administration.

The department estimates that the incremental U.S. costs of Desert Shield/Storm will not exceed $61.1 billion. To offset these incremental costs, our allies pledged to contribute $54 billion. Subtracting from the estimated incremental costs these allied contributions and the $1.2 billion in materiel losses that will not be replaced, the net cost to the United States for Desert Shield/ Storm should not exceed $5.9 billion.

As of January 1992, allied contributions are $47 billion in cash and $5.6 billion in in-kind assistance, for a total of $52.6 billion.

After being delayed by the gulf war, force reductions are proceeding rapidly. By FY 1995, the U.S. military will be at the force structure of the base force, which will be about 25 percent smaller than force levels in FY 1990.

Defense personnel totals will fall more rapidly than planned just a year ago. From its post-Vietnam peak of 2,174,000 in FY 1987, active military end strength will be down by 530,000 in FY 1995; by FY 1997 it will be 1,626,000 — about 25 percent below the 1987 peak. In FY 1997, reserve personnel levels are planned to be 20 percent below FY 1987.

For America's armed forces to derive the maximum fighting power from its limited and declining personnel, reservists cannot be exempted from our planned streamlining. As we take down active forces, it is wasteful not to reduce the reserve elements assigned to support those forces. For example, with the elimination of six active Army divisions has to come elimination of the reserve logistics and service outfits that

supported those divisions. Otherwise, those units will have no wartime mission, and their cost will displace genuine wartime needs.

In FY 1997, DoD civilian strength will fall to 904,000 about 20 percent below its FY 1987 post-Vietnam peak. This planned decrease reflects both the shrinking U.S. military strength and DoD management improvements.

The new program adjustments announced by President Bush are consistent with DoD's new acquisition philosophy and reflect the new global security environment.

B-2 Bomber. Capping procurement of the B-2 bomber at 20 aircraft is now possible because, with the transformation of the Soviet threat, America's strategic bomber force is far less likely to face the sophisticated air defenses for which it was designed. The current bomber force of B-1Bs and B-52s can be adapted to ensure that our total aircraft inventory has adequate capabilities for needed strategic nuclear and conventional missions. However, even though B-2 procurement is being curtailed, stealth remains a key advantage in warfare. The department therefore will be initiating vigorous exploration of improved stealth technologies. Estimated net savings through 1997: $14.5 billion.

Completing production of 20 B-2 bombers is wise because it will make possible a supportable special-mission squadron of 16 aircraft, plus four aircraft as backup – for attrition, replacement of aircraft in maintenance, etc. U.S. forces need this capability and the B-2's unique combination of payload, range, and stealth. Moreover, completing 20 aircraft makes the most of monies already committed to the program. Production of

the final four B-2s began with FY 1990 advance-procurement funding. Through FY 1992, the department will have invested nearly $2 billion for materials, subassemblies and initial manufacturing activities for these four aircraft, and they are now over 20 percent complete.

SSN-21 Attack Submarine. The SSN-21 Seawolf is being terminated because the Soviet Union's collapse greatly reduces the U.S. priority given to "blue-water" antisubmarine systems and to countering foreign ballistic missile submarines. The improved SSN-688 submarine is among the most capable in the world and will serve the nation well for many years more. To conserve scarce shipbuilding resources, DoD plans to adopt a lower-cost design that will enable it to modernize, yet maintain adequate submarine force levels. DoD also will continue to develop other ASW (anti-submarine warfare) systems. Only the one SSN-21 already funded will be completed. Estimated net acquisition savings through 1997: $17.5 billion.

Comanche Helicopter. With their focus shifted from a Soviet threat to regional contingencies, U.S. forces can be supported adequately with the existing Apache helicopter fleet (with the planned Longbow fire-control radar upgrade), other very capable helicopters and greater use of unmanned aerial vehicles. DoD therefore will restructure the Comanche light-helicopter development program. The focus will be on building prototypes of the Comanche and emphasizing further development of its avionics, an upgraded engine and a Longbow system for it. Estimated net savings through 1997: $3.4 billion.

Small ICBM. With the Soviet strategic nuclear threat greatly diminished and U.S. strategic offensive forces highly capable and modern, America's need for a landbased small ICBM is low. Silobased Peacekeeper and Minuteman III missiles will keep this leg of the U.S. strategic nuclear triad credible well into the future. Accordingly, DoD will terminate development of the Small ICBM. To help compensate however, for

Minuteman Ills DoD will fund an improved guidance system, other upgrades and various measures to extend their service life. Estimated net savings through 1997: $1.0 billion.

ADATS. Because non-Soviet air threats to U.S. ground forces are limited in number and capability, U.S. forces should be able to maintain adequate air defense assets — air defense fighters, Patriot, Hawk, Stinger, etc. — notwithstanding termination of the air defense component of the Army's air defense anti-tank system. To compensate, DoD will initiate development of an improved antiaircraft seeker and several advanced guidance technologies. Estimated net savings through 1997: $1.7 billion.

