Testimony of Jacob J. Lew Director
Office of Management and Budget Before U.S. Senate Appropriations
April 27, 1999
Mr. Chairman and distinguished members of the Committee, thank you
for the opportunity to explain the Administration's request for supplemental
appropriations to finance military and humanitarian operations related to
Kosovo. Since you are very familiar with the foreign and military policy
objectives of our Kosovo operations, I will restrict my comments to describing
the President's proposed supplemental funding request, its key assumptions,
structure, and purpose.
Last week the President transmitted a $6.049 billion emergency
supplemental appropriations request to provide the resources necessary for the
key elements of our military, humanitarian, and diplomatic efforts. It sends a
very clear message -- we will protect readiness and provide the resources to
continue current operations for as long as necessary to succeed. While this is
an FY 1999 supplemental request, it does not represent either a schedule or a
deadline for those operations. The Administration's package:
protects the military readiness of those forces in the Balkan
theater and all other U.S. forces;
ensures our military has the full measure of resources necessary
to carry out the Kosovo air campaign; and,
funds the U.S. commitment to provide humanitarian relief now and
respond to potential future refugee assistance needs.
Because the current situation in Kosovo was not anticipated when the
FY 1999 appropriations were enacted or when the FY 2000 budget was prepared, we
have submitted this supplemental as an emergency request. It is critical
Congress act quickly to pass this emergency request to ensure that the
Departments of Defense and State and the U.S. Agency for International
Development (AID) have the proper resources to carry out their missions. In
particular, we urge the Congress to act quickly to avoid any degradation to our
military readiness. We hope that Congress will act expeditiously on this
package and avoid delays brought about by consideration of extraneous matters.
Our armed forces and the humanitarian crisis in Kosovo demand nothing less. We
also urge Congress to act expeditiously on the Central American and Agriculture
relief supplemental requests without adding extraneous legislative riders or
As I mentioned earlier, the overall package totals $6.049 billion and
covers only the FY 1999 costs of these operations. Funding for
military activities is $5.123 billion, with $3.301 billion of that for current
and projected operations in Kosovo, $698 million for munitions replenishment,
and $850 in contingent funding for a readiness and munitions reserve. It is
important to note again that U.S. forces will remain as long as necessary to
accomplish their mission, and we intend to provide full funding to support that
endeavor. Also included in the total for DoD military activities is $274
million to cover the Department's unanticipated strike and operations costs in
Southwest Asia. On the humanitarian side, the request also includes $335
million for DoD refugee assistance, bringing DoD's total to $5.458 billion. The
total for the international affairs is $591 million. This includes $386 million
for humanitarian operations, $55 million for State Department operations and
other stabilization efforts, and $150 million for securing the front-line
states. Combined, this package requests $721 million for humanitarian
operations and refugee relief.
This supplemental request is designed to meet the following
1. We must protect the military readiness of those forces in the
Balkan theater and all other U.S. forces. A chief priority of the
Administration has been to ensure this supplemental fully covers the costs of
the Kosovo effort and maintains U.S. readiness. Currently, Kosovo operations
are being paid for with funds that already are in DoD's budget for normal
operations and training activities during the last three months of the fiscal
year. Expedient action is needed to restore these funds to avoid serious
readiness consequences later in the year. Moreover, to ensure that we will have
sufficient stocks of critical munitions for future operations, we must begin to
replace those munitions already used and those we anticipate using during this
operation. This supplemental meets these needs. That is why we are anxious to
work with Congress on a bipartisan basis to enact this supplemental as soon as
2. We must ensure our military has the full measure of resources
necessary to carry out the Kosovo air campaign for as long as necessary.
To provide maximum flexibility to our military commanders, we are requesting
sufficient funding to provide the capability to continue operations at a high
pace with the currently approved forces. The supplemental request assumes that
the currently approved level of U.S. forces, including a carrier battle group,
more than 600 Air Force and Marine Corps aircraft, one Marine Expeditionary
Unit, several Army helicopter battalions and missile batteries, and other
support forces are sustained in the Balkans for as long as necessary. This
supplemental would support these force levels for the remainder of FY 1999. The
requests also provide the capability for U.S. forces to maintain the air
campaign at the current rate of sorties and strikes on Yugoslavia.
3. We must fund the U.S. commitment to provide humanitarian
relief now and respond to potential future refugee assistance needs.
