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Service Members Are Top Priority in 2000 Budget

By Jim Garamone
American Forces Press Service

WASHINGTON, Feb. 1, 1999 – The president's fiscal 2000 defense budget of $267.2 billion reflects DoD's emphasis on service members with requests next year for a 4.4 percent pay raise Jan. 1, a targeted pay raise July 1, and military retirement reform.

A senior defense official said the proposed budget would fund the "most pressing needs" of military commanders.

Civilian pay will also rise by 4.4 percent.

The budget is the first increase in defense spending since the end of the Cold War. In addition to compensation issues, the budget would provide $53 billion for procurement and places the department on the road to achieving the 1997 Quadrennial Defense Review goal of $60 billion a year for procurement. The fiscal 1999 DoD budget is $265 billion.

The Future Years Defense Plan calls for $112 billion extra through fiscal 2005.

Under the proposal the Army's share of the DoD budget is $67.2 billion; the Navy/Marine Corps, $83.3 billion; the Air Force, $79.1 billion; and DoD activities, $37.6 billion.

The budget proposes a military end strength of 1,370,000 active duty service members: 480,000 Army soldiers, 372,000 Navy sailors, 172,000 Marines and 361,000 airmen. The Selected Reserves will be set at 865,000 service members, and there will be about 700,000 civilian employees.

The budget includes money to prepare for two more rounds of base closures in fiscal 2001 and 2005. "We must get rid of excess infrastructure," said the senior defense official. "The money we spend on excess bases is money we will not be able to spend on new weapon systems and quality of life programs for service members."

Savings from new rounds of base closures would start showing up in fiscal 2005. "The first couple of years, it costs money to close bases," the official said, adding neither the fiscal 2000 budget nor the Future Years Defense Plan include savings from new rounds of base closures.

The budget is built around the quadrennial review strategy of "shape, respond and prepare." "We must balance between our near- term interests and prepare for the threats of the future," the official said. With this in mind, the highest budget priorities are to continue to attract and retain high-quality military personnel, ensure high operational readiness, implement force modernization, improve base facilities and family housing, and to streamline infrastructure.

The budget counters all threats the United States is likely to confront, said the official. This covers the emergence of a "near peer" threat, increasing threats from weapons of mass destruction and an increase in terrorism.

DoD has seen disturbing personnel trends: The Navy missed its recruiting goals by 6,900 sailors in fiscal 1998, and the Army missed its first quarter fiscal 1999 recruiting goals by 2,300 soldiers. If the Army cannot correct these recruiting problems, the officials said, the service will miss its fiscal 1999 recruiting goals by 10,000 soldiers. The senior official said the compensation package included in the fiscal 2000 budget should go a long way toward reversing these trends.

The military leadership's top budget priority was fixing the retirement system. The Redux retirement system became effective in August 1986, and the program meant that service members coming on active duty after that date will receive 40 percent of their base pay if they retire after 20 years of service. The proposed change will raise the benefit to 50 percent after 20 years. Other changes mean retirees would receive cost-of-living raises during periods of low inflation. Officials pegged the cost of these changes at $6 billion through fiscal 2005.

The across-the-board 4.4 percent pay raise is the largest since fiscal 1982. Pay raises through fiscal 2005 are now set at 3.9 percent each year. The raise is higher than the estimated pay growth of civilian-sector employees. It is also more than 2 percent higher than the estimated inflation rate. Through fiscal 2005, the pay raises will cost an estimated $14 billion extra.

The targeted pay raise -- also called pay table reform -- looks to retain mid-level NCOs and officers. The raises range from .5 percent to 5.5 percent and will take effect July 1, 2000. The senior defense official said the reform will reverse the pay tables' current trend of rewarding longevity more than promotion. Pay table reform will cost $4.5 billion though fiscal 2005.

Finally, DoD proposes to increase specialty pays and bonuses to personnel in critical military specialties. "We're having problems retaining surface warfare officers, nuclear officers, special operators and many other specialties," said the official. "We need to increase retention and recruiting." Cost for these increases is $2 billion through fiscal 2005.

Operations and maintenance funds remain at historic highs. The Army, for instance, has budgeted tank crews to 800 driving miles per year, up from 703 in fiscal 1999. Army monthly tactical hours per crew are set at 14.5, up from 11.5 in fiscal 1999.

