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Budget Briefing presented by Secretary Cohen and Mr. Lynn (Comptroller)

Presenters: Defense Secretary William Cohen and Mr. Lynn
February 02, 1998

Secretary Cohen: Good morning.

This is my first budget as Secretary of Defense, and as you know, the foundation for this budget was the QDR -- a comprehensive analysis of our defense posture and strategies, policies and programs. The QDR examined the nature of our security threats and risks and opportunities that are facing the United States both today and out through the year 2015, and it developed some far-reaching recommendations on strategy, force structure, readiness, modernization, and infrastructure.

Then of course you're aware that last November Dr. Hamre and I announced a sweeping reform of the Department's support activities and business practices. This reform initiative, the DRI, seeks to bring the Department the best business practices that U.S. corporations have used to become leaner, more agile, and highly successful. The money that is saved by these initiatives will be especially crucial for funding the readiness in the future force.

If I could have the first chart.

As you're all aware, the essence of our new defense strategy is to shape the international environment in ways that are favorable to U.S. interests, and that includes the forward deployment of roughly 100,000 troops throughout the Asia Pacific and also in Europe with continuous carrier, amphibious task force deployments. Also our engagement. We anticipate having the ratification debate on NATO enlargement, on PFP exercises and the programs have been especially successful. We have the NATO/Russia Founding act. We have a variety of bilateral, multilateral ties to Asia Pacific.

We also include within this a threat reduction, and here I'm referring specifically to the Nunn/Lugar programs which have been especially helpful in reducing the levels of nuclear weapons and chemical weapons in our relationship with the former Soviet Union. This budget includes funds for forward deployment, engagement, and threat reduction.

Next chart.

Part of the QDR had to do with shaping the environment. The second component was responding to crises. Here, of course, we need to support the force structure that will allow us to respond to that full spectrum of crises, maintain a very high state of readiness, to streamline the support and the base structure, and critical to achieving this goal, of course, is reducing overhead burdens and to put that money into readiness and force structure. So it's critical that we have the kind of reduction in overhead that we currently have.

Next chart.

On the major readiness initiative, as we said, readiness is a perishable commodity. Therefore, it's always at risk and requires constant and very careful attention, so we're taking aggressive action to address key readiness issues -- people. We've had a very high PERSTEMPO. We are going to focus on new management systems to track unit deployments and to focus corrective action whenever they exceed certain thresholds. With respect to training, the budget maintains a very vigorous OPTEMPO at the same rates that we've had in past years. A critical area, of course, has been spares and maintenance. With respect to that, we are including roughly a billion dollars to address shortages in spares and maintenance so we can keep up our flying hours and also help reduce some of the backlog in the depot work. Overall, our operation and maintenance spending per troop is up, but again, high states of readiness require constant vigilance and money.

Next chart.

I touched upon this just briefly before, but in terms of our Defense Reform Initiative, these are some of the business practices which we will be instituting in order to save as much money as possible and to accomplish a good deal of efficiency. We're going to reduce the size of OSD by some 33 percent over the next 18 months. We will see comparable reductions in other departments. We are going to reengineer our business practices and go to a paperless contracting system. As I've pointed out to a number of you, we've had thousands of pages of financial regulations, some 70,000 pages in the past, and I've held them up for your benefit. We've reduced those down to a CD ROM; by July of this year we will have it completely on the Internet; and by the year 2000 all of the major contracting will be done via the Internet, so we're becoming a paperless society here in the Department of Defense.

We are going to improve competition. We're going to put up 150,000-200,000 positions for competition. What we've found in the past historically, that when there is competition, it usually breaks down about 50 percent of the time the public facilities will win; and 50 percent will go to the private sector. But in any event, it usually results in about a 20 percent savings. So it's of great benefit -- you get a high product at the best price, and it's the best deal for the American taxpayer.

BRAC. We have to move forward to two new rounds of BRAC. I would like to point out the savings that we have been able to achieve from previous BRAC rounds. We have proposed a closure or a realignment of 152 major installations and some 235 smaller ones. We have invested roughly $23 billion in that effort. We will net out by the year 2001 some $14 billion total for the savings that have been achieved through these previous four rounds. Then we will have recurrent annual savings of roughly $5.6 billion each and every year.

