25 March 2003
Pentagon Seeks $62,600 Million in Additional Money for FY03
(Current funds are "nearly depleted," official says) (4720)
The Pentagon March 25 asked Congress for $62,600 million in additional
funding for the fiscal year ending September 30 (FY03).
The money would be used to supplement the Pentagon's budget that has
been nearly depleted because of costs related to the war in Iraq and
the global fight against terrorism, according to a senior defense
official briefing reporters the day before the request was submitted.
The request includes $30,300 million for personnel, transportation and
coalition support costs committed before March 20, according to a
Pentagon fact sheet distributed at the briefing. Coalition members are
helping the United States in the war on terrorism and in global
anti-drug efforts, he said.
It includes $13,100 million for what defense officials project would
be the major conflict phase of an expected short but intense war in
Iraq, the official said.
The request also includes $12,000 million for a transitional phase
involving stability operations, humanitarian assistance and
fire-fighting in oil fields, he said.
The Pentagon is asking that 96 percent of the requested funds be
allocated to a Defense Emergency Response Fund (DERF) that would allow
it "maximum flexibility" in transferring funds among accounts as
needed, the official said.
The request would replenish $165 million in funds used to support the
Afghan National Army, he said.
The official added that the Pentagon hopes Congress will approve the
request before its Easter recess, which begins April 11.
If the Pentagon doesn't get the requested money, the official said, it
will have to severely curtail its training, maintenance and
operational spending for the remainder of the fiscal year.
(Note: In the following text, "billion" equals 1,000 million.)
Following is the transcript of the Pentagon briefing:
(begin transcript)
DoD News Briefing
Senior Defense Official
Monday, March 24, 2003
(Background Briefing on Budget Supplemental)
SR. DEFENSE OFFICIAL: Okay, what you've all been waiting for. We are
about to release to Congress a supplemental request, and we are going
to really push for prompt and full congressional passage.
Let me move you immediately to the next slide. Okay, that wasn't
supposed to be the first slide. Go to slide four, quickly. There we
go.
That is what the supplemental looks like. If you add it up, you will
see it's $62.6 billion. And we cannot -- and these are all incremental
operations, okay? We can't fund the -- our regular operations. If we
don't get this money, what we will have instead is a severe curtailing
of our training, maintenance and funding for later in the fiscal year.
In fact, the services have or have just about totally depleted their
funding in their operations and maintenance accounts in particular,
and military personnel accounts for the fourth quarter. That is to
say, what they did was, they forward-financed, and took monies that
were supposed to be spent between July 1st and September 30th and
spent them already. And they've just about used all that up.
There are four phases here. Coercive diplomacy is the sunk costs; that
is what we used. We took money from other accounts and sunk that into
the support for our diplomacy, moving the forces out there.
Major conflict phase assumes a short duration, high-intensity
conflict. Don't hold me to a specific hour or day because we just
don't know. And to be perfectly frank, we have seen, just over the
last couple days, shifts both in strategy that came out, and shifts in
the fortunes on the battlefield, and that's what ebb and flow is
about. So we made some rough assumptions. Obviously, high intensity;
turn on your TV, you see how high the intensity is.
Transitional and stability phase includes stability operations,
humanitarian assistance, and natural remediation operations; for
example, fire-fighting in the oil fields.
And then reconstitution includes depot maintenance, ammunition, and
spares.
Now you'll see in the small box where we spent the money for the
coercive diplomacy. The larger part of it, more than half, was spent
on personnel and personnel support. Then you had transportation,
moving forces back and forth. "Preparatory tasks" means just that. Did
you have to do some work in a particular area to get the -- to make
the facility hospitable to the forces who came out, things of that
sort. Consumables that we've used, and then coalition support -- very,
very important. We value the contributions of our coalition partners.
We've seen already that our British partners have taken especially
high hits relative to the size of their forces, and we're continuing
to look for more and stronger international support for our efforts.
Now let me go back to what is marked as slide 2, if you can go back to
2, please.
