Tuesday, April 29, 1997 9:00 a.m
Hyatt Regency Crystal City Hotel
Regency A Ballroom
2799 Jefferson Davis Highway
Arlington, Virginia


MR. HOLMES: Thank you very much. Mr. Chairman, I would like to thank you and the Defense Panel for allowing me to testify here today. As all of you are aware, the Department of Defense is undertaking the QDR pursuant to legislation enacted last year. This legislation was enacted because of a realization that the previous comprehensive review of defense policy, the 1993 Bottom-Up Review, failed to put the nation's defense policy on a solid footing.

Now, one of the criticisms that was leveled against the Bottom-Up Review and the legislation was that it was not internally consistent. But more, the more important criticism in my estimation was that the force structure recommended in 1993 was too small to fulfill the recommended strategy of fighting and winning two major regional conflicts nearly simultaneously.

I believe it is critically important that the QDR avoids the mistakes of the Bottom-Up Review. Now, how can this be done?

First, you, the National Defense Panel, need to serve as a watchdog on the QDR process and you can do that by demanding the QDR report include, in my estimation, the following elements:

(1) a proposed strategy for vital interests. There must be clear understanding of priorities in our interests and the strategy must start with what is most important; that is, what is vital. And not in the name of comprehensiveness or trendy assumptions, define a strategy that tries to accomplish too much with too little.

(2) A force of adequate size and quality to execute the proposed strategy; and

(3) Funding levels adequate to maintain the recommended forces in a high state of readiness and to keep them fully modernized.

Now, let me turn to my substantive recommendations for U.S. national security policy. I have chosen three areas for analysis that I believe need special attention.

Now, these three areas are covered in detail in the Heritage Foundation's Foreign Policy Blueprint "Restoring American Leadership." We have provided copies for the National Defense Panel, I believe. If you don't have them, I can get them for you later.

We go into great detail of what I am only summarizing here in short order this morning.

Now, the first area of the three that I mentioned of concern is establishing consistency between strategy, forces and budget. The second area deals with issues related to America's requirements for maintaining at forward presence of forces and pre-positioned equipment. In short, issues related to our alliances. And the third area concerns the drain on forces and budgets resulting from U.S. participation in peacekeeping and other non-combat operations.

I focus on these three areas because they are now the most critically important to U.S. national security, in my opinion, and because they are the areas in which we have concentrated most of our research at the Heritage Foundation.

Let me look at the first area. The first step in determining a national policy or national security strategy, in my estimation is determining what our vital interests are.

In our blueprint, we have developed a comprehensive list of national interests. We have broken them down into varying categories of importance, but I would like to discuss this morning the most important of these, our vital interests around which the bulk of our national security strategy should be formulated and organized and which we should be willing to go to war to defend. Although military action is by no means the only tool at our disposal for defending and promoting vital interests.

In my written testimony that I have provided to the National Defense Panel, I discuss this interests and threats in some detail; but, in the interest of time that the Chairman has told me about, I would like to move quickly through the list if I may. And, if at anytime, you would like to have more detail or have questions, I would be pleased to stop.

The first and foremost vital interest, the one that we have listed at the top of our list in our study is protecting America's territory, borders and airspace. It should be no surprise about that. The threats to that, of course, or the most imminent and urgent thrust to those are on the strategic level, we maintain a long-range missiles armed with nuclear weapons and at the level in the non-strategic level and the long term, we discuss the threats of potential instability on America's borders that could arise in the future.

The second vital interest we have listed is protecting Americans against threats to their lives and well-being. This is mainly to deal with the rising and continuing threat of international terrorism.

The third vital interest is preventing a major power threat to Europe, East Asia, or the Persian Gulf. And here we have three possible threats to this interest. One would be a possible expansionist and revanchist Russia; number (2), an expansionist Iraq or Iran; and, number (3), in Asia, of course, North Korea, the rise of the People's Republic of China and other potential security threats in East Asia that we describe in detail in our study.

Vital interest No. 4, one that has long historical legacy in the United States, in our history, preventing the hostile interference by outside powers in the Western Hemisphere. In our analysis today, the United States faces no such strategic threat to this particular interest at this time.

Vital interest No. 5, access to international trade and investments; of course, there, the threats that are most imminent are protectionism, trade wars, and possible emergence of trade blocks.

Vital interest No. 6 is freedom of the seas. This is needed to maintain the freedom of trade, to support our forces abroad, support our friends and allies overseas and to maintain international peace, stability and prosperity.

There are, of course, military threats to the freedom on the seas even today, even with the Soviet Union no longer with us. This comes mainly from the influence of rogue states on sea lanes and choke points like the Straits of Hormuz, which can threaten our naval forces with relatively cheap sea mines and conventional submarines.

