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STATEMENT BY THE SECRETARY OF THE ARMY

A review of the history of the wars in which this Nation has been embroiled during this century highlights the importance of conventional deterrence and war fighting capability. The Army is the cornerstone of our conventional capability. As it is land forces that can exert decisive control over people, resources, and territory, the Army serves as the centerpiece of national will to deter, and, if necessary, defeat an adversary. Furthermore, as we view the spectrum of possible conflicts, the need for a strong conventional force becomes increasingly the focus of our effort.

The Soviet Union's ground forces are the predominant source of their conventional capability. Last year I reported to you that the Soviet Union had 194 divisions. This year I report to you they have 199 divisions. While not all these divisions are of the same caliber, the fact remains that they continue to expand their force. Nearly 40 of these divisions are stationed outside the Soviet Union, including 4 in Afghanistan. Furthermore, with nearly three times the percentage of GNP devoted to defense compared to the United States, the Soviet Union continues to outproduce the United States in critical combat systems such as tanks by over three to one. Their new equipment is highly capable, incorporates modern technology, and dictates the need to sustain our modernization efforts to obtain parity.

The unique geographic location of the Soviet Union allows them to project land forces into Europe, Asia, and the Middle East without crossing a major body of water. This capability, coupled with their blue water navy, has enabled the Soviets to project their military power and aggressive intentions globally. Their willingness to porject ground combat forces is demonstrated in Afghanistan, which I already mentioned, where over 115,000 Soviet soldiers occupy the country. In our own hemisphere we know that the Soviet Union has combat forces in Cuba and more advisors in Peru than we have in all of Central America.

Even without the global Soviet presence and the active involvement of their surrogates, the Third World would be replete with instability and rivalries. There are over 20 active insurgencies and conflicts world-wide and numerous other nations with fragile political systems that are struggling to survive. Many of these insurgencies and conflicts and their attendant forms of violence like terrorism are fueled by Soviet arms. Furthermore, activism by the Soviets and their surrogates threaten other nations seeking to develop viable economic and political infrastructures. Many of these nations look to us for assistance in their efforts to develop systems that support democratic values.

These realities of the world in which we live are a key factor in shaping the Army today. The Army must be prepared to respond to potential challenges across the full spectrum of conflict. We must continue to uphold our vital interests in areas of traditional concern, and we must be prepared to combat more recent threats that challenge our interests globally. We must have forces capable of deterring and defeating the higher intensity threats that continue to grow in sophistication and extent. And, we must have forces capable of responding globally to the more likely low-intensity threats that pose an equal challenge to our national interests.

Our AirLand Battle Doctrine provides the framework to develop war fighting capability to overcome quantitative weaknesses of our forces and answer the challenge across the conflict spectrum. AirLand Battle takes advantage of national strengths in the quality of our people and the innovativeness of our society. Our modernization and procurement program is driven by this doctrine. Speed, maneuverability, and the massing of combat power at critical points are the keys to success with this doctrine. Effective communications, rigorous training, and initiative by soldiers and leaders are paramount.

To meet the challenges at the lower end of the conflict continuum, we are restructuring our forces to develop rapidly deployable forces, capable of sustained, vigorous combat. The creation of our light divisions and the expansion of Special Operations Forces highlight this effort. The light division is capable of responding to a global crisis in about one-third the time using one-third the airlift sorties of our extant infantry divisions.

This rapid response capability not only serves as a viable deterrent to global threats, it enables us to position substantial war fighting capability to control threats early in a crisis, and possibly forestall the need for additional forces. With augmentation, these light infantry forces are capable of fighting anywhere our interests are threatened to include Western Europe. Our revitalization of Special Operations Forces reflects the growing threat from terrorism and other low intensity conflicts. These forces are specially designed for limited objective operations. They demonstrated their flexibility in Grenada in 1983 by rapidly responding and projecting U.S. forces to support our interests.

These factors and the decision General Wickham and I made several years ago to hold active end strength constant to protect readiness, sustainability, and essential modernization are the key factors forging the Army. This fundamental decision considered demographic and fiscal factors and led to our initiatives to increase the reliance on, and capability of, the Reserve Component. The Army relies more than ever before on the Reserve Component. We have focused the Guard and Reserve on appropriate missions and are providing them the support to meet their wartime commitments. Today they are full partners in the Army mission of deterring war.

The fiscal year 1987 budget request of $80.6 billion continues the balance we have established in the personnel, operations and maintenance, and investment accounts. This balance is designed to attract and retain quality soldiers, and provide them the support, training, and modern equipment needed on today's and tomorrow's battlefields. Furthermore, with 13 percent of the

request targeted toward the Reserve Component, this budget manifests commitment to these critical forces.

The decision to hold active strength constant to focus on readiness, sustainability, and modernization has proven wise. With the support of the members of this committee, we have an Army today that is far more ready to meet the diverse threats we face. Over 90 percent of our active accessions are high school graduates. This is 36 percentage points more than five years ago. And, while increasing Reserve Component strength, we have also increased the quality of our RC accessions. Over 80 percent of our incoming Reserve soldiers are high school graduates. We continue to meet and exceed our recruiting goals. Educational benefits have provided incentives needed to attract and retain talented young Americans.

