extending one ship for each contractor of 
     the first option for two ships would have to be investigated 
     further. The contracts were not structured with those 
     provisions.
                                  ____


                                            NDSF FUNDING REQUIREMENTS                                           
----------------------------------------------------------------------------------------------------------------
                                                                      Fiscal year--                             
                                FY 1993  -----------------------------------------------------------------------
                              and prior      1994        1995        1996        1997        1998        1999   
----------------------------------------------------------------------------------------------------------------
NDSF funding................     2,463.5     1,540.8       608.6       622.2     1,169.1       618.6         2.2
Conversions.................    5/1359.1  ..........  ..........  ..........  ..........  ..........  ..........
New construction............     2/757.2     2/581.6     2/600.8     2/603.1    4/1167.0     2/616.4  ..........
R&D efforts.................  ..........         2.0        19.2        19.1         2.1         2.2         2.2
RRF procurements............  ..........  ..........        43.0  ..........  ..........  ..........  ..........
Loan guarantees.............  ..........        50.0  ..........  ..........  ..........  ..........  ..........
Transfer to CVN-76..........  ..........     1,200.0  ..........  ..........  ..........  ..........  ..........
End cost balance............      *347.2       *54.4  ..........  ..........  ..........  ..........  ..........
----------------------------------------------------------------------------------------------------------------
*Balances from prior year appropriations are used to offset fiscal year 1994/1995 funding requirements.         
  Obligated to date is approximately $1819.1 million. Options for 2 ships will be awarded in both fiscal year   
  1994 and fiscal year 1995.                                                                                    
                                                                                                                
Note.--First option pickup is for 2 ships to 1 yard. Fiscal year 1994--August 1994; fiscal year 1995--February  
  1995.                                                                                                         

                               Exhibit 2

                                                   Chairman of the


                                        Joint Chiefs of Staff,

                                    Washington, DC, June 22, 1994.
     Hon. Sam Nunn, 
     Chairman, Committee on Armed Services, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman, I am writing to express my concern about 
     the current version of S. 2182 that would significantly 
     damage our long-standing, integrated lift requirements as 
     expressed in the 1992 Mobility Requirements Study (MRS) and 
     supported in our budget request.
       My primary concern is that the proposed legislation diverts 
     all FY 1995 funding from construction of two Large Medium 
     Speed RO/RO ships (LMSR) to an initial down payment for 
     another multi-purpose amphibious assault ship (LHD) and also 
     funds two Maritime Pre-positioning Ships (MPS) that the 
     Department of Defense did not request. I understand this 
     committee revision was based upon erroneous information, 
     later corrected, which was provided to you by the department. 
     However, this diversion would place at risk the centerpiece 
     program of MRS despite the critical shortfall cited by many 
     CINCs in congressional testimony. Further, it changes the 
     priorities of an essential program developed with the Joint 
     Chiefs of Staff and approved by the Secretary of Defense.
       Another concern I have is that the bill diverts $43 million 
     in funding from the purchase of Ready Reserve Force (RRF) RO/
     RO ships which are key to the surge of early arriving forces. 
     The SASC instead funds a subsidy program to incorporate 
     defense features on future US-built commercial ships. This 
     would sacrifice near-term readiness that supports early 
     combat force deliveries in favor of an unproven concept 
     designed to deliver follow-on material. At a minimum, I 
     request the Senate provide the Department the legislative 
     authority to acquire these ships.
       If enacted, these measures will unravel our carefully 
     constructed sealift acquisition program. This measured and 
     studied program has enjoyed wide support among military 
     professionals, defense executives and the Congress as both 
     absolutely essential and fiscally responsible. The MRS, a 
     rigorous study which included over 90 warfighting analysis 
     cases, also received the endorsement of each member of the 
     JCS.
       Please reverse these actions to support our sealift 
     requirements--the military strategy critically requires it. I 
     strongly support the execution of the MRS program.
           Sincerely,
                                            John M. Shalikashvili,
                            Chairman of the Joint Chiefs of Staff.
                                  ____

         U.S. Department of Transportation, Maritime 
           Administration,
                                    Washington, DC, June 16, 1994.
     Hon. Sam Nunn,
     U.S. Senate,
     Washington, DC.
       Dear Senator Nunn: I am writing to express concern about 
     the recent House Armed Services Committee reallocation of $43 
     million in the National Defense Sealift Fund (NDSF) for a 
     National Defense Features (NDF) Program, in place of the 
     acquisition of Roll-on/Roll-off (RO/RO) vessels for the Ready 
     Reserve Force (RRF) in Fiscal Year 1995. This redirection of 
     RRF acquisition funds would have a serious negative effect 
     upon the implementation of the Department of Defense (DOD) 
     integrated mobility plan proposed at the completion of the 
     Mobility Requirements Study (MRS) and the Bottom-Up Review.
       The MRS determined that 36 RRF RO/RO vessels, able for 
     loading within 4 days, are required for strategic sealift. 
     Although 12 RO/RO's were purchased for the RRF in FY 1993, 
     seven ships are still needed to reach this fleet's RO/RO 
     capacity. The Administration's program to add sealift 
     capacity includes new construction, conversion of existing 
     ships, and procuring ships available on the market today. The 
     purchase of used ships is vital because it allows for the 
     near term acquisition of commercial ships that are still in 
     good condition and are useful for military operations.
       This $43 million request for FY 1995 is necessary to 
     continue these RRF acquisitions. Any reduction in funding for 
     the RRF would seriously delay necessary enhancements to 
     strategic sealift. At a time when sealift mobility is an 
     increasingly important element of U.S. strategy, it is 
     important that we proceed with a balanced program to acquire 
     the most cost-effective mix of sealift vessels.
       For these reasons, I strongly urge you to support the use 
     of $43 million in the NDSF for the purchase of existing RO/
     RO's for the RRF in support of the DOD integrated mobility 
     plan.
           Sincerely,
                                                   A.J. Herberger,
                                           Maritime Administrator.
                                  ____



                                  U.S. Transportation Command,

                          Scott Air Force Base, IL, June 21, 1994.
     Hon. Sam Nunn,
     U.S. Senate,
     Washington, DC.
       Dear Senator Nunn: The Commander-in-Chief of the United 
     States Transportation Command is responsible for the 
     readiness of America's Defense Transportation System--an 
     integrated and balanced system of air, land, and sea assets. 
     Responsibilities for readiness include both today's assets 
     and the programs to ensure continued capability in the 
     future. It is the latter that is of immediate and 
     considerable concern.
       The President's budget request provides for the necessary 
     enhancements and modernization required to maintain a viable 
     Defense Transportation System. However, if the current 
     language contained in the Senate Armed Services Committee 
     markup of the FY95 Defense Authorization Bill is not amended, 
     it will seriously damage our sealift modernization program 
     and threaten the viability of the entire Defense 
     Transportation System.
       Specifically, there are two issues of concern:
       --the diversion of all FY95 funding from the construction 
     of Large, Medium Speed Roll-on, Roll-off ships (LMSRs) to a 
     down payment on an amphibious assault ship and two Maritime 
     Prepositioned Ships (MPSs). This would seriously disrupt a 
     key modernization program recommended in the Mobility 
     Requirements Study and unanimously endorsed by the Secretary 
     of Defense, the Chairman and the Joint Chiefs.
       --the diversion of $43 million in funding from the purchase 
     of Ready Reserve Force (RRF) RO/ROs to provide a subsidy 
     program for defense features on future US built commercial 
     ships. This would sacrifice near term readiness and early 
     surge capability for an unproven concept designed to deliver 
     follow-on forces.
       All regional CINCs cite sealift as one of their critical 
     shortfalls. The President's budget request will provide a 
     significant near-term improvement in our sealift capability. 
     However, the changes contained in the Senate Bill will 
     eliminate these improvements and seriously threaten 
     USTRANSCOM's capability to support the transportation 
     requirements of America's war fighting CINCs. Request your 
     support of the President's budget request on sealift 
     enhancement.
           Sincerely

                                           Ronald R. Fogleman,

                                                    General, USAF,
                                               Commander in Chief.