In post-industrial warfare, a state does not need a modern fleet of expensive capital ships to challenge vital U.S. interests and maintaining the freedom to navigate and trade in the world seas.

The last vital interest that we have listed, Vital Interest No. 7, is access to resources. The U.S. economy has grown increasingly dependent on foreign oil imports which now accounts for roughly 50 percent of total United States oil consumption.

Here we are concerned mainly with the stability of Saudi Arabia and the Gulf oil states and the threat that Iran and Iraq pose to the region.

Now, as I had mentioned before, America has many more interests than those listed here and, some of these interests, like maintaining stability in Europe which affects our position and our forces in Bosnia, of course, may require the application of military force. But I wanted to focus this morning mainly on those interests which should be, in my opinion, the main focus of our national security strategy, the vital interests that I have just discussed.

Step 2 is fashioning a strategy. A sound national security strategy for the post-Cold War era should incorporate key elements which can be described as strategic capabilities. Now, since there is no longer an overarching or defining global threat and since it is impossible to predict exactly what enemy and threat the military strategy and U.S. forces must deal with, those strategy and forces should be built around the essential capabilities necessary to protect the vital interests that I have just listed.

In other words, our strategy should not be exclusively threat-driven since threats can change over time. But, rather, it should be driven by determining which strategic capabilities are necessary to protect our vital interests.

Now, I would like to go through briefly the major strategic capabilities that we think are necessary to protect the vital interests that I have just discussed.

First and foremost, strategic capability No. 1 is dissuasion and deterrence, preventing the conflict without sacrificing national interests is still preferable to being forced to fight, even if victory is certain. So, deterrence remains a central purpose of U.S. national security strategy in our opinion.

Now, this requires that the U.S. meet global responsibilities which in turn demands a military capability with a global reach. Therefore, the United States must be able to defeat attacks by a regional bullies such as Iran, Iraq and North Korea.

And to accomplish these goals, America must maintain its regional alliances and keep nations such as Japan and Germany in security partnerships so that they can assist in deterring aggression and are not pressured to rearm.

Strategic capability No. 2, the second on our list, is ballistic missile defense. In our opinion, the United States must acquire the ability to neutralize a threat of weapons of mass destruction: nuclear, chemical, or biological delivered by ballistic missiles against the U.S. homeland, against American troops, bases and fleets overseas or against U.S. allies.

Missile defense goes hand-in-hand with dissuasion; for to deny an attack or the aim of a missile strike will dissuade him from attacking in the first place.

Strategic Capability No. 3 is force projection. A credible deterrent and more winning strategy for conventional conflict will depend on the ability to project combat forces from the U.S. to distant theaters, to force entry into hostile shores, to conduct long range precision strikes from air and sea against critical targets and to sustain and reinforce the deployed forces in a protected conflict.

Force projection in the form of a long-range precision strikes also requires that the U.S. be able when necessary to deliver preemptive or preventive strikes against an enemy's leadership and key war-fighting assets.

Strategic Capability No. 4 is the ability to fight 1.5 regional conflicts. At this time, it is our opinion that it is unlikely that the U.S. will face more than one large scale regional conflict, roughly on the scale of the Persian Gulf War at any one time over the next five to ten years.

It is possible, however, that America will need simultaneously to fight one large-scale regional conflict and one small-scale regional conflict roughly throughout size of the Panama operation in 1989.

Consequently, the force recommended in the Heritage Foundation's study will provide the U.S. with a military capability to fight this 1.5 wars; but, if changing circumstances demand that the U.S. be required to mount two operations on the order of Operation Desert Storm, simultaneously or to take care of several converging regional contingencies, then we believe that the United States must have adequate reserves and the ability to reconstitute a large force in short order.

The fifth strategic capability is control of space. America must continue to expand its capabilities in space by developing and deploying reusable boosters that can put payloads into orbit quickly and cheaply, improve surveillance, tracking and communications satellites, space-based missile defenses and systems like defensive hardening and anti-satellite weapons to protect U.S. space assets from a future enemy.

Strategic capability No. 6 is advance technology. The importance of advanced military technology to a national security strategy cannot be overemphasized. As new concepts flow from rapidly advancing technology, new types of military organizations and operational doctrine will have to evolve as well. And for the U.S. Armed Forces to keep technologically ahead of any potential adversary, it is essential to master and exploit the revolution in military affairs.

The services must adapt to the changes brought by advanced technology, but they must also avoid the temptation to treat technology as a panacea for all the ills that beset the military at a time of radical downsizing and changing missions.

