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President Clinton has signed into law a massive omnibus government spending package, following protracted efforts by the House and Senate to avoid a government shutdown by finalizing its eight spending bills, an emergency aid package, and several government authorizing bills. A total of $8.5 billion in additional national defense funding for fiscal year 1999 was included in the measure, with $7.7 billion allocated for Department of Defense (DOD) activities, $210 million for the U.S. Coast Guard, and $525 million for Department of Energy nuclear activities.

The 21 October signing of the omnibus package followed the president's 17 October signing of the FY 1999 defense appropriations bill, which provides $250.5 billion in spending authority for the current fiscal year. Clinton also signed the "Strom Thurmond" National Defense Authorization Act for FY 1999 into law in October, providing a funding level for new budget authority of $270.5 billion--$2.6 billion below the inflation-adjusted FY 1998 spending level.

Days before the 105th Congress adjourned, Rep. Bob Livingston (R-La.), then chairman of the House Appropriations Committee (and soon to be the new Speaker of the House), claimed that the omnibus bill began "... a process of reversing a dangerous 10-year decline in defense spending."

Of the $7.7 billion earmarked for DOD in the omnibus emergency-supplemental bill, $1.1 billion will target urgent readiness-funding shortfalls publicized during Congressional hearings in September and October. This plus-up for DOD-wide readiness accounts will fund additional flying hours, spare parts, depot maintenance, and personnel recruiting and retention initiatives. The Congressional defense supplemental funding bill also provides:

• $1.9 billion for ongoing contingency operations in Bosnia;
• $1.1 billion for Year 2000 computer requirements;
• $1 billion for ballistic missile defense;
• $42 million for counterdrug and drug-interdiction activities;
• $200 million for security improvements in U.S. diplomatic facilities overseas;
• $50 million for antiterrorism programs;
• $200 million for medical-care issues affecting military members and families; and
• $260 million for facility repairs needed because of hurricane and storm damage.

Cohen: A Down Payment

The week after his 7 October appearance on Capitol Hill to testify on military readiness, Secretary of Defense William S. Cohen made a seven-day, six-country visit to Southwest Asia. His trip included a 9 October stop on board the nuclear-powered aircraft carrier USS Abraham Lincoln during the ship's operations in the Arabian Gulf.

Referring to the Congressional action to plus-up the FY 1999 military readiness accounts by $1 billion, Cohen said the funding increase is only a start at correcting readiness deficiencies. "We have tried to indicate to all concerned that's only a down payment, and that we ... [have] to address other shortfalls," Cohen told U.S. service members in the Gulf region.

Later, appearing with Sen. Trent Lott (R-Miss.), Senate Majority Leader, at a tribute to the armed forces in Biloxi, Miss., on 19 October, Cohen again maintained that the supplemental bill's add-on to FY 1999 DOD spending represents only a down payment on overall U.S. defense-funding requirements. "We've got to look at ways in which we can raise that top line to a level that will make sure that we keep the forces that we have today in the best fighting condition that they can possibly be, and we are going to work on that," Cohen said. In his Biloxi speech the defense secretary also called for further increases in defense-procurement funding (to a total of $60 billion annually), improvements in military compensation, and revision of the current military retirement system.

The DOD FY 1999 appropriations bill funds a force structure of 1.3 million active-duty personnel. A military pay raise of 3.6 percent was fully funded--$202 million over the president's request for a 3.1 percent pay hike. Late efforts to change the "Redux" reduced retirement system (which adversely affects service members who joined the military after 31 July 1986) were unsuccessful.

Plus-ups Benefit Navy Operational Readiness

The U.S. Navy's share of FY 1999 readiness-funding increases falls far short of the $6 billion requirement identified by Chief of Naval Operations Adm. Jay L. Johnson when he testified to Congress on 29 September. (See Sea Power, November 1998, page 22.) However, a senior Navy official noted that the final versions of the DOD appropriations and authorization bills, together with the omnibus package's supplemental funding, will directly benefit the Navy's operating forces. Department of the Navy defense and military construction funding in the defense supplemental appropriation totaled $520 million, with $340.5 million identified for readiness enhancements in the military personnel and operations/maintenance accounts.

Congress approved the Navy's FY 1999 end strength of 372,696 personnel contained in the president's budget request. Navy appropriations for FY 1999 include:

• $16.6 billion for active-duty personnel;
• $1.4 billion for Naval Reserve personnel;
• $21.9 billion for operations and maintenance;
• $957.2 million for Naval Reserve operations and maintenance; and
• $274.6 million for environmental restoration.

