Security, the Nation has a better coordinated, focused, and funded system to protect America from terrorist attack.

WINNING THE WAR ON TERROR

Three years ago, Afghanistan was ruled by the brutal Taliban regime and was the home base from which al-Qaida was able to plan the September 11th attacks. American and coalition troops liberated the Afghan people. In October, 2004, Afghanistan held its first free and fair democratic Presidential election, giving new hope to some 25 million people.

Likewise, three years ago, Iraq was ruled by a tyrant who provided a safe haven for terrorists, invaded his neighbors, had used weapons of mass destruction against his own people, and defied the will of the world by failing to disclose his plans to develop such weapons again in the future. The Iraqi people are now confronting many challenges, but are creating in the heart of the Middle East an example of freedom and democracy. Iraqi security forces are fighting alongside coalition troops to defeat insurgents and foreign fighters. The Iraqi people have taken the first steps toward freedom and self-government. Ensuring security in Iraq and Afghanistan requires dedication and sacrifice. The 2006 Budget, and the 2005 supplemental request, will ensure that our Armed Forces have the resources to get the job done. The Administration's 2005 supplemental request will provide funding for military capabilities, troop support, force protection, repair of damaged equipment, the training of Iraqi and Afghan security forces, and increased intelligence support.

Security in Iraq and Afghanistan

Our goal is to ensure Iraqis and Afghans are fully capable of defending themselves and their new societies against the forces of terrorism. The Department of Defense (DOD) and the Department of State have devoted substantial resources to train and equip security forces in Iraq and Afghanistan.

The coalition faces difficult challenges in training and equipping Iraqi security forces, as these forces continue to face targeted attacks by insurgents. However, despite these challenges, coalition forces had trained nearly 127,000 Iraqi security forces as of mid-January and continue training the Iraqi army, police, and other security forces, such as border enforcement personnel, to provide for their own country's security. The 2005 supplemental request will allow us to accelerate the work we have started.

Similarly in Afghanistan, DOD is training the Afghan National Army (ANA). The ANA is now fighting terrorism and maintaining security with a force of 16,000 troops, including soldiers from all

of Afghanistan's ethnic groups. DOD will accelerate training to help the Afghans develop their own military capabilities.

Along with other nations, the United States is also making long-term investments in both Iraq and Afghanistan. Key infrastructure projects in Iraq will create jobs and provide millions of Iraqis with greater access to basic services, such as clean water, electricity, and reliable telecommunications systems. In both Iraq and Afghanistan, U.S. aid coordinated by the State Department and the Agency for International Development, will continue to build the local capacity to deliver healthcare and other basic services, collect revenues, and develop the framework necessary for a modern and open

economy.

The Budget also devotes resources to protect Afghanistan's democratic and economic development from the drug trade by providing funding to eradicate poppy crops; develop alternative cash crops; interdict the drug flow; prosecute drug traffickers; and build Afghanistan's counter-narcotics capabilities.

The Commander's Emergency Response Program (CERP) provides the funds for U.S. troops to assist Iraqis and Afghans with critical reconstruction and assistance projects. Commanders on the ground are able to provide assistance in a streamlined fashion, which means money is available to respond to needs right away. CERP has helped troops on the ground build goodwill with Iraqis, which in turn supports the overall mission. Since the inception of CERP, commanders have spent almost $250 million to directly improve education, healthcare, electricity, water, and security. The 2006 Budget and

2005 supplemental propose to continue the authority for CERP. The Budget requests authority for an additional $300 million and the supplemental will request additional 2005 funds and authority.

Strengthening Our National Guard and Reserves

During 2005, the Administration expects to have more than 163,000 National Guard and Reservists mobilized across all services supporting the Global War on Terror. In recognition of the burdens placed on our mobilized Guardsmen and Reservists, the President proposed and signed into law increases to their Montgomery GI Bill education benefits, if mobilized for 90 days or more. In addition, Guardsmen and Reservists have benefited from enhanced compensation, including a new bonus for conversion to a different military specialty; revised enlistment and reenlistment bonuses; and enhanced health benefits, including better pre- and post-mobilization coverage. Guardsmen and Reservists who have been deployed also benefited from active-duty compensation increases.