We project that we have two more rounds. The DRI has recommended this, the National Defense Panel also has supported this very strongly, that we would have -- after the costs are absorbed we will have -- roughly $3 billion in additional savings. So this is going to be key to our being able to maintain high states of readiness and also to accomplish the goals that we have set for ourselves as far as the modernization program is concerned.

Next chart.

The contingency funding. Another key to maintaining readiness is to get prompt approval of congressional action to support a supplemental appropriation for contingency operations in both Bosnia and Southwest Asia. To cover the unfunded FY98 costs that are associated with extension in Bosnia and also the increased operations in Southwest Asia, the Administration is going to be submitting an emergency non-offset supplemental. The Administration is also going to submit an emergency non-offset budget amendment to the budget to cover the FY99 costs of the Bosnia deployment. Once again, I would take this opportunity to say that prompt approval of the supplemental would be key to our achieving the readiness levels that are necessary to keep our troops at the very highest states of capability, as well as achieve our modernization goals.

Next chart.

In preparing for the future, the third element of the QDR, strategy, we need to achieve our modernization goals with all of the elements I've laid out in the past. We want to implement Joint Visit 2010. We intend to be able to respond to asymmetrical threats and to maintain high quality personnel.

Next chart.

Just a word on modernization which I think this is a very important chart, because for years, when the Secretary of Defense and the Chairman of the Joint Chiefs appeared before the Senate and the House, Capitol Hill, they would say that we had to get to approximately a $60 billion annual investment in new technologies and procurement, and yet the line kept going down.

We now, under this budget, will be achieving our goal by the year 2001. We will hit the $60 billion figure. This year I had pledged to the Congress in this budget that I would achieve a $49 billion amount. I fell a little bit short. It's $48.7. But it's pretty much on target in terms of where we have to be as far as investing for these systems in the future. By the year 2000 we will have achieved our goal. Again, all of it is contingent upon getting the kind of savings that we anticipate out of BRAC in the years coming as well as the Defense Reform Initiative.

Next chart.

In responding to the asymmetrical threats, we have provided for an increase of approximately a billion dollars over the FYDP for the years FY99 through the year 2003. We will establish a new agency for threat reduction, and as part of a broader effort we're going to be calling upon the National Guard and our Reserves to really focus upon the issue that I think is going to be with us for years to come in the future, and that is the prospect of terrorists possibly launching attacks in our urban centers and throughout the domestic United States.

We are going to improve the quality and the ability to protect our critical infrastructure, and we are establishing a Defense Information Assurance Program, and that basically is to try to acquire as much integration of information that we can have in order to plan for protecting our information systems. Right now there are many, many programs underway at both the state level and the federal level. We need to be able to integrate that into a very coherent program.

Next chart.

This indicates our 050 account. You can see as I projected last year, that the defense budget is likely to remain flat. If you look at current dollars, obviously there will be a significant increase in terms of the inflationary factor involved there; but in terms of constant dollars, we're likely to see a very flat level of funding for the foreseeable future.

All of this is significant because in the past when we have gone to the Hill, members would ask what would you like to have in addition to what is in the budget? Of course each of the individual services have a number of things they would like to have and have submitted those answers to the members of Congress. I assume the same practice will take place today and I don't seek to discourage that. But there must be an understanding that there are no additional add-ons coming this year or for the foreseeable future because you have the Balanced Budget Agreement. Therefore, any add-ons to one service will necessarily come out of the hide of another service. We have what we believe to be a very balanced program now, and members obviously would have an opportunity to make and suggest changes, and as long as those are done within what we believe the FYDP would require, I think we can make appropriate adjustments.

But this chart is for the purpose of pointing out that there are unlikely to be any increases in the future, and we have to work within this Balanced Budget Agreement.

So in summary, the final chart, the balanced QDR strategy for shape, respond, prepare drives the FY99 program. Secondly, our readiness and force structure depend upon the DRI proposals to reduce overhead. Our modernization targets are on line, they can be achieved. Joint Vision 2010 concepts will exploit the revolution in military affairs. And we need to treat people as our most important asset.

I believe that some of you, if not all of you, had a very detailed briefing in terms of the budget itself, but the Comptroller is here, Bill Lynn is here to answer any specific questions on the budget. But I will entertain some questions in the next few minutes.

Q: Mr. Secretary, I wonder if I can just briefly ask you about Iraq first. The Russians say this morning that Saddam Hussein has told their representative in Baghdad that he is now prepared to allow some access to eight more presidential sites as long as the inspectors are accompanied by members of the five current members of the Security Council, but not complete access. How do you respond to that? Does that ease the situation at all?