During finalization of the FY 1999 defense authorization bill, House and Senate conferees expressed alarm over the overall decline in modernization funding for the Department of the Navy. "Of particular concern," the conferees reported, "was the disparity between the Navy's ship force structure requirements and the funding available for the recapitalization of the shipbuilding account."

Navy acquisition programs fared well overall in FY 1999. Following, for selected programs, are some of the highlights in the final budget plan:

• V-22 Osprey tiltrotor aircraft: seven aircraft fully funded;
• CH-60 helicopters: five aircraft (one more than the president's budget request);
• Joint Strike Fighter: president's budget request fully funded (and a $15 million plus-up added);
• F-18E/F strike fighter aircraft: 30 aircraft (but a reduction of $14 million);
• CVN-77 nuclear-powered aircraft carrier: fully funded advanced procurement in president's budget request;
• DDG-51 guided-missile destroyer: fully funded president's request for three ships;
• LPD-18 amphibious transport dock ship: fully funded president's request for one ship;
• NSSN new attack submarine: fully funded the president's budget request for one boat;
• DD-21 land-attack destroyer: program funded (but an $8.6 million reduction in live-fire and testing funds);
• Theater Ballistic Missile Defense: fully funded the president's budget request (and a $120 million plus-up added);
• Cooperative-Engagement Capability: fully funded president's budget request (with plus-ups of $26 million in research and development, and $35 million in procurement, also added);
• Aircraft spares: fully funded president's budget request (and plus-up of $35 million added);
• Ship depot maintenance: fully funded the president's budget request (and plus-up of $45 million added); and
• Base support: fully funded the president's budget request.

The Navy was less successful in other areas. Congressional authorizers approved $110 million for the CVX next-generation aircraft carrier--$80 million below the president's budget request--and appropriators funded the program at $105 million. The vertical gun for advanced ships (VGAS) was funded at $15.2 million, a $10 million reduction. The $27.1 million requested for the Common Support Aircraft was zeroed out, a major setback that will delay the program indefinitely. The multiyear procurement sought for several big-ticket hardware programs was approved only for the E-2C Hawkeye early-warning aircraft.

Marine Corp Programs Fare Well in Final Procurement

The Marine Corps also fared well legislatively with the 105th Congress, with the FY 1999 Defense Appropriations Act providing approximately $11 billion in funding. A Marine spokesman characterized the funds allocated as a "fair share," but noted that additional funds are still needed for equipment modernization--notwithstanding plus-ups to Marine Corps accounts totaling nearly $293 million above the president's budget request. Active-duty Marine Corps end strength is set at 172,200. Marine Corps funding in the FY 1999 spending bill includes:

• $6.3 billion for active-duty personnel;
• $406.6 million for reserve personnel;
• $2.6 billion for operations and maintenance;
• $117.9 million for Marine Corps reserve operations and maintenance;
• $370.3 million for research, development, test, and evaluation; and
• $108 million for military construction.

Plus-ups to Navy acquisition accounts directly supporting the Marine Corps include $112.4 million for two KC-130 Hercules refueling and transport aircraft, $16.0 million for the LCAC (landing craft air cushion) service-life extension program, and $45 million in advance procurement funding for an additional amphibious assault ship of the LHD-1 Wasp class.

Multiyear procurement for the AV-8B Harrier VSTOL (vertical/short takeoff and landing) aircraft was supported by Senate and House authorization bill conferees, but was not approved in the report accompanying the DOD FY 1999 appropriations bill.

During his 29 September testimony on Marine Corps readiness before the Senate Armed Services Committee, USMC Commandant Gen. Charles C. Krulak estimated that an additional $1.5 billion would be needed to meet the Corps' current modernization requirements. The FY 1999 Defense Supplemental Appropriations folded into the omnibus spending package added funding of $60.9 million for Marine Corps operations and maintenance, $3.3 million for Marine Corps Reserve operations and maintenance, $11.9 million for Marine Corps personnel, and $2.5 million to repair storm damage at Marine Corps facilities in North Carolina.

Secretary of Defense Cohen met with Marines stationed at Kaneohe Bay, Hawaii, on 30 October during a scheduled week-long trip to Asia that was cut short by renewed tensions with Iraq. According to the American Forces Information Service (AFIS), the Hawaii-based Marines did not hold back, telling Cohen they need new aircraft, spare parts, and equipment.

AFIS reported that Cohen had acknowledged that concerns over shortfalls in spares and equipment--which have direct consequences for readiness and morale--were raised during all of his visits to defense installations in recent months. The defense secretary said that recent DOD funding increases should begin to "flow through" during the next few months. Cohen also pledged to work closely with Congress during the next two months to obtain targeted pay increases as well as reforms to the retirement system. The results of his efforts would be reflected in the FY 2000 DOD budget proposal.

