Mr. HUTTO. We thank you very much for being here with us. Thank you. General PIATAK. Thank you. Mr. HUTTO. The subcommittee stands adjourned until 9:30 Tuesday morning, March 7. [Whereupon, at 3:30 p.m., the subcommittee was adjourned, to reconvene at 9:30 a.m., Tuesday, March 7, 1989.] NAVY/MARINE CORPS O&M HOUSE OF REPRESENTATIVES, Washington, DC, Tuesday, March 7, 1989. The subcommittee met, pursuant to notice, at 1:32 p.m., in room 2337, Rayburn House Office Building, Hon. Earl Hutto (chairman of the subcommittee) presiding. STATEMENT OF HON. EARL HUTTO, A REPRESENTATIVE FROM FLORIDA, CHAIRMAN, READINESS SUBCOMMITTEE Mr. HUTTO. The Subcommittee on Readiness will please come to order. This afternoon, the subcommittee will continue its consideration of the fiscal years 1990-1991 Department of Defense Operation and Maintenance Budget request with testimony from Navy and Marine Corps witnesses. Even though the testimony we will receive does not reflect the changes associated with President Bush's reductions to the defense budget prepared by the last administration, the basic thrust and areas of emphasis should remain the same. A close examination of the details of this austere O&M budget request raise a number of serious concerns about the future readiness and well being of Navy and Marine Corps units and personnel. Equally troubling is the realization that the shortfalls we find today are not likely to get any better during the ongoing budget amendment process in the Pentagon or upcoming deliberations on Capitol Hill. I say this for two reason. First, despite protestations that everyone supports readiness and O&M funding levels, we inevitably find ourselves trapped by the "iron law of outlay reduction." At some point in the process an outlay target is going to be given and outlay rich accounts like O&M are going to have to face additional reductions. The commitment to readiness seems to evaporate when the choice is to cut $1 of O&M, or $5 of procurement, $8 of shipbuilding, or $3 of RDT&E to generate the same first year outlay savings. This outcome is not fair and it is not wise. But, it appears to be inevitable if outlay cuts remain essential for deficit reduction efforts. The second reason for my pessimism is the fact that some of the assumptions upon which O&M funding levels are based have been consistently off the mark. Despite vigorous management efforts over the past 5 years, medical cost projections have been underestimated by at least $350 million each year. The same goes for dollar (671) exchange rates overseas. Oil prices continue to be dynamic and who can say whether current DOD projections are accurate? In addition to the kinds of uncertainty that are difficult to predict, the current DOD request contains a number of assumptions that appear to be politically and operationally suspect. For example, it is unlikely that Congress will give the military a 3.8 percent cost of living increase in fiscal year 1990 and not give civilian employees the same percentage increase. It is also difficult to see how the Navy is going to reduce its commitment in the Persian Gulf area to pre-tanker war operating levels in the next 7 months. The important thing to keep in mind is that all of these uncertain assumptions generate "must pay" bills during budget execution that must be addressed through funding transfers. Hopefully, other DOD accounts will provide most of the offsets. But, it is unlikely that O&M programs will be spared in the process. Given this atmosphere of uncertainty, it is instructive to look at the current Navy and Marine Corps O&M request using some of the yardsticks the subcommittee has used in the past. In 1981, this subcommittee was alarmed over Navy and Marine Corps depot maintenance backlogs of $188.8 million. In fiscal year 1990, the backlog is projected to be $629.6 million. In 1981, the Readiness Subcommittee was shocked to find that the backlog of maintenance and repair or real property for the Navy and Marine Corps was $564 million. In fiscal year 1990, the backlog is projected to be $2.3 billion. In 1981, the Subcommittee was concerned that Navy OPTEMPO requirements driven by Indian Ocean operations were being met at the expense of training elsewhere. In fiscal year 1990, the adequacy of Navy OPTEMPO funding is predicated on a rapid decrease of U.S. Naval presence in the Persian Gulf. Otherwise, training or other missions will have to be reduced. I am not saying these things today are as bad as they were in 1981, or that these comparative numbers may appear worse than they are. But, they do not leave much room for complacency if these trend-lines are permitted to continue. They also tell us that we should not lose sight of the uncertainties and stern realities behind the numbers as we look at the current Navy and Marine Corps request. With this in mind, we look forward to the testimony and the responses to questions of our witnesses today to provide a sound basis for the tough decisions that we will be making in the coming weeks. Before proceeding I would like to recognize Mr. Dave O'B. Martin for his comments. Mr. Martin. STATEMENT OF HON. DAVID O’B. MARTIN, A REPRESENTATIVE FROM NEW YORK Mr. MARTIN. Thank you very much, Mr. Chairman. Admiral Arthur, there must be a typo here. Eleven Distinguished Flying Crosses? Admiral ARTHUR. Yes, sir. Mr. MARTIN. 