A: I don't think it really is a solution to the situation to say that eight sites... I'd have to see the statement, I have not read the statement, I assume that what the Russian delegate -- I think it's a Deputy Foreign Minister who is there -- is suggesting is that all of the presidential sites but eight would be open to full examination, full access by UNSCOM; and that the remaining eight would also be open, plus there would be additional personnel who would accompany the inspectors should they determine to go in there. If that's the case, obviously that is something we should look at, although I don't think it's a solution. What we're concerned about is that we not see UNSCOM politicized. That the people who are going into the sites are the ones who are the experts, and any attempt to politicize it by adding personnel who are not experts seems to me to be undermining the process. But it's something we will look at. I don't think it's an appropriate solution at this time.

Q: Also, sir, you said on Saturday, as you've said repeatedly, that you expect, or you believe that our friends and allies in the Gulf , such as Saudi Arabia and other countries -- will support any US strikes on Iraq. What do you mean by support? Do you mean launch actual attacks or provide AWACS basing, that kind of thing?

A: I mean that they will support whatever our military requirements would dictate. We would expect the full support of all of the Gulf states.

Q: If Saudi Arabia or one of the other regional allies refused to allow offensive strikes to be conducted from their territory, would the United States still be able to conduct the kind of sustained bombing campaign that you've threatened in the event that diplomacy fails?

A: Let me repeat, I would expect all of the Gulf states to agree and support whatever military action needs to be carried out if the President decides that is the case. No such decision has been made at this point. I would expect the full support of all the countries. Beyond that, I don't think I can comment.

Q: Have you made a decision about whether you'll be traveling to the region?

A: Not yet, but we're processing your visas and... (Laughter) ...we'll keep you posted.

Q: Mr. Secretary, are you personally convinced that gains can outweigh the political costs of a military action against Iraq? And I'm speaking specifically of the political costs to Saudi and Turkey that keep them from allowing us the use of their bases. Secondly, is Saddam himself the problem, or is it his Bath party?

A: As I indicated earlier, I believe that the best solution is for the inspectors to have unfettered access to the sites they wish to inspect. That has been the policy announced and articulated by the UN Security Council. As I repeat once again, I find it rather hard to accept the proposition that individual members cannot bring themselves to declare Saddam to be in material breach or significant breach of his obligations. I find it hard to fathom how they can seek to walk away from their own resolutions in terms of what he has done and what he has failed to so.

I think the best solution is to have UNSCOM on the ground. The President believes that, I believe that, the entire Department believes that. I think our allies believe that.

I also have indicated that the best way to achieve that goal is for the Security Council to remain united, to support strong condemnation. A resolution of support would be helpful, it's not mandatory. We think we have all the authority necessary to use military force if necessary. But we think that would be a helpful step in persuading Saddam he has not been successful in dividing the Security Council, which has been his goal.

Whether or not it is Saddam Hussein himself or those of his party who support him, I think we're not in a position to make a judgment as to whether or not it is he, himself. I think it's fair to say that others would be less effective in marshaling whatever support he has within his country to pose the kind of threat that he does to his neighboring countries.

Q: Should he be a target?

A: Our policy is not to target Saddam Hussein, but to seek to curtail his ability to manufacture and continue to reconstitute his weapons of mass destruction and also pose a threat to his neighbors.

Q: Mr. Secretary, you were reviewing some further additions to round out the force in the Gulf. Have you made any of those decisions yet?

A: Not yet. And this is typical of any type of military consideration. There are always refinements, additions, changes. I simply have to take more time to review them.

Q: Mr. Secretary, are U.S. forces in the Gulf receiving any kind of inoculation as some troops did in 1990, against biological weapons that Iraq may throw at them?

A: Not at this time. I think the answer is no.

Q: Why is that?

A: We have planned to have a major inoculation program, but to begin it in the spring after all of the certifications from FDA and others certify that the materials that we have, the vaccines that we have are safe, are stable, and have their effective potency.

Q: Have they received the new lightweight protective suits yet?

A: I don't believe those are in the field just yet.

Q: Mr. Secretary, I [was] wondering why your administration has decided to terminate the FMS military (inaudible) program to Greece in such a crucial period, (inaudible) Greece is facing an (inaudible) by Turkey in the Aegean?

A: I'm sorry, I didn't understand what you were asking...