                               Exhibit 3

                    Information Paper--June 21, 1994

       Subject: Impact of the Senate's Mark of the FY 95 Defense 
     Authorization Bill on the Recommendation of the 
     Congressionally-mandated Mobility Requirements Study (MRS).
       1. Purpose. To provide information regarding the Senate 
     Mark and the MRS.
       2. Background. Our Nation's deployment to OPERATION DESERT 
     SHIELD highlighted a significant shortfall in strategic 
     mobility assets. Congress mandated the Mobility Requirements 
     Study to determine the Nation's strategic airlift and sealift 
     requirements. The Mobility Requirements Study used approved 
     scenarios which described a future where strategic mobility 
     was the linchpin for successful power projection operations. 
     The deploying US forces were joint and complementary, and 
     employed decisive force to reduce the risk of high 
     casualties. The MRS recommendations support Joint Doctrine 
     where force projection is critical to achieving military 
     objectives. The Senate Mark challenges this integrated 
     strategic mobility plan and places at risk the MRS 
     recommendations which allow for the timely deployment of 
     decisive force and low casualties.
       3. At Risk MRS Recommendations.
       a. The MRS recommended the acquisition of up to 20 Large 
     Medium Speed RO/ROs (LMSRs). When the actual ship design was 
     finalized the number of LMSRs was fixed at 19. Eight of these 
     ships represent the MRS recommended capability to place 2 
     million square feet of Army unit sets of equipment afloat. 
     the remaining eleven LMSRs represented the MRS recommended 
     capacity to surge three million square feet of units 
     equipment sets from the US. The eleven surge LMSRs, when 
     combined with the currently available (on-hand since the 
     1980s) eight Fast Sealift Ships (FSS) will be adequate to 
     strategically lift the MRS recommended two Army heavy 
     divisions from the US in thirty days.
       b. The MRS recommended the acquisition through purchase off 
     of the open market of 19 Ready Reserve Force (RRF) RO/ROs to 
     bring the RRF RO/RO total to 36 ships. The MRS further 
     recommended that all thirty-six ships be maintained in 
     Reduced Operating Status--4 days (ROS-4) to meet surge 
     sealift requirements, When combined with the eleven surge 
     LMSRs and the eight FSSs the surge requirements--deployment 
     of heavy forces rapidly--determined by the MRS are met. While 
     acquisition of the additional RRF RO/ROs are necessary for 
     surge sealift requirements, the MRS further recommended the 
     modernization of the aging Breakbulk ships that contribute 
     later in a deployment. Additionally, the MRS noted that 
     alternative ship concepts such as Build and Charter, charter, 
     and National Defense Features were possible alternatives for 
     modernizing this slow shipping which follows surge.
       c. The effect of the MRS recommendations provides the 
     Nation with the ability to deploy two million square feet of 
     Army Prepositioned Afloat equipment sets available for combat 
     operations within fifteen days and the ability to surge two 
     Army heavy divisions ready for combat operations within 
     thirty days. The Senate Mark potentially places this surge 
     capability at risk.
                                  ____


                    Information Paper--June 21, 1994

       Subject: Senate Mark of the FY 95 Defense Authorization 
     Bill
       1. Purpose. To provide information regarding the Sealift 
     issues concerning the Senate Mark.
       2. Background. The Senate Mark of the FY 95 Defense 
     Authorization Bill in essence eviscerates the strategic 
     mobility sealift recommendations of the Congressionally-
     mandated Mobility Requirements Study (MRS). Volume I of this 
     study, begun during the Nation's deployment to OPERATION 
     DESERT SHIELD and completed in January 1992, identified our 
     Nation's glaring strategic mobility shortfails. The MRS 
     recommended acquisition of up to 20 Large Medium Speed Roll-
     On/Roll-Off ships (LMSRs) through conversion or construction 
     in US shipyards and 19 additional Ready Reserve Force (RRF) 
     used RO/ROs purchased off the open market (for a total of 36 
     RRF RO/ROs). The LMSRs and RRF RO/ROs together meet the 
     requirement to deploy heavy forces rapidly (surge sealift). 
     The Senate Mark eliminates the planned exercise of contract 
     options to initiate construction of two LMSRs scheduled for 
     FY 95 and places the options for eight more at risk. While 
     this superficially appears to simply delay the LMSR program, 
     the impact of the mark may force the renegotiation of the 
     LMSR contracts and destroys confidence that funding is 
     assured. This sets a precedent for using critical sealift 
     funds as a bill payer for other, not requested projects.
       The Senate Mark also diverts funding for two RRF RO/ROs to 
     subsidize an unproven program that, at best, several years in 
     the future may provide some capability to deliver late 
     arriving materiel. In conjunction with action by the House 
     Merchant Marine and Fisheries Committee which similarly 
     diverts funding from previously authorized and appropriated 
     acquisition of five RRF RO/ROs, the Senate Mark is a major 
     blow to near-term improvement in surge sealift capability. In 
     short, the Senate Mark puts at risk the Nation's capability 
     to meet the timelines to successfully fight one, much less 
     two major regional conflicts.
       3. Primary Impacts.
       a. The mark reduces the number of LMSRs and RRF RO/ROs 
     validated by the Congressionally-mandated MRS. These assets 
     are a critical element of our Nation's power projection 
     strategy. Result: Increased risk of early casualties and loss 
     of key facilities. Loss of deterrence value obtained through 
     perception that US will respond rapidly and with overwhelming 
     capability if challenged.
       b. The MRS recommended eleven LMSRs be added to Military 
     Sealift Command's eight Fast Sealift Ships for surge sealift 
     (the remaining 9 of the 20 being recommended for afloat 
     prepositioning). The recommendation provided this surge 
     sealift to move two heavy Army divisions anywhere within 15 
     sailing days. Because of this mark and its potential risk to 
     the eight follow-on LMSR options (3 or 5 Avondale options and 
     3 or 5 NASSCO options), the Army would not be able to deploy 
     two heavy divisions in the required time. Result: Increased 
     risk of loss of early land dominance.
       c. The MRS also recommended acquisition of 19 RRF RO/ROs. 
     This number will bring the RRF RO/RO fleet total to 36 RRF 
     RO/ROs with all ships in Reduced Operating Status--4 days 
     (ROS-4). These ships surge additional Army equipment to 
     support the first two Army heavy divisions. The USMC is 
     allocated nine of the thirty-six ships for its surge 
     requirements. Not purchasing the remaining seven ships 
     directly impacts both the Army's and the USMC's capacity to 
     reinforce and sustain our deploying forces. Result: Increased 
     risk that forces will not receive necessary support.
       d. The Senate Mark redirected the funds for the purchase of 
     the two FY95 RRF RO/ROs to buy instead a concept known as 
     National Defense Features or NDF. This concept is based on 
     the government paying shipyards to install NDF (e.g. special 
     heavy duty ramps and decks, communications installation kits, 
     etc) on ships they may build in the future for the commercial 
     market. This means that we are not buying RRF RO/RO shipping 
     available today and instead are allocating funds for unbuilt 
     ships for which there is neither a valid requirement or a 
     certified market survey. Additionally, the MRS specifically 
     noted that the alternative concept ships such as NDF were not 
     a replacement for surge shipping but could be capable of 
     replacing RRF shipping required for the middle to late 
     delivery periods. In other words, the Senate Mark diverts 
     funding from today's valid requirement for surge RRF RO/ROs 
     to encouraging ship builders to build ships for which no 
     valid requirement exists today, no commercial market survey 
     supports, and, if built, will not meet the surge RO/RO 
     requirement to deploy Army combat equipment rapidly to the 
     conflict. Result: Increased Risk.
       e. The Increased Risk noted after each paragraph can be 
     directly correlated to increased American casualties. The 
     Mobility Requirements Study's warfighting analysis 
     demonstrated that the quicker US forces arrived in a theater 
     the more successful they were regarding mission 
     accomplishment and lower casualties. This mark guts DoD's 
     ability to respond to threats to our Nation's vital interests 
     in a timely fashion. A decreased ability to project forces 
     results in an invitation to test our Nation's capabilities 
     and resolve. Our ability to successfully deter threats 
     diminishes as well.

