gram) for instance, have not?

Cheney. That's right.

today, at Hill Air Force Base (Utah), started offering a bunch of midcareer enlisted men bonuses to take early retirement or face possible forced retirement. I'm interested, is that just Air Force-wide? Is it all service-wide? Does it just affect Hill? Where are you going with that kind of a program?

Cheney. Our efforts at reducing the size of the force focus primarily on trying to do it through attrition so that we don't have to run a RIF - a reduction in force - where we have to go out and round up a large number of people and in fact fire them. It's a very complicated process to manage the force structure that way. It's a living, dynamic being. You've got people coming in, people serving, people retiring. So we've tried to do it in an intelligent fashion. Last year Congress gave us the authority to offer bonuses to people who voluntarily separate sooner than would have otherwise been the case. We got the so-called voluntary separation incentive program. We're working through the manpower shop in the Office of the Secretary of Defense, working with the services to put together programs to provide incentives for people to depart in those still categories where we have a surplus at levels of seniority where we can afford to or need to be able to reduce the force structure.

Each service has a somewhat different kind of a problem that they're trying to deal with, but the overall effort will be to do it in a way that keeps faith with our men and women in uniform. It's an allvolunteer force. Nobody's ever taken down an all-volunteer force before. It's always been a large draftee Army or service that we were cutting back. So there is a special obligation, I think, to try to do it in an intelligent fashion. Congress has responded, given us some of the incentive authorities we wanted, and we're now beginning that process. I'm not familiar with the details of the situation at Hill Air Force Base.

Q. Just to follow up, what do you anticipate this calendar year perhaps in terms of bonus for early retirement and expectations for acceptance of the bonuses and folks departing?

Cheney. Our hope is that we've got enough of the system of incentives so that we will be able to avoid the so-called reduction in force. I do not yet know, I am not able to say definitively whether or not that's the case. We'll be happy to provide you with additional details, if you want to get into it on a service-by-service basis. You might want to direct those questions to the service reps when they're up here.

Q. Why does the logic that you applied to the Comanche and to the Seawolf not apply to the F-22? Why do you go ahead with those and then not just putting them on the shelf?

Cheney. The F-22 has already been through a different process in terms of its background and the way it was developed. We, of course, last year had the fly-off between prototypes developed by the two contractor teams. The program appears to be well in hand, moving forward without any significant problems at this point. And I think it's vital that we do what we have to do to guarantee that we'll always be able to maintain our superiority over any future battlefield. The F-22 satisfies those requirements. It's in the development stages now. It's different than the B-2 or the SSN-21, which were in full-scale procurement, if you will. We're buying the full-up models. And the F-22, I think, could be best described at this point as in the developmental stage and doesn't go to production, don't believe, until '96.

Q. It's been through all of that prototyping stage which the LH (Army light helicoper program) and the AX (Navy attack fighter pro

Overwhelming Edge

Q. I was referring to the need for continuing to press the envelope of technology. I mean, we live with the Apaches (helicopters) upgraded rather than the Comanches (helicopters). Why can't we live with the (F-)15s and the (F-)16s upgraded, rather than going to the new ...

Cheney. Well, I think it's a judgment call of the relative capabilities that are deployed out there against us. I think the edge, for example, with respect to the M1A1 tank is pretty overwhelming at this point. We think we can defer production of the Block III tank. It's my judgment that the F-22 is something we do need to pursue, given the length of time it will take to get it into the force in a significant way

it will be after the turn of the century -- given the age of the existing systems — the F-15s that it ultimately will replace. You know, that whole complex series of judgments leads us to believe, led me to believe this year that we ought to continue with the F-22 without fundamental alteration of that program.

Q. Do you have any new arguments to convince Congress to cut reserves, when they wouldn't last year?

Cheney. Well, Congress 1 don't want to overburden them with praise— but they didn't do too badly by us last year. We did, in fact, get authority to cut roughly half of the reserve force structure we asked for. I think we asked for 107,000, and we ended up with something under 60,000. That's

and we don't think we ought to change that plan every six

months or 12 months, based upon developments either on Capitol Hill or overseas. We also, I think, go back and look at it that base force is built upon a structure of the national strategic assumptions that underlie it.

not perfection by any means, but I've served in Congress long enough to know that they rarely achieve perfection up there.

