Report of the Secretary of Defense

Frank C. Carlucci
to the Congress

on the
Amended FY 1988 / FY 1989 Biennial Budget

February 18, 1988

This Report Reflects the

Amended FY 1988/FY 1989 Biennial Budget
as of February 11, 1988

For sale by the Superintendent of Documents

U.S. Government Printing Office

Washington, D.C. 20402

United States/Soviet Resource Comparison Charts are estimates only.

Boundary representations are not necessarify authoritative. The United States does not recognize the incorporation of Estonia, Latvia, and Lithuania into the Soviet
Union.

For sale by the Superintendent of Documents, UB. Government Printing Office, Washington, D.C. 20402
 TO THE CONGRESS OF THE UNITED STATES

With the delivery of this document, I place before the Congress

the President's plan for securing the defense of America's principles
and interests.

The Fiscal Year (FY) 1989 amended budget is the tenth and final
defense budget in what has been a momentous decade. As the 1980s
opened! our nation's armed forces were suffering from severe neglect.
Recogn1zing the deteriorating state of our defenses, the President
and the Congress together enacted a major rebuilding program to
restore American strength. That effort has had a clear effect. Our
nation will enter the 1990s far stronger than it did the present
decade.

While our forces are now stronger, we continue to face a host of

threats. Foremost among them is Soviet military power, the single
most significant factor we consider in determining the forces
required to guarantee our national security. Neither glasnost nor
the stirrings of economic reform within the Soviet Union have
resulted in any redirection of resources away from the Soviet mili-
tary machine. Deterring Soviet or Soviet-inspired aggression will
remain the prime aim of our national security strategy, and the
benchmark against which we must measure our strength.

Our struggle to safeguard our security is made even more diffi-

cult by the current fiscal climate. The FY 1989 amended budget is
$33 billion less than our proposed spending level sent to the Con-
gress only last year. In order to make such significant reductions,
entire programs have been eliminated and force levels reduced.

At the same time, there has been no parallel reduction in our

nation's global responsibilities. On the contrary, there is reason
to believe that as we enter the 1990s our responsibilities may well
increase. Western Europe, the Middle East, the Pacific rim, Soviet
adventurism in our own hemisphere, the need to assure uninterrupted
transit throu~h vital sea lanes -- the Persian Gulf is one case in
point -- requ1re constant attention if U.S. interests are to be
safegua!d~d: .Reducin~ the resources w~ re9uire to meet ou! ~l~bal
respons1b1l1t1es -- w1thout any reduct10n 1n those respons1b1l1ties
themselves -- increases the risks to our interests and those of our
friends and allies.

3
 President Reagan and I believe that this budget preserves the
common defense, but we a$ree as well that it forces us to accept
greater risks than we th1nk wise. We have done our best to apportion
reductions in ways that minimize those risks. We have refused to
shortchange our munitions and training accounts. We will reduce the
size of our forces, but the units we do field will have what they
need to perform the tasks entrusted to them. We also have resisted
the false economies offered by simply stretching out programs, which
reduces costs now, but delivers less later, and at a higher cost per
unit.

The plan outlined in the following pages meets the target for
defense spending set by the President and Congress at their November
1987 Budget Summit. To meet that target, we have had to accept
another real decline compared to the FY 1988 budget. The plan
therefore represents a continuation of one of the least noticed facts
about the defense budgets of the late 1980s: the real decline in
defense funding. Indeed, the erosion of our defense effort in real
terms is now entering its fourth year. Beginning in FY 1986, defense
funding has decreased by nearly 11 percent in real terms. The FY
1989 amended budget continues that decline.

We can all reco~nize that defense spendin~ may be affected by

domestic considerat10ns. But changing domest1c considerations do not
alter the external threats we face.

We must not return to cycles of feast and famine that have

plagued long-range defense planning in the past. I urge the Congress
to approve our FY 1989 request, and to work with us to set defense
spend1ng on a more stable and steady course in the years ahead. Our
goal must be to establish the kind of predictable funding that allows
the Department of Defense to formulate long-term plans that make the
most efficient use of its resources.

No task is more vital than preserving the forces that safeguard

America's peace and freedom. It is imperative that the Congress and
the President work together toward that aim. I pledge my full
cooperation in that effort.

4
 TABLE OF CONTENTS
Page

PART I: DEFENSE POLICY

A. U.S. National Values and
Secu rity Interests 15
Preserving the Common Defense, 15
The Defense Planning Process, 16
U.S. Interests, Commitments, and
Instruments of National Power, 18
Defense Spending: Risk and
Affordability,21
B. Threats, Military Balances,
and Net Assessments 23
Soviet Goals and Objectives, 23
Other Threats to U.S. National Interests, 24
Military Balance Assessment, 24
The Strategic Balance, 25
Major Regional Balances, 29
The Maritime Balance, 38
The Power-Projection Balance, 40
C. U.S. Defense Policy and Strategy ... 45
National Security Objectives, 45
U.S. Defense Strategy, 46
The Strategic Defense Initiative and
the Evolution of Nuclear Deterrence, 47
Deterrence and Conventional Defense, 55

5
 Low-Intensity Conflict, 58
Supporting Defense Policies, 63
Matching u.S. Interests, Strategy,
and Capabilities, 65
Conclusion, 70
D. Collective Security 71
Introduction, 71
Regional Security, 71
Security Assistance, 92
International Armaments Cooperation, 99
Technology Security, 102
E. Reducing and Controlling Arms .... 107
The Intermediate-Range Nuclear
Forces Agreement, 107
Strategic Arms Reductions Talks, 108
The Defense and Space Talks, 109
Nuclear Testing Limitations, 110
Conventional Arms Control, 112
Chemical Arms Negotiations, 112
Nuclear Risk Reduction Centers, 112
Treaty Compliance, 113
Conclusion, 113
F. Competitive Strategies 115
Definition and Concept, 115
Organization, 115
Results, 116

6
PART II: DEFENSE RESOURCES
A. The Defense Budget 121
Introduction, 121
Security Requirements and Fiscal Concerns, 121
The FY 1988/1989 Defense Budget, 124
Affordability of Defense Spending, 128
Conclusion, 130
B. Defense Management 133
Introduction, 133
Management Tools, 133
DoD Management Reforms, 134
Reorganization and Acquisition
Improvement Acts of 1986, 146
Conclusion, 147
C. Manpower 149
The Total Force, 149
Conclusion, 170
D. The Defense Industrial Base
and Defense Installations 171
Introduction, 171
Industrial Capabilities Assessment Systems, 172
Quality and Productivity Initiatives, 173
Industrial Base Programs and Initiatives, 174
Defense Installations, 177
Conclusion, 178

7
PART III: DEFENSE PROGRAMS
A. Land Forces 183
Introduction, 183
Update of Force Structure Composition
and Disposition, 183
Defense Program Update, 185
Update of Readiness and Sustainability Goals, 189
Conclusion, 190
B. Naval Forces 191
Introduction, 191
Readiness and Sustainability, 194
Defense Program Update, 194
Conclusion, 202
C. Tactical Air Forces 205
Introduction, 205
Force Structure, 205
Defense Program Update, 208
Conclusion, 213
D. Force Projection 215
Introduction, 215
The Mobilization Process, 215
Deploying The Force, 219
Defense Program Update, 222
Command, Control, and Communications
Support for Mobilization, 223
Conclusion, 224

8
 E. Special Operations Forces 225
Introduction, 225
Revitalization, 225
Reorganization, 227
The Next Decade: Preserving the Capability, 229
Conclusion, 230
F. Nuclear Forces 231
Introduction, 231
Strategic Offensive Forces, 232
Strategic Defensive Forces, 239
Strategic Command, Control, and
Communications, 241
Nonstrategic Nuclear Forces, 242
Conclusion, 243
G. Command, Control, Communications,
and Intelligence 245
Introduction, 245
Command, Control, and Communications, 245
Intelligence, 248
Conclusion, 249

H. The NATO Defense Program ..... 251

PART I: ITEMS OF SPECIAL IMPORTANCE

A. Strategic Defense Initiative 257
Introduction, 257
Progress, 257
Conclusion, 261

9
B. Military Space Operations 263
Introduction, 263
The Soviet Military Space Threat, 263
U.S. Military Space Programs, 265
Industry and Research and Development, 268
Conclusion, 268
C. Research and Development 271
Introduction, 271
Science and Technology Program, 271
The Defense Advanced Research
Projects Agency, 274
Test and Evaluation, 276
Defense Nuclear Agency Programs, 279
Conclusion, 281
D. Military Health Care 283
Introduction, 283
Achievements During the Reagan Administration, 283
Conclusion, 288
E. Anti-Drug Programs 289
Introduction, 289
Drug-Free Workplaces, 289
Increased Public Awareness and Prevention, 289
Strengthened Law Enforcement, 290
Improved International Cooperation, 290
Conclusion, 291

10
A. u.s. NATIONAL VALUES AND SECURITY INTERESTS

1. Preserving the Common Defense

This past year Americans celebrated 200 years of constitu-

tional government and the many blessings it has secured. The
world has changed a great deal since 1787, and the United States
has become a world leader in ways hardly ima~inable by our fore-
fathers. America is no longer an island nat10n with the option of
"splendid isolationism." To pros:per, we have had to bridge our
ocean moat. Our economic and po11tical interests have become
global. To defend our values and our interests we have formed
alliances, and maintained forces overseas.

The Department of Defense (000) exists to fulfill the national

government s first obligation: to secure the nation's survival
and independence against hostile powers that threaten our way of
life. Our mission is to preserve America's freedom and secure its
vital interests, creating an environment that allows our nation to
prosper.

This presentation of my first Annual Report to the Congress

provides a vivid reminder of the critical responsibilities of a
Secretary of Defense in preserving the common defense. Contained
herein are my decisions -- drawing on the judgments of thousands
of military and civilian professionals -- on the best defense plan
to include in President Reagan's overall FY 1989 federal budget in
order to safeguard America and its vital interests. The plan must
sustain our deployed forces so they can deter aggression and,
should deterrence fail, fight on short notice and defeat aggres-
sion. Resource constraints have forced us to accept increased
risks to our security and a smaller force structure as we strive
to preserve required levels of readiness and sustainability. We
cannot afford to return to the "hollow" force structure of the
late 1970s. The plan also must invest for the future. Moderniz-
ing our forces is a continuous challenge that cannot be postponed
without incurring greater risks and higher costs later.

To stay within the President's fiscal guidance as negotiated

with the Congress, we have had to cut $32.5 billion from the
already scaled-back FY 1989 request prepared just last year.
Among the cutbacks we have had to make are:

15
 • Deactivating two Air Force tactical fighter wings;

• Deactivating one Army brigade;

• Deactivating one Navy carr1er a1r wing; amd

• Cancelling our air-launched miniature vehicle anti-

satellite (ASAT) program.

There is a more comprehensive indicator of the scrutiny our

programs have been under the last several years. Since first
proposed in our FY 1986 budget request, we have had to make
program reductions amounting to $429.6 billion from our FY 1986-90
five-year pro~ram. To achieve that, DoD's professionals have had
to consider v1rtually every possible efficiency, postponement, and
cancellation. This FY 1989 budget has received unprecedented
scrutiny. Now it is ready for congressional review. I pledge my
full cooperation for that effort.

2. The Defense Planning Process

The formulation of each year's defense program follows the

planning process depicted in Chart I.A.l.

u.s. national security interests are highlighted in this

chapter, while specific and regional interests are detailed in
Chapter I.D. Threats to U.S. interests are analyzed in Chapter
I.B. Defense volicies, which guide the development of defense
strategy and m1litary capabilities to counter threats to U.S.
interests, are discussed in Chapter I.C along with our defense
strategy, which specifies how we intend to employ our military
capabil1ties and other means to preserve our security. Chapter
I.E discusses our progress toward reaching effectively verifiable
agreements on arms reductions. Finally, Chapter I.F outlines what
we are doing to preserve the continuity of our defense planning
process into the decade ahead.

As depicted in Chart I.A.l, our military force structure

requirements are driven by the threats to our interests and the
strategy we adopt to counter these threats. We design programs to
research, develop, acquire, field, and maintain the appro~riate
forces to execute our defense strategy. These programs, 1n the
aggregate, comprise our defense budget.

16
 3. U.S. Interests, Commitments, and Instruments
of National Power

u.s. national security interests are derived from broadly

shared values (e.g., freedom, human rights! and economic
prosperity) that serve to define specific 1nterests and associated
geo~raphica1 concerns (e.g., the territorial integrity of our
a111es, unencumbered u.s. access to world markets and sources of
strategic resources).

America's preeminent national security interest is the sur-

vival of the United States as a free and 1ndependent nation, with
its fundamental values and institutions intact, and its people
secure. We also seek to promote the growth of freedom, democratic
institutions, and free market economies throughout the world,
linked by fair and open international trade. More specifically,
we support the secur1ty, stability and well-being of our allies
and other nations friendly to our interests. We oppose the expan-
sion of influence, control, or territory by nations hostile to
freedom and to other fundamental values shared by America and its
allies.

Other key American interests include:

• Unimpeded U.s. access to foreign markets and resources,

and to the oceans and space; we also support the same free
access for our allies.

• Consistent with other U.S. interests, reductions in the

levels of armaments throughout the world.

• The peaceful and favorable resolution of disputes

affecting U.s. and allied security.

• The open exchange of ideas and other measures to encourage

understanding among the peoples of the world.

The protection of these interests has, over the years, led

America to enter into commitments with other nations in the form
of international treaties and agreements that secure and protect
those interests. Alliances like the North Atlantic Treaty
Organization (NATO) and bilateral a~reements like those we have
entered into with Japan, the Repub11c of Korea, the Philippines,

18
 military power. Our economic power not only supports our
military strength, but also provides a basis to secure our
interests through other means. It is a major source of
our leadership and influence among allied and friendly
nations, by which we can promote the international eco-
nomic stability that is conducive to military stability.
Also, it provides resources to support u.s. foreign
assistance and security assistance programs.

In an ideal world, the vigorous exercise of non-mi1itary

instruments of national power would be the means of competition In
the global arena. Regrettably, some nations still view the use of
armed aggression as a legitimate means of advancing their
ambitions. In contrast, our nation relies on military might for
defensive purposes only. We see the exercise of military force as
a last resort, not as a substitute for other instruments of
national power. Moreover, the United States seeks to use all its
non-mi1itary instruments of national power to reduce the threats
driving our military requirements. To achieve adequate security,
we would prefer to lower our military requirements rather than add
to our military capabilities.

But our goal of reducing our defense effort while enhancing

our security is, at best, an uncertain and long-term proposition.
Paradoxically, history has shown us that the best chance we have
to negotiate reductions in securit1 threats is by showing our
resolve to counter them, by force If necessary. A recent example
of this paradox is the agreement to eliminate all u.s. and SovIet
ground-launched ballistic and cruise missiles with ranges between
500 and 5,500 kilometers. The agreement was reached only after we
be$an deploying intermediate-range nuclear forces (INF). By
maIntainIng an adequate defense posture, we convey to our adver-
saries that they have nothing to gain by trying to achieve a
military advantage over us. An adequate defense posture also
preserves our security until the time when our non-mi1itary
efforts can reduce the threats facing us.

The successful conduct of U.S. national security strategy

involves the inte$ration of all instruments of our national power.
But it is our milItary strength alone that creates a secure
environment allowing us to employ the other elements of our
national power in attempting to preserve our security through
peaceful means. Thus, our defense posture is designed to under-
write an international order in which peaceful commerce and
diplomacy, not military force, guide the fate of nations.

20
Thailand, and Australia, serve to defend those common values that
we share. By defending ourselves in this collective manner, we
not only improve our own security, but we do so at a reduced ~ost;
common security programs benefit all, and the defense burden 1S
shared by all.

The defense program presented herein is designed to safeguard

America's values, protect our vital interests, and fulfill our
international comm1tments. Any reduction to this program must
weigh any anticipated short-term savings with the 1ncreased long-
term costs we are certain to incur, along with the increased risks
to our interests and commitments.

America's defense policies are a component of our National

Security Strategy, which is our overall plan for using all instru-
ments of national power to ensure u.S. security. These instru-
ments are interwoven with our military power and include:

Political Power: America's influence with nations around the

world has developed over many years. We have proven many
times the non-threatening character of our aims. Of
course, America's political power depends to a consider-
able extent on its military power, S1nce the latter under-
writes the stability that makes possible our exercise of
peaceful, political influence. Moreover, our military
strength provides a counterweight to the threats of our
adversaries that might otherwise intimidate other nations
into rejecting our peaceful political initiatives. In
regions where conf11ct threatens U.S. interests, our
diplomatic efforts -- drawing on all elements of national
power -- can be essential to restoring stability and
fostering outcomes favorable to us and to our allies and
friends. In these instances, America's military posture
can and does provide si~nificant support for these
efforts. For example, 1n the Persian Gulf our willingness
to employ military power to protect our interests
increases our influence with nations in that region. A
strong U.S. military posture, backed by domestic political
support and resolve to protect our interests l conveys the
firmness of our commitments to allies and fr1ends, thereby
enhancin~ deterrence and increasing the incentives for
adversar1es to negotiate seriously toward outcomes
favorable to us.

Economic Power: America's economic strength is an

enormously important instrument of our national power.
Our economy provides the wherewithal for producin~ and
maintaining our military power. In times of cris1s or
conflict l the economic strength of our industrial base can
be mobi11zed as necessary to expand and sustain our

19
 Economic considerations do have a significant bearing on the
resources we devote to defense. Yet we must also remember that
the defense efforts of our principal adversary, the Soviet Union,
greatly affect the level of resources we require to maintain the
degree of risk to our security at a prudent level. Chart I.A.2
highlights the disparity in defense 1nvestments between the United
States and the Sov1et Union by comparing U.S. and estimated Soviet
costs over the past 20 years for m1litary investment programs --
the procurement, construction, and research and development
activities that build a lasting stock of military assets.
Although the United States has in recent years restored a level of
investment approximatin~ the Soviet level, the Soviet Union
retains most of the equ1pment, facilities, and designs they
acquired by their much greater cumulative investments since 1970.

The following chapter describes the consequences of this

disparity between U.S. and Soviet defense investments, and
highlights other threats as well. The remainder of this report
details our strategy and our programs for countering these threats
and maintaining America's security risks at the lowest possible
levels. President Reagan's program is an affordable one that
merits the Congress's full support. Indeed, shortchanging defense
now only guarantees that badly needed improvements will cost more
in the future.

22
B. THREATS, MILITARY BALANCES, AND NET
ASSESSMENTS

Over the past year, we have seen an intensifying Soviet public

relations campaign des1gned ostensibly to portray a new Soviet
commitment to peace. Despite this "new look," Moscow is continu-
ing its arms buildup and expanding its political and military
influence wherever and whenever the opportunity presents itself.
Conse9uently, the Soviet Union remains the major threat to the
secur1ty of the United States, its allies, and its friends. In
addition, other countries, such as Libya and Iran, with far less
military power than the Soviet Union, have shown themselves will-
ing to attack our citizens and our interests. We must contend
with these threats as well.

This chapter compares military power in various functional and

regional areas where we are threatened by the Soviets. These com-
parisons are termed militarr balances. They weigh not only the
threats posed by Soviet mil1tary forces, but also U.S. capabili-
ties to counter these threats. Such assessments assist us in
identifying adverse trends and highlight areas where corrective
action may be required.

1. Soviet Goals and Objectives

Soviet General Secretary Gorbachev recently has undertaken a

wide range of new initiatives, both domestic and foreign. He is
focusin~ on themes like "democratization" of the Communist Party
and Sov1et society, "perestroyka" (restructuring) of the economy,
and "glasnost" (openness). While it is hard to find fault with
the rhetoric, we would be far more reassured by supporting
actions. It is likely that Gorbachev is genuinely unhappy with
the performance of the Soviet economy. If, however, there is to
be any reallocation of resources to rebuild and reinvigorate a
faltering economy, it is likely that a major motivation is to
ensure a reliable long-term capability to support a modern mili-
tary force. Indeed, the Soviets have always maintained a long-
term perspective. Even if Gorbachev were to make no new invest-
ments in weapons production capacity (a highly unlikely event),
the huge investments already made strongly suggest that Soviet
defense production at least through 1990 will not be reduced
significantly.

In line with their new "peace offensive," the Soviets no

longer speak openlr of winning a nuclear war. Yet with a force
structure emphasiz1ng a time-sensitive, accurate, hard-target-kill

23
nuclear capability; continued large-scale commitment to hardened
command! control, and communications (C 3 ) facilities; continued
allocat10n of major resources to civil defense; and continued
upgrade of air and missile defense systems, the Soviet's defense
planning strongly suggests that they continue to maintain a capa-
bility for warfighting at all levels of the conflict spectrum.

In summary, regardless of Gorbachev's stated intentions,

Soviet military capability continues to grow, and U.S. policy
decisions must be made in light of these growing capabilities.
Intentions can change overnight, particularly in the Soviet Union
where decisions are made by a small elite, elected by no one and
responsible only to themselves. We must ensure that we continue
fielding forces capable of deterring aggression at all levels.
This effort requires a sustained long-term commitment on our part.

2. Other Threats to U.S. National Interests

Since the end of World War II, ambiguous aggression in the

form of low-intensity conflict (LIC) has become an increasing
threat to our interests, as well as those of our allies and
friends. Although these insurgencies, counterinsurgencies,
attempts at subversion, and acts of terrorism do not approach the
magnitude of the Soviet threat, they represent the principal form
of conflict in the world today, and will likely remain so in the
foreseeable future.

The Soviets, their satellites and surrogates, and many Third

World states hostile to our interests have seen the value of
ambi$uous aggression in destabilizing established governments and
inst1tutions. The threat we face from low-intensity conflict and
our strategy for countering it are discussed in Chapter I.C.,
while our growing special operations forces (SOF) capability to
deal with ambiguous aggress10n is covered in Chapter III.E.

3. Military Balance Assessment

Our assessment is that today's overall strategic balance is

essentiallf stable. Soviet planners, armed with a preponderant
advantage 1n heavy intercont1nental ballistic missiles (ICBMs),
must nonetheless weigh the enhanced capability of our strategic
Triad of ICBMs, submarine-launched ballistic missiles (SLBMs), and
strategic bombers, as each leg proceeds through a critical modern-
ization program. In Western Europe, NATO $eneral purpose forces
are being modernized in order to meet the 1ncreased threat from a
numerically superior Warsaw Pact possessing weapons systems whose
quality approaches that of the best fielded by NATO. In the
Middle East/Southwest Asia, the military balance favors the

24
Soviets, but the combination of our efforts and those of countries
in the region create significant risks and uncertainties for
Soviet planners. In East Asia, the balance again favors the
Soviets , but our modernization programs, and the economic vigor of
our all1es and friends, indicate a more favorable long-term trend.
The maritime balance favors us, but we have a greater
dependence on the sea than do the Soviets. The power-projection
balance also favors us, but increasing Soviet capabilities and
their use of surrogates make this balance unstable at best.

4. The Strategic Balance

The weapon counts and simple exchange models typically used in
describin$ the strategic nuclear balance focus almost exclusively
on offens1ve forces. This approach neglects such key factors as
U.S./Soviet asymmetries in passive and active defenses that would
have a major influence on offensive forces' ability to perform
their missions. Quite often differences between u.S. and Soviet
strategic doctrines are also overlooked. In formulating our own
assessments of the balance, we must address these and other
factors as well.

Our principal objective is to deter aggression against our-

selves, our allies, and our friends. Our deterrent's effective-
ness depends, in lar$e measure, on how the Soviets assess the
strateg1c balance, S1nce it is the U.S.S.R. that we seek to deter
from aggression. Recent Soviet declaratory statements appear to
reject their previously held concepts of nuclear warfight1ng while
disclaiming a preemptive nuclear strategy. We have not seen, how-
ever, correspondin$ changes in Soviet force posture or adjustments
in some key modern1zation efforts that would support this aspect
of Moscow's declaratory policy. Soviet leaders seem to believe
that nuclear war would be highly destructive and militarily
undesirable, and should therefore be avoided, if possible.
Nevertheless, they also believe that nuclear war could occur and
that the U.S.S.R. should be prepared for such a possibility. The
Soviet leadership believes that it is feasible, through a variety
of means, to make it more likely that the U.S.S.R. will emerge
from a nuclear war in relatively better condition than its foes,
and that the Soviet regime could retain its political control.
This objective governs the long-standing Sov1et commitment of
scarce resources to enhance both their offensive and defensive
strategic capabilities. It also helps to explain Soviet opera-
tional plann1ng that is designed to seize the strategic in1tiative
through prompt missile attacks, and to limit damage to the
U.S.S.R. through a vast, interlocking system of active and passive
defenses and related measures. Consequently, the key to deterring
Soviet aggression remains our ability to hold at risk those assets
that the Soviets value most.

25
 a. Offensive Forces

u.s. offensive forces are becoming increasingly effective and

survivable. The introduction of our Peacekeeper ICBM begins to
redress the existing asymmetry in prompt, hard-target kill capa-
bility, althou$h even the full 100 Peacekeeper force will not
erase this Sov1et advantage entirely. Our advantage in bombers
will persist as we continue deploying the B-lB bomber and fitting
selected B-52 platforms with a1r-launched cruise missiles (ALCMs).
In the longer term, our projected modernization efforts will
reduce Soviet advantages in some areas and maintain some areas of
U.S. advantage. Deployment of the rail-based Peacekeeper will
result in a highly survivable land-based missile force. Intro-
duction of the highly accurate Trident II SLBM aboard the more
survivable Trident SSBN (Ballistic Missile Submarine, Nuclear-
Powered), now steadily entering the fleet, will permit us to hold
at risk a greater proportion of the hardened, fixed Soviet target
base. The Advanced Technology Bomber (ATB) and the Advanced
Cruise Missile (ACM) will $reatly increase the penetration capa-
bility! operational flexib1lity, and effectiveness of our air-
breath1ng forces. Furthermore, projected improvements to our
command! control, and communications systems will enhance our
capability to manage U.S. forces in demanding contingencies, and
should, therefore, discourage a preemptive attack against our
command system.

Soviet offensive force enhancement efforts center on increas-

ing their forces' survivability, operational flexibility, and
their advanta$e in prompt, hard-target-kill capability. They are
deployin$ their road-mobile SS-25 ICBM and their rail-based SS-24
ICBM {wh1ch apparently will also be silo-based). This Soviet
trend toward mobility, complemented by the strategic defensive
developments noted below, may significantly alter the Soviet
tar$et base and complicate our ability to hold at risk significant
Soviet military assets. The follow-on to the SS-18 ICBM -- the
Soviet's prime counterforce weapon -- has begun flight testing,
again underscoring the Soviet commitment to a preemptive strategy.
Moscow's continued construction of its Typhoon and Delta IV sub-
marines, armed with longer range SS-N-20 and SS-N-23 SLBMs respec-
tively! will increase the force's survivability by permitting SSBN
operations in waters protected bf Soviet naval and air forces: .We
expect to see more accurate verSions of these two SLBMs, providing
the Soviet SSBN force with a greater capability to attack hardened
U.S. targets.

Soviet modernization programs are quite comprehensive, and

include the rejuvenation of their air-breathing forces in an
attempt to erode our advantage in this area. Their new Bear-H
bombers, equipped to carry the AS-IS long-range ALCM, have

26
conducted training patrols within operational range of North
America. A second new AS-IS-capable Soviet intercontinental
bomber, the Blackjack, is completin$ its development and could
become 0yerational in 1988. In addition to the AS-IS and the
SS-N-21 a sea-launched cruise missile, or SLCM), the Soviets are
developing a larger SLCM, the SS-NX-24, which has been flight-
tested from a specially converted Yankee-class submarine, and a
larger ALCM, the AS-X-19. Soviet modernization of their strategic
forces also includes the deployment of their new Midas tanker
aircraft. These activities underscore the Soviet commitment to
enhancing their overall force flexibility and employment diver-
sity, thereby complementing their advantage in ICBMs.

b. Defensive Measures

It is in strategic defense, however, that the asymmetry

favoring the U.S.S.R. is particularly stark. Our air defenses,
although being modernized by the introduction of new ground-based
radars and the replacement of obsolete fighter aircraft, are not
designed to provide the level of ~rotection associated with their
Soviet counterparts. Our Strategic Defense Initiative (SDI)
research and experimentation program is designed to determine the
feasibility of an effective defense a$ainst ballistic missiles.
The initial results are very encouraging and promising concepts
are being pursued. Over the long term, an effective defense
against ballistic missiles could ne$ate the defensive asymmetry
now favoring the Soviets, discouraging any Soviet ~erception that
those advantages could be converted to concrete gains. Currently,
though, our absence of civil defenses, industrial preparedness
measures, and related efforts underline the Soviet advantage in
this aspect of the strategic balance.

The Soviets are continuing their enormous investment in

expensive and technically demanding active and passive defense
systems designed to limit damage to the U.S.S.R. in the event of
nuclear war. Numerous deep-underground facilities exist, desi$ned
to withstand nuclear attack and provide protection to a signifi-
cant proportion of the Soviet civilian and military leadership.
These facilities are supported by a complex system of hardened,
redundant, and mobile command, control, and communications systems
designed to assure centralized control during and after a nuclear
exchan~e. Although adding considerable costs both to the con-
struction and o~eration of factories in an economy strapped for
resources for Civilian projects, industrial pre~arations for
nuclear war continue. Civil defenses are steadily improving as
well.

Soviet active defenses include the world's largest air-defense

network, and the only operational ballistic missile defense and
antisatellite (ASAT) systems in existence. The Soviet operational

27
ASAT contributes to their warfighting posture by keeping at risk
u.s. satellites in low-earth orbit, a capability not ~ossessed by
the United States. Moscow's modernization of its ant1ballistic
missile (ADM) system, and its interlocking network of new, large
phased-array radars (including the one at Krasnoyarsk that vio-
lates the ADM Treaty), may provide the foundation for a potential
nationwide ADM deplorment. This develo~ent, particularly in the
context of other Sov1et ADM-related act1vities, is especially
troublesome.

Looking toward the future the Soviets are continuing their

research and development (R&D$ activities in many areas being
examined by our Strategic Defense Initiative, but at a higher
level of funding. In some cases Soviet activity has gone beyond
laboratory research, as witnessed by their ground-based lasers at
Sary Shagan, which are probably capable of damaging some compo-
nents of U.S. satellites in orbit. Testing of components for a
large-scale ground-based laser ADM system could occur in the early
1990s, with an operational ground-based system becoming available
~ossibly in the late 1990s and its space-based counterpart reach-
1ng deplorment after the year 2000. The Soviets are continuing
research 1n particle beam, radio frequency, and kinetic energy
weapons, and could deploy ASAT and ADM prototypes of these systems
by the mid-to-Iate 1990s.

An overall assessment of the strategic balance indicates that

the United States has, and will retain for the foreseeable future,
the capability to deter a direct nuclear attack. This judgment
assumes that President Reagan's strategic modernization program is
fully implemented in a timely manner. Absent these U.S. improve-
ments, the tempo and direction of Soviet programs will erode some
remaining areas of U.S. advantage and extend Soviet advantages,
particularly in the area of strategic defense.

Looking forward, the asymmetry in strategic defenses and the

changin$ nature of the Soviet target base, partially reflected in
the Sov1et commitment to deep underground facilities and mobility,
represent areas of considerable concern. Left unchallenged r these
trends will, over time, remove from risk an increasin$ ~ort10n of
those assets which the Soviets consider vital in reta1n1ng con-
trol over their society and achieving their wartime goals. Such
developments would weaken our ability to deter. Our future
ability to maintain an acceptable strategic balance depends on our
developing both U.S. strategic offensive and defensive capabili-
ties. Reducing the existing asymmetry in strategic defense capa-
bilities, in particular, would demonstrate to the Soviet leader-
ship that it does not possess usable military advantages, thereby
reducing the risk of aggression.

28
Consequently, the Pact has been able to expand and modernize its
forces, maintaining, and in some cases increasing, its advantages
in nonstrategic nuclear forces (NSNF), chemical forces, and con-
ventional ground and air forces. This situation is particularly
worrisome since NATO's strategy of flexible response calls for a
credible force capability across the spectrum of conflict.

In the NSNF category, the Warsaw Pact has, and we project will
continue to have, advantages in quantity, survivability, and
flexibility. The Intermediate-Range Nuclear Forces (INF) Treaty
eliminating longer and shorter range INF missiles will reduce some
of those Pact advanta~es. Nonetheless, they currently hold more
than a 3:1 advantage 1n dual-capable INF aircraft and are expected
to maintain that advantage. In the category of short-ran~e
nuclear forces (SNF), the Soviets have a major advanta~e 1n terms
of nuclear-capable surface-to-surface missiles and art11lery, and
that advantage could become even greater over the next ten years.
Regarding missile launchers alone, the Soviets have a 17:1 advan-
tage over NATO. That advantage would be further compounded by the
large number of refire missiles they typically deploy for each
launcher. Additionally, since much of the Pact's ground-based
NSNF typically outranges NATO's, our nuclear forces must be
deployed closer to the forward-line of troops (FLOT) and, there-
fore, could be more vulnerable to conventional and nuclear strikes
durin~ a war. We are actively involved with our NATO allies in
ident1fying steps that we can take to address these and other
problems in order to maintain an effective nuclear deterrent
force.

The Warsaw Pact also currently holds a decided advantage over

NATO in chemical offensive and defensive capabilities. A wide
variety of the Pact's conventional weapons systems are capable of
delivering chemical munitions. Moreover, the Soviets have more
than 60,000 chemical warfare personnel and over 30,000 chemical,
biological, radiological (CBR)-related vehicles deployed with
chemical troops. In contrast, NATO primarily relies on a small
and agin, u.s. chemical stockpile as a deterrent. With the
Congress s support, we have embarked on a long-overdue
modernization effort in this area.

The Pact is retaining its advanta~e in conventional forces.

Particularly worrisome is the ~rowth 1n their ground force
advantage. By one measure, wh1ch accounts for both quantity and
quality of forces, the Pact's advantage in initially available
pre-hostilitr ~round force combat potential in their Western
Theater of M111tary Operations (WTVD, in Soviet terms) increased
significantly between 1965 and 1987. The Pact's advantage in this
category after 30 days of mobilization on both sides historically

30
constraints on u.s. modernization will, by 1990, see the Pact
erode the gains NATO has made, at great cost, since 1975.

Furthermore, the Pact's air operation involves much more than

fixed-wing aircraft. They plan to employ c?nventionally armed
surface-to-surface missiles, air-assault un1ts, attack heli-
copters, special purpose forces (Spetsnaz), and radio-electronic
combat systems as well. While we know that the Pact has substan-
tial numbers of those types of forces, we have not yet been able
to calculate adequately the effects of such a combined arms
approach on air warfare.

Yet another important consideration in assessin~ the European

balance is the ability of both sides to sustain the1r combat
forces with ammunition, fuel, repair parts, etc. A number of
indicators lead us to believe that the Pact has an advantage over
NATO in this area as well. In terms of ammunition stockage, for
example, the Pact has substantially increased its storage capacity
in the Western TVD over the past ten years. NATO improvements in
ammunition sustainability, however, have not been nearly as great,
and in terms of days of combat, NATO falls far short of the Pact.
The above factors, among others, lead us to conclude that in
the event of war in Europe, NATO could face the difficult choice
of early escalation to the use of nuclear weapons or suffering a
conventional defeat in Europe's critical Central Region. NATO's
primary objective, however, is not to fight a war, but to deter
war. Since deterrence rests in the eye of the beholder, the
Soviet assessment is central to understanding the deterrent qua-
lity of our forces. For example, despite the Pact's advantages in
nuclear and chemical weapons, the Sov1ets would prefer in any
conflict with NATO to defeat the Alliance using only conventional
forces. Their preference could well be due, in part, to the
escalatory linkages that are associated with nuclear and chemical
weapons and to a lack of Soviet confidence in their ability to
control escalation should those weapons be used.

At the conventional level, the Soviets may not be confident

that their forces are sufficient to guarantee them a high prob-
ability of success. Such a Soviet assessment may well be 1nflu-
enced by the unattractive prospect of mobilizing and deploying
forward their reserve forces in the face of capabilities NATO is
pursuing for Follow-On Forces Attack (FOFA). Furthermore, it is
likely that the Soviets remain concerned about the military capa-
bility and reliability of their allies' forces. Consequently, we
assess that the combination of Soviet uncertainty in the nuclear
and conventional realm is currently enough to deter them from
starting a war in Europe. But as we noted earlier, the Pact
continues to hold an advantage in these force categories, and the
trends in these categories are not comforting. We need to do more

33
in both areas if we are to maintain confidence 1n the deterrent
capability of our forces.

In the mid term, increasin~ armaments cooperation among the

NATO allies improves the effic1ency of the Alliance's defense
spending. We see this development as an extremely positive one
and, with the help of the Congress, we are continuing to pursue
these types of in1tiatives. In the long term, however, we must go
beyond these efforts. Developing new conventional weapons tech-
nologies, such as lasers and directed-energy weapons, could well
cause a fundamental change in the nature of warfare with tremen-
dous implications for the kinds of forces and types of weapons we
need to achieve our national security objectives. Given the
underlying advantage the West has in science and technology, we
should attempt to capitalize on our lead in a number of these
technologies to improve significantly our military posture. This
approach lies at the heart of our Competitive Strategy Initiative
(see Chapter I.F), and we have a number of efforts under way to
identify possible actions we can take. To the degree that we are
successful in this effort, we should be able to improve consider-
ably our ability to deter war in Europe and to defend Europe
should deterrence fail.

b. The East Asia Balance

The Soviets continue to upgrade the equipment of their mili-

tary forces in East Asia. Modernizing the more than 50 ground
div1sions deployed in the Far East is the centerpiece of Moscow's
ground force activity. The Soviet's recent pull-back of one
motorized rifle division from Mongolia const1tuted a gesture to
China of Moscow's willingness to discuss bilateral and regional
issues, but is not expected to presage a further drawdown of
Soviet forces along the Chinese border. Air regiments in the
region continue receiving new ground attack and air defense air-
craft, as Backfire aircraft are replacing and augmenting older
inventories of Badgers. The Soviets also have deployed modified
Bear aircraft to support their Far East strategic and tactical
operations. The Sov1et Pacific Fleet is receiving new cruisers,
destroyers, and submarines, thus maintaining its status as the
largest of the four Soviet fleets. These Soviet conventional
forces are still supplemented by a substantial number of short-
and intermediate-range nuclear forces, including the land4mobile
SS-20, although the latter is scheduled to be removed in
accordance with the terms of the INF Treaty.

In responding to the imposing military power on its northern

border, the People's Repub11c of China (PRC) has embarked on a
broad pro~ram to upgrade its military forces. This effort l
however, 1S viewed as secondary to China's domestic econom1C
development. Beijing's defense resources presently are directed

34
toward low-cost military pro~rams designed to lay the groundwork
for significant improvement 1n combat capabilities over the next
decade. Improvements in education, training, organization, tac-
tics, and research and development (R&D) will pave the way for
integration of new technologies and upgraded weapons systems in
the 1990s. Thus, despite continuing Chinese improvements, the
Soviets will remain predominant in all areas of the conventional
military balance.

The Soviets also will continue to maintain strategic nuclear

superiority over the Chinese for the foreseeable future. Any
enhancements to China's strategic forces over the next five years
will likely be counterbalanced by improvements in the Soviet
missile defense system.

The regional balance between North and South Korea is of ~reat

concern to the United States, and is a key factor in U.S. mil1tary
plannin~ for the Asia/Pacific region. America's determination to
stand w1th South Korea in preserving the common defense has main-
tained the peace on this strategic peninsula for nearly 35 years.
Nevertheless, North Korea persists 1n modernizing its large armed
forces, even at the expense of debilitating its already weak
economy. Recent North Korean activities include the continued
reorganization of its army, and increased naval and air exercises
with the Soviets. With the bulk of its forces forward deployed,
North Korea is postured to attack in ways that would maximize
surprise. For these reasons, it is not yet clear whether North
Korea's recent pledge to reduce the size of its armed forces
constitutes a genuine effort to reduce tensions on the peninsula.
The Republic of Korea (ROK) boasts a strong, growing economy
roughly four times the size of North Korea's. South Korea also
has been modernizing its forces with U.S. assistance. South
Korean military modernization programs and the economic asymmetry
vis-a-vis North Korea makes the long-term prospect for the Korean
balance favorable. Nevertheless, in the face of Pyongyang's
historic hostility, and in view of Moscow's penchant for exploit-
ing the aggression of its proxies through direct or covert 1nter-
vention, our assistance to South Korea must continue.

The inability to find a solution to the Cambodian problem

remains the greatest threat to peace and stability in Southeast
Asia. Vietnam's occupation of Cambodia continues to cause
regional military confrontation and has resulted in an escalation
of extrare~ional tensions as the superpowers and China compete for
i~f!uence 1n the re~ion. In exchange for eco~omic assistance and
m111tary support, V1etnam has granted the Sov1ets base rights at
Cam Ranh Bay. From there, Soviet naval and air force operations
pose a threat to Southeast Asian sea lines of communications and
to U.S. naval forces operating in the South China Sea.

35
 Although the Soviet Union and its clients retain advantages 1n
some of the regional military balances, several theater-wide
factors favor the United States and its allies. For example,
close allies like Japan provide bases and infrastructure support
to our forward-deployed forces. Japan's key location, moderniza-
tion of its self-defense forces, and assumption of new missions
also enable it to provide for a major part of its own defense.

The location of the Philippines, at the juncture of Southeast

Asian and Western Pacific sea lanes, continues to make it a stra-
tegically important site for two large U.S. facilities, Clark Air
Base and SUbiC Bay Naval Base. These bases plar a critical role
in the fulfillment of U.S. global responsibilities. Recent inter-
nal challenges, communist and secessionist insur$encies, and
continuing economic problems threaten the stability of democratic
institutions in the Philippines. U.S. strategic objectives are
tied to the economic well-being of the Philippine people and the
stability of their government. Our security assistance program is
therefore aimed at defending democratic institutions and helping
the Philippines to meet the many threats and challenges to its
security and sovereignty.

The continued economic growth of Japan, the rapid development

of the newly industrialized countries of the East Asia rim, and
the anticipated growth of the Chinese economy will broaden the
basis for developing the self-defense capabilities of friendly
regional countries. To promote this trend, we are pursuing
economic and security policies that tie the United States and
friendly nations in the Asia/Pacific region more closely tO$ether.
These positive economic developments make the long-term regional
trends in the military balance appear favorable.

c. The Middle East I Southwest Asia Balance

The oil wealth of the Middle East/Southwest Asia region, its

political instability, and its proximity to the Soviet Union make
it a target of Soviet aggression -- both ongoing (as in Afghani-
stan) and potential. Additionallr, Iranian terrorism, Teheran's
indiscriminate mining of the PerSian Gulf and its approaches, and
continued Iranian attacks on non-belligerent shipping in the Gulf
also represent thr~ats to U.S. inter~sts. Our pri~ary objec~ive
is to support.the.1~dependenceof friendly ~tates in.t~e.region by
assisting their military forces and developing capabilities of our
own that would make anr Sovie~ ag~res~io~ ~ost1y, risky, and
unsuccessful. The Soviets maintain significant ground and tac-
tical air forces in their military districts contiguous to the
region and are actively enhancing support bases for their nav~l
presence in the Indian Ocean. Soviet forces occupying Afghan1stan
are continuing their efforts to subjugate the Afghan people. At

36
the same time, they represent over 115,000 combat-ready troops
forward-deployed in Southwest Asia.

The Soviet Union's prox1m1ty to the Persian Gulf reg10n

provides it with a sign1ficant military advanta~e, although it is
somewhat offset by the determination of the reg10n's states to
maintain their independence as well as by the region's extremely
difficult terrain. The Soviets would have to sustain long lines
of communication in attempting to seize the Persian Gulf's oil-
producing facilities. These communication lines would be vulner-
able to air and unconventional ground interdiction; in addition,
they would require a large occupying force to ensure local
security.

As in the East Asian theater, local military balances play an

important role in arriving at an overall regional assessment. In
the Iran-Iraq War, the Iranian manpower advantage continues to
offset Iraqi predominance in force structure, most particularly 1n
armor and tactical air weapons systems. The result has been a
stalemate reminiscent of the Western Front in World War I, in
which neither side has been able to gain the upper hand.

With Soviet assistance, Syria is continuing to upgrade its

military forces with Soviet-supplied fourth-generation fighter
aircraft and other advanced weapons systems. Syria's recognition
of its disastrous economic situation, however, has forced a con-
solidation of ground force units and has resulted in an overall
decreased military threat to Israel. The Israeli military
modernization program is also facin~ harsh fiscal realities, how-
ever, requiring Israel to make diff1cult decisions regarding
development and purchase of new weapons systems, as in the case of
the recently cancelled Lavi tactical fighter. At present, Israel
maintains clear advantages in readiness, command and control, and
tactical air operations that should provide for its continued
security.

India, China, and Pakistan are the major military powers in

South Asia, and open conflict between Ind1a and Pakistan as a
result of long-standing differences is always a possibility.
India has force structure advantages over Pakistan, and both
countries continue modernizing their military forces. India has
successfully tested a nuclear device, and Pakistan may be devel-
oping the ability to do so. The military balance between India
and the PRC, in which India's advantage in armor is countered by a
Chinese advantage in manpower, is greatly affected by the
exceedingly hostile ~eography and climate along their common
bor~erl wh1ch would 1mpose severe limits on both operations and
10glstlCS.

37
 We have improved our capability for projecting military forces
to the region. Our u.s. Central Command develops specific plans
and operational concepts focused on the region. Its potent1al
force allocation comprises more than six ground divis10ns and over
600 tactical aircraft. To test these forces and concepts, we have
conducted a number of successful exercises with friendly regional
states, and our recent convoy/escort and mine-countermeasure oper-
ations in the Gulf are providing us with greater familiarity w1th
regional operations. On balance, our improved capability to pro-
ject significant forces rapidly to the region helps to deter
Soviet aggression. Should deterrence fail, we can successfully
defend the region with substantially fewer ground forces than the
Soviets require to seize and occupy it, provided our forces are
strongly supported by tactical air. Such a defense would depend
hea!ily on participation and support by friends and allies in the
reg10n.

