[CLERK'S NOTE.-End of questions submitted by Mr. Chappell.]

OPTEMPO

Mr. CHAPPELL. You are asking $75 million for ground training operating tempo. Why is that so critical as to be necessary in a supplemental?

Mr. HELM. Well, sir, the Secretary has put the highest emphasis on maintaining our personnel situation and maintaining the proper level of readiness. We feel very strongly that 850 miles per year per tank is the proper OPTEMPO.

We intend to try and maintain that level, but we will need additional funding to make sure. I think Mr. Walker, from the Army, may have some additional comments on that point.

Mr. WALKER. The 1987 Appropriations Act reduced the O&M account about $600 million in terms of programmatic activities, including $90 million associated with the Force Modernization Program.

Included in Force Modernization is both the fielding of new equipment and the operation of the new equipment, the most intensively managed pieces of equipment.

The fielding aspect is driven largely by the items being delivered from the production line. There is no flexibility there. You have to take the items and put them in the field.

We applied that reduction to the sustainment side of the account. That action would reduce us to an average of about 750 miles across a number of systems, including the tank.

That is not an acceptable level and that does not produce the level of readiness that we are looking for.

Mr. CHAPPELL. There is no way to pick that up with your simulators?

Mr. WALKER. Sir, we are using simulators and the Chief of Staff has directed a number of actions to maximize the efficiency of training, for example, hauling the equipment to the training areas rather than driving it and a number of other actions.

We just can't, at the present time, get the equivalent benefit out of the simulators. You get benefit, but you don't get the full effect of combined activities in the field.

Mr. CHAPPELL. You are confident you can't pick up the $75 million out of the O&M budget?

Mr. WALKER. There are rather heavy reductions to the budget and reductions to other programs would be equally damaging to readiness.

Mr. CHAPPELL. Provide for the record the specific programs and major commands which these funds would be allocated for. [The information follows:]

The $75 million will be allocated to Program 2 Mission ($37 million) and Program 7 maintenance ($38 million). The funds will be further allocated to the following major commands:

Army Material Command;

U.S. Army Forces Command;

U.S. Army Europe;

Eighth U.S. Army;

U.S. Army South;

U.S. Army Western Command.

NAVY FLYING HOURS

Mr. CHAPPELL. Mr. McDade.

Mr. McDADE. We will turn now to Navy flying hours.

You are requesting $70 million for increasing flying hours, in order to achieve a primary mission readiness rate of 87 percent.

You achieved that in 1986 apparently, even after GrammRudman and Congress made small reductions to reduce the growth in flying hours.

Since the Navy has the same approximate number of flying hours in both fiscal years 1986 and 1987, what is causing the fiscal year 1987 problem?

Mr. HELM. I think the simple answer is more planes are being operated, but I will defer to Admiral Smith on that question.

Admiral W. SMITH. Mr. Chairman, Mr. McDade, within the 1987 appropriation, part of our plan was to stand up the 14th carrier air wing. That stand-up began in November this past year, and that is resulting in additional aircraft being flown and additional pilots being put into that air wing. The growth that we had asked for in the 1987 appropriation was to cover the 1987 portion of the air wing growth.

The reduction that was made by the Congress in the Appropriations Act took us below the level of growth that we felt was essential to keep all 14 air wings and their pilots trained.

Mr. McDADE. Well, why do you have to come to us in a supplemental to get this money? Why can't you manage that properly? You achieved, and we are glad you did achieve your 87 percent efficiency rates, and we just constrained the growth a bit.

Why do you need to do this in a supplemental?

Admiral W. SMITH. In the past, we have had sufficient flexibility within our accounts, without seriously jeopardizing other areas of training or readiness, to make minor reallocations.

Given the reductions we have had in the last couple of years, that has become an increasingly difficult problem.

Mr. McDADE. It is an increasingly difficult problem on both sides of the table. You got $22.9 billion in the Navy O&M account overall from the Congress last year.

Are you testifying that you can't find $70 million within that $22.9 billion O&M account without cutting flying hours? Is that your testimony to us?

Admiral W. SMITH. What we are saying is that that $70 million will have an impact, on the entire program, and we will give the priority to the flying hours if necessary.

We are currently flying at the rate, because the fleet requires it for their readiness standards, that includes the $70 million in the base.

Mr. McDADE. We expect there is going to be an impact someplace when something happens. We applaud you for keeping your flying hours up. You are saying you are going to take it someplace else?

Admiral W. SMITH. I am saying the $70 million was below the level we needed for readiness and that the reductions to the $22.9 billion were below what would let us operate efficiently in manage

Mr. McDADE. Provide for the record the proposed allocation by weapon system and command of the proposed increased flying hours and funding and give us an idea of where you would find the $70 million out of the $22 billion in the event that you didn't get the supplemental, without impacting flying hours.

[The information follows:]

The $70 million supplemental, if received, will be distributed equally between the Atlantic and Pacific Fleet; with each receiving $35 million. The supplemental is required to satisfy the fleets carrier operational commitments, the additional hours required due to the stand-up of the 14th Airwing, and the expansion of our ASW forces. Consequently, the funding will be allocated to the following aircraft on a pro rata basis:

We must execute the flying hour program at the required levels in order to maintain fleet readiness and safety. The Navy's budget does not include real program growth. We have submitted a balanced budget and cannot absorb additional requirements without creating shortfalls in other major fleet programs which will adversely impact readiness.

SPARE PARTS

Mr. McDADE. You are requesting $50 million to buy additional spare parts through the stock fund, which is also funded in the O&M account.

Admiral W. SMITH. Yes, sir.

Mr. McDADE. Is the Navy problem in this category that requirements have grown beyond what was originally budgeted in the fiscal year 1987 budget?

