Overseas Presence: More Data and Analysis Needed to Determine Whether
Cost-Effective Alternatives Exist (Chapter Report, 06/03/97,
GAO/NSIAD-97-133).

GAO provided information on the Department of Defense's (DOD)
approaches to providing U.S. overseas military presence, focusing on:
(1) changes in these approaches since the end of the Cold War; (2)
funding related to presence; (3) views of regional command officials on
the relative importance of security objectives and presence approaches
in their regions; and (4) DOD's process for determining presence
requirements and alternatives for meeting them.

GAO noted that: (1) in response to changes in the security environment
since the end of the Cold War, U.S. presence has changed significantly
in different regions of the world; (2) for example, as a result of force
reductions since 1988, fewer military forces are located overseas to
provide presence; (3) also, because of these overseas force reductions
and the changing security environment, DOD has restructured land-based
prepositioned equipment and is maintaining more prepositioned equipment
afloat; (4) the funding for presence approaches can be significant and
varies widely by approach, ranging from millions to billions of dollars;
(5) DOD requires the largest amount of funds to maintain the forces that
provide presence; (6) officials from regional commands view all national
security objectives and presence approaches to be important, but differ
on their relative importance; (7) U.S. Atlantic Command and U.S. Central
Command officials view initial crises response and deterrence as the
most important objectives, while U.S. European Command officials cite
deterrence; (8) U.S. Pacific Command officials believe all four
objectives are equally important; (9) U.S. Southern Command officials
cite reassurance and influence as the most important objectives; (10)
these officials also differ on the approaches they consider most
important to meeting these objectives; (11) some prefer using various
types of forces, while others preferred military interaction activities;
(12) in prioritizing objectives and approaches, command officials
considered a number of factors, including the threats and the
availability of forward-based U.S. forces in their respective region;
(13) DOD does not have a specific process for determining Commander in
Chief (CINC) presence requirements; (14) most of the forces used to
provide an overseas presence are also needed to meet warfighting needs,
diplomatic commitments, and other purposes; (15) DOD generally allocates
forces to the CINCs based on these requirements, rather than on
presence; (16) currently, DOD does not compile comprehensive information
on all CINC presence approaches nor does it completely analyze the
effectiveness of these approaches or whether more cost-effective
alternatives might exist; and (17) DOD and CINC efforts to develop
planning processes related to presence, if expanded, would provide an
opportunity for DOD to better assess presence requirements and approach*

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-97-133
     TITLE:  Overseas Presence: More Data and Analysis Needed to 
             Determine Whether Cost-Effective Alternatives Exist
      DATE:  06/03/97
   SUBJECT:  Armed forces abroad
             Strategic forces
             Defense capabilities
             Defense contingency planning
             Military policies
             International relations
             Cost effectiveness analysis
             Foreign military assistance
             Defense appropriations
IDENTIFIER:  DOD Bottom-Up Review
             JCS National Military Strategy
             NATO Partnership for Peace Program
             International Military Education and Training Program
             
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Cover
================================================================ COVER


Report to Congressional Committees

June 1997

OVERSEAS PRESENCE - MORE DATA AND
ANALYSIS NEEDED TO DETERMINE
WHETHER COST-EFFECTIVE
ALTERNATIVES EXIST

GAO/NSIAD-97-133

Overseas Presence

(701076)


Abbreviations
=============================================================== ABBREV

  ACOM - U.S.  Atlantic Command
  CENTCOM - U.S.  Central Command
  CINC - Commander in Chief
  DOD - Department of Defense
  EUCOM - U.S.  European Command
  PACOM - U.S.  Pacific Command
  SOUTHCOM - U.S.  Southern Command

Letter
=============================================================== LETTER


B-272597

June 3, 1997

Congressional Committees

Overseas military presence is an important aspect of U.S.  national
security and military strategy and is accomplished through various
approaches, including forward-based and deployed forces,
prepositioning of equipment, exercises, military interaction, and
foreign military assistance.  This report discusses (1) changes in
these approaches since the end of the Cold War, (2) funding related
to presence, (3) views of regional command officials on the relative
importance of security objectives and presence approaches in their
regions, and (4) the Department of Defense's process for determining
presence requirements and alternatives for meeting them.  This report
recommends that the Secretary of Defense compile and analyze
information on presence requirements in a manner that would allow
assessments of whether more cost-effective alternatives to achieve
presence exist. 

We believe that our recommendation, if implemented, would improve the
Department's ability to evaluate and assign the appropriate level and
mix of forces and activities necessary to achieve overseas presence
in support of national security objectives.  We conducted this review
under our basic legislative responsibilities and are addressing this
report to you because of your oversight responsibility for defense,
budget, and international issues and your interest in this important
subject. 

We are providing copies of this report to the Secretaries of Defense,
State, the Air Force, the Army, and the Navy; the Commandant of the
Marine Corps; and the Director, Office of Management and Budget.  We
will also make copies available to others on request. 

If you or your staff have any questions concerning this report,
please call me on (202) 512-3504.  Major contributors to this report
are listed in appendix II. 

Richard Davis
Director, National Security
 Analysis


List of Congressional Committees

The Honorable Strom Thurmond
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Ted Stevens
Chairman
Committee on Appropriations
United States Senate

The Honorable Jesse A.  Helms
Chairman
Committee on Foreign Relations
United States Senate

The Honorable Floyd Spence
Chairman
The Honorable Ronald V.  Dellums
Ranking Minority Member
Committee on National Security
House of Representatives

The Honorable C.W.  Bill Young
Chairman
Subcommittee on National Security
Committee on Appropriations
House of Representatives


EXECUTIVE SUMMARY
============================================================ Chapter 0


   PURPOSE
---------------------------------------------------------- Chapter 0:1

As the security environment has changed since the end of the Cold
War, U.S.  strategy has emphasized the importance of providing a
credible overseas presence in peacetime to deter aggression and
advance U.S.  interests.  On any given day, over 200,000 military
personnel are engaged worldwide in a variety of presence activities. 
Because overseas presence is an important aspect of the national
strategy and the Department of Defense (DOD) expends billions of
dollars to provide the forces and activities that maintain that
presence, GAO determined (1) changes in DOD's approaches to providing
overseas presence since the end of the Cold War, (2) funding related
to providing an overseas presence, (3) the importance that regional
Commanders in Chief (CINC) assign to national security objectives and
presence approaches, and (4) DOD's process for determining
requirements for overseas presence and assessing alternatives for
meeting them.  GAO did not evaluate the appropriate level of presence
or the merit of specific approaches. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:2

Overseas presence is a key component of U.S.  strategy and is a
determining factor in the size of certain U.S.  forces.  During the
Cold War, the United States relied on overseas presence as a means of
containing the threat of communist expansion.  As the threat has
changed and become more regionally focused, the current U.S. 
strategy emphasizes the importance of enhancing regional stability
and shaping the international environment.  In its 1993 bottom-up
review, DOD cited overseas presence needs as the reason for sizing
naval forces, especially aircraft carriers, above the level needed to
meet the wartime requirement of fighting and winning two nearly
simultaneous major regional conflicts. 

Regional CINCs\1 use various approaches to achieve U.S.  national
security objectives related to presence, which are to (1) provide
initial crisis response, (2) deter potential aggressors, (3) reassure
allies of U.S.  support, and (4) influence events overseas in ways
favorable to the United States.  Presence approaches consist of
forces--active duty and reserve--and activities.  We categorized
these approaches as forward-based forces, routinely deployed forces,
forces temporarily deployable for specific purposes, prepositioned
equipment, exercises, military interaction, and foreign military
assistance.\2

In general, DOD provides the forces and related funding for these
approaches; the State Department provides policy guidance and funds
for certain military interaction activities and military assistance
programs. 

In 1995, the Commission on Roles and Missions of the Armed Forces
noted that overseas presence is challenging because of the difficulty
in relating specific results to the efforts expended by the U.S. 
forces engaged in presence activities.  It suggested that in light of
the changing world, DOD should look for more efficient and effective
ways to achieve presence objectives.  In response, the Secretary of
Defense asked the Chairman of the Joint Chiefs of Staff, in
conjunction with the Under Secretary of Defense for Policy, to
conduct a comprehensive review of presence objectives and related
requirements processes.  As part of this review, the Joint Staff has
recommended a planning process on the engagement aspect of
presence--activities that forces engage in during peacetime to shape
the security environment. 


--------------------
\1 These CINCs are the U.S.  Atlantic Command (ACOM), the U.S. 
Central Command (CENTCOM), the U.S.  European Command (EUCOM), the
U.S.  Pacific Command (PACOM), and the U.S.  Southern Command
(SOUTHCOM). 

\2 Interaction includes exchange programs, contacts between U.S.  and
foreign military officials, participation of foreign officers in U.S. 
based training, port calls, and operations during peacetime such as
counterdrug or humanitarian assistance.  Military assistance includes
programs that sell, finance, and donate U.S.  military items. 


   RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3

In response to changes in the security environment since the end of
the Cold War, U.S.  presence has changed significantly in different
regions of the world.  For example, as a result of force reductions
since 1988, fewer military forces are located overseas to provide
presence.  Also, because of these overseas force reductions and the
changing security environment, DOD has restructured land-based
prepositioned equipment and is maintaining more prepositioned
equipment afloat. 

The funding for presence approaches can be significant and varies
widely by approach, ranging from millions to billions of dollars. 
DOD requires the largest amount of funds to maintain the forces that
provide presence.  For example, funding for forces that were
forward-based was about $16.4 billion in 1996.\3 Since the end of the
Cold War, funding for certain approaches has fluctuated. 