Q: Why you decide to terminate the FMS military program to Greece?

A: I have not focused specifically on the FMS program for Greece, but we have very good relations with Greece and with Turkey, I might add. As a matter of fact, the Vice Chairman is meeting with them at this time. So we hope that their relationship will be a positive one, and we're trying to work out their differences of opinion dealing with Cyprus and other issues.

We have a very good program relationship with Greece as well as Turkey.

Q: Mr. Secretary, have you ruled out the use of tactical nuclear weapons in order to destroy deep hardened targets in Iraq? And what would Saddam Hussein have to do to invite a possible nuclear response from the United States?

A: Jamie... (Laughter) Are you going on this trip? Where are you going on this trip? (Laughter)

Our policy...

Q: There are serious people discussing whether or not the United States would consider using nuclear weapons. I'd like to get your...

A: Our policy has not changed. As President Bush prior to President Clinton indicated, any use of chemical or biological weapons against us or our allies would be met with a very vigorous, devastating response. Beyond that, I wouldn't comment.

Q: Mr. Secretary, can you bring us up to date on whether or not you're yet reviewing any requests from Israel for either protective gear like antidotes or masks, and the status of offering them information on missile attack warning?

A: Obviously we would cooperate very closely with Israel on all of these issues should it be warranted. Should there be any decision to resort to military force we would be operating in very close contact with the Israelis to make sure they receive whatever cooperation we can provide.

Q: A budget question. You mentioned in your brief that a billion dollars would go towards readiness, especially spare parts shortages and maintenance. Can you talk a little bit more about that? Are there things in particular that stand out over the last couple of months that have forced you to make this...

A: There are some backlogs as far as Navy depot work is concerned, which these funds will be directed toward; as well as to engine repair and parts replacement for Air Force. There will be included some pilot retention type of benefits. But the Air Force, as well as Navy aviators as well and Marines, there is a problem across the board; more serious as far as the Air Force is concerned, in terms of pilot retention, and that of course impacts upon the status of readiness. So we're trying to address that by, again, looking at PERSTEMPO rates for pilots, trying to get more of a rationalization of the programs so they're not overutilized to take into account the stress that's placed on their families and themselves. And it cuts across the board, but it's roughly a billion dollars that's directed towards spare parts, engine repairs, replacements, and pilot retention.

Q: If you want more bases closed with two more rounds of BRAC, is there a way to state how many bases, major installations, you feel must be shut down in two more rounds? You've given it as a monetary figure. Do it as a specific number of bases.

A: That would really be up to a BRAC commission. The BRAC commission would be set up by Congress with certain guidelines as to what factors would have to be taken into account, but I can't give you a specific list, nor would I give you a specific list of items. I can show, we will show in some detail in terms of if you look at the number, for example, of submarines that we had during the height of the Cold War, and the number of submarines that we have and will have under the QDR goals. There is a substantial reduction in the numbers of subs. There's not a substantial reduction in pier space. If you look at the numbers of aircraft that we had during the height of the Cold War, you will see a substantial reduction in those numbers. There has not been a comparable reduction as far as the bases are concerned.

So you need to have a greater reconciliation of what we have in the way of force structure with what we have in infrastructure. And you can go down systematically and make those kinds of comparisons, but I wouldn't be in a position to say which specific or how many bases need to be closed. That would be a determination of the BRAC commission.

Q: How likely is it this time around Congress will go along with it? And do you really want to go back to Maine in the next century and look at say Kittery and Brunswick being shut down?

A: How likely is it? I think that the Congress has to face up to its responsibilities as well. During my confirmation hearing last year and during the presentation of the budget I pointed out that all of the easy choices have been made, and that Congress has a co-equal role, a co-equal responsibility here. All I can do as Secretary of Defense is say here is our best analysis. This is what we need to achieve this kind of a balanced force in the future. These are the kinds of reductions that are imperative.

If Congress decides not to undertake two more BRAC rounds, then it will choose to say that we're going to carry that excess infrastructure, which means that we will impact upon readiness or we will impact upon modernization. They will have to make that choice as well as I have made that choice. So it's up to them, working with us. If they choose not to do so then they will have to accept the responsibility for it that they are going to send our sons and daughters into harm's way in the future with less than the best equipment, the most sophisticated that we can develop for the future, and with less states of readiness. If they're prepared to do that, I think they have to be prepared also to accept the responsibility for it.

