NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1995 (Senate - June 23, 1994)

[Page: S7500]

The Senate continued with the consideration of the bill.

The PRESIDING OFFICER. The Senator from Louisiana.

Mr. JOHNSTON. Madam President, I understand the Senator from Wisconsin has a unanimous consent request. I would like to yield to him for that purpose, and retain the floor.

PRIVILEGE OF THE FLOOR

Mr. KOHL. Madam President, I ask unanimous consent that Bill Brennan, a fellow in my office, be granted the privilege of the floor during consideration of the defense authorization bill.

Mr. JOHNSTON. I understand the junior Senator from Wisconsin also has a unanimous-consent request.

Mr. FEINGOLD. Madam President, I ask unanimous consent that Bob Gerber, a congressional fellow in my office, be granted the privilege of the floor during the consideration of the National Defense Authorization Act for fiscal year 1995, and all votes thereto.

The PRESIDING OFFICER. Without objection, it is so ordered.

AMENDMENT NO. 1840

(PURPOSE: TO RESTORE THE LEVEL OF FUNDING FOR THE NATIONAL DEFENSE SEALIFT FUND THAT WAS REQUESTED IN THE BUDGET FOR FISCAL YEAR 1995 SUBMITTED BY THE PRESIDENT BY REDUCING FISCAL YEAR 1995 FUNDING FOR LHD-7)

Mr. JOHNSTON. Madam President, on behalf of myself, the Senator from California, Mrs. Feinstein, and Senators Breaux, Boxer, and Kohl, I send an amendment to the desk and ask for its immediate consideration.

The PRESIDING OFFICER. The clerk will report.

The legislative clerk read as follows:

The Senator from Louisiana [Mr. Johnston], for himself, Mrs. Feinstein, Mr. Breaux, Mrs. Boxer and Mr. Kohl, proposes an amendment numbered 1840.

Mr. JOHNSTON. Madam President, I ask unanimous consent that the reading of the amendment be dispensed with.

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment is as follows:

On page 249, line 7, strike out `1949' and insert in lieu thereof the following:
1949.

SEC. 1068. ACQUISITION OF STRATEGIC SEALIFT SHIPS.

(a) Amount for Shipbuilding and Conversion.--Notwithstanding section 102(3), there is hereby authorized to be appropriated for the Navy for fiscal year 1995, $5,532,007,000 for procurement for shipbuilding and conversion.

(b) National Defense Sealift Fund.--Notwithstanding section 302(2), there is hereby authorized to be appropriated for the Armed Forces and other activities and agencies of the Department of Defense $828,600,000 for providing capital for the National Defense Sealift Fund.

Mr. LOTT. Madam President, I observe the absence of a quorum.

Mr. JOHNSTON. Madam President, I believe I had the floor.

Mr. LOTT. Madam President, I do not believe the Senator keeps the floor after he submits an amendment. I ask for this time so I have an opportunity to at least take a look at the amendment. I have not had a chance to see it at all. I would like to at least have a chance to look at it before we proceed, so I would like to observe the absence of a quorum.

The PRESIDING OFFICER. The clerk will call the roll.

The legislative clerk proceeded to call the roll.

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Mr. JOHNSTON. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. JOHNSTON. Madam President, has the amendment been reported?

The PRESIDING OFFICER. Yes.

Mr. JOHNSTON. Madam President, this amendment undoes an amendment adopted in error in the Armed Services Committee which transferred $600 million from the so-called fast sealift account to build an LHD-7, which is an amphibious attack ship.

Madam President, the action of the Armed Services Committee was opposed by the Navy, by the Secretary of the Navy, is opposed strongly by the Chairman of the Joint Chiefs of Staff, Gen. John Shalikashvili, whose letter I have that says that the fast sealift program is the centerpiece of Army doctrine now. It is opposed by the administration, and it is opposed by the chairman of the Armed Services Committee.

With that kind of lineup, Madam President, my colleagues may ask: How inthe world did the Senate Armed Services Committee ever adopt the amendment? Well, the answer is very simple. They were given erroneous information about the U.S. Navy. I have a memorandum here by Mr. R.J. Natter of the Office of Legislative Affairs of the Department of the Navy, dated 13 June 1994, in which he described how the erroneous information came about. He says in the first sentence:

The attached memorandum describes the sequence of events which resulted in your staff being provided incorrect information regarding the option expiration date for new construction ships 2 and 3, awarded to NASSCO.

It goes on then describing how the Senate Armed Services Committee was given erroneous information.

In effect, Madam President, what the Senate Armed Services Committee was told was that you could fund both the sealift program and the LHD-7 amphibious attack ships within this budget without hurting the fast sealift program.

I ask unanimous consent that the letter from R.J. Natter be printed in the Record at this point.

There being no objection, the material was ordered to be printed in the Record, as follows:
DEPARTMENT OF THE NAVY,

Office of Legislative Affairs,
Washington, DC, June 13, 1994.
Memorandum for: Mr. Steve Saulnier and Mr. Creighton Greene.
Subject: Sealift new construction contract options.

1. The attached Memorandum describes the sequence of events which resulted in your staff being provided incorrect information regarding the option expiration date for new construction ships 2 and 3 awarded to NASSCO. Contrary to the initial information provided to OLA by NAVSEA on 9 June, the option expires on 31 December 1994 vice 31 December 1995. The correct option expiration date (31 Dec 94) was provided to my office on 10 June and passed immediately to you on that same date.
R.J. Natter.

Mr. JOHNSTON. The letter points out that the information was in error.

Why is it, Madam President, that General Shalikashvili states: `However, this diversion would place at risk the centerpiece program of the MRS'--that being the Mobility Requirement Study--`despite the critical shortfall cited by many commanders in chief in congressional testimony. Further, it changes the priorities of an essential program developed with the Joint Chiefs of Staff and approved by the Secretary of Defense.'

I ask unanimous consent that General Shalikashvili's letter be printed in the Record at this point.

There being no objection, the letter was ordered to be printed in the Record, as follows:

The Joint Chiefs of Staff,
Washington, DC, June 22, 1994.

Hon. Sam Nunn,
Chairman, Committee on Armed Services, U.S. Senate, Washington, DC.

Dear Mr. Chairman, I am writing to express my concern about the current version of S. 2182 that would significantly damage our long-standing, integrated lift requirements as expressed in the 1992 Mobility Requirements Study (MRS) and supported in our budget request.

My primary concern is that the proposed legislation diverts all FY 1995 funding from construction of two Large Medium Speed RO/RO ships (LMSR) to an initial down payment for another multi-purpose amphibious assault ship (LHD) and also funds two Maritime Pre-positioning Ships (MPS) that the Department of Defense did not request. I understand this committee revision was based upon erroneous information, later corrected, which was provided to you by the department. However, this diversion would place at risk the centerpiece program of MRS despite the critical shortfall cited by many CINCs in congressional testimony. Further, it changes the priorities of an essential program developed with the Joint Chiefs of Staff and approved by the Secretary of Defense.

Another concern I have is that the bill diverts $43 million in funding from the purchase of Ready Reserve Force (RRF) RO/RO ships which are key to the surge of early arriving forces. The SASC instead funds a subsidy program to incorporate defense features on future US-built commercial ships. This would sacrifice near-term readiness that supports early combat force deliveries in favor of an unproven concept designed to deliver follow-on materiel. At a minimum, I request the Senate provide the Department the legislative authority to acquire these ships.

If enacted, these measures will unravel our carefully constructed sealift acquisition program. This measured and studied program has enjoyed wide support among military professionals, defense executives and the Congress as both absolutely essential and fiscally responsible. The MRS, a rigorous study which included over 90 warfighting analysis cases, also received the endorsement of each member of the JCS.

Please reverse these actions to support our sealift requirements--the military strategy critically requires it. I strongly support the execution of the MRS program.

Sincerely,

John M. Shalikashvili,
Chairman of the Joint Chiefs of Staff.

Mr. JOHNSTON. The last sentence states:

Please reverse these actions to support our sealift requirements--the military strategy critically requires it.

Madam President, what is the fast sealift program? With the end of the cold war, we could no longer place troops in great numbers all around the world.

At one time we had 300,000 troops in Germany. We had troops all over the world. And fast sealift has always been important but not such critical importance as it has been since the demise of the cold war when we had to bring troops back to the continental United States, but with a critical fast sealift ability to be able to deploy them quickly to trouble spots around the world.

For example, the present difficulty with North Korea. We have reduced our number of troops in South Korea. I believe that we now have only 37,000 troops in South Korea, a tripwire amount. If hostilities should break out in South Korea, we would have to very quickly deploy troops and materiel to South Korea to defend them. We would have to deploy them very quickly.

My colleagues who are old enough will remember in 1950 when the North attacked the South how the North Koreans were able to chew up a huge amount of the South Korean Peninsula because it took our troops so long to get there.

Recognizing this difficulty, in 1991, the Chairman of the Joint Chiefs commissioned a study called the MRS, the mobility requirement study, to determine how much sealift we would need, of what kind and nature, to get what kind of requirements to what trouble spots in the world, at what costs, and on what time line.

They came up with a study that concluded that what we needed were some 36 ships which we called roll-on/roll-off ships. Some are fast sealift, some are medium-speed ships, having this ability to roll on and roll off ships. The 36 ships will allow some 2 million square feet of prepositioned materiel equipment within 15 days.

In other words, a balloon goes up in North Korea. Once we build this fast sealift, you could get 2 million square feet of materiel within 15 days to South Korea. It would also enable us to get two heavy divisions on site within 30 days. So, these were thought to be absolutely essential requirements to the new post-cold-war strategy. If you are going to bring the troops back to the United States, you must be able to get them to the trouble spots quickly.

As General Shalikashvili says, this fast sealift is a centerpiece of our strategy. Either you have to have the troops out there on site, which means you have to have many more troops at much greater costs, or you have to have the fast sealift capability.

In Operation Desert Storm we learned a great many things. We learned about the importance of smart weapons, about the importance of technology, and about the importance of having overwhelming force. We also learned about our difficulties in our sealift. It so happens that that was no problem in Operation Desert Storm because we had some 6 months within which to get our materiel and our manpower over into the desert location.

Madam President, President Clinton said last week that is probably the last conflict that we will have the luxury of that much time to get our troops over.

The next time the balloon goes up it will probably be on a much faster timeline, as in North Korea. If North Korea attacks, and we hope and pray as to that particular conflict the immediate danger has been taken out--we have had discussions here about that particular problem today. Some of our colleagues think that that issue is just as difficult as it ever was. But there are many other difficult places on the face of the Earth which will require a quick reaction.