Other adjustments. The budget also proposes to end procurement of the advanced cruise missile at 640 missiles, vice the 1,000 previously planned; proceed with RDT&E (research, development, test and evaluation), but not procurement for the Navy's Fixed Distribution System; forego entry into engineering and manufacturing development for the advanced airto-air missile; defer funding for Block III tank development beyond the FYDP; and stretch out RDT&E and postpone procurement for the Army's line-of-sight anti-tank program,

For these new FY 1993 major program adjustments, the cumulative net savings through 1997 will be $42.1 billion. Previously planned major program terminations in the FY 1993 defense request will save an additional $7.4 billion in FY 1993-97.

The new program adjustments highlighted above come on top of DoD's earlier program terminations. In the previous two years, we have terminated over 100 weapons programs, including the Apache helicopter, M-1 tank, Trident submarine, F-14D remanufacture, F-15, F-16, naval advanced tactical fighter, A-12 stealth aircraft and Peacekeeper missile.

for FY 1992. In addition to these terminations, the rescission proposal includes numerous programs that DoD did not request and that do not address genuine defense needs. Congressional support of these rescissions is essential, if DoD is to make the most of ever-diminishing defense resources.

The rescission request will not only prevent spending on unnecessary programs, it also will help fund DoD environmental needs, which have grown considerably. Our planned budget authority for environmental programs for FY 1993 is $3.7 billion. Increased environmental spending supported by these rescissions will enable DoD to accelerate its cleanup work at previously contaminated sites, more carefully ensure compliance with environmental regulations and increase pollution prevention and protection of natural and cultural resources.

Readiness. The FY 1993 request provides for the training, maintenance and other requirements needed to continue the high readiness achieved by U.S. forces over the past decade. 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 crew. Navy steaming days remain at 50.5/ 29 days per quarter for the deployed/non-deployed fleets. Flying hours for active Air Force tactical aircrews will hold at about 21 hours per month.

Nuclear forces and strategic defense. The budget request carries forward changes in America's nuclear posture called for by the START treaty and by President Bush's initiatives. Funding for strategic defense programs remains a high priority with a request for

$5.4 billion in budget authority in FY 1993, up from $4.1 billion in FY 1992. The FY 1993 request includes $1 billion for Theater Missile Defense programs.

RDT&E. Reflecting DoD's emphasis on leading-edge research, funding for science and technology - which is research not geared to a specific weapon -- will climb to $12 billion, from $10.6 billion in FY 1992. Total RDT&E will experience 1.5 percent real growth in FY 1993.

National Defense Stockpile. Largely because of congressional restrictions on its acquisition and disposal actions, the National Defense Stockpile now contains about $7 billion worth of materials excess to DoD requirements for full-scale military mobilization. Yet Congress is still requiring DoD to upgrade certain NDS metals, already in excess of requirements by 1.3 million tons, at a price exceeding the open market by 64 percent. To reverse this waste, DoD has proposed legislation to enable it to sell up to $650 million of excess materials per year and to use the proceeds and available cash balances to fund high-priority environmental projects. The department also seeks legislation permitting the secretary to impose a moratorium on unneeded NDS purchases.

Base closure and realignment. The department's recent announcement brings to 441 the number of overseas bases and sites that will be returned to host nations, with another 51 that will be reduced or placed in standby status. These announced actions affect about 30 percent of the U.S. overseas base structure. Eventually DoD expects to reduce its overseas base structure by almost 40 percent. The 1988

Environmental Needs

Savings from DoD's new program terminations are reflected in the budget request's proposed rescissions, which total $7.7 billion

and 1991 base closure commissions have closed or realigned about 9 percent of the domestic military base structure. However, there is still more to do to bring the domestic base structure in line with planned force reductions and to avoid wasting money on unneeded defense infrastructure.

Defense Management

Forceful and imaginative management is critical to the challenge of streamlining America's defense posture wisely and making the most of our diminishing budgets. The department's guide for doing that continues to be the framework that grew out of my July 1989 defense management report. The philosophy behind our DMR-related management improvements is to centralize policies, standardize and simplify procedures and systems, and decentralize execution and implementation. We are working to improve operations and cut costs by streamlining management structures, cutting excess infrastructure, eliminating redundancies and initiating sound business practices throughout DoD.

