(Note: Participants are Secretary Perry and Dr. John M. Deutch, Deputy Secretary of Defense.)
Secretary Perry: Happy holiday season to you all.
I'm going to talk about two things today. I'm going to give you a brief summary of the decisions which we made on modernization, and then I'm going to give you a statement about Bosnia, and then I'm going to take three or four questions and then I'm going to turn the meeting over to Dr. Deutch who will take as many questions as he has the fortitude to take.
Starting off with modernization. A primary goal of our budget planning this year has been to fund the readiness and quality of life initiatives which we have previously announced. Last summer, we announced that we were prepared to slow or to cancel modernization programs in order to fund readiness. We said at that time people come first. Our view as to how much cancellation or slowing we would have to do was based on the then-planned defense budget for FY96 and beyond.
Last week President Clinton announced that he planned to boost defense spending over the six-year period by $25 billion--to enhance readiness, to fund the military pay increases, to improve quality of life, and to finance some of this force modernization. This new budget top line eased some of the hard choices we had to make on modernization, but we still have to find some savings in the modernization program. We've made those decisions and I'm going to describe them to you today.
The program changes that I'm announcing were first discussed in the so-called Deutch memorandum. At the time that Dr. Deutch wrote that memo, the Pentagon anticipated that the cuts in modernization could be as high as $20 billion. But the President's decision and new inflation assumptions have made our job much easier.
The savings I'm announcing today are much less--particularly the $7.7 billion in previously planned modernization spending over the next six years.
These cuts, we believe, are prudent, and they will not interfere with our efforts to develop the new wave of weaponry needed for the 21st Century.
Specifically, the decisions are: first, to cancel the Tri-Service Standoff Attack Missile. This system has had significant development problems, and current estimates of the unit cost in production are unacceptably high. That made it, then, a very logical candidate for cancellation, and we're doing that.
Secondly, we're restructuring the Army's Comanche helicopter program. We will complete the development of the Comanche and we will build two flyable prototypes, but the budget we're submitting here has no production funds for Comanche in it. We will depend on the Apache Longbow system to provide the capability for the near to medium term.
The third decision was reduce the construction rate of the DDG-51 Aegis program from 18 over the six-year period to 16.
Fourth, we are delaying the start of a third new attack submarine by one year. The building of that sub then is going to start in fiscal 2002 rather than 2001 as previously planned.
We're going to produce the V-22 Osprey to meet both Marine Corps and Special Operations lift requirements. This will mean there will be slightly fewer planes for the Marines over the next six-year period, but we are going ahead with the V-22 production program.
We are delaying the development of the Advanced Amphibious Assault Vehicle by two years. This will allow us to replace the Marine Corps existing fleet after the turn of the century.
We're going to reduce the FY96 R&D spending on the F-22 fighter by ten percent. This is going to have only a marginal impact on the program because we do have some existing funds from previous years that will be available.
Two programs that were mentioned in the original memo, the Army's Advanced Field Artillery System and the JPATS--the Joint Primary Aircraft Training System--will not be changed at all.
We believe that these adjustments are acceptable, they protect our technology base, and they allow important force modernization programs to continue at a rate that we can afford. And they do provide the necessary savings which help us increase funding for readiness.
Let me go from modernization to talking about Bosnia.
Early in this Administration, President Clinton made a policy decision like President Bush had made before him. That decision had two components. First was not to send military forces to participate in the Bosnian war as a combatant. Secondly, not to send U.S. military forces to participate in UNPROFOR--the UN peacekeeping mission in Bosnia--until such time as a peace agreement is reached. That policy decision, those two components, still stand.
In the mean time, however, a question has arisen. If the UN requests NATO to participate in an extraction of UNPROFOR--the UN forces in Bosnia--will the U.S. participate and will we participate with ground troops?
My recommendation to the President on that, which recommendation was shared by Secretary Christopher and National Security Advisor Lake, was that we should agree to do that. We have always participated in NATO operations. Indeed, we've always participated in a leadership role. I saw no reason to make an exception to this operation. If we did make an exception, it would seriously weaken NATO and it would certainly destroy our position as a leader of NATO. So that's what we recommended to the President, and that is what the President agreed to.
