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IMMEDIATE RELEASE

Release No: 003-95
January 03, 1995

DEPUTY SECRETARY OF DEFENSE DEUTCH ADDRESSES THE NATIONAL DEFENSE UNIVERSITY

Deputy Defense Secretary John Deutch today called for a constructive debate on the merits of America's defense program that goes beyond the question of budget dollars.

In a speech at the National Defense University, Deutch said the question of whether enough is being spent on defense is a serious one, but it is not the only question that should be asked.

"The question of whether we're spending enough lends itself to the endless yes-we-are, no-you're-not school of political argumentation. If you ask if we're spending enough to buy what we say we need, then you might get an answer," Deutch said.

Deutch outlined President Clinton's defense program and said recent actions by the President and by Secretary of Defense William Perry were aimed at making sure the defense program in general and force readiness in particular had sufficient resources.

Readiness has already become a hotly debated issue. In the speech, Deutch additional steps are being taken to keep a closer watch on readiness. Deutch chairs the Senior Readiness Oversight Council. He said he has asked Admiral Bill Owens, vice chairman of the Joint Chiefs of Staff, to continually assess the overall readiness of U.S. forces and report monthly to the council.

"On average, we are providing more readiness dollars per active duty unit than was true in the past. I say that because our force structure is declining but our spending on readiness related operations and maintenance is increasing," Deutch said.

But the deputy secretary noted that readiness isn't managed on averages, it is managed by the ability of units to meet their assigned missions. Thus, he said, Secretary Perry assigned the additional duty of monthly readiness assessments to the Senior Readiness Oversight Council.

Deutch's text, as prepared for delivery, reads as follows:

"Do We Have Enough Money for Defense"

The Hon. John Deutch

Deputy Secretary of Defense

The National Defense University

January 3, 1995

Today, I would like to address the question "Are we spending enough on defense?" It is a question that we shall hear frequently from the new Congress. And it deserves to be considered seriously. Nothing is more important to our country, our allies and to peace in the world than to assure that we have made adequate provisions for the National Defense.

But are we spending enough is not the right question to ask first if we are really interested in the answer.

If we are really interested in getting this right, the questions should be something like this:

What are our defense needs?

Do we have the right program and force structure to support these needs?

Do we have the right priorities?

And if we are right, then are we providing enough resources?

Put another way, the question of whether we're spending enough lends itself to the endless yes-we-are, no-you're-not school of political argumentation. If, on the other hand, you ask if we're spending enough to buy what we say we need, then you might actually get an answer.

Today, I propose to take this second road. I want to address this issue in two steps: First, I want to present briefly the broad outlines of the Administration's Defense Policy and how we think about force posture, readiness, and modernization programs that support that policy. Then I would like to deal with the debate that has been conducted about this policy, most of it dealing with money.

The basis for the Administration's Defense Policy is the "Bottom-up Review" commissioned by Les Aspin when he became Secretary of Defense at the beginning of this Administration. The purpose of the "Bottom-up Review" was to determine how to deal with the new threats of the post Cold War world. To determine what strategy we needed and to determine the force structure needed to support the strategy.

There are three elements to that strategy:

First, the Soviet conventional threat to Europe has disappeared. This was the threat that dominated our force structure planning. It is gone. What do we need conventional military forces for? There are unstable and hostile areas in the world where vital U.S. interests could be threatened. U. S. military involvement cannot be ruled out in these regions. The two most prominent possibilities are major conflicts in South West Asia and in the Far East. Therefore, we must be able to deal with these kinds of Major Regional Conflicts. And we must have sufficient forces to deal with them, "almost simultaneously." This is necessary because we must have sufficient residual forces to deter the opportunistic launching of a second conflict when we are already involved in the first Major Regional Conflict.

The second element of the strategy is to meet the new dangers that have emerged in the post Cold War world that require capabilities possessed by our defense forces. The important examples are:

Preventing the spread of weapons of mass destruction, as in North Korea.

Various Peace Operations, as in Somalia, Haiti, and Bosnia

Humanitarian assistance as in Rwanda

Counter-drug activities, especially in cooperation with our neighbors in Latin America

Third, while the geo-military landscape has changed dramatically, there remains a formidable residual nuclear capability with four of the states of the former Soviet Union -- Russia, above all, Belarus, Kazakhistan and Ukraine. The United States has a major interest in reducing the threat posed by these nuclear weapons, and in using new, cooperative efforts to do so -- cooperative efforts made possible by the end of the Cold War.

