AMFORD

MAR 995

bank you very much.

What I hope to do is to share with you for a few moments the views that [Defense Secretary] Bill Perry and I have on the future of defense programs, trying to address the question, "Do we have enough money for defense?"

I'm very pleased to have this opportunity to do that in front of such a knowledgeable and committed audience of our men and women in the armed services, and at the end of my remarks I'd be happy to take any questions you may have on any subject that I cover or anything else that may be on your minds.

The question that I want to address today is, "Are we spending enough on defense?" It is a question that we are going to hear frequently from the new Congress, and it deserves to be considered seriously.

No

Jonsson Library Bottom-up Review, commissioned by former Secretary of Defense Les Aspin when he became secretary of defense at the beginning of the Clinton administration. The purpose of the Bottom-up Review was to determine how to deal with the new threat to the post-Cold War world, to determine what strategy we needed and to determine the force structure needed to support the strategy.

othing is more important to our country, to our allies and to peace in the world than to assure that we have made adequate provision for the national defense. But are we spending enough is not the right question to ask first if we are really interested in the answer. If we are really interested in getting this right, the question should be somewhat different: "What are our defense needs? Do we have the right programs and force structure to support these needs? Do we have the right defense priorities?" And then only if we do have the right priorities, "Are we providing enough resources?"

Put another way, the question of whether we're spending enough lends itself to endless "Yes, we are; No, you're not" school of political argumentation. If, on the other hand, you ask if we're spending enough to buy what we need, then you might actually get a more informative answer. I propose to take the second approach.

First, I want to present briefly the broad outline of President [Bill] Clinton's defense policy and how we think about force posture, about readiness, modernization programs that support that policy. Then I would like to deal with the debate that has been conducted about this policy, most of it dealing with money.

The basis of this administration's defense policy is the

There are three essential elements to that post-Cold War strategy. First, the former Soviet conventional threat to Europe has disappeared. This Soviet threat was the threat that had dominated our force structure planning. It is now gone. What do we need conventional military forces for today?

There are still unstable and hostile areas in the world where vital U.S. interests could be threatened, and U.S. military involvement cannot be ruled out in these regions. The two most prominent examples are major conflicts that could occur in Southwest Asia, as we've seen in the case of Iraq, and in the Far East. These are major regional conflicts that can involve in a major way the forces of the United States, and we must have sufficient forces to deal with them.

Te must have sufficient forces to deal with them almost simultaneously. Why almost simultaneously? This is necessary because we have to have residual forces to deter opportunistic launching of a second conflict when the United States and its allies are already involved in a first major regional conflict in the Middle East or in the Far East.

The second element of the strategy - of our bottom-up defense policy strategy is to meet the new dangers that have emerged in the post-Cold War world. These new dangers require capabilities and outlooks possessed differently by our defense forces than were true in the Cold War era.

What are these important new dangers of the post-Cold War era? First and foremost, they are preventing the spread of nuclear weapons, weapons of mass destruction generally, as we have seen in the case of North Korea. We have been involved in various peace operations in Somalia, in Haiti and perhaps more extensively in Bosnia, and the future, I think, holds more instances where U.S. forces will be involved in peace operations throughout the world. We've

been involved in operations for humanitarian assistance, as in the very successful effort to alleviate the suffering and bring some tranquillity, if only temporarily, to Rwanda. And we are asked to be involved in counterdrug activities, especially in cooperation with our neighbors in Latin America. So we also have to be prepared to deal with these new security challenges in the post-Cold War era.

Third, while the geo-military landscape has changed dramatically, there remains a formidable residual nuclear capability with four of the states of the former Soviet Union Russia above all, Belarus, Kazakhstan and the Ukraine. The United States has a major interest in reducing the threat posed by these nuclear weapons and in using new cooperative efforts to do so, cooperative efforts that have been made possible as a result of the end of the Cold War.

Clearly, this is an ambitious agenda, and we know intu

that all these different elements require consid

erable force, but are configured and trained to deal with situations much different from stopping Soviet armor from flowing through the German. border across the Fulda Gap.

To find out what we actually needed to support this new security agenda we carried out a Bottom-up Review composed of civilian specialists and military specialists of the Joint Staff, cooperatively carrying out analysis of force structure requirements. This was a thorough ongoing analysis that concluded a smaller force structure could carry out the strategy compared to the height of the Cold War. Indeed, the

The core debate is over whether we are spending enough for defense - whether we have cut too much too soon, as one formulation has it. It is certainly true that the smaller force structure of the defense of this country costs less money. The budget of the department has fallen in real terms from a high in fiscal year 1985 of about $390 billion to its current level of about $250 billion.

The American taxpayer has a correct expectation that the disappearance of the Soviet threat should mean some saving in the defense budget. But the size of the defense budget is not determined solely by the size of the force structure. A major portion of the defense budget is the need to maintain the forces in a ready status.

orce structure that is not maintained at a state of readi

buy an aircraft carrier, an Army division, an Air Force wing to put on the shelf and expect it to be ready when the fight is needed. We have to pay for training, the exercises, for fuel and ammunition, for repair and for maintenance. We must also take care of the families and provide a decent quality of life to the women and men in uniform who choose to make service to their country their career. We have to pay for a whole host of things which make up for readiness of our armed forces.

a drop of approximately 40 percent in active duty Army, a reduction of 25 percent in Air Force fighter wings and a reduction of the Navy of almost 600 ships to about 350 ships from 1989 to the end of the century, a sharp reduction in the force structure of our nation.

