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Mr. MORGAN. In the fiscal year 1985 budget, we are requesting budget authority of $7.3 billion. The next chart shows the dollar amounts for the total nuclear weapons systems. When comparing the DOD to the DOE portions, you can see where the DOE portion of the budget in each year is approximately 14 to 15 percent of the entire budget for all nuclear weapons systems. I would like to summarize and say that we will talk in detail with you about the increases for the DOE portion at a later point in time, but at this point, I'd like to turn the testimony over to Dr. Wagner, who will cover some current issues and re-address any other issues you may want to discuss.

DOE JURISDICTION OVER ATOMIC ENERGY DEFENSE ACTIVITIES

Senator DOMENICI. Now, DOE has responsibility for these activities under the Atomic Energy Act even though they are defense-related programs-is it working adequately?

Dr. WAGNER. That is a good question, Mr. Chairman, and I would like to take it, for the record, for a more complete response, but let me give you a quick summary. There are some areas in which it's working adequately and other areas in which it is not working adequately, I think. Because of the separation of the cutting edge of the technology, which is research and development on weapons, which is done by DOE, that separation from DOD has resulted over the years in a fragmented and incomplete nuclear weapons infrastructure in the Department of Defense. We depend on the Department of Energy to fill in those gaps in our infrastructure, but I believe that the country has some serious difficulties because of that. There is no question but that DOE supplies superbly designed and manufactured warheads for the country, but there is more to deterrence than just that, and I believe we do suffer to some extent because of the separation of the appropriations.

Senator DOMENICI. Why don't we, rather than do that, let's leave that question as you've stated it, and rather than have you proceed any further on the record, in that I'm really not aware that anybody other than myself is terribly interested at this point-so why don't we do that on our own at some point? Let's get together, and if there are a couple of Senators that are interested, we'll talk about it. It really is not an appropriations issue, but more an authorizing or policy issue.

ROSE GARDEN BUDGET AGREEMENT ON DEFENSE PROGRAMS

In working out budget agreements informally with the President and the Secretary of Defense in these White House conferences, we worked out a number, for starters at least, that the President and Secretary Weinberger would agree to support by way of reduction of the DOD overall budget, and we picked a number that represented this DOE portion of budget function 050. Are you aware of the number?

Dr. WAGNER. I have heard varying reports, actually, on that meeting. I have talked with the people in OMB about it, and their representation of it is that there was indeed a Department of Defense number, which as you know, we are working to figure out how to live within. And, we

believe that we should wait until the Department of Defense's programs are adjusted to the new top line and see how that impacts the nuclear parts of the DOD program, and then adjust the DOE requests accordingly. I think that's a process that will take a week or two, perhaps, and it might result in some reductions.

Senator DOMENICI. So, it's not clear that there would be any reductions in the DOE nuclear weapons program?

Dr. WAGNER. If DOD does not respond to the new top line by cutting nuclear warhead-nuclear system programs-then we would not like to see reductions in the DOE program. If we cut some system programs, then we could see reductions in the DOE program. You know, if we cut some system programs, then we have

Senator DOMENICI. I'm not going to argue with you. I think they've agreed on numbers, but you know, if they're not telling you that, then I'm not going to tell you at this point. Let them do it. It wasn't done very scientifically, I'll tell you that, but nonetheless, it was done. OK, why don't you proceed.

PREPARED STATEMENT OF RICHARD L. WAGNER

Dr. WAGNER. I would like to also enter, if I may, my full prepared statement.

Senator DOMENICI. Without objection, so ordered. [The statement follows:]

Statement of Richard L. Wagner, Jr.

Mr. Chairman and members of the committee, it is my pleasure to appear before you again this year to discuss the Department of Defense's nuclear weapons program requirements and long-term objectives. With the support of this committee and the Congress, we have made significant progress in modernizing our nuclear deterrent forces since I appeared before you a year ago. But there is much more remaining to be done. The requirements for modern nuclear systems, both strategic and nonstrategic, have not diminished because the world we live in today is still a dangerous one. Our sincere efforts to reach agreements with the Soviets on arms reductions have not yet been successful, but we are convinced that success in these negotiations depends on Soviet perceptions of our willingness to retain an adequate deterrent balance. Only then will they return to the negotiating table and join with us in seeking real, balanced, and verifiable reductions in nuclear forces.