Officials from regional commands view all national security
objectives and presence approaches to be important, but differ on
their relative importance.  ACOM and CENTCOM officials view initial
crisis response and deterrence as the most important objectives,
while EUCOM officials cite deterrence.  PACOM officials believe all
four objectives are equally important.  SOUTHCOM officials cite
reassurance and influence as the most important objectives.  These
officials also differ on the approaches they consider most important
to meeting these objectives.  Some prefer using various types of
forces, while others preferred military interaction activities.  In
prioritizing objectives and approaches, command officials considered
a number of factors, including the threats and the availability of
forward-based U.S.  forces in their respective region. 

DOD does not have a specific process for determining CINC presence
requirements.  Most of the forces used to provide an overseas
presence are also needed to meet warfighting needs, diplomatic
commitments, and other purposes.  DOD generally allocates forces to
the CINCs based on these requirements, rather than presence. 
Currently, DOD does not compile comprehensive information on all CINC
presence approaches nor does it completely analyze the effectiveness
of these approaches or whether more cost-effective
alternatives--different levels and mixes of forces and
activities--might exist.  DOD and CINC efforts to develop planning
processes related to presence, if expanded, would provide an
opportunity for DOD to better assess presence requirements and
approaches. 


--------------------
\3 This funding estimate includes funds to cover those costs incurred
because the forces are located overseas, such as for transportation,
as well as some costs incurred regardless of where the forces are
based, such as military pay. 


   PRINCIPAL FINDINGS
---------------------------------------------------------- Chapter 0:4


      CHANGES IN THE SECURITY
      ENVIRONMENT HAVE AFFECTED
      PRESENCE APPROACHES
-------------------------------------------------------- Chapter 0:4.1

DOD currently has the same type of approaches available to achieve
overseas presence as it did at the end of the Cold War.  However, the
shift in emphasis from global to regional threats, such as aggression
by major regional powers, has prompted DOD to make changes affecting
the forces and activities used for overseas presence.  For example,
between 1988 and 1996, DOD reduced total forces by about 904,410
personnel, from 3.3 million to 2.4 million, or 27 percent.  As a
result, fewer personnel are available for presence activities.  As
part of this drawdown, DOD reduced the number of personnel ashore
overseas from 458,446 to 213,467, or 53 percent.  This significant
reduction in particular affected EUCOM, which lost 210,218, or 66
percent, of its personnel. 

DOD has also made changes in force deployments and the location of
prepositioned equipment.  Since the Cold War, DOD has decreased the
amount of naval aircraft carrier battle group coverage in EUCOM's
region and increased naval deployments in CENTCOM's area.  For
example, before the 1980s, only three or four naval ships were
deployed at any one time in the Persian Gulf, although carrier battle
groups were nearby.  However, carrier battle groups are now routinely
present in the Gulf, along with land-based aircraft and other units. 
Also since 1988, DOD has decreased the amount of land-based
prepositioned equipment in EUCOM's area by over 50 percent but is
increasing the amount in PACOM and CENTCOM.  Furthermore, a larger
amount is being maintained afloat. 


      FUNDING FOR APPROACHES CAN
      BE SIGNIFICANT AND VARIES
-------------------------------------------------------- Chapter 0:4.2

The funding for overseas presence approaches can be significant and,
based on the data available, varies by approach.  DOD requires the
largest amount of funds to maintain the forces that provide presence. 
For example, funding for forces that were forward-based was about
$16.4 billion in 1996 (see footnote 3).  In contrast, 1996 funding
for prepositioning equipment was about $960 million.  Although DOD
has some funding data on each of the approaches, this information is
incomplete.  For example, DOD does not compile data on all military
interaction activities. 

Since the end of the Cold War, funding has decreased for some
presence approaches and increased for others based on our comparison
of available comparable data.  For example, because of the force
drawdown, funding for forces that were forward-based decreased from
about $27.4 billion in fiscal year 1989 to $16.4 billion in fiscal
year 1996.  Funding for prepositioning increased--from about $640
million in fiscal year 1992 to nearly $960 million in fiscal year
1996. 


      CINCS VIEW THE IMPORTANCE OF
      SECURITY OBJECTIVES AND
      APPROACHES DIFFERENTLY
-------------------------------------------------------- Chapter 0:4.3

While the five regional CINCs consider the national security
objectives and presence approaches to be important, they have
differing views on the relative importance of the objectives and the
approaches\4 (see table 1).  They were asked to base their views on
factors such as threat, geographic characteristics, relationships
with foreign governments and militaries, U.S.  commitments, and the
availability of U.S.  forces. 



                                     Table 1
                     
                       Objectives and Approaches That CINC
                     Officials Consider to Be Most Important

            ACOM          CENTCOM       EUCOM         PACOM         SOUTHCOM
----------  ------------  ------------  ------------  ------------  ------------
Objective
--------------------------------------------------------------------------------
Initial     X             X                           X
crisis
response

Deterrence  X             X             X             X

Reassuranc                                            X             X
e

Influence                                             X             X


Approach
--------------------------------------------------------------------------------
Forward-                                X             X
based
forces

Routinely                 X
deployed
forces

Temporaril  X
y
deployable
forces

Prepositio                X
ning

Exercises

Military                                X                           X
interactio
n

Foreign
military
assistance
--------------------------------------------------------------------------------
ACOM and CENTCOM officials equally rank initial crisis response and
deterrence as the most important objectives.  ACOM's primary concern
is economic stagnation and political instability.  Its crises usually
relate to humanitarian assistance, migrant, and counterdrug
operations.  Its deterrence efforts also focus on counterdrug
operations, as well as, monitoring submarines of the former Soviet
Union.  Temporarily deployable forces were the officials' preferred
approach to achieving these objectives because of the flexibility
they provide.  On the other hand, CENTCOM officials stated that their
command focuses on deterring and, if necessary, responding to a major
regional conflict.  Because, for various reasons, the number of
forward-based forces in CENTCOM's region are constrained, they
believe routinely deployed forces and prepositioned equipment are the
best approaches to deter potential aggression and respond to a
crisis. 

Because of the potential for small conflicts in its region, EUCOM
officials believe deterrence is most important.  They stated that the
forward-based personnel in Europe are most important because they
show U.S.  commitment to allies and are a primary means by which it
accomplishes military interactions.  In areas where forward basing is
not available, such as Eastern Europe, or is not economically or
strategically vital, such as Africa, they believe conflict is
deterred through humanitarian assistance, exchange programs, and
other interaction activities. 

PACOM officials consider the use of forward-based forces the most
important approach for accomplishing the presence objectives because
they demonstrate commitment and provide the personnel for many of the
presence activities. 

SOUTHCOM officials emphasized the importance of reassuring allies and
influencing events.  They believe that to promote stability in the
region, military interaction activities are key to building
relationships with countries in their region. 


--------------------
\4 GAO used an analytic hierarchy decision model to solicit and
record the views of CINC officials on the relative importance of
presence objectives and approaches. 


      DOD DOES NOT ROUTINELY
      CONSIDER WHETHER MORE
      COST-EFFECTIVE ALTERNATIVES
      EXIST TO MEET PRESENCE
      REQUIREMENTS
-------------------------------------------------------- Chapter 0:4.4

DOD does not have a specific process to determine presence
requirements.  Most of the forces that CINCs use to meet these
objectives are the same forces needed to meet wartime requirements,
diplomatic commitments, and other purposes.  DOD generally assigns
forces to the CINCs in peacetime based on these requirements, rather
than presence.  Such allocations occur through processes or actions
that are usually independent of each other.  For example, DOD's 1993
bottom-up review determined the number of forces to be forward-based;
and the Joint Staff periodically reviews and establishes the
frequency of naval deployments when updating DOD's Global Naval Force
Presence Policy.  DOD and the State Department, as appropriate,
review the CINCs' requests for foreign military assistance. 

DOD does not currently comprehensively collect and completely analyze
information on all CINC presence requirements and approaches.  Also,
DOD does not collectively review CINC requirements and objectives in
a given region and evaluate the effectiveness of the level and mix of
the forces and activities used to meet the objectives.  Nor does DOD
consider whether more cost-effective alternatives might exist, such
as different combinations of forces, prepositioning, interaction
activities, and military assistance.  For example, DOD could examine
questions such as (1) whether CINCs can accomplish security
objectives by using a different mix of aircraft carrier, surface
combatant, air power, and ground force deployments than is currently
employed and (2) whether the availability of satellites and other
information technology offer the opportunity to reduce the physical
presence of U.S.  forces.  Such assessments would allow DOD and the
CINCs to make judgments about the level and nature of effort--forces,
activities, and funding--that is expended to provide presence and
determine whether adjustments should be made. 


      DOD AND CINC PLANNING
      EFFORTS ON PRESENCE, IF
      EXPANDED, PROVIDE AN
      OPPORTUNITY TO ASSESS
      ALTERNATIVES
-------------------------------------------------------- Chapter 0:4.5

DOD, through the Joint Staff, is beginning to develop a process on
the engagement aspect of presence--activities that U.S.  forces
engage in during peacetime to shape the international security
environment.  However, the scope of the process as currently proposed
is limited because it does not address how DOD will comprehensively
assess (1) the effectiveness of all presence approaches or (2)
whether cost-effective alternatives to the current level and mix of
forces and activities that provide presence exist.  EUCOM, CENTCOM,
and PACOM are implementing processes to compile information on their
presence activities, assess their effectiveness, and develop future
presence plans. 

While DOD's efforts to address the engagement aspect of presence are
an important first step, GAO believes that DOD needs to assess all
presence approaches and alternatives for meeting security objectives. 
In this regard, the results of CINC planning efforts may be useful to
DOD.  Until DOD collectively assesses the CINCs' presence
requirements, the effectiveness of all presence approaches, and
alternatives to existing levels and mixes of forces and activities,
it will be unable to determine whether alternatives exist that could
achieve security objectives more cost-effectively. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 0:5

GAO recommends that the Secretary of Defense, in coordination with
the CINCs and Department of State, compile and analyze information on
CINC presence requirements and approaches in a manner that would
allow assessments of the effectiveness of current levels and mixes of
forces and activities, and whether alternatives exist that could
achieve national security objectives more cost-effectively. 


   AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6

GAO provided a draft of this report to DOD and the Department of
State for comment.  DOD provided comments on the draft, which are
included in appendix I.  The Department of State advised GAO orally
that it had no comments. 

DOD concurred with GAO's recommendation and partially concurred with
the report.  DOD disagreed with GAO's conclusion that DOD does not
routinely consider whether more cost-effective alternatives exist to
meet presence requirements.  DOD said it already makes decisions that
affect presence and regularly assesses whether adjustments should be
made.  DOD stated its planning system provides an approach to
maintain warfighting readiness, deterrent posture, and crisis
response capability, and determines the location and deployment of
forces and the number of personnel assigned overseas.  DOD said that
these results are reflected in its budgeting system, which allocates
resources for forces.  Under these systems, DOD stated that it
establishes priorities and considers the cost-effectiveness of
alternatives.  In agreeing with GAO's recommendation, DOD said it is
developing a planning process to review peacetime
engagement--activities that forces engage in to shape the security
environment.  According to DOD, this process will provide (1)
guidance on objectives, tasks, priorities, and resources related to
these activities and (2) improve DOD's ability to resource engagement
requirements and make decisions on engagement alternatives. 

DOD also said that the report has limited value because it focused
primarily on the engagement aspect of presence.  It noted that forces
are assigned to CINCs based on warfighting requirements and other
commitments, rather than just engagement.  DOD further stated that
GAO's methodology had serious limitations because GAO grouped forces
and activities in a single list of presence approaches.  DOD believed
this analytic construct, manifested in the model used to obtain CINC
officials' views on the relative importance of approaches, misleads
the reader by implying that means (forces and infrastructure
overseas) and ways (how these forces and infrastructure are employed)
are equivalent and interchangeable.  DOD noted the report highlighted
the costs of supporting presence overseas, but failed to assess the
benefits.  DOD emphasized that the return on investment in terms of
deterring major conflict and shaping the security environment is
substantial.  DOD's specific comments and GAO's evaluation of them
are included in the report where appropriate. 

GAO agrees that DOD, through its planning and budgeting systems,
makes decisions about the resources expended for presence.  However,
as DOD notes, these decisions relate to forces based on warfighting,
deterrence, and crisis response needs.  Presence encompasses a
broader set of national security objectives, including deterrence,
crisis response, reassurance, and influence, and is accomplished
through a variety of forces and activities.  DOD's systems do not
currently include a mechanism to review presence requirements and
approaches, and to evaluate the appropriate level and mix of forces
and activities.  While DOD's efforts to address the engagement
(activities) aspect of presence are an important step, GAO believes
that DOD should integrate and analyze information on all presence
approaches.  Unless DOD includes the entire range of forces and
activities available to achieve presence, it will be unable to
determine whether alternatives exist that could achieve security
objectives more cost-effectively. 

GAO's examination of presence addressed more than engagement
activities.  In fact, the report specifically includes forward-based
and deployed forces, and prepositioning of equipment in its
discussion of presence approaches and provides extensive information
on these approaches.  GAO's grouping of forces and activities in a
single list of presence approaches is valid because it reflects the
broader nature of presence beyond just forces, as depicted in the
1996 national security strategy and other DOD documents.  GAO used
the model as a tool to obtain CINC officials' views on the relative
importance of presence approaches.  GAO presented these views in a
factual manner in the report and did not state conclusions about
whether the approaches were equivalent and interchangeable. 

GAO agrees that the benefits of maintaining overseas presence are
significant.  The report specifically states that presence is a key
component of U.S.  strategy that CINCs rely on to accomplish
important national security objectives.  It also discusses, in some
detail, the CINC's views on the importance and impact of presence. 
GAO presented cost information on the various presence approaches to
show the extent of DOD's investment in the forces and activities used
to achieve presence, and did not contrast the costs with the
benefits. 


INTRODUCTION
============================================================ Chapter 1

Since the end of the Cold War, U.S.  strategy has shifted its focus
from containing the global threat of communist expansion to
responding to dangers such as the spread of weapons of mass
destruction, aggression from major regional powers, the potential
failure of democratic reforms in the former Soviet Union and
elsewhere, and the potential failure to build a strong and growing
U.S.  economy.  According to the Department of Defense's (DOD) 1993
bottom-up review, the United States, in the post Cold War era, must
pursue a defense strategy characterized by international political,
economic, and military engagement.  This strategy of engagement
advocates (1) preventing the emergence of threats to U.S.  interests
by promoting democracy, economic growth, free markets, human dignity,
and the peaceful resolution of conflict and (2) pursuing
international partnerships for freedom, prosperity, and peace. 

Overseas presence is directly linked to the concept of engagement and
has been a key component of U.S.  strategy.  During the Cold War, the
United States sought to contain Soviet nuclear and conventional
forces through the presence of large numbers of forward-deployed
forces in Europe and East Asia.  Since then, U.S.  presence has
become a means of promoting global stability and remaining engaged
abroad in peacetime.  For example, the 1995 National Military
Strategy calls for flexible and selective engagement based on
complementary strategic concepts of maintaining overseas presence and
the ability to rapidly project power worldwide.  Also, the 1996
National Security Strategy of Engagement and Enlargement cites the
need to maintain a robust overseas presence in several forms, such as
flexible military forces, prepositioned equipment, exercises,
military-to-military contacts, and foreign military assistance
programs to deter aggression and advance U.S.  strategic interests. 

Overseas presence is also a determining factor in the size of U.S. 
naval forces.  In its 1993 bottom-up review, DOD emphasized that
presence needs can impose requirements for naval forces, especially
aircraft carriers, that exceed those needed for the wartime
requirement of fighting and winning two nearly simultaneous major
regional conflicts.  DOD, therefore, stated that it sized the naval
force to reflect presence as well as warfighting requirements.  DOD
determined that it needed a total of 12 carriers, 10 of which would
be adequate for two major regional conflicts.  Retaining additional
carriers for presence has significant budget implications because the
nuclear powered aircraft carrier is the most expensive weapon system
in the nation's arsenal.  The Navy is currently building one aircraft
carrier at a total estimated cost of $4.3 billion in fiscal year 1995
dollars and is planning for another carrier, which would begin
construction in fiscal year 2002 at a estimated cost of $5.4 billion
in then-year dollars. 


   REGIONAL COMMANDS USE A VARIETY
   OF APPROACHES TO MEET SECURITY
   OBJECTIVES
---------------------------------------------------------- Chapter 1:1

In peacetime, the United States maintains overseas presence to (1)
provide an initial crisis response, (2) deter potential aggressors,
(3) reassure allies of U.S.  commitment, and (4) influence events
overseas in ways favorable to U.S.  interests.  The five regional
commanders in chief (CINC) are responsible for achieving these
national security objectives in their assigned geographic areas (see
fig.  1.1).  These CINCs are the U.S.  Atlantic Command (ACOM), the
U.S.  Central Command (CENTCOM), the U.S.  European Command (EUCOM),
the U.S.  Pacific Command (PACOM), and the U.S.  Southern Command
(SOUTHCOM). 

   Figure 1.1:  Areas of
   Responsibility Assigned to
   Regional CINCs

   (See figure in printed
   edition.)

Source:  Office of the Assistant Secretary of Defense (Public
Affairs). 

The CINCs use a variety of approaches--forces and activities--to
achieve security objectives (see table 1.1).  Although the CINCs
generally use the same types of presence approaches, the level and
mix may vary, depending on the circumstances in a particular region. 
For example, EUCOM and PACOM have significant numbers of
forward-based forces located in countries in their regions.  On the
other hand, access for basing U.S.  forces in CENTCOM's area has been
limited; therefore, most of the forces that the Command uses for
overseas presence are on routine and temporary deployments. 



                               Table 1.1
                
                 Approaches for Achieving U.S. Security
                               Objectives

Approach            Description
------------------  --------------------------------------------------
Forward-based       Forces permanently based ashore in foreign
forces              countries

Routinely deployed  Forces that deploy from U.S. or overseas locations
forces              to conduct routine operations

Forces temporarily  Forces that could deploy from the United States or
deployable for      overseas bases for specific purposes, such as
specific purposes   operations or exercises

Prepositioned       Warfighting equipment maintained at overseas
equipment           locations (ashore and afloat)

Exercises           Individual (single service), joint (more than one
                    service), and combined (U.S. and foreign forces)
                    training involving forward-based and deployed U.S.
                    forces

Military            Activities such as exchange programs, contacts
interaction         between U.S. and foreign military officials,
                    participation of foreign military officers in U.S.
                    professional education programs, port calls, and
                    operations during peacetime, such as counterdrug
                    and humanitarian assistance

Foreign military    Programs that sell, finance, or donate U.S.
assistance          defense equipment, services, or training to
                    foreign governments
----------------------------------------------------------------------
The forces that provide presence include both active and reserve
force units.  DOD provides the forces and related funding for
overseas presence approaches.  The Department of State provides
policy guidance and funds foreign military assistance and all or part
of certain military interaction activities, such as the International
Military Education and Training program\1 and the Partnership for
Peace program.\2


--------------------
\1 State Department funds this program to provide training in the
United States to foreign military and civilian personnel. 

\2 This program is a U.S.  initiative started by the North Atlantic
Treaty Organization to strengthen cooperation with 27 central and
eastern European countries, including the former Soviet Union.  DOD
and the State Department fund the U.S.  contribution to this program,
including funds for training, equipment, and other assistance. 


