Association of the Unite States Army. Army Budget. Fiscal Year An Analysis. May Institute of Land Warfare

Association of the Unite States Army Army Budget Fiscal Year 1995 An Analysis May 1994 Institute of Land Warfare

Association of the United States Army Army Budget Fiscal Year 1995 An Analysis May 1994 Institute of Land Warfare

COMPILED BY THE STAFF OF THE AUSA INSTITUTE OF LAND WARFARE May 1994 Reproduction of this report, in whole or in part is authorized with appropriate acknowledgement of the source. ASSOCIATION OF THE UNITED STATES ARMY 2425 Wilson Boulevard, Arlington, Virginia 22201-3385 (703)841-4300

CONTENTS GLOSSARY... vi INTRODUCTION...... vii THE FEDERAL BUDGET... 1 General.... 1 Framework for Defense... 3 THE DEPARTMENT OF DEFENSE BUDGET... 5 General...... 5 Formulation of the FY 1995 DoD Budget.... 6 Budget Numbers...... 6 Bottom-Up Review (BUR)... 7 Force Structure and Manpower... 7 Manpower... 8 Readiness... 8 Modernization... 1 0 RDT&E... 11 Procurement.... 12 Ballistic Missile Defense... 13 Strategic Mobility... 14 Military Construction and Family Housing...... 14 Other Budget Considerations........... 15 Environment... 15 Infrastructure and Base Closures... 15 Acquisition Reform... 16 Masking Defense Costs... 16 Key Factors Affecting Future Budgets:... 17 Roles and Missions Commission... 17 Future Years Defense Program (FYDP)... 17 Defense Outlook...... 18 THE ARMY BUDGET... 19 Army Budget Trends and Patterns..... 19 Army Budget Breakout for FY 1995... 21 Strategic Construct.... 21 Structure... 22 Manpower... 25 Drawdown... 25 Pay Costs... 26 Recruiting...... 27 Training...... 27 Readiness.................. 28 Operation and Maintenance (O&M)... 28 iii

The Legacy of FY 1994... 29 O&M fo r FY 1995... 29 Modernization... 30 Procurement.... 31 Aircraft... 33 Missiles... 34 Weapons and Tracked Combat Vehicles (WTCV)... 35 Ammunition... 37 Other Procurement Army (OPA)... 38 Research, Development, Test and Evaluation (RDT &E)... 40 Military Construction and Family Housing... 42 Military Construction... 43 Family Housing... 43 Strategic Mobility.... 44 Other Budget-Related Items... 44 Chemical Demilitarization...... 44 Environment... 45 Infrastructure and Base Closures................. 46 Reserve Components Summary......... 46 U.S. Army National Guard... 46 U.S. Army Reserve...... 47 Additional Notes on the Army RC Program... 47 An Assessment of the Army Budget.... 49 APPENDIX I Budget Terms... I-1 APPENDIX II FY 1995 Army Budget Summary/Appropriation... II- 1 Operation and Maintenance Army Budget Summary Data... II- 3 Procurement Budget Summary Data...... II- 5 Research, Development, Test and Evaluation Army Budget Summary... IT-10 TABLES 1. Outlays, Receipts and Deficits... 1 2. National Defense Topline... 5 DoD FYDP vs. Topline... 6 4. Budget Authority by Title... 6 Budget Authority by Pay and Nonpay Categories... 6 6. Force Structure... 8 7. Operational Training Rates... 9 3. 5. 8. RDT&E Profile for FY89 to FY95... 11 9. Selected Programs RDT&E... l1 10. Selected Procurement Programs... 12 11. Ballistic Missile Defense... 13 12. National Defense Sealift Fund... 14 13. Military Construction and Family Housing... 15 iv

14. Army Budget Summary... 19 15. Total Obligational Authority Summary... 21 16. Combat Force Structure... 23 17. A Shift to CONUS... 23 18. Army End Strength... 26 19. Army Military Personnel Costs... 27 20. Army Operation and Maintenance... 29 21. Procurement Summary by Appropriation... 32 22. RDT&E Summary by Budget Activity... 40 23. Army Military Construction... 43 24. Army Family Housing... 43 25. Chemical Agents and Munitions Destruction, Defense......... 44 26. ARNG Budget Summary... 46 27. ARNG Force Structure and Manning Highlights... 46 28. USAR Budget Summary... 47 29. Army Reserve Highlights... 47 FIGURES 1. FY 1995 Federal Outlays... 2 2. Domestic Discretionary, Defense and Mandatory Outlays... 2 3. Defense Outlays as a Share of GDP... 3 4. Defense Outlays as a Share of Federal Outlays... 3 5. 1995 DoD Budget by Service...............? 6. DoD Manpower Levels... 9 7. Procurement Profile... 12 8. Army Real Growth Trends FY70-FY95... 20 9. Army Dollar Resource Trends... 20 10. Army Program Balance... 21 11. Force Closure Timeline... 22 12. Division Stationing by the End of FY95... 24 13. The Army Engaged (as of April 1994)... 24 14. Army Active Component Personnel Strength FY93-99... 25 15. Army Reserve Components Personnel Strength FY 93-99... 25 16. Army Civilian Personnel Strength FY 93-99... 26 17. Procurement Funding Profile... 32 18. Aircraft Procurement.... 33 19. Missile Procurement.... 34 20. WTCV Procurement.... 35 21. Ammunition Procurement... 38 22. Other Procurement.... 39 23. Army RDT&E Funding Profile... 40 24. Environmental Funding (Total Army)...45 v

