Segment 1 Of 3 Next Hearing Segment(2)
SPEAKERS CONTENTS INSERTS Tables
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MILITARY CONSTRUCTION APPROPRIATIONS FOR 1999
Thursday, February 12, 1998.
DEPARTMENT OF DEFENSE
WITNESSES
WILLIAM J. LYNN, UNDER SECRETARY OF DEFENSE (COMPTROLLER), ACCOMPANIED BY HENRY SODANO, DIRECTOR OF CONSTRUCTION
Statement of the Chairman
Mr. PACKARD. We are a couple of minutes early but let's go ahead and get started. The main man is here. I am grateful to have Mr. Hefner with us early because I wanted to make a comment or two.
In all my career here in the Congress, which is now in its 16th year, much longer than I anticipated, I have never worked with a person that I have been more grateful to have that opportunity than Bill Hefner. He has been truly a marvelous person to work with. We have been a good team on this subcommittee. His experience as chairman of the subcommittee for some time certainly has helped me and helped this subcommittee and I am extremely grateful.
As most of you know, he has announced that he would be retiring at the end of this term and the loss to the country, the loss to the Congress and the loss to this subcommittee and to me personally is going to be huge. Bill, it has been a pleasure, a real pleasure working with you.
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Mr. HEFNER. I appreciate it.
Mr. PACKARD. We have done some things together outside of congressional work that we have enjoyed, too, and that has always been a pleasure. He and I have played some golf together. So Bill has been a real good friend. Sometimes that is getting to be more and more of a rare thing, to have members from the two sides of the aisle become dear friends but Bill and I have. I think it has been helpful to this subcommittee.
It is a pleasure now to call this subcommittee to order. We are very pleased to have the Honorable William Lynn, the Under Secretary of Defense (Comptroller) as our first witness.
This is the beginning of our hearings. We will conclude them in March, I believe, except for the break that we will be having in mid-February. We will be holding hearings regularly.
We have a new member of this subcommittee, Mr. Bud Cramer from Alabama. He is also a good friend and will make, I think, a significant contribution to this subcommittee. He has recently been appointed to the Appropriations Committee and has been given this as one of his subcommittees. We will look forward to working with Mr. Cramer.
Let me begin with some housekeeping comments and hopefully each member will get this message, even though they are not here now.
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We will try to start on time. We have done that in the past. We will try to do that in the future.
We will recognize members for questioning after the statements are made, but we will try to hold to the five-minute rule. If it is necessary, we will go into a second or even a third round of questioning. We will not shut the members down from questions. They will have all the time they need, but we would like to hold it in some orderly way. So we will try to adhere to the five-minute rule, the ranking member, of course, being excluded from that. I would never cut him off at any time.
We also will welcome any member of the subcommittee to submit questions for the record and ask the witnesses, of course, to respond to that in writing and send it to the subcommittee. They are welcome to do that.
With those few comments, let me then comment now on the substance of this hearing.
We are a subcommittee that has been pinched for monies for years and the pinch is getting more and more severe. The President's budget this year is, I think—I will say it very bluntly—abominable. It really is. It shortchanges us far more than we ever expected.
The President has made a strong commitment that he would certainly take care of our men and women in the services, their quality of life issues, and so forth. But we are being asked in this budget submission from the President, to absorb a 15 percent cut from last year's appropriated levels of $9.2 billion down to $7.8 billion. That is a cut that I just can't see how we can accept or live with. And frankly, I think the subcommittee will find ways to strengthen that budget because that is deeper than what we can absorb and still do what we think we are charged to do, particularly on top of two previous years that I am familiar. I think it goes back maybe even further than that, but certainly the last two previous years we have absorbed a $2 billion cut. And out of an $11 billion budget, you are talking about a 15, 16, 17, and 18 percent cut over those two years.
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So if the President's budget prevails, we will have absorbed close to a 30 percent cut in the last three years, and that simply is not acceptable for any subcommittee, much less one of our Defense Subcommittees.
So this is the lowest budget request since 1982 and I don't see a way that we can absorb it and still do what we have to do. This cuts into our commitment to take care of the quality of life and work issues for our men and women in the services; namely family housing, single member housing, barracks, day care centers, hospitals, dental centers, and all of the other quality of life areas.
But there are also many quality of work areas at military bases that we have visited and we have seen the deplorable conditions that many of our men and women have to work in. Those accumulate to where, as Bill Hefner has been pointing out very strongly for several years now, that affects retention. We are losing good men and women in the services because of the quality of work or the quality of their living quarters and their other benefits for their families.
We have tried to strengthen that area, but this budget will not only limit but also actually decrease our ability to address these life and quality of work issues. And I believe we are reaching the point, in this budget, where we are dealing with readiness. We don't believe that we can provide the physical facilities that will allow our men and women in the services to be ready for any military action and certainly right now we are facing the very strong possibility of military action that will test our ability for our men and women to fight and to be ready for such military action.
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And when we reach the point where not only quality of life is being deteriorated but also our readiness is being threatened, I think we have reached a point where we are below any budget level that is acceptable.
Those are strong comments and I am really concerned. We have before us the man that can address that concern, the Comptroller of our Defense Department, the Under Secretary, the Honorable William Lynn.
Before I turn it over to you, Mr. Lynn, let me again add what I said earlier, how grateful we are to have Bud Cramer join us on this subcommittee. He is going to make a wonderful addition. He has good experience on military issues. He has a significant amount of military concerns and Defense concerns in his district and certainly in his state and we are extremely grateful to have you with us, Mr. Cramer, and hope that you will make a contribution to this committee. We fully expect that.
Mr. CRAMER. Thank you, Mr. Chairman.
Mr. PACKARD. Again I add some preliminary comments. We will hold to the five-minute rule when we reach the question and answer period, but we will have a second and a third round of questions, if necessary. We will not cut anybody off from a chance to ask all the questions that they need to ask. But we will try to have some order to it.
We would invite you to submit questions for the record if you choose to do so. We will be as flexible, as we can in the way we operate.
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Again, thank you for being here, Mr. Lynn. We will now turn to you.
Oh, I apologize. I should have a statement from my colleague.
Mr. HEFNER. I will be very brief. I just left a hearing upstairs with the Defense Subcommittee. General Rodeman made the statement that our most important and most critical weapon is the soldier or the marine or the sailor. That is what we have said in this subcommittee for many, many years.
We are asking people to go out and operate the most sophisticated weapons that man could ever imagine and then we are asking them to go back to their families and themselves and live in facilities that were not very adequate during the Korean and Vietnam War. Some of these facilities are World War II vintage. We are asking these men to go back and live in those facilities and go out the next day and be gung-ho about their jobs and operate the most sophisticated weapons in the world.
Now, this just flies in the face of what is reasonable. Over the years, we have found here and all the administrations that they're all guilty of it. When they put together a budget, it seems that the military construction budget is not a high priority because it is not real sexy to go to North Carolina or Alabama or Mississippi and cut the ribbon for some new barracks. Nobody comes except the people that built the barracks and some other folks. If you unveil a B–2 or a B–1 or a new tank or what have you, people come and they cheer and they carry on.
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But this is, in my view, the most nonpartisan committee. It is the best committee in this House. It has the best staff. I believe we do the best work with what dollars we have to do the job for the men and women in the service.
This budget is not adequate. It hasn't been adequate for the past several years. During that time we have had a total ''pause''. We didn't do anything. I believe in the budget cycle last year, we didn't do anything for the Marines to speak of—did we?
This is an inadequate budget and we are called on year after year because they know that this committee is made up of people who have bases. They say, ''Well, the guys over there can do the weapons stuff and they'll take care of the military guys'' and then they give us a pittance.
So it kind of gets frustrating but I think we have done a remarkable job under different leadership and under the excellent leadership of Mr. Packard to use the scarce dollars that we have to do the best that we can, especially now that we are in a situation where retention could get to be a problem for us in the years to come, and especially when people are seeing that commitments are not kept or being honored as far as health care that men have signed up for.
So it is a real tough chore and I commend Mr. Packard, who will be fighting this battle hopefully for years to come. We hope that you will be able to take our message back and be our voice when they make these decisions. With that, I want to thank you for being here.
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I also want to thank you for those kind words, Mr. Chairman. It has been a joy to serve on this committee. I will be able to look back with some pride on things we have been able to do. I wish all the committee Godspeed and good luck in doing what is right for our men and women in the services. Thank you, Mr. Chairman.
Mr. PACKARD. Thank you very much.
We don't normally have opening statements but if any member of the subcommittee would like to make an opening statement, we certainly would make room for you. We like to hold short hearings and I think that is better than opening statements usually, so we will turn now to Mr. Lynn.
STATEMENT OF THE HONORABLE WILLIAM J. LYNN
Mr. LYNN. Thank you very much, Mr. Chairman. I appreciate the opportunity to appear before you in your first hearing of the year. This is indeed my first hearing, as well, as the Comptroller. I have testified with the Secretary but this is the first time that I have been the principal witness and I appreciate the opportunity.
In the interest of preserving your time for the questions, which I think you would like to concentrate on, I ask that the full statement that I have submitted be included in the record. What I would like to do is just highlight four points out of that statement and then turn it over to you for questions.
Mr. PACKARD. That will be fine, without objection.
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Mr. LYNN. The first point I wanted to make is one that comes from the hearing you had last year with my predecessor, John Hamre. Mr. Chairman, as I understand it from reviewing the transcript, an important point you made there was the question of how the Department does its planning. We weren't focussed at that point on the budget year but on how we do long-term planning for military construction and family housing. I think you cited deficiencies there. I think that was fair and I think Dr. Hamre took that to heart. We have tried to do some things to address those deficiencies. Let me just name a few.
