H.R. 4205 - Floyd D. Spence National Defense Authorization
Act for Fiscal Year 2001
(Spence (R) SC and Skelton (D) MO)

The Administration supports prompt congressional action on the national defense authorization bill for FY 2001 and appreciates the Armed Services Committee's support for many of the President's national defense priorities. H.R. 4205, however, raises serious budget concerns and a number of policy concerns as outlined below, and in the attachment. The Administration has not had adequate opportunity to review the amendments made in order by the Rule and may have serious concerns with a number of them.

Kasich Kosovo Amendment

The Administration strongly opposes the amendment because it is counterproductive to peace in Kosovo and could seriously jeopardize the relationship between the United States and our NATO allies. This amendment, if enacted, would ultimately take the decision-making authority on the deployment of U.S. forces out of the hands of Congress and the President and put it into the hands of European capitals -- a dangerous precedent. The President, as Commander-in-Chief, should retain the flexibility to judge our progress on burdensharing and encourage good faith efforts; he should not have his hands tied by rigid, numeric targets. Second, by mandating these rigid targets, U.S. policy would be on auto-pilot, constricting our ability to react to or deal with changing situations on the ground. A sudden U.S. departure would undermine this mission and could lead to the unraveling of KFOR. It could damage the strength and durability of the NATO alliance. Finally, by passing this amendment, the United States would cast doubt on its commitment to stability in Kosovo and the region. The uncertainty about U.S. intentions could encourage extremist forces to take actions that could put U.S. forces at increased risk in the hopes of an early American departure. The United States is pressing the Europeans to fulfill their commitments -- with measurable success. But this amendment would undermine peace in Kosovo and jeopardize the relationship between the U.S. and our NATO allies.

Funding Levels

Consistent with the Budget Resolution, H.R. 4205 would provide $4.5 billion more for defense programs in FY 2001 than the President requested. This increase is in contrast to the President's fiscal and spending priorities which provide a balanced approach that maintains fiscal discipline, eliminates the national debt, and extends the solvency of Social Security and Medicare. Providing additional funds for defense in excess of the significant increases sought by the President over FY 2000 levels would reduce resources from non-defense programs that are critical to our Nation's future. For these reasons, the Administration opposes the defense funding level of H.R. 4205.

Vieques

The title of the bill regarding the Navy's facilities in Vieques, Puerto Rico is unacceptable. If enacted, key provisions would make it likely that our Navy and Marine Corps personnel would not be able to get the training they need on the island. The Departments of the Navy and Defense (DOD) and the Administration as a whole strongly support the amendment that Ranking Member Skelton will offer to strike this title and replace it with language reflecting the agreement reached between the Navy and the government of Puerto Rico, through months of effort. This agreement once more provides the training opportunity needed but also meets the Viequenses' safety, health, economic, and environmental concerns.

This title in its current form would unilaterally change integral elements of the solution. It would gut the agreement by conditioning the economic development funding and the transfer of title to excess Federal land on Vieques on new requirements regarding type of ordinance and additional training days. The House recently rejected an amendment similar to this title's restrictions before passing a bill that would appropriate the funds. The House should now pass the remaining portion of the solution worked out by the parties that still requires approval (e.g. the transfer regarding the land no longer needed by the Federal government).

Health Care for Medicare-Eligible Military Beneficiaries

The Committee proposes a pharmacy benefit that includes access to mail-order, TRICARE network, and non-network retail pharmacies with a deductible and cost sharing. As the President indicated yesterday, he supports the Committee's extension of prescription drug coverage to military retirees over the age of 65, and urges Congress to show similar support for providing coverage to all Medicare beneficiaries. While the Administration has concerns about the administrative burdens of the non-network aspect of the pharmaceutical provision, we will work with Congress to address these issues. The Administration hopes that the bipartisan effort that achieved consensus on legislation to extend prescription drug coverage for military retirees over age 65 can be replicated this year to pass a prescription drug benefit option for all Medicare beneficiaries.