At the same time, he is reaffirming our policy of not participating in the war as a combatant, and not participating in UNPROFOR until, or unless, a peace agreement is signed. That policy has not changed.
The question has further arisen as to what forces are likely to be needed for this extraction operation. For the last month or so, NATO has been doing a detailed study on the various contingencies which they might face in extraction and the forces that would be needed to meet those contingencies. I will be reviewing the study in some detail with NATO Defense Ministers in the coming week.
Monday morning, I'll be meeting here in Washington with the French Defense Minister, Francois Leotard. Tuesday afternoon, I'll be meeting with the British Defense Minister, Malcolm Rifkind, and the NATO Secretary General. Wednesday, I'll be meeting with all of the NATO MODs that have ground forces in UNPROFOR, and we will be reviewing in some detail the NATO plans and expressing our judgment about how they should be executed.
I might also mention that Friday I will be in Moscow on this trip, and I will review these plans with Minister of Defense Grachev when I'm in Moscow.
I do want to emphasize that at this time, NATO has not been requested to supply those troops. That is, UNPROFOR has not made a decision to leave, and we hope that UNPROFOR will continue to stay. We believe they're performing a valuable mission.
I also want to emphasize that NATO does not have a single plan of action. They have prepared several different contingency plans. Which one will be used will depend on a specific situation that existed at the time a request would be made.
Finally, that U.S. participation--if NATO is called upon, U.S. participation will be based on a careful review of the specific plan that is being considered, and we would do this with full consultation with our Congress.
With that opening comment, I'm happy to take your questions.
Q: Can you give us your assessment of how likely such an extraction operation is to take place, and what your assessment is of the threat that would be posed to U.S. troops, and any sort of range of numbers of U.S. troops that might be involved?
Perry: I'll have a better position to giving you a judgment on that next week. I did talk yesterday with the British Minister of Defense who had just returned from Bosnia where he had met with the UNPROFOR forces there. His judgment, when I talked with him yesterday, is that UNPROFOR continued to perform a useful mission; UNPROFOR continued to be viable; and he was in favor of continuing the UNPROFOR mission--until or unless some events happen which made it not useful or not viable.
So it's entirely possible that UNPROFOR will not be pulled out, but that's a decision that's going to be made by the UN and is going to be largely influenced by the countries that have the troops on the ground there. It will not be a U.S. decision.
Q: Mr. Secretary, how likely, in the event of a pull out of UN forces, is there that increased NATO bombing will then be begun in order to protect civilian enclaves and perhaps bring the fighting to an end?
Perry: If UNPROFOR is pulled out, the immediate imperative and the immediate action that should be taken would be a reinvigorated diplomatic approach designed to achieve a ceasefire, designed to reach a negotiated settlement, and also it would give us an opportunity to propose a build-down of the military forces in Bosnia now--particularly the heavy equipment and the armored equipment. If that negotiated settlement--if that ceasefire were not to be agreed to, then there would be more flexibility in the future for applying military leverage than there is today.
Q: Has there been any indication thus far given to NATO or to UNPROFOR that the combatants will welcome this extraction or will allow a situation where this extraction and cover by our military is not necessary? Secondly, has this policy announced yesterday yet helped the position of the UNPROFOR troops, especially those being held or detained? Have you seen any indications from the Serbs especially?
Perry: Two comments on that. The Bosnian-Serbian government has stated that if UNPROFOR decides to leave, that they would not interpose any objection to it: they would not try to stand in the way, provided they took their equipment with them. They did not want the equipment to be left behind for the Bosnian government. I'm simply repeating to you a statement made by the Bosnian government.
Secondly, we did receive a report yesterday that the--I talked with the Canadian Defense Minister yesterday, and he told me that the Canadian UNPROFOR troops which were being detained, were released yesterday. So that was one change. I don't know how to relate that development to the announcement, but they did happen in coincidence with each other.