Navy steaming days per quarter remain at 50.5 for the deployed fleet and 28 for the nondeployed fleet. Tactical hours per crew per month are 22.3, up from 22.1 in fiscal 1999.

Air Force reduced fighter and bomber crews' monthly flying hours and raised them for tanker and airlift crews.

The fiscal 2000 budget fully funds operations in Bosnia and Southwest Asia. "This means we won't have to borrow funds from O&M accounts to finance contingencies," the official said.

The budget puts modernization on the track recommended in the QDR. "This will fund the weapon programs we will need for the future: the F-22, the Comanche, the Crusader, the Joint Strike Fighter, the V-22 and so on," the official said. The modernization sector will climb from $53 billion in fiscal 2000 to $61.8 billion in fiscal 2001.

The Army's procurement budget is set at $9.7 billion in fiscal 2000; the Navy, about $21 billion; the Marines, $1.1 billion; the Air Force, $19 billion; and DoD activities, $2.1 billion.

Army programs

Major Army aircraft projects include $773.5 million to fund fire-and-forget Hellfire missile capability for the AH-64 Longbow Apache helicopter. The Comanche RAH-66 helicopter will receive $427 million in research and development funds. The Army will spend $102.8 million to buy eight Black Hawk UH-60 choppers.

The Army has budgeted $658.3 million for Abrams tank upgrades and $348.8 million for Bradley fighting vehicle "sustainment," such as improvements for crew command and control capabilities and situational awareness, and for increased lethality of the system. The Army also budgeted $343.9 million in research and development funds for the Crusader self-propelled artillery system.

Navy programs

The Navy's major fiscal 2000 aircraft procurement is 36 F/A- 18E/F Hornet strike fighters, tagged at $3.066 billion. In addition, the Navy proposes to buy seven SH-60R anti-submarine helicopters, 15 T-45 Goshawk trainer aircraft, three E-2C Hawkeye early warning aircraft and 12 AV-8B Harrier jets. The Marines will get 10 V-22 tilt-rotor aircraft for $796 million.

The Navy will spend $2.9 billion for three more DDG-51 Arleigh Burke class destroyers in fiscal 2000. It is asking for $1.5 billion for two LPD-17 San Antonio class amphibious transport docks, and $453.1 million for an auxiliary dry cargo ship. The latter is a new class of supply ship. The Navy is also budgeting $1.1 billion for the new attack submarine and $66.4 million for the Seawolf attack submarine.

Air Force Programs

The Air Force wants $3 billion for its F-22 advanced tactical fighter -- $1.8 billion to buy six aircraft and $1.2 billion for continued research and development. It has budgeted $282 million for 10 F-16 fighters, the first part of 30 that will go to the Air Reserve and Air National Guard. Finally, the Air Force wants $3.5 billion for 15 C-17 airlifters and $280 million for an E-8C surveillance and targeting radar aircraft. No new B-2 Stealth bombers are set for fiscal 2000, but the Air Force budget includes $374 million for spare parts and research and development.

Finally, Air Force planners set $308 million in research and development funds on the airborne laser program. The program envisions fitting a modified Boeing 747-400 with a laser that can destroy incoming missiles. The program is in coordination with the Ballistic Missile Defense Organization.

Defense/Joint programs

The major aircraft program, the Joint Strike Fighter, is budgeted for $476.9 million. The Air Force, Navy and DoD all contributed to this research and development program. Ultimately the Joint Strike Fighter will replace Air Force F-16s, Marine AV-8Bs and Navy F/A-18E/F aircraft.

Theater missile defense projects are funded at $2.9 billion. The request includes $611 million for the Army Theater High-Altitude Area Defense missile and $189 million for its Patriot PAC-3 missile program, $369 million for the Navy Theaterwide defense program, and $75 million for the space-based laser project.

National missile defense budget is set at $1.2 billion, all in research and development funds.

Overall budget in research, development, test and evaluation is going down slightly in DoD. The fiscal 2000 R&D budget is set at $34.3 billion, down from $37.4 billion in fiscal 1999. The senior defense official said this is normal. "We've had a number of big budget items pass from research and development to procurement," he said. "If you look at R&D over the years you will see the cyclic nature of this funding."

The president's fiscal 2000 budget is now in the hands of Congress for deliberation. Congress may change aspects of the budget request, but is constrained by the Balanced Budget Agreement. It has until Oct. 1, 1999, to pass DoD's authorization and appropriations bills.

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