  Mr. LOTT. Mr. President, I think it is very important I be heard on 
this amendment. I appreciate the cooperation and the understanding of 
the Senator from California and the Senator from Louisiana of what I 
have been attempting to do here. I do think I need to further clarify 
the record of how we came to this point and the justification for this 
amendment being offered.
  First, I want to talk a little bit about the DOD, Department of 
Defense, authorization bill as a whole. This amendment is a classic 
example of what we are getting into with the defense authorization and 
the defense funding for our country. We find ourselves more and more 
facing very difficult decisions, choosing between one very good, 
justified and needed program or another; one ship or the other; one 
aircraft or another. One after the other, I fear, we are making the 
wrong decisions or we are giving up, in an effort to deal with budget 
restraints, things we need for the future.
  So I think this year we have reached a critical point, where we are 
not adequately funding the defense of our country. It has been 
developing now for several years. I think over the last 5 years we have 
reduced defense funding by about 25 percent. And we have come to the 
point now where we have just squeezed and squeezed until now we are 
affecting personnel, morale, capability, readiness. So I hope my 
colleagues will take a serious look at this overall bill because I 
think we are getting in real serious trouble and it is not going to get 
better. Next year will be tougher, and the next year after that, if we 
continue in the direction we are headed.
  It is tough on the authorization committee and it is very tough on 
the appropriators. That is one of the reasons I think we are going to 
have to look at incrementally funding some of these larger, very badly 
needed programs if we are going to have carriers or LHD's or some of 
the aircraft that we badly need. Trying to get the large amount of 
money that it takes for some of these badly needed ships or aircraft is 
difficult to do in 1 year.
  This ship that everybody says they want at the Pentagon, and more 
important that they need, costs $1.3 billion. Trying to get that in 1 
year is awfully tough. The Appropriations Committee in their wisdom, in 
my judgment, funded the previous LHD, LHD-6, incrementally, in two 
parts. But they got the job done and the ship is being built now. But 
in program after program we are now in very serious trouble.
  I think numbers of troops have been reduced too much. We are making 
decisions with regard to the National Guard that is affecting their 
capability. As we become more and more dependent on the National Guard 
and Reserves, we are at the same time cutting them back.
  On Memorial Day in Kosciusko, MS, I was speaking at one of the 
Memorial Day services. An officer in the National Guard artillery came 
up to me and said, ``We have a problem now because our funds are being 
cut back. They are not cutting as much as they should, maybe, in the 
administration, but we do not have adequate rounds to practice with.'' 
You do not get to be proficient in firing artillery, practicing with a 
tank, if you cannot have an adequate number of artillery rounds to 
fire. That is the point we are coming to.
  In the case of aircraft--talk about sealift; yes, sealift is very 
important. So is airlift. The full Senate voted yesterday on C-17. I 
have mixed emotions about the decision. But what bothers me is will we 
make a decision? We have old aircraft, many of which have been 
grounded, that were worked to death, practically. The C-140's, during 
Desert Storm--they have had to have wing repairs, their engines have 
flamed out. Yet we are still depending on them, and Congress is still 
arguing over the C-17.
  In instance after instance, the Armed Services Committee is wrestling 
with do we try to make the ones we have last a little longer? Do we go 
to some sort of a commercial reconfiguration, to use existing available 
commercial planes? Do we go on with this extremely expensive C-17, 
which has been nothing but a problem from day 1? It is a big, costly 
program and a lot of uncertainty about where we are headed.
  Bombers. The Armed Services Committee, in the subcommittee I serve 
on, has spent a long time talking about bombers. What is going to be 
our capability for a long-range bomber? The administration requested, 
and I assume they are going to get, a significant reduction in B-52's. 
We are still using B-52's. We have the B-1B's that we never have quite 
decided what to do with or what we are going to be able to do in the 
future. We have not done the necessary modifications to really make use 
of them. And then we have the B-2, which we have agreed, I believe, to 
20. But the debate later on this very day will be do we keep that 
program warm? Do we keep the capability to build more B-2's? Or do we 
just go ahead and kill that program?
  The amendment that may be offered is we are going to take that money 
and move it over into the base closure area, of all ridiculous places 
to suggest putting it.
  Again, the question is are we going to have to use the old B-52's? 
Are we really going to modify the B-1B's? Are we going to keep the B-2 
option alive? We do not know, but we are putting good programs, 
people's jobs, and the future of this country and its defense at stake.
  On ships, we have these great battles over do we need more Seawolfs? 
How many carrier groups do we need? How many carriers should we have? 
How many surface ships are we going to have? As a matter of fact, we 
now are down to producing about five or six surface ships for the Navy 
a year. At one point we were building for a 600-ship Navy.
  Then we were told, ``Well, 400.'' Then somebody said, ``I think the 
position now is 330, approximately.'' The truth of the matter is, at 
the rate we are going, at the end of this decade, we will be lucky if 
we have 170 Navy ships. The lines are going right down.
  That is one of the reasons why this ship is so important, the LHD-7. 
Are we going to have the ships to do the job? Check around the world 
now. I can show you a world map of where we have carriers or LHA's or 
LHD's sitting in critical places. We are going to reach the point very 
soon where the call will go out and the planes, the ships, the men and 
women will not be available, will not have the equipment they need, 
will not have the training they need.
  That is where we are.
  With base closure, I have a great deal of sympathy and concern for 
what has happened across this country on base closure in the first two 
rounds. California has been hit so hard. I sat next to the Senator from 
California during the last round. She had a list: ``Oh, my goodness, if 
they do this, it is 5,000 jobs; if they do this, it is 2,000.'' And it 
is just getting whacked away. It is not just California, it is a lot of 
other States.
  Mr. JOHNSTON. Will the Senator yield for a question?
  Mr. LOTT. I will be glad to yield.
  Mr. JOHNSTON. Will the Senator agree with me that the Exon-Grassley 
amendment, which I think takes something like a $500 million bite this 
year, but takes increasingly bigger bites out of the discretionary 
accounts--I think it is a total of around $30 billion over 5 years--is 
hurting defense, really hurting defense and agriculture probably more 
than any others, and that we really ought to take a look at that next 
year?
  Mr. LOTT. As a matter of fact, I share the Senator's concern about 
that. The point was made repeatedly when that issue came up in the 
budget deliberations that it should not have been applicable to 
defense.
  I offered an amendment on that, and the Senator from Virginia offered 
an amendment on that. There was real concern about the impact it would 
have on defense, and there is still great concern about that.
  But at the same time, we have to find ways to deal with the overall 
budget issues. Yesterday, we passed the Treasury, Postal Service 
appropriations bill that was above last year's spending level. You 
would think maybe we could at least hold the spending at perhaps last 
year's level.
  So you can debate what we do on the budget back and forth, but that 
is the problem here. The Senator is right.
  We have been having to make the tough decisions. Discretionary 
spending is being squeezed down. The Appropriations Committee has done 
a great job with limited funds and with restrictions from the Budget 
Committee. I acknowledge that. We know the real driving force in the 
budget deficit is now being caused by entitlements, which the 
appropriators do not have direct control over.
  But however we got there, we are being squeezed down in the defense 
spending for our country.
  It is leading to these types of tough decisions. That is the only 
point I wanted to make. I am worried about that continued development 
because the world has not gone to utopia. Somebody had said on this 
floor last year, ``Oh, have you missed it? The world has changed.'' No, 
I did not miss it. The world is still very dangerous. We do not know 
what is going to be the situation in the future with Russia; we do not 
know what is going to be the situation in North Korea; we do not know 
what is going to happen in Bosnia and Herzegovina. The list is long. So 
we have a real need to have the people and the equipment available we 
should need in case of emergency. It is getting harder and harder to 
fund that.
  That is how we came to the point where we are today.
  There is no question that sealift is very important. We were strapped 
in Desert Storm to be able to get the roll-on/roll-off ships, to get 
the equipment over there. The Senator from Louisiana talked about that, 
and he is absolutely right. We had to rely on a lot of ingenuity by the 
Navy. We had to get into, I am sure, foreign flag ships. We had to call 
out some old mariners to come in and help us do the job. It was a scary 
situation. We do not have that sealift capability today  that we had 
then. We have lost it. It has gone down probably even more. So there is 
a real need for these sealift ships.

