and job seeking skills and gives attendees an opportunity to interact one-on-one with companies that want to hire people with military training. Normally up to 150 major corporations participate in these job fairs each year.

The NCOA Job Seekers Workshop is a 4-hour seminar that focuses on all aspects of the civilian job search, from resume preparation to salary negotiation. Attendees also complete the NCOA Mini-Resume which is entered into the NCOA headquarters data bank and is made available to companies and corporations seeking to hire separating military personnel.

The Army Career and Alumni Program (ACAP) assists commanders in implementing the transition services and benefits program. In addition to installation Transition Assistance Offices, the Army runs a system of contracted Job Assistance Centers which provide job assistance seminars and workshops, professional job assistance counseling, and a wide range of self-help resources such as a job assistance library, an information bulletin board, and automated resume and cover letter writ

ers.

The Army Employer Network (AEN) is an electronic data base located at every Job Assistance Center which lists potential employers who agree to consider hiring Army alumni, participate in the National Guard and Reserve programs, and support the equal opportunity program.

The Army's New Careers in Education Project is an information package designed to assist eligible soldiers in starting new careers in teaching. This information describes alternative certification in general terms, outlines the national conditions that have led over 29 states to adopt an alternative certification plan, and contains points of contact for these states.

DOD will continue to seek out new and better ways to assist our people's integration into the private sector.

General POWELL. We have put in 1-800 hotlines so that people can call in and see what troops are coming out, with what skills, so there can be job information exchanges. In the final analysis, though, there have to be jobs out in the community, out in industry, for these young people. All the transition help is to no avail if there are no jobs to transition into.

In the current economy, in the current recessionary climate, that is a tough one. At the time you got out, Mr. Chairman, the Congress was receiving 8,000 letters a month from families wanting to know, when does my young man get enough points to come home from Europe or come home from the Pacific.

The letters I get in my office now, Mr. Chairman, every day from a mother who says-for example, the one I received yesterday:

I do not understand, General. Has the Pentagon lost its mind? My young man is a first lieutenant. My son, he loves the Army. That is all he ever wanted to do. Here are his efficiency reports; he is a good soldier. But you are telling him he has to leave. He does not want to leave, he does not want a bonus, he does not want a GI bill. He wants to stay and serve his country.

It is a tough one to answer: "Sorry, ma'am; we are getting smaller."

Why are you closing ROTC detachments hither and yon? Do you not understand that ROTC is important? We do not need as many officers.

Two days ago the Air Force announced the results of one of its selective early retirement boards. Eleven Air Force air attachés serving around the world have gotten their pink slips. They are going to have to leave within the next few months, and we will have to figure out how to replace them in these various embassies. It is happening all over the force. I can also assure you that, unlike the situation 45 years ago or thereabouts, Senator, women are not willing to step aside and let male GI's take their place.

So I am not saying this in order to justify the size of the force. I am responding to your question in order to say: Let us do it

gradually, carefully, over time, so that we are not seen as a bad faith member of this contract that we have with each and every one of the young men and women in uniform.

Senator INOUYE. When we speak of peace dividends, I have no way of determining what it is going to cost on the other side of the ledger. On your ledger there will be reductions, the defense budget will be cut down. But somewhere along the line, somebody is going to be picking up the tab for unemployment compensation, welfare payments, food stamps, and all of that.

RATE OF DRAWDOWN

General POWELL. There is no doubt about it. There is no question about it.

The point I could have made to Senator DeConcini earlier is that if we accelerate the drawdown any more it starts to cost us more money than programmed to pay the bonuses and separation benefits. So there is also a practical limit. In the long term it saves you money, but in the near term it starts to cost you money.

Senator INOUYE. It is your view that the drawdown is at the proper rate? It is not too fast?

General POWELL. It is very strongly my view that it cannot be speeded up and probably it is going faster than I would like to see it go now. But the services feel themselves under enormous pressure, especially the Army, to shed end strength in order to afford the lower strength level. If they do not shed end strength as fast as possible, they will not be able to afford the strength that they are keeping.

If there is one concern I have, it is that the base force may not be entirely affordable at the number of dollars we have allocated for it now. So suggestions that it is a candidate for a significant reduction in 1993 or the outyears causes me a great deal of con

cern.

