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Office of the Press Secretary

For Immediate Release January 5, 1999
                           PRESS BRIEFING BY 
                           The Briefing Room    

1:10 P.M. EST

COLONEL CROWLEY: Good afternoon. In about an hour and a half, the Chiefs of Staff of the military services will be up on Capitol Hill testifying before the Senate Armed Services Committee on military readiness. This weekend the President devoted his radio address to talking about steps the Clinton administration has taken to stay ahead of the readiness needs of the military. And we thought it would be useful to establish a context for the discussion this afternoon in terms of both how current initiatives to help protect readiness, both in the near-term and the long-term fit in with the budgetary trends that we've seen in defense in recent years, and over the past decade or so. So here to help you with that context is Robert Bell, Special Assistant to the President for National Security Affairs.

MR. BELL: Thank you, P.J., and thank you, Sam. Good afternoon. When President Clinton took office in 1993, it's important to appreciate that we were in the 8th straight year of declining defense budgets, measured from the fiscal year 1985 peak, during the buildup under President Reagan, and in the aggregate over those eight years that preceded this administration taking office, defense spending in real terms -- in other words, adjusted for inflation -- had already been reduced by 25 percent.

President Clinton ran for President in 1992 on a defense platform that explicitly called for further restraint in defense spending, but only about five percent more than was being projected by President Bush and then Secretary of Defense Chaney in their last outgoing budget. And that assumes, of course, that you can accept those budget projections as the numbers that would actually have been delivered.

In other words, there was about a $60 billion difference measured over five years in the campaign that was the distinction between the Bush position and the Clinton position on defense.

There was a reason why President Clinton, during the campaign, called for that restraint on defense, and it was epitomized in his slogan of "shared sacrifice, shared austerity." President Clinton believed fundamentally, as we still do today, that a strong national security posture must be underpinned by a strong economy, and to get out of the deficit cycle we were in, defense was going to have to do its part to help balance the budget. In fact, this plan, over the course of those six years, worked, and worked spectacularly.

As the President was able to announce in September, we had a surplus in the federal budget for 1998 of about $70 billion, when in 1993 when he took office the projection for that year had been a deficit of $350 billion -- in other words, a swing of $420 billion. And we're now projecting surpluses over the next decade totaling about $1.5 trillion.

We're also experiencing, as the President underscored last fall, the lowest inflation, the lowest unemployment rates, the lowest crime rates, the lowest number of welfare recipients in the last 25-30 years.

Now, I mention all of this because all of these achievements contribute to the national security both directly and indirectly. It's obviously in the interest of the Defense Department to have lower inflation and thereby reduce the cost of future weapons procurement. And it's obviously in the interest of the men and women in uniform and their families to have achieved all of these results on the domestic scene.

But even within the constraints of this six-year deficit control policy, the defense spending under the first six years of the Clinton administration only declined in real terms -- again, adjusted for inflation -- by about 12 percent. In other words, less than half the rate of decline that had been experienced during the previous eight years of the second Reagan term and the Bush administration.

There are several reasons for this. In part it was because we projected robust defense budget levels from the beginning; and in part, it's because the President, on more than one occasion accepted the recommendation of the Secretary of Defense, whether it was Les Aspin or Bill Perry, to increase the previously projected defense spending level for the Department of Defense across its future year defense program. And on several occasions, including during the balanced budget agreement negotiations, the White House, with full support of the Secretary of Defense and the Joint Chiefs of Staff, did battle on the Hill to get higher defense numbers than were being projected under the approved congressional budget resolutions.

Nonetheless, over the course of the last year, serious readiness concerns became apparent. And all of you have been reporting on this story over the course of the last year and pointing to specific cases that have come to our attention. Now, why has this occurred? In part, it's because Congress refused to give us the authority we have sought for two consecutive years to reduce our base infrastructure and close additional bases. In part, it's because we've not gotten the cooperation we sought from Congress on legislative reforms to achieve greater contracting efficiency.

In large measure, it's because there continues to be too many, simply too many congressional procurement add-ons that distort the balance of our defense budget -- for weapon systems or equipment or programs that are not requested either in our budget or, last year, in the case of about $2 billion worth of add-ons, not even on the individual service wish list. In part, it's because it's taken longer than we had hoped for the Duma to act on START II, and we haven't gotten as far down that slope as we wanted towards the reductions called for at the Helsinki Agreement of 1997 in strategic nuclear forces.