I was told when I got this job that you'll never close any bases, you can't close bases, it's impossible to close bases. But we are now well on our way to doing exactly that. The base closing commission process has worked, I think, extraordinarily well. We got a big package through in '91. We've got authority to come back in '93 and '95 with additional submissions. So I guess you'd have to say I'm an eternal optimist when I think we'll get the Congress to agree to further cuts in the guard and reserve structure. But the alternative to not cutting the guard and reserve force structure is to keep units that no longer have a mission and to end up spending money in what I consider a wasteful way when the alternative is to spend it in a manner that will guarantee the quality of the force and our ability to prevail in future conflicts. So I have to do what I think makes sense, based on the advice I get from Gen. Powell and others. We feel very strongly that it's important to take down guard and reserve force structure, just as we take down the active duty force structure.

Q. The room looks a lot different than it did even a year or two ago when the base force concept was first put forward. I know you touched on this briefly in your remarks, but I wondered if you could elaborate a bit on why the force structure has remained essentially unchanged despite the changes we've seen just in the last six months.

Cheney. Well, I'd rephrase your question for you. I would not buy the proposition that the force structure has remained essentially unchanged. It's changing dramatically. What has not changed is the basic plan. That is to say, we produced a plan for a 25 percent reduction in strength in the overall force structure. It's heavier, for example, in active duty divisions in the Army than some of the other services. We think that plan's a good one. It moves us in the direction of dramatic change in the overall size of the U.S. military,

field increasingly sophisticated types of weapons systems. And therefore, what we've gone after in our own budget in response to those changes is to change our own modernization plan in significant ways and change our whole acquisition strategy. That's a pretty fundamental change. It does not go to force structure. But you don't always respond to some change in the world with a change necessarily in our force structure.

Q. Mr. Secretary, what are the long-term implications here for the service academies? Will their operations and budgets be scaled down in any significant way in the years ahead?

Cheney. I don't believe there's certainly nothing in what I've announced today that entails any change in the service academies. They'll continue to be an absolutely vital part of our overall program of training and recruiting officers for the services. We've got other sources, too, that are extremely important, like ROTC. But there's nothing embodied in this budget that changes that many of them.

Q. Last year we started a 10 percent reduction that begins in a couple of years.

Cheney. And that's not changed.

Strategy Report

Let me comment to all of you, too, if I can, (on) the national military strategy ... that's been prepared by the chairman and the Joint Chiefs and released, I think, today. It addresses this issue in some detail. But if you believe, as we do, in the fundamental proposition that we want to retain our strategic deployment and deploy strategic defenses, that we want to remain forward deployed overseas in Europe and the Pacific, as was just demonstrated up here, deploy a crisis-response force here at home and have the capacity to reconstitute forces those are sort of the four basic elements of that new regional strategy – then we need the base force that is, in fact, that we've recommended to the Congress. We think we need 12 active Army divisions made up as currently planned — the 82nd Airborne, the 101st, the 7th Light, the 24th Mech, etc.

We got to that point, as I tried to mention in my opening remarks, based upon starting - scrapping the old assumption of the all-out global war that would begin with a land attack by the Soviets into western Europe, the focusing on regional contingencies. And we think we need that size force in order to be able to implement that strategy. Now nothing has changed with respect to that fundamental set of assumptions. What has happened, of course, is that in the Soviet Union, it's disintegrated fairly rapidly. But we had continued positive developments in our new strategy, anyway. What has happened in the Soviet Union that most dramatically affects our plans is that hadn't already been taken into account - is the pace at which we think they will modernize their forces in the future.

As I mentioned, the extent to which their economic collapse will make it more difficult for them to

Industrial Base

Q. What alterations in the defense contracting procedures will you implement to entice industry to build a prototype, without any promise, or sometimes hope, of production.

Cheney. I'm going to ask Don Atwood to comment on that.

Atwood. There are two concerns that we have about the defense industrial base. One is we'll be purchasing fewer goods, fewer production goods. The other is the concern that in the past the method of contracting with industry has either encouraged them or they've encouraged themselves to buy in on the research and development phase. Always in the back of their mind, they could get well in production. I think that's a cruel mistake and something we have to rectify.

