U.S. defense strategy is part of the planning process DoD uses to determine our nation's defense program. Our process has several components (which are depicted above):

(1) Identify U.S. National Security Interests. U.S. national security interests are defined as values, conditions and geographical assets deemed to be of major importance to the preservation and well-being of the United States and its allies. U.S. interests encompass both broad ideals (e.g., freedom, human rights, and economic prosperity) as well as specific geographical concerns (e.g., the territorial integrity of our allies and unencumbered U.S. access to world markets and sources of strategic resources).

(2) Assess Threats to U.S. Interests. This entails analyzing the nature, magnitude, strengths, and vulnerabilities of military forces or other conditions endangering our interests.

(3) Formulate Defense Policies and Strategy. Defense policy sets forth security objectives and guides for development of defense strategy and military capabilities, to be used in conjunction with other instruments of national power to counter security threats and advance U.S. interests. Defense strategy details how defense policies are to be pursued. It is the plan for employing defense resources to safe guard our national security interests. Thus, strategy specifies how our defense means are to accomplish our desired national security ends.

(4) Determine Military Capabilities Needed to Carry out U.S. Strategy. These needed capabilities (forces, weapons, manpower) become our defense programs and therefore determine our budget. This defense planning process is dynamic. Every year it involves reassessing, validating and, when appropriate, modifying our strategy and ongoing policies and programs.

U.S. INTERESTS

America's paramount national interests are peace, freedom, and prosperity for ourselves and for others around the world. We seek an international order that encourages self-determination, democratic institutions, economic development, and human rights. We endorse the open exchange of ideas and other measures to encourage understanding between peoples.

More specifically, we maintain our steadfast concern for the security and well-being of our allies and other nations friendly to our interests. We oppose the expansion of influence, control, or territory by nations opposed to freedom and to other fundamental ideals shared by America and its allies.

NATIONAL SECURITY OBJECTIVES

Threats to U.S. interests require us to formulate national security objectives and policies to counter those perils. The most serious threat to America and its allies continues to be Soviet military power and Moscow's willingness to use it for political and economic gain and for endangering our interests. The Soviets threaten our interests directly and also by exploiting regional instabilities and supporting radical regimes around the globe hostile to U.S. inter

Military Power, my Annual Report to the Congress, and Admiral Crowe's posture statement and testimony.

Major U.S. national security objectives are to:

-Safeguard the United States, its allies and interests by deterring aggression and coercion; and should deterrence fail, by defeating the armed aggression and ending the conflict on terms favorable to the United States, its allies, and interests at the lowest possible level of hostilities.

-Encourage and assist our allies and friends in defending themselves against aggression, coercion, subversion, insurgencies, and terrorism.

-Ensure U.S. access to critical resources, markets, and oceans, and space.

-Where possible, reduce Soviet presence throughout the world, increase the costs of Moscow's use of subversive forces, and foster changes within the Soviet bloc that will lead to a more peaceful world order.

-Prevent the transfer of militarily critical technology and knowledge to the Soviet bloc.

-Pursue equitable and verifiable arms reduction agreements, with special emphasis on compliance.

Our defense strategy is driven by and supports President Reagan's overall foreign policy, and especially these principles:

(1) Realism. We must deal with the world as it is, not as we wish it would be. This particularly characterizes our dealings with the Soviet Union. Our strategy is geared to actual Soviet actions, which provide evidence of their intentions, rather than Kremlin declarations. We assess the Soviet threat through careful analysis of facts, acknowledging weaknesses as well as strengths.

(2) Strength. America's strength is the result of our combined political, military, economic, moral and cultural posture. But it is military strength that is essential against adversaries who could destroy all we value if we are militarily inferior. Although military strength alone is not enough, without it there can be no effective diplomacy and negotiations and no genuine, lasting security.

(3) Willingness to Negotiate Arms Reductions with our Adversaries. While recognizing fundamental differences with our adversaries, we seek meaningful and productive discussions to bolster U.S. and allied security and make the world safer. And especially in negotiations over arms reductions, it is realism and strength that are crucial to progress.

