his subordinates may take action which will unnecessarily delay obligation of these funds, close quote.

Are you men going to move ahead with the V-22?

Mr. GARRETT. We are in the process, Senator Specter, of responding to the requirements that have been directed by the Office of the Secretary of Defense. I have talked to my acquisition executive relative to the direction of the Congress as contained in the report language. He has advised me that we cannot comply with our own regulations within the Department and follow the guidance that is found in the report language.

The $700 million simply does not get us where we have been directed to go. So what he is doing at this time is trying to work both with the contractors, as well as the acquisition staff, to develop what we would call a transition program to continue to do what the Secretary of Defense authorized me to do, and that was to continue the research and development of the program.

Senator SPECTER. When you cannot comply with what the Congress says as opposed to complying with your internal regulations, which takes precedence?

Mr. GARRETT. I have no problem, Senator Specter, ever complying with the law. You will always find me complying with the law. My problem is I have a program that has been directed in the report language that is unexecutable. And so what we are trying to do is develop a program that we can execute with the dollars that have been provided us.

Senator SPECTER. Well, we will continue this to another day. The information I have is to the contrary, but we will continue the discussion when we have more time to do so. Thank you very much.

Senator STEVENS. Thank you very much. With regard to that last question, Mr. Secretary, I would hope that we would get a report from the Department prior to the consideration of the supplemental. So if there is some additional language that is required in the law itself to correct this problem, that we can work with you. I think this is still one of the No. 1 priorities of this committee, that we proceed with the V-22 primarily for the benefit of the Marines.

Mr. GARRETT. We would be happy to work with you, Senator Stevens, of course, as we always have. I will certainly discuss the issue of a report coming forward before the supplemental.

Senator STEVENS. Is it a conflict between the report of this committee and the report of the authorizing committee that bothers you?

Mr. GARRETT. No, sir; the problem that I have is a real world problem. Mr. Cann advises me that the direction that has been provided in the congressional language, cannot be executed for the dollars provided. In other words, we can start but we cannot get from here to there.

Senator STEVENS. On behalf of the committee I want to make that request. I am sure the chairman would agree that we must have something definite from the Department before we mark up the supplemental. The chairman and I have been making trips to the Pacific now for 3 years.

PACIFIC FORCE STRUCTURE

We are Senators from the Pacific, and one of the questions I would like to ask is whether or not the reduction in force and basic capability of the Navy and the Marines is going to in any way lead to a creation of a vacuum in the Pacific. Is there going to be such a reduction in force in the Pacific that we are going to cause trouble out there?

Mr. GARRETT. If the base force, as it is presently envisioned, is supported and we are able to maintain the base force, while we believe that our operations in the Pacific may very well, especially with our departure from the Philippines, become more difficult and more onerous than currently, we will not suffer that result. But, again, that is a function of the base force being supported.

Senator STEVENS. Well from the Philippines to Australia to Indonesia to Hong Kong to Taiwan, even in conversation with the Chinese and the Indian people, there is a fear there that if we leave that region and indicate we intend to leave the region, there is going to be an arms race in the Pacific that will make the NATO arms race look like child's play. There are too many players out there, and we have been the stabilizing force there, in a quiet way, since World War II. Admiral, if you get down below 12, as far as your carrier groups, what is going to be the impact on the Pacific? Admiral KELSO. I think that has been our worry all along, Senator, and we have maintained that presence in the Pacific, and in places like the Mediterranean and the Middle East, most of which, in effect, is just the same with or without the cold war. We have provided that stability and that presence throughout this whole riod, and we will continue to provide that.

pe

And I agree with you. In my travels out there I get the same feelings from everybody. They want us to remain in that part of the world. That is what we looked at when we said that, if the force level was 12, where would we need to be and how many would it take for us to maintain a presence in a continuous time.

And that is how we came up with the level: based on how we have deployed in the past, how we have to maintain our ships, and how we have to train our people. We turn over one-third of our people, or 25 percent of our people, on an annual basis. You have to have a scrimmage before they deploy if they are going to be prepared to do their job when they get there.

We want to be in a forward position in those areas of the world where we may have to look at maintaining peace and stability. And that is how we arrived at the number that we thought we need in the world in which we are in. It is not only in the Pacific. I think there are other places in the world where people feel the same way about it. I believe the Mediterranean, for instance, has the same feeling, that if we left it would be a vacuum. So I think there will be a continuation of need for that presence, sir.

Mr. GARRETT. That is why we believe there will be an increased emphasis, Senator Stevens, on naval forces, both Marine and Navy, as we look out into the future and essentially withdraw our permanent presence from other parts of the world.

Senator STEVENS. Well it is my understanding that the new equipment that is coming into the Russian force is, in fact, coming

to the Pacific, and that we see new equipment in India, new aircraft carriers. We see the development of a new capability in China in terms of naval forces.

And, really, I cannot tell you how expressed it was to the two of us as we traveled through the Pacific this year, that there is really a fear there now that if we leave the arms race will be such that everyone must get into it. Even Australia is redeploying their forces, as you know. The Indonesians are thinking about it. The people who have been willing to rely upon us for a long period of time wonder if we are going to be reliable in this period in the Pacific.

So I hope that we can understand that that is of the same priority, at least, as the Mediterranean and other parts of the world. Clearly in our minds, Senator Inouye's and my mind, it is. In terms of Subic Bay process, do you see any additional needs for funds in this fiscal year? We have got supplemental coming now, soon, to deal with the Philippines and the Subic Bay problems.