Hundreds of thousands of refugees and internally displaced persons from Kosovo
need urgent assistance. Although there is no precise count, we are planning on
assisting through several means at least one million and possibly up to one and
one-half million refugees and internally displaced persons. The President's
supplemental request of $220 million for the Migration and Refugee Assistance
(MRA) and the Emergency Refugee and Migration Assistance (ERMA) accounts will
provide the resources necessary to cover the estimated U.S. share of the
multilateral costs for one million refugees or internally displaced persons
through the end of FY 1999. The U.S. contribution shares the burden, with other
countries providing 75 percent of the required resources. The U.S. 25 percent
share is consistent with customary practice, which demonstrates a strong U.S.
commitment while fostering a multilateral burden-sharing approach. The
requested funds will also permit the U.S. to help meet its commitment to bring
up to 20,000 refugees to this country to provide them a safe haven.
No one can be sanguine, however, about the final costs of helping the
refugees and internally displaced persons. We do not know the full needs of a
population that we have been unable to help directly, the displaced Kosovars in
Kosovo. For the refugees outside Kosovo, there may be other as yet unknown
costs as the international community helps build temporary camps for hundreds
of thousands of people, and arranges assistance though a non-governmental and
private voluntary organizations. For that reason, our request provides the
necessary funds to provide for additional large-scale refugee outflows from
Kosovo or to provide humanitarian assistance for those Kosovo Albanians in
Kosovo if conditions permit.
We are not requesting funding for long-term reconstruction
activities, but we think it prudent to anticipate the need for planning for
refugee repatriation and for that reconstruction. Moreover, our request for
funds for in the Eastern Europe assistance program allows for the possibility
that we can address the most immediate costs, such as digging wells or
providing shelter, associated with the return of Kosovo refugees to their homes
once we achieve a solution to the conflict.
The highlights of our funding request for military operations,
humanitarian operations, diplomatic operations, and readiness and munitions
replenishment are as follows:
Military Readiness. As a first priority, this supplemental
package protects military readiness through funding levels based on robust
assumptions, such as providing the capability to sustain operations for the
rest of FY 1999. In addition, we have requested contingency funding to cover
unanticipated costs that might arise during the prosecution of this action. We
have worked hard to ensure that this package would provide DoD sufficient
funding to sustain military readiness while action in Kosovo continues.
Kosovo Operations. First, this package provides $287 million
to fund the estimated cost of the initial U.S. air campaign through April 30,
1999. Also requested is funding to cover the costs of U.S. forces' support to
the Organization for Security and Cooperation in Europe operations in the
Balkans and the Kosovo Air Verification Mission, which ended shortly before the
air campaign began. Second, this package requests $3.01 billion to sustain air
operations against Yugoslavia, which will continue as long as necessary. We
cannot predict when the air campaign will achieve its desired outcome.
Therefore, to provide maximum flexibility to our military commanders, we are
requesting sufficient funding that will provide us the capability to continue
operations at the current, planned levels with the currently approved
forces. Funding will cover the cost of operating
aircraft and ships, deployment of assets, force protection and base activities,
spare parts, transportation, logistics services, equipment maintenance, special
pay and allowances, supplies, and other support costs for U.S. forces in the
Balkans. I should stress that the supplemental request does not provide
funding for the deployment of U.S. ground forces to Kosovo.
There has been a lot of discussion concerning the monthly cost of
this military operation. First, the costs associated with Southwest Asia ($451
million, of which $274 million is for operations and $177 million for
munitions) and refugee relief ($335 million) should be removed from the total.
In the remaining $4.6 billion, our request includes nearly $500 million in
one-time start-up costs that cover deploying forces and setting up facilities
in theater. The costs will be incurred in the early part of the operation;
therefore, as the operation proceeds, the actual costs per month will decrease.
Including munitions costs, discussed below, the recurring costs for the Kosovo
operation total $4.1 billion or approximately $700 million per month. This
package fully funds the Department's request for operations.
For the Kosovo operations, the Department of Defense is requesting
authorization to call up approximately 33,000 reservists. Approximately 25,000
will support Air Force strike operations, 2,000 will support Navy and Marine
Corps operations and 6,000 will meet the Army's demands for support to Task
Force Hawk. We have included approximately $450
million for FY 1999 in the supplemental for costs associated with the call-up.
Munitions Replenishment. The Administration requests $698
million to replenish and upgrade cruise missiles and certain other types of
"smart" munitions used in Kosovo and Iraq. This request both replaces munitions
used in Iraq and Kosovo to date and covers anticipated usage of these critical
weapons. It includes: $445 million to upgrade older Tomahawk missiles
(including Tomahawk Anti-Ship Missiles) to the more capable Block IIIC Tomahawk
Land Attack Missile; $178 million to convert 322 nuclear-Air Launched Cruise
Missiles to Conventional Air Launched Cruise Missiles; $35 million to
accelerate Joint Direct Attack Munition (JDAM) production; and $40 million to
accelerate air-launched towed decoy production.
