# Presentation: 599004

## FY 2000 Defense BudgetFebruary 1999

## National Defense Topline(Function 050 $ Billions)

- 	_FY 00_	_FY 01_	 _FY 02_	_FY 03_	_FY 04_	_FY 05_
_**Budget Authority**_
- DoD Discretionary	268.2	287.4	289.3	299.7	308.5	319.8
- Mandatory	-1.0	-1.0	-1.0	-1.0	-0.9	-0.9
- DoD Military (051)	267.2	286.4	288.3	298.7	307.6	318.9
- DoE and Other	13.6	14.1	14.1	14.1	14.1	14.1
- Total (050)	280.8	300.5	302.4	312.8	321.7	333.0
_**Outlays**_
- DoD Discretionary	261.8	269.4	279.3	291.2	300.9	318.5
- Mandatory	-1.0	-0.8	-1.0	-0.9	-0.9	-0.9
- DoD Military (051)	260.8	268.6	278.3	290.2	300.0	317.6
- DoE and Other	13.2	13.6	13.7	13.8	13.8	13.8
- Total (050)	274.1	282.1	292.1	304.0	313.8	331.4

## DoD Funding Increased

**FY 00 Budget**

**FY 99 Budget**

**FY 99 Budget Adjusted**

- $84 billion
- (budget increase)

**$112 Billion Total Increase**

- $28 billion
- (reapplied savings)

- FY 99 Emergency
- Supplemental

**Notes:**
National Defense Function 050
This graph shows that the FY 99 budget in both current and FY 1999 constant dollars.

The FY 1999 defense budget is generally consistent with the Balanced Budget Agreement.  Reflecting the Agreement, the President’s budget provides about $270 Bn  in constant dollars for Nat’l Defense.  We keep pace with inflation, but no more.  This means that for both this Dept and the Congress, all changes to the budget are zero-sum.  Every SecDef would like more $, but this budget strongly supports defense.  Our big challenge is to squeeze savings from infrastructure.  

Some will ask if we need more for defense, and my answer is (1) the budget strongly supports defense and (2) I can get more money for real defense from within this plan if Congress will give me the flexibility that every CEO in America has and, in particular, if Congress will agree to cut infrastructure we don’t need.  

## Financing the DoD Increase(Discretionary Budget Authority in Billions)

**Notes:**
The New Defense Strategy
Based on our analysis of threats, the QDR developed  a new defense strategy that is summarized as -- Shape, Respond, Prepare.  
This is a balanced strategy.  It is balanced:
  Between the present and the future, in particular
  Between maintaining our current capabilities to meet today’s requirements and exploiting new capabilities through the Revolution in Military Affairs.

The QDR program funded by the FY 99 budget is strategy driven --the strategy provides a blueprint and set of priorities for formulating the budget.  Obviously this budget is resource-constrained.  But what is more important is that it is designed to meet and able to meet a sound strategy.

## Personnel ($35 billion)
Pay, retirement, readiness
Operation & Maintenance ($49 billion)
Readiness, contingencies, civilian pay raise
Modernization ($28 billion)
Procurement, RDT&E, NMD, Military Construction

- Pay, retirement, readiness
- Operation & Maintenance ($49 billion)
- Readiness, contingencies, civilian pay raise
- Modernization ($28 billion)
- Procurement, RDT&E, NMD, Military Construction

- Defense Budget Increases

**Notes:**
The New Defense Strategy
Based on our analysis of threats, the QDR developed  a new defense strategy that is summarized as -- Shape, Respond, Prepare.  
This is a balanced strategy.  It is balanced:
  Between the present and the future, in particular
  Between maintaining our current capabilities to meet today’s requirements and exploiting new capabilities through the Revolution in Military Affairs.

The QDR program funded by the FY 99 budget is strategy driven --the strategy provides a blueprint and set of priorities for formulating the budget.  Obviously this budget is resource-constrained.  But what is more important is that it is designed to meet and able to meet a sound strategy.