We have started to set planning goals within these accounts. Dr. Hamre set a goal to eliminate all inadequate housing in the Department of Defense by the year 2010. With 345,000 family housing units—that is an ambitious goal. We hope to use some techniques out of the private sector, leverage private funding, and some other things to accomplish that goal because we are not going to be able to do it purely within our budget. We think we have a goal and we are developing the plans to accomplish that goal.
Similarly, there is a goal to eliminate permanent party gang latrines and open bay berthing by 2008. There I think we are even a little further along. All of the services have plans that will do that—the Air Force by 1999 and the other services will hit their goal by 2008.
Finally, as a consequence of the Defense Reform Initiative, the Secretary's initiatives to try and take infrastructure overhead out of the Department, be able to put funding against the highest priorities, and move money from tail to tooth. We are also looking towards privatization of utilities. We have set a goal to try to privatize all the utilities, where it is appropriate, by the year 2000. You obviously make national security exceptions or other exceptions, but the general goal in the system would be to privatize all those except where there were unique security needs or privatization was uneconomical.
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Those, I think, are the things we are trying to address in response to your request and your direction to do more planning in this area. I think that is a foundation on which we can build, but I wouldn't say that we are done in that area. I think there are going to be other things that we are going to try and address.
The second issue that came up in last year's hearing, and has certainly come up throughout the year, is the question of the integration of the guard and reserve. A number of issues came up as we did the Quadrennial Defense Review about the adequacy of how we review the guard and reserve funding requests, funding needs in the budget, and I think we have recognized that there have been problems in this area. We took steps this summer and fall to try to address those issues.
As a consequence, you will find that the National Guard and reserve component leadership are now members of the Defense Resource Board where all the major long-term program decisions are made. They are in the major budget issue meetings, the MBIs, which is where the final decisions are made on the budget year, in this case the '99 budget. The Secretary, myself, and John Hamre have been meeting directly with the guard and reserve leadership to try to make sure we understand those priorities and we have, in general, tried to take steps to have a total force perspective on the budget priorities.
As a consequence of some of that, you will see in some of the accounts the guard and reserve budgets have gone up over what we expected to request in '99, in some cases what the Military Departments had requested in '99. I would not say we have addressed all the issues that the guard and reserve leadership would raise. I can't frankly say that about any community in a constrained budget environment, but I think as a consequence of the improvements in the process, we have done better. We have improved things from their perspective and frankly, from the perspective of the whole Department by addressing their priorities.
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Third, let me comment on the issue that you focussed on, Mr. Chairman. I understand your disappointment that this budget frankly does not match the increases that the committee was able to allocate and that Congress was able to allocate through this committee to the military construction and family housing areas. I understand that you do think more is needed here and I think we agree. We do want to do more here.
We are working through, at this point, the first year of the Quadrennial Defense Review. In that first year we developed some savings that frankly went other places. We added $1 billion to $1.5 billion to the readiness accounts. In the hearing Mr. Hefner said he just came from, I don't know whether General Rodeman mentioned, but there was a $500 million increase in the defense health program account to meet must-pay bills. The account was underfunded and it was something that we had to do and something we really had to do in '99. There was no discretion.
You are all familiar with the Secretary's commitment to getting on a modernization path up to $60 billion and we took the first step in that with the $3.5 billion increase in the procurement accounts this year.
All of those things put pressure on the budget. It meant that this year we were not able to match the increases that you set. I understand, as I said, your disappointment in that. I think what I can offer you is that this is just the first year of the QDR.
There will be additional savings. We are, over the course of the next two to three or four years, going to reduce the end strength by 60,000 people, with congressional approval. We are going to reduce reserve end strength by a commensurate amount. We are going to reduce civilian end strength, frankly, by even more—80,000 right now is what is projected.
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All of those reductions will yield savings. Those savings, as I say, in the initial steps have gone into readiness, health, and modernization accounts. We have programmed in the out-years increases for family housing and military construction.
Now, I understand programming them in the out-years is not the same as carrying through in the budget year and we are going to need to follow through and protect all or most of those increases in order to satisfy the committee and the Congress. And I would say to you now that I would hope to be coming back to you next year with something that would be improved.
What has changed, as I said, is the QDR. This is the first year. We hope to do better into the second and the third year.
The fourth and last point I wanted to raise in the testimony is one that I don't think is well received in Congress but the Secretary believes, as well as I and the Administration, is needed, is the question of additional base closure rounds. We think that the case is clear. We have not reduced the base structure commensurate with force structure and budget reductions.
We need, we think, two additional rounds to get those in line and into balance. We have proposed that be done with two additional rounds. We have slightly shifted the proposal from the one that you saw last year. In order to address some of the concerns that were raised, we are proposing that it be done in the first year of the next two Administrations, so there would be one in 2001 and one in 2005.
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That, of course, would mean that you would have different Congresses and different Presidents that would propose those rounds. We think that by doing it that far in advance and by putting in place now, a base closure round that far in advance, you will insulate it somewhat from the politics that I think are a concern to some people.
The bottomline is, as the Secretary has said, that we need this in order to provide the funds for the modernization, the readiness, and the military construction and family housing needs. We are going to have to bring the base structure into line with the force structure.
With those four points, and other points in the testimony, I am happy to explore whatever you would like in questioning. I conclude my statement with that.
[Prepared Statement of William J. Lynn follows:]
"The Official Committee record contains additional material here."
Mr. PACKARD. Thank you, Mr. Lynn. We appreciate your statement. Very well done. Just a comment that ties in with what I mentioned earlier and what you commented on in regard to a reduction in this year's budget.
OVERALL FUNDING
When there is a decrease in the overall DOD budget, then it is our subcommittee that generally picks up most of that decrease. In the past, about 75 percent of all decreases that the President has submitted in terms of the Defense budget, the MILCON Subcommittee has had to pick up about 75 percent of those decreases.
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When the DOD budget is increased, as it has this year, then MILCON is usually looked upon as the offset because we are required to offset any increases. And so our subcommittee gets the short end of whichever way it goes. Whether we have a decrease in our overall DOD budget or an increase in our DOD budget, we seem to be the ones that have to pay for the cost of those increases or decreases and it always hurts us.
I am not going to ask questions first. I am going to let the members. And what we will do, as we have done in the past years, is, we will recognize members in the order in which they arrived, of course with the exception of the ranking member. And the full committee chairman and ranking member, if they attend our meetings, will be recognized first, of course.
Mr. Hefner, we would recognize you now for any questions.
HOUSING PRIVATIZATION
Mr. HEFNER. Well, I have already made my statement.
Are we moving ahead with the Secretary's recommendation that we—I don't know what the exact name would be, like the housing authority that would work with the military bases to have people in the private sector go in and construct or keep up. Are we still moving in that direction with an experimental program?
Mr. LYNN. Yes, Mr. Hefner, we are. We are actually trying to accelerate the move. We already have in progress two projects with 2,000 units in this family housing privatization initiative.
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Mr. HEFNER. And where is that?
Mr. LYNN. Those are in Corpus Christi, Texas and Everett, Washington. We have two more. One at Fort Carson, Colorado has just been notified to the committee. That alone will be nearly 3,000 units. And we have another six or seven projects in the proposal stage which would have an additional 15,000 units that, as we develop them, we will be notifying the committee.
So you will see a geometric increase, because we think there is enormous promise in the leverage provided by this initiative. We can leverage the dollars we have in order to try and meet that goal of eliminating all inadequate housing by 2010.
Frankly, whatever the budget would be, if we don't go outside our normal means, we would not be able to meet that initiative. We need the three- to five-, even ten-to-one leverage that we get out of the privatization to turn those 345,000 units over that fast.
Mr. HEFNER. Thank you, Mr. Chairman.
Mr. PACKARD. If the gentleman would yield on that very point, is our effort to move into privatization delaying the execution of projects?
Mr. LYNN. I have to say honestly, Mr. Chairman, in some cases, yes. Not long, I think weeks and months, but particularly as we start this up, we have to review which projects to privatize. We have to be careful. We have to pick the right projects. We have to make sure that we have the right relationship with the private sector to make this work. And in some cases it has delayed a few months. While we screen for this privatization it has delayed some projects by a few months.
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As you can see, we are moving faster on this. Part of that reflects that the system is starting to come in place and I think you will see less and less delay. But I should say we think the delay is worth it. When we can get that kind of three-to-one, five-to-one, seven-to-one leverage, additional housing units for the troops and their families, it justifies us taking some additional time to get that leverage. We, however, hope to reduce that time to a minimum and start to do this more in the budget bill as we move forward, and make this part of the regular order.
Mr. PACKARD. Does that create any problem in terms of being able to use your appropriated funds in a timely manner?
Mr. LYNN. I am not aware of any problem that has created. I will look to Henry to see. I should introduce Henry Sodano, who is the real expert in terms of our military construction budget.
Mr. SODANO. The appropriations are available for five years. Authorization is good for three years. By no stretch would reviewing the project to see whether it was an acceptable candidate for privatization, would affect the obligations.
Mr. PACKARD. Mr. Parker.
BASE-REALIGNMENT AND CLOSURE
Mr. PARKER. Thank you, Mr. Chairman.
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Mr. Lynn, I don't want to hurt your feelings or anything and I appreciate the fact that you have guard and reserve, in the meetings. How many decades did it take to get them in the meetings?
Mr. LYNN. Too many.
Mr. PARKER. You didn't give them any money but they are in the room, so I will accept that.
I am very much concerned with this whole concept of what we are doing. You are talking about having a BRAC-3 and a BRAC-4?
Mr. LYNN. We have already had four rounds so it would actually be 5 and 6.
Mr. PARKER. 5 and 6. Maybe I am missing something. We have had all these recommendations to close and realign these bases but I don't see us closing and realigning bases. And I know that is disingenuous, coming from Mississippi, when I have a majority leader on the Senate side who is saying we don't need another BRAC. Well, I am of the opinion that we don't quite need it if we do the first, second, third and fourth correctly.
