Deputy Secretary of Defense John P. White - Navy League Sea-Air-Space Exposition

Remarks Prepared for Delivery

Thursday, April 4, 1996

I appreciate the opportunity to talk with you today, because we share acommitment to a strong and capable Navy. How we maintain a strong and capablemilitary force takes up most of my waking thoughts right now. Next week, Iwill be testifying before Congress on our defense program for the rest of thiscentury.

Budget season is a critical time for the Department. As Mark Twain once said,"It is the will of God that we have Congressmen, and we must bear the burden."More importantly, budget season is a time to take some navigational readings onour national security -- where we are, and where we are going. That's what Iplan to do in my testimony, and I want to give you a preview.

The best way to measure where our Navy is today, is to go down to thewaterfront and take a look at our ships and sailors and Marines. And everytime I do that, I see why Bill Perry says that "America has the best damn Navyin the world." We do.

For example, I saw how we have the best power projection in theworld when I helo'd out to the USS WASP off of Norfolk last summer. Today, ouramphibious ships do a lot more than they did when I was in the Marines. Theseships bristle with advanced technology, highly trained professionals who knowhow to use it, and Marines who can quickly take charge of any situation,wherever we land them.

I have also seen how our country has the best force presence inthe world when I visited the guided-missile frigate USS SAMUEL B. ROBERTS lastDecember, and watched part of its workups for deployment to the Persian Gulf.I was just in the Gulf last week, and that's where the ROBERTS is today,serving with the GEORGE WASHINGTON carrier battle group.

With the flexibility and jointness of our forces today, you don't need to godown to the waterfront to see the Navy in action -- I saw the Navy making adifference in landlocked Bosnia. It was the "SeaBees" who arrived early andbuilt the base camp for the American 1st Brigade and others.

That's where we are with the Navy, and it's the same throughout the force.Today, in spite of the drawdown and all the turbulence that goes with it, ourforces are well-trained, well-equipped and ready. You see it whenever andwherever we have deployed them. In Bosnia, where our forces are giving peace achance to endure. In Haiti, where our forces have given democracy a chance totake hold. On the Korean peninsula and in the Persian Gulf, where we employstrong diplomacy and a strong show of force to deter aggressors without firinga shot. And in the Far East, where the Navy presence provided comfort toTaiwan and caution to China. As the Administration looked at the potentialcrisis across the Taiwan Strait, and our options to respond to the situation,it was certainly nice to know that our carrier task forces were available,ready and capable of doing whatever we sent them to do.

This year's defense program was put together to keep this force ready andcapable for whatever the future brings. Let me share with you some of the keythemes that guided us as we put together this program.

Readiness and Quality of Life

Two years ago, critics charged that our forces weren't ready. Youdon't hear that anymore. You don't hear it because, as the ClintonAdministration completed the post-Cold War drawdown, we maintained robustfunding for training, operations and maintenance. We closely watched thereadiness indicators for problems, and we took actions early when theyoccurred. Meanwhile, the President sought and received the funds andauthorities necessary to maintain and improve quality of life in the military,including the maximum pay increases, better housing, health care, and familysupport initiatives.

All of this has paid off in readiness indicators that are at -- or even above-- historically high levels. And high recruitment and reenlistment rates --indeed, FY94 was our third best recruiting year in the history of theall-volunteer force, and FY95 nearly matched it.

I do not take this good news for granted. Having first worked on the conceptof the all-volunteer force back in the late `60s, and seen it come to fruition,I know what a remarkable accomplishment it is.

So the drawdown is practically complete, and the FY97 defense plan continuesto protect readiness and quality of life, to maintain the quality force we havetoday. But that takes us to the future. Where are we going? How do we ensureAmerica has the best forces in the 21st Century?

Modernization

The Clinton Administration answers this question with a force modernizationplan that launches a robust procurement ramp-up for the next century. Over thelast two Administrations, the Defense Department was able to maintain modernequipment despite relatively low procurement levels by weeding out the olderequipment as we drew down the force. But with the end of the drawdown, thatmodernization reprieve is over. This year we have submitted a procurementprogram that starts at nearly $39 billion in FY97 and will increase steadilyover the five-year defense plan -- a 40 percent increase after inflation. As aresult, over the next five years, we will invest more than $250 billion in newequipment for the warfighters.

But it's not just how much we spend -- it's how we spend it that counts. Ourmodernization plan is designed to maintain our land, sea and air dominance. Wedo this through four technology strategies:

First, we are emphasizing leap-ahead technology to give us newwarfighting capabilities. Leap-ahead technology is the very heart and soul ofour major new systems such as the Joint Strike Fighter, the new attacksubmarine, the Commanche helicopter -- and two systems I saw in action atPatuxent Naval Air Station -- the F/A-18 E&F and the V-22 Osprey. If you'veever seen the V-22 take off, you know what I mean by leap-ahead technology.

Second, we are accelerating upgrades to existing systems where they arecost effective. That includes adding new advanced technology components toworkhorses such as the Bradley Fighting Vehicle, the F-14 aircraft, the Apachehelicopter. We are even extending the service of tactical trucks. The Abramstank upgrade will not only add 120mm guns and better armor, it will incorporatedigitization and position navigation equipment, making it the most effectivetank in history. Adding new technology sometimes creates whole new weapons.For example, our Joint Direct Attack Munitions program, or "J-DAM," is turningall of our 1,000-pound "dumb" bombs into "smart" bombs by fitting them withlittle receivers that will allow us to guide them with Global PositioningSatellites.

Third, we are investing in power projection systems, which are criticalto our power projection strategy. We are focusing primarily on improving liftcapabilities. Major priorities include multi-year procurement of the C-17aircraft; improved amphibious lift through the LPD-17, which Congressaccelerated; rapid sealift and prepositioning ships; and Aegis guided missilecruisers.

Finally, we are investing in technology to enhance battlefield situationawareness. This includes satellites, unmanned drones and airborne radarsthat can locate targets precisely; and communications and navigation systemsthat can synthesize all that collected information into one big picture of thebattlefield. Battlefield awareness was the key to battlefield dominance inDESERT STORM, and it will remain the key.

That's our modernization plan in a nutshell: smart weapons and smart choices.And if you look closely at our plan, I think you will agree. There are some inCongress who claim that $252 billion for modernization over five years is toolittle. I believe they are ignoring both the fiscal reality and the fiscalresponsibility of our modernization plan.

Let's face fiscal reality. Gone are the days when anybody could seriouslypropose to increase defense spending, cut taxes, and balance the budget -- allat the same time. Today, deficit reduction has taken precedence, and theAdministration and Congress have agreed to balance the budget in seven years.I myself have developed a series of balanced budget plans for Ross Perot andthe Concord Coalition. And I can see from my professional experience thatPresident Clinton has taken great pains to reach a balanced budget whileprotecting national security. The Clinton budget is built on both fiscalreality -- and national security reality.

Our defense modernization plan also takes fiscal responsibility into account.Rather than simply asking for more money, we are spending our money moreefficiently and effectively -- and passing the savings onto modernization.

Sources of Modernization Funding

We have significantly reduced the Department's civilian workforce, and thesereductions are now about 90 percent complete. We have completed hundreds ofbase closings and realignments, about 50 percent of the total approved by thefour BRAC Commissions. This year, for the first time, the savings frombase-closings will exceed the costs, and in the year 2000, we will have savingsof about $17 billion.

We also expect to realize substantial savings from reforming the defenseacquisition system, from buying more like the commercial sector and more fromthe commercial sector. We cannot pocket those economies yet, but we are seeingmeasurable savings in trial programs. For example, we used the new buyingpractices in the J-DAM program, the one that's turning "dumb" bombs into"smart" bombs. We saved about $28,000 per bomb. Since we're converting morethan 100,000 bombs, that means about $3 billion more for other modernizationprograms. And that's just the savings from one system. Indeed, acquisitionreform is changing the whole equation when it comes to defense procurementdollars -- by cutting our buying overhead, we're getting more modernization foreach dollar we spend.

Finally, we are cutting overhead and saving money by emulating the privatesector's practice of outsourcing -- that is, transferring functions previouslyperformed in-house to an outside provider. Numerous companies have turned toother service providers for information technology services, distribution,telecommunications, and more. We need to do the same. In fact, outsourcing isnot new to DoD. Many functions are already outsourced to some extent.

But we can do more. If done correctly, outsourcing will not only save usmoney, it will help us build the kind of organization we want DoD to be: anorganization that thrives on competition, innovation, responsiveness tochanging needs, efficiency and reliability. So outsourcing is one of myhighest priorities. To encourage the Navy and the other Services to look foroutsourcing and privatization opportunities, I recently signed a memorandumstipulating that they can keep the savings they achieve -- savings they canspend on readiness and modernization.

You might have gotten the impression from reading the newspapers that theService Chiefs disagree with our modernization plan -- that our ramp-uptrajectory should be steeper. But this so-called "disagreement" is a classiccase of a headline in search of a story. The fact is, the Service Chiefsunderstand the resource constraints that the Department, the government, andthe country are under. When pushed by members of Congress, the Chiefs may say,yes, they would like more money sooner. I would like more money sooner, too.I would also like a fat-free ice cream that tastes like Ben & Jerry's.

Wishful thinking aside, the Chiefs have all participated fully in developingthe Administration's FY97 budget and the five-year defense plan. The defenseplan incorporates many of their recommendations and concerns, and they supportit. Most importantly, they support the priorities I have described here todaythat are reflected in our defense program. Any disagreement about the contentand shape of the program is between the Administration and the Congress -- notbetween the military and civilian leadership.

Conclusion

I believe in this defense plan. It maintains the readiness of the force andthe quality of life of the troops. It provides for a modernization investmentsthat will maintain our air, sea and land dominance. And built in to the planare savings and efficiencies that will allow us to afford our modernizationinvestment. We have a strong program and the right priorities that will ensurethe defense and security of our nation into the next century. I look forwardto defending our defense plan, and I hope I can count on your support.

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