This funding will protect readiness by ensuring that adequate stocks of these
critical munitions will be available for current and future operations.
This request will not only replenish those critical munitions already
expended, but will also increase the inventories of these munitions from when
we began the operation. For example, for JDAMs, the request funds 33 percent
more units than contained in the inventory at the start of the operation.
As we work to ensure readiness in all theaters, both now and into the
future, it is imperative that we replace certain munitions as rapidly as
possible through this emergency supplemental. Of the programs included in the
supplemental, deliveries of all but Tomahawk will actually begin this calendar
year. However, we continue to maintain substantial reserves of these missiles.
Tomahawk deliveries will not begin until FY 2001, but supplemental funds will
ensure that we have an adequate and more capable inventory for future
Readiness and Munitions Contingency Reserve. The
Administration's proposed contingency reserve fund will ensure readiness levels
of all forces remain high while operations continue in Kosovo and that
inventories of critical munitions are adequate for future operations. The
Administration proposes that $850 million of the Department of Defense funding
request be set aside in a contingency fund to: 1) prohibit any degradation in
the readiness of our forces in the Balkans and around the world that could
result from the uncertainties of conflict in Kosovo; and 2) replenish the
inventories of munitions that could be used in Kosovo but have not been used to
date. Prudent planning for quickly-changing operations calls for setting aside
additional funding on a contingency basis to assure that a high level of
military readiness is maintained in and outside of Kosovo, and that the supply
of munitions, an essential element of readiness, remains sufficient for future
Southwest Asia. As you know,
we are still conducting operations in the Persian Gulf at higher than
anticipated rates. Therefore, a total of $274 million is requested to
cover the costs of Operation Desert Thunder and Desert Fox, as well as to fund
higher-than-anticipated operating levels in and around Iraq through the
remainder of the fiscal year. Funding to replace CALCMs and Tomahawk missiles
used in Operation Desert Fox totals $177 million.
Before I conclude my discussion on funding for military operations, I
want to reiterate the necessity for rapid consideration of this package. The
military will soon need to make decisions regarding its fourth quarter training
program. In order to plan effectively, DoD must know that it has sufficient
funding available to carry out those activities. Further, it is difficult to
defer costs in the fourth quarter, making it imperative that DoD have
sufficient resources available immediately to undertake all the necessary
readiness activities during the fourth quarter. I strongly urge the Congress to
consider this supplemental request expeditiously to protect military readiness.
Our request includes $721 million for the humanitarian relief
activities of the Departments of State and Defense, and the AID. With this
request, we believe we have fully addressed both the critical short-term needs
of the refugees and others adversely impacted by the crisis and also begun
planning for the long term humanitarian implications for the region. We have requested our share of the multilateral effort
to supply food, shelter, water and sanitation, health, and other life
sustaining elements for up to a million refugees that United Nations High
Commissioner for Refugees (UNHCR) has currently projected to result from this
crisis. We are confident our request also fully addresses the potential needs
of the hundreds of thousands of people in Kosovo who may be without shelter,
and the hundreds of thousands of other Kosovars whose lives have been
tragically altered by the policies of the Milosevic government.
The Department of Defense's costs for aiding Kosovar refugees fall
into three categories. First, for the last three weeks DoD has provided $25
million in defense articles and services under the drawdown authority signed by
the President March 31. This amount has funded the provision of humanitarian
rations, tents, blankets, and other relief supplies. Our supplemental request
would replenish the operation and maintenance accounts that have been the
source for these funds. Second, DoD may contribute up to $10 million toward a
NATO-led task force that is providing refugee relief, and our request includes
these funds. Finally, DoD plans to construct and operate a temporary camp for
up to 20,000 refugees, likely in Albania, and provide other assistance as
needed. Our request provides $300 million to carry out this plan.
The President is requesting $220 million for the Department of
State's refugee accounts. Of this amount, $125 million is requested for the MRA
account and $95 million for the ERMA account. The MRA funds would be used to
respond to the appeals of international and non-governmental organizations,
such as the UNHCR, International Committee of the Red Cross, and the
International Organization for Migration. These appeals would fund programs
providing critical life-sustaining assistance to refugees, displaced persons,
and conflict victims and support the multilateral effort to transport Kosovar
refugees to temporary refugee countries. The supplemental ERMA funds would be
used to ensure the account has sufficient funds to meet any urgent and
unforseen requirements arising from the crisis -- such as a doubling of the
current refugee outflows -- while enabling the fund to meet the need to provide
front-line, lifesaving responses to humanitarian emergencies worldwide.
Moreover, we will use $40 million of ERMA funds to provide for the Department
of State's share of the costs of resettling up to 20,000 Kosovar refugees in
the United States.
