EXECUTIVE SUMMARY

importance of obtaining a balanced mix of offensive weapons, defense suppression weapons, C3 and intelligence fusion information, and nuclear/chemical capability. The Fiscal Year 1987 budget request is designed to accomplish that mix without sacrificing the importance of readiness and sustainability.

Force projection is vital to our ability to deter aggression by displaying our readiness to use the correct force at the right time and the right place. Our three key elements of force projection are airlift, refueling, and special operations forces. Air Force airlift operates in conjunction with sealift and prepositioned war materials to provide the link between force structure and combat capability. With the final procurement of 21 C-5Bs in Fiscal Year 1987, we will have completed the major portion of our near-term airlift modernization that started in 1983. For our longterm requirements, we will complete full scale engineering development of the C-17 multirole airlifter in preparation for a 1988 production start. We will also begin the development and acquisition of two Air Force One replacement aircraft whose need was recognized by the last Congress. To complement our airlift leg of force projection, we have significantly increased our refueling aircraft fleet to support tactical as well as strategic readiness. In Fiscal Year 1987, we will complete our planned 60 KC-10 fleet with the purchase of eight aircraft and will continue the annual production of KC-135R re-engine kits to provide a 50% fuel availability increase to our primary strategic airlifters. To meet the threat of low level conflict, especially that posed by increased terrorist activity, we have started acquisition of additional MC-130H and AC-130H aircraft to supply airlift and accurate fire power in support of our special operations forces.

Supporting the development and production of our weapon systems requires extensive test and evaluation facilities. With the increased emphasis on testing, we plan to conduct several test range modernization and improvement efforts in Fiscal Year 1987.

Overall, this year's budget seeks to sustain positive growth in the future to meet our national security objectives and military strategy of deterrence and flexible response to hostilities. Through careful stewardship of public resources during the first five years of the Reagan administration, we have made significant improvements in force modernization, readiness, and sustainability. With improved acquisition techniques, we will continue to improve our military posture. We have developed a budget that strikes a prudent balance between research, development, test and evaluation, and procurement programs and takes into consideration competing military requirements and program priorities. Congressional approval of this Fiscal Year 1987 budget will allow us to sustain our past gains and meet the growing threat.

A. Maintaining The Military Balance

In developing this year's budget request, we struck a balance between maintaining our forces readiness and modernizing our forces to meet an ever increasing threat. Within the current climate to reduce spending, we have adjusted our request to remain within established funding limitations. Despite these austerity measures, we believe the budget still preserves our current wartime capability while maintaining growth in our capability in the future.

In developing this year's research, development, procurement, and logistics budget request we continued to use the following priorities to establish a framework for making our decisions:

We are also improving our ability to operate efficiently and effectively in space. This nation's heavy civilian and military reliance on space-based systems, coupled with the Soviet's potential to disrupt our space systems, requires that we meet the opportunities and challenges space development presents.

B. Fiscal Year 1987 Air Force Budget - Investment Accounts

This year's budget was developed to directly support our strategies for achieving national security objectives in the current and future world environment. Within the present world environment, the predominant threat to the U.S. and our allies national interests is the Soviet Union's military with its advances in technology, expansion of strategic and general forces, and its emerging ability to project military power across great distances. This increased capability has enabled the Soviets to directly and indirectly infringe upon the freedom of other nations. We must protect our freedom as well as that of our friends and allies through deterring direct attack and indirect coercion. Our military strategy is based on the deterrence of war. Should deterrence fail, our wartime strategy is to terminate conflict on terms favorable to the U.S. and its allies.

The Air Force's Fiscal Year 1987 budget request provides the balanced combat capability the nation requires to achieve U.S. national security objectives. At the same time, it also provides the proper balance between funding the investment in the developing our future capabilities, as well as maintaining our current readiness and sustainability.

AIR

INVESTING IN THE FUTURE

The diagram below illustrates the breakdown among seven major appropriation categories of the Air Force Fiscal Year 1987 budget. The clear sectors comprise the investment accounts and the hatched sectors the operating accounts. Shown in each sector are the dollars requested for Fiscal Year 1987 and the associated percentage of the total request for each account.

Each investment appropriation's real growth rate as compared to the Fiscal Year 1986 Department of Defense (DoD) Appropriations Act is shown in the chart below. Overall, the Fiscal Year 1987 real growth rate remained almost constant compared to the Fiscal Year 1986 DoD Appropriations Act.

INVESTING IN THE FUTURE

The Research, Development, Test and Evaluation (RDT&E) appropriation has increased 21% with the largest changes attributed to planned increases in development programs in the Tactical and Strategic areas. Tactical programs with the largest changes are C-17, Advanced Tactical Fighter and the Joint Surveillance and Target Attack Radar System. The strategic program increase is due to the Advanced Technology Bomber, AF Satellite Communications, Milstar, Short-Range Attack Missile II, and the Small Intercontinental Ballistic Missile and Hard Mobile Basing portion of ICBM Modernization.

Aircraft procurement has shown the sharpest decline (-20%), as a result of both previously planned program reductions, and new reductions, such as the HH-60 and T-46. Overall aircraft procurement quantities have increased from 333 aircraft in Fiscal Year 1986 to 359 aircraft in Fiscal Year 1987. The largest quantity changes result from the completion of the B-1B production, an F-16 increase ( +36 aircraft) and the new procurement of 38 Civil Air Patrol aircraft. Shown below is a comparison of current U.S. and Soviet combat aircraft.

*Note: Aircraft used for Force Projection and Training are not included.

(As of 1 January 1986)

Missile Procurement shows a modest 3% growth due to several changes in both directions. While there where decreases in Peacekeeper, spares/repair parts and other support items, there were sizeable increases in our air-to-air and air-toground tactical missile procurements. Sparrow and Sidewinder procurements will continue to provide needed air-to-air capability while the Advanced Medium-Range Air-to-Air Missile production line becomes fully qualified. For air-to-ground missiles, the High Speed Anti-Radiation Missile missile has reached its peak production level while the Maverick and AGM-130 missiles are still ramping up to next year's steady production levels.

Other Procurement increased 23% this year. Within Munitions and Associated Equipment, the largest increases were due mainly to the CBU-87 combined Effects Munition, the GBU-15 and the 2000 lb. hard target bombs. Within Electronics/ Telecommunications, the most significant increases are in the PAVE