emergence of a global threat. Our tools include political and economic steps, as well as security efforts to prevent the emergence of a non-democratic aggressor in critical regions. On the security side, through forward presence, sustained crisis response capabilities and a continued technological edge, we can help to preclude potential aggressors from beginning regional arms races, raising regional tensions or gaining a dangerous foothold toward hostile, regional domination. We can maintain the alliances and military capabilities necessary to our regional strategy. We can provide more security at a reduced cost.

We have gained so much strategic depth that the threats to our security are now relatively distant, so much so that they are harder to define with precision. It is important that we take advantage of this position and preserve ihose capabilities necessary to keep threats small. If we fail to maintain the necessary level of military power, we are likely to find that a hostile power fills the vacuum and presents a regional challenge once again. This in turn will force us to higher levels of defense expenditures at a higher level of threat to our security and a higher risk of war.

Our efforts in the Persian Gulf successfully regained our strategic depth in that critical region — by preventing Saddam from consolidating an even more dangerous position and by setting back his military threat. This has allowed us to continue our planned reduction in U.S. military forces. But the gulf effort was costly. We would do better in the future if our clear will and capabilities precludes arms races or aggression in regions critical to our interests before a threat is posed.

Neglecting our defenses and our proper role can be dangerous even when there is time to begin to rebuild forces. In 1939, the United States began to rebuild its armed forces. By 1941, we had begun to build 36 divisions with 1.6 million ground combat troops. But by then it was too late to head off war; others had already built their plans in anticipation of continued American irresoluteness. There is a moment in time when a small, ready force can preclude a conflict or a hostile move that, once lost, cannot be recaptured by many thousands of soldiers on the edge of combat.

If a new antagonistic superpower or alliance of hostile regional powers emerges in the coming years, we will have the lead time needed to counter the new threat, but our defense costs will be much higher and our security may revert to the more tenuous days of the Cold War. We must do what we can to maintain the strategic depth we have won through 40 years of the Cold War.

We were resolute in the Cold War. And we have gained greater security for our commitment. We were resolute in the Persian Gulf war. And we have forestalled what would have become a much larger danger there. Now, as we reduce our forces, we must not forget the deterrent value of highly capable, although smaller, forces. We must not ignore the importance of shaping – at least in those regions critical to us — an environment within which peace and democracy and prosperity can flourish.

Today, we face again a fundamental choice. We can make the

investments required to maintain the strategic depth that we have won – a much smaller investment than we made to secure it. Or we can fail to secure these advantages, and eventually the threats will not be remote, they will not be vague, and we will not have the alliances and the capabilities to deal with them. We will wish then that we had made the much smaller investment that we ask for today to preserve the depth in our strategic position that we have won.

The base force built to implement the regional defense strategy was predicated on four assumptions about the future: first, that we would see continued arms reductions and democratic progress in the Soviet Union and Eastern Europe; second, that security ties among democratic nations would continue; third, that regional tensions, heightened by the increased proliferation of nuclear, chemical and biological weapons and ballistic missiles, would trouble areas of the world of great importance to us; and fourth, that the United States would not in fact have to undertake any significant long-term commitment of additional forward-deployed forces to contain a regional dispute. A failure of any of these conditions might have required us to reassess the cuts we proposed, and we explicitly left ourselves the capability to do that. In fact, the August coup in the Soviet Union and the prospects of a long war for Kuwait briefly challenged two of those assumptions about the future. But we planned forces for the better world that we now can envision with more confidence.

Many risks, goals and assumptions were weighed in 1990 as we

Paid Dearly

As a nation, we have paid dearly in the past for letting our capabilities fall and our will be questioned. Four short years after our resounding global victory in World War II, we were nearly pushed off the Korean peninsula by a third-rate power. We paid dearly for our rush to disarm and our failure to accept a leadership role in the region.

designed our strategy and our base force for the better world that we projected. A commitment to lead the way to greater security at lower levels of force enabled us to look beyond the worrisome events of last winter and take an unprecedented step: We planned significant cuts even as we deployed 500,000 troops to Saudi Arabia; we proposed those cuts in the middle of the most complex air war and on the eve of the largest mechanized combat since World War II. In the end, the events of 1991 have challenged some of the assumptions we used in 1990 and posed some new concerns and opportunities, but confirmed the basic direction of the course we had set.