This whole thing, it is kind of like—do you remember how many times in the past we have spent lost food stamps? You know that issue? Well, what we would do is we would say we have $20 billion of lost food stamps. Now, that was some figure out there and we would spend it on something.
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Somewhere along the way we have this base realignment and closure as being some kind of thing out there that we can utilize, but we never follow through with what we're doing. We have not done BRAC correctly yet, and I know it is because of political pressures. I know that in Mississippi it is politically unpopular to say we need to realign some of the bases in Mississippi because everybody from Mississippi that represents the state is going to say we don't need any changes; in fact, we need to expand the bases we have there. That is true in every state that you deal with.
I am very much concerned about what we are doing in this country. It is not very logical to me how we are approaching it. And I may not be explaining my frustration too well to you but when I hear you talk about this modernization and new weapon systems and all and spending all this money, it is kind of like putting a red light on a dirt road. You know, you have it on this long, straight dirt road and there is not an intersection there. This red light is just sitting there, a traffic light. Well, people may come to look at it but it doesn't serve any useful purpose.
And I see where we are not serving a very useful purpose in going in these directions and not funding what is really necessary.
And on the military construction side, if you believe that with the guard and reserve, you get the biggest bang for the buck there, we are not doing what is necessary from that standpoint.
I read this thing and I don't think we are accomplishing a whole lot with this, in what the Administration's proposal is. I have real problems. And I don't know what the answer is. If I could write it myself, I know exactly what I would do. But do you feel—and I know you are here to defend the President's budget but do you feel real comfortable in the direction we are going?
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Mr. LYNN. Yes, sir, I do. Let me take your points in order.
The Guard and Reserve point, I guess I disagree with your characterization that we added no money. Actually we did increase the optempo account by $100 million and the training account by $50 million and the investment accounts by over $300 million.
Now, saying that, does that mean that we have addressed every priority that either the National Guard leadership inside the building or the various associations and your Adjutant General would identify? No, we have not and I wouldn't claim that.
I do think that the process has improved. The dialogue has improved the trust and respect, and that is frankly where we have to start. We need everybody inside working together and we haven't always had that in the past. I think we have moved in that direction.
It has also shifted some resources towards the guard and reserve priorities, not as much as they would like to see, but it is an improvement from where we were. I would amend your statement there.
The second point you made was that we are not closing the bases. I am not quite sure what data you are using. I am happy to give you the overall data, to provide that for the record as to where we stand in each of the four closure rounds.
[The information follows:]
Offset folios 32 insert here
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I can tell you from personal experience in the Department, the Secretary had a base closed in Maine, Loring Air Force Base, and that is now closed.
I worked on the Senate side for Senator Kennedy from Massachusetts and Fort Devens, a major base in Massachusetts, was identified as a closure candidate in the second round. It was approved by the commission and that base is indeed closed.
Mr. PARKER. Well, out of 152 major installations, how many of them have actually been closed?
Mr. LYNN. I don't have that number in my head. We can provide that for the record. Do you have it, Henry?
Mr. SODANO. Ninety-seven. Ninety-seven of the 152.
Mr. PARKER. Have been totally closed?
Mr. LYNN. I don't know how to qualify the word ''totally'' so I would like to take that for the record and we will come back to you with a description of what we mean by the 97.
[The information follows:]
When we say a base closes, we are referring to when the flag is lowered, active operations cease and caretaker operations start. There are some instances, however, where the flag has been lowered and active operations have ceased at closed sites that a reserve enclave and/or a Defense Financial Accounting Service (DFAS) activity have been allowed to remain. As of September 30, 1997, of the 77 bases closed, there were 22 sites where either a reserve enclave or DFAS activity remained.
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Mr. PARKER. The reason I bring that up is because every time we turn around instead of closing it totally, what we do as a Congress is we turn around and allow them to change the mission or keep something at some of these places.
Mr. LYNN. There are procedures in the law. You go through the McKinney Act. You go through other government departments that have first claim. Those things have happened. I do not think that they have undercut the basic thrust of the base closure effort and I would cite that we think we will get on the order of $5.6 billion in annual savings from the four rounds of closure we have had.
We have been asked by the Congress to verify that number. That is a fair question. As an early indication in response to that, we asked the Inspector General of the Department, an independent auditor within the Department, to go and look. They have completed their review of the '93 round and they have concluded that actually we underestimated the savings and we overestimated the costs of implementation.
So they would suggest that there are actually more savings out there and there was a little bit less investment up front.
So I think this suggests that the savings are there from the actions that have been taken. As I said, our view is, when you ask the final point, am I comfortable that are we going in the right overall direction my answer is yes.
Before this job, I had the long-term planning job. When you look at statistics where we have a budget that is down almost 40 percent, a force structure that is down almost 40 percent and a base structure that is down somewhere between 21 and 28 percent (depending on how you count it, whether you count foreign bases and so on) that gap is too large. You could expect some gap and those statistics are not absolutely precise and I wouldn't want to overuse them that way, but we can't only have a one-quarter reduction in the base structure relative to 40 percent force and budget reductions. We will be spending too much money on unnecessary bases if we do that.
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Mr. PARKER. Thank you.
Mr. PACKARD. Thank you, Mr. Parker.
Mr. Cramer.
PRIVATIZATION
Mr. CRAMER. Thank you, Mr. Chairman. I will attempt to be brief but I am a new member of this committee and am very interested in the issues presented to this committee.
You are talking about a budget that commits funds for family housing, a budget that commits funds for barracks, for unaccompanied personnel, as well. I would assume that you have a priority list already of housing that needs to be constructed to replace old housing and housing that needs to be constructed to provide for personnel, essentially new housing.
You also are experimenting, if that is the right word to use, with private developers and have a couple of demonstration projects. You have 50 additional family housing candidate projects under review. How do you determine your priorities there? Share with me some of the division of budget monies for those housing needs.
Mr. LYNN. What we do is we try to do, on a case by case basis, a review of the potential of each of those 50 candidates for use of these privatization tools that we have been given by the Congress. These involve loan guarantees, leasing of property, guaranteeing some kinds of rent, and guaranteeing some kind of occupancy. There are a variety of incentives we can provide to the private sector that will cause them to invest their resources in the housing.
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We have to do this right. We have to go through and make sure we have bond rating and we have protection against foreclosure. We have to review base closure potential and it is a complicated legal review. That is one of the reasons it has taken some time, as the Chairman mentioned at the outset. So we are trying to make sure we go through all of those hoops and get this right.
When we have it right, as we think we have in Corpus Christi and Fort Carson, we can invest a fraction of the resources, sometimes a third, sometimes even as low as a tenth of the government resources that are needed and do that through loan guarantees and other devices rather than direct appropriations and we get the housing for the troops and their families.
Mr. CRAMER. So with that issue you think that the time delays offer you more benefits in the long run and that it is worth going through?
Mr. LYNN. We are quite sure of that. And we think we can compress that delay. Part of the delay is just that this is the first time through. We want to be very careful that we do this right and that we protect all the government's priorities as well as that we are choosing.
Mr. CRAMER. Are there any situations where the private developers will actually own the housing?
Mr. LYNN. Yes.
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Mr. CRAMER. In all cases they will own the housing?
Mr. LYNN. Not in all cases but in some cases.
Mr. CRAMER. In some cases they will. And the 50 that were referred to in what I assume is your statement, family housing candidate projects are under review; that is for private development?
Mr. LYNN. That is right.
Mr. CRAMER. But you are still proceeding with housing?
Mr. LYNN. Oh, absolutely.
Mr. CRAMER. And have a priority list to accomplish that, as well?
Mr. LYNN. Yes.
Mr. CRAMER. Quickly back to your expectations of two rounds of BRAC, and my colleague from Mississippi brought up some very legitimate points with regard to the past rounds of BRAC. I know my community there in Alabama at Redstone Arsenal, we inherited a number of BRAC jobs from other commands and it was very, very difficult to sort through the units that were supposed to come, to cause those commands to be efficiently located in one place. The resistance there—I would resist it, too, if it were the other way. So it is bound to happen. I would assume that you have a lot of loose ends left that would motivate you to want two more rounds in a BRAC.
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In other words, are your new rounds of BRAC motivated as much because you didn't accomplish everything you felt like you should have accomplished in the past rounds or because you just need to extend the closing to more bases?
Mr. LYNN. Both. I think at one point both the '93 and the '95 rounds were projected to be larger than they, in fact, were. What we found, frankly, is that there is a limit to what the Congress, the public, the Department can absorb in any one round. You can't just load it up and have a massive round. You need to do this in segments.
Mr. CRAMER. Any time you are transferring thousands of personnel from one location to another you have housing needs, you have working area needs, you have all kinds of military construction issues that would have to be a big domino into the military construction budgets that we are reviewing.
Thank you, Mr. Chairman.
Mr. PACKARD. Thank you, Mr. Cramer. One of the reasons we were anxious to pursue privatization as an alternative, a secondary process, is that it would allow us to leverage federal dollars with the private sector and thus try to catch up with the backlog much quicker.
In some instances our hope is that they will also develop a long-term maintenance agreement with the owner and they would maintain the facilities, we hope, better than we have done in the past with military money. That is our hope. We recognize that not every project fits into that mold and they are sifting through that now because again they haven't come up with the mold. They are still developing that and I guess——
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Mr. CRAMER. But making progress, I hear.
Mr. PACKARD. That is what I understand.
Mr. Tiahrt.
OVERALL FUNDING
Mr. TIAHRT. Good morning, Mr. Lynn. I don't know you yet. I am sure we will get to know each other better in the future.