GLOSSARY AFAS Advanced Field Artillery System MRC Major Regional Conflict AFH Army Family Housing MSE Mobile Subscriber Equipment AGS Armored Gun System MSL Missile ARNG Army National Guard MYP Multiyear Procurement ASM Armored System Modernization NBC Nuclear-Biological-Chemical BA Budget Authority NFIP National Foreign Intelligence Program BA 1 Budget Activity 1 NG National Guard BA 2 Budget Activity 2 NMD National Missile Defense BA 3 Budget Activity 3 NTC National Training Center BA 4 Budget Activity 4 O&M Operation and Maintenance BAT Brilliant Anti-Armor Submunition OPA Other Procurement-Army BMAR Backlog of Maintenance and Repair OPTEMPO Operating Tempo BMD Ballistic Missile Defense OSD Office of the Secretary of Defense BMDO Ballistic Missile Defense Organization PAC Patriot Advanced Capability BRAC Base Realignment and Closure PIP Product Improvement Program BUR Bottom-Up Review POMCUS Prepositioning of Materiel Configured C2 Command and Control to Unit Sets C3 Command, Control and Communica- RC Reserve Component tion RCAS Reserve Component Automation CINC Commander in Chief System CONUS Continental United States RDA Research, Development and Acquisition CTC Combat Training Center RDT&E Research, Development, Test and DA Department of the Army Evaluation DERA Defense Environment Restoration ROTC Reserve Officer Training Corps Account RPM Real Property Maintenance DoD Department of Defense ED Engineering Development SAD ARM Sense and Destroy Armor EMD Engineering and Manufacturing S&T Science and Technology Development SATCOM Satellite Communications ERINT Extended Range Interceptor SAW Squad Automatic Weapon FARV Future Armored Resupply Vehicle SOF Special Operations Forces FY Fiscal Year SSB Special Separation Benefit FYDP Future Years Defense Program STARS Surveillance Target Attack Radar GDP Gross Domestic Product System HMMWV High Mobility Multipurpose Wheeled THAAD Theater High Altitude Area Defense Vehicle TMD Theater Missile Defense HIV Human Immunodeficiency Virus TOA Total Obligational Authority JCS Joint Chiefs of Staff TSSAM Tri-Service Standoff Attack Missile LAM Louisiana Maneuvers USAR United States Army Reserve MCA Military Construction-Army VSI Voluntary Separation Incentive MLRS Multiple Launch Rocket System WTCV Weapons and Tracked Combat Vehicles vi

INTRODUCTION This year's defense budget is the product of several converging thrust lines: the administration's plan to reduce military structure and costs while maintaining modem forces; the Bottom-Up Review's vision of a military strategy which could effectively handle two nearly simultaneous major conflicts, plus peacekeeping missions and missions short of war; and a total defense package within a preset but declining fiscal top line through 1999. The FY 1995 budget analyzed here is simply the first step on the way to the 1999 objective. Several major questions loom: Are the forces now projected adequate to meet the future requirements spelled out in the Bottom-Up Review? Will the dollars be made available over the next five years to meet modernization demands, even with the reduced force? While the administration contends all this can be done if assumptions hold, there are other serious challengers who say that we are simply cutting too much, too fast. There is very little slack if the assumptions are not valid or are overtaken by events, and the probability of this is very high. What is sadly lacking for proper analysis of this budget and the five-year plan that accompanies it is a clear statement of national military strategy derived from an equally clear statement of national security policy. With such statements, we could judge and debate security needs much more intelligently. What we are now using is the vision of military strategy from the Bottom-Up Review. This, by itself, lacks the depth and legitimacy to make all the important decisions that commit major defense resources into the next century. All the military departments share concerns for the future, i.e., the apparent gap between future capabilities and future mission requirements, and the uncertainty of future funding, particularly investment and modernization. The Army is particularly vulnerable in both respects. Focusing on the Army, over the next five years it will face a modernization crisis unless adequate funding is forthcoming. By all comparisons, the Army is running a poor third in relation to the other military departments. The Army's research, development, test and evaluation and procurement combined is only 14 percent of the DoD total. The adequacy of future Army forces directly depends on maintaining technical superiority; the existing research, development and acquisition (RDA) funding levels of $11 billion or less per year will not get it there. It is my judgment that about $3 billion more per year is needed to meet minimum Army RDA needs into the next century. In the meantime, Congress is debating the FY 1995 budget. Facing real uncertainties with respect to the nation's security policy and needs over the next few years, Congress should avoid making major changes or cuts in the President's budget. It should especially refrain from imposing future outlay cuts without a program rationale. This simply mortgages the future without considering the resulting force implications. May 1994 Jack N. Merritt General, USA Retired President, AUSA vii

- ----, THE FEDERAL BUDGET GENERAL The proposed federal budget for FY 1995 reflects outlays of $1.518 trillion, FY 1995 estimated receipts of $1.342 trillion and an estimated deficit of about $176 billion. The state of the national economy and deep public concerns over deficit spending are driving federal policy through the budget. The FY 1995 budget is just one segment in a series through the rest of the decade and it is necessary to look at the full fiveyear extension. This is the span considered by Congress in the Budget Resolution. The FY 1995 Budget of the United States Government with extensions through 1999 is shown in table 1. 4.4 percent and on 10-year Treasury notes at 5.8 percent; and overall real growth in the Gross Domestic Product (GDP) from three percent initially, but slowing somewhat to about 2.5 percent by 1999. These assumptions, however, are now the best bases for macro projections. How does all this affect national security and defense spending, both for FY 1995 and beyond? First, let us look at where the outlays are expected to go for FY 1995 (see figure 1 ). When Congress addresses possible tradeoffs or reductions to improve the deficit situation, the only flexible part of the federal budget over which they have direct control is that segment called discretionary spending. This is the part Congress must ap- Table 1 OUTLAYS, RECEIPTS AND DEFICITS ($ billions*) FY94 FY95 FY96 FY97 FY98 FY99 Outlays 1,484 1,518 Discretionary (550) (542) Mandatory (730) (763) Interest (203) (213) Receipts 1,249 1,342 Deficit 235 176 1,584 1,660 1,738 1,830 (544) (548) (554) (8 15) (881) (945) (1,021) (225) (235) (245) (255) (544) 1,410 1,480 1,551 1,629 173 181 187 201 *Numbers may not add due to rounding. Source: Budget of the United States FY 1995 It should be noted that the above numbers reflect no changes resulting from a new health care plan. Also, the estimates are based on certain economic assumptions which could vary, to include: a consumer price index ranging from 3.0 percent in 1994 to 3.4 percent in years 1997 to 1999; interest rates on 91-day Treasury bills ranging from 3.8 to prove and appropriate on a regular basis. Altogether, this represents about one-third of the budget today, but it is a decreasing share as mandatory costs rise. The current ratios are 35 percent discretionary, 14 percent interest on the federal debt and 51 percent mandatory. By 1999 they are expected to change to about a 30: 14:56 ratio. 1

Fig. 1. FY 1995 Federal Outlays $1.52 Trillion DEBT INTEREST 14% 17% Mandatory Spending INTERNATIONAL 1% Discretionary Spending r---- DEFENSE 18% ENTITLEMENTS 50% Source: Budget of the United States FY 1995 Discretionary spending is where the action is played, and about half of the discretionary spending in the budget is attributed to defense. Any initiatives to cut outlays overall or to beef up other domestic programs would clearly target defense and, furthennore, would be applied to defense budgets which are already programmed on a downward slope in real tenns. Trends in mandatory, domestic discretionary and defense outlays as projected through 1999 are shown in figure 2. Fig. 2. Domestic Discretionary, Defense and Mandatory Outlays 40 % Cumulative Real Changes FY 1990 - FY 1999 20 0 Domestic Discretionary Spending Increases 12% Defense Outlays Decrease 35% -20 I -40 Source: Budget of the United States FY 1995 2

