The Administration supports prompt congressional consideration of its national
defense authorization legislative proposal for FY 1998. As reported by the
Committee on Armed Services, however, S. 936 raises serious budget, policy,
constitutional, and management concerns.
Of particular concern, S. 936 would: (1) contrary to the Bipartisan Budget
Agreement, reallocate funds from the Department of Energy's (DOE) 1998 defense
discretionary budget request to Department of Defense (DOD) programs; and (2)
unconstitutionally infringe upon the President's authority to protect national
security information. The President's senior advisers would recommend that he
veto a final conference bill that fails to address these concerns.
In addition, (1) if an amendment is adopted that would revise the 1995 Defense
Base Realignment and Closure Commission's recommendations pertaining to Air
Force Depot maintenance facilities, or (2) if any amendment is adopted that
would mandate a date certain for withdrawal of U.S. forces from Bosnia, the
President's senior advisers would recommend that he veto the bill.
Violation of Bipartisan Budget Agreement
S. 936 is inconsistent with the Bipartisan Budget Agreement. While authorizing
overall appropriation levels for National Defense consistent with the
Agreement, the bill would reduce authorization levels by $2.5 billion from DOE
programs intended for vital environmental cleanup activities and ongoing
construction projects. At the expense of these high priority activities, the
appropriations are reallocated to unrequested procurement programs for the
DOD. For example, the bill would reduce DOE's $1.0 billion privatization
initiative for nuclear waste cleanup by about 80 percent ($791 million).
Failure to invest in privatization contracts for cleanup activities promotes
the continued use of more costly, traditional DOE contracting approaches. This
would result in a substantial increase to DOE's cleanup costs in future years.
In addition, DOE would not be able to support critical environmental projects
required under legally enforceable compliance agreements. Also, without the
advance funding for ongoing construction projects requested by the
Administration, DOE would incur a substantial budget shortfall in critical
departmental functions, including stewardship of the safety and reliability of
the nuclear weapons stockpile.
Section 1068 would require the President to inform Federal employees that
disclosure to Congress of classified information, falling into certain
categories, "is not prohibited by law, executive order, or regulation, and is
not otherwise contrary to public policy . . . ." This provision is clearly
contrary to the Supreme Court's explicit recognition of the President's
constitutional authority to protect national security. Congress may not vest
lower-ranking personnel in the Executive Branch with a "right" to furnish
national security information to a member of Congress without receiving
official authorization to do so. By seeking to divest the President of his
authority over the disclosure of such information, the Department of Justice
advises that section 1068 would unconstitutionally infringe upon the
President's constitutional authority. The Administration believes that
existing congressional oversight mechanisms, as well as inspector general
statutes, have proven effective in bringing instances of illegality, fraud,
waste, and abuse to the attention of Executive Branch managers and
Bosnia Withdrawal Amendment
The Administration understands that an amendment may be offered that would
mandate a date certain for withdrawal of U.S. forces from Bosnia. Such an
amendment could jeopardize the safety of our troops and damage our national
security interests. It would seriously undercut the U.S. commitment to help
implement the Dayton Peace Accords and successfully complete the NATO-led
mission in Bosnia, resulting in a serious loss in U.S. credibility with the
Bosnian parties, with our allies, and with other countries participating in the
Stabilization Force (SFOR) operation.
The Administration continues to believe that the duration of SFOR's mission
should provide sufficient time to establish conditions to maintain security and
stability in Bosnia without an outside military presence. However, this effort
can only succeed if the parties and the international community remain assured
of U.S. leadership and commitment to peace in Bosnia.
Base Closure and Realignment
The Administration is disappointed that the bill does not adopt the
Department's proposal to authorize two additional rounds of base closure and
realignment in 1999 and 2001. Defense's base infrastructure is far too large
for its military forces and must be reduced if the Department is to obtain
adequate appropriations for readiness and for modernization requirements for
the next decade.
Threat Reduction Programs. The bill reduces appropriation
authorizations for DOD's Cooperative Threat Reduction program by $60 million
from the Administration's request. The request of $382.2 million is a
bare-bones figure based on a difficult prioritization of a long list of pot
ential projects. The proposed reduction would force us to delay several
projects in the Former Soviet Union in critical areas such as the destruction
of nuclear delivery systems and chemical weapons, improvements to the safety
and security of stored nuclear warheads and fissile material, and the cessation
of production of weapons-grade plutonium. The Administration urges the Senate
to restore appropriation authorizations to the request level for this important
and highly effective means of enhancing U.S. security through eliminating
former Soviet weapons of mass destruction and preventing weapons proliferation.
The bill also reduces the Department of Energy Materials Protection Control and
Accounting Program by $20 million and the International Nuclear Safety program
by $50 million. The Administration strongly urges the Senate to restore these
two authorizations to the requested level to ensure the success of our efforts
to prevent the theft or diversion of weapons-usable fissile materials and
reduce the risk of accidents at Soviet-designed nuclear reactors in the Newly
Increases for Programs Not In the Future Years Defense Program (FYDP).
