Army Budget UpdateDPW Worldwide Workshop

Presented by:

MG Jerry L. Sinn

Deputy Assistant Secretary of the Army (Budget)

Agenda

• FY 02 Execution

• FY 03 Congressional Marks

• FY 02-04 Total Obligation Authority

• FY 03-04 Operation & Maintenance

• FY 03-04 Installation and Infrastructure

• FY 03 GWOT Concerns

• Summary

FY 02 Execution

FY02 Start

DERF Supp

Additional Supp

Omnibus Reprog

FY02 End

MILPERS $30.5 $0.3 $1.6 $0.2 $32.6

O&M 27.9 2.1 2.3 32.3

RDA 18.0 0.1 0.2 -0.2 18.1

MILCON / AFH 3.8 3.8

Other 1.6 0.1 1.7

TOTAL $81.8 $2.5 $4.2 $88.5

• DERF MILPERS = MPA only; excludes National Guard pay for FP missions and Airport Security (included in O&M)

• Additional FY02 Supp does not reflect potential Army reductions associated with rescinded funds

AnticipatedFY02 End

PB03 Request

House Senate Conf

Delta to PBNormalized for

Transfers and General Reductions

House/ Senate / ConfMil Per 32,600 35,620 35,275 35,470 35,344 -345/-150/-276O&M 32,300 30,641 30,152 30,278 30,224 -489/-363/-417Procurement 11,000 12,279 12,800 13,174 12,818 +521/+895/+539RDTE 7,100 6,918 7,443 7,410 7,670 '+525/+492/+752MILCON 2,400 1,638 1,755 1,940 2,026 +117/+302/+388AFH 1,400 1,405 1,397 1,397 1,381 -8/-8/-24Other 1,700 2,476 2,476 2,496 2,478 '0/+20/+2Total 88,500 90,977 91,298 92,165 91,941 +321/+1188/+964

• Data above may be adjusted upon further review

FY 03 Congressional Marks

$B

FY 02 - 04 TOA Comparison$88.5B $91.9B $97.4B

FY 02 – 04 TOA Comparisons

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

$45.0

FY 02 FY 03 FY 04

MILPERS

O&M

Procurement

RDT&E

MILCON

Other

$88.5B $91.9B $97.4B

• Readiness– Supports Ground and Air OPTEMPO– Funds Critical Training Enablers

• Integrated Training Area Management• Home Station Battle Simulation Centers• Simulation, Training & Instrumentation Command

– Supports ongoing Kosovo and Bosnia Operations– Supports Army Transformation

• Sustainment– Supports marginal growth in the Army’s Depot Maintenance

Program– Funds Depot Maintenance Recapitalization

• Installations and Infrastructure– Continues increased funding for BASOPS and SRM – Funds Antiterrorism/Force Protection(AT/FP) for Installation Closure– Implements Transformation Installation Management Initiative

Operation & Maintenance Summary

FY 2003

OMA80%

OMAR6%

OMNG14%

Installation & Infrastructure

• BASOPS/SRM – Above 82% Army Wide

• AT/FP (Adds $190M)

• TIM (Establishes 8 Regional Offices)

FY03 TOA $12.9B

02,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,000

($00

0)

Installation &Infrastructure - Other

Strategic MobilityInfrastructure

Facilities Revitalization

Information Infrastructure

SRM

Base Operations Support

1.1 1.1 1.0 1.11.2

1.51.4

2.3

1.6

FY

95

FY

96

FY

97

FY

98

FY

99

FY

00

FY

01

FY

02

FY

03

• Improves Facilities Across the Army– Continues Top Priority Whole Barracks Renewal– Constructs Facilities to Support Transformation– Supports Force Protection– Provides Reserve Component Centers, Maintenance

Shops & Other Facilities– Begins an Efficient Basing Initiative in Germany

Military Construction Summary

1.3

1.61.4

1.3 1.31.1 1.2

1.4 1.4

FY

95

FY

96

FY

97

FY

98

FY

99

FY

00

FY

01

FY

02

FY

03

9

• Supports Quality of Life for Soldiers

- Privatizes 17,000 Family Housing Units (MPA)

- Revitalizes 913 Family Housing Units

- Operates and Maintains 95,000 Units

- Leases 15,000 Off Post Housing Units

Family Housing ($B)

