Statement of Administration Policy: S. 3114 - National Defense Authorization Act for Fiscal Year 199

(Senate)
(Nunn (D) GA)

S. 3114, as reported by the Committee on Armed Services, fails to conform to the President's defense priorities. The /Administration urges the Senate to amend the bill to make it consistent with the President's program.

The Administration strongly opposes the bill's provision that would allow abortions on demand to be performed at overseas U.S. military facilities in cases other than when the life of the mother is endangered. If S. 3114 were presented to the President with this provision, the President's senior advisers would recommend a veto.

S. 3114 would authorize FY 1993 appropriations of $274.5 billion for national defense, $6.5 billion less than the President's request. Of particular concern, the bill would:

—   Authorize only $4.2 billion for research and development for the Strategic Defense Initiative (SDI), approximately $1.1 billion less than requested. This cut would delay initial deployment of strategic defenses. S. 3114 would authorize only $350 million of the $576 million request for space-based interceptor development. This would severely restrain implementation of the global element of the President's proposal for ballistic missile defense, despite the 1991 Missile Defense Act requirement of "robust funding." The Administration urges the Senate to authorize the program at the level requested in the President's Budget. Moreover, the Administration would strongly object to any amendment which would further cut the SDI program. Unless the bill resulting from Conference sustains our ability to pursue global missile defenses consistent with the Missile Defense Act, the President's senior advisers would recommend a veto.

—   Authorize $81.7 billion for Operation and Maintenance, approximately $4.2 billion less than requested. A cut of this magnitude cannot be achieved by reducing supply purchases and overhead activities without harming troop readiness. The Department of Defense (DOD) is reducing inventory levels and overhead costs. The proposed reductions would disrupt current operations and lead to reduced levels of needed supplies.

—   Authorize only four of the eight C-17 aircraft requested, which are needed to modernize the strategic airlift fleet, and impose numerous reporting and other requirements that could disrupt the c-17 program.

—   Reduce the authorization for intelligence programs by over $1 billion. The Administration would strongly object to any amendment that would further cut funding for intelligence activities.

—   Delete the Administration's request of $443 million for the Army's RAH-66 helicopter, which is needed to replace the Army's aging fleet of helicopters.

—   Delete the Administration's request of $175 million for the National Aerospace Plane.

—   Require competitive prototyping of the AX aircraft, which would be costly and needlessly delay the program. Moreover, the bill would authorize only $50 million of the $166 million of the research and development funding requested.

—   Cut procurement of the 48 F/A-18C/D aircraft requested by 50 percent. The bill would also reduce development funding by $190 million from the request of $1.1 billion for an improved version of the aircraft. This would slow needed modernization of naval aircraft.

—   Terminate procurement of the requested 24 F-16 aircraft which are needed to fully modernize the Air Force.

Moreover, S. 3114 would authorize unrequested programs at the expense of high priority programs. Specifically, the bill would add:

—   $630 million for unrequested Guard and Reserve equipment, as well as authorize Guard and Reserve personnel levels that are 100,555 higher than those requested by the Administration.

—   Dental and other health care benefits for Department of Defense beneficiaries. Any significant changes in health care benefits should be considered in the health care study required by the FY 1992 Defense Authorization Act.

—   More than $800 million for unrequested aircraft programs.

—   $1.2 billion for one LHD-1 amphibious assault ship.

In addition, the bill includes provisions which would purportedly promote the development of a privately owned U.S. flag merchant fleet. These provisions, however, eliminate the Cargo Preference Act of 1904, take a narrower approach to maritime reform than the Administration's proposal, and could increase DOD's costs of transporting cargo without benefiting the U.S. merchant shipping industry as a whole.

Furthermore, the bill would authorize $1.2 billion for economic assistance programs that are unnecessary or could be accomplished more effectively if the Administration's Defense Adjustment Assistance proposals were enacted. Many of these programs may be inappropriate for funding with national defense funds. The most troublesome provisions would:

—   Authorize $200 million for the Economic Development Administration (EDA) and the Department of Labor (DOL). Most of the funds provided to EDA and DOL in FY 1991 have not been obligated and additional funds are not required.

—   Authorize early retirement for active duty personnel with 15 to 20 years of service and permit accrual of retirement credit for work in certain occupations. These provisions would reduce the appeal of current voluntary separation incentives, increasing involuntary separations and the cost of military retirement.

—   Authorize early retirement and separation incentives for Reservists in order to facilitate strength reductions. The bill also provides GI Bill and other benefits to Reservists who are involuntarily separated due to force reductions. These provisions are expensive and unwarranted considering that Reservists have other full-time employment.

—   Authorize over $600 million for defense industry conversion projects. These projects are of questionable effectiveness and have little relevance in National Security objectives.

—   Mandate a toll-free telephone service at the Office of Personnel Management (OPM) for job applicants. The estimated annual cost would be $10 million, which would force major program cuts at OPM with little benefit to displaced Defense employees.

—   Continue the government premium contribution for Federal Employees Health Benefits (FEHB) coverage for involuntarily separated civilian Defense employees for up to 18 months. This would set an undesirable precedent for other government agencies and the private sector.

— Allow certain former active duty military personnel and their dependents to enroll in the FEHB and, in certain cases, receive a government premium contribution for up to 18 months. This would disrupt and destabilize an already troubled program. Existing Defense health benefits programs make these costly new benefits unnecessary.

The Administration urges the Senate to delete these unnecessary and costly provisions and enact the Administration's Defense Adjustment Assistance plan.

S. 3114 contains other objectionable provisions that would either impede cost-saving initiatives, impose cumbersome requirements affecting departmental operations, or affect our ability to meet international arms control commitments. The most significant would:

—   Fail to approve the Administration's National Defense Sealift Fund, which would establish a more effective mechanism for financing the acquisition of needed sealift. The bill would cut the Sealift authorization request by $976 million.

—   Establish an unnecessary National Defense Center for Analysis of the Technology and Industrial Base.

—   Reduce by $25 million Defense drug interdiction funding to increase funding for drug demand reduction programs.

—   Extend the chemical stockpile elimination deadline to December 31, 2004, which would preclude the United States from meeting its obligations under the Chemical Weapons Convention.

The Administration would strongly object to any provision or amendment, which would:

—   Prohibit foreign government-owned firms from buying certain U.S. defense companies. This is contrary to U.S. policy on international investment. Furthermore, the Exon-Florio provision of the Trade Act of 1988 already provides the President with authority to deal with any threats to national security that might be posed by foreign investment.

—   Require Defense contractors to continue certain employee benefits for displaced contractor employees, a burden not imposed on non-defense companies.

—   Fund Defense Medical programs from the Medicare Trust Fund.

As the review of S. 3114 continues, the Administration may propose additional amendments to the bill.

Scoring for the Purpose of PAYGO and Discretionary Caps

S. 3114 would increase direct spending and receipts; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act. No offsets to the direct spending increases are provided in the bill. A budget point of order applies in the House and Senate against any bill that is not fully offset under CBO scoring. If, contrary to the Administration's recommendation, the Senate waives any such point of order that applies against S. 3114, the effects of enactment of this legislation would be included in the look back pay-as- you-go sequester report at the end of the congressional session.

OMB's preliminary scoring estimates of this bill are being prepared. If S. 3114 were enacted, final OMB scoring estimates would be published within 5 days of enactment, as required by OBRA. The cumulative effects of all enacted legislation on direct spending will be issued in monthly reports transmitted to Congress.