I have to tell you I am very disappointed with this budget. I think it falls short. There is not enough money to address quality of life issues or the operational issues or maintainability issues. I don't think it considered the five-year plan (FYDP). It may have in part but certainly not in whole.
And I want to take off a little bit on the BRAC because I believe that there is not going to be support for a fifth or sixth BRAC because we have not completed the first four. And I believe this Administration politicized the process and will not have any support on the House floor until we get beyond that politicization and complete the first four BRACs.
I also believe your budget ignores the needs of our troops, particularly in the quality of life. I come from Wichita, Kansas, which is the air capital of the world. We have Boeing and Beech and Cessna and Learjet with all large facilities there. We also have McConnell Air Force Base. And we know of the demand for pilots in the next decade, and that demand exceeds the number of pilots we currently have in the military.
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You know, it is very appealing to go fly for an airline and we have to do something to hold these people in the military, to make it at least appealing to them to stay and serve our country. And those are all related to quality of life issues and I am concerned that we don't address those quality of life issues in the Administration's military construction budget.
And I see it sort of as starving our military and it is really not acceptable. We have not budgeted for Bosnia in this year's budget. And last year we were told that the Administration would budget for Bosnia, but it is not there. Now, is that extra money going to come out of military construction?
We haven't budgeted for a military strike in Iraq. Where is that money going to come from? Is it going to be coming out of military construction? I think this committee is going to work very hard to see that we do the right thing for our personnel. And last year we fought very hard to do what we believed was the right thing for our personnel, and yet we suffered the veto pen.
So before the President writes the first letter with his veto pen, I hope he will consider some things. First, let's check the five-year plan, the FYDP. Make sure that we take that into consideration. We believe that the people who are working the hard work of freedom, where the rubber meets the road, know what their needs are better than we do, so we listen to them. And I would ask the Administration to do the same thing.
Second, let's complete the BRACs that we already have gone through before we start another one. We have bases out there that need to be closed, some that the process needs to be completed on. When we get that done we will be in a better financial state, and you will certainly have more support in the House of Representatives to move on to another BRAC.
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And last of all, I want you to consider the quality of life issues related to keeping our personnel. It is a volunteer service and if it is not appealing, they are going to go on. And next year I hope that you will fulfill last year's promise to budget for Iraq and for Haiti and for whatever else comes up including Bosnia. We want to make sure that that is in the budget that comes from the Administration so that we don't feel like we are vulnerable to being robbed of the needed resources to keep our military personnel in a good quality of life, with the operation and maintainability that they need through capital investment.
Mr. LYNN. Let me respond. I think we are more in agreement on Bosnia than it appears. On Bosnia in the budget that is before you, and let me come back to '98, but the FY 99 budget that is before you, we have proposed that Bosnia and any increased cost in Southwest Asia be paid for out of a $3 billion allowance that is outside the defense budget.
What we are proposing is along the lines of what you were saying, that we cannot afford to divert resources from military construction, from family housing, from readiness, from modernization and from maintaining those things the way we think we need to maintain them.
What we should do is pay for Bosnia within this allowance, which is outside the defense topline. If the Congress approves that, we would be able, as I say, to protect those defense priorities, and that is indeed what we have proposed.
So I think we may be in agreement on that.
Mr. TIAHRT. That is encouraging.
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BASE REALIGNMENT AND CLOSURE
Mr. LYNN. Now, let me come back to your first point on BRAC. I take your point that you want to complete the first four rounds before embarking on a fifth and a sixth round. That is part of the reason that we have shifted the years. The first four rounds will be completed by 2001, the time a fifth round would begin. So you would have that kind of breathing space as you proposed.
Mr. TIAHRT. There have been bases that we are currently holding open that were scheduled for closure. So you're saying that this has been stopped further down to the right or further on in time?
Mr. LYNN. No, I am saying that the projection right now for the closure of the last bases in the fourth BRAC round, the 1995 round, all of them would be closed by 2001 and that would be the starting point for the next round, so there would be a gap.
Similarly, you mentioned politics involved in this and I understand the controversies that surrounded the last base round. By moving it out a couple of years, you try and insulate it Instead now of '99, you now have it in 2001 and you will be able to, I think, start with a clean slate in that way.
So we think that we have taken on both of your points and addressed them with the 2001 timing.
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Mr. TIAHRT. Well, they got tangled up in the presidential campaign last time and now we are setting ourselves up for the same problem, and that is not the way BRAC was designed. It was designed to be set aside from the political process. You set the commission up, you designate the bases and they close.
Instead, we are seeing it caught up in the political process and that is going to damage BRAC. Right now it has no legs on the House floor because of that.
Mr. LYNN. I understand the concerns. As I say, that is why we would propose that it be done after rather than before the next presidential election, to try and get it out of those politics. If you look at the detailed proposal, you will see that we have changed the dates somewhat, just a couple of months, but what we are trying to do is ensure that the incoming administration will have the opportunity to appoint the commissioners as well as review and submit the list.
Under the prior schedule, within a couple of months of taking office the new administration would have had to move forward on this. We are trying to build in a couple of extra months so that there is time for that new administration to review this. It will be that new administration, after the next election, that will put forward the realignment and closure list.
Mr. TIAHRT. Thank you, Mr. Chairman.
Mr. PACKARD. Thank you, Mr. Tiahrt.
Mr. Olver.
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AIR GUARD AND AIR RESERVE
Mr. OLVER. Thank you, Mr. Chairman.
I want to ask you a question, Mr. Lynn. I can't imagine that you would have the answer offhand but somebody around here might have it and I will come back to it and maybe get the answer after another couple of parts of my questioning.
Can you give me the number of people who are presently in filled positions, not authorized positions but filled positions in the Air Reserve, the Air Guard, the Army Reserve and the Army Guard?
Mr. LYNN. The actual number of people on board is what you are looking for?
Mr. OLVER. Yes, the filled positions, the positions that are people on board, as opposed to whatever the——
Mr. LYNN. The authorized spaces. I am not sure we are going to have that here. We don't have the personnel people here but we can provide that to you for the record.
Mr. OLVER. Then since you won't have that during my time of questions, whatever I may have, I would like to know what the filled positions in those categories were at the end of fiscal years '96, '97, '98 and your projection for 1999 because those are—there may be more that are important but those are key to this question of base structure in line with force structure, which is driving your arguments in relation to base closure grounds in the future, which, by the way, I think your timing is very responsible, given the need for completion and cleaning up loose ends and so forth and getting it away from the political process, away from the political process that it had been in the last time.
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So I would like to see those data over several fiscal years if you would, please.
Mr. LYNN. We will provide that.
[The information follows:]
Mr. OLVER. If there is any question, whoever is going to do this might talk with me later because I can obviously get more sophisticated questioning out of it.
OVERALL FUNDING
My other comment, I want to just reiterate and support what my ranking member has said about adequacy of budget, and others have already alluded to that I have heard here today. I think we are functioning under—the Chairman's comments are very much in line there—I think we are operating under a kind of formula which says to request 15 percent less than you had last year, 15 percent less, and so on.
Let me tell you that I think that that is rather tragic, given that we are talking about housing and quality of life and the training facilities for men and women up and down the line through reserve and reserve components, as well as the active components.
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One year ago, and I have only been on this committee just for the last year, one year ago the budget request was 15 percent of what had been enacted the previous year. This committee added onto that and the final budget, the only one of the 13 budgets going through this place that ended up being below what had been the previous year's budget was 6 percent below, ultimately, requested 15 percent below. We added on and brought it up to only 6 percent below.
So the request this year, today, one year later, is 15 percent below last year's enacted budget. And I would hope that, Mr. Chairman, that when we get done here, that we aren't going to be a penny below last year's enacted budget because I think that that is what in quality of life issues, in training facilities and in housing and day care facilities and health facilities, it seems to me that that is what we owe the people who are serving us.
So let me go on, if I may, to a different issue. I probably won't have time to really flesh this out but I may sit around here until we have another round of questioning and finish fleshing it out.
AIR GUARD AND AIR RESERVE
You had spoken in part in your testimony about the review of the assessment of how projects are coming forward, construction projects are coming forward. I wonder if you would review for me how those are assessed, particularly in the reserve and guard components, the Air Reserve, the Air Guard, the Army Reserve and the Army Guard components.
Do we have a common set of procedures by which those are assessed, some sort of objective set of procedures or criteria by which they are assessed or is it done in the Air Reserve and Air Guard different ways from the Army Guard and Army Reserve, each in their own way?
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Mr. LYNN. The general process is a devolved one in the sense that the initial responsibility for developing those requests does lie with the military departments.
So the Army goes through its process and the Army Guard and Army Reserve projects are considered against active duty projects, as well as the other needs of the Army. The Army puts together what they consider to be a balanced program. The Air Force and the Navy Departments do the same.
Frankly, the Air Force, the Air Force and the Navy have done a better job of integrating the guard and reserve components and considering those needs.
We are aspiring to bring the Army up to that level. That is what we would like to do. That involves actions by us and actions by the Army.
As I indicated, we took the initial steps this year with the defensewide process when those military department programs were submitted. We have now pulled the guard and reserve in. They are at the table. They are heard. The Secretary listens to their criticisms, their priorities, how they would assess the program before he makes his final decisions on what to submit to Congress.
As a result of that, this year there were some changes, increases in every case, made to the Guard and Reserve, not just in military construction but operating tempo, personnel, and equipment accounts as well.
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I think we need to continue. I don't think we are done. I think we need to continue that process and to try and get what I suggested at the outset was a total force approach.
We are never going to have all the resources we think we need to meet all of the priorities. We are going to have to make choices. But the choices should be made from a total force approach.
Mr. OLVER. Is it made in an objective way? Is there some set of criteria that all of these groups—the Army Reserve, the Air Reserve—of course, Naval Reserve, they don't have guard but the Air Guard and the Army Guard, they are all using the same set of criteria for how you assess what is the need for these particular projects?