It is, therefore, absolutely essential, Madam President, that we allow for these 36 roll-on/roll-off ships. Now there are 19 of these 36 ships that have yet to be built. There are six what we call options. An option really is an offer stating a price, stating a means to build a ship, with a specified time for acceptance of that offer. There are now six of those options at a shipyard in my State, Avondale; six at NASSCO, National Steel, I think, in California, in San Diego; five conversions of presently existing ships; and two yet to be determined.

The first two of those options at Avondale have been exercised. The first two at NASSCO have been exercised.

What the Armed Services Committee did was put in this budget $600 million to pay for those first two NASSCO and Avondale ships, so that we are just beginning on meeting these requirements for fast sealift. And the first $600 million was placed here in order to do that.

What the Armed Services Committee was told was that this amendment would not interfere with those first four ships going forward and being constructed. In fact, it would not only prevent those ships from being constructed, but the LHD-7, which is an excellent amphibious attack ship, which is the alternative funding provided by the Armed Services Committee. That is a $1.4 billion ship.

So you take the first $600 million, and you have an unmet obligation for the additional $800 million, which would probably not only take these four fast sealift ships, but take the next six or so fast sealift ships. So you would be saying probably so long to the whole fast sealift program.

Madam President, I am sure the Armed Services Committee would not have done that had they been given the correct information. I feel sure that the Senate would not do that based upon the correct information. It is rare that you can stand on the floor of the Senate and have an issue which is really clear, because usually by the time issues are here on the floor of the Senate they are hotly debated, highly controversial, with equities on both sides.

With respect to this issue, Madam President, I say without fear of contradiction there is no other position than the position of Senator Feinstein and me with respect to this amendment. I hope that we will be able to find an alternative way of funding the LHD-7 which, as I mentioned earlier, is an excellent amphibious attack ship. Everyone would like to fund it, and I would like to cooperate with my distinguished friend from Mississippi, Mr. Lott, in finding an alternative way to do that. But the fast sealift program Madam President, is the centerpiece of our new doctrine. You cannot have it both ways. You cannot reduce the size of your armed force and have a doctrine that depends upon a projection of power by fast mobility of those troops to a trouble spot quickly, and then deny the ability to get them there.

That is what the action of the Armed Services Committee, inadvertently, mistakenly, to be sure, in good faith, to be sure, but nevertheless that is exactly what the action of the Armed Services Committee has done.

All our amendment does is restore what General Shalikashvili says is the centerpiece of this program.

I would also like to print in the Record at this point, Madam President, a letter from Gen. Colin Powell, dated 9 July 1993, really to the same effect; the final sentence being: `Your continued support for the MRS'--that is the mobility requirement study--`recommendations is critical if we are to solve the identified mobility shortfalls.'

Madam President, I ask unanimous consent to print that letter in the Record at this point.

There being no objection, the letter was ordered to be printed in the Record, as follows:

Joint Chiefs of Staff,
Washington, DC, July 9, 1993.

Hon. Sam Nunn,
Chairman, Committee on Armed Services, U.S. Senate, Washington, DC.

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Dear Mr. Chairman, This letter reaffirms my full support for the recommendations of the Mobility Requirements Study (MRS). I understand that there are Congressional questions regarding whether a final decision on the MRS recommendations has been made and if additional analysis concerning alternative pre-positioning options is required.

A decision on the MRS recommendations was made when the Secretary of Defense signed Volume I of the MRS on 23 January 1992. The MRS remains the central defining mobility document within the Department of Defense, as evidenced by the recent Deputy Secretary of Defense approval of MRS Volume II. Exhaustive analysis during the study demonstrated the MRS recommendations to be the best solution for meeting warfighting requirements at moderate risk at the lowest possible cost. Further analysis is not needed and would either hold in abeyance or slow the acquisition of the MRS-recommended lift assets, and will delay implementation of the needed mobility improvements.

Your continued support for the MRS recommendations is critical if we are to solve the identified mobility shortfalls.

Sincerely,

COLIN L. POWELL,

Chairman of the Joint Chiefs of Staff.

Mr. JOHNSTON. Madam President, I would simply like to emphasize what the Chairman of the Joint Cheifs of Staff says in his letter of this month: `Please reverse these actions to support our sealift requirements. The military strategy critically requires it.'

`The military strategy critically requires it.'

Madam President, there is no other position, I submit, but to support the position of Senator Feinstein and myself, and I urge the Senate to do so.

Mrs. FEINSTEIN addressed the Chair.

The PRESIDING OFFICER. The Senator from California is recognized.

Mr. FEINSTEIN. Madam President, I rise today as an original cosponsor of this amendment to restore $600.8 million to a high-priority military program--the National Defense Sealift Fund.

The Sealift Program is extremely important to U.S. national security. As fewer U.S. troops are deployed overseas, it becomes even more important to have the ability to quickly and effectively transport military personnel and equipment anywhere in the world.

The sealift program--and the National Defense Sealift Fund--addresses this high priority national security requirement and is strongly supported by the Joint Chiefs of Staff and the regional commanders in chief.

Before I get into the specifics of the sealift program and why it is so important to restore the funds requested by the President, let me briefly summarize how we got to this point.

INCORRECT INFORMATION

During its markup of the Defense Authorization Act, the Senate Armed Services Committee recommended shifting $600.8 million from the National Defense Sealift Fund to the LDH-7 amphibious assault ship, which was not requested by the President nor supported by the Pentagon.

However, as the chairman of the Armed Services Committee and others now realize, the committee's action was based on factually incorrect information provided to staff by the Navy.

In a recent memorandum to the committee, Admiral Natter, the Chief of Navy Legislative Affairs, states that certain events resulted `in your staff being provided incorrect information regarding the option expiration date for new construction ships * * * the option expires on December 31, 1994 vice December 31, 1995.'

I ask unanimous consent that the memorandum be printed in the Record at the conclusion of my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 1).

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Mrs. FEINSTEIN. As a result of this error, fiscal year 1995 funds were shifted to the LHD-7 amphibious assault ship--which, by the way, will be incrementally funded at only 40 percent of the actual cost of $1.4 billion--on the assumption that new construction of the sealift ships would not be affected. However, without fiscal year 1995 funds for the National Defense Sealift Fund, options for new construction of sealift ships cannot be exercised, and this high-priority program will be unacceptably delayed.

So, I believe that if incorrect information had not been provided to the committee by the Navy, we would not be here today. This amendment corrects the Armed Services Committee's action, which was based on faulty information.

SUPPORT FROM THE JOINT CHIEFS OF STAFF

It is vitally important to restore money to the National Defense Sealift Fund. As I previously stated, this program is also strongly supported by the Joint Chiefs of Staff. Let me read from a recent letter from General Shalikashvili to the committee:

I am writing to express my concern about the current version of S. 2182 that would significantly damage our long-standing, integrated lift requirements as expressed in the 1992 mobility requirements study (MRS) and supported in our budget request.

My primary concern is that the proposed legislation diverts all fiscal year 1995 funding from construction of two large medium speed RO/RO ships (LMSR) to an initial down payment for another multi-purpose amphibious assault ship (LHD) * * *.

This diversion would place at risk the centerpiece program of the MRS despite the critical shortfall cited by many CINCs in congressional testimony. Further, it changes the priorities of an essential program developed with the Joint Chiefs of Staff and approved by the Secretary of Defense.

So, as you can see, General Shalikashvili, the Chairman of the Joint Chiefs of Staff, strongly supports restoration of the National Defense Sealift Fund.

I ask unanimous consent that this letter, as well as letters from General Fogleman, commander of U.S. Transportation Command, and A.J. Herberger, Maritime Administration, also be printed in the Record at the conclusion of my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 2.)

Mrs. FEINSTEIN. Madam President, the Sealift Program is also supported by the Secretary of the Navy.

I called the Secretary of the Navy last night and said, `Secretary Dalton, what about this program?'

He said, `It is our top priority.'

I said, `What about the LHD-7?'

He said, `No question, it is a good ship; but this is our priority and this is what we are asking for.'

I said, `May I quote you?'

He said, `Yes, you may quote me.'

As you know, and has been said, as a result of the mistaken information, funding of $600 million was applied to the LHD-7.

I would very much like to accommodate my colleague from Mississippi. We have worked together on other matters. If an offset could be found, I would be happy to make this accommodation.

I was in the chair, Madam President, when the chairman of the Armed Services Committee, the distinguished Senator from Georgia, reported yesterday that the authorization is larger than the 602(b) allocation. So unless an offset can be found, when the issue comes to appropriations, there will be a real problem in terms of two competing programs.

REQUIREMENT FOR SEALIFT SHIPS

The requirement for the roll-on/roll-off ships is well documented. The Nation's deployment to Operation Desert Shield/Storm highlighted a significant shortfall in strategic sealift assets. Hence, Congress mandated the Pentagon to conduct a mobility requirements study to determine the Nation's strategic airlift and sealift requirements.

The study, concluded and approved by the Joint Chiefs of Staff in January 1992, states that the Nation should have the ability to deploy 2 million square feet of Army prepositioned afloat equipment sets available for combat operations within 15 days of the beginning of a conflict, and the ability to surge two Army heavy division ready for combat operations within 30 days of the beginning of a conflict.

These roll on/roll off ships, with a capacity of nearly 400,000 square feet per ship, have the ability to meet the requirements in the mobility requirements study.

IMPACT OF NOT FUNDING SEALIFT

Let me quote from a Defense Department point paper on the effects of not funding the National Defense Sealift Fund at the requested amount:

Result: Increased risk of early casualties and loss of key facilities. Loss of deterrence value obtained through perception that United States will respond rapidly and with overwhelming capability if challenged.

The DOD point paper goes on to spell out the real risks to our fighting forces and the major threats to U.S. national security if these sealift ships are not funded in fiscal year 1995. As it states, any delay to sealift funding is detrimental to our military strategy--even a 1 year delay.

I ask unanimous consent that the DOD point paper also be printed in the Record at the conclusion of my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered

(See exhibit 3.)

SHIPYARD CONTRACTS

Mrs. FEINSTEIN. Let me now just briefly touch on what the actual impact to the shipyards and the new construction contracts will be if funding for the National Defense Sealift Fund is not restored and the contract options for the second and third ships are delayed.

The two shipyards that won the competitive bidding process to construct the sealift ships are the National Steal and Shipbuilding Company [NASSCO] in San

Diego, and Avondale in New Orleans. So, this issue is particularly important to California and Louisiana, as well as many other states with various suppliers and subcontractors.

If the National Defense Sealift Fund is not fully funded in fiscal year 1995 and the contract options are not exercised by the expiration date of December 1994, the following would happen:

Most importantly, the high priority sealift program will be unacceptably delayed up to 14 months, which puts U.S. national security and our war fighting strategy at risk;

Any disruption in the program with the current contract options would result in increase program costs due to the loss of learning from ship to ship, higher overhead costs, layoff/rehire costs and other factors;

Contracts will have to be renegotiated, and then questions arise about increased cost, as well as contract disputes and protests; and

The 12 to 14 month gap between construction of ships 1 and 2 would disrupt the series construction of up to 5 additional ships and cause the shipyards to lay off and then rehire over 1,000 workers--something that would be devastating to the San Diego area and the entire State of California which has been hit hard by defense downsizing and military base closures.