The committee-reported bill also would extend ongoing demonstration projects through Fiscal Year 2003. The Administration appreciates the Committee's support for allowing demonstrations to run their course and be evaluated in advance of decisions regarding expansion or permanent implementation. However, the Administration believes that the subvention demonstration should be extended only one or two years and that an independent evaluator should review the demonstration.

Chemical Weapons Demilitarization

The Committee bill would reduce the request for this important authority by a total of $126 million, which includes $50 million to the Assembled Chemical Weapons Assessment (ACWA) program and $76 million to the Non-Stockpile Chemical Material Program (NSCMP). The reduction to ACWA would further delay the destruction of chemical weapons at Blue Grass, Kentucky, by at least one year, and would lead to a breach of the Chemical Weapons Convention (CWC) Treaty deadline. Further, it would increase the risk to the health and safety of neighboring communities, and serve to erode public trust and confidence. The reduction to the NSCMP would eliminate the entire FY 2001 effort to develop technologies to treat and dispose of recovered chemical warfare material. It will force the cancellation of contracts employing workers in eight states and delay destruction of this material, leading to a potential breach of the CWC treaty deadline and increased risk to the public. We strongly urge the House to restore full funding for these programs.

Cooperative Threat Reduction

The Administration objects to the Committee's decision to maintain the prohibition on construction of a chemical weapons destruction facility at Schuch'ye in Russia. The nerve agent at this site is in small, modern munitions that are easily transported and mated to delivery systems that exist throughout the world. They are highly desirable weapons for both terrorists and states of concern and they represent a serious proliferation risk. It is vital to U.S. security to assist Russia in eliminating these munitions. In view of the threat posed by these weapons and the progress we have made both with Russia and with the international community in meeting infrastructure requirements at the site, the Administration strongly urges the Committee to reinstate funding for this critical program.

The Administration opposes the prohibition on building fossil fuel plants as a means of shutting down the three Russian nuclear reactors that produce weapons grade plutonium. Such a ban prevents what may be the most timely, cost effective, and most effective non-proliferation approach to ending the production of weapons grade plutonium.

Strategic Plan for Reducing Backlog in Maintenance and Repair

H.R. 4205 contains a requirement for DOD to develop a strategic plan regarding the categorization of its repair backlog that is a half-step in addressing this critical issue. The Administration believes that Congress is already well aware of DOD's excess facility burden and instead should act assertively to support the elimination of excess capacity and engage with the Administration in the only long term solution that will solve the maintenance repair and backlog problem - another pair of Defense Base Realignment and Closure (BRAC) rounds.

Limitation on Number of Military Personnel in Colombia

Section 1204 does not provide sufficient flexibility for U.S. armed forces personnel on duty in the Republic of Colombia to fulfill the DOD mission. It excludes from its coverage only members that are in Colombia for the purpose of rescuing or retrieving United States military or civilian Government personnel. In reality, the Department conducts rescue for all United States nationals and appropriate third country nationals requiring evacuation. The arbitrary 30 day exclusion period does not appear to take operational necessity into account. Further, the Department may be called upon to conduct search and rescue operations, equipment salvage and recovery operations and investigations which pertain to crashes and wrecks. Service members in Colombia for these purposes should be excluded from any cap requirement. As well, meetings and conferences are activities that are necessary for DOD to fulfill its mission, conduct engagement activities, and provide effective oversight, and members who are in Colombia for these purposes should be excluded.

Congressional Review Time for Computer Export Notice Level

We are very disappointed that the Rules Committee did not make in order the amendment that would shorten the 180 day waiting period required by Section 1211(d) of the FY 1998 Defense Authorization Act to 30 days. A 180-day waiting period is now required before the President can adjust the level of computer performance that triggers a ten-day pre-export notification requirement for Tier 3 countries. Failure to shorten the waiting period will prevent Executive Branch from responding quickly to rapid changes in computer technology.

Pay-As-You-Go Scoring

H.R. 4205 would affect receipts and direct spending; therefore, it is subject to the pay-as-you-go requirements of the Omnibus Budget Reconciliation Act of 1990. This Office's pay-as-you-go scoring of H.R. 4205 is under development.

The Administration will continue its review of the bill and may identify other issues. The Administration looks forward to working with congressional leaders to forge a strong Authorization Act for FY 2001.

Attachment

Additional Concerns with H.R. 4205

Acquisition Workforce

The Administration objects to Section 902, which would require the Secretary of Defense to reduce the workforce in acquisition organizations arbitrarily by 13,000 persons in FY 2001. This section has the potential to adversely affect readiness and the efficiency of the acquisition system. It could result in delays in development or delivery of much-needed material to operating forces. DOD is on an orderly course to reduce the acquisition workforce and is already implementing a reduction of nearly 16,000 positions in FY 2000. The workforce is to be reduced further in FY 2001, as proposed in the President's Budget. The end result of the Administration's plan would be a reduction of nearly 60 percent of the acquisition workforce from its base year. DOD is also developing a strategic plan to address the anticipated, large retirement surge within the next five years, which could further threaten its ability to effectively and efficiently manage acquisition programs. We urge the House adopt language akin to Section 922 of the FY 2000 National Defense Authorization Act, which would allow for this orderly reduction.

Unrequested Adds for Procurement and R&D

H.R. 4205 authorizes $3.4 billion above the President's request for Procurement and R&D programs. Of the $3.4 billion add-on, $2 billion is for procurement programs, including $24 million for TH-67 Creek helicopters, $110 million for H-60 helicopters, $52 million for F-16s for the National Guard, $76 million for KC-130J tanker aircraft, and $23 million for UC-35 medium lift aircraft. All of the additional funds could be applied to higher priority programs. The President's FY 2001 request meets the $60 billion procurement target established in the Quadrennial Defense Review (QDR) and represents a balanced approach to modernization.

The Committee bill adds $1.4 billion to the FY 2001 request for R&D, including $108 million for ballistic missile defense technology development, $82 million for the Airborne Laser and $60 million for High Energy Laser research. Of the increases proposed in H.R. 4205, many are of low military value as judged by the military services. The bill also fails to fully fund the development of many new technologies of importance to DOD, such as two key information technology programs, Extensible Information Systems and Computing Systems and Communications Technology, which are reduced by $65 million from the request.

Army Transformation Programs

The Administration appreciates the Committee's support for Army transformation programs, but we object to the restoration of funds for programs, such as the Grizzly obstacle clearing vehicle and the Wolverine bridging vehicle, that were canceled to fund transformation. Re-starting these programs will create a funding liability in future years which will slow the pace of transformation.

Submarines

The Administration opposes section 121 which would prohibit the Navy from retiring Los Angeles Class attack submarines with less than 30 years of service. The Department is evaluating ways to achieve the most cost-effective submarine warfighting capabilities including refueling existing submarines, retiring existing submarines, and/or pursuing the opportunity to convert SSBN submarines into SSGNs. Section 121 would restrict the Department's flexibility in developing the most cost-effective alternatives to support adequate submarine force levels.

Military Pay and Benefits

The Administration is concerned that Sections 618 and 619 will unnecessarily increase recruiting and retention costs by authorizing bonus amounts which exceed requirements. We urge deletion of these provisions.

Vaccine Procurement

The Administration is concerned that section 735 would assign to DOD an over-broad role in purchasing vaccines. It raises multiple administrative and policy problems, and should be limited to defining DOD's responsibility for procuring vaccines for use by military personnel.

Federal EEO Requirements

The Administration opposes section 1106, which would authorize the Navy to establish its own alternative dispute resolution program (ADR), that would be exempt from Equal Employment Opportunity Commission (EEOC) requirements. It would prevent the EEOC from addressing any concerns raised by complainants. Further, the Navy's ADR pilot program may vary significantly from principles outlined by the Federal ADR Council, in its guidance provided to Federal agencies on the design and operation of Federal ADR programs.