   DOD IS REVIEWING OVERSEAS
   PRESENCE
---------------------------------------------------------- Chapter 1:2

In its 1995 report, the Commission on Roles and Missions of the Armed
Forces noted that the U.S.  national security strategy places a high
priority on engaging others overseas and recognized that all services
provide capabilities to meet the CINCs' overseas presence objectives. 
It also noted that overseas presence is challenging because of the
difficulty in relating specific results to the efforts expended by
the U.S.  forces engaged in presence activities.  The Commission
suggested that, in light of the changing world, DOD look for more
efficient and effective ways to achieve presence objectives.  It
recommended that DOD (1) revise the process for determining CINC
presence requirements and (2) experiment with new approaches for
achieving presence objectives. 

In response to the Commission's recommendations, the Secretary of
Defense, in August 1995, asked the Chairman of the Joint Chiefs of
Staff, in conjunction with the Under Secretary of Defense for Policy,
to conduct a comprehensive review of presence objectives and
associated requirements processes.  As discussed in chapter 4, a
Joint Staff working group led this review and developed a proposal to
establish a planning process on the engagement aspect of
presence--activities that forces engage in during peacetime to shape
the international security environment.  This group, established in
1994 as one of DOD's Joint Warfighting Capability Assessment teams,
focuses on regional engagement and overseas presence issues.\3 Prior
to working on the Chairman's review of presence, the team prepared a
paper describing U.S.  military interaction activities with foreign
governments and militaries. 


--------------------
\3 DOD established 10 assessment teams in selected mission areas to
advise the Chairman on joint warfighting capabilities.  According to
DOD officials, the regional engagement and overseas presence team was
originally chartered to study several select presence issues, but its
scope was expanded to include all aspects of overseas presence. 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
---------------------------------------------------------- Chapter 1:3

We examined (1) changes in DOD's approaches to providing overseas
presence since the end of the Cold War, (2) funding related to
providing overseas presence, (3) the importance that regional CINCs
assign to national security objectives and presence approaches, and
(4) DOD's means of determining requirements for overseas presence and
assessing alternatives for meeting them.  We did not evaluate the
appropriate level of presence or the merit of specific approaches. 

To determine how DOD's approaches for providing peacetime presence
have changed since the end of the Cold War, we interviewed
knowledgeable officials at the offices of the Assistant Secretary of
Defense for Strategy and Requirements; the Joint Chiefs of Staff; the
Army, the Air Force, the Navy, and the Marine Corps headquarters; and
the Department of State.  We also reviewed relevant documentation,
including DOD studies on presence, the Future Years Defense Programs
related to fiscal years 1988-96, and Department of State
congressional presentation documents. 

To determine funding related to the approaches used for overseas
presence, we analyzed the historical and current DOD Future Years
Defense Programs; the Department of State budget documents; the
President's fiscal years 1990-98 budgets; and reports and documents
from the Office of the Secretary of Defense, Joint Staff, CINCs, and
the Defense Security Assistance Agency. 

To determine the importance that regional CINCs assign to national
security objectives and presence approaches, we interviewed
knowledgeable officials at the five regional CINCs and reviewed
relevant documentation.  We used an analytical hierarchy decision
model called Expert Choice to guide our discussions with command
officials.  To apply this model, we categorized the forces and
activities used for presence into seven approaches based on our
analysis of DOD documents and the results of preliminary tests at two
CINCs.  We then convened a panel of command officials from major
functional areas, such as intelligence, operations, logistics, and
strategic plans and policy.  We asked the panel to (1) respond to a
series of questions on the relative importance of security objectives
and approaches, (2) reach consensus, and (3) provide the rationale
for their answers.  The model then calculated the relative importance
of the objectives and approaches, and we discussed the results with
command officials to obtain their comments. 

To identify how DOD determines presence requirements and assesses
alternatives for achieving them, we interviewed knowledgeable
officials and reviewed relevant documentation at the offices of the
Assistant Secretary of Defense for Strategy and Requirements; the
Joint Chiefs of Staff; the Army, the Air Force, the Navy, and the
Marine Corps headquarters; the U.S.  Army Training and Doctrine
Command; the U.S.  Air Force Air Combat Command; and the five
regional CINCs.  We also met with officials at the Department of
State and the National Security Council. 

We conducted this review from October 1995 through April 1997 in
accordance with generally accepted government auditing standards. 


CHANGES IN THE SECURITY
ENVIRONMENT HAVE AFFECTED PRESENCE
APPROACHES
============================================================ Chapter 2

In response to changes in the security environment, U.S.  presence
has changed significantly in different regions of the world since the
end of the Cold War.  Among other things, force reductions have made
fewer forces available for overseas presence and the frequency of
force deployments has increased in some regions while decreasing in
others.  DOD has also restructured prepositioned equipment; engaged
in new types of exercises and military interaction activities; and
made adjustments in military assistance.  Since the end of the Cold
War, funding has decreased for some approaches and increased for
others.  The funding varies widely by approach, some of which can
cost billions of dollars. 


   FEWER FORCES ARE AVAILABLE FOR
   PRESENCE AND DEPLOYMENTS AND
   PREPOSITIONING HAVE SHIFTED
---------------------------------------------------------- Chapter 2:1

In the post-Cold War years, DOD has steadily reduced the total
military force, from about 3.3 million in fiscal year 1988 to 2.4
million in fiscal
year 1996, a 27-percent reduction.  This reduction affected both
active duty and reserve personnel.  Table 2.1 provides a breakdown of
the reduction in military personnel. 



                               Table 2.1
                
                  Change in Military Personnel, Fiscal
                           Years 1988 to 1996

                                                           Change from
                                  End of         End of    fiscal year
                                  fiscal         fiscal   1988 to 1996
Component                      year 1988      year 1996      (percent)
-------------------------  -------------  -------------  -------------
Active                         2,138,213      1,471,722   666,491 (31)
Reserve                        1,158,357        920,438   237,919 (21)
======================================================================
Total                          3,296,570      2,392,160   904,410 (27)
----------------------------------------------------------------------
Source:  The Secretary of Defense's Annual Report to the Congress,
1997, and DOD reserve manpower statistics. 

The force drawdown has significantly affected presence approaches
because large reductions--about 56 percent--have occurred in the
numbers of active duty personnel that are based ashore overseas or
deployed routinely or temporarily overseas aboard Navy ships. 
Generally, forward-based and deployed active personnel represent the
bulk of the U.S.  forces available for presence activities on a daily
basis.  Table 2.2 shows the reduction in active duty personnel ashore
or afloat overseas from fiscal year 1988 to 1996. 



                               Table 2.2
                
                   Reduction in Active Duty Military
                Personnel Overseas, Fiscal Years 1988 to
                                  1996

                                                           Change from
                                  End of         End of    fiscal year
                                  fiscal         fiscal   1988 to 1996
Overseas personnel             year 1988      year 1996      (percent)
-------------------------  -------------  -------------  -------------
Ashore\a                         458,446        213,467   244,979 (53)
Afloat\b                          82,142         26,954    55,188 (67)
======================================================================
Total                            540,588        240,421   300,167 (56)
----------------------------------------------------------------------
\a Figures reflect permanently based and temporarily deployed forces
ashore in foreign countries. 

\b Figures reflect deployed forces afloat. 

Source:  DOD Worldwide Manpower Distribution by Geographic Area. 

Compared to the other four CINCs, EUCOM has been the most affected by
the reductions in active duty personnel ashore overseas (see table
2.3).  Specifically, between fiscal year 1988 and 1996, it incurred a
66-percent reduction from 318,500 to 108,300 in its personnel ashore. 
This reduction of 210,200 people amounts to 86 percent of the total
reduction in personnel ashore worldwide.  ACOM, SOUTHCOM, and PACOM
also experienced decreases, but the percentage reduction was less
than EUCOM.  Over the same time, CENTCOM experienced an increase in
the number of personnel ashore. 



                               Table 2.3
                
                   Reduction in Active Duty Military
                Personnel Ashore in Foreign Countries by
                   Command, Fiscal Years 1988 to 1996

                             Active duty    Active duty    Change from
                           military (end  military (end    fiscal year
                               of fiscal      of fiscal   1988 to 1996
Command                       year 1988)     year 1996)      (percent)
-------------------------  -------------  -------------  -------------
ACOM                               9,489          5,393   -4,096 (-43)
CENTCOM                            2,361          8,986  +6,625 (+281)
EUCOM                            318,519        108,301    -210,218 (-
                                                                   66)
PACOM                            113,991         81,480     -32,511 (-
                                                                   29)
SOUTHCOM                          13,169          7,670   -5,499 (-42)
----------------------------------------------------------------------
Note:  Figures do not include personnel located in areas that are not
assigned to a regional command, such as the former Soviet Union,
Canada, Mexico, and Antarctica. 

Source:  DOD Worldwide Manpower Distribution by Geographic Area. 

The changing security environment has also affected naval
deployments.  During the Cold War, naval carrier battle
groups--aircraft carriers with several surface combatant ships,
submarines, and logistics support ships--deployed regularly to
EUCOM's area.  Since the post-Cold War drawdown, the amount of
carrier battle group coverage in EUCOM's region has decreased.\1 By
contrast, as DOD has become more concerned about the threat in the
Persian Gulf, routine naval deployments there have increased. 
Whereas three or four ships were deployed to the area before the
1980s and carrier battle groups were usually present outside the
Gulf, a carrier battle group is now routinely deployed in the Gulf
along with land-based aircraft and other units. 

As the security environment has changed and DOD has reduced its
forces overseas, DOD has restructured land-based prepositioned
equipment (see table 2.4) and increased the amount of prepositioned
equipment aboard ships.  EUCOM has experienced the only reduction in
Army land-based prepositioned equipment.  Since the end of the Cold
War, the Army has reduced its nine brigade sets of prepositioned
equipment in Central Europe to two as of 1996.  In addition, EUCOM
has an Army brigade set in Italy and a Marine Corps brigade set in
Norway.  Meanwhile, DOD has started prepositioning equipment in
CENTCOM's region.  One brigade set is now located in Kuwait, another
brigade set and equipment for a division headquarters is being placed
in Qatar, and plans for a third brigade set are being considered. 
The amount of prepositioned equipment in PACOM's region is being
increased by an Army brigade set now being placed in Korea. 