As you know, we've tried to rectify that whole business and

notion that we have to maintain our technological edge. That it is our qualitative superiority that led us to destroy Saddam Hussein's forces in the gulf with relatively few casualties on our side. It's our qualitative superiority throughout the Cold War that led us to offset the quantitative superiority that the Soviets fielded, and we don't want to lose sight of that basic fundamental proposition.

a

eliminate where there is development, where there's technical risk, a programmatic risk, eliminate fixed-price contracts and go to costreimbursement contracts. We need to be sure when we contract with industry on these research and development programs that they have an opportunity to make an equitable return on their investment and a reasonable profit. If they do that, then I think they will be encouraged, particularly those with high-technology capability. And again, I repeat, although we're cutting back in the amount we produce, it still is over $50 billion a year worth of acquisitions. So it's a good incentive for these contractors.

Cheney. Let me add just one thing to what Don said, too point I probably should have made clear earlier. When we talk about prototyping, we are not talking just about sort of building one of something and putting it on the shelf. We well understand that the process of developing a new weapons system involves not only developing the technology and engineering it into a weapon. It also involves developing the production process and understanding the manufacturing process that would allow you to produce it in significant numbers. It also involves building enough of a particular item to get operational experience with it, to be able to field it with the force in sufficient numbers so that we can develop the doctrine that goes with it.

The story that I'm reminded of often is that the Germans did not invent the tank before World War II, but they did develop the doctrine that made it possible to use it very effectively in armored warfare, and so we have to keep that in mind as well. We're not talking about just building one or two items and putting them on the shelf.

Q. Mr. Secretary, the figures for the military intelligence operations are of course not broken out, NSA (National Security Agency), etc. Can you tell us in general, though, whether you're cutting them back at roughly the same rate as everything else? Are you protecting intelligence as a special forcemultiplier?

Cheney. I don't want to get into

that area, obviously, because it's classified. Let's just say (CIA director) Bob Gates is a happy man. OK?

Q. Sir, are virtually every research program and in full-scale development and constant exploration — are virtually all those programs candidates to be brought under the new acquisition policy? Except for the F-22 which you've ...

Cheney. Well, it depends in part on the stage that the programs are at. The C-17, for example — we're not going to go back and undo in any regard. But I think the point Don makes with respect to the acquisition strategy is that to the extent that we have always begun, for example, when we did the major aircraft review shortly after | came on board — the starting point is always what's the threat? Analyze the threat, what kind of capability are we going to be up against in the future?

That threat briefing was always based upon our assessment of what the Soviets were doing, how soon they'd feel the new capability, and then you would begin from that point forward to develop our own capabilities in a time frame by which you expected you had to have them in the force. Clearly, that basic fundamental first set of assumptions about what the threat's going to be is what's changed so dramatically and what allows us now to back off the process, not pursue it in as aggressive a fashion as we have in the past, in terms of getting new equipment fielded to the force and being able to take more time to do it right; continuing, though, to recognize the absolutely vital principle that's been followed by the United States for a long time, that will continue to be crucial as long as I'm secretary, and that's the

Medium-Lift Issue

Q. Mr. Secretary, the V-22 is a question that won't go away, ! guess. Some think that you may be rethinking your decision. Is that possible? And in light of

your regional defense strategy, what will you have for medium lift, if not that, and if I can follow on also with a question about the F-16. You were going to build 24 this year; why don't you need that, those 24?

Cheney. With respect to the F16, we shut down after last year, 1 guess, was the closeout? 24 airplanes in '93 for the (F-)16. That's in the budget. Yeah.

With respect to the V-22. I sometimes have the feeling the last question I will answer as secretary of defense is, “What about the V22?" It was not an affordable proposition in 1989 - $300 billion ago in our long-range defense program. I have trouble seeing how it is an affordable proposition in 1993, given the tremendous reduction we've seen in the overall level of defense spending. We do have directions from the Congress that we inherited, that were passed to us at the end of the last session, that direct us to look at how we can move forward on the V-22, converting the money into building, I guess, production prototypes ... There's a question whether or not it is an executable assignment, given the

level of funding that's available, and it is currently under review by Don Yockey, the undersecretary for acquisition. I had a meeting with him not long ago on it. He's looking to see how we respond to the congressional mandate that we've been given at this point. And I don't have that answer for you yet. There's still a lot of information out. I am concerned about the mediumlift problem for the Marine Corps. We've been in sort of a standoff with the Congress, with the Congress saying build the V-22, but not funding it very aggressively, and with us saying down here, the department, we don't want to build the V-22, we want to go back to a more conventional approach with respect to satisfying the Marines' need for helicopters. That standoff does run the risk that sooner or later we'll have something of a train wreck here. We need to avoid that if we can. It's important for us to get the matter resolved and address the long-term needs of the Marine Corps for a medium-lift vehicle of some kind. But a lot of that's going to turn on the outcome of the work that'scurrently under way with respect to Don Yockey and the V-22.

