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Zakheim Stresses Transformation in Fiscal 2004 Budget Request

By Jim Garamone
American Forces Press Service

WASHINGTON, Feb. 3, 2003 – Funding the global war on terrorism, maintaining a quality force and transforming the military to face 21st century threats are at the heart of the president's fiscal 2004 defense budget request.

DoD Comptroller Dov Zakheim briefed reporters at the Pentagon today and characterized the budget as making a trade between near-term requirements and longer-term ones. "Essentially, we've concluded that we can withstand a somewhat greater increase of risk in the near term, to minimize or reduce longer-term risk," he said.

The overall defense request is $379.9 billion.

Transforming the defense establishment is key to the long-term security of America, Zakheim said. The defense programs America invests in today must be ready for the future. At the same time, DoD must fight the global war on terror. Zakheim stressed that the fiscal 2004 request is a "peacetime" budget. He said the budget does not include operations in Afghanistan or in other areas of the world.

"We're taking (training) money and funding Afghanistan," Zakheim said. "This puts us in a very difficult bind and will force us to request more money from the Congress at some point. If not, we simply will not be able to conduct training and other operations later this year."

Military construction and family housing are pegged at $9 billion in the fiscal 2004 budget request. The money would allow DoD to fund sustainment of facilities at 93 percent of the requirement. Zakheim said this is quite good. Industry typically comes in at around the same percentage.

The Family Housing Privatization Initiative comes in at $346 million in fiscal 2004. However, this is really like $2.5 billion because private industry sinks $8 into the program for every dollar DoD invests. DoD is on a "glide path" to eliminate sub-standard housing in the department by fiscal 2009.

The comptroller said one of every three discretionary dollars is programmed for transformational activities. Missile defense, the Army's Future Combat System, unmanned underwater vehicles, unmanned aerial vehicles, joint tactical radio systems, information operations and space operations are all viewed as transformational and are funded at $24.3 billion in fiscal 2004.

Zakheim said shipbuilding is a "good news" story for the department. In fiscal 2004, DoD has programmed seven ships. Through fiscal 2009, the department plans on at least seven ships a year. In fiscal 2008 and 2009, the numbers jump to nine and 14. That is when a new class, the littoral combat ship, is scheduled to enter service.

The department will retire older Spruance-class destroyers early. The Navy expects to have superior, efficient ships to replace these older, more expensive craft.

In aviation, DoD has budgeted $5.2 billion for the F/A-22 program. A total of 22 aircraft is programmed in fiscal 2004. The entire program is capped at $43 billion. The Air Force can move money around, and the service has done that. The more efficiently the program runs, the more aircraft the service can buy. Right now, the "bottom number" is 276, Zakheim said.

DoD is also budgeting $3.5 billion for 42 F/A-18E/F Hornet aircraft. In the out-years, the Navy will allocate funds to build an F-18G model. This will replace the Vietnam-era EA-6 Prowlers used for electronic warfare.

The Joint Strike Fighter program is set ultimately to build 2,450 aircraft with eight countries participating to date. The JSF is budgeted at $4.4 billion in fiscal 2004.

There is $1.8 billion set for the V-22 Osprey. This funds research and development and procurement of nine aircraft for the Marine Corps and two for special operations uses.

DoD misses its target for science and technology funding. The department wanted S&T to be about 3 percent of the total budget. It comes in at 2.69 percent. Zakheim said the number will creep up to 3 percent in the Future Years Defense Program.

Zakheim said DoD will continue to work on stretching resources. He said the department must reduce layers of bureaucracy. The department must, like the rest of America, try to get a handle on rising health care costs. The department will divest itself of noncore activities. Zakheim said the department, for instance, will stop doing security clearance investigations and turn the process over to the Office of Personnel Management.

DoD needs legislation from Congress to help transformation. Zakheim said the department needs to establish a DoD civilian personnel system.

"Right now, our military system is governed by us," he said. "Our civilian personnel system is governed by other peoples' rules. We believe we are in a unique situation. We have over 600,000 civilian employees, and we need to have a more different and flexible civilian management system."

He said DoD wants a one-time fast-track reorganization for the civilian system.

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