annual update of progress in these areas in late spring. In mid-February of this year the Secretary of the Navy published his "zero tolerance" sexual harassment program. This policy statement outlines a strong commitment about enforcing Navy's existing policy. In summary, the Secretary's policy states that the Navy will initiate administrative separation processing for personnel on the first occasion of certain aggravated types of sexual harassment. In his implementing directive, the Chief of Naval Operations further stated that personnel who repeatedly commit less aggravated forms of sexual harassment also will be considered for administrative separation. At the same time, CNO directed improvements in sexual harassment training at all levels in the Navy and, importantly, established "zero tolerance" as the Navy's attitude toward this corrosive behavior.

In the Fiscal Year 1992 Defense Authorization Act, Congress removed most of the statutory limitations on the assignment of women to aircraft engaged in combat missions. Congress also passed legislation creating a Presidential Commission to study the issue of assigning women to combat positions. As we discussed during the January 29, 1992 hearing before the Military Personnel and Compensation Subcommittee of the House Armed Services Committee, Navy will work closely and rapidly with the Chairman of the Joint Chiefs of Staff and the Secretary of Defense to assist she commission in policy changes.

Minorities

One of the most sensitive issues raised at the onset of force reductions was how those reductions would impact minorities. Our reduction numbers between fiscal years 1990-1991 are in. They show that minority composition percentages of the force are remaining the same or increasing. Navy reduced by 30,645 personnel between the beginning of fiscal year 1990 and the end of fiscal year 1991-a 5.12 percent reduction in overall total strength. Hispanics in the Navy actually increased over the same period. The following is a break down of the 5.12 percent reduction by race and gender:

*Hispanics inventory increased over this period.

The baseline 1991 composition percentages from which to compare this data are:

Opportunities for minorities and women in the Navy have never been better. Navy continues its commitment to equal opportunity for, all officers and sailors and will closely monitor trends as we continue to execute the drawdown.

OUTLOOK FOR 1993

For fiscal year 1993, our strategy will not change. Although we expect there will be pressure to accelerate reductions, we recognize the importance of fully manning our ships. We will resist actions that might hollow our force, affect quality of life or otherwise degrade benefits for sailors who endure the arduous demands of life at sea. Assuring high personnel readiness on our ships and in our squadrons is paramount. Last year our force structure and manpower were in balance. To insure that we remain "on course," I would like to review elements of the fiscal year 1993 plan contained in the President's budget. I will show how we will maintain this balance while continuing to drawdown.

BUDGET REQUEST FOR FISCAL YEAR 1993

End strength: The fiscal year 1993 budget requests 535,800 total active duty personnel. This includes about 468,300 enlisted (including midshipmen) as well as 67,500 officers. The budget request represents a drawdown of 15,489 (-2.8 percent) personnel from fiscal year 1992 to fiscal year 1993. These MPN reductions are associated with, a net loss of 64 ships between fiscal years 1992-1993.

From fiscal year 1992 through fiscal year 1997, Navy MPN end strength will be reduced by 50,089. To reach these required strength goals without adversely impacting readiness, we must address several key elements. First, we must attract a sufficient number of officer and enlisted personnel with the necessary skills to man our force while averting future mid grade shortfalls. Although a reduction in new accessions will account for a large part of our personnel drawdown, we cannot meet end strength targets solely through this action. In addition to reduced accessions, our plan to retire eligible personnel through SER and high year tenure rules and restrict entry into the career force will produce a balanced force with high readiness. This will provide for reasonable advancement/promotion opportunity and sea/shore rotation, while avoiding involuntary separation of mid-career personnel. We are working on the margin and additional cuts of any magnitude could require harsher actions. However, I want to assure you that the proposed President's budget will allow us to reach our planned fiscal year 1997 end strength goals, continue stability in our personnel programs and maintain fleet readiness.