FRAMEWORK FOR DEFENSE Defense spending has gone down some 35 percent in real (inflation-adjusted) terms since FY 1985. This will probably increase to about 40 percent by FY 1999. Figures 3 and 4 show the relationship of defense spending, in outlays, as a share of the GDP and as a share of federal spending. Figures for FY 1994 and beyond are estimates. Both of these will represent the lowest percentages for defense since pre-world War II. Fig. 3. Defense Outlays as a Share of GOP 12 10 fi------------------ --------- ----- --- ---- - - -------- ----- ----------- -- -- 1- z 8 w () 0:: w 6 a.. 4 2 0 50 55 60 65 70 75 80 FISCAL YEARS 85 90 95 Source: Budget of the United States FY 1995 Fig. 4. Defense Outlays as a Share of Federal Outlays 50 1- z 40 w () ffi 3 0 a.. 20 10 0 50 55 60 65 70 75 80 FISCAL YEARS 85 90 95 99 So urce: Budget of the United States FY 1995 3

Congressional caps have been placed on total discretionary spending, of which defense spending is about half, but there is no longer the "firewall" barrier that existed from FY 1991 through FY 1993 precluding the diversion of defense funds for other purposes. This leaves defense in a vulnerable position in which the budget could shape future national military policy. Congress has (as of May 12) completed its reconciliation of the FY 1995 Federal Budget and, by vote of both houses, approved a $1.518 trillion budget in terms of outlays. The allocation for national defense was $270.7 billion in outlays. This action is directive to the rest of Congress but does not need the President's signature. Further suballocations must be made by the Appropriation Committees. While this establishes broad spending limits, it is not binding on specific programs. - - -- -- -- - = = -- -- -- --- -- --- --- ---- --- --- ---- ---- 4

THE DEPARTMENT OF DEFENSE BUDGET GENERAL The Department of Defense(DoD) budget (often identified as the Pentagon Budget) represents 95.6 percent of the total national defense funding. National defense also includes about $11.5 billion for Department of Energy military activities and certain other military-related activities such as the Federal Emergency Management Agency (FEMA). The FY 1995 budget request is now before Congress and was accompanied by the required five-year projection (through FY 1999). An overall display of national defense top line figures in terms of budget authority and outlays is contained in table 2. Both budget authority and outlays are important. Budget authority is the language of congressional appropriations and provides legal authority to obligate these funds for buying goods and services, including pay for military and civilian personnel. Outlays, on the other hand, are the actual payments made in any particular year. Outlays are important because these payments are dollar outflows which impact directly on the deficit. They are the key considerations in setting budget caps. In defense, with heavy investments which spend out over a period of time, about 35 percent of the outlays in any particular year are based on prioryear contracts (or obligations). Only pay and operating costs can provide a high percentage of outlays during the first year of obligation. If outlays have to be curtailed with a short planning lead time, this invariably hits current operations, since pay is usually fixed in the near term. Unless otherwise indicated, the rest of this section on the DoD budget will be in terms of budget authority. Table 2 NATIONAL DEFENSE TOPLINE (Current$ billions) FY94 FY95 FY96 FY97 FY98 FY99 Budget Authority DoD Military 249.0 252.2 243.4 240.2 246.7 253.0 DoE and Other 11.9 11.5 11.9 11.8 12.0 12.1 Total National Defense 260.9 263.7 255.3 252.0 258.7 265.1 % Real Change -9.0-0.9-5.9-4.0-0.2-0.3 (adjusted for inflation) Outlays DoD Military 267.4 259.2 249.1 244.6 244.7 245.5 DoE and Other 12.5 11.5 11.9 11.8 11.9 12.0 Total National Defense 279.8 270.7 261.0 256.4 256.6 257.5 % Real Change -6.0-5.2-6.4-2.7-2.4-4.5 Source: DoD 5

FORMULATION OF THE FY 1995 DOD BUDGET The FY 1995 budget reflected the results of the Bottom-Up Review directed by then Secretary of Defense Les Aspin. This generated the concept of the two almost simultaneous rna jor regional conflicts (MRC) with other requirements for humanitarian activities and peacekeeping, as well as domestic missions. From this, the force structure and manpower criteria through FY 1999 were developed. FY 1995 is the first step in the five-year journey to the new 1999 objectives. Congressional action of the prior year (FY 1994) budget and continuity with FY 1994 were also key factors. Radical changes were avoided. Overall sizing of the FY 1995 budget, however, was already dictated by the administration's imposed budget cap. When the budget was prepared, adjustments were made in the Future Years Defense Program (FYDP) through FY 1999. These figures were provided with the budget. It was acknowledged, however, that the costing of the revised FYDP through FY 1999 was about $20 billion higher than established ceilings during this same period (see table 3). How this will be absorbed is still to be determined. Table 4 BUDGET AUTHORITY BY TITLE ($ billions*) FY93 FY94 FY95 Military Personnel 76.0 70.8 70.5 Operation & Maintenance 89.2 88.0 92.9 Procurement 52.8 44.5 43.3 RDT&E 38.0 34.8 36.2 Military Construction 4.6 6.0 5.0 Family Housing 3.9 3.3 Other 3.0 1.5 0.9 3.5 Total 267.4 249.0 252.2 *Numbers may not add due to rounding. Source: DoD Table 5 BUDGET AUTHORITY BY PAY AND NONPAY CATEGORIES ($ billions*) Table 3 DOD FYDP VS TOPLINE (Current$ billions) FY95 Budget Authority FYDP 252.2 Topline 252.2 Funding Difference Source: DoD Cumulative FY96- FY99 1,003.4 983.3 20.1 Pay Civilian Payroll Active Military Pay Retired Pay Accrual Other Military Personnel Total Pay Nonpay O&M Excluding Pay Procurement, RDT &E and Construction Total Nonpay Total DoD FY94 43.3 49.2 12.1 9.4 114.1 FY95 41.6 48.4 11.9 10.2 112.1 52.9 59.1 82.0 80.9 134.9 140.1 249.0 252.2 BUDGET NUMBERS A breakout of the DoD FY 1995 budget in several different configurations is reflected in tables 4 and 5 and in figure 5. *Numbers may not add due to rounding. Source: DoD 6

Fig. 5. 1995 DoD Budget by Service (Percentage) Air Force 29.5 Defensewide 15.3 Navy 31.1 (Includes Marine Corps) Army 24.1 FY 1995 = $ 252.2 billion Source: DoD BOTTOM-UP REVIEW (BUR) Guidelines for the budget and revision of the FYDP were derived from the Bottom-Up Review, conducted in the Office of the Secretary of Defense last year and made public in September 1993. Stated goals of the Bottom-Up Review were to: establish essential force structure- two nearlysimultaneous major regional conflicts; sustain overseas presence; ensure continuing readiness of forces; launch initiatives to reduce threats; military-to-military cooperation; cooperative threat reduction; counterproliferation; expanded peacekeeping capabilities; preserve key elements of modernization and industrial base; strengthen defense foundations; environmental security; defense reinvestment. From this came the strategic visualization, force structure, manpower levels, modernization guidelines and priorities. The Bottom-Up Review did not address nuclear forces, but DoD is now conducting a study, the Nuclear Posture Review, to address this range of issues. Because the Bottom-Up Review focuses on a 1999 objective force, and since the FY 1995 budget needs to be discussed in a broad context, projections in this paper will extend through 1999 when applicable. FORCE STRUCTURE AND MANPOWER The Bottom-Up Review would cut major combat forces below those projected in the Base Force, which was the end-state structure projected in the last Bush budget and prior to BUR. Some of the reductions are already reflected in FY 1995. 7

Table 6 FORCE STRUCTURE Cold War Base FY90 Land Forces Army Active Divisions 18 Army Reserve Component Divisions 10 Marine Corps (3 Active/1 Reserve) 4 Navy Ship Battle Forces 546 Aircraft Carriers Active 15 Reserve 1 Navy Carrier Wings Active 13 Reserve 2 Air Force Active Fighter Wings 24 Reserve Fighter Wings 12 Base BUR Force FY95 Plan 12 12 10 8 8 5 plus 4 4 4 430 373 346 13 11 11 1 1 11 10 10 2 1 1 15.3 13 13 11.3 7.5 7 Source: DoD Manpower READINESS Manpower adjustments follow force structure changes. Civilian reductions are based largely on assumed shrinkage of infrastructure over time. Altogether, the cost of personnel has a large impact on the budget and accounts for $112.1 billion out of $252.2 billion in the FY 1995 budget. For projected manpower levels by category, see figure 6. The budget provides for a 1.6 percent pay increase for both military and civilian personnel. The budget also includes more than $1 billion to continue transition assistance to separating personnel, both military and civilian. The DoD budget submission emphasizes readiness as its top priority. This is reflected in the FY 1995 budget with an increase of $5 billion (plus 5.6 percent) in Operation and Maintenance (O&M) funding over the FY 1994 level. While there are many aspects to total force readiness, the Operation and Maintenance appropriations provide funding for training, maintenance, base support, and other requirements to keep soldiers and units in a ready-to-fight condition. Of course, not all of the $5 billion goes directly to readiness-related items or activities. A substantial portion must be applied to price increases and civilian pay raises, but the overall thrust is clear. 8

Fig. 6. DoD Manpower Levels Active Military Down 32% 2151 (End Strengths in Thousands) Selected Reserves Down 20% Civilians Down 29% 804 *Bottom-Up Review Source: DoD One measure used to gauge training is the operating tempo (OPTEMPO) from which costs of fuel, parts, maintenance and other support are derived. These are largely O&M funded. The FY 1995 budget fully funds the service operational training rates, as outlined in table 7. Another important aspect of readiness is maintenance. To curtail a growing depot maintenance backlog, the FY 1995 budget increased the a11ocation for this purpose more than 20 percent, from $5.1 billion in FY 1994 to $6.3 billion. As pointed out in the interim report on readiness by the Defense Science Board (DSB) Task Force, the real question is, readiness to do what? The task force emphasized that readiness must be viewed in a joint perspective involving all ofthose things which relate to the ability of forces to react to contingencies. This includes readiness at home stations, deployability, and ability to perform the necessary missions in the theater of operations. In this respect, the whole mission environment needs a more comprehensive definition with meaningful readiness indicators, thus permitting better resource allocations. Table 7 OPERATIONAL TRAINING RATES Army Annual Tank Miles Flying Hours per Crew per Month Navy Flying Hours per Crew per Month Ship Steaming Days per Quarter Deployed Fleet Nondeployed Fleet Air Force Flying Hours per Crew per Month Fighter/Attack Aircraft Bombers Source: DoD FY93 FY94 FY95 588 620 800 13.5 14.5 14.5 24 24 24 54.9 50.5 50.5 28.3 29 29 20.7 19.7 19.7 21.8 18.0 19.9 9

In the past when readiness has been seriously degraded, it usually meant that O&M had taken significant budget cuts or had been used to fund other things. When the damage is done, it takes considerable time to rebuild and retrain. Readiness remains DoD's primary peacetime mission. MODERNIZATION Modernization, as discussed here, refers to all aspects of research, development and acquisition (RDA). Guidelines prescribed by the Secretary of Defense for modernization consistent with the Bottom Up Review include: sustainment of a strong science and technology base; continuation of investment in next generation weapon systems; refocusing of ballistic missile defense program; sustainment of a strong intelligence program; preservation of key elements of the industrial base that would otherwise disappear. The constrained budgets for RDA, particularly procurement, make these guidelines difficult to achieve. It is clear for FY 1995, at least, that procurement had to pay for a big portion of the Operation and Maintenance increases. RDT &E fared reasonably well, however. RDT &E funding levels ($36.2 billion for FY 1995) have been fairly consistent over the past five years. The science and technology program (basic research, exploratory development and advanced development) enjoys a priority status. Plans are to continue the level of effort for RDT&E. Procurement was a different story. The DoD FY 1995 level of $43.3 billion is the lowest in many years. The drop in buying power since FY 1989 alone was about 54 percent. The plan to invest in the next generation of weapon systems must, of necessity, be very selective. The rationale, as explained by Secretary of Defense William Perry in his testimony on the budget, is based on several factors: The force is smaller, so future buys will be smaller than in the past; also, there is the cushion of existing inventory built up during the Cold War. Perry acknowledges, however, that levels of procurement cannot remain this depressed and will have to increase sometime between 1996 and 1999. The key question, however, is how the dollars will be generated to do this. As indicated in the guidelines, the Ballistic Missile Defense program will give priority to the Theater Missile Defense (TMD) portion. (See the section on BMD.) Of special concern are the status and health of the defense industrial base. Clearly it is being eroded by the drastic drop in defense contracts as well as the closing down of major segments in the industrial side of defense. The Bottom-Up Review stressed the importance of maintaining an adequate industrial and technological base. A vigorous research and development program and emphasis on dual-use programs provide some effort in this direction, along with greater emphasis on buying commercial items and using commercial specifications where possible. It is recognized, however, that some military systems are unique and that funding for certain critical defenseunique capabilities is in order. Items which fall under this industrial base rationale, along with FY 1995 budgeted amounts where applicable, include: nuclear aircraft carrier ($2.5 billion), justified on the basis of maintaining nuclear ship production capability; upgrade of Bradley Fighting Vehicle and Abrams tank ($335 million); this upgrade program, in conjunction with foreign sales, is needed to maintain production base for tracked combat vehicles; 10