QUESTION: Are we going to get these?
OFFICIAL: Yup, and you'll get them in the wrong order.
Q: (Chuckles.)
OFFICIAL: The supplementals been prepared under the following
assumptions:
This is only 2003 costs. We have not budgeted the 2004 budget for the
global war on terrorism or the current operation for Iraqi freedom.
It's obvious. How could we budget for something that we didn't know
would happen? We cannot, as I said, absorb 62.6 billion for
incremental costs within the current budget that we have. And the
supplemental includes only incremental costs above what's in the
service and Defense budget agencies.
Lots and lots of unknowns, obviously. We're aware of that.
That also means we need maximum flexibility to reallocate funds. We
are recommending that almost 96 -- about 96 percent, 60.1 billion,
will be appropriated into a Defense Emergency Response Fund, a DERF.
We've done that before. The reason you do that is that it gives you
the ability to transfer funds from one account to another. If you lock
them into particular accounts, you may be over funding one account,
under funding another account, and then you can't move the monies
around. So we want to allocate the monies based on actual execution.
Next slide, please, which is slide 3, still.
Now let me walk you through a little bit more on these particular
items. I mentioned already personnel costs, transportation,
preparatory tasks. I've given you all those. Let me give you what's in
some of the other categories.
We have $1.6 billion for coalition support; that is to say, countries
that are providing help to us, and that we are reimbursing. We've done
that for Pakistan in the past. We're going to have additional funds,
as well.
We also have money for counter-drug operations, which, by the way,
extend beyond just Latin America, and it's important to understand
that, although it's focusing on Colombia.
Energy resource management fund deals with the damage to the oil
fields, and reconstruction (sic) I've already mentioned to you. The
reconstitution, I should say also -- I said "reconstruction"; that was
a slip. It's "reconstitution." It deals with significant force
redeployment, moving them back from the theater. We expect forces to
decline significantly. We're not going to retain large numbers just
for the sake of keeping them.
We're going to replace key munitions expended in the conflict, the
kinds of munitions you've been seeing on television. And, as I
mentioned earlier, depot maintenance and repair of weapon systems and
weapons that have to be serviced after the wear and tear of
operations.
So now let me go to slide 5, which is slide 5. That one you've seen.
Here is another way of looking at this. We mentioned that 15.6 of the
30.3 was personnel. And you'll notice that the 15.6 is the entire
request because the people already moved out there. Military operation
support is to finance the incremental military operation, the costs
that have already been incurred.
Procurement and RDT&E [research, development, test and evaluation},
that's simply to provide weapons, munitions that we're using to
support the military. Small amounts of military construction, urgent
projects in some host countries. These are facilities used by the U.S.
Also the continuing war on terrorism, and also a small amount for the
complex at Guantanamo.
Fuel procurement is in the working capital fund. That's your $400
million. Coalition support I've already talked about. And the
firefighting. And then Colombia is kind of a separate category of $34
million.
That is the supplemental for the Department of Defense. Obviously, it
doesn't include other elements of the supplemental, State and so on,
but this is what we are asking for.
The key points that we're trying to get across is, we need that this
be passed as urgently as possible, as quickly as possible and with the
maximum flexibility so that we can move monies around in different
accounts. We've found that having that flexibility in Operation
Enduring Freedom made a tremendous difference. Whereas we had past
cases where that was not at all the circumstance and in some previous
operations, where monies were allocated to specific accounts, it
became exceedingly difficult to move those monies back; people said
they had spent the monies and so on. We don't want to get into that.
So that's basically it, and I know you all have things to do. I'll try
to answer some questions. Yeah?
Q: A question on precision-guided munitions. You said that there would
be specific funds dedicated to replacing weapons that had been
expended. Can you highlight a little bit of the prioritization that
you see already? In other words, do you see any particular areas that
you could note for us of high expense, like Tomahawk missiles, for
example --
OFFICIAL: Well, I mean, obviously we're using the JDAMs [joint direct
attack munitions] and laser-guided bombs and Tomahawk missiles. I
mean, you're seeing that's a very high rate of use -- usage.