We must insure that we have the proper programs in place to structure the force of the future. The 2 year obligation (2YO) General Detail (GENDET) program introduced in 1990 has been very successful and will be expanded. Because the enlistment contract expires after 2 years, many more members, as well as the Navy, have an early opportunity to evaluate whether continued service and entry into the career force is a realistic option. This program provides us the flexibility to meet downsizing requirements without forcing good career sailors out of the Navy. Our goal for fiscal year 1992 of 13,618 2YO GENDETS represents about 15 percent of our recruits. Additionally, this year, Congress authorized the use of the Voluntary Separation Incentive (VSI) and Special Separation Benefit (SSB). In fiscal year 1992, Navy has targeted VSI/SSB for up to 4,100 senior enlisted, in overstrength ratings, who are not retirement eligible. We will continue to use high year tenure rules, the separation of twice failed of select lieutenants, and SER authorities to reduce end strength and best manage our officer and enlisted communities.

The manpower plan that Navy has submitted for fiscal year 1993 is a balanced program that insures readiness of the fleet. It also meets the well deserved expectations of our dedicated men and women.

Military Pay

Equitable compensation for our sailors and their families is essential if we desire to retain our best qualified. Providing fair pay and allowances, commensurate with the private sector, allows us to attract and retain the quality personnel needed to man our smaller, more modern Navy. During the past decade military pay raises have lagged significantly behind private sector wage growth. The Employment Cost Index (ECI) has outstripped military pay in every year over the past 10, except for 1989. For fiscal year 1993, the ECI is expected to rise by 3.7 percent. Another economic indicator, the consumer price index (CPI), has exceeded military pay raises in 8 of the past 10 years. The CPI is expected to increase by 3.9 percent in fiscal year 1993. The 3.7 percent pay raise requested in the budget is modest and essential to our sailors. We urge your support.

Military Retirees

Military retirement represents an important compensation incentive. It is also a long term agreement with current members and retirees who completed military careers with the expectation of a predictable retirement system. We must honor the commitments made to those who faithfully served. We are taking renewed steps to insure that Navy retirees receive the rights, benefits and privileges to which their sacrifices entitle them. Access to quality medical care where available at military treatment facilities and maintenance of appropriate cost of living adjustments for

present and future retired military members under age 65 is necessary. We need to keep faith with those who have completed a military career by demonstrating a continuing commitment to protecting their benefits.

Recruiting

The smaller, more technical Navy of the future demands we invest in a higher quality recruit. We intend to build on our recent successes and direct our resources to sustain readiness by recruiting young men and women with skills required to man our future force structure. While sheer numbers of accession requirements have declined, there has been a corresponding increase in the quality that is needed to operate and maintain the more sophisticated equipment entering the fleet. The higher quality recruit also experiences less attrition and is more likely to reenlist, which contributes to lower training costs.

Intense competition from colleges and high-tech industry will require a stable recruiting force and a balanced advertising program if Navy is to continue to attract high quality recruits. Resource constraints do not support a national advertising program and this jeopardizes the progress we have made in recent years, both in meeting recruiting goals and insuring a reasonable quality of life for our recruiters. Recruiter quality of life has proven to be an indispensable element of our recruiting effort and we must continue to provide our recruiters all the necessary tools to do their job. A stable work force and advertising funds meet these future needs. Retention

As discussed, Navy's personnel downsizing measures will focus upon reduced accessions, further limiting entry into the career force, and expanded application of Selective Early Retirement (SER) and high year tenure policies. Even as we downsize we must continue to focus on retaining the correct numbers and skill mix to ensure force readiness. The retention challenge we face in 1993 is to keep the right skills and paygrades.

As the size of the force decreases, the Enlistment Bonus (EB) and Selective Reenlistment Bonus (SRB) will remain critical tools in allowing Navy personnel managers to structure the force to meet manning needs. The EB allows recruiters to attract high quality personnel who would otherwise find greater financial rewards in the civilian marketplace. Those recruited under this program fill high tech billets such as nuclear propulsion technicians and computer maintenancemen. SRB will remain vital to ensure adequate retention in selected mission critical skills such as linguists, sea duty intensive billets, gas turbine and nuclear propulsion technicians, and independent duty hospital corpsmen. These are among the important ratings which generally experience lower retention rates. The fiscal year 1993 program will continue to target only those skills with inadequate retention rates or high replacement costs. Although individual training costs continue to increase, the cost of the average SRB will remain constant, making this program even more cost effective. The authorization for the EB and SRB program expires September 30, 1992. Congressional action to extend this authorization before its expiration is essential. Officer Programs

Aviation: Fixed wing pilot retention remains below current fleet requirements. We need to continue to offer Aviation Continuation Pay (ACP) selectively to retain our experienced mid-grade aviators. ACP authority that Congress extended through fiscal year 1992 continues to play an important role in meeting aviation retention requirements and should be continued into 1993 and beyond.

