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Modernization Hinges on Fiscal Reality, Responsibility
Prepared remarks Deputy Secretary of Defense John P. White , League Sea-Air-Space Exposition, Thursday, April 04, 1996

Defense Issues: Volume 11, Number 34-- Modernization Hinges on Fiscal Reality, Responsibility It's not just how much DoD spends. It's how the department spends its money that counts. Maintaining land, sea and air dominance is no cheap proposition; thus, DoD's $250 billion five-year modernization plan.


Volume 11, Number 34

Modernization Hinges on Fiscal Reality, Responsibility

Prepared remarks by Deputy Secretary of Defense John P. White to the Navy League Sea-Air-Space Exposition, Washington, April 4, 1996.

I appreciate the opportunity to talk with you today, because we share a commitment to a strong and capable Navy. How we maintain a strong and capable military force takes up most of my waking thoughts right now. Next week, I will be testifying before Congress on our defense program for the rest of this century.

Budget season is a critical time for the department. As Mark Twain once said, "It is the will of God that we have congressmen, and we must bear the burden." More importantly, budget season is a time to take some navigational readings on our national security -- where we are and where we are going. That's what I plan to do in my testimony, and I want to give you a preview.

The best way to measure where our Navy is today is to go down to the waterfront and take a look at our ships and sailors and Marines. And every time I do that, I see why [Defense Secretary] Bill Perry says that "America has the best damn Navy in the world." We do.

For example, I saw how we have the best power-projection in the world when I helo'd out to the USS Wasp off of Norfolk [Va.] last summer. Today, our amphibious ships do a lot more than they did when I was in the Marines. These ships bristle with advanced technology, highly trained professionals who know how to use it and Marines who can quickly take charge of any situation, wherever we land them.

I have also seen how our country has the best force presence in the world when I visited the guided-missile frigate USS Samuel B. Roberts last December and watched part of its workups for deployment to the Persian Gulf. I was just in the gulf last week, and that's where the Roberts is today, serving with the [USS] George Washington carrier battle group.

With the flexibility and jointness of our forces today, you don't need to go down to the waterfront to see the Navy in action. I saw the Navy making a difference in landlocked Bosnia. It was the Seabees who arrived early and built the base camp for the American 1st Brigade [1st Armored Division] and others.

That's where we are with the Navy, and it's the same throughout the force. Today, in spite of the drawdown and all the turbulence that goes with it, our forces are well-trained, well-equipped and ready. You see it whenever and wherever we have deployed them.

In Bosnia, where our forces are giving peace a chance to endure. In Haiti, where our forces have given democracy a chance to take hold. On the Korean Peninsula and in the Persian Gulf, where we employ strong diplomacy and a strong show of force to deter aggressors without firing a shot.

And in the Far East, where the Navy presence provided comfort to Taiwan and caution to China. As the administration looked at the potential crisis across the Taiwan Strait and our options to respond to the situation, it was certainly nice to know that our carrier task forces were available, ready and capable of doing whatever we sent them to do.

This year's defense program was put together to keep this force ready and capable for whatever the future brings. Let me share with you some of the key themes that guided us as we put together this program.


Two years ago, critics charged that our forces weren't ready. You don't hear that anymore. You don't hear it because as the Clinton administration completed the post-Cold War drawdown, we maintained robust funding for training, operations and maintenance. We closely watched the readiness indicators for problems, and we took actions early when they occurred. Meanwhile, the president sought and received the funds and authorities necessary to maintain and improve quality of life in the military, including the maximum pay increases, better housing, health care and family support initiatives.

All of this has paid off in readiness indicators that are at -- or even above -- historically high levels. And high recruitment and re-enlistment rates -- indeed, FY [fiscal year] 94 was our third best recruiting year in the history of the all-volunteer force, and FY 95 nearly matched it.

I do not take this good news for granted. Having first worked on the concept of the all-volunteer force back in the late '60s and seen it come to fruition, I know what a remarkable accomplishment it is.

So the drawdown is practically complete, and the FY 97 defense plan continues to protect readiness and quality of life, to maintain the quality force we have today. But that takes us to the future. Where are we going? How do we ensure America has the best forces in the 21st century?

The Clinton administration answers this question with a force modernization plan that launches a robust procurement ramp-up for the next century. Over the last two administrations, the Defense Department was able to maintain modern equipment despite relatively low procurement levels by weeding out the older equipment as we drew down the force. But with the end of the drawdown, that modernization reprieve is over.

This year, we have submitted a procurement program that starts at nearly $39 billion in FY 97 and will increase steadily over the five-year defense plan -- a 40 percent increase after inflation. As a result, over the next five years, we will invest more than $250 billion in new equipment for the warfighters.

But it's not just how much we spend -- it's how we spend it that counts. Our modernization plan is designed to maintain our land, sea and air dominance. We do this through four technology strategies.

First, we are emphasizing leap-ahead technology to give us new warfighting capabilities. Leap-ahead technology is the very heart and soul of our major new systems such as the Joint Strike Fighter, the new attack submarine, the Commanche helicopter -- and two systems I saw in action at Patuxent Naval Air Station [Md.], the F/A-1 8 E and F and the V-22 Osprey. If you've ever seen the V-22 take off, you know what I mean by leap-ahead technology.