## Budget increases supported each element of
Shape-Respond-Prepare strategy
Highest priorities
Continue to attract and retain high quality personnel
Ensure high levels of operational readiness
Implement modernization of force
Improve base facilities and family housing
Streamline infrastructure --Defense Reform Initiative

- Shape-Respond-Prepare strategy
- Highest priorities
- Continue to attract and retain high quality personnel
- Ensure high levels of operational readiness
- Implement modernization of force
- Improve base facilities and family housing
- Streamline infrastructure --Defense Reform Initiative

- How the Budget Supports the QDR Strategy

**Notes:**
The New Defense Strategy
Based on our analysis of threats, the QDR developed  a new defense strategy that is summarized as -- Shape, Respond, Prepare.  
This is a balanced strategy.  It is balanced:
  Between the present and the future, in particular
  Between maintaining our current capabilities to meet today’s requirements and exploiting new capabilities through the Revolution in Military Affairs.

The QDR program funded by the FY 99 budget is strategy driven --the strategy provides a blueprint and set of priorities for formulating the budget.  Obviously this budget is resource-constrained.  But what is more important is that it is designed to meet and able to meet a sound strategy.

## Most Important Asset-People(Times  to Develop)

- Most Important Asset-People(Times  to Develop)

**DD 21:  14 years**
**Senior CPO:  19 years**

** ****F-22:  17 years**
**Wing Commander:  23 years**

**Apache:  10 years**
**Company 1st Sergeant:  18 years**

**Years**

## Restore 50% retirement benefits
Provide largest pay raise since 1982
FY 99 = 3.6%   FY 00 = 4.4%   FY 01-05 =3.9%
Reform military pay table to reward performance
Increase specialty pays and bonuses to address retention issues

- Restore 50% retirement benefits
- Provide largest pay raise since 1982
- FY 99 = 3.6%   FY 00 = 4.4%   FY 01-05 =3.9%
- Reform military pay table to reward performance
- Increase specialty pays and bonuses to address retention issues

- People Come First

**Notes:**
The New Defense Strategy
Based on our analysis of threats, the QDR developed  a new defense strategy that is summarized as -- Shape, Respond, Prepare.  
This is a balanced strategy.  It is balanced:
  Between the present and the future, in particular
  Between maintaining our current capabilities to meet today’s requirements and exploiting new capabilities through the Revolution in Military Affairs.

The QDR program funded by the FY 99 budget is strategy driven --the strategy provides a blueprint and set of priorities for formulating the budget.  Obviously this budget is resource-constrained.  But what is more important is that it is designed to meet and able to meet a sound strategy.

## Current Readiness: A Top Priority

**Operation & Maintenance Funding**

**New  Readiness  Initiatives**

**QDR  Increase**

- $ in Billions

**FY 00 Budget**
**FY 99 Budget**
**FY 98 Budget**

**Notes:**
Modernization on Target
This graph shows that our modernization program is on target.  At the right, the dashed line shows that FY 99 budget for procurement is nearly identical to the QDR goal.

The table at the top shows the actual data for fiscal  years 1999 through 2003.

The QDR made a number of important adjustments to our modernization program.  Most notable was our decision to reduce and delay some planned procurement of the Joint Strike Fighter (JSF), F-22, and F/A-18E/F.  

The QDR gave us a prudent modernization program, which is slightly more restrained than previously planned, but also more achievable.  
Hitting the QDR modernization targets is just the first step.  We must protect them in the congressional appropriations process and then ensure that we actually execute successfully the final program.  

## Readiness Levels Sustained

- 		_FY 98_	_FY 99_	_FY 00_
**Army**
- 	Tank miles/year	630	703	800
- 	Tactical hours (crew/month)	11.4	11.5	14.5
**Navy**
- 	Steaming days per quarter
- 	     Deployed fleet	50.5	50.5	50.5
- 	     Non-deployed fleet	26.8	28.0	28.0
- 	Tactical hours (crew/month)	20.2	22.1	22.3
**Air Force**
- 	Flying hours (crew/month)
- 	     Fighters	17.0	17.7	17.2
- 	     Bombers	19.3	17.9	15.8
- 	     Tankers	18.4	17.0	17.1
- 	     Airlift	24.5	23.9	24.0

## Total Force Readiness

- 		_FY 98_	_FY 99_	_FY 00_
- _Reserve Components_
- 	Military Personnel	9.4	9.7	10.1
- 	Operation & Maintenance	9.3	9.9	10.1
- _National Guard OPTEMPO_
- 		        Force Packages 1-3 = 100%
- 		 Force Package 4 = 75%
- _WMD Mission_
- 	10 RAID teams activated in FY 99