Seventh on our list of strategy capabilities is information warfare. The information age will spawn entirely new forms of warfare. Now, the U.S. must anticipate that new demands of this revolutionary era and at a minimum develop the capability to disrupt the information systems that undergird the enemy's strategic or battlefield command and control, surveillance, reconnaissance and targeting. At the same time, the United States must be able to safeguard the security of its own information systems, both at the strategic and a tactical level.

Strategic capability No. 8 is intelligence. A proactive intelligence capability is even more critical for the U.S. today, given the uncertainty of threats to American interests. Intelligence is a primary and fundamental tool of statecraft at all levels and should inform everything a nation does or attempts to do abroad. Intelligence does not exist purely for its own sake, but to serve national policy, in peace as well as in war. It should be an integral part of every function of national strategy and every level of military operations, from the tactical to the strategic level.

The last capability, strategic capability on our list, No. 9, one I've referred to already as reconstituting the force. We believe the United States needs to have the capability to reconstitute large forces, replace munitions and equipment consumed in combat and supply the vital fuel, weapons components, and critical minerals that will be necessary to sustain the armed forces in case of a protracted conflict.

A well-trained Ready Reserve and an effective mobilization system are essential to round out the active forces, especially in a classic conflict like the Gulf War.

Those are our list of strategy capabilities that we believe are necessary to protect our vital interests. The third step in the process that I have mentioned is now designing the forces necessary to provide those capabilities.

What we have done in our blueprint is essentially design a force structure of a certain size and quality which we believe is necessary to provide these capabilities. Since at this time we cannot know exactly where and when our forces may be called upon to fight, we believe that they must be sufficiently capable to provide a degree of insurance against the failure to anticipate specific threats.

We have in the blueprint a very detailed analysis of the force levels. I will move very quickly through strategy forces, dimension of forces, if I may.

On strategy forces, arms control agreements with the Russians will, of course, bring down deployed U.S. strategic warheads from around 10,000 to 35,000; but arms control will not eliminate all nuclear weapons in the world at large. Nor should the United States give up its nuclear deterrent through arms control. Protecting U.S. security will require a minimum level of nuclear forces in our estimation for the foreseeable future to deter (1) Russia, if a political reversal takes place in Moscow, bringing either a hostile communist or hard-line nationalist regime to power; (2) a lesser by growing nuclear powers like China and rogue regimes like North Korea, Iran and Iraq, which are trying to acquire nuclear weapons programs; and (3) other countries that may acquire other weapons of mass destruction in the future.

Now, the Cold War pattern of nuclear deterrence which was suited certainly to a world dominated by two nuclear powers that behaved more or less rationally is no longer valid in a world in which many nations possess or want to possess weapons of mass destruction and long range delivery systems.

In today's world of proliferating weaponry, strategic defenses must assume a central role in defending the United States. The Cold War policy of deliberate vulnerability to missile attack and only token air defenses has become unthinkable in an age of proliferating nuclear and other weaponry of mass destruction.

We believe that strategic defenses and especially missile defenses should have three important roles in the post-Cold War world.

First, they should provide a defense against accidental or unauthorized attacks from established nuclear powers like China or Russia. Second, they should provide a defense against the proliferation of long-range delivery systems and weapons of mass destruction in the hands of rogue regimes like Iran, Libya, and North Korea. And, third, strategic defenses should share the burden with the offensive arsenal in meeting strategic targeting requirements.

Now, moving to conventional forces, the change in U.S. strategy away from the global containment of Soviet power to protecting U.S. interests in various regions of the world is, of course, requiring a restructuring of U.S. conventional forces.

In our opinion, the new strategy demands that conventional forces that are both strong and agile enough to dissuade and, if necessary, defeat any potential regional aggressor.

Given the need for flexibility and the ability to respond quickly to regional contingencies, the United States total force must consist of a higher percentage of active duty troops as opposed to those from the reserves.

The force projection strategy requires all the services take a prominent role in its implementation, but we believe here that the Navy and the Marine Corps will be the principal elements in this strategy.

Only the Navy is equipped to operate in three dimensions, on the sea, air and on the ground. Of course, the Army and Air Force, too, will have important roles to play in the force projection strategy and as a result, of course, will also have to be restructured. All forces, though, must be strategically mobile in order to move quickly to crisis regions and tactically agile in order to defeat an enemy force decisively.

As for the Air Force, the Gulf War proved, of course, that air superiority can be the key to victory in regional conflicts; but naval air power lacks the reach and punch to maintain air superiority throughout a major armed conflict. Therefore, in our opinion, the Air Force should provide the bulk of U.S. air power in regional conflicts for countering enemy aircraft, deep strike missions, and close air support for ground forces.

