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small decrements in the DOE budget (deleted) can have significant impact on the more costly DOD programs. Let me give some examples, first in the area of weapon production. Funding for direct warhead production has high leverage. Because of the stringent requirements for safety and reliability, there is inherently a large buy-in price in production. Once this buy-in price is payed, actual direct weapon production is not as expensive as it might appear on the surface. By the same token, small reductions in funding for production can result in disproportionately large reductions in weapons produced. (Deleted.]

(Deleted]

(Deleted] while it is harder to quantify, this same kind of leverage clearly operates in the area of research and development "product.")

Congressional funding constraints such as those imposed on the Peacekeeper W87 warhead funding have greatly complicated our planning for warhead production, particularly in view of the simultaneous modernization requirements for our strategic and theater nuclear forces. Construction funds in both fiscal years 1983 and 1984 were fenced. The lack of timely release of funds causes a progressively riskier position in trying to meet IOC commitments, to have warheads available when the missile is ready for deployment Other defense nuclear programs can suffer as an unavoidable result Because of the nature of nuclear weapon production, construction funds are necessary very early for DOE to support DOD requirements. When the Congress reduces DOE production funding and applies restrictive language on construction funds, this can constrain or delay DOD systems which have already been approved and funded. The result is reduced efficiency in the acquisition process and increased costs in both Departments.

Deleted) in many such cases, small dollar investments can provide high dividends, not only in terms of DOD programs but the total cost of DOE programs. In simple terms, we must patch the chuck-holes in the road and fix the water pipes or the structure will not continue indefinitely carrying the load we now require.

(Deleted.) (Deleted.] (Deleted) SIS can play a significant role in the future production of SNM. (Deleted.] (Deleted.] Deleted.] (Deleted.)

SUMMARY

By way of summary, I would like to try to place the challenge before us today in context with similar decisions that the Nation's leadership faced in the past. Faced with the stresses of a world war, President Roosevelt reacted promptly and with high priority to Einstein's letter suggesting that development of an atomic bomb should be possible. We have all heard stories about the difficulties and successes of the Manhattan District Project conducted by General Groves and of the driving genius and philosophical stresses of the scientists who designed and built the first crude bombs. We know also that the German nuclear scientists were not far behind us in this research.

Ultimately, President Truman made the hard decision necessary to save many thousands of American lives which otherwise would have been lost in a protracted invasion of Japan. But perhaps the most lasting benefit to the world of President Truman's decision is the impression it has left with all of us that a nuclear war cannot be won and must never be fought.

President Reagan has stated this often, and I am sure we all strongly support this view. How then did we arrive at a condition where we must have nuclear weapons to deter their use? In a more perfect world we would eliminate all these weapons immediately.

After World War II, when the United States had the only existing atomic weapons, to preclude development by other nations we were prepared to place these weapons under the control of a world body. The Soviets effectively prevented this arrangement from succeeding, and we have had to manage in a world of confrontation ever since. We proceeded in stages from an overwhelming nuclear advantage, which allowed us to maintain a strategic deterrent posture characterized as "massive retaliation," to a period

of approximate equivalence of strategic forces—but there is continuing Soviet growth. Today we have a national strategy that we describe as "flexible response." Our deterrence policy and the strategy that implements it requires a complete spectrum of military capabilities and high confidence in our control procedures, but it still depends primarily on offensive weapon systems for a deterrent balance.

President Reagan has asked that the Nation's scientific community once again lead the way to a better defense, and we are working to begin that process even though it will probably take us many years of sustained and innovative technological development. I believe we can be successful if we can muster the collective commitment the effort will require.

I believe this because the weapons of war, and nuclear weapons in particular, come in both evolutionary and revolutionary steps. This is illustrated on these two charts.

