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The past year on Capitol Hill for the sea services—the Navy, Marine Corps, and Coast Guard—was dominated by the budget process. The year began with the submission of the first two-year budget in the history of the Department of Defense (DoD) and ended with the last-minute passage of a massive federal funding bill. But 1987 may also be remembered for the omnibus budget summit deal reached in the wake of the stock market crash of October 1987, because the terms of this package are likely to dominate the congressional stage in the future.
At this juncture, it seems likely that congressional actions on the sea services’ budgets will be a study in contrasts between the two years. The overriding concern is reducing the federal deficit. With the President’s fiscal year 1988 budget declared “dead on arrival” by many on Capitol Hill, the Congress set about remaking the entire package, while simultaneously trying to adhere to the tough deficit-reduction mandate of the Gramm- Rudman-Hollings Balanced Budget Act. What emerged was political paralysis as both houses of Congress, both political parties, and the administration attempted to hammer out a consensus. But the passage of time and the stock market disaster acted as catalysts and the various factions eventually agreed on a two-year package, setting both tax increases and spending reductions that have major implications for the sea services.
This year, the terms of the budget summit package and assorted election year pressures should preclude a major battle over how the pain of budget reductions will be shared. On the other hand, the levels specified for defense spending for the upcoming fiscal year have already touched off debate on the post-Reagan military posture. Of particular interest are the fate of the 600-ship Navy and the ability of the Coast Guard to meet its current operational commitments.
1987 in Review
This first-ever bienniel budget, submitted by President Ronald Reagan in January 1987, sought $303.3 billion for national security programs for 1988 and $323.3 billion for 1989.
The defense budget request—part of
the first trillion-dollar budget request in U. S. history—sought a 3% after-inflation growth rate during the two-year period. The 1988 request called for program growth in almost all accounts except for procurement. On the other hand, the 1989 request was geared toward merely keeping pace with inflation in every account except procurement, for which the President requested a 9% after-inflation growth rate.
The Navy and Marine Corps share of this request was $101.7 billion for 1988 and $106.8 billion for 1989, less than the overall growth in defense. The Navy budget submission supported expanding the fleet to 605 ships by the end of 1989, and sought $23 billion for the additional 43 ships in the two-year period. The Navy also proposed the purchase of components for the first of two new nuclear- powered aircraft carriers. About $10 billion per year was requested for the procurement of about 480 aircraft.
Reacting to the tight constraints on deficit growth imposed by Gramm- Rudman-Hollings, Congress immediately balked at the magnitude of the proposed defense spending. However, reaching the 1988 Balanced Budget Act’s goal of reducing the deficit to $136 billion demanded more than large defense reductions. To be politically acceptable, any budget plan had to include both domestic spending changes and new taxes. The alternative to crafting a plan that would be acceptable to all was the across-the-board budget cutting process, known as “sequestration,” that is built into the Gramm-Rudman-Hollings law.
In February, Congress began to craft its own budget plan as an alternative to the President’s. Five months later. Congress had agreed on an outline. Relative to the President’s request, the congressional budget plan increased domestic spending, proposed new taxes, and cut defense spending. But the defense spending agreement was unique. With the House of Representatives seeking a lower figure and the Senate—under new Democratic leadership—seeking a higher figure, the plan resolved the impasse by including both levels. The lower figure was set at $287 billion in new budget authority (a reduction of $16 billion from the request), with outlays—or actual spend
ing in the fiscal year—of $283.6 billi011^ But the congressional plan also inclu1ae a larger defense spending level at S-y. billion in budget authority and $2°y- billion in outlays. Achievement of thlS latter figure was made contingent on t ^ President’s agreement to a package 0 new taxes totaling $19 billion, of wiuc $7 billion would go to defense. g Aside from the extra work required r produce two budget marks, the resolute also posed a difficult although sontewha arcane problem to the Senate and Hou-
Armed Services Committees as they Pre
au-
pared their versions of the defense
thorization bill. Both committees
were
disposed to go even further than the PrtS ident’s 1988 budget to support person^ and readiness items rather than procure ment accounts. But because these aC counts have higher first-year outlays the the procurement accounts, the authon/J tion bill that finally emerged in N°ven^ ber could not meet the outlay targets s in the congressional budget plan at eh level of spending authority. This harm6 the chances for gaining political conse11 sus on them.
