Related Items Full Coverage: White House Releases New Budget

By Miles Pomper and Richard H.P. Sia
LEGI-SLATE News Service
Monday, Feb. 2, 1998

President Clinton unveiled a $270.6 billion defense budget Monday that challenges Congress to make politically painful decisions and discourages lawmakers from adding funds for their favorite programs.

That squeeze could become even tighter if the United States launches a sustained military operation against Iraq or if costs of the next phase of the NATO mission to Bosnia are significantly higher than expected, Pentagon officials and outside experts said. Funding for those operations will be sought in a supplemental spending bill not included in the $271 billion total.

In addition, a new generation of weaponry continues to move from the development phase into production, creating heavier demands for procurement dollars with each new year.

Pentagon officials, following a blueprint laid out last year to ensure the affordability of weapons modernization plans, relied on the usual budgetary tricks -- reducing or deferring aircraft buys and trimming force structure -- but seemed barely able to scrape together enough for the 1999 fiscal year.

"All of the easy choices have been made," declared Defense Secretary William Cohen, discussing the first defense budget prepared at his direction. While U.S. forces have been pared and restructured to meet post-Cold War threats, Congress "has to face up to its responsibilities" to cut excess infrastructure and other overhead that do not contribute to military readiness, he said.

In particular, Cohen proposed two new rounds of military base closures in 2001 and 2005, estimating that the move would save at least $3 billion annually. "You need to have a greater reconciliation of what we have in force structure with what we have in infrastructure," he said.

Though he declined to speculate which facilities may be targeted, Cohen observed that "a substantial reduction" in the submarine fleet is planned over the next five years, "not a substantial reduction in pier space." Despite deep cuts in aircraft numbers since the Cold War, "there has not been a comparable reduction as far as bases are concerned," he added.

Cohen, a former Republican senator from Maine, tacitly acknowledged that his proposal will be fought bitterly on Capitol Hill, where a similar proposal was roundly defeated last year. But he cast the choice facing Congress as starkly as he could.

If lawmakers resist cutting excess overhead, "they will have to accept the responsibility for it, that they are going to send our sons and daughters into harm's way in the future with less than the best equipment ... and with less states of readiness," he said.

In his budget proposals to Congress, President Clinton asked for $265.5 billion in outlays for fiscal 1999, which begins Oct. 1. The request covers the amount the Department of Defense would spend in fiscal 1999 - - $252.6 billion -- plus $12.9 billion for the Department of Energy's management of the nuclear arsenal, and other expenses, including a 3.1 percent payraise for military and civilian personnel.

Last year's balanced-budget agreement set a ceiling of $271.5 billion in authorized spending on the Defense Department and related agencies. Clinton's actual request in defense budget authority of $270.6 billion represented a 1.1 percent decline in spending after accounting for inflation. Real growth in defense spending is not expected until fiscal 2001 but only by 0.9 percent, according to a five-year budget projection also released Monday.

Indeed, Pentagon officials expect defense spending over the next five years to be flat in inflation-adjusted terms as they hew closely to the strategy put forward in last year's Quadrennial Defense Review. That Pentagon document maintains current doctrine calling for the United States to have the ability to fight two major regional wars -- possibly in the Persian Gulf and Korean Peninsula -- nearly simultaneously.

Cohen made it clear that some shuffling of priorities was in order. Pressed by the need to spend more money on spare parts and training for current operations, he announced that $1 billion would be added to readiness accounts, specifically money for Navy depot maintenance, Air Force engine repairs and bonuses and other benefits to keep pilots from leaving for jobs in the private sector.

He also proposed spending $48.7 billion for procurement, a 7-percent increase over current spending and the first real increase in procurement funding since the end of the Cold War. But that amount is roughly $300 million below the $49 billion level set by last year's Quadrennial Defense Review, a figure Cohen pledged to Congress he would deliver.

"I fell a bit short," Cohen conceded.

Independent experts said they believe that bodes ill for the Pentagon's goal of raising weapons purchases by more than 25 percent over the next five years. "DOD will eventually have to make additional cuts in force structure, modernization plans or both, if it is to fit its plans within the budget levels" of the balanced-budget agreement, said Steven Kosiak of the Washington-based Center for Strategic and Budgetary Assessments.

Nonetheless, Cohen said flatly that he expects the "annual investment in new technologies and procurement" to reach $60 billion -- the amount sought by the previous defense secretary and chairman of the Joint Chiefs of Staff -- "by the year 2001." But, he added, "all of it is contingent upon getting the kind of savings we anticipate" from base closings and management initiatives.

In an apparent attempt to make the proposed base closings more palatable -- and head off renewed Republican criticism that Clinton has politicized the last round of closure decisions -- the Pentagon took pains to point out that any action would not occur until after a new president takes office.