(DELETED]
NUCLEAR EXPLOSIVE EVOLUTION

1ST GENERATION 1945-55, FISSION

BLAST, HEAT
INDISCRIMINATE
ALL DIRECTIONS

2ND GENERATION 1955-PRESENT THERMONUCLEAR

(DELETED]

We have witnessed the first two major revolutions in nuclear weapon capabilities, and we are now seeing the first indications that a third generation is possible. There have also been continuing evolutionary improvements.

This new generation of weapon concepts places a very great responsibility on those of us who manage the programs and also on those in the Congress who reflect and to a great extent influence the national will. The judgments which we must make are perhaps larger than the decision to move from the first to the second generation of nuclear weapons.

I believe that we must proceed with this research, and with high priority. When a technology begins to mature, we do not yet know of a way to keep it from our potential enemies. The Soviets have repeatedly demonstrated their willingness to press every advantage we allow them. Conversely, if we are successful in directing this technology toward truly defensive initiatives we can progressively become less dependent on offensive systems for our defense. This can lead to a safer and more stable world.

CONCLUSION In conclusion, I hope I have demonstrated for you that the DOE weapons program is a national resource whose contributions to the national security are broader and more diverse than just the weapons that are produced, and that this resource is operating close to margin of effectiveness. What is to be done with this resource is truly a question of national strategy. In large measure, the United States depends on advanced technology for deterrence and how we nurture and deploy, so to speak, that technology is indeed a national strategy question. In the short term, it is not as momentous a question as some that make the headlines. However, in the long term, it may be more important to our national security, considering the leverage which this technology can have and the risks associated with allowing us to be surprised.

Although this program has been subject to annual review in the administration and the Congress (deleted] I urge you, Mr. Chairman and members of the committee, to view the programs you will hear described during the next several hours of testimony in this light—that they are matters of long-term, national security strategy having to do with a major national resource.

The basic strategy issues involved here could have two outcomes. You could keep the program going just enough to get by, perhaps even satisfying most of the DOD's

immediate, identified needs, perhaps gaining slightly on the burdens imposed on the program because of environmental and safeguards concerns, perhaps even doing some high-quality exploratory development in a few carefully selected areas (or what may be more likely, doing a marginal job over a larger range of areas because we do not know what the potential adversary is doing and we must be able to cover all the bases to some extent).

The other alternative is to take steps to begin a true revitalization of this program so that there will be no question that it is second to none; so that we will not be surprised by Soviet developments whose nature we might not even understand when we see them because we have not done the work ourselves; and so that the future applications of these incredible sources of energy will be used for deterrence in the causes we all support.

DOE PROGRAM LIMITATIONS IMPOSE RISK Dr. WAGNER. Mr. Chairman, in the past, in this particular hearing, we have talked in some detail about the nuclear weapons systems and how they relate to deterrence and overall national security objectives. Much of that is included in Department of Defense testimony in other form, and I would prefer, in the short time we have, to address the Department of Energy nuclear weapons program in a somewhat more general way as we see it in DOD, and if I may use a few view graphs, I'd like to go up here and talk from them. (Chart deleted.

As we look at the overall program, we see these three general observations. (Deleted.] I will describe Áriefly ways in which we do that.

The DOE technology base strengthens deterrence in a lot of ways besides just developing weapons for production and [deleted].

ENSURING THAT DOD REQUESTS ARE FOR ONLY WHAT IS ACTUALLY NEEDED (Chart deleted.) On this first point, [deleted). (Deleted.] [Deleted.) ¡Deleted.]

Dr. WAGNER. The DOE is placed in a somewhat difficult position, because they-DOE certainly responds with will to specific requests for the stockpile. But, the DOE structure supports the Department of Defense in other ways, beyond just weapons for the stockpile, and that support comes out of the DOE technology base, and we in DOD are very concerned about the general health of that base.

NUCLEAR DETERRENCE INFRASTRUCTURE Let me show you some ways in which that base strengthens deterrence.

