February 11, 1997

Defense Modernization Delayed Yet Again

For the last five years, President Clinton has promised to spend more money on modernization but has never delivered, so it is no surprise that this year's procurement request is lower than the amount promised by the President in last year's budget. It is also no surprise that defense spending continues to decline, in real terms, under President Clinton's FY 1998 budget. But while some may know that President Clinton regularly raids the defense budget to pay for questionable social programs, many may be surprised to know that 58 percent of Clinton's net overall discretionary savings and 31.5 percent of his net overall savings in his balanced-budget plan come from Defense.

Defense Spending Levels

Declining Defense Budgets

The FY 1998 defense budget (including Department of Defense, Department of Energy and other defense-related activities) requests a total of $265.3 billion in budget authority and $259.4 billion in outlays. The FY 1998 request for the military functions of the DoD proposes $250.7 billion in budget authority and $247.5 billion in outlays. Compared to the 1997 final appropriations, DoD budget authority would increase $700 million in nominal dollars, but outlays would decline $6.8 billion. When adjusted for inflation, the FY 1998 budget request is 30 percent below the 1985 level, and represents the 13th straight year of real decline (if the purchasing power of dollars is held constant over time) [U.S. Senate Budget Committee Staff, "President Clinton's 1998 Budget: A Brief Overview," 2/6/97, p. 16].

President Also Seeks Billions in Rescissions from Defense Spending . . .

As defense spending continues its free-fall, President Clinton's FY 1998 budget request seeks to rescind $4.8 billion from the existing 1997 defense budget, further aggravating defense underfunding. It claims to offset some of this rescission by asking Congress to approve a supplemental appropriation of $2 billion to fund the U.S. troop presence in Bosnia.

. . . While Using Scarce Defense Dollars to Fund "Contingency Operations"

As defense dollars become more scarce, and as military readiness problems surface, President Clinton continues to commit U.S. military forces to more contingency operations abroad than any President in history. The President's FY 1998 budget includes a request of $2.2 billion for "contingency operations" -- $1.5 billion designated to keeping U.S. troops in Bosnia, despite the Clinton Administration's promise that U.S. forces would begin disengaging from that region in November of 1996, and $700 million for ongoing operations in Southwest Asia. [For further information on the extended Bosnia mission, see RPC paper, "Clinton-Approved Iranian Arms Transfers Help Turn Bosnia into Militant Islamic Base," 1/16/97.]

Spending on Short-Term Readiness Declines

The Administration claims it is protecting short-term military readiness (training, fuel and spare parts) by increasing funding for the Operations and Maintenance (O&M) accounts. At first glance, this may seem the case, since this year's O&M budget request of $93.8 billion is $900 million above last year's $92.9 billion level. However, if the $700 million request for contingency operations, which is to be funded from the O&M account, and inflation of approximately 2.4 percent are factored in, the President's FY 1998 O&M request reflects a cut of 2.5 percent, or $2.3 billion, in real terms, from last year's request. It is unclear whether the Administration plans to use O&M funds to pay for the $1.5 billion request for Bosnia; however, if so, then the amount to be spent on short-term readiness would dip even lower.

Underfunding and Delaying Defense Modernization

President Clinton Fails to Deliver on Procurement Promises

The FY 1998 budget request for weapons procurement is this Administration's fifth consecutive budget plan where the procurement figure falls far short of the level projected in each previous budget. This year's budget designates $42.6 billion for modernization, $2.9 billion below the level anticipated in both the FY 1995 and the FY 1997 budget. The FY 1997 procurement request of $38.9 billion was $4.6 billion less than what the Pentagon, in 1995, anticipated to spend in FY 1997. The overall FY 1998 procurement level of $42.6 billion is $2.9 billion less than the level of $45.5 billion the FY 1995 budget projected to spend this year. Finally, the Administration itself admits in its FY 1998 DoD budget briefing charts that the "ramp-up" in defense modernization has been delayed again, this time until FY 1999.

Congressional Republicans Fund Necessary Modernization

Overall, the Clinton Administration has cut modernization spending to the lowest level since 1950. Since 1992, procurement has been reduced by 44 percent; since 1985, procurement has declined 71 percent. The FY 1998 request for procurement is $42.6 billion, $1.5 billion less than what was spent on modernization in 1996. But it is the Republicans who should be thanked for last year's $44.1 billion spending level for weapons modernization. In FY 1997, the Administration requested only $38.9 billion for procurement, prompting the Republican Congress to add the $5.2 billion necessary to compensate for the President's neglect of modernization.

