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Office of the Press Secretary

For Immediate Release February 8, 1996
                           PRESS BRIEFING

The Briefing Room

1:39 P.M. EST

MR. MCCURRY: Good afternoon, everyone. I'd like to start today with just summarizing a statement we've just made available to you. On Tuesday, the President met with Vice President Gore, Chief of Staff Leon Panetta, Secretary of Defense Perry, Deputy Secretary of Defense John White, and Deputy National Security Advisor Sandy Berger to discuss the National Security Council review of the B-2 bomber acquisition options rising out of the action by Congress related to both appropriations and authorization for Fy 1996. In that meeting the President directed that several steps be taken, and I've asked Bob Bell -- Robert G. Bell -- who is Senior Director for Defense Policy and Arms Control at the National Security Council, to review the decisions that the President has made.

Bob, welcome to the White House Briefing Room.

MR. BELL: Good afternoon. The President's made the following four decisions as a result of this review of the B-2 bomber. First, the $493 million added by Congress to the B-2 program in the Fiscal Year 1996 authorization and appropriation bills will be spent on procurement of B-2 components, upgrades and modifications that would be of value for the existing fleet of 20 B-2 bombers, as recommended in the Fiscal Year 1996 Defense Authorization Conference Report.

Second, the administration will continue its current B-2 program, which includes about $7 billion over the next five years to buy, deploy and operate the 20 B-2s and upgrade them to the more capable block 30 configuration.

Third, the administration believes that no additional B-2s are required. It will not include money for additional B-2s in its Fiscal Year 1997 budget.

Fourth, the Department of Defense will, however, expand an ongoing study of deep attack munitions options to examine tradeoffs between long-range bombers, land and sea-based tactical aircraft and missiles that are used to strike the enemies rear area.

The President reached these decisions after careful consideration of the role of the B-2 in its overall defense program. The President concluded that the B-2 is a highly capable, long-range and stealthy bomber that will make important strategic and conventional contributions well into the 21st century. But additional B-2s would be too costly, particularly relative to other defense procurement priorities. We believe our deep attack needs are best met by a variety of strike aircraft and missiles -- long-range, short-range, tactical and strategic -- that work in harmony with each other.

And how I'd be happy to take your questions.

Q Will this $493 million be spent at defense contractors in the state of California?

MR. BELL: The $493 million will be spent, as indicated in the statement, to procure components, modifications and upgrades that will enhance the capabilities of the existing B-2 force. Secretary Perry will put together a specific proposal for the expenditure of that amount of money, but this direction -- spending it to enhance the capabilities of the current force, as opposed to spending it on advanced lead items for more bombers -- is consistent with the direction we've received in the Authorization Conference Report. Now that money would be spread to different purposes, and I can't give you a state by state break out.

Q Can you explain the fourth point a little better?

MR. BELL: Yes, I'm happy to.

Q -- the tradeoffs that you're talking about, is this current weaponry put on current jets that you'll be looking at in this study, or are you talking about new missiles?

MR. BELL: Well, last year in May the Roles and Missions Commission, which was headed by John White -- as you know now Deputy Secretary of Defense, made a key recommendation that the Defense Department conduct a Defense-wide review of capabilities between the services in the deep attack strike commission area. That includes a whole array of capabilities -- carrier-based air, tactical fighter units that can fly into a region, cruise missiles, ATACMs. And it also includes the bomber force.

In response to that recommendation, the Defense Department had begun a study that looked at some of these tradeoffs within that area, but they were limiting the study to tradeoffs between the munitions, the missiles that these air craft and bombers carried. So what the President has done now, responding to concerns that have been raised over the last year particularly by members of Congress with regard to tradeoffs across service lines, looking at air craft and platforms in addition to the munitions, is to direct that this study be extended.

So what the Defense Department will do now is organize a second phase of this current study. The current study was due to end in the summer. And we will ask the Defense Science Board to work with us to make sure there is a very rigorous analytical methodology for a part two of this study. That part will go from summer until the end of the year and will examine tradeoffs, including options that would involve more than 20 B-2s as matched against carrier assets, tactical fighter assets and missile assets.

