Mr. Chairman, members of the Committee:
It is a pleasure to be here for my second, and last, budget testimony before this Committee. First, let me thank you for your continued support of our military these many years. I appreciate the opportunity to discuss the President’s Fiscal Year 2009 Defense Budget request.
Before getting into the components of the request, I thought it useful to briefly consider it in light of the current strategic landscape – a landscape still being shaped by forces unleashed by the end of the Cold War nearly two decades ago. In recent years, old hatreds and conflicts have combined with new threats and forces of instability – challenges made more dangerous and prolific by modern technology. Among them:
• Terrorism, extremism, and violent jihadism;
• Ethnic, tribal, and sectarian conflict;
• Proliferation of dangerous weapons and materials;
• Failed and failing states;
• Nations discontented with their role in the international order; and
• Rising and resurgent powers whose future paths are uncertain.
In light of this strategic environment, we must make the choices and investments necessary to protect the security, prosperity, and freedom of the American people.
The investment being presented today in the base defense budget is $515.4 billion, or about 4 percent of our Gross Domestic Product when combined with war costs. This compares to spending levels of 14 percent of Gross Domestic Product during the Korean War and 9 percent during Vietnam. Our FY 2009 request is a 7.5 percent increase – or $35.9 billion – over last year’s enacted level. When counting for inflation, this translates into a real increase of about five and a half percent. The difference consists of four main categories, which are outlined in more detail in my submitted statement.
Overall, the budget includes:
• $183.8 billion for overall Strategic Modernization, including $104 billion for procurement, to sustain our nation’s technological advantage over current and future adversaries;
• $158.3 billion for Operations, Readiness, and Support to maintain a skilled and agile fighting force;
• $149.4 billion to enhance Quality of Life by providing pay, benefits, health care, and other services earned by our all-volunteer force; and
• $20.5 billion to increase Ground Capabilities by growing the Army and Marine Corps.
This budget includes new funding for critical on-going initiatives such as:
• Global Train and Equip to build the security capacity of partner nations;
• Security and stabilization assistance;
• Foreign language capabilities; and
• The new Africa Command.
In summary, this request provides the resources needed to respond to current threats, while preparing for a range of conventional and irregular challenges that our nation may face in the years ahead.
In addition to the $515.4 billion base budget, the Fiscal Year 2009 request also includes $70 billion in emergency bridge funding. There is, however, a more immediate concern: Congress has yet to pass the pending $102.5 billion Global War on Terrorism request for Fiscal Year 2008 and, as a result, the Defense Department is currently using fourth quarter funds from the base budget to cover current war costs. Shortly, two critical accounts will run dry:
• First, Army military personnel. After June 15th , we will run out of funds in this account to pay Soldiers – including those currently serving in Afghanistan and Iraq; and
• Second, Operations and Maintenance accounts. Around July 5th, O&M funds across the Services will run out, starting with the Army. This may result in civilian furloughs, limits on training, and curbing family support activities.
If war funds are not available, the Defense Department can transfer funds from Navy and Air Force military personnel accounts to pay soldiers, but that would get us only to late July. Using the limited Transfer Authority granted by Congress would also help us get to late July. Doing so, however, is a shell game, which will disrupt existing programs and push the Services O&M accounts to the edge of fiscal viability.
Beyond the Army personnel account and O&M account, other programs will be adversely impacted if the pending FY 08 supplemental is not passed soon. Among them, critically, is the Commander’s Emergency Response Program (CERP) – the single most effective program to enable commanders to address local populations’ needs and get potential insurgents in Iraq and Afghanistan off the streets and into jobs. Congress has provided $0.5 billion of our total CERP request of $1.7 billion. Without the balance of $1.2 billion, this vital program will come to a standstill – the Department does not have the authority to extend funding beyond the $977 million in authority provided in the FY 2008 NDAA.
While I understand that you may pass the FY 2008 war funding bill before the Memorial Day recess, I am obligated to plan for the possibility that this may not occur. I will keep Congress informed of these plans in an effort to ensure transparency and minimize possible misunderstandings.
Delaying the supplemental makes it difficult to manage the Department in a way that is fiscally sound and prudent. To illustrate this point, I have compared the Department of Defense to the world’s biggest supertanker. It cannot turn on a dime and cannot be steered like a skiff – and, I would add, it cannot operate without paying its people.
I urge approval of the FY 2008 war funds as quickly as possible.
Finally, I thank the members of this Committee for all you have done to support our troops as well as their families. In visits to the combat theaters, in military hospitals, and in bases and posts at home and around the world, I continue to be amazed by their decency, resilience, and courage. Through the support of the Congress and our nation, these young men and women will prevail in the current conflicts and be prepared to confront the threats that they, their children, and our nation may face in the future.
Thank you Mr. Chairman.