How far we will continue to use them at that rate is of course a big
unknown. It very much depends on what happens in the battlefield.
So we assumed a relatively short, highly intense period of conflict.
How that plays out, you know, we just don't know. I mean, it's the
best we were able to do.
Yeah?
Q: We used the Defense Emergency Response Fund for Operation Enduring
Freedom?
OFFICIAL: Yes, we did.
Q: When did we use it before that?
OFFICIAL: We never really used it per se in that way. We had -- as --
you know, I wasn't in the government then, but I believe for Kosovo
and Bosnia there was a contingency fund that caused -- evidently
caused a lot of complications. And I think in Kosovo -- and it may be
Bosnia; I forget which one -- we actually allocated funds directly and
ran into problems afterwards. Was it Kosovo or Bosnia?
ANOTHER DEFENSE OFFICIAL: We used other transfer funds before. There
was something called the Overseas Contingency Transfer Fund --
OFFICIAL: That was the overseas contingency. But for -- well, one of
them we actually allocated directly --
ANOTHER DEFENSE OFFICIAL: That is post-9/11.
OFFICIAL: Yeah, but we had one case where we allocated directly and
found ourselves short in some accounts and overages in other accounts,
and that's what we try to avoid.
Yeah?
Q: Could you give us a ballpark at all on what you mean by assuming a
relatively short, high-intensity conflict?
OFFICIAL: Well, you know, we're not talking about several months.
Let's put it that way.
Q: (Off mike.)
OFFICIAL: Right now that's all I'm going to say.
Q: If we used a month, would that be incorrect or is that --
OFFICIAL: If you used a month, you'll use a month. I mean, I'm just
telling you it's not several months.
Q: Can you talk a little bit about --
OFFICIAL: I'm sorry. I should have called on you, but --
Q: Well, let her go.
OFFICIAL: Hey! A real gentleman.
Q: (Laughs.)
Q: Is there any money in there at all for Turkey?
OFFICIAL: Not in our budget.
Q: Did you have access to the actual war plans and some of the
time-phased deployment schedules that allowed you to make estimates?
SR. DEFENSE OFFICIAL: Well, of course they're relevant to that, to
some extent. We -- you know, we couldn't just come up with these out
of thin air. Remember, these tend to be parametric estimates, and war
plans, you know, again, they change, as we saw, you know. But so what
we did was apply -- that was a major input, but not the only input.
Let me put it that way.
Q: The 30 billion in sunk costs, what's your benchmark? Is that since
January?
SR. DEFENSE OFFICIAL: That is how much -- no, as you recall, we had
some preparatory tasks extending back, you know, quite a few months.
And you guys were reporting on those developments as they happened
from the Gulf and so on. What we did was look at how much had we
expended as we were deploying, and really up to the president's
speech.
Q: This fiscal year?
SR. DEFENSE OFFICIAL: It would be this fiscal year, in other words,
'03 costs.
Q: Up to the president's speech and for a couple --
OFFICIAL: Remember, we're in '03, okay. So, this is --
Q: A lot -- 30 billion sunk, already spent. That's --
OFFICIAL: Well, that's mostly because -- remember, look at all the
forces we moved and the Reserves we used.
Q: So $30 billion to build up for this invasion?
OFFICIAL: Yeah. And one of the interesting things is, you know, people
will say, "My God, the whole thing is apparently costing 60.2 -- or
rather 62-point-whatever-it-is, -6, and you've spent about half just
for the build-up. And the answer is, of course, because once the
forces are there, they're there, okay, and you had to feed them, and
you had to move them, and you had to -- and you had to house them, and
so on. And so, in a sense, if they would have all turned around and
gone home, you know, the president -- if Saddam would have listened to
the president's speech and decided he really did want to move to a
vacation home, permanent vacation, we would have still had a bill of
$30-point-some-odd billion.