  Mr. President, for the last 4 or 5 years, I have aggressively 
supported sealift, fast sealift. I do today. There is no question about 
that. I thought, though, we had an opportunity in the Armed Services 
Committee to get the fast sealift ships with only a short delay and a 
way to get the needed LHD-7. At the time, it looked like a magnificent 
solution to a problem that we all agreed we had --the Navy, the Marine 
Corps, the Joint Chiefs. Everybody would like to have the sealift ships 
and LHD-7, and I will talk more about that in a moment.
  In fact, I think the record will show I was one of the most 
aggressive committee members on the Armed Services Committee in 
supporting sealift. I worked very closely on the subcommittee with 
Senator Kennedy. We continued to provide authorizations for sealift 
going back several years. The sealift account, in fact, was first 
created in the Armed Services Committee under Senator Kennedy's 
leadership as subcommittee chairman, but with a lot of support from all 
of us in the subcommittee and in the full committee.
  Much of the testimony and history in the Armed Services Committee was 
established approving the importance of sealift, and a lot of the 
questions that built that history I had the opportunity to ask. For the 
first 2 or 3 years, I actually was sort of tagged with the moniker 
``Senator Sealift''--you keep talking about sealift--because I very 
aggressively supported it. I was an advocate of sealift before the Army 
became an advocate of it, before the mobility requirement study was 
even started and before we learned the lessons of the gulf war. So I 
want the record to be clear that I feel very strongly about sealift and 
supported putting funds in it when they were not being spent.
  I remember spending a considerable amount of time with the Chairman 
of the Joint Chiefs, Colin Powell, urging that the Sealift Fund Program 
be moved forward, commitments be made. The Senators will remember it 
kind of languished there for about 2 years. They were not sure how to 
move it forward. I remember bending the ear of Secretary of Defense, 
Dick Cheney, saying, ``Make a decision on this program, move it, award 
the contracts.''
  Finally, it did get going, and I want it to keep going. In fact, I 
would like to quote from one of the reports from the Armed Services 
Committee in the fiscal year 1991 authorization bill. On page 18 of the 
report it said:

       Current U.S. capabilities for intervention at a distance 
     where there are few bases and limited infrastructure are not 
     fully suited to U.S. needs. Today, the United States has the 
     greatest force projection capability of any country in the 
     world. However, in general, Army light forces are rapidly 
     deployable but lack sufficient firepower, sustainability and 
     ground mobility. Army heavy forces are too heavy and too slow 
     to deploy and in recent years, Marine Corps forces have 
     allowed their increase in equipment to outstrip their ability 
     already available in the inadequate amphibious lift.
       To meet potential force projection missions, the United 
     States must restructure forces in accordance with the 
     following priorities:
       It must give priority to forces that are inherently mobile 
     and rapidly deployable, maritime based expeditionary forces, 
     long range and technical air forces and light combat forces 
     that can be quickly transported using amphibious lift sealift 
     and airlift assets.

  The point I am trying to make is, as far back as 1991, the 
subcommittee, the full committee and the report emphasized the need for 
this sealift capability.
  I do not want to undermine this part, but I had information from the 
Navy, which Senator Bennett Johnston has referred to, and others, that 
as a matter of fact, the contract option on the two ships for the next 
fiscal year does not expire until December of 1995. This is not 
information I fabricated or intentionally used to mislead the 
committee. This was assurance that I had gotten from the Navy as to 
when that contract option would expire.
  So it looked to me like there was an opportunity to use that $600.8 
million to begin the authorization to incrementally fund in two parts 
this LHD-7, because the LHD-7 contract expires in December 1994, this 
year.
  Based on the information I was given about the sealift contracts, two 
more of the ships could be awarded in August of this year, to Avondale 
and two more would be available next year with a delay of only about 
7\1/2\ months and provide the next two. The funds would be there for 
that and we could use the $600.8 million this year for this contract. 
It seemed like a brilliant stroke, a way to accomplish everything that 
we wanted to accomplish.
  With regard to the LHD-7--talking about priorities--I understand that 
the very top priority of the Navy is the carrier. But there is no 
question that the Pentagon, the Army, the Joint Chiefs feel very 
strongly about the sealift, but they also have testified up and down 
the line that we need LHD-7. Not that they want it, they need it. If we 
are going to have the capabilities we are committed to in the Bottom-Up 
Review, we must have the seventh LHD.

