propriations Act and is effective through fiscal year 1993. To date, about $11 million has been earmarked in response to requests from seven communities. Two of the grants are for bases that are going to close: England Air Force Base in Louisiana and Lowry Air Force Base in Colorado.

SUPPORTING THE FORCE: COMPENSATION, QUALITY OF LIFE, AND TRAINING

Our ability to support and ensure the readiness of the Armed Forces of the future will be heavily influenced by our ability to provide sufficient compensation and quality of life incentives and adequate, realistic, and stimulating training. These areas of our program are discussed in the following sections.

Compensation

The President's budget requests pay raises of 3.7 percent in fiscal year 1993 and 4.7 percent in fiscal year 1994 for military personnel. We request your support of legislation making the fiscal year 1993 military pay raise effective on January 1, 1993.

The pay raise for fiscal year 1993 for the military is equal to the change in the Private Industry Wages and Salaries component of the Employment Cost Index (ECI), as stipulated by the Federal Employees Pay Comparability Act of 1990. The Seventh Quadrennial Review of Military Compensation (7th QRMC) is studying the selection of an appropriate index to compare military with civilian salaries. Regardless of the standard chosen, we remain committed to ensuring military pay remains competitive and in line with pay in the civilian labor market.

As the drawdown proceeds, installations are being closed, units are being deactivated, and headquarters staffs are being eliminated or reduced. The associated turbulence requires that people be relocated. We plan to use the fewest moves possible, but while a smaller force ultimately will mean fewer moves, this will initially be partially offset by an increased number of separation moves and moves associated with the realignment of people who remain. Consequently, the Permanent Change of Station (PCS) budget decrease will lag the population decrease. The services carefully prepared their PCS budget estimates, and we request that you fully fund this budget requirement.

In the area of special pays and allowances, Desert Storm highlighted several inconsistencies in our compensation structure in time of war-for example, the loss of Basic Allowance for Subsistence (BAS) while in a field duty status. We appreciate the increases Congress authorized in the rate of Imminent Danger Pay (IDP) from $110 to $150 per month and the Family Separation Allowance (FSA) from $60 to $75 per month to help offset the loss of BAS, and we are also pleased that Congress eliminated the prohibition on paying IDP and FSA in time of war or national emergency. However, we do not view this as a solution to the BAS problem, and the 7th QBMC is considering permanent solutions in its full review of the compensation system.

In the summer of 1991, the Department completed its first annual survey of housing expenses incurred by members drawing allowances for housing in the United States. Previously, the survey had been conducted biennially. We received over 530,000 valid responses for residences in over 334 military housing areas. The survey concluded that housing costs-including rent, utilities, maintenance, and other expenses-had risen 5.4 percent over the previous year. This resulted in an overall member housing absorption rate of approximately 20 percent, as opposed to the 15-percent absorption envisioned in current statute (65 percent of the member's housing expenses to be covered by Basic Allowance for Quarters; 20 percent, by Variable Housing Allowance.) Funds were adequate to pay the full VHA entitlement for fiscal year 1992, but a shortfall continues in funding for the Basic Allowance for Quarters.

Operation Desert Storm involved the first Presidential designation of a combat zone for tax purposes since Vietnam. Under current law, all military compensation of enlisted personnel for service in a combat zone is exempt from income taxes. The exclusion for commissioned officers, last increased in 1966, is limited to $500 per month. In addition, compensation of members in a combat zone is exempt from withholding. Delays in filing tax returns and paying taxes are also available. Changes to the tax laws also eased tax filing burdens for members assigned to Operation Desert Shield.

We worked closely with the Internal Revenue Service to ensure that all eligible members received the full benefit of preferential tax treatment provided by law, and we have been actively involved in ensuring that military taxpayers are fully informed about their tax obligations as affected by service in Operations Desert Shield and Desert Storm.