6. The Maritime Balance

Our capability to protect sea lines of communication, control

specific ocean areas, and project power to distant reaches of the
~lobe is vital to Western security and the safeguarding of U.S.
1nterests worldwide. Almost any type of re~ional or major power
conflict involving u.S. interests w111 requ1re the use of naval
forces and the movement of men and materiel by sea. Although the
Soviets have improved their naval forces' capabilities, our own
shipbuilding and modernization programs have kept pace and we are
maintaining a maritime balance favorable to the Un1ted States.

Maritime superiority is critical to the United States for both

economic and military reasons. It is critical to the Western
alliance because of the role U.S. reinforcements play in NATO
plans. A cornerstone of our goal of maintaining maritime superi-
ority involves the sharing of missions between the Services to
improve the effectiveness of our maritime operations and to ensure
efficient use of all our resources. Cooperative efforts in aerial
refueling, ocean surveillance, and strike operations support this
effort.

The Soviet Navy's primary ~trategic wartime mission is to deny

Western navies access to mar1t1me regions near the Soviet land-
mass. The Soviet Navy would concentrate on protecting its SSBN
forces and destroying opposing nuclear-capable forces, such as
U.S. SLCM-equipped submarines and surface ships, and aircraft
carriers. The U.S. Navy's maritime strategy 1S to control vital
sea lanes and to conduct offensive operations in Soviet maritime
operating areas and deny the Soviets sanctuary. The force-
projection/sea-control missions of the United States and its
al11es, and the sea-denial missions of the Soviets and Warsaw Pact

38
Continued u.s. efforts at becoming proficient in this environment
will add to our warfighting advantage. Additionally, Western
improvements in seaborne surface-to-surface, air-to-air, and air-
to-surface strike capability will continue to hold the Soviet Navy
at risk.

The maritime balance today is complex and the margin of allied

superiority is being reduced, althou~h the United States and NATO
do maintain a lead over the Soviets 1n important warfare areas.
Despite measurable improvements in the Soviet submarine force, we
currently maintain an antisubmarine warfare (ASW) edge. The
illegal transfer of advanced pro~eller construction technology
from the West! however, will fac1litate further Soviet advances in
submarine des1gn. The ASW picture will be complicated by con-
tinued introduction of improved platforms on both sides, with an
overall declining U.S. advantage. Fleet air defenses will be
increasingly challenged by the improved antiship missiles entering
both inventories. The possible expansion of Soviet "sea-denial"
zones would test U.S. offensive strategy, but will also complicate
Soviet reconnaissance and surveillance capabilities. The U.S.
Navy will retain significant advantages over the Soviets in tac-
tical air, long-range power projection, sustainability at sea, and
in its ability to operate the new and more sophisticated ships
entering the inventory. Our continued pursuit of these competi-
tive advantages and our close attention to changes in Soviet naval
forces and strategy are necessary to preserve a favorable maritime
balance in the future.

7. The Power-Projection Balance

For the last several years my predecessor has commented on the

basic asymmetry in the ab1lity of the United States and the
Soviets to project power along the immediate Soviet periphery. In
order for us to support our friends and allies on or near Eurasia,
we must project power at great distances from our shores. Be-
cause our forces have long had the mission of operating far from
the United States at great distances from their home bases, we
currently have a superior ability to project power to locations
distant from both the United States and Soviet Union. The
Soviets, however, are gradually expanding their capability in this
area by developing power-projection assets such as airlift forces
and the merchant marine, and through arms sales, increased use of
surrogates, and military assistance.

In terms of special equipment necessary for global operations,

U.S. forces have, with some exceptions, equipment superior to that
of the Soviet forces. The U.S. Military Airlift Command! for
example, has aircraft that can be refueled in flight! wh1le its
Soviet counterpart has not demonstrated that capabi11ty. The

40
Soviet Condor heavy transport aircraft, however, is a graphic
example of the Soviet commitment to project power at greater
distances. Larger than the C-SA, the Condor enhances the Soviet's
capability to deploy and supply forces outside the U.S.S.R.

Furthermore, the Soviet Merchant Marine is an integral element

in Soviet power projection strate~y. In supporting Moscow's
clients with mi11tary equipment, 1t is well-suited for the small
ports of Third World nations. A Soviet Merchant Marine force
equipped with new vessels designed with military utility in mind,
and possessing a rapid on-load/off-load capability, provides great
flex1bility in military contingencies at d1stant locations.

Our own efforts to upgrade power projection forces also have

been substantial. U.S. carrier battle groups and Marine Corps
units are capable of fighting intense battles on their own, out of
reach of our forces based in the continental United States. In
contrast, Soviet power-projection forces are, to a large extent,
still dependent on assistance originating from bases in the Soviet
Union. The Soviet Navy, for example, would experience great dif-
ficulties in attemptin~ to counter our carrier battle groups with-
out the support of the1r land-based aircraft assets. Our airlift
and sealift shortfalls are being addressed by new acquisitions and
programmed improvements to our active and reserve forces, and
provision of the equipment to off-load and move cargo once it
arrives. Additionally, mobility has been enhanced by the pro-
curement of three maritime prepositioning ship squadrons to sup-
port Marine air-~round task force deployments in the Atlantic,
Pacific, and Ind1an Oceans. The Navy has taken delivery of the
first 11 air-cushioned landing craft (LCAC), enhancing the speed,
mobility, and diversity of our amphibious assault forces.
Finally, the Army's fielding of l1ght divisions also enhances our
rapid deployment capabilities.

A continuin~ element of American power projection is our

superior worldw1de basing network. Our forward deployments
require sea and air links to the overseas bases supporting those
deployments. Soviet overseas basin§ focuses on key geographical
areas l employing mostly movable or removable" assets (e.g.,
float1ng piers, tenders, and repair ships; floating drydocks) and
building little that is permanent. There are of course excep-
tions, like Vietnam. Given our asymmetric geostrategic situation,
loss of Soviet overseas facilities would not affect Soviet force
planning to the same degree that loss of overseas basing would the
United States.

41
 Security assistance programs continue contributing to our
national security objectIves by assisting our allies and friends
in meeting their defense needs and supporting collective security
efforts. For a full discussion of security assistance issues, as
well as an overview of regional challenges to u.S. interests, see
Chapter 1.0.

u.S. links to allies around the world depend upon our con-
tinued ability to move and support forces in areas distant from
the u.S. mainland. The overall power-projection balance continues
to favor the United States, but the Soviets are making significant
inroads.

44
C. u.s. DEFENSE POLICY AND STRATEGY

1. National Security Objectives

To counter the threats to our interests described in the

preceding chapter, we pursue what we term "national security
objectives." Achievin~ these objectives is the purpose of our
defense strategy and m1litary capabilities:

Our major national security objectives are:

• To safeguard the United States, its allies, and interests

by deterring aggression and coercion; and should deter-
rence fail, by defeating the armed aggression and ending
the conflict on terms favorable to the United States, its
allies, and interests at the lowest possible level of
hostilities.

• To encourage and assist our allies and friends in defend-

ing themselves against a~gression, coercion, subversion,
insurgencies, and terror1sm.

• To ensure U.S. access to critical resources, markets, the

oceans, and space.

• To reduce, where possible, Soviet military presence

throughout the world; to increase the costs of Moscow's
use of subversive force; and to encourage changes within
the Soviet bloc that will lead to a more peaceful world
order.

• To prevent the transfer of militarily critical technology

and knowledge to the Soviet bloc, and to other potential
adversaries.

• To pursue equitable and verifiable arms reduction agree-

ments, with special emphasis on compliance.

• To defend and advance the cause of democracy, freedom,

and human rights throughout the world.

45
 2. U.S. Defense Strategy

Our basic defense strategy is to safeguard the United States

and its allies and interests by deterring aggression. Deterrence
works by convincing potential adversaries that the probable costs
to them of their aggression will exceed their probable gains. We
seek not only to deter actual a~gression, but also to prevent
coercion of the United States, 1tS allies, and friends throu~h the
threat of aggression. Successful coercion could give a host1le
power the fruits of war without actual conflict. Against Western
Europe and Japan, for example, the Soviet threat comprises both
overt attack, as well as propaganda and other tactics designed to
intimidate and to seduce. Moscow seeks to persuade our allies and
friends to distance themselves from the United States, neglect
their military capabilities, adopt passive policies such as
unilateral disarmament, and ultimately end the 16-nation North
Atlantic Alliance and our mutual defense treaty with Japan, which
reflect our collective resolve to resist Soviet attempts at
domination.

To deter the Soviet Union, America and its allies must make
clear to Moscow that we have both the means and the will to
respond effectively to aggression against our interests. We
emphasize our resolve and ability to respond, but avoid specifying
exactly the nature of our response. This is the essence of our
strategic doctrine of "flexible response," which has been the
foundation of U.S. strategy since 1961 and NATO strategy since
1967. Our forces deter a potential aggressor by confronting him
with three types of possible responses:

To confront an adversary with the possi-

Direct Defense:
bility that his ag~ression will be stopped before he can
achieve his object1ves and without our resorting to
actions escalating the conflict. This response is
sometimes referred to as "deterrence through denial."

To warn an adversary that his

The Threat of Escalation:
aggression could start hostilities that might not be
confined in the manner he envisions -- that escalation
could exact far greater costs than he anticipates, or
could bear.

To raise the prospect that an

The Threat of Retaliation:
attack will trigger a retaliatory attack on the aggres-
sor's homeland, causin~ his losses to exceed any possible
gains. This response 1S sometimes referred to as "deter-
rence through punishment."

46
 The responses summarized above are part of our overall
defense strategy for safeguarding u.s. interests worldwide. To
preserve the common defense, this global strategy for deterring
and combatting aggression must be effective across the spectrum of
conflict, from nuclear and conventional aggression to what is now
termed low-intensity conflict, or LIC.

3. The Strategic Defense Initiative and the

Evolution of Nuclear Deterrence

a. The Necessity of Strategic Defense

Since the dawn of the nuclear era, the focus of American

strategic thought has been on deterring nuclear war by dissuading
our adversaries from using nuclear weapons against the United
States or our allies through the threat of retaliation. Simi-
larly, we have relied on U.S. nuclear weapons to help deter con-
ventional attack as well.

Efforts to defend against nuclear attack also have played an

important role in American post-war strategy, save for a IS-year
period between the late 1960s and 1983, when the rapid buildup of
Soviet nuclear missile forces combined with a corresponding lag in
our progress on technologies for defending against a ballistic
misslle attack to dampen U.S. interest in strategic defenses.
Indeed, it was not until the early 1980s that technological prog-
ress allowed us to accord again a high priority to strategic
defenses. In 1983, President Reagan announced the Strategic
Defense Initiative (SDI) to determine the feasibility of deploying
an effective defense against nuclear ballistic missiles for the
United States and its allies. On the basis of technical progress
in this vital research effort, the United States could have the
option to begin deploying the first phase of a strategic defense
in the 1990s.

Critics of a deployed strategic defense often cite a concept

called mutual assured destruction (MAD) to support their opposi-
tion. This concept describes a condition in which either super-
power, after suffering an all-out first strike, would retain the
nuclear capability to destroy its opponent as a functioning
society. According to advocates of MAD, this mutual suicide pact
somehow constitutes the bedrock of strategic stability. Because
each side can destroy the other, it is argued, war is therefore
unthinkable. Some even claim that our deterrent strategy in the
1960s and 1970s was based on MAD. This is simply untrue, as is
borne out by the discussion on pages 50-55.

47
achieve. It was our resolve to pursue strategic defenses along
with our strate~ic modernization program and LRINF deployment that
brought the Sov1et Union back to the bargaining table. Once bal-
anced reductions begin, strategic defenses would help to ensure
stability during the transition period as we are reducing further
our nuclear missiles. Finally, given the Soviet Union's record of
treaty violations, deployed strategic defenses could help ensure
that once we have negotiated very deep reductions and, possibly in
the longer term, the elimination of ballistic missiles, we would
not be threatened by their clandestine return.

Regrettably, opponents of strategic defense fail to recognize

the role missile defenses can play in securing major reductions in
U.S. and Soviet missile forces, and the difficulty of safeguarding
such reductions in the absence of strategic defenses.

Abandoning SDI (or acce~ting severe limitations on research,

development, and testing, wh1ch would amount to the same thing)
would sabotage our offensive arms negotiations. Since 1977, when
the Carter Administration ~ut forward the first proposal for major
reductions in U.S. and Sov1et offensive nuclear weapons, the
Soviets have opposed such reductions. Why? In large part because
they want both their offensive missiles and a monogoly in stra-
te~ic defenses. If our SDI is ever given up as a 'bargaining
ch1p" with the Soviet Union, the prospect of negotiated reductions
and our insurance policy against Soviet cheating on arms control
agreements will evaporate.

In sum, our SDI has the potential to move us toward a safer

world; one with reduced levels of arms, and with deterrence based
on defense rather than the threat of retaliation. We will con-
tinue our efforts to convince the Soviets to join us in working
out a stable transition toward this sane and achievable goal.

b. Maintaining A Strong Nuclear Deterrent

Despite the prospects for an effective strategic defense

system, and the possibility of deep reductions in offensive stra-
tegic nuclear forces, the need to keep our nuclear deterrent and
our conventional forces strong and ready remains as clear today as
it has for well over a $eneration. Our recent experience in
negotiating an Intermed1ate-Ran$e Nuclear Forces (INF) agreement
demonstrates that a strong comm1tment to maintaining and modern-
izing effective nuclear and conventional forces provides an essen-
tial incentive for the Soviets to negotiate seriously toward true
arms reduction agreements. ----

50
 NATO's commitment toward modernizing its theater nuclear
forces, while at the same time pursuing arms reduction talks with
the Soviet Union, was essential to our achieving an INF agreement.
That unshakable commitment led to the failure of repeated Soviet
efforts to block progress in negotiations and split the NATO
Alliance. Only when it became clear to Moscow that all of its
efforts to derail NATO's modernization plans had failed did the
Soviet Union return to the negotiations it had abandoned, and
engage in serious dialogue leading to an agreement. It is, thus,
with the deepest irony that I regard the claims made by opponents
of NATO's INF deployments that they are responsible for the INF
accord: if their position had prevailed NATO would be without
Pershing lIs or ground-launched cruise missiles (GLCMs), and there
would still be over 1,400 deployed Soviet SS-20 and SS-4 warheads.

Just as our commitment to implement the 1979 NATO Dual-Track

decision was crucial in achieving an INF arms control agreement,
so too is our commitment to the continued modernization of our
strategic nuclear forces vital to any chances for success at the
Strategic Arms Reductions Talks (START). Implementing the Presi-
dent's Strategic Modernization Program will 1mprove the effective-
ness, flexibility, and survivability of our strategic nuclear
forces. This program has been accompanied by our START proposals
to bring about significant reductions in both sides' nuclear
arsenals. As with the INF negotiations, the Soviets were slow to
recognize our commitment to the modernization of our nuclear
forces, and they refused to engage in serious negotiations. As
the deployment of new U.S. strategic systems has proceeded,
however, the Soviet's interest in strategic arms control has
increased. The prospect of confronting modernized and more effec-
tive U.S. strategic nuclear forces has spurred the Soviet Union to
negotiate more seriously. Thus, continued support for the Presi-
dent's program is essential, lest the Soviet Union lose its incen-
tive to make concessions at the negotiating table.

More importantly, modernizing our strategic forces enhances

our strategy of deterrence. Indeed, should we reach an agreement
on deep reductions in strategic forces r we will possess a sound
deterrent only if those forces we reta1n under an agreement are
thorou$h1y modernized. In rebuilding our nuclear deterrent, we
recogn1ze the evidence of Moscow's efforts to prepare for nuclear
war, reflecting a Soviet belief that such a war may, under certain
conditions, be fought and won. Over the past two decades, the
Soviet Union has engaged in a continuous buildup of nuclear forces
(see Charts I.C.3 and I.C.4), that is all the more ominous when it
is coupled with their:

• Increases 1n air defenses;

51
 We deter nuclear attack partially through our nonstrategic
nuclear forces, but primarily through our strategic nuclear Triad
of intercontinental ballistic missiles (ICBMs), submarine-launched
ballistic missiles (SLBMs), and strategic bombers. The combined
effect of these three reinforcing components complicates Soviet
attack planning and its efforts to prevent u.s. retaliation. To
deter all types of nuclear attack, our Triad as a whole must pos-
sess various characteristics and capabilities -- including surviv-
ability, prompt response, endurance, mission flexibility, and
sufficient accuracy and warhead yield -- to hold at risk those
assets the Soviet leadership values most. No single weapons sys-
tem incorporates all of these capabilities. Our deployed sub-
marines are practically invulnerable, but SLBMs currently are less
accurate than our ICBMs. Our ICBMs have hi~her alert rates and
provide a more prompt response, but their fixed basing increases
their vulnerability. Our bombers are accurate and recallable, but
their response is slower than that of ballistic missiles. In
their ent1rety, the syner~istic capabilities provided by the three
types of weapons systems 1ncorporate all of the elements necessary
to deter any type of nuclear attack.

Furthermore, the Triad constitutes an important hedge against

the possibility that a single Soviet technology breakthrough (in
antisubmarine warfare, for example) could threaten our overall
deterrent capability. By maintaining an effective triad, we com-
pel the Soviet Union to disperse its resources against three com-
ponents, as opposed to concentrating them on defeating only one or
two u.s. strategic systems.

The effectiveness of our strategic Triad of deterrent forces

is being enhanced further by deployments of B-1B bombers and
Peacekeeper missiles. Deployment of the full force of B-1Bs and
the first 50 Peacekeepers is planned for completion during this
fiscal year. In addition, the Trident II (D-5) SLBM, whose sur-
vivable hard-target kill capability is so vital to flexible
response, is well on the path to its initial deployment in
December 1989. This past year also saw further successful devel-
opment work on the Advanced Cruise Missile and Advanced Technology
Bomber; both programs will add substantially to our deterrent
capabilities.

In light of the INF Treaty and the resulting reductions in

the size of our nuclear forces in Europe, it will be particularly
important for our remaining forces to be as survivable, respon-
sive, and effective as possible. Thus, improving our theater
nuclear forces to maintain the credibility of our reduced nuclear
weapons systems in Europe will become increasingly important.

54
 In addition to making hardware improvements, we have devoted
a great deal of thought and effort to developing more selective,
discriminating, and controlled responses to the wide and varied
nature of potential Soviet acts of aggression. This flexibility
-- which follows directly from the requirements of flexible
response as initially set forth in the early 1960s -- increases
our ability to deter both nuclear and nonnuclear attacks against
us or our allies. In doing so, the United States recognizes that
a Warsaw Pact decision to attack NATO would come from Moscow, and
accordingly, the United States has the capability to respond
selectively against the source of aggress10n while avoid1ng
striking non-belligerent states.

4. Deterrence and Conventional Defense

a. Deterring Nonnuclear Aggression

To deter nonnuclear aggression we rely on a combination of

nuclear and nonnuclear U.S. and allied forces, which together can
respond to an attack by denying an enemy his objective through
effective defense, by escalating the conflict to a higher inten-
sity or more favorable location, or by retaliating to make our
enemy's costs exceed his potential gains. Thus, this combination
of forces deters by making the outcome of aggression uncertain,
and by posing probable costs that will exceed the anticipated
gains in the m1nds of any potential aggressors.

Effective defense using conventional forces has several

important advantages over nuclear retaliation. First, it is more
credible to potential aggressors contemplatin~ nonnuclear aggres-
sion. Second, it is particularly attractive 1n blocking attempts
at intimidation by a hostile nat10n. In Western Europe, for
example, a stron~er conventional defense posture would provide
citizens and the1r governments increased confidence to resist
Soviet threats and attempts at coercion.

Indeed, the importance of conventional forces as an integral

part of our deterrent has been increasin~ over the years for a
number of reasons. First, the Soviet Un10n's long-term buildup of
its strategic offensive and defensive forces that began in the
1960s effectively ended the U.S. nuclear superiority that existed
in the two decades following the end of World War II. As the
Soviet capability to inflict massive damage on the United States'
homeland has grown, our earl¥ resort to nuclear weapons in a
conflict has become less des1rable. While the United States and
its allies reserve this option, the Alliance cannot rel¥ on it too
heavily. Indeed, we all recognize the importance of ra1sing the

55
nuclear threshold br strengthening our conventional forces, there-
by improving our ab1lity to respond to nonnuclear aggression.

Second, the Soviet Union's continuing emphasis on building up

its conventional forces, especially in Europe, and refining its
doctrine for a theater strategic offensive, highlight the emphasis
Moscow places on conventional forces. As noted in Chapter I.B., a
serious imbalance exists between the Warsaw Pact and NATO in
tanks, artillery, and manpower. Improvements in the guality of
Soviet equipment and increases in the Pact's preposit10ned war
stocks are equally disturbing. The improvements in Soviet power-
projection capabilities also suggest the importance of monitoring
and repairing, as necessary, the conventional balance in areas
vital to U.S. interests.

Third, the elimination of ground-launched ballistic and

cruise missiles with ranges between 500 and 5,500 kilometers under
the INF Treaty, combined with the potential for deep reductions in
strategic nuclear systems, underline the importance of our conven-
tional forces' contribution to deterring Soviet aggression, espec-
ially in Europe. Conventional force improvements will help to
ensure that negotiated reductions in nuclear arsenals enhance the
Alliance's overall deterrent posture and its ability to execute
NATO's flexible response strategy.

Fourth, the possibility of new and possibly more productive

conventional forces arms control negotiations highlights further
the need for our continued attention to conventional force modern-
ization. As we learned in the INF negotiations, the Soviet Union
is far more likely to negotiate in the face of a determined
modernization effort than it is if it possesses a position of
undisputed strength.

Finally, as we have witnessed on many occasions in the past,

our conventional forces are the ones most likely to be actively
and visibly protecting our interests on a day-to-day basis. From
our forces in the Persian Gulf to our forward-deployed forces in
the Republic of Korea and NATO, U.S. general purpose forces, under
the umbrella of a secure nuclear deterrent, are essential to the
deterrence of war on the middle and high end of the conflict
spectrum.

Our ability to deter and, if need be, repulse nonnuclear

aggression also requires that we maintain a chemical warfare
deterrent. Todar the Soviet Union maintains the world's most
formidable capab1lity to conduct chemical warfare, both offen-
sively and defensively.

56
 Our efforts to acguire a chemical deterrent -- that is, a
stron~ chemical defensive posture and a credible retaliatory
capability based on binary weapons -- has achieved some success.
We are fieldin~ improved defensive equipment and procuring our
first new chemical munitions since 1969. Mindful of the prolifer-
ation of existing chemical agents among Third World states, how-
ever, as well as the threat posed by new agents, we must maintain
both the defensive and retaliatory aspects of our carefully
thought out chemical deterrent effort.

In August 1987, we submitted to the Congress a preliminary

assessment of long-range standoff chemical weapons systems. The
report responded to congressional concerns that we look for effec-
tive ways to enhance our chemical deterrent, and its findings will
guide our future efforts in this area. Similarly, we must pursue
defensive improvements to keep pace with the rapidly changing
nature of the chemical threat and the impact of new technologies.
We are also encouraged that our chemical modernization effort
has had an apparently favorable impact on arms control negotia-
tions with the Soviet Union. We must continue these efforts as we
engage in the next round of multilateral discussions at the Con-
ference on Disarmament in Geneva, and in bilateral discussions
with the Soviets.

b. Should Deterrence Fail

As George Washington noted, liTo be prepared for war is one of

the most effectual means of preserving peace." Our purpose is to
prepare for war so well that we successfully deter aggression.
Should deterrence fail, however, our strategy calls for securing
all U.S. and allied interests, denying the aggressor his war aims,
and causing or convincing him to stop his aggression.

In responding to a nonnuclear attack, the United States would

act to defeat the attack and to convince the attacker that his
continued aggression would entail grave risks to his own inter-
ests. Our strate~y seeks to terminate any conflict at the ear-
liest practical time and to restore peace on terms favorable to
the United States, its allies, and friends. While our goal is to
limit the scope of any conflict, U.S. strategy provides for the
flexible and sufficient application of force to ensure that no
area of vital interest is lost by default.

We have also maintained the option of geographic, or

horizontal, escalation as an element of U.S. strategy. This
option would see U.s. forces conducting military operations in
other regions where a combination of our advantages and Soviet

57
vulnerabilities may enable us to restore peace on favorable terms
to us. While in any conflict we would always weigh the option of
geo~raphic escalation carefully, we also would not want Moscow to
bel1eve that our response to any contemplated aggression would be
confined to the Kremlin's chosen point of attack.

Although our conventional forces are structured primarily to

counter the Soviet threat, they must also be prepared to deter
and, if need be, actively combat ag~ression at the lower end of
the conflict spectrum. Indeed, it 1S in the low-intensity con-
flict environment that our general -purpose forces have found
themselves most actively enga~ed over the past thirty-five years.
The followin~ discussion outl1nes the threat we face from these
forms of amb1guous aggression, and what our strategy is for
countering it.

5. low-Intensity Conflict

Low-intensity conflict (LIC) poses a major threat to our

security and our interests around the world. LIC involves
indirect, or ambiguous, aggression such as terrorism, subversion,
and insurgency. These forms of conflict are employed by our
enemies to undermine this country's political, economic, and moral
vitality. By engaging in the protracted warfare common to LIC,
our enemies hope to assault our resolve and ultimately to isolate
us from our fr1ends and allies. In the case of the Soviet Union,
its resort to these forms of aggression, which seek to exploit
instability, particularly in the Third World, are an attempt to
circumvent our conventional and nuclear strength. Indeed, the
very success of our nuclear and conventional deterrents actually
encourage the Soviet's use of LIC's indirect approach.

Our enemies' strategy can be seen clearly in the case of

Grenada. Here a small coterie of communists seized power and
began imposing a totalitarian form of government with the advice
and support of the Soviets and the Cubans. Their ultimate purpose
was to convert Grenada into yet another outpost for regional sub-
version. Our liberation of that island and the capture of plans,
documents, and considerable storehouses of arms afforded us a rare
opportunity to see behind the facade of subterfu~e that charac-
terizes the Soviet's attempt to establish commun1st dictatorships,
while hiding behind well-chosen phrases pleading democratic
principles.

One type of low-intensity conflict -- terrorism -- has taken

on a new character. What once was largelf the activity of small,
frustrated extremist ~roups within countr1es has become a virtual
multinational enterpr1se l and state-sponsored terrorism has
emerged as a new weapon 1n the arsenal of ambiguous aggression.

58
This is not to suggest a vast, single-minded conspiracy manipu-
lated by one source. Instead, what is emergin~ is an underground,
or parallel, international system in which varlOUS states are
engaged in creating, supporting, trainin~, arming, or providing
diplomatic cover for terrorist or~anizatlons. The terrorist
attack on Marines at the Beirut Alrport; the slaughter of inno-
cents on planes, ships, or in cabarets; or the intimidation of
diplomats exercising non-violent means of reconciling differences
have become standard practice for the enemies of the Western
democracies.

Years of stability and prosperity in this country, Europe,

and Ja~an led to an atmos~here of complacence, and a ~rowing
unwi11lngness to accept rlsk in the name of responsibl1ity, or to
defend interests with force if called upon. Ironically, this
sentiment emerged from the years of peace our strong defense has
made possible. It now appears, however, as if that very strength
and the securitr it has afforded us have led many to assume that
peace and securlty are matters of fact, and not the result of our
strenuous effort and enduring vigilance. This complacency
threatens to turn our strength into a weakness, one our enemies
are now exploiting.

LIC uses the instruments of peace, the pretense of accom-

modation, our commitment to moral principle, and the very language
of freedom and democracy as weapons to undermine our resolve. In
this struggle, the war of words and ideas has become every bit as
important as the force of arms.

The challenge of LIC, then, is a formidable one. In meeting

it, we must address not only the problems posed by our enemies but
also the many problems plaguing the developing world. The United
States must work with others to alleviate the social, political,
and economic conditions that deprive so many of the world's
peoples of basic rights or the means of living. Obviously, we are
called upon to do this as Americans, and as human beings, but we
also are summoned to this task because the Soviets and their
proxies have proven so adept at exploiting instability for their
aggressive pur~oses. The communists and others seek to exploit
poverty and injustice by imposing a system of government whose
cruelty is documented by history. We must take measures to pro-
tect our friends and allies, and work to free those who have lost
their liberty and dignity under totalitarian systems.

This is not an enterprise, however, that promises instant

success, nor is it a burden we can bear alone. We must work with
others to achieve a common aim. The essence of our policy of
assisting those who share our ideals must be one of patience and
of helping others help themselves. For these reasons we have
placed great emphasis on long-term economic and political

59
development. This philosophy also underlies our security
assistance effort and our humanitarian and civic assistance
projects.

Since the advent of this Administration, we have seen the

spread of democratic principles and the growth of freer, more open
societies. Just eight years ago, for example, only two democratic
governments -- Venezuela and Colombia -- existed in South America.
Today, only two military regimes -- Chile and Paraguay -- survive
among this continent's 11 republics. The face of the map in Cen-
tral America now includes the democracies of Guatemala, Honduras,
and EI Salvador, as well as Costa Rica. In the Philippines, Mrs.
Aquino leads the democratic reinvigoration of one of our staunch-
est allies. We know, however, that democratic societies are, in
their early stages of development, more vulnerable to subversion
or overthrow. Emerging democratic governments must be provided
with more than moral encouragement; they must receive the material
support designed to promote and protect their development. Nor
can we afford to cease working w1th others whose more authoritar-
ian forms of government are offensive to our principles in the
belief that our neglect will improve their future. The defense of
our ideals and interests demands our involvement to counter the
ambiguous aggression of our adversaries.

Our range of activities at the lower end of the conflict

spectrum includes support to nations facing insurgent threats and
to groups resisting communist aggression; peacekeeping operations
(such as in the Sinai); peacetime contingency operations (such as
against Libya or current operations in the PerS1an Gulf); and
counterterrorism efforts.

a. Insurgency and Counterinsurgency

The period following World War II was a time of rapid change

involving the collapse of European overseas empires, the liber-
ation of countless peoples from colonial rule, and the emergence
of many new states. In many cases the experience of independence
and self-government did not produce a stable political order.
Economic and social problems further complicated the difficult
task of nation-build1ng. If these problems were not enough, a
number of groups, many inspired by communist doctrine, sought to
exploit these problems to seize power through insurgency warfare,
wh1ch combines Leninist subversive political organization tech-
niques with guerrilla tactics.

The insurgent's goal is the development of a long-term

political-military program l using protracted warfare to subvert
and overpower governments 1n order to establish a totalitarian
dictatorship. Cambodia, Nicaragua, Cuba, and Vietnam clearly

60
illustrate the fate of societies that succumb to communist
insurgents. Now EI Salvador and the Philippines face similar
threats.

It also has become clear that the Soviets, the Cubans, and
others are only too willing to assist communist insurgents, and
are investing considerable resources to promote and sustain them.
There are training centers and field adv1sers to assist in deve-
loping clandestine organizations and guerrilla units, subversive
groups, and terrorist organizations. There is a sophisticated
international propaganda program to legitimize these movements
and, as in the case of EI Salvador, political pressure that is
brought to bear on disparate insur~ent groups to unify their
efforts. Once the insurgents are 1n power, however, the Soviets
and their clients step in to consolidate control. In Nicaragua,
for example, the Soviets supply major equipment; the Cubans pro-
vide security advisors, teachers, and doctors; the East Germans
render advice on internal security forces; and so on. The pat-
tern, revealed by the Grenada documents, can be discerned in South
Yemen and Afghanistan as well as in Nicaragua.

In responding to these threats, our role is not to shoulder

the burden ourselves, but to assist others in defending them-
selves. To accomplish this, we must train host nation forces in
the technical skills needed to accomplish their mission, and we
must work with the leadership of these countries to help them
along the road to competent, just civilian government. Further-
more, we must not forget the 1mportance of security. We must be
prepared to provide the training, advice, technical support,
1ntelli~ence, and other assistance necessary to ensure that host
nations military forces are well-trained, professional, and able
to support the broad political-military programs essential to
defeat1ng insurgent movements. These local security forces will
provide the shield behind which educators, doctors, and civil
servants can carry out essential reforms. We must also recognize
that security assistance is our most potent instrument. Security
assistance is not to be viewed as the indiscriminate sale and
transfer of arms to others but, rather, as assistin~ our friends
or allies in providin~ the internal security essent1al to the
growth of democratic 1nstitutions.

Our support is not only valuable to those nations that we

believe are essential to preserving the common defense, but it
also applies to various groups struggling against communist
dominat10n. Our support in the struggle for freedom and the
safeguarding of democracy must also extend to those, such as the
Nicaraguan resistance and the Afghan Mujahideen l who have seen
their countries subverted or conquered by total1tarianism.

61
 b. Peacetime Contingency Operations

As Grenada clearly demonstrated, the Soviets and their

clients are willing to use subversion to expand their influence.
Other states, Iran and Libya for example, also employ indirect or
direct aggression and sponsor terrorist attacks on U.S. citizens
to gain their ends. We must be able to counter such threats when
they arise and deter ambi$uous aggression in the future. This
requires a range of capab1lities, from special operations to gen-
eral purpose forces, equipped and trained to respond immediately
and decisively when called upon.

Our response to Libyan terrorism underscores our willingness

to respond w1th force when reason has failed. The decline of
Qaddaf1's overt use of terrorism is testimony to what effective
action taken in a timely way can achieve. Our current efforts in
the Persian Gulf demonstrate further our resolve to defend our
interests and to provide support to our friends and allies. We,
along with our allies and fr1ends, are determined to protect our
int~rests and the rights of Freedom of Navigation in this critical
reg10n.

c. Peacekeeping Operations

Our military strength and our policy of deterrence have

helped to prevent a major international war. Yet many areas of
the world remain torn by unresolved tensions that can lead to the
disruption of peace and the onset of conflict. As part of our
commitment to 1nternational peace, the United States has employed
its forces in peacekeeping efforts designed to separate belliger-
ents and give them the time and the opportunity they need to
resolve their differences amicably. Today, for example, U.S.
forces are deployed in the Sinai as visible symbols of our effort
to promote peace in the Middle East.

d. Counterterrorism

The growth of international terrorist organizations and the

use of terrorism by a number of states as part of their foreign
policy has changed the complexion of international relations. In
countering terrorism, we must: develop and sustain our intelli-
gence capabilities to penetrate and expose terrorist plots; work
to bring terrorists to justice and to persuade their supporters to
cease their support; preempt their attacks; and maintain the
ability to defend successfully against those terrorist attacks
that do occur. We already have undertaken significant steps to
achieve these goals by developing special operations forces to

62
respond to specific situations, and by enhancing the training and
capabilities of our general purpose forces to counter the
terrorist threat.

Significant ~rogress has also been made in securing the

cooperation of friendly nations, where the timely exchange of
information has made possible the pre-emption of some terrorist
attacks and the apprehension of several key terrorist figures.
While we may never eliminate terrorism entirely, we are working to
create an environment that makes it far more difficult for
terrorists to achieve success.

e. Conclusion

The threat from low-intensity conflict lies in its insidious

nature, and in its ability to misdirect attention from its ulti-
mate consequences. We must remember that our enemies' purpose is
to pursue ambiguous aggression to disarm our resolve and under-
mine our sense of purpose. LIC is one of the most serious chal-
lenges to our security that we face today, and our survival and
well-being could depend on how we comprehend the threat and
respond to it.

6. Supporting Defense Policies

a. Collective Security

For free peoples, cooperation is essential to the preser-

vation of our security and our values. Our system of alliances
for collective security enables us to share our common security
burdens and achieve a division of labor capitalizing on the rela-
tive strengths of each state. Our alliances with the nations of
Europe, East Asia, and our own hemisphere, to~ether with other
important security relationships in those regions and in the
Middle East and Southwest Asia, are critical strands in u.S.
strategy.

Collective security requires that our forces, and those of

our allies, be able to fi~ht together effectively in combined
operations. It also requires a coherent ~rogram of security
assistance and a sharing of key technologies, so that each alli-
ance partner can increase its capabilities for the military role
it accepts for itself. For a complete discussion of how collec-
tive security preserves the common defense, see Chapter I.D.

63
 b. Balance of Forces

To protect our mutual interests, the United States and its

allies must maintain military capabilities sufficient to make our
defense strate~y credible and effective. This does not mean that
we and our all1es must match our adversaries in every category of
weapon system, e.g., number of tanks, aircraft, ships, etc. The
calculus of deterrence and defense comprises many more variables
than mere quantitative aggregates of weapons systems. At least as
important are the performance characteristics of the weapons, the
quality and morale of people operating them, and the operational
methods and tactics used. Moreover, geography and the unique
features of a specific security mission declsively affect the
military forces needed. Finally, the cohesion of our alliances --
into which our partners have joined freely, in contrast to the
alliances of the Soviet Union -- also relieves us from having to
match the Soviet threat weapon for weapon. All these variables,
plus others, are weighed against the threats to our security in
determining our military requirements for protecting U.S.
interests and meeting our commitments.

In 1981, the largest problem we faced stemmed from a 20-year

Soviet arms buildup, which was accompanied in the 1970s by a 20
percent real reduction in our defense effort. The global military
balance -- in Soviet terms, the "correlation of forces" -- was
shifting in favor of the Soviets in their view as well as ours.
Through an investment nearly 50 percent larger than our own, the
Soviets were buying advantages in virtually every?~rea of compari-
son -- e.g., in nuclear forces, in the NATO-Warsa\; Pact balance,
and in Southwest Asia.

With the dramatic strengthening of our military forces since

1981, we have made substantial progress toward ensuring a balance
of forces sufficient to keep our strategy credible and effective.
Regrettably, mandated reductions in our defense effort based on
domestic necessities, rather than on an assessment of the threats
to our interests, may well see the United States operating on the
margins of deterrence. If we falter while the Sovlet buildup con-
tinues unabated, we will pay a price in the form of increased
risks to our national security.

c. Superior Technology and Quality

We and our allies continue to depend heavily on our superior

military technology to offset the numerically larger forces
threatening our security interests. Modern technology makes our
systems more eff~ctive and more survivable • . Additi?nal!Yl a
strong technologlcal edge can protect us agalnst sClentlflc

64
breakthroughs by our adversaries, which could seriously erode our
forces' deterrent and defensive capabilities. We must remember,
however, that mere laboratory advances do not deter aggression.
New technologies must be developed and fielded. If we are slow in
deploying advanced systems, our technological edge on the battle-
field will quickly erode.

To ensure that America's technological advantage over the

Soviet Union is preserved in the decades ahead, the Reagan Admini-
stration is dedicated to promoting a strong national educational,
scientific, and industrial base, while guarding against the
inappropriate transfer of technolo~y to the Soviet bloc. Although
the West's technological lead rema1ns sufficient to maintain a
stable military balance for the present, the technological balance
would shift markedly toward the Soviets if the flow of critical
Western defense technology to the Soviet bloc is not arrested.

d. Forward-Deployed Forces

The United States cannot deter aggression against its world-

wide interests with U.S.-based forces only. We need modernized,
forward-deployed forces that increase our ability to respond
effectively and quickly in the event of a conflict, and to bring
it to a favorable end. Forces positioned in this manner also
reassure our allies of our comm1tment to our common security,
while facilitating in peacetime the integration of U.S. and allied
forces in wartime.

e. Flexibility

Because we know we can never be certain about the location,

time, and nature of future aggression against our interests, and
because our defense resources are not unlimited, our forces must
be flexible enough to respond to a variety of contingencies.
Thus, we field forces that are adaptable to a broad spectrum of
conflict environments and missions. We also accord h1gh priority
to strategic mobility -- our ability to deploy and sustain our
forces over great distances.

7. Matching u.s. Interests, Strategy, and

Capabilities

A key basis for evaluating our defense strategy is to con-

sider how appropriate and well-matched are U.S. interests,
strategy, and capabilities. In an ideal world, our interests,

65
strategy and capabilities would be exactly matched. u.s. and
allied military capabilities would be sufficient to give us vir-
tual assurance that, through our defense strategy, we could safe-
guard our shared interests against any reasonable threats. Such a
state, in essence, would eliminate from our security concerns the
element of risk -- risk being the difference between what we need
and what we have to preserve the common defense. But the total
elimination of risk ln security matters is not feasible. There-
fore, our goal is to keep that risk down to a level consistent
with our nation's wealth, values, and security interests.

There are several options for reducing America's security

risks. Some of these options are wise; others are shortsighted
and dangerous.

a. Reducing Threats

The optimal, yet slowest-workin~ and least certain option for

reducing u.S. security risks is to dlminish the threats to our
interests. It is the least certain because its success depends on
factors outside our control. Still, a key component of u.S.
foreign policy and defense policy is trying to reduce the Soviet
threat through such means as:

• Convincing Moscow to restrain its military expenditures,

cease its aggression, and stop its exploitation of insta-
bilities around the world;

• Negotiating genuine, verifiable reductions ln nuclear

arms and nonnuclear forces;

• Keeping our military-related technology out of Soviet

hands; and

• Pursuing what we term "competitive strategies," which are

programs that align enduring u.S. strengths against
enduring Soviet weaknesses, thereby rendering Soviet
military power less potent over time.

We also try to reduce other threats to our security inter-

.ests, but these efforts! ~oo,.require time and patience • . For
example, reducing or ellmlna~lng -- as ?pposed to c?Unte:lng ~­
the Iranian threat to peace ln the PerSlan Gulf regl0n wlll l1kely
prove a long, arduous task.

66
 b. Scaling Back U.S. Interests

Another option for improving the matching of u.s. interests,

strategy, and capabilities is to scale back U.S. interests. This
option may sound especially tempting because it can be accomp-
lished with a simple u.s. declaration that we are no longer will-
ing to safeguard some security interest or ally. But I am con-
vinced it is not a possible option if we want to keep our freedom.

To those who say we should scale back U.S. interests, I would

ask: Which mutual defense treaties should we repudiate? Which
allies or friends should we abandon? From which international
cause should we retreat? Which American interest should we give
up? For these guestions, I know of no answers that would enable
America to continue along the road that u.s. presidents and Con-
gresses have followed since 1945. Shielding u.s. interests world-
wide provides security for our values and future prosperity. A
breach or weak spot in that shield could endanger the whole and
would call into guestion America's resolve as leader of the
world's democracies.

The interests this Administration seeks to protect are

essentially the same as those endorsed by previous administra-
tions. Indeed, in the nature of things, America's interests and
goals rarely change; and in the last three decades, America's
alliances, treaties, and cooperative arrangements -- which exist
to safeguard our interests -- also have changed very little.

We must constantly review and revalidate our interests world-

wide, which is what we do now, both in the executive branch and In
the Congress. But there is no prudent war to scale back U.S.
interests while remaining true to America s values, maintaining
our alliance commitments, and safeguarding our future.

c. Changing U.S. Defense Strategy

Those reluctant to increase America's military strength to

secure our interests sometimes charge that this Administration's
strategy is lito fight everywhere around the world at once. 1I This
is not our strategy, nor has it ever been.

Our strate$y is to deter aggression against the United

States, its allies, and its interests so we will never have to
fi$ht ~nrwhere in the world. We and our allies seek to do this by
maintaining forces that are capable of responding quiCkly and
effectively to the most serious threats to our interests. We also

67
want these forces to be flexible and strong enough to give us
credible responses to other threats as well. Should aggression
occur in several regions simultaneously, our military responses
would be governed by existing commitments, general strategic
priorities, the specific circumstances at hand, and the avail-
ability of forces.

Thus, our strategy recognizes that a variety of factors would

affect the nature and locations of our military actions; our stra-
tegy is not to try to fight "everywhere at once." The key point
is this: to deter aggression, we and our allies do not plan to
maintain all the forces required for a high-confidence, simul-
taneous defense against all threatened or potentially threatened
areas. But we do require forces sufficient enough to ensure that
our adversaries are not tempted by what they perceive is our
weakness.

This strategy for credible responses to aggression against

our interests is not new. It has been u.S. strategy since we
abandoned the doctrine of massive retaliation in the 1950s. It
has served us well, for example, by maintaining peace on the
Korean peninsula, despite the North's openly stated aggressive
intentions, even when u.S. forces were 1nvolved in contingencies
elsewhere. What is different is this Administration's conviction
that to deter convincingly, we must have the military strength
necessary for actuall1. carrying out credible responses. Other-
wise, we have "hollow' forces, leaving us with a "hollow"
strategy.

The military forces we have advocated since 1981 to support

u.S. strategy are not radically larger than those envisioned by
our predecessors. The difference is that we and the Congress
recognized that these had to be highly capable, ready forces.

In sum, no chan$e in u.S. strategy can reduce our defense

needs without incurr1ng significant additional risks to our
security. Our strategy is to deter aggression by our capacity to
respond to it. The only alternatives to a strategy of credible
response to aggression are early capitulation, early escalation,
or the abandonment of our allies and interests. Absent a with-
drawal to isolationism, there is no easy strategy "fix" that can
reduce the requirements of deploying forces where they are needed
and giving those forces the weapons and support essential to their
effectiveness. Any conceivable, effective strateg¥ will always
require forces strong enough to respond to aggress10n.

68
 d. Strengthening America's Military Capabilities

Our nat!on, 1n summary, has only a limited, long-term poten-

tial for eas1ng our defense burdens through reducing threats,
scaling back U.S. interests, and changing our defense strategy.
Moreover, we know we can never secure even this long-term poten-
tial unless we are strong enough to induce the Soviets and other
adversaries to enter into such threat reduction agreements with
us. Consequently, our primary option must be to ensure that we
have military capabilit1es strong enough to support our strategy
and keep our security risks at a prudent level.

Even without a precise answer to what level of risk we should

accept, it seems clear that we want to bolster our military capa-
bilities for defense missions and for areas of U.S. interest
according to the following guidelines:

• We and our allies must have credible military responses,

the prospects of which convince our adversaries that
aggression would mean unacceptably high costs to them.
So even though we do not specify the nature of our
responses, our strategy is never to tempt our adversaries
to believe that they could pursue aggression at low cost.

• We should, as a minimum, be capable of countering on~oing

improvements in Soviet military power. This capabil1ty
is especially important to us, S1nce we continue to rely
on our technolog1cal superiority to help offset the
Soviet's numerical advantages. We must modernize rapidly
enough to ensure that we never are forced to send our
forces into battle without all of the advantages that our
nation can offer.

• We should rectify vulnerabilities in our forces and cor-

rect clear inadequacies (e.g., ineffective counters to
key Soviet weapons, insufficient ammunition).

