View Header


Office of the Press Secretary

For Immediate Release October 14, 1997
                                 PRESS BRIEFING
                          OMB DIRECTOR FRANK RAINES

                            ON THE LINE-ITEM VETO

The Briefing Room

2:20 P.M. EDT

MR. TOIV: Good afternoon, welcome to the White House and welcome to our listening audience to the south. We have today to brief on the President's exercise of the line-item veto today OMB Director Franklin Raines, Bob Bell who is the NSC Senior Director for Defense Policy and Arms Control, and Deputy Defense Secretary John Hamre.

DIRECTOR RAINES: Good afternoon. My name is Frank Raines. I'm the Director of OMB. I've been asked to begin by reading the statement that the President issued today regarding the line-item veto.

And so this is the President's statement: "Over the past four-and-a-half years, my administration has worked hard to cut the deficit and to ensure that our tax dollars are used wisely, carefully, and effectively. We have reduced the deficit by 85 percent, even before enacting the historic balanced budget legislation this past summer.

The line-item veto gives the President an important tool to save taxpayers' money, avoid unnecessary government spending and ensure that the national interest prevails over narrow interests. It will enable America to continue the fiscal discipline that has helped create our strong economic expansion. And by allowing a President to sign important legislation while cancelling projects that do not meet important national goals, it will change the way that Washington works.

America must -- and will -- continue to have the world's strongest military. We have an obligation to manage our defense budget with both national security and fiscal responsibility in mind. Every penny of our defense dollars should be used to sustain and strengthen the best-trained, the best-equipped, and the best-prepared armed forces in the world.

Today, for the third time, I'm using the line-item veto to cancel 13 projects inserted by Congress into the Department of Defense's appropriations bill. These cancellations will save the American taxpayer $144 million. This use of the line-item veto will help ensure that we focus on the projects that will best secure our strength in the years to come.

I cancelled the projects because they were not requested in my Fiscal Year 1998 budget and, because either they were not contained in our future years' defense program or the Department of Defense determined that they would not make a significant contribution to U.S. military capability.

In two cases, I cancelled items that had broader policy implications for longstanding U.S. national security policy. I have been assured by the Secretary of Defense that none of the cancellations would undercut our national security or adversely affect the readiness of our forces or their operations in defense of our nation.

As I said last week, I will continue to scrutinize other appropriations bills using appropriate criteria in each instance and I will exercise the line-item veto when warranted."

So that's the statement that the President issued in Brazil in announcing his decisions regarding line-item veto. I'd like to give you an overview of the President's decisions, then Bob Bell will talk in particular about two decisions that have broader policy implications. And then John Hamre, the Deputy Secretary of Defense, will give you a little background on the process that we've gone through in coming up with the President's decisions.

The President used his line-item veto authority today to cancel 13 projects that Congress added to his request for the 1998 Department of Defense Appropriations Act which he signed six days ago. The President's action will save $144 million in budget authority in 1998.

Overall, the President requested $243.3 billion for DOD. Congress added a net $4.2 billion. And within the total that Congress did provide, they added about $11 billion for over 750 unrequested projects. Congress offset this cost in part by making across-the-board cuts in weapons procurement and R&D programs and cuts in other requested items.

The President, in making his decision, he has accepted the great bulk of the added $4.2 billion in added funds and the vast majority of the additional projects added by Congress. Indeed, the fact that Congress had added a project was not sufficient grounds for its cancellation. The President's decision to exercise these vetoes is consistent with his legal authorities, his commitment to the nation's security needs and his understanding of the important role that Congress plays in the budget and appropriations process. In each case, the Department of Defense has determined that there is no national security requirement for the item that is being cancelled.

I'd like to now quickly review for you the items that were cancelled. I will do 11 of the items and then Bob Bell will pick up on two of them. You will receive a packet that has a page on each of the items.

The first item cancelled is for the SR-71, and there, it appears -- we have it down as listed as one; there are actually two separate parts to this one item. The SR-71 is a high-speed, high-altitude, long-range, multisensor, all-weather, wide area surveillance aircraft. There is no military requirement to continue to operate the SR-71 and the project is being cancelled because the Department of Defense has determined that is does not now make a significant contribution to U.S. military capability.

The next item was titled in the appropriations report as the Gallow Center. This was a project to demonstrate new technology for the industrial base and to train the industrial base in new technologies, particularly relating to life cycle, environmental and manufacturing technologies related to weapons systems and munitions technology. The Army, where these funds would have been used, does not believe that the additional research merits funding at this time.