And in part, it's because we've had to go through a continuing cycle each year with Congress -- and this certainly predates this administration -- of having to take money from readiness accounts to pay for contingency operations and then come back to the Hill months later to get reimbursement in the form of an emergency supplemental, and that causes a distortion in readiness plans of the services.

And finally, I would mention that, in a sense, we've been a victim of our own success on the economic front, because it's precisely this vibrant and rebuilt economy that's been produced by this fiscal austerity that is now exercising a magnet-like force on the men and women in uniform in terms of drawing them into the private sector and increasing the cost within the context of an all-volunteer force of meeting our recruitment and retention goals.

Over the last nine months, the President has moved on five separate fronts, five separate occasions, to address these concerns and to ensure that we maintain the very high levels of readiness and proficiency that were demonstrated so admirably, yet again, during Operation Desert Fox. First, in the late spring last year, we sought and won congressional approval over the opposition in many quarters of funding for $1.85 billion in contingency operations in Bosnia and Southwest Asia, scored as emergency funding; in other words, money that was added to the defense accounts rather than forcing the services to pay for those operations out of their readiness accounts.

Second, in the late summer, we proposed and won congressional approval for a $1-billion reprogramming for readiness accounts -- taking money from lower-priority programs or accounts and moving it into key readiness accounts. Last fall, we won a $1.9-billion emergency supplemental authority for what will be the cost of Bosnia operations in this fiscal year, Fiscal Year 1999. And, there, too, that was in the face, in some quarters, of strong opposition where, for example in the House, the decision had been to force the Pentagon to absorb those costs rather than treat it as an emergency spending.

Fourth, we won approval last fall, also, of a $1.1 billion emergency supplemental dedicated exclusively to key readiness requirements. And last, but certainly not least, over the last 14 weeks, dating back to the President's meeting at Ft. McNair in mid-September with his commanders-in-chief and service chiefs, the President has developed in very close consultation with Secretary Cohen and General Shelton the long-term plan that he discussed in his radio address on Saturday which, consistent with his priority of saving the surplus to fix Social Security first, will provide for, first, a major initiative on pay and retirement, which was described by Secretary Cohen and General Shelton just before Christmas; second, a $12-billion increase in the Fiscal Year 2000 budget -- in other words, the budget we'll submit in a few weeks -- for defense readiness and modernization through a combination of new spending and budgetary savings; and last, about $110-billion increase through Fiscal Year 2005 -- in other words, through the current Pentagon future year defense plan, to meet the most critical requirements that have been identified by the chiefs and the commanders-in-chiefs to be able to execute the national military strategy.

So, as the President said on Saturday, this will be a six-year effort that will represent the first long-term sustained increase in spending in a decade. And with that I'll stop and take your questions.

Q I may have missed something, but is the administration going to push again for more base closings this year, or what's your position on that?

MR. BELL: Yes.

Q Any specifics on that?

MR. BELL: Absolutely. We continue to believe that we need authority from Congress -- legislative authority -- to conduct two additional base closing rounds, starting in fiscal year 2001. The old base closing authority expired with the last round that we did, in 1995. And we need new authority -- in fact, our budget projections assume that we'll win approval of that. So it's going to be incumbent on Congress to cooperate and give us that authority.

Q How much do you assume you'll save by having those base closings, which may not happen?

MR. BELL: Well, there's several billion dollars within the boundaries of the future year defense plan -- in other words, through fiscal year '05, that are associated with winning approval for those two rounds. In the long-term, of course, the savings would be much, much greater. It takes a while, in any base closing process, before the lion's share of the savings become available.

Q In the list of items that you listed as reasons why all of this happened up to this point, does any blame attach to the administration? Is there any little thing that the administration did wrong? Or is it all this other stuff -- Congress, a good economy?

MR. BELL: Well, I think it's important to understand what we were trying to do and the hand we were dealt. I mean, the nation, in effect, Sam, through a consensus reached not only through the campaigns, but in terms of the majority view on the Hill, came up with a rough consensus on what would be available for defense, given other competing priorities, including education, health care and everything else.

Within that context, of the balanced budget amendment, we conducted the most extensive review of our defense posture that had ever been done in the post-Cold War era, and came forward in 1997 with the Quadrennial Defense Review, the QDR report. In the QDR -- where there was a limitation on the total dollars available for defense -- we had to make some tough decisions, because we faced competing demands for those scarce defense dollars.