**(Dollars in Billions)**

## Contingency Funding

- _	__	__FY 99__	__FY 00_
- Bosnia	$1.8 B	$1.8 B
- Southwest Asia 	$1.0 B	$1.1 B
- FY 99 does not include cost of Kosovo verification mission, storm damage relief efforts or recent action against Iraq.
- FY 00 budget fully funds support operations in Bosnia and Southwest Asia

## Services O&M Dollars / Per End Strength(Constant FY00 $ in Thousands)

- Fiscal Years

- Increased funding for OPTEMPO, spares and maintenance

- Services O&M Dollars / Per End Strength(Constant FY00 $ in Thousands)

## Modernization on Target($ Billions)

- Modernization on Target($ Billions)

- 	_FY 98_	_FY 99__	__FY 00__	__FY 01__	__FY 02__	__FY 03__	__FY 04__	__FY 05_
**QDR Goal****	****-**	49	54	60	61	62	-	-
**FY 00 Budget**	45**	**49	53	61.8	62.3	66.6	69.2	75.1

- 52% Real Growth from FY 98 to FY 05

**Notes:**
Modernization on Target
This graph shows that our modernization program is on target.  At the right, the dashed line shows that FY 99 budget for procurement is nearly identical to the QDR goal.

The table at the top shows the actual data for fiscal  years 1999 through 2003.

The QDR made a number of important adjustments to our modernization program.  Most notable was our decision to reduce and delay some planned procurement of the Joint Strike Fighter (JSF), F-22, and F/A-18E/F.  

The QDR gave us a prudent modernization program, which is slightly more restrained than previously planned, but also more achievable.  
Hitting the QDR modernization targets is just the first step.  We must protect them in the congressional appropriations process and then ensure that we actually execute successfully the final program.  

## Shipbuilding

- _	__FY 99__	__FY 00__	__FY 01__	__FY 02__	__FY 03__	__FY 04__	__FY 05_
_**Platforms**_
- CVN 77	-	-	1	-	-	-	-
- NSSN Submarine	1	-	1	1	1	1	1
- DDG-51 Destroyer	3	3	3	3	3	-	-
- DDG21 Destroyer	-	-	-	-	-	1	3
- LPD-17 Assault Ship	1	2	2	2	2	2	-
- LHD-1 Amphibious   Assault Ship	-	-	-	-	-	-	1
- ADC(X)  Fast Combat	-	1	1	2	2	3	3
- Oceanographic Ship	1	-	-	-	-	-	-
- Joint Command Ship	-	-	-	-	-	1	1
**Total New Construction****	****6****	****6****	****8****	****8****	****8****	****8****	****9**
**Total SCN Funding ****($ B)****	****6.0****	****6.7****	****12.2****	****7.6****	****8.7****	****9.8****	****11.4**

## Tactical Aircraft(R&D and Procurement $ in Billions)

- _	__FY 99__	__FY 00__	__FY 01__	__FY 02__	__FY 03__	__FY 04__	__FY 05_
**F/A-18 E/F**
-   Quantities	30	36	42	48	48	48	48
-   Dollars	3.3	3.2	3.3	3.4	3.3	3.4	3.5
**F-16**
-   Quantities	1	10	-	10	10	-	-
-   Dollars	0.1	0.4	0.1	0.3	0.3	0.1	0.1
**F-22**
-   Quantities	2	6	10	16	24	36	36
-   Dollars	1.9	2.4	3.5	3.7	4.6	4.4	3.6
**JSF**
-   Dollars	0.9	0.5	1.1	2.7	3.6	3.7	3.3

**Notes:**
The World We Face
Depicted here are the major external variables we face.  
Threats.   Shown first are major threats, which were extensively analyzed in QDR.  These include a wide range of smaller-scale contingencies, ranging from humanitarian operations up to major commitments like Bosnia.   Such contingencies can stress our people, make readiness harder to sustain, and strain our resources.
Next, two overlapping major theater wars must remain a primary factor in our strategy, war planning, and force structure.  America and its allies continue to face major threats in Southwest Asia and Korean Peninsula, and these cannot be ignored.  
A third danger comes from growing asymmetric threats.  These consist primarily of  nuclear, biological, and chemical (NBC) weapons; terrorism; and disruption of US information systems.  Such threats are receiving greater attention in our defense plans and spending decisions.  Some spending in this area will be detailed later in this briefing.  
Technology.   The next major variable concerns where technology is taking us.  Of special note, cutting-edge developments in information and other technology are fueling a Revolution in Military Affairs, which seeks fundamental changes to the doctrine and organization of US forces.  The Nat’l Defense Panel  helped us focus on this challenge.  
Resources.  The third variable on the chart is Resources.  The dominant point here is that we are constrained within Balanced Budget Agreement.  Reflecting the Agreement, the President’s budget provides about $270 Bn  in constant dollars for Nat’l Defense.  We keep pace with inflation, but no more, and defense spending is likely to stay restrained for foreseeable future.  Every SecDef would like more $, but the President’s budget strongly supports defense.  Our big challenge is to squeeze savings out of infrastructure.  

