COHEN: Mr. Chairman, as you and other members know, I have not had an opportunity to participate in the development of the budget for fiscal '98. I've tried to abide by the very important rule of not presuming conformation. And therefore, I have made a determined effort to resist trying to interceded in any fashion in helping to develop this budget.

When the budget is finally developed and presented to the Congress, then I would expect to support the president's budget to the best of my ability and also try to indicate, for the future, what kind of changes and recommendations that I would seek to make.

As has been cited here this morning, by myself and perhaps others, there is a quadrennial defense review underway. It's a very serious review of examining across-the-board our strategic policies for structure and strength, infrastructure, readiness questions.

All of that is being examined to see exactly how much we will need to spend in the future. I would, obviously, indicate that I think that we have been deficient as far as spending for procurement in the so-called out years, the future defense years.

We need to reverse the trend that we've had of simply postponing and pushing those procurement reforms out further into the year 2002 or 2003, and to make a very dedicated effort to increase that procurement budget. That's something I hope to do in the coming years.

THURMOND: Senator Cohen, you were one of the most persistent members of this committee in insisting that this administration adopt a national security strategy that was realistic and credible. The strategy of being capable of fighting two major regional contingencies has been accepted by most of the Congress, but has recently been questioned because of the perception that we cannot afford the force structure and weapons to support it.

Do you support the two MRC strategy? And would you advocate changing the strategy in order to justify a smaller, more affordable force structure? And would you describe briefly, any other strategies you might consider?

COHEN: Well, first, Mr. Chairman, I might indicate that the so- called two MRCs, major regional contingencies, is really not a strategy; it's a capability. Do we have the capability to respond to the conflict in two areas of great concern to us at any given time?

I think most would agree that we are perhaps at the limit of our ability to do that under the circumstances of constant decrease in funding.

That's one of the reasons why this QDR process is going to be so important. It's an issue which is now being discussed publicly, which I think is a bit premature because that's the precise purpose of the QDR: to examine whether or not we have the right strategy given the times that we live in and are likely to face in the future.

Do we have the right force structure? Do we have too much or too little end-strength? Have we devoted too much to readiness and not enough to modernization? All of these issues are now being discussed, and we should reserve judgment on that.

With respect to national security policies, the administration, in fact, has produced a booklet of some 50 pages outlining its national security policy. The chairman and the joint chiefs have produced a pamphlet that outlines a national military strategy which coincides with the over-arching national security policy.

If I had to summarize those 50 pages, I would do so in the following fashion: that our strategy is to preserve and promote peace, prosperity and democracy by being militarily strong, by being forward deployed and by being diplomatically engaged.


GLENN: In the pre-hearing policy questions, you were asked whether you believed if the funding levels in the out years of the administration's budget and the FYDP, the future year defense program, are sufficient to fund the planned force structure.

And you said in your answer that either the department has to achieve more significant savings in areas such as infrastructure, privatization and the acquisition process or we have to revisit the basic issue of preserving force structure at the expense of modernization.

That's a big balance there, and that's a very important balance. You either have savings or else we have to go through this other.

Yet, savings, as we know from the past, when you say we're going to make - we're going to be more efficient, we're going to do all these great things over there -- and savings have been pretty ephemeral. They're pretty hard to grab hold of.

Do you have any ideas where we're going to save money or have to go through that kind of a force structure reconsideration? That's a big order.

COHEN: It is a big order, and again the QDR is looking at precisely that in terms of whether we have to go through an examination or reconfiguration of our force structure.

Some of the savings they are looking to achieve are in the field of inventory reduction. I've talked with Paul, Dr. Paul Kaminski, for example. And I regret to say that he'll be leaving late in the spring. He's been an outstanding public servant, and one that is going to be hard to replace. But Dr. Kaminski has really put some initiatives in the field of trying to reduce the level of inventory that we warehouse.