Mr. GARRETT. In 1992?

Senator STEVENS. In 1992.

Mr. GARRETT. That could very well be the case, Senator Stevens. Senator STEVENS. That was indicated to us, but again we have not heard anything about it. We have not had any indications and no supplementals coming forward. And I gather in this process that we are not going to get any, but I want to encourage you to present-well I do not want to encourage you, I want to request the two of you to present to Senator Inouye and me any details of additional funds that are necessary to complete the relocation from Subic Bay, and to meet our commitments in the Philippines as we do.

Mr. GARRETT. We will provide that for the record, sir.

[The information follows:]

In fiscal year 1992 and the first quarter of fiscal year 1993, we anticipate that the relocation from Subic Bay will involve an additional requirement for $28 million in MPN funds for personnel moves, along with additional O&M,N funding of $32 million for foreign national severance, $26 million for civilian personnel relocation, and $94 million for the transportation of equipment and preparation of receiving sites. A total of $26 million from prior year O&M funds is set aside to cover foreign national severance. Further, savings from activities which drawdown and phase out during calendar year 1992 will be available to offset our relocation costs. Separately, severance pay within Non-appropriated Fund and DBOF accounts total $28 million. While still under review, MCON will be required on Guam. CINCPAC's current estimate is approximately $300 million, with as much as $190 million required in the fiscal year 1992-93 timeframe.

Senator STEVENS. I too have some questions about the industrial base concept. I think that has been covered. And the modernization, I want to give you some questions on that and the sealift. My last comment to you would be that it is obvious that the World War II veterans on this committee have 100-percent agreement concerning the process that we are going through right now. We find ourselves reluctant participants in a process to bring about precipitous reduction in our military capability at a time when there is still great instability in the world. And I do not know, none of us know what we can do to stop it except to continue to urge you to make certain that what we do maintains our capabilities.

I seriously question, now, whether we should have yielded, Admiral, last year when this committee suggested we stop the Seawolf

program and go to the two attack submarines. I think that that would have been a better transitional phase than what we are facing right now. And the impact on the industrial base, we would have had a little bit more time to think out our process. Have you examined that once again?

Admiral KELSO. Well we are looking at it right now, Senator, as to how we proceed from here in light of the decisions that we made, and we will look at all the possibilities. I just do not know the answer to that at this point in time. We will have to answer back to the Secretary of Defense.

Senator STEVENS. I understand that, and it is a very complicated procedure we must go through. But clearly in terms of our ability to turn this process around should some great destabilizing force come onto the screen, I think we are equally worried about the industrial base. I do not have an industrial base State, neither does Senator Inouye, but we, I think, understand the impact of not having it if we must reverse these decisions we have made so far, or that at least have been presented to us so far.

I want to thank you all for coming. We should have a vote going on. I have not heard it. But the chairman has asked me to thank you and indicate to you that we know the subcommittee faces some difficult challenges this year. We want to all work together to assure that the historical build-down that is taking place in our defense establishment is conducted as prudently as possible. And we want to call upon you for your candid advice and invite to you to approach either or both of us at any time when we can be of assistance to you.

Again, we thank all of you, General Mundy, Secretary Garrett, Admiral Kelso.

ADDITIONAL COMMITTEE QUESTIONS

[CLERK'S NOTE.-Additional questions submitted by subcommittee members, together with the Department's responses, will appear in the appendix portion of the hearings.]

SUBCOMMITTEE RECESS

Senator STEVENS. The subcommittee will stand in recess until the hour of 10, Thursday, March 5, when we will hear testimony from the Secretary of the Army and the Chief of Staff of the Army. [Whereupon, at 12:08 p.m., Tuesday, March 3, the subcommittee was recessed, to reconvene at 9 a.m., Thursday, March 5.]

The subcommittee met at 10 a.m., in room SD-192, Dirksen Senate Office Building, Hon. Daniel K. Inouye (chairman) presiding. Present: Senators Inouye, DeConcini, Bumpers, Stevens, Garn, Kasten, D'Amato, Rudman, Cochran, Specter, and Domenici.

DEPARTMENT OF DEFENSE

OFFICE OF THE SECRETARY OF THE ARMY

STATEMENT OF MICHAEL P.W. STONE, SECRETARY OF THE ARMY

OPENING STATEMENT OF SENATOR INOUYE

Senator INOUYE. This morning the Subcommittee on Defense Appropriations will receive testimony from Michael P.W. Stone, the Secretary of the Army, and Gen. Gordon R. Sullivan, Chief of Staff of the Army, on the subject of the Army's fiscal year 1993 budget request. On behalf of the committee, gentlemen, welcome.

Mr. Secretary, today is 1 day short of a year since the last time you appeared before this committee. Who could have predicted the historic events of the past 12 months? Although we have observed the collapse of communism in the former Soviet Union, the economic and fiscal challenges within our own country compel us to reevaluate the funding levels of our national and international security programs. While we may rejoice in the move toward democratic government in the Commonwealth of Independent States and throughout Eastern Europe, the world still faces a security environment that is both uncertain and potentially very dangerous.

I am particularly concerned with the issue of weapons accountability. Of particular concern is the gathering certainty that hostile or politically unstable nations may one day try to hold the world hostage with tactical and strategic nuclear weapons previously under the control of Moscow. The proliferation of weapons of mass destruction poses what I believe to be the greatest single danger to our national security today.

In the face of these many uncertainties, I am very wary of the pace with which some of my colleagues believe we should reduce our military establishment. We can ill afford to disband the most