Keeping America's security risks at a minimum is the ultimate

objective of our nation's defense budget. Although our current
~udget request is below what many of us would prefer, it will --
1f fully funded -- help us to preserve our gains of the past seven
years.

69
 8. Conclusion

In summary, America's defense strategy is a sound approach

for achieving our goal of preserving our interests, which them-
selves reflect central u.s. values. While we will continue our
efforts to reduce the threats facing us throu~h peaceful means,
the most prudent course of action for preserv1ng the common
defense at present is to maintain adequate military capabilities,
as prescribed in this report. At the same time, we should -- and
do -- monitor constantly our defense commitments around the world,
ensuring they are consistent with our interests in the face of
ever-changing circumstances. We also work continually to refine
our overall strategy to achieve the maximum deterrent and defense
capability for the forces our constrained resources permit us to
field. Our adversaries, however, are not cutting back on their
efforts and continue improving their military capabilities. Con-
sequently, even though our military posture may not regress to
1981 levels, under our current budget request we will be forced to
live with increased risks to our security.

70
D. COllECTIVE SECURITY
1. Introduction

United States national security objectives necessitate a

coalition strategy. We aim to deter aggression against, prevent
coercion of, and if necessary defeat any attack upon ourselves,
our allies, and our friends. Cooperation with our allies and
friends -- ~articu1ar1y in the resource constrained environment we
are faced w1th today -- is indispensib1e in achievin~ more spec-
ific U.S. security objectives, such as rebuffing Sov1et expansion-
ism; combatting low-intensity conflict; ensuring free transit and
access to vital resources; sharing military technology among
friends and denying it to adversaries; expanding support for the
U.s. among other nations; and moderating the pace and direction of
political change abroad. The natural, voluntary cohesiveness of
our alliances, stemming from shared interests, is a major advan-
tage which the United States enjoys over the Soviet Un10n; we can
only benefit from increased emphasis on it. This chapter dis-
cusses how we are improving our collective security and, by exten-
sion, preserving the common defense. The first section, Regional
Security, concerns our efforts in cooperating with friendly
nations to preserve peace. In this way, our allies and friends
are helping us protect our freedoms and interests just as we are
he1pin~ them protect theirs. This mutual effort produces a
synerg1stic effect in which the deterrent value of our combined
strength exceeds the sum of its parts.

2. Regional Security

a. Europe I North Atlantic Treaty Organization

The North Atlantic Treaty Organization (NATO) was established

1n 1949 as a defensive alliance of independent nations, dedicated
to preserving the freedom, common heritage, and well-being of its
people. The Alliance's purpose is to preserve peace by possessing
sufficient military strength and po1it1ca1 cohesion to deter an
attack on any member of the Alliance. As a measure of its suc-
cess, 1988 marks the forty-third consecutive year of peace in
Europe -- the longest per10d of uninterrupted peace on the
Cont1nent since the pre-Napoleonic era.

71
 The Soviet Union also is well aware of the immense strategic
and economic importance of Western Europe. As a result, it has
positioned both the majority and the most capable of its forces
opposite Western Europe. Furthermore, the main objective of
Soviet diplomatic and propaganda efforts is to drive wedges
between us and our European allies. Fortunately, these efforts
have been unsuccessful. In recent years, NATO has strengthened
both its military capability and political cohesion. For example,
despite a carefully orchestrated Soviet propaganda campaign, NATO
moved steadily ahead in deploying intermediate-range nuclear
forces (INF) while also pursuing negotiations with the U.S.S.R.
for their elimination. Only when faced with allied solidarity was
the Soviet Union willing to return 'to the INF ne~otiating table.
With the agreement to eliminate all U.S. and Sov1et INF missiles,
Alliance cohesion will be essential as we seek to optimize our
remaining nuclear and conventional forces for deterrence and
defense in a post-INF era.

Despite the strength and vitality NATO has displayed when

confronting the growing Warsaw Pact military threat, the Alliance
is still challenged by both external and internal threats to its
cohesion. In the face of a sophisticated Soviet "peace offen-
sive," the Alliance must overcome the natural reluctance of its
constituent democracies to devote increased resources to defense
in times of peace.

(2) U.S. Military Capabilities

In keeping with its NATO commitment, the United States main-

tains sizeable forward-deployed and reinforcing conventional mili-
tary forces. These forces and those of our allies, to~ether with
significant strategic and nonstrategic nuclear capabi11ties, are
the indispensable elements of a credible NATO deterrent.

Although our warfi~hting capability, and that of our allies,

has increased substant1allr over the past few years, the steadr
growth and increasing soph1stication of the Soviet threat requ1res
our sustained efforts to maintain an effective deterrent. Hodern-
izin~ our force structure and improving its readiness and sustain-
abi11ty remain crucial to our abllity to deter aggression.

Unfortunately, our troop strength in Europe remains limited by

a congressionally imposed ceiling. No one is proposing indefinite
increases in our European troop strength; indeed, reductions in
Service end-strengths, reduced defense budget requests, and global
requirements for U.S. forces all constrain our troop deployments.
Ne~ertheless, within these constraints w~ nee~ the flex1bility to
adjust European troop strengths as the sltuatlon requires. By

73
restricting our efforts to make essential force improvements, the
ceiling also lowers Soviet incentives to ne~otiate conventional
force reductions. Most important, the ceil1ng connotes to friends
and adversaries alike that we have a political cap on our commit-
ment to NATO that is not responsive to any chan~e in the threat.
The European troop strength ceiling, in short, 1S counterproduc-
tive to u.S. security interests.

(3) Regional Cooperation

~) Burdensharing

Our NATO allies do more for NATO's defense than is commonly

recognized. While our NATO allies account for less than 50 per-
cent of total Alliance economic wealth, they maintain over three-
and-one-half million personnel on active duty, compared to a
little over two million for the United States. In a war, our NATO
allies would provide roughly 60 percent of NATO's total ground
combat power (as measured by div1sion equivalent firepower), and
over 50 percent of NATO's a1r combat power (as measured by numbers
of Air Force tactical aircraft). Furthermore, Great Britain and
West Germany make $20 billion in real estate available free of
charge for u.S. installations, and provide substantial territorial
forces and host nation support to augment u.S. capabilities.
Still, the United States does spend a larger proportion of its
gross domestic product on defense than almost all of its allies,
and certain NATO allies are doin~ less than their fair share by
almost any measure. We are join1ng our other allies in pressin~
hard for all Alliance members to do more for defense. The cred1-
bility of our leadership, however, especially in the light of the
urgent need to improve our conventional defenses, is highly
dependent upon congressional support for our own badly needed
defense improvements.

We also are seekin~ more balanced burdensharing in the Alli-

ance's effort to contr1bute more security assistance to Greece,
Turkey, and Portugal. Much remains to be done to address the
shortfalls, and we are encouraging our other NATO allies to
provide greater support for these three nations. I will address
all of these burdensharing issues in greater detail in my 1988
Report to the Congress on Allied Contributions to the Common
Defense.

(b) NATO Defense Program

Our NATO Defense Program, representing the U.S. contribution

to the common defense, is designed to strengthen the NATO strategy
of "Flexible Response." The INF Treaty preserves this strategy

74
intact, and NATO's military posture will continue to deter
aggression. But sustaining this favorable condition depends upon
NATO's ability to act decisively to continue both nuclear and
conventional modernization. For our part, we must continue our
programs to implement the 1985 NATO plan for Conventional Defense
Improve~ents and the 1983 Montebello Decision on nuclear force
modernization.

Conventional Defense Improvements -- In May 1985, All ied Defense

Ministers approved a plan for conventional defense improvements
(CDI). This plan identified critical deficiencies in conventional
defenses and called for special efforts to overcome those defi-
ciencies.

As part of CDI, NATO approved a group of high-priority force

goals in 1986. Important progress already is being made 1n imple-
menting these goals. For example, the Alliance plans to correct
roughly half of all specific critical munition deficiencies within
the current five-year planning period. Also contributin~ to
NATO's CDI goals are its international armament cooperat10n
efforts, described elsewhere in this chapter. Furthermore, in
seeking ways to spend scarce resources more wisely, we have iden-
tified certain low-cost measures -- like terrain enhancement --
that promise a high payoff for strengthening deterrence and
defense.

Nuclear Planning -- For the las t 20 years, NATO's Nuclear Planning

Group (NPG) has provided a forum for NATO defense ministers to
discuss Alliance nuclear policy and posture. The NPG helped for-
mulate NATO's December 1979 dual-track decision to deploy Pershing
II and ground-launched cruise missiles (GLCMs) in Europe and to
initiate U.S.-Soviet negotiations on INF. In its 1983 Montebello
Decision the NPG decided to reduce NATO's nuclear stockpile in
Europe by 1,400 warheads, while taking steps to make the remaining
warheads and their delivery systems more responsive, survivable,
and effective. These reductions, plus an earlier reduction of
1,000 warheads, have brought NATO's nuclear stockpile to its
lowest level in 20 years. The Soviets have not responded in kind
to our unilateral drawdown.

The NPG is analyzing the implications of the INF Treaty for

NATO's nuclear force posture. Its analysis has thus far concluded
that the necessary improvement measures stemming from the Monte-
bello Decis!on -- i.e., ~oderni~ati~nl correction of maldeploy-
ments, and 1mprovements 1n surv1vab111ty and command and control
of theater nuclear forces in Europe -- have become all the more

75
important in order to sustain credible deterrence in the absence
of INF missiles. The NPG is also considering what other adjust-
ment measures may be necessary to restructure the remaining forces
in light of the INF Treaty.

(c) Host - Nation Support, Cooperative Logistics, and

Infrastructure

Under a~reements with most of our allies, U.s. forces abroad

obtain cons1derable support from NATO host nations in peace and,
potentially, in the event of war. Peacetime arrangements include
providing and supporting U.s. bases, operating joint-use instal-
lations, furnish1ng or operating prepositioning facilities, and
allowing u.s. forces to use host nat10n training ranges. Wartime
host-nation support generally covers a broader range of activities
including biological-chemical decontamination, air base defense,
transportation, and supply.

The United States participates in many cooperative logistics

programs through the NATO Maintenance and Supply Agency. These
1nclude support for weapon systems, such as the Patriot, and a new
program for the consolidated procurement of common NATO munitions.
We also are working with the allies to establish reserve stocks of
critical ammunition items for NATO's Southern Region.

NATO's Common Funded Infrastructure Program contributes

greatly to the effectiveness of U.s. and NATO forces. Infrastruc-
ture support includes: essential operating facilities and protec-
tive shelters for U.s. reinforcing aircraft; facilities for stor-
ing fuel, ammunition, and theater reserve stocks; and a wide range
of communications and electronics equipment for disseminatin~
intelligence information, increasing warning time, and reduc1ng
reaction time in the event of an enemy attack. The program also
provides training facilities and equipment for use by NATO forces
during peacetime. Our allies contribute over 73 percent of total
infrastructure program funding which, during the period 1985
through 1990, w1ll amount to over ~11 billion at current exchange
rates. Much of this contribution 1S for projects benefiting U.S.
forces. Congressional limitations on our participation in this
program, and proposals that threaten to reduce our participation
unless our allies meet certain conditions, could result in the
loss or delay of projects supportin~ our forces. The net effect
would be reduced burdensharing and 1ncreased costs for the United
States.

76
 (1) Interests, Challenges, and Risks

In the post-World War II period the United States has not had
to deploy major military resources abroad in the Western Hemi-
sphere. We have instead concentrated our efforts in this region
on developing stable societies with democratic institutions, the
best long-term guarantee of peace and stability.

The United States has maintained an active security assistance

program in Central America and the Caribbean rim designed to
1mprove the defensive capabilities of the participating nations.
The principal U.S. contr1bution to hemispheric security, however,
has been through a combination of political and diplomatic initia-
tives designed to foster economic development, support dialogue
and.negotiations, and promote democracy and freedom throughout the
reg10n.

We have made much progress, but our gains are now threatened
by Soviet encroachments into the Western Hemisphere aimed at
exploiting hemispheric instability fueled bf economic stagnation
and an international debt crisis of stagger1ng proportions.
Having secured a stronghold in Cuba in the earlf 1960s, Soviet
expansionism added another communist beachhead 1n Nicaragua in
1979, then was thwarted in Grenada in 1983. In Nicaragua, the
Sandinista government, backed by massive Soviet-bloc and Cuban
economic and military assistance, is seriously threatening both
regional stability and U.S. national security interests. Eastern-
bloc equipment and large numbers of Soviet and Cuban advisors have
already made the Sandinista armed forces the largest and most
powerful in Central America. Indeed, they are far larger than
necessary to meet any reasonable threat to Nicaragua's national
security. The rapid growth of the Sandinista armed forces is
destabilizin~ the Central American military balance and threaten-
ing the frag11e democratization process under way in other Central
American nations.

The growth of Soviet influence in Managua also threatens U.S.

security. In times of global crisis, Soviet and Cuban forces,
their power projection capability enhanced by the use of Nicara-
~uan bases and military forces, could close the Panama Canal and
1nterdict our Caribbean, Gulf port, and South Atlantic sea lanes.
This would seriously impair both our ability to obtain vital
natural resources and our resupply of NATO. Our response to this
challenge entails continued support of the Nicaraguan Democratic
Resistance Forces to pressure the Sandinista regime to restore
democracy ~nd freedom to the Nicara~uan people. Military pressure
by the res1stance forces was primar1ly responsible for bringing
the Sandinistas to the negotiating table w1th the other Central
American nations. Our continued moral and financial backing of

78
the Nicaraguan freedom fighters is necessary to ensure Sandinista
compliance with the Guatemala Accord. Today, Soviet-bloc aid to
the Nicaraguan communists is more than all U.S. aid to all of
Central America, and ten times more than U.S. aid to the
Nicaraguan resistance.

The United States must also support South American efforts to

combat low-intensity conflict, including communist-supported
insurgencies, drug trafficking, and terrorism. Our long-standing
friendly relations with South American nations have been jeopard-
ized by severe legislative restrictions on the military assistance
we can provide to South American military and police forces.
These restrictions are even more important in light of recent
Soviet economic initiatives that could lead to improved bilateral
politico-military relations with several South American countries.

To the north, the threat to the United States and Canada from
Soviet strategic forces has been steadily increasing. Maintaining
our security against this threat will require our continuing the
United States-Canada combined military command of NORAn, plus
prudent surveillance, air defense modernization, and progressive
research in advanced technologies for aerospace defense.

(2) Military Capabilities

The Commander in Chief of the United States Southern Command

(USCINCSO) is responsible for the more than 10,000 U.S. military
personnel stationed in 19 of the 20 countries of Central and South
America. Most of these personnel are based in Panama, location of
the headquarters for the Southern Command. The command provides
for the defense of the Panama Canal in conjunction with the Pan-
amanian Defense Force; monitors regional m1litary security assis-
tance programs; is responsible for U.S. military operations on the
Central and South Amer1can land mass; and supports counter-drug
operations in the region. The Commander in Chief of the U.S.
Atlantic Command (USCINCLANT), headquartered in Norfolk, Virginia,
is responsible for the Caribbean and waters adjacent to Central
and South America. U.S. Forces Caribbean in Key West! Florida, is
a subunified command under USCINCLANT. It is respons1ble for
coordinating all joint Service matters in the Car1bbean, including
security assistance and military support to narcotics control.
There are over 4,500 military personnel stationed in the Caribbean
islands, most of them at the U.S. naval bases in Guantanamo Bay,
Cuba, and Roosevelt Roads, Puerto Rico.

The Commander in Chief of the North American Aerospace Defense

Command (CINCNORAD), headquartered in Colorado Springs, Colorado,
is responsible for aerospace defense and survillance of the North
American continent. Some 800 personnel -- from both the United

79
States and Canada -- are assigned to this combined military
command.

Forces Command (FORSCOM) is a specified command responsible

for the land defense of the continental United States, for coope-
rating with Canadian forces in the combined land defense of the
United States and Canada, and for maintaining forces ready to
reinforce other commands worldwide. Headquartered at Fort
McPherson, Georgia, FORSCOM comprises over one million Active
Component, Army Reserve, and Army National Guard personnel at
installations throughout the United States.

(3) Regional Cooperation

Military cooperation with friendly nations of the reg10n 1S a

vital part of the United States' hemispheric strategy to promote
peace and stability. Annually, USSOUTHCOM conducts military
training exercises and deployments that provide incidental bene-
fits to regional allies m1litarily, politicalll' and economically.
For example, FUERTES CAHINOS engineering exerC1ses held by regular
U.S. Army, Reserve, and National Guard units, involve the building
of roads, bridges, and other facilities in the region, thus
strengthening local government infrastructures and accelerating
national economic growth. Humanitarian and civic action missions,
such as those conducted during the recent earthquakes in Ecuador
and El Salvador, exemplify military actions constantly being
undertaken by USSOUTHCOM in support of U.S. regional strategy.

USCINCLANT likewise conducts joint and combined exercises in

the Caribbean, including UNITAS, conducted annually; SOLID SHIELD
and OCEAN VENTURE, which alternate on an annual basis; and UPWARD
KEY and TRADEWINDS, which are conducted more frequently on a
smaller scale. These exercises include engineer training that
benefits regional governments as well as U.S. forces through the
construction and repair of schools and other public facilities.
Large-scale military support -- for example, surveillance, mobi-
lity, and communications support -- has also been provided to
federal narcotics interdict10n efforts in the Caribbean to stem
the flow of illegal drug traffic into the United States across our
southern borders.

In North America itself, we continue the successful coordina-

tion of our defense efforts with Canada -- with whom we share the
world's longest unfortified border -- under the auspices of the
Canada-U.S. Basic Security Plan. For the combined land defense of
both the United States and Canada, Forces Command coordinates
planning with the Canadian Forces Mobile Command.

80
 c. East Asia and the Pacific

(1) Interests, Challenges, and Risks

Our security interests in East Asia and the Pacific -- politi-

cal, economic, and military -- are extensive. This economically
vital region has surpassed Europe as the United States' largest
trading partner and the margin of difference grows each year. The
region boasts, in Japan, one of the world's leading democracies.
In other East Asian countries, the emergence and political matura-
tion of democratic institutions has focused attention on the
region as an area of political development and rapid economic
growth.

Challenges to the region's econom1C and political successes

spring from many quarters, but the primary threat to sustained
peace and stability remains the expansion of Soviet military power
and influence in the area. Modern1zation of Soviet air and naval
forces and the concurrent augmentation of Soviet power-projection
capabilities give evidence to the true objective of Sov1et policy
in the region: gaining influence through the threat of armed
force rather than through diplomacy and trade.

Other challen~es to u.S. security interests stem. from regional

threats to our fr1ends and allies. North Korea cont1nues
threatening the Republic of Korea (ROK) with military forces far
exceeding those reguired for self-defense. Despite growing ROK
military capabilit1es and the presence of u.S. troops, North Korea
remains capable of launching a massive attack against the ROK with
minimal warning. There is also the danger that the North could
undertake terrorist operations aimed at subverting either the
political processes at work in the South, or the 1988 Olympics.

The Cambodian people's sufferin~ under Vietnamese military

occupation continues unabated into 1tS ninth year. At the same
time, our ally, Thailand, is threatened by over 135,000 Vietnamese
troops in Cambodia. Helping Thailand meet re~ional threats and
defend its borders against Vietnamese aggress10n remains a primary
objective of u.S. alliance strategy for East Asia and the Pacific.

The Philippines has undergone severe turbulence in the two

years since the restoration of democratic institutions following
the February 1986 revolution. Political divisions among demo-
cratic forces and the continuing threat of a virulent communist
insurgency pose serious challenges to the future of Philippine
democracy. The United States unequivocally supports the elected

81
civilian government of the Philippines and our defense relation-
ship rests on that government's continued success.

The suspension of our Australia-New Zealand-United States

(ANZUS) security obligations to New Zealand, which resulted from
the prohibition of U.S. naval ship visits to that country,
presents a challenge to regional security in the South Pacific.
Both the United States and Australia have reaffirmed that their
mutual rights and obligations under the ANZUS Treaty remain in
place and provide the framework for a resumption of trilateral
cooperation should that become feasible.

(2) U.S. Military Capabilities

Reflecting our long-standing concern for the region's

security, we have active mutual security agreements with Japan,
the Republic of Korea, the Philippines, Thailand, and Australia
and have established non-treaty security relationships with
several others countries as well. Yet we cannot adequately defend
our interests in East Asia and the Pacific with U.S.-based forces
alone. The proximity of Soviet forces, and those of Soviet
surrogates, to our Pacific allies and interests imposes severe
demands on the timeliness of our response. Because our interests,
concerns, and values are shared by many nations of the region, and
because we must be capable of deterring aggression and responding
quickly in the event deterrence fails, we maintain ground, naval,
and air forces in Japan and Korea, and naval and air forces in the
Philippines, plus naval carrier battle groups and Marine
amphib10us forces in the Western Pacific.

The U.s. Commander in Chief, Pacific (USCINCPAC), with

headquarters in Hawaii and forces spread throughout the region,
has responsibility for U.s. military operations in an area
cover1ng over 50 percent of the earth's surface.

(3) Regional Cooperation and Burdensharing

Military cooperation with many countries in the Pacific is

crucial to the United States' strategy of deterrence and forward
defense. The broad support these countries provide us -- includ-
ing access to bases, host-nation support, and participation in
combined exercises -- si$nificantly enhances our capabilities and
promotes r~gion~l stabil1ty. Several countries are particularly
1mportant 1n th1s respect:

83
 Japan -- Our security relationship with Japan is the foundation
of U.S. defense policy in East Asia and the Pacific. The U.S.
nuclear umbrella and defensive shield -- combined with Japan1s
commitment to defend its territory, air space, and vital sea lines
of communication out to 1,000 miles -- make the prospect of
Pacific operations inherently risky and complicated for the
Soviets. In 1987 the government of Japan determined that its
national interests required a flexible, non-quantitative defense
spending criterion, still premised on self-defense roles, in lieu
of its former, arbitrary one-percent-of-the-gross-national-product
defense spending cap. Achiev1ng a greater self-defense capability
will requ1re signif1cantly more effort by Japan in the 1990s. We
encourage the Japanese government to pursue these efforts. At the
same time, we recognize the substantial support Japan has given to
U.s. forces in the region. Tokyo already provides us with the
most financially generous host-nation support (HNS) agreement of
any nation ($2.5 billion in 1988 alone), and has voluntarily
agreed to assume more than $100 million annually in additional
U.S. labor costs through 1991.

China -- Our developing defense relationship with China is

based on common security interests. A secure, modernizing China
can be a force for peace and stability in East Asia and the world.
Recognizing that Ch1na is a friend, the United States has sought
to playa positive role in China's defense modernization. We will
continue to pursue high-level dialogues, functional military
exchanges, and military technological cooperation in areas that
are of mutual interest to China and the United States. In doing
so, we also will take into account the interests of other friends
and allies in the region.

Republic of Korea -- The United States and the Republic of Korea

(ROK) are working closely together to ensure that our collective
security remains strong. We are sharing intelligence information
and conducting combined exercises to ensure that we are ready for
any type of aggression.

Thaiffind -- Thailand's independence, stability, and territorial

integrity are crucial to peace and security in Southeast Asia. As
a 10ng-t1me friend and treaty ally, the Un1ted States has sup-
ported Thailand with a broad range of programs to modernize and
1mprove the Royal Thai Armed Forces, to include participating in
combined exerC1ses, providing military equipment and training
under the security assistance program, and concluding a war
reserve stockpile agreement. We are also continuing to furnish
modest aid to the non-communist resistance forces seeking to
liberate Cambodia from Vietnamese domination.

84
 The Philippines -- Our security relationship with the Philippines
predates both NATO and our regional alliances. The contemporary
basis for our close military relations is found in our Mutual
Defense Treaty of 1951 and Military Bases Agreement of 1947. Our
alliance is grounded in a common reco~nition that the security of
the Philippines, which sits astride v1tal sea lanes, strongly
influences peace and stability in the entire East Asia and Pacific
region. The presence of u.s. forces at Clark Air Base and Subic
Bay Naval Base constitutes our military contribution toward pre-
serving our common interests of peace and security. Our security
assistance program -- an FY 1988 request of $110 million in mili-
tary grant aid and $2.6 million in military training grants -- is
designed to assist the Philippine armed forces in meeting their
alliance responsibilities by e9uippin~ and training them to pro-
tect the nat10n, and by enhanc1ng the1r military professionalism.
Our current efforts are focused on providing the equipment needed
by the Philippine armed forces to combat the current communist
insurgency that threatens the democratic gains of the February
1986 revolution.

AustraliaandNewZealand-- The regional stability provided by the

ANZUS Treaty now rests on the close security cooperation existing
between Australia and the United States. In 1987 the enactment of
legislation transformed into law the New Zealand government's
policy preventing normal patterns of alliance cooperation. The
United States has confirmed that our ANZUS security obligations to
New Zealand remain suspended pending adequate corrective measures.
The strength of the alliance relationship between Australia and
the United States is reflected in our continuing active defense
cooperation.

d. The Near East, South Asia, and North Africa

(1) Interests, Challenges, and Risks

The United States has critical securitf interests 1n these

regions that have spawned the following objectives: deterring
Soviet aggression; denyin~ the Soviet access or influence in the
region that might comprom1se the free world's access to energy
resources; assuring the stability and security of friendly states,
especially those strategicallf positioned relative to oil
resources; inhibiting escalat10n or the spread of armed conflicts;
and reachin~ a just, peaceful, and enduring settlement to the
Arab-Israel1 conflict.

The United States is facing serious challen~es to its inter-

ests throughout these regions. Armed conflict 1n the Western
Sahara, Libyan aggression in Chad, the Iran-Iraq war, Iranian

85
 To counter this threat and safeguard our interests, President
Reagan has approved a three-pronged strategy. One element
involves vigorous u.s. diplomatic efforts to halt arms sales to
Iran and end the Iran-Iraq war, as well as to reduce other
regional tensions. The second element involves our support for
the moderate Arab states, including escorting U.S.-flag vessels 1n
the Persian Gulf. The third element involves a halting of all
u.s. imports from Iran.
There are risks involved in this strategy, but we remain con-
vinced that the risks of alternative courses of action are even
greater. There is no risk-free way to protect our vital inter-
ests. Our best course is to minimize and manage those risks and
to chart a steady course aimed at ending the war and communicating
to our friends -- and our adversaries -- our resolve.

(2) Military Capabilities

Geographic military responsibility for the region is shared by

three commanders in ch1ef: the European Command, responsible for
most Mediterranean littoral countries; Central Command, responsi-
ble for Southwest Asia; and Pacific Command, responsible for the
South Asian countries. Following our decision to refla~ 11
Kuwaiti tankers and provide them protection in the PerS1an Gulf,
we created the Joint Task Force M1ddle East (JTFME) to provide
essential command and control for our increased naval presence,
which includes the U.S. Middle East Force (MIDEASTFOR) that has
been stationed in the Persian Gulf for nearly 40 years.

Adequate levels of general purpose forces are available 1n the

event of a regional crisis. Clearly, however, a timely and effec-
tive U.S. response to military threats will hinge on non-treaty
relationships with friendly states for rapid force deployment and
resupply, access to local facilities and support, and assistance
from local military forces.

(3) Regional Cooperation

North Africa -- The Uni ted States has longs tanding security
relationships with Morocco and Tunisia. We maintain close contact
w~t~ ~oth countries ~s we seek to strengthen their military capa-
b111t1es through equ1pment purchases and training, and as we
negotiate for expanding access and transit rights for our forces
during crises.

87
 NearEast -- Our ability to respond to crises in the Eastern
Mediterranean and Southwest Asia has increased during the past
year, in part through our extensive security assistance relation-
ships with Egypt and Israel. We are expanding bilateral joint
mil1tary exerC1ses with each country, negotiating prepositioning
arrangements, and revitalizing defense industrial cooperation.
Small numbers of U.S. personnel are also contributing directly to
preserving peace in the Near East by serving as members of the
Multinational Force and Observers in the Sinai, and with United
Nations Truce Supervision Organization contingents in Egypt,
Lebanon, and Syr1a.

Persian Gulf -- Our protection of U.S.-flag vessels to assure

freedom of navigation in the Persian Gulf requires extensive host
nation support. For example, Saudi Arabia has supported deploy-
ment of U.S. AWACS aircraft since 1980 and has provided fighter
support for our missions in Saudi airspace. During the Stark
inc1dent, the Saudis scrambled F-15s to protect AWACS aircraft and
their oil facilities, assisted in our search and rescue efforts,
and readied their military hospital to receive our casualties.
Kuwait has offered free fuel, as well as maintenance support, for
MIDEASTFOR ships escorting refla~ged tankers. Bahrain has leased
us facilities for an administrat1ve support unit, and provided
extensive support to our naval presence in the Gulf (MIDEASTFOR),
principally throu~h port visits, maintenance facilities, and
commercial refuel1ng. Oman, the only Middle East country with
which we have a formal access a~reement, conducts combined exer-
cises with U.S. forces and prov1des support for our Indian Ocean
naval forces.

SouthAs~ -- Pakistan continues playing a key role in our

efforts to oppose Soviet aggression in Af~hanistan. We are
seeking to expand our strong security ass1stance and defense
industrial relationship with Pakistan. Although we have very
serious concerns over the prospect of nuclear proliferation, we
believe that our assistance program provides the best basis for
encouraging Pakistani restra1nt in the nuclear area. We have
increased our security cooperation with India, particularly in the
area of defense industrial production assistance. We are examin-
ing other potential areas for technological cooperation and train-
ing which we hope will expand our military relationship with this
key country.

88
 e. Sub-Saharan Africa

(1) Interests, Challenges, and Risks

Our objectives in sub-Saharan Africa remain constant: con-

tinued free world access to the continent's vast mineral wealth; a
rollback of Soviet influence; im~rovement in our own relation-
ships; a reduction in regional v10lence; the encouragement of
economic, social, and ~olitical development; and occasional
militarr access to fac1lities in the event of regional or South-
west AS1a contingencies. Real economic and political $rowth in
Africa is presently hosta$e to the violence prevalent 1n the
continent, much of which 1S spawned or encouraged by the Soviet
bloc and Libya. In Angola, Soviet advisors, some 36,000 Cubans,
and massive infusions of Soviet weaponry prop up a regime which
again this year proved unable to defeat UNITA's freedom fighters.
In Mozambique and Ethiopia, other civil wars rage, with the
governments reluctant to sever their weapons pipeline from the
Soviet Union or to negotiate with their op~onents. Libya con-
tinues its adventurism throughout the cont1nent and, thou$h
soundly thrashed by Chadian forces last year, doubtless w1ll
attempt to hold the Chadian territory it still illegally occupies
and regain more of its southern neighbor's territory. Civil war
also rages on in Sudan with implications for U.S. regional inter-
ests.

In addition to this seemingly endemic violence, economic

devastation brou$ht on by ill-conceived and ~oorly executed
governmental po11cies is widespread, and Afr1can leaders, recog-
nizing this, are moving toward market economies. Natural and
manmade catastrophes -- particularlr drought, deforestation, and
insect infestation -- and a burgeon1ng AIDS pandemic add to the
gravity of the situation. We believe stron$ly that the region's
problems must be addressed primarily by po11tical and economic
means, and that military resources should be constrained and
directed toward bringing a reduction in violence. Only in a
climate of relative ~eace and renewed economic ~rogress are our
national objectives 1n Africa likely to be atta1ned.

(2) U.S. Military Capabilities

U.S. military responsibilities for the sub-continent reside in

three unified commands: our Central Command is responsible for
the strategic Horn of Africa (Kenya, Somalia, Sudan, Djibouti, and
Ethiopia); our European Command for the bulk of the continent; and
our Pacific Command for the four Southwest Indian Ocean island
nat~ons of Mada$a~car, Mauritius l Seyc~ell~s, ~nd Comoros.
Ass1gned U.S. m1l1tary presence 1n Afr1ca 1S m1nuscule, numbering

89
 (3) Regional Cooperation

Africa's strategic location and excellent -- though widely

dispersed -- harbors and airfields make it of significant impor-
tance to u.s. operations in Southwest Asia and the Indian Ocean.
A number of East African states such as Kenya, Somalia, and
Djibouti, have allowed us to use facilities in their countries to
support operations in the region. We have also used facilities in
West and Central Africa, as was recently demonstrated when this
type of support was provided to facilitate the flow of U.S. logis-
tical support to Chad. We appreciate this cooperation, and will
continue supporting our friends in Africa to deter or, if neces-
sary, to respond to ag$ression, as we have in Chad. Our principal
tool in this endeavor 1S security assistance, which though very
modest in scale is carefully tailored to local needs and capabili-
ties, and highly cost effective. To avoid duplication of effort
and to build on the extensive experience of our European allies,
we are working closely with countries such as the Un1ted Kingdom,
France, Germany, and Italy in carrying out security assistance and
other related programs in Africa.

f. Humanitarian Assistance

Our humanitarian assistance projects promote u.S. security

needs abroad while improving the welfare of indi$enous popula-
tions. Since the DoD Task Force Report on Human1tarian Assistance
in 1984, the Congress has le$islated new authorities for more
effective DoD programs of th1s type. Current forms of assistance
include: prov1ding rural medical, dental, and veterinary care;
constructing and repairin$ rudimentary surface transportation
systems, sanitation faci11ties, and other public works; trans-
porting private sector humanitarian cargo; providing excess DoD
property for humanitarian purposes; providing airlift, personnel,
and materiel for U.S. disaster relief efforts upon request from
the Agency for International Development (AID); and training local
forces to improve their professionalism, leadership, and demo-
cratic civil-military relations. These efforts involve U.S.
active duty, Reserve, and National Guard personnel in projects
that improve their own skills and promote U.S. interests while
enhancing the stability and well-being of the host country and its
population.

91
 3. Security Assistance
a. The Role of Security Assistance In National Strategy

(1) Objectives

Security assistance is a fundamental component of u.s. defense

and foreign policy. By contributin~ to a balanced country package
of military and economic aid, security assistance supports inde-
pendent political development; promotes stability; encourages
economic development and reform; contributes to base and facility
access needed to bolster our own force projection capabilities;
and promotes the interoperability of U.S. and allied forces to
strengthen our collective security framework. Security assistance
is also our principal instrument for combatting low-intensity
conflict (LIC). In summary, security assistance plays a signifi-
cant role in preserving our own security through collective
efforts.

(2) Components of Security Assistance

Our security assistance program comprises five major compon-

ents, four military and one economic:

• Foreign Military Sales Credit Financing (FMSCR) provides

direct credits to countries, either at market or con-
cessional interest rates, for the purchase of u.S. equip-
ment or services;

• Our Military Assistance Program (MAP) provides funds on a

grant basis to allies and friends to procure u.S. defense
articles and services to strengthen their defense capa-
bilities;

• The International Military Education and Training Program

(IMET) is a low-cost, grant-aid foreign policy instrument
through which we provide or support education and training
for foreign military personnel in the United States;

• Peacekeeping Operations (PKO) involve our military forces

in peacekeeping roles in several unstable areas around the
world; and

92
 • The Economic Support Fund (ESF) offers economic assistance
on a grant or loan basis to developing countries. The ESF
complements other forms of economic assistance by helping
rec1pient countries avoid economic and political insta-
bilities that can threaten their security. It cannot be
used for military or paramilitary purposes. Although ESF
is not implemented br the Department of Defense, it is
part of this country s overall security assistance effort
and is an essential complement to our military assistance
programs.

Unlike U.S. defense programs, security assistance is not

funded in our two-year defense budget. Instead, it is funded in
those foreign assistance monies appropriated to the President.
Thus, it continues operating on an annual budget cycle.

b. Trends

(1) Funding Reductions

Security assistance, particularly the military segment! is

only a small fraction of the total resource effort support1ng U.S.
foreign and defense policies. Yet, despite its proven importance
and cost-effectiveness, the Congress has severely curtailed the
funding allocated for security assistance. Using FY 1985 as a
baseline, the federal budget 1ncreased by almost 2 percent by
FY 1987. Foreign aid, however, of which security assistance is a
component, was reduced by 29 percent in FY 1986 and by another 17
percent in FY 1987.

Furthermore, in FY 1986, the Con~ress cut the President's

request for security assistance fund1ng by more than 20 percent,
after which the sequestration required by Gramm-Rudman-Hollings
reduced the appropriation br another 4.3 percent. Many strate-
gically important countries funds were reduced, with cuts ranging
from 4.4 to 83 percent. For FY 1987, security assistance was
reduced by 21 percent from the President's request and 10.6 per-
cent below FY 1986 actual levels. The military element was 26
percent below our requested level and some 14 percent below
FY 1986 actual levels. Aggravating these cuts, the Congress
earmarked roughly 85 percent of all military assistance funds for
just five countr1es -- Egypt, Greece, Israel, Pakistan, and Turkey
(see Chart I.D.6), thereby causing drastic reductions for many of
the remaining countries, with some receiving no funding at all.
Fortunately, we did receive a $364 million supplemental appro-
priation, although it was 52 percent less than requested. Even

93
 In addition to this grant aid, the Soviets are providin~ other
financial concessions, including offering credit at concessionary
rates, accepting payment in soft currency or in commodity ship-
ments, and rescheduling or forgiving long-term debts.

Soviet arms transfers have also provided a means for gaining

basing rights abroad, as well as entree for Soviet advisors in the
recipient country. For example, Soviet involvement in sub-Saharan
Africa remains high. In Ethiopia there are approximately 1,700
Soviet military advisors. Likewise, in Mozambique about 850
Soviet military advisors train Mozambi9ue's armed forces. In
Angola, the presence of 36,000 Cuban military surrogates augments
direct Soviet support which, in 1987, consisted of deliveries of
additional Flogger fi~hter aircraft, HIP H helicopters, SA-2 and
SA-8 surface-to-air-missiles (SANs), and numerous tanks, artillery
pieces, and BMP armored vehicles.

In Asia, the recent improvement in Soviet-North Korean rela-

tions has been marked by Pyongyan~'s receiving additional Flogger
fighter aircraft and surface-to-air missiles. Since 1978,
Moscow's military aid to Hanoi totals almost $12 billion, with
over 2,500 Soviet military advisors now stationed in Vietnam.
Soviet assistance to India includes significant military deliv-
eries of Fulcrum fighter aircraft, submarines, transport aircraft,
and surface-to-surface missiles.

In the Middle East, Moscow is continuing its arms shipments to

Syria, Iraq, and Libya. In Latin America, there are unique oppor-
tunities for the Soviets to weaken u.S. strategic interests. The
continuing flow of large amounts of military and economic aid to
Cuba and Nicaragua, Cuba's long-standing military debt, and the
broadening commercial ties between Peru and the U.S.S.R. highlight
the importance Moscow attaches to this region. Since 1982,
Soviet-bloc assistance to Cuba and Nicaragua alone totals more
than $25 billion in economic aid and over $9 billion in military
assistance.

(3) Impact of Trends

The consequences of our greatly reduced and extensively ear-

marked security assistance budgets are dramatic. Without adequate
funding we are unable to meet our allies' and friends' security
requirements, to sustain their ongoing modernization programs,
or to fund programmed spare parts and maintenance. Each non-
earmarked country will suffer termination or curtailment of some
multiyear programs along with procurement planning and budgetary
disruptions. Moreover, drastically reduced U.S. security

97
assistance funding affects our efforts to achieve international
defense cooperation.

The adverse consequences of this trend in underfunding

security assistance will likely include the following:

• Obstructin~ our ongoing force modernization programs to

correct maJor NATO force deficiencies. Reduced funding of
these requirements may force program termination, will
likely shrink European demand for u.s. arms exports, and
will hamper our collective security efforts by
complicating other bilateral negotiations.

• Foregoing the opportunity for security assistance to

contribute to the war against illegal drugs. Underfunding
particularly threatens our carefully nurtured indigenous
drug surveillance operations with friendly nations in the
northern tier of South America and the Eastern Caribbean.
• Decreasing the force readiness of critical friends and
allies, notably Turkey and Pakistan. This could prove
more costly to us than the slight burden of funding
programs at the requested levels.

• Weakening defense cooperation and restrictin~ our access

to key facilities throughout Africa, the Indian Ocean, and
the Pacific Basin. This could prove particularly
troublesome in Kenya, the Philippines, and Thailand.

• Reducing u.S. influence and leverage in the Middle East.

This could fatally undermine our overall efforts to build
a sustained regional peace by providing moderate Arab
states with the necessary means to defend themselves from
their radical neighbors.

c. Conclusion

In summary, reductions in our security assistance budget from

FY 1986 through FY 1988 have eroded the security and well-being of
friendly countries, and put important u.S. forei~n and defense
policies at unnecessary risk. But the greatest impact of these
cuts has been on the perceptions of friends and allies who fear
that the United States cannot honor its commitments nor exert
strong and effective leadership. At the same time, adversaries
are gaining confidence that they can challenge our interests with
impunity. The programs represented by the FY 1989 request are

98
lean. Further cuts to our security assistance budget risk serlOUS
damage to u.s. interests worldwide.

4. International Armaments Cooperation

a. Objectives and Emphasis

Our national security needs cannot readily be met with our

resources alone. Therefore, we cooperate with allies and friends
in acquiring military equipment. International armaments coopera-
tion serves an array of coalition strategy goals. It reduces
needless duplication of research and development (R&D) efforts by
sharing the best available technology among allies. It promotes
commonality and interoperability among friendly forces, thereby
facilitating joint operations. It improves incentives for our
allies to invest in force modernization and burdensharing.
Finally, it achieves economies of scale throughout the acquisition
and support cycle. Lack of cooperation in recent years has
resulted in wasteful duplication in R&D and weapons production.
National weapons programs have led to the de~loyment of six types
of main battle tanks, six types of fighter alrcraft, and a
plethora of anti-tank missiles and armored vehicles within NATO.
Our increased sharing of defense systems and equipment will ensure
that the free world maintains adequate military strength within
realistic resource expenditures.

b. Resources

Driven by resource limitations and a commitment to a strong

conventional defense, the United States and its allies have pur-
sued armaments cooperation as an effective means of correcting key
conventional force deficiencies. To increase the affordability of
planned and ongoing u.s. research, develo~ment, and production
programs, we are augmenting steadily our lnvestments in coopera-
tive efforts in which development costs and resources are shared
with our allies. As a result, we project that our investment in
cooperative programs will increase from the current 3 percent of
research, development, test, and evaluation (RDT&E) resources to
25 percent by the year 2000. In the mid-term, we expect annual
cooperative R&D new-start fundin~ to reach $300 mililon for NATO
and ~40 million for non-NATO natlons. This will better enable us
to fleld strong conventional forces.

99
the effective use of the combined industrial potential of all NATO
nations.

We are working with other allies and friendly countries to

take advantage of combat experience and/or innovative techno-
logical developments to bolster the indigenous ca~abilities of
these nations toward a more economical and effect1ve military
modernization.

United States, allied, and friendly resources are not con-

centrated primarily in one nation, as 1n the Soviet bloc. Through
armaments cooperation we are working to lessen Moscow's advantage
in this area. We are increasing our investment in cooperative
programs, institutionalizing procedures for considering coopera-
tive programs, and expanding organizational and staff support for
these efforts. These ste~s, and the Congress's strong backing of
them, are visible indicat10ns of our commitment to mutually bene-
ficial cooperation.

5. Technology Security

a. Introduction

Technology security remains a critical underpinning of our

collective security. Technology security programs are essential
to maintaining the qualitative edge we rely on to offset the War-
saw Pact's quantitative advantages in troops and weapons. These
programs do this by protecting our military-related technology
from Soviet exploitation. From a budgetary stand~oint, compre-
hensive technology security programs protect our 1nvestments in
defense and avoid the greater defense expenditures that would
otherwise be required to counter more advanced Soviet systems.

Effective technologr security requires a collective approach,

because a single nation s la~se can undo the efforts of others to
control the transfer of crit1cal technology. At the same time,
our coordination with our allies and friends is necessary to
ensure that controls on technology transfer do not hamper ap~ro­
priate sharing of technology with nations friendly to the Un1ted
States.

102
 b. Recent Developments

We are now confronting new challenges and developments that

serve to remind us that we cannot become complacent 1n our pursuit
of technology security.

One development is the recently revealed string of sales by

Japanese and Euro~ean companies of pro~eller manufacturing tech-
nology to the Sov1et Navy -- serious v101ations of collective
export control standards that are exacting very high costs upon
the United States and its allies. At least seven years ago, a
Soviet foreign trade organization contacted Japanese and European
trade firms regardin~ the purchase of multiple-axis automated
propeller manufactur1ng equi~ment. Toshiba Machinery Company
undertook to provide the bas1c milling machinery, and Kongsberg
Vaapenfabrikk of Norway agreed to supply the numerical controllers
(the "brains") and production software, as it had previously done
with other Western countries' machines bein~ shipped to the Soviet
Union and China. In 1981, those two compan1es sent representa-
tives to Moscow to sign contracts with the Soviets. The com~anies
submitted false export documentation to their governments, 11sting
technical specifications on their applications that were far lower
than the actual specifications. In 1983 and 1984, eight machines
and accom~anying computer software were installed in Leningrad's
Baltic Sh1pyard, which makes propellers for the Soviet Navy.

The costs to Western security of illegal technology transfers

are staggering. This particular sale of propeller manufacturing
technology, for example, will help make Soviet submarines substan-
tially quieter, better enabling them to avoid detection by allied
forces. To counter the effects of all technology transfer, the
West will have to spend billions of dollars. Furthermore, this
ille~al transfer comes at a time when NATO's merchant fleets have
decl1ned so much in size that they cannot meet the Alliance's
reinforcement needs. Thus these merchant fleets, u~on which NATO
relies so heavily, now face an even greater threat 1n the form of
a dramatically improved Soviet submarine force. This development
will obviously place an increased burden on NATO's naval forces in
the event of a conflict with the Soviet Union.

A second new challenge stems from the Soviet Union's

increasing emphasis on new technologies. The Warsaw Pact has a
disturbing quantitative lead over NATO in conventional forces, and
high-level Soviet writings increasingly stress the revolutionary
implications of these new technologies. Improvements in Soviet
military technology are enhancing Moscow's capability to execute
its conventional blitzkrieg strate~y against NATO. This makes it
even more crucial to protect our m1litary technologies.