Mr. LYNN. I wouldn't say they are all using the same criteria. They are different kinds of units with different kinds of missions. What we try to do, at a general level, we fund the first-to-fight units, the units that are most likely to go in the earliest stages, at a higher priority than units that are, say, in strategic reserve. You will find that kind of general priority across all of the services.
But when you get more specific, the Air Guard is integrated into the Air Force in ways that are different from the way the Army Guard is integrated into the Army. They get into more specific kinds of metrics and criteria that are unique to those missions and units.
Mr. OLVER. Mr. Chairman, I will come back to it. I will pick up right where we were.
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Mr. PACKARD. That will be fine, if you can catch it on the next cycle.
Mr. Wamp.
Mr. WAMP. Mr. Chairman, at the risk of sounding like Martha Stewart, let me recommend that while we are gone next week that we take those five seals and put them above these pictures here, above the speaker's chair for our Department of Defense and respective service academies. I kept wondering last year why we didn't do that, so I am just going to recommend that we do it.
Second thing, I want to applaud Mr. Hefner for his career and his service, his commitment. I grew up a Democrat and he was my kind of Democrat. He is my kind of Democrat—good, conservative——
Mr. HEFNER. Would the gentleman yield?
Mr. WAMP. Yes, sir, I would be happy to yield to you.
Mr. HEFNER. I was born in Tennessee. In fact, they are going to build a log cabin where I was born. But I thank you for that.
Mr. PARKER. Would the gentleman yield? Bill is the reason I left the Democratic Party.
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Mr. WAMP. I didn't mean to open up a can of worms. I reclaim my time. But I do applaud you, sir. This institution is sorely going to miss you. I think you are a tribute to the people of North Carolina and I wish you all the best.
And I welcome my good friend and neighbor, Congressman Cramer, to the subcommittee. He and I adjoin, our districts, and have worked together in a bipartisan way many, many times.
PRIORITIES
I also want to say I think this dilemma that we find with the President's budget request and this subcommittee is a perfect example of the problem that the House faces, that the Congress faces in the shift of constitutional authority on funding over the last generation, and it is a problem. I think more and more the Congress is giving up its constitutional responsibility for spending the taxpayer dollars to the presidency.
This is a perfect example of why the Congress needs to be the funding agent for the people and why we know the needs and we are close to the ground and we have the hearings and you can't just come through with some kind of magical pen every year without the hearings, without knowing the needs, without staying on top of the needs through these hearings for setting these priorities up.
To me, it is like trying to save money in Medicare and taking it out of beneficiaries instead of the providers. In many ways here that is what happens when you are talking about our troops.
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I just want you to know I appreciate the work that you do, sir, but I would like to know what the President's goals are for the quality of life of our active duty troops. What are his objectives? I.e., do his goals include resigning every troop that is serving with honor and does this budget reflect the commitment to carry that forward? I mean, what is the end game, or is this just an annual process of we are going to try to get what we can and meet the priorities elsewhere?
I really think if you are going to try to set those goals, you have to have a stronger commitment than we are seeing. How do you establish the priorities when you send this budget over, for quality of life? That is the number one issue for me. I hear it through all these hearings—quality of life, resign our troops, safety, security, that spouse that is going to make that decision.
You know, we have to increase their life and our ability to maintain the quality force that, in the modern era, we have become known for. When we deployed Desert Storm I think we were at a peak and frankly, I think we have suffered ever since then. I just want to know how you set the priorities, or is there a process at the White House where those priorities are actually analyzed?
Mr. LYNN. I think the President's priorities are what he has received on advice from the uniformed military leadership and those priorities are four: pay, retirement, medical and housing. Those are the four highest priorities for quality of life that General Shalikashvili first recommended, endorsed by the Joint Chiefs of Staff. I know General Shelton and General Ralston and the current chiefs endorse those four also.
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Mr. PACKARD. Let me interrupt for just a moment. Before Mr. Parker leaves I want to mention that he also is retiring and he is going to be sorely missed by this subcommittee.
Mr. PARKER. Mr. Chairman, I am not retiring. I am going to the House.
Mr. PACKARD. I don't mean that he will be retiring today. I mean at the end of this term and we certainly appreciate him.
Now please proceed.
Mr. LYNN. As I said, the four priorities, and these are the strong recommendations of the current and immediate past Joint Chiefs. Again, pay, retirement, medical care and housing. Those are the four key ones. Let me say where we are.
On pay, there is a 3.1 percent pay raise funded in the budget all the way through the FYDP. I don't want to say 3 percent is a huge amount of money but it is, given where inflation is, a real increase in buying power this year. It is higher than inflation. It is certainly well needed by the troops and their families.
On retirement, there have been no changes but the retirement program has been protected and is again fully funded.
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On the medical, I indicated in response to Mr. Hefner's question that we found that the program was underfunded and we added over $2 billion across the FYDP and about $500 million in '99 alone to try and ensure that the defense health program is fully funded, and that we don't run into the kinds of issues that we have run into in past years.
Mr. KINGSTON. Would the gentleman yield a minute on that? I would like to ask, is that for active and retiree? And if it is for both, what is the split?
Mr. LYNN. It is for active and retirees, for the whole defense health program, which is around $10 billion. The split—I don't know what the split is in dollars. I believe just over 50 percent of the care now goes to retirees. How that tracks in dollars, I am not certain, although retiree care would tend to be higher, just because of the demographics.
So those are the first three. Housing is indeed the fourth priority and I think that is—I am sure the congressman would agree—that that is where we need to continue to do the most work. We think through the privatization initiatives, we are going to be able to leverage the money we have. But as the committee uniformly has noted, the resources don't match what the committee provided last year and I think we need to address that in the out-years.
And, as I indicated in my opening statement, we think that the growing savings from the Quadrennial Defense Review will allow us the opportunity to do that.
Mr. PACKARD. Mr. Wamp, would you yield for just a moment on that?
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Mr. WAMP. I would be happy to yield, Mr. Chairman.
Mr. PACKARD. You have pointed out, I think properly, that in each of first three priorities—pay, retirement, medical—that you either held the funding or increased the funding. It is no priority when you make a 32 percent cut, and that is what you have done in housing. That is not a priority. That has been dropped off your list as a priority. You just can't consider that a priority if you have made a 32 percent cut.
So even though you are trying to address it, we will look at that very carefully but I would suspect that there is no way in the out-years that you are going to be able to recapture that 32 percent loss that we are sustaining this year.
Mr. WAMP. Reclaiming my time, if you had four children in college and you told three of them that we are going to give you the same budget you had last year or more and one of them you are going to cut 32 percent, that child would be a proverbial redheaded stepchild, and that is where we are. That is the point the Chairman made.
Mr. HEFNER. Would the gentleman yield?
Mr. WAMP. Yes, sir.
Mr. HEFNER. The problem as I see it goes back to when I was chairman for about 10 years before Mr. Packard. You talk about priorities. The guys across the river get together and work their special programs. This happens especially with the defense bill that you are talking about. ''I instigated this program,'' whether it is the B1, the M1 tank or whatever. ''This is my program,'' and they shepherd it through and they get the money.
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But they don't really get the money, when it gets down to military construction and housing projects. They figure those guys over there that have all these bases are going to look after the military guys. This committee, is going to look after that, so we won't put too much priority on it because they are going to beef it up.
Then we come in here with reduced budgets compared to the Reagan Administration and the Bush Administration, With these reduced budgets it is hard for us to get a fair and equitable allocation.
Last year or the year before last—I forget which year—we had a rescission and we were responsible for the major part of that rescission in this little committee, and this is, moneywise, a small committee.
So I still maintain that President Clinton and previous Presidents, Reagan, Bush or Carter don't really have any idea what quality of life is all about. We didn't use to even talk about quality of life until a few years ago. Now you have a subcommittee on quality of life here in the House.
So I don't think the people down on Pennsylvania Avenue are as concerned about military folks as they should be. I don't think they even zero in on quality of life and housing for our military. It is just something that is not real high on their radar screen.
And we have fought it every year. We have talked to the chiefs as they come in here and told them that you are going to have to be a little bit more concerned about your troops. And they all say, ''Well, we are working hard over there. We are working hard.''
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Then we come back with this budget and I am assuming that the chiefs have all signed off on this.
Mr. LYNN. Yes.
Mr. HEFNER. So where do we go? We don't have anyplace to go except to the Budget Committee and say, ''Hey, we have to have more allocation.'' Then the people in all the other committees say, ''Hey, we can't give up any of our allocation.'' So we wind up behind the you know what.
I thank the gentleman.
Mr. WAMP. I yield back, Mr. Chairman.
Mr. PACKARD. Thank you.
Mr. Kingston.
BASE REALIGNMENT AND CLOSURE
Mr. KINGSTON. Mr. Lynn, let me say a guy told me one time you can fire somebody at the U.S. Post Office but you have to have the stomach to do it. It takes a long time to get through the process, and I think that is the process you all are in with the BRAC. I realize that you are damned if you do and damned if you don't but I don't know that you can really be expected to fully implement all of BRAC. And I do think that a lot of people use that as a shield to stop the fifth round.
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So it is a horrible job but I don't know that you should necessarily stop. I have military bases in my area that are very important to us economically but no one is guaranteed a military base. The point of the military is to fight and win wars, not economic development for an area. I just want to say that.
You know, deployability may be outside your realm but we do talk about quality of life in today's military. You have a lot more young moms and dads in it. As I understand it, during Desert Storm there were a lot of popular bills that popped up that nobody who was pregnant would be deployed and so forth. You know, there is a good humanitarian argument for that but it is a very lousy military situation.