Q: Have you set any political guidelines as to what proportion of any rescue force the U.S. would be prepared to put up? Secondly, if UNPROFOR does pull out, do you anticipate that the U.S. Air Force would have to pick up the slack in terms of providing extra relief supplies that are now being done by UNPROFOR ground convoys?
Perry: We have not set quantitative guidelines at this stage. That's something that will be set in the course of the next few weeks, I would think. But we are prepared to participate fully and as a leader in this operation, and therefore, I expect we'll have a substantial percentage of the total. Particularly considering that some of the other countries involved already have troops on the ground there. I see this as a NATO operation where NATO takes over command and control of the entire operation--both the troops that are brought in and the troops that are already there. So this will involve a significant commitment of the U.S. We're talking not about many divisions, but certainly about several brigades of commitment in most of the more difficult scenarios.
I am clear on one point, which is, if we go in on this operation--NATO goes in on this operation--we're not going in with a token force. We're going to go in with a strong enough force that will command respect. It's my judgment that is the best way of avoiding problems: is having a strong enough force that nobody sees it as an inviting target. By strong enough, I'm talking not only about numbers but in the kind of armament and weapons they will take in with them.
On the question of the air relief supplies, it's entirely possible that we will have to increase sending in supplies by air if UNPROFOR pulls out. Because one of the primary functions UNPROFOR has been providing is allowing the convoys--the ground convoys--to take relief supplies to the cities. So with the departure of UNPROFOR, it is entirely possible that it will be much more difficult to get those relief supplies to cities. In that case, we may be asked to provide more air support, more airlift.
Q: The Bosnian Serbs are now saying that there will be no further airlift of humanitarian supplies until NATO suspends its no-fly zone surveillance of Bosnia. How do you view that? Do you accept that? Do you reject it? Secondly, does the Administration plan to see a vote from the U.S. Congress or simply to consult on the issue as we move down the pike on this, if there is a commitment of American forces?
Perry: On the first point, I reject the Serbs' unilateral assertion that they would not allow airlift unless we stop the Deny Flight operation. That will be an item of lively discussion at the NATO meeting next week. Secondly... The second question was again?
Q: Will you seek a vote in the U.S. Congress on any aspect of this, or will you simply be consulting at a high level?
Perry: We will have full consultation with the Congress on this. At high levels and at committee levels.
Q: You said earlier that the President maintains the position that the United States forces should not serve as combatants on the ground. But if they get involved in a hostile situation, how can they avoid being in a combatant situation?
Perry: I said we are not entering the war as a combatant. We're not taking sides to help one side or the other win the war. But if we go in on an extraction operation and if our forces are attacked by whomever, they will be conducting a combat operation and they will be equipped and prepared to, not only conduct, but to conduct with overwhelming power, overwhelming force, whatever mission they have. We will be prepared for combat operations if we go in.
Let me make one other point in answer to Mr. McWethy's question about the consultation. We have already begun the consultation. We have contacted all the leaders in Congress on this. I have personally talked with four of the senior leaders in Congress--all four of whom, I might say, were very supportive of this move.
Q: Can I clarify one point you made about the command of any possible extraction operation? Are you saying that, once such an extraction operation were to take place, that the UN troops that are part of NATO countries--members of NATO countries--would take off their blue helmets or blue berets and put on their NATO hats and become part of the NATO mission?
Perry: No. I'm saying that the command and control of the operation would be integrated for the purpose of the extraction operation, and that all of the forces there, in my judgment, would be under the command and control of the NATO commander. I'm not going to turn the podium over to my friend, Dr. Deutch...
Q: Could we just clear up one more thing, if I may? Senator Dole said yesterday that if the mission is brought about, that the UN--UNPROFOR--should have no say-so whatsoever in the command of this mission and that once NATO troops are on the ground--because of the way UNPROFOR has acted in the past--it should not make any decisions on air attacks or anything. How do you feel about that?