sustaining selected plant capacity for ammunition production ($75 million); Sealift Mobility Program ($600 million); while fully justified by requirements for strategic lift, this program, which includes about $3 billion over the entire FYDP, will help sustain the faltering shipbuilding industry; submarine construction to keep the submarine industrial base at a minimum sustaining level. FY 1995 shows $507.3 million (all RDT&E) in a new class of attack submarine, and the Secretary of Defense has stated a plan to invest in a new Seawolf nuclear submarine in the next few years because of the industrial base considerations. RDT&E Table S RDT&E PROFILE FOR FY89 TO FY95 ($ billions) FY89 FY90 FY91 FY92 FY93 FY94 FY95 Constant (FY 1995 dollars) 45.0 42.1 40.3 39.7 40.0 35.7 36.2 Current 37.5 36.5 36.2 36.6 38.0 34.8 36.2 Source: DoD Table 9 SELECTED PROGR AMS RDT&E ($ millions) Program Army Armored System Modernization Comanche Longbow Navy FA- 18 Squadrons (C/D and ElF) V-22A New Attack Submarines Air Force F-22 Advanced Tactical Fighter B-2 Advanced Technology Bomber MILSTAR Satellite Communications Joint Surveillance(farget Attack Radar System (JSTARS) Defensewide Ballistic Missile Defense FY94 147.9 366.7 277.7 1,454. 1 5.2 389.7 2,082.9 785.8 918.4 283.1 2,617.2 FY95 175.5 525.2 191.3 1,411.9 496.9 507.3 2,461.1 408.5 648.0 190.4 2,979.9 Source: DoD 11

Procurement Fig. 7. Procurement Profile 100 80 {$ billions) constant FY 1995 $ (;2]Current $ 60 40 0 FY89 FY90 FY91 FY92 FY93 FY94 FY95 Source: DoD Table 10 SELECTED PROCUREMENT PROGR AMS ($ millions) Program FY94 FY95 Army UH-60 Black Hawk Helicopter (63) 427.6 (60) Bradley Fighting Vehicle Base Sustainment 192.4 Abrams Tank Upgrade Program 96.7 Self-Propelled Howitzer 155rnrn M 109 A6 159.5 SINCGARS Radio System 352.1 Air Force C-17 Airlift Aircraft (6) 2,157.8 (6) E-8A Joint STARS (2) 560.0 (2) Tri-Service Attack Missile 159.6 (48) AMRAAM Air-to-Air Missile (1,007) 487.2 (413) Navy FA- 18C/D Hornet (36) 1,648.1 (24) T45 Goshawk Trainer (12) 289.6 (12) Trident II Ballistic Missile (24) 1,098.6 (18) Tomahawk Cruise Missile (216) 257.5 (217) Nuclear Aircraft Carrier 1,200.0 (1) Aegis Destroyer (3) 2,637.9 (3) 393.1 145.4 175.2 237.6 367.4 2,661.9 564.2 373.9 309.5 1,117.2 245.4 696.0 302.0 2,447.0 2,697.7 Source: DoD NOTE: Quantity in parentheses. 12

Procurement for FY 1995 represents 17 percent of the DoD budget, down from more than 33 percent in FY 1985. Also, Procurement is down about 23 percent in buying power since FY 1993 and some 54 percent below the peak in FY 1989. The ratio of Procurement to RDT &E is now close to 1.2: 1, while the ratios for many years prior to FY 1993 ranged from 1.7:1 to more than 3:1. All this points to the fact that the present budget is indeed procurement poor. Funding for Ballistic Missile Defense is now managed on a defensewide basis by the Ballistic Missile Defense Organization, which reports to the Under Secretary of Defense for Acquisition and Technology. In general, execution of the program is through the military departments, with allocation of funds from DoD to the services. BMDO appropriation summaries for FY 1994 and FY 1995 are shown on table 11. BALLIS TIC MISSILE DEFENSE The Ballistic Missile Defense program, fonnerly known as the Strategic Defense Initiative (SDO, was changed in early 1994 by direction of then Secretary of Defense Les Aspin to downgrade the strategic focus of a national missile defense and give the priority of effort and funding to a more urgent need - an effective theater missile defense. This was done in recognition that the threat of massive nuclear attack on the United States was not realistic in the foreseeable future, but that the proliferation of shortand medium-range missiles, along with weapons of mass destruction, was a growing threat. The name of the program was changed to Ballistic Missile Defense and the old SDIO became the BMD Organization (BMDO). Priorities were also revised. First priority would go to the development and deployment of theater missile defense (TMD) to meet the growing threat from ballistic missiles to forward deployed forces. Second priority would be a scaled-back program for national missile defense of the United States. Efforts would be focused on maintaining the option to deploy a missile defense system of the United States, one capable of providing a defense against limited attacks by ballistic missiles. Most of the elements of the national defense system would remain as research and technology development programs. Third priority would be for advanced follow-on technologies. Table 11 BALLISTIC MISSILE DEFENSE ($ millions) FY94 (Est.) FY95 (Est.) RDT&E 2,617 2,980 Procurement 121 273 Military Construction 3 Source: DoD Total 2,741 3,254 At this stage, the program is essentially all RDT&E and represents about 8.2 percent of total DoD RDT &E funding for FY 1995. The whole program was squeezed down when Congress cut about $1 billion from the $3.8 billion BMD request in the FY 1994 budget, and it remains an attractive target for congressional budget cutters in FY 1995. The major research and development (R&D) portion of TMD programs in the FY 1995 budget includes Theater High Altitude Area Defense (THAAD), Ground Based Radar (GBR), the Arrow Continuation Experiment with Israel, Patriot PAC- 3 and Extended Range Interceptor (ERINT). Decisions are still pending for the Corps Surface-to-Air Missile (Corps SAM), the boost phase interceptor and the sea-based wide-area TMD. 13

The National Missile Defense (NMD) program for the defense of the United States has shifted to advancing technical readiness for possible future deployment. Funding for the NMD portion amounts to about $584 million for FY 1995. The previous Brilliant Pebbles program was tenninated and research on directed energy and particle beam technology cut way back. The main focus will be an exoatmospheric kinetic kill vehicle. Brilliant Eyes, a mid-course missile tracking program, will continue as an acquisition program because it can substantially increase the defended area of a TMD system like THAAD, which can be used for both Theater Missile Defense and National Missile Defense. STRATEGIC MOBILITY A critical pillar for the Bottom-Up Review concept is strategic mobility. There are four dimensions to this program: airlift, sealift, prepositioned equipment, and surface transportation and outloading in the United States. All have major budget implications which must be funded if the projection concept is to work. Deployability is an important aspect of overall force readiness. Airlift is tied in with the procurement of the C- 17 air lifter. The FY 1995 budget includes $2.7 billion for six additional aircraft. The Air Force has the authority to purchase 40 (out of a goal of 120) but no assurances beyond that. Since the C-141 fleet is aging, other needs may have to be met by a combination of C-5Bs, which means reopening the line, and purchase of modified commercial aircraft such as the Boeing 7 4 7-400 freighter aircraft. Another air mobility study is now in process. Funding for airlift is included in the Air Force budget. Sealift is necessary to move heavy equipment. The Joint Chiefs of Staff Mobility Requirements Study represents the guide for additional sealift needs through 1 999 with the addition of nine prepositioning ships and 11 ships for surge sealift capability. A National Defense Sealift Fund was established. The FY 1995 budget shows the following funding levels. Table 12 NATIONAL DEFENSE SEALIFT FUND ($ millions) FY93 FY94 FY95 2,463 1,541 609 Source: DoD About $3 billion is allocated to sealift over the revised FYDP through 1999. Strategic sealift is managed by the Navy. Prepositioning, the third leg, includes both ground and floating prepositioning. Budgeted costs are included in budgets of the military departments involved. Improvements for deployability in the United States, including loading and transportation, are reflected in military department budgets. MILITARY CONSTRUCTION AND FAMILY HOUSING Both Military Construction and Family Housing are contained in the Military Construction Appropriations Bill. This is separate and distinct from the Defense Appropriations Bill, which carries all other DoD appropriations. The DoD budget request for these programs for FY 1995 total $8.36 billion. Summaries of both Military Construction and Family Housing are shown in table 13. Under the Military Construction portion, about $2.7 billion will go for base closure activities and $300 million for planning and design, leaving only about $2.5 billion for construction other than base closure-related. 14

Table 13 MILITARY CONSTRUCTION AND FAMILY HOUSING (BA $ billions*) FY93 FY94 Military Construction 4.55 5.96 Family Housing 3.94 3.50 Family Housing Construction (.82) (.69) Family Housing Operations (2.99) (2.66) Homeowners Assistance Fund (.13) (.15) Total Milcon and Family Housing 8.50 9.46 FY95 5.05 3.31 (.64) (2.81) (-.13) 8.36 About 40 percent of the costs are going for surveys and studies of potential sites, but emphasis is shifting to actual cleanup. For FY 1995, an estimated $2.2 billion will be spent for cleanup of existing bases and facilities and an additional $560 million for closed bases. These funds are identified in the Defense Environmental Restoration Account. About $600 million in FY 1995 is for Base Realignment and Closure actions. These include six military installations scheduled for closure or realignment under the presidentially-directed "fast track cleanup program." Compliance costs for FY 1995 will be about $2.3 billion and are embedded in budgets across the board. Infrastructure and Base Closures As the force is reduced it is imperative that infrastructure also be reduced and facilities consolidated if cost goals are to be achieved. *Numbers may not add due to rounding. Source: DoD OTHER BUDGET CONSIDERATIONS Environment This is a comprehensive program covering cleanup (or restoration), compliance, conservation, pollution prevention and technology improvements. Environmental-related costs are increasing with an estimated $5.7 billion for FY 1995, up from about $3.5 billion in FY 1993. These costs are embedded in various appropriations and accounts. Base realignments and closures are an inherent part of this. Because of the many competing factors and political sensitivities concerning bases and faci1ities, the process has been controlled by legislation which created nonpartisian commissions to make the closure and realignment recommendations. Commissions met in 1988, 1991 and 1993. Their recommendations were approved by the President and Congress and are now being implemented. Another commission will meet in 1995. This will be the big one, especially if it remains the last one established under the public law. Infrastructure cuts have not kept pace with either DoD budget reductions or personnel strength cuts. The 15-percent cut in facilities in the United States through BRAC 93 is only about half the total reductions called for between now and the end of the decade. DoD has been involved in cleanup at about 1,800 military installations and more than 8,000 formerly used sites. DoD is now preparing lists for the next commission (BRAC 95); this could well double the amount proposed in the past, but anything this big may well 15

be indigestible or unmanageable. Don't be surprised to see Congress balk, and for Congress and DoD to agree on spreading this out, perhaps with a BRAC 97. In the meantime, the big challenge is how to pay large base closing costs. Overall savings cannot be expected for six to eight years. On the first three rounds, the military departments and agencies had planned to spend an aggregate of about $7.5 billion, but total estimates are now higher. BRAC costs in the FY 1995 budget are shown as $2.7 billion ( under the Military Construction appropriations). These are for the 1988, 1991 and 1993 actions. The present FYDP does not include anticipated base closure costs for BRAC 95, but this will require a substantial chunk of money which has to be fitted into the funding guidance for FY 1996 and beyond. In connection with base closures, the President has recently directed actions to facilitate early use by affected communities of these assets. This puts local redevelopment on a par with fast-track environmental cleanup. eral requirements imposed (over those used in commercial practice). Of particular importance is the simplification of acquisition procedures for items under $100,000. They represent about 98 percent of all the actions but only 11 percent of the dollars. removing impediments to buying commercial items and services, and restricting the use of special military standards, except when absolutely required. While many things can be done within DoD itself, congressional support is needed with respect to procurement laws. Congress did not act on legislation in 1994. Several committees have overlapping jurisdiction, so turf is at stake and compromises will be necessary, but something positive should happen during this session. There are no savings for FY 1995, but if Perry gets what he wants, the downstream savings on acquisition costs could be significant. The upcoming BRAC 95 will be an event of major impact. The big question is the availability of funds to cover upfront costs. Reducing the infrastructure to include facilities, civilian personnel and other overhead costs will not produce savings for several years thereafter. To be realistic, most of the benefits (in dollar terms) from this will not accrue until the next decade. Acquisition Reform Acquisition reform by streamlining the way DoD buys its materiel and equipment is being pushed strongly by Secretary of Defense Perry. Major thrusts include: simplifying acquisition laws and regulations and eliminating those not needed. Present requirements are both cumbersome and costly. Some estimates indicate additional procurement costs of 20 to 50 percent because of the complex fed- Masking Defense Costs Comparisons are often made (on an overall dollars basis) with previous years as a measure of the nation's relative investment in defense. In the post Cold War period, however, this can be deceptive. There are increasing numbers of things being funded by defense dollars today that did not exist in the past or were not considered traditional defense costs. Regardless of their necessity or merit, these were not major budget items in past years and, therefore, distort historical comparisons. A March 1994 Congressional Research Service (CRS) study estimated that DoD was spending almost $13 billion in FY 1994 on projects with limited defense applications. A Government Accounting Office (GAO) report issued in November 1993 stated there was a clear trend of funding civil programs from defense appropriations. It said that military budget support went up from $1.4 billion in FY 1990 to $4.6 billion in FY 1993. 16

