The near record-setting Pentagon budget of $379 billion that President Bush sent to Congress this year is designed primarily to help the nation's armed forces press the war on terrorism, to bolster homeland security, and to begin transforming the U.S. defense strategy and force structure.

"I've asked Congress for a one-year increase of more than $48 billion for national defense--the largest increase in a generation," the president said.

Not all of the increase will be used for the antiterrorist campaign or for transforming the military for the 21st century. Some $14 billion will pay for a 4.1 percent pay raise for active-duty personnel and health care for military retirees age 65 and older; another $6.7 billion is requested to cover the cost of overruns on current programs. In addition, a total of $10 billion will be held in a contingency fund for the war on terrorism, an amount that almost certainly will be needed as the drive against al Qaeda and Taliban forces continues and, probably, expands to other areas.

The Pentagon estimates that $9.4 billion of the total fiscal year 2003 budget increase will be used for antiterrorism operations in one way or another. Some $2.7 billion will be the price tag for protecting U.S. forces and bases at home and abroad. Another $1.2 billion will be spent for continued combat air patrols over U.S. cities, $500 million for the increased production of precision munitions, and $800 million to provide more unmanned aerial vehicles (UAVs), tankers, and gunships.

Superlative Dinosaurs

There has been much speculation by defense officials and think-tank analysts over the last year or so about the need to "transform" the armed services from the post-Cold War posture of the last 10 years to a lighter, more lethal, and more agile rapid-response force. There were leaks from a study panel, appointed by Defense Secretary Donald H. Rumsfeld, that one of the three high-cost tactical aircraft now programmed--the Air Force F-22 Raptor, the all-service Joint Strike Fighter, or the Navy's F/A-18E/F Super Hornet strike fighter--would be canceled. Other leaks suggested that the Navy's aircraft carriers were considered by some panel members to be military "dinosaurs" that had reached the end of the line, insofar as their military usefulness was concerned. The 11 September terrorist attacks changed all that.

The new budget includes funds for all three aircraft programs: $4.6 billion for 23 F-22s, $3.1 billion for 44 Super Hornets, and $3.5 billion for continued development of the JSF. The carriers' superlative performance in the campaign in Afghanistan has elicited high praise from top Department of Defense (DOD) officials. Under Secretary of Defense (Comptroller) Dov Zakheim, for example, told reporters at a Pentagon briefing that, "We operate aircraft carriers 40 years and beyond. It's what you're doing with it. It's how you're modernizing it. If we hadn't had aircraft carriers, I don't know how we would have brought in the kind of tactical aviation we needed in Afghanistan, when we didn't have the bases available for other short-legged tactical aviation."

Six Major Goals

The buzzword at the Pentagon these days is "transformational." Each service is striving to develop programs that can be deemed effective in "transforming" the armed forces for the challenges and threats--seen and unseen--expected in the near and distant future.

Rumsfeld created the Office of Force Transformation (OFT) to evaluate the transformation activities of the services. It is headed by retired Vice Adm. Arthur K. Cebrowski, former president of the Naval War College, who is even better known as the father of "Network Centric Warfare." The new OFT already has begun a series of studies to determine the military's force structure for the future, to develop a strategy for dealing with terrorist attacks, and to study the impact of globalization on warfighting.

In a speech at the National Defense University in February, Rumsfeld said that, to keep the peace and defend freedom in the 21st century, the U.S. defense strategy and force structure "must be focused on achieving six transformational goals." He listed them as follows: protecting U.S. military bases, protecting and sustaining power in distant theaters, denying enemies sanctuaries from American military power, protecting information networks from attacks, using information technology to link U.S. military forces in a joint campaign, and maintaining access to space and protecting space capabilities from enemy attacks.

"We need rapidly deployable, fully integrated joint forces capable of reaching distant theaters quickly and working with our air and sea forces to strike adversaries swiftly, successfully, and with devastating effect," Rumsfeld said. "We need improved intelligence, long-range precision strike, and sea-based platforms to help counter the access-denial capability of adversaries."

Among the "new capabilities" needed, he said, are ballistic-missile defense systems, deep-penetration weapons--like the thermobaric bomb used for destroying terrorists and weapons of mass destruction hidden in bunkers and caves--and hardened space communications and reconnaissance space systems (which would be used to discourage potential enemies from attempting to develop killer satellites).

"As we change investment priorities," Rumsfeld said, "we have to begin shifting the balance in our arsenal between manned and unmanned capabilities, between short- and long-range systems, between stealthy and nonstealthy systems, between shooters, and between vulnerable and hardened systems."

Thinking, Training, Fighting

In testimony on the FY 2003 defense budget, Rumsfeld told the Senate Armed Services Committee (SASC) that transformation is not just a matter of money, weapons, and equipment. "Investments in transformation cannot be measured in numbers alone," he asserted. "Transformation is not about weapons systems particularly--it's more about thinking and changing how we think about war. All the high-tech weapons in the world won't transform our armed forces unless we transform the way we think, the way we train, the way we exercise, and the way we fight."