Yeah, somebody called me sir. I gotta call on him. (Laughter.)
Q: Yeah, I'm not understanding. Explain the difference between
coercive diplomacy and major conflict phase.
OFFICIAL: Yes.
Q: But also, I mean, if it costs 30 billion to get them there, what
might it roughly cost to get them home?
OFFICIAL: Well, we built into that -- I think that's in the
reconstitution.
STAFF: The 30 billion includes the cost of bringing them home.
OFFICIAL: The cost of bringing them home.
Q: That $30 billion wasn't just to get them there, is it?
OFFICIAL: No. They had to come home.
ANOTHER DEFENSE OFFICIAL: (Off mike) -- conflict phase, it would just
presume that they go there and you bring them home; that was about a
$30 billion bill.
OFFICIAL: So it's round trip.
OFFICIAL: Which also explains, by the way, why it's such a large
proportion of the 62.6. You've already paid the return tickets.
Q: And coercive diplomacy --
OFFICIAL: But we only costed keeping them there for how long? The
issue was we're keeping them there -- this was if we sent them back on
March 17th, 18th, whatever the date was.
You had another question?
Q: Just the difference between coercive diplomacy and major conflict
phase.
OFFICIAL: Oh, it's very simple. Coercive diplomacy was when they were
all out there and we were still working with the U.N. and telling
Saddam to come to his senses. Major conflict is what you've been
seeing on television.
Q: Why wouldn't you call the $30 billion the buildup cost, the troop
buildup, instead of coercive diplomacy, especially with the stories
about paying off allies?
OFFICIAL: Well, somebody just asked me about Turkey. It's not clear
that we do pay off allies. Last time I checked, by the way, I don't
think we've paid off the Australians or the British or the Spanish
very much.
Q: No, I understand, but --
OFFICIAL: Okay? So wait a minute, wait a minute. No, no, no, I'm not
going to take that sitting down. I'm not going to let you off the hook
on this, because there is a notion abroad that somehow we are bribing
folks. Now, I'm the money guy, at least for this department, and I
haven't been party to bribing folks to sign up for this thing. And in
fact, what we're finding is the forces -- you know, the Brits, it's
costing them money, the Australians -- and lives; the Australians have
lost a couple journalists, and they've got guys at risk; and so on. So
this has not been a bribery, or a buying or whatever. And I think
there a real misconception about that.
Q: It's a strange title, if that's the case.
OFFICIAL: Not at all. I guarantee you Saddam wouldn't have paid any
attention if we were sitting back here and saying, "No, no, no."
Coercive diplomacy.
Yeah?
Q: Yeah. I may have missed this because I came in late, but I take it
that this does not cover the cost for a post-conflict --
OFFICIAL: Yeah, you came in late. Yeah, the -- there are some elements
in here that do address that. That's in this transitional and
stability phase. You've got some humanitarian assistance money, you've
got stability operations, and you've got fighting fires in oil fields.
And it's not clear that fires necessarily respond to somebody saying,
"The war's over."
Q: Sir?
OFFICIAL: Yes?
Q: Oh, you're -- (inaudible). (Laughter.)
Q: Is there any additional money in here for Afghanistan, or is that
all the --
OFFICIAL: There is money in here for the Afghan National Army [ANA],
for example. We drew down $165 million for the Afghan National Army,
and this replenishes that. So we've got that money.
We have money in here to reimburse the Pakistanis for what they're
doing in support of the conflict -- Operation Enduring Freedom. So
there are a number of areas where we have expended funds that are in
support of Operation Enduring Freedom.
Q: Do you have the total?
Q: How much is that Pakistan --
OFFICIAL: The Pakistan -- the total for Pakistan and others -- I mean,
it's just a guesstimate, you see, for Pakistan. Pakistan is in the
region of a billion dollars. I can't be certain, because this assumes
that we will -- they will be continuing to help us out through the end
of the fiscal year. We're just about halfway through that fiscal year.