  Let me read you some of the quotes. These are what the leaders 
testified before the Armed Services Committee about LHD-7.
  General Mundy, Commandant of the U.S. Marine Corps, on April 12, 
1994, in testimony to the Senate Armed Services Committee Regional 
Defense Subcommittee: ``12 ARG's are the minimum required.'' In order 
to have these 12 ARG's--Navy terminology, Marine terminology--you must 
have seven LHD's.
  General Hoar, in testimony before the committee, March 3 of this 
year: We need LHD-7 and 12 of the amphibious-ready groups to make sure 
that ``we maintain the naval posture that is the backbone of our 
forward presence.''
  Admiral Owens, Chairman, JROC, testified that 12 of these amphibious-
ready groups ``is the number we should continue to use as our goal.''
  Admiral Kelso, March 1993: ``An additional LHD, the seventh, would be 
required to fully support the 12 ARG goal.''
  And the list goes on with similar quotes from Admiral Arthur, Admiral 
Jeremiah. Everybody agrees that this is something we need in order to 
do the job we are committed to do.
  So that is why I am so committed to the LHD, because we have a time 
problem. December of 1994 the contract option expires. If we let this 
contract option expire and wait until the year 2000 to get this seventh 
LHD that everybody says we need now, it will cost $800 million more. 
That is what is at stake here--$800 million more to get a ship that we 
have the capability to get now and that we need now. We could build two 
other very vitally needed navy ships for what it is going to cost us if 
we wait until the year 2000.
  Now, let me show my colleagues what we are talking about.
  This LHD is an incredible vessel. It can do a lot of what it would 
take a combination of other ships to do. It can do a lot of what a 
carrier will do. When you move an LHD into position off the coast of 
some strife-torn country where we have a national security interest, it 
has an impact. You are talking about 2,000 marines on this vessel--
2,000 marines--with helicopters, 46 large helicopters, I believe is the 
number, and Harrier jump jets. Aircraft can take off of this deck 
simultaneously. You can have aircraft taking off, helicopters taking 
off. It has the air cushion vessel that comes out of the end. You have 
landing craft.
  You can do almost everything with one of these ships. It has a fully 
equipped hospital right at this level. So we are talking about an 
incredible, multipurpose, amphibious warship to take Marines wherever 
the need exists.
  That is what we say we want. That is what everybody says they need. I 
have discussed this particular ship with the Chairman of the Joint 
Chiefs, with the Vice Chairman, Chief of the Navy, Commandant, 
Secretary of the Navy, right down the line. They all say, yes; it is 
just a question of where do we get the funds. That is what I have been 
working on. I worked on it at the subcommittee level and at the full 
committee level. I came up with an idea based on information I was 
given by the Navy, and I realize that has presented problems. But I 
will continue at this very moment to work with any and all Members of 
the Senate and the Pentagon to try to find a way to fund this ship 
because we do need it; it is an incredible ship.
  Now, what is the alternative?
  We need the fast sealift ships, and this is just a conceptual version 
of the ship because we do not have it yet. It is under contract, and it 
is moving forward. But you are talking about basically a cargo carrier. 
We need them; I do not deny that. But by delaying two of these, which 
are not going to fire a shot, you get one of these, a very incredible 
marine vessel--a pretty good tradeoff. Now, if you do not have this 
vessel show up at the critical time, you are never going to have a need 
for this one.
  Mr. JOHNSTON. Will the Senator yield at that point?
  Mr. LOTT. I will be glad to yield.
  Mr. JOHNSTON. The Senator said by delaying the two--he calls them 
cargo ships--fast sealift ships, you are getting one of the big ones. 
Actually, you get about 40 percent of the big one and you still owe 
about 60 percent or another $800 million after you spend this $600 
million; is that not correct?
  Mr. LOTT. That is correct. Incrementally funded, $600 million this 
year and then about $700 million in the second year. But the other side 
of it is, if we do not get this vessel now, we may never get it. That 
is a very important point that I think we have to think about and worry 
about. It is like an aircraft; the same is true with ships. You lose 
the capability, you may have lost it. It takes time certainly to get it 
back in place.
  I wish to emphasize again the last one of these that was funded, it 
was incrementally funded, in the wisdom of the Appropriations 
Committee, in two pieces. That is all we are trying to do here, do it 
in two pieces. But the fact remains that for the price of those two 
fast sealift ships, you do get 40 percent of one of these.
  Again, I emphasize, I acknowledge that the problem is, with this 
budget restraint we have, the cost of a large vessel like this. It is 
tough to do. But I just wanted to show you what was involved here, the 
ships we are talking about, and give you some concept of what we are 
talking about. I emphasize again that I support sealift. I want those 
ships built. I think we are going to need them. I think they are an 
important part of our military capability in the future. But I also 
know we need LHD-7 now, and the time is running out. The time is very 
short.
  So I have worked diligently with every member of the committee and 
many Members of the Senate who have spoken today or will speak to try 
to find some other way to do it, and I am here today looking for 
another option, another source of funds, some way to accomplish this.
  I have talked to the chairman of the Armed Services Committee 
repeatedly. He is familiar with the problem. He is sympathetic to the 
problem. But he says, as has always been the case, he is opposed to 
incremental funding. It is not this one. He has been consistently over 
the years. I acknowledge that. But I am here now acknowledging that we 
were given incorrect information by the Navy as to when the contract 
option on the sealift expired.
  I state emphatically that I want sealift ships to move forward but 
urge my colleagues to think about the needs that we are giving up and 
urge that consideration and assistance be given to me and to us for the 
country's sake to find a way, some way, to keep the LHD program alive, 
some way to authorize it so that the appropriators will have the 
opportunity to look for a way to fund this program. They have proven in 
the past that they are ingenious in dealing with it. We do not know 
what the funding level is going to be for planes and ships and tanks 
and everything else. The appropriators may have a completely different 
mix by the time they get to their final choice. So I am trying to find 
a way to do here in the full Senate as I did in the Armed Services 
Committee, to keep that option available.
  So I will yield at this point, but I do want to continue to work with 
my colleagues on the committees that are involved--and my colleague 
from Mississippi is very much involved--in trying to find a solution 
here, and we will be looking for that as the day goes forward.
  I yield the floor at this point, Mr. President.
  Mr. NUNN. Mr. President, I do not want to hold out false hope here 
about this ship this year, but I also want to add just the realistic 
picture of where we are now on this ship. That is that the House Armed 
Services Committee has some money in their bill for this ship. I 
believe it is $50 million. I believe it is $50 million. I am not sure 
whether it is $50 or $100 million. It is probably in the nature of 
long-lead item. They are incrementally I suppose funding this ship.

  We normally have opposed that in conference. But it is a live issue 
in conference. At least by the time we get through conference, the 
appropriators, if they are going to find this kind of money--and I am 
sure the other Senator from Mississippi will be there diligently 
searching, and we would certainly be notified of that. But on this 
issue, if you were to move to this vote today, if this money were taken 
out today, it would be like a lot of other things in Washington. It 
would not be a concluded issue.
  I will not make any pledges about where I would be on it. But I would 
certainly say it would be a live issue, and that we would certainly 
not--and we never have had--have a closed mind in conference when we go 
to conference, or we could not complete a bill.
  We certainly always listen to our appropriators, particularly if they 
can come up with a bag of money. Sometimes the appropriators are good 
at doing that. We always have to look at where that bag of money comes 
from. There are two questions when you are dealing with these matters, 
whether it is our committee or the Appropriations Committee; that is, 
where is the bag of money they come up with going? And the other is 
where does it come from?
  I think Senators find very quickly if the bag of money comes from a 
matter that is of concern to the Senator from California or the Senator 
from Louisiana, then we hear from them. If it is a bag of money which 
comes from someone else, there may be a more delayed reaction time than 
the alert colleagues from California and Louisiana. Nevertheless, at 
some point we hear from them. And the truth of it is that this defense 
bill and this budget has gotten not only tight, but it is underfunded 
in both the President's budget, and increasingly the Congress is 
cutting below the President's budget.
  I would like just to make a few comments and particularly describe 
where the committee is on this now.
  Mr. LOTT. Mr. President, will the distinguished chairman yield?
  Mr. NUNN. Yes. I am happy to yield.
  Mr. LOTT. I appreciate the chairman's comments, and I want to say 
here on the floor that I appreciate his consideration and his 
cooperation in the full committee.
  The vote of 14 to 6 would never have occurred if the chairman had 
really put his foot down. He made it very clear that he is opposed to 
incremental funding. But he also, at the time, indicated that he 
thought that this was a way at least to keep it alive and consider it.
  While always making very clear his reservations, the fact is that 
this was not in the President's budget request, and finding a way to 
fund it was very difficult. But he, as the chairman, certainly made it 
clear that he has a high regard for this vessel, recognized its need, 
but just cannot see how we can find the authorization funds at that 
point, as he said.
  I appreciate his consideration.
  Mr. NUNN. The Senator described my position very accurately. I 
appreciate that. I will have more to say about the ship itself in 
remarks that will be made.
  I will say to my friends from Mississippi, while they are both on the 
floor, that there is probably not a single member of our committee that 
at one time or another has not used the argument--I do not remember the 
last time I used it. I certainly do not want to pretend I have not 
because I probably have. There are certain options going to expire, and 
if we do not do something quickly about that option the U.S. Government 
will forever lose that possibility. Usually the people who are pushing 
that behind the scenes are the people who have granted the option; that 
is, the contractors. The Government itself is perfectly willing to 
extend the option if the contractor is. So, really, all the contractor 
has to do is to extend an option.
  Frankly, that applies to either side of this argument. Simply say to 
the Government that they will extend the option for another 6 months, 
and then you have that right to buy that ship.
  Now, I understand the contractor's point of view. They have to get 
certain subcontracts lined up. They have certain costs that are 
involved. There is some inflation. There are those kind of 
considerations. But it is really not like you are forfeiting forever 
the opportunity to buy a vessel when an option comes close to expiring, 
because the contractor is the one who can extend that option if they 
choose to.
  So I say that is another possibility.
  Mr. President, let me just comment on a little background here 
because we have seen certain letters from the chairman of the Joint 
Chiefs and others justifiably from their perspective and being alarmed 
about the committee's action. I did not vote with the majority of the 
committee. But I do think that the majority of the committee proceeded 
in good faith. And I think they need a little defense against some of 
the charges and criticism that have been leveled.