"It can be simply connectivity," he continued. "It can be in interoperability. It can be in taking things ... every single one of which exists presently and managing them, using them, connecting them, and arranging them in a way that has a result that is transformational."

As one example of the creative use of existing weapons and personnel, Rumsfeld cited the "transformational battle" for Mazar-e Sharif, the biggest city in Northern Afghanistan. There, he said, U.S. Special Operation Forces--on horseback--were able to communicate with "antique 40-year-old B-52 bombers" to help direct state-of-the-art laser-guided bombs to their targets.

Rumsfeld also told Pentagon reporters that "the single most important transformational thing" that is likely to occur over the next year or so is the selection of the next group of four-star unified commanders and service chiefs.

Rumsfeld recently proposed a new unified command plan to President Bush that recommends the establishment of a U.S. Northern Command, which would focus primarily on the sea-land-air defense of the continental United States. Under the plan, the Defense Department would: (1) provide support in times of natural disasters--hurricanes, forest fires, floods, and earthquakes; and (2) form a new Joint Task Force for Civil Support, which would be staffed with skilled personnel capable of rapidly responding to chemical, biological, nuclear, or major "explosive" incidents in the United States.

People, Programs, Platforms

The FY 2003 defense budget requests the following in the major DOD funding accounts: $68.7 billion for procurement (up 10 percent); $150 billion for operations and maintenance--including significant additional funds for such readiness categories as flying hours, steaming days, tank miles, and spare parts; $53.9 billion for RDT&E (research, development, test, and evaluation--much of it classified); and $94 billion for military personnel.

One of the major budget priorities is to fund the upgrade of the nation's (primarily military) satellites so that they have the capability to handle much more data. Perhaps the most important line item here is the $212 million requested for a new Advanced Wideband System that uses lasers instead of radio frequencies to provide information to the combat forces. The estimated long-term project cost is $2.2 billion.

In the quality-of-life area--in addition to the funding requested for the across-the-board pay raise and $300 million for targeted increases for NCOs (noncommissioned officers) with high-demand skills--the personnel account includes $4.2 billion to improve military housing; $10 billion for education, training, and recruitment; and $18.8 billion to cover the cost of military health care.

Rumsfeld said in his SASC testimony that the Defense Department already has realized savings of some $9.3 billion by "pursuing what works and stopping what does not." Here he cited the fact that he "terminated the Navy's area missile defense program because of delays, poor performance, and cost overruns."

Rumsfeld--who also made public his plan to seek a 15 percent average reduction in headquarters staffs--said additional savings are needed, but two things make those savings difficult to achieve. The first is the administration's decision not to make deep cuts in manpower--the total remains at approximately 1.4 million men and women.

"Now, in the midst of a war on terror, whose final dimension is still unknown," Rumsfeld said, "we do not believe is the time to be cutting manpower, to say nothing of the fact that we now have some 60,000 Guard and Reserve [personnel who] have been called up, and another 10,000 who have been held in the service, for a total of 70,000 additional manpower."

He noted that, at the time of his testimony--in early February--"We literally have more people in the area around Salt Lake City for the Olympics than we do in Afghanistan."

The Shipbuilding Situation: Projections Vs. Realities

The second difficulty, he told lawmakers, was the decision by Congress to put off, for two more years, a new round of base closures. That means, Rumsfeld said, that the Pentagon will have to continue to support between 20 and 25 percent more infrastructure than is needed--and therefore, because of the terrorist threat, will be saddled with heavy expenditures for protecting the superfluous facilities.

A second major program setback for the Navy was cancellation of the Zumwalt-class (DD 21) destroyer, a ship that was to have been the workhorse of the future fleet.

The Defense Department said the program was "not functioning properly" and therefore a decision was made to eliminate it and start a new program--the DD(X)--that could be used as a test bed for developing new technologies. Secretary of the Navy Gordon R. England told Congress that the DD(X) "family" of ships "consists not only of the sea-to-ground capability [and] fire support, but it's also a theater-missile-defense variant, and it's also a ship for operating in the littoral." The new budget includes $961 million to develop revolutionary stealth, propulsion, and manning technologies for this family of surface combatants.

While the $108.3 billion Navy-Marine Corps share of the budget is larger than either the Air Force's $107 billion share or the Army's $90.9 billion, the Navy's shipbuilding account has been reduced to $8.6 billion, down from the $10.2 billion appropriated last year. This will buy only five new-construction ships, one less than funded for the current fiscal year.

The Pentagon is fully aware that a construction rate of nine to 10 ships per year is needed to sustain a fleet of 300 or so ships, the number postulated by the current national defense strategy. But DOD plans to request only five more new-construction ships in FY 2004, seven ships in each of the following two years, and 10 in FY 2007. But even Rumsfeld was frank enough to comment that "we've all seen that forward-year projections tend to look better than reality."