Finally, in the Army, all the services, of course, will play a critical role in projecting and using U.S. military might, but the Army is the only service that can guarantee America a decisive victory in land combat of the sort that was achieved in the Gulf War.

However, the Army should be able to respond and deploy quickly. The force projection strategy that we discussed here, that I've discussed here this morning requires an Army reconfigured for rapid mobility, not the static forces designed to counter land forces deployed by the NATO to counter the Warsaw Pact in Central Europe.

With the inevitable reduction in the size of forces, the emphasis will need to be more on mobile and lethal armies staffed by highly trained and combat-ready personnel.

Essentially, the Army should be ready to do more with less. Likewise, there must be a greater emphasis placed on fielding new transport planes and ships to lift U.S. forces to distant regions.

Now, the last step, Step 4, in this process of formulating a national strategy, of course, is providing the adequate resources. The Heritage total force and, according to our calculations, should cost about $1.511 trillion in budget authority for the five-year period from fiscal 1998 to fiscal 2002. This $1.511 trillion compares to the Clinton proposed level of $1.38 trillion. This assumes -- our budget figures assumes that the existing defense policies adjusted to curb the current appetite for entering into non-combat operations and peacekeeping operations which we would curtail and scale back. It also assumes that greater efficiencies are achieved at the Pentagon, including reducing infrastructure, and reforming the acquisition system through more decentralization.

Now, one final point on the budget. I think it is critical to recognize that the Bottom-Up Review Force structure is too large to be affordable under the Clinton administration's proposed budget. The Clinton administration's 6-year defense budget is likely more than $100 billion short over the 5-year budget period of what was required to keep a force of the size proposed in the Bottom-Up Review for both combat ready and a fully modernized force.

Now, more importantly, this budget is too small to support existing U.S. security commitments and will ultimately in our opinion force the United States to redefine some interest as no longer vital. Those interests that are likely to be downgraded are those related to preventing major power threats to Europe, East Asia and the Persian Gulf, since peacekeeping has become more frequent in recent years and is pressuring more of the modernization budgets and more of the other budgets needed in our estimation to maintain traditional role for our Armed Forces.

The second area that I mentioned that I'd like to discuss this morning, the one of forward presence, if I may go into that now? That is the issue of our alliances. Now, we believe that the core mission of U.S. foreign policy will be to preserve a global balance of power regionally.

By this, I mean that we will exercise our global role primarily through maintaining a balance of power, the balances of power in key regions such as the Gulf, such as Asia, such as Europe. These regions, in our estimation, must be the focus of any assessment of future U.S. security interests and strategy.

So, if I may, I would like to briefly look at those three regions and how they affect our alliances, our attitude towards our alliances and our forces there. If I may, I'd like to look at Europe, first.

Now, that the Soviet threat has disappeared, there are two principal reasons to keep United States troops in the European theater: (1) to demonstrate America's unwavering commitment to the balance of power in Europe and (2) to provide a core force that could be expanded in a crisis.

To meet these two goals, the United States forces in Europe have been and should be reduced from Cold War levels. In the short term, the United States should refocus NATO on its mission of collective defense against a major power and threat to Europe. Without such direction, NATO could become a large and disparate collective security organization like the organization of security and cooperation in Europe or even the United Nations.

To aid in this very important task, the United States should encourage the European allies to take greater responsibility for peripheral security threats that can be addressed by crisis management, humanitarian relief operations and peacekeeping.

The strategic division of labor reflects both a different national security interest and the different political and military capabilities of the United States and our European allies.

NATO and European security structures like the Western European Union should be complementary and not competitive. In order to foster that cooperation, we believe the United States should lay out clearly the principles that govern the use of American military force in European security affairs. And, as a rule, the U.S. should undertake significant military actions in Europe only when the U.S. role is consistent with NATO's mission of collectived defense, the U.S. force contribution is unique and the effect of the military effort is decisive.

We think that the combined joint task force, a concept developed by NATO, may help make this division of labor possible by allowing European countries to use some NATO resources such as bases, equipment, and command and control infrastructure for non-NATO operations.

On Asia, turning to Asia, since the end of --

CHAIRMAN ODEEN: Kim, you have about five minutes to go here.

MR. HOLMES: Since the end of World War II, of course, the United States has prevented regional arms races by insuring that important nations, particularly Japan and South Korea were protected under the U.S. defense umbrella.

Looking at the major threats in Asia, of course, the existing one in North Korea and the possible emergence of China as a regional power, certainly, in the near term and possible as a global power in the long term, we think it is critically important that the United States preserve the existing alliance system in Asia.