Coast Guard Receives $4.3 Billion for FY 1999

The FY 1999 omnibus spending bill signed also provides $4.3 billion for the Coast Guard in FY 1999. Coast Guard officials, faced earlier in the year with the possibility of drastic funding reductions, were clearly relieved that the final spending bill ensures that the USCG's current level of services can be maintained during the year ahead. Additional funds for drug interdiction and operational readiness that were included in the FY 1999 supplemental appropriations will be the key to allowing the Coast Guard to maintain current services.

All Coast Guard mission areas were enhanced by the addition of modest funding increases for cutters, boats, aircraft, and equipment. According to a Coast Guard spokesman, the supplemental plus-ups for drug-interdiction operations will allow the service to continue its implementation of the "Steel Web" strategy to deny narcotic smugglers easy access to transit and arrival zones.

The supplemental funding also will allow adequate funding for Coast Guard personnel and sufficient enlistments to fill the existing personnel shortfall. Coast Guard officials predict that the Coast Guard Reserve will be brought up to its authorized strength with the increased drill rates. The spokesman said that the added funding also benefits the active force, given the use of Coast Guard reserve personnel not only for emergency missions but also for the service's day-to-day operations.

Top Navy Officials Confirmed

Following Senate confirmation, several top civilian officials assumed senior leadership positions in the Department of the Navy in recent months, led by Richard J. Danzig's assumption of duty as secretary of the Navy on 16 November. (See Sea Power, November 1998, page 19.) The other appointees are:

• Stephen W. Preston, general counsel of the Navy.
• Lee Buchanan III, assistant secretary of the Navy for research, development, and acquisition.
• Carolyn Howland Becraft, assistant secretary of the Navy for manpower and reserve affairs.
• Charles P. Nemfakos, acting assistant secretary of the Navy for financial management and comptroller.

Military Retirement: Murtha Vows to "Fight Hard" for Change

"Congressional leaders missed a golden opportunity to do something important for members of the armed forces when they rejected my proposal to restore equity to the military retirement system." That is how Rep. John P. Murtha (D-Pa.) assessed his unsuccessful effort, during the final weeks of the 105th Congress, to revise the "Redux" retirement system.

Murtha, a Marine Corps and Vietnam veteran, spearheaded the charge to respond to a top Joint Chiefs of Staff priority aimed at restoring retired pay to 50 percent of average base pay after 20 years of military service. Retention trends are down, and the service chiefs all point to the revised retirement system as a growing source of discontent among career personnel. The Redux plan, which has been in place for over 12 years, reduced the 20-year retired compensation to 40 percent for service members who entered the armed forces after 31 July 1986. Annual cost-of-living adjustments (COLAs) also are reduced under the Redux plan, but Murtha's scheme would not have restored full COLA.

House and Senate Republican leaders rebuffed the proposal to modify the retirement plan in 1999, asserting that additional study and Congressional hearings are needed to explore issues fully. Some defense analysts oppose wholesale revisions to the less costly Redux retirement system. The Newport News Daily Press reported on 30 October that Robert Emmerichs, an architect of the Redux plan during his work with the late Defense Secretary Les Aspin, advocates more robust bonuses targeted at needed skill areas.

Murtha, the Ranking Minority Member of the National Security Subcommittee of the House Appropriations Committee, told Sea Power that Congress had the chance to send a strong and clear message to military members and their families that their service is valued. "The one million active service members who entered after July 31, l986, are just now coming to understand that they will receive close to 25 percent fewer lifetime benefits than personnel who entered the service before August 1, 1986," Murtha said. The Pennsylvanian lawmaker said the change to a less generous retirement plan had caused heavy resentment among the service people he met during visits in 1998 to the Persian Gulf, Bosnia, South Korea, and Okinawa.

Despite the near-term legislative setback on the retirement plan, Murtha noted some progress. "The White House has assured me that they will include my retirement reform initiative in the FY 2000 president's budget coming out early next year," Murtha said.

During an interview with Armed Forces Radio and Television on 22 October, Defense Secretary William S. Cohen and Joint Chiefs of Staff Chairman Gen. Henry H. Shelton said that the Department of Defense will work hard during the year ahead to remedy current pay and retirement problems. "It was very beneficial to us that we have more time in which we can work our way through how we are going to allocate the pay increase and retirement benefit change," Cohen said. "It's important to get it done not only quickly, but to get it done right."

Murtha offered an equally positive outlook. "I expect that we will make important strides in the coming year to address these needs, and I intend to work very hard to ensure that Congress steps up to the plate," he said.

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