Still, he said he is confident that the budget plan for the next four years will be carried out. "There is a very broad and deep feeling in the department and in the administration ... that we simply have to increase the number of ships in the outyears, and we plan to do it," he said.

Zakheim underscored the same point at a budget briefing for the press. "I think the secretary [Rumsfeld] has made it very, very clear we have to keep our fleet up in excess of 300 ships," he said. "What Afghanistan made clear in spades was what the Navy has been saying over and over again: that sometimes bases will not be available. You can't be in more than one place at a time. So we have requirements in the Mediterranean ... [and] we still have forces in Southern Europe; we have requirements in the Indian Ocean; we have requirements in East Asia; we have requirements in Southwest Asia. The fleet is stretched thin."

Warfighting: The First Priority

Rumsfeld has insisted that it was the Navy's decision to reduce the ship-construction budget, because the Navy's senior leadership believes that spending on current combat readiness is more urgent than spending on procurement and RDT&E--the "future readiness" accounts. He did concede, however, that Zakheim "was involved in the decision with the Navy."

For his part, England said the decision to reduce funds for new ships is "appropriate," because the funds are needed to pay off some $645 million in prior-year overruns, to increase weapons procurement, and to improve fleet maintenance. "We made those priority decisions," he told the House Armed Services Committee. "It was important. People are at war, and we are going to give them the spares and the support they need.

"That's what we did first. ... That was the right decision and I'm proud of the decision the three of us [England, Adm. Vern Clark, chief of naval operations, and Gen. James L. Jones, commandant, U.S. Marine Corps] made."

The new ships requested include two Arleigh Burke-class DDG-51 guided-missile destroyers; one Virginia-class nuclear-powered attack submarine; one San Antonio-class LPD-17 amphibious ship; and one Lewis and Clark-class T-AKE dry cargo ship. The shipbuilding account also includes $1 billion for the conversion of two Trident ballistic- missile submarines (SSBNs) to the SSGN (nuclear-powered guided-missile submarine) configuration. Each of the SSGNs will be capable of firing 154 Tomahawk cruise missiles and of carrying a contingent of Special Operations Force troops.

England noted that the FY 2004 budget will include funds for the conversion of two more SSBNs into cruise-missile shooters. "They are real ships to our Navy," he said. "They count as ready to get manned by Sailors. We really are putting seven ships into our Navy this year and next year."

Congress Takes the Initiative

There is no doubt that many members of Congress, particularly those from the principal shipbuilding states, will press hard for additional ships, perhaps by dipping into the $10 billion contingency fund proposed by President Bush. Senators Olympia Snowe (R-Maine) and John Warner (R-Va.) have already announced plans, in fact, to provide additional funds for shipbuilding both in FY 2003 and in the outyears of the FYDP.

On the Marine Corps side, a major positive note was the president's request for $2 billion to restructure the problem-plagued V-22 Osprey tiltrotor aircraft program. Included in that total is $500 million to correct technical problems and to conduct rigorous additional flight tests. The new budget also seeks $334 million for four KC-130J aircraft to improve the Corps' air-refueling capabilities.

The war in Afghanistan demonstrated the battle effectiveness of such UAVs as the Predator and the long-distance Global Hawk. Accordingly, the budget requests $1 billion for the development and procurement of these and other, newer, UAVs that can deliver bombs and missiles as well as provide target information and other intelligence. The weapons budget also seeks funds for a higher production rate for the Joint Direct-Attack Munition (JDAM), which has been used with devastating effect in Afghanistan.

Among other "major transformation initiatives" in the budget is the $7.8 billion requested for a broad-based research, development, and procurement effort aimed at deployment of "layered missile defenses," and $815 million requested for space-based sensors that can provide early detection of enemy missile attacks.

For the transformation of U.S. ground forces, $812 million is requested for the procurement of 332 interim armored vehicles, $707 million for the Army's Future Combat System, and $911 million for the ongoing development of the Army's Comanche reconnaissance helicopter. Funding also is requested for the Army's 42-ton Crusader howitzer. There had been speculation, before 9/11, that the Crusader and Comanche programs were possible candidates for cancellation.

Supplementals and Add-Ons

The new $379 billion budget request is not all the money the Bush administration is asking Congress to provide for national defense in FY 2003. When the Department of Energy's $16.8 billion account for nuclear weapons is added, the total reaches $396.1 billion.

And even that is not the end of the story. The president is expected to seek between $10 billion and $20 billion in supplemental appropriations in the current FY 2002 budget for the war on terrorism. That would be added to the $331 billion already appropriated for the Pentagon for the current fiscal year.

In his appearance before the Senate committee, Rumsfeld agreed that $379 billion is "a lot of money," but said the president's request should be considered in the context of previous budgets. The FY 2003 DOD budget request, Rumsfeld pointed out, amounts to only 3.3 percent of the U.S. gross domestic product (GDP) and 16.9 percent of the overall federal budget--compared to 10 percent and 50 percent, respectively, in the Eisenhower and Kennedy years.