Blocking Terrorist Financing

The United States continues to work with friends and allies to disrupt the financing of terrorism by identifying and blocking the sources of funding, freezing the assets of terrorists and those who support them, denying terrorists access to the international financial system, protecting legitimate charities from being abused by terrorists, and preventing the movement of assets through alternative financial networks.

The Budget commits over $100 million to the Department of the Treasury's efforts to protect America by detecting and stopping financial crimes, money laundering, and terrorist financing. The Office of Terrorism and Financial Intelligence safeguards financial systems against illicit use by rogue nations, terrorist facilitators, money launderers, drug kingpins, and other national security threats. One of the most visible and effective tactics of the comprehensive strategy has been public designation of terrorists and terrorist organizations.

Since September 2001, the

United States and our allies have designated

397 terrorist-related entities and frozen nearly $147 million in terrorist assets worldwide.

Intelligence Reform

The recently enacted Intelligence Reform and Terrorism Prevention Act of 2004 builds on the reforms implemented by these agencies and by executive orders on information sharing, intelligence community management, and the National Counterterrorism Center (NCTC). The new Director of National Intelligence (DNI) is empowered to set funding, collection, and analytic priorities across the national intelligence program in consultation with appropriate Department and agency heads. In addition, the DNI will spearhead efforts to improve information sharing within the intelligence community.

The recently created NCTC has already become a critical player in the war on terror. The NCTC expands on the analytic mission of the former Terrorist Threat Integration Center by serving as the primary organization in the U.S. Government for analyzing and integrating intelligence pertaining to terrorism and counterterrorism; serving as the central and shared knowledge bank on known and suspected terrorists and international terror groups; and ensuring that agencies, as appropriate, have access to and receive the all-source intelligence support needed to execute their counterterrorism plans or perform independent, alternative analysis. The NCTC will improve our ability to mount coordinated, strategic operations against terrorism.

Fighting Terror by Promoting Democracy

The best hope for achieving peace in our world is the expansion of freedom. The 2006 Budget funds initiatives to promote democracy and reform, particularly in the Middle East, North Africa, and other majority Muslim countries. For example, the Budget includes $80 million for the National Endowment for Democracy to enhance its efforts to strengthen democratic institutions, the rule of law, human rights, civic education, and independent media.

The Budget also includes $120 million for the Middle East Partnership Initiative, a cornerstone of the State Department's approach to supporting political and economic reform in the region. All these activities promote long-term reforms by advancing democratic and economic freedom, which diminishes terror organizations' ability to recruit.

To promote better understanding of America and American ideals, the Budget includes $180 million in 2006 for exchange programs in countries with significant Muslim populations, including the Near East, South Asia, Indonesia, and parts of Africa and Europe. Public diplomacy in the region will support the continuation of several priority programs, including American Corners-locations

around the world that provide access to information about America through the Internet, guest speakers, and other events for non-Americans in a neutral setting. The 2006 Budget for the Broadcasting Board of Governors includes an increase to significantly expand television broadcasting to Iran, Pakistan, and Afghanistan in 2006, following the successful launch of its Arabic news satellite television channel, al-Hurra, in 2004.

The successful presidential election held by the Palestinian Authority is an important step toward the building of democratic institutions needed for realization of the President's vision of two states, Israel and Palestine, living side by side in peace and security. The United States will take a leading role in helping Palestinians build a viable economy and democratic institutions, and the security institutions they need to fight and defeat terror. The Budget contains $150 million for projects aiding the Palestinians in infrastructure and democracy building.

Fighting Terror with Development

Persistent poverty and oppression can lead to the kind of despair and failed states that become havens for terror. The United States is the world's leader in providing development and humanitarian assistance, opening up our markets for trade, and providing peacekeeping assistance to regions where peace and stability are needed. In 2002, the President pledged that the United States would lead by example and increase its core development assistance by 50 percent, or $5 billion, by 2006. The 2006 Budget exceeds this commitment-the request for core development assistance is $8.2 billion above the amount appropriated in 2002. Moreover, President Bush has increased official development assistance more than at any other time since the Marshall Plan, reversing decades of decline in assistance as a percentage of GDP. This positive trend will continue in future years as two of the President's main foreign policy initiatives-the fight against HIV/AIDS and the Millennium Challenge Account-disburse more funds to promote development and reform and fight suffering and poverty.