The President is requesting $71 million for AID's International
Disaster Assistance account. Of this amount, $68 million would fund programs
providing direct humanitarian assistance to the victims of the Kosovo crisis. A
large percentage of the Kosovar refugees are not in traditional refugee camps
supported by UNHCR, but in private homes, schools and other host government
facilities, and these kinds of arrangements are likely to increase as refugee
outflows continue. The humanitarian assistance requirements for refugee
communities living in these arrangements are substantial. Working through
private voluntary organizations, AID disaster assistance can provide prompt and
critical support for the affected communities, as well as continue to provide
essential assistance in specified sectors within the more traditional refugee
camps. The request would also provide $3 million to support the Federal
Emergency Management Agency's role in the U.S. response -- a 24 hour toll-free
phone bank for private donations. That phone bank has received thousands of
phone calls a day.
The President is requesting $95 million to address regional
requirements for the well-being, safety and return of the Kosovar refugees. The
current situation is highly uncertain, no one has a crystal ball to predict
when a settlement will be reached. We have requested these funds in the Eastern
European Assistance account, which has particularly broad authorities, to
permit us to respond to a broad number of possible requirements for the care
and return of the refugee population. Should greater resources be necessary to
handle additional outflows of refugees, these funds could be used. If there is
an unexpectedly early end to the hostilities, these funds could be used for
urgent relief within Kosovo.
Diplomatic Operations and other Stabilization
The supplemental request also includes $55 million for diplomatic
operations and other stabilization efforts. These funds include $25 million to
meet diplomatic and security requirements arising from the crisis in Kosovo
funded through the State Department's operating accounts and $25 million to be
funded through the Assistance to Eastern Europe and the Baltic States account
to do background checks on Kosovar police recruits, and to train these recruits
for their eventual return to Kosovo. We are also requesting $5 million for the
Economic Support Fund (ESF) to begin the difficult process of documenting
alleged atrocities in Kosovo. The funds would be used to interview refugees and
prepare the necessary documentation for possible war crimes that may have been
committed in Kosovo.
Securing the Front Line States
Albania, Macedonia, Bulgaria, Bosnia, and Romania, and the Republic
of Montenegro within Yugoslavia were struggling to make the transition to
democracy even before the current conflict. These countries have suffered
significant reductions in trade and investment as a result of the conflict.
They have borne the burden of the refugee exodus from Kosovo. They also are
under threat if Milosevic expands the conflict, as witnessed by border
incidents such as the Serbian shelling of a village inside Albania. The
confluence of these events threaten to undermine the political stability of
these countries as they struggle to make the transition to market democracies.
Therefore, we are requesting $150 million, $100 million in ESF funds and $50
million of the funds requested for the Eastern European Assistance account, to
help increase stability in these countries and to alleviate the disruption
created by the fighting in Kosovo. It is clearly in our national interests to
help stabilize these countries and prevent both the spread of the conflict and
erosion of the hard-won progress on reforms in the region. The ESF funding will
be closely coordinated with World Bank, IMF, and other donor contributions,
which will far exceed these levels, to help maintain stability in the region.
We anticipate the U.S. share of this assistance will be around 10 percent, with
the Europeans and other donors providing the lion's share of assistance.
Let me also mention other urgent supplemental priorities. The fact
that we are asking the Congress for funding to respond to an enormous emergency
far away does not in any way diminish the importance of an emergency that is
very close to home. The Central American relief package remains urgent. Every
day we delay means another day the people of Central America lose hope in their
ability to rebuild their homes, earn their livelihood, and achieve a prosperous
future in their homeland.
In addition, the FY 1999 supplemental request for $100 million in
assistance for Jordan is critical to stabilizing the Jordanian economy and
ensuring a smooth transition of leadership. Jordan is a key to the Middle East
Peace process and the implementation of the Wye River memorandum, and our
continued strong support for Jordan will help to achieve the goal of peace in
the Middle East that we all share. Also of critical importance is our request
for agricultural relief to our farmers that both the House and Senate have
included in the supplemental appropriations bill. I urge the Committee to act
quickly to enact these emergency packages expeditiously.
Despite months of allied diplomatic efforts to achieve a balanced
peace plan, the government of Slobodan Milosevic defied the international
community and pursued a course of repression and terror against the people of
Kosovo. We determined that we could not allow these actions to go unchallenged.
Now, we have a responsibility to our country and to the men and woman serving
our country in the Balkans and to address the humanitarian crisis provoked by
the Milosevic government. We have provided you with our best estimate of the
resources required to achieve our goals in Kosovo. We ask the Congress to act
quickly upon this request and send a clear message to Milosevic - his actions
will not be tolerated and that we are prepared to back our words with action.
Thank you. I am prepared to answer questions that you may have.