President Ignoring Military's Recommendations

This is the second year in a row that President Clinton has ignored his own top military officials' recommendation that the procurement account be increased. A 1996 memo to Defense Secretary Perry from Chairman of the Joint Chiefs of Staff General John Shalikashvili reads, "I urge you to set a procurement goal of about $60 billion per year beginning in FY 1998" [Washington Times, 3/8/96]. The $42.6 billion FY 1998 procurement request falls $17.4 billion below that recommended level.

President Ignores Need to Defend U.S. From Ballistic Missile Attack

The Case for National Missile Defense

Today, the United States is defenseless against a ballistic missile attack, yet the U.S. cannot dismiss the possibility of a missile attack, either accidental, unauthorized, or deliberate, from a politically unstable Russia or a bellicose China. Although the immediate threat comes from several identifiable countries, the rate of proliferation of weapons of mass destruction ensures a heightened threat in the future. Already, more than 25 countries (including North Korea, Iran, Libya, Iraq and Syria) possess or are seeking to acquire ballistic missiles that could carry nuclear, chemical and biological warheads. Rogue nations with shorter-range ballistic missiles are seeking to acquire longer-range missiles.

In written testimony before the Senate Armed Services Committee on February 6, 1997, Director of the Defense Intelligence Agency Lt. Gen. Patrick Hughes noted that "currently some two dozen states remain actively engaged in the pursuit of weapons of mass destruction" and that "one or more of the determined rogue states are likely to develop or acquire nuclear weapons over the next decade." He went on to state that although "it is unlikely that any state, other than the declared nuclear powers, will develop or otherwise acquire a ballistic missile in the next 15 years that could directly target the United States," he added that we "could encounter some form of technical surprise, where a rogue state could acquire the capability to build and use a missile which could threaten our vital interests."

President's Budget Underfunds Its Development Program

While the Clinton Administration's FY 1998 budget request for activities specifically related to ballistic missile defense is approximately $2.9 billion, only $500 million is devoted to research for a national missile defense system that could protect the United States from ballistic missile attacks. President Clinton claims that funding a research capability that could be deployed if a threat develops is enough; yet even his own budget request of $500 million underfunds what is required to meet the development of such a capability.

In testimony before the Senate Armed Services Committee, the former director of the Ballistic Missile Defense Organization, Lt. Gen. Malcolm O'Neill, cited a requirement of $800 million per year. Over the past few years, it has been left to the Republican Congress to supply the required funds to the national missile defense account.

The Republican Alternative: Defending Americans

In light of the growing threat and recognizing the need to defend Americans against ballistic missile attack, Senators Bob Smith (R-NH) and Majority Leader Trent Lott have introduced S. 7, the National Missile Defense Act. S. 7 calls for the deployment of a limited national missile defense system for the United States, while allowing the Secretary of Defense the flexibility to decide the type of system to deploy. The Act states: "It is the policy of the United States to deploy by the end of 2003 a National Missile Defense system that 1) is capable of defending the territory of the United States against limited ballistic missile attack (whether accidental, unauthorized, or deliberate), and 2) could be augmented over time to provide a layered defense against larger and more sophisticated ballistic missile threats if they emerge."

Funding Nondefense Activities

The FY 1998 budget request designates $80 million from the defense budget to pay for humanitarian and disaster assistance. The Clinton Administration is continuing its policy of spending scarce defense dollars on activities with limited defense applicability. Over the past two years, the Republican Congress has shifted funds from these non-defense activities and has funded instead higher-priority military needs.

Republicans Assuring A Strong Military

President Clinton's FY 1998 defense budget underfunds and delays needed modernization, ignores the need to deploy a national missile defense to protect Americans against ballistic missile attack, and spends scarce defense dollars on nondefense activities. President Clinton's FY 1997 defense budget so inadequately funded the military that the Republican Congress was forced, for a second year in a row, to restore billions of dollars to defense accounts. Congressional Republicans will work hard to redress similar flaws in the President's FY 1998 budget, and, as in previous years, will focus scarce defense dollars on programs that will assure a strong U.S. military force.