The sealift contracts were justly competed and fairly won. Funds are needed in fiscal year 1995 to exercise the two planned options for additional RO/RO ships.

LHD-7 AMPHIBIOUS ASSAULT SHIP

While I do not necessarily oppose the LHD-7 amphibious assault ship, I do oppose the way its authorization is being proposed.

I strongly oppose funding the LHD-7 by shifting funds out of a higher priority military program--the National Defense Sealift Fund.

Additionally, the Pentagon does not plan to request funding for the LHD-7 until the year 2000. Yes, amphibious assault ships are important and they have a place in the U.S. military. But, priorities need to be determined and decisions need to be made.

The Secretary of Defense and the Joint Chiefs of Staff determined that sealift ships are a higher priority, and the President's fiscal year 1995 budget requests reflects this priority--it requested funds for sealift, and did request funds for the LHD-7.

The LHD-7 would be also incrementally funded at only 40 percent of its actual costs of $1.4 billion. Therefore, in addition to authorizing $600 million in fiscal year 1995, we will have to come up with the additional $800 million next year, plus find the $600 million in funding for this year's requested sealift ships.

As a result, funding the LHD-7 from the National Defense Sealift Fund becomes a $1.4 billion problem for the Department of Defense and Congress next year--funds that were not anticipated nor programmed. With a defense budget as tight as it is, I cannot justify placing a financial burden on tomorrow's defense budget simply to fund another, lower priority program, today.

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CONCLUSION

The sealift program is extremely important to U.S. national security, as documented by the Defense Department's Mobility Requirement's Study. The sum of $600.8 million for the National Defense Sealift Fund was requested by the President in fiscal year 1995, is supported by our military leaders, and--if not for incorrect information being provided to the Armed Services Committee--would not have been shifted to fund the LHD-7 amphibious assault ship, which was not requested by the President nor supported by the Pentagon.

This amendment would simply restore the President's budget request by returning the $600.8 million from the LHD-7 to the National Defense Sealift Fund, thus protecting the sealift program and U.S. national security.

I strongly urge my colleagues to support the amendment.

Exhibit 1


DEPARTMENT OF THE NAVY,

Office of Legislative Affairs,
Washington, DC, June 13, 1994.
Memorandum for Mr. Steve Saulnier and Mr. Creighton Greene.
Subject: Sealift New Construction Contract Options.

1. The attached Memorandum describes the sequence of events which resulted in your staff being provided incorrect information regarding the option expiration date for new construction ships 2 and 3 awarded to NASSCO. Contrary to the initial information provided to OLA by NAVSEA on 9 June, the option expires on 31 December 1994 vice 31 December 1995. The correct option expiration date (31 Dec 94) was provided to my office on 10 June and passed immediately to you on that same date.
R.J. Natter.

--

--

June 10, 1994.
Memorandum for the Chief of Legislative Affairs.
Subject: Sealift New Construction Funding.

1. Prior to the mark on 09 June, Mr. Steve Saulnier, PSM, SASC, requested the funding profile for the National Defense Sealift Fund and the sequence of contract option awards. The NAVCOMP SCN/NDSF analyst provided the attached table of NDSF obligations. Prior to providing the table, I contacted the Strategic Sealift Program Office and was referred to Mr. Jack Cameron, Director of New Construction (NASSCO). My specific question at this time was, `When does USN intend to award the options for the FY94 and FY95 new construction sealift ships?' I received the response that the first option for each yard was for two new construction ships, with the first award planned for August 94 (Avondale) and the second award planned for Feb 95 (NASSCO). My notes from this conversation were written on the bottom of the attached NDSF funding table. This table was provided to the SASC.

2. On 09 June (approx 1100), Mr. Saulnier asked the question, `For the option planned for award in Feb 95, when does that option expire, 30 Sep 95 or 31 Dec 95?' I again contacted Mr. Cameron for the answer. His response was the option expired on 31 Dec 95. I passed this information to Mr. Saulnier.

3. On 09 June at approximately 1630, Mr. Creighton Greene, PSM, SASC, called to confirm the information concerning the contract options. I called NAVCOMP NDSF/SCN analyst and her recollection was the options were calendar year options, but she requested I contact the program office to confirm. I again called Mr. Cameron and asked him the impact if the Sealift Procurement funds were delayed until FY96. His reply was that this would result in a delay of the award from Feb 95 to Dec 95, would cause a 10 month delay in the five NASSCO new construction ships, and would result in a cost escalation. I asked Mr. Cameron to provide an estimate of the cost impact, but he indicated the budget analysis would take time. He again confirmed the date of 31 Dec 95 for the NASSCO options. I informed Mr. Greene the program office confirmed the dates and the deletion of the FY95 funds would delay the five NASSCO new construction ships approximately one year and cause a cost escalation.

4. On 10 June at approximately 0900, Mr. Cameron called me to state he had erred in his information concerning the contract option expiration dates and provided the attached memo.
M.E. Ferguson, CDR USN.

--

--

Memorandum


June 10, 1994.
From: John Cameron (PMS3851).
To: Cdr. Mark Ferguson (OLA).
Subject: Strategic Sealift Option Exercise Dates.
Ref: (a) Phonecon Mr. Cameron/Cdr Ferguson of 9 Jun 94.

1. This memo provides clarification of the existing Contractual option exercise dates for the first two follow on ships for both new construction contracts awarded to Avondale and NASSCO. The option exercise dates for ships 2 & 3 for each contract is `not later than 31 December 1994'. The current plan is to exercise the Avondale options with available funding provided through FY94 in the Aug/Sep 94 time frame and the NASSCO options with FY95 funds prior to 31 Dec 94. The FY95 HASC report, which deleted the FY95 funds but in turn would make available the same amount of the FY94 $1.2B of the carrier funds, thus would not impact the exercise of the two ship NASSCO option. Any adjudication of the stop work order resulting from the protest is not expected to shift the `exercise option date' to the right more than four and a half months. Therefore, FY95 funds are still required to exercise the NASSCO two ship option.

2. Any information that was passed to you during reference (a) that differs from this information was incorrect.
JOHN C. CAMERON,

Director,
NASSCO New Construction.

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Questions Concerning Sealift Awards

Q1. What do the Avondale and NASSCO contracts specify as the expiration dates for options on ships 2 through 5?

A1. The contract option dates for AII and NASSCO ships are the same, and are as follows:

Ship Numbers:

2 and 3*

12/31/94

4

12/31/95

5

12/31/96

6

12/31/97

*Contract requires exercising 2 ships and has no provision to exercise only one.

Q2. What is the impact of the contract protest resolution on the option expiration dates?

A2. The Navy is negotiating an extension to the option exercise dates for NASSCO option to reflect the 4 1/2 months stop work order which was imposed as a result of the award protest to GAO. This adjustment is in process and exact extension and cost is to be determined.

Q3. What is the amount needed to exercise LHD-7 option prior to expiration?

A3. $1.4 billion is required to exercise the current option to produce LHD-7. (incomplete answer)

Q4. What is the cost associated with extending the option dates for the two NASSCO ships until FY96? Of extending one option each for Avondale and NASSCO until FY96? What are the contractual implications of extending the options?

A4. The costs for extending the first option for two ships for NASSCO and of extending one ship for each contractor of the first option for two ships would have to be investigated further. The contracts were not structured with those provisions.

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--
NDSF FUNDING REQUIREMENTS
-----------------------------------------------------------------------------------------
                   FY 1993 and prior Fiscal year--                                       
                                              1994    1995    1996     1997    1998 1999 
-----------------------------------------------------------------------------------------
NDSF funding                 2,463.5       1,540.8   608.6   622.2  1,169.1   618.6  2.2 
Conversions                 5/1359.1                                                     
New construction             2/757.2       2/581.6 2/600.8 2/603.1 4/1167.0 2/616.4      
R&D efforts                                    2.0    19.2    19.1      2.1     2.2  2.2 
RRF procurements                                      43.0                               
Loan guarantees                               50.0                                       
Transfer to CVN-76                         1,200.0                                       
End cost balance              *347.2         *54.4                                       

[Footnote] *Balances from prior year appropriations are used to offset fiscal year 1994/1995 funding requirements. Obligated to date is approximately $1819.1 million. Options for 2 ships will be awarded in both fiscal year 1994 and fiscal year 1995.
[Footnote] Note: First option pickup is for 2 ships to 1 yard. Fiscal year 1994--August 1994; fiscal year 1995--February 1995.
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Exhibit 2


CHAIRMAN OF THE

Joint Chiefs of Staff,
Washington, DC, June 22, 1994.

Hon. Sam Nunn,
Chairman, Committee on Armed Services, U.S. Senate, Washington, DC.

[Page: S7505]

Dear Mr. Chairman, I am writing to express my concern about the current version of S. 2182 that would significantly damage our long-standing, integrated lift requirements as expressed in the 1992 Mobility Requirements Study (MRS) and supported in our budget request.

My primary concern is that the proposed legislation diverts all FY 1995 funding from construction of two Large Medium Speed RO/RO ships (LMSR) to an initial down payment for another multi-purpose amphibious assault ship (LHD) and also funds two Maritime Pre-positioning Ships (MPS) that the Department of Defense did not request. I understand this committee revision was based upon erroneous information, later corrected, which was provided to you by the department. However, this diversion would place at risk the centerpiece program of MRS despite the critical shortfall cited by many CINCs in congressional testimony. Further, it changes the priorities of an essential program developed with the Joint Chiefs of Staff and approved by the Secretary of Defense.

Another concern I have is that the bill diverts $43 million in funding from the purchase of Ready Reserve Force (RRF) RO/RO ships which are key to the surge of early arriving forces. The SASC instead funds a subsidy program to incorporate defense features on future US-built commercial ships. This would sacrifice near-term readiness that supports early combat force deliveries in favor of an unproven concept designed to deliver follow-on material. At a minimum, I request the Senate provide the Department the legislative authority to acquire these ships.

If enacted, these measures will unravel our carefully constructed sealift acquisition program. This measured and studied program has enjoyed wide support among military professionals, defense executives and the Congress as both absolutely essential and fiscally responsible. The MRS, a rigorous study which included over 90 warfighting analysis cases, also received the endorsement of each member of the JCS.

Please reverse these actions to support our sealift requirements--the military strategy critically requires it. I strongly support the execution of the MRS program.

Sincerely,

John M. Shalikashvili,
Chairman of the Joint Chiefs of Staff.