It also allows funds for other folks that will be helping us either in
OEF [Operation Enduring Freedom] or that will put -- initially put out
support for this conflict. And that's not what you would call paying
people off. They have to put their forces in there. Then they -- it's
actually a very carefully analyzed process. With the Pakistanis, for
example, they come to us, and they say, "It's cost us such and such to
move our forces." And you know, what they've done, frankly, is move
forces away from the Indian border, for starters.
Then we have -- Central Command evaluates those bills, and then
program analysis evaluates those bills, and my office evaluates those
bills, and then we decide how much of those bills were really and
truly, funds that they would otherwise not have spent, and were only
done at our request.
So the Pakistanis are the most prominent case, but there may be
others. And it's -- up to now, of course, it's been only Enduring
Freedom. And there have been other countries that, as you know, are
really out on a financial limb to continue to support us.
Yeah.
Q: Operation Enduring Freedom already led to -- my figure may be wrong
here, but there was about $20 billion that the Defense Department had
needed above and beyond the last budget cycle to help make up for the
expenditure of that effort, right?
OFFICIAL: Well, we got 6.1, as you know, from the Hill, so that
brought it down to some 13.9. And then we included in that, for
instance, more support for countries like Pakistan. So that brought it
down. There was support for the ANA, so that brought it down. And
we've continued to reevaluate the figures. And there's also -- it also
turned out that many of the forces that we were predicating as being
in Enduring Freedom turns out they're in the region, but they're not
doing Enduring Freedom. But they're in the region. So we were able to
basically mesh those two sets of requirements and address them in this
-- again, these are estimates.
Q: Oh, so this includes --
SR. DEFENSE OFFICIAL: No, this is directed to the Iraqi requirement
with the explicit exceptions I gave you. Okay? Now, since there are
forces that clearly could have gone to OEF, they were in-theater, but
they're going to this. So there are forces that are going to this, so
that brought down the estimated future cost of OEF. And we're funding
them because those forces are going to this.
And so, you know, we've re-estimated, and the estimates of costs of
OEF itself are constantly undergoing review. We hope that we will have
enough to cover OEF as well as this. You know, again, I mean, this is
the best estimate we've got.
Q: It's possible --
SR. DEFENSE OFFICIAL: But these forces are meant for here.
Q: It's possible that you may have to go back at some point in the
near future, provided this prediction about a short conflict is borne
out in Iraq, and as for additional funds to support OEF?
OFFICIAL: We may not. I mean we just may not. We have to look at how
short is short, number one. We have to look at secondly what are we
still doing out in OEF. You know, you've been reading there are other
countries that are involved in supporting us, and even in the latest
operations, as you know.
So we have -- we'll be watching this one. Right now, we feel that
other than the ANA money and the Pakistan money, we are in reasonable
shape. Are we in perfect shape? No. But are we in good enough shape to
move along? Yes.
Yeah.
Q: Yeah, sir, what is the -- how soon does this have to pass? I mean,
when do you run out of money?
OFFICIAL: Well, I mean, we're being told by some of the services that
in some of their accounts, they're out of money by the beginning of
May. If it's doable -- and, you know, I mean, that's not really up to
us, it's up to the Congress; you know, we're going to send this thing
up tomorrow -- we would love to see this thing pass before the Easter
recess, which is -- they break up, I think, April 11th. But, you know,
that's not up to us. The Congress can be very quick. I mean, look at
what they did in September of '02 (sic). I mean, it was remarkable.
So, you know -- September of '01, I mean. Yeah, September '01.
Yeah.
Q: People are going to read that and get a little scared, because you
talked about the personnel accounts being one of the accounts that are
possibly running out of money. You don't mean that -- if Congress does
not pass this, the troops are going to continue getting paid, is that
correct?
OFFICIAL: Well, there will be a problem finding money for the
personnel accounts. What'll -- you know, if worse comes to the worse,
we're going to have to see some drastic actions done with the troops.
