Office of Management and Budget Print this document

June 8, 1999


(Sponsor: Stevens (R), Alaska)

This Statement of Administration Policy provides the Administration's views on S. 1122, the Department of Defense Appropriations Bill, FY 2000, as reported by the Senate Appropriations Committee. Your consideration of the Administration's views would be appreciated.

The Committee has developed a bill providing requested funding for many of the Administration's priorities. We appreciate the Committee's decision to address readiness and modernization efforts. We strongly urge the Senate to keep the bill free from extraneous provisions. However, S. 1122 raises several budgetary and policy concerns, outlined below.

Funding Levels

The Committee bill provides funding requested for many of the Administration's priorities. However, the Administration is concerned that the Senate bill, which exceeds the President's budget by nearly $1.4 billion, will drain critical resources from other programs. When combined with expected defense increases in other Senate bills, defense funding would exceed the President's request by about $5 billion. The Administration believes that the President's budget request correctly addresses our most important military needs and that this additional funding is not necessary. The bill provides funding for a number of projects that are either not critical or are, according the Department's plans, premature. In addition, a number of important programs are underfunded.

While the Administration is pleased that S. 1122 endorses key elements of the President's plan to improve military compensation, we are concerned that the bill's military pay increase for FY 2000 exceeds the request by about $170 million and would exceed the defense program for FY 2000 - 2005 by $1.4 billion. The Administration is also concerned that the bill would create a disparity with civilian pay raises.

Incremental Funding of LHD-8 Amphibious Ship

The bill would provide $500 million for advance procurement and construction of LHD-8, a large-deck amphibious ship for the Marine Corps. The bill also directs that the Navy fund the balance of the acquisition costs incrementally. The Administration opposes incremental funding of major weapon systems, including construction of ships. Incremental funding would make completing construction of this program dependent upon the action of future Congresses. Moreover, to continue construction of LHD-8, the incremental funding approach would require the Navy to identify funds for LHD-8 in each year of its long-range plan that are not currently budgeted. These funds would have to come at the expense of other important programs. The Administration supports acquisition of LHD-8 and plans to fully fund this ship in FY 2005, when construction is required to begin in order to meet current ship replacement schedules.

Unrequested Funding for Modernization

The Administration opposes funding increases proposed for procurement ($2.4 billion) and research, development, test, and evaluation ($1.9 billion) programs. The President=s budget represents a calculated balance between readiness and modernization programs that supports current needs and long-term modernization priorities in the context of overall government priorities. The bill includes several items which are not in DoD's long-range plan, including $300 million for the National Guard and Reserve Equipment account, $87 million for one EC-130J aircraft for the Air Force, and $25 million for Navy Hellfire missiles. The bill also includes $611 million to fund additional aircraft for all services which are in the long-range plan but not required in FY 2000. These aircraft include C-40 and C-35 executive transport aircraft and KC-130J tankers.

Overseas Contingency Operations Transfer Fund

The Administration opposes the $300 million reduction to the request for the Overseas Contingency Operations Transfer Fund (OCOTF). The Committee rightly notes that it is difficult to develop standardized budgeting procedures for contingency operations due to the inherent uncertainty of these operations. This uncertainty, however, prescribes that funding should remain in the flexible OCOTF account to cover unforeseen costs that emerge over the course of a year, even if it is in excess of currently identified requirements. Reducing the OCOTF account would only make it more difficult for the military services to cover contingency operations costs as they emerge, potentially jeopardizing military readiness. Therefore, the Administration urges the Senate to restore the OCOTF account to the requested level. The Administration, of course, will continue to work with the Committee to improve accounting for contingency operations costs and spending.

Rescissions & Other Reductions

The Administration is concerned about some of the rescissions and reductions in the bill's general provisions. The Committee bill would cut $209 million for civilian personnel under-execution, even though the Department projects minimal under-execution. The Senate Committee also has cut $250 million for fuel savings, though recent changes in world fuel markets indicate that prices are likely to increase. These reductions would underfund pressing defense readiness programs in the President's request. We will, of course, work closely with the Congress on constructing these provisions in order to preserve a prudent balance of defense priorities.

Chemical Demilitarization Program

The Committee's reduction of $145 million to the request for the Chemical Demilitarization Program prior to identification and implementation of cost-saving measures is problematic. A reduction of this magnitude would cause a breach in the Chemical Weapons Convention deadline for the destruction of these chemical weapons. Furthermore, the reduction would increase life-cycle costs and increase the risk to local communities surrounding the chemical storage sites as the destruction of these chemical agents is delayed. The Administration strongly urges the Senate to provide the $1.169 billion requested in the President's FY 2000 Budget.

Remote Area Denial Artillery Munitions (RADAM)

The Administration opposes the Committee's deletion of all $48.3 million requested for Remote Area Denial Artillery Munitions (RADAM) in FY 2000, including $8 million for long-lead item procurement. RADAM is an artillery-delivered, anti-armor munition that, absent success in finding alternatives, will be essential to protecting U.S. ground forces in combat. As previously announced, the Administration will conduct a policy review and make a policy decision on RADAM production in FY 2001. This review will consider anti-personnel landmine (APL) alternative programs now being examined by the Department of Defense that may provide suitable alternatives to the current anti-personnel sub-components munitions that would be used in the RADAM round. If a production decision follows the policy review, deployment of RADAM would allow the U.S. to meet our foreign policy goal of ending U.S. APL deployments outside of Korea by 2003. Deletion of RADAM pre-production funding now would, if suitable alternatives are not identified during the next year, result in either a failure to meet stated administration policy objectives or expose U.S. troops to unacceptable risks in the future.

Network Technologies

The Committee bill makes cuts to two important technology programs: $25 million to the Administration's $70 million request for DoD's Extensible Information Systems/Deeply Networked Systems program; and, $9 million to the $40 million request for the Next Generation Internet (NGI) program. As we enter an era of information-based warfare, it is crucial that DoD remain at the forefront of networking research. The Extensible Information Systems is a major part of the President's Information Technology for the Twenty First Century initiative to accelerate information technology research. The DoD's NGI is part of the Government-wide Next Generation Internet initiative to develop technologies to make Internet-like communications faster. Each reduction represents, in addition to the defense effects, a seven-to nine-percent reduction in spending for the inter-agency initiatives. Failure to provide the requested funding would result in delayed progress and lost leadership for DoD in these areas.

Objectionable General Provision

Section 8073 of the Committee-reported bill would prohibit the use of funds to transfer defense articles or services to another nation or to an organization in connection with international peacekeeping or humanitarian operations, unless the President gives 15 days advance notice to Congress. The provision includes no waiver for national security emergencies such as providing weapons to troops supporting U.S. forces engaged in hostilities. Because the provision intrudes on the President's authority as Commander-in-Chief, the Administration would construe it as permitting such expenditure, with the notification occurring as soon thereafter as possible.

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