the number of personnel and units, amount of equipment and facility needs remain unchanged -only the amount of military construction funds available has changed. New equipment deliveries, equipment redistributions from active forces and dedicated Reserve component equipment funding have drastically increased the requirements for storage and warehousing.

Increased emphasis on training, particularly for ground forces, has demonstrated the lack of maneuver, range and training facilities. Affordability concerns in a constrained resource environment have forced the services to carefully review all construction requests with a resulting emphasis on facilities that support new or expanded structure, equipment, or mission and training ranges. Most facility improvements and the replacement of deteriorated or functionally obsolete facilities have been deferred, increasing the Reserve component construction backlog to $7.8 billion. The department has reviewed the Reserve component facility needs and the availability of funds and has determined that the services are supporting military construction for Reserve components at the same ratios as their active component requirements.

I am pleased to report that the Reserve components continue to lead the department in the percentage of construction projects awarded during the first year of eligibility. This success has permitted us to obtain the best possible use of the limited funds that are available.

Coast Guard Reserve

The Coast Guard Reserve is not, of course, managed by the Department of Defense in

peacetime, but its role in strategic deployment is virtually important to our national security. The security of U.S. seaports of embarkation is the primary mobilization mission of the Coast Guard Reserve. The vast majority of the Coast Guard's port security capability resides in the Reserve component, which is charged with the responsibility of ensuring that mobilized forces and war materials deploy safely through our ports and coastal regions. The significant port security manpower shortfalls of the Coast Guard Reserve, however, pose a serious threat to the strategic mobility forces of the United States.

At the request of the Congress, the secretary of transportation recently prepared a plan for the Coast Guard Reserve to achieve 95 percent of its wartime mobilization requirements for Selected Reserve strength, recruiting and training resources and equipment and logistic support. The president's budget requests an increase in the authorized strength of the Coast Guard Selected Reserve, which will serve as a first step to resolve this shortfall over the 10year horizon as stipulated in the plan.

Reserve Component Drug
Interdiction Activities

Normally, the Reserve components provide support to drug interdiction operations that is limited by the provisions of the Posse Comitatus Act of 1878 and performed incidental to training for wartime missions. Support has been in the form of equipment loan, specialized training and the sharing of information developed during flights or other training activities.

The FY 1989 Defense Authori

zation and Appropriations Acts provide for an enhanced drug interdiction, eradication and enforcement role for the National Guard. Not less than $40 million has been set aside to support plans submitted by the governors of the states for approval by the secretary of defense after the attorney general's review. The additional service relating to drug interdiction will be performed in addition to required annual training, so the readiness of the National Guard should not be degraded. The Guardsmen will be under the command and control of state authorities, not in federal service (i.e., in state active duty or under Title 32), so there is no posse comitatus restriction.

The National Guard is providing significant support to the drug enforcement agencies, including the use of helicopters to transport law enforcement personnel and confiscated illegal drugs; the use of military police to search commercial cargo at ports and land border entry points; the use of special operations forces to identify ground and air traffic; the training of law enforcement agencies on equipment loaned for drug interdiction purposes; the use of aircraft photo-reconnaissance

capabilities; the use of radar to monitor air traffic. To date, 51 state/territory plans have been received; Guam has recently notified the National Guard Bureau that a plan is being developed. West Virginia and Vermont do not intend to use the appropriations, but will continue to provide support in statefunded, state-active-duty status and in conjunction with mobilization readiness training.

I have reviewed and forwarded 49 of the 51 plans to the attorney general for his consideration before final approval by the secretary of defense. The remaining plans are under final review within the Department of Defense. The plans for 12 states in the highest priority interdiction areas have received the approval of both the attorney general and the secretary of

defense and are being implemented.

The contribution of the Reserve components to the crusade against illicit drugs has been, and will continue to be, substantial.

Force Mix and the Increasing Importance of Reserve Forces The military services rely upon the Selected Reserve in various degrees to augment personnel strength, to perform peacetime operational missions and to be ready to perform wartime missions or missions in contingency situations short of war. Fiscal constraints and the related decision to restrain Army active component end strength, for example, have led to a greater reliance on the Reserve components to bring active Army divisions to authorized levels of combat, combat support and combat service support in wartime. The number of active divisions requiring Reserve augmentation has increased from four in FY 1980 to nine today.

Reliance on all of the Reserve components continues to increase. Today, more than onehalf of the combat power of the armed forces and two-thirds of the support forces are National Guardsmen or reservists. The Reserve forces have demonstrated in recent years that they can assume greater responsibilities and compete favorably with active forces, especially in the performance of certain missions, such as those requiring experienced pilots.

