S 2060 -- 05/14/98
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May 14, 1998

S. 2060 - National Defense Authorization Act for Fiscal Year 1999
(Thurmond (R) SC and Levin (D) MI)

The Administration supports prompt congressional consideration of its national defense authorization legislative proposal for FY 1999. As reported by the Committee on Armed Services, S. 2060 authorizes appropriations of $270.6 billion for national defense programs in FY 1999, the amount requested by the President. The bill, however, raises serious budget and policy concerns which must be addressed satisfactorily.

Of particular concern, S. 2060 would reallocate funds to Department of Defense (DOD) military programs by: (1) reducing funding for the Department of Energy's (DOE) FY 1999 defense discretionary budget request; and (2) significantly reducing the Administration's request for intelligence activities.

The Administration also understands that amendments may be offered which would mandate troop withdrawal from Bosnia on a specified timetable. If such a Bosnia amendment were included in the final conference bill, the President's senior advisers would recommend that the bill be vetoed.

Potential "Mandated Bosnia Withdrawal" Amendments

A statutory requirement for troop withdrawals from Bosnia on a specified timetable could jeopardize the progress achieved to date, damage U.S. national security interests by undermining American leadership in Europe, and hinder the ability to forge a lasting peace. This type of requirement would unduly restrict the President's authority to deploy force levels sufficient to ensure the safety of U.S. troops and to successfully complete the mission in Bosnia.

Over the past year, the Administration and NATO have developed benchmarks that will serve as measures for progress and provide a basis for periodic reviews of commitments in the region. As the circumstances warrant, the Administration will further reduce forces in Bosnia. Setting dates in law for withdrawal would undermine that process and the progress made to date. The Administration strongly urges the Senate not to include any language mandating withdrawal from Bosnia.

Reduction of DOE Funds

The Administration strongly objects to the $359 million reduction from the requested level for DOE's defense and environmental management activities. The Committee has erroneously characterized a $145 million cut in stockpile stewardship and a $21 million offset in Environmental Management as reductions to prior year balances. Since DOE has eliminated its excess balances over the past four years, the Committee's bill will force real reductions in critical programs needed to ensure the safety, security and reliability of America's nuclear deterrent. The $275 million reduction in the Environmental Management Privatization account cuts funds which are needed to demonstrate to the financial investment community the Department's commitment to the privatization approach, and which are required to complete key nuclear waste disposal facilities. In addition, the Administration objects to reductions in the program direction accounts for the Environmental Management, Defense Programs, and Nuclear Nonproliferation programs which have reduced their federal workforce substantially since 1995.

Reduction in Request for Intelligence Budget

The Administration strongly opposes the bill's significant reduction in the Administration's FY 1999 Budget request for intelligence activities. This substantial reduction could have severe near- and long-term effects on the ability of the intelligence community to provide battlefield support. For example, these reductions will impede the intelligence community's ability to: (1) provide early warning information to decision makers; (2) gather data on weapons of mass destruction; and (3) collect and analyze information regarding countries where U.S. Armed Forces might be deployed.

Base Realignment and Closure

The Administration is disappointed that the bill does not adopt the DOD proposal to authorize two additional rounds of base closure and realignment in 2001 and 2005. The DOD base infrastructure is far too large for today's military forces and must be reduced if readiness and modernization requirements are to be met over the next decade.

Unrequested Funding

S. 2060 adds over $1.2 billion to the Administration's request for weapons modernization and $500 million more for construction programs. Some of these increases are for programs that, due to higher priority military requirements are not in the Future Years Defense Program (FYDP) or that should not be funded instead of DOD's FY 99 requirements. These include $318 million for four additional C-130J airlift aircraft, $94 million for the Space-Based Laser Technology program, and $50 million for advance procurement of an amphibious ship, the LHD-8. Moreover, to complete procurement of the LHD-8, extensive funding will be required in later years. These increases for lower priority weapons modernization and military construction programs would be at the expense of higher priority defense programs.

Small and Disadvantaged Businesses

The Administration is strongly opposed to limitations that would impede the ability of the Department of Defense to assist small and disadvantaged businesses in obtaining contracts. Provisions in this bill would have a negative impact on these programs and would create uncertainty in future years. The Administration will soon issue improvements to procurement programs for small and disadvantaged businesses that are carefully crafted to not only provide procurement opportunities for these businesses, but also ensure that the programs do not unlawfully or unfairly diminish contracting opportunities for non-minority firms and meet legal requirements as set forth by the courts.

Early Retirement Authority for Civilian Employees

Section 1104 would grant the Department of Defense Voluntary Early Retirement Authority. The Administration strongly encourages the Senate to instead extend government-wide flexible early retirement authority, under OPM's oversight, until 2003. Therefore, the Administration has concerns with section 1104 as reported by the Committee, and looks forward to working with the Congress to provide permanent authority for tailored voluntary early retirements.


The Administration supports language included in the Senate bill requiring mandatory reimbursement of Federal spectrum users when forced to modify systems or to relocate as a result of new commercial licensees. Mandatory reimbursement will help facilitate effective management of spectrum in times of increasing demand and new commercial opportunities. The Administration appreciates the Senate's recognition of the importance of providing the same opportunity to Federal users as is afforded the private sector.

The Administration, as it continues to review the bill, may identify other issues (e.g., health care demonstration projects), and will work with the Congress to develop a more acceptable bill.

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