Admiral W. SMITH. Since the FY 1987 budget was submitted an increase in spare part usage for 2 of our major systems has driven the shortfall. The 2 major systems are the close-in weapons system, which is in the process of being fielded on a number of ships, and the all-purpose Jammer, the SLQ-32, Both are complex electronic mechanical systems.

The usage rate of spare parts is totally outside of the realm that we had projected when we put the spare part allocation plan together.

Mr. McDADE. Is that a euphemism for saying the systems are causing a lot more grief than you anticipated?

Admiral W. SMITH. Exactly.

Mr. McDADE. It is confined to those 2 systems?

Admiral W. SMITH. This additional money is confined to those 2 systems. Yes, sir.

Mr. McDADE. How would you have treated these requirements if the Administration had not agreed to come up and request a supplemental for these accounts?

Admiral W. SMITH. The way we would probably have treated it is to have continued to run short on spares in that area until we could generate the necessary savings and flexibility, either later this year or the beginning of next year, to order the required spares; and in the meantime suffer through the added degradation.

Mr. McDADE. That is your only option; you don't have sufficient flexibility within the $22 billion to do something besides wait and suffer?

Admiral W. SMITH. Yes, sir.

AIR FORCE FLYING HOURS

Mr. McDADE. Let's talk about Air Force flying hours, please. The Air Force wants $21 million for increased flying hours for the KC-135, B-52, SR-71, FB-111, and F-16 aircraft.

How do these increases relate to specific reductions to flying hour growth requests made by Congress in the fiscal year 1987 authorization and appropriation bills?

General LEO SMITH. Last year the Congress cut about 5,000 hours from our KC-135 flight program. The 5,000 that we are asking back would replace those hours withdrawn from the request.

On the F-16 side, the request was cut by 7,000 hours. We are asking for about 5,000 hours back on that side.

On the B-52's, we are asking for an additional 1,000 hours above the request of last year and for the F-111, about 950 additional hours.

In the case of the B-52 and the FB-111, those hours would provide us additional training in conventional munitions. In the case of the B-52 specifically, it would replace hours that were not forecast in the original budget estimate.

Mr. McDADE. What were they?

General LEO SMITH. The particular exercises are classified. It is about 860 hours used in those 2 exercises, and this 1,000 hours would generally replace those.

In the case of the KC-135, the 5,000 hours would provide for additional refueling support to all forces, Tactical Air Force, Navy, and the Air Force.

The last 7 years we have overflown our program, last year to the tune of about 2,200 hours. This would take care of some of that shortfall and provide for some additional training required for our

crews.

In the case of the F-16, we are bringing on and trying to mature the force more rapidly and getting the new pilots up to a fully combat-ready capability sooner than before.

In the 1987 program, up to this time for the first quarter, we are flying at 101 percent of our projected level for fiscal year 1987.

So we will be able to use the hours effectively to improve our combat capability for the F-16's.

Mr. McDADE. We are glad to hear that because the committee is aware that in fiscal years 1984, 1985 and 1986, the planned hours for the F-16 didn't happen.

General LEO SMITH. We took those hours into account. We flew the hours. We did not necessarily fly them against the F-16 because there were some changes in the program, but we used all the hours, and I believe, effectively.

This year we are, however, flying the present program at 101 percent of our forecast.

Are any of these dollars for the proposed low altitude flights over Northern Minnesota?

General LEO SMITH. I do not believe so, but I will have to check. I will insert that in the record. I don't have an answer for you at hand.

[The information follows:]

None of the supplemental FY87 flying hours are to be used for the proposed low altitude route over Northern Minnesota. The proposed route will open in FY88 after completion of the Environmental Assessment process.

Mr. McDADE. Thank you, Mr. Chairman.

UNEXPENDED AND UNOBLIGATED BALANCES

Mr. CHAPPELL. Mr. Murtha.

Mr. MURTHA. Thank you, Mr. Chairman.

Let me ask a question about unobligated balances. The chairman of the full Committee, every time we have a hearing, and afterwards for days, keeps talking about unexpended and unobligated balances.

With the problems we are having in finding money, with the tax situation and the deficit situation, where are we with the unobligated and unexpended balances?

For example, in 1975, we had $44 billion in unexpended balances and we had $16.7 billion in unobligated balances. The unobligated balances went up to a peak of $61 billion in 1985 and started down in 1986. The unexpended balances are still continuing up.

Here we have got $273.7 billion unexpended and $49.7 billion unobligated. Why from a standpoint of keeping records can't you take supplemental funds like this just out of these balances? What happens to you? It never seems to go down, at least since 1975 it hasn't gone down.

Can you explain this so that a layman can understand why there is such a bookkeeping problem for those of us sitting on this side of the table who keep seeing figures increase on a costing basis?

Mr. HELM. I can try to summarize the situation.

Mr. MURTHA. For instance, why couldn't we just take the supplemental and say there will be no additional expenditures, it is all going to come out of unobligated balances?

Mr. HELM. All of those unobligated balances are reserved against programs that Congress has specifically approved and funded in the past. We have not got around yet, because of the pace of contracting, to actually write the contract that would obligate those funds, but they were all requested against a force requirement. In the past we were asking for large amounts for procurement based on the full funding concept which is where the bulk of these balances is we are talking about are located.

Congress was very supportive in funding those procurement requests. Those balances built up very quickly, waiting to have contracts written against them in sync with the pace of the program. In other words, as the various parts of weapon systems were scheduled to move into production.

Mr. MURTHA. You are missing my point. I understand why they are there, but we have gone up in unexpended balances from $44 billion to $273 billion. It is a steady increase.