The victory had enormous geopolitical consequences. Together the nations of the coalition had halted aggression in the gulf; defended the world's supply of oil; liberated Kuwait; destroyed twothirds of the Iraqi army; crippled its offensive capability; set back Saddam Hussein's quest for nuclear weapons; ended his pretensions of leadership in the Arab world; and left even his continued tyranny over his own people in doubt. We did not seek this war, but in its aftermath a broader process of change became possible. Our hostages in Lebanon were freed. Arabs and Israelis have met face to face to talk peace. Our relations have improved with nations throughout the region.

Although Saddam today has been reduced enormously in stature and power, we need to remember that the stakes in this conflict were large. Had the United States and the international community not responded to Saddam Hussein's invasion of Kuwait, the world would be much more threatening to the peoples of the Middle East and beyond.

Unopposed, the seizure of Kuwait would have placed significant additional financial resources and, hence, military power in the hands of an aggressive and ambitious dictator. Saddam would have used Kuwait's wealth to accelerate the acquisition of nuclear, chemical and biological weapons and to expand and improve his inventory of ballistic missiles. Iraq's seizure of Kuwait, left unanswered, threatened Saudi Arabia and its vast oil resources, as well. Saddam had set a dangerous example of naked aggression that, unanswered, would ultimately have led to intimidation or more aggression by him and perhaps by others as well. Having defied the United States and the United Nations, Saddam Hussein's prestige would have been high and his ability to secure new allies would have grown. Saddam Hussein was preparing for bigger wars with much more terrible weapons, and that is almost surely what we would have faced in a few years if the world had not responded so resolutely to his aggression in Kuwait.

The use of force will always

powers are largely our friends and allies; even the nations of the former Warsaw Pact seek closer ties with us. The importance of broad international support on security issues was evident in the first crisis of the post-Cold War era. Finally, the gulf war marked dramatically a triumph of quality in American military forces. Our forces in the gulf were the finest America has ever fielded. This, too, marks an important success following many years of effort.

I would like to spend a few moments on these four significant successes for our policies. They will affect American security interests and the American military for years to come. Taken together, , they open the possibility of some additional changes in defense planning and defense programs.

A week after my testimony before

you
last

year, we halted hostilities in Operation Desert Storm, one of the most lopsided military victories in modern history. In 43 days of combat, a coalition of forces that we had helped build soundly defeated the world's fourth largest army on its own doorstep.

The coalition dominated every area of warfare. It defeated not only Saddam's forces, but his strategy. The coalition took full advantage of coalition strengths and exploited fully Iraqi weaknesses. The result was a victory in which the enemy was not only beaten, but also in large measure failed — apart from the use of ballistic missiles to take meaningful offensive action. Thankfully, our victory over Iraqi aggression and the frustration of Saddam Hussein's grandiose ambitions were achieved with miraculously low coalition casualties.

Guarding Security

The budget we have presented will guard our national security interests for today and for the future. We have outlined a responsible program, one sensitive to the reductions in the threat, yet aware of continuing dangers and responsibilities. As the president stated in his State of the Union address earlier this week, "This deep and no deeper. To do less would be insensible to progress, but to do more would be ignorant of history."

The events of 1991 bolstered substantially the assumptions underlying the new, regional defense strategy and gave us added confidence in the base force we had planned for the mid-1990s. In 1991, the West won two, wellnoted victories: one over Iraqi forces in the KTO (Kuwait theater of operations) and one over Soviet communism. But 1991 also marked the culmination of two other success stories. As the Soviet Empire passes, the world's great

military-industrial complex and KGB. The failed coup was a tremendous victory for the democratic forces, accelerating the demise of the center and driving the Communist Party from the political stage. The Baltics won their independence first. Just over a month ago, Gorbachev resigned. The Soviet Union ceased to exist.

remain for us a course of last resort, but there are times when it is necessary. By January of 1991, we had given Saddam every opportunity to withdraw from Kuwait peacefully and thereby avoid war and the cost of continued sanctions. By then, he had made it clear that he considered it more important to hold on to Kuwait and had abundantly demonstrated his ability to impose hardships on his people. Saddam has paid a heavy price for his consistent misreading of American capability and the Free World's resolve.