Under your realm is there anybody looking under the deployability of the United States armed services right now? You know, the question that if we get involved in Iraq, Bosnia, wherever, how many of the soldiers that we are counting on are actually deployable? Do we know?
Mr. LYNN. We do know. I don't. You would want to talk to Rudy de Leon, the Under Secretary for Personnel and Readiness. We can get you the answer for the record but I can't provide it to you at this minute.
[The information follows:]
As of September 30, 1997, the number of permanent non-deployables is 3,817. Of that number, 3,265 are male and 552 are female. The number of temporary non-deployables is 59,316. Of that number, 42,168 are male and 17,148 are female.
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Figures on non-deployable personnel are provided each year in the Secretary of Defense's Annual Report to Congress.
Mr. KINGSTON. It has been suggested that it is—you know, we are sitting on a volcano here because we are not as deployable as we think we are because of all the young moms and dads and single moms and dads that are out there.
CHILD CARE
Child care. I had one of the more respected members of my military advisory community tell me that child care is a loser for posts and bases, that we are pushing child care but it is a loser. It takes a lot of money and we should privatize military child care. How do you feel about that?
Mr. LYNN. It is certainly something we should look at as far as the defense reform initiative. We are trying to look at any functions that aren't core functions in terms of the fighting forces. We ought to look at privatization of child care. Certainly that is a candidate.
I think we have quite a strong system. You have seen the President has actually been using DOD as an example in some of his child care initiatives for how well we are doing.
So I think we want to make sure that as we look at privatization in that area, we don't lose the quality that we have obtained because, for exactly the reasons that you are indicating, we have shifted to a very married force, a very family-oriented force. If we are going to be able to deploy people and have people ready, we have to provide them with the kind of child care they need.
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I think you can see a change in each of the military department's attitude toward child care over the last decade. It is a consequence of how the make-up of the force has changed.
Mr. KINGSTON. I think we should certainly continue providing child care but based on the military mission, it really murks up the water, if you will, and I think we should really move toward privatization of these child care facilities, as I understand it, because it is taking money out of other things, anything from quality of life, pay raises and retirement, to maintenance of weapons.
One issue that comes up from time to time is when you have a military post or base and they have housing there, and the local community has entrepreneurs who have apartments and so forth, they feel that they are competing and they should not be competing.
And not only is it limited to housing but often to restaurants who have to compete against an officers' club, which is now open to the public and can advertise on the radio, ''Come eat at the officers' club.'' The price is about the same but the officers' club really isn't there to compete against other restaurants.
Are we addressing this or are we just kind of fighting these on a case by case basis?
Mr. LYNN. There is no general policy in the Department, to my knowledge, at this point. It is being worked on a base by base basis.
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Mr. WAMP. Would the gentleman yield?
Mr. KINGSTON. Yes.
Mr. WAMP. Last year I know when we addressed that issue clearly troops would rather live on the base in most cities because of security. So that frankly puts those private developers off the base unless they are involved in one of our privatization programs, at a competitive disadvantage because the security on the base is much more amenable to the average troop.
Mr. PACKARD. And usually, if you would yield, usually there is a differential between the housing allowance and what it costs them to live off-base.
Mr. HEFNER. If the gentleman would yield, on the other hand, the people who say, and I remember in King's Bay before you came here they always brought the mayor up here from—what little town is that near——
Mr. KINGSTON. St. Mary's.
Mr. HEFNER. They would introduce the mayor and he would give this story about how tough it is and all this stuff. So one day we just said, ''Well, would it be satisfactory with you if we closed the base?'' ''Oh, no, no, no.''
So the people that are working outside the base, they can get the support people to come in, so they have not an advantage but they have the possibility of renting their stuff and they sure wouldn't want the base to close under any circumstances.
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And this program that they are embarking on, what amounts to a housing authority, I think has some real merit to it.
Mr. KINGSTON. I think it does, too.
Mr. HEFNER. It is going to let entrepreneurs go in and it is going to guarantee them occupancy and it is going to be that after a certain time it will be theirs. Of course, I can't see them moving it off the base but I think that has some real potential.
I thank the gentleman for yielding.
Mr. PACKARD. There is a vote on and I have several questions that I wanted to ask and I know that Mr. Olver had some questions.
Mr. OLVER. I do. If you want to ask, I will go vote. If you want to let me ask, you can go vote. Or we will come back.
Mr. PACKARD. You go ahead. I will run and vote and come right back because I would like to spend just a little bit of additional time. If you need to adjourn for just a few minutes, do that.
Mr. OLVER. I think I can probably filibuster until you get back.
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PRIORITIES
Mr. Lynn, to go back to where we were before, and this way only the staff will have to endure this, rather than all the members. The question I was asking, and now I will add a little bit to the original question because it will be fairly easy for you to give it, I think.
The question I was asking about the number of filled positions was to get a sense of how fast the force structure is changing over the last few years as we have gone through the recent BRAC commissions and what your projections are for the future in order to assess how your goals fit in with what is actually happening on the ground. There also is another purpose but that is the key purpose.
So I think I was saying give me, please, the Air Reserve and Guard and the Army Reserve and Guard, but I think it is probably just as well if you gave me the air active, army active and the naval active and reserve. So there would be eight—it is just a chart, eight groups. The army active reserve and guard, air similar and naval active and reserve.
And then I think the chart ought to be a little bit longer. Rather than just going to projections for fiscal '99, it ought to include fiscal '00 and fiscal '01 because that would get us really up to where the BRAC commissions are.
That would help me, at least, understand what has happened to the force structures and what they are likely to look like and see how this all makes some sense.
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Now, to go back to the other question where I was asking about how projects that come to the FYDPs were being reviewed, I wasn't sure, and maybe the question as I put it forward is not sufficiently precise so that you would know what I was looking for but I have been following last year the procedure by which Army Guard projects came up and in part, we all discovered, I think, and maybe everybody else knew, I am sure—I certainly discovered that the procedures in the Army, the relationship between the Army Guard and the Army active and reserve are different, say, from the procedures and the relationships between the Air Force active, reserve and Air Guard. They seem to be somewhat more coordinated in the case of the air, rather than the army.
And I had then asked questions and was told that there was a procedure being developed, in the case of Army Guard, for assessing in an objective way, hopefully objective way, what projects ought to be put forward. And the three criteria being used there are what you called first-to-fight, which is how it fits into the readiness needs of the whole force structure; secondly, the adequacy of the facility as it sits in place; and thirdly, the state priority. Well now, state priority only relates to the Army Guard and the Air Guard.
So what I was wondering was whether this was a common set of systems. I am told that the issue of first-to-fight essentially represents 40 percent of the total determination, that the issue of adequacy of the facility represents 35 percent of the determination and the priority, the state priority represents 25 percent of the determination of what the score is that projects get in the consideration of the Army Guard Bureau.
I was wondering whether there was a similar sort of situation, same or similar, that represents the criteria, the objective criteria being used in looking at what Air Guard projects are under consideration.
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And then, of course, I am projecting backward. I am wondering are we using, for instance, for considering Army Reserve or Air Reserve projects and how they are to be assessed, are we using only the first-to-fight and the facility adequacy as issues under consideration or some other set? Maybe you could tell me whether there is some set of criteria in each of these categories that defines how those projects are being put forward.
Mr. LYNN. I am afraid I can't. I think you will have before you during your month of hearings the representatives from each of the services who are, I think, doing what you have suggested. They are the ones who are putting forward the MILCON projects in their individual component and how the Air Force system compares to the Army system, I'm afraid, is a question that I can't answer at this point.
Mr. OLVER. They are in deep trouble because that will mean I will have to ask every one of them as they come in, what is the procedure by which they are bringing forward those projects. I think as one looks at what has happened in the case of the guard, it is quite interesting what projects are coming forward.
Mr. LYNN. I don't understand where you want an answer on that.
Mr. OLVER. Well, in relation to the Army Guard, my read of the objective scoring system is I see all of the projects which have the highest score are sitting out in '03 and beyond.
Mr. LYNN. As I said, I am not familiar with the scoring system that you have described. The Army does that internally. I think you would have to discuss that with them. I can try to get smarter on this and come back to you but I just can't answer your question.
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Mr. OLVER. I thought you might have some sense of whether this was a procedure that was being implemented across the eight, really. I have now discussed it in relation to four of the eight categories, whether it was being done across all those categories or only in those four or maybe it is only in the one. Maybe it is only being done in the Army Guard, but I will explore the answer to that over time.
Mr. SODANO. We review the requests that come in for executability, pricing and whether they satisfy the most critical requirements, but we review what the services normally submit. We don't go out into the out-years.
So placement in the out-years is really dependent upon the services' priority and whatever scheme they use to rank those. That is pretty much up to the individual service.
So the Army may do it one way, whereas the Air Force may do it a different way.
Mr. OLVER. Maybe there ought to be a systemwide approach to this because if you put forward a so-called objective scoring system and all the projects with the highest score are sitting out in '03 or beyond, then I would wonder how projects are getting—what is the point of having an objective scoring system if all the highest scoring projects are out there. If you have right criteria, which it seems to me first-to-fight is a perfectly reasonable criteria, and adequacy of facilities is a perfectly reasonable criteria.
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When you're talking about guard structures, priorities at the state level ought to have a certain play in this. It seems to me that those are reasonable criteria to consider. But if the end result of that is a scoring system that puts all your highest scoring projects out in the '03 and beyond, something is not playing out.
Mr. LYNN. If the situation is as you describe it, obviously there is a problem. I am not familiar with that scoring system or the placement you describe in '03.
Mr. OLVER. All right. So that is the rest of my comments and I think we will have to recess until the Chairman comes back.
[Recess.]
Mr. PACKARD. We will reconvene. Let me go into some of the questions that I had.