KEY FEATURES OF U.S. NATIONAL SECURITY STRATEGY

DETERRING AGRESSION AND INTIMIDATION

U.S. PEACETIME STRATEGY

U.S. defense strategy is a combination of a peacetime and wartime strategy. The goal of our peacetime strategy is to deter aggression against the United States, its allies, and interests worldwide. Our wartime strategy prescribes U.S. actions should deterrence fail. Our peacetime and wartime strategies obviously are closely linked, since successful U.S. deterrence depends primarily upon our probable responses to aggression. For conciseness, my discussion

here integrates our peacetime and wartime strategies, reflecting this close linkage.

America's peacetime defense strategy is to deter threats to our interests by means of clear alliance commitments and military forces that provide us with effective and credible responses to any type of aggression. To deter successfully, we make clear to potential aggressors that we have both the means and the will to respond powerfully to aggression. We emphasize our resolve to respond to aggression, but our strategy is to avoid specifying exactly what our response will be at any given time. This is the essence of "flexible response," which has been U.S. strategy since 1961 and NATO strategy since 1967.

U.S. and allied forces deter a potential aggressor by confronting him with three types of possible responses should deterrence fail: -Effective Defense: To confront an adversary with the possibility that his aggression will be defeated without our side resorting to actions escalating the conflict. This is sometimes referred to as "deterrence through denial." Example: Defeating a non-nuclear attack with conventional forces only. -The Threat of Escalation: To warn an adversary that his aggression could start hostilities that might not be confined in the manner he envisions-that escalation could exact far greater costs than he anticipates, or could bear. Example: NATO's deterrence of a Soviet conventional attack is enhanced by our ability and resolve to use nuclear weapons, if necessary, to halt such aggression.

-The Threat of Retaliation: To raise the prospect that an attack will trigger a retaliatory attack on the aggressor's homeland, causing his losses to exceed greatly any possible gains. Example: Our deterrence of a Soviet nuclear attack today is based on our resolve to retaliate against the Soviet Union using our nuclear weapons.

The responses summarized above are part of the overall U.S. defense strategy for safeguarding our interests worldwide. Our global strategy for deterring aggression can be summarized as follows:

To Deter Nuclear Attack. To do this, the United States relies on a credible warning capability; strong and survivable nuclear forces; and survivable, fully capable command, control, communications and intelligence (CI) supporting systems. The U.S. strategic nuclear capability must ensure that any potential attacker is faced with unacceptable risks and outcomes from his aggression and thus is deterred from attacking or attempting political coercion. U.S. retaliatory forces must be able to hold at risk the full range of Soviet targets despite Soviet advances in passive and active defense. We seek to do this through our strategic nuclear Triad: intercontinental ballistic missiles (ICBMs); submarine-launched ballistic missiles (SLBMs); and strategic bombers. The combined effect of having these three reinforcing components complicates Soviet attack planning and any efforts to prevent U.S. retaliation. In addition, the existence of the three legs provides an important hedge against the possibility that a single Soviet technological breakthrough could threaten our overall deterrent capability. By maintaining our Triad, we compel the Soviet Union to disperse its resources against

able resources on defeating only one or two U.S. strategic systems. The strengths of each leg of the Triad not only complement the strengths of the other two, but also compensate for their weaknesses. To deter all types of nuclear attack, our forces as a whole must possess various characteristics and capabilities-including survivability, prompt response, endurance, mission flexibility, and sufficient accuracy and warhead yield-to hold at risk those assets the Soviet leadership values most.

To Deter Non-nuclear Aggression. To do this, we rely on nuclear and non-nuclear U.S. and allied forces, which together can respond to an attack with effective defense or credible capabilities for escalation or retaliation. This combination of forces deters by making the outcome of aggression uncertain and by making the probable costs exceed the probable gains in the minds of any potential aggressors.

Effective defense has several important advantages as a basis for deterrence. It has high credibility and stability. Moreover, because it provides protection against attack, it is more reassuring and more successful in preventing intimidation, which the Soviet Union could achieve by threatened use of its military power.

