projected by the department last year.

The new budget and FYDP [Future Years Defense Program] reflect projected savings from various sources. DoD civilian personnel are being drawn down — partly as a result of post-Cold War force structure reductions and partly because of management reforms. Excess inventories of supplies are being reduced. Acquisition reform is changing the way the department develops and procures new weapons and making the process less expensive both for the department and for its private contractors. Financial and personnel management systems are being consolidated and modernized, making them less costly and more responsive to both customers and DoD decision makers.

The

he department is identifying what goods and services can be produced more cost effectively by the private sector than by DoD elements and pushing to implement these changes as quickly as possible. Savings from such outsourcing or privatization initiatives are crucial to achieving robust funding of force modernization.

The department is continuing to carry out the decisions of the Base Realignment and Closure process for streamlining defense facilities within the United States. BRAC savings began to exceed implementation costs after FY 1996. The results from all four rounds of BRAC actions should be implemented completely by the end of FY 2001 and should provide a net savings of $14 billion for the years FY 1990 through FY 2001. After FY 2001, the costs avoided by having reduced and realigned the department's base structure will amount to about $5.6 billion every year thereafter.

In view of the significant demands on the defense budget, the department must continue to streamline, improve and reinvent its support activities wherever possible. The goal is to provide better products and services at reduced cost to U.S. forces and other DoD customers.

These are some of the major security challenges facing our nation and the ways in which the president's FY 1998

budget addresses those challenges. This year promises to be a pivotal year in the continuing task of adapting America's defense posture to the uncertainties of the post-Cold War period. I look forward to working with the Congress to ensure that our armed forces remain strong and our policies sound, as America continues to lead the world toward a peaceful and prosperous future.

We are coming to the end of a century in which the United States played a unique role in defeating tyranny and aggression, nurturing open political and economic systems and leading peoples of the world toward a better future. Much of that extraordinary achievement was based on the willingness of Americans to build and maintain extremely capable military forces. Now that the Cold War is over and freedom is becoming harder to suppress around the globe, America's defense challenges clearly are less daunting, but they remain substantial nevertheless.

The greatest need is for America to skillfully fulfill its global leadership mandate. In an increasingly interdependent world, such leadership is critical to influencing the actions of others who could affect our national well-being. It is also key to creating the international conditions in which peace, stability, democracy and free trade can flourish. Let us therefore remember that strong U.S. leadership continues to depend on sound defense policies and budget priorities, to which we now must focus our full attention.

Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant Secretary of Defense (Public Affairs), Washington, D.C. Parenthetical entries are speaker/author notes; bracketed entries are editorial notes. This material is in the public domain and may be reprinted without permission. Defense Issues is available on the Internet via the World Wide Web at

http://www.dtic.mil/defenselink/pubs/di_index.html.

UNITED

STATES OF

VOLUME 12

NUMBER 14

M

R. CHAIRMAN, members of the subcommittee and staff, thank you for the opportunity to discuss with you the department's Ballistic Missile Defense program.

The proliferation of short-range ballistic missiles in the world today poses a direct, immediate threat to many of our allies and to some U.S. forces deployed abroad in defense of our national interests. Over time, the proliferation of longer-range missiles could pose a greater threat to the U.S. itself.

For these reasons, active defenses are playing a central and vital role in U.S. defense planning well into the next century. The resource-constrained environment of the '90s, together with the complex nature of the security challenges facing us, requires that we deploy the right capabilities at the right time for achieving the highest overall level of security for the United States.

destruction preventing and reducing that threat.

The second line of defense is deterrence. In the case of the long-range missile threat to the United States, either from land-based intercontinental ballistic missiles or submarine-launched ballistic missiles, our strategic nuclear forces have been a bulwark of deterrence for nearly a half

To do so, we must consider the role of missile defense within the nation's broader national security strategy. Active defenses can never be considered in and of themselves a panacea for countering the proliferation of ballistic missiles and weapons of mass destruction. We have a broader strategy encompassing a full range of tools in a national "kit" of options. Our strategy has three components: preventing and reducing the threat, deterring the threat and defending against the threat.

For example, we have adopted the Nonproliferation Treaty, the Framework Agreement with North Korea, the INF [Intermediate Nuclear Forces] treaty, the MTCR [Missile Technology Control Regime] and export controls as ways of preventing or reducing the threat to our allies and U.S. forces deployed abroad. The threat to the United States has been reduced significantly through the START [Strategic Arms Reduction Talks] treaty, and it will be reduced even further through the START II treaty when Russia ratifies it.

Additionally, we have an extensive program for actually dismantling the warheads and the missiles that had been directed against us in a Cooperative Threat Reduction program supported by Nunn-Lugar funds. This is our first line of defense against ballistic missiles and weapons of mass

century. That will continue. We have smaller numbers of nuclear forces now than we did a decade ago, but they are still very powerful and quite capable of carrying out the strategic deterrence mission. In the case of deterring short-range missile threats, our theater nuclear forces and very powerful conventional forces provide some level of deterrence against limited nuclear attacks.

To the extent that these first two components, reducing the threat and deterring the threat, are not fully successful, we have to be prepared to defend directly against a threat. In the case of the strategic ballistic missile threat to the United States from rogue states or from accidental/unauthorized launch, the National Missile Defense program is America's ultimate insurance policy. For our deployed forces, we are developing and fielding multitier theater missile defenses to counter regionally oriented missile attacks.

The theater threat to our allies and U.S. forces deployed abroad is real and growing. We saw it demonstrated in the Gulf War. Besides Iraq, we know that thousands of short-range missiles are deployed today with hundreds of launchers in as many as 30 different countries

some of these countries are quite hostile to the United States. This threat is here and now. It is widely dispersed, and it has to be taken very seriously.

In addition to the short-range missile threat, we see a medium-range threat emerging. Some nations are developing their own medium-range missiles; in particular, North Korea is developing the Nodong missile. Other nations, some of them rogue, are buying these missiles or trying to buy them. Iran is a case in point.

We also have a threat today from missiles armed with chemical and biological warheads. We believe that Iran, North Korea and Libya all have extensive chemical weapon

programs. In addition, we anticipate a nuclear threat being possible in the future. We know in retrospect that Iraq was very close to an operational nuclear capability at the time they started the Gulf War — fortunately, they were not all the way there. We know that North Korea was close. But their program is now stopped by the Framework Agreement. And we understand that Iran is working to achieve a nuclear weapons capability, but we believe they are many years away. We will keep a close eye on the nuclear threat from so-called rogue nations armed with theater ballistic missiles.

In the case of nuclear strategic weapons, Russia has a sig

tegic weapon delivery systems land-based and submarine-launched missiles and long-range aircraft. China can also deliver these weapons with land-based and emerging sea-based ballistic missile capabilities. We do not see these systems as posing a threat to the United States in the foreseeable future. That is, we do not see an intent that goes with the capability. Even should that situation change, we will continue to field a significant U.S. deterrent force.

Land-attack cruise missiles are an emerging threat. LACMS are deployed in the U.S., France and Russia. A dozen or so other countries are also developing this capability. We believe the nations of most concern are now more focused on short-range ballistic missiles and the widespread proliferation of high-tech LACMs is 10-15 years away. However, there is already a widely deployed robust threat of anti-ship cruise missiles in about 70 nations, and these could be modified to provide a landattack capability of some numbers (albeit with limited range) in a few years.

We do not see a near-term ballistic missile threat to U.S. territory from the so-called rogue nations, but we cannot be complacent about this assessment. The threat of long-range missiles from rogue nations could emerge in the future. The intelligence community esti

department's requirements. Program adjustments may be made in response to a number of factors, including changes in the requirement, threat, technology, funding or law. Where appropriate, such adjustments are then reflected in our funding request through the president's budget.

We currently have a balanced missile defense program one that is affordable and can be successfully executed. It is well matched to the missile threats we will be facing. Our program made use of all of the fiscal year 1996 funds that were appropriated for missile defense and will make use of all fiscal year 1997 funds - both the funds that were requested by the president and the funds that were added by the Congress. In addition, we have increased funding in the '98 president's budget for the THAAD [Theater High-Altitude Area Defense], SBIRS [Space-based Infrared System] (Low), Airborne Laser and Navy Theater-Wide programs.

Our fundamental priorities in our missile defense program have not changed over the past year. The first priority is to defend against theater ballistic missiles and cruise missiles. Within the theater missile defense mission area, the first subpriority is to field systems to defend against the existing short- to medium-range missiles -range missiles — our lowertier TMD systems. The next subpriority is to proceed at a prudent pace to add upper-tier TMD systems for wide-area defenses and defenses against the longer-range theater ballistic missiles as that threat emerges.

mates that this threat would take 15 years to develop, but could be accelerated if those nations acquired this capability from beyond their borders. This is why our counterproliferation programs are important and why the role of missile defense within this broader national strategy must be carefully integrated into U.S. defense planning. This is also why our proposed "three-plus-three" NMD program could be deployed as early as 2003 well ahead of the intelligence community estimates.