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U.S. DEPARTMENT OF TRANSPORTATION, MARITIME ADMINISTRATION,
Washington, DC, June 16, 1994.

Hon. Sam Nunn,
U.S. Senate,
Washington, DC.

Dear Senator Nunn: I am writing to express concern about the recent House Armed Services Committee reallocation of $43 million in the National Defense Sealift Fund (NDSF) for a National Defense Features (NDF) Program, in place of the acquisition of Roll-on/Roll-off (RO/RO) vessels for the Ready Reserve Force (RRF) in Fiscal Year 1995. This redirection of RRF acquisition funds would have a serious negative effect upon the implementation of the Department of Defense (DOD) integrated mobility plan proposed at the completion of the Mobility Requirements Study (MRS) and the Bottom-Up Review.

The MRS determined that 36 RRF RO/RO vessels, able for loading within 4 days, are required for strategic sealift. Although 12 RO/RO's were purchased for the RRF in FY 1993, seven ships are still needed to reach this fleet's RO/RO capacity. The Administration's program to add sealift capacity includes new construction, conversion of existing ships, and procuring ships available on the market today. The purchase of used ships is vital because it allows for the near term acquisition of commercial ships that are still in good condition and are useful for military operations.

This $43 million request for FY 1995 is necessary to continue these RRF acquisitions. Any reduction in funding for the RRF would seriously delay necessary enhancements to strategic sealift. At a time when sealift mobility is an increasingly important element of U.S. strategy, it is important that we proceed with a balanced program to acquire the most cost-effective mix of sealift vessels.

For these reasons, I strongly urge you to support the use of $43 million in the NDSF for the purchase of existing RO/RO's for the RRF in support of the DOD integrated mobility plan.

Sincerely,

A.J. Herberger,
Maritime Administrator.

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U.S. Transportation Command,
Scott Air Force Base, IL, June 21, 1994.

Hon. Sam Nunn,
U.S. Senate,
Washington, DC.

Dear Senator Nunn: The Commander-in-Chief of the United States Transportation Command is responsible for the readiness of America's Defense Transportation System--an integrated and balanced system of air, land, and sea assets. Responsibilities for readiness include both today's assets and the programs to ensure continued capability in the future. It is the latter that is of immediate and considerable concern.

The President's budget request provides for the necessary enhancements and modernization required to maintain a viable Defense Transportation System. However, if the current language contained in the Senate Armed Services Committee markup of the FY95 Defense Authorization Bill is not amended, it will seriously damage our sealift modernization program and threaten the viability of the entire Defense Transportation System.

Specifically, there are two issues of concern:

--the diversion of all FY95 funding from the construction of Large, Medium Speed Roll-on, Roll-off ships (LMSRs) to a down payment on an amphibious assault ship and two Maritime Prepositioned Ships (MPSs). This would seriously disrupt a key modernization program recommended in the Mobility Requirements Study and unanimously endorsed by the Secretary of Defense, the Chairman and the Joint Chiefs.

--the diversion of $43 million in funding from the purchase of Ready Reserve Force (RRF) RO/ROs to provide a subsidy program for defense features on future US built commercial ships. This would sacrifice near term readiness and early surge capability for an unproven concept designed to deliver follow-on forces.

All regional CINCs cite sealift as one of their critical shortfalls. The President's budget request will provide a significant near-term improvement in our sealift capability. However, the changes contained in the Senate Bill will eliminate these improvements and seriously threaten USTRANSCOM's capability to support the transportation requirements of America's war fighting CINCs. Request your support of the President's budget request on sealift enhancement.

Sincerely
RONALD R. FOGLEMAN,

General, USAF,
Commander in Chief.

Exhibit 3

Information Paper--June 21, 1994

Subject: Impact of the Senate's Mark of the FY 95 Defense Authorization Bill on the Recommendation of the Congressionally-mandated Mobility Requirements Study (MRS).

1. Purpose. To provide information regarding the Senate Mark and the MRS.

2. Background. Our Nation's deployment to OPERATION DESERT SHIELD highlighted a significant shortfall in strategic mobility assets. Congress mandated the Mobility Requirements Study to determine the Nation's strategic airlift and sealift requirements. The Mobility Requirements Study used approved scenarios which described a future where strategic mobility was the linchpin for successful power projection operations. The deploying US forces were joint and complementary, and employed decisive force to reduce the risk of high casualties. The MRS recommendations support Joint Doctrine where force projection is critical to achieving military objectives. The Senate Mark challenges this integrated strategic mobility plan and places at risk the MRS recommendations which allow for the timely deployment of decisive force and low casualties.

3. At Risk MRS Recommendations.

a. The MRS recommended the acquisition of up to 20 Large Medium Speed RO/ROs (LMSRs). When the actual ship design was finalized the number of LMSRs was fixed at 19. Eight of these ships represent the MRS recommended capability to place 2 million square feet of Army unit sets of equipment afloat. the remaining eleven LMSRs represented the MRS recommended capacity to surge three million square feet of units equipment sets from the US. The eleven surge LMSRs, when combined with the currently available (on-hand since the 1980s) eight Fast Sealift Ships (FSS) will be adequate to strategically lift the MRS recommended two Army heavy divisions from the US in thirty days.

b. The MRS recommended the acquisition through purchase off of the open market of 19 Ready Reserve Force (RRF) RO/ROs to bring the RRF RO/RO total to 36 ships. The MRS further recommended that all thirty-six ships be maintained in Reduced Operating Status--4 days (ROS-4) to meet surge sealift requirements, When combined with the eleven surge LMSRs and the eight FSSs the surge requirements--deployment of heavy forces rapidly--determined by the MRS are met. While acquisition of the additional RRF RO/ROs are necessary for surge sealift requirements, the MRS further recommended the modernization of the aging Breakbulk ships that contribute later in a deployment. Additionally, the MRS noted that alternative ship concepts such as Build and Charter, charter, and National Defense Features were possible alternatives for modernizing this slow shipping which follows surge.

c. The effect of the MRS recommendations provides the Nation with the ability to deploy two million square feet of Army Prepositioned Afloat equipment sets available for combat operations within fifteen days and the ability to surge two Army heavy divisions ready for combat operations within thirty days. The Senate Mark potentially places this surge capability at risk.

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[Page: S7506]

Information Paper--June 21, 1994

Subject: Senate Mark of the FY 95 Defense Authorization Bill

1. Purpose. To provide information regarding the Sealift issues concerning the Senate Mark.

2. Background. The Senate Mark of the FY 95 Defense Authorization Bill in essence eviscerates the strategic mobility sealift recommendations of the Congressionally-mandated Mobility Requirements Study (MRS). Volume I of this study, begun during the Nation's deployment to OPERATION DESERT SHIELD and completed in January 1992, identified our Nation's glaring strategic mobility shortfails. The MRS recommended acquisition of up to 20 Large Medium Speed Roll-On/Roll-Off ships (LMSRs) through conversion or construction in US shipyards and 19 additional Ready Reserve Force (RRF) used RO/ROs purchased off the open market (for a total of 36 RRF RO/ROs). The LMSRs and RRF RO/ROs together meet the requirement to deploy heavy forces rapidly (surge sealift). The Senate Mark eliminates the planned exercise of contract options to initiate construction of two LMSRs scheduled for FY 95 and places the options for eight more at risk. While this superficially appears to simply delay the LMSR program, the impact of the mark may force the renegotiation of the LMSR contracts and destroys confidence that funding is assured. This sets a precedent for using critical sealift funds as a bill payer for other, not requested projects.

The Senate Mark also diverts funding for two RRF RO/ROs to subsidize an unproven program that, at best, several years in the future may provide some capability to deliver late arriving materiel. In conjunction with action by the House Merchant Marine and Fisheries Committee which similarly diverts funding from previously authorized and appropriated acquisition of five RRF RO/ROs, the Senate Mark is a major blow to near-term improvement in surge sealift capability. In short, the Senate Mark puts at risk the Nation's capability to meet the timelines to successfully fight one, much less two major regional conflicts.

3. Primary Impacts.

a. The mark reduces the number of LMSRs and RRF RO/ROs validated by the Congressionally-mandated MRS. These assets are a critical element of our Nation's power projection strategy. Result: Increased risk of early casualties and loss of key facilities. Loss of deterrence value obtained through perception that US will respond rapidly and with overwhelming capability if challenged.

b. The MRS recommended eleven LMSRs be added to Military Sealift Command's eight Fast Sealift Ships for surge sealift (the remaining 9 of the 20 being recommended for afloat prepositioning). The recommendation provided this surge sealift to move two heavy Army divisions anywhere within 15 sailing days. Because of this mark and its potential risk to the eight follow-on LMSR options (3 or 5 Avondale options and 3 or 5 NASSCO options), the Army would not be able to deploy two heavy divisions in the required time. Result: Increased risk of loss of early land dominance.

c. The MRS also recommended acquisition of 19 RRF RO/ROs. This number will bring the RRF RO/RO fleet total to 36 RRF RO/ROs with all ships in Reduced Operating Status--4 days (ROS-4). These ships surge additional Army equipment to support the first two Army heavy divisions. The USMC is allocated nine of the thirty-six ships for its surge requirements. Not purchasing the remaining seven ships directly impacts both the Army's and the USMC's capacity to reinforce and sustain our deploying forces. Result: Increased risk that forces will not receive necessary support.

d. The Senate Mark redirected the funds for the purchase of the two FY95 RRF RO/ROs to buy instead a concept known as National Defense Features or NDF. This concept is based on the government paying shipyards to install NDF (e.g. special heavy duty ramps and decks, communications installation kits, etc) on ships they may build in the future for the commercial market. This means that we are not buying RRF RO/RO shipping available today and instead are allocating funds for unbuilt ships for which there is neither a valid requirement or a certified market survey. Additionally, the MRS specifically noted that the alternative concept ships such as NDF were not a replacement for surge shipping but could be capable of replacing RRF shipping required for the middle to late delivery periods. In other words, the Senate Mark diverts funding from today's valid requirement for surge RRF RO/ROs to encouraging ship builders to build ships for which no valid requirement exists today, no commercial market survey supports, and, if built, will not meet the surge RO/RO requirement to deploy Army combat equipment rapidly to the conflict. Result: Increased Risk.

e. The Increased Risk noted after each paragraph can be directly correlated to increased American casualties. The Mobility Requirements Study's warfighting analysis demonstrated that the quicker US forces arrived in a theater the more successful they were regarding mission accomplishment and lower casualties. This mark guts DoD's ability to respond to threats to our Nation's vital interests in a timely fashion. A decreased ability to project forces results in an invitation to test our Nation's capabilities and resolve. Our ability to successfully deter threats diminishes as well.