The administration supports several changes to the tax laws for members of the Armed Forces. The changes would update tax benefits for members in a combat zone: the monthly exclusion for commissioned officers involved in Operation Desert Storm would be increased to $2,000 (with automatic increases in the future), income tax withholding for members in a combat zone would parallel exclusions from income, and full exclusion for POWs would be extended to the POWs of the Persian Gulf conflict. The administration also supports enactment of its proposal to modify the Earned Income Credit for low-income military families; this proposal extends eligibility to military families overseas and improves administration of the program. We urge your support of the administration's proposals.

Quality of Life

The certainty once associated with a career in the military has, for the near future, diminished for some service members and their families. To minimize this effect, we intend to maintain the quality of life on military installations and reaffirm programs that provide comfort, support, morale, and esprit. We are cautiously and responsibly reducing quality of life programs where populations are diminishing, but we cannot always match diminishing populations with corresponding dollar amounts. Our schools are a prime example: some may simply shrink rather than close completely as enrollment decreases. This may increase per-pupil expenses.

Our overall quality of life budget request shows a slight increase for fiscal year 1993. For instance, this year we have budgeted an increase for Family Centers to reduce staffing shortfalls. The 367 Family Centers worldwide offer parenting programs, information and referral, financial education, and spouse employment assistance. They performed extraordinarily well during Operations Desert Shield and Storm, and statistics show that they are used more now than they were prior to the Persian Gulf war, indicating both the efficacy of the program and increased awareness of its value. As personnel reductions and base closures proceed, we anticipate a higher demand for Family Center services such as relocation assistance, stress management, and employment assistance. We believe the Department is setting the national standard for a "family friendly" organization and request that you help us do this by supporting our budget request for Family Centers.

The Family Advocacy Program addresses child and spouse abuse. We expect demands placed on this program may increase as the effects of our reductions and restructuring affect even stable military families. In addition, some service members returning from the Persian Gulf conflict have experienced adjustment problems and require assistance. Current funding levels for the Family Advocacy Program are inadequate; caseloads carried by counselors are three times larger than standards established by leading national agencies. We have increased funding to meet 55 percent of requirements. The increase will be applied to prevention efforts and treatment programs. We ask you to support the program increase included in the President's budget.

The care of children emerged as a crucial issue during Desert Shield/Desert Storm. Mobilization and deployment of troops high-lighted the changing family situations and patterns of the military that have evolved over the past decade: more active duty couples, single parents, and married personnel with working spouses. We recently instituted a 4-month deferment from deployment for military mothers of newborns and a similar deferment for one member of a military couple adopting a child. This year we will continue to mature our child care system in compliance with the Military Child Care Act. We completed a systematic review of the total child care program and prepared a Five Year Demand Study that we recently submitted to you.

Child care is important to our families, as commanders and service members manage the often competing demands of the military lifestyle and the family. For that reason, full-day child care is our first priority. Our second priority is schoolaged care (before and after school). The budget reflects a projected increase of 7,680 spaces in the Department of the Navy and some reduction in Army capacity commensurate with force reductions overseas. We project that a capacity of 170,330 can be provided with the fiscal year 1993 budget submission. This is an increase of 20,000 spaces since the enactment of the Military Child Care Act in 1989. The budget also reflects continuing expansion through family day care programs and referral services.

Another program of great importance to military families is our dependents education program, which serves more than 177,000 students, mostly overseas. We expect the drawdown to cause enrollment declines in many of our schools. Because there is no real educational alternative available, some of these small schools will not close. Their small size will result in the cost per student exceeding the depend

ents' schools program average, as there will be few economies of scale. In response to this probability, the DOD schools are experimenting with a distance education program that will help to maintain the breadth of the curriculum for a smaller, very widely dispersed student population.

Force reductions also complicate school staffing. Teacher employment commitments for the upcoming school year are made in the early spring based on available information on force structure. Accelerated troop reductions and accompanying student enrollment reductions) may occur with the new fiscal year in October, 2 months after schools open. Major adjustments after the opening of school are difficult to achieve without disrupting the students' learning environment.

