Statement of the Honorable Dov S. Zakheim Under Secretary of Defense (Comptroller) Senate Appropriations Committee – Subcommittee on Defense
1 March 2004
Mr. Chairman, members of the Committee, thank you for this opportunity to discuss President Bush’s fiscal year (FY) 2005 Department of Defense (DoD) budget. Because the Committee has received considerable information in support of the budget request, I will limit my statement to key issues that are related to my responsibilities as Under Secretary of Defense (Comptroller).
Funding the Global War on Terrorism
Two weeks ago I visited Afghanistan and Iraq, and so I will begin by reporting that our troops there continue to perform magnificently. They appreciate the steadfast support given them by this Congress. We continue to witness progress in both countries, and enjoy the full cooperation of our allies and partners as we work with Iraqis and Afghans to provide security, stability and prosperity to their respective countries. I especially want to note the success of our Provincial Reconstruction Teams (PRTs) in Afghanistan, and the contribution of our allies to PRTs. I visited the NATO/German PRT in Kunduz. They are doing a marvelous job and are well-liked by the local townspeople. In Iraq, I visited the lead elements of the Japanese contingent in As-Samawah, the Spanish brigade in Ad-Diwaniyah, and the Polish multi-national division headquarters in Al-Hillah. These units are having a major, positive impact on the local populace, and are demonstrating that the international community shares America’s desire to help Iraq emerge from thirty years of dictatorial darkness.
For the current fiscal year, our FY 2004 supplemental appropriations provide sufficient resources to enable the Department to finance its incremental costs for operations in Iraq, Afghanistan, and the global war on terrorism through the end of September. We will continue to provide service support and transportation for allies who are contributing forces to coalition operations in Iraq, but who nevertheless need some financial assistance.
We cannot yet determine the scope of U.S. operations in Afghanistan and Iraq in FY 2005. The President’s request therefore does not reflect possible incremental costs for those operations. It is extremely difficult to estimate what demands we might have to meet later this year and next year – particularly after the election in Afghanistan and after sovereignty is transferred to the Iraqi people. Depending on the circumstances, we could face the need for either more or fewer troops – and more or less intensive operations.
I should note that there is a three-month lag in the availability of our data for actual costs in Afghanistan and Iraq. As of today, we only have figures for the costs of operations in November. Thus we will not know until the fall what our actual costs were for the summer, when sovereignty will have reverted to the Iraqi people.
The Department does not anticipate a further request for DoD supplemental appropriations during the rest of calendar year 2004. Therefore, for several months into FY 2005, the Department will need to cover its incremental costs by drawing down appropriated funds that were budgeted for expenditure later in that fiscal year. We have done this in the previous two fiscal years, and can do so again in FY 2005, as long as the Congress moves quickly to approve a supplemental early in the next calendar year.
Needed Enhanced Authorities
One of the most important ways in which Congress can support the global war on terrorism is to support three special authorities we have requested:
(1) $500 million to train and equip military and security forces in Iraq, Afghanistan, and friendly nearby regional nations to enhance their capability to combat terrorism and support U.S. operations in Iraq and Afghanistan. It is critical that this authority include security forces because the terrorism threat in Iraq is inside its borders. Security forces – not the New Iraqi Army –play the primary role in confronting this threat.
(2) The Commanders Emergency Response Program ($300 million) to enable military leaders in Iraq and Afghanistan to respond to urgent humanitarian relief and reconstruction needs. This has been a remarkably successful program. With quick turnaround projects averaging about $7,000 each, commanders not only help people in their operations area, but also gain their support in defeating terrorists and building themselves a better future. As we have already done in FY 2004, we propose to expand CERP to Afghanistan, as well as to continue the program in Iraq.
(3) Increased drawdown authority ($200 million) under the Afghanistan Freedom Support Act, to provide additional help for the Afghan National Army. During this pivotal year, this authority is critical for advancing democracy and stability in Afghanistan. During my visit to Afghanistan, everyone I met gave very high marks to the professionalism and competence of the ANA. The President’s FY 2005 budget does not request specific appropriations for these three authorities, and therefore the Department would need to reprogram funding to use them. This underscores the importance of Congress increasing the Department’s General Transfer Authority (GTA) to $4 billion – which would still represent just one percent of total DoD funding. Higher GTA also would give us a greater ability to shift funds from less pressing needs to fund must-pay bills and emerging requirements. As we have seen in the past three years, such requirements have become a constant feature of our military programs.
