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HR 2266 -- 07/29/97

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Office of Management and Budget


July 29, 1997
(House Floor)

FY 1998
(Sponsors: Livingston (R), Louisiana; Young (R), Florida)

This Statement of Administration Policy provides the Administration's views on H.R. 2266, the Department of Defense Appropriations Bill, FY 1998, as reported by the House Appropriations Committee. Your consideration of the Administration's views would be appreciated.

The Committee has developed a bill that provides requested funding for many of the Administration's priorities. We appreciate the Committee's decision to fund the National Missile Defense program at the levels recommended in the Quadrennial Defense Review (QDR). Likewise, we appreciate the Committee's fully funding, at requested levels, contingency operations in both Bosnia and Southwestern Asia.

The Administration, however, has serious concerns about certain provisions of the Committee bill. Overall, for the reasons stated below, the Secretary of Defense would join the President's other senior advisers in recommending that the President veto the bill if it were presented to him in its current form.

Bosnia Funding Provision

The Administration strongly objects to the provision of the Committee bill that would prohibit funding for U.S. ground operations in Bosnia after a date certain. This provision could jeopardize the safety of our troops and damage our national security interests. It would seriously undermine our commitment to shepherd the Dayton Peace Accords to full implementation and undercut our ability to complete successfully the NATO-led mission in Bosnia. This would result in a serious loss of credibility with our allies, the Bosnian parties, and with other countries participating in the Stabilization Force (SFOR). In addition, the provision contains onerous reporting language that also requests foreign military planning information. Since the President cannot require our allies to divulge their military plans publicly, the reporting requirements could place the President in violation of the law.

B-2 Bombers

The Administration firmly opposes the $331 million increase to the President's request for B-2 production, procurement, and maintenance costs. The Department of Defense concluded in both the Deep Attack Weapons Mix Study and the Quadrennial Defense Review that the costs of procuring more B-2s exceed the benefits. Furthermore, the additional aircraft would incur 20-year life-cycle costs of approximately $20 billion, which would weaken the ability of the Air Force to acquire other urgently needed weapons systems. These resources should be allocated to higher priority requirements.

Overall Spending

Under Committee scoring, the bill provides $248.1 billion in total discretionary funding, exceeding the President's request by $4.8 billion, an amount greater than the increase assumed in the Bipartisan Budget Agreement. Achieving this funding level required a reallocation of funds from Department of Energy programs to Department of Defense (DoD) programs, an action we believe is an unacceptable deviation from our understanding of the Bipartisan Budget Agreement. Moreover, the Committee bill provides funds for unrequested programs not in the DoD Future Years Defense Program (FYDP), at the expense of higher priority programs requested by the Department. We urge the House to eliminate funding for programs not anticipated in the Pentagon's long-range plans and to restore funding to programs of higher priority.

Increases in Procurement Programs Not in the FYDP

The Committee bill would provide an additional $3.9 billion for procurement programs above the Administration's request. Over $1.5 billion of this increase is for programs not in the FYDP and of questionable value to the Department's overall plans to modernize military forces. These include: an additional $331 million for B-2 Bombers; $230 million for 4 modified C-130J airlift aircraft; $175 million for OH-58D Kiowa Warriors Helicopters; $56 million for modifications to Paladin Self-Propelled Artillery systems for the Army National Guard; and, $40 million for the Field Artillery Ammunition Support Vehicles for the Army National Guard. While we appreciate the flexibility the Committee has provided for allocating the National Guard and Reserve equipment increase, we nonetheless oppose the additional $850 million for National Guard and Reserve equipment that has been added for programs not in the FYDP.

The Administration urges reallocation of these appropriations to support key DoD modernization programs such as the Navy's Arsenal Ship Demonstrator, the next-generation aircraft carrier (CV(X)-78), and advance procurement funding for the second nuclear aircraft carrier refueling overhaul.

Funding Restrictions on Shipbuilding Programs

The Administration is concerned with language of the Committee bill that would place restrictions on spending for a nuclear aircraft carrier refueling overhaul and on DDG-51 destroyers. Such spending restrictions would be disruptive to the proper management of these programs.

Cooperative Threat Reduction Program

The Committee bill would reduce DoD's Cooperative Threat Reduction (CTR) program by $97.5 million from the Administration's request. The CTR program is an important and highly effective means of enhancing U.S. security through eliminating weapons of mass destruction and preventing weapons proliferation. The request of $382.2 million is a bare-bones figure based on a difficult prioritization of a long list of potential projects. The proposed reduction would force DoD to delay several projects in the Former Soviet Union in critical areas such as the destruction of nuclear delivery systems and chemical weapons, improvements to the safety and security of stored nuclear warheads and fissile material, and the cessation of production of weapons-grade plutonium. The Administration urges the House to restore appropriations to the requested level.

Dual Use Application Program

The Committee has provided only $100 million of the $225 million requested for the Dual Use Application Program (DUAP). The Administration strongly opposes the Committee's reduction from the requested amount for this high priority program. DUAP will save money in DoD's most rapidly growing cost category -- operating and support costs -- by inserting commercial technologies in fielded weapons systems and by enabling the Military Departments to take advantage of the commercial innovation cycle and get better technology to the field quickly.

Advanced Concept Technology Demonstration Program

The Committee bill would reduce by $60 million the President's $121 million request for the Advanced Concept Technology Demonstration (ACTD) program. This program supports work on new and innovative defense system concepts and could provide the basis for systems providing a decisive military edge over adversaries in the next century. This reduction would limit the Department's ability to test these new defense systems early in the development phase, when changes to these systems provide the greatest payoff. The Administration urges the House to restore funding to the level requested in the President's budget.

Executive Compensation

The Administration does not support the Committee's uniform cap on executive compensation. In lieu of this cap, we urge the House to adopt the Administration's February 28, 1997, legislative proposal, which recognizes that contractor executive compensation limitations should reflect pay levels based on industry norms.

Overseas Humanitarian Disaster and Civic Assistance

The Administration objects to the Committee's $25 million cut to DOD's Overseas Humanitarian Disaster and Civic Assistance (OHDACA) account. The Administration requests restoration of funding for the OHDACA account to the President's requested level so that the Department can respond appropriately to unanticipated global emergencies such as last year's evacuation of the Kurds (and DoD employees) from northern Iraq.

Unmanned Aerial Vehicle

The Administration objects to the Committee's termination of the Outrider unmanned aerial vehicle (UAV) program. The Outrider is needed to meet the Joint's Staff's number one UAV requirement -- a Tactical UAV. Termination of the Outrider would significantly delay the fielding of any tactical UAV reconnaissance capabilities.

Joint Chiefs of Staff Exercise Program Cuts

The Committee bill recommends sharp reductions to requested funding for the Joint Chiefs of Staff (JCS) exercise program. This program provides for the transportation of U.S. forces to engage in large-scale joint training operations with other U.S. services and allies. The Administration is concerned about the size of the reduction to this program and will work with the Congress to determine the appropriate funding level for JCS exercises as the bill moves through the process.

Restrictions on Presidential Foreign Policy Prerogatives

The Committee bill includes a general provision that would limit the President's flexibility to conduct foreign relations with respect to North Korea (section 8058). Given continuing uncertainty on the Korean Peninsula, such a provision would hinder the President's ability to use all means at his disposal to prevent a disastrous conflict from breaking out. The Administration urges the House to delete this provision.

Limitation on Transfer of Defense Articles and Services

Section 8072 of the Committee bill would forbid the use of funds to transfer defense articles or services to another nation or to an organization in connection with international peacekeeping or humanitarian operations, unless the President gives 15 days' advance notice to Congress. The provision, though, includes no waiver for national security emergencies such as providing weapons to troops supporting U.S. forces engaged in hostilities. Because the provision, if read to forbid such action, would intrude on the President's authority as Commander in Chief, the Department of Justice advises that the provision would be construed as inapplicable in such situations.

Joint Air-to-Surface Standoff Missile

The Committee bill would delete all funding and terminate the Joint Air-to-Surface Standoff Missile (JASSM) program in favor of the Joint Standoff Land Attack Missile (SLAM) program. The Joint Requirements Oversight Council (JROC) has repeatedly reviewed the SLAM-Extended Range (ER) and JASSM programs and has found insufficient technical and engineering data on either program that would lead to cancellation. The current Joint Service strategy is to collect data on both weapons to perform an informed, accurate, and timely Analysis of Alternatives to determine which system will provide warfighters with the required effectiveness at the best value. A premature and unsubstantiated decision could later result in a more expensive and less capable weapon.

NATO Joint Surveillance and Target Attack Radar System

The Administration urges the House to fund the NATO Joint Surveillance and Target Attack Radar System (JSTARS) program at the level requested in the President's budget. JSTARS aircraft provide real-time surveillance of the battlefield and rear echelons by detecting, identifying, and tracking enemy armor and vehicular traffic and providing their locations for targeting. A reduction to this program could adversely affect a decision by NATO to proceed with the anticipated purchase of the JSTARS aircraft.

DoD Basic Research

The Committee bill would provide $1.028 billion for DoD basic research, a decrease of $135 million from the $1.164 billion Administration request. This large reduction, distributed over a wide variety of subject areas, would slow the advancement of basic science needed to provide technology options for future weapon systems and to advance the state of U.S. scientific knowledge. The Administration asks that the House provide the full amount requested.

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