COHEN: We have, as I recall, something in the neighborhood of $103 billion of inventory in our warehouses as such. And we're trying to get down to a level of about $48 billion by the year 2002. And we're trying to adopt policies of just-in-time delivery, much like Federal Express might have -- or I would like to be more parochial and say L.L. Bean would have in their delivery systems. And so there are significant savings that can be achieved. We're making savings. John Hamre has done an outstanding job as far as the processing of travel vouchers -- saving a billion dollars on an annual basis. So there are things that we can do, but I am always a little bit skeptical on counting on future savings, and build those into the budget and then not have them materialize.

GLENN: Well, I wasn't sure you meant exactly the -- in your answer, whether you meant exactly that we either have to get those savings or else. Our end-strength, our force structure -- it all has to be reconsidered.

COHEN: Or you would have to increase...

GLENN: I'm not sure I would quite agree with that statement. I think we need a certain force for this country, and we ought to provide it. And if it doesn't -- if there aren't those savings, then we have to consider whether we increase budget to do it.

COHEN: You either have to increase the budget or change the force structure.


SMITH: In the recent Washington Post article, it was interesting. Your predecessor, Secretary Perry -- or soon-to-be predecessor -- in talking about the reduction since the Cold War in American forces and equipment was quoted as saying, quote, It's a pretty damn big reduction, unquote. And he basically issued a warning saying that we just could not afford, we just did not have further surplus military strength to go any deeper.

And in Caspar Weinberger's new book, "The Next War," he makes reference -- and I hadn't heard it before -- he called it victory disease, where he said that we've had a recent victory in the Persian Gulf and essentially the Cold War victory, and now here we are downsizing.

And I remember Dick Cheney, Secretary Cheney, saying every time we downsize, we screw it up, and we hope it didn't happen -- didn't happen this time.

And yet, in -- Weinberger had some very interesting statistics here in talking about that. The Pentagon is spending less on new weapons and equipment than any time in the past 40 years. By 1999, the Navy will have 346 ships, the least since 1938. The first time in seven years the Navy doesn't have a single new design aircraft in the development or production stage. And projected defense budgets will count for less than 3 percent of GDP.

And then a couple of other things that's even more shocking. U.S. Army helicopter flying hours declined from 14.5 to 11.5 hours; a 10 percent reduction in the time new soldiers spent on advanced, individual training programs; Air Force personnel regularly deployed overseas for as many as 150 to 180 days a year, when normally it's 120, which is a big strain on the families -- on their families, as you know.

And then there was one example here which fascinated me. Tank crews in the Second Armored Division's First Battalion, 67th Armor were reduced to parking their tanks and conducting their platoon training dismounted with soldiers walking the ranges and pretending to be tanks.

I just -- you know, I know you're very familiar with what goes on in the military. And I think if these kinds of facts are accurate, and it is prevalent -- and it may not be -- but if it is, we have some difficult days ahead.

And I, you know, I know you're up to the challenge, but I think these are the kinds of things we're going to have to be looking at very carefully over the next several years. Months and years.

COHEN: Senator Smith, that was one of the reasons I quoted Donald Keegan's book, "The Origins of War and the Preservation of Peace."; It's not simply to go back and start quoting from Thucydides and the Peloponnesian Wars, but rather to show how over a period of time all the way from the Peloponnesian Wars, all the way up to the Cuban Missile Crisis and beyond.

That there has been a tendency that whenever there's a lull, when we have not been at war -- and I believe it was Will Durant and his wife Ariel who made the study -- showing that out of the history of all the time of recorded history, out of the thousands of years, approximately 200-plus have been free from war.

But we tend to forget that the dangers out there, and what I've tried to outline in my opening statement, is that it's a very unsettled, dangerous world. And we ought not to simply be lulled into a sense of, well, the Persian Gulf War is over. Desert Storm is over. The Russians no longer constitute a threat.

Therefore, because there -- we're not engaged in combat, there's not need for a combat capability. That's a very dangerous mindset for us to begin. I think we have to have a very strong commitment to remaining the world's superpower.

And people may not feel that we should have that obligation, bear that responsibility. But I think that if we wish to maintain the quality of life that we have; to have the kind of influence to help shape the environment of the future; that we encourage the spread of democracy; that we encourage the rise in prosperity; that we diminish the chance for regional strife and conflict, then we have to be militarily prepared.