The next item was a $6-million item for Molten Carbonate Fuel Cells technology. This project would provide research and development for alternative fuel cell technology that converts chemical energy to electricity. There are several projects included in the bill related to the same technology. The ones that had a military application have been retained. This one has been cancelled because it would not make a significant contribution to U.S. military capability.

The next item is $3 million for Periscopic Minimally-Invasive Surgery. This one, in addition to the next one, the proton beam project, are health-related items of research that do not make a significant contribution to U.S. military capability but, moreover, also have not been subjected to the peer review process which the department utilizes in determining how to make health research investments.

There is a project for the Navy, a $3-million project, called Terfenol-D. This is a project to try to develop a new application of an alloy to be used with sonar systems and it's an application onto the sonar system. The project is being cancelled because it is not believed that it is necessary for military capability.

The next project is a $3-million project for a commercial, off-the-shelf airgun as an acoustic source. This was a project to use a commercially available airgun to produce acoustic signatures that would be in theory useful for tracking submarines. It was determined that this would not be sufficiently valuable except in shallow water regions where there's no current requirement for such capability.

The next project is a $10-million project for a Military Spaceplane. It would have provided research funds for hypersonic technologies and is intended to complement a NASA program. However, the Department of Defense -- this does not meet a Department of Defense requirement and, therefore, it is being cancelled by the President today.

The next one I will mention is an optical corellator technology, a $1.5-million project for research on this technology, and it's being cancelled because of the lack of contribution to national security.

There is a project for $2 million for risk-based toxic chemicals research. This is related to remediation of toxic waste at waste sites. It would instead duplicate research that's already ongoing in the Department of Defense and therefore is an unnecessary expenditure.

The next one is Defense Techlink Rural Technology. This was a project to develop a real technology model for a five-state region. And it was being cancelled because of the determination of lack of contribution to national security.

So those are the 11 items that were handled as a result of our analysis here. Bob Bell will now give you information on two other items that are being cancelled not only because of their failure to pass this examination, but also because of our past policy positions.


MR. BELL: Thank you, Frank. The first of the two projects is the Clementine Asteroid Intercept Technology Demonstrator. This is a project that was not requested in the President's Fiscal Year 1998 budget request, and it is not in the Pentagon's future years defense program. It's a $30-million add-on that could over time end up costing in excess of $100 million.

This is really a program that had its roots in the SDI heyday of the 1980s. In its first version, Clementine I, in the early 1990s, this was a program that applied elements that had been developed during the SDI space-based laser research effort done by SDIO in the 1980s to actually map the lunar surface. And Clementine II, which has the same name and pretty much the same design team but a different and Clementine II, which has the same name and pretty much the same design team but a different concept, doesn't draw on lasers but, instead, draws on some of the work that was done in the early days of SDIO on space-based kinetic kill intercept technologies that were associated with a program that was called Brilliant Pebbles.

The Clementine proposal that we are cancelling with this action today includes an option for orbiting in space a so-called mother ship that would, on three separate occasions in 1998 and 1999, launch micro-satellites, or homing vehicles, that would impact three asteroids that are projected to fly by near earth during this two-year period.

Now, proponents of the program in Congress claim benefits for asteroid research; but this is the Defense budget, not the NASA budget. We believe the main application of this technology more logically would fit within the space-based missile defense mission area. Now, obviously, there is a lot of commonality between the scientific and technological challenge of detecting, tracking and intercepting an incoming asteroid and that of detecting, tracking and intercepting an incoming missile warhead. There are differences, to be sure, but the point I want to emphasize is that the proposed asteroid intercept tests have not yet been submitted to the Pentagon's Compliance Review Group or to lawyers in the relevant national security agencies for any assessment of the compliance of such tests with the ABM Treaty.

And equally important, our own development program within the Department of Defense for a possible national missile defense deployment option, an option which we believe could be exercised as soon as 2003, does not include space-based weapons in its architecture. Now, the Ballistic Missile Defense Office, BMDO, is carrying out some advanced R&D on possible space-based interceptor technologies involving both lasers and rockets. But that is the kind of very advanced research that is permitted under the ABM Treaty.

So, in summary, the Clementine II program is not needed; it's not in budget, it's not in our future budget; and, we are already conducting advanced research in some related missile defense areas.

The second program is an army kinetic kill anti-satellite, or ASAT interceptor. And as with the Clementine II program, this is a program, again, that was not requested in the President's Fiscal Year 1998 budget, it' s not in the Pentagon's future year defense program. It's a $37.5 million add-on this year that could result in expenditures well in excess of $100 million if you were to eventually deploy a global operational capability. Now, this is a specific program that this administration terminated in 1993 and that remained dead for two years before Congress resurrected it two years ago. We simply do not believe that this ASAT capability is required, at least based on the threat as it now exists and is projected to evolve over the next decade or two.