The war in the gulf was fought with forces built in large part for the Cold War. Victory in the Cold War, for example, made it easier for us to send the VII Corps from Europe to execute the now-famous left hook. But the victory reflected as well some post-Cold War planning and some elements common to the regional strategy of the future.

In late 1989, with the fall of the Berlin Wall and the retrenchment of Soviet power, the department reassessed threats to key regions, including Southwest Asia. For a decade, DoD planning for Southwest Asia had been primarily concerned with a possible Soviet threat to Iran. But the reassessment in 1989 led us to shift our planning focus to regional threats to the Arabian peninsula, particularly from Iraq. This planning shift led to the preparation of concepts of operation, exercises and preliminary planning in the spring and summer of 1990. These efforts gave us an important advantage when Saddam Hussein invaded Kuwait in August.

The West experienced another victory of enormous geopolitical consequence last year -- a victory 40 years in the making. The dissolution of the Soviet Union ended the Cold War; 1989 freed the people of Eastern Europe from Soviet domination; 1991 freed the people of the Soviet Union, as well. These successes vindicate the strategy of containment and its diplomatic and military foundations. This committee deserves great credit for its long and consistent support of that strategy.

When I testified before this committee last year, what Russian President Boris Yeltsin called the "winter offensive" of reactionary forces was in full swing in the Soviet Union. Foreign Minister (Eduard) Shevardnadze had resigned, warning of an impending dictatorship. Shortly thereafter, Moscow tried to crush the democratically elected governments in the Baltics with force. Conservative forces had launched a major effort to remove Yeltsin from power, reverse progress on human rights and attack press freedoms. Economic reform was moving backwards, as the old guard retreated to command-administrative efforts to stabilize the economy. Democratic forces appeared in disarray.

In retrospect, the "winter offensive" was the reactionaries' high point and the beginning of the end for the Soviet Union. President (Mikhail Gorbachev and Boris Yeltsin, along with other republic leaders, forged an alliance last spring geared to manage the devolution of power throughout the Soviet Union. In June, Yeltsin became the first popularly elected leader of Russia in its 1,000-year history. In August, he used his popular legitimacy to face down a coup by hardline forces in the

Uncertain Fate

In its place emerged 12 independent states, 11 of which formed a Commonwealth of Independent States. Their fate is still uncertain. The political and economic futures of the independent states are unclear; in some cases, even their future internal integrity may not be free from doubt. The nature of the commonwealth is still being defined; its long-term prospects will rest in the balance.

The situation facing the independent states of the commonwealth and the Baltics is enormously difficult, a legacy of some 70 years of gross communist mismanagement and disregard for basic human values and of six years of incomplete reform. Last year alone, Soviet GNP plummeted by 15-20 percent. Regional protectionism has stunted trade between republics and other regions. Food, fuel and medicine shortages are rampant.

However, it is also true that there is an historic chance for a successful transition to democracy and market economies in the territory of the former Soviet Union. Yeltsin and the Russian government have embarked on an ambitious program of radical market-oriented reform that includes price liberalization; privatization of trade, services and farming; demonopolization; budget deficit reduction; and monetary reform. The various facets of this program are planned to be in place

Critical Elements

Our experience in the gulf reflects some elements critical to the regional strategy for the postCold War world. We could not have accomplished the gulf victory without significant experience in working with our allies and important nations in the regions. Those years of effort paid off in critical infrastructure, in successful battlefield cooperation and in trust. Similar foresight and efforts will be critical to the success of our regional strategy for the post-Cold War world.

by this April. Economists in Russia and abroad are already criticizing it sharply; many are predicting failure, and no one can guarantee success. But Yeltsin and his government have demonstrated the will to implement some market reforms. Despite the pain they know it will cause the people of Russia in the short run, they seem to understand that this is the only path to a democratic, prosperous Russia.

