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Events of the past year underscore a truth of our time: A strong and ready U.S. military is indispensable to the peace and security of our nation and the world. During 1998, America’s armed forces kept the peace from Bosnia to the Sinai, struck blows against the terrorists who attacked our embassies in Africa and who were planning additional attacks against us, rescued and rebuilt lives in storm-ravaged Central America, and reinforced stability by remaining forward deployed in Europe and Asia. In the Persian Gulf region, U.S. and British forces undertook serious and sustained military action to contain Saddam Hussein and to degrade Iraq’s ability to deliver chemical, nuclear, and biological weapons and its ability to threaten its neighbors.

These actions reflect our strategy to both protect America’s interests today and to prepare for the threats of tomorrow. That strategy—based on the Quadrennial Defense Review (QDR)—is defined by three key elements: shaping the international security environment, responding to the full spectrum of crises when required, and preparing for the challenges of the future.

America’s armed forces remain fully capable of executing this strategy, and the readiness of our forces first to fight in a potential conflict remain high. Nevertheless, ensuring readiness both today and tomorrow has grown increasingly difficult. Forces that would deploy in the later stages of a conflict are less ready, recruiting and retention rates have declined, and modernization schedules are tougher to maintain.

To meet this challenge, President Clinton has proposed that the United States begin the first sustained increase in defense spending in 15 years. The FY 2000 President’s Budget makes available additional resources totaling $112 billion over the next six years. This meets the most pressing requirements identified by our senior military leaders by targeting funding in three key areas: people, readiness, and modernization.


Our budget reflects the imperative of providing a sound quality of life for our uniformed people—our top priority and a key element of ensuring readiness. Initiatives to address recent concerns over retention, recruiting, and quality of life include:

· Increasing retirement benefits so that, after 20 years of service, military personnel will retire at 50 percent of their basic pay regardless of when they entered the military.

· Increasing military pay by 4.4 percent, the largest increase since 1982.

· Increasing up to 5.5 percent those raises associated with promotions by changing military pay tables.

Pay will also increase for military personnel possessing certain critical skills. At the same time, we are improving the quality of life of our forces through upgrades and improvements to barracks and family housing.


Readiness of our first-to-fight forces remains high, and overall our forces continue to be fully capable of executing the National Military Strategy. However, the intensity of military operations, the less-ready posture of later deploying forces, and other concerns require extra measures to ensure readiness. Our budget includes additional funding to ensure that America’s armed forces remain ready to meet current missions, such as:

· In Europe, where U.S. military personnel are indispensable to NATO’s efforts to cultivate peace and prosperity through efforts in support of peace in Bosnia and the former Yugoslavia, and through acceptance of new members to the Alliance.

· In East Asia and the Pacific Rim, where America’s active engagement—including forward-deployed forces and close alliances with Japan, Korea, and others—remains the foundation of stability and security in the region as we pursue a policy of constructive engagement with China.

· In the Persian Gulf region, where U.S. forces maintain a robust presence and enforce the no-fly zones over Iraq.

· In Sub-Saharan Africa, where the U.S. military is pursuing humanitarian and demining efforts to promote the spread of peace and democracy.

· In the Americas, where the U.S. military has strongly supported relief efforts related to Hurricane Mitch, in addition to ongoing assistance and exchanges to support the transition to civilian control of the armed forces and the spread of democracy throughout the hemisphere.

In addition to $1.8 billion for ongoing Bosnia-related operations and $1.1 billion for operations in Southwest Asia, our budget includes funding for Operation and Maintenance accounts which, when adjusted for today’s lower troop levels, exceeds 1980s levels. This funding will address the Services’ most pressing readiness requirements that could put readiness seriously at risk. It supports:

· Traditionally high pace of operations (operating tempo), flying time, repair parts, and other readiness enhancers.

· Readiness-related maintenance and improvements at DoD facilities.

· Readiness-related modernization in areas such as better maintainability and systems critical to warfighters.

At the same time, we continue to enhance readiness by utilizing our Total Force. We will fully employ the capabilities of the active and reserve components and add over $400 million for FY 2000 for reserve training, operations, and integration of active and reserve components.


Our budget enhances support of the Revolution in Military Affairs that is already reorienting our tactics, concepts, doctrines, organizations, and equipment in accordance with the Chairman of the Joint Chiefs of Staff’s Joint Vision 2010. Indeed, in transforming themselves to meet the growing asymmetric threats of chemical, biological, and information warfare, our forces are enhancing their information superiority and battlefield dominance for decades to come.

Our budget provides $53 billion for procurement—the second annual increase since FY 1998, when we reversed a 13-year decline. These new resources put us on the path to achieving our QDR recommendation to increase procurement funding to $60 billion per year by 2001 and allow for the procurement of:

· Eight next-generation ships for the Navy’s shipbuilding plan.

· Additional aircraft such as the F-16, C-17, T-45, and V-22.

· $2 billion in critical combat service support equipment and increased funding for the Army’s training ammunition needs.

· $1 billion for critical Marine Corps procurement needs.

Our budget also continues funding for ballistic missile defenses and includes an additional $6.6 billion for the development of a National Missile Defense program designed to defend the United States against a limited strategic ballistic missile attack.


The additional funding in our budget in no way diminishes the Department’s requirement to reduce unneeded support activities and infrastructure that continue to siphon needed resources away from readiness, modernization, and the quality of life of our troops.

We will therefore continue to fundamentally transform the support activities of the Department through our Defense Reform Initiative. We are adopting the best business practices of the private sector, consolidating and streamlining organizations, and moving toward paperless contracting. Through competitive sourcing, we expect to save $11.2 billion from FY 1997-2005 and $3.4 billion each year thereafter. At the same time, we will continue to pursue additional savings through reform of the acquisition process.

Our greatest opportunity for savings, however, rests in continued reductions in the excess infrastructure left over from the Cold War. The first three rounds of Base Realignment and Closure (BRAC) already undertaken will yield more than $25 billion in savings through 2003. Another two rounds of BRAC could ultimately save over $20 billion by 2015—savings that can only be realized through the difficult but necessary task of closing unneeded bases and facilities.


America’s security relies upon a military that can shape and respond to world events, while at the same time preparing for the uncertain challenges of the future. We, in turn, must provide our men and women in uniform with the resources and strategic vision necessary for a rapidly changing global security environment. This report outlines the Department’s preparations to provide that support and leadership and, by doing so, protect our citizens, our allies, and our vital interests in the decades to come.



William S. Cohen

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