I must say, Mr. Chairman, if I may, one of the disturbing parts about this is that everybody is looking at our portion of the overall Federal budget, and we are going from 26 percent down to 16 percent, thinking that, if we can meddle with this 16 percent, that somehow we will solve the problem of the remaining 84 percent that we will not meddle with, because we are having a great deal of enjoyment in banging up on the Defense Department. Whereas, we are the one account that is going down as a percentage of the total Federal budget, and especially as a percentage of Federal discretionary spending.

If you look at all Government spending, we represent about 10 percent, or will when we get down to our base force.

Senator INOUYE. Thank you very much, General.

General POWELL. Thank you, sir.

Senator INOUYE. I have many more questions.

Senator Domenici.

Senator DOMENICI. Thank you very much, Mr. Chairman.

I want you to know that, even though I am still here, I am going to make it over there at my assigned time of 4 o'clock.

EFFECT OF DEFENSE CUTS ON U.S. ECONOMY

General, let me suggest to you, since we are talking about building down and the effect on the economy and the like, first, I think that, even though there are some who do not like the Congressional Budget Office's economic evaluations, I believe that it is at least one very credible approach to what is the economic effect of the military builddown in the current state of affairs. And I think it frankly is saying that there is not a lot we can do in the short term to ameliorate this recession by doing anything to defense.

If we cut another $15, $20, $30 billion out of defense in the next 18 months, it is not going to help this recession recover. And they are saying, no matter what we did with it, it means they cannot take it and spend it somewhere else, none of us can, and make the economy better. This is rather conclusive. It is impossible. There is not that kind of discharge and reflow that occurs. I think that is one thing.

Second, I think that you have to tell us, and I do not want it today, but what you are going to send the chairman would be helpful, I think you have to tell us, but more important you have to tell the American people, what you are going to do with the men and women in the military who are going to be let out during these difficult times.

We were told that our biggest challenge, post-Soviet Union, would be an orderly builddown. We should have been smart enough to know that there is nothing orderly around here once the apparent danger has disappeared, the danger that is right there. It becomes total disarray and the sooner we can get money from the defense to do something with, that is the order of the day.

It seems to me that an orderly builddown now can contain the kind of things that the Defense Department of the United States can do for the men and women of the military as we build down; second, to begin to push hard to see what can be done to help the American industries in conversion.

DEFENSE CONVERSION COMMISSION

Now, I know that is not necessarily your job, General. But I will tell you in this room, since we are here in rather closed session, that I was rather startled to find that the Department of Defense was given authority-Mr. Chairman, Senator Inouye, reminded the civilian leadership, they were given the authority, $5 million and the authority to set up a defense conversion commission.

I believe, in the interest of the defense of the United States, you ought to inquire as to what you can do to help that along. That ought to be out there. It ought to be appointed. It ought to be looking at the American industry, the layoffs that are going to occur, and talking about is there anything that can be done?

Frankly, we are used to saying in a capitalist society there is not anything to be done. I mean, if you close the shipyard, you lay off 50,000 workers, c'est la guerre. But I think in these recessionary times people are looking for a little bit of understanding. And I do not know that there are any easy answers, but I think it is very good for the Defense Department to be showing the public that you are worried about it and that you know about it.

I also believe and compliment you for presenting the picture of not building down so quickly after a crisis. It is worth a few years to see how the world settles. I mean, it seems incredible to me that we have not learned. Three or four years from now, we will see a few of these things settle out, it seems to me, that we are all aware of today.

INVENTORY PROBLEMS

Enough of that. Could I talk about the inventory buildup that we had a hearing on with the civilian leadership. I think that you ought to be very careful about that. That is the great big-what did we used to use, the big waste? The hammer, how much did the hammer cost?

General POWELL. The $600 hammer.

Senator DOMENICI. The $600 hammer and whatever the toilet seat cost. Well, this one is a giant hammer. We are talking about billions of dollars of inventory that should not be there. I do not know who is right, but I think that you ought to take the affirmative on behalf of some of our commitments and needs in the world by seeing to it that in the builddown, that that inventory gets put to a beneficial use and it does not just get sold by the Defense Department at auction, which is what is going to happen.