Some major items costing increased dollars for DoD today that we did not see in the past include: environment ($5.7 bi11ion in FY 1995); March 1993 by Secretary of Defense Asp in with the comment that this was a first step; at the same time, he directed further study by DoD in a number of areas. closing down and realigning bases (BRAC actions) ($2.7 billion in FY 1995); transition benefits ($ 1.2 billion in FY 1995); defense conversion and dual-use technology ($2.2 billion in FY 1995). Everyone's list can be different, but it is clear that more and more is being included in the defense budget that was not there before, which means that the level of support for traditional warfighting capabilities is decreasing even more than the overall statistics would indicate. KEY FAC TORS AFFEC TING FUTURE BUDGETS The FY 1995 budget is undergoing the normal congressional process. Whatever Congress does will clearly affect future budgets, particularly if future outlay cuts are mandated for discretionary spending. The things to watch in the future are : 1) the outcome of the Roles and Missions Commission study; 2) the results of the next OSD Future Years Defense Program (FYDP) review, which matches programs and resources for six years from FY 1996 through FY 2001; and 3) most unpredictable, the course of world events over the next few years. Anything in significant variance with present planning vectors could quickly change national security requirements and perspectives. Some brief comments on items 1) and 2) above: Roles and Missions Commission In February 1993, then JCS chairman Gen. Colin Powell issued his "Report on the Roles, Missions and Functions of the Armed Forces of the United States." This report was forwarded to Congress in Congress, in general, was not satisfied with the results. The major criticism was that it did not go far enough or deep enough. As a result, the House Armed Services Committee Report (November 1993) directed a special Commission on Roles and Missions of the Armed Forces to be appointed by the Secretary of Defense. The basic charter given to this commission was to recommend the functions for which each military department would organize, train and equip forces; the mission of combat commands; and the roles that Congress should assign to various military elements of the Department of Defense. This commission has now been formed, with Dr. John P. White of Harvard University as chairman. There are a total of 10 participating members. Commission recommendations are due about May 1995, with Secretary of Defense review and comments 90 days later. Clearly the approved report will not be ready in time to affect formulation of the FY 1996 DoD budget, but could have significant bearing on subsequent budgets. Future Years Defense Program (FYDP) DoD and the military departments are engaged in the biennial drill to generate the next FYDP, covering the period from FY 1996 to FY 2001. Defense Planning Guidance (DPG) provides instructions on programs and priorities to the submitting military departments and agencies. The instructions are consistent with the objectives of the Bottom-Up Review and Defense Fiscal Guidance (DFG) as derived from established budget top line figures. Theoretically this guidance should be coordinated and compatible in advance, but don't expect it this year. There is a looming gap between resources and programs in the next FYDP. The projections are anything but optimistic in terms of the requisite 17

-"" "-., --- dollars to support currently defined security requirements in future years. Final OSD decisions on the FY 1996-2001 program should be made by September 1994; the first year of the new FYDP will provide input for the FY 1996 DoD budget. The wild cards are the happenings on the world scene, along with an evolving U.S. foreign policy. No long-term assumptions are secure. Surprises will arise, so flexibility in national security planning is essential. DEFENSE OU TLOOK The FY 1995 DoD budget is characterized by added funding for O&M in the name of readiness, but with very restricted funding for RDA and Military Construction. What is missing as a basis for measuring the adequacy of the DoD budget is a clear written and approved statement of national military strategy. Instead, the output of the Bottom-Up Review is being used as a surrogate for a more formal presentation of policy, and this can lead to many interpretations and misunderstandings. The open question now is what Congress will do with the FY 1995 budget. From a programmatic sense, Congress will probably make few, if any, big changes from the President's budget, but there will be the usual juggling ofline items. This is an election year; Congress doesn't want any more big issues on the table - health care is enough - and there is a good chance we could have a defense bill this year by Oct. 1 - almost unprecedented, but possible. The real danger is outlay cutting. This has already surfaced in budget resolution actions. Such action would almost surely hit at Operation and Maintenance funding, the very area where DoD has placed its top priority. ' '" '\ g,. 18 - -.. --....-..

THE ARMY BUDGET The Army FY 1995 budget stands at 24.1 percent of the DoD FY 1995 budget. A summary of the top line numbers in the Army budget are shown in table 14. As with DoD overall, the Army is experiencing its loth consecutive year of a budget with less buying power than the year before. While appropriations are made by Congress in terms of budget authority (BA), they are managed by the military departments and defense agencies in ARMY BUDGET TRENDS AND PA TTERNS The next three figures show patterns in Army budgets over time. Figure 8 shows the percentage change in real terms for each year with respect to the previous year. The early- to mid-1980s increases contrast sharply with the 1 0-year decline since 1985. Figure 9, shown in FY 1995 constant dollars, graphically portrays the loss of Army buying power over a six-year period, a drop of more than 32 percent. Table 14 ARMY BUDGET SU MMARY ($ billions) Current Dollars Total Obligational Authority Budget Authority Outlays FY93 66.7 64.8 72.2 FY94 61.0 60.6 63.7 FY95 61.1 60.8 61.5 Constant (FY95) Dollars Total Obligational Authority 69.5 62.3 61.1 Source: DA terms of total obligational authority (TOA). DoD uses this financial term to reflect the direct defense program for the fiscal year. While TOA and BA are essentially the same, they differ by such adjustments as legislative transfers, reappropriations, recisions and offsetting receipts. For the Army, these differences are small, resulting largely from revolving and management fund adjustments, and affect only a few of the appropriations for FY 1995. Unless otherwise indicated, TOA reflecting the direct Army budget plan will be used for discussion of the Army budget in this section. Figure 10 shows relative comparisons of the Army budget broken out by functional elements for: 1) FY 1989 (before the drawdown) and 2) the current FY 1995 budget. It demonstrates the sharp cuts in Research, Development and Acquisition (RDA) and Military Construction. At the same time, military and civilian pay are taking a substantially larger share of the total despite the reduction in strength. Separation incentives and other transition costs have kept pay accounts higher than strength alone would indicate in recent years. 19