                               Table 2.4
                
                 Changes in Army and Marine Corps Land-
                Based Prepositioned Equipment by Region
                     From Fiscal Year 1988 to 1996

                                Brigade sets of     Brigade sets of
                                prepositioned       prepositioned
                                equipment (fiscal   equipment (fiscal
Commands                        year 1988)          year 1996)
------------------------------  ------------------  ------------------
ACOM                            0                   0

CENTCOM                         0                   1 Army set
                                                    1 partial Army
                                                    set\a

EUCOM                           9 Army sets         3 Army sets
                                1 Marine Corps set  1 Marine Corps set

PACOM                           0                   1 Army set

SOUTHCOM                        0                   0
----------------------------------------------------------------------
\a DOD plans to complete this set by the year 2000. 

Sources:  DOD data and the Secretary of Defense's Annual Reports to
the Congress. 

The amount of prepositioning aboard ships has increased since 1988
primarily because, in 1993, the Army started prepositioning equipment
afloat.  By 1996, the Army had equipment on 14 ships stationed in the
Indian and Pacific Oceans in sufficient quantities to provide
material for an armor brigade and other units.  Since the mid-1980s,
the Marines have maintained prepositioned equipment on 13 ships.  In
addition, the Navy, the Air Force and the Defense Logistics Agency
currently have seven ships with prepositioned equipment and other war
reserve material. 


--------------------
\1 Specific data on deployment frequency is classified. 


   DOD HAS CHANGED ITS EXERCISES
   AND INTERACTION ACTIVITIES
---------------------------------------------------------- Chapter 2:2

The changing security environment has also affected the type and
number of exercises and the importance of interaction activities. 
The Chairman of the Joint Chiefs of Staff's exercises are the
principal vehicle for achieving inter-service and multinational
operational training.  Also, exercises demonstrate U.S.  resolve and
the capability to project military presence anywhere in the world. 
The nature of these exercises has changed in recent years from a few
large-scale ones focused on preparing for global contingencies and
conflicts to an increased number of smaller ones focused on regional
contingencies.  As a result, the number of exercises has increased
from 90 in fiscal year 1990 to approximately 200 in fiscal year 1995. 
Of the 200 exercises, the vast majority involved the deployment of
U.S.  forces to ensure access to foreign seaports or airstrips and
visibly demonstrate U.S.  commitment.  Other activities include
humanitarian assistance and enhancing the professionalism of foreign
militaries. 

Military interaction\2 is an umbrella term we used in this report to
describe a variety of programs carried out by DOD and the Department
of State, whereby U.S.  defense personnel interact with foreign
personnel to shape the security environment in support of U.S. 
national security objectives.  During the Cold War, U.S.  forces
participated in interaction activities at a minimum because they were
perceived as diverting resources and undermining wartime readiness. 
In the mid-1990s, DOD's view of these activities changed as U.S. 
strategy shifted toward regional engagement and enlargement.  As a
result, the U.S.  military now views military interaction such as
training of foreign military personnel in the United States and
counterdrug operations as more important and is involved in new
activities such as Partnership for Peace and regional study centers. 
These activities are described below. 


--------------------
\2 This term as used in this report differs from DOD's definition of
foreign military interaction in that it does not include the
Department of State assistance programs foreign military sales,
foreign military financing, and excess defense articles program,
which we categorized as foreign military assistance. 


      TRAINING
-------------------------------------------------------- Chapter 2:2.1

The International Military Education and Training program provides
professional education and training to foreign military and civilian
personnel from over 100 countries annually.  The Joint Staff
considers this a cost-effective program.  Over half a million foreign
personnel have been trained since 1950, but the number trained
annually has decreased in recent years from almost 6,000 students in
1988 to less than 2,700 in 1995.  Over this time, the type of
training has changed from lower grade technical training to more
senior officers attending war colleges.  International Military
Education and Training Program attendees receive training in U.S. 
values, regard for human rights, democratic institutions, and
civilian control of the military. 


      COUNTERDRUG OPERATIONS
-------------------------------------------------------- Chapter 2:2.2

In 1989, the Congress directed DOD to take charge of monitoring sea
and air traffic to detect the transit of illegal drugs to the United
States.  In 1993, the administration's focus changed to helping
source countries in their counterdrug operations.  The CINCs
implement a broad spectrum of counterdrug training and operational
support within their regions.  DOD support for source nations is
oriented toward strengthening institutions within these nations so
they can better conduct their own counterdrug operations.  This
assistance includes the detection and monitoring of the transit area,
support for domestic drug law enforcement agencies, and dismantling
cartels. 


      PARTNERSHIP FOR PEACE
-------------------------------------------------------- Chapter 2:2.3

Partnership for Peace is a 1994 U.S.  initiative started by the North
Atlantic Treaty Organization to promote stability and security
throughout Europe.  It comprises a broad program of activities
designed to strengthen practical cooperation between the North
Atlantic Treaty Organization and 27 Partnership for Peace countries
in Central Europe and the former Soviet Union.  Partnership for Peace
prepares and equips the nations to successfully participate in joint
missions such as peace operations, search and rescue, and
humanitarian assistance. 


      REGIONAL STUDY CENTERS
-------------------------------------------------------- Chapter 2:2.4

Regional study centers are a recent activity that provide the
opportunity for foreign military personnel to enroll in academic
courses on defense planning and management in democratic societies
such as civilian and military relations and democracy, law of war and
international humanitarian law, lessons learned from the Cold War,
and combined peace operation training and exercises.  EUCOM's George
C.  Marshall Center in Germany, established in 1992, focuses on
educating mid- to senior-level defense officials from former Soviet
states.  PACOM's Asia-Pacific Center in Hawaii, established in 1996,
facilitates the understanding of U.S.  military, diplomatic, and
economic roles in the Pacific. 


   FOREIGN MILITARY ASSISTANCE HAS
   FLUCTUATED, BUT HAS NOT CHANGED
   SIGNIFICANTLY SINCE THE END OF
   THE COLD WAR
---------------------------------------------------------- Chapter 2:3

Overseas presence also includes military assistance to foreign
countries in the form of foreign military financing, foreign military
sales, and excess defense articles.  These three programs provide a
means to transfer defense equipment, services, and training to
friendly foreign militaries to enhance their capabilities and thereby
benefit the United States.  For the sales and financing programs, the
regional CINCs make recommendations on the amount and type of
assistance and ensure coordination of the assistance with U.S. 
diplomatic missions and DOD components.  Of the three programs, only
foreign military financing receives an annual appropriation.  These
funds are for grants and subsidies for loans to countries with which
they can purchase U.S.  defense articles or services.  The other two
programs, foreign military sales and excess defense articles, provide
a mechanism for selling or giving U.S.  defense articles to foreign
countries. 

The total appropriation for foreign military financing has varied
from about $4.0 billion in fiscal year 1988 to $4.8 billion in fiscal
year 1990 before decreasing to $3.3 billion in fiscal year 1996.  Of
this funding,
$3.1 billion annually since fiscal year 1988 has gone to two
countries, Egypt ($1.3 billion) and Israel ($1.8 billion), with the
remainder of the grants distributed primarily to several other
countries.  For example, in fiscal year 1996, Jordan (CENTCOM)
received $100 million, Cambodia (PACOM) received $1 million, the
Partnership for Peace countries (EUCOM) received $53 million, the
Caribbean countries (ACOM) received $2 million.  None of the
countries in SOUTHCOM's region received funding. 

The foreign military sales program involves the
government-to-government sale of U.S.  defense equipment, services,
training, and construction to foreign countries.  The annual amount
of these sales has varied from $11.3 billion in fiscal year 1988 to
nearly $33 billion in fiscal year 1993 before declining to $10.5
billion in fiscal year 1996.  Cumulatively, some of the major
purchasers over these years have been Saudi Arabia ($36 billion),
Egypt ($12 billion), Taiwan ($10 billion), and Israel ($7 billion). 

The excess defense articles program donates or sells defense items no
longer needed by the United States to eligible foreign countries. 
The current value of excess defense articles donated or sold has
varied from $194 million in fiscal year 1994 to $151 million in
fiscal year 1995.  The primary countries receiving donations of
excess defense articles valued at $138 million in fiscal year 1995
were Turkey ($58 million), Jordan ($26 million), Egypt ($19 million),
and Greece ($17 million). 


   FUNDING FOR OVERSEAS PRESENCE
   APPROACHES CAN BE SIGNIFICANT
   AND VARIES
---------------------------------------------------------- Chapter 2:4

Funding for overseas presence approaches can be significant and,
based on the data available, varies widely by approach.  DOD requires
the largest amount of funds to maintain the forces that provide
presence.  Although DOD has some funding data on each of the
approaches, this information is not complete.  For example, DOD does
not compile data on all of the activities associated with military
interaction, such as the funding attributable to naval ship visits to
foreign ports, military-to-military contacts, and exchange programs. 
Table 2.5 shows the fiscal year 1996 funding, to the extent that data
was available, associated with each presence approach.  The table is
meant to be illustrative and, for the reasons cited above, does not
include every component that makes up each approach. 