Aside from problems with the budg1- ^ the authorization process also becau^
entangled in arms control matters, example, the House version of the
required the administration to adhere 1
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lO«S
• • • - rhe
with yields of more than one kiloton-
Senate bill contained a provision lm*1.^ funding for the strategic defense initiaf (SDI) with continued adherence to antiballistic missile (ABM) treaty- this point, the Senate found itself in a
bid
the numerical sublimits of the SALT treaty and to stop testing nuclear weaP'
buster that tied up progress on the at1 ization bill for months.
tive
th«
On
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ithor-
bid
But by the time the authorization ^ was enacted into law, in early Deccnibc' ^ authorizing funds for defense at both , els specified in the congressional buds . resolution—the budget landscape { changed considerably. The stock mar crash in mid-October and the inability
Congress and the administration to a, on a budget brought a call for coitd
action to reduce the deficit and res
-ret6
to^
:eks;
faith in the budget process. For vvCLcj representatives of both branches lab°
toward a compromise. The budget
sum
mit deal that ultimately emerged sp1
eCi-
ability of Navy ships, threatened sea-skimming cruise missiles used' more and more nations. The report ot Navy’s Blue Ribbon Panel on Ship vivability—commissioned by the Se ^ tary of the Navy early last sumtner became the focus of hearings ® 1
isulF
revealed that even though the air'
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craft of opportunity program run by
effort to replace the existing fleet oceangoing minesweepers was
ofaginS
lagginS'
raitd’
Both replacement shipbuilding Pr0^‘^
for the larger mine countermeasures^ and the smaller coastal minehunter, behind schedule. .
Congressional interest also was st in 1987 by the Commission on Me® ^ Marine and Defense’s finding that a ^ vere deficit exists in the defense-re 3
had'
uire'
in
ted.
impre'
sp0"'
sored shipbuilding and cargo genera j
■ - • o a?3
sional interest in the sea services e
budget summit agreement.
from the plan previously submitted Congress. The Navy and Marine absorbed $12.3 billion of the reduc ^ losing 16 frigates and one strategic marine to retirement; halting the st'
fied the parameters for both defense and non-defense discretionary spending, as well as for tax increases, for both fiscal years 1988 and 1989.
Against this backdrop, the Congress worked to fill in the details during the weeks between Thanksgiving and Christmas. Two bills emerged. A “reconciliation” bill specified how the spending reductions mandated by the summit agreement would be achieved; and the year-long “continuing resolution” set spending levels for the remainder of fiscal year 1988. Included in this $600 billion package was the Defense Appropriations Act, designed to meet the terms of the summit deal: $292 billion in new budget authority and $284.5 billion in outlays. The appropriations measure met its mark by cutting into operations and maintenance and research and development funds, while holding the line in personnel and adding to the amount requested for hardware procurement.
Included in the increase in the procurement line was full funding for two new Nimitz (CVN-68)-class aircraft carriers, for which only long-lead funds had been requested. In a time of supposed budget austerity, their inclusion is an interesting study in the politics of the budget process. As in the case of the congressional budget resolution, the summit agreement set the outlay figure at a low level relative to the spending authority that was to be provided. But even though the appropriations committees cut into those accounts that contribute a greater percentage to first-year outlays, they still could not come up with a package of reductions that met both the spending authority and outlay targets of the summit deal simulta-
1988
Military
Almanacs
• Uniformed Services Almanac
• Reserve Forces Almanac
• Retired Military Almanac
These inexpensive 204-page reference books on military pay and benefits and other vital information can be purchased from most military exchange stores or can be ordered directly from the publisher by sending a check for only $4.25 ($5.75 for 1st class mail) for each copy to: UNIFORMED SERVICES ALMANAC, INC.. P.O. BOX 76, WASHINGTON, DC 20044. Specify the title(s).
neously. Indeed, the committees ended up meeting the outlay mark but fell far short of the budget authority figure. Nevertheless, because shipbuilding has very low outlays in the first year of authorization, the addition of new ship construction—in particular the two carriers and a Ticonderoga (CG-47)-class Aegis guided-missile cruiser—filled the need.
Falling under the non-defense side of the budget, the Coast Guard also had a difficult time meeting the budget summit terms. Out of a requested budget of about $2.8 billion—roughly two-thirds of which goes to operating expenses—the Coast Guard got hit with a reduction of slightly more than $100 million. The $2.74 billion appropriated for fiscal year 1988 was some $32 million less than the Coast Guard had received the previous year. The response was immediate and widespread;
► About 50 Coast Guard facilities have been or will be shut down as a result of the reductions.
► A wide variety of operations, including drug interdiction, have been cut back.
► The active-duty service obligations of some Coast Guard Academy graduates will be shortened.
As the results of the Coast Guard’s budget reduction became more apparent, Congress took steps to appropriate supplemental funds to make up the shortfalls. The administration opposed the additional appropriations, arguing that approving the funds would violate the terms of the budget summit agreement. The administration said some additional funds might be found elsewhere in the Department of Transportation—the Coast Guard’s parent agency.
Although the budget surely dominated congressional interest in the sea services in 1987, it was not the sole focus of attention. The Senate Armed Services Committee, and later the House Armed Services Committee, held a series of hearings on U.S. national security strategy. Of particular interest in these hearings were the issues of the maritime strategy—especially the degree to which it comports with overall national strategy—and the efficacy of a 15-carrier battle group, 600-ship Navy across the spectrum of conflict.
