RECRUITING AND EXAMINING

The Army is faced with recruiting in a shrinking eligibility pool of young people. As you are aware, the Army was unable to meet its recruiting goal for FY 1988. Our recruiting and examining funding is at the FY 1984 level of effort. Reduced funding along with a cap restricts our ability to seek the advertising we need to bring in quality recruits and keep the good soldiers that we have already trained. Dedicated, skilled recruiters backed up by sophisticated modern advertising are essential in keeping our current force and attracting high quality recruits who will become our innovative leaders and technicians in the future.

HEALTH CARE

The Medical Care Program FY 1990/91 budget provides for worldwide medical and dental services to active forces and other eligible beneficiaries, veterinary services, medical examinations performed in Military Enlistment Processing Stations, and other support activities of the direct health care system. This request also supports the currently known CHAMPUS funding requirements. In an effort to bring down rising CHAMPUS costs, the Army supports a partnership agreement program whereby providers are brought into military medical treatment facilities to treat CHAMPUS beneficiaries, for a negotiated fee that is below the respective state allowable limit. Experience is showing that there is a potential for savings in the CHAMPUS program while at the same time increasing utilization of military medical facilities.

ARMY INFORMATION RESOURCES MANAGEMENT

The goal of Army information resources management is to ensure that appropriate, timely, and accurate information is identified and made available for satisfying user requirements in the execution of Army missions. The Army Information Mission Area (IMA) consists of five disciplines: telecommunications, automation, visual information, records management and printing, and publications. IMA resources serve as a force multiplier on the battlefield. In the sustaining base, IMA resources allow the Army to accomplish increased workloads in support of logistics, personnel, medical, and financial areas more efficiently and with less manpower.

FORCE STRUCTURE

OMA funds continue support for Light Infantry Division (LID) initiatives at Fort Drum and continues the heavy forces redesign.

CIVILIAN WORK FORCE

The budgeted civilian employment level in the FY 1990/91 budget supports most critical OMA programs. Any further reduction in the civilian work force will cause a return to "borrowed military manpower" and detract from unit training and readiness. Our current Army goal remains to use our civilian strength wisely by management efforts such as capitalizing on productivity enhancing technology, modest increases in overtime, and continued contracting.

INSTALLATION OPERATIONS

As

The Army conducts operations at over 300 installations and activities in the United States, Europe, the Pacific, and the Panama Defense Complex. The majority of these depend on OMA funding for the myriad of functions performed by the supporting workforce and contractors. you are aware, the Base Operations and Real Property Maintenance accounts have been reduced. Although maintaining our facilities is important, we have whittled this account down to the bare minimum. Our Commanders are doing much to improvise and maintain operations at many of our installations.

BACKLOG OF MAINTENANCE AND REPAIR (BMAR)

The Army operates and maintains an aging physical plant with extensive holdings worldwide. In this budget the backlog of maintenance and repair is predicted to increase with the current funding requested. It grows over FY 1989 by $778 million and over FY 1990 by $527 million. This results in postponing much of the needed maintenance on aging Army assets.

Chart four shows you the BMAR trail since FY80.

We, in the Army, are working hard to embrace our role as good stewards of the Army resources. I believe that the budget I have outlined will support the priorities of the Army in the most cost effective manner. There are several areas however, that still need work. I would like to bring to your attention, some areas that cause me concern especially as we face the FY 1990/91 budget.

o The rising Backlog Maintenance Army Repair is the single biggest problem facing the FY90/91 OMA budget. In FY90 we will have a backlog of $2.9 billion. When you talk to Commanders in the field this is one of their most pressing concerns. We need more money. In the past, when Congress provided us funds in this area, we, in good faith put the dollars against our backlog. Facilities improved and the backlog came down. We are calling on your help again to alleviate this growing problem.

o Foreign currency requirements and availability remain an unknown in the year of execution. The budget is prepared at a Deutsche Mark 1.75 level. Hopefully, this will be sufficient to meet our needs.

o In this time of severe fiscal constraint, the removal of statutory and administrative limitations would increase our commanders flexibility in adjusting resources to meet our needs. This is especially true in the areas of Advertising, Moral Welfare and Recreation, Recruiting, Depot Maintenance, and Real Property Maintenance Activities. Commanders in the field need this freedom to meet unexpected contingencies or exploit opportunities. This will allow them to be better managers.

CLOSING

I am optimistic about our Army. We have seen improvements in the ways in which we manage our

resources. Good stewardship is the key to fully utilizing the dollars that we are given. The OMA budget which I have briefly summarized in my statement, meets most of the Army's pressing needs. We have incorporated our management initiatives into the budget preparation to place our dollars where they are most needed and where they can be fully executed. As you can surmise, we could always 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.

We are often asked how does OMA equate to readiness so, I would like to close with a summation of the OMA budget in terms of readiness. OMA is the ignition key and driver of the vehicle, readiness. We supply the fuel, parts and maintenance of the vehicle to keep it running. But, most importantly, we supply the drivers who turn the key. First, you must have soldiers. Our soldiers put the miles on the vehicles and fly hours in the planes. We must recruit and train quality individuals so they can perform. We must provide for their needs such as food, clothing, medical care, lodging and family support. We must give them the necessary roadmaps (skills and tools) to guide their way. We must groom and retain leaders to direct the soldier's path. Then, once soldiers' needs are met and they have the necessary tools, they can step behind the vehicle, readiness and do their job. We ask for your continued support in this endeavor. Thank you.

General MCCALL. I believe, sir, that we can best serve you and the committee by going straight away to questions. We have a good fiscal year 1990-1991 O&MA budget.

Mr. HUTTO. All right, sir. We will start by asking this. Chart one in your statement shows the fiscal year 1990 request of $24.2 billion as a 4.2 percent increase over 1989. How does the Army portion of the total DOD total obligation authority stack up? Is the Army portion increasing or decreasing?

General MCCALL. Sir, the Army share of the DOD budget authority has remained relatively constant for about 6 years. It's about 27 percent-26.5 percent to be precise-in budget authority. That has been neither increasing or decreasing over the past 6 years. That share has been constant as a share of the DOD budget.

Mr. HUTTO. About the same percentage for 3 years, you are saying, something like that?

General MCCALL. Sir, it has been actually a period of about 6 years that we have been at about 26.5 percent. That growth number that you cited for the O&MA budget, 4.2 percent, has to be looked in the context of overall zero growth in our 1990 budget. So within a framework of zero growth we have given up priority to O&MA.

Mr. HUTTO. Your budget request and the numbers you are discussing are, of course, from the original Reagan budget. When can we expect to receive the Bush revised budget adjustments and what will the nature and size of these reductions be, as far as the O&M account is concerned?

General MCCALL. Sir, we are working toward the 10 April submission date that the President promised that is derivative from the State of the Union Address. I cannot say with any certainty that that date will be met. We are trying to be responsive to the Department of Defense and our contribution to it.

The specifics on that budget, as far as how the appropriations are changed, I would rather not comment on. But I think, as we have shown in the original Reagan budget, our propensity to increase O&M in the face of a flat budget, you will continue to see the concern we have for O&M even in the new product.

Mr. HUTTO. I hope that is so. Of course it is very difficult for you and for us as well, since we do not have the specific numbers at this time, we all realize that the problem of not having a Secretary of Defense in place, I hope that will be rectified soon, in not having the budget from President Bush. But, I am glad to hear you indicate to us that readiness will not suffer. Is that your view?

General MCCALL. Sir, I can promise-I cannot say that there will be no reductions in any aspect of OMA, but I can tell you that readiness will not suffer. That is one of the hallmarks.

Mr. HUTTO. Well, that is important. That is the bottom line. If we do not have the readiness, we are going to have morale problems, we are going to have problems in every way.

Your statement mentions your operating TEMPO goals for 1990 as 800 miles for ground vehicles and 15 hours per troop per month for aviation. What are you projecting for 1989 and how do current actuals compare to your estimate for 1990?

General MCCALL. Sir, we began the year 1989 projecting a recovery from a very low rate of 1988. I must put that in the context of