OFFICE OF ASSISTANT SECRETARY OF DEFENS E (PUBLIC AFFAIRS )

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1 OFFICE OF ASSISTANT SECRETARY OF DEFENS E (PUBLIC AFFAIRS ) WASHINGTON, D.C PLEASE NOTE DATE No HOLD FOR RELEASE AT 7 :30 AM, EASTERN TIME, JANUARY 29, 1992 (703) (info ) (703) (copies ) (703) (public/industry ) DOD TO SLOW PACE OF MODERNIZATION, CUT STRATEGIC NUCLEAR ARSENA L WHILE MAINTAINING ESSENTIAL FORCE S The President's FY 1993 budget calls for a new approach i n the way the Defense Department buys major weapons systems an d keeps its forces modern, while maintaining a military capable o f responding to regional contingencies. And the President' s FY program includes changes to the US strategic nuclea r program, beginning to move the US away from a relationship o f nuclear confrontation with the republics of the former Sovie t Union, Defense Secretary Dick Cheney said today. The administration is seeking $267.6 billion in DoD budge t authority for fiscal year 1993, $9.9 billion below the budge t passed by Congress for FY 1992 and a decline of seven percent i n real terms, adjusted for inflation. The cuts in the defens e budget go beyond the steep cuts already undertaken -- amountin g to a decline in budget authority of over one-third in real term s since The FY 93 budget submission also cuts the Department's si x year defense plan, for FY , by $63.8 billion, compare d to the six year plan presented last year for the same period. That total includes $50.4 billion in cuts to the defense progra m and $13.4 billion in adjustments required under the budge t summit agreement, based on changes in the 1991 rate o f inflation. The budget proposes FY 1993 outlays of $ billion, $9.8 billion below FY 92. Outlays for FY woul d be cut by $27.4 billion over last year's defense plan. "The national security picture for the United States ha s changed substantially since last year. The disintegration o f the Soviet Union has reduced the threat to US interests an d eliminated the urgency for producing several advanced weapon s systems," Cheney said. Many of the developments wer e anticipated in the regional defense strategy first announced b y President Bush in August of 1990, he said. (More)

2 (More Budget, ) The growing proliferation of ballistic missile capabilit y and weapons of mass destruction makes the funding of the President's program for global protection against limite d strikes a high priority for our strategic programs. Funding fo r the strategic defense initiative remains a top priority, with a request for $5.4 billion in budget authority for FY 1993, compared to the FY 1992 total of $4.1 billion. Defense budget trend s From FY 1993 through FY 1997, DoD budget authority wil l decline, in real terms, an average of four percent each year. By FY 1997, the cumulative real decline in budget authorit y since FY the year of peak defense spending -- will tota l 37 percent. Budget authority for FY 1997, adjusted fo r inflation, will produce about the same buying power as the defense budget and only slightly more than that of the post - Vietnam drawdown defense budgets of Defense outlays as a share of the US gross national produc t are expected to fall to 3.4 percent in FY 1997, well below an y time since before World War II. In FY 1997 defense outlay s should be down to 16 percent of total federal outlays. While defense spending has been shrinking since 1985, domestic spending has been growing -- going up by about the sam e rate at which defense spending is going down. By FY 1997, the cumulative real decline in defense outlays since FY 1985 will b e 26 percent. Mandatory federal spending will increase about 3 3 percent in real terms over the same period, and domesti c discretionary outlays will increase about 8 percent. New approach to acquisition The disintegration of the Soviet Union has reduced th e military threat to US interests, making the need to produc e advanced weapons systems less urgent. The Department of Defens e can afford to take more time in developing and evaluating ne w technologies before making decisions on weapons production. With more reliance on its research and development efforts, th e Department can preserve the technological capability to quickl y equip larger forces if major threats to US interests emerge i n the future. While DoD will put fewer new advanced weapons systems int o production in the future, the aggressive pursuit of ne w technologies will be essential to maintaining the advantages U S armed forces need to deter and to prevail in future conflicts. A weapons program will move to full-scale production only afte r verifying the need for producing the system, and afte r minimizing technical, manufacturing, and operational risks. The Pentagon will also emphasize the upgrading of existing weapon s (More)

3 (More Budget, ) role in regional conflicts. The Gulf War confirmed th e advantage of combining precision weapons and stealt h technologies. Twenty B-2's will allow the Air Force to maintai n two squadrons while also permitting aircraft maintenance. Wit h the transformation of the Soviet threat, America's strategi c bomber force is less likely to face the sophisticated ai r defenses for which the B-2 is designated. The current strategi c force of B-lB's and B-52's can be adapted to ensure adequat e capabilities for strategic nuclear and conventional missions. Stealth technology remains a key advantage for U.S. forces, an d the Department will initiate vigorous exploration of improve d stealth technologies. Total B-2 program adjustments will sav e $14.5 through Minuteman III ICBM. To help compensate for the terminatio n of the Midgetman small ICBM, DoD will fund an improved guidanc e system for the Minuteman III ICBM and other measures to exten d its service life, yielding net savings of $1.0 billion throug h Seawolf submarine. With the Soviet Union's collapse, th e United States no longer needs to proceed with a new class o f attack submarine. The Seawolf program will accordingly b e terminated. The existing SSN-688 submarine is among the mos t capable in the world and will serve the nation well for man y more years. DoD plans to consider a lower cost submarine desig n that will enable it to modernize in the future while maintainin g adequate submarine force levels for the coming years. DoD als o will continue to develop other antisubmarine warfare systems. These changes in the submarine acquisition program will sav e $17.5 billion through Comanche helicopter. With their focus shifted from a Sovie t threat to regional contingencies, US forces can be adequatel y supported with the existing Apache helicopter fleet, to b e upgraded with the Longbow advanced fire control radar system, OH-58D reconnaissance and light attack helicopters, and greate r use of unmanned aerial vehicles. DoD will restructure th e Comanche light helicopter development program by deferrin g production and concentrating instead on building prototypes, developing avionics, upgrading the engine, and incorporatin g Longbow. Redirecting the program will save $3.4 billion throug h Air defense antitank system. Because non-soviet air threat s to US ground forces are limited in number and capability, U S forces can maintain adequate air defense assets with existin g air defense fighters and with such defense systems as th e Patriot, Hawk, and Stinger. The Department is therefor e terminating the Army's air defense antitank system (ADATS). T o compensate, DoD will initiate development of an improve d aircraft tracking system and several advanced guidanc e (More)