Tank Waste Remediation System

The Administration objects to the $231 million reduction in the Environmental Privatization account, primarily for the Tank Waste Remediation System (TWRS) authorization. Although DOE expects to terminate the existing contract, a reduction this large would significantly hinder the Department of Energy's (DOE) ability to pursue an alternative strategy for immobilizing high-level radioactive waste stored in underground tanks at the Hanford nuclear site. The Administration also opposes section 3131 as presently drafted because it would limit DOE's contracting options and ability to efficiently manage the TWRS project.

National Nuclear Security Administration

The Administration opposes sections 3133(c) and (d) which would limit DOE's National Nuclear Security Administration (NNSA) program direction obligations to 50 percent of the amounts appropriated for FY 2001 until 30 days after the FY 2002 future-year nuclear security program is submitted. The Department of Energy is committed to sending a compliant future-years nuclear security program to Congress in concert with the FY 2002 Budget. The proposed limitations would make it more difficult for NNSA to effectively manage and oversee its programs and to acquire resources. This would result in schedule delays affecting delivery of goods and services and would increase costs to the taxpayers.

Low Level Flight Training

Section 312 suggests that the environmental documents prepared by the Military Departments to support recent airspace proposals may be vulnerable to legal challenge under the National Environmental Policy Act (NEPA). To the contrary, the Military Departments believe these environmental documents are consistent with the requirements of NEPA and the Council on Environmental Quality's implementing regulations. Consequently, this provision is unnecessary and could undermine public confidence in the ability of the Military Departments to ensure military preparedness while protecting the environment. We urge the deletion of Section 312.

Studies and Reports as a Precondition to Manpower Reductions

The Administration opposes Section 364 which would require DOD to report to Congress before taking any consolidation, restructuring or re-engineering action with a manpower impact. DOD is already providing a report for A-76 competition actions. This section would create a new reporting requirement that could further impede actions to better manage DOD.

Utilities Privatization

The Administration opposes section 2813 because it would require DOD to abide by State law when conveying a utility system or awarding a utility services contract under 10 U.S.C. 2688, and because it provides that State utility laws apply to any conveyee. This provision waives the sovereign immunity of the United States and would, in any regulated State, require the Department to dispose of its utility systems only to the franchised utility company, thereby eliminating all competition in utilities privatization. Competition provides a powerful incentive for better prices and innovative business practices, encourages the infusion of new technology, and ensures that military installations receive optimum value, and cost effective and reliable service. Further, requiring conveyees to provide utility services in accordance with State rules could preclude the military from determining the level of service, in terms of reliability, responsiveness and rate structure, best suited to their mission. The Administration urges deletion of this section.

Procurement Reform

We urge the incorporation of Administration proposals to further improve the acquisition process and its ability to support the Defense mission. Those proposals include expanded "other transactions" authority to pilot commercial-like acquisition, allowing contractors to avoid the unique burdens and risks generally associated with government contracts and increase Defense access to market-driven economics and innovations. Other proposals include those to enable the government to take greater advantage of electronic commerce and to streamline certain test authorities.

Names of Criminal Suspects

The Administration is very concerned about section 542, which would establish a statutory standard for including a suspect's name in an investigative report or database. Because of the potential implications for law enforcement of such a standard, the Administration recommends that setting the standard remains an administrative matter and urges deletion of this provision.

National Collaborative Information Analysis Capability

The Administration objects to section 905 in its entirety. This provision assigns to Land Intelligence Warfare Activity (LIWA), functions that are beyond its mission. LIWA does not have an intelligence mission nor is it authorized to support entities outside of the DOD. Furthermore, this section would severely constrain the authority of the Secretary of Defense.

Defense Nuclear Facilities Safety Board (DNFSB)

The committee reported bill provides $1.5 million less than the $18.5 million requested for the DNFSB. This shortfall will undercut the ability of the DNFSB to maintain essential technical expertise and provide needed health and safety oversight throughout the DOE nuclear weapons complex. The Administration urges the House to provide full funding for this activity.