We had to strike a balance between the size of the force that we were going to keep on the books, to make sure we had enough combat power to win two regional wars if they occurred; to have enough troops to deploy, as we do every day -- not only for contingency operations, but for normal peacetime exercises -- without breaking the force by sending them out too much; still having enough money to get into the modernization ramp-up that we're going to require to replace the equipment from the 1980s that's now becoming obsolescent; and, perhaps most fundamentally of all, since people are the backbone of everything, the quality of life requirements for a force posture that assumes an all-volunteer structure.

And to do that, we had to make some trade-off decisions. One of the things we decided to do in the QDR was to keep the readiness capabilities of our forward-deployed and first-to-fight forces very high. But the flip side of that, the corollary of that, was a deliberate decision to back off on the readiness goals for stateside units that were slower to respond and not in the first deployments for regional contingencies. That, inevitably, led to putting this on the radar screen. As stateside units realized that reduction in their readiness, their were a lot of complaints -- not only up the chain of command, but in some cases to the media. And the anecdotal reporting began coming in as the effect of that QDR decision sunk in, and I think that's what launched the initial interest in trying to deal with the readiness concerns on a priority basis.

Now, if we had had a higher defense number out of the balanced budget agreement, for example, maybe we could have put more money into readiness for stateside units. But as I said in my lead-in, the number we got out of the balanced budget agreement was a higher number than the number than was being proposed from the Hill when we negotiated it.

But at any rate, I mean, the point here is that as Desert Fox demonstrated and as continuing tension in the Gulf demonstrates, not to mention the DMZ and Bosnia and Kosovo and Haiti and everywhere else where our forces are performing with distinction, the forces that we need to execute the national military strategy are doing their job with high readiness and performing with great proficiency.

Q Bob, does the President feel he made a mistake as a candidate in 1992 when he pledged to cut defense spending by $100 million through 1997?

MR. BELL: Not sure you were in the room when I started, but I think it was a $60-billion gap. No, we think that the proposal, the concept, the plan worked spectacularly. We stayed at peace, we've met our national military requirements, we've executed the national military strategy, and we've done that while still balancing the budget, reducing the surpluses and all the other domestic achievements that I enumerated.

Q Bob, can you discuss how the ongoing situation with Iraq and the occasional ramp-ups to do attacks, affect your readiness posture, your availability of personnel and using up dollars?

MR. BELL: Well, I think we've demonstrated that our readiness is more than equal to the mission requirements in the Gulf. If that's not apparent to Saddam, I don't know what is. Of course, there is a cost associated with that, but it's a cost that we're willing to bear and it's a cost that we'll budget and make sure that we win congressional approval to meet.

Q Without challenging your readiness in the Gulf area, what about the readiness of the forces beyond the Gulf area, the forces back at home, the forces in Europe? Doesn't having this readiness posture there affect readiness in other parts of the system?

MR. BELL: I think what you've seen as we got further into 1998 was that the main area of concern in terms of degradation of readiness for stateside units was mostly associated with units that were slated to go fight a second major regional contingency should we find ourselves in a situation where not only Saddam did something very reckless and ill-advised, but you had a conflict in Korea.

That doesn't mean you couldn't fight and win that second war. It means that it would take you longer to close and engage. It might take you longer to fight and win it. But we've never lost our ability, at any point in the course of 1998, to fully execute the national military strategy.

Q Has anything changed in the perception of the external threat that would now argue for higher military spending? For example, does the continuing, the periodic bombings of Iraq -- is there anything new or different in your perception of the external threat that is an argument for putting more money up?

MR. BELL: No, I don't think it's a function of external threat. I think the two main variables here are, first, because we've succeeded in rebuilding our economy, the costs of maintaining an all-volunteer force are greater. That's a simple fact of life. And second, we've been living off of seed corn, going back to about the beginning of the 1980s, in terms of what, then, was a bow-wave of procurement and modernization of equipment. And that's been a dividend that we've been able to realize and apply towards our domestic and fiscal goals.

