Q: Can you comment on this report today about the House Appropriations Committee report which says that the Pentagon misled or misused funds, and essentially broke faith with Congress on defense spending?
Secretary Cohen: The report, much as the action by the subcommittee comes as something of a surprise to all of us in the Pentagon, we have more than 5,000 programs that we are required to report on. Out of the 5,000 the subcommittee has cited I believe six. That's quite, I think, a significant statement in and of itself, that about 99.9 percent of the time we seem to be doing things right.
If there are any deficiencies or allegations of failure to comply with the law, we will work with the committee to satisfy them as to the proper result.
I might point out that one committee may cite the Pentagon for failing to follow the direction of the House language, when in fact we may have something inconsistent in a Senate language report which is left ambiguous in a full House/Senate conference report. So some of this may be attributed to ambiguity in terms of what the direction is between the two houses and the ultimate resolution of the different interpretations of what the requirements are for the Pentagon.
But I would point out that out of the six items that were cited, if you put that in the context of the 5,000 programs that we have to administer, we're bound to have some deficiencies, but I think the record is overwhelming that we work very closely with the Congress. When they have a problem, usually they call us and we sit down and try to work it out. We will continue to do that in the future.
Q: Ken, the same committee that was gunning for the F-22, or is gunning for the F-22, has also issued a committee report sharply critical of the Pentagon for ignoring congressional direction--or in some cases--law in how money is spent. Either money intended for one purpose is in fact spent by the Pentagon on other things, and they say it amounts to hundreds of millions of dollars. What's going on with that?
Mr. Bacon: First of all, our defense budget is around $260 billion so, as much money as several hundreds of millions of dollars is, it's a very small percentage of $260 billion, and I think that's important for keeping this in perspective.
Second, I think you also need to recognize, as Secretary Cohen said earlier today, we have 5,000 programs in our budget--separate programs, separate line items in our program. These divide to maybe two or three times as many sub-programs, but there are 5,000 major programs in our budget.
We send up millions of pages of documentation every year to support these programs, both in testimony, in prepared briefs, in responses to questions, etc., to Congress. We try very hard to comply with every single requirement that Congress imposes on us. This committee has out of 5,000 programs focused on a handful-- around six programs--that they claim there are some.. that they see some problems with. Many of these problems, when you parse them out, deal with questions like notification. Was the committee notified in time about a change in contracting methods? Was it notified in time about a new tranche in spending? Was it notified in time about some change in the program? That's one category of disagreement.
Obviously, we try to live up to our notification responsibilities, but like everybody else sometimes checks arrive late in the mail. We try to live up to these deadlines, we don't always make it, and we apologize for that.
In one case--the case involving a so-called black program or secret program--it was started without proper notification. As soon as we learned about that, Deputy Secretary Hamre went to the committee, apologized, and notified them about what was going on. It was an oversight.
Another category focused on by the committee in its report had to do with whether funds were spent out of procurement accounts or out of research and development accounts. In some weapon systems, particularly satellites, this is an ongoing debate both within the Department and within Congress as to if you're dealing with a type of weapon that might be one of a kind of one of a very small number of weapons you would build, whether there's much of a distinction between R&D funding on the one hand and procurement funding on the other. That's, as I said, certainly true with satellites.
These are problems, many of which have been cured already because when we found out about them we went to the committee and apologized and gave the appropriate notification. Or, if they haven't been cured already, they are certainly problems that we will address forthrightly. But it won't take us long because they only mentioned about half a dozen programs out of 5,000.
Second, just let me point out one other thing. There was conflicting guidance--or certainly different interpretations--between the House and the Senate in one case I believe involving the MEADS, and there may have been some confusion on that. We have talked about this with the committee and will continue to talk about it with the committee.
Q: Is there a larger problem here? Secretary Cohen mentioned this morning that normally these things are worked out with a phone call. You mentioned that the Pentagon was blind-sided by the vote on the F-22. Has there been a breakdown in the relations between the Pentagon, the Administration and Congress on these defense issues? And wasn't that something that Secretary Cohen, because of his congressional experience, was supposed to kind of help mend relations or keep relations with Congress going?
