will provide the pilot a "launch and maneuver" capability, add the capability for multiple target attacks during a single intercept and have improved resistance to electronic countermeasures. Greater accuracy, improved fuzing and increased warhead lethality combine to enhance the total system. The missile's combat capability will double the effectiveness of the F-15 and will increase that of the F-16 in the air-to-air role by a factor of six.

The U. S. Air Force plans a total buy of 2,729 F-16s from 1978 through 1995 to replace aging F-4s and to modernize the Air Reserve Forces. Improvements to this aircraft, like the F-15, include the AMRAAM, LANTIRN, the Airborne Self-Protection Jammer (ASPJ), the ALR-74 or ALR-56M radar warning receiver and the Navstar Global Positioning System (GPS) equipment. Under a multiyear procurement through 1989, this contract will save $467 million over annual procurements.

In October 1986, we selected the modified F-16A as the winner of the Air Defense Fighter (ADF)

Competition. We will retrofit 270 F-16A aircraft with a radar missile capability: AIM-7 Sparrow and AIM120 AMRAAM. F-16 ADF models will begin service in 1989 with the last modified aircraft due off the retrofit line in 1990. These aircraft will be operated exclusively by Air National Guard units.

In the future, the Advanced Tactical Fighter (ATF) program will develop a new fighter aircraft for introduction in the mid-1990s. A follow-on to the F-15, the ATF will be an air superiority fighter capable of performing offensive counterair operations in enemy airspace and countering current and projected Soviet fighters. In October 1986, the Air Force awarded contracts to two contractor teams, one led by Northrop Corporation and the other by Lockheed, to conduct the demonstration and validation phase of the program. During this four-year risk reduction period, each contractor team will build two flying prototypes and one ground-based avionics demonstrator. First flight of the prototypes is scheduled for 1990.

OPERATIONS IN SPACE

The loss of the Space Shuttle Challenger and expendable launch vehicle failures have seriously impacted the Nation's space launch capability. However, these failures have given us the opportunity to reevaluate our space launch strategy. Along with the National Aeronautics and Space Administration, the Department of Defense has developed a plan to rebuild a robust space launch capability to assure our Nation's access to space. This plan is now well underway.

The objective of the DoD strategy for assured access to space is to provide alternatives to any single path of launch support, the loss of which would prevent the replenishment of critical DoD satellites.

This strategy is based on a mixed fleet of launch vehicles comprised of both manned elements such as the Shuttle, and unmanned elements such as the Titan family of expendable launch vehicles. Dualcompatibility is another cornerstone of the recovery plan. That is, critical mission payloads are being designed for launch on either the Shuttle or on an expendable launch vehicle. For those cases where two satellite programs support & critical mission,

I. INVESTING IN THE FUTURE

A. MAINTAINING THE MILITARY BALANCE

The proposed Air Force program for the Fiscal Years 1988-1989 Budget will have a significant impact on the readiness, sustainability,

modernization, and force structure posture. Fiscal constraints have caused modernization efforts to be stretched out over a longer period of time, force structure to be diminished, and training and support activities to be reduced. The net result of these reductions has been to erode the qualitative edge of our military posture. It is essential that adequate resources be provided to ensure that our essential warfighting capabilities are not impaired in providing a credible deterrence.

The Air Force continues to place a high priority on the modernization of its strategic forces. The aim of this vital effort is to make command, control, and communication systems more survivable and endurable. The development and deployment of the Peacekeeper missile, the Small Intercontinental Ballistic Missile (SICBM), the B-1B and Advanced Technology Bomber (ATB), the AGM86B Air-Launched Cruise Missile (ALCM), the Advanced Cruise Missile (ACM), and the Short Range Attack Missile (SRAM II) are essential for deterrence and to enable the United States to enter meaningful arms control agreements.

The Air Force also continues to obtain more capable combat aircraft and modernization munitions while planning for a goal of 40 tactical fighter wing equivalents. Additionally, the modernization of the KC-135 fleet and deployment of

KC-10 tanker and cargo aircraft will enhance our refueling and airlift forces.

The Key, however, to mission accomplishment is the men and women who have chosen to serve. The quality of men and women in the Air Force has never been higher. The combination of good people and effective programs has made the Air Force more professional, reliable, and capable. The continued support of the Congress and the American people will be critical to maintaining improvements in military preparedness.

B. Fiscal Years 1988-1989 Air Force Budget - Investment Accounts

In Fiscal Years 1988 and 1989, Air Force priorities are to stay the course with improvements most vital to combat capability: Modernize strategic offensive and defensive forces; improve readiness and sustainability of general purpose forces; enhance airlift capability; revitalize Special Operations Forces; modernize and expand tactical forces; and improve operations in space. The charts on the following pages illustrate the allocation of funds among the Air Force appropriations for 1988, 1989 and the percentage change from the previous year.

Through the programming and budgeting review process the Air Force has reduced its 1988-1989 Defense Plan for total obligation authority by $9.8 billion and $8.8 billion, respectively, with respect to the 1987 President's Budget. Further, $9.1 and $8.1 billion have been removed relative to the 1987 President's Budget Request for this two-year period for the investment appropriations of research, development, test and evaluation;

procurement;

and military construction. However, the research and development (R&D) increased by $.8 and $.5 billion in 1988 and 1989, respectively.

The overall increases in R&D are due to the continuation of the President's strategic modernization program, specifically, the B-1B bomber, Minuteman, and Peacekeeper missiles. Development efforts in the SRAM II, C-17, and the Advanced Tactical Fighter are also contributing to this R&D increase. Finally, science and technology investment is on the increase as we are building this account to two percent of total obligation authority by the mid-1990s. The National Aerospace Plane is the predominant beneficiary.

With regard to aircraft procurement, the Air Force has reduced the 1988 and 1989 Budget Request by $6.5 and $5.1 billion,

respectively, from the

1987

President's Budget. The F-15 has been reduced six aircraft per year, the F-16 has been reduced 36 aircraft per year, and the Advanced Tactical Fighter production decision was delayed one year. C-17 production is just beginning with two aircraft procured in 1988 and four procured in 1989.

Regarding missile procurement, the Air Force has reduced the 1988 and 1989 Budget Request by $1.5 billion each year from the 1987 President's Budget. The SRAM II has been delayed two years and production rates have been reduced. Maverick missile production was reduced by 4900 missiles in 1988 and 5100 in 1989. However, the Anti-Satellite and Space Boosters programs were increased.

Finally, the table below summarizes the real growth rates in 1988 and 1989 for various categories using the 1987 Appropriations Bill as a baseline: