Mr. HUTTO. All right, gentlemen, you may proceed.

STATEMENT OF BRIG. GEN. JOSUE ROBLES, JR., ASSISTANT DIRECTOR FOR OPERATIONS, ARMY BUDGET OFFICE

General ROBLES. Thank you, Mr. Chairman. I'm delighted to get the chance to reappear before your committee. It wasn't very long ago that I was here with Lieutenant General McCall.

I would like to summarize the statement that I have provided for the record, and I would say first of all that this was a difficult process. It seems when you get down to the last few cuts they get more and more difficult. For the Army it was particularly difficult to reduce about $554 million out of the 1990 request and another $674 million out of the 1991 request.

As Mr. Flinn said, we did factor into these reductions the re-evaluation or re-estimation of the currency requirement. This was a significant amount of adjustment as we considered a more favorable currency rate in the next couple of years.

Our reductions primarily reflect results of the force structure reductions that we have taken in the Army plus some associated support costs with these force structure reductions.

Additionally, our reductions reflect some logistical support activities and some logistical supply operations that we had planned to do some improvements on that will not be realized.

Regrettably, the area that we had to turn to and that I personally would not have liked to reduce is our base operations and real property maintenance accounts. We had to reduce over $300 million over both years in both of those accounts These reductions came at the expense of things like our combat field feeding system, and our planned community and morale support activity programs. Most of the reduction in the maintenance and repair area were done with a lot of great pain. We, in fact, agonized over those particular reductions.

Finally, I think if there is a positive side—and I look at the positive side of everything-from an Army perspective, we maintained our Army priorities to protect our near-term readiness. We did protect our operating tempos, and we did protect our flying hour program. We also protected our depot maintenance program, and did not further the backlog in our depot maintenance accounts. Last, we have financed our most essential environmental projects.

So I guess from a summary point of view, from an Army perspective, we, in fact, sir, did protect near-term readiness and sustainability in the Army.

PREPARED STATEMENT OF GENERAL ROBLES

Mr. Chairman and Members of the Committee, I am delighted to have the opportunity to come before you again to present the Army's Amended FY 1990/91 Operation and Maintenance, Army (OMA) Appropriation biennial budget request.

The Amending of the FY 1990/91 OMA budget was a very difficult process for the Army. We had a balanced program that supported Army priorities with a minimum level of funding. Now we are forced to reduce an already austere appropriation down an additional $554 million dollars in FY 1990 and $674 million dollars in FY 1991.

As you are aware, the OMA appropriation provides the essential funding to support the Army leadership's vision of how the Total Army should prepare for land combat today and tomorrow. In making our reductions, we protected nearterm readiness. Without adequate readiness, our soldiers would be unable to fight and utilize their equipment effectively to execute our national military strategy. After careful and deliberate thought, the Army leadership took major program reductions in Base Operations, Real Property Maintenance Activities, Central Supply and Transportation, and Medical programs. Additionally, a foreign currency adjustment from Deutsche Mark 1.75: $1 to 1.89:$1 caused a $205 million reduction in FY 1990 and a $209 million reduction in FY 1991 which affected the majority of the subprograms.

Chart one is a listing of the OMA budget by budget category, which shows the resulting dollar allocation:

The Base Operations and Real Property Maintenance reductions continue to aggravate an already serious problem. Lieutenant General McCall and I were just before this Committee two months ago, and we told you that this program needed assistance. Unfortunately, we had to reduce quality of life programs such as community and morale support activities, the Army field feeding system, and various other installation programs. All of these reductions hurt the Army and will impact on morale and support of Army near-term readiness.

In the Real Property Maintenance Activities, the largest part of the reduction went against Maintenance and Repair. Because of the Amended Budget, the Backlog of Maintenance and Repair (BMAR) grows to $2,894 million in FY 1990 and to $3,534 million in FY 1991. The continued deterioration of the Army's infrastructure will ultimately impact force readiness. Soldiers will be required to work in deteriorated surroundings which adversely impacts on morale and unit war fighting capabilites. In addition, the Army will have to slow its environmental compliance response. Again, these reductions are painful and demonstrate the level of hurt that we are experiencing in the Army.

Chart two shows you the BMAR trail since FY 1980.

OPERATION AND MAINTENANCE, ARMY

OMA Backlog of Maintenance and Repair (BMAR)

The Army attempted to protect Central Supply and Transportation from reductions due to the austere funding levels already being experienced in this program. Despite our best efforts, we were forced to apply decrements of $35 million in FY 1990 and $48 million in FY 1991. This further aggravates the problems we are experiencing in FY 1989 in this activity. Planned marginal improvements in ammunition demilitarization, supply operations, and industrial preparedness will not materialize as a result of these reductions.

The medical reduction of $12 million in FY 1990 and $15 million in FY 1991 will move CHAMPUS workload into the direct care system through management efficiencies. An example of these efficiencies is the increased use of the partnership agreement program. Under this program, health care providers are brought into military medical treatment facilities to treat CHAMPUS beneficiaries, for negotiated fees that are below the respective state allowable limit.

To reiterate the Army's previous position, and to assist us in this period of severe fiscal constraints, the removal of statutory and administrative limitations would greatly increase our commanders' flexibility in adjusting resources to meet our needs. This is especially true in the areas of Advertising; Morale Welfare and Recreation; Depot Maintenance; and Real Property Maintenance Activities. Commanders in the field need this flexibility to meet unexpected contingencies or to exploit opportunities. This will allow them to be even better managers to do more with less.

The Army stands committed to the belief that maximum readiness depends on a rational balance among the investment, personnel, and operation and maintenance appropriations. The budget adjustments protected the Army's goal of maintaining its current readiness and continuing its modernization effort. Our Amended Budget reinforces the need for good stewardship over the scarce resources that we have been allocated. As you can surmise, we can certainly use more funding. Given the fiscal realities of the defense budget reductions and the significant decreases in other elements of the Army budget, we feel that responsible use of these operating resources will allow us to maintain and support the Army's readiness posture.