103
 Additionally, with increased contacts with the West, Soviet
efforts to acqu1re Western technology are expanding throu~h
methods like Joint ventures with Western firms that expl01t legal
trade channels; the use of circuitous trade diversions; document
falsifications; and outright espionage. Indeed, Moscow's deter-
mined efforts demonstrate that acquiring Western technology is one
of the highest Soviet priorities. Consequently, our efforts to
protect dual-use technologies -- those that can be used for both
military and civilian purposes (such as advanced computers) -- are
every bit as essential as our controls over strictly military
goods. Indeed, our expanding science and technology exchanges
with the Soviets, with1n the broader context of increasing Western
contact with the U.S.S.R., could increase the Soviet's opportuni-
ties to acquire our militarily significant technology if we and
our allies and friends do not maintain our vigilance.

c. Control Efforts

(1) International

Our collective technology security depends on effective

cooperation with our allies. The focal point for this cooperation
is the Coordinating Committee on Export Controls (COCOM), which
includes our NATO allies (except Iceland) and Japan. At COCOM we
and our allies agree on what strategic products and technologies
must be denied the Soviets and what collective measures we must
take to accomplish this.

Another major cooperative COCOM concern is the need for more

uniform enforcement procedures among member nations, particularly
since the Soviets are so adept at exploiting any and all proce-
dural loopholes. Unegual enforcement also penalizes the 1ndus-
tries of those countr1es where enforcement 1S more comprehensive,
creating tension among the cooperating countries and making indus-
tries more reluctant to comply with regulations. Therefore,
serious efforts are being made by COCOM members to beef up their
individual laws and enforcement mechanisms. For example, in the
wake of the illegal exports by the Toshiba Machinery Company,
Japan significantly strengthened its export control law.

Of course, no one country or group of countries in COCOM has a

monopoly on sophisticated technology, and there is growing diffu-
sion of militarily useful technolog1es into new markets where
governments are not so accustomed to the need to protect their
goods from East-bloc predators. For this reason, a major thrust
of our efforts is obtaining the cooperation of major non-COCOM
trading partners in preventing Soviet-bloc access to COCOM-
controlled technology. This cooperation usually takes the form of

104
comprehensive stra~e~ic trade arrangements that facilitate legiti-
mate trade in sens1t1ve goods with non-COCOM countries while
minimizing the risks of theft or diversion. u.s. exports that
have been illegally diverted can be stopped as they transit other
countries. Through these efforts, alternative sources for COCOM-
controlled goods are being made inaccessible to the Soviet bloc.
Agreements of this type have been worked out with several Asian
countries. Other countries such as Sweden, Austria, and
Switzerland have adopted their own control systems.

(2) Domestic

Last year President Reagan declared that u.S. government

agencies would examine ways of simplifying u.S. controls to ensure
that they do not hamper u.S. firms in the international market-
place. Some misguided critics have been callin~ for a broad
dismantling of export licensing authorities, wh1ch could gravely
damage our national security. A far better course is being
followed by the Administration, which is pushing for increased
international cooperation in COCOM l and is increasing u.S. govern-
ment use of automation in export l1cense application processing to
serve the u.S. exporting community more eff1ciently. The Defense
Department's clearinghouse for export control -- the Defense Tech-
nology Security Administration -- has taken the lead ~overnment­
wide in installing and utilizing automated decision a1ds and data
systems. They are desi~ned to screen information and to identify
more quickly those app11cations requiring further investigation.
Our new systems are also providing an automated methodology making
it possible to estimate the economic impact of Western technology
transfers to Soviet-bloc countries.

d. Conclusion

In summary, our technology security initiatives at home and

abroad are again enabling the West to expand its lead in tech-
nology areas critical to future defense systems. Our lead over
the Soviets in state-of-the-art integrated circuit technology,
which had fallen to two-to-three years in 1981, has rebounded to
at least seven years, in lar~e part because of the effectiveness
of our export controls. It 1S not enough simply to best the
Soviets technologically. We must also prevent the Soviets from
harvesting the fruits of our own defense investments, our free
market economy, and our free spirit of inquiry and innovation.
Protecting our technolo~ical advantages enables us to spend less
on defense while utiliz1ng one of our Alliance's strengths to
exploit a Warsaw Pact weakness.

Holding firm to our present technology security strategy is

essential to maintaining our collective security in the 1990s.

105
Illegal and imprudent sales show that there can be very large
costs when specific technologies are lost, and that American
security now depends heavily on protecting other nations' tech-
nologies. The 1ncreasing importance of conventional arms in
Europe requires the West to 1nte$rate technology security into its
defense and arms control strateg1es. Only if we can keep our lead
in technologies with military applications can the United States,
its allies, and its friends maintain a strong and stable
deterrent.

106
E. REDUCING AND CONTROLLING ARMS

Our primary arms control goal remains achieving effectively

verifiable and stabilizing arms agreements with the Soviet Union
leading to true reductions in nuclear and conventional arms, and
global reductions in military spending. Our arms control policies
are designed to supplement our overall defense policy -- not sup-
plant it. Our successes, including the intermediate-range nuclear
forces agreement, have resulted from our determination to bargain
from a position of strength.

1. The Intermediate-Range Nuclear Forces

Agreement
Our success in the intermediate-range nuclear forces (INF)
negotiations resulted from NATO's steadfast adherence to the
December 1979 decision to deploy INF, and the President's refusal
to weaken our position in order to speed agreement. The "zero
option" was considered impossible to achieve by critics when
proposed by the President in 1981. In the face of allied soli-
dar1ty, however, Moscow finally accepted our position. The INF
Treaty will eliminate all ground-launched U.S. and U.S.S.R. bal-
listic and cruise missiles with ranges between 500 and 5,500 kilo-
meters.

The principles the United States adhered to during the INF

negotiations, established in part by the NATO ministers in the
1979 decision, were the foundations of our ne~otiating strength.
First, we demanded equality of rights and lim1ts under any agree-
ment. We refused to accept Soviet proposals in the INF talks that
would have locked in existing Soviet advantages in INF missiles.
Second, we insisted that the negotiations remain bilateral. The
United States will not negotiate limits on, or discuss compensa-
tion for, the nuclear forces of another country. We therefore
insisted that any agreement must place equal 11mits on U.S. and
Soviet forces, w1thout including British r French, or any other
country's nuclear forces which are ne1ther owned nor controlled
by the United States -- under the U.S. total. Third r we required
that limitations be applied globally; the range, mob1lity, and
transportability of modern Soviet m1ssile systems make regional
limits insuffic1ent. Finally, we required that any agreement be
effectively verifiable. This requirement cannot be overempha-
sized. Whatever a~reements we reach must be verifiable with
unambiguous criter1a to identify violations in a timely manner.
These principles continue to gU1de us in our negotiations with the
Soviets in the Strategic Arms Reductions Talks, and the Defense
and Space Talks.

107
and SLBMs (submarine-launched ballistic missiles), and heavy bom-
bers, with no more than 6,000 total warheads deployed on them.
This agreement was a major step forward, and we have attempted to
build upon it at Geneva. Progress is also being made on sublimits
pro~osed by the United States that will promote stability by
limiting the number of ballistic missile warheads on ICBMs, es~ec­
ially heavy ICBMs -- the systems most suitable for a first strike.
Both sides have agreed that deployed ballistic missile warheads
would be limited to 4,900, with no more than 1,540 warheads
deployed on heavy ICBMs. Mobile missiles ~resent a particularly
difficult verification problem. Our position is to ban these
missiles, although we have asked the Soviets to explain to us how
they think these missiles are verifiable.

A major political obstacle to progress is Moscow's attempt to

hold any agreement in START hostage to limitations on the Stra-
tegic Oefense Initiative (SOl) that would effectively crip~le or
eliminate the program. We absolutely reject such pre-conditions,
just as we did in the INF talks. SOl is a research and technology
program on defensive systems that threatens no one. The Soviets
themselves have long understood the importance of strategic
defenses, and have devoted far more resources toward researching
and developing their own strategic defense program than we have.
We estimate that over the last two decades the Soviets have
invested roughly as much in the development of strategic defenses
as they have in strategic offensive forces. While we are willing
to discuss the relation between offense and defense, the Soviets
must desist in their efforts to stop SOl.

3. The Defense and Space Talks

Our goal in the Oefense and Space Talks (OST) is to conVince

the Soviets to join us in making a fundamental change in the
nature of the strategic balance by increasing reliance on effec-
tive strategic defensive systems rather than maintaining the
current nuclear offensive standoff. Progress has been limited
because the Soviets continue pushing for provisions in a OST
a~reement that would essentially kill SOl. We seek a Soviet com-
mitment to explore with us how a coo~erative transition to greater
reliance on defense could be accomplished.

The United States took steps to alleviate Soviet concerns

about SOl during the October 1986 meeting in Reykjavik. President
Reagan offered a proposal in which both sides would agree not to
withdraw from the Antiballistic Missile (ABM) Treaty for ten
years. During that time (while continuing research, development,
and testing permitted by the ABM Treaty), the sides would agree to
reduce by 50 percent strategic offensive arms by 1991, and to
eliminate all remaining offensive ballistic missiles by the end of

109
1996. At the end of 1996, both sides would be free to deploy
strategic defenses, unless they agreed otherwise.

Unfortunately, Soviet General Secretary Gorbachev responded

with an effort to stop SOl. He demanded that we agree to observe
over the next ten years stricter limits than are provided for in
the ABM Treaty, limits the U.S.S.R. refused to accept when the
treaty was negotiated. These limits would prohibit the testing of
space-based elements of a defense system outside of laboratories.
W1th this proposal! Secretary Gorbachev held progress on elimi-
nating ballistic m1ssiles hostage to the crippling of our SOl
program.

In response to Soviet rejection of our Reykjavik proposal,

Secretary Shultz offered a new defense and space proposal during
his April 1987 meeting in Moscow. Consistent with our joint com-
mitment that 50 percent reductions in strategic offensive forces
should be our pr10rity objective in the current START negotia-
tions, we proposed not to withdraw from the ABM Treaty through
1994. After 1994, either side would have the right to deploy
defensive systems of its choosing unless both sides agree other-
wise. Our new proposal also attempts to respond to Soviet stated
concerns about the predictability of our future research efforts.
We have proposed an annual exchan~e of programmatic data on
planned strategic defense activit1es, reciprocal briefings on
our respective strategic defense efforts, visits to associated
research facilities, and establishment of procedures for reci-
procal observation of strategic defense testing. All of these
have been rejected as inadequate by the Soviets, who insist that
the ABM Treaty be adhered to in such a way that SOl is crippled --
while Soviet ABM programs are allowed to go forward.

4. Nuclear Testing limitations

With regard to limitations on nuclear testing, this Admini-

stration has been forthright in explaining to the American public
the national security requirement for continued nuclear testin~,
which the United States conducts in full compliance with exist1ng
international agreements. Furthermore, nuclear testing has been a
major factor in our ability to reduce dramatically the destructive
power of our nuclear arsenal since 1960 (see Chart I.E.2).
Briefly put, as long as we must rely on nuclear weapons to deter
Soviet aggression, nuclear testing will be required to ensure that
our nuclear weapons remain safe, reliable! effective, and surviv-
able -- in short, that our deterrent rema1ns credible.

110
 5. Conventional Arms Control

Separate from nuclear arms control but equally significant

are the ongoing conventional arms control negotiations. These
talks gain added importance in light of the recent signing of the
INF Treaty and ~rogress in START negotiations. The United States
has a responsibility to act in concert with its NATO allies to
ensure that a conventional balance is struck in Europe which both
enhances regional stability and preserves the Alliance's ability
to execute its strategy of flexible response.

It is im~erative that NATO approach any conventional arms

control negotiations with the Warsaw Pact in a unified manner. By
doin~ this, NATO will project the same stren~th of resolve as it
did in successfully pursuing the "Dual Track decision of 1979.
Any decision by the United States to take unilateral steps in
conventional arms control will only weaken perce~tions of NATO
resolve, both within the Alliance and in the Soviet Union.

6. Chemical Arms Negotiations

The Administration also favors the long-term goal of elimi-

nating chemical weapons, and negotiations in this area continued
to make progress in 1987. The multilateral negotiations at the
Conference on Disarmament in Geneva have struggled with some of
the complicated issues surrounding the proposed global ban, such
as preserving industry's rights in the context of effective ver-
ification, and establishing the complex organizational structures
that would oversee a ban. An international industrial experts
meeting was convened in July to be~in assessing such tasks. The
bilateral discussions with the Soviet Union, which were introduced
as a result of the 1985 Geneva Summit, have now met for seven
rounds, and an eighth is planned. The bilateral talks also have
focused on the issue of verification and the requirements of
entering a ban into force.

7. Nuclear Risk Reduction Centers

This Administration's commitment to seeking improved

confidence-building measures involving the Soviet Union took
another practical step forward with our a~reement, signed on
September 15, 1987 to establish Nuclear Risk Reduction Centers
(NRRCs). The objective of NRRCs is to help reduce the risk of war
between the United States and the Soviet Union that otherwise
might result from accident, miscalculation, or misunderstanding.

112
 The NRRCs are not intended to supplant existing channels of
communication, or have a crisis-management role. Their principal
function will be to exchange information and notifications as
required under certain existing and possible future arms control
and confidence-building agreements. Indeed, the NRRCs will playa
key role in the exchange of information required to achieve
effective verification of the INF agreement.

8. Treaty Compliance

A final critical point must be made. Arms control agreements

enhance stability and reduce the threat of war only if the parties
fully comply with them. Past and current Soviet practices 1n this
regard, however, give us serious cause for concern. The Soviet
record of repeated arms control violations! coupled with their
refusal to take actions to correct those v10lat10ns, have worked
to undermine the confidence essential to an effective arms control
process. These infractions call into question the important
security benefits that arms control can bring. Therefore, we
cannot take Soviet compliance for granted, and must monitor Soviet
activities with care to determine that the Soviet Union complies
with its obligations under current arms control accords. Should
violations occur, we must take all necessary action to redress the
impact of those violations. We shall insist upon nothing less
than full compliance, and will not allow a "double standard" of
compliance to arise under which the United States, but not the
Sov1et Union, is bound by an arms control agreement.

9. Conclusion

In summary, although we have made considerable progress

toward reducing the threat of nuclear war, much rema1ns to be
accomplished. Achieving a START agreement leading to 50 percent
reductions in strategic nuclear arms, especially strategic bal-
listic missile warheads, would be another major step toward a more
stable nuclear environment. The progress we have made is attri-
butable directly to our negotiating from a position of strength:
the Soviets did not offer to destroy signif1cant numbers of SS-20
missiles until our Pershing lIs were deployed, and our strategic
modernization program and SDI are responsible for the Soviet deci-
sion to engage in serious START negot1ations. Great credit must
be given to our NATO allies for their determination, despite
strong internal pressures, to support the "Dual-Track" decision.
In the face of such determination the Soviets have little choice
but to negotiate. I ask the Congress to show equal determination
and courage in supporting our programs and negotiations. Together
we can achieve our shared $oal of greatly reducing the threat of
catastrophic nuclear war w1thout sacrificing our security.

113
F. COMPETITIVE STRATEGIES
To be complete, our defense decisionmaking process must
inte$rate our policies and program plans into a coherent whole,
and 1nclude a broad perspective on the United States' evolving
strategic position and requirements. We must establish and, as
appropriate, institutionalize organizations and procedures to
ensure such integration. This chapter discusses one of our
efforts toward this end: our Competitive Strategies Initiative.
As highlighted in recent reports, Competitive Strate$ies has
become a major element of defense strategy and plann1ng. One of
our most important goals for 1987 was to be$in the process of
institutionalizing Competitive Strategies w1thin the department.
I am pleased to report that considerable progress has been made
toward this end.
1. Definition and Concept
Competitive Strategies is a method of strategic thinking that
evaluates our national defense strategy in terms of our long-term
relations with the Soviet Union. Its objective is to enhance
deterrence and U.S. and allied security. This initiative is aimed
at identifying, developing, and prioritizing key U.S. defense
efforts intended to shape the pace and direction of superpower
military competition into safer and more stable areas. We are not
attempt1ng to bankrupt the Soviet Union or undermine its economy;
we are striving to influence the way the Soviets use their defense
resources in order to minimize the threat that they pose to our
interests.
A competitive strategy analysis employs a chess match
methodology that aligns enduring U.S. strengths against enduring
Soviet weaknesses in a move-response-counterresponse sequence.
This process seeks to exploit areas of potential high leverage
gain that will ideally result in a new military capability
reflecting a combinat10n of operational concepts, systems, tech-
nologies l and or$anization a~proaches. By establishing this way
of think1ng with1n our ~lann1ng processes, I expect that we will
be better able to ident1fy and focus on the most effective use of
our resources. In this sense, Competitive Strategies contributes
to the nation's fiscal health as well as to our strategic think-
ing. It offers a sensible approach to preserving or improving our
military capabilities as resources become more scarce.
2. Organization
To institutionalize Competitive Strategies, we began by form-
in$ the Competitive Strategies Council. I chair the council,
wh1ch meets to provide guidance for the initiative, approve candi-
date Competitive Strate$ies, and set priorities for their imple-
mentation. Other counc11 members include the Deputy Secretary of
Defense, the Under Secretaries of Defense for Acquisition and
Policy, the Service Secretaries, the Chairman of the Joint Chiefs

115
of Staff, the Service Chiefs, the Directors of the Defense Intel-
ligence A~ency (DIA) and the National Security Agency (NSA), and
the Steer1ng Group's Chairman.
Subordinate to the council, the Competitive Strategies Steer-
ing Group also was established. Chaired by the Special Advisor to
the Deputy Secretary of Defense, the steerin~ group's primary
functions are to identify candidate Competit1ve Strategies areas,
designate personnel to serve on the Competitive Strategies Task
Forces, orchestrate the efforts of those task forces, and make
recommendations to the council. Steering group members include
representatives from the offices of the Under Secretary of Defense
for Acquisition; the Service Secretaries; the Chairman of the
Joint Chiefs of Staff; the Service Chiefs; the Director for Pro-
gram Analysis and Evaluation; the Director of Net Assessment; and
the Director, DIA. To oversee the day-to-day management of the
Competitive Strategies process, we established within my
secretariat a Competitive Strategies Office, with representatives
from each of the military departments.
A Senior Intelligence Committee was organized to provide
intelligence support to the council and to the Competitive Stra-
tegies process. The committee is composed of the DIA Director
(Chairman), the NSA Director, the Service Intelligence Chiefsl
Directors, the Deputy Director for Intelligence from the Central
Intelligence Agency; and the Director of the Intelligence Com-
munity Staff. An Interagency Intelligence Working Group, sub-
ordinate to the committee, is available to assist the steering
group and the task forces. The bulk of the analysis in developing
Competitive Strategies is done by a series of independent, ad hoc
task forces. Each task force is an intradepartmental group
constituted for a period of approximately 90 days to examine
particular issues selected by the council.
3. Results
Last July our first Com~etitive Strategies Task Force was
convened to examine mid-to-h1gh intensity conventional conflict
focused on Europe within a global war context. Task force members
began their evaluation by identifying critical militarf tasks that
the Soviets consider essential for prosecuting a war w1th NATO.
Next, they applied a Competitive Strategies methodology against
their findin~s, aligning enduring United States strengths against
enduring Sov1et weaknesses. Based on their analysis, the task
force develo~ed several candidate Competitive Strategies, with
options rang1ng from operational concepts to employ existing
personnel and resources more effectively, to new technologies and
systems. The task force next evaluated the possible range of
potential Soviet responses to the postulated U.S. initiatives.
Finally, prospective American countermoves were considered and the
net result for the United States was assessed.
This first task force looked at global conventional war with
a focus on the European theater. The four recommendations improve

116
NATO's defense posture in areas involving Soviet command and
control operations, and Soviet air and ground penetration
capabilitIes. Their concepts exploit the Soviet requirement for
strict time mana~ement and maintenance of a hi~h-operations tempo.
NATO advantages In data automation and processIng, target
aC9uisition, and intelligence fusion and dissemination can exploit
thIS dependence, providing for more effective use of NATO's
conventIonal capabilities.
A Soviet inability to redress this problem would force them
to compete in an arena in which they recognize they have serious
weaknesses. Task Force proposals now bein~ examined reflect a
combination of new doctrInal and or~anizational approaches,
innovative operational concepts, eXIsting srstems, and emerging
technologies. The aim is to channel competItion into areas in
which we can take advantage of core, long-term Alliance strengths.
Highlights of four proposed initiatives are as follows:
Countering Soviet Air Operations: The task force recommended
that NATO, led by the United States, enhance its offensive
capabilities against Soviet sortie generation by developing a
phased attack on the Soviet's main operating bases and air
Infrastructure led by unmanned aircraft. From a defensive air
perspective, the task force recommended measures to strengthen the
Integrity of NATO's air and ground operations.
Countering Soviet Penetration of NA TO Forward Defenses: The task
force recommended developing an asymmetric force capability
comprised of an integrated network of long-range, mobile weapons
platforms, and target acquisition and command and control assets
capable of engaging Soviet mobile targets beyond the range of
Soviet artillery and multiple launcher rocket systems.
Stressing the Warsaw Pact Troop Control System: The task force
recommended frustrating Soviet tactical operations by blocking
preplanned options. This would force theIr communications to the
operational level where a replanning capability exists. By use of
dIrect attack, sfecial operations! and deception, NATO could
counter the Pact s ability to deVIse and execute operational
responses.
Countering Soviet Global and Multitheater Operations: Finally, to
exploit Soviet aversions to a multitheater, protracted conflict,
the task force recommended developing an offensive warfighting
capability for conductin~ large-scale joint and combined
conventional offensive mIlitary campaigns.
All four of the proposals to improve NATO's defense posture
center on new and improved military capabilities that share a
number of common characteristics; for example: various unmanned
systems (e.g., surface-to-surface, precision standoff, air-to-
surface, and cruise missiles; drones; and RPVs), area munitions,
various extended-range tube-;aunched projectiles, rapidly
emplacable barriers, precision-penetrator warheads, and smart

117
submunitions. The task force proposals take advantage of advances
in automatic data processing, 1ntelligence fusion, and electronic
miniaturization. Each of the recommendations can be enhanced
through extensive use of low-observable technologies and an
integrated command, control l and communications system. The
greatest effect would be ga1ned by synergistic employment of these
capabilities in combination with a robust NATO-wide command and
control system.
The task force's recommendations are now being staffed within
the department to determine the best ways to implement them. In
addition l the Task Force Report has been provided to the Com-
manders 1n Chief (CINCs) of the Unified and Specified Commands,
who will play an important role in implementing any competitive
strategy adopted.
One of the most beneficial byproducts of our efforts to date
is the catalytic effect realized w1thin the department. The
Services and the Joint Staff are all actively participating in the
Competitive Strate$ies Initiative. Others within the department
also are contribut1ng to the collective effort. The Under Secre-
tary of Defense for Acquisition (USD(A» has established a Compet-
itive Strategies Panel. Initially, the panel will focus on tech-
nologies and systems to support the work of the first task force.
In the long term, the panel will manage the department's overall
acquisition support for the initiative. To assist in this effort,
the USD(A) also has chartered a Competitive Strategies Task Force
within the Defense Science Board, comprised of distinguished
civilians from the private sector.
The initiative is gaining momentum. Another task force will
begin work early this fear. The Competitive Strategies approach
also will be factored 1nto our threat assessment, war gam1ng, and
policy review processes. Further, we envision that the concept
will be incorporated into the thinking of our professional staff
colleges and our senior service schools.
The main value of Competitive Strategies is its utility in
changing strategic and fiscal environments. For example, with the
reduction in nuclear arms mandated by the INF Treaty, Competitive
Strategies provides a useful tool to ensure a credible deterrence
in Europe and elsewhere. I also believe that in the resource
constra1ned environment we face in the fears ahead, Competitive
Strategies in this and successive admin1strations will provide the
United States the advantage we need in our long-term competition
with the Soviet Union.

118
A. THE DEFENSE BUDGET
1. Introduction

To achieve America's defense policy goals and preserve the

common defense, we have a sound military strategy that guides
the development, acquisition, and deployment of U.S. forces in
peace and, if need be, in war. The manpower and materiel pro-
grammed to execute this strategy must be sufficient to preserve
our security against existing and near-term threats. Our
defense budget states what resources are required to carry out
our strategy.

Non-defense resources for ensuring the health and welfare

of our people are provided by federal, state, and local govern-
ments, and the private sector. If resources for these purposes
are limited in one sector, another can make up the difference.
Only the federal government, however, provides for our national
defense. If the federal government does not allocate suffi-
cient resources for our security, or does not provide these
resources in a timely manner, no other source will make up the
shortfall. Therefore, our collective purpose must be to request
and enact a defense budget that protects and preserves our
freedom and security in the most efficient manner possible, and
at the lowest acceptable level of risk.

The preparation of a defense budget is a formidable task.

It requires our selecting budget and program alternatives that
utilize our available resources in the most effective and
efficient manner. Defense budgeting during this period of
severely constrained resources is particularly difficult, as we
must make tou~h choices that reduce or eliminate military pro-
grams, resultlng in increased risks to our security. In this
fiscal environment, we must assess carefully the threats to our
security, and the existing capabilities of our forces and those
of our allies. Equally important, our deliberations and deci-
sions must be made with a keen understanding of the dangers we
confronted in 1981 when we last had to restore America's
defenses from the effects of severe underfunding.

2. Security Requirements and Fiscal Concerns

a. Revitalizing Our Defenses

To appreciate fully the difficult challenges we faced in

adjusting our current budget, it is important to understand

121
runs were stretched out, weapon systems' costs sky-rocketed, and
new technologies failed to move into production. America's
prestige declined, and our allies questioned our ability to meet
defense commitments. Unfortunately, these defense reductions
did not contribute appreciably to keeping overall federal
expenditures in line since non-defense spending kept rising.
Furthermore, while America was cutting back on the resources it
devoted to defense, the Soviet Union was engaged in an ambitious
and sustained program to expand and modernize its military
forces. Thus, paring America's defense resources proved not
onlr an ineffective economic policy, but also an unsound
nat10nal security policy.

In 1981, the American people and the Congress recognized

the dangers inherent in our weakened defense posture, and
strongly supported President Reagan's plan for rebuilding U.S.
defense capabilities. The President's program redressed our
immediate defense shortfalls while laying the groundwork for a
long-term modernization program. It has taken seven years and
nearly $2 trillion to redress the short-sighted budget cuts of
the 1970s and restore the defense capability our security
requires -- a well-manned, well-equi~ped, balanced structure of
strategic, general purpose, and spec1al operations forces
capable of deterring aggression across the entire spectrum of
conflict, or of securing U.S. objectives should deterrence fail.
Our more robust militarr posture promotes our leadership amon$
allied and friendly nat10ns, and strengthens our hand in deal1ng
with adversaries.

b. Preserving Our Capabilities

Over the last few years, domestic economic considerations

once again have dictated the level of defense spending, as
reducing the federal deficit became the primary objective in
setting the level and allocation of federal resources. Con-
$ressionally approved levels of defense funding have decreased
1n real terms for the past three years (see Chart II.A.l), for a
cumulative reduction of 10 percent over 1985 levels. We are now
again witnessing the consequences of defense underfunding
through the reemergence of problems in our force readiness and
modernization. Just as in the 1970s l we are being forced to
delay important programs, reduce tra1ning, defer maintenance,
and curtail plans to complete stockpiles of ammunition, spare
parts, and other essential equipment. These stretchouts are
adding greatly to our costs, thereby inviting further reductions
and stretchouts, and jeopardizing the fulfillment of our modern-
ization plans to meet future threats.

Complicatin$ our difficulties has been the absence of

prompt and decis1ve congressional review of defense budget

123
requests, which has g1ven way to delay and vacillation as
considerations other than national security have dominated the
defense budget deliberations. Sadly, appropriation committees
often i~nored mandated budget resolution levels and did not
appropr1ate within either authorization or resolution levels.
Furthermore, authorization and appropriation legislation has
become burdened with restrictions on subjects ranging from
contracting procedures to arms control. Such budgetary disorder
is not conducive to making reasoned defense budget and program
decisions affecting the nation's security. This disorder has
resulted in delays to vital programs and increased costs, which
threaten our ability to achieve our defense objectives, all at a
time when we are trying to lower costs to deflect some of the
impact of severe funding reductions.

The return to a period of unstable and inconsistent defense

funding, combined with bud~etary disarray, have underscored the
reality that improvements 1n defense capabilities are perishable
-- ther cannot be preserved without sufficient resources -- and
insuff1cient support for defense increases the risks to our
security. It is this exact condition we hoped to avoid with the
FY 19887FY 1989 bud~et we submitted last rear. Unfortunately,
it is the same cond1tion we face again th1s year.

3. The FY 1988/ FY 1989 Defense Budget

a. Overview

Last January the President submitted a biennial defense

budget proposing $303.3 billion for FY 1988 and $323.3 billion
for FY 1989. Two-year budgeting, which was recommended by the
President's Commission on Defense Management and re9uired by the
FY 1986 Defense Authorization Act, represents a ser10US effort
to promote stability and consistency 1n defense budgeting. It
could afford DoD significant opportunities to realize savings
and other benefits from assured procurement quantities and
approved levels of effort. Ultimately, the Con~ress did not
provide a two year authorization and appropriat10n. We plan to
continue our two-year cycle of planning, programming, and
budgeting defense requirements, however, and will submit a
biennial defense budget for FY 1990/FY 1991.

After deliberating on our FY 1988/FY 1989 budget request

for nearly nine months, the Congress joined the Administration
in a "budget summit" to end the budget gridlock. In late
December the Congress enacted and the President signed defense
appropriations for FY 1988 consistent with the budget summit
agreement, which provided budget authority of $283.2 billion.
This level is $20.1 billion lower than we recommended. It is,

124
B. DEFENSE MANAGEMENT

1. Introduction

One of our top priorities has been the refining of our manage-
ment practices to continue ensuring our defense dollars are spent
wisely and effectively. The Department of Defense (DoD) meets the
challenge of effective mana~ement by giving priority to those
improvements that will realize the greatest gains. The men and
women of the DoD have been extremely successful in meeting this
challenge, as the improvements and achievements described in the
following pages will show.

2. Management Tools

Two tools that ensure our management improvements are success-

fully implemented are the DoD Council on Integrity and Management
Improvement (DCIHI) and the DoD Hanagement Improvement Plan. The
DCIHI coordinates and integrates the implementation of management
initiatives throughout the department. The Hana~ement Improvement
Plan sets out management improvement priorities in a yearly plan
that focuses resources and attention on important initiatives.
The plan also ensures accountability and tracks our progress
toward specific management goals.

a. DoD Council on Integrity and Management Improvement

The DCIHI is designed to pursue and encourage management

improvements throughout the Department of Defense. At monthly
meetings the DCIHI coordinates and integrates management decisions
by bringing together top executives from the Services and OSD.
During FY 1987, the council met 11 times and considered 28 issues.
On one issue, the DCIHI provided executive leadership and direc-
tion to the civilian payroll/personnel systems consolidation
effort. This effort will consolidate civilian personnel and
payroll systems, resulting in a single personnel system and a
single payroll system for each Hilitary Department, and an inte-
grated personnel7parroll system for the Defense Logistics Agency.
Other Defense Agencies may choose to use one of the seven systems.

To maintain top management attention on DCIHI initiatives, a

follow-up system tracks and monitors the completion of directed
actions resulting from the meetings. In FY 1987, there were 34
directed actions. At the end of the fiscal year, 25 of the 34
actions had been completed.

133
 b. The DoD Management Improvement Plan

The FY 1988/1989 Management Improvement Plan reaffirms our

commitment to excellence 1n management. The plan comprises 28
major management initiatives receiving adequate resources and
high-level attention. The FY 1988/1989 plan has seven goals:
simplify and improve our acquisition process; link the mobiliza-
tion and surge capabilities of the u.s. industrial base with our
warfighting requirements; strengthen financial management direc-
tion, coordination, and oversight; strengthen health program
management; improve force manpower and personnel programs; improve
productivity; and improve the mechanisms for efficient and
effective program management. A discussion of our progress in
achieving many of these goals follows.

3. 000 Management Reforms

a. Acquisition Management

Improving acquisition remains a major focus of our management

reforms. Some of our major efforts are highlighted below.

(1) Acquisition Process

We are continuing to improve our acquisition management

system. The Under Secretary of Defense for Acquisition (USD(A»
supervises the acquisition system's performance and directs DoD
activities on matters of acquisition policy, procedure t and exec-
ution. The revitalized Defense Acguisition Board (DAB), with the
USD/A as Chairman and the Vice Cha1rman, JCS as Vice Chairman,
functions as the primary forum for resolving issues, providing and
obtainin~ ~uidance, and making recommendations. We also have ten
DAB Acqu1s1tion Committees. These committees support DAB deliber-
ations by identifying and resolvin~ issues and formulating
recommendations for DAB considerat1on.

(2) Acquisition Streamlining

Acquisition streamlining is a major DoD program directed at

reducing the time and cost of weapon system acguisition. It seeks
to minimize the imposition of unnecessary requ1rements on system
development and to maximize the contractor's flexibility to
develop the most efficient and effective weapon systems. We also

134
seek to minimize our involvement in the contractor's internal
management practices and focus more on the final results.

Efforts are under way to encourage early analysis and trade-

offs of weapon system cost and performance, identifying the best
value for the DoD while preserving the required capability. A
recent survey completed on 30 acquisition programs indicated that
streamlining is resulting in significant reductions in the time
and cost of weapon system acquisition. We have designated flag-
level streamlining advocates in each Military Department, and over
2,000 key engineering and contract personnel have attended
streamlining training courses.

In a related area, we are expanding our use of the engineering

tools -- specifications and standards -- that are developed by the
private sector, instead of developing specialized military docu-
ments. To date, we have adopted over 4,000 private sector docu-
ments for our use and have a goal of adding 350 annually if they
meet our needs. Through this, the Nongovernmental Standards
Program, we expect to see further improvements in our efficiency
to develop new systems.

(3) Commercial Acquisition and Nondevelopmental Items

We are continuing to increase our use of commercial, "off-the-

shelf" products to satisfy our needs. Whenever possible, we want
to purchase and use items "as is" -- or with onlr minor modifi-
cations -- to avoid the large expenditures associated with devel-
oping new systems. Over the years, we have successfully adapted
numerous commercial items for our use. Examples include DC-9/C-9
and DC-I0/KC-I0 aircraft, and the Chevy Blazer/Army commercial
utility cargo vehicle.

(4) Value Engineering

Value Engineering (VE) analyzes the function of systems,

equipment, facilities, services, and supplies to achieve essential
functions at the lowest life-crcle cost consistent with required
performance, reliability, quality, and safety.

Our VE program has two elements. One is the in-house actiVity

performed br DoD personnel; the other is the DoD contractor pro-
gram. The in-house VE program has resulted in monetary benefits
of millions of dollars annually. In accordance with the Federal
Acquisition Regulation, contractors may submit VE change proposals
and share in the savings if we implement them. In FY 1986, over

135
economical buys and the reduced uncertainty inherent in single
year funding. The Packard Commission supported our efforts for
increasing MYP funding, and I urge the Congress to continue its
support. DoD submitted nine FY 1988/1989 MYP candidate programs
with an initial estimated savings of $932 million. Of these, four
of six FY 1988 requests were approved, with an estimated savings
of $244 million, while the remaining three requests for FY 1989
were deferred. Chart II.B.1 depicts the savings from MYP since FY
1982. The six requests being submitted for FY 1989 are:
modernization of the CH-47 Chinook helicopter and purchase of the
F-16 and AV-8B aircraft; Defense Meteorological Satellite program
components; the HLRS; and the UHF follow-on satellite. Potential
savings total $869 million.

Baselining employs a formal agreement between managers at each

level of program management to establish very specific objectives
for each program. These objectives include the functional speci-
fications, costs, schedules, and other factors critical to each
individual pro~ram. Deviations from these objectives trigger a
management reView to either restore the program to the baseline
parameters, revise the baseline agreement, or cancel the program.
We are completing baseline agreements for approximately 90
programs in full-scale development or production.

Milestone authorization, in which the Congress authorizes

fundin~ for a complete acquisition phase, also enhances program
stability. The Congress authorized milestone funding for four
programs: the Mobile Subscriber Equipment; the Trident D-5
Missile; the Army Tactical Missile System (ATACMS); and the T-45
Aircraft Training System. To~ether they represent a mutual
commitment to program stability of approximately $19.9 billion.

(6) Joint Program Management

Joint programs promote reduced unit costs, meet interoper-

abilitf requirements, and improve logistical efficiency. We use
the JOint Re9uirements Oversight Council (JROC), an instrument of
the Joint Chiefs of Staff, to identify potential joint military
requirements and candidates for joint research and development,
and to resolve Service requirements issues that may arise after
such programs are initiated. There are over 150 joint programs in
various stages of development and procurement. For example, the
Advanced Medium Range Air-to-Air Missile (AHRAH) will be com-
patible with the fire/weapons controls system of the Air Force
F-15 and F-16 and the Navy F-14 and F/A-18, in addition to the
fighter aircraft of NATO countries like Germany and the United
Kingdom. Using an identical missile saved $800 million in
development costs, and reduced procurement costs by $2 billion.
Also, savings of $600 million in development costs and $1.2

137
competition and promote the use of commercial products. Through
our cadre of competition advocates, we are enhancin~ the oppor-
tunity for competition and identifying and eliminating impedi-
ments. We are supporting this endeavor with an automated system
specifically designed for the needs of competition advocates. We
expect steady and continued improvement in this area by continuing
to promote appropriate second-sourcing of major systems and com-
ponents, and advanced planning for competition.

(8) Spare Parts Reforms

The results of our Spares Management Improvement program and

the resources applied to it provide clear evidence that we are
meeting our goal of making meaningful and lasting changes in the
way we acquire and manage spare parts. Spare ~arts reforms have
produced savings and cost avoidances of $1.5 billion in FY 1987,
for a total of $5.6 billion since the program was begun in FY
1984.

One of the most important elements of our spares improvement

program is called "breakout," where parts designated for purchase
from a prime manufacturer are screened to identify other sources
of procurement. In the last four years, 1,033,000 parts have been
screened. Some 222,147 of those were designated for purchase from
the actual manufacturer, while 226,746 were identified for compe-
titive procurement. The breakout program is responsible for
approximately $572 million in savings and cost avoidances in
FY 1987.

During the past year, we have also initiated new pilot pro-
grams to shorten the procurement lead time for spare parts, and to
place more emphasis on spare parts management earlier in the
weapon system design and development process. We are continuing
to examine and apply current technology to improve spare parts
management. For exam~le, we are pursuing aggressive ADP programs
involving the automation of our technical data repositories,
flexible manufacturing to allow economical production of parts in
small quantities, and artificial intelligence to streamline our
parts breakout program.

b. Financial Management

Proper financial management is critical to the success of our

management improvement efforts. We have placed particularly great
emphasis on improving this area over the past seven years and are
achieving positive results.

139
 (2) Cash Management

We have implemented initiatives to improve all phases of cash

mana~ement, focusing on reduced cash hold1ngs, improved cash
rece1pts, and better timing of disbursements. In FY 1987 there
were 44 DoD cash management initiatives that produced $144 million
in benefits. There are 58 initiatives with an estimated $161
million in savings for FY 1988. Since FY 1983, DoD cash manage-
ment improvements have accounted for $550 million in interest
savings to the Treasury (see Chart II.B.3).

(3) Debt Collection

Collection of debts owed to the government is accomplished

through voluntary repayments, salary offset, federal income tax
refund offset, and the use of collection agencies. As part of
this effort, we have collected over $7 million in delin9uent
student loans for the Departments of Education and Hous1ng and
Urban Development through salary offset of DoD employees;
initiated over 22,000 salary offsets of DoD personnel valued in
execess of $40 million for the Veterans Administration; and
collected over $17 million owed DoD through offset of federal
income tax refunds. Additionally, we are the government-wide
agent that matches federal agencies that are owed money with
agencies that employ the debtor.

Our current debt management plan comprises 66 DoD initiatives

designed to improve debt collect10n throughout the department.
These initiatives are expected to reduce outstanding delinquent
receivables by 8 percent in FY 1988.

c. Internal Management Control Program

Our Internal Management Control (IMC) program requires

mana~ers to identify problems that could result in waste, fraud,
or m1smanagement, and to develop and implement corrective action
plans. The IMC ~rogram remains a top management priority and a
key vehicle for 1mproving management throughout DoD. We have
enjoyed numerous successes in correcting management problems since
the program's inception in FY 1983. In fact, by the end of FY
1987, we had corrected 269, or 85 percent, of the problems identi-
fied through FY 1986. Of these corrective actions, 52 were
completed this year.

For example, we discovered that some military installations

did not have adequate control of personally owned weapons;

141
re~istration procedures were weak and policies were inconsistent.
~hls.def~cien~y was corrected by establishing. uniform po!icies!
lnstltutlng tlghter procedures for the retentl0n and reglstratl0n
of personal firearms of individuals living in government quarters,
and closely monitoring for compliance.

Stren~thening the department's internal controls has also

resulted ln lower prices paid for spare parts and better methods
of identifying newly manufactured items.

d. Contract Auditing

The Defense Contract Audit Agency (DCAA) performs all contract

auditing and provides accountin~ and financial advisory services
in connection with the negotiatl0n, administration, and settlement
of contracts and subcontracts for all DoD procurement and contract
administration activities. DCAA audits approximately 12,000
defense contractors, and during FY 1987 these audits produced
savings of approximately $8.7 billion.

Areas of audit emphasis often change to reflect recent DCAA

audit findings, the needs of the acquisition community, and con-
gressional concerns. During the last year, DCAA has undertaken
several major initiatives that have resulted in a redirection of
our audit effort. In particular, our increased audit support for
defective pricing reviews is in direct response to concerns that
defense contractors do not provide DoD with current, accurate, and
complete cost data in their proposals. DCAA has also placed
increased emphasis on performin~ estimating system surveys to
reduce the potential for defectlve pricing in cost proposals, and
increase the overall contractor contract price estimatlng
integrity.

Our contract audits have produced some impressive results.

For example, our evaluation of a pension forecast resulted in
government savings of $107.1 milll0n. A review of actuarial
assumptions indicated the contractor had underestimated pension
fund earnings and overstated salary escalation estimates. Further
review disclosed that pension costs were assigned to inappropriate
accounting periods. The contractor agreed to modify penslon
costs. In another instance, a review of cost growth of certain
materials resulted in government savings of $33 million. The
contractor consistently proposed a cost growth factor of 2 to 5
percent. The auditors concluded these factors were based on
noncurrent and inaccurate historical data. Current studies were
available that showed a 0.2 percent cost growth rate. The con-
tractor agreed and eliminated the use of the inaccurate cost
growth factor.

142
from some of those corrective actions, including $3.0 billion from
IG reports and $6.7 billion from Service audit reports.

Since FY 1982, DoD investigators have generated nearly half a

billion dollars in recoveries, fines, penalties, and restitutions.
Investigations continue utilizing two powerful administrative
tools -- suspension and debarment of contractors -- to counter
procurement process abuses. The number of suspensions and
debarments remains high, as shown in Chart II.B.4.

Our DoD Hotline has received over 45,000 calls and letters
since FY 1982, resulting in $65 million in recoveries and reported
savings. Special Inquiries has conducted over 1,200 noncriminal
investigations since FY 1982, resulting in the stren~thening of
many of the department's management controls and policies, and
reaffirming the notion that individuals are accountable for their
actions.

f. Information Resources Management

Information technology has long been an integral part of most

aspects of DoD operations. To promote the effective and efficient
use of information technology, we have established a Department of
Defense Automated Information System (AIS) Strategic Planning
Policy. This policy requires DoD Components to develop an annual
strategic AIS plan highlighting appropriate planning goals and
serving as the basis for budget requests. It also requires the
Components to ensure that AIS mobilization plans are in place.
Further, we revised the DoD Computer Programming Language policy
by limiting the number of pro~ramming languages used within the
Defense Department and promoting the use of Ada for all DoD
software development.

We are making substantial progress in increasing the level of

competitive information technology aC9uisitions. Based on the
contract dollar value, DoD's competitive procurements of automated
data processing (ADP) equipment increased from 39 percent in
FY 1984 to nearly 70 percent in FY 1987. We anticipate this trend
will continue.

We are continuing programs to provide Information Resources

Management education and training to senior- and intermediate-
level executive users of information and information technology.
The National Defense University teaches courses that provide an
educational background for intermediate- and senior-level military
and civilian personnel in the acquisition and management of
microcomputing-based technology and applications. Also, courses
have been established to improve the application of ADP internal

144
 e. Inspector General

I strongly support our Inspector General (IG) efforts as they

pay handsome dividends across the spectrum of defense operations.
Functional inspections by the IG concentrated on areas such as
management of hazardous waste, productivity, per diem, fuels, and
contract administration services. One inspection found that a
defense component had developed four separate but essentially
duplicate programs for assessing the efficient use of personnel
resources. Integrating these programs could save up to $3
million.

Since FY 1982, our IG auditors have issued over 950 audit

reports identifying billions in savings and cost avoidances. Over
100,000 internal audit recommendations made by DoD audit and
internal review organizations have been adopted by DoD managers.

Chart 11.8.4
Number of Suspensions and Debarments

The impact is widespread and significant, but often cannot be

readily quantified. The DoD has achieved $9.7 billion in savings

143
controls and strengthen life cycle management by ADP program
managers.

g. Productivity

We are firmly committed to improving DoD productivity. Our

Productivity Improvement Plan for FY 1989 has been expanded to
include over 437,000 military and civilian personnel managing DoD
functions and programs valued at approximately $46 billion. By
1992, we will further expand our productivity program to include
approximately one million DoD personnel, with the objective of
improving their productivity by an average of 3 percent each year.
We are also enhancing productivity measurement by establishing
unit cost measures for functions ldentified for lmprovement under
the President's productivity initiative. To support these plans,
we have an aggressive productivity improvement process that seeks
to raise awareness, recognize successes, and develop and refine
the tools that support increased defense productivity.

The efforts of our DoD Task Force on Productivity in the

Support Operations, which was established in 1986, have paid off.
The FY 1989 Productivity Improvement Plan incorporates many of the
Task Force initiatives. One of these, the Productivity and
Quality Team (P&Q) concept, uses existing management structures to
create interlocking teams of line managers at all levels. These
teams work by taking quick action to remove barriers and
impediments to productivity and quality improvement.

On January 27, 1988, DoD held its Fifth Annual Productivity

Excellence Award Ceremony, honoring 51 men and women whose
combined efforts resulted in total first-year savings of nearly
$335 million. To date, 774 individuals have been recognized for
their contributions to productivity improvements, resulting in
savings exceeding $1 billion.

We give our managers the tools and techniques to make

improvements. We use the Efficiency Review process, which
identifies essential work functions and uses them to determine
efficient staffing requirements. Over 92 efficiency reviews were
completed in FY 1987! with a reduction of 1,419 personnel spaces
and savings of $84 m11lion.

We are continuing our Productivity Enhancing Capital Invest-

ment (PECI) program to improve the efficiency of operations
through the use of modern technology. Investments planned for
FY 1989 of $234 million are expected to return approximately $15
for each $1 invested.

145
 To increase quality and groductivity further! we use a "total
quality management approach. Our approach comb1nes work force
motivation, achieved through such techniques as quality circles
and participatory management, with statistical process control,
which ident1fies and removes errors from the process in lieu of
relying on final quality inspections. It works. For example,
application of total quality management at one Naval Air Rework
Activity reduced rework time by 400 hours per aircraft. We also
support positive incentives for our work force. Gain sharing
systems within DoD are returning dollar rewards to employees who
exceed preestablished efficiency and quality goals. For instance,
the Defense Logistics Agency generated savings of $659,000 as a
result of employees exceeding established performance standards by
18 percent. Half of these savings were returned to our employees.

4. Reorganization and Acquisition Improvement

Acts of 1986

While we are pursuing management improvements throughout DoD,

the Congress has passed legislation to enhance this process. Two
recent pieces of legislation that we are actively implementin~ are
the Goldwater-Nichols DoD Reorganization and the DoD Acquisit10n
Improvement Acts of 1986.

We have moved aggressively to ensure effective implementation

of the DoD Reorganization Act, and are proceeding at an encour-
aging pace. Thus far, we have vested management responsibility
for the Joint Staff in the Chairman of the Joint Chiefs of Staff
and designated him as the principal military advisor to the
President, Secretary of Defense, and the National Security
Council. He is also charged with providing the Secretary of
Defense advice on the extent to wh1ch the Service and agency
program budget submissions conform to our warfighting priorities.
Furthermore, we created the position of a Vice Chairman, Joint
Chiefs of Staff, and strengthened the command authority of the
commanders of the unified and specified commands. We have also
established systems that will be used to evaluate the preparedness
of the unified and specified commands and the combat support
age~cies to carry out their as~ign~d ~i~sions,.i~cluding partici-
pat10n by combat support agenc1es 1n J01nt tra1n1ng exerC1ses.

In addition, major military department functions, including

acquisition, audit, comptroller, information management, inspector
~eneral, legislative affairs, and public affairs have been consol-
1dated under the Service Secretaries. We have also completed
major management studies of the Office of the Secretary of

146
 To increase quality and groductivity further, we use a "total
quality management approach. Our approach comblnes work force
motivation, achieved through such techniques as quality circles
and participatory management, with statistical process control,
which identifies and removes errors from the process in lieu of
relying on final quality inspections. It works. For example,
application of total quality management at one Naval Air Rework
Activity reduced rework time by 400 hours per aircraft. We also
support positive incentives for our work force. Gain sharing
systems within DoD are returning dollar rewards to employees who
exceed preestablished efficiency and quality goals. For instance,
the Defense Logistics Agency generated savings of $659,000 as a
result of employees exceeding established performance standards by
18 percent. Half of these savings were returned to our employees.

4. Reorganization and Acquisition Improvement

Acts of 1986

While we are pursuing management improvements throughout DoD,

the Congress has passed legislation to enhance this process. Two
recent pieces of legislation that we are actively implementin~ are
the Goldwater-Nichols DoD Reorganization and the DoD Acquisition
Improvement Acts of 1986.

We have moved aggressively to ensure effective implementation

of the DoD Reorganization Act, and are proceeding at an encour-
aging pace. Thus far, we have vested management responsibility
for the Joint Staff in the Chairman of the Joint Chiefs of Staff
and designated him as the principal military advisor to the
President, Secretary of Defense, and the National Security
Council. He is also charged with providing the Secretary of
Defense advice on the extent to WhiCh the Service and agency
program budget submissions conform to our warfighting priorities.
Furthermore, we created the position of a Vice Chairman, Joint
Chiefs of Staff, and strengthened the command authority of the
commanders of the unified and specified commands. We have also
established systems that will be used to evaluate the preparedness
of the unified and specified commands and the combat support
agencies to carry out their assigned missions, including partici-
pation by combat support agencies in joint training exerCises.

In addition, major military department functions, including

acquisition, audit, comptroller, information management, inspector
~eneral, legislative affairs, and public affairs have been consol-
ldated under the Service Secretaries. We have also completed
major management studies of the Office of the Secretary of

146
controls and strengthen life cycle management by ADP program
managers.

g. Productivity

We are firmly committed to improving DoD productivity. Our

Productivity Improvement Plan for FY 1989 has been expanded to
include over 437,000 military and civilian personnel managing DoD
functions and programs valued at approximately $46 billion. By
1992, we will further expand our productivity program to include
approximately one million DoD personnel, with the objective of
improving their productivity by an average of 3 percent each year.
We are also enhancing productivity measurement by establishing
unit cost measures for functions 1dentified for 1mprovement under
the President's productivity initiative. To support these plans,
we have an aggressive productivity improvement process that seeks
to raise awareness, recognize successes, and develop and refine
the tools that support increased defense productivity.

The efforts of our DoD Task Force on Productivity in the

Support Operations, which was established in 1986, have paid off.
The FY 1989 Productivity Improvement Plan incorporates many of the
Task Force initiatives. One of these, the Productivity and
Quality Team (P&Q) concept, uses existing management structures to
create interlocking teams of line managers at all levels. These
teams work by taking quick action to remove barriers and
impediments to productivity and quality improvement.

On January 27, 1988, DoD held its Fifth Annual Productivity

Excellence Award Ceremony, honoring 51 men and women whose
combined efforts resulted in total first-year savings of nearly
$335 million. To date, 774 individuals have been recognized for
their contributions to productivity improvements, resulting in
savings exceeding $1 billion.

We give our managers the tools and techniques to make

improvements. We use the Efficiency Review process, which
identifies essential work functions and uses them to determine
efficient staffing requirements. Over 92 efficiency reviews were
completed in FY 1987! with a reduction of 1,419 personnel spaces
and savings of $84 m1llion.

We are continuing our Productivity Enhancing Capital Invest-

ment (PECI) program to improve the efficiency of operations
through the use of modern technology. Investments planned for
FY 1989 of $234 million are expected to return approximately $15
for each $1 invested.

145
Defense% Defense Agencies, and DoD Field Activities, and are
evaluating their recommendations for implementation.

Similarly, despite the complexity of the changes involved in

the Defense Acquisition Act, significant strides have been made.
We have issued policies and procedures that provide for a single,
uniform Defense Acquisition System under the oversight of the
USD(A), and streamlined the DoD aC9uisition structure by estab-
lishing Service Acquisition Executives to administer the acqui-
sition programs of the Military Departments. We are also requir-
ing DoD Components to enhance long-range planning, identify trade-
offs between cost and performance, use prototyping for critical
components, and maximize the use of "off-the-shelf" products.
These changes in the defense acquisition system build on, and
complement, improvements that have been made over the past seven
years.

5. Conclusion

Management improvement in the Department of Defense is a

continuing effort that requires constant attention and resource
support. We have set priorities and vigorously pursued management
improvement objectives throughout DoD, and our successes in spare
parts reform, financial management, and productivity enhancement
have been highlighted in this chapter. We are also continuing to
implement programs such as A-76. The A-76 program stimulates
competition between in-house work forces and private sector firms,
to ensure the most efficient and economical supply of support
services. Throu~h this program and others, I am personally com-
mitted to improving DoD management, and ensuring that we preserve
the common defense in the most efficient manner possible.

147
Total Force categories and some of the issues involved 1n manag1ng
them.

a. The Volunteer Concept versus Conscription

Over the last 14 years, we have successfully manned our forces

with volunteers. Despite this success, there remain those who
contend that some form of conscripted national service is necessary.
The evidence, however, shows that a return to the draft would
increase the cost of an equally effective force by as much as $2.5
billion each year. Furthermore, while changing demographics and a
growing economy make recruiting more difficult, demographic trends
are not so unfavorable that the Services will be unable to attract
men and women in the numbers and quality required. Although the size
of our youth population reached its peak in 1979, that was the last
year the SerV1ces failed to achieve their accession goals, and they
have met their goals with higher quality personnel each year since
1981. To continue this success, however, the Congress and the
Department of Defense must provide adequate compensation for our
people.

b. Active Component Military Manpower

The Total Force's Active Component serves in the United States

and around the globe, and is capable of responding on short notice to
defend U.S. interests.

(1) Active Component End Strength

We had requested in our FY 1988/89 budget submission end-

strengths of 2,172,000 for FY 1988 and 2,184,000 for FY 1989.
Although the Congress approved an end-strength of 2,172,000 for FY
1988, our active component end-strength will be 2,138,000 -- a 1.6
percent reduction from approved levels.

(2) Manpower Requirements

Our goal is to use the least costly form of manpower consistent

with our security requirements. Accordingly, we size our active
forces to man that part of our force structure necessary for rapid
response to an array of potential contingencies.

150
 (a) Officer Requirements

The Fiscal Year 1987 National Defense Authorization Act mandated

officer reductions of 1 percent in FY 1987, 2 percent in FY 1988, and
3 percent in FY 1989 from those levels assigned as of September 30,
1986. The FY 1988 Defense Authorization Act rephased the remaining 5
percent officer reductions to 1 percent in FY 1988, 2 percent in FY
1989, and 2 percent in FY 1990, providing we certify that a 2 percent
reduction in FY 1988 would cause severe officer management problems,
and submit DOPMA relief legislation which would allow us to shape
the officer force more prudently. Both of those requirements were
complied with. Furthermore, we provided a report to the Congress on
February 1, 1988, which explained that the FY 1988 officer reduction
of 1 percent was apportioned to the Services based on the Officer
Requirements Report submitted last spring.

By the end of FY 1988, the department will have actually reduced

officer strength by 2.8 percent, since the FY 1987 Defense
Authorization Act eliminated planned growth previously approved by
the Congress for FY 1987 and FY 1988. The department appreciates the
deferral of 1 percent of the original 1988 cut and the opportunity to
study the subject more fully. In a re~ort planned for submission in
March 1988, the officer growth issue w111 be explained in sufficient
detail to convince the Con~ress of the necessity to repeal the
remaining 4 percent reduct10n.

(b) General and Flag Officer Requirements

A comprehensive legislative proposal establishing a new framework

for manag1ng general and flag officers was submitted to the last
three Congresses, but has not been enacted. Recognizing the
Congress's continuing concern with substantiating our requirements
for general and fla~ officers, we have commissioned an outside
com~any with extens1ve experience in senior level job measurement to
val1date all DoD general and flag officer requirements. The study
will also provide a uniform methodology and framework for the
Services to validate future requirements.

(c) Manpower, Personnel, Training, and Safety

Just as weapon systems designs are subjected to rigorous life

cycle analyses, requ1rements for manpower resources must also be
examined early enough in the acquisition cycle to ensure that
proposed man-machine systems are structured in the most cost-
effective manner possible. We are strengthening our ability to
assess the total manpower, personnel, training% and safety (HPTS)
implications of future weapons systems and equ1pment. Military,

151
scores. A high school diploma has been shown to be the best single
indicator of the probabil1ty of an individual completing their .
initial enlistment, while enlistment test scores predict success 1n
training and job performance.

FY 1987 was an outstanding year for recru1t1ng. All Services met

or exceeded their enlistment objectives. Table II.C.1 shows quality
results for 1987, as well as enlisted accessions for FY 1987 and the
planned recruiting levels through FY 1989.

With a strong economy and a shrinking youth pool available for

military service, the Services are facing signif1cantly more
difficult recruiting market conditions. With the Congress's
continued support, however, we are confident that we can continue
meeting our m1litary manpower needs with quality volunteers.

(3) Personnel Management

(a) Enlisted

Two important indicators of our enlisted force's status are rate

of retention, and average number of years a military member has
served. Both of these measures are at satisfactory levels. Between
FY 1980 and FY 1988 the retention rate has increased from 80.7 to
84.2 percent, and the average number of years of service has risen
from 5.55 to 6.25 years over the same period. The principal reason
for the increase in retention rates and average years of service has
been restoration of basic military compensation to competitive
levels. The two incentives most responsible for attracting and
retaining high-quality technicians for critical shortage skills are
the enlistment and selective reenlistment bonus programs.

To continue meeting military manpower requirements on a voluntary

basis, we must offer competitive compensation! adequate family
support, reasonable living and working condit1ons, and assistance
programs for post-secondary education.

(b) Officers

While officer retention is generally stable, retention problems

remain in two specific officer communit1es: nuclear trained naval
officers and aV1ators. Although there still exists a shortfall of
nuclear trained naval officers, we project the current mid-grade
shortage of 22 percent to be reduced to approximately 12 percent by

153
the end of FY 1992 due to the enhanced Nuclear Officer Incentive Pay
authorized by the Congress in 1986.

The shortage of aviators has become significant. The demand for

pilots in commercial aviation is projected at 4,000 to 7,000 annually
well into the next decade. Thus, we anticipate this shortage will
continue for the Navy and include the Air Force by the end of FY
1989. High eilot losses and persistent shortages in certain aviation
communities Jeopardize combat readiness. To remain competitive and
retain these critically needed officers, the existing monetary
incentives (Aviation Career Incentive Pay (ACIP), and Aviation
Officer Continuation Par (AOCP», along with other quality-of-life
initiatives, must be maintained. We are currently studying other
measures that may be useful in solving this problem.

As noted earlier, officer reductions beyond the initial increment

taken in accordance with the FY 1987 National Defense Authorization
Act will reduce combat capability. In particular, a 2 percent
reduction in FY 1988 would have caused severe personnel management
problems. Therefore, we have exercised the authority granted in the
FY 1988 and FY 1989 DoD Authorization Act to take a 1 percent
reduction in FY 1988. If the officer reductions are not modified or
repealed, the proposed modifications to existing statutes recently
sent to the Congress will be required to alleviate personnel
management problems. In ~eneral, these problems result from DOPHA,
which constrains our ability to discharge or retire involuntarily
significant numbers of officers in other than the most junior grades.
Furthermore, the inability to plan or control careers due to
arbitrary cut-backs is being perceived as a breach of faith by the
officer corps, which may lead to further problems with retention in
critical skill categories.

(cJ Implementation of Joint Officer Personnel Policy

The Goldwater-Nichols Department of Defense Reorganization Act of

1986 contained the most extensive legislation concerning joint
officer personnel management in history, and poses the most complex
implementation requirements since the Defense Officer Personnel
Mana~ement Act of 1980. During the past year! we have made
significant progress in implementing the prOVisions of Title IV
(Joint Officer Personnel Policy) of the Act.

We have devoted considerable effort to identifying policies and

procedures necessary to effect the provisions of the Act. Pending
publication of formal directives, policy memoranda have been issued
concerning the following areas of joint officer personnel management:
assignments; promotion objectives and procedural issues; education
and training; nomination and selection for the joint specialty;
designation of critical occupational specialties; and career

154
monitoring considerations. A list of 8,452 joint duty assi~nments
has been published, including 1,000 critical joint duty ass1gnments
to be filled by officers who have been awarded the joint specialty.
A Senior Military Schools Review Board composed of retired general
and flag officers conducted a comprehensive review of professional
military education programs. The Board's recommendations were
provided to the Cha1rman of the Joint Chiefs of Staff, and
appropriate changes are already being implemented. In addition, we
have developed the design concept for a joint duty assignment
management 1nformation system to assist 1n managing the joint duty
assignment list and implementing the extensive career oversight and
reporting requirements entailed in the Act.

For us to implement the provisions of Title IV without

compromising readiness and officer career development, we submitted
in April 1987 a legislative initiative package that proposed
modifications to tour len~th requirements, joint specialist
desi~nation rules, promot10n monitoring requirements, and other
spec1fic problem areas. Although some of our recommended changes
were approved in the FY 1988 National Defense Authorization Act,
others were not included in the final legislative package. These
chan~es are needed to reconcile the Act's intent w1th other
cons1derations -- such as overseas tour constraints -~ which 1mpose
competing requirements upon our personnel management system.

The Act also requires us to report to the Congress, for each

fiscal fear, certain statistical measures and personnel actions
accompl1shed in the area of joint officer management. In certain
categories, we have only lim1ted data to report for FY 1987 because
of the requirement to define joint officer management policies prior
to initiating action on indiv1dual officers. For example, very few
officers had been designated as joint specialists by the end of FY
1987 because of the need to develop rules and procedures for their
recommendation and selection, as well as applicable waiver processes.
For the same reason, we have no FY 1987 statistics to report
concerning assignment of officers subsequent to selection for the
joint specialty.

Other statistics that we can provide for FY 1987 reflect, of

necessity, transitional data that are not necessarily representative
of joint officer management programs in the steadf state. The vast
majority of the officers currentlf assigned to j01nt duties were
selected for these assignments pr10r to the DoD Reorganization Act's
passage on October 1, 1986. The Act's provisions have already had a
significant effect on the way we select and assi~n officers to joint
duty positions, and we expect that the character1stics of officers
selected subsequent to the enactment may differ from those who were
selected prior to the date.

155
 (d) Equal Opportunity in the Military

Since the end of FY 1980, the total number of military women has
increased by over 28 percent, to more than 49,500. The number of
women officers alone has increased by more than 10,600, or by 49
percent. Today more than 220,000 officer and enlisted women comprise
over 10 percent of the active force. These numbers are expected to
continue growing as more and more women recognize the career
opportunities that are available to them in the military service.

Military service continues to attract representative numbers of

minorities. The minoritf officer corps is of special si$nificance.
Since FY 1980, the minor1ty commissioned officer populat10n has grown
by close to 10,000, or by 43 percent. Today's minority commissioned
officer force totals over 32,000, representing 11.2 percent of the
active officer end-strength. Minority representation extends to all
officer grades.

(4) Military Training

The state of training of military personnel and operational crews

and units, as well as the force read1ness derived from this training,
has improved substantially during the 1980s. This improvement is
based on three factors. First, high recruit quality, better
retention of experienced personnel, and greater personnel stability
within units have raised the quality and residual value of training.
Second, new, technologically advanced training facilities have made
time spent in training more effective. Finally, operating tempo
(OPTEMPO) -- flying hours, steaming days, ground vehicle mileage --
has been adequate to carry out essential training. To realize the
potential combat capability of our forces, the Congress must
continue to provide the OPTEMPO funding required for effective
training.

(5) Quality-of-Life, Families, and Support

Quality-of-life programs are our hi~hest priority because they

support the 2.1 mill10n active-duty mil1tary members and their
fam11ies. We are working constantly to create an improved
environment that supports the mobile military life style. Some key
quality-of-life programs are: family housing; housing allowances;
housing for unaccompanied service members; medical and dental
support; child care; dependent education; family member employment;
fam1ly support centers; commissaries; and morale, welfare, and
recreation activities. Funding for these programs has increased 31

157
percent since 1981 in constant dollars, exceeding increases in DoD's
total budget by 20 percent.

Another quality-of-life related area that received much attention

last year is the Morale, Welfare, and Recreation (HWR) program, which
underwent a complete policy reassessment. Our report to the Congress
on the issue recommended a restructuring of HWR program categories;
adjustments to appropriated fund support of revenue-generating
activities, and the program in general; and a cap on future
appropriated fund support for operational expenses. Given our
reforms in HWR management, it is essential that the Congress continue
to fund these pro$rams, which improve morale, retention, and combat
readiness at required levels.

While pro~ress has been made, the capacity problem in child care
services remains. Concerted facility planning to meet growing
requirements is on-going in each Military Department as we struggle
to meet the expanding child care needs of th1s decade and the next.
To address this problem the Military Departments are expanding the
scope of services, including home day care and in-home enterprise
programs to lessen the pressure on center-based programs and to
expand the child care service options available to members with
differing needs.

(6) Military Compensation

Fair and competitive levels of military compensation are

essential to our ability to fill the military ranks with skilled,
dedicated, and productive people. We must pay military members wages
commensurate with what they can earn in the c1vilian sector, or we
will not be able to recruit or retain them. This lesson was learned
in the late 1970s, when substantial improvements in military
compensation were necessary to restore the quality of military
recruits and halt an exodus of experienced military members.

Despite the currently favorable recruiting and retention

climates, we are concerned about recent scaling back of military pay
raises and other benefit programs such as appropriated fund support
of morale l welfare, and recreation facilities and retirement system
modifications. We must take appropriate action to prevent a further
erosion of pay and benefits.

Military pay raises have been capped below average private sector
wage increases as measured by the Employment Cost Index (ECI) each
year since FY 1982. Including a pay ra1se of 2 percent in FY 1988,
as compared to private sector wage growth of 3.5 percent l the
cumulative gap between military and private sector wage Increases now

158
requested a VHA increase of 3.4 percent in FY 1989 to match housing
cost growth between October 1986 and October 1987.

Military members stationed overseas are provided housin~ and

cost-of-liv1ng allowances that are adjusted for both price 1ncreases
and currency fluctuations. Nevertheless, out of concern that members
were being adversely affected by the rapid decline in the value of
the dollar against foreign currencies, we approved in February 1987
an average 15 percent increase in cost-of-11ving allowances. This
increase has helped military members and their families achieve an
adequate standard of living in other countries. In addition, we seek
whenever possible to increase employment opportunities in those areas
for dependents of DoD personnel.

Achieving our national security objectives requires that military

personnel and their families relocate periodically from one permanent
duty station to another. These assignment transfers are called
permanent-change-of-station (PCS) moves. In response to concerns
about PCS costs, we have implemented a number of policy changes to
increase average time on station and reduce assignment turbulence.
We estimated that these policy changes, as outlined in our 1986
Report to the Congress on the PCS program, are saving approximately
$280 million annually.

In addition to cost-effective management, the department has

responsibility for ensuring that PCS entitlements are sufficient to
cover the cost of the moves. One of the entitlements that is
currently deficient is household goods (HHG) shipment weight
allowances. The 1987 DoD Report to the Congress on HHG Weight
Allowances showed that many military members paid HHG overweight
charges in FY 1985 and 1986, reflecting the fact that these
allowances have not been altered significantly in over twenty years,
and ceilings have not kept pace with changes in American life styles.
We recommended to the Congress a HHG entitlement schedule based on
grade and dependency status, with shipment weight ceilings that meet
95 percent of the shipment weight needs of Service members.

c. Reserve Military Manpower

The Reserve Component's primary purpose is to provide for rapid

expansion of our military forces in time of national emergency.
Since FY 1980, the National Guard and Reserve have grown by more than
282,000 men and women, an increase of 32 percent. Today, unlike in
1980, our National Guard and Reserve forces are full-fledged partners
in assuring a credible and affordable defense. In recent years,
naval reservists augmented the crew of the USS New Jersey off the
coast of Lebanon. In Grenada, Army reservists provided all of our
civil affairs mission, and an Air Force reserve crew flew the first
group of students to safety. In the retaliatory operation against

160
Libya, Air Force reservists and Air Guardsman provided mid-air
refueling for our fighter-bombers.

Each member of the National Guard or the reserves is assigned to

one of three reserve component manpower categories: the Ready
Reserve, the Standby Reserve, or the Retired Reserve. The Ready
Reserve includes:

• The Selected Reserve -- units and individuals with the

highest reserve priority requirement for personnel,
training, and equipment;

• The Individual Ready Reserve -- a pool of trained manpower

to serve as augmentees and replacements for active and
reserve units; and

• The Inactive National Guard -- individuals who do not

participate in training, but are attached to a specific
National Guard unit for mobilization.

The Standby Reserve is a pool of trained individuals who maintain

their affiliation with the reserves, but are not reguired to
participate in training or serve in units. The Retired Reserve
contains reservists who were transferred to a retired status in
accordance with law or directive and who may be ordered to active
duty in time of emergency.

(1) Selected Reserve Manpower Strength

The Selected Reserve continues to increase in stren~th. Its FY

1987 end-strength of 1,150,855 represents another all-time high and
an increase of 20,755 over FY 1986. This strength level meets the
challenge set by the President's Military Manpower Task Force in 1982
to raise Selected Reserve strength by 13 percent, with most of the
increase coming in the two Army components! by the end of 1987. For
the first time since World War II, the citizen-soldiers of the Army
Selected Reserve (which includes the National Guard), will exceed the
strength of the Active Army. The projected FY 1989 end-strength
reflects a growth of 304,000 members since 1980. Complete reserve
end-strength data appears in Appendix B, Table 2.

(2) Selected Reserve Personnel

In FY 1987 1 45 percent of enlisted accessions into the Selected

Reserve were without prior military service. These new recruits are

161
 d. Civilian Manpower

(1) The Contribution to the Total Force

Our policy is to employ civilian employees and contractors

wherever poss1ble to free our military forces to perform military
functions. This policy minimizes the required number of active duty
personnel and enables civilians to provide stability and continuity
to offices and or$anizations when uniformed personnel are rotated. A
total of 19,500 m1litary spaces have been converted to civilian
positions between FY 1983 and FY 1988, helping us meet our Total
Force manpower needs.

Civilians constitute approximately one-third of our active

manpower. They participate in all defense activities not potentially
involving combat. In addition to their traditional support roles, in
recent years civilians have also increased their involvement in the
maintenance, repair, programming, and in some instances, the
operation of offens1ve, defensive, and strategic control and
surveillance forces.

(2) Size of the Civilian Work Force

(a) Requirements

Our employment figures are drawn ~rom the manpower requirements

determinat10n process. This process 1S designed to meet our needs at
the lowest cost while maintaining the highest level of efficiency.
In FY 1989, we plan to employ about 1,102,343 civilians. Of this
number, 1,016,020 are direct hires and 86,323 are indirect hires.
Direct hires are u.s. citizens and forei$n nationals who are employed
directly by the Defense Department. Ind1rect hires are foreign
nationals paid by their own government in accordance with status of
forces agreements for working at U.S. bases. Under contractual
arrangements with the host government, we reimburse the host country
for the cost of indirect hire personnel.

Civilian employment will decrease from the FY 1988 level by n1ne-

tenths of 1 percent. In FY 1989, as in FY 1980, civilians will
comprise approximately 25 percent of total defense manpower. Our
successful efforts to increase civilian productivity and the
resulting increases in efficiency will continue helping us reduce
maintenance backlogs and better manage spare parts, thereby allowing
the military to return to military positions and increasing
readiness.

166
 (b) Management Issues

Over the years, the Congress has exercised oversight of civilian

manpower in terms of end-strength ceilings. Recently, however, the
Congress has pursued a more enlightened approach. The FY 1986 and FY
1987 Appropriations Acts directed us to manage the authorized defense
program with no civilian end-strength ceilings. This positive
1nitiative enables us to employ civilians based on mission
reguirements and funded workload. We are opposed to any alternative
ce1ling on civilian manpower that does not employ this management
method, and look for congressional assistance in eliminating OCONUS
work-rear ceilings. Statutory ceilings and arbitrary reductions are
both 1nefficient and counterproductive.

In recent years, the Con~ress has expressed interest in increased

reporting requ1rements for c1vilian manpower. We believe in fully
informing the Congress on the positive story we have to tell about
our civilian manpower mana$ement initiatives. The volume of
congressional reports requ1red, however, consumes excessive
preparation time, and exceeds the amount of information necessary for
prudent management oversight. We are ready to work with the Con$ress
to find some method to consolidate, reduce, and streamline civil1an
manpower reporting requirements.

We also face special work force reduction challenges from the

Goldwater-Nichols DoD Reorganization Act of 1986. The Act requires
non-programmatic Defense Agency manpower reductions of 5 percent in
FY 1988 and an additional 5 percent in FY 1989. Defense Agency
Management Headguarters must also reduce manpower by 5 percent in FY
1988 and an add1tional 10 percent in FY 1989, with no corresponding
reduction in workload. We have therefore been directed to reduce our
Defense Agency work force by over 10,000 spaces with no corresponding
reduction in workload or mission requirements.

The Defense Agencies are essential to this department's efficient

and economical operation. An alternative to the mandatory work force
reductions would be to allow funded workloads and mission
requirements to determine the size of the Defense Agency work force.
Defense Agency manpower reductions will force us to make painful
choices, all likely to diminish combat support capabilities.

(3) Characteristics of the Civilian Work Force

Increasingly complex support functions throughout the department

drive our continuing demand for highly skilled technical,
administrative, and professional employees. Consequently, our
recruitment efforts focus on individuals with college degrees, and

167
our sustainment programs are driven by the need to retain the most
highly skilled and capable performers.

Changes in the composition of our work force, however, continue

to concern us. A decline in our more senior, experienced employees
is continuing, and we as yet have no corresponding increase among
those who are under age 31. These dynamic changes in the civilian
work force composition, both in terms of special skills and
experience, indicate problems which, if left unattended, will result
in future recruitment and retention difficulties.

In our efforts to address these concerns, we have made known our

strong support for the legislation to authorize alternative personnel
mana$ement systems under Title V of the u.s. Code as a means to
attain systemic improvements and enhance the quality of the work
force. As a minimum, such legislation should include a simplified
position classification and a more flexible compensation system.

(4) Civilian Personnel Management Initiatives

(a) Army Programs

The Army is placing increased emphasis on the role and use of

civilians. In April 1986, an Army Inspector General special
inspection of Army civilian personnel mana$ement found significant
problems in the current system. A joint civil-military project was
established to modernize and improve the system. Consequently, the
Army Civilian Personnel Regulations have been reduced by over one
half. The Army project's report proposes numerous other policy and
program changes that are being pursued.

(b) Navy and Marine Corps Programs

The Navy recognizes that an efficient and responsive civilian

personnel management program is vital to a productive shore
establishment. All Civilian personnel regulations and policies
(Federal, Defense, and Navr) have been reviewed and, as a result, the
Navy has streamlined and Simplified dozens of its own policies and
procedures.

One major change the Navy has effected is "Managing to Payroll."

This change allows line mana$ers greater control over the size and
grade structure of their ciVilian work force by giving them the
authority to establish and classify positions within assigned payroll
amounts, and in accordance with published classification standards.
Payroll amounts are derived from congressionally approved

168
compensation levels for authorized programs. Managing to Payroll is
consistent with the congressional waiver of civilian end-strength
ceilings, and is responsive to congressional criticism regarding past
DoD performance under the statutory ceiling waiver. In summary, the
Navy has found that Managing to Payroll encoura~es efficient use of
our civilian work force by ensuring employment is considered as a
cost linked to congressionally approved program levels.

(c) Air Force Programs

As a part of its overall Civilian Strategic Plan, AGENDA 87, the

Air Force has also developed an alternative system for managing
civilian employment. Realizing the potential for achieving greater
productivity at the work site by linking budget authority to
personnel decisions, the Air Force developed a "user friendly"
budget/personnel tool, under the project title CIVCOST, that enables
managers to make fiscally sound personnel decisions. The Air Force
began limited testing of CIVCOST in FY 1988 with expanded testing
planned in FY 1989. CIVCOST consists of a computer program that
allows a manager to "price-out" various emplorment options, in effect
letting the manager make more intelligent decisions about the size
and composition of his or her staff. The Air Force approach holds
great promise as a method of enhancing productivity and increasing
readiness.

Furthermore, during the last few years the Air Force has been
working diligently toward implementing a comprehensive gainsharing
program at McClellan Air Force Base, California. Gainsharing is a
method of improving work force productivity by allowing employees and
the employin~ activity to share in a portion of the savings when an
organization s productivity exceeds a pre-established rate. It has
been demonstrated successfully in the private sector and has
tremendous potential for increasin~ Air Force productivity,
particularly in an industrial setting.

As with the other Services, the Air Force is reviewing all of its
civilian personnel regulations to tailor and streamline them to the
needs of their managers and supervisors.

(d) Defense Mapping Agency Programs

A m?dernization of the entire Defense Mapping Agency (DMA)

production system from source assessment to the distribution of
earth information in digital format to the combat forces -- is under
way. An integral facet of the developing state-of-the-art system is
a t!aining program t? ~each th~ skills needed to operate our new
equipment, and to utilize leadln~-ed~e technology in producing
accurate and up-to-date information in a timely fashion. The DMA

169
developed a comprehensive training program for the entire profes-
sional and technical work force, whIch comprises approximately 60
percent of DMA's 8,500 civilian employees.

To date, 1,500 employees have been trained in the basic features

of the new production systems. Current plans call for an accelerated
training inItiative as the new eguipment is developed and fielded.
This program is vital to the delIvery of timely, accurate, and
credible mapping data to the combat forces.

(e) Project EXPO

Project EXPO is a research project that we have undertaken, with

the concurrence and assistance of the Office of Personnel Management,
to identify and evaluate methods for increasing personnel office
productivity and improving the delivery of personnel services to
management and employees. This project allows nine DoD civilian
personnel offices to try new approaches and to compare results with
traditional operations. Innovations in organizing, staffing and
automating personnel office functions are among the highest
priorities In our continuing efforts to find ways to make personnel
systems work in a more timely and responsive fashion. Our efforts to
improve civilian personnel efficiency are continuing. As the gains
in increased productivity accumulate, the savings to the taxpayer
will grow while we enhance mission effectiveness.

2. Conclusion
During the last seven years, the Total Force has come into its
own as an integrated team of unIformed and civilian personnel
designed to improve deterrence and combat capabilities. The Total
Force is an element of our defense posture designed to evolve with
the growing threat and changing manpower requirements. It provides a
dynamic manpower force that gives the U.S. armed forces the
flexibility to meet their worldwide commitments.

170
D. THE DEFENSE INDUSTRIAL BASE AND

DEFENSE INSTALLATIONS
1. Introduction

The defense industrial base plays a major role in preserving

the common defense. In times of conflict, we must ensure that our
industrial base can provide qualitatively superior defense
materiel in quantities sufficient to meet our national security
needs. In the last decade, however, we have witnessed a slow
mi~ration of manufacturing capabilities away from our shores.
Th1s migration concerns us, and we are taking steps to determine
its causes and find ways to reverse it.

Specifically, we are developing a strategy to bolster the

competitiveness of our defense 1ndustries. We are consulting with
outstandin~ leaders from business and industry, trade and profes-
sional soc1eties, and academia, as we formulate an overall manu-
facturing and industrial base strategy. We are confident that our
process will identify potential policy changes to strengthen our
1ndustrial competitiveness. We are aware that serious problems
already exist, and are taking corrective action.

Through a wide variety of means, including working with other

governmental a~encies, we are continuously assessing our vulnera-
bility to fore1gn dependency for critical items. Through these
efforts, we have identified problems in the machine tool and
electronic areas, and are highly concerned with the situations
developing in the precision optics and bearings industries. When
we have perceived that our national defense is at risk due to a
critical defense industrial sector's dependency on foreign
sources, we have taken corrective measures. Examples include the
President's Machine Tool Action Plan -- discussed later -- and our
involvement in the Semiconductor Manufacturing Technology
Institute, or SEMATECH.

Although the exact nature of the DoD's involvement in SEMATECH

has yet to be determined, the concept involves a consortium of
electronics component manufacturers joining to develop basic
manufacturing technology concepts that can be taken back to their
parent companies for use. Through this pooling of intellectual
and financ1al resources, technological progress can be realized
more quickly than if each company tries to work independently.

171
 Another area of concern is the condition of our defense
installations. It is imperative that our defense physical plant
capital investment of over $450 billion be sustained at rates
necessary to provide adequate living and working conditions for
DoD personnel. In the following pages, we will discuss further
our efforts in the defense installations and industrial base
areas, and note related efforts to improve system's quality and
manufacturing productivity.

2. Industrial Capabilities Assessment Systems

a. Industrial Mobilization Responsiveness

To ensure that our industrial base can respond to potential

emergencies, we are testing a concept that provides industrial
mobilization responses to warning indicators. These responses
comprise a multitude of ready action packages -- options -- that
can be selected for different contingencies to ensure that our
defense industrial base can respond to a broad spectrum of poten-
tial emergencies. Our options would range from maintenance of
industrial base status quo in peacetime to total industrial
mobilization in a national emergency. In developing the indus-
trial response concept, we are examining these broad categories
for manag1ng industr1al resources: government planning and
management activities; economic policy; trade policy; production
capacity; labor force; materials and components; and c1vil
activities.

b. Defense Industrial Network

The Defense Industrial Network (DINET) is an automated system

being developed to assist decisionmakers assess industrial respon-
siveness. W1th this system we will have a means for retrieving
and displaying data to allow us to monitor acquisitions, economic
conditions, and foreign investments, and assess the impact on our
industrial base.

c. Production Base Analyses

Production Base Analyses (PBA) are prepared annually by the

Military Departments and the Defense Logistics A~ency (DLA). PBAs
are a collection of industrial surveys and capac1ty studies that
form the basis for preparedness and productiv1ty planning, pro-
gramming, and budgeting. The most recent PBA identified some
potentially serious industrial base constraints that threat~n our
ability to meet our peacetime and emergency needs. We cont1nue to

172
apply our limited resources to correct those industrial base
deficiencies where we can, but are also fostering a partnership
with industry to help solve critical deficiencies.

d. North American Defense Industrial Base Organization

During the past year, the United States and Canada formally
chartered a joint organization, the North American Defense
Industrial Base Organization, to focus on mutual industrial base
needs. The organization's goal is to ensure that both nations'
industrial bases complement one another and are jointly able to
respond to their security requirements. The group's subcommittees
will focus on requirements formulation, data exchange, education
requirements, and mechanisms for enhancing both governments'
interface with private industry. Representatives from both
countries look forward to a long-term cooperative venture between
our two nations.

3. Quality and Productivity Initiatives

a. Quality

A system's quality -- the preC1S10n of its components'

manufacturin~ and assembly, the grade of the raw materials -- has
a major bear1ng on the cost and field performance of defense
systems and equipment; hence, quality has become a high priority
in defense acquisition. Our goal is to improve the aual1ty of new
defense systems. To this end, we are emphasizing a 'Total Manage-
ment Approach" that places emphasis on guality much earlier in
program development and integrates qual1ty into other industrial
base programs.

Under this approach, we are working with the Military

Departments and Defense Agencies to exploit new opportun1ties to
enhance quality, while including them 1n policy and procedure
revisions and updates. The DoD Quality Assurance Policy Council
is ensuring that the actions taken by the Services and Defense
A~encies reflect a coherent approach fostering both the applica-
t10n of sound engineering principles, and the continuous
improvement of manufacturing processes.

b. Industrial Modernization Incentives Program

The Industrial Modernization Incentives Program (IMIP) is a

major DoD initiative to foster long-term defense industrial base
modernization. The program's objective is to increase defense

173
contractors' capital investments to enhance productivity, improve
quality, reduce acquisition costs, and expand the industrial base.

IMIP benefits can be measured in terms of increased flexi-

bility and capacity to respond to defense requirements, as well as
by savings realized throughout the life cycle of the weapon
systems produced in IMIPlModernized facilities. We currently have
over 30 prime contractors and over 45 subcontractors participating
in approximately 85 IMIP modernization programs.

c. Metric Transition

The United States is virtually alone in the world regarding

use of the inch-pound system of weights and measures; most other
nations use the metric system as their national standard. The
Metric Conversion Act of 1975 indicated the metric system was the
preferred standard, to be implemented in a voluntary manner.
Although the inch-pound system still predominates in this country,
more metric products and systems are entering our inventories as
we purchase more items from foreign sources, and as U.S. indus-
tries convert their manufacturing operations.

We have concluded that it is not in DoD's best interest to

continue using a dual-base measurement system. Consequently, we
have strengthened our standards requiring the use of the metric
system. The Army's Multiple-Launch Rocket System and portions of
the Navy's T-45 primary trainer aircraft will use the metric
system. In addition, the Strategic Defense Initiative Office has
announced that the SDI will use the metric system. We believe
these decisions will accelerate the overall defense industry
transition, reduce future support costs, enhance interoperability
with our allies, and simplify cooperative development efforts.

4. Industrial Base Programs and Initiatives

a. Manufacturing

(1) Manufacturing Technology Program

The Manufacturing Technology program is a broad-based,

production-oriented program supporting our Research, Development,
and Acquisition program. The program provides new and innovative
manufacturing technology needed to produce DoD materiel in those
cases where the private sector is unable or unwilling to produce
it in a timely manner. Program investments are necessary to
reduce the technical and financial risk of implementing the

174
program's results in our defense production base. The pro~r~m.ls
often a critical link between research and development actlvltles,
and production.

Manufacturing technology has received increased interest on

many fronts during the past year -- both within and external to
000. The National Research Council in its report, "Toward a New
Era in u.s. Manufacturing, The Need For a Natlonal Vision,"
attributed this increased awareness to the convergence of three
powerful trends:

• The rapid advancement and spread of manufacturing

capabilities worldwide, which has created intense
competition on a global scale;

• The emergence of advanced manufacturing technologies,

which is dramatically changing both the products and
processes of modern manufacturing; and

• Changes in traditional management and labor practices,

organizational structures, and decisionmaking criteria,
which represent new sources of competitiveness and
introduce new strategic opportunitles.

Because many of our high-performance weapon systems require

state-of-the-art technology, these trends are particularly evident
within the industrial base supporting 000. During the past year,
we have focused particularly on developin~ machine tool technology
as called for by President Reagan's "Machlne Tool Domestic Action
Plan."

(2) Machine Tool Domestic Action Plan

In supporting the President's Machine Tool Domestic Action

Plan, we are:

• Bud~eting $5 million to support the private sector

Natlonal Center for Manufacturing SClences (NCMS). The
NCMS, among other things, will foster research projects to
enhance the technology of the machine tool industry;

• Sponsoring a government/industry conference to define

potential machine tool research projects to lmprove
manufacturing technology;

175
 • Designating the machine tool industry as a separate area
of interest under the DoD Manufacturing Technology
program; and

• Providing the industry an II-volume index of machine tool-

related research and development now sponsored by DoD.

(3) Other Manufacturing-Related Technologies

Several other substantial manufacturing-related programs are

evolving that are intended to further the defense industry's
ability to produce critical items cost-effectively. Two recent
examples include the Infrared Focal Plane Array and the Micro-
Electronics Manufacturing Science and Technology programs. Both
programs have far-reaching implications for reducing the cost of
photo sensors and electronic microcircuits.

b. Government-Owned Industrial Property Initiatives

Our government property initiative to bring management

improvements to the acquisition, use, and control of property in
the possession of contractors is showing positive results, even
thou~h it is still in the initial implementation stages. The
Services and Defense Agencies have begun to locate and dispose of
large quantities of excess government property.

We are currently identifying Government-Owned Contractor-

Operated (GOCO) plants that are needed to meet defense require-
ments, but which DoD no longer needs to own. We plan to notify
the General Services Administration of those plants that can be
sold by negotiation, under the "excess to ownership" concept, to
the contractor operating the plant.

c. Defense Production Act -- Title III

Our basic policy is to rely on the private s~ctor, wherever

possible, to produce DoD materiel. In certain Circumstances,
however, private investors are unable or unwilling to provide the
production capacity needed by DoD. In such cases, Title III of
the Defense Production Act provides DoD the option of offerin~
purchase commitment incentives to private companies to establish
the desired production capacity. Recent shortfalls in polysilicon
and traveling wave tube (used in electronic systems) production
capacity required us to exercise this option. During the past

176
year, we established a Title III pro,ram office and awarded
several contracts with purchase comm1tment incentives.

d. Strategic Petroleum Reserve

To ensure our ability to meet energy requirements in the

future, we should continue to build u.s. petroleum stocks toward
the President's goal of a 750 million barrel Strategic Petroleum
Reserve. It is e9ually important to continue working with our
allies and econom1C partners to ensure that they build and
maintain similar strategic oil stocks. Further, federal lands
with significant prospects for strate,ically important new oil
finds should be released for explorat10n and development.

5. Defense Installations

The condition of our defense installations is vital to the

accomplishment of our militarr mission. In FY 1988, we requested
24 percent real growth in mi11tary construction and family housing
appropriations. This increase was required to redress the neglect
of our facilities caused by inadequate funding in the 1970s, and
support facilities for our new weapons systems. Unfortunately,
the FY 1988 appropriation was only 85 percent of our request,
resultin, in an increase in the cost of readiness, and delays in
our 9ual1ty of life improvements. In addition, this inadequate
fund1ng level is placing the revitalization of our existing
physical plant out of reach. We need to reverse this trend now.

The military construction investment program has made steady

gains since 1981, especially in support of major weapons systems,
but much remains to be done. The bulk of our facilities worldwide
were built in the 1940s and 1950s during World War II and the
Korean War. Many of them were intended only for temporary use,
yet ther are still used today. Coupled with the ~roblem of our
facilit1es' age is the fact that the housing requ1rements of our
armed forces are far different now. The demographics have changed
with the advent of the all-volunteer force and require an
increased emphasis on the family. There are also five times as
many women in uniform as there were 15 years ago. Furthermore l
our warfighting equipment has become much more complex, requir1ng
sophisticated support in specialized facilities, and our older
physical plant cannot handle the high technology equipment. All
of these factors place an enormous stress on our installations and
thus mandate greater investment in facilities.

To meet these facility requirements, I intend to establish a

strategy for recovery. It begins with a partnership between the
department, the Congress, and industry to recognize the investment

177
we have made, and to establish a prudent level of investment to
revitalize existin~ plant and eliminate deficits. At the same
time, we must cont1nue to build for future needs, and fund a level
of maintenance and repair to keep improving our facilities'
conditions. The department will do 1ts part by requesting
adequate funding for military construction, and real property
maintenance and repair to support a balanced program that funds
the most urgent projects that:

• Support weapon systems' fielding, sustainability, and

operational readiness;

• Implement approved restationing plans and force structure

changes;

• Revitalize the current plant, improving the efficiency of

current operations by repairing, modernizing, and
replacing existing facil1ties and infrastructure;

• Improve facilities' conditions through repair and

ma1ntenance while maintaining the backlog of essential
maintenance and repair at acceptable levels given overall
resource limitations; and

• Maintain acceptable living and working conditions for our

military forces, their families, and our civilian work
force.

Our strategy will be based on sound economic judgment and

innovation that cuts "red tape." It will ach1eve a balance in
facility investments from all sources. In addition, we will
continue to involve more people through increased private sector
investments, burdensharing, NATO infrastructure investments, and
self-help.

6. Conclusion

u.S. manufacturers face serious challenges. We believe that

the government, especially DoD, can playa role in supporting the
changes necessary on the factory floor, but that the major impetus
must come from the private sector itself.

178
 We will continue working closely with the private sector in
confronting the challenges facing the u.s. industrial base, and
with the Congress in revitalizing our defense installations.

179
A. LAND FORCES

1. Introduction

Modern, robust land forces are key to our ability to execute

the national military strategy. Our land forces program ensures
these forces are capable of playing their role in deterring
aggression, or in defeating an ag~ressor should deterrence fail.
In preparing our program, we cons1der many factors, including our
forward-deployed posture in Europe, Asia, and elsewhere; the ratio
of active to reserve forces; and the rate of development and
fielding of new systems. Another factor influencing our
modernization strategy is the AirLand Battle Doctrine, which holds
that land forces must be able to fi~ht the rear, close, and deep
battles. To do so, our forces requ1re modern equipment and
adequate amounts of training. Fiscal constraints, however, have
forced us to make difficult choices among modernization, force
structure, readiness, and sustainability. We have decided that
the increase in risk to our national security would be greater if
we attempted to maintain a lar~er force structure that compromised
readiness and combat sustainab1lity -- a "hollow" force. We have,
therefore, reduced the size of our land forces to ~reserve our
hard-won improvements in force readiness and susta1nability, and
to maintain the progress of our force modernization.

Our force structure reductions have been carefully focused.

Reductions have not been made in our heavy armored or mechanized
forces, those that would bear the brunt of any conflict with the
Warsaw Pact or a com~arably equipped opponent. We have instead
made reductions in 11ghter infantry formations, and in the unarmed
elements of the Army aviation fleet. Similarly, in allocating
funds for force modernization, we gave highest priority to systems
that would contribute most to our warfighting capabilities against
our best-equipped potential adversaries. For that reason! we have
held MIAI tank and M2/M3 Bradley fightin~ vehicle product10n near
previously planned levels, and will cont1nue producing the AH-64
helicopter. Other systems have been terminated and some
developmental efforts reduced in order to keep higher-priority
srstems funded at efficient levels. The following sections
h1ghlight some of these program changes.

2. Update of Force Structure Composition and

Disposition

Our Army and Marine divisions are derloyed as shown in Chart

II.A.I. The number of Army divisions wi I remain at 28 -- 18

183
planned. One battalion's mission will be assigned to the National
Guard. We will attempt to activate the second battalion in
FY 1990. In addition, Army Reserve Component end-strength in
FY 1989 will not increase by 26,100 soldiers as previously plan-
ned. The Marine Corps' end strength will be reduced by 2,900
active Marines and 900 reserve Marines. The Marine Corps will
address combat unit restructuring over the next two months.

Army aviation force structure reductions will come principally

from light observation and utility helicopter inventories, many of
which date from the Vietnam era. We will eliminate a combination
of 450 OH-58A and UH-l aircraft, along with their flight and
maintenance crews, by September 1988. Another 900 of our older
aircraft and their associated personnel will be phased out over
the next six years. These actions decrease the Army's aviation
fleet from more than 8,250 to less than 7,000 aircraft. Plans are
being made to reduce the Army inventory further still, to a long-
term goal of 6,600 aircraft. The resulting fleet will be smaller
but more affordable, and equipped on average with newer and more
capable aircraft.

3. Defense Program Update

a. Programs

To meet our lower spending targets, we have made changes in a

number of modernization programs. These changes were needed to
sustain high-priority initiatives at efficient rates and to
accelerate Army aviation force modernization. The following
programs were supported in last year's plan, but will be cancelled
or deferred beyond FY 1989 in the revised budget submission: the
Aquila remotely piloted vehicle (RPV); M-198 howitzer; Copper-
head I artillery round; 120mm mortar; Armored Family of Vehicles
(AFV); 8-inch Search and Destroy Armor (SADARH) projectiles; and
EH-60A Quickfix helicopter.

M1 Abrams Tank -- The Army will continue MIAI procurement at a

rate of about 600 tanks a year, thereby achieving multiyear
procurement efficiencies while modernizing its armored forces.
Planned upgrades to the Ml ("Block 11" improvements), however,
will not begin in FY 1989 as previously planned. Almost 60
percent of the Abrams inventory will consist of Ml-series
vehicles, e9uipped with 105mm guns; the newer MIAI with its 120mm
gun, ~ow being introduced into our European-deployed units, will
constitute the balance.

185
and refocused on the reconnaissance mission. Thus, we will be
able to continue procuring the AH-64, the mainstay of our attack-
helicopter fleet.

In addition to the new procurement, the FY 1989 budget

allocates $94.6 million to develop upgrades to the Apache,
including an improved fire-control system; improvements in the
night-vision/target-designation system t integration of Airborne
Adverse Weather Weapons Systems (AAWWS) into the aircraft; and
signature-reduction measures. Four AH-64 battalions have been
fielded to date, including the first European unit at Illesheim,
West Germany. We will continue deploying the AH-64 in FY 1988,
assigning battalions to the 82nd A1rborne Division; the 101st Air
Assault Division; the III Corps at Fort Hood, Texas; the V and VII
Corps in Europe; and the National Guard.

New Light Helicopter (LHX) -- The revised FY 1989 budget supports

the start of the demonstration/validation phase of the LHX s
development program. Our review of this program in early January
1988 led to 1ts major restructuring. Under the revised plan, the
Army will produce the aircraft in two versions -- an armed
reconnaissance model to replace aging OR-58 Scout helicopters, and
a light-attack version to replace the AH-l. The LHX will be
smaller than previously planned, and its fieldin$ will be delayed
beyond FY 1995. Significant funding reductions 1n the LHX program
will allow us to sustain AH-64 and UH-60 production, as well as
make needed improvements in these systems. The Army's utility
helicopter requirements for the foreseeable future will continue
to be met by a combination of UH-60 and older UH-l and OR-58
aircraft. The FY 1989 LHX program will focus on developing
mission avionics, advanced flight controls, survivability
features, and reducing technological risks. We foresee a future
production requirement of about 2,000 LHXs.

OH-58D AHIP -- The revised budget supports procurement of 24

AHIP aircraft in FY 1989, and provides advance funding for an
additional 24 aircraft scheduled for authorization in FY 1990.
Future procurement of the AHIP will be determined by the pace and
fielding schedule of the LHX, and by other modernization needs as
we plan for the 1990s. Both fielded and new-production AHIPs will
be armed with Air-to-Air Stinger (ATAS) missiles.

AH-1WSuperCobra Helicopter -- Consistent with congressional

action on the FY 1988 budget, the final 34 aircraft in the AH-IW
program will all be purchased in FY 1988, instead of in FY 1988
and FY 1989 as previously planned. These aircraft will sustain
the Marine Corps' attack helicopter forces into the 1990s.
Development of a night targeting system (NTS) for the AH-IW also
is funded in FY 1989.

187
 Forward-Area Air Defense System (FAADSJ -- FAADS is an integrated
system comprising five components designed to grow with the air
threat through the 1990s and beyond. Work on the initial system
components is proceeding on schedule. The most significant devel-
opments within the past year were the selection of two key compon-
ents of FAADS: the Line-of-Sight Forward-Heavy (LOS-F-H) and
Line-of-Sight Rear (LOS-R) systems.

The Army has recently selected the Oerlikon/Martin Marietta

Air Defense/Antitank System (ADATS) to perform the LOS-F-H
mission. Testing at White Sands of four competing slstems
included live-fire tests and acquisition/tracking trials conducted
under a range of weapons-employment conditions. Five firing units
will be procured in FY 1989, and additional operational tests will
be conducted. The test results will form a basis for decisions on
the system's configuration. The ADATS will provide a major,
urgently needed increase in the forward air defense capability of
Army divisions deployed in Europe. As production continues toward
the planned level of 562 fire units, the results of operational
tests will be applied to improve performance further against
emerging threats.

Last year, the Army selected the Boeing Avenger, which incor-
porates pedestal-mounted Stinger missiles, as its LOS-R system.
Divisional rear-area defense capabilities will be ~reatly enhanced
as this system is deployed. As with the LOS-F-H, Initial LOS-R
production will be used to equip divisions deployed in Europe.
Funds for 59 fire units have been authorized to date, including 39
in FY 1988. The FY 1989 budget provides funds for additional
systems as we move toward our objective of 1,200 systems.

In other areas of this program, the Non-Line-of-Sight (NLOS)

system will remain in advanced development longer than initially
planned. Procurement of ground sensors for the command, control,
and intelligence component, originally scheduled for FY 1989, has
been deferred.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
M1A1
DeveloITent:
$ Mi lions 24.5 73.1 45.8
Procurement:
Quantity 810 645 559
$ Millions 1,793.0 1,618.3 1,379.7

188
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding

M2A1/M3A1
Development:
$ Millions 46.3 21.6 21.8
Procurement:
Quantity 662 586 581
$ Millions 804.5 716.5 714.0

FAADS LOS-F-H
Development:
$ Millions 23.6 99.0 49.8
Procurement:
Quantity 60
$ Millions 108.8
AHIP Modification
Procurement:
Quantity 36 36 24
$ Millions 176.2 160.1 170.0
AH-64 APACHE
Development:
$ Millions 40.0 94.6
Procurement:
Quantity 101 77 72
$ Millions 1,108.2 937.9 891.2
LHX
Development:
$ Millions 38.4 30.0 124.7
AH-1W
Procurement:
Quantity 34
$ Millions 33.7 226.6 0.6

4. Update of Readiness and Sustainability Goals

The Army's operating tempo goals for FY 1989 of 850 training

miles per year for major combat tracked vehicles and 15.8 flying
hours per month for aviation crews remain unchanged. Modest
decreases in stock funds and peacetime s~ares are not ~rojected to
have a significant impact on Army or Marine Corps readiness. Both
the Army and Marine Corps will maintain the combat proficiency of
their units through joint and combined-arms exercises at the
National Training Center and Marine Corps Air-Ground Combat
Center. We are currently investigating practical measures that

189
will eventually be used to relate traInIng and resource inputs to
levels of readiness. We feel confident, however, that the
operating tempos funded in the FY 1989 budget will provide the
necessary traIning for our soldiers. Army and Marine Corps
progress toward increasing combat force sustainability will be
slowed, however, by planned reductions in war reserve spares and
ammunition procurement.

5. Conclusion

We have faced hard choices in revising the FY 1989 budget, but

I believe we have maintained a reasonable balance between readi-
ness and modernization, although at some cost in force structure.
We have tried to keep most of our major land force programs at
efficient production levels, rather than stretching them and
incurring higher unit costs. Cutbacks have been made in such a
way as to minimize the effect on our higher-priority armored and
mechanized forces.

There can be no doubt, however, that these force structure

reductions, no matter how carefully focused and considered, have
increased the risk to our national security. The threat, which
these forces were designed to meet, has not diminished. Thus, we
must redouble our efforts to ensure that our existing forces are
modern, combat ready, and sustainable.

190
B. NAVAL FORCES

1. Introduction

The Navy's maritime strategy, outlined in last year's report,

continues serving our nation well, as exemplified by world events
in 1987. We have witnessed firsthand in 1987 the utility and
flexibility of naval forces in our important collective defense
efforts in the Persian Gulf. Beyond these crisis management
tasks, our naval forces -- in conjunction with those of our allies
-- play a crucial role in executing the national military
strategy.

Last year, we described the steadily improving quality of

Soviet maritime forces, a trend that continues unabated. As part
of our competitive strategy to counter the threat, we will
continue to exploit both Soviet force structure weaknesses and
geographic disadvantages to offset the Soviet's numerical
strength. In a major conflict, our strategy and force employment
options would force the Soviets to fight from a defensive posture
against our qualitatively superior forces.

The improvements we are witnessing in Soviet mar1t1me forces

dictate that we maintain a steadf course in modernizing our naval
forces. Yet abrupt defense fund1ng cuts and projected resource
constraints have resulted in force structure reductions and
selected program deferrals or terminations. In particular, we
will have to delay achieving our long-standing force goal of 600
ships. We are limiting force structure growth in the near-term by
ret1ring the least-capable older ships to provide adequate funds
for the remainder of the fleet, including new and more capable
ships that are being delivered.

a. Force Structure and Composition

We have made considerable progress over the past seven years

in expanding the capabilities of our naval forces. Our force
expansion efforts and force structure goals, summarized in Table
III.B.1, support the wartime naval fleet disposition depicted in
Chart III.B.1. Due to fiscal constraints, however, the Navy will
retire 16 older frigates (ten FF-1040 class and six FFG-1 class)
earlier than previously planned. Along with other adjustments,
this will result in an overall force of 580 deployable battle
force ships at the end of FY 1989, rather than the 605 ships
projected in last year's report. This reduction was decided upon

191
 • Maintain high levels of readiness; and

• Improve sustainability, especially in the area of

munitions.

2. Readiness and Sustainability Progress

a. Readiness

Our FY 1989 request is designed to sustain the high state of

readiness made possible through our investments in personnel,
training, and materiel support programs over the last seven years.
The budget request supports the operation of naval forces at the
levels envisioned in our goals -- 50.5 steaming days per quarter
for the deployed fleets, and 29.0 days for the home fleets.

b. Sustainability

Last year, the Navy made significant progress in buildin~ its

stocks of conventional ordnance. From FY 1982 to FY 1988, with
the Congress's support, annual real growth in funding for
sustainability programs averaged over 7 percent.

3. Defense Program Update

a. Power Projection Forces

(1) Aircraft Carriers

Full funding by the Congress in FY 1988 for two more nuclear-

powered aircraft carriers has provided a more economical and less
risky means of maintaining our force of aircraft carriers over the
next decade. Given current force-level projections, we can now
plan to retire the USS Midway in the mid-1990s, at a more
realistic age of about 52 years, versus 56 years under the
previous plan. The additional procurement will also permit the
first of the large-deck Forrestal-class carriers to be retired
after about 45 years of service -- the lifespan that was
originallf projected for them when we undertook the carrier
service-life extension program (SLEP) in 1981.

194
 (2) Battleships

The wisdom of reactivating our four battleships was

demonstrated again last year when the USS Missouri deployed to the
Indian Ocean/North Arabian Sea in response to the need for an
increased u.S. presence in the Persian Gulf area.

The Pioneer remotely piloted vehicle (RPV) concept was

successfully tested in 1987, and the system is now deployed on the
battleship Iowa, where it is undergoing further operational and
engineering evaluation.

(3) Sea-Launched Cruise Missiles

Nuclear and conventional Tomahawk Land Attack Missiles (TLAMs)

are now entering the fleet in sufficient numbers to provide a
potent dispersed land-attack capability. By 1992, some 135
submarines, battleships, cruisers, and destroyers will be capable
of putting nearly 2,000 TLAMs to sea.

(4) Amphibious Forces

The versatility of amphibious shipping has been demonstrated

in our Persian Gulf operations, with an ensuing high demand for
these platforms in a variety of roles.

There have been no major changes in our amphibious assault

force programs since last year. The four key programs remain the
LBD-l; the LSD-41 (Cargo Variant); the Landing Craft, Air
Cushioned (LCAC); and the MV-22 Osprey tilt-rotor aircraft.

Delivery of our first LBD-l is scheduled for the spring of

1989. A contract for the second LBD, which included options for
two additional ships, was awarded in FY 1986. The third ship was
authorized in the FY 1988 budget l and the two additional ships
needed to meet the Marine AmphibiOUS Force (MAP) plus Marine
Amphibious Brigade (HAB) Assault Echelon (AE) lift goal are
planned for authorization in FY 1989 and FY 1991. Additional
ships will be required in later years to offset LPH retirements,
which are scheduled to begin in the mid-1990s.

The LSD-41 (Cargo Variant) will carry more car~o than the
basic LSD-41 in exchange for fewer LCAC spaces. SiX of these
ships are needed to meet our lift objective. Fiscal constraints

195
precluded inclusion of the sixth ship in the amended FY 1989
budget or FY 1988-92 shipbuilding plan, thereby delaying
attainment of our amphib10us-lift objective until 1997.

Procurement of at least 90 LCACs is planned to satisfy

MAP + HAB/AE lift requirements. Twelve of these craft have been
delivered to date. Followin$ the successful completion of
operational testing last spr1ng, the Navy awarded contracts for
the 17 craft authorized in FY 1985 and 1986. Those awards had
been delayed by reliability problems experienced during earlier
tests.

The MV-22 Osprey tilt-rotor aircraft program remains on track,

and promises to provide significant increases in operational
capability, reliability, and survivability. Advance procurement
funding is being requested in FY 1989, and the first MV-22
squadron is scheduled to be fielded in FY 1992.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
CVN Aircraft
Carrier
Procurement:
Quantity 2
$ Millions 6,325.0
CV Service Life
Extension Program
Procurement:
Quantity 1
$ Millions 83.5 729.8 135.4
Tomahawk Missiles
Procurement:
Quantity 324 475 510
$ Millions 735.1 868.9 733.4
Harpoon Missiles
Procurement:
Quantity 96 124 138
$ Millions 138.5 153.0 176.6
LBO-I
Procurement:
Quantity 1 1
$ Millions 35.0 752.9 737.5

196
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
LSD-41 Variant
Procurement:
Quantity 1
$ Millions 258.0
LCAC
Procurement:
Quantity 9
$ Millions 36.5 192.6

b. Antisubmarine Warfare (ASWJ Forces

(1) ASWMasterPlan

The dramatic improvements in the Soviet submarine force

witnessed in recent years, particularlr in sound quieting,
mandated the development of a new ASW investment strategy. As
directed by the House Committee on Appropriations, the Navy
submitted to the Congress in April 1987 an ASW Master Plan
justifying the acquisition plans, costs, and schedules of all
major ASW programs for FY 1988 and beyond. The plan will be
updated annually to ensure it remains as responsive to the threat
as budgetary conditions permit.

(2) Maritime Patrol Aircraft

We have made some changes in the P-3 program due to a lack of

competition for the "e" model of the aircraft described in last
year's report. The Long-Range Air ASW Capability Aircraft
{LRAACA) is now planned to succeed the P-3C as the Navy's airborne
land-based ASW system. In developin~ this new aircraft, the Navy
will consider derivatives of commercial airframes, as well as
modified versions of the P-3. The LRAACA will be designed to
carry larger payloads than those of the existing P-3C and the
competition calls for a desired increase in the plane's radius-of-
action to 1,600 nautical miles. In evaluating the alternative
designs, we will stress overall cost-effectiveness in performing
future maritime patrol missions.

The additional P-3C procurement funds voted by the Congress in

FY 1988 will enable p-3 production to be sustained as a hedge
against any delays in LRAACA's development.

197
 (3) Attack Submarines

The first of our improved SSN-688-class submarines, equipped

with the AN/BSY-l submarine combat system, will reach the fleet in
1988. With its delivery, we will have reached our goal of 100
attack submarines. Continued production of three to four
submarines per year will be required to maintain a 100-ship force
with qualitative superiority over Soviet submarines.

The recent illegal transfer of valuable antisubmarine warfare

technology to the Soviets further highlights our need to maintain
a vigorous attack submarine program. The new SSN-21 submarine
will meet that need. CompetItion between the two major submarine
builders remains strong as the SSN-21 proceeds toward its initial
authorization date in 1989. The prime contractor for the
submarine's combat system has been selected, and will begin full-
scale development of it early this year. The additional funds
voted by the Congress for attack submarine development in FY 1988
will support research on advanced submarine technologies,
including potential follow-ons to the SSN-21. The FY 1988
authorizatIon required detailed reports on how this additional
funding would be obligated, with the stipulation that SSN-21
development funds would be withheld if the reports were overdue.
We plan to submit the reports on time and antIcipate no delays in
the acquisition schedule for the SSN-21.

(4) ASW Weapons

The HK-48 Advanced Capability (ADCAP) torpedo has been

approved for limited production following completion of a
successful at-sea testing program. Design difficulties, however,
have dictated a restructurIng of the HK-50 torpedo program. We
now anticipate cost increases and a 21-month delay In the HK-50's
full-scale development program. The restructured program will
ensure that the torpedo is reliably designed and vIgorously tested
prior to entering production.

We have decided to defer development of the Sea Lance ASW

standoff weapon until a si$nificant number of new submarines are
available to utilize the mIssile's increased range. The limited
tests funded by the FY 1989 budget will permit work on the missile
to be resumed expeditiously once the system's advanced
technologies can be fully exploited.

198
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
TAGOS
SURTASS Ships
Procurement:
Quantity 4 4
$ Millions 176.5 159.6
FDS
Development: 27.3 64.6 104.9
$ Millions
SSN-688
Procurement: 4 3 2
$ Millions 2,229.2 1,676.9 1,493.6
SSN-21
Development:
$ Millions 240.5 210.0 195.1
Procurement:
Quantity 1
$ Millions 375.0 257.6 1,488.0
Sea Lance
Development:
$ Millions 105.6 105.0 50.0
SH-60B/F
Helicopters
Procurement:
Quantity 24 24 24
$ Millions 395.4 460.1 506.7
HI{-48 ADeAP
Procurement:
Quantity 50 100 261
$ Millions 247.7 255.7 443.0
HI{-50 Torpedo
Development: 173.0 140.6 134.7
Procurement:
Quantity 16 140
$ Millions 65.4 108.8 198.5
P-3
Procurement:
Quantity 9 6
$ Millions 382.6 214.6 1.9

199
 FY 1981 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
ROTHR
Procurement:
Quantity 1 2
$ Millions 88.1 163.6
CG-47 Cruiser
Procurement:
Quantity 3 5
$ Millions 2,656.2 4,127.0
DDG-51 Destroyer
Procurement:
Quantity 2 3
$ Millions 1,730.4 5.5 2,207.3
SM-2 Missile
Procurement:
Quantity 1,194 1,310 1,635
$ Millions 698.8 598.5 700.5
LRAACA
Development:
$ Millions 1.8 69.1

c. Antiair Warfare (AAWj Ships

The Congress has authorized funds for 27 CG-47-class crUIsers

and three DDG-51-class destroyers to date. The amended FY 1989
program procures three additional DDG-51s. Unfortunatel¥, that
rate of production will not keep pace with projected retIrements
of older AAW ships, resulting in a shortfall of at least 20 ships
throughout the next decade. Continued production below the rate
of five AEGIS ships per year will exacerbate this shortfall.

d. Mine Warfare and Support Forces

Although we would look to our allies to perform the majority

of mine-countermeasures operations in an¥ major conflict, we must
still maintain a capability to conduct mIne-countermeasures
operations in our home ports and areas overseas where allied
assistance might not be available. Recent operations in the
Persian Gulf confirm the validity of this approach. For this
reason, the Navy has undertaken several programs -- described In

200
previous reports -- to revitalize its mine warfare capabilities.
Key among these are the MCM-l, MHC-51, and MH-53E programs.

The Navy took delivery of its first MCM-l mine counter-

measures ShIp in 1987, and two more MCM-ls may join the fleet this
year. Funds for the last three ships in the 14-shi~ program were
requested in FY 1988. The Congress denied the fundIng, citing
concerns about construction delays. We will examine this program
in the context of our overall review of the FY 1990-94 defense
program in order to determine how to proceed with procurement of
the remaining ships.

A contract for our first MHC-51 minehunter was awarded last

spring, and we expect the ship to enter service in 1991. Funding
for the second and third of a planned force of 17 MHC-51s was
included in the FY 1989 budget submitted last January. The Naval
Reserve will receive all 17 MHC-51 ships, along with the 14
MCM-ls, after each ship has spent 12 months in the active fleet.

Seventeen MH-53E helicopters have been funded to date, and the

first deliveries were made In 1987. The FY 1988/FY 1989 budget
funded the remaining 15 aircraft in the program.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
MCM-l Ships
Procurement:
Quantity
$ Millions
MHC-l Ships
Procurement:
Quantity 2
$ Millions 197.2

e. Combat Logistics Forces

Four of the Navy's new TAO-187-class fleet oilers have been

delivered, seven more are under construction at two shipyards, and
we are preparing to award contracts for the two ships authorized
in FY 1988 early this year. Three of the four ships being built
at one of the yards have encountered cost and schedule groblems.
These ships are being built on "Cost Plus Incentive Fee con-
tracts. The first of the ships has slipped 12 months relative to
its original delivery date, and the second has slipped four

201
months, with further delays expected. The ships are budgeted at
target cost, and the first three are exceeding the target amounts.
The Navy requested funding last September to cover its share of
the cost growth on the three ships, but the Congress has not yet
acted on the request.

The five-ship AO (Jumbo) conversion program is designed to

expand the oil-carrying capacity of existing fleet assets, thereby
elIminating the need for two of the TAO 187s. Funds for the lead
ship were appropriated in FY 1987, and we expect to award a
contract early this year. In FY 1989 we are requesting funds for
the second of the four AOE-6-class fast support ships contained in
the original FY 1988-92 Shipbuildin$ Plan. The first two of a new
class of ammunition ships are also Included in the five-year plan.
These ammunition ships are urgently required to provide the combat
sustainability required by our newly expanded fleet.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding

AOE-6
Support Ships
Procurement:
Quantity 1 1
$ Millions 497.0 363.9
TAO-87 Oilers
Procurement:
Quantity 2 2 2
$ Millions 257.0 256.4 284.9

4. CONCLUSION

We have made substantial progress over the past seven years

toward our goal of a modern, expanded Navy. Unfortunately, fiscal
realities have required reductions both in force structure and in
acquisition programs. We have made these reductions with great
reluctance, and onl~ after a thorough review of the available
options. Our overrIding criterion has been to maintain a read~,
sustainable force. Wherever possible, we have made programmatIc
adjustments designed to minimIze any Increase in the risks to our
security; as funding levels are reduced, however, some increase in
risk will occur.

We make every effort to ~et the most defense capability out of

each dollar through competitive procurement and other management
efficiencies. Construction of modern surface combatants at rates

202
C. TACTICAL AIR FORCES

1. Introduction

Tactical air forces remain a powerful, flexible element of

our conventional deterrent. Designed to deploy rapidly from land
bases or aircraft carriers, tactical aircraft can conduct and
support a wide range of military operations against both air and
surface targets. To perform their missions effectively, the
forces must have modern, capable aircraft and weaponry; ample
stocks of spare parts and supplies; and highly trained aircrews.

Since we require our tactical air forces to perform a variety

of tasks in support of our national military strate$y, we must
acquire an effective mix of aircraft that offer a w1de range of
capabilities. These include fighter, attack, and support air-
craft. While we had hoped to continue pursu1ng improvements in
force structure, combat readiness, and sustainabi11ty, fiscal con-
straints have forced us to preserve combat readiness and sustain-
ability by reducing our force structure.

Our essential flight training program is being sustained in

FY 1989 at the same satisfactorr pace as was approved for FY 1987,
protecting near-term force read1ness. War reserve munitions
aC9uisition also is being continued, thereby enhancing sustain-
ab11ity. But force structure is be1ng reduced. Since our forces
are sized to meet threats to our national interests at a prudent
level of risk, the force structure reductions carry with them a
concomitant increase in the risks to our security.

2. Force Structure

a. Air Force

The Air Force currently has almost 38 tactical fighter w1ngs,

based as shown in Chart III.C.1.

Due to cuts in funding, the force structure will be reduced

by the equivalent of one and one-half wings in FY 1989. We will
begin deactivating the wings at Nellis Air Force Base, Nevada, and
tentatively, Torrejon Air Base in Spain, completing the
deactivations in FY 1990. At the same time, we are planning to
accelerate the modernization of our reserve forces, replacing
older-model F-4s and A-lOs with the more capable F-16.

205
training support for the rema1n1ng wings, while keeping their
peacetime operating tempos at acceptable levels.

3. Defense Program Update

a. Combat Readiness and Sustainability

Over the past seven years, we have placed great emphasis on

improving the readiness and sustainability of our forces. Regret-
tably, these programs are often viewed as easy targets for bud$et
cuts. In FY 1989, we have protected the readiness of our tact1cal
aircrews, funding the planned FY 1989 flying-hour program and
associated peacetime operating spares. We have also kept muni-
tions funding at a level commensurate with FY 1988 fund1ng enacted
by the Congress.

The readiness of our tactical air forces has never been

higher. In FY 1989, Navy and Marine Corps aircrews will average
25 hours of flying time a month, and the1r Air Force counterparts
about 20 hours -- meeting our readiness goals. A cutback in the
flying-hour program would reduce our ability to train our
personnel at the levels required for them to remain proficient at
their skills, and could greatly exacerbate the pilot-retention
problem. It is for these reasons that we have rejected flying-
hour reductions as a means of meeting lower FY 1989 budget limits.
Participation in training exercises -- another important
contributor to readiness -- also will be maintained at acceptably
high levels in FY 1989. Joint-service exercises provide our
forces the most realistic training anywhere, short of actual
combat. As noted in our FY 1988 report, we continue making
excellent use of exercise series such as RED FLAG and FLEETEX 1n
training our Air Force and naval aviators.

b. Force Modernization

We continue to maintain the average age of our tactical

fighter aircraft at our goal of about ten years. Annual procure-
ment levels are sufficiently high to continue meeting that goal at
least through FY 1992.

I have directed the Air Force and Navy to explore advanced

derivatives of the F-16 and F/A-18 aircraft, respectively. This
effort is aimed at addressing the evolving threat of the 1990s,
and at providing candidates, through cooperative development, for
our all1es' future fighter requirements. The derivative aircraft
represent a long-run complement to our new-generation tactical

208
aircraft -- the Air Force's Advanced Tactical Fighter (ATF) and
the Navy's Advanced Tactical Aircraft (ATA). Since fiscal con-
straints will prevent us from buyin$ as man~ of these techno-
logically superior aircraft as we will require, developing
advanced versions of existing F-16 and F/A-18 designs offers a
means of enhancin$ our overall tactical air capabilities while
minimizing acquiSition costs. The ATF program has been restruc-
tured to reduce risk and provide for initial procurement of the
aircraft in FY 1993, one year later than previously planned. The
ATA offers us unique advantages for lon$-range attack.
Accordingly, we have decided to pursue it as a joint program.

In view of budget constraints, the Air Force has begun

phasing-down procurement of the multi-role F-15E, reducing its
annual buy to 36 aircraft in FY 1989 and 30 in FY 1990.

Naval aircraft procurement programs also have been altered.

In lieu of the A-6F program, which was denied authorization by the
Congress in FY 1988, we will instead upgrade a limited number of
A-6Es. This up$rade will enable the A-6E to continue playing an
important role in our all-weather attack force until the ATA
completely replaces it early in the next century.

The Marine Corps has restructured its AV-8B Harrier program

to provide for procurement of the aircraft under a multi~ear
contract from FY 1989 through FY 1991. Although the revised
procurement plan will not achieve the original acquisition
objective of 328 aircraft, it represents a solid balance between
fiscal resources and combat capability at this time. Operational
experience with the AV-8B indicates that the aircraft is safer
than previously projected. The aircraft's low-attrition rate,
coupled with the restructured procurement plan, will allow us to
equip fully all eight programmed combat units, plus a training
squadron. We will continue to monitor AV-8B attrition over the
next few years to determine if additional procurement is needed to
sustain the Marine Corps' force structure.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
F-15
Development:
$ Millions 153.3 105.6 89.1
Procurement:
Quantity 42 42 36
$ Millions 1,766.6 1,560.7 1,505.9

209
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
F-16
Procurement:
Quantity 180 180 180
$ Millions 2,917.7 2,788.7 3,709.1
LANTIRN
Procurement:
Quantity 150 250 471
$ Millions 761.4 741.4 688.2
IIR Maverick
Procurement:
Quantity 3,224 2,700 2,540
$ Millions 363.7 298.3 270.2
AMRAAM
Procurement:
Quantity 180 400 1,470
$ Millions 582.4 673.1 831.0
AIM-9M
Procurement:
Quantity 744 956 760
$ Millions 40.4 61.1 48.3
F-14
Development:
$ Millions 278.8 164.0 167.7
Procurement:
Quantity 15 12 12
$ Millions 679.4 816.9 910.0
F/A-18
Procurement:
Quantity 84 84 72
$ Millions 2,664.7 2,399.8 2,359.3
A-6
DeveloITent :
$ Mi lions 189.9 215.5
Procurement:
Quantity 11
$ Millions

210
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
AV-8B
Procurement:
Quantity 42 24 24
$ Millions 624.1 610.7 568.4
Laser Maverick
Procurement:
Quantity 1,300
$ Millions 5.6 157.3
AIM-54A/C
Procurement:
Quantity 205 350 560
$ Millions 289.3 344.2 465.5

c. Electronic Combat

As the threat continues to $row in sophistication, so must

the capabilities of the electron1c combat (EC) systems supporting
our tactical air forces. We are pursuin$ a number of improvements
in this area, including a significant j01nt-service program called
"Tacit Rainbow." This program entails development of a jet-
powered drone that could be used to attack enemy surface-to-air
radars threatening our air missions. The system will complement
our other EC efforts in improving aircraft survivability and
enhancing mission effectiveness. Tacit Rainbow is intended to be
deployed in great numbers, capitalizing on simplicity and advanced
manufacturing techniques for comparatively low unit cost. We
intend to deploy both air- and ground-launched variants, the
g:ou~d-Iaunched variant freeing our tactical aircraft for other
m1SS10ns.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
Compass Call
Procurement:
Quantity
$ Millions 33.3 15.0 18.4
EA-6B
Development:
$ Millions 50.1 65.6 26.6
Procurement:
Quantity 12 12 12
$ Millions 411.9 454.8 491.9

211
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
HARM
Procurement:
Quantity 2,398 2,411 2,200
$ Millions 600.6 554.1 518.8
INEWS/ICNIA
Development:
$ Millions 122.3 101.8 127.8
ASPJ
Procurement:
Quantity 6 24 197
$ Millions 90.0 250.6 409.8

d. Target Acquisition, Surveillance, and Reconnaissance

We have revised several pro$rams to respond to changes in the

threats we face, while meeting tighter fiscal constraints. The
Air Force will begin a major near-term enhancement of the E-3
Airborne Warning and Control System's (AWACS) radar to improve its
detection performance. The upgrade will increase the radar's
detection range against existing aerial targets, as well as
a$ainst future Soviet aircraft and missiles, which might be
significantly harder to detect. The improvements will be
incorporated with previously programmed communications and
electronic-support measures (ESM) modifications scheduled for
installation In the 1990s.

The joint-service Advanced Tactical Air Reconnaissance System

(ATARS) continues in full-scale develo~ent. The Air Force is
responsible for the electro-optical (EO) sensor portion of the
ATARS program; it will continue with EO sensor development, but
has decided to forgo upgrading existing RF-4C aircraft with the
new sensors, given the limited lon$-term survivability of these
aircraft. Instead, other alternatives to meet long-term Air Force
tactical reconnaissance needs are being considered. The Navy is
continuing work on its portion of the program, an unmanned
reconnaissance platform. Both Services expect to announce their
decisions on sensor and platform designs in FY 1989.

The Joint Surveillance Targeting and Attack Radar System

(Joint STARS) will initially be installed on modified Boeing 707
aircraft, designated E-8As. Delays in the radar's development may
force a slip in the acquisition schedule, but we believe the

212
system will meet all of its original performance goals. We are
currently examining the employment requirements for this system.
FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
E-3A Modification
Development:
$ Millions 99.1 94.6 174.8
Procurement:
Quantity
$ Millions
ATARS
Development:
$ Millions 17.7 42.8 56.6
JSTARS
Development:
$ Millions 297.2 346.6 238.1

4. Conclusion

Our FY 1989 programs for the tactical air forces emphasize

investments in readiness and sustainability that will enable us to
meet our combat requirements to the greatest extent possible in a
fiscally constrained environment. In partnership with the
Congress, we will make every effort to ensure that our tactical
air forces support our national military strategy and preserve the
common defense.

213
D. FORCE PROJECTION

1. Introduction

a. Strategy and Missions

Our strategy of forward defense, outlined in Chapter I.C.,

continues to serve us well. The essential elements -- active
forces serving as the vanguard of our response to aggression,
reserve forces capable of mobilizin~ quickly, and projection
forces capable of rapidly transport1ng these forces to the loca-
tion of a conflict -- serve the national interest by maximizing
our deterrent capability at fiscally affordable levels.

We must accord to our active, reserve, and projection forces

the planning, resource-allocation, and training pr10rity they
requ1re to mobilize, deploy, and perform their m1ssions effec-
tively in war.

2. The Mobilization Process

Our ability to mobilize rapidly and efficiently is as impor-

tant to deterrence as the capabilit¥ of the forces themselves, and
directly affects potential adversar1es' perceptions of our
resolve. Should deterrence fail, our success at mobilizing for
war and rapidly reinforcing our active forces could directly
influence a conflict's outcome. To deploy military forces rapidly
in wartime, we must prepare for mobilization in peacetime.

a. Wartime Manpower Planning

Our Wartime Manpower Planning System (WARHAPS) was developed

to provide a consistent methodology for establishing time-phased
mil1tary and civilian manpower requirements, and for ident1fying
specific shortfalls during a mobilization. The system uses data
developed by the Services detailing their requirements for, and
projected supplies of, manpower at various points in a wartime
scenario. These data prov1de the basis for identifying problems
and formulating solutions to them. We are quite pleased with the
development of such an essential system for wartime planning, and
with the credibility and utility of our WARHAPS data.

215
 Tables III.D.I and III.D.2 display current WARMAPS supply and
demand data for military and civilian manpower, assuming a world-
wide conflict scenario.

b. Military Manpower for Mobilization

We are continuin~ to make full use of all available manpower

resources in our mobilization planning. In deciding on the proper
mix of active and reserve forces, we must consider both our ~eace­
time forward deployments and other peacetime missions for WhiCh
only active forces are appropriate. Further, we must ensure that
adequate forces, both active duty and reserve, are available to
reinforce our forward-deployed units promptly, and to deploy to
other trouble spots where U.S. forces are not routinely stationed.
In the event of a mobilization, the strength of our military
forces -- both active and reserve -- would need to be increased
quickly.

In the Selected Reserve, units would mobilize and deploy

almost immediately alongside active-duty units. The missions of
these forces demand that they be as capable and ready as their
active-duty counterparts. The Individual Ready Reserve (IRR)
would be used to bring active and reserve units to their
authorized wartime strength, and to replace any untrained or
partially trained unit members and initial casualties. We have
established policies that will ensure the early availability of
skilled IRR members to meet the CINCs' wartime requirements.
These ~olicies include annual mandatory screenings! skill
proficiency testing, refresher training, mobilization readiness
exercises, and personal status updates.

Military retirees represent another important source of war-

time manpower. By law, these individuals can be recalled to
active duty by their respective Service Secretaries to brin~ units
to wartime strength, to expand our support base in the continental
United States (CONUS), or to perform other necessary functions.
We are looking into a wide variety of possible assignments for
retirees other than their traditional training-related and admini-
strative roles.

In addition to people with prior military training, the

Services would require sizable numbers of individuals without
military experience in any major war. In the event of a general
call-up, the Selective Service System is prepared to deliver
inductees to the armed forces as quickly as the training base can
absorb them. We are looking into ways of identifying inductees

217
with skills in critical areas who would require only a bare
minimum of military training to contribute to a war effort.

c. Civilian Manpower for Mobilization

Civilian personnel provide services directly affecting the

operational readiness of our forces. We are continuing to study
ways to use our civilian work force and private-sector contractors
more efficiently, in order to free military personnel for duty in
combat-ready units. Large numbers of civilian employees in such
fields as logistics, communications, health services, and equip-
ment maintenance occupy positions overseas that are essential to
wartime operations. We have therefore taken steps to ensure that
these people would remain available in an emergency.

We are also putting special emphasis on improving our ability

to mobilize the civilian work force. We estimate that during the
first 30 days of a mobilization, nearly 300,000 people would have
to be added to the civil service to replace employees recalled to
active duty, and to meet expanded support requlrements. Prior to
1981, there was effectively no guidance or planning for the
employment of wartime civilian manpower. Accordingly, we have
established standardized civilian manpower data requirements. We
also have revised our directives to resolve problems that had been
observed in exercises, such as competition wIth local industry for
workers with critical skills, peacetime impediments to wartime
recruitment, retention of the peacetime work force during mobili-
zation, and screening the work force for potential losses to
military service. We are continuing to review, revise, and expand
our guidance in the civilian mobilization area by evaluating test
and exercise results and formulating appropriate corrective
procedures.

We also need to ensure the continued availability of those

foreign nationals we depend on to support our mobilization and war
efforts. We have begun a detailed review of our peacetime
forei~n-national work force, which constitutes fully 10 percent of
our clvilian work force.

d. Exercises

Exercises remain our primary means of evaluating and verifying

mobilization plans, policles, and procedures. We use them to
identify problems and deficiencies, and to develop and test solu-
tions. After each exercise, we evaluate the results and develop
refinements. Then we test the system again to check our progress.
Last fall, for example, as part of exercise PROUD SCOUT 88, the
Office of the Secretary of Defense and the Joint Chiefs of Staff

218
held an exercise in which senior officials and their staffs
addressed critical mobilization measures that might be implemented
in a crisis.

Our most recent civilian mobilization exercise was conducted

last fallon the East and West Coasts. It surpassed past exer-
cises in encompassing a lar~er number of states (eight in all),
and a greater mix of partic1pants (more than 100 military
installations, as well as all Services and the Defense Logistics
Agency). The exercise highlighted the large demand we would face
for new civilian manpower in any major war. We anticipate
conductin~ future annual exercises specifically concerned with
testing clvilian mobilization plans and identifying areas in which
further improvements are needed.

e. Conclusion

We have made significant progress in our total force planning,

but more remains to be done. We are always exploring better ways
of distributing missions and functions between the Active and
Reserve Components, transferring appropriate support functions to
the civilian work force and private sector, and making better use
of military retirees and inductees. Our goal is to improve our
utilization of manpower resources both in peacetime and in war.

3. Deploying The Force

a. Force Projection Goals

The overall goal of our force projection programs 1S to

achieve an ability to deploy adequate forces to counter
simultaneous Soviet-bloc offensives in Europe, the Pacific region,
and Southwest Asia (SWA). The European and SWA deployment
requirements, which remain the greatest challenge to our mobility
forces, are updated below.

(1) Europe

Our rapid-reinforcement commitment to NATO requires us to

deploYf !i~hin ten da¥s of a decision to mobilize, a total of ten
Army d1v1s1ons (of Wh1Ch four, plus two armored cavalry re~iments,
are stationed in Europe in peacetime), 60 reinforcing tact1cal
fighter squadrons, and one Marine Amphibious Brigade (MAB), plus
suppor~ detachments for all of these forces. To meet that deploy-
ment t1metable, we must preposition quantities of equipment in
Europe, together with munit10ns and supplies to sustain our forces

219
until sea lines of communication can be established. The forces
themselves and any residual items of equipment can then be air-
lifted to the theater. Sealift, augmented by allied shipping,
would deploy the follow-on forces, as well as carry the bulk of
materials needed to resupply our forces over the course of a
conflict. If forces had to be deployed simultaneously to one or
more other theaters, we would rely even more heavily on allied
shipping to reinforce and resupply NATO.

(2) Southwest Asia

The events of the past year have lent increased urgency to our
efforts to solve the problems that complicate a SWA deployment.
The great distances our forces must traverse, coupled with the
volatility of the region, make rapid deployment most difficult.
It will be possible only if we complete our prepositioning and
force improvement programs, continue receiving modest support from
friendly nations in the area, and respond promptly to warning of
imminent aggression. Our objective of responding to a major
Soviet or Soviet-surrogate incursion in a timely fashion after
bein$ asked for assistance is achievable, provided that we
continue on our present course.

b. Force Structure Goals

Our intertheater mobility goals remain unchanged from those

reported last year. During the past year, we have focused
increased attention on our ability to transport forces within
theaters and support them once deployed. The Worldwide Intra-
theater Mobility Study (WIMS), which will shortly be forwarded to
the Congress, provides the first inte$rated look at our require-
ments and capabilities (including assistance expected from host
nations for supporting forces in a multitheater scenario). We
have used WIMS to structure goals for the FY 1990-94 defense
program; its first impact on specific programs will become
apparent in the FY 1990-91 budget.

c. Current Force Structure

With the Congress's support, our FY 1988 program is in the

process of achieving its promised 73 percent of our goal of moving
66 million ton-miles of equipment daily by air. Our sealift fleet
can now meet 85 percent of our goal of transporting one million
tons of unit equipment in a single voyage.

Our prepositioning programs have also kept pace with our

plans. During this year, we will have increased the amount of

220
Army unit equipment prepositioned in Europe from 478,000 tons to
544,000 tons.

Despite these recent improvements, however, strategic lift

shortfalls persist, and will become larger in future fears due to
a projected decline in civilian sealift capacity. Th1s adverse
trend is a result of the significant reductions in the U.S. and
NATO merchant marines, on which we have traditionally depended to
carry sizable amounts of unit e9uipment in a war. We are working
closely with our allies to exam1ne the causes of these trends and
to take the necessary steps to reverse them. Some of the solu-
tions we have used in the past, such as RRF and containership
enhancements, are being studied to see how much of an im~act they
would have on reducing the shortfalls. We are also exam1ning some
of the economic factors associated with the decline in the U.S.
maritime industries, in an effort to identify any policy changes
needed to reinvigorate them.

d. Assistance from Allies

Allied support remains essential to our success in any world-

wide conflict. Ships and aircraft contributed by our NATO allies
would provide critical support for a U.S. reinforcement of Europe,
as would shipping assistance from the Re~ublic of Korea for a U.S.
reinforcement of that countrf. Host-nat10n support would play an
equally crucial role in the 1ntratheater movement of our forces,
particularly over rail in Europe.

e. Improvements Since 1981

The improvements described in last year's report are pro-

grammed to continue through FY 1992. The compos1te measure of
force projection ca~ability presented in Chart III.D.3 was devel-
oped for the 1987 M1litary Status Re~ort; it offers an overview of
the combined contributions of prepos1tioning, airlift, and sealift
to our ability to conduct a large-scale, multi theater deployment.
The comparisons consider capabilities at the beginning of this
Administration, now, and at the end of the program period,
assuming continued congressional support for our force-enhancement
efforts.