Q So there's a potential that the B-2s could -- you could buy more B-2s if the study recommends that? The B-2 program isn't dead after this 20 purchase?

MR. BELL: Well, we have no plans to buy additional B-2s beyond the 20. We've concluded and revalidated in this review that 20 is the correct number. But we accept the fact that there is need not only as recommended by Congress, but as recommended by the Roles and Missions Commission, to take another look at this issue of tradeoffs across lines between services and across platforms. And that study will come in by the end of the year.

We don't have an assumption as to how it's going to come out. We'll simply await the results, but we will receive the results in time to inform whatever decisions we make this time next year with regard to the Fiscal Year 1998 budget request.

Q Can you give us the latest estimate, given all the R&D and all the costs related, how much one B-2 now costs?

MR. BELL: Sure. If you go to Palmdale, California, and roll a B-2 off the line, the unit cost will -- the fly-away cost of that bomber is about $700 million, $700 to $800 million. If you take into account, though, the cost of operating it, manning it, equipping it and sustaining it through its life cycle, let's say 20 years, and you bought 20 additional B-2s, and you calculated that on a year-by-year cost -- in other words, then-year dollars, it would cost $30 billion to buy 20 more B-2s and operate them for 20 years.

So you have to distinguish between fly-away cost and life cycle cost.

Q Does the fly-away cost include all the initial R&D that went into the development of the B-2?

MR. BELL: Yes, the fly-away cost is what would it cost now to produce one more, including its share of the initial developmental cost.

Q So you're saying $30 billion a year for these 20 --

MR. BELL: No, $30 billion to buy 20 B-2s and operate them for 20 years.

Q Besides the cost factor, what are some of the other reasons that you feel that buying more of them, building more of them is not warranted?

MR. BELL: I think you have to look at the total mix of capabilities that we have in our Armed Forces in this deep strike area. Now, if your assumption is that in a major regional conflict we will have some degree of warning, will mobilize our forces and reenforce in the theater, will bring more carriers in and deploy hundreds and hundreds, if not thousands of tactical fighters into that region, and then put them into the conflict -- what the studies that were conducted last year showed is that the B-2 increment of extra capability is very modest. It's not that the B-2 wouldn't make a difference. The B-2 makes an enormous difference. It's that the increment of capability is very modest. And you have to measure that then against this $30 billion price tag.

So the argument for buying more B-2s that's been made by the proponents rests on assumptions about the extent to which you can count on having the time or capability to reenforce in a region with all of the assets you have, as opposed to a come-as-you-are war where you have to attack the enemy from home bases in the United States only with our bombers.

Q Just to try to clear up what someone was asking a minute ago, because of this study going on, does that mean that you can't exclude that at some point in the future you might decide that, yes, we do need more B-2s?

MR. BELL: We do not rule out the possibility that the study could come in and provide an analytical basis for concluding that buying additional B-2s would be more cost-effective than maintaining other assets in the force. But we don't presume that. We're not putting money to hedge against that in the '97 request and we're not changing our five-year military spending blueprint to add extra money. So the five-year plan remains even with regard to the B-2.

Q How long will the study take place?

MR. BELL: Six months, from when the Defense Science Board blesses it this summer to when it's finished at the end of 1996.

Q Is it the administration's position that the $493 million is a prudent expenditure, or are you going along with it only because Congress wants it?

MR. BELL: Our determination was, particularly since you're deciding to keep the B-2 force at 20, and given that the review confirmed the enormous importance of the B-2 in our overall capability, it's all the more important then to get maximum value out of that force of 20. And what we realized as we focused on this the last few weeks was if you take the $493 million and apply it in selective ways against specific capabilities, you get a multiplier effect. You can enhance the value of the 20 bomber force.

Q Are you saying that Congress was right and the administration was wrong earlier when you were saying, look, we don't want this extra money?