Fig. 8. Army Real Growth Trends FY70-FY95 15 10 5 0-5 -10-15 70 72 74 76 78 80 82 84 86 88 90 92 94 95 I FY95 Constant $ I (Excludes Operation Desert Storm) Source: DA Fig. 9. Army Dollar Resource Trends 95 90 90.0 85 80 TOA Reduced by over 3 2% 75 70 65 60 61.1 55 1-FY95 Constant $ billions I 50 FY89 FY90 FY91 FY92 FY93 FY94 FY95 *Does not include Desert Storm Source: DA 20

Fig. 10. Army Program Balance Civilian Pay 16% Operations* ** 21 % MiiCon ** 2% Civilian Pay 19% Operations** 21% MiiCon** 1% 24% *Includes Defense Medical (2.5%) **Excludes Civilian Pay Source: DA ARMY BUDGET BREAKOU T FOR FY 1995 STRATEGIC CONS TRUC T The Army budget by basic title for FY 1993 to FY 1995 is shown in table 15. Army National Guard and Am1y Reserve have been integrated under the appropriate titles. For a more detailed listing by specific appropriation, see Appendix II. Table 15 Am1y planning is based on national security guidelines emanating from the Bottom-Up Review. This established the concept of being able to fight and win two nearly simultaneous major conflicts with recognition for minor contingencies and a variety of missions short of war such as peacekeeping, humanitarian assistance and natural disaster. TOTAL OBLIGATIONAL AUTHORITY SUMMARY (Current $ billions*) Title FY93 FY94 FY95 Military Personnel 28.5 26.8 26.1 O&M 22.6 19.7 21.5 Procurement 6.9 6. 1 RDT&E 6.1 5.4 5.3 Military Construction.9.8 Army Family Housing 1.3 Total 66.7 61.0 61.1 7.4.7 1.5 *Numbers may not add due to rounding. Source: DA 1.3 To accomplish this, the 1999 structure for the Army is projected as 10 active and five (plus) reserve component divisions with 15 enhanced National Guard combat brigades deployable within 90 days. Amly strength was set at 495,000 for the active force and 575,000 for the RC (combined National Guard and Am1y Reserve). The Am1y would become primarily a projection force from bases in the United States. Forces would be maintained overseas in Korea and Europe, but with a major drawdown in Europe to about 65,000. The major projection requirement for the Am1y focuses on its five-division contingency corps, illus- I, 21

trated in figure 11. This drives the requirement for strategic mobility as well the need for ready support forces, including reserve component units. To meet future strategic commitments the Army must structure itself to respond to two nearly simultaneous regional crises; base the majority of forces in CONUS, but keep 65,000 in Europe and 26,000 in Korea to deter aggression and promote stability; ensure sufficient strategic mobility and force modernization to get the force to the fight and to win decisively when it gets there; embed capabilities within the force to respond to a range of new requirements (peacekeeping operations, humanitarian assistance, disaster relief, etc.); engage in aggressive overseas presence operations (exercises, unit and personnel exchanges, security assistance, etc.) to build and strengthen the coalition of democracies. STRUC TURE The Total Army incorporates the active component, the reserve components and civilian employees. The military structure consists of a mix of heavy, light and special operations forces along with supporting elements and base structure. The combat structure for FY 1995 is based on four corps, 12 active divisions and eight National Guard divisions, plus five active and 13 National Guard separate combat brigades (excluding special purpose brigades and roundout/roundup brigades). Table 16 shows the types of units and any changes from FY 1994. Army forces will continue forward presence in Korea with one division (minus) and in Europe with a corps with two divisions of two brigades each. There has been a general shift, however, to the continental United States (table 17.) Total Army strength for this force as of the end of FY 1995 would be 510,000 active soldiers, 642,000 RC soldiers, and 278,000 civilians - a drop below FY 1994 numbers of 93,000 personnel in all three categories. Fig. 11. Force Closure Timeline Source: DA 22

Table 16 COMBAT FORCE STRUCTURE UNITS FY94* Changes FY95* Active Corps 4 0 4 Divisions 12 0 12 Mechanized/ Armor (8) 0 (8) Light/ Airborne/ Air Assault (4) 0 (4) Separate Brigades** 6-1 5 Mechanized/ Armor/ Armored Cavalry Regiment (2) 0 (2) Infantry /Light/ Light Cavalry Regiment (4) -1 (3) National Guard Divisions 8 0 8 Mechanized/Armor (4) 0 (4) Infantry (3) 0 (3) Light/ Airborne/ Air Assault (1) 0 (1) Separate Brigades 13 0 13 Mechanized/ Armor/ Armored Cavalry Regiment (6) 0 (6) Infantry (7) 0 (7) Army Reserve Separate Brigades -1 0 1, * Reflects status at year end. ** Does not include 177th Armor Brigade and 3rd Infantry Regiment. Source: DA Active Army CONUS Europe Pacific Other *Projected Source: DA Table 17 A SHIFT TO CONUS (thousands) FY89 FY95* 510 410 217 65 34 28 9 7 Division stationing as of the end of FY 1995 is reflected in figure 12. Not shown in the division structure is an important piece of Army combat and combat support structure: the Army Special Operations Forces (SOF), with a strength of about 29,000 military (active and reserve components). The Army Special Operations Command, located at Fort Bragg, North Carolina, reports to the commander in chief (CINC) of the U.S. Special Operations Command (SOCOM). The budget for special operations is handled separately, with funds provided through DoD and the CINC of Special Operations Command under a separate major force program. Therefore, SOF operating and 23

Fig. 12. Division Stationing by the End of FY95 1995: 4 CORPS - 20 DIVISIONS I Source: DA acquisition funds are part of the joint command (SOCOM) budget and are not included in the Army budget. Nonoperational requirements, however, including base operations at Army facilities and bases, are still provided through Army funding. Even though the Anny is becoming essentially a CONUS-based force, it continues to be engaged worldwide. In addition to soldiers forward stationed in Korea and Europe, there are Army soldiers involved in all kinds of tasks in 63 countries around the world. During the past 12 months this number has varied from a low of about 12,000 to more than 20,000; these operations actually tie up about three times the number when training, orientation, and coming and going are considered. Fig. 13. The Army Engaged (as of April 1994) Humanitarian Relief... Joint Operations... Counterdrug... UN Operations Source: DA 24