Despite these problems, she Department remains committed to excellence in our schools. We are emphasizing achievement of the President's National Education Goals and have set measurable objectives to support each of the goals. One objective is to double the percentage of high school graduates who complete physics and calculus courses. Another is to train 2,500 teachers and 400 administrators in improved methods of teaching mathematics by 1995.

A discussion of our quality of life program would not be complete without a reference to our Morale, Welfare, and Recreation (MWR) programs. These provide a sense of community for service members away from home, furnish services and activities at affordable prices, and offer necessary respite from military duties. As was so dramatically demonstrated in Operations Desert Shield and Desert Storm, they are essential in maintaining a physically fit and mentally ready force during deployment and preparation for war. And back at home on an installation, the recreational needs of young service members and service members with families cannot be ignored. The military has a responsibility to provide fulfilling recreational opportunities aimed at self-development and respite from the rigorous requirements of military training.

MWR activities must be tailored to meet the needs of a smaller force structure as well as the changing needs of our military members and their families. We are currently reviewing our plans in this area to determine how best to meet these requirements both in the next few years and in the 21st century.

Training

Training is the key element in maintaining the readiness of our forces, and readiness translates directly into combat capability. This is what made us so effective in the Persian Gulf, and we do not want to do anything that would diminish that strength. We have been careful to avoid mistakes made in the post-Vietnam force reductions and in previous drawdowns. Too little training or ineffective training not only reduces readiness and combat capability, but it also affects recruiting, retention, and the safety of our forces.

We generally focus on two main categories of training: collective and individual skills. One of the primary yardsticks for measuring collective training is operating tempo (OPTEMPO)-ground vehicle miles, ship steaming days, and aircraft flying hours. In the fiscal year 1993 budget request, active Army ground- and air-training operations are kept at 800 miles per year for combat vehicles and 14.5 tactical flying hours per month for air crews. Navy steaming days remain at 50.5 days a quarter for deployed fleets and 29 days a quarter for non-deployed fleets. Flying hours for active Air Force tactical crews will hold at about 21 hours per month. The realistic practice made available through collective training builds readiness; we must, therefore, at a minimum, sustain OPTEMPO levels as we reduce our forces. In fact, in some areas, such as joint and combined operations, we may need to increase OPTEMPO. The Department is committed to maintaining operating tempos at the levels needed to ensure ready forces, and we request you support the levels in our budget request.

The technology that enables improved collective training is expanding very rapidly. The value of our major collective training centers-like the Army's National Training Center (NTC), the Air Force's Red Flag, the Marines Corps' Twenty-Nine Palms, and the Navy's Top Gun-can hardly be overestimated. In addition, we must continue to focus attention on the exciting advances being made in the simulation area. Indeed, the value of all these tools was clearly demonstrated in the Persian Gulf war. Also, OSD and the Joint Staff are continuing to work with the services to emphasize programs that improve joint training activities.

Of course, we are continuing to look for ways to improve individual skills training and are diligently searching for areas where we can achieve savings. We are improving training technology, increasing the number of course consolidations, making better use of existing facilities, and developing innovative ways to provide technical training using civilian institutions, just to name a few-but we are not willing to

cut the overall quality of training. It needs to be maintained and supported by adequate funding.

We are also ensuring that the impact of human capabilities and limitations, and other organizational factors-training, manpower, and human engineering—are taken into account as new defense systems emerge. We have created a ComputerAided Acquisition and Logistics Support Systems Component subcommittee; improved military standardization; accelerated development of human systems tools, handbooks, and data bases for acquisition program managers; and participated in joint DOD, industry, and NATO working groups to increase operational effectiveness while further reducing costs for our defense systems of the future.

CONCLUSION

Although the size of the U.S. military is shrinking, the Department of Defense is committed to maintaining a fully manned, trained, and equipped force. Our budget request for fiscal year 1993 reflects this commitment, both in the levels of manpower requested and the compensation, quality of life, and training funds budgeted. To guard our national security interests for today and for the future, we need your approval of this budget request.

