Cohen Stresses Strategy, Closures in '99 Budget

Cohen told reporters these were the operative words behind DoD's defense strategy. The strategy calls for the United States to shape the international environment, respond to the full spectrum of crises and start to prepare for the armed forces called for in Joint Vision 2010.

DoD based the budget on the requirements of the Quadrennial Defense Review, Cohen said. "This comprehensive analysis examines the threats and the risks the United States faces through 2015," he said. "The budget is also based on the Defense Reform Initiative. This study calls for us to adapt the best business practices from private industry, making DoD leaner and more agile."

Cohen said the fiscal 1999 budget puts into place the funding for the future force. The budget protects readiness and puts DoD on the road toward modernization. However, that road could abruptly stop if Congress does not approve two more rounds of the base realignment and closure process, he said.

He said the closure process has already closed or realigned 152 major DoD installations and 235 smaller ones. DoD has invested $23 billion to implement the recommendations of the 1988-1995 commissions. By fiscal 2001, these will yield a net savings of $14 billion with annual savings of $5.6 billion after that. The money saved goes directly to the modernization account, Cohen said. Without further closures, DoD cannot meet the modernization target of $60 billion per year recommended by military planners.

"There was a substantial reduction of submarines between the height of the Cold War and those recommended under the Quadrennial Defense Review," Cohen said. "Yet there has been no reduction in pier space." The same applies to ramp space for aircraft, the secretary said.

"I told Congress during my confirmation hearings that all the easy choices are gone," he said. If the department spends money on maintaining excess bases, it cannot afford modernization, and this will eventually impair readiness to the extent the United States "will send their sons and daughters into harm's way with less than adequate equipment and support," he said.

If Congress does not approve new rounds of base closures, then it must bear some of the responsibility when U.S. military readiness drops, Cohen said.

DoD has been worried about readiness and applied $1 billion extra toward spare parts, depot maintenance and pilot retention in the fiscal 1999 budget.

The budget also called for an extra billion dollars toward chemical and biological defense programs and puts funds toward the Defense Information Assurance Program. The program will protect vital information systems from attack. "States and some federal agencies have already started this," Cohen said. "We need to integrate this."

The fiscal 1999 budget is essentially a flat budget -- after discounting for inflation there is no real growth. Part of this is due to the bipartisan balanced budget agreement negotiated between President Clinton and Congress. In the past, Congress was able to add money to the defense budget. This is unlikely this year, Cohen said, because Congress will have to take money from other defense programs in order to fund add-ons.

Cohen said he is asking Congress for a supplemental appropriation to cover an extended NATO mission in Bosnia and increased operations in the Persian Gulf. "Rapid approval of this request is essential to protect readiness," Cohen said. Historically, DoD has had to borrow from fourth-quarter operations and maintenance money to fund unanticipated operations. This causes readiness to suffer.

Cohen also spoke about anticipated Defense Reform Initiative savings. He said the initiative will streamline DoD operations -- the Office of the Secretary of Defense alone will be cut one-third.

"We are also moving into paperless contracting," he said. "By July 1998, all contracting will be done on the Internet, and we expect significant savings from that."

DoD will also open 150,000 to 200,000 civilian positions to competition with private firms. He said he expects the public sector to win about 50 percent of those competitions. "But even so we will see a 20 percent savings with higher production at the best prices for the American taxpayers."