On this same occasion last year, my statement was directed to three major points: (1) That the DOD weapon systems, and their associated DOE-produced warheads, are sorely needed;

(2) That advanced warhead development is paying off in improved features for deployed warheads; and

(3) DOE advanced technology, in and of itself, contributes to keeping the Soviets in a deterred frame of mind.

These points are, of course, still valid now, a year later; and for the central theme of my discussion of the DOE weapons program this year I'd like to come at them from some different directions, and add some additional perspective. I'll summarize briefly, and then return to discuss each point in turn. There are four points:

First, the requests by the Department of Defense of the DOE for weapon production are consistent in detail with the system developments requested in the DOD budget. There are no extras. Because of this, the justifications of the warhead developments, in terms of contribution to deterrence, are best discussed in the context of the systems in the DOD budget, and I will only briefly mention those systems here this year. For those systems, in making warhead development and production requests, we in DOD

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recognize that DOE resources and capacity are quite limited, and we do as much as we can to reduce the production demands. Nevertheless, the demand is substantial, and will stress the DOE capabilities.

Second, the DOE technology base, and in particular the weapon labs' technology base, nourishes the overall national defense infrastructure in many important but often not very visible ways. There is much more to the overall deterrent provided by those weapon systems than just the hardware itself, and the labs make important contributions beyond warhead design. This is true in nonnuclear defense technology as well as in nuclear technology. Because of these broad contributions, it is doubly important that the technology base-facilities, equipment, people, basic research, and exploratory development-be brought up to date and kept there.

[Deleted.]

Because of all these factors, cuts in the DOE defense programs budget would hurt badly this year.

Let me now give you some specifics on those four points.

REQUIREMENTS RELATED DIRECTLY TO DOD PROGRAM

Historically, since the early days of the Atomic Energy Commission (AEC), our national policy has been to maintain a separation between the developer/producer of nuclear weapons and the military forces who can be called on to employ them. In the early days this separation was much more distinct than it is today, and included complete AEC custody of all weapons until late in 1956 when the military was made responsible for control of some weapons. In 1959 the DOD was given responsibility for custody of all operationally deployed nuclear weapons, and we retain that responsibility today, though DOD and DOE still work closely on safety and security of weapons from design, through deployment and stockpile improvements, until final retirement.

In the early days, when the technology of nuclear weapon design was developing rapidly, the weapon designer determined to a very great extent the limits of capability that could be provided to the military. By the 1960's, as weapon design technology matured, military requirements had a greater influence on weapon characteristics. For nearly 39 years the military liaison committee has served to coordinate the needs of the military services with the capabilities of the AEC, then ERDA, and now the DOE defense programs. I believe this cooperative process has served the National well and will continue to serve well in the future.

WEAPONS ARE COMPLEMENTARY

RESPONSIBILITIES OF DOE & DOD

DETERMINATION OF MILITARY CHARACTERISTICS IS A PRIMARY
FUNCTION OF DOD

• DEVELOPMENT AND PRODUCTION OF NUCLEAR SYSTEMS ARE PRIMARY FUNCTIONS OF DOE:

• PRODUCING NUCLEAR MATERIALS

• DEVELOPING, TESTING, PRODUCING, & ASSURING RELIABILITY OF NUCLEAR WEAPONS

DIVISION OF RESPONSIBILITIES, EXCLUSIVE OF "NUCLEAR" SYSTEMS, IS BY JOINT AGREEMENT

DOD AND DOE ARE JOINTLY RESPONSIBLE FOR PREPARING THE
NUCLEAR WEAPONS STOCKPILE MEMORANDUM FOR PRESIDENTIAL
APPROVAL

BOTH DOD AND DOE ARE RESPONSIBLE FOR FOSTERING THE
TECHNOLOGY BASE:

• CONDUCTING RESEARCH

• INVESTIGATING NEW AND INNOVATIVE CONCEPTS

DOD AND DOE SHARE THE RESPONSIBILITY TO:

• IDENTIFY AND RESOLVE HEALTH AND SAFETY PROBLEMS CONNECTED WITH NUCLEAR WEAPONS

• PREVENT UNAUTHORIZED USE OF NUCLEAR WEAPONS

COORDINATE EFFORTS TO IMPROVE THE EFFECTIVENESS OF PHYSICAL SECURITY MEASURES

As shown on this chart, the DOD and the DOE have complementing responsibilities for development and production of nuclear weapons. In January 1983 we updated our working arrangements by formalizing a new memorandum of understanding, and we have been active over the past year in updating the detailed processes by which we jointly manage and conduct the research, development, testing, production, and other aspects of these complex programs. We have also recently established new agreements between DOD, DOE, and Justice on the response to terrorist threats, and also between DOD, DOE, and NASA on developing nucler power for use in space.