LINE ITEM VETO
I was going to have a question on the line item veto. As you know, we overrode rather overwhelmingly in the House and I expect them to do the same in the Senate and I wanted to—I was going to ask really—first of all, I was going to comment that we would hope that we are never put in that position. We did not want to be in that position. We felt that we did our work and in this instance there were some things that we didn't think the President did.
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We would hope that on any line item veto that we would be consulted before and at least brought in because we are not the enemy. We are trying to accomplish the same goals.
But that all may be moot now. I just have an announcement that was handed to me from the Associated Press that a federal judge today declared the President's new line item veto authority unconstitutional, so it may be a moot point.
ADVANCE APPROPRIATIONS
Let me cover a couple or three other items, though, that I think are important. For the first time in over a decade, we see where in your budget request you are requesting the advanced appropriation opportunity. Would you explain why you are seeking that and how you expect it would benefit in terms of your budgeting?
Mr. LYNN. The answer to both questions is the same. We thought that in a certain number of projects, longer ones that take longer than 26 months, the advance appropriation would allow us to get the most out of the individual year's appropriations for construction projects.
Mr. PACKARD. Do you have any criteria that you use to determine which projects you would use that procedure?
Mr. LYNN. They have to be longer than 26 months and the contracts have to be separable.
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FAMILY HOUSING CONSTRUCTION REDUCTIONS
Mr. PACKARD. Okay. On the family housing construction request, we have talked quite a bit about that, the fact that we are concerned about how much of a reduction is being requested. But in terms of privatizing, do you see privatizing eventually replacing our traditional way of funding base and family housing and other infrastructure, or do you feel that it will be a supplement to our existing program?
Mr. LYNN. I don't think we know yet. At this point it is a supplement. I think the Army in particular is interested in being very aggressive and moving heavily in that direction. We are still in the stage of reviewing the projects that we have and seeing where this is applicable, and I don't think we can see yet what the end point is.
There certainly are going to be some projects that are not going to fit and we are going to have to retain the traditional means to do that. What the proportion is going to be at the end, I would hesitate to predict.
I should add that what we are going to do, I think, is try and use the most effective means we have to replace the housing on that 10-year schedule. So if that means going heavily in this direction, we would be inclined to. If it means more of a mix, we would do that.
PRIVATIZATION
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Mr. PACKARD. Do you feel that you are aggressively pursing the privatization?
Mr. LYNN. Oh, absolutely. I think that the numbers show that.
Mr. PACKARD. And I was particularly pleased to hear your comments early on regarding utilities, particularly underground utilities, expensive replacement of utilities that you are looking at the private sector in that area. I think that is a good effort and obviously we hope that your review will help you to determine what is the best course of action to take.
I am not saying which is the best course of action but I have felt that one of the neglected areas for some time is the very expensive and yet often antiquated underground utility system that many of our bases have.
Many of our bases are World War II vintage, at least, and that is when the water systems and the sewer lines and the power systems and all of the other—your drainage systems and so forth—were put in, and often they have outlived their life and they are going to require huge amounts of money to replace.
Your utility companies and a variety of other private sector opportunities are there and we hope that you will look at it carefully but recognize that—and it's true in housing—that at the present time it is a supplement. It doesn't replace. It may eventually move in that direction but right now I think we would hope that you would not throw all your eggs into the private basket.
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Do you have any comments on that?
Mr. LYNN. I think we are thinking along the same lines as you, Mr. Chairman. We think that there is an enormous amount of potential in the privatization of the utilities.
As you know, it is not without controversy and we need to work through those issues as we do it, but the potential is certainly there.
FAMILY HOUSING IMPROVEMENT FUND
Mr. PACKARD. It appears that you are going to be shifting the costs of housing from construction and operation and maintenance accounts to personnel accounts. I think your comments indicated that. Do you anticipate any savings next year?
Mr. LYNN. The impetus here is not really savings. It is really trying to get the most out of the housing dollar. We have a very large inventory, 345,000 family housing units. We need to turn as many as two-thirds of those over, replace or renovate two-thirds of those—by 2010. And what we are looking for is to be able to leverage the dollars we have to achieve that goal. We are not really looking to generate savings for other priorities in that instance.
TRANSFER AUTHORITY
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Mr. PACKARD. The transfer authority, your budget proposes a provision that would allow you transfer up to $200 million between accounts. Why do you seek that?
Mr. LYNN. Flexibility of management, to be able to meet the needs of the Department. It's a fact of life that changes come up.
Mr. PACKARD. $200 million is a lot. When you are looking at, in your budget, a $7.8 billion budget, that is a pretty healthy percent. What percent would that be? About 1 or 2 or 3 percent.
You are not going to get that. I can almost assure you of that because what you are doing is you are bypassing this committee. We have a reprogramming process that allows us to make those kinds of transfers and I think you are going to see that probably continue.
Nevertheless, I was wondering what—of course, you would like to have all the flexibility you could.
Mr. LYNN. There is clearly a tension between management flexibility and committee oversight.
Mr. PACKARD. We have been pretty good at managing to grant transfers. We will continue to do that, but I don't know that you will see language in the bill that will reflect that kind of transfer.
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Lastly, it looks like they are still on the first vote so I am glad I came back and we can wrap this up. I applaud what I see happening in terms of your total force concept, particularly with the Army, the way they are trying to integrate the guard and reserve into their active duty programs.
I went to a briefing. Were you there at that briefing?
Mr. LYNN. No.
Mr. PACKARD. I went to a briefing the other morning and listened carefully to their plan and frankly, I liked what I heard. But my concern is that as there is an effort to integrate their functions, I will be very interested and observant as to how they integrate the budgeting process, whether, in fact, the guard and reserve's budgets will become an integral part of the budgeting from the active duty Army. That will be a very interesting thing.
If that happens, then I think you are definitely moving in the right direction. But if the guard and reserve remain as a stepchild in the budgeting process, as it has in the past, and you go through the rhetoric of integration but if there is not a true integration of budgeting for guard and reserve functions as they are integrated into the Army, active duty Army functions, then it is a sham and I would not be happy about that.
ARMY GUARD AND RESERVE
But I think that it is moving in the right direction if the budget of the Army Guard and Reserve is also integrated and becomes an active part of the overall budgeting process for Army activities and functions. If they truly become an integral part, a total force part of the Army, then the budget will reflect that all the way through. And if that happens, then I think we have made a good move.
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I will watch carefully to see how the budgeting aspect of guard and reserve, Army Guard and Reserve, in light of what the emphasis is and you have certainly been emphasizing this total force and particularly the integration aspect of guard and reserve with the Army itself.
Do you have a comment?
Mr. LYNN. I think you have well stated the goal. This has to be more than rhetoric. But I would even go further. I think we need to not only change the processes, like the budget process; we need to change the fundamental relationship. I think the integration has to be at the personal level between the Guard leadership and the active Army leadership and then down the chain, and that is what we are seeking to achieve. And General Reimer, I think that is the briefing that you are referring to, with General Reimer——
Mr. PACKARD. Right.
Mr. LYNN. I think General Reimer is stepping out to do that. And I am hoping under his leadership we will be able to make dramatic improvements. If we do, I think they will show up in the budget process, but that will be the manifestation of a more fundamental change.
Mr. PACKARD. If it doesn't show up in the budget process, then I don't think it will ever show up in reality, in terms of the integration effort. And that means that the guard and reserve people need to be at the table—at the planning table, at the development of the budget table. They need to be at the table where their input is heard. Otherwise they will still look upon themselves as a stepchild.
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Well, I believe that that covers virtually all that I had to talk about and bring up.
QUADRENNIAL DEFENSE REVIEW
I guess one further question would be you had indicated in your Quadrennial Defense Review you intend to beef up MILCON in the out-years. Has that been quantified? Do you know; are there figures? Or is that simply an intent at this time?
Mr. LYNN. It is both. It is quantified. The Future Years Defense Plan lags some of the other budget preparation material a little bit. You will be getting that in the next few weeks and you will see for yourselves.
In that you will see that the family housing program goes up and the military construction, taking the BRAC costs out as separate entity, also will go up. And that is what is in the current program.
Now, I don't want to stop there though, because the key point and where the rubber meets the road is when you take that outyear program and you craft it into a budget that is submitted to the Hill.
And I think the key test and the one that you should hold us accountable on is how much of that outyear programmed increase is actually held in as we present the budget to you next year and in the following years.
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LINE ITEM VETO
Mr. PACKARD. Let me conclude the hearing with picking back up on the line item veto that we have been through. We would hope that what took us to the point where we had to make the effort to override would be resolved. In other words, it should never have gotten to that point. We would hope—you see, we have been set up for that. This committee has been set up for that because you come in with a low budget request. We automatically strengthen that. We are expected to do that in some areas and we do. Then that sets us up for a line item veto, and that is what happened this last time.
We scrubbed those projects very carefully and they were good projects and I am not going to go through that, but the President didn't do his homework adequately on many of those projects. Thus, the line item veto took place and that is where we got the bipartisan momentum to override.
We don't like to do that. That is a bad position for us to be in. I don't relish the need to even challenge the President on a line item veto, but we had to this time, we felt.
But even if the line item veto now is not constitutional, and that could be challenged but we don't know, it still puts us in a position that I don't like to be in, and that is where the President has submitted what I consider a low budget; we are going to strengthen that with add-ons. It is just going to be an automatic part of our duty and our effort. Then we run the risk of having the President veto it. In this case it was line item veto but the next time, if he doesn't have the line item veto, he may feel inclined to actually veto our bill.
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I really want to emphasize that the President's people, and really that is you guys, ought to come to us and sit down and say, ''Look, we have different views on this. Where do we go? What can we do?'' rather than putting us in a position to either override an outright veto of the entire bill or, if something happens to the line item veto authority but it still is challenged and delayed, and we are going to get into that this year or next year, that we don't have to override a line item veto, either.