Bot oth this strategy and the force or this by ein forsone criticism. From the left we have heard that it was unnecessary to prepare for two nearly simultaneous major regional conflicts. From the right we have heard some criticism that the force structure was inadequate to execute the strategy of two major regional conflicts that we had set for ourselves.

I want to submit to you here today that these are basically settled questions. Most believe that the two major regional conflict strategy is a prudent, appropriate response to these unstable and uncertain times. There is more discussion about whether the force structure is big enough for the strategy. But here, too, I believe that most individuals think our forces are adequate if we are careful about how we use them and don't overuse them or use them too frequently.

The reason that the defense budget savings are not larger today have to do with the need to preserve readiness. In all past periods of U.S. history, when militaries draw down to core, after World War I, after World War II and after the Vietnam War, the drawdown in force structure was accompanied by a reduction in the readiness of the remaining forces. In times of drawdown force structure has been protected at the expense of readiness.

President Clinton and Secretary Bill Perry have made it clear that this is not going to happen today. Why? Simply put, the security threats that confront the United States do not allow us to have unready forces, and they especially don't allow us to have unready forces at the lower active duty strength that we are now planning, at the reduced force structure levels that we have committed ourselves to.

Even

vents have made it clear beyond question that this is the right policy. During the past year we saw the possibility of major regional conflict with Iraq and with North Korea. Significant U.S. forces have been involved in peacekeeping activities in Haiti, in Rwanda, Bosnia and Somalia. As we meet here today, approximately 50,000 U.S. forces are involved in military operations somewhere around the world. We cannot afford forces that are not ready to do their job.

Now, I believe that just about everyone agrees with this proposition. The need for readiness is not an issue. What

the readiness, the quality of life-comprise the answer to the first question that we should be asking: "What do we need for our defense?"

We now can turn to the next question: “Are we providing adequate resources to pay for it? Are we spending enough?" I want to make clear that Bill Perry and I believe that the answer today is: “Yes.” That has not always been true in the past, and we have candidly discussed it.

In September, for instance, I testified in the Senate that our programs were underfunded by some $40 billion over the six-year planning period. There was a number of elements contributing to this estimate of underfunding, including inflation assumptions. We have been conducting discussions within the administration about how to deal with the budget requirement for defense, and the issue was never, never how much defense can we afford, but how we pay for the defense that we need.

Presic

resident Clinton gave us an answer last month. He ordered $25 billion to be added to the defense budget over six years to make sure we had a ready force, to make sure our men and women in uniform have the quality of life improvements that they need, which will assure us that we will be able to recruit and retain the best people in the future and the salary increases they deserve and to make sure that the overall program is affordable.

New economic assumptions, favorable economic assumptions about inflation reduce the gap by a roughly $12 billion addition during the six-year planning period. And Bill Perry and I also announced last month reductions in some of the lower-priority weapons system modernization programs purchased in the near term in order to provide approximately $10 billion additional support for our readiness and our force structure and our strategy. All this amounts to steps which make the defense we need affordable, and it is a strategy that puts people and readiness first, ahead of systems.

strategy it encompasses. Generally, we believe the readiness and war-fighting capability of our troops is very high today. This readiness depends crucially on the professional capability of our fighting women and men, and this is why Bill Perry has insisted on the initiatives to improve the quality of life and the military pay for our soldiers, sailors, airmen and Marines.

The

The best indicator of how ready our forces are and how incredibly high the readiness is was demonstrated in the performance in Haiti and the more recent deployment to Kuwait to meet Saddam Hussein's threat. We have the best military in the world, supporting the right strategy for the time we live in today. The president has demonstrated his commitment to maintain that defensive posture, and we in the Department of Defense are committed to support that view.

Thank you very much. I'll be happy to take questions on the subjects I've addressed here or any other subjects that may be on your mind, if there are any.

We must recognize, however, that some modernization and eventually a great deal of recapitalization for existing airplanes, ships and tanks will be necessary as these systems reach the end of their useful life. The president's $25 billion addition, which has been criticized as being fat and bloated that is, having most of the money come in the outyears indeed places money at the end of the sixyear planning period and actually provides the 1 percent real growth in the defense budget at that time when modernization and recapitalization for our systems is most needed.

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In sum, the president's program provides the resources required to fund the Bottom-up Review and the defense.

Q. What's the future of the third wave in warfare, or information warfare?

A. Let me just say that a very important feature of thinking about modernization and recapitalization, about what we're going to do about systems of the future, is to realize that we are not going to go out and rebuild the kind of weapons system inventory we have today.

We are going to have to rebuild systems that are much more effective and rely much more efficiently on ... dominant battlefield awareness, as some people call it. Therefore, information, both in terms of surveillance and precision targeting, the ability for forces to go where they are and where the enemy is, is absolutely critical.

That leads you right into information warfare, both offensively and defensively. I think the whole question of modernization and recapitalization has to be built on the assumption that we are going to be working on the leverage which information technology provides us today and that allows us to look towards a time when the weapons systems ... will be fewer ... and even more efficient than they are today.

Q. Could you address any kind of discussions you may have already had about how you may deal with the new Republican Congress and any kind of movement of dollars that you foresee coming?

A. I believe that the authorizing and appropriating committees in Congress for defense have been usually, typically, quite bipartisan. The questions that are raised now are issues really of degree. They are not of a completely different