Second, we are accelerating upgrades to existing systems where they are cost effective. That includes adding new advanced technology components to workhorses such as the Bradley fighting vehicle, the F-14 aircraft, the Apache helicopter. We are even extending the service of tactical trucks. The Abrams tank upgrade will not only add 120mm guns and better armor, it will incorporate digitization and position navigation equipment, making it the most effective tank in history.

Adding new technology sometimes creates whole new weapons. For example, our Joint Direct Attack Munitions program, or JDAM, is turning all of our 1,000-pound "dumb" bombs into "smart" bombs by fitting them with little receivers that will allow us to guide them with global positioning satellites.

Third, we are investing in power-projection systems, which are critical to our power-projection strategy. We are focusing primarily on improving lift capabilities. Major priorities include multiyear procurement of the C-17 aircraft; improved lift through the LPD-17 class amphibious assault ships, which Congress accelerated; rapid sealift and pre-positioning ships; and Aegis guided missile cruisers.

Finally, we are investing in technology to enhance battlefield situation awareness. This includes satellites,

unmanned drones and airborne radars that can locate targets precisely; and communications and navigation systems that can synthesize all that collected information into one big picture of the battlefield. Battlefield awareness was the key to battlefield dominance in Desert Storm, and it will remain the key.

That's our modernization plan in a nutshell: smart weapons and smart choices. And if you look closely at our plan, I think you will agree. There are some in Congress who claim that $252 billion for modernization over five years is too little. I believe they are ignoring both the fiscal reality and the fiscal responsibility of our modernization plan.

Let's face fiscal reality. Gone are the days when anybody could seriously propose to increase defense spending, cut taxes and balance the budget -- all at the same time. Today, deficit reduction has taken precedence, and the administration and Congress have agreed to balance the budget in seven years. I myself have developed a series of balanced budget plans for Ross Perot and the Concord Coalition. And I can see from my professional experience that President Clinton has taken great pains to reach a balanced budget while protecting national security. The Clinton budget is built on both fiscal reality and national security reality.

Our defense modernization plan also takes fiscal responsibility into account. Rather than simply asking for more money, we are spending our money more efficiently and effectively -- and passing the savings onto modernization.


We have significantly reduced the department's civilian work force, and these reductions are now about 90 percent complete. We have completed hundreds of base closings and realignments, about 50 percent of the total approved by the four BRAC [base closure and realignment] commissions. This year, for the first time, the savings from base closings will exceed the costs, and in the year 2000, we will have savings of about $17 billion.

We also expect to realize substantial savings from reforming the defense acquisition system, from buying more like the commercial sector and more from the commercial sector. We cannot pocket those economies yet, but we are seeing measurable savings in trial programs.

For example, we used the new buying practices in the JDAM program, the one that's turning "dumb" bombs into "smart" bombs. We saved about $28,000 per bomb. Since we're converting more than 100,000 bombs, that means about $3 billion more for other modernization programs. And that's just the savings from one system. Indeed, acquisition reform is changing the whole equation when it comes to defense procurement dollars -- by cutting our buying overhead, we're getting more modernization for each dollar we spend.

Finally, we are cutting overhead and saving money by emulating the private sector's practice of outsourcing -- that is, transferring functions previously performed in-house to an outside provider. Numerous companies have turned to other service providers for information technology services, distribution, telecommunications and more. We need to do the same. In fact, outsourcing is not new to DoD. Many functions are already outsourced to some extent.

But we can do more. If done correctly, outsourcing will not only save us money, it will help us build the kind of organization we want DoD to be -- an organization that thrives on competition, innovation, responsiveness to changing needs, efficiency and reliability. So outsourcing is one of my highest priorities. To encourage the Navy and the other services to look for outsourcing and privatization opportunities, I recently signed a memorandum stipulating that they can keep the savings they achieve -- savings they can spend on readiness and modernization.

You might have gotten the impression from reading the newspapers that the service chiefs disagree with our modernization plan -- that our ramp-up trajectory should be steeper. But this so-called disagreement is a classic case of a headline in search of a story.

The fact is, the service chiefs understand the resource constraints that the department, the government and the country are under. When pushed by members of Congress, the chiefs may say, yes, they would like more money sooner. I would like more money sooner, too. I would also like a fat-free ice cream that tastes like Ben and Jerry's.

Wishful thinking aside, the chiefs have all participated fully in developing the administration's FY 97 budget and the five-year defense plan. The defense plan incorporates many of their recommendations and concerns, and they support it. Most importantly, they support the priorities I have described here today that are reflected in our defense program. Any disagreement about the content and shape of the program is between the administration and the Congress -- not between the military and civilian leadership.


I believe in this defense plan. It maintains the readiness of the force and the quality of life of the troops. It provides for a modernization investments that will maintain our air, sea and land dominance. And built into the plan are savings and efficiencies that will allow us to afford our modernization investment. We have a strong program and the right priorities that will ensure the defense and security of our nation into the next century. I look forward to defending our defense plan, and I hope I can count on your support.


Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant 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. Defense Issues is available on the Internet via the World Wide Web at