S. 936 adds $4.2 billion to the Administration's request for procurement and
about $1 billion to the request for research and development. Some of these
increases, however, are for programs that are not in the FY 1998-2003 FYDP and
are of questionable value to the Department's overall plans to modernize
military forces. These additions include: $40 million for the Armament
Retooling and Manufacturing Support program; $45 million for two CH-47 Cargo
helicopters; $75.2 million for an oceanographic survey ship; $118 million for
Spaced-Based Laser Technology; $50 million for the Clementine II Program; and
$80 million for Kinetic Energy Anti-Satellite technology.
Dual Use Applications Program. The bill authorizes only $125 million of
the $225 million requested for the Dual Use Applications Program (DUAP). This
program helps to develop and incorporate technologies used and tested by the
cost-conscious commercial sector into military systems. By adopting these
dual-use technologies, DOD will be able to take advantage of cost savings that
flow from the production efficiencies of larger-scale commercial manufacturing
lines. Reducing funding for DUAP would result in higher costs for future defens
e systems. The Administration strongly opposes reductions from its requested
amount for this high priority program.
Incremental Funding of the CVN-77. The bill would authorize incremental
funding for the tenth Nimitz-class nuclear aircraft carrier, CVN-77, by adding
$345 million in FY 1998 to accelerate advance procurement and construction.
Although the Administration is committed to building CVN-77 (the requirement
for which was validated by the Quadrennial Defense Review), it opposes
incremental funding of procurement programs. The FY 1998-2003 FYDP fully funds
CVN-77 construction in FY 2002. This schedule is consistent with force
structure requirements and aircraft carrier replacement schedules.
F-22 Fighter Aircraft. By delaying $420 million requested for the
Engineering and Management Development program until 1999, S. 936 could
jeopardize implementation of the program's recent restructuring. The Senate
should restore the funding requested in the President's Budget so that the
program changes identified by the Joint Estimate Team as necessary to control
costs and maintain F-22 affordability can proceed.
Strategic Sealift Ships. The bill does not authorize the
Administration's request for two strategic sealift ships because of concerns
regarding justification, cost, and schedule. The requirement for these sealift
ships was originally identified in the Mobility Requirements Study (MRS),
revalidated in the MRS Bottom Up Review Update, and confirmed in the QDR.
Despite some early cost and schedule overruns, the program is now proceeding
satisfactorily. The Administration urges the Senate to restore the President's
Budget request and allow continuation of this urgently needed program.
Advanced Concept Technology Demonstration (ACTD) Programs. S. 936
reduces the appropriation authorization for ACTD programs by $20 million. This
program supports work on new and innovative defense system concepts. It could
provide the basis for systems providing a decisive military edge over
adversaries in the next century and should be authorized at the requested level.
TITAN IV. The Administration opposes the $100 million reduction for the
Titan-IV program. DOD currently plans to reprogram $82.5 million as part of
the FY 1997 Omnibus Reprogramming; a subsequent reduction in FY 1998 would
result in reduced program scope, increased risk, and a necessary restoration of
funds in future years.
Other Objectionable Provisions
Strategic Forces. The bill's provision that prohibits retiring certain
strategic nuclear delivery systems during FY 1998, unless START II enters into
force, restricts the President's national security authority. Until START II
enters into force, the United States will draw-down and maintain strategic
forces at levels consistent with START I.
Ready Reserve Mobilization Income Insurance Program. The Administration
is gratified that S. 936 responds to concerns about the Ready Reserve
Mobilization insurance program and authorizes payment of all promised
benefits. The Administration objects, however, to returning premiums to
members who were not deployed and, therefore, did not receive "income loss"
benefits. Returning premiums sets a precedent for destroying the integrity of
Federal insurance programs.
Executive Compensation. The Administration does not support a uniform
cap on contractor executive compensation. The Administration believes that
limitations on contractor executive compensation should reflect the position
taken in the Administration's February 28, 1997, legislative proposal. That
proposal recognizes that contractor executive compensation limitations should
reflect pay levels based on industry norms considering the size and nature of
the companies and the positions concerned.
Delay of Federal Agency Actions Determined to Affect Readiness. The
Administration opposes a provision that would authorize the Secretary of
Defense to delay any administrative action by a Federal agency if the Secretary
believes the action would impact military readiness. The term "administrative
action" is overly broad and could include anything from directives to comply
with existing regulations to delay of new regulations. Further, the term
"impacting military readiness" is unclear and too broad. It could enable the
Secretary to block actions without consideration of other public concerns. The
existing regulatory review process provides a venue for a full airing of all
Federal concerns including military readiness and national security.
Naval Petroleum Reserve (NPR) Leasing. The Administration also opposes
section 3402, which would provide for the leasing of NPRs 1, 2, and 3 by the
DOE. This provision is contrary to an agreement recently reached between the
Department of the Interior (DOI) and DOE, under which DOE would transfer these
lands to DOI for leasing under the Mineral Leasing Act (MLA). Section 3402
would also deprive the State of Colorado of its share of leasing royalties
under the MLA.
Panama Canal Commission (PCC). The Administration opposes the
authorization of unlimited or excessive recruitment, retention, and separation
incentive payments for the PCC. The Administration also opposes the waiver of
restrictions on certain dual compensation payments for members of the PCC.
Procurement Reform. We understand that consideration is being given to
a floor amendment to address procurement. We would strongly support adoption
of the Administration's government-wide procurement provisions through such an
The Administration, as it continues its review of the bill, may identify other
issues, and will work with the Congress to address these concerns and to
develop a more acceptable bill.