As for our forces in the Gulf, we believe that in order to protect our oil interests in the Gulf, to protect the stability of Saudi Arabia, also to protect the key NATO ally, Turkey, against the possible threats from Iran, Iraq and Syria, that the United States -- it requires providing a powerful naval forces and the flexibility to protect our interests possibly even with land forces in this area in the future.

Since I only have a few minutes left, I'd like to move to the third area that we discussed and that is on peacekeeping. The effects of extended peacekeeping on the commitment of the United States military.

We have seen a precipitous rise in spending on peacekeeping in recent years in the Clinton administration. From 1993 to 1995, the United States spent about $7 billion in support for UN peacekeeping in only three missions, Somalia, Bosnia and Haiti. The account that has been raided time and time again to pay for this, of course, is the modernization account. This raises a great deal of concern, in our opinion. Also, it's had an effect on readiness, operational tempos for all the services are higher than at any time since the height of the Vietnam War.

The sheer constancy of these operations is quite literally burning out large sections of the Armed Forces. It's wearing out equipment, their morale and denying them time to prepare for the more demanding task of conducting wartime operations; a task, in our estimation, still necessary to maintain a successful strategy of deterrence.

But the last area that I think is perhaps the most problematic and difficult to deal with is the one of doctrine, the impact of peacekeeping, a non-traditional military operations on the way the Armed Forces organize themselves and the way that they formulate their doctrine.

I believe that right now the United States is shifting its focus away from the requirement to defeat an enemy in battle and more towards the requirement of persevering in long-term peacekeeping operations that have no clear goals or no identifiable end state.

I am concerned, for example, that the same crack tank battalions of the U.S. Army Europe that defeated the Republican Guard in Desert Storm are now being rotated to the United Nations Peacekeeping Mission is Macedonia.

Now, this leaves our best tankers half a continent away from their tanks for six months at a time -- a period in which their combat skills and their mental focus atrophy and requiring some six to nine months to be restored upon returning to home station. Given the train-up time required for this peacekeeping operation, this removes that tank battalion from our nation's combat inventory for up to 18 months.

I don't think the United States can afford either doctrinally, materially, fiscally or strategically to endure long-term commitments to peacekeeping operations that have no end in state or exit strategy.

The United States stands alone as the power able to deter Saddam Hussein, Kim Il Jung, in a possible revanchist Russia, or even in the future, a possible expansionist China. To dull that important capability through a protracted commitment to high-cost, low-return missions of peacekeeping would be shortsighted in the extreme.

In the end, the world's only Super Power must focus on being most prepared for the conflicts that are less likely to happen, but the most consequential if they do. That is our unique role in the world today and that is politically and strategically our major challenge as a nation.

Thank you very much.

CHAIRMAN ODEEN: Thank you very much, Dr. Holmes.

CHAIRMAN ODEEN: I am going to have each of the groups -- we will start with Heritage -- go to the podium, and we will take up to 10 minutes, depending on the number of questions, with each one, and then we will go on to the next group. That will be for the Panel. Then we'll turn to the audience and let you ask questions with whoever you want to question.

Dr. Holmes is going to be joined by Tom Moore, also from Heritage, and they will both answer questions. Let me just start with one.

You mentioned dollars in the defense budget, compared to your recommendation, I think it was $1.5 trillion compared to 1.3 something or other. I don't remember the exact number.

Do you know -- this is an information question, because it leads to my next question -- how much is in the Congressional Resolution which is apparently the basis for the budget deal that's being discussed between the Congress and the --

MR. MOORE: Mr. Chairman, I don't believe that the congressional Budget Resolution has been completed, yet, if I'm not mistaken.

CHAIRMAN ODEEN: This is the one from last year, which I'm told is the basis for -- it's somewhere between $5 billion and $10 billion a year, and the out year is less, as I understand. I'm curious as to the number.

I guess my question is really going to be, given the apparent intent of the Congress and the White House to cut a budget deal, and that budget deal will be, as I understand, lower than the number that's in the FYDP, the Pentagon FYDP, how should Defense respond to that issue? Because this is something that could be facing them pretty directly here in the very near future.

MR. MOORE: Well, you're confronted, obviously, with some hard choices. That's what you're having to manage.

It seems to me that we are confronted with having to balance three variables. Any strategic equation, to remain in balance, has to balance the mission, the means, and the method. Of course, what we are focusing on with the budget cuts is the falling of the means -- force structure, equipment, and so forth.

You can only pull down the means so far without having to correspondingly adjust the mission or the method. For example, you could perhaps increase some efficiencies in your method -- new technology, missile defense, gaining operational capabilities in space, for example -- that would compensate for some falling of the means.