MR. BELL: Well, Congress was of different minds with regard to that money. The appropriators in the appropriations bill that was enacted last fall directed that the $493 million be spent not to enhance the value of the current force, but to buy the long lead items towards the 21st and the 22nd bomber. And a good deal of their use of that money would have gone to putting back together the production team for the B-2. Then the authorizers came in in their bill -- which, after all, we have only judged in the last week to be a bill that the President will enter into law -- they eliminated the cost cap on the program, and eliminated the cap in law that had held the program at 20 aircraft, but in sort of a contradictory way, they directed that the money be spent not for more bombers, but to make the existing bombers better.

And the basic rule of legislation, as you know, is the last law rules, so we feel that the intent of Congress, as most recently expressed here, is to spend the money to enhance the current force.

Q How many of the B-2s are now in service?

MR. BELL: There are eight B-2s presently on the ramp, or at least that are being operated by the bomb wing at Whiteman Air Force Base in Missouri. The first operational squadron of eight will be stood up and be available for operations in Fiscal Year 1997. By the year 2000, all 20 of the B-2s not only will be deployed, but all 20 will have been upgraded into this far more capable block 30 configuration.

So there's going to be a very rigorous B-2 program going on at Palmdale for the next four years. It's mainly focused now though on retrofitting and upgrading the earlier model planes to the block 30 configuration.

Q No B-2 has yet served in any operational capacity?

MR. BELL: The squadron has not been declared operational. It's not met it's initial operational capability, its IOC. That's about a year away. But the B-2 is in the Air Force's hands -- they've had it since December 1993 -- and they are operating them with great results. In fact, just this week on Monday, the bomb wing at Whiteman flew two B-2s in formation on a 19-hour mission where they flew across the Pacific to a bombing range in the Marianas, dropped bombs and then landed.

Q But that was just a training exercise.

MR. BELL: Well, it 's the process by which -- (laughter) --

Q This was a stealth mission. (Laughter.)

Q Were any B-2s ever used in Bosnia for a real mission --


Q -- as opposed to a training mission?

MR. BELL: It wasn't used in Bosnia because the unit's not been declared operational yet. In a crisis, 7

Q Were any B-2s ever used in Bosnia for a real mission, as opposed to a training mission?

MR. BELL: No. It wasn't used in Bosnia because the unit's not been declared operational yet. In a crisis you could put them to use. In Desert Storm, for example, as you recall, we put the JSTAR aircraft into use even though they were still in a test phase.

Q Was any consideration given to seeking a rescission of this money?

MR. BELL: Well, we looked at all the options with regard to the money. But as I said, the situation has changed in the last few weeks. When the appropriations bill passed, you had the extra money, but you still had in law a cap on the program at 20, and a cap in law on the total dollars that could be spent on the program, and the Air Force was at the cap. So there was no way, under that law, to spend the $493 million, which is why there were early indications from the Defense Department that they would seek rescission of the money.

It was only in the last two weeks that the picture became clear, once we realized that Congress was going to go back, revise the vetoed authorization bill into a form the President would accept. And with that came the certitude, then, that the cost cap would be removed and the cap at 20 bombers would be removed. And given that set of new developments, we concluded, particularly since we decided to hold the program at 20, that the wisest thing to do was to expend the money on making the existing 20 more capable.

Q You've articulated really well the Pentagon's own arguments for not buying more B-2s -- the $30 billion tail and all these other costs. What did you do in this fresh look that was different than what the Pentagon's already done? What did you do to come to the same conclusion the Pentagon's been screaming about?

MR. BELL: Well, we revalidated the basic tradeoff here, and we laid out for the President the pros and cons of a range of options. But, basically, what we did in the study was frame for the President this choice -- and in a sense, it's a dilemma -- the choice between the extraordinary capabilities of this bomber, particularly in a particular scenario where you cannot get any tactical fighters into a region and you have to fight the war from long range, versus the cost. And it comes down, in the end then, to an issue of insurance and how much you're prepared to spend to take out the insurance against that contingency.

Our conclusion was, we did not need to spend $30 billion to ensure against that scenario, because we felt there were other ways we could deal with it if the situation attained.

             THE PRESS:  Thank you.
             END                          1:55 P.M. EST