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Budget Request Funds War on Terror, Transformation

By Jim Garamone
American Forces Press Service

WASHINGTON, Feb. 3, 2003 – The president's fiscal 2004 defense budget request would fund the ongoing war on terrorism while continuing the transformation of the armed forces to meet the threats of the future.

The president is asking Congress for $379.9 billion for defense in fiscal 2004, which begins Oct. 1, 2003. That breaks down to spending $42 million an hour, said a senior defense official who briefed reporters Jan. 31 on the 2004 request.

The budget request is $15.3 billion more than for fiscal 2003. By service, the Army would receive $93.7 billion, the Navy and Marine Corps would get $114.6 billion, and the Air Force, $113.7 billion. Defensewide spending would be $57.9 billion. The amount each service spends is roughly the same percentage as in the past.

Attracting and keeping quality people in the military is the highest priority of the budget. Projected military pay raises range from 2 percent to 6.25 percent. The lowest ranking service members would receive the 2 percent raise. "They are the most junior, and they don't spend a lot of time at those grades," the official said. The mid-level grades would receive the highest pay raises. As in the past, if approved, the raises go into effect on Jan. 1, 2004.

The budget would allow the department to lower the out-of- pocket expenses service members pay if they live off base. The budget will drop the costs to around 3.5 percent, with elimination assured for fiscal 2005. When then-Defense Secretary William Cohen announced this housing initiative on Jan. 6, 2000, out-of-pocket expenses averaged 19 percent.

Active duty end strength is pinned at 1,388,100 and the Selected Reserve set at 863,300. The senior official said the numbers do not include activated reservists.

The request includes $5 billion for military construction and family housing. Family housing privatization is set at $346 million for 36,262 units. Private industry, however, puts in $8 for every dollar the government invests. "You're looking at, really, $2.5 billion a year," the official said. "That's how private industry would view it."

The budget request would put the services on track to eliminate substandard housing by 2007 except for the Air Force. The Air Force has four bases that will be finished in 2008 and overseas housing will run into 2009.

Military health care would receive $15.3 billion in fiscal 2004. All told, military personnel accounts would be at $98.6 billion in fiscal 2004, up from $93.4 billion in fiscal 2003.

Operations and maintenance accounts are set at $117 billion. This would fund Army tank-miles at 913 and Army flying hours at 13.1 hours per crew per month. Navy flying hours are set at 20.8 hours and Navy steaming days set at 54 days per quarter. Air Force flying hours works out to 16.8 hours per crew per month. A tank-mile is one tank per crew driven one mile.

The senior defense official said the department is examining the validity of tank-miles as a standard measure. He said they may not be the best way to measure readiness as the Army continues its transformation.

Transformation is a large part of the defense budget. The senior official said some $25 billion would go directly to transformational programs. But the services have used transformation changes to date to get more funds to continue the process.

The Army has terminated 24 systems including the Crusader artillery system, the Abrams tank and Bradley fighting vehicle upgrades, and multiple launch rocket system conversions. The service also restructured its medium tactical vehicle program, battle command systems and Javelin missile system.

The Navy will retire 26 ships and 259 aircraft early. The largest component of the ship retirements are Spruance- class destroyers. These ships were built in the mid-1970s and are an "operating sink," meaning the maintenance needed to keep them in service is considered prohibitive. The aircraft retired early are mostly F-14 fighters and S-3 anti-submarine aircraft, Navy officials said. The senior defense official said these changes should allow the Navy to reduce end-strength by 10,000 across DoD's Future Years Defense Program, which projects the department's situation through fiscal 2009.

The Air Force will retire 114 fighters -- mostly early model F-16s and some F-15s -- and 115 mobility/tanker aircraft as well as restructure the B-1 bomber program. The official estimated these changes will free up just over $7 billion in fiscal 2004.

He estimated all the services' efforts would save about $82 billion over the Future Years Defense Program.

"The basic point of this year's budget is that we have accepted near-term risk in order to transform for the longer term," he said.

Some specific transformational programs are the Army's Future Combat System, which would receive $1.7 billion in fiscal 2004. In addition, the Army would receive $900 million to procure 301 Stryker interim armored vehicles. The request programs $1.1 billion to continue the Comanche helicopter program.

The Navy will spend $1.5 billion for the new-generation CVN-21 aircraft carrier available in fiscal 2007.

The department has programmed $453 million for transformational satellite communications based on laser technology, and $299 million on a Space-based Radar System.

Last year, Defense Secretary Donald H. Rumsfeld took a lot of heat from Congress over shipbuilding. The budget calls for an almost $3 billion increase. Shipbuilding is pegged at $12.1 billion in fiscal 2004. The Navy would receive a Virginia-class nuclear attack submarine, three Arleigh Burke-class Aegis destroyers, a San Antonio-class amphibious transport ship and two cargo ships. In addition, the Navy would receive $1.2 billion for research and development of the DDX destroyer, the littoral combat ship and the CGX cruiser.

In aircraft, the request allocates $5.2 billion for the F/A-22 Raptor program (22 aircraft), $3.5 billion for the F/A-18 Hornet (42 planes) and $4.4 billion for the Joint Strike Fighter program.

The Air Force would get $3.7 billion for 11 more C-17 Globemaster III transports, and the Marines and Air Force would receive $1.8 billion for 11 V-22 Osprey tilt-rotor aircraft.

The total DoD budget is 3.4 percent of the gross domestic product and 16.6 percent of the federal budget. The senior defense official said that 3.4 cents on a dollar as the United States fights a two-front war against terror is a good investment.

"We don't think this is an undue burden on the economy in any way, shape or form," he said. But he also made the point that the request doesn't factor in the costs of operations worldwide. "We don't know what those costs will be, and any figures you get will be garbage," he said.

He said the department is working with the Office of Management and Budget to capture the cost of operations and go back to Congress for additional funds.

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