Nuclear: Despite downsizing, attracting and retaining high quality officers in the nuclear power community is also a vital concern. Nuclear Officer Incentive Pay (NOIP) has been invaluable in meeting this goal. We still have a shortfall of more than 400 mid-grade nuclear trained officers that is particularly acute in several year groups. Extension of NOIP is important in ensuring continued safe nuclear reactor operation.

Medical Department Officer: Physicians' special pays as well as bonus/special pays for some nursing and non-physician programs contained in the Fiscal Year 1992 DOD Authorization Act will help reduce shortfalls in the medical community, particularly in specialty requirements. Although retention of physicians and nurses has improved, there is still uncertainty about the total effect of Desert Storm on retention. Your past support in this area has been most helpful. We request your continued assistance in providing incentives for medical department personnel.

Temporary Promotion of Certain Navy Lieutenants: Officers with engineering training and experience are in high demand by civilian industry. A shortage of qualified lieutenant commanders results from insufficient retention of these officers, mandating the assignment of lieutenants to these essential billets. We request the

authorization to spot promote these officers in specific cases. Use of this authority is very limited. It is offered to only top performing lieutenants while assigned to lieutenant commander engineer department head billets on surface ships/submarines and direct engineering support billets ashore. Temporary promotion authority has been a primary factor in retaining high quality, experienced officers to fill our toughest fleet assignments. Continuation of this authority will provide a significant retention incentive and better reward these deserving officers.

Quality of Life

No single factor is more important to the future readiness of our fleet than the quality of life of our sailors and their families. Our sailors are professionals who respond without hesitation to every call from their country. When their needs, and those of their family, are adequately addressed, they can devote their total efforts and skills to performing their military duties without worrying about their dependents. We are determined to improve the quality and availability of our QOL programs ranging from berthing to family support, from child care to recreation. We consider Morale, Welfare and Recreation (MWR) programs key to maintaining a ready and fit force. These programs enhance physical, mental and, emotional fitness, provide an array of community support services and provide healthy leisure activities as alternatives to alcohol, drug abuse and boredom.

There is a strong correlation between the quality of life of our force and retention, and therefore, operational readiness. In fact, Navy's most recent retention survey shows "support and recreational services" as the second most important factor for staying in the service. It was second only to "job security" and indicates how important our program has become. We have balanced our welfare and recreation programs to provide off-duty recreation, social and support programs for all military personnel (active and retired) and their families. Typical activities include sports and fitness (afloat and ashore), fleet recreation centers, recreational skill development, outdoor adventure activities aimed at meeting the needs of our younger single sailors, youth programs and child care. In recent years we have dedicated increasing attention and resources to child care and youth programs. Navy community support efforts have increasingly focused on Transition Assistance, Employment Assistance and Relocation. All these programs are benefiting those separating from the service and the latter two help our families address the challenges of our highly mobile lifestyle.

Family Service Centers

Family Service Centers have become a major feature of Navy support for both our members and their families over the past decade. The Family Service Centers were the lynch pin of communications, stress relief and other essential support for our families during Desert Shield/Desert Storm and the succeeding months. Their competent and caring professionals coordinate the efforts of Dependent Assistance Boards, Ombudsmen, Chaplains, Wives Clubs and other Command Support Groups in reaching out to members, spouses and dependent children. Since 1979, Navy has established 80 Family Service Centers world-wide to insure the well being of members and their families. The demographics of Navy have changed such that now 50 percent of our sailors are married and 70 percent of those who are married have children at home. In a Navy of 570,000, we have about 720,000 family members. Also 60 percent of Navy spouses now are working outside the home and we have almost 12,000 families with dual military spouses. With changes such as these, it is no surprise that the Family Service Centers make more than 3 million separate contacts with Navy families each year.

During Desert Shield/Desert Storm, the workload at some Family Service Centers increased by 200 percent. The demand for service has dropped off since then, but not to pre-conflict levels. We attribute this to the new awareness by Navy families of this rich source of support. We estimate that the number of contacts between the centers and Navy families will grow to more than 4 million in fiscal year 1993. Navy plans to increase the number of centers to 83 in fiscal year 1993-an increase of 3 over fiscal year 1992 levels.