31-244 0 - 84 - 44

DOE TECHNOLOGY BASE CONTRIBUTES TO THE BROADER “NUCLEAR DETERRENCE

INFRASTRUCTURE” • NUCLEAR WEAPONS EFFECTS AND SURVIVABILITY • NUCLEAR WEAPON SYSTEM DESIGN • ANTI-TERRORIST SECURITY • REACTORS FOR SPACE AND MILITARY BASE POWER

(DELETED] • NUCLEAR INTELLIGENCE

Dr. WAGNER. An important part in the equation is the survivability of our weapons; the effects produced by them; the effects produced by Soviet weapons on the survivability of U.S. weapons. DOE, for years, has maintained a rather extensive activity in those areas. We depend on that a lot. It has been cut back as their budget difficulties occurred during the 1970's; I think, perhaps, cut back too far. We are suffering to some extent from it, but they still continue to support us in that area.

In addition to designing warheads, they help us design the systems, as well. This is partly to compensate for what I believe is a rather skimpy infrastructure in the Department of Defense itself, [deleted). We are currently engaged in a program to upgrade the security of our nuclear weapon storage sites against the terrorist threat. It's a large program. It is carried out within NATO. We could not have done it without the support that the Sandia Laboratories gave us, and continue to give us. The Sandia people are a continuing presence in the European theater. We simply could not do without that kind of support. Let me jump to another point. (Deleted.]

[Deleted.) DOE provides some things that we simply could not get from internal DOD resources. Now, this is work that's done mostly on a reimbursable basis with Department of Defense funds; however, it relies on the technology base that has grown in DOE over the years, which we would hate to see eroded or not put back in tip-top condition.

DOE TECHNOLOGY BASE As you know, the Department of Defense is embarking on an overall high-technology upgrade of our conventional forces.

DOE TECHNOLOGY BASE CONTRIBUTES TO

DOD'S NONNUCLEAR CAPABILITY AS WELL SOME EXAMPLES • NONNUCLEAR ADVANCED MUNITIONS

NONNUCLEAR DIRECTED ENERGY WEAPONS • ARMOR • BATTLEFIELD SENSORS

SUBMARINE QUIETING AND HYDRODYNAMIC

EFFICIENCY • ASW SIGNAL PROCESSING • CHEMICAL WARFARE DEFENSE

Dr. WAGNER. The DOE laboratories contribute a lot to that, in the area of nonnuclear munitions, nonnuclear directed-energy weapons, armor designs, battlefield sensors, submarine quieting, chemical warfare defense-last, but certainly not least. There is a tremendous technology base there. DOD depends on it, and we feel it should be kept as strong as possible.

[Deleted.

[Deleted] feel that it's very important in addition to producing weapons for the stockpile, to support their technology base.

Senator DOMENICI. (Deleted.] It seems to me the funding level the last 3 years has been going up substantially. Is that not a question of funding—it has

Dr. WAGNER. Mr. Chairman, it has been going up, but most of the increase has been for production of specific weapons for the stockpile. We have tried to limit the production requests as much-and have, we believe-as much as we can. It is funding for the technology base that I believe is important to focus on, to rebuild a truly healthy capability in this area.

[Deleted.]
Dr. WAGNER. I certainly think we should.
Senator DOMENICI. Well, why don't we? (Deleted.)
Dr. WAGNER. (Deleted.]
Senator DOMENICI. I would think so.
Dr. WAGNER. (Deleted.]

Senator DOMENICI. Is that a legitimate area of concern, General? That he's just expressed?

General HOOVER. Yes, sir.

Mr. MORGAN. We have reorganized the Department, and within defense programs, now we do have a Deputy Assistant Secretary for Intelligence, who is working that arena—the CIA and other sides of the intelligence community—to solve that problem, Mr. Chairman. So, we are addressing that now with the organization, and it's working quite a bit better than it was before. (Deleted.) If I may, sir, I'd like to briefly go through a few slides here that I've pulled out.

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