Mr. LOTT. Mr. President, I think it is very important I be heard on this amendment. I appreciate the cooperation and the understanding of the Senator from California and the Senator from Louisiana of what I have been attempting to do here. I do think I need to further clarify the record of how we came to this point and the justification for this amendment being offered.

First, I want to talk a little bit about the DOD, Department of Defense, authorization bill as a whole. This amendment is a classic example of what we are getting into with the defense authorization and the defense funding for our country. We find ourselves more and more facing very difficult decisions, choosing between one very good, justified and needed program or another; one ship or the other; one aircraft or another. One after the other, I fear, we are making the wrong decisions or we are giving up, in an effort to deal with budget restraints, things we need for the future.

So I think this year we have reached a critical point, where we are not adequately funding the defense of our country. It has been developing now for several years. I think over the last 5 years we have reduced defense funding by about 25 percent. And we have come to the point now where we have just squeezed and squeezed until now we are affecting personnel, morale, capability, readiness. So I hope my colleagues will take a serious look at this overall bill because I think we are getting in real serious trouble and it is not going to get better. Next year will be tougher, and the next year after that, if we continue in the direction we are headed.

It is tough on the authorization committee and it is very tough on the appropriators. That is one of the reasons I think we are going to have to look at incrementally funding some of these larger, very badly needed programs if we are going to have carriers or LHD's or some of the aircraft that we badly need. Trying to get the large amount of money that it takes for some of these badly needed ships or aircraft is difficult to do in 1 year.

This ship that everybody says they want at the Pentagon, and more important that they need, costs $1.3 billion. Trying to get that in 1 year is awfully tough. The Appropriations Committee in their wisdom, in my judgment, funded the previous LHD, LHD-6, incrementally, in two parts. But they got the job done and the ship is being built now. But in program after program we are now in very serious trouble.

I think numbers of troops have been reduced too much. We are making decisions with regard to the National Guard that is affecting their capability. As we become more and more dependent on the National Guard and Reserves, we are at the same time cutting them back.

On Memorial Day in Kosciusko, MS, I was speaking at one of the Memorial Day services. An officer in the National Guard artillery came up to me and said, `We have a problem now because our funds are being cut back. They are not cutting as much as they should, maybe, in the administration, but we do not have adequate rounds to practice with.' You do not get to be proficient in firing artillery, practicing with a tank, if you cannot have an adequate number of artillery rounds to fire. That is the point we are coming to.

In the case of aircraft--talk about sealift; yes, sealift is very important. So is airlift. The full Senate voted yesterday on C-17. I have mixed emotions about the decision. But what bothers me is will we make a decision? We have old aircraft, many of which have been grounded, that were worked to death, practically. The C-140's, during Desert Storm--they have had to have wing repairs, their engines have flamed out. Yet we are still depending on them, and Congress is still arguing over the C-17.

In instance after instance, the Armed Services Committee is wrestling with do we try to make the ones we have last a little longer? Do we go to some sort of a commercial reconfiguration, to use existing available commercial planes? Do we go on with this extremely expensive C-17, which has been nothing but a problem from day 1? It is a big, costly program and a lot of uncertainty about where we are headed.

Bombers. The Armed Services Committee, in the subcommittee I serve on, has spent a long time talking about bombers. What is going to be our capability for a long-range bomber? The administration requested, and I assume they are going to get, a significant reduction in B-52's. We are still using B-52's. We have the B-1B's that we never have quite decided what to do with or what we are going to be able to do in the future. We have not done the necessary modifications to really make use of them. And then we have the B-2, which we have agreed, I believe, to 20. But the debate later on this very day will be do we keep that program warm? Do we keep the capability to build more B-2's? Or do we just go ahead and kill that program?

The amendment that may be offered is we are going to take that money and move it over into the base closure area, of all ridiculous places to suggest putting it.

Again, the question is are we going to have to use the old B-52's? Are we really going to modify the B-1B's? Are we going to keep the B-2 option alive? We do not know, but we are putting good programs, people's jobs, and the future of this country and its defense at stake.

On ships, we have these great battles over do we need more Seawolfs? How many carrier groups do we need? How many carriers should we have? How many surface ships are we going to have? As a matter of fact, we now are down to producing about five or six surface ships for the Navy a year. At one point we were building for a 600-ship Navy.

Then we were told, `Well, 400.' Then somebody said, `I think the position now is 330, approximately.' The truth of the matter is, at the rate we are going, at the end of this decade, we will be lucky if we have 170 Navy ships. The lines are going right down.

That is one of the reasons why this ship is so important, the LHD-7. Are we going to have the ships to do the job? Check around the world now. I can show you a world map of where we have carriers or LHA's or LHD's sitting in critical places. We are going to reach the point very soon where the call will go out and the planes, the ships, the men and women will not be available, will not have the equipment they need, will not have the training they need.

That is where we are.

With base closure, I have a great deal of sympathy and concern for what has happened across this country on base closure in the first two rounds. California has been hit so hard. I sat next to the Senator from California during the last round. She had a list: `Oh, my goodness, if they do this, it is 5,000 jobs; if they do this, it is 2,000.' And it is just getting whacked away. It is not just California, it is a lot of other States.

[Page: S7507]

Mr. JOHNSTON. Will the Senator yield for a question?

Mr. LOTT. I will be glad to yield.

Mr. JOHNSTON. Will the Senator agree with me that the Exon-Grassley amendment, which I think takes something like a $500 million bite this year, but takes increasingly bigger bites out of the discretionary accounts--I think it is a total of around $30 billion over 5 years--is hurting defense, really hurting defense and agriculture probably more than any others, and that we really ought to take a look at that next year?

Mr. LOTT. As a matter of fact, I share the Senator's concern about that. The point was made repeatedly when that issue came up in the budget deliberations that it should not have been applicable to defense.

I offered an amendment on that, and the Senator from Virginia offered an amendment on that. There was real concern about the impact it would have on defense, and there is still great concern about that.

But at the same time, we have to find ways to deal with the overall budget issues. Yesterday, we passed the Treasury, Postal Service appropriations bill that was above last year's spending level. You would think maybe we could at least hold the spending at perhaps last year's level.

So you can debate what we do on the budget back and forth, but that is the problem here. The Senator is right.

We have been having to make the tough decisions. Discretionary spending is being squeezed down. The Appropriations Committee has done a great job with limited funds and with restrictions from the Budget Committee. I acknowledge that. We know the real driving force in the budget deficit is now being caused by entitlements, which the appropriators do not have direct control over.

But however we got there, we are being squeezed down in the defense spending for our country.

It is leading to these types of tough decisions. That is the only point I wanted to make. I am worried about that continued development because the world has not gone to utopia. Somebody had said on this floor last year, `Oh, have you missed it? The world has changed.' No, I did not miss it. The world is still very dangerous. We do not know what is going to be the situation in the future with Russia; we do not know what is going to be the situation in North Korea; we do not know what is going to happen in Bosnia and Herzegovina. The list is long. So we have a real need to have the people and the equipment available we should need in case of emergency. It is getting harder and harder to fund that.

That is how we came to the point where we are today.

There is no question that sealift is very important. We were strapped in Desert Storm to be able to get the roll-on/roll-off ships, to get the equipment over there. The Senator from Louisiana talked about that, and he is absolutely right. We had to rely on a lot of ingenuity by the Navy. We had to get into, I am sure, foreign flag ships. We had to call out some old mariners to come in and help us do the job. It was a scary situation. We do not have that sealift capability today

that we had then. We have lost it. It has gone down probably even more. So there is a real need for these sealift ships.

Mr. President, for the last 4 or 5 years, I have aggressively supported sealift, fast sealift. I do today. There is no question about that. I thought, though, we had an opportunity in the Armed Services Committee to get the fast sealift ships with only a short delay and a way to get the needed LHD-7. At the time, it looked like a magnificent solution to a problem that we all agreed we had --the Navy, the Marine Corps, the Joint Chiefs. Everybody would like to have the sealift ships and LHD-7, and I will talk more about that in a moment.

In fact, I think the record will show I was one of the most aggressive committee members on the Armed Services Committee in supporting sealift. I worked very closely on the subcommittee with Senator Kennedy. We continued to provide authorizations for sealift going back several years. The sealift account, in fact, was first created in the Armed Services Committee under Senator Kennedy's leadership as subcommittee chairman, but with a lot of support from all of us in the subcommittee and in the full committee.

Much of the testimony and history in the Armed Services Committee was established approving the importance of sealift, and a lot of the questions that built that history I had the opportunity to ask. For the first 2 or 3 years, I actually was sort of tagged with the moniker `Senator Sealift'--you keep talking about sealift--because I very aggressively supported it. I was an advocate of sealift before the Army became an advocate of it, before the mobility requirement study was even started and before we learned the lessons of the gulf war. So I want the record to be clear that I feel very strongly about sealift and supported putting funds in it when they were not being spent.

I remember spending a considerable amount of time with the Chairman of the Joint Chiefs, Colin Powell, urging that the Sealift Fund Program be moved forward, commitments be made. The Senators will remember it kind of languished there for about 2 years. They were not sure how to move it forward. I remember bending the ear of Secretary of Defense, Dick Cheney, saying, `Make a decision on this program, move it, award the contracts.'

Finally, it did get going, and I want it to keep going. In fact, I would like to quote from one of the reports from the Armed Services Committee in the fiscal year 1991 authorization bill. On page 18 of the report it said:

Current U.S. capabilities for intervention at a distance where there are few bases and limited infrastructure are not fully suited to U.S. needs. Today, the United States has the greatest force projection capability of any country in the world. However, in general, Army light forces are rapidly deployable but lack sufficient firepower, sustainability and ground mobility. Army heavy forces are too heavy and too slow to deploy and in recent years, Marine Corps forces have allowed their increase in equipment to outstrip their ability already available in the inadequate amphibious lift.

To meet potential force projection missions, the United States must restructure forces in accordance with the following priorities:

It must give priority to forces that are inherently mobile and rapidly deployable, maritime based expeditionary forces, long range and technical air forces and light combat forces that can be quickly transported using amphibious lift sealift and airlift assets.

The point I am trying to make is, as far back as 1991, the subcommittee, the full committee and the report emphasized the need for this sealift capability.

I do not want to undermine this part, but I had information from the Navy, which Senator Bennett Johnston has referred to, and others, that as a matter of fact, the contract option on the two ships for the next fiscal year does not expire until December of 1995. This is not information I fabricated or intentionally used to mislead the committee. This was assurance that I had gotten from the Navy as to when that contract option would expire.

So it looked to me like there was an opportunity to use that $600.8 million to begin the authorization to incrementally fund in two parts this LHD-7, because the LHD-7 contract expires in December 1994, this year.

Based on the information I was given about the sealift contracts, two more of the ships could be awarded in August of this year, to Avondale and two more would be available next year with a delay of only about 7 1/2 months and provide the next two. The funds would be there for that and we could use the $600.8 million this year for this contract. It seemed like a brilliant stroke, a way to accomplish everything that we wanted to accomplish.