Look, we -- we have a shortfall. There's no two ways about it. And
this supplemental is geared to meeting that shortfall. How will the
services manage their personnel accounts? I mean, they'll do the best
they can to mitigate the problem for as long as possible, but if your
monies are running out, they're running out. And we're spending money
on Iraq every day. So, you know, we've got a serious problem here.
Q: Sir?
OFFICIAL: I am told by my handlers that I can only ask -- how many
more?
STAFF: Two more.
OFFICIAL: Two more. Okay, who hasn't asked one?
Q: Sir?
OFFICIAL: You haven't asked yet.
Q: Thank you. Is any of the coalition support funding earmarked for
Israel?
OFFICIAL: No.
Q: Has not Israel made a request, though, for funds to help them deal
with their --
SR. DEFENSE OFFICIAL: This is pure Defense Department funding. And as
I said, the arch example is Pakistan, where they have expended funds
on their forces to do things that we ask them to do; we have then
reviewed those expenditures, and then -- and we try to reimburse them.
What you're asking about is requests for funds for all kinds of
things, but not for that.
Q: Well, my understanding is that the Israelis were hoping to get
additional funds just to pay for the added strain on their military to
maintain a state of alertness because of the Iraqi threat.
OFFICIAL: That's a state of alert to protect their own country.
Q: But from the Iraqi threat.
OFFICIAL: Fine, but it's a state of alert to protect their own country
from the Iraqi threat. When Pakistan - which, after all is said and
done, isn't exactly totally sanguine about India -- moves its forces
from the Indian border to help us, that's a little different.
Q: Sir, the $489 million --
OFFICIAL: Oh, my; they've all caught this idea of "sir"; I love it.
(Laughter.)
Yes?
Q: (Off mike.)
Q: I'm going to call you "sir," regardless.
The $489 million that you have, is that allotted only to fight oil
fires? And if so --
OFFICIAL: No, it's not only to fight oil fires, but it's to fight --
that is remediation operations, essentially environmental-related.
Q: And is there a private company that has been given a contract to
help aid in this that you have awarded?
OFFICIAL: I'm not aware that they've been -- I know that there's talk
of giving contracts. I haven't followed the contracting process.
Q: But is there a particular figure from that 489 that you can give us
that's allotted to --
SR. DEFENSE OFFICIAL: We'll try to get it for you. We'll try to get it
for you.
Q: Is there a way to break down this transitional and stability?
OFFICIAL: So much for your two extra questions. (Laughter.) All right.
What, what?
Q: Transitional and stability phase? Can we get a sense of how much of
that is actually humanitarian or --
Q: (Health care ?) or --
OFFICIAL: Well, you still have the oil fields; it's relatively small.
The humanitarian -- again, I mean, that's why we have this as one sort
of floating account. We have to see. We have to see also who else is
contributing on the humanitarian side. That's not just us. In fact, we
would hope the rest of the world will kick in in a big way.
Q: But is this likely to keep forces there as a -- sort of in a (past
?) post-conflict phase? I mean, is that --
OFFICIAL: And for a very delimited period. This is not the idea of
keeping them there a whole bunch of years to do this kind of stuff. So
that's a different issue.
Q: But sir, how many soldiers? What's the assumption there for a
post-conflict force? General Shinseki got into a lot of trouble here
in this building when he gave a candid opinion. What is the --
OFFICIAL: Do you mean the rest of us don't give candid opinions?
Q: Sometimes not. (Laughter.) What's the assumption on this one in
terms of the force structure involved in a post-conflict?
SR. DEFENSE OFFICIAL: It's still flexible. And the reason that it is,
is that we are talking about assumptions about how much -- A, how much
resistance you've got; B, how much internal cooperation you've got.
And so I would say that I wouldn't want to be held to a specific
number.
STAFF: Thank you, folks.
OFFICIAL: Thanks.
Q: Thank you.
(end transcript)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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