Pay Up 3%, Contingencies Funded in DoD Budget

Clinton asked for a 3 percent raise in basic allowance for quarters and money to begin acquisition of new systems.

The Navy and Marine Corps get the lion’s share of the fiscal 1997 request with $74 billion. The Air Force receives $72 billion and the Army $59.8 billion. Defense agencies get $36.9 billion.

Defense Secretary William J. Perry said the budget preserves the U.S. military as the best in the world. The budget also fits under a balanced budget plan.

The fiscal 1997 request breaks with the past by budgeting for contingency operations. Officials are asking for about $1.1 billion -- $590 million for Southwest Asia and $541.7 million for Bosnia.

"For the Southwest Asia contingencies -- Southern Watch and Provide Comfort -- we’ve had four years of experience. We know how much that will cost. In fact, Congress told us to take those operations out of the contingencies and budget
for them," said a senior budget official. The money requested for Bosnia is an estimate and includes Implementation Force ground operations, Operation Deny
Flight and Able Sentry in Macedonia.

DoD's share of the federal budget continues to shrink. The department's budget request is only 3.2 percent of U.S. gross domestic product, the lowest percentage for the military since 1938, a senior defense official said. Defense as a share of federal outlays is 15.1 percent compared to 27 percent in the 1980s.

Defense officials stressed the military drawdown is largely complete, but the civilian drawdown continues. Officials said they are pleased with the way they have been able to draw down the military without adversely affecting readiness. They said DoD has reduced civilian strength by 260,000 with only 21,000 involuntary separations. The department needs to reduce civilian rolls by another 98,000 by 2001. Officials said they hope to accomplish these reductions as smoothly as they have previously.

The 1997 budget request continues the administration’s No. 1 priority of readiness, said Perry. Operations and Maintenance funds are set at $89.2 billion, down from $93.6 billion in fiscal 1996. Officials said the reduction is due to fewer troops who must be trained, fewer civilian employees who are paid from Operations and maintenance accounts and economies in health care.

Perry said the biggest danger to readiness -- funding contingency operations -- should be less of a problem if Congress goes along with the $1.1 billion slated for Southwest Asia and Bosnia.

The 1997 budget also enhances quality of life programs for service members. 

"It takes a lot longer to develop an armored battalion command sergeant major than it does to build a tank," the senior defense official said. The administration therefore considers keeping personnel happy and satisfied with military life as key to readiness.

Under the budget, there will be a 3 percent raise for military and civilian personnel. In fiscal 1998 through 2001, the budget calls for a 3.1 percent yearly raise for military personnel -- the highest the law allows. Civilians will receive 1.5 percent below the rise in the Employment Cost Index.

DoD officials say the proposed budget will maintain health care and commissary benefits for military personnel. The DoD health program is set for $9.4 billion, down from $9.8 billion in fiscal 1996. Again, fewer people need care, and DoD's switch from CHAMPUS to the TRICARE health maintenance organization program is saving money.

Family housing continues to be a hot button item for military personnel, officials said. The fiscal 1997 budget funds construction or replacement of 2,300 units and 13 support facilities. It further funds improvements in 4,100 units. The budget provides $20 million for family housing built in conjunction with the private sector. 

Other quality of life initiatives starting in the fiscal 1997 budget include the construction or modernization of 208 barracks, affecting 48,891 living spaces by 2001. The budget also funds building child development centers to raise the overall percentage of requirements covered to 60 percent. The DoD goal is to have spaces for 65 percent.

The budget request calls for more reserve component funding as part of a program to have guardsmen and reservists perform active duty missions. This will lessen the problem of high active duty perstempo, officials said.

In the budget, military construction drops to $5.3 billion from $6.9 billion. Research and development remains stable at $34.7 billion.

Procurement in the fiscal 1997 budget drops to $38.9 billion from $42.3 billion in 1996. Defense officials said the future years defense plan calls for a significant increase beginning in fiscal 1998.

Now is the time for DoD to start investing in weapons modernization, Perry said. DoD will hit the low point for procurement this year. Between fiscal 1990 and 1997, there will be a 60 percent real decline in procurement funds.

However, the future years defense plan calls for a 40 percent real increase through fiscal 2001.

Defense planners believe base realignment and closure process and acquisition reform savings will keep DoD procurement and modernization healthy. Fiscal 1997 will be the first year we realize savings in the BRAC process, Perry noted.

Basically, DoD will continue to invest in projects that give U.S. forces dominance rather than just an advantage,  Perry said. “We had air dominance during Desert Storm, and we liked it,” he said. Dominance also pertains to sea and  ground activities.

As a result, the department will invest in “leap ahead” systems such as the F-22 advanced tactical fighter and upgrade other systems such as the M-1 Abrams tank. DoD will invest $2 billion in the F-22 program in fiscal 1997 and $11.1 billion for 40 aircraft from fiscal 1998-2001. The budget calls for $600 million for the joint strike fighter in the fiscal 1997 budget.

Other procurement highlights are:
 q $1.1 billion for the V-22 tilt-rotor aircraft with another $3.9 billion from fiscal 1998-2001. This will buy 35 aircraft.
 q $2.6 billion for the F/A-18 E/F aircraft and $14.3 billion in the outyears. This will provide 162 aircraft.
 q Continued funding for the Comanche helicopter system.
 q $300 million for M-1A2 Abrams tank and $300 million for Bradley fighting vehicle system upgrades.
 q Money to upgrade early model F-14s and the B-1B bombers.

One possible bone of contention between the administration and Congress is $10 billion through 2001 for theater missile defense and only $2 billion for national missile defense. Perry said theater commanders say the missile threat exists now; DoD agrees and wants to field missile defense systems as quickly as possible. Because DoD does not see the same immediate threat on a national scene, national missile defense will remain a research project for at least three years.

Airlift and sealift are important parts of power projection for a largely U.S.-based force. DoD is asking for $1 billion for two sealift ships and $2.3 billion for eight C-17 airlifters.

In addition, DoD is asking for $3.4 billion for two Arleigh Burke-class destroyers and continued funding for aircraft carrier replacement.

DoD sees great advantages to enhancing battlefield awareness. The budget calls for funding unmanned aerial vehicles, the Army’s digitization of the battlefield project, Joint Surveillance Target Attack Radar System aircraft and Airborne Warning and Control System.

A senior defense official said the “fundamental colors” of the budget are to prevent threats from emerging, to deter threats that are out there and, if deterrence fails, to
defeat an enemy.

Objectives of the budget are to reach the personnel numbers of the Bottom-up Review, keep readiness high, identify and fund known contingencies and enhance quality of life programs. Finally, DoD wants to expand the modernization program.

A senior defense official said the budget process was enhanced this year through the input of the Joint Requirements Oversight Council. The council, chaired by the vice chairman of the Joint Chiefs of Staff, looks at requirements from the combat commanders and makes recommendations.

Perry said people remain the most important resource for the department. That is why he stressed quality of life issues and pay in the budget.