We are midstream in our modernization effort. Since 1980, over 100 battalions and companies have fielded modern equipment such as the Bradley Fighting Vehicle, Abrams tank, Patriot Air Defense System, Multiple Launch Rocket System, and Black Hawk helicopter. We are now fielding the first Apache attack helicopter units and will soon field the Mobile Subscriber Communications equipment. With the increased mission responsibilities of the Army National Guard and Army Reserve, we have accelerated equipment distribution to them under the "first to fight, first to be equipped" principle. Some early deploying Reserve units already have Abrams tanks, Bradleys, and Black Hawks. Others are scheduled to receive these systems soon. This modernization provided over $1.5 billion of equipment to the Reserve Component last year and we plan to provide over $2.0 billion in FY 87. We must continue this pace if we are to regain the qualitative edge we need to attain the leverage to fight out-numbered and win. One of our most pressing needs is to acquire the capabilities to provide air defense for our combat forces. The threat is sophisticated, but we have a sound plan to develop a fully integrated system of air defense protection. In the area of chemical deterrence, we have taken the first step to develop a realistic chemical retaliatory capability. However, our deterrent capability will remain inadeuqate until modern chemical retaliatory munitions are fielded. urge your continued support of binary munitions. Finally, given the massive offensive capability and doctrinal employment of Soviet forces, we must attain the capability to see, fix, and attack deep. To accomplish this we must take advantage of technologies that offer us the opportunity to influence the battlefield markedly. And, we must continue to explore the possibilities of technology through a vigorous research and development program.

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Tough, realistic, and effective training is the cornerstone of readiness. Our expenditures on training facilities, devices, and simulations have increased over 500 percent in the past six years. The National Training Center is an excellent example. Since its inception in 1980, we have progressed to a training rate of 28 combat maneuver battalions annually. is the most challenging, realistic training in the world. It shows the ability of simulation and training devices to increase the training levels of the Army. Furthermore, some of our newest aviation and tank training simulators pay for themselves in three years or less. They challenge soldiers and provide cost effective and realistic training.

Our Reserve Components are integrated into these National Training Center cycles as well as into our overseas deployments. During the last year, for example, armor units from the Texas Guard deployed to Honduras and the 32d Infantry Brigade from Wisconsin deployed on this winter's REFORGER exercise in Germany. Army Reserve units from the 81st ARCOM and 121st ARCOM provided engineer support in Panama. These exercises lead to improved readiness for our National Guard and U.S. Army Reserve.

In addition to across the board increases in war reserve stocks, since 1980 we have more than doubled our materiel in unit sets of equipment prepositioned overseas. These improvements not only show our resolve to support allies in critical theaters, they also greatly reduce our global sea and air lift requirements and response time. We have also made great progress in our efforts to develop host nation support agreements with our allies These are cost effective initiatives that improve our war fighting capability. Our Individual Ready Reserve has increased to over 300,000. We have begun to initiate musters to improve the readiness of this element of our Reserves, the largest category of pre-trained manpower available during a mobilization.

Despite the cap on active strength, this year's activation of the 6th Infantry Division (Light) in Alaska will mark the fourth new division, three of which are light divisions, since 1980. One of those new light infantry divisions is the 29th Division (Light) in the Army National Guard formed from units in Maryland and Virginia. With the conversions of two other divisions to the light infantry design and the ongoing streamlining of armored and mechanized divisions to reflect Air Land Battle Doctrine, we will achieve the necessary balance in our 28 division force. Efforts to strengthen Special Operations Forces will continue. We have activated a fourth Special Forces Group and a Ranger Regimental headquarters for the three Ranger battalions. In light of their global missions, we are enhancing SOF communications and support capability and the FY 87 budget supports improvements in SOF aviation. As you know, many of our SOF units, particularly civil affairs and psychological operations units are in the Reserves, and they will continue to provide the majority of soldiers. We need your support to maintain the balance we are achieving between Active and Reserve Components, heavy and light units, combat and support capability, and forward deployed and U.S. based forces.

Our Army today is ready and capable. It is responsive and relevant to the world situation. We are also responsible stewards of the resources with which you entrust us. All of you are familiar with the many stories, most of which we discovered ourselves, about waste, abuse and unwarranted price escalation. Each year we provide Congress the Selected Acquisition Report required by the Nunn-McCurdy Amendment. My first report to the Congress five years ago showed considerable cost increase in several systems. Since that time, the number of systems reported has increased 33 percent and their value has increased to over $100 billion. However, none of the increase is due to cost growth. All the systems reported our of tolerance five years ago are now on track. The initiatives to award multiyear contracts, when appropriate, have been a significant factor in reducing costs. This year we are proposing new multiyear contracts for the Stinger missile and the Patriot Air Defense system. We are acquiring equipment for our soldiers in a sensible, businesslike manner. We have moved vigorously to push competition where it makes sense. This past year nearly $15.0 billion, or just under 47 percent of our procurement dollars were awarded competitively. We plan to increase the

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