TRANSFORMATION OF OUR MILITARY

Even as our men and women in uniform continue to wage the War on Terror in Iraq and Afghanistan, DOD is adapting to face new and emerging threats. Much of the increase in defense budgets has been devoted to transforming our Nation's military capabilities and laying the foundation for winning the War on Terror. This process is dynamic and requires an ongoing adjustment of national security priorities. DOD has begun a strategic analysis that will form the basis of the 2005 Quadrennial Review. This review will further refine the Nation's long-range security requirements and assessment of needed capabilities.

Global Posture Initiative

To be better prepared to respond rapidly to the threats of the 21st Century, the Administration is committed to transforming all aspects of the U.S. global defense posture, including our infrastructure, personnel, and equipment. In August 2004, the President announced the most comprehensive restructuring of U.S. military forces overseas since the end of the Korean War. The Global Posture Initiative entails working with more partners around the world to use our military capabilities more effectively. As a first step, the initiative repositions U.S. forces from Cold War bases to areas of strategic importance today. Such new basing strategies will provide the United States rapid access to areas where contingency operations may arise but where a large permanent presence is not required. In the next decade, 70,000 military personnel, and 100,000 family members and other civilians, are expected to return to the United States as part of this effort. The initiative will be implemented over

the next 10 years. To begin this effort, the Administration has added $416 million in the 2006 Budget, and plans to request $3.5 billion more through 2011.

Tools of Transformation

The Department is working on a wide range of new technologies, especially those that can protect military personnel while allowing them to perform their mission more effectively. The Department's research and development efforts in this area are broad in scope. They range, for example, from the development of new materials for troop clothing to provide better camouflage and improved comfort and health, to new ways of detecting and neutralizing improvised explosive devices, chemical and biological agents, and radioactive materials. Developments in advanced materials have dramatically improved soldier body armor, providing unparalleled protection in combat. These and other technologies of the future are transforming how the United States will fight in future conflicts. Advances in new sensors, hypervelocity missiles, low-observable materials, and smart weapons will enable U.S. forces to fight smarter, more efficiently, and with greater precision than ever before.

DOD continues to make major investments in the development and procurement of unmanned vehicles for ground, underwater, aerial, and combat use. Small unmanned aerial vehicles, for example, can provide information during ground combat to reduce casualties. Underwater vehicles are being developed for mine detection and avoidance operations. Ground vehicles are being used to identify and explode improvised explosive devices remotely. The ground and air vehicles are a central part of the Army's Future Combat System and will provide a wide range of functions, including armed reconnaissance, fire support, autonomous logistics, and mine detection. Some of the forerunners of these new systems are being used today in Iraq and Afghanistan. The 2006 Budget provides $1.7 billion for these efforts.

The 2006 Budget supports the Navy's Littoral Combat Ship (LCS) and its associated weapons systems by providing $613 million for continued development. The LCS, now in acquisition and testing, is a fast, small, and low-cost surface warship capable of operating in littoral (near-shore) waters. The primary missions of the LCS are anti-small-boat warfare, mine countermeasures, and anti-submarine warfare. Secondary missions will include intelligence, surveillance and reconnaissance, homeland defense, maritime interdiction, and support for Special Operations forces.

The President's Budget supports substantial investments in advanced technology, particularly in remote sensing and high performance computing, to give our military additional advantages over our enemies. U.S. intelligence agencies and elements are employing advanced technology systems to acquire, process, and produce information from enemy signals, imagery, and human and other sources. Investments in communications will improve the effectiveness of troops in the field and their commanders in carrying out their missions. These technological developments are improving our ability to detect and counter the broad range of threats facing the United States.

MAKING THE HOMELAND MORE SECURE

Since the terrorist attacks of September 11, 2001, America has engaged in a broad and determined effort to identify and pursue terrorists abroad and secure our citizens and interests at home. Working with the Congress, the President signed legislation to: break down the walls between law enforcement and terrorist investigations; reorganize the Federal Government by reforming and improving intelligence gathering and analysis; acquiring biological weapons countermeasures; enhancing security at our borders, airports, and in our communities; and strengthening America's preparedness and response capabilities.