Reserve forces do, however, face significant challenges, due in great part to the rapidity to which changes in the implementation of the Total Force policy have taken place in recent years and the factors that I noted above in my earlier comments on the readiness and training of Reserve forces. Those challenges make the question of proper force mix more complex than it appears at first.

Whether a particular mission should be assigned to Reserve forces or to active forces depends generally, of course, upon the nature of the mission, i.e., the specific military capability that is required. Force mix decisions must necessarily address a broad range of factors, such as the comparative cost of active/Reserve forces; the availability of sufficient modern equipment of a type which is appropriate to the specific mission; the availability of sufficient numbers of personnel who are fully trained and who have the particular military skills that are required; the existence of an adequate CONUS sustaining base to ensure equitable overseas tours for active forces; whether the mission under consideration requires forwardbased forces; the urgency with which the particular mission must be performed in contingency situations short of mobilization; and other, similar factors.

In a time of constrained budgets and broad commitments, innovation is necessary as we seek ways to improve the active/Reserve force mix. I recently visited an excellent example of such innovation in the form of the Army's Aviation Classification Repair Activity Depot in Brussels.

Army National Guard units are rotated through this cadre organization during scheduled annual training periods. Superb training is received, and the maintenance backlog of Active

component aviation equipment is reduced. A similar idea will be implemented this spring when the first of six heavy equipment maintenance companies from the Army Reserve and Army National Guard will deploy to the Rhine Ordnance Barracks, Kaiserslautern, West Germany, for two- to three-week periods to perform maintenance and conduct training.

Conclusion

The world is changing. Recent developments have encouraged our hopes for a prolonged period of peace. President George Washington reminded our fathers on several occasions, however, that there is nothing so likely to produce peace as to be well prepared to meet an enemy.

In the last eight years, major gains have been achieved in the capability and readiness of our Reserve forces. Much, however, remains to be done. I solicit your continued, active support to ensure that we have the resources which are necessary to field Reserve forces that are well trained, well-equipped and ready.

Mr. Chairman, this completes my statement. Thank you for the privilege of appearing before the committee.

Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant Secretary of Defense (Public Affairs), Washington, D.C. This material is in the public domain and may be reprinted without permission.

I've been secretary of defense now for a grand total of 39 days, and, in that period of time, I've come to have an enormous appreciation and respect and admiration not only for the quality of the people who are serving both in the military and in the civilian side of the Department of Defense, but also for the difficult nature of the problems that all of you have wrestled with over the years.

I never served on the Armed Services Committee, just on the Intelligence Committee, and, having gone through the exercise now of trying to cut $10 billion out of the budget for fiscal year 1990, I have an appreciation that perhaps I

didn't have before, when I used to be able to go out on the floor and vote for every single program that was recommended... and never be responsible for trying to fit it all into the defense budget.

I have, I think, shared the view that the chairman referenced at the outset in his remarks. I do have a statement I'd like to submit, if I might, Mr. Chairman. And then, I do have a general presentation I'd like to make, if that's acceptable....

There is no question but that this is a very challenging time from the standpoint of the United States if we look at our foreign and defense policies-a period of great ferment in the Soviet Union and Eastern Europe. Two weeks ago, I had the interesting experience of having the Soviet ambassador in my office, and the subject that

we spent our time talking about was election returns. I would never have thought that was ... something I was likely to do with an ambassador from the Soviet Union. But clearly, there is fundamental change under way. When we look at what's transpiring not only in the Soviet Union, but in Eastern Europe-the Polish government's recognition of Solidarity and commitment to hold free elections, etc.

I have moved from a posture of skepticism about Mr. (Mikhail) Gorbachev to one of believing that he does, in fact, seek fundamental change in the Soviet system, that his effort to reform the Soviet economy and Soviet society may, in fact, have positive effects in terms of U.S. relations, that we'll end up possibly with a less hostile, less threatening Soviet Union than we've been faced with before. I think his intentions seem clear, but it's not at all clear to me that he'll be able to pull it off.

What does all of this mean for U.S. national security policy? Well, I think while we certainly can point to benign intentions on the part of the stated posture of Mr. Gorbachev, my problem is that I have to deal with the capabilities that the Soviet Union still possesses. From a military standpoint, they are still the most formidable power in the world, relative to the United States, with enormous nuclear and conventional military capability. ...The perception of a reduced threat... creates special problems for us, because, clearly, having spent two days

last week at Brussels, at NATO, the perception of a reduced threat with respect to our allies makes it more difficult for us to maintain the kind of cohesion and unity within the alliance that's been the cornerstone of the success of our strategy for 40 years.

There's a great debate under way with respect to whether or not the changes that we see in the Soviet Union are historically inevitable or ... simply the result of the policies of one man. Can his policies be easily reversed by his successor, whenever that individual takes office?