So I'm going to present it in terms of responsibility. It would apply to Maine as it would to California, to any other state. We all have a national security interest in protecting, so it should be applied across all of the 50 states.

Q: In hitting the procurement goal, what were you able to do this time that eluded your predecessors?

A: Well, what we were able to do is to have some savings, and obviously had some force, some end strength reductions. We also were able to cut back on some of the previous levels of procurement. I reduced, for example, the F-18E/F model from 1,000 to 548; I reduced the profile of that procurement rate to achieve some savings; I cut back one wing on the F-22 Raptor; we cut back the total number of V-22s for the Marine Corps, but accelerated the buy; we were able to achieve some substantial savings through that method. That's one of the reasons we were able to achieve that.

Q: The Army seems cranked off about this budget in a way I haven't seen them before. They say that the balanced budget's been balanced on the back of the U.S. Army. What do you say to that?

A: If that is the case, it's news to me. I have been working very closely with General Reimer. He has worked with me through the QDR process. I have met with the Chiefs for many, many times on many occasions during the past year. I have yet to hear any of the Chiefs indicate that they felt their ability to carry out their mission was being undermined by the QDR process. So I think you're always going to have some disagreement on the part of members within services saying it's not enough for this service, but as far as the Chiefs are concerned, as far as the Chairman of the Joint Chiefs are concerned -- both [Generals Shelton and] Shali who preceded General Shelton -- they strongly support this budget.

Q: Is the billion dollar add-on in O&M an acknowledgment that you are starting to have difficulty meeting the training hours; that you are having difficulty keeping the spare bins full, ammunition full; training hours, flying, shooting times. All of those things have been dropping because of your shortage of O&M.

A: I think it's fair to say that it's impossible to maintain a static level of readiness throughout all of the services at every given moment. Sometimes readiness will decrease by virtue of overseas deployments, high operational tempos, things that are going on in the Gulf right now, extensions in various areas including Bosnia. All of that requires a much more sophisticated systems management.

To the extent there have been shortages, yes, we recognize there have been some shortages. When those shortages are called to our attention, we also have to have a better reporting mechanism so that I become aware of it and the JROC becomes aware of the requirements earlier so we can address them and make changes during the course of a year. But it does recognize that we need to put more into our readiness accounts in order to replace those deficiencies.

Q: Does it not also acknowledge the changing threat, that the threat is not a monolithic Soviet threat and therefore, you don't need to be at the kind of readiness level you might have needed when you feared the Fulda Gap might be full of Soviet tanks?

A: We have a different type of threat today which in many ways is equally if not as challenging, more challenging. That is by virtue of the instability that we see in the world today, by virtue of the tensions in the Gulf, those in Korea, what we're seeing take place in various parts of the world. We have different types of challenges which require a higher operational tempo than we've had before. So it's a question of calibrating the nature of our operations and PERSTEMPO with the kinds of threats that are evolving. So in some cases it's more challenging because it's more manifold in nature.

Q: You've repeated the litany that people are our most important asset, and yet your budget takes $1.1 billion away from military construction and family housing when every one of the services has backlogs on bases, repairs and new construction they need, and family housing is one of the (inaudible)...

A: Some of the military construction funding, as I recall, is going into some of the housing programs. What we're trying to do with respect to housing is to really leverage the private sector into dealing with this problem. We have roughly 375,000 units of housing both domestically and internationally, approximately two-thirds of which are in need of repair and rehabilitation. It will take us a number of years in order to achieve that rehabilitation goal. What we're doing now through a program that has been authorized by Congress is to find ways in which we can leverage private sector either lending, investment, equity types of holdings and to utilize their dollars in ways that give us about a three-to-one ratio. So even though the dollars are coming down, they're being used in a different fashion which will accelerate the rehabilitation of those units rather than having a three or four times as much that will be required as an appropriation. So we're doing it differently today and we're doing it we think better and more efficiently.

Q: Your budget, Mr. Secretary, allocated $2.2 billion for 30 additional Superhornets. Some of your staff has said that before that actually happens, before that money is given to the contractor, that you want to certify that this wing drop problem... a fix for that is identified. Can you talk a little bit about your confidence in the Navy in fixing that. And also, what happens if you don't certify a fix? Do you cancel the program? Do you...

A: The first thing is to fire the staff members who have been talking to you. (Laughter) No...