But you can only do that so long. You can only take equipment into a second or third decade before the readiness difficulties of doing that -- keeping that equipment functioning; keeping spare parts; avoiding cannibalization -- starts to snowball. And that's the point that the Chiefs have been making, and I'm sure will make again this afternoon, that we've got to increase defense spending, here, as we're now proposing to do, not just to meet the immediate readiness near-term needs, like spare parts and flying hours, but to make sure we get up that ramp that we need -- up to the QDR level of $60 billion in procurement per year -- to buy new equipment so we don't have increased long-term readiness problems that otherwise would be associated with equipment that's become obsolete.

Q You mentioned that being unable to implement the cuts under the START treaty has, in effect, added costs to the military. Can you give an estimate of that? And also, what is your assessment of the prospects of finally getting START II signed in Moscow?

MR. BELL: Well, I think it's principally an opportunity cost to date. If things had gone much faster -- after all, the Senate approved START II in January of '96 and the treaty was signed in '92, so -- if this had been realized years earlier, you could speculate that we could have gotten on to START III and much-reduced levels a lot sooner. But in terms of staying at START I, which has been a Congressional mandate for the last several years, that cost is just beginning to sink in. It's now measured in hundreds of millions but will quickly grow to billions unless the Duma acts.

We, of course, hope that the government in Moscow can deliver -- as they are now telling us it is their intention to do -- this treaty early in the year. They've made clear, in the recent week or two, that they don't consider the treaty dead and they intend to resume that effort early in the year. The question is simply going to be, within the Duma, particularly within the Communist faction, where the sentiments rest.

Q Is there any sign that -- what's the change? I mean, every six months or so, President Yeltsin and other Russian officials have said, we're sure we're going to get this ratified in the next few weeks. It's gone on for several years. What's changing there?

MR. BELL: Well, I think you're just seeing -- again, in this theme of victim of our own success -- in part because of the triumph of this democratization process in Russia, you have a truly independent Duma, no longer a rubber stamp of the Kremlin, as during the Soviet Union. And it's very vulnerable to the vicissitudes of developments on the world stage. It just seems there's been one linkage or one complication after another the last couple of years that have been the immediate, proximate cause of the delay, and you have to work through each one of those events. But you can't allow your foreign policy, or your national security strategy, to be dictated simply by a calculation of START II ratification prospects.

Q What leads to your optimism about the base-closing round? It's been several years now, the administration has hoped each year that Congress would go for it, and they've shut you down every year. Have you gotten some new reading from the Senate?

MR. BELL: Well, we hope that the Congress will accept the proposal this year and give us this authority. One of the reasons I think we have a better chance this year is that we're now operating under the constraints of a balanced budget agreement. And those on the Hill that would say, let's provide more for defense, more even than the President discussed in his radio address Saturday -- they, too, have to come up with the dollars in the context of a total federal budget. That means there will be a real premium on both ends of Pennsylvania Avenue in looking for savings. It's not easy for them to, just out of spite, or whatever is motivating this, decide not to take an obvious source of $2 or $3 billion in savings.

Q How much did you say was included in the fit-up from the base-closing rounds you want? How much savings?

MR. BELL: About $2 billion is my recollection, but I would direct you to OMB to get a more precise figure.

Q Well, sort of along those lines, is there any other legal option? I mean, I don't know how a base was closed before the commission was set up and all those things --

MR. BELL: I don't think so. There is authority under current law to adjust and realign small installations, those that have, I believe, 500 or fewer employees. But above that, you really have no practical recourse other than a base closing round like effort. It's like Churchill's comment about democracy: it's the worst imaginable way to conduct business second only to anything else anyone's ever thought of. The fact is, over decades and decades and decades, it's proved impossible to close major bases as long as one senator or one group in the House can stand up and obstruct a bill, short of an all-or-nothing list kind of approach that's been at the heart of the -- approach for the last decade.

Q With two rounds, about how many bases?

MR. BELL: Oh, I don't know. I don't want to suggest anything that would approach what a hit list would look like, or a total number. But we have a sense of what the lag has been. If you compare reductions in defense spending, reductions in the number of people in uniform, and then compare that, in terms of reductions on the infrastructure side, the infrastructure is lagging about 10 percent in the level of reductions that otherwise should have been achieved by now.

Q Do you have a preliminary estimate of what Operation Desert Fox cost?

MR. BELL: No. I don't. I know that OMB is working with OSD Comptroller's Office on that, Bob, and I'm sure that will be a point of interest on the Hill now that they're back in session, so I expect that will be forthcoming. But I can't tell you what the answer is or when we'll have it.

Q Thanks very much.

END 1:33 P.M. EST