DoD Budget Goes to Hill

His defense budget calls for $250.7 billion in budget authority and $247.5 billion in outlays. Budget authority is the legal ability Congress gives DoD to spend money, outlays are what the department actually spends.

Defense Secretary William Cohen said in a news conference the budget covers his three priorities for DoD: allowing the services to attract high quality people, ensuring high force readiness and implementing force modernization.

DoD does not plan major changes in force structure. The budget allows for 1,431,000 active duty service members and 892,000 service members in the Selected Reserves. DoD civilian manpower will be about 772,000. Plans call for a further drop in the number of civilians to 718,000 by fiscal 2003.

The fiscal 1998 budget funds an active force of 495,000 soldiers, 391,000 sailors, 174,000 Marines and 371,000 airmen.

Some major quality of life initiatives are funded under the budget. While the pay raise is set for 2.8 percent in fiscal 1998, DoD is asking for 3 percent raises each year through fiscal 2002. DoD will increase the Family Housing Improvement Fund.

"We're finding that in the private sector, they are able to squeeze about 30 percent more [housing] than we can achieve currently," Cohen said. "So we're going to call upon that fund and use the leverage we can get out of turning to the private sector to create more housing."

TRICARE will cover approximately 95 percent of the beneficiaries by the end of fiscal 1998, Cohen said. "We project that there will be an out-of-pocket savings for those E-4 and below of $170 a year," Cohen said, "and for those E-5 and above, a roughly $240 per year saving."

Under the president's budget, the Army will receive $60.1 billion for fiscal 1998. The Navy and Marine Corps is slated for $79.1 billion and the Air Force, $75 billion. Defense agency budgets and other defense spending total $36.4 billion.

The budget does not "ramp up" modernization as much as the department would like. "We had a 53 percent drop in procurement from the height of the Cold War," Cohen said. He said the department could afford a procurement "holiday" because with the end of the Cold War, the United States could afford to cancel or defer systems.

Also because of downsizing and force structure reduction, the services culled older, less-capable systems from the inventory. But the time is past for this holiday. "We cannot afford to delay the [modernization] ramp up any longer," Cohen said.

A senior Defense official said DoD wanted to begin increasing procurement two years ago, but that force readiness really was paramount. DoD has budgeted $42.6 billion for procurement in fiscal 1998 and would like to see that number rise to around $60 billion by fiscal 2002, officials said.

DoD officials are looking to the results of the Quadrennial Defense Review, due May 15, for much of the savings that will go toward modernization. Cohen said some review recommendations may be plugged into the fiscal 1998 budget, but it is unlikely. The fiscal 1999 DoD budget will be based on the review and the recommendations of the National Defense Panel.

The split on the $42.6 billion procurement request gives the Air Force $15.3 billion, the Army $6.7 billion and the Navy and Marine Corps $18.1 billion.

In the next fiscal year, DoD major procurements include the Air Force C-17 airlifter, E-8B JSTARS surveillance aircraft, global positioning satellites and Titan IV rockets. The Navy will buy F/A-18E/F aircraft, three Burke-class destroyer, the new attack submarine and the V-22 tilt-rotor aircraft. The Army will get the Longbow Apache helicopter, Patriot PAC-3 missiles, M-1 tank and Bradley fighting vehicle upgrades as well as the single channel ground airborne radio system.

Part of the problem is the continuing mission in Bosnia and an upturn in operations in Southwest Asia in response to Iraqi provocations. DoD will ask Congress for a $2 billion supplemental spending bill to fund the stabilization mission in Bosnia and the operations in Iraq.

"Ongoing contingencies are funded in the budget," the senior DoD official said. "It wasn't until November [1996] that President Clinton approved U.S. forces taking part in the stabilization force."

The official said DoD needs action by the beginning of April on the supplemental bill. He said DoD will have to "rob Peter to pay Paul" if the bill is not approved. DoD will be forced to take money from fourth quarter operations and maintenance funds to pay for the operations.

Operations and maintenance funding goes to $93.7 billion in fiscal 1998, up from $92.9 billion in fiscal 1997. This mirrors the instructions then-Secretary William J. Perry gave when forming the budget.

"[The] first priority is readiness, your second priority will be quality of life, third priority is complete the downsizing without breaking anything and then, finally, if you have money left over, put as much as you can into modernization," the senior official said.

Operations and maintenance is at the heart of readiness, so it remains high in fiscal 1998 and through the Future Years Defense Plan. The fiscal 1998 budget request funds 800 miles per year for Army tanks with 14 tactical hours per crew per month. In the Navy, O&M funds 23.7 tactical hours per aircrew per month with 50.5 steaming days per quarter for the deployed fleet and 28 days for the nondeployed fleet. In the Air Force, O&M funds 18.7 tactical hours per crew per month. All these numbers drop minutely, but officials said this is because more service members are training using state-of-the-art simulation.

"There is no degradation of training," said Cohen.

Research and development dips slightly through the Future Years Defense Plan due to high-ticket items like the Air Force's F-22 and the Navy's new attack submarine moving from research into procurement. DoD is asking for $35.9 billion for research and development in fiscal 1998. The Navy is slated for $7.6 billion, the Air Force for $14.4 billion and the Army, $4.5 billion.

DoD wants research and development money for the Army's Comanche helicopter, Crusader artillery system and systems to "digitize" the battlefield. The budget funds research into the Navy's arsenal ship and ship self-defense systems. In the Air Force, research money goes to the Milstar satellite communications system, the space-based infrared system and the evolved expendable launch vehicle.