We have to be militarily strong. We have to be forward-deployed. And we have to be diplomatically engaged. And that's what I think that we have to be for the future.

SMITH: Thank you. Good luck.


LIEBERMAN:You said in your opening statement, quite correctly I think, that the reductions of recent years have exhausted all the easy options. And if done properly -- this was in reference to the QDR -- the QDR will present difficult choices. I agree with you absolutely, and I hope we'll be prepared here to face those choices.

I don't think I've taken the full six minutes, but nonetheless I do have a question which is we created the National Defense Panel to go along with the QDR. I think we -- Senator Robb, Senator Coats, Senator McCain, Senator Levin, former senator from Maine -- actively involved felt that we needed this kind of outside-the-box fresh thinking about our future defense needs.

I wonder if you could state for us what your hopes are with regard to the membership and the work of the National Defense Panel in relationship to the QDR.


COHEN: I like you feel that we can only be benefited by having the insight of people who, number one, have a background in studying military affairs, who are not necessarily professionals within the building, as such, but who are experts -- recognized experts -- who may take a somewhat different view in terms of what is required for force structure, strategies, end strength -- all the issues that we're going to be looking at in the QDR.

It's always good to have a critical oversight panel that might come to the same conclusion, but is at least willing to challenge current assumptions.

Those recommendations from a National Defense Panel might be rejected by the secretary of defense. It's simply a check to make sure that we're not confirming or conforming to old policies which might not have relevance.

There's always a tendency on the part of any institution to remain comfortable with current assumptions. Hopefully, the QDR will take a very hard look and say we can't rely upon current assumptions any longer, that we have to clear out the attic of outworn ideas.

And what you do is have a check on that by having a National Defense Panel that takes a look and says -- Your QDR has done a good job. And perhaps that panel might disagree in several areas and then make recommendations.

But ultimately, it's the secretary of defense, in working with the joint chiefs, in making an analysis and making a recommendation to the president who decides what -- what that strategy and end strength and force structure, et cetera should be.

So I think that we can have a panel of experts. They don't have to be non-conformists. They don't have to be seen as radical revisionists, as such, or those who are lacking in credibility. I think we can have a balance. You can have people who have some pretty solid credentials, also some people who would be willing to challenge current assumptions. So it needs a balance I think.

LIEBERMAN: I appreciate your answer and I thank you very much. Obviously, we all look forward to working with you.

Thank you, Mr. Chairman.


SNOWE: Senator Cohen, in response to a question earlier by Senator Lieberman, with respect to the quadrennial review process that an independent panel has been established, I would be interested to know if you know at this point the composition of that panel.

I'm very concerned that there aren't any women on that panel, and I think it's absolutely essential, given the importance of that panel -- and that it will be an independent check on this review.

And also in response to what you said to Senator Kempthorne, given the problems and the pervasiveness of sexual harassment in the environment of the military, we have to do all that we can -- and I think it is critical that we have women serving on these panels so that their viewpoint and perspective is represented, given the fact that now women represent 15 to 20 percent of the military personnel.

COHEN: Senator Snowe, it's been interesting to watch the formation and deformation of the National Defense Panel. My understanding was it was supposed to have been completed several weeks ago. Because of concern raised by members of the committee about the panel's composition, it has not been completed.

I was to have no role in the -- in that formulation of the panel because, once again, I was trying very hard not to presume confirmation, and so I stayed out of the selection of the panel.

Now, I'm told that has been put off for a while. And should I be confirmed, then I would have a role to -- as far as the composition is concerned. And that's something that I would be very concerned about.

SNOWE: I appreciate that.

On the issue of...

LEVIN: Point of -- if Senator Snowe would just yield...


LEVIN: ... for one moment.

SNOWE: I certainly will.

LEVIN: The law requires consultation with members of Congress relative to the makeup of that panel. I have now been consulted as the ranking Democrat. I know that Senator Lieberman and other senators here have been involved in this -- and including, by the way, Senator Robb -- and I just want to assure the senator from Maine that the specific issue which you have raised and the concern that you've raised has been made very pointedly to the appointing folks over there.

LEVIN: And I think you'll be satisfied that there will be a cross-section representation.