Family Advocacy Program: The Family Advocacy Program (FAP) is another important element of Navy effort to address the needs of Navy families. The Family Advocacy Program prevents, identifies and follows up on family crises when there have been allegations of child abuse and neglect, spouse abuse or child sexual abuse. We now have 16 regional response teams which react to complex child sexual abuse cases and 10 locations that provide for new parent support training

There is no greater attention paid to any element of our population than those relocating to a new location and/or leaving Naval service. In accordance with the Defense Authorization Acts for fiscal year 1990 and fiscal year 1991, the Navy has

established Relocation Assistance Programs at all installations with 500 or more active duty members. This program which helps Navy families to find homes, select schools and make child care arrangements in their new location, is well received. Similarly successful are our efforts to implement the Transition Assistance Management Program (TAMP). TAMP provides pre-separation counseling, employment assistance and overseas relocation to all separating and/or retiring members and their families, in addition to providing benefits for "involuntarily separated personnel." We have 86 TAMP sites world-wide located within FSCs.

Training

In the debate over downsizing the military, reductions to hardware and personnel have received much of the focus. I want to place this in perspective and assure that everyone remembers that it is training that fits the manpower to the machine. From firsthand experience, I can attest that our success in the Persian Gulf was the result of many years of training. We must keep the ability to train our personnel effectively on the increasingly complicated and sophisticated hardware that is now used in modern warfare. We must make any reductions to training support with knowledge and forethought, otherwise, we will lose operational effectiveness and jeopardize safety. Trained professionals are genuine force multipliers. Success in training will allow the Navy to be ready and capable with a reduced force. The Navy's philosophy behind training our enlisted sailors has consistently been to make our schoolhouses centers for training excellence. We have sought and succeeded in reducing attrition from recruit training through more rigorous screening of recruits, adopting more sophisticated and computerized academic remediation tools and developing new leadership skills to motivate students. The end product has been success as measured in a 3 year downward trend in overall training attrition. This has resulted in keeping several thousand trained sailors in the service who in the past would have required replacement.

We also are eliminating unnecessary training wherever possible. We have updated training requirements, streamlined course curricula and consolidated training sites to reduce infrastructure. Additionally, we have developed software to analyze training requirements by specific warfare platforms. Our challenge will be to train a smaller, more highly technical force that can reach or surpass the same operational and safety achievements of the Navy in Desert Storm.

Training and professional military education for our officers is another area where the term "force multiplier" has special meaning. These individuals will lead our Navy into the 21st century and we must prepare them now through professional experience as well as formal graduate education. Our officer corps faces the same challenge our sailors face: an increasingly complex array of weapons, sensors and communications in a multi-polar world. Our Naval Postgraduate School in Monterey, California is meeting that challenge head-on in subject areas which focus on technical, scientific and engineering fields. For subject areas not addressed in Monterey, we send qualified officers to civilian or DOD institutions.

In the area of Professional Military Education (PME), Navy_continues to expand and improve. We now have officers attending more than 30 Professional Military Education institutions here and abroad. Naval officer attendance at U.S. staff and war colleges has increased by 50 percent over the last several years.

The year 1991 was a landmark year for the Naval War College. The Naval War College's resident and non-resident programs were certified by the Chairman of the Joint Chiefs of Staff as meeting all the requirements for Phase I Joint Professional Military Education (JPME). Most recently, the New England Association of Schools and Colleges accredited the Naval War College to award a Master of Arts degree in National Security and Strategic Studies. As such, the Naval War College is the only service college so accredited. The authority to confer these degrees has enhanced the academic credentials of the institution and its graduates.

Professional Military Education represents another investment in Navy's future. As the services decrease in size, the importance of education that stresses joint and allied perspectives becomes even more vital. We are committed to insuring that our future Navy leaders will be intellectually equipped to deal effectively with changing geopolitical realities, evolving national policy, and advances in tactical and strategic thought.

SUMMARY

The budget submission for fiscal year 1993 for Navy Manpower is lean and fair. It provides for the continued execution of our proven manpower strategy. It will enable us to recruit and retain the right quantity and quality of individuals necessary to man a smaller; more technical fleet. It will allow us to preserve our commit