Perry: The same statement I made before. In order to conduct this operation in a smooth, clean, well organized way, it needs to have a single unitary line of command, and that command should be in NATO, and the commander of the operation, the entire operation, should be a NATO commander, in my judgment.
Thank you. John?
Secretary Deutch: I'd be happy to take any questions on the modernization issue.
Q: Why did OSD allow the Army to go ahead and restructure what was once called the quarterback of their digital battleship, the Comanche helicopter? And on the DDG-51. The Navy had set up three per year, as you know, to maintain two shipyards. Does the new production schedule maintain two shipyards?
Deutch: We believe that the new production schedule will certainly maintain two shipyards. And the action has been taken with an eye towards the industrial base, and not intended at all to impair the viability of the shipyards. We believe they can adjust to this reduced business.
With respect to the digital battlefield of the Army, we're strongly supportive of that. But as Bill Perry mentioned, the emphasis on readiness and people has led us to look at many of our modernization programs that are important and good modernization programs, but [are] those that can be delayed in order to pay for the readiness and people programs. That's happening, and that's the case for production of Comanche.
Q: On TSSAMs. PGMs were one of the critical force enhancements in the Bottom-Up Review force--one of the things that got you to two nearly simultaneous. TSSAM has been specifically touted as the most silver of bullets because of the low observability capability. Could you address what backfill the role of TSSAM is going to play, and specifically, has the requirements for low observability and PGMs changed, or...
Deutch: TSSAM is a silver bullet. The problem is, as Bill said, it's become too expensive a silver bullet. The unit cost has risen very many multiples of what the initial design was. We still see that there is a military requirement and a technical opportunity for a standoff cruise missile of high accuracy and low cross-section. Eventually we will have to go back and acquire that capability, but at lower unit cost than TSSAM was going to provide.
Q: Dr. Perry said this wouldn't interfere with weapons modernization programs at all. Yet in the Bottom-Up Review a number of these programs are, in fact, mentioned as critical to meeting the requirements. How do their cancellation or delay affect your ability to meet the Bottom-Up Review...
Deutch: Of course reduction in these modernization programs does affect the modernization programs for the services. As I've mentioned already, they are good programs. The reductions are much less than they would have been if we had not had that addition the President announced last week. But our first priorities are people and readiness, and that is key to the Bottom-Up Review. In the next five or six years we must be prepared to have ready forces that are able to fight wherever they may be called upon in the world. So this is an issue of priority.
I'm also pleased that in the out years there is a considerable growth in real budget authority made available by the Presidential add which will allow us to go back to recapitalize and modernize where possible towards the end of the century.
Q: Is TSSAM canceled immediately or after development of a prototype? Second, what are the overall implications here for the defense industry? What message you conveying to the defense industry?
Deutch: The decision here is a program termination. I think the precise contractual consequences of that have to be left to the Air Force to manage. They are the program managers. We do not foresee continuing--at least, our instructions do not say in order to complete development in the case of TSSAM, unlike the case of Comanche where we are very eager to get the technology benefit of the completion of the two fly-away Comanche prototype helicopters.
The message for the industrial base is the same message that's been true since the beginning of this drawdown, all the way back to 1989. The reduction in the defense budget will mean, necessarily, a smaller procurement of weapon systems and, by inference, a smaller defense industrial base. I don't think there's any qualitatively different message here than there has been. I do think that it's important to note that these modernization reductions are less than they might have been if we hadn't had the benefit of President Clinton's add.
Q: Speaking of that add, the President's announcement last week marked the third time since the beginning of this Administration that you all had to go back and get more money to basically support the Bottom-Up Review program. Two questions. Doesn't that lend credence to the criticism that the Bottom-Up Review has been underfunded? And number two, why should we have any confidence that you won't be up before us again next year saying we need more money for readiness or anything else?
Deutch: I think the straight-forward way to interpret the President's decision to add money for the third time is that the President supports the defense program, and is going to provide what is necessary to fund that program and to maintain high readiness. The fact that we had a shortfall was known from the point in time that we presented the Bottom-Up Review. And the President, at that time, decided to put off last year, until this year, what to do about that shortfall in the funding.