With regard to the LHD-7--talking about priorities--I understand that the very top priority of the Navy is the carrier. But there is no question that the Pentagon, the Army, the Joint Chiefs feel very strongly about the sealift, but they also have testified up and down the line that we need LHD-7. Not that they want it, they need it.

If we are going to have the capabilities we are committed to in the Bottom-Up Review, we must have the seventh LHD.

Let me read you some of the quotes. These are what the leaders testified before the Armed Services Committee about LHD-7.

General Mundy, Commandant of the U.S. Marine Corps, on April 12, 1994, in testimony to the Senate Armed Services Committee Regional Defense Subcommittee: `12 ARG's are the minimum required.' In order to have these 12 ARG's--Navy terminology, Marine terminology--you must have seven LHD's.

General Hoar, in testimony before the committee, March 3 of this year: We need LHD-7 and 12 of the amphibious-ready groups to make sure that `we maintain the naval posture that is the backbone of our forward presence.'

Admiral Owens, Chairman, JROC, testified that 12 of these amphibious-ready groups `is the number we should continue to use as our goal.'

Admiral Kelso, March 1993: `An additional LHD, the seventh, would be required to fully support the 12 ARG goal.'

And the list goes on with similar quotes from Admiral Arthur, Admiral Jeremiah. Everybody agrees that this is something we need in order to do the job we are committed to do.

So that is why I am so committed to the LHD, because we have a time problem. December of 1994 the contract option expires. If we let this contract option expire and wait until the year 2000 to get this seventh LHD that everybody says we need now, it will cost $800 million more. That is what is at stake here--$800 million more to get a ship that we have the capability to get now and that we need now. We could build two other very vitally needed navy ships for what it is going to cost us if we wait until the year 2000.

Now, let me show my colleagues what we are talking about.

This LHD is an incredible vessel. It can do a lot of what it would take a combination of other ships to do. It can do a lot of what a carrier will do. When you move an LHD into position off the coast of some strife-torn country where we have a national security interest, it has an impact. You are talking about 2,000 marines on this vessel--2,000 marines--with helicopters, 46 large helicopters, I believe is the number, and Harrier jump jets. Aircraft can take off of this deck simultaneously. You can have aircraft taking off, helicopters taking off. It has the air cushion vessel that comes out of the end. You have landing craft.

You can do almost everything with one of these ships. It has a fully equipped hospital right at this level. So we are talking about an incredible, multipurpose, amphibious warship to take Marines wherever the need exists.

That is what we say we want. That is what everybody says they need. I have discussed this particular ship with the Chairman of the Joint Chiefs, with the Vice Chairman, Chief of the Navy, Commandant, Secretary of the Navy, right down the line. They all say, yes; it is just a question of where do we get the funds. That is what I have been working on. I worked on it at the subcommittee level and at the full committee level. I came up with an idea based on information I was given by the Navy, and I realize that has presented problems. But I will continue at this very moment to work with any and all Members of the Senate and the Pentagon to try to find a way to fund this ship because we do need it; it is an incredible ship.

Now, what is the alternative?

We need the fast sealift ships, and this is just a conceptual version of the ship because we do not have it yet. It is under contract, and it is moving forward. But you are talking about basically a cargo carrier. We need them; I do not deny that. But by delaying two of these, which are not going to fire a shot, you get one of these, a very incredible marine vessel--a pretty good tradeoff. Now, if you do not have this vessel show up at the critical time, you are never going to have a need for this one.

[Page: S7508]

Mr. JOHNSTON. Will the Senator yield at that point?

Mr. LOTT. I will be glad to yield.

Mr. JOHNSTON. The Senator said by delaying the two--he calls them cargo ships--fast sealift ships, you are getting one of the big ones. Actually, you get about 40 percent of the big one and you still owe about 60 percent or another $800 million after you spend this $600 million; is that not correct?

Mr. LOTT. That is correct. Incrementally funded, $600 million this year and then about $700 million in the second year. But the other side of it is, if we do not get this vessel now, we may never get it. That is a very important point that I think we have to think about and worry about. It is like an aircraft; the same is true with ships. You lose the capability, you may have lost it. It takes time certainly to get it back in place.

I wish to emphasize again the last one of these that was funded, it was incrementally funded, in the wisdom of the Appropriations Committee, in two pieces. That is all we are trying to do here, do it in two pieces. But the fact remains that for the price of those two fast sealift ships, you do get 40 percent of one of these.

Again, I emphasize, I acknowledge that the problem is, with this budget restraint we have, the cost of a large vessel like this. It is tough to do. But I just wanted to show you what was involved here, the ships we are talking about, and give you some concept of what we are talking about. I emphasize again that I support sealift. I want those ships built. I think we are going to need them. I think they are an important part of our military capability in the future. But I also know we need LHD-7 now, and the time is running out. The time is very short.

So I have worked diligently with every member of the committee and many Members of the Senate who have spoken today or will speak to try to find some other way to do it, and I am here today looking for another option, another source of funds, some way to accomplish this.

I have talked to the chairman of the Armed Services Committee repeatedly. He is familiar with the problem. He is sympathetic to the problem. But he says, as has always been the case, he is opposed to incremental funding. It is not this one. He has been consistently over the years. I acknowledge that. But I am here now acknowledging that we were given incorrect information by the Navy as to when the contract option on the sealift expired.

I state emphatically that I want sealift ships to move forward but urge my colleagues to think about the needs that we are giving up and urge that consideration and assistance be given to me and to us for the country's sake to find a way, some way, to keep the LHD program alive, some way to authorize it so that the appropriators will have the opportunity to look for a way to fund this program. They have proven in the past that they are ingenious in dealing with it. We do not know what the funding level is going to be for planes and ships and tanks and everything else. The appropriators may have a completely different mix by the time they get to their final choice. So I am trying to find a way to do here in the full Senate as I did in the Armed Services Committee, to keep that option available.

So I will yield at this point, but I do want to continue to work with my colleagues on the committees that are involved--and my colleague from Mississippi is very much involved--in trying to find a solution here, and we will be looking for that as the day goes forward.

I yield the floor at this point, Mr. President.

[Page: S7509]

Mr. NUNN. Mr. President, I do not want to hold out false hope here about this ship this year, but I also want to add just the realistic picture of where we are now on this ship. That is that the House Armed Services Committee has some money in their bill for this ship. I believe it is $50 million.

I believe it is $50 million. I am not sure whether it is $50 or $100 million. It is probably in the nature of long-lead item. They are incrementally I suppose funding this ship.

We normally have opposed that in conference. But it is a live issue in conference. At least by the time we get through conference, the appropriators, if they are going to find this kind of money--and I am sure the other Senator from Mississippi will be there diligently searching, and we would certainly be notified of that. But on this issue, if you were to move to this vote today, if this money were taken out today, it would be like a lot of other things in Washington. It would not be a concluded issue.

I will not make any pledges about where I would be on it. But I would certainly say it would be a live issue, and that we would certainly not--and we never have had--have a closed mind in conference when we go to conference, or we could not complete a bill.

We certainly always listen to our appropriators, particularly if they can come up with a bag of money. Sometimes the appropriators are good at doing that. We always have to look at where that bag of money comes from. There are two questions when you are dealing with these matters, whether it is our committee or the Appropriations Committee; that is, where is the bag of money they come up with going? And the other is where does it come from?

I think Senators find very quickly if the bag of money comes from a matter that is of concern to the Senator from California or the Senator from Louisiana, then we hear from them. If it is a bag of money which comes from someone else, there may be a more delayed reaction time than the alert colleagues from California and Louisiana. Nevertheless, at some point we hear from them. And the truth of it is that this defense bill and this budget has gotten not only tight, but it is underfunded in both the President's budget, and increasingly the Congress is cutting below the President's budget.

I would like just to make a few comments and particularly describe where the committee is on this now.

Mr. LOTT. Mr. President, will the distinguished chairman yield?

Mr. NUNN. Yes. I am happy to yield.

Mr. LOTT. I appreciate the chairman's comments, and I want to say here on the floor that I appreciate his consideration and his cooperation in the full committee.

The vote of 14 to 6 would never have occurred if the chairman had really put his foot down. He made it very clear that he is opposed to incremental funding. But he also, at the time, indicated that he thought that this was a way at least to keep it alive and consider it.

While always making very clear his reservations, the fact is that this was not in the President's budget request, and finding a way to fund it was very difficult. But he, as the chairman, certainly made it clear that he has a high regard for this vessel, recognized its need, but just cannot see how we can find the authorization funds at that point, as he said.

I appreciate his consideration.

Mr. NUNN. The Senator described my position very accurately. I appreciate that. I will have more to say about the ship itself in remarks that will be made.

I will say to my friends from Mississippi, while they are both on the floor, that there is probably not a single member of our committee that at one time or another has not used the argument--I do not remember the last time I used it. I certainly do not want to pretend I have not because I probably have. There are certain options going to expire, and if we do not do something quickly about that option the U.S. Government will forever lose that possibility. Usually the people who are pushing that behind the scenes are the people who have granted the option; that is, the contractors. The Government itself is perfectly willing to extend the option if the contractor is. So, really, all the contractor has to do is to extend an option.

Frankly, that applies to either side of this argument. Simply say to the Government that they will extend the option for another 6 months, and then you have that right to buy that ship.

Now, I understand the contractor's point of view. They have to get certain subcontracts lined up. They have certain costs that are involved. There is some inflation. There are those kind of considerations. But it is really not like you are forfeiting forever the opportunity to buy a vessel when an option comes close to expiring, because the contractor is the one who can extend that option if they choose to.

So I say that is another possibility.

Mr. President, let me just comment on a little background here because we have seen certain letters from the chairman of the Joint Chiefs and others justifiably from their perspective and being alarmed about the committee's action. I did not vote with the majority of the committee. But I do think that the majority of the committee proceeded in good faith. And I think

they need a little defense against some of the charges and criticism that have been leveled.

I do not think anyone should be under the impression that the committee's action, the majority of the committee action, represents a position against sealift capability. The committee has approved over $2.8 billion in funding in the past several years. It was our committee, as well as the House side, that basically helped lead the way in sealift.

The appropriators in our committee, and basically Congress, led the way here. It was not the Department of Defense that led the way in the sealift. It was the Congress of the United States. So the committee has clearly seen and supports the need for sealift.

I want to emphasize that our committee, as well as the appropriations committee, got out in front of this issue several years before the Department of Defense or the Joint Chiefs or the Navy or the Army saw the need. We basically had provided for strategic sealift for 3 fiscal years before the Department of Defense was willing to recognize that it was a shortfall and include it in their own budget. Senator Kennedy, chairman of the subcommittee, and Senator Lott as the ranking member, have been real leaders in the overall push for sealift.