So, based on those general views, Mr. Chairman, I am of the opinion that U.S. policy at this time has to be firmly consistent, not only because of the uncertainties about the future direction of Soviet policy, but also because within the alliance it's absolutely essential the United States provide a rock of stability around which the rest of the alliance can rally, while we maintain a forthright posture with respect to the potential problems that could occur if the Soviets should reverse course.

I don't believe it's the time for us unilaterally to reduce our commitments or our capabilities. Such reductions should only be taken on a careful step-by-step basis in conjunction with our allies and as a result of reduced Soviet capabilities. Mr. Gorbachev has announced a 14.2 percent reduction in the Soviet defense budget. It's difficult to know exactly what that means, because we don't know precisely

how much they're spending on defense.

But with this budget that I will present to you today, we will have implemented a 12 percent reduction in U.S. defense spending over the last four years. He's proposed a reduction of 10,000 tanks in Eastern Europe, but they're still producing 3,400 new tanks every new year. We've gone from a level of 1,200 tanks per year down to a level of less than 700 tanks per year, already accomplished.

So the notion that somehow Mr. Gorbachev is moving in the direction of adopting a less hostile and a less threatening posture-reducing the defense budget, reducing commitments-the fact is that we already, in many cases, have matched him, if not exceeded him, in terms of decisions that this committee and the Congress have had to make in recent years.

Budget Cuts

The task at hand is budget cuts. I'd like to remind my colleagues that in January the proposed Reagan budget called for 2 percent real growth. President (George) Bush recommended 0 percent real growth, (that we) keep pace only with inflation. Many in Congress preferred a reduction of 2 percent in real terms and ultimately a compromise was reached, depending upon which account you look at, of approximately 1 percent real decline in defense spending (in) fiscal year 1990 over fiscal year 1989. What that means in terms of budget authority for fiscal year 1990 is a reduction of $10 billion. If you look at it over the course of the five-year defense program, it is in excess of $64 billion.

Since January of 1987, just a little over two years ago, reductions in defense spending for fiscal year 1988 through fiscal year 1994 totaled $373 billion. Stated another way, if the original five-year defense program approved in 1986 had been implemented, we'd be here today talking about a defense budget of approximately $479 billion for next year. Instead, we're talking about a defense budget of $305 billion for next year.

That's an enormous change. It constitutes a fundamental shift in direction. And I think everybody can understand why, with cuts of that magnitude, the decisions to be made are not easy ones. I've talked with my predecessor, Mr. Frank Carlucci, and accused him of having cut all the easy programs last time around. The fact of the matter is I'm sure his cuts were difficult, but these are every bit as difficult.

It is very hard, in spite of what everybody may think, to come up with $65 billion out of a fiveyear defense program or $10 billion in the next year. It's very, very painful; it's not painless. Everybody needs to understand that. The Congress needs to understand that; the press needs to understand that; the public needs to understand that you do not buy more defense capability with less money. There may be ways down the road that we can save money and do our job as efficiently or more efficiently than we have in the past. I think there is. But the bottom line is, when you have reductions of the magnitude that we've seen over the last few years with respect to defense spending, the result is significantly less military capability than had originally been anticipated.

My former colleagues have

been great. I've heard from a lot of them in the last couple of weeks, all of them interested in making certain that I don't close their base or cut their weapon system or cancel a program that they believe is absolutely essential to national defense. There isn't any way for me to do what I'm expected to do without offending somebody, without breaking some china, without stepping on some toes.

They are tough decisions. We've done the best we could, I think, on relatively short notice to put together a responsible budget under the guidance that we've been given by the Congress and the president as a result of the compromise that was reached a couple of weeks ago. Certainly none of this obviously is written in stone. This is my proposal to all of you. And we all know that Congress will work its will on the budget authorization and appropriations bills. There is no monopoly on wisdom or virtue in the executive branch, and certainly I hope you will be successful in improving the package that I present to you today. But it is, I think, basically a sound package.

I'd like to take just a minute, if I could, and talk about the philosophy I tried to pursue as we undertook this review of programs and decided which areas we wanted to cut. From a philosophical standpoint, I approached the problem of coming up with 10 billion [dollars] for next year with the basic, fundamental belief that it's better to cancel lower-priority systems outright and to reduce force structure than it is to keep up the fiction that somehow we can have just as effective forces with less money—or to move back, if you will, to the notion of the hollow forces of the late 1970s.

From a priority standpoint, my first priority was people. I thought personnel questions were foremost, and I'll come back to that in a minute; secondly, I felt it was important, and this was worked out in conjunction with the president and his key advisers, that we main