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Chapter 17


President Clinton’s FY 2001 defense budget continues implementation of the Department of Defense’s FY 2000–2005 Future Years Defense Program (FYDP), which is the DoD plan for ensuring America’s security and vital global leadership. Both the FYDP and new budget reflect the recommendations of the Department’s May 1997 Quadrennial Defense Review (QDR) —as well as subsequent assessments of strategy, force structure, readiness, modernization, infrastructure, and other determinants of the U.S. defense posture.

In funding the FYDP last year, the President made available to DoD $112 billion in additional resources. This enabled robust support for those requirements assessed to be the most essential to preserving the high quality and readiness of America’s armed forces. The FY 2001 budget protects the President’s $112 billion commitment and continues strong funding for key military requirements. Both the new budget and FYDP seek a prudent balance between immediate military needs, most notably force readiness and quality of life, and long–term safeguards, most notably the development and procurement of new weapons and technologies. This balanced approach was a critical recommendation of the QDR.


The President’s FY 2001 budget proposes $291.1 billion in budget authority and $277.5 billion in outlays for the Department of Defense. See Appendix B for other defense budget data. For FY 1999, DoD budget authority was, in real terms, about 40 percent below its level in FY 1985, the peak year for inflation–adjusted defense budget authority since the Korean War. As a share of America’s gross domestic product, FY 1999 DoD outlays were about 3 percent, well below average levels during the past five decades.


Readiness, People, and Quality of Life

The FY 2001 budget will keep U.S. forces ready to act decisively through strong funding for training, supplies, maintenance of weapons and equipment, and other preparedness essentials. These requirements are mostly paid for in the Operation and Maintenance (O&M) accounts of the four Services. Readiness also requires taking good care of all members of the armed forces and their families. To that end, the FY 2001 budget sufficiently funds quality of life components like pay, housing, and health care.

To address mounting warnings about retention and recruiting, last year the President proposed substantial improvements in military compensation. Congress supported these improvements, increasing certain elements of them. Building on this, the FY 2001 budget increases military base pay 3.7 percent—.5 percent more than projected civilian wage growth—and substantially improves the Basic Allowance for Housing.

Force Structure and End Strength

The U.S. force structure and military end strength are roughly two-thirds their size at the time the Berlin Wall fell in November 1989. Most of this shrinkage occurred or was programmed before President Clinton took office. In recent years, the Department’s focus has been on reshaping this smaller force to reflect the new post–Cold War threats and opportunities. Details on this military transformation are in Chapter 11. Adjustments to forces and end strength reflected in the FYDP and FY 2001 budget were based on requirements derived both from the QDR-based strategy for major theater wars and from the ongoing high intensity of U.S. global deployments and commitments.

Recapitalization of U.S. Forces

To ensure America’s technological and qualitative superiority on future battlefields, U.S. forces must be modernized with new systems and upgrades to existing systems. The new budget enables the Department to achieve its goal of increasing procurement funding to $60 billion by FY 2001.

For the modernization of U.S. forces to succeed, Congress must support the spending allocations proposed for DoD weapons development and procurement. Additionally, the Department must have congressional support for infrastructure reductions, acquisition reform, and other initiatives in order to achieve savings needed to help fund modernization.

Funding for Unbudgeted Contingencies

Each year unbudgeted military operations, natural disasters, and other contingencies occur—often requiring the President to seek congressional support for covering the costs incurred. For FY 1999, Congress approved emergency supplemental appropriations to pay for Kosovo operations and other unbudgeted DoD costs. For FY 2000, $2.1 billion in supplemental appropriations are needed for Kosovo operations, the incremental cost of which was not funded in the year’s Defense Appropriations Act.


Events since the end of the Cold War have demonstrated the need for America to retain a strong global leadership role and a prudent defense posture. President Clinton’s FY 2001 defense budget supports that need while remaining fiscally responsible.

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