The problems that have been identified with the F-18E/F model we believe can be corrected with very marginal costs involved. It would not require a wing redesign. Some of the changes that I've looked at, the three approaches that have been suggested by a very distinguished panel... The panel was selected, Dr. Hamre was the individual in charge of forming a blue ribbon panel to look at this -- distinguished scientists, and those very well experienced in the field of aerodynamics. They have come up with three proposed changes which are very marginal in nature which they believe either together or in a solitary fashion will be able to correct the problem. There will be no release of an additional 30 aircraft until I'm satisfied that that wing drop problem has been corrected.

Press: Thank you very much.

Mr. Lynn: If you haven't exhausted yourselves with questions on the budget, I'm happy to answer them.

Q: ...non-offset supplemental (inaudible). Traditionally Congress always wants a recission with a supplemental in order of the same amount. In the past you've had some (inaudible) adjustments in (inaudible) money that you could take to use for this. That's gone. What's going to be the pitch to actually get a non-offset supplemental?

A: A couple of things. One, we don't think the Balanced Budget Agreement really anticipated those costs, so they were done in an allowance. They're in the federal budget, but they're not in the defense budget. Which leads to the second point, which is the most important.

We think that you need to be able to pay for those in another place in the budget in order to protect the modernization goals that we hit in '99 and maintain the high state of readiness with the increases in OPTEMPO and spares. That is crucial that that be a non-offset supplemental. We think it's crucial to maintaining the integrity of the policy.

Q: You're talking if they force you guys to offset or if they do it themselves, they're going to break the modernization program as you've (inaudible) it?

A: I wouldn't use that phrase, but you're going to force some very difficult tradeoffs, there's no question.

Q: Does the same go for add-ons? The ones...

A: I think that's what the Secretary was saying earlier about a zero sum budget. When we're working within the constraints of the Balanced Budget Agreement with a number that's allocated to defense that if you add in one area it's going to force a reduction in another area, and that's different from the past couple of years where Congress has indeed shifted resources into defense. Within the Balanced Budget Agreement they wouldn't be able to do that so you'd be in a zero sum kind of situation.

Q: It works out to about a 25 percent increase in procurement between the '99 budget and this year and the '01 budget in two years, from about $48 some-odd billion to about $60.

A: That's about the right number, yeah.

Q: About a 25 percent increase.

A: I think it's a little bit more than that. I think it's 27 or 28, but that's about right.

Q: Where is that money coming from?

A: It's coming from the other QDR changes, basically. The force structure and some of the changes that predated the QDR. The base closures from the prior rounds have generated savings. As the Secretary said, it's starting to hit steady state in '01, so some of those savings. There's some force reductions in the QDR, 60,000 active end strength and an equivalent number of reserves are coming out, and even 80,000 civilians coming out of the overhead accounts.

In addition to that there is some shift out of the R&D account. That really is more the normal phasing as you move programs from development into production. There's a down cycle in terms of R&D which then goes back up as the next generation. But the combination of those things are what get us up to 60.

Q: Do you feel confident about making that increase of about 25 percent in two years?

A: I want to be cautious, but I'm encouraged that we hit the first marker on the journey which is the 49 in '99. This is going to continue to be difficult, and the we're going to have to work it very hard. We worked it very hard in this budget. We won't be able to let up in the next two.

Q: Can you give us just a backdrop of where the procurement budget has been for the last few years? What's the low that we looked at in recent years going into this year's...

A: It should be in some of the backup material. It's around 40, but I don't have the exact number in my head.

Q: Of the total O&M request, can you break down how much of that is mission related versus infrastructure? Because in '96, I guess it was 59 percent of structure versus 41 percent.

A: I think that was the total budget, you're looking at some GAO figures there. Is that what...

Q: No, just O&M.

A: Just O&M? I've seen those figures for the total budget. I don't have a break yet of what the '99 O&M budget would have, in that kind of infrastructure versus forces, yet.

Q: Just to be clear on the O&M, the billion dollars the Secretary talks about, that is in addition to what was originally planned, correct?

A: Yeah. I think the way to look at it is that if you looked at the '99 column of the '98 budget you would see more than a billion dollars added, and that was for PERSTEMPO, for OPTEMPO, for spares, for maintenance. You wouldn't compare the '98 column to the '99 column because you have different end strengths and a series of things, but if you compare the '99 column in the last year's budget and the '99 column in this year's budget.

Press: Thank you.