These unique advantages of effective defense explain the attractiveness we see in having thoroughly reliable defenses against nuclear attack, as envisioned in President Reagan's Strategic Defense Initiative (SDI). Effective strategic defenses would bolster (not replace) deterrence, provide protection should deterrence ever fail, and reassure all peoples now exposed to nuclear attack.

The advantages of effective defense also explain why the United States and its allies must have strong conventional forces, and the capability to project them and support them, in order to protect our global interests. We cannot rely solely on a nuclear crutch to deter and defeat non-nuclear aggression. But of course, as long as our adversaries possess nuclear weapons, we must continue to maintain modern, effective nuclear forces.

SHOULD DETERRENCE FAIL: U.S. WARTIME STRATEGY

Our purpose is to prepare for war so well that we successfully deter aggression. But should deterrence fail, our strategy calls for securing all U.S. and allied interests, denying the aggressor any of his war aims, and causing or convincing him to stop his aggression. In responding to a non-nuclear attack, the United States would act not only to defeat the attack, but also to convince the attacker that his continued aggression would entail grave risks to his own interests. Still, because of the enormous military strength of the Soviet Union, the United States cannot prepare only for a "short war," which could merely tempt Moscow to believe it could outlast us in combat.

U.S. strategy seeks to terminate any conflict at the earliest practical time and restore peace on terms favorable to the United States, its allies, and friends. Our goal would be to limit the scope of any conflict, and confine it to conventional means that do not engender or risk escalation. Should our attempts to defeat aggression fail, however, U.S. strategy provides for the flexible and suffi

cient application of force to ensure that no area of vital interest is lost by default.

As a U.S. response to Soviet non-nuclear aggression, the threat of geographic escalation is an element of U.S. strategy; but it is not a substitute for sufficient military capability in the primary area of operations. Since the Soviet Union possesses war-widening options at least as effective as those of the U.S., and particularly since geographic and nuclear escalatory considerations may be linked, U.S. interests demand careful attention to the potential benefits and risks of escalation. Contingency planning must include, however, options for exploiting Soviet vulnerabilities and for military initiatives in regions of clear U.S. advantage, in order to dissuade the Soviets from continuing their attack.

BALANCE OF FORCES

To protect our mutual interests, the United States and its allies must maintain military capabilities sufficient to make our defense strategy credible and effective. This does not require that we and our allies match our adversaries in every category of weapon system; e.g., numbers of tanks, aircraft, ships, etc. The calculus of deterrence and defense is far more complicated than just static numbers. At least as important are the performance characteristics of the weapons, the quality and morale of people operating them and the tactics used. Moreover, geography and the unique features of a specific security mission decisively affect the military forces needed. Finally, the cohesion of our alliances-into which our partners have joined freely, in contrast to the alliance of the Soviet Union-also relieves us from having to match the Soviet threat unit for unit. All these variables, plus others, are weighed against the threats to our security in determining our military needs for protecting U.S. interests and meeting our commitments.

In 1981, the largest problem we faced stemmed from a 20-year Soviet arms buildup, which was accompanied in the 1970s by a 20 percent real reduction in U.S. defense effort. The global military balance-in Soviet terms, the "correlation of forces"-was shifting in favor of the Soviets in their view as well as ours. Through an investment nearly 50 percent larger than our own, the Soviets were buying advantages in virtually every area of comparison-in nuclear forces, in the NATO-Warsaw Pact balance, and in Southwest Asia.

With the dramatic strengthening of our military forces since 1981, we have made substantial progress toward ensuring a balance of forces sufficient to keep our strategy credible and effective. If we can maintain a steady strengthening, we can preserve our gains. But if we falter, the military balance can erode rapidly, since the Soviet buildup continues unabated.

ALLIANCES FOR COLLECTIVE SECURITY

For free peoples, cooperation and collective security are essential to the preservation of our nations and our values. This alliance system enables us to share our common security burdens and achieve a division of labor capitalizing on the relative strengths of