In reforming defense acquisition, we have examined 500 directives and identified almost 400 for cancellation, consolidation or

revision to make them less burdensome. We have reviewed over 35,000 military specifications and standards, and are working to replace as many as possible with commercial item descriptions. We are pursuing multiple paths to improve the quality and professionalism of our acquisition work force. Finally, we are experimenting with various private-sector techniques to improve our management of defense programs. For example, a Defense Business Operations Fund has been established to make more visible to DoD managers the complete cost of their organizational outputs, thereby facilitating more informed decision making. Other initiatives include:

Creation of the Defense Finance and Accounting Service to improve these services and reduce costs;

O Creation of the Defense Commissary Agency to provide the centralized management necessary to achieve the economies available to large supermarket chains;

Consolidation of most DoD contract administration under the new Defense Contract Management Command;

Increased competition between supply depots and better utilization of depot capacity;

O A Corporate Information Management initiative to integrate and streamline a multitude of DoD business functions;

Consolidation of general supply functions under the Defense Logistics Agency;

Improved management of and reduction to DoD logistics inventories;

Consolidation of Army intelligence activities and streamlining of the Army's Criminal Investigative Command.

DMR-related management improvements throughout DoD will result in FY 1991-97 savings of about $70 billion.

The decisions on defense that Congress faces in the coming months are at least as important as those made at the height of the Cold War. We are going through an historic transformation which will determine how well prepared our nation will be for future security crises. I look forward to working with this committee to ensure that we carry out this transformation as wisely as possible.

Published for internal information use by the American Forces Information Service, a field aclivity of the Oilice of the Assistant Secretary of Detonse (Public Altairs), Washington, D.C. This material is in the public domain and may be reproduced without permission.

UNIVERSITY OF VIRGINIA

ALDERINGERARY

OF

IMUNT

APR 24 1992

DEPART

DEFENST

GOVERNANT DOCUMENTS

Building the Base Force

Prepared statement of Gen. Colin L. Powell, USA, chairman of the Joint Chiefs of Staff, to the Senate Armed Services Committee, Jan. 31, 1992.

responding to the fundamental changes taking place around the world, to the radically altered security and threat environment, and to the economic realities we face as a nation, while safeguarding our national security.

... It is ironic that only 11 months after the conclusion of Operation Desert Storm, the principal purpose of my appearance here today with Secretary (of Defense Dick) Cheney is to outline further the sweeping reductions now taking place in the size of our military structure to bring us down to what we have called the base force — the right size force needed to deal with the new geopolitical situation as it has evolved to date and as we expect it to evolve in the future.

America's armed forces today are the proudest, best-trained, bestequipped, most capable fighting force in the world. The critical task of Secretary Cheney and myself over the next year will be to preserve the capability that enabled us to achieve such an overwhelming and decisive victory in the gulf and to do it while implementing these widespread reductions in our military forces. To be successful, we will need the Congress' help and support in ensuring that these changes are carried out wisely, cautiously and judiciously.

Several times during the past year, I have appeared before the Congress to outline both our evolving military strategy and our changing force structure. Recently, you received several documents, including the just completed National Military Strategy, which provide additional information on our response to the changes in the world and our resulting security requirements.

Today, I plan to update you on how the United States military is

Strategic Landscape

Over the short span of the last three years, we have witnessed sweeping changes in the world that directly affect our strategic focus. The Berlin Wall fell, the Warsaw Pact dissolved, Germany reunified, democracy took hold in Eastern Europe and grew stronger in Latin America, an international coalition successfully defeated Iraqi aggression against Kuwait, communism collapsed in the Soviet Union and Eastern Europe and, finally, the Soviet Union ceased to exist, replaced by the Commonwealth of Independent States. Today, global war is far less likely because the principal threat which has guided our military planning over the past 45 years — a Soviet onslaught into the heart of Western Europe - has disappeared.

These changes have already been reflected in our National Military Strategy. Equally important, many of the favorable developments which have taken place were anticipated and planned for in the design of the base force. We purposely designed the base force to be able to adapt and adjust to a rapidly changing and evolving world. Obviously, as that world changes, our strategy and accompanying force structure will change with it. The additional cuts an

nounced by the president earlier this week, prepared with the full knowledge and assistance of Secretary Cheney, myself and the service chiefs, confirm that we are continuing to adapt, restructure and reduce our forces as appropriate and prudent without undue risk to our national security.

It bears repeating that our defense budget has already been shrinking since the mid-1980s — 29 percent, in real terms, since 1985. By 1997, the real reduction in buying power will be almost 37 per cent. Today, we have the smallest active duty military since before the Korean War — before we have even fully implemented the base force.

Nor are we simply cutting across the board, without any thought to reshaping the forces to fit the new world we face. In August 1990, when he first outlined the new strategy, President (George) Bush said, “The United States would be ill-served by forces that represent nothing more than a scaled-back or shrunken-down version of the ones we possess at present." The president was well ahead of his critics when he explained further that "what we need are not merely reductions but restructuring."