We believe that the combination of the add that the President made--the more favorable economic assumptions, these modernization reductions that are being announced today--the combination of those three measures do, indeed, provide the necessary funds to fund the Bottom-Up Review. Let me also say that if we see--if the military commanders feel--the Secretary sees a shortfall in readiness or any other change that would impair the strategy we're under or the readiness of our forces, we will come back ad say that we need more money. But presently, we believe this is a adequate planning base for the multi-year period.
Q: On the TSSAM, is it your intention to go back to the drawing board and start from scratch with a new competition? Or to turn to something which may be an 80 percent solution already resident in some other system?
Deutch: We would plan to start afresh.
Q: Yesterday, we were briefed about the force consolidation for the Army. And I just want to ask if the present time table, especially for reducing our strengths in Europe--I think by 10,000 was mentioned--if the time table is correct for the circumstances that exist in the Balkans at the present.
Deutch: We believe that, in general, the Bottom-Up Review map for drawdown of the end strength of the different services remains the right planning base. The actions taken by the Army we think are consistent with that plan. The ability to handle anything which comes up in Bosnia, as Bill discussed before, is certainly provided for by the combination of the mobile Army forces we have here in the United States and the forces which are in Europe.
Q: Senators Warner and McCain have identified what they say are $8 billion in wasteful and unneeded programs. Have you had a chance to look at that? Is there a possibility you would follow through on their recommendations?
A second part, have you consulted with Congress on this modernization review? Do you anticipate having some changes as a result of the Republican majority there?
Deutch: Let me answer the last question first. Yes, we have talked with members of Congress about what our plans are: both the menu of reductions which was presented initially in August in the Perry memo, the menu... (Laughter) The menu of those reductions has certainly not changed, it was there before. The actions that are taken are the actions that Secretary Perry and I believe were the best actions to take irrespective of this election.
Q: How about the McCain and Warner recommendation? Have you had a chance to look at that?
Deutch: I've looked at it. I'm not presently... I can't give you a thoughtful reply to it. We don't think, though, the characterization of that magnitude of wasteful programs is an accurate representation of what Congress has voted for in the past year.
Q: Can you give an explanation on the new attack submarine program? There's some confusion between what Dr. Perry said and what the statement here says. When is the first production submarine under the new program?
Deutch: The new attack submarine, the first submarine, would be authorized in '98. The original--what was in the program before this decision was announced was a sequence of the first of the new attack submarines in '98; the second in '00; and the third in '91. What we're saying is we're changing that production schedule for the new attack submarine to '98, '00 and then '02. One every other year I believe is what that corresponds to.
Q: One a year?
A: One every other year, I believe that corresponds to.
Q: Is there one in `96? Is says `96.
A: I haven't seen what it says.
A: Is that just the last Seawolf?
Q: It's the last Seawolf.
Q: Last summer you, in your memo you indicated a possible elimination of the V-22 Osprey. What changed your mind?
Deutch: I've spent a lot of time on the V-22 Osprey, and I'm personally convinced that that airplane will provide an entirely new set of technical opportunities both for the Marine Corps and for the Special Operation Forces. I think what was a matter of concern to all of us was the cost per aircraft compared to some of the helicopter alternatives.
I've become convinced, as have others in this department, that the capabilities provided by the V-22 will not only meet the medium lift requirements of the Marine Corps to replace the aging CH-46 helicopter, but also is going to provide a new dimension in mobility and technical capability for the Corps, and for the Special Forces which I think is going to have a very, very significant affect on their capability over time. So I'm a particular advocate of this production decision.
Deutch: Yes, I think it has, in large measure. Of course, all of these decisions are subject to scrupulous technical management for them to be successful. And if we see a management problem, we will adjust the program accordingly, and that's an important reservation that should always be remembered.
Q: It was mentioned that without Comanche, that role would be filled by the Longbow. Does that mean that that Kiowa Warrior will not take any part of that mission? A second question is, of the $4 billion that still has to be accounted for, do you have any idea what accounts that will come out of?