We have also worked together to make better use of our limited resources by expanding our joint efforts in nonnuclear and nonweapons areas where the unique capabilities of the national laboratories can contribute more fully to the Nation's defense needs. In the future we believe there will be greater opportunities for more joint programs, especially in areas where technologies are similar.

How then are these deterrent requirements connected to activities in the Department of Energy for warhead development, production, and maintenance? And how can we judge. the research and development activity that is needed?

The process begins by the operational commanders assessing their needs to conduct the operations assigned them with reasonable assurance and minimal risk. These operationally required forces are then evaluated in light of fiscal and policy guidance issued by the Secretary of Defense. The results of this evaluation are reported by the JCS in their joint program assessment memorandum. The forces needed are included in the DOD 5-year defense plan (FYDP), and the programs and funding are thoroughly reviewed during the DOD budget hearings in the Congress.

Within DOD, the nuclear weapons required to support approved FYDP forces are then calculated and reflected in the nuclear weapons stockpile memorandum (NWSM) which is developed jointly with DOE and submitted to the President for approval. The production requirements placed upon the DOE represent nuclear weapons which are required to support approved weapons systems which the services are in the process of procuring. Although there are some changes in our projections for specific systems from year to year as we refine our estimates of future needs and react to fact-of-life

changes in direction, the aggregrate projections over the past several years have been very accurate. Over the FYDP period especially, DOE has a solid basis for planning, and the out-years are now more realistic than ever.

The specific DOD programs which form the basis of our requests of DOE are, of course, the result of the interaction between the Department of Defense and the Congress which results in authorized and funded DOD programs. Specific justification of these programs is most properly discussed in connection with the DOD budget. Let me briefly summarize them here.

Over the past 3 years the Congress has approved the major elements of the President's program to modernize all three legs of the strategic nuclear triad, and to improve our nonstrategic nuclear deterrent. The Department of Energy has engaged in a truly cooperative spirit with the DOD to acquire and field these systems and the warheads that arm them. As you know, the ALCM is being deployed with our B-52 forces; the B-1B will be fully capable of carrying our newest weapons which will give added strength and flexibility to our bomber force; the Peacekeeper with its new warhead will begin deployment in late 1986; and the new Trident II SLBM with a new warhead is under development. We have begun deployment of GLCM and Pershing II as agreed with our NATO allies. The new 8-inch W79 AFAP is being produced and stored in the United States. We are confident that it can be deployed to support theater forces if needed. Any future deployments will occur only after consultation with the allied nations involved. These new systems increase the credibility and capability of our deterrent posture and all of these systems depend on the warheads produced by DOE

Last year the Congress directed that we terminate the W82 155mm development program. We are now engaged in activity which is consistent with that guidance. Indeed, you will find no DOE request for W82 funds in the fiscal year 1985 budget. On the DOD side, we have asked for a modest amount to allow completion of a limited technical data package. This will enable us to reach a logical termination point that provides for an orderly consolidation of the considerable technological advances made thus far. Moreover, because of the deficiencies in NATO's TNF and the urgent need for modernization, we intend to ask you to reconsider the production issue in the context of the report on NATO's TNF which was required in the fiscal year 1984 Authorization Act. That report is being prepared now and will be provided to you soon. We believe the WS2 is needed as a deterrent to the large Soviet capability we face In order to understand this. I will describe briefly how short-range nuclear systems contribute to deterrence.

Short-range nuclear weapons serve two major kinds of deterrence functions:

One is a broad, theoretical, and political one, where the short-range weapons are part of a continuum of capabilities that contribute to escalation control, linkage to the strategic deterrent and a general sense of strength that enhances resolve. Short-range wegies have advantages and habilites in this context-advantages in Eling wh could otherwise de a functional gap in the deterrence continuum (especially in igf an ongong Sovet durdup of battlefeld nuclear weapons), and potocal Tablices i NATO in that they dong to mind warnghong

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