                               Table 2.5
                
                  Examples of Fiscal Year 1996 Funding
                     Related to Presence Approaches

                         (Numbers in billions)

                                                      Fiscal year 1996
Approach                                                     funding\a
--------------------------------------------------  ------------------
Forward-based forces\b                                         $16.354
Routinely and temporarily deployable forces                         \c
Prepositioned equipment\d                                        0.957
Exercises\e                                                      0.379
Military interaction\f
 International military education and training                   0.039
 Marshall Center                                                 0.012
 Traditional CINC activities                                     0.060
 Peacetime operations
 Counterdrug                                                     0.817
 Peace operations\g                                              0.455
 Humanitarian, disaster, and civic assistance                    0.036
 Peace initiatives
 Partnership for Peace                                           0.093
 Cooperative threat reduction                                    0.305
Foreign military assistance\h
 Foreign military financing                                      3.292
 Foreign military sales                                         10.339
 Excess defense articles                                         0.168
----------------------------------------------------------------------
\a Figures may include some double-counting because of overlap in the
approaches.  For example, part of the Partnership for Peace funding
is foreign military financing grants.  Funding shown is budget
authority, obligations, or values of items sold or donated. 

\b Reflects estimated military pay, operations and maintenance,
transportation, military construction, and family housing and
construction.  Some of the funding includes funds to cover those
costs incurred because the forces are located overseas, such as for
transportation, as well as some costs incurred regardless of where
the forces are based, such as military pay.  Funding shown does not
reflect support received from host nations. 

\c Funding data is not available because DOD does not compile data on
the cost related to deploying forces from the United States or
overseas locations for presence. 

\d Reflects funding for operations and maintenance, military
personnel, and limited procurement related to prepositioning ashore
and afloat. 

\e Reflects funding for support and transportation for exercises
sponsored by the Chairman, Joint Chiefs of Staff.  Funding for
service exercises was not readily available. 

\f Reflects DOD and the Department of State funding for these
approaches. 

\g Reflects funding for U.S.  assistance to some international
efforts to monitor and maintain areas of special concern and U.N. 
contributions for international peace operation activities. 

\h Reflects grants and loan subsidies that countries use to finance
purchases of U.S.  defense items and the value of U.S.  items and
services sold or donated to other countries. 

Sources:  GAO analysis of DOD's Future Years Defense Program data for
fiscal years 1996 to 2001, DOD, EUCOM, Department of State, and the
President's Budget for Fiscal Year 1998. 

Since the end of the Cold War, the funding for some presence
approaches has changed (see table 2.6), with some increasing and
others decreasing, based on our comparison of available comparable
data. 



                               Table 2.6
                
                Changes in Funding for Selected Presence
                    Approaches, Fiscal Years 1989-96

                         (Dollars in billions)

                             Fiscal year    Fiscal year        Percent
Approach                    1989 funding   1996 funding         change
-------------------------  -------------  -------------  -------------
Forward-based forces             $27.387        $16.354            -40
Prepositioning                   0.641\a          0.957            +49
Exercises\b                        0.287          0.379            +32
Military interaction
 International                     0.046          0.039            -15
 Military Education and
 Training
Counterdrug operations             0.314          0.817           +160
----------------------------------------------------------------------
\a Reflects fiscal year 1992 funding because comparable data for
prior years was not available. 

\b Reflects funding for Joint Chiefs of Staff sponsored exercises. 

Sources:  DOD, Department of State, the President's Budget for fiscal
years 1990 and 1998, and GAO's analysis of DOD's Future Years Defense
Program data. 

The changes in table 2.6 occurred for various reasons.  For example,
the reduction in funding for forward-based forces is directly linked
to DOD's force drawdown.  Increases in funding for prepositioning
reflect the net increase in cost of operating and maintaining
prepositioned equipment primarily at land-based locations.  Funding
for Joint Chiefs of Staff exercises has increased as the number of
exercises has increased and their nature shifted from large global to
smaller regionally focused scenarios that among other things, foster
relationships with other nations' military forces.  The International
Military Education and Training Program funding decreased from $46
million in 1989 to $22 million in 1994 because of a perception that
it was duplicative of another program, before increasing to its 1996
level of $39 million.  Since 1989, considerable national attention
has been given to stopping the flow of illicit drugs, resulting in a
significant increase in counterdrug operations and related funding. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 2:5

DOD noted the report highlighted the costs of supporting presence
overseas, but failed to assess the benefits.  DOD emphasized that the
return on investment in terms of deterring major conflict and shaping
the security environment is substantial.  We agree that the benefits
of maintaining overseas presence are significant.  The report
specifically states that presence is a key component of U.S. 
strategy that CINCs rely on to accomplish important national security
objectives.  It also discusses, in some detail, the CINCs views on
the importance and impact of presence.  We present cost information
on the various presence approaches to show the extent of DOD's
investment in the forces and activities used to achieve presence, and
do not contrast the costs with the benefits. 


REGIONAL SECURITY ENVIRONMENTS
AFFECT CINCS' VIEWS ON PRESENCE
============================================================ Chapter 3

CINC officials view all national security objectives and presence
approaches to be important, but differ on their relative importance
based on the security environment in their respective regions. 
Officials at two regional commands cite initial crisis response and
deterrence as the most important objectives, officials at one command
cite deterrence, officials at one command consider all four
objectives equally important, and officials at the other command cite
reassurance and influence.  To meet these objectives, officials at
some commands prefer to use various types of forces and others prefer
military interaction. 


   CINC OFFICIALS VIEW PRESENCE
   OBJECTIVES AND APPROACHES
   DIFFERENTLY
---------------------------------------------------------- Chapter 3:1

Using an analytical hierarchy decision model, we solicited the views
of officials from the five regional CINCs on national security
objectives related to presence and on presence approaches. 
Specifically, we asked them, through a series of questions, to reach
consensus on the relative importance of initial crisis response,
deterrence, reassurance, and influence as these objectives related to
the security environment in their region.  Using the same
methodology, they also provided consensus views on the relative
importance of the seven presence approaches to achieving the
objectives.  Table 3.1 shows the results of our discussions. 



                                    Table 3.1
                     
                       Objectives and Approaches That CINC
                     Officials Consider to be Most Important

            ACOM          CENTCOM       EUCOM         PACOM         SOUTHCOM
----------  ------------  ------------  ------------  ------------  ------------
Objective
--------------------------------------------------------------------------------
Initial     X             X                           X
crisis
response

Deterrence  X             X             X             X

Reassuranc                                            X             X
e

Influence                                             X             X


Approach
--------------------------------------------------------------------------------
Forward-                                X             X
based
forces

Routinely                 X
deployed
forces

Temporaril  X
y
deployable
forces

Prepositio                X
ning

Exercises

Military                                X                           X
interactio
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Foreign
military
assistance
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Officials from regional commands view all national security
objectives and presence approaches to be important, but differ on
their relative importance.  In determining their most important
objectives and approaches, we asked CINC officials to base their
assessments on factors such as threat, geographic characteristics,
relationships with foreign governments and militaries, U.S. 
commitments, and the availability of U.S.  forces.  The following
sections describe their specific views. 


   ACOM AND CENTCOM OFFICIALS VIEW
   INITIAL CRISIS RESPONSE AND
   DETERRENCE AS EQUAL IN
   IMPORTANCE
---------------------------------------------------------- Chapter 3:2

ACOM and CENTCOM officials consider the same objectives to be most
important for their regions, but differ on the approaches they think
are most important to achieve these objectives. 


   ACOM
---------------------------------------------------------- Chapter 3:3

Command officials cite initial crisis response and deterrence as the
command's top objectives because the Command is primarily concerned
about dealing with regional economic stagnation and political
instability.  The crises it has to deal with usually relate to
humanitarian assistance, migrant operations, and counterdrug
operations, not military threats.  An example of such crises is the
refugee migration in Cuba that was concurrent with the loss and
restoration of democracy in Haiti.  According to Command officials,
ACOM's deterrence efforts focus on conducting counterdrug operations
and monitoring submarines of the former Soviet Union.  These
officials consider temporarily deployable forces to be ACOM's most
important approach for achieving initial crisis response and
deterrence because such forces, especially naval and ground forces,
provide the flexible capability the Command needs. 


   CENTCOM
---------------------------------------------------------- Chapter 3:4

CENTCOM officials identify initial crisis response and deterrence as
most important because of the potential for a major regional
conflict.  They stated that the Command's primary focus is to deter
conflict.  If deterrence should fail, the Command wants to limit the
intensity of the conflict, and maintain the ability to prevail in
combat.  The Persian Gulf is their primary area of concern because of
its substantial oil resources and key maritime routes.  According to
CENTCOM officials, Iraq and Iran pose threats to the flow of oil from
the region to world markets and are involved in the proliferation of
weapons of mass destruction and terrorism.  In addition, other crises
could arise.  For example, CENTCOM is concerned that South Asia
border disputes and competition for resources between Pakistan and
India may escalate. 

CENTCOM officials consider routine deployments, especially naval
deployments, and prepositioned equipment to be the most important
approaches to provide initial crisis response and deterrence. 
Because the Command has few forward-based forces, deployments of
forces to the region are considered by these officials to be the best
deterrent to hostilities.  They said political considerations
constrain CENTCOM from having more than 2,800 personnel forward-based
in the area.  However, with routine and temporary deployments, the
number of U.S.  forces in the region at any given time can be 10,000
to 20,000.  These deployed forces usually include a carrier battle
group, an amphibious ready group, and Air Force aircraft.  Command
officials consider prepositioned equipment, located both afloat and
ashore, to be important because it provides the necessary military
equipment and ensures regional access for forces deploying into the
region, thereby reducing risk and shortening the response time. 


   EUCOM CONSIDERS DETERRENCE TO
   BE MOST IMPORTANT
---------------------------------------------------------- Chapter 3:5

EUCOM officials consider deterrence to be the Command's most
important presence objective.  Although they did not expect a major
regional conflict to occur in the region, these officials noted that
a number of lesser regional conflicts are possible due to
instability.  For example, they noted that the North Atlantic Treaty
Organization members of Greece and Turkey still dispute territorial
borders.  Also, the Balkan countries in Eastern Europe may continue
to be unstable for the rest of the decade.  Furthermore, the Middle
East continues to be a potential trouble spot.  Regional instability
may also occur as communist countries of the former Soviet Union,
among other things, undergo severe economic turmoil, while democratic
reforms remain under attack. 