## Missile Defense($ in Millions)

- _	__	__FY 99__	__FY 00__	__FY 01__	__FY 02__	__FY 03__	__FY 04__	__FY 05_
- NMD	1,093	1,287	1,718	1,889	1,713	1,701	1,103
- 	(FY 99 Supplemental)	(150)	(450)	(230)
- Upper Tier	778	962	929	932	858	906	1,239
- 	(FY 99 Supplemental)	(10)	(20)
- Lower Tier	782	782	759	619	565	552	475
- 	(FY 99 Supplemental)	(60)	(80)
- All Other  *	1,383	1,219	1,140	1,103	1,052	1,258	1,401
**Total Program****	****4,036****	****4,250****	****4,546****	****4,543****	****4,188****	****4,417****	****4,218**
-   Less Supplemental	(220)	(550)	(230)
**Total Request****	****3,816****	****3,700****	****4,316****	****4,543****	****4,188****	****4,417****	****4,218**
- *  Includes Air Force funding for Airborne and Space-based Laser programs.

**Notes:**
The World We Face
Depicted here are the major external variables we face.  
Threats.   Shown first are major threats, which were extensively analyzed in QDR.  These include a wide range of smaller-scale contingencies, ranging from humanitarian operations up to major commitments like Bosnia.   Such contingencies can stress our people, make readiness harder to sustain, and strain our resources.
Next, two overlapping major theater wars must remain a primary factor in our strategy, war planning, and force structure.  America and its allies continue to face major threats in Southwest Asia and Korean Peninsula, and these cannot be ignored.  
A third danger comes from growing asymmetric threats.  These consist primarily of  nuclear, biological, and chemical (NBC) weapons; terrorism; and disruption of US information systems.  Such threats are receiving greater attention in our defense plans and spending decisions.  Some spending in this area will be detailed later in this briefing.  
Technology.   The next major variable concerns where technology is taking us.  Of special note, cutting-edge developments in information and other technology are fueling a Revolution in Military Affairs, which seeks fundamental changes to the doctrine and organization of US forces.  The Nat’l Defense Panel  helped us focus on this challenge.  
Resources.  The third variable on the chart is Resources.  The dominant point here is that we are constrained within Balanced Budget Agreement.  Reflecting the Agreement, the President’s budget provides about $270 Bn  in constant dollars for Nat’l Defense.  We keep pace with inflation, but no more, and defense spending is likely to stay restrained for foreseeable future.  Every SecDef would like more $, but the President’s budget strongly supports defense.  Our big challenge is to squeeze savings out of infrastructure.  

## Revitalize DoD Facilities

- 10% increase in military construction over FYDP
- Implementation of privatization projects to increase new housing construction
- Significant increases in real property maintenance to arrest maintenance backlogs

## Defense Reform Initiative

- Streamline organizations
- Headquarters reductions and agency consolidations
- Reengineer business practices
- Paperless contracting
- Compete to improve and save
- 229,000 positions opened to competition
- Eliminate unnecessary infrastructure
- 2 new BRAC rounds

- Excess overhead threatens readiness and force structure

## Defense Budget Trends(Budget Authority in Billions FY 2000 $)

- Defense Budget Trends(Budget Authority in Billions FY 2000 $)

- Fiscal Years

_**	**__**Buildup**__**	**__**Gramm-Rudman**__**	**__**Base Force**__**	**__**BUR**__**	**__**QDR**_

- First Sustained
- Increase
- since 1985

- FY 99 Budget

- FY 00 Budget

- *  FY 99 Emergency Supplemental

## Ready for the Challenges of the Next Century

- Flawless execution of military operations
- Desert Fox and Hurricane Mitch relief
- Warfighting professionalism undiminished 10 years after end of Cold War
- Strong forces to shape security environment and respond to full spectrum of crises
- Unrivaled human and technological foundation to prepare for future challenges