Mr. Bacon: I think by any measure relations between the Pentagon and Congress have been basically very sound. Certainly the most fundamental measure is that Congress year in and year out funds the bulk of our requests and in recent years has actually been increasing the amount of money that we have received, increasing it above what we've requested. But if you go back and look at the alacrity with which Congress voted the supplemental money to fund Operation ALLIED FORCE--if you look at the way they voted to approve supplementals to cover other contingency operations that we've had over the last couple of years--I'd say that shows that there is a very good, solid working relationship between Congress and the Administration.
Q: That was then and this is now. Suddenly, just suddenly, it looks like things are more contentious.
Mr. Bacon: We deal with four major committees -- two in the House and two in the Senate -- every year on a variety of issues. This is one committee. It's an important committee, of course. We share a common purpose which is to make and keep America's defenses the best in the world. We're completely unified in that requirement, and we will continue to work together to make sure that our armed forces do remain the best, the most agile, the most powerful armed forces in the world.
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Q: Can I ask a question about the MEADS program?
Mr. Bacon: Sure.
Q: I don't have the report, but I think Jamie may have it there. There's a quote from what's described as an internal Pentagon document, and I'm paraphrasing, but it essentially says we understand that Congress has killed this program, and then the Pentagon went on to spend a couple of million dollars to keep the program alive.
What was the contradictory instruction there and how can you explain, if at all, that line? Or was it taken out of context?
Mr. Bacon: My understanding with the MEADS program was that... There was an issue as to whether the program was a clear, coherent program that had a chance of success. The Congress basically said to the Defense Department, look, either pump this program up, make it a better program, make some changes in the program, or kill it. And we came back with a revised program that protected what we thought were the most important parts of the program and substituted...
The MEADS is an air defense system, it stands for Medium Extended Air Defense program that we're building with our allies that provides extended range air defense, and it was to use a new rocket, a new missile. We recast the program to build it around a Patriot 3 missile, saving a lot of money by not proposing to go ahead with an entirely new "built from scratch" missile, but building it around a missile that we're in the process of fielding now. We did this in part to save time and to save money and to build the program around a known quantity. There are other parts of the program, radars, etc., that have been or we believe will be quite successful.
This is a complex program where I think there was conflicting guidance between the Senate and the House. What we tried to do was restructure the program. Rather than kill it off, to restructure it in a way that we felt would be more successful. The House obviously thinks we made the wrong choice. But that's, in a sense, what happened.
Q: What was the other guidance? You said there was conflicting guidance.
Mr. Bacon: The 1999 Defense Authorization Bill said that in the absence of new out-year funding identified by the Secretary for design and development of MEADS, it stipulated that "funds appropriated for fiscal year 1999 for the Ballistic Missile Defense Organization that are allocated for the MEADS program shall be available to support alternative programmatic and technical approaches to meeting the requirement for mobile theater missile defense." That's what the authorization bill said. Now remember, the authorization bill is passed by the Senate Armed Services Committee and the House Armed Services Committee as compared to the Appropriations Committee. We're dealing here with a House Appropriations Committee report.
The report language in the Senate appropriations markup says that the committee, quote--this is the Senate Appropriations Committee for 1999--"made reductions to slow the pace of a number of programs that could be affected by the results "-- and they name various experiments. "Specifically, the committee provided lower appropriations for MEADS." The 1999 report from the conference report reduced '99 funding in MEADS by $33 million to $10 million.
Obviously, the House Appropriations Committee believes that the language terminated the MEADS program. We read the language of the authorization bill as giving us the authority to support--to use their language--"alternative, programmatic and technical approaches to meeting the requirement for mobile theater missile defense."
So rather than spending $2 million to terminate the program, we used the $2 million to "support alternate programmatic and technical approaches to meeting the requirement for mobile theater missile defense." The principle way we did that was to restructure the program to build it around the PAC-3 missile rather than its own missile. We regard this as a dispute over the authority or instructions we got from Congress.