At the same time, Russia and the other new states are sorting out their relations with each other. The new states have begun a difficult set of negotiations, in the guise of the commonwealth, to sort out their political relations. Future military arrangements are a critical part of this. There have been some tense moments as a result of, for example, Russia's and Ukraine's competing claims to the Black Sea fleet and the military forces stationed in Ukraine. But there have been some successes as well. Most importantly, the commonwealth states have agreed to take a number of steps to place the former Soviet nuclear arsenal under unified control.

First, the four states of the commonwealth on whose territory nuclear forces remain and declared START (Strategic Arms Reduction Treaty)-related facilities are located - Russia, Ukraine, Belarus and Kazakhstan - have all indicated their intent to observe and implement START treaty obligations.

Second, Ukraine and Belarus have expressed their intention to become nuclear-free states, and all nuclear weapons will be removed from Ukraine by the end of 1994. While the record is less clear, it appears Kazakhstan may also in the end become a nuclear-free state. If so, all strategic systems will in the end be deployed on Russian

territory. However, the ultimate disposition of strategic nuclear weapons will take some time to resolve; a deterioration of relations among

the new states could affect its outcome.

Third, with the aid of President Bush's September initiative to destroy or withdraw United States battlefield and sea-based tactical nuclear weapons, it appears that the states of the commonwealth plan for all tactical nuclear weapons — which are clearly the most vulnerable to improper seizure to be consolidated in Russia by July of this year with large numbers scheduled to be dismantled.

Fourth — and perhaps most importantly - the commonwealth leaders have unanimously agreed to retain unified control over nuclear weapons. While final launch authority is vested in the president of Russia, the Mensk agreement specifies that he act only with the agreement of the leaders of the other three republics where nuclear forces remain and in consultation with the remaining commonwealth leaders.

state and the demise of communist ideology has spelled the end of the threat of direct, large-scale conventional military attack on Europe that drove our security policy for the past 45 years. We are no longer engaged in a global confrontation with an aggressive, expansionist state that espouses an ideology inimical to our basic values. For the moment, the new leaders of the former Soviet republics are looking to the West for assistance and advice. Key republics, particularly Russia and Ukraine, even hope to become part of the West. As Russian Foreign Minister (Andrei) Kozyrev recently put it: “The developed countries of the West are Russia's natural allies. It is time to say firmly that we are not adversaries."

It is improbable that a global conventional challenge to U.S. and Western security will re-emerge from the Eurasian heartland for years to come. Even if some new leadership in Moscow were to try to recover its lost empire in Central Europe or to threaten NATO — and I would emphasize that the renunciation of such aims by the new Russian leaders enjoys broad support — the reduction of its conventional military capabilities over the past several years would make the chances for success remote without prolonged force generation and redeployment.

Events are having a sweeping and dramatic impact on the capabilities of the former Soviet military. Readiness and force levels are falling significantly; the draft has had problems; units are being withdrawn from eastern Germany and from Eastern Europe; a large amount of military spending is being diverted to personnel costs from operations and procurement expenditures to prevent a wholesale collapse of living standards for the troops and their families. Troop loyalties are divided and uncertain. Implementation of arms control agreements will further reduce any threatening military capabilities, as will anticipated transfers of significant resources from military to civilian purposes.

Finally, former Soviet modernization programs appear to be slowing down or in some cases coming to a halt. In the current confusion, the

Secure Control

These commitments to keep the former Soviet nuclear weapons under secure, responsible control are important to Americans and to everyone in the world. So far, the nuclear command-and-control mechanisms appear more robust than many would have anticipated. Overall, the commonwealth has so far proved to be a valuable forum for resolving outstanding differences among the newly independent states, including nuclear command-and-control and the fate of the former Soviet military. Whatever the commonwealth's future, this role alone has earned it a valuable place in history.