221
 b. Sealift

The budget supports the continued expansion of the Ready

Reserve Force (RRF) but reduces, relative to previously planned
levels, procurement of sealift discharge equipment and equipment
for modifyin$ containerships to carry non-containerized cargo.
These reductions will diminish our future ability to deploy unit
equipment and to land our forces in SWA or other areas where port
facilities are inadequate or nonexistent.
FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
Ready Reserve Force a
Procurement:
Quantity 13 2
$ Millions 77.8 43.4
Sealift Discharge
Procurement:
Quantity 2 2
$ Millions 32.6 9.9 15.4
Flat Racks and
Sea Sheds
Procurement:
Quantity 1,537 1,326 142
$ Millions 56.2 58.5 21.1
a Quantities may vary with actual unit costs at time of
procurement; funded in FY 1989 in the Maritime
Administration budget.

5. Command, Control, and Communications

Support for Mobilization

The improvements in command and control reported last year

have continued. The most important new development has been the
establishment of the U.S. Transportation Command (USTRANSCOM),
which brin$s our airlift, sealift, and road and rail transporta-
tion capabilities together for the first time under the control of
a single commander. This step, which was complemented by the
transfer to the new command of the planning functions of the Joint
Deployment Agency, will further strengthen our ability to coordi-
nate mobilization planning, to deploy forces rapidly and support
them effectively, and thus to utilize our military capabilities to
their best effect.

223
 6. Conclusion
We must continue strengthening our capability to resupply our
forward-deployed forces, to reinforce them with combat-ready
active and reserve forces, and to project these forces and their
equipment anywhere in the world where our interests, or those of
our allies, are threatened. In partnership with the Congress, we
will continue our steady progress toward our goals.

224
 Second, we recognize that SOF are an essential element of our
national security structure, both in peacetime and at all levels of
conflict, and place a high priority on restorin$ this capability. In
1981! our SOF units were not capable of conduct1ng the critical
miss10ns assigned to them. Today, they are far more capable; and 1n
the 1990s, they will be fully capable.

Third, despite rapid funding growth for SOF throughout the 1980s,
thef still account for less than 1 percent of the DoD bud$et. Given
the1r vital contribution to our nat10nal security, we be11eve this is
an extremely effective use of funds -- a true bargain. In
particular, we recognize that highly capable SOF playa critical role
1n low-intensity conflict -- the most l1kely threat to our interests
for the rest of this century. As the recent performance of selected
SOF elements in the Persian Gulf has demonstrated, special operations
are also likely to play a key role in a wide variety of cont1ngency
operations.

As we complete our rebuildin, of SOF in the 1990s, exrenditures

for SOF will decline. Our goal 1S to sustain the gains a ready made
to ensure that we preserve this vital capability to meet the threat
of the 1990s and beyond.

3. Reorganization

Since World War II, the fiscal support to SOF has been erratic;
it alternated between periods of heavf investment when the force was
expanded rapidly in response to immed1ate national needs, and periods
of retrenchment in ensu1ng years as our perceived needs waned. Since
no single mana$ement organization existed to represent SOF in policy
and bud$et del1berations, our attempts to maintain a viable SOF
capabil1ty fell woefully short of the mark, as evidenced by our ill-
fated 1980 hostage rescue attempt in Iran. We recognized the dangers
to our security associated with this erratic fiscal support and
fragmented management of SOF, and, in partnership with the Congress,
moved to institutionalize SOF within the Department of Defense. To
that end, we have undertaken several major steps over the past year.

First, we have activated the U.S. Special Operations Command

(USSOCOM), a unified command headquartered at MacDill Air Force Base,
Florida. The major force components of USSOCOH are shown in Chart
III.E.3. The 40,000 men and women of USSOCOM -- from both the Active
and Reserve Components -- are organized into a wide variety of units.
These include the Army's Special Forces, Rangers, PSfchological
Operations, Civil Affairs, and Special Operations AV1ation units; the

227
 Another major development is our creation of Major Force Program
(HFP) 11 for SOF within our Five-Year Defense Program (FYDP). HFP 11
consolidates SOF funding previousl¥ scattered among ten other
programs. It will focus our capab1lity and help ensure that
programs, once approved, will be implemented in a timely manner.

In June 1987, President Reagan also took steps to address the

broad range of LIC issues and concerns. He established a LIC Board
chaired by the National Security Advisor, which incorporates a Senior
Interagenc¥ Group, an Interagency Group, and a number of working
groups to 1dentify ke¥ issues and coordinate policy formation. The
board constitutes an 1nteragency mechanism to develop broad-based
cooperation, support, and understanding of LIC issues. As a member
of the board, the Department of Defense is actively involved in the
intera~ency review of issues ranging from security assistance to
intel11gence and interoperability, as well as the role of defense
resources in LIC.

4. The Next Decade: Preserving the Capability

We mentioned earlier that our goal is to sustain the gains

already made to preserve a special operations capability commensurate
with anticipated future national security requirements. One of the
keys to sustaining our effort is ensuring that we continue attracting
highly qualified, dedicated ~eople to SOF, and provide them the best
~ossible training and educat10n. We believe that, given the
1mportance of the mission, career enhancements such as the creation
of a Special Forces branch within the Army, and increased
opportunities for career advancement with the creation of USSOCOM are
powerful incentives for attracting and retaining the kind of people
we need.

We also must continue a balanced, well-reasoned modernization of

the force to ensure that it maintains the ability to execute its
missions in the face of increasingly sophisticated adversaries. The
CV-22 tilt-rotor aircraft, which will enter service with SOF in the
mid-1990s, will improve greatly our capacity for infiltration,
exfi1trat10n, and resupply of deployed forces in target areas beyond
the capability of current aircraft. It also provides an effective
exfi1tration counterpart to the MC-130's deep-infiltration capa-
bility. Similarly, 1ntroduction of the Spec1a1 Warfare Craft, Medium
(SWCM), the Advanced SEAL Delivery System (ASDS), and continued
deployment of Dry Deck Shelters (DDS) and DDS-ca~ab1e submarines will
broaden our sea-based infiltration and exfi1trat10n capability.

229
 5. Conclusion

SOF revitalization is essential to our national securitr.

Reor,anization and institutionalization of this vital capability
provide a sound footing for the future. In partnership with the
Congress, we are restoring our SOF capability. As we complete the
process of integrating SOF into our overall defense structure, we
look forward to continuing our partnership with the Congress in
sustaining our SOF capability in the 1990s.

230
 2. Strategic Offensive Forces
a. Intercontinental Ballistic Missile (ICBM) Forces

Our land-based ICBM forces are based as shown in Chart

III.F.1. Our primary near-term objective in modernizing these
forces is to counter Soviet advantages in hard target capability
by deploying more accurate missiles with an increased capability
to hold very hard Soviet targets at risk. To this end, we are
completing deployment of 50 Peacekeeper missiles in refurbished
Minuteman silos at F.E. Warren Air Force Base in Wyoming.

Though these missiles' assumption of day-to-day operational

alert status was slowed slightlr by late deliveries of guidance
systems, over 20 of the 33 miss1les already in silos were on alert
at the end of January. We will install the 17 remaining missiles
in silos by the end of this year. The congressional reduction in
our planned FY 1988 purchase from 21 missiles to 12 was the fifth
consecutive reduction in the programed history. Given
congressional unwillingness to approve more than 12 missiles per
rear, we reluctantly request procurement funds for 12 Peacekeepers
1n FY 1989 instead of the 21 missiles previously planned.

Our longer-term objective is to deploy Peacekeepers in a

basing mode that is more survivable. To do this, we are
developing rail-garrison basing for the Peacekeeper force. Trains
carrying two missiles each could be garrisoned at Air Force bases
in peacetime, from which ther could be dis~ersed over the existing
rail network in times of nat10nal need to 1ncrease the missiles'
survivability. Our long-term goal is to deploy 100 Peacekeepers
in the rail-garrison mode, including the 50 missiles initially
deployed in silos. The development funds reguested for FY 1989
support an initial rail-garrison deployment 1n late 1991. Of the
12 missiles reguested in FY 1989, we plan to use eight for deploy-
ment in the ra11 garrison system, and the remaining four for
tests. If Peacekeeper procurement continues at a rate of only 12
missiles per year, however, it could take until beyond the turn of
the century to de~loy the entire 100-missile Peacekeeper force in
rail-garrison bas1ng.

We recommend terminating the Small ICBM program that was

planned in the FY 1988-89 budget request, principally because the
program will not be cost-effective. The cost per deployed
warhead, including the missile and hardened mobile launcher that
each reguires, is well above that of other new survivable
strateg1c systems. Once deplored; this system would require
substantial funding for operations, and would demand about 8,500
Air Force and civilian workers to operate. Clearly, we cannot
afford the additional $40 billion required to complete the system,

232
million appropriated by the Con$ress for the program in FY 1988
and the $200 million requested in FY 1989 to support continued
development of the Small ICBM and basing through FY 1989.

The Minuteman force has served as the backbone of our land-

based ICBM deterrent since its initial deployment in 1962. Since
that time, the Minuteman has been regularly modernized to maintain
and enhance its deterrent capability, as shown in Chart III.F.2.
We are continuin$ to refurbish or replace a$ing Minuteman
components to maintain the system's capability and reliability.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
Peacekeeper
Missiles and
Silo Basing
Development:
$ Millions 290.0 36.0 40.0
Construction:
$ Millions 25.9 5.6
Procurement:
Quantity 12 12 12
$ Millions 1,136.6 873.7 808.7
Peacekeeper Rail-
Garrison Basing
Development:
$ Millions 90.0 350.0 792.9
Construction:
$ Millions 3.5 44.4
Small ICBM and
Mobile Launcher
Development:
$ Millions 763.5 682.3 200.0
Minuteman
Modernization
Development:
$ Millions 52.4 84.3 61.1
Procurement:
$ Millions 109.9 80.0 73.2

234
 Completion and outfitting of the ninth Trident SSBN, the USS
Tennessee, is on track, with sea trials scheduled to begin this
September. The USS Tennessee will be our first SSBN armed with
the D-5 missile. Flight tests of the D-5 began on schedule in
January 1987 and, overall, have been very successful. As a
result! the current estimates for D-5 range, accuracy, and
reliability are well within the established system requirements.

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
Trident
Submarines
Development:
$ Millions 33.7 30.9 33.5
Construction:
$ Millions 131.1 73.8 34.5
Procurement:
Quantity 1 1 1
$ Millions 1,357.1 1,260.8 1,368.1
Trident II Missiles
Develorment :
$ Mi lions 1,573.3 1,050.5 580.9
Procurement:
Quantity 21 66 66
$ Millions 1,346.7 2,047.0 1,873.5

Our FY 1989 budget supports procurement of the sixteenth

Trident SSBN, continued development of the D-5, and production of
66 D-5 missiles. While the missile is still projected to become
operational in late 1989, the current development funding is
austere. Consistent with the lar$ely successful performance thus
far! the budget provides only limited flexibility to correct any
deficiencies that might be identified in subsequent tests.

c. Strategic Bomber Forces

Our objectives in modernizing the strategic bomber force,

based as shown in Chart III.F.4, are to maintain a capability to
penetrate Soviet airspace with high confidence and to deliver
weapons more accurately. To do this, we are installing air-
launched cruise missiles (ALCMs) on B-52s; completing deployment
of the B-IB bomber; developing the Advanced Technolo$y Bomber
(ATB), the B-2; and pursuing an Advanced Cruise Missile (ACM)
program.

236
longer range than the existing ALCM-B. The extra range will allow
bombers to stand off farther from enemy air defenses, and the
missiles themselves to circumnavigate some defenses. Increased
use of low-observable technology will enhance the new missile's
ability to penetrate highly defended areas. The ACM is scheduled
to become 0~erationa1 before the end of the decade, and will be
deployed initially on B-52Hs at K.I. Sawyer Air Force Base in
Michigan.

We now have five squadrons of B-1Bs -- two each at Dyess Air

Force Base, Texas, and Ellsworth Air Force Base, South Dakota, and
one at Grand Forks Air Force Base, North Dakota. The final
s9uadron, bein~ assembled at McConnell Air Force Base, Kansas,
Will be operational by June 1988.

To counter projected future improvements in Soviet air

defenses, we are developing the B-2, whose design is based on
advanced low-observable technologies. The first of 132 B-2s will
be deployed at Whiteman Air Force Base, Missouri, in the early
1990s.

To improve the effectiveness of our penetrating bombers, we

are also requesting FY 1989 funds to continue developing an
improved short-range attack missile -- the SRAM II -- to replace
the a~ing SRAM A. SRAM II will have greater range, penetration
capability, and lethality than its predecessor.

The additional funds approved for KC-135 reengining in FY 1988

will allow us to convert up to 14 more aircraft this year than we

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
B-52 Bomber
Modifications
Development:
$ Millions
Procurement:
$ Millions 390.7 240.0 215.9
B-1 Bomber
Modifications
Development:
$ Millions 115.7 366.8 221.6
Procurement:
$ Millions 88.0 14.5 26.5

238
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
SRAM II
Development:
$ Millions 65.5 174.3 231.5
KC-135
Modification
Development: 0.4 4.0 3.2
Procurement:
$ Millions 763.5 705.1 593.8
Air-Launched
Cruise Missile
Procurement:
$ Millions 9.4 2.3

had earlier anticipated. We have already outfitted over 100 KC-

135s with new engines, and our FY 1989 request supports 36 more
conversions.

3. Strategic Defensive Forces

a. Strategic Defense Initiative

Despite budget cuts, the Strategic Defense Initiative (SDI)

program is making satisfactory progress toward its goal of
supporting an informed decision in the earlf 1990s on deploying a
ballistic missile defense. Chapter IV.A. dIscusses our SDI
program in detail.

b. Air Defense

Our near-term goal in modernizing our air defense forces is to

correct deficiencies in their ability to detect and intercept
current Soviet bombers and cruise missiles. For the lon$er term,
we seek to develop the technologies needed to defend agaInst the
more advanced SovIet cruise missile and bomber threat projected
for the 1990s.

We will achieve our near-term modernization goal in the early

1990s. Air National Guard F-I06 and F-4 interceptors will have
been replaced by F-15s and modified F-16s, and two new
surveillance systems will be operational: the North Warning
System of radars across northern Canada, and the Over-the-Horizon-

239
Backscatter (OTH-B) radar system, coverIng very large ocean areas
to the east, west, and south.

The east coast site of the OTH-B radar system is now in place.
Tests in early 1988 a~ainst cruise missile-sIzed objects will
assess the radar's abIlity to provide warning against attack by
cruise missiles, which are the most difficult objects to detect
and track. We are requesting funds in FY 1989 to procure the
first of two Alaskan OTH-B sectors.

Our longer-term goal -- defending against advanced low-

observable Soviet cruise missiles and bombers -- cannot be
achieved by marginally upgrading current systems, but will require
significant gains in surveillance technologies, long-range
intercept missiles, antisubmarine warfare systems, and battle
management systems. Our Air Defense Initiative (ADI) is
conducting research on these technologies on a schedule that will
permit a decision on full-scale development of an advanced air
defense to be made concurrently with decisions on ballistic
missile defenses.

Any further reductions in the ballistic missile threat 1

whether throu~h arms control agreements or defenses, will Increase
the relative Importance of the bomber and cruise missile threat.
A comprehensive ADI effort could provide the Soviets with a
powerful incentive to forgo investment in an advanced bomber and
cruise missile offense in the 1990s, knowing that we would be
technologically prepared to negate any such investment with an
effective defense.

c. Space Control

The Soviets have already deployed an antisatellite (ASAT)

system. The United States needs an operational ASAT to deter the

FY 1987 FY 1988 FY 1989

Actual Planned Proposed
Funding Funding Funding
Strategic Defense
Initiative
Development:
$ Millions 3,279.7 3,551.0 4,545.9
Air Defense
Initiative
Development:
$ Millions 35.6 49.2 213.6

240
 FY 1987 FY 1988 FY 1989
Actual Planned Proposed
Funding Funding Funding
Space Control
Development:
$ Millions 208.3 203.6 74.5

Soviet Union from exploiting its present ASAT monopoly.

Unfortunately, the continuin~ congressional prohib1tion against
testing the air-launched min1ature vehicle (ALHV) against targets
in space has forced us to cancel the ALMV ASAT program. We
believe this to be an extremely unwise decision, but we cannot use
scarce resources on a program we are unable to test. Should the
Congress decide to allow us to deter the Soviet ASAT capability,
we would be prepared to reprogram the necessary resources.

4. Strategic Command, Control, and

Communications

Our strategic command, control, and communications (C 3 )

modernization program has corrected many serious deficiencies in
warning sensors, command centers, and communications links. Some
of these improvements are already in place. Recent examples are
the upgraded Ballistic Missile Early Warning System (BHEWS) radar
in Greenland and the PAVE PAWS SLBM warning radars in Georgia and
Texas.

We are also making progress with our communications programs.

The Ground Wave Emergency Network (GWEN) will become operational
this year with connectivity provided by an initial 56 nodes (relay
towers); an additional 40 nodes will complete the system.
Although the total number of nodes is about 30 less than
previously planned, the 96-node system will meet our most
essential requirements. In FY 1989, we will also begin developing
a GWEN receiver for ICBM launch control centers. The equipment
will be based on the miniature receive terminals (HRTs) used by
bombers.

The extremely low frequency (ELF) submarine communication

system will become fully operational in FY 1991, when receivers
have been installed on the entire SSBN force. The transmitter
site in Michigan (one of two in the network) will come on line in
FY 1990, slightly later than previously planned.

241
 In acting on our FY 1988 request, the Con~ress accelerated the
Milstar satellite program, and we are requesting funds in FY 1989
to continue the program on its revised schedule.

5. Nonstrategic Nuclear Forces

Our programs continue to support NATO's 1983 Montebello

decision to reduce the number of nuclear weapons in Europe by
1,400, while improving the survivability, effectiveness, safety,
and security of the remaining warheads and delivery systems.

a. Intermediate-Range Nuclear Forces

NATO's perseverance in deploying 108 Pershing II ballistic

missiles (completed in 1985), and 304 of the planned 464 ~round­
launched cruise missiles (GLCMs), has led to the first maJor arms
reduction agreement between the United States and the SOViet
Union. All U.S. Pershing lAs, lIs, and GLCMs, as well as the
entire force of Soviet SS-4s, SS-5s! SS-12s, SS-20s, SS-23s, and
GLCMs, will be scrapped, resulting in the elimination of deployed
missiles capable of carrying over 400 U.S. and over 1,400 Soviet
INF warheads.

The treaty is militarily advantageous to us, but will reqUire

some force adjustments to maintain a full set of flexible response
options. The actions will be fully consistent with the letter and
spirit of the treaty. Some of these adjustments represent long-
standing requirements stemming from the 1983 Montebello decision.
b. Short-Range Nuclear Forces

The replacement of our aging artillery-fired atomic

projectiles (AFAPs) is continuing. The new rounds possess greater
range and accuracy, and also incorporate improved safety and
security features. The complete replacement of these older
systems is, however, constrained by a congressionally imposed
ceiling of 925 modern AFAPs. We request the removal of that
ceiling to continue with vitally needed modernization programs
agreed to at the highest levels at Montebello in 1983.

We are initiating development of a new short-range nuclear

missile to replace the aging Lance system! with the mid-1990s as
an initial deployment goal. The new miSSile -- Follow-on to Lance
(FOTL) -- offers improvements in range, safety, survivability,
and reliability relative to its predecessor. One promising
contender for FOTL -- the Army's Tactical Missile System (ATACMS)

242
 is currently restricted to a conventional role by the Congress.
ATACMS missiles are designed to be launched from Multiple-Launch
Rocket System (MLRS) launchers; basing FOTL on the ATACMS and MLRS
concepts would shorten the system's development time, and thus
reduce overall program costs. We request the removal of the
congressional restriction on this program as well, in order to be
able to implement the Montebello decision.

c. Aircraft Systems

We are continuing to upgrade our dual-capable aircraft and

modernize their nuclear $ravity bombs. At the same time, we are
enhancing the survivabil1ty of the aircraft and their nuclear
weapons by introducing underground weapon storage vaults and
hardened aircraft shelters, by taking extensive measures for
defending against chemical weapons, and by enhancing our
capabilities to repair runways damaged by conventional weapons.

We are also considering a Tactical Air-to-Surface Missile

(TASM) that would effectively extend the combat range of U.S. and
allied aircraft, and allow them to attack high-value targets
without being exposed to terminal air defenses. We will decide
during the formulation of the FY 1990-91 President's Budget
whether to pursue a TASH program.

d. Sea-Based Systems

We are continuing production and deployment of the nuclear

version of the Tomahawk sea-launched cruise missile, and expect
the full force of over 700 missiles to be deployed by the m1d-
1990s. This system contributes to our nuclear deterrent forces,
as well as being part of our nuclear reserve force.

6. Conclusion

The strategic modernization program, the Strategic Defense

Initiative, and related nuclear force modernization programs have
invigorated both our capability to deter nuclear aggression and
the Soviets' interest in achieving arms reduction agreements. We
believe the new INF agreement has furthered the security interests
of the United States and our European allies. While we believe
the President's proposed START agreement will also be in our best
interests, we need to continue modernizing our strategic and
nonst:ate$ic force~, both to make such an agreement possible and
to ma1nta1n a cred1ble deterrent at any force level.

243
while improvements in key C3 systems are being realized, as shown
in Chart III.G.l.

a. Strategic Command, Control, and Communications

Strategic command, control, and communications (C3) include:

the systems that warn us of and assess a nuclear attack; command
centers; and the communications systems required to assure
connectivity between sensor sites, command locations, and nuclear
capable forces.

Our ability to detect and assess a ballistic missile attack

has improved with our recent deployment of a new PAVE PAWS phased
arrar radar and with upgrades to our Ballistic Missile Early
Warning System (BHEWS). Over the next few years, our ability to
detect bomber and cruise missile attacks will also improve as we
continue replacing the old Distant Early Warning (DEW) line with a
modern, more operationally cost-effective North Warning System
(NWS). With these improvements, and with the future deployment of
long-range Over-the-Horizon Backscatter (OTH-B) radars, we will
possess a vastly improved attack warning and assessment
capability.

The Ground Wave Emergency Network (GWEN) is our primary

program for improving, in the near term and at relatively low
cost, strategic connectivity. GWEN is unique in that it is our
only terrestrial C3 system linking the National Command Author-
ities (NCA) to our strategic forces and warning sensors which is
resistant to electromagnetic pulse (EMF) effects. By assuring
that our strategic communications could not be disrupted by EMF,
GWEN strengthens deterrence and thus reduces even further the risk
of war.

Satellite systems, however, remain the principal long-range

response to our strategic communications requirements. Of all the
strategic C3I systems, the Milstar satellite and associated ter-
minal system is the most critical. It will provide global two-way
communications to the strategic and tactical forces and will be
considerably less susceptible to the effects of nuclear
detonations and jamming than current systems.

b. Theater and Tactical Command, Control, and

Communications

Theater and tactical C3 systems provide military commanders

with the facilities and communications equipment necessary for
managing conventional forces. The major objective of the theater

246
and tactical C3 program over the next five years is to ensure that
sufficient numbers of new and improved C3 systems are fielded. As
the development cycle for several major C3 systems is nearing
completion, a substantial investment will be required to aC9uire
and deploy the new equipment successfully. Among the most impor-
tant of these are the Joint Tactical Information Distribution
System (JTIDS), Mark XV combat identification system, Army Command
and Control System (ACCS), Army Data Distribution System {ADDS),
new TRI-TAC equipment, Single Channel Ground and Airborne Radio
System (SINCGARS), the HAVE QUICK anti-jam communication system,
and the Navstar Global Positioning System (GPS).

To reduce the time and costs for future acquisitions,

programs that rely on nondevelopmental items (NOI) and evolu-
tionary development will be emphasized. The NOI approach reduces
costs and is the method we are using in the multibillion dollar
Mobile Subscriber Equipment (MSE) communications program. Evolu-
tionary development will also help to reduce costs by avoiding
overdesign and by shortening fieldin~ time. Under this approach,
equipment with limited capabilities is initially acquired and
later upgraded to meet a broader range of needs.

c. Defense-wide Communications and Information Systems

Defense-wide communications and information systems support

both nuclear and conventional force management. They possess
capabilities required for information processing and display,
global and base level communications, and information security.

Our information systems improvements remain targeted on

modernizing our Worldwide Military Command and Control System
(WWMCCS) Automated Data Processing (ADP) systems, upgrading
strategic information systems, and providing across-the-board
improvements in the security of defense computer systems. The
WWMCCS Information System (WIS), one of the largest of these
programs, will replace aging WWHCCS standard ADP systems with
modern, worldwide information processing capabilities to support
decisionmaking by the National Command Authorities, the Joint
Chiefs of Staff, and the Commanders of the Unified and Specified
Commands. The WIS will provide critically needed capabilities for
operations planning and employment of conventional forces.
Deployment of WIS technology is starting and will continue in a
phased or block approach into the 1990s. Other major information
systems improvements include upgrades to the attack warning and
assessment capabilities at our Cheyenne Mountain Complex.

We employ Information Security (INFOSEC) technologies and

measures in telecommunications and automated information systems
to ensure information vital to our national security is protected.

247
We have made significant progress in protecting telecommunications
by mass producing and fielding low cost secure telephone units
(STU-III), by embedding INFOSEC techniques into host information
systems with associated space and cost savings, and by developing
and evaluating secure computer systems through the National
Computer Security Center. Additionally, we are integrating
communications security (COMSEC) circuitry into tactical radios
and tactical C2 systems.

A number of initiatives are under way to restrict access of

classified material to those with a need to know. These include:
increased security for our crypto~raphic keyin~ material through
the automation of the key generat10n and distr1bution process;
improved processing of our nuclear command and control messages by
automating their processing and distribution; and improved protec-
tion of our sensitive U.S. facilities against electronic eaves-
dropping and penetration through the development of measures to
detect and counter these attacks. In summary, our national and
DoD security policy is focusing on promoting the most effective
distribution of resources to preserve the security of our
classified information.

3. Intelligence

Since effective force management depends on integrated C3 and

intelligence systems, an equal priority has been placed on modern-
izing our intelligence capabilities. Conse9uentl~, significant
gains in developing and procuring improved 1ntel11gence equipment
have been realized.

a. National and Tactical Intelligence

Our intelligence activities are accounted for in two separate

but related programs: the National Foreign Intelli~ence Program
(NFIP), and Tactical Intelligence and Related Activ1ties (TIARA).
Under Presidential direction, the Director of Central Intelligence
guides and manages the overall NFIP with our assistance. TIARA
pro~rams are developed and managed by DoD in response to command-
ers intelligence requirements. TIARA responds to operational
commanders' tasking for time-sensitive intelligence, or to
national tasking of those systems whose primary mission is sup-
porting the operatin~ forces. Furthermore, it trains personnel
for intelligence dut1es, provides an intelligence reserve, and
funds the research and development of new capabilities. Examples
of major TIARA initiatives include: the Defense Mapping Agency's
Expl01tation Modernization Programi the Navy's Integrated
Undersea Surveillance System (IUSS), the Battle Group Passive
Horizon Extension System (BGPHES) and Relocatable Over-the-
Horizon-Radar (ROTHR); the Marine Corps' Tactical Remote Sensor

248
System (TRSS); the Air Force's Rivet Joint aircrafti the Army's
All Source Analysis System (ASAS) and the Air Force s Enemy
Situation Correlation Element (ENSCE) under the Joint Tactical
Fusion Pro~ram; and the Joint Surveillance/Target Attack Radar
System (Jo1nt STARS).

b. Intelligence Oversight

Responsibility for the independent monitoring, review, and

inspection of DoD intelligence and counterintelligence activities
to ensure their propriety and legality is assigned to the Assis-
tant to the Secretary of Defense (Intelli~ence Oversight)
(ATSD(IO». The ATSD(IO) conducts worldw1de inspections of DoD
intelligence elements, and oversees the inspections of intelli-
gence units conducted by the Inspectors General (IG) of the
military departments and defense agencies. The ATSD(IO)l when
appropriate, conducts inquiries and also oversees invest1gations
br the IGs and investigative agencies into allegations of 9ues-
t10nable intelli~ence activities to assure that the invest1gations
undertaken are r1gorously and thoroughly accomplished, and that
corrective measures are taken. The ATSD(IO) reports directly to
the Secretary of Defense, and as the DoD point of contact with the
President's Intelligence Oversight Board (PIOB), prepares a
quarterly DoD intelligence oversight report to the board.

4. Conclusion

FY 1989 represents a landmark year in fulfilling our commit-

ment to modernize our C31 capabilit1es. After years of planning,
desi~ning, developing, and now fielding, our C31 ~rogram is enter-
ing 1ts final and most critical stages. Congress s continued
support of this effort is essential if we are to complete the
rebuilding of our c3r systems.

249
H. THE NATO DEFENSE PROGRAM

The si~ning of an intermediate-range nuclear forces (INF)

agreement 1n December 1987 highlights the imfortance of continuing
our efforts to modernize and stren~then NATO s nuclear and conven-
tional forces. The United States 1S contributing to that effort
through strengthening its nuclear and general purpose forces and
participating in NATO-related force development programs. We are
support1ng the 1983 Montebello Decision to modernize theater
nuclear forces, and the 1984 Conventional Defense Improvements
program that addresses identified NATO critical deficiencies.
Taken collectively, the U.S. defense programs for NATO reflect our
continuing strong commitment to the maintenance of an effective
deterrent in the post-INF environment.

In 1983 NATO defense ministers agreed at Montebello to

modernize theater nuclear forces. Major programs stemming from
the Montebello Decision that have a d1rect bearing on the United
States include:

• Modernization of NATO's dual-capable aircraft and their

nuclear bombs;

• Development of a tactical air-to-surface missile to

replace a portion of the nuclear bombs delivered by U.S.
and allied aircraft;

• Development of a follow-on system to replace the aging

Lance missile employed with U.S. and allied forces; and

• Production of efficient modern nuclear artillery rounds.

Most of these systems are included in our FY 1989 Amended

Budget, as detailed in Chapters III. C. and F. All will be given
high priority as we review our defense plans and consult with our
NATO allies. As noted in Chapter III.F., we are proposing that
the Congress lift the current limitations on nuclear artillery
rounds.

Another important part of our NATO Defense Program is

Conventional Defense Improvements. In addition to our forward-
deployed forces in Europe, the majority of the land, sea, and air
forces in CONUS are avallable to reinforce Europe rapidly and
satisfy our NATO commitments. We must continue to modernize these
forces with new equipment to retain our technological edge on the

251
battlefield. The MIAI tank, F-15 fighter, and Aegis cruiser are
examples of current procurement programs which contribute to our
general purpose forces, while concurrently forming part of our
NATO commitment. Details on numerous ground, tactical air, and
naval programs that contribute to our NATO capabilities are also
covered in preceding chapters of Part III.

As we continue to modernize our current forces, we must look

ahead with research and development programs to enhance further
our capability to execute a flexible conventional response. We
are developing tactical reconnaissance RPVs and highly accurate
conventional cruise missiles capable of being launched from air,
sea, and land platforms to locate and strike critical targets deep
in Warsaw Pact territory. We will exploit conventional variants
of nuclear weapons, such as Tomahawk and Lance, to enhance our
deep-strike capabilities while reducing the threat of nuclear
escalation. Additionally, in FY 1989 we plan to be~in production
of Tacit Rainbow, a defense suppression cruise miss1le. It is our
intention to procure Tacit Rainbow in large numbers, in both air-
and ground-launch versions, to increase greatly our effectiveness
against enemy air defenses.

As part of the NATO Conventional Defense Improvement Program,

NATO military commanders have identified nine specific areas of
critical deficiency requiring special emphasis. These
deficiencies include: air defense; ground forces; mobilization;
reinforcement; sustainability; follow-on forces attack; electronic
warfare and command and control; and naval antisubmarine, antiair,
and amphibious capabilities. These deficiencies are being
addressed in spec1ally highlighted force goals assigned to each
NATO member. The United States has endeavored to set the example
for other nations by fully implementing the highlighted force
goals assigned to us. To meet these goals we must support
pro~rams such as POMCUS, airlift, and sealift to enable us to
ach1eve our goal of ten divisions in Europe ten days after
mobilization (M plus 10). We must continue to develop and procure
modern munitions such as AHRAAH, Phoenix, and third-generat10n
antitank weapons. Our ability to attack second-echelon Warsaw
Pact forces must be developed further utilizing systems like MLRS,
ATACMS, JSTARS, and new standoff air-to-ground missiles. In the
area of advanced cruise missile guidance! we are exploring several
innovative technologies that we hope to 1ncorporate in currently
produced weapons as soon as feasible. We need to remove the
restrictions on further development of ATACMS as a follow-on to
Lance. To control our air space and protect our aircraft we are
continuing to improve, develop, and f1eld modern air defense
systems such as FAAD and Patr10t. Our contributions to NATO
Infrastructure are providing hardened aircraft shelters and
essential facilities at co-located operating bases in Europe. In
addition, we are working with our NATO allies to develop a common
system for aircraft identification. We will continue to devote

252
special attention to our highli~hted force goals to ensure the
maintenance of a strong conventional defense capability in Europe.

253
A. THE STRATEGIC DEFENSE INITIATIVE

1. Introduction

The most significant threat to the safety and security of the

United States and our allies is the Soviet nuclear ballistic
missile force, which is increasing in both warhead numbers and
accuracy. In responding to this growin$ threat t President Rea~an
announced the Strate$ic Defense Initiat1ve (SDIJ in 1983. SDI s
purpose is to determ1ne the feasibility of a strategic defense
system capable of eliminating the threat posed by strategic
nuclear m1ssiles to the United States and our allies.

2. Progress

Since the SDI's inception, a series of technology developments

and experiments have underscored the potential for using advanced
technology to construct an effective strate$ic defense. In recent
months! we successfully demonstrated our ab1lity to intercept tar-
gets w1thin the atmosphere and in space. We also made sign1ficant
advances in several d1rected ener$y and sensor technologies! and
in system architecture and operat1ng concepts. Based on th1s
impressive progress, in mid-September the Defense Acquisition
Board (DAB) recommended that certain SDI technologies enter the
demonstration and validation phase of the defense acquisition
process. Several other promising SDI technologies are continuing
1n the concept definition phase.

The purpose of the demonstration and validation phase is to

evaluate -- through analysis, experimentation, and s1mulation --
the feasibility of critical elements of a potential Strategic
Defense System (SDS). In addition, all test and evaluation
activities planned for the demonstration and validation phase are
consistent with u.s. treaty obligations.

a. Phased Deployment

Each defensive tier of an SDS (boost, post-boost, mid-course,

and terminal) will consist of sensors, weapons, and battle man-
a$ement assets structured to en$age and destroy offensive bal-
l1stic missiles and reentry veh1cles in one or more phases of
their trajectory.

The phased deployment of an SDS is the most reasonable means

of achieving the level of defense contemplated by the President's

257
1983 directive. Using this approach, an SDS would be deployed
incrementally, with each phase contributing significantly to
deterring a Soviet nuclear attack on the United States and our
allies.

The phased deployment approach considers four key factors:

time, technology, defensive missions, and responsive threats. It
recognizes that some efforts and technologies will mature faster
than others. It accepts the fact that the deployment of a
defense, regardless of the first deployment date of its elements,
must take place over time. This approach anticipates that, as
other technologies mature and are deployed, they will improve the
capabilities of existing systems. They will also provide addi-
tional capability to perform new and more demanding missions,
including overcoming potential Soviet attempts to evade, deceive,
or defeat our defensive systems.

b. Phase I

Deploying the initial phase of an SDS will significantly

reduce the confidence of Soviet ~lanners that a ballistic m1ssile
attack on the United States and 1ts allies would succeed. The SDS
will do so by attacking ballistic missiles and their warheads in
flight. The SDS elements proposed for Phase I would be deployed
in two tiers, boost/post-boost and late mid-course.

We ant1c1pate the six elements listed below and shown 1n Chart

IV.A.! will form the Phase I SDS:

Battle Mana!lement I Command, Control, and Communications (BM I C3)

This element w1ll monitor and control the activities of the ele-
ments of an SDS. Information from all elements will be relayed to
the battle managers and processed; target assignments will then be
communicated to space- and ground-based weapons. This complex
communications system must assess the characteristics of a ballis-
tic missile attack rapidly and provide timely, reliable informa-
tion to the SDS' commander, who will direct the battle, and the
command ~tructure. Once a defense response has been determined,
the BM/C system must execute the response, assess it~ effective-
ness, and revise its response if necessary. The BM/C must be
able to withstand enemy jamming and the effects of nuclear
radiation.

Boost Surveillance and Tracking Systems (BSTS) -- BSTS will detect and
track attackin~ ICBMs and SLBMs during their boost -- or powered
-- phase of fl1ght. Once the BSTS senses a launch and tracks the
attacking missiles, the information will be relayed to the BM/C 3
system and other SDS elements. If an attacking MIRVed missile can

258
object and discriminate between reentrr vehicles! decoys! and
space debris. This trfcking and discr1mination 1nformat1on will
be relayed to the BM/C system and other SDS elements. The BM/C 3
system will then assign targets to the SBI or the exoatmospheric
reentry-vehicle interceptor subsystem (ERIS) to destroy the
incoming warheads.

Ground-Based Surveillance and Tracking System (GSTS) -- GSTS, also

known as the Probe, has three basic functions: search/
acquisition; track; and discrimination. Launched into space upon
warning of Soviet ICBM launch, the GSTS would track incoming RVs
in the missile's mid-course and earlr terminal trajectory phases;
this information will be used to ass1gn both ground- and space-
based interceptors to destroy the RVs. GSTS possesses the
capability to discriminate between RVs, penetration aids, and
space debris.

The Exoatmospheric Reentry Vehicle Interceptor Subsystem (ERIS) -- ERIS

is a ground-launched nonnuclear missile interceptor system that
will destroy attacking warheads during the mid-course phase.
Space and ground surveillance srstems must first discern between
warheads, decoys, penetration a1ds, and debris in space. This
information will be relayed to the BM/C3 systems, which will
process it and communicate target assi~nments to interceptors such
as the ERIS. The small ERIS vehicle w1ll destroy the attacking
warhead by colliding with it at an extremely high speed.

c. Advanced (Follow-on) Concepts

We recognized at the outset that, as effective as it might be

a~ainst the current or projected near-term Soviet ballistic
m1ssile threat, the Phase I system must be augmented progressively
by advanced technolo~y systems as they mature. Otherwise, we run
the risk of degradat10n of capability as the Soviets react with
certain countermeasures.

There are three types of follow-on possibilities which could

be pursued and must be retained in a robust, balanced SDI program:
• Advanced technology upgrades or "Planned Product Improve-
ments" (PPI) of the Phase I elements -- e.g., faster,
lighter interceptors, more capable senors, etc;

• Inclusion of new defense tiers -- for exam~le, a terminal

defense based upon the High Endo-atmospher1c Defense
Interceptor (HEDI) in combination with ground-based radar
and airborne optical sensors; and

260
 • Entirelr new advanced technology concepts to augment the
discrimination and intercept systems -- for example,
ground- or s¥ace-based particle beams for interactive mid-
course discrimination; hyper-velocity electromagnetic guns
with high-weight homing interceptors to achieve improved
coverage in the boost ¥hase; and even a last-ditch
terminal layer capability.

To function effectively, any future SDS must consist of a miX

of different, yet complementary weapons and sensor systems
deployed in tiers. For example, directed-energy interceptor sys-
tems will be complemented by kinetic energy interceptor systems;
surveillance and tracking sensors will rely on a variety of
sensing techniques -- infrared, ultraviolet, visible, or laser
radar. The SDS' complementary mix of sensors and defensive weapon
systems of differing types will $reatly complicate any Soviet
attempt to undermine our strategic defensive forces by developing
countermeasures against one, or even several, SDS elements. In
this way! our strategic defensive systems will be structured in a
manner similar to our nuclear deterrent triad of strategic offen-
sive forces -- ICBMs, SLBMs, and manned bombers. The use of the
complementary mix of SDS elements will enhance the SDS' overall
effectiveness as both a deterrent and a defensive system.

It is vital that the SDI program continue to maintain an

extensive, robust advanced technologies program. In fact, to the
degree that such demonstrations of advanced technologies are
credible and convincing, they may deter Soviet countermeasures and
encourage the Soviets to seek realistic offensive ballistic
missile reductions.

3. Conclusion

Should deterrence fail, the United States currently does not

have the ability to destroy enemy ballistic missiles after their
launch -- not a single one, even if launched by accident. This
situation must be changed. We and our allies have the ri$ht to
defend ourselves from attack. The Strategic Defense Initiative is
our best hope to protect our allies and ourselves from the specter
of nuclear destruction.

261
B. MILITARY SPACE OPERATIONS

1. Introduction

Even though the United States has used space for national
security purposes for over a ~eneration, the Congress and the
American public are now focuslng intensely on space activities due
to:

• Recent launch vehicle failures, and the concomitant loss

of their payloads, which have put tremendous strain on our
other space resources;

• Ongoing efforts to determine the feasibility of a

strategic defense system, the space-based portion of which
would require perhaps hundreds of space platforms, and a
very robust launch capability; and

• An ag~ressive and highly successful Soviet propaganda

campalgn that accuses the United States of the "mi1itari-
zatlon of outer space," when in fact the Soviets them-
selves have long used space predominantly for military
purposes, and are pursulng capabilities applicable to
space-based weapons.

These events have caused us to review critically our military

role in space, establish priorities and goals! and lmplement plans
and programs to achieve these goals. As outllned in the new
national space policy approved by the President earlier this year,
DoD's primary role in space is to stren~then the deterrent posture
of U.S. military forces and enhance thelr capability to fight and
win should deterrence fail. To do this, we must assure our
unimpeded access to space for all national security missions! par-
ticularly in light of the Soviet threat to our space activitles.
This chapter highlights those Soviet threats, describes our
military space plans and programs in support of national space
policy, and discusses our near- and mid-term future requirements.

2. The Soviet Military Space Threat

The Soviet military space program enjoys a high priority in

the overall Soviet defense program. Soviet military space doc-
trine holds that "mastery of space is an important prerequisite
for achieving victory in war." We assess that the Soviet's space
objectives for supporting this doctrine are: attaining and main-

263
their entire satellite network -- which supports a wide array of
military operations -- be destroyed, the Soviets can reconstitute
it completely in two to three months, providing the necessary
payloads are available. They are presently developing a heavy-
lift launch vehicle they call "Energiya," which will boost not
only their space shuttles 1 but also payloads of over 100,000 kilo-
grams (220,000 lbs.). ThiS will, by the turn of the century,
allow them to boost into space components to build large space
complexes that could be used for military purposes. Moreover, the
Soviets man year-round a space station where personnel conduct
military experiments, $iving them an opportunity to gain vast
amounts of space experience that could support military
operations.

For over 16 years, the Soviet Union has had a dedicated oper-
ational antisatellite weapon effective against satellites in low-
earth orbit. Other Soviet systems also have ASAT capabilities.
The nuclear-armed GALOSH ABM interceptor deployed around Moscow
has an inherent ASAT capability against low-altitude satellites.
In fact, a Soviet General Staff officer stated that the Soviet
Union had a direct-ascent ASAT capability that had been tested
against a point in space. Also, Soviet ground-based, high-energy
lasers may be capable of damaging some U.S. satellites, and the
Soviets are also technologically capable of conducting electronic
combat against U.S. space systems.

For the future, the Soviets are conducting research and devel-
opment on laser, particle beam, radio frequency, and kinetic
energy technologies that could be used for ASAT weapons meeting
their doctrinal requirement for space control. We may eventually
face an array of both earth- and space-based weapons that, in the
absence of a credible U.S. response, will place our space opera-
tions at risk. To counter the Soviet threat, we have established
space policy goals and programs that ensure our free and unimpeded
access to space.

3. U.S. Military Space Programs

a. Launch Capabilities

One of our most important space policy goals is to provide

assured access to space for all national security missions.
Achieving this goal requires adequate launch capacity and launch
support, with reserve or restoration capability in these areas,
plus redundancy in launch systems wherever feasible. As the
Congress and the American public are well aware, we cannot pre-
sently satisfy all of our launch requirements. The loss of the
Challenger shuttle, coupled with the untimely failure of two Titan

265
the road-mobile SS-25 and the rail-mobile SS-24, are now opera-
tional. While we can easily monitor fixed ICBM silos for arms
control verification and other purposes, mobile ICBMs pose a more
difficult problem. Second, the Soviets have become more adept and
more pervasive in their use of camoufla$e, concealment, and decep-
tion to prevent collection of accurate 1nformation by satellite
systems. With the Congress's support, we can improve our space
surveillance systems to meet these challenges. At the same time,
a new generation of early warning satellites will provide more
accurate and more complete early warning information. Our Milstar
communication satellites will ensure survivable command and
control of our strategic forces.

Space systems have shown tremendous promise for providing sup-

port to the tactical field commander as well. This development 1S
largelf attributable to new technology that permits direct
transm1ssion of information from satellites to comvact, mobile
terminals for data processing and display. A ship s captain, an
aircrew, or a soldier in the field equipped with such a terminal
could have near-real-time access to space systems for gathering
and communicating navigation, environmental, and other tactical
information. In the heat of battle, this information would aid
the commander in seeing above and through the "fog of war,"
thereby providing great advantages to our combat forces.

Our increasing reliance on space systems, however, raises the

possibility of their vulnerability. The greater our reliance on
space systems for deterrence and for operational capability, the
more attractive a tar$et they become for our adversaries, and the
more our capability m1ght be degraded by systems' failures.

c. Required Improvements

To deter attack on our space assets in the face of Soviet

advances, and to preserve our ability to operate effectively in
space, we must:

• Enhance our ground-based space surveillance network and

develop space-based sensors capable of near-real-time
monitoring of all potentially threatening objects in
space;

• Develop and deploy a comprehensive u.S. ASAT capability;

267
 • Develop, operate, and maintain space systems to support
and enhance the effectiveness of land, sea, and air forces
throughout the conflict spectrum;

• Continue our improvements to satellite systems surviv-

abilitr through both active and ~assive measures including
hardening, maneuverability, proliferation, on-orbit
spares, and other related measures;

• Investigate the requirements and infrastructure required

to reconstitute our essential space operations in wartime
by rapid launch of replacement or substitute satellites;
and

• Continue the ongoing space launch recovery effort J includ-

ing the development of an Advanced Launch System ~ALS),
leading to a more flexible, responsive launch capability
by the late-1990s that will also significantly reduce
launch costs.