Q. What's behind your decision to maintain the Burke destroyer program?

Cheney. The program's in good shape. We commissioned the first one last July 4th down at Newport (News), and it's well along in terms of development and production at this point. I don't see any reason to shut it down or close it off. We have cut it back, but we will go forward with the DDG-51.

expensive to keep both of them open. But if you take it from Bath, you lose a shipyard. So do you have any program or plans to keep some of this industrial base going before you get in production? ... What about sealift? Does that fit into any of this?

Cheney. We are going forward with a specific proposal on sealift. I might ask the chairman to say a word about that as soon as I respond to your industrial base question. With respect to the industrial base, it is a problem, that's a problem in a number of areas. It's a special problem in the area of our nuclear-capable shipyards, both with respect to submarines and carriers. I can't give you a definitive answer at this point as to exactly what that structure is going to look like down the road. As we've gone through this massive change in the Soviet threat, the collapse of the Soviet Union, we now have to go back to the drawing boards in many areas in terms of looking at what kinds of forces we need, how we take our existing inventory of capability and perhaps stretch it over time, how we can modernize and improve it, when it needs to be replaced; and how we protect the industrial base allows us to do all of that. The chairman just briefed on what's happened to our nuclear stockpile if all of those things are developed. If we look at the question of nuclear submarines, I think we have to now go back to the drawing board, so to speak, in terms of figuring out exactly what kind of nuclear Navy we're going to need with respect to submarines in the future. As I mentioned before, I have tasked the building (Pentagon) within the last couple of weeks to go do this analysis, but we've got to look at what the long-term threat's going to be, what is going to happen to the Soviet navy. Basically today there's only a very small part of the Soviet navy even operating. Most of it's tied up at the docks. Are we going to see anybody else develop or the Soviets continue to develop new capabilities in that area that can threaten clear-cut superiority, for example, of the (SSN-1688-1, our current nuclear attack submarine.

We've got to look at the inventory of existing platforms, those 85

that are currently operational, and decide how fast we want to bring them out, whether or not some of them can be stretched, whether or not we can change our optempo, for example, change our deployment schedule, and extend the life of some of those submarines. We've got to look at the question of whether or not we've got all of our work in both the public and the private yards, not only with respect to construction, but also with respect to refueling, properly allocated. We've got to look and make certain that we're maximizing the efficiency not only of what we do with respect to the submarines, but also with respect to the nuclear elements that go into our carriers. We've got to back and analyze all of that in terms of making a decision about how we're going to proceed to the future. I have in fact given such instructions, signed out a memo Don Atwood, I guess, signed it out just within the last week — that task the Joint Chiefs, the Navy, the procurement and acquisition folks, to begin to look at all of those questions and get back to me within six months, 180 days, with their preliminary assessment of how we do that. So we're very much aware of the problem. I don't have any quick and easy answers for you today on it, though, as to how to deal with it. There is a significant backlog of work currently at both Newport (News) and Electric Boat. There are 13 or 14 688s still in the various stages of construction, six Tridents under construction and, I believe, three CVNs under construction as well. So there is work there for the next few years. When you get out to the middle and the latter part of the decade, clearly then we run into the problem you cite, that there's a danger that we could conceivably lose part of that industrial base. We don't want to have that happen unless we make conscious decisions as to how we're going to protect what is essential about that capability.