Clearly, this is an ambitious agenda and we know intuitively that it requires considerable forces that are reconfigured and trained to deal with situations much different from stopping Soviet armor from flowing across the German border through the Fulda Gap.

To find out what we actually needed, during the Bottom-Up Review, civilian analysts and military analysts of the Joint Staff carried out cooperatively analysis of force structure requirements. This thorough-going analysis concluded that a smaller force structure could carry out the strategy. Indeed we are planning for a drop of approximately 40% in active duty Army, a reduction of 25% in Air Force fighter wings, and a reduction from a Navy of almost 600 ships to about 350 ships between 1989 and the end of the century.

Both this strategy and the force structure have come in for some criticism. From the left, we heard that it was unnecessary to prepare for two nearly simultaneous conflicts. From the right we heard some criticism that the force structure was inadequate to execute the strategy.

I submit to you today that these are basically settled questions. Most believe that the two Major Regional Conflict strategy is a prudent, appropriate response to these uncertain and unstable times. There is more discussion about whether the force structure is big enough for the strategy, but here, too, I believe most think our forces are adequate if we are careful about how we use them.

The core debate is over whether we are spending enough for defense; whether we have cut too much too soon, as one formulation has it.

It is certainly true that this smaller force structure costs less money. The budget of the Department has fallen, in real terms, from a high in FY85 of about $390 B per year to its current level of approximately $250 B per year. The American tax payer had a correct expectation that the disappearance of the Soviet threat should mean some savings in the defense budget.

But the size of our defense budget is not determined solely by the size of our forces. A major portion of the defense budget is devoted to the need to maintain ready forces. Force structure that is not maintain at a state of readiness appropriate to its mission is ineffective.

We don't buy an aircraft carrier, an Army division, an Air Force wing, put it on the shelf and expect it to be ready to fight when needed. We have to pay for training, for exercises, for fuel and ammunition, for repair and maintenance. We must also take care of families and provide a decent quality of life to our men and women in uniform. We have to pay for a whole host of things that make up force readiness.

The reason that the defense budget savings are not larger today has to do with the need to preserve readiness. In all past periods of U.S. history when military draw downs have occurred -- after World War I, World War II, and the Vietnam, war -- the draw down in force structure has been accompanied by a reduction in the readiness of the remaining forces. In times of draw down, force structure has been protected at the expense of readiness.

President Clinton and Secretary Bill Perry have made it clear that this is not going to happen today. Why? Simply put, the security threats that confront the United States do not allow us to have unready forces. And they especially don't allow us to have unready forces at the lower active duty force strengths we are planning.

Events have made it clear beyond question that this is the right policy. During this past year, we saw the possibility of a major regional conflict with Iraq and with North Korea. Significant U.S. forces have been involved in peacekeeping activities in Haiti, Rwanda, Bosnia, and Somalia. As we meet here today, approximately 50,000 U.S. forces are involved in military operations somewhere around the world. We cannot afford forces that are not ready to do their jobs.

I believe just about everyone agrees with this proposition. The need for readiness isn't an issue. What has been at issue in the debate is whether we are maintaining it. Let me address that now. First, I'll speak to some general propositions about readiness.

It should be said that we inherited a sound basis for readiness from our predecessors. They gave us a ready force. We have maintained it.

When we took office, we made readiness our Number One priority as a matter of policy. For the first time, we wrote into the department's Defense Policy Guidance that readiness comes first. When there are conflicts with other spending priorities, readiness comes first -- it's down in black and white.

Secretary Perry also created a Senior Readiness Oversight Council to keep readiness policy and long-term issues before the department's chief policy-makers. I chair that council.

What this has resulted in is a very high level of support for readiness. I would stress that -- on average -- we are providing more readiness dollars per active duty unit than was true in the past. I say that because our force structure is declining but our spending on readiness related operations and maintenance is increasing.

But, we don't manage readiness on the basis of averages. Some units are designated to deploy promptly in response to contingencies and other units are designated to be reinforcing. We maintain a staggered system of readiness and our first readiness priority is given to the prompt response forces. Each Service manages the readiness system in a slightly different way and the Joint Staff continually appraises "joint" readiness from the viewpoint of the CINCs.

