Vice Chairman Christopher Shays' Opening Statement
for Hearing on Defense Department Budget Priorities FY 2004

The Committee will come to order.

Today's hearing will examine the Department of Defense budget request for fiscal year 2004. Our witness will be the Honorable Paul D. Wolfowitz, Deputy Secretary of Defense. Appearing with Secretary Wolfowitz will be Dov Zakheim, the Under Secretary of Defense and Chief Financial Officer. Also appearing will be Steven M. Kosiak, Director of Budget Studies at the Center for Strategic and Budgetary Assessments.

In the face of unprecedented threats to our domestic and international security, the defense budget must advance three overarching goals:

· to win the global war on terrorism;

· to invest in the procurements and people needed to sustain that effort;

· and to transform the Cold War military structure to meet 21st Century demands.

The President said his aim was "to move beyond marginal improvements - to replace existing programs with new technologies and strategies." He said securing our common defense will require spending more, and spending more wisely.

The fiscal year 2004 defense budget requests more. This committee and others will have to decide if the Department is capable of moving beyond marginal, often glacial, reforms to the wiser spending the President demands.

We are at war. Terrorism is being uprooted in Afghanistan. It appears more likely with each passing day Saddam Hussein will persist in refusing to comply with the United Nations, and that the United States will be required to lead a coalition of willing nations to disarm him. This budget reflects this Committee's commitment, and the commitment of every American, that the brave men and women of our military will have every resource they need in the difficult months and years to come.

One specific area raises concerns in that regard: individual protective equipment against chemical and biological (CB) weapons. The Government Reform Subcommittee on National Security, which I chair, was told last year of significant procurement shortfalls in key CB defense items. The Department's own 2002 report on the CB Defense Program pointed to high risk now, and in the out years, due to lagging procurements of modern protective garments, boots, gloves and collective protection shelters. I am concerned this budget does too little to close the gap between what it will take to protect U.S. forces on the contaminated battlefields of the future and the equipment we will be able to give them.

Nor does this budget appear to make any bold new steps toward solving the long festering dilemma of how to pay for all the tactical aircraft procurements now underway. More money for fewer planes is not a wise fiscal policy, nor will it address the problem of an aging air fleet.

This Committee has consistently provided the resources our armed forces have needed to do their job, including the $10-billion war reserve fund that was not appropriated until this month. Despite the controversy surrounding the appropriation of an undefined request, this Committee was willing to step up to the plate and provide the Department of Defense with the flexibility it asked for, and to do it in a timely fashion.

It is noteworthy and perhaps paradoxical that DOD officials have described the fiscal year 2004 budget request as a "peacetime budget." The reason, of course, is that the administration's budget does not include the cost of potential conflict with Iraq. We all know there are great uncertainties about the cost of disarming Saddam Hussein - uncertainties that make it difficult to put a precise number on the cost of possible military operations. But this Committee still needs to learn all it can about these costs.

Just yesterday, the White House released Pentagon estimates that the war and its immediate aftermath will cost between $60 and $95 billion. Today's Washington Post reports that some internal administration estimates show the cost growing above $100 billion.

It's worth noting that the 1991 Persian Gulf War cost $82.5 billion in current dollars, which brings me to another critical subject: burdensharing. In the Gulf War, the United States received financial contributions of over $48 billion from our allies. This time we are being presented with a bill in advance from countries I would argue will greatly and directly benefit from a regime change in Iraq. We have already agreed to a $15 billion aid package to Turkey in exchange for the rights to base American troops there, and we may also be increasing our aid to Jordan, Israel, Egypt, and others.

The bottom line is we need a better and fuller understanding of the financial commitments we are undertaking, and how much of these costs our allies are willing to bear.

Finally, there is the big picture: is the Pentagon's budget plan the right one for our long-term operations? Will it achieve the bold, transformational progress the President envisions, or will service rivalries and intransigent inefficiencies soak up any additional spending to feed a sluggish but voracious status quo?

That said, I want to repeat my assurance that this Committee will do everything in its power to assure that the men and women of our armed forces will receive the tools and the training they need to defeat terrorism and assure the safety of this nation.

I look forward to the testimony from our witnesses.