Deutch: The answer to the first question is that I think the Apache Longbow you've pointed to is one of the systems available to the Army and one that we think is quite capable. We certainly hope that system--we expect that that system, along with the other helicopter systems--will become the bedrock of the Army for the next several years.
The other account question. Really here we're talking out of a $250 billion budget when we do budget scrubs, and we have changed circumstances. That was in the level, over a five-ear period, where we can easily take the management actions which are required to fund that money. That's certainly our expectation.
Q: Does that mean you abandoned the plan to cut $1.8 billion out of the missile defense program?
Deutch: I'm sorry. I didn't...
Q: DoD wanted to cut $1.8 billion out of the missile defense program. Is that still on the chopping block?
Deutch: No. We have tried to defend the ballistic missile defense program which we think is a good one for a number of years. We laid out a strategy for that in the Bottom-Up Review, and we hope to stick with that strategy which puts a special emphasis on theater ballistic missile defense.
Q: Can you tell us how that $7.8 billion breaks down over the next few fiscal years? The savings?
Deutch: The $7.8 billion? Which is the difference there? I'll have to get back to you. How much it is per year, yes. I can assure you that we will be okay in '96 because we're going to have to lock it up here in a week or so.
Q: The delays in the procurement that you lay out here, on the whole continues the trend of pushing off the major equipment decisions until after even the '96 FYDP. Are you still assuming that the budget is going to have to go up in real terms after the '96 FYDP?
Deutch: The budget will go down in '96, will go down in '97, and then it begins an upturn in '98. In '99, as the President announced, it will be one percent real growth in the budget in those out years after that. What we will have to see is that trend is necessary for meeting the recapitalization/ modernization bow wave that does exist after the end of the turn of the century. That's going to have to be met by three different measures. Measure number one is some increase in real budget of the Department. We've always acknowledged that that has to be dealt with. We are putting off these modernization decisions because of the emphasis on readiness and on people. Secondly, we hope at that time to benefit from acquisition reform efficiencies, although we have yet to see those come. They have to come over time. Third, I want to point to the importance of understanding new joint warfighting capability and effectiveness. That's a way of making the military force of the future more effective at lower cost.
Q: On the programs you can see coming down the line now, how big a bow wave is there after 2001?
Deutch: Quite considerable if you imagine re-buying the inventory we have today. The point I'm trying to stress to you is that I do not think we should be thinking in those terms. We should be thinking of building a new military force of the future to meet the future needs of higher technology. You're not rebuying the same inventory and the numbers would become much smaller.
Q: On Comanche, do you anticipate funding enhancements for the Apache Longbow or some of the other helicopters to help them fill in the role? The second question on JPATS. How did you go from considering delaying production by seven years a few months ago to deciding not to touch the program at all?
Deutch: In the case of additional enhancements for existing helicopters, I think qualitatively the answer to that is, "No." With respect to JPATS, JPATS is a central capability for the Air Force especially, and later for the Navy, to train both men and women pilots in a trainer which represents much more safely and also with higher relevance to the actual modern fighters that the men and women will be fighting. I think the reason that the JPATS fighter--the JPATS trainer--came out so well was the enormous emphasis that the Air Force places on this as a way of training and maintaining in the longer run the high quality of our pilots.
Q: On Comanche, the rationale for going ahead with the cost of finishing the two prototypes, is it possible that at some point in the not indefinite future the program in more or less its current form could go back on line? Or are there substantial elements of the Comanche technology that could be applicated [sic] to existing platforms? Or do we keep it alive just so we can start on a clean piece of paper somewhere down the road?
Deutch: No, I think it's very clearly the point that you mentioned about the technology being developed there we think will have widespread application to a number of Army programs including potentially future helicopter programs. That's the principle motivation.
Q: Last week you said you wanted to keep some Navy frigates. How many, and on what schedule?
Deutch: No decision has been made on that. That's one of the things that's still under consideration here.
Thank you all very much.