So sometimes it might be good if someone over in the Department of Defense writing those letters and submitting them might relate a little of history before they go wandering off to sort of consider them in statements that at least are not very informative about how these programs got started.

I believe the committee's action to provide two additional ships is enhancement to the Marine Corps maritime prepositioning of ship force--so-called MPS enhancement--is another case where the Congress will be ahead. I believe in General Shalikashvili's letter he emphasizes that we shift funds out of strategic sealift for both the vessel that the Senator from Mississippi is pushing, amphibious, and also MPS, and that simply is not true. That money for the MPS we found in other places: $200 million. It was strictly a shift of $600 million here between these two vessels.

So I find myself, Mr. President, in a position I am not in very much; that is, I am not in the position very often of disagreeing with the committee position. But in this case, I am not speaking for the majority of the committee, I am speaking only individually. I find that the amendment of the Senator from Louisiana and the Senator from California really has merit, and should be passed. I am aware about the misunderstanding the committee had in providing funds. I think that misunderstanding was regrettable. I do not think it was intentional on the part of anyone. The Navy simply gave wrong information, and erroneous information about when those options expire on the vessels that were taken out of the two sealift vessels, that were taken out in order to pay for this amphibious LHD-7.

I believe it was an honest mistake. But I do believe that there is an issue here that the Senator from Mississippi has already alluded to, that the Senate itself needs to focus on as they struggle with this issue. I hope we will all understand that, and that is the incremental funding issue.

I want to clearly indicate that I favor going forward with this ship. I hope we can find a way to do it. I hope we can find a way to do it responsibly. This class of amphibious ship carries helicopters, a large hospital, landing craft, and other items critical to supporting the Marine Corps in combat or in peacekeeping operations. It can operate independently of carrier battle groups. It can almost be an autonomous type of capability in certain parts of the world depending on the threat. So we need this LHD-7 to provide the needed 12 amphibious ready groups.

The committee has been concerned about amphibious for a period of time. We are working with the Navy to ensure that this program retains the required 2.5 marine expedition brigade lift capability. We are doing that to the extent that we have actually blocked the transfer of certain older amphibious vessels--at least temporarily that were going to go to other countries and were being declared surplus--until we can determine how the Navy is going to compensate for that lack of capability even though they are older vessels. So we have been very concerned about that.

I want to say in closing my remarks why I am opposed to incremental funding.

Incremental funding is basically getting started on a ship when you do not have the money to pay for it in that particular year. The reason that is so dangerous in the case of naval vessels is because you can take $50 million or $100 million and start the vessel, and in the next year, and the year after, and the year after, you have to pay for it. We can conceivably start probably 20 or 30 new Navy ships, and there would be supporters right here for doing that. We could take several hundred million dollars and get started on enough ships so that, basically, we would eat up the whole Navy budget within 2 or 3 years. Then somebody would say: What in the world were you doing back there? Why did you do this?

Everybody views their ship as unique, and the one they are interested in as unique. The military services do, also. But for the last several years, since I have been chairman of this committee, I have opposed incremental funding. Sometimes it is done by appropriators, but I do not recall when we have done it in our committee, under my chairmanship. The House committee has started down that road this year on this particular vessel, because they have money in their budget for incremental funding, for beginning it, but not paying for it.

The reason I opposed this particular amendment in committee is because the two ships that the Senator from Louisiana and the Senator from California are talking about--the sealift vessels are fully paid for; $600 million pays for those two ships. On this amphibious ship, that same $600 million that was shifted to pay for that in the committee bill pays for only 40 percent of that vessel. That means in the next year, and the year after, we are going to have a price tag that is going to be coming due, and no matter what we may think of the priorities, we will be $400 million into this vessel. And at that stage, it becomes almost impossible to stop.

I have had people favoring aircraft carriers in the last 2 years asking that we start with $100 million to build an aircraft carrier. My answer has been that we on the committees dealing with defense can find the money to pay for it, but we cannot afford to start it. We have plagued the budget with entitlement programs that people feel they are entitled to by law, and discretionary money goes down, down, down every year. This week or next week will tell us how difficult it is to deal with anyone's entitlements. Anybody who has an entitlement feels that it is basically in the U.S. Constitution. It is not, but that is the way they view it, as part of the Bill of Rights.

We do not want to get into that situation in shipbuilding. I am not saying we do not do it in other areas. We have done it in the intelligence area. We have the intelligence budget that has had so much incremental funding that the hardware and the bills we are having to pay to meet past decisions eats up a huge portion of the intelligence budget. It can happen in the space station and in the super collider. Those are the kinds of things that sound good when you are under urgent pressures but come back to haunt not only the Congress but also the Department of Defense budget.

Incremental funding removes the discipline to properly fund programs and consider the full cost in tight budget environments. Incremental funding prevents us from basically being able to stop something once we have started it. Nobody is going to want to stop a ship we have spent $400 million on, even though a year from now we may find some other priority that is much higher. It violates the principle and central premise of good management. I think full funding, particularly on naval vessels--because they are so large and the cost is so much and you can get started with such a small amount of money in the first year--more than probably any other category, is a valid management principle in naval vessels.

If we do not have some principle of full funding, what you do is give the services incentive to basically get a foot in the door on everything. Believe me, there are people in the military services that would love to start whatever program they are in favor of with incremental funding. And you also give them incentive not to come up with a correct cost estimate, because they probably will not even be around by the time the bills become due.

Incremental funding also keeps programs alive and contentious year after year. Most of all, it locks the Congress and the defense budget into commitments made in previous years.

So I think we should not start down this slippery slope of incremental funding on naval vessels. It is interesting that the first lecture I ever got on this subject was from a Senator from Mississippi by the name of John Stennis, who believed very deeply that if we started breaching that principle, we were going to regret it. I think that is absolutely correct.

So, Mr. President, I urge support of the Johnston-Feinstein amendment. I do so with every intent to work with both Senators from Mississippi in trying to find a way to make sure we keep this program going. I do not hold out hope that it can be done easily, or this year, but I would not foreclose any option as long as it sticks with the basic principle of trying to find a responsible way to fund the vessel.

Mr. President, in this case, not speaking for the committee, only individually, I urge adoption of the Johnston-Feinstein amendment.

[Page: S7510]

Mr. INOUYE. Mr. President, the amendment proposed by the Senators from California and Louisiana presents to the Senate a most difficult choice. The Senators are asking us to undo an action taken by the Armed Services Committee. They seek to restore $608 million in funding requested by the President for the sealift fund and eliminate the same amount which the committee proposes to use to fund a portion of the amphibious assault ship requested by the Marine Corps, the LHD-7.

As chairman of the Defense Appropriations Committee, sensing that we may have to face this soon, I have given this matter very careful deliberation, and I have decided to support this amendment. I urge my colleagues to join with me. Allow me to explain my reasoning and to underscore my conclusion.

Mr. President, this issue juxtaposes the interests of the Marines to the interests of the Army. The smaller post-cold-war Army is increasingly dependent on improving its sealift capacity, while the Marines are trying to ensure that they will have 12 large-deck amphibious assault ships.

Mr. President, I have to point out to my colleagues that this is the type of choice that both the Armed Services Committee and the Defense Appropriations Subcommittee are facing and will face again and again--two worthy programs, two requirements which should be filled. However, the fiscal constraints require us to choose between them.

So let us consider the merits of each case. First, the LHD-7. The Marine Corps argues that it needs 12 large-deck amphibious assault ships to project power for two major regional contingencies. The corps points out that eventually some of its aging LHA ships will need to be replaced and that the LHD is the only ship class capable of meeting this requirement. The Marine Corps points to the Bottom-Up Review, which decided to increase the size of the Marine Corps--above the base force plan--as a sign that the Defense Department has ratified its force structure.

Furthermore, the Marines argue that if Congress fails to appropriate sufficient funds to purchase the LHD-7 this year, the Government will lose a price contract option. Under the Navy's plan, the LHD-7 would not be funded until the year 2000. The Marines and Navy both agree that the cost of waiting until then to purchase the ship will drive the cost up substantially, perhaps as much as 33 percent.

Last year, at the initiative of the Appropriations Committee, the Congress appropriated $50 million to initiate advanced funding for the LHD-7. The conferees of the defense appropriations bill noted that they expected the Navy to request funds in fiscal year 1995 for the balance of the ship before the Navy obligated the $50 million appropriated.

However, instead of requesting the additional funds, the Navy sought to rescind $50 million from this appropriations, and, Mr. President, as you know, we denied that request.

The Defense Department reviewed this issue in its fiscal year 1995 budget and determined that it could not afford to purchase the LHD-7 in fiscal year 1995. It argues that 11 large deck carriers fulfill 96 percent of the forward presence requirements of the Navy and Marine Corps. It also notes that the first LHA ship will not need to be retired until the year 2011, and therefore the Department recommends that the Navy and Marines wait until the turn of the century to build the LHD-7.

Mr. President, on sealift, I believe there is not much disagreement. If Desert Storm proved one point, it was that sealift is essential for U.S. forces. The only equipment that reached the theater in any sizable amount in the early days of the crisis was from equipment prepositioned on ships. It took 4 months to move all the remaining equipment needed into theater, primarily because there was insufficient sealift to respond more quickly. We were lucky, very lucky, that we had time to respond. But we also learned that the next time we might not be so lucky and we need to improve our sealift capability and we need to do it now.

Mr. President, it is ironic that Congress, before Desert Shield, had already recognized the problem and had created a sealift program to bolster our capability. I might add this congressional initiative, which the media would probably refer to as pork barrel, was designed to redress the growing shortfall and our program was initially opposed by DOD. However, after Desert Storm, DOD recognized the need and the Defense Department has embraced the program since that time.

The fiscal year 1995 budget requests $608.6 million to continue the sealift program. Of this amount $546.4 million is to acquire additional sealift ships. I must say that I believe this is one of the most critical needs of all of DOD.

Why then did the Armed Services Committee delete the funds for the program? In fairness to the proponents of the LHD and those members in the committee who voted to cut sealift and add funds for the LHD, may I respectfully suggest that it appears that they were misinformed.

Sources within the Navy had misinterpreted the contractual requirements for the Navy sealift program. They believed that the contract options for the next sealift ships could be delayed until December 1995. Had that been the case, the Navy could have used fiscal year 1996 funds to award that contract and could have used the 1995 funds for other purposes--in this case, the incremental payment for the LHD-7. After the committee action, the Congress was informed that the initial information was incorrect. The contract options on the sealift ships cannot be delayed until December 1995. A new contract would be required if funds were delayed until 1996, with higher costs most likely.

More importantly, the delayed award would mean a longer time until the needed ships became available. Mr. President, most respectfully, we cannot afford to wait. We need to press on with sealift now.