At the same time, I have to admit that even with all this attention and support, things can go wrong. For example, during Fiscal Year 1994, we did not submit and Congress did not grant a budget supplemental to cover the Service Operation and Maintenance accounts that we depleted by the contingency operations that occurred late in the fiscal year, i.e. the Haitian and Cuban migrant operations. The inevitable result was that funds were taken from later deploying units and their readiness suffered. You may have read or heard that three Army divisions recently fell below peak readiness and that two wings of Naval Air, coming off deployment, had restricted flying hours. These were not our first-to-go forces, but even so, it's not acceptable.

Therefore, Secretary Perry has directed the Senior Readiness Oversight Council take on the added responsibility of reviewing monthly readiness indicators from the services. And I have asked Admiral Bill Owens, the Vice Chairman of the Joint Chiefs of Staff, to take on the job of collecting this material and assessing overall readiness of our forces to fight. Each month, the Senior Readiness Oversight Council will review the Service and CINCs readiness status and take appropriate action to remedy deficiencies that are found. No system can afford or should maintain all its systems at 100% ready. What is needed is a responsive appraisal system that keeps track and adapts quickly.

And we intend to fund fully optempo and training, reduce maintenance backlogs, and stop the deterioration in real property maintenance that has been growing for several years.

In Fiscal 95 and the future we are going to be much more aggressive about assuring that unplanned contingency costs do not adversely affect readiness. In particular, we are going to seek budget supplementals for all military and peacekeeping activities that have not been accounted for in the budget. This is necessary to assure that paying for these contingencies does not draw down funds from training, maintenance, and base support that are essential to readiness.

We must resist the temptation to measure support for defense by how much money is being spent on readiness. We have a system of staggered readiness where units -- divisions, ships, and air squadrons -- are maintained ready according to the plans of the Joint Chiefs of Staff for deployment in a time of crisis. Money need not be spent to maintain all units at equal readiness, rather units must be maintained at a level of readiness appropriate to the military mission the forces may confront.

People are essential to an effective and ready force. President Clinton and Secretary Bill Perry stress this point. It leads us to place emphasis on both military pay for our women and men in uniform and for programs that contribute to the 'quality of life' of those who serve in the Armed Forces. Quality of life programs address housing, child care, benefits, morale, welfare and recreation and all those efforts which contribute to making the life of those in the Armed Services bearable wherever they may be stationed.

These elements -- the strategy, the force structure and the readiness policy -- comprise the answer to the first question -- what do we need for our defense? Now we can ask the next question -- are we providing the resources to buy it? Are we spending enough?

I want to make clear that Bill Perry and I believe that the answer today is yes.

That has not always been true in the past and we have candidly discussed it. In September, for instance, I testified in the Senate that our program was underfunded by some $40 billion plus over a six-year period. There were a number of elements contributing to this estimate of underfunding, including our inflation assumptions. We have been conducting discussions for months within the Clinton administration about how to deal with the budget requirements for defense.

The issue was always how to afford the program we needed, not how to need the program we could afford.

The President gave us an answer last month. He ordered $25 billion added to the defense budget over six years to make sure we have a ready force, to make sure our men and women in uniform have the quality of life improvements they need and the salary increases they deserve, and to make sure we can afford our overall program.

New economic assumptions about inflation further reduced the gap, by roughly $12 billion over the six year period. We also announced last month reductions in some lower priority weapon system purchases in the near term in order to provide approximately $10 billion additional support for readiness. All this amounts to a strategy that puts people and readiness first, ahead of systems.

However, we must recognize that some modernization and, eventually, a great deal of recapitalization of existing airplanes, ships and tanks will be necessary as these systems reach the end of their useful life. The President's $25 billion addition, which has been criticized as being 'back end loaded' to the later years of the six-year planning period, actually provides the 1% real growth in the defense budget when the modernization and recapitalization expenditures are most needed.

In sum, the President's program provides the resources required to fund the Bottom-up Review and the defense strategy it encompasses. Generally, we believe the readiness and war fighting capability of our troops is very high today. This readiness depends crucially on the professional capability of our fighting women and men and this is why Bill Perry has insisted on initiatives to improve the "quality of life" and the military pay of our soldiers, sailors, airmen and Marines.

The best indicator of how ready our forces are is the incredibly high performance they have demonstrated in Haiti and in the recent deployment to Kuwait to meet Saddam Hussein's threat.

We have the best military in the world today supporting the right strategy for the times. President Clinton has demonstrated he is committed to keeping it that way.

Thank you.