The dissolution of the USSR as a

system will continue to grind on for some time to come until national planners stop it or convert it, or until the system simply runs out of necessary parts or inputs.

This slowdown has been true even of strategic modernization. We expect continued deployments of land-based ICBMs, specifically the SS-18 Mod 5/6 and the SS-25, albeit at a slower pace. Yeltsin has announced the completion of the Blackjack and Bear H programs, and no new ballistic-missileequipped nuclear submarines are likely to become operational within the decade. Whether this slowing down is due to political will, economic collapse or both, it represents a further encouraging sign that significant, positive change has occurred in Moscow's defense policy.

President Yeltsin has already provided a positive response to the initiatives announced by President Bush in the State of the Union address. We are studying his response closely. It contains a number of positive steps which appear to accelerate the timetable of nuclear reductions envisioned in START and halt many strategic modernization programs. We will be discussing these matters with President Yeltsin at Camp David tomorrow, where we hope to explore some of the items in more detail. These discussions may yield significant progress.

ominous tone: "If the politicians do not decide the fate of the army, the army will decide the fate of the politicians."

Several republics are moving to take over the military forces and equipment on their territory, despite resistance from Moscow. Some units on their own are switching allegiance to republic or even local authorities. In some areas, particularly the Transcaucasus, military units have come under attack by locally armed groups looking to seize weapons and equipment. In the Baltics, the slowness of the withdrawal of former Soviet forces has led to tension between military units and local authorities over logistical support and housing. At this point, we cannot be certain what the ultimate disposition of the former Soviet armed forces will be. While commonwealth leaders have agreed on central direction of nuclear forces, they have been unable to resolve the status of general purpose forces. Some former republics will want their own military forces, while others may participate in commonwealth forces.

My other chief concern about the demise of the USSR is the potential for the further spread of nuclear, biological or chemical weapons technology and the technology underlying missiles and advanced conventional systems. With the cutbacks in former Soviet weapons programs and the rapid deterioration of the Soviet economy, there will be a strong temptation for unemployed Soviet scientists, accustomed to prestigious careers and superior standards of living, to seek employment abroad. Soviet scientists with expertise in nuclear weapons design, plutonium production or

uranium enrichment, or chemical or biological weapons design pose a significant security problem. The Congress and the executive branch have focused on the problem in connection with recent legislation designed to provide up to $400 million to address, among other concerns, proliferation. Realistically, however, we must face the fact that despite our best efforts, some of this technology will slip into the Third World. We will have to be prepared to deal with this problem.

While we have been repeatedly assured by authorities of the commonwealth and of the independent states that all former Soviet nuclear weapons are currently being properly safeguarded and controlled, we will be a lot more comfortable when their levels have been significantly reduced. In addition, the enormous stocks of chemical and biological weapons must be destroyed. As Moscow's destruction capabilities are in some ways limited, particularly for the chemical stocks, we are investigating how DoD can best assist.

The outcome of the transition in the FSU (former Soviet Union) remains profoundly uncertain. The economic situation, particularly in Russia, will be decisive in this regard, and no one has yet successfully transformed a commandadministrative system into a freemarket economy. That profound challenge confronts Russia, which alone will remain a major European power, and Ukraine, which has the potential to become one in the long run.

Troubling Trends

Now that I have given you the good news, let me focus on some more troubling trends. The Soviet army, still one of the largest and most heavily armed in the world, is now an army facing a crisis of identity. It remains the only intact, functioning institution of the former USSR. Yet it has no clear mission, an ill-defined chain of command, and its traditional means of life support are increasingly drying up. The officer corps has become a cauldron of discontent, frustrated by the sudden fragmentation of the force, the loss of social prestige, precipitously declining living standards and the lack of social welfare and protection programs. A popular slogan at the recent all-army officers' conference in Moscow sounded an

Enormous Stakes

The stakes are enormous. If Russia, Ukraine and the other states of the CIS make the transition to a