The Navy came under intense congressional scrutiny with respect to its posture in the Persian Gulf. This came in the wake of the tragic Iraqi attack on the USS Stark (FFG-31) in mid-May and the mine damage to the reflagged Kuwaiti tanker Bridgeton during the first escorted convoy operation. In particular, congressmen raised questions about the surviv
House of Representatives. As a re Congress made additional funds avail3 ^ to increase the supplies of firefigM1^ damage control, and personal protec equipment in the fleet. The Navy/1* report this spring on the progress d made toward the goals established by Blue Ribbon Panel Report.
The mining of the Bridgeton drew gressional attention to the Navy s y mine countermeasures forces. Testin' •_
airbed1
• r and the
mine countermeasures forces an“ ,.
i
Naval Reserve were being improved capabilities of the U.S.-flag Me® Marine. Created about three years af examine the national security red ^ ments for sealift, the presidential^ pointed commission has document its initial set of findings and recon dations, that the nation needs a co hensive program of government- in addition to changes in current lavV. s regulations. Congress will hold heat * and, no doubt, will consider legislate implement the recommendations.
The Outlook for 1988
The budget will dominate cofle onal interest in the
this year, but in a different way. CUnfs mitted in mid-February, the Presi ^ fiscal year 1989 defense budge1 ^ amended version of the two-year b , submitted last year—meets the b “j.j authority and outlay targets of last
However, because the budget su agreement called for new defense sp ^|. ing authority of no more than $299- ^ lion, roughly $33 billion had t0^,tli{
Co<PS
O3’
utr
the 14th carrier air wing; and cutting aek planned active duty, reserve, and c>vilian end-strength increases. The Navy a -) terminated its A-6F and naval airship pr°grams, and deferred increased pro- Uction of certain missiles and torpedoes. 'A's amended, the budget supports the instruction of 17 new ships and 192 new ^iraft. In keeping with Secretary of ^.efense Frank Carlucci’s stated priori- 'i'7quality personnel, readiness, and 'nient acquisition—the budget also uPports a 4.3% military pay raise, and atntains training opportunities.
The Coast Guard’s budget request of ■98 billion would compensate for some ^ the losses in fiscal year 1988. Funds °u'd be available for the restoration of nte personnel losses, and for readiness r°grams. There also would be more °ney for equipment and shore facility °dernization. A major unanswered h estion is whether facility closures and
ready to eschew continued growth in force structure, in favor of personnel and readiness programs.
This situation will pose an interesting dilemma for the members of the sea services, who are called daily to stretch their forces to the limit while meeting global deployment commitments. The people, ships, and aircraft of these smaller forces will have to work harder to match the demands placed upon them. Consequently, the challenge for the Congress, as well as the administration, in the coming years will be to achieve a workable
balance between the competing requirements of readiness and force structure, as defense resources continue to dry up.
A 1969 graduate of the U.S. Naval Academy. Dr. Cavaiola served on active duty for ten years and is currently a commander in the Naval Reserve and a professional staff member of the House Armed Services Committe. He is also a Phi Beta Kappa graduate of the Johns Hopkins University, where he was awarded an M.S.E. and Ph.D. in operations research. He has taught at the Naval Postgraduate School and served in the Office of the Secretary of Defense (Program Analysis and Evaluation) and as a principal analyst in the Congressional Budget Office.
ON THE ROAD TO SOLVING ENGINE TEST PROBLEMS
other
cal
new
actions taken in response to the fis- Tear 1988 cuts can be restored by the budget, if it is approved.
Th
dj ne major sea service issue raised by budget is the postponement of 6 ‘eying the 600-ship Navy. Instead of (L ships predicted to be in the fleet by w^.end of fiscal year the total now the k.e about 580. Congress is debating ord W'St*om °f setting aside that goal in proer to maintain personnel and readiness Prams in this tight budget year—or reae«>er some attempt should be made to ch the 600-ship level sooner, seems likely, however, that the cur- k debate about the size of the Navy is a lnger of debates that will occur over
barb
dCfnext several years, as growth in the ned6fSe krrdget slows because of contin- def ec*era' deficit pressures. Just as the p®ase budget for fiscal year 1989 was figu ^ some $33 billion, the budget res used for outyear planning are also t0 scaled back dramatically. Relative for 6 five-year plan submitted last year,
bp;Ures Used for outyear planning are also "8 scale,
,he five-
•Or a » t •»
'ban *amP'e> fhe DoD is shaving more ipe8 *T0 billion from its projections to Pm(cra 2% annual after-inflation growth
gr()aay in Congress say even a 2% 'b 'n defense spending is too high. Spene8ative real growth in defense den 'nP 'n toe past four years is evi- easee °f the lawmakers’ mood. In any bjjJ 'f the halcyon days of the early 'be D ^ tmly behind us, Congress and
ki
ind
of
will have to decide just what
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