To be sure, there are potential adversaries such as North Korea or Iraq which could try to employ space-based assets against our forces in a possible war, including for communications, navigation, targeting or surveillance missions. But we are confident that alternatives exist to negate or disrupt such efforts, including destroying ground stations linked to the satellite or jamming the links themselves.

So, in sum, as with the Clementine II program, this program is not needed; it' s not in our budget or our future year defense program; and, alternative approaches are being pursued.

MR. HAMRE: My name is John Hamre. I'm the Deputy Secretary of Defense. I get to do the boring part of this briefing to tell you what we did on a process basis over the last five days. Every year when the appropriations conference concludes, it really represents the conclusion of just a year-long process. We literally have hundreds of hearings, thousands of hours of testimony, probably tens of thousands of meetings, and it results in a bill that has about 5,000 line-items in it, of which 750 were items that were not in the original President's budget.

Far the bulk of those items we know about because we worked with members of Congress during the year to help inform them about what our goals were and our priorities and, in large measure, they were very supportive of the President's overall program. There were about 85 to 90 items that we just didn't know too much about, things where there wasn't a clear track record in the legislative history where you would know exactly what it was that was being proposed. And so we spent the last five days really researching those, working with the Congress, and we worked fairly closely with them.

Once we got their input, got a better idea about what was to be contained in these programs, we then went and took that data and went to each of our military departments and went through and did a fairly serious scrub to find out what is the military value of these programs. And it resulted in the list that you see before you. These are the items for which we really don't have a military requirement in the Department.

So it was fairly detailed. I must say I haven't slept five hours in the last three days, I think. But it's a fairly detailed review, carefully reviewed with members of Congress to understand what was the Congressional intent, reviewing with the military departments in our laboratories, and it resulted in this list.

DIRECTOR RAINES: We would be happy to take any questions that you might have on the President's decision today.

Q In terms of the overall bill and the overall add-ons, the President struck fewer items in this bill in dollar terms and in absolute terms than in the much smaller military construction bill, and yet you indicated that they provided $11 billion worth of stuff you had not requested, and, net, you're really $4 billion, I believe -- the bill is $4 billion over -- why did the President wimp out?

DIRECTOR RAINES: This legislation is different from the military construction legislation in that the military construction legislation was fairly homogeneous. It was a group of construction projects, and one of the major criteria on those construction projects was whether or not they could be completed during Fiscal Year 1998 or whether they were, instead, keeping us from doing high priority construction projects. And in applying that test, we came up with a number of projects that the President vetoed. I believe it was 38.

This bill is much more heterogeneous. It has the full range of everything from pay for our military to the highest technology projects. We said before that we would choose criteria that were appropriate to each bill. In this bill -- it's a very large bill, we only had five days to look at it -- we did, I think, a pretty good job of identifying those projects which were, in our judgment, had the least justification on their face. And then the Department was able to look at a list and then come to a determination on a systematic basis as to their national security merit. But we don't have any quotas on these bills. We don't have any minimum number of vetoes or a maximum number. It is what comes out of our analysis that we were able to do in the five-day period. We are satisfied that the projects that the President has vetoed here are deserving of being cancelled and other projects may have been close calls. But we tried, in every case, to defer to the judgment of Congress where it was simply a matter of a difference of opinion on items of which there was a close call, and I think that is appropriate in the exercise of the line-item veto.

Q Was some of this, let's say "caution," a result of the charges being hurled at the administration from Capitol Hill, you know, the abuse of power, using the line-item veto in a way that it was not intended, excessive, et cetera, use of the veto?

DIRECTOR RAINES: I don't think so. I think every project included in the appropriations act has a strong advocate. If it didn't have a strong advocate, it wouldn't be there. There are a lot of competing ideas on the Hill, and so I don't think anyone is surprised that those who favor projects would react negatively to their being cancelled.

Our examination of this bill was really driven by the content of the bill and the content of the various proposals that are included within it. Indeed, one might say that it was quite remarkable how much of this bill did reflect items that were in the future year defense plan program. It is -- overwhelmingly, the additions in this bill are things that are included in the future year plan, and so from that standpoint, it is not a bill where Congress has gone way outside of the range of things that our military leaders have identified as their priorities.