"It's going to take place when this president and many in Congress are away -- so it's going to be a different set of actors," said a senior defense official.

While some members of Congress were quick to seize on the need for more funding to maintain the readiness of U.S. forces to engage in demanding overseas missions, they were not ready to agree that the money should come from shutting down more bases.

"I do harbor deep concerns regarding the readiness of U.S. forces and do not feel the budget has gone far enough," said Rep. Saxby Chambliss, R- Ga., a member of the House National Security Committee. But until the Pentagon makes cost-effective changes in its operation of maintenance depots, "I will have a difficult time accepting calls for more base closings from this administration," he said.

Chambliss echoed recent calls by House Speaker Newt Gingrich, R-Ga., to spend some of the projected budget surpluses on defense -- an unlikely prospect in the view of military officials and independent analysts.

Cohen defended the administration's defense budget priorities by asserting that he struck the right balance on readiness, force structure, modernization and overhead within a "zero-sum" spending plan.

"There are unlikely to be any increases in the future and we have to work within this balanced-budget agreement," he said. Because of this, Cohen issued this warning to lawmakers who may be inclined to add new programs or more spending to the defense budget, saying, "Any add-ons into one [military] service will necessarily come out of the hide of another service."

In the last three years, Congress has added nearly $20 billion to the administration's defense budgets, a Center for Strategic and Budgetary Assessments analysis shows.

To wring more money for new weapons programs and new initiatives, Cohen proposed slashing the number of civilian support personnel by opening nearly 200,000 jobs to competition from the private sector. Officials estimated that would reduce Pentagon employment by about 100,000 workers over the next five years.

And Cohen proposed relatively small cuts in the active-duty ranks to bring U.S. military strength in fiscal 1999 to 1.396 million uniformed men and women, compared to the current year's figure of 1.419 million. Although each service would be reduced in size, a proposed shift of an active Air Force wing to the reserves would occur by the end of 2003, eliminating roughly 6,000 additional Air Force personnel from active- duty rosters.

Overall, the proposed force structure would maintain 10 active Army divisions, 12 aircraft carriers and three active Marine Corps divisions through 2003. But the Navy would have fewer attack submarines (from 73 boats now to 50 in 2003) and surface ships (from 128 ships to 116) and the Air Force would have 12 active air wings instead of 13.

Pentagon officials said they expect to reap an unexpected windfall, with tamer inflation rates pushing down the costs of buying new weapons. That will give defense officials an extra $2.6 billion in purchasing power in fiscal 1999 -- and $21 billion over five years. These and other savings would be partly used to boost funding for the procurement of new weapons systems.

Among the winners in the procurement budget is Newport News Shipbuilding, which will get an additional $125 million next year if Congress approves Pentagon plans to speed up production of a new CVN-77 aircraft carrier. Pentagon officials said they moved up production in order to prevent laying off and then rehiring workers at the Virginia plant.

The shipyard lies in the home state of Sen. John Warner, R-Va., the second-ranking member of the Senate Armed Services Committee, and the most likely successor to Sen. Strom Thurmond, R-S.C., slated to relinquish his chairmanship after this year.

Other winners include contractors and service members tied to programs to counter the use chemical or biological weapons by terrorists and foreign governments. Responding to the call of a civilian defense panel that Congress created to study long-term defense strategy, Cohen proposed adding $1 billion over five years to defend Americans against the threat both within the United States and overseas.

Much of the increase would go for improved protective suits and masks and detection and decontamination systems; some money would also be spent on training National Guard and Reserve units to protect U.S. cities against attack.

Defense officials said their proposed $16.8 billion, five-year budget for missile defense programs reflects the increase recommended in the Quadrennial Defense Review. The requested budget authority for fiscal 1999 alone totals $4 billion.

Cohen also proposed accelerating spending on innovative technologies such as smart bombs and computer technology to help ground troops. He set aside funds to support efforts to protect "critical infrastructure" from electronic terrorists under a new Defense Information Assurance Program.

In addition, Cohen increased near-term spending for the V-22 Osprey, the tilt-rotor transport aircraft for the Marine Corps, even though the overall program was cut from 425 planes to 360.

Consistent with the QDR, Cohen said the three major programs for modernizing U.S. tactical aircraft were cut back in the five-year budget plan. The Air Force's F-22 program would be trimmed from 438 to 339 aircraft, the Navy's F/A-18E/F Super Hornet cut from 1,000 planes to as few as 548 and the proposed multiservice Joint Strike Fighter reduced from 2,978 to 2,852 planes -- with JSF procurement starting in fiscal 2005.

Cohen said he would hold off on purchases of the F/A-18 until he is convinced the aircraft's designers can correct the jet's tendency to dip one wing abruptly as the aircraft closed in on a target. He expressed confidence, however, that corrective action would not be too expensive.