  I do not think anyone should be under the impression that the 
committee's action, the majority of the committee action, represents a 
position against sealift capability. The committee has approved over 
$2.8 billion in funding in the past several years. It was our 
committee, as well as the House side, that basically helped lead the 
way in sealift.
  The appropriators in our committee, and basically Congress, led the 
way here. It was not the Department of Defense that led the way in the 
sealift. It was the Congress of the United States. So the committee has 
clearly seen and supports the need for sealift.
  I want to emphasize that our committee, as well as the appropriations 
committee, got out in front of this issue several years before the 
Department of Defense or the Joint Chiefs or the Navy or the Army saw 
the need. We basically had provided for strategic sealift for 3 fiscal 
years before the Department of Defense was willing to recognize that it 
was a shortfall and include it in their own budget. Senator Kennedy, 
chairman of the subcommittee, and Senator Lott as the ranking member, 
have been real leaders in the overall push for sealift.
  So sometimes it might be good if someone over in the Department of 
Defense writing those letters and submitting them might relate a little 
of history before they go wandering off to sort of consider them in 
statements that at least are not very informative about how these 
programs got started.
  I believe the committee's action to provide two additional ships is 
enhancement to the Marine Corps maritime prepositioning of ship force--
so-called MPS enhancement--is another case where the Congress will be 
ahead. I believe in General Shalikashvili's letter he emphasizes that 
we shift funds out of strategic sealift for both the vessel that the 
Senator from Mississippi is pushing, amphibious, and also MPS, and that 
simply is not true. That money for the MPS we found in other places: 
$200 million. It was strictly a shift of $600 million here between 
these two vessels.
  So I find myself, Mr. President, in a position I am not in very much; 
that is, I am not in the position very often of disagreeing with the 
committee position. But in this case, I am not speaking for the 
majority of the committee, I am speaking only individually. I find that 
the amendment of the Senator from Louisiana and the Senator from 
California really has merit, and should be passed. I am aware about the 
misunderstanding the committee had in providing funds. I think that 
misunderstanding was regrettable. I do not think it was intentional on 
the part of anyone. The Navy simply gave wrong information, and 
erroneous information about when those options expire on the vessels 
that were taken out of the two sealift vessels, that were taken out in 
order to pay for this amphibious LHD-7.
  I believe it was an honest mistake. But I do believe that there is an 
issue here that the Senator from Mississippi has already alluded to, 
that the Senate itself needs to focus on as they struggle with this 
issue. I hope we will all understand that, and that is the incremental 
funding issue.
  I want to clearly indicate that I favor going forward with this ship. 
I hope we can find a way to do it. I hope we can find a way to do it 
responsibly. This class of amphibious ship carries helicopters, a large 
hospital, landing craft, and other items critical to supporting the 
Marine Corps in combat or in peacekeeping operations. It can operate 
independently of carrier battle groups. It can almost be an autonomous 
type of capability in certain parts of the world depending on the 
threat. So we need this LHD-7 to provide the needed 12 amphibious ready 
groups.
  The committee has been concerned about amphibious for a period of 
time. We are working with the Navy to ensure that this program retains 
the required 2.5 marine expedition brigade lift capability. We are 
doing that to the extent that we have actually blocked the transfer of 
certain older amphibious vessels--at least temporarily that were going 
to go to other countries and were being declared surplus--until we can 
determine how the Navy is going to compensate for that lack of 
capability even though they are older vessels. So we have been very 
concerned about that.
  I want to say in closing my remarks why I am opposed to incremental 
funding.
  Incremental funding is basically getting started on a ship when you 
do not have the money to pay for it in that particular year. The reason 
that is so dangerous in the case of naval vessels is because you can 
take $50 million or $100 million and start the vessel, and in the next 
year, and the year after, and the year after, you have to pay for it. 
We can conceivably start probably 20 or 30 new Navy ships, and there 
would be supporters right here for doing that. We could take several 
hundred million dollars and get started on enough ships so that, 
basically, we would eat up the whole Navy budget within 2 or 3 years. 
Then somebody would say: What in the world were you doing back there? 
Why did you do this?
  Everybody views their ship as unique, and the one they are interested 
in as unique. The military services do, also. But for the last several 
years, since I have been chairman of this committee, I have opposed 
incremental funding. Sometimes it is done by appropriators, but I do 
not recall when we have done it in our committee, under my 
chairmanship. The House committee has started down that road this year 
on this particular vessel, because they have money in their budget for 
incremental funding, for beginning it, but not paying for it.
  The reason I opposed this particular amendment in committee is 
because the two ships that the Senator from Louisiana and the Senator 
from California are talking about--the sealift vessels are fully paid 
for; $600 million pays for those two ships. On this amphibious ship, 
that same $600 million that was shifted to pay for that in the 
committee bill pays for only 40 percent of that vessel. That means in 
the next year, and the year after, we are going to have a price tag 
that is going to be coming due, and no matter what we may think of the 
priorities, we will be $400 million into this vessel. And at that 
stage, it becomes almost impossible to stop.
  I have had people favoring aircraft carriers in the last 2 years 
asking that we start with $100 million to build an aircraft carrier. My 
answer has been that we on the committees dealing with defense can find 
the money to pay for it, but we cannot afford to start it. We have 
plagued the budget with entitlement programs that people feel they are 
entitled to by law, and discretionary money goes down, down, down every 
year. This week or next week will tell us how difficult it is to deal 
with anyone's entitlements. Anybody who has an entitlement feels that 
it is basically in the U.S. Constitution. It is not, but that is the 
way they view it, as part of the Bill of Rights.
  We do not want to get into that situation in shipbuilding. I am not 
saying we do not do it in other areas. We have done it in the 
intelligence area. We have the intelligence budget that has had so much 
incremental funding that the hardware and the bills we are having to 
pay to meet past decisions eats up a huge portion of the intelligence 
budget. It can happen in the space station and in the super collider. 
Those are the kinds of things that sound good when you are under urgent 
pressures but come back to haunt not only the Congress but also the 
Department of Defense budget.
  Incremental funding removes the discipline to properly fund programs 
and consider the full cost in tight budget environments. Incremental 
funding prevents us from basically being able to stop something once we 
have started it. Nobody is going to want to stop a ship we have spent 
$400 million on, even though a year from now we may find some other 
priority that is much higher. It violates the principle and central 
premise of good management. I think full funding, particularly on naval 
vessels--because they are so large and the cost is so much and you can 
get started with such a small amount of money in the first year--more 
than probably any other category, is a valid management principle in 
naval vessels.
  If we do not have some principle of full funding, what you do is give 
the services incentive to basically get a foot in the door on 
everything. Believe me, there are people in the military services that 
would love to start whatever program they are in favor of with 
incremental funding. And you also give them incentive not to come up 
with a correct cost estimate, because they probably will not even be 
around by the time the bills become due.
  Incremental funding also keeps programs alive and contentious year 
after year. Most of all, it locks the Congress and the defense budget 
into commitments made in previous years.
  So I think we should not start down this slippery slope of 
incremental funding on naval vessels. It is interesting that the first 
lecture I ever got on this subject was from a Senator from Mississippi 
by the name of John Stennis, who believed very deeply that if we 
started breaching that principle, we were going to regret it. I think 
that is absolutely correct.
  So, Mr. President, I urge support of the Johnston-Feinstein 
amendment. I do so with every intent to work with both Senators from 
Mississippi in trying to find a way to make sure we keep this program 
going. I do not hold out hope that it can be done easily, or this year, 
but I would not foreclose any option as long as it sticks with the 
basic principle of trying to find a responsible way to fund the vessel.
  Mr. President, in this case, not speaking for the committee, only 
individually, I urge adoption of the Johnston-Feinstein amendment.
  Mr. INOUYE. Mr. President, the amendment proposed by the Senators 
from California and Louisiana presents to the Senate a most difficult 
choice. The Senators are asking us to undo an action taken by the Armed 
Services Committee. They seek to restore $608 million in funding 
requested by the President for the sealift fund and eliminate the same 
amount which the committee proposes to use to fund a portion of the 
amphibious assault ship requested by the Marine Corps, the LHD-7.
  As chairman of the Defense Appropriations Committee, sensing that we 
may have to face this soon, I have given this matter very careful 
deliberation, and I have decided to support this amendment. I urge my 
colleagues to join with me. Allow me to explain my reasoning and to 
underscore my conclusion.
  Mr. President, this issue juxtaposes the interests of the Marines to 
the interests of the Army. The smaller post-cold-war Army is 
increasingly dependent on improving its sealift capacity, while the 
Marines are trying to ensure that they will have 12 large-deck 
amphibious assault ships.
  Mr. President, I have to point out to my colleagues that this is the 
type of choice that both the Armed Services Committee and the Defense 
Appropriations Subcommittee are facing and will face again and again--
two worthy programs, two requirements which should be filled. However, 
the fiscal constraints require us to choose between them.
  So let us consider the merits of each case. First, the LHD-7. The 
Marine Corps argues that it needs 12 large-deck amphibious assault 
ships to project power for two major regional contingencies. The corps 
points out that eventually some of its aging LHA ships will need to be 
replaced and that the LHD is the only ship class capable of meeting 
this requirement. The Marine Corps points to the Bottom-Up Review, 
which decided to increase the size of the Marine Corps--above the base 
force plan--as a sign that the Defense Department has ratified its 
force structure.
  Furthermore, the Marines argue that if Congress fails to appropriate 
sufficient funds to purchase the LHD-7 this year, the Government will 
lose a price contract option. Under the Navy's plan, the LHD-7 would 
not be funded until the year 2000. The Marines and Navy both agree that 
the cost of waiting until then to purchase the ship will drive the cost 
up substantially, perhaps as much as 33 percent.
  Last year, at the initiative of the Appropriations Committee, the 
Congress appropriated $50 million to initiate advanced funding for the 
LHD-7. The conferees of the defense appropriations bill noted that they 
expected the Navy to request funds in fiscal year 1995 for the balance 
of the ship before the Navy obligated the $50 million appropriated.
  However, instead of requesting the additional funds, the Navy sought 
to rescind $50 million from this appropriations, and, Mr. President, as 
you know, we denied that request.
  The Defense Department reviewed this issue in its fiscal year 1995 
budget and determined that it could not afford to purchase the LHD-7 in 
fiscal year 1995. It argues that 11 large deck carriers fulfill 96 
percent of the forward presence requirements of the Navy and Marine 
Corps. It also notes that the first LHA ship will not need to be 
retired until the year 2011, and therefore the Department recommends 
that the Navy and Marines wait until the turn of the century to build 
the LHD-7.
  Mr. President, on sealift, I believe there is not much disagreement. 
If Desert Storm proved one point, it was that sealift is essential for 
U.S. forces. The only equipment that reached the theater in any sizable 
amount in the early days of the crisis was from equipment prepositioned 
on ships. It took 4 months to move all the remaining equipment needed 
into theater, primarily because there was insufficient sealift to 
respond more quickly. We were lucky, very lucky, that we had time to 
respond. But we also learned that the next time we might not be so 
lucky and we need to improve our sealift capability and we need to do 
it now.
  Mr. President, it is ironic that Congress, before Desert Shield, had 
already recognized the problem and had created a sealift program to 
bolster our capability. I might add this congressional initiative, 
which the media would probably refer to as pork barrel, was designed to 
redress the growing shortfall and our program was initially opposed by 
DOD. However, after Desert Storm, DOD recognized the need and the 
Defense Department has embraced the program since that time.
  The fiscal year 1995 budget requests $608.6 million to continue the 
sealift program. Of this amount $546.4 million is to acquire additional 
sealift ships. I must say that I believe this is one of the most 
critical needs of all of DOD.
  Why then did the Armed Services Committee delete the funds for the 
program? In fairness to the proponents of the LHD and those members in 
the committee who voted to cut sealift and add funds for the LHD, may I 
respectfully suggest that it appears that they were misinformed.
  Sources within the Navy had misinterpreted the contractual 
requirements for the Navy sealift program. They believed that the 
contract options for the next sealift ships could be delayed until 
December 1995. Had that been the case, the Navy could have used fiscal 
year 1996 funds to award that contract and could have used the 1995 
funds for other purposes--in this case, the incremental payment for the 
LHD-7. After the committee action, the Congress was informed that the 
initial information was incorrect. The contract options on the sealift 
ships cannot be delayed until December 1995. A new contract would be 
required if funds were delayed until 1996, with higher costs most 
likely.
  More importantly, the delayed award would mean a longer time until 
the needed ships became available. Mr. President, most respectfully, we 
cannot afford to wait. We need to press on with sealift now.
  Mr. President, I realize this is a tough choice to make between 
meeting the goal of the Marines or the need of the Army. If additional 
funds were available, I believe the Department would like to do both. 
Unfortunately, that is not the case. We are functioning under strict 
fiscal constraints and additional funds are not available.
  I concur completely with my friend from Mississippi when he says that 
we have cut too deeply and too fast. Having served in the great war 50 
years ago, and having seen my Nation's Armed Forces dwindle down to 
almost nothing before June 25, 1950, when we had to send men into Korea 
untrained and unequipped and then suffering 10,000 casualties that were 
not necessary, I do not wish to see a repeat. But we are faced at this 
moment with decisionmaking time.
  I must add one other technical concern that I have with the 
committee's position. As the Senator from Louisiana and the Senator 
from California have pointed out, the $600 million that has been set 
aside for the LHD is not sufficient for the Navy to award a contract 
for that ship. As everyone agrees, the LHD-7 is expected to cost about 
$1.3 billion or $1.4 billion. The committee position argues that we 
could fund the ship incrementally. As the chairman of the Armed 
Services Committee stated, I too would like to state that I oppose this 
incremental payment plan. The Congress has steadfastly argued that 
ships, because of their high cost and limited total numbers purchased, 
should be fully funded.
  Yes, Congress did on one other occasion in the recent past allow for 
incremental financing to be used, but it was only with the 
understanding that the Navy would fully fund the balance of the ship in 
the next year.
  Mr. President, we know that DOD does not plan to budget for the 
balance of the ship next year. The 1996 budget is already underfunded 
by $6 billion. This committee recommendation will only worsen that 
situation.
  The Navy cannot award a contract for the ship unless it has the full 
$1.3 billion or $1.4 billion, or sufficient funds to cover its 
termination costs. The Navy would have to demonstrate that it intends 
to fund the ship before it proceeds with obligating the funds. Since it 
is very unlikely to do so, these funds could not be used.
  Mr. President, as I said at the outset, this is a most difficult 
choice for us, but I believe the evidence lies in favor of supporting 
sealift and delaying the LHD for another time.
  If I may at this juncture, as chairman of the Defense Appropriations 
Subcommittee, I will do my best, as I have done in the past, to look 
for sufficient funds at least for long lead time, and I can assure my 
colleagues and my beloved colleagues from Mississippi that the LLD will 
not be forgotten. This is the word that I give to my good friends. But 
at this juncture in this debate, I would have to urge my colleagues to 
support the amendment submitted by my dear friend from California and 
my colleague from Louisiana.
  The PRESIDING OFFICER (Mr. Mathews). The Senator from Alaska.
  Mr. STEVENS. Mr. President, I have come to the same conclusion as the 
Senator from Hawaii has. On the other hand, I support overwhelmingly 
the LHD-7.
  I thought about this last evening, and I am here to suggest to the 
Senate that there is a way to do both. We do need to make certain we do 
not lose the fast sealift that is under contract now. It is absolutely 
essential to our defense, but we also need to find the money to assure 
that this LHD-7, which we provided long lead time money for, does meet 
its construction schedule.
  I think the money is there. I am glad to see that the chairman of the 
committee is here. He is my good friend. He may disagree with me. But I 
think we need to make a structural change in an authorization bill to 
at least just literally take the money that is necessary from another 
area and commit it now to the LHD-7. As the Senator from Hawaii said, 
we can achieve that.