Mr. President, I realize this is a tough choice to make between meeting the goal of the Marines or the need of the Army. If additional funds were available, I believe the Department would like to do both. Unfortunately, that is not the case. We are functioning under strict fiscal constraints and additional funds are not available.

I concur completely with my friend from Mississippi when he says that we have cut too deeply and too fast. Having served in the great war 50 years ago, and having seen my Nation's Armed Forces dwindle down to almost nothing before June 25, 1950, when we had to send men into Korea untrained and unequipped and then suffering 10,000 casualties that were not necessary, I do not wish to see a repeat. But we are faced at this moment with decisionmaking time.

I must add one other technical concern that I have with the committee's position. As the Senator from Louisiana and the Senator from California have pointed out, the $600 million that has been set aside for the LHD is not sufficient for the Navy to award a contract for that ship. As everyone agrees, the LHD-7 is expected to cost about $1.3 billion or $1.4 billion. The committee position argues that we could fund the ship incrementally. As the chairman of the Armed Services Committee stated, I too would like to state that I oppose this incremental payment plan. The Congress has steadfastly argued that ships, because of their high cost and limited total numbers purchased, should be fully funded.

Yes, Congress did on one other occasion in the recent past allow for incremental financing to be used, but it was only with the understanding that the Navy would fully fund the balance of the ship in the next year.

Mr. President, we know that DOD does not plan to budget for the balance of the ship next year. The 1996 budget is already underfunded by $6 billion. This committee recommendation will only worsen that situation.

The Navy cannot award a contract for the ship unless it has the full $1.3 billion or $1.4 billion, or sufficient funds to cover its termination costs. The Navy would have to demonstrate that it intends to fund the ship before it proceeds with obligating the funds. Since it is very unlikely to do so, these funds could not be used.

Mr. President, as I said at the outset, this is a most difficult choice for us, but I believe the evidence lies in favor of supporting sealift and delaying the LHD for another time.

If I may at this juncture, as chairman of the Defense Appropriations Subcommittee, I will do my best, as I have done in the past, to look for sufficient funds at least for long lead time, and I can assure my colleagues and my beloved colleagues from Mississippi that the LLD will not be forgotten. This is the word that I give to my good friends. But at this juncture in this debate, I would have to urge my colleagues to support the amendment submitted by my dear friend from California and my colleague from Louisiana.

The PRESIDING OFFICER (Mr. Mathews). The Senator from Alaska.

[Page: S7511]

Mr. STEVENS. Mr. President, I have come to the same conclusion as the Senator from Hawaii has. On the other hand, I support overwhelmingly the LHD-7.

I thought about this last evening, and I am here to suggest to the Senate that there is a way to do both. We do need to make certain we do not lose the fast sealift that is under contract now. It is absolutely essential to our defense, but we also need to find the money to assure that this LHD-7, which we provided long lead time money for, does meet its construction schedule.

I think the money is there. I am glad to see that the chairman of the committee is here. He is my good friend. He may disagree with me. But I think we need to make a structural change in an authorization bill to at least just literally take the money that is necessary from another area and commit it now to the LHD-7.

As the Senator from Hawaii said, we can achieve that.

The area that I would take the money from is the area of the FFRDC activities. Those have already been reduced slightly by the Armed Services Committee, but I propose that they be reduced by 10 percent more, really. I propose a total reduction in the FFRDC in the level of about 19 percent. It would take $250 million from the $1.3 billion requested for these federally funded research and development centers.

I know that there will be a large scream heard around the world when I suggest that. But I believe that we are dealing with industrial base here as well as we do when we deal with things like the Seawolf. This LHD-7 is part of the national shipbuilding industrial base, and we need to send a signal that it will be continued, too. I think we can send that by reducing the amount that is committed to the federally funded research and development centers.

Those centers have played an interesting and valuable role during the period of the buildup of our forces and during the period of the expansion of our industrial base. Now that we have reduced our industrial base--as a matter of fact, we are reducing it too fast in many places--we do not have the luxury of continuing the federally funded research and development centers at the level proposed in the bill.

I am not critical of the Armed Services Committee--as a matter of fact, they are below the budget request--nor am I critical of the administration for requesting that amount. But there is no question now that we can reduce the amount that is committed to these federally funded research and development centers.

We had a period of time when our procurement reached a peak really, in about 1987, for defense of about $120 billion. Now we are going to be spending about $44 billion in procurement in 1995. That is a 60-percent cut over an 8-year period.

The federally funded research and development centers have had a very slight cut compared to the amount we are committing for procurement. From my point of view, I think we need to find a way to reduce these amounts.

I am going to have another amendment later to deal with the FFRDC's in terms of the compensation. I might say, I call attention of the Senate to a recent report in Science and Government, an independent publication that lists the salaries paid by these FFRDC's to the people who are working in terms of this type of analysis. Most of them are, in fact, retired from either the defense industry or from Government in general or from other industries. They are senior people who have a great deal to add to the review of our defense concept. But there is no reason for the kind of compensation that is being involved in those activities, particularly for people who I believe already are very adequately compensated in terms of their retirement years.

But that is just a sideline to this. What I am really saying to the Senate is, why should we argue, those of us who believe in a strong defense, why should we argue over whether we complete the contracts on the fast sealift or whether we put money to the LHD-7? We need both. I do not think there is anyone that has really reviewed the defense structure who would say we do not need both.

The LHD-7, I understand, has an initial operating capacity at about 1999 or 2000. The amendment I suggest will adequately fund that, because it would be structural, it would be taking out of the budget from now until that time about $1.2 billion to $1.3 billion. It would announce right now that we are not going to exceed that level during the coming period for FFRDC's.

Again, I say to the Senate to consider this. I do not know whether to offer this amendment right now or let the people react to it. But it does seem to me that, when we have reduced procurement by 60 percent, we should not be continuing at the 90 percent level of paying people to review the procurement policies. It is to me wrong to commit that kind of money. I think it is time now for us to make the decision that we should take money from these review organizations and from the think tanks and put it into steel, put it where it will be needed to aid our country in terms of our new concepts of trying to have the ability to have a mobile force, mobile but more modern, and I think LHD-7 is essential to that.

I do agree with the chairman of the committee, we cannot afford to cancel this fast sealift contract. My hope is we actually work this out before we are through and have an amendment that not only commits ourselves to the fast sealift, which is the intent, as I understand it, of the pending amendment, but commits ourselves equally to the LHD-7 and funds it now.

We can fund it now. There is no question that the money would be there if we just take the actions necessary to reduce another portion of this budget proportionally--not even proportionally; it would be one-third of the amount that the procurement has been reduced.

I believe that the FFRDC account is an excessive amount, and I am hopeful the Senate will consider reducing that and committing that to the LHD-7 and the fast sealift according to the current contract. We can do both within the budget, within the amount recommended by the committee and within the ceiling established by the President's budget and not be inconsistent with the Bottom-Up Review. It is something that could be done right here and now. We really do not need to argue as to which system should go forward now. We need both.

[Page: S7512]

Mr. COCHRAN addressed the Chair.

The PRESIDING OFFICER. The Senator from Mississippi.

Mr. COCHRAN. Mr. President, let me first thank my distinguished colleague from Alaska for his strong argument in favor of moving forward with both of these programs. It is consistent with the findings of the Armed Services Committee in their report. It is consistent with the strong arguments that have been made earlier today by my State colleague Senator Lott, who points out the reason why the issue was raised in the first place in the authorization committee.

I want to just read a portion of the committee report to confirm the fact that this committee has reviewed these programs and has come down strongly in favor of both of them. It starts out by discussing the fact that in written reports and testimony before their committee--Senator Lott talked about questions and answers he elicited from various witnesses who appeared before the committee on this subject--that the Navy has indicated it is immensely important to the fulfillment of commitments and to the Navy's future that this LHD-7 be built. There is an option to build the ship that is available now, and it must be exercised by the end of December of this year.

I am going to read now from page 34 of the committee report:

In written reports and testimony at committee hearings, a series of senior military leaders, including the Vice Chairman of the Joint Chiefs of Staff, the Commander-in-Chief of the U.S. Central Command, the Chief of Naval Operations, and the Commandant of the Marine Corps, have confirmed the strong military requirement for LHD-7 as the anchor for a twelfth amphibious ready group.

Now, even though the chairman of the committee, in his statements about this amendment, has indicated some reluctance to try to go forward with both programs at this time under the funding constraints, the committee which he chairs has come down very strongly in favor of doing just that.

It further provides on the same page:

Assuming appropriations of the necessary funds, the committee authorizes LHD-7 with the understanding that the Navy will exercise its contract option for LHD-7 before the option expires, and include the residual increment of funding for the ship in its fiscal year 1996 budget.

The Senate should support that. That is a clear, unequivocal commitment. And based on the evidence before the committee, through its hearings and through discussion and markup, this is what the committee decided.

They have come to the floor with this bill and with this report, and now, if what I am hearing is correct--and maybe I misunderstood some statements--they are backing away from it.

They are backing away from the commitment that is spelled out in as unambiguous a statement as I have ever read in any committee report before this Senate. Let us help the authorization committee fulfill its commitment and its desires as expressed in its report and in its bill.

I am quick to add that I am just as supportive of the sealift program as any Senator in this Senate. At every opportunity since I have been on the Defense Appropriations Subcommittee, I have questioned witnesses before our subcommittee about that program, have urged that additional funds be made available for that program, and have in every way possible supported full funding of the effort to do what we have to do to be able to transport men, materiel, and equipment to places where our military should be when our national security interests are threatened.

So there is no question about needing the sealift money, the $600 million. We thought it would not be needed this year. Senator Lott spelled out in his remarks why that suggestion for deferment of the exercise of options should be put into next year's bill--because the Navy said that the option did not expire until next year. Now we find out the Navy misspoke or they were mistaken in that assumption.

Let me just simply add my concerns to those expressed by Senator Stevens. There has to be a way to do this, and that is the point here. Whether we agree to accept this amendment or accept it in some modified form is really beside the point. The point is, we need to proceed with both programs, and we need to figure out a way to do that. And before we vote on this amendment, we need to reach that agreement.

We have other things happening right now. For example, the Appropriations Committee is meeting in full committee to mark up the appropriations bills--for the Department of Agriculture, for the Department of Energy, for the Corps of Engineers--for next year. I need to be at that meeting, so I am going to leave the floor for a little while. But I certainly hope the Senate will not act on this amendment until we `come reason together,' as a former majority leader of the Senate would say, and decide how we are going to proceed to build both LHD-7 and the sealift ships that are provided for in this bill.

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Mr. LOTT. Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER. The clerk will call the roll.

The legislative clerk proceeded to call the roll.

Mr. MITCHELL. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

The PRESIDING OFFICER. Without objection, it is so ordered.

END