4. Industry and Research and Development

To achieve our goals in space, we must strengthen our space-

related industrial base, and its associated research and develop-
ment activities. Our future space program is in the making now:
in colleges and universities where our scientists and technicians
are trained; and within government, industry, and academia, in
laboratories where research is being conducted that will foster
new space technologies. The quality of our people and of our
research and development program is crucial to the future success
of our space programs. Major new endeavors such as the National
Aerospace Plane! the Advanced Launch System, and the Strategic
Defense Initiative, will put great demands on existing resources.
To meet the demands, our space policy calls for a coherent program
encoura~ing technical trainin~ within the Armed Services! and
sponsoring basic research in industry and in our universities.

5. Conclusion

Our activities in space -- as well as the activities of other

nations -- will vitally affect our national security in the years
to come. In the three short decades since Sputnik first entered
orbit, we have seen and partici~ated in a phenomenal growth in the
use of s~ace for national security purposes. During this period,
u.s. military space assets have directly contributed to deterrence
and stability in our relations with potential adversaries. We

268
cannot afford to abandon the use of space or cede its control to
any other nation, if we are to preserve the common defense.

269
C. RESEARCH AND DEVELOPMENT

1. Introduction

Our ability to execute our defense strategy depends, in large

measure, upon our ability to provide our personnel with techno-
logically superior weapons and materiel. To continue enhancing
our deterrent capability, the United States must pursue a strong
research and development (R&D) program. The Soviets are continu-
ing to invest heavily in R&D, and are actively challenging our
lead in a number of key technologies. Thus, sustained, stable
investments in R&D are necessary if we are to maintain techno-
logical excellence and provide new means for meeting the Soviet
challenge.

This chapter outlines our Science and Technology programs,

Defense Advanced Research Projects Agency projects, and Defense
Nuclear Agency programs. The critically important role of a
comprehensive and realistic test and evaluation (T&E) effort is
also discussed.

2. Science and Technology Program

The principal objective of our Science and Technology (S&T)

program 1S to explore new ideas and technologies to prov1de the
sound technical foundation necessary to develop equipment and
systems that can deter or, if necessary, defeat our adversaries.
This section discusses selected areas within our S&T program.

a. Semiconductors

We continue making progress in semiconductor research and

development. Several Very High Speed Integrated Circuits (VHSIC)
have been tested in operational environments. The first opera-
tional installation of VHSIC occurred in the F-111D Signal
Transfer Unit, where a total of 102 integrated circuits were
replaced by one VHSIC chip. This increased the reliability of the
transfer unit by a factor of 125 while reducing its cost from
$24,000 to $2,000. Our Microwave/Millimeter Wave Integrated
Circuit (MIMIC) program is progressing, and our initial study
contracts will be completed in early 1988. We will initiate a
Semiconductor Manufacturing Technology pro~ram in FY 1988 to
address the erosion of our defense industr1al base semiconductor
manufacturing capability, and to reduce our dependence upon
foreign semiconductors. Our objective is to encourage American

271
industry to develop an indigenous, world-class semiconductor
manufacturing capability.

b. Aircraft Propulsion

The Integrated Hi~h Performance Turbine Engine Technology

(IHPTET) program was lnitiated as a coordinated industry-DoD-NASA
program wlth the goal of doubling aircraft propulsion system
capability by the turn of the century. The program's focus is on
higher-risk, higher-payoff approaches than we have previously
undertaken in both materials and propulsion technologies, along
with innovative gas turbine structural arrangements. IHPTET seeks
to maintain the u.s. preeminence in aircraft engine technology.

c. University Research Initiative

Our University Research Initiative (URI) is a vital element of

our long-standing commitment to university research r and to scien-
tific and engineering education. The program comprlses 80 multi-
discipline pro~ects with participation by some 700 graduate
students. URI s accomplishments include the controlled modifica-
tion of turbulent wakes for reducing aircraft drag, hi$her speed
transistors, and improved detection and image recognitlon at very
low light levels. The special capabilities of universities as R&D
centers and their unique role in scientific and engineering educa-
tion are essential ingredients in creating the long-term technical
options required for formulating future national security
strategies.

d. Balanced Technology Initiative

Our Balanced Technology Initiative (BTl) places emphasis on

developing technologies that have the potential of providing
si~niflcant advances in u.s. conventional force capabilities. The
inltiative focuses on smart weapons, armor/antiarmor technology,
command, control, and communications/battle management, high-power
microwaves, and related special technical areas. The BTl pro~ram
will provide the technology critical to our developing competltive
strategies vis-a-vis the Soviets, particularly for our
conventional forces.

e. Laser Countermeasures

The potential for increased enemy use of laser weapons has

accelerated our work on laser protection and hardening techniques
for U.S. personnel, sensors, optics, and structures. Our laser

272
protection program is directed toward developing the capability to
sustain our forces on the battlefield as these directed energy
weapons make their appearance. Our first priority is, of course,
to ¥rotect our personnel, followed by ¥rotection for sensors,
optics, and structures. The program will seek innovative
approaches to counter this serious laser threat.

f. Chemical Defense

As with laser countermeasures, an effective chemical defense

capability is necessary to deter war, or to fight and win if
deterrence fails. Products from our chemical defense program
include significantly better protective masks for groundcrews and
aircrews, a hand-held chemical agent monitor to assess contamina-
tion, and a lightweight vehicle decontamination system to improve
operational effectiveness. Exciting developments in standoff
chemical agent detection by frequency-agile lasers, generic detec-
tion of all agents using receptor site technology, and non-aqueous
decontamination of electronics and sensitive material, all promise
substantial improvements in our defense posture.

g. High Temperature Superconductivity

When cooled below a critical transition temperature, many

materials become superconducting; that is, their resistance to the
passa~e of electrical current effectively vanishes and they
exhibit remarkable ma~netic phenomena. Recent discoveries that
super-conductivity eXists in certain ceramic materials at much
higher temperatures than ¥reviously possible offers exciting
¥ossibilities for new military applications. These applications
include improved magnetic and electromagnetic sensors, faster
signal processing, more compact electric ship drives, more power-
ful electromagnetic launchers, and new magnetic energy storage
devices. Because of our long historr in superconductivity
research, we are in an excellent pOSition to exploit these recent
developments.

h. Medical and Life Sciences

Our Medical and Life Sciences program is using advanced bio-

medical research techniques to improve our readiness posture.
Recent achievements include:

• Storing red blood cells at -80 0 Fahrenheit, rendering them

usable for the treatment of combat casualties for up to
ten years;

273
 • Isolating "Stem cells" -- the progenitors of white blood
cells -- and their associated growth factors, permitting
further development of methods for rejuvenating bone
marrow injured by ionizing radiation; and

• Using computer modeling in designing new vaccines and

dru~s for preventing and treating infectious diseases 1n
mil1tary personnel.

I. Sensors

Sensors and their associated signal processing are the "eyes

and ears" for many of our systems. Progress in semiconductor R&D
and the development of advanced algorithms are providing the basis
for improving our force's capabilities. Projects under way
include: automatic target recognition; low-observable target
detection; new thermal detectors; and sonar, laser and microwave
radar arrays. These projects collectively will provide commanders
the ability to operate in future battles where weapon systems
operation may outpace human sensing and reaction.

J. National Aerospace Plane

The Joint DoD/NASA National Aerospace Plane (NASP) program

continues to make excellent progress. The current phase of the
program focuses on maturing the critical technologies and demon-
strating the major components required to build an experimental
flight vehicle {the X-30). To date, technical object1ves have
been met and progress in developing advanced materials, active
cooling devices, aerothermodynamic computational methods, ramjet/
scramjet engines, and airframe designs has been made. The NASP
program will help maintain the United States' leadership in
aerospace technology and lead to advanced atmospheric and space
transportation systems.

3. The Defense Advanced Research Projects

Agency

The Defense Advanced Research Projects Agency (DARPA) is our

central research facility, and is chartered with pursuing imagi-
native and innovative research ideas leading to systems with
significant military utility. While our S&T program supports our
operational forces by examining a broad range of technologies,
DARPA's programs focus on technology development, proof-of-concept

274
demonstrations of revolutionary approaches, and prototyping.
DARPA's investment strategy encourages assuming high risks when we
identify a technology that, upon maturity, promises to provide a
major advance in our military capability. Several representative
DARPA programs are discussed below.

a. Strategic Computing

Our Strategic Computing program is developing machine intelli-

gence technology and advanced parallel computer architecture.
While this DARPA-funded program serves the needs of the military
services, its goals also serve the commercial sector, and have the
potential to lead the United States into a much needed new cycle
of scientific, engineering, and economic activity in computer
science hardware and software. Dominance in computing and infor-
mation processing will playa pivotal role in determining the
political and economic strength of nations, and this DARPA program
will help to ensure that the United States retains its competitive
advantage.

b. Armor I Antiarmor

Our recent progress toward bringing about the phased elimi-

nation of all intermediate-range nuclear forces has focused
increased attention on the conventional arms imbalance in Europe.
Ever since the Truman Administration, the United States has relied
on nuclear weapons and hi~h-9uality conventional forces to offset
Soviet quantitative super10r1ty. Now, when we are relying more
than ever on our conventional deterrent, the Soviets are fielding
significantly more capable conventional weapon systems at
prodigious rates. For example, the Soviets have made significant
upgrades to the T-64 tank; have produced at least five new
versions of the T-72 tank; and deployed the latest T-80 tank in
significant numbers. A significant fraction of the 29,000 Soviet
tanks arrayed against NATO have been fitted for reactive armor,
which comprises explosive boxes attached to the tank's exterior
that deflect, to some degree, the explosive force of our defensive
antitank guided missiles such as the Tube-Launched, Optically
Tracked, Wire-Guided (TOW) and Dragon. These developments in one
crucial area of conventional forces remind us that nuclear arms
control agreements, no matter how desirable in the abstract, may
place a heavier burden on our conventional forces. Thus, to
continue deterring ag~ression, these forces must be provided with
technologically super10r equipment and be fielded in sufficient
strength.

. In December 1985, DARPA was directed to head a joint program

w1th the Army and Marines to examine the prospects for a signifi-
cant advance in armor and antiarmor technology. In the fall of

275
1987, we tested some advanced designs in chemical energy (shaped
charge) warheads, kinetic energy penetration, and armor protec-
tion. The first major "shootoff" evaluations are to be held this
fear at Los Alamos National Laboratory. We expect this research
1nto basic protection and penetration mechanisms will allow us to
understand them more fully, and help us achieve a modernization
rate competitive with the threat.

c. Lightsat

Lightsat is our new DARPA program whose goal is to provide

enduring spaceborne support to the battlefield commander in
conflicts where the use of our national space assets would be
denied due to Soviet attacks on our satellites, ground stations,
or both. Owing to the critical nature of this support, DARPA was
directed by the Congress to develop the technolog1es needed to
reconstitute some fraction of our current national command, con-
trol, communications, and intelligence (C 3 I) capabilities. DARPA
expects to demonstrate satellite systems that will be responsive
to the commander's needs, but which will be less complex and less
technically capable than the satellites they would replace during
war. DARPA is developing a five-year program that will concen-
trate initially on novel, low cost, transportable boosters, and
proceed later to new types of payloads specifically designed for
wartime requirements. Initial plans call for the first launch of
a Lightsat payload 18 to 24 months after program start. Later
payloads will incorporate increasingly complex technology, but
will remain within the guidelines of simpl1city, with a ~oal of
limiting booster and payload costs to less than $20 mill10n.

4. Test and Evaluation

We conduct realistic and thorough test and evaluation (T&E) at

the facilities shown in Chart IV.C.l. Althou~h our primary focus
has been to improve major weapon systems test1ng, new initiatives
to enhance the overall quality of our methodologf and resources
have moved forward under the leadership of the D1rector, Opera-
tional Test and Evaluation (DOT&E) and the Deputy Director,
Defense Research and Engineering, Test and Evaluation
(DDDR&E(T&E».

a. Systems Test and Evaluation

Our DDDR&E(T&E) weapons system assessment group has evaluated

and provided formal guidance and assessment on over 75 of the
major weapons systems designated for oversight. Our emphasis on
international T&E continues with the NATO Comparative Test and
Foreign Weapons Evaluation Programs. These efforts support the

276
T&E capabilities. This is especially true in the areas of space
systems testing and simulation, nuclear hardening, and hypersonic
vehicle development and testing. These areas are the focus of the
Space Systems Test Capabilities (SSTC) Study, Phase II, which will
validate our anticipated long-range test capability needs for the
21st century, and refine potential solutions to allow timely
programming of resources.

The Test and Evaluation Committee (TEC) of the Defense Acqui-

sition Board (DAB) has an ongoing T&E management and investment
initiative to improve the productivity and quality of the Major
Range Test Faci11ty Base (HRTFB) through better and more compre-
hensive long-range (15 year) planning of national test support
capabilities. An in-depth investigation of our current test
planning process has been completed, and recommendations to
1mprove the process are being considered. Improved planning is
expected to provide us with a more cost-effective corporate T&E
investment basis.

c. Special Emphasis

The FY 1987 National Defense Authorization Act recognized the

importance of fielding less vulnerable and more lethal conven-
tional weapon systems and munitions by requiring live fire testing
(LFT) on these systems prior to their entering full-scale produc-
tion. In response to this legislation, we established the
position of Assistant Deputy Director (Test and Evaluation/Live
Fire Testing), with 44 weapons systems initially identified by the
Services for LFT. The Joint Test and Evaluation (JT&E) program,
managed by DDDR&E(T&E), examines developing and deployed systems'
capability to perform their intended missions in a joint environ-
ment. Two JT&Es -- the Command, Control, Communications Counter-
measures, and the Identification, Friend, Foe, or Neutral -- will
be completed in FY 1989. New JT&E Programs, sponsored by the
DDDR&E(T&E), will focus on tests requiring quick response to
address issues of immediate interest to DoD and the Congress.

d. Operational Test and Evaluation

Operational test and evaluation (OT&E) activities continued

expanding in FY 1987. The office of the DOT&E maintained and
enhanced its oversight of over 180 defense acquisition programs.
We have launched an initiative to improve dramatically our ability
to conduct realistic OT&E. This initiative is designed to develop
a national capability to conduct realistic air defense electronic
combat in an AirLand Battle environment. The core program focuses
on obtaining air defense scenario-oriented mobile/transportable
instrumentation, threat systems, and threat simulators.

278
 5. Defense Nuclear Agency Programs
a. Goals and Major Responsibilities

The Defense Nuclear Agency (DNA) is responsible for determin-

ing nuclear weapons effects and developing the technology neces-
sary to ensure the survivability and effectiveness of our combat
forces during a nuclear conflict. DNA's evaluation of existing
strategic, tactical, and C3I systems' nuclear hardness -- the
ability to withstand various nuclear effects -- contributes
directly to reducing the risk of conflict. DNA sponsors a broad
ran~e of nuclear-related efforts to provide timely force sizing,
bas1ng, and weapons employment information for the Department of
Defense, the Services, and the CINCs. To support these objec-
tives, DNA coordinates all our nuclear weapons effects research
and plans, while coordinating and executing both above-ground
effects simulation and underground nuclear tests.

b. Importance of Underground Nuclear Weapons Effects

Testing

DNA's analysis and testing process 1S crucial in validating

the survivabil1ty of systems that we are procurin~ and deploying.
Although we have substantial experience in design1ng certain types
of nuclear-hardened systems, changing requirements dictate the
need to improve our systems. Experience has shown that extensive
use of analysis and nonnuclear s1mulation is not adequate to
establish the required levels of confidence in the nuclear hard-
ness of a new system. Chart IV.C.2. shows the history of nine
major nuclear weapons systems brought into the inventory during
the past 24 years, and illustrates that even after extensive
analrses and nonnuclear simulation tests, critical nuclear
surv1vability deficiencies were uncovered during underground
tests. Many of these defects would have caused mission failure.
Modifications were made to correct deficiencies and subseguent
experiments conducted to establish each system's survivab1lity.

In the event of a testing moratorium or a comprehensive test

ban, we would only be able to conduct nonnuclear simulation
experiments and computational analyses to examine weapons effec-
tiveness and survivability issues. These nonnuclear simulation
experiments would not provide us with an acceptable degree of
confidence that our systems would function as desired. In sum-
mary, at this time there are simply no realistic alternatives to
underground testing.

279
 6. Conclusion
The pro~rams and proje~ts highlighted above demonstrate our
strong comm1tment to ensur1ng a superior technological base for
our weapons systems. Our FY 1989 budget request has been struc-
tured to maintain the technological leadership necessary to
counter the Soviet threat. We must not back away from our R&D
commitments, which pay handsome dividends in preserving the common
defense.

281
D. MILITARY HEALTH CARE

1. Introduction

Our military health care system's primary responsibility is to

be medically ready in time of war to meet all requirements for
life-saving care. In the coming year, the deliberate effort we
started several fears ago to improve our medical readiness will
dominate our dec1sions concerning military medicine. Our annual
military medical budget of over $12 billion funds our efforts to
support our troops and our other beneficiaries, and to operate the
168 military hospitals and over 800 medical and dental clinics
worldwide.

2. Achievements During the Reagan

Administration

a. Medical Readiness

Following the tragic bombing of the Marine Corps barracks in

Beirut in October 1983, we identified shortcomings in our medical
readiness capability and redressed them in these ways:

• We appointed a full-time Command Surgeon to direct tri-

SerV1ce medical operations in the European Command.

• We established a single medical logistics manager for

medical materiel in Europe to improve medical logistics
support for both peacetime operations and wartime
contingencies.

• We developed and put into operation in 1987 the Deployable

Medical Systems (DEPMEDS) program, which existed as only a
concept in 1982. DEPMEDS comprises a building block
system of functional medical modules for use by all
Service hospitals from the most forward to the most rear-
ward edges of a theater of operations. All Services will
now be using the same medical equipment, thereby improving
medical support for combat operations and enhancing
medical log1stics support.

283
 • We identified and brought together in a comprehensive and
dynamic plan the methods to aC9uire all med1cal resources
required to support our operat1ng forces. This plan, the
Department of Defense Med1cal Readiness Strategic Plan,
protects the future of military medicine and the delivery
of health care services as we design for war and modify
for peace.

• The United States Navy hospital ship MERCY completed a

medical training and human1tarian assistance m1ssion to
the Republic of the Philippines in July 1987. MERCY
visited seven Philippine ports where over 62,000 patients
were treated, includ1ng 848 major surgical cases.

One of our most challenging tasks is redirecting the specialty

mix of our medical personnel to match more closely the specialty
skills most needed 1n wartime. This task involves intense efforts
to recruit, train, and retain on active duty the medical personnel
who can best assist with the large surgical workload expected in
wartime. The vast majority of medical people needed in wartime,
however, will be supplied by the reserves. Significant improve-
ments have been ach1eved over the last five years in recru1ting
and retaining health professionals. Since 1981, staffing levels
for Ready Reserve health professionals have increased by 78 per-
cent for physicians and by 68 percent for nurses. Despite this
progress, however, if a general war started today we would be
short over 7,000 physicians and 31,000 nurses. Individuals
possessing needed wartime specialty skills are being recruited
1nto the reserves through a combination of stipend and loan repay-
ment programs which, when fully implemented, w111 attract the
kinds of specialties we need during wartime.

b. Quality of Care

Preparing for war has not detracted from the importance we

place on providing the highest quality care in peacetime. Our
efforts to improve the quality of health care for our benefici-
aries continue to expand.

We now have formally established internal quality assurance

procedures, and have developed a unique external civ1lian peer
review process. The American Medical Peer Review Associat10n
observed last fall that the success of our pro~ram "may well
signal the shape and substance of peer review 1n the future."
Indeed, we continue to compare favorably to the civilian sector 1n
medical malpractice claims filed. In 1986% the rate of medical
malpractice claims filed by DoD beneficiar1es was 6.6 per 100

284
physicians, as compared to a civilian rate of approximately 16
claims filed per 100 physicians.

c. Drug Testing Program I Anti-Smoking Campaign

Due to major improvements during the past several years, the

military drug testing program is now the nationally reco~nized
model. Rigorous laboratory and dru~ analysis certificatlon
procedures, forensic specimen handllng procedures, and regular
quality control laboratory inspections have contributed to the
legal and scientific supportabllity of all results. Our progress
is significant: all signs point to a drop in use of illicit drugs
in the military.

Our health promotion efforts extend beyond decreasing the

incidence of drug abuse in our military personnel. In 1986, an
intense anti-smoking campaign was begun throughout the department.
Preliminary results from Service-conducted surveys indicate that a
decrease in tobacco consumption has occurred, as well as a
decrease in the sale of tobacco products on military bases.

In addition to our drug, alcohol, and tobacco campaigns, our

health promotion program involves a comprehensive effort designed
to improve personnel readiness and reduce medical care costs
through increased attention to our members' life style behaviors
in the areas of physical fitness, nutrition, stress management,
and high blood pressure control.

d. Human Immunodeficiency Virus and AIDS Infection

The AIDS outbreak poses unique problems for our military

health care system. The increased potential for military person-
nel to be exposed to severe infectious diseases when deployed
overseas poses an obvious, perhaps fatal hazard to individuals
with a disorder of the immune system. In addition, we must
maintain the reliability of our buddy-based blood bank so that
soldiers can rely on others in their unit for blood transfusions
required during contingencies. Our detailed policy prohibits
individuals with serologic evidence of the Human Immunodeficiency
Virus (HrV) infection from being appointed or enlisting in the
military service. Active duty and reserve component personnel are
also screened. The rate of HIV positives among recrult applicants
(1.5 per 1,000 tested) virtually parallels the active-duty rate
(1.6 per 1,000). Active-dutl personnel confirmed to have sero-
logic evidence of HIV infection receive extensive evaluation,
psychological support, and treatment if necessary, and are medi-
cally separated or retired if disabled. We are also conducting an
extensive education program and work in close cooperation with the

285
National Institutes of Health and Centers for Disease Control on
HIV/AIDS research and treatment.

e. Efforts to Reform the Civilian Health and Medical

Program of the Uniformed Services

Among the greatest challenges facing the Military Health

Services System is reform of the Civilian Health and Medical
Program of the Uniformed Services (CHAHPUS). DoD has awarded to a
consortium of prominent health care companies and not-for-profit
hospitals a contract of unprecedented nature and scope for
improved medical programs. This contract, worth potentially $3
billion over five years, will provide improved medical benefits
for military families, case management of their health care, and
innovative financial incentives to hold down taxpayer costs in two
states, California and Hawaii. It implements the CHAHPUS Reform
Initiative demonstration project under development for the past
two years.
o

Another major accomplishment in CHAHPUS cost containment is

our implementation last October of a new Diagnosis Related Group
(DRG)-based system of paying for most hospital care purchased
under the CHAHPUS program. Before implementation of the DRG-based
system, CHAHPUS was purchasing hospital services by paying billed
charges -- a method of payment abandoned several years ago by the
Medicare pro~ram as being too costly. Now our payment amounts are
set prospect1vely. By grouping our payments according to the
average cost to the hospital for each of over 470 diagnoses, as
adapted from the Medicare system, we expect to cut government
payments by approximately $150 million 1n FY 1988 and by some $1.5
billion across the Five-Year Defense Program (FYDP). For our
beneficiaries, cost-sharing amounts will be reduced by almost one-
third under the new DRG payment system.

We have also implemented a new Military-Civilian Partnership

Program allowin~ CHAHPUS-authorized providers to offer care on the
premises of mil1tarf treatment facil1ties. This new program
represents a signif1cant opportunity for cost savings by providing
more care in less expensive military settings while increasing the
availability of serV1ces in military treatment facilities.

In our effort to enhance services to our beneficiaries, we

have established a voluntary enrollment dental insurance program
for dependents of active-duty members, with the government paying
60 percent of the insurance premium. This program began on
August 1, 1987, and approximately 86 percent of eligible persons
have enrolled.

286
 f. Strengthening Management of the Military Health
Care System

We take great pride in the fact that in 1987 we began

operating the first Joint Military Medical Command (JMMC) in San
Antonio, Texas. As a part of this joint command, a new facility
with a massive ambulatory care capability will replace the Brooke
Army Medical Center (BAMC) hospital. This facility will be
constructed at a cost of some $122 million less than the
replacement hospital originally planned before implementation of
the joint command concept. The BAMC replacement facility will be
a un1que, surgically and diagnostically intense teaching hospital
that will contain state-of-the-art facilities normally seen only
in hospitals at least twice its size. The San Antonio JMMC, with
its combined medical resources, is designed to provide more
flexibility to meet the health care needs of e11gible
beneficiaries in that metropolitan area. A second joint operation
is being planned in the Delaware Valley Area. We w1ll continue to
establish joint medical commands wherever conditions lend
themselves to such an arrangement.

We are also continuing to encourage the sharing of medical

facilities and personnel, not only among the Services, but with
the Veterans Administration. At the start of FY 1987, a total of
388 sites participated in the DoD/VA sharin~ program, a 54 percent
increase over FY 1986. These efforts, comb1ned with thorough and
vigorous reviews of all medical resource requirements, will assure
that our finite resources are used to provide excellent, cost-
effective medical care.

Another major management improvement is the congressionally

directed effort to use DRGs in allocating resources to our mi11-
tary hospitals. Once DRGs are in place, they will serve as a
management tool to ensure that our medical dollars are allocated
based on the quantity of specifically identified cases treated
rather than on estimated workload. We have adopted a phased
approach for DRG-based allocations and expect to have the system
operational at the start of FY 1989.

g. Medical Construction Program

Last year we reported on the establishment of the Defense

Medical Facilities Office (DMFO), consolidating the medical
construction programs of the three Services. The newly formed
DMFO has now created a system for selecting and prioritizing

287
medical construction projects worldwide to ensure that our most
urgent requirements are met.

The problem looming before us now is that of obtaining funding

for badly needed overseas projects in support of medical readi-
ness. Overseas hospital projects at Echternach, Luxembourg; Clark
Air Base, the Philippines; and Naples, Italy must not be delayed
any longer. Improvements are desperately needed at these isolated
locations to ensure the care of our Service personnel and their
families is not compromised by unsafe and outmoded facilities, and
to provide the requ1red capability to meet wartime medical mis-
sions. These overseas projects, with their related readiness
implications, are our h1ghest medical construction prioritr. I
urge the Congress to make these projects its highest prior1ty as
well. Let us not wait until the Un1ted States needs these faci-
lities to treat incomin~ wounded from an overseas conflict to
recognize that our hosp1tals are in poor condition and should have
been replaced long ago.

h. Strengthened Central Management of Medical

Information Systems

As in the case of medical readiness, we found our medical

information systems' capability sorely lacking. The Defense
Medical Systems Support Center was established to ensure that
health services information systems design and operation were
integrated across the three Military Departments. Finally, our
lon~-recognized need for standard, inte~rated, and modern auto-
mat10n support for our hospitals and cl1nics will be realized
through the deployment of the Composite Health Care System (CHCS).
Health care providers spend too much time searching for and
deciphering clinical information. The CHCS will return this time
to doctors, nurses, and other health personnel, freeing them to
give more direct patient care.

3. Conclusion

This Administration is proud of its record in effecting

significant improvements in both wartime medical readiness and
peacetime medical care. In the coming year, these efforts will
continue. We look to the final months of the Administration as a
time to ensure that our programs and initiatives improve and
mature.

288
E. ANTI-DRUG PROGRAMS

1. Introduction

The Department of Defense (DoD) remains committed to the

President's program to end drug abuse in America. We are devel-
oping new programs to fi$ht drug abuse in the DoD community, and
are assist1ng local and 1nternational law enforcement agencies
involved in eradicating or interdicting illegal drugs.

2. Drug-Free Workplaces

The Department of Defense will begin drug testing ?f its.

civilian work force during the second quarter of 1988 1n conJunc-
tion with other Federal Departments and Agencies. Our efforts to
begin DoD-wide testing last year were delayed by additional con-
gressional requirements in the 1987 Supplemental Appropriations
Bill. Each Service and DoD Component may randomly test civilians
occupying designated positions concerned with safety or national
secur1ty; these posit10ns comprise approximately 15 percent of DoD
civilian work force positions. The Services and DoD Components
may also test individuals applying for jobs in these pos1tions,
and individuals involved in safety accidents or reasonably sus-
pected of drug abuse. The Services and DoD Components will deter-
mine the number of positions designated for testing, and testing
frequency. A major goal of our drug-free workplace program is to
help our civilian personnel overcome drug dependency when it is
discovered.

3. Increased Public Awareness and Prevention

Durin~ the past year, we have increased considerably the DoD

community s awareness of dru$ abuses's negative effects on the
individual, and on productiv1ty and safety in the workplace. Our
military recruiters have been charged with promoting a drug-free
America in their frequent contacts with youth, through recruiter
interviews, videos, posters l and pamphlets. Each military service
has also developed other un1que programs to promote a drug-free
America.

We are also responsible for educating over 190,000 DoD

dependent children. Several new programs have been started to
inform these children about the dangers of illegal drug use. A
new education prevention program modeled after DARE (Drug Abuse
Resistance Education), a joint project of the Los Angeles Police
Department and the Los Angeles Unified School District, is being

289
piloted in the DoD schools. This program uses military policemen
as instructors in drug abuse prevention in elementary and middle
schools. In addition to the DARE program, all DoD schools are
participating in the nationwide federal campaign to ensure that
DoD schools are free from drugs.

We have also extended a special challenge to the citizen-

soldiers of our National Guard and Reserve. Each has been asked
to carry the President's message on drug abuse eradication into
their workplace, schools, and communities.

4. Strengthened law Enforcement

FY 1987 reflected another step in the trend of ever-increasing

DoD support to the nation's "War on Drugs." The Military Services
provided over 17,000 hours of aerial surveillance and the Navy
provided 2,512 ship days with embarked Coast Guard Law Enforcement
Detachments (LEDETS) in support of Operation "Hat Trick." This
operation, coordinated by the Office of the Vice President,
combines federal, state, and local law enforcement efforts to
interdict drug smugglers. Additionally, we have furnished to law
enforcement agencies mobile radar and ground sensor support;
trainin~; expert advice on procurement and architecture of com-
municatlons equipment and command, control, communications, and
intelligence (C 3 I) facilities; and drug enforcement-related infor-
mation collected during military operations. Currently, more than
$360 million of DoD equipment has been loaned, procured, or
provided to drug law enforcement authorities for anti-drug use.
Military support to civilian authorities responsible for drug law
enforcement enhances their anti-drug capabi1lty, and abides by the
legal distinction specified by Title 10 of the U.S. Code, Sections
371-379, "Military Cooperation with Civilian Law Enforcement
Officia1s."

5. Improved International Cooperation

Many governments have become acutely aware of the growing

threat of drug abuse and drug traffiCking to national and regional
stability. In response to requests for assistance during FY 1987,
DoD! in cooperation with the Departments of State and Justice,
actlve1y supported international efforts to eradicate and inter-
dict illicit drug commodities, precursor chemicals, and narcotic
consumab1es. Military assistance to foreign governments in Latin
America, the Near East, South Asia, and the Pacific included
training, loan of equipment, intelligence, and logistics in
support of anti-narcotIcs operations. For example, in the
Bahamas, U.S. Army helicopter crews provided transportation that
permitted the quiCk insertion of Bahamanian Strike Force personnel
Into drug cache sites. Six military helicopters were loaned to

290
the State Department for use by the Bolivian Air Force as a
follow-on to U.S. military assistance in the very successful 1986
"BLAST FURNACE" operation. The helicopters support various anti-
narcotics missions. Additionally, varIOUS milItary advisors and
training teams supported programs to improve the capability of
foreign countries to counter drug traffIcking more effectively.

6. Conclusion

We are proud of our substantial role in President Reagan's war

on illegal drugs. By seriously undermining the fabric of society,
drug abuse degrades the manpower pool from which we draw DoD mili-
tary and civilian personnel. With the support of the Congress, we
will continue our role in the campaign to prevent and eliminate
the corrosive influences of illegal drugs In our society.

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 GLOSSARY

AAW: Antiair Warfare

AAWS: Airborne Adverse Weather Weapons Systems
ABM: Antiballistic Missile
AC: Active Component
ACCS: Army Command and Control System
ACM: Advanced Cruise Missile
ACHR: Air Combat Maneuvering Range
ACIP: Aviation Career Incentive Pay
Ada: DoD Computer Programming Language
ADATS: Air Defense/Antitank System
ADCAP: Advanced Ca~ability (torpedo)
ADDS: Army Data Distribution System
ADI: Air Defense Initiative
ADP: Automated Data Processing
AE: Assault Echelon
AFV: Armored Family of Vehicles
AGR: Active Guard and Reserve
AID: Agency for International Development
AIDS: Acquired Immuno-Deficiency Syndrome
AIM: Air-Intercept Missile
AIS: Automated Information System
ALCM: Air-Launched Cruise Missile
ALHV: Air-Launched Miniature Vehicle
ALS: Advanced Launch System
AHRAAH: Advanced Medium-Range Air-to-Air Missile
ANG: Air National Guard
ANZUS: Australia-New Zealand-United States (Treaty)
AOCP: Aviation Officer Continuation Pay
AOE: Multipurpose Stores Ship
ASAT: Antisatellite
ASDS: Advanced SCM Delivery System
ASW: Antisubmarine Warfare
ATA: Advanced Tactical Aircraft
ATACMS: Army Tactical Missile System
ATAS: Air-to-Air Stinger
ATARS: Advanced Tactical Air Reconnaissance System
ATB: Advanced Technology Bomber
ATF: Advanced Tactical Fighter
ATH: Antitactical Missile
ATSD (10): Assistant to the Secretary of Defense (Intelligence
Oversight)
AUTOVON: Automatic Voice Network
AWACS: Airborne Warning and Control System
BA: Budget Authority
BAKC: Brooke Army Medical Center
BFV: Bradley Fighting Vehicle
BM/C3: Battle Mana~ement/Command, Control, and Communications
BHEWS: Ballistic Missile Early Warning System
BSTS: Boost Surveillance and Tracking System

319
BTl: Balanced Technology Initiative
C3 : Command, Control, and Communications
C3CM: Command, Control, and Communications Countermeasures
C3 I: Command, Control, Communications, and Intelligence
CBR: Chemical, Biological, Radiological
COl: Conventional Defense Improvements
CHAMPUS: Civilian Health and Med1cal Program of the Uniformed
Services
CINC: Commander in Chief
COCOM: Coordinating Committee for Multilateral Export Controls
COMSEC: Communications Security
CONUS: Continental United States
CRAP: Civil Reserve Air Fleet
CS: Competitive Strategies
CSI: Competitive Strategies Initiative
CSOC: Consolidated Space Operations Center
CV: Aircraft Carrier
CVN: Aircraft Carrier, Nuclear Powered
CY: Calendar Year or Current Year
DAB: Defense Acquisition Board
DARE: Drug Abuse Resistance Education
DARPA: Defense Advanced Research Projects Agency
DCAA: Defense Contract Audit Agency
DCIMI: Defense Council on Integrity and Management Improvement
DDDR&E(T&E): Deputy Director, Defense Research, Engineering, Test, and
Evaluation
DOG: Guided Missile Destroyer
DON: Defense Data Network
DDS: Dry Deck Shelters
DDT&E: Director, Defense Test and Evaluation
DEPMEDS: Deployable Medical Systems
DEW: Directed-Energy Weapons, Distant Early Warning
DIA: Defense Intelli~ence Agency
DlNET: Defense Industr1al Network
DLA: Defense Logistics Agency
DMA: Defense Mapping Agency
DNA: Defense Nuclear Agency
000: Department of Defense
DoE: Department of Energy
OOT&E: Director, Operational Test and Evaluation
DPC: Defense Planning Committee
ORB: Defense Resources Board
DRG: Diagnosis Related Group
DSB: Defense Science Board
DSCS: Defense Satellite Communications System
DSN: Defense Switched Network
DST: Defense and Space Talks
DTSA: Defense Technology Security Administration
EC: Electronic Combat
ECI: Employment Cost Index
ECM: Electronic Countermeasures

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ELF: Extremely Low Frequency
ELV: Expendable Launch Vehicles
EHP: Electromagnetic Pulse
ENSCE: Enemy Situation Correlation Element
ERIS: Exoatmospheric Reentry Vehicle Interceptor System
ESF: Economic Support Fund
ESM: Electronic Support Measures
EW: Electronic Warfare
FAADS: Forward-Area Air Defense System
FFG: Guided Missile Frigate
FLOT: Forward Line of Troops
FMS: Foreign Military Sales
FMSCR: Foreign Military Sales Credit (Financing)
FOFA: Follow-On Forces Attack
FORSCOM Forces Command
FY: Fiscal Year
FYDP: Five-Year Defense Program
GAO: General Accounting Office
GLCM: Ground-Launched Cruise Missile
GNP: Gross National Product
GOCO: Government-Owned Contractor Operated
GPS: Global Positionin$ System
G-R-H: Gramm-Rudman-Hol11ngs
GS: General Schedule
GSTS: Ground-Based Surveillance and Tracking System
GWEN: Ground Wave Emergency Network
HARM: High-Speed Antiradiation Missile
HCS: Helicopter Combat Support Special Squadron
HEDI: High Endo-Atmospheric Defense
HHG: Household Goods
HIV: Human Immunodeficiency Virus
HNS: Host Nation Support
ICBM: Intercontinental Ballistic Missile
IFF: Identification Friend or Foe
IG: Inspector General
IHPTET: Inte~rated High Performance Turbine Engine Technology
IIR: Ima~1ng Infrared
lHA: Ind1vidual Mobilization Augmentees
lHET: International Military Education and Training
IMC: Internal Management Control
IMIP: Industrial Modernization Incentives Program
INDCONS: Industrial Alert Conditions
INF: Intermediate-Range Nuclear Forces
INFOSEC: Information Security
ING: Inactive National Guard
IR: Infrared
IRR: Individual Ready Reserve
IRS: Internal Revenue Service
IUSS: Integrated Undersea Surveillance System

321
JCS: Joint Chiefs of Staff
JMMC: Joint Military Medical Command
JSTARS: Joint Surveillance/Target Attack Radar System
JRMB: Joint Requirements and Management Board
JROC: Joint Requirements Oversight Council
JT&E: Joint Test and Evaluation
JTFHE: Joint Task Force Middle East
JTIDS: Joint Tactical Information Distribution System
KEW: Kinetic Energy Weapons
LAMP: Land-Air Maritime Patrol
LANTIRN: Low-Altitude Navigation and Targeting Infrared System for
Night
LCAC: Landing Craft, Air Cushion
LDCs: Lesser Developed Countries
LEDET: Law Enforcement Detachment
LF: Low Frequency
LHX: Light Helicopter Experimental
LIC: Low-Intensity Conflict
LOS-F-H Line-of-Sight Forward-Heavy
LOS-R Line-of-Sight Rear
LRAACA: Long-Range Air ASW Capability Aircraft
LRINF: Longer Range Intermediate-Range Nuclear Forces
LVT: Assault Amphibian Vehicle
MAB: Marine Amphibious Brigade
HAD: Mutual Assured Destruction
MAF: Marine Amphibious Force
HAP: Military Assistance Program
HAW: Marine Aircraft Wing
MIDEASTFOR: Middle East Force
MiG: Mikoyan-Gurevich <Soviet aircraft)
MILCON: Military Construction
Milstar: Military Strategic and Tactical Relay System
MIMIC: Microwave/Millimeter Wave Integrated Circuit
MIP: Model Installation Program, Management Improvement Plan
MIRV: Multiple Independently-Targetable Reentry Vehicle
HLRS: Multiple-Launch Rocket System
HHP: Master Mobilization Plan
MOA: Memorandum of Agreement
MOU: Memorandum of Understandin~
HPS: Maritime Prepositioning Ship
HPTS: Manpower, Personnel, Training, and Safety
HRT: Miniature Receive Terminal
HRTFB: Major Range Test Facility Base
MSE: Mobile Subscriber Equipment
MYP: Multiyear Procurement
HWR: Morale, Welfare, and Recreation
NASP: National Aerospace Plane
NATO: North Atlantic Treaty Or~anization
Navstar: Navigation Satellite Timing and Ranging
NCA: National Command Authorities

322
NCMS: National Center for Manufacturing Sciences
NEACP: National Emer$ency Airborne Command Post
NFIP: National Foreign Intelligence Program
NLOS: Non-Line-of-Sight System
NHCC: National Military Command Center
NORAD: North American Aerospace Defense Command
NPG: Nuclear Planning Group
NRRCs: Nuclear Risk Reduction Centers
NSA: National Security Agency
NSDD: National Security Decision Directive
NSNF: Nonstrategic Nuclear Forces
NWS: North Warning System
OCONUS: Outside of the Continental United States
O&H: Operation and Maintenance
OJCS: Organization of the Joint Chiefs of Staff
OHB: Office of Management and Budget
OPTEHPO: Operating Tempo
OSD: Office of the Secretary of Defense
OT&E: Operational Test and Evaluation
OTH: Over-the-Horizon
OTH-B: Over-the-Horizon Backscatter (radar)
PAVE PAWS: Phased-Array Radars
PBA: Production Base Analyses
PCS: Permanent Change of Station
PECI: Productivity Enhancing Capital Investment
PGM: Precision Guided Munitions
PIF: Productivity Investment Fund
PIOB: President's Intelli$ence Oversight Board
PKO: Peacekeeping Operations
PLRS: Position, Location, and Reporting System
POL: Petroleum, Oil, and Lubricants
POMCUS: Prepositioning of Materiel Configured to Unit Sets
P&Q: Productivity and Quality Team
PPBS: Planning, Programming, and Budgeting System
PPI: Planned Product Improvements
PRC: Peoples Republic of China
R&D: Research and Development
RC: Reserve Component
RDT&E: Research, Development, Test, and Evaluation
REFORGER: Return of Forces to Germany
ROK: Republic of Korea
RO/RO: Roll-on/Roll-off
ROTHR: Relocatable Over-the-Horizon Radar
RPV: Remotely Piloted Vehicle
RRF: Ready Reserve Force
RV: Reentry Vehicles
S&T: Science and technology
SAC: Strategic Air Command
SADARH: Search and Destroy Armor

323
SALT: Strategic Arms Limitation Treaty, Strategic Arms
Limitations Talks
SAM: Surface-to-Air-Missile, Sea Air Mariner
SASC: Senate Armed Services Committee
SATKA: Surveillance, Acquisition, Tracking, and Kill Assessment
SBI: Space-Based Interceptor
SDI: Strategic Defense Initiative
SDIO: Strategic Defense Initiative Organization
SDS: Strategic Defense System
SEAL: Sea-Air-Land
SEMATECH: Semiconductor Manufacturing Technology Institute
SFS: Surface Effect Fast Sealift
SHORAD C2 : Short-Range Air Defense Command and Control
SICBM: Small ICBM
SINCGARS: Single-Channel Ground and Airborne System
SINCGARS-V: Single-Channel Ground and Airborne System, VHF
SLBM: Submarine-Launched Ballistic Missile
SLCM: Submarine-Launched Cruise Missile
SLEP: Service Life Extension Program
SLKT: Survivability, Lethality, and Key Technologies
SM: Standard Missile
SLOC: Sea Line of Communications
SNA: Soviet Naval Aviation
SNF: Short-Range Nuclear Forces
SOF: Special Operations Forces
SRAM: Short-Range Attack Missile
SSBN: Ballistic Missile Submarine, Nuclear-Powered
SSGN: Cruise Missile Attack Submarine, Nuclear-Powered
SSN: Attack Submarine, Nuclear-Powered
SSTC: Space Systems Test Capabilities
SSTS: Space-Based Surveillance and Tracking System
START: Strategic Arms Reduction Talks
Su: Sukhoy (aircraft)
SWA: Southwest Asia
SWCM: Special Warfare Craft, Medium
SWS: Special Warfare Systems
T&E: Test and Evaluation
TEC: Test and Evaluation Committee
TACS: Auxiliary Crane Ship
TASM: Tactical Air-to-Surface Missile
TEC: Test and Evaluation Committee
TFW: Tactical Fighter Wing
TGSM: Terminally Guided Submunitions
TIARA: Tactical Intelligence and Related Activities
TLAM: Tomahawk Land Attack Missile
TOA: Total Obligational Authority
TOW: Tube-Launched, Optically Tracked, Wire-Guided (antitank
missile)
TRI-TAC: Joint Tactical Communications Program
TRSS: Tactical Remote Sensor System
UHF: Ultrahi~h Frequency
URI: University Research Initiative

324
USCENTCOM: United States Central Command
USCINCCENT: United States Commander in Chief, Central Command
USCINCEUR: United States Commander in Chief, Europe
USCINCLANT: United States Commander in Chief, Atlantic Command
USCINCNORAD United States Commander in Chief, North American
Aerospace Defense Command
USCINCPAC: United States Commander in Chief, Pacific Command
USCINCSO: United States Commander in Chief, Southern Command
USCINCSPACE: United States Commander in Chief, Space
USCINCSOC: United States Commander in Chief, Special Operations
Command
USCINCSOUTH: United States Commander in Chief, Southern Command
USCINCTRANS: United States Commander in Chief, Transportation Command
USD (A): Under Secretary of Defense (Acquisition)
USD (p) Under Secretary of Defense (Policy)
USSOCOM: United States Special Operations Command
USSR: Union of Soviet Socialist Republics
USSOUTHCOM: United States Southern Command
USTRANSCOM: United States Transportation Command
VA: Veterans Administration
VE: Value Engineering
VHA: Variable Housing Allowance
VHF: Very High Frequency
VHSIC: Very High Speed Integrated Circuit
VLF: Very Low Frequency
VLS: Vertical Launch System
VLSI: Very Large Scale Integration
V/STOL: Vertical/Short Take-Off and Landing
WARMAPS; Wartime Manpower Planning System
WHNS: Wartime Host Nation Support
WIMS: Worldwide Intratheater Mobility Study
WIS: WWMCCS Information Systems
WWMCCS: Worldwide Military Command and Control System
WTVD: Western Theater of Military Operations (Soviet Term)

325