  The area that I would take the money from is the area of the FFRDC 
activities. Those have already been reduced slightly by the Armed 
Services Committee, but I propose that they be reduced by 10 percent 
more, really. I propose a total reduction in the FFRDC in the level of 
about 19 percent. It would take $250 million from the $1.3 billion 
requested for these federally funded research and development centers.
  I know that there will be a large scream heard around the world when 
I suggest that. But I believe that we are dealing with industrial base 
here as well as we do when we deal with things like the Seawolf. This 
LHD-7 is part of the national shipbuilding industrial base, and we need 
to send a signal that it will be continued, too. I think we can send 
that by reducing the amount that is committed to the federally funded 
research and development centers.
  Those centers have played an interesting and valuable role during the 
period of the buildup of our forces and during the period of the 
expansion of our industrial base. Now that we have reduced our 
industrial base--as a matter of fact, we are reducing it too fast in 
many places--we do not have the luxury of continuing the federally 
funded research and development centers at the level proposed in the 
bill.
  I am not critical of the Armed Services Committee--as a matter of 
fact, they are below the budget request--nor am I critical of the 
administration for requesting that amount. But there is no question now 
that we can reduce the amount that is committed to these federally 
funded research and development centers.
  We had a period of time when our procurement reached a peak really, 
in about 1987, for defense of about $120 billion. Now we are going to 
be spending about $44 billion in procurement in 1995. That is a 60-
percent cut over an 8-year period.
  The federally funded research and development centers have had a very 
slight cut compared to the amount we are committing for procurement. 
From my point of view, I think we need to find a way to reduce these 
amounts.
  I am going to have another amendment later to deal with the FFRDC's 
in terms of the compensation. I might say, I call attention of the 
Senate to a recent report in Science and Government, an independent 
publication that lists the salaries paid by these FFRDC's to the people 
who are working in terms of this type of analysis. Most of them are, in 
fact, retired from either the defense industry or from Government in 
general or from other industries. They are senior people who have a 
great deal to add to the review of our defense concept. But there is no 
reason for the kind of compensation that is being involved in those 
activities, particularly for people who I believe already are very 
adequately compensated in terms of their retirement years.
  But that is just a sideline to this. What I am really saying to the 
Senate is, why should we argue, those of us who believe in a strong 
defense, why should we argue over whether we complete the contracts on 
the fast sealift or whether we put money to the LHD-7? We need both. I 
do not think there is anyone that has really reviewed the defense 
structure who would say we do not need both.
  The LHD-7, I understand, has an initial operating capacity at about 
1999 or 2000. The amendment I suggest will adequately fund that, 
because it would be structural, it would be taking out of the budget 
from now until that time about $1.2 billion to $1.3 billion. It would 
announce right now that we are not going to exceed that level during 
the coming period for FFRDC's.
  Again, I say to the Senate to consider this. I do not know whether to 
offer this amendment right now or let the people react to it. But it 
does seem to me that, when we have reduced procurement by 60 percent, 
we should not be continuing at the 90 percent level of paying people to 
review the procurement policies. It is to me wrong to commit that kind 
of money. I think it is time now for us to make the decision that we 
should take money from these review organizations and from the think 
tanks and put it into steel, put it where it will be needed to aid our 
country in terms of our new concepts of trying to have the ability to 
have a mobile force, mobile but more modern, and I think LHD-7 is 
essential to that.
  I do agree with the chairman of the committee, we cannot afford to 
cancel this fast sealift contract. My hope is we actually work this out 
before we are through and have an amendment that not only commits 
ourselves to the fast sealift, which is the intent, as I understand it, 
of the pending amendment, but commits ourselves equally to the LHD-7 
and funds it now.
  We can fund it now. There is no question that the money would be 
there if we just take the actions necessary to reduce another portion 
of this budget proportionally--not even proportionally; it would be 
one-third of the amount that the procurement has been reduced.
  I believe that the FFRDC account is an excessive amount, and I am 
hopeful the Senate will consider reducing that and committing that to 
the LHD-7 and the fast sealift according to the current contract. We 
can do both within the budget, within the amount recommended by the 
committee and within the ceiling established by the President's budget 
and not be inconsistent with the Bottom-Up Review. It is something that 
could be done right here and now. We really do not need to argue as to 
which system should go forward now. We need both.
  Mr. COCHRAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. COCHRAN. Mr. President, let me first thank my distinguished 
colleague from Alaska for his strong argument in favor of moving 
forward with both of these programs. It is consistent with the findings 
of the Armed Services Committee in their report. It is consistent with 
the strong arguments that have been made earlier today by my State 
colleague Senator Lott, who points out the reason why the issue was 
raised in the first place in the authorization committee.
  I want to just read a portion of the committee report to confirm the 
fact that this committee has reviewed these programs and has come down 
strongly in favor of both of them. It starts out by discussing the fact 
that in written reports and testimony before their committee--Senator 
Lott talked about questions and answers he elicited from various 
witnesses who appeared before the committee on this subject--that the 
Navy has indicated it is immensely important to the fulfillment of 
commitments and to the Navy's future that this LHD-7 be built. There is 
an option to build the ship that is available now, and it must be 
exercised by the end of December of this year.
  I am going to read now from page 34 of the committee report:

