The Administration supports prompt congressional consideration of its
national defense authorization legislative proposal for FY 1999. As
reported by the Committee on Armed Services, S. 2060 authorizes
appropriations of $270.6 billion for national defense programs in FY 1999,
the amount requested by the President. The bill, however, raises serious
budget and policy concerns which must be addressed satisfactorily.
Of particular concern, S. 2060 would reallocate funds to Department of
Defense (DOD) military programs by: (1) reducing funding for the
Department of Energy's (DOE) FY 1999 defense discretionary budget request;
and (2) significantly reducing the Administration's request for
The Administration also understands that amendments may be offered which
would mandate troop withdrawal from Bosnia on a specified timetable. If
such a Bosnia amendment were included in the final conference bill, the
President's senior advisers would recommend that the bill be vetoed.
Potential "Mandated Bosnia Withdrawal" Amendments
A statutory requirement for troop withdrawals from Bosnia on a specified
timetable could jeopardize the progress achieved to date, damage U.S.
national security interests by undermining American leadership in Europe,
and hinder the ability to forge a lasting peace. This type of requirement
would unduly restrict the President's authority to deploy force levels
sufficient to ensure the safety of U.S. troops and to successfully complete
the mission in Bosnia.
Over the past year, the Administration and NATO have developed benchmarks
that will serve as measures for progress and provide a basis for periodic
reviews of commitments in the region. As the circumstances warrant, the
Administration will further reduce forces in Bosnia. Setting dates in law
for withdrawal would undermine that process and the progress made to date.
The Administration strongly urges the Senate not to include any language
mandating withdrawal from Bosnia.
Reduction of DOE Funds
The Administration strongly objects to the $359 million reduction from the
requested level for DOE's defense and environmental management activities.
The Committee has erroneously characterized a $145 million cut in stockpile
stewardship and a $21 million offset in Environmental Management as
reductions to prior year balances. Since DOE has eliminated its excess
balances over the past four years, the Committee's bill will force real
reductions in critical programs needed to ensure the safety, security and
reliability of America's nuclear deterrent. The $275 million reduction in
the Environmental Management Privatization account cuts funds which are
needed to demonstrate to the financial investment community the
Department's commitment to the privatization approach, and which are
required to complete key nuclear waste disposal facilities. In addition,
the Administration objects to reductions in the program direction accounts
for the Environmental Management, Defense Programs, and Nuclear
Nonproliferation programs which have reduced their federal workforce
substantially since 1995.
Reduction in Request for Intelligence Budget
The Administration strongly opposes the bill's significant reduction in the
Administration's FY 1999 Budget request for intelligence activities. This
substantial reduction could have severe near- and long-term effects on the
ability of the intelligence community to provide battlefield support. For
example, these reductions will impede the intelligence community's ability
to: (1) provide early warning information to decision makers; (2) gather
data on weapons of mass destruction; and (3) collect and analyze
information regarding countries where U.S. Armed Forces might be deployed.
Base Realignment and Closure
The Administration is disappointed that the bill does not adopt the DOD
proposal to authorize two additional rounds of base closure and realignment
in 2001 and 2005. The DOD base infrastructure is far too large for today's
military forces and must be reduced if readiness and modernization
requirements are to be met over the next decade.
S. 2060 adds over $1.2 billion to the Administration's request for weapons
modernization and $500 million more for construction programs. Some of
these increases are for programs that, due to higher priority military
requirements are not in the Future Years Defense Program (FYDP) or that
should not be funded instead of DOD's FY 99 requirements. These include
$318 million for four additional C-130J airlift aircraft, $94 million for
the Space-Based Laser Technology program, and $50 million for advance
procurement of an amphibious ship, the LHD-8. Moreover, to complete
procurement of the LHD-8, extensive funding will be required in later
years. These increases for lower priority weapons modernization and
military construction programs would be at the expense of higher priority
Small and Disadvantaged Businesses
The Administration is strongly opposed to limitations that would impede the
ability of the Department of Defense to assist small and disadvantaged
businesses in obtaining contracts. Provisions in this bill would have a
negative impact on these programs and would create uncertainty in future
years. The Administration will soon issue improvements to procurement
programs for small and disadvantaged businesses that are carefully crafted
to not only provide procurement opportunities for these businesses, but
also ensure that the programs do not unlawfully or unfairly diminish
contracting opportunities for non-minority firms and meet legal
requirements as set forth by the courts.
Early Retirement Authority for Civilian Employees
Section 1104 would grant the Department of Defense Voluntary Early
Retirement Authority. The Administration strongly encourages the Senate to
instead extend government-wide flexible early retirement authority, under
OPM's oversight, until 2003. Therefore, the Administration has concerns
with section 1104 as reported by the Committee, and looks forward to
working with the Congress to provide permanent authority for tailored
voluntary early retirements.
The Administration supports language included in the Senate bill requiring
mandatory reimbursement of Federal spectrum users when forced to modify
systems or to relocate as a result of new commercial licensees. Mandatory
reimbursement will help facilitate effective management of spectrum in
times of increasing demand and new commercial opportunities. The
Administration appreciates the Senate's recognition of the importance of
providing the same opportunity to Federal users as is afforded the private
The Administration, as it continues to review the bill, may identify other
issues (e.g., health care demonstration projects), and will work with the
Congress to develop a more acceptable bill.