Our concern is that, if we continue along this path, the mission itself is going to have to be also compromised, and that means perhaps, although the Heritage Foundation would not endorse this, we may be forced, at some point, to have to retrench strategically, to bring back forces that are forward deployed in Europe and in Asia.

Essentially, what this means is that the budget crisis that we're dealing with is forcing us to no longer be a global power, but to retrench to the level of a regional power.

I don't think that that choice has been explicitly enunciated, either by the Congress or by the Administration.

Perhaps this is something that this panel can do, to say, "Look, this is the choice that you are forcing. Are we going to remain a global power or not? And, if we become, in effect, a regional power, that is going to have worldwide implications for the security, prosperity, and stability of the United States."

I don't see any way out of that dilemma, short of maintaining some level of means. If you continue to say, "Well, the problem is budget driven," it's like you ascribe a certain autonomy to the budget, and the budget is not an autonomous, thinking entity. The budget is simply a tool that we use to make choices and set priorities.


MR. HOLMES: May I just add one thing?


MR. HOLMES: That, if you'll notice the difference between the five-year figure and our plan, and the figure in Clinton's long-range plan, at least our estimates for it are not all that great, not all that great of differences.

And we, as I tried to make clear in my presentation, we have accepted the necessity of budget constraints. What we've tried to do in that environment is to establish priorities.

Two areas that I did mention were, one, the savings and decentralizing Acquisition Reform; and some of the outsource and privatization ideas that we heard earlier I think are excellent ideas, where we can reach some savings.

On top of that, we were recommending cutting back on some of the non-traditional peacekeeping operations which we believe are cutting into readiness and modernization funding.

So we do see the need for priorities. If you look at the fact that the Republican-controlled Congress has asked for more money than the Clinton proposal each year, we don't think that this is an unrealistic budget.

CHAIRMAN ODEEN: Bob Kimmitt and then Rich Armitage.

MR. KIMMITT: I was going to ask a question, if I could, that I think is at the intersection of the three presentations, but I would like Heritage's view, in particular.

It seems to me that what you really were talking about in your presentation was national security, which has as elements foreign policy, defense policy, international economic policy, resting on a strong intelligence base. I think that really picked up, from both the admiral and Tom McInerney's comments thereafter.

You commented on the defense policy piece, the intelligence piece. I guess one question that I would have is, as you look to both present day requirements and future requirements, do you see part of what the Defense Department would be asked to do caused by an inability or an unwillingness to commit resources in the foreign policy area, therefore throwing onto the military requirements that might have been handled better through diplomatic means?

And would you also recommend, therefore, looking closely at possible increases or, certainly, avoidance of reductions in the foreign affairs budget?

MR. HOLMES: Well, certainly, a lack of leadership or poor leadership in foreign policy across the board, whether it's in diplomacy or executing our military strategy, will certainly increase the likelihood and chances of having the armed forces come in and clean up in a conflict or deal with a conflict that we might have avoided.

Clearly, as I was trying to make clear in my presentation, you do need sufficient forces to be able to dissuade and deter enemies from challenging our interests around the world. But just having those forces is not enough alone.

I do believe that, particularly in the case, for example, with respect to the way our policy has been conducted towards China over the last five years, I think since it was not handled as well as it could be, I think that, as a result of that, in dealing with China, that relations with China deteriorated perhaps unnecessarily, that we found ourselves in a crisis over the Taiwan issue last year that perhaps could have been avoided.

As a result of that, we had to deploy a couple of aircraft carriers there to try to demonstrate our resolve, to try to demonstrate to the Chinese that, in fact, we did mean business because they had come to the conclusion over the previous couple of years that we might not mean business.

So certainly, the conduct of diplomacy and a coherent and consistent practice of foreign policy is absolutely necessary for a broader national security policy, and I think that's your broad point.

As for the actual deployment of monetary resources which is, I think, what you are getting at, perhaps in terms of foreign aid or support of the United Nations or supporting our embassies abroad, we very much believe that we need to maintain adequate funding for our embassy and our representation abroad. Whatever is needed should be done for that.

We have had some additional requirements imposed upon us because of the collapse of the Soviet Union, and so there is more to do now than there was before, and this has caused some problems in funding for the State Department.

On the other hand, we do not believe that economic development aid, particularly as practiced by the Agency for International Development, is necessarily the best way to try to avoid crises in the world. We believe that a lot of that aid is wasted. It does not accomplish the goal that it is supposed to accomplish.

We do not believe that there is some kind of an alternative choice that should be posed between foreign aid and spending on defense.