Despite the drawdown in its forward-based forces, EUCOM officials
consider the 108,301 active military forces in EUCOM to be the most
important approach to achieve deterrence.  In their view, the basing
of these forces in EUCOM's region are a visible reinforcement of U.S. 
commitment to the area.  In addition, forward basing is the primary
means by which EUCOM accomplishes its next most important approach,
military interaction.  Command officials view military interaction as
important for deterrence because they promote stability through
military-to-military contacts such as peace operations, humanitarian
assistance, and the International Military Education and Training and
Partnership for Peace programs.  According to DOD officials, in areas
where forward basing is not available, such as Eastern Europe, or is
not economically or strategically vital, such as Africa, they believe
conflict is deterred through humanitarian assistance, exchange
programs, and other interaction activities. 


   PACOM VIEWS ALL SECURITY
   OBJECTIVES AS EQUALLY IMPORTANT
---------------------------------------------------------- Chapter 3:6

PACOM officials believe that initial crisis response, deterrence,
reassurance, and influence are equally important.  PACOM officials
emphasized the need to balance these objectives with a proper mix of
forward-based forces, routinely deployed forces, prepositioned
equipment, and military interaction. 

PACOM remains concerned about North Korea's uncertain intentions. 
However, PACOM is focused on nurturing bilateral relationships with
countries in its region as a means of advancing security and
stability throughout the region.  According to Command officials,
China's importance to the region and the world is unquestionable. 
China is a permanent member of the U.N.  Security Council with vast
economic potential and a nuclear weapons state, with a large
conventional force.  PACOM sees a potential for both cooperation and
disagreement with this growing power, and articulated a desire to
work together with China when there are common interests and to
resolve problems when there are disagreements.  PACOM officials
viewed engaging China as a means of building contacts that enable
cooperation and continued dialogue.  They also expressed concern
about India and its ongoing conflicts with Pakistan and Russia with
the political changes it is undergoing.  Some other concerns in
PACOM's area are the proliferation of weapons of mass destruction,
drug trafficking, and increasing competition for limited resources. 

PACOM officials consider forward-based forces to be PACOM's most
important approach.  Their presence allows for a rapid response,
demonstrates commitment, and provides the personnel for many of the
presence activities.  PACOM, in 1996, had about 307,000 military
personnel assigned to its command, including about 80,000 that are
based in South Korea and Japan.  In 1995, PACOM personnel were
engaged in over 1,900 presence activities.  According to Command
officials, many of these activities involve frequent contact between
U.S.  and foreign military personnel to increase U.S.  influence in
the area.  For example, in 1995, PACOM conducted a total of 147 joint
and combined exercises, 634 port calls, and 55 multilateral seminars
and conferences that involved U.S.  and foreign military personnel. 


   REASSURANCE AND INFLUENCE ARE
   MOST IMPORTANT TO SOUTHCOM
---------------------------------------------------------- Chapter 3:7

SOUTHCOM officials consider reassurance and influence most important. 
According to Command officials, SOUTHCOM's desire is to promote
stability in the region through efforts such as strengthening fragile
regional democracies and combating the flow of illicit drugs.  While
the security environment in Latin America has become more stable in
recent years as countries have transitioned to democracies and
civilian control of the military, these officials believe that many
of the new democracies are maturing and require reinforcement.  In
their view, the threats to regional stability include drug
trafficking, governmental corruption, insurgencies, border disputes,
crime, and economic instability. 

SOUTHCOM officials consider military interaction to be the most
important approach because maintaining military-to-military contact
with foreign countries in the region is key.  Some SOUTHCOM
interaction activities include humanitarian projects such as
providing medical care, constructing roads, and building schools;
counterdrug operations; and peace operations.  Because SOUTHCOM has
relatively few forward-based personnel, Command officials note that
temporarily deployed forces from the continental United States
provide the needed capability to interact.  For example, according to
Command officials, over 56,000 personnel deployed to SOUTHCOM during
fiscal year 1995, and about 40 percent of those deployed were reserve
forces. 


   AGENCY COMMENTS AND OUR
   EVALUATION
---------------------------------------------------------- Chapter 3:8

DOD stated that our analytical approach had serious methodological
limitations.  By grouping forces and activities in a single list of
presence approaches, DOD stated that the report mixes means (forces
and infrastructure overseas) and ways (how these forces and
infrastructure are employed).  In DOD's view, this analytical
construct, manifested in the Expert Choice model used to obtain CINC
officials' views on the relative importance of approaches, is
misleading and could lead a reader to incorrectly conclude that
different approaches to presence are equivalent and interchangeable. 

Our grouping of forces and activities in a single list of presence
approaches is valid because it reflects the broader nature of
presence, as depicted in the 1996 National Security Strategy and
other DOD documents.  The Expert Choice model is an analytical
hierarchy decision model that can be used to make comparisons.  For
this study, we used the model as a tool to obtain CINC officials'
views on the relative importance of presence approaches.  We
presented these views in a factual manner in the report and did not
state conclusions about whether the approaches were equivalent and
interchangeable. 

Additional annotated evaluations of DOD's comments are presented in
appendix I. 


DOD NEEDS TO ASSESS PRESENCE TO
DETERMINE WHETHER MORE
COST-EFFECTIVE ALTERNATIVES EXIST
============================================================ Chapter 4

DOD does not have a specific process for determining CINC presence
requirements.  Most of the forces used for presence are also needed
to meet warfighting needs and other purposes.  DOD generally assigns
forces to the CINCs based on these requirements, rather than
presence.  Currently, DOD does not compile comprehensive information
on all CINC presence approaches as a basis for analyzing the
effectiveness of these approaches or whether more cost-effective
alternatives might exist.  While the Joint Staff has proposed a
process on peacetime engagement--activities that forces engage in
during peacetime to shape the international security environment, it
has not addressed how DOD will use this information to assess the
effectiveness of all approaches that provide presence or consider
alternatives.  Three CINCs are beginning to develop information on
their presence activities that could be useful to DOD in assessing
presence. 


   DOD DOES NOT HAVE A SPECIFIC
   PROCESS TO DETERMINE PRESENCE
   REQUIREMENTS AND ALLOCATE
   RESOURCES
---------------------------------------------------------- Chapter 4:1

In general, DOD provides the forces and related funding that CINCs
use for presence activities in their regions.  While DOD has a
specific process for determining warfighting requirements and
allocating forces to meet these requirements, a similar process for
all presence requirements does not exist.  As part of its strategic
planning system, DOD assesses wartime requirements and develops a
joint strategic capabilities plan that identifies the mix of forces
and capabilities that will be available to each CINC.  Most of the
forces needed in wartime are the same U.S.-based and forward-based
forces that CINCs use to meet security objectives.  DOD generally
assigns forces to the CINCs in peacetime based on wartime
requirements and other needs, such as diplomatic commitments, rather
than presence.  Such decisions occur through processes or actions
that are usually independent of each other, such as broad defense
reviews, updates of DOD policies on force deployments, or reviews of
specific CINC requests, as indicated by the following examples: 

  DOD determined the numbers of forward-based forces and quantities
     and locations of prepositioned equipment as part of its 1993
     bottom-up review of post-Cold War defense needs. 

  On a periodic basis, DOD reviews and updates its Global Naval Force
     Presence Policy.  According to DOD officials, this policy
     specifies the frequency of routine deployments of naval forces
     during peacetime to the various CINCs' regions.  It denotes the
     number of aircraft carriers, amphibious ready groups, surface
     combatants, and Tomahawk missiles that will be allocated to the
     CINCs, taking into account factors such as the equitable
     distribution of assets and the CINCs' requirements. 

  The Chairman of the Joint Chiefs of Staff annually publishes the
     Chairman's sponsored exercises that will be conducted.  On an
     annual basis, the CINCs submit requests for exercises in their
     region.  The Joint Staff, in consultation with the military
     services, appropriate government agencies, and CINCs, evaluates
     the availability of resources to meet the CINCs' requests,
     resolve resource conflicts, and establishes an exercise program
     for a set period of time, usually 3 years.  Based on this
     program, DOD, through the military services, allocates the
     necessary forces. 

Some presence approaches, such as military interaction and foreign
military assistance, do not require forces to be formally allocated
for all of their activities.  For example, CINCs often use
forward-based personnel to carry out military-to-military contacts or
to conduct other interaction activities.  These activities are
determined by the CINCs or others and are not part of any formal DOD
process.  For example, the foreign military assistance programs
provide funds, equipment, and training rather than forces.  CINC
officials, working with Department of State officials in their
region, help develop assistance requirements and comment on annual
requests for such things as the financing, sale, or transfers of U.S. 
defense items and services. 


   DOD DOES NOT ROUTINELY EVALUATE
   WHETHER MORE COST-EFFECTIVE
   ALTERNATIVES TO PROVIDE
   PRESENCE MIGHT EXIST
---------------------------------------------------------- Chapter 4:2

DOD does not currently collect and analyze comprehensive information
on all CINC presence requirements and the CINCs' use of presence
approaches.  For example, DOD does not collectively review presence
requirements and objectives, or evaluate the effectiveness of the
approaches that CINCs use to meet security objectives.  Nor does DOD
routinely consider, as part of a comprehensive analysis, whether more
cost-effective alternatives might exist by developing and comparing
different combinations of forward-based forces, routinely and
temporarily deployed forces, prepositioning, interaction activities,
and military assistance. 

Such assessments would allow DOD and the CINCs to make judgments
about the level and nature of effort--forces, activities, and
funding--that is expended to provide presence, and determine whether
adjustments should be made.  For example, in 1993, we reported that
there are opportunities to use less costly options to satisfy many of
the carrier battle groups' traditional roles, including presence.\1
These options include relying more on increasingly capable surface
combatants and amphibious assault ships and/or by employing a more
flexible carrier deployment strategy.  In evaluating alternative
presence approaches to meet security objectives, DOD could examine
the following types of questions and perform the analysis necessary
to answer them. 

