real growth of 11 percent in the FY 1979 DARPA budget to give increased

The FY 1979 research, development and acquisition budget request of $44.4 billion is a large one. But I believe it is a responsible request,

and I ask that the Congress support it fully.

It is responsible, first, because it is necessary to
correct critical deficiencies in our deployed capabilities
in the near term and to nurture the options which will
enable us to respond successfully to the challenges and
the opportunities of the 1990s and beyond.

Second, our request is responsible because it has been
based on a realistic appraisal of the current situation
and an objective assessment of the major trends shaping
the environment we will face in the 1980s and 90s. There
are, of course, ambiguities and uncertainties in our
assessments--and we will work hard to reduce these in
the coming year--but I am satisfied that this budget is
grounded on a firm appreciation of where we stand today
vis-a-vis our major competitor, where we need to go to
strengthen our competitive stance, and what is needed
to get there. And the message which comes through
clearly from these assessments is that we must improve
our deployed capabilities and maintain our technological
superiority if we are to confront, successfully, the
serious, long-term Soviet challenge.

O Third, this is a responsible budget request because it
recognizes explicitly that, while the challenges and
opportunities are great, our resources are limited and
that we must, therefore, exercise selectivity throughout
all phases of the research, development and acquisition
cycle. We have been selective, and this budget request
has been restrained by several decisions to eliminate
programs which do not meet cost or requirements goals,
before they proceed too far in the development process.

O Fourth, we have accepted the responsibility of

judiciously selecting programs which minimize the cost
of obtaining a competitive level of defense capability.
Accordingly, we are paying much closer attention to

the need for new programs before they are initiated;
insisting that programs demonstrate adequate performance
before proceeding; emphasizing life-cycle cost as a
major criterion of a program's success; integrating
R&D and acquisition planning and management through
organizational and policy changes; encouraging fuller
application of the expertise and resources of the
industrial and academic sectors in our R&D and
acquisition process; and improving the DoD as a customer-
reducing the risks of doing business with Defense--so
that we can benefit more effectively from the strengths
inherent in our nation's civil technological and
industrial base.

Fifth, this is a responsible budget request, because
it emphasizes that the U.S. cannot, and should not,
act in isolation from its NATO partners in responding
to the challenge of the Soviet Union and its Warsaw
Pact allies. Accordingly, we have included a number
of programs which seek to enhance NATO military strength
and improve the effective use of collective resources
through equipment standardization and interoperability,
through the reduction of duplicative NATO R&D, and
through fuller industrial collaboration in military
production. We believe these cooperative efforts are
essential if NATO is to improve its security at a
lesser cost to its members.

o Finally, our program lays the foundation for improvements in our long-range acquisition resource planning. Our activities in this area will depend on improved understanding of both U.S. and Soviet system acquisition processes and the resultant identification of relative strengths and weaknesses, as well as the uncertainties that could affect the future balance.

In summary, our FY 1979 budget request for defense R&D and

acquisition is directed at maintaining key military balances upon which successful deterrence rests. It is responsive to the real and growing

Soviet challenge to our current overall superiority in military

technology.

o It emphasizes programs that will pay off in deployed weapon systems capable of meeting critical deficiencies in our nuclear and conventional forces in the near term

and programs that will provide a broad spectrum of
technologies to form the base for systems and options
applicable to longer term military needs.

It emphasizes firm control on costs and lays the
foundation for further improvements in the
effectiveness and efficiency of our use of scarce

resources.

It emphasizes the importance of retaining and

building momentum in our military investment programs.

It emphasizes maximizing the contributions of the
U.S. civil sector and of our Allies.

I believe the funds we are requesting are necessary to assure that our future national security requirements are met. I urge your support.

Thank you.

11. THE TECHNOLOGY AND ACQUISITION BALANCE

"Our principal long-term problem continues to be the Soviet Union. Whether we like it or not, the Soviet leadership seems intent on challenging us to a major military competition... Whatever the motive behind it, the challenge is serious. We must not underestimate it."

Secretary of Defense Harold Brown

A.

INTRODUCTION

In each of the past several years, the Department of Defense has reported the following assessments of the military technology and acquisition balance between the U.S. and USSR:

O

The Soviet Union has a quantitative advantage in most
categories of deployed weapons.

The U.S. has a qualitative lead in most areas of military
technology and in the large majority of deployed weapon
systems.

The Soviets are now reducing the overall U.S. qualitative
lead in deployed weapon systems performance.

Should current relative trends--measured in terms of
production and deployment of military equipment--continue,
the USSR could achieve significant military advantages in
the next few years.

Our most recent assessments of the military technology and acquisition balance reaffirm the validity of these conclusions and the importance of the need for U.S. action. The momentum of the persistent Soviet drive to harness science, technology and industrial power for fulfillment of military requirements continues to increase in

comparison with our own. During the 1970s, Soviet defense spending in rubles has grown at a rate of 3 to 5 percent per year, while

comparable U.S. spending, in real terms, has been decreasing until last year. Estimated Soviet military investments (procurement, construction and RDT&E) are currently about 75 percent greater than those of the U.S., measured in terms of what it would cost us to duplicate the Soviet effort.

The concentration of the Soviet effort in the military and military industrial sector can be seen in the following comparisons with our own economy. The U.S. GNP is now about twice that of the USSR, and that gap is widening in absolute terms. But ours is largely a consumer and service economy while the primary focus of Soviet economic development has been on capital formation and defense. The U.S.

produces many times more consumer goods, while the USSR produces

more coal, petroleum, steel, cement, machine tools, railway cars and ships.

But the

Americans and other Westerners are continually impressed by the poor technological performance in the Soviet economy as a whole, and the Soviets themselves have acknowledged their shortcomings. weaknesses in the Soviet civil economy have not precluded the achievement of impressive capabilities in the military sector. In fact, the Soviet leadership channels human and material resources on a priority basis into military-related science, technology and industry, which are growing more rapidly than the comparable technological and industrial base in the U.S.

The U.S. program of defense research, development and acquisition which must counter this Soviet effort will be relatively limited in