For the United Nations, on the other hand, we believe the United States should be vigorously involved in the United Nations, particularly in the General Assembly and the Security Council, where we have to be. But, on the other hand, we believe that there are some specialized agencies that we do not necessarily need to be involved in, and we do not see, really, our involvement in the United Nations as a necessary key to maintain America's key role as a global power in the future.

CHAIRMAN ODEEN: Rich Armitage.

MR. ARMITAGE: Thank you, Mr. Chairman. I would like to take advantage of the mike to get a two-for, if I could.

First of all, I applaud Dr. Holmes and his colleagues' testimony, particularly the mention of space. We haven't heard too much about it. One of our charters is to look 15 or 20 years out into the future.

Is there anything you would like to say about your understanding of the Pentagon and DoD's activities in space right now?

And the second, unrelated question is, you do not mention in your force sizes any comment about the size of the U.S. Marine Corps, though you do talk about Army divisions and carrier battle groups for the Navy and wings for the Air Force.

Would you care to say anything about the general size and composition of the U.S. Marine Corps; secondarily, any comments about your views of the National Guard?

MR. HOLMES: I'll ask Tom Moore to answer the question on space. He has considerable background in that area.

MR. MOORE: Well, Mr. Armitage, I think our vision seems remarkably Earthbound in this area, and I'm not sure why.

The Gulf War certainly indicated the extraordinary dependence that our terrestrial forces place upon space assets. In fact, General Horner who, as you know, commanded the Air Forces in that war, said that the Gulf War was many firsts but it was also, in many respects, the first space war that this nation had conducted.

Our forces absolutely depend upon space for navigation, surveillance, communications, command and control, early warning. And it seems to me that we simply haven't internalized that reality sufficiently, either in our force planning, our doctrine.

We don't seem to have grasped the fact that space really is the ultimate strategic high ground. The nations of the future, who learn how to operate there, will in many ways be analogous to the nations of the 18th century, that learned how to exploit the high seas.

Britain, being a small country with very few resources but had global reach through its Royal Navy, became a great power, and I think we're going to see space as analogous to that.

So I don't think that the Pentagon is giving sufficient attention to this, either to increasing our capabilities, but also, as we become so reliant upon our space assets, to protecting the capabilities that we have there.

For example, every year, Congress has had to bring the Pentagon kicking and screaming to support a kinetic energy anti-satellite program. Many people see that somehow as threatening or destabilizing, but that is strictly a program, a system to defend our own space platforms.

I think the Pentagon needs to do more in the area of cheap, reusable launch vehicles. We spend entirely too much to put payloads into space right now. We ought to be looking at inexpensive, reusable, low-Earth operating, manned cruisers.

There are a lot of things that we need to be doing that we're not doing, and I won't take your time to elaborate, except to say that this is an area that needs a lot more focus and resources.

Well, as to the Marine Corps, we essentially have recommended maintaining the Marine Corps current end strength at 174,000 plus whatever, 42,000, in reserve, and the current division structure.

I would say this. We think that certainly the Marine Corps needs modernization, as well.

We think, for example, the V-22 Tilt Rotor OSPREY Program is absolutely essential to maintaining a mobile, deployable Marine Corps to replace its aging fleet of medium-lift helicopters which, in many respects, are now dangerous for the troops to fly, older than the crews.

So that's one area that we think is absolutely important, to maintain a mobile and effectively deployable Marine Corps.

The Marine Corps really is our first line of expeditionary forces and, as a maritime power, we think that's absolutely essential to maintain.

National Guard was the other question. It's very regrettable right now that we're seeing, as part of this whole QDR process, sort of the outbreak of open hostilities between the active uniformed forces and the Guard, particularly the Army and the Army Guard.

We think the Guard plays a vital role. They, in effect, are becoming more than just a sort of long-term strategic reserve. As you know, we have 15 combat brigades in the National Guard that are ready brigades, that are supposed to be deployable within 90 days of the mobilization date.

We think perhaps that mobilization time could be shaved, that we need to rely upon them more and more as the active forces fall. Clearly if the QDR produces an Army end strength or an Army force structure that is, say, at an eight-division level, the National Guard is going to be ever more important.

One thing that is overlooked is the high quality that you generally get in the Guard. Even though they don't train as regularly and maintain the immediate readiness that active forces do, you have a solid base there of highly motivated, stable people, low turbulence in the units, good quality leadership. And, with the right training, the National Guard really is indispensable, I think, to the sort of conflict that we are liable to face in the future.

So we would encourage minimal tampering with the Guard end strength and actually increasing the resources, at least marginally, including modernized weapons that are going to the Guard, so that at least those 15 ready deployable brigades will truly be ready when they are needed.