As we accomplish this restructuring and survey the strategic landscape, we must recognize that we are the pre-eminent force for stability in the world. We are also the world's sole remaining superpower. Seldom in our history have we been in a stronger position relative to any challengers we

1

focus from a single monolithic global scenario to an array of regional scenarios — similar to the type we experienced in confronting Iraq in the gulf.

The Threat

The decline of the Soviet threat has fundamentally changed the concept of threat analysis as a basis for force structure planning. We can still plausibly identify some specific threats — North Korea, a weakened Iraq, perhaps even a hostile Iran. But the real threat is the unknown, the uncertain. In a very real sense, the primary threat to our security is instability and being unprepared to handle a crisis or war that no one expected or predicted.

To hedge against uncertainty, we must structure our forces relative to the capabilities of other military forces in regions where we retain vital interests, whether or not there is a specific, well-defined military threat, and ensure that we have the ability to carry out a wide

range of tasks.

might face. This is a position we should not abandon. As a people and as a nation, we cannot ignore our responsibility to help lead the world community along the path to peace and prosperity.

Those who would have us retreat from our position of leadership and involvement to one of disengagement and isolationism would do well to remember history. It is widely recognized that our precipitous withdrawal from the world during the 1920s and 1930s contributed to the causes of World War II. Moreover, our rapid demobilization after World War 11 helped create the circumstances which led North Korea to attack South Korea. Now, as we stand poised to reap the benefits of winning the Cold War, we must prevent a return to the mistaken isolationism of the past.

We must remain engaged. Our allies around the world want and expect us to do so. Our continued presence in Europe undergirds stability in the West while helping to build stability in the East. Our engagement and presence in the Pacific for over 40 years have provided a security shield for us and our friends in that region.

In response to the requirement set forth in the 1991 Defense Authorization Act, the new National Military Strategy has just been completed and delivered to you. We are proud of it and believe that it accurately takes account of the changes in the world and preserves the capability and flexibility we need to protect our nation's security.

You will see that we have dramatically altered the strategic assumptions upon which we build our forces. We no longer plan to be able to fight a major war in Europe on short notice, nor the global conflict such a major war presupposes. This change alone has had profound implications for how we plan and structure our forces both in Europe and in the continental United States.

The growing uncertainty of the international security environment makes it increasingly difficult to predict and estimate the circumstances under which U.S. military power might be employed. Therefore, we have shifted our planning

When I first became chairman, if someone had asked me to bet on whether we would be involved with major deployments to Panama and the Persian Gulf within the space of 18 months, I would have given high odds against it. That is why we must build into our forces varied capabilities and versatility — to respond to unexpected crises.

Thus, the strategy recognizes a historical fact — for the most part we have fought wars or dealt with crises using forces that were not specifically prepared or purchased for that particular contingency. For World War II, for Korea and for Vietnam, we used our neglected pool of general purpose forces until we could rebuild a warfighting force. We did not have forces tailored to "the Panama threat" or "the Iraqi threat." In each contingency we used general purpose forces and, in the case of Desert Storm, we also used forces brought from Europe, where they had been deployed to address a far different threat.

I cannot tell this committee where the next (Manuel) Noriega or Saddam Hussein will arise to threaten stability in the world, but you can be certain that somewhere

it will happen. It may be in the Middle East, in Europe, in East Asia or in Latin America — wherever it occurs, we must be prepared to respond. The key to preparedness is building forces flexible enough to react to the unknown.

As you review our strategy, you will see that deterrence remains the primary and central motivating purpose of our national military strategy. The fundamental objective of America's armed forces will remain constant: to deter aggression and, should deterrence fail, to defend the nation's vital interests against any potential foe. Our national military strategy is built upon four foundations which I have referred to previously: strategic deterrence and defense, forward presence, crisis response and reconstitution.

While recent arms control agreements and unilateral initiatives will allow us to achieve real and substantial reductions in our strategic nuclear forces, we must continue to maintain a modern, fully capable and reliable strategic deterrent and develop a defensive system for global protection against limited nuclear strikes.

Over the past 40 years, the dayto-day presence of U.S. forces in regions vital to our national interests has been key to averting crises and preventing war. Our forces deployed throughout the world show our commitment, lend credibility to our alliances, enhance regional stability and provide a crisis-response capability while promoting U.S. influence and access. Although the numbers of U.S. forces stationed overseas are being reduced significantly, the credibility of our capability and intent to respond to crises will continue to depend on maintaining forward-presence forces capable of joint and combined operations.

The capability to respond appropriately to regional crises which affect our interests is one of the key critical requirements of our strategy. Such crises can include a wide range of contingencies and potential levels of force. Some contingencies may occur on short notice, and U.S. forces must be able to respond rapidly to deter and, if necessary, to fight. The ability to reinforce our forward