Communication, sitting down and working and so forth because the very issues that the President stated publicly for his justification of lining out the 38 projects are the very issues that we concentrated on on each project—making sure it was executable, making sure that it addressed quality of life issues. All of the things that he listed that we didn't do, that gave him justification for lining out, are the very areas that we really concentrated on doing our duty and our job on.
So he simply did not consult with us. He didn't consult with the DOD adequately and we hope you will use your influence to help us avoid those kinds of conflicts. We don't want to be in those kinds of conflicts. We are willing to work but, at the same time, we are not going to allow the President's authority to veto or line item veto without us doing what we have to do.
So with that, I am going to conclude the hearing, unless you have some further comments.
Mr. LYNN. No. Let me just say I agree with the Chairman that we need to improve the communication. Last year was the first year of the line item veto and this was the first bill, and I think it suffered from that. I think we can improve.
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Mr. PACKARD. I think you already did. I think on the defense budget you made significant changes in the way you approached the line item veto and, frankly, all the rest of the appropriations bills.
So we were not harsh on the President. It is just simply that we weren't going to allow mistakes to be made with this kind of authority. So we felt that we were gentle with the President and, at the same time, sending a message back that this great power that we had entrusted to him had to be used properly. And I think that because it was a bipartisan effort, I think it is a message the President probably heard on the other bills.
At any rate, we want to work with the Administration, not in opposition. Frankly, that is my style and I want to emphasize that.
Mr. PACKARD. With that, I will close the hearing.
[CLERK'S NOTE.—Questions for the record submitted by Chairman Packard:]
Overall Funding
Question. The budget proposes a reduction of $1.4 billion, or 15 percent. This is on top of a $2 billion reduction in the past two years. We continue to see a trend of decreased funding, with resources taken away from badly needed facility and infrastructure improvements. What do you attribute this to, and what can be done about the lack of support and funding requested by the Department?
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Answer. While it may appear that military construction is taking a disproportionate share of the reduction between FY 1998 and FY 1999, in reality the FY 1999 Military Construction program is returning to planned program levels. The FY 1999 program reflects a level of funding that is affordable, satisfies the highest priority requirements, and is relatively constant with previous levels, less congressional adds which account for $800 million of the reduction. In addition, the requirements for Base Realignment and Closure (BRAC) have declined due to the completion of BRAC II at the end of FY 1997, and reduced requirements for BRAC III, primarily in the construction area, which accounts for another $327 million of the reduction. The balance is primarily attributable to a $276 million decrease in family housing construction of which over $200 million is related to congressional adds in FY 1998.
Advance Appropriations
Question. The request includes advance appropriations of $569,000,000. Why are we seeing this change in policy?
Answer. This change in policy will enable us to manage our resources more effectively by not budgeting resources in advance of need.
Question. What criteria were applied in determining which projects would receive advance appropriations?
Answer. The nine projects, eight Army and one Navy, were selected based on the length of the construction schedules (more than twenty-six months) and the Service's estimate of the amount of construction the could be executed in each fiscal year.
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Question. What benefit is expected from advance appropriations?
Answer. The Department hopes to make more efficient use of the available funding and of existing authorities by not budgeting funding for construction that cannot be executed in the budget year. For these nine projects, the Department has requested full authorization up front as well as advance appropriations in subsequent fiscal years for the completion of the construction.
Line Item Veto
Question. What efforts will the Department take to correct the inaccuracies which resulted in the line item veto of $287 million from our bill?
Answer. The Department directed the Components to place any vetoed projects back in the program year in which it was originally identified. For example, if a project was programmed in FY 2001 and it was accelerated into the FY 1998 program, but was vetoed, the project should be placed back into the Components' FY 2001 program.
Question. We anticipate the Senate will vote to override for last week of February. Can you ensure the Committee that, if the veto is overridden, the appropriations for these projects will be allocated to the various Components for execution?
Answer. Yes, if the veto is overridden, I can assure you that the full amount associated with these projects would be provided to the Components for execution.
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Facility Strategic Plan
Question. Explain the Department's efforts to produce a Facility Strategic Plan by 1999.
Answer. The Office of the Deputy Under Secretary of Defense (Industrial Affairs and Installations) has sponsored a cross-department working group with the purpose of defining and developing a Defense Facilities Strategic Plan. The working group has created a framework, which is pending formal approval, that includes vision, mission, goals, strategies to achieve goals, tools to implement strategies, and metrics to gauge performance. After formal approval, we implement the framework by refining existing strategies, tools, and metrics and creating new ones where needed. We will complete work on these strategies by the end of Calendar Year 98, in time for their incorporation into the Defense Planning Guidance for the 2001–2005 programs.
Facility Reductions
Question. What effort is DOD making to dispose of surplus real property?
Answer. As part of the Defense Reform Initiative, each military Service surveyed its building inventory to identify the obsolete and excess buildings they could demolish or otherwise dispose of. The survey identified 80 million square feet and about 8,000 specific structures. If necessary, the Services increased funding in the Fiscal Year 1999 budget for demolition so they could eliminate these structures by the end of fiscal year 2003.
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Base Realignment and Closure
Question. Why does the Department need authority in fiscal year 1999 for rounds of base realignment and closure that would not occur until 2001 and 2005?
Answer. This summer the Department will make program decisions for FY 2000 through FY 2005. Over the next 3 years, the Department will make important decisions regarding the procurement of many systems critical to our future military capabilities. Receiving authorization now for new BRAC rounds in 2001 and 2005 allows the Department to plan for a smaller base structure so that resources that would otherwise be wasted on excess infrastructure can be devoted to modernization and readiness. We also need additional time to plan for cross-Service and cross-function issues largely unaddressed in past BRAC rounds that could contribute significant savings in future rounds.
Question. Is it correct that the Future Years Defense Program has ''place-holders'' for FY 02 and FY 03 funding? If so, how much is set aside in each year, and how would administrative expenses be financed prior to FY 02?
Answer. Yes, the Future Years Defense Program contains funding for additional rounds of base closures. We have set aside $830.0 million in FY 2002 and $1,447.0 million in FY 2003 to initiate an additional round in 2001. Funding for a second additional round for 2005 will be programmed in 2006. All administrative expenses that are not directly related to closing or realigning a base will be financed from the Department's mission funding in the operation and maintenance account.
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Family Housing Construction Reduction
Question. For the past two years we have seen funding levels for family housing construction and improvement reduced from enacted levels by 25 percent and 31 percent. Again, this year these accounts are reduced by $221 million, or 32 percent. Explain the repeated decline in this request in light of the importance of this issue.
Answer. Family Housing remains one of our top quality of life issues; however we are never going to have all the resources we think we need to meet all of the Department's priorities. The decreases reflect the Services' prioritization of programs within available resources. We hope that the privatization authorities will enable us to leverage our housing funds and that growing savings from the Quadrennial Defense Review will allow the Services to devote more resources to Family Housing.
Family Housing Improvement Fund
Question. The Department is placing an emphasis on family housing privatization, yet only requesting administrative expenses ($7 million) for the Family Housing Improvement Fund. Instead, the Department will rely on transfer authority. Please explain this rationale, and what assurances can you give us that the normal construction programs are not being slowed down due to this form of funding?
Answer. In most cases, consistent with the design of the initiative, the Services will transfer appropriations for housing construction projects into the Family Housing Improvement Fund (FHIF) to finance privatization projects that leverage these traditional construction funds into more housing more quickly. For projects with high leverage potential without a transfer source, the remaining $20 million from the FY 1996 and FY 1997 FHIF appropriations will be used to fund the government's contribution. Each year, the Department's requested Family Housing projects are for locations with the highest priority housing needs. However, we do not know at which locations privatization is a viable alternative to construction. By requesting appropriations for projects in the family housing construction accounts we can proceed quickly with the construction projects if a privatization deal cannot be worked. The transfer authority provides us the flexibility to leverage the funds if the opportunity for privatization exists. While projects may be delayed during the assessment of privatization options, we believe the potential benefits from leveraging are worth the wait. In no case would we delay a project beyond the period for which funds are made available.
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Question. Family housing construction requests are down. And, the Department intends on privatizing 30,000 family housing units by the year 2000. Is this program becoming a substitute for the traditional housing program versus a supplement as it was originally intended?
Answer. No, privatization is only one of the tools we are using to improve our inventory of approximately 200,000 inadequate family housing units. We expect to privatize where it makes sense and continue to use traditional military construction where it doesn't. The Military Departments are currently preparing base by base plans to meet the Department's goal of eliminating this inadequate housing inventory by 2010 using the combination of military construction, privatization and demolition.
Question. It appears that we are going to shift the costs of housing from the construction and operation and maintenance accounts to the personnel accounts. Do you anticipate any savings with this shift?
Answer. First I would point out that the majority of our housing costs are already in the military personnel accounts in the form of housing allowances. The Department's policy is to rely first on local communities to meet our housing needs and two-thirds of our military families live off base and receive housing allowances. Secondly, while our privatization efforts are aimed at leveraging housing funds and not at generating savings, various studies have shown that paying housing allowances is more cost effective than constructing, operating, and maintaining our own housing.
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Transfer Authority
Question. The budget proposes a general provision which would allow the transfer of up to $200 million between any accounts in the bill, and this could be accomplished at the determination of the Secretary and upon the approval of OMB. Congress would be given an ''after the fact'' notification. What is the need and rationale behind this request?
Answer. Under the proposed transfer authority, the reprogramming guidelines established by 10 U.S.C. would still apply. Therefore, the Department would be required to provide congressional notification prior to accomplishing any transfer between accounts. As is the case with all reprogramming requests, the Department does not proceed with the projects until both the House and Senate Appropriations Committees have responded to our request.
This authority would be useful to the Depart