  Is the current level and mix of approaches in a given region
     consistent with security objectives or should adjustments be
     made, such as increasing, decreasing, or eliminating the use of
     certain approaches? 

  Can CINCs accomplish security objectives by using a different mix
     of aircraft carrier, surface combatant, air power, and ground
     force deployments than is currently employed? 

  Given the significant cost of forward basing, what are the
     implications of increasing the number of temporary deployments,
     especially reserve forces, and reducing the number of
     forward-based forces? 

  Since officials at some CINCs viewed interaction to be among the
     most important presence approaches, are there opportunities to
     increase the level of interaction and adjust the use of other
     presence approaches? 

  Does the availability of satellites and other information
     technology offer DOD the opportunity to reduce the physical
     presence of U.S.  forces--forward-based or deployed? 


--------------------
\1 Navy Carrier Battle Groups:  The Structure and Affordability of
the Future Force (GAO/NSIAD-93-74, Feb.25, 1993). 


   DOD AND CINC PLANNING EFFORTS
   ON PRESENCE, IF EXPANDED,
   PROVIDE AN OPPORTUNITY TO
   ASSESS ALTERNATIVES
---------------------------------------------------------- Chapter 4:3

The Joint Staff has recommended a planning process on the engagement
aspect of presence, but its scope as currently proposed, is limited. 
Three of the CINCs have initiated efforts to compile information that
may be useful to DOD if it expanded its proposed planning process to
include assessing presence requirements, effectiveness of all current
approaches, and whether more cost-effective alternatives might exist. 
DOD and the CINCs' efforts are described below. 


   DOD
---------------------------------------------------------- Chapter 4:4

In May 1995, the Commission on Roles and Missions of the Armed Forces
recommended that DOD revise its process for determining CINC presence
requirements and experiment with new approaches for achieving
presence objectives.  In response, the Secretary of Defense, in
August 1995, asked the Chairman of the Joint Chiefs of Staff and the
Under Secretary of Defense for Policy to conduct a comprehensive
review of presence objectives and related requirements processes. 
The Joint Staff's Joint Warfighting Capability Assessment team for
regional engagement and overseas presence led this review,
establishing a working group with participation from CINC and
military service representatives. 

Based on its review, the Joint Staff working group concluded that DOD
does not have complete information on the CINCs' presence activities
and proposed a process to integrate requirements for CINC engagement
activities into DOD's strategic planning and budgeting systems. 
According to DOD, this process will provide (1) guidance on
objectives, tasks, priorities, and resources related to these
activities and (2) improve DOD's ability to resource engagement
requirements and make decisions on engagement alternatives.  However,
the scope of the process as currently proposed is limited because it
does not address how DOD will comprehensively assess the
effectiveness of all presence approaches or whether cost-effective
alternatives exist to the current levels and mixes of forces and
activities that provide presence.  As of May 1997, the Office of the
Secretary of Defense was reviewing the Joint Staff's proposal. 


   EUCOM
---------------------------------------------------------- Chapter 4:5

In 1994, EUCOM initiated a Theater Security Planning System to (1)
help link presence activities to U.S.  National Security Strategy
objectives and implement the CINC's theater strategy, (2) make the
best use of limited resources for presence, and (3) assess the
effectiveness of its presence efforts.  This system involves
developing a theater plan with supporting regional and country plans
and evaluating presence activities using largely subjective measures
of effectiveness.  At the time of our visit, EUCOM had developed its
theater plan and was working on the regional and country plans. 
According to DOD officials, EUCOM completed its first effectiveness
analyses in late 1996. 


   PACOM
---------------------------------------------------------- Chapter 4:6

PACOM has been capturing information on its presence activities with
foreign militaries since fiscal year 1993.  While the Command
believes this information has provided a good history, PACOM decided
it needed a planning tool that would synchronize component activities
and assist senior leaders in making tough choices.  The tool will
also allow the Command to apply more objective analytical rigor. 
According to DOD officials, PACOM's new Cooperative Engagement
Planning System uses past information and CINC priorities to develop
future presence plans. 


   CENTCOM
---------------------------------------------------------- Chapter 4:7

CENTCOM determines how to meet its presence needs as part of its
total regional requirements determination process.  Its methodology
for deciding presence needs includes consideration of the CINC's
judgment and information from key regional documents such as the
CINC's Theater Strategy, the results of warfighting analyses, the
Command's Strategic Plan, exercise program, country goals, current
access plan, and security assistance blueprint. 


   CONCLUSION
---------------------------------------------------------- Chapter 4:8

Given the changing security environment and diversity among CINC
operating areas, DOD faces a challenge in determining the appropriate
level and mix of forces and activities to provide overseas presence. 
While we agree that DOD's efforts to address the engagement aspect of
presence are an important first step, further measures are needed to
develop a viable planning and evaluation process that encompasses all
presence approaches.  Until DOD makes a commitment to collectively
assess the CINCs' presence requirements, the effectiveness of all
presence approaches, and alternatives to existing levels and mixes of
forces and activities, it will be unable to determine whether
alternatives exist that could meet national security objectives more
cost-effectively. 


   RECOMMENDATION
---------------------------------------------------------- Chapter 4:9

We recommend that the Secretary of Defense, in coordination with the
CINCs and the Secretary of State, compile and analyze information on
CINCs' presence requirements and approaches in a manner that would
allow assessments of the effectiveness of current levels and mixes of
forces and activities, and whether alternatives exist that could
achieve national security objectives more cost-effectively. 


   AGENCY COMMENTS AND OUR
   EVALUATION
--------------------------------------------------------- Chapter 4:10

DOD concurred with our recommendation.  However, DOD disagreed with
our conclusion that DOD does not routinely consider whether more
cost-effective alternatives exist to meet presence requirements.  DOD
said it already makes decisions about the resources expended to
provide presence and regularly assesses whether adjustments should be
made.  Specifically, DOD stated its planning system provides an
approach to maintain warfighting readiness, deterrent posture and
crisis response capability, and determines the location and
deployment of forces and the number of personnel assigned overseas. 
DOD said that these results are reflected in its budgeting system
that allocates resources for forces.  Under these systems, DOD stated
that it establishes priorities and considers the cost-effectiveness
of alternatives.  In agreeing with our recommendation, DOD said it is
developing a planning process to review peacetime
engagement--activities that forces engage in to shape the security
environment. 

We agree that DOD, through its planning and budgeting systems, makes
decisions that affect presence.  However, as DOD notes, these
decisions relate to forces based on warfighting, deterrence, and
crisis response needs.  Presence encompasses a broader set of
national security objectives, including deterrence, crisis response,
reassurance, and influence, and is accomplished through a variety of
forces and activities.  DOD's systems do not currently include a
mechanism to review presence requirements and approaches, and to
evaluate the appropriate level and mix of forces and activities. 
While DOD's efforts to address the engagement (activities) aspect of
presence are an important step, we believe that DOD should integrate
and analyze information on all presence approaches.  Unless DOD
includes the entire range of forces and activities available to
achieve presence, it will be unable to determine whether alternatives
exist that could achieve security objectives more cost-effectively. 

Additional annotated evaluations of DOD's comments are presented in
appendix I. 




(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================ Chapter 4



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The following are GAO's comments on the Department of Defense's (DOD)
letter, dated May 9, 1997. 


   GAO COMMENTS
--------------------------------------------------------- Chapter 4:11

1.  We modified the text to clarify the finding estimate for
forward-based forces and to acknowledge that host nations contribute
to the support of U.S.  forces overseas. 

2.  We believe that the report points out the benefits of presence. 
For example, chapter one points out that overseas presence is a key
component of U.S.  strategy that Commanders in Chief (CINC) rely on
to accomplish important national security objectives.  Also, chapter
three discusses the importance that CINC officials place on presence. 
We presented cost information on the various presence approaches to
show the extent of DOD's investment in this area.  We did not
contrast the cost and benefits associated with providing presence. 

3.  We did not conclude that DOD should return forces that are
permanently forward-based to the United States, and therefore, did
not evaluate the related cost implications.  Rather, we recommended
that DOD evaluate different levels and mixes of presence approaches,
such as different combinations of forces, prepositioning, interaction
activities, and foreign military assistance. 

4.  Because DOD is retaining carriers to meet presence needs, beyond
those required for warfighting, we believe it is relevant to discuss
the budgetary implications of this decision and, therefore, include
information on carrier costs.  We cited our previous study because it
is directly related to the issues discussed in this report.  As
stated in the previous study, we do not advocate abandoning the role
and employment of carrier battle groups for presence and crisis
response missions, but continue to believe that there are
opportunities to rely less on these groups and use other, less costly
types of forces for expanded roles in the new security environment. 

5.  We modified the text to reflect DOD's comments. 

6.  We did not evaluate DOD's specific responses to these five
questions because we posed them as hypothetical questions that DOD
could examine in evaluating alternative presence approaches.  If DOD
decides to make such an assessment, as we recommended, we would
expect DOD to examine those type of questions and perform the
analysis necessary to answer them. 

7.  We modified the text to clarify the extent of DOD's engagement
planning. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   NATIONAL SECURITY AND
   INTERNATIONAL AFFAIRS DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

Sharon L.  Pickup, Assistant Director
Alan M.  Byroade, Senior Evaluator
Craig A.  Hall, Senior Evaluator
James F.  Reid, Senior Evaluator


   NORFOLK FIELD OFFICE
-------------------------------------------------------- Appendix II:2

Richard G.  Payne, Evaluator-in-Charge
Leslie M.  Gregor, Senior Evaluator
Paul A.  Gvoth, Jr., Operations Research Analyst

*** End of document. ***