It is usable, surely usable, for either the poor in our country and, to much, much more advantage than the dollars that you are going to get out of it, or for some commitment we have overseas, where we can leverage it by other countries committing and get very large amounts of assistance. I hope you will consider that.

General POWELL. I will look at that, Senator, and take it up with the Secretary.

Senator DOMENICI. And I will talk to-I have talked to Chairman Nunn about that. He thinks it is a very good approach and I am sure he will be asking you and the others about it tomorrow.

General POWELL. If I may, Senator, I have read the CBO report. I do not always agree with them, but on this one I did. Not only is it not good for the economy to have a rapid builddown, but they also made the point it is not good for the Defense Department's work or men and women in uniform, either.

Senator DOMENICI. That is correct. The most quoted part is the economy, but actually it did the other thing, too.

Thank you, Mr. Chairman.

Senator INOUYE. Thank you.
Senator Bumpers.

Senator BUMPERS. I am sorry, Mr. Chairman.

Mr. Chairman, Mr. Conahan of GAO came over to testify before this subcommittee the other day-well, I take that back. He testified before the full Appropriations Committee, and it was essentially on the "60 Minutes" story about inventories. He suggested that you had $55 billion worth of excess. I am talking about in excess of war needs, materiels.

Do you think that is accurate or not?

General POWELL. I simply do not have any way of knowing, Senator, short of going and conducting a full inquiry, and that is really something that the Defense Logistics Agency and the civilian part of the Department of Defense and the individual services control.

I can certainly get an answer for you, but I do not have personal knowledge as to whether that number is accurate, not accurate, ballpark, or out of the ballpark.

I accept the statement that we probably have more stocks_on hand than we need to, in light of the new situation that we are facing. One of the things I am trying to do in my responsibilities for requirements determination is to turn off all these computers that generate requirements, cold war-type requirements, and just keep buying for those requirements. That period, that day, is over. We cannot afford it. There is no basis for that kind of purchasing policy, and I hope you will see a significant improvement in the approach the Department is taking toward the purchasing of stocks. Senator BUMPERS. The chairman or the staff can correct me, but I understood Mr. Conahan to also say that that is one area where the Defense Department could probably take a $4 to $5 billion hit in 1993. Do you agree with that?

Is that not the correct figure, Mr. Chairman?

Senator INOUYE. Yes.

General POWELL. Not having seen the whole statement, I do not know that I could agree with that, Senator. I would on the surface disagree, because I think we have put together a budget that throttles back significantly in procurement, on sustainment stocks, on acquisition. So I would be very leary about just whacking $4 billion as a penalty fee because of preexisting problems.

Senator BUMPERS. We are not talking about aircraft or ship procurement or any of those things. We are just talking about plain inventory.

General POWELL. I understand. I cannot talk to that without seeing the specifics of the proposal from the GAO.

Senator BUMPERS. I think it would help us, General, if you would look into that and send something over here in writing to us, just to give us a ballpark figure on what you think is reasonable and what is not. We are trying to be responsible, but at the same time be helpful and not make your job impossible. That is a pretty good balancing act, as you know.

We need all the cooperation we can get from you, of course, and that is one of the areas that I would like to know what your feelings are on that.

General POWELL. I will do that, Senator.

[The information follows:]

The Department anticipated that associated reductions would be expected based on the changing threats in the world. The Department has, therefore, already_reduced the budget in anticipation of scaled back operations. Like you, it is the Department's desire to make sure that the taxpayers dollars are spent wisely. I have consistently said that we must ensure our reduced force structure does not become a "Hollow Force." In order to do this, we must maintain operational funding adequate to support operational readiness. Further reduction to customer accounts may create inventory management problems by not allowing stocks to be purchased as required, while causing associated problems with contractor payment. The Department is working hard to improve inventory management and reduce inventories. However, I ask that operational readiness not be sacrificed and a downward spiral of management problems created in our over exuberance to react to a changing world.

Senator BUMPERS. Now, last year you described some central military concepts roughly corresponding to what today you described in your statement as the four foundations of our national