CHAIRMAN ODEEN: I think Jim and Janne, if you have some very short questions and brief answers. Otherwise, we'll need to -- if you want to just ask a question. Jim first, and then Janne.

MR. McCARTHY: Could you amplify your comments on your strategic capability of one-and-a-half regional wars?

MR. HOLMES: We put considerable effort into coming up with that particular scenario. We started with the conclusion that we reached in our review of the bottom up review force, that, in fact, the force that was envisioned in that review would be incapable of doing the two-war scenarios nearly simultaneously.

The analysts on the staff were using some of the methodology that then Les Aspin, Secretary of Defense Les Aspin, had used when he was chairman of the House Armed Services Committee, and forwarding some of his options for what he thought our force structure and strategy should be.

You may recall he had how many options? I think it was three or so options.

We basically used the same methodology that he used at that time to try to come up with the kinds of forces that we thought were necessary in order to execute the strategy that we came up with, and we concluded that, with the force, that in order to deal with the possibility of, at least in a five-year term, of one major conflict, at that time, of course, we were looking at the possibility of either North Korea being the most likely.

And then, at the time, the Gulf War had just ended and it looked as if there was not going to be the likelihood of a major regional conflict in the Gulf Region, at least for the next five years.

We thought it was acceptable, at that point, to propose a strategy that would deal with just one major regional conflict and, at the same time, to be able to deal with a half-war on the order of Panama.

Realistically, we looked at the numbers of the forces that we had, and this is what we thought was the most it could do.

At any given time, if either the situation in Europe were to heat up, if Russia were to turn around or if Saddam Hussein, either Saddam Hussein or Iran were looking like they were on the verge of maintaining or committing a major bid for hegemony in that region, we felt that, at that point, we would have to start all over again and look at larger forces. This was actually quite close to the ones that we had during the end of the Cold War period, to deal with the Soviet Union.

I just want to add that much has been made about the lack of a global, a single superpower threat to the United States and, therefore, this means that we can radically downgrade our forces. I think the essence of our strategy is that, yes, it's true, we no longer have the Soviet Union to face anymore.

But we have regions in the world -- Europe, the Gulf, and Asia -- where we have the possibility of a regional conflict, and we will be maintaining our global position by trying to maintain regional balances of power. So we have to deal with these contingencies, these regional contingencies, in a realistic way.

The Persian Gulf War, of course, was not a Cold War war, it was a post-Cold War war, and we had to deal with that. Luckily, we had the force that had been built up in the latter years of the Cold War and we defeated Saddam Hussein handily.

But it's very important, in my estimation, to emphasize that we need to maintain a conventional capability of moving around to these regions as quickly as necessary in order to defend our interests there, and that is going to define our global role in the foreseeable future.

CHAIRMAN ODEEN: Why don't we go on and have Janne ask her question?

MS. NOLAN: I just wonder if you could just quickly elaborate on, as you draw the distinction between non-combat operations and your very detailed critique of that, how that applies to the less than traditional or standard concepts of intervention in areas where we have vital interests?

And examples, obviously, are failure of authority, of central authority in Russia, for example, that poses a threat of further dissemination of weapons of mass destruction or a different scenario in Korea, that actually is an implosion of government, rather than an actual calculated act of aggression.

You see no role for our preparedness in those types of contingencies?

MR. HOLMES: It's not that I see no role for it. It's just that I see still the major role is the traditional role of deterrence of warfare between states. That is the only thing that the United States uniquely can do that no other power can do these days.

When you look at the nontraditional operations, for example, like in Bosnia, or peacekeeping in Europe, I believe that we certainly have an interest in being involved in peacekeeping in Bosnia and, of course, we would have an interest in being involved in any way where we have a unique and decisive role in any of these other areas that you mentioned.

But it should not be done at the expense of our primary mission. It should not be done in a way that weakens our capability to deter conventional or traditional warfare.

We talked about the constraints of budgets. We have to make some choices somewhere; and it seems to me that we should be concentrating on the most important role for the United States to play.

In Bosnia, I certainly believe that the United States' participation in the peacekeeping force there is something that is necessary. It is already there. We had some questions about the way it was done, whether it needed to be done the way it was done.

But we believe that, when it comes to providing large numbers of U.S. ground troops, particularly in Europe, when they're not necessary, when the European countries have sufficient personnel to do this, we don't see why there is such a great need for the United States to provide that.

We can provide logistical support, intelligence support, all kinds of other support; but I don't know why the United States has to take the lead in providing manpower, particularly ground troops, in these kinds of operations, particularly when it hurts our combat readiness, particularly when it causes an extraordinarily high tempo of operations, and particularly when it cuts into our modernization budget.