I said to you last year that it was very important to avoid excessively steep reduction profiles that would create considerable turbulence and disruption. I repeat that statement this year, with emphasis. Let us reduce at a reasonable rate, in a balanced manner. Only by doing so can we preserve the high quality and readiness that distinguish our forces today and treat fairly the people who have served us so well.

This subcommittee has done a great deal during the past few years to make our Total Force what it is today. I look forward to working with you to preserve what General Powell has called, “the proudest, best trained, best equipped, most capable fighting force in the world."

Senator GLENN. Thank you, Mr. Jehn. General Carney.

STATEMENT OF LT. GEN. THOMAS P. CARNEY, DEPUTY CHIEF OF STAFF FOR PERSONNEL, U.S. ARMY

General CARNEY. Good morning, Senator Glenn, Senator McCain.

QUALITY ARMY

It is an honor for me to be here today in my first appearance before you to talk about the Army, its people and our personnel programs.

This is a turbulent and challenging time for the Army and its people, active duty, Reserve, civilian and their families. These people are today's quality Army. We remain committed to them as we draw down the force and we are committed to maintaining the exceptional quality of today's total Army. Both commitments are central to our ultimate objective and I know shared by you: a trained and ready Army.

Now uppermost in everyone's mind is our progress in reducing the size of the Army. Today I will describe for you how we are conducting that drawdown, the impact of the drawdown on the force and what we expect to accomplish this year and next.

In addition, I will cover several other topics important to the well-being and health of your Army, a force made of America's finest volunteers.

The Army must be always ready to fight-today, throughout the drawdown years and once the base force is established. We proved in the sands of the Arabian Peninsula that we have the world's finest Army. Our new, smaller Army must be as good as if not better than the outstanding force that helped defeat Iraq.

ARMY EXCELLENCE

Our challenge: Sustain total Army excellence in our Active, Reserve and civilian components throughout this drawdown period. By 1995, our Nation needs 536,000 active duty soldiers in 12 divisions, fully manned, trained and ready to deploy and capable of achieving decisive victory.

In addition, we need 6 fully manned Reserve divisions, 2 cadre divisions and a robust Reserve and civilian support element. In short, we need the total Army base force. To achieve that force we must have the flexibility to manage our force in order to keep the Army fully prepared.

We are on a steep decline. We are cutting faster and deeper than any other service. We cannot go any faster without risk to the Nation's security and the fabric of the Army as a vital institution.

Our overarching goal during the drawdown is to maintain readiness while taking care of our people. We continue to encourage volunteers to leave before any involuntary separations occur. Congress gave us both the mandate and the tools to adopt this policy. We are very appreciative of these tools for we believe that the volunteerfirst policy is the correct one.

REDUCTIONS

To that end, we are making full use of VSI and SSB. We were very grateful that Congress authorized these programs this year to help with the reduction. So far, about 16,000 soldiers have taken advantage of this generous program and we expect about 27,000 total to accept the offer this year.

We need this great program throughout the drawdown years. Unfortunately, some involuntary releases must still occur. Here, our policy is designed to effect first those with relatively short time invested such as lieutenants and those who have vested retirement such as senior officers and sergeants. There is still significant emotional and economic pain in being asked to leave early whether a soldier is junior or more seasoned.

Finally, as a last resort, we have planned involuntary reductions in force or RIFs for the mid-leve! officer corps. Thanks to the success of the VSI and SSB program, we will not have to RIF captains this year, but it now looks as if we will need to RIF about 300 majors. This number reduces each time a major in the target year group volunteers to leave with VSI and SSB.

While we do what we can to ease the impact, do not doubt that the drawdown is painful, very painful. Careers are cut short, other careers never get started, families are disrupted.

CIVILIANS

Our civilian work force is decreasing as well by approximately the same percentage as the military reduction or about 25 percent. Our goal is to manage the civilian reduction with the least pain possible to the Department and to individuals, but without compromising the quality of our civilian force or the accomplishment of the Army mission.

The effective use of attrition, hiring limitations, release of temporary employees and voluntary early retirement has enabled us to