Family Housing Summary

Near Term Objectives

1. WTGWOT = Win The Global War On Terrorism

2. TTA = Transform The Army

3. FTRTDB = Find The Resources To Do Both

“No More 9-11”

10

Win The GWOT

MILPERS ($35.3B)• AC 480K• RC 555K• Pay Raise – 4.1% • BAH - On Post - Off Post• DHP (+65)• 26K RC Mob

O & M ($30.2B)• 800 Tank Miles • 14.0 Flying Hours• BASOPS (Svc)(>86%)• SRM (>75%)• 215K Civilians• AT/FP (+ $190M)• Depot Maint (+9%)• Kosovo/Bosnia Ops

Procurement($12.8B)• AT/FP• Training Ammo @ C1• War Reserves–14 items• Chemical Stockpile Disposal• Army Battle Command System

RDT&E ($7.7B)• Future Combat System• Smart Munitions• Comanche• Tactical Unmanned Aerial Vehicles

Concerns:• Cuts ($276M)• Cash Flowing• Supplemental?• Slower MOB ramp

Concerns:• Cuts ($417M)• Cash Flowing• Deferred Bills• Underfunded programs • Another Supplemental?

Concerns:• No Transfer Account

Concerns:• No Transfer Account

11

SUPP? SUPP? SUPP?

+ $3.4B for MILCON/AFH & 2.5B for Chem Demil/BRAC

Transform The Army (TTA)

People($43.9B) Man the Force Well Being Leader Development

Readiness($26.9B) Unit Training Sustainment Installation & Infrastructure

Transformation ($18.2B)

Interim($.9B)3rd Stryker BCT

332 IAVs

Legacy Force ($13.5B)Recapitalization

17 SystemsSustainmentEmploy DigitizationModernization of Existing Programs

Aviation (-25%)

Objective Force ($3.7B)Science &Technologies

FCS Comanche

Modernization Other

12

FY 02 Late & Smaller Supp Than Requested Stole $300M SRM Reprogramming Cancelled Programs Deferred Bills

13

FTRTD Both

FY 03?

$$Needs

OMB

OSD

ASA(FM&C)

WTGWOT + TTA

GWOT Funding Challenges

FY 03 ($B) GWOT Bills Current Level Ops*

$2.5 MILPERS $4.3 O&M

GWOT Billpayers Current Ops, No Supp $1.3 People Programs for MPA $4.3 Readiness Programs for O&M $1.2 Transformation Programs for MPA

GWOT Billpayers Current Ops, $2.5B Supp $2.5 Supplemental for MPA $4.3 Readiness for O&M

* Major costs drivers: RC Mob (Cap = 34.0K), Increased FPCON, OEF Deployments, Detainee operations (GTMO), Investigative Task Force

$6.5B+

$6.5B+

$6.5B+

10,000

15,000

20,000

25,000

30,000

35,000

40,000

FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02

Pres Bud Appropriation Act Actual Execution

Desert StormSomalia

Haiti

Bosnia x 2

SUPPLEMENTALS:

(FY02 Constant $M)

Bosnia x 3Kosovo x 2Readiness x 2Storm x 2

Why a Supplemental?Army O&M Trends (FY 92-02)

Enduring FreedomNoble Eagle

Peace DividendDeficit SpendingDefense Budget Freefall

Balanced Budget LegislationFreefall CorrectedManaged Decline

Budget Surplus BeginsGains in InvestmentO&M Budgets Flat

BUDGET TRENDS:

FY03 Budget is the largest since the Gulf War…. $91.9B (Defense and MILCON)

Meeting critical transformation requirements …..Objective Force 96%….. Interim Force 99%, but at risk if no supplemental

Recapitalization and Modernization of our Legacy Force, only 17 systems funded at 100%, overall 61%

RPM (SRM) funded at 75% and BASOPS funded at 86%, threatened by the Global War on Terrorism

Meeting the highest beginning AC end strength in years - 485K soldiers… will have to work hard to support with funds we have

Need $1-2B more for ONE, $2-5B more OEF, and 5 times that if we begin actions beyond the current ops

Summary

Office: SAFM-BUC-I

Telephone:

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DSN – 222-5886

Contact Information