In order to ensure we are capable of meeting the threat as it emerges, under our oversight responsibilities, each of our acquisition programs is reviewed to determine its progress against the acquisition program baseline and to insure the program, as planned, continues to meet the

Our

Our second priority is to develop a capability to defend against intercontinental ballistic missiles National Missile Defense program — and the cruise missiles which may threaten the United States in the future.

Finally, our third priority is developing a robust technology base to underlie these two programs both the TMD program and the NMD program — to be able to develop and deploy more advanced missile defense systems over time as the threat systems they must counter become more advanced. ...

F

two

or our No. 1 priority — theater missile defense systems are currently fielded - the Marine Corps Hawk system and the Patriot Advanced Capability-2/Guidance Enhanced Missile system. The Hawk capability is limited. However, the PAC-2/GEM system contains a guidance upgrade that significantly improves the lethality and coverage of the basic PAC-2 system used in combat during Desert Storm. We successfully tested this system against a ballistic missile defense target at Kwajalein [Island] Missile Range on Feb. 7, 1997.

Although the PAC-2/GEM system provides a more

robust capability than the Patriots we deployed in Desert Storm, it is still not fully capable of dealing with the threat. The lower-tier systems I'll describe next will have that capability, and these systems have our highest priority for fielding as soon as they are ready.

O

ur lower-tier systems build on existing infrastructure and prior investments in ongoing programs — extending the capability of the Patriot and Aegis/Standard Missile systems; and improving our battle management/ command, control and communications (BM/C3) capability. We have also begun a cooperative program with our allies, the Medium Extended Air Defense System, which is a highly mobile system intended to provide our maneuvering forces with a 360-degree capability against both ballistic and cruise missiles.

The PAC-3 and the Navy Area Defense system will give us our core lower-tier capability. Neither of these programs involves a significant technology risk at this point. The risks for these programs have been related to program execution. Our task is to ensure that we have a robust program to proceed with both systems and to field this capability as early as possible.

PAC-3 is a much more capable derivative of the PAC-2/GEM system in terms of both coverage and lethality. The PAC-3, in fact, has a new interceptor missile with a different kill mechanism

rather than having an exploding warhead, it is a hit-to-kill system.

In the 1997 budget, we added about $230 million for the PAC-3 through the Future Years Defense Program and established a realistic schedule to lower the

thality efforts. This allowed us to proceed expeditiously with the EMD program and LRIP missile procurement.

We are continuing to emphasize the rapid and robust fielding of this core TMD program. To demonstrate the capabilities of the NAD system, in January 1997, a target simulating a threat ballistic missile was successfully engaged. In February 1997, the NAD program was reviewed during the Defense Acquisition Board Readiness Meeting. Based on the data presented, I approved the program to enter into the EMD phase. This puts us on the path to have a User Operational Evaluation System capability on two cruisers late in fiscal year 1999, with the FUE in the fourth quarter of fiscal year 2001.

The last of the lower-tier systems is the Medium Extended Air Defense System, formerly the Corps SAM [surface-to-air missile] program. MEADS is the only theater missile defense system under consideration to provide maneuver forces with 360-degree defense protection against

engineering and manufacturing development phase of the program by 10 months. System performance will be improved by rephasing the missile and radar procurements; upgrading three launchers per battery with Enhanced Launcher Electronics Systems; and extending the battery's remote launch capability. PAC-3 Low-Rate Initial Pro

duction will begin in the second quarter of fiscal year 1998, and the first unit equipped date is planned for the fourth quarter of fiscal year 1999. The FUE capability will consist of 16 missiles and five radars, which will be placed in one battalion.

The second of the lower-tier systems, the Navy Area Defense system, consists of Standard Missile-2 Block IVA interceptors deployed aboard Aegis ships. The capability provided by this system has the advantage of being able to be brought into theater quickly without having to put forces on land.

We added about $120 million to this program in the FY 97 budget. These funds covered delays in risk-reduction flights and adjusted cost estimates for test targets and le

the real and growing threat of shortrange tactical ballistic missiles, cruise missiles and unmanned aerial vehicles. This system is intended to provide fundamental enhancements in tactical mobility, strategic deployability and operational capability. Key in this regard will be transportability on C-130 aircraft as a highly mobile system we are designing to protect our forward-deployed and maneuvering forces. MEADS would replace Hawk and some portion of Patriot. As discussed above, we will defer equipping three Patriot battalions with PAC-3 pending a decision on development and deployment of MEADS.

This program has made tremendous progress in the last 12 months. We have signed an MOU [memorandum of understanding] on this program with Germany and Italy, and NATO has formed a project. agency that has started work in Huntsville, Ala. We plan about $115 million through FY 1998 to fully fund the U.S. costs of the project definition/validation phase. We are working to be ready to make a decision to enter development in late fiscal year 1998 or early 1999.