S. 2132 - DEPARTMENT OF DEFENSE
APPROPRIATIONS BILL, FY 1999
(Sponsor: Stevens (R), Alaska)

The Committee has developed a bill providing requested funding for many of the Administration's priorities. We appreciate the Committee's decision to fully fund readiness programs. Also, we are pleased that most of the modernization priorities of the Department of Defense are funded at or near requested levels. However, the Administration is disappointed that the Senate, based on OMB's preliminary scoring, has provided $475 million below the President's overall request for this bill due to increases in lower priority military construction projects. Also, as discussed below, the Administration has serious concerns about certain provisions included in the Committee bill, which must be addressed satisfactorily as the bill moves through the process.

Funding for Bosnia

The Administration regrets that the Committee did not include funding for our ongoing operations in Bosnia and looks forward to a satisfactory resolution of this issue. U.S. military presence, albeit at lower force levels, is critical for continued progress in implementing the Dayton Peace Accords. Although funding requirements for operations in Bosnia were not known when the FY 1999 Budget was prepared, the Administration created a funding reserve in the budget to cover these costs, and on March 3, 1998, the President requested funding for this purpose. A secure funding source at the start of the fiscal year allows the Department to manage its readiness accounts effectively throughout the year. The Administration strongly urges the Senate to provide emergency funding in the Defense Appropriations bill and appreciates the Committee's consideration of these concerns.

Unrequested Funding

The Committee bill increases funding for programs that due to higher priority military requirements are not in the Future Years Defense Program (FYDP), or, that should not be funded at the expense of DoD's FY 1999 requirements. These increases include $50 million for continued operation and modification of excess B-52 bombers, $255 million for three additional C-130J airlift aircraft, $287 million for National Guard and Reserve equipment (not including C-130 aircraft), $94 million for the Space Based Laser program, and $50 million for advance procurement of the LHD-8 amphibious ship. Moreover, to complete procurement of the LHD-8, extensive funding will be required in later years. These increases would be at the expense of higher priority defense programs.

Reduction in Request for Intelligence Budget

The Administration objects to the Committee's significant reduction to the FY 1999 funding request for U.S. intelligence. The Committee's reduction would slow the Administration's efforts to strengthen our Intelligence capabilities. The Administration urges the Senate to appropriate the full amount of the President's request to ensure that the Intelligence Community can meet the most pressing needs of our national policy makers and combatant commanders. The Director of Central Intelligence will provide additional detail on these classified issues prior to the conference on the Defense appropriations bill.

O&M Adjustments

The Administration appreciates the bill's emphasis on preserving military readiness through strong funding of most O&M programs. However, force readiness could be threatened by the bill's reductions to other O&M efforts, such as civilian personnel pay. The President's request is very tightly constructed within the discretionary caps agreed to in the Bipartisan Budget Agreement. Any adjustments must be carefully evaluated to ensure that sufficient funding is available for DoD operations and support programs. The Administration is also concerned that additional restrictions may be placed on O&M accounts that would further hinder the ability of field level commanders to meet mission requirements quickly in a constantly changing environment. The Administration would like to work with the Congress to address these issues prior to final congressional action on the bill.

Reduced Funding for the Next-Generation Aircraft Carrier

The Committee bill would reduce funding for research and development of CVX-78, the next-generation aircraft carrier, by $116 million, a 61-percent decrease from the President's request. A reduction of this magnitude would jeopardize the Navy's ability to design and deliver new aircraft carrier technologies and would make it difficult to achieve life-cycle cost reductions, a major goal of the aircraft carrier development program. The Administration urges the Senate to restore funding to this important development effort.

Reduced Funding for Dual Use R&D

The Committee has provided $36 million for the Dual Use Applications Program, $30 million below the President's request, and $73 million for the Commercial Operations and Support Savings Initiative, $30 million below the request. The Administration urges full support of these programs, which are needed to ensure that DoD systems employ technologies used in commercial products to good advantage. These dual-use technologies will help lower production and support costs and help modernize many DoD systems more readily than could be done through use of DoD-unique technologies.

Next Generation Internet

The Committee has provided only $30 million for Next Generation Internet (NGI) funding, $10 million less than requested. Funding this program will support research into high-rate data networking technologies that will be needed by DoD's information-intensive systems in the near future. The Administration urges full funding of the NGI request.

Potential Objectionable Amendments

The Administration understands that several amendments may be offered which would undermine the President's prerogatives as Commander-in-Chief and potentially harm U.S. national security. These amendments would: prescribe a force drawdown in Bosnia; potentially require prior congressional authorization of actions taken by the President to protect our national security pursuant to his authority under the Constitution; and, alter the current commercial satellite export licensing jurisdictions of Executive Branch agencies. The President's senior advisors would recommend veto of this bill if it includes these or similar amendments.