Q To follow up on Leo's earlier question, can we assume that you reviewed the 750 projects and found that 737 of them added by Congress do have adequate military justification, do make sense for the national security, both this year and in the out-years, including $250,000 in research for the building of a new cruise ship for the Hawaiian Islands and 736 other items?

MR. HAMRE: Let me speak, if I may, in general terms to this. I think this bill reflects the fact that we worked very closely with the Congress all year long and the bill largely does reflect the priorities that the President had for national security. So it was not hard for us to go through far the bulk of the items.

There are items that have more -- probably are stronger from a defense perspective than others but, frankly, there are items in our budget request that are more directly related to defense and things that are more secondary in nature but they are still important. For example, we have funds in our bill for economic conversion at the communities that are being closed. That's not purely a defense expenditure, but it's part of being a good neighbor. It's part of being a responsible employer.

What you are seeing are projects, for example, that are in that category, not directly important, probably, for immediate national security, but they are part of a broader fabric where we are a responsible employer and a good neighbor in communities, and that became part of the criteria. It wasn't really different from the way we put our budgets together.

On the issue of the cruise ship that you mentioned, this was a very specific item that we looked at very, very carefully. In one sense, it's not a defense issue at all; this is about finding ways to help build commercial vessels in American shipyards again and provide enough of a market guarantee so that it's good business sense to build those ships in American shipyards.

What was our interest in DOD? Our interest is trying to find a broader business base for our shipyards. Right now, we're about the only business that's going on in American shipyards and; therefore, we pay virtually 100 percent of the overhead. If we can get commercial ships built in American shipyards, we are going to get a direct benefit in the Department of Defense. And our estimate is, depending on the range of this program, could be from tens to hundreds of millions of dollars of savings for us. So it's not -- it isn't directly a defense issue, but it has direct implications for us.

Q One other question, a specific question, on the SR-71. When did those things go out of the operational inventory?

MR. HAMRE: They were first proposed to be retired in 1989. And I believe that we inactivated the fleet in 1991.

Q And Congress has been trying ever since then to try and keep them alive or held over?

MR. HAMRE: They have been sustained -- they have been sustained since that period through additional funding provided by the Congress.

Q And would these too, if these vetoes are upheld, would that kill the SR-71 operations entirely?

MR. HAMRE: It's really not operational in the sense that it was before 1989 when we were actively using it in reconnaissance. It's now used more for research purposes. And it would, as I understand it, suspend further work in that area.

Q It would ground it entirely?

MR. HAMRE: That's my understanding.

Q How many are there?

MR. HAMRE: I believe that there are three. I think that's the number.

Q It was really a successor to the U-2, wasn't it?

MR. HAMRE: It was but it had a very different operational regime. And, of course, we continue to operate the U-2 but as a tactical reconnaissance asset now. The SR-71 was designed --it flew at very high altitudes and, in many ways, its mission was obviated when other national capabilities emerged in the '80s.

Q -- you've got satellites that can --

MR. HAMRE: Yes, sir.

Q If I could ask one other specific question on an item not cut. There's been a lot of talk about the eight C-130Js added to the budget where I think one has been requested. What was the thinking there?

MR. HAMRE: Well, the average age of our C-130 fleet in the active Air Force is 23 years. That's an old fleet and it gets older basically on a year-to-year basis. Congress found the means to be able to give us eight additional aircraft to help modernize that fleet and we found that had positive value.

Q You talked about how work-intensive this is to go over, to scrub this, to do this in five days. Would you say that while the bill was being written that the objections that the administration had were voiced to members of Congress on most, if not all, of these?

DIRECTOR RAINES: Yes. We, both in our larger communications in statements of Administration policy and in direct communications from the department, have expressed opinions on all -- I believe all -- of these items that have been cancelled.

But, as John Hamre said, one of our projects in the last five days was to even identify the substance of a number of these items because they are only identified in the report or the bill by a title. And so we had to identify well what was meant by this project. And, in some cases, when it was described we knew what that was and it was something we found to be of value. And, in other cases, when it was described we found it not to be something of value.

Q So assuming that the President gets to retain the line-item veto authority and this process goes forward into next year, what is your hope about being able to sit down before the bill comes to the White House in a more intensive way to identify these items so that it works perhaps in a better fashion for both the White House and Congress?

DIRECTOR RAINES: Well, the President has emphasized that he thinks the most important aspect of the line-item veto is how it will affect future behavior, not necessarily the items in the bills that he's dealing with now. And I think the most important part of changes in future behavior is to have greater communication between the appropriators and the administration so that we're quite clear on what our views are on various subjects and that we are part of the discussions that go on. I think if we can do that successfully in the future, there will be fewer and fewer line-item vetoes because we will have worked out these issues and our concerns would have been adequately represented in their deliberations.