One other authority would be especially helpful, given the uncertainty we face in the global war on terrorism: we need to convert Operation and Maintenance (O&M;) to a two-year appropriation account. This would preclude wasteful end-of-fiscal-year scrambling, help us cover emerging requirements, and enhance our ability to derive the very best value from every appropriated dollar.
Doing Right by Our People
The President’s FY 2005 budget reflects the Administration’s continuing commitment to our military men and women and their families. It requests a 3.5 percent base pay raise and completes the elimination of average out-of-pocket housing costs for military personnel living in private housing. Prior to FY 2001 the average service member had to absorb over 18 percent of these housing costs. The budget also sustains the excellent health care benefits available to military members, retirees and their families. And it keeps us on track to eliminate nearly all its inadequate military family housing units by FY 2007, with complete elimination in FY 2009.
Taking good care of the Department’s people, both military and civilian, includes providing them quality facilities in which to work. To that end, the FY 2005 request funds 95 percent of the Services’ facilities sustainment requirements and continues to improve our facilities recapitalization rate. For the first time, this percentage applies equally to all Services. Providing our people quality facilities requires that we not waste money on redundant facilities and that our basing structure be geared closely to our global strategy and commitments. We need the 2005 Base Realignment and Closure (BRAC) Commission to decide how best to streamline and restructure DoD facilities so that we can make the most out of our funding and optimally support our global strategy.
Force Protection
The FY 2005 request strongly supports force protection, although we are on track to meet most Central Command (CENTCOM) requirements during the current fiscal year. Following are the highlights of our force protection program:
• Interceptor Body Armor (IBA). CENTCOM plans to have 175,000 IBA sets in theater by the end of March, which will fully support its requirements. The FY 2005 budget requests $40 million to sustain production of IBA at 25,000 sets per month until the full Army requirement is met.
• Up armored HMMWV (UAHs). Production will ramp up to 220 per month by May. Production, plus redistribution of UAHs on hand will meet CENTCOM requirements by December. The FY 2005 request is $156 million to procure 818 UAHs.
• Improvised explosive device (IED) jamming/change detection technology. Various detection/jamming devices are in theater. Others will begin arriving in theater in March 2004. Our FY 2005 budget supports increased production and accelerated research and development.
• Vehicle ballistic protection kits. The Army’s plan for add-on armor kits is on track to meet CENTCOM requirements for HMMWV by October 2004, and for other critical vehicles by December 2004. Some 6,310 HMMWV add-on armor kits are expected to be delivered by July 2004.
Transforming How DoD Does Business
I also wish to highlight how the Department is transforming the way in which it conducts its business.
Our primary initiative in this regard is the Business Management Modernization Program (BMMP). This is a massive undertaking involving virtually all DoD management functions, and it will take several more years to complete. We are in the process of transitioning from more than 2,000 mostly incompatible management information systems to a much smaller number of fully compatible systems that will provide leaders everything needed for informed decision-making. We will streamline processes and integrate systems to enable DoD decision-makers to get timely and accurate information to optimize the allocation of defense resources and people. The FY 2005 budget requests about $122 million to continue the evolution and extension of our Business Enterprise Architecture, which is guiding our overhaul. We anticipate that the architecture will lead to a functional accounting system by FY 2007.
Another initiative I want to highlight is military-to-civilian conversion. The Department has identified over 50,000 positions currently filled by military personnel for conversion to positions supported by DoD civilians or contractors. The Services have begun to convert 10,000 positions in FY 2004. The FY 2005 budget includes $572 million to achieve the conversion of another 10,070 positions. I should note that the Defense Finance and Accounting Service (DFAS), which is part of the Comptroller organization, has already converted several hundred positions previously filled by Air Force personnel. The airmen now are available to the Air Force, which can retrain them to fulfill its requirements. Similarly, the Army has been retraining the soldiers formerly assigned to DFAS. In particular, many of these personnel are being retrained at Fort Leavenworth to serve as military police, a specialty which currently is in especially great demand. At the same time, DFAS does not need to hire as many civilians to replace their uniformed predecessors. As a result, DFAS will be more efficient as well.
Closing
These, then, are a few highlights of President Bush’s FY 2005 defense budget and related Department of Defense activities. I would be happy to address your questions on these or any other defense budget matters. Thank you.