Production Bridge

Q. I have a question on the industrial base and shipyards in particular. Would your submarines program and canceling Seawolf, holding it up to prototype, you have a gap: The work at Electric Boat runs out in '97, and there'll be a gap before you can get into Centurion, I am told. Do you have any plan that would kind of bridge that with something for a shipyard to keep it open before you start a new program? And similarly with the destroyers, the ones that are being built in Bath (Maine) and down at Pascagoula (Miss.), it's more

Mobility Study

Powell. We just finished a mobility-requirement study, which took a look at our ability to project forces to different parts of the world, as a result of our Desert

Storm experience. And we have sent that study to the Congress, and it will call for a number of sealiftenhancement initiatives. We'll be purchasing more dry cargo ships, more tankers, increase the readiness level of our Ready Reserve Fleet. We'll buy some pre-positioning equipment, or ships, rather. We'll pre-position some additional heavy equipment afloat (for an) Army heavy brigade. We will also buy additional surge sealift to compensate for some of the problems we had in Operation Desert Shield. We will use $1.9 billion of money previously appropriated by the Congress, and there'll be an additional $1 billion which we have added to the '93 submission.

Q. Could you walk us through this bomber conversion that you talked about a little bit earlier, the B-52 fleet conversion from strategic to conventional?

Powell. Well, of our strategic bomber fleets, B-52Hs, B-1Bs and the B-2s when they come in, the president's initiative calls for some substantial portion of that fleet to be converted to principally conventional use. Now, under the START rules, if you're going to convert it to START standards, you have to really do a hardware job on it. What we have more in mind is discussing with the Soviets a proposition whereby they would still count under START rules, but we will operate them in such a way and base them in such a way that clearly they are no longer performing a strategic role. So that's one way of getting around the difficult START constraints. But this is something we will negotiate with the Russians. Q. And what do

you do with the missiles and the warheads, assuming

Powell. That which is no longer needed for SIOP purposes will be eliminated from the inventory.

Q. You'll destroy the warheads rather than just stockpile them?

Powell. I'm not prepared to get in the level of detail. I can assure you, if we don't need it, we want to get rid of it.

Q. General, excuse me, when you talk about buy, does that mean buy or build?

Powell. Buy and build. In some

cases, there is a limited amount of purchase of ships that are available on the market, and there is also new construction in U.S. yards.

Q. Also, general, I was wondering, what do you have in mind in terms of the portion of the strategic fleet — bomber fleet that you want to convert to conventional use?

Powell. We haven't made that judgment yet.

Q. Will you buy foreign-made ships?

Powell. We will see what's on the market. Some of them are foreign-made, and we'll have to examine that very carefully.

Q. Mr. Secretary, the Soviet threat has collapsed, but the Russian scientists and engineers who were behind that threat still exist. How urgent is the problem of the proliferation of that knowledge and that technology, and what are you recommending to the president to do about capturing it or neutralizing it?

Cheney. The problem of proliferation continues to be a priority for us with respect to the former Soviet Union. I have been, I think it would be fair to say, favorably impressed with the way in which they've gone about maintaining controls over their weapons systems, over both their strategic and their tactical systems.

They've maintained the integrity of their command-and-control network. They have been very active and aggressive in gathering up their tactical nukes from around the republics and bringing them back to Russia, and tell us that they'll have everything consolidated in Russia, all the tactical systems, by the middle of the year. President Yeltsin's recent statements in the last day or two indicate that they are prepared to accelerate the dismantlement required under the START treaty as well. And these

are all subjects we'll discuss with them this weekend. The other areas of proliferation concern, aside from the issue of weapons, which as I say, they seem to have well in hand at this point, the question of personnel and general know-how, technology, the capacity to produce not only nuclear weapons, but other weapons of mass destruction, perhaps biological or chemical capabilities, ballistic missile capabilities — all of the other kinds of sophisticated military know-how that the former Soviet military developed over the years.

There, it's a much more diffuse kind of a problem. It's much tougher to get your hands on. We have discussed it with them. We'll continue to discuss it with them. We have some $400 million in our budget that might be of value that Congress put in there, might be of value in trying to control that spread of technology. But it is a worry for us. It is a subject that we'll discuss, I would expect, with President Yeltsin this weekend up at Camp David and was discussed recently by (Undersecretary of State for International Security Affairs) Reggie Bartholomew on his trip to the Soviet Union. And it's a subject that we'll continue to work. You cannot guarantee from our standpoint, though, that some of it is not ultimately going to seep out. Whether it's a scientist, an engineer, plans, a team - I think we have to assume that there will be some seepage outside the boundaries of the former Soviet Union.

Q. Is hiring some of those people an option, moving them physically from there to here?

Cheney. At this point, of course, I'm so fixated on reducing the size of our own work force ... I haven't spent a lot of time thinking about hiring Russians. It may be that there are ways in which there could