So that's our hope. Our hope is that in the future the President will have no line-item vetoes because all of this has been worked out in the legislative process.

Q Do you see that happening in this process? You've still got a half a dozen more appropriations bills that are being negotiated. Do you see a more responsive or a more communicative Congress or have they got their backs up?

DIRECTOR RAINES: Well, I would say it is very bill-by-bill in this appropriation season. In some cases, we've worked very closely with the subcommittees or with the conference committees, in other cases, not as closely. I think we can all do a better job.

But we view this as a longer-term process, much as when, you know, in 1921 when Congress created the Bureau of the Budget because it found it needed help from the Executive in dealing with budgets. And instead of having individual items sent up by departments, they said, "No, no, let the President do it first and then have him send up something that's comprehensive so we have something to start with." That was a Congressional initiative to help them.

I think that the line-item veto can also be helpful in ensuring that projects have had the opportunity to be scrutinized not just in the legislative process but also utilizing the resources of the Executive Branch.

Q You said that you spent a lot of time conferring with Congress in the last several days. Doesn't this contrast sharply with way you handle the MILCON bill? Did you make some mistakes do you think in handling MILCON and sort of learned from those lessons and the criticisms on the Hill?

And secondly, how do you explain to the American people that you've gone through one of the largest spending bills that Congress passes every year -- it all being in the hundreds of billions of dollars -- but you could only come up with about $140 million worth of cuts?

DIRECTOR RAINES: Well, the President's proposal for the Defense appropriation bill was a very closely scrutinized proposal and one that we believe met the national security needs of the nation. We made an adjustment in our investment during the budget process and the budget negotiations, and that resulted in an increase in the resources being provided. So that we have already had a process of scrutinizing this bill and eliminating items that were not needed early on in the process.

So this is the tail-end of the process in which we are looking -- utilizing a means in the line-item veto. It's not perfect. I mean, for example, if there was a case where money was added to an item that the President requested, we have no capability of just knocking out the amount that's added. And so we can only deal with individual items that are specified. So it's not a perfect vehicle. But I believe it is one that is going to produce tremendous results for the taxpayer because of what I said before, and that is that we believe it will affect behavior and indeed I think it already affected behavior in this bill. And we have a bill that's a lot closer to our military plans than some bills in the past.

You had a first question; I've forgotten it.

Q Do you think you've made some mistakes in the way you handled the MILCON bill, you think, in hindsight?

DIRECTOR RAINES: Well, we had some data problems in the MILCON bill --

Q Consulting with Congress before you made the decision?

DIRECTOR RAINES: The MILCON bill actually was quite different. We knew what all those projects were. There was no question as to what they were. There was a question in terms of data collection as to the status of their planning.

In terms of consultation, the one thing I've learned in this town is that it's impossible to do it and it's always in your own interest to do as much as humanly possible. And so I think you will see that we worked very hard at that on all of these, but it will always be inadequate because there are a lot of members of Congress, there are a lot of items, and we've only got five days to accomplish it all.

Q Mr. Raines, there seems to be two baselines with regard to how much money Congress added. You mentioned the $4.2 billion over the President's initial request, but you also have in the fact sheet a net addition of about $1 billion. Is that a net addition over what you conceded in the balanced budget agreement?

DIRECTOR RAINES: They have added about $1.2 billion over what the balanced budget agreement called for, and they did that by transferring funds from other areas, particularly in the Energy Department area. Some of that went to the military construction bill, about $600 million; $1.2 billion came to this bill. So that they are over the amount that was implicit in the agreement, but they are not over for the defense function as a whole. So for the defense function they are fine, but they shifted money within the defense function away from the Energy Department-related functions and into military construction and the DoD appropriations bill.

Q In a way, you've conceded $3 billion, about $3 billion, in the balanced budget agreement over your January figure?


Q And now you are conceding, in effect, another $1 billion?

DIRECTOR RAINES: Well, it's really -- I don't really look at it as a concession. We opposed the transfer from the Energy function because we believe there is important work to be done there in terms of our stockpile maintenance, as well as the cleanup of former weapons plans. So it would have been our preference to have left the money on the energy side. We believe there are issues there that are going to be needed.

But the only way to really deal with the additional $1.2 billion would be to veto the entire bill, and given the effort that Congress made to stick very close to the President's priorities, we did not believe that to be appropriate.

Thank you.

END 2:56 P.M. EDT