       In written reports and testimony at committee hearings, a 
     series of senior military leaders, including the Vice 
     Chairman of the Joint Chiefs of Staff, the Commander-in-Chief 
     of the U.S. Central Command, the Chief of Naval Operations, 
     and the Commandant of the Marine Corps, have confirmed the 
     strong military requirement for LHD-7 as the anchor for a 
     twelfth amphibious ready group.

  Now, even though the chairman of the committee, in his statements 
about this amendment, has indicated some reluctance to try to go 
forward with both programs at this time under the funding constraints, 
the committee which he chairs has come down very strongly in favor of 
doing just that.
  It further provides on the same page:

       Assuming appropriations of the necessary funds, the 
     committee authorizes LHD-7 with the understanding that the 
     Navy will exercise its contract option for LHD-7 before the 
     option expires, and include the residual increment of funding 
     for the ship in its fiscal year 1996 budget.

  The Senate should support that. That is a clear, unequivocal 
commitment. And based on the evidence before the committee, through its 
hearings and through discussion and markup, this is what the committee 
decided.
  They have come to the floor with this bill and with this report, and 
now, if what I am hearing is correct--and maybe I misunderstood some 
statements--they are backing away from it.
  They are backing away from the commitment that is spelled out in as 
unambiguous a statement as I have ever read in any committee report 
before this Senate. Let us help the authorization committee fulfill its 
commitment and its desires as expressed in its report and in its bill.
  I am quick to add that I am just as supportive of the sealift program 
as any Senator in this Senate. At every opportunity since I have been 
on the Defense Appropriations Subcommittee, I have questioned witnesses 
before our subcommittee about that program, have urged that additional 
funds be made available for that program, and have in every way 
possible supported full funding of the effort to do what we have to do 
to be able to transport men, materiel, and equipment to places where 
our military should be when our national security interests are 
threatened.
  So there is no question about needing the sealift money, the $600 
million. We thought it would not be needed this year. Senator Lott 
spelled out in his remarks why that suggestion for deferment of the 
exercise of options should be put into next year's bill--because the 
Navy said that the option did not expire until next year. Now we find 
out the Navy misspoke or they were mistaken in that assumption.
  Let me just simply add my concerns to those expressed by Senator 
Stevens. There has to be a way to do this, and that is the point here. 
Whether we agree to accept this amendment or accept it in some modified 
form is really beside the point. The point is, we need to proceed with 
both programs, and we need to figure out a way to do that. And before 
we vote on this amendment, we need to reach that agreement.
  We have other things happening right now. For example, the 
Appropriations Committee is meeting in full committee to mark up the 
appropriations bills--for the Department of Agriculture, for the 
Department of Energy, for the Corps of Engineers--for next year. I need 
to be at that meeting, so I am going to leave the floor for a little 
while. But I certainly hope the Senate will not act on this amendment 
until we ``come reason together,'' as a former majority leader of the 
Senate would say, and decide how we are going to proceed to build both 
LHD-7 and the sealift ships that are provided for in this bill.
  Mr. LOTT. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MITCHELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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