1-1, 11? Admiral ARTHUR. No, that is eleven, sir. Mr. MARTIN. It is a privilege for us to have you here. You have to believe it is a privilege for you to be here as well. [Laughter.] Admiral ARTHUR. Yes, sir. Mr. MARTIN. Welcome. I have been waiting for this forum for some time relative to the readiness of our Navy/Marine Corps team. I brought the question I have up with the CINC's when they were here, particularly CINCPAC, relative to what I note to be a 1.2 percent increase. Is that the correct figure in readiness for the Department of the Navy? Which translates into a 2.2 percent increase in O&M funds for the Navy and 9 percent cut to the Marine Corps. I brought this up in the context of the cut in training funds that the CINC's have, which as they point out are only compounded by the cuts within the various services. I will be asking you gentleman to take as much time as you wish to explain, particularly the General, and I know this was not your idea. But this morning we are talking about a 34 percent cut in Marine Corps military construction. We laid off three rifle regiments in the last budget. Now we are talking about a 9 percent cut in O&M funds, severe restrictions in training and that kind of thing in this budget and the next budget. How you are going to do all that and still maintain any semblance of readiness in training is going to be my question. But I thought I would offer that up front so that you would have some time to think about it until my time for questioning comes around. Again, thank you so much for coming here. I look forward to hearing your testimony. Mr. HUTTO. Thank you, Mr. Martin. We are pleased to have with us today to discuss the subject of Navy and Marine Corps operation and maintenance Vice Adm. Stanley R. Arthur, the USN, Deputy Chief of Naval Operations for logistics; Lt. Gen. W.G. Carson, Jr., USMC, Deputy Chief of Staff for Installations and Logistics; Rear Adm. Raymond M. Walsh, USN, Director Operations Division, Office of Budget and Reports. Gentleman, we welcome you here. Admiral Arthur we will be delighted to hear your testimony. STATEMENT OF VICE ADM. STANLEY R. ARTHUR, USN, DEPUTY CHIEF OF NAVAL OPERATIONS, LOGISTICS; ACCOMPANIED BY: REAR ADM. RAYMOND M. WALSH, USN, DIRECTOR, OPERATIONS DIVISION, OFFICE OF BUDGET AND REPORTS Admiral ARTHUR. Thank you, Mr. Chairman. It is a privilege to again appear before this committee to present an overview of the Navy's fiscal year 1990 and 1991 Operation and Maintenance appropriations. This committee has always represented an effective advocacy for the readiness of the Navy. Mr. Chairman, we look forward to working with you to those same ends again. I have a prepared statement, which I would like to submit for the record. Mr. HUTTO. Without objection, your entire statement will be admitted for the record and you may summarize. PREPARED STATEMENT OF VICE ADM. STANLEY R. ARTHUR, USN Vice Admiral Stanley R. Arthur Vice Admiral Stanley R. Arthur was born in San Diego, California, on 27 September 1935. He entered the U.S. Navy through the Navy Reserve Officer Training Corps program at Miami University and was commissioned in June 1957. Designated a Naval Aviator in 1958, he reported to VS-21 at NAS North Island and in 1960 he became a "Plank Owner" in VS-29. Assigned to the U.S. Naval Postgraduate School in 1962, he was awarded a Bachelor of Science Degree in Aeronautical Engineering in 1964. His next tour of duty was with VX-1 at Key West, Florida, as Weapons Project Officer. He reported to VA-122 as an A-7 instructor pilot and maintenance officer. Additionally, he became the first Officer in Charge of COMFAIRLEMOORE Weapons Training Center. In July 1971 Commander Arthur reported to VA-164 as Executive Officer and assumed command a year later while deployed onboard USS HANCOCK. During this tour he completed over 500 combat missions in the A-4 Skyhawk. In August 1973 he reported to the Industrial College of the Armed Forces. While there he also attended George Washington University and acquired his Master of Science Degree in Administration. Upon completion he reported to the Bureau of Naval Personnel, where he served as Head of the Aviation Lieutenant Commander and Junior Officer Assignment Branch. He reported onboard USS SAN JOSE as Commanding Officer in July 1976 and to the CNO's Senior Officer Ship Material Readiness Course, Idaho Falls, in January 1978. Captain Arthur assumed command of USS CORAL SEA in June 1978. In In January 1980, Captain Arthur joined the Staff of the Commander in Chief, U.S. Pacific Fleet, Pearl Harbor, for duty as the Fleet Operations Officer and Assistant Chief of Staff for Operations. Selected for Rear Admiral during this tour, he was re-assigned as Assistant Chief of Staff for Plans and Policy with additional duty as Commander rapid Deployment Naval Forces. January 1983 the U.S. Naval Forces Central Command was established with Rear Admiral Arthur as its first Commander. Rear Admiral Arthur served as Commander Carrier Group SEVEN onboard USS RANGER in July 1983. Rear Admiral Arthur was then ordered to Washington as Director, Aviation Plans and Requirements Division (OP-50) in August 1985. In June 1986 he assumed duties as the Director, General Planning and Programming Division (OP-90). Selected for the rank of Vice Admiral, he assumed his present duties as Deputy Chief of Naval Operations (Logistics) in February 1988. |