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Robust National Security at a Reasonable Cost
Prepared statement of Secretary of Defense William J. Perry , The House National Security Committee, Washington, Wednesday, February 08, 1995

Mr. Chairman, members of the committee: It is a pleasure to be here to discuss President [Bill] Clinton's fiscal year 1996-97 Department of Defense budget.

We meet halfway through the first decade after the end of the Cold War. We have seen enough of this new security era to know that serious dangers persist as well as great opportunities to advance peace and democracy. How best to counter those dangers and pursue those opportunities can generate honest debate. However, I believe there also is a tremendous basis for consensus, and it is in that spirit that I come before you today.

How best to handle the dangers and opportunities of the post-Cold War era has been exhaustively studied by the Department of Defense. Our strategy calls for a force structure that will be capable of fighting and winning two nearly simultaneous major regional conflicts and conducting a wide range of other military operations.

During the past year we have rigorously revalidated our strategy's major military requirements, and they are supported by the new budget and the FY 1996-2001 Future Years Defense Program, whose implementation the budget begins. Our plans reflect my department's best judgment as to the strategy, force posture and programs needed to protect U.S. interests and sustain America's crucial global leadership role. In explaining how they do that, I will organize my statement around three dominant defense challenges facing our nation in this new era.

The first challenge is managing the use of military force. To support this challenge, the budget and FYDP:


  • Sustains the force structure called for by our strategy. DoD has intensively and extensively validated the key assumptions underlying its strategy and force planning in rigorous ways, such as our comprehensive war game Nimble Dancer.
  • Maintains a robust overseas presence. This week, as a snapshot, we have 300,000 military personnel deployed overseas: approximately 100,000 permanently assigned to Europe, a similar number in the Pacific and the remainder are today participating in contingency operations or are deployed at sea. We anticipate that we will continue about this same level during the budget period.
  • Provides the capability to mount contingency operations. In FY 1994 our forces demonstrated this capability, especially during two operations: Vigilant Warrior, in which forces were deployed to Kuwait and Saudi Arabia, thereby deterring Iraqi aggression and demonstrating our resolve to fulfill our commitments in that region; and Uphold Democracy, in which we deployed a substantial force to Haiti to help reinstate the democratically elected president and government and provide a secure and stable environment for the return of functional governance.
  • Ensures the continuous readiness of U.S. forces, as I will detail later.

DoD's thinking on managing the use of military force is reflected in our basic operational concept for major regional conflicts. An overseas presence of forward-deployed forces contributes both deterrence and quick reaction. Sufficient strategic mobility enables the rapid projection of blocking forces into the conflict area.

Cooperation with a coalition of nations can yield both allied help as well as political pressure against potential aggressors. Superior technology and modernization enables us to apply decisive air power, combat technology, intelligence and more. Committing overwhelming counteroffensive forces promotes rapid victory with the least possible casualties. And providing the foundation to this operational concept for regional conflicts must be high readiness of U.S. forces.

The ability of U.S. forces to react to contingencies was vividly demonstrated in Operation Vigilant Warrior. Some 121 aircraft deployed to the Persian Gulf theater in less than seven days. A forward-deployed amphibious readiness group moved into the area in one day. A mechanized infantry brigade deployed to Kuwait and was ready for combat in three days -- demonstrating both our airlift capabilities and the benefits of having heavy equipment already in the theater. Another Army unit linked up with its equipment from pre-positioned ships in 15 days. Finally, the George Washington carrier battle group moved from the Adriatic Sea to the Red Sea in three days. The impact of this rapid projection of military power: deterrence of new Iraqi aggression.

The second challenge is to prevent the emergence of a serious post-Cold War nuclear threat. The cornerstone of our response was DoD's 1994 Nuclear Posture Review, whose recommendations were approved by the president last September. The review called for reductions in strategic programs to reflect actual U.S. needs, thereby setting an example for other nuclear powers; plus a hedge strategy, which retains a U.S. force structure sufficient for deterrence. The new budget and FYDP retains this credible nuclear deterrence, although spending on strategic nuclear programs is much lower than during the Cold War. The NPR's hedge strategy also includes our approach to ballistic missile defense, detailed below.

Another element of our nuclear prevention challenge is the Cooperative Threat Reduction program, which focuses on the weapons in the former Soviet Union, which will be discussed in more detail later.

A third element of this challenge is counterproliferation -- preventing the spread of nuclear, biological, chemical and missile capabilities, a growing threat to U.S. global interests. Regarding one such effort -- the Framework Agreement with North Korea -- I want to stress that there are no funds in this budget for the agreement, because it does not call for any DoD funds.

Additionally, our budget assumes that implementation of the agreement will be successful; in the absence of this agreement we would be back to the position we were in last June, when we were planning to reinforce our defense posture in Korea. Should the agreement not be implemented, reinforcements will be required, at a significant additional expense.

Ballistic missile defense is part of our hedge strategy as well. Our highest priority continues to be theater missile defense, which addresses the immediate threat to U.S. forces deployed throughout the world. We have three core TMD programs. ... We are also proceeding with a national missile defense technology program aimed at achieving readiness to deploy such a system in a few years, if the threat requires.

The ... slight decline in funding [of Cooperative Threat Reduction] through FY 1997 does not reflect a decrease in DoD emphasis, but rather the timing of different aspects of the program. Indeed, I believe that this program will remain one of our most important. Some people have called CTR a nondefense program, but I call it defense by other means. How better to deal with weapons of mass destruction, than to dismantle them?

A final post-Cold War challenge is managing the drawdown of U.S. forces. The new budget and FYDP maintain the force structure needed to support our defense strategy, protect readiness, ensure quality of life for military people and their families, and advance our plans for recapitalization. I will elaborate on each of these.

The drawdown of forces to the level called for by the new defense strategy will be nearly complete by the end of FY 1996. At that time DoD will have reduced active military personnel and force levels by over 30 percent since the beginning of FY 1990, the fiscal year in which the Berlin Wall fell. The ending of the drawdown will bring a welcome end to personnel turbulence.

Reflecting cuts in forces and infrastructure, personnel end strength continue to decline. By FY 1999 active military end strength will level off at about 1,445,000 -- about 33 percent below its FY 1987 post-Vietnam peak of 2,174,200. In FY 1998 Selected Reserve end strength will hit its goal of 893,000 -- about 22 percent below the 1987 level of 1,150,900. DoD civilian end strength will decline to 728,000 in FY 2001 -- almost 36 percent below FY 1987 (1,133,100). The decline in active duty military and DoD civilians is nearly identical, but one precedes the other by several years.

In formulating the new budget and FYDP my department accorded the highest priority to preserving force readiness. Regarding our current readiness, there are several reasons why I am convinced that it remains high. The most important indicator is that our commanders in chief report to me that they are ready to execute their current missions. This readiness was manifested by their successful execution of complex operations in Haiti, Iraq and Rwanda. The professional skill demonstrated by our military men and women was superb.

Our military commanders also forward to me regular statistical reports. These show that our early deploying forces are maintaining the high rates of readiness that they have been at for the last decade or more. The readiness problems of some of our late-deploying units, which became evident at the end of FY 1994, will be fixed by April 1995.

What about future readiness? The FY 1996-97 budget protects readiness. My guidance for the formulation of this budget was that readiness should be the first priority and that other objectives could be traded off to ensure it. That guidance was followed. Additionally, the $25 billion added by President Clinton late last year enabled us to support the readiness and quality of life measures we wanted in the budget. When I reviewed the FY 1996-97 budget with the military service chiefs they confirmed for me that it fully funds needed operational training and the depot maintenance required to support our strategy.

However, the service chiefs also warned that the diversion of funds for unplanned contingencies would affect readiness. To prevent readiness problems we are requesting speedy approval of an emergency supplemental appropriations to help pay DoD's FY 1995 costs for unbudgeted contingencies now under way. In this supplemental we are also requesting a readiness preservation authority, which would enable the secretary of defense to avoid diverting money from readiness to pay for contingency operations late in the current fiscal year. This authority would operate like overdraft protection on a checking account, enabling DoD to protect readiness in anticipation of later funding.

To preserve readiness in the future DoD will monitor it carefully and continually, as it is doing now. Our vehicles for doing this include the Senior Readiness Oversight Council, chaired by the deputy secretary of defense. It meets once a month and has the authority to solve problems. In addition, we will stay on top of readiness through MBWA, "management by walking around." That means going out to military bases and talking with people. I and other senior DoD leaders do this all the time. No management tool is more important.

The central tenet of our readiness philosophy is that people are our most important asset. ... It takes many years to develop first-rate leaders. People come first, not simply for sentimental reasons, but because they are our most productive investment. The superiority of America's armed forces derives primarily from the unsurpassed quality of our officers and noncommissioned officers as well as the subordinates they train and lead. The most important part of my job is to develop these future leaders as a legacy for my successors, the 21st century secretaries of defense.

A key to readiness and effectiveness therefore is keeping quality people. How do we plan to do that? First, by training realistically, which the new budget supports. For example, it funds 12 brigade rotations per year at the National Training Center [Fort Irwin, Calif.], as well as superb exercises such as Red Flag, Bright Star and Roving Sand.

Another contributor are the real missions on which our forces deploy. Some people worry that such deployments hurt readiness. But for many units these operations are tremendously beneficial. For Army units at Fort Stewart [Ga.], the Vigilant Warrior deployment to the Persian Gulf was the best possible training for its wartime missions. In Haiti our special operations people are actually carrying out civil-military activities rather than merely training to do them.

The critical point is this: As long as we manage and fund them wisely, contingency operations need not degrade our force readiness. Indeed, most operations will likely provide very realistic training as well as many intangible benefits of real-world experience. Real missions enable our military people to demonstrate the professionalism they have honed and can be a great source of pride -- especially when those missions deter aggression, save lives, promote democracy and help people in need.