4 (More Budget, ) Enforcement Act, US spending on the Persian Gulf war is treate d as an emergency funding requirement, not subject to the budge t ceilings set by Congress and the Administration. To offset these incremental costs, US allies have pledged t o contribute $54 billion. The US will not replace some types o f damaged or destroyed equipment, valued at $1.2 billion, becaus e the Department has sufficient remaining supplies. That leaves a net cost to the US for the war of $5.9 billion. Of these costs, transfers within the previously appropriate d 1990 defense budget covered $1 billion, and a supplementa l request in 1990 covered another $2.0 billion, leaving $2. 9 billion in costs for long-term personnel benefits for those wh o served in the war. Those costs will be paid in future years b y the Veterans Administration. "The war in the Gulf set a remarkable standard o f cooperation, and not only on the battlefield. It is absolutel y unprecedented that more than four-fifths of the cost of the U S part in the operation was paid for by our allies in the Persia n Gulf and elsewhere around the world," Cheney noted. As of January 1992, allied contributions to the US for Gul f war costs were $52.6 billion -- $47.0 billion in cash and $5. 6 billion in in-kind assistance. Allied payments continue, an d the remainder is expected by July Other FY 1993 Defense budget highlight s Readiness. Although the size of the US military i s shrinking, the Department of Defense is committed to ensurin g the maintenance of a fully manned, trained, and equipped force. The FY 1993 request accordingly provides the training, maintenance, and other requirements to sustain the high level o f readiness achieved by US forces over the past decade. Activ e Army ground and air training operations are kept at 800 mile s per year for combat vehicles and 14.5 tactical flying hours pe r month for air crews. Navy steaming days remain at 50.5 days a quarter for deployed fleets and 29 days a quarter for non - deployed fleets. Flying hours for active Air Force tactical ai r crews will hold at about 21 hours per month. Research, development, testing, and evaluation. Reflectin g the Department's emphasis on advanced technology research fo r application in weapons systems of the future, funding fo r science and technology -- research not tied to a specifi c weapons program -- will grow to $12 billion in FY 1993, fro m $10.6 billion in FY 1992, a real growth rate of 9.1 percent. Total RDT&E will show a 1.5 percent real growth in FY end - Please refer to the attached charts for more details on th e FY 1993 budget submission.

5 NATIONAL DEFENSE TOPLINE * (Current $ Billions ) BUDGET AUTHORIT Y DoD DoE & Other TOTAL OUTLAY S DoD DoE & Other TOTAL * Excludes Cost of Desert Shield/Desert Storm

6 DOD BUDGET AUTHORIT Y ($ Billions ) CU M , President's FY 1992 Budget Adjusted Summit Level (-13.4) Program Adjustments (Rescissjons/Supplemental ) President's FY 1993 DoD Budget * (-63.8) * Excludes cost of Desert Shield/Desert Storm.

7 DOD BUDGET AUTHORITY BY TITLE * ($ Billions ) Military Personnel O & M Procurement R DT & E Military Construction Family Housing Revolving Funds Transfer All Other GRAND TOTAL * Excludes Cost of Desert Shield/Desert Storm.

8 DOD BUDGET AUTHORITY BY SERVICE * ($ Billions ) Army Navy Air Force Defense Agencies Defense Wide Defense Medical Program - (9.1) (9.5 ) GRAND TOTAL * Excludes Cost of Desert Shield/Desert Stor m

9 Constant Dollars (in billions) DoD BUDGET AUTHORITY (Excluding DESERT SHIELD/DESERT STORM Costs ) APRIL 1989 PLA N Average Real Increase = 1.2 % per yea r ACTUAL I I I , FY 1991 DOD BUDGE T Average Real Decline = 2 % per year 1 anle 255 Real Decline fro m FY 1992 Enacted to FY 1993 = 7 % FY 1992 DOD BUDGE T A Real rage Real Decline 3 % per yea r Cumulative Real Decline : = 29 % = 37 % Average Real Decline = 4 % per yea r 21 0 FY 85 FY 86 FY 87 FY 88 FY 89 FY 90 FY 91 FY 92 FY 93 FY 94 FY 95 FY 96 FY 97

10 60 - s % % % % 23% 10 - FY 1993 = 18.0 % FY 1997 = 16.3 % I l Il l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l I FISCAL YEAR

11 % % % 4.7 % FY 199 =4.5 % 2 FY 1997 = 3.4 % 0 I FISCAL YEAR S

12 NATIONAL DEFENSE & PAYMENTS TO INDIVIDUAL S (as a Percent of Total Federal Spending ) PAYMENTS TO INDIVIDUAL S 60 - Increase to 61 % by '-O NATIONAL DEFENS E Declines to 16 % by I I I I I 1 I I l I I I I I I l 1 I I I I I I I I I I I I I 1 1 l I I

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