Keeping quality people also means that we must re-enlist families, which leads to discussion of quality of life programs.

Providing a good quality of life for service members and their families is both the right thing to do and crucial to sustaining the readiness of U.S. forces. Reflecting this conviction, the new budget funds the full military pay raises provided for under law: 2.4 percent for FY 1996 and 3.1 percent for FY 1997. The budget also protects medical benefits. These are very important to people, and we could not have protected these benefits without the $25 billion added by President Clinton.

Community and family support programs are central to my quality of life emphasis. Our plans call for a 23 percent increase in child care spaces by FY 1997. The FY 1995 and FY 1996 budgets include $56 million for 20 new/expanded child care centers. Also planned are 18 new recreation centers, chapels and fitness centers.

Finally I must talk about housing, which is the No. 1 topic in every one of my base visits. At U.S. bases all around the world housing is inadequate. Partly that is because of changed demographics. We no longer have a conscript force, and many more of our people are married. Additionally, housing programs have not kept pace with housing needs -- including during the 1980s, when defense funds were more plentiful.

Our plans call for a 13 percent increase in housing dollars per active duty person (FY 1996 over FY 1994). But that is not enough. We cannot solve our housing problems just by seeking increased budgets, so we are looking at a housing initiative that seeks alternative ways of getting more housing for our people.

Beyond these traditional concerns I recognize that quality of life can deteriorate when military people spend excessive time away from their home station -- such as for lengthy contingency operations. We are taking steps to ensure that DoD standards for length of deployments for service members are maintained, except for unavoidable circumstances. For example, I have directed the greater use of reserve forces to relieve active duty units that have excessive commitments.

The modernization of weapons and other systems is important to readiness, not this year or next, but five or 10 years from now. To ensure that U.S. weapons will remain qualitatively superior to future adversaries the new FYDP begin the recapitalization of America's armed forces -- an undertaking that will continue well into the next century.

The drawdown of U.S. forces has allowed a delay in this recapitalization. As the force structure came down, the remaining units could be equipped with modern systems already fielded. But now we must now begin a new phase of modernization in order to sustain the quality of the force over the long term.

Still, recapitalization will not require one-for-one replacement of major systems. Technology will help us find ways to do things better and smarter. We may not need as many systems. We should be able to sustain our equipment longer in the field by upgrading it with new technology. This will cost money as well, so in the end we need increased funding.

Resources for recapitalization will come from:


  • Acquisition reform. We are confident that this will bring more efficiency, enabling us to lower the unit cost of buying new systems and lower the cost of sustaining those systems over their full life cycle.
  • Reducing infrastructure. Base closures are the primary example of our efforts. By the end of this decade base closings from 1988, 1991 and 1993 should yield savings of about $4 billion a year.
  • Outyear real budget growth.

Before looking at that out-year growth it is important to consider where we are today. Procurement of key weapons like ships, aircraft and tanks are at historical lows. Still, because of the force drawdown the average age of some key systems in the field has gotten better. For battle force ships the average age of the fleet has dropped as has the average age of ships retired each year. On the other hand, the average age of our tanks, fighter and attack aircraft, and surface combatant ships is increasing.

Requested budget authority for procurement in FY 1996 is $39.4 billion, which, adjusting for inflation, is a decline of 71 percent from FY 1985 and the lowest level since 1950.Budget authority for procurement in FY 2001 is projected to be 47 percent higher than in FY 1996.

This increase for procurement is reflected in our top-line data. For 1996 the president's budget requests $246 billion in budget authority and $250 billion in outlays. FY 1996 budget authority is, in real terms, 39 percent below FY 1985, the peak year for inflation-adjusted DoD budget authority since the Korean War. By FY 1997 the cumulative real decline since FY 1985 will reach 41 percent.

The continuing decline in defense spending is reflected in other budget trends. As a share of federal budget outlays, defense expenditures will fall to 13.5 percent by FY 2000 -- half the share in FY 1986. Defense outlays as a share of the gross domestic product will fall to 2.8 percent in FY 2000 -- less than half 1980's levels.

In sum, President Clinton's FY 1996-97 budget preserves our nation's security robustly and at reasonable cost. My department funded force readiness as its highest priority and used as its guide: People come first. Our plans support the right force structure for the right strategy for this post-Cold War era. And to keep those forces second to none DoD plans begin their recapitalization.

The past year has confirmed again the importance of America's global leadership and military power. With that in mind, I look forward to working with all of you toward the goal we all share: preserving the readiness, quality, morale and superiority of our nation's armed forces -- a continuing source of great pride for all our citizens.


Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant to the Secretary of Defense (Public Affairs), Washington, D.C. Parenthetical entries are speaker/author notes; bracketed entries are editorial notes. This material is in the public domain and may be reprinted without permission